SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 8-K

                Current Report Pursuant to Section 13 or 15(d) of
                       The Securities Exchange Act of 1934

                Date of Report (Date of earliest event reported):
                                December 13, 2002

                              THE PITTSTON COMPANY
             (Exact Name of registrant as specified in its charter)

    Virginia                    1-9148                     54-1317776
 (State or other              (Commission              (I.R.S. Employer
  jurisdiction                 File Number)           Identification No.)
of Incorporation)

1801 Bayberry Court
P. O. Box 18100
Richmond, VA                                                  23226-8100
(Address of principal                                         (Zip Code)
executive offices)

                                  (804)289-9600
              (Registrant's telephone number, including area code)

Item 2        Acquisition or Disposition of Assets

On December 13, 2002, subsidiaries of The Pittston Company consummated the sale
of substantially all of their remaining coal assets in Virginia to subsidiaries
of Alpha Natural Resources, LLC, an affiliate of First Reserve Corporation, for
an aggregate purchase price of approximately $76 million, including $36 million
in cash, $24 million in notes and the present value of minimum royalty payments
on coal production and an estimated $16 million of assumed liabilities. The
purchase price was determined through arm's-length negotiations.

The $24 million fair value of future payments includes an $8 million note for
the sale of coal inventory and $16 million for the present value of minimum
future royalties to be received within five years. Liabilities assumed by
subsidiaries of Alpha Natural Resources, LLC were primarily for the reclamation
of Virginia coal mining properties.

Assets sold in the transaction included primarily real property, productive coal
mining assets (machinery and equipment) and coal inventory and supplies.

Item 7   Financial Statements, Pro Forma Financial Information and Exhibits

          a)   Financial Statements of Businesses Acquired

               Not  applicable

          b)   Pro Forma Financial Information

     Pro forma effects of the sale of the remaining coal assets in Virginia

     The objective of pro forma financial information is to present information
     about the continuing impact of a transaction by showing how it might have
     affected historical financial statements if the transaction had been
     consummated at an earlier period. The pro forma adjustments below should be
     read in conjunction with The Pittston Company's historical financial
     statements included in its Annual Report on Form 10-K for the year ended
     December 31, 2001, and quarterly report on Form 10-Q for the three and nine
     months ended September 30, 2002.

     As described in Item 2, subsidiaries of The Pittston Company consummated
     the sale of substantially all of their remaining coal assets in Virginia to
     subsidiaries of Alpha Natural Resources, LLC, an affiliate of First Reserve
     Corporation, for an aggregate purchase price of approximately $76 million.

     A pro forma statement of operations is based on a company's historical
     results from continuing operations adjusted to reflect the sale transaction
     as if it had occurred at the beginning of the reporting period. As the
     disposed business has been classified within discontinued operations in The
     Pittston Company's previously filed consolidated financial statements, a
     pro forma statement of operations will not be filed.

     For purposes of reporting a pro forma balance sheet, it is assumed that the
     sales transaction occurred on the balance sheet date. As the remaining
     assets and liabilities in Virginia were segregated on the face of the
     balance sheet within net assets and liabilities of discontinued operations,
     a limited number of pro forma adjustments are required to The Pittston
     Company's historical balance sheet on September 30, 2002. Pro forma amounts
     reported are based on preliminary estimates.

                                                                                                       Pro forma
                                                       Consolidated                                 Consolidated
                                                       September 30              Pro forma          September 30
Unaudited                                                      2002            Adjustments                  2002
- -------------------------------------------------------------------------------------------------------------------

Assets
Current assets:
                                                                                     
Cash and cash equivalents                                    122.9                   36.0     1
                                                                                     (4.6)    3
                                                                                    (31.4)    4           122.9
Note receivable - inventory                                    -                      8.3     1             8.3
Accounts receivable, net                                     528.3                    -                   528.3
Prepaid expenses and other                                    65.7                    4.0     1            69.7
Deferred income taxes                                         90.9                    -                    90.9
Discontinued operations                                       35.1                  (27.9)    2             7.2
- -------------------------------------------------------------------------------------------------------------------
     Total current assets                                    842.9                  (15.6)                827.3

Property and equipment, net                                  828.9                    -                   828.9
Goodwill, net                                                224.3                    -                   224.3
Prepaid pension assets                                       140.6                    -                   140.6
Deferred income taxes                                        234.9                    -                   234.9
Other assets                                                 159.8                   11.7     1           171.5
Discontinued operations                                      101.2                  (51.4)    2            49.8
- -------------------------------------------------------------------------------------------------------------------
     Total assets                                          2,532.6                  (55.3)              2,477.3
- -------------------------------------------------------------------------------------------------------------------

- -------------------------------------------------------------------------------------------------------------------
Liabilities and shareholders' equity
Current liabilities:
Short-term borrowings                                         37.4                    -                    37.4
Current maturities of long-term debt                          13.8                    -                    13.8
Accounts payable                                             264.5                    -                   264.5
Accrued liabilities                                          537.1                    -                   537.1
Discontinued operations                                       13.3                   (3.0)    1,2
                                                                                     (4.6)    3             5.7
- -------------------------------------------------------------------------------------------------------------------
     Total current liabilities                               866.1                   (7.6)                858.5
- -------------------------------------------------------------------------------------------------------------------

Long-term debt                                               313.9                  (31.4)    4           282.5
Postretirement benefits
     other than pensions                                     402.4                    -                   402.4
Workers' compensation
     and other claims                                         91.1                    -                    91.1
Deferred revenue                                             128.6                    -                   128.6
Deferred income taxes                                         21.3                    -                    21.3
Other liabilities                                            152.1                    -                   152.1
Discontinued operations                                       31.3                  (16.3)    1,2          15.0
- -------------------------------------------------------------------------------------------------------------------
     Total liabilities                                     2,006.8                  (55.3)              1,951.5

Shareholders' equity                                         525.8                    -                   525.8

- -------------------------------------------------------------------------------------------------------------------
     Total liabilities and
     shareholders' equity                                  2,532.6                  (55.3)              2,477.3
- -------------------------------------------------------------------------------------------------------------------

On December 23, 2002, The Pittston Company announced that its previously
announced agreement to dispose of certain of its subsidiaries' coal mining
assets in West Virginia had been terminated. As a result, the remaining
Company-operated active mining operations will cease by the end of 2002. The pro
forma adjustments presented do not reflect the cessation of operations in West
Virginia.

Pro forma adjustments:

          1.   To record proceeds of sale, including cash, note receivable, the
               present value of future minimum royalties to be received and
               liabilities assumed by purchaser.

          2.   To remove the net assets of the sold Virginia coal mining
               business

          3.   To reflect repayment of capital lease.

          4.   To reflect repayment of debt with remaining cash proceeds.

          c)   Exhibits
               See  Exhibit Index

                                    SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.

                                  THE PITTSTON COMPANY
                                      (Registrant)

                                  By  /s/ Robert T. Ritter
                                    ------------------------------------------
                                      Robert T. Ritter
                                      Vice President and Chief Financial Officer

Dated: December 30, 2002

                                  EXHIBIT INDEX

We omitted the schedules and exhibits referenced in the attached Agreements in
accordance with Item 601(b)(2) of regulation S-K. In accordance with Item
601(b)(2) of regulation S-K, we will furnish a copy of any omitted schedule
and/or exhibit supplementally to the Securities and Exchange Commission upon
request.

     2.1  Asset Purchase Agreement, dated as of October 29, 2002, by and between
          Pittston Coal Company and Dickenson-Russell Coal Company, LLC ("APA
          No. 1")

     2.2  Amendment to APA No. 1, dated as of December 13, 2002, by and between
          Pittston Coal Company and Dickenson-Russell Coal Company, LLC

     2.3  Indemnification and Guaranty Agreement, dated as of December 13, 2002,
          by and among Pittston Coal Company, The Pittston Company, Alpha
          Natural Resources, LLC and Dickenson-Russell Coal Company, LLC

     2.4  Cooperation Agreement, dated as of December 13, 2002, by and between
          Pittston Coal Company and Dickenson-Russell Coal Company, LLC

     2.5  Asset Purchase Agreement, dated as of October 29, 2002, by and between
          Pittston Coal Company and Paramont Coal Company Virginia, LLC ("APA
          No. 2")

     2.6  Amendment to APA No. 2, dated as of December 13, 2002, by and between
          Pittston Coal Company and Paramont Coal Company Virginia, LLC

     2.7  Indemnification and Guaranty Agreement, dated as of December 13, 2002,
          by and among Pittston Coal Company, The Pittston Company, Alpha
          Natural Resources, LLC and Paramont Coal Company Virginia, LLC

     2.8  Cooperation Agreement, dated December 13, 2002, by and between
          Pittston Coal Company and Paramont Coal Company Virginia, LLC

     2.9  Asset Purchase Agreement, dated as of October 29, 2002, by and between
          Pittston Coal Company and Alpha Land and Reserves, LLC ("APA No. 3")

     2.10 Amendment to APA No. 3, dated as of December 13, 2002, by and between
          Pittston Coal Company and Alpha Land and Reserves, LLC

     2.11 Indemnification and Guaranty Agreement, dated as of December 13, 2002,
          by and among Pittston Coal Company, The Pittston Company, Alpha
          Natural Resources, LLC and Alpha Land and Reserves, LLC

     2.12 Asset Purchase Agreement, dated as of October 29, 2002, by and between
          Pittston Coal Company and Alpha Coal Sales Co., LLC ("APA No. 4")

     2.13 Amendment to APA No. 4, dated as of December 13, 2002, by and between
          Pittston Coal Company and Alpha Coal Sales Co., LLC

     2.14 Indemnification and Guaranty Agreement, dated as of December 13, 2002,
          by and among Pittston Coal Company, The Pittston Company, Alpha
          Natural Resources, LLC and Alpha Coal Sales Co., LLC

     2.15 Asset Purchase Agreement, dated as of October 29, 2002, by and between
          Pittston Coal Company and Alpha Terminal Company, LLC ("APA No. 5")

     2.16 Amendment to APA No. 5, dated as of December 13, 2002, by and between
          Pittston Coal Company and Alpha Terminal Company, LLC

     2.17 Indemnification and Guaranty Agreement, dated as of December 13, 2002,
          by and among Pittston Coal Company, The Pittston Company, Alpha
          Natural Resources, LLC and Alpha Terminal Company, LLC

     2.18 Asset Purchase Agreement, dated as of October 29, 2002, by and between
          Pittston Coal Company and Maxxim Rebuild Co., LLC ("APA No. 6")

     2.19 Amendment to APA No. 6, dated as of December 13, 2002, by and between
          Pittston Coal Company and Maxxim Rebuild Co., LLC

     2.20 Indemnification and Guaranty Agreement, dated as of December 13, 2002,
          by and among Pittston Coal Company, The Pittston Company, Alpha
          Natural Resources, LLC and Maxxim Rebuild Co., LLC

     2.21 Cooperation Agreement, dated as of December 13, 2002, by and between
          Pittston Coal Company and Maxxim Rebuild Co., LLC

                                                                     Exhibit 2.1

                            ASSET PURCHASE AGREEMENT

                                 BY AND BETWEEN

                              PITTSTON COAL COMPANY

                                       AND

                       DICKENSON-RUSSELL COAL COMPANY, LLC

                                October 29, 2002

                                TABLE OF CONTENTS
                                                                                                              Page
                                                                                                             ----
     ARTICLE I DEFINITIONS
                                                                                                         
     1.1. 273 Threshold.........................................................................................1
     1.2. Administrative Services Agreement.....................................................................2
     1.3. Affiliate.............................................................................................2
     1.4. Agreement.............................................................................................2
     1.5. Asset Sale Companies..................................................................................2
     1.6. Asset Sale Non-Signatory Company......................................................................2
     1.7. Asset Sale Signatory Company..........................................................................3
     1.8. Assignment and Assumption Agreements..................................................................3
     1.9. Assumed Liabilities...................................................................................3
     1.10. Bills of Sale........................................................................................3
     1.11. Books and Records....................................................................................3
     1.12. Business.............................................................................................4
     1.13. Buyer................................................................................................4
     1.14. Buyer's Affiliates, Successors, Assigns, Lessees or Contractors......................................4
     1.15. Buyer Closing Certificate............................................................................4
     1.16. Buyer's Ultimate Parent..............................................................................4
     1.17. CERCLA...............................................................................................4
     1.18. CERCLIS..............................................................................................4
     1.19. Classified Employee..................................................................................5
     1.20. Classified Employee Retiree Medical Plans............................................................5
     1.21. Classified Employment................................................................................5
     1.22. Closing..............................................................................................5
     1.23. Closing Date.........................................................................................5
     1.24. Coal Act.............................................................................................6
     1.25. Coal Inventory.......................................................................................6
     1.26. COBRA................................................................................................6
     1.27. Code.................................................................................................6
     1.28. Collective Bargaining Agreements.....................................................................6
     1.29. Contaminated.........................................................................................8
     1.30. Contracts............................................................................................8
     1.31. Controlled Group.....................................................................................8
     1.32. Conveyance Deeds.....................................................................................8
     1.33. Cooperation Agreement................................................................................8
     1.34. CPA  Arbitrator......................................................................................8
     1.35. D-R Service Agreement................................................................................9
     1.36. Dispute..............................................................................................9
     1.37. Employee.............................................................................................9
     1.38. Employee Benefit Plans...............................................................................9
     1.39. Environment..........................................................................................9
     1.40. Environmental Laws...................................................................................9
     1.41. Environmental Matter................................................................................10

                                                                                                        
     1.42. Environmental or Response Action....................................................................10
     1.43. EPA.................................................................................................11
     1.44. Equipment...........................................................................................11
     1.45. ERISA...............................................................................................11
     1.46. ERISA Affiliates....................................................................................11
     1.47. Fiduciary...........................................................................................12
     1.48. Governmental Authority..............................................................................12
     1.49. Hazardous Substances................................................................................12
     1.50. Health and Safety Requirements......................................................................12
     1.51. HIPAA...............................................................................................13
     1.52. Income Tax or Income Taxes..........................................................................13
     1.53. Indemnification and Guaranty Agreement..............................................................13
     1.54. Independent Surveyor................................................................................13
     1.55. Intellectual Property...............................................................................13
     1.56. IRS.................................................................................................14
     1.57. Knowledge of PCC....................................................................................14
     1.58. Law.................................................................................................14
     1.59. Lien................................................................................................14
     1.60. Liability...........................................................................................14
     1.61. Material Adverse Effect.............................................................................14
     1.62. Medical Plans.......................................................................................15
     1.63. Mining Activities...................................................................................15
     1.64. Mining Data.........................................................................................15
     1.65. Mining Environmental Liabilities....................................................................15
     1.66. MSHA................................................................................................15
     1.67. Multiemployer Plan..................................................................................16
     1.68. Non-Classified Employee.............................................................................16
     1.69. Non-Classified Employee Retiree Medical Plan........................................................16
     1.70. Operator............................................................................................16
     1.71. Ordinary Course of Business.........................................................................16
     1.72. OSM.................................................................................................16
     1.73. Parts, Fuel and Supplies Inventory..................................................................16
     1.74. PBGC................................................................................................16
     1.75. PCC.................................................................................................17
     1.76. PCC Bonds...........................................................................................17
     1.77. PCC Closing Certificate.............................................................................17
     1.78. PCC Group...........................................................................................17
     1.79. PCC Parent..........................................................................................17
     1.80. Pension Plans.......................................................................................17
     1.81. Permits.............................................................................................17
     1.82. Permitted Liens.....................................................................................17
     1.83. Person..............................................................................................18

                                                                                                        
     1.84. Post-Closing Period.................................................................................18
     1.85. Pre-Closing Period..................................................................................18
     1.86. Promissory Note.....................................................................................18
     1.87. Purchase Price......................................................................................18
     1.88. Purchased Assets....................................................................................18
     1.89. Qualified Plans.....................................................................................19
     1.90. RCRA................................................................................................19
     1.91. Real Property.......................................................................................19
     1.92. Reclamation Laws....................................................................................19
     1.93. Related Persons.....................................................................................19
     1.94. Release.............................................................................................20
     1.95. Retained Liabilities................................................................................20
     1.96. Security Agreement..................................................................................28
     1.97. SMCRA...............................................................................................28
     1.98. Straddle Period.....................................................................................28
     1.99. Tax or Taxes........................................................................................28
     1.100. Tax Return.........................................................................................29
     1.101. UMWA...............................................................................................29
     1.102. UMWA Pension Plans.................................................................................29
     1.103. VDEQ...............................................................................................29
     1.104. VDMME..............................................................................................29
     1.105. WARN Act...........................................................................................29
     1.106. Welfare Plans......................................................................................29
     1.107. Workers' Compensation Acts.........................................................................30

     ARTICLE II  PURCHASE AND SALE OF ASSETS...................................................................30

     2.1. Transfer of Assets...................................................................................30
     2.2. Bills of Sale, Assignment and Assumption Agreements, Conveyance Deeds and Other Documents............30
     2.3. Assumption of Liabilities............................................................................31
     2.4. Proration of Liabilities.............................................................................31
     2.5. Indemnification and Guaranty Agreement...............................................................31
     2.6. Cooperation Agreement................................................................................31
     2.7. Administrative Services Agreement....................................................................31
     2.8. D-R Service Agreement................................................................................32
     2.9. Security Agreement...................................................................................32
     2.10. Additional Documents................................................................................32
     2.11. Coal Inventory Adjustment...........................................................................32
     2.12. Allocation of Purchase Price and Assumed Liabilities................................................33

     ARTICLE III  REPRESENTATIONS AND WARRANTIES OF PCC........................................................35

     3.1. Incorporation........................................................................................35
     3.2. Execution, Delivery and Performance..................................................................35

                                                                                                        
     3.3. Authorization........................................................................................36
     3.4. Absence of Changes...................................................................................37
     3.5. Real Property........................................................................................40
     3.6. Purchased Assets.....................................................................................42
     3.7. Intellectual Property................................................................................43
     3.8. Permits and Environmental Compliance.................................................................43
     3.9. Reclamation Bonds....................................................................................47
     3.10. Contracts...........................................................................................48
     3.11. Litigation; Claims..................................................................................48
     3.12. Employee Benefits...................................................................................49
     3.13. Employment Matters..................................................................................54
     3.14. No Broker...........................................................................................55
     3.15. Health and Safety Requirements......................................................................55
     3.16. Restrictions on Business Activities.................................................................55
     3.17. Powers of Attorney..................................................................................55
     3.18. Transactions With Affiliates........................................................................56
     3.19. Absence of Certain Payments.........................................................................56
     3.20. Disclosure..........................................................................................56

     ARTICLE IV  REPRESENTATIONS AND WARRANTIES OF BUYER.......................................................57

     4.1.   Organization.......................................................................................57
     4.2.   Execution, Delivery and Performance................................................................57
     4.3.   Authorization......................................................................................57
     4.4.   No Broker..........................................................................................58
     4.5.   Reclamation and Environmental Compliance...........................................................58
     4.6.   Financing..........................................................................................58
     4.7.   Disclosure.........................................................................................59

     ARTICLE V  CERTAIN COVENANTS..............................................................................59

     5.1. Operation in Ordinary Course.........................................................................59
     5.2. Compliance with Law..................................................................................60
     5.3. Cooperation..........................................................................................60
     5.4. Notices and Consents.................................................................................60
     5.5. Publicity............................................................................................61
     5.6. Permits; Replacement Bonds; Insurance and Guarantees; Other Filings..................................62
     5.7. Exclusivity..........................................................................................64
     5.8. Access...............................................................................................64
     5.9. Notice of Developments...............................................................................65
     5.10. Benefits Provided by PCC............................................................................65
     5.11. Coal Inventory......................................................................................65
     5.12. Further Assurances..................................................................................66

     ARTICLE VI  CONDITIONS PRECEDENT TO CLOSING...............................................................66

     6.1.   Conditions Precedent to Each Party's Obligations...................................................66
     6.2.   Conditions Precedent to Obligations of Buyer.......................................................67
     6.3.   Conditions Precedent to Obligations of PCC.........................................................69

     ARTICLE VII  CERTAIN TAX MATTERS..........................................................................71

     7.1.   Property Taxes.....................................................................................71
     7.2.   Sales and Use Taxes................................................................................72
     7.3.   Transfer Taxes.....................................................................................72
     7.4.   Access for Tax Returns.............................................................................73

     ARTICLE VIII  COVENANTS REGARDING EMPLOYEES...............................................................73

     8.1. Employees............................................................................................73
     8.2. Collective Bargaining Obligations....................................................................73

     ARTICLE IX TERMINATION....................................................................................74

     9.1. Termination..........................................................................................74
     9.2. Effect of Termination................................................................................75

     ARTICLE X  MISCELLANEOUS..................................................................................76

     10.1. Entire Agreement....................................................................................76
     10.2. Amendment...........................................................................................76
     10.3. Extension; Waiver...................................................................................76
     10.4. Expenses............................................................................................77
     10.5. Bulk Sales Waiver...................................................................................77
     10.6. Governing Law.......................................................................................77
     10.7. Assignment..........................................................................................77
     10.8. Notices.............................................................................................77
     10.9. Counterparts; Headings..............................................................................79
     10.10. Interpretation; Construction.......................................................................79
     10.11. Severability.......................................................................................79
     10.12. No Reliance........................................................................................79
     10.13. Retention of and Access to  Records................................................................80
     10.14. Arbitration........................................................................................80

                                    EXHIBITS
                   
Exhibit A             Outline of Administrative Services Agreement
Exhibit B             Assignment and Assumption Agreements
Exhibit C             Bills of Sale
Exhibit D             Buyer Closing Certificate
Exhibit E             Conveyance Deeds
Exhibit F             Cooperation Agreement
Exhibit G             D-R Service Agreement
Exhibit H             Indemnification and Guaranty Agreement
Exhibit I             PCC Closing Certificate
Exhibit J             Opinion of Counsel to PCC
Exhibit K             Opinion of Counsel to Buyer

                                   SCHEDULES
                       
Schedule 1.5               Asset Sale Companies
Schedule 1.9               Assumed Liabilities
Schedule 1.25              Coal Inventory Locations
Schedule 1.30              Contracts of Asset Sale Companies
Schedule 1.44(a)           Equipment Owned by Asset Sale Companies
Schedule 1.44(b)           Equipment Leased by Asset Sale Companies
Schedule 1.55(a)           Intellectual Property Owned by the Asset Sale Companies
Schedule 1.55(b)           Intellectual Property Leased by the Asset Sale Companies
Schedule 1.57              Knowledge of PCC
Schedule 1.65              Mining Environmental Liabilities
Schedule 1.73              Parts, Fuel and Supplies Inventory
Schedule 1.81              Permits
Schedule 1.82              Permitted Liens
Schedule 1.91              Real Property of the Asset Sale Companies
Schedule 1.95(a)           Retained Liabilities
Schedule 1.95(k)(1)        Classified Employees with 20 Years of Credited Service or 10 Years of Credited Service at Age 55
Schedule 1.95(k)(2)        Purchased Assets for Certain Classified Employees
Schedule 1.95(k)(3)        Classified Employees who may be Recalled or Hired between Closing Date and December 31, 2003
Schedule 1.95(y)           Excluded Contracts
Schedule 2.11(b)           Independent Survey of the Coal Inventory-Principles and Format
Schedule 3.1               Foreign States
Schedule 3.2               Conflicts
Schedule 3.4               Absence of Changes
Schedule 3.5(a)            Real Property Matters
Schedule 3.5(b)            Real Property - Lease Compliance
Schedule 3.5(d)            Real Property - Third Party Mining Rights
Schedule 3.6(c)            Purchased Assets Exceptions
Schedule 3.7               Intellectual Property Exceptions
Schedule 3.8               Permits and Environmental Compliance
Schedule 3.9               PCC Bonds
Schedule 3.10(b)           Contract Exceptions
Schedule 3.10(c)           Consents
Schedule 3.11              Litigation; Claims
Schedule 3.12(a)           Employee Benefit Plans
Schedule 3.12(d)           Plan Administration
Schedule 3.12(f)           Severance Entitlements
Schedule 3.13(a)           Labor Unions
Schedule 3.13(b)           Panel of Employees
Schedule 3.17              Powers of Attorney
Schedule 3.18              Transactions with Affiliates
Schedule 5.4(a)            PCC Consents
Schedule 5.4(b)            Buyer Consents
Schedule 5.6               PCC Guaranties
Schedule 6.1(e)(i)         PCC Material Consents
Schedule 6.1(e)(ii)        Buyer Material Consents
Schedule 8.1               Asset Sale Companies with pre-Closing termination Employees

                            ASSET PURCHASE AGREEMENT

     THIS ASSET PURCHASE AGREEMENT is made as of the 29th day of October, 2002,
by and between PITTSTON COAL COMPANY, a Delaware corporation ("PCC"), and
DICKENSON-RUSSELL COAL COMPANY, LLC, a Delaware limited liability company
("Buyer").
                                    RECITALS

     WHEREAS, PCC owns, directly or indirectly, all of the outstanding capital
stock of the corporations listed on Schedule 1.5 (the "Asset Sale Companies");
     WHEREAS, PCC desires to cause to be sold and assigned, and Buyer desires to
purchase and assume, certain of the assets and certain of the Liabilities (as
hereinafter defined) of the Asset Sale Companies;
     WHEREAS, PCC desires to cause the Asset Sale Companies to retain certain
assets and certain Liabilities;
     NOW, THEREFORE, in consideration of the mutual covenants, conditions and
agreements set forth herein and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, PCC and Buyer agree
that:

                                   ARTICLE I
                                   DEFINITIONS

     When used in this Agreement, the following terms shall have the meanings
specified:

     1.1. 273 Threshold.

     "273 Threshold" shall have the meaning given to it in Section 1.95(k)
hereof.

                                       1

     1.2. Administrative Services Agreement.

     "Administrative Services Agreement" shall mean the agreement by and between
PCC and Buyer, an outline of which is attached hereto as Exhibit A.

     1.3. Affiliate.

     "Affiliate" shall mean, with respect to a specified Person, another Person
that directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the Person specified. "Control"
shall mean the possession, directly or indirectly, of the power to direct or
cause the direction of the management or policies of a Person, whether through
the ownership of voting securities, by contract or otherwise. For purposes of
this Agreement, none of Dominion Terminal Associates or any of its partners,
other than Pittston Coal Terminal Corporation, shall be deemed an Affiliate of
PCC or any of its Affiliates.

     1.4. Agreement.

     "Agreement" shall mean this Asset Purchase Agreement, together with the
Exhibits and Schedules attached hereto, which are incorporated into this Asset
Purchase Agreement by this reference, as the same may be amended from time to
time in accordance with the terms hereof.

     1.5. Asset Sale Companies.

     "Asset Sale Companies" shall have the meaning given to it in the Recitals
to this Agreement. The term "Asset Sale Company" shall mean one of the Asset
Sale Companies.

     1.6. Asset Sale Non-Signatory Company.

     "Asset Sale Non-Signatory Company" shall mean the Asset Sale Company
designated as "Asset Sale Non-Signatory Company" on Schedule 1.5.

                                       2

     1.7. Asset Sale Signatory Company.

     "Asset Sale Signatory Company" shall mean the Asset Sale Company designated
as "Asset Sale Signatory Company" on Schedule 1.5.

     1.8. Assignment and Assumption Agreements.

     "Assignment and Assumption Agreements" shall mean the assignment and
assumption agreements substantially in the form of Exhibit B attached hereto.

     1.9. Assumed Liabilities.

     "Assumed Liabilities" shall mean all Liabilities of the Asset Sale
Companies listed on Schedule 1.9.

     1.10. Bills of Sale.

     "Bills of Sale" shall mean the bills of sale substantially in the form of
Exhibit C attached hereto.

     1.11. Books and Records.

     "Books and Records" shall mean the original or true and complete copies of
all of the books and records of the Asset Sale Companies pertaining to the
Purchased Assets, including but not limited to, customer lists, employee records
for those Employees employed by Buyer on or immediately following the Closing
Date, purchase orders and invoices, sales orders and sales order log books,
credit and collection records, plats, drawings and specifications, environmental
and mining reports and studies, correspondence and miscellaneous records with
respect to customers and supply sources, lessors and lessees, maps, core logs,
engineering data, equipment maintenance records and all other general
correspondence, records, books and files owned by any Asset Sale Company, but
excluding any and all Tax Returns, books and records relating to the Retained
Liabilities and corporate records of the Asset Sale Companies.

                                       3

     1.12. Business.

     "Business" shall mean the coal mining and sale business conducted by the
Asset Sale Companies using the Purchased Assets.

     1.13. Buyer.

     "Buyer" shall have the meaning given to it in the preamble of this
Agreement.

     1.14. Buyer's Affiliates, Successors, Assigns, Lessees or Contractors.

     "Buyer's Affiliates, Successors, Assigns, Lessees or Contractors" shall
mean Buyer's Affiliates, Buyer's contractual successors and assigns, and lessees
and contractors who, as part of a contractual arrangement with Buyer or one of
its Affiliates, offer employment to the current or former Employees of an Asset
Sale Company.

     1.15. Buyer Closing Certificate.

     "Buyer Closing Certificate" shall mean the certificate of Buyer
substantially in the form of Exhibit D attached hereto.

     1.16. Buyer's Ultimate Parent.

     "Buyer's Ultimate Parent" shall mean Alpha Natural Resources, LLC, a
Delaware limited liability company.

     1.17. CERCLA.

     "CERCLA" shall have the meaning set forth in Section 1.40 hereof.

     1.18. CERCLIS.

     "CERCLIS" shall have the meaning set forth in Section 3.8 hereof.

                                       4

     1.19. Classified Employee.

     "Classified Employee" shall mean any Employee whose employment is governed
by any of the Collective Bargaining Agreements. The term "current and former
Classified Employees" shall mean any Persons who fall within the term Classified
Employee at any time prior to the Closing Date.

     1.20. Classified Employee Retiree Medical Plans.

     "Classified Employee Retiree Medical Plans" shall mean the Pittston Coal
Group Companies Managed Care Employee Benefit Plan for UMWA Represented
Employees dated April 1, 1999 and the Pittston Coal Group Companies Employee
Benefit Plan for UMWA Represented Employees dated June 21, 1994.

     1.21. Classified Employment.

     "Classified Employment" shall mean employment, the terms of which are
governed by a collective bargaining agreement between an employer and the UMWA,
including any of the Collective Bargaining Agreements.

     1.22. Closing.

     "Closing" shall mean the closing of the transactions contemplated by this
Agreement beginning at 10:00 a.m., local time, on the Closing Date, at the
offices of Hunton & Williams, Riverfront Plaza, East Tower, 951 East Byrd
Street, Richmond, Virginia 23219.

     1.23. Closing Date.

     "Closing Date" shall mean November 30, 2002 or such other date as the
parties may mutually agree in writing.

                                       5

     1.24. Coal Act.

     "Coal Act" shall mean the Coal Industry Retiree Health Benefit Act of 1992
as amended through the Closing Date (codified at Subtitle J of the Code).

     1.25. Coal Inventory.

     "Coal Inventory" shall mean the coal stockpile inventory and loaded
shipments in transit to a pier or at a pier owned by the Asset Sale Companies at
the locations listed on Schedule 1.25.

     1.26. COBRA.

     "COBRA" shall mean the Consolidated Omnibus Budget Reconciliation Act of
1986, as amended.

     1.27. Code.

     "Code" shall mean the Internal Revenue Code of 1986, as amended, and, where
appropriate, any predecessor or successor provisions of Law, and all regulations
thereunder.

     1.28. Collective Bargaining Agreements.

     "Collective Bargaining Agreements" shall mean, collectively, the Agreement
Between the United Mine Workers of America and the Pittston Coal Group Companies
dated January 1, 1999 and the Memorandum of Understanding Regarding New Virginia
Operations dated March 23, 2002, each of which includes (a) any and all employee
benefit plans or programs maintained thereby or incorporated therein; (b) that
certain Settlement Agreement, dated March 20, 1996, in the case UMWA 1974
Pension Trust, et al. v. The Pittston Company, et al., Civil Action No. 88-0969
(TFH)(U.S. District Court for the District of Columbia; (c) any precedential
grievance settlements, arbitration decisions and binding past practices or
customs; and (d) any and all memoranda of understanding, local or district

                                       6

agreements, correspondence and other documents incorporated by reference therein
or attached thereto, including, without limitation, the following:

     Memorandum of Understanding Concerning Participation in the United Mine
Workers of America 1974 Pension Plan dated January 1, 1999;
     Memorandum of Understanding Regarding McClure River Preparation Plan dated
October 2, 1996;
     Agreement Regarding Clinchfield Electrical Crew dated April 5, 1999;
     Undated Agreement between Clinchfield Coal Company and Members of Local
7950 (Construction Crew)(regarding pay in lieu of portal);
     Clinchfield Agreement Regarding Forestry Department dated March 23, 2000;
     Agreement Between Local Union 7950 and Clinchfield Coal Company dated March
23, 2000 (regarding waiver of cumulative 60 day limit as temporary supervisor);
     Agreement Regarding Clinchfield Construction Crew dated March 29, 2000;
     Agreement dated April 3, 1996 (regarding work performed by the Clinchfield
Central Shop on behalf of non signatory operations of the company);
     Agreement Regarding Clinchfield Central Shop dated January 26-27, 1999;
     Agreement dated September 10, 1996 (regarding work performed by the
Clinchfield Electrical Line Crew and the Clinchfield Truck Shop on behalf of non
signatory operations of the company);
     Agreement dated February 5, 1993 (regarding the staffing of the seniority
units which encompass the operation of Highwall Continuous Mining Machines);

     Three letters dated March 23, 2002 between James Spurlock and Daryl
Dewberry; and

                                       7

     Seven letters dated January 1, 1999 between James Spurlock and Bruce
Bratten.
     "Collective Bargaining Agreements" shall not include the PCO/UMWA
Agreements dated January 1, 1999.

     1.29. Contaminated.

     "Contaminated" shall mean the presence of one or more Hazardous Substances
in such quantity or concentration as to: (i) violate any Environmental Law; (ii)
require disclosure to any Governmental Authority; (iii) require remediation or
removal; (iv) interfere with or prevent the use of the Real Property or any of
the Purchased Assets as customarily intended; or (v) create any contribution
Liability to fund the clean up of the Real Property.

     1.30. Contracts.

     "Contracts" shall mean the written contracts, agreements, personal and real
property leases, relationships and commitments, of the Asset Sale Companies
listed on Schedule 1.30.

     1.31. Controlled Group.

     "Controlled Group" shall have the meaning set forth in Codess.1563.

     1.32. Conveyance Deeds.

     "Conveyance Deeds" shall mean the deeds substantially in the form of
Exhibit E attached hereto.

     1.33. Cooperation Agreement.

     "Cooperation Agreement" shall mean the agreement by and among the PCC
Parent, PCC and Buyer substantially in the form of Exhibit F attached hereto.

     1.34. CPA Arbitrator.

     "CPA Arbitrator" shall have the meaning set forth in Section 2.12 hereof.

                                       8

     1.35. D-R Service Agreement.

     "D-R Service Agreement" shall mean the agreement by and between Buyer and
PCC, substantially in the form of Exhibit G attached hereto.

     1.36. Dispute.

     "Dispute" shall have the meaning set forth in Section 10.14 hereof.

     1.37. Employee.

     "Employee" shall mean any Person (i) employed by and rendering personal
services for an Asset Sale Company, (ii) receiving short-term or long-term
disability benefits from an Asset Sale Company under an Employee Benefit Plan or
(iii) laid-off or on inactive status from an Asset Sale Company. The term
"current and former Employees" shall mean any Persons who fall within the term
Employee at any time prior to the Closing Date.

     1.38. Employee Benefit Plans.

     "Employee Benefit Plans" shall have the meaning set forth in Section 3.12
hereof.

     1.39. Environment.

     "Environment" shall mean surface or ground water, water supply, soil or the
ambient air.

     1.40. Environmental Laws.

     "Environmental Laws" shall mean collectively, all federal, foreign, state,
and local Laws in effect as of the Closing Date that relate to (a) the
prevention, abatement or elimination of pollution, or the protection of the
environment, or of natural resources, including, without limitation, Laws
applicable to coal mining operations or related activities, (b) the generation,
handling, treatment, storage, disposal or transportation of waste materials, (c)
the regulation of or exposure to Hazardous Substances, including, without
limitation, the Comprehensive Environmental Response Compensation and Liability

                                       9

Act, 42 U.S.C.ss.ss.9601 et. seq. ("CERCLA"), the Solid Waste Disposal Act, as
amended by the Resource Conservation and Recovery Act, as amended, 42
U.S.C.ss.ss.6901 et. seq. ("RCRA"), the Clean Air Act, 42 U.S.C.ss.ss.7401 et.
seq., the Clean Water Act, 33 U.S.C. ss.ss.1251 et. seq., the Toxic Substances
Control Act, 15 U.S.C.ss.ss.2601 et. seq., the Emergency Planning and Community
Right to Know Act, 42 U.S.C.ss.ss.11001 et. seq., and any foreign, state,
county, municipal, or local statutes, Laws or ordinances similar or analogous to
the federal statutes listed in this sentence.

     1.41. Environmental Matter.

     "Environmental Matter" shall mean any assertion of a violation, claim or
directive by any Governmental Authority or any other Person for personal injury,
damage to property or the Environment, nuisance, contamination or other adverse
effects on the Environment, or for damages or restrictions resulting from or
related to (i) the operation of PCC's or its Affiliates' business or any
predecessor or the ownership, use or operation at or on any real property or
other assets owned, operated or leased by PCC or its Affiliates or any
predecessor; or (ii) the existence or the continuation of a Release of, or
exposure to, or the transportation, storage or treatment of any Hazardous
Substance into the Environment from or related to any real property or assets
currently or formerly owned, operated or leased by PCC or its Affiliates or any
activities on or operations thereof.

     1.42. Environmental or Response Action.

     "Environmental or Response Action" shall mean all actions required (i) to
clean up, remove, treat or in any other way address any Hazardous Substance or
other substance; (ii) to prevent the Release or threat of Release, or minimize
the further Release of any Hazardous Substance or other substance so it does not
migrate or endanger or threaten to endanger public health or welfare or the

                                       10

indoor or outdoor Environment; (iii) to perform pre-remedial studies and
investigations or post-remedial monitoring and care; (iv) to bring facilities on
any real property currently or formerly owned, operated or leased by PCC or its
Affiliates and the facilities located and operations conducted thereon into
compliance with all Environmental Laws and Reclamation Laws and all permits and
other authorizations, and the filing of all notifications and reports required
under any Environmental Laws and Reclamation Laws; or (v) for the purpose of
environmental protection of any real property currently or formerly owned,
operated or leased by PCC or its Affiliates.

     1.43. EPA.

     "EPA" shall have the meaning set forth in Section 3.8 hereof.

     1.44. Equipment.

     "Equipment" shall mean the tangible machinery, vehicles, equipment,
furniture, fixtures, furnishings, trailers, tools, parts and other personal
property owned or leased by the Asset Sale Companies listed on Schedules 1.44(a)
and 1.44(b), respectively.

     1.45. ERISA.

     "ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended.

     1.46. ERISA Affiliates.

     "ERISA Affiliates" shall mean any trade or business (whether or not
incorporated) that is part of the same Controlled Group as, or under common
control with, or part of an affiliated service group that includes, PCC and each
of the Asset Sale Companies within the meaning of Section 414(b), (c), (m) or
(o) of the Code.

                                       11

     1.47. Fiduciary.

     "Fiduciary" shall have the meaning set forth in ERISA ss.3(21)

     1.48. Governmental Authority.

     "Governmental Authority" shall mean any governmental, judicial,
legislative, executive, administrative or regulatory authority of the United
States, or of any foreign, state or local government or any subdivision, agency,
commission, office, authority or bureau thereof or any quasi-governmental entity
or authority of any nature.

     1.49. Hazardous Substances.

     "Hazardous Substances" shall mean any substance, chemical, waste, solid,
material, pollutant or contaminant that is defined or listed as hazardous or
toxic under any applicable Environmental Laws. Without limiting the generality
of the foregoing it shall also include any radioactive material, including any
naturally-occurring radioactive material, and any source, special or by-product
material as defined in 42 U.S.C. 2011, et seq., any amendments or authorizations
thereof, any asbestos-containing materials in any form or condition, any
polychlorinated biphenyls in any form or condition, radioactive waste, or
natural gas, natural gas liquids, liquified natural gas, condensate, or
derivatives or byproducts thereof or oil and petroleum products or by products
and constituents thereof.

     1.50. Health and Safety Requirements.

     "Health and Safety Requirements" shall mean all applicable federal, state,
local and foreign Laws concerning public health and safety and worker health and
safety each as in effect as of the Closing Date, other than Environmental Laws.

                                       12

     1.51. HIPAA.

     "HIPAA" shall mean the Health Insurance Portability and Accountability Act
of 1996, as amended, and all rules and regulations thereunder.

     1.52. Income Tax or Income Taxes.

     "Income Tax or "Income Taxes" shall mean any Tax based on or measured by
net income.

     1.53. Indemnification and Guaranty Agreement.

     "Indemnification and Guaranty Agreement" shall mean the agreement by and
among PCC Parent, PCC, Buyer and Buyer's Ultimate Parent substantially in the
form of Exhibit H attached hereto.

     1.54. Independent Surveyor.

     "Independent Surveyor" shall have the meaning set forth in Section 2.11(b)
hereof.

     1.55. Intellectual Property.

     "Intellectual Property" shall mean the trademarks, service marks, patents,
copyrights (including any registrations, applications, licenses or rights
relating to any of the foregoing), technology, logos, trade secrets,
confidential information related to the Purchased Assets, inventions, know-how,
designs, technical data, drawings, customer and supplier lists, pricing and cost
information, or computer programs and processes and all goodwill associated
therewith and rights thereunder, remedies against infringements thereof, and
rights to protection of interests therein under the laws of all jurisdictions
owned or licensed or leased by the Asset Sale Companies listed on Schedules
1.55(a) and 1.55(b), respectively.

                                       13

     1.56. IRS.

     "IRS" shall mean the United States Internal Revenue Service.

     1.57. Knowledge of PCC.

     "Knowledge of PCC" shall mean, for the individuals listed on Schedule 1.57,
any such individual's actual knowledge and what any such individual should have
known after reasonable inquiry within the scope of that individual's job
responsibilities.

     1.58. Law.

     "Law" and "Laws" shall mean any applicable United States or foreign,
federal, state, local or other law or governmental requirement of any kind, and
the rules, regulations and orders promulgated thereunder.

     1.59. Lien.

     "Lien" shall mean any lien, encumbrance, mortgage, charge, claim,
restriction, pledge, security interest or imposition of any kind.

     1.60. Liability.

     "Liability" shall mean any liability or obligation (whether known or
unknown, whether asserted or unasserted, whether absolute or contingent, whether
liquidated or unliquidated and whether due or to become due), including any
liability for Taxes. Liabilities shall mean one or more items of Liability.

     1.61. Material Adverse Effect.

     "Material Adverse Effect" shall mean any event, change or occurrence that
individually, or together with any other event, change or occurrence, has a
material adverse impact on the Business, taken as a whole, without regard to the
duration of such material adverse impact.

                                       14

     1.62. Medical Plans.

     "Medical Plans" shall mean any and all benefit plans that provide medical,
dental and other benefits to current or former Employees sponsored or maintained
by or on behalf of, or for the benefit of, PCC or any Asset Sale Company,
including the Comprehensive Medical Expense Benefits Plan of The Pittston
Company and Its Subsidiaries, the Pittston Coal Group Companies Managed Care
Employee Benefit Plan for UMWA Represented Employees dated April 1, 1999, the
Pittston Coal Group Companies Employee Benefit Plan for UMWA Represented
Employees dated June 21, 1994, and the Pittston Coal Group Companies Employee
Benefit Plan for UMWA Represented Employees dated February 21, 1990.

     1.63. Mining Activities.

     "Mining Activities" shall mean those activities of the Asset Sale Companies
that have taken place on or through the use of the Purchased Assets that involve
surface, underground and auger mining, processing or transporting of coal and
the handling of coal by-products.

     1.64. Mining Data.

     "Mining Data" shall have the meaning set forth in Section 3.5(d) hereof.

     1.65. Mining Environmental Liabilities.

     "Mining Environmental Liabilities" shall mean Liabilities that relate to or
arise from both of the following: (i) any of the Hazardous Substances set forth
on Schedule 1.65 and (ii) an Environmental Matter or Environmental and Response
Action associated with Mining Activities to the extent that such Mining
Activities conformed to industry standard practices at the time such Mining
Activities were conducted.

     1.66. MSHA.

     "MSHA" shall have the meaning set forth in Section 3.8 hereof.

                                       15

     1.67. Multiemployer Plan.

     "Multiemployer Plan" shall have the meaning set forth in Section 3.12
hereof.

     1.68. Non-Classified Employee.

     "Non-Classified Employee" shall mean an Employee, the terms of whose
employment are not or were not, at the time of the determination of the
Employee's status, governed by a collective bargaining agreement, including any
of the Collective Bargaining Agreements.

     1.69. Non-Classified Employee Retiree Medical Plan.

     "Non-Classified Employee Retiree Medical Plan" shall mean the Comprehensive
Medical Expense Benefits Plan of The Pittston Company and its Subsidiaries.

     1.70. Operator.

     "Operator" shall have the meaning set forth in Section 3.8 hereof.

     1.71. Ordinary Course of Business.

     "Ordinary Course of Business" means the ordinary course of business
consistent with past custom and practice (including with respect to quantity and
frequency).

     1.72. OSM.

     "OSM" shall have the meaning set forth in Section 3.8 hereof.

     1.73. Parts, Fuel and Supplies Inventory.

     "Parts, Fuel and Supplies Inventory" shall include the categories of items
listed on Schedule 1.73.

     1.74. PBGC.

     "PBGC" shall mean the Pension Benefits Guaranty Corporation.

                                       16

     1.75. PCC.

     "PCC" shall have the meaning given to it in the preamble to this Agreement.

     1.76. PCC Bonds.

     "PCC Bonds" shall have the meaning set forth in Section 3.9 hereof.

     1.77. PCC Closing Certificate.

     "PCC Closing Certificate" shall mean the certificate of PCC substantially
in the form of Exhibit I attached hereto.

     1.78. PCC Group.

     "PCC Group" shall have the meaning set forth in Section 1.95(j) hereof.

     1.79. PCC Parent.

     "PCC Parent" shall mean The Pittston Company, a Virginia corporation.

     1.80. Pension Plans.

     "Pension Plans" shall have the meaning set forth in Section 3.12 hereof.

     1.81. Permits.

     "Permits" shall mean the written permits, licenses, orders, certificates,
registrations, approvals and similar rights held by the Asset Sale Companies
listed on Schedule 1.81.

     1.82. Permitted Liens.

     "Permitted Liens" shall mean: (i) Liens for property Taxes not due and
payable; (ii) encumbrances that would be apparent in a physical inspection of
the surface of the Real Property; (iii) all instruments of record in the offices
of the Clerk of the Circuit Court for each county where the Real Property is
located; and (iv) those Liens affecting the Purchased Assets that are listed on
Schedule 1.82.

                                       17

     1.83. Person.

     "Person" shall mean any individual, corporation, general or limited
partnership, limited liability company, joint venture, estate, trust,
association, organization, labor union or other entity or Governmental
Authority.

     1.84. Post-Closing Period.

     "Post-Closing Period" shall mean any taxable period beginning after the
Closing Date.

     1.85. Pre-Closing Period.

     "Pre-Closing Period" shall mean any taxable period ending on or before the
Closing Date.

     1.86. Promissory Note.

     "Promissory Note" shall mean the secured promissory note made by Buyer in
favor of PCC determined in accordance with Section 2.11, to be dated as of the
Closing Date, in a form to be agreed upon by the parties hereto.

     1.87. Purchase Price.

     "Purchase Price" shall mean the cash amount of $8,170,000 (which amount
shall include $880,000 for the Parts, Fuel and Supplies Inventory, $3,180,000
for the Coal Inventory and $110,000 for two continuous miners), plus the
Promissory Note.

     1.88. Purchased Assets.

     "Purchased Assets" shall mean all right, title and interest in and to the
Coal Inventory, Parts, Fuel and Supplies Inventory, Equipment, Books and
Records, Real Property, Mining Data and Intellectual Property of the Asset Sale
Companies and the rights of the Asset Sale Companies with respect to the
Contracts and the Permits.

                                       18

     1.89. Qualified Plans.

     "Qualified Plans" shall have the meaning set forth in Section 3.12 hereof.

     1.90. RCRA.

     "RCRA" shall have the meaning set forth in Section 1.40 hereof.

     1.91. Real Property.

     "Real Property" shall mean the real property rights and interests owned,
leased or subleased by the Asset Sale Companies and any improvements, fixtures,
easements, rights of way, and other appurtenants thereto (such as appurtenant
rights in and to public streets) that are listed on Schedule 1.91.

     1.92. Reclamation Laws.

     "Reclamation Laws" shall mean all federal, state and local Laws, as now or
hereafter in effect, relating to coal mining reclamation activities or
Liabilities. For purposes of this definition, "coal mining" shall include, but
not be limited to, any activities defined under the Surface Mining Control and
Reclamation Act of 1977, as amended, as "surface coal mining operations."

     1.93. Related Persons.

     "Related Persons" shall mean related persons as that term is defined in
Section 9701(c)(2) of the Coal Act, except that it shall not include successors
in interest.

                                       19

     1.94. Release.

     "Release" shall mean any spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, dumping or disposing into the
Environment of Hazardous Substances.

     1.95. Retained Liabilities.

     "Retained Liabilities" shall mean all of the Liabilities of each Asset Sale
Company, other than the Assumed Liabilities, including, without limitation, the
following:

          (a)  the Liabilities listed on Schedule 1.95(a);

          (b)  all Liabilities arising under applicable Workers' Compensation
               Acts for or based upon the employment of (i) the current and
               former Employees of the Asset Sale Companies who are not hired by
               Buyer or one of Buyer's Affiliates, Successors, Assigns, Lessees
               or Contractors, and (ii) the current and former Employees of the
               Asset Sale Companies who are hired by Buyer or one of Buyer's
               Affiliates, Successors, Assigns, Lessees or Contractors, but only
               with respect to claims where the date of injury or the date of
               last injurious exposure occurred prior to the date such Employees
               began working for Buyer or one of Buyer's Affiliates, Successors,
               Assigns, Lessees or Contractors;

          (c)  all Liabilities arising under the federal black lung Laws for or
               based upon the employment of (i) the current and former Employees
               of the Asset Sale Companies who are not hired by Buyer or one of
               Buyer's Affiliates, Successors, Assigns, Lessees or Contractors
               and (ii) the current and former Employees of the Asset Sale
               Companies who are hired by Buyer or one of Buyer's Affiliates,
               Successors, Assigns, Lessees or Contractors, to the extent and in
               the amounts provided in the federal black lung Laws, but only
               until such time as Buyer or one of Buyer's Affiliates,
               Successors, Assigns, Lessees or Contractors becomes the
               responsible operator under the federal black lung Laws for such
               Employees;

                                       20

          (d)  unless such Liabilities are otherwise retained pursuant to
               Sections 1.95(j) or 1.95(k) hereof, all Liabilities for medical,
               dental, vision, sickness and accident, life, death, accidental
               death and dismemberment, and other benefits and expenses covered
               under the Medical Plans including related insurance costs or
               premiums for or based upon the employment of (i) the current and
               former Employees of the Asset Sale Companies who are not hired by
               Buyer or one of Buyer's Affiliates, Successors, Assigns, Lessees
               or Contractors, (ii) the current or former Employees of the Asset
               Sale Companies who are hired by Buyer or one of Buyer's
               Affiliates, Successors, Assigns, Lessees or Contractors, but only
               with respect to the period prior to the date such Employees began
               working for Buyer or one of Buyer's Affiliates, Successors,
               Assigns, Lessees or Contractors and (iii) in either case, all
               such Liabilities under COBRA, HIPAA and other Laws, including all
               Liabilities of a Fiduciary for breach of fiduciary duty or any
               other failure to act or comply in connection with the
               administration of such Medical Plans;

          (e)  unless such Liabilities are otherwise retained pursuant to
               Sections 1.95(j) or 1.95(k) hereof, all Liabilities arising under
               or based upon the Employee Benefit Plans sponsored or maintained
               by, on behalf of or for the benefit of such Asset Sale Company or
               its Employees or in which such Asset Sale Company participated
               (other than the UMWA Pension Plans and the Medical Plans),
               including all Liabilities arising from or related to the
               termination thereof or Liabilities of a Fiduciary for breach of
               fiduciary duty or any other failure to act or comply in
               connection with the administration or investment of the assets of
               any such Employee Benefit Plan;

                                       21

          (f)  all Liabilities for salaries, wages, bonuses, vacation days,
               personal days, contributions, if any, to the UMWA Pension Plans
               required under the Collective Bargaining Agreements and similar
               forms of leave or compensation for or based upon the employment
               of (i) the current and former Employees of the Asset Sale
               Companies who are not hired by Buyer or one of Buyer's
               Affiliates, Successors, Assigns, Lessees or Contractors, and (ii)
               the current and former Employees of the Asset Sale Companies who
               are hired by Buyer or one of Buyer's Affiliates, Successors,
               Assigns, Lessees or Contractors, that are accrued, due or earned
               up to the date such Employees began working for Buyer or one of
               Buyer's Affiliates, Successors, Assigns, Lessees or Contractors
               and for which such Employees are eligible;

          (g)  all Liabilities for terminated contract miner performance escrow
               amounts (including interest) accrued up to the Closing Date;

          (h)  all Liabilities for accounts payable for which goods have been
               shipped and delivered (whether or not invoiced) or services have
               been performed (whether or not invoiced) and related notes, trade
               payables and earned royalties, to the extent that an Asset Sale
               Company received a benefit before the Closing Date;

          (i)  all Liabilities for claims of any current or former Employees
               pursuant to the WARN Act arising out of acts or omissions of the
               Asset Sale Companies prior to and including the Closing Date;

          (j)  (1) all Liabilities, if any, of any Asset Sale Company and its
               Related Persons (collectively, the "PCC Group") under the Coal
               Act, and (2) all Liabilities, if any, of the PCC Group under any
               post-Closing amendments to the Coal Act for (i) beneficiaries
               eligible under the Coal Act who are assigned to a member of the
               PCC Group or for whom a member of the PCC Group is required to

                                       22

               provide or pay for medical benefits pursuant to Sections 9711 or
               9712 of the Coal Act or (ii) death benefit premiums or unassigned
               beneficiary premiums (as those terms are used in Sections 9704(c)
               and 9704(d) of the Coal Act) for beneficiaries eligible under the
               Coal Act, that are assessed against any member of the PCC Group;
               provided, for the avoidance of doubt, that the Liabilities
               retained pursuant to (1) and (2) above shall not be affected by
               Buyer or any of its Affiliates being identified under the Coal
               Act or any post-Closing amendments thereto as a successor,
               successor in interest or "Related person" under the Coal Act or
               any post-Closing amendments thereto to any member of the PCC
               Group solely as a result of Buyer's purchase of the Purchased
               Assets;

          (k)  notwithstanding anything in Article VIII to the contrary, all
               Liabilities for retiree medical benefits provided through any
               Classified Employee Retiree Medical Plan maintained pursuant to
               any of the Collective Bargaining Agreements in which such Asset
               Sale Signatory Company participates as of the Closing Date for
               (i) the current and former Classified Employees (and their
               eligible dependents and beneficiaries) of the Asset Sale
               Signatory Company who, as of the Closing Date, have retired and
               are receiving benefits from any such Classified Employee Retiree
               Medical Plan, (ii) the current and former Classified Employees
               (and their eligible dependents and beneficiaries) of the Asset
               Sale Signatory Company who, based on age, service, and/or
               disability, satisfy the eligibility criteria in any such
               Classified Employee Retiree Medical Plan to receive retiree
               health benefits and whose last signatory Classified Employment is
               with the Asset Sale Signatory Company, (iii) the current and
               former Classified Employees listed on Schedule 1.95(k)(1) (and
               their eligible dependents and beneficiaries) who (1) are recalled
               or hired after the Closing Date by Buyer or one of Buyer's

                                       23

               Affiliates, Successors, Assigns, Lessees or Contractors pursuant
               to or as a result of any of the Collective Bargaining Agreements
               to work at the Purchased Assets listed on Schedule 1.95(k)(2),
               (2) based on age, service, and/or disability, satisfy the
               eligibility criteria in any such Classified Employee Retiree
               Medical Plan to receive retiree health benefits and (3) whose
               last signatory Classified Employment is with Buyer or one of
               Buyer's Affiliates, Successors, Assigns, Lessees or Contractors;
               and (iv) the current and former Classified Employees listed on
               Schedule 1.95(k)(3) (and their eligible dependents and
               beneficiaries) who (1) are recalled or hired between the Closing
               Date and December 31, 2003 by Buyer or one of Buyer's Affiliates,
               Successors, Assigns, Lessees or Contractors pursuant to or as a
               result of any of the Collective Bargaining Agreements to work at
               the Purchased Assets listed on Schedule 1.95(k)(2), (2) based on
               age, service and/or disability effective as of December 31, 2003
               (but excluding any individuals who meet the disability criteria
               as a result of having incurred the disability after being
               employed by Buyer or one of Buyer's Affiliates, Successors,
               Assigns, Lessees or Contractors) satisfy the eligibility criteria
               in any Classified Employee Retiree Medical Plan to receive
               retiree health benefits and (3) whose last signatory Classified
               Employment is with Buyer, or one of Buyer's Affiliates,
               Successors, Assigns, Lessees or Contractors, provided, however,
               that PCC shall not retain Liabilities pursuant to (iii) and (iv)
               above with respect to (A) any Employee listed on Schedule
               1.95(k)(1) or Schedule 1.95(k)(3) who works for an employer other
               than Buyer or one of Buyer's Affiliates, Successors, Assigns,
               Lessees or Contractors, that is signatory to a collective
               bargaining agreement with the UMWA, between the time the Employee
               last worked for the Asset Sale Signatory Company and is recalled

                                       24

               or hired by Buyer or one of Buyer's Affiliates, Successors,
               Assigns, Lessees or Contractors or (B) any Employee who is listed
               on Schedule 1.95(k)(1) or Schedule 1.95(k)(3) (and their eligible
               dependents and beneficiaries) where, at Lessees or Contractors,
               the total number of Classified Employees working at the Purchased
               Assets listed on Schedule 1.95(k)(2) exceeds 273 (the "273
               Threshold"); and provided further that the Liabilities described
               in (iii) and (iv) above shall exist regardless of when such
               Classified Employees actually retire or seek to receive retiree
               health benefits, and shall continue for so long as Buyer or one
               of Buyer's Affiliates, Successors, Assigns, Lessees or
               Contractors would be obligated to provide those benefits but for
               the terms of this Agreement;

          (l)  all Liabilities, if any, of such Asset Sale Companies for retiree
               medical benefits with respect to Non-Classified Employees of such
               Asset Sale Company (and their eligible dependents and
               beneficiaries) who, on or prior to the Closing Date, satisfy the
               requirements for retiree medical benefits under any
               Non-Classified Employee Retiree Medical Plan in which such Asset
               Sale Company participates;

          (m)  all Liabilities relating to assets held in trust under any
               Qualified Plan sponsored or maintained by, on behalf of or for
               the benefit of such Asset Sale Company or its current or former
               Employees or in which such Asset Sale Company participates (other
               than the UMWA Pension Plans) arising or relating to the period
               prior to the Closing Date;

          (n)  all Liabilities with respect to withdrawal by the Asset Sale
               Companies or their Affiliates, if any, from the UMWA Pension
               Plans or any other Multiemployer Plan;

                                       25

          (o)  all inter-company indebtedness owed by any Asset Sale Company to
               the PCC Parent or any of the PCC Parent's Affiliates;

          (p)  all Liabilities arising out of or in connection with compliance
               prior to the Closing Date with Health and Safety Requirements
               pertaining to the Purchased Assets, and all Liabilities arising
               out of or in connection with compliance with all Laws relating to
               equal employment opportunity, employment, or labor relations
               concerning the employment of any Employee by the Asset Sale
               Companies, or relating to any other action taken or not taken by
               the Asset Sale Companies concerning (i) the current and former
               Employees of the Asset Sale Companies who are not hired by Buyer
               or one of Buyer's Affiliates, Successors, Assigns, Lessees or
               Contractors, and (ii) the current and former Employees of the
               Asset Sale Companies who are hired by Buyer or one of Buyer's
               Affiliates, Successors, Assigns, Lessees or Contractors, but only
               with respect to matters arising out of the employment of such
               Employees by the Asset Sale Companies;

          (q)  except as set forth on Schedule 1.9, all Liabilities for the
               claims, legal actions, suits, litigation, arbitrations,
               grievances, disputes or investigations listed on Schedules
               3.5(c), 3.8 and 3.11;

          (r)  all Liabilities of any of the Asset Sale Companies for unpaid
               Taxes with respect to any Tax year or portion thereof ending on
               or before the Closing Date or for any Tax year beginning before
               and ending after the Closing Date to the extent allocable to the
               portion of such period beginning before and ending on the Closing
               Date (to the extent of any inconsistencies with Article VII
               hereof, Article VII shall be controlling);

                                       26

          (s)  all amounts payable as the result of the consummation of the
               transactions contemplated by this Agreement that arise due to any
               change of control provision of any Contract other than those
               Contracts listed on Schedule 5.4(b);

          (t)  all Liabilities of any of the Asset Sale Companies for the unpaid
               Taxes of any Person (including PCC and its subsidiaries) under
               Reg. ss.1.1502-6 (or any similar provision of state, local, or
               foreign law), as a transferee or successor, by contract, or
               otherwise;

          (u)  all Liabilities for any Environmental Matter or Environmental or
               Response Action related to real property or any other asset
               owned, operated or leased by PCC or any of its Affiliates that is
               not a Purchased Asset (except to the extent otherwise provided in
               the D-R Service Agreement or any other agreement entered into
               contemporaneously with this Agreement pursuant to which
               reclamation and other services are to be performed on PCC's or
               its Affiliates' idle properties);

          (v)  all Liabilities for any Environmental Matter or Environmental or
               Response Action (other than Mining Environmental Liabilities) to
               the extent the underlying claim relates to or arises from any
               activity on or through the use of the Purchased Assets and is
               attributable to acts or omissions occurring at or prior to the
               Closing;

          (w)  all Liabilities of PCC that become a Liability of Buyer under any
               bulk transfer Law of any jurisdiction;

          (x)  all Liabilities under the Collective Bargaining Agreements that
               do not pertain to or arise out of any Asset Sale Signatory
               Company's ownership of the Purchased Assets;

                                       27

          (y)  all Liabilities under the contracts, agreements, personal and
               real property leases, relationships and commitments of the Asset
               Sale Companies listed on Schedule 1.95(y); and

          (z)  all Liabilities related to Equipment retained by PCC and the
               Asset Sale Companies after the Closing Date but included within
               the Equipment leases listed in Schedule 5.4(b).

     1.96. Security Agreement.

     "Security Agreement" shall mean the Security Agreement between Buyer and
PCC, to be dated as of the Closing Date, in a form to be agreed upon by the
parties hereto.

     1.97. SMCRA.

     "SMCRA" shall have the meaning set forth in Section 3.8 hereof.

     1.98. Straddle Period.

     "Straddle Period" shall mean any taxable period covering days before and
after the Closing Date.

     1.99. Tax or Taxes.

     "Tax" or "Taxes" mean any federal, state, local, or foreign income, gross
receipts, license, payroll, employment, excise, severance, stamp, occupation,
premium, windfall profits, environmental (including taxes under Code ss.59A),
custom duties, capital stock, franchise, profits, withholding, social security
(or similar), unemployment, disability, real property, personal property, sales,
use, transfer, registration, value added, alternative or add-on minimum,
estimated, reclamation fees or other tax of any kind whatsoever, including any
interest, penalty, or addition thereto, whether disputed or not, but shall not
include, for purposes of this Agreement only, Liabilities under the Coal Act, of
whatever nature and regardless of how denominated.

                                       28

     1.100. Tax Return.

     "Tax Return" shall mean any original or amended report, return,
declaration, claim for refund, statement, document, schedule, attachment or
other information supplied or required to be supplied to a Governmental
Authority with respect to Taxes, including any return of an affiliated, combined
or unitary group.

     1.101. UMWA.

     "UMWA" shall mean the International Union, United Mine Workers of America,
including its district and local unions.

     1.102. UMWA Pension Plans.

     "UMWA Pension Plans" shall mean the United Mine Workers of America 1950 and
1974 Pension Plans and Trusts.

     1.103. VDEQ.

     "VDEQ" shall have the meaning set forth in Section 3.8 hereof.

     1.104. VDMME.

     "VDMME" shall have the meaning set forth in Section 3.8 hereof.

     1.105. WARN Act.

     "WARN Act" shall mean the Worker Adjustment and Retraining Notification
Act, as amended.

     1.106. Welfare Plans.

     "Welfare Plans" shall have the meaning set forth in Section 3.12 hereof.

                                       29

     1.107. Workers' Compensation Acts.

     "Workers' Compensation Acts" shall mean Laws that provide for awards to
employees and their dependents for employment-related accidents and diseases.

                                   ARTICLE II
                           PURCHASE AND SALE OF ASSETS

2.1. Transfer of Assets.

     On the Closing Date, PCC (on behalf of the Asset Sale Companies) shall
cause to be sold, conveyed, transferred, assigned, and delivered to Buyer, and
Buyer shall acquire, the Purchased Assets. At the Closing, subject to the terms
and conditions of this Agreement, PCC agrees to: (i) cause title to the
Purchased Assets to be transferred and delivered to Buyer; and (ii) perform its
obligations under this Agreement to be performed at or before Closing. In full
payment for the Purchased Assets, Buyer shall: (i) assume the Assumed
Liabilities; (ii) pay to PCC (which shall receive such amounts on behalf of the
Asset Sale Companies) the Purchase Price by wire transfer of cash or other
immediately available funds and execute and deliver to PCC the Promissory Note;
and (iii) perform its obligations under this Agreement to be performed at or
before Closing. Buyer shall not assume or have any responsibility with respect
to any Liability of PCC Parent, PCC, the PCC Group or the Asset Sale Companies
that is not an Assumed Liability.

     2.2. Bills of Sale, Assignment and Assumption Agreements, Conveyance Deeds
and Other Documents.

     At the Closing, PCC shall cause each of the Asset Sale Companies to: (i)
execute and deliver to Buyer the Bills of Sale, the Assignment and Assumption
Agreements, the Conveyance Deeds and such other documents as may be necessary to
convey to Buyer the Purchased Assets; and (ii) perform its obligations under the
Agreement to be performed at or before the Closing.

                                       30

     2.3. Assumption of Liabilities.

     At the Closing, Buyer shall execute and deliver to PCC the Assignment and
Assumption Agreements and such other documents and instruments as may be
necessary for Buyer to assume all of the Assumed Liabilities. Buyer shall not
assume or have any responsibility, however, with respect to any Liability of PCC
Parent, PCC, the PCC Group or the Asset Sale Companies that is not an Assumed
Liability.

     2.4. Proration of Liabilities.

     PCC and Buyer shall cooperate with each other to provide for payments due
with respect to the Assumed Liabilities and the Retained Liabilities during the
payment period in which the Closing occurs with all such Liabilities prorated as
of the Closing Date, if applicable.

     2.5. Indemnification and Guaranty Agreement.

     At the Closing, PCC, PCC Parent, Buyer's Ultimate Parent and Buyer shall
execute and deliver the Indemnification and Guaranty Agreement.

     2.6. Cooperation Agreement.

     At the Closing, PCC and Buyer shall, and PCC shall cause PCC Parent to,
execute and deliver the Cooperation Agreement pursuant to which Buyer, PCC
Parent and PCC shall provide each other certain information and other assistance
in connection with the collection, administration and/or satisfaction of certain
of the Retained Liabilities.

     2.7. Administrative Services Agreement.

     At the Closing, PCC and Buyer shall execute and deliver the Administrative
Services Agreement pursuant to which PCC or one of its Affiliates will provide
certain services to Buyer and the Asset Sale Companies for a transition period.

                                       31

     2.8. D-R Service Agreement.

     At the Closing, PCC and Buyer shall execute and deliver the D-R Service
Agreement pursuant to which Buyer will cause one of its Affiliates to perform
reclamation and other services on idle properties.

     2.9. Security Agreement.

     At the Closing, in order to secure Buyer's obligations under the Promissory
Note, PCC and Buyer shall execute and deliver the Security Agreement.

     2.10. Additional Documents.

     At the Closing, PCC and Buyer shall, and PCC shall cause the Asset Sale
Companies to, execute and deliver all such other documents or instruments
necessary or appropriate to effect the transactions contemplated by this
Agreement, including the documents provided in Section 5.6 hereof and in this
Article II.

     2.11. Coal Inventory Adjustment.

          (a)  In accordance with the provisions of this Section 2.11, Buyer
               shall pay PCC the amount, if any, by which the value of the Coal
               Inventory (as calculated in accordance with Sections 2.11(b)) is
               finally determined to be greater than $3,180,000. Such payment
               shall constitute an adjustment to the Purchase Price and shall be
               paid by fixing the face amount of the Promissory Note within one
               business day after the completion of the procedures contemplated
               in Sections 2.11(b).

          (b)  No later than three days before the Closing Date, the parties
               will agree upon the density of the various stockpiles that
               constitute the Coal Inventory. No later than two business days
               prior to the Closing Date, PCC and Buyer shall cause PennTree
               Engineering (the "Independent Surveyor") to prepare and deliver
               to each of them a survey of all Coal Inventory of the Asset Sale

                                       32

               Companies as of the Closing, which survey shall be conducted in
               accordance with the principles set forth on and shall be in
               substantially the format attached hereto as part of Schedule
               2.11(b). PCC and Buyer shall, and shall cause their respective
               Affiliates to, cooperate with and make available any information
               reasonably requested by the Independent Surveyor in its
               preparation of its survey of the Coal Inventory. All
               determinations made by the Independent Surveyor in its survey of
               the Coal Inventory shall be final, binding and conclusive on the
               parties. PCC and Buyer shall each bear fifty percent of the fees
               and costs of the Independent Surveyor and any other third party
               incurred in connection with the calculation of the Coal Inventory
               pursuant to this Section 2.11(b).

     2.12. Allocation of Purchase Price and Assumed Liabilities.

     The Purchase Price and the Assumed Liabilities (to the extent they
constitute part of the amount realized for federal Income Tax purposes) shall be
allocated among the Purchased Assets in accordance with a schedule to be agreed
upon by Buyer and PCC after the Closing Date. Buyer shall prepare such
allocation schedule and deliver it to PCC upon a date to be agreed upon between
the parties, which date shall be no later than 60 days after the Closing Date.
PCC shall be deemed to agree with such allocation schedule unless, within ten
(10) days after the date PCC receives the allocation schedule from Buyer, PCC
notifies Buyer in writing of (i) each allocation with which it disagrees and
(ii) for each such allocation, the amount that PCC proposes to allocate. If PCC
provides such notice to Buyer, the parties shall proceed in good faith to
resolve mutually the disputed allocation amounts within fifteen (15) days after
the date on which PCC notifies Buyer of a disagreement with Buyer's proposed
allocation. If PCC and Buyer cannot resolve any such differences, the parties
agree to submit such differences to arbitration in Abingdon, Virginia, by the

                                       33

accounting firm of Deloitte & Touche, LLP or another accounting firm mutually
acceptable to both parties (the "CPA Arbitrator") to resolve such differences.
The CPA Arbitrator shall make such review and examination of the relevant facts
and documents as the CPA Arbitrator deems appropriate and shall permit each of
Buyer and PCC to make a written presentation of their respective positions.
Within forty-five (45) days after submission of such dispute by both parties,
the CPA Arbitrator shall resolve such dispute in writing and shall prepare and
deliver its decision, which shall (i) be based upon a determination of the fair
market value of the Purchased Assets, (ii) defer to valuations that have been
prepared in accordance with generally accepted valuation techniques absent
manifest error, (iii) be final and binding upon the parties without further
recourse or collateral attack and (iv) accept either Buyer's or PCC's position
in its entirety. The party whose position is not accepted by the CPA Arbitrator
shall pay all fees and costs of such CPA Arbitrator to arbitrate such dispute.
The allocation schedule shall include, at a minimum, information necessary to
complete Part II of IRS Form 8594. The allocation to the Purchased Assets is
intended to comply with the requirements of Section 1060 of the Code. The
parties shall cooperate to comply with all substantive and procedural
requirements of Section 1060, and except for any adjustment to the Purchase
Price hereunder, after the completion and agreement by the parties to the
allocation schedule, such allocation schedule shall be adjusted only if and to
the extent necessary to comply with such requirements of Section 1060. Buyer and
PCC agree that they will not take nor will they permit any Affiliate to take,
for Income Tax purposes, any position inconsistent with such allocation schedule
to the Purchased Assets; provided, however, that (i) Buyer's cost for the
Purchased Assets may differ from the total amount allocated hereunder to reflect
the inclusion in the total cost of items (for example, capitalized acquisition

                                       34

costs) not included in the total amount so allocated and (ii) the amount
realized by the Asset Sale Companies may differ from the total amount allocated
hereunder to reflect transaction costs that reduce the amount realized for
federal Income Tax purposes.

                                  ARTICLE III
                      REPRESENTATIONS AND WARRANTIES OF PCC

         PCC hereby represents and warrants to Buyer that the statements
contained in this Article III are correct and complete, except as set forth in
the Schedules delivered by PCC to Buyer in connection with this Agreement. The
Schedules are arranged in paragraphs corresponding to the lettered and numbered
paragraphs contained in this Article III.

3.1.     Incorporation.

     PCC and each of the Asset Sale Companies are corporations duly organized,
validly existing and in good standing under the Laws of the respective state or
commonwealth of each such company's incorporation. PCC and each of the Asset
Sale Companies that is not a corporation incorporated under the Laws of Virginia
are duly qualified or licensed to transact business as a foreign corporation in
Virginia and are in good standing under the laws of Virginia. Set forth on
Schedule 3.1 is the name of each state or other jurisdiction in which each such
company has either paid taxes or had an office in the three years prior to the
date of this Agreement.

     3.2. Execution, Delivery and Performance.

     The execution, delivery and performance by PCC of this Agreement and by PCC
and the applicable Asset Sale Company of each other agreement or instrument to
which it is a party executed in connection herewith or delivered pursuant hereto
and the consummation of the transactions contemplated herein and therein will
not, with or without the giving of notice or the passage of time, or both: (i)
conflict with, or result in a violation or breach of, or a default, right to

                                       35

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 PCC's or any Asset Sale Company's Articles of Incorporation or
Bylaws or of any material franchise, mortgage, deed of trust, Lien, lease,
license, instrument, agreement, consent, approval, waiver or understanding to
which PCC or any Asset Sale Company is a party or by which any Asset Sale
Company is bound, or any Law or any order, judgment, writ, injunction or decree
to which PCC or any Asset Sale Company is a party or by which PCC, any Asset
Sale Company or the Purchased Assets may be bound or affected; (ii) require the
approval, consent or authorization of, prior notice to, or filing or
registration with any Governmental Authority or, except as set forth on Schedule
1.81, 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 PCC or the Asset Sale Companies or that
otherwise relates to the Purchased Assets; or (iii) 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 PCC or any Asset Sale Company is subject.

     3.3. Authorization.

     PCC has full power and authority to enter into and deliver this Agreement
and to perform its obligations hereunder and each of PCC and the Asset Sale
Companies has full power and authority to enter into and deliver each other
agreement or instrument to which it is a party executed in connection herewith
and delivered pursuant hereto and to perform its obligations thereunder. PCC's
execution, delivery and performance of this Agreement and the execution,
delivery and performance of all other agreements and instruments by PCC and each
of the Asset Sale Companies in connection herewith and delivered pursuant hereto
and the transactions contemplated hereby have been duly authorized by all
requisite corporate action on the part of PCC and each of the Asset Sale
Companies. This Agreement and all other agreements or instruments executed by
PCC or any of the Asset Sale Companies in connection herewith and delivered by
PCC or any of the Asset Sale Companies pursuant hereto have been duly executed
and delivered by PCC or such Asset Sale Companies and this Agreement and all
other agreements and instruments executed by PCC or any of the Asset Sale

                                       36

Companies in connection herewith and delivered by PCC or any of the Asset Sale
Companies pursuant hereto constitute the legal, valid and binding obligation of
PCC or such Asset Sale Company, as the case may be, enforceable in accordance
with their respective terms (subject to any applicable bankruptcy, insolvency,
reorganization, moratorium or other similar Laws affecting generally the
enforcement of creditors' rights).

     3.4. Absence of Changes.

     Except as contemplated by this Agreement, since December 31, 2001, none of
the Asset Sale Companies has, with respect to the Purchased Assets:

          (a)  borrowed or agreed to borrow any funds or incurred, or become
               subject to, any Liability, or issued any note, bond or other debt
               security, or guaranteed any indebtedness for borrowed money or
               capitalized lease obligation, except Liabilities incurred in the
               Ordinary Course of Business, none of which would reasonably be
               expected to result in an impact greater than $100,000;

          (b)  paid any Liability other than current Liabilities in the Ordinary
               Course of Business;

                                       37

          (c)  sold, transferred or otherwise disposed of, or agreed to sell,
               transfer or otherwise dispose of any of the Equipment or Real
               Property, or, other than in the Ordinary Course of Business, any
               other Purchased Assets, or canceled or otherwise terminated, or
               agreed to cancel or otherwise terminate, other than in the
               Ordinary Course of Business, any Permits;

          (d)  except in the Ordinary Course of Business, entered into any
               agreement, contract, lease or license (or series of related
               agreements, contracts, leases and licenses) or made or permitted
               any material amendment to or termination, acceleration,
               modification or cancellation of any Contract or breached any
               provision of any Contract;

          (e)  merged or consolidated with any other Person;

          (f)  mortgaged, pledged or subjected to any Lien any of its assets or
               properties, other than Permitted Liens;

          (g)  made any capital expenditure (or series of related capital
               expenditures) either (x) involving more than $100,000 or (y)
               outside the Ordinary Course of Business;

          (h)  made any capital investment in, any loan to, or any acquisition
               of the securities or assets of, any other Person (or series of
               related capital investments, loans and acquisitions) either (x)
               involving $100,000 or (y) outside the Ordinary Course of
               Business;

          (i)  delayed or postponed the payment of accounts payable and other
               Liabilities outside the Ordinary Course of Business;

                                       38

          (j)  cancelled, compromised, waived or released any right or claim (or
               series of related rights and claims) either (x) involving more
               than $100,000 or (y) outside the Ordinary Course of Business;

          (k)  made any loan to, or entered into any other transaction with, any
               of the directors, officers and employees of such Asset Sale
               Company outside the Ordinary Course of Business;

          (l)  entered into any employment contract or collective bargaining
               agreement, written or oral, or modified the terms of any existing
               such contract;

          (m)  except in the Ordinary Course of Business adopted, amended,
               modified or terminated any bonus, profit-sharing, incentive,
               severance or other plan, contract or commitment for the benefit
               of any of the directors, officers and Employees of the Asset Sale
               Companies, or taken any such action with respect to any other
               Employee Benefit Plan;

          (n)  made any other change in employment terms for any of the
               directors, officers and Employees of the Asset Sale Companies
               outside the Ordinary Course of Business;

          (o)  suffered any damage, destruction or loss, whether or not covered
               by insurance, that has had or would reasonably be expected to
               have a Material Adverse Effect;

          (p)  implemented or adopted any change in its accounting methods or
               principles or the application thereof; or

          (q)  entered into any agreement, arrangement or understanding with
               respect to any of the foregoing.

                                       39

     3.5. Real Property.

          (a)  PCC has made available to Buyer all deeds, leases, bills of sale,
               documents of title, abstracts, surveys, plats and maps in the
               possession of the Asset Sale Companies or their Affiliates that
               relate to the Real Property. With respect to the Real Property:

               (i)  the Asset Sale Companies have marketable title to the owned
                    Real Property, taken as a whole, and the Real Property is
                    free and clear of any Lien (other than Permitted Liens);

               (ii) there are no pending or, to the Knowledge of PCC, threatened
                    condemnation proceedings, lawsuits, or administrative
                    actions relating to the Real Property;

               (iii) the legal description for the parcels contained in the deed
                    thereof describes such parcel fully and adequately, and the
                    buildings and improvements are located within the boundary
                    lines of the described parcels of land;

               (iv) none of the Asset Sale Companies have been notified that any
                    buildings or improvements located on the Real Property are
                    in violation of applicable zoning laws and ordinances; and

               (v)  there are no outstanding options or rights of first refusal
                    to purchase the parcel of Real Property, or any portion
                    thereof or interest therein.

          (b)  Schedule 1.91 identifies the coal leases, coal subleases and
               surface leases that comprise a portion of the Real Property. PCC
               has made available to Buyer all coal leases, coal subleases and
               surface leases listed on Schedule 1.91. With respect to each such
               lease and sublease:

                                       40

               (i)  the lease or sublease is legal, valid, binding, enforceable,
                    and in full force and effect;

               (ii) except for the consents set forth on Schedule 3.10(c) that
                    are required to be obtained and the notices given, the lease
                    or sublease will continue to be legal, valid, binding,
                    enforceable, and in full force and effect on identical terms
                    following the consummation of the transactions contemplated
                    hereby (including the assignments and assumptions referred
                    to above);

               (iii) no Asset Sale Company nor, to the Knowledge of PCC, any
                    other party to the lease or sublease is in breach or
                    default, and no event has occurred which, with notice or
                    lapse of time, would constitute a breach or default or
                    permit termination, modification, or acceleration
                    thereunder;

               (iv) no Asset Sale Company nor, to the Knowledge of PCC, any
                    other party to the lease or sublease has repudiated any
                    provision thereof; and

               (v)  none of the Asset Sale Companies has assigned, transferred,
                    conveyed or subjected to a Lien any interest in the
                    leasehold or subleasehold, other than those created pursuant
                    to the terms of that lease or sublease.

          (c)  There is not any third party adverse claim to any of the Real
               Property, other than Permitted Liens, and, to the Knowledge of
               PCC, no party is in wrongful possession of any parcel of the Real
               Property.

          (d)  PCC has made available to Buyer geological data, reserve data,
               mine maps, core hole logs and associated data, coal measurements,
               coal samples, lithologic data, coal reserve calculations or
               reports, washability analyses or reports, mine plans, mining

                                       41

               permit applications and supporting data, engineering studies and
               all other information, maps, reports and data in the possession
               of the Asset Sale Companies and relating to or affecting the Real
               Property, including the coal reserves, coal ownership, coal
               leases to the Asset Sale Companies, coal leases from the Asset
               Sale Companies to third parties, mining conditions, mines, and
               mining plans of the Asset Sale Companies as prepared and utilized
               by the Asset Sale Companies in their day to day Mining Activities
               (collectively, the "Mining Data"). NOTWITHSTANDING ANYTHING IN
               THIS AGREEMENT TO THE CONTRARY, BUYER ACCEPTS THE ASSET SALE
               COMPANIES' COAL RESERVES IN OR UNDER THE REAL PROPERTY, AS IS,
               WHERE IS, TOGETHER WITH THE MINING DATA, FREE OF ANY WARRANTY
               (EXPRESS OR IMPLIED) WITH REGARD TO THE MINEABILITY, WASHABILITY,
               RECOVERABILITY, VOLUME, OR QUANTITY OR QUALITY OF ANY COAL
               RESERVE. The coal reserves mined by the Asset Sale Companies
               (whether such reserves are owned or leased by the Asset Sale
               Companies) are not subject to any mining rights of any other
               Person.

     3.6. Purchased Assets.

          (a)  The Asset Sale Companies (i) own good and transferable title to
               all of the Purchased Assets, other than Real Property, free and
               clear of all Liens and restrictions on transfer, other than
               Permitted Liens or (ii) lease such Purchased Assets under a valid
               and enforceable lease (subject to any applicable bankruptcy,
               insolvency, reorganization, moratorium or other similar Laws
               affecting generally the enforcement of creditors' rights). No
               rights of the Asset Sale Companies under such leases have been
               assigned or otherwise transferred as security for any obligation
               of the Asset Sale Companies. The consummation of the transactions

                                       42

               contemplated by this Agreement will not create or constitute,
               either with or without notice or the passage of time a default or
               event of default under any such lease or require the consent of
               any other party to such lease in order to avoid a default or
               event of default.

          (b)  Except for the items set forth on Schedule 1.95(y), the Purchased
               Assets include all tangible and intangible assets owned by the
               Asset Sale Companies and used in the Business.

          (c)  The Equipment that is currently in use has been maintained in
               accordance with normal industry practice and is suitable for the
               purposes for which the Asset Sale Companies are presently using
               such Equipment.

          (d)  The value of the Parts, Fuel and Supplies Inventory as of the
               Closing Date shall be at least $880,000.

     3.7. Intellectual Property.

     No third party has asserted any interest in the Intellectual Property, nor
has any third party alleged that any Asset Sale Company has infringed on any
Intellectual Property of any third party. To the Knowledge of PCC, none of the
Asset Sale Companies interferes with, infringes upon, misappropriates, or
otherwise comes into conflict with, any Intellectual Property rights of third
parties as a result of the continued operation of the Business as presently
conducted.

     3.8. Permits and Environmental Compliance.

          (a)  Each Asset Sale Company is in material compliance with all
               Environmental Laws related to the Purchased Assets. Neither PCC
               nor any Asset Sale Company (such Persons being hereafter referred
               to in this Section 3.8 as "Operators") has been notified by any

                                       43

               Governmental Authority of any current, alleged or unresolved
               violation of any Environmental Laws applicable to Mining
               Activities, including any investigatory, remedial or corrective
               obligations, that would result in (i) closure, suspension or
               restriction of any mine or mining-related activity on the Real
               Property, (ii) revocation or suspension of any license or
               Permits, or (iii) exposure of Buyer to the imposition of any
               fines or other civil or criminal monetary penalty in excess of
               $5,000. The Permits include all material permits, licenses,
               franchises and other authorizations necessary to conduct the
               Mining Activities as currently conducted and the Asset Sale
               Companies are in material compliance with all such Permits. No
               such Permit is the subject of any proceeding by or in front of
               any Governmental Authority that might affect its validity and no
               such proceeding is pending or, to the Knowledge of PCC,
               threatened.

