Exhibit 2.3
INDEMNIFICATION AND GUARANTY AGREEMENT
INDEMNIFICATION AND GUARANTY AGREEMENT, dated as of December 13, 2002, by
and among PITTSTON COAL COMPANY, a Delaware corporation ("PCC"), THE PITTSTON
COMPANY, a Virginia corporation ("Pittston"), ALPHA NATURAL RESOURCES, LLC, a
Delaware limited liability company ("Buyer's Ultimate Parent") and
DICKENSON-RUSSELL COAL COMPANY, LLC, a Delaware limited liability company
("Buyer").
RECITALS
WHEREAS, Buyer and PCC have entered into an asset purchase agreement dated
October 29, 2002 (such agreement, together with the Exhibits and Schedules
attached thereto, as the same may be amended from time to time in accordance
with the terms thereof, being hereinafter referred to as the "Acquisition
Agreement"), pursuant to which Buyer will purchase or acquire from PCC and
certain of its Affiliates certain assets, and assume certain liabilities, all
upon the terms and subject to the conditions set forth in the Acquisition
Agreement;
WHEREAS, PCC and Buyer desire to provide for the terms upon which they will
indemnify each other with respect to certain matters relating to the
transactions contemplated by the Acquisition Agreement;
WHEREAS, Pittston owns, indirectly, all of the outstanding capital stock of
PCC and, as an inducement to Buyer to enter into the Acquisition Agreement, has
agreed to guarantee the obligations of PCC and certain of PCC's Affiliates under
this Agreement and the Acquisition Agreement; and
WHEREAS, Buyer's Ultimate Parent owns, indirectly, all of the outstanding
membership interests of Buyer and, as an inducement to PCC to enter into the
Acquisition Agreement, has agreed to guarantee the obligations of Buyer under
this Agreement and the Acquisition Agreement;
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NOW, THEREFORE, in consideration of the premises and mutual agreements,
covenants and conditions set forth herein and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto hereby agree as follows:
ARTICLE I
definitions
When used in this Agreement, the following terms shall have the meanings
specified below. All capitalized terms used but not otherwise defined in this
Agreement shall have the meanings specified in the Acquisition Agreement.
1.1. Acquisition Agreement.
"Acquisition Agreement" shall have the meaning set forth in the Recitals to
this Agreement.
1.2. Adverse Consequences.
"Adverse Consequences" means all actions, suits, proceedings, hearings,
investigations, charges, complaints, claims, demands, injunctions, judgments,
orders, decrees, rulings, damages, dues, penalties, fines, costs, amounts paid
in settlement, Liabilities, obligations, Taxes, liens, losses, expenses, and
fees, including court costs and reasonable attorneys' fees and expenses.
1.3. Basket.
"Basket" shall have the meaning set forth in Section 2.1(b)(i) hereof.
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1.4. Buyer.
"Buyer" shall have the meaning set forth in the preamble to this Agreement.
1.5. Buyer Indemnified Persons.
"Buyer Indemnified Persons" shall mean Buyer, its Affiliates (including,
after Closing, one or more Buyer Affiliates formed to hold the Virginia coal
operations of PCC acquired pursuant to the Acquisition Agreement), and their
respective members, directors, officers, employees, consultants, agents,
attorneys and representatives.
1.6. Buyer's Ultimate Parent.
"Buyer's Ultimate Parent" shall have the meaning set forth in the preamble
to this Agreement.
1.7. Buyer's Ultimate Parent Guaranty.
"Buyer's Ultimate Parent Guaranty" shall have the meaning set forth in
Section 3.2 hereof.
1.8. Claim Notice.
"Claim Notice" shall have the meaning set forth in Section 2.3(b) hereof.
1.9. Dispute.
"Dispute" shall have the meaning set forth in Article VII hereof.
1.10. Indemnified Party.
"Indemnified Party" shall have the meaning set forth in Section 2.3(b)
hereof.
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1.11. Indemnifying Party.
"Indemnifying Party" shall have the meaning set forth in Section 2.3(b)
hereof.
1.12. Other Acquisition Agreements.
"Other Acquisition Agreements" shall mean the agreements set forth on
Schedule A attached hereto.
1.13. Other Indemnification Agreements.
"Other Indemnification Agreements" shall mean the agreements set forth on
Schedule B attached hereto.
1.14. PCC.
"PCC" shall have the meaning set forth in the preamble to this Agreement.
