exv10w54



 





Execution Copy




EXHIBIT 10.54




AMENDMENT NO. 2 TO SECOND AMENDED AND RESTATED CREDIT

AGREEMENT

Dated as of March 8, 2004




          This AMENDMENT NO. 2 TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT (this
“Amendment”) is among PEABODY ENERGY CORPORATION, a Delaware corporation (the
“Borrower”), the Lenders (as defined below), FLEET NATIONAL BANK, as
administrative agent (in such capacity, the “Administrative Agent”), and
WACHOVIA BANK, NATIONAL ASSOCIATION and LEHMAN COMMERCIAL PAPER INC, as
syndication agents.



PRELIMINARY STATEMENTS:




          1. The Borrower, the Lenders and the Administrative Agent have entered
into that certain Second Amended and Restated Credit Agreement, dated as of
March 21, 2003, by and among the Borrower, the several lenders from time to
time parties thereto (the “Lenders”), Wachovia Bank, National Association and
Lehman Commercial Paper Inc., as syndication agents, Fleet Securities, Inc.,
Wachovia Capital Markets, LLC (formerly known as Wachovia Securities, Inc.) and
Lehman Brothers Inc., as arrangers, Morgan Stanley Senior Funding, Inc. and
U.S. Bank National Association, as documentation agents, and the Administrative
Agent (as amended through the date hereof, the “Credit Agreement”; capitalized
terms used and not otherwise defined herein have the meanings assigned to such
terms in the Credit Agreement).



          2. The Borrower (i) has requested that the Lenders amend the Credit
Agreement to, among other things, reduce the Applicable Margin on the Term
Loans and provide for additional Revolving Credit Commitments, (ii) has advised
the Lenders that it desires to consummate the Specified Acquisitions (as
defined below) and in connection therewith to potentially finance a portion of
the purchase price thereof with additional Term Loans under the Credit
Agreement or other Indebtedness and (iii) has requested that the Lenders amend
the Credit Agreement to permit the Specified Acquisitions, the possible
financing thereof with additional Term Loans or other Indebtedness, and certain
other amendments.



          3. Subject to the terms and conditions set forth below, and in
consideration of certain agreements of the Borrower and other Credit Parties
set forth herein and in the accompanying Consent of Credit Parties, the
Administrative Agent, the Syndication Agent and the requisite Lenders are
willing to agree to the amendment described below.



          NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:



 









 





          SECTION 1 Amendments to Credit Agreement. Upon the satisfaction of the
applicable conditions precedent set forth in Section 4, the Credit Agreement is
hereby amended as follows:



     (a) The following new definitions are hereby added to subsection 1.1 of
the Credit Agreement:




     “Revolving Increase Effective Date”: the date on
which the amendments contained in Sections 1(a), (c),
(d), (f) and (p) of the Second Amendment became effective
in accordance with its terms, which for all purposes
under this Agreement will be deemed to be March 8, 2004.




     “Second Amendment”: Amendment No. 2 to this
Agreement, dated as of March 8, 2004.




     “Specified Acquisitions”: the collective reference
to three transactions in which the Borrower will acquire
certain coal mining assets of RAG Coal International AG,
the total consideration for which is approximately
$500,000,000, on terms and conditions reasonably
satisfactory to the Administrative Agent, including,
without limitation, compliance with subsection 6.10.



     (b) The definition of “Consolidated EBITDA” contained in subsection 1.1 of
the Credit Agreement is hereby amended to insert the following proviso
immediately before the period at the end thereof:



“provided, further, that for purposes of calculating
Consolidated EBITDA of the Borrower, for any fiscal
quarter, (i) the Consolidated EBITDA of (A) the
businesses acquired in any Specified Acquisition by the
Borrower or any Restricted Subsidiary and (B) any other
business acquired by the Borrower or its Restricted
Subsidiaries if the EBITDA for the most recent
twelve-month period for which quarterly financial
statements are available of such business is equal to or
greater than 5% of the Borrower’s EBITDA for such
period, in each case, during such fiscal quarter shall
be included on a pro forma basis for such fiscal quarter
(assuming the consummation of such acquisition and the
incurrence or assumption of any Indebtedness in
connection therewith occurred on the first day of such
fiscal quarter) if the consolidated balance sheet of the
businesses acquired in such Specified Acquisition or
such other acquired business, as the case may be, as at
the end of the fiscal quarter preceding the date of such
acquisition and the related consolidated statements of
income and of cash flows for the fiscal quarter in
respect of which Consolidated EBITDA is to be calculated
(x) have been previously provided to the Administrative
Agent and (y) either (1) have been reported on without a
qualification arising out of the scope of the audit by




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independent certified public accountants of nationally
recognized standing or (2) have been found reasonably
acceptable by the Administrative Agent and (ii) the
Consolidated EBITDA of any business disposed of by the
Borrower or its Restricted Subsidiaries during such
fiscal quarter shall be excluded for such fiscal quarter
if the EBITDA for the most recent twelve-month period
for which quarterly financial statements are available
of such business constituted 5% or more of the
Borrower’s EBITDA for such period (assuming the
consummation or such disposition and the repayment of
any indebtedness in connection therewith occurred on the
first day of such fiscal quarter).”



     (c) The definition of “Lender Addendum” contained in subsection 1.1 of the
Credit Agreement is hereby amended and restated in its entirety as follows:



‘“Lender Addendum”: with respect to any Lender, a
Lender Addendum substantially in the form attached
hereto as Exhibit H.”



     (d) The definition of “Revolving Credit Commitment” contained in
subsection 1.1 of the Credit Agreement is hereby amended to replace the clause
“which shall be $600,000,000” with the following clause:



“which shall be equal to $600,000,000, as such amount
may be increased in accordance with subsection
2.1(a)(ii)”.



     (e) The definition of “Tangible Assets” contained in subsection 1.1 of the
Credit Agreement is hereby amended to add the following clause at the end of
clause (a) thereof and immediately prior to the word “minus”: “plus, to the
extent not otherwise included, any coal reserve held in fee or leasehold”.



     (f) Subsection 2.1(a)(ii) of the Credit Agreement is hereby amended to
insert the following at the end thereof:



“Provided that no Default or Event of Default has
occurred and is continuing and the Revolving Credit
Commitments have not been terminated, the Borrower shall
be entitled, at any time on or after the Revolving
Increase Effective Date but prior to April 15, 2004, with
the written consent of the Administrative Agent but
without any consent from the Lenders, except the Lenders
providing all or part of such increased amount, to
request an increase in the Revolving Credit Commitments
of up to $300,000,000 in the aggregate; and conforming
changes may be made to this Agreement by the
Administrative Agent to evidence such increase and
adjustments may be made among Revolving Credit Lenders to
cause all Revolving Credit Lenders to have extended their
pro rata share of the Revolving Extensions of Credit
after giving effect to any increase in the Revolving
Credit Commitments effected hereby.”




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     (g) Subsection 2.17 of the Credit Agreement is hereby amended to insert
the following clause immediately after the words “all Lenders” in the last
sentence thereof: “or all Lenders with respect to a particular Type of Loan or
all Lenders “directly affected” by such consent, waiver or amendment, in each
case”.



     (h) Subsection 7.2(d) of the Credit Agreement is hereby amended to insert
immediately after the words “and its Restricted Subsidiaries” in the first line
thereof the words “which are Guarantors under the Guarantee and Collateral
Agreement”.



