Document:

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                                                                   EXHIBIT 4.206

                       LIMITED LIABILITY COMPANY AGREEMENT
                                       OF
                      WATERSIDE-MARISSA DEVELOPMENT, L.L.C.

         THIS LIMITED LIABILITY WATERSIDE-MARISSA DEVELOPMENT, L.L.C., (the
"LLC"), is dated as of January 7, 2004 and made by Peabody-Waterside
Development, LLC, a Delaware limited liability company (the "Member").

                                   WITNESSETH:

         WHEREAS, the LLC is a limited liability company formed under the
Delaware Limited Liability Company Act (the "Delaware LLC Act") pursuant to a
Certificate of Formation filed with the Delaware Secretary of State on January
7, 2004; and

         WHEREAS, the Members of the LLC form a Joint-Venture Management
Committee (the "LLC").

         NOW, THEREFORE, the Management Committee hereby declares as follows:

1. LLC FORMATION, NAME, PLACE OF BUSINESS

         1.1 FORMATION OF LLC; CERTIFICATE OF FORMATION

             The Management Committee of the LLC hereby acknowledges the
formation of the LLC as a limited liability company pursuant to the Delaware LLC
Act by virtue of the filing of a Certificate of Formation with the Delaware
Secretary of State on January 7, 2004.

         1.2 NAME OF LLC

             The name of the LLC as of the date of this Agreement is and shall
continue to be "Waterside-Marissa Development, L.L.C.". The business of the LLC
may be conducted under any other name that is permitted by the Delaware LLC Act
and selected by the Members of the Management Committee ("Committee"). The
Committee designated pursuant to the terms of this Agreement promptly shall
execute, file, and record any assumed or fictitious name certificates required
by the laws of the State of Delaware or any state in which the LLC conducts
business and shall take such other action as such Committee determines is
required by or advisable under the laws of the State of

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Delaware, or any other state in which the LLC conducts business, to use the name
or names under which the LLC conducts business.

         1.3 PLACE OF BUSINESS

             The LLC's principal place of business shall be St. Louis, Missouri.
The Committee may establish and maintain such other offices and additional
places of business of the LLC, either within or without the State of Delaware,
or close any office or place of business of the LLC, as he or she deems
appropriate.

         1.4 REGISTERED AGENT

             The street address of the initial registered office of the LLC
shall be:

                  The Corporation Trust Company
                  Corporation Trust Center
                  1209 Orange Street
                  Wilmington, Delaware  19801

and the LLC's registered agent at such address shall be Corporation Service
Company. The Manager may from time to time appoint a new resident agent for the
LLC.

2. PURPOSES AND POWERS OF LLC

         2.1 PURPOSES

             The purposes of the LLC shall be (i) to invest in, develop and/or
operate other related concerns and transactions (ii) to undertake any lawful
transactions and engage in any lawful activity incidental to or in furtherance
of the foregoing purposes or otherwise related to the energy business; and (iv)
as agreed by the Member, to engage in any other lawful business, purpose or
activity permitted by the Delaware LLC Act.

         2.2 POWERS

             The LLC shall have all the powers and privileges as are necessary
or convenient to the conduct, promotion, or attainment of the business, purposes
or activities of the LLC.

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3. TERM OF LLC

             The LLC commenced on the date upon which the Certificate of
Formation was duly filed with the Delaware Secretary of State and shall continue
until the dissolution of the LLC as provided by the Delaware LLC Act.

4. LIABILITY OF MEMBER

             Except as otherwise provided in the Delaware LLC Act, the debts,
obligations and liabilities of the LLC, whether arising in contract, tort or
otherwise, shall be solely the debts, obligations and liabilities of the LLC,
and neither the Committee, any officer, employee, shareholder, controlling
person or agent of the LLC or the Committee shall be obligated personally for
any such debt, obligation or liability of the LLC solely by reason of being a
Committee member officer, employee, shareholder, controlling person or agent of
the LLC or the Member. The failure of the LLC to observe any formalities or
requirements relating to the exercise of its power or management of its business
or affairs under the Delaware LLC Act or this Agreement shall not be grounds for
imposing personal liability on the Committee, or any, manager, officer,
employee, shareholder, controlling person or agent of the LLC or the Member for
liabilities of the LLC.