          (b)  PCC has made available to Buyer true and complete copies of (i)
               the Permits, (ii) all of the mining permits and other permits
               held by each Operator pertaining to the Purchased Assets,
               together with a description of the permitted property or
               facility, the amount of the bond for each such Permit and the
               surety for each such bond or manner in which each such bond has
               otherwise been posted, (iii) all other licenses, franchises,
               certificates, concessions and other governmental approvals and
               authorizations held by each Operator pertaining to the Purchased
               Assets, as amended, supplemented and modified through the date
               hereof, and (iv) any and all pending applications for additional
               mining permits and other licenses and authorizations that have
               been submitted to any governmental agency by an Operator
               pertaining to the Purchased Assets or are in the process of
               development either in-house or through consultants.

                                       44

          (c)  Schedule 3.8 includes a true and complete list of all of the
               citations, notices of non-compliance and notices of violation
               received by each Operator with respect to the Purchased Assets
               from the Virginia Department of Mines, Minerals and Energy
               ("VDMME"), the Virginia Department of Environmental Quality
               ("VDEQ"), the federal Environmental Protection Agency ("EPA"),
               the federal Office of Surface Mining ("OSM"), the federal Mine
               Safety and Health Administration ("MSHA"), or any other
               Governmental Authority that remain outstanding. No Operator is
               subject to any cessation orders, cease and desist orders, closure
               orders or show cause orders issued by VDMME, VDEQ, EPA, OSM,
               MSHA, or any such other Governmental Authority with respect to
               the Purchased Assets.

          (d)  With respect to the Purchased Assets, each Operator is in
               material compliance with all of the requirements of the Surface
               Mining Control and Reclamation Act of 1977 ("SMCRA"), the Federal
               Mine Safety and Health Act of 1977, as amended, all similar
               statutes of the Commonwealth of Virginia, and all rules and
               regulations promulgated under those Acts and statutes by OSM,
               MSHA, VDMME, VDEQ and any other Governmental Authority. With
               respect to the Purchased Assets, no Operator has been subjected
               to any bond forfeiture, permit suspension or revocation, or
               similar effort and proceedings instituted by OSM, VDMME or any
               other Governmental Authority.

          (e)  To the Knowledge of PCC, after the Closing, Buyer will not be
               liable for any fines, penalties, fees, Taxes or other
               governmental charges assessed with respect to notices of
               violation, cessation orders, closure orders, show cause orders or
               other governmental enforcement actions issued prior to Closing
               with respect to the Purchased Assets. Neither this Agreement nor
               the consummation of the transactions that are the subject of this

                                       45

               Agreement will result in any Buyer Liabilities for site
               investigation or cleanup, or notification to or consent of any
               Governmental Agency or third parties, pursuant to any of the
               so-called "transaction-triggered" or "responsible property
               transfer" Environmental Laws. The representation in the previous
               sentence does not relate to any matters for which Buyer has the
               responsibility, pursuant to this Agreement, to notify any
               Governmental Authority or to otherwise process with any
               Governmental Authority in connection with the transfer of any
               Permit.

          (f)  None of the Purchased Assets is identified on (i) the current or
               proposed National Priorities List under 40 C.F.R. ss. 300, (ii)
               the Comprehensive Environmental Response, Compensation and
               Liability Inventory System ("CERCLIS") list, or (iii) any list
               arising from a federal, state or local statute similar to CERCLA.
               To the Knowledge of PCC, the Real Property is not Contaminated
               with any Hazardous Substance.

          (g)  (A) None of the Purchased Assets has been or is being used in any
               manner associated with the production, manufacture, processing,
               generation, storage, treatment, disposal, management, shipment or
               transportation of Hazardous Substances and no such Purchased
               Assets are Contaminated by any Hazardous Substance; (B) there are
               no underground storage tanks regulated pursuant to RCRAss. 9001
               (42 U.S.C. ss. 6991) or equivalent authorized state program, and
               no above ground storage tanks, located at, on, in or under the
               Purchased Assets; (C) there is no asbestos-containing material in
               any form or condition located at, on, in or under the Purchased
               Assets; (D) there are no materials or equipment containing
               polychlorinated biphenyls located at, on, in or under the
               Purchased Assets, (E) there are no landfills or other areas
               located at, on, in or under the Purchased Assets where Hazardous
               Substances have been disposed, and (F) neither PCC nor any Asset

                                       46

               Sale Company has disposed of any Hazardous Substance at any
               offsite disposal area located on the property of any other
               Person, other than a facility permitted by any Governmental
               Authority with jurisdiction to receive such Hazardous Substance.

          (h)  No Asset Sale Company has, with respect to the Purchased Assets,
               either expressly or by operation of Law, assumed or undertaken
               any Liability, including without limitation, any Liability for
               corrective or remedial action, of any other Person relating to
               any Environmental Laws.

          (i)  To the Knowledge of PCC, no conditions existing as of the Closing
               Date and relating to the Purchased Assets or the activities of
               the Asset Sale Companies or any of their respective predecessors
               or Affiliates will prevent or materially hinder Buyer's
               compliance with Environmental Laws, require Buyer to undertake
               any investigatory, remedial or corrective actions pursuant to
               Environmental Laws or impose upon Buyer any other Liabilities
               pursuant to Environmental Laws, including without limitation, any
               Environmental Laws relating to onsite or offsite releases or
               threatened releases of Hazardous Substances or imposing Liability
               for personal injury, property damage or natural resource damage.

     3.9. Reclamation Bonds.

     Schedule 3.9 contains a list of all bonds, including guaranties,
indemnities, letters of credit and other forms of surety, posted by and/or for
the benefit of the Asset Sale Companies to secure the performance of their
respective reclamation or other Liabilities pursuant to, in connection with or
as a condition of, the Permits (collectively, the "PCC Bonds"). The PCC Bonds
are sufficient to permit the Asset Sale Companies and their Affiliates to
conduct the Mining Activities in compliance with Laws and are in full force and
effect.

                                       47

     3.10. Contracts.

          (a)  PCC has made available to Buyer copies of all of the written
               Contracts, or a written summary setting forth the terms and
               conditions where no copies exist, including all amendments,
               modifications, waivers and elections applicable thereto.

          (b)  As to the Asset Sale Companies party thereto: (i) the Contracts
               are valid and binding, enforceable in accordance with their
               respective terms (subject to any applicable bankruptcy,
               insolvency, reorganization, moratorium or other similar Laws
               affecting generally the enforcement of creditors' rights), and
               are in full force and effect; (ii) the consummation of the
               transactions contemplated herein will not, with or without the
               giving of notice or the passage of time, or both, 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
               the Contracts; (iii) no Asset Sale Company, nor to the Knowledge
               of PCC, any other party is in material breach or default, and no
               event has occurred that, with notice or lapse of time, would
               constitute a breach or default, or permit termination,
               modification or acceleration, under the Contracts; and (iv) no
               Asset Sale Company, nor to the Knowledge of PCC, any other party
               has repudiated any provision of the Contracts.

          (c)  Schedule 3.10(c) sets forth the consents and approvals of third
               parties and Governmental Authorities required to be obtained as a
               result of the transactions contemplated by this Agreement.

     3.11. Litigation; Claims.

          (a)  Schedules 3.5(c), 3.8 and 3.11 list all claims, legal actions,
               suits, litigation, arbitrations, disputes, investigations,
               proceedings by or before any Governmental Authority involving
               more than $100,000 and all orders, decrees or judgments, now

                                       48

               pending or in effect, or, to the Knowledge of PCC, threatened or
               contemplated, against or affecting the Asset Sale Companies, the
               Purchased Assets, or the consummation of the transactions
               contemplated by this Agreement, except to the extent involving
               Taxes for Pre-Closing Periods. Schedule 3.11 also lists all
               grievances and arbitrations that are pending against the Asset
               Sale Signatory Company as of the Closing Date.

          (b)  There are no existing claims by or disputes involving more than
               $100,000 with Persons owning or occupying lands or realty
               adjoining or near any of the Real Property regarding Mining
               Activities by the Asset Sale Companies or regarding the location
               of boundary lines, encroachments, mineral rights, subsidence,
               water quantity or quality, blasting damage, transportation of
               coal or other materials, nuisances or any other similar matter.

     3.12. Employee Benefits.

          (a)  Schedule 3.12(a) contains a list of all "employee benefit plans"
               (as defined in Section 3(3) of ERISA) and all other employee
               benefit plans, programs or arrangements, including each severance
               pay, bonus, deferred compensation, incentive compensation, stock
               purchase, stock option or other equity-based compensation, death
               benefit, group insurance, hospitalization or other medical,
               dental, health, life (including all individual life insurance
               policies as to which any of the Asset Sale Companies is the
               owner, beneficiary or both), disability or other insurance, Code
               Section 125 "cafeteria" or "flexible" benefit plan, pension,
               savings, profit-sharing or retirement plan, program or
               arrangement: (i) under which Employees or former Employees are
               entitled to participate by reason of their employment with any of
               the Asset Sale Companies or their respective ERISA Affiliates,

                                       49

               whether or not any of the foregoing is funded, whether insured or
               self-funded, and with respect to which any of the Asset Sale
               Companies are a party or a sponsor or a fiduciary thereof or by
               which any of the Asset Sale Companies are bound; or (ii) with
               respect to which any of the Asset Sale Companies otherwise may
               have, as of the Closing Date, any direct or indirect Liability
               (the "Employee Benefit Plans"). Schedule 3.12(a) identifies: (i)
               each Employee Benefit Plan that is a "pension plan" (as defined
               in Section 3(2) of ERISA) (other than the UMWA Pension Plans)
               (the "Pension Plans"), and denotes those Pension Plans intended
               to be qualified under Section 401(a) of the Code (the "Qualified
               Plans"); (ii) each Employee Benefit Plan that is a "multiemployer
               plan" (as defined in Section 3(37) or Section 4001(a)(3) of
               ERISA) (a "Multiemployer Plan"); and (iii) each Employee Benefit
               Plan that is a "welfare plan" (as defined in Section 3(1) of
               ERISA) (the "Welfare Plans"). PCC has delivered to Buyer correct
               and complete copies of the Medical Plans maintained by the Asset
               Sale Signatory Company pursuant to any of the Collective
               Bargaining Agreements and the most recent Form 5500 Annual Report
               for such Medical Plans.

          (b)  Each Qualified Plan meets the requirements of a "qualified plan"
               under Code Section 401(a) and has received, pursuant to a request
               that accurately described such Qualified Plan, a favorable
               determination letter from the IRS to the effect that the form of
               such Qualified Plan satisfies the requirements of Section 401(a)
               of the Code and that its related trust is exempt from taxation
               under Section 501(a) of the Code. To the Knowledge of PCC, there
               are no facts or circumstances that would jeopardize or adversely
               affect in any material respect the qualification under Code
               Section 401(a) of any Qualified Plan.

                                       50

          (c)  As of the Closing Date, full payment to each Employee Benefit
               Plan of all contributions (including all employer contributions
               and employee salary reduction contributions) that are required to
               be made by the Asset Sale Companies under the terms thereof and
               under the Collective Bargaining Agreements, ERISA or the Code in
               respect of the current and prior plan years, if any, have been
               made for all Employee Benefit Plans (except for The Savings and
               Investment Plan of The Pittston Company and Its Subsidiaries,
               which payment shall be made as soon as possible after the Closing
               Date). All contributions that are required to be made by the
               Asset Sale Companies for any period ending on or before the
               Closing Date that are not yet due have been paid to each such
               Employee Benefit Plan or accrued in accordance with the past
               custom and practice of the Asset Sale Companies. All premiums
               that are due on or before the Closing Date have been paid with
               respect to each such Welfare Plan. As of the latest actuarial
               determination, no "accumulated funding deficiency" (as defined in
               Section 302 of ERISA or Section 412 of the Code), whether or not
               waived, exists with respect to any Pension Plan. The present
               value of all accumulated benefit obligations under each Qualified
               Plan (based on the assumptions used for purposes of Statement of
               Financial Accounting Standard No. 87) did not as of the last
               annual valuation date applicable thereto exceed the fair market
               value of the assets of such Qualified Plan. No "reportable event"
               within the meaning of Section 4043 of ERISA has occurred in
               connection with any of the Pension Plans.

          (d)  Employee Benefit Plan Compliance.

               (i)  Each Employee Benefit Plan (other than the Multiemployer
                    Plans) has been administered substantially in accordance
                    with its terms;

                                       51

               (ii) each Employee Benefit Plan (other than the Multiemployer
                    Plans) and each related trust, insurance contract or fund
                    complies in form and in operation and has been administered
                    substantially in accordance with any applicable provisions
                    of ERISA, the Code and all other Laws, all reports, returns
                    and other documentation (including Form 5500 Annual Reports
                    and PBGC-1s) that are required to have been filed with the
                    IRS, the United States Department of Labor, the PBGC or any
                    other Governmental Authority have been filed on a timely
                    basis in each instance in which the failure to file such
                    reports, returns and other documents would result in any
                    material Liability to PCC or the Asset Sale Companies;

               (iii) other than routine claims for benefits, no Liens, lawsuits
                    or complaints to or by any Person or Governmental Authority
                    have been filed or, to the Knowledge of PCC, are
                    contemplated or threatened, with respect to any Employee
                    Benefit Plan (other than the Multiemployer Plans) except for
                    those that would not reasonably be expected to result in any
                    material Liability to PCC or the Asset Sale Companies.

          (e)  Neither PCC nor any of the Asset Sale Companies has received a
               written notice of, or incurred, any withdrawal liability with
               respect to a Multiemployer Plan.

          (f)  The consummation of the transactions contemplated by this
               Agreement will not (i) entitle any Person to severance pay for
               which Buyer will be liable after the Closing; (ii) accelerate the
               time of payment or vesting of, increase the amount of, or satisfy
               a condition to the compensation due to any Person under any
               Employee Benefit Plan for which Buyer will be liable after the
               Closing; or (iii) result in the payment of an amount that could,

                                       52

               individually or in combination with any other such payment,
               constitute an "excess parachute payment" under Code Section
               280G(b)(1).

          (g)  No "prohibited transaction" (as such term is defined in Section
               406 of ERISA or Section 4975 of the Code) has occurred with
               respect to any Employee Benefit Plan subject to ERISA, other than
               such a transaction subject to an administrative or statutory
               exemption, with respect to which a Tax, penalty or other amount
               may reasonably be expected to be imposed on any of the Asset Sale
               Companies or their respective ERISA Affiliates.

          (h)  Neither the PCC Parent, PCC, the Asset Sale Companies nor any of
               their respective ERISA Affiliates, nor any organization with
               respect to which any such entity is a successor or parent
               corporation, within the meaning of Section 4069(b) of ERISA, has
               engaged in any transaction described in Sections 4069 or 4212(c)
               of ERISA.

          (i)  Each Pension Plan that is not qualified under Code Section 401(a)
               or 403(a) is exempt from Parts 2, 3 and 4 of Title I of ERISA as
               an unfunded plan that is maintained primarily for the purpose of
               providing deferred compensation for a select group of management
               or highly compensated employees, pursuant to ERISA Sections
               201(2), 301(a)(3) and 401(a)(1).

          (j)  No assets of any of the Asset Sale Companies are allocated to or
               held in a "rabbi trust" or similar funding vehicle.

          (k)  Neither the PCC Parent, PCC, the Asset Sale Companies nor any of
               their respective ERISA Affiliates has received any notification
               that any Multiemployer Plan is in reorganization (within the
               meaning of Section 4121 of ERISA), is insolvent (within the

                                       53

               meaning of Section 4245 of ERISA) or has been terminated (within
               the meaning of Title IV of ERISA), and to the Knowledge of PCC,
               no Multiemployer Plan is reasonably expected to be in
               reorganization, insolvent or terminated.

          (l)  No Welfare Plan is a "multiple employer welfare arrangement" as
               defined in Section 3(40) of ERISA.

     3.13. Employment Matters.

          (a)  The Asset Sale Non-Signatory Company is not a party to, bound by,
               or negotiating with respect to any agreement with any labor
               union, association or other employee group, nor is any unit of
               Employees of the Asset Sale Non-Signatory Company represented by
               any labor union or similar association. No labor union or
               employee organization has been certified or recognized as the
               collective bargaining representative of any Employees of the
               Asset Sale Companies. To the Knowledge of PCC, there are no union
               organizational campaigns or representation proceedings underway
               or threatened with respect to any Employees of the Asset Sale
               Non-Signatory Company, nor are there any existing or threatened
               labor strikes, work stoppages, slowdowns, grievances, unfair
               labor practice charges, discrimination charges or labor
               arbitration proceedings affecting Mining Activities at or
               deliveries to any mine or other facility of any of the Asset Sale
               Companies. Each of the Asset Sale Companies has been and is in
               compliance with all applicable Laws respecting employment and
               employment practices, terms and conditions of employment and
               wages and hours, except where the failure to be in compliance
               would not reasonably be expected to impose any material Liability
               on the Asset Sale Companies.

                                       54

          (b)  To the Knowledge of PCC, Schedule 3.13(b) sets forth the panels
               of Employees Buyer must assume as part of its assumption of the
               Asset Sale Signatory Company's obligations under the Collective
               Bargaining Agreements.

     3.14. No Broker.

     None of the Asset Sale Companies, PCC or the PCC Parent has had any
dealings, negotiations or communications with or retained any broker or other
intermediary in connection with the transactions contemplated by this Agreement
and none of the foregoing is committed to any Liability for any brokers' or
finders' fees or any similar fees in connection with the transactions
contemplated hereby, other than Rothschild Inc., who shall be compensated solely
by PCC or an Affiliate of PCC.

     3.15. Health and Safety Requirements.

     As it relates to the Purchased Assets, each of the Asset Sale Companies has
complied with all applicable Health and Safety Requirements and no action, suit,
proceeding, hearing, investigation, charge, complaint, claim, demand, or notice
is currently outstanding against any of them alleging any failure to so comply,
except for those that would not reasonably be expected to have a Material
Adverse Effect.

     3.16. Restrictions on Business Activities.

     Except for this Agreement, there is no agreement, judgment, injunction,
order or decree binding upon PCC or any of the Asset Sale Companies that has or
would reasonably be expected to have the effect of prohibiting the conduct of
the Business.

     3.17. Powers of Attorney.

     There are no outstanding powers of attorney executed on behalf of any of
the Asset Sale Companies affecting the Purchased Assets.

                                       55

     3.18. Transactions With Affiliates.

     The Contracts do not include any Liability between any Asset Sale Company
and any Affiliate of such Asset Sale Company. At the Closing, the Purchased
Assets will not include any receivable or other Liability from an Affiliate of
any Asset Sale Company.

     3.19. Absence of Certain Payments.

     During the five (5) year period prior to the date of this Agreement, to the
Knowledge of PCC, none of the Asset Sale Companies have (nor has any director,
officer, agent, or employee of any Asset Sale Company nor any other person,
acting on behalf of any Asset Sale Company) directly or indirectly: used any of
such company's funds for unlawful contributions, gifts, entertainment or other
unlawful expenses relating to political activity; made any unlawful payment to
foreign or domestic government officials or employees or to foreign or domestic
political parties or campaigns from such company's funds; violated any provision
of the Foreign Corrupt Practices Act of 1977 applicable to such company;
established or maintained any unlawful or unrecorded fund of such company's
monies or other assets; made any false or fictitious entry on the books or
records of such company; or made any bribe, rebate, payoff, influence payment,
kickback, or other unlawful payment, to any person or entity, private or public,
regardless of form, whether in money, property, or services, to obtain favorable
treatment in securing business or to obtain special concessions for such
company, or to pay for favorable treatment for business secured or for special
concessions already obtained for such company.

     3.20. Disclosure.

     The representations and warranties contained in this Article III do not
contain any untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements and information contained in this
Article III not misleading.

                                       56

                                   ARTICLE IV
                     REPRESENTATIONS AND WARRANTIES OF BUYER

     Buyer hereby represents and warrants to PCC that:

     4.1. Organization.

     Buyer is a duly formed limited liability company, validly existing and in
good standing under the Laws of the State of Delaware.

     4.2. Execution, Delivery and Performance.

     The execution, delivery and performance of this Agreement and each other
agreement or instrument executed in connection herewith or delivered pursuant
hereto and the consummation of the transactions contemplated herein and therein
will not, with or without the giving of notice or the passage of time, or both,
(i) conflict with, or result in a violation or breach of, or a default, right to
accelerate or loss of rights under, or result in the creation of any Lien, under
or pursuant to, any provision of Buyer's organizational documents or of any
franchise, mortgage, deed of trust, lease, license, instrument, agreement,
consent, approval, waiver or understanding, any Law, or any finding, order,
judgment, writ, injunction or decree to which Buyer is a party or by which Buyer
or its respective assets may be bound or affected; or (ii) require the approval,
consent or authorization of, or prior notice to, filing with or registration
with, any Governmental Authority, or any other Person or entity; provided that
this Section 4.2 shall not apply to any requirement of Buyer to obtain any
consent of the applicable Governmental Authority to transfer or modify the
Permits.

4.3. Authorization.

     Buyer has full power and authority to enter into and deliver this
Agreement, and each other agreement or instrument (to which it is a party)
executed in connection herewith or delivered pursuant hereto and to perform its
obligations hereunder and thereunder. Buyer's execution, delivery and

                                       57

performance of this Agreement and all other agreements and instruments executed
in connection herewith or delivered pursuant hereto and the transactions
contemplated hereby have been duly authorized by all requisite action. This
Agreement and all other agreements or instruments executed by Buyer in
connection herewith or delivered by Buyer pursuant hereto have been duly
executed and delivered by Buyer and this Agreement and all other agreements and
instruments executed by Buyer in connection herewith or delivered by Buyer
pursuant hereto constitute Buyer's legal, valid and binding obligation,
enforceable in accordance with their respective terms (subject to any applicable
bankruptcy, insolvency, reorganization, moratorium or other similar Laws
affecting generally the enforcement of creditors' rights).

     4.4. No Broker.

     Buyer has had no dealings, negotiations or communications with any broker
or other intermediary in connection with the transactions contemplated by this
Agreement nor is it committed to any Liability for any brokers' or finders' fees
or any similar fees in connection with the transactions contemplated hereby.

     4.5. Reclamation and Environmental Compliance.

     Buyer and all operators it owns or controls are in compliance with all
Environmental Laws and Reclamation Laws in all material respects, and are not
"permit blocked" under the Applicant Violator System administered by the
Department of the Interior.

     4.6. Financing.

     Buyer will have available to it, at the Closing, financial resources
sufficient to consummate the transactions contemplated by this Agreement.

                                       58

     4.7. Disclosure.

     The representations and warranties contained in this Article IV do not
contain any untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements and information contained in this
Article IV not misleading.

                                    ARTICLE V
                                CERTAIN COVENANTS

     5.1. Operation in Ordinary Course.

     Except as provided in this Agreement, between the date of this Agreement
and the Closing, PCC shall cause each of the Asset Sale Companies, in relation
to the Purchased Assets, to: (i) carry on its business in the Ordinary Course of
Business; (ii) use commercially reasonable efforts to preserve intact its
current business organization, Mining Activities and properties until the
Closing Date, and maintain the relations and good will with its suppliers,
customers, landlords, creditors, agents, and others having business
relationships with such Asset Sale Company; (iii) not enter into any contract or
other obligation binding upon such Asset Sale Company involving its Employees,
the UMWA, or an expenditure, purchase, sale, cost or commitment (unless such
contract is cancelable in thirty or fewer days, involves less than $100,000, or
is for consumable purchases) without the prior written consent of Buyer; (iv)
not settle or otherwise resolve any labor grievance or arbitration, without
prior consent of Buyer, that (x) is listed on Schedule 1.9 or (y) could
reasonably be expected to affect the operation of the Business after the
Closing; and (v) report regularly to Buyer concerning the status of the
business, Mining Activities and finances of such Asset Sale Company.

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     5.2. Compliance with Law.

     Between the date of this Agreement and the Closing, each of the Asset Sale
Companies shall comply in all material respects with all Laws and with all
orders of any Governmental Authority.

     5.3. Cooperation.

     Subject to the terms and conditions herein provided, each of PCC and Buyer
agrees to use its commercially reasonable efforts to take, or cause to be taken,
all action, and to do, or cause to be done, all things necessary, proper and
advisable under Law, to consummate and make effective the transactions
contemplated by this Agreement. In case at any time after the Closing Date any
further action is necessary or desirable to carry out the purposes of this
Agreement, PCC and Buyer will, and PCC will cause the Asset Sale Companies to,
execute any additional instruments reasonably necessary to consummate the
transactions contemplated hereby. Prior to and following the Closing Date, PCC
shall make available to Buyer, at reasonable times, and in a manner so as not to
interfere with the normal business operations of the Asset Sale Companies, all
documents, maps and other information necessary to transfer all Permits to Buyer
in accordance with Law.

     5.4. Notices and Consents.

     PCC and Buyer each will use their commercially reasonable efforts to obtain
consents of all Governmental Authorities and other third parties necessary to
the consummation of the transactions contemplated by this Agreement. PCC shall
have responsibility for providing any notices to third parties that may be
required by the transactions contemplated by this Agreement and for obtaining,
or causing to be obtained, at its sole cost and expense, the consents listed on
Schedule 5.4(a) and Buyer shall have responsibility for obtaining, at its sole

                                       60

cost and expense, all consents listed on Schedule 5.4(b), which Schedule shall
include all Equipment leases, and all consents necessary to transfer the
Permits, with the other party in each case using its commercially reasonable
efforts to assist the responsible party in obtaining such consents or Permits.

     5.5. Publicity.

     All general notices, releases, statements and communications to any
Employees, suppliers, distributors and customers of the Asset Sale Companies, to
the general public and to the press relating to the transactions contemplated by
this Agreement shall be made only at such times and in such manner as may be
mutually agreed upon by PCC and Buyer; provided, however, that either party
hereto (or, in the case of PCC, the PCC Parent) shall be entitled to make a
public announcement of the foregoing if: (a) in the opinion of its legal
counsel, such announcement is required to comply with Law or any listing
agreement with any national securities exchange or inter-dealer quotation
system; and (b) such disclosing party gives a reasonable period of notice and
opportunity to comment to the other party hereto of its intention to make such
public announcement; provided, that, failure to comment within 24 hours of
receipt of such notice shall be deemed a waiver of the opportunity to comment;
and provided, further, that nothing in this Section 5.5 shall operate to
prohibit any Asset Sale Company or Buyer from communicating, after the Closing
Date, with their respective suppliers, distributors, customers and Governmental
Authorities the fact that the transaction has occurred or to employees or their
collective bargaining representative regarding their employment or the terms and
conditions thereof, the operation of the Purchased Assets or matters necessarily
related thereto.

                                       61

     5.6. Permits; Replacement Bonds; Insurance and Guarantees; Other Filings.

          (a)  At or prior to the Closing Date, Buyer shall: (i) secure, in
               accordance with Law, irrevocable commitments to issue replacement
               bonds and replacement sureties and guarantees or other financial
               security, if applicable, for all Permits sufficient to cause the
               applicable Governmental Authority to transfer the Permits to
               Buyer in accordance with Law; and (ii) deliver copies of such
               documents to PCC.

          (b)  At or prior to the Closing Date, Buyer shall deliver copies to
               PCC of all filings, each in a form that satisfies all
               requirements of the applicable Governmental Authority and that
               are necessary to cause the applicable Governmental Authority to
               transfer the Permits to Buyer in accordance with Law.

          (c)  Promptly following the Closing Date through the application of
               best efforts, Buyer shall make all filings with the appropriate
               Governmental Authorities and shall, upon submitting such
               applications to transfer such Permits, post replacement bonds
               necessary under Laws to transfer the Permits to Buyer in
               accordance with Law.

          (d)  Following the Closing Date, PCC will cause each of the Permits
               that is in its name or in the name of an Asset Sale Company to be
               retained in its name or in the name of such Asset Sale Company,
               as appropriate, until the applicable Governmental Authority
               transfers the Permits to Buyer. Buyer may rely on any related
               bonds held or guaranteed by PCC or an Affiliate of PCC; provided
               that Buyer reimburses PCC for bond premiums, security, Office of
               Surface Mining fees, amounts required to be paid to correct (and
               to pay fines or assessments with respect to) any violation
               occurring after the Closing Date and any direct out-of-pocket
               costs incurred by PCC or its Affiliates in connection with the
               maintenance of such Permits or the related bonds following the
               Closing Date. Buyer agrees to use the same efforts to accomplish

                                       62

               the transfer of the Permits as soon as possible after the Closing
               that it would use to obtain its own permits to commence immediate
               mining operations at any site.

          (e)  To the extent allowed by and in accordance with applicable Law,
               PCC shall cause each of the Asset Sale Companies to grant Buyer
               the right to conduct Mining Activities on the properties included
               in the Purchased Assets under each of the Permits; provided that
               if the appropriate Governmental Authority has not transferred any
               Permit by the first anniversary of the Closing Date, Buyer will
               deposit in escrow cash or a letter of credit from a bank
               reasonably acceptable to PCC in an amount equal to the face
               amount of any related outstanding surety bonds until such Permit
               has been transferred.

          (f)  If PCC or one of the Asset Sale Companies receives a notice of
               violation under any of the Permits following the Closing Date but
               before the transfer of the Permit, PCC will give Buyer prompt
               notice thereof. If PCC reasonably determines that Buyer will not
               cause such violation to be cured in a timely fashion, PCC shall
               have the right to cure, or cause to be cured, such violation
               itself and be reimbursed by Buyer for curing such violation.

          (g)  At or prior to the Closing Date, Buyer shall have: (i) for
               purposes other than the Permits, secured replacement bonds,
               replacement sureties, guarantees or other financial security, if
               applicable, sufficient to allow PCC and the Persons who will be
               its Affiliates after the Closing Date to be relieved or released
               as of the Closing Date from all financial commitments,
               guarantees, collateral agreements or similar undertakings listed
               on Schedule 5.6; (ii) obtained property and liability insurance
               customary for a company that is engaged in the Business or a
               business similar to the Business to insure the Purchased Assets;
               and (iii) delivered copies of such documents to PCC.

                                       63

          (h)  On or prior to the Closing, Buyer shall deliver to PCC: (i) a
               Certificate of Good Standing for self-insured status or evidence
               of insurance coverage with respect to Buyer's Liabilities for
               workers' compensation and federal black lung benefits that arise
               out of employment by Buyer or any of its Affiliates of Employees
               on and after the Closing Date, to the extent and in the amounts
               provided in applicable Laws; and (ii) certification from the
               Department of Labor of approval of self-insured status in the
               event Buyer is to be self-insured for federal black lung claim
               liability.

     5.7. Exclusivity.

     PCC will not (nor will it cause or permit any of the Asset Sale Companies
to) (i) solicit, initiate or encourage the submission of any proposal or offer
from any Person relating directly or indirectly to the acquisition of the
Purchased Assets, or any portion thereof, or (ii) participate in any discussions
or negotiations regarding, furnish any information with respect to, assist or
participate in, or facilitate in any other manner, any effort or attempt by any
Person to do or seek any of the foregoing. PCC will notify Buyer immediately if
any Person makes any proposal, offer, inquiry or contact with respect to any of
the foregoing.

     5.8. Access.

     At or prior to the Closing Date, PCC will permit (and will cause each of
the Asset Sale Companies to permit) representatives of Buyer to have full access
at all reasonable times, and in a manner so as not to interfere with the normal
business operations of the Asset Sale Companies, to all premises, properties,
personnel, books, records (including Tax records), contracts and documents of or

                                       64

pertaining to each of the Asset Sale Companies as related to the Purchased
Assets. Copies of and access to accounting records, ledgers and other pertinent
documents or work papers related to the Purchased Assets will be made available
to Buyer at all reasonable times, and in a manner so as not to interfere with
the normal business operations of the Asset Sale Companies, upon request.

     5.9. Notice of Developments.

     Each party will give prompt written notice to the other party of any
material adverse development causing a breach of any of its own representations
and warranties in Article III and Article IV above. No disclosure by any party
pursuant to this Section 5.9, however, shall be deemed to amend or supplement
the Schedules to such representations and warranties or to prevent or cure any
misrepresentation, breach of warranty or breach of covenant.

     5.10. Benefits Provided by PCC.

     To the extent permitted and subject to the provisions of the Cooperation
Agreement, PCC shall provide all benefits necessary to satisfy the Liabilities
retained by PCC pursuant to Section 1.95(k) through its Classified Employee
Retiree Medical Plans, or any successor thereto that may be negotiated by the
Asset Sale Signatory Company or any of its Affiliates.

     5.11. Coal Inventory.

     PCC shall use its commercially reasonable efforts to have 390,000 tons of
Coal Inventory as of the Closing Date.

                                       65

     5.12. Further Assurances.

     The parties shall cooperate in a commercially reasonable manner with each
other and with their respective representatives in connection with any steps
required to be taken as part of their respective obligations under this
Agreement, and shall (a) furnish upon request to each other such further
information; (b) execute and deliver to each other such other documents; and (c)
do such other acts and things, all as the other party may reasonably request for
the purpose of carrying out the intent of this Agreement and the transactions
contemplated.

                                   ARTICLE VI
                         CONDITIONS PRECEDENT TO CLOSING

     6.1. Conditions Precedent to Each Party's Obligations.

     The respective obligations of each party to consummate the transactions
contemplated by this Agreement are subject to the satisfaction at or prior to
the Closing Date of the following conditions precedent:

          (a)  no action, suit, proceeding, order, decree or injunction shall
               have been commenced, threatened or entered by or before any
               Governmental Authority that remains in force and that (i)
               prohibits, seeks to prohibit, or imposes or seeks substantial
               damages in connection with, the consummation of the transactions
               contemplated by this Agreement, (ii) seeks or imposes relief that
               causes or would cause any of the transactions contemplated by
               this Agreement to be rescinded following consummation, (iii)
               affects adversely the right of Buyer to own the Purchased Assets
               or to operate the Business on or after the Closing Date;

          (b)  PCC Parent, PCC, Buyer and Buyer's Ultimate Parent shall have
               executed and delivered to each other party thereto the
               Administrative Services Agreement, the Cooperation Agreement, the
               Indemnification and Guaranty Agreement, and the D-R Service

                                       66

               Agreement and any other documentation required in all
               transactions contemplated or covered by all such agreements, all
               in form and substance as set forth in Exhibits A, F, G and H
               attached hereto and the same shall be in full force and effect;

          (c)  all other transactions pursuant to which Buyer or any of its
               Affiliates acquire assets related to the Business shall have been
               consummated prior to or simultaneously with the transactions
               contemplated by this Agreement;

          (d)  PCC and Buyer shall have executed and delivered to each other all
               such other documents or instruments necessary or appropriate to
               effect the transactions contemplated by this Agreement, including
               the documents provided in Section 5.6 hereof; and

          (e)  PCC shall have obtained, or caused to have been obtained, the
               consents listed in Schedule 6.1(e)(i) and PCC shall have provided
               such payments as may be reasonably required to obtain all such
               consents. Buyer shall have obtained, or caused to have been
               obtained, the consents listed in Schedule 6.1(e)(ii) and Buyer
               shall have provided such payments, guarantees and/or assurances
               as may be reasonably required to obtain all such consents.

     6.2. Conditions Precedent to Obligations of Buyer.

     The obligations of Buyer to consummate the transactions contemplated by
this Agreement are subject to the satisfaction or waiver at or prior to the
Closing Date of the following conditions precedent:

          (a)  all of the representations and warranties of PCC set forth in
               this Agreement or in any Exhibit, Schedule or document delivered
               pursuant hereto, without regard to any qualification or

                                       67

               limitation with respect to materiality (whether by reference to
               "Material Adverse Effect" or otherwise), shall be true and
               correct in all respects as of the date hereof and at and as of
               the Closing Date with the same effect as though such
               representations and warranties were made at and as of the Closing
               unless the aggregate failure of such representations or
               warranties to be true and correct does not have a Material
               Adverse Effect; provided that if a representation or warranty is
               expressly made only as of a specific date, it need only be true
               and correct in all respects as of such date; provided, further,
               that revisions to Schedules 1.9V. (so long as such revision
               relates to a settlement, mediation, arbitration or litigation of
               employee grievances), 1.95(k)(1), 1.95(k)(3), 3.11(20 and 21) and
               3.13(b) prior to the Closing shall not constitute a breach of any
               representation or warranty, and Buyer shall have received the PCC
               Closing Certificate required by Section 6.2(g) below dated as of
               the Closing Date executed by PCC to such effect;

          (b)  all of the covenants and obligations that PCC is required to
               perform or to comply with pursuant to this Agreement at or prior
               to the Closing Date shall have been duly performed and complied
               with in all material respects;

          (c)  all proceedings and actions, corporate or other, to be taken by
               PCC or the Asset Sale Companies in connection with the
               transactions contemplated by this Agreement and all documents
               incident thereto, including all actions necessary to authorize
               the execution, delivery and performance of this Agreement and the
               transactions contemplated hereby, shall have been taken and shall
               be reasonably satisfactory in form and substance to Buyer and
               Buyer's counsel;

                                       68

          (d)  PCC shall have, and shall have caused the Asset Sale Companies to
               have, executed and delivered the Bills of Sale, the Assignment
               and Assumption Agreements, the Conveyance Deeds and such other
               documents as may be necessary to convey to Buyer the Purchased
               Assets;

          (e)  between the date of this Agreement and the Closing Date, there
               shall not have been a change, event or occurrence that,
               individually, or together with any other change, event or
               occurrence, has had or could reasonably be expected to have a
               Material Adverse Effect;

          (f)  Buyer shall have received an opinion of counsel to PCC addressed
               to Buyer substantially in the form of Exhibit J; and

          (g)  Buyer shall have received an executed copy of the PCC Closing
               Certificate.

     6.3. Conditions Precedent to Obligations of PCC.

     The obligation of PCC to consummate and cause the consummation of the
transactions contemplated by this Agreement is subject to the satisfaction or
waiver at or prior to the Closing Date of the following conditions precedent:

          (a)  all of the representations and warranties of Buyer set forth in
               this Agreement or in any Exhibit, Schedule or document delivered
               pursuant hereto, without regard to any qualification or
               limitation with respect to materiality, shall be true and correct
               in all respects as of the date hereof and at and as of the
               Closing Date with the same effect as though such representations
               and warranties were made at and as of the Closing unless the
               aggregate failure of such representations or warranties to be
               true and correct does not have a material adverse effect on
               Buyer's ability to consummate the transactions contemplated by

                                       69

               this Agreement or fulfill its post-Closing obligations hereunder;
               provided that if a representation or warranty is expressly made
               only as of a specific date, it need only be true and correct in
               all respects as of such date, and PCC shall have received Buyer's
               Closing Certificate required by Section 6.3(j) below dated as of
               the Closing Date executed by Buyer to such effect;

          (b)  all of the covenants and obligations that Buyer is required to
               perform or to comply with pursuant to this Agreement at or prior
               to the Closing Date shall have been duly performed and complied
               with in all material respects;

          (c)  all proceedings and actions, corporate or other, to be taken by
               Buyer in connection with the transactions contemplated by this
               Agreement, and all documents incident thereto, including all
               actions necessary to authorize the execution, delivery and
               performance of this Agreement and the transactions contemplated
               hereby, shall have been taken and shall be reasonably
               satisfactory in form and substance to PCC and its counsel;

          (d)  PCC shall have received, on behalf of the Asset Sale Companies,
               the Purchase Price by wire transfer of cash or other immediately
               available funds and the execution and delivery by Buyer of the
               Promissory Note;

          (e)  Buyer shall have executed and delivered the Security Agreement;

          (f)  Buyer shall have executed and delivered the Assignment and
               Assumption Agreements and such other documents as may be
               necessary for Buyer to assume all of the Assumed Liabilities;

          (g)  Buyer shall have delivered to PCC satisfactory evidence of
               compliance with Sections 5.6(a), 5.6(g) and 5.6(h);

                                       70

          (h)  between the date of this Agreement and the Closing Date, there
               shall not have been a change, event or occurrence that,
               individually, or together with any other change, event or
               occurrence, has had or could reasonably be expected to have a
               Material Adverse Effect;

          (i)  PCC shall have received an opinion of counsel to Buyer addressed
               to PCC substantially in the form of Exhibit K; and

          (j)  PCC shall have received an executed copy of Buyer's Closing
               Certificate.

                                  ARTICLE VII
                               CERTAIN TAX MATTERS

     7.1. Property Taxes.

     Property Taxes of the Asset Sale Companies with respect to the Purchased
Assets (including, without limitation, property Taxes payable as a tenant or
lessee under any lease) will be pro-rated as of the Closing Date and,
notwithstanding any other provision of this Agreement, the economic burden of
any such property Tax will be borne by (i) the Asset Sale Companies for all
Pre-Closing Periods and the portion of any Straddle Period through the Closing
Date and (ii) by Buyer for all Post-Closing Periods and the portion of any
Straddle Period after the Closing Date. Accordingly, notwithstanding any other
provision of this Agreement, (i) if any Asset Sale Company pays such a property
Tax with respect to a Post-Closing Period or the portion of Straddle Period
after the Closing Date, Buyer will reimburse PCC on behalf of such Asset Sale
Company within 15 days after receiving from PCC written demand for the amount of
such property Tax, and (ii) if Buyer pays such a property Tax with respect to a
Pre-Closing Period or the portion of a Straddle Period through the Closing Date,
PCC on behalf of the Asset Sale Companies will reimburse Buyer within 15 days
after receiving from Buyer written demand for the amount of such property Tax.

                                       71

For purposes of pro-rating property Taxes, the amount of any property Tax
attributable to the portion of a Straddle Period through the Closing Date shall
be deemed to be the amount of such property Taxes for the entire Straddle Period
multiplied by a fraction, the numerator of which is the number of days in the
Straddle Period through the Closing Date and the denominator of which is the
number of days in the entire Straddle Period. In determining the Straddle Period
for property Taxes, the Tax period as reflected on the statement of Taxes due,
property Tax bill, property "tax ticket," or any other request for payment from
a Governmental Authority will determine the taxable period (e.g., a Virginia
property Tax bill that indicates the tax year as 2002 is for a Tax for the
taxable period January 1, 2002 through December 31, 2002).

     7.2. Sales and Use Taxes.

     Buyer and PCC or the Asset Sale Companies hereby intend that the
transaction be an occasional sale within the meaning of Virginia Code Section
58.1-602 and regulations thereunder, and therefore exempt from Virginia sales
and use Tax pursuant to Virginia Code Section 58.1-609. PCC will be responsible
for sales and use Taxes payable as a result of the failure of this transaction
to qualify as an occasional sale or as an exempt transaction under any other
Virginia law; provided, however, that any use Tax payable as a result of this
transaction that would be payable regardless of whether the transaction
qualifies as an occasional sale or not shall be paid by Buyer.

     7.3. Transfer Taxes.

     All transfer, recording and similar Taxes arising in connection with the
transactions contemplated hereunder shall be borne equally by PCC and Buyer. PCC
and Buyer shall (and they shall cause their respective Affiliates to) cooperate
to comply with all Tax Return requirements for such Taxes and provide such
documentation and take such other actions as may be necessary to minimize the
amount of any such Taxes.

                                       72

     7.4. Access for Tax Returns.

     Following the Closing Date, Buyer shall, at reasonable times, and in a
manner so as not to interfere with normal business operations, allow PCC (and if
requested by PCC, representatives of federal, state or local agencies) access to
the Purchased Assets for purposes of reviewing information pertinent to any Tax
Return filed by PCC Parent or any of its Affiliates, including the Asset Sale
Companies.

                                  ARTICLE VIII
                          COVENANTS REGARDING EMPLOYEES

     8.1. Employees.

          (a)  Subject to the requirements of applicable Laws, but no later than
               immediately prior to the Closing, PCC will cause those Asset Sale
               Companies set forth on Schedule 8.1 to terminate the employment
               of their Employees with respect to the Purchased Assets.

          (b)  From time to time after the Closing Date, PCC and Buyer may
               require information with respect to current or former Employees.
               Without intending to limit the obligations of the parties in the
               exchange of information with respect to any other matter or in
               accordance with the Cooperation Agreement, PCC and Buyer agree to
               furnish such information to the other, if available, promptly
               after receipt of a written request therefor.

     8.2. Collective Bargaining Obligations.

     Buyer acknowledges and agrees that the Asset Sale Signatory Company is
signatory to and bound by the Collective Bargaining Agreements, which Collective
Bargaining Agreements also pertain to assets other than the Purchased Assets.
Immediately after the Closing Date, Buyer further agrees to assume all of the
obligations arising after the Closing Date under the Collective Bargaining
Agreements, which pertain to, or arise out of the Asset Sale Signatory Company's
ownership of, the Purchased Assets.

                                       73

                                   ARTICLE IX
                                   TERMINATION

     9.1. Termination.

     This Agreement may be terminated prior to the Closing Date only as follows:

          (a)  by mutual written consent of PCC and Buyer;

          (b)  by either PCC or Buyer, if the Closing Date shall not have
               occurred prior to the close of business on December 31, 2002 or
               such later date as the parties may agree in writing (provided,
               that the right to terminate this Agreement under this Section
               9.1(b) shall not be available to any party whose failure to
               fulfill any obligation under this Agreement has been the cause,
               in whole or in part, of, or has resulted in, the failure of the
               conditions in Article VI to be satisfied and the Closing Date to
               occur on or before such date);

          (c)  by PCC or Buyer if an action, suit, or proceeding, shall have
               been commenced or threatened by or before any Governmental
               Authority, or any order, decree or injunction shall have been
               entered therein, that (i) prohibits, seeks to prohibit, or
               imposes or seeks substantial damages in connection with, the
               consummation of the transactions contemplated by this Agreement,
               (ii) seeks or imposes relief that causes or would cause any of
               the transactions contemplated by this Agreement to be rescinded
               following consummation, or (iii) affects adversely the right of
               Buyer to own the Purchased Assets or to operate the Business;

                                       74

          (d)  by Buyer if (i) the representations of PCC contained in this
               Agreement are not true and correct in all material respects as if
               made at and as of that time, except for failures to be true and
               correct that are capable of being and are cured within fifteen
               (15) days after written notice from Buyer to PCC of such failure;
               or (ii) PCC has failed to comply materially with its respective
               obligations under this Agreement, except for failures to comply
               that are capable of being and are cured within fifteen (15) days
               after written notice from Buyer to PCC of such failure; or

          (e)  by PCC if (i) the representations of Buyer contained in this
               Agreement are not true and correct in all material respects as if
               made at and as of that time, except for failures to be true and
               correct that are capable of being and are cured within fifteen
               (15) days after written notice from PCC to Buyer of such failure;
               or (ii) Buyer has failed to comply materially with its
               obligations under this Agreement, except for failures to comply
               that are capable of being and are cured within fifteen (15) days
               after written notice from the PCC to Buyer of such failure.

     9.2. Effect of Termination.

     If this Agreement is terminated pursuant to Section 9.1 hereof, all further
obligations of the parties under or pursuant to this Agreement shall terminate
without further Liability of either party to the other except: (a) as set forth
in Section 10.4; and (b) for breaches of representations, warranties, or
covenants or for fraud. PCC and Buyer hereby agree that the provisions of this
Section 9.2 and of Section 10.4 shall survive any termination of this Agreement
pursuant to the provisions of this Article IX.

                                       75

                                   ARTICLE X
                                  MISCELLANEOUS

     10.1. Entire Agreement.

     This Agreement, the documents referred to herein and to be delivered
pursuant hereto and any other agreement entered into contemporaneously with this
Agreement among PCC, PCC Parent, Buyer and Buyer's Ultimate Parent or the
Affiliates of any of them constitute the entire agreement between the parties
pertaining to the subject matter hereof, and supersede all prior agreements,
understandings, negotiations and discussions of the parties, whether oral or
written, and there are no warranties, representations or other agreements
between the parties in connection with the subject matter hereof, except as
specifically set forth herein or therein.

     10.2. Amendment.

     This Agreement may be amended by an instrument in writing and signed on
behalf of all of the parties hereto at any time.

     10.3. Extension; Waiver.

     At any time prior to the Closing Date, the parties may (i) extend the time
for the performance of any of the obligations or other acts of the other parties
hereto, (ii) waive any inaccuracies in the representations and warranties
contained herein or in any document, certificate or writing delivered pursuant
hereto or (iii) waive compliance with any of the agreements or conditions
contained herein, other than the conditions contained in Section 6.1(a) hereof
as it relates to the entry of an order in any proceeding by or before a
Governmental Authority. Any agreement on the part of any party to any such
extension or waiver shall be valid only if set forth in an instrument in writing
and signed on behalf of such party.

                                       76

     10.4. Expenses.

     Whether or not the transactions contemplated by this Agreement are
consummated, each of the parties hereto shall pay the fees and expenses of their
respective counsel, investment bankers, financial advisors, accountants and
other experts and the other expenses incident to the negotiation and preparation
of this Agreement and consummation of the transactions contemplated hereby.

     10.5. Bulk Sales Waiver.

     Buyer hereby waives compliance with all applicable bulk sales Laws.

     10.6. Governing Law.

     This Agreement shall be construed and interpreted according to the Laws of
the Commonwealth of Virginia, without regard to the conflicts of Law rules
thereof.

     10.7. Assignment.

     This Agreement and each party's respective rights hereunder may not be
assigned at any time except as expressly set forth herein without the prior
written consent of the other party, provided that PCC may assign its rights
hereunder to any Affiliate of PCC after the Closing Date without the consent of
Buyer and Buyer may assign its rights hereunder to any Affiliate of Buyer prior
to, at or after the Closing Date without the consent of PCC and, further
provided, that nothing in this Agreement shall prevent a successor in interest
to either party from enforcing the provisions of this Agreement.

     10.8. 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

                                       77

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 party in the
manner provided by this Section 10.8:

If to PCC:                    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

                              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.

                                       78

     10.9. Counterparts; Headings.

     This Agreement may be executed in several counterparts, each of which shall
be deemed an original, but such counterparts shall together constitute but one
and the same Agreement. The Table of Contents and Article and Section headings
in this Agreement are inserted for convenience of reference only and shall not
constitute a part hereof.

     10.10. Interpretation; Construction.

          (a)  Unless the context requires otherwise, all words used in this
               Agreement in the singular number shall extend to and include the
               plural, all words in the plural number shall extend to and
               include the singular and all words in any gender shall extend to
               and include all genders.

          (b)  This Agreement has been fully negotiated by the parties hereto
               and shall not be construed by any Governmental Authority against
               either party as the drafting party.

     10.11. 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.

     10.12. No Reliance.

     No third party is entitled to rely on any of the representations,
warranties and agreements contained in this Agreement and PCC and Buyer assume
no Liability to any third party because of any reliance on the representations,
warranties and agreements of PCC and Buyer contained in this Agreement, other
than Section 5.5 and Article VIII hereof, which are intended to be for the
benefit of the Persons expressly covered thereby and may be enforced by such
Persons.

                                       79

     10.13. Retention of and Access to Records.

     After the Closing Date, Buyer shall retain for a period consistent with
Buyer's record retention policies and practices those books and records relating
to the Asset Sale Companies delivered to Buyer. Buyer also shall provide to PCC
and its Affiliates reasonable access thereto, during normal business hours and
on at least three days' prior written notice, to enable them to prepare
financial statements or Tax Returns or deal with Tax audits or litigation. Buyer
shall deliver to PCC at least thirty days written notice prior to the
destruction or other disposal of any such books and records. PCC and its
Affiliates may elect to take delivery of any such books and records that Buyer
intends to destroy or otherwise dispose of and to copy any such books and
records that Buyer intends to keep, all at their own expense.

     10.14. Arbitration.

     Any dispute, controversy or claim arising out of or relating to this
Agreement (a "Dispute"), excluding any dispute or disagreement among the parties
concerning the determination of the Coal Inventory, which shall be resolved
pursuant to Section 2.11 and the allocation of Purchase Price and Assumed
Liabilities, which shall be resolved pursuant to Section 2.12, shall be decided
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 select an arbitrator within
fourteen 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

                                       80

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 Section 10.14 shall
be the exclusive means to resolve all Disputes.

                                       81

     IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of the date first above written.

                                  PITTSTON COAL COMPANY

                                   By:     /s/ Michael D. Brown
                                   ---------------------------------------------
                                   Name:   Michael D. Brown
                                   Title:  Vice President - Development and
                                           Technical Resources

                                    DICKENSON-RUSSELL COAL COMPANY, LLC

                                    By:    /s/ Anthony McGartland
                                    --------------------------------------------
                                    Name:  Anthony McGartland
                                    Title: President

                                       82

                                  SCHEDULE 1.5

                              ASSET SALE COMPANIES

Asset Sale Signatory Company
- ----------------------------
Clinchfield Coal Company, a Virginia corporation

Asset Sale Non-Signatory Company
- --------------------------------
Pittston Coal Management Company, a Virginia corporation

                                       A-1

                                                                     Exhibit 2.2

                              PITTSTON COAL COMPANY
                              448 N. E. Main Street
                             Lebanon, Virginia 24266

                                December 13, 2002

Dickenson-Russell Coal Company, LLC
c/o Alpha Natural Resources, LLC
406 West Main Street
Abingdon, Virginia 24212

Ladies and Gentlemen:

     Reference is made to the Asset Purchase Agreement (the "Agreement"), dated
as of October 29, 2002, as amended to but not including the date hereof, by and
between Pittston Coal Company ("PCC") and Dickenson-Russell Coal Company, LLC
("Buyer"). Capitalized terms used herein without definition shall have the
meanings ascribed to them in the Agreement.

     PCC and Buyer desire to amend certain provisions of the Agreement and, in
consideration of the mutual covenants, conditions and agreements set forth
herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:

     1.   Section 1.87 of the Agreement is deleted in its entirety and replaced
          with the following:

     "1.87 Purchase Price.

     "Purchase Price" shall mean the cash amount of $12,510,674 (which amount
shall include $880,000 for the Parts, Fuel and Supplies Inventory, $3,180,000
for the Coal Inventory and $110,000 for two continuous miners), plus the
Promissory Note."

     2.   A new Section 1.108 of the Agreement is inserted into the Agreement as
          follows:

     "1.108 Subleases.

     "Subleases" shall have the meaning set forth in Section 2.13(a) hereof."

     3.   Notwithstanding anything in the Agreement to the contrary, each of PCC
          and Buyer agree that for purposes of Sections 2.1 and 2.2 of the
          Agreement only, none of the Equipment listed on Schedule 1.44(b)
          attached to the Agreement shall constitute Purchased Assets.

     4.   Notwithstanding anything in the Agreement to the contrary, each of PCC
          and Buyer agree that PCC shall have caused the applicable Asset Sale
          Companies to purchase the Equipment specifically identified under the
          heading "Transamerica Equipment" on Schedule 1.44(b) (the
          "Transamerica Equipment"). Simultaneously with the

                                       1

          Closing, PCC shall cause the applicable Asset Sale Companies to
          transfer to Buyer, and Buyer shall acquire, the Transamerica Equipment
          from such Asset Sale Companies pursuant to a bill of sale. Each of PCC
          and Buyer agrees that the Purchase Price set forth in Section 1.87
          includes all amounts that Buyer owes PCC or the Asset Sale Companies
          for the Transamerica Equipment upon its purchase by the applicable
          Asset Sale Companies from Transamerica, including one-half of the
          lease breakage fee. PCC acknowledges its responsibility to pay
          $64,939.74 to Transamerica, which is one-half of such lease breakage
          fee.

     5.   Each of PCC and Buyer agree that in satisfaction of Section 2.11 of
          the Agreement, the face amount of the Promissory Note shall be fixed
          at $5,784,442.

     6.   A new Section 2.13 of the Agreement is inserted into the Agreement as
          follows:

     2.13 Subleases.

          (a)  Each of PCC and Buyer agree that at the Closing, Buyer shall
               sublease the Equipment set forth on Schedule 1.44(b) attached to
               the Agreement (other than the Transamerica Equipment) from the
               applicable Asset Sale Company pursuant to the subleases
               substantially in the forms attached hereto as Exhibits A-1, A-2
               and A-3 (the "Subleases").

          (b)  At the Closing, PCC shall cause the applicable Asset Sale Company
               to, and Buyer shall execute and deliver the Subleases.

     7.   Sections 5.6(b) and (c) of the Agreement are deleted in their entirety
          and replaced with the following:

                    "(b) Prior to the Closing Date: (i) Buyer shall deliver a
               copy to PCC of the filing that is necessary to cause the
               applicable Governmental Authority to transfer any one of the
               Permits (the "Initial Filing") to Buyer in accordance with Law,
               in a form that satisfies all requirements of the applicable
               Governmental Authority; and (ii) following approval by PCC, Buyer
               shall file the Initial Filing with the appropriate Governmental
               Authority.

                    (c) Promptly following the Closing Date through the
               application of best efforts, and in any event no later than 30
               days after the Closing, Buyer shall make all filings other than
               the Initial Filing with the appropriate Governmental Authorities
               necessary to transfer the Permits to Buyer in accordance with Law
               and thereafter, as required by Law, shall post replacement
               bonds."

     8.   PCC and Buyer agree that the completion of the actions set forth in
          Sections 4 and 6 of this letter agreement that are required to be
          completed by Buyer shall be deemed to satisfy all of Buyer's
          obligations: (i) to obtain the consent of the applicable third party
          lessor in accordance with Section 5.4 and Section 6.1(e) of the
          Agreement; and (ii) with respect to such Equipment leases pursuant to
          Section 5.6(g) of the Agreement (with the exception of the Equipment
          being leased from Deere Credit, Inc. pursuant to leases expiring in
          2004).

                                       2

     9.   The Schedules to the Agreement are hereby amended and restated in
          their entirety as attached hereto as Exhibit A.

     10.  Except as amended by this letter agreement, the Agreement shall
          continue in full force and effect.

     11.  This letter agreement may be executed in two or more counterparts,
          each of which shall be deemed an original, but all of which together
          shall constitute one and the same instrument. Any executed counterpart
          of this letter agreement or other signature hereto delivered by a
          party by facsimile shall be deemed for all purposes as being good and
          valid execution and delivery of this letter agreement by such party.

                                       3

Sincerely,

PITTSTON COAL COMPANY

By:      /s/ Michael D. Brown
- -------------------------------------
Name:    Michael D. Brown
Title:   Vice President - Development
         and Technical Resources

ACKNOWLEDGED AND AGREED:

DICKENSON-RUSSELL COAL COMPANY, LLC

By:      /s/ Anthony McGartland
- -------------------------------------
Name:    Anthony McGartland
Title:   President

                                       4

                                                                     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;

                                       1

     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.

                                       2

     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.

                                       3

     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.

                                       4

                                   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):

                                       5

          (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.

                                       6

     (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);

                                       7

          (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

                                       8

          (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.

                                       9

     (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.

                                       10

     (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.

                                       11

     (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

                                       12

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

                                       13

          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,

                                       14

          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.

                                       15

     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

                                       16

          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,

                                       17

          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:

                                       18

                  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

                                       19

                  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.

                                       20

                                   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.

                                       21

     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.

                                       22

     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

                                       23

                                   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.

                                       24

                                   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.

                                       25

                                                                     Exhibit 2.4

                              COOPERATION AGREEMENT

                                 BY AND BETWEEN

                              PITTSTON COAL COMPANY

                                       AND

                       DICKENSON-RUSSELL COAL COMPANY, LLC

                                December 13, 2002

                                Table of Contents

                                                                                                                Page
                                                                                                                -----
                                                                                                           
ARTICLE I  DEFINITIONS............................................................................................2
1.1.        Acquisition Agreement.................................................................................2
1.2.        Actuarial Firm........................................................................................2
1.3.        Affiliates, Successors, Assigns, Lessees or Contractors...............................................2
1.4.        Agreement.............................................................................................3
1.5.        Amended Medical Plan..................................................................................3
1.6.        Amended Plan Projected Cost...........................................................................3
1.7.        Classified Plan Expected Cost.........................................................................3
1.8.        Closing Layoff........................................................................................3
1.9.        Coal Act Liabilities..................................................................................3
1.10.       Collective Bargaining Agreement Liabilities...........................................................3
1.11.       Communications........................................................................................4
1.12.       Employee Related Liabilities..........................................................................4
1.13.       D-R...................................................................................................4
1.14.       Participants..........................................................................................4
1.15.       PCC...................................................................................................4
1.16.       Post-94 Retirees......................................................................................4
1.17.       Post-94 Retiree Medical Liabilities...................................................................4
1.18.       Recurrence Claim......................................................................................4
1.19.       Relative Cost Factor..................................................................................4
1.20.       Third Parties.........................................................................................5
1.21.       UMWA..................................................................................................5
1.22.       Workers' Compensation and Federal Black Lung Liabilities..............................................5
ARTICLE II  COAL ACT LIABILITIES..................................................................................5
2.1.        General...............................................................................................5
ARTICLE III  POST-94 RETIREE MEDICAL LIABILITIES..................................................................7
3.1.        General...............................................................................................7
3.2.        Amendment to Collective Bargaining Agreements.........................................................9
3.3.        PCC Amendments to the Medical Plans..................................................................11
3.4.        D-R Provision of Benefits............................................................................12
ARTICLE IV  WORKERS' COMPENSATION AND FEDERAL BLACK LUNG LIABILITIES.............................................13
4.1.        General..............................................................................................13
4.2.        Litigation and Disputes..............................................................................14
4.3.        No Adverse Changes...................................................................................14
4.4.        Recurrence of Prior Claims...........................................................................15
ARTICLE V  EMPLOYEE RELATED LIABILITIES..........................................................................16
5.1.        Employee Related Liabilities.........................................................................16
ARTICLE VI  Collective bargaining agreement......................................................................17
6.1.        Collective Bargaining Agreement Liabilities..........................................................17
ARTICLE VII  DISPUTE RESOLUTION..................................................................................18
ARTICLE VIII  TERM...............................................................................................19
ARTICLE IX  MISCELLANEOUS........................................................................................19

                                                                                                          
9.1.        Cooperation..........................................................................................19
9.2.        Continuing Obligations...............................................................................20
9.3.        D-R Communication with Third Parties.................................................................21
9.4.        Litigation Support...................................................................................22
9.5.        Confidentiality......................................................................................22
9.6.        Governing Law........................................................................................23
9.7.        Successors and Assigns...............................................................................23
9.8.        Notices and Payments.................................................................................24

                              COOPERATION AGREEMENT

     THIS COOPERATION AGREEMENT, made as of December 13, 2002, by and between
PITTSTON COAL COMPANY, a Delaware corporation ("PCC"), on its own behalf and on
behalf of its Affiliates, and DICKENSON-RUSSELL COAL COMPANY, LLC, a Delaware
limited liability company ("D-R"), on its own behalf and on behalf of its
Affiliates.

                                    RECITALS

     WHEREAS, D-R, PCC and certain Affiliates of PCC have entered into a certain
asset purchase agreement as set forth on Schedule A, dated as of October 29,
2002 (such agreement, together with the Exhibits and Schedules attached thereto
being hereinafter referred to as the "Acquisition Agreement"), pursuant to which
D-R has agreed to 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, pursuant to the Acquisition Agreement, PCC has agreed to retain
certain liabilities and certain assets; and

     WHEREAS, PCC, PCC Parent, D-R and Alpha Natural Resources, LLC, a Delaware
limited liability company, have entered into the Indemnification and Guaranty
Agreement; and

     WHEREAS, PCC and D-R desire to establish certain administrative procedures
with respect to their respective obligations under the Acquisition Agreement;
provided, however, that nothing in this Agreement is intended in any way to
reallocate risk or modify the allocation of liabilities in the Acquisition
Agreement or the Indemnification and Guaranty Agreement; and provided, further,
that nothing in this Agreement, the Acquisition Agreement or the Indemnity
Agreement is intended to, nor should be construed to, establish a single
employer, joint employer, common employer and/or alter ego relationship between
PCC and its Affiliates on the one hand and D-R and its Affiliates on the other
hand.

                                       1

     NOW, THEREFORE, in consideration of the mutual covenants, conditions and
agreements set forth herein and in the Acquisition Agreement and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, PCC and D-R agree that:

                                   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. Actuarial Firm.

     "Actuarial Firm" shall have the meaning set forth in Section 3.2(b) hereof.

     1.3. Affiliates, Successors, Assigns, Lessees or Contractors.

     "Affiliates, Successors, Assigns, Lessees or Contractors" shall mean D-R's
Affiliates, contractual successors and assigns, and lessees and contractors who,
as part of a contractual arrangement with D-R or one of its Affiliates, offer
employment to the current or former Employees of an Asset Sale Company.

                                       2

     1.4. Agreement.

     "Agreement" shall mean this Cooperation Agreement, together with the
Schedule[s] attached hereto, as the same may be amended from time to time in
accordance with the terms hereof.

     1.5. Amended Medical Plan.

     "Amended Medical Plan" shall have the meaning set forth in Section 3.2(a)
hereof.

     1.6. Amended Plan Projected Cost.

     "Amended Plan Projected Cost" shall have the meaning set forth in Section
3.2(b) hereof.

     1.7. Classified Plan Expected Cost.

     "Classified Plan Expected Cost" shall have the meaning set forth in Section
3.2(b) hereof.

     1.8. Closing Layoff.

     "Closing Layoff" shall have the meaning set forth in Section 6.1 hereof.

     1.9. Coal Act Liabilities.

     "Coal Act Liabilities" shall mean those Retained Liabilities specified in
Section 1.95(j) of the Acquisition Agreement.

     1.10. Collective Bargaining Agreement Liabilities.

     "Collective Bargaining Agreement Liabilities" shall mean those liabilities
assumed by the Buyer pursuant to Section 8.2 of the Acquisition Agreement and
Section IV of Schedule 1.9 thereto.

                                       3

     1.11. Communications.

     "Communications" shall have the meaning set forth in Section 2.1(a) hereof.

     1.12. Employee Related Liabilities.

     "Employee Related Liabilities" shall mean those Retained Liabilities
specified in Sections 1.95(d), 1.95(e), 1.95(f), 1.95(i), 1.95(l), 1.95(m),
1.95(n), and 1.95(p) of the Acquisition Agreement.

     1.13. D-R.

     "D-R" shall have the meaning set forth in the preamble to this Agreement.

     1.14. Participants.

     "Participants" shall have the meaning set forth in Section 3.4 hereof.

     1.15. PCC.

     "PCC" shall have the meaning set forth in the preamble to this Agreement.

     1.16. Post-94 Retirees.

     "Post-94 Retirees" shall mean the current and former Classified Employees
for whom PCC has retained liabilities pursuant to Section 1.95(k) of the
Acquisition Agreement.

     1.17. Post-94 Retiree Medical Liabilities

     "Post-94 Retiree Medical Liabilities" shall mean those Retained Liabilities
specified in Section 1.95(k) of the Acquisition Agreement.

     1.18. Recurrence Claim.

     "Recurrence Claim" shall have the meaning set forth in Section 4.4 hereof.

     1.19. Relative Cost Factor.

     "Relative Cost Factor" shall have the meaning set forth in Section 3.2(b)
hereof.

                                       4

     1.20. Third Parties.

     "Third Parties" shall have the meaning set forth in Section 9.3 hereof.

     1.21. UMWA.

     "UMWA" shall mean the International Union, United Mine Workers of America,
including its district and local unions.

     1.22. Workers' Compensation and Federal Black Lung Liabilities.

     "Workers' Compensation and Federal Black Lung Liabilities" shall mean those
Retained Liabilities specified in Sections 1.95(b) and 1.95(c) of the
Acquisition Agreement.

                                   ARTICLE II
                              COAL ACT LIABILITIES

     2.1. General.

     In order to assist PCC with regard to the satisfaction of the Coal Act
Liabilities, PCC and D-R agree as follows:

     (a)  Notices and Communication.

     In the event D-R or any of its Affiliates, Successors, Assigns, Lessees or
Contractors receive from any administrative, judicial or other source any
claims, communications, correspondence, notices, invoices and/or other documents
(collectively, "Communications") that are related to the Coal Act Liabilities,
D-R agrees that it shall, and shall cause its Affiliates, Successors, Assigns,
Lessees or Contractors to:

          (i)  promptly send to PCC or its designated Affiliate a copy of any
               such Communications; and

                                       5

          (ii) cooperate with PCC in notifying the sender of the Communications
               that such Communications should be sent to PCC or its designated
               Affiliate.

     (b) Litigation.

     PCC shall have the exclusive right to pursue and/or defend currently
pending litigation or to commence and/or defend future litigation, with respect
to any issue relating to the Coal Act Liabilities, including, but not limited
to, claims pertaining to specific beneficiaries, statutory construction or the
constitutionality of the Coal Act, as PCC deems necessary or appropriate.

     (c)  Administration. PCC or one or more of its Affiliates shall be solely
          responsible for administering the Coal Act Liabilities and shall take
          such actions as it deems necessary or appropriate to administer the
          Coal Act Liabilities, including, but not limited to:

          (i)  pursuing administrative or judicial challenges to the assignment
               of beneficiaries to PCC or any of its Affiliates in accordance
               with the terms of the Coal Act;

          (ii) administering claims under the individual employer plan required
               to be maintained under Section 9711 of the Coal Act, including
               entering into agreements with third party administrators and
               resolving or litigating claim disputes;

          (iii) implementing managed care and/or other methods of delivery; and

                                       6

          (iv) discussing managed care and cost containment options with the
               UMWA.

                                  ARTICLE III
                       POST-94 RETIREE MEDICAL LIABILITIES

     3.1. General.

     In order to assist PCC with regard to the satisfaction of the Post-94
Retiree Medical Liabilities, PCC and D-R agree as follows:

     (a) Administration.

     PCC or one or more of its Affiliates shall be solely responsible for
administering the Post-94 Retiree Medical Liabilities, making such
determinations, awarding and denying such benefits, seeking such administrative
and judicial rulings and remedies and taking all such other actions as PCC shall
deem necessary or appropriate.

     (b)  Notices and Communication.

          (i)  PCC shall have the exclusive right to provide such notices, if
               any, as PCC deems necessary or appropriate to the Post-94
               Retirees, the UMWA and any insurers and third party
               administrators providing services or benefits related to the
               Post-94 Retiree Medical Liabilities, with respect to PCC's
               retention, administration and satisfaction of the Post-94 Retiree
               Medical Liabilities.

          (ii) In the event D-R or any of its Affiliates, Successors, Assigns,
               Lessees or Contractors receives any Communications that are
               related to the Post-94 Retiree Medical Liabilities, D-R agrees
               that it shall, and shall cause its Affiliates, Successors,
               Assigns, Lessees or Contractors to, promptly send to PCC or its
               designated Affiliate a copy of any such Communications and to
               cooperate with PCC in notifying the sender of the Communications
               that such Communications should be sent to PCC or its designated
               Affiliate.

                                       7

          (iii) D-R shall provide to PCC, on a monthly basis, written notice of
               (and by electronic means if available) (a) the names and social
               security numbers, (b) dates of hire, (c) location of employment
               and whether such employment is covered by a collective bargaining
               agreement and (d) whether D-R believes that in the event any such
               individual becomes entitled to retiree medical benefits,
               liability therefor would be a Post-94 Retiree Medical Liability,
               for all Classified Employees listed on Schedules 1.95(k)(1) and
               1.95(k)(3) of the Acquisition Agreement who are recalled or hired
               by D-R or any of its Affiliates, Successors, Assigns, Lessees or
               Contractors. Each monthly notice shall include only new or
               changed information from the last update.

          (iv) The foregoing monthly notices also shall identify whenever the
               total number of Classified Employees working at the Purchased
               Assets listed on Schedule 1.95(k)(2) of the Acquisition Agreement
               (A) reaches the 273 Threshold, (B) exceeds the 273 Threshold or
               (C) decreases to less than the 273 Threshold, including the dates
               on which the events described in (A), (B) and (C) of this
               paragraph occurred.

          (v)  D-R shall provide written notice to PCC in the event D-R or any
               of its Affiliates, Successors, Assigns, Lessees or Contractors
               negotiates any successor agreement to any of the Collective
               Bargaining Agreements that does not require such entity to
               provide retiree medical benefits to UMWA pensioners, or which
               contains any modifications or amendments to or replacements of
               any Classified Employee Retiree Medical Plan.

          (vi) D-R shall provide all information reasonably requested by PCC in
               connection with any Classified Employee listed on Schedules
               1.95(k)(1) and 1.95(k)(3) of the Acquisition Agreement who seeks

                                       8

               to receive retiree health benefits from D-R or PCC and whom D-R
               or PCC believes is the responsibility of PCC under the Post-94
               Retiree Medical Liabilities, including, without limitation, a
               copy of such Classified Employee's UMWA Pension Plan award letter
               and calculation worksheet, dates of employment with D-R or its
               Affiliates, Successors, Assigns, Lessees or Contractors, and
               verification that such Employee was hired or recalled to work at
               the Purchased Assets listed on Schedule 1.95(k)(2) of the
               Acquisition Agreement.

          (vii) D-R shall provide all other information reasonably requested by
               PCC in order to satisfy and/or administer the Post-94 Retiree
               Medical Liabilities.

     (c)  Litigation and Disputes.

          (i)  PCC shall have the exclusive right to resolve any dispute
               regarding Post-94 Retiree Medical Liabilities as PCC in its
               discretion deems appropriate, including the exclusive right to
               institute and/or defend against any litigation related to Post-94
               Retiree Medical Liabilities.

          (ii) PCC shall have the right to challenge any assertion that the
               retiree medical benefits for any Classified Employee listed on
               Schedules 1.95(k)(1) and 1.95(k)(3) of the Acquisition Agreement
               is a Post-94 Retiree Medical Liability. In the event such a
               challenge cannot be mutually resolved between PCC and D-R, it
               shall become a Dispute under this Agreement and resolved in
               accordance with Article VI hereof.

     3.2. Amendment to Collective Bargaining Agreements.

     (a)  D-R and PCC acknowledge that from time to time it may be necessary for
          D-R or its Affiliates, Successors, Assigns, Lessees or Contractors to
          re-negotiate the terms of the Collective Bargaining Agreements. In the

                                       9

          event that D-R or its Affiliates, Successors, Assigns, Lessees or
          Contractors agrees to any modifications or amendments to the benefits
          provided under, or to the plan design of, any Classified Employee
          Retiree Medical Plan ("Amended Medical Plan"), to the extent allowed
          by law PCC shall have the right to determine whether to satisfy the
          Post-94 Retiree Medical Liabilities through the Classified Employee
          Retiree Medical Plan(s) or through any Amended Medical Plan, provided,
          however, in the event a claim against D-R or PCC is filed with a court
          or administrative agency with jurisdiction over the claim, asserting
          that the Post-94 Retiree Medical Liabilities must be provided through
          an Amended Medical Plan, then, (i) in the event the claim is asserted
          against PCC, PCC may elect to satisfy the Post-94 Medical Liabilities
          though an Amended Medical Plan, and (ii) in the event the claim is
          asserted against D-R, PCC shall agree, upon the written request of
          D-R, to satisfy such Liabilities through the Amended Medical Plan.

     (b)  In the event an Amended Medical Plan is negotiated by D-R or its
          Affiliates, Successors, Assigns, Lessees or Contractors, PCC shall
          have the right, at its sole cost and expense, to submit to the
          actuarial firm of Mercer Human Resource Consulting, or another
          actuarial firm mutually acceptable to PCC and D-R (the "Actuarial
          Firm"): (i) the Classified Employee Retiree Medical Plan(s) pursuant
          to which PCC is satisfying the Post-94 Retiree Medical Liabilities;
          and (ii) the Amended Medical Plan. The Actuarial Firm will perform a
          relative value analysis of each plan, including its administration,
          using actuarial methods designed to estimate the cost difference
          between two or more plans. This analysis will compare the coverage
          provisions of the Amended Medical Plan to those of the Classified
          Employee Retiree Medical Plan(s) to determine the relative cost of

                                       10

          each plan based on the respective benefit design and services covered.
          This relative cost will be calculated as a factor representing the
          percentage cost difference of the Amended Medical Plan relative to the
          Classified Employee Retiree Medical Plan(s) ("Relative Cost Factor").
          If the relative value analysis demonstrates that the cost of the
          Amended Medical Plan, including its administration, exceeds the cost
          of the Classified Employee Retiree Medical Plan(s), including its
          administration, and PCC chooses or is required to satisfy the Post-94
          Retiree Medical Liabilities through the Amended Medical Plan, D-R will
          reimburse PCC that amount by which the projected cost to be incurred
          by PCC for that plan year to satisfy the Post-94 Retiree Medical
          Liabilities under the Amended Medical Plan ("Amended Plan Projected
          Cost") exceeds the amount PCC would have expected to incur under the
          terms of the Classified Employee Retiree Medical Plan(s) ("Classified
          Plan Expected Cost"). This amount shall be divided and reimbursed in
          four equal installments at the end of each calendar quarter. The
          Amended Plan Projected Cost and the Classified Plan Expected Cost will
          be estimated based on actuarial methods and factors, including the
          historical experience of the plans, expected medical cost and
          utilization trend, demographic differences and the Relative Cost
          Factor.

     (c)  Either PCC or D-R shall have the right to request that the Actuarial
          Firm perform a new relative value analysis of the Classified Employee
          Retiree Medical Plan(s) and the Amended Medical Plan, or any successor
          thereto: (i) at the termination of any collective bargaining agreement
          to which D-R or any of its Affiliates, Successors, Assigns, Lessees or
          Contractors are signatory or every five years, whichever occurs first;
          and (ii) in the event legislation is enacted which affects the terms
          or costs of any such plan. The party requesting such new relative
          value analysis shall pay all costs and expenses associated therewith.

     3.3. PCC Amendments to the Medical Plans.

     If PCC has or secures from the UMWA a right to change the medical plan(s)
by which it satisfies the Post-94 Retiree Medical Liabilities, PCC may make any

                                       11

such changes so long as they do not impose any liability or additional costs or
obligations on D-R or its Affiliates, Successors, Assigns, Lessees or
Contractors.

     3.4. D-R Provision of Benefits.

     D-R and PCC acknowledge that there is a possibility that participants for
which PCC is required to satisfy the Post-94 Retiree Medical Liabilities may
demand under the Collective Bargaining Agreements that D-R or its Affiliates,
Successors, Assigns, Lessees or Contractors, rather than PCC, provide their
retiree medical benefits ("Participants"). In the event D-R or its Affiliates,
Successors, Assigns, Lessees or Contractors is required to provide such retiree
medical benefits for any such Participant:

     (a)  PCC shall reimburse D-R or its Affiliates, Successors, Assigns,
          Lessees or Contractors the Classified Plan Expected Cost, prorated for
          each such Participant, which will be estimated based on actuarial
          methods and factors, including the historical experience of the plans,
          expected medical cost and utilization trend, demographic differences
          and the Relative Cost Factor. This amount shall be divided and
          reimbursed in four equal installments at the end of each calendar
          quarter.

     (b)  Either PCC or D-R shall have the right to request that the Actuarial
          Firm perform a new relative value analysis of the Classified Employee
          Retiree Medical Plan(s) and the Amended Medical Plan, or any successor
          thereto: (i) at the termination of any collective bargaining agreement
          to which D-R or any of its Affiliates, Successors, Assigns, Lessees or
          Contractors are signatory or every five years, whichever occurs first;
          and (ii) in the event legislation is enacted which affects the terms
          or costs of any such plan. The party requesting such new relative
          value analysis shall pay all costs and expenses associated therewith.

                                       12

                                   ARTICLE IV
            WORKERS' COMPENSATION AND FEDERAL BLACK LUNG LIABILITIES

     4.1. General.

     In order to assist PCC with regard to the satisfaction of the Workers'
Compensation and Federal Black Lung Liabilities, PCC and D-R agree as follows:

     (a) Administration.

     PCC or one or more of its Affiliates shall be solely responsible for
administering the Workers' Compensation and Black Lung Liabilities, including
making such determinations, awarding and denying such benefits, seeking such
administrative and judicial rulings and remedies and taking all such other
actions as PCC shall deem necessary or appropriate.

     (b) Notices and Communication.

          (i)  D-R and PCC agree to cooperate with each other in providing any
               notices that may be necessary to the appropriate Governmental
               Authority regarding the allocation between PCC, on the one hand,
               and D-R, on the other hand, of the Workers' Compensation and
               Federal Black Lung Liabilities.

          (ii) In the event D-R or any of its Affiliates, Successors, Assigns,
               Lessees or Contractors receive any Communications that are
               related to the Workers' Compensation and Federal Black Lung
               Liabilities, D-R agrees that it shall, and shall cause its
               Affiliates, Successors, Assigns, Lessees or Contractors to, send
               promptly to PCC or its designated Affiliate a copy of any such
               Communications.

          (iii) D-R and PCC agree to cooperate with each other in providing such
               notices of the allocation of liabilities under the Acquisition

                                       13

               Agreement as D-R and PCC deems appropriate to any insurer or
               third party administrator providing services or benefits related
               to the Workers' Compensation and Federal Black Lung Liabilities.

     4.2. Litigation and Disputes.

     PCC shall have the right to resolve or defend against any claim that is
related to the Workers' Compensation and Federal Black Lung Liabilities in such
manner as PCC in its discretion deems appropriate, in accordance with such
procedures as PCC deems appropriate and with the controlling Workers'
Compensation Act and federal black lung Laws, including raising the defense that
D-R is the responsible operator under the federal black lung Laws because D-R or
its Affiliates, Successors, Assigns, Lessees or Contractors is a
successor-in-interest to PCC or its Affiliates; provided, however, that D-R
shall have the right to respond that PCC is the responsible operator under the
federal black lung Laws notwithstanding D-R's acquisition of the Purchased
Assets. PCC also shall have the right to institute or defend against any
litigation related to the Workers' Compensation and Federal Black Lung
Liabilities, except that PCC shall promptly notify D-R of any workers'
compensation or federal black lung claim in which it intends to assert that D-R
is responsible for payment of the same under the Acquisition Agreement, in which
case D-R shall have the right to intervene in any such action to oppose PCC's
position. Any dispute as to which entity is the responsible entity for such
workers' compensation claims shall be determined in accordance with the Workers'
Compensation Acts, and any dispute as to which entity is the responsible
operator for such black lung claims shall be determined in accordance with the
federal black lung Laws.

     4.3. No Adverse Changes.

     D-R agrees that it will, and will cause its Affiliates, Successors,
Assigns, Lessees or Contractors to, use its or their commercially reasonable

                                       14

efforts to retain in effect any lawful program or practice of PCC or its
Affiliates in effect at Closing that is intended to reduce employer liability or
the length of time an employee is entitled to receive benefits under the
Workers' Compensation Act.

     4.4. Recurrence of Prior Claims.

     In the event D-R or any of its Affiliates, Successors, Assigns, Lessees or
Contractors receives a claim under the applicable Workers' Compensation Acts or
federal black lung Laws and D-R or its Affiliates, Successors, Assigns, Lessees
or Contractors believes in good faith that such claim relates to, or is a
recurrence of, a prior claim that constituted a Workers' Compensation or Federal
Black Lung Liability (a "Recurrence Claim"), the provisions of this Section 4.4
shall govern. D-R shall promptly notify PCC of any Recurrence Claim and the
basis for its determination that such claim is a Recurrence Claim prior to
communicating its determination to any other person or entity. If PCC agrees
with D-R that such claim is a Recurrence Claim, such claim shall be deemed a
Workers' Compensation and Federal Black Lung Liability, and the rights and
obligations of the parties shall be as provided in this Article IV. If PCC
disagrees with D-R's position, the matter will be submitted to the appropriate
Governmental Authority for a determination, with each side being responsible for
its respective costs in such procedure. D-R recognizes that in the event the
employee who has filed the claim disagrees with the position of the parties with
respect to a Recurrence Claim, the employee may file a claim with the
appropriate Governmental Authority for a determination. In any such case, PCC
and D-R shall each have the right to defend its position, with each side bearing
the cost of its own defense.

                                       15

                                   ARTICLE V
                          EMPLOYEE RELATED LIABILITIES

     5.1. Employee Related Liabilities.

     In order to assist PCC with regard to the satisfaction of the Employee
Related Liabilities, PCC and D-R agree as follows:

     (a)  Administration. PCC or one or more of its Affiliates shall be solely
          responsible for administering the Employee Related Liabilities, making
          such determinations, awarding and denying such benefits, seeking such
          administrative and judicial rulings and remedies and taking all such
          other actions as PCC shall deem necessary or appropriate.

     (b)  Notices and Communication.

          (i)  PCC has the exclusive right to provide such notices as PCC deems
               necessary or appropriate to Employees or other beneficiaries
               regarding any matters related to the Employee Related Liabilities
               and to any third parties providing services or benefits related
               to the Employee Related Liabilities.

          (ii) In the event D-R or any of its Affiliates, Successors, Assigns,
               Lessees or Contractors receives any Communications that are
               related to the Employee Related Liabilities, D-R shall promptly
               send, and shall cause its Affiliates, Successors, Assigns,
               Lessees or Contractors promptly to send, such Communications to
               PCC or its designated Affiliate.

                                       16

          (iii) D-R agrees to provide on a monthly basis for a period of 12
               months following the Closing Date, the names and social security
               numbers of any non-Classified Employees hired by D-R or its
               Affiliates, Successors, Assigns, Lessees or Contractors and
               further agrees to provide, and shall cause its Affiliates,
               Successors, Assigns, Lessees or Contractors to provide, all
               information in its or their possession or under its or their
               control reasonably requested by PCC in order to administer and
               satisfy any Employee Related Liabilities.

     (c)  Litigation. PCC shall have the exclusive right to pursue and/or defend
          currently pending litigation, or to commence and/or defend future
          litigation, with respect to any issue related to any Employee Related
          Liabilities, as PCC shall deem necessary or appropriate.

                                   ARTICLE VI
                         Collective bargaining agreement

     6.1. Collective Bargaining Agreement Liabilities.

     In order to assist D-R with regard to the satisfaction of the Collective
Bargaining Agreement Liabilities, PCC and D-R agree as follows: (a) Panel Forms.

     (i)  Promptly after the Closing, PCC shall provide to D-R the existing
          panel forms and Contractor Interest Forms, if any, for the Classified
          Employees on Schedule 3.13(b) of the Acquisition Agreement who were
          laid off prior to the layoff mandated by Section 8.1(a) of the
          Acquisition Agreement ("Closing Layoff").

                                       17

     (ii) At the time of the Closing Layoff, PCC shall provide to such
          Classified Employees the forms that are necessary for such Classified
          Employees to provide their panel information in accordance with the
          Collective Bargaining Agreements and shall advise such Classified
          Employees to return those forms to PCC within the time allowed under
          the Collective Bargaining Agreements.

     (iii) Within a reasonable period of time after the panel forms must be
          returned under the Collective Bargaining Agreements, PCC shall provide
          all forms that have been returned to D-R.

     (iv) PCC shall notify D-R of any Classified Employee on Schedule 3.13(b) of
          the Acquisition Agreement who failed to submit a panel form as
          required under the Collective Bargaining Agreements, and PCC and D-R
          shall cooperate with each other to determine the final status of all
          Classified Employees on Schedule 3.13(b) of the Acquisition Agreement.

