Document:

mar2404_ex4-1

	          Registered	 
	 	 
	No. 1	 
	$19,038,000		 
	CUSIP No: 46625HBG4	 

J.P. MORGAN CHASE & CO. 

JPMorgan Market Participation Notes Linked to the S&P 500® Index due March 31, 2009 (“Notes”) 

This security is not a deposit or other obligation of a bank and is not insured by the Federal Deposit Insurance Corporation or by any other governmental entity. 

This security is a Registered Global Security within the meaning of the Indenture hereinafter referred to and is registered in the name of Cede & Co., the nominee of The Depository Trust Company (the
“Depositary”). This Registered Global Security is exchangeable for Notes registered in the name of a Person other than the Depositary or its nominee only in the
limited circumstances described in the Indenture, and no transfer of this security (other than a transfer of this security as a whole by the Depositary to a nominee of the Depositary or by a nominee of the Depositary to the Depositary or another
nominee of the Depositary) may be registered except in such limited circumstances. The Depositary will not sell, assign, transfer or otherwise convey any beneficial interest in this Registered Global Security unless such beneficial interest is in an
amount equal to an authorized denomination for the Notes, and the Depositary, by its acceptance hereof, agrees to be so bound. 

Unless this security is presented by an authorized representative of the Depositary to J.P. Morgan Chase & Co. or its agent for registration of transfer, exchange or payment, and any Notes issued are registered in the
name of Cede & Co. or such other name as is requested by an authorized representative of the Depositary (and any payment is made to Cede & Co. or to such other entity as is an authorized representative of the Depositary), any transfer,
pledge or other use hereof for value or otherwise by or to any Person is wrongful since the registered owner hereof, Cede & Co., has an interest herein. 

J.P. Morgan Chase & Co., a corporation duly organized and existing under the laws of the State of Delaware (herein called the “Company,”
which term includes any successor corporation under the Indenture hereinafter referred to), for value received, hereby promises to pay to CEDE & CO., or registered assigns, the amount due upon maturity, as determined in accordance with the
formula set forth under “Payment at Maturity” below, with respect to the principal sum of

NINETEEN MILLION THIRTY-EIGHT THOUSAND DOLLARS ($19,038,000), 

on March 31, 2009, on the terms and in the manner described on the reverse hereof. 

Payment at maturity will be made at the office or agency of the Company maintained for that purpose in the Borough of Manhattan, The City of New York, in such coin or currency of the United States of America as at the time
of payment is legal tender for the payment of public and private debts; provided, however, that at the option of the Company, payment at maturity may be made by check mailed to
the address of the Person entitled thereto as such address shall appear in the security register of the Company. 

Reference is hereby made to the further provisions of this security set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place. Capitalized terms not
otherwise defined herein shall have their respective meanings in the Indenture. 

Unless the certificate of authentication hereon has been executed by the Trustee referred to on the reverse hereof, or an Authenticating Agent, by manual signature, this security shall not be entitled to any benefit under
the Indenture or be valid or obligatory for any purpose. 

Payment at Maturity 

This security pays no interest. This security will mature on March 31, 2009 (the “Maturity Date”). 

On the Maturity Date the Company shall pay a cash payment based on the performance of the S&P 5007 Index (the “Index”) per $1,000 principal amount of securities equal to the principal amount of $1,000 per note plus an Additional Amount (as defined below). 

The “Additional Amount” will be calculated by the calculation agent by multiplying $1,000 by the percentage increase of the Index over the
life of the note multiplied by the Participation Rate (as defined below). 

The “Participation Rate” is 110%. 

 The “Initial
  Index Level” is equal to 1095.40,
  the closing level of the Index on the day we priced the Notes.  

The “Final Average Index Level” is the arithmetic average of the Index Closing Level on each Monthly Determination Date (each as defined
below). 

The “Monthly Determination Dates” are the 26th of each calendar month from and including April 26, 2004 to and including March 26, 2009, in
each such case subject to adjustment if such date is not a Trading Day or if a Market Disruption Event occurs on such date as described in the two following paragraphs. 

 If any scheduled Monthly Determination Date including
  March 26, 2009 is not a Trading Day or if a Market Disruption Event occurs on
  any such date, such Monthly Determination Date will be the immediately succeeding
  Trading Day during which no Market Disruption Event shall have occurred; provided
  that the Index Closing Level will not be determined on a date later than the
  second scheduled Trading Day prior to maturity, and if such day is not a Trading
  Day, or if there is a Market Disruption Event on such date, the calculation
  agent will determine the level of the Index on such date in accordance with
  the formula for and method of calculating the Index last in effect prior to
  the commencement of the Market Disruption Event (or prior to the non-Trading
  Day), using the closing price (or, if trading in the relevant securities has
  been materially suspended or materially limited, its good faith estimate of
  the closing price that would have prevailed but for such suspension or limitation
  or non-Trading Day) on such date of each security most recently constituting
  the Index.  

The “Index Closing Level” on any Trading Day will equal the closing level of the Index or any Successor Index (as defined below) at the
regular official weekday close of the principal trading session of the New York Stock Exchange, Inc. (the “NYSE”), the American Stock Exchange LLC (the
“AMEX”), the Nasdaq National Market or the Relevant Exchange or market for the Successor Index. 

A “Trading Day” is a day, as determined by the calculation agent, on which trading is generally conducted on the NYSE, the AMEX, the Nasdaq
National Market, the Chicago Mercantile Exchange and the Chicago Board Options Exchange and in the over-the-counter market for equity securities in the United States. 

The Company will irrevocably deposit with DTC no later than the close of business on the Maturity Date funds sufficient to make payments of the amount payable at maturity with respect to the Notes on such date. The Company
will give DTC irrevocable instructions and authority to pay such amount to the Holders of the Notes entitled thereto. In the event that the Maturity Date is not a Business Day, then payments payable on such date will be made on the next succeeding
Business Day with the same force and effect as if made on such date, except that, if such Business Day falls in the next calendar year such payment will be made on the immediately preceding Business Day. A “Business Day” is any day other than a day on which banking institutions in The City of New York are authorized or required by law or regulation to close or a day on which transactions in dollars
are not conducted. 

Calculation Agent 

J.P. Morgan Securities Inc. will act as the calculation agent. The calculation agent will determine the Index Closing Level on each Monthly Determination Date, the Final Average Index Level and the Additional Amount of
cash, if any, the Company will pay Holders at maturity of the Notes. In addition, the calculation agent will determine whether there has been a Market Disruption Event or a discontinuance of the Index and whether there has been a 

material change in the method of calculating the Index. All determinations made by the calculation agent will be at the sole discretion of the calculation agent and will, in the absence of manifest error, be conclusive for
all purposes and binding on Holders and on the Company. The Company may appoint a different calculation agent from time to time after the date of this prospectus supplement without the Holders’ consent and without notifying Holders. 

The calculation agent will calculate the Additional Amount on the final Monthly Determination Date. The calculation agent will provide written notice to the Trustee at its New York office, on which notice the Trustee may
conclusively rely, of the Additional Amount on or prior to 11:00 a.m. on the Business Day preceding the Maturity Date. 

All calculations with respect to the Final Average Index Level or the Index Closing Level will be rounded to the nearest one hundred-thousandth, with five one-millionths rounded upward (e.g., .876545 would be rounded to
..87655); all dollar amounts related to determination of the Additional Amount payable per Note will be rounded to the nearest ten-thousandth, with five one hundred-thousandths rounded upward (e.g., .76545 would be rounded up .7655); and all dollar
amounts paid on the aggregate number of notes will be rounded to the nearest cent, with one-half cent rounded upward. 

Market Disruption Events 

With respect to the Index, a “Market Disruption Event” means: 

	(i)(a)	 	a suspension, absence or material limitation
      of trading of stocks then constituting 20 percent or more of the level of
      the Index (or the relevant Successor Index) on the Relevant Exchanges (as
      defined below) for such securities for more than two hours of trading or
      during the one hour period preceding the close of the principal trading
      session on such Relevant Exchange; or 
	 	 	 
	(b) 	 	a breakdown or failure in the price and trade
      reporting systems of any Relevant Exchange as a result of which the reported
      trading prices for stocks then constituting 20 percent or more of the level
      of the Index (or the relevant Successor Index) during the last one hour
      preceding the close of the principal trading session on such Relevant Exchange
      are materially inaccurate; or 
	 	 	 
	(c)	 	the suspension, absence or material limitation
      of trading on any major U.S. securities market for trading in futures or
      options contracts related to the Index (or the relevant Successor Index)
      for more than two hours trading or during the one hour period preceding
      the close of the principal trading session on such market, in each case
      as determined by the calculation agent in its sole discretion; and 
	 	 	 
	(ii) 	 	a determination by the calculation agent in
      its sole discretion that the event described above materially interfered
      with its ability or the ability of any of our affiliates to adjust or unwind
      all or a material portion of any hedge with respect to the Notes. 

For the purpose of determining whether a Market Disruption
  Event exists at any time, if trading in a security included in the Index is
  materially suspended or materially limited at that time, then the relevant percentage
  contribution of that security to the level of the Index shall be based on a
  comparison of:  

	(i) 	 	the portion of the level of the Index attributable
      to that security relative to  
	 	 	 
	(ii) 	 	the overall level of the Index, in each case
      immediately before that suspension or limitation. 
	 	 	 
	For purposes
      of determining whether a Market Disruption Event has occurred: 
	 	 	 
	(i) 	 	a limitation on the hours or number of days
      of trading will not constitute a Market Disruption Event if it results from
      an announced change in the regular business hours of the Relevant Exchange
      or market; 
	 	 	 
	(ii) 	 	a decision to permanently discontinue trading
      in the relevant futures or options contract will not constitute a Market
      Disruption Event; 
	 	 	 
	(iii) 	 	limitations pursuant to the rules of any Relevant
      Exchange similar to NYSE Rule 80A (or any applicable rule or regulation
      enacted or promulgated by any other self-regulatory organization or any
      government agency of 

 

	 	 	scope similar to NYSE Rule 80A as determined
      by the calculation agent) on trading during significant market fluctuations
      will constitute a suspension, absence or material limitation of trading;
	 	 	 
	(iv) 	 	a suspension of trading in futures or options
      contracts on the Index by the primary securities market trading in such
      contracts by reason of 
	 	 	 
	 	 	(a)  a price change exceeding limits set
      by such exchange or market, 

      

      (b)  an imbalance of orders relating to such contracts, or 

      

      (c)  a disparity in bid and ask quotes relating to such contracts
    
	 	 	 
	 	 	will, in each such case, constitute a suspension,
      absence or material limitation of trading in futures or options contracts
      related to the Index; and 
	 	 	 
	(v) 	 	a “suspension, absence or material limitation
      of trading” on any Relevant Exchange or on the primary market on which
      futures or options contracts related to the Index are traded will not include
      any time when such market is itself closed for trading under ordinary circumstances.
      

“Relevant Exchange” means the primary U.S. organized exchange or market of trading for any security (or any combination thereof) then
included in the Index or any Successor Index. 

Discontinuance of the S&P 500 Index; Alteration of Method of Calculation 

If Standard & Poor’s, a division of McGraw-Hill Companies, Inc. (“S&P”) discontinues publication of the Index and S&P or
another entity publishes a successor or substitute index that the calculation agent determines, in its sole discretion, to be comparable to the discontinued Index (such index being referred to herein as a “Successor Index”), then any Index Closing Level will be determined by reference to the level of such Successor Index at the close of trading on the NYSE, the AMEX, the Nasdaq National Market or
the Relevant Exchange or market for the Successor Index on the relevant Monthly Determination Date. 

Upon any selection by the calculation agent of a Successor Index, the calculation agent will cause written notice thereof to be promptly furnished to the Trustee, to the Company and to the Holders of the Notes. 

If S&P discontinues publication of the Index prior to, and such discontinuance is continuing on, any Monthly Determination Date and the calculation agent determines, in its sole discretion, that no Successor Index is
available at such time, then the calculation agent will determine the Index Closing Level for such date. The Index Closing Level will be computed by the calculation agent in accordance with the formula for and method of calculating the Index last in
effect prior to such discontinuance, using the closing price (or, if trading in the relevant securities has been materially suspended or materially limited, its good faith estimate of the closing price that would have prevailed but for such
suspension or limitation) at the close of the principal trading session on such date of each security most recently comprising the Index. Notwithstanding these alternative arrangements, discontinuance of the publication of the Index on the Relevant
Exchange may adversely affect the value of the Notes. 

If at any time the method of calculating the Index or a Successor Index, or the level thereof, is changed in a material respect, or if the Index or a Successor Index is in any other way modified so that such index does not,
in the opinion of the calculation agent, fairly represent the level of the Index or such Successor Index had such changes or modifications not been made, then, from and after such time, the calculation agent will, at the close of business in New
York City on each date on which the Index Closing Level is to be determined, make such calculations and adjustments as, in the good faith judgment of the calculation agent, may be necessary in order to arrive at a level of a stock index comparable
to the Index or such Successor Index, as the case may be, as if such changes or modifications had not been made, and the calculation agent will calculate the Index Closing Level with reference to the Index or such Successor Index, as adjusted.
Accordingly, if the method of calculating the Index or a Successor Index is modified so that the level of such index is a fraction of what it would have been if it had not been modified (e.g., due to a split in the index), then the calculation agent will adjust such index in order to arrive at a level of the Index or such Successor Index as if it had not been modified (e.g., as if such split had not occurred). 

Events of Default 

Events of Default relating to the Notes are set forth in Section 5.01 of the Indenture. 

Alternate Additional Amount Calculation in Case of an Event of Default

In case an Event of Default with respect to the Notes shall have occurred and be continuing, the amount declared due and payable for each note upon any acceleration of the Notes will be equal to $1,000 plus the Additional
Amount determined as though the Index Closing Level for any Monthly Determination Date scheduled to occur after such date of acceleration were the Index Closing Level on the date of acceleration. 

Defeasance 

The Notes will not be subject to the defeasance provisions contained in Article 13 of the Indenture. 

 IN WITNESS WHEREOF, the Company has caused this
  instrument to be duly executed under its corporate seal. 

Date: March __, 2004 

	J.P. MORGAN CHASE &
      CO. 
	 	 	 
	By:  	  

	 	Name: 	 
	 	Title: 	 
	 	 	 
	 	 	 

	 	 	 
	Attest: 	 
      

	 	Name: 	 
	 	Title: 	 
	 	 	 

[Seal] 

TRUSTEE’S CERTIFICATE OF AUTHENTICATION 

This is one of the Securities referred to in the within-mentioned Indenture.

 DEUTSCHE BANK TRUST COMPANY AMERICA 

  (f/k/a/ Bankers Trust Company), 

  As Trustee  

 BY: JPMORGAN CHASE BANK 

  As Authenticating Agent  

  	 	 	 
	By:  	 

	 	Name: 	 
	 	Title: 	 

[REVERSE OF SECURITY] 

 JPMorgan Market Participation Notes Linked to the
  S&P 500® Index due March 31, 2009  

This security is one of a duly authorized issue of securities of the Company (herein called the “Notes”), issued and to be issued in one or
more series under an Indenture dated as of May 25, 2001, (the “Indenture”), between the Company and Deutsche Bank Trust Company Americas (f/k/a Bankers Trust Company)
(herein called the “Trustee,” which term includes any successor trustee under the Indenture), to which Indenture reference is hereby made for a statement of the
respective rights, limitations of rights, duties and immunities thereunder of the Company, the Trustee, and the Holders and of the terms upon which the Notes are, and are to be, authenticated and delivered. This security is one of the series
designated as the JPMorgan Market Participation Notes Linked to the S&P 5007 Index due March 31, 2009 of the Company, which series shall have an aggregate principal
amount of $19,038,000. 

The Notes are not redeemable at the option of the Company prior to maturity and are not subject to any sinking fund. 

If an Event of Default specified under the Indenture with respect to the Notes shall occur and be continuing, the Notes may be declared due and payable in the manner and with the effect provided in the Indenture and on the
face hereof and the calculation agent will determine the Additional Amount in accordance with the calculation set forth under “Alternate Additional Amount Calculation in Case of an Event of Default” on the face hereof. Upon payment of the
amount so declared due and payable, all of the Company’s obligations in respect of the payment due at maturity on the Notes shall terminate. 

The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the rights of the Holders of the securities of each series to
be affected under the Indenture at any time by the Company and the Trustee with the consent of the holders of a majority in aggregate principal amount of the securities at the time outstanding of each series to be affected. The Indenture also
contains provisions permitting the Holders of specified percentages in aggregate principal amount of the securities of each series at the time outstanding, on behalf of the Holders of all securities of such series, to waive compliance by the Company
with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this security shall be conclusive and binding upon such Holder and upon all future Holders of
this security and of any Notes issued upon the registration of transfer hereof or in exchange herefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this security. 

As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this security is registrable in the security register of the Company, upon surrender of this security for registration of
transfer in any place where the amount due at maturity of this security is payable, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company and the security registrar duly executed by, the Holder
hereof or his attorney duly authorized in writing, and thereupon one or more new Notes, of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees. 

The Notes are issuable only in registered form without coupons in denominations of $1,000 and any integral multiple thereof. As provided in the Indenture and subject to certain limitations therein set forth, Notes are
exchangeable for a like aggregate principal amount of Notes of like tenor of a different authorized denomination, as requested by the Holder surrendering the same. 

No service charge shall be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith.

Prior to due presentment of this security for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name this security is registered as the owner hereof
and for all purposes, whether or not this security shall be overdue, and neither the Company, the Trustee nor any such agent shall be affected by notice to the contrary. 

No recourse for the payment of amounts due at maturity of this security or for any claim based hereon or otherwise in respect hereof, and no recourse under or upon any obligation, covenant or agreement of the Company in the
Indenture or any indenture supplemental thereto or in this security, or because of the creation of any indebtedness represented thereby, shall be had against any incorporator, stockholder, officer or director, as such, past, present or future, of
the Company or of any successor corporation, either directly or through the Company, or any successor corporation, whether by virtue of any constitution, statute or rule of law or by the enforcement of any assessment or penalty or otherwise, all
such liability being, by the acceptance hereof and as part of the consideration for the issue hereof, expressly waived and released by each Holder of this security. 

Capitalized terms not otherwise defined herein shall have their respective meanings in the Indenture. 

This security shall be governed by and construed in accordance with the laws of the State of New York.FIRST SUPPLEMENTAL INDENTURE

 

Exhibit 4.1

Execution Version

PEABODY ENERGY CORPORATION

5 -7/8% SENIOR NOTES DUE 2016

FIRST SUPPLEMENTAL INDENTURE

Dated as of March 23, 2004

to the Indenture dated as of March 19, 2004

U.S. BANK NATIONAL ASSOCIATION

Trustee

 

 

          FIRST SUPPLEMENTAL INDENTURE dated as of
March 23, 2004 to that certain
Indenture dated as of March 19, 2004, (the “Base Indenture,” and, together with
this First Supplemental Indenture, the “Indenture”) between Peabody Energy
Corporation, a Delaware corporation (the “Company”) and U.S. Bank National
Association, as Trustee (the “Trustee”).

          The Company and the Trustee have heretofore
executed the Base Indenture, a
form of which has been filed with the Securities and Exchange Commission under
the Securities Act of 1933, as amended, as Exhibit 4.199 to the Company’s
Registration Statement on Form S-3 (Registration No. 333-109906), providing for
the issuance from time to time of debt securities of the Company.

          The Company and the Trustee are hereby
supplementing the Base Indenture
pursuant to the provisions of Section 9.01 of the Base Indenture to establish
the form and terms and conditions of the debt securities issued pursuant to
this First Supplemental Indenture. The terms of this First Supplemental
Indenture shall supplement and be incorporated in their entirety with the terms
of the Base Indenture solely with respect to the debt securities issued
pursuant to this First Supplemental Indenture. To the extent any terms of this
First Supplemental Indenture are contrary to or duplicative of terms contained
in the Base Indenture, the terms of this First Supplemental Indenture shall be
deemed to supersede the Base Indenture solely with respect to the debt
securities issued pursuant to this First Supplemental Indenture and solely for
the benefit of the Holders of such debt securities issued pursuant to this
First Supplemental Indenture.

          The Company and the Trustee agree as
follows for the benefit of each other
and for the equal and ratable benefit of the Holders of the
 5 -7/8% Senior
Notes due 2016 (the “Notes”).

ARTICLE I

DEFINITIONS AND INCORPORATION BY REFERENCE

Section 1.01. Definitions.

          So long as any of the Notes are
outstanding, the following definitions
shall be applicable to the Notes, shall be included as defined terms for all
purposes under the Base Indenture with respect to the Notes and, to the extent
inconsistent with the definitions contained in Section 1.01 of the Base
Indenture, shall replace such definitions with respect to the Notes.
Capitalized terms used but not defined herein shall have the meaning ascribed
to such terms in the Base Indenture.

          “Acquired Debt” means,
with respect to any specified Person, (i)
Indebtedness of any other Person existing at the time such other Person is
merged with or into or became a Subsidiary of such specified Person, including,
without limitation, Indebtedness incurred in connection with, or in
contemplation of, such other Person

 

 

merging with or into or becoming a Subsidiary of
such specified Person,
and (ii) Indebtedness secured by a Lien encumbering any asset acquired by such
specified Person.

          “Additional Assets” means
(i) any property or assets (other than Capital
Stock, Indebtedness or rights to receive payments over a period greater than
180 days, other than with respect to coal supply contract restructurings) that
is usable by the Company or a Restricted Subsidiary in a Permitted Business or
(ii) the Capital Stock of a Person that is at the time, or becomes, a
Restricted Subsidiary as a result of the acquisition of such Capital Stock by
the Company or another Restricted Subsidiary.

          “Additional Notes” means
an unlimited amount of Notes (other than Initial
Notes) issued under this First Supplemental Indenture in accordance with
Sections 2.02 and 4.09 hereof.

          “Agent” means any
Registrar, Paying Agent or co-Registrar.

          “Applicable Procedures”
means, with respect to any transfer or exchange of
or for beneficial interests in any Global Note, the rules and procedures of the
Depositary, Euroclear and Clearstream that apply to such transfer, redemption
or exchange.

          “Asset Sale” means
(i) the sale, lease, conveyance or other disposition of
any assets or rights (including, without limitation, by way of a sale and
leaseback) other than sales of inventory in the ordinary course of business
consistent with past practices (provided that the sale, lease, conveyance or
other disposition of all or substantially all of the assets of the Company and
its Restricted Subsidiaries taken as a whole will be governed by the provisions
of Section 4.15 and/or Section 5.01 hereof and not by the provisions of Section
4.10 hereof, and (ii) the issue or sale by the Company or any of its Restricted
Subsidiaries of Equity Interests of any of the Company’s Restricted
Subsidiaries, in the case of either clause (i) or (ii), whether in a single
transaction or a series of related transactions (a) that have a fair market
value in excess of $5.0 million or (b) for Net Proceeds in excess of $5.0
million. Notwithstanding the foregoing, the following items shall not be
deemed to be Asset Sales: (i) a transfer of assets by the Company to a
Restricted Subsidiary or by a Restricted Subsidiary to the Company or to
another Restricted Subsidiary, (ii) an issuance of Equity Interests by a
Restricted Subsidiary to the Company or to another Restricted Subsidiary, (iii)
a Restricted Payment that is permitted by, or an Investment that is not
prohibited by, Section 4.07 hereof, (iv) a disposition of Cash Equivalents or
obsolete, worn out or no longer useful equipment, (v) foreclosures on assets,
(vi) the sale or discount, in each case without recourse, of accounts
receivable arising in the ordinary course of business, but only in connection
with the compromise or collection thereof and (vii) the factoring of accounts
receivable arising in the ordinary course of business pursuant to arrangements
customary in the industry.

2

 

          “Bankruptcy Law” means
Title 11, U.S. Code or any similar federal or state
law for the relief of debtors.

          “Capital Lease Obligation”
means, at the time any determination thereof is
to be made, the amount of the liability in respect of a capital lease that
would at such time be required to be capitalized on a balance sheet in
accordance with GAAP.

          “Capital Stock” means
(i) in the case of a corporation, corporate stock,
(ii) in the case of an association or business entity, any and all shares,
interests, participations, rights or other equivalents (however designated) of
corporate stock, (iii) in the case of a partnership or limited liability
company, partnership or membership interests (whether general or limited) and
(iv) any other interest or participation that confers on a Person the right to
receive a share of the profits and losses of, or distributions of assets of,
the issuing Person.

          “Cash Equivalents” means
(a) securities with maturities of one year or
less from the date of acquisition issued or fully guaranteed or insured by the
U.S. Government or any agency thereof, (b) certificates of deposit and time
deposits with maturities of one year or less from the date of acquisition and
overnight bank deposits of any lender under the Credit Agreement or of any
commercial bank having capital and surplus in excess of $500.0 million, (c)
repurchase obligations of any lender under the Credit Agreement or of any
commercial bank satisfying the requirements of clause (b) of this definition,
having a term of not more than 90 days with respect to securities issued or
fully guaranteed or insured by the United States Government, (d) commercial
paper of a domestic issuer rated at least A-2 by S&P or P-2 by Moody’s, or
carrying an equivalent rating by a nationally recognized rating agency if both
of S&P and Moody’s cease publishing ratings of investments, (e) securities with
maturities of one year or less from the date of acquisition issued or fully
guaranteed by any state, commonwealth or territory of the United States, by any
political subdivision or taxing authority of any such state, commonwealth or
territory or by any foreign government, the securities of which state,
commonwealth, territory, political subdivision, taxing authority or foreign
government (as the case may be) are rated at least A by S&P or A by Moody’s,
(f) securities with maturities of one year or less from the date of acquisition
backed by standby letters of credit issued by any lender under the Credit
Agreement or any commercial bank satisfying the requirements of clause (b) of
this definition or (g) shares of money market mutual or similar funds, at least
95% of the assets of which invest exclusively in assets satisfying the
requirements of clauses (a) through (f) of this definition.

          “Change of Control” means
the occurrence of any of the following: (i) the
sale, lease, transfer, conveyance or other disposition (other than by way of
merger or consolidation), in one or a series of related transactions, of all or
substantially all of the assets of the Company and its Restricted Subsidiaries
taken as a whole to any “person” (as such term is used in Section 13(d)(3) of
the Exchange Act) other than a Principal or a Related Party of a Principal (as
defined below), (ii) the adoption of a plan relating to the liquidation or
dissolution of the Company, (iii) the consummation of any transaction
(including, without limitation, any merger or consolidation) the result of
which is that any

3

 

“person” (as
defined above), other than the Principals and their Related
Parties, becomes the “beneficial owner” (as such term is defined in Rule 13d-3
and Rule 13d-5 under the Exchange Act), directly or indirectly, of more than
50% of the Voting Stock of the Company (measured by voting power rather than
number of shares) or (iv) the first day on which a majority of the members of
the Board of Directors of the Company are not Continuing Directors.

          “Change of Control Triggering
Event” means the occurrence of both a Change
of Control and a Rating Decline with respect to the Notes.

          “Clearstream” means
Clearstream Banking S.A. and any successor thereto.

          “Consolidated Cash Flow”
means, with respect to any Person for any period,
the Consolidated Net Income of such Person for such period plus (i) provision
for taxes based on income or profits of such Person and its Restricted
Subsidiaries for such period, to the extent that such provision for taxes was
included in computing such Consolidated Net Income, plus (ii) consolidated
interest expense of such Person and its Restricted Subsidiaries for such
period, whether paid or accrued and whether or not capitalized (including,
without limitation, amortization of debt issuance costs, deferred financing
fees and original issue discount, noncash interest payments, the interest
component of any deferred payment obligations, the interest component of all
payments associated with Capital Lease Obligations, commissions, discounts and
other fees and charges incurred in respect of letter of credit or bankers’
acceptance financings, and net payments (if any) pursuant to Hedging
Obligations), to the extent that any such expense was deducted in computing
such Consolidated Net Income, plus (iii) an amount equal to any extraordinary
loss plus any net loss realized in connection with an Asset Sale (to the extent
such losses were deducted in computing such Consolidated Net Income), plus (iv)
depreciation, depletion, amortization (including amortization of goodwill and
other intangibles) and other noncash expenses (including, without limitation,
writedowns and impairment of property, plant and equipment and intangibles and
other long- lived assets) (excluding any such noncash expense to the extent
that it represents an accrual of or reserve for cash expenses in any future
period or amortization of a prepaid cash expense that was paid in a prior
period) of such Person and its Restricted Subsidiaries for such period to the
extent that such depreciation, depletion, amortization and other noncash
expenses were deducted in computing such Consolidated Net Income, minus (v)
noncash items increasing such Consolidated Net Income for such period (other
than accruals in accordance with GAAP). Notwithstanding the foregoing, the
provision for taxes on the income or profits of, and the depreciation,
depletion and amortization and other noncash expenses of, a Restricted
Subsidiary that is not a Subsidiary Guarantor shall be added to Consolidated
Net Income to compute Consolidated Cash Flow only to the extent that a
corresponding amount would be permitted at the date of determination to be
dividended to the Company by such Restricted Subsidiary without prior
governmental approval (that has not been obtained), and without direct or
indirect restriction pursuant to the terms of its charter and all agreements,
instruments, judgments, decrees, orders, statutes, rules and governmental
regulations applicable to that Restricted Subsidiary or its stockholders.

4

 

          “Consolidated Net Income”
means, with respect to any Person for any
period, the aggregate of the Net Income of such Person and its Subsidiaries for
such period, on a consolidated basis, determined in accordance with GAAP;
provided that (i) the Net Income of any Unrestricted Subsidiary, any Person
that is not a Subsidiary or any Person accounted for by the equity method of
accounting shall be included only to the extent of the amount of dividends or
distributions paid in cash to the referent Person or a Restricted Subsidiary
thereof, (ii) the Net Income of any Restricted Subsidiary that is not a
Subsidiary Guarantor shall be excluded to the extent that the declaration or
payment of dividends or similar distributions by that Restricted Subsidiary of
that Net Income is not at the date of determination permitted without any prior
governmental approval (that has not been obtained) or, directly or indirectly,
by operation of the terms of its charter or any agreement, instrument,
judgment, decree, order, statute, rule or governmental regulation applicable to
that Restricted Subsidiary or its stockholders, (iii) the Net Income of any
Person acquired in a transaction accounted for in a manner similar to a pooling
of interests transaction for any period prior to the date of such acquisition
shall be excluded, provided, however, that such Net Income shall not be
excluded for purposes of calculating the Fixed Charge Coverage Ratio, and (iv)
the cumulative effect of a change in accounting principles shall be excluded.

          “Continuing Directors”
means, as of any date of determination, any member
of the Board of Directors of the Company who (i) was a member of such Board of
Directors on the date hereof or (ii) was nominated for election or elected to
such Board of Directors with the approval of a majority of the Continuing
Directors who were members of such Board at the time of such nomination or
election.

          “Corporate Trust Office of the
Trustee” shall be the address of the
Trustee specified in Section 12.02 hereof or such other address as to which the
Trustee may give notice to the Company.