5. CAPITALIZATION, MEMBERSHIP INTEREST AND DISTRIBUTIONS OF CASH FLOW AND
   CERTAIN PROCEEDS.

         5.1 CAPITALIZATION

             Concurrent with the execution of this Agreement, the Committee
shall make a $1,000 capital contribution to the LLC, in cash.

         5.2 NO ADDITIONAL CAPITAL CONTRIBUTIONS

             The Committee shall have no obligation to make additional capital
contributions to the LLC.

         5.3 MEMBERSHIP INTEREST

             The Committee shall own one hundred percent (100%) of the
membership interests in the LLC, and all profits and losses shall be allocated
to the Members.

         5.4 DISTRIBUTIONS

             The Committee shall decide whether and in what amounts the proceeds
received by the LLC shall be distributed. All such proceeds, if any, shall be
distributed one hundred percent (100%) to the Members.

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6. MANAGEMENT

         6.1 MANAGEMENT BY MANAGER

             Management of the LLC is vested in a Management Committee and not
in the Member. The Committee shall be elected by the Member. The Committee may
exercise all such powers of the LLC and do all such lawful acts and things as
may be done by a manager of a limited liability company under the Act.

         6.2 MANAGEMENT COMMITTEE'S TERM OF OFFICE

             The Management Committee shall remain in office until they resigns
or are removed from the office by the Committee. Terry L. Bethel shall be the
initial Manager of the LLC. The Committee will devote such time and attention to
the LLC as is appropriate to manage the affairs of the LLC to its best
advantage.

         6.3 IMPLEMENTATION OF ACTIONS OF MANAGEMENT COMMITTEE

             The decisions and actions of the Committee shall be carried out by
the Committee Members or such other individuals granted authority to act on
behalf of the Committee, pursuant to decisions made or resolutions adopted from
time to time by the Committee.

7. INDEMNIFICATION OF REPRESENTATIVES, COMMITTEE MEMBERS AND EMPLOYEES

         7.1 INDEMNIFICATION

             The LLC shall indemnify and hold harmless the Committee Members,
the Manager and each officer, employee, shareholder, controlling person, agent
and representative of the LLC and of the Member (individually, in each case, an
"Indemnitee") to the fullest extent permitted by law from and against any and
all losses, claims, demands, costs, damages, liabilities (joint or several),
reasonable expenses of any nature (including reasonable attorneys' fees and
disbursements), judgments, fines, settlements, and other amounts arising from
any and all claims, causes of action, demands, actions, suits, or proceedings
(unless asserted by the LLC against the Indemnitee), whether civil, criminal,
administrative or investigative, in which the Indemnitee may be involved, or
threatened to be involved, as a party or otherwise, arising out of or incidental
to the business or activities of or relating to the LLC (a "Claim"), regardless
of whether such Indemnitee continues to be a Committee Member or Manager or an
officer, employee, shareholder, controlling person, agent or representative of
the LLC or the Member at the time any such liability or expense is paid or

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incurred, if such Indemnitee determined in good faith that such conduct was in
the best interest of the LLC and such Indemnitee's conduct did not constitute
fraud, gross negligence, or willful misconduct and was within the scope of the
Indemnitee's authority; provided that all claims for indemnification by an
Indemnitee shall be made only against and shall be limited to the assets of the
LLC and no Indemnitee shall have recourse against the Member with respect to any
such Claim. The termination of any action, suit, or proceeding by judgment,
order, settlement, or conviction, or upon a plea of nolo contendre or its
equivalent shall not, in and of itself, create a presumption or otherwise
constitute evidence that the Indemnitee's conduct did constitute fraud, gross
negligence, or willful misconduct.