     (i) Subsection 7.2(p) of the Credit Agreement is hereby amended to (1)
insert a “(i)” immediately prior to the words “of Peabody Energy Australia Pty
Ltd”, (2) replace the number “$50,000,000” with the number “$100,000,000” and
(3) insert the following clause immediately after the words “Guarantee and
Collateral Agreement”: “and (ii) of any Restricted Subsidiary of Peabody Energy
Australia Pty Ltd or Peabody COALTRADE Australia Pty Ltd to Peabody Energy
Australia Pty Ltd, Peabody COALTRADE Australia Pty Ltd or any other Restricted
Subsidiary thereof”.



     (j) Subsection 7.3(d) of the Credit Agreement is hereby amended to delete
clause (iii) in its entirety and replace it with the following new clause
(iii):



“(iii) Liens on (x) other assets not constituting
Collateral or (y) cash raised to support letters of
credit in connection with the issuance thereof with an
aggregate value under clauses (x) and (y) for all such
assets and cash not in excess of $100,000,000 at any
time, in each case to secure obligations under other
surety bonds, synthetic letters of credit, synthetic
term loans, credit linked deposits or other
obligations of like nature”.



     (k) Subsection 7.9(l) of the Credit Agreement is hereby amended to insert
immediately after the words “Unrestricted Subsidiaries”, the words “,
Restricted Subsidiaries”.



     (l) Subsection 7.9(p) of the Credit Agreement is hereby amended to (1)
insert a “(i)” immediately prior to the words “by the Borrower”, (2) insert the
following new clause immediately after the words “not to exceed $50,000,000”:
“and (ii) by any Restricted Subsidiary in Peabody Energy Australia Pty Ltd or
in Peabody COALTRADE Australia Pty Ltd to Peabody Energy Australia Pty Ltd,
Peabody COALTRADE Australia Pty Ltd or any other Restricted Subsidiary thereof”
and (3) replace the number “$50,000,000” with the number “$100,000,000”.



     (m) Subsection 7.9 of the Credit Agreement is hereby further amended to
(1) delete the word “and” at the end of subsection 7.9(o); (2) replace the “.”
at the end of subsection 7.9(p) with “; and” and (3) add the following new
subsection 7.9(q):



“(q) Investments by the Borrower or its Restricted Subsidiaries
made to effect any Specified Acquisition; provided that: (a)
immediately prior to and after giving effect to such Specified
Acquisition, no Default or Event of Default shall have occurred and
be continuing and (b) the Borrower shall be in pro forma compliance
with the covenants contained in subsection 7.1, calculated based on




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the relevant financial statements delivered pursuant to subsection
6.1 and based on the financial statements with respect to such
Specified Acquisition meeting the requirements set forth in the
last proviso of the definition of Consolidated EBITDA, as though
such Specified Acquisition occurred at the beginning of the period
covered thereby, and the Borrower shall have certified as to both
subclause (a) and (b) to the Administrative Agent in writing.”



     (n) Subsection 7.14 of the Credit Agreement is hereby amended to insert
the following sentence at the end thereof:



“Notwithstanding the foregoing, the Borrower or any of
its Restricted Subsidiaries who are Guarantors may
enter into agreements in connection with the
incurrence of indebtedness permitted by subsection
7.2(d) which prohibit or limit the ability of the
Borrower or such Restricted Subsidiary to create,
incur, assume or suffer to exist any Lien upon any of
its property, assets or revenue, whether now owned or
hereafter acquired except that no such prohibition or
limitation shall apply with respect to the Liens which
secure the Obligations.”



     (o) Schedule I to the Credit Agreement is hereby deleted in its entirety
and replaced with the Schedule I attached hereto as Exhibit A.



     (p) Exhibit H to the Credit Agreement is hereby deleted in its entirety
and replaced with the Exhibit H attached hereto as Exhibit B.



          SECTION 2 Additional Amendments to Credit Agreement. Upon the
satisfaction of the applicable conditions precedent set forth in Section 4, the
Credit Agreement is hereby further amended as follows:



     (a) The following new definitions are hereby added to subsection 1.1 of
the Credit Agreement:



“Acquisition Closing Date”: the earliest date on
which any Specified Acquisition is consummated.



“Acquisition Notes”: up to $500,000,000 in aggregate
principal amount of senior or senior subordinated
notes of the Borrower issued on or prior to the
Acquisition Closing Date to finance all or a portion
of the Specified Acquisitions (the “Initial
Acquisition Notes”), and any senior or senior
subordinated notes of the Borrower having the same
principal amount and other terms as the Initial
Acquisition Notes issued in exchange for the Initial
Acquisition Notes as contemplated by the Acquisition
Notes Documents.




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“Acquisition Notes Documents”: the Acquisition Notes
Indenture, the Australian Acquisition Notes Indenture,
the Acquisition Notes, the Australian Acquisition
Notes and any registration rights agreements and
purchase agreements executed in connection therewith,
in each case, in form and substance reasonably
satisfactory to the Administrative Agent.



“Acquisition Notes Indenture”: the Indenture among
the Borrower, the guarantors named therein and the
trustee named therein, as trustee, pursuant to which
the Acquisition Notes are issued, in form and
substance reasonably satisfactory to the
Administrative Agent.



“Australian Acquisition Notes”: up to $100,000,000 in
aggregate principal amount of senior or senior
subordinated notes of Peabody Energy Australia Pty Ltd
issued on or prior to the Acquisition Closing Date to
finance, or within 180 days thereof to refinance, a
portion of the Specified Acquisitions (the “Initial
Australian Acquisition Notes”), and any senior or
senior subordinated notes of Peabody Energy Australia
Pty Ltd having the same principal amount and other
terms as the Initial Australian Acquisition Notes
issued in exchange for the Initial Australian
Acquisition Notes as contemplated by the Acquisition
Notes Documents.



“Australian Acquisition Notes Indenture”: the
Indenture among Peabody Energy Australia Pty Ltd (or
any Subsidiary thereof) as issuer, and the Borrower,
as guarantor, and the trustee named therein, as
trustee, pursuant to which the Australian Acquisition
Notes are issued, in form and substance satisfactory
to the Administrative Agent.



     (b) The definition of “Change of Control” contained in subsection 1.1 of
the Credit Agreement is hereby amended to delete the final parenthetical
therein in its entirety and replace it with the following clause: “ or similar
term (as defined in the Senior Notes Indenture as in effect on the Effective
Date, or in the Acquisition Notes Indenture or the Australian Acquisition Notes
Indenture, in each case, as of the date of their respective issuance)”.



     (c) Subsection 4.5 of the Credit Agreement is hereby amended to replace
the words “and the Senior Notes Documents” with the words “, the Senior Notes
Documents and the Acquisition Notes Documents”.



     (d) Subsection 4.26 of the Credit Agreement is hereby amended to replace
the words “and under the Senior Notes Documents” with the words “and under the
Senior Notes Documents and the Acquisition Notes Documents”.



