Exhibit 5
Simpson Thacher & Bartlett LLP
425 Lexington Avenue
New York, New York 10019
(212) 455-2000
October 22, 2003
Peabody Energy Corporation
701 Market Street
St. Louis, Missouri 63103
Ladies and Gentlemen:
We have acted as counsel to Peabody Energy Corporation, a Delaware
corporation (the "Company"), the Delaware subsidiaries of the Company named on
Schedule I hereto (each, a "Delaware Guarantor" and collectively, the "Delaware
Guarantors") and the non-Delaware subsidiaries of the Company named on Schedule
II hereto (each, a "Non-Delaware Guarantor" and collectively, the "Non-Delaware
Guarantors", taken together with the Delaware Guarantors, the "Guarantors"), in
connection with the Registration Statement on Form S-3 (the "Registration
Statement") filed by the Company and the Guarantors with the Securities and
Exchange Commission (the "Commission") under the Securities Act of 1933, as
amended (the "Securities Act"), relating to (i) debt securities, which may be
either senior ("Senior Debt Securities"), senior subordinated ("Senior
Subordinated Debt Securities") or subordinated (the "Subordinated Debt
Securities") (collectively, the "Debt Securities"); (ii) guarantees of the
Guarantors to be issued in connection with the Debt Securities (the
"Guarantees"); (iii) shares of preferred stock of the Company, par value $ 0.01
per share (the "Preferred Stock"); (iv) shares of common stock of the Company,
par value $ 0.01 per share (the "Common Stock"); (v) preferred stock purchase
rights that initially trade together with the Common Stock pursuant to the
Company's preferred share purchase rights plan (the "Preferred Stock Purchase
Rights"); (vi) warrants to purchase Debt Securities, Preferred Stock or Common
Stock (the "Warrants"); (vii) units of the Company, consisting of any
combination of two or more of the securities being registered pursuant to the
Registration Statement; (viii) Debt Securities and Guarantees, Preferred Stock
and Common Stock that may be issued upon exercise of Warrants; and (ix)
10,267,169 shares of Common Stock and the related Preferred Stock Purchase
Rights that may be sold by the selling stockholders named in the Registration
Statement (the "Selling Stockholders' Shares"). The
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Debt Securities, the Guarantees, the Preferred Stock, the Common Stock, the
Preferred Stock Purchase Rights, the Warrants, the Units and the Selling
Stockholders' Shares are hereinafter referred to collectively as the
"Securities." The Securities may be issued and sold or delivered from time to
time as set forth in the Registration Statement, any amendment thereto, the
prospectus contained therein (the "Prospectus") and supplements to the
Prospectus (the "Prospectus Supplements"). Pursuant to Rule 415 under the
Securities Act, the Securities that may be issued and sold or delivered by the
Company may not exceed an aggregate initial offering price of $1,250,000,000
(together with any additional Securities that may be issued by the Company and
the Guarantors pursuant to Rule 462(b) (as prescribed by the Commission pursuant
to the Securities Act")) and the Selling Stockholders' Shares may not exceed an
aggregate of 10,267,169 shares of Common Stock (together with any additional
shares of Common Stock that may be sold by the Selling Stockholders pursuant to
Rule 462(b) (as prescribed by the Commission pursuant to the Securities Act")).
The Senior Debt Securities and the Guarantees thereof, if applicable,
will be issued under an Indenture (the "Senior Indenture") among the Company,
the Guarantors, if applicable, and such trustee as shall be named therein (the
"Senior Trustee"). The Senior Subordinated Debt Securities and the Subordinated
Debt Securities and the Guarantees thereof, if applicable, will be issued under
an Indenture (the "Subordinated Indenture") among the Company, the Guarantors,
if applicable, and such trustee as shall be named therein (the "Subordinated
Trustee"). The Senior Indenture and the Subordinated Indenture are hereinafter
referred to collectively as the "Indentures."
The Senior Debt Security Warrants will be issued under a Senior Debt
Security Warrant Agreement (the "Senior Debt Security Warrant Agreement") among
the Company, a debt security warrant agent to be named therein (the "Senior Debt
Security Warrant Agent") and the Senior Trustee. The Senior Subordinated Debt
Security Warrants and the Subordinated Debt Security Warrants will be issued
under a Subordinated Debt Security Warrant Agreement (the "Subordinated Debt
Security Warrant Agreement") among the Company, a debt security warrant agent to
be named therein (the "Subordinated Debt Security Warrant Agent") and the
Subordinated Trustee. The Warrants relating to the Preferred Stock will be
issued under a Preferred Stock Warrant Agreement (the "Preferred Stock Warrant
Agreement") between the
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Company and a preferred stock warrant agent to be named therein (the "Preferred
Stock Warrant Agent"). The Warrants relating to the Common Stock will be issued
under a Common Stock Warrant Agreement (the "Common Stock Warrant Agreement")
between the Company and a common stock warrant agent to be named therein (the
"Common Stock Warrant Agent"). The Senior Debt Security Warrant Agreement, the
Subordinated Debt Security Warrant Agreement, the Preferred Stock Warrant
Agreement and the Common Stock Warrant Agreement, are hereinafter referred to
collectively as the "Warrant Agreements." Each of the Senior Debt Security
Warrant Agent, Subordinated Debt Security Warrant Agent, Preferred Stock Warrant
Agent and Common Stock Warrant Agent is referred to hereinafter as a
"Counterparty."
