INDEMNIFICATION AGREEMENT

EXHIBIT 2.4

THIS AGREEMENT CONTAINS REPRESENTATIONS AND WARRANTIES THE PARTIES HERETO MADE TO AND SOLELY FOR THE BENEFIT OF EACH OTHER. THE ASSERTIONS EMBODIED IN THOSE REPRESENTATIONS AND WARRANTIES ARE QUALIFIED BY INFORMATION IN CONFIDENTIAL DISCLOSURE SCHEDULES THAT THE PARTIES HAVE EXCHANGED IN CONNECTION WITH SIGNING THE AGREEMENT. WHILE THE REGISTRANT BELIEVES THAT THE SECURITIES LAWS DO NOT REQUIRE THE INFORMATION CONTAINED IN THE DISCLOSURE SCHEDULES TO BE PUBLICLY DISCLOSED, THE DISCLOSURE SCHEDULES DO CONTAIN INFORMATION THAT MODIFIES, QUALIFIES AND CREATES EXCEPTIONS TO THE REPRESENTATIONS AND WARRANTIES SET FORTH IN THIS AGREEMENT. ACCORDINGLY, INVESTORS AND SECURITY HOLDERS SHOULD NOT RELY ON THE REPRESENTATIONS AND WARRANTIES AS CHARACTERIZATIONS OF THE ACTUAL STATE OF FACTS. MOREOVER, INFORMATION CONCERNING THE SUBJECT MATTER OF THE REPRESENTATIONS AND WARRANTIES MAY CHANGE AFTER THE DATE OF THE AGREEMENT, WHICH SUBSEQUENT INFORMATION MAY OR MAY NOT BE FULLY REFLECTED IN THE REGISTRANT’S PUBLIC DISCLOSURES.

EXCEPT FOR THE ESCROW AGREEMENT ATTACHED AS EXHIBIT A, THE ATTACHMENTS TO THIS EXHIBIT LISTED IN THE TABLE OF CONTENTS HEREOF ARE NOT FILED HEREWITH, AS PROVIDED IN ITEM 601(b)(2) OF REGULATION S-K PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THE REGISTRANT AGREES TO FURNISH SUPPLEMENTALLY A COPY OF ANY SUCH OMITTED ATTACHMENT TO THE SECURITIES AND EXCHANGE COMMISSION UPON REQUEST.

Execution Copy

INDEMNIFICATION AGREEMENT

among

ALPHA NATURAL RESOURCES, LLC,

ALPHA NATURAL RESOURCES, INC.,

PREMIUM ENERGY, LLC,

MATE CREEK ENERGY OF W. VA., INC. AND VIRGINIA ENERGY COMPANY,

THE UNITHOLDERS OF POWERS SHOP, LLC,

CERTAIN OF THE UNITHOLDERS OF BUCHANAN ENERGY COMPANY, LLC

and

THE SHAREHOLDERS OF WHITE FLAME ENERGY, INC.,
PREMIUM ENERGY, INC.,
TWIN STAR MINING, INC. AND NICEWONDER CONTRACTING, INC.

Dated as of
September 23, 2005

Table of Contents

i 

EXHIBITS, ANNEXES AND SCHEDULES

Exhibit A            Escrow Agreement

ii 

INDEMNIFICATION AGREEMENT

          THIS INDEMNIFICATION AGREEMENT (this “Agreement”) is made as of September 23, 2005, between (i) Alpha Natural Resources, LLC, a Delaware limited liability company, Alpha Natural Resources, Inc., a Delaware corporation, and Premium Energy, LLC, a Delaware limited liability company, (together, the “Alpha Parties”) , and (ii) Mate Creek Energy of W. Va., Inc., a West Virginia corporation (“Mate Creek”), and Virginia Energy Company, a Virginia corporation (“Virginia Energy”), the unitholders of Powers Shop, LLC, a Virginia limited liability company (“Powers Shop”), certain of the unitholders (the “Majority Buchanan Unitholders”) of Buchanan Energy Company, LLC, a Virginia limited liability company, listed on the signature page of this Agreement and the shareholders of each of Premium Energy, Inc., a West Virginia corporation (“Premium Energy”), Twin Star Mining, Inc., a West Virginia corporation (“Twin Star”), Nicewonder Contracting, Inc., a West Virginia corporation, (“Nicewonder Contracting”) and White Flame Energy, Inc., a West Virginia Corporation (“White Flame”). Collectively, Mate Creek, Virginia Energy, the unit holders of Powers Shop, the Majority Buchanan Unitholders, the shareholders of Premium Energy, Twin Star, Nicewonder Contracting and White Flame shall be referred to in this Agreement as the “Nicewonder Parties.” Collectively, the Alpha Parties and the Nicewonder Parties shall be referred to in this Agreement as the “Parties.” Capitalized terms not otherwise defined in this Agreement have the meaning given such terms in Article I.