                                  ARTICLE VII
                               DISPUTE RESOLUTION

     Disputes under or alleged violations of this Agreement shall be handled in
accordance with the Dispute resolution procedure set forth in Article VII of the
Indemnification and Guaranty Agreement.

                                       18

                                  ARTICLE VIII
                                      TERM

     The term of this Agreement shall commence as of the Closing Date and shall
continue through the completed satisfaction of all of the Coal Act Liabilities,
Post-94 Retiree Medical Liabilities, Workers' Compensation and Federal Black
Lung Liabilities and the Employee Related Liabilities.

                                   ARTICLE IX
                                 MISCELLANEOUS

     9.1. Cooperation.

     (a)  To the extent permitted by Law and on a timely basis, D-R agrees to
          take any reasonable action, provide information and execute any
          appropriate documents, and shall cause its Affiliates, Successors,
          Assigns, Lessees or Contractors to take any reasonable action, provide
          information and execute any appropriate documents, that PCC reasonably
          requests in order to assist PCC with regard to the administration and
          satisfaction of the Coal Act Liabilities, Post-94 Retiree Medical
          Liabilities, Workers' Compensation and Federal Black Lung Liabilities
          and the Employee Related Liabilities. Upon written request by D-R, PCC
          shall reimburse D-R for costs above $10,000 per year that are
          reasonably incurred by D-R or its Affiliates as a result of actions
          taken by it or them under this Agreement. Prior to payment of such
          costs, PCC shall be entitled to receive a detailed invoice of such
          costs from D-R if so requested by PCC.

     (b)  PCC and D-R shall cooperate with each other to determine the timing
          and manner of transferring the Books and Records to D-R after the
          Closing, provided, however, that D-R or its Affiliates shall have
          immediate access to all such Books and Records while still in the
          possession of PCC (including, without limitation, access to the forms
          described in Section 6.1 hereof) and provided, further, that PCC or
          its Affiliates shall have reasonable access to, and shall be allowed

                                       19

          to copy at its sole expense, any Books and Records to which PCC
          reasonably believes it needs access or for which PCC reasonably
          believes it needs copies after the Closing.

     (c)  PCC, its Affiliates, successors and assigns shall have reasonable
          access to, and shall be allowed to copy at their sole expense, any
          title abstracts, title files, records, deeds or other title documents
          related to their real property interests. D-R, its Affiliates,
          successors and assigns shall have reasonable access to, and shall be
          allowed to copy at their sole expense, any title abstracts, title
          files, records, deeds or other title documents related to the Real
          Property.

     (d)  PCC or its Affiliates and D-R or its Affiliates will jointly work with
          the respective Commissioners of Revenue to prepare new tax assessments
          for the Real Property and PCC's retained real property. The parties
          have used commercially reasonable efforts to include the correct tax
          ticket numbers in an exhibit to be attached to and referenced in the
          Conveyance Deeds in order to identify the Real Property being
          transferred to D-R. To the extent it is later determined that
          different tax ticket numbers should have been included on or removed
          from the Conveyance Deeds, each party agrees to take any reasonable
          action, provide information and execute any appropriate documents, and
          shall cause its Affiliates, Successors, Assigns, Lessees or
          Contractors to take any reasonable action, provide information and
          execute any appropriate documents, that the other party reasonably
          requests in order to ensure that the Conveyance Deeds reference the
          tax ticket numbers associated with the actual Real Property
          transferred to D-R.

     9.2. Continuing Obligations.

     Any failure by PCC or by D-R or its Affiliates, Successors, Assigns,
Lessees, or Contractors to comply with any of their obligations in this
Agreement shall not relieve PCC or D-R of any of their Liabilities or
obligations under the Acquisition Agreement.

                                       20

     9.3. D-R Communication with Third Parties.

     Unless otherwise agreed to in writing by PCC or except as permitted
specifically by this Agreement and the Acquisition Agreement, neither D-R nor
any of its Affiliates, Successors, Assigns, Lessees or Contractors will make any
public statements or communicate with the UMWA, the United Mine Workers of
America Combined Benefit Fund, the 1992 UMWA Benefit Plan, the UMWA Pension
Plans, any beneficiary of any Employee Benefit Plan, or any other Person or
entity (collectively, "Third Parties") with respect to or concerning the Coal
Act Liabilities, Post-94 Retiree Medical Liabilities, Workers' Compensation and
Federal Black Lung Liabilities and the Employee Related Liabilities.
Notwithstanding the foregoing, in the event PCC fails to take such actions as
are necessary to comply with its obligations under the Acquisition Agreement and
this Agreement with respect to any of the Coal Act Liabilities, Post-94 Retiree
Medical Liabilities, Workers' Compensation and Federal Black Lung Liabilities or
the Employee Related Liabilities within a reasonable time after receiving notice
from D-R that attempts have been or are being made to obtain information
concerning or to impose any of the Coal Act Liabilities, Post-94 Retiree Medical
Liabilities, Workers' Compensation and Federal Black Lung Liabilities or the
Employee Related Liabilities on D-R or any of its Affiliates, Successors,
Assigns, Lessees or Contractors, D-R shall be permitted to communicate with the
appropriate Third Party regarding PCC's obligations with respect to such Coal
Act Liabilities, Post-94 Retiree Medical Liabilities, Workers' Compensation and
Federal Black Lung Liabilities or the Employee Related Liabilities. In addition,
notwithstanding anything in the foregoing to the contrary, in the event any
Third Party contacts D-R to inquire about PCC's or any of its Affiliates
obligations with respect to such Coal Act Liabilities, Post-94 Retiree Medical
Liabilities, Workers' Compensation and Federal Black Lung Liabilities or the
Employee Related Liabilities under this Agreement, D-R is permitted to direct
such Third Party to contact PCC for additional information.

                                       21

     9.4. Litigation Support.

     In the event and for as long as PCC is actively contesting or defending
against any action, suit, proceeding, hearing, investigation, charge, complaint,
claim or demand related to the Coal Act Liabilities, Post-94 Retiree Medical
Liabilities, Workers' Compensation and Federal Black Lung Liabilities and the
Employee Related Liabilities, D-R will, to the extent reasonable, cooperate, and
shall cause its Affiliates, Successors, Assigns, Lessees or Contractors to
cooperate, with PCC and its counsel in the contest or defense, make available
their personnel and provide such testimony and access to their books, documents
and records as shall be reasonably necessary in connection with the contest or
defense.

     9.5. Confidentiality.

     Except as otherwise provided in this Agreement, each party hereto covenants
and agrees to keep confidential the existence of this Agreement and the contents
of this Agreement at all times while any provision of this Agreement is in
force, unless and to the extent that a party shall be required to disclose the
same by generally accepted accounting principles, Law or judicial order or
decree or administrative regulation or order or in order to comply with its
obligations hereunder; provided, however, that any party that believes it may be
required to disclose this Agreement or any provisions hereof shall promptly
notify the other hereto in writing and afford such other party the opportunity
to determine whether disclosure is in fact required or if the scope of the
required disclosure can be reduced and provided further, however, that
notwithstanding anything in this Section 9.5 or in Section 9.3 hereof to the
contrary, without notifying the other party, any party may disclose the
existence and contents of this Agreement:

                                       22

     (a)  to any employees within the party's organization who need to know of
          this Agreement in order for the party to comply with its obligations
          hereunder, so long as such employees at the time of disclosure are
          required to comply with this Section 9.5;

     (b)  to D-R's Affiliates, Successors, Assigns, Lessees, Contractors and
          their employees, attorneys, accountants, consultants and lenders who
          need to know of the Agreement, so long as such entities and persons
          agree to comply with this Section 9.5;

     (c)  to any third-party contractor whose services the party requires in
          order for the party to comply with its obligations hereunder so long
          as such contractor is contractually obligated to comply with this
          Section 9.5;

     (d)  in the financial statements of the party as required by generally
          accepted accounting principles; or

     (e)  to any attorneys, accountants, consultants or lenders of a party for
          whom the party agrees to be responsible for the compliance herewith.

     9.6. Governing Law.

     This Agreement shall be governed by and construed in accordance with the
laws of the Commonwealth of Virginia, but without reference to the choice of law
provision thereof.

     9.7. Successors and Assigns.

     This Agreement and each party's respective rights hereunder may not be
assigned at any time except as expressly set forth herein without the prior
written consent of the other party, which consent shall not be unreasonably
withheld, except that PCC may assign its rights hereunder to any Affiliate of
PCC after the Closing Date without the consent of D-R and D-R may assign its
rights hereunder to any Affiliate of D-R after the Closing Date without the
consent of PCC.

                                       23

     9.8. Notices and Payments.

     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 (5) 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 party in the
manner provided by this Section 9.8:

If to PCC:                    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.

                                       24

If to D-R:                    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

                              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.

                                       25

     IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the
date first written above.

                                DICKENSON-RUSSELL COAL COMPANY, LLC

                                By: /s/ Anthony McGartland
                                ---------------------------------------------
                                Name: Anthony McGartland
                                Title: President

                                PITTSTON COAL COMPANY

                                 By: /s/ Michael D. Brown

                                 Name:  Michael D. Brown
                                 Title: Vice President - Development and
                                        Technical Resources

                                       26

                                                                     Exhibit 2.5

                            ASSET PURCHASE AGREEMENT

                                 BY AND BETWEEN

                              PITTSTON COAL COMPANY

                                       AND

                       PARAMONT COAL COMPANY VIRGINIA, LLC

                                October 29, 2002

                                TABLE OF CONTENTS

                                                                                                                Page
                                                                                                                ----

ARTICLE I DEFINITIONS.............................................................................................1
                                                                                                            
     1.1. Administrative Services Agreement.......................................................................1
     1.2. Affiliate...............................................................................................2
     1.3. Agreement...............................................................................................2
     1.4. Asset Sale Companies....................................................................................2
     1.5. Assignment and Assumption Agreements....................................................................2
     1.6. Assumed Liabilities.....................................................................................2
     1.7. Audited Closing Date Financial Statements...............................................................3
     1.8. Bills of Sale...........................................................................................3
     1.9. Books and Records.......................................................................................3
     1.10. Business...............................................................................................3
     1.11.  Buyer.................................................................................................3
     1.12. Buyer's Affiliates, Successors, Assigns, Lessees or Contractors........................................4
     1.13. Buyer Closing Certificate..............................................................................4
     1.14. Buyer's Ultimate Parent................................................................................4
     1.15. CERCLA.................................................................................................4
     1.16. CERCLIS................................................................................................4
     1.17. Closing................................................................................................4
     1.18. Closing Date...........................................................................................4
     1.19. Coal Act...............................................................................................5
     1.20. Coal Inventory.........................................................................................5
     1.21. COBRA..................................................................................................5
     1.22. Code...................................................................................................5
     1.23. Contaminated...........................................................................................5
     1.24. Contracts..............................................................................................5
     1.25. Controlled Group.......................................................................................6
     1.26. Cooperation Agreement..................................................................................6
     1.27. CPA Arbitrator.........................................................................................6
     1.28. Dispute................................................................................................6
     1.29. Employee...............................................................................................6
     1.30. Employee Benefit Plans.................................................................................6
     1.31. Engagement Letter......................................................................................6
     1.32. Environment............................................................................................7
     1.33. Environmental Laws.....................................................................................7
     1.34. Environmental Matter...................................................................................7
     1.35. Environmental or Response Action.......................................................................8
     1.36. EPA....................................................................................................8
     1.37. Equipment..............................................................................................9
     1.38. ERISA..................................................................................................9
     1.39. ERISA Affiliates.......................................................................................9
     1.40. Fiduciary..............................................................................................9
     1.41. Final VC 5 Cost........................................................................................9

                                                                                                          
     1.42. Fiscal Year Financial Statements.......................................................................9
     1.43. GAAP...................................................................................................9
     1.44. Governmental Authority................................................................................10
     1.45. Hazardous Substances..................................................................................10
     1.46. Health and Safety Requirements........................................................................10
     1.47. HIPAA.................................................................................................10
     1.48. Income Tax or Income Taxes............................................................................11
     1.49. Indemnification and Guaranty Agreement................................................................11
     1.50. Independent Surveyor..................................................................................11
     1.51. Intellectual Property.................................................................................11
     1.52. IRS...................................................................................................11
     1.53. Knowledge of PCC......................................................................................12
     1.54. Law...................................................................................................12
     1.55. Lien..................................................................................................12
     1.56. Liability.............................................................................................12
     1.57. Material Adverse Effect...............................................................................12
     1.58. MD&A Disclosure.......................................................................................13
     1.59. Medical Plans.........................................................................................13
     1.60. Mining Activities.....................................................................................13
     1.61. Mining Environmental Liabilities......................................................................13
     1.62. MSHA..................................................................................................13
     1.63. Multiemployer Plan....................................................................................14
     1.64. Operator..............................................................................................14
     1.65. Ordinary Course of Business...........................................................................14
     1.66. OSM...................................................................................................14
     1.67. Paramont Service Agreement............................................................................14
     1.68. Parts, Fuel and Supplies Inventory....................................................................14
     1.69. PBGC..................................................................................................14
     1.70. PCC...................................................................................................14
     1.71. PCC Bonds.............................................................................................14
     1.72. PCC Closing Certificate...............................................................................15
     1.73. PCC Group.............................................................................................15
     1.74. PCC Parent............................................................................................15
     1.75. Pension Plans.........................................................................................15
     1.76. Permits...............................................................................................15
     1.77. Permitted Liens.......................................................................................15
     1.78. Person................................................................................................15
     1.79. Post-Closing Period...................................................................................16
     1.80. Pre-Closing Period....................................................................................16
     1.81. Promissory Note.......................................................................................16
     1.82. Purchase Price........................................................................................16
     1.83. Purchased Assets......................................................................................16
     1.84. Qualified Plans.......................................................................................16

                                                                                                         
     1.85. RCRA..................................................................................................17
     1.86. Reclamation Laws......................................................................................17
     1.87. Related Persons.......................................................................................17
     1.88. Release...............................................................................................17
     1.89. Retained Liabilities..................................................................................17
     1.90. Security Agreement....................................................................................23
     1.91. SEC...................................................................................................23
     1.92. SMCRA.................................................................................................23
     1.93. Straddle Period.......................................................................................23
     1.94. Tax or Taxes..........................................................................................23
     1.95. Tax Return............................................................................................24
     1.96. VC 5..................................................................................................24
     1.97. VC 5 Calculation......................................................................................24
     1.98. VC 5 Costs............................................................................................24
     1.99. VC 5 Estimate.........................................................................................24
     1.100. VC 5 Revenue.........................................................................................25
     1.101. VDEQ.................................................................................................25
     1.102. VDMME................................................................................................25
     1.103. Virginia Entities....................................................................................25
     1.104. WARN Act.............................................................................................25
     1.105. Welfare Plans........................................................................................25
     1.106. Workers' Compensation Acts...........................................................................25

ARTICLE II PURCHASE AND SALE OF ASSETS...........................................................................26

     2.1. Transfer of Assets.....................................................................................26
     2.2. Calculation of VC 5 Adjustment Amount..................................................................26
     2.3. Bills of Sale, Assignment and Assumption Agreements and Other Documents................................28
     2.4. Assumption of Liabilities..............................................................................28
     2.5. Proration of Liabilities...............................................................................28
     2.6. Indemnification and Guaranty Agreement.................................................................28
     2.7. Cooperation Agreement..................................................................................28
     2.8. Administrative Services Agreement......................................................................29
     2.9. Paramont Service Agreement.............................................................................29
     2.10. Security Agreement....................................................................................29
     2.11. Additional Documents..................................................................................29
     2.12. Coal Inventory Adjustment.............................................................................29
     2.13. Allocation of Purchase Price and Assumed Liabilities..................................................30

ARTICLE III REPRESENTATIONS AND WARRANTIES OF PCC................................................................32

     3.1. Incorporation..........................................................................................32
     3.2. Execution, Delivery and Performance....................................................................33
     3.3. Authorization..........................................................................................34
     3.4. Absence of Changes.....................................................................................34

                                                                                                            
     3.5. Purchased Assets.......................................................................................37
     3.6. Intellectual Property..................................................................................38
     3.7. Permits and Environmental Compliance...................................................................38
     3.8. Reclamation Bonds......................................................................................41
     3.9. Contracts..............................................................................................42
     3.10. Litigation; Claims....................................................................................42
     3.11. Employee Benefits.....................................................................................43
     3.12. Employment Matters....................................................................................48
     3.13. No Broker.............................................................................................48
     3.14. Health and Safety Requirements........................................................................49
     3.15. Restrictions on Business Activities...................................................................49
     3.16. Powers of Attorney....................................................................................49
     3.17. Transactions With Affiliates..........................................................................49
     3.18. Absence of Certain Payments...........................................................................49
     3.19. Disclosure............................................................................................50

ARTICLE IV REPRESENTATIONS AND WARRANTIES OF BUYER...............................................................50

     4.1.   Organization.........................................................................................50
     4.2.   Execution, Delivery and Performance..................................................................50
     4.3.   Authorization........................................................................................51
     4.4.   No Broker............................................................................................52
     4.5.   Reclamation and Environmental Compliance.............................................................52
     4.6.   Financing............................................................................................52
     4.7.   Disclosure...........................................................................................52

ARTICLE V CERTAIN COVENANTS......................................................................................52

     5.1. Operation in Ordinary Course..........................................................................52
     5.2. Compliance with Law...................................................................................53
     5.3. Cooperation...........................................................................................53
     5.4. Notices and Consents..................................................................................54
     5.5. Publicity.............................................................................................54
     5.6. Permits; Replacement Bonds; Insurance and Guarantees; Other Filings...................................55
     5.7. Exclusivity...........................................................................................57
     5.8. Access................................................................................................58
     5.9. Notice of Developments................................................................................58
     5.10. Financial Statement Cooperation and Audits...........................................................58
     5.11. Coal Inventory.......................................................................................61
     5.12. Further Assurances...................................................................................61

ARTICLE VI CONDITIONS PRECEDENT TO CLOSING......................................................................62

     6.1.   Conditions Precedent to Each Party's Obligations....................................................62
     6.2.   Conditions Precedent to Obligations of Buyer........................................................63
     6.3.   Conditions Precedent to Obligations of PCC..........................................................65

ARTICLE VII CERTAIN TAX MATTERS.................................................................................67
                                                                                                          
     7.1.   Property Taxes......................................................................................67
     7.2.   Sales and Use Taxes.................................................................................68
     7.3.   Transfer Taxes......................................................................................68
     7.4.   Access for Tax Returns..............................................................................68

ARTICLE VIII COVENANTS REGARDING EMPLOYEES......................................................................69

     8.1. Employees.............................................................................................69

ARTICLE IX TERMINATION..........................................................................................69

     9.1. Termination...........................................................................................69
     9.2. Effect of Termination.................................................................................71

ARTICLE X MISCELLANEOUS.........................................................................................71

     10.1. Entire Agreement.....................................................................................71
     10.2. Amendment............................................................................................71
     10.3. Extension;  Waiver...................................................................................72
     10.4. Expenses.............................................................................................72
     10.5. Bulk Sales Waiver....................................................................................72
     10.6. Governing  Law.......................................................................................73
     10.7. Assignment...........................................................................................73
     10.8. Notices..............................................................................................73
     10.9. Counterparts; Headings...............................................................................74
     10.10. Interpretation; Construction........................................................................75
     10.11. Severability........................................................................................75
     10.12. No Reliance.........................................................................................75
     10.13. Retention of and Access to Records..................................................................75
     10.14. Arbitration.........................................................................................76

                                    EXHIBITS
                                    --------
                   
Exhibit A             Outline of Administrative Services Agreement
Exhibit B             Assignment and Assumption Agreements
Exhibit C             Bills of Sale
Exhibit D             Buyer Closing Certificate
Exhibit E             Cooperation Agreement
Exhibit F             Paramont Service Agreement
Exhibit G             Engagement Letter
Exhibit H             Indemnification and Guaranty Agreement
Exhibit I             PCC Closing Certificate
Exhibit J             Opinion of Counsel to PCC
Exhibit K             Opinion of Counsel to Buyer

                                    SCHEDULES
                                    ---------
                       
Schedule 1.4               Asset Sale Companies
Schedule 1.6               Assumed Liabilities
Schedule 1.20              Coal Inventory Locations
Schedule 1.24              Contracts of Asset Sale Companies
Schedule 1.37(a)           Equipment Owned by Asset Sale Companies
Schedule 1.37(b)           Equipment Leased by Asset Sale Companies
Schedule 1.51(a)           Intellectual Property Owned by the Asset Sale Companies
Schedule 1.51(b)           Intellectual Property Leased by the Asset Sale Companies
Schedule 1.53              Knowledge of PCC
Schedule 1.61              Mining Environmental Liabilities
Schedule 1.68              Parts, Fuel and Supplies Inventory
Schedule 1.76              Permits
Schedule 1.77              Permitted Liens
Schedule 1.89(a)           Retained Liabilities
Schedule 1.89(v)           Excluded Contracts
Schedule 1.96              VC 5
Schedule 2.12(b)           Independent Survey of the Coal Inventory-Principles and Format
Schedule 3.1               Foreign States
Schedule 3.2               Conflicts
Schedule 3.4               Absence of Changes
Schedule 3.5               Purchased Assets Exceptions
Schedule 3.6               Intellectual Property Exceptions
Schedule 3.7               Permits and Environmental Compliance
Schedule 3.8               PCC Bonds
Schedule 3.9(b)            Contract Exceptions
Schedule 3.9(c)            Consents
Schedule 3.10              Litigation; Claims
Schedule 3.11(a)           Employee Benefit Plans
Schedule 3.11(d)           Plan Administration
Schedule 3.11(f)           Severance Entitlements
Schedule 3.16              Powers of Attorney
Schedule 3.17              Transactions with Affiliates
Schedule 5.4(a)            PCC Consents
Schedule 5.4(b)            Buyer Consents
Schedule 5.6               PCC Guaranties
Schedule 5.10(a)           Excluded Business
Schedule 6.1(e)(i)         PCC Material Consents
Schedule 6.1(e)(ii)        Buyer Material Consents
Schedule 8.1               Asset Sale Companies with pre-Closing termination
                           Employees

                            ASSET PURCHASE AGREEMENT

     THIS ASSET PURCHASE AGREEMENT is made as of the 29th day of October,  2002,
by and between  PITTSTON  COAL  COMPANY,  a Delaware  corporation  ("PCC"),  and
Paramont  Coal  Company  virginia,  LLC, a Delaware  limited  liability  company
("Buyer").

                                    RECITALS

     WHEREAS,  PCC owns, directly or indirectly,  all of the outstanding capital
stock of the corporations listed on Schedule 1.4 (the "Asset Sale Companies");
     WHEREAS, PCC desires to cause to be sold and assigned, and Buyer desires to
purchase and assume,  certain of the assets and certain of the  Liabilities  (as
hereinafter defined) of the Asset Sale Companies;
     WHEREAS,  PCC desires to cause the Asset Sale  Companies to retain  certain
assets and certain Liabilities;
     NOW,  THEREFORE,  in consideration of the mutual covenants,  conditions and
agreements set forth herein and for other good and valuable  consideration,  the
receipt and  sufficiency of which are hereby  acknowledged,  PCC and Buyer agree
that:

                                    ARTICLE I
                                   DEFINITIONS

     When used in this  Agreement,  the following  terms shall have the meanings
specified:

     1.1. Administrative Services Agreement.

     "Administrative Services Agreement" shall mean the agreement by and between
PCC and Buyer, an outline of which is attached hereto Exhibit A.

                                       1

     1.2. Affiliate.

     "Affiliate" shall mean, with respect to a specified Person,  another Person
that directly, or indirectly through one or more intermediaries,  Controls or is
Controlled by or is under common  Control with the Person  specified.  "Control"
shall mean the  possession,  directly or  indirectly,  of the power to direct or
cause the direction of the management or policies of a Person,  whether  through
the ownership of voting  securities,  by contract or otherwise.  For purposes of
this  Agreement,  none of Dominion  Terminal  Associates or any of its partners,
other than Pittston Coal Terminal  Corporation,  shall be deemed an Affiliate of
PCC or any of its Affiliates.

     1.3. Agreement.

     "Agreement"  shall mean this Asset  Purchase  Agreement,  together with the
Exhibits and Schedules  attached hereto,  which are incorporated into this Asset
Purchase  Agreement by this  reference,  as the same may be amended from time to
time in accordance with the terms hereof.

     1.4. Asset Sale Companies.

     "Asset Sale  Companies"  shall have the meaning given to it in the Recitals
to this  Agreement.  The term "Asset Sale  Company"  shall mean one of the Asset
Sale Companies.

     1.5. Assignment and Assumption Agreements.

     "Assignment  and  Assumption  Agreements"  shall  mean the  assignment  and
assumption agreements substantially in the form of Exhibit B attached hereto.

     1.6. Assumed Liabilities.

     "Assumed  Liabilities"  shall  mean  all  Liabilities  of  the  Asset  Sale
Companies listed on Schedule 1.6.

                                       2

     1.7. Audited Closing Date Financial Statements.

     "Audited  Closing  Date  Financial  Statements"  shall have the meaning set
forth in Section 5.10 hereof.

     1.8. Bills of Sale.

     "Bills of Sale" shall mean the bills of sale  substantially  in the form of
Exhibit C attached hereto.

     1.9. Books and Records.

     "Books and Records" shall mean the original or true and complete  copies of
all of the books and  records  of the Asset  Sale  Companies  pertaining  to the
Purchased Assets, including but not limited to, customer lists, employee records
for those  Employees  employed by Buyer on or immediately  following the Closing
Date,  purchase  orders and  invoices,  sales  orders and sales order log books,
credit and collection records, plats, drawings and specifications, environmental
and mining reports and studies,  correspondence  and miscellaneous  records with
respect to customers and supply sources,  lessors and lessees,  maps, core logs,
engineering  data,   equipment   maintenance   records  and  all  other  general
correspondence,  records,  books and files owned by any Asset Sale Company,  but
excluding  any and all Tax Returns,  books and records  relating to the Retained
Liabilities and corporate records of the Asset Sale Companies.

     1.10. Business.

     "Business"  shall mean the coal mining and sale  business  conducted by the
Asset Sale Companies using the Purchased Assets.

     1.11. Buyer.

     "Buyer"  shall  have  the  meaning  given  to it in the  preamble  of  this
Agreement.

                                       3

     1.12. Buyer's Affiliates, Successors, Assigns, Lessees or Contractors.

     "Buyer's  Affiliates,  Successors,  Assigns,  Lessees or Contractors" shall
mean Buyer's Affiliates, Buyer's contractual successors and assigns, and lessees
and contractors  who, as part of a contractual  arrangement with Buyer or one of
its Affiliates,  offer employment to the current or former Employees of an Asset
Sale Company.

     1.13. Buyer Closing Certificate.

     "Buyer   Closing   Certificate"   shall  mean  the   certificate  of  Buyer
substantially in the form of Exhibit D attached hereto.

     1.14. Buyer's Ultimate Parent.

     "Buyer's  Ultimate  Parent"  shall mean  Alpha  Natural  Resources,  LLC, a
Delaware limited liability company.

     1.15. CERCLA.

     "CERCLA" shall have the meaning set forth in Section 1.33 hereof.

     1.16. CERCLIS.

     "CERCLIS" shall have the meaning set forth in Section 3.7 hereof.

     1.17. Closing.

     "Closing" shall mean the closing of the  transactions  contemplated by this
Agreement  beginning  at 10:00 a.m.,  local time,  on the Closing  Date,  at the
offices  of Hunton &  Williams,  Riverfront  Plaza,  East  Tower,  951 East Byrd
Street, Richmond, Virginia 23219.

     1.18. Closing Date.

     "Closing  Date"  shall  mean  November  30,  2002 or such other date as the
parties may  mutually  agree in writing,  subject to the  provisions  of Section
5.10(a) hereof.

                                       4

     1.19. Coal Act.

     "Coal Act" shall mean the Coal Industry  Retiree Health Benefit Act of 1992
as amended through the Closing Date (codified at Subtitle J of the Code).

     1.20. Coal Inventory.

     "Coal  Inventory"  shall  mean  the coal  stockpile  inventory  and  loaded
shipments in transit to a pier or at a pier owned by the Asset Sale Companies at
the locations listed on Schedule 1.20.

     1.21. COBRA.

     "COBRA" shall mean the Consolidated  Omnibus Budget  Reconciliation  Act of
1986, as amended.

     1.22. Code.

     "Code" shall mean the Internal Revenue Code of 1986, as amended, and, where
appropriate, any predecessor or successor provisions of Law, and all regulations
thereunder.

     1.23. Contaminated.

     "Contaminated"  shall mean the presence of one or more Hazardous Substances
in such quantity or concentration as to: (i) violate any Environmental Law; (ii)
require disclosure to any Governmental  Authority;  (iii) require remediation or
removal;  or (iv)  interfere  with or  prevent  the use of any of the  Purchased
Assets as customarily intended.

     1.24. Contracts.

     "Contracts" shall mean the written contracts, agreements, personal and real
property  leases,  relationships  and  commitments,  of the Asset Sale Companies
listed on Schedule 1.24.
                                       5

     1.25. Controlled Group.

     "Controlled Group" shall have the meaning set forth in Codess.1563.

     1.26. Cooperation Agreement.

     "Cooperation  Agreement"  shall  mean the  agreement  by and  among the PCC
Parent, PCC and Buyer substantially in the form of Exhibit E attached hereto.

     1.27. CPA Arbitrator.

     "CPA Arbitrator" shall have the meaning set forth in Section 2.2(b) hereof.

     1.28. Dispute.

     "Dispute" shall have the meaning set forth in Section 10.14 hereof.

     1.29. Employee.

     "Employee"  shall mean any Person (i)  employed by and  rendering  personal
services for an Asset Sale  Company or (ii)  receiving  short-term  or long-term
disability  benefits from an Asset Sale Company under an Employee  Benefit Plan.
The term "current and former  Employees"  shall mean any Persons who fall within
the term Employee at any time prior to the Closing Date.

     1.30. Employee Benefit Plans.

     "Employee  Benefit  Plans" shall have the meaning set forth in Section 3.11
hereof.

     1.31. Engagement Letter.

     "Engagement  Letter"  shall  mean the  engagement  letter by and among PCC,
Buyer and KPMG LLP substantially in the form of Exhibit G attached hereto.

                                       6

     1.32. Environment.

     "Environment" shall mean surface or ground water, water supply, soil or the
ambient air.

     1.33. Environmental Laws.

     "Environmental Laws" shall mean collectively,  all federal, foreign, state,
and  local  Laws  in  effect  as of the  Closing  Date  that  relate  to (a) the
prevention,  abatement or  elimination  of pollution,  or the  protection of the
environment,  or of  natural  resources,  including,  without  limitation,  Laws
applicable to coal mining operations or related activities,  (b) the generation,
handling, treatment, storage, disposal or transportation of waste materials, (c)
the  regulation  of or  exposure to  Hazardous  Substances,  including,  without
limitation, the Comprehensive  Environmental Response Compensation and Liability
Act, 42 U.S.C.ss.ss.9601 et. seq.  ("CERCLA"),  the Solid Waste Disposal Act, as
amended  by  the  Resource   Conservation  and  Recovery  Act,  as  amended,  42
U.S.C.ss.ss.6901  et. seq. ("RCRA"),  the Clean Air Act, 42 U.S.C.ss.ss.7401 et.
seq., the Clean Water Act, 33  U.S.C.ss.ss.1251  et. seq., the Toxic  Substances
Control Act, 15 U.S.C.ss.ss.2601  et. seq., the Emergency Planning and Community
Right to Know Act, 42 U.S.C.  ss.ss.11001  et.  seq.,  and any  foreign,  state,
county, municipal, or local statutes, Laws or ordinances similar or analogous to
the federal statutes listed in this sentence.

     1.34. Environmental Matter.

     "Environmental  Matter" shall mean any  assertion of a violation,  claim or
directive by any Governmental Authority or any other Person for personal injury,
damage to property or the Environment,  nuisance, contamination or other adverse
effects on the  Environment,  or for damages or  restrictions  resulting from or
related  to (i) the  operation  of  PCC's  or its  Affiliates'  business  or any
predecessor  or the  ownership,  use or operation at or on any real  property or

                                       7

other  assets  owned,  operated  or  leased  by  PCC or  its  Affiliates  or any
predecessor;  or (ii) the  existence  or the  continuation  of a Release  of, or
exposure  to, or the  transportation,  storage  or  treatment  of any  Hazardous
Substance  into the  Environment  from or related to any real property or assets
currently or formerly owned,  operated or leased by PCC or its Affiliates or any
activities on or operations thereof.

     1.35. Environmental or Response Action.

     "Environmental  or Response  Action" shall mean all actions required (i) to
clean up, remove,  treat or in any other way address any Hazardous  Substance or
other substance;  (ii) to prevent the Release or threat of Release,  or minimize
the further Release of any Hazardous Substance or other substance so it does not
migrate or endanger or  threaten  to  endanger  public  health or welfare or the
indoor  or  outdoor  Environment;  (iii) to  perform  pre-remedial  studies  and
investigations or post-remedial monitoring and care; (iv) to bring facilities on
any real property currently or formerly owned,  operated or leased by PCC or its
Affiliates and the  facilities  located and  operations  conducted  thereon into
compliance with all Environmental  Laws and Reclamation Laws and all permits and
other  authorizations,  and the filing of all notifications and reports required
under any  Environmental  Laws and  Reclamation  Laws; or (v) for the purpose of
environmental  protection  of any real  property  currently  or formerly  owned,
operated or leased by PCC or its Affiliates.

     1.36. EPA.

     "EPA" shall have the meaning set forth in Section 3.7 hereof.

                                       8

     1.37. Equipment.

     "Equipment"  shall  mean  the  tangible  machinery,   vehicles,  equipment,
furniture,  fixtures,  furnishings,  trailers,  tools,  parts and other personal
property owned or leased by the Asset Sale Companies listed on Schedules 1.37(a)
and 1.37(b), respectively.

     1.38. ERISA.

     "ERISA" shall mean the Employee  Retirement Income Security Act of 1974, as
amended.

     1.39. ERISA Affiliates.

     "ERISA  Affiliates"  shall  mean any  trade  or  business  (whether  or not
incorporated)  that is part of the same  Controlled  Group as,  or under  common
control with, or part of an affiliated service group that includes, PCC and each
of the Asset Sale Companies  within the meaning of Section  414(b),  (c), (m) or
(o) of the Code.

     1.40.  Fiduciary.

     "Fiduciary" shall have the meaning set forth in ERISA ss.3(21).

     1.41. Final VC 5 Cost.

     "Final  VC 5 Cost"  shall  have the  meaning  set forth is  Section  2.2(b)
hereof.

     1.42. Fiscal Year Financial Statements.

     "Fiscal  Year  Financial  Statements"  shall have the  meaning set forth in
Section 5.10(a).

     1.43. GAAP.

     "GAAP" shall mean United States generally accepted accounting principles as
in effect from time to time.

                                       9

     1.44. Governmental Authority.

     "Governmental   Authority"   shall   mean   any   governmental,   judicial,
legislative,  executive,  administrative  or regulatory  authority of the United
States, or of any foreign, state or local government or any subdivision, agency,
commission, office, authority or bureau thereof or any quasi-governmental entity
or authority of any nature.

     1.45. Hazardous Substances.

     "Hazardous  Substances" shall mean any substance,  chemical,  waste, solid,
material,  pollutant  or  contaminant  that is defined or listed as hazardous or
toxic under any applicable  Environmental  Laws. Without limiting the generality
of the foregoing it shall also include any radioactive  material,  including any
naturally-occurring  radioactive material, and any source, special or by-product
material as defined in 42 U.S.C. 2011, et seq., any amendments or authorizations
thereof,  any  asbestos-containing  materials  in any  form  or  condition,  any
polychlorinated  biphenyls  in any  form or  condition,  radioactive  waste,  or
natural  gas,  natural  gas  liquids,  liquified  natural  gas,  condensate,  or
derivatives or byproducts  thereof or oil and petroleum  products or by products
and constituents thereof.

     1.46. Health and Safety Requirements.

     "Health and Safety Requirements" shall mean all applicable federal,  state,
local and foreign Laws concerning public health and safety and worker health and
safety each as in effect as of the Closing Date, other than Environmental  Laws.

     1.47. HIPAA.

     "HIPAA" shall mean the Health Insurance  Portability and Accountability Act
of 1996, as amended, and all rules and regulations thereunder.

                                       10

     1.48. Income Tax or Income Taxes.

     "Income  Tax or "Income  Taxes"  shall mean any Tax based on or measured by
net income.

     1.49. Indemnification and Guaranty Agreement.

     "Indemnification  and Guaranty  Agreement"  shall mean the agreement by and
among PCC Parent,  PCC, Buyer and Buyer's  Ultimate Parent  substantially in the
form of Exhibit H attached hereto.

     1.50. Independent Surveyor.

     "Independent  Surveyor" shall have the meaning set forth in Section 2.12(b)
hereof.

     1.51. Intellectual Property.

     "Intellectual Property" shall mean the trademarks,  service marks, patents,
copyrights  (including  any  registrations,  applications,  licenses  or  rights
relating  to  any  of  the  foregoing),   technology,   logos,   trade  secrets,
confidential information related to the Purchased Assets, inventions,  know-how,
designs, technical data, drawings, customer and supplier lists, pricing and cost
information,  or computer  programs and  processes  and all goodwill  associated
therewith and rights thereunder,  remedies against  infringements  thereof,  and
rights to  protection of interests  therein under the laws of all  jurisdictions
owned or  licensed  or leased by the Asset Sale  Companies  listed on  Schedules
1.51(a)  and  1.51(b),   respectively,   including,   without  limitation,   the
trademarks, service marks, logos or other rights related to the name "Paramont."

     1.52. IRS.

     "IRS"  shall  mean  the  United  States  Internal  Revenue  Service.

                                       11

     1.53. Knowledge of PCC.

     "Knowledge of PCC" shall mean, for the individuals listed on Schedule 1.53,
any such individual's  actual knowledge and what any such individual should have
known  after  reasonable  inquiry  within  the  scope of that  individual's  job
responsibilities.

     1.54. Law.

     "Law" and  "Laws"  shall  mean any  applicable  United  States or  foreign,
federal, state, local or other law or governmental  requirement of any kind, and
the rules, regulations and orders promulgated thereunder.

     1.55. Lien.

     "Lien"  shall  mean  any  lien,  encumbrance,   mortgage,   charge,  claim,
restriction, pledge, security interest or imposition of any kind.

     1.56. Liability.

     "Liability"  shall  mean any  liability  or  obligation  (whether  known or
unknown, whether asserted or unasserted, whether absolute or contingent, whether
liquidated  or  unliquidated  and whether due or to become due),  including  any
liability for Taxes. Liabilities shall mean one or more items of Liability.

     1.57. Material Adverse Effect.

     "Material  Adverse Effect" shall mean any event,  change or occurrence that
individually,  or together  with any other event,  change or  occurrence,  has a
material adverse impact on the Business, taken as a whole, without regard to the
duration of such material adverse impact.

                                       12

     1.58. MD&A Disclosure.

     "MD&A Disclosure"  shall mean any "Management's  Discussion and Analysis of
Financial Condition and Results of Operations"  disclosure (required by Item 303
of Regulation S-K promulgated by the SEC (or any successor rule or regulation of
the SEC)) to be  prepared  for the  fiscal  years  covered  by the  Fiscal  Year
Financial  Statements  and  the  period  covered  by the  Audited  Closing  Date
Financial Statements.

     1.59. Medical Plans.

     "Medical Plans" shall mean any and all benefit plans that provide  medical,
vision  and  dental  benefits  to  current  or  former  Employees  sponsored  or
maintained  by or on behalf  of, or for the  benefit  of,  PCC or any Asset Sale
Company,  including  the  Comprehensive  Medical  Expense  Benefits  Plan of The
Pittston Company and Its Subsidiaries.

     1.60. Mining Activities.

     "Mining Activities" shall mean those activities of the Asset Sale Companies
that have taken place on or through the use of the Purchased Assets that involve
surface,  underground  and auger mining,  processing or transporting of coal and
the handling of coal by-products.

     1.61. Mining Environmental Liabilities.

     "Mining Environmental Liabilities" shall mean Liabilities that relate to or
arise from both of the following:  (i) any of the Hazardous Substances set forth
on Schedule 1.61 and (ii) an Environmental  Matter or Environmental and Response
Action  associated  with  Mining  Activities  to the  extent  that  such  Mining
Activities  conformed  to industry  standard  practices  at the time such Mining
Activities were conducted.

     1.62. MSHA.

     "MSHA"  shall have the  meaning  set forth in  Section  3.7  hereof.

                                       13

     1.63. Multiemployer Plan.

     "Multiemployer  Plan"  shall have the  meaning  set forth in  Section  3.11
hereof.

     1.64. Operator.

     "Operator" shall have the meaning set forth in Section 3.7 hereof.

     1.65. Ordinary Course of Business.

     "Ordinary  Course of  Business"  means  the  ordinary  course  of  business
consistent with past custom and practice (including with respect to quantity and
frequency).

     1.66. OSM.

     "OSM"  shall  have the  meaning  set forth in  Section  3.7  hereof.

     1.67. Paramont Service Agreement.

     "Paramont Service  Agreement" shall mean the agreement by and between Buyer
and PCC,  substantially in the form of Exhibit F attached hereto.

     1.68. Parts, Fuel and Supplies Inventory.

     "Parts,  Fuel and Supplies Inventory" shall include the categories of items
listed on Schedule 1.68.

     1.69. PBGC.

     "PBGC" shall mean the Pension  Benefits  Guaranty  Corporation.

     1.70. PCC.

     "PCC" shall have the meaning given to it in the preamble to this Agreement.

     1.71. PCC Bonds.

     "PCC  Bonds"  shall have the meaning  set forth in Section  3.7(g)  hereof.

                                       14

     1.72. PCC Closing Certificate.

     "PCC Closing  Certificate"  shall mean the certificate of PCC substantially
in the form of Exhibit I attached hereto.

     1.73. PCC Group.

     "PCC Group"  shall have the meaning  set forth in Section  1.89(j)  hereof.

     1.74. PCC Parent.

     "PCC Parent" shall mean The Pittston Company, a Virginia corporation.

     1.75. Pension Plans.

     "Pension  Plans"  shall have the meaning set forth in Section  3.11 hereof.

     1.76. Permits.

     "Permits" shall mean the written permits, licenses,  orders,  certificates,
registrations,  approvals  and similar  rights held by the Asset Sale  Companies
listed on Schedule 1.76.

     1.77. Permitted Liens.

     "Permitted  Liens" shall mean those Liens  affecting the  Purchased  Assets
that are listed on Schedule 1.77.

     1.78. Person.

     "Person"  shall  mean  any  individual,  corporation,  general  or  limited
partnership,   limited  liability  company,   joint  venture,   estate,   trust,
association,   organization,   labor  union  or  other  entity  or  Governmental
Authority.

                                       15

     1.79. Post-Closing Period.

     "Post-Closing  Period" shall mean any taxable  period  beginning  after the
Closing Date.

     1.80. Pre-Closing Period.

     "Pre-Closing  Period" shall mean any taxable period ending on or before the
Closing Date.

     1.81. Promissory Note.

     "Promissory  Note" shall mean the secured  promissory note made by Buyer in
favor of PCC in the amount  determined  in  accordance  with Section 2.12, to be
dated as of the Closing Date, in a form to be agreed upon by the parties hereto.

     1.82. Purchase Price.

     "Purchase  Price" shall mean the cash amount of  $10,565,000  (which amount
shall include $620,000 for the Parts,  Fuel and Supplies  Inventory,  $1,640,000
for the Coal  Inventory,  $55,000 for one continuous  miner and $250,000 for one
helicopter),  plus the Promissory  Note, plus the VC 5 Estimate,  subject to the
adjustment provided for in Section 2.2(b).

     1.83. Purchased Assets.

     "Purchased  Assets" shall mean all right,  title and interest in and to the
Coal Inventory, Parts, Fuel and Supplies Inventory, Equipment, Books and Records
and  Intellectual  Property  of the Asset Sale  Companies  and the rights of the
Asset Sale  Companies  with  respect to the  Contracts  and the  Permits.

     1.84. Qualified Plans.

     "Qualified  Plans" shall have the meaning set forth in Section 3.11 hereof.

                                       16

     1.85. RCRA.

     "RCRA"  shall have the  meaning  set forth in Section  1.33  hereof.

     1.86. Reclamation Laws.

     "Reclamation Laws" shall mean all federal,  state and local Laws, as now or
hereafter  in  effect,   relating  to  coal  mining  reclamation  activities  or
Liabilities.  For purposes of this definition,  "coal mining" shall include, but
not be limited to, any  activities  defined under the Surface Mining Control and
Reclamation Act of 1977, as amended,  as "surface coal mining operations."

     1.87. Related Persons.

     "Related  Persons"  shall mean  related  persons as that term is defined in
Section  9701(c)(2) of the Coal Act, except that it shall not include successors
in interest.

     1.88. Release.

     "Release" shall mean any spilling,  leaking,  pumping,  pouring,  emitting,
emptying,  discharging,  injecting,  escaping,  dumping  or  disposing  into the
Environment of Hazardous Substances.

     1.89. Retained Liabilities.

     "Retained Liabilities" shall mean all of the Liabilities of each Asset Sale
Company, other than the Assumed Liabilities,  including, without limitation, the
following:

          (a)  the Liabilities listed on Schedule 1.89(a);

          (b)  all Liabilities  arising under applicable  Workers'  Compensation
               Acts for or based  upon the  employment  of (i) the  current  and
               former Employees of the Asset Sale Companies who are not hired by
               Buyer or one of Buyer's Affiliates,  Successors, Assigns, Lessees
               or Contractors,  and (ii) the current and former Employees of the

                                       17

               Asset  Sale  Companies  who are hired by Buyer or one of  Buyer's
               Affiliates, Successors, Assigns, Lessees or Contractors, but only
               with  respect  to claims  where the date of injury or the date of
               last injurious exposure occurred prior to the date such Employees
               began working for Buyer or one of Buyer's Affiliates, Successors,
               Assigns, Lessees or Contractors;

          (c)  all Liabilities  arising under the federal black lung Laws for or
               based upon the employment of (i) the current and former Employees
               of the Asset Sale  Companies who are not hired by Buyer or one of
               Buyer's Affiliates,  Successors,  Assigns, Lessees or Contractors
               and (ii) the  current  and  former  Employees  of the Asset  Sale
               Companies  who are hired by Buyer or one of  Buyer's  Affiliates,
               Successors, Assigns, Lessees or Contractors, to the extent and in
               the amounts  provided in the  federal  black lung Laws,  but only
               until  such  time  as  Buyer  or  one  of   Buyer's   Affiliates,
               Successors,   Assigns,   Lessees  or   Contractors   becomes  the
               responsible  operator  under the federal black lung Laws for such
               Employees;

          (d)  all  Liabilities for medical,  dental,  vision and other benefits
               and expenses  covered under the Medical Plans  including  related
               insurance  costs or premiums for or based upon the  employment of
               (i) the current and former  Employees of the Asset Sale Companies
               who  are  not  hired  by  Buyer  or  one of  Buyer's  Affiliates,
               Successors,  Assigns, Lessees or Contractors, (ii) the current or
               former  Employees  of the Asset Sale  Companies  who are hired by
               Buyer or one of Buyer's Affiliates,  Successors, Assigns, Lessees
               or Contractors,  but only with respect to the period prior to the
               date such  Employees  began  working  for Buyer or one of Buyer's
               Affiliates, Successors, Assigns, Lessees or Contractors and (iii)
               in either case, all such Liabilities under COBRA, HIPAA and other
               Laws,  including  all  Liabilities  of a Fiduciary  for breach of
               fiduciary  duty  or  any  other  failure  to  act  or  comply  in
               connection with the administration of such Medical Plans;

                                       18

          (e)  unless  such  Liabilities  are  otherwise  retained  pursuant  to
               Section  1.89(j) hereof,  all Liabilities  arising under or based
               upon the Employee  Benefit Plans  sponsored or maintained  by, on
               behalf of or for the  benefit of such  Asset Sale  Company or its
               Employees or in which such Asset Sale Company participated (other
               than the Medical Plans),  including all Liabilities  arising from
               or  related  to  the  termination  thereof  or  Liabilities  of a
               Fiduciary  for breach of fiduciary  duty or any other  failure to
               act or comply in connection with the administration or investment
               of the assets of any such Employee Benefit Plan;

          (f)  all  Liabilities  for salaries,  wages,  bonuses,  vacation days,
               personal days and similar forms of leave or  compensation  for or
               based upon the employment of (i) the current and former Employees
               of the Asset Sale  Companies who are not hired by Buyer or one of
               Buyer's Affiliates,  Successors, Assigns, Lessees or Contractors,
               and (ii) the  current  and  former  Employees  of the Asset  Sale
               Companies  who are hired by Buyer or one of  Buyer's  Affiliates,
               Successors,  Assigns,  Lessees or Contractors,  that are accrued,
               due or earned up to the date such  Employees  began  working  for
               Buyer or one of Buyer's Affiliates,  Successors, Assigns, Lessees
               or Contractors and for which such Employees are eligible;

          (g)  all Liabilities for terminated  contract miner performance escrow
               amounts (including interest) accrued up to the Closing Date;

          (h)  all  Liabilities  for accounts  payable for which goods have been
               shipped and delivered  (whether or not invoiced) or services have
               been performed (whether or not invoiced) and related notes, trade
               payables and earned  royalties,  to the extent that an Asset Sale
               Company received a benefit before the Closing Date;

                                       19

          (i)  all  Liabilities  for claims of any  current or former  Employees
               pursuant to the WARN Act arising out of acts or  omissions of the
               Asset Sale Companies prior to and including the Closing Date;

          (j)  (1) all  Liabilities,  if any, of any Asset Sale  Company and its
               Related  Persons  (collectively,  the "PCC Group") under the Coal
               Act, and (2) all Liabilities,  if any, of the PCC Group under any
               post-Closing  amendments  to the Coal  Act for (i)  beneficiaries
               eligible  under the Coal Act who are  assigned to a member of the
               PCC Group or for whom a member of the PCC  Group is  required  to
               provide or pay for medical benefits  pursuant to Sections 9711 or
               9712 of the Coal Act or (ii) death benefit premiums or unassigned
               beneficiary premiums (as those terms are used in Sections 9704(c)
               and 9704(d) of the Coal Act) for beneficiaries eligible under the
               Coal Act, that are assessed  against any member of the PCC Group;
               provided,   for  the  --------   avoidance  of  doubt,  that  the
               Liabilities  retained  pursuant to (1) and (2) above shall not be
               affected by Buyer or any of its Affiliates being identified under
               the  Coal  Act  or  any  post-Closing  amendments  thereto  as  a
               successor,  successor in interest or "Related  person"  under the
               Coal Act or any post-Closing  amendments thereto to any member of
               the PCC  Group  solely  as a result of  Buyer's  purchase  of the
               Purchased Assets;

          (k)  unless  such  Liabilities  are  otherwise  retained  pursuant  to
               Section 1.89(j) hereof,  all  Liabilities,  if any, of such Asset
               Sale  Companies  for retiree  medical  benefits  with  respect to
               current or former Employees of such Asset Sale Company (and their
               eligible  dependents and  beneficiaries)  who, on or prior to the
               Closing  Date,  satisfy  the  requirements  for  retiree  medical
               benefits under any Employee Benefit Plan in which such Asset Sale
               Company participates;

                                       20

          (l)  all  Liabilities  relating  to  assets  held in trust  under  any
               Qualified  Plan  sponsored or maintained  by, on behalf of or for
               the  benefit of such Asset Sale  Company or its current or former
               Employees  or in  which  such  Asset  Sale  Company  participates
               arising or relating to the period prior to the Closing Date;

          (m)  all inter-company  indebtedness owed by any Asset Sale Company to
               the PCC Parent or any of the PCC Parent's Affiliates;

          (n)  all  Liabilities  arising out of or in connection with compliance
               prior to the  Closing  Date with  Health and Safety  Requirements
               pertaining to the Purchased Assets,  and all Liabilities  arising
               out of or in connection with compliance with all Laws relating to
               equal  employment  opportunity,  employment,  or labor  relations
               concerning  the  employment  of any  Employee  by the Asset  Sale
               Companies,  or relating to any other action taken or not taken by
               the Asset Sale  Companies  concerning  (i) the current and former
               Employees of the Asset Sale  Companies who are not hired by Buyer
               or one of Buyer's  Affiliates,  Successors,  Assigns,  Lessees or
               Contractors,  and (ii) the  current and former  Employees  of the
               Asset  Sale  Companies  who are hired by Buyer or one of  Buyer's
               Affiliates, Successors, Assigns, Lessees or Contractors, but only
               with  respect to matters  arising out of the  employment  of such
               Employees by the Asset Sale Companies;

          (o)  except as set forth on  Schedule  1.6,  all  Liabilities  for the
               claims, legal actions, suits, litigation,  arbitrations, disputes
               or investigations listed on Schedules 3.7 and 3.10;

                                       21

          (p)  all  Liabilities  of any of the Asset Sale  Companies  for unpaid
               Taxes with respect to any Tax year or portion  thereof  ending on
               or before the Closing Date or for any Tax year  beginning  before
               and ending after the Closing Date to the extent  allocable to the
               portion of such period beginning before and ending on the Closing
               Date (to the  extent  of any  inconsistencies  with  Article  VII
               hereof, Article VII shall be controlling);

          (q)  all  amounts  payable  as the result of the  consummation  of the
               transactions contemplated by this Agreement that arise due to any
               change of  control  provision  of any  Contract  other than those
               Contracts listed on Schedule 5.4(b);

          (r)  all Liabilities of any of the Asset Sale Companies for the unpaid
               Taxes of any Person  (including PCC and its  subsidiaries)  under
               Reg.  ss.1.1502-6 (or any similar  provision of state,  local, or
               foreign  law),  as a transferee  or  successor,  by contract,  or
               otherwise;

          (s)  all Liabilities for any Environmental  Matter or Environmental or
               Response  Action  related  to real  property  or any other  asset
               owned, operated or leased by PCC or any of its Affiliates that is
               not a Purchased Asset (except to the extent otherwise provided in
               the Paramont  Service  Agreement or any other  agreement  entered
               into  contemporaneously  with this  Agreement  pursuant  to which
               reclamation  and other  services  are to be performed on PCC's or
               its Affiliates' idle properties);

          (t)  all Liabilities for any Environmental  Matter or Environmental or
               Response Action (other than Mining Environmental  Liabilities) to
               the extent the  underlying  claim  relates to or arises  from any
               activity  on or through  the use of the  Purchased  Assets and is
               attributable  to acts or  omissions  occurring at or prior to the
               Closing;

                                       22

          (u)  all Liabilities of PCC that become a Liability of Buyer under any
               bulk transfer Law of any jurisdiction;

          (v)  all  Liabilities  under the contracts,  agreements,  personal and
               real property leases,  relationships and commitments of the Asset
               Sale Companies listed on Schedule 1.89(v); and

          (w)  all  Liabilities  related to  Equipment  retained  by PCC and the
               Asset Sale Companies  after the Closing Date but included  within
               the Equipment leases listed Schedule 5.4(b).

     1.90. Security Agreement.

     "Security  Agreement" shall mean the Security  Agreement  between Buyer and
PCC,  to be dated as of the  Closing  Date,  in a form to be agreed  upon by the
parties hereto.

     1.91. SEC.

     "SEC" shall mean the Securities and Exchange Commission.

     1.92. SMCRA.

     "SMCRA"  shall have the  meaning  set forth in Section  3.7  hereof.

     1.93. Straddle Period.

     "Straddle  Period" shall mean any taxable  period  covering days before and
after the Closing Date.

     1.94. Tax or Taxes.

     "Tax" or "Taxes" mean any federal,  state, local, or foreign income,  gross
receipts,  license, payroll,  employment,  excise, severance, stamp, occupation,
premium,  windfall profits,  environmental  (including taxes under Code ss.59A),
custom duties, capital stock, franchise, profits,  withholding,  social security

                                       23

(or similar), unemployment, disability, real property, personal property, sales,
use,  transfer,  registration,  value  added,  alternative  or  add-on  minimum,
estimated,  reclamation fees or other tax of any kind whatsoever,  including any
interest,  penalty, or addition thereto,  whether disputed or not, but shall not
include, for purposes of this Agreement only, Liabilities under the Coal Act, of
whatever nature and regardless of how denominated.

     1.95. Tax Return.

     "Tax  Return"   shall  mean  any  original  or  amended   report,   return,
declaration,  claim for refund,  statement,  document,  schedule,  attachment or
other  information  supplied  or  required  to  be  supplied  to a  Governmental
Authority with respect to Taxes, including any return of an affiliated, combined
or unitary group.

     1.96. VC 5.

     "VC 5" shall mean that certain property owned indirectly by PCC depicted on
Schedule 1.96.

     1.97. VC 5 Calculation.

     "VC 5 Calculation" shall have the meaning set forth in Section 1.99 hereof.

     1.98. VC 5 Costs.

     "VC 5 Costs"  shall  mean the amount  that  equals the sum of all costs and
expenses in connection with VC 5 incurred by PCC and its Affiliates  through the
Closing Date.

     1.99. VC 5 Estimate.

     "VC 5  Estimate"  shall  mean:

          (a)  if the  expected VC 5 Costs minus the  expected VC 5 Revenue (the
               "VC 5 Calculation")  exceeds $13,800,000,  then the VC 5 Estimate
               shall  be  the  amount  by  which  the VC 5  Calculation  exceeds
               $13,800,000; or

                                       24

          (b)  if the VC 5 Calculation is less than  $13,800,000,  then the VC 5
               Estimate shall equal the VC 5 Calculation minus $13,800,000.

     1.100. VC 5 Revenue.

     "VC 5 Revenue" shall mean the amount that equals the sum of all revenues in
connection  with VC 5 received  by PCC and its  Affiliates  through  the Closing
Date.

     1.101. VDEQ.

     "VDEQ" shall have the meaning set forth in Section 3.7 hereof.

     1.102. VDMME.

     "VDMME"  shall have the meaning  set forth in Section  3.7  hereof.

     1.103. Virginia Entities.

     "Virginia  Entities"  shall have the meaning  set forth in Section  5.10(a)
hereof.

     1.104. WARN Act.

     "WARN Act" shall mean the Worker  Adjustment  and  Retraining  Notification
Act, as amended.

     1.105. Welfare Plans.

     "Welfare Plans" shall have the meaning set forth in Section 3.11 hereof.

     1.106. Workers' Compensation Acts.

     "Workers'  Compensation  Acts"  shall mean Laws that  provide for awards to
employees and their dependents for employment-related accidents and diseases.

                                       25

                                   ARTICLE II
                           PURCHASE AND SALE OF ASSETS

     2.1. Transfer of Assets.

     On the  Closing  Date,  PCC (on behalf of the Asset Sale  Companies)  shall
cause to be sold, conveyed,  transferred,  assigned, and delivered to Buyer, and
Buyer shall acquire, the Purchased Assets. At the Closing,  subject to the terms
and  conditions  of this  Agreement,  PCC  agrees  to:  (i)  cause  title to the
Purchased  Assets to be transferred and delivered to Buyer; and (ii) perform its
obligations  under this Agreement to be performed at or before Closing.  In full
payment  for  the  Purchased  Assets,   Buyer  shall:  (i)  assume  the  Assumed
Liabilities;  (ii) pay to PCC (which shall receive such amounts on behalf of the
Asset Sale  Companies)  the  Purchase  Price by wire  transfer  of cash or other
immediately  available funds and execute and deliver to PCC the Promissory Note;
and (iii)  perform its  obligations  under this  Agreement to be performed at or
before Closing.  Buyer shall not assume or have any responsibility  with respect
to any Liability of PCC Parent,  PCC, the PCC Group or the Asset Sale  Companies
that is not an Assumed Liability.

     2.2. Calculation of VC 5 Adjustment Amount.

          (a)  No later than ten days before the Closing Date,  PCC will deliver
               to Buyer documentation  reasonably  acceptable to Buyer detailing
               and supporting the VC 5 Estimate.

          (b)  No later than 20 days after the Closing Date, PCC will deliver to
               Buyer documentation  reasonably acceptable to Buyer detailing the
               VC 5 Costs and the VC 5  Revenue  (the  "Final  VC 5 Cost").  The
               Final VC 5 Cost  shall be equal to the VC 5 Costs  minus the VC 5
               Revenue  as shown on such  documentation.  PCC and Buyer will use
               commercially reasonable efforts to resolve any differences within
               seven   business   days  after  the   delivery   by  PCC  of  the

                                       26

               documentation  detailing  the Final VC 5 Costs.  If PCC and Buyer
               cannot  resolve any such  differences  within such seven business
               days period,  the parties agree to submit any such differences to
               arbitration  in Abingdon,  Virginia,  by the  accounting  firm of
               Deloitte  &  Touche,  LLP or  another  accounting  firm  mutually
               acceptable to both parties (the "CPA Arbitrator") to resolve such
               differences.  The CPA  Arbitrator  shall  make  such  review  and
               examination  of the  relevant  facts  and  documents  as the  CPA
               Arbitrator deems appropriate,  and shall permit each of Buyer and
               PCC to make a written presentation of their respective positions.
               Within  forty-five (45) days after  submission of such dispute by
               both parties, the CPA Arbitrator shall resolve all disputed items
               in writing and shall  prepare and  deliver  its  decision  (which
               shall include a determination of the VC 5 Costs, the VC 5 Revenue
               and the Final VC 5 Cost),  and which  shall be final and  binding
               upon the parties  without further  recourse or collateral  attack
               and, as to each disputed  matter,  shall accept either Buyer's or
               PCC's  position in its entirety  and the party whose  position is
               not  accepted  by the CPA  Arbitrator  on a  particular  disputed
               matter  shall  pay all fees and costs of such CPA  Arbitrator  to
               arbitrate such disputed matter. In accordance with the provisions
               of this Section  2.2(b):  (i) Buyer shall pay PCC the amount,  if
               any, by which the value of the Final VC 5 Cost  exceeds the value
               of the VC 5 Estimate;  or (ii) PCC shall pay Buyer the amount, if
               any, by which the value of the VC 5 Estimate exceeds the value of
               the Final VC 5 Cost. Such payment shall  constitute an adjustment
               to the Purchase  Price and shall be paid by wire transfer of cash
               or other  immediately  available funds within three business days
               after  the  completion  of the  procedures  contemplated  in this
               Section 2.2(b).

                                       27

     2.3.  Bills  of  Sale,  Assignment  and  Assumption  Agreements  and  Other
Documents.

     At the Closing,  PCC shall cause each of the Asset Sale  Companies  to: (i)
execute and deliver to Buyer the Bills of Sale,  the  Assignment  and Assumption
Agreements  and such other  documents as may be necessary to convey to Buyer the
Purchased  Assets;  and (ii) perform its  obligations  under the Agreement to be
performed at or before the Closing.

     2.4. Assumption of Liabilities.

     At the Closing,  Buyer shall execute and deliver to PCC the  Assignment and
Assumption  Agreements  and  such  other  documents  and  instruments  as may be
necessary  for Buyer to assume all of the Assumed  Liabilities.  Buyer shall not
assume or have any responsibility, however, with respect to any Liability of PCC
Parent,  PCC, the PCC Group or the Asset Sale  Companies  that is not an Assumed
Liability.

     2.5. Proration of Liabilities.

     PCC and Buyer shall  cooperate  with each other to provide for payments due
with respect to the Assumed Liabilities and the Retained  Liabilities during the
payment period in which the Closing occurs with all such Liabilities prorated as
of the Closing Date, if applicable.

     2.6. Indemnification and Guaranty Agreement.

     At the Closing,  PCC, PCC Parent,  Buyer's  Ultimate Parent and Buyer shall
execute and deliver the Indemnification and Guaranty Agreement.

     2.7. Cooperation Agreement.

     At the  Closing,  PCC and Buyer  shall,  and PCC shall cause PCC Parent to,
execute and deliver  the  Cooperation  Agreement  pursuant to which  Buyer,  PCC
Parent and PCC shall provide each other certain information and other assistance
in connection with the collection, administration and/or satisfaction of certain
of the Retained Liabilities.

                                       28

     2.8. Administrative Services Agreement.

     At the Closing,  PCC and Buyer shall execute and deliver the Administrative
Services  Agreement  pursuant to which PCC or one of its Affiliates will provide
certain services to Buyer and the Asset Sale Companies for a transition  period.

     2.9. Paramont Service Agreement.

     At the  Closing,  PCC and Buyer shall  execute  and  deliver  the  Paramont
Service  Agreement  pursuant to which Buyer will cause one of its  Affiliates to
perform  reclamation  and other  services  on idle  properties.

     2.10. Security Agreement.

     At the Closing, in order to secure Buyer's obligations under the Promissory
Note,  PCC and Buyer shall  execute and deliver the  Security  Agreement.

     2.11. Additional Documents.

     At the  Closing,  PCC and Buyer  shall,  and PCC shall cause the Asset Sale
Companies  to,  execute  and  deliver all such other  documents  or  instruments
necessary  or  appropriate  to  effect  the  transactions  contemplated  by this
Agreement,  including the  documents  provided in Section 5.6 hereof and in this
Article II.

     2.12. Coal Inventory Adjustment.

          (a)  In accordance  with the  provisions  of this Section 2.12:  Buyer
               shall pay PCC the amount,  if any, by which the value of the Coal
               Inventory (as calculated in accordance with Sections  2.12(b)) is
               finally  determined to be greater than  $1,640,000.  Such payment
               shall constitute an adjustment to the Purchase Price and shall be
               paid by fixing the face amount of the Promissory  Note within one
               business day after the completion of the procedures  contemplated
               in Sections 2.12(b).

                                       29

          (b)  No later than three days  before the  Closing  Date,  the parties
               will  agree  upon the  density  of the  various  stockpiles  that
               constitute  the Coal  Inventory.  No later than two business days
               prior to the Closing, PCC and Buyer shall cause Tuck Engineering,
               Inc. (the "Independent  Surveyor") to prepare and deliver to each
               of  them a  survey  of all  Coal  Inventory  of  the  Asset  Sale
               Companies as of the  Closing,  which survey shall be conducted in
               accordance  with the  principles  set  forth  on and  shall be in
               substantially  the  format  attached  hereto as part of  Schedule
               2.12(b).  PCC and Buyer shall,  and shall cause their  respective
               Affiliates to,  cooperate with and make available any information
               reasonably   requested  by  the   Independent   Surveyor  in  its
               preparation   of  its   survey   of  the  Coal   Inventory.   All
               determinations made by the Independent  Surveyor in its survey of
               the Coal Inventory shall be final,  binding and conclusive on the
               parties.  PCC and Buyer shall each bear fifty percent of the fees
               and costs of the  Independent  Surveyor and any other third party
               incurred in connection with the calculation of the Coal Inventory
               pursuant to this Section 2.12(b).

     2.13. Allocation of Purchase Price and Assumed Liabilities.

     The  Purchase  Price  and  the  Assumed  Liabilities  (to the  extent  they
constitute part of the amount realized for federal Income Tax purposes) shall be
allocated among the Purchased  Assets in accordance with a schedule to be agreed
upon by  Buyer  and PCC  after  the  Closing  Date.  Buyer  shall  prepare  such
allocation  schedule  and deliver it to PCC within the later to occur of (i) ten
(10) business days after the  completion of the Audited  Closing Date  Financial
Statements  or (ii) ten (10)  business  days  after the CPA  Arbitrator's  final
resolution  under Sections 2.2 and 2.12, if  applicable.  PCC shall be deemed to
agree with such allocation schedule unless,  within ten (10) days after the date
PCC receives the allocation  schedule from Buyer,  PCC notifies Buyer in writing

                                       30

of (i)  each  allocation  with  which  it  disagrees  and  (ii)  for  each  such
allocation,  the amount that PCC  proposes to  allocate.  If PCC  provides  such
notice to Buyer, the parties shall proceed in good faith to resolve mutually the
disputed allocation amounts within fifteen (15) days after the date on which PCC
notifies Buyer of a disagreement  with Buyer's proposed  allocation.  If PCC and
Buyer  cannot  resolve any such  differences,  the parties  agree to submit such
differences  to  arbitration  in Abingdon,  Virginia,  by the CPA  Arbitrator to
resolve  such  differences.  The CPA  Arbitrator  shall  make  such  review  and
examination  of the relevant  facts and  documents as the CPA  Arbitrator  deems
appropriate  and  shall  permit  each  of  Buyer  and  PCC  to  make  a  written
presentation of their respective  positions.  Within  forty-five (45) days after
submission of such dispute by both  parties,  the CPA  Arbitrator  shall resolve
such dispute in writing and shall prepare and deliver its decision,  which shall
(i) be based upon a  determination  of the fair  market  value of the  Purchased
Assets,  (ii) defer to valuations  that have been  prepared in  accordance  with
generally  accepted  valuation  techniques absent manifest error, (iii) be final
and binding upon the parties without further  recourse or collateral  attack and
(iv) accept either  Buyer's or PCC's  position in its entirety.  The party whose
position is not accepted by the CPA  Arbitrator  shall pay all fees and costs of
such CPA  Arbitrator to arbitrate such dispute.  The  allocation  schedule shall
include,  at a minimum,  information  necessary to complete  Part II of IRS Form
8594.  The  allocation  to the  Purchased  Assets is intended to comply with the
requirements  of Section 1060 of the Code. The parties shall cooperate to comply

                                       31

with all substantive and procedural requirements of Section 1060, and except for
any  adjustment  to the  Purchase  Price  hereunder,  after the  completion  and
agreement by the parties to the allocation  schedule,  such allocation  schedule
shall be  adjusted  only if and to the  extent  necessary  to  comply  with such
requirements  of Section  1060.  Buyer and PCC agree that they will not take nor
will they permit any Affiliate to take,  for Income Tax  purposes,  any position
inconsistent with such allocation  schedule to the Purchased  Assets;  provided,
however,  that (i)  Buyer's  cost for the  Purchased  Assets may differ from the
total amount  allocated  hereunder to reflect the inclusion in the total cost of
items (for  example,  capitalized  acquisition  costs) not included in the total
amount so allocated and (ii) the amount realized by the Asset Sale Companies may
differ from the total amount allocated  hereunder to reflect  transaction  costs
that reduce the amount realized for federal Income Tax purposes.

                                  ARTICLE III
                      REPRESENTATIONS AND WARRANTIES OF PCC

     PCC hereby  represents and warrants to Buyer that the statements  contained
in this  Article  III are  correct  and  complete,  except  as set  forth in the
Schedules  delivered  by PCC to Buyer in  connection  with this  Agreement.  The
Schedules are arranged in paragraphs  corresponding to the lettered and numbered
paragraphs contained in this Article III.

     3.1. Incorporation.

     PCC and each of the Asset Sale Companies are  corporations  duly organized,
validly  existing and in good standing under the Laws of the respective state or
commonwealth  of each such  company's  incorporation.  PCC and each of the Asset
Sale Companies that is not a corporation incorporated under the Laws of Virginia
are duly qualified or licensed to transact business as a foreign  corporation in
Virginia  and are in good  standing  under  the laws of  Virginia.  Set forth on
Schedule 3.1 is the name of each state or other  jurisdiction in which each such
company  has either  paid taxes or had an office in the three years prior to the
date of this Agreement.

                                       32

     3.2. Execution, Delivery and Performance.

     The execution, delivery and performance by PCC of this Agreement and by PCC
and the applicable  Asset Sale Company of each other  agreement or instrument to
which it is a party executed in connection herewith or delivered pursuant hereto
and the  consummation of the transactions  contemplated  herein and therein will
not, with or without the giving of notice or the passage of time,  or both:  (i)
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 PCC's or any Asset Sale  Company's  Articles of  Incorporation  or
Bylaws or of any  material  franchise,  mortgage,  deed of trust,  Lien,  lease,
license,  instrument,  agreement,  consent, approval, waiver or understanding to
which  PCC or any Asset  Sale  Company  is a party or by which  any  Asset  Sale
Company is bound, or any Law or any order, judgment,  writ, injunction or decree
to which PCC or any Asset Sale  Company  is a party or by which  PCC,  any Asset
Sale Company or the Purchased Assets may be bound or affected;  (ii) require the
approval,   consent  or  authorization   of,  prior  notice  to,  or  filing  or
registration with any Governmental Authority or, except as set forth on Schedule
1.76, 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 PCC or the Asset Sale Companies or that
otherwise  relates  to the  Purchased  Assets;  or (iii)  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 PCC or any Asset Sale Company is subject.

                                       33

     3.3. Authorization.

     PCC has full power and  authority to enter into and deliver this  Agreement
and to  perform  its  obligations  hereunder  and each of PCC and the Asset Sale
Companies  has full power and  authority  to enter into and  deliver  each other
agreement or instrument to which it is a party  executed in connection  herewith
and delivered pursuant hereto and to perform its obligations  thereunder.  PCC's
execution,  delivery  and  performance  of this  Agreement  and  the  execution,
delivery and performance of all other agreements and instruments by PCC and each
of the Asset Sale Companies in connection herewith and delivered pursuant hereto
and the  transactions  contemplated  hereby  have  been duly  authorized  by all
requisite  corporate  action  on the  part of PCC and  each  of the  Asset  Sale
Companies.  This Agreement and all other  agreements or instruments  executed by
PCC or any of the Asset Sale  Companies in connection  herewith and delivered by
PCC or any of the Asset Sale Companies  pursuant  hereto have been duly executed
and  delivered by PCC or such Asset Sale  Companies  and this  Agreement and all
other  agreements  and  instruments  executed  by PCC or any of the  Asset  Sale
Companies in  connection  herewith and delivered by PCC or any of the Asset Sale
Companies  pursuant hereto constitute the legal, valid and binding obligation of
PCC or such Asset Sale Company,  as the case may be,  enforceable  in accordance
with their respective terms (subject to any applicable  bankruptcy,  insolvency,
reorganization,  moratorium  or  other  similar  Laws  affecting  generally  the
enforcement of creditors' rights).

     3.4. Absence of Changes.

     Except as contemplated by this Agreement,  since December 31, 2001, none of
the Asset Sale Companies has, with respect to the Purchased Assets:

                                       34

          (a)  borrowed  or agreed to borrow  any funds or  incurred,  or become
               subject to, any Liability, or issued any note, bond or other debt
               security,  or guaranteed any  indebtedness  for borrowed money or
               capitalized lease obligation,  except Liabilities incurred in the
               Ordinary  Course of Business,  none of which would  reasonably be
               expected to result in an impact greater than $100,000;

          (b)  paid any Liability other than current Liabilities in the Ordinary
               Course of Business;

          (c)  sold,  transferred  or otherwise  disposed of, or agreed to sell,
               transfer or otherwise dispose of any of the Equipment,  or, other
               than in the  Ordinary  Course of  Business,  any other  Purchased
               Assets, or canceled or otherwise terminated,  or agreed to cancel
               or  otherwise  terminate,  other than in the  Ordinary  Course of
               Business, any Permits;

          (d)  except in the  Ordinary  Course  of  Business,  entered  into any
               agreement,  contract,  lease or  license  (or  series of  related
               agreements,  contracts, leases and licenses) or made or permitted
               any   material   amendment  to  or   termination,   acceleration,
               modification  or  cancellation  of any  Contract or breached  any
               provision of any Contract;

          (e)  merged or consolidated with any other Person;

          (f)  mortgaged,  pledged or subjected to any Lien any of its assets or
               properties, other than Permitted Liens;

          (g)  made any  capital  expenditure  (or  series  of  related  capital
               expenditures)  either (x)  involving  more than  $100,000  or (y)
               outside the Ordinary Course of Business;

                                       35

          (h)  made any capital  investment in, any loan to, or any  acquisition
               of the  securities  or assets of, any other  Person (or series of
               related capital  investments,  loans and acquisitions) either (x)
               involving   $100,000  or  (y)  outside  the  Ordinary  Course  of
               Business;

          (i)  delayed or  postponed  the payment of accounts  payable and other
               Liabilities outside the Ordinary Course of Business;

          (j)  cancelled, compromised, waived or released any right or claim (or
               series of related  rights and claims)  either (x) involving  more
               than $100,000 or (y) outside the Ordinary Course of Business;

          (k)  made any loan to, or entered into any other transaction with, any
               of the  directors,  officers  and  employees  of such  Asset Sale
               Company outside the Ordinary Course of Business;

          (l)  entered into any  employment  contract or  collective  bargaining
               agreement, written or oral, or modified the terms of any existing
               such contract;

          (m)  except in the  Ordinary  Course  of  Business  adopted,  amended,
               modified  or  terminated  any bonus,  profit-sharing,  incentive,
               severance or other plan,  contract or commitment  for the benefit
               of any of the directors, officers and Employees of the Asset Sale
               Companies,  or taken any such  action  with  respect to any other
               Employee Benefit Plan;

          (n)  made  any  other  change  in  employment  terms  for  any  of the
               directors,  officers and  Employees  of the Asset Sale  Companies
               outside the Ordinary Course of Business;

                                       36

          (o)  suffered any damage,  destruction or loss, whether or not covered
               by  insurance,  that has had or would  reasonably  be expected to
               have a Material Adverse Effect;

          (p)  implemented  or adopted any change in its  accounting  methods or
               principles or the application thereof; or

          (q)  entered into any  agreement,  arrangement or  understanding  with
               respect to any of the foregoing.

     3.5. Purchased Assets.

          (a)  The Asset Sale Companies (i) own good and  transferable  title to
               all of the  Purchased  Assets  free and  clear of all  Liens  and
               restrictions  on  transfer,  other than  Permitted  Liens or (ii)
               lease such Purchased  Assets under a valid and enforceable  lease
               (subject    to    any    applicable    bankruptcy,    insolvency,
               reorganization,   moratorium  or  other  similar  Laws  affecting
               generally the enforcement of creditors' rights). No rights of the
               Asset Sale  Companies  under such  leases  have been  assigned or
               otherwise transferred as security for any obligation of the Asset
               Sale Companies. The consummation of the transactions contemplated
               by this Agreement  will not create or constitute,  either with or
               without  notice  or the  passage  of time a  default  or event of
               default  under any such lease or require the consent of any other
               party to such  lease in  order  to  avoid a  default  or event of
               default.

          (b)  Except for the items set forth on Schedule 1.89(v), the Purchased
               Assets  include all tangible and  intangible  assets owned by the
               Asset Sale Companies and used in the Business.

                                       37

          (c)  The  Equipment  that is currently in use has been  maintained  in
               accordance with normal industry  practice and is suitable for the
               purposes for which the Asset Sale  Companies are presently  using
               such Equipment.

          (d)  The value of the Parts,  Fuel and  Supplies  Inventory  as of the
               Closing Date shall be at least $620,000.

     3.6. Intellectual Property.

     No third party has asserted any interest in the Intellectual  Property, nor
has any third party  alleged  that any Asset Sale  Company has  infringed on any
Intellectual  Property of any third party.  To the Knowledge of PCC, none of the
Asset Sale  Companies  interferes  with,  infringes  upon,  misappropriates,  or
otherwise  comes into conflict with, any  Intellectual  Property rights of third
parties as a result of the  continued  operation  of the  Business as  presently
conducted.

     3.7. Permits and Environmental Compliance.

          (a)  Each  Asset  Sale  Company  is in  material  compliance  with all
               Environmental  Laws related to the Purchased Assets.  Neither PCC
               nor any Asset Sale Company (such Persons being hereafter referred
               to in this Section 3.7 as  "Operators")  has been notified by any
               Governmental  Authority  of any  current,  alleged or  unresolved
               violation  of  any   Environmental   Laws  applicable  to  Mining
               Activities,  including any investigatory,  remedial or corrective
               obligations,  that would  result in (i)  closure,  suspension  or
               restriction of any mine or mining-related activity related to the
               Permits, (ii) revocation or suspension of any license or Permits,
               or (iii)  exposure  of Buyer to the  imposition  of any  fines or
               other civil or criminal monetary penalty in excess of $5,000. The
               Permits include all material  permits,  licenses,  franchises and

                                       38

               other  authorizations  necessary to conduct the Mining Activities
               as  currently  conducted  and the  Asset  Sale  Companies  are in
               material  compliance with all such Permits. No such Permit is the
               subject  of any  proceeding  by or in front  of any  Governmental
               Authority  that might affect its validity and no such  proceeding
               is pending or, to the Knowledge of PCC, threatened.

          (b)  PCC has made  available to Buyer true and complete  copies of (i)
               the  Permits,  (ii) all of the mining  permits and other  permits
               held  by  each  Operator  pertaining  to  the  Purchased  Assets,
               together  with  a  description  of  the  permitted   property  or
               facility,  the  amount of the bond for each such  Permit  and the
               surety  for each such bond or manner in which  each such bond has
               otherwise  been  posted,  (iii) all other  licenses,  franchises,
               certificates,  concessions and other  governmental  approvals and
               authorizations  held by each Operator pertaining to the Purchased
               Assets,  as amended,  supplemented  and modified through the date
               hereof, and (iv) any and all pending  applications for additional
               mining  permits and other licenses and  authorizations  that have
               been  submitted  to  any  governmental   agency  by  an  Operator
               pertaining  to the  Purchased  Assets  or are in the  process  of
               development either in-house or through consultants.

          (c)  Schedule  3.7  includes  a true and  complete  list of all of the
               citations,  notices of  non-compliance  and notices of  violation
               received by each Operator  with respect to the  Purchased  Assets
               from the  Virginia  Department  of  Mines,  Minerals  and  Energy
               ("VDMME"),  the  Virginia  Department  of  Environmental  Quality
               ("VDEQ"),  the federal  Environmental  Protection Agency ("EPA"),
               the federal  Office of Surface Mining  ("OSM"),  the federal Mine
               Safety  and  Health   Administration   ("MSHA"),   or  any  other
               Governmental  Authority that remain  outstanding.  No Operator is
               subject to any cessation orders, cease and desist orders, closure
               orders or show cause  orders  issued by VDMME,  VDEQ,  EPA,  OSM,
               MSHA, or any such other  Governmental  Authority  with respect to
               the Purchased Assets.

                                       39

          (d)  With  respect  to  the  Purchased  Assets,  each  Operator  is in
               material  compliance with all of the  requirements of the Surface
               Mining Control and Reclamation Act of 1977 ("SMCRA"), the Federal
               Mine  Safety and  Health Act of 1977,  as  amended,  all  similar
               statutes  of the  Commonwealth  of  Virginia,  and all  rules and
               regulations  promulgated  under  those Acts and  statutes by OSM,
               MSHA,  VDMME,  VDEQ and any other  Governmental  Authority.  With
               respect to the Purchased  Assets,  no Operator has been subjected
               to any bond  forfeiture,  permit  suspension  or  revocation,  or
               similar  effort and  proceedings  instituted by OSM, VDMME or any
               other Governmental Authority.

          (e)  To the  Knowledge of PCC,  after the  Closing,  Buyer will not be
               liable  for  any   fines,   penalties,   fees,   Taxes  or  other
               governmental   charges   assessed  with  respect  to  notices  of
               violation, cessation orders, closure orders, show cause orders or
               other  governmental  enforcement  actions issued prior to Closing
               with respect to the Purchased Assets.  Neither this Agreement nor
               the consummation of the transactions that are the subject of this
               Agreement  will  result  in  any  Buyer   Liabilities   for  site
               investigation  or cleanup,  or  notification to or consent of any
               Governmental  Agency  or third  parties,  pursuant  to any of the
               so-called   "transaction-triggered"   or  "responsible   property
               transfer"  Environmental Laws. The representation in the previous
               sentence  does not relate to any  matters for which Buyer has the
               responsibility,   pursuant  to  this  Agreement,  to  notify  any
               Governmental   Authority  or  to   otherwise   process  with  any
               Governmental  Authority  in  connection  with the transfer of any
               Permit.

                                       40

          (f)  No Asset Sale Company has, with respect to the Purchased  Assets,
               either  expressly or by operation of Law,  assumed or  undertaken
               any Liability,  including without  limitation,  any Liability for
               corrective or remedial  action,  of any other Person  relating to
               any Environmental Laws.

          (g)  To the Knowledge of PCC, no conditions existing as of the Closing
               Date and relating to the  Purchased  Assets or the  activities of
               the Asset Sale Companies or any of their respective  predecessors
               or  Affiliates   will  prevent  or  materially   hinder   Buyer's
               compliance with  Environmental  Laws,  require Buyer to undertake
               any  investigatory,  remedial or corrective  actions  pursuant to
               Environmental  Laws or impose  upon  Buyer any other  Liabilities
               pursuant to Environmental Laws, including without limitation, any
               Environmental  Laws  relating  to onsite or offsite  releases  or
               threatened releases of Hazardous Substances or imposing Liability
               for personal injury, property damage or natural resource damage.

     3.8. Reclamation Bonds.

     Schedule  3.8  contains  a  list  of  all  bonds,   including   guaranties,
indemnities,  letters of credit and other forms of surety,  posted by and/or for
the  benefit of the Asset Sale  Companies  to secure  the  performance  of their
respective  reclamation or other Liabilities  pursuant to, in connection with or
as a condition of, the Permits  (collectively,  the "PCC Bonds").  The PCC Bonds
are  sufficient  to permit  the Asset Sale  Companies  and their  Affiliates  to
conduct the Mining  Activities in compliance with Laws and are in full force and
effect.

                                       41

     3.9. Contracts.

          (a)  PCC has made  available  to Buyer  copies  of all of the  written
               Contracts,  or a  written  summary  setting  forth  the terms and
               conditions  where no  copies  exist,  including  all  amendments,
               modifications, waivers and elections applicable thereto.

          (b)  As to the Asset Sale Companies  party thereto:  (i) the Contracts
               are valid and  binding,  enforceable  in  accordance  with  their
               respective   terms   (subject  to  any   applicable   bankruptcy,
               insolvency,  reorganization,  moratorium  or other  similar  Laws
               affecting  generally the enforcement of creditors'  rights),  and
               are in full  force  and  effect;  (ii)  the  consummation  of the
               transactions  contemplated  herein will not,  with or without the
               giving of notice or the passage of time, or both,  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
               the Contracts;  (iii) no Asset Sale Company, nor to the Knowledge
               of PCC, any other party is in material breach or default,  and no
               event has  occurred  that,  with  notice or lapse of time,  would
               constitute   a  breach  or   default,   or  permit   termination,
               modification or  acceleration,  under the Contracts;  and (iv) no
               Asset Sale Company,  nor to the Knowledge of PCC, any other party
               has repudiated any provision of the Contracts.

          (c)  Schedule  3.9(c) sets forth the consents  and  approvals of third
               parties and Governmental Authorities required to be obtained as a
               result of the transactions contemplated by this Agreement.

