Document:

<PAGE>
                           RECEIVABLES SALE AGREEMENT

                           dated as of March 31, 2000

                                      among

   Big Sky Coal Company, Caballo Coal Company, Eastern Associated Coal Corp.,
 Peabody COALSALES Company, Peabody Coal Company, Peabody Western Coal Company,
Powder River Coal Company, Seneca Coal Company, Pine Ridge Coal Company and EACH
       OF THEIR AFFILIATES WHO HEREAFTER BECOMES A ORIGINATOR HEREUNDER,
                                 as Originators,

                                       and

                         P&L COAL HOLDINGS CORPORATION,
                                  as Purchaser

<PAGE>
                                TABLE OF CONTENTS

                                                                            Page

ARTICLE I. AMOUNTS AND TERMS OF THE PURCHASES__________________________________1

   Section 1.1    Purchases of Receivables.____________________________________1

   Section 1.2    Payment for the Purchases.___________________________________2

   Section 1.3    Purchase Price Credit Adjustments.___________________________3

   Section 1.4    Payments and Computations, Etc.______________________________4

   Section 1.5    Transfer of Records._________________________________________4

   Section 1.6    Characterization; Granting Clause.___________________________4

ARTICLE II. REPRESENTATIONS AND WARRANTIES_____________________________________5

   Section 2.1    Representations of the Originators.__________________________5

ARTICLE III. CONDITIONS OF PURCHASES___________________________________________8

   Section 3.1    Conditions Precedent to Initial Purchase.____________________8

   Section 3.2    Conditions Precedent to All Purchases.______________________10

   Section 3.3    Reaffirmation of Representations and Warranties.____________10

ARTICLE IV. COVENANTS_________________________________________________________10

   Section 4.1    Affirmative Covenants.______________________________________10

   Section 4.2    Negative Covenants._________________________________________13

ARTICLE V. JOINDER OF ADDITIONAL ORIGINATORS__________________________________15

   Section 5.1    Addition of New Originators.________________________________15

   Section 5.2    Documentation.______________________________________________15

ARTICLE VI. ADDITIONAL RIGHTS AND OBLIGATIONS IN
RESPECT OF THE RECEIVABLES____________________________________________________16

   Section 6.1    Rights of P&L.______________________________________________16

   Section 6.2    Responsibilities of the Originators.________________________16

   Section 6.3    Further Action Evidencing Purchases.________________________16

   Section 6.4    Application of Collections._________________________________17

ARTICLE VII. INDEMNIFICATION__________________________________________________17

   Section 7.1    Indemnities by the Originators._____________________________17

   Section 7.2    Costs, Expenses and Taxes.__________________________________19

ARTICLE VIII. MISCELLANEOUS___________________________________________________20

   Section 8.1    Waivers and Amendments._____________________________________20

   Section 8.2    Notices, Etc._______________________________________________20

   Section 8.3    Cumulative Remedies.________________________________________20

   Section 8.4    Binding Effect; Assignability.______________________________21

   Section 8.5    Acknowledgment and Agreement._______________________________21

   Section 8.6    Governing Law.______________________________________________21

   Section 8.7    Submission to Jurisdiction._________________________________21

   Section 8.8    Waiver of Jury Trial._______________________________________22

   Section 8.9    Captions and Cross References; Incorporation
                  by Reference._______________________________________________22

   Section 8.10   Execution in Counterparts.__________________________________22

<PAGE>
                           RECEIVABLES SALE AGREEMENT

                  THIS  RECEIVABLES  SALE  AGREEMENT (as amended,  supplemented,
restated or otherwise modified from time to time, this "Agreement"), dated as of
March 31, 2000, is entered into by and among:

                    (1) Big Sky Coal Company,  a Delaware  corporation,  Caballo
               Coal Company,  a Delaware  corporation,  Eastern  Associated Coal
               Corp., a West Virginia corporation,  Peabody COALSALES Company, a
               Delaware   corporation,   Peabody   Coal   Company,   a  Delaware
               corporation,   Peabody   Western   Coal   Company,   a   Delaware
               corporation,  Powder River Coal Company, a Delaware  corporation,
               Seneca Coal Company, a Delaware corporation,  and Pine Ridge Coal
               Company,  a  Delaware  corporation  (collectively,  the  "Initial
               Originators"), as sellers, and

                    (2) P&L Coal Holdings  Corporation,  a Delaware  corporation
               ("P&L"), as purchaser.

Unless otherwise indicated, capitalized terms used in this Agreement are defined
in Exhibit A hereto or in the Receivables Purchase Agreement referenced therein.

                              W I T N E S S E T H :

               WHEREAS,  P&L owns, directly or indirectly,  not less than 75% of
          the issued and  outstanding  capital stock or membership  interests of
          each of the Originators; and

               WHEREAS,   the   Originators   desire  to  sell  to  P&L  certain
          Receivables  and  Related  Security  owned  from  time  to time by the
          Originators,  and P&L is  willing,  on the  terms and  subject  to the
          conditions  set forth  herein,  to  purchase  Receivables  and Related
          Security from the Originators.

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

                                   ARTICLE I.
                       AMOUNTS AND TERMS OF THE PURCHASES

     Section 1.1 Purchases of Receivables.

     (a)  Effective  on the  Applicable  Closing  Date for each  Originator,  in
consideration  for the  Purchase  Price and upon the terms  and  subject  to the
conditions set forth herein, each Originator does hereby sell, assign, transfer,
set-over and otherwise  convey to P&L,  without  recourse  (except to the extent
expressly  provided herein),  and P&L does hereby purchase from such Originator,
all of such Originator's  right,  title and interest in and to such Originator's
Initial Receivables and all Related Security with respect thereto.

     (b)  Effective  on each  Business  Day after each  Originator's  Applicable
Closing Date and prior to its Sale Termination  Date, in  consideration  for the
Purchase  Price and upon the  terms  and  subject  to the  conditions  set forth
herein,  such  Originator  does hereby  sell,  assign,  transfer,  set-over  and
otherwise  convey to P&L,  without  recourse  (except  to the  extent  expressly
provided herein), and P&L does hereby purchase from such Originator, all of such
Originator's  right,  title and interest in and to such Originator's  Additional
Receivables and all Related Security with respect thereto.

     (c) It is the intention of the parties hereto that each sale of Receivables
made  hereunder  shall  constitute a "sale of accounts" (as such term is used in
Article 9 of the UCC),  which sale is absolute and irrevocable and shall provide
P&L with the full benefits of ownership of the  Receivables  and the  associated
Related Security. Except for the Purchase Price Credits owed pursuant to Section
1.3,  each  sale of  Receivables  hereunder  is  made  without  recourse  to the
applicable  Originator;  provided,  however,  that (i) each Originator  shall be
liable to P&L for all  representations,  warranties,  covenants and  indemnities
made by such Originator  pursuant to the terms of the  Transaction  Documents to
which such Originator is a party,  and (ii) such sale does not constitute and is
not intended to result in an  assumption  by P&L or any assignee  thereof of any
obligation of such Originator or any other Person arising in connection with the
Receivables,  the related Contracts or Invoices and/or other Related Security or
any  other  obligations  of such  Originator.  In view of the  intention  of the
parties  hereto  that the  acquisitions  of  Receivables  made  hereunder  shall
constitute outright sales of such Receivables rather than loans secured thereby,
each Originator agrees that it will, on or prior to its Applicable Closing Date,
mark its master data processing  records  relating to its  Receivables  with the
legend required by Section 3.1(i) hereof.  Upon the request of P&L or the Agent,
each Originator will execute and file such financing or continuation statements,
or amendments  thereto or  assignments  thereof,  and such other  instruments or
notices,  as may be  necessary  or  appropriate  to  perfect  and  maintain  the
perfection  of P&L's  ownership  interest  in the  Receivables  and the  Related
Security or as P&L or the Agent may reasonably request.

     Section 1.2 Payment for the Purchases.

     (a) The Purchase Price for each purchase of Initial Receivables and Related
Security from any Originator  shall be payable in full by P&L to such Originator
on  such  Originator's  Applicable  Closing  Date,  and  shall  be  paid to such
Originator  (i) by  delivery  of  immediately  available  funds,  and/or (ii) by
delivery  of  the  proceeds  of a  Subordinated  Loan  made  by  the  applicable
Originator  to P&L in a  principal  amount  not to exceed  the lesser of (A) the
remaining  unpaid portion of such Purchase  Price,  and (B) 15% of such Purchase
Price.

     (b) The Purchase  Price for each  purchase of  Additional  Receivables  and
Related  Security  shall  be due and  owing  in  full  by P&L to the  applicable
Originator  on the date of such  purchase  (except that P&L may, with respect to
any such  purchase,  offset  against such (a) Purchase Price any amounts owed by
such  Originator to P&L hereunder  which have become due but remain  unpaid) and
shall be paid to such Originator on the next  subsequent  Settlement Date by P&L
(i) by delivery of immediately  available funds,  and/or (ii) by delivery of the
proceeds of a Subordinated  Loan made by the  applicable  Originator to P&L in a
principal amount not to exceed the lesser of (A) the remaining unpaid portion of
such Purchase Price, and (B) 15% of such Purchase Price.

     (c) Subject to the limitations set forth in Section  1.2(a)(ii) and Section
1.2(b)(ii),   each  of  the  Originators  irrevocably  agrees  to  advance  each
Subordinated  Loan  requested  by P&L on or  prior  to  such  Originator's  Sale
Termination  Date.  The  Subordinated  Loans owing to each  Originator  shall be
evidenced by, and shall be payable in accordance  with the terms and  provisions
of, its  Subordinated  Note.  Each  Originator  is hereby  authorized  by P&L to
endorse  on the  schedule  attached  to its  Subordinated  Note  an  appropriate
notation evidencing the date and amount of each Subordinated Loan thereunder, as
well as the date of each payment with respect thereto, provided that the failure
to make such  notation  shall  not  affect  any  obligation  of P&L  thereunder.
Although the Purchase  Price for each  purchase of  Additional  Receivables  and
Related  Security  shall  be due and  payable  in full by P&L to the  applicable
Originator  on the  date of such  purchase,  settlement  of the  Purchase  Price
between  P&L and such  Originator  shall be effected  on  Settlement  Dates with
respect  to  all  purchases  within  the  prior  calendar  week.  Although  cash
settlements shall be effected on Settlement Dates, increases or decreases in the
Subordinated Loans shall be deemed to have occurred and shall be effective as of
the last Business Day of the calendar week to which such settlement relates.

     Section 1.3  Purchase  Price  Credit  Adjustments.  (a) If on any day,  any
Originator  is deemed to have received a Deemed  Collection  with respect to any
Receivable  sold by it to P&L  hereunder,  then,  in such  event,  P&L  shall be
entitled to a credit  (each,  a "Purchase  Price  Credit")  against the Purchase
Price otherwise payable to such Originator  hereunder in an amount equal to such
Deemed   Collection.   If  such  Purchase  Price  Credit  exceeds  the  original
Outstanding  Balance of the Receivables to be sold by the applicable  Originator
on the  date  of a  purchase,  then  the  applicable  Originator  shall  pay the
remaining  amount of such Purchase  Price Credit in cash not later than the next
Settlement Date provided that if such Originator's Sale Termination Date has not
occurred,  such  Originator  shall be allowed to deduct the remaining  amount of
such  Purchase  Price  Credit  from  any  Indebtedness  owed  to  it  under  its
Subordinated Note to the extent permitted thereunder.

     (b) If on any day, any Originator is advised that the  Outstanding  Balance
of an  existing  Receivable  has been  subject to an  increase  as a result of a
quality  adjustment  pursuant  to  the  terms  of  the  related  Contract,  such
Originator  shall be entitled to an increase (each, a "Purchase Price Increase")
to the Purchase Price otherwise payable by P&L for such Receivable  hereunder in
an amount  calculated by reference to the  definition of "Purchase  Price" based
upon such increase in  Outstanding  Balance and the Discount  Factor  originally
applicable to such Receivable.  P&L shall pay the applicable  Originator each of
its Purchase Price  Increases not later than the next Settlement Date in cash or
by increasing the balance  outstanding  under its Subordinated  Note (subject to
the  limitations  set forth in  Section  1.2(a)(ii)  or Section  1.2(b)(ii),  as
applicable).

     Section  1.4  Payments  and  Computations,  Etc.  All amounts to be paid or
deposited by P&L  hereunder  shall be paid or deposited in  accordance  with the
terms hereof on the day when due in immediately  available  funds to the account
of the applicable  Originator designated from time to time by such Originator or
as otherwise directed by such Originator.  In the event that any payment owed by
any Person hereunder  becomes due on a day that is not a Business Day, then such
payment shall be made on the next  succeeding  Business Day. If any Person fails
to pay any amount  hereunder  when due,  such  Person  agrees to pay, on demand,
interest  on the  past  due  amount  at the  Default  Rate  until  paid in full;
provided,  however,  that such interest shall not at any time exceed the maximum
rate permitted by applicable law.

     Section 1.5 Transfer of Records.

     (a) In connection with the sales of Receivables hereunder,  each Originator
hereby  sells,  transfers,  assigns  and  otherwise  conveys  to P&L all of such
Originator's  right and title to and  interest  in the  Records  relating to all
Receivables sold by such Originator hereunder,  without the need for any further
documentation  in connection  with any sale. In connection  with such  transfer,
each  Originator  hereby  grants  to each of P&L  (and  SPV  and the  Agent,  as
assignees of P&L) and the Servicer an irrevocable, non-exclusive license to use,
without  royalty or payment of any kind, all software used by such Originator to
account  for  its  Receivables,  to the  extent  necessary  to  administer  such
Receivables,  whether such  software is owned by such  Originator or is owned by
others  and  used by such  Originator  under  license  agreements  with  respect
thereto,  provided that should the consent of any licensor of such Originator to
such grant of the license  described herein be required,  such Originator hereby
agrees that upon the request of P&L (or SPV or the Agent,  as  assignees of P&L)
or the Servicer,  such Originator will use its reasonable  efforts to obtain the
consent of such  third-party  licensor.  The  license  granted  hereby  shall be
irrevocable,  and shall  terminate  on the date on which all  Aggregate  Unpaids
under the Receivables Purchase Agreement have been paid in full.

     (b) Each Originator (i) shall take such action  requested by P&L (or SPV or
the  Agent,  as  assignees  of P&L)  from  time to time  hereafter,  that may be
necessary  or  reasonably  appropriate  to  ensure  that P&L has an  enforceable
ownership  interest in the  Records  relating  to the  Receivables  sold by such
Originator to P&L hereunder, and (ii) shall use its reasonable efforts to ensure
that P&L and the Servicer each has an  enforceable  right (whether by license or
sublicense or otherwise) to use all of the computer software used to account for
such Receivables and/or to recreate such Records.