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     (e) Subsection 7.2 of the Credit Agreement is hereby amended to (1) delete
the word “and” at the end of subsection 7.2(o); (2) replace the “.” at the end
of subsection 7.2(p) with “; and” and (3) add the following new subsection
7.2(q):



"(q) unsecured Indebtedness of the Borrower under the
Acquisition Notes and unsecured Indebtedness of
Peabody Energy Australia Pty Ltd or a Subsidiary
thereof under the Australian Acquisition Notes in an
amount not to exceed $100,000,000; provided that the
aggregate amount of Indebtedness permitted under this
subsection 7.2(q) may not exceed $500,000,000 in the
aggregate less the aggregate amount of any other
Indebtedness incurred to finance any Specified
Acquisition.”



     (f) Subsection 7.4(b) of the Credit Agreement is hereby deleted in its
entirety and replaced with the following:



"(b) guarantees (i) made by the Subsidiaries of the
Borrower pursuant to the Senior Notes Indenture or the
Acquisition Notes Indenture; provided that such
Subsidiaries are parties to the Guarantee and
Collateral Agreement and (ii) made by the Borrower
pursuant to the Australian Acquisition Notes
Indenture”.



     (g) Subsection 7.4(h) of the Credit Agreement is hereby amended to replace
the words “and the Senior Notes Documents” with the words “the Senior Notes
Documents and the Acquisition Notes Documents”.



     (h) Subsection 7.9(n) of the Credit Agreement is hereby amended to replace
the words “of Senior Notes” with the words “of Senior Notes, Acquisition Notes
or Australian Acquisition Notes, in each case,”.



     (i) Subsection 7.10(a) of the Credit Agreement is hereby deleted its
entirety and restated as follows:



"(a) (1) Make any optional payment or prepayment on
or redemption or purchase of, or deliver any funds to
any trustee for the prepayment, redemption or
defeasance of (x) the Senior Notes (whether upon
acceleration of the maturity thereof, upon a “Change
of Control” (as defined in the Senior Notes Indenture)
or otherwise), (y) the Acquisition Notes (whether upon
acceleration of the maturity thereof, upon a “Change
of Control” or any similar term (as defined in the
Acquisition Notes Indenture) or otherwise) or (z) the
Australian Acquisition Notes (whether upon
acceleration of the maturity thereof, upon a “Change
of Control” or any similar term (as defined in the
Australian Acquisition Notes Indenture) or otherwise),
provided that, the Borrower may (i) prepay the Senior
Notes, the Acquisition Notes or the Australian
Acquisition Notes in connection with a refinancing of
such notes on terms no less




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favorable to the Borrower and the Lenders and (ii)
make any other optional payment, prepayment,
redemption, purchase or defeasance during the term of
this Agreement in an aggregate amount not in excess of
$100,000,000, or (2) amend, modify or change, or
consent or agree to any amendment, modification or
change to any of the material terms of any Senior
Notes Documents or the Acquisition Notes Documents
(other than any such amendment, modification or change
which would extend the maturity or reduce the amount
of any payment of principal thereof or which would
reduce the rate or extend the date for payment of
interest thereon).”



     (j) Subsection 7.10(c) of the Credit Agreement is hereby amended to
replace the words “any of the Senior Notes Documents” with the words “any of
the Senior Notes Documents or the Acquisition Notes Documents, in each case”.



     (k) Subsection 7.14 of the Credit Agreement is hereby amended to replace
the words “the Senior Notes Documents” in clause (b) thereof with the words
“the Senior Notes Documents or the Acquisition Notes Documents”.



          SECTION 3 Additional Amendments to Credit Agreement to be Effective on the
Acquisition Term Loan Effective Date. Upon satisfaction of the applicable
conditions precedent set forth in Sections 4 and 5, the Credit Agreement is
hereby further amended as follows:



     (a) The following new definitions are hereby added to subsection 1.1 of
the Credit Agreement:



“Acquisition Closing Date”: the earliest date on
which any Specified Acquisition is consummated.



“Acquisition Term Loan Commitment Date”: the 90th
day following the Repricing Effective Date.



“Acquisition Term Loan Lender”: any Lender having
an Acquisition Term Loan Commitment or an Acquisition
Term Loan Outstanding.



“Acquisition Term Loans”: the Loans made by the
Acquisition Term Loan Lenders pursuant to subsection
2.1(a)(iii).



“Acquisition Term Loan Commitment”: the commitment
of an Acquisition Term Loan Lender as set forth on
Schedule 1 to the Lender Addendum delivered by such
Lender (or, as the case may be, in the Assignment and
Acceptance pursuant to which such Lender became a party
hereto, as the same may be changed from time to time
pursuant to the terms hereof) to make an Acquisition Term
Loan to the



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Borrower pursuant to subsection 2.1(a)(iii);
provided that the original aggregate amount of the
Acquisition Term Loan Commitments shall not exceed
$500,000,000 (less the aggregate amount of any other
Indebtedness incurred to finance any Specified
Acquisition).



“Repricing Effective Date”: the date on which the
amendment contained in Section 1(o) of the Second
Amendment became effective in accordance with its terms,
which for all purposes under this Agreement will be
deemed to be March 9, 2004.



“Tranche B Term Loans”: the Loans made by the Term
Lenders to the Borrower pursuant to subsection 2.1(a)(i).



     (b) The definition of “Term Loans” contained in subsection 1.1 of the
Credit Agreement is hereby amended and restated in its entirety as follows:



‘“Term Loans”: the Tranche B Term Loans and the
Acquisition Term Loans.”



     (c) The definition of “Term Loan Commitment” contained in subsection 1.1
of the Credit Agreement is hereby amended to (1) replace the cross reference
“subsection 2.1(a)(i)” with “subsection 2.1(a)(i) or (iii)” and (2) replace the
phrase “which shall be $450,000,000” with the following phrase:



“which shall be equal to the sum of $450,000,000 plus
any Acquisition Term Loan Commitments received by the
Administrative Agent on or prior to the Acquisition
Term Loan Commitment Date (provided that such
Acquisition Term Loan Commitments shall not exceed
$500,000,000, less the aggregate amount of any other
Indebtedness incurred to finance any Specified
Acquisition)”.



     (d) The definition of “Type” contained in subsection 1.1 of the Credit
Agreement is hereby amended to replace the phrase “a Term Loan” with the
following phrase: “a Tranche B Term Loan, an Acquisition Term Loan”.



     (e) Subsection 2.1 of the Credit Agreement is hereby amended to (1)
replace the defined term “Term Loans” in each place it appears in subsection
2.1(a)(i) with the defined term “Tranche B Term Loans” and (2) add the
following new subsection 2.1(a)(iii):



“(iii) Acquisition Term Loans. So long as the
Acquisition Closing Date is on or prior to the
Acquisition Term Loan Commitment Date, each
Acquisition Term Loan Lender severally agrees to make
a term loan to the Borrower on the Acquisition Closing
Date in an aggregate principal amount equal to such
Lender’s Acquisition Term Loan Commitment.
Acquisition Term Loan Commitments not funded on the
Acquisition Closing Date, or




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if earlier, the Acquisition Term Loan Commitment Date,
will terminate without further obligation or liability
of the Acquisition Term Loan Lenders to the Borrower
with respect thereto. Proceeds of the Acquisition
Term Loans not used to fund a Specified Acquisition on
the Acquisition Closing Date shall be deposited in a
cash collateral account under the control of the
Administrative Agent for the benefit of the Secured
Parties and invested in Cash Equivalents (as directed
by the Borrower) until (i) used to fund a Specified
Acquisition or (ii) directed by the Borrower to be
used to repay the Acquisition Term Loans in accordance
with Section 2.6.”



