Document:

<PAGE>

                                                                   EXHIBIT 10.1

                                  ANIXTER INC.

                     SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

                                 EFFECTIVE AS OF
                                 AUGUST 4, 2004

<PAGE>

                                  ANIXTER INC.

                     SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

                      SECTION 1. ESTABLISHMENT OF THE PLAN

1.1      Establishment of the Plan.  Anixter Inc. (the "Corporation") hereby
         establishes the ANIXTER INC. SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
         (the "Plan") effective as of August 4, 2004.

1.2      Description of the Plan. This Plan is intended to constitute a
         nonqualified deferred compensation plan which, in accordance with ERISA
         Sections 201(2), 301(a)(3) and 401(a)(1), is unfunded and established
         primarily for the purpose of providing deferred compensation for a
         select group of management or highly compensated employees.

1.3      Purpose of the Plan. In addition to the description of the Plan as set
         forth in subsection 1.2 above, the primary objective of the Corporation
         in establishing this Plan is to provide supplemental retirement income
         to certain employees of the Company in addition to that provided
         through all other sources.

                             SECTION 2. DEFINITIONS

2.1      Definitions. Whenever used in the Plan, the following terms shall have
         the respective meanings set forth below, unless otherwise expressly
         provided herein or unless a different meaning is plainly required by
         the context, and when the defined meaning is intended, the term is
         capitalized. Other terms used herein without definition shall have the
         meanings ascribed to them in the Anixter Inc. Pension Plan as amended
         and restated from time to time or, if no such meaning is ascribed, the
         meanings attributed to them by the Committee in its reasonable
         discretion.

         (a)      "Beneficiary" means any person or entity designated by the
                  Participant or otherwise entitled to receive any benefits
                  under the Plan which may be due upon the Participant's death.

         (b)      "Board" means the Board of Directors of the Corporation.

         (c)      "Cause" has the meaning set forth in any employment or other
                  written agreement between the Participant and the Company. If
                  there is no employment or other written agreement between the
                  Participant and the Company, or if such agreement does not
                  define "Cause," then "Cause" shall mean the Participant's:

                  (1)      repeated material failure to follow appropriate
                           instructions;

<PAGE>

                  (2)      material breach of his fiduciary obligations to the
                           Company; or

                  (3)      commission of dishonest acts that in the reasonable
                           judgment of the Company makes the continuation of
                           Participant's employment inappropriate.

                  In the absence of anything to the contrary contained in a
                  Participant's employment agreement (if any), the Committee has
                  the discretion to determine, in good faith, from all the facts
                  and circumstances reasonably available to it, whether Cause
                  exists.

         (d)      "Committee" means the Anixter Inc. Employee Benefits
                  Administrative Committee.

         (e)      "Company" means the Corporation and any subsidiaries of the
                  Corporation and their successor(s) or assign(s) that adopt
                  this Plan with the approval by resolution of the Board.

         (f)      "Compensation Committee" means the Anixter International Inc.
                  Compensation Committee.

         (g)      "Corporation" means Anixter Inc., a Delaware corporation, or
                  any successor thereto.

         (h)      "Eligible Employee" means an Employee who is so designated by
                  the Committee and approved by the Compensation Committee.

         (i)      "Employee" means a person who is actively employed by the
                  Company and who falls under the usual common law rules
                  applicable in determining the employer-employee relationship.

         (j)      "Life Annuity" means an annuity that is paid to the retired
                  Participant for as long as he lives and which does not provide
                  any payments to a Beneficiary. The amount of this annuity is
                  determined by the benefit formula in Section 4.

         (k)      "Monthly Salary" means the Salary paid to the Participant
                  during the applicable month. Monthly Salary shall be based
                  upon the Salary paid for completed months.

         (l)      "Normal Retirement Date" means the first of the month
                  coincident with or next following the attainment of the
                  Participant's sixty-fifth birthday, unless otherwise specified
                  by the Committee.

         (m)      "Participant" means any Eligible Employee who is participating
                  in the Plan in accordance with the provisions herein set
                  forth.

         (n)      "Plan" means this plan, the Anixter Inc. Supplemental
                  Executive Retirement Plan.

                                       2

<PAGE>

         (o)      "Plan Administrator" means the Anixter Inc. Employee Benefits
                  Administrative Committee.

         (p)      "Present Value" means the commuted present value lump sum of
                  any amounts owed at the time of any such calculation (using
                  the mortality assumptions used for the calculation of benefits
                  under the Anixter Inc. Pension Plan), which shall be
                  discounted to present value at a reasonable interest rate as
                  determined by the Committee (or its designee) in its sole
                  discretion.

         (q)      "Qualified Pension Benefit" means the Participant's Normal
                  Form Life Annuity benefit payable from the Anixter Inc.
                  Pension Plan.

         (r)      "Retirement" means any termination of employment with the
                  Company, other than termination by the Company for Cause, on
                  or after attaining his or her Normal Retirement Date or, with
                  respect to any Participant, the Committee has determined in
                  its sole discretion that such Participant is no longer
                  regularly engaged in the provision of services to the Company,
                  regardless of the Participant's payroll status.

         (s)      "Retirement Date" means the first day of the month coincident
                  with or next following the date when a Participant retires
                  after attaining his or her Normal Retirement Date.