     Section 1.6  Characterization;  Granting Clause.  If,  notwithstanding  the
intention  of the  parties  expressed  in  Section  1.1(c),  any  sale to P&L of
Receivables  hereunder  shall be  characterized  as a secured  loan and not as a
sale,  then this  Agreement  shall be deemed to constitute a security  agreement
under the UCC and other  applicable  law. For this purpose and without  being in
derogation of the parties'  intention  that each sale of  Receivables  hereunder
shall constitute a true sale thereof,  each of the Originators  hereby grants to
P&L a duly perfected security interest in all of such Originator's  right, title
and interest in, to and under all of such Originator's  Receivables now existing
and hereafter arising,  and in all Related Security with respect thereto,  which
security  interest shall be prior to all other Adverse Claims thereto.  From and
after an Originator's  Sale Termination Date but only so long as such Originator
shall be in material default of its covenants and agreements herein, P&L and its
assigns  shall have as against  such  Originator,  in addition to the rights and
remedies which they may have under this Agreement, all other rights and remedies
provided to a secured  creditor after default under the UCC and other applicable
law, which rights and remedies shall be cumulative.

                                  ARTICLE II.
                         REPRESENTATIONS AND WARRANTIES

     Section 2.1  Representations of the Originators.  In order to induce P&L to
enter into this  Agreement  and to make  purchases  hereunder,  each  Originator
hereby makes the following  representations and warranties,  as to itself, as of
the date of each sale by it hereunder:

     (a)  Existence  and Power.  Such  Originator  is a  corporation  or limited
liability company,  duly organized,  validly existing and in good standing under
the laws of its state of  organization.  Such Originator is duly qualified to do
business and is in good standing as a foreign  corporation or limited  liability
company, as the case may be, and has and holds all organizational  power and all
governmental licenses, authorizations,  consents and approvals required to carry
on its business in each  jurisdiction in which its business is conducted  except
where the failure to so qualify or so hold could not  reasonably  be expected to
have a Material Adverse Effect.

     (b) Power and Authority;  Due  Authorization,  Execution and Delivery.  The
execution  and  delivery  by such  Originator  of this  Agreement  (or a Joinder
Agreement) and each other  Transaction  Document to which it is a party, and the
performance of its obligations  hereunder and thereunder,  and such Originator's
use of the proceeds of purchases  made  hereunder,  are within its  corporate or
limited  liability  company,  as applicable,  powers and authority and have been
duly  authorized by all necessary  corporate or limited  liability  company,  as
applicable, action on its part. This Agreement (or a Joinder Agreement) and each
other  Transaction  Document to which such  Originator  is a party has been duly
executed and delivered by such Originator.

     (c) No Conflict.  The  execution  and delivery by such  Originator  of this
Agreement (or a Joinder Agreement) and each other Transaction  Document to which
it is a party,  and the performance of its obligations  hereunder and thereunder
do not  contravene or violate (i) its Organic  Documents,  (ii) any law, rule or
regulation  applicable to it, (iii) any  restrictions  under (a) any  agreement,
contract  or  instrument  to  which  it is a party  or by which it or any of its
property is bound,  or (iv) any order,  writ,  judgment,  award,  injunction  or
decree  binding on or  affecting  it or its  property,  and do not result in the
creation or imposition of any Adverse Claim on assets of such  Originator or its
Subsidiaries (other than (A) as created under the Transaction  Documents and (B)
the  pledge of the  Subordinated  Notes  pursuant  to the Credit  Agreement  and
associated documents) except, in any case, where such contravention or violation
could not  reasonably  be expected  to have a Material  Adverse  Effect,  and no
transaction  contemplated  hereby requires compliance with any bulk sales act or
similar law.

     (d)  Governmental  Authorization.  Other than the  filing of the  financing
statements required hereunder,  no authorization or approval or other action by,
and no notice to or filing with, any  governmental  authority or regulatory body
is  required  for the due  execution  and  delivery by such  Originator  of this
Agreement (or a Joinder Agreement) and each other Transaction  Document to which
it is a party and the performance of its obligations hereunder and thereunder.

     (e) Actions,  Suits.  Except as disclosed in P&L's reports on SEC Form 10-K
or 10-Q, there are no actions,  suits or proceedings  pending, or to the best of
such Originator's knowledge,  threatened,  against or affecting such Originator,
or any of its properties, in or before any court, arbitrator or other body, that
could reasonably be expected to have a Material Adverse Effect.  Such Originator
is not in  default  with  respect  to any  order  of any  court,  arbitrator  or
governmental body.

     (f) Binding Effect.  This Agreement and each other Transaction  Document to
which  such  Originator  is a party  constitute  the  legal,  valid and  binding
obligations of such Originator enforceable against such Originator in accordance
with  their  respective  terms,  except as such  enforcement  may be  limited by
applicable bankruptcy, insolvency, reorganization or other similar laws relating
to or limiting  creditors' rights generally and by general  principles of equity
(regardless  of whether  enforcement  is sought in a proceeding  in equity or at
law).

     (g) Accuracy of Information.  All information  heretofore furnished by such
Originator  to P&L (or its assigns) for purposes of or in  connection  with this
Agreement,   any  of  the  other   Transaction   Documents  or  any  transaction
contemplated hereby or thereby is, and all such information  hereafter furnished
by such  Originator  to P&L (or its assigns) will be, true and accurate in every
material  respect on the date such  information  is stated or certified and does
not and will not contain any  material  misstatement  of fact or omit to state a
material fact or any fact necessary to make the statements contained therein not
misleading.

     (h) Use of Proceeds. No proceeds of any purchase hereunder will be used (i)
for a purpose that violates, or would be inconsistent with, Regulation T, U or X
promulgated by the Board of Governors of the Federal Reserve System from time to
time or (ii) to acquire  any  security  in any  transaction  which is subject to
Section 12, 13 or 14 of the Securities Exchange Act of 1934, as amended.

     (i)  Good  Title.  Immediately  prior  to  each  purchase  hereunder,  such
Originator  shall be the  legal  and  beneficial  owner of the  Receivables  and
Related  Security  with respect  thereto,  free and clear of any Adverse  Claim,
except as created by the Transaction Documents.

     (j) Perfection.  This Agreement,  together with the filing of the financing
statements  contemplated  hereby, is effective to, and shall, upon each purchase
hereunder,  transfer to P&L (and P&L shall acquire from such Originator) a valid
and perfected first priority ownership interest in each Receivable originated by
such Originator,  whether now existing or hereafter arising,  and in the Related
Security and  Collections  with respect  thereto,  free and clear of any Adverse
Claim except as created by the Transactions Documents. There have been delivered
to the Agent (as  assignee  of P&L) in form  suitable  for filing all  financing
statements or other similar instruments or documents necessary under the UCC (or
any comparable law) of all appropriate  jurisdictions to perfect P&L's ownership
interest in each Receivable, its Collections and the Related Security.

     (k) Places of Business and Locations of Records.  The  principal  places of
business and chief executive  office of such Originator and the offices where it
keeps all of its Records are located at the  address(es)  listed on Exhibit D or
such other  locations of which P&L has been notified in accordance  with Section
4.2(a) in  jurisdictions  where all action  required by such Section  4.2(a) has
been taken and completed.  Such  Originator's  Federal  Employer  Identification
Number is correctly set forth on Exhibit D.

     (l)  Collections.  The  conditions  and  requirements  set forth in Section
4.1(i)  have at all times  since the  Effective  Date  been  satisfied  and duly
performed.

     (m) Material Adverse Effect. Since December 31, 1999, no event has occurred
that would have a material  adverse effect on (i) the ability of such Originator
to perform its obligations under this Agreement,  or (ii) the  collectibility of
the Receivables  originated by such Originator generally or any material portion
of such Receivables.

     (n) Names.  In the past five (5) years,  such  Originator  has not used any
corporate or limited liability company names, trade names or assumed names other
than the name in which it has executed  this  Agreement  and other than "Peabody
Group."

     (o) Ownership of Originators.  P&L owns,  directly or indirectly,  not less
than 75% of the issued and outstanding  shares of stock or membership  interests
of such  Originator.  Such shares or membership  interests  are validly  issued,
fully paid and nonassessable, and there are no options, warrants or other rights
to acquire securities of such Originator.

     (p) Not a Holding Company or an Investment Company.  Such Originator is not
a "holding  company" or a "subsidiary  holding  company" of a "holding  company"
within  the  meaning of the  Public  Utility  Holding  Company  Act of 1935,  as
amended,  or any  successor  statute.  Such  Originator  is  not an  "investment
company"  within the meaning of the Investment  Company Act of 1940, as amended,
or any successor statute.

     (q) Compliance  with Law. Such Originator has complied in all respects with
all applicable laws, rules, regulations, orders, writs, judgments,  injunctions,
decrees or awards to which it may be  subject,  except  where the  failure to so
comply could not reasonably be expected to have a Material Adverse Effect.  Such
Originator  represents  and  warrants  that each  Receivable  originated  by it,
together with the Contract and Invoice related thereto,  does not contravene any
laws, rules or regulations  applicable thereto  (including,  without limitation,
laws, rules and regulations  relating to truth in lending,  fair credit billing,
fair credit reporting, equal credit opportunity,  fair debt collection practices
and  privacy),  and no part of such  Contract or Invoice is in  violation of any
such law, rule or regulation, except where such contravention or violation could
not reasonably be expected to have a Material Adverse Effect.

     (r)  Compliance  with  Credit  and  Collection  Policy.  From and after the
Effective Date,  such Originator has complied in all material  respects with the
Credit and Collection Policy with regard to each Receivable originated by it and
the related Invoice.

     (s)  Accounting.  The  manner in which  such  Originator  accounts  for the
transactions  contemplated  by this  Agreement does not jeopardize the true sale
analysis.

     (t)  Enforceability  of  Invoices.   Each  Invoice  with  respect  to  each
Receivable  originated  by such  Originator  is  effective  to  create,  and has
created, a legal, valid and binding obligation of the related Obligor to pay the
Outstanding Balance of the Receivable created thereunder (subject to adjustment,
to the extent provided  therein) and any accrued interest  thereon,  enforceable
against the Obligor in accordance with its terms, except as such enforcement may
be limited by applicable bankruptcy, insolvency, reorganization or other similar
laws  relating  to or  limiting  creditors'  rights  generally  and  by  general
principles  of  equity  (regardless  of  whether  enforcement  is  sought  in  a
proceeding in equity or at law).

     (u) Accounts. Each Receivable originated by such Originator is an "account"
under and as defined in the UCC of all applicable jurisdictions.

                                  ARTICLE II.
                             CONDITIONS OF PURCHASES

     Section 3.1 Conditions Precedent to Initial Purchase.  The initial purchase
from each Originator  hereunder is subject to the conditions  precedent that (1)
P&L shall have  executed  and  delivered  a  Subordinated  Note in favor of such
Originator,  and (2) P&L shall have  received,  on or before  such  Originator's
Applicable Closing Date, the following,  each (unless otherwise indicated) dated
such Originator's  Applicable Closing Date, and each in form, substance and date
reasonably satisfactory to P&L and the Agent (as assignee of P&L):

     (a) A copy of the  resolutions  of such  Originator's  board of  directors,
board of  managers,  general  partners or analogous  Persons of such  Originator
approving  the  Transaction  (a)  Documents  to  be  delivered  by  it  and  the
transactions  contemplated  hereby and thereby,  certified by such  Originator's
secretary, assistant secretary or analogous responsible officer;

     (b) A good standing  certificate for such Originator  issued as of a recent
date by the Secretary of State of the state of its formation;

     (c) A certificate of such Originator's  secretary,  assistant  secretary or
analogous  responsible  officer  certifying the names and true signatures of the
officers,  partners,  managers or members authorized on such Originator's behalf
to sign the  Transaction  Documents to be delivered by it, on which  certificate
P&L and its assigns may conclusively  rely until such time as they shall receive
from such  Originator a revised  certificate  meeting the  requirements  of this
subsection (c);

     (d) Recently certified copies of such Originator's Organic Documents;

     (e) Copies of the proper  financing  statements (Form UCC-1) that have been
duly  executed  by such  Originator,  naming  such  Originator  as the debtor or
seller,  P&L as the purchaser or secured  party,  and SPV as assignee of P&L, in
each case,  describing  in  reasonable  detail the  Receivables  and the Related
Security to be sold by such  Originator  to P&L  pursuant to this  Agreement  or
other similar instruments or documents, as may be necessary under the UCC of all
appropriate jurisdictions or any comparable law of all appropriate jurisdictions
to perfect P&L's ownership  interest in such  Receivables and Related  Security,
together with financing  statement  assignments (Form UCC-3) naming the Agent as
the ultimate assignee thereof;

     (f) A  written  search  report  from a Person  satisfactory  to P&L and its
assigns listing all effective financing  statements that name such Originator as
debtor,  seller or  assignor  and that are filed in the  jurisdictions  in which
filings were made pursuant to the foregoing subsection (e), together with copies
of such financing  statements (none of which,  except for those described in the
foregoing  subsection  (e) shall cover any  Receivable or any Related  Security)
which are to be sold by such  Originator to P&L hereunder,  and tax and judgment
lien search reports from a Person satisfactory to P&L and its assigns showing no
evidence of such liens filed against such personal property;

     (g)  Evidence  (i) of the  execution  and  delivery  by each of the parties
thereto of each of the other Transaction  Documents to be executed and delivered
in  connection  herewith and (ii) that each of the  conditions  precedent to the
execution,  delivery and effectiveness of such other  Transaction  Documents has
been satisfied to P&L's and its assigns' mutual satisfaction;

     (h)  Opinions  of such  Originator's  counsel  satisfactory  to P&L and its
assigns; and

     (i) A  certificate  from an officer of such  Originator  to the effect that
such  Originator  has  placed  on its most  recent,  and have  taken  all  steps
reasonably necessary to ensure that there shall be placed on subsequent,  master
ledger the following legend:

         "THE  RECEIVABLES  DESCRIBED  HEREIN,  TOGETHER  WITH  CERTAIN
         RELATED SECURITY,  HAVE BEEN SOLD, ARE NO LONGER OWNED BY THIS
         SUBSIDIARY  OR ITS  PARENT,  AND  ARE  SUBJECT  TO A  SECURITY
         INTEREST  IN FAVOR OF BANK  ONE,  NA, AS  AGENT,  FOR  VARIOUS
         PURCHASERS"

     Section 3.2 Conditions  Precedent to All Purchases.  Each purchase shall be
subject to the further conditions precedent that:

     (a) such Originator's Sale Termination Date shall not have occurred;

     (b) P&L (or its assigns) shall have received such other approvals, opinions
or documents as it may reasonably request; and

     (c)  on the  date  of  such  purchase,  each  of  the  representations  and
warranties  of such  Originator  set forth in  Article  II  hereof  are true and
correct on and as of the date of such purchase (and after giving effect thereto)
as though made on and as of such date.