1.15. Pittston.
"Pittston" shall have the meaning set forth in the preamble to this
Agreement.
1.16. Pittston Guaranty.
"Pittston Guaranty" shall have the meaning set forth in Section 3.1 hereof.
1.17. Pittston Indemnified Persons.
"Pittston Indemnified Persons" shall mean Pittston, PCC, the Asset Sale
Companies and their respective directors, officers, employees, agents,
stockholders and their respective Affiliates, and their respective directors,
officers, employees, consultants, agents, attorneys and representatives.
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ARTICLE II
indemnification
2.1. Indemnification by PCC.
(a) PCC agrees to indemnify and hold harmless Buyer Indemnified Persons
from and against, and reimburse them for, any and all Adverse
Consequences that any Buyer Indemnified Persons may suffer or incur or
become subject to as a result of:
(i) the inaccuracy or breach of any representation or warranty made
by PCC to Buyer in the Acquisition Agreement either: (A) as of
the date on which such representation or warranty was made or (B)
as of the Closing Date (provided that the consummation of the
transactions contemplated by the Acquisition Agreement in
accordance with the terms shall not be deemed without more to
have cause a breach of any representation or warranty);
(ii) any failure by PCC to carry out, perform, satisfy or discharge
any of its covenants, agreements, undertakings, liabilities or
obligations in or under the Acquisition Agreement (other than
Article VII and Article VIII thereof);
(iii) any failure by PCC to carry out, perform, satisfy and discharge
any of its covenants, agreements, undertakings, liabilities or
obligations in or under Article VII and/or Article VIII of the
Acquisition Agreement; and
(iv) any failure by PCC or the Asset Sale Companies to satisfy the
Retained Liabilities.
(b) Notwithstanding the provisions of Section 2.1(a), PCC shall not be
required to indemnify any of Buyer Indemnified Persons with respect to
the matters described in Sections 2.1(a)(i) and 2.1(a)(ii):
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(i) unless and until the sum of (A) the Adverse Consequences for
which indemnification pursuant to (1) Sections 2.1(a)(i) and
2.1(a)(ii) or (2) in Sections 2.1(a)(i) and 2.1(a)(ii) of the
Other Indemnification Agreements is sought plus (B) any amounts
paid by Buyer to obtain any of the consents listed on Schedule
6.1(e)(i) of the Acquisition Agreement or in Schedule 6.1(e)(i)
of the Other Acquisition Agreements shall exceed $100,000 (the
"Basket"), in which case the entire amount of such Adverse
Consequences is recoverable;
(ii) unless the right to indemnity is asserted pursuant to Section
2.3, (i) on or before thirty (30) days after the Closing Date for
any breach of PCC's representations specified in Section 3.6(c)
or Section 3.6(d) of the Acquisition Agreement, (ii) on or before
the fifth anniversary of the Closing Date for any breach of PCC's
representations specified in Section 3.8 of the Acquisition
Agreement and (iii) on or before the second anniversary of the
Closing Date for any other matter described in Sections 2.1(a)(i)
or 2.1(a)(ii); and
(iii) for any matter, to the extent that the aggregate amount of the
Adverse Consequences for which Buyer Indemnified Persons have
been indemnified pursuant to Sections 2.1(a)(i) and 2.1(a)(ii) or
in Sections 2.1(a)(i) and 2.1(a)(ii) of the Other Indemnification
Agreements exceeds $15,000,000 (the "Cap").
(c) Notwithstanding the foregoing, PCC agrees that any claim by a Buyer
Indemnified Person for indemnification (i) arising out of, relating
to, in the nature of or caused by any breach of PCC's representations
specified in Sections 3.1, 3.2, 3.3, 3.6(a) and 3.14 of the
Acquisition Agreement or (ii) pursuant to Sections 2.1(a)(iii) and
2.1(a)(iv), shall not be subject to the provisions of paragraph (b) of
this Section 2.1.
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(d) PCC agrees that its indemnification obligation under this Agreement
includes the obligation to indemnify Buyer Indemnified Persons for
Adverse Consequences suffered through and after the date of the claim
for indemnification (including any Adverse Consequences Buyer
Indemnified Persons may suffer after the end of any applicable
survival period, as long as a claim for indemnification is made before
the end of the applicable survival period and the Adverse Consequences
suffered relate to such claim).