     3.10. Litigation; Claims.

          (a)  Schedules  3.7 and 3.10 list all claims,  legal  actions,  suits,
               litigation, arbitrations,  disputes, investigations,  proceedings
               by or  before  any  Governmental  Authority  involving  more than
               $100,000 and all orders, decrees or judgments,  now pending or in

                                       42

               effect, or, to the Knowledge of PCC,  threatened or contemplated,
               against or  affecting  the Asset Sale  Companies,  the  Purchased
               Assets,  or the consummation of the transactions  contemplated by
               this  Agreement,   except  to  the  extent  involving  Taxes  for
               Pre-Closing Periods.

          (b)  There are no existing  claims by or disputes  involving more than
               $100,000  with  Persons  owning  or  occupying  lands  or  realty
               adjoining or near any of the Purchased  Assets  regarding  Mining
               Activities by the Asset Sale  Companies or regarding the location
               of boundary lines,  encroachments,  mineral  rights,  subsidence,
               water quantity or quality,  blasting  damage,  transportation  of
               coal or other materials, nuisances or any other similar matter.

     3.11. Employee Benefits.

          (a)  Schedule 3.11(a) contains a list of all "employee  benefit plans"
               (as  defined  in Section  3(3) of ERISA)  and all other  employee
               benefit plans, programs or arrangements, including each severance
               pay, bonus, deferred compensation,  incentive compensation, stock
               purchase, stock option or other equity-based compensation,  death
               benefit,  group  insurance,  hospitalization  or  other  medical,
               dental,  health,  life  (including all individual  life insurance
               policies  as to which  any of the  Asset  Sale  Companies  is the
               owner, beneficiary or both), disability or other insurance,  Code
               Section 125  "cafeteria"  or "flexible"  benefit  plan,  pension,
               savings,   profit-sharing   or   retirement   plan,   program  or
               arrangement:  (i) under which  Employees or former  Employees are
               entitled to participate by reason of their employment with any of
               the Asset Sale Companies or their  respective  ERISA  Affiliates,
               whether or not any of the foregoing is funded, whether insured or
               self-funded,  and with  respect  to which any of the  Asset  Sale
               Companies  are a party or a sponsor or a fiduciary  thereof or by

                                       43

               which any of the Asset Sale  Companies  are  bound;  or (ii) with
               respect to which any of the Asset Sale  Companies  otherwise  may
               have,  as of the Closing Date,  any direct or indirect  Liability
               (the "Employee Benefit Plans"). Schedule 3.11(a) identifies:  (i)
               each Employee  Benefit Plan that is a "pension  plan" (as defined
               in Section  3(2) of ERISA)  (the  "Pension  Plans"),  and denotes
               those Pension Plans intended to be qualified under Section 401(a)
               of the Code (the "Qualified  Plans");  (ii) each Employee Benefit
               Plan that is a "multiemployer  plan" (as defined in Section 3(37)
               or Section  4001(a)(3) of ERISA) (a  "Multiemployer  Plan");  and
               (iii) each  Employee  Benefit  Plan that is a "welfare  plan" (as
               defined in Section 3(1) of ERISA) (the "Welfare Plans").

          (b)  Each Qualified Plan meets the  requirements of a "qualified plan"
               under Code Section 401(a) and has received, pursuant to a request
               that  accurately  described  such  Qualified  Plan,  a  favorable
               determination  letter from the IRS to the effect that the form of
               such Qualified Plan satisfies the  requirements of Section 401(a)
               of the Code and that its related  trust is exempt  from  taxation
               under Section  501(a) of the Code. To the Knowledge of PCC, there
               are no facts or circumstances  that would jeopardize or adversely
               affect in any  material  respect  the  qualification  under  Code
               Section 401(a) of any Qualified Plan.

          (c)  As of the Closing  Date,  full payment to each  Employee  Benefit
               Plan of all contributions  (including all employer  contributions
               and employee salary reduction contributions) that are required to
               be made by the Asset Sale  Companies  under the terms thereof and
               under  ERISA or the Code in respect of the current and prior plan
               years,  if any,  have been made for all  Employee  Benefit  Plans
               (except  for The  Savings  and  Investment  Plan of The  Pittston

                                       44

               Company and Its Subsidiaries, which payment shall be made as soon
               as possible after the Closing Date). All  contributions  that are
               required  to be made by the Asset Sale  Companies  for any period
               ending on or before  the  Closing  Date that are not yet due have
               been  paid to each  such  Employee  Benefit  Plan or  accrued  in
               accordance  with the past  custom and  practice of the Asset Sale
               Companies.  All  premiums  that are due on or before the  Closing
               Date have been paid with respect to each such Welfare Plan. As of
               the  latest  actuarial  determination,  no  "accumulated  funding
               deficiency" (as defined in Section 302 of ERISA or Section 412 of
               the Code),  whether or not  waived,  exists  with  respect to any
               Pension  Plan.  The  present  value  of all  accumulated  benefit
               obligations  under each Qualified Plan (based on the  assumptions
               used for purposes of Statement of Financial  Accounting  Standard
               No. 87) did not as of the last annual  valuation date  applicable
               thereto  exceed  the  fair  market  value of the  assets  of such
               Qualified  Plan.  No  "reportable  event"  within the  meaning of
               Section 4043 of ERISA has occurred in connection  with any of the
               Pension Plans.

          (d)  Employee Benefit Plan Compliance.

               (i)  Each  Employee  Benefit  Plan (other than the  Multiemployer
                    Plans) has been  administered  substantially  in  accordance
                    with its terms;

               (ii) each  Employee  Benefit  Plan (other than the  Multiemployer
                    Plans) and each related  trust,  insurance  contract or fund
                    complies in form and in operation and has been  administered
                    substantially  in accordance with any applicable  provisions
                    of ERISA, the Code and all other Laws, all reports,  returns
                    and other documentation  (including Form 5500 Annual Reports
                    and  PBGC-1s)  that are required to have been filed with the
                    IRS, the United States  Department of Labor, the PBGC or any

                                       45

                    other  Governmental  Authority  have been  filed on a timely
                    basis in each  instance  in which the  failure  to file such
                    reports,  returns and other  documents  would  result in any
                    material Liability to PCC or the Asset Sale Companies;

               (iii)other than routine claims for benefits,  no Liens,  lawsuits
                    or complaints to or by any Person or Governmental  Authority
                    have  been  filed  or,  to  the   Knowledge   of  PCC,   are
                    contemplated  or  threatened,  with  respect to any Employee
                    Benefit Plan (other than the Multiemployer Plans) except for
                    those that would not reasonably be expected to result in any
                    material Liability to PCC or the Asset Sale Companies.

          (e)  Neither PCC nor any of the Asset Sale  Companies  has  received a
               written  notice of, or incurred,  any  withdrawal  liability with
               respect to a Multiemployer Plan.

          (f)  The  consummation  of  the  transactions   contemplated  by  this
               Agreement  will not (i) entitle any Person to  severance  pay for
               which Buyer will be liable after the Closing; (ii) accelerate the
               time of payment or vesting of, increase the amount of, or satisfy
               a  condition  to the  compensation  due to any  Person  under any
               Employee  Benefit  Plan for which Buyer will be liable  after the
               Closing;  or (iii) result in the payment of an amount that could,
               individually  or in  combination  with any  other  such  payment,
               constitute  an "excess  parachute  payment"  under  Code  Section
               280G(b)(1).

          (g)  No "prohibited  transaction"  (as such term is defined in Section
               406 of ERISA or  Section  4975 of the  Code)  has  occurred  with
               respect to any Employee Benefit Plan subject to ERISA, other than
               such a  transaction  subject to an  administrative  or  statutory
               exemption,  with respect to which a Tax,  penalty or other amount
               may reasonably be expected to be imposed on any of the Asset Sale
               Companies or their respective ERISA Affiliates.

                                       46

          (h)  Neither the PCC Parent,  PCC, the Asset Sale Companies nor any of
               their respective  ERISA  Affiliates,  nor any  organization  with
               respect  to which  any  such  entity  is a  successor  or  parent
               corporation,  within the meaning of Section 4069(b) of ERISA, has
               engaged in any transaction  described in Sections 4069 or 4212(c)
               of ERISA.

          (i)  Each Pension Plan that is not qualified under Code Section 401(a)
               or 403(a) is exempt  from Parts 2, 3 and 4 of Title I of ERISA as
               an unfunded plan that is maintained  primarily for the purpose of
               providing deferred  compensation for a select group of management
               or  highly  compensated  employees,  pursuant  to ERISA  Sections
               201(2), 301(a)(3) and 401(a)(1).

          (j)  No assets of any of the Asset Sale  Companies are allocated to or
               held in a "rabbi trust" or similar funding vehicle.

          (k)  Neither the PCC Parent,  PCC, the Asset Sale Companies nor any of
               their  respective  ERISA Affiliates has received any notification
               that any  Multiemployer  Plan is in  reorganization  (within  the
               meaning  of Section  4121 of ERISA),  is  insolvent  (within  the
               meaning of Section 4245 of ERISA) or has been terminated  (within
               the meaning of Title IV of ERISA),  and to the  Knowledge of PCC,
               no   Multiemployer   Plan  is   reasonably   expected  to  be  in
               reorganization, insolvent or terminated.

          (l)  No Welfare Plan is a "multiple  employer welfare  arrangement" as
               defined in Section 3(40) of ERISA.

                                       47

     3.12. Employment Matters.

     None of the Asset Sale  Companies is a party to,  bound by, or  negotiating
with  respect  to any  agreement  with any  labor  union,  association  or other
employee  group,  nor is any  unit of  Employees  of the  Asset  Sale  Companies
represented  by any  labor  union or  similar  association.  No  labor  union or
employee  organization  has  been  certified  or  recognized  as the  collective
bargaining  representative of any Employees of the Asset Sale Companies.  To the
Knowledge  of  PCC,  there  are no  active  union  organizational  campaigns  or
representation  proceedings underway or threatened with respect to any Employees
of the Asset Sale  Companies,  nor are there any  existing or  threatened  labor
strikes, work stoppages,  slowdowns,  grievances, unfair labor practice charges,
discrimination  charges  or  labor  arbitration   proceedings  affecting  Mining
Activities at or  deliveries  to any mine or other  facility of any of the Asset
Sale  Companies.  Each of the Asset Sale Companies has been and is in compliance
with all applicable Laws respecting employment and employment  practices,  terms
and conditions of employment and wages and hours, except where the failure to be
in compliance would not reasonably be expected to impose any material  Liability
on the Asset Sale Companies.

     3.13. No Broker.

     None  of the  Asset  Sale  Companies,  PCC or the  PCC  Parent  has had any
dealings,  negotiations or  communications  with or retained any broker or other
intermediary in connection with the transactions  contemplated by this Agreement
and none of the  foregoing  is committed  to any  Liability  for any brokers' or
finders'  fees  or  any  similar  fees  in  connection  with  the   transactions
contemplated hereby, other than Rothschild Inc., who shall be compensated solely
by PCC or an  Affiliate  of PCC.

                                       48

     3.14.  Health and  Safety  Requirements.

     As it relates to the Purchased Assets, each of the Asset Sale Companies has
complied with all applicable Health and Safety Requirements and no action, suit,
proceeding, hearing, investigation,  charge, complaint, claim, demand, or notice
is currently  outstanding against any of them alleging any failure to so comply,
except  for those  that  would not  reasonably  be  expected  to have a Material
Adverse Effect.

     3.15. Restrictions on Business Activities.

     Except for this  Agreement,  there is no agreement,  judgment,  injunction,
order or decree  binding upon PCC or any of the Asset Sale Companies that has or
would  reasonably be expected to have the effect of  prohibiting  the conduct of
the Business.

     3.16. Powers of Attorney.

     There are no  outstanding  powers of attorney  executed on behalf of any of
the Asset Sale Companies affecting the Purchased Assets.

     3.17. Transactions With Affiliates.

     The Contracts do not include any  Liability  between any Asset Sale Company
and any  Affiliate of such Asset Sale  Company.  At the Closing,  the  Purchased
Assets will not include any  receivable or other  Liability from an Affiliate of
any Asset Sale Company.

     3.18. Absence of Certain Payments.

     During the five (5) year period prior to the date of this Agreement, to the
Knowledge of PCC, none of the Asset Sale  Companies  have (nor has any director,
officer,  agent,  or  employee of any Asset Sale  Company nor any other  person,
acting on behalf of any Asset Sale Company) directly or indirectly:  used any of
such company's funds for unlawful contributions,  gifts,  entertainment or other
unlawful expenses relating to political  activity;  made any unlawful payment to

                                       49

foreign or domestic government  officials or employees or to foreign or domestic
political parties or campaigns from such company's funds; violated any provision
of the  Foreign  Corrupt  Practices  Act of 1977  applicable  to  such  company;
established  or  maintained  any unlawful or unrecorded  fund of such  company's
monies  or other  assets;  made any  false or  fictitious  entry on the books or
records of such company; or made any bribe, rebate,  payoff,  influence payment,
kickback, or other unlawful payment, to any person or entity, private or public,
regardless of form, whether in money, property, or services, to obtain favorable
treatment  in  securing  business  or to  obtain  special  concessions  for such
company,  or to pay for favorable  treatment for business secured or for special
concessions already obtained for such company.

     3.19. Disclosure.

     The  representations  and  warranties  contained in this Article III do not
contain any untrue  statement  of a material  fact or omit to state any material
fact necessary in order to make the statements and information contained in this
Article III not misleading.

                                   ARTICLE IV
                     REPRESENTATIONS AND WARRANTIES OF BUYER

     Buyer hereby represents and warrants to PCC that:

     4.1. Organization.

     Buyer is a duly formed limited liability  company,  validly existing and in
good standing under the Laws of the State of Delaware.

     4.2. Execution, Delivery and Performance.

     The  execution,  delivery and  performance of this Agreement and each other
agreement or instrument  executed in connection  herewith or delivered  pursuant
hereto and the consummation of the transactions  contemplated herein and therein
will not,  with or without the giving of notice or the passage of time, or both,
(i) conflict with, or result in a violation or breach of, or a default, right to

                                       50

accelerate or loss of rights under, or result in the creation of any Lien, under
or pursuant  to, any  provision  of Buyer's  organizational  documents or of any
franchise,  mortgage,  deed of trust,  lease,  license,  instrument,  agreement,
consent,  approval,  waiver or  understanding,  any Law, or any finding,  order,
judgment, writ, injunction or decree to which Buyer is a party or by which Buyer
or its respective assets may be bound or affected; or (ii) require the approval,
consent or  authorization  of, or prior notice to,  filing with or  registration
with, any Governmental  Authority,  or any other Person or entity; provided that
this  Section  4.2  shall not apply to any  requirement  of Buyer to obtain  any
consent of the  applicable  Governmental  Authority  to  transfer  or modify the
Permits.

     4.3. Authorization.

     Buyer  has full  power  and  authority  to  enter  into  and  deliver  this
Agreement,  and each  other  agreement  or  instrument  (to which it is a party)
executed in connection  herewith or delivered pursuant hereto and to perform its
obligations   hereunder  and  thereunder.   Buyer's   execution,   delivery  and
performance of this Agreement and all other agreements and instruments  executed
in  connection  herewith  or  delivered  pursuant  hereto  and the  transactions
contemplated  hereby have been duly  authorized  by all requisite  action.  This
Agreement  and  all  other  agreements  or  instruments  executed  by  Buyer  in
connection  herewith  or  delivered  by Buyer  pursuant  hereto  have  been duly
executed and delivered by Buyer and this Agreement and all other  agreements and
instruments  executed  by Buyer in  connection  herewith or  delivered  by Buyer
pursuant  hereto  constitute  Buyer's  legal,  valid  and  binding   obligation,
enforceable in accordance with their respective terms (subject to any applicable
bankruptcy,  insolvency,  reorganization,   moratorium  or  other  similar  Laws
affecting generally the enforcement of creditors' rights).

                                       51

     4.4. No Broker.

     Buyer has had no dealings,  negotiations or communications  with any broker
or other  intermediary in connection with the transactions  contemplated by this
Agreement nor is it committed to any Liability for any brokers' or finders' fees
or any similar fees in connection  with the  transactions  contemplated  hereby.

     4.5. Reclamation and Environmental Compliance.

     Buyer and all  operators  it owns or controls  are in  compliance  with all
Environmental  Laws and Reclamation Laws in all material  respects,  and are not
"permit  blocked"  under  the  Applicant  Violator  System  administered  by the
Department of the Interior.

     4.6. Financing.

     Buyer  will have  available  to it,  at the  Closing,  financial  resources
sufficient to consummate the transactions  contemplated by this Agreement.

     4.7. Disclosure.

     The  representations  and  warranties  contained  in this Article IV do not
contain any untrue  statement  of a material  fact or omit to state any material
fact necessary in order to make the statements and information contained in this
Article IV not misleading.

                                    ARTICLE V
                               CERTAIN COVENANTS

     5.1. Operation in Ordinary Course.

     Except as provided in this  Agreement,  between the date of this  Agreement
and the Closing,  PCC shall cause each of the Asset Sale Companies,  in relation
to the Purchased Assets, to: (i) carry on its business in the Ordinary Course of
Business;  (ii) use  commercially  reasonable  efforts  to  preserve  intact its
current  business  organization,  Mining  Activities  and  properties  until the
Closing  Date,  and maintain  the  relations  and good will with its  suppliers,

                                       52

customers,   landlords,   creditors,   agents,   and  others   having   business
relationships with such Asset Sale Company; (iii) not enter into any contract or
other obligation  binding upon such Asset Sale Company  involving its Employees,
any union, or an expenditure,  purchase,  sale, cost or commitment  (unless such
contract is cancelable in thirty or fewer days, involves less than $100,000,  or
is for consumable  purchases)  without the prior written  consent of Buyer;  and
(iv) report  regularly to Buyer  concerning  the status of the business,  Mining
Activities and finances of such Asset Sale Company.

     5.2. Compliance with Law.

     Between the date of this Agreement and the Closing,  each of the Asset Sale
Companies  shall  comply  in all  material  respects  with all Laws and with all
orders of any Governmental Authority.

     5.3. Cooperation.

     Subject to the terms and conditions herein provided,  each of PCC and Buyer
agrees to use its commercially reasonable efforts to take, or cause to be taken,
all action,  and to do, or cause to be done,  all things  necessary,  proper and
advisable  under  Law,  to  consummate  and  make  effective  the   transactions
contemplated by this  Agreement.  In case at any time after the Closing Date any
further  action is  necessary  or  desirable  to carry out the  purposes of this
Agreement,  PCC and Buyer will,  and PCC will cause the Asset Sale Companies to,
execute any  additional  instruments  reasonably  necessary  to  consummate  the
transactions  contemplated  hereby. Prior to and following the Closing Date, PCC
shall make available to Buyer, at reasonable times, and in a manner so as not to
interfere with the normal business  operations of the Asset Sale Companies,  all
documents, maps and other information necessary to transfer all Permits to Buyer
in accordance with Law.

                                       53

     5.4. Notices and Consents.

     PCC and Buyer each will use their commercially reasonable efforts to obtain
consents of all  Governmental  Authorities and other third parties  necessary to
the consummation of the transactions  contemplated by this Agreement.  PCC shall
have  responsibility  for  providing  any notices to third  parties  that may be
required by the  transactions  contemplated by this Agreement and for obtaining,
or causing to be obtained,  at its sole cost and expense, the consents listed on
Schedule 5.4(a) and Buyer shall have  responsibility for obtaining,  at its sole
cost and expense,  all consents listed on Schedule 5.4(b),  which Schedule shall
include all  Equipment  leases,  and all  consents  necessary  to  transfer  the
Permits,  with the other  party in each case using its  commercially  reasonable
efforts to assist the  responsible  party in obtaining such consents or Permits.

     5.5. Publicity.

     All  general  notices,  releases,  statements  and  communications  to  any
Employees, suppliers, distributors and customers of the Asset Sale Companies, to
the general public and to the press relating to the transactions contemplated by
this  Agreement  shall be made only at such  times and in such  manner as may be
mutually  agreed upon by PCC and Buyer;  provided,  however,  that either  party
hereto  (or,  in the case of PCC,  the PCC  Parent)  shall be entitled to make a
public  announcement  of the  foregoing  if:  (a) in the  opinion  of its  legal
counsel,  such  announcement  is  required  to  comply  with Law or any  listing
agreement  with any  national  securities  exchange  or  inter-dealer  quotation
system;  and (b) such disclosing  party gives a reasonable  period of notice and
opportunity  to comment to the other party hereto of its  intention to make such
public  announcement;  provided,  that,  failure to  comment  within 24 hours of
receipt of such notice shall be deemed a waiver of the  opportunity  to comment;

                                       54

and  provided,  further,  that  nothing  in this  Section  5.5 shall  operate to
prohibit any Asset Sale Company or Buyer from  communicating,  after the Closing
Date, with their respective suppliers, distributors,  customers and Governmental
Authorities the fact that the transaction has occurred or to employees regarding
their  employment  or the terms and  conditions  thereof,  the  operation of the
Purchased  Assets  or  matters  necessarily   related  thereto.

     5.6. Permits; Replacement Bonds; Insurance and Guarantees; Other Filings.

          (a)  At or prior to the Closing  Date,  Buyer  shall:  (i) secure,  in
               accordance with Law, irrevocable commitments to issue replacement
               bonds and replacement  sureties and guarantees or other financial
               security, if applicable,  for all Permits sufficient to cause the
               applicable  Governmental  Authority  to  transfer  the Permits to
               Buyer in  accordance  with Law; and (ii)  deliver  copies of such
               documents to PCC.

          (b)  At or prior to the Closing Date,  Buyer shall  deliver  copies to
               PCC  of  all  filings,   each  in  a  form  that   satisfies  all
               requirements  of the applicable  Governmental  Authority and that
               are necessary to cause the applicable  Governmental  Authority to
               transfer the Permits to Buyer in accordance with Law.

          (c)  Promptly  following the Closing Date through the  application  of
               best efforts,  Buyer shall make all filings with the  appropriate
               Governmental   Authorities   and  shall,   upon  submitting  such
               applications  to transfer such Permits,  post  replacement  bonds
               necessary  under  Laws  to  transfer  the  Permits  to  Buyer  in
               accordance with Law.

          (d)  Following  the Closing  Date,  PCC will cause each of the Permits
               that is in its name or in the name of an Asset Sale Company to be
               retained  in its name or in the name of such Asset Sale  Company,
               as  appropriate,  until  the  applicable  Governmental  Authority
               transfers  the  Permits to Buyer.  Buyer may rely on any  related
               bonds held or guaranteed by PCC or an Affiliate of PCC;  provided

                                       55

               that Buyer reimburses PCC for bond premiums,  security, Office of
               Surface Mining fees,  amounts required to be paid to correct (and
               to pay  fines  or  assessments  with  respect  to) any  violation
               occurring  after the  Closing  Date and any direct  out-of-pocket
               costs  incurred by PCC or its  Affiliates in connection  with the
               maintenance  of such Permits or the related  bonds  following the
               Closing Date.  Buyer agrees to use the same efforts to accomplish
               the transfer of the Permits as soon as possible after the Closing
               that it would use to obtain its own permits to commence immediate
               mining operations at any site.

          (e)  To the extent allowed by and in accordance  with  applicable Law,
               PCC shall cause each of the Asset Sale  Companies  to grant Buyer
               the right to conduct Mining Activities on the properties included
               in the Purchased Assets under each of the Permits;  provided that
               if the appropriate Governmental Authority has not transferred any
               Permit by the first  anniversary of the Closing Date,  Buyer will
               deposit  in  escrow  cash  or a  letter  of  credit  from  a bank
               reasonably  acceptable  to PCC in an  amount  equal  to the  face
               amount of any related  outstanding surety bonds until such Permit
               has been transferred.

          (f)  If PCC or one of the Asset  Sale  Companies  receives a notice of
               violation under any of the Permits following the Closing Date but
               before the  transfer  of the Permit,  PCC will give Buyer  prompt
               notice thereof. If PCC reasonably  determines that Buyer will not
               cause such violation to be cured in a timely  fashion,  PCC shall
               have the  right to cure,  or cause to be  cured,  such  violation
               itself and be reimbursed by Buyer for curing such violation.

          (g)  At or  prior to the  Closing  Date,  Buyer  shall  have:  (i) for
               purposes  other  than the  Permits,  secured  replacement  bonds,
               replacement sureties,  guarantees or other financial security, if

                                       56

               applicable,  sufficient  to allow PCC and the Persons who will be
               its Affiliates  after the Closing Date to be relieved or released
               as  of  the  Closing   Date  from  all   financial   commitments,
               guarantees,  collateral agreements or similar undertakings listed
               on Schedule 5.6; (ii) obtained  property and liability  insurance
               customary  for a company  that is  engaged in the  Business  or a
               business similar to the Business to insure the Purchased  Assets;
               and (iii)  delivered  copies of such  documents to PCC.

          (h)  On or prior to the  Closing,  Buyer shall  deliver to PCC:  (i) a
               Certificate of Good Standing for self-insured  status or evidence
               of insurance  coverage  with respect to Buyer's  Liabilities  for
               workers'  compensation and federal black lung benefits that arise
               out of employment by Buyer or any of its  Affiliates of Employees
               on and after the Closing  Date,  to the extent and in the amounts
               provided in  applicable  Laws;  and (ii)  certification  from the
               Department  of Labor of  approval of  self-insured  status in the
               event Buyer is to be  self-insured  for federal  black lung claim
               liability.

     5.7. Exclusivity.

     PCC will not (nor will it cause or permit any of the Asset  Sale  Companies
to) (i) solicit,  initiate or encourage the  submission of any proposal or offer
from any Person  relating  directly  or  indirectly  to the  acquisition  of the
Purchased Assets, or any portion thereof, or (ii) participate in any discussions
or negotiations  regarding,  furnish any information  with respect to, assist or
participate in, or facilitate in any other manner,  any effort or attempt by any
Person to do or seek any of the foregoing.  PCC will notify Buyer immediately if
any Person makes any proposal,  offer, inquiry or contact with respect to any of
the foregoing.

                                       57

     5.8. Access.

     At or prior to the  Closing  Date,  PCC will permit (and will cause each of
the Asset Sale Companies to permit) representatives of Buyer to have full access
at all reasonable  times, and in a manner so as not to interfere with the normal
business  operations of the Asset Sale Companies,  to all premises,  properties,
personnel, books, records (including Tax records), contracts and documents of or
pertaining  to each of the Asset Sale  Companies  as  related  to the  Purchased
Assets. Copies of and access to accounting records,  ledgers and other pertinent
documents or work papers related to the Purchased  Assets will be made available
to Buyer at all  reasonable  times,  and in a manner so as not to interfere with
the normal business operations of the Asset Sale Companies,  upon request.

     5.9. Notice of Developments.

     Each  party  will give  prompt  written  notice  to the other  party of any
material adverse  development causing a breach of any of its own representations
and  warranties in Article III and Article IV above.  No disclosure by any party
pursuant to this Section 5.9,  however,  shall be deemed to amend or  supplement
the Schedules to such  representations  and warranties or to prevent or cure any
misrepresentation,  breach of warranty or breach of  covenant.

     5.10. Financial Statement Cooperation and Audits.

          (a)  PCC and Buyer shall  engage KPMG LLP  pursuant to the  Engagement
               Letter  to audit  the  combined  balance  sheets,  statements  of
               income,  cash flow and  stockholders'  equity (the  "Fiscal  Year
               Financial  Statements")  as of and for  the  fiscal  years  ended
               December  31,  2000 and 2001 for the  Asset  Sale  Companies  and
               certain of their  Affiliates who conduct the coal mining and sale
               and  export  terminal  and  equipment  rebuilding,  repairing  or

                                       58

               servicing  business  of PCC in  Virginia,  except  as  listed  on
               Schedule 5.10(a) (the "Virginia  Entities"),  including notes and
               disclosures required by GAAP. The parties shall cause KPMG LLP to
               deliver a draft of the Fiscal Year  Financial  Statements to both
               parties  for  review.  Each of the  parties  shall  have ten (10)
               business  days  to  review  such  draft  Fiscal  Year   Financial
               Statements and provide any comments to KPMG LLP.  Notwithstanding
               any  provisions  of this  Agreement  to the  contrary  and unless
               agreed to by both  parties,  the Closing Date shall be no earlier
               than forty-five (45) days from the date on which the final Fiscal
               Year Financial  Statements shall be delivered by KPMG LLP to both
               parties.

          (b)  PCC agrees that the Fiscal Year Financial  Statements  (including
               the notes  thereto)  will (i) use  accounting  policies  that are
               consistent with PCC Parent's audited financial  statements,  (ii)
               be  prepared in  conformity  with GAAP,  applied on a  consistent
               basis  throughout the periods  covered  thereby and (iii) present
               fairly  the   financial   position,   condition  and  results  of
               operations of the Virginia Entities as of such dates.

          (c)  At any time  between the date of this  Agreement  and the Closing
               Date,  Buyer shall have the right,  in its reasonable  discretion
               and upon  reasonable  advance  notice to PCC,  to require  PCC to
               provide Buyer with unaudited  internally prepared balance sheets,
               statements  of  income  and cash flow for the  Virginia  Entities
               individually  or on a combined basis as Buyer may request as of a
               more  recent  month end than  December  31,  2001,  which will be
               prepared in a manner that is consistent  with past  practices and
               with the books and records of the Virginia Entities.

          (d)  After  the  Closing  Date,  PCC  will  furnish,  or  cause  to be
               furnished to Affiliates of Buyer,  its  accountants and auditors,
               upon  request  of Buyer  and as  promptly  as  practicable,  such

                                       59

               information  and  assistance  as  is  reasonably   necessary  for
               Affiliates  of Buyer to cause  to be  prepared  audited  combined
               balance sheets,  statements of income, cash flow and stockholders
               equity for the  Virginia  Entities as of the Closing Date and for
               the period  beginning on January 1, 2002 and ended on the Closing
               Date (the "Audited Closing Date Financial  Statements")  that are
               consistent with the significant  accounting policies disclosed in
               the footnotes to the Fiscal Year Financial  Statements (except as
               such  consistency  may be affected by accounting  principles that
               have an effective date  subsequent to the date of the Fiscal Year
               Financial   Statements),   in  conformity   with  GAAP  and  with
               Regulations  S-K and S-X  promulgated by the SEC and applied on a
               consistent basis throughout the period covered thereby.

          (e)  With respect to any registration  statement or other filings with
               the SEC that Buyer shall  determine  to make in the  future,  PCC
               shall use commercially reasonable best efforts to timely furnish,
               or cause to be timely  furnished  to  Affiliates  of  Buyer,  its
               accountants and auditors,  upon request of Buyer,  the following:
               (i) consents of PCC's independent public accountants with respect
               to the audited  Fiscal Year  Financial  Statements as required by
               SEC  Regulation  S-X,  (ii)  such  information,   assistance  and
               cooperation  (including  information,  assistance and cooperation
               from PCC's independent  auditors) as is reasonably  necessary for
               Buyer and Affiliates of Buyer to: (a) address and resolve any SEC
               comments  related to the Fiscal Year Financial  Statements or the
               Audited Closing Date Financial Statements (including any required
               modification of such financial  statements or footnotes  thereto)
               and (b) prepare any MD&A Disclosure required in connection with a
               filing with the SEC and  address  and  resolve  any SEC  comments
               related  to  such  MD&A   Disclosure   (including   any  required
               modification to such MD&A  Disclosure),  (iii) such  information,

                                       60

               assistance  and  cooperation  reasonably  necessary  for Buyer to
               prepare  any  unaudited  pro  forma  balance   sheets  or  income
               statements  required  to be  included  in any  such  registration
               statement  or  other  SEC  filing  and  (iv)  such   information,
               assistance  and  cooperation  reasonably  necessary  for Buyer to
               accumulate   five  years  of   historical   unaudited   financial
               information  of the Virginia  Entities for  inclusion in any such
               registration statement or other filing with the SEC.

          (f)  PCC and its Affiliates shall reasonably cooperate with Buyer, its
               accountants and auditors in the conduct of the actions  described
               in the preceding  sentence and shall allow Buyer, its accountants
               and  auditors  to have  access at all  reasonable  times and upon
               reasonable advance notice, and in a manner so as not to interfere
               with the normal  business  operations  of PCC,  to all  premises,
               properties,  books,  records,  contracts,  and  documents  of  or
               pertaining to Buyer's audit of the Audited Closing Date Financial
               Statements. In addition, PCC will provide access to PCC's and its
               Affiliates'  employees,  including,  without  limitation,  making
               employees   available  to  provide  additional   information  and
               explanation of any materials  reviewed by Buyer,  its accountants
               and auditors;  provided,  however,  Buyer's use of such employees
               shall not unreasonably  interfere with such employee's  duties to
               his or her employer.

     5.11. Coal Inventory.

     PCC shall use its commercially  reasonable  efforts to have 110,000 tons of
Coal Inventory as of the Closing Date.

     5.12. Further Assurances.

     The parties shall cooperate in a commercially  reasonable  manner with each
other and with their  respective  representatives  in connection  with any steps
required  to be  taken  as part  of  their  respective  obligations  under  this

                                       61

Agreement,  and shall (a)  furnish  upon  request  to each  other  such  further
information; (b) execute and deliver to each other such other documents; and (c)
do such other acts and things, all as the other party may reasonably request for
the purpose of carrying out the intent of this  Agreement  and the  transactions
contemplated.

                                   ARTICLE VI
                         CONDITIONS PRECEDENT TO CLOSING

     6.1. Conditions Precedent to Each Party's Obligations.

     The respective  obligations  of each party to consummate  the  transactions
contemplated  by this Agreement are subject to the  satisfaction  at or prior to
the Closing Date of the following conditions precedent:

          (a)  no action,  suit,  proceeding,  order, decree or injunction shall
               have been  commenced,  threatened  or  entered  by or before  any
               Governmental  Authority  that  remains  in  force  and  that  (i)
               prohibits,  seeks to  prohibit,  or imposes or seeks  substantial
               damages in connection  with, the consummation of the transactions
               contemplated by this Agreement, (ii) seeks or imposes relief that
               causes or would  cause any of the  transactions  contemplated  by
               this Agreement to be rescinded following  consummation,  or (iii)
               affects  adversely the right of Buyer to own the Purchased Assets
               or to operate the Business on or after the Closing Date;

          (b)  PCC Parent,  PCC,  Buyer and Buyer's  Ultimate  Parent shall have
               executed  and   delivered   to  each  other  party   thereto  the
               Administrative Services Agreement, the Cooperation Agreement, the
               Indemnification  and Guaranty  Agreement,  and  Paramont  Service
               Agreement   and  any   other   documentation   required   in  all
               transactions contemplated or covered by all such agreements,  all
               in form and  substance  as set  forth in  Exhibits  A, E, H and F
               attached hereto and the same shall be in full force and effect;

                                       62

          (c)  all  other  transactions  pursuant  to which  Buyer or any of its
               Affiliates acquire assets related to the Business shall have been
               consummated  prior to or  simultaneously  with  the  transactions
               contemplated by this Agreement;

          (d)  PCC and Buyer shall have executed and delivered to each other all
               such other  documents or instruments  necessary or appropriate to
               effect the transactions contemplated by this Agreement, including
               the documents provided in Section 5.6 hereof; and

          (e)  PCC shall have  obtained,  or caused to have been  obtained,  the
               consents listed in Schedule 6.1(e)(i) and PCC shall have provided
               such  payments as may be  reasonably  required to obtain all such
               consents.  Buyer  shall  have  obtained,  or  caused to have been
               obtained,  the consents  listed in Schedule  6.1(e)(ii) and Buyer
               shall have provided such payments,  guarantees  and/or assurances
               as may be reasonably required to obtain all such consents.

     6.2. Conditions Precedent to Obligations of Buyer.

     The  obligations of Buyer to consummate the  transactions  contemplated  by
this  Agreement  are  subject to the  satisfaction  or waiver at or prior to the
Closing Date of the following conditions precedent:

          (a)  all of the  representations  and  warranties  of PCC set forth in
               this Agreement or in any Exhibit,  Schedule or document delivered
               pursuant   hereto,   without  regard  to  any   qualification  or
               limitation  with respect to materiality  (whether by reference to
               "Material  Adverse  Effect"  or  otherwise),  shall  be true  and
               correct in all  respects  as of the date  hereof and at and as of
               the   Closing   Date  with  the  same   effect  as  though   such
               representations and warranties were made at and as of the Closing
               unless  the  aggregate   failure  of  such   representations   or

                                       63

               warranties  to be true  and  correct  does  not  have a  Material
               Adverse Effect;  provided that if a representation or warranty is
               expressly  made only as of a specific  date, it need only be true
               and correct in all respects as of such date, and Buyer shall have
               received the PCC Closing  Certificate  required by Section 6.2(g)
               below  dated  as of the  Closing  Date  executed  by PCC to  such
               effect;

          (b)  all of the  covenants  and  obligations  that PCC is  required to
               perform or to comply with pursuant to this  Agreement at or prior
               to the Closing Date shall have been duly  performed  and complied
               with in all material respects;

          (c)  all proceedings  and actions,  corporate or other, to be taken by
               PCC  or  the  Asset  Sale   Companies  in  connection   with  the
               transactions  contemplated  by this  Agreement  and all documents
               incident  thereto,  including all actions  necessary to authorize
               the execution, delivery and performance of this Agreement and the
               transactions contemplated hereby, shall have been taken and shall
               be  reasonably  satisfactory  in form and  substance to Buyer and
               Buyer's counsel;

          (d)  PCC shall have, and shall have caused the Asset Sale Companies to
               have,  executed and delivered the Bills of Sale,  the  Assignment
               and  Assumption  Agreements  and such other  documents  as may be
               necessary to convey to Buyer the Purchased Assets;

          (e)  between the date of this  Agreement and the Closing  Date,  there
               shall  not  have  been  a  change,   event  or  occurrence  that,
               individually,  or  together  with  any  other  change,  event  or
               occurrence,  has had or could  reasonably  be  expected to have a
               Material Adverse Effect;

                                       64

          (f)  Buyer shall have  received an opinion of counsel to PCC addressed
               to Buyer substantially in the form of Exhibit J;

          (g)  Buyer shall have  received  an  executed  copy of the PCC Closing
               Certificate; and

          (h)  KPMG LLP shall have  issued an  unqualified  audit  opinion  with
               respect to the Fiscal Year Financial  Statements  pursuant to the
               Engagement Letter.

     6.3. Conditions Precedent to Obligations of PCC.

     The  obligation  of PCC to  consummate  and cause the  consummation  of the
transactions  contemplated  by this Agreement is subject to the  satisfaction or
waiver at or prior to the Closing Date of the following conditions precedent:

          (a)  all of the  representations  and warranties of Buyer set forth in
               this Agreement or in any Exhibit,  Schedule or document delivered
               pursuant   hereto,   without  regard  to  any   qualification  or
               limitation with respect to materiality, shall be true and correct
               in  all  respects  as of  the  date  hereof  and at and as of the
               Closing Date with the same effect as though such  representations
               and  warranties  were made at and as of the  Closing  unless  the
               aggregate  failure of such  representations  or  warranties to be
               true and  correct  does not have a  material  adverse  effect  on
               Buyer's  ability to consummate the  transactions  contemplated by
               this Agreement or fulfill its post-Closing obligations hereunder;
               provided that if a  representation  or warranty is expressly made
               only as of a specific  date,  it need only be true and correct in
               all respects as of such date, and PCC shall have received Buyer's
               Closing Certificate  required by Section 6.3(j) below dated as of
               the Closing Date executed by Buyer to such effect;

                                       65

          (b)  all of the  covenants and  obligations  that Buyer is required to
               perform or to comply with pursuant to this  Agreement at or prior
               to the Closing Date shall have been duly  performed  and complied
               with in all material respects;

          (c)  all proceedings  and actions,  corporate or other, to be taken by
               Buyer in connection  with the  transactions  contemplated by this
               Agreement,  and all  documents  incident  thereto,  including all
               actions  necessary  to  authorize  the  execution,  delivery  and
               performance of this Agreement and the  transactions  contemplated
               hereby,   shall   have  been   taken  and  shall  be   reasonably
               satisfactory in form and substance to PCC and its counsel;

          (d)  PCC shall have received,  on behalf of the Asset Sale  Companies,
               the Purchase Price by wire transfer of cash or other  immediately
               available  funds and the  execution  and delivery by Buyer of the
               Promissory Note;

          (e)  Buyer shall have executed and delivered the Security Agreement;

          (f)  Buyer  shall have  executed  and  delivered  the  Assignment  and
               Assumption   Agreements  and  such  other  documents  as  may  be
               necessary for Buyer to assume all of the Assumed Liabilities;

          (g)  Buyer  shall  have  delivered  to PCC  satisfactory  evidence  of
               compliance with Sections 5.6(a), 5.6(g) and 5.6(h);

          (h)  between the date of this  Agreement and the Closing  Date,  there
               shall  not  have  been  a  change,   event  or  occurrence  that,
               individually,  or  together  with  any  other  change,  event  or
               occurrence,  has had or could  reasonably  be  expected to have a
               Material Adverse Effect;

                                       66

          (i)  PCC shall have received an opinion of counsel to Buyer  addressed
               to PCC substantially in the form of Exhibit K; and

          (j)  PCC shall have  received  an  executed  copy of  Buyer's  Closing
               Certificate.

                                  ARTICLE VII
                               CERTAIN TAX MATTERS

     7.1. Property Taxes.

     Property  Taxes of the Asset Sale  Companies  with respect to the Purchased
Assets  (including,  without  limitation,  property Taxes payable as a tenant or
lessee  under  any  lease)  will  be  pro-rated  as of  the  Closing  Date  and,
notwithstanding  any other provision of this  Agreement,  the economic burden of
any such  property  Tax will be borne by (i) the Asset  Sale  Companies  for all
Pre-Closing  Periods and the portion of any Straddle  Period through the Closing
Date and (ii) by Buyer  for all  Post-Closing  Periods  and the  portion  of any
Straddle Period after the Closing Date.  Accordingly,  notwithstanding any other
provision of this Agreement,  (i) if any Asset Sale Company pays such a property
Tax with  respect to a  Post-Closing  Period or the portion of  Straddle  Period
after the Closing  Date,  Buyer will  reimburse PCC on behalf of such Asset Sale
Company within 15 days after receiving from PCC written demand for the amount of
such  property Tax, and (ii) if Buyer pays such a property Tax with respect to a
Pre-Closing Period or the portion of a Straddle Period through the Closing Date,
PCC on behalf of the Asset Sale Companies  will  reimburse  Buyer within 15 days
after  receiving  from Buyer written demand for the amount of such property Tax.
For  purposes of  pro-rating  property  Taxes,  the amount of any  property  Tax
attributable  to the portion of a Straddle Period through the Closing Date shall
be deemed to be the amount of such property Taxes for the entire Straddle Period
multiplied  by a fraction,  the  numerator of which is the number of days in the
Straddle  Period  through the Closing Date and the  denominator  of which is the
number of days in the entire Straddle Period. In determining the Straddle Period

                                       67

for property  Taxes,  the Tax period as reflected on the statement of Taxes due,
property Tax bill,  property "tax ticket," or any other request for payment from
a  Governmental  Authority  will  determine the taxable period (e.g., a Virginia
property  Tax  bill  that  indicates  the tax  year as 2002 is for a Tax for the
taxable period January 1, 2002 through December 31, 2002).

     7.2. Sales and Use Taxes.

     Buyer  and  PCC  or  the  Asset  Sale  Companies  hereby  intend  that  the
transaction  be an  occasional  sale within the meaning of Virginia Code Section
58.1-602 and regulations  thereunder,  and therefore  exempt from Virginia sales
and use Tax pursuant to Virginia Code Section 58.1-609.  PCC will be responsible
for sales and use Taxes  payable as a result of the failure of this  transaction
to qualify as an  occasional  sale or as an exempt  transaction  under any other
Virginia law;  provided,  however,  that any use Tax payable as a result of this
transaction  that  would  be  payable  regardless  of  whether  the  transaction
qualifies as an  occasional  sale or not shall be paid by Buyer.

     7.3. Transfer Taxes.

     All transfer,  recording  and similar Taxes arising in connection  with the
transactions contemplated hereunder shall be borne equally by PCC and Buyer. PCC
and Buyer shall (and they shall cause their respective  Affiliates to) cooperate
to comply  with all Tax  Return  requirements  for such Taxes and  provide  such
documentation  and take such other  actions as may be  necessary to minimize the
amount of any such Taxes.

     7.4. Access for Tax Returns.

     Following the Closing Date,  Buyer shall,  at  reasonable  times,  and in a
manner so as not to interfere with normal business operations, allow PCC (and if
requested by PCC, representatives of federal, state or local agencies) access to
the Purchased Assets for purposes of reviewing  information pertinent to any Tax
Return filed by PCC Parent or any of its  Affiliates,  including  the Asset Sale
Companies.

                                       68

                                  ARTICLE VIII
                         COVENANTS REGARDING EMPLOYEES

     8.1. Employees.

          (a)  Subject to the requirements of applicable Laws, but no later than
               immediately prior to the Closing, PCC will cause those Asset Sale
               Companies set forth on Schedule 8.1 to terminate  the  employment
               of their Employees with respect to the Purchased Assets.

          (b)  From  time to time  after  the  Closing  Date,  PCC and Buyer may
               require  information with respect to current or former Employees.
               Without  intending to limit the obligations of the parties in the
               exchange of  information  with  respect to any other matter or in
               accordance with the Cooperation Agreement, PCC and Buyer agree to
               furnish such  information  to the other,  if available,  promptly
               after receipt of a written request therefor.

                                   ARTICLE IX
                                   TERMINATION

     9.1. Termination.

     This Agreement may be terminated prior to the Closing Date only as follows:

          (a)  by mutual written consent of PCC and Buyer;

          (b)  by  either  PCC or  Buyer,  if the  Closing  Date  shall not have
               occurred  prior to the close of business on December  31, 2002 or
               such later date as the  parties  may agree in writing  (provided,
               that the right to  terminate  this  Agreement  under this Section
               9.1(b) shall not be

                                       69

               available  to any party whose  failure to fulfill any  obligation
               under this Agreement has been the cause, in whole or in part, of,
               or has resulted in, the failure of the  conditions  in Article VI
               to be  satisfied  and the Closing Date to occur on or before such
               date);

          (c)  by PCC or Buyer if an action,  suit,  or  proceeding,  shall have
               been  commenced  or  threatened  by or  before  any  Governmental
               Authority,  or any order,  decree or  injunction  shall have been
               entered  therein,  that  (i)  prohibits,  seeks to  prohibit,  or
               imposes or seeks  substantial  damages in  connection  with,  the
               consummation of the transactions  contemplated by this Agreement,
               (ii) seeks or imposes  relief  that  causes or would cause any of
               the  transactions  contemplated by this Agreement to be rescinded
               following  consummation,  or (iii) affects adversely the right of
               Buyer to own the Purchased Assets or to operate the Business;

          (d)  by  Buyer if (i) the  representations  of PCC  contained  in this
               Agreement are not true and correct in all material respects as if
               made at and as of that time,  except for  failures to be true and
               correct  that are capable of being and are cured  within  fifteen
               (15) days after written notice from Buyer to PCC of such failure;
               or (ii) PCC has failed to comply  materially  with its respective
               obligations  under this Agreement,  except for failures to comply
               that are capable of being and are cured within  fifteen (15) days
               after written notice from Buyer to PCC of such failure; or

          (e)  by PCC if (i) the  representations  of  Buyer  contained  in this
               Agreement are not true and correct in all material respects as if
               made at and as of that time,  except for  failures to be true and
               correct  that are capable of being and are cured  within  fifteen
               (15) days after written notice from PCC to Buyer of such failure;
               or  (ii)  Buyer  has  failed  to  comply   materially   with  its

                                       70

               obligations  under this Agreement,  except for failures to comply
               that are capable of being and are cured within  fifteen (15) days
               after written notice from the PCC to Buyer of such failure.

     9.2. Effect of Termination.

     If this Agreement is terminated pursuant to Section 9.1 hereof, all further
obligations of the parties under or pursuant to this Agreement  shall  terminate
without further Liability of either party to the other except:  (a) as set forth
in  Section  10.4;  and (b) for  breaches  of  representations,  warranties,  or
covenants or for fraud.  PCC and Buyer hereby agree that the  provisions of this
Section 9.2 and of Section 10.4 shall survive any  termination of this Agreement
pursuant to the provisions of this Article IX.

                                   ARTICLE X
                                 MISCELLANEOUS

     10.1. Entire Agreement.

     This  Agreement,  the  documents  referred  to herein  and to be  delivered
pursuant hereto and any other agreement entered into contemporaneously with this
Agreement  among PCC,  PCC  Parent,  Buyer and  Buyer's  Ultimate  Parent or the
Affiliates of any of them  constitute the entire  agreement  between the parties
pertaining to the subject  matter  hereof,  and supersede all prior  agreements,
understandings,  negotiations  and  discussions of the parties,  whether oral or
written,  and  there  are no  warranties,  representations  or other  agreements
between the parties in  connection  with the subject  matter  hereof,  except as
specifically set forth herein or therein.

     10.2. Amendment.

     This  Agreement  may be amended by an  instrument  in writing and signed on
behalf of all of the parties hereto at any time.

                                       71

     10.3. Extension; Waiver.

     At any time prior to the Closing Date,  the parties may (i) extend the time
for the performance of any of the obligations or other acts of the other parties
hereto,  (ii)  waive any  inaccuracies  in the  representations  and  warranties
contained herein or in any document,  certificate or writing delivered  pursuant
hereto  or (iii)  waive  compliance  with any of the  agreements  or  conditions
contained herein,  other than the conditions  contained in Section 6.1(a) hereof
as it  relates  to the  entry  of an  order  in any  proceeding  by or  before a
Governmental  Authority.  Any  agreement  on the  part of any  party to any such
extension or waiver shall be valid only if set forth in an instrument in writing
and signed on behalf of such party.

     10.4. Expenses.

     Whether  or  not  the  transactions  contemplated  by  this  Agreement  are
consummated, each of the parties hereto shall pay the fees and expenses of their
respective  counsel,  investment bankers,  financial  advisors,  accountants and
other experts and the other expenses incident to the negotiation and preparation
of this Agreement and  consummation  of the  transactions  contemplated  hereby;
provided  that  Buyer and PCC  shall  each pay 50% of the cost of  auditing  the
Fiscal  Year  Financial  Statements  and  the  Audited  Closing  Date  Financial
Statements and provided further that Buyer shall reimburse PCC or its Affiliates
for all  out-of-pocket  expenses  incurred by PCC or its Affiliates in complying
with their  respective  obligations  under Sections  5.10(e) and 5.10(f) hereof.

     10.5. Bulk Sales Waiver.

     Buyer hereby waives  compliance with all applicable bulk sales Laws.

                                       72

     10.6. Governing Law.

     This Agreement shall be construed and interpreted  according to the Laws of
the  Commonwealth  of  Virginia,  without  regard to the  conflicts of Law rules
thereof.

     10.7. Assignment.

     This  Agreement  and each party's  respective  rights  hereunder may not be
assigned  at any time except as  expressly  set forth  herein  without the prior
written  consent  of the other  party,  provided  that PCC may assign its rights
hereunder to any  Affiliate of PCC after the Closing Date without the consent of
Buyer and Buyer may assign its rights  hereunder to any Affiliate of Buyer prior
to, at or after  the  Closing  Date  without  the  consent  of PCC and,  further
provided,  that nothing in this Agreement  shall prevent a successor in interest
to either party from enforcing the provisions of this Agreement.

     10.8. 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  party in the
manner provided by this Section 10.8:

If to PCC:                    Pittston Coal Company
                              448 N.E. Main Street
                              P.O. Box 5100
                              Lebanon, Virginia 24266
                              Attention: President

                                       73

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:                  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.

     10.9. Counterparts; Headings.

     This Agreement may be executed in several counterparts, each of which shall
be deemed an original,  but such counterparts shall together  constitute but one
and the same Agreement.  The Table of Contents and Article and Section  headings
in this  Agreement are inserted for  convenience of reference only and shall not
constitute a part hereof.

                                       74

     10.10. Interpretation; Construction.

          (a)  Unless the  context  requires  otherwise,  all words used in this
               Agreement in the singular  number shall extend to and include the
               plural,  all  words in the  plural  number  shall  extend  to and
               include the  singular and all words in any gender shall extend to
               and include all genders.

          (b)  This  Agreement has been fully  negotiated by the parties  hereto
               and shall not be construed by any Governmental  Authority against
               either party as the drafting party.

     10.11. 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.

     10.12. No Reliance.

     No  third  party  is  entitled  to  rely  on any  of  the  representations,
warranties and  agreements  contained in this Agreement and PCC and Buyer assume
no Liability to any third party because of any reliance on the  representations,
warranties and agreements of PCC and Buyer  contained in this  Agreement,  other
than  Section  5.5 and Article  VIII  hereof,  which are  intended to be for the
benefit of the  Persons  expressly  covered  thereby and may be enforced by such
Persons.

     10.13. Retention of and Access to Records.

     After the Closing  Date,  Buyer shall retain for a period  consistent  with
Buyer's record retention policies and practices those books and records relating
to the Asset Sale Companies  delivered to Buyer. Buyer also shall provide to PCC
and its Affiliates  reasonable access thereto,  during normal business hours and

                                       75

on at least  three  days'  prior  written  notice,  to  enable  them to  prepare
financial statements or Tax Returns or deal with Tax audits or litigation. Buyer
shall  deliver  to  PCC  at  least  thirty  days  written  notice  prior  to the
destruction  or  other  disposal  of any such  books  and  records.  PCC and its
Affiliates  may elect to take  delivery of any such books and records that Buyer
intends  to  destroy  or  otherwise  dispose  of and to copy any such  books and
records  that  Buyer  intends  to  keep,  all  at  their  own  expense.

     10.14. Arbitration.

     Any  dispute,  controversy  or claim  arising  out of or  relating  to this
Agreement (a "Dispute"), excluding any dispute or disagreement among the parties
concerning  the  determination  of the Coal  Inventory,  which shall be resolved
pursuant  to Section  2.12 and the  allocation  of  Purchase  Price and  Assumed
Liabilities,  which shall be resolved pursuant to Section 2.13, shall be decided
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  select  an  arbitrator  within
fourteen  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 Section 10.14 shall
be the exclusive means to resolve all Disputes.

                                       76

     IN WITNESS  WHEREOF,  the parties  have caused  this  Agreement  to be duly
executed as of the date first above written.

                            PITTSTON COAL COMPANY

                            By:    /s/ Michael D. Brown
                            ---------------------------------------------
                            Name:  Michael D. Brown
                            Title: Vice President - Development and Technical
                                   Resources

                            PARAMONT COAL COMPANY VIRGINIA, LLC

                             By:    /s/ Eddie Bateman
                             ---------------------------------------------
                             Name:  Eddie Bateman
                             Title: Vice President

                                       77

                                  SCHEDULE 1.4
                                  ------------

                              ASSET SALE COMPANIES

Paramont Coal Corporation, a Delaware corporation

Motivation Coal Company, a Virginia corporation

Pittston Coal Management Company, a Virginia corporation

                                       A-1

                                                                   Exhibit  2.6

                              PITTSTON COAL COMPANY
                              448 N. E. Main Street
                             Lebanon, Virginia 24266

                                December 13, 2002

Paramont Coal Company Virginia, LLC
c/o Alpha Natural Resources, LLC
406 West Main Street
Abingdon, Virginia 24212

Ladies and Gentlemen:

     Reference is made to the Asset Purchase Agreement (the "Agreement"), dated
as of October 29, 2002, as amended to but not including the date hereof, by and
between Pittston Coal Company ("PCC") and Paramont Coal Company Virginia, LLC
("Buyer"). Capitalized terms used herein without definition shall have the
meanings ascribed to them in the Agreement.

     PCC and Buyer desire to amend certain provisions of the Agreement and, in
consideration of the mutual covenants, conditions and agreements set forth
herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:

     1.   Section 1.82 of the Agreement is deleted in its entirety and replaced
          with the following:

         "1.82    Purchase Price.

                  "Purchase  Price" shall mean the cash amount of  $12,296,687
(which amount shall include $620,000 for the Parts,  Fuel and Supplies
Inventory,  $1,640,000 for the Coal  Inventory,  $55,000 for one  continuous
miner,  $250,000  for one helicopter  and $1,483,206  for the VC 5 Estimate),
plus the  Promissory  Note, subject to the adjustment provided for in Section
2.2(b).

     2.   A new Section 1.107 of the Agreement is inserted into the Agreement as
          follows:

         "1.107   Subleases.

                  "Subleases" shall have the meaning set forth in Section
2.13(a) hereof."

     3.   Notwithstanding anything in the Agreement to the contrary, each of PCC
          and Buyer agree that for purposes of Sections 2.1 and 2.3 of the
          Agreement only, none of the Equipment listed on Schedule 1.37(b)
          attached to the Agreement shall constitute Purchased Assets.

     4.   Notwithstanding anything in the Agreement to the contrary, each of PCC
          and Buyer agree that Buyer shall have caused the applicable Asset Sale
          Companies to

                                       1

         purchase the Equipment specifically  identified under the heading
         "Transamerica    Equipment"   on   Schedule   1.37(b)   (the
         "Transamerica Equipment").  Simultaneously with the Closing, PCC shall
         cause the applicable  Asset Sale  Companies to transfer to Buyer,  and
         Buyer shall acquire,  the Transamerica  Equipment from such Asset Sale
         Companies  pursuant  to a bill of sale.  Each of PCC and Buyer  agrees
         that the Purchase Price Set forth in Section 1.82 includes all amounts
         that Buyer owes PCC or the Asset Sale  Companies for the  Transamerica
         Equipment  upon its purchase by the  applicable  Asset Sale  Companies
         from  Transamerica,  including one-half of the lease breakage fee. PCC
         acknowledges  its  responsibility  to pay  $3,672.13 to  Transamerica,
         which is one-half of such lease breakage fee.

     5.   Each of Buyer and PCC agree that the VC 5 Estimate shall mean
          $1,482,206 and that the Final VC 5 Cost shall be equal to the VC 5
          Estimate. Buyer hereby acknowledges that PCC has delivered
          documentation reasonably acceptable to Buyer detailing and supporting
          the VC 5 Estimate in accordance with Section 2.2(a) of the Agreement.
          Buyer hereby acknowledges that PCC has delivered documentation
          reasonably acceptable to Buyer detailing and supporting the Final VC 5
          Cost in accordance with Section 2.2(b) of the Agreement.

     6.   Each of PCC and Buyer agree that in satisfaction of Section 2.12 of
          the Agreement, the face amount of the Promissory Note shall be fixed
          at $2,516,882.

     7.   A new Section 2.14 of the Agreement is inserted into the Agreement as
          follows:

         2.14     Subleases.

                  (a) Each of PCC and Buyer agree that at the Closing, Buyer
         shall sublease the Equipment set forth on Schedule 1.37(b) attached to
         the Agreement (other than the Transamerica Equipment) from the
         applicable Asset Sale Company pursuant to the subleases substantially
         in the forms attached hereto as Exhibits A-1, A-2, A-3, A-4 and A-5
         (the "Subleases").

                  (b) At the Closing,  PCC shall cause the applicable Asset Sale
         Company to, and Buyer shall execute and deliver the Subleases.

     8.   Sections 5.6(b) and (c) of the Agreement are deleted in their entirety
          and replaced with the following:

                  "(b) Prior to the Closing Date: (i) Buyer shall deliver a copy
         to PCC of the filing that is necessary to cause the applicable
         Governmental Authority to transfer any one of the Permits (the "Initial
         Filing") to Buyer in accordance with Law, in a form that satisfies all
         requirements of the applicable Governmental Authority; and (ii)
         following approval by PCC, Buyer shall file the Initial Filing with the
         appropriate Governmental Authority.

                  (c) Promptly following the Closing Date through the
         application of best efforts, and in any event no later than 30 days
         after the Closing, Buyer shall

                                       2

         make all filings other than the Initial Filing with the appropriate
         Governmental Authorities necessary to transfer the Permits to Buyer in
         accordance with Law and thereafter, as required by Law, shall post
         replacement bonds."

     9.   PCC and Buyer agree that the completion of the actions set forth in
          Section 4 and 7 of this letter agreement that are required to be
          completed by Buyer shall be deemed to satisfy all of Buyer's
          obligations: (i) to obtain the consent of the applicable third party
          lessor in accordance with Section 5.4 and Section 6.1(e) of the
          Agreement; and (ii) with respect to such Equipment leases pursuant to
          Section 5.6(g) of the Agreement (with the exception of the Equipment
          being leased from Deere Credit, Inc. pursuant to leases expiring in
          2004).

     10.  The Schedules to the Agreement are hereby amended and restated in
          their entirety as attached hereto as Exhibit A.

     11.  Except as amended by this letter agreement, the Agreement shall
          continue in full force and effect.

     12.  This letter agreement may be executed in two or more counterparts,
          each of which shall be deemed an original, but all of which together
          shall constitute one and the same instrument. Any executed counterpart
          of this letter agreement or other signature hereto delivered by a
          party by facsimile shall be deemed for all purposes as being good and
          valid execution and delivery of this letter agreement by such party.

                                       3

Sincerely,

PITTSTON COAL COMPANY

By:      /s/ Michael D. Brown
         -----------------------------------
Name:    Michael D. Brown
Title:   Vice President - Development
         and Technical Resources

ACKNOWLEDGED AND AGREED:

PARAMONT COAL COMPANY VIRGINIA, LLC

By:      /s/ Michael J. Quillen
         -----------------------------------
Name: Michael J. Quillen
Title:   Attorney-in-fact

                                       4

                                                                     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;

                                       1

     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.

                                       2

     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.

                                       3

     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.

                                       4

                                   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):

                                       5

               (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.

                                       6

          (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);

                                       7

               (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;

                                       8

               (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.

                                       9

          (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

                                       10

               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

                                       11

               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.

                                       12

     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.

                                       13

                                   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)

                                       14

               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

                                       15

               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

                                       16

               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)

                                       17

               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

                                       18

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.

                                       21

     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.

                                       22

     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

                                       23

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.

                                       24

                                   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.

                                       25

                                                                     Exhibit 2.8

                              COOPERATION AGREEMENT

                                 BY AND BETWEEN

                              PITTSTON COAL COMPANY

                                       AND

                       PARAMONT COAL COMPANY VIRGINIA, LLC

                                December 13, 2002

                                Table of Contents

                                                                                                                Page
                                                                                                                ----

ARTICLE I  DEFINITIONS............................................................................................2
1.1.        Acquisition Agreement.................................................................................2
1.2.        Affiliates, Successors, Assigns, Lessees or Contractors...............................................2
1.3.        Agreement.............................................................................................3
1.4.        Coal Act Liabilities..................................................................................3
1.5.        Communications........................................................................................3
1.6.        Employee Related Liabilities..........................................................................3
1.7.        Paramont Virginia.....................................................................................3
1.8.        PCC...................................................................................................3
1.9.        Recurrence Claim......................................................................................3
1.10.       Third Parties.........................................................................................3
1.11.       UMWA..................................................................................................4
1.12.       Workers' Compensation and Federal Black Lung Liabilities..............................................4
ARTICLE II  COAL ACT LIABILITIES..................................................................................4
2.1.        General...............................................................................................4
ARTICLE III  WORKERS' COMPENSATION AND FEDERAL BLACK LUNG LIABILITIES.............................................6
3.1.        General...............................................................................................6
3.2.        Litigation and Disputes...............................................................................7
3.3.        No Adverse Changes....................................................................................8
3.4.        Recurrence of Prior Claims............................................................................8
ARTICLE IV  EMPLOYEE RELATED LIABILITIES..........................................................................9
4.1.        Employee Related Liabilities..........................................................................9
ARTICLE V  DISPUTE RESOLUTION....................................................................................10
ARTICLE VI  TERM.................................................................................................11
ARTICLE VII  MISCELLANEOUS.......................................................................................11
7.1.        Cooperation..........................................................................................11
7.2.        Continuing Obligations...............................................................................12
7.3.        Paramont Virginia Communication with Third Parties...................................................12
7.4.        Litigation Support...................................................................................13
7.5.        Confidentiality......................................................................................13
7.6.        Governing Law........................................................................................15
7.7.        Successors and Assigns...............................................................................15
7.8.        Notices and Payments.................................................................................15

                              COOPERATION AGREEMENT

     THIS COOPERATION AGREEMENT, made as of December 13, 2002, by and between
PITTSTON COAL COMPANY, a Delaware corporation ("PCC"), on its own behalf and on
behalf of its Affiliates, and PARAMONT COAL COMPANY VIRGINIA, LLC, a Delaware
limited liability company ("Paramont Virginia"), on its own behalf and on behalf
of its Affiliates.

                                    RECITALS

     WHEREAS, Paramont Virginia, PCC and certain Affiliates of PCC have entered
into a certain asset purchase agreement as set forth on Schedule A, dated as of
October 29, 2002 (such agreement, together with the Exhibits and Schedules
attached thereto being hereinafter referred to as the "Acquisition Agreement"),
pursuant to which Paramont Virginia has agreed to 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, pursuant to the Acquisition Agreement, PCC has agreed to retain
certain liabilities and certain assets; and

     WHEREAS, PCC, PCC Parent, Paramont Virginia and Alpha Natural Resources,
LLC, a Delaware limited liability company, have entered into the Indemnification
and Guaranty Agreement; and

     WHEREAS, PCC and Paramont Virginia desire to establish certain
administrative procedures with respect to their respective obligations under the
Acquisition Agreement; provided, however, that nothing in this Agreement is
intended in any way to reallocate risk or modify the allocation of liabilities
in the Acquisition Agreement or the Indemnification and Guaranty Agreement; and
provided, further, that nothing in this Agreement, the Acquisition Agreement or
the Indemnity Agreement is intended to, nor should be construed to, establish a
single employer, joint employer, common employer and/or alter ego relationship
between PCC and its Affiliates on the one hand and Paramont Virginia and its
Affiliates on the other hand.

     NOW, THEREFORE, in consideration of the mutual covenants, conditions and
agreements set forth herein and in the Acquisition Agreement and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, PCC and Paramont Virginia agree that:

                                    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. Affiliates, Successors, Assigns, Lessees or Contractors.

     "Affiliates, Successors, Assigns, Lessees or Contractors" shall mean
Paramont Virginia's Affiliates, contractual successors and assigns, and lessees
and contractors who, as part of a contractual arrangement with Paramont Virginia
or one of its Affiliates, offer employment to the current or former Employees of
an Asset Sale Company.

                                       2

     1.3. Agreement.

     "Agreement" shall mean this Cooperation Agreement, together with the
Schedule[s] attached hereto, as the same may be amended from time to time in
accordance with the terms hereof.

     1.4. Coal Act Liabilities.

     "Coal Act Liabilities" shall mean those Retained Liabilities specified in
Section 1.89(j) of the Acquisition Agreement.

     1.5. Communications.

     "Communications" shall have the meaning set forth in Section 2.1(a) hereof.

     1.6. Employee Related Liabilities.

     "Employee Related Liabilities" shall mean those Retained Liabilities
specified in Sections 1.89(d), 1.89(e), 1.89(f), 1.89(i), 1.89(k), 1.89(l), and
1.89(n) of the Acquisition Agreement.

     1.7. Paramont Virginia.

     "Paramont Virginia" shall have the meaning set forth in the preamble to
this Agreement.

     1.8. PCC.

     "PCC" shall have the meaning set forth in the preamble to this Agreement.

     1.9. Recurrence Claim.

     "Recurrence Claim" shall have the meaning set forth in Section 3.4 hereof.

     1.10. Third Parties.

     "Third Parties" shall have the meaning set forth in Section 7.3 hereof.

                                       3

     1.11. UMWA.

     "UMWA" shall mean the International Union, United Mine Workers of America,
including its district and local unions.

     1.12. Workers' Compensation and Federal Black Lung Liabilities.

     "Workers' Compensation and Federal Black Lung Liabilities" shall mean those
Retained Liabilities specified in Sections 1.89(b) and 1.89(c) of the
Acquisition Agreement.

                                   ARTICLE II
                              COAL ACT LIABILITIES

     2.1. General.

     In order to assist PCC with regard to the satisfaction of the Coal Act
Liabilities, PCC and Paramont Virginia agree as follows:

          (a)  Notices and Communication.

     In the event Paramont Virginia or any of its Affiliates, Successors,
Assigns, Lessees or Contractors receive from any administrative, judicial or
other source any claims, communications, correspondence, notices, invoices
and/or other documents (collectively, "Communications") that are related to the
Coal Act Liabilities, Paramont Virginia agrees that it shall, and shall cause
its Affiliates, Successors, Assigns, Lessees or Contractors to:

               (i)  promptly send to PCC or its designated Affiliate a copy of
                    any such Communications; and

               (ii) cooperate with PCC in notifying the sender of the
                    Communications that such Communications should be sent to
                    PCC or its designated Affiliate.

                                       4

          (b)  Litigation.

     PCC shall have the exclusive right to pursue and/or defend currently
pending litigation or to commence and/or defend future litigation, with respect
to any issue relating to the Coal Act Liabilities, including, but not limited
to, claims pertaining to specific beneficiaries, statutory construction or the
constitutionality of the Coal Act, as PCC deems necessary or appropriate.

          (c)  Administration. PCC or one or more of its Affiliates shall be
               solely responsible for administering the Coal Act Liabilities and
               shall take such actions as it deems necessary or appropriate to
               administer the Coal Act Liabilities, including, but not limited
               to:

               (i)  pursuing administrative or judicial challenges to the
                    assignment of beneficiaries to PCC or any of its Affiliates
                    in accordance with the terms of the Coal Act;

               (ii) administering claims under the individual employer plan
                    required to be maintained under Section 9711 of the Coal
                    Act, including entering into agreements with third party
                    administrators and resolving or litigating claim disputes;

               (iii) implementing managed care and/or other methods of delivery;
                    and

               (iv) discussing managed care and cost containment options with
                    the UMWA.

                                       5

                                  ARTICLE III
            WORKERS' COMPENSATION AND FEDERAL BLACK LUNG LIABILITIES

     3.1. General.

     In order to assist PCC with regard to the satisfaction of the Workers'
Compensation and Federal Black Lung Liabilities, PCC and Paramont Virginia agree
as follows:

     (a)  Administration.

     PCC or one or more of its Affiliates shall be solely responsible for
administering the Workers' Compensation and Black Lung Liabilities, including
making such determinations, awarding and denying such benefits, seeking such
administrative and judicial rulings and remedies and taking all such other
actions as PCC shall deem necessary or appropriate. (b) Notices and
Communication.

          (i)  Paramont Virginia and PCC agree to cooperate with each other in
               providing any notices that may be necessary to the appropriate
               Governmental Authority regarding the allocation between PCC, on
               the one hand, and Paramont Virginia, on the other hand, of the
               Workers' Compensation and Federal Black Lung Liabilities.

          (ii) In the event Paramont Virginia or any of its Affiliates,
               Successors, Assigns, Lessees or Contractors receive any
               Communications that are related to the Workers' Compensation and
               Federal Black Lung Liabilities, Paramont Virginia agrees that it
               shall, and shall cause its Affiliates, Successors, Assigns,
               Lessees or Contractors to, send promptly to PCC or its designated
               Affiliate a copy of any such Communications.

          (iii) Paramont Virginia and PCC agree to cooperate with each other in
               providing such notices of the allocation of liabilities under the
               Acquisition Agreement as Paramont Virginia and PCC deems
               appropriate to any insurer or third party administrator providing
               services or benefits related to the Workers' Compensation and
               Federal Black Lung Liabilities.

                                       6

     3.2. Litigation and Disputes.

     PCC shall have the right to resolve or defend against any claim that is
related to the Workers' Compensation and Federal Black Lung Liabilities in such
manner as PCC in its discretion deems appropriate, in accordance with such
procedures as PCC deems appropriate and with the controlling Workers'
Compensation Act and federal black lung Laws, including raising the defense that
Paramont Virginia is the responsible operator under the federal black lung Laws
because Paramont Virginia or its Affiliates, Successors, Assigns, Lessees or
Contractors is a successor-in-interest to PCC or its Affiliates; provided,
however, that Paramont Virginia shall have the right to respond that PCC is the
responsible operator under the federal black lung Laws notwithstanding Paramont
Virginia's acquisition of the Purchased Assets. PCC also shall have the right to
institute or defend against any litigation related to the Workers' Compensation
and Federal Black Lung Liabilities, except that PCC shall promptly notify
Paramont Virginia of any workers' compensation or federal black lung claim in
which it intends to assert that Paramont Virginia is responsible for payment of
the same under the Acquisition Agreement, in which case Paramont Virginia shall
have the right to intervene in any such action to oppose PCC's position. Any
dispute as to which entity is the responsible entity for such workers'
compensation claims shall be determined in accordance with the Workers'
Compensation Acts, and any dispute as to which entity is the responsible
operator for such black lung claims shall be determined in accordance with the
federal black lung Laws.

                                       7

     3.3. No Adverse Changes.

     Paramont Virginia agrees that it will, and will cause its Affiliates,
Successors, Assigns, Lessees or Contractors to, use its or their commercially
reasonable efforts to retain in effect any lawful program or practice of PCC or
its Affiliates in effect at Closing that is intended to reduce employer
liability or the length of time an employee is entitled to receive benefits
under the Workers' Compensation Act.

     3.4. Recurrence of Prior Claims.

     In the event Paramont Virginia or any of its Affiliates, Successors,
Assigns, Lessees or Contractors receives a claim under the applicable Workers'
Compensation Acts or federal black lung Laws and Paramont Virginia or its
Affiliates, Successors, Assigns, Lessees or Contractors believes in good faith
that such claim relates to, or is a recurrence of, a prior claim that
constituted a Workers' Compensation or Federal Black Lung Liability (a
"Recurrence Claim"), the provisions of this Section 3.4 shall govern. Paramont
Virginia shall promptly notify PCC of any Recurrence Claim and the basis for its
determination that such claim is a Recurrence Claim prior to communicating its
determination to any other person or entity. If PCC agrees with Paramont
Virginia that such claim is a Recurrence Claim, such claim shall be deemed a
Workers' Compensation and Federal Black Lung Liability, and the rights and
obligations of the parties shall be as provided in this Article III. If PCC
disagrees with Paramont Virginia's position, the matter will be submitted to the
appropriate Governmental Authority for a determination, with each side being
responsible for its respective costs in such procedure. Paramont Virginia
recognizes that in the event the employee who has filed the claim disagrees with
the position of the parties with respect to a Recurrence Claim, the employee may
file a claim with the appropriate Governmental Authority for a determination. In
any such case, PCC and Paramont Virginia shall each have the right to defend its
position, with each side bearing the cost of its own defense.

                                       8

                                   ARTICLE IV
                          EMPLOYEE RELATED LIABILITIES

     4.1. Employee Related Liabilities.

     In order to assist PCC with regard to the satisfaction of the Employee
Related Liabilities, PCC and Paramont Virginia agree as follows:

          (a)  Administration. PCC or one or more of its Affiliates shall be
               solely responsible for administering the Employee Related
               Liabilities, making such determinations, awarding and denying
               such benefits, seeking such administrative and judicial rulings
               and remedies and taking all such other actions as PCC shall deem
               necessary or appropriate.

          (b)  Notices and Communication.

               (i)  PCC has the exclusive right to provide such notices as PCC
                    deems necessary or appropriate to Employees or other
                    beneficiaries regarding any matters related to the Employee
                    Related Liabilities and to any third parties providing
                    services or benefits related to the Employee Related
                    Liabilities.

               (ii) In the event Paramont Virginia or any of its Affiliates,
                    Successors, Assigns, Lessees or Contractors receives any
                    Communications that are related to the Employee Related
                    Liabilities, Paramont Virginia shall promptly send, and
                    shall cause its Affiliates, Successors, Assigns, Lessees or
                    Contractors promptly to send, such Communications to PCC or
                    its designated Affiliate.

                                       9

               (iii) Paramont Virginia agrees to provide on a monthly basis for
                    a period of 12 months following the Closing Date, the names
                    and social security numbers of any non-Classified Employees
                    hired by Paramont Virginia or its Affiliates, Successors,
                    Assigns, Lessees or Contractors and further agrees to
                    provide, and shall cause its Affiliates, Successors,
                    Assigns, Lessees or Contractors to provide, all information
                    in its or their possession or under its or their control
                    reasonably requested by PCC in order to administer and
                    satisfy any Employee Related Liabilities.

          (c)  Litigation. PCC shall have the exclusive right to pursue and/or
               defend currently pending litigation, or to commence and/or defend
               future litigation, with respect to any issue related to any
               Employee Related Liabilities, as PCC shall deem necessary or
               appropriate.

                                   ARTICLE V
                               DISPUTE RESOLUTION

     Disputes under or alleged violations of this Agreement shall be handled in
accordance with the Dispute resolution procedure set forth in Article VII of the
Indemnification and Guaranty Agreement.

                                       10

                                   ARTICLE VI
                                      TERM

     The term of this Agreement shall commence as of the Closing Date and shall
continue through the completed satisfaction of all of the Coal Act Liabilities,
Workers' Compensation and Federal Black Lung Liabilities and the Employee
Related Liabilities.

                                  ARTICLE VII
                                  MISCELLANEOUS

7.1. Cooperation.

          (a)  To the extent permitted by Law and on a timely basis, Paramont
               Virginia agrees to take any reasonable action, provide
               information and execute any appropriate documents, and shall
               cause its Affiliates, Successors, Assigns, Lessees or Contractors
               to take any reasonable action, provide information and execute
               any appropriate documents, that PCC reasonably requests in order
               to assist PCC with regard to the administration and satisfaction
               of the Coal Act Liabilities, Workers' Compensation and Federal
               Black Lung Liabilities and the Employee Related Liabilities. Upon
               written request by Paramont Virginia, PCC shall reimburse
               Paramont Virginia for costs above $10,000 per year that are
               reasonably incurred by Paramont Virginia or its Affiliates as a
               result of actions taken by it or them under this Agreement. Prior
               to payment of such costs, PCC shall be entitled to receive a
               detailed invoice of such costs from Paramont Virginia if so
               requested by PCC.

          (b)  PCC and Paramont Virginia shall cooperate with each other to
               determine the timing and manner of transferring the Books and
               Records to Paramont Virginia after the Closing, provided,
               however, that Paramont Virginia or its Affiliates shall have
               immediate access to all such Books and Records while still in the
               possession of PCC and provided, further, that PCC or its
               Affiliates shall have reasonable access to, and shall be allowed
               to copy at its sole expense, any Books and Records to which PCC

                                       11

               reasonably believes it needs access or for which PCC reasonably
               believes it needs copies after the Closing.

     7.2. Continuing Obligations.

     Any failure by PCC or by Paramont Virginia or its Affiliates, Successors,
Assigns, Lessees, or Contractors to comply with any of their obligations in this
Agreement shall not relieve PCC or Paramont Virginia of any of their Liabilities
or obligations under the Acquisition Agreement.

     7.3. Paramont Virginia Communication with Third Parties.

     Unless otherwise agreed to in writing by PCC or except as permitted
specifically by this Agreement and the Acquisition Agreement, neither Paramont
Virginia nor any of its Affiliates, Successors, Assigns, Lessees or Contractors
will make any public statements or communicate with the United Mine Workers of
America Combined Benefit Fund, the 1992 UMWA Benefit Plan, any beneficiary of
any Employee Benefit Plan, or any other Person or entity (collectively, "Third
Parties") with respect to or concerning the Coal Act Liabilities, Workers'
Compensation and Federal Black Lung Liabilities and the Employee Related
Liabilities. Notwithstanding the foregoing, in the event PCC fails to take such
actions as are necessary to comply with its obligations under the Acquisition
Agreement and this Agreement with respect to any of the Coal Act Liabilities,
Workers' Compensation and Federal Black Lung Liabilities or the Employee Related
Liabilities within a reasonable time after receiving notice from Paramont
Virginia that attempts have been or are being made to obtain information
concerning or to impose any of the Coal Act Liabilities, Workers' Compensation
and Federal Black Lung Liabilities or the Employee Related Liabilities on
Paramont Virginia or any of its Affiliates, Successors, Assigns, Lessees or
Contractors, Paramont Virginia shall be permitted to communicate with the

                                       12

appropriate Third Party regarding PCC's obligations with respect to such Coal
Act Liabilities, Workers' Compensation and Federal Black Lung Liabilities or the
Employee Related Liabilities. In addition, notwithstanding anything in the
foregoing to the contrary, in the event any Third Party contacts Paramont
Virginia to inquire about PCC's or any of its Affiliates obligations with
respect to such Coal Act Liabilities, Workers' Compensation and Federal Black
Lung Liabilities or the Employee Related Liabilities under this Agreement,
Paramont Virginia is permitted to direct such Third Party to contact PCC for
additional information.

     7.4. Litigation Support.

     In the event and for as long as PCC is actively contesting or defending
against any action, suit, proceeding, hearing, investigation, charge, complaint,
claim or demand related to the Coal Act Liabilities, Workers' Compensation and
Federal Black Lung Liabilities and the Employee Related Liabilities, Paramont
Virginia will, to the extent reasonable, cooperate, and shall cause its
Affiliates, Successors, Assigns, Lessees or Contractors to cooperate, with PCC
and its counsel in the contest or defense, make available their personnel and
provide such testimony and access to their books, documents and records as shall
be reasonably necessary in connection with the contest or defense.

     7.5. Confidentiality.

     Except as otherwise provided in this Agreement, each party hereto covenants
and agrees to keep confidential the existence of this Agreement and the contents
of this Agreement at all times while any provision of this Agreement is in
force, unless and to the extent that a party shall be required to disclose the
same by generally accepted accounting principles, Law or judicial order or
decree or administrative regulation or order or in order to comply with its
obligations hereunder; provided, however, that any party that believes it may be

                                       13

required to disclose this Agreement or any provisions hereof shall promptly
notify the other hereto in writing and afford such other party the opportunity
to determine whether disclosure is in fact required or if the scope of the
required disclosure can be reduced and provided further, however, that
notwithstanding anything in this Section 7.5 or in Section 7.3 hereof to the
contrary, without notifying the other party, any party may disclose the
existence and contents of this Agreement:

          (a)  to any employees within the party's organization who need to know
               of this Agreement in order for the party to comply with its
               obligations hereunder, so long as such employees at the time of
               disclosure are required to comply with this Section 7.5;

          (b)  to Paramont Virginia's Affiliates, Successors, Assigns, Lessees,
               Contractors and their employees, attorneys, accountants,
               consultants and lenders who need to know of the Agreement, so
               long as such entities and persons agree to comply with this
               Section 7.5;

          (c)  to any third-party contractor whose services the party requires
               in order for the party to comply with its obligations hereunder
               so long as such contractor is contractually obligated to comply
               with this Section 7.5;

          (d)  in the financial statements of the party as required by generally
               accepted accounting principles; or

          (e)  to any attorneys, accountants, consultants or lenders of a party
               for whom the party agrees to be responsible for the compliance
               herewith.

                                       14

     7.6. Governing Law.

     This Agreement shall be governed by and construed in accordance with the
laws of the Commonwealth of Virginia, but without reference to the choice of law
provision thereof. 7.7. Successors and Assigns.

     This Agreement and each party's respective rights hereunder may not be
assigned at any time except as expressly set forth herein without the prior
written consent of the other party, which consent shall not be unreasonably
withheld, except that PCC may assign its rights hereunder to any Affiliate of
PCC after the Closing Date without the consent of Paramont Virginia and Paramont
Virginia may assign its rights hereunder to any Affiliate of Paramont Virginia
after the Closing Date without the consent of PCC. 7.8. Notices and Payments.

     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 (5) 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 party in the
manner provided by this Section 7.8:

If to PCC:                    Pittston Coal Company
                              448 N.E. Main Street
                              P.O. Box 5100
                              Lebanon, Virginia 24266
                              Attention: President

                                       15

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 Paramont Virginia:      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.

