Exhibit 10.4
FORM OIL AND GAS DEED, ASSIGNMENT, AND ASSUMPTION
FOR
CONVEYANCE OF OIL AND GAS (INCLUDING CBM AND CMM) RIGHTS
(INCLUDES LEASES, ASSOCIATED RIGHTS AND BOOKS AND RECORDS)
FROM
PEABODY ENTITIES TO CNX GAS COMPANY LLC

 

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Recording Request by and Return to:
         
CNX Gas Company LLC
         
5 Penn Center West, Suite 401
         
Pittsburgh, Pennsylvania 15276-0102
         
 
         
 
    (For recording purposes only)          

     OIL AND GAS DEED, ASSIGNMENT, AND ASSUMPTION
     THIS OIL AND GAS DEED, ASSIGNMENT, AND ASSUMPTION (together with all
exhibits hereto, this "Deed”), effective as of 12:00 a.m. Central Time on the
1st day of April, 2007 (“Effective Time”), is made between Peabody Entity
(holding oil and gas and CBM/CMM interests in the county), a Delaware
                    , whose address is 701 Market Street, St. Louis, Missouri
63101 (“Grantor”) and CNX Gas Company LLC, a Virginia limited liability company,
whose address is 5 Penn Center West, Suite 401, Pittsburgh, PA 15276-0102
(“Grantee”). Grantor and Grantee are sometimes referred to individually as
“Party” or collectively as “Parties”.
     WHEREAS, on the terms and conditions set forth herein, Grantor desires to
grant, sell, convey, transfer, and assign to Grantee, its successors and assigns
forever, those oil and gas rights, title, interests, estates and claims and
other assets and rights described in this Deed;
     WHEREAS, Grantor, its successors and assigns forever, shall retain those
reserved rights and minerals expressly described in this Deed;
     WHEREAS, Grantee has agreed to purchase and accept those oil and gas
rights, title, interests, estates and claims, and other assets described in this
Deed, and to assume, pay, discharge and perform certain obligations and
liabilities with regard to such assets; and
     WHEREAS, the Parties agree that the obligations and covenants contained
herein are intended to run with the land and bind the Parties and their
respective successors and assigns forever.

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     NOW THEREFORE, for Ten Dollars ($10.00) and other good and valuable
consideration, the receipt and sufficiency of which is acknowledged, Grantor and
Grantee agree as follows:
I. Definitions.
     In addition to terms defined elsewhere in this Deed, the following terms
with initial capital letters, when and in this Deed, shall have the meanings set
forth below:
     “Applicable Program” means a domestic, international or foreign renewable
or alternative energy, emissions reduction or emissions quantification,
certification or reporting program, scheme, organization or Legal Requirement,
adopted by a Governmental Authority or otherwise, or other similar program,
public or private, with respect to which exists a market of any size, a registry
or a reporting system for or with respect to ERCs or attributes of ERCs. Without
limiting the generality of the foregoing, Applicable Program includes any
legislation introduced into the U.S. Congress between 2000 and the date of this
Deed, whether or not enacted, as well as any current, or future legislation or
regulation concerned with renewable energy, alternative energy, carbon or
carbon-equivalents, greenhouse gases, or any actions that would result in or be
recognized as “early action” under such programs, or any Legal Requirement
involving or administered by any Governmental Authority, GIS or any other
entity, public or private, that may or does certify the generation of an ERC
under any present or future domestic, international, or foreign ERC or other
emissions trading program.
     “CBM” means all occluded coal bed methane gas and all associated natural
gas and other hydrocarbons of whatever quality or quantity normally within,
produced, or emitted from a coal seam or any related, associated superincumbent
or adjacent rock material or strata.
     “CMM” means coal mine methane and gob gas from inactive or sealed areas
which is liberated and accumulates within a fractured collapsed zone, mine void,
or mine workings resulting from all forms of mining.
     “Contracts” means any written agreement, contract, mortgage, deed of trust,
bond, indenture, lease (other than Oil and Gas leases and Partial Assignment
Leases), license, note, joint operating agreement, division order, Oil and Gas
unitization, pooling, or communitization agreement, declaration, or order, crude
oil or gas sales or purchase contract, gathering, transportation or marketing
agreement, easement, right-of-way, surface use or access agreement, service or
supply agreement, certificate, option, warrant, right, or other instrument,
document, obligation or agreement (and any ratifications or amendments to such
Contracts whether or not such ratifications or amendments are described on
Exhibit “B”); provided that “Contract” shall not include any such agreements,
contracts or other rights to the extent they relate to any Reserved Rights.
     “ERCs” mean any and all aspects, claims, characteristics or benefits
related to the production, use, capture, flaring, burning, fueling, storage or
sequestration of CBM and CMM produced by Grantee from the Lands containing the
Oil and Gas Interests that are capable of being measured, verified or
calculated, and which can produce credits, benefits, offsets,

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reductions, or allowances, howsoever entitled, or are otherwise capable of being
recognized under an Applicable Program. Without limiting the generality of the
foregoing, ERCs include those environmental or greenhouse gas emission reduction
credits or allowances based on the production, sale, use or flaring of CBM or
CMM produced by Grantee from the Lands containing the Oil and Gas Interests in
lieu of venting such CBM or CMM to the atmosphere or otherwise disposing of or
using such gases, resulting in the voluntary reduction in emissions to levels of
control recognized by an Applicable Program. ERCs also include any action by
Grantee relating to CBM or CMM produced from the Lands containing the Oil and
Gas Interests that would be recognized as beneficial or of value in the event
that any Governmental Authority imposes any tax, levy, surcharge or other
imposition on emissions of air pollutants, including greenhouse gases, or on
products or services that are related to such emissions, including, without
limitation, any “carbon tax.”
     “GIS” means a generation information system, generation attribute tracking
system or other system that records generation from renewable or alternative
energy or energy with other beneficial attributes in any particular geographic
region, such as WREGIS, NEPOOL, GIS, ERCOT, PJM, M-RETS, or, if applicable, an
Independent System Operator or a Regional Transmission Organization.
     “Governmental Authority” means: (a) the United States of America; (b) any
state, commonwealth, territory or possession of the United States of America and
any political subdivision thereof (including counties, municipalities,
provinces, parishes and the like); (c) any Native American or Tribal entity; and
(d) any court, quasi-governmental authority, tribunal, department, commission,
board, bureau, agency, authority or instrumentality of any of the foregoing.
     “Lands” means that real property overlying or containing the Oil and Gas
Interests and described on Exhibit “A” and depicted on Exhibits “A-1” through
“A-___”.
     “Legal Requirement” means applicable common law and any statute, ordinance,
code, law, rule, regulation, order, technical or other written standard,
requirement or procedure enacted, adopted, promulgated, applied or followed by,
or any agreement entered into by, any Governmental Authority, including any
judgment, judicial decision, writ, order, injunction, award or decree of or by
any Governmental Authority.
     “Lien” means, with respect to any asset included in the Subject Property,
any security agreement, financing statement filed with any Governmental
Authority, conditional sale agreement, capital lease or title retention
agreement relating to such asset, any lease, consignment or bailment given for
purposes of security, any right of first refusal, equitable interest, lien,
mortgage, indenture, pledge, option, charge, encumbrance, adverse interest,
constructive trust or other trust, claims, attachment, exception to or defect in
title or other ownership interest (including reservations, rights of entry,
possibilities of reverter, encroachments, easements, rights-of-way, restrictive
covenants, leases and licenses) of any kind, which otherwise constitutes an
interest in or claim against Grantor’s title to such asset, whether arising
pursuant to any Legal Requirement, any Contract or otherwise.

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     “Oil and Gas” means oil and gas, CBM, CMM, and other liquid or gaseous
hydrocarbons, including condensate and other substances produced therewith.
     “Partial Assignment Leases” means certain Oil and Gas leases under which
Grantor is lessor that cover part of the Oil and Gas Interests and are further
described on Exhibit “B”.
     “Permit” means any approval, license, consent, permit, waiver, or other
authorization issued, granted, given, or otherwise made available by or under
the authority of any Governmental Authority or pursuant to any Legal Requirement
authorizing the exploration, development or production of Oil and/or Gas.
II. Grant of Subject Property
     Grantor hereby grants, sells, conveys, transfers, assigns, and delivers to
Grantee, [confirm language on a jurisdiction-by-jurisdiction basis] subject to
the covenants, terms, exceptions, conditions, restrictions, and Reserved Rights
set forth herein, all of Grantor’s rights, title, interests, estates and claims
in and to the following real and personal property as the same exist as of the
Effective Time or as of such other date expressly set forth herein (all of the
following, collectively, the “Subject Property”):
     A. Oil and Gas Interests: All of Grantor’s fee, leasehold, mineral, royalty
and other rights and interests in and to Oil and Gas, in, on or under
approximately [___] acres of land described on Exhibit “A” attached hereto and
depicted on the maps attached hereto as Exhibits [“A-1” through “A-___"]
(including, without limitation, landowners’ or reserved royalties, overriding
royalties, rights to free gas either reserved in favor of or granted to Grantor
and its Affiliates, as well as any right to vent CBM and CMM or stimulate coal
seams except as otherwise provided in this Deed) (collectively, the “Oil and Gas
Interests”); provided, however, that the Oil and Gas Interests shall include all
Oil and Gas rights and interests owned by Grantor or any of Grantor’s
Predecessors or Affiliates (each as hereinafter defined) as of the Effective
Time in the lands depicted on the maps attached hereto as Exhibits [“A-1”
through “A- “], whether or not such Oil and Gas rights and interests are
described on Exhibit “A”.
     B. Other Agreements: All of Grantor’s rights, title, and interests in, to,
under, or derived from all Contracts, Partial Assignment Leases, and Permits
(collectively, the “Other Agreements”), including without limitation those
described on Exhibit “B” attached hereto, in each case only to the extent they
relate solely to any of the Oil and Gas Interests or the production and sale of
Oil and Gas attributable to such Oil and Gas Interests, and, in the case of the
Partial Assignment Leases, subject to and reserving in favor of Grantor (i) all
rights, interests, benefits, duties and obligations under such Partial
Assignment Leases that are not incident to the ownership, operation or
exploitation of Oil and Gas including, without limitation, the rights to explore
for, develop, mine, produce, transport and sell coal, and any other rights to
develop any surface or mineral rights from the Lands subject to the Partial
Assignment Leases, surface owner compensation, enforcement of surface use
restrictions, and the rights to enforce such reserved rights and interests and
to pursue all claims and remedies (including termination) under

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applicable Legal Requirements against lessees, operators, agents, contractors,
successors and assigns for any breach or default of the provisions of a Partial
Assignment Lease, and (ii) all rights to sequester carbon dioxide and other
gases which are not Oil and Gas conveyed hereby to Grantee; provided that such
reservation does not include any right to prohibit or restrict Grantee’s ability
to assign or otherwise transfer Grantee’s rights with respect to the underlying
Oil and Gas to a third party, subject to the Reserved Rights.
     C. Associated Rights: All nonexclusive express or implied rights at law
associated with ownership or control of Oil and Gas in and under the Land that
Grantor may currently have (collectively, the “Associated Rights”):
          1. to use and occupy so much of the surface of the Land, and develop,
produce, and consume so much of the available surface or groundwater on or under
the Land not otherwise subject to Grantor’s Reserved Rights, as are reasonable
and necessary to explore for, develop, produce, process, store, transport, and
sell Oil and Gas from the Land;
          2. except as limited by the provisions of Sections III and IV hereof,
to: (i) stimulate coal seams on or under the Land for the extraction of Oil and
Gas, and (ii) vent, flare or use any CBM or CMM produced or recovered from coal
seams or any existing mines on the Land; and
          3. except to the extent constituting a Reserved Right, to claim (or
hereafter acquire the right to claim): (i) any ERCs (as hereinafter defined)
associated with Grantee’s production and sale, use or flaring of CBM and CMM
from the Lands containing the Oil and Gas Interests in lieu of venting such CBM
or CMM to the atmosphere or otherwise disposing of or using such gases; and (ii)
any other credits or allowances (including any tax credits or allowances)
relating to production and sale, use or flaring of CBM or CMM by Grantee in
advance of coal mining operations by Grantor, or its successors and assigns, on
the Lands containing the Oil and Gas Interests (the rights described in clauses
(i) and (ii) collectively, the “ERC Rights”); provided, however, that in
exercising any ERC Rights, Grantee shall not take any action that results or
would reasonably be expected to result in additional costs, impairment or
interference (all such additional costs, impairment or interference as
determined by Grantor in good faith) to Grantor in connection with any
operations conducted pursuant to the Reserved Rights. In the event that Grantee
takes any action that results or would reasonably be expected to result in
additional costs, impairment or interference (all such additional costs,
impairment or interference as determined by Grantor in good faith) to Grantor in
connection with any operations conducted pursuant to the Reserved Rights,
promptly upon Grantor’s request, Grantee shall relinquish and reassign, for no
additional consideration, all such ERC Rights to Grantor who shall then have the
right to deal with such ERC Rights for its own account; provided, however, that
such relinquishment and reassignment only shall apply to ERC Rights on a
site-specific basis, in an area reasonably defined by Grantor and only to the
extent necessary for the exercise of its Reserved Rights.
It is expressly agreed that the Associated Rights shall not include any
ownership interest in or title to surface of the Land or to the Reserved
Minerals owned or hereafter acquired by Grantor.