         7.2 EXPENSES

             Expenses incurred by an Indemnitee in defending any Claim subject
to this SECTION 7 shall, from time to time, upon request by the Indemnitee, be
advanced by the LLC prior to the final disposition of such Claim upon receipt by
the LLC of an undertaking by or on behalf of the Indemnitee to repay such
amount, together with interest on any such advance or advances at the rate equal
to two percentage points above the "Federal short-term rate" as defined in the
Internal Revenue Code section 1274(d)(1)(C)(i) or the maximum rate permitted
under applicable law, promptly upon (and in no event more than ten days after) a
determination in a judicial proceeding or a binding arbitration that such
Indemnitee is not entitled to be indemnified as authorized in this SECTION 7.

         7.3 OTHER RIGHTS

             The indemnification provided by this SECTION 7 shall be in addition
to any other rights to which an Indemnitee may be entitled under any agreement
or as approved by the Committee, as a matter of law or equity, or otherwise,
both as to an action in such Indemnitee's capacity as the Committee or Manager,
or as an officer, employee, shareholder, controlling person, agent or
representative of the LLC or the Committee, and as to an action in another
capacity, and shall continue as to an Indemnitee who has ceased to serve in such
capacity with respect to those periods during which such Indemnitee served, and
shall inure to the benefit of the heirs, successors, assigns, and administrators
of the Indemnitee.

         7.4 NOTICE

             Promptly after receipt of notice of the commencement of any Claim,
an Indemnitee will, if indemnification in respect thereof is to be sought
against the LLC under this SECTION 7, notify the LLC of the initiation thereof,
but the omission so to notify the LLC will not relieve the LLC from any
liability

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that the LLC may have to such Indemnitee otherwise than under this SECTION 7, or
under this SECTION 7 except to the extent that the LLC is adversely affected by
such lack of notice.

         7.5 COUNSEL

             The LLC shall have the right to undertake, by counsel or other
representatives of its own choosing, the defense or other resolution of any
Claim. In the event that the LLC shall elect not to undertake such defense or
other resolution or within a reasonable time after notice of such Claim from an
Indemnitee, the LLC shall fail to defend or otherwise resolve such Claim, such
Indemnitee (upon further written notice to the LLC) shall have the right to
undertake the defense, compromise, or settlement of such Claim, by counsel or
other representatives of its own choosing, on behalf of and for the account and
risk of the LLC.

         7.6 OTHER PERSONS

             The provisions of this SECTION 7 are for the benefit of the
Indemnitees and shall not be deemed to create any rights for the benefit of any
other person or entity.

         7.7 INSURANCE

             The LLC may purchase and maintain insurance of a kind normal and
customary in the industry in which the LLC conducts business on behalf of any
Indemnitee against any liability asserted against an Indemnitee and incurred by
an Indemnitee in such capacity, or arising out of such Indemnitee's status as
aforesaid, whether or not the LLC would have the power to indemnify such
Indemnitee against such liability under this SECTION 7.

8. DISSOLUTION AND LIQUIDATION

         8.1 EFFECT OF DISSOLUTION

             Upon dissolution, the LLC shall cease carrying on its business but
shall not terminate until the winding up of the affairs of the LLC is completed,
the assets of the LLC shall have been distributed as provided below and a
Certificate of Cancellation of the LLC under the Delaware LLC Act has been filed
with the Secretary of State of the State of Delaware.

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         8.2 LIQUIDATION UPON DISSOLUTION

             Upon the dissolution of the LLC, sole and plenary authority to
effectuate the liquidation of the assets of the LLC shall be vested in the
Committee, which shall have full power and authority to sell, assign and
encumber any and all of the LLC's assets and to wind up and liquidate the
affairs of the LLC in an orderly and business-like manner. The proceeds of
liquidation of the assets of the LLC distributable upon a dissolution and
winding up of the LLC shall be applied in the following order of priority:

             (i) first, to the creditors of the LLC, which may include the
Members of the Committee as a creditor, in the order of priority provided by
law, in satisfaction of all liabilities and obligations of the LLC (or any
nature whatsoever, including, without limitation, fixed or contingent, matured
or unmatured, legal or equitable, secured or unsecured), whether by payment or
the making of reasonable provisions for payment thereof; and

             (ii) thereafter, one hundred percent (100%) to the Member.