         (t)      "Salary" means the remuneration paid to a Participant during a
                  Plan Year, including overtime, regular bonus amounts or
                  commissions in lieu of regular bonus amounts, before reduction
                  for amounts deferred pursuant to any plan of the Corporation
                  (including, without limitation, any tax-qualified or
                  non-qualified plans of deferred compensation and any cafeteria
                  plans, as defined in section 125 of the Internal Revenue
                  Code), but excluding special performance bonus amounts,
                  signing and relocation bonuses, extraordinary commissions, any
                  amounts or payments received from a nonqualified deferred
                  compensation plan, stock option, phantom stock option or
                  similar long-term incentive plan maintained by the Company,
                  severance pay, and other extraordinary payments.

2.2      Gender and Number. Except when otherwise indicated by the context, any
         masculine terminology used herein shall also include the feminine and
         the feminine shall include the masculine, and the use of any term
         herein in the singular may also include the plural and the plural shall
         include the singular.

                    SECTION 3. ELIGIBILITY AND PARTICIPATION

3.1      Eligibility. An Employee must be designated by the Committee and
         approved by the Compensation Committee for participation in this Plan
         to become eligible to receive Benefits.

                                       3

<PAGE>

3.2      Reemployment of Former Participant. Notwithstanding any provision of
         the Plan to the contrary, any person reemployed as an Employee who
         previously participated in and received benefits under the Plan shall
         not be eligible to participate again in the Plan. Furthermore, any
         payments or future rights to payments under the Plan made or to be made
         with respect to such Participant shall not be discontinued on account
         of such reemployment.

                               SECTION 4. BENEFITS

4.1      Normal Benefit. A Participant who is eligible for Retirement or Vested
         Termination Benefits will receive from the Plan on a monthly basis a
         Life Annuity commencing on the later of his Normal Retirement Date or
         his Retirement Date equal to his Applicable Formula contained in
         Exhibit A. Exhibit A shall be updated as necessary to reflect Committee
         recommendations which are approved by the Compensation Committee.

4.2      Deferred Retirement. The Deferred Retirement Benefit shall be
         calculated according to Section 4.1, with the Life Annuity commencement
         on the first of the month coincident with or next following the
         Participant's Retirement Date.

4.3      Vested Termination. Unless otherwise provided in Section 4.1, if a
         Participant Retires or his or her employment terminates for any reason
         other than Cause, with at least five (5) years of service and after
         attaining fifty-five (55) years of age, he is eligible for Vested
         Benefits. The Vested Benefit shall be calculated according to Section
         4.1.

4.4      Optional Payment Forms.  The Normal Form of benefit will be the Life
         Annuity form commencing on the Participant's Normal Retirement Date.
         The Participant may elect one of the following Optional Payment
         Forms.

         (a)      Early Commencement of Benefits. A Participant who is at least
                  fifty-five (55) years of age may elect to have his benefit
                  commence prior to his Normal Retirement Date. Such benefit
                  shall be adjusted to be actuarially equivalent to his Normal
                  Benefit.

         (b)      50% Joint and Survivor Annuity. A Participant may elect to
                  have his benefit paid in the form of a 50% Joint and Survivor
                  Annuity. 50% Joint and Survivor Annuity shall mean an annuity
                  which is paid to the retired Participant with a survivor
                  annuity paid during the life of the surviving spouse or
                  non-spouse Beneficiary after the Participant's death. The
                  annuity must be the actuarial equivalent of the Life Annuity
                  for that Participant. The amount of the survivor annuity shall
                  be fifty percent (50%) of the Participant's benefit.

4.5      Pre-Retirement Death Benefits. A Participant who dies will not receive
         special benefits on account of death. Such a Participant may receive
         benefits only if he qualifies for reasons other than death.

                                       4

<PAGE>

         If a Participant dies after meeting the requirements for Vested
         Termination, either while employed or after termination of employment
         but prior to the commencement of benefit payments, his Beneficiary will
         be entitled to receive a survivor's benefit. The amount of the benefit
         payable would be the same amount that would be payable to the
         Beneficiary if the Participant had retired and begun receiving benefits
         in the form of a 50% Joint and Survivor Annuity on the day before his
         death.

4.6      Disability Benefits.  A Participant who has been disabled will not
         receive special benefits on account of disability. Such a Participant
         may receive benefits only if he qualifies for reasons other than
         disability.

4.7      Forfeiture of Benefits.  Notwithstanding anything in this Plan to the
         contrary, the Corporation's obligations to make the payments hereunder
         are conditioned upon the following:

         (a)      The Participant shall have continued in the active employ of
                  the Corporation until such time as he is otherwise entitled to
                  benefits under Section 4.

         (b)      The Participant's employment with the Company shall not have
                  been terminated for Cause, or grounds discovered after
                  termination of employment that would have led to termination
                  for Cause.

         If the Participant fails to satisfy the foregoing conditions, the
         Corporation's obligations hereunder shall cease.

                              SECTION 5. FINANCING

5.1      Financing of Benefits. Benefits shall be payable, when due, by the
         Corporation, out of its current operating revenue to the extent not
         paid from a trust created pursuant to Section 5.2. The Corporation's
         obligation to make payments to the recipient when due shall be
         contractual in nature only, and participation in the Plan will not
         create in favor of any Participant any right or lien against the assets
         of the Corporation. No benefits under the Plan shall be required to be
         funded by a trust fund or insurance contracts or otherwise.