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     D. Tax Credits: All rights Grantor may now have or later acquire to claim
any tax credits, except for any such tax credits which may arise from the
exercise of the Reserved Rights, relating to the exploration and production by
Grantee of Oil and Gas after the Effective Time with respect to the Subject
Property.
     E. Books and Records: Copies of all accounting, land and Contracts files
and records, and all drilling, engineering, geologic and technical records,
files, maps, data, analyses, drawings, blueprints, financial assurances, bonds,
and insurance policies (only to the extent an outstanding claim has been filed
under any such policy with respect to any of the Oil and Gas Interests),
schematics, reports, lists, and plans and processes to the extent the same were
obtained or prepared for the sole purpose of evaluating and developing the oil
and gas potential of the Oil and Gas Interests (collectively, “Books and
Records”), which are in the physical possession of Grantor, or with respect to
which Grantor has the right of access and the ability to obtain copies, as of
April 1, 2007 or as of June 20, 2007; provided, however, that Grantor shall use
commercially reasonable efforts to obtain and make available to Grantee Books
and Records that are not in the physical possession of Grantor as of April 1,
2007 or as of June 20, 2007. It is agreed by the Parties that the Books and
Records shall not include: (i) any general accounting, financial or tax records,
(ii) any books, files, records and other materials and data that are subject to
confidentiality obligations or other similar restrictions under agreements with
third persons who are not Affiliates of Grantor, or (iii) any books, files,
records and other materials and data that were obtained, prepared or received by
Grantor or any of its agents, consultants or representatives in connection with:
(a) purposes other than evaluating and developing the Oil and Gas potential of
the Oil and Gas Interests, (b) Grantor’s exercise of its Reserved Rights,
(c) Grantor’s internal evaluation of the Subject Property for management
purposes, or (d) marketing the Subject Property to Grantee and others.
     F. Insurance Claims: All rights to insurance proceeds receivable after the
Effective Time with respect to any Assumed Liabilities (as defined below)
insured on a “claims made” basis, and all insurance proceeds (to the extent not
already expended by Grantor to restore or replace a lost or damaged asset, which
replacement asset shall be a Subject Property) received prior to June 20, 2007
with respect to any asset which, if held by Grantor as of the Effective time,
would be a Subject Property.
III. Limitation on Grant of Subject Property
     A. The Oil and Gas Interests and Associated Rights are subject to, limited
by, junior and subordinate to all conveyances, leases, easements, encumbrances
(other than encumbrances arising from or relating to mortgages, deeds of trust,
pledges or similar encumbrances designed to collateralize indebtedness in favor
of lenders to Grantor or Grantor’s current or former Affiliates unrelated to the
Oil and Gas Interests and Associated Rights covering any of the Land), licenses,
options, and rights-of-way of which Grantee has actual notice, or as to which
Grantee is deemed to have received record notice or notice through reasonable
inquiry as of the Effective Time. As used herein, the term “Affiliates” shall
mean with respect to either Grantor or Grantee, any person or entity
controlling, controlled by, or under common control with Grantor or Grantee, as
applicable. The term “control” as used in the immediately preceding sentence,
means the possession, directly or indirectly, of the power to direct or cause
the direction of the

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management or policies of the controlled person or entity, whether through the
ownership of voting securities or voting interests, by contract or otherwise.
For purposes of the definition, an Affiliate includes not only present
Affiliates but former Affiliates during the period of time each was an
Affiliate.
     B. Grantor’s grant, sale, conveyance, transfer, and assignment of the
Subject Property to Grantee in Section II hereof, and the manner in which the
Parties shall hereafter conduct their respective activities and operations on or
with respect to the Land, the Subject Property, and the Reserved Minerals are
expressly subject to and bound by the covenants, terms, exceptions, conditions,
promises, undertakings, reservations, and restrictions specified in this Deed
(whether or not so captioned) including all exhibits hereto (collectively,
“Covenants”). The Covenants are intended to touch and concern the Land, and run
with the Land, so as to bind Grantor and Grantee and their respective lessees,
successors, and assigns in perpetuity.
     C. The Subject Property shall not include, and Grantor specifically
excludes from this Deed: (i) any accounts receivable accruing or attributable to
the Subject Property for the period prior to the Effective Time; (ii) all
production of Oil and Gas from or attributable to the Subject Property with
respect to all periods prior to the Effective Time and all proceeds attributable
thereto; (iii) any refund of Taxes, costs or expenses borne by Grantor or its
predecessors in title attributable to the period prior to the Effective Time;
(iv) any rights, titles, estates or interests owned, leased, held or otherwise
controlled by Grantor in the Lands that are not otherwise described or included
in Section II hereof; (v) all Oil and Gas rights, estates, interests, and claims
in and to properties other than the Lands except as otherwise expressly provided
herein, as well as all Reserved Rights and data, books, maps, records and other
information relating thereto; (vi) except for common law or statutory rights to
use the surface as an incident or right appurtenant to the Oil and Gas
Interests, all surface rights and estates in the Lands, and all roads, ditches
and other surface improvements on such Lands; and (vii) other than the Grantor
Reviewable Data (as defined herein), all books, records, files, material,
information and data that were obtained, prepared or received by Grantor or any
of its agents, consultants or representatives (w) for purposes other than
evaluating and developing the oil and gas potential of the Oil and Gas
Interests, (x) in connection with Grantor’s exercise of the Reserved Rights,
(y) in connection with internal evaluations of the Subject Property for
management purposes, or (z) in connection with the marketing of the Subject
Property or the evaluation and negotiation of transfer contemplated herein
(collectively, the “Excluded Assets”). For purposes of this Deed, the term
“Taxes” means all levies and assessments of any kind or nature imposed by any
Governmental Authority, including all income, sales, use, ad valorem, value
added, franchise, severance, production, net or gross proceeds, withholding,
payroll, employment, F.I.C.A., excise or property taxes, levies production, or
other payment required to be made to any state abandoned property administrator
or other public official pursuant to an abandoned property, escheat or similar
law, together with any interest thereon and any penalties, additions to tax or
additional amounts applicable thereto.
IV. Grantor’s Reserved Rights and Subordination
     A. Reserved Rights: In addition to the Excluded Assets, Grantor hereby
excludes from this Deed and reserves and retains to itself and its successors
and assigns all rights, title,

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interests, and estates now held or hereafter acquired in, under, or with respect
to the Lands not expressly assigned, conveyed, or transferred to Grantee in
Section II hereof, which include, without limitation, the following rights,
estates and interests which shall exist in perpetuity, shall be senior to the
rights and interests granted, sold, conveyed, transferred and assigned in this
Deed to Grantee, and may be exercised by Grantor without creating any duty or
obligation (including any obligation to compensate Grantee for lost or vented
CBM or CMM) to Grantee except as otherwise provided in Exhibit “C” hereto
(collectively, the “Reserved Rights”):
          1. all minerals and other substances, other than Oil and Gas
including, without limitation, coal and minerals mixed with the coal (other than
CBM or CMM), gravel, limestone, hardrock and metallic minerals, rock, and their
constituent products (collectively, “Reserved Minerals”) and all strata
containing such Reserved Minerals; provided, however, Grantee shall have the
right to drill into, through, over, or under any coal seam or other Reserved
Minerals as provided in this Deed and Exhibit “C” attached hereto;
          2. to explore for, test, drill, develop, mine (by surface mining and
any other current or future mining method), remove, process, store, transport,
load, market, and sell all Reserved Minerals;
          3. to exercise any other rights, interests, benefits, and perform
duties and obligations, relating to the development of the surface estate owned
or held by Grantor covering any part of the Land;.
          4. to own, use, develop (including the right to change the permitted
use or zoning for any purposes described in this Section IV except to the extent
that such zoning would prohibit exploration and production of Oil and Gas hereby
conveyed), lease, option, or sell all or any part of the surface estate of the
Land;
          5. all facilities, fixtures, improvements, and personal property owned
or held by Grantor located on, in or under the Land;
          6. use the surface or subsurface of the Land (including any
underground mine workings or voids) for any and all purposes relating to
prospecting, drilling for, developing, mining, taking out, removing, processing,
storing, transporting, loading, or disposing of Reserved Minerals or mine wastes
including, without limitation, injection of slurry produced from the Land or
other real property; removal of topsoil and subsurface rock, construction,
operation, and removal or abandonment of shafts, airways, mine openings,
drainage systems, drifts, passageways, pits, platforms, roads, railways,
reservoirs and surface impoundments, and utilities, dewatering of Reserved
Minerals and strata in communication therewith, and utilization of all
underground workings and facilities in furtherance of sequestering carbon
dioxide and other gases (other than Oil and Gas conveyed hereby to Grantee);
provided that no such subsurface (other than seams of coal, active or inactive
coal mines or gob) shall be used for storage, injection or sequestration in
strata designed or reasonably expected to migrate into or communicate with
sands, shales or other zones or formations in the Lands, with respect to which
natural gas and oil wells drilled into such sands, shales or other zones or
formations reasonably could be expected to produce natural gas or oil in paying
quantities or commercial quantities;

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          7. to use the surface or subsurface of the Land to perform any
reclamation, remediation, or restoration activities associated with Grantor’s
exercise of its other Reserved Rights (including, without limitation, any
pre-mining or post mining operations) in this Section IV.A. on or with respect
to the Land or other real property as required under applicable agreements,
laws, regulations, Permits regardless of when the events occurred necessitating
such uses;
          8. to remove subjacent support in or adjacent to the Land and allow
the surface and other strata to subside; without any liability of any kind to
Grantee except as otherwise expressly provided in Exhibit “C” attached hereto;
          9. to remove, vent, dissipate, or dilute CBM or CMM from a coal seam
or underground mine workings to the extent necessary to operate coal mines in
such underground mine workings in an unimpeded and uninterrupted manner
consistent with state and federal mine safety standards, applicable permits or
Grantor’s operating procedures and practices, consistently applied, without any
obligation to recover such CBM or CMM or compensate Grantee for such loss;
provided, however, except as otherwise set forth in Section II.C.3, Grantor
shall not have the right to capture, process, sell or flare such CBM or CMM,
unless Grantee is unwilling or unable to do so in a manner that does not
interfere with Peabody’s exercise of the Reserved Rights;
          10. to appropriate, own, discharge, or use surface and groundwater in,
on, under, or appurtenant to the Land;
          11. to utilize all access agreements, easements and rights-of-way,
licenses, surface use agreements, and other approvals and authorizations now
held or hereafter obtained by Grantor in connection with exercising any of its
other Reserved Rights in this Section IV.A.;
          12. to mortgage, pledge, or secure financing by encumbering or
leasing, any of the Reserved Rights in this Section IV.A. in connection with
activities or operations of Grantor or its Affiliates on the Land or other real
property;
          13. to prohibit any stimulation of CBM or CMM or any other Oil and Gas
in any Workable Coal Bed (as defined in Exhibit “C” hereto) if determined by
Grantor (or any Affiliate, successor, transferee, licensee or assignee then
producing or having the right to produce the Reserved Minerals) to materially
impede production, give rise to material safety or regulatory concerns, or
materially increase the costs of mining operations with respect to the Reserved
Minerals; and
          14. to conduct any agricultural, commercial, industrial (including,
without limitation, coal-to-gas or liquefaction facilities, power plants,
subsurface commercial gas storage in zones, underground mine workings, or sealed
areas not containing commercially recoverable Oil and Gas, or sequestration of
carbon dioxide or other gases (provided that such sequestration is not designed
or reasonably expected to migrate into or communicate with zones or formations
in the Lands containing paying or commercial quantities of Oil and Gas hereby
conveyed to

