UNITED STATES
                    SECURITIES AND EXCHANGE COMMISSION
                           Washington, DC 20549

                                 FORM 10-K
  (Mark One)
     [X]    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
            EXCHANGE ACT OF 1934
            For the fiscal year ended December 31, 2000

                               OR

     [ ]    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
            EXCHANGE ACT OF 1934
            For the transition period from ____________ to ____________
            Commission file number 1-9148

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

                                                                        
             Virginia                                                      54-1317776
  (State or other jurisdiction of                                      ( I. R. S. Employer
  incorporation or organization)                                        Identification No.)

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

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

 Securities registered pursuant
 to Section 12(b) of the Act:
                                                                      Name of each exchange on
        Title of each class                                                which registered

Pittston Brink's Group Common Stock, Par Value $1                      New York Stock Exchange
Rights to Purchase Series A Participating Cumulative Preferred Stock   New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act:                      None

         Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months and (2) has been subject to such filing
requirements for the past 90 days.

                              Yes [X]     No [ ]

         Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [X]

         As of March 1, 2001, there were issued and outstanding 51,777,782
shares of Pittston Brink's Group Common Stock. The aggregate market value of
such stocks held by nonaffiliates, as of that date, was $1,003,079,068.

         Documents incorporated by reference: Part I, Part II and Part IV
incorporate information by reference from the Annual Report of the Company for
the year ended December 31, 2000. Part III incorporates information by reference
from portions of the Registrant's definitive Proxy Statement to be filed
pursuant to Regulation 14A.

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PART I
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ITEMS 1 AND 2. BUSINESS AND PROPERTIES
- -------------------------------------------------------------------------------

The Pittston Company

As used herein, the "Company" includes The Pittston Company except as otherwise
indicated by the context. The Company is comprised of four operating segments
and one discontinued segment. The four operating segments are Brink's,
Incorporated ("Brink's"), Brink's Home Security, Inc. ("BHS"), BAX Global Inc.
("BAX Global") and Other Operations, which consists of Pittston Mineral Ventures
("Mineral Ventures") and the Company's timber and gas operations (collectively,
"Allied Operations"). The discontinued segment is Pittston Coal Operations
("Coal Operations").

Prior to January 14, 2000, the Company was comprised of three groups - Pittston
Brink's Group, Pittston BAX Group, and Pittston Minerals Group. The Pittston
Brink's Group included the Brink's and BHS operations of the Company. The
Pittston BAX Group included the BAX Global operations of the Company. The
Pittston Minerals Group included the Pittston Coal Company and Mineral Ventures
operations of the Company. Also, prior to January 14, 2000, the Company had
three classes of common stock: Pittston Brink's Group Common Stock ("Brink's
Stock"), Pittston BAX Group Common Stock ("BAX Stock") and Pittston Minerals
Group Common Stock ("Minerals Stock"), which were designed to provide
shareholders with separate securities reflecting the performance of the Brink's
Group, the BAX Group and the Minerals Group, respectively.

On December 6, 1999, the Company announced that its Board of Directors (the
"Board") approved the elimination of the tracking stock capital structure by an
exchange of all outstanding shares of Minerals Stock and BAX Stock for shares of
Brink's Stock (the "Exchange"). The Exchange took place on January 14, 2000 (the
"Exchange Date"). On the Exchange Date, holders of Minerals Stock received
0.0817 shares of Brink's Stock for each share of their Minerals Stock; and
holders of BAX Stock received 0.4848 shares of Brink's Stock for each share of
their BAX Stock. See Note 10 of the Company's consolidated financial statements
for additional information concerning the Exchange on pages 44 through 46 of the
Company's 2000 Annual Report, which are incorporated herein by reference. From
and after the Exchange Date, Brink's Stock is the only outstanding class of
common stock of the Company and continues to trade on the New York Stock
Exchange under the symbol "PZB". Prior to the Exchange Date, the Brink's Stock
reflected the performance of the Brink's Group only; after the Exchange Date,
the Brink's Stock reflects the performance of the Company as a whole. Shares of
Brink's Stock after the Exchange are hereinafter referred to as "Pittston Common
Stock".

In addition, on December 6, 1999, the Company announced its intention to exit
the coal business. During the fourth quarter of 2000, the Company formalized its
plan of disposal and, as such, the operating results of Coal Operations are
reported as discontinued operations as of December 31, 2000.

Financial information related to the Company's segments is included in Note 14
of the Company's consolidated financial statements on pages 51 through 52 of the
Company's 2000 Annual Report, which are incorporated herein by reference. The
information set forth with respect to "Business and Properties" is as of
December 31, 2000 except where an earlier or later date is expressly stated.
Nothing herein should be considered as implying that such information is correct
as of any date other than December 31, 2000, except as so stated or indicated by
the context.

Activities relating to the Brink's segment are carried on by Brink's,
Incorporated and its subsidiaries and certain affiliates and associated
companies in foreign countries (together, "Brink's"). Activities relating to the
BHS segment are carried on by Brink's Home Security, Inc. and its subsidiaries
(together, "BHS"). Activities relating to the BAX Global segment are carried on
by BAX Global Inc. and its subsidiaries and certain affiliates and associated
companies in foreign countries (together, "BAX Global"). Activities relating to
Other Operations are carried on by Pittston Mineral Ventures Company and its
subsidiaries and certain affiliates (together, "Mineral Ventures") and
Pittston's timber and gas operations (together, "Allied Operations").

The Company has a total of approximately 49,400 employees.

BUSINESS AND SECURITY SERVICES

The business and security services businesses of the Company consist of Brink's,
Brink's Home Security and BAX Global.

Brink's

General

The major activities of Brink's are contract-carrier armored car, automated
teller machine ("ATM"), air courier (global services), coin wrapping, and
currency and deposit processing services. Brink's serves customers through 149
branches in the United States and 39 branches in Canada. Service is also
provided through subsidiaries, affiliates and associated companies in 52
countries outside the United States and Canada. These international operations
contributed approximately 49% of Brink's total reported 2000 operating profit.
Brink's ownership interest in subsidiaries and affiliated companies ranges from
20% to 100%. In some instances local laws limit the extent of Brink's interest.

                                       1

Representative customers include banks, commercial establishments, industrial
facilities, investment banking and brokerage firms and government agencies.
Brink's provides its individualized services under separate contracts designed
to meet the distinct transportation and security requirements of its customers.
These contracts are usually for an initial term of one year or less, but
generally continue in effect thereafter until canceled by either party.

Brink's armored car services include transportation of money from industrial and
commercial establishments to banks for deposit, and transportation of money,
securities and other negotiable items and valuables between commercial banks,
central banks, such as the US Federal Reserve Banks and their branches and
correspondents, and brokerage firms. Brink's also transports new currency, coins
and precious metals for a number of central banks throughout the world. For
transporting money and other valuables over long distances, Brink's offers a
combined armored car and air courier service linking many cities around the
world. Except for a subsidiary in Venezuela, Brink's does not own or operate any
aircraft, but uses regularly scheduled or chartered aircraft in connection with
its air courier services.

In addition to its armored car pickup and delivery services, Brink's provides
change services, coin wrapping services, currency and deposit processing
services, ATM services, safes and safe control services, check cashing and
pickup and delivery of valuable air cargo shipments. In certain geographic
areas, Brink's transports canceled checks between banks or between a clearing
house and its member banks. Brink's also offers CompuSafe'r' service, designed
to streamline the handling and management of cash receipts initially implemented
for the convenience store and gas station market.

Brink's operates a worldwide specialized diamond and jewelry transportation
business and has offices in the major diamond and jewelry centers of the world,
including London, Antwerp, Tel Aviv, Hong Kong, New York, Bombay, Bangkok, Tokyo
and Arezzo, Italy.

Brink's has the ability, through its information systems, to integrate a full
range of cash vault, ATM, transportation, storage, processing, inventory
management and reporting services. Brink's believes that its processing and
information capabilities differentiate its currency and deposit processing
services from its competitors and enable Brink's to take advantage of the trend
by banks, retail business establishments and others to outsource vaulting and
cash room operations.

Brink's International operations, which accounted for approximately 56% of its
revenues in 2000, operate in three regions: Europe, Latin America and
Asia/Pacific. In Europe, wholly owned subsidiaries of Brink's operate in France,
Germany, the United Kingdom and the Netherlands and, in the diamond and jewelry
transportation business, in Belgium, Italy and Russia. Brink's has a 70%
interest in subsidiaries in Israel and Morocco, a 50.05% interest in a
subsidiary in Greece and a 51% interest in a subsidiary in Switzerland. Brink's
also has ownership interests ranging from 45% to 50% in affiliates and
subsidiaries operating in Belgium, Ireland, Jordan and Luxembourg. Wholly owned
subsidiaries operate in South Africa, the United Arab Emirates and Turkey. In
Latin America, wholly owned subsidiaries operate in Brazil, Puerto Rico and
Bolivia. Brink's owns a 61% interest in a subsidiary in Venezuela, a 74%
interest in a subsidiary in Chile, a 51% interest in a subsidiary in Argentina,
a 58% interest in a subsidiary in Colombia and a 20% interest in a Mexican
company which operates one of the world's largest security transportation
services with over 1,500 armored vehicles. Brink's also has 49% and 36%
ownership interests in affiliates operating in Panama and Peru, respectively. In
the Asia/Pacific region, wholly owned subsidiaries of Brink's operate in
Australia and Taiwan, and majority owned subsidiaries operate in Hong Kong (90%
owned), Japan (81% owned) and Singapore (60% owned). Brink's has minority
interests in affiliates in India, Pakistan and Thailand ranging from 40% to 49%.
Brink's also operates representative offices in China, Vietnam and the
Philippines.

Because the financial results of Brink's are reported in US dollars, they are
affected by changes in the value of the various foreign currencies in relation
to the US dollar. Changes in exchange rates may also adversely affect
transactions that are denominated in currencies other than the functional
currency of the subsidiary performing the transaction. The diversity of foreign
operations helps to mitigate a portion of the impact that foreign currency
fluctuations in any one country may have on the translated results. Brink's,
from time to time, uses foreign currency forward contracts to hedge certain
transactional risks associated with foreign currencies. Brink's is also subject
to other risks customarily associated with doing business in foreign countries,
including labor and economic conditions, political instability, controls on
repatriation of earnings and capital, nationalization, expropriation and other
forms of restrictive action by local governments. The future effects of such
risks on Brink's cannot be predicted.

Competition

Brink's is the oldest and largest armored car service company in the United
States as well as a market leader in most of the countries in which it operates.
The foreign subsidiaries, affiliates and associates of Brink's compete with
numerous armored car and courier service companies in many areas of operation.
In the United States, Brink's presently competes nationally with one company and
regionally and locally with many smaller companies. Although the cost of service
is, in many instances, the controlling factor in obtaining and retaining
customers. Brink's believes that its service, high quality insurance coverage
and company reputation (including the name "Brink's") are important competitive
advantages. While Brink's cost structure is generally competitive, certain
competitors of Brink's have lower costs primarily as a result of lower wage and
benefit levels.

                                       2

See also "Government Regulation" below.

Service Mark, Patents and Copyrights

BRINKS is a registered service mark in the United States and certain foreign
countries. The BRINKS mark, name and related marks are of material significance
to Brink's business. Brink's owns patents with respect to certain coin sorting
and counting machines and armored truck design. Patents related to coin sorting
machines expire in 2007 and patents related to counting machines expire in 2008.
In addition, Brink's has a patented integrated service called CompuSafe'r'
service that expires in 2018. CompuSafe(R) service has been designed to
streamline the handling and management of cash receipts.

Insurance

Excess of prudent deductibles and/or retentions, Brink's carries insurance
coverage for its losses. Insurance policies cover liability for loss of various
types of property entrusted to Brink's from any cause except war and nuclear
risk. The various layers of insurance are covered by different groups of
participating underwriters. Such insurance is obtained by Brink's at rates and
upon terms negotiated periodically with the underwriters. The loss experience of
Brink's and, to a limited extent, other armored carriers affects premium rates
charged to Brink's. The availability of quality and reliable insurance coverage
is an important factor in the ability of Brink's to obtain and retain customers.
Quality insurance is available to Brink's in major markets although the premiums
charged are subject to fluctuations depending on market conditions. Less
expensive armored car and air courier all-risk insurance is available, but these
policies typically contain unacceptable operating warranties and limited
customer protection.

Government Regulation

The operations of Brink's are subject to regulation by the United States
Department of Transportation with respect to safety of operation and equipment
and financial responsibility. Intrastate operations in the United States and
intraprovince operations in Canada are subject to regulation by state and by
Canadian and provincial regulatory authorities, respectively. Brink's
International operations are regulated to varying degrees by the countries in
which they operate.

Employee Relations

At December 31, 2000, Brink's and its subsidiaries had approximately 11,300
employees in North America, of whom approximately 2,600 were classified as
part-time employees. In the United States, two locations (ten employees) are
covered by collective bargaining agreements. At December 31, 2000, Brink's was a
party to two United States and twelve Canadian collective bargaining agreements
with various local unions covering approximately 1,600 employees, most of whom
are employees in Canada and members of unions affiliated with the International
Brotherhood of Teamsters. Negotiations are continuing on one agreement that
expired in 2000 and two agreements expiring in 2001. The remaining agreements
will expire after 2001. At December 31, 2000, Brink's had approximately 24,200
employees outside North America. Brink's believes that its employee relations
are satisfactory.

Properties

In the United States and Canada, Brink's owns 29 branch offices and holds under
lease an additional 159 branch offices, located in 38 states, the District of
Columbia and nine Canadian provinces. Such branches generally include office
space and garage or vehicle terminals, and serve not only the city in which they
are located but also nearby cities. Brink's corporate headquarters in Darien,
Connecticut, is held under a lease expiring in 2005, with an option for an early
termination in 2003. The leased branches include 120 facilities held under
long-term leases, while the remaining 39 branches are held under short-term
leases or month-to-month tenancies.

Brink's owns or leases, in the United States and Canada, approximately 2,500
armored vehicles, 300 panel trucks and 200 other vehicles that are primarily
service cars. In addition, approximately 5,200 Brink's-owned safes are located
on customers' premises. The armored vehicles are of bullet-resistant
construction and are specially designed and equipped to afford security for crew
and cargo. Brink's subsidiaries and affiliated and associated companies located
outside the United States and Canada operate from approximately 500 owned or
leased branches with approximately 5,000 owned or leased armored vehicles.

Brink's Home Security ("BHS")

General

BHS is primarily engaged in the business of marketing, selling, installing,
monitoring and servicing electronic security systems in owner-occupied,
single-family residences. At December 31, 2000, BHS had approximately 675,200
systems under monitoring contracts, including sites for approximately 82,000 new
subscribers added since December 31, 1999. BHS services more than 100
metropolitan areas in 42 states, the District of Columbia and two western
provinces in Canada. BHS believes that it is the fourth largest provider of
residential monitored security service in North America.

BHS maintains a very high focus on delivering quality service in key areas of
its sales, installation and monitoring operations, including all major aspects
of its customer service functions. BHS believes that this commitment to quality
is reflected in its customer retention rate, believed to be the highest in the
industry among the major security service companies.

BHS's typical security system installation consists of sensors and other devices
which are installed at a customer's premises. The equipment is designed to
signal intrusion, fire, medical and other alerts. When an alarm is triggered, a
signal is sent by telephone line or wireless communication to BHS's central
monitoring station in Irving, Texas, a suburb of Dallas. The monitoring station
holds an Underwriters' Laboratories, Inc. ("UL") listing. A backup monitoring
center in Carrollton, Texas, helps protect against a

                                       3

catastrophic event at the primary monitoring center. In the event of an
emergency, such as fire, tornado, major interruption in telephone or computer
service, or any other calamity affecting the primary facility, monitoring
operations can be transferred to the backup facility.

BHS creates most of its new residential subscriber relationships through its
in-house marketing, sales and installation functions. BHS markets its alarm
systems primarily through advertising, inbound telemarketing and a field sales
force directly employed by the company. BHS employees install and service the
systems from local BHS branches. Subcontractors are utilized on occasion in some
service areas. BHS does not manufacture any of the equipment used in its
security systems; instead, it purchases such equipment from a limited number of
suppliers. Equipment inventories are maintained at each branch office.

BHS has established an authorized dealer program to expand the company's
geographic coverage and leverage the company's national advertising. During
2000, the dealer program accounted for less than 5% of installations and, as of
December 31, 2000, approximately 26 dealers were actively participating in the
program. BHS requires that its dealers install the same line of equipment as is
installed by its own branches, and adhere to the same installation quality
standards.

In addition to creating subscriber relationships through its branch and dealer
networks, BHS develops new residential subscribers through its Brink's Home
Technologies division and its multi-family housing program. Brink's Home
Technologies markets residential security systems, as well as a variety of
low-voltage security, home networking, communications and entertainment options,
directly to major home builders. BHS has begun working with multi-family housing
developers and operators to provide monitored security to individuals and
families residing in apartment and condominium complexes.

Although its core business is focused on the monitoring of residential security
systems, BHS installs and monitors commercial security systems on a limited
basis. Additionally, BHS has developed a licensing program by which it will
license the Brink's or BHS name. Examples include licenses to distributors of
security products (padlocks, home safes, etc.) offered for sale to consumers
through major retail chains.

BHS's alarm service contracts contain provisions limiting BHS's liability to its
customers. Courts have, from time to time, upheld such provisions, but there can
be no assurance that the limitations contained in BHS's agreements will be
enforced according to their terms in any or all cases. The nature of the service
provided by BHS potentially exposes it to greater risk of liability than may be
borne by other service businesses. However, BHS has not experienced any major
liability losses.

BHS carries insurance of various types, including general liability and errors
and omissions insurance, to protect it from product deficiencies and negligent
acts of its employees. Certain of BHS's insurance policies and the laws of some
states limit or prohibit insurance coverage for punitive or certain other kinds
of damages arising from employees' misconduct.

Regulation

BHS and its personnel are subject to various Federal, state and local consumer
protection, licensing and other laws and regulations. BHS's business relies upon
the use of telephone lines to communicate signals, and telephone companies are
currently regulated by both the Federal and state governments. Regulation of the
installation and monitoring of fire detection devices has also increased in
several local markets. BHS's wholly owned Canadian subsidiary, Brink's Home
Security Canada Limited, is subject to the laws of Canada, British Columbia and
Alberta.

The alarm service industry continues to experience a high incidence of false
alarms in some communities, including communities in which BHS operates. BHS
believes its false alarm rate compares favorably to other companies' rates.
However, there is a possibility that at some point some police departments may
refuse to respond to calls from alarm companies which would necessitate that
private response forces be used to respond to alarm signals. Additionally, the
high incidence of false alarms in the industry has caused some local governments
to impose assessments, fines and penalties on either subscribers of alarm
companies or the alarm companies themselves, based upon the number of false
alarms reported to the authorities. BHS believes its alarm service contracts
allow BHS to pass these charges on to the appropriate customers.

Competition

BHS competes in most major metropolitan markets in the United States and several
markets in western Canada through its company branch operations or its
authorized dealer program. BHS believes that its share of the North American
market for monitored single-family home security systems is between 4% and 5% of
new installations.

The home security market has large numbers of competitors, including many local
and regional companies. The largest provider of residential monitored security
systems is estimated by BHS to have approximately 20% of the North American
market for new installations. Several of the large competitors with whom BHS
competes on a national basis rely extensively on independent dealers to sustain
the growth in their customer bases.

There has been substantial competitive pressure on installation fees in recent
years. Several significant competitors offer installation prices which match or
are less than BHS prices; however, many of the small local competitors in BHS
markets continue to charge significantly more for installation. Competition in
every market is based on a variety of factors including, but not limited to,
price, product quality, company reputation, service quality, and warranty terms.
Competitive pressure on monitoring rates, while less intense than on
installation fees, is still

                                       4

substantial. The monitoring rates offered by BHS are generally comparable to the
rates offered by other major security companies.

The Federal Telecommunications Reform Act of 1996 contains provisions specific
to the alarm industry, including a five-year waiting period prior to market
entry for regional Bell operating companies ("RBOCs") not already providing
alarm service. With the expiration of the prohibition in February 2001, RBOCs
may become significant competitors in the home alarm business.

Employees

BHS has approximately 2,300 employees, none of whom is covered by a collective
bargaining agreement. BHS believes that its employee relations are satisfactory.

Properties

BHS operates from 57 leased offices and warehouse facilities located throughout
the United States and two leased offices in Canada. All premises protected by
BHS alarm systems are monitored from the central monitoring station in Irving,
Texas. The central monitoring station is leased for a seven-year term ending in
2005, inclusive of renewals. This facility is also occupied by administrative,
technical and marketing services personnel who support branch operations. The
lease for the backup monitoring center in Carrollton, Texas, expires in 2002.
BHS leases all of the 1,178 vehicles used for installation and servicing of its
security systems.

BHS retains ownership of nearly all of the approximately 675,200 systems
currently under contract. When a current customer cancels monitoring services
and does not move, BHS either disables the system or removes the equipment, in
either case fully reserving any remaining book value of the equipment; retaining
ownership helps prevent another alarm company from providing services using BHS
security equipment. On the other hand, when a current customer cancels
monitoring services because of a move, the retention of ownership of the
equipment facilitates the marketing of monitoring services to the new homeowner.

BHS has two patents on its Model #2000 Control Panel and Keypad which expire in
2012 and 2018.

BAX Global

General

BAX Global is a transportation and supply chain management company offering
multi-modal freight forwarding to business-to-business shippers through a global
network. In North America, BAX Global is able to provide overnight, second day
and deferred freight delivery, and internationally it is engaged in
time-definite air and sea delivery, freight forwarding, supply chain management
services and international customs brokerage. In conducting its forwarding
business, BAX Global generally picks up or receives freight shipments from its
customers, consolidates the freight of various customers into shipments for
common destinations, arranges for the transportation of the consolidated freight
to such destinations (using either commercial carriers or, in the case of most
of its United States, Canadian and Mexican shipments, its own transportation
fleet and hub sorting facilities) and, at the destinations, distributes the
consolidated shipments and effects delivery to consignees. For international
shipments, BAX Global also frequently acts as customs broker, facilitating the
clearance of goods through customs at international points of entry. BAX Global
provides transportation customers with supply chain management services and
operates more than 40 logistics warehouse and distribution facilities in key
world markets.

BAX Global specializes in developing supply chain management programs for
companies wanting to quickly enter new global markets or consolidate regional
activity. It concentrates on providing service to customers with significant
supply chain management needs, such as manufacturers of computer and electronics
equipment. BAX Global offers its customers a variety of products and pricing
solutions for their shipment needs, such as guaranteed overnight delivery,
second-day delivery or delivery within one to three business days in North
America. A variety of ancillary services, such as shipment tracking, inventory
control and management reports are also provided. Internationally, BAX Global
offers a similar variety of services including ocean forwarding, door-to-door
delivery and standard and expedited freight services.

BAX Global has the ability to provide freight service to all North American
business communities as well as to virtually all foreign countries through its
network of company-operated stations and agent locations in 123 countries. The
pickup and delivery of freight are accomplished principally by independent
contractors. BAX Global markets its services primarily through its direct sales
force and also employs other marketing methods, including print media
advertising and direct marketing campaigns.

                                       5

BAX Global's freight business has tended to be seasonal, with a significantly
higher volume of shipments generally experienced during March, June and the
period August through December than during the other periods of the year. The
lowest volume of shipments has generally occurred in January and February.

Including United States export and import revenue, BAX Global's international
operations accounted for approximately 71% of its revenues in 2000. Intra-US
revenues accounted for 29% of total revenues in 2000.

BAX Global is continuing to develop import/export and supply chain management
business between shippers and consignees, in countries other than the United
States through BAX Global's network of company-operated stations and agent
locations. BAX Global has agents and sales representatives in many overseas
locations, although such agents and representatives are not subject to long-term
noncancellable contracts.

Because the financial results of BAX Global are reported in US dollars, they are
affected by changes in the value of the various foreign currencies in relation
to the US dollar. Changes in exchange rates may also adversely affect
transactions which are denominated in currencies other than the functional
currency. The diversity of foreign operations helps to mitigate a portion of the
impact that foreign currency fluctuations in any one country may have on the
translated results. BAX Global, from time to time, uses foreign currency forward
contracts to hedge certain transactional risks associated with foreign
currencies. BAX Global is also subject to other risks associated with doing
business in foreign countries, including labor and economic conditions,
political instability, controls on repatriation of earnings and capital,
nationalization, expropriation and other forms of restrictive action by local
governments. The future effects of such risks, if any, on BAX Global cannot be
predicted.

BAX Global's computer system, ARGUS, is a worldwide communications and
information system which, among other things, provides worldwide tracking and
tracing of shipments and various data for management information reports,
enabling customers to improve efficiency and control costs. BAX Global also
utilizes an image processing system to centralize domestic airbill and related
document storage in BAX Global's computers for automated retrieval by any BAX
Global office.

Aircraft Operations

On April 30, 1998, the Company acquired the privately held Air Transport
International LLC ("ATI"). ATI is a US-based freight and passenger airline which
operates a certificated fleet of DC-8 aircraft providing services to BAX Global,
the US Government Air Mobility Command, and other customers. ATI provides North
American lift service in the BAX Global system and domestic and international
lift service for the US Government Air Mobility Command and other charter
customers.

BAX Global utilizes a fleet of twenty-five leased or contracted aircraft
primarily providing regularly scheduled service, throughout the United States
and certain destinations in Canada and Mexico, from its freight sorting hub in
Toledo, Ohio. BAX Global's fleet is also used for charters and to serve other
international markets from time to time. The fleet and hub are primarily
dedicated to providing next-day service to or from domestic, Canadian and
Mexican locations. Besides providing lift capacity to BAX Global, ATI also
services other customers, primarily the US military, using four leased and two
owned planes, five of which are combi-configuration planes.

The following is a summary of the aircraft fleet as of March 2001. This summary
excludes ten planes subject to the BAX Global restructuring plan of which four
are owned planes that have been taken out of service and placed for sale, three
are planes under lease or contract that terminate early 2001, and three are
planes under leases that have been grounded:

                      Commercial Cargo      Combi
                           System       Configuration      Total
- ----------------------------------------------------------------------
                                                  
Leased or Contracted:
   DC-8                      13               3             16
   727                       13               -             13
- ----------------------------------------------------------------------
Total Leased or Contracted   26               3             29
- ----------------------------------------------------------------------
Owned:
   DC-8                       -               2              2
- ----------------------------------------------------------------------
Total Owned:                  -               2              2
- ----------------------------------------------------------------------
Total Planes (a)             26               5             31
======================================================================

(a) Of the 26 planes in the commercial cargo system, 25 are fully dedicated to
BAX Global as opposed to other customers serviced by ATI.

The aircraft in combi configuration (designed to carry cargo and passengers) are
utilized for US Government Air Mobility Command missions. The three which are
not owned are held under leases for terms expiring between January 2002 and
September 2003. At December 31, 2000, BAX Global had seventeen DC-8 cargo
aircraft (including those subject to the restructuring plan) under leases for
terms primarily expiring between January 2001 and July 2003. Thirteen 727 cargo
aircraft were under contract at December 31, 2000, for terms ranging between one
and two years. Based on the current state of the aircraft leasing market, BAX
Global believes that it should be able to renew these leases or enter into new
leases on terms reasonably comparable to those currently in effect.

                                       6

The nightly lift capacity in operation at December 31, 2000, excluding the
capacity related to planes that were subject to BAX Global's restructuring plan,
was approximately 1.4 million pounds, calculated on an average freight density
of 7.5 pounds per cubic foot. BAX Global's nightly lift capacity varies
depending upon the number and type of planes operated by BAX Global at any
particular time. Including trucking capacity available to BAX Global, the
aggregate daily cargo capacity at December 31, 2000, was approximately 2.3
million pounds.

For aircraft owned or held under long-term lease, ATI is generally responsible
for all the costs of operating and maintaining the aircraft, including any
special maintenance or modifications which may be required by Federal Aviation
Administration ("FAA") regulations or orders (see "Government Regulation"
below). In 2000, ATI had cash outlays totaling approximately $50 million on
routine heavy maintenance of its aircraft fleet.

The average airframe age of the fleet operated by ATI is 33 years, however, the
condition of particular aircraft is dependent on their maintenance history.
Factors other than age, such as cycles (essentially the number of flights) can
have a significant impact on an aircraft's serviceability. Generally, cargo
aircraft tend to have fewer cycles than passenger aircraft over comparable time
periods because they have fewer flights per day and longer flight segments.

Fuel costs are a significant element of the total costs of operating BAX
Global's aircraft fleet. For each one cent per gallon increase or decrease in
the price of jet fuel, BAX Global's airline operating costs may increase or
decrease approximately $50 thousand per month. In order to protect against price
increases in jet fuel, from time to time BAX Global enters into hedging and
other agreements, including swap contracts, options and collars.

Fuel prices are subject to world, as well as local market conditions. It is not
possible to predict the impact of future conditions on fuel prices and fuel
availability. Competition in the airfreight industry is such that no assurance
can be given that any future increases in fuel costs (including taxes relating
thereto) will be recoverable in whole or in part from customers.

BAX Global has a lease expiring in April 2019, with the Toledo-Lucas County Port
Authority covering its freight sorting hub and related facilities (the "Hub") at
Toledo Express Airport in Ohio. The Hub consists of various facilities,
including a technologically advanced material handling system which is capable
of sorting approximately one million pounds of freight per hour.

Over the course of 2000, the operating performance of BAX Global's Americas
region was negatively impacted by lower than expected demand and higher
transportation, operating and administrative costs relative to that lower
demand. As such, BAX Global evaluated alternatives directed at returning its
Americas operations to profitability, including ways to improve sales
performance and to reduce transportation, operating and administrative expenses.
During the fourth quarter of 2000, BAX Global finalized a restructuring plan
aimed at reducing the capacity and cost of its airlift capabilities in the US as
well as reducing station operating expenses, sales costs and overhead in the
Americas and Atlantic regions, including:

o    The removal of 10 planes from the fleet, 9 of which were dedicated to
     providing lift capacity in BAX Global's commercial cargo system.

o    The closure of 9 operating stations and realignment of domestic operations.

o    The reduction of employee-related costs at BAX Global and ATI through the
     elimination of approximately 300 full-time positions including aircraft
     crew and station operating, sales and business unit overhead positions.

In addition, certain Atlantic region operations were streamlined in order to
reduce overhead costs and improve overall performance in that region. The
Atlantic region restructuring efforts involved severance costs and station
closing costs in the UK, Denmark, Italy and South Africa. Approximately 50
positions were eliminated, most of which were positions at or above manager
level.

The following is a summary of the charges incurred in the fourth quarter related
to the restructuring:

                                 Americas    Atlantic     Total
(In thousands)                    Region      Region    BAX Global
- ---------------------------------------------------------------------
                                                
Fleet related charges             $49,702          -      49,702
Severance costs                     1,130      1,148       2,278
Station and other closure costs     3,777      1,730       5,507
- ---------------------------------------------------------------------
Total restructuring charge (a)    $54,609      2,878      57,487
=====================================================================

(a) Includes noncash charges of $45,180. Substantially all severance costs are
expected to be paid out before June 30, 2001. Other cash charges primarily
include contractual commitments for aircraft and facilities, approximately
two-thirds of which are expected to be paid out during 2001, with the remainder
expected to be paid out by the end of 2002.

                                       7

Customers

BAX Global's customer base includes thousands of industrial and commercial
shippers, both large and small. The industries they represent include the
automotive, aerospace, healthcare, high technology, retail and other industries
where rapid delivery of high-value products is required. In 2000, no single
customer accounted for more than 5% of BAX Global's total worldwide revenues.
BAX Global has a long-term, noncancellable services contract with a major
airline which expires at the end of 2001.

Competition

The air and ocean freight forwarding and supply chain management industries have
been and are expected to remain highly competitive. The principal competitive
factors in the market are price, the ability to provide consistently fast and
reliable delivery of shipments and the ability to provide ancillary services
such as warehousing, distribution, shipment tracking and sophisticated
information systems and reports. There is aggressive price competition in the
heavy freight market, particularly for the business of high volume shippers. BAX
Global competes with other integrated transportation companies that operate
their own fleet, as well as with air freight forwarders, premium LTL carriers,
express delivery services, passenger airlines and other transportation
companies. Domestically, BAX Global also competes with package delivery services
provided by ground transportation companies, including trucking firms and
surface freight forwarders, that offer specialized time specific services within
limited geographical areas. As a freight forwarder to, from and within
international markets, BAX Global also competes with government-owned or
subsidized passenger airlines and ocean shipping companies. In supply chain
management services, BAX Global competes with many third party logistics
providers.

Government Regulation

The air transportation industry is subject to Federal regulation under the
Federal Aviation Act of 1958, as amended ("FAA"), and pursuant to that statute,
the Department of Transportation (the "DOT") may exercise regulatory authority
over BAX Global. ATI operates an FAA-certificated fleet which is subject to such
regulations. In addition, ATI is subject to FAA regulations since it is an
airline. BAX Global's Toledo, Ohio, hub operations are also subject to the
direction of the FAA.

BAX Global is subject to other various requirements and regulations in
connection with the operation of its motor vehicles, including certain safety
regulations promulgated by the DOT and state agencies.

Employee Relations

BAX Global and its subsidiaries have approximately 10,100 employees worldwide,
of whom about 1,500 are classified as part-time. Approximately 130 of these
employees (principally customer service, clerical and/or dock workers) in BAX
Global's stations at John F. Kennedy Airport, New York, Secaucus, New Jersey,
and Minneapolis, Minnesota are represented by labor unions, that in most cases
are affiliated with the International Brotherhood of Teamsters. In November
2000, flight crewmembers employed by ATI (captains, first officers and flight
engineers), represented for purposes of collective bargaining by the
International Brotherhood of Teamsters, ratified an initial collective
bargaining agreement which covers a 42 month period. As of December 31, 2000,
approximately 180 of these flight crewmembers were employed by ATI. Other
employees are not represented by any labor organization. BAX Global successfully
negotiated contracts in 2000 with the clerical union at John F. Kennedy Airport,
as well as the dock union at Minneapolis, Minnesota. BAX Global did not
experience any significant strike or work stoppage in 2000 and considers that
its employee relations are satisfactory.

Most of BAX Global's cartage operations are conducted by independent
contractors. However, in 2000 BAX Global elected to insource cartage in three
south central division locations.

Properties

BAX Global operates 251 (99 domestic and 152 international) stations with BAX
Global personnel, and has agency agreements with an additional 237 (49 domestic
and 188 international) stations. These stations are located near primary
shipping areas, generally at or near airports. BAX Global-operated domestic
stations, which generally include office space and warehousing facilities, are
located in 44 states, the District of Columbia and Puerto Rico. BAX
Global-operated international facilities are located in 32 countries. Most
stations serve not only the city in which they are located, but also nearby
cities and towns. Nearly all BAX Global-operated stations are held under lease.
The Hub in Toledo, Ohio, is held under a lease expiring in 2019, with rights of
renewal for three five-year periods. Other facilities, including the corporate
headquarters in Irvine, California, are held under leases having terms of one to
ten years.

BAX Global owns or leases, in the United States and Canada, a fleet of 44
automobiles as well as 150 vans and trucks utilized in station work or for
hauling freight between airport facilities and BAX Global's stations.

                                       8

NATURAL RESOURCES

The Company's continuing natural resources businesses ("Other Operations")
include Pittston's timber and natural gas businesses (collectively, "Allied
Operations") and Mineral Ventures that mines and explores for gold.

Allied Operations

Through its Allied Operations, the Company owns non-coal properties, such as
land, hardwood forests and natural gas reserves. The oil and gas rights are
managed by an indirect wholly-owned subsidiary of the Company that, in general,
invests in and receives royalty income from gas development and operations. As
of December 31, 2000, including royalty interests, net proven developed natural
gas reserves located in Virginia and West Virginia approximated 55.8 Bcf. Allied
Operations' wood products subsidiary receives income from the sale of timber,
the operation of a high grade sawmill that produces 7 million board feet
annually, the operation of a railroad tie mill facility that produces 9.2
million board feet of ties (approximately 230 thousand ties) and 6.6 million
board feet of lumber annually, and the operation of a hardwood chip mill that
produces 250 thousand tons annually of hardwood chips for the pulp and paper
industry. The Company owns approximately 225 thousand surface acres of land
including approximately 125 thousand acres of saw timber grade hardwood forests,
mostly in Virginia, comprising approximately 435 million board feet.

Mineral Ventures

Mineral Ventures' business is directed at locating and acquiring mineral assets,
developing advanced stage projects and operating mines. Mineral Ventures
continued to evaluate gold projects in North America and Australia throughout
2000. During the fourth quarter of 2000, the decision was made to discontinue
exploration activities in Nevada. In 2000, Mineral Ventures expended
approximately $5.0 million on all exploration and operational activities.

Mineral Ventures has a 50% direct interest in the Stawell gold mine ("Stawell")
located in Western Victoria, Australia. The remaining 50% interest in Stawell is
owned by Mining Project Investors ("MPI"). In addition, Mineral Ventures has a
45.1% undiluted (40.1% fully diluted) ownership interest in its joint venture
partner MPI. The Stawell gold mine produced approximately 114,500 ounces of gold
in 2000. Mineral Ventures estimates that on December 31, 2000, the Stawell gold
mine had approximately 455,000 ounces of proven and probable gold reserves.

A substantial portion of Mineral Ventures' financial results is derived from
activities in Australia, which has a local currency other than the US dollar.
Because the financial results of Mineral Ventures are reported in US dollars,
they are affected by the changes in the value of the foreign currency in
relation to the US dollar. Rate fluctuations may adversely affect transactions
which are denominated in the Australian dollar. Mineral Ventures, from time to
time, uses foreign currency forward contracts to hedge the currency risks
associated with these transactions. Mineral Ventures also routinely enters into
gold price hedge transactions primarily utilizing spot deferred forward sales
contracts limited in amount to potential gold production over a given period.

Mineral Ventures is also subject to other risks customarily associated with
doing business in foreign countries, including labor and economic conditions.

DISCONTINUED OPERATIONS

The Company's Coal Operations has been reported as a discontinued operation as
of December 31, 2000 due to the Company's formal plan to exit the business. The
following is a brief description of that business.

Coal Operations

General

Coal Operations is primarily engaged in the mining, preparation and marketing of
coal, the purchase of coal for resale, and the sale or leasing of coal lands to
others. Through Coal Operations, the Company produces coal from approximately 23
company or contractor operated surface and deep mines located in Virginia, West
Virginia and eastern Kentucky for consumption in the steam and metallurgical
markets. Steam coal is sold primarily to utilities and industrial customers
located in the eastern United States. Metallurgical coal is sold to steel and
merchant coke producers primarily located in the United States, Western Europe,
the Mediterranean basin and Brazil. Coal Operations has substantial reserves of
low sulphur coal, much of which can be produced from lower cost surface mines.
Moreover, it has a significant share of the premium quality metallurgical coal
reserves in the United States, along with other high quality feed stock seams in
demand by the coke and steel-making industry.

                                       9

Production

The following table indicates the tonnage of coal purchased and produced by Coal
Operations for the years ended 2000, 1999 and 1998.

                                         Years Ended December 31
(In thousands of tons)                   2000      1999     1998
- -------------------------------------------------------------------
                                                 
Produced                                9,805    10,620   12,852
Purchased                               1,524     2,346    3,536
- -------------------------------------------------------------------
Total                                  11,329    12,966   16,388
===================================================================

Sales

The following table indicates the approximate tonnage of coal sold by Coal
Operations in the years ended December 31, 2000, 1999 and 1998 in the domestic
(United States and Canada) and export markets:

                                         Years Ended December 31
(In thousands of tons)                   2000      1999     1998
- -------------------------------------------------------------------
                                                 
Domestic                                9,272     9,360   10,906
Export                                  2,679     3,488    5,831
- -------------------------------------------------------------------
Total sold                             11,951    12,848   16,737
===================================================================

Environmental Matters

The Surface Mining Control and Reclamation Act of 1977 and the regulations
promulgated thereunder ("SMCRA") by the Federal Office of Surface Mining
Reclamation and Enforcement ("OSM"), and the enforcement thereof by the US
Department of the Interior, establish mining and reclamation standards for all
aspects of surface mining as well as many aspects of deep mining. SMCRA also
imposes a tax of $0.35 on each ton of surface-mined coal and $0.15 on each ton
of deep-mined coal. OSM and its state counterparts monitor compliance with SMCRA
and its regulations by the issuance of "notices of violation" which direct the
mine operator to correct the cited conditions within a stated period of time.
Coal Operations' policy is to correct the conditions that are the subject of
these notices or to contest those believed to be without merit in appropriate
proceedings.

As previously reported, Coal Operations has reached a broad settlement with the
OSM involving SMCRA liabilities of former contractors. Coal Operations has also
entered into a number of similar agreements with the states. Under these
agreements, Coal Operations agreed to perform certain reclamation and to pay
certain fees of former contractors. In return, the agencies agreed not to deny
or "block" permits to Coal Operations on account of the contractor liabilities
being settled. Coal Operations is in the process of successfully completing all
required work under these agreements.

Coal Operations is subject to various federal environmental laws, including the
Clean Water Act, the Clean Air Act and the Safe Drinking Water Act, as well as
state laws of similar scope in Virginia, West Virginia, Kentucky and Ohio. These
laws require approval of many aspects of coal mining operations, and both
federal and state inspectors regularly visit Coal Operations' mines and other
facilities to assure compliance.

Federal, state and local authorities strictly monitor the sulphur dioxide and
particulate emissions from electric power plants served by Coal Operations. In
1990, Congress enacted the Clean Air Act Amendments of 1990 that, among other
things, permit utilities to use low sulphur coals in lieu of constructing
expensive sulphur dioxide removal systems. The Company believes this should have
a favorable impact on the marketability of Coal Operations' extensive reserves
of low sulphur coals. However, the Company cannot currently predict the timing
or extent of such favorable impact.

Mine Health and Safety Laws

The coal operating companies included within Coal Operations are generally
liable under federal laws requiring payment of benefits to coal miners with
pneumoconiosis ("black lung"). Further, the Coal Operations' subsidiaries are
subject to the federal black lung excise tax ("FBLET") on domestic coal sales
imposed by the Black Lung Benefits Revenue Act of 1977 and the Black Lung
Benefits Reform Act of 1977, as amended by the Black Lung Benefits and Revenue
Amendments Act of 1981, the Consolidated Omnibus Budget Reconciliation Act of
1985 and the Omnibus Budget Reconciliation Act of 1987. On February 10, 1999,
the US District Court of the Eastern District of Virginia entered a final
judgment in favor of certain of the Company's subsidiaries, ruling that the
Federal Black Lung Excise Tax ("FBLET") imposed under Section 4121 of the
Internal Revenue Code is unconstitutional as applied to export coal sales and
ordering a refund to the subsidiaries. A total of $0.8 million (including
interest) was refunded in 1999 for the FBLET that those companies paid for the
quarter ended March 31, 1997. The Company has sought refunds of the FBLET it
paid on export coal sales for all open statutory periods and expects to receive
such refunds for some or all of that tax paid (plus interest) pursuant to a
review of claim documentation by the Internal Revenue Service. Due to the
uncertainty of the ultimate amounts to be received, which it estimates could
range from $12 million to $20 million (pretax), and timing of the FBLET refunds,
the Company has not currently recorded a receivable for such amounts in its
estimate of operating losses during the sale period. The Company is also
pursuing additional claims pending a decision by the US Supreme Court related to
another company. The ultimate amounts and timing of such additional refunds, if
any, cannot be determined at this time.

                                       10

Although the Company would not be currently liable for a multi-employer pension
plan withdrawal liability associated with its planned exit from the coal
business, it could, under certain circumstances, become liable for such
obligations during the sale process. Such liability, if any, is subject to
several factors, the effects of which cannot be predicted at this time. Those
factors include funding and benefit levels of the plans and the ultimate timing
and form of the sale transactions. Accordingly, the Company has not recorded a
withdrawal liability in the determination of the estimated loss on disposal.

Stringent safety and health standards have been imposed by federal legislation
since 1969 when the Federal Coal Mine Health and Safety Act was adopted, which
resulted in increased operating costs and reduced productivity. The Federal Mine
Safety and Health Act of 1977 significantly expanded the enforcement of health
and safety standards.

Compliance with health and safety laws is, in general, a cost common to all
domestic coal producers. The Company believes that the competitive position of
Coal Operations has not been and should not be adversely affected except in the
export market where Coal Operations competes with various foreign producers
subject to less stringent health and safety regulations.

Health Benefit Act

In October 1992, the Coal Industry Retiree Health Benefit Act of 1992 (the
"Health Benefit Act") was enacted as part of the Energy Policy Act of 1992. The
Health Benefit Act established rules for the payment of future health care
benefits for thousands of retired union mine workers and their dependents. The
Health Benefit Act established a trust fund to which "signatory operators" and
"related persons", including the Company and certain of its subsidiaries
(collectively, the "Pittston Companies"), are jointly and severally liable to
pay annual premiums for assigned beneficiaries, together with a pro rata share
for certain beneficiaries who never worked for such employers ("unassigned
beneficiaries"), including, in the Company's case, the Pittston Companies in
amounts determined on the basis set forth in the Health Benefit Act. In October
1993 and at various times in subsequent years, the Pittston Companies have
received notices from the Social Security Administration (the "SSA") with regard
to the assigned beneficiaries for which the Pittston Companies are responsible
under the Health Benefit Act. In addition, the Health Benefit Act requires the
Pittston Companies to fund, pro rata according to the total number of assigned
beneficiaries, a portion of health benefits for unassigned beneficiaries. At
this time, the funding for such health benefits is being provided from another
source; the statutory authorization to obtain such funds is currently scheduled
to cease by 2005. In the determination of the Pittston Companies' ultimate
obligation under the Health Benefit Act, such funding has been taken into
consideration.

Prior to December 31, 2000, the Company accounted for its obligations under the
Health Benefit Act as a participant in a multi-employer benefit plan and thus,
recognized the annual cost of these obligations on a pay-as-you-go basis. For
2000, 1999 and 1998, cash payments for such amounts were approximately $9.0
million, $10.4 million and $9.6 million, respectively. Pursuant to its formal
plan to exit the coal business, the Company recorded its estimated undiscounted
liability relating to such obligations at December 31, 2000 as a $161.7 million
one-time charge to the net loss from discontinued operations. Such obligations,
if discounted at 7.5%, would provide a present value estimate of approximately
$80 million. The Company currently estimates that the annual cash funding under
the Health Benefit Act for the Pittston Companies' assigned beneficiaries will
continue at about the same annual level for the next several years and should
begin to decline thereafter as the number of such assigned beneficiaries
decreases.

In addition, under the Health Benefit Act, the Pittston Companies are jointly
and severally liable for certain postretirement health benefits for thousands of
additional retired union mine workers and their dependents under plans provided
by the Company. Substantially all of the Company's accumulated postretirement
benefit obligation for retirees of $325.7 million as of December 31, 2000
relates to such retired workers and their beneficiaries.

The ultimate costs that will be incurred by the Company under the Health Benefit
Act and its postretirement medical plans could be significantly affected by,
among other things, the rate of inflation for medical costs, changes in the
number of beneficiaries, governmental funding arrangements and such federal
health benefit legislation of general application as may be enacted.

The Company acts as self-insurer with respect to almost all black lung benefits.
Provision is made for estimated benefits based on annual reports prepared by
outside actuaries. The excess of the present value of expected future benefits
over the accumulated book reserves is recognized over the amortization period.
Cumulative actuarial gains or losses are calculated periodically and amortized
on a straight-line basis. Prior to December 31, 2000, assumptions used in the
calculation of the actuarial present value of black lung benefits were based on
actual retirement experience of the Company's coal employees, black lung claims
incidence, actual dependent information, industry turnover rates, actual medical
and legal cost experience and projected inflation rates. As of December 31,
2000, certain assumptions were modified to reflect the planned sale of Coal
Operations. As of December 31, 2000 and 1999, the actuarially determined
discounted value of estimated future black lung benefits was approximately $47
million and $49 million, respectively. The amount expensed (credited) to
operations for federal and state black lung benefits was $5.3 million in 2000,
$5.1 million in 1999 and ($0.6) million in 1998. In 1998, the black lung credit
was favorably impacted by the amortization of actuarial gains.

                                       11

The Company has established a Voluntary Employees' Beneficiary Association
("VEBA") which is intended to tax efficiently fund certain retiree medical
liabilities primarily for retired coal miners and their dependents. The VEBA may
receive partial funding from the proceeds of the planned sale of the Company's
coal business as well as other sources over time. The Company contributed $15.0
million to the VEBA in December 1999. As of December 31, 2000, the balance of
the VEBA was $15.9 million.

Properties

The principal properties of Coal Operations are coal reserves, coal mines and
coal preparation plants, all of which are located in Virginia, West Virginia and
eastern Kentucky. Such reserves are either owned or leased. Leases of land or
coal mining rights generally are either for a long-term period or until
exhaustion of the reserves, and require the payment of a royalty based generally
on the sales price and/or tonnage of coal mined from a particular property. Many
leases or rights provide for payment of minimum royalties.

Coal Operations owns a 32.5% interest in Dominion Terminal Associates ("DTA"),
which leases and operates a ground storage-to-vessel coal transloading facility
in Newport News, Virginia. DTA has a throughput capacity of 22.0 million tons of
coal per year and ground storage capacity of 2.0 million tons. A portion of Coal
Operations' share of the throughput and ground storage capacity of the DTA
facility is subject to user rights of third parties, which pay Coal Operations a
fee. The DTA facility serves export customers, as well as domestic coal users
located on the eastern seaboard of the United States.

MATTERS RELATING TO FORMER OPERATIONS

In April 1990, the Company entered into a settlement agreement to resolve
certain environmental claims against the Company arising from hydrocarbon
contamination at a petroleum terminal facility ("Tankport") in Jersey City, New
Jersey, which operations were sold in 1983. Under the settlement agreement, the
Company is obligated to pay 80% of the remediation costs. Based on data
available to the Company and its environmental consultants, the Company
estimates its portion of the future actual clean-up costs, on an undiscounted
basis, using existing technologies to be between $6.0 million and $9.5 million.
Management is unable to determine that any amount within that range is a better
estimate due to a variety of uncertainties, which include the extent of the
contamination at the site, the permitted technologies for remediation and the
regulatory standards by which the clean-up will be conducted. The clean-up
estimates have been modified from prior years' in light of cost inflation, the
application of new technologies and certain assumptions the Company is making
with respect to the end use of the property. The estimate of costs and the
timing of payments could change as a result of changes to the remediation plan
required, changes in the technology available to treat the site, unforeseen
circumstances existing at the site and additional cost inflation.

The Company commenced insurance litigation in 1990, in the United States
District Court for the District of New Jersey, seeking a declaratory judgment
that all amounts payable by the Company pursuant to the Tankport obligation were
reimbursable under comprehensive general liability and pollution liability
policies maintained by the Company. The Company was able to conclude settlement
with all of its insurers without a trial. Taking into account the proceeds from
the settlement with its insurers, it is the Company's belief that the ultimate
amount that it would be liable for related to the remediation of the Tankport
site will not have a significant adverse impact on the Company's results of
operations or financial position.

Forward Looking Information

Certain of the matters discussed herein, including statements regarding
increased competition in the home alarm business by regional Bell operating
companies, the possibility that police departments may refuse to respond to
calls from alarm companies and the necessity that BHS use a private response
force, the ability of BAX Global to renew certain aircraft leases or enter into
new leases on reasonably comparable terms, the timing of the payment of charges
related to BAX Global's restructuring, reductions by BAX Global of the dedicated
cargo fleet, the highly competitive nature the air and ocean freight forwarding
and supply chain management industries, the amount of proven and probable gold
reserves in the Stawell gold mine, the amount of natural gas reserves, the
outcome of BAX Global's plans to reduce capacity and cost of its airlift
capabilities in the US and to reduce station operating expenses, sales costs and
overhead in the Americas and Atlantic regions, the amount and timing of FBLET
refunds, the competitive position of Coal Operations, costs of long-term benefit
obligations including black lung expenses, projections about market risk,
environmental clean-up estimates, Health Benefit Act expenses and the timing of
funding and source of funds for the VEBA involve forward looking information
which is subject to known and unknown risks, uncertainties, and contingencies
which could cause actual results, performance or achievements, to differ
materially from those which are anticipated. Such risks, uncertainties and
contingencies, many of which are beyond the control of the Company, include, but
are not limited to, strategic decisions by the regional Bell operating
companies, the incidence of false alarms, the market for airplanes, the actual
amount of gold reserves in the Stawell gold mine, the actual amount of natural
gas reserves held by Allied Operations, the position taken by the Internal
Revenue Service with respect to the timing and amount of FBLET refunds, overall
economic and business conditions, foreign currency exchange rates, the demand
for the Company's products and services, the timing and ultimate outcome of the
sale of the coal assets, initiatives to control costs and increase
profitability, pricing and other competitive industry factors, fuel prices, new
government regulations and/or legislative initiatives, issuance of permits,
judicial decisions, variations in costs or expenses including interest rates,
variations in the spot prices of coal and the ability of counterparties to
perform.

                                       12

- -------------------------------------------------------------------------------
ITEM 3. LEGAL PROCEEDINGS
- -------------------------------------------------------------------------------

Not applicable.

ITEM 4. SUBMISSION OF MATTER TO A VOTE OF SECURITY HOLDERS
- -------------------------------------------------------------------------------

Not applicable.

                                       13

The Pittston Company and Subsidiaries
Executive Officers of the Registrant

The following is a list as of March 15, 2001, of the names and ages of the
executive and other officers of Pittston and the names and ages of certain
officers of its subsidiaries, indicating the principal positions and offices
held by each. There is no family relationship between any of the officers named.

Name                         Age        Positions and Offices Held                                     Held Since
- ------------------------------------------------------------------------------------------------------------------
                                                                                                
Executive Officers:
Michael T. Dan                50        President and Chief Executive Officer                            1998
                                        Chairman of the Board                                            1999
James B. Hartough             53        Vice President-Corporate Finance and Treasurer                   1988
Frank T. Lennon               59        Vice President-Human Resources and Administration                1985
Austin F. Reed                49        Vice President, General Counsel and Secretary                    1994
Robert T. Ritter              49        Vice President and Chief Financial Officer                       1998

Other Officers:
Amanda N. Aghdami             32        Controller                                                       1997
Arthur E. Wheatley            58        Vice President and Director of Risk Management                   1988

Subsidiary Officers:
Joseph L. Carnes              43        President of BAX Global Inc.                                     2000
Thomas W. Garges, Jr.         61        President and Chief Executive Officer of Pittston Coal Company   1999
Richard Hickson               44        President of Brink's, Incorporated                               2000
Peter A. Michel               58        President and Chief Executive Officer of Brink's Home            1988
                                        Security, Inc.
==================================================================================================================

Executive and other officers of Pittston are elected annually and serve at the
pleasure of its Board of Directors.

Mr. Dan was elected President, Chief Executive Officer and Director of The
Pittston Company on February 6, 1998 and was elected Chairman of the Board
effective January 1, 1999. He also serves as Chief Executive Officer of Brink's
Incorporated, a position he has held since July 1993 and as President and Chief
Executive Officer of Brink's Holding Company, a position he has held since
December 31, 1995. He also serves as Chairman of the Board of BAX Global Inc., a
position he has held since February 1998. He also serves as Chairman of the
Board of Pittston Mineral Ventures, a position he has held since August 31, 1998
and as Chairman of the Board of Pittston Coal Company, a position he has held
since September 1, 1998. From August 1992 to July 1993 he served as President of
North American operations of Brink's, Incorporated and as Executive Vice
President of Brink's, Incorporated from 1985 to 1992.

Mr. Ritter joined The Pittston Company as Vice President and Chief Financial
Officer in August of 1998. From June 1996 to July 1998, he served as Chief
Financial Officer of WLR Foods, Inc. He was a private investor and financial
consultant from April 1995 to May 1996 and was Treasurer at American Cyanamid
Company from March 1991 to January 1994 and Controller from February 1994 to
March 1995.

Messrs. Hartough, Lennon, Reed and Wheatley have served in their present
positions for more than the past five years.

Ms. Aghdami was elected to her current position on November 7, 1997. She joined
The Pittston Company in September 1996 as Manager of Financial Reporting. Prior
to September 1996, she was an Audit Manager with Ernst & Young LLP.

Mr. Carnes was elected President of BAX Global inc. in May 2000. He joined BAX
Global as President - US and Canada in September 1999. Prior to joining BAX
Global, he served as Executive Vice President, North America for Fritz Companies
Inc. where he was employed from 1987 - 1999.

Mr. Hickson was elected President of Brink's, Incorporated in November 2000. He
had served as Vice President and Managing Director of Brink's Europe from June
1999, and joined the Brink's organization as Managing Director - Brink's Limited
U.K. in February 1998. Prior to joining Brink's, Mr. Hickson served as a
Consultant from October 1995 to February 1998, and Chief Executive Officer for
Holmes Protection Group, Inc. USA where he was employed from February 1990 to
August 1995.

Mr. Garges joined Pittston Coal Company on January 4, 1999 as President and
Chief Executive Officer. Before joining Pittston Coal, he served as President
and Chief Executive Officer of Rochester and Pittsburgh Coal Company. From 1971
to 1986, he was Executive Vice President - Operations for Pittston Coal and
President of Pittston Coal's Pyxis operations.

Mr. Michel was elected President and Chief Executive Officer of Brink's Home
Security, Inc. in April 1988. From 1985 to 1987, he served as President and
Chief Executive Officer of Penn Central Technical Security Co.

                                       14

- -------------------------------------------------------------------------------
PART II
- -------------------------------------------------------------------------------
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED SHAREHOLDER MATTERS
- -------------------------------------------------------------------------------

Prior to January 14, 2000, the Company was comprised of three groups - Pittston
Brink's Group, Pittston BAX Group, and Pittston Minerals Group. The Pittston
Brink's Group included the Brink's and BHS operations of the Company. The
Pittston BAX Group included the BAX Global operations of the Company. The
Pittston Minerals Group included the Pittston Coal Company and Mineral Ventures
operations of the Company. Also, prior to January 14, 2000, the Company had
three classes of common stock: Pittston Brink's Group Common Stock ("Brink's
Stock"), Pittston BAX Group Common Stock ("BAX Stock") and Pittston Minerals
Group Common Stock ("Minerals Stock"), which were designed to provide
shareholders with separate securities reflecting the performance of the Brink's
Group, the BAX Group and the Minerals Group, respectively.

On December 6, 1999, the Company announced that its Board of Directors approved
the elimination of the tracking stock capital structure by an exchange of all
outstanding shares of Minerals Stock and BAX Stock for shares of Brink's Stock
(the "Exchange"). The Exchange took place on January 14, 2000 (the "Exchange
Date"). On the Exchange Date, holders of Minerals Stock received 0.0817 shares
of Brink's Stock for each share of their Minerals Stock; and holders of BAX
Stock received 0.4848 shares of Brink's Stock for each share of their BAX Stock.
See Note 10 to the Company's consolidated financial statements for additional
information concerning the Exchange on pages 44 through 46 of the Company's 2000
Annual Report, which are incorporated herein by reference. From and after the
Exchange Date, Brink's Stock is the only outstanding class of common stock of
the Company and continues to trade on the New York Stock Exchange under the
symbol "PZB". Prior to the Exchange Date, the Brink's Stock reflected the
performance of the Brink's Group only; after the Exchange Date, the Brink's
Stock reflects the performance of the Company as a whole. Shares of Brink's
Stock after the Exchange are hereinafter referred to as "Pittston Common Stock".

Reference is made to pages 56 and 57 of the Company's 2000 Annual Report which
is incorporated herein by reference, for information required by this item.

On January 18, 2001, the Company issued $75 million of Senior Notes ("Notes") in
a private placement. The Notes are comprised of $55 million of 7.84% Senior
Notes, Series A, due in 2007, and $20 million of 8.02% Senior Notes, Series B,
due in 2008. The Notes were offered and sold solely to a limited number of
institutional investors and were exempt from registration under Section 4(2) of
the Securities Act of 1933. Proceeds were used to repay borrowings under a bank
credit facility.

ITEM 6. SELECTED FINANCIAL DATA
- -------------------------------------------------------------------------------
Reference is made to pages 58 through 59 of the Company's 2000 Annual Report
which is incorporated herein by reference, for information required by this
item.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
        FINANCIAL CONDITIONS
- -------------------------------------------------------------------------------

Reference is made to pages 6 through 22 of the Company's 2000 Annual Report
which is incorporated herein by reference, for information required by this
item.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
- -------------------------------------------------------------------------------

The information regarding quantitative and qualitative disclosures about market
risk is included in this report under Item 7.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
- -------------------------------------------------------------------------------

Reference is made to pages 23 through 56 of the Company's 2000 Annual Report
which is incorporated herein by reference, for information required by this
item.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
        FINANCIAL DISCLOSURE
- -------------------------------------------------------------------------------

Not applicable.

                                       15

- -------------------------------------------------------------------------------
PART III
- -------------------------------------------------------------------------------
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
- -------------------------------------------------------------------------------

The information required by this Item regarding directors is incorporated by
reference to the Company's definitive proxy statement to be filed pursuant to
Regulation 14A within 120 days after December 31, 2000. The information
regarding executive officers is included in this report following Item 4, under
the caption "Executive Officers of the Registrant."

ITEM 11. EXECUTIVE COMPENSATION
- -------------------------------------------------------------------------------

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
- -------------------------------------------------------------------------------

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
- -------------------------------------------------------------------------------

The information required by Items 11 through 13 is incorporated by reference to
the Company's definitive proxy statement to be filed pursuant to Regulation 14A
within 120 days after December 31, 2000.

- -------------------------------------------------------------------------------
PART IV
- -------------------------------------------------------------------------------
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
- -------------------------------------------------------------------------------

(a)      1.      All financial  statements - see index to financial
                 statements and schedules.

         2.      Financial  statement  schedules  - see  index  to

         3.      Exhibits - see exhibit index.

- -------------------------------------------------------------------------------
(b) No reports on Form 8-K were filed during the fourth quarter of 2000.

Undertaking

For the purposes of complying with the amendments to the rules governing Form
S-8 (effective July 13, 1990) under the Securities Act of 1933, the undersigned
Registrant hereby undertakes as follows, which undertaking shall be incorporated
by reference into Registrant's Registration Statements on Form S-8 Nos. 2-64258,
33-2039, 33-21393, 33-23333, 33-69040, 33-53565, 333-02219, 333-78631 and
333-78633.

Insofar as indemnification for liabilities arising under the Securities Act of
1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act
of 1933 and is, therefore, unenforceable. In the event that a claim for
indemnification against liabilities (other than the payment by the Registrant of
expenses incurred or paid by a director, officer or controlling person of the
Registrant in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in connection with the
securities being registered, the Registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.

                                       16

The Pittston Company and Subsidiaries

Signatures

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized, on March 28, 2001.

                                             The Pittston Company
                                         -----------------------------
                                                 (Registrant)

                                     By     /s/  M. T. Dan
                                        -----------------------------------
                                                 (M. T. Dan,
                                           Chairman, President and
                                          Chief Executive Officer)

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the Registrant and
in the capacities indicated, on March 28, 2001.

      Signatures                                 Title
  -----------------                            ----------
                                             
  R. G. Ackerman*                               Director
  Betty C. Alewine*                             Director
  J. R. Barker*                                 Director
  Marc C. Breslawsky*                           Director
  J. L. Broadhead*                              Director
  W. F. Craig*                                  Director

  /s/ M. T. Dan                           Chairman, President and
  --------------------                  Chief Executive Officer
  (M. T. Dan)                        (principal executive officer)

  G. Grinstein*                                 Director
  R. M. Gross*                                  Director

  /s/ R. T. Ritter                            Vice President
  --------------------                and Chief Financial Officer
  (R. T. Ritter)            (principal financial officer and principal accounting officer)

  C. S. Sloane*                                 Director

 *By  /s/ M. T. Dan
      -------------
      (M. T. Dan,
      Attorney-in-Fact)

                                       17

The Pittston Company and Subsidiaries

Index to Financial Statements and Schedules

Financial Statements:

The consolidated financial statements of The Pittston Company, listed in the
index below which are included in the Company's 2000 Annual Report for the year
ended December 31, 2000, are incorporated herein by reference. With the
exception of the pages listed in the index below and the information
incorporated by reference included in Parts I, II and IV, the 2000 Annual Report
of the Shareholders is not deemed filed as part of this report.

PITTSTON ANNUAL REPORT

                                                          
     Management's Discussion and Analysis of Results of
       Operations and Financial Condition.................  6-22
     Independent Auditors' Report.........................    23
     Consolidated Balance Sheets..........................    24
     Consolidated Statements of Operations................ 25-26
     Consolidated Statements of Shareholders' Equity......    27
     Consolidated Statements of Cash Flows................    28
     Notes to Consolidated Financial Statements........... 29-56
     Selected Financial Data ............................. 58-59

Financial Statement Schedules:

Schedules are omitted because they are not material, not applicable or not
required, or the information is included elsewhere in the financial statements.

                                       18

The Pittston Company and Subsidiaries
Exhibit Index

Each Exhibit listed previously filed document is hereby incorporated by
reference to such document.

Exhibit
Number                   Description
      
2(i)     Membership Interest Acquisition Agreement Among Air Transport
         International LLC and BAX Global Inc., dated February 3, 1998. Exhibit
         2 to the Registrant's Current Report on Form 8-K filed May 14, 1998.

2(ii)    Share Purchase Agreement, dated as of January 27, 1998, between Brink's
         Security International, Inc., acting as Purchaser, and Generale de
         Transport et D'Industrie, acting as Seller. Exhibit 10(v) to the
         Registrant's Annual Report on Form 10-K for the year ended December 31,
         1998 (the "1998 Form 10-K").

2(iii)   Shareholders' Agreement, dated as of January 10, 1997, between Brink's
         Security International, Inc., and Valores Tamanaco, C.A. Exhibit 10(w)
         to the 1998 Form 10-K.

3(i)     The Registrant's Articles of Correction to its Articles of
         Incorporation. Exhibit 3(i) to the Registrant's Quarterly Report on
         Form 10-Q for the quarter ended March 31, 1998.

3(ii)    The Registrant's Bylaws, as amended through July 14, 2000. Exhibit 3(b)
         to the Registrant's Quarterly Report on Form 10-Q for the quarter ended
         June 30, 2000.

4(a)     (i)    Amended and Restated Rights Agreement dated as of January 14,
                2000 (the "Rights Agreement"), between the Registrant and Bank
                Boston, N.A., as Rights Agent.

         (ii)   Form of Right Certificate for Rights.

         Instruments defining the rights of holders of long-term debt of the
         Registrant and its consolidated subsidiaries have been omitted because
         the amount of debt under any such instrument does not exceed 10% of the
         total assets of the Registrant and its consolidated subsidiaries. The
         Registrant agrees to furnish a copy of any such instrument to the
         Commission upon request. Exhibit 4(a) to the Registrant's Annual Report
         on Form 10-K for the year ended December 31, 1999 (the "1999 Form
         10-K").

10(a)*   The Key Employees' Incentive Plan, as amended. Exhibit 10(a) to the
         1998 Form 10-K.

10(b)*   The Key Employees' Deferred Compensation Program, as amended and
         restated as of January 14, 2000. Exhibit 10(b) to the 1999 Form 10-K.

10(c)*   (i)     The Registrant's Pension Equalization Plan as amended. Exhibit
                 10(e)(I) to the Registrant's Annual Report on Form 10-K for the
                 year ended December 31, 1997 (the "1997 Form 10-K").

         (ii)    Amended and Restated Trust Agreement, dated December 1, 1997,
                 between Registrant and Chase Manhattan Bank, as Trustee (the
                 "Trust Agreement"). Exhibit 10(e)(ii) to the 1997 Form 10-K.

         (iii)   Amendment No. 1 to Trust Agreement, dated as of August 18,
                 1999. Exhibit 10(c)(iii) to the 1999 Form 10-K.

         (iv)    Trust Agreement under the Pension Equalization Plan, Retirement
                 Plan for Non-Employee Directors and Certain Contractual
                 Arrangements of The Pittston Company made as of September 16,
                 1994, by and between the Registrant and Chase Manhattan Bank
                 (National Association), as Trustee. Exhibit 10(I) to the
                 Registrant's Quarterly Report on Form 10-Q for the quarter
                 ended September 30, 1994 (filed November 14, 1994 - File No.
                 1-9148) (the "Third Quarter 1994 Form 10-Q").

         (v)     Form of letter agreement dated as of September 16, 1994,
                 between the Registrant and one of its officers. Exhibit 10(e)
                 to the Third Quarter 1994 Form 10-Q.

         (vi)    Form of letter agreement dated as of September 16, 1994,
                 between the Registrant and Participants pursuant to the Pension
                 Equalization Plan. Exhibit 10(f) to the Third Quarter 1994 Form
                 10-Q.

10(d)*   The Registrant's Executive Salary Continuation Plan. Exhibit 10(e) to
         the Registrant's Annual Report on Form 10-K for the year ended December
         31, 1991 (filed March 26, 1991 - File No. 1-9148) (the "1991 Form
         10-K").

10(e)*   The Registrant's Non-Employee Directors' Stock Option Plan, as amended
         and restated as of January 14, 2000. Exhibit 10(e) to the 1999 Form
         10-K.

                                       19

      
10(f)*   The Registrant's 1988 Stock Option Plan, as amended and restated as of
         January 14, 2000. Exhibit 10(f) to the 1999 Form 10-K.

10(g)*   The Pittston Company Management Performance Improvement Plan. Exhibit
         10(g) to the 1999 Form 10-K.

10(h)*   Form of change in control agreement replacing all prior change in
         control agreements and amendments and modifications thereto, between
         the Registrant (or a subsidiary) and various officers of the
         Registrant. Exhibit 10(l)(ii) to the 1997 Form 10-K.

10(i)*   Form of Indemnification Agreement entered into by the Registrant with
         its directors and officers. Exhibit 10(l) to the 1991 Form 10-K.

10(j)*   (i)       Registrant's Retirement Plan for Non-Employee Directors, as
                   amended. Exhibit 10(g) to the Third Quarter 1994 Form 10-Q.

         (ii)      Form of letter agreement dated as of September 16, 1994,
                   between the Registrant and its Non-Employee Directors
                   pursuant to Retirement Plan for Non-Employee Directors.
                   Exhibit 10(h) to the Third Quarter 1994 Form 10-Q.

10(k)*   (i)       Form of severance agreement between the Registrant (or a
                   subsidiary) and various of the Registrant's officers.
                   Exhibit 10(o)(ii) to the 1997 Form 10-K.

10(l)*   Registrant's Directors' Stock Accumulation Plan, as amended and
         restated as of January 14, 2000. Exhibit 10(l) to the 1999 Form 10-K.

10(m)*   Registrant's Amended and Restated Plan for Deferral of Directors' Fees.
         Exhibit 10(o) to the Registrant's Annual Report on Form 10-K for the
         year ended December 31, 1989 (filed March 24, 1990 - File No. 1-9148).

10(n)    (i)       Lease dated as of April 1, 1989, between Toledo-Lucas County
                   Port Authority (the "Authority"), as Lessor, and Burlington,
                   as Lessee. Exhibit 10(i) to the Registrant's Quarterly Report
                   on Form 10-Q for the quarter ended June 30, 1989 (filed
                   August 11, 1989 - File No. 1-9148) (the "Second Quarter 1989
                   Form 10-Q").

         (ii)      Lease Guaranty Agreement dated as of April 1, 1989, between
                   Burlington (formerly Burlington Air Express Management Inc.),
                   as Guarantor, and the Authority. Exhibit 10(ii) to the Second
                   Quarter 1989 Form 10-Q.

         (iii)     Trust Indenture dated as of April 1, 1989 between the
                   Authority and Society Bank & Trust (formerly, Trustcorp.
                   Bank, Ohio) (the "Trustee"), as Trustee. Exhibit 10(iii) to
                   the Second Quarter 1989 Form 10-Q.

         (iv)      Assignment of Basic Rent and Rights Under a Lease and Lease
                   Guaranty dated as of April 1, 1989 from the Authority to the
                   Trustee. Exhibit 10(iv) to the Second Quarter 1989 Form 10-Q.

         (v)       Open-End First Leasehold Mortgage and Security Agreement
                   dated as of April 1, 1989 from the Authority to the Trustee.
                   Exhibit 10(v) to the Second Quarter 1989 Form 10-Q.

         (vi)      First Supplement to Lease dated as of January 1, 1990,
                   between the Authority and Burlington, as Lessee. Exhibit 10
                   to the Registrant's Quarterly Report on Form 10-Q for the
                   quarter ended March 31, 1990 (filed May 15, 1990 - File No.
                   1-9148).

         (vii)     Revised and Amended Second Supplement to Lease dated as of
                   September 1, 1990, between the Authority and Burlington.
                   Exhibit 10(i) to the Registrant's Quarterly Report on Form
                   10-Q for the quarter ended September 30, 1990 (filed November
                   13, 1990 - File No. 1-9148) (the "Third Quarter 1990 Form
                   10-Q").

         (viii)    Amendment Agreement dated as of September 1, 1990, among City
                   of Toledo, Ohio, the Authority, Burlington and the Trustee.
                   Exhibit 10(ii) to the Third Quarter 1990 Form 10-Q.

         (ix)      Assumption and Non-Merger Agreement dated as of September 1,
                   1990, among Burlington, the Authority and the Trustee.
                   Exhibit 10(iii) to the Third Quarter 1990 Form 10-Q.

         (x)       First Supplemental Indenture between Toledo-Lucas County Port
                   Authority, and Society National Bank, as Trustee, dated as of
                   March 1, 1994. Exhibit 10.1 to the Registrant's Quarterly
                   Report on Form 10-Q for the quarter ended March 31, 1994
                   (filed

                                       20

                
                   May 12, 1994 - File No. 1-9148) (the "First Quarter 1994
                   Form 10-Q").

         (xi)      Third Supplement to Lease between Toledo-Lucas County Port
                   Authority, as Lessor, and Burlington Air Express Inc., as
                   Lessee, dated as of March 1, 1994. Exhibit 10.2 to the First
                   Quarter 1994 Form 10-Q.

         (xii)     Fourth Supplement to Lease between Toledo-Lucas County Port
                   Authority, as Lessor, and Burlington Air Express Inc., as
                   Lessee, dated as of June 1, 1991. Exhibit 10.3 to the First
                   Quarter 1994 Form 10-Q.

         (xiii)    Fifth Supplement to Lease between Toledo-Lucas County Port
                   Authority, as Lessor, and Burlington Air Express Inc., as
                   Lessee, dated as of December 1, 1996. Exhibit 10(r)(xiii) to
                   the Registrant's Annual Report on Form 10-K for the year
                   ended December 31, 1996.

10(o)    $370,000,000 Credit Agreement, dated as of October 3, 2000, among the
         Registrant, as Borrower, Certain of Its Subsidiaries, as Guarantors,
         Various Lenders and Fleet National Bank and Chase Manhattan Bank as
         Co-Syndication Agents and Bank of America, N.A., as Administrative
         Agent. Exhibit 10 to the Registrant's Quarterly Report on Form 10-Q for
         the quarter ended September 30, 2000.

10(p)*   Employment Agreement dated as of May 4, 1998, between the Registrant
         and M. T. Dan. Exhibit 10(a) to the Registrant's Quarterly Report on
         Form 10-Q for the quarter ended September 30, 1998 (the "Third Quarter
         1998 Form 10-Q").

10(q)*   Executive Agreement dated as of May 4, 1998, between the Registrant and
         M. T. Dan. Exhibit 10(b) to the Third Quarter 1998 Form 10-Q.

10(r)*   Executive Agreement dated as of August 7, 1998, between the Registrant
         and R. T. Ritter. Exhibit 10(c) to the Third Quarter 1998 Form 10-Q.

10(s)*   Severance Agreement dated as of August 7, 1998, between the Registrant
         and R. T. Ritter. Exhibit 10(d) to the Third Quarter 1998 Form 10-Q.

10(t)    Trust Agreement for The Pittston Company Employee Welfare Benefit
         Trust. Exhibit 10(t) to the 1999 Form 10-K.

10(u)    (i)     Note Purchase Agreement dated as of January 18, 2001, between
                 the Registrant and the Purchasers listed on Schedule A
                 thereto.

         (ii)    Form of Series A Promissory Note.

         (iii)   Form of Series B Promissory Note.

10(v)    (i)     Receivables Purchase Agreement dated as of December 15, 2000,
                 among BAX Funding Corporation, BAX Global Inc., Liberty Street
                 Funding Corp. and the Bank of Nova Scotia.

         (ii)    Purchase and Sale Agreement dated as of December 15, 2000,
                 among the Originators named therein, BAX Funding Corporation
                 and BAX Global Inc.

13       2000 Annual Report of the Registrant.

21       Subsidiaries of the Registrant.

23       Consent of independent auditors.

24       Powers of attorney.

99*      (a)     Amendment to Registrant's Pension-Retirement Plan relating to
                 preservation of assets of the Pension-Retirement Plan upon a
                 change in control. Exhibit 99 to the Registrant's Annual Report
                 on Form 10-K for the year ended December 31, 1992 (filed March
                 20, 1993 - File No. 1-9148).

- -----------------
*Management contract or compensatory plan or arrangement.

                                       21

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                          STATEMENT OF DIFFERENCES
                          ------------------------

The section symbol shall be expressed as ............................. 'SS'
The registered trademark symbol shall be expressed as.................  'r'

================================================================================

                              THE PITTSTON COMPANY

                     7.84% Senior Notes, Series A, due 2007
                     8.02% Senior Notes, Series B, due 2008

                             NOTE PURCHASE AGREEMENT

                          Dated as of January 18, 2001

================================================================================

                                Table of Contents

                                                                                                             Page

                                                                                                             ----
                                                                                                       
1.       AUTHORIZATION OF NOTES...............................................................................1
         1.1.         The Notes...............................................................................1
         1.2.         The Subsidiary Guarantees...............................................................1

2.       SALE AND PURCHASE OF NOTES...........................................................................2

3.       CLOSING..............................................................................................2

4.       CONDITIONS TO CLOSING................................................................................2
         4.1.         Representations and Warranties..........................................................3
         4.2.         Performance; No Default.................................................................3
         4.3.         Compliance Certificates.................................................................3
         4.4.         Opinions of Counsel.....................................................................3
         4.5.         Subsidiary Guarantees...................................................................3
         4.6.         Purchase Permitted by Applicable Law, etc...............................................4
         4.7.         Payment of Special Counsel Fees.........................................................4
         4.8.         Private Placement Numbers...............................................................4
         4.9.         Changes in Corporate Structure..........................................................4
         4.10.        Proceedings and Documents...............................................................4
         4.11.        Sale of Notes to Other Purchasers.......................................................4

5.       REPRESENTATIONS AND WARRANTIES OF THE COMPANY........................................................5
         5.1.         Organization; Power and Authority.......................................................5
         5.2.         Authorization, etc......................................................................5
         5.3.         Disclosure..............................................................................5
         5.4.         Organization and Ownership of Shares of Subsidiaries; Affiliates........................6
         5.5.         Financial Statements....................................................................6
         5.6.         Compliance with Laws, Other Instruments, etc............................................7
         5.7.         Governmental Authorizations, etc........................................................7
         5.8.         Litigation; Observance of Agreements, Statutes and Orders...............................7
         5.9.         Taxes...................................................................................7
         5.10.        Title to Property; Leases...............................................................8
         5.11.        Licenses, Permits, etc..................................................................8
         5.12.        Compliance with ERISA...................................................................8
         5.13.        Private Offering by the Company.........................................................9
         5.14.        Use of Proceeds; Margin Regulations.....................................................10
         5.15.        Existing Indebtedness...................................................................10
         5.16.        Foreign Assets Control Regulations, etc.................................................10
         5.17.        Status Under Certain Statutes...........................................................11
         5.18.        Environmental Matters...................................................................11

6.       REPRESENTATIONS OF THE PURCHASER.....................................................................11

                                                                                                       
         6.1.         Purchase of Notes.......................................................................11
         6.2.         Source of Funds.........................................................................12

7.       INFORMATION AS TO COMPANY............................................................................13
         7.1.         Financial and Business Information......................................................13
         7.2.         Officer's Certificate...................................................................16
         7.3.         Inspection..............................................................................16

8.       PREPAYMENT OF THE NOTES..............................................................................17
         8.1.         Required Prepayments of Series A Notes..................................................17
         8.2.         Optional Prepayments with Make-Whole Amount.............................................18
         8.3.         Notice of Prepayment....................................................................18
         8.4.         Allocation of Partial Prepayments.......................................................18
         8.5.         Maturity; Surrender, etc................................................................18
         8.6.         Purchase of Notes.......................................................................19
         8.7.         Make-Whole Amount.......................................................................19

9.       AFFIRMATIVE COVENANTS................................................................................20
         9.1.         Compliance with Law.....................................................................20
         9.2.         Insurance...............................................................................21
         9.3.         Maintenance of Properties...............................................................21
         9.4.         Payment of Taxes and Claims.............................................................21
         9.5.         Corporate Existence, etc................................................................22
         9.6.         Additional Subsidiary Guarantees; Release of Subsidiary Guarantees......................22

10.      NEGATIVE COVENANTS...................................................................................23
         10.1.        Liens...................................................................................23
         10.2.        Restricted Subsidiary Indebtedness......................................................24
         10.3.        Limitation on Sale and Leaseback Transactions...........................................25
         10.4.        Limitation on Asset Sales...............................................................25
         10.5.        Financial Conditions....................................................................26
         10.6.        Merger, Consolidation, etc..............................................................27
         10.7.        Lines of Business.......................................................................28
         10.8.        Transactions with Affiliates............................................................28
         10.9.        Designation of Restricted and Unrestricted Subsidiaries.................................29

11.      EVENTS OF DEFAULT....................................................................................29

12.      REMEDIES ON DEFAULT, ETC.............................................................................31
         12.1.        Acceleration............................................................................31
         12.2.        Other Remedies..........................................................................32
         12.3.        Rescission..............................................................................32
         12.4.        No Waivers or Election of Remedies, Expenses, etc.......................................33

13.      REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES........................................................33
         13.1.        Registration of Notes...................................................................33
         13.2.        Transfer and Exchange of Notes..........................................................33

                                      (ii)

                                                                                                       
         13.3.        Replacement of Notes....................................................................34

14.      PAYMENTS ON NOTES....................................................................................34
         14.1.        Place of Payment........................................................................34
         14.2.        Home Office Payment.....................................................................34

15.      EXPENSES, ETC........................................................................................35
         15.1.        Transaction Expenses....................................................................35
         15.2.        Survival................................................................................35

16.      SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT.........................................35

17.      AMENDMENT AND WAIVER.................................................................................36
         17.1.        Requirements............................................................................36
         17.2.        Solicitation of Holders of Notes........................................................36
         17.3.        Binding Effect, etc.....................................................................36
         17.4.        Notes held by Company, etc..............................................................37

18.      NOTICES..............................................................................................37

19.      REPRODUCTION OF DOCUMENTS............................................................................37

20.      CONFIDENTIAL INFORMATION.............................................................................38

21.      SUBSTITUTION OF PURCHASER............................................................................39

22.      MISCELLANEOUS........................................................................................39
         22.1.        Successors and Assigns..................................................................39
         22.2.        Construction............................................................................39
         22.3.        Consent to Jurisdiction; Service of Process; Waiver of Jury Trial.......................39
         22.4.        Payments Due on Non-Business Days.......................................................40
         22.5.        Severability............................................................................40
         22.6.        Accounting Terms; Changes in GAAP.......................................................40
         22.7.        Counterparts............................................................................41
         22.8.        Governing Law...........................................................................41

Exhibit 1.1(a)                 --       Form of 7.84% Senior Note, Series A, due 2007
Exhibit 1.1(b)                 --       Form of 8.02% Senior Note, Series B, due 2008
Exhibit 1.2                    --       Form of Subsidiary Guarantee
Exhibit 4.4(a)(i)              --       Form of Opinion of Special Counsel for the Company
Exhibit 4.4(a)(ii)             --       Form of Opinion of Counsel for the Company
Exhibit 4.4(b)                 --       Form of Opinion of Special Counsel for the Purchasers

                                     (iii)

                                  
Schedule A                     --       Names and Addresses of Purchasers
Schedule B                     --       Defined Terms
Schedule 5.3                   --       Disclosure Documents
Schedule 5.4                   --       Subsidiaries
Schedule 5.8                   --       Litigation
Schedule 5.11                  --       Licenses, etc.
Schedule 5.15                  --       Existing Indebtedness

                                      (iv)

                              THE PITTSTON COMPANY
                               1801 Bayberry Court
                                 P.O. Box 18100
                               Richmond, VA 23226
                             Telephone: 804-289-9600
                            Telecopier: 804-289-9770

                     7.84% Senior Notes, Series A, due 2007
                     8.02% Senior Notes, Series B, due 2008

                                                          As of January 18, 2001

TO EACH OF THE PURCHASERS LISTED IN
   THE ATTACHED SCHEDULE A:

Ladies and Gentlemen:

         THE PITTSTON COMPANY, a Virginia corporation (the "Company"), agrees
with you as follows:

1.    AUTHORIZATION OF NOTES.

1.1.  The Notes.

         The Company has duly authorized the issue and sale of $75,000,000
aggregate principal amount of its Senior Notes, comprising $55,000,000 aggregate
principal amount of its 7.84% Senior Notes, Series A, due 2007 (the "Series A
Notes") and $20,000,000 aggregate principal amount of its 8.02% Senior Notes,
Series B, due 2008 (the "Series B Notes" and, together with the Series A Notes,
collectively the "Notes"), such notes to be substantially in the respective
forms set out in Exhibits 1.1(a) and 1.1(b). As used herein, the term "Notes"
shall mean all notes (irrespective of series unless otherwise specified)
originally delivered pursuant to this Agreement and the Other Agreements
referred to below and all notes delivered in substitution or exchange for any
such note and, where applicable, shall include the singular number as well as
the plural. The terms "Note", "Series A Note" and "Series B Note" mean one of
the Notes, Series A Notes and Series B Notes, respectively. Certain capitalized
and other terms used in this Agreement are defined in Schedule B; references to
a "Schedule" or an "Exhibit" are, unless otherwise specified, to a Schedule or
an Exhibit attached to this Agreement.