2.2. Indemnification by Buyer.
(a) Buyer agrees to indemnify and hold harmless Pittston Indemnified
Persons from and against and reimburse them for, any and all Adverse
Consequences that any Pittston Indemnified Persons may suffer or incur
or become subject to as a result of:
(i) the inaccuracy or breach of any representation or warranty made
by Buyer in the Acquisition Agreement either: (A) as of the date
on which such representation or warranty was made or (B) as of
the Closing Date (provided that the consummation of the
transactions contemplated by the Acquisition Agreement in
accordance with its terms shall not be deemed without more to
have caused a breach of any representation or warranty);
(ii) any failure by Buyer to carry out, perform, satisfy and discharge
any of its covenants, agreements, undertakings, liabilities or
obligations in or under the Acquisition Agreement (other than
Article VII and Article VIII thereof and with respect to the
Permits);
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(iii) any liability that any Pittston Indemnified Persons may suffer
or incur or become subject to because of: (A) any failure by
Buyer to carry out, perform, satisfy and discharge any of its
covenants, agreements, undertakings, liabilities or obligations
in the Acquisition Agreement relating to the Permits, or (B) the
use by Buyer or its post-Closing Affiliates of any Permit held by
PCC or any of its pre-Closing Affiliates;
(iv) the ownership of the Purchased Assets on or after the Closing
Date;
(v) any failure by Buyer to carry out, perform, satisfy and discharge
any of its covenants, agreements, undertakings, liabilities or
obligations in or under Article VII and/or Article VIII of the
Acquisition Agreement, excluding the Retained Liabilities;
(vi) any liability that any Pittston Indemnified Person may suffer or
incur or become subject to because of any actions it takes
pursuant to the Administrative Services Agreement; provided,
however, that this Section 2.2(a)(vi) shall not apply to any
liability resulting from or arising out of any Pittston
Indemnified Person's conduct in bad faith or willful misconduct;
(vii) any liability that any Pittston Indemnified Person may suffer or
incur or become subject to because of any actions it takes
pursuant to the Subleases; provided, however, that this Section
2.2(a)(vii) shall not apply to any liability resulting from or
arising out of any Pittston Indemnified Person's default under
the terms of the Subleases, conduct in bad faith or willful
misconduct; and
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(viii) any failure by Buyer to satisfy the Assumed Liabilities.
(b) The foregoing notwithstanding, Buyer shall not be required to
indemnify any Pittston Indemnified Persons with respect to the matters
described in Sections 2.2(a)(i) and 2.2(a)(ii):
(i) unless and until the sum of (A) Adverse Consequences for which
indemnification pursuant to (1) Sections 2.2(a)(i) and 2.2(a)(ii)
or (2) Sections 2.2(a)(i) and 2.2(a)(ii) of the Other
Indemnification Agreements is sought plus (B) any amounts paid by
PCC to obtain any of the consents listed on Schedule 6.1(e)(ii)
of the Acquisition Agreement or in Schedule 6.1(e)(ii) of the
Other Acquisition Agreements shall exceed the Basket, in which
case the entire amount of such Adverse Consequences is
recoverable;
(ii) unless the right to indemnity is asserted on or before the second
anniversary of the Closing Date pursuant to Section 2.3; and
(iii) for any matter, to the extent that the aggregate amount of
Adverse Consequences for which the Pittston Indemnified Persons
have been indemnified pursuant to Sections 2.2(a)(i) and
2.2(a)(ii) or in Sections 2.2(a)(i) and 2.2(a)(ii) of the Other
Indemnification Agreements exceeds the Cap.
(c) Notwithstanding the foregoing, Buyer agrees that any claim by a
Pittston Indemnified Person for indemnification (i) arising out of,
relating to, in the nature of or caused by any breach of Buyer's
representations specified in Sections 4.1, 4.2, 4.3 and 4.4 of the
Acquisition Agreement or (ii) pursuant to Sections 2.2(a)(iii) through
(viii), shall not be subject to the provisions of paragraph (b) of
this Section 2.2.
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(d) Notwithstanding the foregoing, nothing in Section 2.2(a)(iv) shall
diminish the right of any Buyer Indemnified Person to seek
indemnification from PCC after the Closing Date pursuant to the terms
of this Agreement.