RECITALS

           WHEREAS , various of the Alpha Parties and various of the Nicewonder Parties are entering into (a) that certain Acquisition Agreement dated as of September 23, 2005 (the “Nicewonder Acquisition Agreement”), (b) that certain Agreement and Plan of Merger dated as of September 23, 2005 (the “PE Merger Agreement”) and (c) that certain Membership Unit Purchase Agreement dated as of September 23, 2005 (the “BE Purchase Agreement”) and together with the Nicewonder Acquisition Agreement and the PE Merger Agreement, collectively, the “Acquisition Agreements”) pursuant to which the Alpha Parties will acquire from the Nicewonder Parties (i) the mining, processing, transportation and sale of coal produced by them in the State of West Virginia and the Commonwealths of Kentucky and Virginia, (ii) the domestic trading of coal, including the purchase and resale of coal produced by others and (iii) activities related to the foregoing conducted by the Nicewonder Parties (collectively, the “Business”);

           WHEREAS, the Alpha Parties and the Nicewonder Parties desire to provide for the terms upon which they will indemnify each other with respect to certain matters relating to the transactions contemplated by the Acquisition Agreements;

           NOW, THEREFORE, the Parties agree as follows:

ARTICLE I
DEFINITIONS

          Unless otherwise expressly provided in this Agreement, the following terms, as used in this Agreement, have the following meanings:

          “Adverse Consequences” means all actions, suits, proceedings, hearings, investigations, charges, complaints, claims, demands, Decrees, damages, dues, penalties, fines, costs, amounts paid in settlement, Liabilities, obligations, Taxes, liens, losses, expenses, and fees, including court costs and reasonable attorneys’ fees and expenses but shall not include punitive, exemplary or consequential damages (except to the extent any such damages are included in a third party claim for which an Alpha Indemnitee is entitled to indemnification under this Agreement).

          “Affiliate” means, with respect to any Person, any other Person directly or indirectly controlling, controlled by or under common control with such Person and, in the case of an individual, includes the individual’s immediate family, and the trustees of a trust the beneficiaries of which include any one or more of the foregoing.

          “Alleghany Land Sublease” means that certain Lease dated July 15, 1970 from Island Creek Coal Company to Pine Rock Coals, Inc. subsequently partially assigned to White Flame Energy.

          “Alpha Indemnitees” means, collectively, the Alpha Parties and their respective Affiliates and the officers, directors, and employees of the Alpha Parties and the respective Affiliates.

          “Alpha Parties” has the meaning set forth in the preamble.

          “Alpha Shares” has the meaning set forth in the Recitals to the PE Merger Agreement.

          “Assumed Liabilities” means all of the “Assumed Liabilities” as defined in Article I of each of the Nicewonder Acquisition Agreement.

          “Basket” has the meaning set forth in Section 5.2(c).

          “Business” has the meaning set forth in the recitals.

          “Business Day” means any day other than a Saturday, a Sunday or a United States federal or New York State banking holiday.

          “Cap” has the meaning set forth in Section 5.2(c).

          “Claim for Indemnification” means a written notice by any of the Alpha Parties or the Nicewonder Parties to the other asserting a claim under Article V delivered in accordance with the Escrow Agreement or Section 6.8, as the case may be; provided, however , that such notice shall be sufficient if it provides a general description of the Adverse Consequences that the Indemnified Party

may suffer, with an estimate of the extent of the dollar amount of Adverse Consequences, but only if such information can reasonably be determined at the time notice is given.

          “Closing” means each “Closing” as defined in Section 2.7 of the Nicewonder Acquisition Agreement and the BE Purchase Agreement and Section 2.1(b) of the PE Merger Agreement.

          “Closing Date” means the date of the Closing.

          “Closing Price” shall mean the Weighted Average Daily Trading Price of Alpha Shares on the principal exchange or automated quotation system on which Alpha Shares are listed during the 20 days on which Alpha Shares are traded prior to the date of the determination in question.

          “Code” means the Internal Revenue Code of 1986, as amended.

          “Crown Property” has the meaning set forth in Article I of the Nicewonder Acquisition Agreement.

          “Decree” means any injunction, judgment, order, decree, charge or ruling of any applicable Governmental Authority.

          “Dispute” has the meaning set forth in Section 6.17.

          “Entity” means a partnership, a corporation, an association, a joint stock company, a trust, a joint venture, an unincorporated organization, or a Governmental Authority.

          “Environmental or Response Action” has the meaning set forth in Article I of the Nicewonder Acquisition Agreement.

          “Escrow Agent” means JP Morgan Chase Bank, N.A., as escrow agent pursuant to the Escrow Agreement.

          “Escrow Agreement” means the Escrow Agreement, in the form of Exhibit A to this Agreement, to be entered into by the Nicewonder Parties, the Alpha Parties and Escrow Agent at the Closing.

          “Escrow Amount” means that number of Alpha Shares rounded to the nearest whole share equal to the quotient obtained by dividing (x) $50,000,000 by (y) the Closing Price as of the Closing Date.

          “Final Allocation” means each “Final Allocation” as defined in Section 10.13 of the Nicewonder Acquisition Agreement and the BE Purchase Agreement.

          “Final Determination” has the meaning set forth in Section 5.9.

          “Governmental Authority” means any agency, authority, board, bureau, commission, court, tribunal, department, office or instrumentality of any nature whatsoever or any governmental unit, whether federal, state, county, district, city, other political subdivision, or taxing district, foreign or otherwise, and whether now or hereafter in existence, or any officer or official thereof acting in an official capacity.

          “Indemnified Party” has the meaning set forth in Section 5.4.

          “Indemnifying Party” has the meaning set forth in Section 5.4.

          “Law” means any constitution, statute, code, ordinance, rule or regulation of any applicable Governmental Authority.

