Exhibit 2.7
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 PARAMONT COAL
COMPANY VIRGINIA, 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 3.5(c) or Section 3.5(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 3.7 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, 3.5(a) and
3.13 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 Sections 5.10(d), 5.10(e) or 5.10(f) of
the Acquisition 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 Administrative Services Agreement;
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 conduct in bad faith or
willful misconduct;
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(viii) 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)
(viii) 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
(ix) 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) in 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.
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(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 (ix), shall not be subject to the provisions
of paragraph (b) of this Section 2.2.
(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
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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.
(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
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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.
(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.
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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
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 Paramont 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.
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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 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)
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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, 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
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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.
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
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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 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)
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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,
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
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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:
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.
19
if to Buyer:
Paramont Coal Company Virginia, 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
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: Vice President
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.
20
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.
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.
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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.
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.
PARAMONT COAL COMPANY VIRGINIA, LLC,
a Delaware limited liability company
By:/s/ Michael J. Quillen
-----------------------------------------
Name: Michael J. Quillen
Title: Attorney-in-fact
ALPHA NATURAL RESOURCES, LLC, a Delaware
limited liability company
By:/s/ Michael J. Quillen
-----------------------------------------
Name: Michael J. 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
Dickenson-Russell Coal Company, 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, Dickenson-Russell Coal 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, 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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