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Grantee)), residential, recreational, or other surface or subsurface activities
or operations on or in the Land.
     B. Subject Property is Subordinate to Reserved Rights: Except to the extent
otherwise agreed in Development Plans (as defined in Section V) or as expressly
provided in Other Agreements, all Oil and Gas Interests and Associated Rights
assigned, conveyed, or transferred to Grantee by this Deed and Grantee’s
exercise of such rights and the subsequent conduct of all operations relating
thereto shall be junior, subordinated and subject to Grantor’s exercise of its
senior Reserved Rights in accordance with the terms and conditions of this Deed.
Grantee acknowledges that: (i) the timing for Oil and Gas development on some of
the Land may be delayed due to the exercise of the Reserved Rights by Grantor
and its lessees, successors and assigns, and (ii) some of the Land may be
unsuitable for Oil and Gas development for various reasons including unnatural
and unstable surface, inadequate subjacent or lateral support, restrictions by
governmental authorities pending completion of mining reclamation and
remediation, or other conditions arising out of the prior use of the Lands or
Grantor’s or its lessees’, successors’ or assigns’ exercise of the Reserved
Rights.
     C. Exercise of the Parties’ Rights: Except as expressly set forth in this
Deed and Exhibit “C”, in the event of an irreconcilable conflict or dispute
between the Parties following a good faith effort by the Parties to resolve any
such irreconcilable conflict or dispute, Grantor’s Reserved Rights shall be
senior to and have absolute priority over Grantee’s rights, title, and interests
set forth in this Deed and shall supersede any implied rights at common law or,
to the extent allowed by applicable law, statutory rights Grantee would
otherwise have. In exercising its Reserved Rights, and subject to the provisions
of this Deed (including, without limitation, as expressly set forth in Exhibit
“C”), Grantor shall have the right to suspend, mine-through or remove Grantee’s
Oil and Gas assets and operations whether now existing or hereafter developed
without qualification, limitation or restriction except as expressly set forth
in this Deed or Exhibit “C” hereto.
V. Cooperative Development Plans and Operations
     A. Development Plans: Prior to September 1st of each year after the date
hereof, Grantor’s and Grantee’s designated representatives, acting on behalf of
each Party and its lessees, successors, and assigns, shall meet and confer at a
mutually acceptable time and place in good faith for the purposes of exchanging
information as to reasonably foreseeable Oil and Gas, mining, or other
activities or operations on the Land and formulating mutually acceptable written
cooperative development plans (“Development Plans”) that will provide for the
orderly and safe development and production of both Reserved Minerals and Oil
and Gas from the Land, avoid or minimize future land use and operational
conflicts between the Parties, and establish an exclusive process for promptly
resolving all causes of action (at law or equity) and claims by one Party
against the other Party arising directly or indirectly from the Parties’
exercise of their respective rights and interests herein. From time to time,
upon the written request of either Party, Grantor and Grantee and their
respective lessees, successors, and assigns shall each designate in writing no
more than a total of three (3) representatives representing all Oil and Gas
Interests and three (3) representatives representing all Reserved Rights. The
designated representatives will be responsible for formulating all Development
Plans for the Oil and Gas

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Interests and Reserved Rights in each county in which this Deed is recorded.
Either Party may designate information disclosed during such meetings as
confidential and proprietary. Development Plans shall be executed by the
Parties, be promptly recorded in the appropriate government land records, and be
binding on Grantor and Grantee and their respective lessees, successors and
assigns. Absent an approved Development Plan as to any county, and provided that
the Parties have complied with the obligation in this Section V.A. to meet and
confer in good faith, all of the Parties’ respective operations conducted on or
with respect to the Land located in such county shall be subject to the terms
and conditions of this Deed and Exhibit “C”.
     B. Information Sharing:
          1. Subject to the terms and conditions set forth herein, on or before
December 31, 2007,, Grantor covenants and agrees to provide, and Grantee shall
be entitled to review, regional maps of coal drill hole data showing the depths
and thickness of mineable coal seams relating to the Oil and Gas Interests
(“Reviewable Data”). Grantee shall submit a site-specific request relating to
the Oil and Gas Interests to review the Reviewable Data in writing not less than
ten (10) business days in advance of the requested view date. Grantor shall make
the Reviewable Data available to Grantee at Grantee’s sole cost and expense
during normal business hours at Grantor’s offices in St. Louis, Missouri.
          2. Beginning on January 1, 2008, on or before March 31st of each year,
Grantee (as long as Grantee is not an entity whose primary business is coal
production) may submit a request for specific drill hole data (including gas
content and desorption information, but excluding coal quality information)
(each a “Drill Hole Data Request”) from one or more Grantee areas of interest
with respect to the Oil and Gas Interests (each an “AOI”) that Grantee is
reasonably likely to use for Oil and Gas exploration and development within the
next following twenty four (24) months, the location information for which shall
be presented on a coordinate system basis; provided, however, that Grantee only
may submit Drill Hole Data Requests for AOIs of not more than an aggregate
amount of 16,000 acres annually. The size of each AOI will be calculated based
on the number of anticipated wells in any given AOI multiplied by (i) forty
(40) acres per vertical well or (ii) one hundred sixty (160) acres per
horizontal well. Within ninety (90) days of a Drill Hole Data Request, Grantor
shall provide Grantee with all drill hole data for an area surrounding each AOI,
where such area is approximately five (5) times the size of the AOI (for
example, a fifty (50) vertical well program affects 2,000 acres (fifty
(50) wells multiplied by forty (40) acres per well); therefore, drill hole data
will be requested for a 10,000 acre area that includes, and is centered on, the
2,000 acre AOI).
          3. Beginning on January 1, 2008, on or before June 30th of each year,
Grantor (as long as Grantor is not an entity whose primary business is Oil and
Gas production) may submit a Drill Hole Data Request with respect to any AOI in
which Grantee is contemplating test drilling and has delivered a Drill Hole Data
Request pursuant to Section V.B.2 above. In the event that Grantor requests any
additional drilling and testing work while Grantee is in the process of
conducting its test drilling on any AOI, and Grantor’s request results in
incremental work or cost to Grantee, Grantor shall pay Grantee for such
incremental cost for such drilling and testing. Within ninety (90) days of
Grantee’s completion of such drilling and

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testing work, Grantee shall provide Grantor with the results of Grantee’s
standard testing program, in addition to the results of any incremental work
requested by Grantor.
          4. Grantee covenants and agrees that any Grantor Reviewable Data,
Books and Records or the results of any Drill Hole Data Request reviewed or
received by Grantee from Grantor shall be for Grantee’s sole use, and under no
circumstances shall any Affiliate of Grantee, whose primary business relates to
coal, be permitted to review or receive such Grantor Reviewable Data, Books and
Records or the results of any Drill Hole Data Request. In the event that any
officer, director, member or manager of any Affiliate of Grantee, whose primary
business relates to coal, also serves as an officer, director, member or manager
of Grantee, Grantee shall employ reasonable measures to ensure that such
officer, director, member or manager is not made privy to any Grantor Reviewable
Data, Books and Records or the results of any Drill Hole Data Request.
     C. Cooperative Development: Subject to the terms and conditions of this
Deed, Exhibit “C” and any applicable Development Plan, each Party agrees to
reasonably cooperate with, execute written consents or other agreements in favor
of, and not oppose or raise any objections to, the other Party’s permit
applications or requests for government or other approvals required for
activities or operations conducted pursuant to any rights granted or reserved
hereunder or in any approved Development Plan.
     D. Confidentiality: All information (whether written, electronic, or oral)
provided by the Parties to each other pursuant to the Deed or in connection with
the preparation of a Development Plan, including any Grantor Reviewable Data,
Books and Records or Drill Hole Data Requests, shall be maintained strictly
confidential as more fully set forth in a Confidentiality Agreement
substantially in the form attached hereto as Attachment “C-1” to Exhibit “C” to
the Deed (each a “Confidentiality Agreement”).
VI. Title to Subject Property and Disclaimers
     A. Conveyance with Limited Warranty: The Subject Property is being conveyed
by Grantor “as is” and “where is” and without any representations and warranties
of title, express or implied, except as otherwise expressly provided herein.
Except for Permitted Liens, Grantor warrants that title to the Subject Property
is free and clear of all claims, liens and encumbrances arising by, through or
under Grantor and any of its Affiliates who are predecessors-in-title to Grantor
(collectively, “Grantor’s Predecessors”). The term “Permitted Liens” means with
respect to any asset or assets that comprise the Subject Property, as the
context requires: (i) any lien securing taxes, assessments and governmental
charges not yet due and payable or being contested in good faith (and for which
adequate accruals or reserves have been established); (ii) any customary zoning
law or ordinance or any similar Legal Requirement; (iii) any customary right
reserved to any Governmental Authority to regulate the affected asset or assets;
(iv) any Lien (other than Liens securing indebtedness or arising out of the
obligation to pay money) which does not and shall not individually or in the
aggregate with one or more other Liens materially interfere with the right or
ability to own, use, enjoy, produce, mine, or operate the assets, or to convey
good title to the same, or materially detract from their value; (v) any inchoate
materialmen’s, mechanic’s, workmen’s, repairmen’s or other like liens arising in
the

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ordinary course of business relating to the assets; (vi) the reservations,
reverters and other rights granted or reserved herein; (vii) any Partial
Assignment Lease; (viii) any joint operating agreement, crude oil or gas sales
or purchase agreement, division order or Other Agreement; (ix) easements,
conditions, covenants, restrictions, servitudes, permits, rights-of-way, surface
leases, existing deed or water rights restrictions, historic preservation
restrictions and ordinances, building restrictions and ordinances, zoning,
planning and land use restrictions, and other rights and interests required for
surface operations, roads, railways, pipelines, powerlines, transmission and
transportation lines and other like uses, or for the common use of real estate,
rights-of-way, facilities and equipment; (x) all claims, liens and encumbrances
to the extent Grantee has received actual notice or record notice; (xi) any
third-party consents which are obtained and in force and effect on the date
hereof; (xii) all rights to consent by, required notices to, filings with, or
other actions by Governmental Authorities in connection with the sale and
conveyance of such asset or assets if the same are customarily sought subsequent
to such sale and conveyance; (xiii) all rights of reassignment upon surrender or
any expiration of any lease; (xiv) environmental and title defects as have been
waived by Grantee; (xv) Liens that Grantor shows by affirmative evidence have
been released as of June 20, 2007; (xvi) defects in the early chain of title
consisting of mere failure to recite marital status in a document or omissions
of successors of heirship proceedings, unless Grantee provides affirmative
evidence that such failure or omission has resulted in another person’s or
entity’s superior claim of title to the relevant asset; (xvii) defects that have
been cured by possession under applicable statutes of limitation for adverse
possession or prescription; (xviii) defects based solely on lack of information
in Grantor’s files; and (xix) all burdens on Oil and Gas production of which
Grantee has actual notice (as set forth on Exhibit “D” hereto) or record notice;
provided that “Permitted Liens” shall not include any Lien securing any debt,
encumbrance or monetary claim, or any pledge, deed of trust, mortgage, security
interest or similar lien, caused, created or allowed by Grantor or its
Affiliates, which could prevent or interfere with the conduct of the business of
Grantee. Classification of any Lien as a “Permitted Lien” shall not affect any
liability which Grantor may otherwise have under this Deed, including any
indemnity obligation hereunder.
     B. Grantor’s Authorization: Grantor represents that its representative
executing this Deed is duly authorized to execute this Deed and all other
related documents on behalf of Grantor. Grantor hereby assigns to Grantee, to
the extent assignable and without warranty of any kind, all covenants of title,
warranties and representations relating to the Oil and Gas Interests and
Associated Rights received by Grantor from Grantor’s Predecessors, however,
Grantor shall have no duty or obligation to assert any rights under such
covenants, warranties, or representations.
     C. Subsequent Conveyances: For no additional consideration, Grantor shall
hereafter execute and deliver to Grantee, or secure from Grantor’s Predecessors
or Affiliates, if necessary, a deed, assignment, and assumption with a warranty
of title by, through, or under Grantor, Grantor’s Predecessors or Affiliates, as
the case may be, but without any other warranties or representations, express or
implied, assigning, delivering and transferring to Grantee any Oil and Gas
Interests and/or Associated Rights that are determined after the date hereof to
be owned or held by Grantor or Grantor’s Predecessors as of the Effective Time.
All subsequent conveyances by Grantor or any of Grantor’s Predecessors or
Affiliates of such additional Oil and Gas Interests shall be made using this
Deed form unless otherwise mutually