          “Liability” means any liability (whether known or unknown, whether asserted or unasserted, whether absolute or contingent, whether accrued or unaccrued, whether liquidated or unliquidated, and whether due or to become due), including any liability for Taxes.

          “Merger” had the meaning set forth in Section 2.1(a) of the PE Merger Agreement.

          “Merger Consideration” has the meaning set forth in Section 2.2(b) of the PE Merger Agreement.

          “Nicewonder Indemnitees” means, collectively, the Nicewonder Parties and their respective Affiliates (which, after the Closing, shall exclude Buchanan Energy Company, LLC, Premium Energy, LLC, Power Shop, Premium Energy, Twin Star, White Flame, and Nicewonder Contracting), and the officers, directors, employees, of the Nicewonder Parties and their respective Affiliates.

          “Nicewonder Parties” has the meaning set forth in the preamble.

          “Organizational Documents” means the articles of incorporation, certificate of incorporation, charter, bylaws, articles or certificate of formation, regulations, operating agreement, certificate of limited partnership, partnership agreement, and all other similar documents, instruments or certificates executed, adopted, or filed in connection with the creation, formation, or organization of a Person, including any amendments thereto.

          “Person” means an individual or an Entity.

          “Proceeding” means any action, litigation, suit, claim, dispute, demand, investigation, review, hearing, charge, complaint or other judicial or administrative proceeding, at law or in equity, before or by any Governmental Authority or arbitration or other dispute resolution proceeding.

          “Retained Assets” means each and all of the “Retained Assets” as defined in Article I of each of the Acquisition Agreements.

          “Retained Debt” means each and all of the “Retained Debt” as defined in Article I of each of the Acquisition Agreements.

          “Retained Liabilities” means each and all of the “Retained Liabilities” as defined in Article I of each of the Acquisition Agreements.

          “Sellers Representative” means David Lester.

          “Share Consideration” has the meaning set forth in Section 2.2(b) of the PE Merger Agreement.

          “Straddle Period” means a Tax period or year commencing before and ending after the Closing Date.

          “Straddle Return” means a Tax Return for a Straddle Period.

          “Tax” or “Taxes” means any federal, state, local, or foreign income, gross receipts, license, payroll, employment, excise, severance, stamp, premium, windfall profits, environmental (including taxes under Code §59A), customs duties, capital stock, franchise, profits, withholding, social security (or similar), unemployment, real property, personal property, sales, use, transfer, registration, value added, alternative or add-on minimum, estimated, or other tax of any kind whatsoever, including any interest, penalty, or addition thereto, whether disputed or not.

          “Tax Return” means any return, declaration, report, claim for refund, or information return or statement relating to Taxes, including any required tax shelter disclosures and reporting, any schedule or attachment thereto, and any amendment thereof.

          “Third Party Claim” means any Proceeding by or before any Governmental Authority or any arbitration or other alternative dispute resolution proceeding made or brought by any Person who is not a Party or an Affiliate of a Party.

          “Weighted Average Daily Trading Price” for a stated number of trading days shall mean the product of (x) the average of the high and low sales prices for each of such days times (y) the number of shares traded on each such day, all as would be reported in the official compilation of trading information on the principal exchange or automated quotation system on which Alpha Shares are listed, divided by (z) the total number of shares traded during all such days, as reported in the official compilation of trading information on the principal exchange or automated quotation system on which Alpha Shares are listed.

          “White Flame IP” means the Department of the Army Permit under the provisions of Section 404 of the Clean Water Act in Public Notice No. 200001274-2 related to Surface Mine No. 10 and associated Amendment No. 1.

ARTICLE II
ESCROW DESPOSIT

     2.1 Deposit . Upon the terms and subject to the conditions of this Agreement, the Nicewonder Parties agree that, pursuant to Section 2.3(a)(v) of the PE Merger Agreement, at the direction of the Nicewonder Parties, Alpha Natural Resources, Inc. shall deposit the Escrow Amount, when issued, into escrow at the Closing to be held by the Escrow Agent on the terms and subject to the conditions of the Escrow Agreement. Each of the Nicewonder Parties who are “Shareholders” as defined in the PE Merger Agreement waive any right to or claim against the Share Consideration except for the right to receive such Share Consideration pursuant to the operation of the Escrow Agreement.

ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE NICEWONDER PARTIES

     Each of the Nicewonder Parties represents and warrants to the Alpha Parties that the statements contained in this Article III are correct and complete as of the date of this Agreement and will be correct and complete as of the Closing Date (as though made then and as though the Closing Date were substituted for the date of this Agreement throughout this Article III) with respect to itself, except as set forth in Annex I attached hereto.

     3.1 Authorization of Transaction . Such Nicewonder Party has the requisite power and authority to execute and deliver this Agreement and to perform its obligations under this Agreement. This Agreement has been duly executed by such Nicewonder Party and constitutes the valid and legally binding obligation of such Nicewonder Party, as the case may be, enforceable against it in accordance with its terms and conditions, subject to applicable bankruptcy, insolvency, reorganization, moratorium and other similar Laws affecting creditor’s rights generally and general principals of equity. Such Nicewonder Party, as the case may be, need not give any notice to, make any filing with, or obtain any authorization, consent, or approval of any Governmental Authority in order to consummate the transactions contemplated by this Agreement.