(e) Buyer agrees that its indemnification obligation under this Agreement
includes the obligation to indemnify Pittston Indemnified Persons for
Adverse Consequences suffered through and after the date of the claim
for indemnification (including any Adverse Consequences Pittston
Indemnified Persons may suffer after the end of any applicable
survival period, as long as a claim for indemnification is made before
the end of the applicable survival period and the Adverse Consequences
suffered relate to such claim).
2.3. Indemnification Procedures.
(a) All claims for indemnification under this Agreement shall be asserted
and resolved pursuant to this Section 2.3.
(b) Each party entitled to indemnification under this Agreement (the
"Indemnified Party") shall give notice (a "Claim Notice") to the party
required to provide such indemnification (the "Indemnifying Party")
promptly after such Indemnified Party has notice of any Adverse
Consequence which may give rise to a claim for indemnification against
the other party under this Agreement, provided, however, that no delay
on the part of the Indemnified Party in notifying the Indemnifying
Party shall relieve the Indemnifying Party from any obligation
hereunder unless (and then solely to the extent) the Indemnifying
Party thereby is prejudiced. The Indemnified Party shall not be
required to commence litigation or take any action against any third
party prior to delivery of the Claim Notice.
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(c) The Indemnifying Party will have the right (at its expense) to assume
the investigation and/or defense of any Adverse Consequence or any
litigation resulting therefrom so long as (i) the Indemnifying Party
notifies the Indemnified Party in writing (within 20 days after the
Indemnified Party has given the Claim Notice) that the Indemnifying
Party will indemnify the Indemnified Party from and against the
entirety of the Adverse Consequence, (ii) the Indemnifying Party
provides the Indemnified Party with evidence reasonably acceptable to
the Indemnified Party that the Indemnifying Party will have the
financial resources to defend, and otherwise indemnify for, the
Adverse Consequence and fulfill its indemnification obligations
hereunder and (iii) the Adverse Consequence involves only money
damages and does not seek an injunction or other equitable relief.
(d) So long as the Indemnifying Party is conducting the defense of the
Adverse Consequence in accordance with Section 2.3(c), (A) the
Indemnified Party may retain separate co-counsel at its sole cost and
expense and participate in the defense of the Adverse Consequence, (B)
the Indemnified Party will not consent to the entry of any judgment or
enter into any settlement with respect to the Adverse Consequence
without the prior written consent of the Indemnifying Party (not to be
withheld unreasonably), and (C) the Indemnifying Party will not
consent to the entry of any judgment or enter into any settlement with
respect to the Adverse Consequence without the prior written consent
of the Indemnified Party; provided, that the Indemnifying Party may
consent to such judgment or enter into such settlement without the
prior written consent of the Indemnified Party so long as an
unconditional term of any such judgment or settlement includes the
giving by the claimant or plaintiff to the Indemnified Party of a
release from all liability with respect to such Adverse Consequence.
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(e) In the event any of the conditions in Section 2.3(c) is or becomes
unsatisfied, however, (A) the Indemnified Party may defend against,
and consent to the entry of any judgment or enter into any settlement
with respect to, the Adverse Consequence in any manner it may
reasonably deem appropriate (and the Indemnified Party need not
consult with, or obtain any consent from, any Indemnifying Party in
connection therewith), (B) the Indemnifying Party will reimburse the
Indemnified Party promptly and periodically for the costs of defending
against the Adverse Consequence (including reasonable attorneys' fees
and expenses), and (C) the Indemnifying Parties will remain
responsible for any Adverse Consequence the Indemnified Party may
suffer resulting from, arising out of, relating to, in the nature of
or caused by the Adverse Consequence to the fullest extent provided in
this Agreement.
(f) Any indemnification with respect to the matters set forth in Section
2.1(a)(iv) and addressed expressly in the Cooperation Agreement shall
be conducted exclusively in accordance with the Cooperation Agreement.
Notwithstanding any provision of this Agreement, PCC shall have no
obligation to indemnify any Buyer Indemnified Person with respect to
any claim or matter to the extent that any Buyer Indemnified Person
has failed to comply with its obligations under the Cooperation
Agreement with respect to such claim or matter or has taken any action
that prevents, hinders or delays PCC from managing or disposing of
such claim or matter in the manner elected by PCC in its sole
discretion.