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agreed by the Parties. However, Grantee agrees that Grantor shall have no duty
or obligation to convey, or to cause Grantor’s Predecessors or Affiliates to
convey, any Oil and Gas Interests acquired by Grantor or any of Grantor’s
Predecessors or Affiliates in the Lands after the Effective Time that are not
described on Exhibit “A” or depicted on Exhibits “A-1” through “A-    .”
     D. DISCLAIMERS: THE PARTIES AGREE THAT, TO THE EXTENT REQUIRED BY
APPLICABLE LAW, REGULATIONS OR ORDERS, TO BE OPERATIVE, THE DISCLAIMERS OF
WARRANTIES CONTAINED IN THIS SECTION VI. ARE “CONSPICUOUS” DISCLAIMERS. GRANTOR
EXPRESSLY DISCLAIMS ANY AND ALL REPRESENTATIONS OR WARRANTIES, EXPRESS OR
IMPLIED, WHATSOEVER WITH RESPECT TO THE SUBJECT PROPERTY EXCEPT AS OTHERWISE
PROVIDED IN THIS DEED. EXCEPT AS EXPRESSLY SET FORTH IN THIS DEED OR THE
ATTACHMENTS HERETO, WITH RESPECT TO THE PEABODY OIL AND GAS INTERESTS, PEABODY
MAKES NO, AND HEREBY DISCLAIMS, ANY REPRESENTATION OR WARRANTY WITH RESPECT TO
(1) ITS RIGHTS TO OR OWNERSHIP OF CBM OR CMM IN OR ASSOCIATED WITH THE PEABODY
OIL AND GAS INTERESTS; (2) THE QUANTITY OR QUALITY OF OIL AND GAS CONTAINED IN
THE OIL AND GAS INTERESTS; (3) ANY AND ALL GEOLOGIC, LAND OR TECHNICAL DATA AND
INFORMATION PROVIDED TO GRANTEE REGARDING THE OIL AND GAS INTERESTS; (4) THE
GEOLOGY OR OPERATIONAL CONDITIONS EXISTING OR TO BE ENCOUNTERED ON OR WITH
RESPECT TO THE LAND CONTAINING THE OIL AND GAS INTERESTS BUT NOT LIMITED TO,
ADEQUATE SUBJACENT OR LATERAL SUPPORT OF THE LAND OR ADJACENT LAND, OR THE
ENVIRONMENTAL CONDITION OF THE LAND, OR OTHER CONDITIONS ARISING OUT OF THE
PRIOR USE OF THE LAND; OR (5) GRANTOR’S RIGHTS TO OBTAIN ACCESS TO OR OVER THE
SURFACE OF THE LAND CONTAINING THE OIL AND GAS INTERESTS, TO UTILIZE THE SURFACE
OF SUCH LANDS IN CONNECTION WITH OIL AND GAS ACTIVITIES OR OPERATIONS
CONTEMPLATED BY THIS DEED, OR TO APPROPRIATE OR USE WATER PRODUCED IN CONNECTION
WITH CBM OPERATIONS.
VII. Oil and Gas Production
     If done in compliance with the provisions of this Deed and Exhibit “C”,
Grantee shall have the right to drill into, through, over, or under the Reserved
Minerals, and to fracture coal seams and surrounding rock to produce and vent
CBM from any coal seam owned, all or in part, by Grantor in, on, or underlying
the Land. In addition, subject to complying with the provisions of this Deed and
Exhibit “C”, Grantee shall also have the right to explore for, produce, market,
and sell and/or vent, flare or beneficially use CMM from inactive or sealed
underground mine workings, gob zones or voids created by the past, present, or
future mining of coal under the Land subject, however, to Grantor’s Reserved
Rights and all applicable Legal Requirements and Permits. Grantee, at its sole
cost and expense, shall obtain and fully comply with all Permits required to
discharge, process, or reinject water produced during Oil and Gas operations.
Except in connection with the exercise of Reserved Rights or as set forth in
Exhibit “C” hereto or in any Development Plan, Grantor shall not interfere with
Grantee’s legal, Permit, or regulatory obligations.

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VIII. Surface Rights
     A. Without in any way limiting Grantee’s common law or statutory rights (if
any) to use the surface overlying the Oil and Gas Interests arising from, or
incident or appurtenant to its ownership of the Oil and Gas Interests and
Associated Rights, with respect to any part of the surface estate of the Lands
as of June 8, 2007 that is or was owned by Grantor or its Affiliates, upon the
written request of Grantee, Grantor and each of its successors and assigns (as
the case may be) covenant and agree to execute and deliver, and Grantor agrees
to cause its Affiliates to execute and deliver, to Grantee (or any entity with
whom Grantee has entered into a joint operating agreement, pursuant to which
Grantee is participating or has a right to participate in the subject
operations) one or more Surface Use Agreements (each a “Surface Use Agreement”),
in the form previously agreed to by the Parties, under which Grantee shall have
the non-exclusive right to use so much of the surface of the Land on a
site-specific basis as is reasonable and necessary for the exploration, testing,
venting, flaring, use, production, processing, storage, and transportation of
Oil and Gas, or the installation of equipment, fixtures, improvements,
pipelines, and electrical lines associated with such operations. Each Surface
Use Agreement entered into pursuant to this Section VIII shall be executed and
delivered in recordable form, and upon execution and delivery of such Surface
Use Agreement, the Parties immediately shall record such Surface Use Agreement
in the recorder’s office or office for land records of the applicable county.
     B. Transfers; Relation to Surface Use Agreements:
          1. Prior to June 20, 2012, Grantor covenants and agrees that it shall
not sell, assign, or otherwise permanently transfer, and Grantor shall cause its
Affiliates not to sell, assign or otherwise permanently transfer, any interest
in the surface estate overlying the Oil and Gas Interests that is owned or
leased by Grantor or an Affiliate as of June 8, 2007 except by a recordable
instrument which makes such sale, assignment or other permanent transfer under
and subject to the obligation to enter into a Surface Use Agreement, consistent
with the terms hereof, with Grantee (or any entity with whom Grantee has entered
into a joint operating agreement, pursuant to which Grantee is participating or
has a right to participate in the subject operations); provided that such
obligation shall expire as to Grantor, its Affiliates, and/or Grantor’s
successors, assigns and transferees on such fifth anniversary. After June 20,
2012, Grantor or its Affiliates and/or Grantor’s successors, assigns and
transferees to the surface estate (as the case may be), shall be permitted to
sell, assign, transfer, or otherwise deal with any portion of such surface
overlying the Oil and Gas Interests which is not then subject to a valid Surface
Use Agreement, free of any obligation to Grantee to enter into a Surface Use
Agreement.
          2. If at any time Grantor or any Grantor Affiliate desires to transfer
an estate in the surface overlying the Oil and Gas Interests (then owned by
Grantee) that is owned or leased by Grantor or such Affiliate as of June 8, 2007
in a transaction which is less than a sale, assignment or other permanent
transfer, Grantor shall make, and Grantor shall cause its Affiliates to make,
such transfer under and subject to the duty to enter into a Surface Use
Agreement with Grantee.

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IX. Coal Mine Liability
     A. Coal Mine Conditions: Grantee shall have no duty or liability to clean
up or remediate any hazardous or toxic substance or other environmental
condition caused, produced, or generated during Grantor’s or Grantor’s
Predecessors’ or its successors’ coal mining operations, except as otherwise
agreed by the Parties in writing.
     B. Coal Mine Ownership: Grantor shall retain ownership of any existing vent
hole or well bore which penetrates any underground mine workings. For inactive
mines and sealed areas, to the extent permitted by applicable Legal
Requirements, upon posting the required bond for such well bore and a written
assignment and assumption of full responsibility by Grantee for such vent hole
or well bore, Grantee may commence using such well bore or vent for the capture
and sale of CBM or CMM. Thereafter, except as otherwise directed by Grantor in
writing, Grantee shall have sole responsibility for the plugging and abandonment
of any well bore or vent hole in accordance with applicable rules and
regulations.
X. Release of Grantor Liability
     Grantee acknowledges that Grantor has held rights, interests and estates in
the Lands for coal mining and other purposes and agrees that, except as provided
in Section XIII of this Deed, no causes of action, claims, or demands shall ever
be asserted by Grantee against Grantor or any of its Affiliates and their
respective members, directors, officers, employees, and agents for damages,
injunctive relief, or regulatory relief arising out of any air quality, surface,
subsurface, or water quality condition or occurrence, known or unknown, now
existing or hereafter occurring or discovered on, at, or under the Lands or
other properties and whether or not such condition or occurrence arises out of
or is the result of mining related activities on the Land or other properties
prior to the Effective Time.
XI. Assessments and Taxes
     A. Grantee’s Tax Obligations: Any Taxes due or assessed on or with respect
to the Subject Property or Oil or Gas production therefrom by a Governmental
Authority shall be pro-rated to the Effective Time and all such assessments,
charges, fees, or other Taxes that thereafter come due and payable with respect
to such Subject Property or the development, production, and sale of Oil and Gas
from the Lands and all lands pooled therewith shall be the sole responsibility
of Grantee.
     B. Grantor’s Tax Obligations: Grantor, as owner of the Reserved Rights,
shall be solely responsible for any Taxes assessed by a Governmental Authority
or that come due and payable with respect to such rights, the development,
production, and sale of Reserved Minerals from the Lands, and all fixtures,
improvements, or other assets thereon owned by Grantor prior to or after the
Effective Time hereof.

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XII. Liens
     Each Party shall take such actions as may be necessary to ensure that its
activities and operations do not result in any encumbrances or liens upon any
right, title, or interest held by the other Party.
XIII. Assumption and Indemnification
     A. Definitions: For purposes of this Deed, the following definitions apply:
          1. “Assumed Liabilities” means:
               a. All obligations and liabilities to the extent attributable to
actions occurring or conditions first occurring after the Effective Time under
or with respect to the Subject Property, including, without limitation, all
duties, obligations, and liabilities to the extent Grantee has received actual
notice or record notice, with respect to: (i) all rights-of-way, easements,
agricultural or other leases, surface access or use agreements, deed and plat
restrictions, reservations, severances, Legal Requirements, building and use
restrictions, or partitions, relating in any way to the Oil and Gas Interests or
Associated Rights; (ii) all rights of persons in possession, physical
conditions, encroachments and possessory rights which would be evident from an
inspection or a current survey of the Lands; (iii) operation of any title
curative or prescription statutes; and (iv) any buy-back or reversionary rights
or interests applicable to the Oil and Gas Interests or Associated Rights;
               b. All other obligations and liabilities to the extent
attributable to actions, events or conditions first occurring after the
Effective Time and relating to, arising out of or attributable to the ownership
or operation of the Subject Property after the Effective Time, except to the
extent such obligations or liabilities relate to, arise out of or are
attributable to any Reserved Right; and
               c. All risks and responsibilities associated with the conduct
after the Effective Time of Oil and Gas exploration, development, production,
treatment, compression, gathering, storing, transporting, marketing, and selling
operations on the Lands and lands pooled therewith.
          2. “Claims” means any and all causes of action (at law or in equity),
claims, damages, demands, liens, liabilities, losses, penalties, fines,
settlements, and costs or expenses (including, without limitation, reasonable
attorney’s and consultant’s fees, investigation costs, court costs and other
costs of defense).
          3. “Grantee Group” means Grantee and Grantee’s joint venturers and
Affiliates, and their respective partners, members, directors, officers,
employees, agents, representatives, contractors and subcontractors, lessees,
invitees, successors and assigns.
          4. “Grantee Indemnified Parties” means Grantee and Grantee’s
Affiliates, and their respective officers, directors, managers, employees,
agents, representatives, contractors

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and subcontractors, successors and assigns, and any person or entity claiming by
or through any of them.
          5. “Grantor Group” means Grantor and Grantor’s Affiliates, and their
respective partners, members, directors, officers, employees, agents,
representatives, lessees, and invitees.
          6. “Grantor Indemnified Parties” means Grantor and Grantor’s
Affiliates, and their respective officers, directors, managers, employees,
agents, representatives, contractors and subcontractors, successors and assigns,
and any person or entity claiming by or through any of them.
     B. Assumption by Grantee: In addition to the other Covenants, assumptions
and obligations of Grantee under this Deed and Exhibit “C” hereto, Grantee shall
assume and timely pay, discharge and perform the Assumed Liabilities.
     C. Assumption by Grantor: In addition to the other Covenants, assumptions
and obligations of Grantor under this Deed and Exhibit “C” hereto, except to the
extent constituting Assumed Liabilities or as otherwise provided in clause F.
below or in Exhibit “C” hereto, Grantor shall assume and timely pay, discharge
and perform all risks and responsibilities associated with its exercise of the
Reserved Rights.
     D. Indemnification by Grantee: Grantee shall protect, defend, indemnify and
hold harmless the Grantor Indemnified Parties from, against and with respect to
any and all Claims:
          1. of or by third parties made against any Grantor Indemnified Party
and relating to, arising out of or attributable to any Assumed Liabilities or
any act or omission of any member of the Grantee Group in connection with any
activities or operations on the Lands or the exercise of any rights, duties or
obligations under this Deed which result in personal injury, including death, or
real or personal property damage;
          2. relating to, arising out of or attributable to any Assumed
Liabilities;
          3. relating to, arising out of or attributable to the exercise by any
member of the Grantee Group of its rights with respect to the Subject Property
or on the Lands after the Effective Time;
          4. relating to, arising out of or attributable to the presence,
disposal, release or threatened release of any toxic or hazardous waste or
substance, solid waste, petroleum products, or drilling and mining wastes caused
by or resulting from any member of the Grantee Group’s exercise of the rights
granted to it under this Deed on, under, from or affecting the Lands, or ambient
air, soil, water, vegetation, personal property, persons or animals thereon,
including Claims based upon personal injury, including death, and damages to
real or personal property;
          5. relating to, arising out of or attributable to any act or omission
of any member of the Grantee Group in connection with the conduct of Oil and Gas
operations under