     Section  3.3  Reaffirmation  of   Representations   and  Warranties.   Each
Originator,  by accepting  the Purchase  Price  related to each purchase of such
Originator's Receivables and Related Security, shall be deemed to have certified
that the representations and warranties of such Originator  contained in Article
II are  true and  correct  as to such  Originator  on and as of the date of such
purchase,  with the same effect as though  made on and as of such day,  and that
each of the  applicable  conditions  precedent set forth in this Article III has
been satisfied as of the date of such purchase.

                                   ARTICLE IV.
                                    COVENANTS

     Section  4.1  Affirmative  Covenants.  From  each  Originator's  Applicable
Closing Date until the earlier to occur of such  Originator's  Sale  Termination
Date or the date on which  this  Agreement  terminates  in  accordance  with its
terms:

     (a) Reporting.  From time to time upon request of P&L, such Originator will
provide  P&L with such  information  as P&L may request in order to enable it to
complete  each  Monthly  Report  required  to  be  delivered  by  it  under  the
Receivables Contribution Agreement.

     (b) Notices.  Such Originator will notify P&L and its assigns in writing of
any  of  the  following  promptly  upon  learning  of  the  occurrence  thereof,
describing  the same and, if  applicable,  the steps  being  taken with  respect
thereto:

          (i)  Judgment  and  Proceedings.  The entry of any  judgment or decree
     against such Originator or any of its  Subsidiaries if the aggregate amount
     of  all  judgments  and  decrees  then  outstanding  against  P&L  and  its
     Subsidiaries  (other than SPV) exceeds  $25,000,000 after deducting (A) the
     amount with respect to which they are insured and with respect to which the
     insurer has assumed responsibility in writing, and (B) the amount for which
     they are otherwise  indemnified  if the terms of such  indemnification  are
     satisfactory to P&L and its assigns.

          (ii) Material Adverse Effect. The occurrence of any event or condition
     that has had, or could  reasonably be expected to have, a Material  Adverse
     Effect.

          (iii) Defaults Under Other Agreements.  The occurrence of a default or
     an event of  default  under  any  other  financing  arrangement  evidencing
     $25,000,000 or more of indebtedness  pursuant to which such Originator is a
     debtor or an  obligor,  the  effect of which is to cause,  or to permit any
     Person to cause, the acceleration of Indebtedness evidenced thereby.

          (iv) Downgrade of such Originator.  Any downgrade in the rating of any
     Indebtedness  of or  guaranteed  by such  Originator  by  Standard & Poor's
     Ratings  Group or by Moody's  Investors  Service,  Inc.,  setting forth the
     Indebtedness affected and the nature of such change.

     (c) Compliance  with Laws and  Preservation  of Corporate  Existence.  Such
Originator  will  comply  in all  respects  with  all  applicable  laws,  rules,
regulations,  orders, writs, judgments,  injunctions, decrees or awards to which
it may be subject, except where the failure to so comply could not reasonably be
expected to have a Material  Adverse  Effect.  Such Originator will preserve and
maintain its corporate or limited liability company,  as applicable,  existence,
rights,  franchises and privileges in the  jurisdiction of its  incorporation or
formation, as applicable, and qualify and remain qualified in good standing as a
foreign corporation or foreign limited liability company, as applicable, in each
jurisdiction  where its  business is  conducted,  except where the failure to so
preserve  and  maintain or qualify  could not  reasonably  be expected to have a
Material Adverse Effect.

     (d) Audits.  Such  Originator will furnish to P&L and its assigns from time
to time such  information  with respect to it and the Receivables  sold by it as
P&L or its assigns may reasonably  request.  Such Originator  will, from time to
time during  regular  business  hours as  requested  by P&L or its assigns  upon
reasonable  notice and at the sole cost of such  Originator,  permit each of P&L
and its assigns, or their respective agents or  representatives:  (i) to examine
and make copies of and abstracts from all Records in the possession or under the
control of such Originator relating to the Receivables  originated by it and the
associated Collections and Related Security,  including, without limitation, the
related  Invoices,  and  (ii)  to  visit  the  offices  and  properties  of such
Originator for the purpose of examining  such materials  described in clause (i)
above, and to discuss matters relating to such Originator's  financial condition
or the Receivables  originated by it and the associated  Collections and Related
Security  or such  Originator's  (a)  performance  under any of the  Transaction
Documents to which it is a party or any Person's  performance under the Invoices
evidencing any Receivables originated by such Originator and, in each case, with
any of the  officers or employees of such  Originator  having  knowledge of such
matters.

     (e) Keeping and Marking of Records and Books.

          (i) Such  Originator  will maintain and implement  administrative  and
     operating procedures (including, without limitation, an ability to recreate
     records  evidencing  Receivables  originated  by it in  the  event  of  the
     destruction of the originals thereof), and keep and maintain all documents,
     books, records and other information  reasonably necessary or advisable for
     the  collection of all such  Receivables  (including,  without  limitation,
     records  adequate  to  permit  the  immediate  identification  of each  new
     Receivable  originated by it and all Collections of and adjustments to each
     such existing Receivable).  Such Originator will give P&L (and its assigns)
     notice  of  any  material  change  in  the   administrative  and  operating
     procedures referred to in the previous sentence.

          (ii) Such  Originator  will on or prior to the date  hereof,  mark its
     master data processing  records and other books and records relating to the
     Receivables with the legend required by Section 3.1(i) hereof.

     (f) Compliance with Contracts,  Invoices and Credit and Collection  Policy.
Such  Originator  will timely and fully (i) perform and comply with all material
provisions, covenants and other promises required to be observed by it under the
Contracts  and Invoices  related to the  Receivables  originated by it, and (ii)
comply in all material  respects with the Credit and Collection Policy in regard
to each such Receivable and the related Invoice.

     (g) Ownership.  Such Originator will take all necessary  action to (i) vest
legal and equitable title to the Receivables originated by it and the associated
Related  Security  and  Collections  irrevocably  in P&L,  free and clear of any
Adverse Claims other than Adverse Claims arising under the Transaction Documents
(including,  without limitation, the filing of all financing statements or other
similar instruments or documents necessary under the UCC (or any comparable law)
of all appropriate jurisdictions to perfect P&L's interests in such Receivables,
Related  Security and Collections  and such other action to perfect,  protect or
more fully  evidence  the  interest of P&L as P&L or its assigns may  reasonably
request),  and  (ii)  establish  and  maintain,  in favor  of P&L,  a valid  and
perfected first priority  ownership interest (and/or a valid and perfected first
priority  security  interest)  in all such  Receivables,  Related  Security  and
Collections  to the full  extent  contemplated  herein,  free  and  clear of any
Adverse Claims other than Adverse Claims arising under the Transaction Documents
(including,  without limitation, the filing of all financing statements or other
similar instruments or documents necessary under the UCC (or any comparable law)
of all appropriate  jurisdictions to perfect P&L's interest in such Receivables,
Related  Security and Collections  and such other action to perfect,  protect or
more fully  evidence the interests of P&L as P&L (or its assigns) may reasonably
request.

     (h) SPV  Separateness.  Such  Originator  shall take all reasonable  steps,
including, without limitation, all steps that P&L (or its assigns) may from time
to time reasonably request, to maintain such Originator's identity as a separate
legal  entity  from SPV and to make it  manifest  to  third  parties  that  such
Originator is an entity with assets and liabilities distinct from those of SPV.

     (i) Collections. Such Originator shall direct all Obligors to make payments
of such Originator's  Receivables  directly to a Lock Box or Collection  Account
that is the subject of a Collection  Account Agreement at a Collection Bank. If,
notwithstanding  the  foregoing,  any Obligor makes payment to such  Originator,
such Originator further agrees to remit any Collections  (including any security
deposits applied to the Outstanding  Balance of any Receivable) that it receives
on such Receivables  directly to a Collection Bank for deposit into a Collection
Account within two (2) Business Days after receipt thereof,  and agrees that all
such  Collections  shall be  deemed  to be  received  in  trust  for P&L and its
assigns;  provided that, to the extent  permitted  pursuant to Section 1.2, such
Originator  may retain such  Collections as a portion of the Purchase Price then
payable to or apply such Collections to the reduction of the outstanding balance
of its Subordinated Note.

     (j)  Taxes.  Except to the  extent  that such  Originator  is  included  in
consolidated  tax returns or reports filed by P&L, such Originator will file all
tax returns and reports  required by law to be filed by it and will promptly pay
all taxes and  governmental  charges  at any time  owing,  except any such taxes
which are not yet delinquent or are being diligently  contested in good faith by
appropriate  proceedings and for which adequate reserves in accordance with GAAP
shall have been set aside on its books.

     Section 4.2 Negative Covenants.  From such Originator's  Applicable Closing
Date until the earlier to occur of such  Originator's  Sale  Termination Date or
the date on which this Agreement  terminates in accordance with its terms,  such
Originator shall not:

     (a) Name  Change,  Offices  and  Records.  Change  its  name,  identity  or
organizational  structure  (within  the  meaning  of  Section  9-402(7)  of  any
applicable  enactment of the UCC) or relocate its chief executive  office or any
office  where  Records  are kept  unless  it shall  have:  (i) given P&L and its
assigns at least  thirty  (30)  days'  prior  written  notice  thereof  and (ii)
delivered to P&L (or its  assigns) all  financing  statements,  instruments  and
other documents requested by P&L (or its assigns) in connection with such change
or relocation.

     (b)  Change in Payment  Instructions  to  Obligors.  Make any change in the
instructions  to  Obligors  regarding  payments  to be made to any  Lock-Box  or
Collection Account, unless P&L and its assigns shall have received, at least ten
(10) days before the proposed  effective  date  therefor,  (i) written notice of
such addition,  termination or change and (ii) with respect to the addition of a
Collection  Bank or a  Collection  Account or Lock-Box,  an executed  Collection
Account  Agreement  with  respect to the new  Collection  Account  or  Lock-Box;
provided,  however,  that the  Servicer  may make  changes  in  instructions  to
Obligors regarding (a) payments if such new instructions require such Obligor to
make payments to another existing Collection Account.

     (c) Modifications to Invoices.  Extend, amend or otherwise modify the terms
of any Receivable or any Invoice related thereto except as otherwise directed by
the Servicer in accordance with the Credit and Collection Policy.

     (d) Sales,  Liens.  Except  pursuant to the  Transaction  Documents,  sell,
assign (by operation of law or otherwise) or otherwise  dispose of, or grant any
option  with  respect  to, or create or suffer to exist any  Adverse  Claim upon
(including,  without limitation,  the filing of any financing statement) or with
respect to, any Receivable  originated by it or the associated  Collections  and
other Related  Security,  or upon or with respect to any Invoice under which any
such Receivable arises, and will defend the right, title and interest of P&L and
its assigns in, to and under any of the foregoing  property,  against all claims
of third parties claiming through or under such Originator.

     (e) Deposits to  Collection  Accounts and  Collection  Account.  Deposit or
otherwise  credit,  or cause or permit to be so deposited  or  credited,  to any
Collection  Account,  any  cash or  cash  proceeds  other  than  Collections  of
Receivables.

     (f)  Mergers,  Consolidations  and  Acquisitions.  Liquidate  or  dissolve,
consolidate  with,  or merge into or with,  any other Person (other than another
Originator) without the consent of P&L and its assigns under Section 8.5 if such
merger  could  reasonably  be expected to have a Material  Adverse  Effect or to
result in a material  adverse  change in the nature or  characteristics  of such
Originator's Receivables taken as a whole, provided that, in connection with any
consolidation or merger (regardless of whether P&L's and its assigns' consent is
required pursuant hereto):

               (A) each of P&L and its assigns  pursuant to Section 8.5 receives
          prior  written  notice  of  such  consolidation  or  merger,  and  the
          successor or surviving  entity (if not an Originator)  unconditionally
          assumes such  Originator's (or  Originators')  respective  obligations
          under the  Transaction  Documents to which it is (or they are) a party
          immediately prior to giving effect to such consolidation or merger,

               (B)  all UCC  financing  statements  necessary  to  maintain  the
          validity and perfection of P&L's and its assigns' ownership  interests
          in the  Receivables  and Related  Security  acquired or to be acquired
          from such survivor  under this  Agreement  have been duly executed and
          filed in all necessary jurisdictions, and

               (c) if the  surviving  entity  in such  transaction(s)  is not an
          existing Originator under this Agreement, all other documents required
          to be delivered in connection with a Joinder Agreement  hereunder have
          been duly executed and delivered substantially  contemporaneously with
          such transaction(s).

               (g) Receivables Not to be Evidenced by Promissory Notes. Take any
          action to cause or permit  any  Receivable  generated  by it to become
          evidenced  by any  "instrument"  (as defined in the  applicable  UCC),
          except in  connection  with the  collection  of  overdue  Receivables,
          provided that the original of any such  instrument is delivered to P&L
          for immediate delivery to its assignees, duly endorsed.

               (h)  Accounting  for  Purchases.  Account  for  the  transactions
          contemplated  hereby  in any  manner  other  than  as a sale  by  such
          Originator to P&L of Receivables originated by such Originator and the
          associated Collections and Related Security.

                                   ARTICLE V.
                        JOINDER OF ADDITIONAL ORIGINATORS

     Section 5.1  Addition of New  Originators.  From time to time upon not less
than 60 days'  prior  written  notice to P&L and its  assigns  (or such  shorter
period of time as P&L and its assigns may agree upon), P&L may agree that one or
more of its existing or  hereafter  acquired  Subsidiaries  of which it owns not
less  than  75%  of the  outstanding  voting  securities  become  an  Originator
hereunder.  No such  addition  shall  become  effective  (a) without the written
consent  of P&L  (and its  assigns  pursuant  to  Section  8.5)  but may  become
effective  prior to such 60th day if such written consent is given more promptly
and (b) unless all conditions precedent to such addition required by Section 5.2
below are satisfied prior to such date.