2.4. Insurance Proceeds.
The amount of any indemnification payable in connection with any
transaction contemplated by this Agreement or the Acquisition Agreement shall be
net of any insurance proceeds available, under any insurance policies in effect
at the time that are maintained in the Ordinary Course of Business, to a Buyer
Indemnified Person or a Pittston Indemnified Person, respectively, in connection
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with the events or circumstances giving rise to the indemnification. For
purposes of this Section 2.4, any pollution and legal liability insurance
policies or an insurance policy covering loss in connection with the
representations and warranties contained in the Acquisition Agreement will be
deemed not to be maintained in the Ordinary Course of Business.
2.5. Exclusivity of Rights and Procedures.
The parties agree that, except as set forth in Section 2.3(f) of this
Agreement, the D-R Service Agreement, Article VII of the Acquisition Agreement
or in any Articles titled "Certain Tax Matters" of the Other Acquisition
Agreements, this Agreement shall constitute the sole and exclusive remedy of the
parties hereto with respect to the subject matters addressed in this Agreement,
the Acquisition Agreement and the transactions contemplated by the Acquisition
Agreement. Each party to this Agreement hereby waives and releases the other
parties from any and all claims and other causes of action, including claims for
contribution, related to those subject matters, other than claims (i) pursuant
to the terms of this Agreement, (ii) related to the Retained Liabilities (in the
case of Buyer Indemnified Persons) or the Assumed Liabilities (in the case of
the Pittston Indemnified Persons), (iii) for fraud, and (iv) for injunctive
relief.
ARTICLE III
Guaranties
3.1. Pittston Guaranty.
(a) Pittston hereby irrevocably and unconditionally guarantees to Buyer
(the "Pittston Guaranty") the full and punctual performance and
compliance by PCC with each and every covenant, term and condition to
be performed or complied with by PCC under this Agreement and the
Acquisition Agreement. The Pittston Guaranty expressed in this Section
3.1 is an absolute, present, primary and continuing guaranty of
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performance and compliance and not of collectibility and is in no way
conditioned or contingent upon any attempt to enforce such performance
or compliance by PCC or upon any other condition or contingency.
(b) Pittston hereby expressly waives (i) notice of acceptance of the
Pittston Guaranty and (ii) any other notice given to PCC in accordance
with the provisions of the Agreement on any default under the
Agreement or otherwise. Pittston hereby authorizes Buyer to forbear
with respect to, amend, modify, enlarge, extend, compromise and
discharge any or all of the obligations of PCC under the Agreement
without notice to or consent by Pittston. Pittston acknowledges and
agrees that its liability under the Pittston Guaranty is joint and
several with PCC and, upon any default by PCC, Buyer shall not be
obligated to first attempt enforcement against PCC. Pittston hereby
waives any and all defenses to enforcement of the Pittston Guaranty,
now existing or hereafter arising, which may be available to
guarantors, sureties and other secondary parties at law or in equity.
(c) Pittston represents and warrants to Buyer that (i) Pittston is a
corporation validly existing and in good standing under the laws of
the Commonwealth of Virginia; (ii) all necessary corporate action has
been duly taken by it to authorize the execution, delivery and
performance by it of the Pittston Guaranty, (iii) the Pittston
Guaranty is being executed on Pittston's behalf by a duly authorized
representative, (iv) the Pittston Guaranty is the legally valid and
binding obligation of Pittston enforceable in accordance with its
terms, and (v) the execution and the delivery of the Pittston Guaranty
will not (A) conflict with, or result in a violation or breach of, or
a default, right to accelerate, right to exercise any remedy or loss
of rights under, or result in the creation of any Lien (other than
Permitted Liens) under or pursuant to, any provision of Pittston's
Articles of Incorporation or Bylaws or of any material franchise,
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mortgage, deed of trust, lease, license, instrument, agreement,
consent, approval, waiver or understanding to which Pittston is a
party or by which Pittston is bound, or any Law or any order,
judgment, writ, injunction or decree to which Pittston is a party or
by which Pittston may be bound or affected; (B) require the approval,
consent or authorization of, prior notice to, or filing or
registration with any Governmental Authority or contravene, conflict
with or result in a violation of any of the terms or requirements of,
or give any Governmental Authority the right to revoke, withdraw,
suspend, cancel or terminate any authorization or permit issued by a
Governmental Authority that is held by Pittston or that otherwise
relates to the Pittston's business; or (C) give any Governmental
Authority or other Person the right to challenge any of the
transactions contemplated hereunder or exercise any remedy or obtain
any relief under any Law to which Pittston is subject.