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this Deed, Exhibit “C” hereto or any approved Development Plan which results in
personal injury, including death, or damages to real or personal property;
          6. relating to, arising out of or attributable to any violation of any
Legal Requirement or Permit applicable to the conduct of Oil and Gas operations
by any member of the Grantee Group on the Lands and pursuant to this Deed,
Exhibit “C” hereto or any approved Development Plan; or
          7. relating to, arising out of or attributable to any breach by any
member of the Grantee Group of any covenant contained in or other violation of
this Deed, Exhibit “C” hereto or any approved Development Plan.
     E. Indemnification by Grantor: Grantor shall protect, defend, indemnify and
hold harmless the Grantee Indemnified Parties from, against and with respect to
any and all Claims:
          1. of or by third parties made against any Grantee Indemnified Party
and relating to, arising out of or attributable to any act or omission of any
member of the Grantor Group in connection with the exercise of the Reserved
Rights which results in personal injury, including death, or damage to real or
personal property;
          2. except to the extent constituting an Assumed Liability or as
provided in clause F. below or in Exhibit “C” hereto, relating to, arising out
of or attributable to any act or omission of any member of the Grantor Group in
connection with the exercise of the Reserved Rights which results in personal
injury, including death, or damage to real or personal property;
          3. relating to, arising out of or attributable to the presence,
disposal, release or threatened release of any toxic or hazardous waste or
substance, solid waste, petroleum products, or drilling or mining wastes caused
by or resulting from any member of the Grantor Group’s exercise of the Reserved
Rights on, under, from or affecting the Lands, or ambient air, soil, water,
vegetation, personal property, persons or animals thereon, including Claims
based upon personal injury, including death, or damages to real or personal
property;
          4. relating to, arising out of or attributable to any violation of any
Legal Requirement or Permit applicable to the exercise of the Reserved Rights by
any member of the Grantor Group; or
          5. relating to, arising out of or attributable to any breach by any
member of the Grantor Group of any covenant contained in or other violation of
this Deed, Exhibit “C” hereto or any approved Development Plan.
     F. Mutual Indemnification: Except as otherwise provided in Exhibit “C”
hereto, each Party shall protect, defend, indemnify and hold harmless the other
Party’s Indemnified Parties from, against and with respect to any and all Claims
relating to, arising out of or attributable to any gross negligence or willful
misconduct of the indemnifying Party. For avoidance of doubt, it is the
intention of the Parties that the sole and exclusive remedies for any Claims
suffered or incurred by any Grantee Indemnified Party relating to the temporary
or permanent suspension of those of Grantee’s Oil and Gas operations that are
located on or within

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(i) a Mine-Through Area (as hereinafter defined) or (ii) Lands covered by a
Notice of Subordination, due to any member of the Grantor Group’s exercise of
the Reserved Rights are set forth in Exhibit “C” hereto.
     G. No Indemnity for Certain Conduct: Notwithstanding anything to the
contrary in this Section XIII, neither Party shall have any indemnification
obligation to the other Party’s Indemnified Parties for their own negligence,
recklessness or willful misconduct. In the event of any such negligence,
recklessness or willful misconduct the respective rights and duties of the
Parties shall be governed by the substantive law of the jurisdiction in which
such negligence, recklessness or willful misconduct occurred.
XIV. Miscellaneous
     A. Deed Interpretation: In the event of a conflict between the provisions
of this Deed and Exhibit “C”, the provisions of Exhibit “C” shall control. If
there is a conflict between the provisions of this Deed (including Exhibit “C”)
and a Development Plan executed by the Parties or their respective successors
and assigns, the provisions of the Development Plan with respect to specific
operational matters shall control.
     B. Assignment and Conveyance: If a Party assigns, conveys, leases, sells,
donates or otherwise transfers all or any part of the rights, title, or
interests granted or reserved herein, all Covenants in this Deed including
Exhibit “C” pertaining to such rights, title, or interests shall be covenants
running with the Land in perpetuity and shall be fully binding on such Party’s
lessees, successors, assigns, or grantees; provided, however, any conveyance, or
transfer of such rights, title, or interests shall relieve and discharge the
grantor or assignor thereof from any liability for performance of such terms,
conditions, duties, and restrictions that accrue after such conveyance but only
to the extent of the specific rights conveyed or transferred. Concurrently with
assigning, conveying, leasing, selling, or transferring all or any part of the
rights, title, or interests granted or reserved in this Deed, the transferring
Party agrees to obtain from each lessee, successor, assignee, or grantee written
ratification of the obligation to comply with and be bound by Covenants of this
Deed (including, without limitation, those provisions with respect to
confidentiality), and to provide a written designation of representative as
required under Section V.A. Such requirement to obtain written ratification to
comply with and be bound by all terms, conditions, and covenants of this Deed
shall run with the land and bind all subsequent lessees, successors, assigns,
and grantees of the Parties.
     C. Severability: Whenever possible, each provision of this Deed will be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Deed is held to be prohibited by or invalid under
applicable law, such provision will be ineffective only to the extent of such
prohibition or invalidity, without invalidating the remainder of such provision
or the remaining provisions of this Deed.
     D. Headings: All descriptive headings are provided for reference only and
shall not affect the construction or interpretation of this Deed.

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     E. Execution and Counterparts: This Deed will be executed in counterparts
all of which are identical, except that to facilitate recordation, in certain
counterparts hereof portions of Exhibit “A” which contain specific descriptions
of real and personal properties located in the recording jurisdiction in which
the particular counterpart is to be recorded are included, and other portions of
Exhibit “A” are included by reference only. All of such counterparts together
shall constitute one and the same instrument. Complete copies of the Deed
containing the entire Exhibit “A” have been retained by Grantor and Grantee.
Grantor and Grantee have executed, or may execute, certain separate assignments
of individual Oil and Gas leases or interests which are included in the Oil and
Gas Interests, for filing with and approval by government entities or agencies
who are lessors of such leases, or who administer such leases on behalf of such
lessors. Such separate assignments are on forms prescribed or suggested by said
governmental entities and agencies, evidence the conveyance and assignment of
the applicable Oil and Gas Interests covered thereby, and are not intended to
modify and shall not modify any of the terms and conditions contained herein.
Such separate assignments shall be deemed to contain all of the terms and
provisions hereof, as fully and to all intents and purposes as though the same
were set forth in such separate assignments.
     F. Entire Agreement: This Deed, together with the exhibits attached hereto,
constitutes the entire agreement of the Parties relating to the subject matter
of this Deed and supersedes all previous agreements, promises, representations,
understandings, and negotiations, whether written or oral, among the Parties
with respect to the subject matter hereof.
     G. No Waiver: The failure of either Party to enforce at any time or for a
period of time, any term or condition of this Deed, including the exhibits
attached hereto, shall not be construed as a waiver of the same or the right
thereafter to enforce such term or condition.
     H. Incorporation: The provisions and Covenants contained in this Deed,
including without limitation those contained in Exhibit “C”, shall be deemed to
touch and concern the Land and shall be deemed to be a covenant running with and
burdening the Land in perpetuity.
     I. Rule Against Perpetuities: If a court of competent jurisdiction shall
hold that the Rule Against Perpetuities or any similar Legal Requirement applies
to any transfer of an interest contemplated herein, any right to receive, and
obligation to make, such transfer shall terminate on the last day of the period
allowed for vesting under such rule or other Legal Requirement, such that the
transfer shall thereby be deemed valid under the rule or Legal Requirement.

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     IN WITNESS WHEREOF, this Oil and Gas Deed, Assignment, and Assumption has
been executed by the Parties as of the Effective time set forth above.

                  CNX GAS COMPANY LLC    
 
           
 
  By:        
 
           
 
  Name:        
 
           
 
  Title:        
 
           
 
                [PEABODY ENTITIES]    
 
           
 
  By:        
 
           
 
  Name:        
 
           
 
  Title:        
 
           

[notarizations conforming to each state to be added]

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EXHIBIT C
TO
OIL AND GAS DEED, ASSIGNMENT, AND ASSUMPTION (“DEED”)
EFFECTIVE APRIL 1, 2007
BETWEEN
PEABODY ENTITIES (“GRANTOR”)
AND
CNX GAS COMPANY LLC (“GRANTEE”)
     The Deed to which this Exhibit “C” is attached and made a part contemplates
Grantor’s and Grantee’s execution and implementation of one (1) or more written
Development Plans to provide for the orderly conduct of Grantee’s Oil and Gas
operations and the exercise of Grantor’s Reserved Rights on and with respect to
the Land. The procedure for preparing a Development Plan and its general
elements are set forth in this Exhibit “C”. If the Parties are unable to agree
upon a Development Plan and there is a conflict between Grantor’s and Grantee’s
respective operations on the Lands, the sole remedies for resolving such
conflict are provided in the Deed and this Exhibit “C”. All capitalized terms in
this Exhibit “C” shall have the meanings set forth in the Deed unless otherwise
expressly provided herein.
     I. Cooperative Development. As part of Grantor’s agreement to accept, and
Grantee’s willingness to pay, the consideration for executing the Deed, the
Parties agree to use their respective reasonable and good faith efforts
consistent with the provisions of this Exhibit “C” to enter into mutually
acceptable Development Plans. Unless otherwise agreed in a Development Plan, the
following is the exclusive procedure for resolving all conflicts between
Grantor’s and Grantee’s respective operations on the Lands and, if applicable,
to compensate Grantee for any and all causes of action, claims (at law or
equity), damages, or losses resulting from Grantor’s exercise of its senior
Reserved Rights set forth below.
     A. Exchange of Information and Preparation of Development Plans. Prior to
submitting any applications for Permits for operations on the Land conducted
pursuant to the rights granted or reserved under the Deed, each Party shall
provide advance written notice to the other Party advising of proposed
operations (“Notice of Proposed Operations”). Thereafter, from time to time, the
Parties’ designated representatives shall meet and confer (prior to September
1st each year) to (i) identify areas in which Grantee’s planned Oil and Gas
operations may conflict with, impede or otherwise affect Grantor’s exercise of
its Reserved Rights, (ii) exchange information regarding existing or reasonably
foreseeable mineral development or other activities or operations on the Land,
and (iii) formulate one or more mutually acceptable written Development Plans to
provide for orderly and safe mineral development on the Lands, avoid future
operational conflicts, and minimize potential damage claims arising under this
Exhibit “C”. Each Development Plan shall include detailed work schedules,
operating procedures, site maps for all proposed operations, and any other terms
and conditions agreed to by the Parties. In each Development Plan, the Parties
will attempt to identify areas on the Lands which will be: (A) joint use areas;
(B) exclusive surface areas for mining and other operations

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conducted pursuant to the Reserved Rights; (C) exclusive surface areas for wells
and equipment, and other related assets (collectively, “Oil and Gas Assets”);
and (D) access and easement areas (in which Grantee will be permitted to
exercise its nonexclusive surface rights granted under the Deed as part of the
Associated Rights). All information (whether written, electronic, or oral)
provided by the Parties to each other pursuant to the Deed or in connection with
the preparation of a Development Plan, including any Grantor Reviewable Data,
Books and Records or Drill Hole Data Requests, shall be maintained strictly
confidential as more fully set forth in a Confidentiality Agreement
substantially in the form attached hereto as Attachment “C-1” (each a
“Confidentiality Agreement”).
     1. A Notice of Proposed Operations must be provided during the planning
stage for any contemplated future operations or activities, and in any event at
least thirty (30) days in advance of the date the proposing Party files an
application for or otherwise takes any action to obtain any Permit with respect
to such proposed operations or activities so as to maximize the Parties’ ability
to prepare, in a timely manner, a written Development Plan.
     2. In order to facilitate delivery of a Notice of Proposed Operations, not
more than thirty (30) days following the effective date of any assignment,
conveyance, lease, sublease, or transfer by either Party to a third party of an
Oil and Gas Interest, right to Reserved Minerals, or title to the surface of the
Land, such Party shall notify the other of the name, address, and phone number
of the transferee and provide a copy of the transfer instrument. Neither Party
will be obligated to deliver a Notice of Proposed Operations to the other
Party’s successors, assigns or other transferees if the non-transferring Party
was not notified of the transfer. All notices shall be made in writing and
delivered via US mail, return receipt requested, or by private courier service.
Notwithstanding anything herein or in the Deed to the contrary, neither Party
shall assign, convey, lease, sublease or transfer any Oil and Gas Interest or
right to any Reserved Minerals unless the assignee, lessee or transferee shall
have executed a Confidentiality Agreement.
     3. All meetings shall be by conference call or in person at mutually agreed
upon dates, times, and places. Each Party shall bear its costs and expenses for
participating in or attending conference calls or meetings. The Parties and
their respective employees, agents, and consultants shall deal with each other
reasonably and in good faith. At least three (3) business days prior to a
scheduled meeting, each Party shall, to the extent available, provide the other
Party with copies of information including, without limitation, maps and surveys
relating to its proposed plans and general locations of access routes, utility
corridors, facilities, and operations on those portions of the Lands that are
the subject matter of the meeting. Each Party shall provide sufficient
information to enable the other Party to understand and evaluate the duration
and extent of the potential impacts of the proposed operations. The Parties
shall cooperate with each other in preparing a Development Plan based on the
information disclosed and any understandings reached during the meetings.
Grantor, however, may withhold its