1.2.  The Subsidiary Guarantees.

         The Notes will be unconditionally guaranteed by certain of the
Company's existing Restricted Subsidiaries, pursuant to subsidiary guarantees
substantially in the form of Exhibit 1.2 (individually a "Subsidiary Guarantee"
and collectively the "Subsidiary

                                       2

Guarantees", which terms shall include after the date of the Closing all
additional Subsidiary Guarantees from time to time executed and delivered
pursuant to Section 9.6).

2.    SALE AND PURCHASE OF NOTES.

         Subject to the terms and conditions of this Agreement, the Company will
issue and sell to you and you will purchase from the Company, at the Closing
provided for in Section 3, Notes of the series and in the principal amount
specified opposite your name in Schedule A at the purchase price of 100% of the
principal amount thereof. Contemporaneously with entering into this Agreement,
the Company is entering into separate Note Purchase Agreements (the "Other
Agreements") identical with this Agreement with each of the other purchasers
named in Schedule A (the "Other Purchasers"), providing for the sale at such
Closing to each of the Other Purchasers of Notes of the series and in the
principal amount specified opposite its name in Schedule A. Your obligation
hereunder and the obligations of the Other Purchasers under the Other Agreements
are several and not joint obligations and you shall have no obligation under any
Other Agreement and no liability to any Person for the performance or
non-performance by any Other Purchaser thereunder.

3.    CLOSING.

         The sale and purchase of the Notes to be purchased by you and the Other
Purchasers shall occur at the offices of Willkie Farr & Gallagher, 787 Seventh
Avenue, New York, NY 10019 at 10:00 a.m., New York time, at a closing (the
"Closing") on January 18, 2001 or on such other Business Day thereafter on or
prior to January 23, 2001 as may be agreed upon by the Company and you and the
Other Purchasers. At the Closing the Company will deliver to you the Notes to be
purchased by you in the form of a single Note of the series to be purchased by
you (or such greater number of Notes in denominations of at least $100,000 as
you may request prior to the Closing) dated the date of the Closing and
registered in your name (or in the name of your nominee), against delivery by
you to the Company or its order of immediately available funds in the amount of
the purchase price therefor by wire transfer of immediately available funds to
the Company's account (account number 9104010609) at The Chase Manhattan Bank,
ABA number 021000021.

         If at the Closing the Company shall fail to tender such Notes to you as
provided above in this Section 3, or any of the conditions specified in Section
4 shall not have been fulfilled to your satisfaction, you shall, at your
election, be relieved of all further obligations under this Agreement, without
thereby waiving any rights you may have by reason of such failure or such
nonfulfillment.

4.    CONDITIONS TO CLOSING.

         Your obligation to purchase and pay for the Notes to be sold to you at
the Closing is subject to the fulfillment to your satisfaction, prior to or at
the Closing, of the following conditions:

                                      3

4.1.  Representations and Warranties.

         The representations and warranties of the Company in this Agreement
shall be correct when made and at the time of the Closing.

4.2.  Performance; No Default.

         The Company shall have performed and complied with all agreements and
conditions contained in this Agreement required to be performed or complied with
by it prior to or at the Closing and after giving effect to the issue and sale
of the Notes (and the application of the proceeds thereof as contemplated by
Section 5.14) no Default or Event of Default shall have occurred and be
continuing. Neither the Company nor any Subsidiary shall have entered into any
transaction since the date of the Memorandum that would have been prohibited by
Section 10.1 or 10.2 had such Sections applied since such date.

4.3.  Compliance Certificates.

         (a) Officer's Certificate. The Company shall have delivered to you an
Officer's Certificate, dated the date of the Closing, certifying that the
conditions specified in Sections 4.1, 4.2 and 4.9 have been fulfilled.

         (b) Secretary's Certificate. The Company shall have delivered to you a
certificate of the Secretary or an Assistant Secretary of the Company certifying
as to the resolutions attached thereto and other corporate proceedings relating
to the authorization, execution and delivery of the Notes and this Agreement and
the Other Agreements.

4.4.  Opinions of Counsel.

         You shall have received opinions in form and substance satisfactory to
you, dated the date of the Closing (a) from Cravath, Swaine & Moore, special
counsel for the Company, substantially in the form set forth in Exhibit
4.4(a)(i) and from Austin F. Reed, Vice President, General Counsel and Secretary
of the Company substantially in the form set forth in Exhibit 4.4(a)(ii) (and
the Company hereby instructs its counsel to deliver such opinions to you) and
(b) from Willkie Farr & Gallagher, your special counsel in connection with such
transactions, substantially in the form set forth in Exhibit 4.4(b) and covering
such other matters incident to such transactions as you may reasonably request.

4.5.  Subsidiary Guarantees.

         A Subsidiary Guarantee, dated as of a date on or before the date of the
Closing and in the form hereinabove recited, shall have been executed and
delivered by Brink's, Incorporated, Brink's Home Security, Inc., Pittston
Services Group, Inc., Brink's Holding Company, BAX Holding Company, Pittston
Coal Company, BAX Global Inc. and Pittston Minerals Group Inc. (in such capacity
sometimes individually called a "Subsidiary Guarantor" and collectively the
"Subsidiary Guarantors", which term shall include after the date of the Closing
all additional Restricted Subsidiaries that from time to time execute and
deliver Subsidiary Guarantees pursuant to Section 9.6) and each such Subsidiary
Guarantee shall be in full force and effect.

                                       4

4.6.  Purchase Permitted by Applicable Law, etc.

         On the date of the Closing your purchase of Notes shall (a) be
permitted by the laws and regulations of each jurisdiction to which you are
subject, without recourse to provisions (such as Section 1405(a)(8) of the New
York Insurance Law) permitting limited investments by insurance companies
without restriction as to the character of the particular investment, (b) not
violate any applicable law or regulation (including without limitation
Regulation T, U or X of the Board of Governors of the Federal Reserve System)
and (c) not subject you to any tax, penalty or liability under or pursuant to
any applicable law or regulation, which law or regulation was not in effect on
the date hereof. If requested by you, you shall have received an Officer's
Certificate certifying as to such matters of fact as you may reasonably specify
to enable you to determine whether such purchase is so permitted.

4.7.  Payment of Special Counsel Fees.

         Without limiting the provisions of Section 15.1, the Company shall have
paid on or before the Closing the fees, charges and disbursements of your
special counsel referred to in Section 4.4 to the extent reflected in a
statement of such counsel rendered to the Company at least one Business Day
prior to the Closing.

4.8.  Private Placement Numbers.

         A Private Placement Number issued by Standard & Poor's CUSIP Service
Bureau (in cooperation with the Securities Valuation Office of the National
Association of Insurance Commissioners) shall have been obtained for the Notes
of each series.

4.9.  Changes in Corporate Structure.

         The Company shall not have changed its jurisdiction of incorporation or
been a party to any merger or consolidation or succeeded to all or any
substantial part of the liabilities of any other entity at any time following
the date of the most recent financial statements referred to in Section 5.5.

4.10. Proceedings and Documents.

         All corporate and other proceedings in connection with the transactions
contemplated by this Agreement and all documents and instruments incident to
such transactions shall be satisfactory to you and your special counsel, and you
and your special counsel shall have received all such counterpart originals or
certified or other copies of such documents as you or they may reasonably
request.

4.11. Sale of Notes to Other Purchasers.

         The Company shall sell to the Other Purchasers and the Other Purchasers
shall purchase the Notes to be purchased by them at the Closing as specified in
Schedule A.

                                       5

5.    REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

         The Company represents and warrants to you that:

5.1.  Organization; Power and Authority.

         The Company is a corporation duly incorporated, validly existing and in
good standing under the laws of its jurisdiction of incorporation, and is duly
qualified as a foreign corporation and is in good standing in each jurisdiction
in which such qualification is required by law, other than those jurisdictions
as to which the failure to be so qualified or in good standing could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. The Company has the corporate power and authority to own or hold
under lease the properties it purports to own or hold under lease, to transact
the business it transacts and proposes to transact, to execute and deliver this
Agreement and the Other Agreements and the Notes and to perform the provisions
hereof and thereof.

5.2.  Authorization, etc.

         This Agreement and the Other Agreements and the Notes have been duly
authorized by all necessary corporate action on the part of the Company, and
this Agreement constitutes, and upon execution and delivery thereof each Note
will constitute, a legal, valid and binding obligation of the Company
enforceable against the Company in accordance with its terms, except as such
enforceability may be limited by (a) applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of
creditors' rights generally and (b) general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law).

5.3.  Disclosure.

         The Company, through its agent, Credit Suisse First Boston Corporation,
has delivered to you a copy of a Confidential Direct Placement Memorandum, dated
November 2000 (the "Memorandum"), relating to the transactions contemplated
hereby. The Memorandum fairly describes, in all material respects, the general
nature of the business and principal properties of the Company and its
Subsidiaries, except that the description of the coal business which the Company
intends to dispose of is limited. This Agreement, the Memorandum (including the
Appendices thereto), the documents, certificates or other writings delivered to
you by or on behalf of the Company in connection with the transactions
contemplated hereby and described in Schedule 5.3 (together with the Memorandum,
the "Disclosure Documents"), and the financial statements included in the
Appendices to the Memorandum, taken as a whole, do not contain any untrue
statement of a material fact or omit to state any material fact necessary to
make the statements therein not misleading in light of the circumstances under
which they were made. Since December 31, 1999, there has been no change in the
financial condition, operations, business, properties or prospects of the
Company or any Subsidiary except as disclosed in the Disclosure Documents or in
the financial statements included in the Appendices to the Memorandum and other
changes that individually or in the aggregate could not reasonably be expected
to have a Material Adverse Effect. There is no fact known to the Company that
could

                                       6

reasonably be expected to have a Material Adverse Effect that has not been set
forth herein or in the Memorandum or in the other Disclosure Documents.

5.4.  Organization and Ownership of Shares of Subsidiaries; Affiliates.

         (a) Schedule 5.4 contains (except as noted therein) complete and
correct lists (i) of the Company's Subsidiaries, showing, as to each Subsidiary,
the correct name thereof, the jurisdiction of its organization, and the
percentage of shares of each class of its capital stock or similar equity
interests outstanding owned by the Company and each other Subsidiary and (ii) of
the Company's directors and senior officers. Schedule 5.4 also identifies each
Restricted Subsidiary and each Unrestricted Subsidiary as of the date of this
Agreement. No Subsidiary listed in Schedule 5.4 is a guarantor under the Bank
Credit Agreement other than the Subsidiary Guarantors listed in Section 4.5.

         (b) All of the outstanding shares of capital stock or similar equity
interests of each Subsidiary shown in Schedule 5.4 as being owned by the Company
and its Subsidiaries have been validly issued, are fully paid and nonassessable
and are owned by the Company or another Subsidiary free and clear of any Lien
(except as otherwise disclosed in Schedule 5.4).

         (c) Each Subsidiary identified in Schedule 5.4 is a corporation or
other legal entity duly incorporated, validly existing and in good standing
under the laws of its jurisdiction of organization, and is duly qualified as a
foreign corporation or other legal entity and is in good standing in each
jurisdiction in which such qualification is required by law, other than those
jurisdictions as to which the failure to be so qualified or in good standing
could not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect. Each such Subsidiary has the corporate or other power
and authority to own or hold under lease the properties it purports to own or
hold under lease and to transact the business it transacts and proposes to
transact and, in the case of Subsidiary Guarantors, to execute and deliver and
perform its obligations under their respective Subsidiary Guarantees.

         (d) No Restricted Subsidiary is a party to, or otherwise subject to any
legal restriction or any agreement (other than this Agreement, the agreements
listed on Schedule 5.4 and customary limitations imposed by corporate law
statutes) restricting the ability of such Subsidiary to pay dividends out of
profits or make any other similar distributions of profits to the Company or any
of its Subsidiaries that owns outstanding shares of capital stock or similar
equity interests of such Subsidiary.

5.5.  Financial Statements.

         The Company's financial statements included in the Appendices to the
Memorandum (including in each case the related schedules and notes) fairly
present in all material respects the consolidated financial position of the
Company and its Subsidiaries as of the respective dates specified in such
Schedule and the consolidated results of their operations and cash flows for the
respective periods so specified and have been prepared in accordance with GAAP
consistently applied throughout the periods involved except as set forth in the
notes thereto (subject, in the case of any interim financial statements, to
normal year-end adjustments).

                                       7

5.6.  Compliance with Laws, Other Instruments, etc.

         The execution, delivery and performance by the Company of this
Agreement and the Notes and by the Subsidiary Guarantors of their respective
Subsidiary Guarantees will not (i) contravene, result in any breach of, or
constitute a default under, or result in the creation of any Lien in respect of
any property of the Company or any Subsidiary under, any indenture, mortgage,
deed of trust, loan, purchase or credit agreement, lease, corporate charter or
by-laws, or any other agreement or instrument to which the Company or any
Subsidiary is bound or by which the Company or any Subsidiary or any of their
respective properties may be bound or affected, (ii) conflict with or result in
a breach of any of the terms, conditions or provisions of any order, judgment,
decree, or ruling of any court, arbitrator or Governmental Authority applicable
to the Company or any Subsidiary or (iii) violate any provision of any statute
or other rule or regulation of any Governmental Authority applicable to the
Company or any Subsidiary.

5.7.  Governmental Authorizations, etc.

         No consent, approval or authorization of, or registration, filing or
declaration with, any Governmental Authority is required for the validity of the
execution, delivery or performance by the Company of this Agreement or the Notes
or by the Subsidiary Guarantors of their respective Subsidiary Guarantees.

5.8.  Litigation; Observance of Agreements, Statutes and Orders.

         (a) Except as disclosed in Schedule 5.8, there are no actions, suits or
proceedings pending or, to the knowledge of the Company, threatened against or
affecting the Company or any Subsidiary or any property of the Company or any
Subsidiary in any court or before any arbitrator of any kind or before or by any
Governmental Authority that, individually or in the aggregate, could reasonably
be expected to have a Material Adverse Effect.

         (b) Neither the Company nor any Subsidiary is in default under any term
of any agreement or instrument to which it is a party or by which it is bound,
or any order, judgment, decree or ruling of any court, arbitrator or
Governmental Authority or is in violation of any applicable law, ordinance, rule
or regulation (including without limitation Environmental Laws) of any
Governmental Authority, which default or violation, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect.

5.9.  Taxes.

         The Company and its Subsidiaries have filed all tax returns that are
required to have been filed in any jurisdiction, and have paid all taxes shown
to be due and payable on such returns and all other taxes and assessments levied
upon them or their properties, assets, income or franchises, to the extent such
taxes and assessments have become due and payable and before they have become
delinquent, except for any taxes and assessments (a) the amount of which is not
individually or in the aggregate Material or (b) the amount, applicability or
validity of which is currently being contested in good faith by appropriate
proceedings and with respect to which the Company or a Subsidiary, as the case
may be, has established adequate reserves in accordance with GAAP. The Company
knows of no basis for any other tax or assessment that could reasonably be
expected to have a Material Adverse Effect. The charges, accruals and

                                       8

reserves on the books of the Company and its Subsidiaries in respect of Federal,
state or other taxes for all fiscal periods are adequate. The Federal income tax
liabilities of the Company and its Subsidiaries have been determined by the
Internal Revenue Service and paid for all fiscal years up to and including the
fiscal year ended December 31, 1993.

5.10. Title to Property; Leases.

         The Company and its Subsidiaries have good and sufficient title to
their respective properties that individually or in the aggregate are Material,
including all such properties reflected in the most recent audited balance sheet
referred to in Section 5.5 or purported to have been acquired by the Company or
any Subsidiary after said date (except as sold or otherwise disposed of in the
ordinary course of business), in each case free and clear of Liens prohibited by
this Agreement. All leases that individually or in the aggregate are Material
are valid and subsisting and are in full force and effect in all material
respects.

5.11. Licenses, Permits, etc.

         Except as disclosed in Schedule 5.11,

          (a) the Company and its Subsidiaries own or possess all licenses,
     permits, franchises, authorizations, patents, copyrights, proprietary
     software, service marks, trademarks and trade names, or rights thereto,
     that individually or in the aggregate are Material, without known conflict
     with the rights of others;

          (b) to the knowledge of the Company, no product of the Company
     infringes in any material respect any license, permit, franchise,
     authorization, patent, copyright, proprietary software, service mark,
     trademark, trade name or other right owned by any other Person; and

          (c) to the knowledge of the Company, there is no Material violation by
     any Person of any right of the Company or any of its Subsidiaries with
     respect to any patent, copyright, proprietary software, service mark,
     trademark, trade name or other right owned or used by the Company or any of
     its Subsidiaries.

5.12. Compliance with ERISA.

         (a) The Company and each ERISA Affiliate have operated and administered
each Plan in compliance with all applicable laws except for such instances of
noncompliance as have not resulted in and could not reasonably be expected to
result in a Material Adverse Effect. Neither the Company nor any ERISA Affiliate
has incurred any liability pursuant to Title I or IV of ERISA or the penalty or
excise tax provisions of the Code relating to employee benefit plans (as defined
in Section 3 of ERISA), and no event, transaction or condition has occurred or
exists that could reasonably be expected to result in the incurrence of any such
liability by the Company or any ERISA Affiliate, or in the imposition of any
Lien on any of the rights, properties or assets of the Company or any ERISA
Affiliate, in either case pursuant to Title I or IV of ERISA or to such penalty
or excise tax provisions or to section 401(a)(29) or 412 of the Code, other than
such liabilities or Liens as would not be individually or in the aggregate
Material.

                                       9

         (b) The present value of the aggregate benefit liabilities under each
of the Plans (other than Multiemployer Plans), determined as of the end of such
Plan's most recently ended plan year on the basis of the actuarial assumptions
specified for funding purposes in such Plan's most recent actuarial valuation
report, did not exceed the aggregate current value of the assets of such Plan
allocable to such benefit liabilities. The term "benefit liabilities" has the
meaning specified in section 4001 of ERISA and the terms "current value" and
"present value" have the meaning specified in section 3 of ERISA.

         (c) The Company and its ERISA Affiliates have not incurred withdrawal
liabilities that have not been discharged (and are not currently subject to
contingent withdrawal liabilities) under section 4201 or 4204 of ERISA in
respect of Multiemployer Plans that individually or in the aggregate are
Material.

         (d) Except as disclosed in the Disclosure Documents, the expected post
retirement benefit obligation (determined as of the last day of the Company's
most recently ended fiscal year in accordance with Financial Accounting
Standards Board Statement No. 106, without regard to liabilities attributable to
continuation coverage mandated by section 4980B of the Code) of the Company and
its Subsidiaries is not Material.

         (e) With respect to each employee benefit plan, if any, disclosed by
you in writing to the Company in accordance with Section 6.2(c), neither the
Company nor any "affiliate" of the Company (as defined in Section V(c) of the
QPAM Exemption) has at this time, nor has exercised at any time during the
immediately preceding year, the authority to appoint or terminate the "QPAM" (as
defined in Part V of the QPAM Exemption) disclosed by you to the Company
pursuant to Section 6.2(c) as manager of any of the assets of any such plan or
to negotiate the terms of any management agreement with such QPAM on behalf of
any such plan, and the Company is not an "affiliate" (as so defined) of such
QPAM. The Company has advised you if it is a party in interest with respect to
any employee benefit plan originally disclosed by you in accordance with Section
6.2(b) or 6.2(e). The execution and delivery of this Agreement and the issuance
and sale of the Notes at the Closing hereunder will not involve any prohibited
transaction (as such term is defined in section 406(a) of ERISA and section
4975(c)(1)(A)-(D) of the Code), that could subject the Company or any holder of
a Note to any tax or penalty on prohibited transactions imposed under said
section 4975 of the Code or by section 502(i) of ERISA. The representation by
the Company in the preceding sentence of this Section 5.12(e) is made in
reliance upon and subject to the accuracy of your representation in Section 6.2
as to the source of the funds used to pay the purchase price of the Notes to be
purchased by you (including without limitation after giving effect to your
necessary change in the source in respect of a party in interest identified by
the Company as aforesaid).

5.13. Private Offering by the Company.

         Neither the Company nor anyone acting on its behalf has offered the
Notes, the Subsidiary Guarantees or any similar securities for sale to, or
solicited any offer to buy any of the same from, or otherwise approached or
negotiated in respect thereof with, any person other than you, the Other
Purchasers and not more than 35 other Institutional Investors, each of which has
been offered the Notes at a private sale for investment. Neither the Company nor
anyone acting on its behalf has taken, or will take, any action that would
subject the issuance or sale of the

                                       10

Notes or the issuance of the Subsidiary Guarantees to the registration
requirements of Section 5 of the Securities Act.

5.14. Use of Proceeds; Margin Regulations.

         The Company will apply the net proceeds of the sale of the Notes to
repay Indebtedness and for general corporate purposes. No part of the proceeds
from the sale of the Notes hereunder will be used, and no part of the proceeds
of such Indebtedness being repaid was used, directly or indirectly, for the
purpose of buying or carrying any margin stock within the meaning of Regulation
U of the Board of Governors of the Federal Reserve System (12 CFR 221), or for
the purpose of buying or carrying or trading in any securities under such
circumstances as to involve the Company in a violation of Regulation X of said
Board (12 CFR 224) or to involve any broker or dealer in a violation of
Regulation T of said Board (12 CFR 220). Margin stock does not constitute more
than 5% of the value of the consolidated assets of the Company and its
Subsidiaries and the Company does not have any present intention that margin
stock will constitute more than 25% of the value of such assets. As used in this
Section, the terms "margin stock" and "purpose of buying or carrying" shall have
the meanings assigned to them in said Regulation U.

5.15. Existing Indebtedness.

         Schedule 5.15 sets forth a complete and correct list of all outstanding
Indebtedness of the Company and its Restricted Subsidiaries in an unpaid
principal amount exceeding $25,000,000 as of December 31, 2000, since which date
there has been no Material change in the amounts, interest rates, sinking funds,
instalment payments or maturities of the Indebtedness of the Company or its
Restricted Subsidiaries. Neither the Company nor any Restricted Subsidiary is in
default, and no waiver of default is currently in effect, in the payment of any
principal or interest on any Indebtedness of the Company or such Restricted
Subsidiary, and no event or condition exists with respect to any Indebtedness of
the Company or any Restricted Subsidiary that would permit (or that with the
giving of notice or the lapse of time, or both, would permit) one or more
Persons to cause such Indebtedness to become due and payable before its stated
maturity or before its regularly scheduled dates of payment.

         Except as disclosed in Schedule 5.15, neither the Company nor any
Restricted Subsidiary has agreed or consented to cause or permit in the future
(upon the happening of a contingency or otherwise) any of its property, whether
now owned or hereafter acquired, to be subject to a Lien that would not be
permitted by Section 10.1 without equally and ratably securing the Notes.

5.16. Foreign Assets Control Regulations, etc.

         Neither the sale of the Notes by the Company hereunder nor its use of
the proceeds thereof will violate the Trading with the Enemy Act, as amended, or
any of the foreign assets control regulations of the United States Treasury
Department (31 CFR, Subtitle B, Chapter V, as amended) or any enabling
legislation or executive order relating thereto.

                                       11

5.17. Status Under Certain Statutes.

         Neither the Company nor any Subsidiary is subject to regulation under
the Investment Company Act of 1940, as amended, the Public Utility Holding
Company Act of 1935, as amended, the Interstate Commerce Act, as amended, or the
Federal Power Act, as amended.

5.18. Environmental Matters.

         Neither the Company nor any Subsidiary has knowledge of any claim or
has received any written notice of any claim against the Company or any of its
Subsidiaries that is outstanding or unresolved, and no proceeding has been
instituted and is pending raising any claim against the Company or any of its
Subsidiaries or any of their respective real properties now owned, leased or
operated by any of them or other assets, alleging any damage to the environment
or violation of any Environmental Laws, except, in each case, such as could not
reasonably be expected to result in a Material Adverse Effect. Except as
otherwise disclosed to you in writing,

          (a) neither the Company nor any Subsidiary has knowledge of any facts
     which would be reasonably likely to result in any claim, public or private,
     against the Company or any Subsidiary under any Environmental Laws, except,
     in each case, for such claims that could not reasonably be expected to
     result in a Material Adverse Effect;

          (b) neither the Company nor any of its Subsidiaries has stored any
     Hazardous Materials on real properties now or formerly owned, leased or
     operated by any of them or disposed of any Hazardous Materials, in any case
     in a manner contrary to any Environmental Laws that could reasonably be
     expected to result in a Material Adverse Effect; and

          (c) all buildings on all real properties now owned, leased or operated
     by the Company or any of its Subsidiaries are in compliance with applicable
     Environmental Laws, except where failure to comply could not reasonably be
     expected to result in a Material Adverse Effect.

6.    REPRESENTATIONS OF THE PURCHASER.

6.1.  Purchase of Notes.

         You represent that you are purchasing the Notes for your own account or
for one or more separate accounts maintained by you or for the account of one or
more pension or trust funds for which you are the financial advisor or
investment manager and not with a view to the distribution thereof, provided
that the disposition of your or their property shall at all times be within your
or their control. You understand that the Notes have not been registered under
the Securities Act and may be resold only if registered pursuant to the
provisions of the Securities Act or if an exemption from registration is
available, except under circumstances where neither such registration nor such
an exemption is required by law, and that the Company is not required to
register the Notes.

                                       12

6.2.  Source of Funds.

         You represent that at least one of the following statements is an
accurate representation as to each source of funds (a "Source") to be used by
you to pay the purchase price of the Notes to be purchased by you hereunder:

          (a) the Source is an "insurance company general account", as such term
     is defined in Prohibited Transaction Exemption ("PTE") 95-60 (issued July
     12, 1995), and there is no plan with respect to which the aggregate amount
     of such general account's reserves and liabilities for the contracts held
     by or on behalf of such plan and all other plans maintained by the same
     employer (and affiliates thereof as defined in section V(a)(1) of PTE
     95-60) or by the same employee organization (in each case determined in
     accordance with PTE 95-60) exceeds or will exceed 10% of the total of all
     reserves and liabilities of such general account (determined in accordance
     with PTE 95-60, exclusive of separate account liabilities, plus any
     applicable surplus) as of the date of the Closing; or

          (b) the Source is either (i) an insurance company pooled separate
     account, within the meaning of PTE 90-1 (issued January 29, 1990), or (ii)
     a bank collective investment fund, within the meaning of the PTE 91-38
     (issued July 12, 1991) and, except for any employee benefit plan or a group
     of plans disclosed to the Company in writing pursuant to this paragraph (b)
     (in response to which the Company has not advised you that it is a party in
     interest with respect to any such plan or group of plans), no employee
     benefit plan or group of plans maintained by the same employer or employee
     organization beneficially owns more than 10% of all assets allocated to
     such pooled separate account or collective investment fund; or

          (c) the Source constitutes assets of an "investment fund" (within the
     meaning of Part V of the QPAM Exemption) managed by a "qualified
     professional asset manager" or "QPAM" (within the meaning of Part V of the
     QPAM Exemption), no employee benefit plan's assets that are included in
     such investment fund, when combined with the assets of all other employee
     benefit plans established or maintained by the same employer or by an
     affiliate (within the meaning of Section V(c)(1) of the QPAM Exemption) of
     such employer or by the same employee organization and managed by such
     QPAM, exceed 20% of the total client assets managed by such QPAM, the
     conditions of Part I(c) and (g) of the QPAM Exemption are satisfied,
     neither the QPAM nor a person controlling or controlled by the QPAM
     (applying the definition of "control" in section V(e) of the QPAM
     Exemption) owns a 5% or more interest in the Company and (i) the identity
     of such QPAM and (ii) the names of all employee benefit plans whose assets
     are included in such investment fund have been disclosed to the Company in
     writing pursuant to this paragraph (c); or

          (d) the Source is a governmental plan; or

          (e) the Source is one or more employee benefit plans, or a separate
     account or trust fund comprised of one or more employee benefit plans, each
     of which has been

                                       13

     identified to the Company in writing pursuant to this paragraph (e) and the
     Company has not advised you that it is a party in interest with respect to
     any such plan; or

          (f) the Source does not include assets of any employee benefit plan,
     other than a plan exempt from the coverage of ERISA.

As used in this Section 6.2, the terms "employee benefit plan", "governmental
plan", "party in interest" and "separate account" shall have the respective
meanings assigned to such terms in section 3 of ERISA.

7.    INFORMATION AS TO COMPANY.

7.1.  Financial and Business Information.

         The Company shall deliver to each holder of Notes that is an
Institutional Investor:

          (a) Quarterly Statements -- within 60 days after the end of each
     quarterly fiscal period in each fiscal year of the Company (other than the
     last quarterly fiscal period of each such fiscal year), duplicate copies of

               (i) a consolidated balance sheet of the Company and its
          Subsidiaries or its Restricted Subsidiaries as at the end of such
          quarter, and

               (ii) consolidated statements of income and cash flows of the
          Company and its Subsidiaries or its Restricted Subsidiaries, for such
          quarter and (in the case of the second and third quarters) for the
          portion of the fiscal year ending with such quarter,

     setting forth in each case in comparative form the figures for the
     corresponding periods in the previous fiscal year, all in reasonable
     detail, prepared in accordance with GAAP applicable to quarterly financial
     statements generally, and certified by a Senior Financial Officer as fairly
     presenting, in all material respects, the financial position of the
     companies being reported on and their results of operations and cash flows,
     subject to changes resulting from year-end adjustments, provided that
     delivery within the time period specified above of copies of the Company's
     Quarterly Report on Form 10-Q prepared in compliance with the requirements
     therefor and filed with the Securities and Exchange Commission shall be
     deemed to satisfy the requirements of this Section 7.1(a);

          (b) Annual Statements -- within 120 days after the end of each fiscal
     year of the Company, duplicate copies of,

               (i) a consolidated balance sheet of the Company and its
          Subsidiaries or its Restricted Subsidiaries as at the end of such
          year, and

               (ii) consolidated statements of income, changes in shareholders'
          equity and cash flows of the Company and its Subsidiaries or its
          Restricted Subsidiaries for such year,

                                       14

          setting forth in each case in comparative form the figures for the
          previous fiscal year, all in reasonable detail, prepared in accordance
          with GAAP, and accompanied by

                    (A) an opinion thereon of independent public accountants of
               recognized national standing, which opinion shall state that such
               financial statements present fairly, in all material respects,
               the financial position of the companies being reported upon and
               their results of operations and cash flows and have been prepared
               in conformity with GAAP, and that the examination of such
               accountants in connection with such financial statements has been
               made in accordance with generally accepted auditing standards,
               and that such audit provides a reasonable basis for such opinion
               in the circumstances,

                    (B) a certificate of such accountants stating that they have
               reviewed this Agreement and stating further whether, in making
               their audit, they have become aware of any condition or event
               that then constitutes a Default or an Event of Default, and, if
               they are aware that any such condition or event then exists,
               specifying the nature and period of the existence thereof (it
               being understood that such accountants shall not be liable,
               directly or indirectly, for any failure to obtain knowledge of
               any Default or Event of Default unless such accountants should
               have obtained knowledge thereof in making an audit in accordance
               with generally accepted auditing standards or did not make such
               an audit), and

                    (C) in case such audited financial statements include the
               accounts of Unrestricted Subsidiaries and all Unrestricted
               Subsidiaries, if taken as a single Subsidiary, produced more than
               10% of Consolidated Net Income for such fiscal year or the assets
               of all Unrestricted Subsidiaries exceeded 10% of the consolidated
               assets of the Company and its Subsidiaries as of the last day of
               such fiscal year, a certificate of a Senior Financial Officer
               containing calculations in reasonable detail deleting the
               accounts of all Unrestricted Subsidiaries from such financial
               statements,

     provided that the delivery within the time period specified above of the
     Company's Annual Report on Form 10-K for such fiscal year (together with
     the Company's annual report to shareholders, if any, prepared pursuant to
     Rule 14a-3 under the Exchange Act) prepared in accordance with the
     requirements therefor and filed with the Securities and Exchange
     Commission, together with the accountants' certificate described in clause
     (B) above and (if required) the certificate of a Senior Financial Officer
     described in clause (C) above, shall be deemed to satisfy the requirements
     of this Section 7.1(b);

          (c) SEC and Other Reports -- promptly upon their becoming available,
     one copy of (i) each financial statement, written report, material notice
     or proxy statement sent by the Company or any Restricted Subsidiary
     generally to its public securities holders or its lending banks, (ii) each
     regular or periodic report, each registration statement (without exhibits
     except as expressly requested by such holder), and each prospectus and all
     amendments thereto filed by the Company or any Restricted Subsidiary with
     the Securities and Exchange Commission and (iii) all press releases and

                                       15

     other statements made available generally by the Company to the public
     concerning developments that are Material;

          (d) Notice of Default or Event of Default -- promptly, and in any
     event within five days after a Responsible Officer becoming aware of the
     existence of any Default or Event of Default or that any Person has given
     any notice or taken any action with respect to a claimed default hereunder
     or that any Person has given any notice or taken any action with respect to
     a claimed default of the type referred to in Section 11(f), a written
     notice specifying the nature and period of existence thereof and what
     action the Company is taking or proposes to take with respect thereto;

          (e) ERISA Matters -- promptly, and in any event within five days after
     a Responsible Officer becoming aware of any of the following, a written
     notice setting forth the nature thereof and the action, if any, that the
     Company or an ERISA Affiliate proposes to take with respect thereto:

               (i) with respect to any Plan, any reportable event, as defined in
          section 4043(b) of ERISA and the regulations thereunder, for which
          notice thereof has not been waived pursuant to such regulations as in
          effect on the date hereof;

               (ii) the taking by the PBGC of steps to institute, or the
          threatening by the PBGC of the institution of, proceedings under
          section 4042 of ERISA for the termination of, or the appointment of a
          trustee to administer, any Plan, or the receipt by the Company or any
          ERISA Affiliate of a notice from a Multiemployer Plan that such action
          has been taken by the PBGC with respect to such Multiemployer Plan; or

               (iii) any event, transaction or condition that could result in
          the incurrence of any liability by the Company or any ERISA Affiliate
          pursuant to Title I or IV of ERISA or the penalty or excise tax
          provisions of the Code relating to employee benefit plans, or in the
          imposition of any Lien on any of the rights, properties or assets of
          the Company or any ERISA Affiliate pursuant to Title I or IV of ERISA
          or such penalty or excise tax provisions, if such liability or Lien,
          taken together with any other such liabilities or Liens then existing,
          would have a Material Adverse Effect;

          (f) Notices from Governmental Authority -- promptly, and in any event
     within 30 days of receipt thereof, copies of any notice to the Company or
     any Subsidiary from any United States Federal or state Governmental
     Authority relating to any order, ruling, statute or other law or regulation
     that could reasonably be expected to have a Material Adverse Effect; and

          (g) Requested Information -- with reasonable promptness, such other
     data and information relating to the business, operations, affairs,
     financial condition, assets or properties of the Company or any of its
     Subsidiaries or relating to the ability of the Company to perform its
     obligations hereunder and under the Notes or relating to the ability of a
     Subsidiary Guarantor to perform its obligations under its respective

                                       16

     Subsidiary Guarantee, in each case as from time to time may be reasonably
     requested in writing by any such holder of Notes (subject to the
     limitations of the final paragraph of Section 7.3).

7.2. Officer's Certificate.

         Each set of financial statements delivered to a holder of Notes
pursuant to Section 7.1(a) or Section 7.1(b) shall be accompanied by a
certificate of a Senior Financial Officer setting forth:

          (a) Covenant Compliance -- the information (including detailed
     calculations) required in order to establish whether the Company was in
     compliance with the requirements of Sections 10.1 through 10.8 inclusive,
     during the quarterly or annual period covered by the statements then being
     furnished (including with respect to each such Section, where applicable,
     the calculations of the maximum or minimum amount, ratio or percentage, as
     the case may be, permissible under the terms of such Sections, and the
     calculation of the amount, ratio or percentage then in existence); and

          (b) Default -- a statement that such Senior Financial Officer has
     reviewed the relevant terms hereof and has made, or caused to be made,
     under his or her supervision, a review of the transactions and conditions
     of the Company and its Subsidiaries from the beginning of the quarterly or
     annual period covered by the statements then being furnished to the date of
     the certificate and that such review shall not have disclosed the existence
     during such period of any condition or event that constitutes a Default or
     an Event of Default or, if any such condition or event existed or exists
     (including without limitation any such event or condition resulting from
     the failure of the Company or any Subsidiary to comply with any
     Environmental Law), specifying the nature and period of existence thereof
     and what action the Company shall have taken or proposes to take with
     respect thereto.

In case any of the calculations provided pursuant to clause (a) above are made
without giving effect to a change in GAAP, by reason of an objection by the
Company or the Required Holders pursuant to Section 22.6 to calculations taking
into account such change in GAAP, such certificate of a Senior Financial Officer
shall be accompanied by a certificate or letter from the Company's independent
public accountants to the effect that they have reviewed and verified such
calculations.

7.3. Inspection.

         The Company shall permit the representatives of each holder of Notes
that is an Institutional Investor (subject to compliance with Section 20):

          (a) No Default -- if no Default or Event of Default then exists, at
     the expense of such holder and upon reasonable prior notice to the Company,
     to visit the principal executive office of the Company, to discuss the
     affairs, finances and accounts of the Company and its Subsidiaries with the
     Company's officers, and (with the consent of the Company, which consent
     will not be

                                       17

     unreasonably withheld) its independent public accountants, and (with the
     consent of the Company, which consent will not be unreasonably withheld) to
     visit the other offices and properties of the Company and each Subsidiary,
     all at such reasonable times and as often as may be reasonably requested in
     writing; and

          (b) Default -- if a Default or Event of Default then exists, at the
     expense of the Company, to visit and inspect any of the offices or
     properties of the Company or any Subsidiary, to examine all their
     respective books of account, records, reports and other papers, to make
     copies and extracts therefrom, and to discuss their respective affairs,
     finances and accounts with their respective officers, employees and
     independent public accountants (and by this provision the Company
     authorizes said accountants to discuss the affairs, finances and accounts
     of the Company and its Subsidiaries), all at such times and as often as may
     be requested.

         Notwithstanding the foregoing, the Company shall not be required to
disclose to any holder of Notes any information (other than financial
information and other data related to the financial performance of the Company
and its Subsidiaries, including without limitation copies of written reports
that the Company provides to its lending banks) to the extent that the Company
is advised in writing by internal or external legal counsel that the Company is
prohibited from disclosing such information at such time to its creditors
generally under any applicable law, rule, regulation or order (or other binding
restriction imposed by any Governmental Authority) or as a result of any
agreement entered into in good faith with third parties that are not lenders to
the Company or a Subsidiary.

8.    PREPAYMENT OF THE NOTES.

         In addition to the payment of the entire unpaid principal amount of the
Notes of each series at the final maturity thereof, the Company will make
required prepayments on account of the Series A Notes and may make optional
prepayments in respect of the Notes as hereinafter provided.

8.1.  Required Prepayments of Series A Notes.

         On January 18, 2005 and January 18, 2006 the Company will prepay
$18,333,000 aggregate principal amount (or such lesser principal amount as shall
then be outstanding) of the Series A Notes, such prepayment to be made at the
principal amount to be prepaid, together with accrued interest thereon to the
date of such prepayment, without payment of any Make-Whole Amount or other
premium, allocated as provided in Section 8.4.

         No partial prepayment of the Series A Notes pursuant to Section 8.2
shall relieve the Company of its obligation to make prepayments of the Notes
required by this Section 8.1 (with the effect that such optional prepayments
shall be applied to such required prepayments and to the payment at the final
maturity of the Series A Notes in inverse order), provided that upon any
purchase of less than all of the outstanding Series A Notes pursuant to Section
8.6 the principal amount of each required prepayment of the Series A Notes
becoming due under this Section 8.1 on and after the date of such purchase shall
be reduced in the same proportion as the aggregate unpaid principal amount of
the Series A Notes is reduced as a result of such purchase.

                                       18

8.2.  Optional Prepayments with Make-Whole Amount.

         The Company may, at its option and upon notice as provided in Section
8.3, prepay at any time all, or from time to time any part of, the Notes (in a
minimum amount of $5,000,000 and otherwise in multiples of $100,000) at the
principal amount so prepaid, together with interest accrued thereon to the date
of such prepayment, plus the Make-Whole Amount for the Notes of each series
determined for the prepayment date with respect to such principal amount.

8.3.  Notice of Prepayment.

         The Company will give each holder of Notes written notice of each
optional prepayment under Section 8.2 not less than 30 days and not more than 60
days prior to the date fixed for such prepayment. Each such notice shall specify
the date fixed for such prepayment (which shall be a Business Day), the
aggregate principal amount of the Notes to be prepaid on such date, the
principal amount of Notes held by such holder to be prepaid (determined in
accordance with Section 8.4) and the interest to be paid on the prepayment date
with respect to such principal amount being prepaid.

         Each such notice of prepayment shall be accompanied by a certificate of
a Senior Financial Officer as to the estimated Make-Whole Amount for the Notes
of each series due in connection with such prepayment (calculated as if the date
of such notice were the date of the prepayment), setting forth the details of
such computation. Two Business Days prior to such prepayment, the Company shall
deliver to each holder of Notes a certificate of a Senior Financial Officer
specifying the calculation of such Make-Whole Amounts as of the specified
prepayment date.

8.4.  Allocation of Partial Prepayments.

         In the case of each partial prepayment of the Series A Notes pursuant
to Section 8.1 or all Notes pursuant to Section 8.2, the principal amount of the
Series A Notes or all Notes, as the case may be, to be prepaid shall be
allocated among all of the Series A Notes or all of the Notes, as the case may
be, at the time outstanding in proportion, as nearly as practicable, to the
respective unpaid principal amounts thereof.

8.5.  Maturity; Surrender, etc.

         In the case of each prepayment of Notes pursuant to this Section 8, the
principal amount of each Note to be prepaid shall mature and become due and
payable on the date fixed for such prepayment, together with interest on such
principal amount accrued to such date and the applicable Make-Whole Amount, if
any. From and after such date, unless the Company shall fail to pay such
principal amount when so due and payable, together with the interest and
Make-Whole Amount, if any, as aforesaid, interest on such principal amount shall
cease to accrue. Any Note paid or prepaid in full shall be surrendered to the
Company and cancelled and shall not be reissued, and no Note shall be issued in
lieu of any prepaid principal amount of any Note.

                                       19

8.6.  Purchase of Notes.

         The Company will not and will not permit any Affiliate to purchase,
redeem, prepay or otherwise acquire, directly or indirectly, any of the
outstanding Notes except (a) upon the payment or prepayment of the Notes in
accordance with the terms of this Agreement and the Notes or (b) pursuant to an
offer to purchase made by the Company or an Affiliate pro rata to the holders of
all Notes at the time outstanding upon the same terms and conditions (except for
differences to reflect the terms of the Notes of each series). Any such offer
shall provide each holder with sufficient information to enable it to make an
informed decision with respect to such offer and shall remain open for at least
30 days. The Company will promptly cancel all Notes acquired by it or any
Affiliate pursuant to any such offer and no Notes may be issued in substitution
or exchange for any such Notes.

         Promptly and in any event within ten Business Days after each such
purchase of Notes, the Company will furnish each holder of the Notes with a
certificate of a Senior Financial Officer describing such purchase (including
the aggregate principal amount of Notes of each series so purchased and the
purchase price therefor) and certifying that such purchase was made in
compliance with the requirements of this Section.

8.7.  Make-Whole Amount.

         The term "Make-Whole Amount" means, with respect to any Note, an amount
equal to the excess, if any, of the Discounted Value of the Remaining Scheduled
Payments with respect to the Called Principal of such Note over the amount of
such Called Principal, provided that the Make-Whole Amount may in no event be
less than zero. For the purposes of determining the Make-Whole Amount, the
following terms have the following meanings:

          "Called Principal" means, with respect to any Note, the principal of
     such Note that is to be prepaid pursuant to Section 8.2 or has become or is
     declared to be immediately due and payable pursuant to Section 12.1, as the
     context requires.

          "Discounted Value" means, with respect to the Called Principal of any
     Note, the amount obtained by discounting all Remaining Scheduled Payments
     with respect to such Called Principal from their respective scheduled due
     dates to the Settlement Date with respect to such Called Principal, in
     accordance with accepted financial practice and at a discount factor
     (applied on the same periodic basis as that on which interest on the Notes
     is payable) equal to the Reinvestment Yield with respect to such Called
     Principal.

          "Reinvestment Yield" means, with respect to the Called Principal of
     any Note, .50% (50 basis points) over the yield to maturity implied by (i)
     the yields reported, as of 10:00 A.M. (New York City time) on the second
     Business Day preceding the Settlement Date with respect to such Called
     Principal, on (x) the Bloomberg Financial Markets News screen PX1 or the
     equivalent screen provided by Bloomberg Financial Markets News, or (y) if
     such on-line market data is not at the time provided by Bloomberg Financial
     Markets News, on the display designated as "Page 500" on the Dow Jones
     Markets service (or such other display as may replace Page 500 on the Dow
     Jones Markets service), in any case for actively traded non-callable U.S.
     Treasury securities

                                       20

     having a maturity equal to the Remaining Average Life of such Called
     Principal as of such Settlement Date, or (ii) if such yields are not
     reported as of such time or the yields reported as of such time are not
     ascertainable (including by way of interpolation), the Treasury Constant
     Maturity Series Yields reported, for the latest day for which such yields
     have been so reported as of the second Business Day preceding the
     Settlement Date with respect to such Called Principal, in Federal Reserve
     Statistical Release H.15 (519) (or any comparable successor publication)
     for actively traded U.S. Treasury securities having a constant maturity
     equal to the Remaining Average Life of such Called Principal as of such
     Settlement Date. Such implied yield will be determined, if necessary, by
     (a) converting U.S. Treasury bill quotations to bond-equivalent yields in
     accordance with accepted financial practice and (b) interpolating linearly
     between (1) the actively traded U.S. Treasury security with a maturity
     closest to and greater than the Remaining Average Life and (2) the actively
     traded U.S. Treasury security with a maturity closest to and less than the
     Remaining Average Life.

          "Remaining Average Life" means, with respect to any Called Principal,
     the number of years (calculated to the nearest one-twelfth year) obtained
     by dividing (i) such Called Principal into (ii) the sum of the products
     obtained by multiplying (a) the principal component of each Remaining
     Scheduled Payment with respect to such Called Principal by (b) the number
     of years (calculated to the nearest one-twelfth year) that will elapse
     between the Settlement Date with respect to such Called Principal and the
     scheduled due date of such Remaining Scheduled Payment.

          "Remaining Scheduled Payments" means, with respect to the Called
     Principal of any Note, all payments of such Called Principal and interest
     thereon that would be due after the Settlement Date with respect to such
     Called Principal if no payment of such Called Principal were made prior to
     its scheduled due date, provided that if such Settlement Date is not a date
     on which interest payments are due to be made under the terms of the Notes,
     then the amount of the next succeeding scheduled interest payment will be
     reduced by the amount of interest accrued to such Settlement Date and
     required to be paid on such Settlement Date pursuant to Section 8.2 or
     12.1.

          "Settlement Date" means, with respect to the Called Principal of any
     Note, the date on which such Called Principal is to be prepaid pursuant to
     Section 8.2 or has become or is declared to be immediately due and payable
     pursuant to Section 12.1, as the context requires.

9.    AFFIRMATIVE COVENANTS.

         The Company covenants that so long as any of the Notes are outstanding:

9.1.  Compliance with Law.

         The Company will and will cause each of its Restricted Subsidiaries to
comply with all laws, ordinances or governmental rules or regulations to which
each of them is subject, including without limitation Environmental Laws, and
will obtain and maintain in effect all licenses, certificates, permits,
franchises and other governmental authorizations necessary to the

                                       21

ownership of their respective properties or to the conduct of their respective
businesses, in each case to the extent necessary to ensure that non-compliance
with such laws, ordinances or governmental rules or regulations or failures to
obtain or maintain in effect such licenses, certificates, permits, franchises
and other governmental authorizations could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect.

9.2.  Insurance.

         The Company will and will cause each of its Restricted Subsidiaries to
maintain, with financially sound and reputable insurers, insurance with respect
to their respective properties and businesses against such casualties and
contingencies, of such types, on such terms and in such amounts (including
deductibles, co-insurance and self-insurance if adequate reserves are maintained
with respect thereto to the extent required by GAAP) as is customary in the case
of entities of established reputations engaged in the same or a similar business
and similarly situated.

9.3.  Maintenance of Properties.

         The Company will and will cause each of its Restricted Subsidiaries to
maintain and keep, or cause to be maintained and kept, their respective
properties in good repair, working order and condition (other than ordinary wear
and tear), so that the business carried on in connection therewith may be
conducted properly at all times, provided that this Section shall not prevent
the Company or any Restricted Subsidiary from selling all or any substantial
part of the assets of any member of the Pittston Minerals Group or from
discontinuing the operation and the maintenance of any of its other properties
if such discontinuance is desirable in the conduct of its business and the
Company has concluded that such discontinuance could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect.

9.4.  Payment of Taxes and Claims.

         The Company will and will cause each of its Restricted Subsidiaries to
file all tax returns required to be filed in any jurisdiction and to pay and
discharge all taxes shown to be due and payable on such returns and all other
taxes, assessments, governmental charges, or levies imposed on them or any of
their properties, assets, income or franchises, to the extent such taxes and
assessments have become due and payable and before they have become delinquent
and all claims for which sums have become due and payable that have or might
become a Lien on properties or assets of the Company or any Restricted
Subsidiary, provided that neither the Company nor any Restricted Subsidiary need
pay any such tax or assessment or claims if (i) the amount, applicability or
validity thereof is contested by the Company or such Restricted Subsidiary on a
timely basis in good faith and in appropriate proceedings, and the Company or a
Restricted Subsidiary has established adequate reserves therefor in accordance
with GAAP on the books of the Company or such Restricted Subsidiary or (ii) the
nonpayment of all such taxes and assessments in the aggregate could not
reasonably be expected to have a Material Adverse Effect.

                                       22

9.5.  Corporate Existence, etc.

         Subject to Section 10.6, the Company will at all times preserve and
keep in full force and effect its corporate existence. Subject to Sections 10.4
and 10.6, the Company will at all times preserve and keep in full force and
effect the corporate existence of each of its Restricted Subsidiaries (unless
merged into the Company or a Restricted Subsidiary) and all rights and
franchises of the Company and its Restricted Subsidiaries unless, in the good
faith judgment of the Company, the termination of or failure to preserve and
keep in full force and effect such corporate existence, right or franchise could
not, individually or in the aggregate, have a Material Adverse Effect.

9.6.  Additional Subsidiary Guarantees; Release of Subsidiary Guarantees.

         (a) So long as the Bank Credit Agreement remains in effect the Company
will cause each Restricted Subsidiary that becomes a borrower or a guarantor
thereunder or in respect thereof after the date of the Closing (if such
Restricted Subsidiary is not at the time a Subsidiary Guarantor) to become a
Subsidiary Guarantor by executing and delivering a Subsidiary Guarantee, prior
to or concurrently with so becoming a borrower or a guarantor; and promptly and
in any event within ten Business Days thereafter the Company will furnish each
holder of the Notes with a counterpart of such executed Subsidiary Guarantee,
together with an opinion of Cravath, Swaine & Moore or other counsel reasonably
satisfactory to the Required Holders (which opinion may be subject to customary
exceptions, qualifications and limitations under the circumstances none of which
shall affect the parity of obligations of such Subsidiary Guarantor under its
Subsidiary Guarantee and the obligations of such Subsidiary Guarantor as a
borrower or guarantor under the Bank Credit Agreement) to the effect that such
Subsidiary Guarantee has been duly authorized, executed and delivered by such
Restricted Subsidiary and is valid, binding and enforceable in accordance with
its terms.

         (b) Except as provided in Subsection (c) below, the Company will cause
each Subsidiary Guarantee to remain in full force and effect at all times after
the execution and delivery thereof, provided that you and each other holder of a
Note, by acceptance of such Note, agree that any Subsidiary Guarantor shall
automatically be discharged from all of its obligations and liabilities under
its Subsidiary Guarantee, effective at the time such Subsidiary Guarantor ceases
to be a Subsidiary of the Company after giving effect to a consolidation,
merger, sale or other disposition (other than in a transaction resulting in an
assumption by the successor pursuant to Section 10.6(a)(ii)), and except that
this proviso shall not apply (i) if a Default or Event of Default has occurred
and is continuing, (ii) to a Subsidiary Guarantor if any amount is then due and
payable under its Subsidiary Guarantee, (iii) to a Subsidiary Guarantor which at
the time is a guarantor of any other Indebtedness of the Company or another
Restricted Subsidiary (other than a Restricted Subsidiary that ceases to be a
Subsidiary of the Company after giving effect to such transaction) that is not
also concurrently being released or (iv) unless within three Business Days after
such discharge, the Company shall have furnished each holder of the Notes with a
certificate of a Senior Financial Officer describing such transaction and
certifying that such discharge was effected in compliance with the terms of this
Subsection (b).

         (c) Notwithstanding the requirements of the foregoing Subsection (b),
Pittston Minerals Group Inc. and any Subsidiary of Pittston Minerals Group Inc.
that is a Subsidiary

                                       23

Guarantor shall automatically be discharged from their respective Subsidiary
Guarantees, without further action on the part of the holders of any of the
Notes, upon the sale by the Company of the capital stock of any member of the
Pittston Minerals Group to a Person which is not an Affiliate of the Company or
the sale of all or any substantial part of the assets of any member of the
Pittston Minerals Group to any person.

10.   NEGATIVE COVENANTS.

         The Company covenants that so long as any of the Notes are outstanding:

10.1. Liens.

         The Company will not and will not permit any Restricted Subsidiary to
create, assume, incur or suffer to exist any Lien upon or with respect to any
property or assets, whether now owned or hereafter acquired, securing any
Indebtedness without making effective provision (pursuant to documentation in
form and substance reasonably satisfactory to the Required Holders) whereby the
Notes shall be secured by such Lien equally and ratably with or prior to any and
all Indebtedness and other obligations to be secured thereby, provided that
nothing in this Section 10.1 shall prohibit:

          (a) Liens in respect of property of the Company or a Restricted
     Subsidiary existing on the date of the Closing and described in Schedule
     5.15;

          (b) Liens in respect of property acquired or constructed or improved
     by the Company or a Restricted Subsidiary after the date of the Closing,
     which are created at the time of or within one year after acquisition or
     completion of construction or improvement of such property to secure
     Indebtedness assumed or incurred to finance all or any part of the purchase
     price or cost of construction or improvement of such property, provided
     that in any such case

               (i) no such Lien shall extend to or cover any other property of
          the Company or such Restricted Subsidiary, as the case may be, and

               (ii) the aggregate principal amount of Indebtedness secured by
          all such Liens in respect of any such property shall not exceed the
          cost of such property and any improvements then being financed;

          (c) Liens in respect of property acquired by the Company or a
     Restricted Subsidiary after the date of the Closing, existing on such
     property at the time of acquisition thereof (and not created in
     anticipation thereof), or in the case of any Person that after the date of
     the Closing becomes a Subsidiary or is consolidated with or merged with or
     into the Company or a Restricted Subsidiary or sells, leases or otherwise
     disposes of all or substantially all of its property to the Company or a
     Restricted Subsidiary, Liens existing at the time such Person becomes a
     Subsidiary or is so consolidated or merged or effects such sale, lease or
     other disposition of property (and not created in anticipation thereof),
     provided that in any such case no such Lien shall extend to or cover any
     other property of the Company or such Restricted Subsidiary, as the case
     may be;

                                     24

          (d) Liens securing Indebtedness owed by a Restricted Subsidiary to the
     Company or to a Wholly-Owned Restricted Subsidiary;

          (e) extensions, renewals or replacements of Liens permitted by clause
     (a), (b), (c) or (d) above (including successive extensions, renewals and
     replacements), provided that the principal amount of Indebtedness (or the
     maximum commitment therefor) secured by any such Lien is not increased and
     such Lien does not extend to or cover any property other than the property
     covered by such Lien on the date of such extension, renewal or replacement;
     and

          (f) Liens which would otherwise not be permitted by clauses (a)
     through (e) above, securing additional Indebtedness of the Company or a
     Restricted Subsidiary, provided that after giving effect thereto (and to
     the substantially concurrent application of the proceeds of such
     Indebtedness) Priority Debt does not exceed 35% of Consolidated
     Capitalization.

         As used in this Agreement the term "Priority Debt" means, at any date,
the sum (without duplication) of (A) the aggregate unpaid principal amount of
Indebtedness (including Capitalized Lease Obligations) of the Company and its
Restricted Subsidiaries secured by Liens permitted by Section 10.1(f) plus (B)
the aggregate unpaid principal amount of Indebtedness of all Restricted
Subsidiaries (other than Indebtedness permitted by clauses (a) to (d),
inclusive, of Section 10.2) plus (C) the aggregate Attributable Debt in
connection with all sale and leaseback transactions of the Company and its
Restricted Subsidiaries entered into after the date of the Closing in accordance
with the provisions of Section 10.3(a).

         For purposes of this Section 10.1: any Lien existing in respect of
property of an Unrestricted Subsidiary at the time such Unrestricted Subsidiary
is designated a Restricted Subsidiary pursuant to Section 10.9 shall be deemed
to have been created at that time; and the sale or transfer of (x) coal, oil,
gas or other minerals in place for a period of time until, or in an amount such
that, the transferee will realize therefrom a specified amount of money (however
determined) or a specified amount of such coal or other minerals or (y) any
other interest in property of the character commonly referred to as a
"production payment" shall not be deemed to constitute Indebtedness secured by a
Lien.

10.2.  Restricted Subsidiary Indebtedness.

         The Company will not permit any Restricted Subsidiary to create,
assume, incur, guarantee or otherwise become liable in respect of any
Indebtedness except

          (a) Indebtedness secured by Liens permitted by clause (b), (c), (d) or
     (e) of Section 10.1,

          (b) in the case of any Person that after the date of the Closing
     becomes a Restricted Subsidiary or is consolidated with or merged with or
     into a Restricted Subsidiary or sells, leases or otherwise disposes of all
     of its property to a Restricted Subsidiary, Indebtedness outstanding at the
     time such Person becomes a Restricted Subsidiary or is so consolidated or
     merged or effects such sale, lease or other disposition of property (and
     not created in anticipation thereof, including extensions, renewals or

                                       25

     replacements of such Indebtedness, provided that the principal amount of
     such Indebtedness is not increased,

          (c) Indebtedness of any Subsidiary Guarantor,

          (d) Indebtedness owing to the Company or a Wholly-Owned Restricted
     Subsidiary, and

          (e) other Indebtedness, provided that immediately after giving effect
     to such other Indebtedness Priority Debt does not exceed 35% of
     Consolidated Capitalization.

         For purposes of this Section 10.2: a Restricted Subsidiary shall be
deemed to have incurred Indebtedness in respect of any obligation previously
owed to the Company or to a Wholly-Owned Restricted Subsidiary on the date the
obligee ceases for any reason to be the Company or a Wholly-Owned Restricted
Subsidiary; a Person that hereafter becomes a Restricted Subsidiary shall be
deemed at that time to have incurred all of its outstanding Indebtedness; and
any Unrestricted Subsidiary or other Person that hereafter becomes a Restricted
Subsidiary shall be deemed at that time to have incurred all of its outstanding
Indebtedness.

10.3.  Limitation on Sale and Leaseback Transactions.

         The Company will not and will not permit any Restricted Subsidiary to
sell, lease, transfer or otherwise dispose of (collectively, a "transfer") any
asset on terms whereby the asset or a substantially similar asset is or may be
leased or reacquired by the Company or any Restricted Subsidiary over a period
in excess of three years, unless either

          (a) after giving effect to such transaction and the incurrence of
     Attributable Debt in respect thereof Priority Debt does not exceed 35% of
     Consolidated Capitalization, or

          (b) the net proceeds realized from the transfer are applied within 365
     days after the receipt thereof to reinvest in property or assets for use in
     the business of the Company and its Restricted Subsidiaries or to repay
     unsubordinated funded Indebtedness of the Company or a Restricted
     Subsidiary (which may, but need not, include prepayment of the Notes
     pursuant to Section 8.2 or an offer to purchase Notes in accordance with
     Section 8.7).

10.4.  Limitation on Asset Sales.

         The Company will not and will not permit any Restricted Subsidiary to,
directly or indirectly, make any sale, transfer, lease (as lessor), loan or
other disposition of any property or assets (an "Asset Sale") other than:

          (a) Asset Sales in the ordinary course of business;

          (b) Asset Sales of property or assets by a Restricted Subsidiary to
     the Company or a Wholly-Owned Restricted Subsidiary;

                                       26

          (c) any Asset Sale involving assets or the capital stock of any member
     of the Pittston Minerals Group;

          (d) any Asset Sale involving aircraft, aircraft replacement parts and
     facilities and equipment by BAX Global Inc. and/or its Subsidiaries up to
     $75,000,000 on a cumulative basis for all periods after September 30, 2000;

          (e) any Asset Sale to the extent made in exchange for other property
     or assets for use in the business of the Company and its Restricted
     Subsidiaries; and

          (f) other Asset Sales, provided that in each case

               (i) immediately before and after giving effect thereto, no
          Default or Event of Default shall have occurred and be continuing, and

               (ii) the aggregate net book value of property or assets disposed
          of in such Asset Sale and all other Asset Sales under this clause (f)
          by the Company and its Restricted Subsidiaries does not exceed (x) 15%
          of Consolidated Total Assets during the immediately preceding twelve
          months or (y) 30% of Consolidated Total Assets since the date of the
          Closing (Consolidated Total Assets in each case determined as of the
          last day of the quarterly accounting period ending on or most recently
          prior to the date of such Asset Sale)

     and provided further that for purposes of subclause (ii) above there shall
     be included the net book value of property or assets disposed of in an
     Asset Sale only to the extent that an amount equal to the net proceeds
     realized upon such Asset Sale has not been applied by the Company or such
     Restricted Subsidiary, as the case may be, within 365 days after the
     effective date of such Asset Sale to (1) the reinvestment in property or
     assets for use in the business of the Company and its Restricted
     Subsidiaries, (2) the repayment of unsubordinated funded Indebtedness or
     (3) payment into The Pittston Company Employee Welfare Benefit Trust or any
     successor of such trust.

10.5.  Financial Conditions.

         (a) The Company will not permit Consolidated EBITDA for any period of
four consecutive fiscal quarters (commencing with the four fiscal quarters
ending March 31, 2001) to be less than 300% of Consolidated Interest Expense for
such period.

         (b) The Company will not at any time permit Consolidated Net Worth to
be less than the sum of (a) $554,000,000 plus (b) 25% of Consolidated Net Income
(if positive) for the fiscal quarter ending December 31, 2000 plus (c) 25% of
Consolidated Net Income for each fiscal year thereafter for which Consolidated
Net Income is positive.

         (c) The Company will not permit the Ratio of Consolidated Indebtedness
to Consolidated Capitalization as of the last day of any fiscal quarter
(beginning on March 31, 2001) to exceed 0.60 to 1.00.

                                       27

         As used in this Section 10.5(c): the term "Ratio of Consolidated
Indebtedness to Consolidated Capitalization" means, as of any date, the ratio of
(a) the sum of (i) Consolidated Indebtedness plus (ii) the amount, if any, by
which Discounted Consolidated Lease Rentals exceeds $350,000,000 to (b) the sum
of (i) the amount determined pursuant to the preceding clause (a) plus (ii)
Consolidated Net Worth; the term "Discounted Consolidated Lease Rentals" means,
as of the December 31 next preceding such date of determination (or as of such
date if such date is December 31), (a) the aggregate amount of Lease Rentals
payable by the Company and its Restricted Subsidiaries as lessee during the
remaining term of all noncancellable leases (other than Capital Leases) of real
or personal property (discounted on the same periodic basis from the respective
due dates thereof at an interest rate of 10% per annum) minus (b) the aggregate
minimum sublease rentals payable to the Company and its Restricted Subsidiaries
during the remaining term of all noncancellable subleases of real or personal
property (discounted as aforesaid), all determined on a consolidated basis
consistent with Note 13 to the audited financial statements of the Company at
and for the year ending December 31, 1999 (included as a Disclosure Document);
and the term "Lease Rentals" means, with respect to any particular lease or
sublease, the total amount of rent and other obligations (whether or not
designated as rent) payable by the lessee or sublessee during the remaining term
of such lease or sublease (excluding any extension or renewal thereof at the
option of either party to such lease or sublease unless such option has been
exercised), after excluding amounts required to be paid by the lessee or
sublessee (whether or not designated as rental or additional rental) on account
of maintenance and repairs, insurance, taxes, assessments, utilities (including
water rates), operating and labor costs and similar charges.

10.6.  Merger, Consolidation, etc.

         The Company will not and will not permit any Restricted Subsidiary to
consolidate with or merge with any other corporation or convey, transfer or
lease all or substantially all of its assets in a single transaction or series
of transactions to any Person (other than Asset Sales permitted by Section
10.4(c) and any consolidation or merger of any member of the Pittston Minerals
Group with, or conveyance, transfer or lease by any member of the Pittston
Minerals Group to, a Person which is not an Affiliate of the Company), except as
follows:

          (a) a Restricted Subsidiary may consolidate with or merge with any
     other corporation or convey or transfer all or substantially all of its
     assets to

               (i) the Company (provided that the Company shall be the
          continuing or surviving corporation) or a then existing Restricted
          Subsidiary, or

               (ii) any other Person, provided that

                    (A) if such Restricted Subsidiary is a Subsidiary Guarantor
               and the continuing, surviving or acquiring corporation is another
               Subsidiary, such continuing, surviving or acquiring corporation
               shall have (1) executed and delivered to each holder of a Note
               its assumption of the due and punctual performance and observance
               of all obligations of such Restricted Subsidiary under its
               Subsidiary Guarantee and (2) caused to be delivered to each
               holder of a Note an opinion of counsel reasonably

                                       28

               satisfactory to the Required Holders to the effect that all
               agreements or instruments effecting such assumption are
               enforceable in accordance with their terms and comply with the
               terms hereof, and

                    (B) immediately after giving effect to such transaction, no
               Default or Event of Default shall have occurred and be
               continuing; and

          (b) the Company may consolidate with or merge with any other
     corporation or convey or transfer all or substantially all of its assets to
     a corporation organized and existing under the laws of the United States or
     any State thereof, provided that

               (i) the continuing, surviving or acquiring corporation (if not
          the Company) shall have (A) executed and delivered to each holder of a
          Note its assumption of the due and punctual performance and observance
          of all obligations of the Company under this Agreement, the Other
          Agreements and the Notes and (B) caused to be delivered to each holder
          of a Note an opinion of counsel reasonably satisfactory to the
          Required Holders to the effect that all agreements or instruments
          effecting such assumption are enforceable in accordance with their
          terms and comply with the terms hereof, and

               (ii) immediately after giving effect to such transaction, (A) no
          Default or Event of Default shall have occurred and be continuing and
          (B) the Company would be in compliance with paragraphs (a) and (c) of
          Section 10.5 on a pro forma basis as if such transaction had occurred
          on the last day of the most recently ended fiscal quarter.

No such conveyance, transfer or lease of all or substantially all of the assets
of the Company shall have the effect of releasing the Company or any successor
corporation that shall theretofore have become such in the manner prescribed in
this Section 10.6 from its liability under this Agreement or the Notes.

10.7.  Lines of Business.

         The Company will not and will not permit any Restricted Subsidiary to
engage in any business other than (a) the businesses in which the Company and
its Restricted Subsidiaries are engaged on the date of the Closing (as described
in the Memorandum) and businesses reasonably related or complementary thereto or
in furtherance thereof and (b) lines of business that are insignificant when
viewed in the overall context of the business then engaged in by the Company and
its Restricted Subsidiaries taken as a whole.

10.8.  Transactions with Affiliates.

         The Company will not and will not permit any Restricted Subsidiary to
enter into directly or indirectly any Material transaction or Material group of
related transactions (including without limitation the purchase, lease, sale or
exchange of properties of any kind or the rendering of any service) with any
Affiliate (other than the Company or another Restricted Subsidiary), except in
the ordinary course and pursuant to the reasonable requirements of the Company's
or such Restricted Subsidiary's business and upon fair and reasonable terms no
less favorable to the

                                       29

Company or such Restricted Subsidiary than would be obtainable in a comparable
arm's-length transaction with a Person not an Affiliate. For purposes of this
Section 10.8 a Material transaction or Material group of related transactions
shall be measured in relation to the Company and the Subsidiary Guarantors at
the time, taken as a whole.

10.9. Designation of Restricted and Unrestricted Subsidiaries.

         (a) Subject to paragraph (b) below, the Company will not designate any
Restricted Subsidiary as an Unrestricted Subsidiary if such Restricted
Subsidiary was (i) more than twice previously (directly or indirectly) an
Unrestricted Subsidiary in the case of any Restricted Subsidiary listed as an
Unrestricted Subsidiary in Schedule 5.4 or any Restricted Subsidiary that is
designated as an Unrestricted Subsidiary at the time such Restricted Subsidiary
first became a Subsidiary or (ii) more than once previously (directly or
indirectly) an Unrestricted Subsidiary in the case of any other Restricted
Subsidiary.

         (b) The Company will not designate any Restricted Subsidiary as an
Unrestricted Subsidiary or any Unrestricted Subsidiary or other Person as a
Restricted Subsidiary unless immediately after giving pro forma effect to such
designation, (i) no Default or Event of Default shall have occurred and be
continuing and (ii) the Company would be in compliance with paragraphs (a) and
(c) of Section 10.5 on a pro forma basis as if such designation had occurred on
the last day of the most recently ended fiscal quarter.

         (c) Forthwith and in any event within ten Business Days after a
designation pursuant to this Section 10.9, the Company will furnish each holder
of the Notes with a certificate of a Senior Financial Officer specifying the
effective date of such designation and setting forth calculations in reasonable
detail demonstrating compliance with the conditions to such designation set
forth in the immediately preceding paragraph

11.   EVENTS OF DEFAULT.

         An "Event of Default" shall exist if any of the following conditions or
events shall occur and be continuing:

          (a) the Company defaults in the payment of any principal or Make-Whole
     Amount, if any, on any Note when the same becomes due and payable, whether
     at maturity or at a date fixed for prepayment or by declaration or
     otherwise; or

          (b) the Company defaults in the payment of any interest on any Note
     for more than five Business Days after the same becomes due and payable; or

          (c) the Company defaults in the performance of or compliance with any
     term contained in Section 7.1(d) or Sections 10.1 to 10.6, inclusive, and
     in the case of Section 10.5(b) such default is not remedied within 30 days
     after a Responsible Officer obtains knowledge thereof (so long as the
     Company is proceeding diligently and in good faith to cure such default);
     or

          (d) the Company defaults in the performance of or compliance with any
     term contained herein (other than those referred to in paragraphs (a), (b)
     and (c) of this

                                       30

     Section 11) and such default is not remedied within 30 days after a
     Responsible Officer obtains knowledge of such default; or

          (e) any representation or warranty made in writing by or on behalf of
     the Company or any Subsidiary or by any officer of the Company or any
     Subsidiary in this Agreement or a Subsidiary Guarantee or in any writing
     furnished in connection with the transactions contemplated hereby proves to
     have been false or incorrect in any material respect on the date as of
     which made; or

          (f) (i) the Company or any Restricted Subsidiary is in default (as
     principal or as guarantor or other surety) in the payment of any principal
     of or premium or make-whole amount or interest on any Indebtedness (other
     than the Notes) that is outstanding in an aggregate principal amount of at
     least $25,000,000 (or its equivalent in any other currency) beyond any
     period of grace provided with respect thereto, or (ii) the Company or any
     Restricted Subsidiary is in default in the performance of or compliance
     with any term of any evidence of any Indebtedness outstanding in an
     aggregate principal amount of at least $25,000,000 (or its equivalent in
     any other currency) or of any mortgage, indenture or other agreement
     relating thereto or any other default exists, and as a consequence of any
     such default such Indebtedness has become, or has been declared, due and
     payable before its stated maturity or before its regularly scheduled dates
     of payment, or (iii) in any case as a consequence of the occurrence or
     continuation of a change of control or rating downgrade or any other
     similar adverse event the Company or any Restricted Subsidiary has become
     obligated to purchase or repay Indebtedness outstanding in an aggregate
     principal amount of at least $25,000,000 (or its equivalent in any other
     currency) before its regular maturity or before its regularly scheduled
     dates of payment; or

          (g) the Company or any Restricted Subsidiary (i) admits in writing its
     inability to pay, or is generally not paying, its debts as they become due
     (within the meaning of the Federal Bankruptcy Code), (ii) files, or
     consents by answer or otherwise to the filing against it of, a petition for
     relief or reorganization or arrangement or any other petition in
     bankruptcy, for liquidation or to take advantage of any bankruptcy,
     insolvency, reorganization, moratorium or other similar law of any
     jurisdiction, (iii) makes an assignment for the benefit of its creditors,
     (iv) consents to the appointment of a custodian, receiver, trustee or other
     officer with similar powers with respect to it or with respect to any
     substantial part of its property, (v) is adjudicated as insolvent or to be
     liquidated, or (vi) takes corporate action for the purpose of any of the
     foregoing; or

          (h) a court or governmental authority of competent jurisdiction enters
     an order appointing, without consent by the Company or any Restricted
     Subsidiary, a custodian, receiver, trustee or other officer with similar
     powers with respect to it or with respect to any substantial part of its
     property, or constituting an order for relief or approving a petition for
     relief or reorganization or any other petition in bankruptcy or for
     liquidation or to take advantage of any bankruptcy or insolvency law of any
     jurisdiction, or ordering the dissolution, winding-up or liquidation of the
     Company or such Restricted Subsidiary, or any such petition shall be filed
     against the Company or such Restricted Subsidiary and such petition shall
     not be dismissed within 60 days; or

                                       31

          (i) a final judgment or judgments for the payment of money aggregating
     in excess of $25,000,000 (or its equivalent in any other currency) are
     rendered against one or more of the Company and its Restricted Subsidiaries
     which judgments are not, within 60 days after entry thereof, bonded, paid,
     discharged or stayed pending appeal, or are not discharged within 60 days
     after the expiration of such stay; or

          (j) if any Subsidiary Guarantor (or any Person at its authorized
     direction or on its behalf) shall assert in writing that the Subsidiary
     Guarantee of such Subsidiary Guarantor is unenforceable in any material
     respect or any Subsidiary Guarantee shall cease to be in full force and
     effect as an enforceable instrument except as permitted by Section 9.6; or

          (k) if (i) any Plan shall fail to satisfy the minimum funding
     standards of ERISA or the Code for any plan year or part thereof or a
     waiver of such standards or extension of any amortization period is sought
     or granted under section 412 of the Code, (ii) a notice of intent to
     terminate any Plan shall have been or is reasonably expected to be filed
     with the PBGC or the PBGC shall have instituted proceedings under ERISA
     section 4042 to terminate or appoint a trustee to administer any Plan or
     the PBGC shall have notified the Company or any ERISA Affiliate that a Plan
     may become a subject of any such proceedings, (iii) the aggregate "amount
     of unfunded benefit liabilities" (within the meaning of section 4001(a)(18)
     of ERISA) under all Plans, determined in accordance with Title IV of ERISA,
     shall exceed $5,000,000, (iv) the Company or any ERISA Affiliate shall have
     incurred or is reasonably expected to incur any liability pursuant to Title
     I or IV of ERISA or the penalty or excise tax provisions of the Code
     relating to employee benefit plans, (v) the Company or any ERISA Affiliate
     withdraws from any Multiemployer Plan (other than in connection with the
     disposition of all or any part of the assets of the Pittston Minerals
     Group), or (vi) the Company or any Subsidiary establishes or amends any
     employee welfare benefit plan that provides post-employment welfare
     benefits in a manner that would increase the liability of the Company or
     any Subsidiary thereunder; and any such event or events described in
     clauses (i) through (vi) above, either individually or together with any
     other such event or events, would have a Material Adverse Effect.

As used in Section 11(k), the terms "employee benefit plan" and "employee
welfare benefit plan" shall have the respective meanings assigned to such terms
in section 3 of ERISA.

12.   REMEDIES ON DEFAULT, ETC.

12.1. Acceleration.

         (a) If an Event of Default with respect to the Company described in
paragraph (g) or (h) of Section 11 (other than an Event of Default described in
clause (i) of paragraph (g) or described in clause (vi) of paragraph (g) by
virtue of the fact that such clause encompasses clause (i) of paragraph (g)) has
occurred, all the Notes then outstanding shall automatically become immediately
due and payable.

                                       32

         (b) If any other Event of Default has occurred and is continuing, the
Required Holders may at any time at its or their option, by notice or notices to
the Company, declare all the Notes at the time outstanding to be immediately due
and payable.

         (c) If any Event of Default described in paragraph (a) or (b) of
Section 11 has occurred and is continuing, any holder or holders of Notes at the
time outstanding affected by such Event of Default may at any time, at its or
their option, by notice or notices to the Company, declare all the Notes held by
it or them to be immediately due and payable.

         Upon any Note becoming due and payable under this Section 12.1, whether
automatically or by declaration, such Note will forthwith mature and the entire
unpaid principal amount of such Note, plus (x) all accrued and unpaid interest
thereon and (y) the Make-Whole Amount determined in respect of such principal
amount (to the full extent permitted by applicable law), shall all be
immediately due and payable, in each and every case without presentment, demand,
protest or further notice, all of which are hereby waived. The Company
acknowledges, and the parties hereto agree, that each holder of a Note has the
right to maintain its investment in the Notes free from repayment by the Company
(except as herein specifically provided) and that the provision for payment of a
Make-Whole Amount by the Company in the event that the Notes are prepaid or are
accelerated as a result of an Event of Default, is intended to provide
compensation for the deprivation of such right under such circumstances.

12.2. Other Remedies.

         If any Default or Event of Default has occurred and is continuing, and
irrespective of whether any Notes have become or have been declared immediately
due and payable under Section 12.1, the holder of any Note at the time
outstanding may proceed to protect and enforce the rights of such holder by an
action at law, suit in equity or other appropriate proceeding, whether for the
specific performance of any agreement contained herein or in any Note, or for an
injunction against a violation of any of the terms hereof or thereof, or in aid
of the exercise of any power granted hereby or thereby or by law or otherwise.

12.3. Rescission.

         At any time after any Notes have been declared due and payable pursuant
to paragraph (b) or (c) of Section 12.1, the Required Holders, by written notice
to the Company, may rescind and annul any such declaration and its consequences
if (a) the Company has paid all overdue interest on the Notes, all principal of
and Make-Whole Amount, if any, on any Notes that are due and payable and are
unpaid other than by reason of such declaration, and all interest on such
overdue principal and Make-Whole Amount, if any, and (to the extent permitted by
applicable law) any overdue interest in respect of the Notes, at the Default
Rate, (b) all Events of Default and Defaults, other than the non-payment of
amounts that have become due solely by reason of such declaration, have been
cured or have been waived pursuant to Section 17, and (c) no judgment or decree
has been entered for the payment of any monies due pursuant hereto or to the
Notes. No rescission and annulment under this Section 12.3 will extend to or
affect any subsequent Event of Default or Default or impair any right consequent
thereon.

                                       33

12.4. No Waivers or Election of Remedies, Expenses, etc.

         No course of dealing and no delay on the part of any holder of any Note
in exercising any right, power or remedy shall operate as a waiver thereof or
otherwise prejudice such holder's rights, powers or remedies. No right, power or
remedy conferred by this Agreement or by any Note upon any holder thereof shall
be exclusive of any other right, power or remedy referred to herein or therein
or now or hereafter available at law, in equity, by statute or otherwise.
Without limiting the obligations of the Company under Section 15, the Company
will pay to the holder of each Note on demand such further amount as shall be
sufficient to cover all costs and expenses of such holder incurred in any
enforcement or collection under this Section 12, including without limitation
reasonable attorneys' fees, expenses and disbursements.

13.   REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES.

13.1. Registration of Notes.

         The Company shall keep at its principal executive office a register for
the registration and registration of transfers of Notes. The name and address of
each holder of one or more Notes, each transfer thereof and the name and address
of each transferee of one or more Notes shall be registered in such register.
Prior to due presentment for registration of transfer, the Person in whose name
any Note shall be registered shall be deemed and treated as the owner and holder
thereof for all purposes hereof, and the Company shall not be affected by any
notice or knowledge to the contrary. The Company shall give to any holder of a
Note that is an Institutional Investor promptly upon request therefor, a
complete and correct copy of the names and addresses of all registered holders
of Notes.

13.2. Transfer and Exchange of Notes.

         Upon surrender of any Note at the principal executive office of the
Company for registration of transfer or exchange (and in the case of a surrender
for registration of transfer, duly endorsed or accompanied by a written
instrument of transfer duly executed by the registered holder of such Note or
his attorney duly authorized in writing and accompanied by the address for
notices of each transferee of such Note or part thereof), within five Business
Days thereafter the Company shall execute and deliver, at the Company's expense
(except as provided below), one or more new Notes of the same series (as
requested by the holder thereof) in exchange therefor, in an aggregate principal
amount equal to the unpaid principal amount of the surrendered Note. Each such
new Note shall be payable to such Person as such holder may request. Each such
new Note shall be dated and bear interest from the date to which interest shall
have been paid on the surrendered Note or dated the date of the surrendered Note
if no interest shall have been paid thereon. The Company may require payment of
a sum sufficient to cover any stamp tax or governmental charge imposed in
respect of any such transfer of Notes. Notes shall not be transferred in
denominations of less than $100,000, provided that if necessary to enable the
registration of transfer by a holder of its entire holding of Notes, one Note
may be in a denomination of less than $100,000. Any transferee, by its
acceptance of a Note registered in its name (or the name of its nominee), shall
be deemed to have made the representations set forth in Sections 6.1 (so long as
applicable) and 6.2.

                                       34

13.3. Replacement of Notes.

         Upon receipt by the Company of evidence reasonably satisfactory to it
of the ownership of and the loss, theft, destruction or mutilation of any Note
(which evidence shall be, in the case of an Institutional Investor, notice from
such Institutional Investor of such ownership and such loss, theft, destruction
or mutilation), and

          (a) in the case of loss, theft or destruction, of indemnity reasonably
     satisfactory to it (provided that if the holder of such Note is, or is a
     nominee for, an original Purchaser or any other Institutional Investor,
     such Person's own unsecured agreement of indemnity shall be deemed to be
     satisfactory), or

          (b) in the case of mutilation, upon surrender and cancellation
     thereof,

within five Business Days thereafter the Company at its own expense shall
execute and deliver, in lieu thereof, a new Note of the same series, dated and
bearing interest from the date to which interest shall have been paid on such
lost, stolen, destroyed or mutilated Note or dated the date of such lost,
stolen, destroyed or mutilated Note if no interest shall have been paid thereon.

14.   PAYMENTS ON NOTES.

14.1. Place of Payment.

         Subject to Section 14.2, payments of principal, Make-Whole Amount, if
any, and interest becoming due and payable on the Notes shall be made at the
principal office of The Chase Manhattan Bank in New York City. The Company may
at any time, by notice to each holder of a Note, change the place of payment of
the Notes so long as such place of payment shall be either the principal office
of the Company in New York City or the principal office of a bank or trust
company in New York City.

14.2. Home Office Payment.

         So long as you or your nominee shall be the holder of any Note, and
notwithstanding anything contained in Section 14.1 or in such Note to the
contrary, the Company will pay all sums becoming due on such Note for principal,
Make-Whole Amount, if any, and interest by the method and at the address
specified for such purpose below your name in Schedule A, or by such other
method or at such other address as you shall have from time to time specified to
the Company in writing for such purpose, without the presentation or surrender
of such Note or the making of any notation thereon, except that upon written
request of the Company made concurrently with or reasonably promptly after
payment or prepayment in full of any Note, you shall surrender such Note for
cancellation, reasonably promptly after any such request, to the Company at its
principal executive office or at the place of payment most recently designated
by the Company pursuant to Section 14.1. Prior to any sale or other disposition
of any Note held by you or your nominee you will, at your election, either
endorse thereon the amount of principal paid thereon and the last date to which
interest has been paid thereon or surrender such Note to the Company in exchange
for a new Note or Notes pursuant to Section 13.2. The Company will afford the
benefits of this Section 14.2 to any Institutional Investor that

                                       35

is the direct or indirect transferee of any Note purchased by you under this
Agreement and that has made the same agreement relating to such Note as you have
made in this Section 14.2.