          “Credit Agreement” means
that certain Credit Agreement, dated as of March
21, 2003 by and among the Company, as borrower, Wachovia Securities, Inc.,
Fleet Securities, Inc. and Lehman Brothers Inc. as Arrangers, Wachovia Bank,
National Association and Lehman Commercial Paper Inc., as the Syndication
Agents, Fleet National Bank, as the Administrative Agent, Morgan Stanley Senior
Funding, Inc. and U.S. Bank National Association, as Documentation Agents, and
the other lenders party thereto, including any related notes, guarantees,
collateral documents, letters of credit, instruments and agreements executed in
connection therewith (and any appendices, annexes, exhibits or schedules to any
of the foregoing), and in each case as amended, restated, amended and restated,
modified, supplemented, renewed, refunded, replaced, restructured, repaid or
refinanced from time to time (whether with the original agents, arrangers and
lenders or other agents, arrangers and lenders or otherwise, whether provided
under the original credit agreement or other Credit Facilities or otherwise,
whether for a greater or lesser principal amount, whether with greater or
lesser interest and fees and whether including more or less collateral or
guarantors). Indebtedness under the Credit Agreement outstanding on the date
on which notes are first issued and authenticated under the indenture shall be
deemed to have been incurred on such date in

5

 

reliance on, and to be permitted by, the exception
provided by clause (i)
of the definition of Permitted Indebtedness.

          “Credit Facilities” means,
with respect to the Company or any of its
Restricted Subsidiaries, one or more debt facilities (including, without
limitation, the Credit Agreement) or commercial paper facilities with banks or
other institutional lenders providing for revolving credit loans, term loans,
receivables financing (including through the sale of receivables to such
lenders or to special purpose entities formed to borrow from such lenders
against such receivables) or letters of credit, in each case, as amended,
restated, amended and restated, modified, supplemented, renewed, refunded,
replaced, refinanced, repaid or restructured in whole or in part from time to
time.

          “Custodian” means the
Trustee, as custodian with respect to the Notes in
global form, or any successor entity thereto.

          “Definitive Note” means a
certificated Note registered in the name of the
Holder thereof and issued in accordance with Section 2.06 hereof, in the form
of Exhibit A hereto except that such Note shall not bear the Global Note Legend
and shall not have the “Schedule of Exchanges of Interests in the Global Note”
attached thereto.

          “Depositary” means, with
respect to the Notes issuable or issued in whole
or in part in global form, the Person specified in Section 2.03 hereof as the
Depositary with respect to the Notes, and any and all successors thereto
appointed as depositary hereunder and having become such pursuant to the
applicable provision of this First Supplemental Indenture.

          “Designated Noncash
Consideration” means the fair market value of noncash
consideration received by the Company or one of its Restricted Subsidiaries in
connection with an Asset Sale that is so designated as Designated Noncash
Consideration pursuant to an Officer’s Certificate, setting forth the basis of
such valuation, executed by the principal executive officer and the principal
financial officer of the Company, less the amount of cash or Cash Equivalents
received in connection with a sale of such Designated Noncash Consideration.

          “Disqualified Stock” means
any Capital Stock that, by its terms (or by the
terms of any security into which it is convertible, or for which it is
exchangeable, at the option of the holder thereof), or upon the happening of
any event, matures or is mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise, or redeemable at the option of the Holder thereof, in
whole or in part, on or prior to the date on which the Notes mature; provided,
however, that any Capital Stock that would constitute Disqualified Stock solely
because the Holders thereof have the right to require the Company to repurchase
such Capital Stock upon the occurrence of a Change of Control Triggering Event
or an Asset Sale shall not constitute Disqualified Stock if the terms of such
Capital Stock provide that the Company may not repurchase or redeem any such
Capital Stock pursuant to such provisions unless such repurchase or redemption
complies with Section 4.07 hereof.

6

 

          “Domestic Subsidiary”
means a Subsidiary that is (i) formed under the laws
of the United States of America or a state or territory thereof or (ii) as of
the date of determination, treated as a domestic entity or a partnership or a
division of a domestic entity for United States federal income tax purposes.

          “Equity Interests” means
Capital Stock and all warrants, options or other
rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).

          “Equity Offering” means
any public or private sale of equity securities
(excluding Disqualified Stock) of the Company, other than any private sales to
an Affiliate of the Company.

          “Euroclear” means Morgan
Guaranty Trust Company of New York, Brussels
office, as operator of the Euroclear system.

          “Existing Indebtedness”
means up to $1,253.0 million in aggregate
principal amount of Indebtedness of the Company and its Restricted Subsidiaries
(other than Indebtedness under the Credit Agreement, the Notes and the
Subsidiary Guarantees) in existence on the date hereof, until such amounts are
repaid.

          “Fixed Charge Coverage
Ratio” means with respect to any specified Person
for any period, the ratio of the Consolidated Cash Flow of such Person and its
Restricted Subsidiaries for such period to the Fixed Charges of such Person and
its Restricted Subsidiaries for such period. In the event that the specified
Person or any of its Restricted Subsidiaries incurs, assumes, Guarantees,
repays, repurchases or redeems any Indebtedness (other than ordinary working
capital borrowings) or issues, repurchases or redeems preferred stock
subsequent to the commencement of the period for which the Fixed Charge
Coverage Ratio is being calculated and on or prior to the date on which the
event for which the calculation of the Fixed Charge Coverage Ratio is made (the
“Calculation Date”), then the Fixed Charge Coverage Ratio will be calculated
giving pro forma effect to such incurrence, assumption, Guarantee, repayment,
repurchase or redemption of Indebtedness, or such issuance, repurchase or
redemption of preferred stock, and the use of the proceeds therefrom as if the
same had occurred at the beginning of the applicable four-quarter reference
period.

          In addition, for purposes of calculating
the Fixed Charge Coverage Ratio:

          (1) acquisitions that have been made
by the specified Person or any of its
Restricted Subsidiaries, including through mergers, consolidations or otherwise
(including acquisitions of assets used in a Permitted Business) and including
any related financing transactions, during the four-quarter reference period or
subsequent to such reference period and on or prior to the Calculation Date
will be given pro forma effect as if they had occurred on the first day of the
four-quarter reference period, including any pro forma expense and cost
reductions and other operating improvements that have occurred or are
reasonably expected to occur, in the reasonable judgment of the chief

7

 

financial officer of the Company (regardless of
whether those cost savings
or operating improvements could then be reflected in pro forma financial
statements in accordance with Regulation S-X promulgated under the Securities
Act or any other regulation or policy of the SEC related thereto);

          (2) the Consolidated Cash Flow
attributable to discontinued operations, as
determined in accordance with GAAP, and operations or businesses disposed of
prior to the Calculation Date, will be excluded; and

          (3) the Fixed Charges attributable to
discontinued operations, as
determined in accordance with GAAP, and operations or businesses disposed of
prior to the Calculation Date, will be excluded, but only to the extent that
the obligations giving rise to such Fixed Charges will not be obligations of
the specified Person or any of its Restricted Subsidiaries following the
Calculation Date.

          “Fixed Charges” means,
with respect to any Person for any period, the sum,
without duplication, of (i) the consolidated interest expense of such Person
and its Restricted Subsidiaries for such period, whether paid or accrued
(including, without limitation, amortization of original issue discount,
noncash interest payments, the interest component of any deferred payment
obligations, the interest component of all payments associated with Capital
Lease Obligations, commissions, discounts and other fees and charges incurred
in respect of letters of credit or bankers’ acceptance financings, and net
payments (if any) pursuant to Hedging Obligations, but excluding amortization
of debt issuance costs) and (ii) the consolidated interest of such Person and
its Restricted Subsidiaries that was capitalized during such period, and (iii)
any interest expense on the portion of Indebtedness of another Person that is
Guaranteed by such Person or one of its Restricted Subsidiaries or secured by a
Lien on assets of such Person or one of its Restricted Subsidiaries (whether or
not such Guarantee or Lien is called upon) and (iv) the product of (a) all
dividend payments, whether or not in cash, on any series of preferred stock of
such Person or any of its Restricted Subsidiaries, other than dividend payments
on Equity Interests payable solely in Equity Interests of the Company (other
than Disqualified Stock) or to the Company or a Restricted Subsidiary of the
Company, times (b) a fraction, the numerator of which is one and the
denominator of which is one minus the effective combined federal, state and
local tax rate of such Person for such period, expressed as a decimal, in each
case, for the Company and its Restricted Subsidiaries on a consolidated basis
and in accordance with GAAP.

          “Foreign Subsidiaries”
means Subsidiaries of the Company that are not
Domestic Subsidiaries.

          “GAAP” means generally
accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as have been approved by a significant segment of the accounting
profession, which are in effect on the date hereof.

8

 

          “Global Note Legend” means
the legend set forth in Section 2.06(f), which
is required to be placed on all Global Notes issued under this First
Supplemental Indenture.

          “Global Notes” means a
permanent global Note in the form of Exhibit A
attached hereto that bears the Global Note Legend and that has the “Schedule of
Exchanges of Interests in the Global Note” attached thereto, and that is
deposited with or on behalf of and registered in the name of the Depositary.

          “Government Securities”
means direct obligations of, or obligations
guaranteed by, the United States of America, and the payment for which the
United States pledges its full faith and credit.

          “Guarantee” means a
guarantee (other than by endorsement of negotiable
instruments for collection in the ordinary course of business), direct or
indirect, in any manner (including, without limitation, by way of a pledge of
assets or through letters of credit or reimbursement agreements in respect
thereof), of all or any part of any Indebtedness.

          “Hedging Obligations”
means, with respect to any Person, the obligations
of such Person under (i) currency exchange, interest rate or commodity swap
agreements, currency exchange, interest rate or commodity cap agreements and
currency exchange, interest rate or commodity collar agreements and (ii) other
agreements or arrangements designed to protect such Person against fluctuations
in currency exchange, interest rates or commodity prices, in each case for the
purpose of risk management and not for speculation.

          “Holder” means a Person in
whose name a Note is registered.

          “Indebtedness” means, with
respect to any Person, any indebtedness of such
Person, whether or not contingent, in respect of borrowed money or evidenced by
bonds, notes, debentures or similar instruments or letters of credit (or
reimbursement agreements in respect thereof) or banker’s acceptances or
representing Capital Lease Obligations or the balance deferred and unpaid of
the purchase price of any property or representing any Hedging Obligations, if
and to the extent any of the foregoing (other than letters of credit and
Hedging Obligations) would appear as a liability upon a balance sheet of such
Person prepared in accordance with GAAP, as well as all Indebtedness of others
secured by a Lien on any asset of such Person (whether or not such Indebtedness
is assumed by such Person) and, to the extent not otherwise included, the
Guarantee by such Person of any indebtedness of any other Person, but excluding
from the definition of “Indebtedness,” any of the foregoing that constitutes
(1) an accrued expense, (2) trade payables and (3) Obligations in respect of
reclamation, workers’ compensation, including black lung, pensions and retiree
health care, in each case to the extent not overdue for more than 90 days. The
amount of any Indebtedness outstanding as of any date shall be (i) the accreted
value thereof, in the case of any Indebtedness issued with original issue

9

 

discount, and (ii) the principal amount
thereof, together with any
interest thereon that is more than 30 days past due, in the case of any other
Indebtedness.

          “Indirect Participant”
means a Person who holds a beneficial interest in a
Global Note through a Participant.

          “Initial Notes” means
$250.0 million in aggregate principal amount of
Notes issued under this First Supplemental Indenture on the date hereof.

          “Investment Grade Rating”
means a rating equal to or higher than Baa3 (or
the equivalent) by Moody’s or BBB- (or the equivalent) by S&P.

          “Investments” means, with
respect to any Person, all investments by such
Person in other Persons (including Affiliates) in the form of direct or
indirect loans (including guarantees of any portion of Indebtedness or other
obligations), advances or capital contributions (excluding commission, travel
and similar advances to officers and employees made in the ordinary course of
business), purchases or other acquisitions for consideration of Indebtedness,
Equity Interests or other securities, together with all items that are or would
be classified as investments on a balance sheet prepared in accordance with
GAAP. If the Company or any Restricted Subsidiary of the Company sells or
otherwise disposes of any Equity Interests of any direct or indirect Restricted
Subsidiary of the Company such that, after giving effect to any such sale or
disposition, such Person is no longer a Restricted Subsidiary of the Company,
the Company shall be deemed to have made an Investment on the date of any such
sale or disposition equal to the fair market value of the Equity Interests of
such Restricted Subsidiary not sold or disposed of in an amount determined as
provided in Section 4.07 hereof.

          “Legal Holiday” means a
Saturday, a Sunday or a day on which banking
institutions in the City of New York, the city in which the Corporate Trust
Office of the Trustee is located or at a place of payment with respect to the
Notes are authorized by law, regulation or executive order to remain closed.
If a payment date is a Legal Holiday at a place of payment, payment may be made
at that place on the next succeeding day that is not a Legal Holiday, and no
interest shall accrue on such payment for the intervening period.

          “Lien” means, with respect
to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law
(including any conditional sale or other title retention agreement, any lease
in the nature thereof, any option or other agreement to sell or give a security
interest in and any filing of or agreement to give any financing statement
under the Uniform Commercial Code (or equivalent statutes) of any
jurisdiction), but excluding any of the foregoing arising as a result of a
sale, contribution, disposition or any other transfer of accounts, chattel
paper, payment intangibles, promissory notes and/or related assets otherwise
permitted under the terms hereof.

10

 

          “Marketable Securities”
means, with respect to any Asset Sale, any readily
marketable equity securities that are (i) traded on the New York Stock
Exchange, the American Stock Exchange or the Nasdaq National Market; and (ii)
issued by a corporation having a total equity market capitalization of not less
than $250.0 million; provided that the excess of (A) the aggregate amount of
securities of any one such corporation held by the Company and any Restricted
Subsidiary over (B) ten times the average daily trading volume of such
securities during the 20 immediately preceding trading days shall be deemed not
to be Marketable Securities; as determined on the date of the contract relating
to such Asset Sale.

          “Moody’s” means
Moody’s Investors Service, Inc., or any successor to the
rating agency business thereof.

          “Net Income” means, with
respect to any Person, the net income or loss of
such Person, determined in accordance with GAAP and before any reduction in
respect of preferred stock dividends, excluding, however, (i) any gain or loss,
together with any related provision for taxes on such gain or loss, realized in
connection with (a) any Asset Sale (including, without limitation, dispositions
pursuant to sale and leaseback transactions) or (b) the disposition of any
securities by such Person or any of its Restricted Subsidiaries or the
extinguishment of any Indebtedness of such Person or any of its Restricted
Subsidiaries and (ii) any extraordinary or nonrecurring gain or loss, together
with any related provision for taxes on such extraordinary or nonrecurring gain
or loss.

          “Net Proceeds” means the
aggregate proceeds (cash or property) received by
the Company or any of its Restricted Subsidiaries in respect of any Asset Sale
(including, without limitation, any cash received upon the sale or other
disposition of any noncash consideration received in any Asset Sale) or the
sale or disposition of any Investment, net of the direct costs relating to such
Asset Sale, sale or disposition, (including, without limitation, legal,
accounting and investment banking fees, and sales commissions) and any
relocation expenses incurred as a result thereof, taxes paid or payable as a
result thereof (after taking into account any available tax credits or
deductions and any tax sharing arrangements), and any reserve for adjustment in
respect of the sale price of such asset or assets established in accordance
with GAAP.

          “Non-Guarantor
Subsidiaries” means (i) the Specified Subsidiaries, (ii)
the Company’s future Unrestricted Subsidiaries; and (iii) the Company’s current
and future Foreign Subsidiaries.

          “Non-Recourse Debt” means
Indebtedness (i) as to which neither the Company
nor any of its Restricted Subsidiaries (a) provides credit support of any kind
(including any undertaking, agreement or instrument that would constitute
Indebtedness) other than a pledge of the Equity Interests of any Unrestricted
Subsidiaries, (b) is directly or indirectly liable (as a guarantor or
otherwise) other than by virtue of a pledge of the Equity Interests of any
Unrestricted Subsidiaries, or (c) constitutes the lender; and (ii) no default
with respect to which (including any rights that the holders thereof may have
to

11

 

take enforcement action against an Unrestricted
Subsidiary) would permit
(upon notice, lapse of time or both) any holder of any other Indebtedness
(other than the Notes being offered hereby) of the Company or any of its
Restricted Subsidiaries to declare a default on such other Indebtedness or
cause the payment thereof to be accelerated or payable prior to its stated
maturity.

          “Non-U.S. Person” means a
Person who is not a U.S. Person.

          “Notes” has the meaning
assigned to it in the preamble to this First
Supplemental Indenture.

          “Obligations” means any
principal, premium (if any), interest, penalties,
fees, charges, expenses, indemnifications, reimbursement obligations, damages,
Guarantees and other liabilities and amounts payable under the documentation
governing any Indebtedness or in respect thereto.

          “Offering” means the
offering of the Notes by the Company.

          “Officer” means, with
respect to any Person, the Chairman of the Board,
the Chief Executive Officer, the President, the Chief Operating Officer, the
Chief Financial Officer, the Treasurer, any Assistant Treasurer, the
Controller, the Secretary or any Vice President of such Person.

          “Participant” means, with
respect to the Depositary, Euroclear or
Clearstream, a Person who has an account with the Depositary, Euroclear or
Clearstream, respectively, and, with respect to The Depository Trust Company,
shall include Euroclear and Clearstream.

          “Permitted Business” means
coal production, coal mining, coal brokering,
coal transportation, mine development, power marketing, electricity generation,
power/energy sales and trading, energy transactions/asset restructurings, risk
management products associated with energy, fuel/power integration and other
energy-related businesses, ash disposal, environmental remediation and
development of related real estate assets, coal, natural gas, petroleum or
other fossil fuel exploration, production, marketing, transportation and
distribution, and other related businesses and activities of the Company and
its Subsidiaries as of the date hererof and any business or activity that is
reasonably similar thereto or a reasonable extension, development or expansion
thereof or ancillary thereto.

          “Permitted Investments”
means (a) any Investment in the Company or in a
Restricted Subsidiary of the Company; (b) any Investment in Cash Equivalents;
(c) any Investment by the Company or any Restricted Subsidiary of the Company
in a Person, if as a result of such Investment (i) such Person becomes a
Restricted Subsidiary of the Company or (ii) such Person, in one transaction or
a series of related transactions, is merged, consolidated or amalgamated with
or into, or transfers or conveys substantially all of its assets to, or is
liquidated into, the Company or a Restricted Subsidiary of the

12

 

Company; (d) any acquisition of assets solely
in exchange for the issuance
of Equity Interests (other than Disqualified Stock) of the Company; (e) any
Investment existing on the date hereof (an “Existing Investment”) and any
Investment that replaces, refinances or refunds an Existing Investment,
provided that the new Investment is in an amount that does not exceed the
amount replaced, refinanced or refunded and is made in the same Person as the
Investment replaced, refinanced or refunded, (f) advances to employees not in
excess of $10.0 million outstanding at any one time; (g) Hedging Obligations
permitted under clause (viii) of Section 4.09 hereof; (h) loans and advances to
officers, directors and employees for business-related travel expenses, moving
expenses and other similar expenses, in each case incurred in the ordinary
course of business; (i) any Investment in a Permitted Business (whether or not
an Investment in an Unrestricted Subsidiary) having an aggregate fair market
value, when taken together with all other Investments made pursuant to this
clause (i), does not exceed in aggregate amount the sum of (1) 15% of Total
Assets at the time of such Investment (with the fair market value of each
Investment being measured at the time made and without giving effect to
subsequent changes in value) plus (2) 100% of the Net Proceeds from the sale or
disposition of any Investment previously made pursuant to this clause (i) or
100% of the amount of any dividend, distribution or payment from any such
Investment, net of income taxes paid or payable in respect thereof, in each
case up to the amount of the Investment that was made pursuant to this clause
(i) and 50% of the amount of such Net Proceeds or 50% of such dividends,
distributions or payments, in each case received in excess of the amount of the
Investments made pursuant to this clause (i); (j) guarantees (including
Guarantees) of Indebtedness permitted under Section 4.09 hereof; (k) any
Investment acquired by the Company or any of its Restricted Subsidiaries (A) in
exchange for any other Investment or accounts receivable held by the Company or
any such Restricted Subsidiary in connection with or as a result of a
bankruptcy, workout, reorganization or recapitalization of the issuer of such
other Investment or accounts receivable or (B) as a result of the transfer of
title with respect to any secured Investment in default as a result of a
foreclosure by the Company or any of its Restricted Subsidiaries with respect
to such secured Investment; (l) any Investments in joint ventures in an amount,
taken together will all other Investments made pursuant to this clause (l),
that does not exceed $100.0 million at the time outstanding; and (m) that
portion of any Investment by the Company or a Restricted Subsidiary in a
Permitted Business to the extent that the Company or such Restricted Subsidiary
will receive in a substantially concurrent transaction an amount in cash equal
to the amount of such Investment (or the fair market value of such Investment),
net of any obligation to pay taxes or other amounts in respect of the receipt
of such cash; provided that the receipt of such cash does not carry any
obligation by the Company or such Restricted Subsidiary to repay or return such
cash; provided, however, that with respect to any Investment, the Company may,
in its sole discretion, allocate all or any portion of any Investment to one or
more of the above clauses so that the entire Investment would be a Permitted
Investment.

          “Permitted Liens” means
(i) Liens securing Indebtedness under Credit
Facilities that were permitted by the terms of this Indenture to be incurred;
(ii) Liens in favor of the Company; (iii) Liens on property of a Person
existing at the time such Person

13

 

is merged into or consolidated with the Company or
any Restricted
Subsidiary of the Company; provided that such Liens were in existence prior to
the contemplation of such merger or consolidation and do not extend to any
assets other than those of the Person merged into or consolidated with the
Company; (iv) Liens on property existing at the time of acquisition thereof by
the Company or any Restricted Subsidiary of the Company, provided that such
Liens were in existence prior to the contemplation of such acquisition; (v)
Liens to secure the performance of statutory obligations, surety or appeal
bonds, performance bonds or other obligations of a like nature incurred in the
ordinary course of business; (vi) Liens incurred or deposits made in the
ordinary course of business in connection with workers’ compensation,
unemployment insurance or other kinds of social security; (vii) Liens existing
on the date hereof; (viii) Liens for taxes, assessments or governmental charges
or claims that are not yet delinquent or that are being contested in good faith
by appropriate proceedings promptly instituted and diligently concluded,
provided that any reserve or other appropriate provision as shall be required
in conformity with GAAP shall have been made therefor; (ix) Liens on assets of
Subsidiary Guarantors to secure Senior Debt of such Subsidiary Guarantors that
was permitted by this Indenture to be incurred; (x) Liens incurred in the
ordinary course of business of the Company or any Restricted Subsidiary of the
Company with respect to obligations that (a) are not incurred in connection
with the borrowing of money or the obtaining of advances or credit (other than
trade credit in the ordinary course of business) and (b) do not in the
aggregate materially detract from the value of the property or materially
impair the use thereof in the operation of business by the Company or such
Restricted Subsidiary; (xi) Liens on assets of Foreign Subsidiaries to secure
Indebtedness that was permitted by this Indenture to be incurred; (xii)
statutory liens of landlords, mechanics, suppliers, vendors, warehousemen,
carriers or other like Liens arising in the ordinary course of business; (xiii)
judgment Liens not giving rise to an Event of Default so long as any
appropriate legal proceeding that may have been duly initiated for the review
of such judgment shall not have been finally terminated or the period within
which such legal proceeding may be initiated shall not have expired; (xiv)
easements, rights-of-way, zoning and similar restrictions and other similar
encumbrances or title defects incurred or imposed, as applicable, in the
ordinary course of business and consistent with industry practices which, in
the aggregate, are not substantial in amount, and which do not in any case
materially detract from the value of the property subject thereto (as such
property is used by the Company or its Subsidiaries) or interfere with the
ordinary conduct of the business of the Company or such Subsidiaries; provided,
however, that any such Liens are not incurred in connection with any borrowing
of money or any commitment to loan any money or to extend any credit; (xv)
Liens to secure Indebtedness (including Capital Lease Obligations) permitted by
clause (vi) of the second paragraph of Section 4.09 hereof and other purchase
money Liens to finance property or assets of the Company or any Restricted
Subsidiary acquired in the ordinary course of business; provided that such
Liens are only secured by such property or assets so acquired or improved
(including, in the case of the acquisition of Capital Stock of a Person who
becomes a Restricted Subsidiary, Liens on the assets of the Person whose
Capital Stock was so acquired); (xvi) Liens securing Indebtedness under Hedging
Obligations; provided that such Liens are only secured by property or assets
that secure the Indebtedness subject to the Hedging

14

 

Obligation; (xvii) Liens to secure
Indebtedness permitted by clause (xii)
of the second paragraph of Section 4.09 hereof; and (xviii) Liens on the Equity
Interests of Unrestricted Subsidiaries securing Obligations of Unrestricted
Subsidiaries not otherwise prohibited by this Indenture.

          “Permitted Refinancing
Indebtedness” means any Indebtedness of the Company
or any of its Restricted Subsidiaries issued in exchange for, or the net
proceeds of which are used to extend, refinance, renew, replace, defease or
refund other Indebtedness of the Company or any of its Restricted Subsidiaries
(other than intercompany Indebtedness); provided that: (i) the principal amount
(or accreted value, if applicable) of such Permitted Refinancing Indebtedness
does not exceed the principal amount of (or accreted value, if applicable),
plus accrued interest and premium, if any, on, the Indebtedness so extended,
refinanced, renewed, replaced, defeased or refunded (plus the amount of
reasonable expenses incurred in connection therewith); (ii) such Permitted
Refinancing Indebtedness has a final maturity date later than the final
maturity date of, and has a Weighted Average Life to Maturity equal to or
greater than the Weighted Average Life to Maturity of, the Indebtedness being
extended, refinanced, renewed, replaced, defeased or refunded; (iii) if the
Indebtedness being extended, refinanced, renewed, replaced, defeased or
refunded is subordinated in right of payment to the Notes, such Permitted
Refinancing Indebtedness has a final maturity date later than the final
maturity date of, and is subordinated in right of payment to, the Notes on
terms at least as favorable to the Holders of Notes as those contained in the
documentation governing the Indebtedness being extended, refinanced, renewed,
replaced, defeased or refunded; and (iv) such Indebtedness is incurred either
by the Company or by the Restricted Subsidiary who is the obligor on the
Indebtedness being extended, refinanced, renewed, replaced, defeased or
refunded.

          “Person” means any
individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization, limited
liability company or government or other entity.

          “Principals” means
executive officers of the Company as of the date
hereof.

          “Rating Agency” means each
of S&P and Moody’s, or if S&P or Moody’s or
both shall not make a rating on the notes publicly available, a nationally
recognized statistical rating agency or agencies, as the case may be, selected
by the Company (as certified by a resolution of its Board of Directors) which
shall be substituted for S&P or Moody’s or both, as the case may be.

          “Rating Date” means the
date which is 90 days prior to the earlier of:

          (a) a Change of Control, and

          (b) public notice of the occurrence of
a Change of Control or of the
intention of the Company to effect a Change of Control.

15

 

          “Rating Decline” means the
occurrence of the following on, or within, 90
days before or after the earlier of: (i) the date of public notice of the
occurrence of a Change of Control or (ii) public notice of the intention of the
Company to effect a Change of Control (which 90-day period shall be extended so
long as the rating of the Notes is under publicly announced consideration for
possible downgrade by any of the Rating Agencies):

          (a) in the event the Notes are
assigned an Investment Grade Rating by both
Rating Agencies on the Rating Date, the rating of the Notes by one of the
Rating Agencies shall be below an Investment Grade Rating; or

          (b) in the event the Notes are rated
below an Investment Grade Rating by
at least one of the Rating Agencies on the Rating Date, the rating of the Notes
by at least one of the Rating Agencies shall be decreased by one or more
gradations (including gradations within rating categories as well as between
rating categories).

          “Related Party” with
respect to any Principal means (A) any spouse or
immediate family member of such Principal or (B) any trust, corporation,
partnership or other entity, the beneficiaries, stockholders, partners, owners
or Persons beneficially holding an 80% or more controlling interest of which
consist of such Principal and/or such other Persons referred to in the
immediately preceding clause (A).

          “Responsible Officer,”
when used with respect to the Trustee, means any
officer within the Corporate Trust Administration of the Trustee (or any
successor group of the Trustee) or any other officer of the Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of his knowledge of
and familiarity with the particular subject.

          “Restricted Investment”
means any Investment other than a Permitted
Investment.

          “Restricted Subsidiary” of
a Person means any Subsidiary of the referent
Person that is not an Unrestricted Subsidiary.

          “S&P’s” means
Standard & Poor’s Rating Group, Inc., or any successor to
the rating agency business thereof.

          “SEC” means the Securities
and Exchange Commission.

          “Securities Act” means the
Securities Act of 1933, as amended.

          “Significant Subsidiary”
means any Subsidiary that would be a “significant
subsidiary” as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated
pursuant to the Securities Act, as such Regulation is in effect on the date of
this Indenture.

16

 

          “Specified Subsidiaries”
means Newhall Funding Company, CL Hartford,
L.L.C., CL Power Sales Three, L.L.C., CP Power Sales Sixteen, L.L.C., PG Power
Sales Ones, L.L.C., PG Power Sales Two, L.L.C., PG Power Sales Three, L.L.C.,
PG Power Sales Four, L.L.C., PG Power Sales Five, L.L.C., PG Power Sales Six,
L.L.C., PG Power Sales Seven, L.L.C., PG Power Sales Eight, L.L.C., PG Power
Sales Nine, L.L.C., PG Power Sales Ten, L.L.C., PG Power Sales Eleven, L.L.C.,
PG Power Sales Twelve, L.L.C., PG Investments One, L.L.C., PG Investments Two,
L.L.C., PG Investments Three, L.L.C., PG Investments Four, L.L.C., PG
Investments Five, L.L.C., PG Investments Six, L.L.C., P&L Receivables Company,
LLC and United Minerals Company, LLC.

          “Stated Maturity” means,
with respect to any installment of interest or
principal on any series of Indebtedness, the date on which such payment of
interest or principal was scheduled to be paid in the original documentation
governing such Indebtedness, and shall not include any contingent obligations
to repay, redeem or repurchase any such interest or principal prior to the date
originally scheduled for the payment thereof.

          “Subsidiary” means, with
respect to any Person, (i) any corporation,
association or other business entity of which more than 50% of the total voting
power of shares of Capital Stock entitled (without regard to the occurrence of
any contingency) to vote in the election of directors, managers or trustees
thereof is at the time owned or controlled, directly or indirectly, by such
Person or one or more of the other Subsidiaries of that Person (or a
combination thereof) and (ii) any partnership (a) the sole general partner or
the managing general partner of which is such Person or a Subsidiary of such
Person or (b) the only general partners of which are such Person or of one or
more Subsidiaries of such Person (or any combination thereof).

          “Subsidiary Guarantee”
means the Guarantee of the notes by each of the
Subsidiary Guarantors pursuant to this Indenture and any additional Guarantee
of the notes to be executed by any Subsidiary of the Company pursuant to
Section 4.16.

          “Subsidiary Guarantors”
means all of the Company’s existing Domestic
Subsidiaries, except for the Specified Subsidiaries, and any other Subsidiary
that executes a Subsidiary Guarantee in accordance with the provisions of the
Indenture, and their respective successors and assigns.

          “TIA” means the Trust
Indenture Act of 1939 (15 U.S.C. §§ 77aaa- 77bbbb)
as in effect on the date on which this Indenture is qualified under the TIA.

          “Total Assets” means the
total assets of the Company and its Restricted
Subsidiaries on a consolidated basis determined in accordance with GAAP, as
shown on the most recently available consolidated balance sheet of the Company
and its Restricted Subsidiaries.