         8.3 WINDING UP AND CERTIFICATE OF CANCELLATION

             The winding up of the LLC shall be completed when all of its debts,
liabilities, and obligations have been paid and discharged or reasonably
adequate provisions therefor has been made, and all of the remaining property
and assets of the LLC have been distributed to the Member. Upon the completion
of the winding up of the LLC, a Certificate of Cancellation of the LLC shall be
filed with the Delaware Secretary of State.

9. AMENDMENT

             This Agreement may be amended or modified by a written instrument
executed by the Member.

10. GOVERNING LAW

             This Agreement shall be governed and construed in accordance with
the laws of the State of Delaware without regard to any applicable conflicts of
law.

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             IN WITNESS WHEREOF, the undersigned has duly executed this
Agreement, as of the day and year first herein above set forth.

                        WATERSIDE-MARISSA DEVELOPMENT, L.L.C.

                              By:
                                 ----------------------------------
                              Name: Member Management Committee
                                    -------------------------------

                              By:
                                 ----------------------------------
                              Name: Member Management Committee
                                    -------------------------------

                              By:
                                 ----------------------------------
                              Name: Member Management Committee
                                    -------------------------------

                              By:
                                 ----------------------------------
                              Name: Member Management Committee
                                    -------------------------------

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                                                                   EXHIBIT 4.211

                          THIRD SUPPLEMENTAL INDENTURE

         THIRD SUPPLEMENTAL INDENTURE (this "Supplemental Indenture"), dated as
of February 24, 2004, by and among the entities listed on Schedule 1 attached
hereto (the "Guaranteeing Subsidiaries"), each being a subsidiary of Peabody
Energy Corporation (or its permitted successor), a Delaware corporation (the
"Company"), the Company, the other Subsidiary Guarantors (as defined in the
Indenture referred to herein) and US Bank National Association, as Trustee under
the Indenture referred to below (the "Trustee").

                                   WITNESSETH

         WHEREAS, the Company has heretofore executed and delivered to the
Trustee an Indenture (the "Indenture"), dated as of March 21, 2003 providing for
the issuance of an unlimited amount of 6-7/8% Notes due 2013 (the "Notes"), as
supplemented by a First Supplemental Indenture, dated as of May 7, 2003;

         WHEREAS, the Indenture provides that under certain circumstances the
Guaranteeing Subsidiaries shall execute and deliver to the Trustee a
supplemental indenture pursuant to which the Guaranteeing Subsidiaries shall
unconditionally guarantee all of the Company's Obligations under the Notes on
the terms and conditions set forth herein (the "Subsidiary Guarantee"); and

         WHEREAS, pursuant to Section 9.01 of the Indenture, the Trustee is
authorized to execute and deliver this Supplemental Indenture.

         NOW THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt of which is hereby acknowledged, the
Guaranteeing Subsidiaries and the Trustee mutually covenant and agree for the
equal and ratable benefit of the Holders of the Notes as follows:

         1. CAPITALIZED TERMS. Capitalized terms used herein without definition
shall have the meanings assigned to them in the Indenture.

         2. AGREEMENT TO GUARANTEE. The Guaranteeing Subsidiaries hereby agree
as follows:

                  (a)      Along with all Subsidiary Guarantors named in the
                           Indenture, to jointly and severally Guarantee to each
                           Holder of a Note authenticated and delivered by the
                           Trustee and to the Trustee and its successors and
                           assigns, irrespective of the validity and
                           enforceability of the Indenture, the Notes or the
                           obligations of the Company hereunder or thereunder,
                           that:

                           (i)      the principal of and interest on the Notes
                                    will be promptly paid in full when due,
                                    whether at maturity, by acceleration,

<PAGE>

                                    redemption or otherwise, and interest on the
                                    overdue principal of and interest on the
                                    Notes, if any, if lawful, and all other
                                    obligations of the Company to the Holders or
                                    the Trustee hereunder or thereunder will be
                                    promptly paid in full or performed, all in
                                    accordance with the terms hereof and
                                    thereof; and

                           (ii)     in case of any extension of time of payment
                                    or renewal of any Notes or any of such other
                                    obligations, that same will be promptly paid
                                    in full when due or performed in accordance
                                    with the terms of the extension or renewal,
                                    whether at stated maturity, by acceleration
                                    or otherwise.