15.   EXPENSES, ETC.

15.1. Transaction Expenses.

         Whether or not the transactions contemplated hereby are consummated,
the Company will pay all costs and expenses (including reasonable attorneys'
fees of your special counsel and, if reasonably required, local or other
counsel) incurred by you and each Other Purchaser or holder of a Note in
connection with such transactions and in connection with any amendments, waivers
or consents under or in respect of this Agreement or the Notes (whether or not
such amendment, waiver or consent becomes effective), including without
limitation: (a) the costs and expenses incurred in enforcing or defending (or
reasonably determining whether or how to enforce or defend) any rights under
this Agreement or the Notes or in responding to any subpoena or other legal
process or informal investigative demand issued in connection with this
Agreement or the Notes, or by reason of being a holder of any Note, and (b) the
costs and expenses, including financial advisors' fees, incurred in connection
with the insolvency or bankruptcy of the Company or any Subsidiary or in
connection with any work-out or restructuring of the transactions contemplated
hereby and by the Notes. The Company will pay, and will save you and each other
holder of a Note harmless from, all claims in respect of any fees, costs or
expenses if any, of brokers and finders (other than those retained by you).

         In furtherance of the foregoing, on the date of the Closing the Company
will pay or cause to be paid the fees and disbursements and other charges
(including estimated unposted disbursements and other charges as of the date of
the Closing) of your special counsel which are reflected in the statement of
such special counsel submitted to the Company on or prior to the date of the
Closing. The Company will also pay, promptly upon receipt of supplemental
statements therefor, reasonable additional fees, if any, and disbursements and
charges of such special counsel in connection with the transactions hereby
contemplated (including disbursements and other charges unposted as of the date
of the Closing to the extent such disbursements and other charges exceed
estimated amounts paid as aforesaid).

15.2. Survival.

         The obligations of the Company under this Section 15 will survive the
payment or transfer of any Note, the enforcement, amendment or waiver of any
provision of this Agreement or the Notes, and the termination of this Agreement.

16.   SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT.

         All representations and warranties contained herein shall survive the
execution and delivery of this Agreement and the Notes, the purchase or transfer
by you of any Note or portion thereof or interest therein and the payment of any
Note, and may be relied upon by any subsequent holder of a Note, regardless of
any investigation made at any time by or on behalf of you or any other holder of
a Note. All statements contained in any certificate or other instrument
delivered by or on behalf of the Company pursuant to this Agreement shall be
deemed

                                       36

representations and warranties of the Company under this Agreement. Subject to
the preceding sentence, this Agreement and the Notes embody the entire agreement
and understanding between you and the Company and supersede all prior agreements
and understandings relating to the subject matter hereof.

17.   AMENDMENT AND WAIVER.

17.1. Requirements.

         This Agreement and the Notes may be amended, and the observance of any
term hereof or of the Notes may be waived (either retroactively or
prospectively), with (and only with) the written consent of the Company and the
Required Holders, except that (a) no amendment or waiver of any of the
provisions of Section 1, 2, 3, 4, 5, 6 or 21, or any defined term (as it is used
therein), will be effective as to you unless consented to by you in writing, and
(b) no such amendment or waiver may, without the written consent of the holder
of each Note at the time outstanding, (i) subject to the provisions of Section
12 relating to acceleration or rescission, change the amount or time of any
prepayment or payment of principal of, or change the rate or the time of payment
or method of computation of interest or of the Make-Whole Amount on, the Notes,
(ii) change the percentage of the principal amount of the Notes the holders of
which are required to consent to any such amendment or waiver, or (iii) amend
any of Sections 8, 11(a), 11(b), 12, 17 or 20.

17.2. Solicitation of Holders of Notes.

         (a) Solicitation. The Company will provide each holder of the Notes
(irrespective of the amount of Notes then owned by it) with sufficient
information, sufficiently far in advance of the date a decision is required, to
enable such holder to make an informed and considered decision with respect to
any proposed amendment, waiver or consent in respect of any of the provisions
hereof or of the Notes. The Company will deliver executed or true and correct
copies of each amendment, waiver or consent effected pursuant to the provisions
of this Section 17 to each holder of outstanding Notes promptly following the
date on which it is executed and delivered by, or receives the consent or
approval of, the requisite holders of Notes.

         (b) Payment. The Company will not directly or indirectly pay or cause
to be paid any remuneration, whether by way of supplemental or additional
interest, fee or otherwise, or grant any security, to any holder of Notes as
consideration for or as an inducement to such holder's consideration of or
entering into by any holder of Notes of any waiver or amendment of any of the
terms and provisions hereof unless such remuneration is concurrently paid, or
security is concurrently granted, on the same terms, ratably to each holder of
Notes then outstanding even if such holder did not consent to such waiver or
amendment.

17.3. Binding Effect, etc.

         Any amendment or waiver consented to as provided in this Section 17
applies equally to all holders of Notes and is binding upon them and upon each
future holder of any Note and upon the Company without regard to whether such
Note has been marked to indicate such amendment or waiver. No such amendment or
waiver will extend to or affect any obligation, covenant, agreement, Default or
Event of Default not expressly amended or waived or impair

                                       37

any right consequent thereon. No course of dealing between the Company and the
holder of any Note nor any delay in exercising any rights hereunder or under any
Note shall operate as a waiver of any rights of any holder of such Note. As used
herein, the term "this Agreement" and references thereto shall mean this
Agreement as it may from time to time be amended or supplemented.

17.4. Notes held by Company, etc.

         Solely for the purpose of determining whether the holders of the
requisite percentage of the aggregate principal amount of Notes then outstanding
approved or consented to any amendment, waiver or consent to be given under this
Agreement or the Notes, or have directed the taking of any action provided
herein or in the Notes to be taken upon the direction of the holders of a
specified percentage of the aggregate principal amount of Notes then
outstanding, Notes directly or indirectly owned by the Company or any of its
Affiliates shall be deemed not to be outstanding.

18.   NOTICES.

         All notices and communications provided for hereunder shall be in
writing and sent (a) by telecopy if the sender on the same day sends a
confirming copy of such notice by a recognized overnight delivery service
(charges prepaid), or (b) by registered or certified mail with return receipt
requested (postage prepaid), or (c) by a recognized overnight delivery service
(with charges prepaid). Any such notice must be sent:

          (a) if to you or your nominee, to you or it at the address specified
     for such communications in Schedule A, or at such other address as you or
     it shall have specified to the Company in writing,

          (b) if to any other holder of any Note, to such holder at such address
     as such other holder shall have specified to the Company in writing, or

          (c) if to the Company, to the Company at its address set forth at the
     beginning hereof to the attention of the Treasurer, or at such other
     address as the Company shall have specified to the holder of each Note in
     writing.

Notices under this Section 18 will be deemed given only when actually received.

19.   REPRODUCTION OF DOCUMENTS.

         This Agreement and all documents relating thereto, including, without
limitation, (a) consents, waivers and modifications that may hereafter be
executed, (b) documents received by you at the Closing (except the Notes
themselves), and (c) financial statements, certificates and other information
previously or hereafter furnished to you, may be reproduced by you by any
photographic, photostatic, microfilm, microcard, miniature photographic or other
similar process and you may destroy any original document so reproduced. The
Company agrees and stipulates that, to the extent permitted by applicable law,
any such reproduction shall be admissible in evidence as the original itself in
any judicial or administrative proceeding (whether or not the original is in
existence and whether or not such reproduction was made by you in the regular

                                       38

course of business) and any enlargement, facsimile or further reproduction of
such reproduction shall likewise be admissible in evidence. This Section 19
shall not prohibit the Company or any other holder of Notes from contesting any
such reproduction to the same extent that it could contest the original, or from
introducing evidence to demonstrate the inaccuracy of any such reproduction.

20.   CONFIDENTIAL INFORMATION.

         For the purposes of this Section 20, "Confidential Information" means
information (including without limitation the Memorandum) delivered to you by or
on behalf of the Company or any Subsidiary in connection with the transactions
contemplated by or otherwise pursuant to this Agreement, provided that such term
does not include information that (a) was publicly known or otherwise known to
you prior to the time of such disclosure, (b) subsequently becomes publicly
known through no act or omission by you or any person acting on your behalf, (c)
otherwise becomes known to you other than through disclosure by the Company or
any Subsidiary or by a source that you know is required to maintain the
confidentiality of such information or (d) constitutes financial statements
delivered to you under Section 7.1 that are otherwise publicly available. You
will maintain the confidentiality of such Confidential Information in accordance
with procedures adopted by you in good faith to protect confidential information
of third parties delivered to you, provided that you may deliver or disclose
Confidential Information to (i) your directors, officers, trustees, employees,
agents, attorneys and affiliates (to the extent such disclosure reasonably
relates to the administration of the investment represented by your Notes and by
virtue of their position they are required to comply with this Section 20), (ii)
your financial advisors and other professional advisors whose duties require
them to hold confidential the Confidential Information substantially in
accordance with the terms of this Section 20, (iii) any other holder of any
Note, (iv) any Institutional Investor to which you sell or offer to sell such
Note or any part thereof or any participation therein (if such Person has agreed
in writing prior to its receipt of such Confidential Information to be bound by
the provisions of this Section 20), (v) any Person from which you offer to
purchase any security of the Company (if such Person has agreed in writing prior
to its receipt of such Confidential Information to be bound by the provisions of
this Section 20), (vi) any federal or state regulatory authority having
jurisdiction over you, (vii) the National Association of Insurance Commissioners
or any similar organization, or any nationally recognized rating agency that
requires access to information about your investment portfolio or (viii) any
other Person to which such delivery or disclosure may be necessary or
appropriate (w) to effect compliance with any law, rule, regulation or order
applicable to you, (x) in response to any subpoena or other legal process, (y)
in connection with any litigation to which you are a party or (z) if an Event of
Default has occurred and is continuing, to the extent you may reasonably
determine such delivery and disclosure to be necessary or appropriate in the
enforcement or for the protection of the rights and remedies under your Notes
and this Agreement. Each holder of a Note, by its acceptance of a Note, will be
deemed to have agreed to be bound by and to be entitled to the benefits of this
Section 20 as though it were a party to this Agreement. On reasonable request by
the Company in connection with the delivery to any holder of a Note of
information required to be delivered to such holder under this Agreement or
requested by such holder (other than a holder that is a party to this Agreement
or its nominee), such holder will enter into an agreement with the Company
embodying the provisions of this Section 20.

                                       39

21.   SUBSTITUTION OF PURCHASER.

         You shall have the right to substitute any one of your Affiliates as
the purchaser of the Notes that you have agreed to purchase hereunder, by
written notice to the Company, which notice shall be signed by both you and such
Affiliate, shall contain such Affiliate's agreement to be bound by this
Agreement and shall contain a confirmation by such Affiliate of the accuracy
with respect to it of the representations set forth in Section 6. Upon receipt
of such notice, wherever the word "you" is used in this Agreement (other than in
this Section 21), such word shall be deemed to refer to such Affiliate in lieu
of you. In the event that such Affiliate is so substituted as a purchaser
hereunder and such Affiliate thereafter transfers to you all of the Notes then
held by such Affiliate, upon receipt by the Company of notice of such transfer,
wherever the word "you" is used in this Agreement (other than in this Section
21), such word shall no longer be deemed to refer to such Affiliate, but shall
refer to you, and you shall have all the rights of an original holder of the
Notes under this Agreement.

22.   MISCELLANEOUS.

22.1. Successors and Assigns.

         All covenants and other agreements contained in this Agreement by or on
behalf of any of the parties hereto bind and inure to the benefit of their
respective successors and assigns (including without limitation any subsequent
holder of a Note) whether so expressed or not.

22.2. Construction.

         Each covenant contained herein shall be construed (absent express
provision to the contrary) as being independent of each other covenant contained
herein, so that compliance with any one covenant shall not (absent such an
express contrary provision) be deemed to excuse compliance with any other
covenant. Where any provision herein refers to action to be taken by any Person,
or which such Person is prohibited from taking, such provision shall be
applicable whether such action is taken directly or indirectly by such Person.

22.3. Consent to Jurisdiction; Service of Process; Waiver of Jury Trial.

         (a) The Company irrevocably submits to the non-exclusive in personam
jurisdiction of any New York State or federal court sitting in the Borough of
Manhattan, The City of New York, over any suit, action or proceeding arising out
of or relating to this Agreement or the Notes. To the fullest extent it may
effectively do so under applicable law, the Company irrevocably waives and
agrees not to assert, by way of motion, as a defense or otherwise, any claim
that it is not subject to the in personam jurisdiction of any such court, any
objection that it may now or hereafter have to the laying of the venue of any
such suit, action or proceeding brought in any such court and any claim that any
such suit, action or proceeding brought in any such court has been brought in an
inconvenient forum.

         (b) The Company consents to process being served in any suit, action or
proceeding of the nature referred to in paragraph (a) of this Section 22.3 by
mailing a copy thereof by registered or certified mail, postage prepaid, return
receipt requested, to the address of

                                       40

such party specified in Section 18 or at such other address of which you shall
then have been notified pursuant to said Section. The Company agrees that such
service upon receipt (i) shall be deemed in every respect effective service of
process upon it in any such suit, action or proceeding and (ii) shall, to the
full extent permitted by law, be taken and held to be valid personal service
upon and personal delivery to such party. Notices hereunder shall be
conclusively presumed received as evidenced by a delivery receipt furnished by
the United States Postal Service or any reputable commercial delivery service.

         (c) Nothing in this Section 22.3 shall affect the right of any holder
of Notes to serve process in any manner permitted by law, or limit any right
that the holders of any of the Notes may have to bring proceedings against the
Company in the courts of any appropriate jurisdiction or to enforce in any
lawful manner a judgment obtained in one jurisdiction in any other jurisdiction.

         (d) EACH OF THE PARTIES HERETO WAIVES TRIAL BY JURY IN ANY ACTION
BROUGHT ON OR WITH RESPECT TO THIS AGREEMENT, THE NOTES OR ANY OTHER DOCUMENT
EXECUTED IN CONNECTION HEREWITH OR THEREWITH.

22.4. Payments Due on Non-Business Days.

         Anything in this Agreement or the Notes to the contrary notwithstanding
(but without limiting the requirement in Section 8.3 that notice of any optional
prepayment specify a Business Day as the date fixed for such prepayment), any
payment of principal of or Make-Whole Amount or interest on any Note that is due
on a date other than a Business Day shall be made on the next succeeding
Business Day without including the additional days elapsed in the computation of
the interest payable on such next succeeding Business Day.

22.5. Severability.

         Any provision of this Agreement that is prohibited or unenforceable in
any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall (to the fullest extent permitted by applicable law) not
invalidate or render unenforceable such provision in any other jurisdiction.

22.6. Accounting Terms; Changes in GAAP.

         All accounting terms used herein which are not expressly defined in
this Agreement have the meanings respectively given to them in accordance with
GAAP. Except as otherwise specifically provided herein, all computations made
pursuant to this Agreement shall be made in accordance with GAAP and all balance
sheets and other financial statements with respect thereto shall be prepared in
accordance with GAAP; provided, however, if (a) at the time of delivery of any
financial statements pursuant to Section 7.1 the Company shall object to making
computations for the purpose of determining compliance with this Agreement on
the basis of any change in GAAP after the date of this Agreement or (b) the
Required Holders shall so object in writing within 60 days after receipt of such
financial statements, then in either case such computations shall be made on a
basis consistent with the most recent financial statements

                                       41

delivered by the Company to the holders of Notes as to which no such objection
shall have been made (or, prior to the delivery of the first financial
statements pursuant to Section 7.1, consistent with the annual audited financial
statements included in the Appendices to the Memorandum).

         Without limiting the generality of Section 7.1, prior to or
concurrently with the delivery of financial statements reflecting any change in
GAAP, the Company will give notice of such change to the holders of Notes (and
for such purpose a note or explanation in reasonable detail accompanying such
financial statements shall be deemed to constitute notice). The Company will
also give prompt written notice to the holders of Notes in the event that the
Administrative Agent or Required Lenders (as such terms are defined in the Bank
Credit Agreement) object to determining compliance with the Bank Credit
Agreement on the basis of any change in GAAP.

         Except as otherwise specifically provided herein, any consolidated
financial statement or financial computation shall be done in accordance with
GAAP; and, if at the time that any such statement or computation is required to
be made the Company shall not have any Restricted Subsidiary, such terms shall
mean a financial statement or a financial computation, as the case may be, with
respect to the Company only.

22.7. Counterparts.

         This Agreement may be executed in any number of counterparts, each of
which shall be an original but all of which together shall constitute one
instrument. Each counterpart may consist of a number of copies hereof, each
signed by less than all, but together signed by all, of the parties hereto.

22.8. Governing Law.

         This Agreement and the Notes shall be construed and enforced in
accordance with, and the rights of the parties shall be governed by, the law of
the State of New York excluding choice-of-law principles of the law of such
State that would require the application of the laws of a jurisdiction other
than such State.

                                        42

         If you are in agreement with the foregoing, please sign the form of
agreement in the space below provided on a counterpart of this Agreement and
return it to the Company, whereupon the foregoing shall become a binding
agreement between you and the Company.

                                          Very truly yours,

                                          THE PITTSTON COMPANY

                                          By  /s/ James B. Hartough
                                             ----------------------------------
                                             Title: Vice President -- Corporate
                                                    Finance and Treasurer

The foregoing is hereby agreed to as of
  the date thereof.

AMERICAN HERITAGE LIFE INSURANCE COMPANY

By  /s/ Ronald Mendel
  -------------------------------------
        Ronald Mendel
        Authorized Signatory

By  /s/ Charles D. Mires
  -------------------------------------
        Charles D. Mires
        Authorized Signatory

                                        42

         If you are in agreement with the foregoing, please sign the form of
agreement in the space below provided on a counterpart of this Agreement and
return it to the Company, whereupon the foregoing shall become a binding
agreement between you and the Company.

                                          Very truly yours,

                                          THE PITTSTON COMPANY

                                          By  /s/ James B. Hartough
                                             ----------------------------------
                                             Title: Vice President -- Corporate
                                                    Finance and Treasurer

The foregoing is hereby agreed to as of
  the date thereof.

ALLSTATE LIFE INSURANCE COMPANY

By  /s/ Ronald Mendel
  -------------------------------------
        Ronald Mendel
        Authorized Signatory

By  /s/ Charles D. Mires
  -------------------------------------
        Charles D. Mires
        Authorized Signatory

                                        42

         If you are in agreement with the foregoing, please sign the form of
agreement in the space below provided on a counterpart of this Agreement and
return it to the Company, whereupon the foregoing shall become a binding
agreement between you and the Company.

                                          Very truly yours,

                                          THE PITTSTON COMPANY

                                          By  /s/ James B. Hartough
                                             ----------------------------------
                                             Title: Vice President -- Corporate
                                                    Finance and Treasurer

The foregoing is hereby agreed to as of
  the date thereof.

THE GUARDIAN LIFE INSURANCE
  COMPANY OF AMERICA

By  /s/ Thomas M. Donohue
  -------------------------------------
        Thomas M. Donohue

                                        42

         If you are in agreement with the foregoing, please sign the form of
agreement in the space below provided on a counterpart of this Agreement and
return it to the Company, whereupon the foregoing shall become a binding
agreement between you and the Company.

                                          Very truly yours,

                                          THE PITTSTON COMPANY

                                          By  /s/ James B. Hartough
                                             ----------------------------------
                                             Title: Vice President -- Corporate
                                                    Finance and Treasurer

The foregoing is hereby agreed to as of
  the date thereof.

NATIONWIDE LIFE INSURANCE COMPANY

By  /s/ Mark W. Poeppelman
  -------------------------------------
        Mark W. Poeppelman
        Associate Vice President

                                        42

         If you are in agreement with the foregoing, please sign the form of
agreement in the space below provided on a counterpart of this Agreement and
return it to the Company, whereupon the foregoing shall become a binding
agreement between you and the Company.

                                          Very truly yours,

                                          THE PITTSTON COMPANY

                                          By  /s/ James B. Hartough
                                             ----------------------------------
                                             Title: Vice President -- Corporate
                                                    Finance and Treasurer

The foregoing is hereby agreed to as of
  the date thereof.

NATIONWIDE LIFE AND ANNUITY
  INSURANCE COMPANY

By  /s/ Mark W. Poeppelman
  -------------------------------------
        Mark W. Poeppelman
        Associate Vice President

                                        42

         If you are in agreement with the foregoing, please sign the form of
agreement in the space below provided on a counterpart of this Agreement and
return it to the Company, whereupon the foregoing shall become a binding
agreement between you and the Company.

                                          Very truly yours,

                                          THE PITTSTON COMPANY

                                          By  /s/ James B. Hartough
                                             ----------------------------------
                                             Title: Vice President -- Corporate
                                                    Finance and Treasurer

The foregoing is hereby agreed to as of
  the date thereof.

GUARDIAN INSURANCE & ANNUITY
  COMPANY

By  /s/ Thomas M. Donohue
  -------------------------------------
        Thomas M. Donohue

                                        42

         If you are in agreement with the foregoing, please sign the form of
agreement in the space below provided on a counterpart of this Agreement and
return it to the Company, whereupon the foregoing shall become a binding
agreement between you and the Company.

                                          Very truly yours,

                                          THE PITTSTON COMPANY

                                          By  /s/ James B. Hartough
                                             ----------------------------------
                                             Title: Vice President -- Corporate
                                                    Finance and Treasurer

The foregoing is hereby agreed to as of
  the date thereof.

AMERICAN GENERAL ANNUITY
  INSURANCE COMPANY

By  /s/ C. Scott Inglis
  -------------------------------------
        C. Scott Inglis
        Investment Officer

                                        42

         If you are in agreement with the foregoing, please sign the form of
agreement in the space below provided on a counterpart of this Agreement and
return it to the Company, whereupon the foregoing shall become a binding
agreement between you and the Company.

                                          Very truly yours,

                                          THE PITTSTON COMPANY

                                          By  /s/ James B. Hartough
                                             ----------------------------------
                                             Title: Vice President -- Corporate
                                                    Finance and Treasurer

The foregoing is hereby agreed to as of
  the date thereof.

AMERICAN GENERAL LIFE INSURANCE
  COMPANY

By  /s/ C. Scott Inglis
  -------------------------------------
        C. Scott Inglis
        Investment Officer

                                                                      SCHEDULE B

                                  DEFINED TERMS

         As used herein, the following terms have the respective meanings set
forth below or set forth in the Section hereof following such term:

         "Affiliate" means, at any time, with respect to any Person (including
without limitation the Company), (a) any other Person that at such time directly
or indirectly through one or more intermediaries Controls, or is Controlled by,
or is under common Control with, such first Person, and (b) any Person
beneficially owning or holding, directly or indirectly, 10% or more of any class
of voting or equity interests of the Company or any Subsidiary or any
corporation of which the Company and its Subsidiaries beneficially own or hold,
in the aggregate, directly or indirectly, 10% or more of any class of voting or
equity interests. As used in this definition, "Control" means the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of a Person, whether through the ownership of voting
securities, by contract or otherwise. Unless the context otherwise clearly
requires, any reference to an "Affiliate" is a reference to an Affiliate of the
Company.

         "Asset Sale" is defined in Section 10.4.

         "Attributable Debt" means, as to any particular lease relating to a
sale and leaseback transaction, the Lease Rentals under such lease (discounted
on the same periodic basis from the respective due dates thereof at an interest
rate of 10% per annum) during the remaining term thereof.

         "Bank Credit Agreement" means the Credit Agreement dated as of October
3, 2000 among the Company, certain of its Subsidiaries, Fleet National Bank and
The Chase Manhattan Bank, as Co-Syndication Agents, Bank of America, N.A., as
Administrative Agent, and the Lenders named therein, as supplemented, amended,
restated or refinanced from time to time.

         "Business Day" means any day other than a Saturday, a Sunday or a day
on which commercial banks in New York City are required or authorized to be
closed.

         "Capital Lease" means, at any time, a lease with respect to which the
lessee is required concurrently to recognize the acquisition of an asset and the
incurrence of a liability in accordance with GAAP.

         "Capitalized Lease Obligations" means with respect to any Person, all
outstanding obligations of such Person in respect of Capital Leases, taken at
the capitalized amount thereof accounted for as indebtedness in accordance with
GAAP.

         "Closing" is defined in Section 3.

         "Code" means the Internal Revenue Code of 1986, as amended from time to
time, and the rules and regulations promulgated thereunder from time to time.

                                   Schedule B

                                      -2-

         "Company" means The Pittston Company, a Virginia corporation.

         "Consolidated EBITDA" means, for any period, an amount equal to the sum
of (a) Consolidated Net Income for such period plus (b) to the extent deducted
in determining Consolidated Net Income for such period, (i) Consolidated
Interest Expense, (ii) income tax expense, (iii) depreciation, depletion and
amortization, and (iv) all other non-cash charges, in each case determined on a
consolidated basis in accordance with GAAP.

         "Consolidated Interest Expense" means, for any period, as applied to
the Company and its Restricted Subsidiaries, all interest expense (whether paid
or accrued) and capitalized interest, including without limitation (a)
amortization of debt discount and premium and (b) the interest component under
Capital Leases, in each case determined on a consolidated basis in accordance
with GAAP.

         "Confidential Information" is defined in Section 20.

         "Consolidated Capitalization" means, at any date, the sum of (a)
Consolidated Indebtedness plus (b) Consolidated Net Worth, all as determined on
a consolidated basis for the Company and its Restricted Subsidiaries in
accordance with GAAP.

         "Consolidated Indebtedness" means, at any date, all Indebtedness of the
Company and its Restricted Subsidiaries determined on a consolidated basis in
accordance with GAAP.

         "Consolidated Net Income" means, for any period, the net income of the
Company and its Restricted Subsidiaries for such period, determined on a
consolidated basis in accordance with GAAP, excluding

          (a) the proceeds of any life insurance policy,

          (b) any gains arising from (i) the sale or other disposition of any
     assets (other than current assets) to the extent that the aggregate amount
     of the gains during such period exceeds the aggregate amount of the losses
     (other than losses described in clause (h) below) during such period from
     the sale, abandonment or other disposition of assets (other than current
     assets), (ii) any write-up of assets or (iii) the acquisition of
     outstanding securities of the Company or any Restricted Subsidiary,

          (c) any amount representing any interest in the undistributed earnings
     of any person other than a Restricted Subsidiary,

          (d) any earnings, prior to the date of acquisition, of any person
     acquired in any manner, and any earnings of any Subsidiary acquired prior
     to its becoming a Restricted Subsidiary,

          (e) any earnings of a successor to or transferee of the assets of the
     Company prior to its becoming such successor or transferee,

                                   Schedule B

                                      -3-

          (f) any deferred credit (or amortization of a deferred credit) arising
     from the acquisition of any person,

          (g) any extraordinary gains not covered by clause (b) above, and

          (h) any loss arising from or relating to the initial classification of
     any portion of the Pittston Minerals Group as discontinued operations
     and/or subsequent adjustments associated with the dispositions of such
     discontinued operations and any loss or charges in connection with the
     disposition of assets relating to aircraft, aircraft replacement parts and
     facilities and equipment by BAX Global Inc. and/or its Subsidiaries up to
     $75,000,000 on a cumulative basis for all periods after September 30, 2000.

         "Consolidated Net Worth" means, at any date, on a consolidated basis
for the Company and its Restricted Subsidiaries, shareholders' equity or net
worth as determined and computed on a consolidated basis in accordance with
GAAP, provided that in determining "Consolidated Net Worth" there shall be (a)
included any issuance of Preferred Stock by the Company (except mandatorily
redeemable Preferred Stock), (b) added back the amount of any minority interest
and (c) excluded (i) any loss arising from or relating to sale of or the initial
classification of any portion of the Pittston Minerals Group as discontinued
operations and any subsequent adjustments associated with the disposition of
such discontinued operations, (ii) any loss or charges in connection with the
disposition of assets relating to aircraft, aircraft replacement parts and
facilities and equipment by BAX Global Inc. and/or its Subsidiaries up to
$75,000,000 on a cumulative basis for all periods after September 30, 2000.

         "Default" means an event or condition the occurrence or existence of
which would, with the giving of notice or the lapse of time, or both, become an
Event of Default.

         "Default Rate" means that rate of interest for the Notes of each series
that is the greater of (i) 2% per annum above the stated interest rate for the
Notes of such series and (ii) 2% above the rate of interest publicly announced
by The Chase Manhattan Bank from time to time at its principal office in New
York City as its prime rate.

         "Discounted Consolidated Lease Rentals" is defined in Section 10.5(c).

         "Environmental Laws" means any and all Federal, state, local, and
foreign statutes, laws, regulations, ordinances, rules, judgments, orders,
decrees, permits, concessions, grants, franchises, licenses, agreements or
governmental restrictions relating to pollution and the protection of the
environment or the release of any materials into the environment, including but
not limited to those related to hazardous substances or wastes, air emissions
and discharges to waste or public systems.

         "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the rules and regulations promulgated thereunder
from time to time.

         "ERISA Affiliate" means any trade or business (whether or not
incorporated) that is treated as a single employer together with the Company
under section 414 of the Code.

                                   Schedule B

                                      -4-

         "Event of Default" is defined in Section 11.

         "Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time.

         "GAAP" means, except as otherwise provided in Section 22.6, generally
accepted accounting principles as in effect from time to time in the United
States of America.

         "Governmental Authority" means

          (a) the government of

               (i) the United States of America or any State or other political
          subdivision thereof, or

               (ii) any jurisdiction in which the Company or any Subsidiary
          conducts all or any part of its business, or which asserts
          jurisdiction over any properties of the Company or any Subsidiary, or

          (b) any entity exercising executive, legislative, judicial, regulatory
     or administrative functions of, or pertaining to, any such government.

         "Guaranty" means, with respect to any Person, any obligation (except
the endorsement in the ordinary course of business of negotiable instruments for
deposit or collection) of such Person guaranteeing or in effect guaranteeing any
Indebtedness, dividend or other obligation of any other Person in any manner,
whether directly or indirectly, including without limitation obligations
incurred through an agreement, contingent or otherwise, by such Person:

          (a) to purchase such Indebtedness or obligation or any property
     constituting security therefor;

          (b) to advance or supply funds (i) for the purchase or payment of such
     Indebtedness or obligation, or (ii) to maintain any working capital or
     other balance sheet condition or any income statement condition of any
     other Person or otherwise to advance or make available funds for the
     purchase or payment of such Indebtedness or obligation;

          (c) to lease properties or to purchase properties or services
     primarily for the purpose of assuring the owner of such Indebtedness or
     obligation of the ability of any other Person to make payment of the
     Indebtedness or obligation; or

          (d) otherwise to assure the owner of such Indebtedness or obligation
     against loss in respect thereof.

         In any computation of the Indebtedness or other liabilities of the
obligor under any Guaranty, the Indebtedness or other obligations that are the
subject of such Guaranty shall be assumed to be direct obligations of such
obligor.

                                   Schedule B

                                      -5-

         "Hazardous Material" means any and all pollutants, toxic or hazardous
wastes or any other substances, the removal of which may be required or the
generation, manufacture, refining, production, processing, treatment, storage,
handling, transportation, transfer, use, disposal, release, discharge, spillage,
seepage, or filtration of which is restricted, prohibited or penalized by any
applicable law (including without limitation asbestos, urea formaldehyde foam
insulation and polycholorinated biphenyls).

         "holder" means, with respect to any Note, the Person in whose name such
Note is registered in the register maintained by the Company pursuant to Section
13.1.

         "Indebtedness" with respect to any Person means, at any time, without
duplication,

          (a) its liabilities for borrowed money and its redemption obligations
     in respect of Preferred Stock that is mandatorily redeemable prior to the
     final maturity of the Notes,

          (b) its liabilities for the deferred purchase price of property
     acquired by such Person (excluding accounts payable arising in the ordinary
     course of business and not overdue but including all liabilities created or
     arising under any conditional sale or other title retention agreement with
     respect to any such property),

          (c) its Capitalized Lease Obligations,

          (d) all liabilities for borrowed money secured by any Lien with
     respect to any property owned by such Person (whether or not it has assumed
     or otherwise become liable for such liabilities),

          (e) the maximum amount of all drafts drawn under standby letters of
     credit issued or bankers' acceptance facilities created for the account of
     such Person (to the extent unreimbursed),

          (f) Swaps of such Person not entered into for the purpose of hedging
     in the ordinary course of business, and

          (g) any Guaranty of such Person with respect to liabilities of a type
     described in any of clauses (a) through (f) above.

Indebtedness of any person shall include all obligations of such person of the
character described in clauses (a) through (g) above to the extent such person
remains legally liable in respect thereof notwithstanding that any such
obligation is deemed to be extinguished under GAAP.

         "Institutional Investor" means (a) any original purchaser of a Note,
(b) any holder of a Note holding (together with one or more of its Affiliates)
more than 2% of the aggregate principal amount of the Notes then outstanding,
and (c) any bank, trust company, savings and loan association or other financial
institution, any pension plan, any investment company, any insurance company,
any broker or dealer, or any other similar financial institution or entity,
regardless of legal form.

                                   Schedule B

                                      -6-

         "Lease Rentals" is defined in Section 10.5(c).

         "Lien" means, with respect to any Person, any mortgage, lien, pledge,
charge, security interest or other encumbrance, or any interest or title of any
vendor, lessor, lender or other secured party to or of such Person under any
conditional sale or other title retention agreement or Capital Lease, upon or
with respect to any property or asset of such Person (including in the case of
stock, stockholder agreements, voting trust agreements and all similar
arrangements).

         "Make-Whole Amount" is defined in Section 8.7.

         "Material" means material in relation to the business, operations,
affairs, financial condition, assets or properties of the Company and its
Restricted Subsidiaries taken as a whole.

         "Material Adverse Effect" means a material adverse effect on (a) the
business, operations, affairs, financial condition, assets or properties of the
Company and its Restricted Subsidiaries taken as a whole, (b) the ability of the
Company to perform its obligations under this Agreement and the Notes or (c) the
validity or enforceability of this Agreement or the Notes or any Subsidiary
Guarantee.

         "Memorandum" is defined in Section 5.3.

         "Multiemployer Plan" means any Plan that is a "multiemployer plan" (as
such term is defined in section 4001(a)(3) of ERISA).

         "Notes" is defined in Section 1.1.

         "Officer's Certificate" means a certificate of a Senior Financial
Officer or of any other officer of the Company whose responsibilities extend to
the subject matter of such certificate.

         "Other Agreements" is defined in Section 2.

         "Other Purchasers" is defined in Section 2.

         "PBGC" means the Pension Benefit Guaranty Corporation referred to and
defined in ERISA or any successor thereto.

         "Person" means an individual, partnership, corporation, limited
liability company, association, trust, unincorporated organization, or a
government or agency or political subdivision thereof.

         "Pittston Minerals Group" means Pittston Minerals Group Inc. and its
Subsidiaries from time to time.

         "Plan" means an "employee benefit plan" (as defined in section 3(3) of
ERISA) that is or, within the preceding five years, has been established or
maintained, or to which

                                   Schedule B

                                      -7-

contributions are or, within the preceding five years, have been made or
required to be made, by the Company or any ERISA Affiliate or with respect to
which the Company or any ERISA Affiliate may have any liability.

         "Preferred Stock" means any class of capital stock of a corporation
that is preferred over any other class of capital stock of such corporation as
to the payment of dividends or the payment of any amount upon liquidation or
dissolution of such corporation.

         "Priority Debt" is defined in Section 10.1.

         "property" or "properties" means, unless otherwise specifically
limited, real or personal property of any kind, tangible or intangible, inchoate
or otherwise.

         "PTE" is defined in Section 6.2.

         "QPAM Exemption" means Prohibited Transaction Class Exemption 84-14
issued on March 13, 1984 by the United States Department of Labor.

         "Required Holders" means, at any time, the holders of at least a
majority in unpaid principal amount of the Notes at the time outstanding
(exclusive of Notes then owned by the Company or any of its Affiliates).

         "Responsible Officer" means any Senior Financial Officer.

         "Restricted Subsidiary" means as of the date of this Agreement each
Subsidiary as designated as such in Schedule 5.4 and thereafter means each other
Subsidiary that is not an Unrestricted Subsidiary; provided that each of the
Subsidiary Guarantors listed in Section 4.5 shall at all times remain a
Restricted Subsidiary, in each case so long as such corporation is a Subsidiary
Guarantor.

         "Securities Act" means the Securities Act of 1933, as amended from time
to time.

         "Senior Financial Officer" means the chief financial officer, principal
accounting officer, treasurer or controller of the Company.

         "Series A Notes" is defined in Section 1.1.

         "Series B Notes" is defined in Section 1.1.

         "Subsidiary" means, as to any Person, any corporation or other business
entity a majority of the combined voting power of all Voting Stock of which is
owned by such Person or one or more of its Subsidiaries or such Person and one
or more of its Subsidiaries. Unless the context otherwise clearly requires, any
reference to a "Subsidiary" is a reference to a Subsidiary of the Company.

         "Subsidiary Guarantee" is defined in Section 1.2.

                                   Schedule B

                                      -8-

         "Subsidiary Guarantors" is defined in Section 4.5.

         "Swaps" means, with respect to any Person, payment obligations with
respect to interest rate swaps, currency swaps and similar obligations
obligating such Person to make payments, whether periodically or upon the
happening of a contingency. For the purposes of this Agreement, the amount of
the obligation under any Swap shall be the amount determined in respect thereof
as of the end of the then most recently ended fiscal quarter of such Person,
based on the assumption that such Swap had terminated at the end of such fiscal
quarter, and in making such determination, if any agreement relating to such
Swap provides for the netting of amounts payable by and to such Person
thereunder or if any such agreement provides for the simultaneous payment of
amounts by and to such Person, then in each such case, the amount of such
obligation shall be the net amount so determined.

         "Unrestricted Subsidiary" means any Subsidiary that has been designated
as an Unrestricted Subsidiary on Schedule 5.4, any Restricted Subsidiary that is
designated as an Unrestricted Subsidiary after the date of the Closing pursuant
to Section 10.9 and any Person that becomes a Subsidiary after the date of the
Closing that is not designated as a Restricted Subsidiary pursuant to said
Section, in each case other than an Unrestricted Subsidiary that is subsequently
redesignated as a Restricted Subsidiary pursuant to said Section.

         "Voting Stock" means, with respect to any Person, any shares of stock
or other equity interests of any class or classes of such Person whose holders
are entitled under ordinary circumstances (irrespective of whether at the time
stock or other equity interests of any other class or classes shall have or
might have voting power by reason of the happening of any contingency) to vote
for the election of a majority of the directors, managers, trustees or other
governing body of such Person.

         "Wholly-Owned Restricted Subsidiary" means, at any time, any Restricted
Subsidiary all of the equity interests (except directors' qualifying shares) and
voting interests of which are owned by any one or more of the Company and the
Company's other Wholly-Owned Restricted Subsidiaries at such time.

                                   Schedule B

                             [FORM OF SERIES A NOTE]

                              THE PITTSTON COMPANY

                      7.84% Senior Note, Series A, due 2007

No. RA-[_____]                                               New York, New York
$[_______]                                                               [Date]
PPN: 725701 B@ 4

         FOR VALUE RECEIVED, the undersigned, The Pittston Company (the
"Company"), a Virginia corporation, hereby promises to pay to [           ], or
registered assigns, the principal sum of [        ] DOLLARS on January 18, 2007,
with interest (computed on the basis of a 360-day year of twelve 30-day months)
(a) from the date hereof on the unpaid balance thereof at the rate of 7.84%
per annum, payable semiannually on January 18 and July 18 in each year, until
the principal hereof shall have become due and payable, and (b) on any overdue
payment of principal, any overdue payment of interest (to the extent permitted
by applicable law) and any overdue payment of any premium or Make-Whole Amount
(as defined in the Note Purchase Agreements referred to below), payable
semiannually as aforesaid (or, at the option of the registered holder hereof,
on demand) at a rate per annum from time to time equal to the greater of
(i) 9.84% and (ii) 2% above the rate of interest publicly announced by The
Chase Manhattan Bank from time to time at its principal office in New York City
as its prime rate.

         Payments of principal of, interest on and any Make-Whole Amount with
respect to this Note are to be made in lawful money of the United States of
America at said principal office of The Chase Manhattan Bank in New York City or
at such other place as the Company shall have designated by written notice to
the holder of this Note as provided in the Note Purchase Agreements referred to
below.

         This Note is one of a series of 7.84% Senior Notes, Series A, due 2007
issued pursuant to separate Note Purchase Agreements dated as of January 18,
2001 (as from time to time amended, the "Note Purchase Agreements") between the
Company and the respective Purchasers named therein and is entitled to the
benefits thereof. This Note is also entitled to the benefits of certain
Subsidiary Guarantees heretofore and from time to time hereafter executed and
delivered pursuant to the Note Purchase Agreements. Each holder of this Note
will be deemed, by its acceptance hereof, to have agreed to the confidentiality
provisions set forth in Section 20 of the Note Purchase Agreements.

         This Note is a registered Note and, as provided in the Note Purchase
Agreements, upon surrender of this Note for registration of transfer or
exchange, accompanied by a written instrument of transfer duly executed by the
registered holder hereof or such holder's attorney duly authorized in writing, a
new Note of the same series for a like principal amount will be issued to, and
registered in the name of, the transferee. Prior to due presentment for
registration

                                      -2-

of transfer, the Company may treat the person in whose name this Note is
registered as the owner hereof for the purpose of receiving payment and for all
other purposes, and the Company will not be affected by any notice to the
contrary.

         The Company is required to make prepayments of principal, and may make
optional prepayments of principal in whole or from time to time in part, at the
times and on the terms specified in the Note Purchase Agreements, but not
otherwise.

         If an Event of Default, as defined in the Note Purchase Agreements,
occurs and is continuing, the principal of this Note may be declared or
otherwise become due and payable in the manner, at the price (including any
applicable premium or Make-Whole Amount) and with the effect provided in the
Note Purchase Agreements.

         This Note shall be construed and enforced in accordance with, and the
rights of the Company and the holder hereof shall be governed by, the laws of
the State of New York, excluding choice-of-law principles of the law of such
State that would require the application of the laws of a jurisdiction other
than such State.

                                                     THE PITTSTON COMPANY

                                                     By
                                                       -------------------------
                                                       Title:

                             [FORM OF SERIES B NOTE]

                              THE PITTSTON COMPANY

                      8.02% Senior Note, Series B, due 2008

No. RB-[_____]                                               New York, New York
$[_______]                                                               [Date]
PPN: 725701 B# 2

         FOR VALUE RECEIVED, the undersigned, The Pittston Company (the
"Company"), a Virginia corporation, hereby promises to pay to [            ], or
registered assigns, the principal sum of [         ] DOLLARS on January 18,
2008, with interest (computed on the basis of a 360-day year of twelve 30-day
months) (a) from the date hereof on the unpaid balance thereof at the rate of
8.02% per annum, payable semiannually on January 18 and July 18 in each year,
until the principal hereof shall have become due and payable, and (b) on any
overdue payment of principal, any overdue payment of interest (to the extent
permitted by applicable law) and any overdue payment of any premium or
Make-Whole Amount (as defined in the Note Purchase Agreements referred to
below), payable semiannually as aforesaid (or, at the option of the registered
holder hereof, on demand) at a rate per annum from time to time equal to the
greater of (i) 10.02% and (ii) 2% above the rate of interest publicly announced
by The Chase Manhattan Bank from time to time at its principal office in New
York City as its prime rate.

         Payments of principal of, interest on and any Make-Whole Amount with
respect to this Note are to be made in lawful money of the United States of
America at said principal office of The Chase Manhattan Bank in New York City or
at such other place as the Company shall have designated by written notice to
the holder of this Note as provided in the Note Purchase Agreements referred to
below.

         This Note is one of a series of 8.02% Senior Notes, Series B, due 2008
issued pursuant to separate Note Purchase Agreements dated as of January 18,
2001 (as from time to time amended, the "Note Purchase Agreements") between the
Company and the respective Purchasers named therein and is entitled to the
benefits thereof. This Note is also entitled to the benefits of certain
Subsidiary Guarantees heretofore and from time to time hereafter executed and
delivered pursuant to the Note Purchase Agreements. Each holder of this Note
will be deemed, by its acceptance hereof, to have agreed to the confidentiality
provisions set forth in Section 20 of the Note Purchase Agreements.

         This Note is a registered Note and, as provided in the Note Purchase
Agreements, upon surrender of this Note for registration of transfer or
exchange, accompanied by a written instrument of transfer duly executed by the
registered holder hereof or such holder's attorney duly authorized in writing, a
new Note of the same series for a like principal amount will be
issued to, and registered in the name of, the transferee. Prior to due
presentment for registration

of transfer, the Company may treat the person in whose name this Note is
registered as the owner hereof for the purpose of receiving payment and
for all other purposes, and the Company will not be affected by any notice
to the contrary.

         The Company may make optional prepayments of principal in whole or from
time to time in part, at the times and on the terms specified in the Note
Purchase Agreements, but not otherwise.

         If an Event of Default, as defined in the Note Purchase Agreements,
occurs and is continuing, the principal of this Note may be declared or
otherwise become due and payable in the manner, at the price (including any
applicable premium or Make-Whole Amount) and with the effect provided in the
Note Purchase Agreements.

         This Note shall be construed and enforced in accordance with, and the
rights of the Company and the holder hereof shall be governed by, the laws of
the State of New York, excluding choice-of-law principles of the law of such
State that would require the application of the laws of a jurisdiction other
than such State.

                                                     THE PITTSTON COMPANY

                                                     By
                                                       -------------------------
                                                       Title:

================================================================================

                          RECEIVABLES PURCHASE AGREEMENT

                          dated as of December 15, 2000

                                      among

                             BAX FUNDING CORPORATION

                                 BAX GLOBAL INC.

                          LIBERTY STREET FUNDING CORP.

                                       and

                             THE BANK OF NOVA SCOTIA

================================================================================

                                TABLE OF CONTENTS

                                                                                                Page
                                                                                                ----
                                                                                          
                                     ARTICLE I.
                          AMOUNTS AND TERMS OF THE PURCHASES
Section 1.1.  Purchase Facility....................................................................1
Section 1.2.  Making Purchases.....................................................................2
Section 1.3.  Purchased Interest Computation.......................................................3
Section 1.4.  Settlement Procedures................................................................3
Section 1.5.  Fees.................................................................................7
Section 1.6.  Payments and Computations, Etc.......................................................7
Section 1.7.  Increased Costs......................................................................8
Section 1.8.  Requirements of Law..................................................................9
Section 1.9.  Mitigation..........................................................................10
Section 1.10. Accounting Terms....................................................................11

                                     ARTICLE II.
               REPRESENTATIONS AND WARRANTIES; COVENANTS;TERMINATION EVENTS
Section 2.1.  Representations and Warranties; Covenants...........................................11
Section 2.2.  Termination Events..................................................................11

                                     ARTICLE III.
                                   INDEMNIFICATION
Section 3.1.  Indemnities by the Seller...........................................................13
Section 3.2.  Indemnities by the Servicer.........................................................14

                                     ARTICLE IV.
                             ADMINISTRATION AND COLLECTIONS
Section 4.1.  Appointment of the Servicer.........................................................14
Section 4.2.  Duties of the Servicer..............................................................15
Section 4.3.  Establishment and Use of Certain Accounts...........................................16
Section 4.4.  Enforcement Rights..................................................................17
Section 4.5.  Responsibilities of the Seller......................................................19
Section 4.6.  Servicing Fee.......................................................................19

                                     ARTICLE V.
                                   MISCELLANEOUS
Section 5.1.  Amendments, Etc.....................................................................20
Section 5.2.  Notices, Etc........................................................................20
Section 5.3.  Assignability.......................................................................20
Section 5.4.  Costs, Expenses and Taxes...........................................................21
Section 5.5.  No Proceedings; Limitation on Payments..............................................22
Section 5.6.  GOVERNING LAW AND JURISDICTION......................................................22
Section 5.7.  Execution in Counterparts...........................................................22
Section 5.8.  Survival of Termination.............................................................23
Section 5.9.  WAIVER OF JURY TRIAL................................................................23
Section 5.10. Entire Agreement....................................................................23
Section 5.11. Headings............................................................................23
Section 5.12. Liabilities.........................................................................23
Section 5.13. Confidentiality.....................................................................23

                                       i

EXHIBIT I         Definitions
EXHIBIT II        Conditions of Purchases
EXHIBIT III       Representations and Warranties
EXHIBIT IV        Covenants
EXHIBIT V         Termination Events

SCHEDULE I        Credit and Collection Policy
SCHEDULE II       Lock-box Banks and Lock-box Accounts
SCHEDULE III      Trade Names

ANNEX A           Form of Monthly Report
ANNEX B           Form of Purchase Notice

                                       ii

     This RECEIVABLES PURCHASE AGREEMENT (as amended, supplemented or otherwise
modified from time to time, this "Agreement") is entered into as of December 15,
2000, among BAX FUNDING CORPORATION, a California corporation, as seller (the
"Seller"), BAX GLOBAL INC., a Delaware corporation ("BAX"), as initial servicer
(in such capacity, together with its successors and permitted assigns in such
capacity, the "Servicer"), LIBERTY STREET FUNDING CORP., a Delaware corporation
(together with its successors and permitted assigns, the "Issuer"), and THE BANK
OF NOVA SCOTIA, a Canadian chartered bank acting through its New York Agency
("BNS"), as administrator (in such capacity, together with its successors and
assigns in such capacity, the "Administrator").

     PRELIMINARY STATEMENTS. Certain terms that are capitalized and used
throughout this Agreement are defined in Exhibit I. References in the Exhibits
hereto to the "Agreement" refer to this Agreement, as amended, supplemented or
otherwise modified from time to time.

     The Seller desires to sell, transfer and assign an undivided variable
percentage interest in a pool of receivables, and the Issuer desires to acquire
such undivided variable percentage interest, as such percentage interest shall
be adjusted from time to time based upon, in part, reinvestments made by the
Issuer.

     In consideration of the mutual agreements, provisions and covenants
contained herein, the parties hereto agree as follows:

                                   ARTICLE I.
                       AMOUNTS AND TERMS OF THE PURCHASES

     Section 1.1. Purchase Facility. (a) On the terms and conditions hereinafter
set forth, the Issuer hereby agrees to purchase, and make reinvestments in,
undivided percentage ownership interests with regard to the Purchased Interest
from the Seller from time to time from the date hereof to the Facility
Termination Date. Under no circumstances shall the Issuer make any such purchase
or reinvestment if, after giving effect to such purchase or reinvestment, the
aggregate outstanding Capital of the Purchased Interest would exceed the
Purchase Limit.

     (b) The Seller may, upon at least 30 days' written notice to the
Administrator, terminate in whole or reduce in part the unused portion of the
Purchase Limit; provided, that each partial reduction shall be in the amount of
at least $1,000,000, and an integral multiple of $1,000,000, and that, unless
terminated in whole, the Purchase Limit shall in no event be reduced below
$20,000,000.

     Section 1.2. Making Purchases. (a) Each purchase (but not reinvestment) of
undivided percentage ownership interests with regard to the Purchased Interest
hereunder shall be made upon the Seller's irrevocable written notice in the form
of Annex B delivered to the Administrator in accordance with Section 5.2 (which
notice must be received by the Administrator before 2:00 p.m., New York City
time) at least three Business Days before the requested purchase date and shall
specify: (A) the amount requested to be paid to the Seller (such amount, which
shall not be less than $1,000,000, being the Capital relating to the undivided
percentage ownership interest then being purchased), and (B) the date of such
purchase (which shall be a Business Day).

     (b) On the date of each purchase (but not reinvestment) of undivided
percentage ownership interests with regard to the Purchased Interest hereunder,
the Issuer shall, upon satisfaction of the applicable conditions set forth in
Exhibit II, make available to the Seller in same day funds, at The Chase
Manhattan Bank, account number 323181317, ABA 021000021, an amount equal to the
Capital relating to the undivided percentage ownership interest then being
purchased.

     (c) Effective on the date of each purchase pursuant to this Section and
each reinvestment pursuant to Section 1.4, the Seller hereby sells and assigns
to the Issuer an undivided percentage ownership interest in: (i) each Pool
Receivable then existing, (ii) all Related Security with respect to such Pool
Receivables, and (iii) all Collections with respect to, and other proceeds of,
such Pool Receivables and Related Security.

     (d) To secure all of the Seller's obligations (monetary or otherwise) under
this Agreement and the other Transaction Documents to which it is a party,
whether now or hereafter existing or arising, due or to become due, direct or
indirect, absolute or contingent, the Seller hereby grants to the Issuer a
security interest in all of the Seller's right, title and interest (including
any undivided interest of the Seller) in, to and under all of the following,
whether now or hereafter owned, existing or arising: (i) all Pool Receivables,
(ii) all Related Security with respect to such Pool Receivables, (iii) all
Collections with respect to such Pool Receivables, (iv) the Lock-Box Accounts
and the Collection Account and all amounts on deposit therein, and all
certificates and instruments, if any, from time to time evidencing such Lock-Box
Accounts and Collection Account and amounts on deposit therein, (v) all rights
(but none of the obligations) of the Seller under the Sale Agreement, and (vi)
all proceeds of, and all amounts received or receivable under any or all of, the
foregoing (collectively, the "Pool Assets"). The Issuer shall have, with respect
to the Pool Assets, and in addition to all the other

                                       2

rights and remedies available to the Issuer, all the rights and remedies of a
secured party under any applicable UCC.

     Section 1.3. Purchased Interest Computation. The Purchased Interest shall
be initially computed on the date of the initial purchase hereunder. Thereafter,
until the Facility Termination Date, the Purchased Interest shall be
automatically recomputed (or deemed to be recomputed) on each Business Day other
than a Termination Day. From and after the occurrence of any Termination Day,
the Purchased Interest shall (until the event(s) giving rise to such Termination
Day are satisfied or are waived by the Administrator) be deemed to be 100%. The
Purchased Interest shall become zero when the Capital thereof and Discount
thereon shall have been paid in full, all the amounts owed by the Seller and the
Servicer hereunder to the Issuer, the Administrator and any other Indemnified
Party or Affected Person are paid in full, and the Servicer shall have received
the accrued Servicing Fee thereon.

     Section 1.4. Settlement Procedures. (a) The collection of the Pool
Receivables shall be administered by the Servicer in accordance with this
Agreement. The Seller shall provide to the Servicer on a timely basis all
information needed for such administration, including notice of the occurrence
of any Termination Day and current computations of the Purchased Interest.

     (b) The Servicer shall, on each Business Day on which Collections of Pool
Receivables are received (or deemed received) by the Seller or Servicer or are
deposited into the Lock-Box Accounts, transfer such Collections therefrom and
deposit such Collections into the Collection Account. With respect to such
Collections on such day, the Servicer shall:

          (i) set aside within the Collection Account for the benefit of the
     Issuer, out of the percentage of such Collections represented by the
     Purchased Interest, first an amount equal to the Discount accrued through
     such day for each Portion of Capital and not previously transferred,
     second, an amount equal to all accrued and unpaid Fees not previously
     transferred, and third, to the extent funds are available therefor, an
     amount equal to the Issuer's Share of the Servicing Fee accrued through
     such day and not previously transferred; and

          (ii) subject to Section 1.4(f), if such day is not a Termination Day,
     remit to the Seller, on behalf of the Issuer, the remainder of the
     percentage of such Collections, represented by the Purchased Interest, to
     the extent representing a return on the Capital; such Collections shall be
     automatically reinvested in Pool Receivables, and in the Related Security
     and Collections and other proceeds with respect thereto, and the Purchased
     Interest shall be

                                       3

     automatically recomputed pursuant to Section 1.3; it being understood,
     that prior to remitting to the Seller the remainder of such Collections
     by way of reinvestment in Pool

     Receivables, the Servicer shall have calculated the Purchased Interest on
     such day, and if such Purchased Interest shall exceed 100% of the Net
     Receivables Pool Balance on such day, such Collections shall not be
     remitted to the Seller but shall be set aside within the Collection Account
     for the benefit of the Issuer in accordance with paragraph (iii) below;

          (iii) if such day is a Termination Day, set aside within the
     Collection Account for the benefit of the Issuer the entire remainder of
     the percentage of the Collections represented by the Purchased Interest;
     provided that so long as the Facility Termination Date has not occurred if
     any amounts are so transferred to the Collection Account on any Termination
     Day and thereafter, the conditions set forth in Section 2 of Exhibit II are
     satisfied or are waived by the Administrator, such previously transferred
     amounts shall, to the extent representing a return on the Capital, be
     reinvested in accordance with the preceding paragraph (ii) on the day of
     such subsequent satisfaction or waiver of conditions; and

          (iv) if such day is not a Termination Day, release to the Seller
     (subject to Section 1.4(f)) for its own account any Collections in excess
     of (x) any amounts that are required to be reinvested in accordance with
     the foregoing paragraph (ii) or the proviso to paragraph (iii), (y) the
     amounts that are required to be set aside pursuant to paragraph (i) above
     and (z) in the event the Seller is not the Servicer, all reasonable and
     appropriate out-of-pocket costs and expenses of such Servicer of servicing,
     collecting and administering the Pool Receivables.

     (c) The Servicer shall deposit into the Administration Account (or such
other account designated by the Administrator), on each Settlement Date,
Collections held for the Issuer pursuant to clause (b)(i) or (f) plus the amount
of Collections then held for the Issuer pursuant to clauses (b)(ii) and (iii) of
Section 1.4; provided, that if BAX or an Affiliate thereof is the Servicer, such
day is not a Termination Day and the Administrator has not notified BAX (or such
Affiliate) that such right is revoked, BAX (or such Affiliate) may retain the
portion of the Collections set aside pursuant to clause (b)(i) that represents
the Issuer's Share of the Servicing Fee. On the last day of each Yield Period,
the Administrator will notify the Servicer by facsimile of the amount of
Discount accrued with respect to each Portion of Capital during such Yield
Period or portion thereof.

                                       4

     (d) Upon receipt of funds deposited into the Administration Account
pursuant to clause (c), the Administrator shall cause such funds to be
distributed as follows:

          (i) if such distribution occurs on a day that is not a Termination Day
     and the Purchased Interest does not exceed 100%, first to the Issuer in
     payment in full of all accrued Discount with respect to each Portion of
     Capital and accrued and unpaid Fees, and second, if the Servicer has set
     aside amounts in respect of the Servicing Fee pursuant to clause (b)(i) and
     has not retained such amounts pursuant to clause (c), to the Servicer
     (payable in arrears on each Settlement Date) in payment in full of the
     Issuer's Share of accrued Servicing Fees so set aside, and

          (ii) if such distribution occurs on a Termination Day or on a day when
     the Purchased Interest exceeds 100%, first to the Issuer in payment in full
     of all accrued Discount with respect to each Portion of Capital and accrued
     and unpaid Fees, second to the Issuer in payment in full of Capital (or, if
     such day is not a Termination Day, the amount necessary to reduce the
     Purchased Interest to 100%), third, if BAX or an Affiliate thereof is not
     the Servicer, to the Servicer in payment in full of the Issuer's Share of
     all accrued Servicing Fees, fourth, if the Capital and accrued Discount
     with respect to each Portion of Capital have been reduced to zero, and all
     accrued Servicing Fees payable to the Servicer (if other than BAX or an
     Affiliate thereof) have been paid in full, to the Issuer, the Administrator
     and any other Indemnified Party or Affected Person in payment in full of
     any other amounts owed thereto by the Seller under this Agreement and,
     fifth, unless such amount has been retained by the Servicer pursuant to
     clause (c), to the Servicer (if the Servicer is BAX or an Affiliate
     thereof) in payment in full of the Issuer's Share of all accrued Servicing
     Fees.

After the Capital, Discount, Fees and Servicing Fees with respect to the
Purchased Interest, and any other amounts payable by the Seller and the Servicer
to the Issuer, the Administrator or any other Indemnified Party or Affected
Person hereunder, have been paid in full, all additional Collections with
respect to the Purchased Interest shall be paid to the Seller for its own
account.

     (e) For the purposes of this Section 1.4:

          (i) if on any day the Outstanding Balance of any Pool Receivable is
     reduced or adjusted as a result of any defective, rejected, returned,
     repossessed or foreclosed goods or services, or any revision, cancellation,
     allowance, discount or other adjustment made by any Originator, the

                                       5

     Servicer, the Seller or any Affiliate of the Seller, or any setoff or
     dispute between any Originator, the Seller or any Affiliate of the Seller
     and an Obligor, the Seller shall be deemed to have received on such day a
     Collection of such Pool Receivable in the amount of such reduction or
     adjustment;

          (ii) if on any day any of the representations or warranties in Section
     1(g), (m) or (s) of Exhibit III is not true with respect to any Pool
     Receivable, the Seller shall be deemed to have received on such day a
     Collection of such Pool Receivable in full (Collections deemed to have been
     received pursuant to clause (i) and (ii) of this paragraph (e) are
     hereinafter sometimes referred to as "Deemed Collections");

          (iii) except as otherwise required by applicable law or the relevant
     Contract, all Collections received from an Obligor of any Receivable shall
     be applied to the Receivables of such Obligor in the order of the age of
     such Receivables, starting with the oldest such Receivable, unless such
     Obligor designates in writing its payment for application to specific
     Receivables; and

          (iv) if and to the extent the Administrator or the Issuer shall be
     required for any reason to pay over to an Obligor (or any trustee,
     receiver, custodian or similar official in any Insolvency Proceeding) any
     amount received by it hereunder, such amount shall be deemed not to have
     been so received by the Administrator or the Issuer but rather to have been
     retained by the Seller and, accordingly, the Administrator or the Issuer,
     as the case may be, shall have a claim against the Seller for such amount,
     payable when and to the extent that any distribution from or on behalf of
     such Obligor is made in respect thereof.

     (f) If at any time the Seller shall wish to cause the reduction of Capital
of the Purchased Interest (but not to commence the liquidation, or reduction to
zero, of the entire Capital of the Purchased Interest), the Seller may do so as
follows:

          (i) the Seller shall give the Administrator and the Servicer at least
     two Business Days' prior written notice thereof (including the amount of
     such proposed reduction and the proposed date on which such reduction will
     commence);

          (ii) on the proposed date of commencement of such reduction and on
     each day thereafter, the Servicer shall cause Collections not to be
     reinvested until the amount thereof not so reinvested shall equal the
     desired amount of reduction; and

          (iii) the Servicer shall hold such Collections in the Collection
     Account for the benefit of the Issuer, for payment
                                       6

     to the Administrator on the next Settlement Date immediately following the
     current Yield Period, and the Capital of the Purchased Interest shall be
     deemed reduced in the amount to be paid to the Administrator only when
     in fact finally so paid;

provided, that:

          (A) the amount of any such reduction shall be not less than $1,000,000
     and shall be an integral multiple of $1,000,000, and the entire Capital of
     the Purchased Interest after giving effect to such reduction shall be not
     less than $20,000,000 and shall be in an integral multiple of $1,000,000
     (unless Capital shall have been reduced to zero); and

          (B) the Seller shall choose a reduction amount, and the date of
     commencement thereof, so that to the extent practicable such reduction
     shall commence and conclude in the same Yield Period.

     Section 1.5. Fees. The Seller shall pay to the Administrator certain fees
in the amounts and on the dates set forth in a letter, dated the date hereof,
among the Seller, the Servicer, the Issuer and the Administrator (as such letter
agreement may be amended, supplemented or otherwise modified from time to time,
the "Fee Letter").

     Section 1.6. Payments and Computations, Etc. (a) All amounts to be paid or
deposited by the Seller or the Servicer hereunder shall be made without
reduction for offset or counterclaim and shall be paid or deposited no later
than 2:00 p.m. (New York City time) on the day when due in same day funds to the
Administration Account. All amounts received after 2:00 p.m. (New York City
time) will be deemed to have been received on the next Business Day.

     (b) The Seller or the Servicer, as the case may be, shall, to the extent
permitted by law, pay interest on any amount not paid or deposited by the Seller
or the Servicer, as the case may be, when due hereunder, at an interest rate
equal to 2.0% per annum above the Base Rate, payable on demand.

     (c) All computations of interest under clause (b) and all computations of
Discount, fees and other amounts hereunder shall be made on the basis of a year
of 360 (or 365 or 366, as applicable, with respect to Discount or other amounts
calculated by reference to the Base Rate) days for the actual number of days
elapsed. Whenever any payment or deposit to be made hereunder shall be due on a
day other than a Business Day, such payment or deposit shall be made on the next
Business Day and such extension of time shall be included in the computation of
such payment or deposit.

                                       7

     Section 1.7. Increased Costs. (a) If either (i) the introduction of, or any
change or proposed change in, or in the interpretation of, any applicable law or
regulation, or (b) compliance with any guideline or request issued after the
date hereof from any central bank or comparable agency or other Governmental
Authority (whether or not having the force of law), has or would have the effect
of reducing the rate of return on the capital of, or has affected or would
affect the amount of capital required to be maintained by the Administrator,
the Issuer, any Purchaser, any other Program Support Provider or any of their
respective Affiliates (each, an "Affected Person"), below the rate which
such Affected Person could have achieved but for such introduction, change
or compliance by an amount such Affected Person deems material, and such
Affected Person determines that the amount of such reduction is based upon
the existence of any commitment to make purchases of (or otherwise to maintain
the investment in) Pool Receivables related to this Agreement or any other
Transaction Document, then within five (5) Business Days after written demand
by any such Affected Person, the Seller shall pay to such Affected Person from
time to time as specified by such Affected Person additional amounts sufficient
to compensate such Affected Person or other corporation for such reduction;
provided, however, that to the extent any reduction in the rate of return on
such Affected Person's capital results both from its obligations hereunder and
from developments in its business or financial position not related to this
Agreement, such Affected Person shall, in determining the amount necessary to
compensate it under this Section, attempt in good faith to take account of the
relative contributions of such obligations hereunder and such other developments
or change in its financial position to such reduction. A certificate of such
Affected Person setting forth in reasonable detail the basis for determining
such amounts necessary to compensate such Affected Person shall be forwarded
to the Seller through the Administrator and shall be conclusively presumed to
be correct save for manifest error.

     (b) If, due to either: (i) the introduction of or any change in or in the
interpretation of any law or regulation or (ii) compliance with any guideline or
request from any central bank or other Governmental Authority (whether or not
having the force of law), there shall be any increase in the cost to any
Affected Person of agreeing to purchase or purchasing, or maintaining the
ownership of, the Purchased Interest in respect of which Discount is computed by
reference to the Eurodollar Rate, then, upon demand by such Affected Person, the
Seller shall promptly pay in any event not later than 30 days from the delivery
of such demand to such Affected Person, from time to time as specified by such
Affected Person, additional amounts sufficient to compensate such Affected
Person for such increased costs; provided, however, that to the extent any such
increase in costs results both from its obligations

                                       8

hereunder and from developments in its business or financial position not
related to this Agreement, such Affected Party shall, in determining
the amount necessary to compensate it under this Section 1.7(b) attempt
in good faith to take account of the relative contributions of such
obligations hereunder and such other developments or change in its
financial position to such increase. The Administrator and Affected Party
will promptly notify the Seller of any event of which it has knowledge
which will entitle such Affected Party to compensation pursuant to this
Section 1.7(b); provided that the Administrator shall incur no liability
whatsoever to the Affected Party or the Seller in the event it fails to do so.
The amount of such compensation shall be determined, in the Affected Party's
reasonable discretion, based upon the assumption that such Affected Party funded
its purchase or agreed to fund its purchase of such Purchased Interest in the
London interbank market and using any reasonable attribution or averaging
methods which such Affected Party deems appropriate and practical. A certificate
of such Affected Party setting forth in reasonable detail the basis for
determining such amount or amounts necessary to compensate such Affected party
shall be forwarded to the Seller through the Administrator and shall be
conclusively presumed to be correct save for manifest error. A certificate as to
such amounts submitted to the Seller and the Administrator by such Affected
Person shall be conclusive and binding for all purposes, absent manifest error.

     Section 1.8. Requirements of Law. If any Affected Person reasonably
determines that the existence of or compliance with: (a) any law or regulation
or any change therein or in the interpretation or application thereof, in each
case adopted, issued or occurring after the date hereof, or (b) any request,
guideline or directive from any central bank or other Governmental Authority
(whether or not having the force of law) issued or occurring after the date of
this Agreement:

          (i) does or shall subject such Affected Person to any tax of any kind
     whatsoever with respect to this Agreement, any increase in the Purchased
     Interest or in the amount of Capital relating thereto, or does or shall
     change the basis of taxation of payments to such Affected Person on account
     of Collections, Discount or any other amounts payable hereunder (excluding
     taxes imposed on the overall pre-tax net income of such Affected Person,
     and franchise taxes imposed on such Affected Person, by the jurisdiction
     under the laws of which such Affected Person is organized or a political
     subdivision thereof),

          (ii) does or shall impose, modify or hold applicable any reserve,
     special deposit, compulsory loan or similar requirement against assets held
     by, or deposits or other
                                       9

     liabilities in or for the account of, purchases, advances or loans by,
     or other credit extended by, or any other acquisition of funds by, any
     office of such Affected Person that are not otherwise included in the
     determination of the Eurodollar Rate or the Base Rate hereunder, or

          (iii) does or shall impose on such Affected Person any other
     condition, and the result of any of the foregoing is: (A) to increase
     the cost to such Affected Person of acting as Administrator, or of
     agreeing to purchase or purchasing or maintaining the ownership of
     undivided percentage ownership interests with regard to the Purchased
     Interest (or interests therein) or any Portion of Capital, or (B) to
     reduce any amount receivable hereunder (whether directly or indirectly),
     then, in any such case, upon demand by such Affected Person, the Seller
     shall promptly pay to such Affected Person additional amounts necessary
     to compensate such Affected Person for such additional cost or reduced
     amount receivable. All such amounts shall be payable as incurred; provided,
     however, that to the extent any such increase in costs or reduced amount
     receivable results both from its obligations hereunder and from
     developments in its business or financial position not related to this
     Agreement, such Affected Person shall, in determining the amount necessary
     to compensate it under this Section, attempt in good faith to take account
     of the relative contributions of such obligations hereunder and such other
     developments or change in its financial position to such reduction. A
     certificate of such Affected Person setting forth in reasonable detail the
     basis for determining such amounts necessary to compensate such Affected
     Person shall be forwarded to the Seller though the Administrator and shall
     be conclusively presumed to be correct save for manifest error.

     Section 1.9. Mitigation. If any Affected Party demands compensation under
Section 1.7 or Section 1.8, then such Affected Party will use reasonable efforts
to designate a different office from which to participate in the Purchase
Facility if such designation would avoid the need for, or reduce the amount of,
such compensation and would not, in the sole judgment of such Affected Party, be
otherwise disadvantageous to such Affected Party. A certificate of such Affected
Party setting forth the additional amount or amounts required to compensate such
Affected Party in respect of any increased costs, the changes as a result of
which such amounts are due and the manner of computing such amounts shall be
deemed conclusive; provided that the determinations set forth in such
certificate are made reasonably and in good faith. If any Affected party demands
compensation from the Seller under Section 1.7 or Section 1.8 more than one
hundred eighty (180) days after such Affected Party had knowledge of the
occurrence of the event giving rise to such compensation, the Seller shall not
be
                                       10

obligated to reimburse such Affected Party for amounts incurred as a result
of the occurrence of such event more than one hundred eighty (180) days prior to
the date on which the Affected Party made such demand (provided that if the
event giving rise to the compensation or indemnification is retroactive, then
the one hundred eighty (180) day period referred to above shall be extended to
include the period of retroactive effect).

     Section 1.10. Accounting Terms. Except as otherwise expressly provided
herein, all accounting terms used herein shall be interpreted, and all
financial statements and certificates and reports as to financial matters
required to be delivered to the Administrator, the Issuer or any other
party hereunder shall be prepared, in accordance with GAAP applied on
a consistent basis. All calculations made for the purposes of determining
compliance with this Agreement shall (except as otherwise expressly provided
herein) be made by application of GAAP applied on a basis consistent with the
most recent annual or quarterly financial statements delivered pursuant to
Section 2(f) of Exhibit IV hereof (or, prior to the delivery of the first
financial statements pursuant to Section 2(f) of Exhibit IV, consistent with the
annual audited financial statements referenced in Section 2(e) of Exhibit III
hereof); provided, however, if (a) the Seller shall object to determining such
compliance on such basis at the time of delivery of such financial statements
due to any change in GAAP or the rules promulgated with respect thereto or (b)
the Administrator shall so object in writing within 60 days after delivery of
such financial statements, then such calculations shall be made on a basis
consistent with the most recent financial statements delivered by the Seller (or
the Servicer on its behalf) to the Administrator as to which no such objection
shall have been made.

                                   ARTICLE II.
                   REPRESENTATIONS AND WARRANTIES; COVENANTS;
                               TERMINATION EVENTS

     Section 2.1. Representations and Warranties; Covenants. Each of the Seller
and the Servicer hereby makes the representations and warranties, and hereby
agrees to perform and observe the covenants, applicable to it set forth in
Exhibits III and IV, respectively.

     Section 2.2. Termination Events. If any of the Termination Events set
forth in Exhibit V shall occur, the Administrator may, by notice to the Seller,
declare the Facility Termination Date to have occurred (in which case the
Facility Termination Date shall be deemed to have occurred); provided, that
automatically upon the occurrence of any event (without any requirement for the
passage of time or the giving of notice) described in paragraph (f) of Exhibit
V, the Facility Termination Date shall occur. Upon any such

                                       11

declaration, occurrence or deemed occurrence of the Facility Termination Date,
the Issuer and the Administrator shall have, in addition to the rights and
remedies that they may have under this Agreement, all other rights and
remedies provided after default under the applicable UCC and under other
applicable law, which rights and remedies shall be cumulative.

                                  ARTICLE III.
                                 INDEMNIFICATION

     Section 3.1. Indemnities by the Seller. Without limiting any other rights
that the Administrator, the Issuer, any Program Support Provider or any of their
respective Affiliates, employees, officers, directors, agents, counsel,
successors, transferees or assigns (each, an "Indemnified Party") may have
hereunder or under applicable law, the Seller hereby agrees to indemnify each
Indemnified Party from and against any and all claims, damages, expenses, costs,
losses and liabilities (including Attorney Costs) (all of the foregoing being
collectively referred to as "Indemnified Amounts") arising out of or resulting
from this Agreement (whether directly or indirectly), the use of proceeds of
purchases or reinvestments, the ownership of the Purchased Interest, or any
interest therein, or in respect of any Receivable, Related Security or Contract,
excluding, however: (a) Indemnified Amounts to the extent resulting from gross
negligence or willful misconduct on the part of such Indemnified Party or its
officers, directors, agents or counsel, (b) recourse (except as otherwise
specifically provided in this Agreement) for uncollectible Receivables, or (c)
any overall net income taxes or franchise taxes imposed on such Indemnified
Party by the jurisdiction under the laws of which such Indemnified Party is
organized or any political subdivision thereof. Without limiting or being
limited by the foregoing, and subject to the exclusions set forth in the
preceding sentence, the Seller shall pay on demand to each Indemnified Party any
and all amounts necessary to indemnify such Indemnified Party from and against
any and all Indemnified Amounts relating to or resulting from any of the
following:

          (i) the failure of any Receivable included in the calculation of the
     Net Receivables Pool Balance as an Eligible Receivable to be an Eligible
     Receivable, the failure of any information contained in a Monthly Report to
     be true and correct, or the failure of any other information provided to
     the Issuer or the Administrator by a Responsible Officer with respect to
     Receivables or this Agreement to be true and correct,

          (ii) the failure of any representation, warranty or statement made or
     deemed made by the Seller (or any of its

                                       12

     officers) under or in connection with this Agreement to have been true
     and correct as of the date made or deemed made in all respects when made,

          (iii) the failure by the Seller to comply with any applicable law,
     rule or regulation with respect to any Pool Receivable or the related
     Contract, or the failure of any Pool Receivable or the related Contract to
     conform to any such applicable law, rule or regulation,

          (iv) the failure to vest in the Issuer a valid and enforceable: (A)
     perfected undivided percentage ownership interest, to the extent of the
     Purchased Interest, in the Receivables in, or purporting to be in, the
     Receivables Pool and the other Pool Assets, or (B) first priority perfected
     security interest in the Pool Assets, in each case, free and clear of any
     Adverse Claim,

          (v) the failure to have filed, or any delay in filing, financing
     statements or other similar instruments or documents under the UCC of any
     applicable jurisdiction or other applicable laws with respect to any
     Receivables in, or purporting to be in, the Receivables Pool and the other
     Pool Assets, whether at the time of any purchase or reinvestment or at any
     subsequent time,

          (vi) any dispute, claim, offset or defense (other than discharge in
     bankruptcy of the Obligor) of the Obligor to the payment of any Receivable
     in, or purporting to be in, the Receivables Pool (including a defense based
     on such Receivable or the related Contract not being a legal, valid and
     binding obligation of such Obligor enforceable against it in accordance
     with its terms), or any other claim resulting from the sale of the goods or
     services related to such Receivable or the furnishing or failure to furnish
     such goods or services or relating to collection activities with respect to
     such Receivable (if such collection activities were performed by the Seller
     or any of its Affiliates acting as Servicer or by any agent or independent
     contractor retained by the Seller or any of its Affiliates),

          (vii) any failure of the Seller (or any of its Affiliates acting as
     the Servicer) to perform its duties or obligations in accordance with the
     provisions hereof or under the Contracts,

          (viii) the commingling of Collections at any time with other funds,

                                       13

          (ix) the use of proceeds of purchases or reinvestments,
or

          (x) any reduction in Capital as a result of the distribution of
     Collections pursuant to Section 1.4(d), if all or a portion of such
     distributions shall thereafter be rescinded or otherwise must be returned
     for any reason.

     Section 3.2. Indemnities by the Servicer. Without limiting any other
rights that the Administrator, the Issuer or any other Indemnified Party may
have hereunder or under applicable law, the Servicer hereby agrees to indemnify
each Indemnified Party from and against any and all Indemnified Amounts arising
out of or resulting from (whether directly or indirectly): (a) the failure of
any information contained in a Monthly Report to be true and correct, or the
failure of any other information provided to the Issuer or the Administrator
by a Responsible Officer of the Servicer to be true and correct, (b) the
failure of any representation, warranty or statement made or deemed made by
a Responsible Officer of the Servicer under or in connection with this
Agreement to have been true and correct in all respects as of the date
made or deemed made, (c) the failure by the Servicer to comply with any
applicable law, rule or regulation with respect to any Pool Receivable or the
related Contract, (d) any dispute, claim, offset or defense of the Obligor to
the payment of any Receivable in, or purporting to be in, the Receivables Pool
resulting from or related to the collection activities with respect to such
Receivable, or (e) any failure of the Servicer to perform its duties or
obligations in accordance with the provisions hereof.

                                   ARTICLE IV.
                         ADMINISTRATION AND COLLECTIONS

     Section 4.1. Appointment of the Servicer. (a) The servicing, administering
and collection of the Pool Receivables shall be conducted by the Person so
designated from time to time as the Servicer in accordance with this Section.
Until the Administrator gives notice to BAX (in accordance with this Section) of
the designation of a new Servicer, BAX is hereby designated as, and hereby
agrees to perform the duties and obligations of, the Servicer pursuant to the
terms hereof. Upon the occurrence of a Termination Event, the Administrator may
designate as Servicer any Person (including itself) to succeed BAX or any
successor Servicer, on the condition in each case that any such Person so
designated shall agree to perform the duties and obligations of the Servicer
pursuant to the terms hereof.

                                       14

     (b) Upon the designation of a successor Servicer as set forth in clause
(a), BAX agrees that it will terminate its activities as Servicer hereunder in a
manner that the Administrator determines will facilitate the transition of the
performance of such activities to the new Servicer, and BAX shall cooperate with
and assist such new Servicer. Such cooperation shall include access to or
transfer of related records and use by the new Servicer of all licenses or
software necessary or desirable (to the extent that BAX may legally transfer or
allow the new Servicer to have access to such software without violating the
terms of any agreement between BAX and the provider of such licenses or software
which relate to the transfer or assignment thereof; it being understood that if
such transfer is not permissible, the Servicer shall use its reasonable
best efforts to assist the new Servicer in obtaining any such necessary or
desirable license or software) to collect the Pool Receivables and the
Related Security.

     (c) BAX acknowledges that, in making their decision to execute and deliver
this Agreement, the Administrator and the Issuer have relied on BAX's agreement
to act as Servicer hereunder. Accordingly, BAX agrees that it will not
voluntarily resign as Servicer.

     (d) The Servicer may delegate its duties and obligations hereunder with
respect to all or any portion of the Pool Receivables to any subservicer (each a
"Sub-Servicer"); provided, that, in each such delegation: (i) such Sub-Servicer
shall agree in writing to perform the duties and obligations of the Servicer
pursuant to the terms hereof, (ii) the Servicer shall remain primarily liable
for the performance of the duties and obligations so delegated, (iii) the
Seller, the Administrator and the Issuer shall have the right to look solely to
the Servicer for performance, and (iv) the terms of any agreement with any
Sub-Servicer shall provide that the Administrator may terminate such agreement
upon the termination of the Servicer hereunder by giving notice of its desire to
terminate such agreement to the Servicer (and the Servicer shall provide
appropriate notice to each such Sub-Servicer); provided, however, that if any
such delegation is to any Person other than an Originator, the Administrator
shall have consented in writing in advance to such delegation.

     Section 4.2. Duties of the Servicer. (a) The Servicer shall take or cause
to be taken all such action as may be necessary or advisable to administer and
collect each Pool Receivable from time to time, all in accordance with this
Agreement and all applicable laws, rules and regulations, with reasonable care
and diligence, and in accordance with the Credit and Collection Policies. The
Servicer shall set aside, for the accounts of the Seller and the Issuer, the
amount of the Collections to which each is entitled in accordance with Article
I. The Servicer may, in accordance with the
                                       15

applicable Credit and Collection Policy, extend the maturity of any Pool
Receivable (but not beyond 30 days) and extend the maturity or adjust
the Outstanding Balance of any Defaulted Receivable as the Servicer
may determine to be appropriate to maximize Collections thereof;
provided, however, that: (i) such extension or adjustment shall not
alter the status of such Pool Receivable as a Delinquent Receivable or
a Defaulted Receivable or limit the rights of the Issuer or the Administrator
under this Agreement and (ii) if a Termination Event has occurred and is
continuing and BAX or an Affiliate thereof is serving as the Servicer, BAX or
such Affiliate may make such extension or adjustment only upon the prior written
approval of the Administrator. The Seller shall deliver to the Servicer and the
Servicer shall hold for the benefit of the Seller and the Administrator
(individually and for the benefit of the Issuer), in accordance with their
respective interests, all records and documents (including computer tapes
or disks) with respect to each Pool Receivable. Notwithstanding anything to
the contrary contained herein, the Administrator may direct the Servicer
(whether the Servicer is BAX or any other Person) to commence or settle
any legal action to enforce collection of any Pool Receivable or to foreclose
upon or repossess any Related Security.

     (b) The Servicer shall, as soon as practicable following actual receipt of
collected funds, turn over to the Seller the collections of any indebtedness
that is not a Pool Receivable, less, if BAX or an Affiliate thereof is not the
Servicer, all reasonable and appropriate out-of-pocket costs and expenses of
such Servicer of servicing, collecting and administering such collections. The
Servicer, if other than BAX or an Affiliate thereof, shall, as soon as
practicable upon demand, deliver to the Seller all records in its possession
that evidence or relate to any indebtedness that is not a Pool Receivable, and
copies of records in its possession that evidence or relate to any indebtedness
that is a Pool Receivable.

     (c) The Servicer's obligations hereunder shall terminate on the later of:
(i) the Facility Termination Date and (ii) the date on which all amounts
required to be paid to the Issuer, the Administrator and any other Indemnified
Party or Affected Person hereunder shall have been paid in full.

     After such termination, if BAX or an Affiliate thereof was not the Servicer
on the date of such termination, the Servicer shall promptly deliver to the
Seller all books, records and related materials that the Seller previously
provided to the Servicer, or that have been obtained by the Servicer, in
connection with this Agreement.

     Section 4.3. Establishment and Use of Certain Accounts. (a) Within 45 days
of the initial purchase hereunder, the Seller shall

                                       16

enter into Lock-Box Agreements establishing the Lock-Box Accounts listed on
Schedule II with all of the Lock-Box Banks, and deliver original counterparts
thereof to the Administrator.

     (b) The Servicer agrees to establish the Collection Account within 45 days
of the first purchase hereunder. The Collection Account shall be used to accept
the transfer of Collections of Pool Receivables from the Lock-Box Accounts
pursuant to Section 1.4(b) and for such other purposes described in the
Transaction Documents.

     (c) Any amounts in the Collection Account may be invested by the Collection
Account Bank at Servicer's direction, in Permitted Investments, so long as
Issuer's interest in such Permitted Investments is perfected and such Permitted
Investments are subject to no Adverse Claims other than those of the Issuer
provided hereunder.

     (d) Upon the occurrence of a Termination Event, the Administrator may at
any time thereafter give notice to each Lock-Box Bank and/or the Collection
Account Bank that the Administrator is exercising its rights under the Lock-Box
Agreements and/or the Collection Account Agreement, as applicable, to do any or
all of the following: (i) to have the exclusive ownership and control of the
Lock-Box Accounts and the Collection Account transferred to the Administrator
and to exercise exclusive dominion and control over the funds deposited therein,
(ii) to have the proceeds that are sent to the respective Lock-Box Accounts
and/or the Collection Account redirected pursuant to the Administrator's
instructions rather than deposited in the applicable account, and (iii) to take
any or all other actions permitted under the applicable Lock-Box Agreement
and/or the Collection Account Agreement. The Seller hereby agrees that if the
Administrator at any time takes any action set forth in the preceding sentence,
the Administrator shall have exclusive control of the proceeds (including
Collections) of all Pool Receivables and the Seller hereby further agrees to
take any other action that the Administrator may reasonably request to transfer
such control. Any proceeds of Pool Receivables received by the Seller or the
Servicer thereafter shall be sent immediately to the Administrator (or as
otherwise directed by the Administrator). The parties hereto hereby acknowledge
that if at any time the Administrator takes control of any Lock-Box Account
and/or the Collection Account, the Administrator shall not have any rights to
the funds therein in excess of the unpaid amounts due to the Administrator or
the Issuer (including its successors and assigns), and the Administrator shall
distribute or cause to be distributed such funds in accordance with Section
4.2(b) and Article I (in each case as if such funds were held by the Servicer
thereunder).