     3.2 Noncontravention . Neither the execution and the delivery of this Agreement, nor the consummation of the transactions contemplated hereby, will (a) violate any Law, Decree, or other restriction of any Governmental Authority to which such Nicewonder Party is subject or, if such Nicewonder Party is an Entity, any provision of its Organizational Documents or (b) conflict with, result in a material breach of, constitute a default under, result in the acceleration of, create in any party the right to accelerate, terminate, modify, or cancel, or require any notice under any agreement, contract, lease, license, instrument, or other arrangement to which such Nicewonder Party, as the case may be, is a party or by which it is bound or to which any of its assets are subject.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF THE ALPHA PARTIES

     Each of the Alpha Parties represents and warrants to the Nicewonder Parties that the

statements contained in this Article IV are correct and complete as of the date of this Agreement and will be correct and complete as of the Closing Date (as though made then and as though the Closing Date were substituted for the date of this Agreement throughout this Article IV) with respect to itself, except as set forth in Annex II attached hereto.

     4.1 Authorization of Transaction . Such Alpha Party has the requisite power and authority to execute and deliver this Agreement and to perform its obligations under this Agreement. This Agreement has been duly executed by such Alpha Party and constitutes the valid and legally binding obligation of such Alpha Party, enforceable against it in accordance with its terms and conditions, subject to applicable bankruptcy, insolvency, reorganization, moratorium and other similar Laws affecting creditor’s rights generally and general principals of equity. Such Alpha Party need not give any notice to, make any filing with, or obtain any authorization, consent, or approval of any Governmental Authority in order to consummate the transactions contemplated by this Agreement.

     4.2 Noncontravention . Neither the execution and the delivery of this Agreement, nor the consummation of the transactions contemplated hereby, will (a) violate any Law, Decree, or other restriction of any Government Authority to which such Alpha Party is subject or any provision of its Organizational Documents or (b) conflict with, result in a material breach of, constitute a default under, result in the acceleration of, create in any party the right to accelerate, terminate, modify, or cancel, or require any notice under any agreement, contract, lease, license, instrument, or other arrangement to which such Alpha Party is a party or by which it is bound or to which any of its assets is subject.

ARTICLE V
REMEDIES FOR BREACHES OF THE ACQUISITION AGREEMENTS

     5.1 Survival of Representations, Warranties and Covenants . All of the representations and warranties of any of the Nicewonder Parties contained in Article V in each of the Acquisition Agreements and in any certificate delivered at any Closing by any of them or by Sellers Representative on their individual or collective behalf, shall survive such Closing (except for misrepresentations or breaches of warranty which are disclosed pursuant to Section 6.6 of each of the Acquisition Agreements) and continue in full force and effect for a period of two years thereafter; provided, however , that: (a) the representations and warranties of the relevant Nicewonder Parties contained in Sections 5.13 and 5.24 in each of the Acquisition Agreements shall survive the Closing (even if the Alpha Parties to whom the representations and warranties were made knew or had reason to know of the misrepresentation or breach of warranty at the time of the relevant Closing) and continue in full force and effect until sixty (60) days after the expiration of the applicable statute of limitations; and (b) the other representations and warranties of the Parties contained in the Acquisition Agreements and this Agreement (including the representations and warranties of the Parties contained in Articles III and IV of each of such Agreements) shall survive the respective Closings (even if the damaged Person to whom the representations and warranties were made knew or had reason to know of the misrepresentation or breach of warranty at the time of the relevant Closing) and continue in full force and effect for a period of ten years thereafter. Except as otherwise provided in the Acquisition Agreements, all covenants contained in the Acquisition Agreements to be performed before the relevant Closing shall not survive the Closing (unless not performed) and all covenants contained in this Agreement and each of the Acquisition Agreements to be performed at or after the relevant Closing (including without limitation the covenants contained in this Article V) shall survive such Closing for a period of ten years.

     5.2 Indemnification Provisions for Benefit of the Alpha Parties .

          (a) In the event any of the Nicewonder Parties breaches (or in the event any third party alleges facts that, if true, would mean any of Nicewonder Parties has breached) any of their representations, warranties, or covenants contained in this Agreement or any of the Acquisition Agreements, and, if there is then in effect an applicable survival period pursuant to Section 5.1 above ( provided that the Alpha Parties makes a written claim for indemnification against any of the Nicewonder Parties pursuant to Section 6.8 or as provided in the notice provisions of the Escrow Agreement, as applicable, within such survival period), then, subject to the limitations of Section 5.2(c), the Nicewonder Parties agree to indemnify the Alpha Indemnitees from and against the entirety of any Adverse Consequences any of them may suffer through and after the date of the Claim for Indemnification (including any Adverse Consequences any of them may suffer after the end of any applicable survival period) resulting from, arising out of, relating to, in the nature of, or caused by, the breach (or the alleged breach). Notwithstanding the preceding sentence, Adverse Consequences that individually total less than $100,000 shall be excluded in their entirety and the Nicewonder Parties shall have no Liability under this Section 5.2(a) to the Alpha Indemnitees for such Adverse Consequences; provided that for purposes of this sentence, the Adverse Consequences from any events or actions resulting from the same or substantially similar occurrences shall be aggregated.