                           Failing payment when due of any amount so guaranteed
                           or any performance so guaranteed for whatever reason,
                           the Subsidiary Guarantors shall be jointly and
                           severally obligated to pay the same immediately. Each
                           Subsidiary Giarantor agrees that this is a guarantee
                           of payment and not a guarantee of collection.

                  (b)      The obligations hereunder shall be joint and several
                           and unconditional, irrespective of the validity or
                           enforceability of the Notes or the obligations of the
                           Company under the Indenture, the absence of any
                           action to enforce the same, any waiver or consent by
                           any Holder of the Notes with respect to any
                           provisions hereof or thereof, the recovery of any
                           judgment against the Company, any action to enforce
                           the same or any other circumstance which might
                           otherwise constitute a legal or equitable discharge
                           or defense of a Subsidiary Guarantor.

                  (c)      The following is hereby waived: diligence,
                           presentment, demand of payment, filing of claims with
                           a court in the event of insolvency or bankruptcy of
                           the Company, any right to require a proceeding first
                           against the Company, protest, notice and all demands
                           whatsoever.

                  (d)      This Subsidiary Guarantee shall not be discharged
                           except by complete performance of the obligations
                           contained in the Notes and the Indenture.

                  (e)      If any Holder or the Trustee is required by any court
                           or otherwise to return to the Company, the Subsidiary
                           Guarantors, or any custodian, Trustee, liquidator or
                           other similar official acting in relation to either
                           the Company or the Subsidiary Guarantors, any amount
                           paid by either to the Trustee or such Holder, this
                           Subsidiary Guarantee, to the extent theretofore
                           discharged, shall be reinstated in full force and
                           effect.

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                  (f)      The Guaranteeing Subsidiaries shall not be entitled
                           to any right of subrogation in relation to the
                           Holders in respect of any obligations guaranteed
                           hereby until payment in full of all obligations
                           guaranteed hereby.

                  (g)      As between the Subsidiary Guarantors, on the one
                           hand, and the Holders and the Trustee, on the other
                           hand, (x) the maturity of the obligations guaranteed
                           hereby may be accelerated as provided in Article 6 of
                           the Indenture for the purposes of this Subsidiary
                           Guarantee, notwithstanding any stay, injunction or
                           other prohibition preventing such acceleration in
                           respect of the obligations guaranteed hereby, and (y)
                           in the event of any declaration of acceleration of
                           such obligations as provided in Article 6 of the
                           Indenture, such obligations (whether or not due and
                           payable) shall forthwith become due and payable by
                           the Subsidiary Guarantors for the purpose of this
                           Subsidiary Guarantee.

                  (h)      The Subsidiary Guarantors shall have the right to
                           seek contribution from any non-paying Subsidiary
                           Guarantor so long as the exercise of such right does
                           not impair the rights of the Holders under the
                           Subsidiary Guarantee.

                  (i)      Pursuant to Section 10.04 of the Indenture, after
                           giving effect to any maximum amount and any other
                           contingent and fixed liabilities that are relevant
                           under any applicable Bankruptcy or fraudulent
                           conveyance laws, and after giving effect to any
                           collections from, rights to receive contribution from
                           or payments made by or on behalf of any other
                           Subsidiary Guarantor in respect of the obligations of
                           such other Subsidiary Guarantor under Article 10 of
                           the Indenture shall result in the obligations of such
                           Subsidiary Guarantor under Subsidiary Guarantee not
                           constituting a fraudulent transfer or conveyance.

         3. EXECUTION AND DELIVERY. Each of the Guaranteeing Subsidiaries agrees
that the Subsidiary Guarantees shall remain in full force and effect
notwithstanding any failure to endorse on each Note a notation of such
Subsidiary Guarantee.