     Section 4.4. Enforcement Rights. (a) At any time following the occurrence
of a Termination Event:

                                       17

          (i) the Administrator may direct the Obligors that payment of all
     amounts payable under any Pool Receivable is to be made directly to the
     Administrator or its designee,

          (ii) the Administrator may give notice of the Issuer's interest in
     Pool Receivables to each Obligor, which notice shall direct that payments
     be made directly to the Administrator or its designee, and

          (iii) the Administrator may request the Servicer to, and upon such
     request the Servicer shall: (A) assemble all of the records necessary or
     desirable to collect the Pool Receivables and the Related Security, and
     transfer or license to a successor Servicer the use of all software
     necessary or desirable (to the extent that BAX may legally transfer or
     allow the new Servicer to have access to such software without violating
     the terms of any agreement between BAX and the provider of such licenses
     or software which relate to the transfer or assignment thereof; it being
     understood that if such transfer is not permissible, the Servicer shall
     use its reasonable best efforts to assist the new Servicer in obtaining
     any such necessary or desirable license or software) to collect the Pool
     Receivables and the Related Security pursuant to Section 4.1(b), and make
     the same available to the Administrator or its designee at a place selected
     by the Administrator, and (B) segregate all cash, checks and other
     instruments received by it from time to time constituting Collections
     in a manner acceptable to the Administrator and, promptly upon receipt,
     remit all such cash, checks and instruments, duly endorsed or with duly
     executed instruments of transfer, to the Administrator or its designee.

     (b) The Seller hereby authorizes the Administrator, and irrevocably
appoints the Administrator as its attorney-in-fact with full power of
substitution and with full authority in the place and stead of the Seller,
which appointment is coupled with an interest, to take any and all steps in the
name of the Seller and on behalf of the Seller necessary or desirable, in the
determination of the Administrator, to collect any and all amounts or portions
thereof due under any and all Pool Assets, including endorsing the name of the
Seller on checks and other instruments representing Collections and enforcing
such Pool Assets. Notwithstanding anything to the contrary contained in this
subsection, none of the powers conferred upon such attorney-in-fact pursuant to
the preceding sentence shall subject such attorney-in-fact to any liability if
any action taken by it shall prove to be inadequate or invalid except for its
own gross negligence or wilful misconduct, nor shall they confer any
obligations upon such attorney-in-fact in any manner whatsoever.

                                       18

     Section 4.5. Responsibilities of the Seller. (a) Anything herein to the
contrary notwithstanding, the Seller shall pay when due any taxes, including any
sales taxes payable in connection with the Pool Receivables and their creation
and satisfaction. The Administrator and the Issuer shall not have any obligation
or liability with respect to any Pool Asset, nor shall either of them be
obligated to perform any of the obligations of the Seller, BAX or an Originator
thereunder.

     (b) BAX hereby irrevocably agrees that if at any time it shall cease to be
the Servicer hereunder, it shall act (if the then-current Servicer so requests
and for a reasonable fee for such services as agreed to between BAX and such new
Servicer, payable by such new Servicer solely out of the Servicing Fee) as the
data-processing agent of the Servicer and, in such capacity, BAX shall conduct
the data-processing functions of the administration of the Receivables and the
Collections thereon in substantially the same way that BAX conducted such
data-processing functions while it acted as the Servicer.

     Section 4.6. Servicing Fee. (a) Subject to clause (b), the Servicer shall
be paid a fee equal to 0.50% per annum (the "Servicing Fee Rate") of the daily
average aggregate Outstanding Balance of the Pool Receivables. The Issuer's
Share of such fee shall be paid through the distributions contemplated by
Section 1.4(d), and the Seller's Share of such fee shall be paid by the Seller.

     (b) If the Servicer ceases to be BAX or an Affiliate thereof, the servicing
fee shall be the greater of: (i) the amount calculated pursuant to clause (a),
and (ii) an alternative amount specified by the successor Servicer not to exceed
110% of the aggregate reasonable costs and expenses incurred by such successor
Servicer in connection with the performance of its obligations as Servicer.

                                       19

                                   ARTICLE V.
                                  MISCELLANEOUS

     Section 5.1. Amendments, Etc. No amendment or waiver of any provision of
this Agreement or any other Transaction Document, or consent to any departure by
the Seller or the Servicer therefrom, shall be effective unless in a writing
signed by the Administrator, and, in the case of any amendment, by the other
parties thereto; and then such amendment, waiver or consent shall be effective
only in the specific instance and for the specific purpose for which given;
provided, however, that no such material amendment shall be effective until both
Moody's and Standard & Poor's have notified the Servicer and the Administrator
in writing that such action will not result in a reduction or withdrawal of the
rating of any Notes. No failure on the part of the Issuer or the Administrator
to exercise, and no delay in exercising any right hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any right hereunder
preclude any other or further exercise thereof or the exercise of any other
right. The Administrator shall provide each Rating Agency with a copy of each
amendment to or waiver or consent under this Agreement promptly following the
effective date thereof.

     Section 5.2. Notices, Etc. All notices and other communications hereunder
shall, unless otherwise stated herein, be in writing (which shall include
facsimile communication) and be sent or delivered to each party hereto at its
address set forth under its name on the signature pages hereof or at such other
address as shall be designated by such party in a written notice to the
other parties hereto. Notices and communications by facsimile shall be
effective when sent (and shall be followed by hard copy sent by first class
mail), and notices and communications sent by other means shall be effective
when received.

     Section 5.3. Assignability. (a) This Agreement and the Issuer's rights and
obligations herein (including ownership of the Purchased Interest or an interest
therein) shall be assignable, in whole or in part, by the Issuer and its
successors and assigns with the prior written consent of the Seller; provided,
however, that such consent shall not be unreasonably withheld; and provided
further, that no such consent shall be required if the assignment is made to
BNS, any Affiliate of BNS, any Purchaser or other Program Support Provider or
any Person that is: (i) in the business of issuing Notes and (ii) associated
with or administered by BNS or any Affiliate of BNS. The Administrator shall
provide written notice to each Rating Agency of any such assignment by the
Issuer pursuant to this Section 5.3(a).

                                       20

     (b) The Issuer may at any time grant to one or more banks or other
institutions (each a "Purchaser") party to the Liquidity Agreement, or to any
other Program Support Provider, participating interests in the Purchased
Interest. In the event of any such grant by the Issuer of a participating
interest to a Purchaser or other Program Support Provider, the Issuer shall
remain responsible for the performance of its obligations hereunder. The Seller
agrees that each Purchaser or other Program Support Provider shall be entitled
to the benefits of Sections 1.7 and 1.8. The Seller shall have the right to
consent in advance to each Person that becomes a party to the Liquidity
Agreement as a Purchaser following the date hereof.

     (c) This Agreement and the rights and obligations of the Administrator
hereunder shall be assignable, in whole or in part, by the Administrator and its
successors and assigns; provided, that unless: (i) such assignment is to an
Affiliate of BNS, (ii) it becomes unlawful for BNS to serve as the Administrator
or (iii) a Termination Event exists, the Seller has consented in writing, in
advance of any such assignment to such assignment, which consent shall not be
unreasonably withheld. The Administrator shall provide written notice to each
Rating Agency of any such assignment by it pursuant to this Section 5.3(c).

     (d) Except as provided in Section 4.1(d), neither the Seller nor the
Servicer may assign its rights or delegate its obligations hereunder or any
interest herein without the prior written consent of the Administrator.

     (e) Without limiting any other rights that may be available under
applicable law, the rights of the Issuer may be enforced through it or by
its agents.

     Section 5.4. Costs, Expenses and Taxes. (a) In addition to the rights of
indemnification granted under Section 3.1, the Seller agrees to pay on demand
all reasonable costs and expenses in connection with the preparation, execution,
delivery and administration (including periodic internal audits by the
Administrator of Pool Receivables) of this Agreement, the other Transaction
Documents and the other documents and agreements to be delivered hereunder (and
all reasonable costs and expenses in connection with any amendment, waiver or
modification of any thereof, to the extent such amendment, waiver or
modification was requested or required by the Seller, the Servicer, any
Originator or any Rating Agency), including: (i) Attorney Costs for the
Administrator, the Issuer and their respective Affiliates and agents with
respect thereto and with respect to advising the Administrator, the Issuer and
their respective Affiliates and agents as to their rights and remedies under
this Agreement and the other Transaction Documents, and (ii) all reasonable
costs and
                                       21

expenses (including Attorney Costs), if any, of the Administrator, the
Issuer and their respective Affiliates and agents in connection with the
enforcement of this Agreement and the other Transaction Documents.

     (b) In addition, the Seller shall pay on demand any and all stamp and other
taxes and fees payable in connection with the execution, delivery, filing and
recording of this Agreement or the other documents or agreements to be delivered
hereunder, and agrees to save each Indemnified Party harmless from and against
any liabilities with respect to or resulting from any delay in paying or
omission to pay such taxes and fees.

     Section 5.5. No Proceedings; Limitation on Payments. Each of the Seller,
the Servicer, the Administrator, each assignee of the Purchased Interest or any
interest therein, hereby covenants and agrees that it will not institute
against, or join any other Person in instituting against, the Issuer any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceeding,
or other proceeding under any federal or state bankruptcy or similar law, for
one year and one day after the latest maturing Note issued by the Issuer is paid
in full. The provision of this Section 5.5 shall survive any termination of this
Agreement.

     Section 5.6. GOVERNING LAW AND JURISDICTION. (a) THIS AGREEMENT SHALL BE
DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE
STATE OF NEW YORK (INCLUDING FOR SUCH PURPOSE SECTIONS 5-1401 AND 5-1402 OF THE
GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK) EXCEPT TO THE EXTENT THAT THE
PERFECTION OF A SECURITY INTEREST OR REMEDIES HEREUNDER, IN RESPECT OF ANY
PARTICULAR COLLATERAL ARE GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE
STATE OF NEW YORK.

     (b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT MAY BE
BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES FOR THE
SOUTHERN DISTRICT OF NEW YORK; AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT,
EACH OF THE PARTIES HERETO CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY,
TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. EACH OF THE PARTIES HERETO
IRREVOCABLY WAIVES, TO THE MAXIMUM EXTENT PERMITTED BY LAW, ANY OBJECTION,
INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM
NON CONVENIENS, THAT IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION
OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS AGREEMENT OR ANY DOCUMENT
RELATED HERETO. EACH OF THE PARTIES HERETO WAIVES PERSONAL SERVICE OF ANY
SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH SERVICE MAY BE MADE BY ANY OTHER
MEANS PERMITTED BY NEW YORK LAW.

     Section 5.7. Execution in Counterparts. This Agreement may be executed in
any number of counterparts, each of which, when so
                                       22

executed, shall be deemed to be an original, and all of which, when taken
together, shall constitute one and the same agreement.

     Section 5.8. Survival of Termination. The provisions of Sections 1.7, 1.8,
3.1, 3.2, 5.4, 5.5, 5.6, 5.9, 5.12 and 5.13 shall survive any termination of
this Agreement.

     Section 5.9. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO WAIVES THEIR
RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON
OR ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY IN ANY ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY
OF THE PARTIES AGAINST ANY OTHER PARTY OR PARTIES, WHETHER WITH RESPECT TO
CONTRACT CLAIMS, TORT CLAIMS OR OTHERWISE. EACH OF THE PARTIES HERETO AGREES
THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A
JURY. WITHOUT LIMITING THE FOREGOING, EACH OF THE PARTIES HERETO FURTHER AGREES
THAT ITS RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED BY OPERATION OF THIS
SECTION AS TO ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING THAT SEEKS, IN WHOLE
OR IN PART, TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT OR ANY
PROVISION HEREOF. THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT.

     Section 5.10. Entire Agreement. This Agreement and the other Transaction
Documents embody the entire agreement and understanding between the parties
hereto, and supersede all prior or contemporaneous agreements and understandings
of such Persons, verbal or written, relating to the subject matter hereof and
thereof.

     Section 5.11. Headings. The captions and headings of this Agreement and any
Exhibit, Schedule or Annex hereto are for convenience of reference only and
shall not affect the interpretation hereof or thereof.

     Section 5.12. Liabilities. The obligations of the Issuer under the
Transaction Documents are solely the corporate obligations of the Issuer and the
Seller, as the case may be. Except in their respective separate capacities as
parties to any of the Transaction Documents, no recourse shall be had for any
obligation or claim arising out of or based upon any Transaction Document
against any stockholder, employee, officer, director or incorporator of the
Issuer or the Seller, as the case may be; provided, however, that this Section
shall not relieve any such Person of any liability it might otherwise have for
its own gross negligence or willful misconduct.

     Section 5.13. Confidentiality. Unless otherwise required by applicable law,
each of the Seller and the Servicer agrees to

                                       23

maintain the confidentiality of this Agreement and the other Transaction
Documents (and all drafts thereof) in communications with third parties
and otherwise; provided, that this Agreement may be disclosed to:
(a) third parties to the extent such disclosure is made pursuant to
a written agreement of confidentiality in form and substance reasonably
satisfactory to the Administrator, and (b) the Seller's legal counsel
and auditors if they agree to hold it confidential. Unless otherwise required by
applicable law, each of the Administrator and the Issuer agrees to maintain the
confidentiality of non-public information regarding The Pittston Company and its
Subsidiaries; provided, that such information may be disclosed to: (i) third
parties to the extent such disclosure is made pursuant to a written agreement of
confidentiality in form and substance reasonably satisfactory to The Pittston
Company and only for use in connection with this transaction and the commercial
paper program of the Issuer, (ii) legal counsel and auditors of the Issuer or
the Administrator if they agree to hold it confidential and only for use in
connection with this transaction and the commercial paper program of the Issuer,
(iii) the rating agencies rating the Notes to the extent such information
relates to the Receivables Pool or the transactions contemplated by this
Agreement, or if not so related, upon obtaining the prior consent of The
Pittston Company (such consent not to be unreasonably withheld), (iv) any
Program Support Provider or potential Program Support Provider (if they agree,
in a manner and form reasonably acceptable to The Pittston Company, to hold it
confidential and to use such information only in connection with its
participation in this transaction and the Issuer's commercial paper program) to
the extent such information relates to the Receivables Pool or the transactions
contemplated by this Agreement, or if not so related, upon obtaining the prior
consent of The Pittston Company (such consent not to be unreasonably withheld),
(v) any placement agent placing the Notes (if they agree, in a manner and form
reasonably acceptable to The Pittston Company, to hold it confidential and to
use such information only in connection with its participation in this
transaction and the Issuer's commercial paper program) and (vi) any regulatory
authorities having jurisdiction over BNS, the Issuer, any Program Support
Provider or any Purchaser. The Pittston Company is an intended third-party
beneficiary of this Section 5.13.

                           [SIGNATURE PAGE TO FOLLOW]

                                       24

     IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their respective officers thereunto duly authorized, as of the date first
above written.

                         BAX FUNDING CORPORATION

                         By:  /s/ James B. Hartough
                             --------------------------------
                             Name: James Hartough
                             Title: President

                             Address:

                             BAX Funding Corporation
                             16808 Armstrong Avenue
                             Irvine, California 92713
                             Attention: Daniel Crowley
                             Telephone: 949-752-4000
                             Facsimile: 949-260-2305

                         with a copy to:

                             BAX Funding Corporation
                             c/o The Pittston Company
                             1801 Bayberry Court
                             Richmond, Virginia 23226-8100
                             Attention: James Hartough, President
                             Telephone: 804-289-9622
                             Facsimile: 804-289-9760

                         BAX GLOBAL INC.

                         By:  /s/ James B. Hartough
                             --------------------------------
                             Name:  James Hartough
                             Title: Treasurer

                             Address:
                             BAX Global Inc.
                             16808 Armstrong Avenue
                             Irvine, California 92713
                             Attention: Daniel Crowley, Executive Vice
                                        President and Chief Financial Officer
                             Telephone: 949-752-4000
                             Facsimile: 949-260-2305

                         with a copy to:

                         BAX Global Inc.
                         c/o The Pittston Company

                                                 Receivables Purchase Agreement

                                      S-1

                          LIBERTY STREET FUNDING CORP.

                          By:    /s/ Bernard J. Angelo
                              ----------------------------------------
                              Name:  Bernard J. Angelo
                                   -----------------------------------
                              Title: Vice President
                                   -----------------------------------
                              Address:

                              Liberty Street Funding Corp.
                              c/o Global Securitization
                                       Services, LLC
                              114 West 47th Street, Suite 1715
                              New York, New York 10036
                              Attention: Andrew L. Stidd
                              Telephone No.: (212) 302-5151
                              Facsimile No.: (212) 302-8767

                              With a copy to:

                              The Bank of Nova Scotia
                              One Liberty Plaza
                              New York, New York 10006
                              Attention: Michael Parker
                              Telephone No.: (212) 225-5061
                              Facsimile No.: (212) 225-5090

                          THE BANK OF NOVA SCOTIA,
                            as Administrator

                          By:    /s/ J. Alan Edwards
                              ----------------------------------------
                              Name:  J. Alan Edwards
                                   -------------------------------------
                              Title: Managing Director
                                   -------------------------------------
                              Address:

                              The Bank of Nova Scotia
                              One Liberty Plaza
                              New York, New York 10006
                              Attention: Michael Parker
                              Telephone No.: (212) 225-5061
                              Facsimile No.: (212) 225-5090

                                                 Receivables Purchase Agreement

                                      S-2

                                    EXHIBIT I
                                   DEFINITIONS

     As used in the Agreement (including its Exhibits, Schedules and Annexes),
the following terms shall have the following meanings (such meanings to be
equally applicable to both the singular and plural forms of the terms defined).
Unless otherwise indicated, all Section, Annex, Exhibit and Schedule references
in this Exhibit are to Sections of and Annexes, Exhibits and Schedules to the
Agreement.

     "Administration Account" means the account, account number 2158-13 of the
Administrator maintained at the office of The Bank of Nova Scotia, or such other
account as may be so designated in writing by the Administrator to the Servicer.

     "Administrator" has the meaning set forth in the preamble to the Agreement.

     "Adverse Claim" means a lien, security interest or other charge or
encumbrance, or any other type of preferential arrangement; it being understood
that any thereof in favor of the Issuer or the Administrator (for the benefit of
the Issuer) shall not constitute an Adverse Claim.

     "Affected Person" has the meaning set forth in Section 1.7 of the
Agreement.

     "Affiliate" means, as to any Person: (a) any Person that, directly or
indirectly, is in control of, is controlled by or is under common control with
such Person, or (b) who is a director or officer: (i) of such Person or (ii) of
any Person described in clause (a), except that, with respect to the Issuer,
Affiliate shall mean the holder(s) of its capital stock. For purposes of this
definition, control of a Person shall mean the power, direct or indirect to
direct or cause the direction of the management and policies of such Person, in
either case whether by ownership of securities, contract, proxy or otherwise.

     "Agreement" has the meaning set forth in the preamble.

     "Alternate Rate" for any Yield Period for any Portion of Capital of the
Purchased Interest (to the extent such Portion of Capital is not being funded at
such time by the issuance of Notes) means an interest rate per annum equal to
1.125% per annum above the Eurodollar Rate for such Yield Period; provided,
however, that in the case of:

          (i) any Yield Period on or before the first day of which the
     Administrator shall have been notified by the Issuer, a

                                                 Receivables Purchase Agreement

                                      I-1

     Purchaser or any other Program Support Provider that the introduction
     of or any change in or in the interpretation of any law or regulation
     makes it unlawful, or any central bank or other Governmental Authority
     asserts that it is unlawful, for the Issuer, such Purchaser or other
     Program Support Provider, as applicable, to fund any Portion of
     Capital based on the Eurodollar Rate (and the Issuer, such Purchaser or
     other Program Support Provider shall not have subsequently notified the
     Administrator that such circumstances no longer exist),

          (ii) any Yield Period of one to (and including) 29 days,

          (iii) any Yield Period as to which the Administrator does not receive
     notice of a request for funding pursuant to Section 1.2(a) of the Agreement
     before 2:00 p.m. (New York City time) on the third Business Day preceding
     the first day of the proposed Yield Period, or

          (iv) any Yield Period relating to a Portion of Capital that is less
     than $1,000,000,

the "Alternate Rate" for each such Yield Period shall be an interest rate per
annum equal to the Base Rate in effect on each day of such Yield Period. The
"Alternate Rate" for any day while a Termination Event exists shall be an
interest rate equal to 2.0% per annum above the Base Rate in effect on such day.

     "Attorney Costs" means and includes all reasonable fees and disbursements
of any law firm or other external counsel.

     "Bankruptcy Code" means the United States Bankruptcy Reform Act of 1978 (11
U.S.C.'SS'101, et seq.), as amended from time to time.

     "Base Rate" means, for any day, a fluctuating interest rate per annum as
shall be in effect from time to time, which rate shall be at all times equal to
the higher of:

          (a) the rate of interest in effect for such day as publicly announced
     from time to time by BNS in New York, New York as its "reference rate".
     Such "reference rate" is set by BNS based upon various factors, including
     BNS's costs and desired return, general economic conditions and other
     factors, and is used as a reference point for pricing some loans, which may
     be priced at, above or below such announced rate or

          (b) 0.50% per annum above the latest Federal Funds Rate.

     "Benefit Plan" means any employee benefit pension plan as defined in
Section 3(2) of ERISA in respect of which the Seller,

                                                 Receivables Purchase Agreement

                                      I-2

any Originator, BAX or any ERISA Affiliate is, or at any time during the
immediately preceding six years was, an "employer" as defined in Section 3(5)
of ERISA.

     "BNS" has the meaning set forth in the preamble to the Agreement

     "Business Day" means any day (other than a Saturday or Sunday) on which:
(a) banks are not authorized or required to close in New York City, New York and
(b) if this definition of "Business Day" is utilized in connection with the
Eurodollar Rate, dealings are carried out in the London interbank market.

     "Capital" means the amount paid to the Seller in respect of the Purchased
Interest by the Issuer pursuant to the Agreement, as reduced from time to time
by Collections distributed and applied on account of such Capital pursuant to
Section 1.4(d) of the Agreement; provided, that if such Capital shall have been
reduced by any distribution, and thereafter all or a portion of such
distribution is rescinded or must otherwise be returned for any reason, such
Capital shall be increased by the amount of such rescinded or returned
distribution as though it had not been made.

     "Change in Control" means (a) that BAX ceases to own, directly or
indirectly, 100% of the capital stock of the Seller free and clear of all
Adverse Claims or (b) that The Pittston Company ceases to own, directly or
indirectly, a majority of the capital stock of BAX or any Originator.

     "Closing Date" means December 15, 2000.

     "Collection Account" means that certain bank account numbered 323181317
maintained at The Chase Manhattan Bank in New York, New York which is (i)
identified as the "Liberty Street/BAX Funding Corporation Collection Account",
(ii) in the Seller's name, (iii) pledged, on a first-priority basis, to the
Issuer pursuant to Section 1.2(d), and (iv) is governed by the Collection
Account Agreement.

     "Collection Account Agreement" means that certain letter agreement dated as
of the date hereof among the Seller, the Servicer, the Administrator and the
Collection Account Bank, as the same may be amended, supplemented, amended and
restated, or otherwise modified from time to time in accordance with the
Agreement.

     "Collection Account Bank" means each bank maintaining a Collection Account.

     "Collections" means, with respect to any Pool Receivable: (a) all funds
that are received by any Originator, BAX, the Seller or

                                                 Receivables Purchase Agreement

                                      I-3

the Servicer in payment of any amounts owed in respect of such Receivable
(including purchase price, finance charges, interest and all other charges),
or applied to amounts owed in respect of such Receivable (including insurance
payments and net proceeds of the sale or other disposition of repossessed
goods or other collateral or property of the related Obligor or any other
Person directly or indirectly liable for the payment of such Pool Receivable
and available to be applied thereon), (b) all Deemed Collections and
(c) all other proceeds of such Pool Receivable.

     "Company Note" has the meaning set forth in Section 3.1 of the Sale
Agreement.

     "Concentration Percentage" means: (a) for any Group A Obligor, 6%, (b) for
any Group B Obligor, 4%, (c) for any Group C Obligor, 3% and (d) for any Group D
Obligor, 2%; provided, however, that the Issuer may, with prior written consent
from the Administrator, and if the Rating Agency Condition is satisfied, approve
higher Concentration Percentages for selected Obligors.

     "Concentration Reserve" means, at any time the aggregate Capital at such
time multiplied by (a) the Concentration Reserve Percentage divided by (b) 1
minus the Concentration Reserve Percentage at such time.

     "Concentration Reserve Percentage" means, at any time, the largest of: (a)
the sum of four largest Group D Obligor Percentages, (b) the sum of the two
largest Group C Obligor Percentages and (c) the largest Group B Obligor
Percentage.

     "Contract" means, with respect to any Receivable, any and all contracts,
instruments, agreements, leases, invoices, notes or other writings pursuant to
which such Receivable arises or that evidence such Receivable or under which an
Obligor becomes or is obligated to make payment in respect of such Receivable.

     "CP Rate" means, for any Yield Period for any Portion of Capital, the per
annum rate equivalent to the weighted average cost (as determined by the
Administrator and which shall include commissions of placement agents and
dealers, incremental carrying costs incurred with respect to Notes maturing on
dates other than those on which corresponding funds are received by the Issuer,
other borrowings by the Issuer (other than under any Program Support Agreement)
and any other costs associated with the issuance of Notes) of or related to the
issuance of Notes that are allocated, in whole or in part, by the Issuer or the
Administrator to fund or maintain such Portion of Capital (and which may be also
allocated in part to the funding of other assets of the Issuer); provided,
however, that if any component of such rate is a discount rate, in calculating
the "CP Rate" for such Portion of Capital for such Yield Period, the Issuer
shall for such component use the rate

                                                 Receivables Purchase Agreement

                                      I-4

resulting from converting such discount rate to an interest bearing equivalent
rate per annum. Notwithstanding the foregoing, the "CP Rate" for any day while
a Termination Event exists, shall be an interest rate equal to 2% above the
Base Rate in effect on such day.

     "Credit and Collection Policy" means, as the context may require, those
receivables credit and collection policies and practices of each Originator in
effect on the date of the Agreement and described in Schedule I to the
Agreement, as modified in compliance with the Agreement.

     "Days' Sales Outstanding" means, for any calendar month, an amount computed
as of the last day of such calendar month equal to: (a) the average of the
Outstanding Balance of all Pool Receivables as of the last day of each of the
three most recent calendar months ended on the last day of such calendar month
divided by (b)(ii) the aggregate amount of new Receivables generated by each
Originator during the three calendar months ended on or before the last day of
such calendar month divided by (ii) 90.

     "Debt" of any Person means, without duplication, the sum of the following
determined and calculated in accordance with GAAP: (a) indebtedness for borrowed
money, (b) obligations evidenced by bonds, debentures, notes or other similar
instruments, (c) obligations to pay the deferred purchase price of property or
services purchased by such Person (other than trade debt incurred in the
ordinary course of business and due within six months of the incurrence thereof)
which would appear as liabilities on a balance sheet of such Person, (d) the
principal portion of all obligations as lessee under leases that shall have been
or should be, in accordance with generally accepted accounting principles,
recorded as capital leases, and (e) obligations under direct or indirect
guaranties in respect of, and obligations (contingent or otherwise) to purchase
or otherwise acquire, or otherwise to assure a creditor against loss in respect
of, indebtedness or obligations of others of the kinds referred to in clauses
(a) through (d).

     "Deemed Collections" has the meaning set forth in Section 1.4(e)(ii) of the
Agreement.

     "Default Ratio" means the ratio (expressed as a percentage and rounded to
the nearest 1/100 of 1%, with 5/1000th of 1% rounded upward) computed as of the
last day of each calendar month by dividing: (a) the sum of (i) the aggregate
Outstanding Balance of all Pool Receivables that became Defaulted Receivables
during such month, by (b) the aggregate credit sales made by the Originators
during the month that is three calendar months before such month.

     "Defaulted Receivable" means a Receivable:

                                                 Receivables Purchase Agreement

                                      I-5

          (a) as to which any payment, or part thereof, remains unpaid for more
     than 90 days from the Shipping Date for such Receivable, or

          (b) without duplication (i) as to which an Event of Bankruptcy shall
     have occurred with respect to the Obligor thereof or any other Person
     obligated thereon or owning any Related Security with respect thereto, or
     (ii) which has been, or, consistent with the Credit and Collection Policy
     would be, written off the Seller's books as uncollectible.

     "Delinquency Ratio" means the ratio (expressed as a percentage and rounded
to the nearest 1/100 of 1%, with 5/1000th of 1% rounded upward) computed as of
the last day of each calendar month by dividing: (a) the aggregate Outstanding
Balance of all Pool Receivables that were Delinquent Receivables on such day by
(b) the Net Receivables Pool Balance on such day.

     "Delinquent Receivable" means a Receivable (other than a Defaulted
Receivable) as to which any payment, or part thereof, remains unpaid for more
than 60 days from the Shipping Date for such Receivable.

     "Dilution Horizon" means, for any calendar month, the ratio (expressed as a
percentage and rounded to the nearest 1/100th of 1%, with 5/1000th of 1% rounded
upward) computed as of the last day of such calendar month of: (a) the aggregate
credit sales made by the Originators during the most recent one calendar month
to (b) the aggregate Outstanding Balance of the Eligible Receivables at the last
day of the most recent calendar month.

     "Dilution Ratio" means the ratio (expressed as a percentage and rounded to
the nearest 1/100th of 1%, with 5/1000th of 1% rounded upward), computed as of
the last day of each calendar month by dividing: (a) the aggregate amount of
payments made or owed by the Seller pursuant to Section 1.4(e)(i) of the
Agreement during such calendar month by (b) the aggregate credit sales made by
all the Originators during the calendar month that is one month prior to such
calendar month.

     "Dilution Reserve" means, on any day, an amount equal to: (a) to the extent
that The Pittston Company has a long-term senior unsecured debt rating of at
least "BBB-" by Standard & Poor's and "Baa3" by Moody's, 0%, or (b) if The
Pittston Company does not have the debt rating described in clause (a), above,
(i) the Capital at the close of business of the Servicer on such date multiplied
by (ii) (A) the Dilution Reserve Percentage on such date, divided by (B) 1 minus
the Dilution Reserve Percentage on such date.

     "Dilution Reserve Percentage" means on any date, the greater of: (a) 3% and
(b) the product of (i) the Dilution Horizon
                                                 Receivables Purchase Agreement

                                      I-6

multiplied by (ii) the sum of (x) 2 times the average of the Dilution Ratios for
the twelve most recent calendar months and (y) the Spike Factor.

     "Discount" means:

          (a) for the Portion of Capital for any Yield Period to the extent the
     Issuer will be funding such Portion of Capital during such Yield Period
     through the issuance of Notes:

                              CPR x C x ED/360 + TF

          (b) for the Portion of Capital for any Yield Period to the extent the
     Issuer will not be funding such Portion of Capital during such Yield Period
     through the issuance of Notes:

                              AR x C x ED/Year + TF

     where:

                         

                  AR    =   the Alternate Rate for the Portion of Capital  for
                            such Yield Period,

                  C     =   the relevant Portion of Capital during such Yield
                            Period,

                  CPR   =   the CP Rate for the Portion of Capital,

                  ED    =   the actual number of days during such Yield Period,

                  Year  =   if such Portion of Capital is funded based upon:
                            (i) the  Eurodollar  Rate,  360 days, and
                            (ii) the Base Rate, 365 or 366 days, as applicable,
                            and

                  TF    =   the Termination Fee, if any, for the Portion of
                            Capital for such Yield Period;

provided, however, that no provision of the Agreement shall require the payment
or permit the collection of Discount in excess of the maximum permitted by
applicable law; and provided further, that Discount for the Portion of Capital
shall not be considered paid by any distribution to the extent that at any time
all or a portion of such distribution is rescinded or must otherwise be returned
for any reason.

                                                 Receivables Purchase Agreement

                                      I-7

     "Eligible Receivable" means, at any time, a Pool Receivable:

          (a) the Obligor of which is (i) a United States resident; provided,
     however, if the Obligor of such Receivable is a resident of a jurisdiction
     other than the United States (and, solely to the extent that (1) the
     inclusion of any Receivables of such Obligor in the Net Receivables Pool
     Balance has been consented to, in writing, by the Administrator prior to
     such inclusion; it being understood that by signing the Agreement on the
     date hereof, the Administrator shall, subject to the concentration
     limitation set forth in this proviso and the remaining requirements of this
     parenthetical, be deemed to have consented in writing for purposes of this
     parenthetical, to the inclusion of Receivables in the Net Receivables Pool
     Balance, the Obligors of which are residents of either Mexico or Canada and
     (2) the Administrator has received reasonably satisfactory evidence that
     the Contract relating to any such Receivable does not prohibit, restrict or
     otherwise require the consent of the related Obligor in order for the
     Originator thereof to freely assign such Receivable as contemplated by the
     Transaction Documents), the aggregate Outstanding Balance of all Pool
     Receivables of such Obligor that are Eligible Receivables when added to the
     aggregate Outstanding Balance of all other Eligible Receivables of Obligors
     that are not residents of the United States, shall not exceed 10% of the
     aggregate outstanding balance of all Eligible Receivables (not counting any
     otherwise Eligible Receivables the Obligors of which are not residents of
     the United States) at such time, (ii) not a government or a governmental
     subdivision, affiliate or agency; provided, however, if the Obligor of such
     Receivable is a government or a governmental subdivision, affiliate or
     agency, the aggregate Outstanding Balance of all Pool Receivables of such
     Obligor that are Eligible Receivables when added to the aggregate
     Outstanding Balance of all other Eligible Receivables of Obligors that are
     governments or a governmental subdivisions, affiliates or agencies shall
     not exceed 5% of the aggregate outstanding balance of all Eligible
     Receivables (not counting any otherwise Eligible Receivables the Obligors
     of which are not governments or a governmental subdivisions, affiliates or
     agencies) at such time, (iii) not subject to any action of the type
     described in paragraph (f) of Exhibit V to the Agreement and (iv) not an
     Affiliate of BAX or any Affiliate of BAX,

          (b) that is denominated and payable only in U.S. dollars in the United
     States,

          (c) that does not have a stated maturity which is more than 45 days
     after the Shipping Date of such Receivable; provided, however, that the
     aggregate Outstanding Balance of all Receivables that have payment terms
     that are greater than

                                                 Receivables Purchase Agreement

                                      I-8

     15 days after the Shipping Date for such Receivable, shall not exceed 10%
     of the aggregate outstanding balance of all Eligible Receivables (not
     counting any otherwise Eligible Receivables with payment terms greater
     than 15 days after the Shipping Date thereof),

          (d) that arises under a duly authorized Contract for the sale and
     delivery of goods and services in the ordinary course of each Originator's
     business,

          (e) that arises under a duly authorized Contract that is in full force
     and effect and that is a legal, valid and binding obligation of the related
     Obligor, enforceable against such Obligor in accordance with its terms,

          (f) that conforms in all material respects with all applicable laws,
     rulings and regulations in effect,

          (g) that is not the subject of any asserted dispute, offset, hold back
     defense, Adverse Claim or other claim,

          (h) that satisfies all applicable requirements of the applicable
     Credit and Collection Policy,

          (i) that has not been modified, waived or restructured since its
     creation, except as permitted pursuant to Section 4.2 of the Agreement,

          (j) in which the Seller owns good and marketable title, free and clear
     of any Adverse Claims, and that is freely assignable by the Seller,

          (k) for which the Issuer shall have a valid and enforceable undivided
     percentage ownership or security interest, to the extent of the Purchased
     Interest, and a valid and enforceable first priority perfected security
     interest therein and in the Related Security and Collections with respect
     thereto, in each case free and clear of any Adverse Claim,

          (l) that constitutes an account as defined in the UCC, and that is not
     evidenced by instruments or chattel paper,

          (m) that is not a Defaulted Receivable,

          (n) for which neither the Originator thereof, the Seller nor the
     Servicer has established any offset arrangements with the related Obligor,

                                                 Receivables Purchase Agreement

                                      I-9

          (o) for which Defaulted Receivables of the related Obligors identified
     on the Monthly Report do not exceed 40% of the Outstanding Balance of all
     such Obligor's Receivables,

          (p) that represents amounts earned and payable by the Obligor that are
     not subject to the performance of additional services by the Originator
     thereof, and

          (q) the obligation with respect to which represents all or part of the
     sales price of merchandise, insurance or services within the meaning of
     Section 3(c)(5) of the Investment Company Act of 1940, as amended.

     "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any successor statute of similar import, together
with the regulations thereunder, in each case as in effect from time to time.
References to sections of ERISA also refer to any successor sections.

     "ERISA Affiliate" means: (a) any corporation that is a member of the same
controlled group of corporations (within the meaning of Section 414(b) of the
Internal Revenue Code) as the Seller, any Originator or BAX, (b) a trade or
business (whether or not incorporated) under common control (within the meaning
of Section 414(c) of the Internal Revenue Code) with the Seller, any Originator
or BAX, or (c) a member of the same affiliated service group (within the meaning
of Section 414(m) of the Internal Revenue Code) as the Seller, any Originator,
any corporation described in clause (a) or any trade or business described in
clause (b).

     "ERISA Notice" means any of the following notices: (i) any unfavorable
determination letter from the Internal Revenue Service regarding the
qualification of a Benefit Plan under Section 401(a) of the Code (along with a
copy thereof) which would have a Material Adverse Effect, (ii) all notices
received by the Servicer or its Affiliates or any ERISA Affiliate of the Pension
Benefit Guaranty Corporation's intent to terminate any pension plan or to have a
trustee appointed to administer any pension plan, (iii) all notices received by
any of the Servicer or its Affiliates or any ERISA Affiliate from a
multiemployer plan sponsor concerning the imposition or amount of withdrawal
liability pursuant to Section 4202 of ERISA which would have a Material Adverse
Effect, (iv) the Servicer or its Affiliates obtaining knowledge or reason to
know that the Servicer or its Affiliates or any ERISA Affiliate has filed or
intends to file a notice of intent to terminate any pension plan under a
distress termination within the meaning of Section 4041(c) of ERISA, and (v) the
occurrence of a Reportable Event (within the meaning of Section 4043 of ERISA),
unless notice of any such Reportable Event has been waived by regulation.

                                                 Receivables Purchase Agreement

                                     I-10

     "Eurodollar Rate" means, for any Yield Period, an interest rate per annum
(rounded upward to the nearest 1/16th of 1%) determined pursuant to the
following formula:

                                              LIBOR
                           ----------------------------------
                    100% - Eurodollar Rate Reserve Percentage

where "Eurodollar Rate Reserve Percentage" means, for any Yield Period, the
maximum reserve percentage (expressed as a decimal, rounded upward to the
nearest 1/100th of 1%) in effect on the date LIBOR for such Yield Period is
determined under regulations issued from time to time by the Federal Reserve
Board for determining the maximum reserve requirement (including any emergency,
supplemental or other marginal reserve requirement) with respect to
"Eurocurrency" funding (currently referred to as "Eurocurrency liabilities")
having a term comparable to such Yield Period.

     "Event of Bankruptcy" means (a) any case, action or proceeding before any
court or other governmental authority relating to bankruptcy, reorganization,
insolvency, liquidation, receivership, dissolution, winding-up or relief of
debtors or (b) any general assignment for the benefit of creditors of a Person,
composition, marshalling of assets for creditors of a Person, or other similar
arrangement in respect of its creditors generally or any substantial portion of
its creditors; in each of cases (a) and (b) undertaken under U.S. Federal, state
or foreign law, including the U.S. Bankruptcy Code.

     "Excess Concentration" means the sum of the amounts by which the
Outstanding Balance of Eligible Receivables of each Obligor then in the
Receivables Pool exceeds an amount equal to: (a) the Concentration Percentage
for such Obligor multiplied by (b) the Outstanding Balance of all Eligible
Receivables then in the Receivables Pool.

     "Facility Termination Date" means the earliest to occur of: (a) December
15, 2005,(b) the date determined pursuant to Section 2.2 of the Agreement, (c)
the date the Purchase Limit reduces to zero pursuant to Section 1.1(b) of the
Agreement and (d) the date that the commitments of all Purchasers terminate
under the Liquidity Agreement.

     "Federal Funds Rate" means, for any day, the per annum rate set forth in
the weekly statistical release designated as H.15(519), or any successor
publication, published by the Federal Reserve Board (including any such
successor, "H.15(519)") for such day opposite the caption "Federal Funds
(Effective)." If on any relevant day such rate is not yet published in
H.15(519), the rate for such day will be the rate set forth in the daily
statistical release designated as the Composite 3:30 p.m. Quotations for U.S.
Government Securities, or any successor publication, published by

                                                 Receivables Purchase Agreement

                                     I-11

the Federal Reserve Bank of New York (including any such successor, the
"Composite 3:30 p.m. Quotations") for such day under the caption "Federal
Funds Effective Rate." If on any relevant day the appropriate rate is not yet
published in either H.15(519) or the Composite 3:30 p.m. Quotations, the rate
for such day will be the arithmetic mean as determined by the Administrator of
the rates for the last transaction in overnight Federal funds arranged before
9:00 a.m. (New York time) on that day by each of three leading brokers of
Federal funds transactions in New York City selected by the Administrator.

     "Federal Reserve Board" means the Board of Governors of the Federal Reserve
System, or any entity succeeding to any of its principal functions.

     "Fee Letter" has the meaning set forth in Section 1.5 of the Agreement.

     "Fees" means the fees payable by the Seller to the Issuer (or the
Administrator on behalf of the Issuer) pursuant to the Fee Letter.

     "GAAP" means, subject to the provisions set forth in Section 1.10 of the
Agreement, generally accepted accounting principles in the United States, as
recognized by the American Institute of Certified Public Accountants and the
Financial Accounting Standards Board, consistently applied and maintained on a
consistent basis throughout the period indicated.

     "Governmental Authority" means any nation or government, any state or other
political subdivision thereof, any central bank (or similar monetary or
regulatory authority) thereof, any body or entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government, including any court, and any Person owned or controlled, through
stock or capital ownership or otherwise, by any of the foregoing.

     "Group A Obligor" means any Obligor with a short-term rating of at least:
(a) "A-1" by Standard & Poor's, or if such Obligor does not have a short-term
rating from Standard & Poor's, a rating of "A+" or better by Standard & Poor's
on its long-term senior unsecured and uncredit-enhanced debt securities, and (b)
"P-1" by Moody's, or if such Obligor does not have a short-term rating from
Moody's, "A1" or better by Moody's on its long-term senior unsecured and
uncredit-enhanced debt securities.

     "Group B Obligor" means an Obligor, not a Group A Obligor, with a
short-term rating of at least: (a) "A-2" by Standard & Poor's, or if such
Obligor does not have a short-term rating from Standard & Poor's, a rating of
"BBB+" to "A" by Standard & Poor's on its long-term senior unsecured and
uncredit-enhanced debt

                                                 Receivables Purchase Agreement

                                     I-12

securities, and (b) "P-2" by Moody's, or if such Obligor does not have a
short-term rating from Moody's, "Baa1" to "A2" by Moody's on its long-term
senior unsecured and uncredit-enhanced debt securities.

     "Group B Obligor Percentage" means, at any time, for each Group B Obligor,
the percentage equivalent of: (a) the aggregate Outstanding Balance of the
Eligible Receivables of such Group B Obligor less any Excess Concentrations
of such Obligor, divided by (b) the aggregate Outstanding Balance of all
Eligible Receivables at such time.

     "Group C Obligor" means an Obligor, not a Group A Obligor or Group B
Obligor, with a short-term rating of at least: (a) "A-3" by Standard & Poor's,
or if such Obligor does not have a short-term rating from Standard & Poor's, a
rating of "BBB-" to "BBB" by Standard & Poor's on its long-term senior unsecured
and uncredit-enhanced debt securities, and (b) "P-3" by Moody's, or if such
Obligor does not have a short-term rating from Moody's, "Baa3" to "Baa2" by
Moody's on its long-term senior unsecured and uncredit-enhanced debt securities.

     "Group C Obligor Percentage" means, at any time, for each Group C Obligor,
the percentage equivalent of: (a) the aggregate Outstanding Balance of the
Eligible Receivables of such Group C Obligor less any Excess Concentrations of
such Obligor, divided by (b) the aggregate Outstanding Balance of all Eligible
Receivables at such time.

     "Group D Obligor" means any Obligor that is not a Group A Obligor, Group B
Obligor or Group C Obligor.

     "Group D Obligor Percentage" means, at any time, for each Group D Obligor:
(a) the aggregate Outstanding Balance of the Eligible Receivables of such Group
D Obligor less any Excess Concentrations of such Obligor, divided by (b) the
aggregate Outstanding Balance of all Eligible Receivables at such time.

     "Indemnified Amounts" has the meaning set forth in Section 3.1 of the
Agreement.

     "Indemnified Party" has the meaning set forth in Section 3.1 of the
Agreement.

     "Independent Director" has the meaning set forth in paragraph 3(c) of
Exhibit IV to the Agreement.

     "Insolvency Proceeding" means: (a) any case, action or proceeding before
any court or other Governmental Authority relating to bankruptcy,
reorganization, insolvency, liquidation, receivership, dissolution, winding-up
or relief of debtors, or (b)

                                                 Receivables Purchase Agreement

                                     I-13

any general assignment for the benefit of creditors, composition, marshaling
of assets for creditors, or other, similar arrangement in respect of its
creditors generally or any substantial portion of its creditors, in each
case undertaken under U.S. Federal, state or foreign law, including the
Bankruptcy Code.

     "Internal Revenue Code" means the Internal Revenue Code of 1986, as amended
from time to time, and any successor statute of similar import, together with
the regulations thereunder, in each case as in effect from time to time.
References to sections of the InternalRevenue Code also refer to any successor
sections.

     "Issuer" has the meaning set forth in the preamble to the Agreement.

     "Issuer's Share" of any amount means such amount multiplied by the
Purchased Interest at the time of determination.

     "LIBOR" means the rate of interest per annum determined by the
Administrator to be the arithmetic mean (rounded upward to the nearest 1/16th of
1%) of the rates of interest per annum notified to the Administrator by the
Reference Bank as the rate of interest at which dollar deposits in the
approximate amount of the Portion of Capital to be funded at the Eurodollar Rate
during such Yield Period would be offered by major banks in the London interbank
market to such Reference Bank at its request at or about 11:00 a.m. (London
time) on the second Business Day before the commencement of such Yield Period.

     "Liquidity Agent" means BNS in its capacity as the Liquidity Agent pursuant
to the Liquidity Agreement.

     "Liquidity Agreement" means the Liquidity Asset Purchase Agreement, dated
as of December 15, 2000 between the Purchasers from time to time party thereto,
the Issuer and BNS, as Administrator and Liquidity Agent, as the same may be
further amended, supplemented or otherwise modified from time to time.

     "Lock-Box Account" means an account maintained at a bank or other financial
institution for the purpose of receiving Collections.

     "Lock-Box Agreement" means an agreement, in form and substance satisfactory
to the Administrator, among the Seller, the Servicer, the Administrator and a
Lock-Box Bank.

     "Lock-Box Bank" means any of the banks or other financial institutions
holding one or more Lock-Box Accounts.

     "Loss Reserve" means, on any date, an amount equal to (a) the Capital at
the close of business of the Servicer on such date

                                                 Receivables Purchase Agreement

                                     I-14

multiplied by (b)(i) the Loss Reserve Percentage on such date divided by (ii) 1
minus the Loss Reserve Percentage on such date.

     "Loss Reserve Percentage" means, on any date, the greater of: (a) 12% and
(b) (i) the product of (x) 2 times the highest average of the Default Ratios for
any three consecutive calendar months during the twelve most recent calendar
months multiplied by (y) the sum of the aggregate credit sales made during the
two most recent calendar months, plus one-half of the aggregate credit sales
made during the third most recent calendar months divided by (ii) the Net
Receivables Pool Balance on such date.

     "Loss-to-Liquidation Ratio" means the ratio (expressed as a percentage and
rounded to the nearest 1/100 of 1%, with 5/1000th of 1% rounded upward) computed
as of the last day of each calendar month by dividing: (a) the aggregate
Outstanding Balance of all Pool Receivables that were written off the Seller's
books as uncollectible during such month, by (b) the aggregate amount of
Collections (other than Deemed Collections) received during such month.

     "Material Adverse Effect" means, relative to any Person with respect to any
event or circumstance, a material adverse effect on:

          (a) the assets, financial condition or results of operations of any
     such Person taken as a whole that would impair its ability to perform its
     obligations under the Agreement or any other Transaction Document to which
     it is a party,

          (b) the rights or remedies of the Seller, Issuer or Administrator
     under the Agreement or any other Transaction Document,

          (c) the validity or enforceability of any other Transaction Document,
     or the validity, enforceability or collectibility of the Pool Receivables,
     or

          (d) the status, perfection, enforceability or priority of the Issuer's
     or the Seller's interest in the Pool Assets.

     "Monthly Report" means a report, in substantially the form of Annex A to
the Agreement, furnished to the Administrator pursuant to the Agreement.

     "Monthly Settlement Date" means the first Business Day of each calendar
month.

     "Moody's" means Moody's Investors Service, Inc.

                                                 Receivables Purchase Agreement

                                     I-15

     "Net Receivables Pool Balance" means, at any time: (a) the Outstanding
Balance of Eligible Receivables then in the Receivables Pool minus (b) the
Excess Concentration.

     "Notes" means short-term promissory notes issued, or to be issued, by the
Issuer to fund its investments in accounts receivable or other financial assets.

     "Obligor" means, with respect to any Receivable, the Person obligated to
make payments pursuant to the Contract relating to such Receivable other than
an agent or Affiliate of the related Originator.

     "Originator" has the meaning set forth in the Sale Agreement.

     "Originator Assignment Certificate" means each assignment, in substantially
the form of Exhibit C to the Sale Agreement, evidencing Seller's ownership of
the Receivables generated by each Originator, as the same may be amended,
supplemented, amended and restated, or otherwise modified from time to time in
accordance with the Sale Agreement.

     "Outstanding Balance" of any Receivable at any time means the then
outstanding principal balance thereof.

     "Payment Date" has the meaning set forth in Section 2.1 of the Sale
Agreement.

     "Permitted Investments" means certificates of deposit that are not
represented by instruments, have a maturity of one week or less and are issued
by the Collection Account Bank (with respect to the investment of funds in the
Collection Account) or The Bank of Nova Scotia; provided, however, that the
Administrator (on behalf of Issuer) may, from time to time, upon seven Business
Days' prior written notice to Servicer, remove from the scope of "Permitted
Investments" certificates of deposit of any such bank(s) and specify to be
within such scope, certificates of deposit of any other bank.

     "Person" means an individual, partnership, corporation (including a
business trust), joint stock company, trust, unincorporated association, joint
venture, limited liability company or other entity, or a government or any
political subdivision or agency thereof.

     "Pool Assets" has the meaning set forth in Section 1.2(d) of the Agreement.

     "Pool Receivable" means a Receivable in the Receivables Pool.

                                                 Receivables Purchase Agreement

                                     I-16

     "Portion of Capital" means, at any time, any portion of the Capital being
funded or maintained by the Issuer by reference to a particular interest rate
basis. In addition, at any time when the Capital of the Purchased Interest is
not divided into two or more portions, "Portion of Capital" means 100% of the
Capital.

     "Program Support Agreement" means and includes the Liquidity Agreement and
any other agreement entered into by any Program Support Provider providing for:
(a) the issuance of one or more letters of credit for the account of the Issuer,
(b) the issuance of one or more surety bonds for which the Issuer is obligated
to reimburse the applicable Program Support Provider for any drawings
thereunder, (c) the sale by the Issuer to any Program Support Provider of the
Purchased Interest (or portions thereof) and/or (d) the making of loans and/or
other extensions of credit to the Issuer in connection with the Issuer's
Receivables-securitization program contemplated in the Agreement, together with
any letter of credit, surety bond or other instrument issued thereunder (but
excluding any discretionary advance facility provided by the Administrator).

     "Program Support Provider" means and includes any Purchaser and any other
Person (other than any customer of the Issuer) now or hereafter extending credit
or having a commitment to extend credit to or for the account of, or to make
purchases from, the Issuer pursuant to any Program Support Agreement.

     "Purchase and Sale Indemnified Amounts" has the meaning set forth in
Section 9.1 of the Sale Agreement.

     "Purchase and Sale Indemnified Party" has the meaning set forth in Section
9.1 of the Sale Agreement.

     "Purchase and Sale Termination Date" has the meaning set forth in Section
1.4 of the Sale Agreement.

     "Purchase and Sale Termination Event" has the meaning set forth in Section
8.1 of the Sale Agreement.

     "Purchase Facility" has the meaning set forth in Section 1.1 of the Sale
Agreement.

     "Purchase Limit" means $90,000,000, as such amount may be reduced pursuant
to Section 1.1(b) of the Agreement. References to the unused portion of the
Purchase Limit shall mean, at any time, the Purchase Limit minus the then
outstanding Capital.

     "Purchase Price" has the meaning set forth in Section 2.1 of the Sale
Agreement.

     "Purchase Report" has the meaning set forth in Section 2.1 of the Sale
Agreement.

                                                 Receivables Purchase Agreement

                                     I-17

     "Purchased Interest" means, at any time, the undivided percentage ownership
interest in: (a) each and every Pool Receivable now existing or hereafter
arising, (b) all Related Security with respect to such Pool Receivables and (c)
all Collections with respect to, and other proceeds of, such Pool Receivables
and Related Security. Such undivided percentage interest shall be computed as:

                            Capital + Total Reserves
                         ------------------------------
                          Net Receivables Pool Balance

The Purchased Interest shall be determined from time to time pursuant to Section
1.3 of the Agreement.

     "Purchaser" has the meaning set forth in Section 5.3(b) of the Agreement.

     "Rating Agency" means each of Moody's, Standard & Poor's and any other
nationally recognized rating agency then rating the Issuer's Notes.

     "Rating Agency Condition" means, with respect to any event or occurrence,
receipt by the Issuer of written confirmation from Standard & Poor's and Moody's
that such event or occurrence shall not cause the rating on the then outstanding
Notes to be downgraded or withdrawn.

     "Receivable" means any indebtedness and other obligations owed to any
Originator or the Seller or any right of the Seller or such Originator to
payment from or on behalf of an Obligor, whether constituting an account,
chattel paper, instrument or general intangible, arising in connection with the
sale of goods or the rendering of services by such Originator or Seller, and
includes, without limitation, the obligation to pay any finance charges, fees
and other charges with respect thereto. Indebtedness and other obligations
arising from any one transaction, including, without limitation, indebtedness
and other obligations represented by an individual invoice or agreement, shall
constitute a Receivable separate from a Receivable consisting of the
indebtedness and other obligations arising from any other transaction.

     "Receivables Pool" means, at any time, all of the then outstanding
Receivables purchased or purported to be purchased by the Seller or contributed
to the Seller pursuant to the Sale Agreement prior to the Facility Termination
Date.

     "Reference Bank" means BNS.

     "Related Rights" has the meaning set forth in Section 1.1 of the Sale
Agreement.

                                                 Receivables Purchase Agreement

                                     I-18

     "Related Security" means, with respect to any Receivable:

          (a) all of the Seller's and each Originator's interest in any goods
     (including returned goods), and documentation of title evidencing the
     shipment or storage of any goods (including returned goods), relating to
     any sale giving rise to such Receivable,

          (b) all instruments and chattel paper that may evidence such
     Receivable,

          (c) all other security interests or liens and property subject thereto
     from time to time purporting to secure payment of such Receivable, whether
     pursuant to the Contract related to such Receivable or otherwise, together
     with all UCC financing statements or similar filings relating thereto, and

          (d) all of the Seller's and each Originator's rights, interests and
     claims under the Contracts and all guaranties, indemnities, insurance and
     other agreements (including the related Contract) or arrangements of
     whatever character from time to time supporting or securing payment of such
     Receivable or otherwise relating to such Receivable, whether pursuant to
     the Contract related to such Receivable or otherwise.

     "Responsible Officer" shall mean, with respect to any Person, the chairman,
the chief executive officer, the chief financial officer, the president, the
controller, the secretary, the treasurer, or any other officer or designee of
such Person customarily performing functions similar to those performed by any
of the above-designated officers and also, with respect to a particular matter
any other officer or designee to whom such matter is referred because of such
officer's or designee's knowledge of and familiarity with the particular
subject.

     "Sale Agreement" means the Purchase and Sale Agreement, dated as of
December 15, 2000, between the Seller and the Originators that are or become a
party thereto pursuant to the terms thereof, as such agreement may be amended,
amended and restated, supplemented or otherwise modified from time to time.

     "Seller" has the meaning set forth in the preamble to the Agreement.

     "Seller's Share" of any amount means the greater of: (a) $0 and (b) such
amount minus the Issuer's Share.

     "Servicer" has the meaning set forth in the preamble to the Agreement.

     "Servicing Fee" shall mean the fee referred to in Section 4.6 of the
Agreement.

                                                 Receivables Purchase Agreement

                                     I-19

     "Servicing Fee Rate" shall mean the rate referred to in Section 4.6 of the
Agreement.

     "Servicing Fee Reserve" for the purchased interest at any time means the
sum of (a) the then accrued and unpaid Servicing Fee relating to the Purchased
Interest plus (b) the product of (i) the Outstanding Balance of Pool Receivables
at such time, times (ii) the product of (x) the Servicing Fee Rate multiplied by
(y) a fraction, the numerator of which is 1.5 times the Days' Sales Outstanding
(calculated on the last day of the most recent preceding calendar month) and the
denominator of which is 360.

     "Settlement Date" means (a) with respect to any Portion of Capital, the
last day of the Yield Period for such Portion of Capital and (b) with respect to
any fees payable under the Agreement, the Monthly Settlement Date.

     "Shipping Date" means, with respect to any Receivable, the date on which
the goods and/or services pursuant to which such Receivable arose, are shipped
by the applicable Originator thereof.

     "Solvent" means, with respect to any Person at any time, a condition under
which:

          (i) the fair value and present fair saleable value of such Person's
     total assets is, on the date of determination, greater than such Person's
     total liabilities (including contingent and unliquidated liabilities) at
     such time;

          (ii) the fair value and present fair saleable value of such Person's
     assets is greater than the amount that will be required to pay such
     Person's probable liability on its existing debts as they become absolute
     and matured ("debts," for this purpose, includes all legal liabilities,
     whether matured or unmatured, liquidated or unliquidated, absolute, fixed,
     or contingent);

          (iii) such Person is and shall continue to be able to pay all of its
     liabilities as such liabilities mature; and

          (iv) such Person does not have unreasonably small capital with which
     to engage in its current and in its anticipated business.

     For purposes of this definition:

          (A) the amount of a Person's contingent or unliquidated liabilities at
     any time shall be that amount which, in light
                                                 Receivables Purchase Agreement

                                     I-20

     of all the facts and circumstances then existing, represents the amount
     which can reasonably be expected to become an actual or matured liability;

          (B) the "fair value" of an asset shall be the amount which may be
     realized within a reasonable time either through collection or sale of such
     asset at its regular market value;

          (C) the "regular market value" of an asset shall be the amount which a
     capable and diligent business person could obtain for such asset from an
     interested buyer who is willing to Purchase such asset under ordinary
     selling conditions; and

          (D) the "present fair saleable value" of an asset means the amount
     which can be obtained if such asset is sold with reasonable promptness
     in an arm's-length transaction in an existing and not theoretical market.

     "Spike Factor" means, for any calendar month, the positive difference, if
any, between: (a) the highest Dilution Ratio for any calendar month during the
twelve most recent calendar months and (b) the arithmetic average of the
Dilution Ratios for such twelve months.

     "Standard & Poor's" means Standard & Poor's, a division of The McGraw-Hill
Companies, Inc.

     "Subsidiary" means, as to any Person, a corporation, partnership, limited
liability company or other entity of which shares of stock of each class or
other interests having ordinary voting power (other than stock or other
interests having such power only by reason of the happening of a contingency) to
elect a majority of the Board of Directors or other managers of such entity are
at the time owned, or management of which is otherwise controlled: (a) by such
Person, (b) by one or more Subsidiaries of such Person or (c) by such Person and
one or more Subsidiaries of such Person.

     "Termination Day" means: (a) each day on which the conditions set forth in
Section 2 of Exhibit II to the Agreement are not satisfied or (b) each day that
occurs on or after the Facility Termination Date.

     "Termination Event" has the meaning specified in Exhibit V to the
Agreement.

     "Termination Fee" means, for any Yield Period, the amount, if any, by
which: (a) the additional Discount (calculated without taking into account any
Termination Fee or any shortened duration of such Yield Period pursuant to the
definition thereof) that would have accrued during such Yield Period on the
reductions of Capital

                                                 Receivables Purchase Agreement

                                     I-21

relating to such Yield Period had such reductions not been made, exceeds
(b) the income, if any, received by the Issuer from investing the proceeds
of such reductions of Capital, as determined by the Administrator, which
determination shall be binding and conclusive for all purposes, absent
manifest error.

     "Total Reserves" means, at any time the sum of : (a) the Yield Reserve,
plus (b) Servicing Fee Reserve, plus (c) the greater of (i) the sum of (A) the
Loss Reserve plus (B) the Dilution Reserve and (ii) the Concentration Reserve.

     "Transaction Documents" means the Agreement, the Lock-Box Agreement(s), the
Collection Account Agreement, the Fee Letter, the Sale Agreement and all other
certificates, instruments, UCC financing statements, reports, notices,
agreements and documents executed or delivered under or in connection with the
Agreement, in each case as the same may be amended, supplemented or otherwise
modified from time to time in accordance with the Agreement.

     "UCC" means the Uniform Commercial Code as from time to time in effect in
the applicable jurisdiction.

     "Unmatured Purchase and Sale Termination Event" means any event which, with
the giving of notice or lapse of time, or both, would become a Purchase and Sale
Termination Event.

     "Unmatured Termination Event" means an event that, with the giving of
notice or lapse of time, or both, would constitute a Termination Event.

     "Yield Period" means, with respect to each Portion of Capital: (a) with
respect to any Portion of Capital funded by the issuance of Notes, (i) initially
the period commencing on (and including) the date of the initial purchase or
funding of such Portion of Capital and ending on (and including) the last day of
the current calendar month, and (ii) thereafter, each period commencing on (and
including) the first day after the last day of the immediately preceding Yield
Period for such Portion of Capital and ending on (and including) the last day of
the current calendar month; and (b) with respect to any Portion of Capital not
funded by the issuance of Notes, (i) initially the period commencing on (and
including) the date of the initial purchase or funding of such Portion of
Capital and ending such number of days (including a period of one day) as the
Administrator shall select, and (ii) thereafter, each period commencing on the
last day of the immediately preceding Yield Period and ending on such number of
days (including a period of one day) as the Administrator shall select;
provided, that

          (i) any Yield Period (other than of one day) which would otherwise end
     on a day which is not a Business Day shall be

                                                 Receivables Purchase Agreement

                                     I-22

     extended to the next succeeding Business Day; provided, however, if
     Discount in respect of such Yield Period is computed by reference to the
     Eurodollar Rate, and such Yield Period would otherwise end on a day which
     is not a Business Day, and there is no subsequent Business Day in the
     same calendar month as such day, such Yield Period shall end on the next
     preceding Business Day;

          (ii) in the case of any Yield Period of one day, (A) if such Yield
     Period is the initial Yield Period for a purchase hereunder (other than a
     reinvestment), such Yield Period shall be the day of such purchase; (B) any
     subsequently occurring Yield Period which is one day shall, if the
     immediately preceding Yield Period is more than one day, be the last day of
     such immediately preceding Yield Period, and, if the immediately preceding
     Yield Period is one day, be the day next following such immediately
     preceding Yield Period; and (C) if such Yield Period occurs on a day
     immediately preceding a day which is not a Business Day, such Yield Period
     shall be extended to the next succeeding Business Day; and

          (iii) in the case of any Yield Period for any Portion of Capital which
     commences before the Facility Termination Date and would otherwise end on a
     date occurring after the Facility Termination Date, such Yield Period shall
     end on such Facility Termination Date and the duration of each Yield Period
     which commences on or after the Facility Termination Date shall be of such
     duration as shall be selected by the Administrator.

     "Yield Reserve" means, at any time:

                           ( BR x 1.5(DSO) x Capital)
                            ----
                            360

     where:

                  BR    =    the Base Rate in effect at such time, and

                  DSO   =    Days' Sales Outstanding.

     Other Terms. All accounting terms not specifically defined herein shall be
construed in accordance with GAAP. All terms used in Article 9 of the UCC in the
State of New York, and not specifically defined herein, are used herein as
defined in such Article 9. Unless the context otherwise requires, "or" means
"and/or," and "including" (and with correlative meaning "include" and
"includes") means including without limiting the generality of any description
preceding such term.

                                                 Receivables Purchase Agreement

                                     I-23

                                   EXHIBIT II
                             CONDITIONS OF PURCHASES

     1. Conditions Precedent to Initial Purchase. The Initial Purchase under
this Agreement is subject to the following conditions precedent that the
Administrator shall have received on or before the date of such purchase, each
in form and substance (including the date thereof) satisfactory to the
Administrator:

     (a) A counterpart of the Agreement and the other Transaction Documents
executed by the parties thereto.

     (b) Certified copies of: (i) the resolutions of the Board of Directors of
each of the Seller, the Originators and BAX authorizing the execution, delivery
and performance by the Seller, each Originator and BAX, as the case may be, of
the Agreement and the other Transaction Documents to which it is a party; (ii)
all documents evidencing other necessary corporate action and governmental
approvals, if any, with respect to the Agreement and the other Transaction
Documents and (iii) the certificate of incorporation and by-laws of the Seller,
each Originator and BAX.

     (c) A certificate of the Secretary or Assistant Secretary of the Seller,
each Originator and BAX certifying the names and true signatures of its officers
who are authorized to sign the Agreement and the other Transaction Documents.
Until the Administrator receives a subsequent incumbency certificate from the
Seller, each Originator or BAX, as the case may be, the Administrator shall be
entitled to rely on the last such certificate delivered to it by the Seller,
such Originator or BAX, as the case may be.

     (d) Acknowledgment copies, or time stamped receipt copies, of proper
financing statements, duly filed on or before the date of such initial purchase
under the UCC of all jurisdictions that the Administrator may deem necessary or
desirable in order to perfect the interests of the Seller and the Issuer
contemplated by the Agreement and the Sale Agreement.

     (e) Acknowledgment copies, or time-stamped receipt copies, of proper
financing statements, if any, necessary to release all security interests and
other rights of any Person in the Receivables, Contracts or Related Security
previously granted by any Originator or the Seller.

     (f) Completed UCC search reports, dated on or shortly before the date of
the initial purchase hereunder, listing the financing statements filed in all
applicable jurisdictions referred to in subsection (e) above that name any
Originator or the Seller as debtor, together with copies of such other financing
statements,

                                      II-1

and similar search reports with respect to judgment liens, federal tax liens and
liens of the Pension Benefit Guaranty Corporation in such jurisdictions, as the
Administrator may request, showing no Adverse Claims on any Pool Assets.

     (g) within 45 days of the initial purchase under the Agreement, copies of
the executed (i) Lock-Box Agreements with each Lock-Box Bank and (ii) the
Collection Account Agreement with the Collection Account Bank.

     (h) Favorable opinions, in form and substance reasonably satisfactory to
the Administrator, of (i) general counsel for Seller, Servicer and each
Originator with respect to various corporate matters and (ii) Hunton & Williams,
as special counsel to the Seller, Servicer and each Originator with respect to
various corporate, UCC and bankruptcy matters as requested by the Administrator.

     (i) Satisfactory results of a review (performed by representatives of the
Administrator) of the Servicer's collection, operating and reporting systems,
the Credit and Collection Policy of each Originator, historical receivables data
and accounts, including satisfactory results of a review of the Servicer's
operating location(s) and satisfactory review and approval of the Eligible
Receivables in existence on the date of the initial purchase under the
Agreement.

     (j) A pro forma Monthly Report representing the performance of the
Receivables Pool for the calendar month before closing.

     (k) Evidence of payment by the Seller of all accrued and unpaid fees
(including those contemplated by the Fee Letter), costs and expenses to the
extent then due and payable on the date thereof, including any such costs, fees
and expenses arising under or referenced in Section 5.4 of the Agreement and the
Fee Letter.

     (l) The Fee Letter duly executed by the Seller and the Servicer.

     (m) Good standing certificates with respect to each of the Seller, the
Originators and the Servicer issued by the Secretary of State (or similar
official) of the state of each such Person's organization and principal place of
business.

     (n) Letters from each of the rating agencies then rating the Notes
confirming the rating of such Notes after giving effect to the transaction
contemplated by the Agreement.

     (o) The Liquidity Agreement duly executed by the parties thereto.

                                      II-2

     (p) A file (computer generated or otherwise) containing all information
with respect to the Receivables as the Administrator or the Issuer may
reasonably request.

     (q) Such other approvals, opinions or documents as the Administrator or the
Issuer may reasonably request.

     2. Conditions Precedent to All Purchases and Reinvestments. Each purchase
(including the initial purchase) and each reinvestment shall be subject to the
further conditions precedent that:

     (a) in the case of each purchase, the Servicer shall have delivered to the
Administrator on or before such purchase, in form and substance satisfactory to
the Administrator, a completed pro forma Monthly Report to reflect the level of
Capital and related reserves after such subsequent purchase; and

     (b) on the date of such purchase or reinvestment the following statements
shall be true (and acceptance of the proceeds of such purchase or reinvestment
shall be deemed a representation and warranty by the Seller that such statements
are then true):

          (i) the representations and warranties contained in Exhibit III to the
     Agreement are true and correct in all material respects on and as of the
     date of such purchase or reinvestment as though made on and as of such
     date;

          (ii) no event has occurred and is continuing, or would result from
     such purchase or reinvestment, that constitutes a Termination Event or an
     Unmatured Termination Event; and

          (iii) the Purchased Interest does not exceed 100%.

                                      II-3

                                   EXHIBIT III
                         REPRESENTATIONS AND WARRANTIES

     1. Representations and Warranties of the Seller. The Seller represents and
warrants as follows:

     (a) The Seller is a corporation duly incorporated, validly existing and in
good standing under the laws of the State of California, and is duly qualified
to do business and is in good standing as a foreign corporation in every
jurisdiction where the nature of its business requires it to be so qualified,
except where the failure to be so qualified would not have a Material Adverse
Effect.

     (b) The execution, delivery and performance by the Seller of the Agreement
and the other Transaction Documents to which it is a party, including its use of
the proceeds of purchases and reinvestments: (i) are within its corporate
powers; (ii) have been duly authorized by all necessary corporate action; (iii)
do not contravene or result in a default under or conflict with: (A) its charter
or by-laws, (B) any law, rule or regulation applicable to it, (C) any material
indenture, loan agreement, mortgage, deed of trust or other agreement or
instrument to which it is a party or by which it is bound, or (D) any order,
writ, judgment, award, injunction or decree binding on or affecting it or any of
its property; and (iv) do not result in or require the creation of any Adverse
Claim upon or with respect to any of its properties pursuant to the terms of any
material indenture, loan agreement, mortgage, deed of trust or other agreement
or instrument, other than the UCC filings referred to in Exhibit II to the
Agreement. The Agreement and the other Transaction Documents to which it is a
party have been duly executed and delivered by the Seller.

     (c) No authorization, license, approval or other action by, and no notice
to or filing with, any Governmental Authority or other Person is required for
the due execution, delivery and performance by the Seller of the Agreement or
any other Transaction Document to which it is a party, other than the UCC
filings referred to in Exhibit II to the Agreement, all of which shall have been
filed on or before the date of the first purchase hereunder.

     (d) Each of the Agreement and the other Transaction Documents to which the
Seller is a party constitutes its legal, valid and binding obligation of the
Seller enforceable against the Seller in accordance with its terms, except as
such enforcement may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar state or federal debtor relief laws from time to time in
effect which affect the enforcement of creditors' rights in general and the
availability of equitable remedies.

                                      III-1

     (e) There is no pending or, to Seller's best knowledge, threatened action
or proceeding affecting Seller or any of its properties before any Governmental
Authority or arbitrator which would be reasonably likely to have a Material
Adverse Effect.

     (f) No proceeds of any purchase or reinvestment will be used by the Seller
to acquire any equity security of a class that is registered pursuant to Section
12 of the Securities Exchange Act of 1934.

     (g) The Seller is the legal and beneficial owner of the Pool Receivables
and Related Security, free and clear of any Adverse Claim. Upon each purchase or
reinvestment, the Issuer shall acquire a valid and enforceable perfected
undivided percentage ownership or security interest, to the extent of the
Purchased Interest, in each Pool Receivable then existing or thereafter arising
and in the Related Security, Collections and other proceeds with respect
thereto, free and clear of any Adverse Claim. The Agreement creates a security
interest in favor of the Issuer in the Pool Assets, and the Issuer has a first
priority perfected security interest in the Pool Assets, free and clear of any
Adverse Claims. No effective financing statement or other instrument similar in
effect covering any Pool Asset is on file in any recording office, except those
filed in favor of the Seller pursuant to the Sale Agreement and the Issuer
relating to the Agreement.

     (h) Each Monthly Report (if prepared by the Seller or one of its Affiliates
on its behalf, or to the extent that information contained therein is supplied
by the Seller or an Affiliate), information, exhibit, financial statement,
document, book, record or report furnished or to be furnished at any time by a
Responsible Officer of the Seller to the Administrator in connection with the
Agreement or any other Transaction Document to which it is a party is or will be
complete and accurate in all material respects as of its date or as of the date
so furnished.

     (i) The Seller's principal place of business and chief executive office (as
such terms are used in the UCC) and the office where it keeps its records
concerning the Receivables are located at the address referred to in Section
1(b) of Exhibit IV to the Agreement.

     (j) The names and addresses of all the Lock-Box Banks, together with the
account numbers of the Lock-Box Accounts at such Lock-Box Banks, are specified
in Schedule II to the Agreement (or at such other Lock-Box Banks and/or with
such other Lock-Box Accounts as have been notified to the Administrator in
accordance with the Agreement) and all Lock-Box Accounts are subject to Lock-Box
Agreements.

                                      III-2

     (k) The Seller is not in violation of any order of any court, arbitrator or
Governmental Authority binding on or affecting it or any of its properties which
would be reasonably likely to have a Material Adverse Effect.

     (l) No proceeds of any purchase or reinvestment will be used by the Seller
for any purpose that violates any applicable law, rule or regulation, including
Regulations T, U or X of the Federal Reserve Board.

     (m) Each Pool Receivable included as an Eligible Receivable in the
calculation of the Net Receivables Pool Balance is an Eligible Receivable.

     (n) No event has occurred and is continuing, or would result from a
purchase in respect of, or reinvestment in respect of, the Purchased Interest or
from the application by the Seller of the proceeds therefrom, that constitutes a
Termination Event or an Unmatured Termination Event.

     (o) The Seller has complied in all material respects with the Credit and
Collection Policy of each Originator with regard to each Receivable originated
by such Originator.

     (p) The Seller has complied in all material respects with all of the terms,
covenants and agreements contained in the Agreement and the other Transaction
Documents that are applicable to it.

     (q) The Seller's complete corporate name is set forth in the preamble to
the Agreement, and it does not use and has not during the last five years used
any other corporate name, trade name, doing-business name or fictitious name,
except as set forth on Schedule III to the Agreement and except for names first
used after the date of the Agreement and set forth in a notice delivered to the
Administrator pursuant to Section 1(k)(iv) of Exhibit IV to the Agreement.

     (r) The Seller is not an "investment company," or a company "controlled" by
an "investment company" within the meaning of the Investment Company Act of
1940, as amended. In addition, the Seller is not a "holding company," a
"subsidiary company" of a "holding company" or an "affiliate" of a "holding
company" or of a "subsidiary company" of a "holding company" within the meaning
of the Public Utility Holding Company Act of 1935, as amended.

     (s) Each Pool Receivable, which has at any time been included in the Net
Receivables Pool Balance, of an Obligor, which is not a resident of the United
States, is not (and shall not at any time be) subject to any currency controls
imposed by any Governmental Authority under the laws of which such Obligor is
organized or a

                                      III-3

political subdivision thereof, which currency controls restrict the ability of
such Obligor to pay its obligations in connection with such Pool Receivable.

     2. Representations and Warranties of the Servicer. The Servicer, represents
and warrants as follows:

     (a) The Servicer is a corporation duly incorporated, validly existing and
in good standing under the laws of the State of its organization, and is duly
qualified to do business and is in good standing as a foreign corporation in
every jurisdiction where the nature of its business requires it to be so
qualified, except where the failure to be so qualified would not have a Material
Adverse Effect.

     (b) The execution, delivery and performance by the Servicer of the
Agreement and the other Transaction Documents to which it is a party, including
the Servicer's use of the proceeds of purchases and reinvestments: (i) are
within its corporate powers; (ii) have been duly authorized by all necessary
corporate action; (iii) do not contravene or result in a default under or
conflict with: (A) its charter or by-laws, (B) any law, rule or regulation
applicable to it, (C) any material indenture, loan agreement, mortgage, deed of
trust or other material agreement or instrument to which it is a party or by
which it is bound, or (D) any order, writ, judgment, award, injunction or decree
binding on or affecting it or any of its property; and (iv) do not result in or
require the creation of any Adverse Claim upon or with respect to any of its
properties pursuant to the terms of any material indenture, loan agreement,
mortgage, deed of trust or other material agreement or instrument. The Agreement
and the other Transaction Documents to which the Servicer is a party have been
duly executed and delivered by the Servicer.

     (c) No authorization, license, approval or other action by, and no notice
to or filing with any Governmental Authority or other Person, is required for
the due execution, delivery and performance by the Servicer of the Agreement or
any other Transaction Document to which it is a party that would have a Material
Adverse Effect.

     (d) Each of the Agreement and the other Transaction Documents to which
the Servicer is a party constitutes the legal, valid and binding obligation of
the Servicer enforceable against the Servicer in accordance with its terms,
except as such enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar state or federal debtor relief laws from
time to time in effect which affect the enforcement of creditors' rights in
general and the availability of equitable remedies.

     (e) The consolidated balance sheets of The Pittston Company and its
Subsidiaries at December 31, 1999, and the related consolidated statements of
operations, cash flows, and

                                      III-4

shareholders' equity and other comprehensive income for the fiscal year then
ended, copies of which have been furnished to the Administrator, fairly present
the consolidated financial condition of The Pittston Company and its
Subsidiaries at such date and the consolidated results of the operations of The
Pittston Company and its Subsidiaries for the period ended on such date, all in
accordance with GAAP consistently applied, and since December 31, 1999 there has
been no event or circumstances which have had a Material Adverse Effect.

     (f) Except as disclosed in the most recent audited financial statements of
The Pittston Company furnished to the Administrator, there is no pending or, to
the knowledge of a Responsible Officer of The Pittston Company or the Servicer,
threatened action or proceeding affecting it or any of its Subsidiaries before
any Governmental Authority or arbitrator that would have a Material Adverse
Effect.

     (g) Each Monthly Report (if prepared by the Servicer or one of its
Affiliates on its behalf, or to the extent that information contained therein is
supplied by the Servicer or an Affiliate), information, exhibit, financial
statement, document, book, record or report furnished or to be furnished at any
time by a Responsible Officer of the Servicer to the Administrator in connection
with the Agreement is or will be complete and accurate in all material respects
as of its date or (except as otherwise disclosed to the Administrator at such
time) as of the date so furnished.

     (h) The Servicer is not in violation of any order of any court, arbitrator
or Governmental Authority binding or affecting it or any of its properties,
which violation would have a Material Adverse Effect.

     (i) The Servicer has complied in all material respects with the Credit and
Collection Policy of each Originator with regard to each Receivable originated
by such Originator.

                                      III-5

                                   EXHIBIT IV
                                    COVENANTS

     1. Covenants of the Seller. Until the latest of the Facility Termination
Date, the date on which no Capital of or Discount in respect of the Purchased
Interest shall be outstanding or the date all other amounts owed by the Seller
under the Agreement to the Issuer, the Administrator and any other Indemnified
Party or Affected Person shall be paid in full:

     (a) Compliance with Laws, Etc. The Seller shall comply in all material
respects with all applicable laws, rules, regulations and orders, and preserve
and maintain its corporate existence, rights, franchises, qualifications and
privileges, except to the extent that the failure so to comply with such laws,
rules and regulations or the failure so to preserve and maintain such rights,
franchises, qualifications and privileges would not have a Material Adverse
Effect.

     (b) Offices, Records and Books of Account, Etc. The Seller: (i) shall keep
its principal place of business and chief executive office (as such terms or
similar terms are used in the UCC) and the office where it keeps its records
concerning the Receivables at the address of the Seller set forth under its name
on the signature page to the Agreement or, pursuant to clause (k)(iv) of this
Section 1 below, at any other locations in jurisdictions where all actions
reasonably requested by the Administrator to protect and perfect the interest of
the Issuer in the Receivables and related items (including the Pool Assets) have
been taken and completed and (ii) shall provide the Administrator with at least
30 days' prior written notice before making any change in the Seller's name or
making any other change in the Seller's identity or corporate structure
(including a Change in Control) that could render any UCC financing statement
filed in connection with this Agreement "seriously misleading" as such term (or
similar term) is used in the UCC; each notice to the Administrator pursuant to
this sentence shall set forth the applicable change and the effective date
thereof. The Seller also will maintain and implement (or cause the Servicer to
maintain and implement) administrative and operating procedures (including an
ability to recreate records evidencing Receivables and related Contracts in the
event of the destruction of the originals thereof), and keep and maintain (or
cause the Servicer to keep and maintain) all documents, books, records, computer
tapes and disks and other information reasonably necessary or advisable for the
collection of all Receivables (including records adequate to permit the daily
identification of each Receivable and all Collections of and adjustments to each
existing Receivable).

                                      IV-1

     (c) Performance and Compliance with Contracts and Credit and Collection
Policy. The Seller shall (and shall cause the Servicer to) fully comply in all
material respects with the applicable Credit and Collection Policies with regard
to each Receivable and the related Contract.

     (d) Ownership Interest, Etc. The Seller shall (and shall cause the Servicer
to), at its expense, take all action necessary or desirable to establish and
maintain a valid and enforceable undivided percentage ownership or security
interest, to the extent of the Purchased Interest, in the Pool Receivables, the
Related Security and Collections with respect thereto, and a first priority
perfected security interest in the Pool Assets, in each case free and clear of
any Adverse Claim, in favor of the Issuer, including taking such action to
perfect, protect or more fully evidence the interest of the Issuer as the
Issuer, through the Administrator, may reasonably request.

     (e) Sales, Liens, Etc. The Seller shall not sell, assign (by operation of
law or otherwise) or otherwise dispose of, or create or suffer to exist any
Adverse Claim upon or with respect to, any or all of its right, title or
interest in, to or under any Pool Assets (including the Seller's undivided
interest in any Receivable, Related Security or Collections, or upon or with
respect to any account to which any Collections of any Receivables are sent), or
assign any right to receive income in respect of any items contemplated by this
paragraph.

     (f) Extension or Amendment of Receivables. Except as provided in the
Agreement, the Seller shall not, and shall not permit the Servicer to, extend
the maturity or adjust the Outstanding Balance or otherwise modify the terms of
any Pool Receivable, or amend, modify or waive any term or condition of any
related Contract.

     (g) Change in Credit and Collection Policy. The Seller shall not make (or
permit any Originator to make) any material change in the character of its
business or in any Credit and Collection Policy, or any change in any Credit and
Collection Policy that would adversely affect the collectibility of the
Receivables Pool or the enforceability of any related Contract or the ability of
the Seller or Servicer to perform its obligations under any related Contract or
under the Agreement.

     (h) Audits. (i) The Seller shall (and shall cause each Originator to)(a)
prior to the occurrence of a Termination Event or an Unmatured Termination
Event, from time to time (but no more frequently than annually) during regular
business hours as reasonably requested in advance by the Administrator or (b) at
any time on and after the occurrence and continuance of a Termination Event or
an Unmatured Termination Event or, if in the opinion of the Administrator
reasonable grounds for insecurity exist with

                                      IV-2

respect to the collectibility of the Pool Receivables or with respect to the
Seller's performance or ability to perform its obligations under the Agreement,
permit the Administrator, or its agents or representatives: (A) to examine and
make copies of and abstracts from all books, records and documents (including
computer tapes and disks) in the possession or under the control of the Seller
(or any Originator) relating to Receivables and the Related Security, including
the related Contracts, and (B) to visit the offices and properties of the Seller
and each Originator for the purpose of examining such materials described in
clause (i)(A) above, and to discuss matters relating to Receivables and the
Related Security or the Seller's, the Servicer's or such Originator's
performance under the Transaction Documents or under the Contracts with any of
the officers, employees, agents or contractors of the Seller, the Servicer or
such Originator having knowledge of such matters; and (ii) without limiting the
provisions of clause (i) next above, from time to time during regular business
hours, upon five Business Days prior written notice from the Administrator,
permit certified public accountants or other auditors acceptable to the
Administrator to conduct a review of the Seller's or any Originator's books and
records, at the Seller's or such Originator's expense (as the case may be), with
respect to the Receivables. Each of the parties hereto hereby agrees that (x) in
the absence of a Termination Event or an Unmatured Termination Event, audits of
the type described in clause (ii) of this paragraph (h) shall be conducted only
as reasonably necessary, as determined in the sole discretion of the
Administrator, and all reasonable costs and expenses of any such audit,
examination or review performed or otherwise prepared pursuant to this paragraph
(h) shall be paid by the Seller and (y) each party receiving information with
respect to this paragraph (h) shall be subject to the standard of
confidentiality provided for such information as set forth in Section 5.13 of
the Agreement.