5.2      "Rabbi" Trust. In connection with this Plan, the Board may establish a
         grantor trust (known as the "Anixter Inc. Executive Benefit Plan
         Trust") for the purpose of accumulating funds to satisfy the
         obligations incurred by the Corporation under this Plan (and such other
         plans and arrangements as determined from time to time by the
         Corporation). At any time, the Corporation may transfer assets to the
         Trust to satisfy all or part of the obligations incurred by the
         Corporation under this Plan, as determined in the sole discretion of
         the Committee, subject to the return of such assets to the Corporation
         at such time as determined in accordance with the terms of such Trust.
         Any assets of such Trust shall remain at all times subject to the
         claims of creditors of the Corporation in the event of the
         Corporation's insolvency; and no asset or other funding medium used to
         pay benefits accrued under the Plan shall result in the Plan being
         considered as other than "unfunded" under ERISA. Notwithstanding the
         establishment of

                                       5
<PAGE>

         the Trust, the right of any Participant to receive future payments
         under the Plan shall remain an unsecured claim against the general
         assets of the Corporation.

                       SECTION 6. BENEFICIARY DESIGNATION

6.1      Designation of Beneficiary.

         (a)      All Beneficiary designations shall be in writing and signed by
                  the Participant. The designation shall be effective only if
                  and when delivered to the Corporation during the lifetime of
                  the Participant. The Participant also may change his
                  Beneficiary or Beneficiaries by a signed, written instrument
                  delivered to the Corporation. The payment of amounts shall be
                  in accordance with the last unrevoked written designation of
                  Beneficiary that has been signed and delivered to the
                  Corporation. All Beneficiary designations shall be addressed
                  to the Secretary of Anixter Inc. and delivered to his office,
                  and shall be processed as indicated in subsection (b) below by
                  the Secretary or by his authorized designee.

         (b)      The Secretary of Anixter Inc. (or his authorized designee)
                  shall, upon receipt of the Beneficiary designation:

                  (1)      Ascertain that the designation has been signed, and
                           if it has not been, return it to the Participant for
                           his signature;

                  (2)      If signed, stamp the designation "Received", indicate
                           the date of receipt, and initial the designation in
                           the proximity of the stamp.

         (c)      Death of his Beneficiary prior to the Participant's date of
                  retirement shall void the selection involving that
                  Beneficiary. The Participant shall be immediately required to
                  make a different selection of payment form or to name another
                  Beneficiary.

6.2      Ineffective Designation.

         (a)      If the Participant does not designate a Beneficiary, or if for
                  any reason such designation is entirely ineffective, the
                  amounts that otherwise would have been paid to the Beneficiary
                  shall be paid to the Participant's estate as the alternate
                  Beneficiary.

         (b)      If a designation is effective in part and ineffective in part,
                  to the extent that a designation is effective, distribution
                  shall be made so as to carry out as closely as discernable the
                  intent of the Participant, with result that only to the extent
                  that a designation is ineffective shall distribution instead
                  be made to the Participant's estate as an alternate
                  Beneficiary.

                                       6

<PAGE>

6.3      Simultaneous Death.  If a Participant and Beneficiary die under
         circumstances such that it is not possible to determine who died first,
         it is presumed that the Participant survived the Beneficiary.

6.4      Disclaimer. A Beneficiary may disclaim any benefit hereunder in
         accordance with Internal Revenue Code Section 2518 and applicable state
         law.

                          SECTION 7. GENERAL PROVISIONS

7.1      Employment/Participation Rights.

         (a)      Nothing in the Plan shall interfere with or limit in any way
                  the right of the Company to terminate any Participant's
                  employment at any time, nor confer upon any Participant any
                  right to continue in the employ of the Company. If any
                  Participant's employment is terminated for any reason and he
                  is not then entitled to benefits in accordance with Section 4,
                  nothing shall be paid to such Participant or his
                  Beneficiary(ies) under this Plan.

         (b)      Nothing in the Plan shall be construed to be evidence of any
                  agreement or understanding, express or implied, that the
                  Company will continue to employ a Participant in any
                  particular position or at any particular rate of remuneration.

         (c)      No employee shall have a right to be selected as a
                  Participant, or, having been so selected, to be selected again
                  as a Participant.

         (d)      Nothing in this Plan shall affect the right of a recipient to
                  participate in and receive benefits under and in accordance
                  with any pension, profit sharing, deferred compensation or
                  other benefit plan or program of the Company. In addition, no
                  payments under this Plan shall be deemed salary or other
                  compensation to the Participant for the purpose of computing
                  benefits to which the Participant may be entitled under any
                  pension plan or other arrangements that the Company may have
                  for the benefit of its employees.

7.2      Nonalienation of Benefits.

         (a)      No right or benefit under this Plan shall be subject to
                  anticipation, alienation, sale, assignment, pledge,
                  encumbrance, or change, and any attempt to anticipate,
                  alienate, sell, assign, pledge, encumber or change the same
                  shall be void; nor shall any such disposition be compelled by
                  operation of law except to the extent required by law.

         (b)      No right or benefit hereunder shall in any manner be liable
                  for or subject to the debts, contracts, liabilities, or torts
                  of the person entitled to benefits under the Plan.

                                       7

<PAGE>

         (c)      If any Participant or Beneficiary hereunder should become
                  bankrupt or attempt to anticipate, alienate, sell, assign,
                  pledge, encumber, or change any right or benefit hereunder,
                  then such right or benefit shall, in the discretion of the
                  Committee, cease, and the Committee shall direct in such event
                  that the Corporation hold or apply the same or any part
                  thereof for the benefit of the Participant or Beneficiary in
                  such manner and in such proportion as the Committee may deem
                  proper.

7.3      Severability. If any particular provision of the Plan shall be found to
         be illegal or unenforceable for any reason, the illegality or lack of
         enforceability of such provision shall not affect the remaining
         provisions of the Plan, and the Plan shall be construed and enforced as
         if the illegal or unenforceable provision had not been included.