         4. GUARANTEEING SUBSIDIARY MAY CONSOLIDATE, ETC. ON CERTAIN TERMS.

                  (a)      The Guaranteeing Subsidiaries may not consolidate
                           with or merge with or into (whether or not such
                           Senior Subordinated Note Guarantor is the surviving
                           Person) another corporation, Person or entity whether
                           or not affiliated with such Subsidiary Guarantor
                           unless:

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                           (i)      subject to Section 10.04 of the Indenture,
                                    the Person formed by or surviving any such
                                    consolidation or merger (if other than a
                                    Subsidiary Guarantor or the Company)
                                    unconditionally assumes all the obligations
                                    of such Subsidiary Guarantor, pursuant to a
                                    supplemental Indenture in form and substance
                                    reasonably satisfactory to the Trustee,
                                    under the Notes, the Indenture and the
                                    Subsidiary Guarantee on the terms set forth
                                    herein or therein; and

                           (ii)     immediately after giving effect to such
                                    transaction, no Default or Event of Default
                                    exists.

                  (b)      In case of any such consolidation, merger, sale or
                           conveyance and upon the assumption by the successor
                           corporation, by supplemental Indenture, executed and
                           delivered to the Trustee and satisfactory in form to
                           the Trustee, of the Subsidiary Guarantee endorsed
                           upon the Notes and the due and punctual performance
                           of all of the covenants and conditions of the
                           Indenture to be performed by the Subsidiary
                           Guarantor, such successor corporation shall succeed
                           to and be substituted for the Subsidiary Guarantor
                           with the same effect as if it had been named herein
                           as a Subsidiary Guarantor. Such successor corporation
                           thereupon may cause to be signed any or all of the
                           Subsidiary Guarantees to be endorsed upon all of the
                           Notes issuable hereunder which theretofore shall not
                           have been signed by the Company and delivered to the
                           Trustee. All the Subsidiary Guarantees so issued
                           shall in all respects have the same legal rank and
                           benefit under the Indenture as the Subsidiary
                           Guarantees theretofore and thereafter issued in
                           accordance with the terms of the Indenture as though
                           all of such Subsidiary Guarantees had been issued at
                           the date of the execution hereof.

                  (c)      Except as set forth in Articles 4 and 5 of the
                           Indenture, and notwithstanding clauses (a) and (b)
                           above, nothing contained in the Indenture or in any
                           of the Notes shall prevent any consolidation or
                           merger of a Subsidiary Guarantor with or into the
                           Company or another Subsidiary Guarantor, or shall
                           prevent any sale or conveyance of the property of a
                           Subsidiary Guarantor as an entirety or substantially
                           as an entirety to the Company or another Subsidiary
                           Guarantor.

         5. RELEASES.

                  (a)      In the event of a sale or other disposition of all of
                           the assets of any Subsidiary Guarantor, by way of
                           merger, consolidation or otherwise, or a sale or
                           other disposition of all to the capital stock of

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                           any Subsidiary Guarantor, then such Subsidiary
                           Guarantor (in the event of a sale or other
                           disposition, by way of merger, consolidation or
                           otherwise, of all of the capital stock of such
                           Subsidiary Guarantor) or the corporation acquiring
                           the property (in the event of a sale or other
                           disposition of all or substantially all of the assets
                           of such Subsidiary Guarantor) will be released and
                           relieved of any obligations under its Subsidiary
                           Guarantee; provided that the Net Proceeds of such
                           sale or other disposition are applied in accordance
                           with the applicable provisions of the Indenture,
                           including without limitation Section 4.10 of the
                           Indenture. Upon delivery by the Company to the
                           Trustee of an Officer's Certificate and an Opinion of
                           Counsel to the effect that such sale or other
                           disposition was made by the Company in accordance
                           with the provisions of the Indenture, including
                           without limitation Section 4.10 of the Indenture, the
                           Trustee shall execute any documents reasonably
                           required in order to evidence the release of any
                           Subsidiary Guarantor from its obligations under its
                           Subsidiary Guarantee.