                                       16

     IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the
date first written above. PARAMONT COAL COMPANY VIRGINIA, LLC

                                         By:    /s/ Michael J. Quillen
                                         -------------------------------------
                                         Name:  Michael J. Quillen
                                         Title: Attorney-in-fact

                                         PITTSTON COAL COMPANY

                                         By:    /s/ Michael D. Brown
                                         -------------------------------------
                                         Name:  Michael D. Brown
                                         Title: Vice President - Development and
                                                Technical Resources

                                       17

                            ASSET PURCHASE AGREEMENT

                                 BY AND BETWEEN

                              PITTSTON COAL COMPANY

                                       AND

                          ALPHA LAND AND RESERVES, LLC

                                October 29, 2002

                                TABLE OF CONTENTS

                                                                            Page
                                                                            ----

ARTICLE I DEFINITIONS 1

 1.1.  Administrative Services Agreement.......................................1
 1.2.  Affiliate...............................................................2
 1.3.  Agreement...............................................................2
 1.4.  Asset Sale  Companies...................................................2
 1.5.  Assignment and Assumption Agreements....................................2
 1.6.  Assumed Liabilities.....................................................2
 1.7.  Bills of Sale...........................................................3
 1.8.  Books and  Records......................................................3
 1.9.  Business................................................................3
 1.10. Buyer...................................................................3
 1.11. Buyer Closing Certificate...............................................3
 1.12. Buyer's Ultimate Parent.................................................4
 1.13. CERCLA..................................................................4
 1.14. CERCLIS.................................................................4
 1.15. Closing.................................................................4
 1.16. Closing Date............................................................4
 1.17. Coal Act................................................................4
 1.18. Code....................................................................4
 1.19. Contaminated............................................................5
 1.20. Contracts...............................................................5
 1.21. Conveyance Deeds........................................................5
 1.22. CPA Arbitrator..........................................................5
 1.23. Dispute.................................................................5
 1.24. Environment.............................................................5
 1.25. Environmental Laws......................................................6
 1.26. Environmental Matter....................................................6
 1.27. Environmental or Response Action........................................7
 1.28. EPA.....................................................................7
 1.29. Governmental Authority..................................................7
 1.30. Hazardous Substances....................................................8
 1.31. Income Tax or Income Taxes..............................................8
 1.32. Indemnification and Guaranty Agreement..................................8
 1.33. Intercreditor Agreement.................................................8
 1.34. IRS.....................................................................8
 1.35. Knowledge of PCC........................................................9
 1.36. Law.....................................................................9
 1.37. Lien....................................................................9
 1.38. Liability...............................................................9
 1.39. Material Adverse Effect.................................................9
 1.40. Mining Activities......................................................10
 1.41. Mining Data............................................................10

                                TABLE OF CONTENTS
                                   (continued)
                                                                            Page
                                                                            ----

 1.42. Mining Environmental Liabilities.......................................10
 1.43. MSHA...................................................................10
 1.44. Ordinary Course of Business............................................10
 1.45. OSM....................................................................10
 1.46. PCC....................................................................10
 1.47. PCC Closing Certificate................................................11
 1.48. PCC Group..............................................................11
 1.49. PCC Parent.............................................................11
 1.50. Permitted Liens........................................................11
 1.51. Person.................................................................11
 1.52. Post-Closing Period....................................................11
 1.53. Pre-Closing Period.....................................................11
 1.54. Purchase Price.........................................................12
 1.55. Purchased Assets.......................................................12
 1.56. RCRA...................................................................12
 1.57. Real Property..........................................................12
 1.58. Reclamation Laws.......................................................12
 1.59. Related Persons........................................................12
 1.60. Release................................................................13
 1.61. Retained Liabilities...................................................13
 1.62. Royalty Agreement......................................................15
 1.63. SMCRA..................................................................15
 1.64. Straddle Period........................................................16
 1.65. Tax or Taxes...........................................................16
 1.66. Tax Return.............................................................16
 1.67. VDEQ...................................................................16
 1.68. VDMME..................................................................16

ARTICLE II  PURCHASE AND SALE OF ASSETS.......................................17

 2.1.  Transfer of Assets.....................................................17
 2.2.  Bills of Sale, Assignment and Assumption Agreements, Conveyance Deeds
       and Other Documents....................................................17
 2.3.  Assumption of Liabilities..............................................18
 2.4.  Proration of Liabilities...............................................18
 2.5.  Indemnification and Guaranty Agreement.................................18
 2.6.  Administrative Services Agreement......................................18
 2.7.  Intercreditor Agreement................................................18
 2.8.  Additional Documents...................................................19
 2.9.  Allocation of Purchase Price and Assumed Liabilities...................19

ARTICLE III  REPRESENTATIONS AND WARRANTIES OF PCC............................20

 3.1.  Incorporation..........................................................21
 3.2.  Execution, Delivery and Performance....................................21

                                TABLE OF CONTENTS
                                   (continued)
                                                                            Page
                                                                            ----

 3.3.  Authorization..........................................................22
 3.4.  Absence of Changes.....................................................23
 3.5.  Real Property..........................................................25
 3.6.  Environmental Compliance...............................................28
 3.7.  Contracts..............................................................30
 3.8.  Litigation; Claims.....................................................31
 3.9.  No Broker..............................................................31
 3.10. Restrictions on Business Activities....................................32
 3.11. Powers of Attorney.....................................................32
 3.12. Transactions With Affiliates...........................................32
 3.13. Absence of Certain Payments............................................32
 3.14. Disclosure.............................................................33

ARTICLE IV  REPRESENTATIONS AND WARRANTIES OF BUYER...........................33

 4.1.  Organization...........................................................33
 4.2.  Execution, Delivery and Performance....................................33
 4.3.  Authorization..........................................................34
 4.4.  No Broker..............................................................34
 4.5.  Reclamation and Environmental Compliance...............................35
 4.6.  Financing..............................................................35
 4.7.  Disclosure.............................................................35

ARTICLE V  CERTAIN COVENANTS..................................................35

 5.1.  Business in Ordinary Course............................................35
 5.2.  Compliance with Law....................................................36
 5.3.  Cooperation............................................................36
 5.4.  Notices and Consents...................................................36
 5.5.  Publicity..............................................................37
 5.6.  Replacement Bonds; Insurance and Guarantees; Other Filings.............37
 5.7.  Exclusivity............................................................38
 5.8.  Access.................................................................38
 5.9.  Notice of Developments.................................................39
 5.10. Further Assurances.....................................................39

ARTICLE VI  CONDITIONS PRECEDENT TO CLOSING...................................39

 6.1.  Conditions Precedent to Each Party's Obligations.......................39
 6.2.  Conditions Precedent to Obligations of Buyer...........................41
 6.3.  Conditions Precedent to Obligations of PCC.............................42

ARTICLE VII  CERTAIN TAX MATTERS..............................................44

 7.1.  Property Taxes.........................................................44
 7.2.  Sales and Use Taxes....................................................45
 7.3.  Transfer Taxes.........................................................46

                                TABLE OF CONTENTS
                                   (continued)
                                                                            Page
                                                                            ----

 7.4.  Access for Tax Returns.................................................46

ARTICLE VIII  TERMINATION.....................................................46

 8.1.  Termination............................................................46
 8.2.  Effect of Termination..................................................48

ARTICLE IX  MISCELLANEOUS.....................................................48

 9.1.  Entire Agreement.......................................................48
 9.2.  Amendment..............................................................49
 9.3.  Extension; Waiver......................................................49
 9.4.  Expenses...............................................................49
 9.5.  Bulk Sales Waiver......................................................49
 9.6.  Governing Law..........................................................49
 9.7.  Assignment.............................................................50
 9.8.  Notices................................................................50
 9.9.  Counterparts; Headings.................................................51
 9.10. Interpretation; Construction...........................................51
 9.11. Severability...........................................................52
 9.12. No Reliance............................................................52
 9.13. Retention of and Access to Records.....................................52
 9.14. Arbitration............................................................53

                                    EXHIBITS

Exhibit A             Outline of Administrative Services Agreement
Exhibit B             Assignment and Assumption Agreements
Exhibit C             Bills of Sale
Exhibit D             Buyer Closing Certificate
Exhibit E             Conveyance Deeds
Exhibit F             Indemnification and Guaranty Agreement
Exhibit G             PCC Closing Certificate
Exhibit H             Opinion of Counsel to PCC
Exhibit I             Opinion of Counsel to Buyer

                                    SCHEDULES

Schedule 1.4          Asset Sale Companies
Schedule 1.6          Assumed Liabilities
Schedule 1.20         Contracts of Asset Sale Companies
Schedule 1.35         Knowledge of PCC
Schedule 1.42         Mining Environmental Liabilities
Schedule 1.50         Permitted Liens
Schedule 1.57         Real Property of the Asset Sale Companies
Schedule 1.61(a)      Retained Liabilities
Schedule 1.61(m)      Excluded Contracts
Schedule 3.1          Foreign States
Schedule 3.2          Conflicts
Schedule 3.5(a)       Real Property Matters
Schedule 3.5(d)       Real Property - Third Party Mining Rights
Schedule 3.6          Permits and Environmental Compliance
Schedule 3.7(b)       Contract Exceptions
Schedule 3.7(c)       Consents
Schedule 3.8          Litigation; Claims
Schedule 3.12         Transactions with Affiliates
Schedule 5.4(a)       PCC Consents
Schedule 5.4(b)       Buyer Consents
Schedule 6.1(e)(i)    PCC Material Consents
Schedule 6.1(e)(ii)   Buyer Material Consents

                            ASSET PURCHASE AGREEMENT
                            ------------------------

     THIS ASSET PURCHASE AGREEMENT is made as of the 29th day of October, 2002,
by and between PITTSTON COAL COMPANY, a Delaware corporation ("PCC"), and ALPHA
LAND AND RESERVES, LLC, a Delaware limited liability company ("Buyer").

                                    RECITALS
                                    --------

     WHEREAS, PCC owns, directly or indirectly, all of the outstanding capital
stock of the corporations listed on Schedule 1.4 (the "Asset Sale Companies");
     WHEREAS, PCC desires to cause to be sold and assigned, and Buyer desires to
purchase and assume, certain of the assets and certain of the Liabilities (as
hereinafter defined) of the Asset Sale Companies;
     WHEREAS, PCC desires to cause the Asset Sale Companies to retain certain
assets and certain Liabilities;
     NOW, THEREFORE, in consideration of the mutual covenants, conditions and
agreements set forth herein and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, PCC and Buyer agree
that:

                                    ARTICLE I
                                   DEFINITIONS

     When used in this Agreement, the following terms shall have the meanings
specified:

     1.1. Administrative Services Agreement.

     "Administrative Services Agreement" shall mean the agreement by and between
PCC and Buyer, an outline of which is attached hereto as Exhibit A.

                                       1

     1.2. Affiliate.

     "Affiliate" shall mean, with respect to a specified Person, another Person
that directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the Person specified. "Control"
shall mean the possession, directly or indirectly, of the power to direct or
cause the direction of the management or policies of a Person, whether through
the ownership of voting securities, by contract or otherwise. For purposes of
this Agreement, none of Dominion Terminal Associates or any of its partners,
other than Pittston Coal Terminal Corporation, shall be deemed an Affiliate of
PCC or any of its Affiliates.

     1.3. Agreement.

     "Agreement" shall mean this Asset Purchase Agreement, together with the
Exhibits and Schedules attached hereto, which are incorporated into this Asset
Purchase Agreement by this reference, as the same may be amended from time to
time in accordance with the terms hereof.

     1.4. Asset Sale Companies.

     "Asset Sale Companies" shall have the meaning given to it in the Recitals
to this Agreement. The term "Asset Sale Company" shall mean one of the Asset
Sale Companies.

     1.5. Assignment and Assumption Agreements.

     "Assignment and Assumption Agreements" shall mean the assignment and
assumption agreements substantially in the form of Exhibit B attached hereto.

     1.6. Assumed Liabilities.

     "Assumed Liabilities" shall mean all Liabilities of the Asset Sale
Companies listed on Schedule 1.6.

                                       2

     1.7. Bills of Sale.

     "Bills of Sale" shall mean the bills of sale substantially in the form of
Exhibit C attached hereto.

     1.8. Books and Records.

     "Books and Records" shall mean the original or true and complete copies of
all of the books and records of the Asset Sale Companies pertaining to the
Purchased Assets, including but not limited to, customer lists, purchase orders
and invoices, sales orders and sales order log books, credit and collection
records, plats, drawings and specifications, environmental and mining reports
and studies, correspondence and miscellaneous records with respect to customers
and supply sources, lessors and lessees, maps, core logs, engineering data,
equipment maintenance records and all other general correspondence, records,
books and files owned by any Asset Sale Company, but excluding any and all Tax
Returns, books and records relating to the Retained Liabilities and corporate
records of the Asset Sale Companies.

     1.9. Business.

     "Business" shall mean the business of owning and leasing coal reserves by
the Asset Sale Companies.

     1.10. Buyer.

     "Buyer" shall have the meaning given to it in the preamble of this
Agreement.

     1.11. Buyer Closing Certificate.

     "Buyer Closing Certificate" shall mean the certificate of Buyer
substantially in the form of Exhibit D attached hereto.

                                       3

     1.12. Buyer's Ultimate Parent.

     "Buyer's Ultimate Parent" shall mean Alpha Natural Resources, LLC, a
Delaware limited liability company.

     1.13. CERCLA.

     "CERCLA" shall have the meaning set forth in Section 1.25 hereof.

     1.14. CERCLIS.

     "CERCLIS" shall have the meaning set forth in Section 3.6 hereof.

     1.15. Closing.

     "Closing" shall mean the closing of the transactions contemplated by this
Agreement beginning at 10:00 a.m., local time, on the Closing Date, at the
offices of Hunton & Williams, Riverfront Plaza, East Tower, 951 East Byrd
Street, Richmond, Virginia 23219.

     1.16. Closing Date.

     "Closing Date" shall mean November 30, 2002 or such other date as the
parties may mutually agree in writing.

     1.17. Coal Act.

     "Coal Act" shall mean the Coal Industry Retiree Health Benefit Act of 1992
as amended through the Closing Date (codified at Subtitle J of the Code).

     1.18. Code.

     "Code" shall mean the Internal Revenue Code of 1986, as amended, and, where
appropriate, any predecessor or successor provisions of Law, and all regulations
thereunder.

                                       4

     1.19. Contaminated.

     "Contaminated" shall mean the presence of one or more Hazardous Substances
in such quantity or concentration as to: (i) violate any Environmental Law; (ii)
require disclosure to any Governmental Authority; (iii) require remediation or
removal; (iv) interfere with or prevent the use of the Real Property or any of
the Purchased Assets as customarily intended; or (v) create any contribution
Liability to fund the clean up of the Real Property.

     1.20. Contracts.

     "Contracts" shall mean the contracts, agreements, personal and real
property leases, relationships and commitments, written or oral, of the Asset
Sale Companies listed on Schedule 1.20.

     1.21. Conveyance Deeds.

     "Conveyance Deeds" shall mean the deeds substantially in the form of
Exhibit E attached hereto, with such revisions as shall be agreed upon by the
parties hereto in connection with the Royalty Agreement.

     1.22. CPA Arbitrator.

     "CPA Arbitrator" shall have the meaning set forth in Section 2.9 hereof.

     1.23. Dispute.

     "Dispute" shall have the meaning set forth in Section 9.14 hereof.

     1.24. Environment.

     "Environment" shall mean surface or ground water, water supply, soil or the
ambient air.

                                       5

     1.25. Environmental Laws.

     "Environmental Laws" shall mean collectively, all federal, foreign, state,
and local Laws in effect as of the Closing Date that relate to (a) the
prevention, abatement or elimination of pollution, or the protection of the
environment, or of natural resources, including, without limitation, Laws
applicable to coal mining operations or related activities, (b) the generation,
handling, treatment, storage, disposal or transportation of waste materials, (c)
the regulation of or exposure to Hazardous Substances, including, without
limitation, the Comprehensive Environmental Response Compensation and Liability
Act, 42 U.S.C.ss.ss.9601 et. seq. ("CERCLA"), the Solid Waste Disposal Act, as
amended by the Resource Conservation and Recovery Act, as amended, 42
U.S.C.ss.ss.6901 et. seq. ("RCRA"), the Clean Air Act, 42 U.S.C.ss.ss.7401 et.
seq., the Clean Water Act, 33 U.S.C. ss.ss.1251 et. seq., the Toxic Substances
Control Act, 15 U.S.C.ss.ss.2601 et. seq., the Emergency Planning and Community
Right to Know Act, 42 U.S.C.ss.ss.11001 et. seq., and any foreign, state,
county, municipal, or local statutes, Laws or ordinances similar or analogous to
the federal statutes listed in this sentence.

     1.26. Environmental Matter.

     "Environmental Matter" shall mean any assertion of a violation, claim or
directive by any Governmental Authority or any other Person for personal injury,
damage to property or the Environment, nuisance, contamination or other adverse
effects on the Environment, or for damages or restrictions resulting from or
related to (i) the operation of PCC's or its Affiliates' business or any
predecessor or the ownership, use or operation at or on any real property or
other assets owned, operated or leased by PCC or its Affiliates or any
predecessor; or (ii) the existence or the continuation of a Release of, or
exposure to, or the transportation, storage or treatment of any Hazardous
Substance into the Environment from or related to any real property or assets

                                       6

currently or formerly owned, operated or leased by PCC or its Affiliates or any
activities on or operations thereof.

     1.27. Environmental or Response Action.

     "Environmental or Response Action" shall mean all actions required (i) to
clean up, remove, treat or in any other way address any Hazardous Substance or
other substance; (ii) to prevent the Release or threat of Release, or minimize
the further Release of any Hazardous Substance or other substance so it does not
migrate or endanger or threaten to endanger public health or welfare or the
indoor or outdoor Environment; (iii) to perform pre-remedial studies and
investigations or post-remedial monitoring and care; (iv) to bring facilities on
any real property currently or formerly owned, operated or leased by PCC or its
Affiliates and the facilities located and operations conducted thereon into
compliance with all Environmental Laws and Reclamation Laws and all permits and
other authorizations, and the filing of all notifications and reports required
under any Environmental Laws and Reclamation Laws; or (v) for the purpose of
environmental protection of any real property currently or formerly owned,
operated or leased by PCC or its Affiliates.

     1.28. EPA.

     "EPA" shall have the meaning set forth in Section 3.6 hereof.

     1.29. Governmental Authority.

     "Governmental Authority" shall mean any governmental, judicial,
legislative, executive, administrative or regulatory authority of the United
States, or of any foreign, state or local government or any subdivision, agency,
commission, office, authority or bureau thereof or any quasi-governmental entity
or authority of any nature.

                                       7

     1.30. Hazardous Substances.

     "Hazardous Substances" shall mean any substance, chemical, waste, solid,
material, pollutant or contaminant that is defined or listed as hazardous or
toxic under any applicable Environmental Laws. Without limiting the generality
of the foregoing it shall also include any radioactive material, including any
naturally-occurring radioactive material, and any source, special or by-product
material as defined in 42 U.S.C. 2011, et seq., any amendments or authorizations
thereof, any asbestos-containing materials in any form or condition, any
polychlorinated biphenyls in any form or condition, radioactive waste, or
natural gas, natural gas liquids, liquified natural gas, condensate, or
derivatives or byproducts thereof or oil and petroleum products or by products
and constituents thereof.

     1.31. Income Tax or Income Taxes.

     "Income Tax" or "Income Taxes" shall mean any Tax based on or measured by
net income.

     1.32. Indemnification and Guaranty Agreement.

     "Indemnification and Guaranty Agreement" shall mean the agreement by and
among PCC Parent, PCC, Buyer and Buyer's Ultimate Parent substantially in the
form of Exhibit F attached hereto.

     1.33. Intercreditor Agreement.

     "Intercreditor Agreement" shall mean the Intercreditor Agreement by and
among PCC, Buyer and Buyer's third-party lenders, to be dated as of the Closing
Date, in a form to be agreed upon by the parties hereto.

     1.34. IRS.

     "IRS" shall mean the United States Internal Revenue Service.

                                       8

     1.35. Knowledge of PCC.

     "Knowledge of PCC" shall mean, for the individuals listed on Schedule 1.35,
any such individual's actual knowledge and what any such individual should have
known after reasonable inquiry within the scope of that individual's job
responsibilities.

     1.36. Law.

     "Law" and "Laws" shall mean any applicable United States or foreign,
federal, state, local or other law or governmental requirement of any kind, and
the rules, regulations and orders promulgated thereunder.

     1.37. Lien.

     "Lien" shall mean any lien, encumbrance, mortgage, charge, claim,
restriction, pledge, security interest or imposition of any kind.

     1.38. Liability.

     "Liability" shall mean any liability or obligation (whether known or
unknown, whether asserted or unasserted, whether absolute or contingent, whether
liquidated or unliquidated and whether due or to become due), including any
liability for Taxes. Liabilities shall mean one or more items of Liability.

     1.39. Material Adverse Effect.

     "Material Adverse Effect" shall mean any event, change or occurrence that
individually, or together with any other event, change or occurrence, has a
material adverse impact on the Business, taken as a whole, without regard to the
duration of such material adverse impact.

                                       9

     1.40. Mining Activities.

     "Mining Activities" shall mean those activities, if any, of the Asset Sale
Companies that have taken place on or through the use of the Purchased Assets
that involve surface, underground and auger mining, processing or transporting
of coal and the handling of coal by-products.

     1.41. Mining Data.

     "Mining Data" shall have the meaning set forth in Section 3.5(c) hereof.

     1.42. Mining Environmental Liabilities.

     "Mining Environmental Liabilities" shall mean Liabilities that relate to or
arise from both of the following: (i) any of the Hazardous Substances set forth
on Schedule 1.42 and (ii) an Environmental Matter or Environmental and Response
Action associated with Mining Activities to the extent that such Mining
Activities conformed to industry standard practices at the time such Mining
Activities were conducted.

     1.43. MSHA.

     "MSHA" shall have the meaning set forth in Section 3.6 hereof.

     1.44. Ordinary Course of Business.

     "Ordinary Course of Business" means the ordinary course of business
consistent with past custom and practice (including with respect to quantity and
frequency).

     1.45. OSM.

     "OSM" shall have the meaning set forth in Section 3.6 hereof.

     1.46. PCC.

     "PCC" shall have the meaning given to it in the preamble to this Agreement.

                                       10

     1.47. PCC Closing Certificate.

     "PCC Closing Certificate" shall mean the certificate of PCC substantially
in the form of Exhibit G attached hereto.

     1.48. PCC Group.

     "PCC Group" shall have the meaning given to it in Section 1.61(l).

     1.49. PCC Parent.

     "PCC Parent" shall mean The Pittston Company, a Virginia corporation.

     1.50. Permitted Liens.

     "Permitted Liens" shall mean: (i) Liens for property Taxes not due and
payable; (ii) encumbrances that would be apparent in a physical inspection of
the surface of the Real Property; (iii) all instruments of record in the offices
of the Clerk of the Circuit Court for each county where the Real Property is
located; and (iv) those Liens affecting the Purchased Assets that are listed on
Schedule 1.50.

     1.51. Person.

     "Person" shall mean any individual, corporation, general or limited
partnership, limited liability company, joint venture, estate, trust,
association, organization, labor union or other entity or Governmental
Authority.

     1.52. Post-Closing Period.

     "Post-Closing Period" shall mean any taxable period beginning after the
Closing Date.

     1.53. Pre-Closing Period.

     "Pre-Closing Period" shall mean any taxable period ending on or before the
Closing Date.

                                       11

     1.54. Purchase Price.

     "Purchase Price" shall mean the cash amount of $6,160,000, plus the Royalty
Agreement.

     1.55. Purchased Assets.

     "Purchased Assets" shall mean all right, title and interest in and to the
Books and Records, Real Property and Mining Data of the Asset Sale Companies and
the rights of the Asset Sale Companies with respect to the Contracts.

     1.56. RCRA.

     "RCRA" shall have the meaning set forth in Section 1.25 hereof.

     1.57. Real Property.

     "Real Property" shall mean the real property rights and interests owned,
leased or subleased by the Asset Sale Companies and any improvements, fixtures,
easements, rights of way, and other appurtenants thereto (such as appurtenant
rights in and to public streets) that are listed on Schedule 1.57.

     1.58. Reclamation Laws.

     "Reclamation Laws" shall mean all federal, state and local Laws, as now or
hereafter in effect, relating to coal mining reclamation activities or
Liabilities. For purposes of this definition, "coal mining" shall include, but
not be limited to, any activities defined under the Surface Mining Control and
Reclamation Act of 1977, as amended, as "surface coal mining operations."

     1.59. Related Persons.

     "Related Persons" shall mean related persons as that term is defined in
Section 9701(c)(2) of the Coal Act, except that it shall not include successors
in interest.

                                       12

     1.60. Release.

     "Release" shall mean any spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, dumping or disposing into the
Environment of Hazardous Substances.

     1.61. Retained Liabilities.

     "Retained Liabilities" shall mean all of the Liabilities of each Asset Sale
Company, other than the Assumed Liabilities, including, without limitation, the
following:

     (a)  the Liabilities listed on Schedule 1.61(a);

     (b)  all Liabilities for terminated contract miner performance escrow
          amounts (including interest) accrued up to the Closing Date;

     (c)  all Liabilities for accounts payable for which goods have been shipped
          and delivered (whether or not invoiced) or services have been
          performed (whether or not invoiced) and related notes, trade payables
          and earned royalties, to the extent that an Asset Sale Company
          received a benefit before the Closing Date;

     (d)  all inter-company indebtedness owed by any Asset Sale Company to the
          PCC Parent or any of the PCC Parent's Affiliates;

     (e)  except as set forth on Schedule 1.6, all Liabilities for the claims,
          legal actions, suits, litigation, arbitrations, disputes or
          investigations listed on Schedules 3.5(c) and 3.8;

     (f)  all Liabilities of any of the Asset Sale Companies for unpaid Taxes
          with respect to any Tax year or portion thereof ending on or before
          the Closing Date or for any Tax year beginning before and ending after
          the Closing Date to the extent allocable to the

                                       13

          portion of such period beginning before and ending on the Closing Date
          (to the extent of any inconsistencies with Article VII hereof, Article
          VII shall be controlling);

     (g)  all amounts payable as the result of the consummation of the
          transactions contemplated by this Agreement that arise due to any
          change of control provision of any Contract other than those Contracts
          listed on Schedule 5.4(b);

     (h)  all Liabilities of any of the Asset Sale Companies for the unpaid
          Taxes of any Person (including PCC and its subsidiaries) under Reg.
          ss.1.1502-6 (or any similar provision of state, local, or foreign
          law), as a transferee or successor, by contract, or otherwise;

     (i)  all Liabilities for any Environmental Matter or Environmental or
          Response Action related to real property or any other asset owned,
          operated or leased by PCC or any of its Affiliates that is not a
          Purchased Asset (except to the extent otherwise provided in any other
          agreement entered into contemporaneously with this Agreement pursuant
          to which reclamation and other services are to be performed on PCC's
          or its Affiliates' idle properties);

     (j)  all Liabilities for any Environmental Matter or Environmental or
          Response Action (other than Mining Environmental Liabilities) to the
          extent the underlying claim relates to or arises from any activity on
          or through the use of the Purchased Assets and is attributable to acts
          or omissions occurring at or prior to the Closing;

     (k)  all Liabilities of PCC that become a Liability of Buyer under any bulk
          transfer Law of any jurisdiction;

                                       14

     (l)  (1) all Liabilities, if any, of any Asset Sale Company and its Related
          Persons (collectively, the "PCC Group") under the Coal Act, and (2)
          all Liabilities, if any, of the PCC Group under any post-Closing
          amendments to the Coal Act for (i) beneficiaries eligible under the
          Coal Act who are assigned to a member of the PCC Group or for whom a
          member of the PCC Group is required to provide or pay for medical
          benefits pursuant to Sections 9711 or 9712 of the Coal Act or (ii)
          death benefit premiums or unassigned beneficiary premiums (as those
          terms are used in Sections 9704(c) and 9704(d) of the Coal Act) for
          beneficiaries eligible under the Coal Act, that are assessed against
          any member of the PCC Group; provided, for the avoidance of doubt,
          that the Liabilities retained pursuant to (1) and (2) above shall not
          be affected by Buyer or any of its Affiliates being identified under
          the Coal Act or any post-Closing amendments thereto as a successor,
          successor in interest or "Related person" under the Coal Act or any
          post-Closing amendments thereto to any member of the PCC Group solely
          as a result of Buyer's purchase of the Purchased Assets; and

     (m)  all Liabilities under the contracts, agreements, personal and real
          property leases, relationships and commitments of the Asset Sale
          Companies listed on Schedule 1.61(m).

     1.62. Royalty Agreement.

     "Royalty Agreement" shall mean that $20 million Royalty Agreement between
Buyer and PCC based upon the tonnage of coal mined at the Real Property and
earnings of the Business, to be dated as of the Closing Date, in a form to be
agreed upon by PCC and Buyer.

     1.63. SMCRA.

     "SMCRA" shall have the meaning set forth in Section 3.6 hereof.

                                       15

     1.64. Straddle Period.

     "Straddle Period" shall mean any taxable period covering days before and
after the Closing Date.

     1.65. Tax or Taxes.

     "Tax" or "Taxes" mean any federal, state, local, or foreign income, gross
receipts, license, payroll, employment, excise, severance, stamp, occupation,
premium, windfall profits, environmental (including taxes under Code ss.59A),
custom duties, capital stock, franchise, profits, withholding, social security
(or similar), unemployment, disability, real property, personal property, sales,
use, transfer, registration, value added, alternative or add-on minimum,
estimated, reclamation fees or other tax of any kind whatsoever, including any
interest, penalty, or addition thereto, whether disputed or not, but shall not
include, for purposes of this Agreement only, Liabilities under the Coal Act, of
whatever nature and regardless of how denominated.

     1.66. Tax Return.

     "Tax Return" shall mean any original or amended report, return,
declaration, claim for refund, statement, document, schedule, attachment or
other information supplied or required to be supplied to a Governmental
Authority with respect to Taxes, including any return of an affiliated, combined
or unitary group.

     1.67. VDEQ.

     "VDEQ" shall have the meaning set forth in Section 3.6 hereof.

     1.68. VDMME.

     "VDMME" shall have the meaning set forth in Section 3.6 hereof.

                                       16

                                   ARTICLE II
                           PURCHASE AND SALE OF ASSETS

     2.1. Transfer of Assets.

     On the Closing Date, PCC (on behalf of the Asset Sale Companies) shall
cause to be sold, conveyed, transferred, assigned, and delivered to Buyer, and
Buyer shall acquire, the Purchased Assets. At the Closing, subject to the terms
and conditions of this Agreement, PCC agrees to: (i) cause title to the
Purchased Assets to be transferred and delivered to Buyer; and (ii) perform its
obligations under this Agreement to be performed at or before Closing. In full
payment for the Purchased Assets, Buyer shall: (i) assume the Assumed
Liabilities; (ii) pay to PCC (which shall receive such amounts on behalf of the
Asset Sale Companies) the Purchase Price by wire transfer of cash or other
immediately available funds and execute and deliver to PCC the Royalty
Agreement; and (iii) perform its obligations under this Agreement to be
performed at or before Closing. Buyer shall not assume or have any
responsibility with respect to any Liability of PCC Parent, PCC or the Asset
Sale Companies that is not an Assumed Liability.

     2.2. Bills of Sale, Assignment and Assumption Agreements, Conveyance Deeds
          and Other Documents.

     At the Closing, PCC shall cause each of the Asset Sale Companies to: (i)
execute and deliver to Buyer the Bills of Sale, the Assignment and Assumption
Agreements, the Conveyance Deeds and such other documents as may be necessary to
convey to Buyer the Purchased Assets; and (ii) perform its obligations under the
Agreement to be performed at or before the Closing.

                                       17

     2.3. Assumption of Liabilities.

     At the Closing, Buyer shall execute and deliver to PCC the Assignment and
Assumption Agreements and such other documents and instruments as may be
necessary for Buyer to assume all of the Assumed Liabilities. Buyer shall not
assume or have any responsibility, however, with respect to any Liability of PCC
Parent, PCC or the Asset Sale Companies that is not an Assumed Liability.

     2.4. Proration of Liabilities.

     PCC and Buyer shall cooperate with each other to provide for payments due
with respect to the Assumed Liabilities and the Retained Liabilities during the
payment period in which the Closing occurs with all such Liabilities prorated as
of the Closing Date, if applicable.

     2.5. Indemnification and Guaranty Agreement.

     At the Closing, PCC, PCC Parent, Buyer's Ultimate Parent and Buyer shall
execute and deliver the Indemnification and Guaranty Agreement.

     2.6. Administrative Services Agreement.

     At the Closing, PCC and Buyer shall execute and deliver the Administrative
Services Agreement pursuant to which PCC or one of its Affiliates will provide
certain services to Buyer or its Affiliates for a transition period.

     2.7. Intercreditor Agreement.

     At the Closing, in order to set forth certain agreements among PCC, Buyer
and Buyer's third-party lenders, PCC, Buyer and Buyer's third-party lenders
shall execute and deliver the Intercreditor Agreement.

                                       18

     2.8. Additional Documents.

     At the Closing, PCC and Buyer shall, and PCC shall cause the Asset Sale
Companies to, execute and deliver all such other documents or instruments
necessary or appropriate to effect the transactions contemplated by this
Agreement, including the documents provided in Section 5.6 hereof and in this
Article II.

     2.9. Allocation of Purchase Price and Assumed Liabilities.

     The Purchase Price and the Assumed Liabilities (to the extent they
constitute part of the amount realized for federal Income Tax purposes) shall be
allocated among the Purchased Assets in accordance with a schedule to be agreed
upon by Buyer and PCC after the Closing Date. Buyer shall prepare such
allocation schedule and deliver it to PCC upon a date to be agreed upon between
the parties, which date shall be no later than 60 days after the Closing Date.
PCC shall be deemed to agree with such allocation schedule unless, within ten
(10) days after the date PCC receives the allocation schedule from Buyer, PCC
notifies Buyer in writing of (i) each allocation with which it disagrees and
(ii) for each such allocation, the amount that PCC proposes to allocate. If PCC
provides such notice to Buyer, the parties shall proceed in good faith to
resolve mutually the disputed allocation amounts within fifteen (15) days after
the date on which PCC notifies Buyer of a disagreement with Buyer's proposed
allocation. If PCC and Buyer cannot resolve any such differences, the parties
agree to submit such differences to arbitration in Abingdon, Virginia, by the
accounting firm of Deloitte & Touche, LLP or another accounting firm acceptable
to both parties (the "CPA Arbitrator"). The CPA Arbitrator shall make such
review and examination of the relevant facts and documents as the CPA Arbitrator
deems appropriate and shall permit each of Buyer and PCC to make a written
presentation of their respective positions. Within forty-five (45) days after
submission of such dispute by both

                                       19

parties, the CPA Arbitrator shall resolve such dispute in writing and shall
prepare and deliver its decision, which shall (i) be based upon a determination
of the fair market value of the Purchased Assets, (ii) defer to valuations that
have been prepared in accordance with generally accepted valuation techniques
absent manifest error, (iii) be final and binding upon the parties without
further recourse or collateral attack and (iv) accept either Buyer's or PCC's
position in its entirety. The party whose position is not accepted by the CPA
Arbitrator shall pay all fees and costs of such CPA Arbitrator to arbitrate such
dispute. The allocation schedule shall include, at a minimum, information
necessary to complete Part II of IRS Form 8594. The allocation to the Purchased
Assets is intended to comply with the requirements of Section 1060 of the Code.
The parties shall cooperate to comply with all substantive and procedural
requirements of Section 1060, and except for any adjustment to the Purchase
Price hereunder, after the completion and agreement by the parties to the
allocation schedule, such allocation schedule shall be adjusted only if and to
the extent necessary to comply with such requirements of Section 1060. Buyer and
PCC agree that they will not take nor will they permit any Affiliate to take,
for Income Tax purposes, any position inconsistent with such allocation schedule
to the Purchased Assets; provided, however, that (i) Buyer's cost for the
Purchased Assets may differ from the total amount allocated hereunder to reflect
the inclusion in the total cost of items (for example, capitalized acquisition
costs) not included in the total amount so allocated and (ii) the amount
realized by the Asset Sale Companies may differ from the total amount allocated
hereunder to reflect transaction costs that reduce the amount realized for
federal Income Tax purposes.

                                  ARTICLE III
                     REPRESENTATIONS AND WARRANTIES OF PCC

     PCC hereby represents and warrants to Buyer that the statements contained
in this Article III are correct and complete, except as set forth in the
Schedules delivered by PCC to Buyer in

                                       20

connection with this Agreement. The Schedules are arranged in paragraphs
corresponding to the lettered and numbered paragraphs contained in this Article
III.

     3.1. Incorporation.

     PCC and each of the Asset Sale Companies are corporations duly organized,
validly existing and in good standing under the Laws of the respective state or
commonwealth of each such company's incorporation. PCC and each of the Asset
Sale Companies that is not a corporation incorporated under the Laws of Virginia
are duly qualified or licensed to transact business as a foreign corporation in
Virginia and are in good standing under the laws of Virginia. Set forth on
Schedule 3.1 is the name of each state or other jurisdiction in which each such
company has either paid taxes or had an office in the three years prior to the
date of this Agreement.

     3.2. Execution, Delivery and Performance.

     The execution, delivery and performance by PCC of this Agreement and by PCC
and the applicable Asset Sale Company of each other agreement or instrument to
which it is a party executed in connection herewith or delivered pursuant hereto
and the consummation of the transactions contemplated herein and therein will
not, with or without the giving of notice or the passage of time, or both: (i)
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 PCC's or any Asset Sale Company's Articles of Incorporation or
Bylaws or of any material franchise, mortgage, deed of trust, Lien, lease,
license, instrument, agreement, consent, approval, waiver or understanding to
which PCC or any Asset Sale Company is a party or by which any Asset Sale
Company is bound, or any Law or any order, judgment, writ, injunction or decree
to which PCC or any Asset

                                       21

Sale Company is a party or by which PCC, any Asset Sale Company or the Purchased
Assets may be bound or affected; (ii) 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 issued
by a Governmental Authority that is held by PCC or the Asset Sale Companies or
that otherwise relates to the Purchased Assets; or (iii) 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 PCC or any Asset Sale Company is subject.

     3.3. Authorization.

     PCC has full power and authority to enter into and deliver this Agreement
and to perform its obligations hereunder and each of PCC and the Asset Sale
Companies has full power and authority to enter into and deliver each other
agreement or instrument to which it is a party executed in connection herewith
and delivered pursuant hereto and to perform its obligations thereunder. PCC's
execution, delivery and performance of this Agreement and the execution,
delivery and performance of all other agreements and instruments by PCC and each
of the Asset Sale Companies in connection herewith and delivered pursuant hereto
and the transactions contemplated hereby have been duly authorized by all
requisite corporate action on the part of PCC and each of the Asset Sale
Companies. This Agreement and all other agreements or instruments executed by
PCC or any of the Asset Sale Companies in connection

                                       22

herewith and delivered by PCC or any of the Asset Sale Companies pursuant hereto
have been duly executed and delivered by PCC or such Asset Sale Companies and
this Agreement and all other agreements and instruments executed by PCC or any
of the Asset Sale Companies in connection herewith and delivered by PCC or any
of the Asset Sale Companies pursuant hereto constitute the legal, valid and
binding obligation of PCC or such Asset Sale Company, as the case may be,
enforceable in accordance with their respective terms (subject to any applicable
bankruptcy, insolvency, reorganization, moratorium or other similar Laws
affecting generally the enforcement of creditors' rights).

     3.4. Absence of Changes.

     Except as contemplated by this Agreement, since December 31, 2001, none of
the Asset Sale Companies has, with respect to the Purchased Assets:

     (a)  borrowed or agreed to borrow any funds or incurred, or become subject
          to, any Liability, or issued any note, bond or other debt security, or
          guaranteed any indebtedness for borrowed money or capitalized lease
          obligation, except Liabilities incurred in the Ordinary Course of
          Business, none of which would reasonably be expected to result in an
          impact greater than $100,000;

     (b)  paid any Liability other than current Liabilities in the Ordinary
          Course of Business;

     (c)  sold, transferred or otherwise disposed of, or agreed to sell,
          transfer or otherwise dispose of any of the Real Property, or, other
          than in the Ordinary Course of Business, any other Purchased Assets;

     (d)  except in the Ordinary Course of Business, entered into any agreement,
          contract, lease or license (or series of related agreements,
          contracts, leases and licenses) or made or permitted any material
          amendment to or termination, acceleration, modification or
          cancellation of any Contract or breached any provision of any
          Contract;

                                       23

     (e)  merged or consolidated with any other Person;

     (f)  mortgaged, pledged or subjected to any Lien any of its assets or
          properties, other than Permitted Liens;

     (g)  made any capital expenditure (or series of related capital
          expenditures) either (x) involving more than $100,000 or (y) outside
          the Ordinary Course of Business;

     (h)  made any capital investment in, any loan to, or any acquisition of the
          securities or assets of, any other Person (or series of related
          capital investments, loans and acquisitions) either (x) involving
          $100,000 or (y) outside the Ordinary Course of Business;

     (i)  delayed or postponed the payment of accounts payable and other
          Liabilities outside the Ordinary Course of Business;

     (j)  cancelled, compromised, waived or released any right or claim (or
          series of related rights and claims) either (x) involving more than
          $100,000 or (y) outside the Ordinary Course of Business;

     (k)  made any loan to, or entered into any other transaction with, any of
          the directors, officers and employees of such Asset Sale Company
          outside the Ordinary Course of Business;

     (l)  entered into any employment contract or collective bargaining
          agreement, written or oral, or modified the terms of any existing such
          contract;

     (m)  suffered any damage, destruction or loss, whether or not covered by
          insurance, that has had or would reasonably be expected to have a
          Material Adverse Effect;

                                       24

     (n)  implemented or adopted any change in its accounting methods or
          principles or the application thereof; or

     (o)  entered into any agreement, arrangement or understanding with respect
          to any of the foregoing.

     3.5. Real Property.

     (a)  PCC has made available to Buyer all deeds, leases, bills of sale,
          documents of title, abstracts, surveys, plats and maps in the
          possession of the Asset Sale Companies or their Affiliates that relate
          to the Real Property. With respect to the Real Property:

          (i)  the Asset Sale Companies have marketable title to the owned Real
               Property, taken as a whole, and the Real Property is free and
               clear of any Lien (other than Permitted Liens);

          (ii) there are no pending or, to the Knowledge of PCC, threatened
               condemnation proceedings, lawsuits, or administrative actions
               relating to the Real Property;

          (iii) the legal description for the parcels contained in the deed
               thereof describes such parcel fully and adequately, and the
               buildings and improvements are located within the boundary lines
               of the described parcels of land;

          (iv) none of the Asset Sale Companies have been notified that any
               buildings or improvements located on the Real Property are in
               violation of applicable zoning laws and ordinances; and

                                       25

          (v)  there are no outstanding options or rights of first refusal to
               purchase the parcel of Real Property, or any portion thereof or
               interest therein.

     (b)  Schedule 1.57 identifies the coal leases, coal subleases and surface
          leases that comprise a portion of the Real Property. PCC has made
          available to Buyer all coal leases, coal subleases and surface leases
          listed on Schedule 1.57. With respect to each such lease and sublease:

          (i)  the lease or sublease is legal, valid, binding, enforceable, and
               in full force and effect;

          (ii) except for the consents set forth on Schedule 3.7(c) that are
               required to be obtained and the notices given, the lease or
               sublease will continue to be legal, valid, binding, enforceable,
               and in full force and effect on identical terms following the
               consummation of the transactions contemplated hereby (including
               the assignments and assumptions referred to above);

          (iii) no Asset Sale Company nor, to the Knowledge of PCC, any other
               party to the lease or sublease is in breach or default, and no
               event has occurred which, with notice or lapse of time, would
               constitute a breach or default or permit termination,
               modification, or acceleration thereunder;

          (iv) no Asset Sale Company nor, to the Knowledge of PCC, any other
               party to the lease or sublease has repudiated any provision
               thereof; and

          (v)  none of the Asset Sale Companies has assigned, transferred,
               conveyed or subjected to a Lien any interest in the leasehold or
               subleasehold, other than those created pursuant to the terms of
               that lease or sublease.

                                       26

     (c)  There is not any third party adverse claim to any of the Real
          Property, other than Permitted Liens, and, to the Knowledge of PCC, no
          party is in wrongful possession of any parcel of the Real Property.

     (d)  PCC has made available to Buyer geological data, reserve data, mine
          maps, core hole logs and associated data, coal measurements, coal
          samples, lithologic data, coal reserve calculations or reports,
          washability analyses or reports, mine plans, mining permit
          applications and supporting data, engineering studies and all other
          information, maps, reports and data, if any, in the possession of the
          Asset Sale Companies and relating to or affecting the Real Property,
          including the coal reserves, coal ownership, coal leases to the Asset
          Sale Companies, coal leases from the Asset Sale Companies to third
          parties, mining conditions, mines, and mining plans, if any, of the
          Asset Sale Companies as prepared and utilized by the Asset Sale
          Companies in any Mining Activities (collectively, the "Mining Data").
          NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO THE CONTRARY, BUYER
          ACCEPTS THE ASSET SALE COMPANIES' COAL RESERVES IN OR UNDER THE REAL
          PROPERTY, AS IS, WHERE IS, TOGETHER WITH THE MINING DATA, FREE OF ANY
          WARRANTY (EXPRESS OR IMPLIED) WITH REGARD TO THE MINEABILITY,
          WASHABILITY, RECOVERABILITY, VOLUME, OR QUANTITY OR QUALITY OF ANY
          COAL RESERVE. The coal reserves mined by the Asset Sale Companies
          (whether such reserves are owned or leased by the Asset Sale
          Companies) are not subject to any mining rights of any other Person.

     3.6. Environmental Compliance.

     (a)  Each Asset Sale Company is in material compliance with all
          Environmental Laws related to the Purchased Assets. Neither PCC nor
          any Asset Sale Company has been notified by any Governmental Authority
          of any current, alleged or unresolved violation of any Environmental
          Laws applicable to Mining Activities. if any, including any
          investigatory, remedial or corrective obligations, that would result
          in (i) closure, suspension or restriction of any mine or
          mining-related activity on the Real Property or (ii) exposure of Buyer
          to the imposition of any fines or other civil or criminal monetary
          penalty in excess of $5,000.

     (b)  To the Knowledge of PCC, after the Closing, Buyer will not be liable
          for any fines, penalties, fees, Taxes or other governmental charges
          assessed with respect to notices of violation, cessation orders,
          closure orders, show cause orders or other governmental enforcement
          actions issued prior to Closing with respect to the Purchased Assets.
          Neither this Agreement nor the consummation of the transactions that
          are the subject of this Agreement will result in any Buyer Liabilities
          for site investigation or cleanup, or notification to or consent of
          any Governmental Agency or third parties, pursuant to any of the
          so-called "transaction-triggered" or "responsible property transfer"
          Environmental Laws.

(c)      None of the Purchased Assets is identified on (i) the current or
         proposed National Priorities List under 40 C.F.R. ss. 300, (ii) the
         Comprehensive Environmental Response, Compensation and Liability
         Inventory System ("CERCLIS") list, or (iii) any list arising from a
         federal, state or local statute similar to CERCLA. To the Knowledge of
         PCC, the Real Property is not Contaminated with any Hazardous
         Substance.

                                       27

     (d)  (A) None of the Purchased Assets has been or is being used in any
          manner associated with the production, manufacture, processing,
          generation, storage, treatment, disposal, management, shipment or
          transportation of Hazardous Substances and no such Purchased Assets
          are Contaminated by any Hazardous Substance; (B) there are no
          underground storage tanks regulated pursuant to RCRAss. 9001 (42
          U.S.C. ss. 6991) or equivalent authorized state program, and no above
          ground storage tanks, located at, on, in or under the Purchased
          Assets; (C) there is no asbestos-containing material in any form or
          condition located at, on, in or under the Purchased Assets; (D) there
          are no materials or equipment containing polychlorinated biphenyls
          located at, on, in or under the Purchased Assets, (E) there are no
          landfills or other areas located at, on, in or under the Purchased
          Assets where Hazardous Substances have been disposed, and (F) neither
          PCC nor any Asset Sale Company has disposed of any Hazardous Substance
          at any offsite disposal area located on the property of any other
          Person, other than a facility permitted by any Governmental Authority
          with jurisdiction to receive such Hazardous Substance.

     (e)  No Asset Sale Company has, with respect to the Purchased Assets,
          either expressly or by operation of Law, assumed or undertaken any
          Liability, including without limitation, any Liability for corrective
          or remedial action, of any other Person relating to any Environmental
          Laws.

     (f)  To the Knowledge of PCC, no conditions existing as of the Closing Date
          and relating to the Purchased Assets or the activities of the Asset
          Sale Companies or any of their respective predecessors or Affiliates
          will prevent or materially hinder Buyer's compliance with
          Environmental Laws, require Buyer to undertake any investigatory,
          remedial or corrective actions pursuant to Environmental Laws or
          impose upon Buyer any other Liabilities pursuant to Environmental
          Laws, including without limitation, any Environmental Laws relating to
          onsite or offsite releases or threatened releases of Hazardous
          Substances or imposing Liability for personal injury, property damage
          or natural resource damage.

                                       28

     3.7. Contracts.

     (a)  PCC has made available to Buyer copies of all of the written
          Contracts, or a written summary setting forth the terms and conditions
          where no copies exist, including all amendments, modifications,
          waivers and elections applicable thereto.

     (b)  As to the Asset Sale Companies party thereto: (i) the Contracts are
          valid and binding, enforceable in accordance with their respective
          terms (subject to any applicable bankruptcy, insolvency,
          reorganization, moratorium or other similar Laws affecting generally
          the enforcement of creditors' rights), and are in full force and
          effect; (ii) the consummation of the transactions contemplated herein
          will not, with or without the giving of notice or the passage of time,
          or both, 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 the Contracts; (iii) no Asset Sale Company, nor to the
          Knowledge of PCC, any other party is in material breach or default,
          and no event has occurred that, with notice or lapse of time, would
          constitute a breach or default, or permit termination, modification or
          acceleration, under the Contracts; and (iv) no Asset Sale Company, nor
          to the Knowledge of PCC, any other party has repudiated any provision
          of the Contracts.

     (c)  Schedule 3.7(c) sets forth the consents and approvals of third parties
          and Governmental Authorities required to be obtained as a result of
          the transactions contemplated by this Agreement.

                                       29

     3.8. Litigation; Claims.

     (a)  Schedules 3.5(c), 3.6 and 3.8 list all claims, legal actions, suits,
          litigation, arbitrations, disputes, investigations, proceedings by or
          before any Governmental Authority involving more than $100,000 and all
          orders, decrees or judgments, now pending or in effect, or, to the
          Knowledge of PCC, threatened or contemplated, against or affecting the
          Asset Sale Companies, the Purchased Assets, or the consummation of the
          transactions contemplated by this Agreement, except to the extent
          involving Taxes for Pre-Closing Periods.

     (b)  There are no existing claims by or disputes involving more than
          $100,000 with Persons owning or occupying lands or realty adjoining or
          near any of the Real Property regarding Mining Activities, if any, by
          the Asset Sale Companies or regarding the location of boundary lines,
          encroachments, mineral rights, subsidence, water quantity or quality,
          blasting damage, transportation of coal or other materials, nuisances
          or any other similar matter.

     3.9. No Broker.

          None of the Asset Sale Companies, PCC or the PCC Parent has had any
     dealings, negotiations or communications with or retained any broker or
     other intermediary in connection with the transactions contemplated by this
     Agreement and none of the foregoing is committed to any Liability for any
     brokers' or finders' fees or any similar fees in connection with the
     transactions contemplated hereby, other than Rothschild Inc., who shall be
     compensated solely by PCC or an Affiliate of PCC.

                                       30

     3.10. Restrictions on Business Activities.

          Except for this Agreement, there is no agreement, judgment,
     injunction, order or decree binding upon PCC or any of the Asset Sale
     Companies that has or would reasonably be expected to have the effect of
     prohibiting the conduct of the Business.

     3.11. Powers of Attorney.

          There are no outstanding powers of attorney executed on behalf of any
     of the Asset Sale Companies affecting the Purchased Assets.

     3.12. Transactions With Affiliates.

          The Contracts do not include any Liability between any Asset Sale
     Company and any Affiliate of such Asset Sale Company. At the Closing, the
     Purchased Assets will not include any receivable or other Liability from an
     Affiliate of any Asset Sale Company.

     3.13. Absence of Certain Payments.

          During the five (5) year period prior to the date of this Agreement,
     to the Knowledge of PCC, none of the Asset Sale Companies have (nor has any
     director, officer, agent, or employee of any Asset Sale Company nor any
     other person, acting on behalf of any Asset Sale Company) directly or
     indirectly: used any of such company's funds for unlawful contributions,
     gifts, entertainment or other unlawful expenses relating to political
     activity; made any unlawful payment to foreign or domestic government
     officials or employees or to foreign or domestic political parties or
     campaigns from such company's funds; violated any provision of the Foreign
     Corrupt Practices Act of 1977 applicable to such company; established or
     maintained any unlawful or unrecorded fund of such company's monies or
     other assets; made any false or fictitious entry on the books or records of
     such company; or made any bribe, rebate, payoff, influence payment,
     kickback, or other unlawful payment, to any person or entity, private or
     public, regardless of form, whether in money, property, or services, to
     obtain favorable treatment in securing business or to obtain special
     concessions for such company, or to pay for favorable treatment for
     business secured or for special concessions already obtained for such
     company.

                                       31

     3.14. Disclosure.

          The representations and warranties contained in this Article III do
     not contain any untrue statement of a material fact or omit to state any
     material fact necessary in order to make the statements and information
     contained in this Article III not misleading. ARTICLE IV REPRESENTATIONS
     AND WARRANTIES OF BUYER

     Buyer hereby represents and warrants to PCC that:

     4.1. Organization.

          Buyer is a duly formed limited liability company, validly existing and
     in good standing under the Laws of the State of Delaware.

     4.2. Execution, Delivery and Performance.

          The execution, delivery and performance of this Agreement and each
     other agreement or instrument executed in connection herewith or delivered
     pursuant hereto and the consummation of the transactions contemplated
     herein and therein will not, with or without the giving of notice or the
     passage of time, or both, (i) conflict with, or result in a violation or
     breach of, or a default, right to accelerate or loss of rights under, or
     result in the creation of any Lien, under or pursuant to, any provision of
     Buyer's organizational documents or of any franchise, mortgage, deed of
     trust, lease, license, instrument, agreement, consent, approval, waiver or
     understanding, any Law, or any finding, order, judgment, writ, injunction
     or decree to which Buyer is a party or by which Buyer or its respective
     assets may be bound or affected; or (ii) require the approval, consent or
     authorization of, or prior notice to, filing with or registration with, any
     Governmental Authority, or any other Person or entity.

                                       32

     4.3. Authorization.

          Buyer has full power and authority to enter into and deliver this
     Agreement, and each other agreement or instrument (to which it is a party)
     executed in connection herewith or delivered pursuant hereto and to perform
     its obligations hereunder and thereunder. Buyer's execution, delivery and
     performance of this Agreement and all other agreements and instruments
     executed in connection herewith or delivered pursuant hereto and the
     transactions contemplated hereby have been duly authorized by all requisite
     action. This Agreement and all other agreements or instruments executed by
     Buyer in connection herewith or delivered by Buyer pursuant hereto have
     been duly executed and delivered by Buyer and this Agreement and all other
     agreements and instruments executed by Buyer in connection herewith or
     delivered by Buyer pursuant hereto constitute Buyer's legal, valid and
     binding obligation, enforceable in accordance with their respective terms
     (subject to any applicable bankruptcy, insolvency, reorganization,
     moratorium or other similar Laws affecting generally the enforcement of
     creditors' rights).

     4.4. No Broker.

          Buyer has had no dealings, negotiations or communications with any
     broker or other intermediary in connection with the transactions
     contemplated by this Agreement nor is it committed to any Liability for any
     brokers' or finders' fees or any similar fees in connection with the
     transactions contemplated hereby.

                                       33

     4.5. Reclamation and Environmental Compliance.

          Buyer and all operators it owns or controls are in compliance with all
     Environmental Laws and Reclamation Laws in all material respects, and are
     not "permit blocked" under the Applicant Violator System administered by
     the Department of the Interior.

     4.6. Financing.

          Buyer will have available to it, at the Closing, financial resources
     sufficient to consummate the transactions contemplated by this Agreement.

     4.7. Disclosure.

          The representations and warranties contained in this Article IV do not
     contain any untrue statement of a material fact or omit to state any
     material fact necessary in order to make the statements and information
     contained in this Article IV not misleading.

                                    ARTICLE V
                               CERTAIN COVENANTS

     5.1. Business in Ordinary Course.

          Except as provided in this Agreement, between the date of this
     Agreement and the Closing, PCC shall cause each of the Asset Sale
     Companies, in relation to the Purchased Assets, to: (i) carry on its
     business in the Ordinary Course of Business; (ii) use commercially
     reasonable efforts to preserve intact its Business, current business
     organization and properties until the Closing Date, and maintain the
     relations and good will with its suppliers, customers, landlords,
     creditors, agents, and others having business relationships with such Asset
     Sale Company; (iii) not enter into any contract or other obligation binding
     upon such Asset Sale Company involving an expenditure, purchase, sale, cost
     or commitment (unless such contract is cancelable in thirty or fewer days,
     involves less than $100,000, or is for consumable purchases) without the
     prior written consent of Buyer; and (iv) report regularly to Buyer
     concerning the status of the business and finances of such Asset Sale
     Company.

                                       34

     5.2. Compliance with Law.

          Between the date of this Agreement and the Closing, each of the Asset
     Sale Companies shall comply in all material respects with all Laws and with
     all orders of any Governmental Authority.

     5.3. Cooperation.

          Subject to the terms and conditions herein provided, each of PCC and
     Buyer agrees to use its commercially reasonable efforts to take, or cause
     to be taken, all action, and to do, or cause to be done, all things
     necessary, proper and advisable under Law, to consummate and make effective
     the transactions contemplated by this Agreement. In case at any time after
     the Closing Date any further action is necessary or desirable to carry out
     the purposes of this Agreement, PCC and Buyer will, and PCC will cause the
     Asset Sale Companies to, execute any additional instruments reasonably
     necessary to consummate the transactions contemplated hereby.

     5.4. Notices and Consents.

          PCC and Buyer each will use their commercially reasonable efforts to
     obtain consents of all Governmental Authorities and other third parties
     necessary to the consummation of the transactions contemplated by this
     Agreement. PCC shall have responsibility for providing any notices to third
     parties that may be required by the transactions contemplated by this
     Agreement and for obtaining, or causing to be obtained, at its sole cost
     and expense, the consents listed on Schedule 5.4(a) and Buyer shall have
     responsibility for obtaining, at its sole cost and expense, all consents
     listed on Schedule 5.4(b), with the other party in each case using its
     commercially reasonable efforts to assist the responsible party in
     obtaining such consents.

                                       35

     5.5. Publicity.

          All general notices, releases, statements and communications to any
     suppliers, distributors and customers of the Asset Sale Companies, to the
     general public and to the press relating to the transactions contemplated
     by this Agreement shall be made only at such times and in such manner as
     may be mutually agreed upon by PCC and Buyer; provided, however, that
     either party hereto (or, in the case of PCC, the PCC Parent) shall be
     entitled to make a public announcement of the foregoing if: (a) in the
     opinion of its legal counsel, such announcement is required to comply with
     Law or any listing agreement with any national securities exchange or
     inter-dealer quotation system; and (b) such disclosing party gives a
     reasonable period of notice and opportunity to comment to the other party
     hereto of its intention to make such public announcement; provided, that,
     failure to comment within 24 hours of receipt of such notice shall be
     deemed a waiver of the opportunity to comment and provided, further, that
     nothing in this Section 5.5 shall operate to prohibit any Asset Sale
     Company or Buyer from communicating, after the Closing Date, with their
     respective suppliers, distributors, customers and Governmental Authorities
     the fact that the transaction has occurred or to employees regarding their
     employment or the terms and conditions thereof, the operation of the
     Purchased Assets or matters necessarily related thereto.

                                       36

     5.6. Replacement Bonds; Insurance and Guarantees; Other Filings.

          At or prior to the Closing Date, Buyer shall have: (i) secured
     replacement bonds, replacement sureties, guarantees or other financial
     security, if applicable, sufficient to allow PCC and the Persons who will
     be its Affiliates after the Closing Date to be relieved or released as of
     the Closing Date from all financial commitments, guarantees, collateral
     agreements or similar undertakings listed on Schedule 5.6; (ii) obtained
     property and liability insurance customary for a company that is engaged in
     the Business or a business similar to the Business to insure the Purchased
     Assets; and (iii) delivered copies of such documents to PCC.

     5.7. Exclusivity.

          PCC will not (nor will it cause or permit any of the Asset Sale
     Companies to) (i) solicit, initiate or encourage the submission of any
     proposal or offer from any Person relating directly or indirectly to the
     acquisition of the Purchased Assets, or any portion thereof, or (ii)
     participate in any discussions or negotiations regarding, furnish any
     information with respect to, assist or participate in, or facilitate in any
     other manner, any effort or attempt by any Person to do or seek any of the
     foregoing. PCC will notify Buyer immediately if any Person makes any
     proposal, offer, inquiry or contact with respect to any of the foregoing.

     5.8. Access.

          At or prior to the Closing Date, PCC will permit (and will cause each
     of the Asset Sale Companies to permit) representatives of Buyer to have
     full access at all reasonable times, and in a manner so as not to interfere
     with the normal business operations of the Asset Sale Companies, to all
     premises, properties, personnel, books, records (including Tax records),
     contracts and documents of or pertaining to each of the Asset Sale
     Companies as related to the Purchased Assets. Copies of and access to
     accounting records, ledgers and other pertinent documents or work papers
     related to the Purchased Assets will be made available to Buyer at all
     reasonable times, and in a manner so as not to interfere with the normal
     business operations of the Asset Sale Companies, upon request.

                                       37

     5.9. Notice of Developments.

          Each party will give prompt written notice to the other party of any
     material adverse development causing a breach of any of its own
     representations and warranties in Article III and Article IV above. No
     disclosure by any party pursuant to this Section 5.9, however, shall be
     deemed to amend or supplement the Schedules to such representations and
     warranties or to prevent or cure any misrepresentation, breach of warranty
     or breach of covenant.

     5.10. Further Assurances.

          The parties shall cooperate in a commercially reasonable manner with
     each other and with their respective representatives in connection with any
     steps required to be taken as part of their respective obligations under
     this Agreement, and shall (a) furnish upon request to each other such
     further information; (b) execute and deliver to each other such other
     documents; and (c) do such other acts and things, all as the other party
     may reasonably request for the purpose of carrying out the intent of this
     Agreement and the transactions contemplated.

                                   ARTICLE VI
                         CONDITIONS PRECEDENT TO CLOSING

     6.1. Conditions Precedent to Each Party's Obligations.

          The respective obligations of each party to consummate the
     transactions contemplated by this Agreement are subject to the satisfaction
     at or prior to the Closing Date of the following conditions precedent:

               (a) no action, suit, proceeding, order, decree or injunction
          shall have been commenced, threatened or entered by or before any
          Governmental Authority that remains in force and that (i) prohibits,
          seeks to prohibit, or imposes or seeks substantial damages in
          connection with, the consummation of the transactions contemplated by
          this Agreement, (ii) seeks or imposes relief that causes or would
          cause any of the transactions contemplated by this Agreement to be
          rescinded following consummation, or (iii) affects adversely the right
          of Buyer to own the Purchased Assets or to operate the Business on or
          after the Closing Date;

                                       38

               (b) PCC Parent, PCC, Buyer and Buyer's Ultimate Parent shall have
          executed and delivered to each other party thereto the Administrative
          Services Agreement, the Indemnification and Guaranty Agreement and any
          other documentation required in all transactions contemplated or
          covered by all such agreements, all in form and substance as set forth
          in Exhibits A and F attached hereto and the same shall be in full
          force and effect;

               (c) all other transactions pursuant to which Buyer or any of its
          Affiliates acquire assets related to the Business shall have been
          consummated prior to or simultaneously with the transactions
          contemplated by this Agreement;

               (d) PCC and Buyer shall have executed and delivered to each other
          all such other documents or instruments necessary or appropriate to
          effect the transactions contemplated by this Agreement, including the
          documents provided in Section 5.6 hereof; and

               (e) PCC shall have obtained, or caused to have been obtained, the
          consents listed in Schedule 6.1(e)(i) and PCC shall have provided such
          payments as may be reasonably required to obtain all such consents.
          Buyer shall have obtained, or caused to have been obtained, the
          consents listed in Schedule 6.1(e)(ii) and Buyer shall have provided
          such payments, guarantees and/or assurances as may be reasonably
          required to obtain all such consents.

                                       39

     6.2. Conditions Precedent to Obligations of Buyer.

          The obligations of Buyer to consummate the transactions contemplated
     by this Agreement are subject to the satisfaction or waiver at or prior to
     the Closing Date of the following conditions precedent:

               (a) all of the representations and warranties of PCC set forth in
          this Agreement or in any Exhibit, Schedule or document delivered
          pursuant hereto, without regard to any qualification or limitation
          with respect to materiality (whether by reference to "Material Adverse
          Effect" or otherwise), shall be true and correct in all respects as of
          the date hereof and at and as of the Closing Date with the same effect
          as though such representations and warranties were made at and as of
          the Closing unless the aggregate failure of such representations or
          warranties to be true and correct does not have a Material Adverse
          Effect; provided that if a representation or warranty is expressly
          made only as of a specific date, it need only be true and correct in
          all respects as of such date, and Buyer shall have received the PCC
          Closing Certificate required by Section 6.2(g) below dated as of the
          Closing Date executed by PCC to such effect;

               (b) all of the covenants and obligations that PCC is required to
          perform or to comply with pursuant to this Agreement at or prior to
          the Closing Date shall have been duly performed and complied with in
          all material respects;

               (c) all proceedings and actions, corporate or other, to be taken
          by PCC or the Asset Sale Companies in connection with the transactions
          contemplated by this Agreement and all documents incident thereto,
          including all actions necessary to authorize the execution, delivery
          and performance of this Agreement and the transactions contemplated
          hereby, shall have been taken and shall be reasonably satisfactory in
          form and substance to Buyer and Buyer's counsel;

                                       40

               (d) PCC shall have, and shall have caused the Asset Sale
          Companies to have, executed and delivered the Bills of Sale, the
          Assignment and Assumption Agreements, the Conveyance Deeds and such
          other documents as may be necessary to convey to Buyer the Purchased
          Assets;

               (e) between the date of this Agreement and the Closing Date,
          there shall not have been a change, event or occurrence that,
          individually, or together with any other change, event or occurrence,
          has had or could reasonably be expected to have a Material Adverse
          Effect;

               (f) Buyer shall have received an opinion of counsel to PCC
          addressed to Buyer substantially in the form of Exhibit H; and

               (g) Buyer shall have received an executed copy of the PCC Closing
          Certificate.

     6.3. Conditions Precedent to Obligations of PCC.

          The obligation of PCC to consummate and cause the consummation of the
     transactions contemplated by this Agreement is subject to the satisfaction
     or waiver at or prior to the Closing Date of the following conditions
     precedent:

          (a) all of the representations and warranties of Buyer set forth in
     this Agreement or in any Exhibit, Schedule or document delivered pursuant
     hereto, without regard to any qualification or limitation with respect to
     materiality, shall be true and correct in all respects as of the date
     hereof and at and as of the Closing Date with the same effect as though
     such representations and warranties were made at and as of the Closing
     unless the aggregate failure of such representations or warranties to be
     true and correct does not have a material adverse effect on Buyer's ability
     to consummate the transactions contemplated by this Agreement or fulfill
     its post-Closing obligations hereunder; provided that if a representation
     or warranty is expressly made only as of a specific date, it need only be
     true and correct in all respects as of such date, and PCC shall have
     received Buyer's Closing Certificate required by Section 6.3(j) below dated
     as of the Closing Date executed by Buyer to such effect;

          (b) all of the covenants and obligations that Buyer is required to
     perform or to comply with pursuant to this Agreement at or prior to the
     Closing Date shall have been duly performed and complied with in all
     material respects;

          (c) all proceedings and actions, corporate or other, to be taken by
     Buyer in connection with the transactions contemplated by this Agreement,
     and all documents incident thereto, including all actions necessary to
     authorize the execution, delivery and performance of this Agreement and the
     transactions contemplated hereby, shall have been taken and shall be
     reasonably satisfactory in form and substance to PCC and its counsel;

          (d) PCC shall have received, on behalf of the Asset Sale Companies,
     the Purchase Price by wire transfer of cash or other immediately available
     funds and the execution and delivery by Buyer of the Royalty Agreement;

          (e) Buyer and Buyer's third-party lenders shall have executed and
     delivered the Intercreditor Agreement;

                                       41

          (f) Buyer shall have executed and delivered the Assignment and
     Assumption Agreements and such other documents as may be necessary for
     Buyer to assume all of the Assumed Liabilities;

          (g) Buyer shall have delivered to PCC satisfactory evidence of
     compliance with Section 5.6;

          (h) between the date of this Agreement and the Closing Date, there
     shall not have been a change, event or occurrence that, individually, or
     together with any other change, event or occurrence, has had or could
     reasonably be expected to have a Material Adverse Effect;

          (i) PCC shall have received an opinion of counsel to Buyer addressed
     to PCC substantially in the form of Exhibit I; and

          (j) PCC shall have received an executed copy of Buyer's Closing
     Certificate.

                                  ARTICLE VII
                               CERTAIN TAX MATTERS

     7.1. Property Taxes.

          Property Taxes of the Asset Sale Companies with respect to the
     Purchased Assets (including, without limitation, property Taxes payable as
     a tenant or lessee under any lease) will be pro-rated as of the Closing
     Date and, notwithstanding any other provision of this Agreement, the
     economic burden of any such property Tax will be borne by (i) the Asset
     Sale Companies for all Pre-Closing Periods and the portion of any Straddle
     Period through the Closing Date and (ii) by Buyer for all Post-Closing
     Periods and the portion of any Straddle Period after the Closing Date.
     Accordingly, notwithstanding any other provision of this Agreement, (i) if
     any Asset Sale Company pays such a property Tax with respect to a
     Post-Closing Period or the portion of Straddle Period after the Closing
     Date, Buyer will reimburse PCC on behalf of such Asset Sale Company within
     15 days after receiving from PCC written demand for the amount of such
     property Tax, and (ii) if Buyer pays such a property Tax with respect to a
     Pre-Closing Period or the portion of a Straddle Period through the Closing
     Date, PCC on behalf of the Asset Sale Companies will reimburse Buyer within
     15 days after receiving from Buyer written demand for the amount of such
     property Tax. For purposes of pro-rating property Taxes, the amount of any
     property Tax attributable to the portion of a Straddle Period through the
     Closing Date shall be deemed to be the amount of such property Taxes for
     the entire Straddle Period multiplied by a fraction, the numerator of which
     is the number of days in the Straddle Period through the Closing Date and
     the denominator of which is the number of days in the entire Straddle
     Period. In determining the Straddle Period for property Taxes, the Tax
     period as reflected on the statement of Taxes due, property Tax bill,
     property "tax ticket," or any other request for payment from a Governmental
     Authority will determine the taxable period (e.g., a Virginia property Tax
     bill that indicates the tax year as 2002 is for a Tax for the taxable
     period January 1, 2002 through December 31, 2002).

                                       42

     7.2. Sales and Use Taxes.

          Buyer and PCC or the Asset Sale Companies hereby intend that the
     transaction be an occasional sale within the meaning of Virginia Code
     Section 58.1-602 and regulations thereunder, and therefore exempt from
     Virginia sales and use Tax pursuant to Virginia Code Section 58.1-609. PCC
     will be responsible for sales and use Taxes payable as a result of the
     failure of this transaction to qualify as an occasional sale or as an
     exempt transaction under any other Virginia law; provided, however, that
     any use Tax payable as a result of this transaction that would be payable
     regardless of whether the transaction qualifies as an occasional sale or
     not shall be paid by Buyer.

     7.3. Transfer Taxes.

          All transfer, recording and similar Taxes arising in connection with
     the transactions contemplated hereunder shall be borne equally by PCC and
     Buyer. PCC and Buyer shall (and they shall cause their respective
     Affiliates to) cooperate to comply with all Tax Return requirements for
     such Taxes and provide such documentation and take such other actions as
     may be necessary to minimize the amount of any such Taxes.

                                       43

7.4. Access for Tax Returns.

          Following the Closing Date, Buyer shall, at reasonable times, and in a
     manner so as not to interfere with normal business operations, allow PCC
     (and if requested by PCC, representatives of federal, state or local
     agencies) access to the Purchased Assets for purposes of reviewing
     information pertinent to any Tax Return filed by PCC Parent or any of its
     Affiliates, including the Asset Sale Companies.

                                  ARTICLE VIII
                                  TERMINATION

     8.1. Termination.

          This Agreement may be terminated prior to the Closing Date only as
     follows:

               (a) by mutual written consent of PCC and Buyer;

               (b) by either PCC or Buyer, if the Closing Date shall not have
          occurred prior to the close of business on December 31, 2002 or such
          later date as the parties may agree in writing (provided, that the
          right to terminate this Agreement under this Section 8.1(b) shall not
          be available to any party whose failure to fulfill any obligation
          under this Agreement has been the cause, in whole or in part, of, or
          has resulted in, the failure of the conditions in Article VI to be
          satisfied and the Closing Date to occur on or before such date);

                                       44

               (c) by PCC or Buyer if an action, suit, or proceeding, shall have
          been commenced or threatened by or before any Governmental Authority,
          or any order, decree or injunction shall have been entered therein,
          that (i) prohibits, seeks to prohibit, or imposes or seeks substantial
          damages in connection with, the consummation of the transactions
          contemplated by this Agreement, (ii) seeks or imposes relief that
          causes or would cause any of the transactions contemplated by this
          Agreement to be rescinded following consummation, or (iii) affects
          adversely the right of Buyer to own the Purchased Assets or to operate
          the Business;

               (d) by Buyer if (i) the representations of PCC contained in this
          Agreement are not true and correct in all material respects as if made
          at and as of that time, except for failures to be true and correct
          that are capable of being and are cured within fifteen (15) days after
          written notice from Buyer to PCC of such failure; or (ii) PCC has
          failed to comply materially with its respective obligations under this
          Agreement, except for failures to comply that are capable of being and
          are cured within fifteen (15) days after written notice from Buyer to
          PCC of such failure;

               (e) by PCC if (i) the representations of Buyer contained in this
          Agreement are not true and correct in all material respects as if made
          at and as of that time, except for failures to be true and correct
          that are capable of being and are cured within fifteen (15) days after
          written notice from PCC to Buyer of such failure; or (ii) Buyer has
          failed to comply materially with its obligations under this Agreement,
          except for failures to comply that are capable of being and are cured
          within fifteen (15) days after written notice from the PCC to Buyer of
          such failure; or

                                       45

               (f) by PCC, if by November 25, 2002, Buyer has not obtained
          approval by its third party lenders of the Conveyance Deeds, Royalty
          Agreement and Intercreditor Agreement with such terms as are
          reasonably acceptable to PCC.

     8.2. Effect of Termination.

          If this Agreement is terminated pursuant to Section 8.1 hereof, all
     further obligations of the parties under or pursuant to this Agreement
     shall terminate without further Liability of either party to the other
     except: (a) as set forth in Section 9.4; and (b) for breaches of
     representations, warranties, or covenants or for fraud. PCC and Buyer
     hereby agree that the provisions of this Section 8.2 and of Section 9.4
     shall survive any termination of this Agreement pursuant to the provisions
     of this Article VIII.

                                   ARTICLE IX
                                 MISCELLANEOUS

     9.1. Entire Agreement.

          This Agreement, the documents referred to herein and to be delivered
     pursuant hereto and any other agreement entered into contemporaneously with
     this Agreement among PCC, PCC Parent, Buyer and Buyer's Ultimate Parent or
     the Affiliates of any of them constitute the entire agreement between the
     parties pertaining to the subject matter hereof, and supersede all prior
     agreements, understandings, negotiations and discussions of the parties,
     whether oral or written, and there are no warranties, representations or
     other agreements between the parties in connection with the subject matter
     hereof, except as specifically set forth herein or therein.

                                       46

     9.2. Amendment.

          This Agreement may be amended by an instrument in writing and signed
     on behalf of all of the parties hereto at any time.

     9.3. Extension; Waiver.

          At any time prior to the Closing Date, the parties may (i) extend the
     time for the performance of any of the obligations or other acts of the
     other parties hereto, (ii) waive any inaccuracies in the representations
     and warranties contained herein or in any document, certificate or writing
     delivered pursuant hereto or (iii) waive compliance with any of the
     agreements or conditions contained herein, other than the conditions
     contained in Section 6.1(a) hereof as it relates to the entry of an order
     in any proceeding by or before a Governmental Authority. Any agreement on
     the part of any party to any such extension or waiver shall be valid only
     if set forth in an instrument in writing and signed on behalf of such
     party.

     9.4. Expenses.

          Whether or not the transactions contemplated by this Agreement are
     consummated, each of the parties hereto shall pay the fees and expenses of
     their respective counsel, investment bankers, financial advisors,
     accountants and other experts and the other expenses incident to the
     negotiation and preparation of this Agreement and consummation of the
     transactions contemplated hereby.

     9.5. Bulk Sales Waiver.

          Buyer hereby waives compliance with all applicable bulk sales Laws.

     9.6. Governing Law.

          This Agreement shall be construed and interpreted according to the
     Laws of the Commonwealth of Virginia, without regard to the conflicts of
     Law rules thereof.

                                       47

     9.7. Assignment.

          This Agreement and each party's respective rights hereunder may not be
     assigned at any time except as expressly set forth herein without the prior
     written consent of the other party, provided that PCC may assign its rights
     hereunder to any Affiliate of PCC after the Closing Date without the
     consent of Buyer and Buyer may assign its rights hereunder to any Affiliate
     of Buyer prior to, at or after the Closing Date without the consent of PCC
     and, further provided, that nothing in this Agreement shall prevent a
     successor in interest to either party from enforcing the provisions of this
     Agreement.

     9.8. 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 party in the manner provided by this Section 9.8:

If to PCC:                    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

                                       48

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:                  Alpha Land and Reserves, 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.

     9.9. Counterparts; Headings.

          This Agreement may be executed in several counterparts, each of which
     shall be deemed an original, but such counterparts shall together
     constitute but one and the same Agreement. The Table of Contents and
     Article and Section headings in this Agreement are inserted for convenience
     of reference only and shall not constitute a part hereof.

     9.10. Interpretation; Construction.

               (a) Unless the context requires otherwise, all words used in this
          Agreement in the singular number shall extend to and include the
          plural, all words in the plural number shall extend to and include the
          singular and all words in any gender shall extend to and include all
          genders.

                                       49

               (b) This Agreement has been fully negotiated by the parties
          hereto and shall not be construed by any Governmental Authority
          against either party as the drafting party.

     9.11. 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.

     9.12. No Reliance.

          No third party is entitled to rely on any of the representations,
     warranties and agreements contained in this Agreement and PCC and Buyer
     assume no Liability to any third party because of any reliance on the
     representations, warranties and agreements of PCC and Buyer contained in
     this Agreement, other than Section 5.5 hereof, which is intended to be for
     the benefit of the Persons expressly covered thereby and may be enforced by
     such Persons.

     9.13. Retention of and Access to Records.

          After the Closing Date, Buyer shall retain for a period consistent
     with Buyer's record retention policies and practices those books and
     records relating to the Asset Sale Companies delivered to Buyer. Buyer also
     shall provide to PCC and its Affiliates reasonable access thereto, during
     normal business hours and on at least three days' prior written notice, to
     enable them to prepare financial statements or Tax Returns or deal with Tax
     audits or litigation. Buyer shall deliver to PCC at least thirty days
     written notice prior to the destruction or other disposal of any such books
     and records. PCC and its Affiliates may elect to take delivery of any such
     books and records that Buyer intends to destroy or otherwise dispose of and
     to copy any such books and records that Buyer intends to keep, all at their
     own expense.

     9.14. Arbitration.

          Any dispute, controversy or claim arising out of or relating to this
     Agreement (a "Dispute"), excluding any dispute or disagreement among the
     parties concerning the allocation of Purchase Price and Assumed
     Liabilities, which shall be resolved pursuant to Section 2.9, shall be
     decided 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
     select an arbitrator within fourteen 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 Section 9.14 shall be the
     exclusive means to resolve all Disputes.

     IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of the date first above written.

                                    PITTSTON COAL COMPANY

                                    By:    /s/ Michael D. Brown
                                           -------------------------------
                                    Name: Michael D. Brown
                                    Title:   Vice President - Development and
                                             Technical Resources

                                    ALPHA LAND AND RESERVES, LLC

                                    By:    /s/ Eddie Neely
                                           -------------------------------
                                    Name:  Eddie Neely
                                    Title: Vice President

                                       50

                                  SCHEDULE 1.4

                              ASSET SALE COMPANIES

Clinchfield Coal Company, a Virginia corporation

Pyxis Resources Company, a Virginia corporation

Paramont Coal Corporation, a Delaware corporation

Motivation Coal Company, a Virginia corporation

                                                                    Exhibit 2.10

                              PITTSTON COAL COMPANY
                              448 N. E. Main Street
                             Lebanon, Virginia 24266

                                December 13, 2002

Alpha Land and Reserves, LLC
c/o Alpha Natural Resources, LLC
406 West Main Street
Abingdon, Virginia 24212

Ladies and Gentlemen:

Reference is made to the Asset Purchase Agreement (the "Agreement"), dated as of
October 29, 2002, as amended to but not including the date hereof, by and
between Pittston Coal Company ("PCC") and Alpha Land and Reserves, LLC
("Buyer"). Capitalized terms used herein without definition shall have the
meanings ascribed to them in the Agreement.

     PCC and Buyer desire to amend certain provisions of the Agreement and, in
consideration of the mutual covenants, conditions and agreements set forth
herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:

     1.   The condition precedent to the obligations of PCC to consummate and
          cause the consummation of the transactions contemplated by the
          Agreement contained in Section 6.3(e) of the Agreement has been
          satisfied by the agreement of the parties to the form of Intercreditor
          Agreement attached to the Royalty Agreement as executed by the parties
          thereto on December 13, 2002.

     2.   The Schedules to the Agreement are hereby amended and restated in
          their entirety as attached hereto as Exhibit A.

     3.   Except as amended by this letter agreement, the Agreement shall
          continue in full force and effect.

     4.   This letter agreement may be executed in two or more counterparts,
          each of which shall be deemed an original, but all of which together
          shall constitute one and the same instrument. Any executed counterpart
          of this letter agreement or other signature hereto delivered by a
          party by facsimile shall be deemed for all purposes as being good and
          valid execution and delivery of this letter agreement by such party.

                                       1

Sincerely,

PITTSTON COAL COMPANY

By:      /s/ Michael D. Brown
         -----------------------------------
Name:    Michael D. Brown
Title:   Vice President - Development
         and Technical Resources

ACKNOWLEDGED AND AGREED:

ALPHA LAND AND RESERVES, LLC

By:      /s/ Eddie Neely
         -----------------------------------
Name:    Eddie Neely
Title:   Vice President

                                       2

                                                                    Exhibit 2.11

                     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 ALPHA LAND
AND RESERVES, 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

                                       1

this Agreement and the Acquisition Agreement;
     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.

                                       2

     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.

                                       3

     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.

                                       4

                                   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 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 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):

                                       5

               (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 the fifth anniversary of the
                    Closing Date for any breach of PCC's representations
                    specified in Section 3.6 of the Acquisition Agreement and
                    (ii) 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, and 3.9 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.

                                       6

          (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 thereof);

               (iii) the ownership of the Purchased Assets on or after the
                    Closing Date;

                                       7

               (iv) 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 of the
                    Acquisition Agreement, excluding the Retained Liabilities;

               (v)  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)(v) shall not
                    apply to any liability resulting from or arising out of any
                    Pittston Indemnified Person's conduct in bad faith or
                    willful misconduct; and

               (vi) 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 2.1(a)(i) and 2.1(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

                                       8

               (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 2.1(a)(i) and 2.1(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 2.2(a)(vi), 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)(iii)
               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.

                                       9

          (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.

          (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

                                       10

               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.

          (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.

     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

                                       11

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 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

                                       12

               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)
               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,

                                       13

               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.

                                       14

     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, the Promissory Note and the Royalty Agreement. 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

                                       15

               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)
               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,

                                       16

               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:

                                       17

                  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:

                  Alpha Land and Reserves, LLC
                  c/o Alpha Natural Resources, LLC
                  406 West Main Street
                  Abingdon, Virginia 24212
                  Attention: Vice President

                                       18

                  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

                                       19

                  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.

                                  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,

                                       20

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.

     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.

                                       21

     IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the
date first above written.

                                     ALPHA LAND AND RESERVES, LLC,
                                     a Delaware limited liability company

                                     By:/s/ Eddie Neely
                                     ------------------------------------------
                                     Name: Eddie Neely
                                     Title:   Vice President

                                     ALPHA NATURAL RESOURCES, LLC, a Delaware
                                     limited liability company

                                     By:/s/ Michael J. 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

                                       22

                                   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 Paramont
Coal Company Virginia, 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.

                                       23

                                   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, 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 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.

                                       24

                                                                    Exhibit 2.12

                            ASSET PURCHASE AGREEMENT

                                 BY AND BETWEEN

                              PITTSTON COAL COMPANY

                                       AND

                            ALPHA COAL SALES CO., LLC

                                October 29, 2002

                                TABLE OF CONTENTS

                                                                                                               Page
                                                                                                               ----
                                                                                                         
     ARTICLE I DEFINITIONS...................................................................................... 1
     1.1. Affiliate..............................................................................................1
     1.2. Agreement..............................................................................................2
     1.3. Asset Sale Companies...................................................................................2
     1.4. Assignment and Assumption Agreements...................................................................2
     1.5. Assumed Liabilities....................................................................................2
     1.6. Business...............................................................................................2
     1.7. Buyer..................................................................................................2
     1.8. Buyer Closing Certificate..............................................................................3
     1.9. Buyer's Parent.........................................................................................3
     1.10. Closing...............................................................................................3
     1.11. Closing  Date.........................................................................................3
     1.12. Coal  Act.............................................................................................3
     1.13. Code..................................................................................................3
     1.14. Contracts.............................................................................................3
     1.15. Dispute...............................................................................................4
     1.16. Governmental Authority................................................................................4
     1.17. Indemnification and Guaranty Agreement................................................................4
     1.18. Knowledge of PCC......................................................................................4
     1.19. Law...................................................................................................4
     1.20. Lien..................................................................................................4
     1.21. Liability.............................................................................................5
     1.22. Material Adverse Effect...............................................................................5
     1.23. Ordinary Course of Business...........................................................................5
     1.24. PCC...................................................................................................5
     1.25. PCC Closing Certificate...............................................................................5
     1.26. PCC Group.............................................................................................5
     1.27. PCC Parent............................................................................................5
     1.28. Permitted Liens.......................................................................................6
     1.29. Person................................................................................................6
     1.30. Pre-Closing Periods...................................................................................6
     1.31. Purchase Price........................................................................................6
     1.32. Purchased Assets......................................................................................6
     1.33. Related Persons.......................................................................................6
     1.34. Retained Liabilities..................................................................................6
     1.35. Tax...................................................................................................7
     1.36. Tax Return............................................................................................8

ARTICLE II  PURCHASE AND SALE OF ASSETS..........................................................................8

     2.1.   Transfer of Assets...................................................................................8
     2.2.   Assignment and Assumption Agreements and Other Documents.............................................8
     2.3.   Assumption of Liabilities............................................................................9

                                                                                                          
     2.4.   Proration of Liabilities; Payment Reimbursement......................................................9
     2.5.   Indemnification and Guaranty Agreement...............................................................9
     2.6.   Additional Documents.................................................................................9

ARTICLE III  REPRESENTATIONS AND WARRANTIES OF PCC..............................................................10

     3.1. Incorporation.........................................................................................10
     3.2. Execution, Delivery and Performance...................................................................10
     3.3. Authorization.........................................................................................11
     3.4. Contracts.............................................................................................12
     3.5. Litigation; Claims....................................................................................13
     3.6. No Broker.............................................................................................13
     3.7. Undisclosed Liabilities...............................................................................13
     3.8. Legal Compliance......................................................................................14
     3.9. Transactions with Affiliates..........................................................................14
     3.10. Disclosure...........................................................................................14

ARTICLE IV  REPRESENTATIONS AND WARRANTIES OF BUYER.............................................................14

     4.1.   Organization........................................................................................15
     4.2.   Execution, Delivery and Performance.................................................................15
     4.3.   Authorization.......................................................................................15
     4.4.   No Broker...........................................................................................16
     4.5.   Financing...........................................................................................16
     4.6.   Disclosure..........................................................................................16

ARTICLE V  CERTAIN COVENANTS....................................................................................16

     5.1.   Operation in Ordinary Course........................................................................16
     5.2.   Compliance with Law.................................................................................17
     5.3.   Cooperation.........................................................................................17
     5.4.   Notices and Consents................................................................................18
     5.5.   Publicity...........................................................................................18
     5.6.   Exclusivity.........................................................................................19
     5.7.   Access..............................................................................................19
     5.8.   Notice of Developments..............................................................................20
     5.9.   Further Assurances..................................................................................20

ARTICLE VI  CONDITIONS PRECEDENT TO CLOSING.....................................................................20

     6.1.   Conditions Precedent to Each Party's Obligations....................................................20
     6.2.   Conditions Precedent to Obligations of Buyer........................................................22
     6.3.   Conditions Precedent to Obligations of PCC..........................................................23

ARTICLE VII  TERMINATION........................................................................................25

     7.1. Termination...........................................................................................25
     7.2. Effect of Termination.................................................................................26

ARTICLE VIII  MISCELLANEOUS.....................................................................................27
                                                                                                         
     8.1. Entire Agreement......................................................................................27
     8.2. Amendment.............................................................................................27
     8.3. Extension; Waiver.....................................................................................27
     8.4. Expenses..............................................................................................28
     8.5. Bulk Sales Waiver.....................................................................................28
     8.6. Governing Law.........................................................................................28
     8.7. Assignment............................................................................................28
     8.8. Notices...............................................................................................28
     8.9. Counterparts; Headings................................................................................30
     8.10. Interpretation; Construction.........................................................................30
     8.11. Severability.........................................................................................30
     8.12. No Reliance..........................................................................................30
     8.13. Retention of and Access to Records...................................................................31
     8.14. Arbitration..........................................................................................31

                                    EXHIBITS

Exhibit A             Assignment and Assumption Agreements
Exhibit B             Buyer Closing Certificate
Exhibit C             Indemnification and Guaranty Agreement
Exhibit D             PCC Closing Certificate
Exhibit E             Opinion of Counsel to PCC
Exhibit F             Opinion of Counsel to Buyer

                                    SCHEDULES
                      
Schedule 1.3               Asset Sale Companies
Schedule 1.14              Contracts of Asset Sale Companies
Schedule 1.18              Knowledge of PCC
Schedule 1.28              Permitted Liens
Schedule 1.34(c)           Excluded Contracts
Schedule 3.1               Foreign States
Schedule 3.2               Conflicts
Schedule 3.4(b)            Contract Exceptions
Schedule 3.4(c)            Consents
Schedule 3.5               Litigation; Claims
Schedule 3.9               Transactions with Affiliates
Schedule 5.4(a)            PCC Consents
Schedule 5.4(b)            Buyer Consents
Schedule 6.1(e)(i)    PCC Material Consents
Schedule 6.1(e)(ii)   Buyer Material Consents

                            ASSET PURCHASE AGREEMENT

     THIS ASSET PURCHASE AGREEMENT is made as of the 29th day of October, 2002,
by and between PITTSTON COAL COMPANY, a Delaware corporation ("PCC"), and ALPHA
COAL SALES CO., LLC, a Delaware limited liability company ("Buyer").