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consent to any term of a proposed Development Plan if Grantor believes such term
will materially interfere with or impede the exercise of its Reserved Rights or
result in either Party having to comply with material safety, environmental
(including post mining reclamation), or regulatory requirements relating to the
conduct of multiple mineral development or other operations on the Land.
     4. At least thirty (30) days prior to filing any application for a Permit
to conduct Oil and Gas operations on the Lands (such as seismic surveys,
drilling, or constructing any powerlines, pipelines or roads), Grantee shall
consult with Grantor, and provide information for Grantor’s confidential review,
regarding its proposed operations. Except as otherwise expressly provided below,
Grantee shall obtain Grantor’s written consent as to the location of all Oil and
Gas Assets unless such locations are specifically identified in an existing
approved Development Plan; provided, however, that Grantor’s written consent
shall not be required for Lands in which Grantor does not own or control the
surface rights, or which contains Reserved Minerals that are not reasonably
likely to be commercially mined or extracted within fifteen (15) years of the
proposed commencement date of Grantee’s Oil and Gas operations (such
determination being made based upon reasonable assumptions and industry practice
in effect as of the commencement date of the proposed Oil and Gas operations by
Marshall Miller & Associates, or its successor, unless otherwise determined by
the mutual agreement of the Parties at any Development Plan meeting; provided,
however, that in the event that the original Grantor and Grantee no longer
retain any interest with respect to the Deed to which this Exhibit “C” is
attached, the entity which is not instigating the dispute shall have discretion
with respect to who shall make such determination). Prior to or at each meeting,
Grantee shall provide Grantor with copies of: all available Permit applications,
including maps and survey plats, and site specific plans and locations for Oil
and Gas Assets proposed to be constructed or placed on the Lands. Any of such
materials or information not provided at the meeting will be promptly delivered
to Grantor upon Grantee’s receipt, including, without limitation, copies of all
Permits and approvals and any bonds, letters of credit, or financial assurances
required under applicable laws, rules, regulations, or Permits. If Grantee’s
proposed operations are reasonably expected to materially conflict with or
impede Grantor’s current or future operations (in the case of future operations,
only to the extent identified in a Development Plan) or result in material
safety, environmental or regulatory issues with respect to conducting multiple
operations on the Lands, the Parties shall, in good faith, use all reasonable
efforts to resolve the conflict prior to commencement of any Oil and Gas
operations on the Lands. If Grantor is preparing Permit applications with
respect to a particular area on the Land, upon Grantee’s written request,
Grantor shall provide Grantee for its confidential review copies of maps
depicting all proposed mine site and facility locations, and, when and as
received, relevant portions of all Permits and approvals (including any maps)
indicating the location of all mining and other operations to be conducted by
Grantor on the Lands pursuant to the Reserved Rights.

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     5. If the Parties are unable to resolve the dispute with respect to
Grantee’s proposed operations pursuant to Section I.A.4., the dispute shall be
settled by arbitration administered by a single arbitrator, with at least ten
(10) years of natural resources and mineral extraction experience. The
arbitration shall be conducted pursuant to the Commercial Arbitration Rules and
Mediation Procedures of the American Arbitration Association; provided, however,
that the Commercial Mediation Procedures provided for therein shall not apply
unless the parties to the arbitration mutually agree. The final decision by the
arbitrator shall be consistent with the provisions of this Exhibit “C”. Any
arbitral decision or award may be enforced against the Parties or their assets
wherever they may be located and a judgment on an arbitral award may be entered
by any court having jurisdiction thereof and, for such purpose, each Party
hereby submits to the jurisdiction of any such court and waives any objections
based on inconvenient forum or lack of jurisdiction.
     B. General Operating Provisions.
     1. Each Party and its employees, contractors, and agents shall (i) take all
necessary and appropriate action and measures to minimize safety, health, and
environmental hazards and risks associated with its operations conducted in or
adjacent to areas of the Lands used in common by the Parties, and (ii) use all
reasonable efforts to manage, cooperate with, and coordinate its activities with
the other Party so as to be in compliance with all applicable agreements, laws,
rules, regulations, and Permits. If there is a conflict in the Parties’
respective standard operating procedures for active or planned operations in a
common area on the Lands, then, unless otherwise prohibited by applicable law or
Permits, Grantee shall comply with Grantor’s operating procedures and
requirements.
     2. Each Party shall abstain from committing waste, causing unnecessary
damage, or discarding or disposing of any materials, supplies, or litter on the
Lands.
     3. Each Party shall conduct its operations on the Lands in accordance with
the highest standard practices in its industry and shall maintain all equipment,
facilities, infrastructure, roads, storage areas, utilities, and other
improvements in good working and operating condition.
     4. On Lands in which Grantor has no surface ownership or control or the
Reserved Minerals are not reasonably likely to be commercially mined or
extracted within fifteen (15) years of the proposed commencement date of
Grantee’s Oil and Gas operations (such determination being made by Marshall
Miller & Associates based upon reasonable assumptions and industry practice in
effect as of the commencement date of such proposed Oil and Gas operations),
Grantee shall properly post and mark all active construction and drilling
operations in compliance with applicable mining and oil and gas Legal
Requirements, Permit requirements, and surface use agreements. With respect to

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all operations conducted on Lands other than those described above, each Party
shall enclose with an adequate fence all equipment and open excavations, and
immediately install cattle guards or steel gates upon cutting a fence.
     5. Each Party, at its sole cost and expense, shall fully comply with all
applicable environmental laws, regulations, rules, orders, or Permits relating
to the conduct and completion of all investigations, studies, sampling and
testing, and all remedial and other actions necessary to clean up or remove any
toxic or hazardous substance or any solid waste, including, but not limited to,
petroleum products and all drilling and mine waste on, under, from, or affecting
the Lands, and caused in any manner by the rights granted or reserved in this
Deed. The costs and expenses associated with the aforementioned activities and
operations shall include, without limitation, all reasonable attorneys’ and
consultants’ fees, investigation and laboratory fees, court costs, and
litigation expenses relating to any investigations, actions, claims, or
enforcement proceedings arising under this Section I.B.5.
     C. Specific Provisions Relating to Oil and Gas. In addition to other
requirements set forth herein, Oil and Gas operations on or with respect to the
Lands shall be conducted by Grantee in accordance with the following standards:
     1. Surface access and use of the surface of any Lands owned or controlled
by Grantor in connection with Grantee’s Oil and Gas operations shall be
conducted in accordance with the terms and conditions of a mutually acceptable
Surface Use Agreement and Development Plan entered into between the Parties.
     2. To the extent reasonably practicable, all pipelines will be buried to a
depth greater than one foot (1’) below plow depth on tillable land and two feet
(2’) below surface on non-tillable land.
     3. Unless otherwise set forth in a Development Plan, Grantee shall use its
reasonable best efforts to ensure that all vertical wells and test holes on the
Lands will be drilled in such manner as not to deviate by more than four feet
(4’) from vertical to a point of 800’ feet below the surface of the Lands, and
Grantee shall perform a downhole survey to a depth of 800’ in any well drilled
which, despite Grantee’s use of its reasonable best efforts, deviates by more
than four feet (4’) from vertical at such depths, and provide Grantor with a
copy of the survey. In the case of the horizontal well, Grantee shall perform a
downhole survey of the vertical hole and all laterals and provide Grantor with
copies thereof. Grantee shall provide Grantor with gamma ray data or other
information demonstrating where all wells drilled on the Lands intersect with
Workable Coal Beds (as defined below).
     4. Without Grantor’s prior written consent, Grantee shall not permit any
infiltration of Oil or Gas, brine, water, or other fluids into any “Workable

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Coal Bed” except by way of hydraulic “frac” or stimulation treatment for the
improvement of Oil and Gas operations. A detailed description of the procedure
for completing a hydraulic “frac” or stimulation treatment must be set forth in
an approved Development Plan. The term “Workable Coal Bed” shall mean any seam
of coal which is either: (i) twenty six inches (26”) or more in thickness, or
(ii) reasonably likely to be commercially mined or extracted within ten
(10) years of the proposed commencement date of such Oil and Gas operations
(such determination being made by a nationally recognized mining engineering
firm selected by the Parties) based upon reasonable assumptions and industry
practice in effect as of such commencement date. Within thirty (30) days after
completing a frac or stimulation of a coal seam (or such earlier date as may be
required by applicable law), Grantee shall furnish Grantor with a written
description of the actual stimulation procedure used including, but not limited
to, the fluid injection rate, the injection pressure, the volume and components
of fluid injected, and the amount and components of the proppants, if any.
     5. Except with respect to Lands which do not contain a Workable Coal Bed,
all abandoned vertical wells, vertical segments of any horizontal wells not
completed in a Workable Coal Bed, and dry holes will be plugged by setting an
adequate permanent plug 100’ below the lowest Workable Coal Bed drilled. All
horizontal wells completed in any Workable Coal Bed shall be drilled, completed,
plugged, and abandoned in accordance with all applicable legal, regulatory, and
Permit requirements as well as Grantor’s then-current drilling and plugging
procedures, consistent with industry customs and practice related to mine
safety, to assure the future safe conduct of all mining operations.
     6. Grantee shall pay any third party surface owner, lessee, licensee, or
permittee of the Land for actual damages to the surface, timber, growing crops,
fences, livestock, and any other fixtures or improvements thereon arising from
any Oil and Gas operations in accordance with applicable agreements, laws, and
regulations. Any other payment obligations relating to access on and over and
use of the Land in which Grantor owns or controls all or part of the surface
shall be set forth in the applicable Surface Use Agreement.
     7. With respect to all Oil and Gas operations conducted by or on behalf of
Grantee on Lands which are covered by any mining and related permits held by
Grantor, Grantee shall (A) ensure that such operations do not adversely impact,
violate or cause Grantor to be in violation of any mining and related permits,
(B) ensure such operations comply with all applicable Legal Requirements
including any applicable coal mining Legal Requirements, and with Grantor’s
operating standards and procedures applicable to such area, and (C) promptly
abate or remediate any notice of violation, notice of noncompliance or similar
notice issued by a Governmental Authority directly or indirectly based upon or
relating to such Oil and Gas operations. In the event that any specific Oil and
Gas operations conducted by or on behalf of Grantee result in any violation of
Grantor’s mining and related permits, or the issuance to Grantor of any notice
of

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violation, notice of noncompliance or similar notice, Grantee shall, immediately
upon the written request of Grantor, suspend such specific Oil and Gas
operations that have resulted in the permit violation or issuance of notice(s),
until such permit violations, notices of violation, notices of noncompliance or
similar notices have been fully abated or remediated as required by applicable
Legal Requirements and otherwise to the reasonable satisfaction of Grantor;
provided, however, notwithstanding any such request, Grantee shall not be
required to suspend such specific Oil and Gas operations if such suspension
would (i) result in a violation of any Legal Requirement, (ii) make it
impracticable to abate or remediate any such permit violations, notices of
violation, notices of noncompliance or similar notices, or (iii) result in an
imminent threat of harm to the environment or to the health, safety and welfare
of those working on such specific Oil and Gas operations.
     D. Notice of Subordination. Grantor shall provide Grantee no less than one
hundred twenty (120) days’ prior written notice (“Notice of Subordination”) of
its intent to conduct material field operations on any areas within the Lands in
which Grantee is then conducting Oil and Gas operations. Separate Notices of
Subordination shall be submitted by Grantor to Grantee for Category I Lands and
Category II Lands. The Notice of Subordination shall include: (i) the location
and commencement date of Grantor’s operations; (ii) a description of actions
Grantee must take in advance of Grantor’s operations (examples include, without
limitation, temporarily or permanently shutting in or plugging any well or
moving, relocating, or removing any of Grantee’s Oil and Gas Assets (such as
powerlines and pipelines) from the area or path of Grantor’s operations)
(collectively, “Subordination Actions”); and (iii) the date by which Grantee
must complete all Subordination Actions. Grantee may be entitled to be
compensated or reimbursed by Grantor for taking the Subordination Actions
pursuant to and under the conditions set forth in Section I.F. Grantor covenants
that (x) no Notice of Subordination shall be premature in relation to the time
that Grantor’s subject operations are scheduled to take place and that each
Notice of Subordination shall be reasonably necessary for timing and scope of
the Grantor’s operations that will necessitate the Subordination Actions and
(y) if Grantor’s plans that precipitated any such Notice of Subordination change
or are delayed it shall promptly notify Grantee whereupon Grantor and Grantee
shall meet and confer and determine whether and to what extent Grantee may delay
or postpone the corresponding Subordination Actions. GRANTEE ACKNOWLEDGES THAT
TIME IS OF THE ESSENCE WITH RESPECT TO COMPLETION OF THE SUBORDINATION ACTIONS
SET FORTH IN THE NOTICE OF SUBORDINATION, THAT GRANTOR COULD BE DAMAGED
IRREPARABLY IF ANY SUCH SUBORDINATION ACTIONS ARE NOT PERFORMED IN A TIMELY
MANNER AND IN ACCORDANCE WITH GRANTOR’S SPECIFIC TERMS, AND THAT THE REMEDIES AT
LAW WOULD NOT BE ADEQUATE TO COMPENSATE GRANTOR. ACCORDINGLY, CONSISTENT WITH
THE PROVISIONS OF SECTION II.C., GRANTOR MAY SEEK TO ENFORCE SPECIFICALLY THE
TERMS OF THIS EXHIBIT “C” IN ADDITION TO ANY OTHER REMEDY TO WHICH IT MAY BE
ENTITLED, AT LAW OR IN EQUITY. GRANTEE HEREBY EXPRESSLY WAIVES ANY DEFENSE THAT
A