     (i) Change in Lock-Box Banks, Lock-Box Accounts and Payment Instructions to
Obligors. The Seller shall not, and shall not permit the Servicer or any
Originator to, (x) add or terminate any bank as a Lock-Box Bank or any account
as a Lock-Box Account from those listed in Schedule II to the Agreement, or make
any change in its instructions to Obligors regarding payments to be made to the
Seller, such Originator, the Servicer or any Lock-Box Account (or related post
office box), or (y) add or terminate any bank as the Collection Account Bank or
any account as the Collection Account unless, in either case, the Administrator
shall have received copies of all agreements and documents (including Lock-Box
Agreements and/or a Collection Account Agreement, as applicable) that it may
request in connection therewith.

     (j) Deposits to Lock-Box Accounts. The Seller shall (or shall cause the
Servicer to): (i) instruct all Obligors to make payments of all Receivables (or
cause all payments on Receivables to be

                                      IV-3

made) to one or more Lock-Box Accounts or to post office boxes to which only
Lock-Box Banks have access (and shall instruct the Lock-Box Banks to cause all
items and amounts relating to such Receivables received in such post office
boxes to be removed and deposited into a Lock-Box Account on a daily basis), and
(ii) deposit, or cause to be deposited, any Collections received by it, the
Servicer or any Originator into Lock-Box Accounts not later than one Business
Day after receipt thereof. Each Lock-Box Account and the Collection Account
shall at all times be subject to a Lock-Box Agreement and a Collection Account
Agreement, as applicable. The Seller will not (and will not permit the Servicer
to) deposit or otherwise credit, or cause or permit to be so deposited or
credited, to any Lock-Box Account or the Collection Account cash or cash
proceeds other than Collections.

     (k) Reporting Requirements. The Seller will provide to the Administrator
(in multiple copies, if requested by the Administrator) the following:

          (i) as soon as available and in any event within 120 days after the
     end of each fiscal year of the Seller, a copy of unaudited financial
     statements of the Seller for such year certified as to accuracy by a
     financial officer, treasurer or accounting officer of the Seller;

          (ii) as soon as possible and in any event within five Business Days
     after the occurrence of each Termination Event or Unmatured Termination
     Event, a statement of the chief financial officer of the Seller setting
     forth details of such Termination Event or Unmatured Termination Event and
     the action that the Seller has taken and proposes to take with respect
     thereto;

          (iii) promptly after the filing or receiving thereof, copies of all
     reports and notices that the Seller or any Affiliate files under ERISA with
     the Internal Revenue Service, the Pension Benefit Guaranty Corporation or
     the U.S. Department of Labor or that the Seller or any Affiliate receives
     from any of the foregoing or from any multiemployer plan (within the
     meaning of Section 4001(a)(3) of ERISA) to which the Seller or any of its
     Affiliates is or was, within the preceding five years, a contributing
     employer, in each case in respect of the assessment of withdrawal liability
     or an event or condition that could, in the aggregate, result in the
     imposition of liability on the Seller and/or any such Affiliate;

          (iv) at least fifteen days before any change in the Seller's name or
     any other change requiring the amendment of UCC financing statements, a
     notice setting forth such changes and the effective date thereof;

                                      IV-4

          (v) promptly after the Seller obtains knowledge thereof, notice of
     any: (A) material litigation, investigation or proceeding that may exist at
     any time between the Seller and any Person which would reasonably be
     expected to have a Material Adverse Effect or (B) material litigation or
     proceeding relating to any Transaction Document;

          (vi) promptly after the occurrence thereof, notice of a material
     adverse change in the business, operations, property or financial or other
     condition of the Seller, the Servicer or any Originator which (a) in the
     case of the Seller, would reasonably be expected to have a Material Adverse
     Effect and (b) in the case of the Servicer or any Originator, would have a
     Material Adverse Effect; and

          (vii) such other information respecting the Receivables or the
     condition or operations, financial or otherwise, of the Seller or any of
     its Affiliates as the Administrator may from time to time reasonably
     request.

     (l) Certain Agreements. Without the prior written consent of the
Administrator, the Seller will not (and will not permit any Originator to)
amend, modify, waive, revoke or terminate any Transaction Document to which it
is a party or any provision of Seller's certificate of incorporation or by-laws.

     (m) Restricted Payments. (i) Except pursuant to clause (ii) below, the
Seller will not: (A) purchase or redeem any shares of its capital stock, (B)
declare or pay any dividend or set aside any funds for any such purpose, (C)
prepay, purchase or redeem any Debt, (D) lend or advance any funds or (E) repay
any loans or advances to, for or from any of its Affiliates (the amounts
described in clauses (A) through (E) being referred to as "Restricted
Payments").

          (ii) Subject to the limitations set forth in clause (iii) below, the
     Seller may make Restricted Payments so long as such Restricted Payments are
     made only in one or more of the following ways: (A) the Seller may make
     cash payments (including prepayments) on the Company Notes in accordance
     with its terms, and (B) if no amounts are then outstanding under the
     Company Notes, the Seller may declare and pay dividends.

          (iii) The Seller may make Restricted Payments only out of the funds it
     receives pursuant to Sections 1.4(b)(ii) and (iv) of the Agreement.
     Furthermore, the Seller shall not pay, make or declare: (A) any dividend
     if, after giving effect thereto, the Seller's tangible net worth would be
     less than $1,500,000, or (B) any Restricted Payment (including any
     dividend) if, after giving effect thereto, any Termination Event or

                                      IV-5

     Unmatured Termination Event shall have occurred and be continuing.

     (n) Other Business. The Seller will not: (i) engage in any business other
than the transactions contemplated by the Transaction Documents; (ii) create,
incur or permit to exist any Debt of any kind (or cause or permit to be issued
for its account any letters of credit or bankers' acceptances) other than
pursuant to this Agreement or the Company Notes; or (iii) form any Subsidiary or
make any investments in any other Person; provided, however, that the Seller
shall be permitted to incur minimal obligations to the extent necessary for the
day-to-day operations of the Seller (such as expenses for stationery, audits,
maintenance of legal status, etc.).

     (o) Use of Seller's Share of Collections. The Seller shall apply the
Seller's Share of Collections to make payments in the following order of
priority: (i) the payment of its expenses (including all obligations payable to
the Issuer, the Servicer and the Administrator under the Agreement and under the
Fee Letter); (ii) the payment of accrued and unpaid interest on the Company
Notes; and (iii) other legal and valid corporate purposes.

     (p) Tangible Net Worth. The Seller will not permit its tangible net worth,
at any time, to be less than $1,500,000.

     2. Covenants of the Servicer. Until the latest of the Facility Termination
Date, the date on which no Capital of or Discount in respect of the Purchased
Interest shall be outstanding or the date all other amounts owed by the Seller
under the Agreement to the Issuer, the Administrator and any other Indemnified
Party or Affected Person shall be paid in full:

     (a) Compliance with Laws, Etc. The Servicer and, to the extent that it
ceases to be the Servicer, BAX shall comply (and shall cause each Originator to
comply) in all material respects with all applicable laws, rules, regulations
and orders, and preserve and maintain its corporate existence, rights,
franchises, qualifications and privileges, except to the extent that the failure
so to comply with such laws, rules and regulations or the failure so to preserve
and maintain such existence, rights, franchises, qualifications and privileges
would not have a Material Adverse Effect.

     (b) Records and Books of Account, Etc. The Servicer and, to the extent that
it ceases to be the Servicer, BAX, also will (and will cause each Originator to)
maintain and implement administrative and operating procedures (including an
ability to recreate records evidencing Receivables and related Contracts in the
event of the destruction of the originals thereof), and keep and maintain all
documents, books, records, computer tapes and

                                      IV-6

disks and other information reasonably necessary or advisable for the collection
of all Receivables (including records adequate to permit the daily
identification of each Receivable and all Collections of and adjustments to each
existing Receivable).

     (c) Change in Credit and Collection Policy. The Servicer and, to the extent
that it ceases to be the Servicer, BAX, shall not make (and shall not permit any
Originator to make) any change in the character of its business or in any Credit
and Collection Policy, or any change in any Credit and Collection Policy that
would have a Material Adverse Effect on the collectibility of the Receivables
Pool or the enforceability of any related Contract or the ability of the Seller
or Servicer to perform its obligations under any related Contract or under the
Agreement.

     (d) Audits. (i) The Servicer and, to the extent that it ceases to be the
Servicer, BAX, shall (and shall cause each Originator to)(a) prior to the
occurrence and continuance of a Termination Event or an Unmatured Termination
Event, from time to time (but no more frequently than annually) during regular
business hours as reasonably requested in advance by the Administrator or (b) at
any time on and after the occurrence of a Termination Event or an Unmatured
Termination Event or, if in the opinion of the Administrator reasonable grounds
for insecurity exist with respect to the collectibility of the Pool Receivables
or with respect to the Servicer's performance or ability to perform its
obligations under the Agreement, permit the Administrator, or its agents or
representatives: (A) to examine and make copies of and abstracts from all books,
records and documents (including computer tapes and disks) in its possession or
under its control relating to Receivables and the Related Security, including
the related Contracts, and (B) to visit its offices and properties for the
purpose of examining such materials described in clause (i)(A) above, and to
discuss matters relating to Receivables and the Related Security or its
performance hereunder or under the Contracts with any of its officers,
employees, agents or contractors having knowledge of such matters; and (ii)
without limiting the provisions of clause (i) next above, from time to time
during regular business hours, upon five Business Days prior written notice from
the Administrator, permit certified public accountants or other auditors
acceptable to the Administrator to conduct, at Servicer's expense, a review of
the Servicer's books and records with respect to the Receivables. Each of the
parties hereto hereby agrees that (x) in the absence of a Termination Event or
an Unmatured Termination Event, audits of the type described in clause (ii) of
this paragraph (d) shall be conducted only as reasonably necessary, as
determined in the sole discretion of the Administrator, and all reasonable costs
and expenses of any such audit, examination or review performed or otherwise
prepared pursuant to this paragraph (d) shall be paid by the Servicer and (y)
each party receiving information with respect to this paragraph

                                      IV-7

(d) shall be subject to the standard of confidentiality provided for such
information as set forth in Section 5.13 of the Agreement.

     (e) Deposits to Lock-Box Accounts. The Servicer shall: (i) instruct all
Obligors to make payments of all Receivables (or cause all payments on
Receivables to be made) to one or more Lock-Box Accounts or to post office boxes
to which only Lock-Box Banks have access (and shall instruct the Lock-Box Banks
to cause all items and amounts relating to such Receivables received in such
post office boxes to be removed and deposited into a Lock-Box Account on a daily
basis); and (ii) deposit, or cause to be deposited, any Collections received by
it into Lock-Box Accounts not later than one Business Day after receipt thereof.
Each Lock-Box Account and the Collection Account shall at all times be subject
to a Lock-Box Agreement and a Collection Account Agreement, as applicable. The
Servicer will not deposit or otherwise credit, or cause or permit to be so
deposited or credited, to any Lock-Box Account or the Collection Account cash or
cash proceeds other than Collections.

     (f) Reporting Requirements. The Servicer shall provide to the Administrator
(in multiple copies, if requested by the Administrator) the following:

          (i) As soon as available and in any event within 60 days after the end
     of each of the first three quarters of each fiscal year of The Pittston
     Company, (a) copies of the unaudited consolidated balance sheet of The
     Pittston Company and its Subsidiaries at the end of such quarter, together
     with unaudited statements of operations and cash flows for such quarter and
     the portion of the fiscal year through such quarter, prepared in accordance
     with GAAP (except for the omission of notes and subject to year-end
     adjustments) and certified by a financial officer, treasurer or an
     accounting officer of The Pittston Company, (b) a letter from a financial
     officer, treasurer or an accounting officer of the Servicer certifying to
     the best knowledge of such officer, that neither a Termination Event nor an
     Unmatured Termination Event has occurred and is continuing;

          (ii) As soon as available and in any event within 120 days after the
     end of each fiscal year of the Servicer, (a) a copy of the consolidated
     balance sheet of The Pittston Company and its Subsidiaries at the end of
     such fiscal year, together with the related statements of operations, cash
     flows, and shareholders' equity and other comprehensive income for such
     fiscal year, each prepared in accordance with GAAP applied consistently
     throughout the periods reflected therein, and (b) a letter from a financial
     officer, treasurer or an accounting officer of the Servicer certifying to
     the best knowledge of such officer, that neither a Termination Event nor an
     Unmatured Termination Event has occurred and is

                                      IV-8

     continuing, in each case as at the end of each such fiscal year and the
     date of delivery of such letter;

          (iii) as soon as available and in any event not later than the tenth
     Business Day after the last day of each calendar month, a Monthly Report as
     of the last day of such month or, within five Business Days of a request by
     the Administrator, a Monthly Report for such periods as is specified by the
     Administrator (including on a semi-monthly, weekly or daily basis);

          (iv) promptly after the sending or filing thereof, copies of all
     reports that the Servicer sends to any of its security holders, and copies
     of all reports and registration statements that the Servicer or any
     Subsidiary files with the Securities and Exchange Commission or any
     national securities exchange;

          (v) promptly after the filing or receiving thereof, copies of any
     ERISA Notices that the Servicer or any of its Affiliates files or that such
     Person or any of its Affiliates receives from any of the foregoing or from
     any multiemployer plan (within the meaning of Section 4001(a)(3) of ERISA)
     to which such Person or any of its Affiliate is or was, within the
     preceding five years, a contributing employer, in each case in respect of
     the assessment of withdrawal liability or an event or condition that could,
     in the aggregate, result in the imposition of liability on the Servicer
     and/or any such Affiliate;

          (vi) promptly after the Servicer obtains knowledge thereof, notice of:
     (A) the commencement of any proceedings by or before any Governmental
     Authority and all actions and proceedings in any court or before any
     arbitrator against the Servicer or any of its Subsidiaries which would have
     a Material Adverse Effect; or (B) litigation or proceeding relating to any
     Transaction Document;

          (vii) As soon as available and in any event within 120 days after the
     end of each fiscal year of Servicer beginning with the fiscal year ending
     December 31, 2001, the Servicer shall, at the Servicer's expense, cause a
     firm of independent public accountants acceptable to the Administrator, to
     furnish a report to the Administrator, setting forth the results of
     agreed-upon procedures performed by the accountants for such fiscal year.
     The agreed-upon procedures will include the following: (i) a comparison and
     reconciliation of the information contained in a sample of three of the
     Monthly Reports delivered during such fiscal year with the information
     contained in the Servicer's records and computer systems for such periods,
     (ii) a recalculation or verification of the Net Receivables Pool Balance as
     of the end of each Yield Period as

                                      IV-9

     reflected in the three Monthly Reports sampled in (i) above, (iii)
     determining, through inquiry and examination of supporting documentation
     for a sample of invoices, that the treatment of the Receivables by the
     Servicer as Eligible Receivables meets the definition thereof contained in
     Exhibit I of the Agreement, and (iv) procedures to support the validity,
     accuracy, and aging of the Receivables as reflected in the Servicer's
     records, using a scope consistent with that employed by the accountants to
     enable them to express an opinion on the consolidated financial statements
     of The Pittston Company. The Servicer shall not be required to cause such
     independent public accountants to furnish such report following the
     Facility Termination Date or any Termination Event where the Issuer and the
     Administrator have received all Collections and all other amounts due under
     the Agreement; and

          (viii) such other information in respect of the Receivables or the
     condition or operations, financial or otherwise, of BAX or any of its
     Affiliates as the Administrator may from time to time reasonably request.

     3. Separate Existence. The Seller hereby acknowledges that the Purchasers,
the Issuer and the Administrator are entering into the transactions contemplated
by this Agreement and the other Transaction Documents in reliance upon the
Seller's identity as a legal entity separate from its Affiliates or any other
Person. Therefore, from and after the date hereof, the Seller shall take all
steps specifically required by the Agreement or reasonably required by the
Administrator to continue the Seller's identity as a separate legal entity and
to make it apparent to third Persons that the Seller is an entity with assets
and liabilities distinct from those of any other Person, and is not a division
of BAX, its Affiliates or any other Person. Without limiting the generality of
the foregoing and in addition to and consistent with the other covenants set
forth herein, the Seller shall take such actions as shall be required in order
that:

          (a) The Seller will be a limited purpose corporation whose primary
     activities are restricted in its articles of incorporation to: (i)
     purchasing or otherwise acquiring from the Originators, owning, holding,
     granting security interests or selling interests in Pool Assets, (ii)
     entering into agreements for the selling and servicing of the Receivables
     Pool, and (iii) conducting such other activities as it deems necessary or
     appropriate to carry out its primary activities;

          (b) The Seller shall not engage in any business or activity, or incur
     any indebtedness or liability, other than as expressly permitted by the
     Transaction Documents;

                                      IV-10

          (c) At least one member of the Seller's Board of Directors (the
     "Independent Director") shall be an individual who is not a direct,
     indirect or beneficial stockholder, officer, director, employee, affiliate,
     associate or supplier of BAX or any of its Affiliates. The articles of
     incorporation of the Seller shall provide that: (i) the Seller's Board of
     Directors shall not approve, or take any other action to cause the filing
     of, a voluntary bankruptcy petition with respect to the Seller unless the
     Independent Director shall approve the taking of such action in writing
     before the taking of such action, and (ii) such provision cannot be amended
     without the prior written consent of the Independent Director;

          (d) The Independent Director shall not at any time serve as a trustee
     in bankruptcy for the Seller, BAX or any Affiliate thereof;

          (e) Any employee, consultant or agent of the Seller will be
     compensated from the Seller's funds for services provided to the Seller.
     The Seller will not engage any agents other than its attorneys, auditors
     and other professionals, and a servicer and any other agent contemplated by
     the Transaction Documents for the Receivables Pool, which servicer will be
     fully compensated for its services by payment of the Servicing Fee, and a
     manager, which manager will be fully compensated from the Seller's funds;

          (f) The Seller will contract with the Servicer to perform for the
     Seller all operations required on a daily basis to service the Receivables
     Pool. The Seller will pay the Servicer the Servicing Fee pursuant hereto.
     The Seller will not incur any material indirect or overhead expenses for
     items shared with BAX (or any other Affiliate thereof) that are not
     reflected in the Servicing Fee. To the extent, if any, that the Seller (or
     any Affiliate thereof) shares items of expenses not reflected in the
     Servicing Fee or the manager's fee, such as legal, auditing and other
     professional services, such expenses will be allocated to the extent
     practical on the basis of actual use or the value of services rendered, and
     otherwise on a basis reasonably related to the actual use or the value of
     services rendered; it being understood that BAX shall pay all expenses
     relating to the preparation, negotiation, execution and delivery of the
     Transaction Documents, including legal, rating agency and other fees;

          (g) The Seller's operating expenses will not be paid by BAX or any
     other Affiliate thereof;

          (h) All of the Seller's business correspondence and other
     communications shall be conducted in the Seller's own name and on its own
     separate stationery;

                                      IV-11

          (i) The Seller's books and records will be maintained separately from
     those of BAX and any other Affiliate thereof;

          (j) All financial statements of BAX or any Affiliate thereof that are
     consolidated to include Seller will contain a disclosure describing this
     transaction that will indicate that (i) all of the Seller's assets are
     owned by the Seller and (ii) the Seller is a separate entity with creditors
     who have interests in the Seller's assets.

          (k) The Seller's assets will be maintained in a manner that
     facilitates their identification and segregation from those of BAX or any
     Affiliate thereof;

          (l) The Seller will strictly observe corporate formalities in its
     dealings with BAX or any Affiliate thereof, and funds or other assets of
     the Seller will not be commingled with those of BAX or any Affiliate
     thereof except as permitted by the Agreement in connection with servicing
     the Pool Receivables. The Seller shall not maintain joint bank accounts or
     other depository accounts to which BAX or any Affiliate thereof (other than
     BAX in its capacity as the Servicer) has independent access. The Seller is
     not named, and has not entered into any agreement to be named, directly or
     indirectly, as a direct or contingent beneficiary or loss payee on any
     insurance policy with respect to any loss relating to the property of BAX
     or any Subsidiary or other Affiliate of BAX. The Seller will pay to the
     appropriate Affiliate the marginal increase or, in the absence of such
     increase, the market amount of its portion of the premium payable with
     respect to any insurance policy that covers the Seller and such Affiliate;
     and

          (m) The Seller will maintain arm's-length relationships with BAX (and
     any Affiliate thereof). Any Person that renders or otherwise furnishes
     services to the Seller will be compensated by the Seller at market rates
     for such services it renders or otherwise furnishes to the Seller. Neither
     the Seller nor BAX will be or will hold itself out to be responsible for
     the debts of the other or the decisions or actions respecting the daily
     business and affairs of the other. The Seller and BAX will immediately
     correct any known misrepresentation with respect to the foregoing, and they
     will not operate or purport to operate as an integrated single economic
     unit with respect to each other or in their dealing with any other entity.

          (n) BAX shall not pay the salaries of Seller's employees, if any.

                                      IV-12

                                    EXHIBIT V
                               TERMINATION EVENTS

     Each of the following shall be a "Termination Event":

     (a)(i) the Seller, any Originator or the Servicer shall fail to make when
due any payment or deposit to be made by it under the Agreement or (ii) except
as otherwise specifically provided in this Exhibit V, the Seller, any Originator
or the Servicer shall fail to perform or observe any other term, covenant or
agreement under the Agreement or any other Transaction Document and such failure
shall continue unremedied for a period of 30 days;

     (b) The Servicer shall fail to transfer to any successor Servicer when
required any rights pursuant to the Agreement that such Servicer then has as
Servicer;

     (c) any representation or warranty made or deemed made by the Seller, the
Servicer or any Originator (or any of their respective officers) under or in
connection with the Agreement or any other Transaction Document, or any
information or report delivered by any Responsible Officer of the Seller, the
Servicer or such Originator pursuant to the Agreement or any other Transaction
Document, shall prove to have been incorrect or untrue in any material respect
when made or deemed made or delivered;

     (d) the Seller or the Servicer shall fail to deliver the Monthly Report
pursuant to the Agreement, and such failure shall remain unremedied for five
days;

     (e) the Agreement or any purchase or reinvestment pursuant to the Agreement
shall for any reason: (i) cease to create, or the Purchased Interest shall for
any reason cease to be, a valid and enforceable perfected undivided percentage
ownership or security interest to the extent of the Purchased Interest in each
Pool Receivable, the Related Security and Collections with respect thereto, free
and clear of any Adverse Claim, or (ii) cease to create with respect to the Pool
Assets, or the interest of the Issuer with respect to such Pool Assets shall
cease to be, a valid and enforceable first priority perfected security interest,
free and clear of any Adverse Claim;

     (f) the Seller, the Servicer (and, if BAX is not then the Servicer, BAX) or
any Originator shall admit in writing its inability to pay its debts generally,
or shall make a general assignment for the benefit of creditors; or any
proceeding shall be instituted by or against the Seller, the Servicer (and if
BAX is not then the Servicer, BAX) or any Originator seeking to adjudicate it a
bankrupt or insolvent, or seeking liquidation, winding up,

                                      V-1

reorganization, arrangement, adjustment, protection, relief or composition of it
or its debts under any law relating to bankruptcy, insolvency or reorganization
or relief of debtors, or seeking the entry of an order for relief or the
appointment of a receiver, trustee, custodian or other similar official for it
or for any substantial part of its property and, in the case of any such
proceeding instituted against it (but not instituted by it), either such
proceeding shall remain undismissed or unstayed for a period of 60 days, or the
entry of an order granting the requested relief shall be entered; or the Seller,
the Servicer (and if BAX is not then the Servicer, BAX) or any Originator shall
take any corporate action to authorize any of the actions set forth above in
this paragraph;

     (g)(i)(A) the Default Ratio shall exceed 9%, (B) the Delinquency Ratio
shall exceed 14%, (C) the Dilution Ratio shall exceed 6% or (D) the
Loss-to-Liquidation Ratio shall exceed 1.5% or (ii) the average for three
consecutive calendar months of: (A) the Default Ratio shall exceed 7.5% or (B)
the Delinquency Ratio shall exceed 11%, (C) the Dilution Ratio shall exceed 4.5%
or (D) the Loss-to-Liquidation Ratio shall exceed 1.0%.

     (h) a Change in Control shall occur,

     (i) at any time, the Purchased Interest shall exceed 100%,

     (j) any acceleration of any of the obligations of The Pittston Company or
any of its subsidiaries arising under that certain Credit Agreement dated as of
October 3, 2000 (as amended, supplemented or otherwise modified from time to
time), among The Pittston Company, certain of its Subsidiaries, the lenders
named therein and Bank of America, National Association, as administrative
agent;

     (k) either: (i) a contribution failure shall occur with respect to any
Benefit Plan sufficient to give rise to a lien under Section 302(f) of ERISA,
(ii) the Internal Revenue Service shall file a notice of lien asserting a claim
pursuant to the Internal Revenue Code with regard to any of the assets of
Seller, any Originator, the Servicer (and, if BAX is not then the Servicer, BAX)
or any ERISA Affiliate, or (iii) the Pension Benefit Guaranty Corporation shall
file a notice of lien asserting a claim pursuant to ERISA with regard to any
assets of the Seller, such Originator, (and, if BAX is not then the Servicer,
BAX) or any ERISA Affiliate.

                                   V-2

                           PURCHASE AND SALE AGREEMENT

                          Dated as of December 15, 2000

                                      among

                          THE ORIGINATORS NAMED HEREIN

                             BAX FUNDING CORPORATION

                                       and

                                 BAX GLOBAL INC.
                             as the initial Servicer

                                TABLE OF CONTENTS

                                                                                                               PAGE
                                                                                                         
                                      ARTICLE I AGREEMENT TO PURCHASE AND SELL
1.1.  Agreement to Purchase and Sell..............................................................................2
1.2.  Timing of Purchases.........................................................................................3
1.3.  Consideration for Purchases.................................................................................3
1.4.  Purchase and Sale Termination Date..........................................................................3
1.5.  Intention of the Parties....................................................................................3

                                     ARTICLE II CALCULATION OF PURCHASE PRICE
2.1.  Calculation of Purchase Price...............................................................................4

                             ARTICLE III CONTRIBUTION OF RECEIVABLES;PAYMENT OF PURCHASE PRICE
3.1.  Contribution of Receivables.................................................................................5
3.2.  Initial Purchase Price Payment..............................................................................5
3.3.  Subsequent Purchase Price Payments..........................................................................5
3.4.  Settlement as to Specific Receivables.......................................................................5
3.5.  Reconveyance of Receivables.................................................................................7

                                              ARTICLE IV CONDITIONS OF PURCHASES
4.1.  Conditions Precedent to Initial Purchase....................................................................7
4.2.  Certification as to Representations and Warranties..........................................................9
4.3.  Addition of Originators.....................................................................................9

                                  ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE ORIGINATORS
5.1.  Organization and Good Standing.............................................................................10
5.2.  Due Qualification..........................................................................................10
5.3.  Power and Authority; Due Authorization.....................................................................10
5.4.  Valid Sale or Contribution; Binding Obligations............................................................10
5.5.  No Violation...............................................................................................10
5.6.  Proceedings................................................................................................11
5.7.  Bulk Sales Act.............................................................................................11
5.8.  Government Approvals.......................................................................................11
5.9.  Financial Condition........................................................................................11
5.10.  Margin Regulations........................................................................................11
5.11.  Quality of Title..........................................................................................12
5.12.  Accuracy of Information...................................................................................12
5.13.  Offices...................................................................................................12
5.14.  Trade Names...............................................................................................13
5.15.  Taxes.....................................................................................................13

                                       i

                                                                                                         
5.16.  Licenses and Labor Controversies..........................................................................13
5.17.  Compliance with Applicable Laws...........................................................................13
5.18.  Reliance on Separate Legal Identity.......................................................................13
5.19.  Purchase Price............................................................................................13

                                          ARTICLE VI COVENANTS OF THE ORIGINATORS
6.1.  Affirmative Covenants......................................................................................14
6.2.  Reporting Requirements.....................................................................................16
6.3.  Negative Covenants.........................................................................................16

                            ARTICLE VII ADDITIONAL RIGHTS AND OBLIGATIONS INRESPECT OF THE RECEIVABLES
7.1.  Rights of the Company......................................................................................18
7.2.  Responsibilities of Each Originator........................................................................18
7.3.  Further Action Evidencing Purchases........................................................................18
7.4.  Application of Collections.................................................................................19

                                    ARTICLE VIII PURCHASE AND SALE TERMINATION EVENTS
8.1.  Purchase and Sale Termination Events.......................................................................19
8.2.  Remedies...................................................................................................20

                                                      ARTICLE IX INDEMNIFICATION
9.1.  Indemnities by the Originators.............................................................................21

                                                        ARTICLE X MISCELLANEOUS
10.1.  Amendments, etc...........................................................................................22
10.2.  Notices, etc..............................................................................................23
10.3.  No Waiver; Cumulative Remedies............................................................................23
10.4.  Binding Effect; Assignability.............................................................................23
10.5.  Governing Law.............................................................................................23
10.6.  Costs, Expenses and Taxes.................................................................................23
10.7.  Submission to Jurisdiction................................................................................24
10.8.  Waiver of Jury Trial......................................................................................24
10.9.  Captions and Cross References; Incorporation by Reference.................................................24
10.10.  Execution in Counterparts................................................................................25
10.11.  Acknowledgment and Agreement.............................................................................25

                                       ii

                                    SCHEDULES

SCHEDULE 5.13  Office Locations

SCHEDULE 5.14  Trade Names

                                    EXHIBITS

EXHIBIT A                  Form of Purchase Report

EXHIBIT B                  Form of Company Note

EXHIBIT C                  Form of Joinder Agreement

                                       iii

                           PURCHASE AND SALE AGREEMENT

         THIS PURCHASE AND SALE AGREEMENT (as amended, supplemented or modified
from time to time, this "Agreement"), dated as of December 15, 2000, is among
BAX GLOBAL INC. ("BAX"), a Delaware corporation, as initial Servicer (in such
capacity, the "Servicer") and as an Originator (BAX, and together with each of
the other Person that from time to time becomes an Originator pursuant to
Section 4.3 hereof, collectively, the "Originators" and each, individually, an
"Originator") and BAX FUNDING CORPORATION, a California corporation (the
"Company"), as purchaser and contributee.

                                   Definitions

         Unless otherwise indicated, certain terms that are capitalized and used
throughout this Agreement are defined in Exhibit I to the Receivables Purchase
Agreement of even date herewith (as amended, supplemented or otherwise modified
from time to time, the "Receivables Purchase Agreement"), among the Company,
BAX, as initial Servicer, LIBERTY STREET FUNDING CORP. (the "Issuer"), and THE
BANK OF NOVA SCOTIA, as Administrator (together with its successors and assigns,
the "Administrator").

                                   Background

         1. The Company is a special purpose corporation, all of the capital
stock of which is wholly-owned by BAX.

         2. In order to finance their respective businesses, the Originators
wish to sell certain Receivables and Related Rights from time to time to the
Company, and the Company is willing, on the terms and subject to the conditions
set forth herein, to purchase such Receivables and Related Rights from such
Originators.

         3. The Company intends to sell to Issuer an undivided variable
percentage interest in its Receivables and Related Rights pursuant to the
Receivables Purchase Agreement in order to finance its purchases of certain
Receivables and Related Rights hereunder.

         NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein contained, the parties hereto agree as follows:

                                    ARTICLE I

                         AGREEMENT TO PURCHASE AND SELL

         1.1. Agreement to Purchase and Sell. On the terms and subject to the
conditions set forth in this Agreement (including Article IV), and in
consideration of the Purchase Price, each Originator agrees to sell to the
Company, and does hereby sell to the Company, and the Company agrees to purchase
from such Originator, and does hereby purchase from such Originator, without
recourse and without regard to collectibility, all of such Originator's right,
title and interest in and to:

                  (a) each Receivable of such Originator that existed and was
         owing to such Originator as of the close of such Originator's business
         on December 15, 2000 (the "Closing Date") (other than the Receivables
         and Related Rights contributed by BAX to the Company pursuant to
         Section 3.1 (the "Contributed Receivables"));

                  (b) each Receivable created or originated by such Originator
         from the close of such Originator's business on the Closing Date to and
         including the Purchase and Sale Termination Date;

                  (c) all rights to, but not the obligations under, all Related
         Security;

                  (d) all monies due or to become due with respect to any of the
         foregoing;

                  (e) all books and records related to any of the foregoing; and

                  (f) all proceeds thereof (as defined in the applicable UCC)
         received on or after the date hereof including, without limitation, all
         funds which either are received by such Originator, the Company or the
         Servicer from or on behalf of the Obligors in payment of any amounts
         owed (including, without limitation, finance charges, interest and all
         other charges) in respect of Receivables, or are applied to such
         amounts owed by the Obligors (including, without limitation, insurance
         payments, if any, that such Originator or the Servicer (if other than
         Originator) applies in the ordinary course of its business to amounts
         owed in respect of any Receivable).

All purchases and contributions hereunder shall be made without recourse, but
shall be made pursuant to and in reliance upon the representations, warranties
and covenants of each Originator set forth in this Agreement and each other
Transaction Document. The Company's foregoing commitment to purchase such
Receivables and the proceeds and rights described in subsections (c) through (f)
of this Section 1.1 (collectively, the "Related Rights") is herein called the
"Purchase Facility."

                                       2

         1.2.  Timing of Purchases.

         (a) Closing Date Purchases. Each Originator's entire right, title and
interest in (i) each Receivable that existed and was owing to Originator as of
the close of such Originator's business on the Closing Date, (other than the
Contributed Receivables), and (ii) all Related Rights with respect thereto shall
be deemed to have been sold to the Company on the Closing Date.

         (b) Regular Purchases. After the Closing Date, each Receivable created
or originated by each Originator and described in Section 1.1(b) hereof and all
Related Rights shall be purchased and owned by the Company (without any further
action) upon the creation or origination of such Receivable.

         (c) Foreign Receivables. Notwithstanding anything in this Agreement to
the contrary, no Receivable, the Obligor of which is a resident of a
jurisdiction other than the United States, Canada or Mexico, shall be sold,
transferred or otherwise assigned by any Originator to the Company hereunder
unless and until Company shall have notified such Originator in writing that
such Receivable is acceptable for purchase hereunder.

         1.3. Consideration for Purchases. On the terms and subject to the
conditions set forth in this Agreement, the Company agrees to make all Purchase
Price payments to the respective Originators, and to reflect all contributions,
in accordance with Article III.

         1.4. Purchase and Sale Termination Date. The "Purchase and Sale
Termination Date" shall be the earlier to occur of (a) the date of the
termination of this Agreement pursuant to Section 8.2 and (b) the Payment Date
immediately following the day on which the Servicer shall have given notice to
the Company that the Originators desire to terminate this Agreement.

         As used herein, "Payment Date" means (i) the Closing Date and (ii) each
Business Day thereafter that the Originators are open for business.

         1.5. Intention of the Parties. It is the express intent of the parties
hereto that the transfers of the Receivables and Related Rights by each
Originator to the Company, as contemplated by this Agreement be, and be treated
as, sales or contributions, as applicable, and not as loans secured by the
Receivables and Related Rights. If, however, notwithstanding the intent of the
parties, such transfers are deemed to be loans, such Originator hereby grants to
the Company a first priority security interest in all of such Originator's
right, title and interest in and to the Receivables and the Related Rights now
existing and hereafter created, all monies due or to become due and all amounts
received with respect thereto, and all proceeds thereof, to secure all of such
Originator's obligations hereunder.

                                       3

                                   ARTICLE II

                          CALCULATION OF PURCHASE PRICE

         2.1. Calculation of Purchase Price. On the tenth Business Day after
the last day of each calendar month (the "Servicer Report Date"), the Servicer
shall deliver to the Company, the Administrator and each Originator a report in
substantially the form of Exhibit A (each such report being herein called a
"Purchase Report") with respect to the matters set forth therein and the
Company's purchases of Receivables from each Originator

                  (a) that are to be made on the Closing Date (in the case of
         the Purchase Report to be delivered on the Closing Date), or

                  (b) that were made during the period commencing on the
         Servicer Report Date immediately preceding such Servicer Report Date to
         (but not including) such Servicer Report Date (in the case of each
         subsequent Purchase Report).

The "Purchase Price" (to be paid to each Originator in accordance with the terms
of Article III) for the Receivables and the Related Rights that are purchased
hereunder shall be determined in accordance with the following formula:

         PP       =        OB X FMVD

         where:

         PP       =       Purchase Price for each Receivable as calculated on
                          the relevant Payment Date.

         OB       =       the Outstanding Balance of such Receivable.

         FMVD     =       Fair Market Value Discount, as measured on such
                              Payment Date, which is equal to the quotient
                              (expressed as percentage) of (a) one divided by
                              (b) the sum of (i) one, plus (ii) the product of
                              (A) the Prime Rate on such Payment Date, and (B) a
                              fraction, the numerator of which is the Days'
                              Sales Outstanding (calculated as of the last day
                              of the calendar month next preceding such Payment
                              Date) and the denominator of which is 365.

         "Prime Rate" means a per annum rate equal to the "prime rate" as
published in the "Money Rates" section of The Wall Street Journal or such other
publication as determined by the Administrator in its sole discretion.

                                       4

                                   ARTICLE III

                          CONTRIBUTION OF RECEIVABLES;
                            PAYMENT OF PURCHASE PRICE

         3.1. Contribution of Receivables. On the Closing Date, BAX shall, and
hereby does, contribute to the capital of the Company, Receivables and Related
Rights with respect thereto consisting of each Receivable of BAX that existed
and was owing to BAX on the Closing Date, beginning with the oldest of such
Receivables and continuing chronologically thereafter, and all or an undivided
interest in the most recent of such contributed Receivables such that the
aggregate Outstanding Balance of all such contributed Receivables shall be equal
to $1,500,000.

         3.2. Initial Purchase Price Payment. On the terms and subject to the
conditions set forth in this Agreement, the Company agrees to pay to each
Originator the Purchase Price for the purchase of Receivables to be made on the
Closing Date (other than Contributed Receivables), partially in cash in the
amount of the proceeds of the purchase made by the Issuer on the Closing Date
under the Receivables Purchase Agreement, and partially by issuing a promissory
note in the form of Exhibit B to such Originator with an initial principal
balance equal to the remaining Purchase Price (as each such promissory note may
be amended, supplemented, indorsed or otherwise modified from time to time,
together with all promissory notes issued from time to time in substitution
therefor or renewal thereof in accordance with the Transaction Documents, being
herein called the "Company Note").

         3.3. Subsequent Purchase Price Payments. On each Business Day falling
after the Closing Date and on or prior to the Purchase and Sale Termination
Date, on the terms and subject to the conditions set forth in this Agreement,
the Company shall pay to each Originator the Purchase Price for the Receivables
sold by such Originator to the Company on such Business Day, in cash, to the
extent provided under the terms of the Receivables Purchase Agreement, and to
the extent any of such Purchase Price remains unpaid, such remaining portion of
such Purchase Price shall be paid by means of an automatic increase to the
outstanding principal amount of the Company Note issued to such Originator.

         Servicer shall make all appropriate record keeping entries with respect
to the Company Notes or otherwise to reflect the foregoing payments and to
reflect adjustments pursuant to Section 3.4, and Servicer's books and records
shall constitute rebuttable presumptive evidence of the principal amount of and
accrued interest on any Company Note at any time. Furthermore, Servicer shall
hold the Company Notes for the benefit of the Originators, and all payments
under the Company Notes shall be made to the Servicer for the account of the
applicable payee thereof. Each Originator hereby irrevocably authorizes Servicer
to mark the Company Notes "CANCELLED" and to return such Company Notes to the
Company upon the final payment thereof after the occurrence of the Purchase and
Sale Termination Date.

         3.4.  Settlement as to Specific Receivables and Dilution.

                                       5

         (a) If on the day of purchase or contribution of any Receivable from
any Originator hereunder, any of the representations or warranties set forth in
Section 5.4 or 5.11 of such Originator is not true with respect to such
Receivable or as a result of any action or inaction of such Originator, on any
day any of such representations or warranties set forth in Section 5.4 or 5.11
is no longer true with respect to such a Receivable (other than a representation
or warranty set forth in Section 5.11(c) which is no longer true as a result of
an Obligor's payment obligation being discharged in bankruptcy), then the
Purchase Price (or in the case of a Contributed Receivable, the Outstanding
Balance of such Receivable (the "Contributed Value")) with respect to such
Receivables shall be reduced by an amount equal to the Outstanding Balance of
such Receivable and shall be accounted to such Originator as provided in
subsection (c) below; provided, that if the Company thereafter receives payment
on account of Collections due with respect to such Receivable, the Company
promptly shall deliver such funds to such Originator.

         (b) If, on any day, the Outstanding Balance of any Receivable
(including any Contributed Receivable) purchased (or contributed) hereunder is
reduced or adjusted as a result of any defective, rejected, returned goods or
services, or any discount or other adjustment made by any Originator, the
Company or the Servicer or any offset, setoff or dispute between such Originator
or the Servicer and an Obligor as indicated on the books of the Company (or, for
periods prior to the Closing Date, the books of such Originator), then the
Purchase Price or the Contributed Value, as the case may be, with respect to
such Receivable shall be reduced by the amount of such net reduction and shall
be accounted to Originator as provided in subsection (c) below.

         (c) Any reduction in the Purchase Price (or Contributed Value) of any
Receivable pursuant to subsection (a) or (b) above shall be applied as a credit
for the account of the Company against the Purchase Price of Receivables
subsequently purchased by the Company from such Originator hereunder; provided,
however if there are no purchases of Receivables from such Originator (or
insufficiently large purchases of Receivables) to create a Purchase Price
sufficient to so apply such credit against, the amount of such credit

                  (i) shall be paid in cash to the Company by such Originator in
         the manner and for application as described in the following proviso,
         or

                  (ii) shall be deemed to be a payment under, and shall be
         deducted from the principal amount outstanding under, the Company Note
         payable to such Originator to the extent permitted under Section 1(m)
         of Exhibit IV of the Receivables Purchase Agreement;

provided, further, that at any time (x) when a Termination Event or Unmatured
Termination Event exists under the Receivables Purchase Agreement or (y) on or
after the Purchase and Sale Termination Date, the amount of any such credit
shall be paid by such Originator to the Company by deposit in immediately
available funds into the Collection Account for application by Servicer
to the same extent as if Collections of the applicable Receivable in such amount
had actually been received on such date.

                                       6

         (d) Each Purchase Report (other than the Purchase Report delivered on
the Closing Date) shall include, in respect of the Receivables previously
generated by each Originator (including the Contributed Receivables), a
calculation of the aggregate reductions described in subsection (a) or (b)
relating to such Receivables since the last Purchase Report delivered hereunder,
as indicated on the books of the Company (or, for such period prior to the
Closing Date, the books of the Originators).

         3.5. Reconveyance of Receivables. In the event that an Originator has
paid to the Company the full Outstanding Balance of any Receivable pursuant to
Section 3.4, the Company shall reconvey such Receivable to such Originator,
without representation or warranty, but free and clear of all liens created by
the Company.

                                   ARTICLE IV

                             CONDITIONS OF PURCHASES

         4.1. Conditions Precedent to Initial Purchase. The initial purchase
hereunder is subject to the condition precedent that the Company shall have
received, on or before the Closing Date, the following, each (unless otherwise
indicated) dated the Closing Date, and each in form, substance and date
satisfactory to the Company:

                  (a) A copy of the resolutions of the Board of Directors of
         each Originator approving the Transaction Documents to be delivered by
         it and the transactions contemplated hereby and thereby, certified by
         the Secretary or Assistant Secretary of such Originator;

                  (b) Good standing certificates for each Originator issued as
         of a recent date acceptable to Servicer by the Secretary of State of
         the jurisdiction of such Originator's incorporation and the
         jurisdiction where such Originator's chief executive office is located;

                  (c) A certificate of the Secretary or Assistant Secretary of
         each Originator certifying the names and true signatures of the
         officers authorized on such Originator's behalf to sign the Transaction
         Documents to be delivered by it (on which certificate the Company and
         Servicer (if other than such Originator) may conclusively rely until
         such time as the Company and the Servicer shall receive from Originator
         a revised certificate meeting the requirements of this subsection (c));

                  (d) The articles of incorporation of each Originator, duly
         certified by the Secretary of State of the jurisdiction of such
         Originator's incorporation as of a recent date acceptable to Servicer,
         together with a copy of the by-laws of such Originator, each duly
         certified by the Secretary or an Assistant Secretary of such
         Originator;

                                       7

                  (e) Copies of the proper financing statements (Form UCC-1)
         that have been duly executed and name each Originator as the
         debtor/seller and the Company as the secured party/purchaser (and
         Issuer as assignee of the Company) of the Receivables generated by such
         Originator and Related Rights or other, similar instruments or
         documents, as may be necessary or, in Servicer's or the Administrator's
         opinion, desirable under the UCC of all appropriate jurisdictions or
         any comparable law of all appropriate jurisdictions to perfect the
         Company's ownership interest in all Receivables and Related Rights in
         which an ownership interest may be assigned to it hereunder;

                  (f) A written search report from a Person satisfactory to
         Servicer and the Administrator listing all effective financing
         statements that name any Originator as debtor or assignor and that are
         filed in the jurisdictions in which filings were made pursuant to the
         foregoing subsection (e), together with copies of such financing
         statements (none of which, except for those described in the foregoing
         subsection (e), shall cover any Receivable or any Related Right), and
         tax and judgment lien search reports from a Person satisfactory to
         Servicer and the Administrator showing no evidence of any liens filed
         against any Originator with respect to the Receivables or Related
         Rights;

                  (g) Favorable opinions of general counsel to the Originators,
         in form and substance satisfactory to the Company and the
         Administrator;

                  (h) Evidence (i) of the execution and delivery by each of the
         parties thereto of each of the other Transaction Documents to be
         executed and delivered in connection herewith and (ii) that each of the
         conditions precedent to the execution, delivery and effectiveness of
         such other Transaction Documents has been satisfied to the Company's
         satisfaction; and

                  (i) A certificate from an officer of each Originator to the
         effect that Servicer and Originator have placed on the most recent, and
         have taken all steps reasonably necessary to ensure that there shall be
         placed on subsequent, summary master control data processing reports
         the following legend (or the substantive equivalent thereof): "THE
         RECEIVABLES DESCRIBED HEREIN HAVE BEEN SOLD TO BAX FUNDING CORPORATION
         PURSUANT TO A PURCHASE AND SALE AGREEMENT, DATED AS OF DECEMBER 15,
         2000, AMONG BAX GLOBAL INC., THE ORIGINATORS NAMED THEREIN AND BAX
         FUNDING CORPORATION; AND AN INTEREST IN THE RECEIVABLES DESCRIBED
         HEREIN HAS BEEN GRANTED TO LIBERTY STREET FUNDING CORP., PURSUANT TO A
         RECEIVABLES PURCHASE AGREEMENT, DATED AS OF DECEMBER 15, 2000, AMONG
         BAX GLOBAL INC., BAX FUNDING CORPORATION, LIBERTY STREET FUNDING CORP.,
         AND THE BANK OF NOVA SCOTIA, AS ADMINISTRATOR."

         4.2. Certification as to Representations and Warranties. Each
Originator, by accepting the Purchase Price related to each purchase of
Receivables (and Related Rights) generated by

                                       8

such Originator, shall be deemed to have certified that the representations and
warranties contained in Article V are true and correct on and as of such day,
with the same effect as though made on and as of such day.

         4.3. Addition of Originators. Additional Persons may be added as
Originators hereunder, with the consent of the Company and the Administrator;
provided that the following conditions are satisfied on or before the date of
such addition:

                  (i) The Servicer shall have given the Administrator and the
         Company at least thirty (30) days prior written notice of such proposed
         addition and the identity of the proposed additional Originator and
         shall have provided such information with respect to the receivables of
         such additional Originator as the Administrator shall have reasonably
         requested;

                  (ii) such proposed additional Originator has executed and
         delivered to the Company and the Administrator an agreement
         substantially in the form attached hereto as Exhibit C (each, a
         "Joinder Agreement");

                  (iii) such proposed additional Originator has delivered to the
         Company and the Administrator each of the documents with respect to
         such Originator described in Section 4.1;

                  (iv) unless the receivables intended to be sold by such
         Originator to the Company hereunder are Receivables, the related
         underlying goods of which, are and will continue to be generated by an
         already existing Originator, the Administrator shall have received a
         written statement from each of Moody's and Standard & Poor's confirming
         that the addition of such Originator will not result in a downgrade or
         withdrawal of the current ratings of the Notes; and

                  (v) the Purchase and Sale Termination Date shall not have
         occurred.

                                    ARTICLE V

                REPRESENTATIONS AND WARRANTIES OF THE ORIGINATORS

         In order to induce the Company to enter into this Agreement and to make
purchases and accept contributions hereunder, each Originator, hereby makes with
respect to itself the representations and warranties set forth in this Article
V.

         5.1. Organization and Good Standing. Such Originator has been duly
incorporated and is validly existing as a corporation in good standing under the
laws of the state of its incorporation, with power and authority to own its
properties and to conduct its business as such properties are presently owned
and such business is presently conducted.

                                       9

         5.2. Due Qualification. Such Originator is duly licensed or qualified
to do business as a foreign corporation in good standing in the jurisdiction
where its chief executive office and principal place of business are located and
in all other jurisdictions in which (a) the ownership or lease of its property
or the conduct of its business requires such licensing or qualification and (b)
the failure to be so licensed or qualified would not have a Material Adverse
Effect.

         5.3. Power and Authority; Due Authorization. Such Originator has (a)
all necessary corporate power, authority and legal right (i) to execute and
deliver, and perform its obligations under, each Transaction Document to which
it is a party, and (ii) to generate, own, sell, contribute and assign
Receivables and Related Rights on the terms and subject to the conditions herein
and therein provided; and (b) duly authorized such execution and delivery and
such sale, contribution and assignment and the performance of such obligations
by all necessary corporate action.

         5.4. Valid Sale or Contribution; Binding Obligations. Each sale or
contribution, as the case may be, of Receivables and Related Rights made by such
Originator pursuant to this Agreement shall constitute a valid sale or
contribution, as the case may be, transfer, and assignment thereof to the
Company, enforceable against creditors of, and purchasers from, such Originator;
and this Agreement constitutes, and each other Transaction Document to be signed
by such Originator, when duly executed and delivered, will constitute, a legal,
valid, and binding obligation of such Originator, enforceable in accordance with
its terms, except as enforceability may be limited by bankruptcy, insolvency,
reorganization, or other similar laws affecting the enforcement of creditors'
rights generally and by general principles of equity, regardless of whether such
enforceability is considered in a proceeding in equity or at law.

         5.5. No Violation. The consummation of the transactions contemplated by
this Agreement and the other Transaction Documents and the fulfillment of the
terms hereof or thereof will not (a) conflict with, result in any breach of any
of the terms and provisions of, or constitute (with or without notice or lapse
of time or both) a default under (i) such Originator's certificate of
incorporation or by-laws, or (ii) any material indenture, loan agreement,
mortgage, deed of trust, or other material agreement or instrument to which it
is a party or by which it is bound, (b) result in the creation or imposition of
any Adverse Claim upon any of its properties pursuant to the terms of any such
material indenture, loan agreement, mortgage, deed of trust, or other material
agreement or instrument, other than the Transaction Documents, or (c) violate
any law or any order, rule, or regulation applicable to it of any court or of
any federal, state or foreign regulatory body, administrative agency, or other
governmental instrumentality having jurisdiction over it or any of its
properties.

         5.6. Proceedings. There is no litigation or, to such Originator's
knowledge, any proceeding or investigation pending before any court, regulatory
body, arbitrator, administrative agency, or other tribunal or governmental
instrumentality (a) asserting the invalidity of any Transaction Document, (b)
seeking to prevent the sale or contribution of Receivables and Related Rights to
the Company or the consummation of any of the other transactions

                                       10

contemplated by any Transaction Document, or (c) seeking any determination or
ruling that would have a Material Adverse Effect.

         5.7. Bulk Sales Act. No transaction contemplated hereby requires
compliance with any bulk sales act or similar law.

         5.8. Government Approvals. Except for the filing of the UCC financing
statements referred to in Article IV, all of which, at the time required in
Article IV, shall have been duly made and shall be in full force and effect, no
authorization or approval or other action by, and no notice to or filing with,
any governmental authority or regulatory body is required for such Originator's
due execution, delivery and performance of any Transaction Document to which it
is a party, as seller.

         5.9. Financial Condition.

         (a) On the date hereof, and on the date of each sale of Receivables by
each Originator to the Company (both before and after giving effect to such
sale), such Originator shall be Solvent.

         (b) The unaudited consolidated balance sheets of BAX and its
subsidiaries as of December 31, 1999 and the related statements of operations
and cash flows for the fiscal year then ended, copies of which have been
furnished to the Company, present fairly the consolidated financial position of
BAX and its subsidiaries at such date and the consolidated results of their
operations for the period ended on such date, all in accordance with generally
accepted accounting principles consistently applied; and since such date no
event has occurred that has had, or would have, a Material Adverse Effect.

         5.10. Margin Regulations. No use of any funds acquired by such
Originator under this Agreement will conflict with or contravene any of
Regulations T, U and X promulgated by the Board of Governors of the Federal
Reserve System from time to time.

         5.11. Quality of Title.

         (a) Each Receivable (together with the Related Rights) which is to be
sold or contributed to the Company hereunder is or shall be owned by such
Originator, free and clear of any Adverse Claim (other than any Adverse Claim
arising solely as a result of any action taken by the Company). Whenever the
Company makes a purchase, or accepts a contribution, hereunder, it shall have
acquired a valid and perfected ownership interest (free and clear of any Adverse
Claim) in all Receivables generated by such Originator and all Collections
related thereto, and in such Originator's entire right, title and interest in
and to the other Related Rights with respect thereto.

         (b) No effective financing statement or other instrument similar in
effect covering any Receivable generated by such Originator or any right related
to any such Receivable is on

                                       11

file in any recording office except such as may be filed in favor of the
Company or the Originators, as the case may be, in accordance with this
Agreement or in favor of the Issuer in accordance with the Receivables
Purchase Agreement.

         (c) Each Receivable purchased or contributed hereunder and included in
the Net Receivables Pool Balance was, on the date of purchase or contribution,
an Eligible Receivable.

         5.12. Accuracy of Information. No factual written information furnished
or to be furnished in writing by a Responsible Officer of such Originator, to
the Company, the Issuer or the Administrator for purposes of or in connection
with any Transaction Document or any transaction contemplated hereby or thereby
is, and no other such factual written information hereafter furnished (and
prepared) by a Responsible Officer of such Originator, to the Company, the
Issuer, or the Administrator pursuant to or in connection with any Transaction
Document, taken as a whole, will be inaccurate in any material respect as of the
date it was furnished or (except as otherwise disclosed to the Company at or
prior to such time) as of the date as of which such information is dated or
certified, or shall contain any material misstatement of fact or omitted or will
omit to state any material fact necessary to make such information, in the light
of the circumstances under which any statement therein was made, not materially
misleading on the date as of which such information is dated or certified.

         5.13. Offices. Such Originator's principal place of business and chief
executive office is located at the address set forth under such Originator's
signature hereto (or in the Joinder Agreement pursuant to which such Originator
becomes a party hereto, as an Originator), and the offices where such Originator
keeps all its books, records and documents evidencing the Receivables, the
related Contracts and all other agreements related to such Receivables are
located at the addresses specified on Schedule 5.13 (or at such other locations,
notified to Servicer and the Administrator in accordance with Section 6.1(f), in
jurisdictions where all action required by Section 7.3 has been taken and
completed).

         5.14. Trade Names. Except as disclosed on Schedule 5.14, such
Originator does not use any trade name other than its actual corporate name.
From and after the date that fell five (5) years before the date hereof, such
Originator has not been known by any legal name other than its corporate name as
of the date hereof, nor has such Originator been the subject of any merger or
other corporate reorganization except as disclosed on Schedule 5.14.

         5.15. Taxes. Such Originator has filed all material tax returns and
reports required by law to have been filed by it and has paid all taxes and
governmental charges thereby shown to be owing, except any such taxes which are
not yet delinquent or are being diligently contested in good faith by
appropriate proceedings and for which adequate reserves in accordance with GAAP
shall have been set aside on its books.

         5.16. Licenses and Labor Controversies.

                                       12

         (a) Such Originator has not failed to obtain any licenses, permits,
franchises or other governmental authorizations necessary to the ownership of
its properties or to the conduct of its business, which violation or failure to
obtain would have a Material Adverse Effect; and

         (b) There are no labor controversies pending against such Originator
that have had (or would have) a Material Adverse Effect.

         5.17. Compliance with Applicable Laws. Such Originator is in
compliance, in all material respects, with the requirements of (i) all
applicable laws, rules, regulations, and orders of all governmental authorities
(including, without limitation, laws, rules and regulations relating to usury,
truth in lending, fair credit billing, fair credit reporting, equal credit
opportunity, fair debt collection practices and privacy and all other consumer
laws applicable to the Receivables and related Contracts) which would have a
Material Adverse Effect (excluding with respect to environmental matters which
are covered by clause (ii)), and (ii) to the best of its knowledge, all
applicable environmental laws, rules, regulations and orders of all governmental
authorities which would have a Material Adverse Effect.

         5.18. Reliance on Separate Legal Identity. Such Originator is aware
that Issuer and the Administrator are entering into the Transaction Documents to
which they are parties in reliance upon the Company's identity as a legal entity
separate from any Originator.

         5.19. Purchase Price. The purchase price payable by the Company to such
Originator hereunder is intended by such Originator and Company to be consistent
with the terms that would be obtained in an arm's length sale.

                                   ARTICLE VI

                          COVENANTS OF THE ORIGINATORS

         6.1. Affirmative Covenants. From the date hereof until the first day
following the Purchase and Sale Termination Date, each Originator will, unless
the Company and the Administrator shall otherwise consent in writing:

         (a) Compliance with Laws, Etc. Comply in all material respects with all
applicable laws, rules, regulations and orders, including those with respect to
the Receivables generated by it and the related Contracts and other agreements
related thereto, except to the extent that failure to comply with such laws,
rules and regulations would not have a Material Adverse Effect.

         (b) Preservation of Corporate Existence. Preserve and maintain its
corporate existence, rights, franchises and privileges in the jurisdiction of
its incorporation, and qualify and remain qualified in good standing as a
foreign corporation in each jurisdiction where the failure to preserve and
maintain such existence, rights, franchises, privileges and qualification could
would have a Material Adverse Effect.

                                       13

         (c) Receivables Review. (i) At any time and from time to time (but, (a)
prior to the occurrence of a Purchase and Sale Termination Event or Unmatured
Purchase and Sale Termination Event or (b) unless, in the opinion of the
Administrator reasonable grounds for insecurity exist with respect to the
collectibility of the Receivables or such Originator's performance or ability to
perform its obligations under this Agreement, no more frequently than annually)
during regular business hours, upon reasonable prior notice, permit the Company
and/or the Administrator, or their respective agents or representatives, (A) to
examine, to audit and make copies of and abstracts from all books, records and
documents (including, without limitation, computer tapes and disks) in the
possession or under the control of such Originator relating to the Receivables
and Related Rights, including, without limitation, the Contracts and other
agreements related thereto, and (B) to visit such Originator's offices and
properties for the purpose of examining such materials described in the
foregoing clause (A) and discussing matters relating to the Receivables and
Related Rights or such Originator's performance hereunder with any of the
officers or employees of such Originator having knowledge of such matters; and
(ii) without limiting the provisions of clause (i) next above, from time to time
during regular business hours, upon five (5) Business Days prior written notice
from the Administrator, permit certified public accountants or other auditors
acceptable to the Administrator to conduct a review of its books and records
with respect to the Receivables and Related Rights. Each of the parties hereto
hereby agrees that (x) in the absence of a Termination Event or an Unmatured
Termination Event, audits, of the type described in clause (ii) of this
paragraph (c), shall be conducted only as reasonably necessary, as determined in
the sole discretion of the Administrator, and all reasonable costs and expenses
of any such audit, examination or review performed or otherwise prepared
pursuant to this paragraph (c) shall be paid by such Originator and (y) each
party receiving information with respect to this paragraph (c) shall be subject
to the standard of confidentiality provided for such information as set forth in
Section 5.13 of the Receivables Purchase Agreement.

         (d) Keeping of Records and Books of Account. Maintain an ability to
recreate records evidencing the Receivables in the event of the destruction of
the originals thereof.

         (e) Performance and Compliance with Receivables and Contracts. At its
expense timely and fully perform and comply with all provisions, covenants and
other promises required to be observed by it under the related Contracts and all
other agreements related to the Receivables and Related Rights.

         (f) Location of Records. Keep its principal place of business and chief
executive office, and the offices where it keeps its records concerning or
related to Receivables and Related Rights, at the address(es) referred to in
Schedule 5.13 or, upon 30 days' prior written notice to the Company and the
Administrator, at such other locations in jurisdictions where all action
required by Section 7.3 shall have been taken and completed.

         (g) Credit and Collection Policies. Comply in all material respects
with its Credit and Collection Policy in connection with the Receivables and the
related Contracts.

                                       14

         (h) Separate Corporate Existence of the Company. Take such actions as
shall be required in order that:

                  (i) the Company's operating expenses (other than certain
         organization expenses and expenses incurred in connection with the
         preparation, negotiation and delivery of the Transaction Documents)
         will not be paid by such Originator;

                  (ii) the Company's books and records will be maintained
         separately from those of such Originator;

                  (iii) all financial statements of such Originator that are
         consolidated to include the Company will contain a disclosure
         describing this transaction and that will indicate that (A) all of the
         Company's assets are owned by the Company, and (B) the Company is a
         separate entity with creditors who have received interests in the
         Company's assets;

                  (iv) such Originator will strictly observe corporate
         formalities in its dealing with the Company;

                  (v) except as otherwise provided in the Receivables Purchase
         Agreement in connection with the servicing of Receivables, such
         Originator shall not commingle its funds with any funds of the Company;

                  (vi) such Originator will maintain arm's length relationships
         with the Company, and such Originator will be compensated at market
         rates for any services it renders or otherwise furnishes to the
         Company; and

                  (vii) such Originator will not be, and will not hold itself
         out to be, responsible for the debts of the Company or the decisions or
         actions in respect of the daily business and affairs of the Company.

         (i) Post Office Boxes. Within 30 days after the date hereof, deliver to
the Administrator a certificate from an authorized officer of such Originator to
the effect that (i) the name of the renter of all post office boxes into which
Collections may from time to time be mailed have been changed to the name of the
Company (unless such post office boxes are in the name of the relevant Lock-Box
Banks) and (ii) all relevant postmasters have been notified that each of
Servicer and the Administrator are authorized to collect mail delivered to such
post office boxes (unless such post office boxes are in the name of the relevant
Lock-Box Banks).

         6.2. Reporting Requirements. From the date hereof until the first day
following the Purchase and Sale Termination Date, each Originator shall, unless
the Administrator and the Company shall otherwise consent in writing, furnish to
the Company and the Administrator:

                  (a) Proceedings. Promptly after such Originator has knowledge
         thereof, written notice to the Company and the Administrator of (i) all
         pending proceedings and

                                       15

         investigations of the type described in Section 5.6 not previously
         disclosed to the Company and/or the Administrator and (ii) all
         material adverse developments that have occurred with respect to any
         previously disclosed proceedings and investigations.

                  (b) Other. Promptly, from time to time, such other
         information, documents, records or reports respecting the Receivables,
         the Related Rights or such Originator's performance hereunder that the
         Company or the Administrator may from time to time reasonably request
         in order to protect the interests of the Company, the Issuer, the
         Administrator or any other Affected Person under or as contemplated by
         the Transaction Documents.

         6.3. Negative Covenants. From the date hereof until the date following
the Purchase and Sale Termination Date, each Originator agrees that, unless the
Administrator and the Company shall otherwise consent in writing (which consent
shall not be unreasonably withheld), it shall not:

                  (a) Sales, Liens, Etc. Except as otherwise provided herein or
         in any other Transaction Document, sell, assign (by operation of law or
         otherwise) or otherwise dispose of, or create or suffer to exist any
         Adverse Claim upon or with respect to, any Receivable or related
         Contract, Collections or Related Security, or any interest therein, or
         assign any right to receive income in respect thereof.

                  (b) Extension or Amendment of Receivables. Except as otherwise
         permitted in Section 4.2(a) of the Receivables Purchase Agreement or in
         accordance with the Credit and Collection Policy, extend, amend or
         otherwise modify the terms of any Receivable in any material respect,
         or amend, modify or waive, in any material respect, any term or
         condition of any Contract related thereto (which term or condition
         relates to payments under, or the enforcement of, such Contract).

                  (c) Change in Business or Credit and Collection Policy. Make
         any change in the character of its business or materially alter its
         Credit and Collection Policy, which change would, in either case,
         materially change the credit standing required of particular Obligors
         or potential Obligors or which would have a Material Adverse Effect on
         the collectibility of the Receivables generated by it.

                  (d) Receivables Not to be Evidenced by Promissory Notes or
         Chattel Paper. Take any action to cause or permit any Receivable
         generated by it to become evidenced by any "instrument" or "chattel
         paper" (as defined in the applicable UCC) unless such "instrument" or
         "chattel paper" shall be delivered to the Company (which in turn shall
         deliver the same to the Issuer (or the Administrator on its behalf)).

                  (e) Mergers, Acquisitions, Sales, etc. Merge or consolidate
         with another Person (except pursuant to a merger or consolidation
         involving such Originator where such Originator is the surviving
         corporation), or convey, transfer, lease or otherwise

                                       16

         dispose of (whether in one or in a series of transactions), all or
         substantially all of its assets (whether now owned or hereafter
         acquired), other than pursuant to this Agreement.

                  (f) Lock-Box Banks. Make any changes in its instructions to
         Obligors regarding Collections or add or terminate any Lock-Box Bank
         unless the requirements of Section 1(i) of Exhibit IV to the
         Receivables Purchase Agreement have been met.

                  (g) Accounting for Purchases. Account for or treat (whether in
         financial statements or otherwise) the transactions contemplated hereby
         in any manner other than as sales of the Receivables and Related
         Security by such Originator to the Company.

                  (h) Transaction Documents. Enter into, execute, deliver or
         otherwise become bound by any agreement, instrument, document or other
         arrangement that restricts the right of such Originator to amend,
         supplement, amend and restate or otherwise modify, or to extend or
         renew, or to waive any right under, this Agreement or any other
         Transaction Documents.

                                   ARTICLE VII

                      ADDITIONAL RIGHTS AND OBLIGATIONS IN
                           RESPECT OF THE RECEIVABLES

         7.1. Rights of the Company. Each Originator hereby authorizes the
Company and the Servicer or their respective designees to take any and all steps
in such Originator's name necessary or desirable, in their respective
determination, to collect all amounts due under any and all Receivables and
Related Rights, including, without limitation, endorsing such Originator's name
on checks and other instruments representing Collections and enforcing such
Receivables and the provisions of the related Contracts that concern payment
and/or enforcement of rights to payment.

         7.2. Responsibilities of Each Originator. Anything herein to the
contrary notwithstanding:

                  (a) Each Originator agrees to (A) direct, and hereby grants to
         each of the Company and the Administrator the authority to direct, all
         Obligors of Receivables originated by such Originator to make payments
         of such Receivables directly to a Lock-Box Account at a Lock-Box Bank,
         and (B) to transfer any Collections that it receives directly, to
         Servicer (for deposit to such a Lock-Box Account) within two Business
         Days of receipt thereof, and agrees that all such Collections shall be
         deemed to be received in trust for the Company.

                                       17

                  (b) Each Originator shall perform its obligations hereunder,
         and the exercise by the Company or its designee of its rights hereunder
         shall not relieve such Originator from such obligations.

                  (c) None of the Company, Servicer, Issuer or the Administrator
         shall have any obligation or liability to any Obligor or any other
         third Person with respect to any Receivables, Contracts related thereto
         or any other related agreements, nor shall the Company, Servicer,
         Issuer or the Administrator be obligated to perform any of the
         obligations of any Originator thereunder.

                  (d) Each Originator hereby grants to Administrator an
         irrevocable power of attorney, with full power of substitution, coupled
         with an interest, to take in the name of such Originator all steps
         necessary or advisable to indorse, negotiate or otherwise realize on
         any writing or other right of any kind held or transmitted by such
         Originator or transmitted or received by the Company (whether or not
         from such Originator) in connection with any Receivable or Related
         Right.

         7.3. Further Action Evidencing Purchases. Each Originator agrees that
from time to time, at its expense, it will promptly execute and deliver all
further instruments and documents, and take all further action that the Company
or Servicer may reasonably request in order to perfect, protect or more fully
evidence the Receivables (and the Related Rights) purchased by, or contributed
to, the Company hereunder, or to enable the Company to exercise or enforce any
of its rights hereunder or under any other Transaction Document. Without
limiting the generality of the foregoing, upon the request of the Company, each
Originator will:

                  (a) execute and file such financing or continuation
         statements, or amendments thereto or assignments thereof, and such
         other instruments or notices, as may be necessary or appropriate; and

                  (b) mark the summary master control data processing records
         with the legend set forth in Section 4.1(i).

Each Originator hereby authorizes the Company or its designee to file one or
more financing or continuation statements, and amendments thereto and
assignments thereof, relative to all or any of the Receivables (and the Related
Rights) now existing or hereafter generated by such Originator. If any
Originator fails to perform any of its agreements or obligations under this
Agreement, the Company or its designee may (but shall not be required to) itself
perform, or cause performance of, such agreement or obligation, and the expenses
of the Company or its designee incurred in connection therewith shall be payable
by such non-performing Originator as provided in Section 9.1.

         7.4. Application of Collections. Any payment by an Obligor in respect
of any indebtedness owed by it to any Originator shall, except as otherwise
specified by such Obligor or otherwise required by contract or law and unless
otherwise instructed by the Company or the

                                       18

Administrator, be applied first, as a Collection of any Receivables of such
Obligor, in the order of the age of such Receivables, starting with the oldest
of such Receivables, and second, to any other indebtedness of such Obligor.

                                  ARTICLE VIII

                      PURCHASE AND SALE TERMINATION EVENTS

         8.1. Purchase and Sale Termination Events. Each of the following
events or occurrences described in this Section 8.1 shall constitute a "Purchase
and Sale Termination Event":

                  (a) The Facility Termination Date (as defined in the
         Receivables Purchase Agreement) shall have occurred; or

                  (b) Any Originator shall fail to make any payment or deposit
         to be made by it hereunder when due; or

                  (c) Any representation or warranty made or deemed to be made
         by any Originator (or any of its officers) under or in connection with
         this Agreement, any other Transaction Document or any other information
         or report delivered pursuant hereto or thereto shall prove to have been
         false or incorrect in any material respect when made or deemed made; or

                  (d) Any Originator shall fail to perform or observe in any
         material respect any agreement contained in any of Sections 6.1(h) or
         6.3; or

                  (e) Except as otherwise specifically provided in this Section
         8.1, any Originator shall fail to perform or observe any other term,
         covenant or agreement contained in this Agreement on its part to be
         performed or observed and such failure shall continue unremedied for a
         period of 30 days; or

                  (f) (i) Any Originator shall admit in writing its inability to
         pay its debts generally, or shall make a general assignment for the
         benefit of creditors; or any proceeding shall be instituted by or
         against such Originator seeking to adjudicate it a bankrupt or
         insolvent, or seeking liquidation, winding up, reorganization,
         arrangement, adjustment, protection, relief, or composition of it or
         its debts under any law relating to bankruptcy, insolvency or
         reorganization or relief of debtors, or seeking the entry of an order
         for relief or the appointment of a receiver, trustee, or other similar
         official for it or for all or any substantial part of its property and,
         in the case of any such proceeding instituted against it (but not
         instituted by it), such proceeding shall remain undismissed or unstayed
         for a period of 60 days; or (ii) any Originator shall take any
         corporate action to authorize any of the actions set forth in clause
         (i) above in this Section 8.1(f); or

                                       19

                  (g) A contribution failure shall occur with respect to any
         benefit plan sufficient to give rise to a lien under Section 302(f) of
         ERISA, or the Internal Revenue Service shall, or shall indicate its
         intention in writing to any Originator to, file notice of a lien
         asserting a claim or claims pursuant to the Code with regard to any of
         the assets of such Originator, or the Pension Benefit Guaranty
         Corporation shall, or shall indicate its intention in writing to such
         Originator or an ERISA Affiliate to, either file notice of a lien
         asserting a claim pursuant to ERISA with regard to any assets of such
         Originator or an ERISA Affiliate or terminate any benefit plan that has
         unfunded benefit liabilities.

         8.2.  Remedies.

         (a) Optional Termination. Upon the occurrence of a Purchase and Sale
Termination Event, the Company shall have the option by notice to the
Originators (with a copy to the Administrator) to declare the Purchase and Sale
Termination Date to have occurred.

         (b) Remedies Cumulative. Upon any termination of the Purchase Facility
pursuant to this Section 8.2, the Company shall have, in addition to all other
rights and remedies under this Agreement or otherwise, all other rights and
remedies provided under the UCC of each applicable jurisdiction and other
applicable laws, which rights shall be cumulative.

                                   ARTICLE IX

                                 INDEMNIFICATION

         9.1. Indemnities by the Originators. Without limiting any other rights
which the Company may have hereunder or under applicable law, each Originator,
severally and for itself alone, hereby agrees to indemnify the Company and each
of its assigns, officers, directors, employees and agents (each of the foregoing
Persons being individually called a "Purchase and Sale Indemnified Party"),
forthwith on demand, from and against any and all damages, losses, claims,
judgments, liabilities and related costs and expenses, including reasonable
attorneys' fees and disbursements (all of the foregoing being collectively
called "Purchase and Sale Indemnified Amounts") awarded against or incurred by
any of them arising out of or as a result of the following:

                  (a) the transfer by such Originator of an interest in any
         Receivable or Related Right to any Person other than the Company;

                  (b) the breach of any representation or warranty made by such
         Originator under this Agreement or any other Transaction Document, or
         any information or report delivered by such Originator pursuant hereto
         or thereto which shall have been false or incorrect in any respect when
         made or deemed made;

                                       20

                  (c) the failure by such Originator to comply with any
         applicable law, rule or regulation with respect to any Receivable or
         the related Contract, or the nonconformity of any Receivable or the
         related Contract with any such applicable law, rule or regulation;

                  (d) the failure to vest in the Company an ownership interest
         in the Receivables generated by such Originator and the Related Rights
         free and clear of any Adverse Claim;

                  (e) the failure of such Originator to file with respect to
         itself, or any delay by such Originator in filing, financing statements
         or other similar instruments or documents under the UCC of any
         applicable jurisdiction or other applicable laws with respect to any
         Receivables or purported Receivables generated by such Originator or
         any Related Rights, whether at the time of any purchase or contribution
         or at any subsequent time;

                  (f) any dispute, claim, offset or defense (other than
         discharge in bankruptcy) of the Obligor to the payment of any
         Receivable or purported Receivable generated by such Originator
         (including, without limitation, a defense based on such Receivable or
         the related Contract not being a legal, valid and binding obligation of
         such Obligor enforceable against it in accordance with its terms), or
         any other claim resulting from the goods or services related to any
         such Receivable or the furnishing of or failure to furnish such goods
         or services;

                  (g) any litigation, proceeding or investigation against such
         Originator;

                  (h) any tax or governmental fee or charge (other than any tax
         excluded pursuant to the proviso below), all interest and penalties
         thereon or with respect thereto, and all out-of-pocket costs and
         expenses, including the reasonable fees and expenses of counsel in
         defending against the same, which may arise by reason of the purchase,
         contribution or ownership of the Receivables or any Related Right
         connected with any such Receivables;

                  (i) any failure of such Originator to perform its duties or
         obligations in accordance with the provisions of this Agreement or any
         other Transaction Document; and

                  (j) the commingling of Collections on Receivables of such
         Originator, at any time with other funds;

excluding, however, (i) Purchase and Sale Indemnified Amounts to the extent
resulting from gross negligence or willful misconduct on the part of such
Purchase and Sale Indemnified Party, (ii) any indemnification which has the
effect of recourse for non-payment of the Receivables due to credit reasons to
any indemnitor (except as otherwise specifically provided under this Section
9.1) and (iii) any overall net income taxes or franchise taxes imposed on such
Purchase and Sale

                                       21

Indemnified Party by the jurisdiction under the laws of which
such Purchase and Sale Indemnified Party is organized or any political
subdivision thereof.

         If for any reason the indemnification provided above in this Section
9.1 is unavailable to a Purchase and Sale Indemnified Party or is insufficient
to hold such Purchase and Sale Indemnified Party harmless, then each of the
Originators, severally and for itself alone, shall contribute to the amount paid
or payable by such Purchase and Sale Indemnified Party as a result of such loss,
claim, damage or liability to the maximum extent permitted under applicable law.

                                    ARTICLE X

                                  MISCELLANEOUS

         10.1. Amendments, etc.

         (a) The provisions of this Agreement may from time to time be amended,
modified or waived, if such amendment, modification or waiver is in writing and
consented to by the Company, the Administrator and the Originators (with respect
to an amendment) or by the Company (with respect to a waiver or consent by it);
provided, however, that no such material amendment shall be effective unless the
Rating Agency Condition shall have been satisfied with respect thereto.

         (b) No failure or delay on the part of the Company, Servicer, any
Originator or any third party beneficiary in exercising any power or right
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise of any such power or right preclude any other or further exercise
thereof or the exercise of any other power or right. No notice to or demand on
the Company, Servicer, or any Originator in any case shall entitle it to any
notice or demand in similar or other circumstances. No waiver or approval by the
Company or Servicer under this Agreement shall, except as may otherwise be
stated in such waiver or approval, be applicable to subsequent transactions. No
waiver or approval under this Agreement shall require any similar or dissimilar
waiver or approval thereafter to be granted hereunder.

         10.2. Notices, etc. All notices and other communications provided for
hereunder shall, unless otherwise stated herein, be in writing (including
facsimile communication) and shall be personally delivered or sent by express
mail or courier or by certified mail, postage-prepaid, or by facsimile, to the
intended party at the address or facsimile number of such party set forth under
its name on the signature pages hereof or at such other address or facsimile
number as shall be designated by such party in a written notice to the other
parties hereto. All such notices and communications shall be effective, (i) if
personally delivered or sent by express mail or courier or if sent by certified
mail, when received, and (ii) if transmitted by facsimile, when sent, receipt
confirmed by telephone.

                                       22

         10.3. No Waiver; Cumulative Remedies. The remedies herein provided are
cumulative and not exclusive of any remedies provided by law.

         10.4. Binding Effect; Assignability. This Agreement shall be binding
upon and inure to the benefit of the Company and each Originator and their
respective successors and permitted assigns; provided, however, that no
Originator may assign its rights hereunder or any interest herein or delegate
its duties hereunder without the prior consent of the Company and the
Administrator. This Agreement shall create and constitute the continuing
obligations of the parties hereto in accordance with its terms, and shall remain
in full force and effect until the date after the Purchase and Sale Termination
Date on which the Originators have received payment in full for all Receivables
and Related Rights purchased pursuant to Section 1.1 hereof. The rights and
remedies with respect to any breach of any representation and warranty made by
any Originator pursuant to Article V and the indemnification and payment
provisions of Article IX and Section 10.6 shall be continuing and shall survive
any termination of this Agreement.

         10.5. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

         10.6. Costs, Expenses and Taxes. In addition to the obligations of the
Originators under Article IX, each Originator agrees to pay on demand:

                  (a) all reasonable costs and expenses in connection with the
         enforcement of this Agreement and the other Transaction Documents; and

                  (b) all stamp and other similar taxes and fees payable or
         determined to be payable in connection with the execution, delivery,
         filing and recording of this Agreement or the other Transaction
         Documents, and agrees to indemnify each Purchase and Sale Indemnified
         Party against any liabilities with respect to or resulting from any
         delay in paying or omission to pay such taxes and fees.

         10.7. Submission to Jurisdiction. EACH PARTY HERETO HEREBY IRREVOCABLY
(a) SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY COURT OF THE STATE OF NEW
YORK OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, OVER ANY
ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO ANY TRANSACTION DOCUMENT; (b)
AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND
DETERMINED IN SUCH STATE OR UNITED STATES FEDERAL COURT; (c) WAIVES, TO THE
FULLEST EXTENT IT MAY EFFECTIVELY DO SO UNDER APPLICABLE LAW, THE DEFENSE OF AN
INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING; (d) CONSENTS
TO THE SERVICE OF ANY AND ALL PROCESS IN ANY SUCH ACTION OR PROCEEDING BY THE
MAILING OF COPIES OF SUCH PROCESS TO SUCH PERSON AT ITS ADDRESS SPECIFIED IN
SECTION 10.2; AND (e) TO THE EXTENT ALLOWED BY LAW, AGREES THAT A NONAPPEALABLE
FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND

                                       23

MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER
MANNER PROVIDED BY LAW. NOTHING IN THIS SECTION 10.7 SHALL AFFECT THE COMPANY'S
RIGHT TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO BRING
ANY ACTION OR PROCEEDING AGAINST ANY ORIGINATOR OR ITS RESPECTIVE PROPERTY IN
THE COURTS OF ANY OTHER JURISDICTIONS.

         10.8. Waiver of Jury Trial. EACH PARTY HERETO EXPRESSLY WAIVES ANY
RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY
RIGHTS UNDER THIS AGREEMENT, ANY OTHER TRANSACTION DOCUMENT, OR UNDER ANY
AMENDMENT, INSTRUMENT OR DOCUMENT DELIVERED OR WHICH MAY IN THE FUTURE BE
DELIVERED IN CONNECTION HEREWITH OR ARISING FROM ANY RELATIONSHIP EXISTING IN
CONNECTION WITH THIS AGREEMENT OR ANY OTHER TRANSACTION DOCUMENT, AND AGREES
THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE
A JURY.

         10.9. Captions and Cross References; Incorporation by Reference. The
various captions (including, without limitation, the table of contents) in this
Agreement are included for convenience only and shall not affect the meaning or
interpretation of any provision of this Agreement. References in this Agreement
to any underscored Section or Exhibit are to such Section or Exhibit of this
Agreement, as the case may be. The Exhibits hereto are hereby incorporated by
reference into and made a part of this Agreement.

         10.10. Execution in Counterparts. This Agreement may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed shall be deemed to be an original and all of
which when taken together shall constitute one and the same Agreement.

         10.11. Acknowledgment and Agreement. By execution below, each
Originator expressly acknowledges and agrees that all of the Company's rights,
title, and interests in, to, and under this Agreement shall be assigned by the
Company to the Issuer pursuant to the Receivables Purchase Agreement, and such
Originator consents to such assignment. Each of the parties hereto acknowledges
and agrees that the Administrator and the Issuer are third party beneficiaries
of the rights of the Company arising hereunder and under the other Transaction
Documents to which such Originator is a party.

                           (SIGNATURE PAGE TO FOLLOW)

                                       24

         IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.