                                    RECITALS

     WHEREAS, PCC owns, directly or indirectly, all of the outstanding capital
stock of the corporations listed on Schedule 1.3 (the "Asset Sale Companies");
     WHEREAS, PCC desires to cause to be sold and assigned, and Buyer desires to
purchase and assume, certain of the assets and certain of the Liabilities (as
hereinafter defined) of the Asset Sale Companies;
     WHEREAS, PCC desires to cause the Asset Sale Companies to retain certain
assets and certain Liabilities;
     NOW, THEREFORE, in consideration of the mutual covenants, conditions and
agreements set forth herein and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, PCC and Buyer agree
that:

                                   ARTICLE I
                                  DEFINITIONS

     When used in this Agreement, the following terms shall have the meanings
specified:

     1.1. Affiliate.

     "Affiliate" shall mean, with respect to a specified Person, another Person
that directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the Person specified. "Control"
shall mean the possession, directly or indirectly, of the power to direct or
cause the direction of the management or policies of a Person, whether through
the ownership of voting securities, by contract or otherwise. For purposes of
this Agreement, none of Dominion Terminal Associates or any of its partners,
other than Pittston Coal Terminal Corporation, shall be deemed an Affiliate of
PCC or any of its Affiliates.

                                       1

     1.2. Agreement.

     "Agreement" shall mean this Asset Purchase Agreement, together with the
Exhibits and Schedules attached hereto, which are incorporated into this Asset
Purchase Agreement by this reference, as the same may be amended from time to
time in accordance with the terms hereof.

     1.3. Asset Sale Companies.

     "Asset Sale Companies" shall have the meaning given to it in the Recitals
to this Agreement. The term "Asset Sale Company" shall mean one of the Asset
Sale Companies.

     1.4. Assignment and Assumption Agreements.

     "Assignment and Assumption Agreements" shall mean the assignment and
assumption agreements substantially in the form of Exhibit A attached hereto.

     1.5. Assumed Liabilities.

     "Assumed Liabilities" shall mean the performance of any and all obligations
required to be performed under the Contracts by Buyer from and after the Closing
other than any Retained Liabilities.

     1.6. Business.

     "Business" shall mean the coal sale business conducted by the Asset Sale
Companies using the Purchased Assets.

     1.7. Buyer.

     "Buyer" shall have the meaning given to it in the preamble of this
Agreement.

                                       2

     1.8. Buyer Closing Certificate.

     "Buyer Closing Certificate" shall mean the certificate of Buyer
substantially in the form of Exhibit B attached hereto.

     1.9. Buyer's Parent.

     "Buyer's Parent" shall mean Alpha Natural Resources, LLC, a Delaware
limited liability company.

     1.10. Closing.

     "Closing" shall mean the closing of the transactions contemplated by this
Agreement beginning at 10:00 a.m., local time, on the Closing Date, at the
offices of Hunton & Williams, Riverfront Plaza, East Tower, 951 East Byrd
Street, Richmond, Virginia 23219.

     1.11. Closing Date.

     "Closing Date" shall mean November 30, 2002 or such other date as the
parties may mutually agree in writing.

     1.12. Coal Act.

     "Coal Act" shall mean the Coal Industry Retiree Health Benefit Act of 1992
as amended through the Closing Date (codified at Subtitle J of the Code).

     1.13. Code.

     "Code" shall mean the Internal Revenue Code of 1986, as amended, and, where
appropriate, any predecessor or successor provisions of Law, and all regulations
thereunder.

     1.14. Contracts.

     "Contracts" shall mean the contracts, agreements, relationships and
commitments, written or oral, of the Asset Sale Companies listed on Schedule
1.14.

                                       3

     1.15. Dispute.

     "Dispute" shall have the meaning set forth in Section 8.14 hereof.

     1.16. Governmental Authority.

     "Governmental Authority" shall mean any governmental, judicial,
legislative, executive, administrative or regulatory authority of the United
States, or of any foreign, state or local government or any subdivision, agency,
commission, office, authority or bureau thereof or any quasi-governmental entity
or authority of any nature.

     1.17. Indemnification and Guaranty Agreement.

     "Indemnification and Guaranty Agreement" shall mean the agreement by and
among PCC Parent, PCC, Buyer and Buyer's Parent substantially in the form of
Exhibit C attached hereto.

     1.18. Knowledge of PCC.

     "Knowledge of PCC" shall mean, for the individuals listed on Schedule 1.18,
any such individual's actual knowledge and what any such individual should have
known after reasonable inquiry within the scope of that individual's job
responsibilities.

     1.19. Law.

     "Law" and "Laws" shall mean any applicable United States or foreign,
federal, state, local or other law or governmental requirement of any kind, and
the rules, regulations and orders promulgated thereunder.

     1.20. Lien.

     "Lien" shall mean any lien, encumbrance, mortgage, charge, claim,
restriction, pledge, security interest or imposition of any kind.

                                       4

     1.21. Liability.

     "Liability" shall mean any liability or obligation (whether known or
unknown, whether asserted or unasserted, whether absolute or contingent, whether
liquidated or unliquidated and whether due or to become due), including any
liability for Taxes. Liabilities shall mean one or more items of Liability.

     1.22. Material Adverse Effect.

     "Material Adverse Effect" shall mean any event, change or occurrence that
individually, or together with any other event, change or occurrence, has a
material adverse impact on the Business, taken as a whole, without regard to the
duration of such material adverse impact.

     1.23. Ordinary Course of Business.

     "Ordinary Course of Business" means the ordinary course of business
consistent with past custom and practice (including with respect to quantity and
frequency). 1.24. PCC.

     "PCC" shall have the meaning given to it in the preamble to this Agreement.

     1.25. PCC Closing Certificate.

     "PCC Closing Certificate" shall mean the certificate of PCC substantially
in the form of Exhibit D attached hereto.

     1.26. PCC Group.

     "PCC Group" shall have the meaning given to it in Section 1.34.

     1.27. PCC Parent.

     "PCC Parent" shall mean The Pittston Company, a Virginia corporation.

                                       5

     1.28. Permitted Liens.

     "Permitted Liens" shall mean those Liens affecting the Purchased Assets
that are listed on Schedule 1.28.

     1.29. Person.

     "Person" shall mean any individual, corporation, general or limited
partnership, limited liability company, joint venture, estate, trust,
association, organization, labor union or other entity or Governmental
Authority.

     1.30. Pre-Closing Periods.

     "Pre-Closing Periods" shall mean any taxable period ending on or before the
Closing Date.

     1.31. Purchase Price.

     "Purchase Price" shall mean $2,000,000.

     1.32. Purchased Assets.

     "Purchased Assets" shall mean the rights of the Asset Sale Companies with
respect to the Contracts, other than the rights to payment for any coal that has
been delivered or shipped prior to Closing Date to any customer, whether or not
invoiced.

     1.33. Related Persons.

     "Related Persons" shall mean related persons as that term is defined in
Section 9701(c)(2) of the Coal Act, except that it shall not include successors
in interest.

     1.34. Retained Liabilities.

     "Retained Liabilities" shall mean (a) all Liability of each Asset Sale
Company for any coal that has been shipped or delivered prior to Closing Date to
any customer, whether or not invoiced, (b) (1) all Liabilities, if any, of the
Asset Sale Companies and its Related Persons (collectively, the "PCC Group")

                                       6

under the Coal Act, and (2) all Liabilities, if any, of the PCC Group under any
post-Closing amendments to the Coal Act for (i) beneficiaries eligible under the
Coal Act who are assigned to a member of the PCC Group or for whom a member of
the PCC Group is required to provide or pay for medical benefits pursuant to
Sections 9711 or 9712 of the Coal Act or (ii) death benefit premiums or
unassigned beneficiary premiums (as those terms are used in Sections 9704(c) and
9704(d) of the Coal Act) for beneficiaries eligible under the Coal Act, that are
assessed against any member of the PCC Group; provided, for the avoidance of
doubt, that the Liabilities retained pursuant to (b)(1) and (b)(2) above shall
not be affected by Buyer or any of its Affiliates being identified under the
Coal Act or any post-Closing amendments thereto as a successor, successor in
interest or "Related person" under the Coal Act or any post-Closing amendments
thereto to any member of the PCC Group solely as a result of Buyer's purchase of
the Purchased Assets and (c) all Liabilities under the contracts, agreements,
personal and real property leases, relationships and commitments of the Asset
Sale Companies listed on Schedule 1.34(c).

     1.35. Tax.

     "Tax" or "Taxes" mean any federal, state, local, or foreign income, gross
receipts, license, payroll, employment, excise, severance, stamp, occupation,
premium, windfall profits, environmental (including taxes under Code ss.59A),
custom duties, capital stock, franchise, profits, withholding, social security
(or similar), unemployment, disability, real property, personal property, sales,
use, transfer, registration, value added, alternative or add-on minimum,
estimated, reclamation fees or other tax of any kind whatsoever, including any
interest, penalty, or addition thereto, whether disputed or not, but shall not
include, for purposes of this Agreement only, Liabilities under the Coal Act, of
whatever nature and regardless of how denominated.

                                       7

     1.36. Tax Return.

     "Tax Return" shall mean any original or amended report, return,
declaration, claim for refund, statement, document, schedule, attachment or
other information supplied or required to be supplied to a Governmental
Authority with respect to Taxes, including any return of an affiliated, combined
or unitary group.

                                   ARTICLE II
                           PURCHASE AND SALE OF ASSETS

     2.1. Transfer of Assets.

     On the Closing Date, PCC (on behalf of the Asset Sale Companies) shall
cause to be sold, conveyed, transferred, assigned, and delivered to Buyer, and
Buyer shall acquire, the Purchased Assets. At the Closing, subject to the terms
and conditions of this Agreement, PCC agrees to: (i) cause all rights in the
Purchased Assets to be transferred and delivered to Buyer; and (ii) perform its
obligations under this Agreement to be performed at or before Closing. In full
payment for the Purchased Assets, Buyer shall: (i) assume the Assumed
Liabilities; (ii) pay to PCC (which shall receive such amounts on behalf of the
Asset Sale Companies) the Purchase Price by wire transfer of cash or other
immediately available funds; and (iii) perform its obligations under this
Agreement to be performed at or before Closing. Buyer shall not assume or have
any responsibility with respect to any Liability of PCC Parent, PCC or the Asset
Sale Companies that is not an Assumed Liability.

     2.2. Assignment and Assumption Agreements and Other Documents.

     At the Closing, PCC shall cause each of the Asset Sale Companies to: (i)
execute and deliver to Buyer the Assignment and Assumption Agreements and such
other documents as may be necessary to convey to Buyer the Purchased Assets; and
(ii) perform its obligations under the Agreement to be performed at or before
the Closing.

                                       8

     2.3. Assumption of Liabilities.

     At the Closing, Buyer shall execute and deliver to PCC the Assignment and
Assumption Agreements and such other documents and instruments as may be
necessary for Buyer to assume all of the Assumed Liabilities. Buyer shall not
assume or have any responsibility, however, with respect to any Liability of PCC
Parent, PCC or the Asset Sale Companies that is not an Assumed Liability.

     2.4. Proration of Liabilities; Payment Reimbursement.

     PCC and Buyer shall cooperate with each other to provide for payments due
with respect to the Assumed Liabilities. If, following the Closing, Buyer or any
of its post-Closing Affiliates receives any payment in any form with respect to
any Asset Sale Company (other than the Purchased Assets) that should have been
paid to PCC or its Affiliates, Buyer shall forward, or shall cause such
post-Closing Affiliate to forward, such payment to PCC within five business days
of receipt. If, following the Closing, PCC or any of its post-Closing Affiliates
receives any payment in any form with respect to the Purchased Assets that
should have been paid to Buyer or its Affiliates, PCC shall forward, or shall
cause such post-Closing Affiliate to forward, such payment to Buyer within five
business days of receipt.

     2.5. Indemnification and Guaranty Agreement.

     At the Closing, PCC, PCC Parent, Buyer's Parent and Buyer shall execute and
deliver the Indemnification and Guaranty Agreement.

     2.6. Additional Documents.

     At the Closing, PCC and Buyer shall, and PCC shall cause the Asset Sale
Companies to, execute and deliver all such other documents or instruments
necessary or appropriate to effect the transactions contemplated by this
Agreement, including the documents provided in this Article II.

                                       9

                                  ARTICLE III
                      REPRESENTATIONS AND WARRANTIES OF PCC

     PCC hereby represents and warrants to Buyer that the statements contained
in this Article III are correct and complete, except as set forth in the
Schedules delivered by PCC to Buyer in connection with this Agreement. The
Schedules are arranged in paragraphs corresponding to the lettered and numbered
paragraphs contained in this Article III.

     3.1. Incorporation.

     PCC and each of the Asset Sale Companies are corporations duly organized,
validly existing and in good standing under the Laws of the respective state or
commonwealth of each such company's incorporation. PCC and each of the Asset
Sale Companies that is not a corporation incorporated under the Laws of Virginia
are duly qualified or licensed to transact business as a foreign corporation in
Virginia and are in good standing under the Laws of Virginia. Set forth on
Schedule 3.1 is the name of each state or other jurisdiction in which each such
company has either paid taxes or had an office in the three years prior to the
date of this Agreement.

     3.2. Execution, Delivery and Performance.

     The execution, delivery and performance by PCC of this Agreement and by PCC
and the applicable Asset Sale Company of each other agreement or instrument to
which it is a party executed in connection herewith or delivered pursuant hereto
and the consummation of the transactions contemplated herein and therein will
not, with or without the giving of notice or the passage of time, or both: (i)
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

                                       10

the creation of any Lien (other than Permitted Liens) under or pursuant to, any
provision of PCC's or any Asset Sale Company's Articles of Incorporation or
Bylaws or of any material franchise, mortgage, deed of trust, Lien, lease,
license, instrument, agreement, consent, approval, waiver or understanding to
which PCC or any Asset Sale Company is a party or by which any Asset Sale
Company is bound, or any Law or any order, judgment, writ, injunction or decree
to which PCC or any Asset Sale Company is a party or by which PCC, any Asset
Sale Company or the Purchased Assets may be bound or affected; (ii) 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 issued by a Governmental Authority that is held by
PCC or the Asset Sale Companies or that otherwise relates to the Purchased
Assets; or (iii) 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 PCC or any Asset Sale Company is
subject.

     3.3. Authorization.

     PCC has full power and authority to enter into and deliver this Agreement
and to perform its obligations hereunder and each of PCC and the Asset Sale
Companies has full power and authority to enter into and deliver each other
agreement or instrument to which it is a party executed in connection herewith
and delivered pursuant hereto and to perform its obligations thereunder. PCC's
execution, delivery and performance of this Agreement and the execution,
delivery and performance of all other agreements and instruments by PCC and each
of the Asset Sale Companies in connection herewith and delivered pursuant hereto
and the transactions contemplated hereby have been duly authorized by all
requisite corporate action on the part of PCC and each of the Asset Sale

                                       11

Companies. This Agreement and all other agreements or instruments executed by
PCC or any of the Asset Sale Companies in connection herewith and delivered by
PCC or any of the Asset Sale Companies pursuant hereto have been duly executed
and delivered by PCC or such Asset Sale Companies and this Agreement and all
other agreements and instruments executed by PCC or any of the Asset Sale
Companies in connection herewith and delivered by PCC or any of the Asset Sale
Companies pursuant hereto constitute the legal, valid and binding obligation of
PCC or such Asset Sale Company, as the case may be, enforceable in accordance
with their respective terms (subject to any applicable bankruptcy, insolvency,
reorganization, moratorium or other similar Laws affecting generally the
enforcement of creditors' rights).

     3.4. Contracts.

          (a)  PCC has made available to Buyer copies of all of the written
               Contracts, or a written summary setting forth the terms and
               conditions where no copies exist, including all amendments,
               modifications, waivers and elections applicable thereto.

          (b)  As to the Asset Sale Companies party thereto: (i) the Contracts
               are valid and binding, enforceable in accordance with their
               respective terms (subject to any applicable bankruptcy,
               insolvency, reorganization, moratorium or other similar Laws
               affecting generally the enforcement of creditors' rights), and
               are in full force and effect; (ii) the consummation of the
               transactions contemplated herein will not, with or without the
               giving of notice or the passage of time, or both, 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
               the Contracts; (iii) no Asset Sale Company, nor to the Knowledge
               of PCC, any other party is in material breach or default, and no
               event has occurred that, with notice or lapse of time, would
               constitute a breach or default, or permit termination,
               modification or acceleration, under the Contracts; and (iv) no
               Asset Sale Company, nor to the Knowledge of PCC, any other party
               has repudiated any provision of the Contracts.

                                       12

          (c)  Schedule 3.4(c) sets forth the consents and approvals of third
               parties and Governmental Authorities required to be obtained as a
               result of the transactions contemplated by this Agreement.

     3.5. Litigation; Claims.

     Schedule 3.5 lists all claims, legal actions, suits, litigation,
arbitrations, disputes, investigations, proceedings by or before any
Governmental Authority involving more than $100,000 and all orders, decrees or
judgments, now pending or in effect, or, to the Knowledge of PCC, threatened or
contemplated, against or affecting the Asset Sale Companies, the Purchased
Assets, or the consummation of the transactions contemplated by this Agreement,
except to the extent involving Taxes for Pre-Closing Periods.

     3.6. No Broker.

     None of the Asset Sale Companies, PCC or the PCC Parent has had any
dealings, negotiations or communications with or retained any broker or other
intermediary in connection with the transactions contemplated by this Agreement
and none of the foregoing is committed to any Liability for any brokers' or
finders' fees or any similar fees in connection with the transactions
contemplated hereby, other than Rothschild Inc., who shall be compensated solely
by PCC or an Affiliate of PCC.

     3.7. Undisclosed Liabilities.

     As it may affect the Purchased Assets, none of the Asset Sale Companies has
any material Liability (and there is no basis for any present or future action,

                                       13

suit, proceeding, hearing, investigation, charge, complaint, claim, or demand
against any of them giving rise to any Liability), except for the Liabilities
represented by the Contracts.

     3.8. Legal Compliance.

     As it may affect the Purchased Assets, each of the Asset Sale Companies and
their respective predecessors and Affiliates has complied in all material
respects with all Laws (including rules, regulations, codes, plans, injunctions,
judgments, orders, decrees, rulings and charges thereunder) of federal, state,
local and foreign governments (and all agencies thereof) and no material action,
suit, proceeding, hearing, investigation, charge, complaint, claim, demand or
notice has been filed or commenced against any of them alleging any failure so
to comply.

     3.9. Transactions with Affiliates.

     The Contracts do not include any Liability between any Asset Sale Company
and any Affiliate of such Asset Sale Company.

     3.10. Disclosure.

     The representations and warranties contained in this Article III do not
contain any untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements and information contained in this
Article III not misleading.

                                   ARTICLE IV
                    REPRESENTATIONS AND WARRANTIES OF BUYER

     Buyer hereby represents and warrants to PCC that:

                                       14

     4.1. Organization.

     Buyer is a duly formed limited liability company, validly existing and in
good standing under the Laws of the State of Delaware.

     4.2. Execution, Delivery and Performance.

     The execution, delivery and performance of this Agreement and each other
agreement or instrument executed in connection herewith or delivered pursuant
hereto and the consummation of the transactions contemplated herein and therein
will not, with or without the giving of notice or the passage of time, or both,
(i) conflict with, or result in a violation or breach of, or a default, right to
accelerate or loss of rights under, or result in the creation of any Lien, under
or pursuant to, any provision of Buyer's organizational documents or of any
franchise, mortgage, deed of trust, lease, license, instrument, agreement,
consent, approval, waiver or understanding, any Law, or any finding, order,
judgment, writ, injunction or decree to which Buyer is a party or by which Buyer
or its respective assets may be bound or affected; or (ii) require the approval,
consent or authorization of, or prior notice to, filing with or registration
with, any Governmental Authority, or any other Person or entity.

     4.3. Authorization.

     Buyer has full power and authority to enter into and deliver this
Agreement, and each other agreement or instrument (to which it is a party)
executed in connection herewith or delivered pursuant hereto and to perform its
obligations hereunder and thereunder. Buyer's execution, delivery and
performance of this Agreement and all other agreements and instruments executed
in connection herewith or delivered pursuant hereto and the transactions
contemplated hereby have been duly authorized by all requisite action. This
Agreement and all other agreements or instruments executed by Buyer in
connection herewith or delivered by Buyer pursuant hereto have been duly

                                       15

executed and delivered by Buyer and this Agreement and all other agreements and
instruments executed by Buyer in connection herewith or delivered by Buyer
pursuant hereto constitute Buyer's legal, valid and binding obligation,
enforceable in accordance with their respective terms (subject to any applicable
bankruptcy, insolvency, reorganization, moratorium or other similar Laws
affecting generally the enforcement of creditors' rights).

     4.4. No Broker.

     Buyer has had no dealings, negotiations or communications with any broker
or other intermediary in connection with the transactions contemplated by this
Agreement nor is it committed to any Liability for any brokers' or finders' fees
or any similar fees in connection with the transactions contemplated hereby.

     4.5. Financing.

     Buyer will have available to it, at the Closing, financial resources
sufficient to consummate the transactions contemplated by this Agreement.

     4.6. Disclosure.

     The representations and warranties contained in this Article IV do not
contain any untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements and information contained in this
Article IV not misleading.

                                   ARTICLE V
                                CERTAIN COVENANTS

     5.1. Operation in Ordinary Course.

     Except as provided in this Agreement, between the date of this Agreement
and the Closing, PCC shall cause each of the Asset Sale Companies, in relation
to the Purchased Assets, to: (i) carry on its business in the Ordinary Course of
Business; (ii) use commercially reasonable efforts to preserve intact its

                                       16

current business organization and properties until the Closing Date, and
maintain the relations and good will with its suppliers, customers, landlords,
creditors, agents, and others having business relationships with such Asset Sale
Company; (iii) not enter into any contract modification or other obligation
binding upon the Purchased Assets or an expenditure, purchase, sale, cost or
commitment in excess of $100,000, except such coal sales agreements pursuant to
which all obligations will be satisfied prior to Closing; and (iv) report
regularly to Buyer concerning the status of the business and finances of such
Asset Sale Company.

     5.2. Compliance with Law.

     Between the date of this Agreement and the Closing, each of the Asset Sale
Companies shall comply in all material respects with all Laws and with all
orders of any Governmental Authority.

     5.3. Cooperation.

     Subject to the terms and conditions herein provided, each of PCC and Buyer
agrees to use its commercially reasonable efforts to take, or cause to be taken,
all action, and to do, or cause to be done, all things necessary, proper and
advisable under Law, to consummate and make effective the transactions
contemplated by this Agreement. In case at any time after the Closing Date any
further action is necessary or desirable to carry out the purposes of this
Agreement, PCC and Buyer will, and PCC will cause the Asset Sale Companies to,
execute any additional instruments reasonably necessary to consummate the
transactions contemplated hereby.

                                       17

     5.4. Notices and Consents.

     PCC and Buyer each will use their commercially reasonable efforts to obtain
consents of all Governmental Authorities and other third parties necessary to
the consummation of the transactions contemplated by this Agreement. PCC shall
have responsibility for providing any notices to third parties that may be
required by the transactions contemplated by this Agreement and for obtaining,
or causing to be obtained, at its sole cost and expense, the consents listed on
Schedule 5.4(a) and Buyer shall have responsibility for obtaining, at its sole
cost and expense, all consents listed on Schedule 5.4(b), with the other party
in each case using its commercially reasonable efforts to assist the responsible
party in obtaining such consents.

     5.5. Publicity.

     All general notices, releases, statements and communications to any
employees, suppliers, distributors and customers of the Asset Sale Companies, to
the general public and to the press relating to the transactions contemplated by
this Agreement shall be made only at such times and in such manner as may be
mutually agreed upon by PCC and Buyer; provided, however, that either party
hereto (or, in the case of PCC, the PCC Parent) shall be entitled to make a
public announcement of the foregoing if: (a) in the opinion of its legal
counsel, such announcement is required to comply with Law or any listing
agreement with any national securities exchange or inter-dealer quotation
system; and (b) such disclosing party gives a reasonable period of notice and
opportunity to comment to the other party hereto of its intention to make such
public announcement; provided, that, failure to comment within 24 hours of
receipt of such notice shall be deemed a waiver of the opportunity to comment;
and provided, further, that nothing in this Section 5.5 shall operate to
prohibit any Asset Sale Company or Buyer from communicating, after the Closing

                                       18

Date, with their respective suppliers, distributors, customers and Governmental
Authorities the fact that the transaction has occurred or to employees regarding
their employment or the terms and conditions thereof, the operation of the
Purchased Assets or matters necessarily related thereto.

     5.6. Exclusivity.

     PCC will not (nor will it cause or permit any of the Asset Sale Companies
to) (i) solicit, initiate or encourage the submission of any proposal or offer
from any Person relating directly or indirectly to the acquisition of the
Purchased Assets, or any portion thereof, or (ii) participate in any discussions
or negotiations regarding, furnish any information with respect to, assist or
participate in, or facilitate in any other manner, any effort or attempt by any
Person to do or seek any of the foregoing. PCC will notify Buyer immediately if
any Person makes any proposal, offer, inquiry or contact with respect to any of
the foregoing.

     5.7. Access.

     At or prior to the Closing Date, PCC will permit (and will cause each of
the Asset Sale Companies to permit) representatives of Buyer to have full access
at all reasonable times, and in a manner so as not to interfere with the normal
business operations of the Asset Sale Companies, to all premises, properties,
personnel, books, records (including Tax records), contracts and documents of or
pertaining to each of the Asset Sale Companies as related to the Purchased
Assets. Copies of and access to accounting records, ledgers and other pertinent
documents or work papers related to the Purchased Assets will be made available
to Buyer at all reasonable times, and in a manner so as not to interfere with
the normal business operations of the Asset Sale Companies, upon request.

                                       19

     5.8. Notice of Developments.

     Each party will give prompt written notice to the other party of any
material adverse development causing a breach of any of its own representations
and warranties in Article III and Article IV above. No disclosure by any party
pursuant to this Section 5.8, however, shall be deemed to amend or supplement
the Schedules to such representations and warranties or to prevent or cure any
misrepresentation, breach of warranty or breach of covenant.

     5.9. Further Assurances.

     The parties shall cooperate in a commercially reasonable manner with each
other and with their respective representatives in connection with any steps
required to be taken as part of their respective obligations under this
Agreement, and shall (a) furnish upon request to each other such further
information; (b) execute and deliver to each other such other documents; and (c)
do such other acts and things, all as the other party may reasonably request for
the purpose of carrying out the intent of this Agreement and the transactions
contemplated.

                                   ARTICLE VI
                         CONDITIONS PRECEDENT TO CLOSING

     6.1. Conditions Precedent to Each Party's Obligations.

     The respective obligations of each party to consummate the transactions
contemplated by this Agreement are subject to the satisfaction at or prior to
the Closing Date of the following conditions precedent:

          (a)  no action, suit, proceeding, order, decree or injunction shall
               have been commenced, threatened or entered by or before any
               Governmental Authority that remains in force and that (i)
               prohibits, seeks to prohibit, or imposes or seeks substantial

                                       20

               damages in connection with, the consummation of the transactions
               contemplated by this Agreement, (ii) seeks or imposes relief that
               causes or would cause any of the transactions contemplated by
               this Agreement to be rescinded following consummation, or (iii)
               affects adversely the right of Buyer to own the Purchased Assets
               or to operate the Business on or after the Closing Date;

          (b)  PCC Parent, PCC, Buyer and Buyer's Parent shall have executed and
               delivered to each other party thereto the Indemnification and
               Guaranty Agreement and any other documentation required by such
               agreement, in form and substance as set forth in Exhibit C
               attached hereto and the same shall be in full force and effect;

          (c)  all other transactions pursuant to which Buyer or any of its
               Affiliates acquire assets related to the Business shall have been
               consummated prior to or simultaneously with the transactions
               contemplated by this Agreement;

          (d)  PCC and Buyer shall have executed and delivered to each other all
               such other documents or instruments necessary or appropriate to
               effect the transactions contemplated by this Agreement; and

          (e)  PCC shall have obtained, or caused to have been obtained, the
               consents listed in Schedule 6.1(e)(i) and PCC shall have provided
               such payments as may be reasonably required to obtain all such
               consents. Buyer shall have obtained, or caused to have been
               obtained, the consents listed in Schedule 6.1(e)(ii) and Buyer
               shall have provided such payments, guarantees and/or assurances
               as may be reasonably required to obtain all such consents.

                                       21

     6.2. Conditions Precedent to Obligations of Buyer.

     The obligations of Buyer to consummate the transactions contemplated by
this Agreement are subject to the satisfaction or waiver at or prior to the
Closing Date of the following conditions precedent:

          (a)  all of the representations and warranties of PCC set forth in
               this Agreement or in any Exhibit, Schedule or document delivered
               pursuant hereto, without regard to any qualification or
               limitation with respect to materiality (whether by reference to
               "Material Adverse Effect" or otherwise), shall be true and
               correct in all respects as of the date hereof and at and as of
               the Closing Date with the same effect as though such
               representations and warranties were made at and as of the Closing
               unless the aggregate failure of such representations or
               warranties to be true and correct does not have a Material
               Adverse Effect; provided that if a representation or warranty is
               expressly made only as of a specific date, it need only be true
               and correct in all respects as of such date, and Buyer shall have
               received the PCC Closing Certificate required by Section 6.2(g)
               below dated as of the Closing Date executed by PCC to such
               effect;

          (b)  all of the covenants and obligations that PCC is required to
               perform or to comply with pursuant to this Agreement at or prior
               to the Closing Date shall have been duly performed and complied
               with in all material respects;

          (c)  all proceedings and actions, corporate or other, to be taken by
               PCC or the Asset Sale Companies in connection with the
               transactions contemplated by this Agreement and all documents
               incident thereto, including all actions necessary to authorize
               the execution, delivery and performance of this Agreement and the
               transactions contemplated hereby, shall have been taken and shall
               be reasonably satisfactory in form and substance to Buyer and
               Buyer's counsel;

                                       22

          (d)  PCC shall have, and shall have caused the Asset Sale Companies to
               have, executed and delivered the Assignment and Assumption
               Agreements and such other documents as may be necessary to convey
               to Buyer the Purchased Assets;

          (e)  between the date of this Agreement and the Closing Date, there
               shall not have been a change, event or occurrence that,
               individually, or together with any other change, event or
               occurrence, has had or could reasonably be expected to have a
               Material Adverse Effect;

          (f)  Buyer shall have received an opinion of counsel to PCC addressed
               to Buyer substantially in the form of Exhibit E; and

          (g)  Buyer shall have received an executed copy of the PCC Closing
               Certificate.

     6.3. Conditions Precedent to Obligations of PCC.

     The obligation of PCC to consummate and cause the consummation of the
transactions contemplated by this Agreement is subject to the satisfaction or
waiver at or prior to the Closing Date of the following conditions precedent:

          (a)  all of the representations and warranties of Buyer set forth in
               this Agreement or in any Exhibit, Schedule or document delivered
               pursuant hereto, without regard to any qualification or
               limitation with respect to materiality, shall be true and correct
               in all respects as of the date hereof and at and as of the
               Closing Date with the same effect as though such representations
               and warranties were made at and as of the Closing unless the
               aggregate failure of such representations or warranties to be

                                       23

               true and correct does not have a material adverse effect on
               Buyer's ability to consummate the transactions contemplated by
               this Agreement or fulfill its post-Closing obligations hereunder;
               provided that if a representation or warranty is expressly made
               only as of a specific date, it need only be true and correct in
               all respects as of such date, and PCC shall have received Buyer's
               Closing Certificate required by Section 6.3(h) below dated as of
               the Closing Date executed by Buyer to such effect;

          (b)  all of the covenants and obligations that Buyer is required to
               perform or to comply with pursuant to this Agreement at or prior
               to the Closing Date shall have been duly performed and complied
               with in all material respects;

          (c)  all proceedings and actions, corporate or other, to be taken by
               Buyer in connection with the transactions contemplated by this
               Agreement, and all documents incident thereto, including all
               actions necessary to authorize the execution, delivery and
               performance of this Agreement and the transactions contemplated
               hereby, shall have been taken and shall be reasonably
               satisfactory in form and substance to PCC and its counsel;

          (d)  PCC shall have received, on behalf of the Asset Sale Companies,
               the Purchase Price by wire transfer of cash or other immediately
               available funds;

          (e)  Buyer shall have executed and delivered the Assignment and
               Assumption Agreements and such other documents as may be
               necessary for Buyer to assume all of the Assumed Liabilities;

          (f)  between the date of this Agreement and the Closing Date, there
               shall not have been a change, event or occurrence that,
               individually, or together with any other change, event or
               occurrence, has had or could reasonably be expected to have a
               Material Adverse Effect;

                                       24

          (g)  PCC shall have received an opinion of counsel to Buyer addressed
               to PCC substantially in the form of Exhibit F; and

          (h)  PCC shall have received an executed copy of Buyer's Closing
               Certificate.

                                   ARTICLE VII
                                   TERMINATION

     7.1. Termination.

     This Agreement may be terminated prior to the Closing Date only as follows:

          (a)  by mutual written consent of PCC and Buyer;

          (b)  by either PCC or Buyer, if the Closing Date shall not have
               occurred prior to the close of business on December 31, 2002 or
               such later date as the parties may agree in writing (provided,
               that the right to terminate this Agreement under this Section
               7.1(b) shall not be available to any party whose failure to
               fulfill any obligation under this Agreement has been the cause,
               in whole or in part, of, or has resulted in, the failure of the
               conditions in Article VI to be satisfied and the Closing Date to
               occur on or before such date);

          (c)  by PCC or Buyer if an action, suit, or proceeding, shall have
               been commenced or threatened by or before any Governmental
               Authority, or any order, decree or injunction shall have been
               entered therein, that (i) prohibits, seeks to prohibit, or
               imposes or seeks substantial damages in connection with, the
               consummation of the transactions contemplated by this Agreement,
               (ii) seeks or imposes relief that causes or would cause any of
               the transactions contemplated by this Agreement to be rescinded
               following consummation, or (iii) affects adversely the right of
               Buyer to own the Purchased Assets or to operate the Business;

                                       25

          (d)  by Buyer if (i) the representations of PCC contained in this
               Agreement are not true and correct in all material respects as if
               made at and as of that time, except for failures to be true and
               correct that are capable of being and are cured within fifteen
               (15) days after written notice from Buyer to PCC of such failure;
               or (ii) PCC has failed to comply materially with its respective
               obligations under this Agreement, except for failures to comply
               that are capable of being and are cured within fifteen (15) days
               after written notice from Buyer to PCC of such failure; or

          (e)  by PCC if (i) the representations of Buyer contained in this
               Agreement are not true and correct in all material respects as if
               made at and as of that time, except for failures to be true and
               correct that are capable of being and are cured within fifteen
               (15) days after written notice from PCC to Buyer of such failure;
               or (ii) Buyer has failed to comply materially with its
               obligations under this Agreement, except for failures to comply
               that are capable of being and are cured within fifteen (15) days
               after written notice from the PCC to Buyer of such failure.

     7.2. Effect of Termination.

     If this Agreement is terminated pursuant to Article VII hereof, all further
obligations of the parties under or pursuant to this Agreement shall terminate
without further Liability of either party to the other except: (a) as set forth
in Section 8.4; and (b) for breaches of representations, warranties, or
covenants or for fraud. PCC and Buyer hereby agree that the provisions of this
Section 7.2 and of Section 8.4 shall survive any termination of this Agreement
pursuant to the provisions of this Article VII.

                                       26

                                  ARTICLE VIII
                                  MISCELLANEOUS

     8.1. Entire Agreement.

     This Agreement, the documents referred to herein and to be delivered
pursuant hereto and any other agreement entered into contemporaneously with this
Agreement among PCC, PCC Parent, Buyer and Buyer's Parent or the Affiliates of
any of them constitute the entire agreement between the parties pertaining to
the subject matter hereof, and supersede all prior agreements, understandings,
negotiations and discussions of the parties, whether oral or written, and there
are no warranties, representations or other agreements between the parties in
connection with the subject matter hereof, except as specifically set forth
herein or therein. 8.2. Amendment.

     This Agreement may be amended by an instrument in writing and signed on
behalf of all of the parties hereto at any time.

     8.3. Extension; Waiver.

     At any time prior to the Closing Date, the parties may (i) extend the time
for the performance of any of the obligations or other acts of the other parties
hereto, (ii) waive any inaccuracies in the representations and warranties
contained herein or in any document, certificate or writing delivered pursuant
hereto or (iii) waive compliance with any of the agreements or conditions
contained herein, other than the conditions contained in Section 6.1(a) hereof
as it relates to the entry of an order in any proceeding by or before a
Governmental Authority. Any agreement on the part of any party to any such
extension or waiver shall be valid only if set forth in an instrument in writing
and signed on behalf of such party.

                                       27

     8.4. Expenses.

     Whether or not the transactions contemplated by this Agreement are
consummated, each of the parties hereto shall pay the fees and expenses of their
respective counsel, investment bankers, financial advisors, accountants and
other experts and the other expenses incident to the negotiation and preparation
of this Agreement and consummation of the transactions contemplated hereby.

     8.5. Bulk Sales Waiver.

     Buyer hereby waives compliance with all applicable bulk sales Laws.

     8.6. Governing Law.

     This Agreement shall be construed and interpreted according to the Laws of
the Commonwealth of Virginia, without regard to the conflicts of Law rules
thereof.

     8.7. Assignment.

     This Agreement and each party's respective rights hereunder may not be
assigned at any time except as expressly set forth herein without the prior
written consent of the other party, provided that PCC may assign its rights
hereunder to any Affiliate of PCC after the Closing Date without the consent of
Buyer and Buyer may assign its rights hereunder to any Affiliate of Buyer prior
to, at or after the Closing Date without the consent of PCC and, further
provided, that nothing in this Agreement shall prevent a successor in interest
to either party from enforcing the provisions of this Agreement.

     8.8. 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

                                       28

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 party in the
manner provided by this Section 8.8: If to PCC: 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:                  Alpha Coal Sales Co., 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.

                                       29

     8.9. Counterparts; Headings.

     This Agreement may be executed in several counterparts, each of which shall
be deemed an original, but such counterparts shall together constitute but one
and the same Agreement. The Table of Contents and Article and Section headings
in this Agreement are inserted for convenience of reference only and shall not
constitute a part hereof.

     8.10. Interpretation; Construction.

          (a)  Unless the context requires otherwise, all words used in this
               Agreement in the singular number shall extend to and include the
               plural, all words in the plural number shall extend to and
               include the singular and all words in any gender shall extend to
               and include all genders.

          (b)  This Agreement has been fully negotiated by the parties hereto
               and shall not be construed by any Governmental Authority against
               either party as the drafting party.

     8.11. 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.

     8.12. No Reliance.

     No third party is entitled to rely on any of the representations,
warranties and agreements contained in this Agreement and PCC and Buyer assume
no Liability to any third party because of any reliance on the representations,
warranties and agreements of PCC and Buyer contained in this Agreement, other

                                       30

than Section 5.5 hereof, which are intended to be for the benefit of the Persons
expressly covered thereby and may be enforced by such Persons.

     8.13. Retention of and Access to Records.

     After the Closing Date, Buyer shall retain for a period consistent with
Buyer's record retention policies and practices those books and records relating
to the Asset Sale Companies delivered to Buyer. Buyer also shall provide to PCC
and its Affiliates reasonable access thereto, during normal business hours and
on at least three days' prior written notice, to enable them to prepare
financial statements or Tax Returns or deal with Tax audits or litigation. Buyer
shall deliver to PCC at least thirty days written notice prior to the
destruction or other disposal of any such books and records. PCC and its
Affiliates may elect to take delivery of any such books and records that Buyer
intends to destroy or otherwise dispose of and to copy any such books and
records that Buyer intends to keep, all at their own expense.

     8.14. Arbitration.

     Any dispute, controversy or claim arising out of or relating to this
Agreement (a "Dispute") shall be decided 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 select an arbitrator within fourteen 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 Section 8.14 shall be the exclusive means to resolve all
Disputes.

                                       31

     IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of the date first above written.

                                   PITTSTON COAL COMPANY

                                   By:    /s/ Michael D. Brown
                                      -------------------------------
                                   Name:  Michael D. Brown
                                   Title: Vice President - Development
                                          and Technical Resources

                                   ALPHA COAL SALES CO., LLC

                                   By:    /s/ Scott Kroh
                                      ---------------------------------------
                                   Name:  Scott Kroh
                                   Title: President

                                       32

                                  SCHEDULE 1.3

                              ASSET SALE COMPANIES

Clinchfield Coal Company, a Virginia corporation

Pittston Coal Sales Corp., a Virginia corporation

Motivation Coal Company, a Virginia corporation

                                       A-1

                              PITTSTON COAL COMPANY
                              448 N. E. Main Street
                             Lebanon, Virginia 24266

                                December 13, 2002

Alpha Coal Sales Co., LLC
c/o Alpha Natural Resources, LLC
406 West Main Street
Abingdon, Virginia 24212

Ladies and Gentlemen:

Reference is made to the Asset Purchase Agreement (the "Agreement"), dated as of
October 29, 2002, as amended to but not including the date hereof, by and
between Pittston Coal Company ("PCC") and Alpha Coal Sales Co., LLC ("Buyer").
Capitalized terms used herein without definition shall have the meanings
ascribed to them in the Agreement.

     PCC and Buyer desire to amend certain provisions of the Agreement and, in
consideration of the mutual covenants, conditions and agreements set forth
herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:

     1.   The Schedules to the Agreement are hereby amended and restated in
          their entirety as attached hereto as Exhibit A.

     2.   Except as amended by this letter agreement, the Agreement shall
          continue in full force and effect.

     3.   This letter agreement may be executed in two or more counterparts,
          each of which shall be deemed an original, but all of which together
          shall constitute one and the same instrument. Any executed counterpart
          of this letter agreement or other signature hereto delivered by a
          party by facsimile shall be deemed for all purposes as being good and
          valid execution and delivery of this letter agreement by such party.

Sincerely,

PITTSTON COAL COMPANY

By:      /s/ Michael D. Brown
         -----------------------------------
Name:    Michael D. Brown
Title:   Vice President - Development
         and Technical Resources

ACKNOWLEDGED AND AGREED:

ALPHA COAL SALES CO., LLC

By:      /s/ Michael J. Quillen
         -----------------------------------
Name: Michael J. Quillen
Title:   Attorney-in-fact

                     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 Parent") and ALPHA COAL SALES CO.,
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 Parent owns 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;

                                       1

     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.

     1.4. Buyer.

          "Buyer" shall have the meaning set forth in the preamble to this
     Agreement.

                                       2

     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 Parent.

          "Buyer's Parent" shall have the meaning set forth in the preamble to
     this Agreement.

     1.7. Buyer's Parent Guaranty.

          "Buyer's 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.

     1.11. Indemnifying Party.

          "Indemnifying Party" shall have the meaning set forth in Section
     2.3(b) hereof.

                                       3

     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.

                                       4

                                   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; and

               (iii) 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):

               (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;

                                       5

               (ii) unless the right to indemnity is asserted pursuant to
          Section 2.3 on or before the second anniversary of the Closing Date
          for any 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 and 3.6 of the Acquisition Agreement or
     (ii) pursuant to Section 2.1(a)(iii), shall not be subject to the
     provisions of paragraph (b) of this Section 2.1.

          (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).

                                       6

     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;

               (iii) the ownership of the Purchased Assets on or after the
          Closing Date; and

               (iv) 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):

                                       7

               (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 is sought 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
     (iv), 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)(iii)
     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).

                                       8

     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.

          (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.

                                       9

          (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.

          (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.

                                       10

     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 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.

                                       11

                                  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) 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.

                                       12

          (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.

                                       13

     3.2. Buyer's Parent Guaranty.

          (a) Buyer's Parent hereby irrevocably and unconditionally guarantees
     to PCC (the "Buyer's 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 and the
     Acquisition Agreement. Buyer's 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 Parent hereby expressly waives (i) notice of acceptance of
     Buyer's 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 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 Parent. Buyer's Parent acknowledges and agrees
     that its liability under Buyer's 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 Parent hereby waives any and all
     defenses to enforcement of Buyer's Parent Guaranty, now existing or
     hereafter arising, which may be available to guarantors, sureties and other
     secondary parties at law or in equity.

                                       14

          (c) Buyer's Parent represents and warrants to PCC that (i) Buyer's
     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 Parent Guaranty, (iii) Buyer's Parent Guaranty
     is being executed on Buyer's Parent's behalf by a duly authorized
     representative, (iv) Buyer's Parent Guaranty is the legally valid and
     binding obligation of Buyer's Parent enforceable in accordance with its
     terms, and (v) the execution and the delivery of Buyer's 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 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 Parent is a party or by which Buyer's Parent is bound, or any Law
     or any order, judgment, writ, injunction or decree to which Buyer's Parent
     is a party or by which Buyer's 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 Parent or that otherwise relates to Buyer's
     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
     Parent is subject.

                                       15

          (d) Buyer's 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 Parent's liability to the
     Pittston Indemnified Persons under Buyer's 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 Parent Guaranty shall be binding upon Buyer's 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
     Parent Guaranty, Buyer's Parent shall be deemed to include the surviving
     entity in any merger or consolidation involving Buyer's Parent, each of
     whom shall be bound by the provisions of the Buyer's 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.

                                       16

                                   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.

                  if to Buyer:

                  Alpha Coal Sales Co., LLC
                  c/o Alpha Natural Resources, LLC
                  406 West Main Street
                  Abingdon, Virginia 24212
                  Attention: Vice President

                                       17

                  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 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.

                                       18

                                   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 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.

                                       19

                                  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 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.

                                       20

     IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the
date first above written.

                           ALPHA COAL SALES CO., 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

                                   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 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
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.

                                   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, 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 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.

                            ASSET PURCHASE AGREEMENT

                                 BY AND BETWEEN

                              PITTSTON COAL COMPANY

                                       AND

                           ALPHA TERMINAL COMPANY, LLC

                                October 29, 2002

                                TABLE OF CONTENTS

                                                                                                               Page

                                       -i-

ARTICLE I   DEFINITIONS...........................................................................................1
     1.1.Affiliate................................................................................................1
     1.2.Agreement................................................................................................2
     1.3.Asset Sale Company.......................................................................................2
     1.4.Assigned Contracts.......................................................................................2
     1.5.Assignment and Assumption Agreements.....................................................................2
     1.6.Assignment and Assumption of Consortium Documents........................................................2
     1.7.Assignment and Assumption of Parent Company Agreement....................................................3
     1.8.Assumed Liabilities......................................................................................3
     1.9.Assumed Parent Company Liabilities.......................................................................3
     1.10.  Assumed Partner Liabilities...........................................................................3
     1.11.  Business..............................................................................................3
     1.12.  Buyer.................................................................................................3
     1.13.  Buyer Closing Certificate.............................................................................3
     1.14.  Buyer Designee........................................................................................3
     1.15.  Buyer's Parent........................................................................................4
     1.16.  Closing...............................................................................................4
     1.17.  Closing Date..........................................................................................4
     1.18.  Coal Act..............................................................................................4
     1.19.  Code..................................................................................................4
     1.20.  Consortium Agreement..................................................................................4
     1.21.  Consortium Documents..................................................................................5
     1.22.  Contaminated..........................................................................................5
     1.23.  CPA Arbitrator........................................................................................5
     1.24.  Dispute...............................................................................................5
     1.25.  DTA...................................................................................................5
     1.26.  DTA Activities........................................................................................6
     1.27.  DTA Environmental Liabilities.........................................................................6
     1.28.  DTA Partners..........................................................................................6
     1.29.  DTA Revenue Bonds.....................................................................................6
     1.30.  Environmental Laws....................................................................................6
     1.31.  Facilities............................................................................................7
     1.32.  Governmental Authority................................................................................7
     1.33.  Hazardous Substances..................................................................................7
     1.34.  Indemnification and Guaranty Agreement................................................................8
     1.35.  Knowledge of PCC......................................................................................8
     1.36.  Law...................................................................................................8
     1.37.  Lease Agreement.......................................................................................8
     1.38.  Liability.............................................................................................9
     1.39.  Lien..................................................................................................9
     1.40.  Loan Agreement........................................................................................9
     1.41.  Material Adverse Effect...............................................................................9
     1.42.  Operating Agreement...................................................................................9
     1.43.  Ordinary Course of Business..........................................................................10
     1.44.  Parent Company Agreement.............................................................................10
     1.45.  Partner Matter.......................................................................................10
     1.46.  PCC..................................................................................................10
     1.47.  PCC Closing Certificate..............................................................................10
     1.48.  PCC Group............................................................................................10
     1.49.  PCC Parent...........................................................................................10
     1.50.  Permits..............................................................................................11
     1.51.  Permitted Liens......................................................................................11
     1.52.  Person...............................................................................................11
     1.53.  Pre-Closing Period...................................................................................11
     1.54.  Purchased Assets.....................................................................................11
     1.55.  Related Persons......................................................................................11
     1.56.  Retained Contract Rights.............................................................................11
     1.57.  Retained Contract Liabilities........................................................................12
     1.58.  Retained Liabilities.................................................................................13
     1.59.  Tax or Taxes.........................................................................................13
     1.60.  Tax Return...........................................................................................14
     1.61.  Throughput Agreement.................................................................................14
     1.62.  Transportation Agreement.............................................................................14
     1.63.  Voting Agreement.....................................................................................15

                                       3

ARTICLE II  PURCHASE AND SALE OF ASSETS..........................................................................15

     2.1.Transfer of Assets......................................................................................15
     2.2.Assignment and Assumption Agreements and Other Documents................................................15
     2.3.Assumption of Liabilities...............................................................................16
     2.4.Proration of Liabilities................................................................................16
     2.5.Indemnification and Guaranty Agreement..................................................................16
     2.6.Additional Documents....................................................................................17
     2.7.Partner Status..........................................................................................17
     2.8.Allocation of Assumed Liabilities.......................................................................17

ARTICLE III REPRESENTATIONS AND WARRANTIES OF PCC................................................................19

     3.1.Incorporation...........................................................................................19
     3.2.Execution, Delivery and Performance.....................................................................19
     3.3.Authorization...........................................................................................20
     3.4.Purchased Assets........................................................................................21
     3.5.DTA Facilities..........................................................................................21
     3.6.DTA Permits.............................................................................................22
     3.7.Absence of Changes......................................................................................22
     3.8.Assigned Contracts......................................................................................24
     3.9.Litigation; Claims......................................................................................25
     3.10.  Legal Compliance.....................................................................................26
     3.11.  Environmental Compliance.............................................................................26
     3.12.  No Broker............................................................................................27
     3.13.  Powers of Attorney...................................................................................27
     3.14.  Transactions With Affiliates.........................................................................27
     3.15.  Absence of Certain Payments..........................................................................28
     3.16.  Disclosure...........................................................................................28

                                       4

ARTICLE IV  REPRESENTATIONS AND WARRANTIES OF BUYER..............................................................28

     4.1.Organization............................................................................................29
     4.2.Execution, Delivery and Performance.....................................................................29
     4.3.Authorization...........................................................................................29
     4.4.No Broker...............................................................................................30
     4.5.Reclamation and Environmental Compliance................................................................30
     4.6.Financing...............................................................................................30
     4.7.Disclosure..............................................................................................31

ARTICLE V   CERTAIN COVENANTS....................................................................................31

     5.1.Operation in Ordinary Course............................................................................31
     5.2.Compliance with Law.....................................................................................31
     5.3.Cooperation.............................................................................................32
     5.4.Notices and Consents....................................................................................32
     5.5.Publicity...............................................................................................33
     5.6.Exclusivity.............................................................................................33
     5.7.Access..................................................................................................34
     5.8.Notice of Developments..................................................................................34
     5.9.Further Assurances......................................................................................34
     5.10.  Voting Agreement.....................................................................................35
     5.11.  Subsequent Transfer of Purchased Assets..............................................................37

ARTICLE VI  CONDITIONS PRECEDENT TO CLOSING......................................................................38

     6.1.Conditions Precedent to Each Party's Obligations........................................................38
     6.2.Conditions Precedent to Obligations of Buyer............................................................39
     6.3.Conditions Precedent to Obligations of PCC..............................................................41

ARTICLE VII CERTAIN TAX MATTERS..................................................................................42

     7.1.Distributive Share of DTA for 2002......................................................................42
     7.2.Transfer Taxes..........................................................................................43
     7.3.Access for Tax Returns..................................................................................43

ARTICLE VIII          TERMINATION................................................................................43

     8.1.Termination.............................................................................................43
     8.2.Effect of Termination...................................................................................45

                                       5

ARTICLE IX  MISCELLANEOUS........................................................................................45

     9.1.Entire Agreement........................................................................................45
     9.2.Amendment...............................................................................................45
     9.3.Extension; Waiver.......................................................................................46
     9.4.Expenses................................................................................................46
     9.5.Bulk Sales Waiver.......................................................................................46
     9.6.Governing Law...........................................................................................46
     9.7.Assignment..............................................................................................46
     9.8.Notices.................................................................................................47
     9.9.Counterparts; Headings..................................................................................48
     9.10.  Interpretation; Construction.........................................................................49
     9.11.  Severability.........................................................................................49
     9.12.  No Reliance..........................................................................................49
     9.13.  Retention of and Access to Records...................................................................49
     9.14.  Arbitration..........................................................................................50

                                       6

                                    EXHIBITS

Exhibit A-1           Assignment and Assumption of Consortium Documents
Exhibit A-2           Assignment and Assumption of Parent Company Agreement
Exhibit B             Buyer Closing Certificate
Exhibit C             Indemnification and Guaranty Agreement
Exhibit D             PCC Closing Certificate
Exhibit E             Opinion of Counsel to PCC
Exhibit F             Opinion of Counsel to Buyer
Exhibit G             Voting Agreement

                                       7

                                    SCHEDULES

Schedule 1.4               Assigned Contracts
Schedule 1.9               Assumed Parent Company Liabilities
Schedule 1.10              Assumed Partner Liabilities
Schedule 1.35              Knowledge of PCC
Schedule 1.51              Permitted Liens
Schedule 3.1               Foreign States
Schedule 3.2               Conflicts
Schedule 3.4               Purchased Assets
Schedule 3.5               DTA Facilities
Schedule 3.7               Absence of Changes
Schedule 3.8(a)            Excluded Contracts
Schedule 3.8(c)            Consents
Schedule 3.9               Litigation; Claims
Schedule 3.11              Environmental Compliance
Schedule 3.13              Powers of Attorney
Schedule 3.14              Transactions with Affiliates
Schedule 5.4(a)            PCC Consents
Schedule 5.4(b)            Buyer Consents
Schedule 6.1(e)(i)    PCC Material Consents
Schedule 6.1(e)(ii)   Buyer Material Consents

                                       8

                            ASSET PURCHASE AGREEMENT

         THIS ASSET PURCHASE AGREEMENT is made as of the 29th day of October,
2002, by and between PITTSTON COAL COMPANY, a Delaware corporation ("PCC"), and
ALPHA TERMINAL Company, LLC, a Delaware limited liability company ("Buyer").

                                    RECITALS

         WHEREAS, PCC owns directly all of the outstanding capital stock of
Pittston Coal Terminal Corporation, a Virginia corporation (the "Asset Sale
Company");
         WHEREAS, PCC desires to cause to be sold and assigned, and Buyer
desires to purchase and assume, certain of the assets and certain of the
Liabilities (as hereinafter defined) of the Asset Sale Company;
         WHEREAS, PCC desires to cause the Asset Sale Company to retain certain
         assets and certain Liabilities; NOW, THEREFORE, in consideration of the
         mutual covenants, conditions and agreements set forth herein and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, PCC and Buyer agree that:

                                   ARTICLE I
                                   DEFINITIONS

         When used in this Agreement, the following terms shall have the
meanings specified:

     1.1. Affiliate.

     "Affiliate" shall mean, with respect to a specified Person, another Person
that directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the Person specified. "Control"
shall mean the possession, directly or indirectly, of the power to direct or
cause the direction of the management or policies of a Person, whether through
the ownership of voting securities, by contract or otherwise. For purposes of
this Agreement, none of Dominion Terminal Associates or any of its partners,
other than the Asset Sale Company, shall be deemed an Affiliate of PCC or any of
its Affiliates.

                                       9

     1.2. Agreement.

     "Agreement" shall mean this Asset Purchase Agreement, together with the
Exhibits and Schedules attached hereto, which are incorporated into this Asset
Purchase Agreement by this reference, as the same may be amended from time to
time in accordance with the terms hereof.

     1.3. Asset Sale Company.

     "Asset Sale Company" shall have the meaning given to it in the Recitals to
this Agreement.

     1.4. Assigned Contracts.

     "Assigned Contracts" shall mean the Consortium Documents and the other
written contracts, agreements, personal and real property leases, relationships
and commitments, of the Asset Sale Company listed on Schedule 1.4.

     1.5. Assignment and Assumption Agreements.

     "Assignment and Assumption Agreements" shall mean, collectively, the
Assignment and Assumption of Consortium Documents and the Assignment and
Assumption of Parent Company Agreement.

     1.6. Assignment and Assumption of Consortium Documents.

     "Assignment and Assumption of Consortium Documents" shall mean the
assignment and assumption agreement substantially in the form of Exhibit A-1
attached hereto.

                                       10

     1.7. Assignment and Assumption of Parent Company Agreement.

     "Assignment and Assumption of Parent Company Agreement" shall mean the
assignment and assumption agreement substantially in the form of Exhibit A-2
attached hereto.

     1.8. Assumed Liabilities.

     "Assumed Liabilities" shall mean all Assumed Partner Liabilities and all
Assumed Parent Company Liabilities.

     1.9. Assumed Parent Company Liabilities.

     "Assumed Parent Company Liabilities" shall mean all Liabilities of PCC
Parent listed on Schedule 1.9, and, in any event, excludes any Retained
Liabilities.

     1.10. Assumed Partner Liabilities.

     "Assumed Partner Liabilities" shall mean all Liabilities of the Asset Sale
Company listed on Schedule 1.10, and, in any event, excludes any Retained
Liabilities.

     1.11. Business.

     "Business" shall mean the ownership of the Purchased Assets.

     1.12. Buyer.

     "Buyer" shall have the meaning given to it in the preamble of this
Agreement.

     1.13. Buyer Closing Certificate.

     "Buyer Closing Certificate" shall mean the certificate of Buyer
substantially in the form of Exhibit B attached hereto.

     1.14. Buyer Designee.

     "Buyer Designee" shall have the meaning set forth in Section 5.10.

                                       11

     1.15. Buyer's Parent.

     "Buyer's Parent" shall mean Alpha Natural Resources, LLC, a Delaware
limited liability company.

     1.16. Closing.

     "Closing" shall mean the closing of the transactions contemplated by this
Agreement beginning at 10:00 a.m., local time, on the Closing Date, at the
offices of Hunton & Williams, Riverfront Plaza, East Tower, 951 East Byrd
Street, Richmond, Virginia 23219.

     1.17. Closing Date.

     "Closing Date" shall mean November 30, 2002 or such other date as the
parties may mutually agree in writing.

     1.18. Coal Act.

     "Coal Act" shall mean the Coal Industry Retiree Health Benefit Act of 1992
as amended through the Closing Date (codified at Subtitle J of the Code).

     1.19. Code.

     "Code" shall mean the Internal Revenue Code of 1986, as amended, and, where
appropriate, any predecessor or successor provisions of Law, and all regulations
thereunder.

     1.20. Consortium Agreement.

     "Consortium Agreement" shall mean the Second Amended and Restated
Consortium Agreement, dated as of July 1, 1987, initially by and among Ashland
Terminal, Inc., a Delaware corporation, Cavalier Coal Terminal Company, a
Delaware corporation, James River Coal Terminal Company, a Delaware corporation,
Peabody Terminals, Inc., a Delaware corporation, BHP-Utah Terminal Company, a
Delaware corporation, Westmoreland Terminal Company, a Delaware corporation, and
the Asset Sale Company, as amended by the First Amendment thereto dated as of
March 31, 1989, the Second Amendment thereto dated as of .September 30, 1989,
the Third Amendment thereto dated as of September 11, 1990, and the Fourth
Amendment thereto dated as of November 15, 1992, the Fifth Amendment thereto
dated as of December 31, 2001.

                                       12

     1.21. Consortium Documents.

     "Consortium Documents" shall mean, collectively, the Consortium Agreement,
the Operating Agreement, the Throughput Agreement, the Transportation Agreement
and the Parent Company Agreement.

     1.22. Contaminated.

     "Contaminated" shall mean the presence of one or more Hazardous Substances
in such quantity or concentration as to: (i) violate any Environmental Law; (ii)
require disclosure to any Governmental Authority; (iii) require remediation or
removal; (iv) interfere with or prevent the use of any of the Purchased Assets
or the Facilities as customarily intended; or (v) create any contribution
Liability to fund the clean up of the Facilities.

     1.23. CPA Arbitrator.

     "CPA Arbitrator" shall have the meaning set forth in Section 2.8 hereof.

     1.24. Dispute.

     "Dispute" shall have the meaning set forth in Section 9.14 hereof.

     1.25. DTA.

     "DTA" shall mean Dominion Terminal Associates, a Virginia general
partnership.

                                       13

     1.26. DTA Activities.

     "DTA Activities" shall mean those activities of DTA that have taken place
on or through the use of the Facilities that involve receiving, unloading,
storing, and handling and loading coal and coal by-products.

     1.27. DTA Environmental Liabilities.

     "DTA Environmental Liabilities" shall mean any obligation the Asset Sale
Company may have as a DTA Partner for Liabilities that relate or arise from any
Hazardous Substance related to the DTA Activities conducted in accordance with
standard industry practices.

     1.28. DTA Partners.

     "DTA Partners" shall mean all of the partners of DTA.

     1.29. DTA Revenue Bonds.

     "DTA Revenue Bonds" shall mean $43,160,000 principal amount of Coal
Terminal Revenue Refunding Bonds, Series 1992, due June 1, 2020, issued by the
Peninsula Ports Authority of Virginia, and any amendments, modifications,
refundings or refinancings thereof.

     1.30. Environmental Laws.

     "Environmental Laws" shall mean collectively, all federal, foreign, state,
and local Laws in effect as of the Closing Date that relate to (a) the
prevention, abatement or elimination of pollution, or the protection of the
environment, or of natural resources, including, without limitation, Laws
applicable to coal mining operations or related activities, (b) the generation,
handling, treatment, storage, disposal or transportation of waste materials, (c)
the regulation of or exposure to Hazardous Substances, including, without
limitation, the Comprehensive Environmental Response Compensation and Liability
Act, 42 U.S.C.ss.ss.9601 et. seq. ("CERCLA"), the Solid Waste Disposal Act, as
amended by the Resource Conservation and Recovery Act, as amended, 42
U.S.C.ss.ss.6901 et. seq. ("RCRA"), the Clean Air Act, 42 U.S.C.ss.ss.7401 et.
seq., the Clean Water Act, 33 U.S.C. ss.ss.1251 et. seq., the Toxic Substances
Control Act, 15 U.S.C.ss.ss.2601 et. seq., the Emergency Planning and Community
Right to Know Act, 42 U.S.C.ss.ss.11001 et. seq., and any foreign, state,
county, municipal, or local statutes, Laws or ordinances similar or analogous to
the federal statutes listed in this sentence.

                                       14

     1.31. Facilities.

     "Facilities" shall have the meaning set forth in the Lease Agreement.

     1.32. Governmental Authority.

     "Governmental Authority" shall mean any governmental, judicial,
legislative, executive, administrative or regulatory authority of the United
States, or of any foreign, state or local government or any subdivision, agency,
commission, office, authority or bureau thereof or any quasi-governmental entity
or authority of any nature.

     1.33. Hazardous Substances.

     "Hazardous Substances" shall mean any substance, chemical, waste, solid,
material, pollutant or contaminant that is defined or listed as hazardous or
toxic under any applicable Environmental Laws. Without limiting the generality
of the foregoing it shall also include any radioactive material, including any
naturally-occurring radioactive material, and any source, special or by-product
material as defined in 42 U.S.C. 2011, et seq., any amendments or authorizations
thereof, any asbestos-containing materials in any form or condition, any
polychlorinated biphenyls in any form or condition, radioactive waste, or
natural gas, natural gas liquids, liquified natural gas, condensate, or
derivatives or byproducts thereof or oil and petroleum products or by products
and constituents thereof.

                                       15

     1.34. Indemnification and Guaranty Agreement.

     "Indemnification and Guaranty Agreement" shall mean the agreement by and
among PCC Parent, PCC, Buyer and Buyer's Parent substantially in the form of
Exhibit C attached hereto.

     1.35. Knowledge of PCC.

     "Knowledge of PCC" shall mean, for the individuals listed on Schedule 1.35,
any such individual's actual knowledge and what any such individual should have
known after reasonable inquiry within the scope of that individual's job
responsibilities.

     1.36. Law.

     "Law" and "Laws" shall mean any applicable United States or foreign,
federal, state, local or other law or governmental requirement of any kind, and
the rules, regulations and orders promulgated thereunder.

     1.37. Lease Agreement.

     "Lease Agreement" shall mean the Lease dated as of October 15, 1982,
initially by and among the Peninsula Ports Authority of Virginia, Armco Terminal
Company, a Delaware corporation, Ashland Terminal, Inc., a Delaware corporation,
Sierra Coal Company, a Delaware corporation, Westmoreland Terminal Company, a
Delaware corporation, and the Asset Sale Company, as amended by the First
Amendment thereto dated February 27, 1984, the Second Amendment thereto date as
of July 31, 1986, the Third Amendment thereto dated as of July 1, 1987 and the
Fourth Amendment thereto dated as of November 15, 1992.

                                       16

     1.38. Liability.

     "Liability" shall mean any liability or obligation (whether known or
unknown, whether asserted or unasserted, whether absolute or contingent, whether
liquidated or unliquidated and whether due or to become due), including any
liability for Taxes. "Liabilities" shall mean one or more items of Liability.

     1.39. Lien.

     "Lien" shall mean any lien, encumbrance, mortgage, charge, claim,
restriction, pledge, security interest or imposition of any kind.

     1.40. Loan Agreement.

     "Loan Agreement" shall mean the Loan Agreement, dated as of November 15,
1992, between Peninsula Ports Authority of Virginia and DTA.

     1.41. Material Adverse Effect.

     "Material Adverse Effect" shall mean any event, change or occurrence that
individually, or together with any other event, change or occurrence, has a
material adverse impact on the Business, taken as a whole, without regard to the
duration of such material adverse impact.

     1.42. Operating Agreement.

     "Operating Agreement" shall mean the Amended and Restated Operating
Agreement, dated as of January 1, 1988, initially by and among DTA, Ashland
Terminal, Inc., BHP-Utah Terminal Company, Cavalier Coal Terminal Company, James
River Coal Terminal, Peabody Terminals, Inc, Westmoreland Terminal Company and
the Asset Sale Company, as amended by the First Amendment thereto dated as of
January 1, 1989, the Second Amendment thereto dated as of September 11, 1990,
the Third Amendment thereto dated as of August 24, 2000 and the Fourth Amendment
thereto dated as of December 31, 2001.

                                       17

     1.43. Ordinary Course of Business.

     "Ordinary Course of Business" means the ordinary course of business
consistent with past custom and practice (including with respect to quantity and
frequency).

     1.44. Parent Company Agreement.

     "Parent Company Agreement" shall mean the Seventh Amended and Restated
Parent Company Agreement, dated as of September 11, 1990, by and among Ashland
Coal, Inc., a Delaware Corporation, Peabody Holding Company, Inc., a New York
corporation, Westmoreland Coal Company, a Delaware corporation, and PCC Parent.

     1.45. Partner Matter.

     "Partner Matter" shall have the meaning set forth in Section 5.10 hereof.

     1.46. PCC.

     "PCC" shall have the meaning given to it in the preamble to this Agreement.

     1.47. PCC Closing Certificate.

     "PCC Closing Certificate" shall mean the certificate of PCC substantially
in the form of Exhibit D attached hereto.

     1.48. PCC Group.

     "PCC Group" shall have the meaning set forth in Section 1.53 hereof.

     1.49. PCC Parent.

     "PCC Parent" shall mean The Pittston Company, a Virginia corporation.

                                       18

     1.50. Permits.

     "Permits shall have the meaning set forth in Section 3.6 hereof.

     1.51. Permitted Liens.

     "Permitted Liens" shall mean those Liens affecting the Purchased Assets
that are listed on Schedule 1.51.

     1.52. Person.

     "Person" shall mean any individual, corporation, general or limited
partnership, limited liability company, joint venture, estate, trust,
association, organization, labor union or other entity or Governmental
Authority.

     1.53. Pre-Closing Period.

     "Pre-Closing Period" shall mean any taxable period ending on or before the
Closing Date.

     1.54. Purchased Assets.

     "Purchased Assets" shall mean the rights of the Asset Sale Company with
respect to the Assigned Contracts, including in any event all of the Asset Sale
Company's rights as a partner in DTA (subject to Section 2.7 hereof) but
excluding the Retained Contract Rights.

     1.55. Related Persons.

     "Related Persons" shall mean related persons as that term is defined in
Section 9701(c)(2) of the Coal Act, except that it shall not include successors
in interest.

     1.56. Retained Contract Rights.

     "Retained Contract Rights" shall mean any and all rights under or interest
in the Assigned Contracts relating to the DTA Revenue Bonds, including without
limitation any right to, or to cause DTA to, pay, prepay, defease, call, redeem,
refund, refinance, modify or satisfy the DTA Revenue Bonds, in whole or in part,
reset any interest rate related thereto, perform any obligation of the Peninsula
Ports Authority of Virginia in respect thereof or amend, modify, restate,
terminate or assign, or cause the amendment, modification, restatement,
termination or assignment of, any document (including any Consortium Document)
related thereto. Without limiting the foregoing, the Retained Contract Rights
shall include any right enumerated in Sections 3.2, 3.3 or 3.4 of the Throughput
Agreement.

                                       19

     1.57. Retained Contract Liabilities.

     "Retained Contract Liabilities" shall mean any and all Liabilities of the
Asset Sale Company under the Assigned Contracts (excluding in any event the
Assumed Liabilities) relating to the DTA Revenue Bonds, including without
limitation (i) any obligation to, or cause DTA to, pay, prepay, defease, redeem,
refund, refinance or satisfy the DTA Revenue Bonds, pay any interest thereon, or
pay any costs and expenses related thereto, (ii) any Liability enumerated in
Sections 3.2, 3.3 or 3.4 of the Throughput Agreement, (iii) any Liability
relating solely to the DTA Revenue Bonds enumerated in Section 6.1 of the
Consortium Agreement and (iv) any Liability relating to the DTA Revenue Bonds
arising out of or in connection with DTA's obligations under the Loan Agreement
or the Lease Agreement, except to the extent, in each case, that such
Liabilities (excluding the obligations to pay the principal of and interest on
the DTA Revenue Bonds and the related expenses set forth in Section 5.2 of the
Loan Agreement in amounts and in accordance with the schedule of principal and
interest payments in effect as of the date hereof with such changes as PCC shall
approve, which are and shall remain solely the Liability of the Asset Sale
Company and PCC) are caused by the negligence, misconduct or breach of any
obligation of Buyer or Buyer's Parent with respect to the Purchased Assets or
under the Assigned Contracts, the Assignment and Assumption Agreements or the
Indemnification and Guaranty Agreement.

                                       20

     1.58. Retained Liabilities.

     "Retained Liabilities" shall mean (a) (1) all Liabilities, if any, of the
Asset Sale Company and its Related Persons (collectively, the "PCC Group") under
the Coal Act, and (2) all Liabilities, if any, of the PCC Group under any
post-Closing amendments to the Coal Act for (i) beneficiaries eligible under the
Coal Act who are assigned to a member of the PCC Group or for whom a member of
the PCC Group is required to provide or pay for medical benefits pursuant to
Sections 9711 or 9712 of the Coal Act or (ii) death benefit premiums or
unassigned beneficiary premiums (as those terms are used in Sections 9704(c) and
9704(d) of the Coal Act) for beneficiaries eligible under the Coal Act, that are
assessed against any member of the PCC Group; provided, for the avoidance of
doubt, that the Liabilities retained pursuant to (1) and (2) above shall not be
affected by Buyer or any of its Affiliates being identified under the Coal Act
or any post-Closing amendments thereto as a successor, successor in interest or
"Related person" under the Coal Act or any post-Closing amendments thereto to
any member of the PCC Group solely as a result of Buyer's purchase of the
Purchased Assets; (b) all Liabilities, if any, of the Asset Sale Company for
cash advances or other contributions to DTA in respect of Terminal Operating
Expenses (as defined in the Operating Agreement) accrued through, and allocable
to the period ending on, the Closing Date; and (c) all Retained Contract
Liabilities.

     1.59. Tax or Taxes.

     "Tax" or "Taxes" mean any federal, state, local, or foreign income, gross
receipts, license, payroll, employment, excise, severance, stamp, occupation,
premium, windfall profits, environmental (including taxes under Code ss.59A),
custom duties, capital stock, franchise, profits, withholding, social security
(or similar), unemployment, disability, real property, personal property, sales,
use, transfer, registration, value added, alternative or add-on minimum,
estimated, reclamation fees or other tax of any kind whatsoever, including any
interest, penalty, or addition thereto, whether disputed or not, but shall not
include, for purposes of this Agreement only, Liabilities under the Coal Act, of
whatever nature and regardless of how denominated.

                                       21

     1.60. Tax Return.

     "Tax Return" shall mean any original or amended report, return,
declaration, claim for refund, statement, document, schedule, attachment or
other information supplied or required to be supplied to a Governmental
Authority with respect to Taxes, including any return of an affiliated, combined
or unitary group.

     1.61. Throughput Agreement.

     "Throughput Agreement" shall mean the Amended and Restated Throughput and
Handling Agreement, dated as of July 1, 1987, initially by and among Ashland
Terminal, Inc., Cavalier Coal Terminal Company, James River Coal Terminal
Company, Peabody Terminals, Inc., Westmoreland Terminal Company, the Asset Sale
Company and DTA, as amended by the First Amendment thereto dated as of September
30, 1989, the Second Amendment thereto dated as of September 11, 1990, the Third
Amendment thereto dated as of November 15, 1992, and the Fourth Amendment
thereto dated as of June 2, 1994.

     1.62. Transportation Agreement.

     "Transportation Agreement" shall mean the Fifth Amendment effective as of
January 1, 1988 to the Transportation Agreement, dated as of April 24, 1982,
initially by and among CSX Transportation, Inc., Ashland Terminal, Inc.,
Cavalier Coal Terminal Company, James River Coal Terminal Company, Peabody
Terminals, Inc., BHP-Utah Terminal Company, Westmoreland Terminal Company, the
Asset Sale Company and DTA, as amended by the Sixth Amendment thereto dated as
of January 1, 1989, and the Seventh Amendment thereto dated as of September 11,
1990.

                                       22

     1.63. Voting Agreement.

     "Voting Agreement" shall mean the voting agreement substantially in the
form of Exhibit G attached hereto.

                                   ARTICLE II
                           PURCHASE AND SALE OF ASSETS

     2.1. Transfer of Assets.

     On the Closing Date, PCC (on behalf of the Asset Sale Company) shall cause
to be sold, conveyed, transferred and assigned to Buyer, and Buyer shall
acquire, the Purchased Assets. At the Closing, subject to the terms and
conditions of this Agreement, PCC agrees to: (i) cause all of its rights and
interest in the Purchased Assets to be transferred to Buyer; and (ii) perform
its obligations under this Agreement to be performed at or before Closing. In
consideration for the Purchased Assets, Buyer shall: (i) assume the Assumed
Partner Liabilities; (ii) cause Buyer's Parent to assume the Assumed Parent
Liabilities; and (iii) perform its obligations under this Agreement to be
performed at or before Closing. Buyer and Buyer's Parent shall not assume or
have any responsibility with respect to any Liability of PCC Parent, PCC, the
PCC Group or the Asset Sale Company that is not an Assumed Liability.

     2.2. Assignment and Assumption Agreements and Other Documents.

     At the Closing, PCC shall cause the Asset Sale Company and PCC Parent to:
(i) execute and deliver to Buyer the Assignment and Assumption Agreements and
such other documents as may be necessary to convey to Buyer the Purchased
Assets; and (ii) perform its obligations under the Agreement to be performed at
or before the Closing.

                                       23

     2.3. Assumption of Liabilities.

     At the Closing, Buyer shall execute and deliver, and shall cause Buyer's
Parent to execute and deliver, to PCC the Assignment and Assumption Agreements
and such other documents and instruments as may be necessary for Buyer and
Buyer's Parent to assume all of the Assumed Liabilities. Buyer and Buyer's
Parent shall not assume or have any responsibility, however, with respect to any
Liability of PCC Parent, PCC, the PCC Group or the Asset Sale Company that is
not an Assumed Liability.

     2.4. Proration of Liabilities.

     PCC and Buyer shall cooperate with each other to provide for payments due
with respect to the Assumed Liabilities and the Retained Liabilities. If,
following the Closing, Buyer or any of its post-Closing Affiliates receives or
is the beneficiary of any payment or credit in any form with respect to the
Asset Sale Company (other than the Purchased Assets) or DTA that should (or, but
for the Closing, would) have been paid or credited to PCC or its Affiliates,
Buyer shall forward, or shall cause such post-Closing Affiliate to forward, an
amount equal to such payment or credit to PCC within five business days of
receipt. If, following the Closing, PCC or any of its post-Closing Affiliates
receives any payment in any form with respect to the Purchased Assets that
should have been paid to Buyer or its Affiliates, PCC shall forward, or shall
cause such post-Closing Affiliate to forward, such payment to Buyer within five
business days of receipt.

     2.5. Indemnification and Guaranty Agreement.

     At the Closing, PCC and Buyer shall, and PCC shall cause the PCC Parent and
Buyer shall cause Buyer's Parent to, execute and deliver the Indemnification and
Guaranty Agreement.

                                       24

     2.6. Additional Documents.

     At the Closing, PCC and Buyer shall, and PCC shall cause the Asset Sale
Company and the PCC Parent to, and Buyer shall cause Buyer's Parent to, execute
and deliver all such other documents or instruments necessary or appropriate to
effect the transactions contemplated by this Agreement, including the documents
provided in this Article II.

     2.7. Partner Status.

     It is the desire and intention of the parties that Buyer become, and that
the Asset Sale Company withdraw and be released as, a full partner in DTA. To
that end, each of PCC and Buyer will use its commercially reasonable efforts to
cause the other DTA Partners to execute such documents as may be necessary to
(a) admit Buyer as a full partner in DTA, (b) cause the withdrawal of the Asset
Sale Company as a full partner in DTA and release the Asset Sale Company from
all of its Liabilities under the Consortium Documents (other than any Retained
Liabilities), and (c) amend the Transportation Agreement to evidence the
foregoing, provided that all such documents and amendments shall provide that
the Retained Contract Rights and Retained Liabilities shall remain with the
Asset Sale Company.

                                       25

     2.8. Allocation of Assumed Liabilities.

     The Assumed Liabilities (to the extent they constitute part of the amount
realized for federal Income Tax purposes) shall be allocated among the Purchased
Assets in accordance with a schedule to be agreed upon by Buyer and PCC after
the Closing Date. Buyer shall prepare such allocation schedule and deliver it to
PCC upon a date to be agreed upon between the parties, which date shall be no
later than 60 days after the Closing Date. PCC shall be deemed to agree with
such allocation schedule unless, within ten (10) days after the date PCC
receives the allocation schedule from Buyer, PCC notifies Buyer in writing of
(i) each allocation with which it disagrees and (ii) for each such allocation,
the amount that PCC proposes to allocate. If PCC provides such notice to Buyer,
the parties shall proceed in good faith to resolve mutually the disputed
allocation amounts within fifteen (15) days after the date on which PCC notifies
Buyer of a disagreement with Buyer's proposed allocation. If PCC and Buyer
cannot resolve any such differences, the parties agree to submit such
differences to arbitration in Abingdon, Virginia by the accounting firm of
Deloitte & Touche, LLP or another accounting firm mutually acceptable to both
parties (the "CPA Arbitrator") to resolve such differences. The CPA Arbitrator
shall make such review and examination of the relevant facts and documents as
the CPA Arbitrator deems appropriate and shall permit each of Buyer and PCC to
make a written presentation of their respective positions. Within forty-five
(45) days after submission of such dispute by both parties, the CPA Arbitrator
shall resolve such dispute in writing and shall prepare and deliver its
decision, which shall (i) be based upon a determination of the fair market value
of the Purchased Assets, (ii) defer to valuations that have been prepared in
accordance with generally accepted valuation techniques absent manifest error,
(iii) be final and binding upon the parties without further recourse or
collateral attack and (iv) accept either Buyer's or PCC's position in its
entirety. The party whose position is not accepted by the CPA Arbitrator shall
pay all fees and costs of such CPA Arbitrator to arbitrate such dispute. The
allocation schedule shall include, at a minimum, information necessary to
complete Part II of IRS Form 8594. The allocation to the Purchased Assets is
intended to comply with the requirements of Section 1060 of the Code. The
parties shall cooperate to comply with all substantive and procedural
requirements of Section 1060 and, after the completion and agreement by the
parties to the allocation schedule, such allocation schedule shall be adjusted
only if and to the extent necessary to comply with such requirements of Section
1060. Buyer and PCC agree that they will not take nor will they permit any
Affiliate to take, for Income Tax purposes, any position inconsistent with such
allocation schedule to the Purchased Assets; provided, however, that (i) Buyer's
cost for the Purchased Assets may differ from the total amount allocated
hereunder to reflect the inclusion in the total cost of items (for example,
capitalized acquisition costs) not included in the total amount so allocated and
(ii) the amount realized by the Asset Sale Company may differ from the total
amount allocated hereunder to reflect transaction costs that reduce the amount
realized for federal Income Tax purposes.

                                       26

                                  ARTICLE III
                     REPRESENTATIONS AND WARRANTIES OF PCC

     PCC hereby represents and warrants to Buyer that the statements contained
in this Article III are correct and complete, except as set forth in the
Schedules delivered by PCC to Buyer in connection with this Agreement. The
Schedules are arranged in paragraphs corresponding to the lettered and numbered
paragraphs contained in this Article III.

     3.1. Incorporation.

     PCC and the Asset Sale Company are corporations duly organized, validly
existing and in good standing under the Laws of the respective state or
commonwealth of each such company's incorporation. PCC is duly qualified or
licensed to transact business as a foreign corporation in Virginia and is in
good standing under the laws of Virginia. Set forth on Schedule 3.1 is the name
of each state or other jurisdiction in which each such company has either paid
taxes or had an office in the three years prior to the date of this Agreement.

                                       27

     3.2. Execution, Delivery and Performance.

     The execution, delivery and performance by PCC of this Agreement and by PCC
and the Asset Sale Company of each other agreement or instrument to which it is
a party executed in connection herewith or delivered pursuant hereto and the
consummation of the transactions contemplated herein and therein will not, with
or without the giving of notice or the passage of time, or both: (i) 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
PCC's or the Asset Sale Company's Articles of Incorporation or Bylaws or of any
material franchise, mortgage, deed of trust, Lien, lease, license, instrument,
agreement, consent, approval, waiver or understanding to which PCC or the Asset
Sale Company is a party or by which the Asset Sale Company is bound, or any Law
or any order, judgment, writ, injunction or decree to which PCC or the Asset
Sale Company is a party or by which PCC, the Asset Sale Company or the Purchased
Assets may be bound or affected; (ii) 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 issued
by a Governmental Authority that is held by PCC or the Asset Sale Company or
that otherwise relates to the Purchased Assets; or (iii) 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 PCC or the Asset Sale Company is subject.