          (b) Without regard to the limitations of Section 5.2(c), the Nicewonder Parties agree to indemnify the Alpha Indemnitees from and against the entirety of any Adverse Consequences any of them may suffer resulting from, arising out of, relating to, in the nature of, or caused by any Liability in respect of (i) any failure by any of the Nicewonder Parties to either assume, or satisfy any of the Liabilities associated with, the Retained Assets, Retained Liabilities or Retained Debt, (ii) the inability to assign or otherwise transfer any “Acquired Interests” (as defined in the Nicewonder Acquisition Agreement) to the designated Alpha Party as discussed in Section 2.5 of the Nicewonder Acquisition Agreement, the inability to assign or otherwise transfer any “Units” (as defined in the BE Purchase Agreement) to Premium Energy, LLC as discussed in Section 2.5 of the BE Purchase Agreement, the failure to vest in Premium Energy, LLC as a result of the Merger of any of the rights, privileges, powers and franchises or the restrictions, disabilities and duties of Premium Energy as discussed in Section 2.6 of PE Merger Agreement, or the inability to satisfy and discharge all intercompany transactions or arrangements (as contemplated in Section 2.6 of the Nicewonder Acquisition Agreement and the BE Purchase Agreement and Section 2.7 of the PE Merger Agreement), (iii) any fees or commissions to any broker, finder, or agent with respect to the transactions contemplated by and of the Acquisition Agreements for which any Alpha Party or their respective Affiliates (which after Closing shall include Buchanan Energy Company, LLC, Power Shop, Premium Energy, Twin Star, and Nicewonder Contracting) could become liable or obligated, (iv) the Nicewonder Parties’ obligations to pay any Taxes due with respect to “Pre-Closing Tax Returns” (as defined in Section 10.2 of each of the Nicewonder Acquisition Agreement, BE Purchase Agreement and the PE Merger Agreement) and Straddle Returns pursuant to Article X of each of the Nicewonder Acquisition Agreement, BE Purchase Agreement and the PE Merger Agreement, (v) fraud, intentional misrepresentation or similar cause of action, (vi) subject to Section 5.2(d), the disposition of that certain legal action styled The Affiliated Construction Trades Foundation v. West Virginia Department of Transportation and Nicewonder Contracting Inc. , (SDWV CA No. 2:04-1344), (vii) the acquisition by White Flame of the Crown Property (which for the avoidance of doubt shall include the acquisition cost of the Crown Property and the Adverse Consequences of owning and leasing the Crown Property (which shall include but not be limited to Environmental or Response Actions)); and (viii) White Flame’s failure to receive as of the Closing Date the consent of the lessor under the Alleghany Land Sublease to the transactions contemplated by the Nicewonder Acquisition Agreement at no additional cost or expense to the Alpha Parties.

          (c) The Nicewonder Parties’ aggregate liability under the indemnification provisions of Section 5.2(a) shall not exceed the value of the Alpha Shares held by the Escrow Agent as determined by this Section 5.2(c) (the “Cap”); provided, however , that (i) there shall be no Cap on indemnification for the Adverse Consequences Alpha Indemnitees may suffer resulting from, arising out of, or relating to, the breach or alleged breach of the representations contained in Article III of this Agreement and each of the Acquisition Agreements, Section 5.13 of each of the Acquisition Agreements or the covenants contained in Article X in each of the Nicewonder Acquisition Agreement, the BE Purchase Agreement and the PE Merger Agreement, and no such Adverse Consequences shall be taken into account to determine whether the Cap has been exceeded with respect to Claims for Indemnification not referred to in this clause (i), and (ii) the amount of the Cap shall not exceed $75,000,000 at the time of any Final Determination (which shall be determined by multiplying the number of Alpha Shares held by the Escrow Agent pursuant to the Escrow Agreement by the Closing Price). Notwithstanding clause (ii) of the foregoing proviso, the Nicewonder Parties’ aggregate liability under the indemnification provisions of Section 5.2(a) shall

not exceed $75,000,000. The Nicewonder Parties shall not have any obligation to indemnify Alpha Indemnitees pursuant to Section 5.2(a) until Alpha Indemnitees have suffered Adverse Consequences in excess of an aggregate threshold of $3,000,000 (the “Basket”), at which point the Nicewonder Parties will be obligated to indemnify Alpha Indemnitees from and against all such Adverse Consequences relating back to the first dollar; provided, however , that (A) the Basket shall not apply to indemnification for the Adverse Consequences Alpha Indemnitees may suffer resulting from, arising out of, or relating to, the breach or alleged breach of the representations contained in Article III of this Agreement and each of the Acquisition Agreements, Section 5.13 of each of the Acquisition Agreements or the covenants contained in Article X in each of the Nicewonder Acquisition Agreement, the BE Purchase Agreement and the PE Merger Agreement and (B) the amounts excluded from the Nicewonder Parties’ indemnification obligation by the final sentence of Section 5.2(a) shall be counted in full for purposes of determining whether the Alpha Indemnitees have suffered Adverse Consequences in excess of the Basket only if such amounts individually exceed $5,000.00 provided that for purposes of this sentence, the Adverse Consequences from any events or actions resulting from the same or substantially similar occurrences shall be aggregated. The Nicewonder Parties’ liability under the indemnification provisions of Section 5.2(b) shall be unlimited and not subject to the Cap or the Basket, and no such Adverse Consequences shall be taken into account to determine whether the Cap has been exceeded with respect to Claims for Indemnification not referred to in this sentence. The Alpha Parties may make Claims for Indemnification against the Escrow Amount for any Adverse Consequences under the indemnification provisions of Section 5.2(b), in the Alpha Parties discretion, provided however , that the Alpha Parties right to make such Claims for Indemnification under the indemnification provisions of Section 5.2(b) shall not be limited to the Escrow Amount. Notwithstanding any other provision of this Agreement, the Escrow Amount shall be the sole and exclusive consideration available to the Alpha Parties with respect to any Claim for Indemnification made after the Closing arising pursuant to Section 5.2(a), and after distribution to the Alpha Parties of the entire Escrow Amount, the Nicewonder Parties will have no obligation to further indemnify the Alpha Parties from and against such Adverse Consequences arising pursuant to Section 5.2(a), provided, however , that between the second anniversary of the Closing and the expiration of the applicable survival period, the Alpha Parties may make a Claim for Indemnification against the Nicewonder Parties pursuant to Section 5.2(a) for the breach of any representation, warranty or covenant of the Nicewonder Parties contained in the Acquisition Agreements or this Agreement that survives longer than two years after the Closing, and the Escrow Amount shall not be the sole and exclusive consideration available to the Alpha Parties for any such Claim for Indemnification during such period.