                  (b)      Any Subsidiary Guarantor not released from its
                           obligations under its Subsidiary Guarantee shall
                           remain liable for the full amount of principal of and
                           interest on the Notes and for the other obligations
                           of any Subsidiary Guarantor under the Indenture as
                           provided in Article 10 of the Indenture.

         6. NO RECOURSE AGAINST OTHERS. No past, present or future director,
officer, employee, incorporator, stockholder or agent of the Guaranteeing
Subsidiaries, as such, shall have any liability for any obligations of the
Company or any of the Guaranteeing Subsidiaries under the Notes, any Subsidiary
Guarantees, the Indenture or this Supplemental Indenture or for any claim based
on, in respect of, or by reason of, such obligations or their creation. Each
Holder of the Notes by accepting a Note waives and releases all such liability.
The waiver and release are part of the consideration for issuance of the Notes.
Such waiver may not be effective to waive liabilities under the federal
securities laws and it is the view of the Commission that such a waiver is
against public policy.

         7. NEW YORK LAW TO GOVERN. THE LAW OF THE STATE OF NEW YORK SHALL
GOVERN AND BE USED TO CONSTRUE THIS SUPPLEMENTAL INDENTURE.

         8. COUNTERPARTS. The parties may sign any number of copies of this
Supplemental Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement.

         9. EFFECT OF HEADINGS. The Section headings herein are for convenience
only and shall not affect the construction hereof.

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         10. THE TRUSTEE. The Trustee shall not be responsible in any manner
whatsoever for or in respect of the validity or sufficiency of this Supplemental
Indenture or for or in respect of the recitals contained herein, all of which
recitals are made solely by the Guaranteeing Subsidiaries and the Company.

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

PEABODY ENERGY CORPORATION                  US BANK NATIONAL ASSOCIATION
("COMPANY")                                 ("TRUSTEE")

By: /s/ WALTER L. HAWKINS, JR.              By: /s/ PHILIP G. KANE, JR.
    ---------------------------------           --------------------------------
Name: Walter L. Hawkins, Jr.                Name: Philip G. Kane, Jr.
      -------------------------------             ------------------------------
Title: Vice President and Treasurer         Title: Vice President
       ------------------------------              -----------------------------

  EXISTING SUBSIDIARY GUARANTORS:

                           AFFINITY MINING COMPANY
                           ARCLAR COMPANY, LLC
                           ARID OPERATIONS INC.
                           BEAVER DAM COAL COMPANY
                           BIG RIDGE, INC.
                           BIG SKY COAL COMPANY
                           BLACK BEAUTY 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
                           CABALLO COAL COMPANY
                           CHARLES COAL COMPANY
                           CLEATON COAL COMPANY
                           COAL PROPERTIES CORP.
                           COLONY BAY COAL COMPANY
                           COOK MOUNTAIN COAL COMPANY
                           COTTONWOOD LAND COMPANY

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                           CYPRUS CREEK LAND COMPANY
                           CYPRUS CREEK LAND RESOURCES, LLC
                           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
                           KANAWHA RIVER VENTURES I, LLC
                           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
                           MUSTANG ENERGY COMPANY, L.L.C.
                           NORTH PAGE COAL CORP.
                           OHIO COUNTY COAL COMPANY
                           PATRIOT COAL COMPANY, L.P.
                           PEABODY AMERICA, INC.
                           PEABODY ARCHVEYOR, L.L.C.
                           PEABODY COAL COMPANY
                           PEABODY COALSALES COMPANY
                           PEABODY COALTRADE, INC.
                           PEABODY DEVELOPMENT COMPANY
                           PEABODY DEVELOPMENT LAND HOLDINGS, LLC
                           PEABODY ENERGY GENERATION HOLDING
                           PEABODY ENERGY INVESTMENTS, INC.