7.4      No Individual Liability. It is declared to be the express purpose and
         intention of the Plan that no liability whatsoever shall attach to or
         be incurred by the shareholders, officers, or directors of the
         Corporation or any representative appointed hereunder by the
         Corporation, under or by reason of any of the terms or conditions of
         the Plan.

7.5      Applicable Law.   The Plan shall be governed by and construed in
         accordance with the laws of the State of Illinois except to the extent
         governed by applicable Federal law.

7.6      Successors. The provisions of the Plan shall bind and inure to the
         benefit of Company and its successors and assigns. The term successors
         as used herein shall include any corporate or other business entity
         that shall, either by merger, consolidation, purchase or otherwise
         acquire all or substantially all of the business and assets of the
         Company, and successors of any such corporation or other business
         entity.

7.7      Indemnity of Committee. To the maximum extent permitted by applicable
         law, the Company shall indemnify, hold harmless and defend the
         Committee, each member of the Committee, any employee of the Company,
         or any individual acting as an employee or agent of any of them (to the
         extent not indemnified or saved harmless under any liability insurance
         or any other indemnification arrangement) from any and all claims,
         losses, damages, liabilities, costs and expenses (including attorneys'
         fees) arising out of any actual or alleged act or failure to act made
         in good faith in connection with the Plans (or any related trust
         agreements), including expenses reasonably incurred in the defense of
         any claim relating thereto.

7.8      Overpayment. If the Committee determines that any Participant or
         Beneficiary receives any payment to which he or she is not entitled
         hereunder, the Committee may seek recovery of such overpayment, plus
         interest.

7.9      Qualified Domestic Relations Order.   If the Committee receives an
         order purporting to be a qualified domestic relations order with
         respect to a Participant's benefit under the Plan, to the extent
         possible it shall attempt to have such benefit assigned from the
         Anixter Inc. Pension Plan.

7.10     Information to Company.   The Company shall furnish to the Committee
         in writing all information the Company deems appropriate for the
         Committee to exercise its duties

                                       8

<PAGE>

         hereunder. Such information shall include but shall not be limited to
         the names of all Participants and their Salary, date of birth,
         employment, termination of employment, retirement, or death.

7.11     Information to Participant. The Committee shall make available to such
         Participant and Beneficiary for examination at the principal office of
         the Company (or at such other location as may be determined by the
         Committee), a copy of the Plan and such of its records or copies
         thereof as may pertain to the benefits of such Participant or
         Beneficiary.

            SECTION 8. PLAN ADMINISTRATION, AMENDMENT AND TERMINATION

8.1      In General. The Plan shall be administered by the Committee, which
         shall have the sole authority to construe and interpret the terms and
         provisions of the Plan and determine the amount, manner and time of
         payment of any benefits hereunder. The Committee shall maintain
         records, make the requisite calculations and disburse payments
         hereunder, and its interpretations, determinations, regulations and
         calculations shall be final and binding on all persons and parties
         concerned. The Committee may adopt such rules as it deems necessary,
         desirable or appropriate in administering the Plan and the Committee
         may act at a meeting, in a writing without a meeting, or by having
         actions otherwise taken by a member of the Committee pursuant to a
         delegation of duties from the Committee. No member of the Committee may
         act, vote, or otherwise influence a decision of the Committee
         specifically relating to his benefits, if any, under the Plan.

8.2      Claims Procedure. If the Committee denies a benefit, in whole or in
         part, it shall advise the Participant or Beneficiary, as applicable, of
         (i) the specific basis or bases for the denial (ii) references to the
         specific Plan provisions upon which the denial is based (iii) a
         description of any additional material or information that the
         Participant or Beneficiary needs to process the claim, and an
         explanation of why that material or information is necessary; and (iv)
         a statement of the Plan's appeal procedures as hereinafter set forth.
         Any person dissatisfied with the Committee's determination of a claim
         for benefits hereunder must file a written request for reconsideration
         with the Committee within 60 days of the denial by the Committee. Such
         person has the right to request, free of charge, and obtain copies of
         all documents, records, and other information that was relied upon by
         the Committee in denying such person's benefits or was submitted,
         considered, or generated in the course of making the benefit denial,
         regardless of whether it was used in denying the claim. This request
         must include a written explanation setting forth the specific reasons
         for such reconsideration. The Committee shall review its determination
         within 60 days, plus an extension for an additional 60 days in special
         circumstances, and render a written decision with respect to the claim,
         setting forth the specific reasons for such denial written in a manner
         calculated to be understood by the claimant. Such claimant shall be
         given a reasonable time within which to comment, in writing, to the
         Committee with respect to such explanation. The Committee shall review
         its determination promptly and render a written decision with respect
         to the claim. Such decision upon matters within the scope of the
         authority of the Committee shall be conclusive, binding, and final upon
         all claimants under this Plan.

                                       9

<PAGE>

8.3      Finality of Determination. The determination of the Committee as to any
         disputed questions arising under this Plan, whether of law or of fact,
         or mixed questions of law and fact, including questions of construction
         and interpretation, shall be final, binding, and conclusive upon all
         persons.

8.4      Delegation of Authority. The Committee may, in its discretion, delegate
         its duties to an officer or other employee of the Company, or to a
         committee composed of officers or employees of the Company.

8.5      Expenses.  The cost of payment from this Plan and the expenses of
         administering the Plan shall be borne by the Corporation.