     3.3. Authorization.

     PCC has full power and authority to enter into and deliver this Agreement
and to perform its obligations hereunder and each of PCC, PCC Parent and the
Asset Sale Company has full power and authority to enter into and deliver each
other agreement or instrument to which it is a party executed in connection
herewith and delivered pursuant hereto and to perform its obligations
thereunder. PCC's execution, delivery and performance of this Agreement and the
execution, delivery and performance of all other agreements and instruments by
PCC, PCC Parent and the Asset Sale Company in connection herewith and delivered
pursuant hereto and the transactions contemplated hereby have been duly
authorized by all requisite corporate action on the part of PCC, PCC Parent and
the Asset Sale Company. This Agreement and all other agreements or instruments
executed by PCC, PCC Parent or the Asset Sale Company in connection herewith and
delivered by PCC, PCC Parent or the Asset Sale Company pursuant hereto have been
duly executed and delivered by PCC, PCC Parent or the Asset Sale Company and
this Agreement and all other agreements and instruments executed by PCC, PCC
Parent or the Asset Sale Company in connection herewith and delivered by PCC,
PCC Parent or the Asset Sale Company pursuant hereto constitute the legal, valid
and binding obligation of PCC, PCC Parent or the Asset Sale Company, as the case
may be, enforceable in accordance with their respective terms (subject to any
applicable bankruptcy, insolvency, reorganization, moratorium or other similar
Laws affecting generally the enforcement of creditors' rights).

     3.4. Purchased Assets.

     The Asset Sale Company owns a valid interest in the Purchased Assets,
including without limitation a 32.5% partnership interest in DTA, free from
Liens and restrictions on transfer, other than Permitted Liens.

     3.5. DTA Facilities.

     To the Knowledge of PCC, the Lease Agreement is a valid and enforceable
lease of the Facilities (subject to any applicable bankruptcy, insolvency,
reorganization, moratorium or other similar Laws affecting generally the
enforcement of creditors' rights). No rights of the Asset Sale Company under the
Lease Agreement have been assigned or otherwise transferred as security for any
obligation of the Asset Sale Company. The consummation of the transactions
contemplated by this Agreement will not create or constitute, either with or
without notice or the passage of time, a default or event of default under the
Lease Agreement or require the consent of any other party to the Lease Agreement
in order to avoid a default or event of default.

                                       28

     3.6. DTA Permits.

     To the Knowledge of PCC, DTA owns or holds all permits, licenses, orders,
certificates, registrations, approvals, consents and authorizations
(collectively, "Permits") of all Governmental Authorities and all other Permits
necessary for the conduct of its business as currently conducted.

     3.7. Absence of Changes.

     To the Knowledge of PCC, since December 31, 2001, DTA has not:

     (a)  borrowed or agreed to borrow any funds or incurred, or become subject
          to, any Liability, or issued any note, bond or other debt security, or
          guaranteed any indebtedness for borrowed money or capitalized lease
          obligation, except Liabilities incurred in the Ordinary Course of
          Business, none of which would reasonably be expected to result in an
          impact greater than $100,000;

     (b)  paid any Liability other than current Liabilities in the Ordinary
          Course of Business;

     (c)  sold, transferred or otherwise disposed of, or agreed to sell,
          transfer or otherwise dispose of any of its assets or properties, or
          canceled or otherwise terminated, or agreed to cancel or otherwise
          terminate, other than in the Ordinary Course of Business, any Permits;

                                       29

     (d)  except in the Ordinary Course of Business, entered into any agreement,
          contract, lease or license (or series of related agreements,
          contracts, leases or licenses) or made or permitted any material
          amendment to or termination, acceleration, modification or
          cancellation of any written contract or agreement to which it is a
          party or breached any provision of any such contract or agreement;

     (e)  merged or consolidated with any other Person;

     (f)  mortgaged, pledged or subjected to any Lien any of its assets or
          properties;

     (g)  made any capital expenditure (or series of related capital
          expenditures) (x) involving more than $100,000 or (y) outside the
          Ordinary Course of Business;

     (h)  made any capital investment in, any loan to, or any acquisition of the
          securities or assets of, any other Person (or series of related
          capital investments, loans and acquisitions) either (x) involving
          $100,000 or (y) outside the Ordinary Course of Business;

     (i)  delayed or postponed the payment of accounts payable and other
          Liabilities outside the Ordinary Course of Business;

     (j)  cancelled, compromised, waived or released any right or claim (or
          series of related rights and claims) either (x) involving more than
          $100,000 or (y) outside the Ordinary Course of Business;

     (k)  made any loan to, or entered into any other transaction with, any of
          the partners, managers or employees of DTA outside the Ordinary Course
          of Business;

     (l)  entered into any employment contract or collective bargaining
          agreement, written or oral, or modified the terms of any existing such
          contract;

                                       30

     (m)  except in the Ordinary Course of Business adopted, amended, modified
          or terminated any bonus, profit-sharing, incentive, severance or other
          plan, contract or commitment for the benefit of any of employees of
          DTA, or taken any such action with respect to any other employee
          benefit plan;

     (n)  made any other change in employment terms for any of the managers or
          employees of DTA outside the Ordinary Course of Business;

     (o)  suffered any damage, destruction or loss (excluding operating losses),
          whether or not covered by insurance, that has had or would reasonably
          be expected to have a Material Adverse Effect;

     (p)  implemented or adopted any change in its accounting methods or
          principles or the application thereof; or

     (q)  entered into any agreement, arrangement or understanding with respect
          to any of the foregoing.

     3.8. Assigned Contracts.

     (a)  PCC has made available to Buyer copies of all of the written Assigned
          Contracts, or a written summary setting forth the terms and conditions
          where no copies exist, including all amendments, modifications,
          waivers and elections applicable thereto. The Assigned Contracts are
          all of the agreements related to the Purchased Assets to which the
          Asset Sale Company or PCC Parent is a party.

     (b)  As to the Asset Sale Company party thereto: (i) the Assigned Contracts
          are valid and binding, enforceable in accordance with their respective
          terms (subject to any applicable bankruptcy, insolvency,
          reorganization, moratorium or other similar Laws affecting generally
          the enforcement of creditors' rights), and are in full force and
          effect; (ii) the consummation of the transactions contemplated herein
          will not, with or without the giving of notice or the passage of time,
          or both, 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 the Assigned Contracts; (iii) the Asset Sale Company is
          not, nor to the Knowledge of PCC, is any other party in material
          breach or default, and no event has occurred that, with notice or
          lapse of time, would constitute a breach or default, or permit
          termination, modification or acceleration, under the Assigned
          Contracts; and (iv) the Asset Sale Company has not, nor to the
          Knowledge of PCC has any other party, repudiated any provision of the
          Assigned Contracts.

                                       31

     (c)  Schedule 3.8(c) sets forth the consents and approvals of third parties
          and Governmental Authorities required to be obtained as a result of
          the transactions contemplated by this Agreement. PCC has provided the
          written notices of right of first refusal to all general partners of
          DTA as specified in Sections 7.2(ii)(a),(b),(c) and (d) of the
          Consortium Agreement and the time periods applicable to each right of
          first refusal have expired without notice being made by any such
          partner of its exercise of any such right.

     3.9. Litigation; Claims.

     Schedule 3.9 lists all claims, legal actions, suits, litigation,
arbitrations, disputes, investigations, proceedings by or before any
Governmental Authority involving more than $100,000 and all orders, decrees or
judgments, now pending or in effect, or, to the Knowledge of PCC, threatened or
contemplated, against or affecting the Asset Sale Company, the Purchased Assets
or the consummation of the transactions contemplated by this Agreement, except
to the extent involving Taxes for Pre-Closing Periods.

                                       32

     3.10. Legal Compliance.

     As it may affect the Purchased Assets, the Asset Sale Company and its
predecessors and Affiliates and, to the Knowledge of PCC, DTA, have complied in
all material respects with all Laws as presently in effect, and no material
action, suit, proceeding, hearing, investigation, charge, complaint, claim,
demand, or notice is pending against any of the Asset Sale Company and its
predecessors and Affiliates or, to the Knowledge of PCC, DTA, alleging any
failure so to comply.

     3.11. Environmental Compliance.

     (a)  To the Knowledge of PCC, DTA is in material compliance with all
          Environmental Laws related to the Facilities.

     (b)  To the Knowledge of PCC, (A) none of the Facilities has been or is
          being used in any manner associated with the production, manufacture,
          processing, generation, storage, treatment, disposal, management,
          shipment or transportation of Hazardous Substances and none of such
          Facilities is Contaminated by any Hazardous Substance; (B) there are
          no underground storage tanks regulated pursuant to RCRAss.9001 (42
          U.S.C.ss. 6991) or equivalent authorized state program, and no above
          ground storage tanks, located at, on, in or under the Facilities; (C)
          there is no asbestos-containing material in any form or condition
          located at, on, in or under the Facilities; (D) there are no materials
          or equipment containing polychlorinated biphenyls located at, on, in
          or under the Facilities, (E) there are no landfills or other areas
          located at, on, in or under the Facilities where Hazardous Substances
          have been disposed; and (F) DTA has not disposed of any Hazardous
          Substance at any offsite disposal area located on the property of any
          other Person, other than a facility permitted by any Governmental
          Authority with jurisdiction to receive such Hazardous Substance.

                                       33

     (c)  To the Knowledge of PCC, DTA has not, with respect to the Facilities,
          either expressly or by operation of Law, assumed or undertaken any
          Liability, including without limitation, any Liability for corrective
          or remedial action, of any other Person relating to any Environmental
          Laws.

     3.12. No Broker.

     None of the Asset Sale Company, PCC or the PCC Parent has had any dealings,
negotiations or communications with or retained any broker or other intermediary
in connection with the transactions contemplated by this Agreement and none of
the foregoing is committed to any Liability for any brokers' or finders' fees or
any similar fees in connection with the transactions contemplated hereby, other
than Rothschild Inc., who shall be compensated solely by PCC or an Affiliate of
PCC.

     3.13. Powers of Attorney.

     There are no outstanding powers of attorney executed on behalf of the Asset
Sale Company affecting the Purchased Assets.

3.14. Transactions With Affiliates.

     The Assigned Contracts do not include any Liability between the Asset Sale
Company and any Affiliate of the Asset Sale Company. At the Closing, the
Purchased Assets will not include any receivable or other Liability from an
Affiliate of the Asset Sale Company.

                                       34

     3.15. Absence of Certain Payments.

     During the five (5) year period prior to the date of this Agreement, to the
Knowledge of PCC, neither the Asset Sale Company nor DTA has (nor has any
director, officer, agent, or employee of the Asset Sale Company or DTA nor any
other person, acting on behalf of the Asset Sale Company or DTA) directly or
indirectly: used any of such company's funds for unlawful contributions, gifts,
entertainment or other unlawful expenses relating to political activity; made
any unlawful payment to foreign or domestic government officials or employees or
to foreign or domestic political parties or campaigns from such company's funds;
violated any provision of the Foreign Corrupt Practices Act of 1977 applicable
to such company; established or maintained any unlawful or unrecorded fund of
such company's monies or other assets; made any false or fictitious entry on the
books or records of such company; or made any bribe, rebate, payoff, influence
payment, kickback, or other unlawful payment, to any person or entity, private
or public, regardless of form, whether in money, property, or services, to
obtain favorable treatment in securing business or to obtain special concessions
for such company, or to pay for favorable treatment for business secured or for
special concessions already obtained for such company.

     3.16. Disclosure.

     The representations and warranties contained in this Article III do not
contain any untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements and information contained in this
Article III not misleading.

                                       35

                                   ARTICLE IV
                     REPRESENTATIONS AND WARRANTIES OF BUYER

     Buyer hereby represents and warrants to PCC that:
     4.1. Organization.

     Buyer is a duly formed limited liability company, validly existing and in
good standing under the Laws of the State of Delaware.

     4.2. Execution, Delivery and Performance.

     The execution, delivery and performance of this Agreement and each other
agreement or instrument executed in connection herewith or delivered pursuant
hereto and the consummation of the transactions contemplated herein and therein
will not, with or without the giving of notice or the passage of time, or both,
(i) conflict with, or result in a violation or breach of, or a default, right to
accelerate or loss of rights under, or result in the creation of any Lien, under
or pursuant to, any provision of Buyer's organizational documents or of any
franchise, mortgage, deed of trust, lease, license, instrument, agreement,
consent, approval, waiver or understanding, any Law, or any finding, order,
judgment, writ, injunction or decree to which Buyer is a party or by which Buyer
or its respective assets may be bound or affected; or (ii) require the approval,
consent or authorization of, or prior notice to, filing with or registration
with, any Governmental Authority, or any other Person or entity.

     4.3. Authorization.

     Buyer has full power and authority to enter into and deliver this Agreement
and to perform its obligations hereunder, and each of Buyer and Buyer's Parent
has full power and authority to enter into and deliver each other agreement or
instrument to which it is a party executed in connection herewith or delivered
pursuant hereto and to perform its obligations thereunder. Buyer's execution,
delivery and performance of this Agreement and the execution, delivery and
performance of all other agreements and instruments by Buyer and Buyer's Parent
in connection herewith or delivered pursuant hereto and the transactions
contemplated hereby have been duly authorized by all requisite action on the
part of Buyer and Buyer's Parent. This Agreement and all other agreements or
instruments executed by Buyer or Buyer's Parent in connection herewith or
delivered by Buyer or Buyer's Parent pursuant hereto have been duly executed and
delivered by Buyer and this Agreement and all other agreements and instruments
executed by Buyer or Buyer's Parent in connection herewith or delivered by Buyer
pursuant hereto constitute the legal, valid and binding obligation of Buyer or
Buyer's Parent, as the case may be, enforceable in accordance with their
respective terms (subject to any applicable bankruptcy, insolvency,
reorganization, moratorium or other similar Laws affecting generally the
enforcement of creditors' rights).

                                       36

     4.4. No Broker.

     Buyer has had no dealings, negotiations or communications with any broker
or other intermediary in connection with the transactions contemplated by this
Agreement nor is it committed to any Liability for any brokers' or finders' fees
or any similar fees in connection with the transactions contemplated hereby.

     4.5. Reclamation and Environmental Compliance.

     Buyer and all operators it owns or controls are in compliance with all
Environmental Laws in all material respects.

     4.6. Financing.

     Buyer will have available to it, at the Closing, financial resources
sufficient to consummate the transactions contemplated by this Agreement.

     4.7. Disclosure.

     The representations and warranties contained in this Article IV do not
contain any untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements and information contained in this
Article IV not misleading.

                                       37

                                   ARTICLE V
                               CERTAIN COVENANTS

     5.1. Operation in Ordinary Course.

     Except as provided in this Agreement, between the date of this Agreement
and the Closing, PCC shall cause the Asset Sale Company, in relation to the
Purchased Assets, to: (i) carry on its business in the Ordinary Course of
Business; (ii) use commercially reasonable efforts to preserve intact its
current business organization and properties until the Closing Date, and
maintain the relations and good will with its suppliers, customers, landlords,
creditors, agents, and others having business relationships with the Asset Sale
Company; (iii) not enter into any contract or other obligation binding upon the
Asset Sale Company involving its employees, any union, or an expenditure,
purchase, sale, cost or commitment (unless such contract is cancelable in thirty
or fewer days, involves less than $100,000, or is for consumable purchases)
without the prior written consent of Buyer; and (iv) report regularly to Buyer
concerning the status of the business and finances of the Asset Sale Company.

     5.2. Compliance with Law.

     Between the date of this Agreement and the Closing, the Asset Sale Company
shall comply in all material respects with all applicable Laws and with all
orders of any Governmental Authority.

                                       38

     5.3. Cooperation.

     Subject to the terms and conditions herein provided, each of PCC and Buyer
agrees to use its commercially reasonable efforts to take, or cause to be taken,
all action, and to do, or cause to be done, all things necessary, proper and
advisable under Law, to consummate and make effective the transactions
contemplated by this Agreement, including obtaining the consents, approvals and
releases required by Sections 2.7, 6.1 and 6.3. In case at any time after the
Closing Date any further action is necessary or desirable to carry out the
purposes of this Agreement, PCC and Buyer will, and PCC will cause the Asset
Sale Company and the PCC Parent to, execute any additional instruments
reasonably necessary to consummate the transactions contemplated hereby.

     5.4. Notices and Consents.

     PCC and Buyer each will use their commercially reasonable efforts to obtain
consents of all Governmental Authorities and other third parties necessary to
the consummation of the transactions contemplated by this Agreement. PCC and
Buyer will use their commercially reasonable efforts to cause the other DTA
Partners to (a) execute such documents as may be necessary to admit Buyer, and
cause the withdrawal and release of the Asset Sale Company, as a full partner in
DTA and (b) amend the Transportation Agreement to evidence the foregoing. PCC
shall have responsibility for providing any notices to third parties that may be
required by the transactions contemplated by this Agreement and for obtaining,
or causing to be obtained, at its sole cost and expense, the consents listed on
Schedule 5.4(a) and Buyer shall have responsibility for obtaining, at its sole
cost and expense, all consents listed on Schedule 5.4(b).

                                       39

     5.5. Publicity.

     All general notices, releases, statements and communications to any
employees, suppliers, distributors and customers of the Asset Sale Company, to
the general public and to the press relating to the transactions contemplated by
this Agreement shall be made only at such times and in such manner as may be
mutually agreed upon by PCC and Buyer; provided, however, that either party
hereto (or, in the case of PCC, the PCC Parent) shall be entitled to make a
public announcement of the foregoing if: (a) in the opinion of its legal
counsel, such announcement is required to comply with Law or any listing
agreement with any national securities exchange or inter-dealer quotation
system; and (b) such disclosing party gives a reasonable period of notice and
opportunity to comment to the other party hereto of its intention to make such
public announcement; provided that, failure to comment within 24 hours of
receipt of such notice shall be deemed a waiver of the opportunity to comment;
and provided, further, that nothing in this Section 5.5 shall operate to
prohibit the Asset Sale Company or Buyer from communicating, after the Closing
Date, with their respective suppliers, distributors, customers and Governmental
Authorities the fact that the transaction has occurred or to employees regarding
their employment or the terms and conditions thereof, the operation of the
Purchased Assets or matters necessarily related thereto.

     5.6. Exclusivity.

     PCC will not (nor will it cause or permit the Asset Sale Company or the PCC
Parent to) (i) solicit, initiate or encourage the submission of any proposal or
offer from any Person relating directly or indirectly to the acquisition of the
Purchased Assets, or any portion thereof, or (ii) participate in any discussions
or negotiations regarding, furnish any information with respect to, assist or
participate in, or facilitate in any other manner, any effort or attempt by any
Person to do or seek any of the foregoing. PCC will notify Buyer immediately if
any Person makes any proposal, offer, inquiry or contact with respect to any of
the foregoing.

                                       40

     5.7. Access.

     At or prior to the Closing Date, PCC will permit (and will cause the Asset
Sale Company to permit) representatives of Buyer to have full access at all
reasonable times, and in a manner so as not to interfere with the normal
business operations of the Asset Sale Company, to all premises, properties,
personnel, books, records (including Tax records), contracts and documents of or
pertaining to the Purchased Assets. Copies of and access to accounting records,
ledgers and other pertinent documents or work papers related to the Purchased
Assets will be made available to Buyer at all reasonable times, and in a manner
so as not to interfere with the normal business operations of the Asset Sale
Company, upon request.

     5.8. Notice of Developments.

     Each party will give prompt written notice to the other party of any
material adverse development causing a breach of any of its own representations
and warranties in Article III and Article IV above. No disclosure by any party
pursuant to this Section 5.8, however, shall be deemed to amend or supplement
the Schedules to such representations and warranties or to prevent or cure any
misrepresentation, breach of warranty or breach of covenant.

     5.9. Further Assurances.

     The parties shall cooperate in a commercially reasonable manner with each
other and with their respective representatives in connection with any steps
required to be taken as part of their respective obligations under this
Agreement, and shall (a) furnish upon request to each other such further
information; (b) execute and deliver to each other such other documents; and (c)
do such other acts and things, all as the other party may reasonably request for
the purpose of carrying out the intent of this Agreement and the transactions
contemplated.

                                       41

     5.10. Voting Agreement.

          (a) In furtherance of the desire of the parties that Buyer have all
     the rights of a full partner in DTA, PCC hereby agrees that, from and after
     the Closing Date, until such time as Buyer shall have been admitted as a
     full partner in DTA, PCC shall, or shall cause the Asset Sale Company to,
     give Buyer prior written notice of any matter submitted to the DTA partners
     (whether such matter is submitted to a vote, written consent or other
     approval) (a "Partner Matter"). The notice provided to Buyer shall include
     a description of the Partner Matter and the date and time fixed for taking
     action on such Partner Matter, and such notice shall be given no later than
     the earlier of (a) two days after the Asset Sale Company becomes aware
     (whether by written notice or otherwise) of any Partner Matter to be
     submitted to the DTA partners for consideration and (b) prior to the time
     any action is taken on such Partner Matter. As soon as practicable
     following receipt of such notice by Buyer, and in any event no later than
     the time specified for action in such notice, Buyer shall inform PCC or the
     Asset Sale Company in writing of how Buyer would elect to vote, whether
     Buyer would grant consent or approval, or how Buyer would elect to act on
     the Partner Matter and PCC shall cause the Asset Sale Company to vote its
     interest as a partner in DTA as Buyer may so instruct, subject to the
     Retained Contract Rights and Section 5.10(b) hereof. Alternatively, at
     Buyer's request, the Asset Sale Company shall appoint a person designated
     by Buyer, in its sole discretion, as the agent of the Asset Sale Company
     (the "Buyer Designee"), pursuant to the Consortium Agreement and the other
     Consortium Documents, to (i) receive all notices regarding Partner Matters,
     (ii) attend or otherwise participate in any meetings of the DTA Partners
     and (iii) vote on Partner Matters, subject to the Retained Contract Rights
     and Section 5.10(b) hereof. Buyer agrees to, or to cause the Buyer Designee
     to: (i) send a copy of each written notice received by the Buyer Designee
     regarding a Partner Matter within two days after receipt of such notice to
     the Asset Sale Company; (ii) when possible, give the Asset Sale Company an
     opportunity to have a representative observe meetings of the DTA partners;
     and (iii) deliver to the Asset Sale Company a written summary of all
     actions taken with respect to a Partner Matter within two days of such
     action. Buyer agrees to indemnify and hold harmless the Pittston
     Indemnified Persons from any and all Adverse Consequences resulting from
     actions by the Asset Sale Company pursuant to this Section 5.10 or by the
     Buyer Designee (as such terms are defined in the Indemnification and
     Guaranty Agreement). On the Closing Date, Buyer shall, and PCC shall cause
     the Asset Sale Company to, enter into the Voting Agreement. The parties
     acknowledge and agree that the Voting Agreement shall be assignable by
     Buyer to a third party Transferee in connection with a Transfer pursuant to
     Section 5.11 or to an Affiliate.

                                       42

          (b) Pursuant to this Asset Purchase Agreement, the Asset Sale Company
     has retained as part of the Retained Contract Rights any and all rights to
     take, and to cause DTA to take or prevent DTA from taking, any action in
     respect of the Retained Contract Rights, the Loan Agreement or the DTA
     Revenue Bonds. In the event Buyer exercises its rights under the Voting
     Agreement, Buyer shall not, and shall not permit DTA to, take any action in
     respect of the Retained Contract Rights, the Loan Agreement, the DTA
     Revenue Bonds, or any other action that creates a Liability for the Asset
     Sale Company related to the DTA Revenue Bonds. Further, Buyer shall not,
     and shall not permit DTA to, breach any provision or covenant contained in
     Sections 2.2(f), 3.2, 6.1, 6.3 and 6.4 of the Loan Agreement.

     5.11. Subsequent Transfer of Purchased Assets.

     If, at any time following the Closing Date, but prior to the time that
Buyer has been admitted (and the Asset Sale Company released) as a full partner
in DTA, Buyer (or any of its Affiliates) desires to sell, assign or otherwise
transfer (a "Transfer") all or any portion of the Purchased Assets to another
Person (the "Transferee"), then Buyer shall provide written notice of such
proposed Transfer to PCC, together with a copy of the most recent financial
statements of such Transferee, which PCC shall agree to keep confidential and
not use for any purpose other than evaluating the creditworthiness of the
Transferee. Provided that the net assets (i.e., total assets minus total
liabilities) of the Transferee as of the date of such most recent financial
statements and as of the date of such Transfer is not less than $25,000,000,
then PCC shall consent to such Transfer and shall, and shall cause the Asset
Sale Company to, take all actions as may be reasonably requested by Buyer to
effect the Transfer and use its commercially reasonable efforts to cause the
Transferee to be admitted as a full partner of DTA (and, in the event the
Transferee is not so admitted as a DTA Partner, to provide the Transferee with
the same rights and benefits as provided to Buyer hereunder in respect of the
Purchased Assets and the Asset Sale Company's partnership interest in DTA,
including without limitation, the rights set forth in the Voting Agreement);
each of Buyer and PCC shall be required to bear its own costs and expenses of
all such actions only in respect of one such Transfer (regardless of whether
such Transfer involves a transfer of all or a portion of Buyer's interest in
DTA), and Buyer shall be required to bear the costs and expenses of all such
actions (and shall reimburse PCC and the Asset Sale Company promptly upon
request for any expense reasonably incurred by them in connection with such
actions) with respect to any additional Transfer of Purchased Assets.

                                       43

                                   ARTICLE VI
                        CONDITIONS PRECEDENT TO CLOSING

     6.1. Conditions Precedent to Each Party's Obligations.

     The respective obligations of each party to consummate the transactions
contemplated by this Agreement are subject to the satisfaction at or prior to
the Closing Date of the following conditions precedent:

          (a) no action, suit, proceeding, order, decree or injunction shall
     have been commenced, threatened or entered by or before any Governmental
     Authority that remains in force and that (i) prohibits, seeks to prohibit,
     or imposes or seeks substantial damages in connection with, the
     consummation of the transactions contemplated by this Agreement, (ii) seeks
     or imposes relief that causes or would cause any of the transactions
     contemplated by this Agreement to be rescinded following consummation, or
     (iii) affects adversely the right of Buyer to own the Purchased Assets or
     to operate the Business on or after the Closing Date;

          (b) PCC Parent, PCC, Buyer and Buyer's Parent shall have executed and
     delivered to each other party thereto the Indemnification and Guaranty
     Agreement and any other documentation required in all transactions
     contemplated or covered by such agreement, in form and substance as set
     forth in Exhibit C attached hereto and the same shall be in full force and
     effect;

                                       44

          (c) All other transactions pursuant to which Buyer or any of its
     Affiliates acquire assets related to the Business shall have been
     consummated prior to or simultaneously with the transactions contemplated
     by this Agreement;

          (d) PCC and Buyer shall have executed and delivered to each other all
     such other documents or instruments necessary or appropriate to effect the
     transactions contemplated by this Agreement; and

          (e) PCC shall have obtained, or caused to have been obtained, the
     consents listed in Schedule 6.1(e)(i) and PCC shall have provided such
     payments and/or assurances as may be reasonably required to obtain all such
     consents. Buyer shall have obtained, or caused to have been obtained, the
     consents listed in Schedule 6.1(e)(ii) and Buyer shall have provided such
     payments, guarantees and/or assurances as may be reasonably required to
     obtain all such consents.

     6.2. Conditions Precedent to Obligations of Buyer.

     The obligations of Buyer to consummate the transactions contemplated by
this Agreement are subject to the satisfaction or waiver at or prior to the
Closing Date of the following conditions precedent:

          (a) all of the representations and warranties of PCC set forth in this
     Agreement or in any Exhibit, Schedule or document delivered pursuant
     hereto, without regard to any qualification or limitation with respect to
     materiality (whether by reference to "Material Adverse Effect" or
     otherwise), shall be true and correct in all respects as of the date hereof
     and at and as of the Closing Date with the same effect as though such
     representations and warranties were made at and as of the Closing unless
     the aggregate failure of such representations or warranties to be true and
     correct does not have a Material Adverse Effect; provided that if a
     representation or warranty is expressly made only as of a specific date, it
     need only be true and correct in all respects as of such date, and Buyer
     shall have received the PCC Closing Certificate required by Section 6.2(g)
     below dated as of the Closing Date executed by PCC to such effect;

          (b) all of the covenants and obligations that PCC is required to
     perform or to comply with pursuant to this Agreement at or prior to the
     Closing Date shall have been duly performed and complied with in all
     material respects;

          (c) all proceedings and actions, corporate or other, to be taken by
     PCC, the Asset Sale Company or PCC Parent in connection with the
     transactions contemplated by this Agreement and all documents incident
     thereto, including all actions necessary to authorize the execution,
     delivery and performance of this Agreement and the transactions
     contemplated hereby, shall have been taken and shall be reasonably
     satisfactory in form and substance to Buyer and Buyer's counsel;

          (d) PCC shall have, and shall have caused the Asset Sale Company to
     have, executed and delivered the Assignment and Assumption Agreements and
     such other documents as may be necessary to convey to Buyer the Purchased
     Assets;

          (e) between the date of this Agreement and the Closing Date, there
     shall not have been a change, event or occurrence that, individually, or
     together with any other change, event or occurrence, has had or could
     reasonably be expected to have a Material Adverse Effect;

          (f) Buyer shall have received an opinion of counsel to PCC addressed
     to Buyer substantially in the form of Exhibit E; and

          (g) Buyer shall have received an executed copy of the PCC Closing
     Certificate.

                                       45

     6.3. Conditions Precedent to Obligations of PCC.

     The obligation of PCC to consummate and cause the consummation of the
transactions contemplated by this Agreement is subject to the satisfaction or
waiver at or prior to the Closing Date of the following conditions precedent:

          (a) all of the representations and warranties of Buyer set forth in
     this Agreement or in any Exhibit, Schedule or document delivered pursuant
     hereto, without regard to any qualification or limitation with respect to
     materiality, shall be true and correct in all respects as of the date
     hereof and at and as of the Closing Date with the same effect as though
     such representations and warranties were made at and as of the Closing
     unless the aggregate failure of such representations or warranties to be
     true and correct does not have a material adverse effect on Buyer's ability
     to consummate the transactions contemplated by this Agreement or fulfill
     its post-Closing obligations hereunder; provided that if a representation
     or warranty is expressly made only as of a specific date, it need only be
     true and correct in all respects as of such date, and PCC shall have
     received Buyer's Closing Certificate required by Section 6.3(g) below dated
     as of the Closing Date executed by Buyer to such effect;

          (b) all of the covenants and obligations that Buyer is required to
     perform or to comply with pursuant to this Agreement at or prior to the
     Closing Date shall have been duly performed and complied with in all
     material respects;

          (c) all proceedings and actions, corporate or other, to be taken by
     Buyer and Buyer's Parent in connection with the transactions contemplated
     by this Agreement, and all documents incident thereto, including all
     actions necessary to authorize the execution, delivery and performance of
     this Agreement and the transactions contemplated hereby, shall have been
     taken and shall be reasonably satisfactory in form and substance to PCC and
     its counsel;

                                       46

          (d) Buyer shall have executed and delivered the Assignment and
     Assumption Agreements (subject to Section 2.7) and such other documents as
     may be necessary for Buyer to assume all of the Assumed Liabilities;

          (e) between the date of this Agreement and the Closing Date, there
     shall not have been a change, event or occurrence that, individually, or
     together with any other change, event or occurrence, has had or could
     reasonably be expected to have a Material Adverse Effect;

          (f) PCC shall have received an opinion of counsel to Buyer addressed
     to PCC substantially in the form of Exhibit F;

          (g) PCC shall have received an executed copy of Buyer's Closing
     Certificate; and

          (h) PCC and PCC Parent shall have been released from all requirements
     and obligations related to the Assumed Liabilities for the period after the
     Closing Date.

                                       47

                                  ARTICLE VII
                               CERTAIN TAX MATTERS

     7.1. Distributive Share of DTA for 2002.

     Within 15 days after Closing, if Buyer has been admitted as a partner in
DTA, PCC and Buyer agree that they shall jointly request DTA to determine each
DTA partner's (including Buyer) 2002 distributive share of any item of income,
gain, loss, deduction or credit of the partnership by not only closing the books
at year end, but also by determining the distributive share of the items noted
as if the books were closed on the Closing Date. The intent under this section
is not to simply allocate such items between PCC and Buyer based upon the number
of days of partnership interest ownership in calendar year 2002.

     7.2. Transfer Taxes.

     All transfer, recording and similar Taxes arising in connection with the
transactions contemplated hereunder shall be borne equally by PCC and Buyer. PCC
and Buyer shall (and they shall cause their respective Affiliates to) cooperate
to comply with all Tax Return requirements for such Taxes and provide such
documentation and take such other actions as may be necessary to minimize the
amount of any such Taxes.

     7.3. Access for Tax Returns.

     Following the Closing Date, Buyer shall, at reasonable times, and in a
manner so as not to interfere with normal business operations, allow PCC (and if
requested by PCC, representatives of federal, state or local agencies) access to
the Purchased Assets for purposes of reviewing information pertinent to any Tax
Return filed by PCC Parent or any of its Affiliates, including the Asset Sale
Company.

                                  ARTICLE VIII
                                   TERMINATION

     8.1. Termination.

                  This Agreement may be terminated prior to the Closing Date
only as follows:

          (a) by mutual written consent of PCC and Buyer;

          (b) by either PCC or Buyer, if the Closing Date shall not have
     occurred prior to the close of business on December 31, 2002 or such later
     date as the parties may agree in writing (provided, that the right to
     terminate this Agreement under this Section 8.1(b) shall not be available
     to any party whose failure to fulfill any obligation under this Agreement
     has been the cause, in whole or in part, of, or has resulted in, the
     failure of the conditions in Article VI to be satisfied and the Closing
     Date to occur on or before such date);

                                       48

          (c) by PCC or Buyer if an action, suit, or proceeding, shall have been
     commenced or threatened by or before any Governmental Authority, or any
     order, decree or injunction shall have been entered therein, that (i)
     prohibits, seeks to prohibit, or imposes or seeks substantial damages in
     connection with, the consummation of the transactions contemplated by this
     Agreement, (ii) seeks or imposes relief that causes or would cause any of
     the transactions contemplated by this Agreement to be rescinded following
     consummation or (iii) affects adversely the right of Buyer to own the
     Purchased Assets or to operate the Business;

          (d) by Buyer if (i) the representations of PCC contained in this
     Agreement are not true and correct in all material respects as if made at
     and as of that time, except for failures to be true and correct that are
     capable of being and are cured within fifteen (15) days after written
     notice from Buyer to PCC of such failure or (ii) PCC has failed to comply
     materially with its respective obligations under this Agreement, except for
     failures to comply that are capable of being and are cured within fifteen
     (15) days after written notice from Buyer to PCC of such failure; or

          (e) by PCC if (i) the representations of Buyer contained in this
     Agreement are not true and correct in all material respects as if made at
     and as of that time, except for failures to be true and correct that are
     capable of being and are cured within fifteen (15) days after written
     notice from PCC to Buyer of such failure or (ii) Buyer has failed to comply
     materially with its obligations under this Agreement, except for failures
     to comply that are capable of being and are cured within fifteen (15) days
     after written notice from the PCC to Buyer of such failure.

     8.2. Effect of Termination.

     If this Agreement is terminated pursuant to Section 8.1 hereof, all further
obligations of the parties under or pursuant to this Agreement shall terminate
without further Liability of either party to the other except: (a) as set forth
in Section 9.4; and (b) for breaches of representations, warranties, or
covenants or for fraud. PCC and Buyer hereby agree that the provisions of this
Section 8.2 and of Section 9.4 shall survive any termination of this Agreement
pursuant to the provisions of this Article VIII.

                                       49

                                   ARTICLE IX
                                  MISCELLANEOUS

     9.1. Entire Agreement.

     This Agreement, the documents referred to herein and to be delivered
pursuant hereto and any other agreement entered into contemporaneously with this
Agreement among PCC, PCC Parent, Buyer and Buyer's Parent or the Affiliates of
any of them constitute the entire agreement between the parties pertaining to
the subject matter hereof, and supersede all prior agreements, understandings,
negotiations and discussions of the parties, whether oral or written, and there
are no warranties, representations or other agreements between the parties in
connection with the subject matter hereof, except as specifically set forth
herein or therein.

     9.2. Amendment.

     This Agreement may be amended by an instrument in writing and signed on
behalf of all of the parties hereto at any time.

     9.3. Extension; Waiver.

     At any time prior to the Closing Date, the parties may (i) extend the time
for the performance of any of the obligations or other acts of the other parties
hereto, (ii) waive any inaccuracies in the representations and warranties
contained herein or in any document, certificate or writing delivered pursuant
hereto or (iii) waive compliance with any of the agreements or conditions
contained herein, other than the conditions contained in Section 6.1(a) hereof
as it relates to the entry of an order in any proceeding by or before a
Governmental Authority. Any agreement on the part of any party to any such
extension or waiver shall be valid only if set forth in an instrument in writing
and signed on behalf of such party.

     9.4. Expenses.

     Whether or not the transactions contemplated by this Agreement are
consummated, each of the parties hereto shall pay the fees and expenses of their
respective counsel, investment bankers, financial advisors, accountants and
other experts and the other expenses incident to the negotiation and preparation
of this Agreement and consummation of the transactions contemplated hereby.

     9.5. Bulk Sales Waiver.

     Buyer hereby waives compliance with all applicable bulk sales Laws.

     9.6. Governing Law.

     This Agreement shall be construed and interpreted according to the Laws of
the Commonwealth of Virginia, without regard to the conflicts of Law rules
thereof.

     9.7. Assignment.

     This Agreement and each party's respective rights hereunder may not be
assigned at any time except as expressly set forth herein without the prior
written consent of the other party, provided that PCC may assign its rights
hereunder to any Affiliate of PCC after the Closing Date without the consent of
Buyer and Buyer may assign its rights hereunder to any Affiliate of Buyer prior
to, at or after the Closing Date without the consent of PCC and, further
provided, that nothing in this Agreement shall prevent a successor in interest
to either party from enforcing the provisions of this Agreement.

                                       50

     9.8. 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, or, in the case of notices pursuant to
Section 5.10 hereof, by confirmed facsimile on the business day transmitted, if
such facsimile transmission was sent prior to 5:00 p.m., 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
party in the manner provided by this Section 9.8:

If to PCC:                    Pittston Coal Company
                              448 N.E. Main Street
                              P.O. Box 5100
                              Lebanon, Virginia 24266
                              Attention: President
                              Facsimile: (276) 889-6160

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
                              Facsimile: (804) 289-9765

                                       51

And a copy to:                Hunton & Williams
                              Riverfront Plaza, East Tower
                              951 East Byrd Street
                              Richmond, Virginia 23219
                              Attention: Louanna O. Heuhsen, Esq.
                              Facsimile: (804) 344-7999

If to Buyer:                  Alpha Terminal Company, LLC
                              c/o Alpha Natural Resources, LLC
                              406 West Main Street
                              Abingdon, Virginia 24212
                              Attention:  Vice President
                              Facsimile:

With a copy to:               First Reserve Corporation
                              411 West Putnam, Suite 109
                              Greenwich, Connecticut  06830
                              Attention: Alex T. Krueger
                              Facsimile:

                              First Reserve Corporation
                              1801 California Street, Suite 4110
                              Denver, Colorado  80202
                              Attention:  Thomas R. Denison
                              Facsimile:

                              Bartlit Beck Herman Palenchar & Scott
                              1899 Wynkoop Street, Suite 800
                              Denver, Colorado  80202
                              Attention:  James L. Palenchar, Esq.
                              Facsimile:

     9.9. Counterparts; Headings.

     This Agreement may be executed in several counterparts, each of which shall
be deemed an original, but such counterparts shall together constitute but one
and the same Agreement. The Table of Contents and Article and Section headings
in this Agreement are inserted for convenience of reference only and shall not
constitute a part hereof.

                                       52

     9.10. Interpretation; Construction.

          (a) Unless the context requires otherwise, all words used in this
     Agreement in the singular number shall extend to and include the plural,
     all words in the plural number shall extend to and include the singular and
     all words in any gender shall extend to and include all genders.

          (b) This Agreement has been fully negotiated by the parties hereto and
     shall not be construed by any Governmental Authority or arbitrator against
     either party as the drafting party.

     9.11. 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.

     9.12. No Reliance.

     No third party is entitled to rely on any of the representations,
warranties and agreements contained in this Agreement and PCC and Buyer assume
no Liability to any third party because of any reliance on the representations,
warranties and agreements of PCC and Buyer contained in this Agreement, other
than Section 5.5 hereof, which are intended to be for the benefit of the Persons
expressly covered thereby and may be enforced by such Persons.

     9.13. Retention of and Access to Records.

     After the Closing Date, Buyer shall retain for a period consistent with
Buyer's record retention policies and practices those books and records relating
to the Asset Sale Company delivered to Buyer. Buyer also shall provide to PCC
and its Affiliates reasonable access thereto, during normal business hours and
on at least three days' prior written notice, to enable them to prepare
financial statements or Tax Returns or deal with Tax audits or litigation. Buyer
shall deliver to PCC at least thirty days written notice prior to the
destruction or other disposal of any such books and records. PCC and its
Affiliates may elect to take delivery of any such books and records that Buyer
intends to destroy or otherwise dispose of and to copy any such books and
records that Buyer intends to keep, all at their own expense.

                                       53

     9.14. Arbitration.

     Any dispute, controversy or claim arising out of or relating to this
Agreement (a "Dispute"), excluding any dispute or disagreement among the parties
concerning the allocation of the Assumed Liabilities, which shall be resolved
pursuant to Section 2.8, or with respect to the Voting Agreement, which shall be
resolved pursuant to the provisions thereof, shall be decided 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 select an arbitrator within fourteen 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 Section 9.14 shall be the exclusive means to
resolve all Disputes.

     IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of the date first above written.

                             PITTSTON COAL COMPANY

                             By:    /s/ Michael D. Brown
                                    -------------------------------
                             Name:  Michael D. Brown
                             Title:         Vice President - Development
                                            and Technical Resources

                             ALPHA TERMINAL COMPANY, LLC

                             By:    /s/ Eddie Neely
                                    -------------------------------
                             Name: Eddie Neely
                             Title:         Vice President

                              PITTSTON COAL COMPANY
                              448 N. E. Main Street
                             Lebanon, Virginia 24266

                                December 13, 2002

Alpha Terminal Company, LLC
c/o Alpha Natural Resources, LLC
406 West Main Street
Abingdon, Virginia 24212

Ladies and Gentlemen:

     Reference is made to the Asset Purchase Agreement (the "Agreement"), dated
as of October 29, 2002, as amended to but not including the date hereof by and
between Pittston Coal Company ("PCC") and Alpha Terminal Company, LLC ("Buyer").
Capitalized terms used herein without definition shall have the meanings
ascribed to them in the Agreement.

     PCC and Buyer desire to amend certain provisions of the Agreement and, in
consideration of the mutual covenants, conditions and agreements set forth
herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:

     1.   Section 1.61 of the Agreement is amended by inserting immediately
          after "November 15, 1992" at the end of Section 1.61 of the Agreement
          with the following:

          ",   and the Fourth Amendment thereto, dated as of June 2, 1994"

     2.   The Schedules to the Agreement are hereby amended and restated in
          their entirety as attached hereto as Exhibit A.

     3.   Except as amended by this letter agreement, the Agreement shall
          continue in full force and effect.

     4.   This letter agreement may be executed in two or more counterparts,
          each of which shall be deemed an original, but all of which together
          shall constitute one and the same instrument. Any executed counterpart
          of this letter agreement or other signature hereto delivered by a
          party by facsimile shall be deemed for all purposes as being good and
          valid execution and delivery of this letter agreement by such party.

Sincerely,

PITTSTON COAL COMPANY

By:      /s/ Michael D. Brown
         -----------------------------------
Name:    Michael D. Brown
Title:   Vice President - Development
         and Technical Resources

ACKNOWLEDGED AND AGREED:

ALPHA TERMINAL COMPANY, LLC

By:      /s/ Eddie Neely
         -----------------------------------
Name:    Eddie Neely
Title:   Vice President

                     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 Parent") and ALPHA TERMINAL
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 Parent owns 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;
         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:

                                       1

                                    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.

                                       2

     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 Parent.

     "Buyer's Parent" shall have the meaning set forth in the preamble to this
Agreement.

     1.7. Buyer's Parent Guaranty.

     "Buyer's 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.

     1.11. Indemnifying Party.

     "Indemnifying Party" shall have the meaning set forth in Section 2.3(b)
hereof.

                                       3

     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.

                                       4

                                   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 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 of the Acquisition Agreement;
          and

               (iv) any failure by PCC or the Asset Sale Company to satisfy the
          Retained Liabilities.

                                       5

          (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):

               (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 on or before the second anniversary of the Closing Date
          for any other matter described in Section 2.1(a)(i) or (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, 3.4 and 3.12 of the Acquisition
     Agreement or (ii) pursuant to Section 2.1(a)(iii), shall not be subject to
     the provisions of paragraph (b) of this Section 2.1.

          (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).

                                       6

     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 thereof);

               (iii) the ownership of the Purchased Assets on or after the
          Closing Date;

               (iv) 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 of the Acquisition Agreement;

                                       7

               (v) any liability that any Pittston Indemnified Person may suffer
          or incur or become subject to as a result of (A) any action taken by
          the Asset Sale Company pursuant to the Voting Agreement; and (B) any
          action taken by the Buyer Designee; and

               (vi) 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.

                                       8

          (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
     2.2(a)(vi), 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)(iii)
     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.

                                       9

          (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.

                                       10

          (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.

     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.

                                       11

     2.5. Exclusivity of Rights and Procedures.

     The parties agree that, except as set forth in Article VII of the
Acquisition Agreement or in any other 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 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 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.

                                       12

          (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, 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.

                                       13

          (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.

     3.2. Buyer's Parent Guaranty.

          (a) Buyer's Parent hereby irrevocably and unconditionally guarantees
     to PCC (the "Buyer's 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 and the
     Acquisition Agreement. Buyer's 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.

                                       14

          (b) Buyer's Parent hereby expressly waives (i) notice of acceptance of
     Buyer's 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 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 Parent. Buyer's Parent acknowledges and agrees
     that its liability under Buyer's 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 Parent hereby waives any and all
     defenses to enforcement of Buyer's 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 Parent represents and warrants to PCC that (i) Buyer's
     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 Parent Guaranty, (iii) Buyer's Parent Guaranty
     is being executed on Buyer's Parent's behalf by a duly authorized
     representative, (iv) Buyer's Parent Guaranty is the legally valid and
     binding obligation of Buyer's Parent enforceable in accordance with its
     terms, and (v) the execution and the delivery of Buyer's 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 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 Parent is a party or by which Buyer's Parent is bound, or any Law
     or any order, judgment, writ, injunction or decree to which Buyer's Parent
     is a party or by which Buyer's 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 Parent or that otherwise relates to Buyer's
     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
     Parent is subject.

                                       15

          (d) Buyer's 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 Parent's liability to the
     Pittston Indemnified Persons under Buyer's 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 Parent Guaranty shall be binding upon Buyer's 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
     Parent Guaranty, Buyer's Parent shall be deemed to include the surviving
     entity in any merger or consolidation involving Buyer's Parent, each of
     whom shall be bound by the provisions of the Buyer's Parent Guaranty and
     this Agreement.

                                       16

                                   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:

                  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

                                       17

                  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:

                  Alpha Terminal 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

                  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 Parent, to it at:

                  Alpha Natural Resources, LLC
                  406 West Main Street
                  Abingdon, Virginia 24212
                  Attention: Vice President

                                       18

                  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.

                                       19

                                   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 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.

                                       20

                                  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 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.

                                       21

     IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the
date first above written.

                          ALPHA TERMINAL COMPANY, LLC,
                          a Delaware limited liability company

                          By:/s/ Eddie Neely
                             ----------------------------------------
                          Name: Eddie Neely
                          Title:   Vice President

                          ALPHA NATURAL RESOURCES, LLC, a Delaware limited
                          liability company

                          By:/s/ Michael J. 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

                                       22

                                   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 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 Maxxim
Rebuild Co., LLC, dated as of October 29, 2002, as amended.

                                       23

                                   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, Paramont Coal Company Virginia, LLC and Alpha Natural
Resources, LLC, dated as of December 132002.

     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, Maxxim Rebuild Co., LLC and Alpha Natural Resources, LLC,
dated as of December 13, 2002.

                            ASSET PURCHASE AGREEMENT

                                 BY AND BETWEEN

                              PITTSTON COAL COMPANY

                                       AND

                             MAXXIM REBUILD CO., LLC

                                October 29, 2002

                                       1

                                                                                                             
ARTICLE I DEFINITIONS............................................................................................1

     1.1.  Administrative Services Agreement.....................................................................1
     1.2.  Affiliate.............................................................................................2
     1.3.  Agreement.............................................................................................2
     1.4.  Asset Sale Companies..................................................................................2
     1.5.  Assignment and Assumption Agreements..................................................................2
     1.6.  Assumed Liabilities...................................................................................2
     1.7.  Bills of Sale.........................................................................................3
     1.8.  Books and Records.....................................................................................3
     1.9.  Business..............................................................................................3
     1.10. Buyer.................................................................................................3
     1.11. Buyer's Affiliates, Successors, Assigns, Lessees or Contractors.......................................3
     1.12. Buyer Closing Certificate.............................................................................4
     1.13. Buyer's Parent........................................................................................4
     1.14. Closing...............................................................................................4
     1.15. Closing Date..........................................................................................4
     1.16. Coal Act..............................................................................................4
     1.17. COBRA.................................................................................................4
     1.18. Code..................................................................................................5
     1.19. Contaminated..........................................................................................5
     1.20. Contracts.............................................................................................5
     1.21. Controlled Group......................................................................................5
     1.22. Cooperation Agreement.................................................................................5
     1.23. CPA Arbitrator........................................................................................5
     1.24. Dispute...............................................................................................5
     1.25. Employee..............................................................................................6
     1.26. Employee Benefit Plans................................................................................6
     1.27. Environment...........................................................................................6
     1.28. Environmental Laws....................................................................................6
     1.29. Environmental Matter..................................................................................7
     1.30. Environmental or Response Action......................................................................7
     1.31. EPA...................................................................................................8
     1.32. Equipment.............................................................................................8
     1.33. ERISA.................................................................................................8
     1.34. ERISA Affiliates......................................................................................8
     1.35. Fiduciary.............................................................................................8
     1.36. Governmental Authority................................................................................8
     1.37. Hazardous Substances..................................................................................9
     1.38. Health and Safety Requirements........................................................................9
     1.39. HIPAA.................................................................................................9
     1.40. Income Tax or Income Taxes............................................................................9
     1.41. Indemnification and Guaranty Agreement...............................................................10

                                       2

     1.42. Intellectual Property................................................................................10
     1.43. IRS..................................................................................................10
     1.44. Knowledge of PCC.....................................................................................10
     1.45. Law..................................................................................................11
     1.46. Lien.................................................................................................11
     1.47. Liability............................................................................................11
     1.48. Material Adverse Effect..............................................................................11
     1.49. Medical Plans........................................................................................11
     1.50. Multiemployer Plan...................................................................................12
     1.51. Ordinary Course of Business..........................................................................12
     1.52. Parts, Fuel and Supplies Inventory...................................................................12
     1.53. PBGC.................................................................................................12
     1.54. PCC..................................................................................................12
     1.55. PCC Closing Certificate..............................................................................12
     1.56. PCC Group............................................................................................12
     1.57. PCC Parent...........................................................................................12
     1.58. Pension Plans........................................................................................12
     1.59. Permitted Liens......................................................................................13
     1.60. Person...............................................................................................13
     1.61. Post-Closing Period..................................................................................13
     1.62. Pre-Closing Period...................................................................................13
     1.63. Purchase Price.......................................................................................13
     1.64. Purchased Assets.....................................................................................13
     1.65. Qualified Plans......................................................................................13
     1.66. Real Property........................................................................................14
     1.67. Related Persons......................................................................................14
     1.68. Release..............................................................................................14
     1.69. Repair Activities....................................................................................14
     1.70. Repair Environmental Liabilities.....................................................................14
     1.71. Retained Liabilities.................................................................................15
     1.72. Straddle Period......................................................................................20
     1.73. Tax or Taxes.........................................................................................20
     1.74. Tax Return...........................................................................................21
     1.75. WARN Act.............................................................................................21
     1.76. Welfare Plans........................................................................................21
     1.77. Workers' Compensation Acts...........................................................................21

ARTICLE II  PURCHASE AND SALE OF ASSETS.........................................................................21

     2.1.  Transfer of Assets...................................................................................21
     2.2.  Bills of Sale, Assignment and Assumption Agreements and Other Documents..............................22
     2.3.  Assumption of Liabilities............................................................................22
     2.4.  Proration of Liabilities.............................................................................22
     2.5.  Indemnification and Guaranty Agreement...............................................................22

                                       3

     2.6.  Cooperation Agreement................................................................................23
     2.7.  Administrative Services Agreement....................................................................23
     2.8.  Additional Documents.................................................................................23
     2.9.  Allocation of Purchase Price and Assumed Liabilities.................................................23

ARTICLE III  REPRESENTATIONS AND WARRANTIES OF PCC..............................................................25

     3.1.  Incorporation........................................................................................25
     3.2.  Execution, Delivery and  Performance.................................................................25
     3.3.  Authorization........................................................................................26
     3.4.  Absence of Changes...................................................................................27
     3.5.  Real Property........................................................................................30
     3.6.  Purchased Assets.....................................................................................31
     3.7.  Intellectual Property................................................................................32
     3.8.  Environmental Compliance.............................................................................32
     3.9.  Contracts............................................................................................34
     3.10. Litigation; Claims...................................................................................35
     3.11. Employee Benefits....................................................................................36
     3.12. Employment Matters...................................................................................40
     3.13. No Broker............................................................................................41
     3.14. Health and Safety Requirements.......................................................................41
     3.15. Restrictions on Business Activities..................................................................42
     3.16. Powers of Attorney...................................................................................42
     3.17. Transactions With Affiliates.........................................................................42
     3.18. Absence of Certain Payments..........................................................................42
     3.19. Warranties...........................................................................................43
     3.20. Disclosure...........................................................................................43

ARTICLE IV  REPRESENTATIONS AND WARRANTIES OF BUYER.............................................................43

     4.1.  Organization.........................................................................................43
     4.2.  Execution, Delivery and Performance..................................................................43
     4.3.  Authorization........................................................................................44
     4.4.  No Broker............................................................................................45
     4.5.  Environmental Compliance.............................................................................45
     4.6.  Financing............................................................................................45
     4.7.  Disclosure...........................................................................................45

ARTICLE V  CERTAIN COVENANTS....................................................................................45

     5.1.  Operation in Ordinary Course.........................................................................45
     5.2.  Compliance with Law..................................................................................46
     5.3.  Cooperation..........................................................................................46
     5.4.  Notices and Consents.................................................................................46
     5.5.  Publicity............................................................................................47
     5.6.  Replacement Bonds; Insurance and Guarantees; Other Filings...........................................48

                                       4

     5.7.  Exclusivity..........................................................................................48
     5.8.  Access...............................................................................................49
     5.9.  Notice of Developments...............................................................................49
     5.10. Further Assurances...................................................................................49

ARTICLE VI  CONDITIONS PRECEDENT TO CLOSING.....................................................................50

     6.1.  Conditions Precedent to Each Party's Obligations.....................................................50
     6.2.  Conditions Precedent to Obligations of Buyer.........................................................51
     6.3.  Conditions Precedent to Obligations of PCC...........................................................53

ARTICLE VII  CERTAIN TAX MATTERS................................................................................54

     7.1.  Property Taxes.......................................................................................54
     7.2.  Sales and Use Taxes..................................................................................56
     7.3.  Transfer Taxes.......................................................................................56
     7.4.  Access for Tax Returns...............................................................................56

ARTICLE VIII  COVENANTS REGARDING EMPLOYEES.....................................................................57

     8.1.  Employees............................................................................................57

ARTICLE IX TERMINATION 57

     9.1.  Termination..........................................................................................57
     9.2. Effect of  Termination................................................................................59

ARTICLE X  MISCELLANEOUS........................................................................................59

     10.1. Entire Agreement.....................................................................................59
     10.2. Amendment............................................................................................59
     10.3. Extension; Waiver....................................................................................59
     10.4. Expenses.............................................................................................60
     10.5. Bulk Sales Waiver....................................................................................60
     10.6. Governing Law........................................................................................60
     10.7. Assignment...........................................................................................60
     10.8. Notices..............................................................................................61
     10.9. Counterparts; Headings...............................................................................62
     10.10. Interpretation; Construction........................................................................62
     10.11. Severability........................................................................................63
     10.12. No Reliance.........................................................................................63
     10.13. Retention of and Access to Records..................................................................63
     10.14. Arbitration.........................................................................................64

                                       5

                                    EXHIBITS

Exhibit A             Administrative Services Agreement
Exhibit B             Assignment and Assumption Agreements
Exhibit C             Bills of Sale
Exhibit D             Buyer Closing Certificate
Exhibit E             Cooperation Agreement
Exhibit F             Indemnification and Guaranty Agreement
Exhibit G             PCC Closing Certificate
Exhibit H             Opinion of Counsel to PCC
Exhibit I             Opinion of Counsel to Buyer

                                       6

                                    SCHEDULES

Schedule 1.4          Asset Sales Companies
Schedule 1.6          Assumed Liabilities
Schedule 1.20         Contracts of Asset Sale Companies
Schedule 1.32(a)      Equipment Owned by Asset Sale Companies
Schedule 1.32(b)      Equipment Leased by Asset Sale Companies
Schedule 1.42(a)      Intellectual Property Owned by the Asset Sale Companies
Schedule 1.42(b)      Intellectual Property Leased by the Asset Sale Companies
Schedule 1.44         Knowledge of PCC
Schedule 1.52         Parts, Fuel and Supplies Inventory
Schedule 1.59         Permitted Liens
Schedule 1.66         Real Property Leases and Subleases
Schedule 1.70         Repair Environmental Liabilities
Schedule 1.71(a)      Retained Liabilities
Schedule 1.71(u)      Excluded Contracts
Schedule 3.1          Foreign States
Schedule 3.2          Conflicts
Schedule 3.4          Absence of Changes
Schedule 3.7          Intellectual Property Exceptions
Schedule 3.8          Environmental Compliance
Schedule 3.9(b)       Contract Exceptions
Schedule 3.9(c)       Consents
Schedule 3.10         Litigation; Claims
Schedule 3.11(a)      Employee Benefit Plans
Schedule 3.16         Powers of Attorney
Schedule 3.17         Transactions with Affiliates
Schedule 3.19         Warranties
Schedule 5.4(a)       PCC Consents
Schedule 5.4(b)       Buyer Consents
Schedule 5.6          PCC Guaranties
Schedule 6.1(e)(i)    PCC Material Consents
Schedule 6.1(e)(ii)   Buyer Material Consents

                                       7

                            ASSET PURCHASE AGREEMENT

     THIS ASSET PURCHASE AGREEMENT is made as of the 29th day of October, 2002,
by and between PITTSTON COAL COMPANY, a Delaware corporation ("PCC"), and MAXXIM
REBUILD Co., LLC, a Delaware limited liability company ("Buyer").

                                    RECITALS

     WHEREAS, PCC owns directly all of the outstanding capital stock of the
corporations listed on Schedule 1.4 (the "Asset Sale Companies");
     WHEREAS, PCC desires to cause to be sold and assigned, and Buyer desires to
purchase and assume, certain of the assets and certain of the Liabilities (as
hereinafter defined) of the Asset Sale Companies;
     WHEREAS, PCC desires to cause the Asset Sale Companies to retain certain
assets and certain Liabilities;
     NOW, THEREFORE, in consideration of the mutual covenants, conditions and
agreements set forth herein and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, PCC and Buyer agree
that:

                                   ARTICLE I
                                  DEFINITIONS

     When used in this Agreement, the following terms shall have the meanings
specified:

     1.1. Administrative Services Agreement.

     "Administrative Services Agreement" shall mean the agreement by and between
PCC and Buyer, substantially in the form of Exhibit A attached hereto.

                                       8

     1.2. Affiliate.

     "Affiliate" shall mean, with respect to a specified Person, another Person
that directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the Person specified. "Control"
shall mean the possession, directly or indirectly, of the power to direct or
cause the direction of the management or policies of a Person, whether through
the ownership of voting securities, by contract or otherwise. For purposes of
this Agreement, none of Dominion Terminal Associates or any of its partners,
other than Pittston Coal Terminal Corporation, shall be deemed an Affiliate of
PCC or any of its Affiliates.

     1.3. Agreement.

     "Agreement" shall mean this Asset Purchase Agreement, together with the
Exhibits and Schedules attached hereto, which are incorporated into this Asset
Purchase Agreement by this reference, as the same may be amended from time to
time in accordance with the terms hereof.

     1.4. Asset Sale Companies.

     "Asset Sale Companies" shall have the meaning given to it in the Recitals
to this Agreement. The term "Asset Sale Company" shall mean one of the Asset
Sales Companies.

     1.5. Assignment and Assumption Agreements.

     "Assignment and Assumption Agreements" shall mean the assignment and
assumption agreements substantially in the form of Exhibit B attached hereto.

     1.6. Assumed Liabilities.

     "Assumed Liabilities" shall mean all Liabilities of the Asset Sale
Companies listed on Schedule 1.6.

                                       9

     1.7. Bills of Sale.

     "Bills of Sale" shall mean the bills of sale substantially in the form of
Exhibit C attached hereto.

     1.8. Books and Records.

     "Books and Records" shall mean the original or true and complete copies of
all of the books and records of the Asset Sale Companies pertaining to the
Purchased Assets, including but not limited to, customer lists, employee records
for those Employees employed by Buyer on or immediately following the Closing
Date, purchase orders and invoices, sales orders and sales order log books,
credit and collection records, plats, drawings and specifications, environmental
reports and studies, correspondence and miscellaneous records with respect to
customers and supply sources, lessors and lessees, equipment maintenance records
and all other general correspondence, records, books and files owned by the
Asset Sale Companies, but excluding any and all Tax Returns, books and records
relating to the Retained Liabilities and corporate records of the Asset Sale
Companies.

     1.9. Business.

     "Business" shall mean the equipment repairing, rebuilding and servicing
business conducted by the Asset Sale Companies using the Purchased Assets.

     1.10. Buyer.

     "Buyer" shall have the meaning given to it in the preamble of this
Agreement.

     1.11. Buyer's Affiliates, Successors, Assigns, Lessees or Contractors.

     "Buyer's Affiliates, Successors, Assigns, Lessees or Contractors" shall
mean Buyer's Affiliates, Buyer's contractual successors and assigns, and lessees
and contractors who, as part of a contractual arrangement with Buyer or one of
its Affiliates, offer employment to the current or former Employees of an Asset
Sale Company.

                                       10

     1.12. Buyer Closing Certificate.

     "Buyer Closing Certificate" shall mean the certificate of Buyer
substantially in the form of Exhibit D attached hereto.

1.13.    Buyer's Parent.

     "Buyer's Parent" shall mean Alpha Natural Resources, LLC, a Delaware
limited liability company.

     1.14. Closing.

     "Closing" shall mean the closing of the transactions contemplated by this
Agreement beginning at 10:00 a.m., local time, on the Closing Date, at the
offices of Hunton & Williams, Riverfront Plaza, East Tower, 951 East Byrd
Street, Richmond, Virginia 23219.

     1.15. Closing Date.

     "Closing Date" shall mean November 30, 2002 or such other date as the
parties may mutually agree in writing.

     1.16. Coal Act.

     "Coal Act" shall mean the Coal Industry Retiree Health Benefit Act of 1992
as amended through the Closing Date (codified at Subtitle J of the Code).

     1.17. COBRA.

     "COBRA" shall mean the Consolidated Omnibus Budget Reconciliation Act of
1986, as amended.

                                       11

     1.18. Code.

     "Code" shall mean the Internal Revenue Code of 1986, as amended, and, where
appropriate, any predecessor or successor provisions of Law, and all regulations
thereunder.

     1.19. Contaminated.

     "Contaminated" shall mean the presence of one or more Hazardous Substances
in such quantity or concentration as to: (i) violate any Environmental Law; (ii)
require disclosure to any Governmental Authority; (iii) require remediation or
removal; (iv) interfere with or prevent the use of any of the Real Property or
Purchased Assets as customarily intended; or (v) create any contribution
Liability to fund the clean up of the Real Property.

     1.20. Contracts.

     "Contracts" shall mean the contracts, agreements, personal and real
property leases, relationships and commitments, written or oral, of the Asset
Sale Companies listed on Schedule 1.20.

     1.21. Controlled Group.

     "Controlled Group" shall have the meaning set forth in Codess.1563.

     1.22. Cooperation Agreement.

     "Cooperation Agreement" shall mean the agreement by and among the PCC
Parent, PCC and Buyer substantially in the form of Exhibit E attached hereto.

     1.23. CPA Arbitrator.

     "CPA Arbitrator" shall have the meaning set forth in Section 2.9 hereof.

     1.24. Dispute.

     "Dispute" shall have the meaning set forth in Section 10.14 hereof.

                                       12

     1.25. Employee.

     "Employee" shall mean any Person (i) employed by and rendering personal
services for an Asset Sale Company or (ii) receiving short-term or long-term
disability benefits from an Asset Sale Company under an Employee Benefit Plan.
The term "current and former Employees" shall mean any Persons who fall within
the term Employee at any time prior to the Closing Date.

     1.26. Employee Benefit Plans.

     "Employee Benefit Plans" shall have the meaning set forth in Section 3.11
hereof.

     1.27. Environment.

     "Environment" shall mean surface or ground water, water supply, soil or the
ambient air.

     1.28. Environmental Laws.

     "Environmental Laws" shall mean collectively, all federal, foreign, state,
and local Laws in effect as of the Closing Date that relate to (a) the
prevention, abatement or elimination of pollution, or the protection of the
environment, including, without limitation, Laws applicable to the generation,
handling, treatment, storage, disposal or transportation of waste materials, (b)
the regulation of or exposure to Hazardous Substances, including, without
limitation, the Comprehensive Environmental Response Compensation and Liability
Act, 42 U.S.C.ss.ss.9601 et. seq., the Solid Waste Disposal Act, as amended by
the Resource Conservation and Recovery Act, as amended, 42 U.S.C.ss.ss.6901 et.
seq., the Clean Air Act, 42 U.S.C.ss.ss.7401 et. seq., the Clean Water Act, 33
U.S.C.ss.ss.1251 et. seq., the Toxic Substances Control Act, 15 U.S.C.ss.ss.2601
et. seq., the Emergency Planning and Community Right to Know Act, 42
U.S.C.ss.ss.11001 et. seq., and any foreign, state, county, municipal, or local
statutes, Laws or ordinances similar or analogous to the federal statutes listed
in this sentence.

                                       13

     1.29. Environmental Matter.

     "Environmental Matter" shall mean any assertion of a violation, claim or
directive by any Governmental Authority or any other Person for personal injury,
damage to property or the Environment, nuisance, contamination or other adverse
effects on the Environment, or for damages or restrictions resulting from or
related to (i) the operation of PCC's or its Affiliates' business or any
predecessor or the ownership, use or operation at or on any real property or
other assets owned, operated or leased by PCC or its Affiliates or any
predecessor; or (ii) the existence or the continuation of a Release of, or
exposure to, or the transportation, storage or treatment of any Hazardous
Substance into the Environment from or related to any real property or assets
currently or formerly owned, operated or leased by PCC or its Affiliates or any
activities on or operations thereof.

     1.30. Environmental or Response Action.

     "Environmental or Response Action" shall mean all actions required (i) to
clean up, remove, treat or in any other way address any Hazardous Substance or
other substance; (ii) to prevent the Release or threat of Release, or minimize
the further Release of any Hazardous Substance or other substance so it does not
migrate or endanger or threaten to endanger public health or welfare or the
indoor or outdoor Environment; (iii) to perform pre-remedial studies and
investigations or post-remedial monitoring and care; (iv) to bring facilities on
any real property currently or formerly owned, operated or leased by PCC or its
Affiliates and the facilities located and operations conducted thereon into
compliance with all Environmental Laws and all permits and other authorizations,
and the filing of all notifications and reports required under any Environmental
Laws; or (v) for the purpose of environmental protection of any real property
currently or formerly owned, operated or leased by PCC or its Affiliates.

                                       14

     1.31. EPA.

     "EPA" shall have the meaning set forth in Section 3.8 hereof.

     1.32. Equipment.

     "Equipment" shall mean the tangible machinery, vehicles, equipment,
furniture, fixtures, furnishings, trailers, tools, parts and other personal
property owned or leased by the Asset Sale Companies listed on Schedules 1.32(a)
and 1.32(b), respectively.

     1.33. ERISA.

     "ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended.

     1.34. ERISA Affiliates.

     "ERISA Affiliates" shall mean any trade or business (whether or not
incorporated) that is part of the same Controlled Group as, or under common
control with, or part of an affiliated service group that includes, PCC and each
of the Asset Sale Companies within the meaning of Section 414(b), (c), (m) or
(o) of the Code.

     1.35. Fiduciary.

     "Fiduciary" shall have the meaning set forth in ERISA ss.3(21)

     1.36. Governmental Authority.

     "Governmental Authority" shall mean any governmental, judicial,
legislative, executive, administrative or regulatory authority of the United
States, or of any foreign, state or local government or any subdivision, agency,
commission, office, authority or bureau thereof or any quasi-governmental entity
or authority of any nature.

                                       15

     1.37. Hazardous Substances.

     "Hazardous Substances" shall mean any substance, chemical, waste, solid,
material, pollutant or contaminant that is defined or listed as hazardous or
toxic under any applicable Environmental Laws. Without limiting the generality
of the foregoing it shall also include any radioactive material, including any
naturally-occurring radioactive material, and any source, special or by-product
material as defined in 42 U.S.C. 2011, et seq., any amendments or authorizations
thereof, any asbestos-containing materials in any form or condition, any
polychlorinated biphenyls in any form or condition, radioactive waste, or
natural gas, natural gas liquids, liquified natural gas, condensate, or
derivatives or byproducts thereof or oil and petroleum products or by products
and constituents thereof.

     1.38. Health and Safety Requirements.

     "Health and Safety Requirements" shall mean all applicable federal, state,
local and foreign Laws concerning public health and safety and worker health and
safety each as in effect as of the Closing Date, other than Environmental Laws.

     1.39. HIPAA.

     "HIPAA" shall mean the Health Insurance Portability and Accountability Act
of 1996, as amended, and all rules and regulations thereunder.

     1.40. Income Tax or Income Taxes.

     "Income Tax or "Income Taxes" shall mean any Tax based on or measured by
net income.

                                       16

     1.41. Indemnification and Guaranty Agreement.

     "Indemnification and Guaranty Agreement" shall mean the agreement by and
among PCC Parent, PCC, Buyer and Buyer's Parent substantially in the form of
Exhibit F attached hereto.

     1.42. Intellectual Property.

     "Intellectual Property" shall mean the trademarks, service marks, patents,
copyrights (including any registrations, applications, licenses or rights
relating to any of the foregoing), technology, logos, trade secrets,
confidential information related to the Purchased Assets, inventions, know-how,
designs, technical data, drawings, customer and supplier lists, pricing and cost
information, or computer programs and processes and all goodwill associated
therewith and rights thereunder, remedies against infringements thereof, and
rights to protection of interests therein under the laws of all jurisdictions
owned or licensed or leased by the Asset Sale Companies listed on Schedules
1.42(a) and 1.42(b), respectively, including, without limitation, the
trademarks, service marks, logos or other rights related to the name "Maxxim."

     1.43. IRS.

     "IRS" shall mean the United States Internal Revenue Service.

     1.44. Knowledge of PCC.

     "Knowledge of PCC" shall mean, for the individuals listed on Schedule 1.44,
any such individual's actual knowledge and what any such individual should have
known after reasonable inquiry within the scope of that individual's job
responsibilities.

                                       17

     1.45. Law.

     "Law" and "Laws" shall mean any applicable United States or foreign,
federal, state, local or other law or governmental requirement of any kind, and
the rules, regulations and orders promulgated thereunder.

     1.46. Lien.

     "Lien" shall mean any lien, encumbrance, mortgage, charge, claim,
restriction, pledge, security interest or imposition of any kind.

     1.47. Liability.

     "Liability" shall mean any liability or obligation (whether known or
unknown, whether asserted or unasserted, whether absolute or contingent, whether
liquidated or unliquidated and whether due or to become due), including any
liability for Taxes. Liabilities shall mean one or more items of Liability.

     1.48. Material Adverse Effect.

     "Material Adverse Effect" shall mean any event, change or occurrence that
individually, or together with any other event, change or occurrence, has a
material adverse impact on the Business, taken as a whole, without regard to the
duration of such material adverse impact.

     1.49. Medical Plans.

     "Medical Plans" shall mean any and all benefit plans that provide medical,
vision and dental benefits to current or former Employees sponsored or
maintained by or on behalf of, or for the benefit of, PCC or any Asset Sale
Company, including the Comprehensive Medical Expense Benefits Plan of The
Pittston Company and Its Subsidiaries.

                                       18

     1.50. Multiemployer Plan.

     "Multiemployer Plan" shall have the meaning set forth in Section 3.11
hereof.

     1.51. Ordinary Course of Business.

     "Ordinary Course of Business" means the ordinary course of business
consistent with past custom and practice (including with respect to quantity and
frequency).

     1.52. Parts, Fuel and Supplies Inventory.

     "Parts, Fuel and Supplies Inventory" shall include the categories of items
listed on Schedule 1.52.

     1.53. PBGC.

     "PBGC" shall mean the Pension Benefits Guaranty Corporation.

     1.54. PCC.

     "PCC" shall have the meaning given to it in the preamble to this Agreement.

     1.55. PCC Closing Certificate.

     "PCC Closing Certificate" shall mean the certificate of PCC substantially
in the form of Exhibit G attached hereto.

     1.56. PCC Group.

     "PCC Group" shall have the meaning set forth in Section 1.71(i) hereof.

     1.57. PCC Parent.

     "PCC Parent" shall mean The Pittston Company, a Virginia corporation.

     1.58. Pension Plans.

     "Pension Plans" shall have the meaning set forth in Section 3.11 hereof.

                                       19

     1.59. Permitted Liens.

     "Permitted Liens" shall mean those Liens affecting the Purchased Assets
that are listed on Schedule 1.59.

     1.60. Person.

     "Person" shall mean any individual, corporation, general or limited
partnership, limited liability company, joint venture, estate, trust,
association, organization, labor union or other entity or Governmental
Authority.

     1.61. Post-Closing Period.

                  "Post-Closing Period" shall mean any taxable period beginning
after the Closing Date.

     1.62. Pre-Closing Period.

     "Pre-Closing Period" shall mean any taxable period ending on or before the
Closing Date.

     1.63. Purchase Price.

     "Purchase Price" shall mean $3,000,000.

     1.64. Purchased Assets.

     "Purchased Assets" shall mean all right, title and interest in and to the
Parts, Fuel and Supplies Inventory, Equipment, Books and Records, Real Property
and Intellectual Property of the Asset Sale Companies and the rights of the
Asset Sale Companies with respect to the Contracts.

     1.65. Qualified Plans.

     "Qualified Plans" shall have the meaning set forth in Section 3.11 hereof.

                                       20

     1.66. Real Property.

     "Real Property" shall mean the real property rights and interests leased or
subleased by the Asset Sale Companies and any improvements, fixtures, easements,
rights of way and other appurtenants thereto (such as appurtenant rights in and
to public streets) that are listed on Schedule 1.66.

     1.67. Related Persons.

     "Related Persons" shall mean related persons as that term is defined in
Section 9701(c)(2) of the Coal Act, except that it shall not include successors
in interest.

     1.68. Release.

     "Release" shall mean any spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, dumping or disposing into the
Environment of Hazardous Substances.

     1.69. Repair Activities.

     "Repair Activities" shall mean those activities of the Asset Sale Companies
that have taken place on or through the use of the Purchased Assets that involve
equipment repairing, rebuilding and servicing.

     1.70. Repair Environmental Liabilities.

     "Repair Environmental Liabilities" shall mean Liabilities that relate to or
arise from both of the following: (i) any of the Hazardous Substances set forth
on Schedule 1.70 and (ii) an Environmental Matter or Environmental and Response
Action associated with Repair Activities to the extent that such Repair
Activities conformed to industry standard practices at the time such Repair
Activities were conducted.

                                       21

     1.71. Retained Liabilities.

     "Retained Liabilities" shall mean all of the Liabilities of each Asset Sale
Company, other than the Assumed Liabilities, including, without limitation, the
following:

          (a) the Liabilities listed on Schedule 1.71(a);

          (b) all Liabilities arising under applicable Workers' Compensation
     Acts for or based upon the employment of (i) the current and former
     Employees of the Asset Sale Companies who are not hired by Buyer or one of
     Buyer's Affiliates, Successors, Assigns, Lessees or Contractors, and (ii)
     the current and former Employees of the Asset Sale Companies who are hired
     by Buyer or one of Buyer's Affiliates, Successors, Assigns, Lessees or
     Contractors, but only with respect to claims where the date of injury or
     the date of last injurious exposure occurred prior to the date such
     Employees began working for Buyer or one of Buyer's Affiliates, Successors,
     Assigns, Lessees or Contractors;

          (c) all Liabilities arising under the federal black lung Laws for or
     based upon the employment of (i) the current and former Employees of the
     Asset Sale Companies who are not hired by Buyer or one of Buyer's
     Affiliates, Successors, Assigns, Lessees or Contractors and (ii) the
     current and former Employees of the Asset Sale Companies who are hired by
     Buyer or one of Buyer's Affiliates, Successors, Assigns, Lessees or
     Contractors, to the extent and in the amounts provided in the federal black
     lung Laws, but only until such time as Buyer or one of Buyer's Affiliates,
     Successors, Assigns, Lessees or Contractors becomes the responsible
     operator under the federal black lung Laws for such Employees;

          (d) all Liabilities for medical, vision, dental and other benefits and
     expenses covered under the Medical Plans including related insurance costs
     or premiums for or based upon the employment of (i) the current and former
     Employees of the Asset Sale Companies who are not hired by Buyer or one of
     Buyer's Affiliates, Successors, Assigns, Lessees or Contractors, (ii) the
     current or former Employees of the Asset Sale Companies who are hired by
     Buyer or one of Buyer's Affiliates, Successors, Assigns, Lessees or
     Contractors, but only with respect to the period prior to the date such
     Employees began working for Buyer or one of Buyer's Affiliates, Successors,
     Assigns, Lessees or Contractors and (iii) in either case, all such
     Liabilities under COBRA, HIPAA and other Laws, including all Liabilities of
     a Fiduciary for breach of fiduciary duty or any other failure to act or
     comply in connection with the administration of such Medical Plans;

                                       22

          (e) unless such Liabilities are otherwise retained pursuant to Section
     1.71(i) hereof, all Liabilities arising under or based upon the Employee
     Benefit Plans sponsored or maintained by, on behalf of or for the benefit
     of the Asset Sale Companies or its Employees or in which the Asset Sale
     Companies participated (other than the Medical Plans), including all
     Liabilities arising from or related to the termination thereof or
     Liabilities of a Fiduciary for breach of fiduciary duty or any other
     failure to act or comply in connection with the administration or
     investment of the assets of any such Employee Benefit Plan;

          (f) all Liabilities for salaries, wages, bonuses, vacation days,
     personal days and similar forms of leave or compensation for or based upon
     the employment of (i) the current and former Employees of the Asset Sale
     Companies who are not hired by Buyer or one of Buyer's Affiliates,
     Successors, Assigns, Lessees or Contractors, and (ii) the current and
     former Employees of the Asset Sale Companies who are hired by Buyer or one
     of Buyer's Affiliates, Successors, Assigns, Lessees or Contractors, that
     are accrued, due or earned up to the date such Employees began working for
     Buyer or one of Buyer's Affiliates, Successors, Assigns, Lessees or
     Contractors and for which such Employees are eligible;

                                       23

          (g) all Liabilities for accounts payable for which goods have been
     shipped and delivered (whether or not invoiced) or services have been
     performed (whether or not invoiced) and related notes, trade payables and
     earned royalties, to the extent that an Asset Sale Company received a
     benefit before the Closing Date;

          (h) all Liabilities for claims of any current or former Employees
     pursuant to the WARN Act arising out of acts or omissions of the Asset Sale
     Companies prior to and including the Closing Date;

          (i) (1) all Liabilities, if any, of any Asset Sale Company and its
     Related Persons (collectively, the "PCC Group") under the Coal Act, and (2)
     all Liabilities, if any, of the PCC Group under any post-Closing amendments
     to the Coal Act for (i) beneficiaries eligible under the Coal Act who are
     assigned to a member of the PCC Group or for whom a member of the PCC Group
     is required to provide or pay for medical benefits pursuant to Sections
     9711 or 9712 of the Coal Act or (ii) death benefit premiums or unassigned
     beneficiary premiums (as those terms are used in Sections 9704(c) and
     9704(d) of the Coal Act) for beneficiaries eligible under the Coal Act,
     that are assessed against any member of the PCC Group; provided, for the
     avoidance of doubt, that the Liabilities retained pursuant to (1) and (2)
     above shall -------- not be affected by Buyer or any of its Affiliates
     being identified under the Coal Act or any post-Closing amendments thereto
     as a successor, successor in interest or "Related person" under the Coal
     Act or any post-Closing amendments thereto to any member of the PCC Group
     solely as a result of Buyer's purchase of the Purchased Assets;

                                       24

          (j) unless such Liabilities are otherwise retained pursuant to Section
     1.71(i) hereof, all Liabilities, if any, of such Asset Sale Company for
     retiree medical benefits with respect to current or former Employees of
     such Asset Sale Company (and their eligible dependents and beneficiaries)
     who, on or prior to the Closing Date, satisfy the requirements for retiree
     medical benefits under any Employee Benefit Plan in which such Asset Sale
     Company participates;

          (k) all Liabilities relating to assets held in trust under any
     Qualified Plan sponsored or maintained by, on behalf of or for the benefit
     of such Asset Sale Company or its current or former Employees or in which
     such Asset Sale Company participates arising or relating to the period
     prior to the Closing Date;

          (l) all inter-company indebtedness owed by any Asset Sale Company to
     the PCC Parent or any of the PCC Parent's Affiliates;

          (m) all Liabilities arising out of or in connection with compliance
     prior to the Closing Date with Health and Safety Requirements pertaining to
     the Purchased Assets, and all Liabilities arising out of or in connection
     with compliance with all Laws relating to equal employment opportunity,
     employment, or labor relations concerning the employment of any Employee by
     the Asset Sale Companies, or relating to any other action taken or not
     taken by the Asset Sale Companies concerning (i) the current and former
     Employees of the Asset Sale Companies who are not hired by Buyer or one of
     Buyer's Affiliates, Successors, Assigns, Lessees or Contractors, and (ii)
     the current and former Employees of the Asset Sale Companies who are hired
     by Buyer or one of Buyer's Affiliates, Successors, Assigns, Lessees or
     Contractors, but only with respect to matters arising out of the employment
     of such Employees by the Asset Sale Companies;

                                       25

          (n) except as set forth on Schedule 1.6, all Liabilities for the
     claims, legal actions, suits, litigation, arbitrations, disputes or
     investigations listed on Schedules 3.8 and 3.10;

          (o) all Liabilities of any of the Asset Sale Companies for unpaid
     Taxes with respect to any Tax year or portion thereof ending on or before
     the Closing Date or for any Tax year beginning before and ending after the
     Closing Date to the extent allocable to the portion of such period
     beginning before and ending on the Closing Date (to the extent of any
     inconsistencies with Article VII hereof, Article VII shall be controlling);

          (p) all amounts payable as the result of the consummation of the
     transactions contemplated by this Agreement that arise due to any change of
     control provision of any Contract other than those Contracts listed on
     Schedule 5.4(b);

          (q) all Liabilities of any of the Asset Sale Companies for the unpaid
     Taxes of any Person (including PCC and its subsidiaries) under Reg.
     ss.1.1502-6 (or any similar provision of state, local, or foreign law), as
     a transferee or successor, by contract, or otherwise;

          (r) all Liabilities for any Environmental Matter or Environmental or
     Response Action related to real property or any other asset owned, operated
     or leased by PCC or any of its Affiliates that is not a Purchased Asset
     (except to the extent otherwise provided any other agreement entered into
     contemporaneously with this Agreement pursuant to which reclamation and
     other services are to be performed on PCC's or its Affiliates' idle
     properties);

                                       26

          (s) all Liabilities for any Environmental Matter or Environmental or
     Response Action (other than Repair Environmental Liabilities) to the extent
     the underlying claim relates to or arises from any activity on or through
     the use of the Purchased Assets and is attributable to acts or omissions
     occurring at or prior to the Closing;

          (t) all Liabilities of PCC that become a Liability of Buyer under any
     bulk transfer Law of any jurisdiction; and

          (u) all Liabilities under the contracts, agreements, personal and real
     property leases, relationships and commitments of the Asset Sale Companies
     listed on Schedule 1.71(u)

     1.72. Straddle Period.

     "Straddle Period" shall mean any taxable period covering days before and
after the Closing Date.

     1.73. Tax or Taxes.

     "Tax" or "Taxes" mean any federal, state, local, or foreign income, gross
receipts, license, payroll, employment, excise, severance, stamp, occupation,
premium, windfall profits, environmental (including taxes under Code ss.59A),
custom duties, capital stock, franchise, profits, withholding, social security
(or similar), unemployment, disability, real property, personal property, sales,
use, transfer, registration, value added, alternative or add-on minimum,
estimated, reclamation fees or other tax of any kind whatsoever, including any
interest, penalty, or addition thereto, whether disputed or not, but shall not
include, for purposes of this Agreement only, Liabilities under the Coal Act, of
whatever nature and regardless of how denominated.

                                       27

     1.74. Tax Return.

     "Tax Return" shall mean any original or amended report, return,
declaration, claim for refund, statement, document, schedule, attachment or
other information supplied or required to be supplied to a Governmental
Authority with respect to Taxes, including any return of an affiliated, combined
or unitary group.

     1.75. WARN Act.

     "WARN Act" shall mean the Worker Adjustment and Retraining Notification
Act, as amended.

     1.76. Welfare Plans.

     "Welfare Plans" shall have the meaning set forth in Section 3.11 hereof.

     1.77. Workers' Compensation Acts.

     "Workers' Compensation Acts" shall mean Laws that provide for awards to
employees and their dependents for employment-related accidents and diseases.

