EXCHANGE AND REGISTRATION RIGHTS AGREEMENT



                           Dated as of March 21, 2003



                                      among



                           Peabody Energy Corporation,



          The Subsidiary Guarantors from time to time party hereto, and



            Lehman Brothers Inc. on behalf of the Initial Purchasers



{PAGE}



                   EXCHANGE AND REGISTRATION RIGHTS AGREEMENT



                  This Exchange and Registration Rights Agreement (this

"Agreement") is made and entered into as of March 21, 2003 by and among Peabody

Energy Corporation, a Delaware corporation (the "Company"), the Subsidiary

Guarantors (as defined herein) and Lehman Brothers Inc. on behalf of Morgan

Stanley & Co. Incorporated, Wachovia Securities, Inc., Fleet Securities, Inc.,

BMO Nesbitt Burns Corp., Credit Lyonnais Securities (USA) Inc., PNC Capital

Markets, Inc., U.S. Bancorp Piper Jaffray Inc., ABN AMRO Incorporated and Fortis

Investment Services, LLC (collectively, the "Initial Purchasers").



                  This Agreement is made pursuant to the Purchase Agreement,

dated March 14, 2003 (the "Purchase Agreement"), by and among the Company, the

Existing Subsidiary Guarantors (as defined herein) and the Initial Purchasers,

which provides for the sale by the Company to the Initial Purchasers of

$650,000,000 aggregate principal amount of the Company's 6 7/8% Senior Notes due

2013 (the "Notes"). The Notes are, and the Exchange Notes (as defined herein)

will be, guaranteed on a senior basis by the Subsidiary Guarantors (as defined

herein). In order to induce the Initial Purchasers to purchase the Notes, the

Company and the Existing Subsidiary Guarantors have agreed to provide the

registration rights set forth in this Agreement. The execution and delivery of

this Agreement is a condition to the obligations of the Initial Purchasers set

forth in Section 7 of the Purchase Agreement.



                  The parties hereby agree as follows:



         SECTION 1.          DEFINITIONS



                  As used in this Agreement, the following capitalized terms

shall have the following meanings:



                  Additional Subsidiary Guarantor: Any subsidiary of the Company

that executes a Guarantee under the Indenture after the date of this Agreement.



                  Advice:  As defined in Section 6(e) hereof.



                  Blackout Period:  As defined in Section 5(a) hereof.



                  Blue Sky Application:  As defined in Section 8(a) hereof.



                  Broker-Dealer: Any broker or dealer registered under the

Exchange Act.



                  Closing Date:  The date of this Agreement.



                  Commission:  The U.S. Securities and Exchange Commission.



                  Company:  As defined in the preamble hereto.



                                        2



{PAGE}



                  Consummate: A Registered Exchange Offer shall be deemed

"Consummated" for purposes of this Agreement upon the occurrence of (i) the

filing and effectiveness under the Securities Act of the Exchange Offer

Registration Statement relating to the Exchange Notes to be issued in the

Exchange Offer, (ii) the maintaining of such Registration Statement continuously

effective and the keeping of the Exchange Offer open for a period not less than

the minimum period required pursuant to Section 3(b) hereof, and (iii) the

delivery by the Company to the Registrar under the Indenture of Exchange Notes

in the same aggregate principal amount as the aggregate principal amount of

Notes that were tendered by Holders thereof pursuant to the Exchange Offer.



                  Damages Payment Date: With respect to the Notes, each Interest

Payment Date.



                  Exchange Act: The U.S. Securities Exchange Act of 1934, as

amended.



                  Exchange Notes: The Company's 6 7/8% Senior Notes due 2013 to

be issued pursuant to the Indenture in the Exchange Offer, together with the

related Guarantees.



                  Exchange Offer: The registration by the Company under the

Securities Act of the Exchange Notes pursuant to a Registration Statement

pursuant to which the Company offers the Holders of all outstanding Transfer

Restricted Securities the opportunity to exchange all such outstanding Transfer

Restricted Securities held by such Holders for Exchange Notes in an aggregate

principal amount equal to the aggregate principal amount of the Transfer

Restricted Securities validly tendered in such exchange offer by such Holders.



                  Exchange Offer Registration Statement: The Registration

Statement relating to the Exchange Offer, including the related Prospectus.



                  Existing Subsidiary Guarantors: The various Subsidiary

Guarantors signatory to the Indenture as of the date hereof.



                  Guarantees: Guarantees by the Subsidiary Guarantors of the

Company's obligations under the Notes, the Exchange Notes and the Indenture.



                  Holders:  As defined in Section 2(b) hereof.



                  Indenture: The Indenture, dated as of the date hereof, among

the Company, the Existing Subsidiary Guarantors and US Bank National

Association, as trustee (the "Trustee"), pursuant to which the Notes and the

Exchange Notes are to be issued, as such Indenture may be amended or

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