                             BAX FUNDING CORPORATION

                             By:    /s/ James Hartough
                                    ............................................
                             Name:  James Hartough
                             Title: President
Address:
                             BAX Funding Corporation
                             16808 Armstrong Avenue
                             Irvine, California 92713
                             Attention: Daniel Crowley
                             Telephone: 949-752-4000
                             Facsimile: 949-260-2305

                             with a copy to:

                             BAX Funding Corporation
                             c/o The Pittston Company
                             1801 Bayberry Court
                             Richmond, Virginia 23226-8100
                             Attention: James Hartough, President
                             Telephone: 804-289-9622
                             Facsimile: 804-289-9760

                             BAX GLOBAL INC.,
                                as initial Servicer

                             By:   /s/ James Hartough
                                   .............................................
                             Name: James Hartough
                             Title: Treasurer

                             Address:
                             BAX Global Inc.
                             16808 Armstrong Avenue
                             Irvine, California 92713
                             Attention: Daniel Crowley, Executive Vice President
                                                    and Chief Financial Officer
                             Telephone: 949-752-4000
                             Facsimile: 949-260-2305

                             with a copy to:

                                      S-1            Purchase and Sale Agreement

                             BAX Global Inc.
                             c/o The Pittston Company

                             ORIGINATOR:

                             BAX GLOBAL INC.,
                                as an Originator

                             By:   /s/ James Hartough
                                   .............................................
                             Name: James Hartough
                             Title: Treasurer

                             Address:
                             BAX Global Inc.
                             16808 Armstrong Avenue
                             Irvine, California 92713
                             Attention: Daniel Crowley, Executive Vice President
                                                    and Chief Financial Officer
                             Telephone: 949-752-4000
                             Facsimile: 949-260-2305

                             with a copy to:

                             BAX Global Inc.
                             c/o The Pittston Company

                                      S-2            Purchase and Sale Agreement

The Pittston Company
2000 Annual Report

The Pittston Company and Subsidiaries

- --------------------------------------------------------------------------------
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL
CONDITION
- --------------------------------------------------------------------------------

RESULTS OF OPERATIONS

                                                         Years Ended December 31
(In thousands)                               2000           1999           1998
- --------------------------------------------------------------------------------
                                                             
Net sales and operating revenues:
Business and security services
 Brink's                              $ 1,462,923      1,372,491      1,247,681
 BHS                                      238,069        228,720        203,586
 BAX Global                             2,097,600      2,083,414      1,776,980
- --------------------------------------------------------------------------------
Total business and security
 services                               3,798,592      3,684,625      3,228,247
Other Operations                           35,520         25,073         23,332
- --------------------------------------------------------------------------------
Net sales and operating
 revenues                             $ 3,834,112      3,709,698      3,251,579
================================================================================
Operating profit (loss):
Business and security services
 Brink's                              $   108,509        103,547         98,420
 BHS                                       54,340         54,234         53,032
 BAX Global                               (99,612)        61,460           (628)
- --------------------------------------------------------------------------------
Total business and security
 services                                  63,237        219,241        150,824
Other Operations                            5,714            327          5,472
- --------------------------------------------------------------------------------
Segment operating profit                   68,951        219,568        156,296
 General corporate expense                (21,264)       (22,995)       (27,857)
- --------------------------------------------------------------------------------
Operating profit                      $    47,687        196,573        128,439
================================================================================

The Pittston Company (the "Company") is currently comprised of four operating
segments and one discontinued segment. The operating segments are Brink's,
Brink's Home Security, BAX Global and Other Operations which consists of Mineral
Ventures and the Company's timber and gas operations (collectively, "Allied
Operations"). Pittston Coal Operations ("Coal Operations") is the discontinued
segment, therefore its results of operations are not included in the above
table.

For the year ended December 31, 2000, the Company reported a net loss of $256.6
million, or $5.12 per diluted share, compared with net income of $34.7 million,
or $0.70 per pro forma diluted share, for 1999. Lower results in 2000 were
primarily due to a $207.4 million loss (after tax) from discontinued operations,
a $52.0 million (after tax) charge to record the cumulative effect of an
accounting change, a $35.7 million (after tax) restructuring charge (discussed
below) and lower net earnings at BAX Global. Net income in 1999 included
coal-related impairment charges of $53.5 million (after tax), and benefited from
a $5.2 million gain (after tax) on the sale of a restricted investment.

The Company reported net income in 1999 of $34.7 million compared with $66.1
million in 1998. As mentioned above, net income in 1999 included coal-related
impairment charges of $53.5 million (after tax) and benefited from a $5.2
million gain (after tax) on the partial sale of a restricted investment. Net
income in 1998 included additional expenses at BAX Global of $22.7 million
(after tax), as discussed below.

Continuing Operations

Revenue from continuing operations in 2000 increased $124.4 million (3%)
compared to 1999, primarily due to growth in revenue at Brink's. Operating
profit was $47.7 million in 2000 versus $196.6 million in 1999 primarily due to
lower operating results and a $57.5 million restructuring charge at BAX Global
(see discussion below).

Revenue from continuing operations in 1999 increased $458.1 million (14%) as
compared to 1998 due to growth in all operating segments. Operating profit from
continuing operations was $196.6 million in 1999, an increase of $68.1 million
(53%) over 1998 due primarily to growth at BAX Global. Operating profit in 1998
included approximately $36 million of additional expenses relating to BAX
Global.

The following is a discussion of the operating results for the Company's four
operating segments: Brink's, Brink's Home Security, BAX Global and Other
Operations.

Brink's

The following is a table of selected financial data for Brink's on a comparative
basis:

                                                         Years Ended December 31
(In thousands)                                2000           1999           1998
- --------------------------------------------------------------------------------
                                                              
Operating revenues:
 North America (a)                      $  642,401        583,474        541,142
 International                             820,522        789,017        706,539
- --------------------------------------------------------------------------------
Total operating revenues                $1,462,923      1,372,491      1,247,681
================================================================================
Operating profit:
 North America (a)                      $   55,467         49,106         49,046
 International                              53,042         54,441         49,374
- --------------------------------------------------------------------------------
Total segment profit                    $  108,509        103,547         98,420
================================================================================
Depreciation and amortization           $   60,195         53,002         45,742
Capital expenditures                        73,837         84,414         74,716
================================================================================

(a)   Comprises US and Canada.

                                       -
                                       6

Brink's worldwide consolidated revenues totaled $1.5 billion in 2000 compared to
$1.4 billion in 1999, a 7% increase. The increase in revenues occurred in both
the North America and International regions and was partially offset by the
impact of the stronger US dollar versus the Euro relative to a year ago ($68
million). Brink's 2000 operating profit of $108.5 million represented a 5%
increase over the $103.5 million reported in 1999. The increase in operating
profit was primarily due to increased profits in North America of $6.4 million,
which included a $4.9 million settlement associated with an insurance
recoverable related to a prior year's robbery loss. This increase was partially
offset by a reduction in International results of $1.4 million as the
aforementioned foreign exchange effect reduced such operating profits by $3.7
million.

Revenues and operating profits from North American operations of $642.4 million
and $55.5 million, respectively, in 2000 represented increases of $58.9 million
and $6.4 million, respectively, from 1999. The 10% increase in revenues for 2000
primarily related to growth in the armored car operations and new business. The
increase in operating profits of $1.5 million, excluding the effects of the
insurance settlement (discussed above), was due to the revenue increase,
partially offset by higher labor costs in expanding markets and increased
workers' compensation and fuel costs. The improvement in operating profit was
primarily attributable to armored car operations (which includes ATM servicing)
largely due to increased volumes and, to a lesser extent, improved results in
currency and coin processing services, partially offset by lower results in air
courier operations.

Revenues and operating profit from International operations in 2000 totaled
$820.5 million and $53.0 million, respectively. These amounts represented an
increase of $31.5 million and a decrease of $1.4 million, respectively, from
1999. The 4% increase in revenue was primarily due to operations in Latin
America and Asia/Pacific, partially offset by a decrease in Europe. The increase
in Latin America was primarily due to improvements in Brazil, while improvements
in Asia/Pacific occurred in Australia and Hong Kong. Revenue decreases in Europe
resulted from the effects of the weaker Euro, partially offset by growth in
France. International revenues (primarily Europe) for 2000 were negatively
impacted by the strong US dollar ($68 million). International operating profits
reflect improvements in the Asia/Pacific region primarily due to lower operating
losses in Australia and higher profits in Hong Kong. Latin America reported
lower operating profits primarily due to Puerto Rico and Mexico and weaker
business conditions in Colombia, partially offset by improvements in operating
performance in Brazil, Venezuela and Argentina. Europe reported lower operating
profits as results were negatively impacted by the weaker Euro ($3.8 million)
and lower operating profits in the Netherlands due in large part to higher labor
costs.

Brink's worldwide consolidated revenues totaled $1.4 billion in 1999 compared to
$1.2 billion in 1998, a 10% increase. The increase in revenues occurred in both
the North America and International regions and was partially offset by the
impact in 1999 of the stronger US dollar versus many European and Latin American
currencies, relative to 1998. Brink's 1999 operating profit of $103.5 million
represented a 5% increase over the $98.4 million of operating profit reported in
1998.

Revenues from North American operations increased $42.3 million (8%), to $583.5
million in 1999 as compared to 1998. North American operating profit in 1999 of
$49.1 million was essentially unchanged from 1998. The increase in revenues for
1999 primarily resulted from continued growth in armored car operations, which
include ATM services. Operating profits in 1999 did not increase in proportion
to revenue primarily due to increased expenditures on information technology.
The increased information technology costs were incurred to enhance Brink's
capabilities in the transportation of valuables, ATM servicing, cash management
and air courier operations as well as to implement communications improvements.

Revenues and operating profit from International operations in 1999 amounted to
$789.0 million and $54.4 million, respectively. These amounts represented
increases of $82.5 million and $5.1 million, respectively, from 1998. The 12%
increase in revenue was primarily due to the acquisition of nearly all of the
remaining shares of Brink's affiliate in France in the first quarter of 1998,
the acquisition of the remaining 50% interest of Brink's affiliate in Germany
late in the second quarter of 1998, growth of the subsidiary in Argentina (a
relatively new operation) and an increase in Venezuela. These increases were
partially offset by a decrease in revenues in Brazil due to a weaker Brazilian
real while revenues from operations in Europe were adversely affected by the
relative strength of the US dollar versus many European currencies in 1999. The
10% increase in operating profits was primarily due to improved results from
operations and Brink's increased ownership position in France, improved
operating performance in Brazil, Argentina and Brink's 20% owned affiliate in
Mexico. These increases were partially offset by higher operating losses in
Australia resulting from costs associated with its business expansion. Lower
results from Venezuela, Chile and Colombia, due to weaker business conditions in
those countries, also restrained the increase.

                                       -
                                       7

Brink's Home Security

The following is a table of selected financial data for Brink's Home Security
("BHS") on a comparative basis:

                                                       Years Ended December 31
(Dollars in thousands)                        2000          1999          1998
- ------------------------------------------------------------------------------
                                                              
Operating revenue (a)                    $ 238,069       228,720       203,586
- ------------------------------------------------------------------------------
Investment in new subscribers (b)          (42,084)      (23,494)      (20,213)
Operating profit from
 recurring services                         96,424        77,728        73,245
- ------------------------------------------------------------------------------
Total segment profit (a)                 $  54,340        54,234        53,032
==============================================================================
Monthly recurring revenues (c)           $  18,003        16,849        15,104
Annualized disconnect rate                     7.6%          7.8%          7.2%
==============================================================================
EBITDA (d)                                 116,456       104,153        89,662
Number of subscribers:
 Beginning of period                       643,277       585,565       511,532
 Installations                              81,980       105,567       113,491
 Disconnects                               (49,979)      (47,855)      (39,458)
- ------------------------------------------------------------------------------
End of period                              675,278       643,277       585,565
==============================================================================
Depreciation and amortization            $  62,116        49,919        36,630
Capital expenditures                        74,496        80,633        81,671
==============================================================================

(a) The change in accounting principle (described below) reduced operating
revenue by $6.4 million and increased the investment in new subscribers by $2.3
million for the year ended December 31, 2000.

(b) Investment in new subscribers in 2000 primarily includes the marketing and
selling expenses, net of the deferral of certain direct costs, incurred to
attract new subscribers. Investment in new subscribers in 1999 and 1998 includes
the marketing and selling expenses, net of nonrefundable installation revenues.
If 2000 were restated on the same basis as 1999, the investment in new
subscribers would have been $26.8 million.

(c) Monthly recurring revenues are calculated based on the number of subscribers
at period end multiplied by the average fee per subscriber received in the last
month of the period for monitoring, maintenance and related services.

(d) EBITDA represents earnings before interest, tax, depreciation and
amortization.

Prior to 2000, BHS charged against earnings as incurred, all marketing and
selling costs associated with obtaining new subscribers and recognized as
revenue all non-refundable payments received from such subscribers to the extent
that costs exceeded such revenues. In December 1999, the Securities and Exchange
Commission issued Staff Accounting Bulletin No. 101 ("SAB 101"), "Revenue
Recognition in Financial Statements", followed by a related interpretation in
October 2000. These releases provide interpretive guidance on applying generally
accepted accounting principles covering revenue recognition and related costs.
Pursuant to this guidance, BHS now defers all new installation revenue and the
portion of the new installation costs deemed to be direct costs of subscriber
acquisition. Such revenues and costs (i.e. net revenues) are amortized over the
expected term of the relationship with the subscriber.

The above has been accounted for as a change in accounting principle.
Accordingly, full year 2000 results reflect the impact of the accounting change
which was effective January 1, 2000. The Company recorded a non-cash, pretax
charge of $84.7 million ($52.0 million after tax) to reflect the cumulative
effect of the change in accounting principle on years prior to 2000. Operating
revenues and total segment profits reported for 2000 would have been higher by
$6.4 million and $2.3 million, respectively, under the accounting principles
used to report results for years prior to 2000.

The change in accounting principle implemented during 2000 will have no effect
on the economics and cash flows of the business. However, the deferral of new
installation revenues, net of a portion of the costs of obtaining new
subscribers, may cause reported segment profit to not fully reflect the economic
value created by building the subscriber base in order to grow recurring
revenues.

Total segment profit comprises two main components, investment in new
subscribers and operating profit from recurring services. Investment in new
subscribers is the net cost (primarily marketing and selling expenses) of adding
to the subscriber base every year. In future years, the level of investment
charged to income will be influenced by several factors, including the growth
rate of subscribers, the net costs of adding new subscribers and the
amortization of deferred net acquisition costs of subscribers. Operating profit
from recurring services in 2000 reflects the normal monthly earnings generated
from the existing subscriber base plus the amortization of deferred revenues and
deferred direct costs from installations. Although it is impacted by the average
monitoring fee per subscriber and operational costs, the change in this
component is primarily determined by the size of the subscriber base.

Revenues for BHS were $238.1 million in 2000 versus the $228.7 million for 1999.
Except for the change in accounting principle, revenues would have been $6.4
million higher or $244.4 million, an increase of 7% over the year earlier
period. Such increase resulted primarily from the 7% growth in the average
subscriber base. Monthly recurring revenues, measured at year-end, grew a
corresponding 7% from 1999 to 2000.

Segment operating profit for 2000 was $54.3 million but would have been $56.7
million under the accounting principles used to report 1999 results. This $2.4
million increase in operating profit from the $54.2 million reported in 1999 was
due primarily to the growth in operating profit from recurring services caused
by the year over year increase in the subscriber base. This was partially offset
by the increased cost of the investment in new subscribers.
                                       -
                                       8

Revenues in 1999 of $228.7 million were $25.1 million (12%) higher than in 1998,
primarily as a result of a 12% growth in the average subscriber base, as well as
higher average monitoring fees. As a result of these changes, monthly recurring
revenues increased 12% in 1999.

Operating profit in 1999 increased to $54.2 million, an increase of $1.2 million
as compared to 1998. Primarily as the result of the larger subscriber base, as
well as higher average monitoring fees, earnings from monitoring and service
activities increased significantly. This was partially offset by higher charges
resulting from subscriber disconnects due to an increase in the rate of such
disconnects, the higher subscriber base and the higher average subscriber costs
of such base. Growth in overall operating profit in 1999 was also negatively
affected by a year over year $3.3 million increase in the investment in new
subscribers.

BAX Global

The following are tables of selected financial data for BAX Global on a
comparative basis:

                                                        Years Ended December 31
(In thousands)                               2000           1999           1998
- -------------------------------------------------------------------------------
                                                             
Operating revenues:
 Americas (a)                         $ 1,236,565      1,243,988      1,181,274
 International                            917,383        892,362        640,079
 Eliminations/other                       (56,348)       (52,936)       (44,373)
- -------------------------------------------------------------------------------
Total operating revenues              $ 2,097,600      2,083,414      1,776,980
===============================================================================
Operating profit (loss):
 Americas (b), (c)                    $   (96,182)        75,095         71,120
 International (b), (c)                    33,205         31,029         18,351
 Other (b)                                (36,635)       (44,664)       (90,099)
- -------------------------------------------------------------------------------
Total segment profit (loss)           $   (99,612)        61,460           (628)
===============================================================================
Depreciation and amortization         $    61,300         40,410         35,287
Capital expenditures                       60,147         94,465         75,648
===============================================================================

                                                        Years Ended December 31
(Dollars in millions)                        2000           1999           1998
- -------------------------------------------------------------------------------
                                                                 
Worldwide expedited freight services:
 Revenues                                  $1,724          1,742          1,520
 Weight (million pounds)                    1,765          1,802          1,616
===============================================================================

(a) Includes Intra-US revenue of $604.6 million, $654.5 million and $626.7
million for 2000, 1999 and 1998, respectively.

(b) Expenses associated with major IT projects and certain overhead costs have
been reallocated in 1999 from Other to the Americas and International,
respectively.

(c) Includes restructuring charges of $54.6 million for Americas and $2.9
million for International for 2000.

BAX Global operates in the Americas and internationally. The Americas includes
the domestic and export business of the United States ("US"), Latin America and
Canada; International includes BAX Global's European and Asia-Pacific operating
regions. Each region includes both expedited and non-expedited freight services.
Revenues and profits on expedited freight services are shared among the origin
and destination countries on all export volumes. Accordingly, BAX Global's US
business, the region with the largest export volume, significantly impacts the
trend of results in BAX Global's worldwide expedited freight services.
Non-expedited freight services primarily include supply chain management and
ocean freight services. In addition, BAX Global operations include an
international customs brokerage business as well as a federally certificated
airline, Air Transport International ("ATI"), which was acquired in April 1998.
ATI's results, net of intercompany eliminations, are included in the Americas
region. Eliminations/other revenues primarily include intercompany revenue
eliminations on shared services. Other primarily consists of global support
costs including global information technology costs and goodwill amortization.
In 1998, Other also included additional expenses of approximately $36 million
(discussed below).

Over the course of 2000, the operating performance of BAX Global's Americas
region was negatively impacted by lower than expected demand and higher
transportation, operating and administrative costs relative to that lower
demand. As such, BAX Global evaluated alternatives directed at returning its
Americas operations to profitability, including ways to improve sales
performance and to reduce transportation, operating and administrative expenses.
Through actions taken in the third quarter, employee-related costs were reduced
by approximately $8 million on an annualized basis. During the fourth quarter of
2000, BAX Global finalized a restructuring plan aimed at reducing the capacity
and cost of its airlift capabilities in the US as well as reducing station
operating expenses, sales costs and overhead in the Americas and Atlantic
regions, including:

o     The removal of 10 planes from the fleet, 9 of which were dedicated to
      providing lift capacity in BAX Global's commercial cargo system.

o     The closure of 9 operating stations and realignment of domestic
      operations.

o     The reduction of employee-related costs at BAX Global and ATI through the
      elimination of approximately 300 full-time positions including aircraft
      crew and station operating, sales and business unit overhead positions.
                                       -
                                       9

In addition, certain Atlantic region operations were streamlined in order to
reduce overhead costs and improve overall performance in that region. The
Atlantic region restructuring efforts involved severance costs and station
closing costs in the UK, Denmark, Italy and South Africa. Approximately 50
positions were eliminated, most of which were positions at or above manager
level.

The Company anticipates annualized savings from the above cost reduction
programs to be at least $50 million in 2001, most of which will impact the
Americas region.

The following is a summary of the charges incurred in the fourth quarter related
to the restructuring:

                                            Americas      Atlantic      Total
(In thousands)                               Region        Region     BAX Global
- --------------------------------------------------------------------------------

Fleet related charges                        $49,702           --       49,702
Severance costs                                1,130        1,148        2,278
Station and other closure costs                3,777        1,730        5,507
- --------------------------------------------------------------------------------
Total restructuring charge (a)               $54,609        2,878       57,487
================================================================================

(a) Includes noncash charges of $45,180. Substantially all severance costs are
expected to be paid out before June 30, 2001. Other cash charges primarily
include contractual commitments for aircraft and facilities, approximately
two-thirds of which are expected to be paid out during 2001, with the remainder
expected to be paid out by the end of 2002.

BAX Global's worldwide operating revenues were $2.1 billion in 2000 and 1999. In
2000, a slight decrease (1%) in the Americas revenues was offset by an increase
in the International revenues (3%), when compared to revenues in 1999. Domestic
and International fuel surcharges resulted in a small increase in yields for
2000 as compared to 1999. In 2000, BAX Global reported an operating loss of
$99.6 million, including the restructuring charge of $57.5 million discussed
above, as compared to an operating profit in 1999 of $61.5 million. BAX Global's
operating loss of $42.1 million, before the restructuring charge, was primarily
due to significantly lower performance in the Americas region which was
partially offset by improved International results. The operating profit in 1999
included a benefit of $1.6 million related to 1998 incentive accrual reversals.
The majority of that benefit impacted BAX Global's International region.

Revenues in the Americas decreased $7.4 million (1%) in 2000 as compared to
1999. The decrease in revenue was primarily due to a decrease in domestic
expedited volume, partially offset by increases in domestic expedited yields
resulting primarily from fuel surcharges. In 2000, the Americas reported an
operating loss of $96.2 million, including restructuring charges of $54.6
million (as discussed above), compared to an operating profit in 1999 of $75.1
million. The decrease in the operating performance in the Americas region,
excluding the effects of the restructuring charges, was primarily due to lower
volumes, higher service costs for the fleet of aircraft, higher administrative
costs (including $2.8 million related to staff reductions, not included in the
restructuring charge) and increases in fuel costs which were not fully covered
by fuel surcharges and hedging activities. Operating results in the Americas
were also impacted by higher depreciation and amortization expense, reflecting
the depreciation associated with higher expenditures on aircraft modifications
in 1999 and information systems placed in service in late 1999. The Americas
operating results also included a bad debt provision of approximately $4.5
million related to the bankruptcy of a customer during the third quarter of 2000
and a charge of approximately $4 million resulted from the decision in the
fourth quarter to cancel a logistics contract with a large customer due to
inadequate operating returns. Revenues in 2000 associated with this contract
were approximately $18 million.

In 2000, International revenues and operating profit increased $25.0 million
(3%) and $2.2 million (7%), respectively, compared to 1999. In 2000, the
International operations reported operating profits of $33.2 million which
included a restructuring charge of $2.9 million in the Atlantic region (see
discussion above). The increase in revenue resulted from growth in the Atlantic
and Pacific regions. The increase in operating profit was primarily due to
continued growth in the Pacific region from increased supply chain management
and transportation services to the high technology industry. Operating profit in
1999 reflected the benefit of approximately $1.3 million relating to the
aforementioned reversal of excess incentive accruals.

The increase in eliminations/other revenue was consistent with increased
revenues on shipments across national borders. Other operating loss decreased
$8.0 million primarily due to lower global administrative expenses.

A supplier that formerly provided the majority of BAX Global's 727 lift capacity
and which also operates controlled lift for the freight forwarding community,
filed for Chapter 11 bankruptcy protection in May of 2000. Since that time, BAX
Global has lessened its dependency on this supplier through a negotiated
reduction in lift capacity, which resulted in a decrease in total cost but an
increase in the unit cost of its existing lift commitment with the supplier.

During the fourth quarter of 2000, BAX Global's airline subsidiary, ATI, reached
agreement with the local union for the International Brotherhood of Teamsters.
As of December 31, 2000, approximately 180 cockpit crewmembers were employed by
ATI and covered under the agreement.

                                       --
                                       10

BAX Global's worldwide operating revenues increased 17% to $2.1 billion in 1999
as compared to $1.8 billion in 1998, with increases in both the Americas and
International regions. In 1999, BAX Global reported an operating profit of $61.5
million, as compared to an operating loss in 1998 of $0.6 million. In 1998, BAX
Global's operating results were adversely affected by additional expenses of
approximately $36 million (see further discussion below). Operating profit in
1999 included the benefit of $1.6 million related to 1998 incentive accruals
reversed as a result of a management decision made in the first quarter of 1999.
The majority of that benefit impacted BAX Global's International region.

Revenues and operating profit in the Americas increased $62.7 million (5%) and
$4.0 million (6%), respectively, in 1999 as compared to 1998. The increase in
revenue was primarily due to the inclusion of a full year's performance for ATI,
which was acquired in April 1998, and growth in US domestic, Canada and Mexico
expedited freight revenue. The increase in US domestic expedited revenue was
mainly due to the continued expansion of higher yielding time definite and
guaranteed delivery products, partially offset by a slight decrease in domestic
expedited volume. The increase in operating profit in the Americas region was
largely the result of margin improvements on US domestic freight services which
reflected higher time definite and guaranteed delivery product volumes as well
as lower US domestic transportation costs.

Lower US domestic transportation costs were favorably impacted by operating
efficiencies which primarily resulted from BAX Global's mode-neutral
transportation capabilities as well as lower fuel expense due to lower usage and
hedging activities, partially offset by higher maintenance costs. The benefits
from US domestic margin improvements were partially offset by higher
administrative and station expenses, as well as higher operating costs at ATI
(included for a full year in 1999, eight months in 1998). In addition, US
transportation costs in the first half of 1998 were negatively impacted by
service disruptions due to weather delays and equipment problems.

In 1999, International revenues and operating profit increased $252.3 million
(39%) and $12.7 million (69%), respectively, compared to 1998. The growth in
revenue and operating profit reflected increased expedited freight services
revenue (resulting from higher volumes) as well as increased supply chain
management services revenue due to new business, primarily in Asia, from several
high technology industry customers obtained in late 1998 and early 1999. The
growth in expedited revenue also reflected the acquisition of the remaining 67%
interest in a freight agent in Taiwan in the first quarter of 1999. In addition,
operating profit in 1999 reflected the benefit of the aforementioned reversal of
incentive accrual in the amount of $1.3 million, while operating profit in 1998
reflected higher information technology costs in Europe as well as increased
provisions for bad debt expense in India.

The increase in eliminations/other revenue was consistent with increased
revenues on shipments across national borders. Other operating loss decreased
$45.4 million for 1999 as compared to 1998 due in part to the additional
expenses of approximately $36 million in 1998. In addition, 1999 reflects higher
global administrative expenses primarily due to increases in global head count
partially offset by lower global information technology costs.

During 1998, BAX Global incurred additional expenses of approximately $36
million, nearly all of which was recorded in selling, general and administrative
expenses. These expenses were comprised of several items. In accordance with
Statement of Financial Accounting Standards ("SFAS") No. 121 "Accounting for
Long-Lived Assets and Long-Lived Assets to be Disposed Of", BAX Global recorded
write-offs for software costs of approximately $16 million. These write-offs
consisted of the costs associated with certain in-process software development
projects that were canceled and unamortized costs of existing software
applications that were determined by management to have no future service
potential or value. Provisions aggregating approximately $13 million were
recorded on existing receivables during 1998, primarily to reflect the impact of
more difficult operating conditions in Asia and Latin America. Approximately $7
million was accrued for severance and other expenses primarily stemming from a
realignment of BAX Global's organizational structure. During 1999, BAX Global
reversed approximately $0.1 million of the accrued severance representing the
unused portion of the initial accrual established at September 30, 1998.

Other Operations

The following is a table of selected financial data for Other Operations on a
comparative basis:

                                                        Years Ended December 31
(In thousands)                                 2000          1999          1998
- -------------------------------------------------------------------------------
                                                                
Net sales:
 Mineral Ventures                          $ 16,633        13,653        15,333
 Allied Operations (a)                       18,887        11,420         7,999
- -------------------------------------------------------------------------------
Total net sales                            $ 35,520        25,073        23,332
===============================================================================
Operating profit (loss):
 Mineral Ventures                          $ (1,629)       (5,306)       (1,031)
 Allied Operations (a)                        7,343         5,633         6,503
- -------------------------------------------------------------------------------
Total segment profit                       $  5,714           327         5,472
===============================================================================
Depreciation and amortization              $  4,929         4,688         3,954
Capital expenditures                          5,186         9,317         6,834
===============================================================================

Certain prior year amounts have been reclassified to conform to the current year
presentation.

(a) Consists of timber and natural gas operations.

                                       --
                                       11

The following is a table of selected financial data for Mineral Ventures on a
comparative basis:

                                                         Years Ended December 31
                                                  2000         1999         1998
- --------------------------------------------------------------------------------
                                                                 
Stawell Gold Mine:
Mineral Ventures' 50% direct share:
 Ounces sold                                    56,719       47,245       46,281
 Ounces produced                                57,233       47,195       46,749
Average per ounce sold (US$):
 Realization                                   $   293          289          330
 Cash cost                                         206          251          212
================================================================================

Mineral Ventures primarily consists of a 50% direct interest in the Stawell gold
mine ("Stawell") in Western Victoria, Australia. The remaining 50% interest in
Stawell is owned by Mining Project Investors ("MPI"). In addition, Mineral
Ventures has a 45.1% undiluted (40.1% fully diluted) ownership interest in its
joint venture partner MPI.

Mineral Ventures generated net sales during 2000 of $16.6 million, a 22%
increase from the $13.7 million reported in 1999. The increase in net sales
resulted from a 20% increase in the ounces of gold sold and slightly higher
realizations.

Mineral Ventures generated an operating loss of $1.6 million in 2000, compared
to a loss of $5.3 million in 1999. The cash cost per ounce of gold sold
decreased by 18% from $251 in 1999 to $206 in 2000. During the fourth quarter of
2000, the decision was made to discontinue exploration activities in Nevada. In
addition, late in 2000, the Victoria State government denied Stawell gold mine's
request for an operating permit for an open pit project, which resulted in the
impairment of the capital invested. The operating loss in 2000 was impacted by
expenses of $0.4 million associated with the discontinuation of exploration
activities in Nevada and a charge of $1.1 million relating to the impairment of
the open pit project.

Mineral Ventures generated net sales during 1999 of $13.7 million, an 11%
decrease from the $15.3 million reported in 1998. The decrease in net sales
resulted from lower realizations partially offset by higher levels of gold
ounces sold, which increased from 46.3 thousand ounces to 47.2 thousand ounces
in 1999.

Mineral Ventures generated an operating loss of $5.3 million in 1999 compared to
a loss of $1.0 million in 1998. The cash cost per ounce of gold sold increased
from $212 in 1998 to $251 in 1999. Production costs in 1999 were negatively
impacted by a high percentage of low grade ore milled during the first quarter
and by inefficiencies resulting from the delay in installation of a ventilation
shaft during 1999.

Revenues and operating profit from the Allied Operations increased $7.5 million
and $1.7 million, respectively in 2000 as compared to 1999. The higher revenue
was due to increases in natural gas prices and revenue from the timber business.
The increase in operating profit was due primarily to higher natural gas prices
partially offset by start-up costs in the timber business.

Revenues from Allied Operations increased $3.4 million and operating profit
decreased $0.9 million in 1999 as compared to 1998. The lower operating profit
in 1999 was largely due to lower timber results.

Discontinued Operations

On December 6, 1999, the Company announced its intention to exit the coal
business through the sale of the Company's coal mining operations and reserves.
Based on progress since that date, the Company has formalized its plan to
dispose of those operations by the end of 2001. Accordingly, Coal Operations
have been reported as discontinued operations of the Company as of December 31,
2000. The accompanying financial statements and related disclosures for all
periods presented have been reclassified accordingly.

The Company's formal plan of disposal includes the sale of all of its active and
idle coal mining operations and reserves, primarily in West Virginia, Virginia
and Kentucky (including 23 company or contractor operated mines and 6 active
plants) as well as other assets, which support those operations. The Company is
also planning to sell its partnership interest in a coal port facility in
Newport News, Virginia ("DTA"). The Company expects to sell these properties and
support operations by December 31, 2001. Net assets to be sold primarily include
inventory and property, plant and equipment, net of certain liabilities,
primarily reclamation on active properties. Total proceeds from the sale of Coal
Operations, which includes cash, the value of future royalties and liabilities
transferred, are expected to exceed $100 million.

                                       --
                                       12

Net sales and income (loss) from discontinued operations for the years ended
December 31, 2000, 1999 and 1998 are as follows:

(In thousands)                                   2000         1999         1998
- --------------------------------------------------------------------------------
                                                               
Net sales from discontinued
 operations                                 $ 401,049      436,683      583,630

Pretax loss from the operations of the
 discontinued segment                         (32,407)    (122,054)      (2,125)
Income tax benefit                            (14,172)     (48,663)      (7,008)
- --------------------------------------------------------------------------------
Income (loss) from the operations of the
 discontinued segment, net of tax             (18,235)     (73,391)       4,883
- --------------------------------------------------------------------------------

Estimated pretax loss on the disposal of
 the discontinued segment                    (294,229)          --           --
Income tax benefit                           (105,088)          --           --
- --------------------------------------------------------------------------------
Estimated loss on the disposal of the
 discontinued segment, net of tax            (189,141)          --           --
- --------------------------------------------------------------------------------
Income (loss) from discontinued
 operations                                 $(207,376)     (73,391)       4,883
================================================================================

Operating Results

Net sales for all periods presented have been restated to reflect the adoption
of Emerging Issues Task Force ("EITF") Issue No. 00-10 "Accounting for Shipping
and Handling Fees and Costs". In accordance with EITF No. 00-10, the Company's
Coal Operations now report sales and costs charged for certain shipping and
handling activities on a gross basis so that such amounts are reflected as a
component of net sales and as a component of cost of sales. Previously, such
costs were netted against revenues to arrive at net sales. The implementation of
EITF No. 00-10 did not impact Coal Operations operating results or net loss
since net sales and cost of sales were increased by equal amounts. The increases
to net sales and cost of sales for the years ended December 31, 2000, 1999 and
1998 were $47.1 million, $57.2 million and $88.3 million, respectively.

Pretax losses from discontinued operations represent Coal Operations operating
losses for all periods presented through December 31, 2000. The operating loss
attributable to the discontinued segment for 1999 includes a charge of $82.3
million related to the impairment of long-lived assets and a joint venture
interest as well as other mine closure costs, substantially all of which were
non-cash. Income tax benefits attributable to the losses from discontinued
operations include the benefits of percentage depletion.

Coal revenues for 2000 as compared to 1999 decreased primarily due to a decrease
in volumes. In addition, coal sales were impacted by lower realizations per ton
due to weaker market conditions. Pretax operating losses for 2000 were $7.4
million lower than 1999 (excluding the 1999 charges of $82.3 million) primarily
due to lower selling, general and administrative expenses and lower idled mine
costs. These improvements were partially offset by decreases in the gross margin
due to lower realizations and higher production costs.

Coal Operations sales decreased $154.9 million in 1999 from 1998, largely as a
result of reduced sales volume, which declined 3.9 million tons from the 16.7
million tons sold in 1998. The decline in sales volume resulted from the sale of
certain coal assets in West Virginia in early 1998, the closing of a surface
mine in Kentucky in late 1998 as well as continued softness in market conditions
resulting from weak export markets for metallurgical coal and a strong US dollar
relative to the currencies of other coal exporting nations. Excluding the impact
of the coal related impairment and other charges of $82.3 million (discussed
above), Coal Operations generated an operating loss of $42.1 million in 1999 as
compared to $3.6 million in 1998. The lower results were due to a $17.2 million
reduction in total coal margin and increases in idle and closed mine costs,
inactive employee cost and selling, general and administrative expenses. The
operating loss in 1999 included costs associated with salaried staff reductions
while the operating loss in the 1998 period included a benefit of approximately
$3.2 million related to net gains on the sale of assets and a gain of $2.6
million on the settlement of litigation.

Income tax benefits attributable to the losses from discontinued operations
include the benefits of percentage depletion.

Estimated Loss on Disposal

The estimated loss on the disposal of the discontinued segment includes the
following:

(In thousands)                                      Year Ended December 31, 2000
- --------------------------------------------------------------------------------
                                                                   
Curtailment and recordation of benefit plans                          $(163,307)
Estimated loss on the sale of coal assets                               (85,956)
Estimated operating losses during the
 sale period                                                            (44,966)
- --------------------------------------------------------------------------------
Estimated pretax loss on the disposal of the
 discontinued segment                                                  (294,229)
Income tax benefit                                                     (105,088)
- --------------------------------------------------------------------------------
Estimated loss on the disposal of the
 discontinued segment, net of tax                                     $(189,141)
================================================================================

The Company recorded a net curtailment loss of $1.6 million comprised of a $6.0
million net curtailment loss on the Company's medical benefit plans and a $4.4
million net curtailment gain on the Company's pension plans. In addition, the
Company recorded its obligations under the Coal Industry Retiree Health Benefit
Act of 1992 (the "Health Benefit Act") by incurring a one-time charge of $161.7
million, which represents the actuarially determined undiscounted liability for
such obligations (discussed in detail below).

                                       --
                                       13

Estimates regarding losses on the sale of coal assets of $86.0 million and
losses during the sale period of $45.0 million are subject to known and unknown
risks, uncertainties and contingencies which could cause actual results to
differ materially from those which are anticipated. Such risks, uncertainties
and contingencies, many of which are beyond the control of the Company, include,
but are not limited to, overall economic and business conditions, demand and
competitive factors in the coal industry, the impact of delays in the issuance
or the non-issuance of mining permits, the timing of and consideration received
for the sale of the coal assets, geological conditions and variations in the
spot prices of coal.

On February 10, 1999, the US District Court of the Eastern District of Virginia
entered a final judgment in favor of certain of the Company's subsidiaries,
ruling that the Federal Black Lung Excise Tax ("FBLET") imposed under Section
4121 of the Internal Revenue Code is unconstitutional as applied to export coal
sales and ordering a refund to the subsidiaries. A total of $0.8 million
(including interest) was refunded in 1999 for the FBLET that those companies
paid for the quarter ended March 31, 1997. The Company has sought refunds of the
FBLET it paid on export coal sales for all open statutory periods and expects to
receive such refunds for some or all of that tax paid (plus interest) pursuant
to a review of claim documentation by the Internal Revenue Service. Due to the
uncertainty of the ultimate amounts to be received, which it estimates could
range from $12 million to $20 million (pretax), and timing of the FBLET refunds,
the Company has not currently recorded a receivable for such amounts in its
estimate of operating losses during the sale period. The Company is also
pursuing additional claims pending a decision by the US Supreme Court related to
another company. The ultimate amounts and timing of such additional refunds, if
any, cannot be determined at this time.

Although the Company would not be currently liable for a multi-employer pension
plan withdrawal liability associated with its planned exit from the coal
business, it could, under certain circumstances, become liable for such
obligations during the sale process. Such liability, if any, is subject to
several factors, the effects of which cannot be predicted at this time. Those
factors include funding and benefit levels of the plans and the ultimate timing
and form of the sale transactions. Accordingly, the Company has not recorded a
withdrawal liability in the determination of the estimated loss on disposal.

Retained Assets and Liabilities

Certain non-operating assets and liabilities will be retained by the Company,
including net working capital (excluding inventory), certain parcels of land,
income and non-income tax assets and liabilities, certain inactive employee
liabilities primarily for postretirement medical benefits, workers' compensation
and black lung obligations, and reclamation related liabilities associated with
certain closed coal mining sites in Virginia, West Virginia and Kentucky. In
addition, the Company expects to retain its unconditional guarantee of the
payment of the principal and premium, if any, on coal terminal revenue refunding
bonds (principal amount of $43.2 million) as well as certain other contingent
liabilities which are not considered material to the Company.

The following is a summary of the retained assets and liabilities, as of
December 31, 2000:

(In thousands)                                                 December 31, 2000
- --------------------------------------------------------------------------------
                                                                     
Assets:
Net working capital                                                     $ 42,383
Property, plant and equipment, net                                         8,843
Net deferred tax assets                                                  231,621

Liabilities:
Inactive workers' compensation and
 black lung obligations                                                 $ 81,733
Retiree medical obligations                                              425,381
Reclamation liabilities - inactive properties                             27,992
Other liabilities (a)                                                     52,904
================================================================================

(a) Includes $43,160 representing accumulated losses on the Company's equity
investment in Dominion Terminal Associates which is equal to its unconditional
guarantee related to coal terminal revenue refunding bonds.

In addition, the Company expects to have continuing expenses (primarily interest
costs on retiree medical obligations) associated with its Coal Operations. Such
expenses are currently included in the loss from discontinued operations since
they are considered to be compensation costs of the discontinued operations.
Beginning in 2002, after the sale of the Company's Coal Operations, these
expenses will be a component of the Company's income from continuing operations.
Using assumptions in existence as of December 31, 2000, the Company estimates
that such expenses will approximate $35 million to $40 million per annum.

In October 1992, the Health Benefit Act was enacted as part of the Energy Policy
Act of 1992. The Health Benefit Act established rules for the payment of future
health care benefits for thousands of retired union mine workers and their
dependents. The Health Benefit Act established a trust fund to which "signatory
operators" and "related persons", including the Company and certain of its
subsidiaries (collectively, the "Pittston Companies"), are jointly and severally
liable to pay annual premiums for assigned beneficiaries, together with a pro
rata share for certain beneficiaries who never worked for such employers
("unassigned beneficiaries"), including, in the Company's case, the Pittston
Companies in amounts determined on the basis set forth in the Health Benefit
Act. In October 1993 and at various times in subsequent years, the Pittston
Companies have received notices from the Social Security Administration (the
"SSA") with regard to the assigned beneficiaries for which the Pittston
Companies are responsible

                                       --
                                       14

under the Health Benefit Act. In addition, the Health Benefit Act requires the
Pittston Companies to fund, pro rata according to the total number of assigned
beneficiaries, a portion of health benefits for unassigned beneficiaries. At
this time, the funding for such health benefits is being provided from another
source; the statutory authorization to obtain such funds is currently scheduled
to cease by 2005. In the determination of the Pittston Companies' ultimate
obligation under the Health Benefit Act, such funding has been taken into
consideration.

Prior to December 31, 2000, the Company accounted for its obligations under the
Health Benefit Act as a participant in a multi-employer benefit plan and thus,
recognized the annual cost of these obligations on a pay-as-you-go basis. For
2000, 1999 and 1998, cash payments for such amounts were approximately $9.0
million, $10.4 million and $9.6 million, respectively. Pursuant to its formal
plan to exit the coal business, the Company recorded its estimated undiscounted
liability relating to such obligations at December 31, 2000 as a $161.7 million
onetime charge to the net loss from discontinued operations. Such obligations if
discounted at 7.5% would provide a present value estimate of approximately $80
million. The Company currently estimates that the annual cash funding under the
Health Benefit Act for the Pittston Companies' assigned beneficiaries will
continue at about the same annual level for the next several years and should
begin to decline thereafter as the number of such assigned beneficiaries
decreases.

In addition, under the Health Benefit Act, the Pittston Companies are jointly
and severally liable for certain postretirement health benefits for thousands of
additional retired union mine workers and their dependents under plans provided
by the Company. Substantially all of the Company's accumulated postretirement
benefit obligation for retirees of $325.7 million as of December 31, 2000,
relates to such retired workers and their beneficiaries.

The ultimate costs that will be incurred by the Company under the Health Benefit
Act and its postretirement medical plans could be significantly affected by,
among other things, the rate of inflation for medical costs, changes in the
number of beneficiaries, governmental funding arrangements and such federal
health benefit legislation of general application as may be enacted.

The Company acts as self-insurer with respect to almost all black lung benefits.
Provision is made for estimated benefits based on annual reports prepared by
outside actuaries. The excess of the present value of expected future benefits
over the accumulated book reserves is recognized over the amortization period.

Cumulative actuarial gains or losses are calculated periodically and amortized
on a straight-line basis. Prior to December 31, 2000, assumptions used in the
calculation of the actuarial present value of black lung benefits were based on
actual retirement experience of the Company's coal employees, black lung claims
incidence, actual dependent information, industry turnover rates, actual medical
and legal cost experience and projected inflation rates. As of December 31,
2000, certain assumptions were modified to reflect the planned sale of Coal
Operations. As of December 31, 2000 and 1999, the actuarially determined
discounted value of estimated future black lung benefits was approximately $47
million and $49 million, respectively. The amount expensed (credited) to
operations for federal and state black lung benefits was $5.3 million in 2000,
$5.1 million in 1999 and ($0.6) million in 1998. In 1998, the black lung credit
was favorably impacted by the amortization of actuarial gains.

The Company has established a Voluntary Employees' Beneficiary Association
("VEBA") which is intended to tax efficiently fund certain retiree medical
liabilities primarily for retired coal miners and their dependents. The VEBA may
receive partial funding from the proceeds of the planned sale of the Company's
coal business as well as other sources over time. The Company contributed $15.0
million to the VEBA in December 1999. As of December 31, 2000, the balance in
the VEBA was $15.9 million.

Foreign Operations

A portion of the Company's financial results is derived from activities in well
over 100 countries, each with a local currency other than the US dollar. Because
the financial results of the Company are reported in US dollars, they are
affected by changes in the value of the various foreign currencies in relation
to the US dollar. Changes in exchange rates may also adversely affect
transactions which are denominated in currencies other than the functional
currency. The Company periodically enters into such transactions in the course
of its business. The diversity of foreign operations helps to mitigate a portion
of the impact that foreign currency fluctuations in any one country may have on
the translated results. The Company, from time to time, uses foreign currency
forward contracts to hedge transactional risks associated with foreign
currencies. (See "Market Risk Exposures" below.) Translation adjustments of net
monetary assets and liabilities denominated in the local currency relating to
operations in countries with highly inflationary economies are included in net
income, along with all transaction gains or losses for the period. A subsidiary
in Venezuela operates in such a highly inflationary economy. Prior to January 1,
1999, the economy of Mexico, in which the Company has an affiliate and a
subsidiary, was considered hyper-inflationary.

                                       --
                                       15

The Company is also subject to other risks customarily associated with doing
business in foreign countries, including labor and economic conditions,
political instability, controls on repatriation of earnings and capital,
nationalization, expropriation and other forms of restrictive action by local
governments. The future effects, if any, of such risks on the Company cannot be
predicted.

Euro

The Company's Brink's and BAX Global subsidiaries have operations in various
European countries that are currently in the process of adopting a common
currency (the "Euro"). The transition of these countries to the Euro currency
began in 1999 and is scheduled to be completed in 2002. To date, Brink's and BAX
Global operations have not experienced any significant problems with the Euro
currency conversion. Both subsidiaries continue to plan for the remaining
milestones in the conversion process, and no material impact on their operations
is expected.

Corporate Expenses

In 2000, general corporate expenses totaled $21.3 million compared with $23.0
million and $27.9 million in 1999 and 1998, respectively. Corporate expenses in
1999 included professional fees and expenses of approximately $1.3 million
related to the Company's December 6, 1999 announcement to eliminate its tracking
stock capital structure. Corporate expenses in 1998 included costs associated
with a severance agreement with a former member of the Company's senior
management and $5.8 million of additional expenses relating to a retirement
agreement between the Company and its former Chairman and CEO.

Interest Expense, Net

Net interest expense totaled $39.2 million in 2000 compared with $34.5 million
in 1999 and $34.9 million in 1998. The increase in net interest expense in 2000
as compared to 1999 was primarily due to higher average interest rates and
higher average borrowings. Total debt at December 31, 2000 decreased over
December 31, 1999 levels. This reduction in debt was primarily due to the sale
in December 2000 of an $85.0 million revolving interest in BAX Global's US
domestic accounts receivable. Proceeds from the sale were used to reduce year
end borrowings under the Company's revolving credit facility. Lower levels of
net interest expense in 1999 over 1998 were primarily due to significantly lower
interest rates, as well as lower borrowings in Venezuela, which more than offset
higher average borrowings under the Company's $350.0 million credit facility
with a syndicate of banks.

In October 2000, the Company entered into a $370 million credit agreement with a
syndicate of banks to replace the existing $350 million credit agreement that
was due to expire in May 2001. Interest costs for 2000 under the new credit
agreement were higher than the 1999 costs under the previous credit agreement.

Other Income/Expense, Net

Other expense, net, in 2000 of $3.8 million represented a decrease of $11.2
million from the other income of $7.4 million for 1999, primarily due to a gain
in 1999 on the sale of a restricted investment held by BAX Global (discussed
below). Other factors increasing expense in 2000 include an increase in minority
interest expense (due to improved results of consolidated affiliates) and
expenses associated with the sale of accounts receivable at BAX Global.

Other net income in 1999 of $7.4 million represented an increase of $3.6 million
over the 1998 income of $3.8 million, primarily due to the previously mentioned
gain on the partial sale of a restricted investment held by BAX Global. This
gain was partially offset by lower foreign translation gains in 1999. Other net
income in 1998 reflects a gain on the sale of a surplus aircraft by BAX Global.

Income Taxes

In 2000, 1999 and 1998, the provision for income taxes from continuing
operations was greater than the statutory federal income tax rate of 35%
primarily due to goodwill amortization and state income taxes, partially offset
by lower taxes on foreign income. In 2000, the $57.5 million BAX Global
restructuring charge and lower consolidated pretax income caused non-deductible
items (principally goodwill amortization) to be a more significant factor in
calculating the effective tax rate. As a result of Coal Operations being
reported under discontinued operations, the tax benefits of percentage depletion
are no longer reflected in the effective tax rate of continuing operations.

Based on the Company's historical and future expected taxable earnings,
management believes it is more likely than not that the Company will realize the
benefit of the existing deferred tax asset at December 31, 2000.

FINANCIAL CONDITION

Cash From Operating Activities

Cash provided by operating activities from continuing and discontinued
operations totaled $364.8 million in 2000, an increase of $35.5 million from the
$329.3 million generated during 1999. This increase was attributable to the
acceleration of cash flow from working capital that occurred in December 2000
with the sale of an $85.0 million revolving interest in BAX Global's US domestic
accounts receivable. Without this transaction, cash provided by operations would
have been $49.5 million lower in 2000 than the prior year, primarily reflecting
the decline in operating performance at BAX Global, partially offset by higher
operating cash flow from the discontinued coal operations. Noncash charges and
other write-offs in the consolidated statement of cash flows totaled $47.8
million for 2000, primarily reflecting the write-down of assets as a result of
BAX Global's restructuring plan. Depreciation and amortization increased $40.1
million in 2000, due primarily to depreciation on

                                       --
                                       16

information technology assets placed in service at BAX Global late in 1999,
depreciation on additional aircraft modifications completed at ATI in late 1999
and approximately $8 million in amortization of subscriber acquisition costs
deferred as part of the cumulative effect of implementing SAB No. 101. Net
income for 2000 included deferred income tax credits of $28.0 million, arising
primarily from asset write-downs at BAX Global. The cash flow statement also
reflects a $27.3 million increase in other assets during 2000, $20.8 million
greater than the increase reported in 1999. Approximately $12 million of this
increase represents direct BHS subscriber acquisition costs deferred during 2000
under the new accounting method, SAB 101. Cash provided by discontinued coal
operations increased $14.3 million, primarily due to a decrease in coal
inventory and fluctuations in accounts payable and accrued liabilities. Coal
Operations' net loss in 1999 was higher than 2000 due to noncash charges
relating to an impairment. Cash provided by discontinued operations for 2000 and
1999 was net of $65.2 million and $61.1 million, respectively, of cash payments
for inactive employee benefits and for idle and closed facilities.

Investing Activities

Net cash used in investing activities was $273.7 million in 2000 compared to
cash used of $326.8 million in 1999, including $7.4 million used by the
discontinued operations. The decrease in net cash used by investing activities
of $53.1 million was primarily due to lower capital spending in 2000 versus
1999. Cash capital expenditures for 2000 of $214.4 million were $54.5 million
lower than 1999 which totaled $268.9 million. Of the amount of cash capital
expenditures, $73.8 million (34%) was spent by Brink's, $74.5 million (35%) was
spent by BHS, $60.1 million (28%) was spent by BAX Global and $5.2 million (2%)
was spent by Other Operations. Lower cash capital expenditures in 2000 as
compared to 1999 were primarily due to lower levels of spending at BHS for
customer installations, at BAX Global for aircraft modifications and at Brink's
for IT expenditures. Cash capital expenditures in 2001 are currently expected to
range from approximately $240 million to $260 million, and an additional amount
of approximately $20 million of necessary or committed expenditures relating to
the discontinued operations. Expected capital expenditures for 2001 reflect an
increase in customer installations at BHS, building improvements at Brink's and
increased spending on information technology at BAX Global, partially offset by
a decrease in aircraft related expenditures due to the reduction in the fleet of
aircraft at ATI. Capital expenditures for the discontinued operations reflect
spending in the first half of 2001 to develop a deep mine in order to achieve
the expected sales proceeds. The foregoing amounts exclude expenditures that
have been or are expected to be financed through capital and operating leases.
Aircraft heavy maintenance expenditures for 2000 decreased by $2.5 million as
compared to 1999. This decrease was primarily due to increased efforts to
control spending.

Net cash flow used in investing activities for 2000 included approximately $2.2
million of cash proceeds relating to the sale of an investment held by the coal
operations and $3.9 million was used to fund other acquisitions (primarily at
Brink's). Cash flows provided by investing activities in 1999 included the
proceeds from the partial sale of a restricted investment more than offset by
the initial funding of $15.0 million to the VEBA. In 1998, cash flows from
investing activities benefited from additional proceeds from the sale of
property, plant and equipment which partially offset the impact of the
acquisition of ATI for a purchase price of approximately $29 million.

Financing Activities

Net cash flows used in financing activities were $124.5 million for 2000
compared with cash provided of $44.8 million in 1999. The 1999 level included
borrowings used to finance the purchase of a portion of the Company's Preferred
Stock (discussed in more detail below). The 2000 level reflected repayments
under a bank credit facility (described below) due primarily to the sale of
accounts receivable at BAX Global, as well as increased borrowings at December
31, 1999 and repayments of a portion of the debt of Brink's France and
Venezuela.

In October 2000, the Company entered into a $370 million bank credit agreement
to replace an existing facility that was due to expire in 2001. Under the new
agreement, the Company may borrow up to $185 million over a three-year term
ending October 3, 2003 and up to $185 million over a one-year term ending
October 2, 2001. The Company has the option to borrow on a revolving basis from
the group of banks participating in the facility or on a competitive bid basis
among the individual banks. For borrowings on a revolving basis, the Company may
select either an offshore rate or a base rate. The offshore rate is based on
LIBOR plus a margin determined by the Company's credit rating. The base rate is
the higher of the prime rate or the federal funds rate plus a margin. The
applicable interest rate is increased by 0.125% during any period that amounts
outstanding under the facility exceed 50% of the total commitment. The Company
also pays a fee of 0.15% on the one-year commitment and 0.175% on the three-year
commitment. At December 31, 2000, the Company classified the $59.8 million
outstanding under the one-year portion of the credit agreement as long-term
debt, reflecting the refinancing of those borrowings with proceeds from a
private placement of Senior Notes subsequent to year end, as discussed below.

The previous bank credit facility provided for total borrowings of up to $350
million, consisting of a $100 million term loan and a $250 million revolving
credit arrangement. Interest on borrowings under that facility was based, at the
Company's option, on either the prime rate, certificate of deposit rate,
Eurodollar rate, or money market rate plus a margin determined by the Company's
credit rating. The Company also paid a commitment fee on the unused portion of
the facility. At December 31, 1999, $100

                                       --
                                       17

million was outstanding under the term loan and $185 million was outstanding
under the revolving credit portion of the facility.

As mentioned above, in January 2001, the Company completed a $75 million private
placement of Senior Notes. The notes are comprised of $55 million of 7.84%
Senior Notes, Series A ("Series A notes") due in 2007 and $20 million of 8.02%
Senior Notes, Series B ("Series B notes") due in 2008. Interest on the Series A
and Series B notes is payable semi-annually and the Company is required to
prepay, without penalty, $18.3 million principal of the Series A notes in each
of January 2005 and 2006. The Company also has the option to prepay all or a
portion of the Series A or Series B notes prior to maturity with a prepayment
penalty. The $75 million proceeds from issuance of the Senior Notes were used to
repay borrowings under the revolving credit facility.

Both the bank credit agreement and the agreement under which the Senior Notes
were issued contain various financial and other covenants. The financial
covenants limit the Company's total indebtedness, provide for minimum coverage
of interest costs, and require the Company to maintain a minimum level of net
worth. The previous bank credit facility also contained various covenants.

Market Risk Exposures

The Company has activities in well over 100 countries and a number of different
industries. These operations expose the Company to a variety of market risks,
including the effects of changes in foreign currency exchange rates and interest
rates. In addition, the Company consumes and sells certain commodities in its
businesses, exposing it to the effects of changes in the prices of such
commodities. These financial and commodity exposures are monitored and managed
by the Company as an integral part of its overall risk management program. The
diversity of foreign operations helps to mitigate a portion of the impact that
foreign currency rate fluctuations in any one country may have on the translated
results. The Company's risk management program considers this favorable
diversification effect as it measures the Company's exposure to financial
markets, and as appropriate, seeks to reduce the potentially adverse effects
that the volatility of certain markets may have on its operating results.

The Company utilizes various derivative and non-derivative hedging instruments,
as discussed below, to hedge its foreign currency, interest rate, and commodity
exposures when appropriate. The risk that counterparties to such instruments may
be unable to perform is minimized by limiting the counterparties to major
financial institutions. Management of the Company does not expect any losses due
to such counterparty default.

The Company assesses interest rate, foreign currency and commodity risks by
continually identifying and monitoring changes in interest rate, foreign
currency and commodity exposures that may adversely impact expected future cash
flows and by evaluating hedging opportunities. The Company maintains risk
management control systems to monitor the risks attributable to both the
Company's outstanding and forecasted transactions as well as offsetting hedge
positions. The risk management control systems involve the use of analytical
techniques to estimate the expected impact of changes in interest rates, foreign
currency rates and commodity prices on the Company's future cash flows. The
Company does not use derivative instruments for purposes other than hedging.

The sensitivity analyses discussed below for the market risk exposures were
based on facts and circumstances in effect at December 31, 2000. Actual results
will be determined by a number of factors that are not under management's
control and could vary significantly from those disclosed.

Interest Rate Risk

The Company primarily uses variable-rate debt denominated in US dollars and
foreign currencies, primarily including Argentine pesos, Venezuelan bolivars,
French francs, Singapore dollars, British pounds and Dutch guilders, to finance
its operations. These debt obligations expose the Company to variability in
interest expense due to changes in the general level of interest rates in these
countries. Venezuela is considered a highly inflationary economy, and therefore,
the effects of increases or decreases in that country's interest rates may be
partially offset by corresponding decreases or increases in the currency
exchange rates that will affect the US dollar value of the underlying debt.

In order to limit the variability of the interest expense on its debt, the
Company converts the variable-rate cash flows on a portion of its $185.0 million
three year revolving credit facility and its Singapore dollar credit facility to
fixed-rate cash flows by entering into interest rate swaps which involve the
exchange of floating interest payments for fixed interest payments. In addition
to the US dollar denominated fixed interest rate swaps, the Company also has
fixed-rate debt denominated in foreign currencies (primarily French francs). The
fixed rate debt and interest rate swaps are subject to fluctuations in their
fair values as a result of changes in interest rates.

                                       --
                                       18

Based on the overall interest rate level of both US dollar and foreign currency
denominated variable rate debt outstanding at December 31, 2000, a hypothetical
10% change (as a percentage of interest rates on outstanding debt) in the
Company's effective interest rate from year-end 2000 levels would change
interest expense by approximately $1.1 million over a twelve month period. Debt
designated as hedged by the interest rate swaps has been excluded from this
amount. The effect on the fair value of US and foreign currency denominated
fixed rate debt (including US dollar fixed interest rate swaps) for a
hypothetical 10% uniform shift (as a percentage of market interest rates) in the
yield curves for interest rates in various countries from year-end 2000 levels
would be immaterial to the balance sheet.

Foreign Currency Risk

The Company, through its BAX Global and Brink's operations, has certain
exposures to the effects of foreign exchange rate fluctuations on reported
results in US dollars of foreign operations. Due in part to the favorable
diversification effects resulting from operations in well over 100 countries,
the Company has not generally entered into foreign exchange hedges to mitigate
these exposures.

The Company is exposed periodically to the foreign currency rate fluctuations
that affect transactions not denominated in the functional currency of domestic
and foreign operations. To mitigate these exposures, the Company, from time to
time, enters into foreign currency forward contracts.

Mineral Ventures has operations which are exposed to currency risk arising from
gold sales denominated in US dollars while its local operating costs are
denominated in Australian dollars. Mineral Ventures utilizes foreign currency
forward contracts to hedge the variability in cash flows resulting from these
exposures for up to forty-seven months into the future.

In addition, the Company has net investments in a number of foreign subsidiaries
that are translated at exchange rates at the balance sheet date. Resulting
cumulative translation adjustments are recorded as a separate component of
shareholders' equity and exposes the Company to adjustments resulting from
foreign exchange rate volatility. The Company, at times, uses non-derivative
financial instruments to hedge this exposure. Currency exposure related to the
net assets of the Brink's subsidiary in France are managed, in part, through a
foreign currency denominated debt agreement (seller financing) entered into as
part of the acquisition by the Company, which was fully repaid in early 2001.
All other hedges of net investments in foreign subsidiaries were immaterial to
the Company as of December 31, 2000 and 1999. The translation adjustments for
hyperinflationary economies in which the Company operates (currently Venezuela)
are recorded as a component of net income and exposes the Company to adjustments
resulting from foreign exchange rate volatility.

The effects of a hypothetical simultaneous 10% appreciation in the US dollar
from year end 2000 levels against all other currencies of countries in which the
Company operates were measured for their potential impact on, 1) translation of
earnings into US dollars based on 2000 results, 2) transactional exposures, and
3) translation of balance sheet equity accounts. The hypothetical effects would
be approximately $6.5 million unfavorable for the translation of earnings into
US dollars, approximately $3.0 million favorable earnings effect for
transactional exposures, and approximately $24.8 million unfavorable for the
translation of balance sheet equity accounts.

Commodities Price Risk

The Company consumes or sells various commodities in the normal course of its
business and utilizes derivative instruments to minimize the variability in
forecasted cash flows due to price movements in these commodities. The
derivative contracts are entered into in accordance with guidelines set forth in
the Company's hedging policies.

The Company utilizes forward swap contracts for the purchase of jet fuel to fix
a portion of forecasted jet fuel costs at specific price levels and it utilizes
option strategies to hedge a portion of the remaining risk associated with
changes in the price of jet fuel. In addition, the Company, in some cases, is
able to adjust its pricing to partially offset large increases in the cost of
the jet fuel. The Company utilizes forward gold sales contracts to fix the
selling price on a portion of its forecasted gold sales from the Stawell gold
mine. The Company also utilizes forward swap contracts to fix the selling price
on a portion of its forecasted natural gas sales from Allied Operations and
collar contracts to fix a portion of its forecasted jet fuel costs and
forecasted natural gas sales within a specified price range.

The following table represents the Company's outstanding commodity hedge
contracts as of December 31, 2000:

                                                        Weighted
                                                         Average      Estimated
(In thousands, except                   Notional        Contract           Fair
average contract rates)                   Amount            Rate          Value
- --------------------------------------------------------------------------------
                                                               
Forward gold sale contracts (a)               52         $   277        $   (13)
Forward swap contracts:
 Jet fuel purchases (pay fixed) (b)       12,000           .7588           (134)
 Natural gas sales (receive fixed) (c)     2,200            .290         (7,091)
Commodity options:
 Jet fuel purchases (collar) (b)           9,800         .9704/.6982       (266)
 Natural gas sales (collar) (c)            1,360        7.7805/4.9512      (347)
================================================================================

(a)   Notional amount in ounces of gold.
(b)   Notional amount in gallons of fuel.
(c)   Notional amount in MMBTUs.

                                       --
                                       19

Contingent Liabilities

In April 1990, the Company entered into a settlement agreement to resolve
certain environmental claims against the Company arising from hydrocarbon
contamination at a petroleum terminal facility ("Tankport") in Jersey City, New
Jersey, which operations were sold in 1983. Under the settlement agreement, the
Company is obligated to pay 80% of the remediation costs. Based on data
available to the Company and its environmental consultants, the Company
estimates its portion of the future clean-up costs, on an undiscounted basis,
using existing technologies to be between $6.0 million and $9.5 million.
Management is unable to determine that any amount within that range is a better
estimate due to a variety of uncertainties, which include the extent of the
contamination at the site, the permitted technologies for remediation and the
regulatory standards by which the clean-up will be conducted. The clean-up
estimates have been modified from prior years in light of cost inflation, the
application of new technologies and certain assumptions the Company is making
with respect to the end use of the property. The estimate of costs and the
timing of payments could change as a result of changes to the remediation plan
required, changes in the technology available to treat the site, unforeseen
circumstances existing at the site and additional cost inflation.

The Company commenced insurance litigation in 1990, in the United States
District Court of the District of New Jersey, seeking a declaratory judgment
that all amounts payable by the Company pursuant to the Tankport obligation were
reimbursable under comprehensive general liability and pollution liability
policies maintained by the Company. The Company was able to conclude settlement
with all of its insurers without a trial. Taking into account the proceeds from
the settlement with its insurers, it is the Company's belief that the ultimate
amount that it would be liable for related to the remediation of the Tankport
site will not have a significant adverse impact on the Company's results of
operations or financial position.

Capitalization

Prior to January 14, 2000, the Company had three classes of common stock:
Brink's Stock, BAX Stock and Minerals Stock, which were designed to provide
shareholders with securities reflecting the performance of the Brink's Group,
the BAX Group and the Minerals Group, respectively.

On December 6, 1999, the Company announced that the Board approved the
elimination of the tracking stock capital structure by an exchange of all
outstanding shares of Minerals Stock and BAX Stock for shares of Brink's Stock.
The Exchange took place on January 14, 2000, on which date, holders of Minerals
Stock received 0.0817 shares of Brink's Stock for each share of their Minerals
Stock; and holders of BAX Stock received 0.4848 shares of Brink's Stock for each
share of their BAX Stock. From and after the Exchange Date, Brink's Stock is the
only outstanding class of common stock of the Company and continues to trade on
the New York Stock Exchange under the symbol "PZB". Prior to the Exchange Date,
the Brink's Stock reflected the performance of the Brink's Group only; after the
Exchange Date, the Brink's Stock reflects the performance of The Pittston
Company as a whole. Shares of Brink's Stock after the Exchange are hereinafter
referred to as "Pittston Common Stock".

As a result of the exchange of all outstanding shares of BAX Stock and Minerals
Stock for Pittston Common Stock, the Company issued 10,916,367 shares of
Pittston Common Stock, which consists of 9,490,227 shares of Pittston Common
Stock equal to 100% of the Fair Market Value, as defined, of all BAX Stock and
Minerals Stock and 1,426,140 shares of Pittston Common Stock equal to the
additional 15% of the Fair Market Value of BAX Stock and Minerals Stock
exchanged pursuant to the above-described formula. Of the 10,916,367 shares
issued, 10,195,630 shares were issued to holders of BAX Stock and Minerals Stock
and 720,737 shares were issued to The Pittston Company Employee Benefits Trust.

The Company has the authority to issue up to 2,000,000 shares of preferred
stock, par value $10 per share. In January 1994, the Company issued $80.5
million (161,000 shares) of Series C Cumulative Convertible Preferred Stock (the
"Convertible Preferred Stock"). See Note 10 for the impact of the Exchange on
Convertible Preferred Stock. The Convertible Preferred Stock pays an annual
cumulative dividend of $31.25 per share payable quarterly, in cash, in arrears,
out of all funds of the Company legally available; therefore, when, as and if
declared by the Board and bears a liquidation preference of $500 per share, plus
an attributed amount equal to accrued and unpaid dividends, if any, thereon.

                                       --
                                       20

In February 2000, under the Company's common share repurchase program, the Board
reaffirmed the authority to purchase, from time to time, up to 900,000 shares of
Pittston Common Stock, not to exceed an aggregate purchase cost of $22.2
million. The authority to acquire shares remains in effect in 2001. Such shares
are to be purchased from time to time in the open market or in private
transactions, as conditions warrant. As of December 31, 2000, the Company had
the remaining authority to purchase, from time to time, shares of the
Convertible Preferred Stock not to exceed an aggregate purchase cost of $5.4
million.

Under the share repurchase programs authorized by the Board, the Company
purchased shares in the periods presented as follows:

                                                         Years Ended December 31
(Dollars in millions, shares in thousands)                       2000       1999
- --------------------------------------------------------------------------------
                                                                      
Pittston Common Stock:
 Shares                                                            --        N/A
 Cost                                                           $  --        N/A
Brink's Stock:
 Shares                                                           N/A        100
 Cost                                                           $ N/A        2.5
Convertible Preferred Stock
 Shares                                                           8.1       83.9
 Cost                                                           $ 2.2       21.0
 Excess carrying amount (a)                                     $ 1.7       19.2
================================================================================

(a) The excess of the carrying amount of the Convertible Preferred Stock over
the cash paid to holders for repurchases made during the years. This amount is
deducted from preferred dividends in the Company's Consolidated Statement of
Operations.

As of December 31, 2000, debt as a percent of capitalization (total debt and
shareholders' equity) was 46% compared to 41% at December 31, 1999.

Dividends

The Board intends to declare and pay dividends, if any, on Pittston Common Stock
based on the earnings, financial condition, cash flow and business requirements
of the Company. At present, the annual dividend rate for Pittston Common Stock
is $0.10 per share. In February 2001, the Board declared a cash dividend of
$0.025 per share on Pittston Common Stock, payable on March 1, 2001 to
shareholders of record on February 20, 2001.

During 1999 and 1998, the Board declared and the Company paid dividends
amounting to $0.10 per share and $0.24 per share of Brink's Stock and BAX Stock,
respectively. Since its distribution of Minerals Stock in 1993 and through March
31, 1998, the Company paid a cash dividend to its Minerals Stock shareholders at
an annual rate of $0.65 per share. In May 1998, the Company reduced the annual
dividend rate on Minerals Stock to $0.10 per share for shareholders as of the
May 15, 1998 record date. After paying one dividend at an annual rate of $0.10
in early 1999, the Company suspended the payment of the per share dividend on
the Minerals Stock.

In 2000 and 1999, dividends paid on the Convertible Preferred Stock amounted to
$0.9 million and $1.6 million, respectively. The lower level of cash dividends
in 2000 as compared to 1999 and 1998, reflect the repurchase of 0.08 million
shares of the Company's Convertible Preferred Stock.

Accounting Changes

Pursuant to guidance issued in Staff Accounting Bulletin ("SAB") No. 101,
"Revenue Recognition in Financial Statements," by the Securities and Exchange
Commission ("SEC") in December 1999, and a related interpretation issued in
October 2000, BHS changed its method of accounting for nonrefundable
installation revenues and a portion of the related direct costs of acquiring new
subscribers (primarily sales commissions and direct marketing expenses). As
provided in the guidance, the accounting change was implemented in the fourth
quarter of 2000, but made effective as of January 1, 2000. Accordingly, the
previously reported results for the first three quarters of 2000 were adjusted
to reflect this change. Under the new method, all of the nonrefundable
installation revenues and a portion of the related direct costs of subscriber
acquisition are deferred and recognized in income over the estimated term of the
subscriber relationship. Prior to 2000, BHS charged against earnings as
incurred, all marketing and selling costs associated with obtaining new
subscribers and recognized as revenue all non-refundable payments received from
such subscribers to the extent that costs exceeded such revenues. The Company's
results for 2000 include a non-cash, after-tax charge of $52.0 million, ($84.7
million pretax), or $1.04 per diluted share, to reflect the cumulative effect of
the accounting change on years prior to 2000. The change decreased operating
profit for 2000 by $2.3 million, reflecting a net decrease in revenues of $6.4
million and a net decrease in operating expenses of $4.1 million. Net income for
2000 was reduced by $1.4 million ($0.03 per diluted share).

                                       --
                                       21

Forward Looking Information

Certain of the matters discussed herein, including statements regarding the
timing and outcome of the sale of the coal assets, expected proceeds from the
sale of the coal business, the retention of certain assets and liabilities
following the sale of the coal assets, estimated losses on the sale of coal
assets and estimated operating losses during the sale period, the highly
competitive nature of the air and ocean freight forwarding and supply chain
management industries, the amount of proven and probable gold reserves in the
Stawell gold mine, the amount of natural gas reserves, the outcome of BAX
Global's plans to reduce capacity and cost of its airlift capabilities in the US
and to reduce station operating expenses, sales costs and overhead in the
Americas and Atlantic regions, the estimated 2001 annualized savings from BAX
Global's cost reduction programs, the timing of the payment of charges related
to BAX Global's restructuring, the amount and timing of FBLET refunds, costs of
long-term benefit obligations including black lung benefits, use of deferred tax
assets, projections about market risk, the impact of the Euro on operations at
Brink's and BAX Global, projected capital spending, potential gains on the sale
of restricted investments, environmental clean-up estimates, Health Benefit Act
expenses and the timing of funding and source of funds for the VEBA involve
forward looking information which is subject to known and unknown risks,
uncertainties, and contingencies which could cause actual results, performance
or achievements, to differ materially from those which are anticipated. Such
risks, uncertainties and contingencies, many of which are beyond the control of
the Company, include, but are not limited to, the parties who purchase the coal
business, the market for airplanes, the actual amount of natural gas reserves
held by Allied Operations, the actual amount of gold reserves in the Stawell
gold mine, the position taken by the Internal Revenue Service with respect to
the timing and amount of FBLET refunds, actual retirement experience of the
Company's coal employees, black lung claims incidence, actual dependent
information, coal industry turnover rates, actual medical and legal costs
relating to benefits, inflation rates, overall economic and business conditions,
foreign currency exchange rates, the demand for the Company's products and
services, the impact of initiatives to control costs and increase profitability,
pricing and other competitive industry factors, fuel prices, market conditions
for restricted investments, new government regulations and/or legislative
initiatives, issuance of permits, judicial decisions, variations in costs or
expenses, geological conditions, variations in the spot prices of coal and the
ability of counterparties to perform.

                                       --
                                       22

The Pittston Company and Subsidiaries

- --------------------------------------------------------------------------------
STATEMENT OF MANAGEMENT RESPONSIBILITY
- --------------------------------------------------------------------------------

The management of The Pittston Company (the "Company") is responsible for
preparing the accompanying consolidated financial statements and for their
integrity and objectivity. The statements were prepared in accordance with
accounting principles generally accepted in the United States of America.
Management has also prepared the other information in the annual report and is
responsible for its accuracy.

In meeting our responsibility for the integrity of the consolidated financial
statements, we maintain a system of internal controls designed to provide
reasonable assurance that assets are safeguarded, that transactions are executed
in accordance with management's authorization and that the accounting records
provide a reliable basis for the preparation of the consolidated financial
statements. Qualified personnel throughout the organization maintain and monitor
these internal controls on an ongoing basis. In addition, the Company maintains
an internal audit department that systematically reviews and reports on the
adequacy and effectiveness of the controls, with management follow-up as
appropriate.

Management has also established a formal Business Code of Ethics which is
distributed throughout the Company. We acknowledge our responsibility to
establish and preserve an environment in which all employees properly understand
the fundamental importance of high ethical standards in the conduct of our
business.

The Company's consolidated financial statements have been audited by KPMG LLP,
independent auditors. During the audit they review and make appropriate tests of
accounting records and internal controls to the extent they consider necessary
to express an opinion on the Company's consolidated financial statements.

The Company's Board of Directors pursues its oversight role with respect to the
Company's consolidated financial statements through the Audit and Ethics
Committee, which is composed solely of outside directors. The Committee meets
periodically with the independent auditors, internal auditors and management to
review the Company's control system and to ensure compliance with applicable
laws and the Company's Business Code of Ethics.

We believe that the policies and procedures described above are appropriate and
effective and do enable us to meet our responsibility for the integrity of the
Company's consolidated financial statements.

- --------------------------------------------------------------------------------
INDEPENDENT AUDITOR'S REPORT
- --------------------------------------------------------------------------------

The Board of Directors and Shareholders
The Pittston Company

We have audited the accompanying consolidated balance sheets of The Pittston
Company and subsidiaries (the "Company") as of December 31, 2000 and 1999, and
the related consolidated statements of operations, shareholders' equity and
other comprehensive income and cash flows for each of the years in the
three-year period ended December 31, 2000. These consolidated financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of The Pittston Company
and subsidiaries as of December 31, 2000 and 1999, and the results of their
operations and their cash flows for each of the years in the three-year period
ended December 31, 2000, in conformity with accounting principles generally
accepted in the United States of America.

As more fully discussed in Note 1 to the consolidated financial statements, the
Company changed its method of accounting for nonrefundable installation revenues
and the related direct costs of acquiring new subscribers in 2000 as a result of
the implementation of Staff Accounting Bulletin No. 101, "Revenue Recognition in
Financial Statements."

As more fully discussed in Note 1 to the consolidated financial statements, the
Company changed its method of accounting for derivative instruments and hedging
activities in 1998 as a result of adopting Statement of Financial Accounting
Standards No. 133, "Accounting for Derivative Instruments and Hedging
Activities."

KPMG LLP
Richmond, Virginia
February 1, 2001

                                       --
                                       23

The Pittston Company and Subsidiaries
- --------------------------------------------------------------------------------
CONSOLIDATED BALANCE SHEETS
- --------------------------------------------------------------------------------

                                                                                                  December 31
(In thousands, except per share amounts)                                                    2000            1999
- ------------------------------------------------------------------------------------------------------------------------
                                                                                                       
ASSETS
Current assets:
Cash and cash equivalents                                                            $    97,751            131,159
Accounts receivable:
 Trade (Note 3)                                                                          547,747            637,808
 Other                                                                                    52,174             37,023
- ------------------------------------------------------------------------------------------------------------------------
                                                                                         599,921            674,831

 Less estimated uncollectible amounts                                                     39,803             36,238
- ------------------------------------------------------------------------------------------------------------------------
                                                                                         560,118            638,593
Prepaid expenses and other current assets                                                 57,876             51,530
Deferred income taxes (Note 6)                                                            81,408             50,255
Current assets of discontinued operations (Note 16)                                       16,473             30,366
- ------------------------------------------------------------------------------------------------------------------------
Total current assets                                                                     813,626            901,903
Property, plant and equipment, at cost (Notes 1, 4 and 13)                             1,394,630          1,327,419
 Less accumulated depreciation and amortization                                          563,073            494,234
- ------------------------------------------------------------------------------------------------------------------------
                                                                                         831,557            833,185
Goodwill, net of accumulated amortization (Notes 1 and 5)                                232,969            238,641
Deferred pension assets (Note 12)                                                        118,381            113,593
Deferred income taxes (Note 6)                                                           229,693             79,569
Other assets                                                                             141,936            107,927
Noncurrent assets of discontinued operations (Note 16)                                   110,547            184,883
- ------------------------------------------------------------------------------------------------------------------------
Total assets                                                                         $ 2,478,709          2,459,701
========================================================================================================================

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Short-term borrowings (Note 7)                                                       $    51,003             90,085
Current maturities of long-term debt (Note 7)                                             34,378             31,905
Accounts payable                                                                         315,956            301,194
Accrued liabilities:
 Taxes                                                                                    81,951             68,583
 Workers' compensation and other claims                                                   35,648             33,544
 Payroll and vacation                                                                    105,105             84,744
 Miscellaneous (Note 12)                                                                 270,532            219,556
- ------------------------------------------------------------------------------------------------------------------------
                                                                                         493,236            406,427
Current liabilities of discontinued operations (Note 16)                                   3,734              3,450
- ------------------------------------------------------------------------------------------------------------------------
Total current liabilities                                                                898,307            833,061

Long-term debt, less current maturities (Note 7)                                         311,418            392,521
Postretirement benefits other than pensions (Note 12)                                    401,093            240,770
Workers' compensation and other claims                                                    85,116             87,083
Deferred revenue                                                                         123,831              3,804
Deferred income taxes (Note 6)                                                            16,654             16,272
Other liabilities                                                                        142,225            115,286
Noncurrent liabilities of discontinued operations (Note 16)                               24,242             21,263
Commitments and contingent liabilities (Notes 7, 11, 12, 15, 16 and 18)
Shareholders' equity (Notes 9 and 10):
 Preferred stock, par value $10 per share,
  Authorized: 2,000 shares $31.25 Series C Cumulative Convertible Preferred Stock
  Issued and outstanding: 2000 - 21 shares; 1999 - 30 shares                                 214                296
 Pittston Brink's Group common stock, par value $1 per share:
  Authorized: 100,000 shares
  Issued and outstanding: 2000 - 51,778 shares; 1999 - 40,861 shares                      51,778             40,861
 Pittston BAX Group common stock, par value $1 per share:
  Authorized: 1999 - 50,000 shares
  Issued and outstanding: 1999 - 20,825 shares                                                --             20,825
 Pittston Minerals Group common stock, par value $1 per share:
  Authorized: 1999 - 20,000 shares
  Issued and outstanding: 1999 - 10,086 shares                                                --             10,086
 Capital in excess of par value                                                          348,752            341,011
 Retained earnings                                                                       182,525            443,349
 Accumulated other comprehensive loss                                                    (82,020)           (56,528)
 Employee benefits trust, at market value (Note 10)                                      (25,426)           (50,259)
- ------------------------------------------------------------------------------------------------------------------------
Total shareholders' equity                                                               475,823            749,641
- ------------------------------------------------------------------------------------------------------------------------
Total liabilities and shareholders' equity                                           $ 2,478,709          2,459,701
========================================================================================================================

See accompanying notes to consolidated financial statements.

                                       --
                                       24

The Pittston Company and Subsidiaries
- --------------------------------------------------------------------------------
CONSOLIDATED STATEMENTS OF OPERATIONS
- --------------------------------------------------------------------------------

                                                                                       Years Ended December 31
(In thousands, except per share amounts)                                         2000             1999             1998
- ----------------------------------------------------------------------------------------------------------------------------
                                                                                                    
Operating revenues                                                           $ 3,798,592        3,684,625        3,228,247
Net sales                                                                         35,520           25,073           23,332
- ----------------------------------------------------------------------------------------------------------------------------
Operating revenues and net sales (Note 1)                                      3,834,112        3,709,698        3,251,579
- ----------------------------------------------------------------------------------------------------------------------------
Costs and expenses (Note 1):
Operating expenses                                                             3,232,893        3,041,428        2,675,537
Cost of sales                                                                     31,345           24,260           18,575
Selling, general and administrative expenses (includes a
 $15,723 write-off of long-lived assets in 1998)                                 477,759          457,817          436,378
Restructuring charge (includes a $45,180
 write-off of long-lived assets in 2000) (Note 13)                                57,487               --               --
- ----------------------------------------------------------------------------------------------------------------------------
Total costs and expenses                                                       3,799,484        3,523,505        3,130,490
Other operating income, net                                                       13,059           10,380            7,350
Operating profit                                                                  47,687          196,573          128,439
Interest income                                                                    4,177            3,659            4,141
Interest expense                                                                 (43,416)         (38,152)         (39,056)
Other income (expense), net (Note 3)                                              (3,819)           7,423            3,811
- ----------------------------------------------------------------------------------------------------------------------------
Income from continuing operations before income taxes
 and cumulative effect of change in accounting principle                           4,629          169,503           97,335
Provision for income taxes (Note 6)                                                1,944           61,455           36,162
- ----------------------------------------------------------------------------------------------------------------------------
Income from continuing operations before
 cumulative effect of change in accounting principle                               2,685          108,048           61,173
- ----------------------------------------------------------------------------------------------------------------------------
Discontinued operations (Note 16):
 Income (loss) from operations, net of tax (includes a $23,978 write-off of
  long-lived assets, a $27,340 impairment of goodwill and
  $2,165 of mine closure costs in 1999)                                          (18,235)         (73,391)           4,883
 Estimated net loss on disposition, net of tax                                  (189,141)              --               --
Income (loss) from discontinued operations                                      (207,376)         (73,391)           4,883
- ----------------------------------------------------------------------------------------------------------------------------
Income (loss) before cumulative effect of change
 in accounting principle                                                        (204,691)          34,657           66,056
Cumulative effect of change in accounting principle, net of tax (Note 1)         (51,952)              --               --
- ----------------------------------------------------------------------------------------------------------------------------
Net income (loss)                                                               (256,643)          34,657           66,056
- ----------------------------------------------------------------------------------------------------------------------------
Preferred stock dividends, net (Notes 8 and 10)                                      873           17,621           (3,524)
- ----------------------------------------------------------------------------------------------------------------------------
Net income (loss) attributed to common shares                                $  (255,770)          52,278           62,532
============================================================================================================================
Net income (loss) per common share (actual for 2000,
pro forma for 1999 and 1998)(Note 8):
Basic:
 Continuing operations                                                       $      0.07             2.55             1.18
 Discontinued operations                                                           (4.14)           (1.49)            0.10
 Cumulative effect of change in accounting principle                               (1.04)              --               --
- ----------------------------------------------------------------------------------------------------------------------------
Total basic                                                                  $     (5.11)            1.06             1.28
- ----------------------------------------------------------------------------------------------------------------------------
Diluted:
 Continuing operations                                                       $      0.05             2.19             1.17
 Discontinued operations                                                           (4.13)           (1.49)            0.10
 Cumulative effect of change in accounting principle                               (1.04)              --               --
- ----------------------------------------------------------------------------------------------------------------------------
Total diluted                                                                $     (5.12)            0.70             1.27
============================================================================================================================

                                       --
                                       25

The Pittston Company and Subsidiaries
- --------------------------------------------------------------------------------
CONSOLIDATED STATEMENTS OF OPERATIONS (CONTINUED)
- --------------------------------------------------------------------------------

                                                                                          Years Ended December 31
(In thousands, except per share amounts)                                          2000              1999             1998
- ----------------------------------------------------------------------------------------------------------------------------
                                                                                                            
Pittston Brink's Group (Note 1):
Net income per common share (Note 8):
 Basic                                                                        $    N/A              2.16             2.04
 Diluted                                                                           N/A              2.15             2.02
- ----------------------------------------------------------------------------------------------------------------------------
Pittston BAX Group (Note 1):
Net income (loss) per common share (Note 8):
 Basic                                                                        $    N/A              1.73            (0.68)
 Diluted                                                                           N/A              1.72            (0.68)
- ----------------------------------------------------------------------------------------------------------------------------
Pittston Minerals Group (Note 1):
Net income (loss) per common share (Note 8):
Basic:
 Continuing operations                                                        $     N/A             0.93            (1.01)
 Discontinued operations                                                            N/A            (8.26)            0.59
- ----------------------------------------------------------------------------------------------------------------------------
Total basic                                                                   $     N/A            (7.33)           (0.42)
- ----------------------------------------------------------------------------------------------------------------------------
Diluted:
 Continuing operations                                                        $     N/A            (0.98)           (1.01)
 Discontinued operations                                                            N/A            (7.63)            0.59
- ----------------------------------------------------------------------------------------------------------------------------
Total diluted                                                                 $     N/A            (8.61)           (0.42)
============================================================================================================================
Pro forma amounts, assuming the change in accounting
 principle is applied retroactively:
Pro forma income from continuing operations                                   $   2,685          103,225           54,398
Income (loss) from discontinued operations                                     (207,376)         (73,391)           4,883
- ----------------------------------------------------------------------------------------------------------------------------
Pro forma net income (loss)                                                   $(204,691)          29,834           59,281
- ----------------------------------------------------------------------------------------------------------------------------
Preferred stock dividends, net (Notes 8 and 10)                                     873           17,621           (3,524)
- ----------------------------------------------------------------------------------------------------------------------------
Pro forma net income (loss) attributed to common shares                       $(203,818)          47,455           55,757
- ----------------------------------------------------------------------------------------------------------------------------
Pro forma net income (loss) per common share
Basic:
 Continuing operations                                                        $    0.07             2.46             1.04
 Discontinued operations                                                          (4.14)           (1.49)            0.10
- ----------------------------------------------------------------------------------------------------------------------------
Total basic, pro forma                                                        $   (4.07)            0.97             1.14
- ----------------------------------------------------------------------------------------------------------------------------
Diluted:
 Continuing operations                                                        $    0.05             2.09             1.03
 Discontinued operations                                                          (4.13)           (1.49)            0.10
- ----------------------------------------------------------------------------------------------------------------------------
Total diluted, pro forma                                                      $   (4.08)            0.60             1.13
============================================================================================================================

See accompanying notes to consolidated financial statements.