17

 

          “Treasury Rate” means the
yield to maturity at the time of the computation
of the United States Treasury securities with a constant maturity (as compiled
by and published in the most recent Federal Reserve Statistical Release
H.15(519), which has become publicly available at least two Business Days prior
to the date fixed for redemption (or if such Statistical Release is no longer
published, any publicly available source of similar market data)) most nearly
equal to the then remaining average life to April 15, 2009; provided, however,
that if the average life of such Note is not equal to the constant maturity of
the United States Treasury security for which weekly average yield is given,
the Treasury Rate shall be obtained by linear interpolation (calculated to the
nearest one-twelfth of a year) from the weekly average yields of United States
Treasury securities for which such yields are given, except that if the average
life of such Note is less than one year, the weekly average yield on actually
traded United States Treasury securities adjusted to a constant maturity of one
year shall be used.

          “Trustee” means the party
named as such above until a successor replaces
it in accordance with the applicable provisions of this Indenture and
thereafter means the successor serving hereunder.

          “Unrestricted Subsidiary”
means (i) the Specified Subsidiaries and (ii)
any Subsidiary that is designated by the Board of Directors as an Unrestricted
Subsidiary pursuant to a Board Resolution; but only to the extent that such
Person: (a) has no Indebtedness other than Non-Recourse Debt; (b) is not party
to any agreement, contract, arrangement or understanding with the Company or
any Restricted Subsidiary of the Company unless the terms of any such
agreement, contract, arrangement or understanding are no less favorable to the
Company or such Restricted Subsidiary than those that might be obtained at the
time from Persons who are not Affiliates of the Company; (c) is a Person with
respect to which neither the Company nor any of its Restricted Subsidiaries has
any obligation (x) to subscribe for additional Equity Interests in Unrestricted
Subsidiaries or (y) to maintain or preserve such Person’s net worth (except
with respect to Permitted Investments); and (d) has not guaranteed or otherwise
directly or indirectly provided credit support for any Indebtedness of the
Company or any of its Restricted Subsidiaries; provided, however, that the
Company and its Restricted Subsidiaries may guarantee the performance of
Unrestricted Subsidiaries in the ordinary course of business except for
guarantees of Obligations in respect of borrowed money. Any such designation
by the Board of Directors shall be evidenced to the Trustee by filing with the
Trustee a certified copy of the Board Resolution giving effect to such
designation and an Officer’s Certificate certifying that such designation
complied with the foregoing conditions and was permitted by Section 4.07
hereof.

          “U.S. Person” means a U.S.
person as defined in Rule 902(k) under the
Securities Act.

          “Voting Stock” of any
Person as of any date means the Capital Stock of
such Person that is at the time entitled to vote in the election of the Board
of Directors of such Person.

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          “Weighted Average Life to
Maturity” means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (i) the sum
of the products obtained by multiplying (a) the amount of each then remaining
installment, sinking fund, serial maturity or other required payments of
principal, including payment at final maturity, in respect thereof, by (b) the
number of years (calculated to the nearest one-twelfth) that will elapse
between such date and the making of such payment, by (ii) the then outstanding
principal amount of such Indebtedness.

Section 1.02. Other Definitions.

	 	 	 	 	 
	 	 	Defined in
	Terms
	 	Section

	“Affiliate Transaction”
	 	 	4.11	 
	“Asset Sale Offer”
	 	 	3.09	 
	“Authentication Order”
	 	 	2.02	 
	“Benefited Party”
	 	 	9.01	 
	“Change of Control Offer”
	 	 	4.15	 
	“Change of Control Payment”
	 	 	4.15	 
	“Change of Control Payment Date”
	 	 	4.15	 
	“Covenant Defeasance”
	 	 	7.03	 
	“Event of Default”
	 	 	6.01	 
	“Excess Proceeds”
	 	 	4.10	 
	“incur”
	 	 	4.09	 
	“Investment Grade Date”
	 	 	4.18	 
	“Legal Defeasance”
	 	 	7.02	 
	“Make Whole Premium”
	 	 	3.07	 
	“Offer Amount”
	 	 	3.09	 
	“Offer Period”
	 	 	3.09	 
	“Paying Agent”
	 	 	2.03	 
	“Permitted Debt”
	 	 	4.09	 
	“Purchase Date”
	 	 	3.09	 
	“Registrar”
	 	 	2.03	 
	“Restricted Payments”
	 	 	4.07	 

Section 1.03. Incorporation by Reference of Trust Indenture Act.

          Whenever this Indenture refers to a
provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture.

          The following TIA terms used in this
Indenture have the following
meanings:

          “Indenture securities”
means the Notes;

          “Indenture security
Holder” means a Holder of a Note;

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          “Indenture to be
qualified” means this Indenture;

          “Indenture Trustee” or
“institutional Trustee” means the Trustee; and

          “obligor” on the Notes and
the Subsidiary Guarantees means the Company and
the Subsidiary Guarantors, respectively, and any successor obligor upon the
Notes and the Subsidiary Guarantees, respectively.

          All other terms used in this Indenture that
are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule under the
TIA have the meanings so assigned to them.

Section 1.04. Rules of Construction.

          Unless the context otherwise requires:

          (1) a term has the meaning assigned to
it;

          (2) an accounting term not otherwise
defined has the meaning assigned to
it in accordance with GAAP;

          (3) “or” is not exclusive;

          (4) words in the singular include the
plural, and in the plural include
the singular;

          (5) provisions apply to successive
events and transactions; and

          (6) references to sections of or rules
under the Securities Act shall be
deemed to include substitute, replacement or successor sections or rules
adopted by the SEC from time to time.

Section 1.05. Miscellaneous.

          Without implied limitation, it is hereby
expressly acknowledged that the
Trustee shall have and enjoy the protections, immunities, rights and
indemnities set forth in Article Six of the Base Indenture, in connection with
the administration of, and performance under, the First Supplemental Indenture,
all of the terms of which remain in full force and effect.

20

 

ARTICLE II

THE NOTES

Section 2.01. Form and Dating.

          (a) General. The Notes
and the Trustee’s certificate of authentication
shall be substantially in the form of Exhibit A hereto, which is hereby
incorporated in and expressly made part of this Indenture. The Notes may have
notations, legends or endorsements required by law, stock exchange rule or
usage. Each Note shall be dated the date of its authentication. The Notes
shall be in denominations of $1,000 and integral multiples thereof. The terms
and provisions contained in the Notes shall constitute, and are hereby
expressly made, a part of this Indenture and the Company, the Subsidiary
Guarantors and the Trustee, by their execution and delivery of this Indenture,
expressly agree to such terms and provisions and to be bound thereby. However,
to the extent any provision of any Note conflicts with the express provisions
of this Indenture, the provisions of this Indenture shall govern and be
controlling.

          (b) Form of Notes. The
Notes shall be issued initially in global form and
shall be substantially in the form of Exhibit A attached hereto (including the
Global Note Legend thereon and the “Schedule of Exchanges of Interests in the
Global Note” attached thereto). Notes issued in definitive form shall be
substantially in the form of Exhibit A attached hereto (but without the Global
Note Legend thereon and without the “Schedule of Exchanges of Interests in the
Global Note” attached thereto). Each Global Note shall represent such of the
outstanding Notes as shall be specified therein and each shall provide that it
shall represent the aggregate principal amount of outstanding Notes from time
to time endorsed thereon and that the aggregate principal amount of outstanding
Notes represented thereby may from time to time be reduced or increased, as
appropriate, to reflect exchanges and redemptions. Any endorsement of a Global
Note to reflect the amount of any increase or decrease in the aggregate
principal amount of outstanding Notes represented thereby shall be made by the
Trustee or the Custodian, at the direction of the Trustee, in accordance with
instructions given by the Holder thereof as required by Section 2.06 hereof.

          (c) Book-Entry Provisions.
This Section 2.01(c) shall only apply to
Global Notes deposited with the Trustee, as custodian for the Depositary.
Participants and Indirect Participants shall have no rights under this
Indenture with respect to any Global Note held on their behalf by the
Depositary or by the Trustee as the custodian for the Depositary or under such
Global Note, and the Depositary shall be treated by the Company, the Trustee
and any agent of the Company or the Trustee as the absolute owner of such
Global Note for all purposes whatsoever. Notwithstanding the foregoing,
nothing herein shall prevent the Company, the Trustee or any agent of the
Company or the Trustee from giving effect to any written certification, proxy
or other authorization furnished by the Depositary or impair, as between the
Depositary and its Participants or Indirect Participants, the Applicable
Procedures or the operation of customary practices

21

 

of the Depositary governing the exercise of the
rights of a holder of a
beneficial interest in any Global Note.

Section 2.02. Execution and Authentication.

          (a) One Officer shall sign the Notes
for the Company by manual or
facsimile signature.

          (b) If an Officer whose signature is
on a Note no longer holds that office
at the time a Note is authenticated, the Note shall nevertheless be valid.

          (c) A Note shall not be valid until
authenticated by the manual signature
of the Trustee. The signature shall be conclusive evidence that the Note has
been authenticated under this Indenture.

          (d) The Trustee shall, upon a written
order of the Company signed by an
Officer (an “Authentication Order”), authenticate Notes for original issue.

          (e) The Trustee may appoint an
authenticating agent acceptable to the
Company to authenticate Notes. An authenticating agent may authenticate Notes
whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as an Agent to deal with Holders or an
Affiliate of the Company.

          (f) The Company may issue an unlimited
amount of Additional Notes from
time to time after the offering of the Initial Notes, subject to Section 4.09
hereof. The Initial Notes and any Additional Notes subsequently issued under
this Indenture shall be treated as a single class for all purposes under this
Indenture, including, without limitation, waivers, amendments, redemptions and
offers to purchase.

Section 2.03. Registrar and Paying Agent.

          (a) The Company shall maintain an
office or agency where Notes may be
presented for registration of transfer or for exchange (“Registrar”) and an
office or agency where Notes may be presented for payment (“Paying Agent”).
The Registrar shall keep a register of the Notes and of their transfer and
exchange. The Company may appoint one or more co-Registrars and one or more
additional paying agents. The term “Registrar” includes any co-Registrar and
the term “Paying Agent” includes any additional paying agent. The Company may
change any Paying Agent or Registrar without notice to any Holder. The Company
shall notify the Trustee in writing of the name and address of any Agent not a
party to this Indenture. If the Company fails to appoint or maintain another
entity as Registrar or Paying Agent, the Trustee shall act as such. The
Company or any of its Subsidiaries may act as Paying Agent or Registrar.

          (b) The Company initially appoints The
Depository Trust Company (“DTC”) to
act as Depositary with respect to the Global Notes.

22

 

          (c) The Company initially appoints the
Trustee to act as the Registrar and
Paying Agent and to act as Custodian with respect to the Global Notes.

Section 2.04. Paying Agent to Hold Money in Trust

          The Company shall require each Paying Agent
other than the Trustee to
agree in writing that the Paying Agent will hold in trust for the benefit of
Holders or the Trustee all money held by the Paying Agent for the payment of
principal, premium or interest on the Notes, and will notify the Trustee of any
default by the Company in making any such payment. While any such default
continues, the Trustee may require a Paying Agent to pay all money held by it
to the Trustee. The Company at any time may require a Paying Agent to pay all
money held by it to the Trustee. Upon payment over to the Trustee, the Paying
Agent (if other than the Company or a Subsidiary) shall have no further
liability for the money. If the Company or a Subsidiary acts as Paying Agent,
it shall segregate and hold in a separate trust fund for the benefit of the
Holders all money held by it as Paying Agent. Upon any bankruptcy or
reorganization proceedings relating to the Company, the Trustee shall serve as
Paying Agent for the Notes.

Section 2.05. Holder Lists.

          (a) The Trustee shall preserve in as
current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
all Holders and shall otherwise comply with TIA § 312(a). If the Trustee is
not the Registrar, the Company shall furnish to the Trustee at least seven
Business Days before each interest payment date and at such other times as the
Trustee may request in writing, a list in such form and as of such date as the
Trustee may reasonably require of the names and addresses of the Holders of
Notes and the Company shall otherwise comply with TIA § 312(a).

Section 2.06. Transfer and Exchange.

          (a) Transfer and Exchange of
Global Notes. A Global Note may not be
transferred as a whole except by the Depositary to a nominee of the Depositary,
by a nominee of the Depositary to the Depositary or to another nominee of the
Depositary, or by the Depositary or any such nominee to a successor Depositary
or a nominee of such successor Depositary. All Global Notes will be exchanged
by the Company for Definitive Notes if (1) the Company delivers to the Trustee
notice from the Depositary that it is unwilling or unable to continue to act as
Depositary or that it is no longer a clearing agency registered under the
Exchange Act and, in either case, a successor Depositary is not appointed by
the Company within 120 days after the date of such notice from the Depositary
or (2) the Company in its sole discretion determines that the Global Notes (in
whole but not in part) should be exchanged for Definitive Notes and deliver a
written notice to such effect to the Trustee. Upon the occurrence of any of
the preceding events in (1) or (2) above, Definitive Notes shall be issued in
denominations of $1,000 or integral multiples thereof and in such names as the
Depositary shall instruct the Trustee. Global Notes also may be exchanged or
replaced, in whole or in part, as provided in

23

 

Sections 3.06 and Section 3.07 of the
Base Indenture. Every Note
authenticated and delivered in exchange for, or in lieu of, a Global Note or
any portion thereof, pursuant to this Section 2.06 or Sections 3.06 or Section
3.07 of the Base Indenture, shall be authenticated and delivered in the form
of, and shall be, a Global Note. A Global Note may not be exchanged for
another Note other than as provided in this Section 2.06(a), however,
beneficial interests in a Global Note may be transferred and exchanged as
provided in Section 2.06(b) or (c) hereof.

          (b) Transfer and Exchange of
Beneficial Interests in the Global Notes.
The transfer and exchange of beneficial interests in the Global Notes shall be
effected through the Depositary, in accordance with the provisions of this
Indenture and the Applicable Procedures.

          Beneficial interests in any Global Note may
be transferred to Persons who
take delivery thereof in the form of a beneficial interest in a Global Note, in
accordance with the Applicable Procedures. No written orders or instructions
shall be required to be delivered to the Registrar to effect the transfers
described in this Section 2.06(b).

          (c) Transfer or Exchange of
Beneficial Interests for Definitive Notes. The
holder of a beneficial interest in a Global Note may exchange such beneficial
interest for a Definitive Note or transfer such beneficial interest to a Person
who takes delivery thereof in the form of a Definitive Note only in which event
such owner of such beneficial interest shall instruct the Depository (or shall
cause the appropriate participant to direct the Depository) in accordance with
the Applicable Procedures to instruct the Trustee to reduce the aggregate
principal amount of the Global Note by the applicable amount of such exchange
or transfer and to issue in exchange therefore a Definitive Note or Notes in
such aggregate amount and registered as provided in such instruction; and upon
the Trustee’s receipt of such instruction from the Depository (or from the
applicable Participant or beneficial owner pursuant to the Depository’s proxy
procedures), the Trustee to, and the Trustee shall, cause the aggregate
principal amount of the applicable Global Note to be reduced accordingly
pursuant to Section 2.06(g) hereof, and the Company shall execute and the
Trustee shall authenticate and deliver, in both cases in accordance with
Section 2.02 hereof, to the Person designated in such instruction a Definitive
Note in the appropriate principal amount. Any Definitive Note issued in
exchange for a beneficial interest pursuant to this Section 2.06(c) shall be
registered in such name or names and in such authorized denomination or
denominations as the holder of such beneficial interest shall instruct the
Registrar through instructions from the Depositary and the Participant or
Indirect Participant. The Trustee shall mail or deliver such Definitive Notes
to the Persons in whose names such Notes are so registered

          (d) Transfer and Exchange of
Definitive Notes for Beneficial Interests. A
Holder of a Definitive Note may exchange such Note for a beneficial interest in
a Global Note or transfer such Definitive Notes to a Person who takes delivery
thereof in the form of a beneficial interest in a Global Note at any time.
Upon receipt of a written request for such an exchange or transfer together
with surrender of the Definitive Note to be exchanged or transferred, (and,
accompanied by a written instrument or instruments of

24

 

transfer as provided in Section 2.06(e)
hereof, and subject to the
Applicable Procedures, the Trustee shall cancel the applicable Definitive Note
and increase or cause to be increased the aggregate principal amount of one of
the Global Notes pursuant to Section 2.06(g) hereof.

          (e) Transfer and Exchange of
Definitive Notes for Definitive Notes. Upon
request by a Holder of Definitive Notes and such Holder’s compliance with the
provisions of this Section 2.06(e), the Registrar shall register the transfer
or exchange of Definitive Notes. Prior to such registration of transfer or
exchange, the requesting Holder shall present or surrender to the Registrar the
Definitive Notes duly endorsed or accompanied by a written instruction of
transfer in form satisfactory to the Registrar duly executed by such Holder or
by its attorney, duly authorized in writing.

          (f) Global Note
Legend. Each Global Note shall bear a legend in
substantially the following form:

          “THIS GLOBAL NOTE IS HELD BY THE
DEPOSITARY (AS DEFINED IN THE INDENTURE
GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE
BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY
CIRCUMSTANCES EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY
BE REQUIRED PURSUANT TO SECTION 2.06 OF THE FIRST SUPPLEMENTAL INDENTURE, (II)
THIS GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION
2.06(a) OF THE FIRST SUPPLEMENTAL INDENTURE, (III) THIS GLOBAL NOTE MAY BE
DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 3.10 OF THE BASE
INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR
DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY.

          UNLESS THIS NOTE IS PRESENTED BY AN
AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE COMPANY OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY
AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR
TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC),
ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY
PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN
INTEREST HEREIN.”

          (g) Cancellation and/or
Adjustment of Global Notes. At such time as all
beneficial interests in a particular Global Note have been exchanged for
Definitive Notes or a particular Global Note has been redeemed, repurchased or
cancelled in whole and not in part, each such Global Note shall be returned to
or retained and cancelled by

25

 

the Trustee in accordance with Section 3.10 of
the Base Indenture. At any
time prior to such cancellation, if any beneficial interest in a Global Note is
exchanged for or transferred to a Person who will take delivery thereof in the
form of a beneficial interest in another Global Note or for Definitive Notes,
the principal amount of Notes represented by such Global Note shall be reduced
accordingly and an endorsement shall be made on such Global Note by the Trustee
or by the Depositary at the direction of the Trustee to reflect such reduction;
and if the beneficial interest is being exchanged for or transferred to a
Person who will take delivery thereof in the form of a beneficial interest in
another Global Note, such other Global Note shall be increased accordingly and
an endorsement shall be made on such Global Note by the Trustee or by the
Depositary at the direction of the Trustee to reflect such increase.

          (h) General Provisions Relating
to Transfers and Exchanges.

               (i) To
permit registrations of transfers and exchanges, the Company shall
execute Global Notes and Definitive Notes, and the Trustee shall authenticate
Global Notes and Definitive Notes upon the Company’s order(including an
Authentication Order given pursuant to Section 2.02) or at the Registrar’s
request (in connection with any transfer or exchange of Notes pursuant to this
Section 2.06).

               (ii) No
service charge shall be made to a Holder of a beneficial interest
in a Global Note or to a Holder of a Definitive Note for any registration of
transfer or exchange, but the Company may require payment of a sum sufficient
to cover any transfer tax or similar governmental charge payable in connection
therewith (other than any such transfer taxes or similar governmental charge
payable upon exchange or transfer pursuant to Sections 3.06, 3.09, 4.10, 4.15
and 8.05 hereof and Section 3.07 of the Base Indenture).

               (iii) All Global Notes and Definitive
Notes issued upon any registration
of transfer or exchange of Global Notes or Definitive Notes shall be the valid
obligations of the Company, evidencing the same debt, and entitled to the same
benefits under this Indenture, as the Global Notes or Definitive Notes
surrendered upon such registration of transfer or exchange.

               (iv) Neither the Registrar nor the Company
shall be required (A) to issue,
to register the transfer of or to exchange any Notes during a period beginning
at the opening of business 15 days before the day of any selection of Notes for
redemption under Section 3.02 hereof and ending at the close of business on the
day of selection, (B) to register the transfer of or to exchange any Note so
selected for redemption in whole or in part, except the unredeemed portion of
any Note being redeemed in part or (C) to register the transfer of or to

exchange a Note between a record date and the next succeeding Interest Payment
Date.

               (v) Prior to due presentment for the
registration of a transfer of any
Note, the Trustee, any Agent and the Company may deem and treat the Person in
whose name any Note is registered as the absolute owner of such Note for the
purpose of

26

 

receiving payment of principal of and interest on
such Notes and for all
other purposes, and none of the Trustee, any Agent or the Company shall be
affected by notice to the contrary.

               (vi) The
Trustee shall authenticate Global Notes and Definitive Notes in
accordance with the provisions of Section 2.02 hereof.

               (vii) All certifications, certificates and
Opinions of Counsel required to
be submitted to the Registrar pursuant to this Section 2.06 to effect a
registration of transfer or exchange may be submitted by facsimile.

               (viii) The Trustee is hereby authorized to
enter into a letter of
representation with the Depositary in the form provided by the Company and to
act in accordance with such letter.

          (ix) Notwithstanding anything
contained herein to the contrary, neither
the Trustee nor the Registrar shall be responsible for ascertaining whether any
purchase or transfer complies with the registration provisions of or exemptions
from the Securities Act or other state, federal securities laws that may be
applicable; provided, however, that if a certificate is specifically required
by the express terms of this Section 2.06 to be delivered to a Trustee by a
purchaser or required by the express terms of this Section 2.06 to be delivered
to a Trustee by a purchaser or transferee of a Note, the Trustee shall be under
a duty to receive and examine the same to determine whether it confirms on its
face to the requirements of this Section 2.06 and shall promptly notify the
party delivering the same if such transfer does not comply with such terms.

Section 2.07. Outstanding Notes

          (a) The Notes outstanding at any time
are all the Notes authenticated by
the Trustee except for those canceled by it, those delivered to it for
cancellation, those reductions in the interest in a Global Note effected by the
Trustee in accordance with the provisions hereof, and those described in this
Section as not outstanding. Except as set forth in Section 2.08 hereof, a Note
does not cease to be outstanding because the Company or an Affiliate of the
Company holds the Note.

          (b) If a Note is replaced pursuant to
Section 3.06 of the Base Indenture,
it ceases to be outstanding unless the Trustee receives proof satisfactory to
it that the replaced Note is held by a bona fide purchaser.

          (c) If the principal amount of any
Note is considered paid under Section
4.01 hereof, it ceases to be outstanding and interest on it ceases to accrue.

          (d) If the Paying Agent (other than
the Company, a Subsidiary or an
Affiliate of any thereof) holds, on a redemption date or maturity date, money
sufficient to

27

 

pay Notes payable on that date, then on and after
that date such Notes
shall be deemed to be no longer outstanding and shall cease to accrue interest.

Section 2.08. Treasury Notes

          In determining whether the Holders of the
required principal amount of
Notes have concurred in any direction, waiver or consent, Notes owned by the
Company, or by any Person directly or indirectly controlling or controlled by
or under direct or indirect common control with the Company, shall be
considered as though not outstanding, except that for the purposes of
determining whether the Trustee shall be protected in relying on any such
direction, waiver or consent, only Notes that a Responsible Officer of the
Trustee knows are so owned shall be so disregarded.

ARTICLE III

REDEMPTION AND PREPAYMENT

Section 3.01. Notices to Trustee.

          If the Company elects to redeem Notes
pursuant to the redemption
provisions of Section 3.07 hereof, it shall furnish to the Trustee, at least 45
days (unless a later date is agreed to by the Trustee at its option) but not
more than 60 days before a redemption date, an Officer’s Certificate setting
forth (i) the clause of this Indenture pursuant to which the redemption shall
occur, (ii) the redemption date, (iii) the principal amount of Notes to be
redeemed, (iv) the redemption price and (v) the CUSIP numbers of the Notes to
be redeemed.

Section 3.02. Selection of Notes to be Redeemed.

          If less than all of the Notes are to be
redeemed or purchased in an offer
to purchase at any time, the Trustee shall select the Notes to be redeemed or
purchased among the Holders of the Notes in compliance with the requirements of
the principal national securities exchange, if any, on which the Notes are
listed or, if the Notes are not so listed, on a pro rata basis, by lot or in
accordance with any other method the Trustee considers fair and appropriate
(subject in any case to the Applicable Procedures of the Depository, with
respect to any Global Notes). In the event of partial redemption by lot, the
particular Notes to be redeemed shall be selected, unless otherwise provided
herein (or as otherwise provided in the Applicable Procedures, if applicable),
not less than 30 nor more than 60 days prior to the redemption date by the
Trustee from the outstanding Notes not previously called for redemption.

          The Trustee shall promptly notify the
Company in writing of the Notes
selected for redemption and, in the case of any Note selected for partial
redemption, the principal amount thereof to be redeemed. Notes and portions of
Notes selected shall be in amounts of $1,000 or whole multiples of $1,000;
except that if all of the Notes of a Holder are to be redeemed, the entire
outstanding amount of Notes held by such Holder,

28

 

even if not a multiple of $1,000, shall be
redeemed. Except as provided
in the preceding sentence, provisions of this Indenture that apply to Notes
called for redemption also apply to portions of Notes called for redemption.

Section 3.03. Notice of
Redemption.

          Subject to the provisions of
Section 3.09 hereof, at least 30 days but not
more than 60 days before a redemption date, the Company shall mail or cause to
be mailed, by first class mail, a notice of redemption to each Holder whose
Notes are to be redeemed at its registered address, except that redemption
notices may be mailed more than 60 days prior to a redemption date if the
notice is issued in connection with a defeasance of the Notes pursuant to
Article VII hereof or a satisfaction and discharge of this Indenture pursuant
to Article IV of the Base Indenture.

          The notice shall identify the Notes to be
redeemed, including the CUSIP
numbers, and shall state:

          (a) the redemption date;

          (b) as applicable, the redemption
price pursuant to Section 3.07(c) or
(d), as the case may be, or if the redemption is made pursuant to Section
3.07(b) a calculation of the redemption price;

          (c) if any Note is being redeemed in
part, the portion of the principal
amount of such Note to be redeemed and that, after the redemption date upon
surrender of such Note, a new Note or Notes in principal amount equal to the
unredeemed portion shall be issued upon cancellation of the original Note;

          (d) the name and address of the Paying
Agent;

          (e) that Notes called for redemption
must be surrendered to the Paying
Agent to collect the redemption price;

          (f) that, unless the Company defaults
in making such redemption payment
and interest, if any, on Notes called for redemption ceases to accrue on and
after the redemption date;

          (g) the paragraph of the Notes or
Section of this First Supplemental
Indenture pursuant to which the Notes called for redemption are being redeemed;
and

          (h) that no representation is made as
to the correctness or accuracy of
the CUSIP number, if any, listed in such notice or printed on the Notes.

          At the Company’s request, the Trustee
shall give the notice of redemption
in the Company’s name and at its expense; provided, however, that the Company
shall have delivered to the Trustee, at least 45 days, or such shorter period
allowed by the Trustee, prior to the redemption date, an Officer’s Certificate
requesting that the Trustee

29

 

give such notice and setting forth the information
to be stated in such
notice as provided in this Section 3.03.

Section 3.04. Effect of
Notice of Redemption.

          Once notice of redemption is mailed in
accordance with Section 3.03
hereof, Notes called for redemption become irrevocably due and payable on the
redemption date at the redemption price. A notice of redemption may not be
conditional.

Section 3.05. Deposit of Redemption Price.

          One Business Day prior to the redemption
date, the Company shall deposit
with the Trustee or with the Paying Agent money sufficient to pay the
redemption price of and accrued interest on all Notes to be redeemed on that
date. The Trustee or the Paying Agent shall promptly return to the Company any
money deposited with the Trustee or the Paying Agent by the Company in excess
of the amounts necessary to pay the redemption price of, and accrued interest
on, all Notes to be redeemed.

          If the Company complies with the provisions
of the preceding paragraph, on
and after the redemption date, interest shall cease to accrue on the Notes or
the portions of Notes called for redemption. If a Note is redeemed on or after
an interest record date but on or prior to the related interest payment date,
then any accrued and unpaid interest shall be paid to the Person in whose name
such Note was registered at the close of business on such record date. If any
Note called for redemption shall not be so paid upon surrender for redemption
because of the failure of the Company to comply with the preceding paragraph,
interest shall be paid on the unpaid principal, from the redemption date until
such principal is paid, and to the extent lawful on any interest not paid on
such unpaid principal, in each case at the rate provided in the Notes and in
Section 4.01 hereof.

Section 3.06. Notes Redeemed in Part.

          Upon surrender of a Note that is redeemed
in part, the Company shall issue
and, upon the Company’s written request, the Trustee shall authenticate for the
Holder at the expense of the Company a new Note equal in principal amount to
the unredeemed portion of the Note surrendered.

Section 3.07. Optional Redemption.

          (a) The Notes will be subject to
redemption at any time at the option of
the Company, in whole or in part, upon not less than 30 nor more than 60 days’
notice to Holders.

          (b) Prior to April 15, 2009, the
Notes will be redeemable at a redemption
price equal to 100% of the principal amount thereof plus the applicable Make
Whole Premium, plus, to the extent not included in the Make Whole Premium,
accrued

30

 

and unpaid interest, if any, to the date of
redemption. For purposes of
the foregoing, “Make Whole Premium” means, with respect to a Note, an amount
equal to the excess of (1) the present value of the remaining interest,
premium, if any, and principal payments due on such Note as if such Note were
redeemed on April 15, 2009, computed using a discount rate equal to the
Treasury Rate plus 50 basis points, over (2) the outstanding principal amount
of such Note.

          (c) On or after April 15, 2009,
the Notes will be redeemable at the
redemption prices (expressed as percentages of principal amount) set forth
below plus accrued and unpaid interest thereon to the applicable redemption
date, if redeemed during the twelve-month period beginning on April 15 of the
years indicated below:

	 	 	 	 	 
	Year	 	Percentage
	2009
	 	 	102.938	%
	2010
	 	 	101.958	%
	2011
	 	 	100.979	%
	2012 and thereafter
	 	 	100.000	%

          (d) Notwithstanding the provisions of
clauses (a), (b) and (c) of this
Section 3.07, during the first 36 months after the date hereof, the Company may
on any one or more occasions redeem up to 35% of the aggregate principal amount
of Notes issued under this Indenture at a redemption price of 105.875% of the
principal amount thereof, plus accrued and unpaid interest thereon, if any, to
the redemption date, with the net cash proceeds of one or more Equity
Offerings; provided that at least 65% of the aggregate principal amount of
Notes issued remain outstanding immediately after the occurrence of such
redemption (excluding Notes held by the Company and its Subsidiaries); and
provided, further, that such redemption shall occur within 120 days of the date
of the closing of such Equity Offering.

          (e) Any redemption pursuant to this
Section 3.07 shall be made pursuant to
the provisions of Section 3.01 through 3.06 hereof.

Section 3.08. Mandatory Redemption.

          The Company shall not be required to make
mandatory redemption or sinking
fund payments with respect to the Notes.

Section 3.09. Offer to Purchase by Application of Excess Proceeds.

          In the event that, pursuant to
Section 4.10 hereof, the Company shall be
required to commence an offer to all Holders to purchase Notes (an “Asset Sale
Offer”), it shall follow the procedures specified below.