          (d) Notwithstanding Section 5.2(b) to the contrary, the Adverse Consequences to the Alpha Parties for which the Nicewonder Parties are obligated to indemnify the Alpha Parties pursuant to Section 5.2(b)(vi) shall be decreased by (i) the net revenues of Nicewonder Contracting from all sales of coal from and after the Closing of the Nicewonder Acquisition Agreement to the tenth Business Day preceding the date of the Final Determination, (ii) the value of the reserves in place to be purchased from Logan Coal & Timber Association, the value of the surface property held by Nicewonder Contracting, and the value of the mining equipment owned by Nicewonder Contracting, in each such case as determined by a mutually acceptable independent third party. In order to effect clause (i) of the foregoing, from and after the Closing Date until the date of the resolution of such litigation, the Alpha Parties agree to maintain the books and records of Nicewonder Contracting in a manner that will facilitate the foregoing computation.

          (e) Notwithstanding Section 5.2(b) to the contrary, the Adverse Consequences to the Alpha Parties for which the Nicewonder Parties are obligated to indemnify the Alpha Parties pursuant to Section 5.2(b)(vii) shall be limited to $.50 of every dollar arising out of the acquisition by White Flame of the Crown Property (which for the avoidance of doubt shall include the acquisition cost of the Crown Property and the Adverse Consequences of owning and leasing the Crown Property (which shall include but not be limited to Environmental or Response Actions, if any)).

     5.3 Indemnification Provisions for Benefit of the Nicewonder Parties . In the event any of the Alpha Parties breaches (or in the event any third party alleges facts that, if true, would mean the Alpha Parties has breached) any of its representations, warranties, or covenants contained in this Agreement or any of the Acquisition Agreements, and, if there is then in effect an applicable survival period pursuant to Section 5.1 above ( provided that any Nicewonder Party makes a written claim for indemnification against the Alpha Parties pursuant to Section 6.8 within such survival period), then Alpha Natural Resources, LLC agrees to indemnify Nicewonder Indemnitees from and against the entirety of any Adverse Consequences any of them may suffer through and after the date of the claim for indemnification (including any Adverse Consequences such Nicewonder Party may suffer after the end of any applicable survival period) resulting from, arising out of, relating to, in the nature of, or caused by the breach (or the alleged breach); provided, however , that the Alpha Parties’ liability under the indemnification provisions of this Section 5.3 shall not exceed the Cap; provided, however , that there shall be no Cap on indemnification for the Adverse Consequences Nicewonder Indemnitees may suffer resulting from, arising out of, or relating to, (x) the breach or alleged breach of the representations contained in Article IV of this Agreement or any of the Acquisition Agreements or the covenants contained in Article X of the Nicewonder Acquisition Agreement, the BE Purchase Agreement or the PE Merger Agreement, and (y) any failure by the Alpha Parties to either assume or satisfy any of the Liabilities associated with, the Assumed Liabilities (if not otherwise indemnifiable by the Nicewonder Parties under this Article V), and no such Adverse Consequences shall be taken into account to determine whether the Cap has been exceeded with respect to Claims for Indemnification not referred to in this proviso. The Alpha Parties shall not have any obligation to indemnify Nicewonder Indemnitees pursuant to Section 5.3 until Nicewonder Indemnitees have suffered Adverse Consequences in excess of the Basket, at which point Alpha Natural Resources, LLC will be obligated to indemnify Nicewonder Indemnitees from and against all such Adverse Consequences relating back to the first dollar; provided, however , that the Basket shall not apply to indemnification for the Adverse Consequences Nicewonder Indemnitees may suffer resulting from, arising out of, or relating to, (x) the breach or alleged breach of the representations contained in Article IV of this Agreement or any of the Acquisition Agreements or the covenants contained in Article X of the Nicewonder Acquisition Agreement, the BE Purchase Agreement or the PE Merger Agreement, and (y) any failure by the Alpha Parties to either assume or satisfy any of the Liabilities associated with, the Assumed Liabilities (if not otherwise indemnifiable by the Nicewonder Parties under this Article V).