                                       --
                                       26

The Pittston Company and Subsidiaries
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY AND OTHER COMPREHENSIVE INCOME

                                                                                                Years Ended December 31

(In thousands, except per share data)                                                         2000         1999         1998
- ------------------------------------------------------------------------------------------------------------------------------
                                                                                                           
Series C Preferred Stock, $31.25 per share (Note 10)
Balance, beginning of year                                                                $     296        1,134        1,138
Retirement of stock under share repurchase program                                              (82)        (838)          (4)
- ------------------------------------------------------------------------------------------------------------------------------
Balance, end of year                                                                            214          296        1,134
==============================================================================================================================
Pittston Brink's Group Common Stock
Balance, beginning of year                                                                   40,861       40,961       41,130
Retirement of stock under share repurchase program and other (Note 10)                           --         (100)        (169)
Exchange of stock (Note 10)                                                                  10,917           --           --
- ------------------------------------------------------------------------------------------------------------------------------
Balance, end of year                                                                         51,778       40,861       40,961
==============================================================================================================================
Pittston BAX Group Common Stock
Balance, beginning of year                                                                   20,825       20,825       20,378
Shares issued to employee benefits trust/other (Note 10)                                         --           --        1,494
Retirement of stock under share repurchase program (Note 10)                                     --           --       (1,047)
Exchange of stock (Note 10)                                                                 (20,825)          --           --
- ------------------------------------------------------------------------------------------------------------------------------
Balance, end of year                                                                             --       20,825       20,825
==============================================================================================================================
Pittston Minerals Group Common Stock
Balance, beginning of year                                                                   10,086        9,186        8,406
Shares issued to employee benefits trust/other (Note 10)                                         --          900          780
Exchange of stock (Note 10)                                                                 (10,086)          --           --
- ------------------------------------------------------------------------------------------------------------------------------
Balance, end of year                                                                             --       10,086        9,186
==============================================================================================================================
Capital in excess of par value
Balance, beginning of year                                                                  341,011      403,148      430,970
Tax benefit of stock options exercised (Note 6)                                                 105           36        4,766
Shares issued to employee benefits trust (Note 10)                                               --          563       12,781
Shares released from employee benefits trust (Note 10)                                         (380)      (1,309)     (13,675)
Remeasurement of employee benefits trust (Note 10)                                           (8,328)     (21,037)     (25,993)
Retirement of stock under share repurchase programs (Note 10)                                (3,814)     (40,288)      (7,024)
Exchange of stock (Note 10)                                                                  20,158           --           --
Other                                                                                            --         (102)       1,323
- ------------------------------------------------------------------------------------------------------------------------------
Balance, end of year                                                                        348,752      341,011      403,148
==============================================================================================================================
Retained earnings
Balance, beginning of year                                                                  443,349      401,186      359,940
Net income (loss)                                                                          (256,643)      34,657       66,056
Retirement of stock under share repurchase programs (Note 10)                                 1,734       17,732      (10,212)
Dividends declared (Note 10)                                                                 (5,871)     (10,328)     (14,032)
Exchange of stock (Note 10)                                                                     (44)          --           --
Other                                                                                            --          102         (566)
- ------------------------------------------------------------------------------------------------------------------------------
Balance, end of year                                                                        182,525      443,349      401,186
==============================================================================================================================
Accumulated other comprehensive loss
Balance, beginning of year                                                                  (56,528)     (51,865)     (41,762)
Foreign currency translation adjustment, net                                                (14,075)     (10,736)      (7,125)
Deferred benefit (expense) on cash flow hedges, net                                         (11,096)       5,849       (3,309)
Other                                                                                          (321)         224          331
- ------------------------------------------------------------------------------------------------------------------------------
Balance, end of year                                                                        (82,020)     (56,528)     (51,865)
==============================================================================================================================
Employee benefits trust
Balance, beginning of year                                                                  (50,259)     (88,547)    (134,582)
Shares issued to employee benefits trust (Note 10)                                               --       (1,463)     (15,081)
Shares released from employee benefits trust (Note 10)                                       16,700       18,714       35,123
Remeasurement of employee benefits trust (Note 10)                                            8,328       21,037       25,993
Exchange of stock                                                                              (195)          --           --
- ------------------------------------------------------------------------------------------------------------------------------
Balance, end of year                                                                        (25,426)     (50,259)     (88,547)
==============================================================================================================================
Total shareholders' equity - end of year                                                  $ 475,823      749,641      736,028
Comprehensive income (loss)
Net income (loss) attributed to common shares                                             $(255,770)      52,278       62,532
Other comprehensive income (loss), net of tax:
 Foreign currency translation adjustments, net of tax effect of ($1,049), ($319) and $787   (14,075)     (10,736)      (7,125)
 Cash flow hedges:
  Transition adjustment, net of tax effect of $1,960 in 1998                                     --           --       (3,663)
  Net cash flow hedge gains (losses), net of tax effect of $1,787, ($3,562) and $501         (6,264)       8,614         (710)
  Reclassification adjustment, net of tax effect of $2,830, $1,449 and ($617)                (4,832)      (2,765)       1,064
 Other, net of tax effect of $173, ($110) and ($189)                                           (321)         224          331
- ------------------------------------------------------------------------------------------------------------------------------
Comprehensive income (loss)                                                               $(281,262)      47,615       52,429
==============================================================================================================================

See accompanying notes to consolidated financial statements.

                                       --
                                       27

The Pittston Company and Subsidiaries
 CONSOLIDATED STATEMENTS OF CASH FLOWS

                                                                                             Years Ended December 31
(In thousands)                                                                            2000         1999         1998
- ------------------------------------------------------------------------------------------------------------------------------
                                                                                                          
Cash flows from operating activities:
Net income (loss)                                                                       $(256,643)      34,657       66,056
Adjustments to reconcile (loss) net income to net cash provided by
   continuing operations:
Cumulative effect of change in accounting principle, net of tax                            51,952           --           --
Estimated loss on disposition of discontinued operations, net of tax                      189,141           --           --
 Noncash charges and other write-offs                                                      47,771           34       20,133
 Depreciation and amortization                                                            188,950      148,853      122,297
 Provision for aircraft heavy maintenance                                                  40,245       50,220       39,821
 (Credit) provision for deferred income taxes                                             (28,038)      12,785       (4,307)
 Provision for pensions, noncurrent                                                        10,859        8,493        6,913
 Provision for uncollectible accounts receivable                                           22,876       14,706       21,198
 Equity in earnings of unconsolidated affiliates, net of dividends received                (3,593)      (3,977)        (880)
 Minority interest expense                                                                  3,674          911        1,742
 (Gain) loss on sales of property, plant and equipment and
  other assets and investments                                                                110       (9,468)      (5,419)
 Other operating, net                                                                      12,236       11,332       12,528
Change in operating assets and liabilities, net of effects
  of acquisitions and dispositions:
 (Increase) decrease in accounts receivable                                                40,532      (57,483)      (2,233)
 (Increase) decrease in prepaid expenses and other current assets                          (4,501)         318       (2,881)
 Increase in other assets                                                                 (27,306)      (6,482)      (5,718)
 Increase in accounts payable and accrued liabilities                                      11,930       25,384        4,147
 Increase in workers' compensation and other claims, noncurrent                             2,438          144        1,064
 Increase in other liabilities                                                             10,847        9,483        6,824
 Other, net                                                                                 2,713          (73)     (10,078)
- ------------------------------------------------------------------------------------------------------------------------------
Net cash provided by continuing operations                                                316,193      239,837      271,207
Net cash provided (used) by discontinued operations                                        48,563       89,434      (39,399)
- ------------------------------------------------------------------------------------------------------------------------------
Net cash provided by operating activities                                                 364,756      329,271      231,808
- ------------------------------------------------------------------------------------------------------------------------------
Cash flows from investing activities:
Additions to property, plant and equipment                                               (214,443)    (268,909)    (239,419)
Proceeds from disposal of property, plant and equipment                                     4,063        8,829       11,952
Aircraft heavy maintenance expenditures                                                   (50,461)     (52,926)     (40,466)
Acquisitions, net of cash acquired, and related contingency payments                       (3,880)      (4,066)     (34,521)
Dispositions of other assets and investments                                                   --        9,516        1,711
Discontinued operations, net                                                               (7,446)     (10,507)      11,260
Other, net                                                                                 (1,515)      (8,719)     (11,497)
- ------------------------------------------------------------------------------------------------------------------------------
Net cash used by investing activities                                                    (273,682)    (326,782)    (300,980)
- ------------------------------------------------------------------------------------------------------------------------------
Cash flows from financing activities:
Increase (decrease) in short-term borrowings                                              (39,182)       4,411       29,734
Additions to debt                                                                         461,383      193,777      188,669
Reductions of debt                                                                       (539,508)    (121,985)    (110,474)
Repurchase of stock of the Company                                                         (2,162)     (23,494)     (19,437)
Proceeds from exercise of stock options and employee stock purchase plan                      630        2,708        8,098
Dividends paid                                                                             (5,643)      (9,792)     (13,402)
Other, net                                                                                     --         (849)          --
- ------------------------------------------------------------------------------------------------------------------------------
Net cash provided (used) by financing activities                                         (124,482)      44,776       83,188
- ------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in cash and cash equivalents                                      (33,408)      47,265       14,016
Cash and cash equivalents at beginning of year                                            131,159       83,894       69,878
- ------------------------------------------------------------------------------------------------------------------------------
Cash and cash equivalents at end of year                                                $  97,751      131,159       83,894
==============================================================================================================================

See accompanying notes to consolidated financial statements

                                       --
                                       28

The Pittston Company and Subsidiaries
- --------------------------------------------------------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
(In thousands, except per share amounts)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

As used herein, the "Company" includes The Pittston Company except as otherwise
indicated by the context. The Company is comprised of four operating segments
and one discontinued segment. The four operating segments are Brink's,
Incorporated ("Brink's"), Brink's Home Security, Inc. ("BHS"), BAX Global Inc.
("BAX Global") and Other Operations which consists of Pittston Mineral Ventures
("Mineral Ventures") and the Company's timber and gas operations (collectively,
"Allied Operations"). The discontinued segment is Pittston Coal Operations
("Coal Operations").

On December 6, 1999, the Company announced its intention to exit the coal
business through the sale of the Company's coal mining operations and reserves.
Based on progress to date, the Company has formalized its plan to dispose of
those operations by the end of 2001. Coal Operations have been reported as
discontinued operations of the Company as of December 31, 2000, and the
accompanying financial statements and related disclosures for all periods
presented have been reclassified accordingly. No interest expense has been
allocated to the discontinued operations.

Prior to January 14, 2000, the Company was comprised of three separate groups -
Pittston Brink's Group, Pittston BAX Group, and Pittston Minerals Group. The
Pittston Brink's Group included the Brink's and BHS operations of the Company.
The Pittston BAX Group included the BAX Global operations of the Company. The
Pittston Minerals Group included the Pittston Coal Company ("Pittston Coal") and
Mineral Ventures operations of the Company. Also, prior to January 14, 2000, the
Company had three classes of common stock: Pittston Brink's Group Common Stock
("Brink's Stock"), Pittston BAX Group Common Stock ("BAX Stock") and Pittston
Minerals Group Common Stock ("Minerals Stock"), which were designed to provide
shareholders with separate securities reflecting the performance of the Brink's
Group, the BAX Group and the Minerals Group, respectively.

On December 6, 1999, the Company announced that its Board of Directors (the
"Board") approved the elimination of the tracking stock capital structure by an
exchange of all outstanding shares of Minerals Stock and BAX Stock for shares of
Brink's Stock (the "Exchange"). The Exchange took place on January 14, 2000 (the
"Exchange Date"). On the Exchange Date, holders of Minerals Stock received
0.0817 shares of Brink's Stock for each share of their Minerals Stock; and
holders of BAX Stock received 0.4848 shares of Brink's Stock for each share of
their BAX Stock. See Note 10 for additional information concerning the Exchange.
From and after the Exchange Date, Brink's Stock is the only outstanding class of
common stock of the Company and continues to trade on the New York Stock
Exchange under the symbol "PZB". Prior to the Exchange Date, the Brink's Stock
reflected the performance of the Brink's Group only; after the Exchange Date,
the Brink's Stock reflects the performance of The Pittston Company as a whole.
Shares of Brink's Stock after the Exchange are hereinafter referred to as
"Pittston Common Stock".

Principles of Consolidation

The accompanying consolidated financial statements reflect the accounts of the
Company and its majority-owned subsidiaries. The Company's interest in 20% to
50% owned companies are carried on the equity method unless control exists, in
which case, consolidation accounting is used. Undistributed earnings of equity
affiliates included in consolidated retained earnings approximated $21,900 at
December 31, 2000. All material intercompany items and transactions have been
eliminated in consolidation. Certain prior year amounts have been reclassified
to conform to the current year's financial statement presentation.

Cash and Cash Equivalents

Cash and cash equivalents include cash on hand, demand deposits and investments
with original maturities of three months or less.

Short-term Investments

Short-term investments are those with original maturities in excess of three
months, but not exceeding one year, and are carried at cost which approximates
market.

Property, Plant and Equipment

Expenditures for routine maintenance and repairs on property, plant and
equipment are charged to expense, and the costs of renewals and betterments are
capitalized. Depreciation is calculated principally on the straight-line method
at varying rates depending upon estimated useful lives.

Routine maintenance for aircraft are charged to expense when incurred. Major
renewals, betterments and modifications on aircraft are capitalized and
amortized over the lesser of the remaining life of the asset or lease term.
Scheduled airframe and periodic engine overhaul costs are capitalized when
incurred and amortized over the flying time to the next scheduled major
maintenance or overhaul date, respectively.

BHS retains ownership of most home security systems installed at subscriber
locations. Costs for those systems are capitalized and depreciated over the
estimated life of the assets (15 years) and are included in machinery and
equipment. However, when an installation is identified for disconnection, the
remaining net

                                       --
                                       29

book value of the system is reserved and charged to depreciation expense.

Intangibles

The excess of cost over fair value of net assets of businesses acquired (i.e.
goodwill) is amortized on a straight-line basis over the estimated periods
benefited.

The Company evaluates the carrying value of goodwill and other intangibles and
the periods of amortization to determine whether events and circumstances
warrant revised estimates of asset value or useful lives. Such events and
circumstances that may indicate impairment are a significant long-term decrease
in the market value of an asset; a significant change in the extent or manner in
which an asset is used; a significant adverse change in legal factors or in the
business climate that affects the value of an asset; an accumulation of costs
significantly in excess of the amount originally expected to acquire or
construct an asset; or a current period operating or cash flow loss combined
with a history of such losses or a projection that demonstrates such losses will
continue. The Company periodically assesses the recoverability of the excess of
cost over net assets acquired by determining whether the amortization of the
asset balance over its remaining life can be recovered through projected
undiscounted future operating cash flows. Evaluation of asset value as well as
periods of amortization are performed on a disaggregated basis.

Goodwill allocated to a potentially impaired asset will be identified with that
asset in performing an impairment test in accordance with Statement of Financial
Accounting Standards ("SFAS") No. 121, "Accounting for Long-Lived Assets and
Long-Lived Assets to be Disposed of". If such tests indicate that an impairment
exists, the carrying amount of the identified goodwill would be eliminated
before making any reduction of the carrying amounts of impaired long-lived
assets.

Stock Based Compensation

The Company has implemented the disclosure-only provisions of SFAS No. 123,
"Accounting for Stock Based Compensation" (Note 9). The Company continues to
measure compensation expense for its stock-based compensation plans using the
intrinsic value based methods of accounting prescribed by Accounting Principles
Board Opinion ("APB") No. 25, "Accounting for Stock Issued to Employees."

Foreign Currency Translation

Assets and liabilities of foreign subsidiaries have been translated at rates of
exchange at the balance sheet date and related revenues and expenses have been
translated at average rates of exchange in effect during the year. Resulting
cumulative translation adjustments have been recorded as a separate component of
shareholders' equity. Translation adjustments relating to subsidiaries in
countries with highly inflationary economies are included in net income, along
with all transaction gains and losses for the period.

A portion of the Company's financial results is derived from activities in well
over 100 countries, each with a local currency other than the US dollar. Because
the financial results of the Company are reported in US dollars, they are
affected by changes in the value of various foreign currencies in relation to
the US dollar.

Postretirement Benefits Other Than Pensions

Postretirement benefits other than pensions, except for those established
pursuant to the Coal Industry Retiree Health Benefit Act of 1992 (the "Health
Benefit Act"), are accounted for in accordance with SFAS No. 106, "Employers'
Accounting for Postretirement Benefits Other Than Pensions", which requires
employers to accrue the cost of such retirement benefits during the employees'
service with the Company or during the average remaining life expectancy of
inactive participants. Postretirement benefit obligations established by the
Health Benefit Act are accounted for in accordance with Emerging Issues Task
Force ("EITF") No. 92-13, "Accounting for Estimated Payments in Connection with
the Coal Industry Retiree Health Benefit Act of 1992."

Income Taxes

Income taxes are accounted for in accordance with SFAS No. 109, "Accounting for
Income Taxes", which requires recognition of deferred tax liabilities and assets
for the expected future tax consequences of events that have been included in
the financial statements or tax returns. Under this method, deferred tax
liabilities and assets are determined based on the difference between the
financial statement and tax bases of assets and liabilities using enacted tax
rates in effect for the year in which these items are expected to reverse.

Pneumoconiosis (Black Lung) Expense

The Company acts as self-insurer with respect to almost all black lung benefits.
Provision is made for estimated benefits based on annual reports prepared by
outside actuaries. The excess of the present value of expected future benefits
over the accumulated book reserves is recognized over the amortization period.
Cumulative actuarial gains or losses are calculated periodically and amortized
on a straight-line basis. Prior to December 31, 2000, assumptions used in the
calculation of the actuarial present value of black lung benefits were based on
actual retirement experience of the Company's coal employees, black lung claims
incidence, actual dependent information, industry turnover rates, actual medical
and legal cost experience and projected inflation rates. As of December 31,
2000, certain assumptions were modified to reflect the planned sale of Coal
Operations. As of December 31, 2000 and 1999, the actuarially determined
discounted value of estimated future black lung benefits was approximately
$47,000 and $49,000, respectively. The amount expensed (credited) to operations
for federal and

                                       --
                                       30

state black lung benefits was $5,297 in 2000, $5,126 in 1999 and ($598) in 1998.
In 1998, the black lung credit was favorably impacted by the amortization of
actuarial gains.

Impairment of Long-Lived Assets

The Company reviews its long-lived assets for impairment whenever circumstances
indicate that the carrying amount of an asset may not be recoverable. When such
events or changes in circumstances indicate that the carrying value of an asset
may not be recoverable, the Company estimates the future cash flows expected to
result from the use of the asset and its eventual disposition. If the sum of
such expected future cash flows (undiscounted and without interest charges) is
less than the carrying amount of the asset, an impairment loss is recognized in
an amount by which the asset's net book value exceeds its fair market value.
Fair market value is determined based on appraisals, sales prices of comparable
assets, if available, or estimates of cash flows from operations, discounted at
the hurdle rate the company uses for making investment decisions. For purposes
of assessing impairment, assets are grouped at the lowest level for which there
are separately identifiable cash flows.

Computer Software Developed for Internal Use

The costs of computer software developed for internal use are accounted for in
accordance with AICPA Statement of Position ("SOP") No. 98-1 "Accounting for the
Costs of Computer Software Developed for Internal Use." SOP No. 98-1 requires
that certain costs related to the development or purchase of internal-use
software be capitalized and amortized over the estimated useful life of the
software.

Derivative Instruments and Hedging Activities

The Company elected to adopt SFAS No. 133 "Accounting for Derivative Instruments
and Hedging Activities" as of October 1, 1998. In accordance with the transition
provisions of SFAS No. 133, the Company recorded a net transition adjustment
resulting in a loss of $3,663 (net of related income taxes of $1,961) in
accumulated other comprehensive income at October 1, 1998 in order to recognize
at fair value all derivatives that are designated as cash-flow hedging
instruments.

SFAS No. 133 requires that all derivative instruments be recorded in the
statement of financial position at fair value; the accounting for the gain or
loss due to changes in fair value of the derivative instrument depends on
whether the derivative instrument qualifies as a hedge. If the derivative
instrument does not qualify as a hedge, the gains or losses are reported in
earnings when they occur. However, if the derivative instrument qualifies as a
hedge, the accounting varies based on the type of risk being hedged.

Prior to the adoption of SFAS No. 133 (prior to October 1, 1998), gains and
losses on derivative contracts, designated as effective hedges, were deferred
and recognized as part of the transaction hedged. Since they were accounted for
as hedges, the fair value of these contracts were not recognized in the
Company's financial statements. Gains and losses resulting from the early
termination of such contracts were deferred and amortized as an adjustment to
the specific item being hedged over the remaining period originally covered by
the terminated contracts. In addition, if the underlying items being hedged were
retired prior to maturity, the unamortized gain or loss resulting from the early
termination of the related interest rate swap would be included in the gain or
loss on the extinguishment of the obligation.

Revenue Recognition

Brink's-Revenues are recognized when services are performed.

BHS-Monitoring revenues are recognized when earned and amounts paid in advance
are deferred and recognized as income over the applicable monitoring period,
which is generally one year or less. Beginning in 2000, nonrefundable
installation revenues and a portion of the related direct costs of acquiring new
subscribers (primarily sales commissions and direct marketing expenses) are
deferred and recognized over the estimated term of the subscriber relationship,
which is generally 15 years. When an installation is identified for
disconnection, any unamortized deferred revenues and deferred costs related to
that installation are recorded in income at that time. Prior to 2000, BHS
charged against earnings as incurred, all marketing and selling costs associated
with obtaining new subscribers and recognized as revenue all non-refundable
payments received from such subscribers to the extent that costs exceeded such
revenues.

BAX Global-Revenues related to transportation services are recognized, together
with related transportation costs, on the date shipments physically depart from
facilities en route to destination locations. Revenues and operating results
determined under existing recognition policies do not materially differ from
those which would result from an allocation of revenue between reporting periods
based on relative transit times in each reporting period with expenses
recognized as incurred.

Use of Estimates

In accordance with generally accepted accounting principles, management of the
Company has made a number of estimates and assumptions relating to the reporting
of assets and liabilities and the disclosure of contingent assets and
liabilities to prepare these financial statements. Actual results could differ
from those estimates.

                                       --
                                       31

Accounting Changes

Pursuant to guidance issued in Staff Accounting Bulletin ("SAB") No. 101,
"Revenue Recognition in Financial Statements," by the Securities and Exchange
Commission ("SEC") in December 1999, and a related interpretation issued in
October 2000, BHS changed its method of accounting for nonrefundable
installation revenues and a portion of the related direct costs of acquiring new
subscribers (primarily sales commissions and direct marketing expenses). As
provided in the guidance, the accounting change was implemented in the fourth
quarter of 2000, but made effective as of January 1, 2000. Accordingly, the
previously reported results for the first three quarters of 2000 were adjusted
to reflect this change. Under the new method, all of the nonrefundable
installation revenues and a portion of the related direct costs of subscriber
acquisition are deferred and recognized in income over the estimated term of the
subscriber relationship. Prior to 2000, BHS charged against earnings as
incurred, all marketing and selling costs associated with obtaining new
subscribers and recognized as revenue all non-refundable payments received from
such subscribers to the extent that costs exceeded such revenues. The Company's
results for 2000 include a non-cash, after-tax charge of $51,952 ($84,676
pretax), or $1.04 per diluted share, to reflect the cumulative effect of the
accounting change on years prior to 2000. The cumulative effect charge was
comprised of a net deferral of $121,130 of revenues and $36,454 of customer
acquisition costs. The change decreased operating profit for 2000 by $2,325,
reflecting a net decrease in revenues of $6,447 and a net decrease in operating
expenses of $4,122. Net income for 2000 was reduced by $1,426 ($0.03 per diluted
share). BHS revenues for 2000 include $19,592 amortization of amounts deferred
as part of the cumulative effect adjustment.

2. DERIVATIVE AND NON-DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES

Non-Derivative Financial Instruments

Non-derivative financial instruments, which potentially subject the Company to
concentrations of credit risk, consist principally of cash and cash equivalents,
short-term investments and trade receivables. The Company places its cash and
cash equivalents and short-term investments with high credit quality financial
institutions. Also, by policy, the Company limits the amount of credit exposure
to any one financial institution. Concentrations of credit risk with respect to
trade receivables are limited due to the large number of customers comprising
the Company's customer base, and their dispersion across many different
industries and geographic areas. Credit limits, ongoing credit evaluation and
account-monitoring procedures are utilized to minimize the risk of loss from
nonperformance on trade receivables.

The following details the fair values of non-derivative financial instruments
for which it is practicable to estimate the value:

Cash and cash equivalents and short-term investments

The carrying amounts approximate fair value because of the short maturity of
these instruments.

Accounts receivable, accounts payable and accrued liabilities

The carrying amounts approximate fair value because of the short-term nature of
these instruments.

Debt

The aggregate fair value of the Company's long-term debt obligations, which is
based upon quoted market prices and rates currently available to the Company for
debt with similar terms and maturities, approximates the carrying amount.

Other

A subsidiary of the Company is a member of the SITA Foundation ("SITA") whose
principal asset is its equity interest in Equant, N.V. (NYSE: ENT). In November
1999, SITA sold a portion of its interest in Equant and distributed the proceeds
on a pro rata basis to members that elected to participate in the secondary
offering. Pursuant to such sale, the Company redeemed approximately one-third of
its depository certificates resulting in a gain of approximately $8,300. As of
December 31, 2000, the Company holds approximately 188,000 depository
certificates that may become redeemable for cash. The Company's remaining
investment in these depository certificates is restricted since the Company may
only liquidate its depository certificates, when and if, SITA sells its shares
of Equant and, then, only to the extent that SITA sells its interest. Due to the
restricted nature of this investment, it has no readily determinable fair value
and is carried at cost on the Company's balance sheet. During the year ended
December 31, 2000, shares of Equant traded at high and low prices of $132.00 and
$23.75, respectively. In November 2000, Equant announced its intent to acquire a
portion of Global One from France Telecom (NYSE: FTE) in exchange for newly
issued Equant shares. Under an agreement between France Telecom, Equant and
SITA, France Telecom would purchase SITA's interest in Equant in exchange for
shares in France Telecom. Such shares, or the proceeds from the sale of such
shares, are expected to be made available for distribution to SITA's members.
The transaction is expected to be completed in the first half of 2001, although
a number of conditions must be satisfied before the transaction may be
completed.

                                       --
                                       32

Derivative Financial Instruments and Hedging Activities

The Company has activities in well over 100 countries, which exposes it to the
effects of changes in foreign currency exchange rates. The Company operates in
several different industries, which also exposes it to the effect of changes in
commodity prices. In addition, due to the Company's financing activities, it is
exposed to the effects of changes in interest rates. These financial exposures
are monitored and managed by the Company as an integral part of its overall risk
management program. The diversity of foreign operations helps to mitigate a
portion of the foreign currency risks associated with market fluctuations in any
one country and the impact on translated results. The Company's risk management
program considers this favorable diversification effect as it measures the
Company's exposure to financial markets and, as appropriate, seeks to reduce the
potentially adverse effects that the volatility of certain markets may have on
its operating results.

The Company utilizes various derivative and non-derivative hedging instruments,
as discussed below, to hedge its foreign currency, interest rate, and commodity
exposures when appropriate. The risk that counterparties to such instruments may
be unable to perform is minimized by limiting the counterparties to major
financial institutions. Management of the Company does not expect any losses due
to such counterparty default.

The Company assesses interest rate, foreign currency and commodity risks by
continually identifying and monitoring changes in interest rate, foreign
currency and commodity exposures that may adversely impact expected future cash
flows and by evaluating hedging opportunities. The Company maintains risk
management control systems to monitor the risks attributable to both the
Company's outstanding and forecasted transactions as well as offsetting hedge
positions. The risk management control systems involve the use of analytical
techniques to estimate the expected impact of changes in interest rates, foreign
currency rates and commodity prices on the Company's future cash flows. No
material amounts related to hedge ineffectiveness were recognized in earnings
during the periods presented. The Company does not use derivative instruments
for purposes other than hedging.

Cash-flow hedges

Interest Rate Risk Management

The Company uses primarily variable-rate debt denominated in US dollars and
foreign currencies to finance its operations. In particular, it has
variable-rate long-term debt under the $370,000 credit facility (see Note 7).
This debt obligation exposes the Company to variability in interest expense due
to changes in interest rates. Management believes it is prudent to limit the
variability of a portion of its interest expense. The Company attempts to
maintain a reasonable balance between fixed and floating rate debt and uses
interest rate swaps to accomplish this objective.

To meet this objective, the Company enters into interest rate swaps to manage
fluctuations in interest expense resulting from interest rate risk. The Company
has entered into interest rate swaps with a total notional value of $40,000.
These swaps change the variable-rate cash flows on a portion of the $185,000
three-year revolving credit facility, to fixed-rate cash flows. The two swaps
outstanding at December 31, 2000 were in the face amount of $20,000 of debt each
and fixed the interest rate at 5.839% and 5.855%. These swaps mature in May
2001.

In addition, the Company has a Singapore dollar denominated interest rate swap
with an amortizing notional value which was the equivalent of US $6,000 until
April 2000 at which point it amortized down to the equivalent of US $3,000 until
it expires in April 2001. This swap changes the variable-rate cash flows on a
portion of the Company's Singapore dollar denominated credit facility to
fixed-rate cash flows at 2.90% versus 3 month SIBOR (2.88%).

Changes in the fair value, to the extent effective, of interest rate swaps
designated as hedges of the variability of cash flows associated with
floating-rate, long-term debt obligations are reported in accumulated other
comprehensive income. These amounts are subsequently reclassified into interest
expense as a yield adjustment in the same period in which the interest on the
floating-rate debt obligations affects earnings. Under conditions existing at
December 31, 2000, net gains of approximately $113 (pretax, which approximates
fair value) related to the interest rate swaps would be reclassified from
accumulated other comprehensive income into interest expense as a yield
adjustment of the hedged debt obligation during 2001.

Foreign Currency Risk Management

The Company, through its BAX Global and Brink's operations, has certain
exposures to the effects of foreign exchange rate fluctuations on reported
results in US dollars of foreign operations. Due in part to the favorable
diversification effects resulting from operations in well over 100 countries,
the Company has not generally entered into foreign exchange hedges to mitigate
these exposures. However, from time to time, the Company utilizes foreign
currency forward contracts to minimize the variability in cash flows due to
foreign currency risks. These contracts are denominated in various foreign
currencies, primarily the Euro, the British pound and the Australian dollar.
Exposure to foreign currency risk is primarily concentrated in the activities of
its international finance company and the operations of a portion of its Mineral
Ventures business.

The Company's international finance company provides cost effective financial
services to its international subsidiaries, and as such, is primarily exposed to
Euro and British pound currency risks. This company utilizes foreign currency
forward contracts to hedge the variability in cash flows resulting from these
exposures for up to three months in the future.

                                       --
                                       33

Mineral Ventures has a subsidiary which is exposed to currency risk arising from
gold sales denominated in US dollars and local Australian costs denominated in
Australian dollars. Mineral Ventures utilizes foreign currency forward contracts
to hedge the variability in cash flows resulting from these exposures for up to
two years into the future. All other currency contracts outstanding during the
period were immaterial to the results of the Company.

The foreign currency forward contracts' effectiveness is assessed based on the
forward rate of the contract. Changes in the fair value of Australian dollar
foreign currency forward contracts designated and qualifying as cash flow hedges
of forecasted US dollar sales of gold are reported in accumulated other
comprehensive income. The gains and losses are reclassified into earnings, as a
component of revenue, in the same period as the forecasted transaction affects
earnings.

Under conditions existing at December 31, 2000, losses of approximately $255
(pretax, which approximates fair value) related to foreign currency forward
contracts would be reclassified from accumulated other comprehensive income to
expense during 2001. As of December 31, 2000, the maximum length of time over
which the Company is hedging its exposure to the variability in future cash
flows associated with foreign currency forecasted transactions is eighteen
months.

Commodities Risk Management

The Company consumes or sells various commodities in the normal course of its
business and utilizes derivative instruments to minimize the variability in
forecasted cash flows due to price movements in these commodities. The
derivative contracts are entered into in accordance with guidelines set forth in
the Company's hedging policies.

The Company utilizes forward swap contracts for the purchase of jet fuel to fix
a portion of forecasted jet fuel costs at specific price levels and it utilizes
option strategies to hedge a portion of the remaining risk associated with
changes in the price of jet fuel. Under the swap contracts, the Company receives
(pays) the difference between the contract rate and the higher (lower) average
market rate over the related contract period. The Company also periodically
utilizes option strategies to hedge a portion of the remaining forecasted risk
associated with changes in the price of jet fuel. In addition, the Company, in
some cases, is able to adjust its pricing to partially offset large increases in
the cost of the jet fuel. The option contracts, which involve either purchasing
call options and simultaneously selling put options (collar strategy) or just
purchasing call options, are designed to provide protection against sharp
increases in the price of jet fuel. For purchased call options, the Company pays
a premium up front and receives an amount over the contract period equal to the
difference by which the average market price during the period exceeds the
option strike price. For collar strategies, the premiums on the purchased option
and sold option net to zero.

The Company receives an amount equal to the difference by which the average
market price of jet fuel during the period exceeds the call option's strike
price and pays an amount equal to the difference by which the average market
price during the period is below the put option's strike price of jet fuel. At
December 31, 2000, the outstanding notional amount of forward purchase contracts
and commodity options (collar) for jet fuel totaled 21,800 gallons.

The Company utilizes a combination of forward gold sales contracts and currency
contracts to fix, in Australian dollars, the selling price on a certain portion
of its forecasted gold sales from the Stawell gold mine. At December 31, 2000,
52 ounces of gold, representing approximately 23% of the Company's share of
Stawell's proven and probable reserves, were sold forward under forward gold
contracts.

Changes in the fair value, to the extent effective, of the commodity contracts
designated and qualifying as cash flow hedges of forecasted commodity purchases
and sales are reported in accumulated other comprehensive income. For jet fuel,
the gains and losses are reclassified into earnings, as a component of costs of
sales, in the same period as the commodity purchased affects earnings. For gold
and natural gas contracts, the gains and losses are reclassified into earnings,
as a component of revenue, in the same period as the gold or natural gas sales
affect earnings.

Under conditions existing at December 31, 2000, losses of approximately $400
(pretax, which approximates fair value) related to jet fuel purchase contracts
would be reclassified from accumulated other comprehensive income into cost of
sales during 2001. Under conditions existing at December 31, 2000, net gains of
approximately $147 (pretax) related to gold sales and losses of $7,787 (pretax,
which approximates fair value) related to natural gas sales would be
reclassified from accumulated other comprehensive income into revenue during
2001. At December 31, 2000, the fair value of such gold contracts was
immaterial.

As of December 31, 2000, the maximum length of time over which the Company was
hedging its exposure to the variability in future cash flows associated with jet
fuel purchases was twelve months. As of December 31, 2000, the maximum length of
time over which the Company is hedging its exposure to the variability in future
cash flows associated with gold and natural gas sales was forty-seven and
fifteen months, respectively.

Hedges of Net Investments in Foreign Operations

The Company holds investments in a number of foreign subsidiaries, and the net
assets of these subsidiaries are exposed to foreign exchange rate volatility.
The Company uses non-derivative financial instruments to hedge this exposure.

                                       --
                                       34

Currency exposure related to the net assets of the Brink's subsidiary in France
is managed in part through a foreign currency denominated debt agreement (seller
financing) entered into as part of the acquisition by the Company. Gains and
losses in the net investment in subsidiaries are offset by losses and gains in
the debt obligations. Such obligations were fully repaid in early 2001.

For the year ended December 31, 2000, approximately $707 of net losses related
to the foreign currency denominated debt agreements were included in the
cumulative foreign currency translation adjustment in the balance sheet. All
other hedges of net investments in foreign operations during the period were
immaterial to the results of the Company.

3. ACCOUNTS RECEIVABLE-TRADE

In December 2000, BAX Global entered into a five-year agreement to sell a
revolving interest in BAX Global's U.S. domestic accounts receivable through a
commercial paper conduit program. The accounts receivable are initially sold,
without recourse, to a wholly-owned, special-purpose subsidiary of BAX Global.
The subsidiary then sells an undivided interest in the entire pool of accounts
receivable to a bank-sponsored conduit entity. The conduit issues commercial
paper to finance the purchase of its interest in the receivables. Under the
program, BAX Global may sell up to a $90,000 interest in the receivables pool to
the conduit. During the term of the agreement, the conduit's interest in daily
collections of accounts receivable is reinvested in newly-originated
receivables. At the end of the five-year term, or in the event certain
circumstances cause an early termination of the program, the daily reinvestment
will be discontinued and collections will be used to pay down the conduit's
interest in the receivables pool. BAX Global's special-purpose subsidiary
effectively retains the credit risk associated with the underlying receivables
and pays the conduit a discount based on the conduit's borrowing cost plus
incremental fees. BAX Global is the designated servicer of the receivables pool
and is responsible for collections, reinvestment, and periodic reporting to the
conduit.

At the closing date, BAX Global sold an $85,000 revolving interest in the
accounts receivable to the conduit. Proceeds from the sale were used to reduce
borrowings under BAX Global's revolving credit facility. The transaction is
accounted for as a sale of accounts receivable under SFAS No. 125, "Accounting
for Transfers and Servicing of Financial Assets and Extinguishments of
Liabilities." At December 31, 2000, the receivables pool totaled $124,260 and
the revolving interest sold remained at $85,000. Because the receivables are
trade accounts with an average collection period of 35 to 40 days, the fair
value of the Company's retained interest in the receivables approximates
carrying value, less an allowance for uncollectible accounts. BAX Global's
retained interest is reported as trade accounts receivable in the consolidated
balance sheet. The discount, incremental fees, and provision for uncollectible
accounts are reported as a loss on sale of accounts receivable in other income
(expense) in the consolidated statement of operations. Losses on the initial
sale to the conduit and subsequent revolving period sales through December 31,
2000 totaled $647, including a $79 provision to cover estimated credit losses on
the receivables. The Company has not recorded a servicing asset or liability
because it believes the servicing compensation BAX Global receives is
representative of market rates and because the average servicing period for
trade accounts receivable approximates one month.

SFAS No. 140, which carries the same title as SFAS No. 125, was issued in
September 2000 and replaces SFAS No. 125 in its entirety. SFAS No. 140 is
effective for transfers of financial assets occurring after March 31, 2001, but
does not significantly change the guidance governing the BAX Global accounts
receivable sale. Certain disclosure provisions of SFAS No. 140 were effective in
December 2000 and have been incorporated above.

For each of the years in the three-year period ended December 31, 2000, the
Company maintained agreements with financial institutions whereby it had the
right to sell certain coal receivables to those institutions. Certain agreements
contained provisions for sales with recourse. Due to the recourse provisions,
these transactions were accounted for as transfers of the receivables, resulting
in the receivable balances remaining on the balance sheet with a corresponding
short-term obligation. In 2000 and 1999, total coal receivables of $4,005 and
$22,247, respectively, were transferred under such agreements. As of December
31, 2000 and 1999, receivables transferred which remained to be collected
totaled $1,920 and $15,121, respectively (see Note 7).

4. PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment, at cost, consists of the following:

                                                               As of December 31
                                                          2000              1999
- --------------------------------------------------------------------------------
                                                                 
Machinery and equipment                            $1,090,366          1,032,987
Buildings                                             225,417            221,016
Capitalized software                                   29,283             27,413
Land                                                   49,564             46,003
- --------------------------------------------------------------------------------
Total                                              $1,394,630          1,327,419
================================================================================

                                       --
                                       35

The estimated useful lives for property, plant and equipment are as follows:

                                                                          Years
- --------------------------------------------------------------------------------
                                                                     
Machinery and equipment                                                  3 to 20
Buildings                                                               10 to 40
Capitalized software                                                     3 to 7
================================================================================

Depreciation of property, plant and equipment aggregated $170,028 in 2000,
$138,035 in 1999 and $112,820 in 1998.

Changes in capitalized costs for BHS home security systems included in machinery
and equipment were as follows:

                                                        Years Ended December 31
                                                 2000         1999         1998
- --------------------------------------------------------------------------------
                                                               
Capitalized security system costs-
 beginning of year                          $ 249,506      217,595      172,792
Capitalized cost of security systems
 installed during the year                     69,545       78,234       77,460
Depreciation, including amounts
 recognized to reserve
 capitalized costs of security systems
 disconnected during the year                 (50,767)     (46,323)     (32,657)
- --------------------------------------------------------------------------------
Capitalized security system costs-
 end of year                                $ 268,284      249,506      217,595
================================================================================

New BHS subscribers were approximately 82 thousand in 2000, 105.6 thousand in
1999 and 113.5 thousand in 1998.

The Company recorded charges in 2000 and 1998 to reflect the impairment of
certain property, plant and equipment related to its continuing operations. In
2000, certain aircraft-related assets were written down to fair value pursuant
to BAX Global's restructuring plan (see Note 13). The write-down is included in
the restructuring charge in the Company's 2000 operating results. During 1998,
the Company recorded write-offs of approximately $16,000 for software costs
included in property, plant and equipment. These write-offs consisted of the
costs associated with certain in-process software development projects that were
canceled and unamortized costs of existing software applications which were
determined by management to have no future service potential or value. Such
write-offs are included in selling, general and administrative expenses in the
Company's 1998 results of operations.

5. INTANGIBLES

Intangible assets consist almost entirely of the excess of cost over fair value
of net tangible and identifiable intangible assets of businesses acquired (i.e.
goodwill). Goodwill is net of accumulated amortization of $120,381 and $112,444
at December 31, 2000 and 1999, respectively. The estimated useful life of
goodwill is generally forty years. Amortization of goodwill aggregated $9,451 in
2000, $9,850 in 1999 and $9,113 in 1998.

In 1999, the Company finalized certain of the preliminary purchase price
allocations related to several 1998 acquisitions, which resulted in additional
goodwill of $13,008. During 2000 and 1999, the Company made certain
acquisitions, none of which were considered material.

6. INCOME TAXES

The provision (credit) for income taxes from continuing operations consists of
the following:

                        US Federal        Foreign          State          Total
- --------------------------------------------------------------------------------
                                                              
2000:
Current                   $    632         25,650          3,700         29,982
Deferred                   (14,200)        (8,852)        (4,986)       (28,038)
- --------------------------------------------------------------------------------
Total                     $(13,568)        16,798         (1,286)         1,944
================================================================================
1999:
Current                   $ 16,443         28,775          3,452         48,670
Deferred                    23,019        (11,775)         1,541         12,785
- --------------------------------------------------------------------------------
Total                     $ 39,462         17,000          4,993         61,455
================================================================================
1998:
Current                   $ 16,344         20,625          3,500         40,469
Deferred                     3,946         (8,278)            25         (4,307)
- --------------------------------------------------------------------------------
Total                     $ 20,290         12,347          3,525         36,162
================================================================================

The significant components of the deferred tax expense (benefit) from continuing
operations were as follows:

                                                        Years Ended December 31
                                                   2000        1999        1998
- --------------------------------------------------------------------------------
                                                                
Net operating loss carryforwards               $(24,101)     (7,683)     (7,142)
Alternative minimum tax credits                  (8,163)     (2,710)     (7,626)
Change in the valuation allowance for
 deferred tax assets                              1,800       1,500       1,400
Other deferred tax expense                        2,426      21,678       9,061
- --------------------------------------------------------------------------------
Total                                          $(28,038)     12,785      (4,307)
================================================================================

                                       --
                                       36

The tax benefit for compensation expense related to the exercise of certain
employee stock options for tax purposes in excess of compensation expense for
financial reporting purposes is recognized as an adjustment to shareholders'
equity.

The components of the net deferred tax asset as of December 31, 2000 and
December 31, 1999 were as follows:

                                                            2000           1999
- --------------------------------------------------------------------------------
                                                                  
Deferred tax assets:
Accounts receivable                                    $   9,605         11,369
Postretirement benefits other than pensions              159,118        105,896
Workers' compensation and other claims                    37,818         38,844
Other assets and liabilities                             107,542         87,864
Estimated loss on coal assets                             49,731             --
Net operating loss carryforwards                          67,298         32,802
Alternative minimum tax credits                           44,329         36,061
Deferred revenue                                          53,913          5,985
Valuation allowance                                       (9,000)        (7,200)
- --------------------------------------------------------------------------------
Total deferred tax assets                                520,354        311,621
- --------------------------------------------------------------------------------
Deferred tax liabilities:
Property, plant and equipment                            109,888         79,846
Prepaid assets                                            22,351             --
Pension assets                                            39,969         45,239
Other assets                                              13,339         19,589
Investments in foreign affiliates                          6,000          6,000
Miscellaneous                                             34,360         47,395
- --------------------------------------------------------------------------------
Total deferred tax liabilities                           225,907        198,069
- --------------------------------------------------------------------------------
Net deferred tax asset (a)                             $ 294,447        113,552
================================================================================

(a) Deferred tax assets and liabilities related to discontinued operations,
which the Company expects to retain, are reflected in the above table.

The valuation allowance relates to deferred tax assets in certain foreign
jurisdictions. Based on the Company's historical and expected future taxable
earnings, management believes it is more likely than not that the Company will
realize the benefit of the existing deferred tax asset, net of the valuation
allowance, at December 31, 2000.

The following table accounts for the difference between the actual tax provision
from continuing operations and the amounts obtained by applying the statutory US
federal income tax rate of 35% in 2000, 1999 and 1998 to the income (loss) from
continuing operations before income taxes and cumulative effect of change in
accounting principle. As a result of Coal Operations being reported under
discontinued operations, the tax benefits of percentage depletion are no longer
reflected in the effective tax rate of continuing operations.

                                                       Years Ended December 31
                                                   2000       1999        1998
- --------------------------------------------------------------------------------
                                                                
Income (loss) from continuing operations before
 income taxes and accounting change:
United States                                  $(65,052)    109,243      50,101
Foreign                                          69,681      60,260      47,234
- --------------------------------------------------------------------------------
Total                                          $  4,629     169,503      97,335
================================================================================
Tax provision computed at statutory
 rate                                          $  1,620      59,326      34,067
Increases (reductions) in taxes due to:
State income taxes (net of federal
 tax benefit)                                      (836)      3,257       2,292
Goodwill amortization                             2,175       2,306       2,215
Difference between total taxes on
 foreign income and the US
 federal statutory rate                          (2,742)     (3,741)     (2,484)
Change in the valuation allowance
 for deferred tax assets                          1,800       1,500       1,400
Miscellaneous                                       (73)     (1,193)     (1,328)
- --------------------------------------------------------------------------------
Actual tax provision                           $  1,944      61,455      36,162
================================================================================

It is the policy of the Company to accrue deferred income taxes on temporary
differences related to the financial statement carrying amounts and tax bases of
investments in foreign subsidiaries and affiliates which are expected to reverse
in the foreseeable future. As of December 31, 2000 and 1999, the unrecognized
deferred tax liability for temporary differences of approximately $104,377 and
$72,911, respectively, related to investments in foreign subsidiaries and
affiliates that are essentially permanent in nature and not expected to reverse
in the foreseeable future was approximately $36,532 and $25,519, respectively.

The Company and its domestic subsidiaries file a consolidated US federal income
tax return.

                                       --
                                       37

As of December 31, 2000, the Company had $44,329 of alternative minimum tax
credits available to offset future US federal income taxes and, under current
tax law, the carryforward period for such credits is unlimited.

The tax benefit of net operating loss carryforwards as of December 31, 2000 was
$67,298 and related to US federal and various state and foreign taxing
jurisdictions. The gross amount of such net operating losses was $299,980 as of
December 31, 2000. The expiration periods primarily range from 5 years to an
unlimited period.

7. LONG-TERM DEBT

Long-term debt consists of the following:

                                                               As of December 31
                                                                 2000       1999
- --------------------------------------------------------------------------------
                                                                   
Senior obligations:
US dollar revolving credit notes due 2001
 (year-end rate 7.51% in 2000)                               $ 59,800         --
US dollar revolving credit notes due 2003
 (year-end rate 7.64% in 2000)                                185,000         --
US dollar term loan retired in 2000 (year-end
 rate 6.52% in 1999)                                               --    100,000
US dollar revolving credit notes retired in 2000
 (year-end rate 6.69% in 1999)                                     --    185,000
Argentine revolving credit facility due in 2002 (year-
 end rate 12.44% in 2000 and 11.40% in 1999)                   14,939     14,496
Venezuelan bolivar term loan due 2003
 (year-end rate 27.59% in 2000
 and 28.50% in 1999)                                            7,150     12,536
Netherlands guilder term loan retired in 2000
 (year-end rate 3.46% in 1999)                                     --      9,588
Singapore dollar term loan due 2003
 (year-end rate 3.19% in 2000 and 3.38% in 1999)                5,769      9,006
5% amortizing French franc seller's
 note retired in 2001                                              --      8,442
British pound medium term loan facility
 retired in 2000 (year-end rate 6.57% in 1999)                     --      8,091
All other                                                      19,918     21,981
- --------------------------------------------------------------------------------
                                                              292,576    369,140
Obligations under capital leases (average rate
 7.09% in 2000 and 6.90% in 1999) (Note 11)                    18,842     23,381
- --------------------------------------------------------------------------------
Total long-term debt, less current maturities                 311,418    392,521

Current maturities of long-term debt:
 Senior obligations                                            26,003     22,317
 Obligations under capital leases (Note 11)                     8,375      9,588
- --------------------------------------------------------------------------------
Total current maturities of long-term debt                     34,378     31,905
- --------------------------------------------------------------------------------
Total long-term debt including current maturities            $345,796    424,426
================================================================================

Minimum repayments of long-term debt for years 2001 through 2005 total $34,378,
$31,783, $262,818, $6,401 and $3,372, respectively.

In October 2000, the Company entered into a $370,000 bank credit agreement to
replace an existing facility that was due to expire in 2001. Under the new
agreement, the Company may borrow up to $185,000 on a revolving basis over a
three-year term ending October 3, 2003 and up to $185,000 on a revolving basis
over a one-year term ending October 2, 2001. The Company has the option to
borrow based on an offshore rate, a base rate, or a competitive bid among the
individual banks. The offshore rate is based on LIBOR plus a margin determined
by the Company's credit rating. The base rate is the higher of the prime rate or
the federal funds rate plus a margin, and the competitive bid option is
reflective of the federal funds rate plus a margin. The applicable interest rate
is increased by 0.125% during any period that amounts outstanding under the
facility exceed 50% of the total commitment. The Company also pays a fee of
0.15% on the one-year commitment and 0.175% on the three-year commitment. At
December 31, 2000, the Company classified the $59,800 outstanding under the
one-year portion of the credit agreement as long-term debt, reflecting the
refinancing of those borrowings with proceeds from a private placement of Senior
Notes subsequent to year end, as discussed below.

The previous bank credit facility provided for total borrowings of up to
$350,000, consisting of a $100,000 term loan and a $250,000 revolving credit
arrangement. Interest on borrowings under that facility was based, at the
Company's option, on either the prime rate, certificate of deposit rate,
Eurodollar rate, or money market rate plus a margin determined by the Company's
credit rating. The Company also paid a commitment fee on the unused portion of
the facility. At December 31, 1999, $100,000 was outstanding under the term loan
and $185,000 was outstanding under the revolving credit portion of the facility.

In January 2001, the Company completed a $75,000 private placement of Senior
Notes. The notes are comprised of $55 million of 7.84% Senior Notes, Series A
("Series A notes") due in 2007 and $20 million of 8.02% Senior Notes, Series B
("Series B notes") due in 2008. Proceeds from the notes were used to repay
borrowings under the bank credit facility. Interest on the notes is payable
semiannually, and the Company is required to prepay, without penalty, $18,333
principal of the Series A notes in each of January 2005 and 2006. The Company
also has the option to prepay all or a portion of the Series A or Series B notes
prior to maturity with a make whole provision.

                                       --
                                       38

Both the bank credit agreement and the agreement under which the Senior Notes
were issued contain various financial and other covenants. The financial
covenants limit the Company's total indebtedness, provide for minimum coverage
of interest costs, and require the Company to maintain a minimum level of net
worth. The previous bank credit facility also contained various covenants.

The Company has two interest rate swap agreements that effectively convert the
interest on $40,000 of borrowings under the three-year portion of its bank
credit facility to fixed rates. In addition, the Company has an interest rate
swap agreement that effectively converts a portion of the interest on its
Singapore dollar term loan to fixed rates (see Note 2).

The Company has a $15,000 revolving credit facility relating to its Brink's
operations in Argentina. The facility, which expires in June 2002, provides for
interest at LIBOR plus a margin or at local Argentine rates and requires a
commitment fee of 0.125% on the unused portion. Long-term debt at December 31,
2000 and 1999 included $14,939 and $14,496, respectively, outstanding under the
facility.

At December 31, 2000 and 1999, a majority owned subsidiary of Brink's had
outstanding term loans with Venezuelan banks to provide financing for its
operations in that country. The loan outstanding at December 31, 2000 was
entered into during 2000 and replaced a previous loan that matured. The loan
agreement requires principal payments in installments through 2003 and bears
interest based on the corporate rate charged by banks in Venezuela. At December
31, 2000 and 1999, loan balances outstanding in Venezuelan bolivars were the
equivalent of US $7,150 and US $12,536, respectively.

The Company has a term loan agreement with a major US bank to finance BAX Global
warehouse facilities in Singapore. The facility provides for interest based on
various rate alternatives, including rates based on LIBOR and SIBOR (Singapore
Inter-Bank Offered Rate) and a base rate as defined in the agreement. At
December 31, 2000 and 1999, the balances outstanding in Singapore dollars were
the equivalent of US $5,769 and US $9,006, respectively.

Various foreign subsidiaries maintain lines of credit and overdraft facilities
with a number of banks aggregating approximately $155,000, including both
secured and unsecured arrangements. Amounts outstanding under these agreements
are included in short-term borrowings. At December 31, 2000, borrowings totaled
$49,083 at an average interest rate of 9.6%. At December 31, 1999, borrowings
totaled $74,964 at an average interest rate of 10.4%. Commitment fees paid under
these agreements are not significant.

At December 31, 2000, the Company had outstanding unsecured letters of credit
totaling $58,157. These letters of credit primarily support the Company's
obligations under various self-insurance programs, credit facilities, and
aircraft lease obligations.

The Company has agreements with financial institutions under which it sells
certain accounts receivable generated by its Coal Operations. Under certain of
the agreements, the receivables are sold with recourse. Short-term borrowings at
December 31, 2000 and 1999 include $1,920 at an interest rate of 7.09% and
$15,121 at an interest rate of 5.61%, respectively. The Company will retain
these obligations after the sale of its Coal Operations and expects to repay
them as the receivables are collected over a period of less than one year.

8. NET INCOME PER SHARE

Basic and diluted net income (loss) per share for 1999 and prior are considered
to be pro forma as prior to 2000 the Company had three classes of common stock
outstanding (Note 1). The following is a reconciliation between the calculations
of basic and diluted net income (loss) per share:

                                                        Years Ended December 31
The Company                                      2000         1999         1998
- --------------------------------------------------------------------------------
                                                                
Numerator:
Income from continuing operations
 before accounting change                   $   2,685      108,048       61,173
Convertible Preferred Stock
 dividends, net                                   873       17,621       (3,524)
- --------------------------------------------------------------------------------
Basic income from continuing
 operations per share numerator                 3,558      125,669       57,649
Discontinued operations:
Income (loss) from operations,
 net of tax                                   (18,235)     (73,391)       4,883
Estimated loss on disposal, net
 of tax                                      (189,141)          --           --
Cumulative effect of change
 in accounting principle, net of tax          (51,952)          --           --
- --------------------------------------------------------------------------------
Basic net income (loss) per
 share numerator                             (255,770)      52,278       62,532
================================================================================

                                       --
                                       39

                                                         Years Ended December 31
The Company                                       2000         1999         1998
- --------------------------------------------------------------------------------
                                                                 
Basic income from continuing operations
 before accounting change                    $   3,558      125,669       57,649
Effect of dilutive securities:
 Convertible Preferred Stock
 dividends, net                                   (873)     (17,621)          --
- --------------------------------------------------------------------------------
Diluted income from continuing
 operations per share numerator                  2,685      108,048       57,649
Discontinued operations:
 Income (loss) from operations,
 net of tax                                    (18,235)     (73,391)       4,883
 Estimated loss on disposal,
 net of tax                                   (189,141)          --           --
Cumulative effect of change in
 accounting principle, net of tax              (51,952)          --           --
- --------------------------------------------------------------------------------
Diluted net income per
 share numerator                             $(256,643)      34,657       62,532

Denominator: (a)
Basic weighted average
 common shares outstanding                      50,059       49,113       48,766
Effect of dilutive securities:
 Stock options                                      52          155          484
 Convertible Preferred Stock                        35           59           --
- --------------------------------------------------------------------------------
Diluted weighted average
 common shares outstanding                      50,146       49,327       49,250
================================================================================

(a) Actual for 2000, pro forma for 1999 and 1998.

For purposes of calculating the Company's pro forma basic weighted average
common shares outstanding for 1999 and prior, the basic weighted average common
shares outstanding for BAX Stock and Minerals Stock were converted into shares
of Pittston Common Stock by multiplying such average shares outstanding by the
respective exchange ratios referred to in Note 1. Included in the Company's pro
forma diluted weighted average common shares outstanding are common stock
equivalents from pro forma converted weighted average stock options and pro
forma converted weighted average Convertible Preferred Stock to the extent that
such conversions are dilutive. Pro forma converted weighted options are
calculated by multiplying those weighted options having an exercise price less
than the average fair market value for Brink's Stock, BAX Stock and Minerals
Stock by the respective exchange ratios. Converted exercise prices related to
these converted weighted options are calculated by dividing the exercise price
of Brink's Stock, BAX Stock and Minerals Stock by the respective exchange
ratios. Converted weighted Convertible Preferred Stock is calculated by
multiplying the pro forma weighted average Convertible Preferred Stock by the
Minerals exchange ratio. See Notes 1 and 10 for additional information.

Not included in the Company's pro forma diluted net income per share
calculations for 1999 and 1998 are converted options to the extent that such
conversions are antidilutive. Converted options are calculated by multiplying
those options having an exercise price greater than the average fair market
value for Brink's Stock, BAX Stock and Minerals Stock by the respective exchange
ratios. Converted exercise prices related to these converted options are
calculated by dividing the exercise price of Brink's Stock, BAX Stock and
Minerals Stock by the respective exchange ratios.

Options for 2000 and pro forma options for 1999 and 1998 to purchase 3,064,
2,612 and 1,154 shares of Pittston Common Stock, at prices between $16.19 and
$315.06 per share, $19.09 and $315.06 per share and $30.61 and $315.06 per
share, were outstanding during 2000, 1999 and 1998, respectively, but were not
included in the computation of diluted net income (loss) per share because the
options' exercise prices were greater than the average market price of the
common shares and, therefore, the effect would be antidilutive.

The conversion of preferred stock to 144 shares of Pittston Common Stock has
been excluded in the computation of diluted net income per share in 1998 because
the effect of the assumed conversion would be antidilutive.

The shares of Pittston Common Stock held in The Pittston Company Employee
Benefits Trust ("Trust") are subject to the treasury stock method and
effectively are not included in the basic and diluted net income (loss) per
share calculations. As of December 31, 2000, 1,279 shares of Pittston Common
Stock (2,293 and 3,040 pro forma shares in 1999 and 1998, respectively) remained
in the Trust (see Note 10).

The following is a reconciliation between the calculations of basic and diluted
net income per share:

                                                         Years Ended December 31
Brink's Group                                                1999           1998
- --------------------------------------------------------------------------------
                                                                    
Numerator:
Net income - Basic and diluted net
 income per share numerator                               $84,209         79,104

Denominator:
Basic weighted average common
 shares outstanding                                        39,059         38,713
Effect of dilutive securities:
 Stock options                                                143            442
- --------------------------------------------------------------------------------
Diluted weighted average common
 shares outstanding                                        39,202         39,155
================================================================================

                                       --
                                       40

Options to purchase 1,444 and 356 shares of Brink's Stock, at prices between
$25.57 and $39.56 per share and $37.06 and $39.56 per share, were outstanding
during 1999 and 1998, respectively, but were not included in the computation of
diluted net income per share because the options' exercise prices were greater
than the average market price of the common shares and, therefore, the effect
would be antidilutive.

The shares of Brink's Stock held in the Trust are subject to the treasury stock
method and effectively are not included in the basic and diluted net income per
share calculations. As of December 31, 1999 and 1998, 1,573 and 2,076 shares,
respectively, remained in the Trust (see Note 10).

The following is a reconciliation between the calculations of basic and diluted
net income (loss) per share:

                                                        Years Ended December 31
BAX Group                                                    1999          1998
- --------------------------------------------------------------------------------
                                                                  
Numerator:
Net income (loss)-Basic and diluted net
 income (loss) per share numerator                        $33,223       (13,091)

Denominator:
Basic weighted average common
 shares outstanding                                        19,241        19,333
Effect of dilutive securities:
 Stock options                                                 24            --
- --------------------------------------------------------------------------------
Diluted weighted average common
 shares outstanding                                        19,265        19,333
================================================================================

Options to purchase 2,263 shares of BAX Stock at prices between $9.41 and $27.91
per share, were outstanding during 1999 but were not included in the computation
of diluted net income per share because the options' exercise prices were
greater than the average market price of the common shares and, therefore, the
effect would be antidilutive.

Options to purchase 2,588 shares of BAX Stock at prices between $7.85 and $27.91
per share, were outstanding during 1998 but were not included in the computation
of diluted net loss per share because the effect of all options would be
antidilutive.

The shares of BAX Stock held in the Trust are subject to the treasury stock
method and effectively are not included in the basic and diluted net income
(loss) per share calculations. As of December 31, 1999 and 1998, 1,350 and 1,858
shares, respectively, remained in the Trust (see Note 10).

The following is a reconciliation between the calculations of basic and diluted
net income (loss) per share:

                                                        Years Ended December 31
Minerals Group                                               1999          1998
- --------------------------------------------------------------------------------
                                                                   
Numerator:
Loss from continuing operations                          $ (9,384)       (4,840)
Convertible Preferred Stock
 dividends, net                                            17,621        (3,524)
- --------------------------------------------------------------------------------
Basic income (loss) from continuing operations
 per share numerator                                        8,237        (8,364)
Discontinued operations: income (loss)
 from operations, net of tax                              (73,391)        4,883
- --------------------------------------------------------------------------------
Basic net loss per share numerator                        (65,154)       (3,481)

Basic income (loss) from
 continuing operations                                      8,237        (8,364)
Effect of dilutive securities:
 Convertible Preferred Stock
 dividends, net                                           (17,621)           --
- --------------------------------------------------------------------------------
Diluted loss from continuing
 operations per share numerator                          $ (9,384)       (8,364)
Discontinued operations: Income
 (loss) from operations, net of tax                       (73,391)        4,884
- --------------------------------------------------------------------------------
Diluted net loss per share numerator                      (82,775)       (3,480)

Denominator:
Basic weighted average common
 shares outstanding                                         8,890         8,324
Effect of dilutive securities:
 Convertible Preferred Stock                                  724            --
- --------------------------------------------------------------------------------
Diluted weighted average common
 shares outstanding                                         9,614         8,324
================================================================================

Options to purchase 871 shares of Minerals Stock, at prices between $1.56 and
$25.74 per share, were outstanding during 1999 but were not included in the
computation of diluted net loss per share because the options' exercise prices
were greater than the average market value of the common shares, and, therefore,
the effect would be antidilutive.

Options to purchase 789 shares of Minerals Stock, at prices between $2.50 and
$25.74 per share, were outstanding during 1998, but were not included in the
computation of diluted net loss per share because the effect of all options
would be antidilutive.

                                       --
                                       41

The conversion of preferred stock to 1,764 shares of Minerals Stock has been
excluded in the computation of diluted net income (loss) per share in 1998
because the effect of the assumed conversion would be antidilutive.

The shares of Minerals Stock held in the Trust are subject to the treasury stock
method and effectively are not included in the basic and diluted net income
(loss) per share calculations. As of December 31, 1999 and 1998, 813 and 766
shares, respectively of Minerals Stock remained in the Trust (see Note 10).

9. STOCK OPTIONS

The Company has various stock-based compensation plans as described below.

Stock Option Plans

The Company grants options under its 1988 Stock Option Plan (the "1988 Plan") to
executives and key employees and under its Non-Employee Directors' Stock Option
Plan (the "Non-Employee Plan") to outside directors, to purchase common stock at
a price not less than 100% of the average quoted market value at the date of
grant. All grants made in 2000, 1999 and 1998 have a maximum term of six years
and substantially all of these grants either vest ratably over three years or
vest 100% at the end of the third year. The Non-Employee Plan options are
granted with a maximum term of ten years. Some options under the Non-Employee
Plan vest immediately with the remainder vesting ratably over the first two
years; other options vest fully after six months. The total number of shares
underlying options for both plans that is authorized for grant, but not yet
granted, is 2,344.

As of January 14, 2000, with the elimination of the Company's tracking stock
capital structure, the 1988 Plan and Non-Employee Plan were amended to provide
that all future grants would be made solely in Pittston Common Stock and that
all outstanding options related to BAX Stock and Minerals Stock would be
converted into options to purchase Pittston Common Stock. At the Exchange Date,
a total of 2,041 shares of BAX Stock and 588 shares of Minerals Stock were
subject to options outstanding under the 1988 Plan and the Non-Employee Plan.
Pursuant to the Exchange provisions, the Company converted these options into
options for shares of Pittston Common Stock. The table below summarizes the
activity in all plans for 2000, 1999 and 1998.

                                                                      Aggregate
                                                                       Exercise
                                                            Shares        Price
- --------------------------------------------------------------------------------
                                                                 
Pittston Common Stock Options:
Outstanding at December 31, 1997                             2,050     $ 42,683
Granted                                                        365       13,748
Exercised                                                     (439)      (6,230)
Forfeited or expired                                           (35)        (985)
- --------------------------------------------------------------------------------
Outstanding at December 31, 1998                             1,941     $ 49,216
Granted                                                        430       11,515
Exercised                                                     (156)      (2,461)
Forfeited or expired                                          (384)      (8,798)
- --------------------------------------------------------------------------------
Outstanding at December 31, 1999                             1,831     $ 49,472
BAX Stock options converted in the Exchange                    989       30,663
Minerals Stock options converted in the Exchange                48        4,574
Granted                                                      1,065       16,107
Exercised                                                      (59)        (631)
Forfeited or expired                                          (435)     (11,372)
- --------------------------------------------------------------------------------
Outstanding at December 31, 2000                             3,439     $ 88,813
================================================================================

BAX Group Common Stock Options:
Outstanding at December 31, 1997                             2,256     $ 36,670
Granted                                                        334        4,683
Exercised                                                     (236)      (1,868)
Forfeited or expired                                          (166)      (3,393)
- --------------------------------------------------------------------------------
Outstanding at December 31, 1998                             2,188     $ 36,092
Granted                                                        514        4,851
Exercised                                                      (26)        (247)
Forfeited or expired                                          (635)     (10,033)
- --------------------------------------------------------------------------------
Outstanding at December 31, 1999                             2,041     $ 30,663
Converted in the Exchange                                   (2,041)     (30,663)
Outstanding at December 31, 2000                                --     $     --
================================================================================

Minerals Group Common Stock Options:
Outstanding at December 31, 1997                               652     $  9,935
Granted                                                        138          721
Forfeited or expired                                          (128)      (1,668)
- --------------------------------------------------------------------------------
Outstanding at December 31, 1998                               662     $  8,988
Granted                                                        209          339
Forfeited or expired                                          (283)      (4,753)
- --------------------------------------------------------------------------------
Outstanding at December 31, 1999                               588     $  4,574
Converted in the Exchange                                     (588)      (4,574)
- --------------------------------------------------------------------------------
Outstanding at December 31, 2000                                --     $     --
================================================================================

                                       --
                                       42

Options exercisable at the end of 2000, 1999 and 1998 for Pittston Common Stock
were 1,916, 853 and 922, respectively. Options exercisable at the end of 1999
and 1998 for BAX Stock were 994 and 1,081, respectively; and for Minerals Stock
were 279 and 491, respectively.

The following table summarizes information about stock options outstanding as of
December 31, 2000.

                               -----------------------------------    ---------------------
                                      Stock Options                       Stock Options
                                        Outstanding                       Exercisable
- -------------------------------------------------------------------------------------------
                                         Weighted
                                          Average
                                        Remaining         Weighted                 Weighted
                                      Contractual          Average                  Average
Range of                                     Life         Exercise                 Exercise
Exercise Prices               Shares      (Years)            Price       Shares       Price
- -------------------------------------------------------------------------------------------
                                                                     
Pittston Common Stock
$ 9.82 to 13.79                  743        5.10            $13.35           75     $ 10.60
 14.13 to 21.34                  838        3.72             18.44          366       18.58
 22.15 to 30.60                  854        2.93             26.89          597       26.98
 31.21 to 40.86                  820        2.79             35.25          698       34.80
 43.36 to 49.60                  151        2.34             49.61          151       49.61
 51.29 to 315.06                  33        2.17            126.43           29      128.75
- -------------------------------------------------------------------------------------------
Total                          3,439                                      1,916
===========================================================================================

Employee Stock Purchase Plan

Under the 1994 Employee Stock Purchase Plan (the "ESPP"), as amended, the
Company is authorized to issue up to 985 shares of Pittston Common Stock to its
employees who have six months of service and who complete minimum annual work
requirements. Under the terms of the ESPP, employees may elect each six-month
period (beginning January 1 and July 1), to have up to 10 percent of their
annual earnings withheld to purchase Company common stock. The purchase price of
the stock is 85% of the lower of its beginning-of-the-period or
end-of-the-period market price. Under the ESPP, the Company sold 125, 60 and 41
shares of Pittston Common Stock to employees during 2000, 1999 and 1998,
respectively; and sold 62 and 48 shares of BAX Stock, and 165 and 118 shares of
Minerals Stock, to employees during 1999 and 1998, respectively. As of December
31, 2000, 449 shares of Pittston Common Stock were authorized to be issued, but
not yet issued under the ESPP.

Accounting for Plans

The Company has adopted the disclosure - only provisions of SFAS No. 123,
"Accounting for Stock-Based Compensation", but applies APB Opinion No. 25 and
related interpretations in accounting for its plans. Accordingly, no
compensation cost has been recognized in the accompanying financial statements.
Had compensation costs for the Company's plans been determined based on the fair
value of awards at the grant dates, consistent with SFAS No. 123, then the net
income and net income per share would approximate the pro forma amounts
indicated below:

                                                  2000        1999         1998
- --------------------------------------------------------------------------------
                                                                
Net Income (loss) attributed to common shares
The Company
 As Reported                                 $(255,770)     52,278       62,532
 Pro Forma                                    (260,174)     47,197       57,550
Brink's Group
 As Reported                                       N/A      84,209       79,104
 Pro Forma                                         N/A      81,230       76,251
BAX Group
 As Reported                                       N/A      33,223      (13,091)
 Pro Forma                                         N/A      31,327      (15,017)
Minerals Group
 As Reported                                       N/A     (65,154)      (3,481)
 Pro Forma                                         N/A     (65,361)      (3,684)

Net Income (loss) per common share
The Company
 Basic, As Reported (b)                      $   (5.11)       1.06         1.28
 Basic, Pro Forma                                (5.21)       0.46         1.18
 Diluted, As Reported (b)                        (5.12)       0.70         1.27
 Diluted, Pro Forma                              (5.21)       0.60         1.17
Brink's Group
 Basic, As Reported                          $     N/A        2.16         2.04
 Basic, Pro Forma                                  N/A        2.08         1.97
 Diluted, As Reported                              N/A        2.15         2.02
 Diluted, Pro Forma                                N/A        2.07         1.95
BAX Group
 Basic, As Reported                                N/A        1.73        (0.68)
 Basic, Pro Forma                                  N/A        1.63        (0.78)
 Diluted, As Reported                              N/A        1.72        (0.68)
 Diluted, Pro Forma                                N/A        1.63        (0.78)
Minerals Group
 Basic, As Reported                                N/A       (7.33)       (0.42)
 Basic, Pro Forma                                  N/A       (7.35)       (0.44)
 Diluted, As Reported                              N/A       (8.61)       (0.42)
 Diluted, Pro Forma                                N/A       (8.63)       (0.44)
================================================================================

(a) The pro forma disclosures shown may not be representative of the effects on
reported net income in future years.

(b) These "as reported" net income per share amounts are calculated using pro
forma basic and diluted shares for 1999 and 1998 only. See Note 8.

                                       --
                                       43

The fair value of each stock option grant used to compute pro forma net income
and net income per share disclosures is estimated at the time of the grant using
the Black-Scholes option-pricing model. The weighted-average assumptions used in
the model are as follows:

                                               2000             1999        1998
- --------------------------------------------------------------------------------
                                                                   
Expected dividend yield:
 Pittston Common Stock                         0.4%             0.3%        0.3%
 BAX Stock                                     N/A              1.7%        1.7%
 Minerals Stock                                N/A              4.3%        1.8%
Expected volatility:
 Pittston Common Stock                         31%              32%         31%
 BAX Stock                                     N/A              64%         50%
 Minerals Stock                                N/A              44%         45%
Risk-Free interest rate:
 Pittston Common Stock                         6.0%             6.0%        5.3%
 BAX Stock                                     N/A              6.0%        5.3%
 Minerals Stock                                N/A              6.0%        5.3%
Expected term (in years):
 Pittston Common Stock                         4.5              4.3         4.4
 BAX Stock                                     N/A              4.4         4.3
 Minerals Stock                                N/A              2.8         3.8
================================================================================

Using these assumptions in the Black-Scholes model, the weighted-average fair
value of options granted during 2000, 1999 and 1998 for the Pittston Common
Stock is $5,548, $3,922 and $4,593, respectively. The weighted-average fair
value of options granted during 1999 and 1998, respectively, for the BAX Stock
is $2,473 and $1,928 and for the Minerals Stock is $89 and $250.

Under SFAS No. 123, compensation expense is also recognized for the fair value
of employee stock purchase rights. Because the Company settles its employee
stock purchase rights under the ESPP at the end of each six-month offering
period, the fair value of these purchase rights was calculated using actual
market settlement data. The weighted-average fair value of the stock purchase
rights granted in 2000, 1999 and 1998 was $507, $172 and $205 for Pittston
Common Stock, respectively, and was $148 and $93 for BAX Stock, and $42 and $58
for Minerals Stock, in 1999 and 1998, respectively.

10. CAPITAL STOCK

As discussed in Note 1, on December 6, 1999, the Company announced that its
Board of Directors (the "Board") had approved the elimination of the tracking
stock capital structure by an exchange of all outstanding shares of Minerals
Stock and BAX Stock for shares of Brink's Stock (the "Exchange"). The

Exchange took place on January 14, 2000 (the "Exchange Date"), on which date,
holders of Minerals Stock received 0.0817 share of Brink's Stock for each share
of their Minerals Stock; and holders of BAX Stock received 0.4848 share of
Brink's Stock for each share of their BAX Stock based on the shareholder
approved formula and calculated as follows:

                                                  Brink's         BAX   Minerals
(Per share prices)                                  Stock       Stock      Stock
- --------------------------------------------------------------------------------
                                                                
Ten day average price (a)                        $  18.92     $  7.98    $  1.34
Exchange factor                                      1.00        1.15       1.15
- --------------------------------------------------------------------------------
Fair Market Value, as defined (a)                $  18.92     $  9.17    $  1.54
Exchange ratio                                        N/A      0.4848     0.0817
================================================================================

(Per share prices)                Brink's Stock     BAX Stock     Minerals Stock
- --------------------------------------------------------------------------------
                                                               
Closing prices:
  December 3, 1999                    $  18.375     $ 10.0625           $  1.125
  December 6, 1999                       21.500       10.1250              1.625
================================================================================

(a) The "Fair Market Value" of each class of common stock was determined by
taking the average closing price of that class of common stock for the 10
trading days beginning 30 business days prior to the first public announcement
of the exchange proposal. Since the first public announcement was made on
December 6, 1999, the average closing price was calculated during the 10 trading
days beginning October 22, 1999 and ended November 4, 1999.

From and after the Exchange Date, Brink's Stock is the only outstanding class of
common stock of the Company and continues to trade on the New York Stock
Exchange under the symbol "PZB". Prior to the Exchange Date, Brink's Stock
reflected the performance of the Brink's Group only; after the Exchange Date,
Brink's Stock reflects the performance of the Company as a whole. Shares of
Brink's Stock after the Exchange are hereinafter referred to as "Pittston Common
Stock".

As a result of the Exchange on January 14, 2000, the Company issued 10,916
shares of Pittston Common Stock, which consists of 9,490 shares of Pittston
Common Stock equal to 100% of the Fair Market Value, as defined, of all BAX
Stock and Minerals Stock and 1,426 shares of Pittston Common Stock equal to the
additional 15% of the Fair Market Value of BAX Stock and Minerals Stock
exchanged pursuant to the above-described formula. Of the 10,916 shares issued,
10,196 shares were issued to holders of BAX Stock and Minerals Stock and 720
shares were issued to The Pittston Company Employee Benefits Trust (the
"Trust").

                                       --
                                       44

Shares issued to holders of BAX Stock and Minerals Stock (excluding those shares
issued to the Trust) were distributed as follows:

(In thousands except                               Holders of         Holders of
per share prices)                                   BAX Stock     Minerals Stock
- --------------------------------------------------------------------------------
                                                                    
Shares outstanding on January 13, 2000                 19,475              9,273

Brink's Stock issued pursuant
  to the Exchange:
  Based on 100% of Fair Market Value                    8,207                657
  Based on 15% of Fair Market Value                     1,233                 99
- --------------------------------------------------------------------------------
Total shares issued on January 14, 2000                 9,440                756
Brink's Stock closing price per share -
  December 3, 1999                                   $ 18.375             18.375
- --------------------------------------------------------------------------------
Value as of December 3, 1999 of Brink's
  Stock issued pursuant to the Exchange              $173,460             13,892
================================================================================

As set forth in the Company's Articles of Incorporation approved by the
shareholders, in the event of a dissolution, liquidation or winding up of the
Company, holders of Brink's Stock, BAX Stock and Minerals Stock would have
shared on a per share basis, the funds, if any, remaining for distribution to
the common shareholders. In the case of Minerals Stock, such percentage had been
set, using a nominal number of shares of Minerals Stock of 4,203 (the "Nominal
Shares") in excess of the actual number of shares of Minerals Stock outstanding.
The liquidation percentages were subject to adjustment in proportion to the
relative change in the total number of shares of Brink's Stock, BAX Stock and
Minerals Stock, as the case may be, then outstanding to the total number of
shares of all other classes of common stock then outstanding (which totals, in
the case of Minerals Stock, shall include the Nominal Shares). As of December 3,
1999, such liquidation percentages would have been approximately 54%, 27% and
19% for holders of Brink's Stock, BAX Stock and Minerals Stock, respectively.
Including the additional shares issued pursuant to the Exchange, the liquidation
percentages for former holders of Brink's Stock, BAX Stock and Minerals Stock,
respectively, as of January 14, 2000 would have been approximately 79%, 19% and
2%.

Upon completion of the Exchange on January 14, 2000, there were 49,484 issued
and outstanding shares of Pittston Common Stock for use in the calculation of
net income per common share.

The Company has authority to issue up to 2,000 shares of preferred stock, par
value $10 per share. In January 1994, the Company issued $80,500 or 161 shares
of its $31.25 Series C Cumulative Convertible Preferred Stock (the "Convertible
Preferred Stock"). The Convertible Preferred Stock pays an annual cumulative
dividend of $31.25 per share payable quarterly, in cash, in arrears, out of all
funds of the Company legally available therefore, when, as and if declared by
the Board, and bears a liquidation preference of $500 per share, plus an amount
equal to accrued and unpaid dividends, if any, thereon. Subsequent to the
Exchange Date, each share of the Convertible Preferred Stock is convertible at
the option of the holder at any time, unless previously redeemed or, under
certain circumstances, called for redemption, into shares of Pittston Common
Stock at an adjusted conversion price of $393.819 per share of Pittston Common
Stock (calculated by dividing the original conversion price of $32.175 per share
by the 0.0817 exchange ratio for the Minerals Stock), subject to adjustment in
certain circumstances. The Company may at its option, redeem the Convertible
Preferred Stock, in whole or in part, for cash at a price of $509.375 per share,
effective February 1, 2001, and thereafter at prices declining ratably annually
on each February 1 to an amount equal to $500.00 per share on and after February
1, 2004, plus in each case an amount equal to accrued and unpaid dividends on
the date of redemption. Except under certain circumstances or as prescribed by
Virginia law, shares of the Convertible Preferred Stock are nonvoting. Other
than the Convertible Preferred Stock, no shares of preferred stock are presently
issued or outstanding.

In February 2000, under the Company's common share repurchase program, the Board
reaffirmed the authority to purchase, from time to time, of up to 900 shares of
Pittston Common Stock, not to exceed an aggregate purchase cost of $22,184. The
authority to acquire shares remains in effect in 2001. Such shares are to be
purchased from time to time in the open market or in private transactions, as
conditions warrant. As of December 31, 2000, the Company had the remaining
authority to purchase, from time to time, shares of the Convertible Preferred
Stock not to exceed an aggregate purchase cost of $5,394.

                                       --
                                       45

Under the share repurchase program, the Company purchased shares in the periods
presented as follows:

                                                         Years Ended December 31
(In thousands)                                               2000           1999
- --------------------------------------------------------------------------------
                                                                    
Pittston Common Stock:
Shares                                                        --             N/A
Cost                                                          --             N/A

Brink's Stock:
Shares                                                       N/A           100.0
Cost                                                      $  N/A           2,514

Convertible Preferred Stock:
Shares                                                       8.1            83.9
Cost                                                      $2,162          20,980
Excess carrying amount (a)                                $1,734          19,201
================================================================================

(a) The excess of the carrying amount of the Convertible Preferred Stock over
the cash paid to holders for repurchases made during the years is deducted from
preferred dividends in the Company's Consolidated Statement of Operations.

In 2000, 1999 and 1998, dividends paid on the Convertible Preferred Stock
amounted to $861, $1,580 and $3,547, respectively. During 2000, the Board
declared and the Company paid dividends of $5,010 on Pittston Common Stock.
During 1999 and 1998, the Board declared and the Company paid dividends of
$3,907 and $3,874 on Brink's Stock, $4,623 and $4,642 on BAX Stock, and $216 and
$1,969 on Minerals Stock, respectively.

In February 2001, the Board declared a cash dividend of $0.025 per share on
Pittston Common Stock, payable on March 1, 2001 to shareholders of record on
February 20, 2001.

Under an Amended and Restated Rights Agreement dated as of January 14, 2000,
holders of Pittston Common Stock have rights to purchase a new Series A
Participating Cumulative Preferred Stock (the "Series A Preferred Stock") of the
Company at the rate of one right for each share of Pittston Common Stock. Each
right, if and when it becomes exercisable, will entitle the holder to purchase
one-thousandth of a share of Series A Preferred Stock at a purchase price of
$60.00, subject to adjustment.

Each fractional share of Series A Preferred Stock will be entitled to
participate in dividends and to vote on an equivalent basis with one whole share
of Pittston Common Stock. Each right will not be exercisable until after a third
party acquires 15% or more of the total voting rights of all outstanding
Pittston Common Stock or on such date as may be designated by the Board after
commencement of a tender offer or exchange offer by a third party for 15% or
more of the total voting rights of all outstanding Pittston Common Stock.