     (f) Subsection 2.5(a) of the Credit Agreement is hereby amended (1) to
replace the defined term “Term Loans” in each place it appears therein with the
defined term “Tranche B Term Loans”, (2) insert a “(i)” immediately prior to
the phrase “The Borrower shall make” and (3) insert the following new
subsection 2.5(a)(ii):



“(ii) Scheduled Payments of Acquisition Term Loans.
The Borrower shall make principal payments on all of
the Acquisition Term Loans on March 31, June 30,
September 30 and December 31 of each year, (i)
commencing on September 30, 2004 and ending on March
31, 2009, in an amount equal to .25% of the aggregate
amount of Acquisition Term Loans funded on the
Acquisition Closing Date and (ii) on June 30, 2009,
September 30, 2009, December 31, 2009 and the
Termination Date, in an amount on each such date equal
to 25% of the aggregate amount of Acquisition Term
Loans outstanding on June 30, 2009; provided that the
scheduled installments of principal of the Acquisition
Term Loans set forth in this subsection 2.5(a)(ii)
shall be reduced in connection with any voluntary or
mandatory prepayments of the Acquisition Term Loans in
accordance with subsection 2.6 (as provided in such
subsection); and provided further than the Acquisition
Term Loans and all other amounts owed hereunder with
respect to the Acquisition Term Loans shall be paid in
full no later than the Termination Date, and the final
installment payable by the Borrower in respect of the
Acquisition Term Loans on such date shall be in an
amount, if such amount is different from that
specified above, sufficient to repay all amounts owing
by the Borrower under this Agreement with respect to
the Acquisition Term Loans.



     (g) Subsection 4.15 of the Credit Agreement is hereby amended to insert
the following sentence at the end thereof:



“Notwithstanding the foregoing, proceeds from the
Acquisition Term Loans shall be used solely to pay a
portion of the purchase price of the Specified
Acquisitions and pay related fees and expenses.”




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     (h) Schedule I to the Credit Agreement is hereby amended to include
thereon the Applicable Margin agreed to by the Acquisition Term Loan Lenders
and the Borrower for the Acquisition Term Loans; provided that if such
Applicable Margin is greater than the Applicable Margin for the Tranche B Term
Loans, Schedule I to the Credit Agreement is hereby additionally amended to
increase the Applicable Margin for the Tranche B Term Loans so that it is equal
to the Applicable Margin for the Acquisition Term Loans.




     SECTION 4 Conditions to Effectiveness of All Amendments.



     (a) The effectiveness of each of the amendments contained in Section 1, 2
and 3 of this Amendment is conditioned upon satisfaction of the following
conditions precedent:




     (i) the Administrative Agent shall have received signed written
authorization from the Required Lenders to execute this Amendment and
counterparts of this Amendment signed by the Borrower and counterparts of
the Consent of Credit Parties attached hereto (the “Consent”) signed by
the Credit Parties;




     (ii) each of the representations and warranties in Section 6 below
shall be true and correct in all material respects as of the date on
which such amendment becomes effective;




     (iii) in consideration of this Amendment, the Borrower shall have
paid to the Administrative Agent, for the account of each Revolving
Credit Lender that executes and returns to the Administrative Agent its
consent no later than 5:00 p.m. (New York time) on March 2, 2004, a fee
equal to 0.025% of such Lender’s Revolving Commitment (prior to giving
effect to any increase thereof pursuant to this Amendment) and the
Administrative Agent shall have received payment in immediately available
funds of all reasonable out-of-pocket costs and expenses incurred by the
Administrative Agent (including, without limitation, legal fees) and by
Wachovia Bank, National Association, in each case, for which invoices
have been presented;




     (iv) the Administrative Agent shall have received the executed legal
opinion of (x) Simpson, Thacher & Bartlett LLP, counsel to the Borrower
and special New York counsel to the other Credit Parties, (y) Jeffery
Klinger, Esq., special Missouri counsel to the Borrower and in-house
counsel to the other Credit Parties, in each case, in form and substance
reasonably acceptable to the Administrative Agent; and




     (v) the Administrative Agent shall have received such other
documents, instruments and opinions as it shall have reasonably
requested, including, without limitation, modifications to the Mortgages.



     (b) The effectiveness of the amendments contained in Sections 1(d) and (f)
and Section 3 of this Amendment are further conditioned upon the Administrative
Agent’s receipt of signed written authorization from the Requisite Class
Lenders to execute this Amendment.



     (c) The effectiveness of the amendment contained in Section 1(o) of this
Amendment is further conditioned upon the Administrative Agent’s receipt of
signed written authorization



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from all Term Lenders holding Term Loans (prior to the effectiveness of
any amendments contained in Section 2 hereof) to execute this Amendment.




     (d) The effectiveness of the amendments contained in Section 2 of this
Amendment is further conditioned on the Administrative Agent’s receipt, no
later than 5 Business Days prior to the estimated Acquisition Closing Date, of
a certificate of a Responsible Officer stating that the Borrower intends to
finance the Specified Acquisitions in whole or in part with the proceeds of the
Acquisition Notes and/or the Australian Acquisition Notes.



          SECTION 5 Additional Conditions to Effectiveness of Section 3 Amendments.
The effectiveness of the amendments contained in Section 3 of this Amendment
and of the requirement of any Acquisition Term Loan Lender to fund the
Acquisition Term Loans on the Acquisition Closing Date are additionally
conditioned upon satisfaction of the following conditions precedent on or prior
to the 90th day after the effectiveness of Section 1(o) of this Amendment (the
date on which all such conditions have been satisfied (in addition to the prior
satisfaction of the conditions set forth in Sections 4(a) and (b) being
referred to herein as the “Acquisition Term Loan Effective Date”):



     (a) Each of the representations and warranties in Section 6 below shall be
true and correct in all material respects on and as of the Acquisition Term
Loan Effective Date;



     (b) The Administrative Agent shall have received (i) additional
commitments from banks and other financial institutions with respect to the
Acquisition Term Loans in an aggregate principal amount equal to the lesser of
(A) $500,000,000 and (B) the amount intended to be borrowed by the Borrower on
the Acquisition Closing Date and (ii) a fully executed Lender Addendum with
respect to each such bank or other financial institution committing to fund
such Acquisition Term Loans (and pursuant to which on the Acquisition Term Loan
Effective Date such bank or other financial institution shall become an
Acquisition Term Loan Lender for all purposes under the Credit Agreement and
the other Credit Documents);



     (c) The Administrative Agent shall have received payment in immediately
available funds of all reasonable out-of-pocket costs and expenses incurred by
the Administrative Agent (including, without limitation, legal fees) and by
Wachovia Bank, National Association, in each case, for which invoices have been
presented, on or before the Acquisition Term Loan Effective Date;



     (d) The Borrower shall have paid to each of the Lenders with Acquisition
Term Loan Commitments any applicable upfront fees; and



     (e) The Administrative Agent shall have received such other documents,
instruments, and opinions as it may reasonably request, including, without
limitation, a solvency certificate.