8.6      Tax Withholding. The Corporation shall have the right to deduct from
         all payments made from the Plan any federal, state, or local taxes
         required by law to be withheld with respect to such payments.

8.7      Incompetency. Any person receiving or claiming benefits under the Plan
         shall be conclusively presumed to be mentally competent and of age
         until the Corporation receives written notice, in a form and manner
         acceptable to it, that such person is incompetent or a minor, and that
         a guardian, conservator, statutory committee or other person legally
         vested with the care of his estate has been appointed. In the event
         that the Corporation finds that any person to whom a benefit is payable
         under the Plan is unable to properly care for his affairs, or is a
         minor, then any payment due (unless a prior claim therefore shall have
         been made by a duly appointed legal representative) may be paid to the
         spouse, a child, a parent, or a brother or sister, or to any person
         deemed by the Corporation to have incurred expense for the care of such
         person otherwise entitled to payment.

         In the event a guardian or conservator or statutory committee of the
         estate of any person receiving or claiming benefits under the Plan
         shall be appointed by a court of competent jurisdiction, payments shall
         be made to such guardian or conservator or statutory committee provided
         that proper proof of appointment is furnished in a form and manner
         suitable to the Corporation. Any payment made under the provisions of
         this Section 8.7 shall be a complete discharge of liability therefore
         under the Plan.

8.8      Action by Corporation. Any action required or permitted to be taken
         hereunder by the Corporation or its Board shall be taken by the Board,
         or by any person or persons authorized by the Board.

8.9      Notice of Address. Any payment made to a Participant or to his
         surviving Spouse at the last known post office address of the
         distributee on file with the Corporation, shall constitute a complete
         acquittance and discharge to the Corporation and any director, officer
         or employee including, without limitation, members of the Committee
         with respect thereto, unless the Corporation shall have received prior
         written notice of any change in the condition or status of the
         distributee. Neither the Corporation nor any director, officer or
         employee including, without limitation, members of the Committee

                                       10

<PAGE>

         shall have any duty or obligation to search for or ascertain the
         whereabouts of the Participant or the Beneficiary.

8.10     Amendment and Termination. The Plan may be amended, suspended or
         terminated, in whole or in part, by the Board of Directors, but no such
         action shall retroactively reduce the benefits under the Plan which
         have accrued prior to the effective date of such action.
         Notwithstanding the foregoing, a transfer of benefits provided
         hereunder and a concomitant transfer of liabilities to the Anixter Inc.
         Pension Plan shall not be regarded as an amendment reducing the
         benefits accrued under the Plan for any Participant. In addition, the
         Committee has concurrent authority to make technical and/or clarifying
         amendments to the Plan or amendments that either have no cost effect on
         the Company or an effect that is not reasonably expected to exceed
         $10,000, plus any correlative modifications thereto.

8.11     Savings Clause. Notwithstanding anything to the contrary contained
         herein, if (i) the Internal Revenue Service (IRS) prevails in its claim
         that all or a portion of the amounts contributed to the Plan, and/or
         earnings thereon, constitute taxable income to a Participant or
         beneficiary for any taxable year that is prior to the taxable year in
         which such contributions and/or earnings are actually distributed to
         such Participant or beneficiary, (ii) the U.S. Department of Labor
         (DOL) prevails in its claim that the Trust prevents the Plan from
         meeting the "unfunded" criterion of the exceptions to various
         requirements of Title I of ERISA for plans that are unfunded and
         maintained primarily for the purpose of providing deferred compensation
         for a select group of management or highly compensated employees, or
         (iii) legal counsel selected by the Committee advises the Committee
         that the IRS or DOL would likely prevail in such claim, the
         Participant's Account balance shall be immediately distributed to the
         Participant or beneficiary. For purposes of this Section, the IRS or
         DOL shall be deemed to have prevailed in a claim if such claim is
         upheld by a court of final jurisdiction, or if the Committee, based
         upon the advice of legal counsel selected by the Committee, fails to
         appeal a decision of the IRS or DOL, or a court of applicable
         jurisdiction, with respect to such claim, to an appropriate IRS or DOL
         appeals authority or to a court of higher jurisdiction within the
         appropriate time period.

8.12     Transfer of Benefits. Notwithstanding anything contained herein to the
         contrary, the Committee has the authority to provide that the benefits
         of one or more Participants shall be provided from and the liabilities
         attributable to such benefits shall be transferred to the Anixter Inc.
         Pension Plan. Upon such transfer being effected, the benefits of the
         affected Participants shall cease to be payable under the Plan.

                                       11

<PAGE>

                              SECTION 9. EXECUTION

         IN WITNESS WHEREOF, the Company has caused this Anixter Inc.
Supplemental Executive Retirement Plan to be executed by its duly authorized
officer this 4th day of August 2004, to be effective as of August 4, 2004.

                                       Anixter Inc.

                                       By:
                                          -----------------------------

                                       Title:
                                             --------------------------

 ATTEST:

 -----------------------------
 Secretary

                                       12
<PAGE>
                                  ANIXTER INC.
                     SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

                                   EXHIBIT A

                     APPLICABLE FORMULA FOR NORMAL BENEFIT

                    ELIGIBLE EMPLOYEES AS OF AUGUST 4, 2004

<TABLE>
<S>                                              <C>
Eligible Employee:                               Robert Grubbs, Jr.