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REMEDY AT LAW OR MONETARY DAMAGES ARE ADEQUATE AND AGREES THAT GRANTOR WILL BE
ENTITLED TO SEEK SPECIFIC PERFORMANCE AND/OR AN INJUNCTION OR INJUNCTIONS TO
ENSURE THAT GRANTEE TIMELY PERFORMS ITS OBLIGATIONS WITH RESPECT TO ALL
SUBORDINATION ACTIONS. IN ADDITION TO ANY SPECIFIC PERFORMANCE OR INJUNCTIVE
RELIEF, GRANTOR SHALL BE ENTITLED TO RECOVER ALL REASONABLE ATTORNEYS’ FEES,
EXPERT WITNESS CHARGES, AND ALL OTHER OUT OF POCKET LITIGATION RELATED COSTS AND
EXPENSES INCURRED AS PROVIDED HEREIN, IF GRANTOR IS THE SUBSTANTIALLY PREVAILING
PARTY.
     E. Grantee’s Development of Category I Lands.
     1. The Parties hereby agree that as of the Effective Time certain areas of
the Lands have been designated as “Category I Land” on maps delivered to Grantee
concurrently with this Deed (collectively, “Land Status Maps”). All areas of the
Land not designated as Category I Land are hereby designated as “Category II
Land”; provided, however, that Grantor may from time to time designate certain
Category II Land as Category I Land. In the event that Grantor, or any successor
to Grantor, desires to designate certain Category II Land as Category I Land,
Grantor shall notify Grantee of such designation (each such notification a
“Category I Land Notification”) on or before September 1 of any calendar year.
Each such Category I Land Notification shall be effective on January 1 of the
calendar year immediately following the calendar year in which such Category I
Land Notification was delivered to Grantee; provided, however, that in the event
Grantor, or any successor to Grantor shall transfer any interest in any Category
II Land to any entity which is not an Affiliate of Grantor, no Category I Land
Notification with respect to such transferred parcel or tract shall be effective
until (a) in the case of Category II Land to be converted into Category I Land
which is above drainage levels in the Appalachian Basin, above the top of the
Herrin Coal Seam in Illinois, Indiana and Kentucky, above the top of the Menefee
Formation in New Mexico, above the base of the Wasatch Formation in Wyoming, or
less than a depth of 350 feet below the surface, whichever is deeper, two
(2) years following the otherwise applicable January 1 and (b) in the case of
Category II Land to be converted into Category I Land which is below drainage
levels in the Appalachian Basin, below the top of the Herrin Coal Seam in
Illinois, Indiana and Kentucky, below the top of the Menefee Formation in New
Mexico, below the base of the Wasatch Formation is Wyoming, or more than a depth
of 350 feet below the surface, whichever is deeper, five (5) years following the
otherwise applicable January 1. Subject to the foregoing, Grantor may hereafter
designate the following Category II Land as Category I Land: (i) any Land
identified in Grantor’s then current five (5) year Strategic Plan and reasonably
estimated to be mined (or reclaimed or remediated) within fifteen (15) years of
the date of such Strategic Plan; (ii) any Land within planned or current project
development areas (such as residential, commercial, or industrial developments
(including Btu conversion facilities or power plants) identified in Grantor’s
then

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current five (5) year Strategic Plan that are both designated for uses
incompatible with Oil and Gas operations and estimated to be developed within
fifteen (15) years of the date of such Strategic Plan; and (iii) any Oil and Gas
Interests subsequently acquired by Grantee within Category I Land (including,
without limitation, “window tracts”) as depicted on the Land Status Maps. The
term “Strategic Plan” shall mean all existing and future mining operations and
other business activities being conducted or developed under Grantor’s then
current five (5) year budget. Maps depicting Category I Lands will be included
in agreed upon Development Plans, which maps shall be updated by Grantor at
least annually.
     2. The development and operation of Oil and Gas Assets by Grantee on or
within any Lands that, at the time of spudding a well or the construction or
installation of Oil and Gas Assets other than wells, has been properly
designated Category I Land by Grantor, will be at Grantee’s sole risk.
     3. Notwithstanding anything foregoing to the contrary, Grantor shall make
all transfers of Category II Lands in good faith, and under no circumstances
shall Grantor make a transfer of Category II Lands to any third party or
Affiliate, the principal purpose of which transfer is to unnecessarily interfere
with Grantee’s ability to develop such Category II Lands in accordance with the
terms of the Deed or this Exhibit “C”. In the event that Grantor breaches the
requirements of this Section I.E.3., Grantee’s remedy for such breach shall be
limited to seeking injunctive relief and the prevailing party in any proceeding
for injunctive relief shall be entitled to payment of its reasonable attorneys’
fees by the non-prevailing party.
     F. Grantee’s Development of Category II Lands. If Grantee develops, owns,
or holds interests in Oil and Gas Assets on Category II Land, Grantor shall have
the right to request that Grantee move, relocate, remove, or shut-in any such
Oil and Gas Assets on a temporary or permanent basis in the event and to the
extent Grantor reasonably believes such Oil and Gas Assets may or will:
(i) materially interfere with its Reserved Rights, (ii) materially impede
permitting efforts in connection with its Reserved Rights, or (iii) create a
material safety or environmental hazard in connection with the exercise of its
Reserved Rights. Grantor’s request shall be in the form of a Notice of
Subordination submitted to Grantee pursuant to Section I.D. As directed in such
Notice, Grantee shall promptly take all necessary and appropriate action to
temporarily or permanently move, relocate, suspend, shut-in, or abandon any
existing Oil and Gas Assets or operations producing and selling Oil and Gas from
the Lands or lands pooled therewith, and Grantor shall compensate Grantee
therefore in accordance with this Section I.F. Grantee’s sole and exclusive
remedy for such removal, relocation, delay, suspension, shut-in or interruption
of, or any other losses (including lost production) relating to, any or all of
Grantee’s interests in such Oil and Gas Assets or Oil and Gas production shall
be monetary compensation as set forth in this Section I.F and determined by a
nationally recognized petroleum engineering firm selected by mutual agreement of
the Parties (“Engineer”) whose fees shall be paid by Grantor. Grantor shall have
no obligation to

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pay any compensation whatsoever to Grantee for causes of action, losses
(including lost production), claims, or demands relating to or based upon any
Oil and Gas Assets or operations that are suspended or shut-in upon the request
of Grantor for less than thirty (30) days during a period of sixty
(60) consecutive days in response to one (1) or more Notices of Subordination
submitted by Grantor. The terms of this Section I.F. shall be applicable in the
case of any Oil and Gas Assets owned by Grantee on Category II Land even where
Grantor subsequently issues a Category I Land Notification.
     1. If, upon receipt of and pursuant to a Notice of Subordination from
Grantor, Grantee suspends or shuts-in (which shall include any period following
re-start during which any well is de-watering prior to attaining average daily
production equal to that observed and documented immediately prior to suspension
or shut-in) Oil and Gas operations for more than thirty (30) days during a
period of sixty (60) consecutive days but less than one hundred eighty
(180) days during a one (1) year period (“Temporary Suspense Period”), then, not
later than thirty (30) days following the termination of the Temporary Suspense
Period, Grantee shall be entitled to receive from Grantor a payment consisting
of:
     a. a reimbursement of all actual and direct out-of-pocket costs and
expenses incurred by Grantee to suspend, shut-in and re-start (including
incremental de-watering costs) the affected Oil and Gas Assets during the
Temporary Suspense Period as well as any shut-in or similar payments made by
Grantee to third parties that would otherwise not be made but for the temporary
suspension of operations in order to extend or maintain any leases or agreements
on which are located or are held by the shut-in wells or other Oil and Gas
Assets. The reimbursable costs and expenses shall be limited to costs and
expenses Grantee incurs and pays directly in connection with the temporary
suspension requested by Grantor and shall not include costs and expenses
customarily or routinely incurred by Grantee to maintain or operate the Oil and
Gas Assets or conduct daily operations; and
     b. an amount representing the estimated interest on projected Oil and Gas
sales revenues Grantee and Grantee’s partners, joint venturers, co-owners, or
royalty and overriding royalty owners (net of lease operating expenses) would
otherwise reasonably expect to receive from such suspended or shut-in Oil and
Gas Assets during the entire Temporary Suspense Period. The Engineer shall
determine the interest on projected on Oil and Gas sales revenues using:
(i) actual prices for Oil and Gas determined under the applicable sales contract
at the point of sale for the period in which the Oil and Gas Assets are
suspended or shut-in; (ii) projected volumes of Oil and Gas production during
the suspense or shut-in period based on the historic actual Oil and Gas
production and sales from the suspended or shut-in Oil and Gas Assets adjusted
by normal decline curve analysis; (iii) historic actual charges to the Oil and
Gas

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Assets for lease operating, gathering, processing, transporting, and marketing
expenses; and (iv) the then current prime interest rate on the first business
day of the Temporary Suspense Period published in The Wall Street Journal or
comparable daily financial publication which shall be the deemed interest rate
Grantee would have otherwise received on its working interest share of suspended
net revenues.
     2. If Grantee’s compliance with Grantor’s Notice of Subordination causes a
suspension or shut-in of Oil and Gas Assets or operations for: (i) more than one
hundred eighty (180) days during a one (1) year period, or (ii) more than one
(1) Temporary Suspense Period in which operations are suspended for more than a
total of one hundred seventy-five (175) days in any two (2) consecutive years,
or (iii) are permanently suspended due to permanent abandonment or removal of
Oil and Gas Assets from Category II Land, which action results in a reduction or
loss of Grantee’s ability to produce and sell proved developed producing Oil and
Gas (excluding CMM) reserves (“PDP Reserves”) at then current production levels,
then Grantee’s sole and exclusive remedy for the abandonment or loss of its
interests in such Oil and Gas Assets and all associated PDP Reserves shall be
determined by the Engineer pursuant to this Section I.F. The term “PDP Reserves”
shall mean proved developed producing oil and gas reserves as defined by the
Society of Petroleum Engineers in Guidelines for the Evaluation of Petroleum
Reserves and Resources 136 (2001). The Engineer shall calculate the compensation
due Grantee as follows (and shall provide to Grantee and Grantor with copies of
all appraisals, reports, analyses and other documentation supporting the
compensation amounts in clauses (a) through (c) below):
     a. a reimbursement of all reasonable actual and direct costs to remove,
transport, relocate and/or protect from subsidence the affected Oil and Gas
Assets; provided, however, that Grantor shall have no obligation to reimburse
Grantee for any costs or charges to relocate or transport affected Oil and Gas
Assets outside of the state in which such assets are located unless such
distance is less than fifty (50) miles;
     b. an amount equal to the then current market value of Grantee’s interests
in all Oil and Gas Assets abandoned on Category II Land (excluding any gathering
systems, trunk lines, or water disposal pipelines abandoned in-place, all of
which shall be valued based on Grantee’s calculated book value using IRS allowed
depreciation rates for such assets) in their then current condition as
determined based on the average of at least two (2) written appraisals or offers
received from independent third parties selected in good faith by Grantor and
Grantee; provided, however, that Grantor shall have no duty or obligation to
compensate Grantee for any Oil and Gas Assets sold in response to Grantor’s
Notice of Subordination, even if sold for less than their then current fair
market value or book value, as applicable;