          SECTION 6 Representations and Warranties. The Borrower represents and
warrants to the Administrative Agent and the Lenders as follows:



     (a) Authority. Each of the Credit Parties has the requisite corporate
power and authority to execute and deliver this Amendment and the Consent, as
applicable, and to perform



12









 




its obligations hereunder and under the Credit Documents (as modified
hereby). The execution, delivery and performance by the Borrower and each
other Credit Party of this Amendment, the Consent (as applicable), the Credit
Documents (as modified hereby) and the transactions contemplated hereby and
thereby have been duly approved by all necessary corporate action of such
Person and no other corporate proceedings on the part of such Person are
necessary to consummate such transactions.




     (b) No Legal Bar. The execution and delivery of this Amendment and of the
Consent by each Credit Party party thereto, and the performance of the Credit
Agreement and each other Credit Document, as amended hereby, by the Borrower
and each other Credit Party party thereto, the borrowing and the use of
proceeds of the Loans made pursuant to the increase in the Revolving Credit
Commitment and the Acquisition Term Loans: (i) will not violate any
Requirement of Law or any Contractual Obligation applicable to or binding, the
Borrower any Restricted Subsidiary or any of their respective properties or
assets and (ii) will not result in the creation or imposition of a Lien on any
of its properties or assets pursuant to any Requirement of Law applicable to it
or any of its Contractual Obligations, except for the Liens arising under the
Credit Documents.



     (c) Enforceability. This Amendment has been duly executed and delivered
by the Borrower. The Consent has been duly executed and delivered by each
Credit Party. This Amendment, the Consent and each Credit Document (as
modified hereby) is the legal, valid and binding obligation of each Credit
Party hereto and thereto, enforceable against such Credit Party in accordance
with its terms, subject to the effects of bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws relating to or
affecting creditors’ rights generally, general equitable principles (whether
considered in a proceeding in equity or at law) and an implied covenant of good
faith and fair dealing, and is in full force and effect.



     (d) Representations and Warranties. The representations and warranties
contained in each Credit Document (other than any such representations and
warranties that, by their terms, are specifically made as of a date other than
the date hereof) are true and correct in all material respects on and as of the
date hereof as though made on and as of the date hereof.



     (e) No Default. Both immediately before and after giving effect to the
amendments set forth in Section 1, 2 and 3 hereof, or any portion thereof, no
event has occurred and is continuing that constitutes a Default or Event of
Default.



SECTION 7 Reference to and Effect on Credit Agreement.




     (a) Upon and after the effectiveness of this Amendment, each reference in
the Credit Agreement to “this Agreement”, “hereunder”, “hereof” or words of
like import referring to the Credit Agreement, and each reference in the other
Credit Documents to “the Credit Agreement”, “thereunder”, “thereof” or words of
like import referring to the Credit Agreement, shall mean and be a reference to
the Credit Agreement as modified hereby.



     (b) Except as specifically modified above, the Credit Agreement and the
other Credit Documents are and shall continue to be in full force and effect
and are hereby in all respects ratified and confirmed. Without limiting the
generality of the foregoing, the Security



13









 




Documents and all of the Collateral described therein do and shall
continue to secure the payment of all Obligations under and as defined therein,
in each case as modified hereby.




     (c) The execution, delivery and effectiveness of this Amendment shall not,
except as expressly provided herein, operate as a waiver of any right, power or
remedy of the Administrative Agent or any Lender under any of the Credit
Documents, nor, except as expressly provided herein, constitute a waiver or
amendment of any provision of any of the Credit Documents.



     (d) For the avoidance of doubt, the amendments contained in Section 1
hereof may become and thereafter will remain effective regardless of whether
the amendments contained in Section 2 or 3 hereof become effective, and the
amendments in Section 2 or Section 3 hereof may become and
thereafter will
remain effective regardless of whether the amendments contained in the other
such Section become effective.



          SECTION 8 Counterparts. This Amendment may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed to be an original and all
of which taken together shall constitute one and the same agreement. Delivery
of an executed counterpart of a signature page to this Amendment by facsimile
shall be effective as delivery of a manually executed counterpart of this
Amendment or such Consent.



          SECTION 9 Severability. Any provision of this Amendment that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.



          SECTION 10 Governing Law. This Amendment shall be governed by, and
construed in accordance with, the laws of the State of New York.



(signature page follows)





14









 








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



	 	 	 	 	 
	 	 	PEABODY ENERGY CORPORATION,
	 	 	a Delaware corporation
	 
	 	 	 	 
	

	 	By:	 	 
	

	 	 	 	
 
	

	 	 	 	Name:
	

	 	 	 	Title:
	 
	 	 	 	 
	 	 	FLEET NATIONAL BANK,
	 	 	as Administrative Agent, on behalf of
the
Required Lenders
	 
	 	 	 	 
	

	 	By:	 	 
	

	 	 	 	
 
	

	 	 	 	Name:
	

	 	 	 	Title:
	 
	 	 	 	 
	 	 	WACHOVIA BANK, NATIONAL ASSOCIATION,
	 	 	as Syndication Agent
	 
	 	 	 	 
	

	 	By:	 	 
	

	 	 	 	
 
	

	 	 	 	Name:
	

	 	 	 	Title:
	 
	 	 	 	 
	 	 	LEHMAN COMMERCIAL PAPER INC.,
	 	 	as Syndication Agent
	 
	 	 	 	 
	

	 	By:	 	 
	

	 	 	 	
 
	

	 	 	 	Name:
	

	 	 	 	Title:







 









 






CONSENT OF CREDIT PARTIES

Dated as of March 8, 2004




          The undersigned, as Guarantors and as Grantors under the “Guarantee and
Collateral Agreement”, as Grantors under the “Trademark Security Agreement” and
each “Patent Security Agreement” and as Mortgagors under each “Mortgage” (as
such terms are defined in and under the Credit Agreement referred to in the
foregoing Amendment No. 2), as applicable, each hereby consents and agrees to
the foregoing Amendment No. 2 and hereby confirms and agrees that (i) each of
the Guarantee and Collateral Agreement, the Trademark Security Agreement, each
Patent Security Agreement and each Mortgage is, and shall continue to be, in
full force and effect and is hereby ratified and confirmed in all respects
except that, upon the effectiveness of all or any portion of, said Amendment
No. 2, each reference in the Guarantee and Collateral Agreement, the Trademark
Security Agreement, each Patent Security Agreement and each Mortgage to the
“Credit Agreement”, “thereunder”, “thereof” and words of like import referring
to the Credit Agreement, shall mean and be a reference to the Credit Agreement
as modified by said Amendment No. 2 (or such portion thereof), (ii) the
Guarantee and Collateral Agreement and all of the Collateral described therein
does, and shall continue to, secure the payment of all of the Obligations as
defined in the Guarantee and Collateral Agreement, (iii) the Trademark Security
Agreement and all of the Collateral described therein does, and shall continue
to, secure the payment of all of the Obligations as defined in the Guarantee
and Collateral Agreement, (iv) each Patent Security Agreement and all of the
Collateral described therein does, and shall continue to, secure the payment of
all of the Obligations as defined in the Guarantee and Collateral Agreement and
(v) each Mortgage and all of the Collateral described therein does, and shall
continue to, secure the payment of all of the Obligations as defined in the
Guarantee and Collateral Agreement.



(signature pages follow)




 









 








          IN WITNESS WHEREOF, the parties hereto have caused this Consent of Credit
Parties to be executed by their respective officers thereunto duly authorized,
as of the date first written above.


PEABODY ENERGY CORPORATION

AFFINITY MINING COMPANY

ARCLAR COMPANY, LLC

ARID OPERATIONS INC.