Normal Retirement Date:                          54th birthday

Target Benefit (at age 65):                      Monthly benefit equal to fifty percent (50%) of Final Average Salary*

Benefit Offsets:                                 (a)  Normal Benefit Life Annuity payable from the Anixter Inc. Pension Plan
                                                 and the Anixter Inc. Excess Benefit Plan, plus (b) fifty percent (50%) of
                                                 Primary Social Security Benefit

Normal Benefit (at age 65):                      Target Benefit less Benefit Offsets

Reduction:                                       Actuarially reduced (using the same assumptions as provided under the
                                                 Anixter Inc. Pension Plan) for commencement prior to age 65, subject to a
                                                 minimum Normal Benefit of $550,000 per year ($45,833.33 per month)

Eligible Employee:                               Dennis Letham

Normal Retirement Date:                          65th birthday

Target Benefit (at age 65):                      Monthly benefit equal to fifty percent (50%) of Final Average Salary*

Benefit Offsets:                                 (a)  Normal Benefit Life Annuity payable from the Anixter Inc. Pension Plan
                                                 and the Anixter Inc. Excess Benefit Plan, plus (b) fifty percent (50%) of
                                                 Primary Social Security Benefit

Normal Benefit (at age 65):                      Target Benefit less Benefit Offsets

Reduction:                                       Actuarially reduced (using the same assumptions as provided under the
                                                 Anixter Inc. Pension Plan) for commencement prior to age 65

</TABLE>

* "Final Average Salary" means the highest obtainable average of Monthly Salary
which can be derived from the Monthly Salary earned during any sixty (60)
consecutive calendar months in the one hundred twenty (120) calendar months
prior to the month in which the Participant terminates employment for any
reason, including his death or retirement. If the Participant has completed
fewer than sixty (60) calendar months of employment, the average shall be based
upon all calendar months of service prior to his termination of employment.<PAGE>

                                                                   EXHIBIT 10.66

              AMENDMENT NO. 2 TO SECOND AMENDED AND RESTATED CREDIT
                                   AGREEMENT
                            DATED AS OF MARCH 8, 2004

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

                             PRELIMINARY STATEMENTS:

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

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

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

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

<PAGE>

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

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

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

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

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

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

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

                                        2
<PAGE>

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

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

            `"Lender Addendum": with respect to any Lender, a Lender Addendum
            substantially in the form attached hereto as Exhibit H."

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

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

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

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

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

                                        3
<PAGE>

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

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

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

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

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

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

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

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

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

                                        4
<PAGE>

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

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

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

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

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

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

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

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

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

                                        5
<PAGE>

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

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

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

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

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

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

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

                                        6
<PAGE>

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

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

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

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

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

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

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

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

                                        7
<PAGE>

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

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

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

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

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

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

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

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

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

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

                                        8
<PAGE>

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

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

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

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

            `"Term Loans": the Tranche B Term Loans and the Acquisition Term
            Loans."

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

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

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

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

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

                                        9
<PAGE>

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

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

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

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

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

                                       10
<PAGE>

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

            SECTION 4 Conditions to Effectiveness of All Amendments.

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

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

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

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

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

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

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

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

                                       11
<PAGE>

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

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

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

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

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

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

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

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

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

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

                                       12
<PAGE>

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

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

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

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

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

SECTION 7 Reference to and Effect on Credit Agreement.

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

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

                                       13
<PAGE>

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

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

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

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

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

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

                            (signature page follows)

                                       14
<PAGE>

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

                                       PEABODY ENERGY CORPORATION,
                                       a Delaware corporation

                                       By: ____________________________________
                                           Name:
                                           Title:

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

                                       By: ____________________________________
                                           Name:
                                           Title:

                                       WACHOVIA BANK, NATIONAL ASSOCIATION,
                                       as Syndication Agent

                                       By: ____________________________________
                                           Name:
                                        Title:

                                       LEHMAN COMMERCIAL PAPER INC.,
                                       as Syndication Agent

                                       By: ____________________________________
                                           Name:
                                        Title:

<PAGE>

                            CONSENT OF CREDIT PARTIES
                            DATED AS OF MARCH 8, 2004

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

                            (signature pages follow)

<PAGE>

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

                                       PEABODY ENERGY CORPORATION
                                       AFFINITY MINING COMPANY
                                       ARCLAR COMPANY, LLC
                                       ARID OPERATIONS INC.
                                       BEAVER DAM COAL COMPANY
                                       BIG RIDGE, INC.
                                       BIG SKY COAL COMPANY
                                       BLACK BEAUTY EQUIPMENT COMPANY
                                       BLACK BEAUTY HOLDING COMPANY, LLC
                                       BLACK BEAUTY MINING, INC.
                                       BLACK BEAUTY RESOURCES, INC.
                                       BLACK BEAUTY UNDERGROUND, INC.
                                       BLACK WALNUT COAL COMPANY
                                       BLUEGRASS COAL COMPANY
                                       BTU WORLDWIDE, INC.
                                       CABALLO COAL COMPANY
                                       CHARLES COAL COMPANY
                                       CLEATON COAL COMPANY
                                       COAL PROPERTIES CORP.
                                       COOK MOUNTAIN COAL COMPANY
                                       COTTONWOOD LAND COMPANY
                                       CYPRUS CREEK LAND COMPANY
                                       EACC CAMPS, INC.
                                       EAGLE COAL COMPANY
                                       EASTERN ASSOCIATED COAL CORP.
                                       EASTERN ROYALTY CORP.
                                       EMPIRE MARINE, LLC
                                       FALCON COAL COMPANY
                                       GALLO FINANCE COMPANY
                                       GIBCO MOTOR EXPRESS, LLC
                                       GOLD FIELDS CHILE, S.A.
                                       GOLD FIELDS MINING CORPORATION
                                       GOLD FIELDS OPERATING CO. - ORTIZ
                                       GRAND EAGLE MINING, INC.
                                       HAYDEN GULCH TERMINAL, INC.
                                       HIGHLAND MINING COMPANY
                                       HIGHWALL MINING SERVICES COMPANY
                                       HILLSIDE MINING COMPANY
                                       INDEPENDENCE MATERIAL HANDLING
                                            COMPANY

<PAGE>

                                       INDIAN HILL COMPANY
                                       INTERIOR HOLDINGS CORP.
                                       JAMES RIVER COAL TERMINAL COMPANY
                                       JARRELL'S BRANCH COAL COMPANY
                                       JUNIPER COAL COMPANY
                                       KAYENTA MOBILE HOME PARK, INC.
                                       LOGAN FORK COAL COMPANY
                                       MARTINKA COAL COMPANY
                                       MIDCO SUPPLY AND EQUIPMENT
                                            CORPORATION
                                       MIDWEST COAL ACQUISITION CORP.
                                       MOUNTAIN VIEW COAL COMPANY
                                       NORTH PAGE COAL CORP.
                                       OHIO COUNTY COAL COMPANY
                                       PDC PARTNERSHIP HOLDINGS, INC.
                                       PEABODY AMERICA, INC.
                                       PEABODY COAL COMPANY
                                       PEABODY COALSALES COMPANY
                                       PEABODY COALTRADE, INC.
                                       PEABODY ENERGY GENERATION HOLDING
                                       PEABODY ENERGY INVESTMENTS, INC.
                                       PEABODY ENERGY SOLUTIONS, INC.
                                       PEABODY HOLDING COMPANY, INC.
                                       PEABODY SOUTHWESTERN COAL COMPANY
                                       PEABODY TERMINALS, INC.
                                       PEABODY VENEZUELA COAL CORP.
                                       PEABODY WESTERN COAL COMPANY
                                       PINE RIDGE COAL COMPANY
                                       POND RIVER LAND COMPANY
                                       POWDER RIVER COAL COMPANY
                                       RIO ESCONDIDO COAL CORP.
                                       RIVERS EDGE MINING, INC.
                                       RIVERVIEW TERMINAL COMPANY
                                       SENECA COAL COMPANY
                                       SENTRY MINING COMPANY
                                       SNOWBERRY LAND COMPANY
                                       STERLING SMOKELESS COAL COMPANY
                                       SUGAR CAMP PROPERTIES
                                       YANKEETOWN DOCK CORPORATION

                                       By: ____________________________________
                                           Name:
                                           Title:

                        (signatures continued next page)

<PAGE>

                        BLACK BEAUTY COAL COMPANY
                           By: Thoroughbred, L.L.C.,
                               a Delaware limited liability company, its Partner

                           By: ____________________________________
                               Name:
                               Title:

                        BLACK HILLS MINING CO., LLC
                           By: Peabody Energy Corporation,
                               a Delaware corporation, its Sole Member

                           By: ____________________________________
                               Name:
                               Title:

                        BLACK STALLION COAL COMPANY, LLC
                           By: Black Walnut Coal Company,
                               its Sole Member

                           By: ____________________________________
                               Name:
                               Title:

                        BTU VENEZUELA LLC
                           By: Peabody Energy Corporation,
                               a Delaware corporation, its Sole Member

                           By: ____________________________________
                               Name:
                               Title:

                        COLONY BAY COAL COMPANY
                           By: Charles Coal Company,
                               a Delaware corporation, its General Partner

                           By: ____________________________________
                               Name:
                               Title:

                        (signatures continued next page)

<PAGE>

                         CYPRUS CREEK LAND RESOURCES, LLC
                            By: Peabody Development Company, LLC
                                By: Peabody Holding Company, Inc.
                                    a New York corporation, its Sole Member

                                By: ____________________________________
                                    Name:
                                    Title:

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

                            By: ____________________________________
                                Name:
                                Title:

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

                            By: ____________________________________
                                Name:
                                Title:

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

                            By: ____________________________________
                                Name:
                                Title:

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

                            By: ____________________________________
                                Name:
                                Title:

                        (signatures continued next page)

<PAGE>

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

                            By: ____________________________________
                                Name:
                                Title:

                         PEABODY DEVELOPMENT COMPANY, LLC
                            By: Peabody Holding Company, Inc.
                                a New York corporation, its Sole Member

                            By: ____________________________________
                                Name:
                                Title:

                         PEABODY DEVELOPMENT LAND HOLDINGS, LLC

                            By: Peabody Development Company, LLC
                                By: Peabody Holding Company, Inc.
                                    a New York corporation, its Sole Member

                                By: ____________________________________
                                    Name:
                                    Title:

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

                            By: ____________________________________
                                Name:
                                Title:

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

                            By: ____________________________________
                                Name:
                                Title:

                        (signatures continued next page)

<PAGE>

                         PEABODY NATURAL RESOURCES COMPANY
                            By: Gold Fields Mining Corporation,
                                a Delaware corporation, its Partner

                            By: ____________________________________
                                Name:
                                Title:

                            By: Peabody America, Inc.,
                                a Delaware corporation, its Partner

                            By: ____________________________________
                                Name:
                                Title:

                         PEABODY POWERTREE INVESTMENTS, LLC
                            By: Peabody Energy Corporation,
                                a Delaware corporation, its Sole Member

                            By: ____________________________________
                                Name:
                                Title:

                         PEABODY RECREATIONAL LANDS, L.L.C.
                            By: Peabody Development Company, LLC
                                By: Peabody Holding Company, Inc.
                                    a New York corporation, its Sole Member

                                By: ____________________________________
                                    Name:
                                    Title:

                         PEABODY-WATERSIDE DEVELOPMENT, L.L.C.
                            By: Peabody Development Company, LLC
                                By: Peabody Holding Company, Inc.
                                    a New York corporation, its Sole Member

                                By: ____________________________________
                                    Name:
                                    Title:

                        (signatures continued next page)

<PAGE>

                         PEC EQUIPMENT COMPANY, LLC
                            By: Peabody Energy Corporation,
                                a Delaware corporation, its Sole Member

                            By: ____________________________________
                                Name:
                                Title:

                         POINT PLEASANT DOCK COMPANY, LLC
                            By: Peabody Energy Corporation,
                                a Delaware corporation, its Sole Member

                            By: ____________________________________
                                Name:
                                Title:

                         POND CREEK LAND RESOURCES, LLC
                            By: Peabody Coal Company,
                                a Delaware corporation, its Sole Member

                            By: ____________________________________
                                Name:
                                Title:

                         PORCUPINE PRODUCTION, LLC
                            By: Peabody Development Company, LLC
                                By: Peabody Holding Company, Inc.
                                    a New York corporation, its Sole Member

                                By: ____________________________________
                                    Name:
                                    Title:

                         PORCUPINE TRANSPORTATION, LLC
                            By: Peabody Development Company, LLC
                                By: Peabody Holding Company, Inc.
                                    a New York corporation, its Sole Member

                                By: ____________________________________
                                    Name:
                                    Title:

                        (signatures continued next page)

<PAGE>

                         PRAIRIE STATE GENERATING COMPANY, LLC
                            By: Peabody Energy Corporation,
                                a Delaware corporation, its Sole Member

                            By: ____________________________________
                                Name:
                                Title:

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

                            By: ____________________________________
                                Name:
                                Title:

                         THOROUGHBRED, L.L.C.
                            By: Peabody Holding Company, Inc.,
                                a New York corporation, its Member

                            By: ____________________________________
                                Name:
                                Title:

                            By: Peabody Development Company, LLC
                                By: Peabody Holding Company, Inc.
                                    a New York corporation, its Sole Member

                                By: ____________________________________
                                    Name:
                                    Title:

                         THOROUGHBRED GENERATING COMPANY, LLC
                            By: Peabody Energy Corporation,
                                a Delaware corporation, its Sole Member

                            By: ____________________________________
                                Name:
                                Title:

                        (signatures continued next page)

<PAGE>

                         THOROUGHBRED MINING COMPANY, L.L.C.
                            By: Peabody Energy Corporation,
                                a Delaware corporation, its Sole Member

                            By: ____________________________________
                                Name:
                                Title:

                         WILLIAMSVILLE COAL COMPANY, LLC
                            By: Midwest Coal Acquisition Corp.,
                                its Sole Member

                            By: ____________________________________
                                Name:
                                Title:

<PAGE>

                                                                       EXHIBIT A

                                                                      Schedule I
                                                             to Credit Agreement

                                  Pricing Grids

<TABLE>
<CAPTION>
CONSOLIDATED           REVOLVING            REVOLVING          TRANCHE B          TRANCHE B
   TOTAL            CREDIT FACILITY      CREDIT FACILITY       TERM LOAN          TERM LOAN
OBLIGATIONS TO        APPLICABLE            APPLICABLE        APPLICABLE         APPLICABLE
CONSOLIDATED            MARGIN -          MARGIN - BASE         MARGIN -        MARGIN - BASE
EBITDA RATIO          LIBOR RATE             RATE             LIBOR RATE            RATE
--------------      ---------------      ---------------      ----------        -------------
<S>                 <C>                  <C>                  <C>               <C>
> or = 3.75x              2.500%               1.500%            1.75%               0.75%
> or = 3.25x              2.250%               1.250%            1.75%               0.75%
> or = 2.75x              2.000%               1.000%            1.75%               0.75%
> or = 2.25x              1.750%               0.750%            1.75%               0.75%
   < 2.25x                1.500%               0.500%            1.75%               0.75%
</TABLE>

<TABLE>
<CAPTION>
                            COMMITMENT
 USAGE RATIO                   FEE
 -----------                ----------
<S>                         <C>
> or = 66.67%                 0.250%
> or = 33.33%                 0.375%
   < 33.33%                   0.500%
</TABLE>

<PAGE>

                                                                       EXHIBIT B

                             FORM OF LENDER ADDENDUM

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

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

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

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

                           [Signature page to follow]

                                       B-1
<PAGE>

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

                                                ________________________________
                                                Name of Lender

                                                By: ____________________________
                                                    Name:
                                                    Title:

Accepted and agreed:

PEABODY ENERGY CORPORATION

By: ______________________________
Name:
Title:

FLEET NATIONAL BANK, as
Administrative Agent

By:_______________________________
Name:
Title:

                                       B-2
<PAGE>

                                                                      SCHEDULE 1

                         COMMITMENTS AND NOTICE ADDRESS

1. Name of Lender:  ___________________________________
   Notice Address:  ___________________________________
                    ___________________________________
                    ___________________________________
   Attention:       ___________________________________
   Telephone:       ___________________________________
   Facsimile:       ___________________________________

2. Revolving Credit Commitment:

3. Acquisition Term Loan Commitment:

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00073-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00073-of-00352.parquet"}]]