                                       7
<PAGE>

                           PEABODY ENERGY SOLUTIONS, INC.
                           PEABODY HOLDING COMPANY, INC.
                           PEABODY NATURAL GAS, LLC
                           PEABODY NATURAL RESOURCES COMPANY
                           PEABODY POWERTREE INVESTMENTS, LLC
                           PEABODY RECREATIONAL LANDS, L.L.C.
                           PEABODY SOUTHWESTERN COAL COMPANY
                           PEABODY TERMINALS, INC.
                           PEABODY VENEZUELA COAL CORP.
                           PEABODY-WATERSIDE DEVELOPMENT, L.L.C.
                           PEABODY WESTERN COAL COMPANY
                           PEC EQUIPMENT COMPANY, LLC
                           PINE RIDGE COAL COMPANY
                           POINT PLEASANT DOCK COMPANY, LLC
                           POND CREEK LAND RESOURCES, LLC
                           POND RIVER LAND COMPANY
                           PORCUPINE PRODUCTION, LLC
                           PORCUPINE TRANSPORTATION, LLC
                           POWDER RIVER COAL COMPANY
                           PRAIRIE STATE GENERATING COMPANY, L.L.C.
                           RIO ESCONDIDO COAL CORP.
                           RIVERS EDGE MINING, INC.
                           RIVERVIEW TERMINAL COMPANY
                           SENECA COAL COMPANY
                           SENTRY MINING COMPANY
                           SNOWBERRY LAND COMPANY
                           STAR LAKE ENERGY COMPANY, L.L.C.
                           STERLING SMOKELESS COAL COMPANY
                           SUGAR CAMP PROPERTIES
                           THOROUGHBRED, L.L.C.
                           THOROUGHBRED GENERATING COMPANY, LLC
                           THOROUGHBRED MINING COMPANY, L.L.C.
                           WILLIAMSVILLE COAL COMPANY, LLC
                           YANKEETOWN DOCK CORPORATION

                           By: /s/ WALTER L. HAWKINS, JR.
                               -------------------------------
                               Name: Walter L. Hawkins, Jr.
                               Title: Vice President

                                       8
<PAGE>

  NEW GUARANTEEING SUBSIDIARIES:

                                           PDC PARTNERSHIP HOLDINGS, INC.

                                           By: /s/ WALTER L. HAWKINS, JR.
                                               --------------------------------
                                           Name: Walter L. Hawkins, Jr.
                                           Title: Vice President & Treasurer

                                           WATERSIDE-MARISSA DEVELOPMENT, L.L.C.

                                           By: /s/ WALTER L. HAWKINS, JR.
                                               --------------------------------
                                           Name: Walter L. Hawkins, Jr.
                                           Title: Vice President & Treasurer

                                           BTU VENEZUELA, LLC

                                           By: /s/ WALTER L. HAWKINS, JR.
                                               --------------------------------
                                           Name: Walter L. Hawkins, Jr.
                                           Title: Vice President & Treasurer

                                           BLACK STALLION COAL COMPANY, LLC

                                           By: /s/ WALTER L. HAWKINS, JR.
                                               --------------------------------
                                           Name: Walter L. Hawkins, Jr.
                                           Title: Vice President & Treasurer

                                           BLACK HILLS MINING CO., LLC

                                           By: /s/ WALTER L. HAWKINS, JR.
                                               --------------------------------
                                           Name: Walter L. Hawkins, Jr.
                                           Title: Vice President & Treasurer

                                           BTU WORLDWIDE, INC.

                                           By: /s/ WALTER L. HAWKINS, JR.
                                               --------------------------------
                                           Name: Walter L. Hawkins, Jr.
                                           Title: Vice President & Treasurer

                                       9
<PAGE>

                                   SCHEDULE 1

                          NEW GUARANTEEING SUBSIDIARIES

PDC Partnership Holdings, Inc., a Delaware corporation
Waterside-Marissa Development, L.L.C., a Delaware limited liability company
Black Stallion Coal Company, LLC, a Delaware limited liability company
Black Hills Mining Co., LLC, an Illinois limited liability company
BTU Venezuela, LLC, a Delaware limited liability company
BTU Worldwide, Inc., a Delaware corporation

                                       10

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