BEAVER DAM COAL COMPANY

BIG RIDGE, INC.

BIG SKY COAL COMPANY

BLACK BEAUTY EQUIPMENT COMPANY

BLACK BEAUTY HOLDING COMPANY, LLC

BLACK BEAUTY MINING, INC.

BLACK BEAUTY RESOURCES, INC.

BLACK BEAUTY UNDERGROUND, INC.

BLACK WALNUT COAL COMPANY

BLUEGRASS COAL COMPANY

BTU WORLDWIDE, INC.

CABALLO COAL COMPANY

CHARLES COAL COMPANY

CLEATON COAL COMPANY

COAL PROPERTIES CORP.

COOK MOUNTAIN COAL COMPANY

COTTONWOOD LAND COMPANY

CYPRUS CREEK LAND COMPANY

EACC CAMPS, INC.

EAGLE COAL COMPANY

EASTERN ASSOCIATED COAL CORP.

EASTERN ROYALTY CORP.

EMPIRE MARINE, LLC

FALCON COAL COMPANY

GALLO FINANCE COMPANY

GIBCO MOTOR EXPRESS, LLC

GOLD FIELDS CHILE, S.A.

GOLD FIELDS MINING CORPORATION

GOLD FIELDS OPERATING CO. - ORTIZ

GRAND EAGLE MINING, INC.

HAYDEN GULCH TERMINAL, INC.

HIGHLAND MINING COMPANY

HIGHWALL MINING SERVICES COMPANY

HILLSIDE MINING COMPANY

INDEPENDENCE MATERIAL HANDLING COMPANY



 









 







INDIAN HILL COMPANY

INTERIOR HOLDINGS CORP.

JAMES RIVER COAL TERMINAL COMPANY

JARRELL’S BRANCH COAL COMPANY

JUNIPER COAL COMPANY

KAYENTA MOBILE HOME PARK, INC.

LOGAN FORK COAL COMPANY

MARTINKA COAL COMPANY

MIDCO SUPPLY AND EQUIPMENT CORPORATION

MIDWEST COAL ACQUISITION CORP.

MOUNTAIN VIEW COAL COMPANY

NORTH PAGE COAL CORP.

OHIO COUNTY COAL COMPANY

PDC PARTNERSHIP HOLDINGS, INC.

PEABODY AMERICA, INC.

PEABODY COAL COMPANY

PEABODY COALSALES COMPANY

PEABODY COALTRADE, INC.

PEABODY ENERGY GENERATION HOLDING

PEABODY ENERGY INVESTMENTS, INC.

PEABODY ENERGY SOLUTIONS, INC.

PEABODY HOLDING COMPANY, INC.

PEABODY SOUTHWESTERN COAL COMPANY

PEABODY TERMINALS, INC.

PEABODY VENEZUELA COAL CORP.

PEABODY WESTERN COAL COMPANY

PINE RIDGE COAL COMPANY

POND RIVER LAND COMPANY

POWDER RIVER COAL COMPANY

RIO ESCONDIDO COAL CORP.

RIVERS EDGE MINING, INC.

RIVERVIEW TERMINAL COMPANY

SENECA COAL COMPANY

SENTRY MINING COMPANY

SNOWBERRY LAND COMPANY

STERLING SMOKELESS COAL COMPANY

SUGAR CAMP PROPERTIES

YANKEETOWN DOCK CORPORATION



	 	 	 	 	 
	 	 	 
	 	By:  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 




(signatures continued next page)




 









 








	 	 	 	 	 
	 	 	BLACK BEAUTY COAL COMPANY
	

	 	By:
	 	Thoroughbred, L.L.C.,
	

	 	 	 	a Delaware limited liability company, its Partner
	 
	 	 	 	 
	

	 	By:	 	 
	

	 	 	 	
 
	

	 	 	 	Name:
	

	 	 	 	Title:
	 
	 	 	 	 
	 	 	BLACK HILLS MINING CO., LLC
	

	 	By:
	 	Peabody Energy Corporation,
	

	 	 	 	a Delaware corporation, its Sole Member
	 
	 	 	 	 
	

	 	By:	 	 
	

	 	 	 	
 
	

	 	 	 	Name:
	

	 	 	 	Title:
	 
	 	 	 	 
	 	 	BLACK STALLION COAL COMPANY, LLC
	

	 	By:
	 	Black Walnut Coal Company,
	

	 	 	 	its Sole Member
	 
	 	 	 	 
	

	 	By:	 	 
	

	 	 	 	
 
	

	 	 	 	Name:
	

	 	 	 	Title:
	 
	 	 	 	 
	 	 	BTU VENEZUELA LLC
	

	 	By:
	 	Peabody Energy Corporation,
	

	 	 	 	a Delaware corporation, its Sole Member
	 
	 	 	 	 
	

	 	By:	 	 
	

	 	 	 	
 
	

	 	 	 	Name:
	

	 	 	 	Title:
	 
	 	 	 	 
	 	 	COLONY BAY COAL COMPANY
	

	 	By:
	 	Charles Coal Company,
	

	 	 	 	a Delaware corporation, its General Partner
	 
	 	 	 	 
	

	 	By:	 	 
	

	 	 	 	
 
	

	 	 	 	Name:
	

	 	 	 	Title:







(signatures continued next page)




 








 





	 	 	 	 	 	 	 
	 	 	CYPRUS CREEK LAND RESOURCES, LLC
	 	 	By:	 	Peabody Development Company, LLC
	

	 	 	 	By:
	 	Peabody Holding Company, Inc.
	

	 	 	 	 	 	a New York corporation, its Sole Member
	 
	 	 	 	 	 	 
	

	 	 	 	By:	 	 
	

	 	 	 	 	 	
 
	

	 	 	 	 	 	Name:
	

	 	 	 	 	 	Title:
	 
	 	 	 	 	 	 
	 	 	KANAWHA RIVER VENTURES I, LLC
	 	 	By:	 	Snowberry Land Company,
	 	 	 	 	its Member
	 
	 	 	 	 	 	 
	

	 	By:	 	 	 	 
	 	 	 	 	
 
	

	 	 	 	Name:	 	 
	

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 	 	MUSTANG ENERGY COMPANY, L.L.C.
	 	 	By:	 	Peabody Energy Corporation,
	 	 	 	 	a Delaware corporation, its Sole Member
	 
	 	 	 	 	 	 
	

	 	By:	 	 	 	 
	 	 	 	 	
 
	

	 	 	 	Name:	 	 
	

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 	 	PATRIOT COAL COMPANY, L.P.
	 	 	By:	 	Bluegrass Coal Company,
	 	 	 	 	a Delaware corporation, its Partner
	 
	 	 	 	 	 	 
	

	 	By:	 	 	 	 
	 	 	 	 	
 
	

	 	 	 	Name:	 	 
	

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 	 	By:	 	Sentry Mining Company,
	 	 	 	 	a Delaware corporation, its Partner
	 
	 	 	 	 	 	 
	

	 	By:	 	 	 	 
	 	 	 	 	
 
	

	 	 	 	Name:	 	 
	

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 







(signatures continued next page)




 









 








	 	 	 	 	 	 	 	 	 
	 	 	PEABODY ARCHVEYOR, L.L.C.
	 	 	 	 	By:	 	Gold Fields Mining Corporation,
	 	 	 	 	 	 	a Delaware corporation, its Sole Member
	 