     Section 5.2  Documentation.  In the event that P&L and its assigns pursuant
to Section 8.5 consent to the addition of a New Originator,  such New Originator
shall  execute a Joinder  Agreement  in the form of Exhibit C hereto (a "Joinder
Agreement") and shall deliver each of the documents,  certificates  and opinions
required  to be  delivered  under  Section  3.1  prior to such New  Originator's
Closing Date,  together with such updated Exhibits hereto as may be necessary to
ensure that after giving effect to the addition of such New Originator,  each of
the  representations  and  warranties  of such New  Originator  under Article II
hereof will be true and  correct,  and P&L will deliver a  Subordinated  Note to
such New Originator.

                                   ARTICLE VI.
                      ADDITIONAL RIGHTS AND OBLIGATIONS IN
                           RESPECT OF THE RECEIVABLES

     Section 6.1 Rights of P&L. Each  Originator  hereby  authorizes P&L and the
Servicer (if other than P&L or such  Originator) or their  respective  designees
and assigns to take any and all steps in such  Originator's  name  necessary  or
desirable, in their respective  determination,  to collect all amounts due under
any and  all  Receivables  originated  by such  Originator,  including,  without
limitation,  endorsing such  Originator's  name on checks and other  instruments
representing  Collections and enforcing such  Receivables,  the Invoices and the
provisions of the related  Contracts and Related  Security that concern  payment
and/or enforcement of rights to payment.

     Section 6.2  Responsibilities  of the  Originators.  Anything herein to the
contrary notwithstanding:

     (a) Performance Under Contracts.  Each Originator shall remain  responsible
for  performing its  obligations  hereunder and under the Contracts and Invoices
applicable  to such  Originator,  and the  exercise by P&L or its  designees  or
assigns of their rights  hereunder  shall not relieve any  Originator  from such
obligations.

     (b) Power of Attorney.  Each  Originator  hereby grants to the Servicer (if
other than such Originator) an irrevocable power of attorney, with full power of
substitution,  coupled with an interest,  to take in the name of such Originator
all steps necessary or advisable to endorse,  negotiate or otherwise  realize on
any writing or other right of any kind held or transmitted by such Originator or
transmitted  or  received  by P&L  (whether  or not  from  such  Originator)  in
connection with any Receivables generated by such Originator.

     Section 6.3 Further Action  Evidencing  Purchases.  Each Originator  agrees
that from time to time, at its expense, it will promptly execute and deliver all
further  instruments and documents,  and take all further action that P&L or any
of its assigns may reasonably request in order to perfect, protect or more fully
evidence P&L's  ownership of the  Receivables  generated by such Originator (and
the Related Security)  purchased by P&L hereunder,  or to enable P&L to exercise
or enforce any of its rights hereunder or under any other Transaction  Document.
Without limiting the generality of the foregoing, upon the request of P&L or any
of its assigns, each Originator will:

     (a)  execute  and  file  such  financing  or  continuation  statements,  or
amendments  thereto  or  assignments  thereof,  and such  other  instruments  or
notices, as may be necessary or appropriate; and

     (b) mark its master ledger with the legend set forth in Section 3.1(i).

Each Originator hereby authorizes P&L or its designees or assigns to file one or
more financing or continuation statements, and amendments thereto and assignment
thereof,  relative to all or any of the Receivables  (and the Related  Security)
now existing or hereafter sold by such  Originator.  If such Originator fails to
perform any of its agreements or obligations  under this  Agreement,  P&L or its
designee may (but shall not be required to) itself perform, or cause performance
of, such  agreement  or  obligation,  and the  expenses  of P&L or its  designee
incurred in connection therewith shall be payable by such Originator.

     Section 6.4  Application of Collections.  Except as otherwise  specified by
such  Obligor or required by the  underlying  Contract or Invoice or  applicable
law: any payment by an Obligor in respect of any indebtedness owed by it to such
Originator or to P&L shall be applied  first,  as a Collection of any Receivable
or Receivables  then outstanding of such Obligor in the order of the age of such
Receivables,  starting  with the  oldest  of such  Receivables  (unless  another
reasonable  basis for  allocation  of such payments to the  Receivables  of such
Obligor exists), and second, to any other indebtedness of such Obligor.

                                  ARTICLE VII.
                                 INDEMNIFICATION

     Section 7.1  Indemnities  by the  Originators.  Without  limiting any other
rights that P&L or its assigns may have hereunder or under  applicable law, each
Originator  hereby  agrees to  indemnify  (and pay upon  demand  to) P&L and its
assigns,  officers,   managers,   directors,   agents  and  employees  (each  an
"Indemnified  Party")  from and against  any and all  damages,  losses,  claims,
taxes, liabilities, costs, expenses and for all other amounts payable, including
reasonable  attorneys' fees (which attorneys may be employees of any Indemnified
Party) and disbursements (all of the foregoing being collectively referred to as
"Indemnified Amounts") awarded against or incurred by any of them arising out of
or as a  result  of  this  Agreement  or the  acquisition,  either  directly  or
indirectly,  by P&L of any Receivable originated by such Originator,  excluding,
however, in all of the foregoing instances:

     (a)  Indemnified  Amounts  to the  extent  a final  judgment  of a court of
competent  jurisdiction holds that such Indemnified  Amounts resulted from gross
negligence or willful  misconduct on the part of the  Indemnified  Party seeking
indemnification;

     (b)  Indemnified  Amounts to the extent the same includes losses in respect
of Receivables that are  uncollectible on account of the insolvency,  bankruptcy
or lack of creditworthiness of the related Obligor; or

     (c) taxes imposed by the  jurisdiction  in which such  Indemnified  Party's
principal  executive office is located, on or measured by the overall net income
of such  Indemnified  Party to the extent that the  computation of such taxes is
consistent with the  characterization for income tax purposes of the acquisition
by  P&L  of  Receivables  as a true  sale  by  such  Originator  to P&L of  such
Receivables and the associated Related Security;

provided,  however,  that  nothing  contained in this  sentence  shall limit the
liability  of such  Originator  or limit the recourse of P&L and its assigns for
amounts otherwise  specifically provided to be paid by such Originator under the
terms of this  Agreement.  Without  limiting  the  generality  of the  foregoing
indemnification,  but  subject to the  exclusions  in clauses  (a),  (b) and (c)
above,  each Originator shall indemnify the Indemnified  Parties and its assigns
for Indemnified  Amounts (including,  without  limitation,  losses in respect of
uncollectible  receivables,  regardless of whether reimbursement  therefor would
constitute recourse to such Originator) relating to or resulting from:

          (i) any  representation or warranty made by such Originator (or any of
     its  officers)  under or in  connection  with  this  Agreement,  any  other
     Transaction  Document  to which  such  Originator  is a party or any  other
     information  or report  delivered  by any such  Person  pursuant  hereto or
     thereto, which shall have been false or incorrect when made or deemed made;

          (ii) the failure by such Originator to comply with any applicable law,
     rule or regulation with respect to any Receivable  originated by it, or any
     Contract  or Invoice  related  thereto,  or the  nonconformity  of any such
     Receivable,  Contract  or Invoice  with any such  applicable  law,  rule or
     regulation  or any failure of any  Originator to keep or perform any of its
     obligations,  express or  implied,  with  respect to any such  Contract  or
     Invoice;

          (iii) any failure of such Originator to perform its duties,  covenants
     or other obligations in accordance with the provisions of this Agreement or
     any other Transaction Document to which it is a party;

          (iv) any products liability,  personal injury or damage suit, or other
     similar  claim  arising  out of or in  connection  with  goods that are the
     subject of any  Contract or Invoice or any  Receivable  originated  by such
     Originator;

          (v) any dispute,  claim,  offset or defense  (other than  discharge in
     bankruptcy of the Obligor) of the Obligor to the payment of any  Receivable
     originated by such Originator  (including,  without  limitation,  a defense
     based on such  Receivable  or the  related  Contract or Invoice not being a
     legal, valid and binding obligation of such Obligor  enforceable against it
     in accordance  with its terms),  or any other claim resulting from the sale
     of goods related to such Receivable or the furnishing or failure to furnish
     such goods;

          (vi) the  commingling of  Collections of such  Receivables at any time
     with other funds;

          (vii)  any  investigation,  litigation  or  proceeding  related  to or
     arising from this Agreement or any other Transaction Document to which such
     Originator is a party, the  transactions  contemplated  hereby,  the use by
     such  Originator  of the proceeds of any purchase  from it hereunder or any
     other  investigation,  litigation or proceeding relating to such Originator
     in which any Indemnified  Party becomes  involved as a result of any of the
     transactions contemplated hereby;

          (viii) any  inability  to  litigate  any claim  against any Obligor in
     respect of any such  Receivable  as a result of such  Obligor  being immune
     from civil and  commercial  law and suit on the grounds of  sovereignty  or
     otherwise from any legal action, suit or proceeding;

          (ix) (A) failure of such Originator generally to pay its debts as such
     debts  become  due or  admission  by  such  Originator  in  writing  of its
     inability to pay its debts  generally or any making by such Originator of a
     general assignment for the benefit of creditors;  or (B) the institution of
     any  proceeding  by or against such  Originator  seeking to  adjudicate  it
     bankrupt or insolvent, or seeking liquidation,  winding up, reorganization,
     arrangement,  adjustment,  protection,  relief or  composition of it or its
     debts under any law relating to bankruptcy, insolvency or reorganization or
     relief of  debtors,  or  seeking  the  entry of an order for  relief or the
     appointment of a receiver,  trustee or other similar official for it or any
     substantial  part of its property,  or (C) the taking by such Originator of
     any  corporate  action to authorize any of the actions set forth in clauses
     (A) or (B) above in this clause (ix);

          (x) any  failure  to vest and  maintain  vested in P&L or its  assigns
     (subject to the  Transaction  Documents),  or to transfer to P&L, legal and
     equitable title to, and ownership of, a first priority perfected  ownership
     interest  in  the  Receivables   originated  by  such  Originator  and  the
     associated Related Security and Collections,  free and clear of any Adverse
     Claim (except as created by the Transaction Documents); and

          (xi) the  failure to have  filed,  or any delay in  filing,  financing
     statements or other similar  instruments or documents  under the UCC of any
     applicable  jurisdiction or other  applicable laws with respect to any such
     Receivable,  the Related Security and Collections with respect thereto, and
     the proceeds of any  thereof,  whether at the time of sale to P&L or at any
     subsequent time.

     Section 7.2 Costs,  Expenses and Taxes.  In addition to the  obligations of
each Originator under Section 7.1, each Originator agrees to pay on demand:

     (a) all  reasonable  costs and  expenses,  including  attorneys'  fees,  in
connection  with the  enforcement  against such Originator of this Agreement and
the other Transaction Documents executed by such Originator; and

     (b) all stamp duties and other similar  filing or recording  taxes and fees
payable or determined to be payable in connection with the execution,  delivery,
filing  and  recording  of this  Agreement  or the other  Transaction  Documents
executed by such Originator, and agrees to indemnify Indemnified Parties against
any  liabilities  with  respect  to or  resulting  from any  delay in  paying or
omission to pay such taxes and fees.

                                  ARTICLE VIII.
                                  MISCELLANEOUS

     Section 8.1 Waivers and  Amendments.  The  provisions of this Agreement may
from time to time be amended,  restated,  otherwise  modified or waived, if such
amendment,  modification or waiver is in writing and consented to by P&L and its
assigns  pursuant to Section  8.5. No failure or delay on the part of P&L,  such
assigns  or any  third  party  beneficiary  in  exercising  any  power  or right
hereunder  shall  operate as a waiver  thereof,  nor shall any single or partial
exercise  of any such  power or right  preclude  any other or  further  exercise
thereof or the  exercise of any other power or right.  No notice to or demand on
any party hereto, SPV or the Agent in any case shall entitle it to any notice or
demand in similar or other  circumstances.  No waiver or  approval by P&L or its
assigns under this  Agreement  shall,  except as may otherwise be stated in such
waiver or approval,  be  applicable  to  subsequent  transactions.  No waiver or
approval under this Agreement shall require any similar or dissimilar  waiver or
approval thereafter to be granted hereunder.

     Section 8.2 Notices, Etc. All notices and other communications provided for
hereunder  shall,  unless  otherwise  stated  herein,  be in writing  (including
facsimile  communication)  and shall be personally  delivered or sent by express
mail or courier or by certified mail,  postage-prepaid,  or by facsimile, to the
intended  party (a) in the case of any  Originator,  to it in care of P&L at its
address set forth in the Receivables Purchase Agreement, and in the case of P&L,
to it at its address set forth in the  Receivables  Purchase  Agreement,  or, in
each of the foregoing  cases, at such other address or facsimile number as shall
be designated by such party in a written notice to the other parties hereto. All
such notices and communications shall be effective,  (i) if personally delivered
or sent by express mail or courier or if sent by certified  mail, when received,
and (ii) if transmitted by facsimile,  when sent, receipt confirmed by telephone
or electronic means.

     Section  8.3  Cumulative   Remedies.   The  remedies  herein  provided  are
cumulative and not exclusive of any remedies provided by law.

     Section 8.4 Binding Effect; Assignability.  This Agreement shall be binding
upon and inure to the benefit of the parties and their respective successors and
permitted assigns;  provided,  however, that no Originator may assign its rights
hereunder or any interest  herein  without the prior written  consent of P&L and
its assigns  pursuant to Section 8.5. This Agreement shall create and constitute
the continuing  obligations of the parties hereto in accordance  with its terms,
and shall  remain in full  force and effect  until the date  after the  Facility
Termination Date on which all Aggregate  Unpaids under the Receivables  Purchase
Agreement  have been paid in full.  The rights and remedies  with respect to any
breach of any  representation  and warranty made by any  Originator  pursuant to
Article II and the  indemnification and payment provisions of Article V shall be
continuing and shall survive any termination of this Agreement.

     Section 8.5  Acknowledgment  and Agreement.  Each of the Originators hereby
expressly acknowledges and agrees that all of P&L's rights, title, and interests
in, to, and under this Agreement shall be assigned by P&L to SPV pursuant to the
Receivables  Contribution Agreement, and by SPV to the Agent, for the benefit of
the Purchasers,  pursuant to the Receivables Purchase Agreement, and each of the
Originators   consents  to  such   assignments.   Each  of  the  parties  hereto
acknowledges  and agrees that SPV, the Agent and the  Purchasers are third party
beneficiaries  of the  rights  of P&L  arising  hereunder  and  under  the other
Transaction  Documents to which P&L is a party. Each of the Originators  further
acknowledges  and  agrees  that all  right,  title  and  interest  in and to the
Lock-Boxes and Collection Accounts has been transferred to and vested in SPV and
its  assigns,  and SPV may at any time in its sole  discretion  (subject  to the
terms  of  the  Receivables   Purchase  Agreement  and  the  Collection  Account
Agreements executed in connection  therewith) direct and re-direct payments from
such Lock-Boxes and Collection Accounts.

     Section 8.6 GOVERNING LAW. EACH TRANSACTION  DOCUMENT SHALL BE GOVERNED BY,
AND  CONSTRUED IN  ACCORDANCE  WITH,  THE LAW OF THE STATE OF ILLINOIS,  without
regard to the  principles of conflicts of laws thereof EXCEPT TO THE EXTENT THAT
THE  PERFECTION OF THE  OWNERSHIP  INTERESTS OF SPV IS GOVERNED BY THE LAWS OF A
JURISDICTION OTHER THAN THE STATE OF ILLINOIS.

     Section  8.7   Submission  to   Jurisdiction.   EACH  PARTY  HERETO  HEREBY
IRREVOCABLY (a) SUBMITS TO THE NON-EXCLUSIVE  JURISDICTION OF ANY ILLINOIS STATE
OR UNITED STATES FEDERAL COURT SITTING IN CHICAGO,  ILLINOIS, OVER ANY ACTION OR
PROCEEDING  ARISING OUT OF OR RELATING TO ANY TRANSACTION  DOCUMENT;  (b) AGREES
THAT ALL  CLAIMS  IN  RESPECT  OF SUCH  ACTION  OR  PROCEEDING  MAY BE HEARD AND
DETERMINED IN SUCH COURT;  (c) WAIVES,  TO THE FULLEST EXTENT IT MAY EFFECTIVELY
DO SO  UNDER  APPLICABLE  LAW,  THE  DEFENSE  OF AN  INCONVENIENT  FORUM  TO THE
MAINTENANCE OF SUCH ACTION OR PROCEEDING; (d) CONSENTS TO THE SERVICE OF ANY AND
ALL  PROCESS IN ANY SUCH ACTION OR  PROCEEDING  BY THE MAILING OF COPIES OF SUCH
PROCESS TO SUCH PERSON AT ITS ADDRESS  SPECIFIED  IN SECTION 6.2; AND (e) TO THE
EXTENT  ALLOWED  BY LAW,  AGREES  THAT A FINAL  JUDGMENT  IN ANY SUCH  ACTION OR
PROCEEDING  SHALL BE CONCLUSIVE  AND MAY BE ENFORCED IN OTHER  JURISDICTIONS  BY
SUIT ON THE  JUDGMENT OR IN ANY OTHER  MANNER  PROVIDED BY LAW.  NOTHING IN THIS
SECTION  6.7 SHALL  AFFECT  BUYER'S  RIGHT TO SERVE  LEGAL  PROCESS IN ANY OTHER
MANNER  PERMITTED  BY LAW OR TO BRING  ANY  ACTION  OR  PROCEEDING  AGAINST  ANY
ORIGINATOR OR ITS PROPERTY IN THE COURTS OF ANY OTHER JURISDICTION.

     Section 8.8 Waiver of Jury Trial.  EACH PARTY HERETO  EXPRESSLY  WAIVES ANY
RIGHT TO A TRIAL BY JURY IN ANY  ACTION OR  PROCEEDING  TO ENFORCE OR DEFEND ANY
RIGHTS  UNDER  THIS  AGREEMENT,  ANY OTHER  TRANSACTION  DOCUMENT,  OR UNDER ANY
AMENDMENT,  INSTRUMENT,  JOINDER AGREEMENT OR DOCUMENT DELIVERED OR WHICH MAY IN
THE FUTURE BE DELIVERED BY IT OR ON ITS BEHALF IN CONNECTION HEREWITH OR ARISING
FROM ANY  RELATIONSHIP  EXISTING IN CONNECTION  WITH THIS AGREEMENT OR ANY OTHER
TRANSACTION  DOCUMENT,  AND AGREES THAT ANY SUCH ACTION OR  PROCEEDING  SHALL BE
TRIED BEFORE A COURT AND NOT BEFORE A JURY.

     Section 8.9 Captions and Cross References;  Incorporation by Reference. The
various captions (including,  without limitation, the table of contents) in this
Agreement are included for convenience  only and shall not affect the meaning or
interpretation of any provision of this Agreement.  References in this Agreement
to any  underscored  Section or Exhibit  are to such  Section or Exhibit of this
Agreement,  as the case may be. The Exhibits  hereto are hereby  incorporated by
reference into and made a part of this Agreement.

     Section 8.10 Execution in  Counterparts.  This Agreement may be executed in
any  number  of  counterparts  and  by  different  parties  hereto  in  separate
counterparts,  each of which so executed  shall be deemed to be an original  and
all of which taken together shall constitute one and the same agreement.

                            <signature pages follow>

     IN WITNESS  WHEREOF,  the parties  have caused  this  Agreement  to be duly
executed and delivered as of the date first above written.

                                     Big Sky Coal Company,
                                     Caballo Coal Company,
                                     Eastern Associated Coal Corp.,
                                     Peabody COALSALES Company,
                                     Peabody Coal Company,
                                     Peabody Western Coal Company,
                                     Powder River Coal Company,
                                     Seneca Coal Company and
                                     Pine Ridge Coal Company

                                     By:  /s/ Steven F. Schaab
                                          --------------------------------------
                                          Name: Steven F. Schaab
                                          Title: Vice President and Treasurer

                                     By:  /s/ Joseph C. Klingl
                                          --------------------------------------
                                          Name: Joseph C. Klingl
                                          Title: Vice President

                                      P&L COAL HOLDINGS CORPORATION

                                      By: /s/ Joseph C. Meek
                                          --------------------------------------
                                          Name: Joseph C. Meek
                                          Title: Assistant Treasurer
<PAGE>
                                    EXHIBIT A
                                   DEFINITIONS

     A.  Incorporation of Receivables  Purchase  Agreement  Definitions.  Unless
otherwise  defined  herein,  terms that are capitalized and used throughout this
Agreement are used as defined in the Receivables Purchase Agreement (hereinafter
defined).

     B. Certain Defined Terms. The following terms have the respective  meanings
indicated hereinbelow:

     "Additional  Receivables"  means,  with  respect  to  any  Originator,  all
Receivables  of such  Originator  arising  after the close of such  Originator's
business  on the  Initial  Cut-Off  Date  (in the  case  of each of the  Initial
Originators)  or the applicable New Originator  Cut-Off Date (in the case of any
New Originator) through and including such Originator's Sale Termination Date.

     "Agreement" means this Receivables Sale Agreement,  as it may be amended or
modified and in effect from time to time in accordance with the terms hereof.

     "Applicable  Closing  Date"  means (i) with  respect to each of the Initial
Originators,  the  Initial  Closing  Date,  and (ii)  with  respect  to each New
Originator, its New Originator Closing Date.

     "Applicable   Cut-Off   Date"  means  (i)  with  respect  to  each  Initial
Originator,  the Initial Cut-Off Date, (ii) with respect to each New Originator,
its New Originator Cut-Off Date, and (iii) with respect to all Originators, each
Cut-Off Date after the  applicable  date in the  preceding  clause (i) or clause
(ii).

     "Charged-Off  Trigger  Ratio"  means,  as of any  Cut-Off  Date,  the ratio
(expressed  as a  percentage)  computed  by  dividing  (x) the  total  amount of
Receivables that became  Charged-Off  Receivables  during the Measurement Period
ending on such Cut-Off  Date, by (y) the  aggregate  Outstanding  Balance of all
Receivables as of such Cut-Off Date.

     "Deemed Collections" means the aggregate of all amounts an Originator shall
have been deemed to have received as a Collection of a Receivable sold by it. An
Originator shall be deemed to have received a Collection (but only to the extent
of the reduction or cancellation identified below) of a Receivable sold by it if
at any time (i) the  Outstanding  Balance of any such  Receivable  is either (x)
reduced as a result of any  defective  or rejected  goods,  any  discount or any
adjustment  or  otherwise by such  Originator  (other than cash  Collections  on
account of the  Receivables)  or (y) reduced or canceled as a result of a setoff
in respect of any claim by any Person (whether such claim arises out of the same
or a  related  transaction  or an  unrelated  transaction)  or  (ii)  any of the
representations  or  warranties in Article II were not true with respect to such
Receivable at the time of its sale hereunder.

     "Default  Rate"  means  the sum of the  Prime  Rate  plus  2.0%  per  annum
(computed  for actual days elapsed on the basis of a year  consisting of 365, or
when appropriate, 366 days).

     "Discount  Factor"  means,  at any time, a ratio  (expressed  as a decimal)
calculated in accordance  with the most recent Weekly Report in accordance  with
the following formula:
                              ----                     ----
           DF = CTR        +  |  (AM + 4) x (CFR + 0.02)   |
                              |  -----------------------   |
                              |           360              |
                              |                           |
                              ----                     ----
where:

     DF = the Discount Factor;

     CTR = the Charged-Off Trigger Ratio;

     AM = the period (expressed in days) equal to the weighted averaged maturity
of the outstanding Receivables; and

     CFR = the sum of (i) the weighted  average of the "Discount  Rates" and the
annualized per annum equivalent interest rate of the "CP Costs" of all Purchaser
Interests  outstanding under the Receivables  Purchase Agreement,  plus (ii) the
weighted  average  annualized  fees payable by SPV in respect of the Receivables
Purchase Agreement, determined as a percentage of Capital,

     in each case, determined as of the date set forth in such Weekly Report.

     "Event of Bankruptcy"  means an event in which (i) a Person shall generally
not pay its  debts as such  debts  become  due or shall  admit  in  writing  its
inability to pay its debts generally or shall make a general  assignment for the
benefit of creditors or (ii) any proceeding  shall be instituted by or against a
Person seeking to adjudicate it bankrupt or insolvent,  or seeking  liquidation,
winding  up,  reorganization,  arrangement,  adjustment,  protection,  relief or
composition of it or its debts under any law relating to bankruptcy,  insolvency
or  reorganization  or relief of  debtors,  or seeking the entry of an order for
relief or the appointment of a receiver,  trustee or other similar  official for
it or any  substantial  part of its  property  or (iii) a Person  shall take any
corporate  action to  authorize  any of the  actions set forth in clauses (i) or
(ii) above.

     "Initial  Closing  Date"  means the  Effective  Date under the  Receivables
Purchase Agreement.

     "Initial  Cut-Off  Date" means the Cut-Off Date  immediately  preceding the
Initial Closing Date.

     "Initial  Originators"  has the meaning  set forth in the  preamble of this
Agreement.

     "Initial   Receivables"   means,  with  respect  to  any  Originator,   all
Receivables of such Originator that existed and were owing to such Originator as
of the close of such  Originator's  business on the Initial Cut-Off Date (in the
case  of each of the  Initial  Originators)  or the  applicable  New  Originator
Cut-Off Date (in the case of any New Originator).

     "Joinder Agreement" has the meaning set forth in Section 5.2 hereof.

     "Material Adverse Effect" means, with respect to any Originator, a material
adverse effect on (i) the ability of such  Originator to perform its obligations
under this  Agreement,  (ii) the legality,  validity or  enforceability  of this
Agreement or any other Transaction Document to which such Originator is a party,
(iii)  P&L's  ownership  interest  in  the  Receivables   generally  or  in  any
significant portion of the Receivables,  the Related Security or the Collections
with  respect  thereto,  in each  case,  relating  to  Receivables  sold by such
Originator hereunder, or (iv) the collectibility of the Receivables generally or
of  any  material  portion  of  the  Receivables,  in  each  case,  relating  to
Receivables sold by such Originator hereunder.

     "Monthly Report" has the meaning specified in the Receivables  Contribution
Agreement.

     "New Originator" means any direct or indirect  Subsidiary of which P&L owns
not less than 75% of each class of the outstanding capital stock or other equity
interests that hereafter  becomes a Originator under this Agreement by executing
a Joinder Agreement and complying with the provisions of Article V hereof.

     "New Originator Closing Date" means, as to any New Originator, the Business
Day on which each of the conditions set forth in Article V has been satisfied.

     "New Originator  Cut-Off Date" means,  with respect to each New Originator,
the Cut-Off Date immediately preceding its New Originator Closing Date.

     "Organic Documents" means with respect to (i) a corporation,  such Person's
articles or certificate of incorporation and its by-laws, (ii) with respect to a
limited liability  company,  such Person's  certificate of formation and limited
liability  company or  operating  agreement  (or  similar  agreement  among such
Person's members),  (iii) with respect to a limited  partnership,  such Person's
certificate  of  limited  partnership  (or  other  equivalent)  and  partnership
agreement,   and  (iv)  with  respect  to  any  other   Person,   such  Person's
organizational  charter  as  required  by  the  jurisdiction  of  such  Person's
organization  and any other  agreement  or  document  evidencing  the  rights of
holders of equity  interests in such Person  and/or the rights of any  officers,
directors or managers of such Person.

     "Originator" means an Initial Originator or a New Originator.

     "P&L" has the meaning specified in the preamble of this Agreement.

     "Purchase  Price" means,  with respect to any purchase of  Receivables  and
their Related Security from an Originator on any date, the aggregate price to be
paid therefor by P&L to the applicable Originator in accordance with Section 1.2
of this  Agreement on such date,  which price shall equal (i) the product of (x)
the Outstanding  Balance of such Receivables as of the Applicable  Cut-Off Date,
multiplied by (y) one minus the Discount  Factor then in effect,  minus (ii) any
Purchase  Price  Credits to be credited  against the  Purchase  Price  otherwise
payable in accordance with Section 1.3(a) of this Agreement,  and plus (iii) any
Purchase Price Increases to be made to the Purchase Price  otherwise  payable in
accordance with section 1.3(b) of this Agreement.

     "Purchase Price Credit" has the meaning set forth in Section 1.3(a) hereof.

     "Purchase  Price  Increase"  has the  meaning  set forth in Section  1.3(b)
hereof.

     "Receivables   Contribution   Agreement"  means  that  certain  Receivables
Contribution  Agreement  dated as of March 31, 2000, by and between P&L and SPV,
as amended,  restated or otherwise modified from time to time in accordance with
the terms thereof and of the Receivables Purchase Agreement.

     "Receivables  Purchase Agreement" means that certain  Receivables  Purchase
Agreement  dated as of March 31,  2000,  by and among SPV,  as Seller,  P&L,  as
initial  Servicer,   International  Securitization  Corporation,  the  Financial
Institutions  from time to time party  thereto,  and Bank One, NA, as Agent,  as
amended, restated or otherwise modified from time to time in accordance with the
terms thereof.

     "Related Security" means, with respect to any Receivable:

     (i) all of the applicable  Originator's interest in the inventory and goods
(including  returned  or  repossessed  inventory  or goods),  if any,  the sale,
financing or lease of which by such Originator gave rise to such Receivable, and
all insurance contracts with respect thereto,

     (ii) all other  security  interests or liens and property  subject  thereto
from time to time,  if any,  purporting  to secure  payment of such  Receivable,
whether  pursuant  to the  Contract  or Invoice  related to such  Receivable  or
otherwise,  together  with all  financing  statements  and  security  agreements
describing any collateral securing such Receivable,

     (iii) all guaranties,  letters of credit, insurance and other agreements or
arrangements  of whatever  character  from time to time  supporting  or securing
payment of such Receivable  whether  pursuant to the Contract or Invoice related
to such Receivable or otherwise,

     (iv) all Records related to such Receivable, and

     (v) all proceeds of any of the foregoing;

     provided,  however,  that in no event shall "Related  Security" include any
right,  duty or  obligation  under  any  Contract  other  than that the right to
receive  payments  thereunder (and any collateral for,  guaranty of or letter of
credit, surety bond or other credit support for any such payment right).

     "Sale  Termination  Date"  means,  with  respect  to each  Originator,  the
earliest to occur of (i) the  Facility  Termination  Date under the  Receivables
Purchase Agreement, (ii) the Termination Date under the Receivables Contribution
Agreement, (iii) the date on which an Event of Bankruptcy occurs with respect to
such Originator,  (iv) the date on which a merger or  consolidation  occurs with
respect to such Originator that does not comply with the requirements of Section
4.2(f),  (v) if such  Originator is a Material  Originator,  the date on which a
Change of Control  occurs with respect to it to which P&L and its assigns  under
Section 8.5 do not give their prior written  consent,  (vi) following  breach by
such Originator of any of its material covenants or agreements contained in this
Agreement,  the date  specified  by P&L or its  assigns  under  Section 8.5 in a
written notice delivered to and received by such Originator,  and (vii) the date
specified by such  Originator in a written  notice  delivered to and received by
P&L and its assigns under Section 8.5.

     "SPV" means P&L  Receivables  Company,  LLC, a Delaware  limited  liability
company.

     "Subordinated Loan" means a subordinated  revolving loan from an Originator
to P&L which is evidenced by a Subordinated Note.

     "Subordinated  Note" means a  subordinated  promissory  note in the form of
Exhibit  B  hereto  issued  by P&L  to an  Originator,  as it  may  be  amended,
supplemented,  endorsed or otherwise  modified from time to time in substitution
therefor or renewal thereof in accordance with the Transaction Documents.

     All accounting terms not specifically  defined herein shall be construed in
accordance  with  GAAP.  All terms  used in Article 9 of the UCC in the State of
Illinois,  and not  specifically  defined herein,  are used herein as defined in
such Article 9.<PAGE>

                       RECEIVABLES CONTRIBUTION AGREEMENT

                           dated as of March 31, 2000

                                     between

                         P&L COAL HOLDINGS CORPORATION,

                                 AS CONTRIBUTOR,

                                       and

                          P&L RECEIVABLES COMPANY, LLC,

                                  AS TRANSFEREE

<PAGE>
                                TABLE OF CONTENTS

                                                                            PAGE

ARTICLE I. THE CONTRIBUTIONS...................................................1

    Section 1.1       Contributions of Receivables.............................1
    Section 1.2       Transfer of Records......................................2
    Section 1.3       Characterization; Granting Clauses.......................3
    Section 1.4       Recourse for Dilution....................................3

ARTICLE II. REPRESENTATIONS AND WARRANTIES.....................................3

    Section 2.1       Representations of P&L...................................3

ARTICLE III. CONDITIONS OF CONTRIBUTIONS.......................................7

    Section 3.1       Condition Precedent to Initial Contribution..............7
    Section 3.2       Condition Precedent to All Contributions.................7

ARTICLE IV. COVENANTS..........................................................7

    Section 4.1       Compliance with Receivables Purchase Agreement...........7
    Section 4.2       Reporting................................................7

ARTICLE V. INDEMNIFICATION ....................................................7

    Section 5.1       Indemnities by P&L.......................................7

ARTICLE VI. MISCELLANEOUS  ...................................................11

    Section 6.1       Waivers and Amendments..................................11
    Section 6.2       Notices, Etc............................................11
    Section 6.3       Cumulative Remedies.....................................11
    Section 6.4       Binding Effect; Assignability...........................11
    Section 6.5       Acknowledgment and Agreement............................12
    Section 6.6       Governing Law...........................................12
    Section 6.7       Submission to Jurisdiction..............................12
    Section 6.8       Waiver of Jury Trial....................................13
    Section 6.9       Captions and Cross References;
                      Incorporation by Reference..............................13

    Section 6.10      Execution in Counterparts...............................13
    Section 6.11      No Proceedings..........................................13

ANNEX A DEFINITIONS...........................................................15
<PAGE>
                       RECEIVABLES CONTRIBUTION AGREEMENT

     THIS RECEIVABLES CONTRIBUTION AGREEMENT (as amended, supplemented, restated
or otherwise  modified from time to time, this  "Agreement"),  dated as of March
31, 2000, is entered into by and among:

          (1) P&L Coal Holdings Corporation,  a Delaware corporation ("P&L"), as
     contributor; and

          (2) P&L Receivables Company, LLC, a Delaware limited liability company
     ("SPV"), as transferee.

Unless otherwise indicated, capitalized terms used in this Agreement are defined
in ANNEX A hereto or in the Receivables  Purchase  Agreement or Receivables Sale
Agreement referenced in ANNEX A.

                              W I T N E S S E T H :

     WHEREAS,  P&L  owns,  directly  or  indirectly,   all  of  the  issued  and
outstanding equity membership interests in SPV; and

     WHEREAS,  P&L desires to contribute to SPV Receivables and Related Security
owned from time to time by P&L, and SPV is willing,  on the terms and subject to
the  conditions set forth herein,  to accept  contributions  of Receivables  and
Related Security from P&L.

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

                                   ARTICLE I.
                                THE CONTRIBUTIONS

     Section 1.1 Contributions of Receivables.

     (a)  Effective  on the  Effective  Date upon the terms and  subject  to the
conditions  set forth  herein,  P&L does hereby  contribute,  assign,  transfer,
set-over and otherwise  convey to SPV,  without  recourse  (except to the extent
expressly  provided  herein),  and SPV does hereby accept from P&L, all of P&L's
right,  title and  interest  in and to P&L's  Receivables  in  existence  on the
Initial  Cut-Off  Date and all Related  Security  with  respect  thereto.  P&L's
paid-in  capital shall be increased by the lower of book or market value of such
contributed Receivables, as adjusted from time to time.

     (b) Effective on each  Business Day after the  Effective  Date and prior to
the  Termination  Date,  upon the terms and subject to the  conditions set forth
herein, P&L does hereby  contribute,  assign,  transfer,  set-over and otherwise
convey  to SPV,  without  recourse  (except  to the  extent  expressly  provided
herein),  and SPV does hereby  accept from P&L,  all of P&L's  right,  title and
interest  in and to all newly  arising or acquired  Receivables  and all Related
Security with respect  thereto.  P&L's paid-in capital shall be increased by the
lower of book or market value of such contributed Receivables,  as adjusted from
time to time.

     (c) It is the  intention of the parties  hereto that each  contribution  of
Receivables  made hereunder shall  constitute a "sale of accounts" (as such term
is used in Article 9 of the UCC),  which is absolute and  irrevocable  and shall
provide  SPV with the full  benefits of  ownership  of the  Receivables  and the
associated Related Security.  Each contribution of Receivables hereunder is made
without recourse to P&L; provided,  however, that (i) P&L shall be liable to SPV
for all  representations,  warranties,  covenants  and  indemnities  made by P&L
pursuant to the terms of the Transaction  Documents to which P&L is a party, and
(ii) such  contribution  does not constitute and is not intended to result in an
assumption by SPV or any assignee  thereof of any obligation of P&L or any other
Person arising in connection with the Receivables,  the related Contracts and/or
other Related Security or any other obligations of P&L. In view of the intention
of the parties hereto that the contributions of Receivables made hereunder shall
constitute outright  contributions of such Receivables rather than loans secured
thereby,  P&L agrees that it will, on or prior to the Effective  Date,  mark its
master  data  processing  records  relating  to the  Receivables  with a  legend
evidencing the contribution of the Receivables and Related Security to SPV. Upon
the request of SPV (or the Agent, as assignee of SPV), P&L will execute and file
such financing or continuation statements,  or amendments thereto or assignments
thereof,  and  such  other  instruments  or  notices,  as  may be  necessary  or
appropriate to perfect and maintain the perfection of SPV's  ownership  interest
in the Receivables and the Related Security or as SPV (or the Agent, as assignee
of SPV) may reasonably request.

     Section 1.2 Transfer of Records.

     (a) In connection  with the  contributions  of Receivables  hereunder,  P&L
hereby contributes, transfers, assigns and otherwise conveys to SPV all of P&L's
right and title to and  interest  in the  Records  relating  to all  Receivables
contributed  hereunder,  without  the  need  for any  further  documentation  in
connection with any contribution.  In connection with such transfer,  P&L hereby
grants to each of SPV (and the Agent,  as assignee  of SPV) and the  Servicer an
irrevocable,  non-exclusive  license to use,  without  royalty or payment of any
kind,  all software  used by P&L to account for its  Receivables,  to the extent
necessary to administer such Receivables,  whether such software is owned by P&L
or is owned by others  and used by P&L under  license  agreements  with  respect
thereto,  provided  that should the consent of any licensor of P&L to such grant
of the license  described  herein be required,  P&L hereby  agrees that upon the
request of SPV (or the Agent, as assignee of SPV) or the Servicer,  P&L will use
its reasonable efforts to obtain the consent of such third-party  licensor.  The
license granted hereby shall be irrevocable,  and shall terminate on the date on
which all Aggregate Unpaids under the Receivables  Purchase  Agreement have been
paid in full.

     (b) P&L (i) shall take such  action  requested  by SPV and/or the Agent (as
assignee  of  SPV),  from  time to time  hereafter,  that  may be  necessary  or
reasonably  appropriate to ensure that SPV has an enforceable ownership interest
in the Records  relating to the  Receivables  contributed by P&L hereunder,  and
(ii) shall use its  reasonable  efforts to ensure that SPV and the Servicer each
has an enforceable  right (whether by license or sublicense or otherwise) to use
all of the  computer  software  used to account  for the  Receivables  and/or to
recreate such Records.

     Section  1.3.Characterization;  Granting Clauses.  If,  notwithstanding the
intention of the parties expressed in Section 1.1(c), any contribution to SPV of
Receivables hereunder shall be characterized as a secured loan and not a sale or
contribution,  then this  Agreement  shall be deemed to  constitute  a  security
agreement  under the UCC and other  applicable law. For this purpose and without
being  in  derogation  of the  parties'  intention  that  each  contribution  of
Receivables  hereunder shall constitute an absolute transfer thereof, P&L hereby
grants to SPV a duly perfected  security  interest in all of P&L's right,  title
and  interest  in,  to and  under  all of P&L's  Receivables  now  existing  and
hereafter  arising,  and in all Related  Security  with respect  thereto,  which
security  interest shall be prior to all other Adverse Claims thereto.  From and
after the Termination  Date, if P&L is in material  default of its covenants and
agreements herein, SPV and its assigns shall have as against P&L, in addition to
the rights and  remedies  which  they may have under this  Agreement,  all other
rights and remedies  provided to a secured  creditor after default under the UCC
and other applicable law, which rights and remedies shall be cumulative.

     Section  1.4  Recourse  for  Dilution.  If at any time (a) the  Outstanding
Balance of any  Receivable  contributed  hereunder  is either  (i)  reduced as a
result of any  defective or rejected  goods,  any discount or any  adjustment or
otherwise by P&L or any  Originator  (other than cash  Collections on account of
the Receivables) or a setoff in respect of any claim by any Person (whether such
claim  arises  out  of  the  same  or a  related  transaction  or  an  unrelated
transaction),  or (ii)  canceled as a result of a setoff in respect of any claim
by  any  Person  (whether  such  claim  arises  out  of the  same  or a  related
transaction or an unrelated  transaction),  or (b) any of the representations or
warranties  in Article II of this  Agreement  were not true with  respect to any
Receivable at the time of its  contribution  hereunder,  P&L shall pay to SPV in
cash upon demand the amount of such reduction (in the case of an event described
in the preceding clause (a)(i)),  or the Outstanding  Balance of such Receivable
(in the case of an event described in the preceding clause (a)(ii) or (b)).

                                  ARTICLE II.
                         REPRESENTATIONS AND WARRANTIES

     Section  2.1  Representations  of P&L. In order to induce SPV to enter into
this  Agreement  and to accept  contributions  hereunder,  P&L hereby  makes the
following  representations  and  warranties as of the date of each  contribution
hereunder:

     (a) Existence and Power. P&L is a corporation,  duly incorporated,  validly
existing and in good standing under the laws of Delaware.  P&L is duly qualified
to do  business  and is in good  standing as a foreign  corporation  and has and
holds  all  corporate  power  and  all  governmental  licenses,  authorizations,
consents and approvals required to carry on its business in each jurisdiction in
which its  business is  conducted  except  where the failure to so qualify or so
hold could not reasonably be expected to have a Material Adverse Effect.

     (b) Power and Authority;  Due  Authorization,  Execution and Delivery.  The
execution  and  delivery  by P&L of this  Agreement  and each other  Transaction
Document  to  which  it is a  party,  and  the  performance  of its  obligations
hereunder and thereunder, are within its corporate powers and authority and have
been duly  authorized  by all  necessary  corporate  action  on its  part.  This
Agreement and each other  Transaction  Document to which P&L is a party has been
duly executed and delivered by P&L.

     (c) No Conflict.  The execution  and delivery by P&L of this  Agreement and
each other  Transaction  Document to which it is a party, and the performance of
its  obligations  hereunder and  thereunder do not contravene or violate (i) its
certificate  of  incorporation  or  by-laws,  (ii) any law,  rule or  regulation
applicable  to it,  (iii) any  restrictions  under any  agreement,  contract  or
instrument  to which it is a party  or by  which  it or any of its  property  is
bound, or (iv) any order, writ, judgment, award, injunction or decree binding on
or affecting it or its property, and do not result in the creation or imposition
of any  Adverse  Claim on assets of P&L or its  Subsidiaries  (other than (A) as
created under the Transaction  Documents and (B) the pledge of the  Subordinated
Notes pursuant to the Credit Agreement and associated  documents) except, in any
case, where such  contravention or violation could not reasonably be expected to
have a Material Adverse Effect, and no transaction  contemplated hereby requires
compliance with any bulk sales act or similar law.

     (d)  Governmental  Authorization.  Other than the  filing of the  financing
statements required hereunder,  no authorization or approval or other action by,
and no notice to or filing with, any  governmental  authority or regulatory body
is required for the due execution and delivery by P&L of this Agreement and each
other  Transaction  Document to which it is a party and the  performance  of its
obligations hereunder and thereunder.

     (e) Actions,  Suits.  Except as disclosed in P&L's reports on SEC Form 10-K
or 10-Q, there are no actions,  suits or proceedings  pending, or to the best of
P&L's knowledge, threatened, against or affecting P&L, or any of its properties,
in or before any court,  arbitrator  or other  body,  that could  reasonably  be
expected to have a Material  Adverse Effect.  P&L is not in default with respect
to any order of any  court,  arbitrator  or  governmental  body  which  could be
reasonably expected to have a Material Adverse Effect.

     (f) Binding Effect.  This Agreement and each other Transaction  Document to
which P&L is a party constitute the legal, valid and binding  obligations of P&L
enforceable  against P&L in accordance with their  respective  terms,  except as
such   enforcement  may  be  limited  by  applicable   bankruptcy,   insolvency,
reorganization  or other similar laws relating to or limiting  creditors' rights
generally and by general principles of equity (regardless of whether enforcement
is sought in a proceeding in equity or at law).

     (g) Accuracy of Information. All information heretofore furnished by P&L or
any  of its  Affiliates  to SPV  for  purposes  of or in  connection  with  this
Agreement or any transaction  contemplated  hereby is, and all such  information
hereafter  furnished by P&L or any of its Affiliates  will be, true and accurate
in every  material  respect on the date such  information is stated or certified
and does not and will not contain any material  misstatement  of fact or omit to
state a material  fact or any fact  necessary to make the  statements  contained
therein not misleading.

     (h)  Consideration.  With  respect to each  Receivable  contributed  to SPV
hereunder:  (i) P&L has  given  reasonably  equivalent  value to the  applicable
Originator in consideration therefor pursuant to the Receivables Sale Agreement,
(ii) such contribution was not made for or on account of an antecedent debt, and
(iii)  such  contribution  is not  voidable  under any  section  of the  Federal
Bankruptcy Code.

     (i) Good Title. Immediately prior to each contribution hereunder, P&L shall
be the legal and beneficial  owner of the Receivables and Related  Security with
respect thereto,  free and clear of any Adverse Claim,  except as created by the
Transaction Documents.

     (j) Perfection.  This Agreement,  together with the filing of the financing
statements   contemplated   hereby,  is  effective  to,  and  shall,  upon  each
contribution hereunder, transfer to SPV (and SPV shall acquire from P&L) a valid
and perfected first priority ownership  interest in each Receivable  existing or
hereafter  arising and in the Related  Security  and  Collections  with  respect
thereto,  free  and  clear  of any  Adverse  Claim,  except  as  created  by the
Transactions  Documents.  There have been delivered to the Agent (as assignee of
SPV) in form  suitable  for filing all  financing  statements  or other  similar
instruments or documents  necessary under the UCC (or any comparable law) of all
appropriate   jurisdictions   to  perfect  SPV's  ownership   interest  in  each
Receivable, its Collections and the Related Security.

     (k) Places of Business and Locations of Records.  The  principal  places of
business and chief executive office of P&L and the offices where it keeps all of
its  Records  are  located  at the  address(es)  listed  on  Exhibit  III to the
Receivables  Purchase  Agreement or such other  locations of which the Agent has
been  notified in accordance  with Section  7.2(a) of the  Receivables  Purchase
Agreement in  jurisdictions  where all action required by Section 14.4(a) of the
Receivables  Purchase  Agreement  has been taken and  completed.  P&L's  Federal
Employer Identification Number is 13-4004153.

     (l)  Collections.  The  conditions  and  requirements  set forth in Section
7.1(j) and, so long as P&L or any of its Affiliates is the Servicer, Section 8.2
of the Receivables Purchase Agreement have at all times since the Effective Date
been satisfied and duly performed.

     (m) Material Adverse Effect. Since December 31, 1999, no event has occurred
that  would  have  a  material  adverse  effect  on the  consolidated  financial
condition or operations  of P&L and its  Subsidiaries  taken as a whole,  or the
ability  of  P&L  to  perform  its  obligations  under  this  Agreement,  or the
collectibility  of the  Receivables  generally  or any  material  portion of the
Receivables.

     (n)  Names.  In the past  five (5)  years,  P&L has not used any  corporate
names, trade names or assumed names other than the name in which it has executed
this Agreement and "Peabody Group."

     (o) Ownership of SPV. P&L owns, directly or indirectly,  100% of the issued
and  outstanding  equity  membership  interests  of SPV,  free and  clear of any
Adverse Claim.

     (p) Not a Holding Company or an Investment  Company.  P&L is not a "holding
company" or a "subsidiary  holding  company" of a "holding  company"  within the
meaning of the Public Utility  Holding  Company Act of 1935, as amended,  or any
successor statute.  P&L is not an "investment company" within the meaning of the
Investment Company Act of 1940, as amended, or any successor statute.

     (q)  Compliance  with  Law.  P&L has  complied  in all  respects  with  all
applicable laws, rules,  regulations,  orders,  writs,  judgments,  injunctions,
decrees or awards to which it may be  subject,  except  where the  failure to so
comply could not reasonably be expected to have a Material Adverse Effect.  Each
Receivable,  together with the Contract and Invoice  related  thereto,  does not
contravene any laws, rules or regulations applicable thereto (including, without
limitation,  laws,  rules and  regulations  relating to truth in  lending,  fair
credit  billing,  fair credit  reporting,  equal credit  opportunity,  fair debt
collection practices and privacy), and no part of such Contract or Invoice is in
violation of any such law, rule or regulation,  except where such  contravention
or violation could not reasonably be expected to have a Material Adverse Effect.

     (r)  Compliance  with  Credit  and  Collection  Policy.  From and after the
Effective  Date,  P&L has complied in all material  respects with the Credit and
Collection  Policy with regard to each Receivable and the related  Invoice,  and
has not made any material  change to the Credit and  Collection  Policy,  except
such  material  change  as to which  SPV and the Agent  have  been  notified  in
accordance with Section 7.1(a)(vii) of the Receivables Purchase Agreement.

     (s)  Accounting.  The  manner in which P&L  accounts  for the  transactions
contemplated  by this  Agreement  does  not  jeopardize  the  true  contribution
analysis.

     (t)  Enforceability  of  Invoices.   Each  Invoice  with  respect  to  each
Receivable is effective to create,  and has created,  a legal, valid and binding
obligation  of  the  related  Obligor  to pay  the  Outstanding  Balance  of the
Receivable  created  thereunder  (subject to adjustment,  to the extent provided
therein) and any accrued interest  thereon,  enforceable  against the Obligor in
accordance  with  its  terms,  except  as such  enforcement  may be  limited  by
applicable bankruptcy, insolvency, reorganization or other similar laws relating
to or limiting  creditors' rights generally and by general  principles of equity
(regardless  of whether  enforcement  is sought in a proceeding  in equity or at
law).

     (u) Eligible  Receivables.  Each Receivable listed on any Monthly Report as
being an  Eligible  Receivable  was an  Eligible  Receivable  on the date of its
contribution  hereunder,  and  its  Outstanding  Balance  as of the  date of its
contribution  hereunder  and  thereafter  adjusted is  correctly  stated on such
Monthly Report.

                                  ARTICLE III.
                           CONDITIONS OF CONTRIBUTIONS

     Section  3.1  Condition  Precedent  to Initial  Contribution.  The  initial
contribution under this Agreement is subject to the condition precedent that the
Effective Date under the Receivables Purchase Agreement shall have occurred.

     Section 3.2 Condition Precedent to All Contributions.  Each contribution of
Receivables  and Related  Security  shall be subject to the condition  precedent
that the Termination Date shall not have occurred.

                                   ARTICLE IV.
                                    COVENANTS

     Section  4.1  Compliance  with  Receivables  Purchase  Agreement.  From the
Effective  Date until the later to occur of the  Termination  Date or payment in
full of all Aggregate Unpaids under the Receivables  Purchase Agreement,  unless
SPV and the Agent shall otherwise consent in writing,  P&L will comply with each
of  the  covenants  and  other  agreements   required  to  be  observed  by  it,
individually  or as  Servicer  (so long as it remains the  Servicer),  under the
Receivables Purchase Agreement.

     Section  4.2  Reporting.  Not later  than the third  Tuesday  of each month
hereafter commencing April 18, 2000, P&L will provide SPV and, upon request, the
Agent (as assignee of SPV) with a written listing (each such listing, a "Monthly
Report") of all  Receivables  contributed  by it during the  preceding  calendar
month indicating (a) which  Receivables were Eligible  Receivables on their date
of contribution,  and (b) the Obligor(s) of and the Outstanding  Balance of each
Receivable on its date of contribution.

                                   ARTICLE V.
                                 INDEMNIFICATION

     Section 5.1 Indemnities by P&L.  Without limiting any other rights that SPV
or its assigns may have hereunder or under  applicable law, P&L hereby agrees to
indemnify  (and pay upon  demand to) SPV and its  assigns,  officers,  managers,
directors,  agents and employees (each, an "Indemnified Party") from and against
any and all damages, losses, claims, taxes, liabilities, costs, expenses and for
all other amounts payable, including reasonable attorneys' fees (which attorneys
may be  employees  of any  Indemnified  Party)  and  disbursements  (all  of the
foregoing  being  collectively  referred to as  "Indemnified  Amounts")  awarded
against or incurred by any of them relating to, arising out of or as a result of
this Agreement or the acquisition,  either directly or indirectly, by SPV of any
Receivable, excluding, however, in all of the foregoing instances:

     (a)  Indemnified  Amounts  to the  extent  a final  judgment  of a court of
competent  jurisdiction holds that such Indemnified  Amounts resulted from gross
negligence or willful  misconduct on the part of the  Indemnified  Party seeking
indemnification;

     (b)  Indemnified  Amounts to the extent the same includes losses in respect
of Receivables that are  uncollectible on account of the insolvency,  bankruptcy
or lack of creditworthiness of the related Obligor; or

     (c) taxes imposed by the  jurisdiction  in which such  Indemnified  Party's
principal  executive office is located, on or measured by the overall net income
of such  Indemnified  Party to the extent that the  computation of such taxes is
consistent with the  characterization for income tax purposes of the acquisition
by SPV of Receivables as a true  contribution  by P&L to SPV of the  Receivables
and the Related Security;

provided,  however,  that  nothing  contained in this  sentence  shall limit the
liability  of P&L or limit  the  recourse  of SPV and its  assigns  for  amounts
otherwise  specifically  provided  to be paid by P&L  under  the  terms  of this
Agreement. Without limiting the generality of the foregoing indemnification, but
subject to the exclusions in clauses (a), (b) and (c) above, P&L shall indemnify
SPV and its assigns for  Indemnified  Amounts  (including,  without  limitation,
losses  in  respect  of   uncollectible   receivables,   regardless  of  whether
reimbursement  therefor  would  constitute  recourse  to  P&L)  relating  to  or
resulting from:

          (i)  any  representation  or  warranty  made  by  P&L  (or  any of its
     officers) under or in connection with this Agreement, any other Transaction
     Document  to  which  P&L is a party  or any  other  information  or  report
     delivered by any such Person pursuant  hereto or thereto,  which shall have
     been false or incorrect when made or deemed made;

          (ii)  the  failure  by  P&L or  any  Originator  to  comply  with  any
     applicable  law, rule or regulation  with respect to any  Receivable or any
     Contract  or Invoice  related  thereto,  or the  nonconformity  of any such
     Receivable,  Contract  or Invoice  with any such  applicable  law,  rule or
     regulation  or any failure of P&L or any  Originator to keep or perform any
     of its  obligations,  express or implied,  with  respect to any Contract or
     Invoice;

          (iii) any  failure of P&L to perform its  duties,  covenants  or other
     obligations  in accordance  with the  provisions  of this  Agreement or any
     other Transaction Document to which it is a party;

          (iv) any products liability,  personal injury or damage suit, or other
     similar  claim  arising  out of or in  connection  with  goods that are the
     subject of any Contract or Invoice or any Receivable;

          (v) any dispute,  claim,  offset or defense  (other than  discharge in
     bankruptcy of the Obligor) of the Obligor to the payment of any  Receivable
     (including,  without limitation,  a defense based on such Receivable or the
     related Contract or Invoice not being a legal, valid and binding obligation
     of such Obligor  enforceable  against it in accordance with its terms),  or
     any  other  claim  resulting  from the sale of the  goods  related  to such
     Receivable or the furnishing or failure to furnish such goods;

          (vi) the  commingling  of  Collections of Receivables at any time with
     other funds;

          (vii)  any  investigation,  litigation  or  proceeding  related  to or
     arising from any Transaction  Document or other agreement to which P&L is a
     party, the  transactions  contemplated  hereby,  the use of the proceeds of
     distributions  by SPV to P&L, the ownership of the  Receivables  or Related
     Security or any other  investigation,  litigation or proceeding relating to
     P&L or any Originator in which any Indemnified  Party becomes involved as a
     result of any of the transactions contemplated hereby;

          (viii) any  inability  to  litigate  any claim  against any Obligor in
     respect of any  Receivable  as a result of such  Obligor  being immune from
     civil  and  commercial  law  and  suit on the  grounds  of  sovereignty  or
     otherwise from any legal action, suit or proceeding;

          (ix) (A) failure of P&L or any  Originator  generally to pay its debts
     as such debts become due or admission by P&L or any  Originator  in writing
     of its  inability  to pay its debts  generally  or any making by P&L or any
     Originator of a general assignment for the benefit of creditors; or (B) the
     institution of any  proceeding by or against P&L or any Originator  seeking
     to adjudicate it bankrupt or insolvent, or seeking liquidation, winding up,
     reorganization,  arrangement, adjustment, protection, relief or composition
     of it or its debts under any law  relating  to  bankruptcy,  insolvency  or
     reorganization  or relief of debtors,  or seeking the entry of an order for
     relief or the appointment of a receiver,  trustee or other similar official
     for it or any substantial part of its property, or (C) the taking by P&L or
     any Originator of any corporate  action to authorize any of the actions set
     forth in clauses (A) or (B) above in this clause (ix);

          (x) any failure of P&L to acquire  and  maintain  legal and  equitable
     title to, and  ownership  of any  Receivable  and the Related  Security and
     Collections  with  respect  thereto  from any  Originator  (subject  to the
     Transaction Documents),  free and clear of any Adverse Claim (other than as
     created  under the  Transaction  Documents)  or any  failure of P&L to give
     reasonably   equivalent  value  to  any  applicable  Originator  under  the
     Receivables  Sale  Agreement  in  consideration  of the  transfer  by  such
     Originator  of any  Receivable,  or any  attempt by any Person to void such
     transfer under statutory provisions or common law or equitable action;

          (xi) any failure to vest and  maintain  vested in SPV  (subject to the
     Receivables Purchase Agreement), or to transfer to SPV, legal and equitable
     title to, and ownership of, a first priority  perfected  ownership interest
     in the  Receivables,  the Related  Security and the  Collections,  free and
     clear  of  any  Adverse  Claim  (except  as  created  by  the   Transaction
     Documents);

          (xii) the  failure to have  filed,  or any delay in filing,  financing
     statements or other similar  instruments or documents  under the UCC of any
     applicable  jurisdiction  or other  applicable  laws  with  respect  to any
     Receivable,  the Related Security and Collections with respect thereto, and
     the  proceeds  of any  thereof,  whether  at the  time of any  contribution
     hereunder or at any subsequent time; and

          (xiii) the failure of any  Receivable  included in a Monthly Report as
     an  Eligible  Receivable  to be an Eligible  Receivable  at the time it was
     contributed to SPV hereunder.

     Section 5.2 Costs,  Expenses and Taxes.  In addition to the  obligations of
P&L under Section 5.1, P&L agrees to pay on demand:

     (a) all  reasonable  costs and  expenses,  including  attorneys'  fees,  in
connection  with the  enforcement  against P&L of this  Agreement  and the other
Transaction Documents executed by P&L; and

     (b) all stamp duties and other similar  filing or recording  taxes and fees
payable or determined to be payable in connection with the execution,  delivery,
filing  and  recording  of this  Agreement  or the other  Transaction  Documents
executed  by P&L,  and  agrees to  indemnify  Indemnified  Parties  against  any
liabilities with respect to or resulting from any delay in paying or omission to
pay such taxes and fees.

                                   ARTICLE VI.
                                  MISCELLANEOUS

     Section 6.1 Waivers and  Amendments.  The  provisions of this Agreement may
from time to time be amended,  restated,  otherwise  modified or waived, if such
amendment, modification or waiver is in writing and consented to by P&L, SPV and
the Agent (as  assignee  of SPV).  No failure  or delay on the part of SPV,  its
assigns  or any  third  party  beneficiary  in  exercising  any  power  or right
hereunder  shall  operate as a waiver  thereof,  nor shall any single or partial
exercise  of any such  power or right  preclude  any other or  further  exercise
thereof or the  exercise of any other power or right.  No notice to or demand on
any party hereto in any case shall entitle it to any notice or demand in similar
or other  circumstances.  No waiver or approval by SPV or its assigns under this
Agreement  shall,  except as may otherwise be stated in such waiver or approval,
be  applicable  to  subsequent  transactions.  No waiver or approval  under this
Agreement shall require any similar or dissimilar waiver or approval  thereafter
to be granted hereunder.

     Section 6.2 Notices, Etc. All notices and other communications provided for
hereunder  shall,  unless  otherwise  stated  herein,  be in writing  (including
facsimile  communication)  and shall be personally  delivered or sent by express
mail or courier or by certified mail,  postage-prepaid,  or by facsimile, to the
intended party at its address set forth in the Receivables  Purchase  Agreement,
or at such other  address or  facsimile  number as shall be  designated  by such
party in a written  notice to the other  parties  hereto.  All such  notices and
communications  shall  be  effective,  (i) if  personally  delivered  or sent by
express mail or courier or if sent by certified mail, when received, and (ii) if
transmitted  by  facsimile,   when  sent,  receipt  confirmed  by  telephone  or
electronic means.

     Section  6.3  Cumulative   Remedies.   The  remedies  herein  provided  are
cumulative and not exclusive of any remedies provided by law.

     Section 6.4 Binding Effect; Assignability.  This Agreement shall be binding
upon and inure to the benefit of P&L, SPV and their  respective  successors  and
permitted  assigns;  provided,  however,  that  P&L may not  assign  its  rights
hereunder or any interest  herein  without the prior written  consent of SPV and
the Agent (as assignee of SPV).  This Agreement  shall create and constitute the
continuing  obligations of the parties hereto in accordance with its terms,  and
shall  remain  in full  force and  effect  as to P&L  until  the date  after the
Termination Date on which all Aggregate  Unpaids under the Receivables  Purchase
Agreement  have been paid in full.  The rights and remedies  with respect to any
breach of any representation and warranty made by P&L pursuant to Article II and
the  indemnification and payment provisions of Article V shall be continuing and
shall survive any termination of this Agreement.

     Section 6.5 Acknowledgment and Agreement. P&L hereby expressly acknowledges
and agrees that all of SPV's rights, title, and interests in, to, and under this
Agreement  shall  be  assigned  by SPV to the  Agent,  for  the  benefit  of the
Purchasers,  pursuant to the Receivables Purchase Agreement, and P&L consents to
such  assignment.  Each of the parties hereto  acknowledges  and agrees that the
Agent and the  Purchasers  are third  party  beneficiaries  of the rights of SPV
arising  hereunder and under the other  Transaction  Documents to which P&L is a
party. P&L further acknowledges and agrees that all right, title and interest in
and to the Lock-Boxes and Collection Accounts has been transferred to and vested
in SPV and its assigns,  and SPV may at any time in its sole discretion (subject
to the terms of the Receivables  Purchase  Agreement and the Collection  Account
Agreements executed in connection  therewith) direct and re-direct payments from
such Lock-Boxes and Collection Accounts.

     Section 6.6 Governing Law. Each Transaction  Document shall be governed by,
and  construed in  accordance  with,  the law of the State of illinois,  without
regard to the  principles of conflicts of laws thereof EXCEPT TO THE EXTENT THAT
THE  PERFECTION OF THE  OWNERSHIP  INTERESTS OF SPV IS GOVERNED BY THE LAWS OF A
JURISDICTION OTHER THAN THE STATE OF ILLINOIS.

     Section  6.7   Submission  to   Jurisdiction.   EACH  PARTY  HERETO  HEREBY
IRREVOCABLY (a) SUBMITS TO THE NON-EXCLUSIVE  JURISDICTION OF ANY ILLINOIS STATE
OR UNITED STATES FEDERAL COURT SITTING IN CHICAGO,  ILLINOIS, OVER ANY ACTION OR
PROCEEDING  ARISING OUT OF OR RELATING TO ANY TRANSACTION  DOCUMENT;  (b) AGREES
THAT ALL  CLAIMS  IN  RESPECT  OF SUCH  ACTION  OR  PROCEEDING  MAY BE HEARD AND
DETERMINED IN SUCH COURT;  (c) WAIVES,  TO THE FULLEST EXTENT IT MAY EFFECTIVELY
DO SO  UNDER  APPLICABLE  LAW,  THE  DEFENSE  OF AN  INCONVENIENT  FORUM  TO THE
MAINTENANCE OF SUCH ACTION OR PROCEEDING; (d) CONSENTS TO THE SERVICE OF ANY AND
ALL  PROCESS IN ANY SUCH ACTION OR  PROCEEDING  BY THE MAILING OF COPIES OF SUCH
PROCESS TO SUCH PERSON AT ITS ADDRESS  SPECIFIED  IN SECTION 6.2; AND (e) TO THE
EXTENT  ALLOWED  BY LAW,  AGREES  THAT A FINAL  JUDGMENT  IN ANY SUCH  ACTION OR
PROCEEDING  SHALL BE CONCLUSIVE  AND MAY BE ENFORCED IN OTHER  JURISDICTIONS  BY
SUIT ON THE  JUDGMENT OR IN ANY OTHER  MANNER  PROVIDED BY LAW.  NOTHING IN THIS
SECTION  6.7 SHALL  AFFECT  BUYER'S  RIGHT TO SERVE  LEGAL  PROCESS IN ANY OTHER
MANNER PERMITTED BY LAW OR TO BRING ANY ACTION OR PROCEEDING  AGAINST P&L OR ITS
PROPERTY IN THE COURTS OF ANY OTHER JURISDICTION.

     Section 6.8 Waiver of Jury Trial.  EACH PARTY HERETO  EXPRESSLY  WAIVES ANY
RIGHT TO A TRIAL BY JURY IN ANY  ACTION OR  PROCEEDING  TO ENFORCE OR DEFEND ANY
RIGHTS  UNDER  THIS  AGREEMENT,  ANY OTHER  TRANSACTION  DOCUMENT,  OR UNDER ANY
AMENDMENT,  INSTRUMENT,  JOINDER AGREEMENT OR DOCUMENT DELIVERED OR WHICH MAY IN
THE FUTURE BE DELIVERED BY IT OR ON ITS BEHALF IN CONNECTION HEREWITH OR ARISING
FROM ANY  RELATIONSHIP  EXISTING IN CONNECTION  WITH THIS AGREEMENT OR ANY OTHER
TRANSACTION  DOCUMENT,  AND AGREES THAT ANY SUCH ACTION OR  PROCEEDING  SHALL BE
TRIED BEFORE A COURT AND NOT BEFORE A JURY.

     Section 6.9 Captions and Cross References;  Incorporation by Reference. The
various captions (including,  without limitation, the table of contents) in this
Agreement are included for convenience  only and shall not affect the meaning or
interpretation of any provision of this Agreement.  References in this Agreement
to any  underscored  Section or Exhibit  are to such  Section or Exhibit of this
Agreement,  as the case may be. The Exhibits  hereto are hereby  incorporated by
reference into and made a part of this Agreement.

     Section 6.10 Execution in  Counterparts.  This Agreement may be executed in
any  number  of  counterparts  and  by  different  parties  hereto  in  separate
counterparts,  each of which so executed  shall be deemed to be an original  and
all of which taken together shall constitute one and the same agreement.

     Section 6.11 No Proceedings. P&L hereby covenants and agrees that, prior to
the  date  that is one  year  and  one  day  after  the  payment  in full of all
outstanding  Aggregate Unpaids, it will not institute against, or join any other
Person in instituting against, SPV any bankruptcy, reorganization,  arrangement,
insolvency or liquidation proceedings or other similar proceeding under the laws
of the United States or any state of the United States.

                            <signature pages follow>

<PAGE>

     IN WITNESS  WHEREOF,  the parties  have caused  this  Agreement  to be duly
executed and delivered as of the date first above written.

                          P&L COAL HOLDINGS CORPORATIONS

                          By: /s/ Steven F. Schaab
                              ---------------------------------------
                              Name: Steven F. Schaab
                              Title: Vice President and Treasurer

                          P&L RECEIVABLES COMPANY, LLC

                          By: /s/ Joseph C. Meek
                              ---------------------------------------
                              Name: Joseph C. Meek
                              Title: Assistant Treasurer
<PAGE>

                                     ANNEX A
                                   DEFINITIONS

     A. of Receivables Purchase Agreement Definitions.  Unless otherwise defined
herein,  terms that are  capitalized and used throughout this Agreement are used
as defined in the Receivables Purchase Agreement (hereinafter defined).

     B. Certain Defined Terms. The following terms have the respective  meanings
indicated hereinbelow:

     "Agreement"  means this Receivables  Contribution  Agreement,  as it may be
amended or modified and in effect from time to time in accordance with the terms
hereof.

     "Material  Adverse  Effect"  means a  material  adverse  effect  on (i) the
consolidated  financial  condition or  operations  of P&L and its  Subsidiaries,
taken as a whole,  (ii) the ability of P&L to perform its obligations under this
Agreement,  (iii) the legality,  validity or enforceability of this Agreement or
any other  Transaction  Document to which P&L is a party,  (iv) SPV's  ownership
interest  in the  Receivables  generally  or in any  significant  portion of the
Receivables,  the Related Security or the Collections  with respect thereto,  or
(v) the  collectibility of the Receivables  generally or of any material portion
of the Receivables.

     "Monthly  Report"  has  the  meaning  specified  in  Section  4.2  of  this
Agreement.

     "P&L" has the meaning specified in the preamble of this Agreement.

     "Receivables  Purchase Agreement" means that certain  Receivables  Purchase
Agreement  dated as of March 31,  2000,  by and among SPV,  as Seller,  P&L,  as
initial  Servicer,   International  Securitization  Corporation,  the  Financial
Institutions  from time to time party  thereto,  and Bank One, NA, as Agent,  as
amended, restated or otherwise modified from time to time in accordance with the
terms thereof.

     "Receivables Sale Agreement" means that certain  Receivables Sale Agreement
dated as of March 31,  2000,  by and among the  Originators  (as  defined in the
Receivables Purchase Agreement),  as sellers, and P&L, as purchaser, as amended,
restated or otherwise  modified from time to time in  accordance  with the terms
thereof.

     "Related Security" means, with respect to any Receivable:

     (i). all  of P&L's  interest  in the  inventory  and  goods  (including
returned or  repossessed  inventory or goods),  if any,  the sale,  financing or
lease of which by an Originator gave rise to such Receivable,  and all insurance
contracts with respect thereto,

     (ii). all other security interests or liens and property subject thereto
from time to time,  if any,  purporting  to secure  payment of such  Receivable,
whether  pursuant  to the  Contract  or Invoice  related to such  Receivable  or
otherwise,  together  with all  financing  statements  and  security  agreements
describing any collateral securing such Receivable,

     (iii). all guaranties,  letters of credit, insurance and other agreements
or arrangements  of whatever  character from time to time supporting or securing
payment of such Receivable  whether  pursuant to the Contract or Invoice related
to such Receivable or otherwise,

     (iv). all Records related to such Receivable,

     (v). all  of P&L's  right,  title  and  interest  in,  to and under the
Receivables Sale Agreement in respect of such Receivable, and

     (vi). all proceeds of any of the foregoing;

provided,  however, that in no event shall "Related Security" include any right,
duty or  obligation  under any  Contract  other  than that the right to  receive
payments  thereunder (and any collateral  for,  guaranty of or letter of credit,
surety bond or other credit support for any such payment right).

     "SPV" has the meaning specified in the preamble of this Agreement.

     "Termination Date" means the earliest of (i) the Facility  Termination Date
under the  Receivables  Purchase  Agreement,  (ii) the date on which a Change of
Control  to which the Agent has not given  its  express  prior  written  consent
occurs,  or (iii) the date specified by P&L in a written notice delivered to and
received by both SPV and the Agent.

     All accounting terms not specifically  defined herein shall be construed in
accordance  with  GAAP.  All terms  used in Article 9 of the UCC in the State of
Illinois,  and not  specifically  defined herein,  are used herein as defined in
such Article 9.

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