                                   ARTICLE II
                           PURCHASE AND SALE OF ASSETS

     2.1. Transfer of Assets.

     On the Closing Date, PCC (on behalf of the Asset Sale Companies) shall
cause to be sold, conveyed, transferred, assigned, and delivered to Buyer, and
Buyer shall acquire, the Purchased Assets. At the Closing, subject to the terms
and conditions of this Agreement, PCC agrees to: (i) cause title to the
Purchased Assets to be transferred and delivered to Buyer; and (ii) perform its
obligations under this Agreement to be performed at or before Closing. In full
payment for the Purchased Assets, Buyer shall: (i) assume the Assumed
Liabilities; (ii) pay to PCC (which shall receive such amounts on behalf of the
Asset Sale Companies) the Purchase Price by wire transfer of cash or other
immediately available funds; and (iii) perform its obligations under this
Agreement to be performed at or before Closing. Buyer shall not assume or have
any responsibility with respect to any Liability of PCC Parent, PCC, the PCC
Group or the Asset Sale Companies that is not an Assumed Liability.

     2.2. Bills of Sale, Assignment and Assumption Agreements and Other
Documents.

     At the Closing, PCC shall cause each of the Asset Sale Companies to: (i)
execute and deliver to Buyer the Bills of Sale, the Assignment and Assumption
Agreements and such other documents as may be necessary to convey to Buyer the
Purchased Assets; and (ii) perform its obligations under the Agreement to be
performed at or before the Closing.

     2.3. Assumption of Liabilities.

     At the Closing, Buyer shall execute and deliver to PCC the Assignment and
Assumption Agreements and such other documents and instruments as may be
necessary for Buyer to assume all of the Assumed Liabilities. Buyer shall not
assume or have any responsibility, however, with respect to any Liability of PCC
Parent, PCC, the PCC Group or the Asset Sale Companies that is not an Assumed
Liability.

     2.4. Proration of Liabilities.

     PCC and Buyer shall cooperate with each other to provide for payments due
with respect to the Assumed Liabilities and the Retained Liabilities during the
payment period in which the Closing occurs with all such Liabilities prorated as
of the Closing Date, if applicable.

     2.5. Indemnification and Guaranty Agreement.

     At the Closing, PCC, PCC Parent, Buyer's Parent and Buyer shall execute and
deliver the Indemnification and Guaranty Agreement.

                                       28

     2.6. Cooperation Agreement.

     At the Closing, PCC and Buyer shall, and PCC shall cause PCC Parent to,
execute and deliver the Cooperation Agreement pursuant to which Buyer, PCC
Parent and PCC shall provide each other certain information and other assistance
in connection with the collection, administration and/or satisfaction of certain
of the Retained Liabilities.

     2.7. Administrative Services Agreement.

     At the Closing, PCC and Buyer shall execute and deliver the Administrative
Services Agreement pursuant to which PCC or one of its Affiliates will provide
certain services to Buyer and the Asset Sale Companies for a transition period.

     2.8. Additional Documents.

     At the Closing, PCC and Buyer shall, and PCC shall cause the Asset Sale
Companies to, execute and deliver all such other documents or instruments
necessary or appropriate to effect the transactions contemplated by this
Agreement, including the documents provided in Section 5.6 hereof and in this
Article II.

                                       29

     2.9. Allocation of Purchase Price and Assumed Liabilities.

     The Purchase Price and the Assumed Liabilities (to the extent they
constitute part of the amount realized for federal Income Tax purposes) shall be
allocated among the Purchased Assets in accordance with a schedule to be agreed
upon by Buyer and PCC after the Closing Date. Buyer shall prepare such
allocation schedule and deliver it to PCC upon a date to be agreed upon between
the parties, which date shall be no later than 60 days after the Closing Date.
PCC shall be deemed to agree with such allocation schedule unless, within ten
(10) days after the date PCC receives the allocation schedule from Buyer, PCC
notifies Buyer in writing of (i) each allocation with which it disagrees and
(ii) for each such allocation, the amount that PCC proposes to allocate. If PCC
provides such notice to Buyer, the parties shall proceed in good faith to
resolve mutually the disputed allocation amounts within fifteen (15) days after
the date on which PCC notifies Buyer of a disagreement with Buyer's proposed
allocation. If PCC and Buyer cannot resolve any such differences, the parties
agree to submit such differences to arbitration in Abingdon, Virginia, by the
accounting firm of Deloitte & Touche, LLP or another accounting firm acceptable
to both parties (the "CPA Arbitrator"). The CPA Arbitrator shall make such
review and examination of the relevant facts and documents as the CPA Arbitrator
deems appropriate and shall permit each of Buyer and PCC to make a written
presentation of their respective positions. Within forty-five (45) days after
submission of such dispute by both parties, the CPA Arbitrator shall resolve
such dispute in writing and shall prepare and deliver its decision, which shall
(i) be based upon a determination of the fair market value of the Purchased
Assets, (ii) defer to valuations that have been prepared in accordance with
generally accepted valuation techniques absent manifest error, (iii) be final
and binding upon the parties without further recourse or collateral attack and
(iv) accept either Buyer's or PCC's position in its entirety. The party whose
position is not accepted by the CPA Arbitrator shall pay all fees and costs of
such CPA Arbitrator to arbitrate such dispute. The allocation schedule shall
include, at a minimum, information necessary to complete Part II of IRS Form
8594. The allocation to the Purchased Assets is intended to comply with the
requirements of Section 1060 of the Code. The parties shall cooperate to comply
with all substantive and procedural requirements of Section 1060, and except for
any adjustment to the Purchase Price hereunder, after the completion and
agreement by the parties to the allocation schedule, such allocation schedule
shall be adjusted only if and to the extent necessary to comply with such
requirements of Section 1060. Buyer and PCC agree that they will not take nor
will they permit any Affiliate to take, for Income Tax purposes, any position
inconsistent with such allocation schedule to the Purchased Assets; provided,
however, that (i) Buyer's cost for the Purchased Assets may differ from the
total amount allocated hereunder to reflect the inclusion in the total cost of
items (for example, capitalized acquisition costs) not included in the total
amount so allocated and (ii) the amount realized by the Asset Sale Companies may
differ from the total amount allocated hereunder to reflect transaction costs
that reduce the amount realized for federal Income Tax purposes.

                                       30

                                  ARTICLE III
                      REPRESENTATIONS AND WARRANTIES OF PCC

     PCC hereby represents and warrants to Buyer that the statements contained
in this Article III are correct and complete, except as set forth in the
Schedules delivered by PCC to Buyer in connection with this Agreement. The
Schedules are arranged in paragraphs corresponding to the lettered and numbered
paragraphs contained in this Article III.

     3.1. Incorporation.

     PCC and each of the Asset Sale Companies are corporations duly organized,
validly existing and in good standing under the Laws of the respective state or
commonwealth of each such company's incorporation. PCC and each of the Asset
Sale Companies are duly qualified or licensed to transact business as foreign
corporations in Virginia and are in good standing under the laws of Virginia.
Set forth on Schedule 3.1 is the name of each state or other jurisdiction in
which each such company has either paid taxes or had an office in the three
years prior to the date of this Agreement.

     3.2. Execution, Delivery and Performance.

     The execution, delivery and performance by PCC of this Agreement and by PCC
and the applicable Asset Sale Company of each other agreement or instrument to
which it is a party executed in connection herewith or delivered pursuant hereto
and the consummation of the transactions contemplated herein and therein will
not, with or without the giving of notice or the passage of time, or both: (i)
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 PCC's or any Asset Sale Company's Articles of Incorporation or
Bylaws or of any material franchise, mortgage, deed of trust, Lien, lease,
license, instrument, agreement, consent, approval, waiver or understanding to
which PCC or any Asset Sale Company is a party or by which any Asset Sale
Company is bound, or any Law or any order, judgment, writ, injunction or decree
to which PCC or any Asset Sale Company is a party or by which PCC, any Asset
Sale Company or the Purchased Assets may be bound or affected; (ii) 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 issued by a Governmental Authority that is held by
PCC or the Asset Sale Companies or that otherwise relates to the Purchased
Assets; or (iii) 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 PCC or any Asset Sale Company is
subject.

                                       31

     3.3. Authorization.

     PCC has full power and authority to enter into and deliver this Agreement
and to perform its obligations hereunder and each of PCC and the Asset Sale
Companies has full power and authority to enter into and deliver each other
agreement or instrument to which it is a party executed in connection herewith
and delivered pursuant hereto and to perform its obligations thereunder. PCC's
execution, delivery and performance of this Agreement and the execution,
delivery and performance of all other agreements and instruments by PCC and each
of the Asset Sale Companies in connection herewith and delivered pursuant hereto
and the transactions contemplated hereby have been duly authorized by all
requisite corporate action on the part of PCC and each of the Asset Sale
Companies. This Agreement and all other agreements or instruments executed by
PCC or any of the Asset Sale Companies in connection herewith and delivered by
PCC or any of the Asset Sale Companies pursuant hereto have been duly executed
and delivered by PCC or any such Asset Sale Companies and this Agreement and all
other agreements and instruments executed by PCC or any of the Asset Sale
Companies in connection herewith and delivered by PCC or any of the Asset Sale
Companies pursuant hereto constitute the legal, valid and binding obligation of
PCC or such Asset Sale Company, as the case may be, enforceable in accordance
with their respective terms (subject to any applicable bankruptcy, insolvency,
reorganization, moratorium or other similar Laws affecting generally the
enforcement of creditors' rights).

     3.4. Absence of Changes.

     Except as contemplated by this Agreement, since December 31, 2001, none of
the Asset Sale Companies has, with respect to the Purchased Assets:

          (a) borrowed or agreed to borrow any funds or incurred, or become
     subject to, any Liability, or issued any note, bond or other debt security,
     or guaranteed any indebtedness for borrowed money or capitalized lease
     obligation, except Liabilities incurred in the Ordinary Course of Business,
     none of which would reasonably be expected to result in an impact greater
     than $100,000;

          (b) paid any Liability other than current Liabilities in the Ordinary
     Course of Business;

                                       32

          (c) sold, transferred or otherwise disposed of, or agreed to sell,
     transfer or otherwise dispose of any of the Real Property, Equipment, or,
     other than in the Ordinary Course of Business, any other Purchased Assets
     or cancelled or otherwise terminated, or agreed to cancel or otherwise
     terminate, other than in the Ordinary Course of Business, any licenses,
     franchises, certificates, concessions and other governmental approvals and
     authorizations;

          (d) except in the Ordinary Course of Business, entered into any
     agreement, contract, lease or license (or series of related agreements,
     contracts, leases and licenses) or made or permitted any material amendment
     to or termination, acceleration, modification or cancellation of any
     Contract or breached any provision of any Contract;

          (e) merged or consolidated with any other Person;

          (f) mortgaged, pledged or subjected to any Lien any of its assets or
     properties, other than Permitted Liens;

          (g) made any capital expenditure (or series of related capital
     expenditures) either (x) involving more than $100,000 or (y) outside the
     Ordinary Course of Business;

          (h) made any capital investment in, any loan to, or any acquisition of
     the securities or assets of, any other Person (or series of related capital
     investments, loans and acquisitions) either (x) involving $100,000 or (y)
     outside the Ordinary Course of Business;

          (i) delayed or postponed the payment of accounts payable and other
     Liabilities outside the Ordinary Course of Business;

                                       33

          (j) cancelled, compromised, waived or released any right or claim (or
     series of related rights and claims) either (x) involving more than
     $100,000 or (y) outside the Ordinary Course of Business;

          (k) made any loan to, or entered into any other transaction with, any
     of the directors, officers and employees of such Asset Sale Company outside
     the Ordinary Course of Business;

          (l) entered into any employment contract or collective bargaining
     agreement, written or oral, or modified the terms of any existing such
     contract;

          (m) except in the Ordinary Course of Business adopted, amended,
     modified or terminated any bonus, profit-sharing, incentive, severance or
     other plan, contract or commitment for the benefit of any of the directors,
     officers and Employees of the Asset Sale Companies, or taken any such
     action with respect to any other Employee Benefit Plan;

          (n) made any other change in employment terms for any of the
     directors, officers and Employees of the Asset Sale Companies outside the
     Ordinary Course of Business;

          (o) suffered any damage, destruction or loss, whether or not covered
     by insurance, that has had or would reasonably be expected to have a
     Material Adverse Effect;

          (p) implemented or adopted any change in its accounting methods or
     principles or the application thereof; or

          (q) entered into any agreement, arrangement or understanding with
     respect to any of the foregoing.

                                       34

     3.5. Real Property

          (a) Schedule 1.66 identifies the leases and subleases that comprise a
     portion of the Real Property. PCC has made available to Buyer all such
     leases and subleases listed on Schedule 1.66. With respect to each such
     lease and sublease:

               (i) the lease or sublease is legal, valid, binding, enforceable
          and in full force and effect;

               (ii) except for the consents set forth on Schedule 3.9(b) that
          are required to be obtained and the notices given, the lease or
          sublease will continue to be legal, valid, binding, enforceable and in
          full force and effect on identical terms following the consummation of
          the transactions contemplated hereby (including the assignments and
          assumptions referred to above);

               (iii) neither the Asset Sale Companies nor, to the Knowledge of
          PCC, any other party to the lease or sublease is in breach or default
          and no event has occurred which, with notice or lapse of time, would
          constitute a breach or default or permit termination, modification or
          acceleration thereunder;

               (iv) neither the Asset Sale Companies nor, to the Knowledge of
          PCC, any other party to the lease or sublease has repudiated any
          provision thereof; and

               (v) none of the Asset Sale Companies has assigned, transferred,
          conveyed or subjected to a Lien any interest in the leasehold or
          subleasehold, other than those created pursuant to the terms of that
          lease or sublease.

                                       35

          (b) There is not any third party adverse claim to any of the Real
     Property, other than Permitted Liens and, to the Knowledge of PCC, no party
     is in wrongful possession of any parcel of the Real Property.

     3.6. Purchased Assets.

          (a) The Asset Sale Companies (i) own good and transferable title to
     all of the Purchased Assets free and clear of all Liens and restrictions on
     transfer, other than Permitted Liens or (ii) lease such Purchased Assets
     under a valid and enforceable lease (subject to any applicable bankruptcy,
     insolvency, reorganization, moratorium or other similar Laws affecting
     generally the enforcement of creditors' rights). No rights of the Asset
     Sale Companies under such leases have been assigned or otherwise
     transferred as security for any obligation of the Asset Sale Companies. The
     consummation of the transactions contemplated by this Agreement will not
     create or constitute, either with or without notice or the passage of time
     a default or event of default under any such lease or require the consent
     of any other party to such lease in order to avoid a default or event of
     default.

          (b) Except for the items set forth on Schedule 1.71(u), the Purchased
     Assets include all tangible and intangible assets owned by the Asset Sale
     Companies and used in the Business.

          (c) The Equipment that is currently in use has been maintained in
     accordance with normal industry practice and is suitable for the purposes
     for which the Asset Sale Companies are presently using such Equipment.

     3.7. Intellectual Property.

     No third party has asserted any interest in the Intellectual Property, nor
has any third party alleged that any Asset Sale Company has infringed on any
Intellectual Property of any third party. To the Knowledge of PCC, none of the
Asset Sale Companies interferes with, infringes upon, misappropriates, or
otherwise comes into conflict with, any Intellectual Property rights of third
parties as a result of the continued operation of the Business as presently
conducted.

     3.8. Environmental Compliance.

          (a) Each Asset Sale Company is in material compliance with all
     Environmental Laws related to the Purchased Assets.

          (b) PCC has made available to Buyer true and complete copies of all
     licenses, franchises, certificates, concessions and other governmental
     approvals and authorizations held by each of PCC and the Asset Sale
     Companies pertaining to the Purchased Assets, as amended, supplemented and
     modified through the date hereof.

          (c) Schedule 3.8 includes a true and complete list of all of the
     citations, notices of non-compliance and notices of violation received by
     each of PCC and the Asset Sale Companies with respect to the Purchased
     Assets from federal Environmental Protection Agency ("EPA") or any other
     Governmental Authority that remain outstanding.

          (d) To the Knowledge of PCC, after the Closing, Buyer will not be
     liable for any fines, penalties, fees, Taxes or other governmental charges
     assessed with respect to notices of violation, cessation orders, closure
     orders, show cause orders or other governmental enforcement actions issued
     prior to Closing with respect to the Purchased Assets. Neither this
     Agreement nor the consummation of the transactions that are the subject of
     this Agreement will result in any Buyer Liabilities for site investigation
     or cleanup, or notification to or consent of any Governmental Agency or
     third parties, pursuant to any of the so-called "transaction-triggered" or
     "responsible property transfer" Environmental Laws.

                                       36

          (e) None of the Purchased Assets is identified on (i) the current or
     proposed National Priorities List under 40 C.F.R. ss. 300, (ii) the
     Comprehensive Environmental Response, Compensation and Liability Inventory
     System list or (iii) any list arising from a federal, state or local
     statute similar to CERCLA. To the Knowledge of PCC, the Real Property is
     not Contaminated with any Hazardous Substance.

          (f) (A) None of the Purchased Assets has been or is being used in any
     manner associated with the production, manufacture, processing, generation,
     storage, treatment, disposal, management, shipment or transportation of
     Hazardous Substances and no such Purchased Assets are Contaminated by any
     Hazardous Substance; (B) there are no underground storage tanks regulated
     pursuant to RCRAss.9001 (42 U.S.C.ss. 6991) or equivalent authorized state
     program, and no above ground storage tanks, located at, on, in or under the
     Purchased Assets; (C) there is no asbestos-containing material in any form
     or condition located at, on, in or under the Purchased Assets; (D) there
     are no materials or equipment containing polychlorinated biphenyls located
     at, on, in or under the Purchased Assets, (E) there are no landfills or
     other areas located at, on, in or under the Purchased Assets where
     Hazardous Substances have been disposed; and (F) neither PCC nor the Asset
     Sale Companies has disposed of any Hazardous Substance at any offsite
     disposal area located on the property of any other Person, other than a
     facility permitted by any Governmental Authority with jurisdiction to
     receive such Hazardous Substance.

                                       37

          (g) None of the Asset Sale Companies has, with respect to the
     Purchased Assets, either expressly or by operation of Law, assumed or
     undertaken any Liability, including without limitation, any Liability for
     corrective or remedial action, of any other Person relating to any
     Environmental Laws.

          (h) To the Knowledge of PCC, no conditions existing as of the Closing
     Date and relating to the Purchased Assets or the activities of the Asset
     Sale Companies or any of their respective predecessors or Affiliates will
     prevent or materially hinder Buyer's compliance with Environmental Laws,
     require Buyer to undertake any investigatory, remedial or corrective
     actions pursuant to Environmental Laws or impose upon Buyer any other
     Liabilities pursuant to Environmental Laws, including without limitation,
     any Environmental Laws relating to onsite or offsite releases or threatened
     releases of Hazardous Substances or imposing Liability for personal injury,
     property damage or natural resource damage.

     3.9. Contracts.

          (a) PCC has made available to Buyer copies of all of the written
     Contracts, or a written summary setting forth the terms and conditions
     where no copies exist, including all amendments, modifications, waivers and
     elections applicable thereto.

          (b) As to the Asset Sale Companies party thereto: (i) the Contracts
     are valid and binding, enforceable in accordance with their respective
     terms (subject to any applicable bankruptcy, insolvency, reorganization,
     moratorium or other similar Laws affecting generally the enforcement of
     creditors' rights), and are in full force and effect; (ii) the consummation
     of the transactions contemplated herein will not, with or without the
     giving of notice or the passage of time, or both, 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 the Contracts; (iii) no Asset
     Sale Company is, nor to the Knowledge of PCC, is any other party in
     material breach or default, and no event has occurred that, with notice or
     lapse of time, would constitute a breach or default, or permit termination,
     modification or acceleration, under the Contracts; and (iv) no Asset Sale
     Company has, nor to the Knowledge of PCC, has any other party repudiated
     any provision of the Contracts.

                                       38

          (c) Schedule 3.9(c) sets forth the consents and approvals of third
     parties and Governmental Authorities required to be obtained as a result of
     the transactions contemplated by this Agreement.

     3.10. Litigation; Claims.

          (a) Schedules 3.8 and 3.10 list all claims, legal actions, suits,
     litigation, arbitrations, disputes, investigations, proceedings by or
     before any Governmental Authority involving more than $100,000 and all
     orders, decrees or judgments, now pending or in effect, or, to the
     Knowledge of PCC, threatened or contemplated, against or affecting the
     Asset Sale Companies, the Purchased Assets, or the consummation of the
     transactions contemplated by this Agreement, except to the extent involving
     Taxes for Pre-Closing Periods.

          (b) There are no existing claims by or disputes involving more than
     $100,000 with Persons owning or occupying lands or realty adjoining or near
     any of the Purchased Assets regarding Repair Activities by the Asset Sale
     Companies or regarding the location of boundary lines, encroachments,
     mineral rights, subsidence, water quantity or quality, blasting damage,
     transportation of coal or other materials, nuisances or any other similar
     matter.

                                       39

     3.11. Employee Benefits.

          (a) Schedule 3.11(a) contains a list of all "employee benefit plans"
     (as defined in Section 3(3) of ERISA) and all other employee benefit plans,
     programs or arrangements, including each severance pay, bonus, deferred
     compensation, incentive compensation, stock purchase, stock option or other
     equity-based compensation, death benefit, group insurance, hospitalization
     or other medical, dental, health, life (including all individual life
     insurance policies as to which any of the Asset Sale Companies is the
     owner, beneficiary or both), disability or other insurance, Code Section
     125 "cafeteria" or "flexible" benefit plan, pension, savings,
     profit-sharing or retirement plan, program or arrangement: (i) under which
     Employees or former Employees are entitled to participate by reason of
     their employment with any of the Asset Sale Companies or their respective
     ERISA Affiliates, whether or not any of the foregoing is funded, whether
     insured or self-funded, and with respect to which any of the Asset Sale
     Companies is a party or a sponsor or a fiduciary thereof or by which any of
     the Asset Sale Companies is bound; or (ii) with respect to which any of the
     Asset Sale Companies otherwise may have, as of the Closing Date, any direct
     or indirect Liability (the "Employee Benefit Plans"). Schedule 3.11(a)
     identifies: (i) each Employee Benefit Plan that is a "pension plan" (as
     defined in Section 3(2) of ERISA) (the "Pension Plans"), and denotes those
     Pension Plans intended to be qualified under Section 401(a) of the Code
     (the "Qualified Plans"); (ii) each Employee Benefit Plan that is a
     "multiemployer plan" (as defined in Section 3(37) or Section 4001(a)(3) of
     ERISA) (a "Multiemployer Plan"); and (iii) each Employee Benefit Plan that
     is a "welfare plan" (as defined in Section 3(1) of ERISA) (the "Welfare
     Plans").

                                       40

          (b) Each Qualified Plan meets the requirements of a "qualified plan"
     under Code Section 401(a) and has received, pursuant to a request that
     accurately described such Qualified Plan, a favorable determination letter
     from the IRS to the effect that the form of such Qualified Plan satisfies
     the requirements of Section 401(a) of the Code and that its related trust
     is exempt from taxation under Section 501(a) of the Code. To the Knowledge
     of PCC, there are no facts or circumstances that would jeopardize or
     adversely affect in any material respect the qualification under Code
     Section 401(a) of any Qualified Plan.

          (c) As of the Closing Date, full payment to each Employee Benefit Plan
     of all contributions (including all employer contributions and employee
     salary reduction contributions) that are required to be made by the Asset
     Sale Companies under the terms thereof and under ERISA or the Code in
     respect of the current and prior plan years, if any, have been made for all
     Employee Benefit Plans (except for The Savings and Investment Plan of The
     Pittston Company and Its Subsidiaries, which payment shall be made as soon
     as possible after the Closing Date). All contributions that are required to
     be made by the Asset Sale Companies for any period ending on or before the
     Closing Date that are not yet due have been paid to each such Employee
     Benefit Plan or accrued in accordance with the past custom and practice of
     the Asset Sale Companies. All premiums that are due on or before the
     Closing Date have been paid with respect to each such Welfare Plan. As of
     the latest actuarial determination, no "accumulated funding deficiency" (as
     defined in Section 302 of ERISA or Section 412 of the Code), whether or not
     waived, exists with respect to any Pension Plan. The present value of all
     accumulated benefit obligations under each Qualified Plan (based on the
     assumptions used for purposes of Statement of Financial Accounting Standard
     No. 87) did not as of the last annual valuation date applicable thereto
     exceed the fair market value of the assets of such Qualified Plan. No
     "reportable event" within the meaning of Section 4043 of ERISA has occurred
     in connection with any of the Pension Plans.

                                       41

          (d) Employee Benefit Plan Compliance.

               (i) Each Employee Benefit Plan (other than the Multiemployer
          Plans) has been administered substantially in accordance with its
          terms;

               (ii) each Employee Benefit Plan (other than the Multiemployer
          Plans) and each related trust, insurance contract or fund complies in
          form and in operation and has been administered substantially in
          accordance with any applicable provisions of ERISA, the Code and all
          other Laws, all reports, returns and other documentation (including
          Form 5500 Annual Reports and PBGC-1s) that are required to have been
          filed with the IRS, the United States Department of Labor, the PBGC or
          any other Governmental Authority have been filed on a timely basis in
          each instance in which the failure to file such reports, returns and
          other documents would result in any material Liability to PCC or the
          Asset Sale Companies;

               (iii) other than routine claims for benefits, no Liens, lawsuits
          or complaints to or by any Person or Governmental Authority have been
          filed or, to the Knowledge of PCC, are contemplated or threatened,
          with respect to any Employee Benefit Plan (other than the
          Multiemployer Plans) except for those that would not reasonably be
          expected to result in any material Liability to PCC or the Asset Sale
          Companies.

          (e) Neither PCC nor any of the Asset Sale Companies has received a
     written notice of, or incurred, any withdrawal liability with respect to a
     Multiemployer Plan.

          (f) The consummation of the transactions contemplated by this
     Agreement will not (i) entitle any Person to severance pay for which Buyer
     will be liable after the Closing; (ii) accelerate the time of payment or
     vesting of, increase the amount of, or satisfy a condition to the
     compensation due to any Person under any Employee Benefit Plan for which
     Buyer will be liable after the Closing; or (iii) result in the payment of
     an amount that could, individually or in combination with any other such
     payment, constitute an "excess parachute payment" under Code Section
     280G(b)(1).

          (g) No "prohibited transaction" (as such term is defined in Section
     406 of ERISA or Section 4975 of the Code) has occurred with respect to any
     Employee Benefit Plan subject to ERISA, other than such a transaction
     subject to an administrative or statutory exemption, with respect to which
     a Tax, penalty or other amount may reasonably be expected to be imposed on
     any of the Asset Sale Companies or their respective ERISA Affiliates.

          (h) Neither the PCC Parent, PCC, the Asset Sale Companies nor any of
     their respective ERISA Affiliates, nor any organization with respect to
     which any such entity is a successor or parent corporation, within the
     meaning of Section 4069(b) of ERISA, has engaged in any transaction
     described in Sections 4069 or 4212(c) of ERISA.

                                       42

          (i) Each Pension Plan that is not qualified under Code Section 401(a)
     or 403(a) is exempt from Parts 2, 3 and 4 of Title I of ERISA as an
     unfunded plan that is maintained primarily for the purpose of providing
     deferred compensation for a select group of management or highly
     compensated employees, pursuant to ERISA Sections 201(2), 301(a)(3) and
     401(a)(1).

          (j) No assets of any of the Asset Sale Companies are allocated to or
     held in a "rabbi trust" or similar funding vehicle.

          (k) Neither the PCC Parent, PCC, the Asset Sale Companies nor any of
     their respective ERISA Affiliates has received any notification that any
     Multiemployer Plan is in reorganization (within the meaning of Section 4121
     of ERISA), is insolvent (within the meaning of Section 4245 of ERISA) or
     has been terminated (within the meaning of Title IV of ERISA), and to the
     Knowledge of PCC, no Multiemployer Plan is reasonably expected to be in
     reorganization, insolvent or terminated.

          (l) No Welfare Plan is a "multiple employer welfare arrangement" as
     defined in Section 3(40) of ERISA.

     3.12. Employment Matters.

     None of the Asset Sale Companies is a party to, bound by, or negotiating
with respect to any agreement with any labor union, association or other
employee group, nor is any unit of Employees of the Asset Sale Companies
represented by any labor union or similar association. No labor union or
employee organization has been certified or recognized as the collective
bargaining representative of any Employees of the Asset Sale Companies. To the
Knowledge of PCC, there are no active union organizational campaigns or
representation proceedings underway or threatened with respect to any Employees
of the Asset Sale Companies, nor are there any existing or threatened labor
strikes, work stoppages, slowdowns, grievances, unfair labor practice charges,
discrimination charges or labor arbitration proceedings affecting Repair
Activities at or deliveries to any mine or other facility of the Asset Sale
Companies. Each of the Asset Sale Companies has been and is in compliance with
all applicable Laws respecting employment and employment practices, terms and
conditions of employment and wages and hours, except where the failure to be in
compliance would not reasonably be expected to impose any material Liability on
the Asset Sale Companies.

                                       43

     3.13. No Broker.

     None of the Asset Sale Companies, PCC or the PCC Parent has had any
dealings, negotiations or communications with or retained any broker or other
intermediary in connection with the transactions contemplated by this Agreement
and none of the foregoing is committed to any Liability for any brokers' or
finders' fees or any similar fees in connection with the transactions
contemplated hereby, other than Rothschild Inc., who shall be compensated solely
by PCC or an Affiliate of PCC.

     3.14. Health and Safety Requirements.

     As it relates to the Purchased Assets, each of the Asset Sale Companies has
complied with all applicable Health and Safety Requirements and no action, suit,
proceeding, hearing, investigation, charge, complaint, claim, demand, or notice
is currently outstanding against any of them alleging any failure to so comply,
except for those that would not reasonably be expected to have a Material
Adverse Effect.

                                       44

     3.15. Restrictions on Business Activities.

     Except for this Agreement, there is no agreement, judgment, injunction,
order or decree binding upon PCC or any of the Asset Sale Companies that has or
would reasonably be expected to have the effect of prohibiting the conduct of
the Business.

     3.16. Powers of Attorney.

     There are no outstanding powers of attorney executed on behalf of any of
the Asset Sale Companies affecting the Purchased Assets.

     3.17. Transactions With Affiliates.

     The Contracts do not include any Liability between any Asset Sale Company
and any Affiliate of such Asset Sale Company. At the Closing, the Purchased
Assets will not include any receivable or other Liability from an Affiliate of
any Asset Sale Company.

     3.18. Absence of Certain Payments.

     During the five (5) year period prior to the date of this Agreement, to the
Knowledge of PCC, none of the Asset Sale Companies has (nor has any director,
officer, agent, or employee of any Asset Sale Company nor any other person,
acting on behalf of any Asset Sale Company) directly or indirectly: used any of
such company's funds for unlawful contributions, gifts, entertainment or other
unlawful expenses relating to political activity; made any unlawful payment to
foreign or domestic government officials or employees or to foreign or domestic
political parties or campaigns from such company's funds; violated any provision
of the Foreign Corrupt Practices Act of 1977 applicable to such company;
established or maintained any unlawful or unrecorded fund of such company's
monies or other assets; made any false or fictitious entry on the books or
records of such company; or made any bribe, rebate, payoff, influence payment,
kickback, or other unlawful payment, to any person or entity, private or public,
regardless of form, whether in money, property, or services, to obtain favorable
treatment in securing business or to obtain special concessions for such
company, or to pay for favorable treatment for business secured or for special
concessions already obtained for such company.

                                       45

     3.19. Warranties.

     Schedule 3.19 lists all (a) material pending customer complaints and
inquiries involving any services provided by any Asset Sale Company prior to the
Closing, (b) pending or, to the Knowledge of PCC, threatened, liability claims
regarding any service sold or provided by the Company, and (c) material charge
backs, material additional work to be undertaken as field work or otherwise, or
other material claims with respect to any services provided currently.

     3.20. Disclosure.

     The representations and warranties contained in this Article III do not
contain any untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements and information contained in this
Article III not misleading.

                                   ARTICLE IV
                     REPRESENTATIONS AND WARRANTIES OF BUYER

     Buyer hereby represents and warrants to PCC that:

     4.1. Organization.

     Buyer is a duly formed limited liability company, validly existing and in
good standing under the Laws of the State of Delaware.

     4.2. Execution, Delivery and Performance.

     The execution, delivery and performance of this Agreement and each other
agreement or instrument executed in connection herewith or delivered pursuant
hereto and the consummation of the transactions contemplated herein and therein
will not, with or without the giving of notice or the passage of time, or both,
(i) conflict with, or result in a violation or breach of, or a default, right to
accelerate or loss of rights under, or result in the creation of any Lien, under
or pursuant to, any provision of Buyer's organizational documents or of any
franchise, mortgage, deed of trust, lease, license, instrument, agreement,
consent, approval, waiver or understanding, any Law, or any finding, order,
judgment, writ, injunction or decree to which Buyer is a party or by which Buyer
or its respective assets may be bound or affected; or (ii) require the approval,
consent or authorization of, or prior notice to, filing with or registration
with, any Governmental Authority, or any other Person or entity.

                                       46

     4.3. Authorization.

     Buyer has full power and authority to enter into and deliver this
Agreement, and each other agreement or instrument (to which it is a party)
executed in connection herewith or delivered pursuant hereto and to perform its
obligations hereunder and thereunder. Buyer's execution, delivery and
performance of this Agreement and all other agreements and instruments executed
in connection herewith or delivered pursuant hereto and the transactions
contemplated hereby have been duly authorized by all requisite action. This
Agreement and all other agreements or instruments executed by Buyer in
connection herewith or delivered by Buyer pursuant hereto have been duly
executed and delivered by Buyer and this Agreement and all other agreements and
instruments executed by Buyer in connection herewith or delivered by Buyer
pursuant hereto constitute Buyer's legal, valid and binding obligation,
enforceable in accordance with their respective terms (subject to any applicable
bankruptcy, insolvency, reorganization, moratorium or other similar Laws
affecting generally the enforcement of creditors' rights).

                                       47

     4.4. No Broker.

     Buyer has had no dealings, negotiations or communications with any broker
or other intermediary in connection with the transactions contemplated by this
Agreement nor is it committed to any Liability for any brokers' or finders' fees
or any similar fees in connection with the transactions contemplated hereby.

     4.5. Environmental Compliance.

     Buyer and all operators it owns or controls are in compliance with all
Environmental Laws in all material respects.

     4.6. Financing.

     Buyer will have available to it, at the Closing, financial resources
sufficient to consummate the transactions contemplated by this Agreement.

     4.7. Disclosure.

     The representations and warranties contained in this Article IV do not
contain any untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements and information contained in this
Article IV not misleading.

                                   ARTICLE V
                                CERTAIN COVENANTS

     5.1. Operation in Ordinary Course.

     Except as provided in this Agreement, between the date of this Agreement
and the Closing, PCC shall cause each of the Asset Sale Companies, in relation
to the Purchased Assets, to: (i) carry on its business in the Ordinary Course of
Business; (ii) use commercially reasonable efforts to preserve intact its
current business organization, Repair Activities and properties until the
Closing Date, and maintain the relations and good will with its suppliers,
customers, landlords, creditors, agents, and others having business
relationships with such Asset Sale Company; (iii) not enter into any contract or
other obligation binding upon such Asset Sale Company involving its Employees,
any union, or an expenditure, purchase, sale, cost or commitment (unless such
contract is cancelable in thirty or fewer days, involves less than $100,000, or
is for consumable purchases) without the prior written consent of Buyer; and
(iv) report regularly to Buyer concerning the status of the business, Repair
Activities and finances of such Asset Sale Company.

                                       48

     5.2. Compliance with Law.

     Between the date of this Agreement and the Closing, each of Asset Sale
Companies shall comply in all material respects with all applicable Laws and
with all orders of any Governmental Authority.

     5.3. Cooperation.

     Subject to the terms and conditions herein provided, each of PCC and Buyer
agrees to use its commercially reasonable efforts to take, or cause to be taken,
all action, and to do, or cause to be done, all things necessary, proper and
advisable under Law, to consummate and make effective the transactions
contemplated by this Agreement. In case at any time after the Closing Date any
further action is necessary or desirable to carry out the purposes of this
Agreement, PCC and Buyer will, and PCC will cause the Asset Sale Companies to,
execute any additional instruments reasonably necessary to consummate the
transactions contemplated hereby.

     5.4. Notices and Consents.

     PCC and Buyer each will use their commercially reasonable efforts to obtain
consents of all Governmental Authorities and other third parties necessary to
the consummation of the transactions contemplated by this Agreement. PCC shall
have responsibility for providing any notices to third parties that may be
required by the transactions contemplated by this Agreement and for obtaining,
or causing to be obtained, at its sole cost and expense, the consents listed on
Schedule 5.4(a) and Buyer shall have responsibility for obtaining, at its sole
cost and expense, all consents listed on Schedule 5.4(b), which Schedule shall
include all Equipment leases.

                                       49

     5.5. Publicity.

     All general notices, releases, statements and communications to any
Employees, suppliers, distributors and customers of the Asset Sale Companies, to
the general public and to the press relating to the transactions contemplated by
this Agreement shall be made only at such times and in such manner as may be
mutually agreed upon by PCC and Buyer; provided, however, that either party
hereto (or, in the case of PCC, the PCC Parent) shall be entitled to make a
public announcement of the foregoing if: (a) in the opinion of its legal
counsel, such announcement is required to comply with Law or any listing
agreement with any national securities exchange or inter-dealer quotation
system; and (b) such disclosing party gives a reasonable period of notice and
opportunity to comment to the other party hereto of its intention to make such
public announcement; provided, that, failure to comment within 24 hours of
receipt of such notice shall be deemed a waiver of the opportunity to comment;
and provided, further, that nothing in this Section 5.5 shall operate to
prohibit any Asset Sale Company or Buyer from communicating, after the Closing
Date, with its respective suppliers, distributors, customers and the Government
the fact that the transaction has occurred, or with its employees regarding
their employment or the terms and conditions thereof, the operation of the
Purchased Assets or matters necessarily related thereto.

                                       50

     5.6. Replacement Bonds; Insurance and Guarantees; Other Filings.

          (a) At or prior to the Closing Date, Buyer shall have: (i) secured
     replacement bonds, replacement sureties, guarantees or other financial
     security, if applicable, sufficient to allow PCC and the Persons who will
     be its Affiliates after the Closing Date to be relieved or released as of
     the Closing Date from all financial commitments, guarantees, collateral
     agreements or similar undertakings listed on Schedule 5.6; (ii) obtained
     property and liability insurance customary for a company that is engaged in
     the Business or a business similar to the Business to insure the Purchased
     Assets; and (iii) delivered copies of such documents to PCC.

          (b) On or prior to the Closing, Buyer shall deliver to PCC: (i) a
     Certificate of Good Standing for self-insured status or evidence of
     insurance coverage with respect to Buyer's Liabilities for workers'
     compensation and federal black lung benefits that arise out of employment
     by Buyer or any of its Affiliates of Employees on and after the Closing
     Date, to the extent and in the amounts provided in applicable Laws; and
     (ii) certification from the Department of Labor of approval of self-insured
     status in the event Buyer is to be self-insured for federal black lung
     claim liability.

     5.7. Exclusivity.

     PCC will not (nor will it cause or permit any of the Asset Sale Companies
to) (i) solicit, initiate or encourage the submission of any proposal or offer
from any Person relating directly or indirectly to the acquisition of the
Purchased Assets, or any portion thereof, or (ii) participate in any discussions
or negotiations regarding, furnish any information with respect to, assist or
participate in, or facilitate in any other manner, any effort or attempt by any
Person to do or seek any of the foregoing. PCC will notify Buyer immediately if
any Person makes any proposal, offer, inquiry or contact with respect to any of
the foregoing.

                                       51

     5.8. Access.

     At or prior to the Closing Date, PCC will permit (and will cause each of
the Asset Sale Companies to permit) representatives of Buyer to have full access
at all reasonable times, and in a manner so as not to interfere with the normal
business operations of the Asset Sale Companies, to all premises, properties,
personnel, books, records (including Tax records), contracts and documents of or
pertaining to each of the Asset Sale Companies as related to the Purchased
Assets. Copies of and access to accounting records, ledgers and other pertinent
documents or work papers related to the Purchased Assets will be made available
to Buyer at all reasonable times, and in a manner so as not to interfere with
the normal business operations of the Asset Sale Companies, upon request.

     5.9. Notice of Developments.

     Each party will give prompt written notice to the other party of any
material adverse development causing a breach of any of its own representations
and warranties in Article III and Article IV above. No disclosure by any party
pursuant to this Section 5.9, however, shall be deemed to amend or supplement
the Schedules to such representations and warranties or to prevent or cure any
misrepresentation, breach of warranty or breach of covenant.

     5.10. Further Assurances.

     The parties shall cooperate in a commercially reasonable manner with each
other and with their respective representatives in connection with any steps
required to be taken as part of their respective obligations under this
Agreement, and shall (a) furnish upon request to each other such further
information; (b) execute and deliver to each other such other documents; and (c)
do such other acts and things, all as the other party may reasonably request for
the purpose of carrying out the intent of this Agreement and the transactions
contemplated.

                                       52

                                   ARTICLE VI
                         CONDITIONS PRECEDENT TO CLOSING

     6.1. Conditions Precedent to Each Party's Obligations.

     The respective obligations of each party to consummate the transactions
contemplated by this Agreement are subject to the satisfaction at or prior to
the Closing Date of the following conditions precedent:

          (a) no action, suit, proceeding, order, decree or injunction shall
     have been commenced, threatened or entered by or before any Governmental
     Authority that remains in force and that (i) prohibits, seeks to prohibit,
     or imposes or seeks substantial damages in connection with, the
     consummation of the transactions contemplated by this Agreement, (ii) seeks
     or imposes relief that causes or would cause any of the transactions
     contemplated by this Agreement to be rescinded following consummation, or
     (iii) affects adversely the right of Buyer to own the Purchased Assets or
     to operate the Business on or after the Closing Date;

          (b) PCC Parent, PCC, Buyer and Buyer's Parent shall have executed and
     delivered to each other party thereto the Administrative Services
     Agreement, the Cooperation Agreement and the Indemnification and Guaranty
     Agreement and any other documentation required in all transactions
     contemplated or covered by all such agreements, all in form and substance
     as set forth in Exhibits A, E and F attached hereto and the same shall be
     in full force and effect;

                                       53

          (c) all other transactions pursuant to which Buyer or any of its
     Affiliates acquire assets related to the Business shall have been
     consummated prior to or simultaneously with the transactions contemplated
     by this Agreement;

          (d) PCC and Buyer shall have executed and delivered to each other all
     such other documents or instruments necessary or appropriate to effect the
     transactions contemplated by this Agreement, including the documents
     provided in Section 5.6 hereof; and

          (e) PCC shall have obtained, or caused to have been obtained, the
     consents listed in Schedule (e)(i) and PCC shall have provided such
     payments as may be reasonably required to obtain all such consents. Buyer
     shall have obtained, or caused to have been obtained, the consents listed
     in Schedule (e)(ii) and Buyer shall have provided such payments, guarantees
     and/or assurances as may be reasonably required to obtain all such
     consents.

     6.2. Conditions Precedent to Obligations of Buyer.

     The obligations of Buyer to consummate the transactions contemplated by
this Agreement are subject to the satisfaction or waiver at or prior to the
Closing Date of the following conditions precedent:

          (a) all of the representations and warranties of PCC set forth in this
     Agreement or in any Exhibit, Schedule or document delivered pursuant
     hereto, without regard to any qualification or limitation with respect to
     materiality (whether by reference to "Material Adverse Effect" or
     otherwise), shall be true and correct in all respects as of the date hereof
     and at and as of the Closing Date with the same effect as though such
     representations and warranties were made at and as of the Closing unless
     the aggregate failure of such representations or warranties to be true and
     correct does not have a Material Adverse Effect; provided that if a
     representation or warranty is expressly made only as of a specific date, it
     need only be true and correct in all respects as of such date, and Buyer
     shall have received the PCC Closing Certificate required by Section 6.2(f)
     below dated as of the Closing Date executed by PCC to such effect;

                                       54

          (b) all of the covenants and obligations that PCC is required to
     perform or to comply with pursuant to this Agreement at or prior to the
     Closing Date shall have been duly performed and complied with in all
     material respects;

          (c) all proceedings and actions, corporate or other, to be taken by
     PCC or the Asset Sale Companies in connection with the transactions
     contemplated by this Agreement and all documents incident thereto,
     including all actions necessary to authorize the execution, delivery and
     performance of this Agreement and the transactions contemplated hereby,
     shall have been taken and shall be reasonably satisfactory in form and
     substance to Buyer and Buyer's counsel;

          (d) PCC shall have, and shall have caused the Asset Sale Companies to
     have, executed and delivered the Bills of Sale, the Assignment and
     Assumption Agreements and such other documents as may be necessary to
     convey to Buyer the Purchased Assets;

          (e) between the date of this Agreement and the Closing Date, there
     shall not have been a change, event or occurrence that, individually, or
     together with any other change, event or occurrence, has had or could
     reasonably be expected to have a Material Adverse Effect;

                                       55

          (f) Buyer shall have received an opinion of counsel to PCC addressed
     to Buyer substantially in the form of Exhibit H; and

          (g) Buyer shall have received an executed copy of the PCC Closing
     Certificate.

     6.3. Conditions Precedent to Obligations of PCC.

     The obligation of PCC to consummate and cause the consummation of the
transactions contemplated by this Agreement is subject to the satisfaction or
waiver at or prior to the Closing Date of the following conditions precedent:

          (a) all of the representations and warranties of Buyer set forth in
     this Agreement or in any Exhibit, Schedule or document delivered pursuant
     hereto, without regard to any qualification or limitation with respect to
     materiality, shall be true and correct in all respects as of the date
     hereof and at and as of the Closing Date with the same effect as though
     such representations and warranties were made at and as of the Closing
     unless the aggregate failure of such representations or warranties to be
     true and correct does not have a material adverse effect on Buyer's ability
     to consummate the transactions contemplated by this Agreement or fulfill
     its post-Closing obligations hereunder; provided that if a representation
     or warranty is expressly made only as of a specific date, it need only be
     true and correct in all respects as of such date, and PCC shall have
     received Buyer's Closing Certificate required by Section 6.3(h) below dated
     as of the Closing Date executed by Buyer to such effect;

          (b) all of the covenants and obligations that Buyer is required to
     perform or to comply with pursuant to this Agreement at or prior to the
     Closing Date shall have been duly performed and complied with in all
     material respects;

                                       56

          (c) all proceedings and actions, corporate or other, to be taken by
     Buyer in connection with the transactions contemplated by this Agreement,
     and all documents incident thereto, including all actions necessary to
     authorize the execution, delivery and performance of this Agreement and the
     transactions contemplated hereby, shall have been taken and shall be
     reasonably satisfactory in form and substance to PCC and its counsel;

          (d) PCC shall have received, on behalf of the Asset Sale Companies,
     the Purchase Price by wire transfer of cash or other immediately available
     funds;

          (e) Buyer shall have executed and delivered the Assignment and
     Assumption Agreements and such other documents as may be necessary for
     Buyer to assume all of the Assumed Liabilities;

          (f) Buyer shall have delivered to PCC satisfactory evidence of
     compliance with Section 5.6;

          (g) between the date of this Agreement and the Closing Date, there
     shall not have been a change, event or occurrence that, individually, or
     together with any other change, event or occurrence, has had or could
     reasonably be expected to have a Material Adverse Effect;

          (h) PCC shall have received an opinion of counsel to Buyer addressed
     to PCC substantially in the form of Exhibit I; and

          (i) PCC shall have received an executed copy of Buyer's Closing
     Certificate.

                                       57

                                  ARTICLE VII
                               CERTAIN TAX MATTERS

     7.1. Property Taxes.

     Property Taxes of the Asset Sale Companies with respect to the Purchased
Assets (including, without limitation, property Taxes payable as a tenant or
lessee under any lease) will be pro-rated as of the Closing Date and,
notwithstanding any other provision of this Agreement, the economic burden of
any such property Tax will be borne by (i) the Asset Sale Companies for all
Pre-Closing Periods and the portion of any Straddle Period through the Closing
Date and (ii) by Buyer for all Post-Closing Periods and the portion of any
Straddle Period after the Closing Date. Accordingly, notwithstanding any other
provision of this Agreement, (i) if any Asset Sale Company pays such a property
Tax with respect to a Post-Closing Period or the portion of Straddle Period
after the Closing Date, Buyer will reimburse PCC on behalf of such Asset Sale
Company within 15 days after receiving from PCC written demand for the amount of
such property Tax, and (ii) if Buyer pays such a property Tax with respect to a
Pre-Closing Period or the portion of a Straddle Period through the Closing Date,
PCC on behalf of the Asset Sale Companies will reimburse Buyer within 15 days
after receiving from Buyer written demand for the amount of such property Tax.
For purposes of pro-rating property Taxes, the amount of any property Tax
attributable to the portion of a Straddle Period through the Closing Date shall
be deemed to be the amount of such property Taxes for the entire Straddle Period
multiplied by a fraction, the numerator of which is the number of days in the
Straddle Period through the Closing Date and the denominator of which is the
number of days in the entire Straddle Period. In determining the Straddle Period
for property Taxes, the Tax period as reflected on the statement of Taxes due,
property Tax bill, property "tax ticket," or any other request for payment from
a Governmental Authority will determine the taxable period (e.g., a Virginia
property Tax bill that indicates the tax year as 2002 is for a Tax for the
taxable period January 1, 2002 through December 31, 2002).

                                       58

     7.2. Sales and Use Taxes.

     Buyer and PCC or the Asset Sale Companies hereby intend that the
transaction be an occasional sale within the meaning of Virginia Code Section
58.1-602 and regulations thereunder, and therefore exempt from Virginia sales
and use Tax pursuant to Virginia Code Section 58.1-609. PCC will be responsible
for sales and use Taxes payable as a result of the failure of this transaction
to qualify as an occasional sale or as an exempt transaction under any other
Virginia law; provided, however, that any use Tax payable as a result of this
transaction that would be payable regardless of whether the transaction
qualifies as an occasional sale or not shall be paid by Buyer.

     7.3. Transfer Taxes.

     All transfer, recording and similar Taxes arising in connection with the
transactions contemplated hereunder shall be borne equally by PCC and Buyer. PCC
and Buyer shall (and they shall cause their respective Affiliates to) cooperate
to comply with all Tax Return requirements for such Taxes and provide such
documentation and take such other actions as may be necessary to minimize the
amount of any such Taxes.

     7.4. Access for Tax Returns.

     Following the Closing Date, Buyer shall, at reasonable times, and in a
manner so as not to interfere with normal business operations, allow PCC (and if
requested by PCC, representatives of federal, state or local agencies) access to
the Purchased Assets for purposes of reviewing information pertinent to any Tax
Return filed by PCC Parent or any of its Affiliates, including the Asset Sale
Companies.

                                       59

                                  ARTICLE VIII
                          COVENANTS REGARDING EMPLOYEES

     8.1. Employees.

          (a) Subject to the requirements of applicable Laws, but no later than
     immediately prior to the Closing, PCC will cause the Asset Sale Companies
     to terminate the employment of its Employees with respect to the Purchased
     Assets.

          (b) From time to time after the Closing Date, PCC and Buyer may
     require information with respect to current or former Employees. Without
     intending to limit the obligations of the parties in the exchange of
     information with respect to any other matter or in accordance with the
     Cooperation Agreement, PCC and Buyer agree to furnish such information to
     the other, if available, promptly after receipt of a written request
     therefor.

                                   ARTICLE IX
                                   TERMINATION

     9.1. Termination.

                  This Agreement may be terminated prior to the Closing Date
only as follows:

          (a) by mutual written consent of PCC and Buyer;

          (b) by either PCC or Buyer, if the Closing Date shall not have
     occurred prior to the close of business on December 31, 2002 or such later
     date as the parties may agree in writing (provided, that the right to
     terminate this Agreement under this Section 9.1(b) shall not be available
     to any party whose failure to fulfill any obligation under this Agreement
     has been the cause, in whole or in part, of, or has resulted in, the
     failure of the conditions in Article VI to be satisfied and the Closing
     Date to occur on or before such date);

                                       60

          (c) by PCC or Buyer if an action, suit, or proceeding, shall have been
     commenced or threatened by or before any Governmental Authority, or any
     order, decree or injunction shall have been entered therein, that (i)
     prohibits, seeks to prohibit, or imposes or seeks substantial damages in
     connection with, the consummation of the transactions contemplated by this
     Agreement, (ii) seeks or imposes relief that causes or would cause any of
     the transactions contemplated by this Agreement to be rescinded following
     consummation, or (iii) affects adversely the right of Buyer to own the
     Purchased Assets or to operate the Business;

          (d) by Buyer if (i) the representations of PCC contained in this
     Agreement are not true and correct in all material respects as if made at
     and as of that time, except for failures to be true and correct that are
     capable of being and are cured within fifteen (15) days after written
     notice from Buyer to PCC of such failure; or (ii) PCC has failed to comply
     materially with its respective obligations under this Agreement, except for
     failures to comply that are capable of being and are cured within fifteen
     (15) days after written notice from Buyer to PCC of such failure; or

          (e) by PCC if (i) the representations of Buyer contained in this
     Agreement are not true and correct in all material respects as if made at
     and as of that time, except for failures to be true and correct that are
     capable of being and are cured within fifteen (15) days after written
     notice from PCC to Buyer of such failure; or (ii) Buyer has failed to
     comply materially with its obligations under this Agreement, except for
     failures to comply that are capable of being and are cured within fifteen
     (15) days after written notice from the PCC to Buyer of such failure.

     9.2. Effect of Termination.

     If this Agreement is terminated pursuant to Section 9.1 hereof, all further
obligations of the parties under or pursuant to this Agreement shall terminate
without further Liability of either party to the other except: (a) as set forth
in Section 10.4; and (b) for breaches of representations, warranties, or
covenants or for fraud. PCC and Buyer hereby agree that the provisions of this
Section 9.2 and of Section 10.4 shall survive any termination of this Agreement
pursuant to the provisions of this Article IX.

                                       61

                                   ARTICLE X
                                 MISCELLANEOUS

     10.1. Entire Agreement.

     This Agreement, the documents referred to herein and to be delivered
pursuant hereto and any other agreement entered into contemporaneously with this
Agreement among PCC, PCC Parent, Buyer and Buyer's Parent or the Affiliates of
any of them constitute the entire agreement between the parties pertaining to
the subject matter hereof, and supersede all prior agreements, understandings,
negotiations and discussions of the parties, whether oral or written, and there
are no warranties, representations or other agreements between the parties in
connection with the subject matter hereof, except as specifically set forth
herein or therein.

     10.2. Amendment.

     This Agreement may be amended by an instrument in writing and signed on
behalf of all of the parties hereto at any time.

                                       62

     10.3. Extension; Waiver.

                  At any time prior to the Closing Date, the parties may (i)
extend the time for the performance of any of the obligations or other acts of
the other parties hereto, (ii) waive any inaccuracies in the representations and
warranties contained herein or in any document, certificate or writing delivered
pursuant hereto or (iii) waive compliance with any of the agreements or
conditions contained herein, other than the conditions contained in Section
6.1(a) hereof as it relates to the entry of an order in any proceeding by or
before a Governmental Authority. Any agreement on the part of any party to any
such extension or waiver shall be valid only if set forth in an instrument in
writing and signed on behalf of such party.

     10.4. Expenses.

     Whether or not the transactions contemplated by this Agreement are
consummated, each of the parties hereto shall pay the fees and expenses of their
respective counsel, investment bankers, financial advisors, accountants and
other experts and the other expenses incident to the negotiation and preparation
of this Agreement and consummation of the transactions contemplated hereby.

     10.5. Bulk Sales Waiver.

     Buyer hereby waives compliance with all applicable bulk sales Laws.

     10.6. Governing Law.

     This Agreement shall be construed and interpreted according to the Laws of
the Commonwealth of Virginia, without regard to the conflicts of Law rules
thereof.

     10.7. Assignment.

     This Agreement and each party's respective rights hereunder may not be
assigned at any time except as expressly set forth herein without the prior
written consent of the other party, provided that PCC may assign its rights
hereunder to any Affiliate of PCC after the Closing Date without the consent of
Buyer and Buyer may assign its rights hereunder to any Affiliate of Buyer prior
to, at or after the Closing Date without the consent of PCC and, further
provided, that nothing in this Agreement shall prevent a successor in interest
to either party from enforcing the provisions of this Agreement.

                                       63

     10.8. 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 party in the
manner provided by this Section 10.8:

If to PCC:                    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.

                                       64

If to Buyer:                  Maxxim Rebuild Co., 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.

     10.9. Counterparts; Headings.

     This Agreement may be executed in several counterparts, each of which shall
be deemed an original, but such counterparts shall together constitute but one
and the same Agreement. The Table of Contents and Article and Section headings
in this Agreement are inserted for convenience of reference only and shall not
constitute a part hereof.

     10.10. Interpretation; Construction.

          (a) Unless the context requires otherwise, all words used in this
     Agreement in the singular number shall extend to and include the plural,
     all words in the plural number shall extend to and include the singular and
     all words in any gender shall extend to and include all genders.

          (b) This Agreement has been fully negotiated by the parties hereto and
     shall not be construed by any Governmental Authority against either party
     as the drafting party.

                                       65

     10.11. 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.

     10.12. No Reliance.

     No third party is entitled to rely on any of the representations,
warranties and agreements contained in this Agreement and PCC and Buyer assume
no Liability to any third party because of any reliance on the representations,
warranties and agreements of PCC and Buyer contained in this Agreement, other
than Section 5.5 and Article VIII hereof, which are intended to be for the
benefit of the Persons expressly covered thereby and may be enforced by such
Persons.

     10.13. Retention of and Access to Records.

     After the Closing Date, Buyer shall retain for a period consistent with
Buyer's record retention policies and practices those books and records relating
to the Asset Sale Companies delivered to Buyer. Buyer also shall provide to PCC
and its Affiliates reasonable access thereto, during normal business hours and
on at least three days' prior written notice, to enable them to prepare
financial statements or Tax Returns or deal with Tax audits or litigation. Buyer
shall deliver to PCC at least thirty days written notice prior to the
destruction or other disposal of any such books and records. PCC and its
Affiliates may elect to take delivery of any such books and records that Buyer
intends to destroy or otherwise dispose of and to copy any such books and
records that Buyer intends to keep, all at their own expense.

                                       66

     10.14. Arbitration.

     Any dispute, controversy or claim arising out of or relating to this
Agreement (a "Dispute"), excluding any dispute or disagreement among the parties
concerning the allocation of Purchase Price and Assumed Liabilities, which shall
be resolved pursuant to Section 2.9, shall be decided 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 select an arbitrator within fourteen 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 Section 10.14 shall be the exclusive means to resolve all
Disputes.

                                       67

     IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of the date first above written.

                               PITTSTON COAL COMPANY

                               By:    /s/ Michael D. Brown
                                      -------------------------------
                               Name:          Michael D. Brown
                               Title:         Vice President - Development
                                              and Technical Resources

                               MAXXIM REBUILD CO., LLC

                               By:    /s/ Eddie Neely
                                      -------------------------------
                               Name:          Eddie Neely
                               Title:         Vice President

                                       68

                                  SCHEDULE 1.4

                              ASSET SALE COMPANIES

Maxxim Rebuild Company, Inc., a Delaware corporation

Pittston Coal Management Company, a Virginia corporation

                              PITTSTON COAL COMPANY
                              448 N. E. Main Street
                             Lebanon, Virginia 24266

                                December 13, 2002

Maxxim Rebuild Co., LLC
c/o Alpha Natural Resources, LLC
406 West Main Street
Abingdon, Virginia 24212

Ladies and Gentlemen:

Reference is made to the Asset Purchase Agreement (the "Agreement"), dated as of
October 29, 2002, as amended to but not including the date hereof, by and
between Pittston Coal Company ("PCC") and Maxxim Rebuild Co., LLC ("Buyer").
Capitalized terms used herein without definition shall have the meanings
ascribed to them in the Agreement.

PCC and Buyer desire to amend certain provisions of the Agreement and, in
consideration of the mutual covenants, conditions and agreements set forth
herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:

     1.   The Schedules to the Agreement are hereby amended and restated in
          their entirety as attached hereto as Exhibit A.

     2.   Except as amended by this letter agreement, the Agreement shall
          continue in full force and effect.

     3.   This letter agreement may be executed in two or more counterparts,
          each of which shall be deemed an original, but all of which together
          shall constitute one and the same instrument. Any executed counterpart
          of this letter agreement or other signature hereto delivered by a
          party by facsimile shall be deemed for all purposes as being good and
          valid execution and delivery of this letter agreement by such party.

                            [SIGNATURE PAGE FOLLOWS]

Sincerely,

PITTSTON COAL COMPANY

By:      /s/ Michael D. Brown
         -----------------------------------
Name:    Michael D. Brown
Title:   Vice President - Development
         and Technical Resources

ACKNOWLEDGED AND AGREED:

MAXXIM REBUILD CO., LLC

By:      /s/ Eddie Neely
         -----------------------------------
Name:    Eddie Neely
Title:   Vice President

                     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 Parent") and MAXXIM REBUILD CO.,
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 Parent owns 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;
         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:

                                       1

                                    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.

                                       2

     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 Parent.

     "Buyer's Parent" shall have the meaning set forth in the preamble to this
Agreement.

     1.7. Buyer's Parent Guaranty.

     "Buyer's 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.

     1.11. Indemnifying Party.

     "Indemnifying Party" shall have the meaning set forth in Section 2.3(b)
hereof.

                                       3

     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.

                                       4

                                   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):

                                       5

               (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) 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 Section 2.1(a)(i) or (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 3.13 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.

                                       6

          (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);

                                       7

               (iii) the ownership of the Purchased Assets on or after the
          Closing Date;

               (iv) 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;

               (v) 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)(v) shall not apply to any liability resulting from or
          arising out of any Pittston Indemnified Person's conduct in bad faith
          or willful misconduct; and

               (vi) 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;

                                       8

               (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 (a)(iii) through
     2.2(a)(vi), 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)(iii)
     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).

                                       9

     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.

          (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.

                                       10

          (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.

          (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.

                                       11

          (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
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, Article VII of the Acquisition Agreement or 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.

                                       12

                                   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.

                                       13

          (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, 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.

                                       14

          (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.

     3.2. Buyer's Parent Guaranty.

          (a) Buyer's Parent hereby irrevocably and unconditionally guarantees
     to PCC (the "Buyer's 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 and the
     Acquisition Agreement. Buyer's 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 Parent hereby expressly waives (i) notice of acceptance of
     Buyer's 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 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 Parent. Buyer's Parent acknowledges and agrees
     that its liability under Buyer's 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 Parent hereby waives any and all
     defenses to enforcement of Buyer's Parent Guaranty, now existing or
     hereafter arising, which may be available to guarantors, sureties and other
     secondary parties at law or in equity.

                                       15

          (c) Buyer's Parent represents and warrants to PCC that (i) Buyer's
     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 Parent Guaranty, (iii) Buyer's Parent Guaranty
     is being executed on Buyer's Parent's behalf by a duly authorized
     representative, (iv) Buyer's Parent Guaranty is the legally valid and
     binding obligation of Buyer's Parent enforceable in accordance with its
     terms, and (v) the execution and the delivery of Buyer's 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 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 Parent is a party or by which Buyer's Parent is bound, or any Law
     or any order, judgment, writ, injunction or decree to which Buyer's Parent
     is a party or by which Buyer's 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 Parent or that otherwise relates to Buyer's
     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
     Parent is subject.

                                       16

          (d) Buyer's 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 Parent's liability to the
     Pittston Indemnified Persons under Buyer's 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 Parent Guaranty shall be binding upon Buyer's 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
     Parent Guaranty, Buyer's Parent shall be deemed to include the surviving
     entity in any merger or consolidation involving Buyer's Parent, each of
     whom shall be bound by the provisions of the Buyer's Parent Guaranty and
     this Agreement.

                                       17

                                   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:

                  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

                                       18

                  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:

                  Maxxim Rebuild Co., 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 Parent, to it at:

                  Alpha Natural Resources, LLC
                  406 West Main Street
                  Abingdon, Virginia 24212
                  Attention: Vice President

                                       19

                  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 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.

                                       20

                                  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 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.

                                       21

     IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the
date first above written.

                              MAXXIM REBUILD CO., LLC,
                              a Delaware limited liability company

                              By:/s/ Eddie Neely
                                 -----------------------------------------------
                              Name: Eddie Neely
                              Title:   Vice 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

                                       22

                                   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 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.

                                       23

                                   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, 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.

                                                                   Exhibit 2.21

                              COOPERATION AGREEMENT

                                 BY AND BETWEEN

                              PITTSTON COAL COMPANY

                                       AND

                             MAXXIM REBUILD CO., LLC

                                December 13, 2002

                                Table of Contents

                                                                                                                Page
                                                                                                                -----

ARTICLE I  DEFINITIONS............................................................................................2
                                                                                                           
1.1.        Acquisition Agreement.................................................................................2
1.2.        Affiliates, Successors, Assigns, Lessees or Contractors...............................................2
1.3.        Agreement.............................................................................................3
1.4.        Coal Act Liabilities..................................................................................3
1.5.        Communications........................................................................................3
1.6.        Employee Related Liabilities..........................................................................3
1.7.        Maxxim LLC............................................................................................3
1.8.        PCC...................................................................................................3
1.9.        Recurrence Claim......................................................................................3
1.10.       Third Parties.........................................................................................3
1.11.       UMWA..................................................................................................4
1.12.       Workers' Compensation and Federal Black Lung Liabilities..............................................4
ARTICLE II  COAL ACT LIABILITIES..................................................................................4
2.1.        General...............................................................................................4
ARTICLE III  WORKERS' COMPENSATION AND FEDERAL BLACK LUNG LIABILITIES.............................................6
3.1.        General...............................................................................................6
3.2.        Litigation and Disputes...............................................................................7
3.3.        No Adverse Changes....................................................................................8
3.4.        Recurrence of Prior Claims............................................................................8
ARTICLE IV  EMPLOYEE RELATED LIABILITIES..........................................................................9
4.1.        Employee Related Liabilities..........................................................................9
ARTICLE V  DISPUTE RESOLUTION....................................................................................10
ARTICLE VI  TERM.................................................................................................11
ARTICLE VII  MISCELLANEOUS.......................................................................................11
7.1.        Cooperation..........................................................................................11
7.2.        Continuing Obligations...............................................................................12
7.3.        Maxxim LLC Communication with Third Parties..........................................................12
7.4.        Litigation Support...................................................................................13
7.5.        Confidentiality......................................................................................13
7.6.        Governing Law........................................................................................14
7.7.        Successors and Assigns...............................................................................15
7.8.        Notices and Payments.................................................................................15

                              COOPERATION AGREEMENT

     THIS COOPERATION AGREEMENT, made as of December 13, 2002, by and between
PITTSTON COAL COMPANY, a Delaware corporation ("PCC"), on its own behalf and on
behalf of its Affiliates, and MAXXIM REBUILD CO., LLC, a Delaware limited
liability company ("Maxxim LLC"), on its own behalf and on behalf of its
Affiliates.

                                    RECITALS

     WHEREAS, Maxxim LLC, PCC and certain Affiliates of PCC have entered into a
certain asset purchase agreement as set forth on Schedule A, dated as of October
29, 2002 (such agreement, together with the Exhibits and Schedules attached
thereto being hereinafter referred to as the "Acquisition Agreement"), pursuant
to which Maxxim LLC has agreed to 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, pursuant to the Acquisition Agreement, PCC has agreed to retain
certain liabilities and certain assets; and

     WHEREAS, PCC, PCC Parent, Maxxim LLC and Alpha Natural Resources, LLC, a
Delaware limited liability company, have entered into the Indemnification and
Guaranty Agreement; and

     WHEREAS, PCC and Maxxim LLC desire to establish certain administrative
procedures with respect to their respective obligations under the Acquisition
Agreement; provided, however, that nothing in this Agreement is intended in any
way to reallocate risk or modify the allocation of liabilities in the
Acquisition Agreement or the Indemnification and Guaranty Agreement; and
provided, further, that nothing in this Agreement, the Acquisition Agreement or
the Indemnity Agreement is intended to, nor should be construed to, establish a
single employer, joint employer, common employer and/or alter ego relationship
between PCC and its Affiliates on the one hand and Maxxim LLC and its Affiliates
on the other hand.

                                       1

     NOW, THEREFORE, in consideration of the mutual covenants, conditions and
agreements set forth herein and in the Acquisition Agreement and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, PCC and Maxxim LLC agree that:

                                    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. Affiliates, Successors, Assigns, Lessees or Contractors.

     "Affiliates, Successors, Assigns, Lessees or Contractors" shall mean Maxxim
LLC's Affiliates, contractual successors and assigns, and lessees and
contractors who, as part of a contractual arrangement with Maxxim LLC or one of
its Affiliates, offer employment to the current or former Employees of an Asset
Sale Company.

                                       2

1.3. Agreement.

     "Agreement" shall mean this Cooperation Agreement, together with the
Schedule[s] attached hereto, as the same may be amended from time to time in
accordance with the terms hereof.

1.4. Coal Act Liabilities.

     "Coal Act Liabilities" shall mean those Retained Liabilities specified in
Section 1.71(i) of the Acquisition Agreement.

1.5. Communications.

     "Communications" shall have the meaning set forth in Section 2.1(a) hereof.

1.6. Employee Related Liabilities.

     "Employee Related Liabilities" shall mean those Retained Liabilities
specified in Sections 1.71(d), 1.71(e), 1.71(f), 1.71(h), 1.71(j), 1.71(k), and
1.71(m) of the Acquisition Agreement.

1.7. Maxxim LLC.

     "Maxxim LLC" shall have the meaning set forth in the preamble to this
Agreement.

1.8. PCC.

     "PCC" shall have the meaning set forth in the preamble to this Agreement.

1.9. Recurrence Claim.

     "Recurrence Claim" shall have the meaning set forth in Section 3.4 hereof.

1.10. Third Parties.

     "Third Parties" shall have the meaning set forth in Section 7.3 hereof.

                                       3

1.11. UMWA.

     "UMWA" shall mean the International Union, United Mine Workers of America,
including its district and local unions.

1.12. Workers' Compensation and Federal Black Lung Liabilities.

     "Workers' Compensation and Federal Black Lung Liabilities" shall mean those
Retained Liabilities specified in Sections 1.71(b) and 1.71(c) of the
Acquisition Agreement. ARTICLE II........ COAL ACT LIABILITIES

2.1. General.

     In order to assist PCC with regard to the satisfaction of the Coal Act
Liabilities, PCC and Maxxim LLC agree as follows:

     (a)  Notices and Communication.

     In the event Maxxim LLC or any of its Affiliates, Successors, Assigns,
Lessees or Contractors receive from any administrative, judicial or other source
any claims, communications, correspondence, notices, invoices and/or other
documents (collectively, "Communications") that are related to the Coal Act
Liabilities, Maxxim LLC agrees that it shall, and shall cause its Affiliates,
Successors, Assigns, Lessees or Contractors to:

          (i)  promptly send to PCC or its designated Affiliate a copy of any
               such Communications; and

          (ii) cooperate with PCC in notifying the sender of the Communications
               that such Communications should be sent to PCC or its designated
               Affiliate.

                                       4

     (b)  Litigation.

     PCC shall have the exclusive right to pursue and/or defend currently
pending litigation or to commence and/or defend future litigation, with respect
to any issue relating to the Coal Act Liabilities, including, but not limited
to, claims pertaining to specific beneficiaries, statutory construction or the
constitutionality of the Coal Act, as PCC deems necessary or appropriate.

     (c)  Administration. PCC or one or more of its Affiliates shall be solely
          responsible for administering the Coal Act Liabilities and shall take
          such actions as it deems necessary or appropriate to administer the
          Coal Act Liabilities, including, but not limited to:

          (i)  pursuing administrative or judicial challenges to the assignment
               of beneficiaries to PCC or any of its Affiliates in accordance
               with the terms of the Coal Act;

          (ii) administering claims under the individual employer plan required
               to be maintained under Section 9711 of the Coal Act, including
               entering into agreements with third party administrators and
               resolving or litigating claim disputes;

          (iii) implementing managed care and/or other methods of delivery; and

          (iv) discussing managed care and cost containment options with the
               UMWA.

                                       5

                                  ARTICLE III

            WORKERS' COMPENSATION AND FEDERAL BLACK LUNG LIABILITIES

3.1. General.

     In order to assist PCC with regard to the satisfaction of the Workers'
Compensation and Federal Black Lung Liabilities, PCC and Maxxim LLC agree as
follows:

     (a)  Administration.

     PCC or one or more of its Affiliates shall be solely responsible for
administering the Workers' Compensation and Black Lung Liabilities, including
making such determinations, awarding and denying such benefits, seeking such
administrative and judicial rulings and remedies and taking all such other
actions as PCC shall deem necessary or appropriate.

     (b)  Notices and Communication.

          (i)  Maxxim LLC and PCC agree to cooperate with each other in
               providing any notices that may be necessary to the appropriate
               Governmental Authority regarding the allocation between PCC, on
               the one hand, and Maxxim LLC, on the other hand, of the Workers'
               Compensation and Federal Black Lung Liabilities.

          (ii) In the event Maxxim LLC or any of its Affiliates, Successors,
               Assigns, Lessees or Contractors receive any Communications that
               are related to the Workers' Compensation and Federal Black Lung
               Liabilities, Maxxim LLC agrees that it shall, and shall cause its
               Affiliates, Successors, Assigns, Lessees or Contractors to, send
               promptly to PCC or its designated Affiliate a copy of any such
               Communications.

          (iii) Maxxim LLC and PCC agree to cooperate with each other in
               providing such notices of the allocation of liabilities under the
               Acquisition Agreement as Maxxim LLC and PCC deems appropriate to

                                       6

               any insurer or third party administrator providing services or
               benefits related to the Workers' Compensation and Federal Black
               Lung Liabilities.

3.2. Litigation and Disputes.

     PCC shall have the right to resolve or defend against any claim that is
related to the Workers' Compensation and Federal Black Lung Liabilities in such
manner as PCC in its discretion deems appropriate, in accordance with such
procedures as PCC deems appropriate and with the controlling Workers'
Compensation Act and federal black lung Laws, including raising the defense that
Maxxim LLC is the responsible operator under the federal black lung Laws because
Maxxim LLC or its Affiliates, Successors, Assigns, Lessees or Contractors is a
successor-in-interest to PCC or its Affiliates; provided, however, that Maxxim
LLC shall have the right to respond that PCC is the responsible operator under
the federal black lung Laws notwithstanding Maxxim LLC's acquisition of the
Purchased Assets. PCC also shall have the right to institute or defend against
any litigation related to the Workers' Compensation and Federal Black Lung
Liabilities, except that PCC shall promptly notify Maxxim LLC of any workers'
compensation or federal black lung claim in which it intends to assert that
Maxxim LLC is responsible for payment of the same under the Acquisition
Agreement, in which case Maxxim LLC shall have the right to intervene in any
such action to oppose PCC's position. Any dispute as to which entity is the
responsible entity for such workers' compensation claims shall be determined in
accordance with the Workers' Compensation Acts, and any dispute as to which
entity is the responsible operator for such black lung claims shall be
determined in accordance with the federal black lung Laws.

                                       7

3.3. No Adverse Changes.

     Maxxim LLC agrees that it will, and will cause its Affiliates, Successors,
Assigns, Lessees or Contractors to, use its or their commercially reasonable
efforts to retain in effect any lawful program or practice of PCC or its
Affiliates in effect at Closing that is intended to reduce employer liability or
the length of time an employee is entitled to receive benefits under the
Workers' Compensation Act. 3.4. Recurrence of Prior Claims.

     In the event Maxxim LLC or any of its Affiliates, Successors, Assigns,
Lessees or Contractors receives a claim under the applicable Workers'
Compensation Acts or federal black lung Laws and Maxxim LLC or its Affiliates,
Successors, Assigns, Lessees or Contractors believes in good faith that such
claim relates to, or is a recurrence of, a prior claim that constituted a
Workers' Compensation or Federal Black Lung Liability (a "Recurrence Claim"),
the provisions of this Section 3.4 shall govern. Maxxim LLC shall promptly
notify PCC of any Recurrence Claim and the basis for its determination that such
claim is a Recurrence Claim prior to communicating its determination to any
other person or entity. If PCC agrees with Maxxim LLC that such claim is a
Recurrence Claim, such claim shall be deemed a Workers' Compensation and Federal
Black Lung Liability, and the rights and obligations of the parties shall be as
provided in this Article III. If PCC disagrees with Maxxim LLC's position, the
matter will be submitted to the appropriate Governmental Authority for a
determination, with each side being responsible for its respective costs in such
procedure. Maxxim LLC recognizes that in the event the employee who has filed
the claim disagrees with the position of the parties with respect to a
Recurrence Claim, the employee may file a claim with the appropriate
Governmental Authority for a determination. In any such case, PCC and Maxxim LLC
shall each have the right to defend its position, with each side bearing the
cost of its own defense.

                                       8

                                   ARTICLE IV
                          EMPLOYEE RELATED LIABILITIES

4.1. Employee Related Liabilities.

     In order to assist PCC with regard to the satisfaction of the Employee
Related Liabilities, PCC and Maxxim LLC agree as follows:

     (a)  Administration. PCC or one or more of its Affiliates shall be solely
          responsible for administering the Employee Related Liabilities, making
          such determinations, awarding and denying such benefits, seeking such
          administrative and judicial rulings and remedies and taking all such
          other actions as PCC shall deem necessary or appropriate.

     (b)  Notices and Communication.

          (i)  PCC has the exclusive right to provide such notices as PCC deems
               necessary or appropriate to Employees or other beneficiaries
               regarding any matters related to the Employee Related Liabilities
               and to any third parties providing services or benefits related
               to the Employee Related Liabilities.

          (ii) In the event Maxxim LLC or any of its Affiliates, Successors,
               Assigns, Lessees or Contractors receives any Communications that
               are related to the Employee Related Liabilities, Maxxim LLC shall
               promptly send, and shall cause its Affiliates, Successors,
               Assigns, Lessees or Contractors promptly to send, such
               Communications to PCC or its designated Affiliate.

                                       9

          (iii) Maxxim LLC agrees to provide on a monthly basis for a period of
               12 months following the Closing Date, the names and social
               security numbers of any non-Classified Employees hired by Maxxim
               LLC or its Affiliates, Successors, Assigns, Lessees or
               Contractors and further agrees to provide, and shall cause its
               Affiliates, Successors, Assigns, Lessees or Contractors to
               provide, all information in its or their possession or under its
               or their control reasonably requested by PCC in order to
               administer and satisfy any Employee Related Liabilities.

     (c)  Litigation. PCC shall have the exclusive right to pursue and/or defend
          currently pending litigation, or to commence and/or defend future
          litigation, with respect to any issue related to any Employee Related
          Liabilities, as PCC shall deem necessary or appropriate.

                                   ARTICLE V
                               DISPUTE RESOLUTION

     Disputes under or alleged violations of this Agreement shall be handled in
accordance with the Dispute resolution procedure set forth in Article VII of the
Indemnification and Guaranty Agreement.

                                       10

                                   ARTICLE VI
                                      TERM

     The term of this Agreement shall commence as of the Closing Date and shall
continue through the completed satisfaction of all of the Coal Act Liabilities,
Workers' Compensation and Federal Black Lung Liabilities and the Employee
Related Liabilities.

                                  ARTICLE VII
                                  MISCELLANEOUS

7.1. Cooperation.

     (a)  To the extent permitted by Law and on a timely basis, Maxxim LLC
          agrees to take any reasonable action, provide information and execute
          any appropriate documents, and shall cause its Affiliates, Successors,
          Assigns, Lessees or Contractors to take any reasonable action, provide
          information and execute any appropriate documents, that PCC reasonably
          requests in order to assist PCC with regard to the administration and
          satisfaction of the Coal Act Liabilities, Workers' Compensation and
          Federal Black Lung Liabilities and the Employee Related Liabilities.
          Upon written request by Maxxim LLC, PCC shall reimburse Maxxim LLC for
          costs above $10,000 per year that are reasonably incurred by Maxxim
          LLC or its Affiliates as a result of actions taken by it or them under
          this Agreement. Prior to payment of such costs, PCC shall be entitled
          to receive a detailed invoice of such costs from Maxxim LLC if so
          requested by PCC.

     (b)  PCC and Maxxim LLC shall cooperate with each other to determine the
          timing and manner of transferring the Books and Records to Maxxim LLC
          after the Closing, provided, however, that Maxxim LLC or its
          Affiliates shall have immediate access to all such Books and Records
          while still in the possession of PCC and provided, further, that PCC
          or its Affiliates shall have reasonable access to, and shall be
          allowed to copy at its sole expense, any Books and Records to which
          PCC reasonably believes it needs access or for which PCC reasonably
          believes it needs copies after the Closing.

                                       11

7.2. Continuing Obligations.

     Any failure by PCC or by Maxxim LLC or its Affiliates, Successors, Assigns,
Lessees, or Contractors to comply with any of their obligations in this
Agreement shall not relieve PCC or Maxxim LLC of any of their Liabilities or
obligations under the Acquisition Agreement.

7.3. Maxxim LLC Communication with Third Parties.

     Unless otherwise agreed to in writing by PCC or except as permitted
specifically by this Agreement and the Acquisition Agreement, neither Maxxim LLC
nor any of its Affiliates, Successors, Assigns, Lessees or Contractors will make
any public statements or communicate with the United Mine Workers of America
Combined Benefit Fund, the 1992 UMWA Benefit Plan, any beneficiary of any
Employee Benefit Plan, or any other Person or entity (collectively, "Third
Parties") with respect to or concerning the Coal Act Liabilities, Workers'
Compensation and Federal Black Lung Liabilities and the Employee Related
Liabilities. Notwithstanding the foregoing, in the event PCC fails to take such
actions as are necessary to comply with its obligations under the Acquisition
Agreement and this Agreement with respect to any of the Coal Act Liabilities,
Workers' Compensation and Federal Black Lung Liabilities or the Employee Related
Liabilities within a reasonable time after receiving notice from Maxxim LLC that
attempts have been or are being made to obtain information concerning or to
impose any of the Coal Act Liabilities, Workers' Compensation and Federal Black
Lung Liabilities or the Employee Related Liabilities on Maxxim LLC or any of its
Affiliates, Successors, Assigns, Lessees or Contractors, Maxxim LLC shall be

                                       12

permitted to communicate with the appropriate Third Party regarding PCC's
obligations with respect to such Coal Act Liabilities, Workers' Compensation and
Federal Black Lung Liabilities or the Employee Related Liabilities. In addition,
notwithstanding anything in the foregoing to the contrary, in the event any
Third Party contacts Maxxim LLC to inquire about PCC's or any of its Affiliates
obligations with respect to such Coal Act Liabilities, Workers' Compensation and
Federal Black Lung Liabilities or the Employee Related Liabilities under this
Agreement, Maxxim LLC is permitted to direct such Third Party to contact PCC for
additional information.

7.4. Litigation Support.

     In the event and for as long as PCC is actively contesting or defending
against any action, suit, proceeding, hearing, investigation, charge, complaint,
claim or demand related to the Coal Act Liabilities, Workers' Compensation and
Federal Black Lung Liabilities and the Employee Related Liabilities, Maxxim LLC
will, to the extent reasonable, cooperate, and shall cause its Affiliates,
Successors, Assigns, Lessees or Contractors to cooperate, with PCC and its
counsel in the contest or defense, make available their personnel and provide
such testimony and access to their books, documents and records as shall be
reasonably necessary in connection with the contest or defense.

7.5. Confidentiality.

     Except as otherwise provided in this Agreement, each party hereto covenants
and agrees to keep confidential the existence of this Agreement and the contents
of this Agreement at all times while any provision of this Agreement is in
force, unless and to the extent that a party shall be required to disclose the
same by generally accepted accounting principles, Law or judicial order or
decree or administrative regulation or order or in order to comply with its
obligations hereunder; provided, however, that any party that believes it may be
required to disclose this Agreement or any provisions hereof shall promptly

                                       13

notify the other hereto in writing and afford such other party the opportunity
to determine whether disclosure is in fact required or if the scope of the
required disclosure can be reduced and provided further, however, that
notwithstanding anything in this Section 7.5 or in Section 7.3 hereof to the
contrary, without notifying the other party, any party may disclose the
existence and contents of this Agreement:

          (a)  to any employees within the party's organization who need to know
               of this Agreement in order for the party to comply with its
               obligations hereunder, so long as such employees at the time of
               disclosure are required to comply with this Section 7.5;

          (b)  Maxxim LLC's Affiliates, Successors, Assigns, Lessees,
               Contractors and their employees, attorneys, accountants,
               consultants and lenders who need to know of the Agreement, so
               long as such entities and persons agree to comply with this
               Section 7.5;

          (c)  to any third-party contractor whose services the party requires
               in order for the party to comply with its obligations hereunder
               so long as such contractor is contractually obligated to comply
               with this Section 7.5;

          (d)  in the financial statements of the party as required by generally
               accepted accounting principles; or

          (e)  to any attorneys, accountants, consultants or lenders of a party
               for whom the party agrees to be responsible for the compliance
               herewith.

7.6. Governing Law.

     This Agreement shall be governed by and construed in accordance with the
laws of the Commonwealth of Virginia, but without reference to the choice of law
provision thereof.

                                       14

7.7. Successors and Assigns.

     This Agreement and each party's respective rights hereunder may not be
assigned at any time except as expressly set forth herein without the prior
written consent of the other party, which consent shall not be unreasonably
withheld, except that PCC may assign its rights hereunder to any Affiliate of
PCC after the Closing Date without the consent of Maxxim LLC and Maxxim LLC may
assign its rights hereunder to any Affiliate of Maxxim LLC after the Closing
Date without the consent of PCC. 7.8. Notices and Payments.

     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 (5) 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 party in the
manner provided by this Section 7.8:

If to PCC:                    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

                                       15

And a copy to:                Hunton & Williams
                              Riverfront Plaza, East Tower
                              951 East Byrd Street
                              Richmond, Virginia 23219
                              Attention: Louanna O. Heuhsen, Esq.

If to Maxxim LLC:             Maxxim Rebuild Co., 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.

                                       16

     IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the
date first written above.

MAXXIM REBUILD CO., LLC

                                     By:    /s/ Eddie Neely
                                     -----------------------------------------
                                     Name:  Eddie Neely
                                     Title: Vice President

                                     PITTSTON COAL COMPANY

                                     By:    /s/ Michael D. Brown
                                     -----------------------------------------
                                     Name:  Michael D. Brown
                                     Title: Vice President - Development and
                                            Technical Resources

                                       17