     5.4 Matters Involving Third Party Claims .

          (a) If any third party shall notify any Party (the “Indemnified Party”) with respect to a Third Party Claim which may give rise to a claim for indemnification against any other Party

(the “Indemnifying Party”) under this Article V, then the Indemnified Party shall promptly provide a Claim for Indemnification to the Indemnifying Party; provided, however , that no delay on the part of the Indemnified Party in notifying any Indemnifying Party shall relieve the Indemnifying Party from any obligation hereunder unless (and then solely to the extent) the Indemnifying Party thereby is prejudiced.

          (b) Any Indemnifying Party will have the right to defend the Indemnified Party against the Third Party Claim with counsel of its choice reasonably satisfactory to the Indemnified Party so long as (i) the Indemnifying Party notifies the Indemnified Party in writing within 15 Business Days after the Indemnified Party has made a Claim for Indemnification that the Indemnifying Party will indemnify the Indemnified Party from and against the entirety of any Adverse Consequences the Indemnified Party may suffer resulting from, arising out of, relating to, in the nature of, or caused by the Third Party Claim, (ii) the Indemnifying Party provides the Indemnified Party with evidence reasonably acceptable to the Indemnified Party that the Indemnifying Party will have the financial resources to defend against the Third Party Claim and fulfill its indemnification obligations hereunder, (iii) the Third Party Claim involves only money damages and does not seek an injunction or other equitable relief and, in respect of Third Party Claims in which the Alpha Parties or its Affiliates is the Indemnified Party, in the Alpha Parties’ reasonable judgment could not result in money damages in excess of any remaining Escrow Amount, (iv) settlement of, or an adverse judgment with respect to, the Third Party Claim is not, in the good faith judgment of the Indemnified Party, likely to establish a precedential custom or practice materially adverse to the continuing business interests of the Indemnified Party, and (v) the Indemnifying Party conducts the defense of the Third Party Claim actively and diligently; provided, however , that the Indemnifying Party shall have the right to participate in the defense of an action that involves both claimed money damages and injunctive or other equitable relief to the extent, but only to the extent, of the claim for money damages. Failure to timely respond shall constitute a final and binding acceptance of the Claim for Indemnification by the Indemnifying Party, and the Claim for Indemnification shall be paid in accordance with Section 5.8.

          (c) So long as the Indemnifying Party is conducting the defense of the Third Party Claim in accordance with Section 5.4(b), (i) the Indemnified Party may retain separate co-counsel at its sole cost and expense and participate in the defense of the Third Party Claim, (ii) the Indemnified Party will not consent to the entry of any judgment or enter into any settlement with respect to the Third Party Claim without the prior written consent of the Indemnifying Party (not to be withheld unreasonably), and (iii) the Indemnifying Party will not consent to the entry of any judgment or enter into any settlement with respect to the Third Party Claim without the prior written consent of the Indemnified Party (not to be withheld unreasonably).

          (d) In the event any of the conditions in Section 5.4(b) is or becomes unsatisfied, however, (i) the Indemnified Party may defend against, and consent to the entry of any judgment or enter into any settlement with respect to, the Third Party Claim in any manner it reasonably may deem appropriate (and the Indemnified Party need not consult with, or obtain any consent from, any Indemnifying Party in connection therewith), (ii) the Indemnifying Parties will reimburse the Indemnified Party promptly and periodically for the costs of defending against the Third Party Claim (including reasonable attorneys’ fees and expenses), and (iii) the Indemnifying Parties will remain responsible for any Adverse Consequences the Indemnified Party may suffer resulting from, arising

out of, relating to, in the nature of, or caused by the Third Party Claim to the fullest extent provided in this Article V.

     5.5 Matters not Involving Third Party Claims . The Alpha Indemnitees or the Nicewonder Indemnitees may make a claim for any matter that does not involve a Third Party Claim in any amount to which they may be entitled under this Article V by providing a Claim for Indemnification against the other promptly after such Indemnified Party has notice of any Adverse Consequence which may give rise to a Claim for Indemnification; provided, however , that no delay on the part of the Alpha Indemnitees or Nicewonder Indemnitees in notifying the other shall relieve the Indemnifying Party from any obligation hereunder unless (and then solely to the extent) the Indemnifying Party is actually prejudiced by such delay. The Indemnifying Party shall have 30 Business Days to object to the Claim for Indemnification by delivery of a written notice of such objection to the Indemnified Party specifying in reasonable detail the basis for such objection. Failure to timely respond shall constitute a final and binding acceptance of the Claim for Indemnification by the Indemnifying Party, and the Claim for Indemnification shall be paid in accordance with Section 5.8. If an objection is timely interposed by the Indemnifying Party, then the Indemnified Party and the Indemnifying Party shall negotiate in good faith for a period of 20 Business Days from the date the Indemnified Party receives such objection prior to commencing any Proceeding with respect to such Claim for Indemnification.

     5.6 Determination of Adverse Consequences . All indemnification payments under this Article V shall be deemed adjustments to the aggregate of the “Purchase Price” under the Nicewonder Acquisition Agreement and the BE Purchase Agreement plus the “Merger Consideration” under the PE Merger Agreement (each as defined therein), allocated in a manner consistent with the Final Allocation.