(d) Pittston agrees to pay all reasonable costs and expenses, including
reasonable attorney fees and related costs, incurred by Buyer
Indemnified Persons in enforcing Pittston's liability to Buyer
Indemnified Persons under the Pittston Guaranty whether or not a civil
action or similar proceeding (including claims and proceedings in and
before the bankruptcy court or arbitrators) is filed, prosecuted or
appealed. If an action or proceeding is filed, prosecuted or appealed,
the reasonableness of such attorney fees shall be determined by the
trial judge and if, appealed, by the appellate court.
(e) The Pittston Guaranty shall be binding upon Pittston and its
successors and assigns, and shall inure to the benefit of and be
enforceable by Buyer and its successors and assigns. For purposes of
the Pittston Guaranty, Pittston shall be deemed to include the
surviving entity in any merger or consolidation involving Pittston,
which survivor shall be bound by the provisions of the Pittston
Guaranty and this Agreement.
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3.2. Buyer's Ultimate Parent Guaranty.
(a) Buyer's Ultimate Parent hereby irrevocably and unconditionally
guarantees to PCC (the "Buyer's Ultimate Parent Guaranty") the full
and punctual performance and compliance by Buyer with each and every
covenant, term and condition to be performed or complied with by Buyer
under this Agreement, the Acquisition Agreement and the Promissory
Note. Buyer's Ultimate Parent Guaranty expressed in this Section 3.2
is an absolute, present, primary and continuing guaranty of
performance and compliance and not of collectibility and is in no way
conditioned or contingent upon any attempt to enforce such performance
or compliance by Buyer or upon any other condition or contingency.
(b) Buyer's Ultimate Parent hereby expressly waives (i) notice of
acceptance of Buyer's Ultimate Parent Guaranty and (ii) any other
notice given to Buyer in accordance with the provisions of the
Agreement on any default under the Agreement or otherwise. Buyer's
Ultimate Parent hereby authorizes PCC to forbear with respect to,
amend, modify, enlarge, extend, compromise and discharge any or all of
the obligations of Buyer under the Agreement without notice to or
consent by Buyer's Ultimate Parent. Buyer's Ultimate Parent
acknowledges and agrees that its liability under Buyer's Ultimate
Parent Guaranty is joint and several with Buyer and, upon any default
by Buyer, PCC shall not be obligated to first attempt enforcement
against Buyer. Buyer's Ultimate Parent hereby waives any and all
defenses to enforcement of Buyer's Ultimate Parent Guaranty, now
existing or hereafter arising, which may be available to guarantors,
sureties and other secondary parties at law or in equity.
(c) Buyer's Ultimate Parent represents and warrants to PCC that (i)
Buyer's Ultimate Parent is a limited liability company validly
existing and in good standing under the laws of the State of Delaware;
(ii) all necessary corporate action has been duly taken by it to
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authorize the execution, delivery and performance by it of Buyer's
Ultimate Parent Guaranty, (iii) Buyer's Ultimate Parent Guaranty is
being executed on Buyer's Ultimate Parent's behalf by a duly
authorized representative, (iv) Buyer's Ultimate Parent Guaranty is
the legally valid and binding obligation of Buyer's Ultimate Parent
enforceable in accordance with its terms, and (v) the execution and
the delivery of Buyer's Ultimate Parent Guaranty will not (A) conflict
with, or result in a violation or breach of, or a default, right to
accelerate, right to exercise any remedy or loss of rights under, or
result in the creation of any Lien (other than Permitted Liens) under
or pursuant to, any provision of Buyer's Ultimate Parent's Certificate
of Formation, Operating Agreement or other organizational documents or
of any material franchise, mortgage, deed of trust, lease, license,
instrument, agreement, consent, approval, waiver or understanding to
which Buyer's Ultimate Parent is a party or by which Buyer's Ultimate
Parent is bound, or any Law or any order, judgment, writ, injunction
or decree to which Buyer's Ultimate Parent is a party or by which
Buyer's Ultimate Parent may be bound or affected; (B) require the
approval, consent or authorization of, prior notice to, or filing or
registration with any Governmental Authority or contravene, conflict
with or result in a violation of any of the terms or requirements of,
or give any Governmental Authority the right to revoke, withdraw,
suspend, cancel or terminate any authorization or permit issued by a
Governmental Authority that is held by Buyer's Ultimate Parent or that
otherwise relates to Buyer's Ultimate Parent's business; or (C) give
any Governmental Authority or other Person the right to challenge any
of the transactions contemplated hereunder or exercise any remedy or
obtain any relief under any Law to which Buyer's Ultimate Parent is
subject.