          The Asset Sale Offer shall remain open for
a period of 20 Business Days
following its commencement and no longer, except to the extent that a longer
period is required by applicable law (the “Offer Period”). No later than five
Business Days after

31

 

the termination of the Offer Period (the
“Purchase Date”), the Company
shall purchase the principal amount of Notes required to be purchased pursuant
to Section 4.10 hereof (the “Offer Amount”) or, if less than the Offer Amount
has been tendered, all Notes tendered in response to the Asset Sale Offer.
Payment for any Notes so purchased shall be made in the same manner as interest
payments are made.

          If the Purchase Date is on or after an
interest record date and on or
before the related interest payment date, any accrued and unpaid interest shall
be paid to the Person in whose name a Note is registered at the close of
business on such record date, and no additional interest shall be payable to
Holders who tender Notes pursuant to the Asset Sale Offer.

          Upon the commencement of an Asset Sale
Offer, the Company shall send, by
first class mail, a notice to the Trustee and each of the Holders. The notice
shall contain all instructions and materials necessary to enable such Holders
to tender Notes pursuant to the Asset Sale Offer. The Asset Sale Offer shall
be made to all Holders. The notice, which shall govern the terms of the Asset
Sale Offer, shall state:

               (i) that
the Asset Sale Offer is being made pursuant to this Section 3.09
and Section 4.10 hereof and the length of time the Asset Sale Offer shall
remain open;

               (ii) the
Offer Amount, the purchase price and the Purchase Date;

               (iii) that any Note not tendered or
accepted for payment shall continue to
accrete or accrue interest;

               (iv) that, unless the Company defaults in
making such payment, any Note
accepted for payment pursuant to the Asset Sale Offer shall cease to accrete or
accrue interest after the Purchase Date;

               (v) that
Holders electing to have a Note purchased pursuant to an Asset
Sale Offer may only elect to have all of such Note purchased and may not elect
to have only a portion of such Note purchased;

               (vi) that Holders electing to have a Note
purchased pursuant to any Asset
Sale Offer shall be required to surrender the Note, with the form entitled
“Option of Holder to Elect Purchase” on the reverse of the Note completed, or
transfer by book-entry transfer, to the Company, a depositary, if appointed by
the Company, or a Paying Agent at the address specified in the notice at least
three days before the Purchase Date;

               (vii) that Holders shall be entitled to
withdraw their election if the
Company, the depositary or the Paying Agent, as the case may be, receives, not
later than the expiration of the Offer Period, a telegram, telex, facsimile
transmission or letter

32

 

setting forth the name of the Holder, the principal
amount of the Note the
Holder delivered for purchase and a statement that such Holder is withdrawing
his election to have such Note purchased;

               (viii) that, if the aggregate principal
amount of Notes surrendered by
Holders exceeds the Offer Amount, the Company shall select the Notes to be
purchased on a pro rata basis (with such adjustments as may be deemed
appropriate by the Company so that only Notes in denominations of $1,000, or
integral multiples thereof, shall be purchased); and

               (ix) that Holders whose Notes were
purchased only in part shall be issued
new Notes equal in principal amount to the unpurchased portion of the Notes
surrendered (or transferred by book-entry transfer).

          On or before the Purchase Date, the Company
shall, to the extent lawful,
accept for payment, on a pro rata basis to the extent necessary, the Offer
Amount of Notes or portions thereof tendered pursuant to the Asset Sale Offer,
or if less than the Offer Amount has been tendered, all Notes tendered, and
shall deliver to the Trustee an Officer’s Certificate stating that such Notes
or portions thereof were accepted for payment by the Company in accordance with
the terms of this Section 3.09. The Company, the Depositary or the Paying
Agent, as the case may be, shall promptly (but in any case not later than five
days after the Purchase Date) mail or deliver to each tendering Holder an
amount equal to the purchase price of the Notes tendered by such Holder and
accepted by the Company for purchase, and the Company shall promptly issue a
new Note, and the Trustee, upon written request from the Company shall
authenticate and mail or deliver such new Note to such Holder, in a principal
amount equal to any unpurchased portion of the Note surrendered. Any Note not
so accepted shall be promptly mailed or delivered by the Company to the Holder
thereof. The Company shall publicly announce the results of the Asset Sale
Offer on the Purchase Date.

          Other than as specifically provided in this
Section 3.09, any purchase
pursuant to this Section 3.09 shall be made pursuant to the provisions of
Sections 3.01 through 3.06 hereof.

ARTICLE IV

COVENANTS

Section 4.01. Payment of Notes.

          The Company or a Subsidiary Guarantor shall
pay or cause to be paid the
principal of, premium, if any, and interest, if any, on the Notes on the dates
and in the manner provided in the Notes. Principal, premium, if any, and
interest, if any, shall be considered paid on the date due if the Paying Agent,
if other than the Company or a Subsidiary thereof, holds as of 10:00 a.m.
Eastern Time on the due date money deposited

33

 

by the Company in immediately available funds and
designated for and
sufficient to pay all principal, premium, if any, and interest, if any, then
due.

          The Company or a Subsidiary Guarantor shall
pay interest (including
post-petition interest in any proceeding under any Bankruptcy Law) on overdue
principal at the rate equal to the then applicable interest rate on the Notes
to the extent lawful; it shall pay interest (including postpetition interest in
any proceeding under any Bankruptcy Law) on overdue installments of interest
(without regard to any applicable grace period) at the same rate to the extent
lawful.

          Interest shall be computed on the basis of
a 360-day year of twelve 30-day
months.

Section 4.02. Maintenance of Office or Agency.

          The Company shall maintain in the Borough
of Manhattan, the City of New
York, an office or agency (which may be an office of the Trustee or an
affiliate of the Trustee, Registrar or co-Registrar) where Notes may be
surrendered for registration of transfer or for exchange and where notices and
demands to or upon the Company in respect of the Notes and this Indenture may
be served. The Company shall give prompt written notice to the Trustee of the
location, and any change in the location, of such office or agency. If at any
time the Company shall fail to maintain any such required office or agency or
shall fail to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the Corporate Trust
Office of the Trustee.

          The Company may also from time to time
designate one or more other offices
or agencies where the Notes may be presented or surrendered for any or all such
purposes and may from time to time rescind such designations; provided,
however, that no such designation or rescission shall in any manner relieve the
Company of its obligation to maintain an office or agency in the Borough of
Manhattan, the City of New York for such purposes. The Company shall give
prompt written notice to the Trustee of any such designation or rescission and
of any change in the location of any such other office or agency.

          The Company hereby designates the office of
the Trustee located at 100
Wall Street, Suite 1600, New York, New York 10005 as one such office or agency
of the Company in accordance with Section 2.03.

Section 4.03. Reports.

          Whether or not required by the rules and
regulations of the SEC, so long
as any Notes are outstanding, the Company shall furnish to the Holders of Notes
(i) all quarterly and annual financial information that would be required to be
contained in a filing with the SEC on Forms 10-Q and 10-K if the Company were
required to file such forms, including a “Management’s Discussion and Analysis
of Financial Condition and

34

 

Results of Operations” that describes the
financial condition and results of
operations of the Company and its consolidated Subsidiaries (showing in
reasonable detail, either on the face of the financial statements or in the
footnotes thereto and in Management’s Discussion and Analysis of Financial
Condition and Results of Operations, the financial condition and results of
operations of the Company and its Restricted Subsidiaries separate from the
financial condition and results of operations of the Unrestricted Subsidiaries
of the Company) and, with respect to the annual information only, a report
thereon by the Company’s certified independent accountants and (ii) all current
reports that would be required to be filed with the SEC on Form 8-K if the
Company were required to file such reports, in each case, within the time
periods specified in the SEC’s rules and regulations. In addition, whether or
not required by the rules and regulations of the SEC, the Company shall file a
copy of all such information and reports with the SEC for public availability
within the time periods specified in the SEC’s rules and regulations (unless
the SEC will not accept such a filing) and make such information available to
securities analysts and prospective investors upon request. The Company shall
at all times comply with TIA § 314(a).

Section 4.04. Compliance
Certificate.

          (a) The Company and each Subsidiary
Guarantor (to the extent that such
Subsidiary Guarantor is so required under the TIA) shall deliver to the
Trustee, within 90 days after the end of each fiscal year, an Officer’s
Certificate stating that a review of the activities of the Company and its
Subsidiaries during the preceding fiscal year has been made under the
supervision of the signing Officers with a view to determining whether the
Company has kept, observed, performed and fulfilled its obligations under this
Indenture, and further stating, as to each such Officer signing such
certificate, that to the best of his or her knowledge the Company has kept,
observed, performed and fulfilled each and every covenant contained in this
Indenture and is not in default in the performance or observance of any of the
terms, provisions and conditions of this Indenture (or, if a Default or Event
of Default shall have occurred, describing all such Defaults or Events of
Default of which he or she may have knowledge and what action the Company is
taking or proposes to take with respect thereto) and that to the best of his or
her knowledge no event has occurred and remains in existence by reason of which
payments on account of the principal of or interest, if any, on the Notes is
prohibited or if such event has occurred, a description of the event and what
action the Company is taking or proposes to take with respect thereto.

          (b) So long as not contrary to the
then current recommendations of the
American Institute of Certified Public Accountants, the year-end financial
statements delivered pursuant to Section 4.03(a) above shall be accompanied by
a written statement of the Company’s independent public accountants (who shall
be a firm of established national reputation) that in making the examination
necessary for certification of such financial statements, nothing has come to
their attention that would lead them to believe that the Company has violated
any provisions of Article IV or Article V hereof or, if any such violation has
occurred, specifying the nature and period of existence thereof, it

35

 

being understood that such accountants shall not be
liable directly or
indirectly to any Person for any failure to obtain knowledge of any such
violation.

          (c) The Company shall, so long as any
of the Notes are outstanding,
deliver to the Trustee, as soon as possible, but in no event later than five
days after any Officer becoming aware of (i) any Default or Event of Default,
an Officer’s Certificate specifying such Default or Event of Default and what
action the Company is taking or proposes to take with respect thereto; and (ii)
any Registration Default, an Officer’s Certificate specifying such Registration
Default, the date thereof and the action the Company is taking or proposing to
take in respect thereof.

Section 4.05. Taxes.

          The Company shall pay, and shall cause each
of its Subsidiaries to pay,
prior to delinquency, all material taxes, assessments, and governmental levies
except such as are contested in good faith and by appropriate proceedings or
where the failure to effect such payment is not adverse in any material respect
to the Holders of the Notes.

Section 4.06. Stay, Extension and Usury Laws.

          The Company and each of the Subsidiary
Guarantors covenants (to the extent
that it may lawfully do so) that it shall not at any time insist upon, plead,
or in any manner whatsoever claim or take the benefit or advantage of, any
stay, extension or usury law wherever enacted, now or at any time hereafter in
force, that may affect the covenants or the performance of this Indenture; and
the Company and each of the Subsidiary Guarantors (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such
law, and covenants that it shall not, by resort to any such law, hinder, delay
or impede the execution of any power herein granted to the Trustee, but shall
suffer and permit the execution of every such power as though no such law has
been enacted.

Section 4.07. Restricted Payments.

          The Company shall not, and shall not permit
any of its Restricted
Subsidiaries to, directly or indirectly: (i) declare or pay any dividend or
make any other payment or distribution on account of the Company’s or any of
its Restricted Subsidiaries’ Equity Interests (including, without limitation,
any payment in connection with any merger or consolidation involving the
Company or any of its Restricted Subsidiaries) or to the direct or indirect
holders of the Company’s or any of its Restricted Subsidiaries’ Equity
Interests in their capacity as such (other than dividends or distributions
payable in Equity Interests (other than Disqualified Stock) of the Company);
(ii) purchase, redeem or otherwise acquire or retire for value (including,
without limitation, in connection with any merger or consolidation involving
the Company) any Equity Interests of the Company or any direct or indirect
parent of the Company; (iii) make any payment on or with respect to, or
purchase, redeem, defease or otherwise acquire or retire for value any
Indebtedness that is subordinated to the Notes or any

36

 

Subsidiary Guarantee,
except a payment of interest or principal at Stated Maturity or Indebtedness
permitted under clause (vii) of Section 4.09 hereof or (iv) make any Restricted
Investment (all such payments and other actions set forth in clauses (i)
through (iv) above being collectively referred to as “Restricted Payments”),
unless, at the time of and after giving effect to such Restricted Payment:

          (a) no Default or Event of Default
shall have occurred and be continuing
or would occur as a consequence thereof; and

          (b) the Company would, at the time of
such Restricted Payment and after
giving pro forma effect thereto as if such Restricted Payment had been made at
the beginning of the applicable four-quarter period, have been permitted to
incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge
Coverage Ratio test set forth in Section 4.09 hereof; and

          (c) such Restricted Payment, together
with the aggregate amount of all
other Restricted Payments made by the Company and its Subsidiaries after May
18, 1998 (excluding Restricted Payments permitted by clauses (ii), (iii), (iv),
(v), (ix) and (x) of the next succeeding paragraph), is less than the sum,
without duplication, of (i) 50% of the Consolidated Net Income of the Company
for the period (taken as one accounting period) from the beginning of the first
fiscal quarter commencing after May 18, 1998 to the end of the Company’s most
recently ended fiscal quarter for which internal financial statements are
available at the time of such Restricted Payment (or, if such Consolidated Net
Income for such period is a deficit, less 100% of such deficit), plus (ii) 100%
of the aggregate net cash proceeds received by the Company (including the fair
market value of any Permitted Business or assets used or useful in a Permitted
Business to the extent acquired in consideration of Equity Interests (other
than Disqualified Stock) of the Company) since May 18, 1998 as a contribution
to its common equity capital or from the issue or sale of Equity Interests of
the Company (other than Disqualified Stock and other than sales to a Subsidiary
of the Company) or from the issue or sale of convertible or exchangeable
Disqualified Stock or convertible or exchangeable debt securities of the
Company that have been converted into or exchanged for such Equity Interests
(other than Disqualified Stock or debt securities sold to a Subsidiary of the
Company), plus (iii) to the extent that any Restricted Investment that reduced
the amount available for Restricted Payments under this clause (c) is sold for
cash or otherwise liquidated or repaid for cash or any dividend or payment is
received by the Company or a Restricted Subsidiary after May 18, 1998 in
respect of such Investment, 100% of the amount of Net Proceeds or dividends or
payments (including the fair market value of property) received in connection
therewith, up to the amount of the Restricted Investment that reduced this
clause (c), as the case may be, and thereafter 50% of the amount of Net
Proceeds or dividends or payments (including the fair market value of property)
received in connection therewith (except that the amount of dividends or
payments received in respect of payments of Obligations in respect of such
Investments, such as taxes, shall not increase the amounts under this clause
(c)), plus (iv) to the extent that any Unrestricted Subsidiary of the Company
is redesignated as a Restricted Subsidiary after the date hereof, 100% of the
fair market value of the Company’s Investment in such Subsidiary as

37

 

of the date of such redesignation up to the amount
of the Restricted
Investments made in such Subsidiary that reduced this clause (c) and 50% of the
excess of the fair market value of the Company’s Investment in such Subsidiary
as of the date of such redesignation over (1) the amount of the Restricted
Investment that reduced this clause (c) and (2) any amounts that increased the
amount available as a Permitted Investment; provided, further, that any amounts
that increase this clause (c) shall not duplicatively increase amounts
available as Permitted Investments.

          The foregoing provisions will not prohibit:

          (i) the payment of any
dividend within 60 days after the date of
declaration thereof, if at said date of declaration such payment would
have complied with the provisions of the this Indenture;

          (ii) the redemption,
repurchase, retirement, defeasance or other
acquisition of any subordinated Indebtedness or Equity Interests of the
Company in exchange for, or out of the net cash proceeds of the
substantially concurrent sale (other than to a Restricted Subsidiary of
the Company) of, other Equity Interests of the Company (other than any
Disqualified Stock); provided that the amount of any such net cash
proceeds that are utilized for any such redemption, repurchase,
retirement, defeasance or other acquisition shall be excluded from clause
(c)(ii) of the preceding paragraph;

          (iii) the defeasance,
redemption, repurchase or other acquisition of
subordinated Indebtedness with the net cash proceeds from an incurrence
of Permitted Refinancing Indebtedness;

          (iv) dividends or
distributions by a Restricted Subsidiary of the
Company so long as, in the case of any dividend or distribution payable
on or in respect of any class or series of securities issued by a
Restricted Subsidiary, the Company or a Restricted Subsidiary receives at
least its pro rata share of such dividend or distribution in accordance
with its Equity Interests in such class or series of securities;

          (v) Investments in
Unrestricted Subsidiaries having an aggregate
fair market value not to exceed the amount, at the time of such
Investment, substantially concurrently contributed in cash or Cash
Equivalents to the common equity capital of the Company after the date
hereof; provided that any such amount contributed shall be excluded from
the calculation made pursuant to clause (c) above;

          (vi) the payment of
dividends on the Company’s Common Stock in an
amount which, when combined with all such dividends, does not exceed
$35.0 million in the aggregate in any calendar year;

38

 

          (vii) the repurchase,
redemption or other acquisition or retirement
for value of any Equity Interests of the Company or any Restricted
Subsidiary of the Company held by any present or former employee or
director of the Company (or any of its Restricted Subsidiaries) pursuant
to any management equity subscription agreement or stock option agreement
or any other management or employee benefit plan in effect as of the date
hereof; provided that (A) the aggregate price paid for all such
repurchased, redeemed, acquired or retired Equity Interests shall not
exceed $5.0 million in any twelve-month period (with unused amounts in
any calendar year being carried over to succeeding calendar years subject
to a maximum (without giving effect to the following proviso) of $10.0
million in any calendar year); provided further that such amount in any
calendar year may be increased by an amount not to exceed (x) the cash
proceeds from the sale of Equity Interests of the Company or a Restricted
Subsidiary to members of management and directors of the Company and its
Subsidiaries that occurs after the date hereof, plus (y) the cash
proceeds of key- man life insurance policies received by the Company and
its Restricted Subsidiaries after the date hereof, less (z) the amount of
any Restricted Payments previously made pursuant to clauses (x) and (y)
of this subparagraph (vii) and, provided further, that cancellation of
Indebtedness owing to the Company from members of management of the
Company or any of its Restricted Subsidiaries in connection with a
repurchase of Equity Interests of the Company or a Restricted Subsidiary
will not be deemed to constitute a Restricted Payment for purposes of
this covenant or any other provision of this Indenture and (B) no Default
or Event of Default shall have occurred and be continuing immediately
after such transaction;

          (viii) repurchases of
Equity Interests deemed to occur upon exercise
of stock options if such Equity Interests represent a portion of the
exercise price of such options;

          (ix) the repurchase,
redemption or other acquisition or retirement
for value of the 5% Subordinated Note; and

          (x) other Restricted
Payments not otherwise prohibited by this
Section 4.07 in an aggregate amount not to exceed $25.0 million under
this clause (x).

          As of the date hereof, all of the
Company’s Subsidiaries, other than the
Specified Subsidiaries, are Restricted Subsidiaries. The Board of Directors
may designate any Restricted Subsidiary to be an Unrestricted Subsidiary if
such designation would not cause a Default. For purposes of making such
determination, all outstanding Investments by the Company and its Restricted
Subsidiaries (except to the extent repaid in cash) in the Subsidiary so
designated shall be deemed to be Restricted Payments at the time of such
designation and will reduce the amount available for Restricted Payments under
the first paragraph of this Section 4.07. All such outstanding Investments
shall be deemed to constitute Investments in an amount equal to the fair market
value of such

39

 

Investments at the time of such designation. Such
designation will only
be permitted if such Restricted Payment would be permitted at such time and if
such Restricted Subsidiary otherwise meets the definition of an Unrestricted
Subsidiary.

          If, at any time, any Unrestricted
Subsidiary would fail to meet the
requirements in the definition of “Unrestricted Subsidiary” as an Unrestricted
Subsidiary, it shall thereafter cease to be an Unrestricted Subsidiary for
purposes of this Indenture and any Indebtedness of such Subsidiary shall be
deemed to be incurred by a Restricted Subsidiary of the Company as of such date
(and, if such Indebtedness is not permitted to be incurred as of such date
under Section 4.09 hereof, the Company shall be in default of such covenant).
The Board of Directors of the Company may at any time designate any
Unrestricted Subsidiary to be a Restricted Subsidiary; provided that such
designation shall be deemed to be an incurrence of Indebtedness by a Restricted
Subsidiary of the Company of any outstanding Indebtedness of such Unrestricted
Subsidiary and such designation shall only be permitted if (i) such
Indebtedness is permitted under Section 4.09 hereof, calculated on a pro forma
basis as if such designation had occurred at the beginning of the four-quarter
reference period, and (ii) no Default or Event of Default would be in existence
following such designation.

          The amount of all Restricted Payments
(other than cash) shall be the fair
market value on the date of the Restricted Payment of the asset(s) or
securities proposed to be transferred or issued by the Company or such
Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment.
The fair market value of any noncash Restricted Payment or any adjustment made
pursuant to paragraph (c) of this Section 4.07 shall be determined by the Board
of Directors whose resolution with respect thereto shall be delivered to the
Trustee, such determination to be based upon an opinion or appraisal issued by
an accounting, appraisal or investment banking firm of national standing if
such fair market value exceeds $25.0 million. Not later than the date of
making any Restricted Payment, the Company shall deliver to the Trustee an
Officer’s Certificate stating that such Restricted Payment is permitted and
setting forth the basis upon which the calculations required by this Section
4.07 were computed.

          If any Restricted Investment is sold or
otherwise liquidated or repaid or
any dividend or payment is received by the Company or a Restricted Subsidiary
and such amounts may be credited to clause (c) above, then such amounts will be
credited only to the extent of amounts not otherwise included in Consolidated
Net Income and that do not otherwise increase the amount available as a
Permitted Investment.

Section 4.08. Dividend and Other Payment Restrictions Affecting Restricted
Subsidiaries.

          The Company shall not, and shall not permit
any of its Restricted
Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to
exist or become effective any encumbrance or restriction on the ability of any
Restricted Subsidiary that is not a Subsidiary Guarantor to (i)(a) pay
dividends or make any other distributions to the Company or any of its
Restricted Subsidiaries (1) on its Capital Stock

40

 

or (2) with respect to any other interest or
participation in, or measured
by, its profits, or (b) pay any indebtedness owed to the Company or any of its
Restricted Subsidiaries, (ii) make loans or advances to the Company or any of
its Restricted Subsidiaries or (iii) transfer any of its properties or assets
to the Company or any of its Restricted Subsidiaries. However, the foregoing
restrictions will not apply to encumbrances or restrictions existing under or
by reason of (a) Existing Indebtedness as in effect on the date hereof, (b) the
Credit Agreement, (c) this Indenture, the Notes and the Subsidiary Guarantees,
(d) applicable law or any applicable rule, regulation or order, (e) any
instrument governing Indebtedness or Capital Stock of a Person acquired by the
Company or any of its Restricted Subsidiaries as in effect at the time of such
acquisition (except to the extent such Indebtedness was incurred in connection
with or in contemplation of such acquisition), which encumbrance or restriction
is not applicable to any Person, or the properties or assets of any Person,
other than the Person, or the property or assets of the Person, so acquired,
provided that, in the case of Indebtedness, such Indebtedness was permitted by
the terms of this Indenture to be incurred, (f) customary non-assignment
provisions in leases and other agreements entered into in the ordinary course
of business and consistent with past practices, (g) purchase money obligations
for property acquired in the ordinary course of business that impose
restrictions of the nature described in clause (iii) above on the property so
acquired, (h) any agreement for the sale of a Restricted Subsidiary that
restricts distributions by that Restricted Subsidiary pending its sale, (i)
Permitted Refinancing Indebtedness, provided that the restrictions contained in
the agreements governing such Permitted Refinancing Indebtedness are no more
restrictive, taken as a whole, than those contained in the agreements governing
the Indebtedness being refinanced, (j) secured Indebtedness otherwise permitted
to be incurred pursuant to the provisions of Section 4.12 hereof that limits
the right of the debtor to dispose of the assets securing such Indebtedness,
(k) provisions with respect to the disposition or distribution of assets or
property in joint venture agreements and other similar agreements entered into
in the ordinary course of business, (l) restrictions on cash or other deposits
or net worth imposed by customers or lessors under contracts or leases entered
into in the ordinary course of business and (m) any encumbrances or
restrictions imposed by any amendments, modifications, restatements, renewals,
increases, supplements, refundings, replacements or refinancings of the
contracts, instruments or obligations referred to in clauses (a) through (l)
above, provided that such amendments, modifications, restatements, renewals,
increases, supplements, refundings, replacements or refinancings are, in the
good faith judgment of the Company’s Board of Directors, not materially more
restrictive in the aggregate with respect to such dividend and other payment
restrictions than those (considered as a whole) contained in the dividend or
other payment restrictions prior to such amendment, modification, restatement,
renewal, increase, supplement, refunding, replacement or refinancing.

Section 4.09. Incurrence of Indebtedness and Issuance of Preferred Stock.

          The Company shall not, and shall not permit any
of its Subsidiaries to,
directly or indirectly, create, incur, issue, assume, guarantee or otherwise
become directly

41

 

or indirectly liable, contingently or otherwise, with respect to
(collectively, “incur” ) any Indebtedness (including Acquired Debt) and the
Company shall not issue any Disqualified Stock and shall not permit any of its
Subsidiaries to issue any shares of preferred stock; provided, however, that
the Company may incur Indebtedness (including Acquired Debt) or issue shares of
Disqualified Stock and the Company’s Restricted Subsidiaries may incur
Indebtedness or issue Disqualified Stock or preferred stock if the Fixed Charge
Coverage Ratio for the Company’s most recently ended four full fiscal quarters
for which internal financial statements are available immediately preceding the
date on which such additional Indebtedness is incurred or such Disqualified
Stock or preferred stock is issued would have been at least 2.0 to 1.0,
determined on a pro forma basis (including a pro forma application of the net
proceeds therefrom), as if the additional Indebtedness had been incurred, or
the Disqualified Stock or preferred stock had been issued, as the case may be,
at the beginning of such four-quarter period.

          The provisions of the first paragraph of this Section 4.09 will not
prohibit the incurrence of any of the following items of Indebtedness
(collectively, “Permitted Debt”):

          (i) the incurrence by the Company of additional Indebtedness under
any Credit Facilities (and the Guarantee thereof by the Subsidiary
Guarantors); provided that the aggregate principal amount of all
Indebtedness outstanding under this clause (i) after giving effect to
such incurrence does not exceed an amount equal to $1,850.0 million;
provided, however, that such amount shall be reduced by the amount of
Acquisition Term Loan Commitments (as defined in the Credit Agreement)
not funded by June 9, 2004; provided further that the amount of
Indebtedness permitted to be incurred under this clause (i) shall not be
less than $1,350.0 million;

          (ii) the incurrence by the Company and its Restricted Subsidiaries
of the Existing Indebtedness;

          (iii) the incurrence by the Company and the Subsidiary Guarantors of
Indebtedness represented by the notes issued pursuant to this offering;

          (iv) (A) the Guarantee by the Company or any of the Subsidiary
Guarantors of Indebtedness of the Company or a Restricted Subsidiary of
the Company or (B) the incurrence of Indebtedness of a Restricted
Subsidiary to the extent that such Indebtedness is supported by a letter
of credit, in each case that was permitted to be incurred by another
provision of this covenant;

          (v) the incurrence by the Company or any of its Restricted
Subsidiaries of Indebtedness (including Capital Lease Obligations) to
finance the acquisition (including by direct purchase, by lease or
indirectly by the acquisition of the Capital Stock of a Person that
becomes a Restricted Subsidiary as a result of such acquisition) or
improvement of property (real or personal) in an aggregate

42

 

principal amount which, when aggregated with the principal amount of
all other Indebtedness then outstanding pursuant to this clause (v) and
including all Permitted Refinancing Indebtedness incurred to refund,
refinance or replace any Indebtedness incurred pursuant to this clause
(v), does not exceed an amount equal to 5% of Total Assets at the time of
such incurrence;

          (vi) the incurrence by the Company or any of its Restricted
Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or
the net proceeds of which are used to refund, refinance or replace
Indebtedness (other than intercompany Indebtedness) that was permitted by
this Indenture to be incurred under the first paragraph hereof or clauses
(ii), (iii) or (vi) of this paragraph;

          (vii) the incurrence by the Company or any of its Restricted
Subsidiaries of intercompany Indebtedness between or among the Company
and any of its Restricted Subsidiaries; provided, however, that (i) if
the Company is the obligor on such Indebtedness, such Indebtedness is
expressly subordinated to the prior payment in full in cash of all
Obligations with respect to the Notes and (ii)(A) any subsequent issuance
or transfer of Equity Interests that results in any such Indebtedness
being held by a Person other than the Company or a Restricted Subsidiary
thereof and (B) any sale or other transfer of any such Indebtedness to a
Person that is not either the Company or a Restricted Subsidiary thereof
shall be deemed, in each case, to constitute an incurrence of such
Indebtedness by the Company or such Restricted Subsidiary, as the case
may be, that was not permitted by this clause (vii);

          (viii) the incurrence by the Company or any of its Restricted
Subsidiaries of Hedging Obligations that are incurred in the ordinary
course of business for the purpose of risk management and not for the
purpose of speculation;

          (ix) the incurrence by the Company’s Unrestricted Subsidiaries of
Non-Recourse Debt, provided, however, that if any such Indebtedness
ceases to be Non-Recourse Debt of an Unrestricted Subsidiary, such event
shall be deemed to constitute an incurrence of Indebtedness by a
Restricted Subsidiary of the Company that was not permitted by this
clause (ix), and the issuance of preferred stock by Unrestricted
Subsidiaries;

          (x) the incurrence of Indebtedness solely in respect of performance,
surety and similar bonds and letters of credit or completion or
performance guarantees (including, without limitation, performance
guarantees pursuant to coal supply agreements or equipment leases), to
the extent that such incurrence does not result in the incurrence of any
obligation for the payment of borrowed money to others;

43

 

          (xi) the incurrence of Indebtedness arising from agreements of the
Company or a Restricted Subsidiary providing for indemnification,
adjustment of purchase price or similar obligations, in each case,
incurred or assumed in connection with the disposition of any business,
assets or a Subsidiary; provided, however that (i) such Indebtedness is
not reflected on the balance sheet of the Company or any Restricted
Subsidiary (contingent obligations referred to in a footnote to financial
statements and not otherwise reflected on the balance sheet will not be
deemed to be reflected on such balance sheet for purposes of this clause
(i)) and (ii) the maximum assumable liability in respect of all such
Indebtedness shall at no time exceed the gross proceeds including noncash
proceeds (the fair market value of such noncash proceeds being measured
at the time received and without giving effect to any subsequent changes
in value) actually received by the Company and its Restricted
Subsidiaries in connection with such disposition; and

          (xii) the incurrence by the Company or any of its Restricted
Subsidiaries of additional Indebtedness in an aggregate principal amount
(or accreted value, as applicable) at any time outstanding, including all
Permitted Refinancing Indebtedness incurred to refund, refinance or
replace any Indebtedness incurred pursuant to this clause (xii), not to
exceed $350.0 million.