We have examined the Registration Statement and the exhibits filed with
the Commission on the date hereof. We also have examined the originals, or
duplicates or certified or conformed copies, of such corporate records,
agreements, documents and other instruments and have made such other
investigations as we have deemed relevant and necessary in connection with the
opinions hereinafter set forth. As to questions of fact material to this
opinion, we have relied upon certificates or comparable documents of public
officials and of officers and representatives of the Company and the Guarantors.
In rendering the opinions set forth below, we have assumed the
genuineness of all signatures, the legal capacity of natural persons, the
authenticity of all documents submitted to us as originals, the conformity to
original documents of all documents submitted to us as duplicates or certified
or conformed copies, and the authenticity of the originals of such latter
documents. We also have assumed that (1) at the time of execution,
authentication, issuance and delivery of the Senior Debt Securities, the Senior
Indenture will be the valid and legally binding obligation of the Senior
Trustee; (2) at the time of execution, authentication, issuance and delivery of
the Senior Subordinated Debt Securities or Subordinated Debt Securities, as the
case may be, the Subordinated Indenture will be the valid and legally binding
obligation of the Subordinated Trustee; and (3) at the time of execution,
countersignature, issuance and delivery of any Warrants, the related Warrant
Agreement will be the valid and legally binding obligation of each Counterparty
thereto.
We have assumed further that (1) at the time of execution,
authentication, issuance and delivery of any Senior Debt Securities, Senior
Subordinated Debt Securities or Subordinated
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Debt Securities and the related Guarantees, if applicable, the Indentures will
have been duly authorized, executed and delivered by the Company and the
Guarantors, if applicable and (2) if applicable, execution, delivery and
performance by each Non-Delaware Guarantor of the Guarantees will not violate
the laws of its jurisdiction of incorporation or any other applicable laws
(excepting the law of the State of New York and the federal laws of the United
States). We have assumed further that at the time of execution,
countersignature, issuance and delivery of any Warrants, the related Warrant
Agreement will have been duly authorized, executed and delivered by the Company.
Based upon the foregoing, and subject to the qualifications,
assumptions and limitations stated herein, we are of the opinion that:
1. With respect to the Debt Securities, assuming (a) the taking of all
necessary corporate action to approve the issuance and terms of any
Debt Securities, the terms of the offering thereof and related
matters by the Board of Directors of the Company, a duly
constituted and acting committee of such Board or duly authorized
officers of the Company (such Board of Directors, committee or
authorized officers being referred to herein as the "Board") and
(b) the due execution, authentication, issuance and delivery of
such Debt Securities, upon payment of the consideration therefor
provided for in the applicable definitive purchase, underwriting or
similar agreement approved by the Board and otherwise in accordance
with the provisions of the applicable Indenture and such agreement,
such Debt Securities will constitute valid and legally binding
obligations of the Company enforceable against the Company in
accordance with their terms.
2. With respect to the Guarantees, assuming (a) the taking of all
necessary corporate action to approve the issuance and terms of the
Guarantees and related matters by the Board of Directors of each
Guarantor (or in the case of a Subsidiary Guarantor that is a
partnership, the Board of Directors of the general partner), a duly
constituted and acting committee of such Board or duly authorized
officers of each Guarantor, (b) the due execution, authentication,
issuance and delivery of the Debt Securities underlying such
Guarantees, upon payment of the consideration therefor provided for
in the applicable definitive purchase, underwriting or similar
agreement approved by such Board and otherwise in accordance with
the provisions of the applicable Indenture and such agreement and
(c) the due issuance of such Guarantees, such Guarantees will
constitute valid and legally binding obligations of the Guarantors
enforceable against the Guarantors in accordance with their terms.
3. With respect to the Preferred Stock, assuming (a) the taking by the
Board of Directors of the Company of all necessary corporate action
to authorize and approve the issuance of the Preferred Stock, (b)
due filing of a Certificate of Designations with the Secretary of
State of the State of Delaware and (c) due issuance and delivery of
the Preferred Stock, upon payment therefor in accordance with the
applicable definitive underwriting
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agreement approved by the Board of Directors of the Company, the
Preferred Stock will be validly issued, fully paid and
nonassessable.
4. With respect to the Common Stock, assuming (a) the taking by the
Board of Directors of the Company of all necessary corporate action
to authorize and approve the issuance of the Common Stock and (b)
due issuance and delivery of the Common Stock, upon payment
therefor in accordance with the applicable definitive underwriting
agreement approved by the Board of Directors of the Company, the
Common Stock will be validly issued, fully paid and nonassessable.