If after the rights become exercisable, the Company is acquired in a merger or
other business combination, each right will entitle the holder to purchase, for
the purchase price, common stock of the surviving or acquiring company having a
market value of twice the purchase price. In the event a third party acquires
15% or more of all outstanding Pittston Common Stock, the rights will entitle
each holder to purchase, at the purchase price, that number of fractional shares
of Series A Preferred Stock equivalent to the number of shares of common stock
which at the time of the triggering event would have a market value of twice the
purchase price. As an alternative to the purchase described in the previous
sentence, the Board may elect to exchange the rights for other forms of
consideration, including that number of shares of common stock obtained by
dividing the purchase price by the market price of the common stock at the time
of the exchange or for cash equal to the purchase price. The rights may be
redeemed by the Company at a price of $0.01 per right and expire on September
25, 2007.

In December 1992, the Company formed The Pittston Company Employee Benefits
Trust to hold shares of its common stock (initially 4,000 shares) to fund
obligations under certain employee benefit programs. The Trust first began
funding obligations under the Company's various plans in September 1995 that
provide for the issuance of stock. In November 1998, the Company sold for a
promissory note from the Trust, 1,500 new shares of BAX Stock and 800 new shares
of Minerals Stock at a price equal to the closing value of each stock,
respectively, on the date prior to issuance. In October 1999, the Company sold
for a promissory note from the Trust, 900 new shares of Minerals Stock at a
price equal to the closing value of the stock on the date prior to issuance. As
of December 31, 2000, 1,279 shares of Pittston Common Stock remained in the
Trust carried at market value ($25,426). As of December 31, 1999, 1,573 shares
of Brink's Stock, 1,350 shares of BAX Stock and 813 shares of Minerals Stock
remained in the Trust, carried at market value. The shares of the Pittston
Common Stock will be voted by the trustee in the same proportion as those voted
by the Company's employees participating in the Company's Savings Investment
Plan. The fair market value of the shares held in the Trust is included in each
issue of common stock and capital in excess of par.

                                       --
                                       46

11. LEASES

The Company and its subsidiaries lease aircraft, facilities, vehicles, computers
and other equipment under long-term operating and capital leases with varying
terms. Most of the operating leases contain renewal and/or purchase options.

As of December 31, 2000, aggregate future minimum lease payments under
noncancellable operating leases were as follows:

                                                         Equipment
                              Aircraft    Facilities       & Other         Total
- --------------------------------------------------------------------------------
                                                             
2001                           $33,124        67,395        16,316       116,835
2002                            20,109        56,187        11,740        88,036
2003                             3,926        45,470         8,294        57,690
2004                                --        37,963         6,235        44,198
2005                                --        29,520         4,860        34,380
Later Years                         --       147,718         7,597       155,315
- --------------------------------------------------------------------------------
Total                          $57,159       384,253        55,042       496,454
================================================================================

These amounts are net of aggregate future minimum noncancellable sublease
rentals of $1,089.

Net rent expense amounted to $146,937 in 2000, $145,405 in 1999 and $124,108 in
1998 and includes rent expense for certain vehicles with initial lease terms of
less than one year.

The Company incurred capital lease obligations of $6,950 in 2000 and $6,326 in
1999. Minimum future lease payments under capital leases as of December 31,
2000, for each of the next five years and in the aggregate are:

                                                                      
- --------------------------------------------------------------------------------
2001                                                                     $ 8,961
2002                                                                       6,193
2003                                                                       4,160
2004                                                                       3,234
2005                                                                       2,914
Subsequent to 2005                                                         4,097
- --------------------------------------------------------------------------------
Total minimum lease payments                                              29,559
Less: Executory costs                                                         10
- --------------------------------------------------------------------------------
Net minimum lease payments                                                29,549
Less: Amount representing interest                                         2,332
- --------------------------------------------------------------------------------
Present value of net minimum lease payments                              $27,217
================================================================================

Interest rates on capital leases, primarily at foreign subsidiaries, vary from
3.0% to 26.0% and are imputed based on the lower of the Company's incremental
borrowing rate at the inception of each lease or the lessor's implicit rate of
return.

There were no non-cancellable subleases and no contingent rental payments in
2000 or 1999.

At December 31, 2000, the Company had contractual commitments with third
parties, to provide aircraft usage and services to BAX Global, which expire in
2001 through mid 2002. The fixed and determinable portion of the obligations
under these agreements aggregate approximately $56,160 in 2001 and $7,570 in
2002. During the year, BAX Global reduced its dependency on a supplier which
filed for Chapter 11 bankruptcy protection in May of 2000. This reduction in
lift capacity, to the extent necessary, was replaced by other suppliers.

12. EMPLOYEE BENEFIT PLANS

The employee benefit plans described below cover employees of both continuing
and discontinued operations of the Company. Accordingly, a portion of these
benefit expenses have been included in the results of discontinued operations
for the years presented.

The Company and its subsidiaries maintain several noncontributory defined
benefit pension plans covering substantially all nonunion employees who meet
certain minimum requirements, in addition to sponsoring certain other defined
benefit plans. Benefits under most of the plans are based on salary (including
commissions, bonuses, overtime and premium pay) and years of service. The
Company's policy is to fund the actuarially determined amounts necessary to
provide assets sufficient to meet the benefits to be paid to plan participants
in accordance with applicable regulations.

The net pension (credit) expense for 2000, 1999 and 1998 for all plans is as
follows:

                                                        Years Ended December 31
                                                 2000         1999         1998
- --------------------------------------------------------------------------------
                                                                
Service cost (benefits earned
 during year)                                $ 23,613       24,417       19,932
Interest cost on projected benefit
 obligation                                    35,001       32,466       30,181
Return on assets-expected                     (55,296)     (48,914)     (45,115)
Curtailment gain, net                          (4,412)          --           --
Other amortization, net                          (315)       2,860        2,156
- --------------------------------------------------------------------------------
Net pension (credit) expense                 $ (1,409)      10,829        7,154
================================================================================

                                       --
                                       47

The assumptions used in determining the net pension expense for the Company's
primary pension plan were as follows:

                                                      2000       1999       1998
- --------------------------------------------------------------------------------
                                                                  
Interest cost on projected benefit                    7.5%       7.0%       7.5%
  obligation
Expected long-term rate of return                    10.0%      10.0%      10.0%
  on assets
Average rate of increase in
  compensation levels                                 4.0%       4.0%       4.0%
================================================================================

Reconciliations of the projected benefit obligation, plan assets, funded status
and prepaid pension expense at December 31, 2000 and 1999 for the Company's
primary pension plan as well as other less significant foreign and domestic
plans are as follows:

                                                        Years Ended December 31
                                                              2000         1999
- --------------------------------------------------------------------------------
                                                                  
Projected benefit obligation at beginning of year        $ 474,764      498,066
Service cost (benefits earned during the year)              23,613       24,417
Interest cost on projected benefit obligation               35,001       32,466
Plan participants' contributions                               515        1,437
Acquisitions and plan amendments                               684        1,676
Benefits paid                                              (25,149)     (21,605)
Actuarial (gain) loss                                       28,922      (58,286)
Foreign currency exchange rate changes                      (5,114)      (3,403)
Curtailment gain                                            (5,773)          --
- --------------------------------------------------------------------------------
Projected benefit obligation at end of year              $ 527,463      474,768
- --------------------------------------------------------------------------------

Fair value of plan assets at beginning of year           $ 660,509      566,172
Return on assets - actual                                  (11,041)     114,079
Acquisitions                                                    --          283
Plan participants' contributions                               515        1,437
Employer contributions                                       2,431        2,580
Benefits paid                                              (25,149)     (21,605)
Foreign currency exchange rate changes                      (5,984)      (2,437)
- --------------------------------------------------------------------------------
Fair value of plan assets at end of year                 $ 621,281      660,509
- --------------------------------------------------------------------------------

Funded status                                            $  93,818      185,741
Unrecognized experience (gain) loss                          4,648      (89,311)
Unrecognized prior service cost                              2,021        1,791
Other                                                          513          (77)
- --------------------------------------------------------------------------------
Net pension assets                                         101,000       98,144
- --------------------------------------------------------------------------------
Current pension liabilities                                    887          795
Noncurrent pension liabilities                              16,494       14,654
- --------------------------------------------------------------------------------
Deferred pension assets per balance sheet                $ 118,381      113,593
================================================================================

For the valuation of the Company's primary pension plan obligations and the
calculation of the funded status, the discount rate was 7.5% and the expected
long-term rate of return on assets was 10% in both 2000 and 1999. The rate of
increase in compensation levels, though varying by company and by age, on
average approximated 4% in both 2000 and 1999.

Pursuant to its formal plan to exit the coal business and in accordance with
SFAS 88, "Employers' Accounting for Settlements and Curtailments of Defined
Benefit Pension Plans and for Termination Benefits", the Company recorded a
curtailment gain during 2000 of $4,412. This gain includes a $5,773 reduction in
the projected benefit obligation, partially offset by a $1,226 reduction in the
unrecognized experience loss and the recognition of a portion of unrecognized
prior service costs of $135.

Net pension assets included an unrecognized loss of $4,648 at December 31, 2000
and an unrecognized gain of $89,311 at December 31, 1999. The unrecognized
gain/loss was primarily affected by the actual return on assets, which exceeded
the expected return in 1999, but was lower than the expected return in 2000.

The Company and its subsidiaries also provide certain postretirement health care
and life insurance benefits for eligible active and retired employees in the
United States and Canada. For the years 2000, 1999 and 1998, the components of
periodic expense for these postretirement benefits were as follows:

                                                         Years Ended December 31
                                                        2000      1999      1998
- --------------------------------------------------------------------------------
                                                                 
Service cost (benefits earned during the year)         $ 774     1,442     1,167
Interest cost on accumulated postretirement
  benefit obligation                                  23,782    23,084    22,412
Amortization of losses                                 3,634     5,115     2,929
Curtailment loss                                       6,019        --        --
- --------------------------------------------------------------------------------
Total postretirement expense                         $34,209    29,641    26,508
================================================================================

The actuarially determined and recorded liabilities for the following
postretirement benefits have not been funded.

                                       --
                                       48

Reconciliations of the accumulated postretirement benefit obligation, funded
status and accrued postretirement benefit cost at December 31, 2000 and 1999 are
as follows:

                                                        Years Ended December 31
                                                             2000          1999
- --------------------------------------------------------------------------------
                                                                  
Accumulated postretirement benefit
 obligation at beginning of year                        $ 335,260       336,831
Service cost (benefits earned during the year)                774         1,442
Interest cost on accumulated postretirement
 benefit obligation                                        23,782        23,084
Benefits paid                                             (24,515)      (23,591)
Actuarial (gain) loss                                      35,066        (2,551)
Curtailment loss                                            6,019            --
Foreign currency exchange rate changes                        (29)           45
- --------------------------------------------------------------------------------
Total accumulated postretirement benefit
 obligation at end of year                              $ 376,357       335,260
- --------------------------------------------------------------------------------

Accumulated postretirement benefit
 obligation at end of year-retirees                     $ 325,696       283,154
Accumulated postretirement benefit
 obligation at end of year-active participants             50,661        52,106
- --------------------------------------------------------------------------------
Total accumulated postretirement benefits
 obligation at end of year                              $ 376,357       335,260
- --------------------------------------------------------------------------------

Funded status                                           $(376,357)     (335,260)
Unrecognized experience loss                              101,941        70,508
- --------------------------------------------------------------------------------
Accrued postretirement benefit cost at
 end of year                                            $(274,416)     (264,752)
================================================================================

The accumulated postretirement benefit obligation was determined using the unit
credit method and an assumed discount rate of 7.5% in both 2000 and 1999. The
assumed health care cost trend rate used in 2000 was 5% for all retirees. The
assumed Medicare cost trend rate used in 2000 was 5%.

A one percentage point increase each year in the assumed health care cost trend
rate used would have resulted in an increase of approximately $3,624 in the
aggregate service and interest components of expense for the year 2000, and an
increase of approximately $47,796 in the accumulated postretirement benefit
obligation at December 31, 2000.

A one percentage point decrease each year in the assumed health care cost trend
rate would have resulted in a decrease of approximately $2,998 in the aggregate
service and interest components of expense for the year 2000 and a decrease of
approximately $39,542 in the accumulated postretirement benefit obligation at
December 31, 2000.

Pursuant to its formal plan to exit the coal business and in accordance with
SFAS No. 106, the Company recorded a curtailment loss during 2000 of $6,019,
representing an increase in the projected benefit obligation as of December 31,
2000. The increase in the Company's unrecognized experience loss as of December
31, 2000 is primarily due to an increase in the per capita medical claims cost
curve for the Company's United Mine Workers of America ("UMWA") plan.

Under the 1990 collective bargaining agreement with the UMWA, the Company agreed
to make payments at specified contribution rates for the benefit of the UMWA
employees. The trustees of the UMWA pension fund contested the agreement and
brought action against the Company. While the case was in litigation, the
Company's benefit payments under the UMWA agreement were made into an escrow
account for the benefit of union employees. During 1996, the case was settled
and the escrow funds were released. As a result of the settlement, the Coal
Operations subsidiaries agreed to continue their participation in the UMWA 1950
and 1974 pension plan at defined contribution rates. Under this plan, expense
recognized in 2000, 1999 and 1998 was $35, $57 and $574, respectively.

Expense recognized in 2000, 1999 and 1998 for other multi-employer plans was
$490, $579 and $765, respectively.

The Company also sponsors a 401(k) Savings-Investment Plan to assist eligible
employees in providing for retirement or other future financial needs. Employee
contributions are matched at rates of 50% to 100% up to 5% of compensation
(subject to certain limitations imposed by the Internal Revenue Code of 1986, as
amended). Contribution expense under the plan aggregated $9,063 in 2000, $8,552
in 1999 and $7,745 in 1998.

The Company sponsors other defined contribution benefit plans based on hours
worked, tons produced or other measurable factors. Contributions under all of
these plans aggregated $2,754 in 2000, $1,509 in 1999 and $986 in 1998.

In October 1992, the Coal Industry Retiree Health Benefit Act of 1992 (the
"Health Benefit Act") was enacted as part of the Energy Policy Act of 1992. The
Health Benefit Act established rules for the payment of future health care
benefits for thousands of retired union mine workers and their dependents. The
Health Benefit Act established a trust fund to which "signatory operators" and
"related persons", including the Company and certain of its subsidiaries
(collectively, the "Pittston Companies") are jointly and severally liable to pay
annual premiums for assigned beneficiaries, together with a pro rata share for
certain beneficiaries who never worked for such employers ("unassigned
beneficiaries") including in the Company's case, the Pittston Companies in
amounts determined on the basis set forth in the Health Benefit Act. In October
1993 and at various times in subsequent years, the Pittston Companies have
received notices from the Social Security Administration (the "SSA") with regard
to the assigned beneficiaries for which the Pittston Companies are responsible
under the Health Benefit Act. In addition, the Health Benefit Act requires the
Pittston Companies to fund, pro rata

                                       --
                                       49

according to the total number of assigned beneficiaries, a portion of the health
benefits for unassigned beneficiaries. At this time, the funding for such health
benefits is being provided from another source; the statutory authorization to
obtain such funds is currently scheduled to cease by 2005. In the determination
of the Pittston Companies' ultimate obligation under the Health Benefit Act,
such funding has been taken into consideration.

Prior to December 31, 2000, the Company accounted for its obligations under the
Health Benefit Act as a participant in a multi-employer benefit plan and thus,
recognized the annual cost of these obligations on a pay-as-you-go basis. For
2000, 1999 and 1998, cash payments for such amounts were approximately $9,000,
$10,400 and $9,600, respectively. Pursuant to its formal plan to exit the coal
business, the Company recorded its estimated undiscounted liability relating to
such obligations at December 31, 2000 as a $161,700 one-time charge to the net
loss from discontinued operations. Such obligations, if discounted at 7.5% would
provide a present value estimate of approximately $80,000. The Company currently
estimates that the annual cash funding under the Health Benefit Act for the
Pittston Companies' assigned beneficiaries will continue at about the same
annual level for the next several years and should begin to decline thereafter
as the number of such assigned beneficiaries decreases.

In addition, under the Health Benefit Act, the Pittston Companies are jointly
and severally liable for certain postretirement health benefits for thousands of
additional retired union mine workers and their dependents under plans provided
by the Company. Substantially all of the Company's accumulated postretirement
benefit obligation for retirees of $325,696 as of December 31, 2000 relates to
such retired workers and their beneficiaries.

The ultimate costs that will be incurred by the Company under the Health Benefit
Act and its postretirement medical plans could be significantly affected by,
among other things, the rate of inflation for medical costs, changes in the
number of beneficiaries, governmental funding arrangements and such federal
health benefit legislation of general application as may be enacted.

The Company has established a Voluntary Employees' Beneficiary Association
("VEBA") which is intended to tax efficiently fund certain retiree medical
liabilities primarily for retired coal miners and their dependents. The VEBA may
receive partial funding from the proceeds of the planned sale of the Company's
coal business as well as other sources over time. The Company contributed
$15,000 to the VEBA in December 1999. As of December 31, 2000, the balance in
the VEBA was $15,900, and was included in other non-current assets.

13. RESTRUCTURING AND OTHER EXIT COSTS

Over the course of 2000, the operating performance of BAX Global's Americas
region was negatively impacted by lower than expected demand and higher
transportation, operating and administrative costs relative to that lower
demand. As such, BAX Global evaluated alternatives directed at returning its
Americas operations to profitability, including ways to improve sales
performance and to reduce transportation, operating and administrative expenses.
During the fourth quarter of 2000, BAX Global finalized a restructuring plan
aimed at reducing the capacity and cost of its airlift capabilities in the US as
well as reducing station operating expenses, sales costs and overhead in the
Americas and Atlantic regions, including:

o     The removal of 10 planes from the fleet, 9 of which were dedicated to
      providing lift capacity in BAX Global's commercial cargo system.

o     The closure of 9 operating stations and realignment of domestic
      operations.

o     The reduction of employee-related costs at BAX Global and ATI through the
      elimination of approximately 300 full-time positions including aircraft
      crew and station operating, sales and business unit overhead positions.

In addition, certain Atlantic region operations were streamlined in order to
reduce overhead costs and improve overall performance in that region. The
Atlantic region restructuring efforts involved severance costs and station
closing costs in the UK, Denmark, South Africa and Italy. Approximately 50
positions were eliminated, most of which were positions at or above manager
level.

The following is a summary of the charges incurred in the fourth quarter related
to the restructuring:

                                              Americas     Atlantic        Total
(In thousands)                                  Region       Region   BAX Global
- --------------------------------------------------------------------------------

Fleet related charges                          $49,702           --       49,702
Severance costs                                  1,130        1,148        2,278
Station and other closure costs                  3,777        1,730        5,507
- --------------------------------------------------------------------------------
Total restructuring charge (a)                 $54,609        2,878       57,487
================================================================================

(a) Includes noncash charges of $45,180. Substantially all severance costs are
expected to be paid out before June 30, 2001. Other cash charges primarily
include contractual commitments for aircraft and facilities, approximately
two-thirds of which are expected to be paid out during 2001, with the remainder
expected to be paid out by the end of 2002.

                                       --
                                       50

During 1998, approximately $7,000 was accrued for severance and other expenses
primarily stemming from a realignment of BAX Global's organizational structure.
During 1999, the entire severance accrual was paid out in cash with the
exception of $100 which was reversed into income, representing the unused
portion of the original accrual.

14. SEGMENT INFORMATION

The Company has four reportable operating segments: Brink's, BHS, BAX Global and
Other Operations. Management has determined these reportable segments based on
how resources are allocated and how operating decisions are made. The Company's
reportable segments are business units that offer different types of products
and services. Management evaluates performance and allocates resources based on
operating profit or loss excluding corporate allocations. The Company's coal
operations have been reported as discontinued operations as of December 31,
2000. As a result, segment disclosures for 2000 have been restated to exclude
the Company's discontinued operations. Discontinued operations are discussed in
Note 16.

Brink's is a worldwide security transportation and services company and BHS
installs and monitors residential security systems in the United States and
Canada. BAX Global is a transportation and supply chain management company
offering multi-modal freight forwarding for business-to-business shippers
through a global network. Other Operations consists of Mineral Ventures and
Allied Operations, which is comprised of gas and timber operations. Mineral
Ventures is a gold production and exploration company which has interests in a
gold mine in Australia and explores for gold and base metals in Australia and
Nevada. The Company's gas operations provide royalty and other income from gas
development and operation of the Company's natural gas reserves by third
parties. The Company's timber operations provide income from the sale of timber
cutting rights on certain Company properties as well as from the operation of a
sawmill, a hardwood chip mill and a railroad tie mill.

Operating segment information is as follows:

                                                        Years Ended December 31
                                           2000            1999            1998
- --------------------------------------------------------------------------------
                                                             
Net Sales and Operating Revenues:
Brink's                             $ 1,462,923       1,372,491       1,247,681
BHS                                     238,069         228,720         203,586
BAX Global                            2,097,600       2,083,414       1,776,980
- --------------------------------------------------------------------------------
Total business and
 security services                    3,798,592       3,684,625       3,228,247
Other Operations                         35,520          25,073          23,332
- --------------------------------------------------------------------------------
Net sales and operating
 revenues (a), (b)                  $ 3,834,112       3,709,698       3,251,579
================================================================================
Operating Profit (Loss):
Brink's (c)                         $   108,509         103,547          98,420
BHS (d)                                  54,340          54,234          53,032
BAX Global (e)                          (99,612)         61,460            (628)
- --------------------------------------------------------------------------------
Total business and
 security services                       63,237         219,241         150,824
Other Operations (f)                      5,714             327           5,472
- --------------------------------------------------------------------------------
Segment operating profit                 68,951         219,568         156,296
General Corporate expense               (21,264)        (22,995)        (27,857)
- --------------------------------------------------------------------------------
Operating profit                    $    47,687         196,573         128,439
================================================================================

(a) Includes US revenues of $1,954,562, $1,915,338 and $1,761,652 in 2000, 1999
and 1998, respectively.

(b) The Company has no single customer representing greater than 10% of its
revenues.

(c) Includes equity in net income of unconsolidated affiliates of $4,336 in
2000, $4,564 in 1999, and $1,235 in 1998.

(d) BHS changed its method of accounting for non-refundable installation
revenues and the related direct costs of subscriber acquisitions which reduced
operating profit by $2,325 in 2000 (see Note 1).

(e) The 2000 amounts include restructuring charges of $57,487 (see Note 13). The
1998 amounts include additional expenses of approximately $36,000 related to the
termination or rescoping of certain information technology projects
(approximately $16,000), increased provisions on existing accounts receivable
(approximately $13,000) and approximately $7,000 primarily related to severance
expenses associated with BAX Global's redesign of its organizational structure.

(f) Includes equity in net income (loss) of unconsolidated affiliates of $407 in
2000, ($261) in 1999 and $438 in 1998.

                                       --
                                       51

                                                         Years Ended December 31
                                                2000          1999          1998
- --------------------------------------------------------------------------------
                                                                 
Capital Expenditures:
Brink's                                     $ 73,837        84,414        74,716
BHS                                           74,496        80,633        81,671
BAX Global                                    60,147        94,465        75,648
- --------------------------------------------------------------------------------
Total business and
 security services                           208,480       259,512       232,035
Other Operations                               5,186         9,317         6,834
General Corporate                                777            80           550
Capital expenditures                        $214,443       268,909       239,419
================================================================================
Depreciation and Amortization:
Brink's                                     $ 60,195        53,002        45,742
BHS (a)                                       62,116        49,919        36,630
BAX Global                                    61,300        40,410        35,287
- --------------------------------------------------------------------------------
Total business and
 security services                           183,611       143,331       117,659
Other Operations                               4,929         4,688         3,954
General Corporate                                410           834           684
- --------------------------------------------------------------------------------
Depreciation and amortization               $188,950       148,853       122,297
================================================================================

(a) Includes amortization of deferred subscriber acquisition costs of $4,122 in
2000 as a result of implementing SAB No. 101 (see Note 1).

                                                               As of December 31
                                              2000           1999           1998
- --------------------------------------------------------------------------------
                                                              
Assets:
Brink's (a)                             $  719,148        686,259        651,745
BHS (b)                                    353,421        294,734        263,362
BAX Global                                 724,492        834,663        726,797
- --------------------------------------------------------------------------------
Total business and
 security services                       1,797,061      1,815,656      1,641,904
Other Operations (c)                        39,378         42,784         33,042
- --------------------------------------------------------------------------------
Identifiable segment assets              1,836,439      1,858,440      1,674,946
General Corporate (d), (e)                 441,587        291,279        242,996
Assets (f), (g)                         $2,278,026      2,149,719      1,917,942
================================================================================

(a) Includes investments in unconsolidated equity affiliates of $22,079, $18,932
and $14,994 in 2000, 1999 and 1998, respectively.

(b) Includes deferred subscriber acquisition costs of $41,752 as of December 31,
2000, recorded as a result of SAB No. 101 (see Note 1).

(c) Includes investments in unconsolidated equity affiliates of $4,379, $7,129
and $5,034 in 2000, 1999 and 1998, respectively.

(d) Includes investment in unconsolidated joint venture accounted for under the
equity method of $6,190, $5,332 and $4,091 in 2000, 1999 and 1998, respectively.

(e) Primarily cash, investments, advances, deferred pension assets and deferred
tax assets. Deferred tax assets in 1999 and 1998 have been reclassified from the
operating segments to General Corporate, to conform to the current year's
presentation.

(f) Includes long-lived assets (property, plant and equipment, net) located in
the US of $544,278, $544,988 and $438,312 as of December 31, 2000, 1999 and
1998, respectively.

(g) Total assets do not include assets associated with the discontinued Coal
Operations of $200,683, $309,982 and $413,195 in 2000, 1999 and 1998,
respectively, some of which will be retained by the Company (see Note 16).

15. LITIGATION

In April 1990, the Company entered into a settlement agreement to resolve
certain environmental claims against the Company arising from hydrocarbon
contamination at a petroleum terminal facility ("Tankport") in Jersey City, New
Jersey, which operations were sold in 1983. Under the settlement agreement, the
Company is obligated to pay 80% of the remediation costs. Based on data
available to the Company and its environmental consultants, the Company
estimates its portion of the actual future clean-up costs, on an undiscounted
basis, using existing technologies to be between $6,000 and $9,500. Management
is unable to determine that any amount within that range is a better estimate
due to a variety of uncertainties, which include the extent of the contamination
at the site, the permitted technologies for remediation and the regulatory
standards by which the cleanup will be conducted. The clean-up estimates have
been modified from prior years' in light of cost inflation, the application of
new technologies and certain assumptions the Company is making with respect to
the end use of the property. The estimate of costs and the timing of payments
could change materially as a result of changes to the remediation plan required,
changes in the technology available to treat the site, unforeseen circumstances
existing at the site and additional cost inflation.

The Company commenced insurance litigation in 1990, in the United States
District Court of the District of New Jersey, seeking a declaratory judgment
that all amounts payable by the Company pursuant to the Tankport obligation were
reimbursable under comprehensive general liability and pollution liability
policies maintained by the Company. The Company was able to conclude settlement
with all of its insurers without a trial. Taking into account the proceeds from
the settlement with its insurers, it is the Company's belief that the ultimate
amount that it will be liable for related to the remediation of the Tankport
site will not have a significant adverse impact on the Company's results of
operations or financial position.

16. DISCONTINUED OPERATIONS

On December 6, 1999, the Company announced its intention to exit the coal
business through the sale of the Company's coal mining operations and reserves.
Based on progress since that date, the Company has formalized its plan to
dispose of those operations by the end of 2001. Accordingly, Coal Operations
have been reported as discontinued operations of the Company as of December 31,
2000. The accompanying financial statements and related disclosures for all
periods presented have been reclassified accordingly.

                                       --
                                       52

The Company's formal plan of disposal includes the sale of all of its active and
idle coal mining operations and reserves, primarily in West Virginia, Virginia
and Kentucky (including 23 company or contractor operated mines and 6 active
plants) as well as other assets, which support those operations. The Company is
also planning to sell its partnership interest in a coal port facility in
Newport News, Virginia ("DTA") (Note 18). The Company expects to sell these
properties and support operations by December 31, 2001. Net assets to be sold
primarily include inventory and property, plant and equipment, net of certain
liabilities, primarily reclamation on active properties. Total proceeds from the
sale of Coal Operations which includes cash, the value of future royalties and
liabilities transferred, are expected to exceed $100,000.

Net sales and income (loss) from discontinued operations for the years ended
December 31, 2000, 1999 and 1998 were as follows:

                                                 2000         1999         1998
- --------------------------------------------------------------------------------
                                                               
Net sales from discontinued
 operations                                 $ 401,049      436,683      583,630
- --------------------------------------------------------------------------------
Pretax loss from the operations of the
 discontinued segment                         (32,407)    (122,054)      (2,125)
Income tax benefit                            (14,172)     (48,663)      (7,008)
- --------------------------------------------------------------------------------
Income (loss) from the operations of the
 discontinued segment, net of tax             (18,235)     (73,391)       4,883
- --------------------------------------------------------------------------------

Estimated pretax loss on the disposal of
 the discontinued segment                    (294,229)          --           --
Income tax benefit                           (105,088)          --           --
- --------------------------------------------------------------------------------
Estimated loss on the disposal of the
 discontinued segment, net of tax            (189,141)          --           --
- --------------------------------------------------------------------------------
Income (loss) from discontinued
 operations                                 $(207,376)     (73,391)       4,883
================================================================================

Net sales for all periods presented have been restated to reflect the adoption
of Emerging Issues Task Force ("EITF") Issue No. 00-10 "Accounting for Shipping
and Handling Fees and Costs". In accordance with EITF No. 00-10, the Company's
Coal Operations now report sales and costs charged for certain shipping and
handling activities on a gross basis so that such amounts are reflected as a
component of net sales and as a component of cost of sales. Previously, such
costs were netted against revenues to arrive at net sales. The implementation of
EITF No. 00-10 did not impact Coal Operations operating results or net loss
since net sales and cost of sales were increased by equal amounts. The increases
to net sales and cost of sales for the years ended December 31, 2000, 1999 and
1998 were $47,129, $57,231 and $88,327, respectively.

Pretax losses from discontinued operations represent Coal Operations operating
losses for all periods presented through December 31, 2000. The operating loss
attributable to the discontinued segment for 1999 includes a charge of $82,280
related to the impairment of long-lived assets and a joint venture interest as
well as other mine closure costs, substantially all of which were non-cash.
Income tax benefits attributable to the losses from discontinued operations
include the benefits of percentage depletion.

The estimated loss on the disposal of the discontinued segment includes the
following:

                                                    Year Ended December 31, 2000
- --------------------------------------------------------------------------------
                                                                   
Curtailment and recordation of benefit plans (a)                      $(163,307)
Estimated loss on the sale of coal assets                               (85,956)
Estimated operating losses during the
 sale period                                                            (44,966)
- --------------------------------------------------------------------------------
Estimated pretax loss on the disposal of the
 discontinued segment                                                  (294,229)
Income tax benefit                                                     (105,088)
- --------------------------------------------------------------------------------
Estimated loss on the disposal of the
 discontinued segment, net of tax                                     $(189,141)
================================================================================

(a) Prior to December 31, 2000, the Company accounted for its obligations under
the Health Benefit Act as a participant in a multi-employer plan and thus,
recognized the annual cost of these obligations on a pay-as-you-go basis.
Pursuant to its formal plan to exit the coal business as of December 31, 2000,
the Company recorded its estimated undiscounted liability relating to such
obligations as a one-time charge to the net loss from discontinued operations
(see Note 16).

Estimates regarding losses on the sale of coal assets of $85,956 and losses
during the sale period of $44,966 are subject to known and unknown risks,
uncertainties and contingencies which could cause actual results to differ
materially from those which are anticipated. Such risks, uncertainties and
contingencies, many of which are beyond the control of the Company, include, but
are not limited to, overall economic and business conditions, demand and
competitive factors in the coal industry, the impact of delays in the issuance
or the non-issuance of mining permits, the timing of and consideration received
for the sale of the coal assets, geological conditions and variations in the
spot prices of coal.

                                       --
                                       53

On February 10, 1999, the US District Court of the Eastern District of Virginia
entered a final judgment in favor of certain of the Company's subsidiaries,
ruling that the Federal Black Lung Excise Tax ("FBLET") imposed under Section
4121 of the Internal Revenue Code is unconstitutional as applied to export coal
sales and ordering a refund to the subsidiaries. A total of $800 (including
interest) was refunded in 1999 for the FBLET that those companies paid for the
quarter ended March 31, 1997. The Company has sought refunds of the FBLET it
paid on export coal sales for all open statutory periods and expects to receive
such refunds for some or all of that tax paid (plus interest), pursuant to a
review of claim documentation by the Internal Revenue Service. Due to the
uncertainty of the ultimate amounts to be received, which it estimates could
range from $12,000 to $20,000 (pretax), and timing of the FBLET refunds, the
Company has not currently recorded a receivable for such amounts in its estimate
of operating losses during the sale period. The Company is also pursuing
additional claims pending a decision by the US Supreme Court related to another
company. The ultimate amounts and timing of such additional refunds, if any,
cannot be determined at this time.

Although the Company would not be currently liable for a multi-employer pension
plan withdrawal liability associated with its planned exit from the coal
business, it could, under certain circumstances, become liable for such
obligations during the sale process. Such liability, if any, is subject to
several factors, the effects of which cannot be predicted at this time. Those
factors include funding and benefit levels of the plans and the ultimate timing
and form of the sale transactions. Accordingly, the Company has not recorded a
withdrawal liability in the determination of the estimated loss on disposal.

Certain non-operating assets and liabilities will be retained by the Company,
including net working capital (excluding inventory), certain parcels of land,
income and non-income tax assets and liabilities, certain inactive employee
liabilities (primarily for postretirement medical benefits), workers'
compensation and black lung obligations and reclamation related liabilities
associated with certain closed coal mining sites in Virginia, West Virginia and
Kentucky. In addition, the Company expects to retain its unconditional guarantee
of the payment of the principal ($43,160) and premium, if any, on coal terminal
revenue refunding bonds, as well as certain other contingent liabilities which
are not considered material to the Company.

The following is a summary of the retained assets and liabilities, as of
December 31, 2000:

(In thousands)                                                 December 31, 2000
- --------------------------------------------------------------------------------
                                                                     
Assets:
Net working capital                                                     $ 42,383
Property, plant and equipment, net                                         8,843
Net deferred tax assets (Note 6)                                         231,621

Liabilities:
Inactive workers' compensation and
 black lung obligations (Note 1)                                          81,733
Retiree medical obligations (Note 12)                                    425,381
Reclamation liabilities - inactive properties                             27,992
Other liabilities (Note 18)                                               52,904
================================================================================

17. SUPPLEMENTAL CASH FLOW INFORMATION

For the years ended December 31, 2000, 1999 and 1998, cash payments for income
taxes, net of refunds received, were $28,188, $38,888 and $27,745, respectively.
The amounts reflect benefits of $0, $10,337 and $5,150, respectively, related to
the Company's discontinued coal operations.

For the years ended December 31, 2000, 1999 and 1998, cash payments for interest
were $44,830, $36,289 and $38,126, respectively. These amounts include $200, $44
and $47, respectively, related to the Company's discontinued operations.

Interest capitalized as of December 31, 2000, 1999 and 1998 amounted to $0,
$1,444 and $928, respectively.

During 2000, the Company recorded a noncash charge of $45,180 relating to a
restructuring at BAX Global (see Note 13).

During 1998, the Company recorded the following noncash investing and financing
activities in connection with the acquisition of substantially all of the
remaining shares of its Brink's affiliate in France: seller financing of the
equivalent of US $27,500 and the assumption of borrowings of approximately US
$19,000 and capital leases of approximately US $30,000.

                                       --
                                       54

18. COMMITMENTS AND CONTINGENCIES

The Company, through a wholly-owned indirect subsidiary, has a partnership
agreement, Dominion Terminal Associates ("DTA"), with three other coal companies
to operate coal port facilities in Newport News, Virginia, in the Port of
Hampton Roads (the "Facilities"). The Facilities, in which the Company's wholly
owned indirect subsidiary has a 32.5% interest, have an annual throughput
capacity of 22,000 tons, with a ground storage capacity of approximately 2,000
tons. The Facilities are financed by a series of coal terminal revenue refunding
bonds issued by the Peninsula Ports Authority of Virginia (the "Authority"), a
political subdivision of the Commonwealth of Virginia, in the aggregate
principal amount of $132,800, of which $43,160 are guaranteed by the Company.
These bonds bear a fixed interest rate of 7.375%. The Authority owns the
Facilities and leases them to DTA for the life of the bonds, which mature on
June 1, 2020. DTA may purchase the Facilities for one dollar at the end of the
lease term. The obligations of the partners are several, and not joint.

Under loan agreements with the Authority, DTA is obligated to make payments
sufficient to provide for the timely payment of the principal and interest on
the bonds. Under a throughput and handling agreement, the Company has agreed to
make payments to DTA that in the aggregate will provide DTA with sufficient
funds to make the payments due for the Company's pro rata share under the loan
agreements and to pay the Company's share of the operating costs of the
Facilities. The Company has also unconditionally guaranteed the payment of the
principal and premium, if any, and the interest on the bonds. Payments for
operating costs aggregated $2,546 in 2000, $2,534 in 1999 and $3,168 in 1998.
The Company has the right to use 32.5% of the throughput and storage capacity of
the Facilities subject to user rights of third parties which pay the Company a
fee. The Company pays throughput and storage charges based on actual usage at
per ton rates determined by DTA. Through December 31, 2000, the Company has
recorded accumulated losses for its equity investment which are equal to its
unconditional guarantee on a portion of the bonds. The Company plans to sell its
partnership in DTA as part of its disposition of Coal Operations (see Note 16).

19. SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)

Tabulated below are certain data for each quarter of 2000 and 1999.

                                             1st        2nd        3rd        4th
- ----------------------------------------------------------------------------------
                                                              
2000 Quarters:

Net sales and operating
 revenues                               $929,784    948,160    960,938    995,230
Operating profit (loss)                   32,299     18,198     29,942    (32,752)
Income (loss) from continuing
 operations before
 accounting change (a)                    14,439      4,755     10,771    (27,280)
Loss from discontinued
 operations (b)                           (4,483)    (6,400)    (3,342)  (193,151)
Cumulative effect of change
 in accounting principle (c)             (51,952)        --         --         --
- ----------------------------------------------------------------------------------
Net income (loss) (a), (b), (c)          (41,996)    (1,645)     7,429   (220,431)
- ----------------------------------------------------------------------------------
Net income (loss) per
 Pittston common share (a), (b), (c):
- ----------------------------------------------------------------------------------

Basic, continuing operations            $   0.29       0.09       0.24      (0.55)
Basic, discontinued
 operations, net of tax                    (0.09)     (0.13)     (0.06)     (3.83)
Basic, cumulative effect of
 change in accounting
 principle, net of tax                     (1.05)        --         --         --
- ----------------------------------------------------------------------------------
Basic, net                                 (0.85)     (0.04)      0.18      (4.38)

Diluted, continuing operations          $   0.29       0.09       0.21      (0.55)
Diluted, discontinued
 operations, net of tax                    (0.09)     (0.13)     (0.06)     (3.83)
Diluted, cumulative effect of
 change in accounting
 principle, net of tax                     (1.05)        --         --         --
- ----------------------------------------------------------------------------------
Diluted, net                               (0.85)     (0.04)      0.15      (4.38)
==================================================================================

(a) The fourth quarter of 2000 includes a restructuring charge of $57,487
($35,699 after-tax or $0.71 per diluted share) to record the writedown of assets
and accrual of costs associated with a restructuring plan at BAX Global (Note
13).

(b) The Company formalized its plan of disposal for its Coal Operations in the
fourth quarter of 2000 and has reclassified its financial statements to report
that business as a discontinued operation for all periods presented. The loss
from discontinued operations for the fourth quarter of 2000 included an
estimated after-tax loss of $189,141 ($3.75 per diluted share) on the disposal
of the business (Note 16).

(c) The first quarter of 2000 includes an after-tax charge of $51,952 ($1.05 per
diluted share) to record the cumulative effect on years prior to 2000 of
implementing SAB No. 101 and a related interpretation at BHS. As provided for in
the new guidance, the accounting change was implemented in the fourth quarter of
2000, retroactive to January 1. The 2000 quarterly results in this table have
been revised to reflect the new accounting method as if implemented at the
beginning of the year (Note 1).

                                       --
                                       55

                                                        1st            2nd          3rd            4th
- ------------------------------------------------------------------------------------------------------
                                                                                 
1999 Quarters:
Net sales and operating
 revenues                                         $ 851,376        886,671       944,691     1,026,960
Operating profit                                     33,821         39,872        52,120        70,760
Income from continuing
 operations                                          15,325         20,167        28,019        44,537
Loss from discontinued
 operations (e)                                      (2,665)        (4,245)       (3,995)      (62,486)
- ------------------------------------------------------------------------------------------------------
Net income (loss) (a), (b), (d)                      12,660         15,922        24,024       (17,949)
- ------------------------------------------------------------------------------------------------------
Net income (loss) per pro forma
 Pittston common share (a), (b), (c), (d), (e):
Basic, continuing
 operations                                       $    0.68           0.41          0.56          0.90
Basic, discontinued
 operations, net of tax                               (0.05)         (0.09)        (0.08)        (1.27)
- ------------------------------------------------------------------------------------------------------
Basic, net                                             0.63           0.32          0.48         (0.37)

Diluted, continuing
 operations                                            0.31           0.41          0.56          0.90
Diluted, discontinued
 operations, net of tax                               (0.05)         (0.09)        (0.08)        (1.27)
- ------------------------------------------------------------------------------------------------------
Diluted, net                                           0.26           0.32          0.48         (0.37)
- ------------------------------------------------------------------------------------------------------
Net income per Brink's Group common share:
- ------------------------------------------------------------------------------------------------------
Basic                                             $    0.43           0.50          0.56          0.66
Diluted                                                0.43           0.50          0.56          0.66
- ------------------------------------------------------------------------------------------------------
Net income per BAX Group
 common share (b):
- ------------------------------------------------------------------------------------------------------
Basic                                             $    0.02           0.16          0.45          1.09
Diluted                                                0.02           0.16          0.45          1.08
- ------------------------------------------------------------------------------------------------------
Net income (loss) per Minerals Group
 common share (a), (c), (d), (e):
Basic, continuing
 operations                                       $    1.92          (0.31)        (0.33)        (0.28)
Basic, discontinued
 operations, net of tax                               (0.31)         (0.48)        (0.44)        (6.79)
- ------------------------------------------------------------------------------------------------------
Basic, net                                             1.61          (0.79)        (0.77)        (7.07)
- ------------------------------------------------------------------------------------------------------
Diluted, continuing
 operations                                           (0.19)         (0.31)        (0.33)        (0.28)
Diluted, discontinued
 operations, net of tax                               (0.26)         (0.48)        (0.44)        (6.79)
- ------------------------------------------------------------------------------------------------------
Diluted, net                                          (0.45)         (0.79)        (0.77)        (7.07)
======================================================================================================

(a) The fourth quarter of 1999 includes additional expenses of $82,280 ($53,481
after-tax or $1.08 per diluted pro forma Pittston common share and $5.81 per
diluted Minerals share) related to the impairment and other charges associated
with the Company's decision to sell its Coal Operations.

(b) The fourth quarter of 1999 includes a gain on the sale of a restricted
investment of approximately $8,373 ($5,275 after-tax or $0.11 per diluted pro
forma Pittston share and $0.27 per diluted BAX share).

(c) The first quarter of 1999 includes $19,201, the excess of the carrying
amount of the Series C Convertible Preferred Stock over the cash paid to the
holders of such stock for repurchases made in the first quarter. See Note 10.

(d) The third quarter of 1999 includes the reversal of excess restructuring
liabilities of $851 ($553 after-tax or $0.01 per diluted pro forma Pittston
common share and $0.06 per diluted Minerals share). The fourth quarter of 1999
includes the reversal of excess restructuring liabilities of $616 ($400
after-tax or $0.01 per diluted pro forma Pittston common share and $0.04 per
diluted Minerals share).

(e) The Company formalized its plan of disposal for its Coal Operations in the
fourth quarter of 2000 and has reclassified its financial statements to report
that business as a discontinued operation for all periods presented.

Common Stock
- --------------------------------------------------------------------------------
                                                     Market Price      Declared
                                                   High        Low     Dividends
- --------------------------------------------------------------------------------
                                                              
2000
Pittston
1st Quarter (a)                                   $22.00      15.00    $    .025
2nd Quarter                                        17.13      13.44         .025
3rd Quarter                                        17.50      10.69         .025
4th Quarter                                        21.00      13.75         .025
- --------------------------------------------------------------------------------

1999
Brink's Group
1st Quarter                                       $31.81      22.63    $    .025
2nd Quarter                                        30.00      21.56         .025
3rd Quarter                                        28.69      21.94         .025
4th Quarter                                        23.19      18.13         .025

BAX Group
1st Quarter                                       $11.63      6.13     $     .06
2nd Quarter                                        11.38      6.94           .06
3rd Quarter                                        10.44      8.00           .06
4th Quarter                                        11.19      6.00           .06

Minerals Group (b)
1st Quarter                                       $ 2.25      1.13     $    .025
2nd Quarter                                         1.88      1.13            --
3rd Quarter                                         1.63      1.25            --
4th Quarter                                         1.75      1.02            --
================================================================================

(a) High and low market price represents the high and low of Pittston Stock
which began trading on January 14, 2000.

(b) Dividends on Minerals Stock were subject to the Available Minerals Dividend
Amount. Effective with the second quarter of 1999 and continuing through the
fourth quarter of 1999, the Company's Board of Directors declined to declare a
dividend on Minerals Stock. See Note 10.

Prior to January 14, 2000 and during 1999 and 1998, Pittston Brink's Group
Common Stock ("Brink's Stock"), Pittston BAX Group Common Stock ("BAX Stock")
and Pittston Minerals Group Common Stock ("Minerals Stock") traded on the New
York Stock Exchange under the ticker symbols "PZB", "PZX", and "PZM",
respectively.

                                       --
                                       56

On December 6, 1999, the Company announced that its Board of Directors approved
the elimination of the tracking stock capital structure by an exchange of all
outstanding shares of Minerals Stock and BAX Stock for shares of Brink's Stock
(the "Exchange"). The Exchange took place on January 14, 2000 (the "Exchange
Date"). On the Exchange Date, holders of Minerals Stock received 0.0817 shares
of Brink's Stock for each share of their Minerals Stock; and holders of BAX
Stock received 0.4848 shares of Brink's Stock for each share of their BAX Stock.
From and after the Exchange Date, Brink's Stock is the only outstanding class of
common stock of the Company and continues to trade on the New York Stock
Exchange under the symbol "PZB". Prior to the Exchange Date, the Brink's Stock
reflected the performance of the Brink's Group only; after the Exchange Date,
the Brink's Stock reflects the performance of The Pittston Company as a whole.
Shares of Brink's Stock after the Exchange are hereinafter referred to as
Pittston Common Stock.

As of March 1, 2001, there were approximately 5,329 shareholders of record of
Pittston Common Stock.

                                       --
                                       57

The Pittston Company and Subsidiaries
- --------------------------------------------------------------------------------
SELECTED FINANCIAL DATA
- --------------------------------------------------------------------------------

Five Years in Review

(In thousands, except per share amounts)                             2000         1999         1998        1997          1996
- -----------------------------------------------------------------------------------------------------------------------------
                                                                                                     
Revenues and Income (a):
Operating revenues and net sales                               $3,834,112    3,709,698    3,251,579   2,790,258     2,421,074
Income from continuing operations before
 cumulative effect of change in accounting principle (b)            2,685      108,048       61,173      99,120        88,452
Income (loss) from discontinued operations (j)                   (207,376)     (73,391)       4,883      11,078        15,702
Cumulative effect of change in accounting principle (b)           (51,952)          --           --          --            --
- -----------------------------------------------------------------------------------------------------------------------------
Net income (loss)                                                (256,643)      34,657       66,056     110,198       104,154
- -----------------------------------------------------------------------------------------------------------------------------
Financial Position (a), (i):
Net property, plant and equipment                              $  931,260      930,476      849,883     647,642       540,851
Total assets                                                    2,478,709    2,459,701    2,331,137   1,995,944     1,832,603
Long-term debt, less current maturities                           313,612      395,078      323,308     191,812       158,837
Shareholders' equity                                              475,823      749,641      736,028     685,618       606,707
- -----------------------------------------------------------------------------------------------------------------------------
Per Pittston Common Share (a), (c), (f), (g), (l):
Basic, net income:
 Continuing operations                                         $     0.07         2.55         1.18        1.98          1.80
 Discontinued operations                                            (4.14)       (1.49)        0.10        0.23          0.33
 Cumulative effect of change in accounting principle (b)            (1.04)          --           --          --            --
- -----------------------------------------------------------------------------------------------------------------------------
Total basic                                                         (5.11)        1.06         1.28        2.21          2.13
Diluted, net income:
 Continuing operations                                         $     0.05         2.19         1.17        1.94          1.78
 Discontinued operations                                            (4.13)       (1.49)        0.10        0.23          0.32
 Cumulative effect of change in accounting principle (b)            (1.04)          --           --          --            --
- -----------------------------------------------------------------------------------------------------------------------------
Total diluted                                                       (5.12)        0.70         1.27        2.17          2.10
Cash dividends                                                 $     0.10          N/A          N/A         N/A           N/A
Book value (a), (d)                                            $     9.22        14.86        13.98       13.01         11.44
=============================================================================================================================
Pro Forma Per Common Share (k):
Basic, net income:
 Continuing operations                                         $     0.07         2.46         1.04        1.76          1.59
 Discontinued operations                                            (4.14)       (1.49)        0.10        0.23          0.33
- -----------------------------------------------------------------------------------------------------------------------------
Total basic, pro forma                                              (4.07)        0.97         1.14        1.99          1.92
Diluted, net income:
 Continuing operations                                         $     0.05         2.09         1.03        1.73          1.57
 Discontinued operations                                            (4.13)       (1.49)        0.10        0.23          0.32
- -----------------------------------------------------------------------------------------------------------------------------
Total diluted, pro forma                                            (4.08)        0.60         1.13        1.96          1.89
- -----------------------------------------------------------------------------------------------------------------------------
Weighted Average Common Shares Outstanding (c), (f), (l):
Pittston basic (g)                                                 50,059       49,113       48,766      48,361        48,164
Pittston diluted (g)                                               50,146       49,327       49,250      49,145        48,873
Pittston Brink's Group basic                                          N/A       39,059       38,713      38,273        38,200
Pittston Brink's Group diluted                                        N/A       39,202       39,155      38,791        38,682
Pittston BAX Group basic                                              N/A       19,241       19,333      19,448        19,223
Pittston BAX Group diluted                                            N/A       19,265       19,333      19,993        19,681
Pittston Minerals Group basic                                         N/A        8,890        8,324       8,076         7,897
Pittston Minerals Group diluted                                       N/A        9,614        8,324       8,076         7,897
- -----------------------------------------------------------------------------------------------------------------------------
Common Shares Outstanding (c), (f), (l):
Pittston Common                                                    51,778          N/A          N/A         N/A           N/A
Pittston Brink's Group                                                N/A       40,861       40,961      41,130        41,296
Pittston BAX Group                                                    N/A       20,825       20,825      20,378        20,711
Pittston Minerals Group                                               N/A       10,086        9,186       8,406         8,406
- -----------------------------------------------------------------------------------------------------------------------------
Per Pittston Brink's Group Common Share (a), (c), (k), (l):
Basic net income (h)                                                  N/A   $     2.16         2.04        1.92          1.56
Diluted net income (h)                                                N/A         2.15         2.02        1.90          1.54
Pro forma basic (k)                                                   N/A         2.03         1.87        1.65          1.30
Pro forma diluted (k)                                                 N/A         2.03         1.85        1.63          1.28
Cash dividends                                                        N/A         0.10         0.10        0.10          0.10
Book value (d)                                                        N/A        13.66        11.87        9.91          8.21
- -----------------------------------------------------------------------------------------------------------------------------

                                       --
                                       58

The Pittston Company and Subsidiaries
- --------------------------------------------------------------------------------
SELECTED FINANCIAL DATA (CONTINUED)
- --------------------------------------------------------------------------------

Five Years in Review

(In thousands, except per share amounts)                             2000         1999         1998        1997          1996
- -----------------------------------------------------------------------------------------------------------------------------
                                                                                                         
Per Pittston BAX Group Common Share (a), (c), (l):
Basic net income (loss)                                               N/A   $     1.73        (0.68)       1.66          1.76
Diluted net income (loss)                                             N/A         1.72        (0.68)       1.62          1.72
Cash dividends                                                        N/A         0.24         0.24        0.24          0.24
Book value (d)                                                        N/A        17.38        15.83       16.59         15.70
- -----------------------------------------------------------------------------------------------------------------------------
Per Pittston Minerals Group Common Share (a), (c), (g), (l):
Basic net income (loss):
 Continuing operations                                                N/A   $     0.93        (1.01)      (1.28)        (0.85)
 Discontinued operations                                              N/A        (8.26)        0.59        1.37          1.99
- -----------------------------------------------------------------------------------------------------------------------------
Total basic                                                                      (7.33)       (0.42)       0.09          1.14
Diluted net income (loss):
 Continuing operations                                                N/A   $    (0.98)       (1.01)      (1.28)        (0.85)
 Discontinued operations                                              N/A        (7.63)        0.59        1.37          1.99
- -----------------------------------------------------------------------------------------------------------------------------
Total diluted                                                               $    (8.61)       (0.42)       0.09          1.14
Cash dividends (e)                                                    N/A   $    0.025         0.24        0.65          0.65
Book value (d)                                                        N/A   $   (15.06)       (9.50)      (8.94)        (8.38)
=============================================================================================================================

(a) See Management's Discussion and Analysis for a discussion of discontinued
operations, BHS' accounting change, BAX Global's restructuring charges and
additional expenses.

(b) The Company's results for 2000 include a non-cash after-tax charge of $52.0
million or $1.04 per diluted share to reflect the cumulative effect of a change
in accounting principle pursuant to guidance issued in Staff Accounting Bulletin
No. 101, "Revenue Recognition in Financial Statements", by the Securities and
Exchange Commission in December 1999 and a related interpretation issued in
October 2000. The change decreased revenue and operating profit for 2000 by $6.4
million and $2.3 million, respectively (Note 1).

(c) Shares outstanding at the end of the period include shares outstanding under
the Company's Employee Benefits Trust. For the Pittston Common stock, such
shares totaled 1,279 shares in 2000 and pro forma shares of 2,293, 3,040, 3,174
and 3,942 at December 31, 1999, 1998, 1997 and 1996, respectively. For the
Pittston Brink's Group (the "Brink's Group"), such shares totaled 1,573 shares,
2,076 shares, 2,734 shares and 3,141 shares at December 31, 1999, 1998, 1997 and
1996, respectively. For the Pittston BAX Group (the "BAX Group"), such shares
totaled 1,350 shares, 1,858 shares, 868 shares and 1,280 shares at December 31,
1999, 1998, 1997 and 1996, respectively. For the Pittston Minerals Group (the
"Minerals Group"), such shares totaled 813 shares, 766 shares, 232 shares and
424 shares at December 31, 1999, 1998, 1997 and 1996, respectively. Weighted
average shares outstanding do not include these shares.

(d) Calculated based on shareholders' equity, excluding amounts attributable to
preferred stock, and on the number of shares outstanding at the end of the
period excluding shares outstanding under the Company's Employee Benefits Trust.

(e) Cash dividends per share for 1999 reflect a per share dividend of $0.025
declared in the first quarter (based on an annual rate of $0.10 per share) and
no dividends declared in each of the following quarters.

(f) See Notes 1, 8 and 10 to the Consolidated Financial Statements for a
discussion of the calculation of pro forma share and earnings per share amounts
for years 1996 through 1999, which reflect the elimination of the Company's
tracking stock capital structure in January 2000.

(g) See Note 10 to the Consolidated Financial Statements for the 1999 impact of
the repurchase of the Company's Series C Cumulative Preferred Stock on Minerals
Group and Pittston pro forma share and net income (loss) per share calculations.

(h) In the first quarter of 1997, BHS prospectively adjusted its annual
depreciation rate from 10 years to 15 years for the capitalized cost of home
security systems. This change in estimate reduced depreciation expense in 1997
by $8,900.

(i) Includes discontinued operations (Note 16).

(j) The year ended December 31, 2000 includes an estimated loss on disposal of
$189,141 ($294,229 pretax). The year ended December 31, 1999 includes an
impairment charge of $53,482 ($82,280 pretax). See Note 16 to the Consolidated
Financial Statements.

(k) The pro forma net income per share amounts prior to 2000 have been adjusted
to show the effect of the new method of accounting for non-refundable
installation revenue and related direct subscriber acquisition costs at BHS. The
accounting change was made pursuant to Staff Accounting Bulletin No. 101, issued
by the Securities and Exchange Commission in December 1999, and a related
interpretation issued in October 2000 (Note 1). It was effective as of January
1, 2000.

(l) Prior to Prior to January 14, 2000, the Company was comprised of three
separate groups - Pittston Brink's Group, Pittston BAX Group, and Pittston
Minerals Group. The Pittston Brink's Group included the Brink's and BHS
operations of the Company. The Pittston BAX Group included the BAX Global
operations of the Company. The Pittston Minerals Group included the Pittston
Coal Company ("Pittston Coal") and Mineral Ventures operations of the Company.
Also, prior to January 14, 2000, the Company had three classes of common stock:
Pittston Brink's Group Common Stock ("Brink's Stock"), Pittston BAX Group Common
Stock ("BAX Stock") and Pittston Minerals Group Common Stock ("Minerals Stock"),
which were designed to provide shareholders with separate securities reflecting
the performance of the Brink's Group, the BAX Group and the Minerals Group,
respectively. On December 6, 1999, the Company announced that its Board of
Directors (the "Board") approved the elimination of the tracking stock capital
structure by an exchange of all outstanding shares of Minerals Stock and BAX
Stock for shares of Brink's Stock (the "Exchange"). The Exchange took place on
January 14, 2000 (the "Exchange Date").

                                       --
                                       59

                                [PITTSTON LOGO]
                      SUBSIDIARIES OF THE PITTSTON COMPANY
                             AS OF DECEMBER 31, 2000

          (Percentage of Voting Securities 100% unless otherwise noted)

                                                                                                Jurisdiction
Company                                                                                       of Incorporation
- -------                                                                                       ----------------
                                                                                           
The Pittston Company (Delaware)                                                                    Delaware
Glen Allen Development, Inc.                                                                       Delaware
Pittston Services Group, Inc.                                                                      Virginia
     Brink's Holding Company                                                                       Virginia
         Brink's Home Security, Inc.                                                               Delaware
              Brink's Guarding Services, Inc.                                                      Delaware
              Brink's Home Security Canada Limited                                                 Canada
         Brink's, Incorporated                                                                     Delaware
              Brellis Partners, L.P. (50% Partnership)                                             Virginia
              Brink's Antigua Limited (47%)                                                        Antigua
              Brink's Express Company                                                              Illinois
              Brink's (Liberia) Inc.                                                               Liberia
              Hermes Transportes Blindados, S.A. (4.96%)                                           Peru
              Brink's St. Lucia, Limited (26%)                                                     B.W.Indies
              Brink's Security International, Inc.                                                 Delaware
                  Brink's Brokerage Company, Inc.                                                  Delaware
                  Brink's C.l.S., Inc.                                                             Delaware
                  Brink's Diamond and Jewelry Services, Inc.                                       Delaware
                  Brink's Global Services, Inc.                                                    Delaware
                  Brink's International Management Group, Inc.                                     Delaware
                  Brink's Network, Incorporated                                                    Delaware
                  Brink's Vietnam, Inc.                                                            Delaware
                  Brink's Philippines, Inc.                                                        Delaware
                  Brink's Argentina S.A.(51%)                                                      Argentina
              Brink's Asia Pacific Pty Ltd.                                                        Australia
                  Brink's Australia Pty. Limited                                                   Australia
                  Brink's Diamond & Jewelry Services, N.V.                                         Belgium
                  Brink's Europe N.V.                                                              Belgium
                  Brink's-Ziegler S.A. (50%)                                                       Belgium
                  Cavalier Insurance Company, Ltd.                                                 Bermuda
                  Brink's Bolivia S.A.                                                             Bolivia
                  Transpar -- Brink's ATM Ltda.                                                    Brazil
                      Brink's Valores Agregados Ltda.                                              Brazil
                      Brinks Seguranca e Transporte de Valores Ltda.                               Brazil
                           TGV Participacoes Societarias Ltda.                                     Brazil
                           TGV Transportadora de Valores e Vigilancia Ltda.                        Brazil
                      BVA-Brink's Valores Agregados Ltda.                                          Brazil
                  Brink's Canada Limited                                                           Canada
                      Brink's Security Company, Limited                                            Canada
                      Brink's SFB Solutions, Ltd.                                                  Canada
                  Servicios Brink's S.A. (73.95%)                                                  Chile
                  Transporte de Valores Brink's Chile S.A. (73.95%)                                Chile
                  Brink's de Colombia, S.A. (58%)                                                  Colombia
                      Domesa de Colombia S.A. (69.99%)                                             Colombia

                                                                                                Jurisdiction
Company                                                                                       of Incorporation
- -------                                                                                       ----------------
                                                                                           
                      Procesos & Canje S.A. (49.99%)                                               Colombia
                  Brink's Global Services, Dubai                                                   Dubai
                  Brink's France. S.A.                                                             France
                  Brink's Beteiligungsgesellschaft mbH                                             Germany
                           Security Consulting and Services GmbH                                   Germany
                           Brink's Verwaltungsgesellschaft mbH                                     Germany
                      Brink's -- Deutscheland GMBH (BBmbH 99.99%, BVmbH .01%)                      Germany
                           Brink's Sicherheit GmbH                                                 Germany
                               Security Consulting & Services GmbH                                 Germany
                  Brink's Far East Limited (99.9% Bl.1%)                                           Hong Kong
                  Brink's-Hong Kong Limited (99.9% Bl.1%)                                          Hong Kong
                  Brink's Ayra India Private Limited (40%)                                         India
                  Brink's Allied Limited (50%)                                                     Ireland
                      Allied Couriers Limited                                                      Ireland
                      Brinks Ireland Limited                                                       Ireland
                  Brink's Israel, Ltd. (70%)                                                       Israel
                  Courier Services, Ltd. (99.9%)                                                   Israel
                  Brink's Diamond & Jewelery Services (International) (1993) Ltd.
                  (99.9% Bl.1%)                                                                    Israel
                  Brink's Global Services, S.r.l.(99.9% Bl.1%)                                     Italy
                  Brink's Japan Limited (81%)                                                      Japan
                  Brink's-Ziegler Luxemborg (50%)                                                  Luxemborg
                  Brink's Global Services, S.A. de C.V.                                            Mexico
                  Brink's Nederland B.V.                                                           Netherlands
                  Brink's Pakistan (Pvt) Limited (49%)                                             Pakistan
                  Brink's Panama, S.A. (49%)                                                       Panama
                  Immobiliaria Brink's Panama, S.A.                                                Panama
                  Centro Americana de Inversiones Balboa C.A.                                      Panama
                      Hermes Transportes Blindados S.A. (31.04%)                                   Peru
                  Brink's Puerto Rico, Inc.                                                        Puerto Rico
                  Brink's Singapore Pte. Ltd. (60%)                                                Singapore
                  Brink's (Southern Africa) (Proprietary) Ltd.                                     South Africa
                  Brink's Zurcher Freilager A.G. (51%)                                             Switzerland
                  Brink's Taiwan Limited                                                           Taiwan
                  Brink's (Thailand) Limited (40%)                                                 Thailand
                  Brink's Guvenlik Hezmetieri A.S.                                                 Turkey
                  Brink's Europe Ltd. (U.K.)                                                       U.K.
                  Brink's (UK) Ltd.                                                                U.K.
                      Brink's Commercial Services Ltd.                                             U.K.
                      Brink's Diamond & Jewellery Services Ltd.                                    U.K.
                      Brink's Limited                                                              U.K.
                           Brink's Gerlach, B.V. (60%)                                             Netherlands
                           Brink's (Gibraltar) Limited                                             Gibraltar
                           Brink's Limited (Bahrain) EC                                            Bahrain
                           Brink's Security Limited                                                U.K.
                           Quarrycast Commercial Limited                                           U.K.
                  Brink's Global Services, Ltd.                                                    U.K.
                  Servicio de Panamericano de Proteccion, CA (60.95%)                              Venezuela
                  Hellinic Brink's Commercial Societe Anonyme of Provision
                  of Services of Information Technology                                            Greece
                           S.A. of Provision of Services in Transportation d/b/a/
                           Brink's Hermes (50.05%)                                                 Greece
              Brink's SFB Solutions, Inc.                                                          Delaware
                  Security Services (Brink's Jordan) Company Ltd. (45%)                            Jordan

                                       2

                                                                                                Jurisdiction
Company                                                                                       of Incorporation
- -------                                                                                       ----------------
                                                                                           
                  Servicio Pan Americano de Proteccion, S.A. (20%)                                 Mexico
                      Canamex (51%                                                                 Mexico
                      Inmobiliaria, A.J. (99.9%)                                                   Mexico
                      Productos Pan Americanos de Proteccion (99.9%)                               Mexico
                      Servicio Salvadoreno de Proteccion (14%)                                     Mexico
                      VIGYA (99.9%)                                                                Mexico
                  Infiteq, LLC (9%)                                                                Delaware
         Pittston Finance Company Inc.                                                             Delaware
     BAX Holding Company                                                                           Virginia
         BAX Finance Inc.                                                                          Delaware
         BAX Global Inc.                                                                           Delaware
              BAXAIR Inc.                                                                          Delaware
                  Air Transport International, L.L.C. (BAX 99%, BAXAIR 1%)                         Arkansas
              BAX Global International Inc.                                                        Delaware
                  Burlington Air Express (Brazil) Inc.                                             Delaware
                  Burlington Air Express (Dubai) Inc.                                              Delaware
                  Burlington Air Express Services Inc.                                             Delaware
                  Burlington Network Inc.                                                          Delaware
                  BAX Global Holding Pty. Ltd.                                                     Australia
                      BAX Global Aust. Pty. Ltd.                                                   Australia
                      BAX Global Cartage Pty. Limited                                              Australia
                           AFCAB Pty. Limited (11%)                                                Australia
                  BAX Global do Brazil Ltda.                                                       Brazil
                  BAX Global (Canada) Ltd.                                                         Canada
                      797726 Ontario Inc.                                                          Canada
                  BAX Global Services Chile Limitada                                               Chile
                  Xiamen BAX Global Warehousng Co. Ltd.                                            China
                  BAX Global A/S                                                                   Denmark
                  BAX Global SARL (France)                                                         France
                      BAX Global S.A. (France)                                                     France
                  BAX Global GmbH                                                                  Germany
                  BAX Global Limited (Hong Kong)                                                   Hong Kong
                  Indian Enterprises Inc.                                                          Delaware
                      Indian Associates Inc. (40%)                                                 Delaware
                           BAX Global India Private Limited (65%, BAXI-35%)                        India
                  BAX Express Limited (Ireland)                                                    Ireland
                  Pittston International Finance Company, Ltd.                                     Ireland
                  BAX Global S.r.l.                                                                Italy
                      CSC Customs and Management Services S.r.l.                                   Italy
                  BAX Global Japan K.K.                                                            Japan
                  BAX Global (Korea) Co. Ltd. (51%)                                                South Korea
                  BAX Global (Malaysia) Sdn. Bhd.                                                  Malaysia
                      BAX Global Imports (Malaysia) Sdn. Bhd. (40%)                                Malaysia
                  BAX Global, S.A. de C.V.                                                         Mexico
                  BAX Global Networks B.V.                                                         Netherlands
                      BAX Global B.V.                                                              Netherlands
                           BAX Global N.V./S.A.(Belgium)                                           Belgium
                           BAX Global Pte Ltd.(Singapore)                                          Singapore
                      J. Cleton & Co. Holding B.V.                                                 Netherlands
                           J. Cleton & Co. B.V.                                                    Netherlands
                           Logicenter, B.V.                                                        Netherlands
                           Chip Electronic Services B.V. (50%)                                     Netherlands
                  BAX Global (N.Z.) Ltd.                                                           New Zealand
                  BAX Holdings, Inc. (18%)                                                         Philippines

                                       3

                                                                                                Jurisdiction
Company                                                                                       of Incorporation
- -------                                                                                       ----------------
                                                                                           
                      BAX Global (Philippines), Inc. (BHI-60/BAXI-40%)                             Philippines
                  Burlington-Transmaso Air Express Lda. (50%)                                      Portugal
                  BAX Global Transitarios Ltda.                                                    Portugal
                  Continental Freight (Pty) Ltd.                                                   South Africa
                      BAX Global Pty Ltd.                                                          South Africa
                      Traco Freight (Pty) Ltd.                                                     South Africa
                  BAX Global S.A.                                                                  Spain
                  BAX Global Holdings S.L.                                                         Spain
                      BAX Global Logistics (Shanghai) Co., Ltd.                                    Spain
                      BAX Global Logistics (Shenzhen) Co., Ltd.                                    Spain
                  BAX Global Aktiebolag                                                            Sweden
                  BAX Global AG                                                                    Switzerland
                  BAX Global (Taiwan) Ltd.                                                         Taiwan
                  BAX Global Limited                                                               Thailand
                  BAX Global (UK) Limited                                                          U.K.
                      Alltransport Holdings Limited                                                U.K.
                           Alltransport International Group Limited                                U.K.
                           Alltransport Warehousing Limited                                        U.K.
                           BAX Global Limited                                                      U.K.
                           Pittston Administrative Services, Limited                               U.K.
                           BAX Global Ocean Services Limited                                       U.K.
                      WTC Air Freight (U.K.) Limited                                               U.K.
                      BAX Logistics, Ltd.                                                          U.K.
         BAX Funding Corporation                                                                   Delaware
         Burlington Airline Express Inc.                                                           Delaware
         Burlington Land Trading Inc.                                                              Delaware
         Highway Merchandise Express, Inc.                                                         California
         WTC Airlines, Inc.                                                                        Delaware
         WTC SUB                                                                                   California
     Pittston Administrative Services Inc.                                                         Delaware
Pittston Minerals Group Inc.                                                                       Virginia
     Pittston Coal Company                                                                         Delaware
         American Eagle Coal Company                                                               Virginia
         Heartland Coal Company                                                                    Delaware
         Maxxim Rebuild Company, Inc.                                                              Delaware
         Mountain Forest Products, Inc.                                                            Virginia
         Pine Mountain Oil and Gas, Inc.                                                           Virginia
         Addington, Inc.                                                                           Kentucky
              Huff Creek Energy Company                                                            West Virginia
         Appalachian Land Company                                                                  West Virginia
         Appalachian Mining, Inc.                                                                  West Virginia
              Molloy Mining, Inc.                                                                  West Virginia
         Kanawha Development Corporation                                                           West Virginia
         Vandalia Resources, Inc.                                                                  West Virginia
         Pittston Coal Management Company                                                          Virginia
         Pittston Coal Sales Corp.                                                                 Virginia
         Pittston Coal Terminal Corporation                                                        Virginia
         Pyxis Resources Company                                                                   Virginia
              HICA Corporation                                                                     Kentucky
              Holston Mining, Inc.                                                                 West Virginia
              Motivation Coal Company                                                              Virginia
              Paramont Coal Corporation                                                            Delaware
         Sheridan-Wyoming Coal Company, Incorporated                                               Delaware
         Thames Development, Ltd.                                                                  Virginia

                                       4

                                                                                                Jurisdiction
Company                                                                                       of Incorporation
- -------                                                                                       ----------------
                                                                                           
              Buffalo Mining Company                                                               West Virginia
              Clinchfield Coal Company                                                             Virginia
              Dante Coal Company                                                                   Virginia
              Eastern Coal Corporation                                                             West Virginia
              Elkay Mining Company                                                                 West Virginia
              Jewell Ridge Coal Corporation                                                        Virginia
              Kentland-Elkhorn Coal Corporation                                                    Kentucky
              Little Buck Coal Company                                                             Virginia
              Lorado Reclamation Company                                                           Virginia
              Meadow River Coal Company                                                            Kentucky
              Pittston Coal Group, Inc.                                                            Virginia
              Ranger Fuel Corporation                                                              West Virginia
              Sea "B" Mining Company                                                               Virginia
              Pittston Synfuel Company                                                             Virginia
         Pittston Mineral Ventures Company                                                         Delaware
              PMV Gold Company                                                                     Delaware
                  Pittston Nevada Gold Company (50%)
                  [50% by MPI Gold (USA) Ltd.]                                                     Delaware
                  MPI Gold (USA) Ltd. (45.016%)                                                    Nevada
              Pittston Mineral Ventures International Ltd.                                         Delaware
              Pittston Mineral Ventures of Australia Pty Ltd.                                      Australia
                  Carbon Ventures Pty. Limited                                                     Australia
                      International Carbon (Aust.) Pty. Limited                                    Australia
                  Mining Project Investors Pty. Ltd. (40.13%)                                      Australia
                      Fodina Minerals Pty. Limited                                                 Australia
                      MPI Gold Pty. Limited                                                        Australia
                           Stawell Gold Mines Pty. Limited                                         Australia
                      MPI Gold (USA), Inc.                                                         Delaware
                      Australian Mining Investment Fund, Ltd.                                      Australia
                      Kumura Pty. Ltd.                                                             Australia
                      Spinfex Pty. Ltd.                                                            Australia
                  Pittston Australasian Mineral Exploration Pty Limited                            Australia
                  Pittston Black Sands of Western Australia Pty Limited                            Australia

                                       5

Consent of Independent Auditors

The Board of Directors
The Pittston Company:

We consent to incorporation by reference in the registration statements
(Nos. 2-64258, 33-2039, 33-21393, 33-23333, 33-69040, 33-53565, 333-02219,
333-78631 and 333-78633) on Form S-8 of The Pittston Company of our report
dated February 1, 2001 relating to the consolidated financial statements listed
in the accompanying Index to Financial Statements and Schedules in Item 14(a)1
included in the 2000 Annual Report on Form 10-K of The Pittston Company, which
report appears in the 2000 Annual Report on Form 10-K of The Pittston Company.

Our report refers to a change in the method of accounting for nonrefundable
installation revenues and the related direct costs of acquiring new subscribers
in 2000 as a result of the implementation of Staff Accounting Bulletin No. 101,
"Revenue Recognition in Financial Statements."

Our report also refers to a change in the method of accounting for derivative
instruments and hedging activities in 1998 as a result of adopting Statement of
Financial Accounting Standards No. 133, "Accounting for Derivative Instruments
and Hedging Activities."

Richmond, Virginia
March 28, 2001

                                                                      Exhibit 24

                                POWER OF ATTORNEY

         KNOW ALL MEN BY THESE PRESENTS that the undersigned does hereby
constitute and appoint Michael T. Dan, Austin F. Reed and Robert T. Ritter, and
each of them (with full power of substitution), his true and lawful
attorney-in-fact and agent to do any and all acts and things and to execute any
and all instruments which, with the advice of counsel, any of said attorneys and
agents may deem necessary or advisable to enable The Pittston Company, a
Virginia corporation (the "Company"), to comply with the Securities Act of 1933,
as amended, and the Securities Exchange Act of 1934, as amended, and any rules,
regulations and requirements of the Securities and Exchange Commission in
respect thereof, in connection with the preparation and filing of the Company's
annual report on Form 10-K for the fiscal year ended December 31, 2000 (the
"Form 10-K"), including specifically, but without limitation, power and
authority to sign his name as an officer and/or director of the Company, as the
case may be, to the Form 10-K or any amendments thereto; and the undersigned
does hereby ratify and confirm all that said attorneys shall do or cause to be
done by virtue hereof.

         IN WITNESS WHEREOF, I have hereunto set my hand this 9th day of March,
2001.

                                               /s/ Roger G. Ackerman
                                       ........................................
                                                 Roger G. Ackerman

                                POWER OF ATTORNEY

         KNOW ALL MEN BY THESE PRESENTS that the undersigned does hereby
constitute and appoint Michael T. Dan, Austin F. Reed and Robert T. Ritter, and
each of them (with full power of substitution), his true and lawful
attorney-in-fact and agent to do any and all acts and things and to execute any
and all instruments which, with the advice of counsel, any of said attorneys and
agents may deem necessary or advisable to enable The Pittston Company, a
Virginia corporation (the "Company"), to comply with the Securities Act of 1933,
as amended, and the Securities Exchange Act of 1934, as amended, and any rules,
regulations and requirements of the Securities and Exchange Commission in
respect thereof, in connection with the preparation and filing of the Company's
annual report on Form 10-K for the fiscal year ended December 31, 2000 (the
"Form 10-K"), including specifically, but without limitation, power and
authority to sign his name as an officer and/or director of the Company, as the
case may be, to the Form 10-K or any amendments thereto; and the undersigned
does hereby ratify and confirm all that said attorneys shall do or cause to be
done by virtue hereof.

         IN WITNESS WHEREOF, I have hereunto set my hand this 8th day of March,
2001.

                                               /s/ Betty C. Alewine
                                       ........................................
                                                  Betty C. Alewine

                                POWER OF ATTORNEY

         KNOW ALL MEN BY THESE PRESENTS that the undersigned does hereby
constitute and appoint Michael T. Dan, Austin F. Reed and Robert T. Ritter, and
each of them (with full power of substitution), his true and lawful
attorney-in-fact and agent to do any and all acts and things and to execute any
and all instruments which, with the advice of counsel, any of said attorneys and
agents may deem necessary or advisable to enable The Pittston Company, a
Virginia corporation (the "Company"), to comply with the Securities Act of 1933,
as amended, and the Securities Exchange Act of 1934, as amended, and any rules,
regulations and requirements of the Securities and Exchange Commission in
respect thereof, in connection with the preparation and filing of the Company's
annual report on Form 10-K for the fiscal year ended December 31, 2000 (the
"Form 10-K"), including specifically, but without limitation, power and
authority to sign his name as an officer and/or director of the Company, as the
case may be, to the Form 10-K or any amendments thereto; and the undersigned
does hereby ratify and confirm all that said attorneys shall do or cause to be
done by virtue hereof.

         IN WITNESS WHEREOF, I have hereunto set my hand this 9th day of March,
2001.

                                                /s/ James R. Barker
                                       ........................................
                                                  James R. Barker

                                POWER OF ATTORNEY

         KNOW ALL MEN BY THESE PRESENTS that the undersigned does hereby
constitute and appoint Michael T. Dan, Austin F. Reed and Robert T. Ritter, and
each of them (with full power of substitution), his true and lawful
attorney-in-fact and agent to do any and all acts and things and to execute any
and all instruments which, with the advice of counsel, any of said attorneys and
agents may deem necessary or advisable to enable The Pittston Company, a
Virginia corporation (the "Company"), to comply with the Securities Act of 1933,
as amended, and the Securities Exchange Act of 1934, as amended, and any rules,
regulations and requirements of the Securities and Exchange Commission in
respect thereof, in connection with the preparation and filing of the Company's
annual report on Form 10-K for the fiscal year ended December 31, 2000 (the
"Form 10-K"), including specifically, but without limitation, power and
authority to sign his name as an officer and/or director of the Company, as the
case may be, to the Form 10-K or any amendments thereto; and the undersigned
does hereby ratify and confirm all that said attorneys shall do or cause to be
done by virtue hereof.

         IN WITNESS WHEREOF, I have hereunto set my hand this 9th day of March,
2001.

                                                 /s/ Marc C. Breslawsky
                                       ........................................
                                                   Marc C. Breslawsky

                                POWER OF ATTORNEY

         KNOW ALL MEN BY THESE PRESENTS that the undersigned does hereby
constitute and appoint Michael T. Dan, Austin F. Reed and Robert T. Ritter, and
each of them (with full power of substitution), his true and lawful
attorney-in-fact and agent to do any and all acts and things and to execute any
and all instruments which, with the advice of counsel, any of said attorneys and
agents may deem necessary or advisable to enable The Pittston Company, a
Virginia corporation (the "Company"), to comply with the Securities Act of 1933,
as amended, and the Securities Exchange Act of 1934, as amended, and any rules,
regulations and requirements of the Securities and Exchange Commission in
respect thereof, in connection with the preparation and filing of the Company's
annual report on Form 10-K for the fiscal year ended December 31, 2000 (the
"Form 10-K"), including specifically, but without limitation, power and
authority to sign his name as an officer and/or director of the Company, as the
case may be, to the Form 10-K or any amendments thereto; and the undersigned
does hereby ratify and confirm all that said attorneys shall do or cause to be
done by virtue hereof.

         IN WITNESS WHEREOF, I have hereunto set my hand this 9th day of March,
2001.

                                                /s/ James L. Broadhead
                                       ........................................
                                                  James L. Broadhead

                                POWER OF ATTORNEY

         KNOW ALL MEN BY THESE PRESENTS that the undersigned does hereby
constitute and appoint Michael T. Dan, Austin F. Reed and Robert T. Ritter, and
each of them (with full power of substitution), his true and lawful
attorney-in-fact and agent to do any and all acts and things and to execute any
and all instruments which, with the advice of counsel, any of said attorneys and
agents may deem necessary or advisable to enable The Pittston Company, a
Virginia corporation (the "Company"), to comply with the Securities Act of 1933,
as amended, and the Securities Exchange Act of 1934, as amended, and any rules,
regulations and requirements of the Securities and Exchange Commission in
respect thereof, in connection with the preparation and filing of the Company's
annual report on Form 10-K for the fiscal year ended December 31, 2000 (the
"Form 10-K"), including specifically, but without limitation, power and
authority to sign his name as an officer and/or director of the Company, as the
case may be, to the Form 10-K or any amendments thereto; and the undersigned
does hereby ratify and confirm all that said attorneys shall do or cause to be
done by virtue hereof.

         IN WITNESS WHEREOF, I have hereunto set my hand this 9th day of March,
2001.

                                                /s/ William F. Craig
                                       ........................................
                                                   William F. Craig

                                POWER OF ATTORNEY

         KNOW ALL MEN BY THESE PRESENTS that the undersigned does hereby
constitute and appoint Michael T. Dan, Austin F. Reed and Robert T. Ritter, and
each of them (with full power of substitution), his true and lawful
attorney-in-fact and agent to do any and all acts and things and to execute any
and all instruments which, with the advice of counsel, any of said attorneys and
agents may deem necessary or advisable to enable The Pittston Company, a
Virginia corporation (the "Company"), to comply with the Securities Act of 1933,
as amended, and the Securities Exchange Act of 1934, as amended, and any rules,
regulations and requirements of the Securities and Exchange Commission in
respect thereof, in connection with the preparation and filing of the Company's
annual report on Form 10-K for the fiscal year ended December 31, 2000 (the
"Form 10-K"), including specifically, but without limitation, power and
authority to sign his name as an officer and/or director of the Company, as the
case may be, to the Form 10-K or any amendments thereto; and the undersigned
does hereby ratify and confirm all that said attorneys shall do or cause to be
done by virtue hereof.

         IN WITNESS WHEREOF, I have hereunto set my hand this 9th day of March,
2001.

                                                /s/ Gerald Grinstein
                                       ........................................
                                                   Gerald Grinstein

                                POWER OF ATTORNEY

         KNOW ALL MEN BY THESE PRESENTS that the undersigned does hereby
constitute and appoint Michael T. Dan, Austin F. Reed and Robert T. Ritter, and
each of them (with full power of substitution), his true and lawful
attorney-in-fact and agent to do any and all acts and things and to execute any
and all instruments which, with the advice of counsel, any of said attorneys and
agents may deem necessary or advisable to enable The Pittston Company, a
Virginia corporation (the "Company"), to comply with the Securities Act of 1933,
as amended, and the Securities Exchange Act of 1934, as amended, and any rules,
regulations and requirements of the Securities and Exchange Commission in
respect thereof, in connection with the preparation and filing of the Company's
annual report on Form 10-K for the fiscal year ended December 31, 2000 (the
"Form 10-K"), including specifically, but without limitation, power and
authority to sign his name as an officer and/or director of the Company, as the
case may be, to the Form 10-K or any amendments thereto; and the undersigned
does hereby ratify and confirm all that said attorneys shall do or cause to be
done by virtue hereof.

         IN WITNESS WHEREOF, I have hereunto set my hand this 9th day of March,
2001.

                                                 /s/ Ronald M. Gross
                                       ........................................
                                                   Ronald M. Gross

                                POWER OF ATTORNEY

         KNOW ALL MEN BY THESE PRESENTS that the undersigned does hereby
constitute and appoint Michael T. Dan, Austin F. Reed and Robert T. Ritter, and
each of them (with full power of substitution), his true and lawful
attorney-in-fact and agent to do any and all acts and things and to execute any
and all instruments which, with the advice of counsel, any of said attorneys and
agents may deem necessary or advisable to enable The Pittston Company, a
Virginia corporation (the "Company"), to comply with the Securities Act of 1933,
as amended, and the Securities Exchange Act of 1934, as amended, and any rules,
regulations and requirements of the Securities and Exchange Commission in
respect thereof, in connection with the preparation and filing of the Company's
annual report on Form 10-K for the fiscal year ended December 31, 2000 (the
"Form 10-K"), including specifically, but without limitation, power and
authority to sign his name as an officer and/or director of the Company, as the
case may be, to the Form 10-K or any amendments thereto; and the undersigned
does hereby ratify and confirm all that said attorneys shall do or cause to be
done by virtue hereof.

         IN WITNESS WHEREOF, I have hereunto set my hand this 9th day of March,
2001.

                                                 /s/ Carl S. Sloane
                                       ........................................
                                                    Carl S. Sloane