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     c. an amount equal to all reasonable and customary third party costs and
expenses incurred by Grantee to reclaim any surface damage or disturbance
attributable to operation or removal of such Oil and Gas Assets from Category II
Land; provided, however, that Grantor, in its sole discretion, may elect to
assume, discharge and perform all or any part of Grantee’s reclamation duties
and obligations for such property and to indemnify and hold Grantee harmless for
all such assumed reclamation obligations;
     d. an amount equal to the then current net present value of Grantee’s
working interest in any remaining PDP Reserves in each drilling unit on Category
II Land in which Oil and Gas Assets are abandoned, removed, suspended or shut-in
beyond the Temporary Suspense Period (provided that Grantee shall have first
been compensated under Section I.F.1 with respect to the Temporary Suspense
Period), discounted at the rate of ten percent (10%), as determined by the
Engineer as of the date each well is permanently shut-in in preparation for
permanent plugging and abandonment. For the avoidance of doubt, in the case of a
deemed permanent suspension or shut-in resulting from more than one
(1) Temporary Suspense Period totaling more than one hundred and seventy-five
(175) days in any two (2) consecutive years, the date of determination shall be
the date on which the relevant Oil and Gas well is first shut-in in response to
a Notice of Subordination; provided, however, that Grantor shall be entitled to
set-off any payment made to Grantee pursuant to Section I.F.1 in respect of any
Temporary Suspense Period and deduct any net revenues received by Grantee from
the well during the relevant period from any payments required pursuant to this
Section I.F.2.d. In order to qualify as PDP Reserves for purposes of determining
any payments due pursuant to this Section I.F.2.d, the affected Oil and Gas
wells and related Oil and Gas Assets must have been drilled and completed, and
have commenced dewatering or production operations prior to abandonment. To the
extent commercially practicable, Grantee shall keep all wells and equipment in
good operating condition and diligently produce and sell Oil and Gas from such
wells until they are plugged and abandoned. The value of PDP Reserves for each
drilling unit will be established based on the actual well spacing in the field
or as determined by applicable law, regulation, rule, or order or, in the
absence of the foregoing, Grantee’s reasonable field practices. The Engineer
shall determine the net present value of the PDP Reserves in accordance with
standard Oil and Gas industry accounting and operating practices, and taking
into account, among other factors: (i) actual prices for Oil and Gas determined
under the applicable sales contract at the point of sale on the first business
day following the day the well is plugged and abandoned by Grantee; and
(ii) projected volumes of Oil and Gas production for the remainder of the life
of the well based on PDP Reserve estimates and decline curve analysis or other
similar types of analysis and modeling then currently used in the Oil

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and Gas industry which shall take into account, among other factors, historic
operating costs (unescalated), gas quality, well operating history, gas
processing, fuel usage, gas gathering, compression, transportation, and
marketing charges and expenses and all taxes, assessments and other similar
charges that would otherwise be due on the Oil and Gas Assets and production
during the remaining projected well life. It is expressly agreed by the Parties
that the valuation of Grantee’s PDP Reserves shall not include any value for
(1) any class of reserves or resources that would not qualify as PDP Reserves at
the time the Oil and Gas Assets are abandoned, removed, or shut-in beyond the
Temporary Suspense Period, or (2) any CBM or CMM lost due to venting in advance
of, or during, mining prior to plugging and abandoning any well; and
     e. an amount equal to all actual reasonable and customary third party costs
and expenses incurred by Grantee to plug and abandon (to Grantor’s standards)
any well subject to a Notice of Subordination; it being expressly agreed that
Grantee shall have complete discretion with regard to plugging wells on Lands in
which the Reserved Minerals are not reasonably likely to be commercially mined
or otherwise commercially extracted within ten (10) years of the proposed
commencement date of the affected Oil and Gas operations (such determination
being made based upon reasonable assumptions and industry practice in effect as
of the date of the Notice of Subordination).
Grantee shall make available to Grantor, the Engineer, and appraisers copies of
all data, information, and records reasonably requested to determine any
payments to be made to Grantee pursuant to this Section I.F.2.
     3. Concurrently with the delivery of the payments described in Section I.F,
Grantee shall execute and deliver to Grantor executed releases pursuant to
Section I.G., and a mine-through agreement, consisting of a deed and license in
substantially the form attached hereto as Attachment “C-2” (the “Mine-Through
Agreement”) by which Grantee shall, subject to the reversion of rights, titles,
interests, estates and claims in and to CMM, convey, assign, and transfer to
Grantor AS IS, WHERE IS, but free and clear of all liens, claims or encumbrances
created by, through or under Grantee, all of Grantee’s interests in all Oil and
Gas Assets and Oil and Gas Interests (limited by formation and depth), including
all Other Agreements and Associated Rights relating to or associated with such
interests, containing PDP Reserves within each drilling unit described in the
Notice of Subordination for Category II Lands (such geographic area, the
“Mine-Through Area”). Subject to the terms and conditions contained therein, the
Mine-Through Agreement shall also license, grant and deliver to Grantor for its
exclusive use and control AS IS, WHERE IS: (i) all of Grantee’s interests in Oil
and Gas Assets and Oil and Gas Interests (including operating rights), including
all Other Agreements and Associated Rights relating to or associated with such
interests, in the Mine-Through Area which do not contain PDP

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Reserves; and (ii) any data, files, records and information, leases, Permits,
operating agreements, surface access agreements or rights-of-way, service
contracts, sales and transportation contracts, and any other agreements relating
to the operation of any Oil and Gas Assets and Oil and Gas Interests described
in subclause (i) (collectively, “Licensed Interests”). Among other things, the
Mine-Through Agreement shall also license and grant to Grantor (a) at its sole
cost and expense, the right to use, operate, remove, relocate, shut-in,
transfer, abandon, or sell (upon obtaining Grantee’s prior written approval
which shall not unreasonably be withheld) any Licensed Interests, (b) the right
to block or oppose the drilling or operation of any Oil and Gas well or
injection well used for fluids or gas storage that would penetrate the Licensed
Interests, (c) the right to block and oppose the issuance of any permit, license
or authorization issued by any Governmental Authority for testing, exploration,
drilling, production or operation of any Oil and Gas well or injection well used
for fluids or gas storage that would penetrate the Licensed Interests, and
(d) to exercise any other rights, interests, benefits granted to Grantee
pursuant to this Deed that otherwise would in any way interfere with Grantor’s
mining or other operations in the exercise of its Reserved Rights in the
Mine-Through Area. Grantor, however, shall have no other duty or obligation with
respect to any Licensed Interests except as otherwise provided in the
Mine-Through Agreement. It is agreed that under the terms of the Mine-Through
Agreement, Grantor shall not have the right to produce and sell Oil and Gas from
any Licensed Interests; provided, however, Grantor shall have the right to
produce and sell Oil and Gas from Oil and Gas Interests containing PDP Reserves
and to vent CBM or CMM in connection with its mining operations with no
obligation to Grantee. Each Mine-Through Agreement shall automatically terminate
as to the Licensed Interests upon the occurrence of certain events specified in
the Mine-Through Agreement. Upon Grantor’s delivery of a Notice of Subordination
covering Category I Lands, Grantor and Grantee shall execute a Mine-Through
License in substantially the form attached hereto as Attachment “C-3”.
     4. All of Engineer’s calculations and valuations and Grantor’s payments
made pursuant to this Section I.F. shall be based on the then current working
interest of Grantee and any co-owner, working interest partner, or joint
venturer, and on the interest of any royalty or overriding royalty owner, in and
with respect to the Oil and Gas Interests, Oil and Gas Assets, and all Oil and
Gas production from each drilling unit within the Mine-Through Area.
     5. To the extent Grantee’s Oil and Gas Interests in any tract of the Land
are less than 100%, Grantee acknowledges and agrees that the terms of any
approved Development Plan or the Deed and this Exhibit “C” shall apply to any
right, title, or interest in the Lands Grantee may hereafter acquire from any
third party. Grantee further covenants and agrees that to the extent there are
oil and gas interest owners other than Grantor and Grantee in the Lands, Grantee
will diligently cooperate with Grantor to secure from all such Oil and Gas
working

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interest owners in such Lands and Governmental Authorities all Permits required
to fully exercise the Reserved Rights consistent with the terms of any approved
Development Plan, the Deed, this Exhibit “C”, and applicable Legal Requirements.
The Parties covenant and agree to work in good faith to perform their respective
obligations hereunder, and to implement the transactions and performance
contemplated hereby.
     G. Payment to Grantee and Delivery of Transfer Documents. Within thirty
(30) days of receiving the Engineer’s and appraiser’s reserve report and
valuations together with copies of all supporting documentation (including
documentation to be provided by Grantee), Grantor shall pay Grantee, as its sole
and exclusive remedy, all amounts determined to be due under Section I.F. At
Grantor’s election, exercisable in its sole discretion, it may pay any
royalties, overriding royalties, or production payments proportionately
allocated to Grantee’s working interest in the Oil and Gas Interests containing
the PDP Reserves directly to the appropriate party as identified in writing by
Grantee, and deduct such amounts from amounts otherwise payable to Grantee under
Section I.F. Otherwise, Grantee shall be solely responsible for all third party
claims relating to its working interest in the Oil and Gas Assets and Oil and
Gas Interests containing PDP Reserves, and for all amounts payable to partners,
co-owners, joint venturers, other working interest owners, and royalty,
overriding royalty and production payment owners, and shall defend and indemnify
Grantor from all claims, demands, and causes of action relating to such claims.
Upon receipt of Grantor’s payments pursuant to Section I.F., and as a condition
to such payments, in addition to the Mine-Through Agreement, Grantee shall
deliver to Grantor releases executed by Grantee and any creditors, lien holders,
owners of royalties, overriding royalties, or production payments (other than
such owners as have been paid directly by Grantor) releasing Grantor from all
causes of action, claims, demands, losses, and damages arising from Grantor’s
exercise of the Reserved Rights with respect to all of Grantee’s rights, title,
and interests in such property. The Parties agree that to the extent the
interests of federal or state entities are or could be implicated in connection
with any payments to be made hereunder, that the Parties shall seek the prior
approval of any applicable governmental agency or authority before such payments
are made.
     II. Dispute Resolution.
     A. If the Parties are unable to agree upon an Engineer, the Engineer shall
be selected by the arbitrator selected pursuant to Section II.B.
     B. Notwithstanding any claim or dispute by either Party that the Engineer’s
or appraiser’s valuation is not made in accordance with the terms of this
Exhibit “C”, Grantee shall fully and timely comply with Grantor’s Notice of
Subordination in carrying out the Subordination Actions described therein. Such
claims and disputes regarding either the selection of the Engineer or the
Engineer’s or appraiser’s valuations of amounts due hereunder shall be resolved
solely through binding arbitration by one petroleum engineer (or engineer of
similar qualifications) or oil and gas accountant each with at least ten (10)
years experience in field operations or marketing, purchasing, or selling Oil

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and Gas Assets including, without limitation, Oil and Gas Interests containing
PDP Reserves, as the case may be. Grantor and Grantee shall cooperate to select
the single arbitrator. Decisions by the arbitrator shall be issued within one
hundred twenty (120) days of the selection of the arbitrator. The arbitration
shall be conducted in accordance with the Commercial Arbitration Rules and
Mediation Procedures of the American Arbitration Association; provided, however,
that the Commercial Mediation Procedures provided for therein shall not apply
unless the parties to the arbitration mutually agree. The final decision by the
arbitrator shall be consistent with the provisions of this Exhibit “C”. Any
arbitral decision or award may be enforced against the Parties or their assets
wherever they may be located and a judgment on an arbitral award may be entered
by any court having jurisdiction thereof and, for such purpose, each Party
hereby submits to the jurisdiction of any such court and waives any objections
based on inconvenient forum or lack of jurisdiction.
     C. For all other matters or disputes not subject to the provisions of
Section II.B. or Section I.A.5, and for which the jurisdiction of the federal
courts is available, each Party submits to the exclusive jurisdiction of the
federal court for the district where the affected Land is located and agrees
that all claims in respect of the action or proceeding may be heard and
determined in any such court. Assuming federal jurisdiction exists, each Party
also agrees not to bring any action or proceeding arising out of or relating to
this Exhibit “C” in any other court. To the extent federal jurisdiction does not
exist with respect to any such dispute or claim, the Parties agree that any such
dispute shall be brought in state district (circuit) or county court of general
jurisdiction where the affected Lands and Oil and Gas Assets subject to the
dispute are located. Each of the Parties waives any defense of inconvenient
forum or lack of jurisdiction to the maintenance of any action or proceeding so
brought and waives any bond, surety, or other security that might be required of
any other Party with respect to any such action or proceeding. The Parties agree
that either or both of them may file a copy of this paragraph with any court as
written evidence of the knowing, voluntary, and bargained agreement between the
Parties to irrevocably waive any objections to venue, convenience of forum or
jurisdiction.
     III. Integration. The Deed, together with the exhibits attached thereto,
including this Exhibit “C”, constitute the entire agreement of the Parties
relating to the subject matter of this Exhibit “C” and supersede all previous
agreements, promises, representations, understandings, and negotiations, whether
written or oral, among the Parties with respect to the subject matter hereof.

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Attachment C-1
Form of Confidentiality Agreement

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Attachment C-2
Form of Mine-Through Agreement

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Attachment C-3
Form of Mine-Through License

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