     5.7 Other Indemnification Provisions . Each Nicewonder Party hereby agrees that he, she or it will not make any Claim for Indemnification against any of the Acquired Interests by reason of the fact that he, she or it was a director, officer, employee, or agent of any Subject Company or was serving at the request of any Subject Company as a partner, trustee, director, officer, employee, or agent of another Entity (whether such claim is for judgments, damages, penalties, fines, costs, amounts paid in settlement, losses, expenses, or otherwise and whether such claim is pursuant to any Law, charter document, bylaw, agreement, or otherwise) with respect to any Proceeding brought by the Alpha Parties against such Nicewonder Party (whether such Proceeding is pursuant to this Agreement, applicable Law, or otherwise). Nothing in this Section 5.7 shall limit the right of recovery by a Nicewonder Party against an insurance carrier of any Entity other than a Subject Company.

     5.8 Claims Against Escrow Amount . Subject to this Article V, any Claim for Indemnification by the Alpha Parties against the Nicewonder Parties pursuant to Section 5.2(a) shall be made solely with respect to the Escrow Amount (except as otherwise provided by the last sentence of Section 5.2(c)), and any Claim for Indemnification by the Alpha Parties against the Nicewonder Parties pursuant to Section 5.2(b) may, in the Alpha Parties’ discretion, be made with respect to the Escrow Amount, and in any case may be made at any time within the applicable survival period. Upon any Final Determination of a Claim for Indemnification against the Nicewonder Parties, the Nicewonder Parties shall have the option, for a period of 10 Business Days

following such Final Determination, to pay the full amount of such Claim for Indemnification in cash to the Alpha Parties. If the Nicewonder Parties have not paid such Claim for Indemnification in cash within such period, then the Nicewonder Parties and the Alpha Parties shall provide joint written instructions to the Escrow Agent to pay to Alpha Natural Resources, Inc. the amount of such Claim for Indemnification as determined by such Final Determination by returning to Alpha Natural Resources, Inc. a whole number of Alpha Shares (rounded up or down to the nearest whole Alpha Share), which when multiplied by the Closing Price as of the date of the Final Determination, equals the amount of such Claim for Indemnification as determined by such Final Determination. If there are no pending claims after the second anniversary of the Closing, the remaining balance of the Escrow Amount will be disbursed by the Escrow Agent (pursuant to joint written instructions by the Nicewonder Parties and the Alpha Parties) to the Nicewonder Parties in accordance with the Escrow Agreement; provided, however , that in the event that there are any pending Claims for Indemnification after the second anniversary of the Closing: (i) there shall be retained in escrow a whole number of Alpha Shares (rounded up or down to the nearest whole Alpha Share), which when multiplied by the Closing Price as of such date, equals the amount of such pending Claims for Indemnification; (ii) the remaining balance of the Escrow Amount after such retention will be so disbursed by Escrow Agent (pursuant to joint written instructions by the Nicewonder Parties and the Alpha Parties) to the Nicewonder Parties in accordance with the Escrow Agreement; and (iii) as each such Claim for Indemnification is resolved by a Final Determination, any amount retained with respect thereto that remains in escrow after such resolution will be disbursed by Escrow Agent (pursuant to joint written instructions by the Nicewonder Parties and the Alpha Parties) to the Nicewonder Parties in accordance with the Escrow Agreement.

     5.9 Payment of Claims . Upon Final Determination of the amount of a Claim for Indemnification, the Indemnifying Party (or the Escrow Agent, if applicable) shall pay the amount of such claim within 10 Business Days of the date of such Final Determination. A “Final Determination” of a claim shall be (i) a judgment of any court determining the validity of a disputed claim, if no appeal is pending from such judgment or if the time to appeal therefrom has elapsed (it being understood that the Indemnified Party shall have no obligation to appeal); or (ii) an award of any arbitrator or arbitration panel determining the validity of such disputed claim, if there is not pending any motion to set aside such award or if the time within which to move to set such award aside has elapsed; or (iii) a written termination of the dispute with respect to such claim signed by all of the parties thereto or their attorneys; or (iv) a written acknowledgment of the Indemnifying Party that it no longer disputes the validity of such claim; or (v) the date on which an Indemnifying Party fails to respond to a Claim for Indemnification as specified in Section 5.4(b) or Section 5.5; or (vi) such other evidence of final determination of a disputed claim as shall be reasonably acceptable to the Parties.

ARTICLE VI
MISCELLANEOUS

     6.1 Nature of Certain Obligations .

          (a) The representations and warranties of each Nicewonder Party in Article III and of each Alpha Party in Article IV are several. This means that the particular Nicewonder Party or

Alpha Party making the representation or warranty will be solely responsible to the extent provided in Article V above for any Adverse Consequences the Alpha Parties or the Nicewonder Parties, respectively, may suffer as a result of any breach thereof.

          (b) Except as provided in Section 6.1(c), the remainder of the representations, warranties, and covenants in this Agreement are joint and several obligations. This means that with respect to any such representations, warranties and covenants of the Nicewonder Parties or the Alpha Parties, each Nicewonder Party or Alpha Party will be responsible to the extent provided in Article V above for the entirety of any Adverse Consequences the Alpha Parties or the Nicewonder Parties, respectively, may suffer as a result of any breach thereof.

          (c) (i) As to Claims for Indemnification arising in respect of the BE Purchase Agreement, (A) each of the Majority Buchanan Unitholders (to the exclusion of the other Nicewonder Parties) will be responsible to the extent provided in