5. With respect to the Warrants, assuming (a) the taking of all
necessary corporate action by the Board to approve the execution
and delivery of a related Warrant Agreement in the form to be filed
as an exhibit to the Registration Statement and (b) the due
execution, countersignature, issuance and delivery of such
Warrants, upon payment of the consideration for such Warrants
provided for in the applicable definitive purchase, underwriting or
similar agreement approved by the Board and otherwise in accordance
with the provisions of the applicable Warrant Agreement and such
agreement, such Warrants will constitute valid and legally binding
obligations of the Company enforceable against the Company in
accordance with their terms.
6. With respect to the Selling Stockholders' Shares, such Common Stock
has been duly authorized and is validly issued, fully paid and
nonassessable.
Our opinions set forth in paragraphs 1, 2 and 5 above are subject to
the effects of (i) bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or affecting
creditors' rights generally, (ii) general equitable principles (whether
considered in a proceeding in equity or at law) and (iii) an implied covenant of
good faith and fair dealing.
We are members of the Bar of the State of New York, and we do not
express any opinion herein concerning any law other than the law of the State of
New York, the federal law of the United States and the Delaware General
Corporation Law (including the statutory provisions, all applicable provisions
of the Delaware Constitution and reported judicial decisions interpreting the
foregoing).
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We hereby consent to the filing of this opinion letter as Exhibit 5 to
the Registration Statement and to the use of our name under the caption "Legal
Matters" in the Prospectus included in the Registration Statement.
Very truly yours,
/s/ SIMPSON THACHER & BARTLETT LLP
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SIMPSON THACHER & BARTLETT LLP
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Schedule I
Delaware Guarantors
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Arid Operations Inc.
Beaver Dam Coal Company
Big Sky Coal Company
Black Beauty Holding Company, LLC Black Walnut Coal Company Bluegrass Coal
Company Caballo Coal Company Charles Coal Company Cleaton Coal Company Coal
Properties Corp.
Cook Mountain Coal Company
Cottonwood Land Company
Cyprus Creek Land Company
Cyprus Creek Land Resources, LLC
Eastern Royalty Corp.
Gallo Finance Company
Gold Fields Chile, S.A.
Gold Fields Mining Corporation
Gold Fields Operating Co.-Ortiz
Hayden Gulch Terminal, Inc.
Highland Mining Company
Highwall Mining Services Company
Independence Material Handling Company
Indian Hill Company
Interior Holdings Corp.
James River Coal Terminal Company
Jarrell's Branch Coal Company
Juniper Coal Company
Kayenta Mobile Home Park, Inc.
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Logan Fork Coal Company
Martinka Coal Company
Midwest Coal Acquisition Corp.
Mountain View Coal Company
Mustang Energy Company, L.L.C.
Patriot Coal Company, L.P.
Peabody America, Inc.
Peabody Archveyor, L.L.C.
Peabody Coal Company
Peabody COALSALES Company
Peabody COALTRADE, Inc.
Peabody Development Company
Peabody Development Land Holdings, LLC
Peabody Energy Generation Holding Company
Peabody Energy Investments, Inc.
Peabody Energy Solutions, Inc.
Peabody Natural Gas, LLC
Peabody Natural Resources Company
Peabody PowerTree Investments, LLC
Peabody Recreational Lands, L.L.C.
Peabody Southwestern Coal Company
Peabody Terminals, Inc.
Peabody Venezuela Coal Corp.
Peabody-Waterside Development, L.L.C
Peabody Western Coal Company
PEC Equipment Company, LLC
Pine Ridge Coal Company
Point Pleasant Dock Company, LLC
Pond Creek Land Resources, LLC
Pond River Land Company
Porcupine Production, LLC
Porcupine Transportation, LLC
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Powder River Coal Company
Prairie State Generating Company, LLC
Rio Escondido Coal Corp.
Rivers Edge Mining, Inc.
Riverview Terminal Company
Seneca Coal Company
Sentry Mining Company
Snowberry Land Company
Star Lake Energy Company, L.L.C.
Thoroughbred, L.L.C.
Thoroughbred Generating Company, L.L.C.
Thoroughbred Mining Company, L.L.C.
Williamsville Coal Company, LLC
Schedule II
Non-Delaware Guarantors Jurisdiction of Incorporation or
------------------------ Organization
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Affinity Mining Company West Virginia
Arclar Company, LLC Indiana
Big Ridge, Inc. Illinois
Black Beauty Coal Company Indiana
Black Beauty Equipment Company Indiana
Black Beauty Mining, Inc. Indiana
Black Beauty Resources, Inc. Indiana
Black Beauty Underground, Inc. Indiana
Colony Bay Coal Company West Virginia
EACC Camps, Inc. West Virginia
Eagle Coal Company Indiana
Eastern Associated Coal Corp. West Virginia
Empire Marine, LLC Indiana
Falcon Coal Company Indiana
GIBCO Motor Express, LLC Indiana
Grand Eagle Mining, Inc. Kentucky
Hillside Mining Company West Virginia
Kanawha River Ventures I, LLC. West Virginia
Midco Supply and Equipment Corporation Illinois
North Page Coal Corp. West Virginia
Ohio County Coal Company Kentucky
Peabody Holding Company, Inc. New York
Sterling Smokeless Coal Company West Virginia
Sugar Camp Properties Indiana
Yankeetown Dock Corporation Indiana