(d) Buyer's Ultimate Parent agrees to pay all reasonable costs and
expenses, including reasonable attorney fees and related costs,
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incurred by the Pittston Indemnified Persons in enforcing Buyer's
Ultimate Parent's liability to the Pittston Indemnified Persons under
Buyer's Ultimate Parent Guaranty whether or not a civil action or
similar proceeding (including claims and proceedings in and before the
bankruptcy court or arbitrators) is filed, prosecuted or appealed. If
an action or proceeding is filed, prosecuted or appealed, the
reasonableness of such attorney fees shall be determined by the trial
judge and if, appealed, by the appellate court.
(e) Buyer's Ultimate Parent Guaranty shall be binding upon Buyer's
Ultimate Parent and its successors and assigns, and shall inure to the
benefit of and be enforceable by PCC and its successors and assigns.
For purposes of Buyer's Ultimate Parent Guaranty, Buyer's Ultimate
Parent shall be deemed to include the surviving entity in any merger
or consolidation involving Buyer's Ultimate Parent, each of whom shall
be bound by the provisions of the Buyer's Ultimate Parent Guaranty and
this Agreement.
ARTICLE IV
SEVERABILITY
If any provision of this Agreement is held invalid or unenforceable by any
court of competent jurisdiction, the other provisions of this Agreement will
remain in full force and effect. Any provision of this Agreement held invalid or
unenforceable only in part or degree will remain in full force and effect to the
extent not held invalid or unenforceable.
ARTICLE V
notices
All communications, notices and disclosures required or permitted by this
Agreement shall be in writing and shall be deemed to have been given when
delivered personally or by messenger or by overnight delivery service, or within
five days of being mailed by registered or certified United States mail, postage
prepaid, return receipt requested, in all cases addressed to the person for whom
it is intended at his address set forth below or to such other address as a
party shall have designated by notice in writing to the other parties in the
manner provided by this Article V:
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if to PCC or Pittston, to them at:
Pittston Coal Company
448 N.E. Main Street
P. O. Box 5100
Lebanon, Virginia 24266
Attention: President
with a copy to:
Pittston Coal Company
c/o The Pittston Company
1801 Bayberry Court
P. O. Box 18100
Richmond, Virginia 23226-8100
Attention: General Counsel
and a copy to:
Hunton & Williams
Riverfront Plaza, East Tower
951 East Byrd Street
Richmond, Virginia 23219
Attention: Louanna O. Heuhsen, Esq.
if to Buyer:
Dickenson-Russell Coal Company, LLC
c/o Alpha Natural Resources, LLC
406 West Main Street
Abingdon, Virginia 24212
Attention: Vice President
with a copy to:
First Reserve Corporation
411 West Putnam, Suite 109
Greenwich, Connecticut 06830
Attention: Alex T. Krueger
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First Reserve Corporation
1801 California Street, Suite 4110
Denver, Colorado 80202
Attention: Thomas R. Denison
Bartlit Beck Herman Palenchar & Scott
1899 Wynkoop Street, Suite 800
Denver, Colorado 80202
Attention: James L. Palenchar, Esq.
if to Buyer's Ultimate Parent, to it at:
Alpha Natural Resources, LLC
406 West Main Street
Abingdon, Virginia 24212
Attention: Michael J. Quillen
with a copy to:
First Reserve Corporation
411 West Putnam, Suite 109
Greenwich, Connecticut 06830
Attention: Alex T. Krueger
First Reserve Corporation
1801 California Street, Suite 4110
Denver, Colorado 80202
Attention: Thomas R. Denison
Bartlit Beck Herman Palenchar & Scott
1899 Wynkoop Street, Suite 800
Denver, Colorado 80202
Attention: James L. Palenchar, Esq.
ARTICLE VI
ASSIGNMENT
This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and permitted assigns, but this
Agreement and the rights, interests or obligations hereunder shall not be
assignable by Buyer's Ultimate Parent, Buyer, Pittston or PCC without the prior
written consent of the other parties and any attempt to make such an assignment
without such consent shall be void and of no effect.