	 	 	 	 	 	 	 	 
	

	 	 	 	By:	 	 	 	 
	 	 	 	 	 	 	
 
	

	 	 	 	 	 	Name:	 	 
	

	 	 	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	PEABODY DEVELOPMENT COMPANY, LLC
	 	 	 	 	By:	 	Peabody Holding Company, Inc.

a New York corporation, its Sole Member
	 
	 	 	 	 	 	 	 	 
	

	 	 	 	By:	 	 	 	 
	 	 	 	 	 	 	
 
	 	 	 	 	 	 	Name:
	 	 	 	 	 	 	Title:
	 
	 	 	 	 	 	 	 	 
	 	 	PEABODY DEVELOPMENT LAND HOLDINGS, LLC
	 	 	 	 	By:	 	Peabody Development Company, LLC
	

	 	 	 	 	 	By:
	 	Peabody Holding Company, Inc.
	

	 	 	 	 	 	 	 	a New York corporation, its Sole Member
	

	 	 	 	 	 	By:	 	 
	

	 	 	 	 	 	 	 	
 
	

	 	 	 	 	 	 	 	Name:
	

	 	 	 	 	 	 	 	Title:
	 	 	 	 	By:	 	Peabody Holding Company, Inc.,
	 	 	 	 	 	 	a New York corporation, its Member
	 
	 	 	 	 	 	 	 	 
	

	 	 	 	By:	 	 	 	 
	 	 	 	 	 	 	
 
	 	 	 	 	 	 	Name:
	 	 	 	 	 	 	Title:
	 
	 	 	 	 	 	 	 	 
	 	 	PEABODY NATURAL GAS, LLC
	 	 	 	 	By:	 	Peabody Holding Company, Inc.,
	 	 	 	 	 	 	a New York corporation, its Sole Member
	 
	 	 	 	 	 	 	 	 
	

	 	 	 	By:	 	 	 	 
	 	 	 	 	 	 	
 
	 	 	 	 	 	 	Name:
	 	 	 	 	 	 	Title:
	 
	 	 	 	 	 	 	 	 







(signatures continued next page)




 









 









	 	 	 	 	 	 	 	 	 
	 	 	PEABODY NATURAL RESOURCES COMPANY
	 	 	 	 	By:	 	Gold Fields Mining Corporation,

a Delaware corporation, its Partner
	 
	 	 	 	 	 	 	 	 
	

	 	 	 	By:	 	 	 	 
	 	 	 	 	 	 	
 

	 	 	 	 	 	 	
Name:
	

	 	 	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	By:	 	Peabody America, Inc.,

a Delaware corporation, its Partner
	 
	 	 	 	 	 	 	 	 
	

	 	 	 	By:	 	 	 	 
	 	 	 	 	 	 	
 
	

	 	 	 	 	 	Name:	 	 
	

	 	 	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	PEABODY POWERTREE INVESTMENTS, LLC
	 	 	 	 	By:	 	Peabody Energy Corporation,

a Delaware corporation, its Sole Member
	 
	 	 	 	 	 	 	 	 
	

	 	 	 	By:	 	 	 	 
	 	 	 	 	 	 	
 
	

	 	 	 	 	 	Name:	 	 
	

	 	 	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	PEABODY RECREATIONAL LANDS, L.L.C.
	 	 	 	 	By:	 	Peabody Development Company, LLC
	

	 	 	 	 	 	By:
	 	Peabody Holding Company, Inc.

a New York corporation, its Sole Member
	 
	 	 	 	 	 	 	 	 
	

	 	 	 	 	 	By:	 	 
	

	 	 	 	 	 	 	 	
 
	

	 	 	 	 	 	 	 	Name:
	

	 	 	 	 	 	 	 	Title::
	 
	 	 	 	 	 	 	 	 
	 	 	PEABODY-WATERSIDE DEVELOPMENT, L.L.C.
	 	 	 	 	By:	 	Peabody Development Company, LLC
	

	 	 	 	 	 	By:
	 	Peabody Holding Company, Inc.

a New York corporation, its Sole Member
	 
	 	 	 	 	 	 	 	 
	

	 	 	 	 	 	By:	 	 
	

	 	 	 	 	 	 	 	
 
	

	 	 	 	 	 	 	 	Name:
	

	 	 	 	 	 	 	 	Title:







(signatures continued next page)





 










 





	 	 	 	 	 	 	 	 	 
	 	 	PEC EQUIPMENT COMPANY, LLC
	

	 	 	 	 	 	By:
	 	Peabody Energy Corporation,
	

	 	 	 	 	 	 	 	a Delaware corporation, its Sole Member
	 
	 	 	 	 	 	 	 	 
	

	 	 	 	 	 	By:	 	 
	

	 	 	 	 	 	 	 	
 
	

	 	 	 	 	 	 	 	Name:
	

	 	 	 	 	 	 	 	Title:
	 
	 	 	 	 	 	 	 	 
	 	 	POINT PLEASANT DOCK COMPANY, LLC
	

	 	 	 	 	 	By:
	 	Peabody Energy Corporation,
	

	 	 	 	 	 	 	 	a Delaware corporation, its Sole Member
	

	 	 	 	 	 	By:	 	 
	

	 	 	 	 	 	 	 	
 
	

	 	 	 	 	 	 	 	Name:
	

	 	 	 	 	 	 	 	Title:
	 
	 	 	 	 	 	 	 	 
	 	 	POND CREEK LAND RESOURCES, LLC
	

	 	 	 	 	 	By:
	 	Peabody Coal Company,
	

	 	 	 	 	 	 	 	a Delaware corporation, its Sole Member
	

	 	 	 	 	 	By:	 	 
	

	 	 	 	 	 	 	 	
 
	

	 	 	 	 	 	 	 	Name:
	

	 	 	 	 	 	 	 	Title:
	 
	 	 	 	 	 	 	 	 
	 	 	PORCUPINE PRODUCTION, LLC
	

	 	 	 	 	 	By:
	 	Peabody Development Company, LLC
	

	 	 	 	 	 	
	 	By: Peabody Holding Company, Inc.
	

	 	 	 	 	 	 	 	a
New York corporation, its Sole Member

	

	 	 	 	 	 		 	By:
	

	 	 	 	 	 	 	 	 
 
	

	 	 	 	 	 	 	 	Name:

	

	 	 	 	 	 	 	 	Title:

	 
	 	 	 	 	 	 	 	 
	 	 	PORCUPINE TRANSPORTATION, LLC
	

	 	 	 	 	 	By:
	 	Peabody Development Company, LLC
	

	 	 	 	 	 	
	 	By: Peabody Holding Company, Inc.
	

	 	 	 	 	 	 	 	a
New York corporation, its Sole Member

	

	 	 	 	 	 		 	By:
	

	 	 	 	 	 	 	 	
 
	

	 	 	 	 	 	 	 	Name:

	

	 	 	 	 	 	 	 	Title:








(signatures continued
next page)




 









 








	 	 	 	 	 	 	 
	 	 	PRAIRIE STATE GENERATING COMPANY, LLC
	

	 	 	 	By:
	 	Peabody Energy Corporation,
	

	 	 	 	 	 	a Delaware corporation, its Sole Member
	

	 	 	 	By:	 	 
	

	 	 	 	 	 	
 
	

	 	 	 	 	 	Name:
	

	 	 	 	 	 	Title:
	 
	 	 	 	 	 	 
	 	 	STAR LAKE ENERGY COMPANY, L.L.C.
	