          The Company shall not incur, and shall not permit its Restricted
Subsidiaries to incur, any Indebtedness (including Permitted Debt) that is
contractually subordinated in right of payment to any other Indebtedness of the
Company or such Restricted Subsidiary unless such Indebtedness is also
contractually subordinated in right of payment to the Notes, or the Subsidiary
Guarantees, as the case may be, on substantially identical terms; provided,
however, that no Indebtedness of the Company or any Restricted Subsidiary shall
be deemed to be contractually subordinated in right of payment to any other
Indebtedness of the Company or any Restricted Subsidiary solely by virtue of
being unsecured.

          For purposes of determining compliance with this Section 4.09, in the
event that an item of proposed Indebtedness, including Acquired Debt, meets the
criteria of more than one of the categories of Permitted Debt described in
clauses (i) through (xii) above or is entitled to be incurred pursuant to the
first paragraph of this Section 4.09, the Company shall, in its sole
discretion, classify or reclassify such item of Indebtedness in any manner that
complies with this Section 4.09. For the purposes of determining compliance
with any dollar-denominated restriction on the incurrence of Indebtedness
denominated in a foreign currency, the dollar-equivalent principal amount of
such Indebtedness incurred pursuant thereto shall be calculated based on the
relevant currency exchange rate in effect on the date that such Indebtedness
was incurred. Accrual of interest, accretion or amortization of original issue
discount, the payment of interest on any Indebtedness in the form of additional
Indebtedness with the same terms, and the payment of dividends on Disqualified
Stock in the form of additional shares of the same class of Disqualified Stock
will not be deemed to be an incurrence of Indebtedness or an

44

 

issuance of Disqualified Stock for purposes of this Section 4.09;
provided, in each such case, that the amount thereof is included in Fixed
Charges of the Company as accrued.

Section 4.10. Asset Sales.

          The Company will not, and will not permit any of its Restricted
Subsidiaries to, consummate an Asset Sale unless (i) the Company (or the
Restricted Subsidiary, as the case may be) receives consideration at the time
of such Asset Sale at least equal to the fair market value as determined in
good faith by the Company of the assets or Equity Interests issued or sold or
otherwise disposed of and (ii) at least 75% of the consideration therefore
received by the Company or such Subsidiary is in the form of cash, Cash
Equivalents or Marketable Securities; provided that the following amounts shall
be deemed to be cash: (w) any liabilities (as shown on the Company’s or such
Restricted Subsidiary’s most recent balance sheet), of the Company or any
Restricted Subsidiary (other than contingent liabilities and liabilities that
are by their terms subordinated to the Notes or any guarantee thereof) that are
assumed by the transferee of any such assets pursuant to a customary novation
agreement that releases the Company or such Restricted Subsidiary from further
liability, (x) any securities, notes or other obligations received by the
Company or any such Restricted Subsidiary from such transferee that are
converted by the Company or such Restricted Subsidiary into cash within 180
days following the closing of such Asset Sale (to the extent of the cash
received), (y) any Designated Noncash Consideration received by the Company or
any of its Restricted Subsidiaries in such Asset Sale; provided that the
aggregate fair market value (as determined above) of such Designated Noncash
Consideration, taken together with the fair market value at the time of receipt
of all other Designated Noncash Consideration received pursuant to this clause
(y) less the amount of Net Proceeds previously realized in cash from prior
Designated Noncash Consideration is less than 10% of Total Assets at the time
of the receipt of such Designated Noncash Consideration (with the fair market
value of each item of Designated Noncash Consideration being measured at the
time received and without giving effect to subsequent changes in value) and (z)
Additional Assets received in an exchange of assets transaction.

          Within 360 days after the receipt of any cash Net Proceeds from an Asset
Sale, the Company or such Restricted Subsidiary, at its option, may apply such
cash Net Proceeds, at its option, (a) to repay Indebtedness of the Company or
any Restricted Subsidiary that is not subordinated in right of payment to
Indebtedness under a Credit Facility, (b) to the acquisition of a majority of
the assets of, or a majority of the Voting Stock of, another Permitted
Business, the making of a capital expenditure or the acquisition of other
assets or Investments that are used or useful in a Permitted Business or (c) to
apply the cash Net Proceeds from such Asset Sale to an Investment in Additional
Assets. Any cash Net Proceeds from Asset Sales that are not applied or
invested as provided in the first sentence of this paragraph will be deemed to
constitute “Excess Proceeds.” When the aggregate amount of Excess Proceeds
exceeds $20.0 million, the Company will be required to make an offer to all
Holders of Notes and all holders of other Indebtedness that ranks equally with
the Notes containing provisions similar to those set forth herein with respect
to offers to purchase or redeem with the proceeds of

45

 

sales of assets (an “Asset Sale Offer”) to purchase the maximum principal
amount of Notes and such other Indebtedness that may be purchased out of the
Excess Proceeds, at an offer price in cash in an amount equal to 100% of the
principal amount thereof plus accrued and unpaid interest thereon, if any, to
the date of purchase, in accordance with the procedures set forth herein and
such other Indebtedness. To the extent that any Excess Proceeds remain after
consummation of an Asset Sale Offer, the Company may use such Excess Proceeds
for any purpose not otherwise prohibited by this Indenture. If the aggregate
principal amount of Notes and such other Indebtedness tendered into such Asset
Sale Offer surrendered by Holders thereof exceeds the amount of Excess
Proceeds, the Trustee shall select the Notes and such other Indebtedness to be
purchased on a pro rata basis. Upon completion of such offer to purchase, the
amount of Excess Proceeds shall be reset at zero.

          The Company will comply with the requirements of Rule 14e-1 under the
Exchange Act and any other securities laws and regulations thereunder to the
extent those laws and regulations are applicable in connection with each
repurchase of notes pursuant to an Asset Sale Offer. To the extent that the
provisions of any securities laws or regulations conflict with the Asset Sale
provisions of this First Supplemental Indenture, the Company will comply with
the applicable securities laws and regulations and will not be deemed to have
breached its obligations under the Asset Sale provisions of the First
Supplemental Indenture by virtue of such conflict.

Section 4.11. Transactions With Affiliates.

          The Company will not, and will not permit any of its Restricted
Subsidiaries to, make any payment to, or sell, lease, transfer or otherwise
dispose of any of its properties or assets to, or purchase any property or
assets from, or enter into or make or amend any transaction, contract,
agreement, understanding, loan, advance or guarantee with, or for the benefit
of, any Affiliate (each, an “Affiliate Transaction”), unless:

          (i) the Affiliate Transaction is on terms that are materially no
less favorable to the Company or the relevant Restricted Subsidiary than
those that would have been obtained in a comparable transaction by the
Company or such Restricted Subsidiary with an unrelated Person; and

          (ii) the Company delivers to the Trustee:

	 	(a)	 	with respect to any Affiliate
Transaction or series of related Affiliate
Transactions involving aggregate consideration in
excess of $15.0 million, a resolution of the Board of
Directors set forth in an Officer’s Certificate
certifying that such Affiliate Transaction complies
with clause (i) above and that such Affiliate
Transaction has been approved by a majority of the
disinterested members of the Board of Directors; and

46

 

	 	(b)	 	with respect to any Affiliate
Transaction or series of related Affiliate
Transactions involving aggregate consideration in
excess of $25.0 million, an opinion as to the fairness
to the Holders of such Affiliate Transaction from a
financial point of view issued by an accounting,
appraisal or investment banking firm of national
standing.

          Notwithstanding the foregoing, the following items shall not be deemed to
be Affiliate Transactions: (i) any employment agreement or other compensation
plan or arrangement for employees entered into by the Company or any of its
Restricted Subsidiaries in the ordinary course of business and consistent with
the past practice of the Company or such Restricted Subsidiary; (ii)
transactions between or among the Company and/or its Restricted Subsidiaries,
(iii) payment of reasonable fees to officers, directors, employees or
consultants of the Company; (iv) Restricted Payments that are permitted by, and
Investments that are not prohibited by, Section 4.07 hereof; (v)
indemnification payments made to officers, directors and employees of the
Company or any Restricted Subsidiary pursuant to charter, bylaw, statutory or
contractual provisions; (vi) the payment of customary annual management,
consulting and advisory fees and related expenses to Lehman Merchant Bank and
its Affiliates; (vii) payments by the Company or any of its Restricted
Subsidiaries to Lehman Merchant Bank and its Affiliates made for any financial
advisory, financing, underwriting or placement services or in respect of other
investment banking activities, including, without limitation, in connection
with acquisitions or divestitures which payments are approved by a majority of
the Board of Directors of the Company in good faith; (viii) the existence of,
or the performance by the Company or any of its Restricted Subsidiaries of its
obligations under the terms of, any stockholders’ agreement (including any
registration rights agreement or purchase agreement related thereto) to which
it is a party as of the date hereof and any similar agreements which it may
enter into thereafter; provided, however, that the existence of, or the
performance by the Company or any of its Restricted Subsidiaries of obligations
under any future amendment to any such existing agreement or under any similar
agreement entered into after the date hereof shall only be permitted by this
clause (viii) to the extent that the terms of any such amendment or new
agreement are not otherwise disadvantageous to the Holders in any material
respect; (ix) transactions with Unrestricted Subsidiaries, customers, clients,
suppliers, joint venture partners or purchasers or sellers of goods or
services, in each case in the ordinary course of business (including, without
limitation, pursuant to joint venture agreements) and otherwise in compliance
with the terms of this Indenture which are, in the aggregate (taking into
account all the costs and benefits associated with such transactions),
materially no less favorable to the Company or its Restricted Subsidiaries than
those that would have been obtained in a comparable transaction by the Company
or such Restricted Subsidiary with an unrelated Person, in the reasonable
determination of the Board of Directors of the Company or the senior management
thereof, or are on terms at least as favorable as might reasonably have been
obtained at such time from an unaffiliated party; (x) guarantees of performance
by the Company and its Restricted Subsidiaries of Unrestricted Subsidiaries in
the ordinary course of business, except for guarantees of Obligations in
respect of

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borrowed money; and (xi) pledges of Equity Interests of Unrestricted
Subsidiaries for the benefit of lenders of Unrestricted Subsidiaries.

Section 4.12. Liens.

          The Company will not and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, assume or otherwise
cause or suffer to exist or become effective with respect to any Indebtedness
any Lien of any kind (other than Permitted Liens) upon any of their property or
assets, now owned or hereafter acquired, unless all payments due under this
Indenture and the notes are secured on an equal and ratable basis (or, if the
Lien secured Indebtedness subordinated to the Notes or the Subsidiary
Guarantees, then senior to the obligations so secured) with the obligations so
secured until such time as such obligations are no longer secured by a Lien.

Section 4.13. Business Activities.

          The Company shall not, and shall not permit any Restricted Subsidiary to,
engage in any business other than Permitted Businesses, except to such extent
as would not be material to the Company and its Restricted Subsidiaries taken
as a whole.

Section 4.14. Corporate Existence.

          Subject to Article 5 hereof, the Company shall do or cause to be done all
things necessary to preserve and keep in full force and effect (i) its
corporate existence, and the corporate, partnership or other existence of each
of its Subsidiaries, in accordance with the respective organizational documents
(as the same may be amended from time to time) of the Company or any such
Subsidiary and (ii) the rights (charter and statutory), licenses and franchises
of the Company and its Subsidiaries; provided, however, that the Company shall
not be required to preserve any such right, license or franchise, or the
corporate, partnership or other existence of any of its Subsidiaries, if the
Board of Directors shall determine that the preservation thereof is no longer
desirable in the conduct of the business of the Company and its Subsidiaries,
taken as a whole, and that the loss thereof is not adverse in any material
respect to the Holders of the Notes.

Section 4.15. Offer To Repurchase Upon Change of Control Triggering Event.

          (a) Upon the occurrence of a Change of Control Triggering Event, each
Holder of Notes will have the right to require the Company to repurchase all or
any part (equal to $1,000 or an integral multiple thereof) of such Holder’s
Notes pursuant to the offer described below (the “Change of Control Offer”) at
an offer price in cash equal to 101% of the aggregate principal amount thereof
plus accrued and unpaid interest, if any, to the date of purchase (the “Change
of Control Payment”). Within ten days following any Change of Control
Triggering Event, the Company will mail a notice to each holder describing the
transaction or transactions that constitute the Change of Control Triggering
Event and offering to repurchase notes on the date specified in such notice,
which date shall be no earlier than 30 days and no later than 60 days from the
date

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such notice is mailed (the “Change of Control Payment Date”), pursuant to
the procedures required by the indenture and described in such notice. The
Company will comply with the requirements of Rule 14e-1 under the Exchange Act
and any other securities laws and regulations thereunder to the extent such
laws and regulations are applicable in connection with the repurchase of the
notes as a result of a Change of Control Triggering Event. To the extent that
the provisions of any securities laws or regulations conflict with the Change
of Control Triggering Event provisions of the indenture, the Company will
comply with the applicable securities laws and regulations and will not be
deemed to have breached its obligations under the Change of Control Triggering
Event provisions of this First Supplemental Indenture by virtue of such
conflict.

          (b) On the Change of Control Payment Date, the Company will, to the extent
lawful, (1) accept for payment all notes or portions thereof properly tendered
pursuant to the Change of Control Offer, (2) deposit with the paying agent an
amount equal to the Change of Control Payment in respect of all notes or
portions thereof so tendered and (3) deliver or cause to be delivered to the
Trustee the Notes so accepted together with an Officer’s Certificate stating
the aggregate principal amount of notes or portions thereof being purchased by
the Company. The Paying Agent will promptly mail to each Holder of Notes so
tendered the Change of Control Payment for such Notes, and the Trustee will
promptly authenticate and mail (or cause to be transferred by book entry) to
each holder a new note equal in principal amount to any unpurchased portion of
the notes surrendered, if any; provided that each such new Note will be in a
principal amount of $1,000 or an integral multiple thereof. Prior to complying
with the provisions of this covenant, but in any event within 90 days following
a Change of Control Triggering Event, the Company will either repay all
outstanding Senior Debt other than the Notes or obtain the requisite consents,
if any, under all agreements governing outstanding Senior Debt other than the
Notes to permit the repurchase of Notes required by this Section 4.15. The
Company will publicly announce the results of the Change of Control Offer on or
as soon as practicable after the Change of Control Payment Date.

          The Change of Control Triggering Event provisions described above shall be
applicable whether or not any other provisions of this Indenture are
applicable.

          (c) Notwithstanding anything to the contrary in this Section 4.15, the
Company will not be required to make a Change of Control Offer upon a Change of
Control Triggering Event if a third party makes the Change of Control Offer in
the manner, at the times and otherwise in compliance with the requirements set
forth herein applicable to a Change of Control Offer made by the Company and
purchases all Notes validly tendered and not withdrawn under such Change of
Control Offer or if the Company exercises its option to purchase the Notes.

Section 4.16. Additional Subsidiary Guarantees.

          If the Company or any of its Domestic Subsidiaries shall acquire or create
another Domestic Subsidiary after the date hereof and such Domestic Subsidiary
provides

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a guarantee under the Credit Agreement, then such newly acquired or
created Domestic Subsidiary shall execute a supplemental indenture in form and
substance substantially similar to Exhibit C hereto providing that such
Domestic Subsidiary shall become a Subsidiary Guarantor under this Indenture,
provided, however, this Section 4.16 shall not apply to any Domestic Subsidiary
that has been properly designated as an Unrestricted Subsidiary in accordance
with this Indenture for so long as it continues to constitute an Unrestricted
Subsidiary.

Section 4.17. Payments for Consents.

          The Company shall not, and shall not permit, any of its Restricted
Subsidiaries to, directly or indirectly, pay or cause to be paid any
consideration, whether by way of interest, fee or otherwise, to any Holder of
any Notes for or as an inducement to any consent, waiver or amendment of any of
the terms or provisions of this Indenture or the Notes unless such
consideration is offered to be paid or is paid to all Holders of the Notes that
consent, waive or agree to amend in the time frame set forth in the
solicitation documents relating to such consent, waiver or agreement.

Section 4.18. Covenant Termination.

          Upon the first date upon which the notes have an Investment Grade Rating
from both of the Rating Agencies and no Default or Event of Default has
occurred and is continuing under this First Supplemental Indenture (the
“Investment Grade Date”), the Company and its Restricted Subsidiaries will
cease to be subject to the provisions of this First Supplemental Indenture
described below, which will be deemed to be terminated as of and from such
date, under the following captions:

Section 4.07;

Section 4.08;

Section 4.09;

Section 4.10;

Section 4.11;

Section 4.13; and

Section 4.17;

provided, however, that the provisions of this First Supplemental Indenture
described below under the following captions will not be so terminated:

Section 4.03;

Section 4.12;

Section 4.15;

Section 4.16 (except as set forth in that Section); and

Section 5.01 (except as set forth in that Section).

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ARTICLE V

SUCCESSORS

Section 5.01. Merger, Consolidation or Sale of Assets.

          The Company shall not consolidate or merge with or into (whether or not
the Company is the surviving corporation), or sell, assign, transfer, lease,
convey or otherwise dispose of all or substantially all of its properties or
assets in one or more related transactions, to another corporation, Person or
entity unless (i) the Company is the surviving corporation or the entity or the
Person formed by or surviving any such consolidation or merger (if other than
the Company) or to which such sale, assignment, transfer, lease, conveyance or
other disposition shall have been made is a corporation organized or existing
under the laws of the United States, any state thereof or the District of
Columbia; (ii) the entity or Person formed by or surviving any such
consolidation or merger (if other than the Company) or the entity or Person to
which such sale, assignment, transfer, lease, conveyance or other disposition
shall have been made assumes all the obligations of the Company under the Notes
and this Indenture pursuant to a supplemental Indenture in a form reasonably
satisfactory to the Trustee; (iii) immediately after such transaction no
Default or Event of Default exists; and (iv) except in the case of a merger of
the Company with or into a Restricted Subsidiary of the Company, immediately
after giving pro forma effect to such transaction, as if such transaction had
occurred at the beginning of the applicable four-quarter period, (A) the entity
surviving such consolidation or merger would be permitted to incur at least
$1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio
test set forth in the first paragraph of Section 4.09 or (B) the Fixed Charge
Coverage Ratio for the Company or the entity or Person formed by or surviving
any such consolidation or merger (if other than the Company), or to which such
sale, assignment, transfer, lease, conveyance or other disposition shall have
been made would, immediately after giving pro forma effect thereto as if such
transaction had occurred at the beginning of the applicable four-quarter
period, would be not less than such Fixed Charge Coverage Ratio for the Company
and its Restricted Subsidiaries immediately prior to such transaction;
provided, however, that this clause (iv) shall no longer be applicable from and
after any Investment Grade Date. The Company may not, directly or indirectly,
lease all or substantially all of its properties or assets, in one or more
related transactions, to any other Person. The provisions of this Section 5.01
will not be applicable to a sale, assignment, transfer, conveyance or other
disposition of assets between or among the Company and its Restricted
Subsidiaries.

          Notwithstanding the foregoing clause (iv), (i) any Restricted Subsidiary
may consolidate with, merge into or transfer all or part of its properties and
assets to the Company and (ii) the Company may merge with an Affiliate that has
no significant assets or liabilities and was formed solely for the purpose of
changing the jurisdiction of organization of the Company in another State of
the United States or the form of organization of the Company so long as the
amount of Indebtedness of the Company and its Restricted Subsidiaries is not
increased thereby and provided that the successor

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assumes all the obligations of the Company under the Notes and this
Indenture pursuant to a supplemental indenture in a form reasonably
satisfactory to the Trustee.

Section 5.02. Successor Corporation Substituted.

          Upon any consolidation or merger, or any sale, assignment, transfer,
lease, conveyance or other disposition of all or substantially all of the
assets of the Company in accordance with Section 5.01 hereof, the successor
corporation formed by such consolidation or into or with which the Company is
merged or to which such sale, assignment, transfer, lease, conveyance or other
disposition is made shall succeed to, and be substituted for (so that from and
after the date of such consolidation, merger, sale, lease, conveyance or other
disposition, the provisions of this Indenture referring to the “Company” shall
refer instead to the successor corporation and not to the Company), and may
exercise every right and power of the Company under this Indenture with the
same effect as if such successor Person had been named as the Company herein;
provided, however, that the predecessor Company shall not be relieved from the
obligation to pay the principal of and interest on the Notes except in the case
of a sale of all of the Company’s assets that meets the requirements of Section
5.01 hereof.

ARTICLE VI

DEFAULTS AND REMEDIES

Section 6.01. Events of Default.

          An “Event of Default” with respect to the Notes (and for purposes of this
First Supplemental Indenture) occurs if:

          (a) the Company defaults in the payment when due of interest on the Notes
and such default continues for a period of 30 days;

          (b) the Company defaults in the payment when due of principal of or
premium, if any, on the Notes when the same becomes due and payable at
maturity, upon redemption (including in connection with an offer to purchase)
or otherwise;

          (c) the Company or any of its Subsidiaries fails to make the offer
required or to purchase any of the Notes as required by Sections 4.10 and/or
4.15 hereof;

          (d) the Company fails to comply for 30 days after written notice to the
Company by the Trustee with any of the provisions of Sections 4.07 or 4.09
hereof; or the Company fails to observe or perform any other covenant,
representation, warranty or other agreement in this Indenture or the Notes for
60 days after written notice to the Company by the Trustee or the Holders of at
least 25% in aggregate principal amount of the Notes then outstanding voting as
a single class;

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          (e) a default occurs under any mortgage, indenture or instrument under
which there may be issued or by which there may be secured or evidenced any
Indebtedness for money borrowed by the Company or any of its Restricted
Subsidiaries (or the payment of which is guaranteed by the Company or any of
the Restricted Subsidiaries), whether such Indebtedness or guarantee now
exists, or is created after the date of this First Supplemental Indenture,
which default results in the acceleration of such Indebtedness prior to its
express maturity and, in each case, the principal amount of such Indebtedness
aggregates $50.0 million or more;

          (f) a final judgment or final judgments for the payment of money are
entered by a court or courts of competent jurisdiction against the Company or
any of its Subsidiaries that are Restricted Subsidiaries or any group of
Restricted Subsidiaries that, taken as a whole, would constitute a Significant
Subsidiary and such judgment or judgments remain undischarged for a period
(during which execution shall not be effectively stayed) of 60 days, provided
that the aggregate of all such undischarged judgments exceeds $50.0 million;

          (g) the Company or any of its Significant Subsidiaries that are Restricted
Subsidiaries or any group of Restricted Subsidiaries that, taken as a whole,
would constitute a Significant Subsidiary pursuant to or within the meaning of
Bankruptcy Law:

          (i) commences a voluntary case,

          (ii) consents to the entry of an order for relief against it in an
involuntary case,

          (iii) consents to the appointment of a custodian of it or for all or
substantially all of its property,

          (iv) makes a general assignment for the benefit of its creditors, or

          (v) generally is not paying its debts as they become due; or

          (h) a court of competent jurisdiction enters an order or decree under any
Bankruptcy Law that:

          (i) is for relief against the Company or any of its Significant
Subsidiaries that are Restricted Subsidiaries or any group of Restricted
Subsidiaries that, taken as a whole, would constitute a Significant
Subsidiary in an involuntary case;

          (ii) appoints a custodian of the Company or any of its Significant
Subsidiaries that are Restricted Subsidiaries or any group of Restricted
Subsidiaries that, taken as a whole, would constitute a Significant
Subsidiary or

53

 

for all or substantially all of the property of the Company or any
of its Significant Subsidiaries that are Restricted Subsidiaries or any
group of Restricted Subsidiaries that, taken as a whole, would constitute
a Significant Subsidiary; or

          (iii) orders the liquidation of the Company or any of its
Significant Subsidiaries that are Restricted Subsidiaries or any group of
Restricted Subsidiaries that, taken as a whole, would constitute a
Significant Subsidiary;

and the order or decree remains unstayed and in effect for 60 consecutive
days; or

          (i) except as permitted by this Indenture, any Subsidiary Guarantee is
held in any judicial proceeding to be unenforceable or invalid or shall cease
for any reason to be in full force and effect or any Subsidiary Guarantor, or
any Person acting on behalf of any Subsidiary Guarantor, shall deny or
disaffirm its obligations under such Subsidiary Guarantor’s Subsidiary
Guarantee.

Section 6.02. Acceleration.

          If any Event of Default (other than an Event of Default specified in
clause (g) or (h) of Section 6.01 hereof with respect to the Company, any
Significant Subsidiary that is a Restricted Subsidiary or any group of
Restricted Subsidiaries that, taken as a whole, would constitute a Significant
Subsidiary) occurs and is continuing, the Trustee or the Holders of at least
25% in principal amount of the then outstanding Notes may declare all the Notes
to be due and payable immediately; provided, that so long as any Indebtedness
permitted to be incurred pursuant to the Credit Agreement shall be outstanding,
such acceleration shall not be effective until the earlier of (i) an
acceleration of any such Indebtedness under the Credit Agreement or (ii) five
Business Days after receipt by the Company of written notice of such
acceleration of the Notes. Upon any such declaration, the Notes shall become
due and payable immediately. Notwithstanding the foregoing, if an Event of
Default specified in clause (g) or (h) of Section 6.01 hereof occurs with
respect to the Company, any of its Significant Subsidiaries that are Restricted
Subsidiaries or any group of Restricted Subsidiaries that, taken as a whole,
would constitute a Significant Subsidiary, all outstanding Notes shall be due
and payable without further action or notice. The Holders of a majority in
aggregate principal amount of the then outstanding Notes by written notice to
the Trustee may on behalf of all of the Holders rescind an acceleration and its
consequences if the rescission would not conflict with any judgment or decree
and if all existing Events of Default (except nonpayment of principal, interest
or premium that has become due solely because of the acceleration) have been
cured or waived.

Section 6.03. Other Remedies.

          If an Event of Default occurs and is continuing, the Trustee may pursue
any available remedy to collect the payment of principal, premium, if any, and
interest, if any, on the Notes or to enforce the performance of any provision
of the Notes or this Indenture.

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          The Trustee may maintain a proceeding even if it does not possess any of
the Notes or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Holder of a Note in exercising any right or
remedy accruing upon an Event of Default shall not impair the right or remedy
or constitute a waiver of or acquiescence in the Event of Default. All
remedies are cumulative to the extent permitted by law.

Section 6.04. Waiver of Past Defaults.

          Holders of not less than a majority in aggregate principal amount of the
then outstanding Notes by written notice to the Trustee may on behalf of the
Holders of all of the Notes waive an existing Default or Event of Default and
its consequences hereunder, except a continuing Default or Event of Default in
the payment of the principal of, premium, if any, or interest on, the Notes;
provided, however, that after any acceleration, but before a judgment or decree
based on acceleration is obtained by the Trustee, the Holders of a majority in
aggregate principal amount of the Notes then outstanding may rescind and annul
such acceleration if all Events of Default, other than the nonpayment of
accelerated principal, premium, or interest, have been cured or waived as
provided in this Indenture. Upon any such waiver, such Default shall cease to
exist, and any Event of Default arising therefrom shall be deemed to have been
cured for every purpose of this Indenture; but no such waiver shall extend to
any subsequent or other Default or impair any right consequent thereon.

Section 6.05. Control by Majority.

          Subject to Section 6.01 of the Base Indenture, in case an Event of Default
shall occur and be continuing, the Trustee will be under no obligation to
exercise any of its rights or powers under this Indenture at the request or
direction of any of the Holders, unless such Holders shall have offered to the
Trustee reasonable indemnity against any loss, liability or expense. Subject
to Section 6.07 of the Base Indenture, the Holders of a majority in aggregate
principal amount of the Notes then outstanding will have the right to direct
the time, method and place of conducting any proceeding for exercising any
remedy available to the Trustee or exercising any trust or power conferred on
the Trustee with respect to the Notes. Notwithstanding the foregoing, the
Trustee may refuse to follow any direction that conflicts with law or this
Indenture that the Trustee determines may be unduly prejudicial to the rights
of other Holders of Notes or that may involve the Trustee in personal
liability.

Section 6.06. Limitation on Suits.

          A Holder of a Note may pursue a remedy with respect to this Indenture or
the Notes only if:

          (a) the Holder of a Note gives to the Trustee written notice of a
continuing Event of Default;

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          (b) the Holders of at least 25% in principal amount of the then
outstanding Notes make a written request to the Trustee to pursue the
remedy;

          (c) such Holder of a Note or Holders of Notes offer and, if
requested, provide to the Trustee indemnity satisfactory to the Trustee
against any loss, liability or expense;

          (d) the Trustee does not comply with the request within 60 days
after receipt of the request and the offer and, if requested, the
provision of indemnity; and

          (e) during such 60-day period the Holders of a majority in principal
amount of the then outstanding Notes do not give the Trustee a direction
inconsistent with the request.

          (f) A Holder of a Note may not use this Indenture to prejudice the
rights of another Holder of a Note or to obtain a preference or priority
over another Holder of a Note.

Section 6.07. Rights of Holders of Notes to Receive Payment.

          Notwithstanding any other provision of this Indenture, the right of any
Holder of a Note to receive payment of principal, premium and interest on the
Note, on or after the respective due dates expressed in the Note (including in
connection with an offer to purchase), or to bring suit for the enforcement of
any such payment on or after such respective dates, shall not be impaired or
affected without the consent of such Holder.

Section 6.08. Collection Suit by Trustee.

          If an Event of Default specified in Section 6.01(a) or (b) occurs and is
continuing, the Trustee is authorized to recover judgment in its own name and
as Trustee of an express trust against the Company for the whole amount of
principal of, premium and interest remaining unpaid on the Notes and interest
on overdue principal and, to the extent lawful, interest and such further
amount as shall be sufficient to cover the costs and expenses of collection,
including the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel.

Section 6.09. Trustee May File Proofs of Claim.

          The Trustee is authorized to file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of the
Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
Holders of the Notes allowed in any judicial proceedings relative to the
Company (or any other obligor upon the Notes), its creditors or its property
and shall be entitled and empowered to collect, receive and distribute any
money or other property payable or deliverable on any such claims and any

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custodian in any such judicial proceeding is hereby authorized by each
Holder to make such payments to the Trustee, and in the event that the Trustee
shall consent to the making of such payments directly to the Holders, to pay to
the Trustee any amount due to it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any
other amounts due the Trustee under Section 6.07 of the Base Indenture. To the
extent that the payment of any such compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel, and any other amounts due the
Trustee under Section 6.07 of the Base Indenture out of the estate in any such
proceeding, shall be denied for any reason, payment of the same shall be
secured by a Lien on, and shall be paid out of, any and all distributions,
dividends, money, securities and other properties that the Holders may be
entitled to receive in such proceeding whether in liquidation or under any plan
of reorganization or arrangement or otherwise. Nothing herein contained shall
be deemed to authorize the Trustee to authorize or consent to or accept or
adopt on behalf of any Holder any plan of reorganization, arrangement,
adjustment or composition affecting the Notes or the rights of any Holder, or
to authorize the Trustee to vote in respect of the claim of any Holder in any
such proceeding.

Section 6.10. Priorities.

          If the Trustee collects any money pursuant to this Article, it shall pay
out the money in the following order:

          First: to the Trustee, its agents and attorneys for amounts due under
Section 6.07 of the Base Indenture, including payment of all compensation,
expense and liabilities incurred, and all advances made, by the Trustee and the
costs and expenses of collection;

          Second: to Holders of Notes for amounts due and unpaid on the Notes for
principal, premium, if any, and interest, ratably, without preference or
priority of any kind, according to the amounts due and payable on the Notes for
principal, premium and interest, respectively; and

          Third: to the Company or to such party as a court of competent
jurisdiction shall direct.

          The Trustee may fix a record date and payment date for any payment to
Holders of Notes pursuant to this Section 6.10.

Section 6.11. Undertaking for Costs.

          In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as a Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys’ fees, against any party litigant in the suit, having due regard to
the merits and good faith of the claims or defenses made by the party litigant.

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This Section 6.11 does not apply to a suit by the Trustee, a suit by a
Holder of a Note pursuant to Section 6.07 hereof, or a suit by Holders of more
than 10% in principal amount of the then outstanding Notes.

ARTICLE VII

LEGAL DEFEASANCE AND COVENANT DEFEASANCE

Section 7.01. Option to Effect Legal Defeasance or Covenant Defeasance.

          The Company may, at the option of its Board of Directors evidenced by a
resolution set forth in an Officer’s Certificate, at any time, elect to have
either Section 7.02 or 7.03 hereof be applied to all outstanding Notes upon
compliance with the conditions set forth below in this Article VII.

Section 7.02. Legal Defeasance and Discharge.

          Upon the Company’s exercise under Section 7.01 hereof of the option
applicable to this Section 7.02, the Company shall, subject to the satisfaction
of the conditions set forth in Section 7.04 hereof, be deemed to have been
discharged from its obligations with respect to all outstanding Notes and to
have each Subsidiary Guarantor’s obligation discharged with respect to its
Subsidiary Guarantee on the date the conditions set forth below are satisfied
(hereinafter, “Legal Defeasance”). For this purpose, Legal Defeasance means
that the Company shall be deemed to have paid and discharged the entire
Indebtedness represented by the outstanding Notes, which shall thereafter be
deemed to be “outstanding” only for the purposes of Section 7.05 hereof and the
other Sections of this Indenture referred to in (a) and (b) below, and to have
satisfied all its other obligations under such Notes and this Indenture (and
the Trustee, on demand of and at the expense of the Company, shall execute
proper instruments acknowledging the same), except for the following provisions
which shall survive until otherwise terminated or discharged hereunder: (a) the
rights of Holders of outstanding Notes to receive solely from the trust fund
described in Section 7.04 hereof, and as more fully set forth in such Section,
payments in respect of the principal of, premium, if any, and interest if any,
on such Notes when such payments are due, (b) the Company’s obligations with
respect to such Notes under Article II and Section 4.02 hereof, (c) the rights,
powers, trusts, duties, liabilities and immunities of the Trustee hereunder and
the Company’s and the Subsidiary Guarantors’ obligations in connection
therewith and (d) this Article VII. Subject to compliance with this Article
VII, the Company may exercise its option under this Section 7.02
notwithstanding the prior exercise of its option under Section 7.03 hereof.

Section 7.03. Covenant Defeasance.

          Upon the Company’s exercise under Section 7.01 hereof of the option
applicable to this Section 7.03, the Company and each Subsidiary Guarantor
shall, subject to the satisfaction of the conditions set forth in Section 7.04
hereof, be released from their obligations under the covenants contained in
Sections 4.07, 4.08, 4.09, 4.10,

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4.11, 4.12, 4.13, 4.15, 4.16 and 4.17 hereof with respect to the
outstanding Notes on and after the date the conditions set forth in Section
7.04 hereof are satisfied (hereinafter, “Covenant Defeasance”), and the Notes
shall thereafter be deemed not “outstanding” for the purposes of any direction,
waiver, consent or declaration or act of Holders (and the consequences of any
thereof) in connection with such covenants, but shall continue to be deemed
“outstanding” for all other purposes hereunder (it being understood that such
Notes shall not be deemed outstanding for accounting purposes). For this
purpose, Covenant Defeasance means that, with respect to the outstanding Notes,
the Company and each Subsidiary Guarantor may omit to comply with and shall
have no liability in respect of any term, condition or limitation set forth in
any such covenant, whether directly or indirectly, by reason of any reference
elsewhere herein to any such covenant or by reason of any reference in any such
covenant to any other provision herein or in any other document and such
omission to comply shall not constitute a Default or an Event of Default under
Section 6.01 hereof, but, except as specified above, the remainder of this
Indenture and such Notes shall be unaffected thereby. In addition, upon the
Company’s exercise under Section 7.01 hereof of the option applicable to this
Section 7.03 hereof, subject to the satisfaction of the conditions set forth in
Section 7.04 hereof, Sections 6.01(d) through 6.01(f) hereof shall not
constitute Events of Default.

Section 7.04. Conditions to Legal or Covenant Defeasance.

          The following shall be the conditions to the application of either Section
7.02 or 7.03 hereof to the outstanding Notes:

          In order to exercise either Legal Defeasance or Covenant Defeasance:

          (a) the Company must irrevocably deposit with the Trustee, in trust, for
the benefit of the Holders of the Notes, cash in U.S. dollars, non-callable
Government Securities, or a combination of cash in U.S. dollars and
non-callable Government Securities, in amounts as will be sufficient, in the
opinion of a nationally recognized firm of independent public accountants, to
pay the principal of, interest or premium, if any, on the outstanding Notes on
the stated maturity or on the applicable redemption date, as the case may be,
and the Company must specify whether the Notes are being defeased to maturity
or to a particular redemption date;

          (b) in the case of an election under Section 7.02 hereof, the Company
shall deliver to the Trustee an Opinion of Counsel reasonably acceptable to the
Trustee (subject to customary exceptions and exclusions) confirming that (a)
the Company has received from, or there has been published by, the Internal
Revenue Service a ruling or (b) since the date of this Indenture, there has
been a change in the applicable federal income tax law, in either case to the
effect that, and based thereon such Opinion of Counsel will confirm that, the
Holders of the outstanding Notes will not recognize income, gain or loss for
federal income tax purposes as a result of such Legal Defeasance and will be
subject to federal income tax on the same amounts, in the same manner and at
the same times as would have been the case if such Legal Defeasance had not
occurred;

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          (c) in the case of an election under Section 7.03 hereof, the Company
shall deliver to the Trustee an Opinion of Counsel reasonably acceptable to the
Trustee (subject to customary exceptions and exclusions) confirming that the
Holders of the outstanding Notes will not recognize income, gain or loss for
federal income tax purposes as a result of such Covenant Defeasance and will be
subject to federal income tax on the same amounts, in the same manner and at
the same times as would have been the case if such Covenant Defeasance had not
occurred;

          (d) no Default or Event of Default shall have occurred and be continuing
on the date of such deposit (other than a Default or Event of Default resulting
from the incurrence of Indebtedness all or a portion of the proceeds of which
will be used to defease the Notes pursuant to this Article VII concurrently
with such incurrence) or insofar as Sections 6.01(g) or 6.01(h) hereof are
concerned, at any time in the period ending on the effective date of such
defeasance;

          (e) such Legal Defeasance or Covenant Defeasance shall not result in a
breach or violation of, or constitute a default under, any material agreement
or instrument (other than this Indenture) to which the Company or any of its
Subsidiaries is a party or by which the Company or any of its Subsidiaries is
bound;

          (f) the Company shall have delivered to the Trustee, at or prior to the
effective date of such defeasance, an opinion of counsel to the effect that,
assuming no intervening bankruptcy of the Company between the date of deposit
and the 91st day following the deposit and assuming that no Holder is an
“insider” of the Company under applicable bankruptcy law, after the 91st day
following the deposit, the trust funds will not be subject to the effect of any
applicable bankruptcy, insolvency, reorganization or similar laws affecting
creditors’ rights generally;

          (g) the Company shall have delivered to the Trustee an Officer’s
Certificate stating that the deposit was not made by the Company with the
intent of preferring the Holders over any other creditors of the Company or
with the intent of defeating, hindering, delaying or defrauding any other
creditors of the Company; and

          (h) the Company shall have delivered to the Trustee an Officer’s
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for or relating to the Legal Defeasance or the Covenant
Defeasance have been complied with.

Section 7.05. Deposited Money and Government Securities to be Held in Trust;
Other Miscellaneous Provisions.

          Subject to Section 7.06 hereof, all money and non-callable Government
Securities (including the proceeds thereof) deposited with the Trustee (or
other qualifying Trustee, collectively for purposes of this Section 7.05, the
“Trustee”) pursuant to Section 7.04 hereof in respect of the outstanding Notes
shall be held in trust and applied by the Trustee, in accordance with the
provisions of such Notes and this Indenture, to the

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payment, either directly or through any Paying Agent (including the
Company acting as Paying Agent) as the Trustee may determine, to the Holders of
such Notes of all sums due and to become due thereon in respect of principal,
premium, if any, and interest, but such money need not be segregated from other
funds except to the extent required by law.

          The Company and the Subsidiary Guarantors shall pay and indemnify the
Trustee against any tax, fee or other charge imposed on or assessed against the
cash or non-callable Government Securities deposited pursuant to Section 7.04
hereof or the principal and interest received in respect thereof other than any
such tax, fee or other charge which by law is for the account of the Holders of
the outstanding Notes.

          Anything in this Article VII to the contrary notwithstanding, the Trustee
shall deliver or pay to the Company from time to time upon the request of the
Company any money or non-callable Government Securities held by it as provided
in Section 7.04 hereof which, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee (which may be the opinion delivered under Section
7.04(a) hereof), are in excess of the amount thereof that would then be
required to be deposited to effect an equivalent Legal Defeasance or Covenant
Defeasance.

Section 7.06. Repayment to Company.

          Any money deposited with the Trustee or any Paying Agent, or then held by
the Company, in trust for the payment of the principal of, premium, if any, or
interest on any Note and remaining unclaimed for two years after such
principal, and premium, if any, or interest has become due and payable shall be
paid to the Company on its request or (if then held by the Company) shall be
discharged from such trust; and the Holder of such Note shall thereafter, as a
secured creditor, look only to the Company for payment thereof, and all
liability of the Trustee or such Paying Agent with respect to such trust money,
and all liability of the Company as Trustee thereof, shall thereupon cease;
provided, however, that the Trustee or such Paying Agent, before being required
to make any such repayment, may at the expense of the Company cause to be
published once, in the New York Times and The Wall Street Journal (national
edition), notice that such money remains unclaimed and that, after a date
specified therein, which shall not be less than 30 days from the date of such
notification or publication, any unclaimed balance of such money then remaining
will be repaid to the Company.

Section 7.07. Reinstatement.

          If the Trustee or Paying Agent is unable to apply any United States
dollars or non-callable Government Securities in accordance with Section 7.02
or 7.03 hereof, as the case may be, by reason of any order or judgment of any
court or governmental authority enjoining, restraining or otherwise prohibiting
such application, then the Company’s obligations under this Indenture and the
Notes shall be revived and reinstated as though no deposit had occurred
pursuant to Section 7.02 or 7.03 hereof until such time as the Trustee or
Paying Agent is permitted to apply all such money in accordance with

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Section 7.02 or 7.03 hereof, as the case may be; provided, however, that,
if the Company makes any payment of principal of, premium, if any, or interest
on any Note following the reinstatement of its obligations, the Company shall
be subrogated to the rights of the Holders of such Notes to receive such
payment from the money held by the Trustee or Paying Agent.

ARTICLE VIII

AMENDMENT, SUPPLEMENT AND WAIVER

Section 8.01. Without Consent of Holders of Notes.

          Notwithstanding Section 8.02 of this First Supplemental Indenture, the
Company, the Subsidiary Guarantors and the Trustee may amend or supplement this
Indenture, the Subsidiary Guarantees or the Notes without the consent of any
Holder of a Note:

          (a) to cure any ambiguity, defect or inconsistency;

          (b) provide for the assumption by a successor corporation of the
obligations of the Company under this Indenture in the case of a merger or
consolidation or sale of all or substantially all of the Company’s assets;

          (c) provide for uncertificated Notes in addition to or in place of
certificated Notes;

          (d) make any change that would provide any additional rights or benefits
to the Holders of the Notes or that does not adversely affect the legal rights
hereunder of any such Holder;

          (e) make any change to comply with any requirement of the SEC in order to
effect or maintain the qualification of this Indenture under the TIA;

          (f) to provide for the issuance of Additional Notes in accordance with the
limitations set forth in this Indenture as of the date hereof; or

          (g) to allow any Subsidiary Guarantor to execute a supplemental Indenture
and/or a Subsidiary Guarantee with respect to the Notes.

          Upon the request of the Company accompanied by a resolution of its Board
of Directors authorizing the execution of any such amended or supplemental
Indenture, and upon receipt by the Trustee of the documents described in
Section 6.03 of the Base Indenture, the Trustee shall join with the Company and
the Subsidiary Guarantors in the execution of any amended or supplemental
Indenture authorized or permitted by the terms of this First Supplemental
Indenture and to make any further appropriate agreements and stipulations that
may be therein contained, but the Trustee

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shall not be obligated to enter into such amended or supplemental
Indenture that affects its own rights, duties, liabilities or immunities under
this Indenture or otherwise.

Section 8.02. With Consent of Holders of Notes.

          Except as provided below in this Section 8.02, the Company and the Trustee
may amend or supplement this First Supplemental Indenture (including Sections
3.09, 4.10 and 4.15 hereof), the Subsidiary Guarantees and the Notes may be
amended or supplemented with the consent of the Holders of at least a majority
in principal amount of the Notes, including Additional Notes, if any, then
outstanding voting as a single class (including consents obtained in connection
with a tender offer or exchange offer for, or purchase of, the Notes), and,
subject to Sections 6.04 and 6.07 hereof, any existing Default or Event of
Default (except a continuing Default or Event of Default in the payment of
interest, premium, or the principal of, the Notes, except a payment default
resulting from an acceleration that has been rescinded) or compliance with any
provision of this Indenture or the Notes may be waived with the consent of the
Holders of a majority in principal amount of the Notes, including Additional
Notes, if any, then outstanding voting as a single class (including consents
obtained in connection with a tender offer or exchange offer for, or purchase
of, the Notes). Section 2.06 hereof shall determine which Notes are considered
to be “outstanding” for purposes of this Section 8.02.

          Upon the request of the Company accompanied by a Board Resolution of the
Board of Directors authorizing the execution of any such amended or
supplemental Indenture, and upon the filing with the Trustee of evidence
satisfactory to the Trustee of the consent of the Holders of Notes as
aforesaid, and upon receipt by the Trustee of the documents described in
Section 6.03 of the Base Indenture, the Trustee shall join with the Company in
the execution of such amended or supplemental Indenture unless such amended or
supplemental Indenture directly affects the Trustee’s own rights, duties or
immunities under this Indenture or otherwise, in which case the Trustee may in
its discretion, but shall not be obligated to, enter into such amended or
supplemental Indenture.

          The Company may, but shall not be obligated to, fix a record date for the
purpose of determining the Persons entitled to consent to any indenture
supplemental hereto. If a record date is fixed, the Holders on such record
date, or their duly designated proxies, and only such Persons, shall be
entitled to consent to such supplemental indenture, whether or not such Holders
remain Holders after such record date; provided, that unless such consent shall
have become effective by virtue of the requisite percentage having been
obtained prior to the date which is 90 days after such record date, any such
consent previously given shall automatically and without further action by any
Holder be cancelled and of no further effect.

          It shall not be necessary for the consent of the Holders under this
Section 8.02 to approve the particular form of any proposed amendment or
waiver, but it shall be sufficient if such consent approves the substance
thereof.

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          After an amendment, supplement or waiver under this Section becomes
effective, the Company shall mail to the Holders to such Holder’s address
appearing in the Security Register a notice briefly describing the amendment,
supplement or waiver. Any failure of the Company to mail such notice, or any
defect therein, shall not, however, in any way impair or affect the validity of
any such amended or supplemental Indenture or waiver. Subject to Sections 6.04
and 6.07 hereof, the Holders of a majority in aggregate principal amount of the
Notes, including Additional Notes, if any, then outstanding voting as a single
class may waive compliance in a particular instance by the Company with any
provision of this Indenture or the Notes. Without the consent of each Holder,
an amendment or waiver under this Section 8.02 may not (with respect to any
Notes held by a non-consenting Holder):

          (a) reduce the principal amount of Notes whose Holders must consent to an
amendment, supplement or waiver;

          (b) reduce the principal of or change the fixed maturity of any Note or
alter the provisions with respect to the redemption of the Notes except as
provided above with respect to Sections 3.09, 4.10 and 4.15 hereof;

          (c) make any change in the provisions of Sections 4.10 or 4.15;

          (d) reduce the rate of or change the time for payment of interest on any
Note;

          (e) waive a Default or Event of Default in the payment of principal of, or
interest or premium on the Notes (except a rescission of acceleration of the
Notes by the Holders of at least a majority in aggregate principal amount of
the then outstanding Notes and a waiver of the payment default that resulted
from such acceleration);

          (f) make any Note payable in money other than that stated in the Note;

          (g) make any change in the provisions of this Indenture relating to
waivers of past Defaults or the rights of Holders of Notes to receive payments
of principal of, or interest or premium on the Notes;

          (h) waive a redemption payment with respect to any Note (other than a
payment required by Section 4.10 or 4.15 hereof);

          (i) release any Subsidiary Guarantor from any of its obligations under its
Subsidiary Guarantee or this Indenture, except in accordance with the terms
hereof; or

          (j) make any change in the preceding amendment and waiver provisions.

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Section 8.03. Compliance with Trust Indenture Act.

          Every amendment or supplement to this Indenture or the Notes shall be set
forth in an amended or supplemental Indenture that complies with the TIA as
then in effect.

Section 8.04. Revocation and Effect of Consents.

          Until an amendment, supplement or waiver becomes effective, a consent to
it by a Holder of a Note is a continuing consent by the Holder of a Note and
every subsequent Holder of a Note or portion of a Note that evidences the same
debt as the consenting Holder’s Note, even if notation of the consent is not
made on any Note. However, any such Holder of a Note or subsequent Holder of a
Note may revoke the consent as to its Note if the Trustee receives written
notice of revocation before the date the waiver, supplement or amendment
becomes effective. An amendment, supplement or waiver becomes effective in
accordance with its terms and thereafter binds every Holder.

Section 8.05. Notation on or Exchange of Notes.

          The Trustee may place an appropriate notation about an amendment,
supplement or waiver on any Note thereafter authenticated. The Company in
exchange for all Notes may issue and the Trustee shall, upon receipt of an
Authentication Order, authenticate new Notes that reflect the amendment,
supplement or waiver.

          Failure to make the appropriate notation or issue a new Note shall not
affect the validity and effect of such amendment, supplement or waiver.

Section 8.06. Trustee to Sign Amendments, etc.

          The Trustee shall sign any amended or supplemental Indenture authorized
pursuant to this Article VIII if the amendment or supplement does not adversely
affect the rights, duties, liabilities or immunities of the Trustee. The
Company may not sign an amendment or supplemental Indenture until the Board of
Directors approves it. In executing any amended or supplemental Indenture, the
Trustee shall be entitled to receive and (subject to Section 6.01 of the Base
Indenture) shall be fully protected in relying upon an Officer’s Certificate
and an Opinion of Counsel stating that the execution of such amended or
supplemental Indenture is authorized or permitted by this Indenture and that
such amended or supplemental indenture is the legal, valid and binding
obligations of the Company enforceable against it in accordance with its terms,
subject to customary exceptions and that such amended or supplemental indenture
complies with the provisions hereof (including Section 8.03).

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ARTICLE IX

SUBSIDIARY GUARANTEES

Section 9.01. Guarantee.

          Subject to this Article IX, each of the Subsidiary Guarantors hereby,
jointly and severally, unconditionally guarantees to each Holder of a Note
authenticated and delivered by the Trustee and to the Trustee and its
successors and assigns, irrespective of the validity and enforceability of this
Indenture, the Notes or the obligations of the Company hereunder or thereunder,
that: (a) the principal of and interest on the Notes will be promptly paid in
full when due, whether at maturity, by acceleration, redemption or otherwise,
and interest on the overdue principal of and interest on the Notes, if any, if
lawful, and all other obligations of the Company to the Holders or the Trustee
hereunder or thereunder will be promptly paid in full or performed, all in
accordance with the terms hereof and thereof; and (b) in case of any extension
of time of payment or renewal of any Notes or any of such other obligations,
that same will be promptly paid in full when due or performed in accordance
with the terms of the extension or renewal, whether at stated maturity, by
acceleration or otherwise. Failing payment when due of any amount so
guaranteed or any performance so guaranteed for whatever reason, the Subsidiary
Guarantors shall be jointly and severally obligated to pay the same
immediately. Each Subsidiary Guarantor agrees that this is a guarantee of
payment and not a guarantee of collection.

          Each Subsidiary Guarantor hereby agrees that its obligations with regard
to this Subsidiary Guarantee shall be joint and several, unconditional,
irrespective of the validity or enforceability of the Notes or the obligations
of the Company under this Indenture, the absence of any action to enforce the
same, the recovery of any judgment against the Company or any other obligor
with respect to this Indenture, the Notes or the Obligations of the Company
under this Indenture or the Notes, any action to enforce the same or any other
circumstances (other than complete performance) which might otherwise
constitute a legal or equitable discharge or defense of a Subsidiary Guarantor.
Each Subsidiary Guarantor further, to the extent permitted by law, waives and
relinquishes all claims, rights and remedies accorded by applicable law to
guarantors and agrees not to assert or take advantage of any such claims,
rights or remedies, including but not limited to: (a) any right to require any
of the Trustee, the Holders or the Company (each a “Benefited Party”), as a
condition of payment or performance by such Subsidiary Guarantor, to (1)
proceed against the Company, any other guarantor (including any other
Subsidiary Guarantor) of the Obligations under the Subsidiary Guarantees or any
other Person, (2) proceed against or exhaust any security held from the
Company, any such other guarantor or any other Person, (3) proceed against or
have resort to any balance of any deposit account or credit on the books of any
Benefited Party in favor of the Company or any other Person, or (4) pursue any
other remedy in the power of any Benefited Party whatsoever; (b) any defense
arising by reason of the incapacity, lack of authority or any disability or
other defense of the Company including any defense based on or arising out of
the lack of validity or the unenforceability of the

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Obligations under the Subsidiary Guarantees or any agreement or instrument
relating thereto or by reason of the cessation of the liability of the Company
from any cause other than payment in full of the Obligations under the
Subsidiary Guarantees; (c) any defense based upon any statute or rule of law
which provides that the obligation of a surety must be neither larger in amount
nor in other respects more burdensome than that of the principal; (d) any
defense based upon any Benefited Party’s errors or omissions in the
administration of the Obligations under the Subsidiary Guarantees, except
behavior which amounts to bad faith; (e)(1) any principles or provisions of
law, statutory or otherwise, which are or might be in conflict with the terms
of the Subsidiary Guarantees and any legal or equitable discharge of such
Subsidiary Guarantor’s obligations hereunder, (2) the benefit of any statute of
limitations affecting such Subsidiary Guarantor’s liability hereunder or the
enforcement hereof, (3) any rights to set-offs, recoupments and counterclaims
and (4) promptness, diligence and any requirement that any Benefited Party
protect, secure, perfect or insure any security interest or lien or any
property subject thereto; (f) notices, demands, presentations, protests,
notices of protest, notices of dishonor and notices of any action or inaction,
including acceptance of the Subsidiary Guarantees, notices of default under the
Notes or any agreement or instrument related thereto, notices of any renewal,
extension or modification of the Obligations under the Subsidiary Guarantees or
any agreement related thereto, and notices of any extension of credit to the
Company and any right to consent to any thereof; (g) to the extent permitted
under applicable law, the benefits of any “One Action” rule and (h) any
defenses or benefits that may be derived from or afforded by law which limit
the liability of or exonerate guarantors or sureties, or which may conflict
with the terms of the Subsidiary Guarantees. Each Subsidiary Guarantor hereby
covenants that its Subsidiary Guarantee shall not be discharged except by
complete performance of the obligations contained in its Subsidiary Guarantee
and this Indenture.

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

          Each Subsidiary Guarantor agrees that it shall not be entitled to any
right of subrogation in relation to the Holders in respect of any obligations
guaranteed hereby until payment in full of all obligations guaranteed hereby.
Each Subsidiary Guarantor further agrees that, as between the Subsidiary
Guarantors, on the one hand, and the Holders and the Trustee, on the other
hand, (x) the maturity of the obligations guaranteed hereby may be accelerated
as provided in Section 6.02 hereof for the purposes of this Subsidiary
Guarantee, notwithstanding any stay, injunction or other prohibition preventing
such acceleration in respect of the obligations guaranteed hereby and (y) in
the event of any declaration of acceleration of such obligations as provided in
Section 6.02 hereof, such obligations (whether or not due and payable) shall
forthwith become due and payable by the Subsidiary Guarantors for the purpose
of this Subsidiary Guarantee. The Subsidiary Guarantors shall have the right
to seek contribution from any

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non-paying Subsidiary Guarantor so long as the exercise of such right does
not impair the rights of the Holders under the Subsidiary Guarantee.

Section 9.02. Limitation on Subsidiary Guarantor Liability.

          Each Subsidiary Guarantor, and by its acceptance of Notes, each Holder,
hereby confirms that it is the intention of all such parties that the
Subsidiary Guarantee of such Subsidiary Guarantor not constitute a fraudulent
transfer or conveyance for purposes of Bankruptcy Law, the Uniform Fraudulent
Conveyance Act, the Uniform Fraudulent Transfer Act or any similar federal or
state law to the extent applicable to any Subsidiary Guarantee. To effectuate
the foregoing intention, the Trustee, the Holders and the Subsidiary Guarantors
hereby irrevocably agree that the obligations of such Subsidiary Guarantor
under its Subsidiary Guarantee and this Article IX shall be limited to the
maximum amount as will, after giving effect to such maximum amount and all
other contingent and fixed liabilities of such Subsidiary Guarantor that are
relevant under such laws, and after giving effect to any collections from,
rights to receive contribution from or payments made by or on behalf of any
other Subsidiary Guarantor in respect of the obligations of such other
Subsidiary Guarantor under this Article IX, result in the obligations of such
Subsidiary Guarantor under its Subsidiary Guarantee not constituting a
fraudulent transfer or conveyance.

Section 9.03. Execution and Delivery of Subsidiary Guarantee.

          To evidence its Subsidiary Guarantee set forth in Section 9.01, each
Subsidiary Guarantor hereby agrees that a notation of such Subsidiary Guarantee
substantially in the form included in Exhibit B shall be endorsed by an Officer
of such Subsidiary Guarantor on each Note authenticated and delivered by the
Trustee and that this Indenture shall be executed on behalf of such Subsidiary
Guarantor by its President or one of its Vice Presidents.

          Each Subsidiary Guarantor hereby agrees that its Subsidiary Guarantee set
forth in Section 9.01 shall remain in full force and effect notwithstanding any
failure to endorse on each Note a notation of such Subsidiary Guarantee.

          If an Officer whose signature is on this Indenture or on the Subsidiary
Guarantee no longer holds that office at the time the Trustee authenticates the
Note on which a Subsidiary Guarantee is endorsed, the Subsidiary Guarantee
shall be valid nevertheless.

          The delivery of any Note by the Trustee, after the authentication thereof
hereunder, shall constitute due delivery of the Subsidiary Guarantee set forth
in this Indenture on behalf of the Subsidiary Guarantors.

          In the event that the Company creates or acquires any new Subsidiaries
subsequent to the date of this First Supplemental Indenture, if required by
Section 4.16 hereof, the Company shall cause such Subsidiaries to execute
supplemental Indentures to

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this Indenture and Subsidiary Guarantees in accordance with Section 4.16
hereof and this Article IX, to the extent applicable.

Section 9.04. Subsidiary Guarantors May Consolidate, etc., on Certain Terms.

          No Subsidiary Guarantor may consolidate with or merge with or into
(whether or not such Subsidiary Guarantor is the surviving Person) another
Person whether or not affiliated with such Subsidiary Guarantor unless:

          (a) subject to Section 9.05 hereof, the Person formed by or surviving any
such consolidation or merger (if other than a Subsidiary Guarantor or the
Company) unconditionally assumes all the obligations of such Subsidiary
Guarantor, pursuant to a supplemental Indenture in form and substance
reasonably satisfactory to the Trustee, under the Notes, this Indenture and the
Subsidiary Guarantee on the terms set forth herein or therein;

          (b) immediately after giving effect to such transaction, no Default or
Event of Default exists; and

          (c) the Company would be permitted, immediately after giving effect to
such transaction, to incur at least $1.00 of additional Indebtedness pursuant
to the Fixed Charge Coverage Ratio test set forth in the first paragraph of
Section 4.09 hereof.

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

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

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Section 9.05. Releases Following Sale of Assets.

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

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

[Signatures on following page]

70

 

SIGNATURES

	 	 	 	 	 	 	 
	Dated as of March 23, 2004
	 	 	 	 	 	 
	 	 	ISSUER:
	 
	 	 	 	 	 	 
	 	 	Peabody Energy Corporation
	 
	 	 	 	 	 	 
	

	 	By:	 	/s/ WALTER L. HAWKINS, JR.
	 	 	 	 	
 
	

	 	 	 	Name:
	 	Walter L. Hawkins, Jr.
	

	 	 	 	Title:
	 	Vice President and Treasurer
	 
	 	 	 	 	 	 
	 	 	GUARANTORS

	 	 	 
	 

	 	AFFINITY MINING COMPANY
	

	 	ARCLAR COMPANY, LLC
	

	 	ARID OPERATIONS INC.
	

	 	BEAVER DAM COAL COMPANY
	

	 	BIG RIDGE, INC.
	

	 	BIG SKY COAL COMPANY
	

	 	BLACK BEAUTY COAL COMPANY
	

	 	BLACK BEAUTY EQUIPMENT COMPANY
	

	 	BLACK BEAUTY HOLDING COMPANY, LLC
	

	 	BLACK BEAUTY MINING, INC.
	

	 	BLACK BEAUTY RESOURCES, INC.
	

	 	BLACK BEAUTY UNDERGROUND, INC.
	

	 	BLACK HILLS MINING COMPANY, LLC
	

	 	BLACK STALLION COAL COMPANY, LLC
	

	 	BLACK WALNUT COAL COMPANY
	

	 	BLUEGRASS COAL COMPANY
	

	 	BTU VENEZUELA LLC
	

	 	BTU WORLDWIDE, INC.
	

	 	CABALLO COAL COMPANY
	

	 	CHARLES COAL COMPANY
	

	 	CLEATON COAL COMPANY
	

	 	COAL PROPERTIES CORP.
	

	 	COLONY BAY COAL COMPANY
	

	 	COOK MOUNTAIN COAL COMPANY
	

	 	COTTONWOOD LAND COMPANY
	

	 	CYPRUS CREEK LAND COMPANY
	

	 	CYPRUS CREEK LAND RESOURCES, LLC
	

	 	EAGLE COAL COMPANY
	

	 	EACC CAMPS, INC.
	

	 	EASTERN ASSOCIATED COAL CORP.
	

	 	EASTERN ROYALTY CORP.
	

	 	EMPIRE MARINE, LLC

 

 

	 	 	 
	

	 	FALCON COAL COMPANY
	

	 	GALLO FINANCE COMPANY
	

	 	GIBCO MOTOR EXPRESS, LLC
	

	 	GOLD FIELDS CHILE, S.A.
	

	 	GOLD FIELDS MINING CORPORATION
	

	 	GOLD FIELDS OPERATING CO.-ORTIZ
	

	 	GRAND EAGLE MINING, INC.
	

	 	HAYDEN GULCH TERMINAL, INC
	

	 	HIGHLAND MINING COMPANY
	

	 	HIGHWALL MINING SERVICES COMPANY
	

	 	HILLSIDE MINING COMPANY
	

	 	INDEPENDENCE MATERIAL HANDLING COMPANY
	

	 	INDIAN HILL COMPANY
	

	 	INTERIOR HOLDINGS CORP.
	

	 	JAMES RIVER COAL TERMINAL COMPANY
	

	 	JARRELL’S BRANCH COAL COMPANY
	

	 	JUNIPER COAL COMPANY
	

	 	KANAWHA RIVER VENTURES I, LLC.
	

	 	KAYENTA MOBILE HOME PARK, INC.
	

	 	LOGAN FORK COAL COMPANY
	

	 	MARTINKA COAL COMPANY
	

	 	MIDCO SUPPLY AND EQUIPMENT CORPORATION
	

	 	MIDWEST COAL ACQUISITION CORP.
	

	 	MOUNTAIN VIEW COAL COMPANY
	

	 	MUSTANG ENERGY COMPANY, L.L.C.
	

	 	NORTH PAGE COAL CORP.
	

	 	OHIO COUNTY COAL COMPANY
	

	 	PATRIOT COAL COMPANY, L.P.
	

	 	PDC PARTNERSHIP HOLDINGS, INC.
	

	 	PEABODY AMERICA, INC.
	

	 	PEABODY ARCHVEYOR, L.L.C.
	

	 	PEABODY COALSALES COMPANY
	

	 	PEABODY COALTRADE, INC.
	

	 	PEABODY COAL COMPANY
	

	 	PEABODY DEVELOPMENT COMPANY, LLC
	

	 	PEABODY DEVELOPMENT LAND HOLDINGS, LLC
	

	 	PEABODY ENERGY GENERATION HOLDING COMPANY
	

	 	PEABODY ENERGY INVESTMENTS, INC.

72

 

	 	 	 
	

	 	PEABODY ENERGY SOLUTIONS, INC.
	

	 	PEABODY HOLDING COMPANY, INC.
	

	 	PEABODY NATURAL GAS, LLC
	

	 	PEABODY POWERTREE INVESTMENTS, LLC
	

	 	PEABODY RECREATIONAL LANDS, L.L.C.
	

	 	PEABODY SOUTHWESTERN COAL COMPANY
	

	 	PEABODY TERMINALS, INC.
	

	 	PEABODY VENEZUELA COAL CORP.
	

	 	PEABODY-WATERSIDE DEVELOPMENT, L.L.C.
	

	 	PEABODY WESTERN COAL COMPANY
	

	 	PEC EQUIPMENT COMPANY LLC
	

	 	PINE RIDGE COAL COMPANY
	

	 	POINT PLEASANT DOCK COMPANY LLC
	

	 	POND CREEK LAND RESOURCES, LLC
	

	 	POND RIVER LAND COMPANY
	

	 	PORCUPINE PRODUCTION, LLC
	

	 	PORCUPINE TRANSPORTATION, LLC
	

	 	POWDER RIVER COAL COMPANY
	

	 	PRAIRIE STATE GENERATING COMPANY, LLC
	

	 	RIO ESCONDIDO COAL CORP.
	

	 	RIVER’S EDGE MINING, INC.
	

	 	RIVERVIEW TERMINAL COMPANY
	

	 	SENECA COAL COMPANY
	

	 	SENTRY MINING COMPANY
	

	 	SNOWBERRY LAND COMPANY
	

	 	STAR LAKE ENERGY COMPANY, L.L.C.
	

	 	STERLING SMOKELESS COAL COMPANY
	

	 	SUGAR CAMP PROPERTIES
	

	 	THOROUGHBRED, L.L.C.
	

	 	THOROUGHBRED GENERATING COMPANY, LLC
	

	 	THOROUGHBRED MINING COMPANY, L.L.C.
	

	 	WILLIAMSVILLE COAL COMPANY, L.L.C.
	

	 	YANKEETOWN DOCK CORPORATION

	 	 	 	 	 
	

	 	By:	 	/s/ WALTER L. HAWKINS, JR.
	

	 	 	 	
 
	

	 	Name:
	 	Walter L. Hawkins, Jr.
	

	 	Title:
	 	Vice President and Treasurer

73

 

	 	 	 	 	 
	 	 	COLONY BAY COAL COMPANY
	 	 	By: Eastern Associated Coal Corp., its general partner
	 
	 	 	 	 
	

	 	By:	 	/s/ WALTER L. HAWKINS, JR.
	

	 	 	 	
 
	

	 	Name:
	 	Walter L. Hawkins, Jr.
	

	 	Title:
	 	Vice President and Treasurer
	 
	 	 	 	 
	 	 	By: Charles Coal Company, its general partner
	 
	 	 	 	 
	

	 	By:	 	/s/ WALTER L. HAWKINS, JR.
	

	 	 	 	
 
	

	 	Name:
	 	Walter L. Hawkins, Jr.
	

	 	Title:
	 	Vice President and Treasurer
	 
	 	 	 	 
	 	 	PATRIOT COAL COMPANY, L.P.
	 
	 	 	 	 
	 	 	By: Bluegrass Coal Company, its managing partner
	 
	 	 	 	 
	

	 	By:	 	/s/ WALTER L. HAWKINS, JR.
	

	 	 	 	
 
	

	 	Name:
	 	Walter L. Hawkins, Jr.
	

	 	Title:
	 	Vice President and Treasurer

74

 

	 	 	 	 	 
	 	 	PEABODY NATURAL RESOURCES COMPANY
	 
	 	 	 	 
	 	 	By: Gold Fields Mining Corporation, its general partner
	 
	 	 	 	 
	

	 	By:	 	/s/ WALTER L. HAWKINS, JR.
	

	 	 	 	
 
	

	 	Name:
	 	Walter L. Hawkins, Jr.
	

	 	Title:
	 	Vice President and Treasurer
	 
	 	 	 	 
	 	 	By: Peabody America, Inc., its general partner
	 
	 	 	 	 
	

	 	By:	 	/s/ WALTER L. HAWKINS, JR.
	

	 	 	 	
 
	

	 	Name:
	 	Walter L. Hawkins, Jr.
	

	 	Title:
	 	Vice President and Treasurer

75

 

	 	 	 	 	 
	 	 	TRUSTEE
	 
	 	 	 	 
	 	 	U.S. Bank National Association
	 
	 	 	 	 
	

	 	By:	 	/s/ PHILIP KANE, JR.
	

	 	 	 	
 
	

	 	Name:
	 	Philip Kane, Jr.
	

	 	Title:
	 	Vice President

76

 

EXHIBIT A

(Face of Note)

5?% Senior Notes due 2016

CUSIP 704549AD6

ISIN US704549AD67

			
	No.
	 	$                 

PEABODY ENERGY CORPORATION

promises to pay to CEDE & CO., INC. or registered assigns, the principal sum of
_________________ Dollars ($______________) on April 15, 2016.

Interest Payment Dates: April 15 and October 15, commencing April 15, 2004.

Record Dates: April 1 and October 1.

Dated: ______________, 2004.

 

 

          IN WITNESS WHEREOF, the Issuer has caused this Note to be signed manually
or by facsimile by its duly authorized officer.

	 	 	 	 	 
	 	PEABODY ENERGY CORPORATION

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title 	 
	 

This is one of the [Global]

Notes referred to in the

within-mentioned Indenture:

U.S. Bank National Association

as Trustee

By:                                   

Authorized Signatory

Dated _____________, 20__

2

 

(Back of Note)

5?% Senior Notes due 2016

[Insert the Global Note Legend, if applicable, pursuant to the terms of the
Indenture]

Capitalized terms used herein shall have the meanings assigned to them in the
Indenture referred to below unless otherwise indicated.

          1. Interest. Peabody Energy Corporation, a Delaware corporation (the
“Company”), promises to pay interest on the principal amount of this Note at
5?% per annum from March 23, 2004 until maturity. The Company will pay
interest semi-annually on April 15 and October 15 of each year, or if any such
day is not a Business Day, on the next succeeding Business Day (each an
“Interest Payment Date”). Interest on the Notes will accrue from the most
recent date to which interest has been paid or, if no interest has been paid,
from March 23, 2004; provided that if there is no existing Default in the
payment of interest, and if this Note is authenticated between a record date
referred to on the face hereof and the next succeeding Interest Payment Date,
interest shall accrue from such next succeeding Interest Payment Date;
provided, further, that the first Interest Payment Date shall be April 15,
2004. The Company shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue principal and premium, if any,
from time to time on demand at a rate that is 1% per annum in excess of the
rate then in effect; it shall pay interest (including post-petition interest in
any proceeding under any Bankruptcy Law) on overdue installments of interest
(without regard to any applicable grace periods) from time to time on demand at
the same rate to the extent lawful. Interest will be computed on the basis of
a 360-day year of twelve 30-day months.

          2. Method of Payment. The Company will pay interest on the Notes (except
defaulted interest) to the Persons who are registered Holders of Notes at the
close of business on the April 1 or October 1 next preceding the Interest
Payment Date (except as provided in Section 3.08 of the Base Indenture with
respect to defaulted interest), even if such Notes are canceled after such
record date and on or before such Interest Payment Date. The Notes will be
payable as to principal, premium, if any, and interest at the office or agency
of the Company maintained for such purpose within or without the City and State
of New York, or, at the option of the Company, payment of interest may be made
by check mailed to the Holders at their addresses set forth in the register of
Holders, and provided that payment by wire transfer of immediately available
funds will be required with respect to principal of and interest, premium on
all Global Notes and all other Notes the Holders of which shall have provided
wire transfer instructions to the Company or the Paying Agent. Such payment
shall be in such coin or currency of the United States of America as at the
time of payment is legal tender for payment of public and private debts.

          3. Paying Agent and Registrar. Initially, U.S. Bank National Association,
the Trustee under the Indenture, will act as Paying Agent and Registrar. The

3

 

Company may change any Paying Agent or Registrar without notice to any
Holder. The Company or any of its Subsidiaries may act in any such capacity.

          4. Indenture. The Company issued the Notes under the First Supplemental
Indenture dated as of March 23, 2004 to a Base Indenture dated as of March 19,
2004 (collectively, the “Indenture”) between the Company and the Trustee. The
terms of the Notes include those stated in the Indenture and those made part of
the Indenture by reference to the Trust Indenture Act of 1939, as amended (15
U.S. Code §§ 77aaa-77bbbb). The Notes are subject to all such terms, and
Holders are referred to the Indenture and such Act for a statement of such
terms. To the extent any provision of this Note conflicts with the express
provisions of the Indenture, the provisions of the Indenture shall govern and
be controlling. The Notes are obligations of the Company.

          5. The principal on the Notes shall be due and payable on April 15, 2016.

          6. Optional Redemption.

          (a) The Notes will be subject to redemption at any time at the option of
the Company, in whole or in part, upon not less than 30 nor more than 60 days’
notice to Holders in the manner provided in the Indenture.

          (b) Prior to April 15, 2009, the Notes will be redeemable at a redemption
price equal to 100% of the principal amount thereof plus the applicable Make
Whole Premium, plus, to the extent not included in the Make Whole Premium,
accrued and unpaid interest, if any, to the date of redemption. For purposes
of the foregoing, “Make Whole Premium” means, with respect to a Note, an amount
equal to the excess of (1) the present value of the remaining interest,
premium, if any, and principal payments due on such Note as if such Note were
redeemed on April 15, 2009, computed using a discount rate equal to the
Treasury Rate plus 50 basis points, over (2) the outstanding principal amount
of such Note.

          (c) On or after April 15, 2009, the Notes are redeemable at the redemption
prices (expressed as percentages of principal amount) set forth below plus
accrued and unpaid interest, if any, thereon to the applicable redemption date,
if redeemed during the twelve-month period beginning on April 15 of the years
indicated below:

	 	 	 	 	 
	Year
	 	Percentage

	2009
	 	 	102.938	%
	2010
	 	 	101.958	%
	2011
	 	 	100.979	%
	2012 and thereafter
	 	 	100.000	%

          (d) Notwithstanding the provisions of clauses (a), (b) and (c) of this
Paragraph 6, during the first 36 months after the date hereof, the Company may
on any one or more occasions redeem up to 35% of the aggregate principal amount
of Notes

4

 

issued under this Indenture at a redemption price of 105.875% of the
principal amount thereof, plus accrued and unpaid interest thereon, if any, to
the redemption date, with the net cash proceeds of one or more Equity
Offerings; provided that at least 65% of the aggregate principal amount of
Notes issued remain outstanding immediately after the occurrence of such
redemption (excluding Notes held by the Company and its Subsidiaries); and
provided, further, that such redemption shall occur within 120 days of the date
of the closing of such Equity Offering.

          (e) Any redemption pursuant to this Paragraph 6 shall be made pursuant to
the provisions of Article III of the First Supplemental Indenture.

          7. Mandatory Redemption.

          The Company shall not be required to make mandatory redemption or sinking fund
payments with respect to the Notes.

          8. Repurchase at Option of Holder.

          (a) If there is a Change of Control Triggering Event, the Company shall be
required to make an offer (a “Change of Control Offer”) to repurchase all or
any part (equal to $1,000 or an integral multiple thereof) of each Holder’s
Notes at a purchase price equal to 101% of the aggregate principal amount
thereof plus accrued and unpaid interest thereon, if any, to the date of
purchase (the “Change of Control Payment”). Within 10 days following any
Change of Control Triggering Event, the Company shall mail a notice to each
Holder setting forth the procedures governing the Change of Control Offer as
required by the First Supplemental Indenture.

          (b) If the Company or a Subsidiary consummates any Asset Sales, within
five days of each date on which the aggregate amount of Excess Proceeds exceeds
$20.0 million, the Company shall commence an offer to all Holders of Notes (as
“Asset Sale Offer”) pursuant to Section 3.09 of the First Supplemental
Indenture to purchase the maximum principal amount of Notes (including any
Additional Notes) that may be purchased out of the Excess Proceeds at an offer
price in cash in an amount equal to 100% of the principal amount thereof plus
accrued and unpaid interest thereon, if any, to the date fixed for the closing
of such offer, in accordance with the procedures set forth in the First
Supplemental Indenture. To the extent that the aggregate amount of Notes
(including any Additional Notes) tendered pursuant to an Asset Sale Offer is
less than the Excess Proceeds, the Company (or such Subsidiary) may use such
deficiency for general corporate purposes. If the aggregate principal amount
of Notes surrendered by Holders thereof exceeds the amount of Excess Proceeds,
the Trustee shall select the Notes to be purchased on a pro rata basis.
Holders of Notes that are the subject of an offer to purchase will receive an
Asset Sale Offer from the Company prior to any related purchase date and may
elect to have such Notes purchased by completing the form entitled “Option of
Holder to Elect Purchase” on the reverse of the Notes.

          9. Notice of Redemption. Notice of redemption will be mailed at least 30
days but not more than 60 days before the redemption date to each Holder whose

5

 

Notes are to be redeemed at its registered address. Notes in denominations
larger than $1,000 may be redeemed in part but only in whole multiples of
$1,000, unless all of the Notes held by a Holder are to be redeemed. On and
after the redemption date interest ceases to accrue on Notes or portions
thereof called for redemption.

          10. Denominations, Transfer, Exchange. The Notes are in registered form
without coupons in denominations of $1,000 and integral multiples of $1,000.
The transfer of Notes may be registered and Notes may be exchanged as provided
in the Indenture. The Registrar and the Trustee may require a Holder, among
other things, to furnish appropriate endorsements and transfer documents and
the Company may require a Holder to pay any taxes and fees required by law or
permitted by the Indenture. The Company need not exchange or register the
transfer of any Note or portion of a Note selected for redemption, except for
the unredeemed portion of any Note being redeemed in part. Also, the Company
need not exchange or register the transfer of any Notes for a period of 15 days
before a selection of Notes to be redeemed or during the period between a
record date and the corresponding Interest Payment Date.

          11. Persons Deemed Owners. The registered Holder of a Note may be treated
as its owner for all purposes.

          12. Amendment, Supplement and Waiver. Subject to certain exceptions, the
Indenture, the Subsidiary Guarantees or the Notes may be amended or
supplemented with the consent of the Holders of at least a majority in
principal amount of the then outstanding Notes and Additional Notes, if any,
voting as a single class, and any existing default or compliance with any
provision of the Indenture, the Subsidiary Guarantees or the Notes may be
waived with the consent of the Holders of a majority in principal amount of the
then outstanding Notes and Additional Notes, if any, voting as a single class.
Without the consent of any Holder of a Note, the Indenture, the Subsidiary
Guarantees or the Notes may be amended or supplemented to cure any ambiguity,
defect or inconsistency, to provide for uncertificated Notes in addition to or
in place of certificated Notes, to provide for the assumption of the Company’s
or Subsidiary Guarantor’s obligations to Holders of the Notes in case of a
merger or consolidation, to make any change that would provide any additional
rights or benefits to the Holders of the Notes or that does not adversely
affect the legal rights under the Indenture of any such Holder, to comply with
the requirements of the SEC in order to effect or maintain the qualification of
the Indenture under the Trust Indenture Act, to provide for the Issuance of
Additional Notes in accordance with the limitations set forth in the Indenture,
or to allow any Subsidiary Guarantor to execute a supplemental Indenture to the
Indenture and/or a Subsidiary Guarantee with respect to the Notes.

          13. Defaults and Remedies. An “Event of Default” occurs if: (i) the
Company defaults in the payment when due of interest on, with respect to, the
Notes and such default continues for a period of 30 days; (ii) the Company
defaults in the payment when due of principal of or premium, if any, on the
Notes when the same becomes due and payable at maturity, upon redemption
(including in connection with an offer to purchase) or otherwise; (iii) the
Company or any of its Subsidiaries fails to make the offer required or to
purchase any of the Notes as required by Sections 4.10 and/or 4.15 of

6

 

the First Supplemental Indenture; (iv) the Company fails to comply for 30
days after written notice to the Company by the Trustee with any of the
provisions of Sections 4.07 or 4.09 of the First Supplemental Indenture; or the
Company fails to observe or perform any other covenant, representation,
warranty or other agreement in the Indenture or the Notes for 60 days after
written notice to the Company by the Trustee or the Holders of at least 25% in
aggregate principal amount of the Notes then outstanding voting as a single
class; (v) a default occurs under any mortgage, indenture or instrument under
which there may be issued or by which there may be secured or evidenced any
Indebtedness for money borrowed by the Company or any of its Restricted
Subsidiaries (or the payment of which is guaranteed by the Company or any of
the Restricted Subsidiaries), whether such Indebtedness or guarantee now
exists, or is created after the date hereof, which default results in the
acceleration of such Indebtedness prior to its express maturity and, in each
case, the principal amount of such Indebtedness aggregates $50.0 million or
more; (vi) a final judgment or final judgments for the payment of money are
entered by a court or courts of competent jurisdiction against the Company or
any of its Subsidiaries that are Restricted Subsidiaries or any group of
Restricted Subsidiaries that, taken as a whole, would constitute a Significant
Subsidiary and such judgment or judgments remain undischarged for a period
(during which execution shall not be effectively stayed) of 60 days, provided
that the aggregate of all such undischarged judgments exceeds $50.0 million;
(vii) certain events of bankruptcy or insolvency occur with respect to the
Company or any of its Significant Subsidiaries that are Restricted Subsidiaries
or any group of Restricted Subsidiaries that, taken as a whole, would
constitute a Significant Subsidiary pursuant to or within the meaning of
Bankruptcy Law; or (viii) except as permitted by the Indenture, any Subsidiary
Guarantee is held in any judicial proceeding to be unenforceable or invalid or
shall cease for any reason to be in full force and effect or any Subsidiary
Guarantor, or any Person acting on behalf of any Subsidiary Guarantor, shall
deny or disaffirm its obligations under such Subsidiary Guarantor’s Subsidiary
Guarantee.

          If any Event of Default (other than an Event of Default specified in
clause (g) or (h) of Section 6.01 of the First Supplemental Indenture with
respect to the Company, any Significant Subsidiary that is a Restricted
Subsidiary or any group of Restricted Subsidiaries that, taken as a whole,
would constitute a Significant Subsidiary) occurs and is continuing, the
Trustee or the Holders of at least 25% in principal amount of the then
outstanding Notes may declare all the Notes to be due and payable immediately;
provided, that so long as any Indebtedness permitted to be incurred pursuant to
the Credit Agreement shall be outstanding, such acceleration shall not be
effective until the earlier of (i) an acceleration under any such Indebtedness
under the Credit Agreement or (ii) five Business Days after receipt by the
Company of written notice of such acceleration of the Notes. Upon any such
declaration, the Notes shall become due and payable immediately.
Notwithstanding the foregoing, if an Event of Default specified in clause (g)
or (h) of Section 6.01 of the First Supplemental Indenture occurs with respect
to the Company, any of its Significant Subsidiaries that are Restricted
Subsidiaries or any group of Restricted Subsidiaries that, taken as a whole,
would constitute a Significant Subsidiary, all outstanding Notes shall be due
and payable without further action or notice. The Holders of a majority in
aggregate principal amount of the then outstanding Notes by written notice to
the Trustee may on behalf of all of the

7

 

Holders rescind an acceleration and its consequences if the rescission
would not conflict with any judgment or decree and if all existing Events of
Default (except nonpayment of principal, interest or premium that has become
due solely because of the acceleration) have been cured or waived.

          14. Trustee Dealings with Company. The Trustee, in its individual or any
other capacity, may make loans to, accept deposits from, and perform services
for the Company or its Affiliates, and may otherwise deal with the Company or
its Affiliates, as if it were not the Trustee.

          15. No Recourse Against Others. A director, officer, employee,
incorporator or stockholder, of the Company, as such, shall not have any
liability for any obligations of the Company under the Notes or the Indenture
or for any claim based on, in respect of, or by reason of, such obligations or
their creation. Each Holder by accepting a Note waives and releases all such
liability. The waiver and release are part of the consideration for the
issuance of the Notes.

          16. Authentication. This Note shall not be valid until authenticated by
the manual signature of the Trustee or an authenticating agent.

          17. Abbreviations. Customary abbreviations may be used in the name of a
Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).

          18. CUSIP Numbers. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company has caused
CUSIP numbers to be printed on the Notes and the Trustee may use CUSIP numbers
in notices of redemption as a convenience to Holders. No representation is
made as to the accuracy of such numbers either as printed on the Notes or as
contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.

8

 

          The Company will furnish to any Holder upon written request and without
charge a copy of the Indenture. Requests may be made to:

	 	Peabody Energy Corporation

701 Market Street

St. Louis, Missouri 63101-1826

Attention: Chief Legal Officer

9

 

Assignment Form

To assign this Note, fill in the form below:

(I) or (we) assign and transfer this Note to

(Insert assignee’s soc. sec. or other tax I.D. no.)

     

(Print or type assignee’s name, address and zip code)

and irrevocably appoint __________________________________________________
as agent to transfer this Note on the books of the Issuer. The agent may
substitute another to act for him.

	 	 	 	 	 	 	 
	Date:

	 	 	 	Your Signature:	 	 
	 	 	
	 	 	 	

	

	 	(Sign exactly as your name appears on the face
of this Note)
	 
	 	 
	

	 	Signature Guarantee:
	 	 	 	 	 	 	

	 
	 	 
	

	 	Signatures must be guaranteed by an “eligible
guarantor institution” meeting the
requirements of the Registrar, which
requirements include membership or
participation in the Security Transfer Agent
Medallion Program (“STAMP”) or such other
“signature guarantee program” as may be
determined by the Registrar in addition to, or
in substitution for, STAMP, all in accordance
with the Securities Exchange Act of 1934, as
amended

10

 

Option of Holder to Elect Purchase

          If you want to elect to have this Note purchased by the Company pursuant
to Section 4.10 or 4.15 of the First Supplemental Indenture, check the box
below:

          o Section 4.10          o Section 4.15

          If you want to elect to have only part of the Note purchased by the
Company pursuant to Section 4.10 or Section 4.15 of the First Supplemental
Indenture, state the amount you elect to have purchased: $   

	 	 	 	 	 	 	 
	Date:

	 	 	 	Your Signature:	 	 
	 	 	
	 	 	 	

	

	 	(Sign exactly as your name appears on
	

	 	the face of this Note)
	 
	 	 
	

	 	Tax Identification No:
	 	 	 	 	

	 
	 	 
	

	 	Signature Guarantee:
	 	 	 	 	

	 
	 	 
	

	 	Signatures must be guaranteed by an “eligible
guarantor institution” meeting the
requirements of the Registrar, which
requirements include membership or
participation in the Security Transfer Agent
Medallion Program (“STAMP”) or such other
“signature guarantee program” as may be
determined by the Registrar in addition to, or
in substitution for, STAMP, all in accordance
with the Securities Exchange Act of 1934, as
amended

 

 

SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE

     The following exchanges of a part of this Global Note for an interest in
another Global Note or for a Definitive Note, or exchanges of a part of another
Global Note or Definitive Note for an interest in this Global Note, have been
made:

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Principal Amount	 	Signature of
	 	 	 	 	 	 	of this Global Note	 	authorized
	 	 	Amount of decrease	 	Amount of increase	 	following such	 	signatory of
	 	 	in Principal Amount	 	in Principal Amount	 	decrease	 	Trustee or
	Date of Exchange
	 	of this Global Note
	 	of this Global Note
	 	(or increase)
	 	Note Custodian

	 
	 	 	 	 	 	 	 	 

12

 

EXHIBIT B

FORM OF NOTATION OF SUBSIDIARY GUARANTEE

          For value received, each Subsidiary Guarantor (which term includes any
successor Person under the Indenture) has, jointly and severally,
unconditionally guaranteed, to the extent set forth in the Indenture and
subject to the provisions in the First Supplemental Indenture dated as of March
23, 2004 to the Indenture dated as of March 19, 2004, (the “Base Indenture,”
and, together with the First Supplemental Indenture, the “Indenture”) among
Peabody Energy Corporation, the Subsidiary Guarantors listed on Schedule I
thereto and U.S. Bank National Association, as Trustee (the “Trustee”), (a) the
due and punctual payment of the principal of, premium, if any, and interest on
the Notes (as defined in the Indenture), whether at maturity, by acceleration,
redemption or otherwise, the due and punctual payment of interest on overdue
principal and premium, and, to the extent permitted by law, interest, and the
due and punctual performance of all other obligations of the Company to the
Holders or the Trustee all in accordance with the terms of the Indenture and
(b) in case of any extension of time of payment or renewal of any Notes or any
of such other obligations, that the same will be promptly paid in full when due
or performed in accordance with the terms of the extension or renewal, whether
at stated maturity, by acceleration or otherwise. The obligations of the
Subsidiary Guarantors to the Holders of Notes and to the Trustee pursuant to
the Subsidiary Guarantee and the Indenture are expressly set forth in Article
IX of the First Supplemental Indenture and reference is hereby made to the
Indenture for the precise terms of the Subsidiary Guarantee. Each Holder of a
Note, by accepting the same, (a) agrees to and shall be bound by such
provisions, (b) authorizes and directs the Trustee, on behalf of such Holder,
to take such action as may be necessary or appropriate to effectuate the
subordination as provided in the Indenture and (c) appoints the Trustee
attorney-in-fact of such Holder for such purpose; provided, however, that the
Indebtedness evidenced by this Subsidiary Guarantee shall cease to be so
subordinated and subject in right of payment upon any defeasance of this Note
in accordance with the provisions of the Indenture.

	 	 	 
	 

	 	AFFINITY MINING COMPANY
	

	 	ARCLAR COMPANY, LLC
	

	 	ARID OPERATIONS INC.
	

	 	BEAVER DAM COAL COMPANY
	

	 	BIG RIDGE, INC.
	

	 	BIG SKY COAL COMPANY
	

	 	BLACK BEAUTY COAL COMPANY
	

	 	BLACK BEAUTY EQUIPMENT COMPANY
	

	 	BLACK BEAUTY HOLDING COMPANY, LLC
	

	 	BLACK BEAUTY MINING, INC.
	

	 	BLACK BEAUTY RESOURCES, INC.
	

	 	BLACK BEAUTY UNDERGROUND, INC.
	

	 	BLACK HILLS MINING COMPANY, LLC

 

 

	 	 	 
	

	 	BLACK STALLION COAL COMPANY, LLC
	

	 	BLACK WALNUT COAL COMPANY
	

	 	BLUEGRASS COAL COMPANY
	

	 	BTU VENEZUELA LLC
	

	 	BTU WORLDWIDE, INC.
	

	 	CABALLO COAL COMPANY
	

	 	CHARLES COAL COMPANY
	

	 	CLEATON COAL COMPANY
	

	 	COAL PROPERTIES CORP.
	

	 	COLONY BAY COAL COMPANY
	

	 	COOK MOUNTAIN COAL COMPANY
	

	 	COTTONWOOD LAND COMPANY
	

	 	CYPRUS CREEK LAND COMPANY
	

	 	CYPRUS CREEK LAND RESOURCES, LLC
	

	 	EAGLE COAL COMPANY
	

	 	EACC CAMPS, INC.
	

	 	EASTERN ASSOCIATED COAL CORP.
	

	 	EASTERN ROYALTY CORP.
	

	 	EMPIRE MARINE, LLC
	

	 	FALCON COAL COMPANY
	

	 	GALLO FINANCE COMPANY
	

	 	GIBCO MOTOR EXPRESS, LLC
	

	 	GOLD FIELDS CHILE, S.A.
	

	 	GOLD FIELDS MINING CORPORATION
	

	 	GOLD FIELDS OPERATING CO.-ORTIZ
	

	 	GRAND EAGLE MINING, INC.
	

	 	HAYDEN GULCH TERMINAL, INC
	

	 	HIGHLAND MINING COMPANY
	

	 	HIGHWALL MINING SERVICES COMPANY
	

	 	HILLSIDE MINING COMPANY
	

	 	INDEPENDENCE MATERIAL HANDLING COMPANY
	

	 	INDIAN HILL COMPANY
	

	 	INTERIOR HOLDINGS CORP.
	

	 	JAMES RIVER COAL TERMINAL COMPANY
	

	 	JARRELL’S BRANCH COAL COMPANY
	

	 	JUNIPER COAL COMPANY
	

	 	KANAWHA RIVER VENTURES I, LLC.
	

	 	KAYENTA MOBILE HOME PARK, INC.
	

	 	LOGAN FORK COAL COMPANY
	

	 	MARTINKA COAL COMPANY
	

	 	MIDCO SUPPLY AND EQUIPMENT CORPORATION

2

 

	 	 	 
	

	 	MIDWEST COAL ACQUISITION CORP.
	

	 	MOUNTAIN VIEW COAL COMPANY
	

	 	MUSTANG ENERGY COMPANY, L.L.C.
	

	 	NORTH PAGE COAL CORP.
	

	 	OHIO COUNTY COAL COMPANY
	

	 	PATRIOT COAL COMPANY, L.P.
	

	 	PDC PARTNERSHIP HOLDINGS, INC.
	

	 	PEABODY AMERICA, INC.
	

	 	PEABODY ARCHVEYOR, L.L.C.
	

	 	PEABODY COALSALES COMPANY
	

	 	PEABODY COALTRADE, INC.
	

	 	PEABODY COAL COMPANY
	

	 	PEABODY DEVELOPMENT COMPANY, LLC
	

	 	PEABODY DEVELOPMENT LAND HOLDINGS, LLC
	

	 	PEABODY ENERGY GENERATION HOLDING COMPANY
	

	 	PEABODY ENERGY INVESTMENTS, INC.
	

	 	PEABODY ENERGY SOLUTIONS, INC.
	

	 	PEABODY HOLDING COMPANY, INC.
	

	 	PEABODY NATURAL GAS, LLC
	

	 	PEABODY POWERTREE INVESTMENTS, LLC
	

	 	PEABODY RECREATIONAL LANDS, L.L.C.
	

	 	PEABODY SOUTHWESTERN COAL COMPANY
	

	 	PEABODY TERMINALS, INC.
	

	 	PEABODY VENEZUELA COAL CORP.
	

	 	PEABODY-WATERSIDE DEVELOPMENT, L.L.C.
	

	 	PEABODY WESTERN COAL COMPANY
	

	 	PEC EQUIPMENT COMPANY LLC
	

	 	PINE RIDGE COAL COMPANY
	

	 	POINT PLEASANT DOCK COMPANY LLC
	

	 	POND CREEK LAND RESOURCES, LLC
	

	 	POND RIVER LAND COMPANY
	

	 	PORCUPINE PRODUCTION, LLC
	

	 	PORCUPINE TRANSPORTATION, LLC
	

	 	POWDER RIVER COAL COMPANY
	

	 	PRAIRIE STATE GENERATING COMPANY, LLC
	

	 	RIO ESCONDIDO COAL CORP.
	

	 	RIVER’S EDGE MINING, INC.
	

	 	RIVERVIEW TERMINAL COMPANY

3

 

	 	 	 
	

	 	SENECA COAL COMPANY
	

	 	SENTRY MINING COMPANY
	

	 	SNOWBERRY LAND COMPANY
	

	 	STAR LAKE ENERGY COMPANY, L.L.C.
	

	 	STERLING SMOKELESS COAL COMPANY
	

	 	SUGAR CAMP PROPERTIES
	

	 	THOROUGHBRED, L.L.C.
	

	 	THOROUGHBRED GENERATING COMPANY, LLC
	

	 	THOROUGHBRED MINING COMPANY, L.L.C.
	

	 	WILLIAMSVILLE COAL COMPANY, LLC
	

	 	YANKEETOWN DOCK CORPORATION

	 	 	 	 	 
	

	 	By:	 	 
	

	 	 	 	
 
	

	 	Name:
	 	Walter L. Hawkins, Jr.
	

	 	Title:
	 	Vice President and Treasurer
	 
	 	 	 	 
	 	 	COLONY BAY COAL COMPANY
	 	 	By: Eastern Associated Coal Corp., its general partner
	 
	 	 	 	 
	

	 	By:	 	 
	

	 	 	 	
 
	

	 	Name:
	 	Walter L. Hawkins, Jr.
	

	 	Title:
	 	Vice President and Treasurer
	 
	 	 	 	 
	 	 	By: Charles Coal Company, its general partner
	 
	 	 	 	 
	

	 	By:	 	 
	

	 	 	 	
 
	

	 	Name:
	 	Walter L. Hawkins, Jr.

4

 

	 	 	 	 	 
	

	 	Title:
	 	Vice President and Treasurer
	 
	 	 	 	 
	 	 	PATRIOT COAL COMPANY, L.P.
	 
	 	 	 	 
	 	 	By: Bluegrass Coal Company, its managing partner
	 
	 	 	 	 
	

	 	By:	 	 
	

	 	 	 	
 
	

	 	Name:
	 	Walter L. Hawkins, Jr.
	

	 	Title:
	 	Vice President and Treasurer
	 
	 	 	 	 
	 	 	PEABODY NATURAL RESOURCES COMPANY
	 
	 	 	 	 
	 	 	By: Gold Fields Mining Corporation, its general partner
	 
	 	 	 	 
	

	 	By:	 	 
	

	 	 	 	
 
	

	 	Name:
	 	Walter L. Hawkins, Jr.
	

	 	Title:
	 	Vice President and Treasurer
	 
	 	 	 	 
	 	 	By: Peabody America, Inc., its general partner
	 
	 	 	 	 
	

	 	By:	 	 
	

	 	 	 	
 
	

	 	Name:
	 	Walter L. Hawkins, Jr.
	

	 	Title:
	 	Vice President and Treasurer

5

 

EXHIBIT C

FORM OF SUPPLEMENTAL INDENTURE

TO BE DELIVERED BY SUBSEQUENT SUBSIDIARY GUARANTORS

          Supplemental Indenture (this “Supplemental Indenture”), dated as of
   , among    (the “Guaranteeing Subsidiary”), a
subsidiary of Peabody Energy Corporation (or its permitted successor), a
Delaware corporation (the “Company”), the Company, the other Subsidiary
Guarantors (as defined in the Indenture referred to herein) and U.S. Bank
National Association, as Trustee under the Indenture referred to below (the
“Trustee”).

W I T N E S S E T H

          WHEREAS, the Company has heretofore executed and delivered to the Trustee
the First Supplemental Indenture dated as of March 23, 2004 to the Indenture
dated as of March 19, 2004, (the “Base Indenture,” and, together with the First
Supplemental Indenture, the “Indenture”) providing for the issuance of an
unlimited amount of 5?% Senior Notes due 2016 (the “Notes”);

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

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

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

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

          2. Agreement to Guarantee. The Guaranteeing Subsidiary hereby agrees as
follows:

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

 

 

	 	(i)	 	the principal of and interest on
the Notes will be promptly paid in full when due,
whether at maturity, by acceleration, redemption or
otherwise, and interest on the overdue principal of
and interest on the Notes, if any, if lawful, and all
other obligations of the Company to the Holders or the
Trustee hereunder or thereunder will be promptly paid
in full or performed, all in accordance with the terms
hereof and thereof; and
	 
	 	(ii)	 	in case of any extension of time
of payment or renewal of any Notes or any of such
other obligations, that same will be promptly paid in
full when due or performed in accordance with the
terms of the extension or renewal, whether at stated
maturity, by acceleration or otherwise. Failing
payment when due of any amount so guaranteed or any
performance so guaranteed for whatever reason, the
Subsidiary Guarantors shall be jointly and severally
obligated to pay the same immediately.

	 	(b)	 	The obligations hereunder shall be
unconditional, irrespective of the validity, regularity or
enforceability of the Notes or the Indenture, the absence of
any action to enforce the same, any waiver or consent by any
Holder of the Notes with respect to any provisions hereof or
thereof, the recovery of any judgment against the Company,
any action to enforce the same or any other circumstance
which might otherwise constitute a legal or equitable
discharge or defense of a Subsidiary Guarantor.
	 
	 	(c)	 	The following is hereby waived: diligence
presentment, demand of payment, filing of claims with a court
in the event of insolvency or bankruptcy of the Company, any
right to require a proceeding first against the Company,
protest, notice and all demands whatsoever.
	 
	 	(d)	 	This Subsidiary Guarantee shall not be
discharged except by complete performance of the obligations
contained in the Notes and the Indenture.
	 
	 	(e)	 	If any Holder or the Trustee is required by any
court or otherwise to return to the Company, the Subsidiary
Guarantors, or any custodian, Trustee, liquidator or other
similar official acting in relation to either the Company or
the Subsidiary Guarantors, any amount paid by either to the
Trustee or such Holder, this Subsidiary Guarantee, to the
extent theretofore discharged, shall be reinstated in full
force and effect.

2

 

	 	(f)	 	The Guaranteeing Subsidiary shall not be
entitled to any right of subrogation in relation to the
Holders in respect of any obligations guaranteed hereby until
payment in full of all obligations guaranteed hereby.
	 
	 	(g)	 	As between the Subsidiary Guarantors, on the
one hand, and the Holders and the Trustee, on the other hand,
(x) the maturity of the obligations guaranteed hereby may be
accelerated as provided in Article 6 of the First
Supplemental Indenture for the purposes of this Subsidiary
Guarantee, notwithstanding any stay, injunction or other
prohibition preventing such acceleration in respect of the
obligations guaranteed hereby, and (y) in the event of any
declaration of acceleration of such obligations as provided
in Article 6 of the First Supplemental Indenture, such
obligations (whether or not due and payable) shall forthwith
become due and payable by the Subsidiary Guarantors for the
purpose of this Subsidiary Guarantee.
	 
	 	(h)	 	The Subsidiary Guarantors shall have the right
to seek contribution from any non-paying Subsidiary Guarantor
so long as the exercise of such right does not impair the
rights of the Holders under the Subsidiary Guarantee.
	 
	 	(i)	 	Pursuant to Section 9.04 of the First
Supplemental Indenture, after giving effect to any maximum
amount and any other contingent and fixed liabilities that
are relevant under any applicable Bankruptcy or fraudulent
conveyance laws, and after giving effect to any collections
from, rights to receive contribution from or payments made by
or on behalf of any other Subsidiary Guarantor in respect of
the obligations of such other Subsidiary Guarantor under
Article 9 of the First Supplemental Indenture shall result in
the obligations of such Subsidiary Guarantor under its
Subsidiary Guarantee not constituting a fraudulent transfer
or conveyance.

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

          4. Guaranteeing Subsidiary May Consolidate, Etc. on Certain Terms.

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

3

 

	 	(i)	 	subject to Section 9.04 of the
First Supplemental Indenture, the Person formed by or
surviving any such consolidation or merger (if other
than a Subsidiary Guarantor or the Company)
unconditionally assumes all the obligations of such
Subsidiary Guarantor, pursuant to a supplemental
Indenture in form and substance reasonably
satisfactory to the Trustee, under the Notes, the
Indenture and the Subsidiary Guarantee on the terms
set forth herein or therein; and
	 
	 	(ii)	 	immediately after giving effect
to such transaction, no Default or Event of Default
exists.

	 	(b)	 	In case of any such consolidation, merger, sale
or conveyance and upon the assumption by the successor
corporation, by supplemental Indenture, executed and
delivered to the Trustee and satisfactory in form to the
Trustee, of the Subsidiary Guarantee endorsed upon the Notes
and the due and punctual performance of all of the covenants
and conditions of the Indenture to be performed by the
Subsidiary Guarantor, such successor corporation shall
succeed to and be substituted for the Subsidiary Guarantor
with the same effect as if it had been named herein as a
Subsidiary Guarantor. Such successor corporation thereupon
may cause to be signed any or all of the Subsidiary
Guarantees to be endorsed upon all of the Notes issuable
hereunder which theretofore shall not have been signed by the
Company and delivered to the Trustee. All the Subsidiary
Guarantees so issued shall in all respects have the same
legal rank and benefit under the Indenture as the Subsidiary
Guarantees theretofore and thereafter issued in accordance
with the terms of the Indenture as though all of such
Subsidiary Guarantees had been issued at the date of the
execution hereof.
	 
	 	(c)	 	Except as set forth in Articles 4 and 5 of the
First Supplemental Indenture, and notwithstanding clauses (a)
and (b) above, nothing contained in the Indenture or in any
of the Notes shall prevent any consolidation or merger of a
Subsidiary Guarantor with or into the Company or another
Subsidiary Guarantor, or shall prevent any sale or conveyance
of the property of a Subsidiary Guarantor as an entirety or
substantially as an entirety to the Company or another
Subsidiary Guarantor.

      5. Releases.

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

4

 

	 	 	 	any Subsidiary Guarantor, then such Subsidiary Guarantor
(in the event of a sale or other disposition, by way of
merger, consolidation or otherwise, of all of the capital
stock of such Subsidiary Guarantor) or the corporation
acquiring the property (in the event of a sale or other
disposition of all or substantially all of the assets of
such Subsidiary Guarantor) will be released and relieved of
any obligations under its Subsidiary Guarantee; provided
that the Net Proceeds of such sale or other disposition are
applied in accordance with the applicable provisions of the
Indenture, including without limitation Section 4.10 of the
Indenture. Upon delivery by the Company to the Trustee of
an Officer’s Certificate and an Opinion of Counsel to the
effect that such sale or other disposition was made by the
Company in accordance with the provisions of the Indenture,
including without limitation Section 4.10 of the First
Supplemental Indenture, the Trustee shall execute any
documents reasonably required in order to evidence the
release of any Subsidiary Guarantor from its obligations
under its Subsidiary Guarantee.
	 
	 	(b)	 	Any Subsidiary Guarantor not released from its
obligations under its Subsidiary Guarantee shall remain
liable for the full amount of principal of and interest on
the Notes and for the other obligations of any Subsidiary
Guarantor under the Indenture as provided in Article 9 of the
First Supplemental Indenture.

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

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

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

      9. Effect of Headings. The Section headings herein are for convenience
only and shall not affect the construction hereof.

5

 

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

6

 

          IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed and attested, all as of the date first above
written.

Dated:

	 	 	 	 	 
	 	[Guaranteeing Subsidiary]

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

	 	 	 	 	 
	 	Peabody Energy Corporation

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

	 	 	 	 	 
	 	[EXISTING SUBSIDIARY NOTE GUARANTORS]

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

	 	 	 	 	 
	 	U.S. Bank National Association as Trustee

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

7

 

	 	 	 	 	 

Schedule I

SCHEDULE OF SUBSIDIARY GUARANTORS

          The following schedule lists each Subsidiary Guarantor under the Indenture
as of the Issue Date:

	 
	1. Affinity Mining Company, a West Virginia corporation

	 

	2. Arclar Company, LLC, an Indiana limited liability company

	 

	3. Arid Operations Inc., a Delaware corporation

	 

	4. Beaver Dam Coal Company, a Delaware corporation

	 

	5. Big Ridge, Inc., an Illinois corporation

	 

	6. Big Sky Coal Company, a Delaware corporation

	 

	7. Black Beauty Coal Company, an Indiana corporation

	 

	8. Black Beauty Equipment Company, an Indiana partnership

	 

	9. Black Beauty Holding Company, LLC, a Delaware limited liability company

	 

	10. Black Beauty Mining, Inc., an Indiana corporation

	 

	11. Black Beauty Resources, Inc., an Indiana corporation

	 

	12. Black Beauty Underground, Inc., an Indiana corporation

	 

	13. Black Hills Mining Company, LLC, an Illinois limited liability company

	 

	14. Black Stallion Coal Company, LLC, a Delaware limited liability company

	 

	15. Black Walnut Coal Company, a Delaware corporation

	 

	16. Bluegrass Coal Company, a Delaware corporation

	 

	17. BTU Venezuela LLC, a Delaware limited liability company

	 

	18. BTU Worldwide, Inc., a Delaware corporation

	 

	19. Caballo Coal Company, a Delaware corporation

	 

	20. Charles Coal Company, a Delaware corporation

	 

	21. Cleaton Coal Company, a Delaware corporation

	 

	22. Coal Properties Corp., a Delaware corporation

	 

	23. Colony Bay Coal Company, a West Virginia general partnership

	 

	24. Cook Mountain Coal Company, a Delaware corporation

	 

	25. Cottonwood Land Company, a Delaware corporation

	 

	26. Cyprus Creek Land Company, a Delaware corporation

	 

	27. Cyprus Creek Land Resources, LLC, a Delaware limited liability company

	 

	28. EACC Camps, Inc., a West Virginia corporation

	 

	29. Eagle Coal Company, an Indiana corporation

	 

	30. Eastern Associated Coal Corp., a West Virginia corporation

	 

	31. Eastern Royalty Corp., a Delaware corporation

	 

	32. Empire Marine, LLC, an Indiana limited liability company

	 

	33. Falcon Coal Company, an Indiana partnership

	 

	34. Gallo Finance Company, a Delaware corporation

	 

	35. GIBCO Motor Express, LLC, an Indiana limited liability company

	 

	36. Gold Fields Chile, S.A., a Delaware corporation

	 

	37. Gold Fields Mining Corporation, a Delaware corporation

	 

	38. Gold Fields Operating Co.-Ortiz, a Delaware corporation

	 

	39. Grand Eagle Mining, Inc., a Kentucky corporation

 

 

	 
	40. Hayden Gulch Terminal, Inc., a Delaware corporation

	 

	41. Highland Mining Company, a Delaware corporation

	 

	42. Highwall Mining Services Company, a Delaware corporation

	 

	43. Hillside Mining Company, a West Virginia corporation

	 

	44. Independence Material Handling Company, a Delaware corporation

	 

	45. Indian Hill Company, a Delaware corporation

	 

	46. Interior Holdings Corp., a Delaware corporation

	 

	47. James River Coal Terminal Company, a Delaware corporation

	 

	48. Jarrell’s Branch Coal Company, a Delaware corporation

	 

	49. Juniper Coal Company, a Delaware corporation

	 

	50. Kanawha River Ventures I, LLC, a West Virginia limited liability company

	 

	51. Kayenta Mobile Home Park, Inc., a Delaware corporation

	 

	52. Logan Fork Coal Company, a Delaware corporation

	 

	53. Martinka Coal Company, a Delaware corporation

	 

	54. Midco Supply and Equipment Corporation, an Illinois corporation

	 

	55. Midwest Coal Acquisition Corp., a Delaware corporation

	 

	56. Mountain View Coal Company, a Delaware corporation

	 

	57. Mustang Energy Company, L.L.C., a Delaware limited liability company

	 

	58. North Page Coal Corp., a West Virginia corporation

	 

	59. Ohio County Coal Company, a Kentucky corporation

	 

	60. Patriot Coal Company, L.P., a Delaware limited partnership

	 

	61. PDC Partnership Holdings, Inc., a Delaware corporation

	 

	62. Peabody America, Inc., a Delaware corporation

	 

	63. Peabody Archveyor, L.L.C., a Delaware limited liability company

	 

	64. Peabody COALSALES Company, a Delaware corporation

	 

	65. Peabody COALTRADE, Inc., a Delaware corporation

	 

	66. Peabody Coal Company, a Delaware corporation

	 

	67. Peabody Development Company, LLC, a Delaware limited liability company

	 

	68. Peabody Development Land Holdings, LLC, a Delaware limited liability
company

	 

	69. Peabody Energy Generation Holding Company, a Delaware corporation

	 

	70. Peabody Energy Investments, Inc., a Delaware corporation

	 

	71. Peabody Energy Solutions, Inc., a Delaware corporation

	 

	72. Peabody Holding Company, Inc., a New York corporation

	 

	73. Peabody Natural Gas, LLC, a Delaware limited liability company

	 

	74. Peabody Natural Resources Company, a Delaware general partnership

	 

	75. Peabody PowerTree Investments, LLC, a Delaware limited liability company

	 

	76. Peabody Recreational Lands, L.L.C., a Delaware limited liability company

	 

	77. Peabody Southwestern Coal Company, a Delaware corporation

	 

	78. Peabody Terminals, Inc., a Delaware corporation

	 

	79. Peabody Venezuela Coal Corp., a Delaware corporation

	 

	80. Peabody-Waterside Development, L.L.C., a Delaware limited liability
company

	 

	81. Peabody Western Coal Company, a Delaware corporation

	 

	82. PEC Equipment Company, LLC, a Delaware corporation

	 

	83. Pine Ridge Coal Company, a Delaware corporation

2

 

	 
	84. Point Pleasant Dock Company, LLC, a Delaware limited liability company

	 

	85. Pond Creek Land Resources, LLC, a Delaware limited liability company

	 

	86. Pond River Land Company, a Delaware corporation

	 

	87. Porcupine Production, LLC, a Delaware limited liability company

	 

	88. Porcupine Transportation, LLC, a Delaware limited liability company

	 

	89. Powder River Coal Company, a Delaware corporation

	 

	90. Prairie State Generating Company, LLC, a Delaware limited liability
company

	 

	91. Rio Escondido Coal Corp., a Delaware corporation

	 

	92. River’s Edge Mining, Inc., a Delaware corporation

	 

	93. Riverview Terminal Company, a Delaware corporation

	 

	94. Seneca Coal Company, a Delaware corporation

	 

	95. Sentry Mining Company, a Delaware corporation

	 

	96. Snowberry Land Company, a Delaware corporation

	 

	97. Star Lake Energy Company, L.L.C., a Delaware limited liability company

	 

	98. Sterling Smokeless Coal Company, a West Virginia corporation

	 

	99. Sugar Camp Properties, an Indiana corporation

	 

	100. Thoroughbred, L.L.C., a Delaware limited liability company

	 

	101. Thoroughbred Generating Company, LLC, a Delaware limited liability
company

	 

	102. Thoroughbred Mining Company, L.L.C., a Delaware limited liability company

	 

	103. Williamsville Coal Company, LLC, a Delaware limited liability company

	 

	104. Yankeetown Dock Corporation, an Indiana corporation

3

 

CROSS-REFERENCE TABLE*

	 	 	 	 
	 	 	Note	 
	Trust Indenture Act Section	 	Indenture Section	 
	310 (a) (1)
	 	6.09 (Base Indenture)	 
	(a) (2)
	 	6.09 (Base Indenture)	 
	(a) (3)
	 	N. A.	 
	(a) (4)
	 	N.A.	 
	(b)
	 	6.08 (Base Indenture)	 
	 
	 	6.10 (Base Indenture)	 
	311 (a)
	 	6.13(a) (Base Indenture)	 
	(b)
	 	6.13(b) (Base Indenture)	 
	(c)
	 	N.A.	 
	312 (a)
	 	2.05; 7.01 (Base Indenture)	 
	(b)
	 	7.02(b) (Base Indenture)	 
	(c)
	 	7.02(c) (Base Indenture)	 
	313 (a)
	 	7.03(a) (Base Indenture)	 
	(b)
	 	7.03(b) (Base Indenture)	 
	(c)
	 	7.03(b) and (c) (Base Indenture)	 
	(d)
	 	7.03 (c) (Base Indenture).	 
	314 (a)
	 	4.03	 
	(c) (1)
	 	1.02 (Base Indenture)	 
	(c) (2)
	 	1.02 (Base Indenture)	 
	(c) (3)
	 	N.A.	 
	(e)
	 	1.02 (Base Indenture)	 
	(f)
	 	N.A.	 
	315 (a)
	 	6.01(a) (Base Indenture)	 
	(b)
	 	6.02 (Base Indenture)	 
	(c)
	 	6.01(b) (Base Indenture)	 
	(d)
	 	6.01(c) (Base Indenture)	 
	(d)(1)
	 	6.01(c) (Base Indenture)	 
	(d)(2)
	 	6.01(c)(2)	 
	(d)(3)
	 	6.01(c)(3)	 
	(e)
	 	6.11	 
	316 (a)
	 	5.08 (Base Indenture)	 

 

 

	 	 	 	 
	 	 	Note	 
	Trust Indenture Act Section	 	Indenture Section	 
	(a) (1) (A)
	 	6.05	 
	(a) (1) (B)
	 	6.04	 
	(a) (2)
	 	N.A.	 
	(b)
	 	6.07	 
	(B) (c)
	 	2.12	 
	317 (a) (1)
	 	6.08	 
	(a) (2)
	 	6.09	 
	(b)
	 	2.04	 
	318 (a)
	 	1.07 (Base Indenture)	 
	(b)
	 	N.A.	 

N.A. means not applicable.

* This Cross-Reference Table is not part of the Indenture.

5

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	Page
	 	 	 	 
	ARTICLE I
	DEFINITIONS AND INCORPORATION BY REFERENCE	 	 	1	 	 	 	 	 
	Section 1.01.
	 	Definitions	 	 	1	 	 	 	 	 
	Section 1.02.
	 	Other Definitions	 	 	19	 	 	 	 	 
	Section 1.03.
	 	Incorporation by Reference of Trust Indenture Act	 	 	19	 	 	 	 	 
	Section 1.04.
	 	Rules of Construction	 	 	20	 	 	 	 	 
	Section 1.05.
	 	Miscellaneous	 	 	20	 	 	 	 	 
	ARTICLE II
	THE NOTES	 	 	21	 	 	 	 	 
	Section 2.01.
	 	Form and Dating	 	 	21	 	 	 	 	 
	Section 2.02.
	 	Execution and Authentication	 	 	22	 	 	 	 	 
	Section 2.03.
	 	Registrar and Paying Agent	 	 	22	 	 	 	 	 
	Section 2.04.
	 	Paying Agent to Hold Money in Trust	 	 	23	 	 	 	 	 
	Section 2.05.
	 	Holder Lists	 	 	23	 	 	 	 	 
	Section 2.06.
	 	Transfer and Exchange	 	 	23	 	 	 	 	 
	Section 2.07.
	 	Outstanding Notes	 	 	27	 	 	 	 	 
	Section 2.08.
	 	Treasury Notes	 	 	28	 	 	 	 	 
	ARTICLE III
	REDEMPTION AND PREPAYMENT	 	 	28	 	 	 	 	 
	Section 3.01.
	 	Notices to Trustee	 	 	28	 	 	 	 	 
	Section 3.02.
	 	Selection of Notes to be Redeemed	 	 	28	 	 	 	 	 
	Section 3.03.
	 	Notice of Redemption	 	 	29	 	 	 	 	 
	Section 3.04.
	 	Effect of Notice of Redemption	 	 	30	 	 	 	 	 
	Section 3.05.
	 	Deposit of Redemption Price	 	 	30	 	 	 	 	 
	Section 3.06.
	 	Notes Redeemed in Part	 	 	30	 	 	 	 	 
	Section 3.07.
	 	Optional Redemption	 	 	30	 	 	 	 	 
	Section 3.08.
	 	Mandatory Redemption	 	 	31	 	 	 	 	 
	Section 3.09.
	 	Offer to Purchase by Application of Excess Proceeds	 	 	31	 	 	 	 	 
	ARTICLE IV
	COVENANTS	 	 	33	 	 	 	 	 
	Section 4.01.
	 	Payment of Notes	 	 	33	 	 	 	 	 
	Section 4.02.
	 	Maintenance of Office or Agency	 	 	34	 	 	 	 	 
	Section 4.03.
	 	Reports	 	 	34	 	 	 	 	 

i

 

TABLE OF CONTENTS
(continued)

	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	Page
	 	 	 	 
	Section 4.04.
	 	Compliance Certificate	 	 	35	 	 	 	 	 
	Section 4.05.
	 	Taxes	 	 	36	 	 	 	 	 
	Section 4.06.
	 	Stay, Extension and Usury Laws	 	 	36	 	 	 	 	 
	Section 4.07.
	 	Restricted Payments	 	 	36	 	 	 	 	 
	Section 4.08.
	 	Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries	 	 	40	 	 	 	 	 
	Section 4.09.
	 	Incurrence of Indebtedness and Issuance of Preferred Stock	 	 	41	 	 	 	 	 
	Section 4.10.
	 	Asset Sales	 	 	45	 	 	 	 	 
	Section 4.11.
	 	Transactions With Affiliates	 	 	46	 	 	 	 	 
	Section 4.12.
	 	Liens	 	 	48	 	 	 	 	 
	Section 4.13.
	 	Business Activities	 	 	48	 	 	 	 	 
	Section 4.14.
	 	Corporate Existence	 	 	48	 	 	 	 	 
	Section 4.15.
	 	Offer To Repurchase Upon Change of Control Triggering Event	 	 	48	 	 	 	 	 
	Section 4.16.
	 	Additional Subsidiary Guarantees	 	 	49	 	 	 	 	 
	Section 4.17.
	 	Payments for Consents	 	 	50	 	 	 	 	 
	Section 4.18.
	 	Covenant Termination	 	 	50	 	 	 	 	 
	ARTICLE V
	SUCCESSORS	 	 	51	 	 	 	 	 
	Section 5.01.
	 	Merger, Consolidation or Sale of Assets	 	 	51	 	 	 	 	 
	Section 5.02.
	 	Successor Corporation Substituted	 	 	52	 	 	 	 	 
	ARTICLE VI
	DEFAULTS AND REMEDIES	 	 	52	 	 	 	 	 
	Section 6.01.
	 	Events of Default	 	 	52	 	 	 	 	 
	Section 6.02.
	 	Acceleration	 	 	54	 	 	 	 	 
	Section 6.03.
	 	Other Remedies	 	 	54	 	 	 	 	 
	Section 6.04.
	 	Waiver of Past Defaults	 	 	55	 	 	 	 	 
	Section 6.05.
	 	Control by Majority	 	 	55	 	 	 	 	 
	Section 6.06.
	 	Limitation on Suits	 	 	55	 	 	 	 	 
	Section 6.07.
	 	Rights of Holders of Notes to Receive Payment	 	 	56	 	 	 	 	 
	Section 6.08.
	 	Collection Suit by Trustee	 	 	56	 	 	 	 	 

ii

 

TABLE OF CONTENTS
(continued)

	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	Page
	 	 	 	 
	Section 6.09.
	 	Trustee May File Proofs of Claim	 	 	56	 	 	 	 	 
	Section 6.10.
	 	Priorities	 	 	57	 	 	 	 	 
	Section 6.11.
	 	Undertaking for Costs	 	 	57	 	 	 	 	 
	ARTICLE VII
	LEGAL DEFEASANCE AND COVENANT DEFEASANCE	 	 	58	 	 	 	 	 
	Section 7.01.
	 	Option to Effect Legal Defeasance or Covenant Defeasance	 	 	58	 	 	 	 	 
	Section 7.02.
	 	Legal Defeasance and Discharge	 	 	58	 	 	 	 	 
	Section 7.03.
	 	Covenant Defeasance	 	 	58	 	 	 	 	 
	Section 7.04.
	 	Conditions to Legal or Covenant Defeasance	 	 	59	 	 	 	 	 
	Section 7.05.
	 	Deposited Money and Government Securities to be Held in Trust; Other Miscellaneous Provisions	 	 	60	 	 	 	 	 
	Section 7.06.
	 	Repayment to Company	 	 	61	 	 	 	 	 
	Section 7.07.
	 	Reinstatement	 	 	61	 	 	 	 	 
	ARTICLE VIII
	AMENDMENT, SUPPLEMENT AND WAIVER	 	 	62	 	 	 	 	 
	Section 8.01.
	 	Without Consent of Holders of Notes	 	 	62	 	 	 	 	 
	Section 8.02.
	 	With Consent of Holders of Notes	 	 	63	 	 	 	 	 
	Section 8.03.
	 	Compliance with Trust Indenture Act	 	 	65	 	 	 	 	 
	Section 8.04.
	 	Revocation and Effect of Consents	 	 	65	 	 	 	 	 
	Section 8.05.
	 	Notation on or Exchange of Notes	 	 	65	 	 	 	 	 
	Section 8.06.
	 	Trustee to Sign Amendments, etc	 	 	65	 	 	 	 	 
	ARTICLE IX
	SUBSIDIARY GUARANTEES	 	 	66	 	 	 	 	 
	Section 9.01.
	 	Guarantee	 	 	66	 	 	 	 	 
	Section 9.02.
	 	Limitation on Subsidiary Guarantor Liability	 	 	68	 	 	 	 	 
	Section 9.03.
	 	Execution and Delivery of Subsidiary Guarantee	 	 	68	 	 	 	 	 
	Section 9.04.
	 	Subsidiary Guarantors May Consolidate, etc., on Certain Terms	 	 	69	 	 	 	 	 
	Section 9.05.
	 	Releases Following Sale of Assets	 	 	70	 	 	 	 	 

iii

 

	 	 	 
	EXHIBITS
	 	 
	 
	Exhibit A
Exhibit B
Exhibit C

	 	FORM OF NOTE

FORM OF SUBSIDIARY GUARANTEE

FORM OF SUPPLEMENTAL INDENTURE
	 
	SCHEDULES
	 	 
	 
	Schedule I

	 	Schedule of Subsidiary Guarantors

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