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ARTICLE VII
arbitration
Any dispute, controversy or claim arising out of or relating to this
Agreement (a "Dispute") shall be settled by binding arbitration in accordance
with the commercial arbitration rules of the American Arbitration Association.
PCC and Buyer shall jointly select one arbitrator. If the two parties shall fail
to designate an arbitrator within fourteen (14) calendar days after arbitration
is requested, then such arbitrator shall be selected by the American Arbitration
Association or any successor thereto upon application of either party. No
Dispute shall be consolidated in any arbitration with any dispute, claim or
controversy of any other party. The arbitration shall be conducted in Roanoke,
Virginia, and any court having jurisdiction thereof may immediately issue
judgment on the arbitration award. The parties agree that the arbitration
provided for in this Article VII shall be the exclusive means to resolve all
Disputes.
ARTICLE VIII
MISCELLANEOUS
8.1. Headings.
The headings contained in this Agreement are for reference purposes only
and shall not affect in any way the meaning or interpretation of this Agreement.
8.2. Integration.
This Agreement and any other agreement entered into contemporaneously with
this Agreement among PCC, Pittston, Buyer and Buyer's Ultimate Parent or the
Affiliates of any of them constitute the entire agreement and supercede all
prior agreements and understandings not reflected in the Acquisition Agreement,
both written and oral, among the parties with respect to the subject matter
hereof.
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8.3. Counterparts.
This Agreement may be executed in two or more counterparts, each of which
shall be deemed an original, and all of which shall constitute one and the same
instrument.
8.4. Governing Law.
This Agreement shall be governed in all respects, including validity,
interpretation and effect, by the laws of the Commonwealth of Virginia, without
regard to the conflicts of laws principles thereof.
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IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the
date first above written.
DICKENSON-RUSSELL COAL COMPANY, LLC,
a Delaware limited liability company
By:/s/ Anthony McGartland
-----------------------------------------
Name: Anthony McGartland
Title: President
ALPHA NATURAL RESOURCES, LLC, a Delaware limited
liability company
By:/s/ Mike Quillen
-----------------------------------------
Name: Mike Quillen
Title: President
PITTSTON COAL COMPANY,
a Delaware corporation
By:/s/ Michael D. Brown
-----------------------------------------
Name: Michael D. Brown
Title: Vice President - Development and Technical
Resources
THE PITTSTON COMPANY,
a Virginia corporation
By:/s/ James B. Hartough
-----------------------------------------
Name: James B. Hartough
Title: Vice President - Corporate Finance and
Treasurer
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Schedule A
Asset Purchase Agreement by and between Pittston Coal Company and Paramont
Coal Company Virginia, LLC, dated as of October 29, 2002, as amended.
Asset Purchase Agreement by and between Pittston Coal Company and Alpha
Land and Reserves, LLC, dated as of October 29, 2002, as amended.
Asset Purchase Agreement by and between Pittston Coal Company and Alpha
Coal Sales Co., LLC, dated as of October 29, 2002, as amended.
Asset Purchase Agreement by and between Pittston Coal Company and Alpha
Terminal Company, LLC, dated as of October 29, 2002, as amended.
Asset Purchase Agreement by and between Pittston Coal Company and Maxxim
Rebuild Co., LLC, dated as of October 29, 2002, as amended.
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Schedule B
Indemnification and Guaranty Agreement by and among The Pittston Company,
Pittston Coal Company, Paramont Coal Company Virginia, LLC and Alpha Natural
Resources, LLC, dated as of December 13, 2002.
Indemnification and Guaranty Agreement by and among The Pittston Company,
Pittston Coal Company, Alpha Land and Reserves, LLC and Alpha Natural Resources,
LLC, dated as of December 13, 2002.
Indemnification and Guaranty Agreement by and among The Pittston Company,
Pittston Coal Company, Alpha Coal Sales Co., LLC and Alpha Natural Resources,
LLC, dated as of December 13, 2002.
Indemnification and Guaranty Agreement by and among The Pittston Company,
Pittston Coal Company, Alpha Terminal Company, LLC and Alpha Natural Resources,
LLC, dated as of December 13, 2002.
Indemnification and Guaranty Agreement by and among The Pittston Company,
Pittston Coal Company, Maxxim Rebuild Co., LLC and Alpha Natural Resources, LLC,
dated as of December 13, 2002.
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