	 	 	 	By:
	 	Peabody Energy Corporation,
	

	 	 	 	 	 	a Delaware corporation, its Sole Member
	

	 	 	 	By:	 	 
	

	 	 	 	 	 	
 
	

	 	 	 	 	 	Name:
	

	 	 	 	 	 	Title:
	 
	 	 	 	 	 	 
	 	 	THOROUGHBRED, L.L.C.
	

	 	 	 	By:
	 	Peabody Holding Company, Inc.,
	

	 	 	 	 	 	a New York corporation, its Member
	

	 	 	 	By:	 	 
	

	 	 	 	 	 	
 
	

	 	 	 	 	 	Name:
	

	 	 	 	 	 	Title:
	 
	

	 	 	 	By:
	 	Peabody Development Company, LLC
	

	 	 	 	By:
	 	Peabody Holding Company, Inc.
	

	 	 	 	 	 	a New York corporation, its Sole Member
	

	 	 	 	By:	 	 
	

	 	 	 	 	 	
 
	

	 	 	 	 	 	Name:
	

	 	 	 	 	 	Title:
	 
	 	 	 	 	 	 
	 	 	THOROUGHBRED GENERATING COMPANY, LLC
	

	 	 	 	By:
	 	Peabody Energy Corporation,
	

	 	 	 	 	 	a Delaware corporation, its Sole Member
	

	 	 	 	By:	 	 
	

	 	 	 	 	 	
 
	

	 	 	 	 	 	Name:
	

	 	 	 	 	 	Title:





(signatures continued
next page)



 









 









	 	 	 	 	 	 	 
	 	 	THOROUGHBRED MINING COMPANY, L.L.C.
	

	 	 	 	By:
	 	Peabody Energy Corporation,
	

	 	 	 	 	 	a Delaware corporation, its Sole Member
	

	 	 	 	By:	 	 
	

	 	 	 	 	 	
 
	

	 	 	 	 	 	Name:
	

	 	 	 	 	 	Title:
	 
	 	 	 	 	 	 
	 	 	WILLIAMSVILLE COAL COMPANY, LLC
	

	 	 	 	By:
	 	Midwest Coal Acquisition Corp.,
	

	 	 	 	 	 	its Sole Member
	

	 	 	 	By:	 	 
	

	 	 	 	 	 	
 
	

	 	 	 	 	 	Name:
	

	 	 	 	 	 	Title:








 










 





EXHIBIT A




Schedule I

to Credit Agreement




Pricing Grids




	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Consolidated Total	 	 	 	 	 	 	 	 
	Obligations to	 	Revolving Credit	 	Revolving Credit	 	Tranche B Term Loan	 	Tranche B Term Loan
	Consolidated EBITDA	 	Facility Applicable	 	Facility Applicable	 	Applicable Margin -	 	Applicable Margin -
	Ratio
	 	Margin -LIBOR Rate
	 	Margin - Base Rate
	 	LIBOR Rate
	 	Base Rate

	33.75x
	 	 	2.500	%	 	 	1.500	%	 	 	1.75	%	 	 	0.75	%
	33.25x
	 	 	2.250	%	 	 	1.250	%	 	 	1.75	%	 	 	0.75	%
	32.75x
	 	 	2.000	%	 	 	1.000	%	 	 	1.75	%	 	 	0.75	%
	32.25x
	 	 	1.750	%	 	 	0.750	%	 	 	1.75	%	 	 	0.75	%
	<2.25x
	 	 	1.500	%	 	 	0.500	%	 	 	1.75	%	 	 	0.75	%







	 	 	 	 	 
	Usage Ratio
	 	Commitment Fee

	366.67%
	 	 	0.250	%
	333.33%
	 	 	0.375	%
	<33.33%
	 	 	0.500	%







 









 






EXHIBIT B




FORM OF LENDER ADDENDUM




     Reference is made to the Second Amended and Restated Credit Agreement,
dated as of March 21, 2003 (as amended, supplemented or otherwise modified
from time to time, the “Credit Agreement”), among Peabody Energy Corporation, a
Delaware corporation (“Borrower”), Fleet National Bank, as administrative agent
(“Administrative Agent”) for the Agents and Lenders parties thereto, Fleet
Securities, Inc., Wachovia Capital Markets, LLC (f/k/a Wachovia Securities,
Inc.) and Lehman Brothers Inc., as arrangers (“Arrangers”), Wachovia Bank,
National Association and Lehman Commercial Paper Inc., as syndication agents
(“Syndication Agents”) and Morgan Stanley Senior Funding, Inc. and U.S. Bank
National Association, as documentation agents (“Documentation Agents”). Unless
otherwise defined herein, terms defined in the Credit Agreement and used herein
shall have the meanings given to them in the Credit Agreement.



     Upon execution and delivery of this Lender Addendum by the parties hereto
as provided in Section 10.18 of the Credit Agreement, the undersigned hereby
[becomes a Lender thereunder having the Commitments] [increases its commitment
under the Credit Agreement] as set forth in Schedule 1 hereto, effective as of
the [Acquisition Term Loan Effective Date]
[               , 2004].



     THIS LENDER ADDENDUM SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.



     This Lender Addendum may be executed by one or more of the parties hereto
on any number of separate counterparts, and all of said counterparts taken
together shall be deemed to constitute one and the same instrument. Delivery
of an executed signature page hereof by facsimile transmission shall be
effective as delivery of a manually executed counterpart hereof.



[Signature page to follow]




 









 








     IN WITNESS WHEREOF, the parties hereto have caused this Lender Addendum to
be duly executed and delivered by their proper and duly authorized officers as
of this                day of                            , 200_.



	 	 	 	 	 	 	 
	

	 	 	 	

	

	 	 	 	Name of Lender
	

	 	 	 	 	 	 
	

	 	 	 	By:	 	 
	

	 	 	 	 	

	

	 	 	 	 	Name:
	

	 	 	 	 	Title:
	

	 	 	 	 	 	 
	Accepted and agreed:	 	 	 	 
	 
	 	 	 	 	 	 
	PEABODY ENERGY CORPORATION	 	 	 	 
	

	 	 	 	 	 	 
	By:
	 	 	 	 	 	 
	

	
	 	 	 	 
	Name:
	 	 	 	 	 
	Title:
	 	 	 	 	 
	 
	 	 	 	 	 	 
	FLEET NATIONAL BANK, as

Administrative Agent	 	 	 	 
	 
	 	 	 	 	 	 
	By:
	 	 	 	 	 	 
	

	
	 	 	 	 
	Name:
	 	 	 	 	 
	Title:
	 	 	 	 	 







 









 






SCHEDULE 1




COMMITMENTS AND NOTICE ADDRESS




	 	 	 	 	 
	1.

	 	Name of Lender:
	 	

	

	 	Notice Address:
	 	

	

	 	 	 	

	

	 	 	 	

	

	 	Attention:
	 	

	

	 	Telephone:
	 	

	

	 	Facsimile:
	 	

	 
	 	 	 	 
	2.

	 	Revolving Credit Commitment:
	 
	 	 	 	 
	3.

	 	Acquisition Term Loan Commitment: