Document:

EX-10.6

 

Exhibit
10.6

Final Draft

FORM OIL AND GAS DEED, ASSIGNMENT, ASSUMPTION AND BILL OF SALE

FOR

CONVEYANCE OF OIL AND GAS (INCLUDING CBM AND CMM) RIGHTS

(INCLUDES LEASES, WELLS AND EQUIPMENT, ASSOCIATED RIGHTS AND BOOKS AND RECORDS)

FROM

PEABODY ENTITIES TO CNX GAS COMPANY LLC

 

 

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, ASSUMPTION AND BILL OF SALE

     THIS OIL AND GAS DEED, ASSIGNMENT, ASSUMPTION AND BILL OF SALE (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 together with wells, equipment, 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 wells, equipment 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 “C”); 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 “C”.

     “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. Wells and Equipment: All of Grantor’s rights and interests in and to the Oil and
Gas wells, test wells, and water injection wells (collectively, the “Wells”), as described on
Exhibit “B” attached hereto, together with (i) all related wellhead equipment, pumps,
machinery, materials and supplies, and (ii) only to the extent solely related to the Wells, all
surface facilities, flowlines, tanks, buildings, injection facilities, water and gas gathering
systems, compression facilities, metering devices, saltwater disposal facilities, powerlines, and
other similar infrastructure. the material items of which are described on Exhibit “B”
(collectively, the “Equipment”).

     C. 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 “C” 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

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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
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.

     D. 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,

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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.

     E. 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.

     F. 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 and Wells and Equipment (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.

     G. 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 hereof 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, Wells and Equipment, 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

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Grantor or Grantor’s current or former Affiliates unrelated to the Oil and Gas Interests,
Wells and Equipment, 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 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, Wells and Equipment, (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

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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,
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 “D” 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 “D” 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 which are other than the Wells and Equipment ;

          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

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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;

          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 “D” 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.D.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 “D” 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

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          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 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, Wells and Equipment, 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 “D”, 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 “D”), 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 “D” 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

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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
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 “D”.

     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 and other geologic and coal data and information (including gas content and
desorption information, but excluding coal quality information) relating to the two pilot test
areas referred to as the “Broughton” and “Eagle #3” prospect areas (collectively the “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).

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          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 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 “D” 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 “D-1” to Exhibit
“D” 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

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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 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 “E”
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, Wells and
Equipment, 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.

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     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, assumption and bill of sale 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, Wells and Equipment 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 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. SPECIFICALLY WITHOUT LIMITATION OF THE IMMEDIATELY PRECEDING SENTENCE,
GRANTOR EXPRESSLY DISCLAIMS AND NEGATES AS TO ALL WELLS AND EQUIPMENT INCLUDED IN THE SUBJECT
PROPERTY: (I) ANY IMPLIED OR EXPRESS WARRANTY OF MERCHANTABILITY; (II) ANY IMPLIED OR EXPRESS
WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE; AND (III) ANY IMPLIED OR EXPRESS WARRANTY OF
CONFORMITY TO MODELS OR SAMPLES OF MATERIALS, IT BEING EXPRESSLY UNDERSTOOD BY GRANTEE THAT ALL
WELLS AND EQUIPMENT INCLUDED WITHIN THE SUBJECT PROPERTY ARE BEING CONVEYED TO GRANTEE “AS IS,”
“WHERE IS,” WITH ALL FAULTS, AND IN THE PRESENT CONDITION AND STATE OF REPAIR. 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

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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 “D”, 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 “D”, 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 “D” hereto or
in any Development Plan, Grantor shall not interfere with Grantee’s legal, Permit, or regulatory
obligations.

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, the Wells and Equipment, 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

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Interests that is owned or leased by Grantor or an Affiliate as of June8, 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.

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.

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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.

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, Wells and Equipment, 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, Wells and Equipment, or Associated Rights;

               b. Other than obligations and liabilities arising as a result of or attributable to Grantor’s
exercise of the Reserved Rights, all obligations and liabilities arising from or attributable to
any operations conducted by or on behalf of Grantor, or any Grantor Predecessor or Affiliate, on or
with respect to any Wells or Equipment (including unreclaimed Well sites and all related surface
facilities), irrespective of whether such obligation or liability arose before or after the
Effective Time, including, without limitation, all plugging and abandonment obligations and
liabilities, reclamation, restoration and remediation obligations and

17

 

liabilities, and other similar obligations and liabilities relating to the Wells and Equipment
and arising under Other Agreements, Permits or applicable environmental and other Legal
Requirements relating to the conduct of Oil and Gas operations, irrespective of when the events or
conditions giving rise to the obligation or liability occurred or existed;

               c. 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

               d. 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 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 “D” 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 “D” hereto, except to the extent
constituting Assumed Liabilities or as otherwise provided in clause F. below or in Exhibit
“D” hereto,

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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 this Deed, Exhibit
D 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 “D” 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 “D” 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;

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          2. except to the extent constituting an Assumed Liability or as provided in clause F. below or
in Exhibit “D” 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 “D” hereto or
any approved Development Plan.

     F. Mutual Indemnification: Except as otherwise provided in Exhibit “D”
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 (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
“D” 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.

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XIV. Miscellaneous

     A. Deed Interpretation: In the event of a conflict between the provisions of this
Deed and Exhibit “D”, the provisions of Exhibit “D” shall control. If there is a
conflict between the provisions of this Deed (including Exhibit “D”) 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 “D” 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.

     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” and Exhibit “B” 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” and Exhibit “B” 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” and Exhibit
“B” 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

21

 

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 “D”, 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.

     IN WITNESS WHEREOF, this Oil and Gas Deed, Assignment, Assumption and Bill of Sale 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]

22

 

EXHIBIT D

TO

OIL AND GAS DEED, ASSIGNMENT, ASSUMPTION AND BILL OF SALE (“DEED”)

EFFECTIVE APRIL 1, 2007

BETWEEN

PEABODY ENTITIES (“GRANTOR”)

AND

CNX GAS COMPANY LLC (“GRANTEE”)

     The Deed to which this Exhibit “D” 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 “D”. 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 “D”. All capitalized terms in this Exhibit “D” 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
“D” 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 “D”. 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

D-1

 

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 “D-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

D-2

 

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 “D” 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.

D-3

 

     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 “D”. 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

D-4

 

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

D-5

 

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

D-6

 

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 “D” 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

D-7

 

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

D-8

 

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 D. 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

D-9

 

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

D-10

 

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;

D-11

 

      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

D-12

 

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 “D-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

D-13

 

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 “D-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 “D” 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

D-14

 

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 “D”, 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 “D”,
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

D-15

 

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
“D”. 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 “D” 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. This Deed, together with the exhibits attached thereto, including
this Exhibit “D”, constitute the entire agreement of the Parties relating to the subject
matter of this Exhibit “D” and supersede all previous agreements, promises,
representations, understandings, and negotiations, whether written or oral, among the Parties with
respect to the subject matter hereof.

D-16

 

Attachment D-1

Form of Confidentiality Agreement

D-17

 

Attachment D-2

Form of Mine-Through Agreement

D-18

 

Attachment D-3

Form of Mine-Through License

D-19EX-10.7

 

Exhibit
10.7

Execution Version

Asset Purchase Agreement

between

Cyprus Creek Land Resources, LLC

Buyer

and

CNX Gas Company LLC

Seller

Dated as of April 1, 2007

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page	 
	Recitals
	 	 	1	 
	 
	 	 	 	 
	Agreements
	 	 	1	 
	 
	 	 	 	 
	ARTICLE I. Definitions
	 	 	1	 
	1.1 Defined Terms
	 	 	1	 
	1.2 Other Definitions
	 	 	6	 
	1.3 Rules of Construction
	 	 	7	 
	 
	 	 	 	 
	ARTICLE II. Sale and Purchase
	 	 	8	 
	2.1 Sale and Purchase of Assets
	 	 	8	 
	2.2 Purchase Price
	 	 	10	 
	2.3 Assumed and Excluded Liabilities
	 	 	10	 
	 
	 	 	 	 
	ARTICLE III. Actions Prior to Closing
	 	 	11	 
	3.1 Allocated Values; Post-Closing Allocations
	 	 	11	 
	3.2 Updated Schedules and Exhibits
	 	 	11	 
	3.3 Taxpayer Identification Numbers
	 	 	11	 
	3.4 Consents
	 	 	11	 
	3.5 Asset Due Diligence
	 	 	11	 
	 
	 	 	 	 
	ARTICLE IV. Closing
	 	 	12	 
	4.1 Closing
	 	 	12	 
	4.2 Buyer’s Closing Deliveries
	 	 	13	 
	4.3 Seller Closing Deliveries
	 	 	13	 
	4.4 Transfer Documents
	 	 	13	 
	4.5 Other Transfer Documents
	 	 	14	 
	 
	 	 	 	 
	ARTICLE V. Transfer Period Covenants
	 	 	14	 
	5.1 Transfer Period
	 	 	14	 
	5.2 Further Assurances
	 	 	14	 
	5.3 Obtaining Consents and Delivery of Notices
	 	 	14	 
	5.4 Governmental Filings
	 	 	15	 
	5.5 Recording Fees, Transfer Taxes and Similar Costs
	 	 	15	 
	 
	 	 	 	 
	ARTICLE VI. Seller’s Representations and Warranties
	 	 	15	 
	6.1 Organization and Standing
	 	 	15	 
	6.2 Power
	 	 	16	 
	6.3 Authorization and Enforceability
	 	 	16	 
	6.4 Liability for Brokers’ Fees
	 	 	16	 
	6.5 Alien Status
	 	 	16	 
	6.6 Litigation
	 	 	16	 
	6.7 Orders
	 	 	16	 
	6.8 Rentals and Royalties
	 	 	16	 

i 

 

	 	 	 	 	 
	 	 	Page	 
	6.9 No Conflicts
	 	 	16	 
	6.10 Compliance with Laws
	 	 	17	 
	6.11 Environmental Conditions
	 	 	17	 
	6.12 Taxes
	 	 	18	 
	6.13 Regulatory Approvals
	 	 	18	 
	6.14 Limited Title Warranty as to Assets
	 	 	18	 
	6.15 Material Contracts
	 	 	18	 
	6.16 Employees
	 	 	19	 
	6.17 No Material Adverse Change
	 	 	19	 
	6.18 Undisclosed Material Liabilities
	 	 	19	 
	6.19 Insurance
	 	 	20	 
	6.20 Intellectual Property
	 	 	20	 
	6.21 Disclosure
	 	 	20	 
	6.22 Effectiveness of Representations and Warranties
	 	 	20	 
	 
	 	 	 	 
	ARTICLE VII. Buyer’s Representations and Warranties
	 	 	20	 
	7.1 Organization and Standing
	 	 	20	 
	7.2 Power
	 	 	20	 
	7.3 Authorization and Enforceability
	 	 	20	 
	7.4 Liability for Brokers’ Fees
	 	 	21	 
	7.5 Alien Status
	 	 	21	 
	7.6 Litigation
	 	 	21	 
	7.7 Orders
	 	 	21	 
	7.8 No Conflicts
	 	 	21	 
	7.9 Regulatory Approvals
	 	 	21	 
	7.10 Buyer Due Diligence
	 	 	21	 
	7.11 Disclosure
	 	 	22	 
	7.12 Effectiveness of Representations and Warranties
	 	 	22	 
	 
	 	 	 	 
	ARTICLE VIII. Other Covenants
	 	 	22	 
	8.1 Certain Affirmative Covenants of Seller
	 	 	22	 
	8.2 Certain Negative Covenants of Seller
	 	 	23	 
	8.3 Confidentiality and Publicity
	 	 	23	 
	8.4 DISCLAIMERS
	 	 	24	 
	 
	 	 	 	 
	ARTICLE IX. Conditions Precedent
	 	 	25	 
	9.1 Conditions to Seller’s Obligations
	 	 	25	 
	9.2 Conditions to Buyer’s Obligations
	 	 	26	 
	 
	 	 	 	 
	ARTICLE X. Termination, Effect of Termination and Specific Performance
	 	 	27	 
	10.1 Termination
	 	 	27	 
	10.2 Effect of Termination
	 	 	27	 
	10.3 Specific Performance
	 	 	27	 
	 
	 	 	 	 
	ARTICLE XI. Indemnification
	 	 	27	 
	11.1 Indemnification by Buyer
	 	 	27	 
	11.2 Indemnification by Seller
	 	 	28	 

ii 

 

	 	 	 	 	 
	 	 	Page	 
	11.3 Procedure for Certain Indemnified Claims
	 	 	29	 
	11.4 Determination of Indemnification Amounts and Related Matters
	 	 	29	 
	11.5 Time and Manner of Certain Claims
	 	 	29	 
	11.6 Other Indemnification
	 	 	30	 
	11.7 Exclusivity
	 	 	30	 
	 
	 	 	 	 
	ARTICLE XII. Miscellaneous Provisions
	 	 	30	 
	12.1 Data and Information Review
	 	 	30	 
	12.2 Expenses
	 	 	31	 
	12.3 Brokers
	 	 	31	 
	12.4 Waivers
	 	 	31	 
	12.5 Notices
	 	 	31	 
	12.6 Entire Agreement; Prior Representations; Amendments; No Merger
	 	 	32	 
	12.7 Jurisdiction
	 	 	32	 
	12.8 WAIVER OF JURY TRIAL
	 	 	33	 
	12.9 Binding Effect; Benefits
	 	 	33	 
	12.10 Headings, Exhibits and Schedules
	 	 	33	 
	12.11 Counterparts
	 	 	33	 
	12.12 GOVERNING LAW
	 	 	33	 
	12.13 Severability
	 	 	33	 
	12.14 Third Persons; Joint Ventures
	 	 	33	 
	12.15 Construction
	 	 	34	 
	12.16 Attorneys’ Fees
	 	 	34	 
	12.17 Risk of Loss
	 	 	34	 
	12.18 Tax Consequences
	 	 	34	 
	12.19 Commercially Reasonable Efforts
	 	 	34	 
	12.20 Time
	 	 	34	 
	12.21 Surface Use Agreements
	 	 	35	 
	12.22 Rule Against Perpetuities
	 	 	35	 
	 
	 	 	 	 
	List of Exhibits and Schedules
	 	 	37	 

iii 

 

Asset Purchase Agreement

     THIS ASSET PURCHASE AGREEMENT (“Agreement”) is made and entered into on June 20, 2007,
but effective as of April 1, 2007, between Cyprus Creek Land Resources, LLC (“Central” or “Buyer”),
a Delaware limited liability company, whose principal place of business is located at 701 Market
Street, St. Louis, Missouri 63101, and CNX Gas Company LLC (“Seller”), a Virginia limited liability
company whose principal place of business is located at 5 Penn Center West, Suite 401, Pittsburgh,
Pennsylvania 15276.

Recitals

     A. Seller owns, leases, controls, or claims certain rights, title, estates, and interests
in various Oil and Gas assets as more fully described in Section 2.1(c) hereof (the “Assets”).

     B. Seller has agreed to assign, convey, sell, and transfer to Buyer, and Buyer has agreed to
purchase and assume all of Seller’s rights, titles, interests, estates, duties and obligations in,
to, under or derived from, the Assets on the terms and subject to the conditions set forth in this
Agreement.

Agreements

     In consideration of the mutual covenants and promises set forth in this Agreement, Buyer
and Seller agree as follows:

ARTICLE I.

Definitions

     1.1 Defined Terms. In addition to terms defined elsewhere in this Agreement, the
following terms with initial capital letters, when used in this Agreement, shall have the meanings
set forth below:

     “Affiliate” means, with respect to any Person, any other Person controlling, controlled by, or
under common control with such Person, with “control” for such purpose meaning the possession,
directly or indirectly, of the power to direct or cause the direction of the management and
policies of a Person, whether through the ownership of voting securities or voting interests, by
contract or otherwise.

     “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 Agreement, 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

1

 

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.

     “Bonds” means the surety, performance, reclamation and other bonds issued in favor of, on
behalf of, or in the name of Seller or its Affiliates in connection with the Assets or the Permits.

     “Burdens on Production” means annual and other rentals, advance royalties, bonus, option and
similar payment obligations, royalties, overriding royalties, net profit or carried interests, and
other payment obligations, encumbrances, charges, and expenses that burden the Oil and Gas
Interests, other than any of the foregoing in favor of Seller or any Affiliate of Seller.

     “Business Day” means any day other than a Saturday or Sunday or a day on which banks in St.
Louis, Missouri, are authorized or required to be closed.

     “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.

     “Closing Date” means the date on which the Closing occurs.

     “Closing Deliveries” means the documents and instruments described in Sections 4.2 and 4.3.

     “Closing Time” means 11:59 P.M. Central Daylight Time on the Closing Date.

     “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.

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

     “CONSOL Parties” means CONSOL Energy, Inc. and any of its Affiliates who are predecessors in
title to Seller with respect to the Assets.

     “Contract” means any written agreement, contract, mortgage, deed of trust, bond, indenture,
lease, license, note, joint operating agreement, division order, crude oil or gas sales or purchase
contract, gathering, transportation or marketing agreement, easement, right-of-way, surface use or
access agreement, certificate, option, warrant, right or other instrument, document, obligation or
agreement, and any ratifications or amendments to any of the foregoing, which relate to the Assets
or Seller’s right to conduct Oil and Gas operations on or with respect to any Asset.

     “Effective Time” means 12:00 A.M. Central Standard Time on Sunday, April 1, 2007.

     “Environmental Law” means any Legal Requirement whether now or hereafter in effect concerning
human health, safety, welfare or the environment, including Legal Requirements

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relating to emissions, discharges, releases or threatened releases of Hazardous Substances
into the environment, air (including both ambient and within buildings and other structures),
surface water, ground water or land or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, presence, disposal, transport or handling of Hazardous
Substances, including but not limited to the following statutes: the Clean Air Act, 42 U.S.C.A. §§
7401 et seq.; the Clean Water Act, 33 U.S.C.A. §§ 1251 et seq.; the Resource Conservation and
Recovery Act, 42 U.S.C. §§ 6901 et seq. (“RCRA”); the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, 42 U.S.C. §§ 9601 et seq. (“CERCLA”); the Emergency
Planning and Community Right-to-Know Act, 42 U.S.C. Chapter 116; the Safe Drinking Water Act, 42
U.S.C. §§ 300h et seq.; the Toxic Substances Control Act, 15 U.S.C.A. §§ 2601-2692 (“TSCA”); the
Surface Mining Control and Reclamation Act, 30 U.S.C. §§ 1201 et seq.; and any similar state or
local law relating to any of the foregoing; and any state law regulating oil and gas exploration
and production.

     “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 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, 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 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 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.”

     “GAAP” means generally accepted accounting principles in the United States, consistently
applied, including the statements and interpretations of the U.S. Financial Accounting Standards
Board, consistently applied.

     “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.

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     “Hazardous Substances”: means (a) any pollutant, contaminant, waste or chemical or any toxic,
radioactive, ignitable, corrosive or otherwise hazardous substance, waste or material; (b) any
“hazardous waste” as defined by RCRA; (c) any “hazardous substance” as defined by CERCLA; (d) any
substance regulated by the TSCA; (e) asbestos or asbestos-containing material of any kind or
character; (f) polychlorinated biphenyls; (g) any substances regulated under the provisions of
Subtitle I of RCRA relating to underground storage tanks; (h) any substance the presence, use,
treatment, storage or disposal of which is prohibited by or regulated under any Legal Requirement;
and (i) any other substance which by any Legal Requirement requires special handling, reporting or
notification of or to any Governmental Authority in its collection, storage, use, treatment,
presence or disposal.

     “Judgment” means any judgment, judicial decision, writ, order, injunction, award or decree of
or by any Governmental Authority.

     “Knowledge” means the actual knowledge of the persons as specified in Schedule 1.1a;
provided that no person specified on Schedule 1.1a shall have any personal liability or
obligation hereunder.

     “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.

     “Lien” means, with respect to any Asset, any security agreement, financing statement filed
with any Governmental Authority, conditional sale agreement, capital lease or other 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, claim,
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 Seller’s title to such Asset, whether arising pursuant to any Legal Requirement, Contract
or otherwise.

     “Litigation” means any action, suit, proceeding, arbitration, investigation, hearing or other
activity or procedure that could result in a Judgment, and any notice of any of the foregoing.

     “Losses” means any claims, losses, liabilities, damages, Liens, penalties, costs and expenses,
including interest which may be imposed in connection therewith, expenses of investigation,
reasonable fees and disbursements of counsel and other experts and the reasonable cost to any
Person making a claim or seeking indemnification under this Agreement with respect to funds
expended by such Person by reason of the occurrence of any event with respect to which
indemnification is sought, but shall in no event include special, incidental or consequential
damages or lost profits.

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     “Material Contracts” means all Contracts designated by Seller as material on Schedule
2.1(c)(ii).

     “Oil and Gas” means oil and gas, CBM, CMM, and other liquid or gaseous hydrocarbons, including
condensate and other substances produced therewith.

     “Order” means any award, decision, injunction, Judgment, order, decree, ruling, subpoena, or
verdict entered, issued, made or rendered by any arbitrator, court or other Governmental Authority.

     “Party” and “Parties” means either Seller or Buyer, or both collectively.

     “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.

     “Permitted Lien” means with respect to any Asset, or the Assets, as the context requires: (a)
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); (b)
any customary zoning law or ordinance or any similar Legal Requirement; (c) any customary right
reserved to any Governmental Authority to regulate the affected Asset or Assets; (d) 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; (e) any inchoate
materialmen’s, mechanic’s, workmen’s, repairmen’s or other like Liens arising in the ordinary
course of business relating to the Assets; (f) the reservations, reverters and other rights granted
or reserved herein or in the Transfer Documents; (g) any joint operating agreement, crude oil or
gas sales or purchase agreement, division order, or other Contract disclosed on Schedule
2.1(c)(ii) hereto; (h) 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 for the purpose of surface operations, roads,
railways, pipelines, transmission and transportation lines and other like uses, or for the common
use of real estate, rights-of-way, facilities and equipment; (i) any Third-Party Consents which are
obtained and in force and effect on the Closing Date; (j) all rights to consent by, required
notices to, filings with, or other actions by Governmental Authorities in connection with the sale
and conveyance of an Asset if the same are customarily sought subsequent to such sale and
conveyance; (k) any Liens that Seller shows by affirmative evidence are to be released at Closing;
(l) defects in the early chain of title consisting of the mere failure to recite marital status in
a document or omissions of successors or heirship proceedings, unless Buyer provides affirmative
evidence that such failure or omission has resulted in another Person’s actual and superior claim
of title to the relevant Asset; (m) defects that have been cured by possession under applicable
statutes of limitation for adverse possession or for prescription; (n) defects based solely on a
lack of information in Seller’s files; and (o) all Burdens on Production of which Buyer or any
successor or assign has actual notice (as set forth on Schedule 1.1b) or record notice;
provided that “Permitted Liens” shall not include any Lien securing any debt,

5

 

encumbrance or monetary claim, or any pledge, deed of trust, mortgage, security interests or
similar lien, caused created or allowed by Seller or its Affiliates, which could prevent or
interfere with the conduct of the business of the Buyer. Classification of any Lien as a
“Permitted Lien” shall not affect any liability which Seller may otherwise have under this
Agreement, including any indemnity obligation under this Agreement.

     “Person” means any human being, Governmental Authority, corporation, limited liability
company, general or limited partnership, joint venture, trust, association or unincorporated entity
of any kind.

     “Prime Rate” means the prime rate of interest, as announced from time to time, of The Bank of
New York in New York City.

     “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, and any 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.

     “Third Party Consents” means certain rights of consent to transfer, termination, amendment,
acceleration, suspension, revocation, or cancellation held by third Persons which are or may be
exercisable by such Persons by reason of the execution and delivery of this Agreement by Seller or
the consummation of the transaction contemplated hereby, and specified in Schedule 1.1c;
provided, however, that the term “Third Party Consents” shall not include Transfer Approvals.

     “Transfer Approvals” means the approvals and consents of a Governmental Authority specified on
Schedule 1.1d.

     “Transfer Documents” means the instruments and documents described in Section 5.1 which are to
be executed and delivered by or on behalf of Seller, or any Affiliate of Seller, in connection with
this Agreement or the transactions contemplated hereby.

     1.2 Other Definitions. The following terms are defined in the Sections indicated:

	 	 	 
	TERM	 	SECTION
	Agreement
	 	Preamble
	Assets
	 	2.1(c)
	Assumed Liabilities
	 	2.3(a)
	Buyer
	 	Preamble
	Buyer Group
	 	3.5(e)

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	TERM	 	SECTION
	Cap
	 	11.4(a)
	Closing
	 	4.1
	Confidential Information
	 	8.3(a)
	Deed
	 	4.4(a)
	ERC Rights
	 	2.1(c)(iii)(B)
	Excluded Assets
	 	2.1(d)
	Indemnified Losses
	 	3.5(e)
	Indemnitee
	 	11.3
	Indemnitor
	 	11.3
	Litigation Matter
	 	11.3
	Material Contracts
	 	2.1(c)(ii)
	Oil and Gas Books and Records
	 	2.1(c)(v)
	Oil and Gas Interests
	 	2.1(c)(i)
	Post-Closing Consent
	 	5.3(a)
	Purchase Price
	 	2.2
	Reversion
	 	4.4(a)
	Reviewable Data
	 	12.1
	Seller Group
	 	3.5(e)
	Seller Retained Liabilities
	 	2.3(b)
	Surface Use Agreement
	 	12.21
	Taking
	 	12.17(b)
	Transfer Period
	 	5.1

     1.3 Rules of Construction. Unless otherwise expressly provided in this Agreement, (a)
accounting terms used in this Agreement shall have the meaning ascribed to them under GAAP; (b)
words used in this Agreement, regardless of the gender used, shall be deemed and construed to
include any other gender, masculine, feminine, or neuter, as the context requires; (c) the word
“including” is not limiting, and the word “or” is not exclusive; (d) the capitalized term “Section”
refers to sections of this
Agreement; (e) references to a particular Section include all subsections thereof; (f)
references to a particular statute or regulation include all amendments thereto, rules and
regulations thereunder and any successor statute, rule or regulation, or

7

 

published clarifications or interpretations with respect thereto, in each case as from time to
time in effect; (g) references to a Person include such Person’s successors and assigns to the
extent not prohibited by this Agreement; (h) references to a “day” or number of “days” (without the
explicit qualification “Business”) shall be interpreted as a reference to a calendar day or number
of calendar days; and (i) references to “directors” shall be deemed to include the managers,
including managing members, of any limited liability company and references to “shareholders” shall
be deemed to include the members of any limited liability company.

ARTICLE II.

Sale and Purchase

     2.1 Sale and Purchase of Assets.

          (a) Sale and Purchase. For the consideration set forth herein, subject to the terms,
conditions, exceptions and reservations set forth in this Agreement, at Closing but effective as of
the Effective Time, Seller agrees to assign, sell and transfer, free and clear of all Liens (other
than Permitted Liens), all of its rights, titles, estates and interests in, to, under or derived
from, and Buyer agrees to purchase and assume the duties and obligations associated with, the
Assets; provided that this Agreement shall not constitute an agreement to assign or transfer any
Asset or any claim or right or any benefit arising thereunder or resulting therefrom without the
consent of a third Person thereto if such assignment or transfer without such consent would
constitute a breach or other contravention of such Asset or in any way adversely affect the rights
of Buyer thereunder.

          (b) Transfer of Beneficial Title. Subject to the terms, conditions, exceptions and
reservations of this Agreement, at Closing beneficial title, and all other rights and obligations
relating, to the Assets shall be transferred to Buyer. The transfer of beneficial title shall be
effective as of the Effective Time, notwithstanding that transfer of record title to the Assets
under the Transfer Documents may not be complete until the end of the Transfer Period.

          (c) Assets. “Assets” means all rights, title, estates, and interests in and to the
following described assets and properties, excepting and excluding the Excluded Assets and the
Reversion described in Sections 2.1(d) and 4.4(a), respectively:

               (i) Oil and Gas Interests. All of Seller’s fee, leasehold, mineral, royalty and other
rights and interests in and to Oil and Gas, in, on or under the land in Muhlenberg, McLean, and
Ohio Counties, Kentucky, as more fully described as the cross-hatched parcels (denoted in the
legend as “OIL & GAS”) and the shaded parcels (denoted in the legend as “CONSOL PROPERTY CONTROL”)
as shown on the map attached as Exhibit “A” (including without limitation, landowners’ or
reserved royalties, overriding royalties, rights to free gas either reserved in favor of or granted
to Seller and its Affiliates, as well as any right to vent CBM and CMM or to stimulate coal seams)
(the “Oil and Gas Interests”);

               (ii) Contracts. All of Seller’s rights, title, and interests in, to, under, or
derived from all Contracts and Permits 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

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Interests, including, without limitation, those described on Schedule 2.1(c)(ii)
attached hereto (the “Material Contracts”);

               (iii) ERC Rights and Other Credits.

                    (A) All rights Seller may now have or later acquire to claim any ERCs associated with Buyer’s
production of CBM and CMM from the lands containing the Oil and Gas Interests and the sale or use
of such CBM and CMM in lieu of venting such CBM or CMM to the atmosphere or otherwise disposing of
or using such gases; and

                    (B) all rights Seller may now have or later acquire to claim any other credits or allowances
(including any tax credits or allowances) relating to production of CBM and CMM by Buyer in advance
of coal mining operations by Buyer, or its successors and assigns, on the real property containing
the Oil and Gas Interests ((A) and (B) collectively, the “ERC Rights”);

               (iv) Other Tax Credits. All rights Seller may now have or later acquire to claim any
tax credits relating to exploration and production of Oil and Gas by Buyer after the Effective Time
with respect to the Assets;

               (v) 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
Assets), 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 (the “Oil and Gas Books and Records”), which are in the physical possession of
Seller, or with respect to which Seller has the right of access and the ability to obtain copies as
of April 1, 2007, or as of the Closing Date, and excepting such 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 Seller, provided, however, that
Seller shall use commercially reasonable efforts to obtain and make available to Buyer the Oil and
Gas Books and Records that are not in the physical possession of Seller as of April 1, 2007, or as
of the Closing Date; and

               (vi) Insurance Claims. All rights to insurance proceeds receivable after the
Effective Time with respect to any Assumed Liabilities insured on a “claims made” basis, and all
insurance proceeds (to the extent not already expended by Seller to restore or replace the lost or
damaged asset, which replacement asset shall be a transferred Asset) received prior to Closing with
respect to any asset which, if held by Seller as of the Effective Time would be an Asset.

          (d) Excluded Assets. The Assets shall not include, and Seller specifically excludes
from this transaction: (i) any accounts receivable accruing or attributable to the Assets for the
period prior to the Effective Time; (ii) all production of Oil and Gas from or attributable to the
Assets 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 Seller or its predecessors in title

9

 

attributable to the period prior to the Effective Time; (iv) any rights, titles, estates or
interests owned, leased, held or otherwise controlled by Seller in the lands described on
Exhibit “A” that are not described or included in Section 2.1(c) hereof; (v) all Oil and
Gas rights, estates, interests, and claims in and to properties not depicted on the attached
Exhibit “A” except as otherwise expressly provided herein as well as all data, books, maps,
records and other information relating thereto; (vi) except for common law or statutory rights to
use the surface as incident or right appurtenant to the Oil and Gas Interests, all surface rights
and estates in the lands described on Exhibit “A”, and all roads, ditches and other surface
improvements on such lands; and (vii) subject to Buyer’s review rights under Section 12.1, all
books, records, files, material, information and data that were obtained, prepared or received by
Seller or any of its agents, consultants or representatives (A) for purposes other than evaluating
and developing the oil and gas potential of the Oil and Gas Interests, (B) in connection with
internal evaluations of the Assets for management purposes, or (C) in connection with marketing of
the Assets or the evaluation and negotiation of the transaction contemplated herein (collectively,
the “Excluded Assets”).

     2.2 Purchase Price. In consideration for the sale and delivery of the Assets by
Seller to Buyer, Buyer shall pay to Seller at Closing the agreed-upon purchase price for the Assets
of One Thousand Dollars ($1,000.00) (the “Purchase Price”).

     2.3 Assumed and Excluded Liabilities.

          (a) Assumed Liabilities. After Closing, Buyer shall assume, pay, discharge and
perform the following (the “Assumed Liabilities”):

               (i) obligations and liabilities to the extent attributable to actions occurring or conditions
first occurring after the Effective Time under or with respect to the Assets; and

               (ii) all other obligations and liabilities to the extent attributable to actions or conditions
first occurring after the Effective Time and arising out of or relating to the ownership of the
Assets or operation of the Assets after the Effective Time, except to the extent that such
obligations or liabilities relate to any Excluded Asset or the Reversion.

          (b) Seller Retained Liabilities. The following obligations and liabilities shall
remain and be the obligations and liabilities solely of Seller (the “Seller Retained Liabilities”):
all obligations and liabilities arising out of or relating to the Assets other than the Assumed
Liabilities, and all obligations and liabilities to the extent attributable to the Assets after the
effective date of the Reversion, shall remain and be the obligations and liabilities solely of
Seller, including, but not limited to, any long-term debt (including the current portion thereof)
and any obligation or liability with respect to periods prior to and including the Effective Time
for payment of rentals or royalties related to the Assets.

10

 

ARTICLE III.

Actions Prior to Closing

     3.1 Post-Closing Allocations. The Parties agree that, to the extent possible, Seller
and Buyer shall each use commercially reasonable efforts to reach agreement on the allocated value
of each class of the Assets in accordance with the Code. Seller and Buyer each shall file all tax
returns and schedules thereto, including those returns and forms required by Section 1060 (if
applicable) of the Code, consistent with any such agreed-upon allocations, unless otherwise
required by applicable Legal Requirements. In the event the Parties do not reach agreement on such
allocations, Seller and Buyer shall each reflect the Assets acquired by such Party on its books for
tax reporting purposes in accordance with such Party’s own determination of such allocations.

     3.2 Updated Schedules and Exhibits. Each Party shall, immediately prior to Closing,
supplement the Schedules and Exhibits to this Agreement with additional information that, if
existing or known to it on the date of this Agreement, would have been required to be included in
one or more Schedules or Exhibits to this Agreement. For purposes of determining the satisfaction
of any of the conditions to the obligations of the Parties and the liability of the Parties
following Closing for breaches of its representations, warranties, and covenants under this
Agreement, the Schedules to this Agreement shall be deemed to include only (a) the information
contained therein on the date of this Agreement, and (b) information added to such Schedules and
Exhibits by written supplements to this Agreement delivered prior to December 31, 2007 by the Party
making such amendment that (i) are accepted in writing by the other Party or (ii) reflect actions
permitted by this Agreement to be taken prior to December 31, 2007.

     3.3 Taxpayer Identification Numbers. At or prior to Closing, Seller and Buyer will
provide one another with their respective U.S. taxpayer identification numbers.

     3.4 Consents. Seller shall promptly take such reasonable actions necessary to obtain
and deliver at Closing any Third Party Consents which are required to consummate the transactions
contemplated hereby. The form and content of all of Seller’s solicitations for such Consents
affecting the Assets shall be subject to Buyer’s approval.

     3.5 Asset Due Diligence. Between the date of this Agreement and the end of the
Transfer Period, Buyer and/or its designees shall have the right of ingress and egress to the real
property containing the Assets so that Buyer may make any inspections, tests, surveys and studies
of the Assets that it may desire, including environmental surface sampling or other tests of air,
soils, water, groundwater, and other liquids as part of a Phase I environmental analysis. If any
such investigation should include any drilling, trenching, or other invasive surface disturbing
tests, Seller’s prior written consent, which can be withheld for any reason, must be obtained;
provided, however, that any access by Buyer to or of the real property containing the Assets shall
be conditioned upon Buyer’s first executing and delivering the standard form of access agreement
provided by the CONSOL Parties.

          (a) If Buyer engages an environmental contractor to conduct such inspections and tests, Buyer
shall provide to Seller a detailed scope of work and/or work plan pursuant to which the assessment
work will take place.

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          (b) After giving Seller such advance notice as is reasonably possible, which notice, except as
provided herein, may be oral (in person or by telephone), Buyer and/or its designee may enter the
real property containing the Assets during normal business hours and may also make arrangements to
enter the real property containing the Assets at other times upon agreement from Seller. Buyer
shall make such inspections, tests, surveys and studies with a minimum of interference to Seller’s
business. Seller may have a representative present (at Seller’s expense) at all phases of Buyer’s
work on the real property containing the Assets.

          (c) At Seller’s written request, Buyer shall promptly deliver to Seller a copy of every report
of findings obtained by Buyer as a result of the activities described in this Section 3.5.

          (d) Buyer’s inspections, tests, surveys and studies conducted pursuant to this Section 3.5
shall be at Buyer’s sole expense. However, unless otherwise agreed in writing, Buyer shall not be
obligated to pay for or reimburse Seller for any costs or expenses that may be incurred by Seller
in connection with such tests, including costs associated with production being temporarily shut-in
(e.g., time value of money).

          (e) Seller hereby releases, acquits and forever discharges Buyer and its representatives,
agents, employees, attorneys, assigns, officers, directors, shareholders, insurers, Affiliates, and
all others for whom Buyer may be vicariously liable (the “Buyer Group”) from and against Losses
arising out of, resulting from, or in any manner related to Buyer’s inspection or testing of the
Assets and the real property containing such Assets under the terms of this Agreement, unless such
Losses are the result of the gross negligence or willful misconduct of the Buyer Group (such Losses
“Indemnified Losses”). Buyer hereby agrees to indemnify Seller and its representatives, agents,
managers, employees, attorneys, assigns, officers, members, insurers, Affiliates, and all others
for whom Seller may be vicariously liable (the “Seller Group”) from and against any Indemnified
Losses arising out of, resulting from, or in any manner related to Buyer’s inspection or testing of
the Assets or the real property containing such Assets under the terms of this Agreement. The
provisions of this Section 3.5(e) shall survive termination of this Agreement; provided that
Buyer’s indemnity obligation herein shall expire as to any claims of the Seller Group hereunder
that are not delivered to Buyer in writing on or before the third anniversary of the Closing Date.

          (f) Except as to the books, records, data and other information excluded pursuant to Sections
2.1(c)(v) and 2.1(d), Seller agrees (i) to give Buyer and its representatives full access to, and
the right to copy, the Oil and Gas Books and Records, and (ii) furnish or make available to Buyer
such financial and operating data and other information relating solely to the business and
properties comprising the Assets as Buyer shall from time to time reasonably request, but in either
case only to the extent that Seller may do so without violating any confidentiality or contractual
obligation to a third Person.

ARTICLE IV.

Closing 

     4.1 Closing. Subject to the satisfaction or waiver of the conditions set forth in
Article IX, the consummation of the transactions contemplated hereby (the “Closing”) shall occur on
or

12

 

before 4:00 P.M. Central Daylight Time on Wednesday, June 20, 2007, at a place mutually agreed
to by Seller and Buyer in writing, or at such other date and time as the Parties may agree in
writing.

     4.2 Buyer’s Closing Deliveries. At Closing, Buyer shall deliver or cause to be
delivered to Seller the following:

          (a) Purchase Price. The Purchase Price, by wire transfer of immediately available
funds to the account designated by Seller.

          (b) Officer’s Certificate. The certificate described in Section 9.1(c).

          (c) Other. Such other documents and instruments as may be necessary to effect the
intent of this Agreement and consummate the transactions contemplated hereby.

     4.3 Seller Closing Deliveries. At Closing, Seller shall deliver or cause to be
delivered to Buyer the following:

          (a) Officer’s Certificate. The certificate described in Section 9.2(c).

          (b) FIRPTA Certificate. A FIRPTA Non-Foreign Seller Certificate certifying that
Seller is not a foreign Person within the meaning of Section 1445 of the Code, reasonably
satisfactory in form and substance to Buyer.

          (c) Other. Such other documents and instruments as may be necessary to effect the
intent of this Agreement and consummate the transactions contemplated hereby.

     4.4 Transfer Documents. At or prior to Closing, Seller and Buyer shall use their
respective best efforts to agree on the form and substance of the following instruments, each to be
effective as of the Effective Time (collectively, the “Transfer Documents”):

          (a) Deed. A deed, bill of sale, and assignment, containing a special warranty of
title by, through and under Seller and the CONSOL Parties, but not otherwise, by which Seller
transfers and conveys the Assets, and by which Buyer agrees to assume, pay, discharge and perform
the Assumed Liabilities (the “Deed”), subject to and reserving in favor of Seller a right of
reversion (the “Reversion”) commencing upon completion by Buyer of all coal mining and post-mining
(including reclamation) operations relating to the Kentucky Nos. 9 and 11 coals located on or under
the real property containing the Oil and Gas Interests. For purposes hereof, “Non-Reversionary
Interests” shall include:

               (i) all Oil and Gas Interests in lands which are not producing as of the effective date of the
Reversion but which are subject to plugging, abandonment, and reclamation duties and obligations
imposed by applicable Legal Requirements on Buyer or its successor and assigns;

               (ii) all Oil and Gas Interests subject to rights and
obligations under Contracts between Buyer and third Persons for the
exploration,
development or production of Oil and Gas which exist as of the
effective date of the Reversion; and

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               (iii) all Oil and Gas Interests which are or include working interests and which are producing
in commercial quantities as of the effective date of the Reversion.

The Deed shall provide that Buyer shall not be liable to Seller for conversion or waste based on
any action or inaction of Buyer with respect to any Oil and Gas Interests which are subject to the
Reversion.

     4.5 Other Transfer Documents. Such other documents and instruments, including without
limitation notices to operators and letters in lieu of transfer orders, as shall be reasonably
requested by Buyer to effect the intent of this Agreement and consummate the transaction
contemplated hereby. To the extent any of the Oil and Gas Interests are located on federal, state,
or tribal lands, the Parties will execute and deliver officially approved federal, state, or tribal
assignment forms, and such forms shall be deemed to be subject to and incorporate the terms of the
other corresponding Transfer Documents.

ARTICLE V.

Transfer Period Covenants 

     5.1 Transfer Period. During the period ending on the ninetieth (90th) day following
the Closing Date (the “Transfer Period”), the Parties shall finalize, execute, and deliver any
Transfer Documents that were not executed and delivered at Closing together with such other
documents as may be necessary to convey, assign, and transfer the Assets in accordance with Legal
Requirements in a form acceptable to Buyer.

     5.2 Further Assurances.

          (a) At or after Closing, each of Seller and Buyer, at the reasonable request of the other,
shall each promptly execute and deliver, or cause to be executed and delivered, to the other all
such documents and instruments, in addition to those otherwise required by this Agreement, in form
and substance reasonably satisfactory to the other, and take all actions necessary or desirable and
consistent with this Agreement, in order to carry out or evidence the terms of this Agreement.

          (b) In the event that, on or prior to December 31, 2007, either Party discovers that any
Transfer Document or Exhibit “A”, attached hereto, inaccurately describes the Assets, the
applicable Party shall promptly prepare, execute, and deliver such additional transfer or
corrective documents, or Exhibit to this Agreement as necessary to effectuate the intent of the
Parties in this Agreement that Seller assign, sell and transfer, free and clear of all Liens (other
than Permitted Liens), all of its rights, titles, estates and interests in, to, under or derived
from the Assets described at Section 2.1(c) hereof.

     5.3 Obtaining Consents and Delivery of Notices.

          (a) During the Transfer Period, Seller shall continue to use
commercially reasonable efforts to obtain in writing as promptly as
possible any Third Party Consent, or other authorization or
approval required to be obtained by Seller in connection with
the transactions contemplated hereunder, which was not
obtained on or before Closing (a “Post-Closing

14

 

Consent”) in form and substance reasonably satisfactory to Buyer. A true and
complete copy of any such Post-Closing Consent shall be delivered to Buyer promptly
after it has been obtained.

          (b) If any Post-Closing Consent or other required authorization or approval shall not have
been obtained prior to the end of the Transfer Period, Seller and Buyer shall cooperate in a
mutually agreeable arrangement under which Buyer would obtain the benefits and be responsible for
the obligations in accordance with this Agreement in respect of any Asset or any claim, right, or
benefit arising hereunder the assignment of which without the consent of the third Person thereto
would constitute a breach or other contravention of such Asset or in any way adversely affect the
rights of the Buyer thereunder, including sub-contracting, sub-licensing, or sub-leasing to Buyer,
or under which Seller would enforce for the benefit of Buyer, with Buyer assuming Seller’s
obligations, any and all rights of Seller against the third Person in question. Seller shall
promptly pay to Buyer when received all monies received by Seller in respect of any such Asset or
any claim, right, or benefit arising thereunder.

          (c) During the Transfer Period, each Party shall deliver such notices of this Agreement and
the transaction contemplated hereby as shall be required by applicable Legal Requirements or
Contracts.

     5.4 Governmental Filings. The Parties shall, as promptly as practicable and in any
event before the end of the Transfer Period:

          (a) make all required filings, if any, with, and prepare applications to and conduct
negotiations with, each Governmental Authority as to which such filings, applications or
negotiations are necessary or appropriate in the consummation of the transactions contemplated
hereby, and

          (b) provide such information as each may reasonably request to make such filings, prepare such
applications and conduct such negotiations. Each Party shall cooperate with and use all reasonable
efforts to assist the other with respect to such filings, applications and negotiations.

     5.5 Recording Fees, Transfer Taxes and Similar Costs. Any documentary, filing and
recording fees and similar costs incurred and imposed upon, or with respect to the transfers of the
Assets contemplated under this Agreement shall be borne by the Buyer. All real estate transfer or
sale taxes which are incurred with respect to any Asset being transferred pursuant to this
Agreement shall be paid by the Buyer.

ARTICLE VI.

Seller’s Representations and Warranties

     As a material inducement to Buyer to enter into this Agreement and to consummate the
transactions contemplated hereby, Seller represents and warrants to Buyer that:

     6.1 Organization and Standing. It is a limited liability company, duly organized and
validly existing under the laws of the state of
Virginia, and is duly qualified to carry on its business in all states in which are located
that portion of the Assets owned, leased, controlled, or claimed by CNX Gas Company LLC.

15

 

     6.2 Power. It has all requisite limited liability company power and authority to
carry on its business as presently conducted and to enter into this Agreement and the Transfer
Documents and to perform its obligations hereunder and thereunder. The execution and delivery of
this Agreement or the Transfer Documents do not, and the fulfillment of and compliance with the
terms and conditions hereof will not, contravene, violate, or be in conflict with, any provision of
its organizational or governing documents or resolution adopted by its governing body.

     6.3 Authorization and Enforceability. The execution, delivery and performance of this
Agreement and the transactions contemplated hereby have been duly and validly authorized by all
requisite limited liability company action on its part. This Agreement constitutes, and all
agreements and instruments delivered by it pursuant hereto, constitute legal, valid and binding
obligations upon it, enforceable in accordance with their respective terms, subject, however, to
the effects of bankruptcy, insolvency, reorganization, moratorium and other laws for the protection
of creditors, as well as to general principles of equity, regardless of whether such enforceability
is considered in a proceeding in equity or at law.

     6.4 Liability for Brokers’ Fees. It has incurred no liability, contingent or
otherwise, for brokers’ or finders’ fees relating to the transactions contemplated by this
Agreement for which Buyer shall have any responsibility whatsoever.

     6.5 Alien Status. It is not a non-resident alien, foreign corporation, foreign
partnership, foreign trust or foreign estate alien, as those terms are defined in the Code.

     6.6 Litigation. There is no Litigation pending or, to its Knowledge, threatened in
writing, against it, the CONSOL Parties, or any of its Assets in any court or by or before any
Governmental Authority or arbitration or mediation that would materially adversely affect such of
its Assets, or impair its ability to consummate, or that would reasonably be expected to prevent,
delay or make illegal the transactions contemplated hereby.

     6.7 Orders. There are no Orders against it or the other CONSOL Parties, or affecting
any of its Assets, that would materially adversely affect its Assets, or impair its ability to
consummate, or that would reasonably be expected to prevent, delay or make illegal the transactions
contemplated hereby.

     6.8 Rentals and Royalties. There are no rentals or royalties of any type or nature
payable or owed with respect to the Assets to any Person claiming rights or interest in such
rentals and royalties by, through or under Seller, any of its Affiliates, or the CONSOL Parties.

     6.9 No Conflicts. Except as otherwise expressly provided in Section 5.3 regarding
Consents, the execution and delivery of this Agreement does not, and the fulfillment of and
compliance with the terms and conditions hereof will not:

          (a) result in the imposition or creation of any Lien, charge or other encumbrance (other than
a Permitted Lien) upon or with respect to any of its Assets;

          (b) contravene, violate, or be in conflict with or breach any
material provision of, or give any Person the right to declare a default or
exercise any remedy under, or to cancel,

16

 

terminate or modify, any Contract to which it is a party or by which it or any of its Assets
are bound or its governing documents; or

          (c) contravene, violate, be in conflict with, or give any Governmental Authority or
other Person the right to challenge any of the transactions contemplated herein or
to exercise any remedy or obtain any relief under, any Legal Requirements or any
Order applicable to it or to any of its Assets, except such contraventions,
violations, challenges, conflicts or claims for or exercises of any remedy or relief
as would not, individually or in the aggregate, have a material adverse effect on
its Assets, or its ability to consummate this Agreement or the transactions
contemplated hereby.

     6.10 Compliance with Laws. Except as would not have a material adverse effect on any
of its Assets, to its Knowledge:

     (a) its and the CONSOL Parties’ ownership and operation, and any third-party operator’s
operation, of its Assets is and has been in compliance with all applicable Legal Requirements;

          (b) all Permits and Bonds applicable to its Assets are specified in the attached Schedule
6.10(b), and:

               (i) it, or any third-party operator of its Assets, has acquired and maintains all Permits and
Bonds from appropriate Governmental Authorities necessary to conduct any operations now being
performed in compliance with all applicable Environmental Laws and other Legal Requirements and
Orders;

               (ii) it, or any third-party operator of its Assets, is in compliance with all such Permits and
Bonds, and all such Permits and Bonds are in full force and effect; and

               (iii) there is no Litigation, pending or threatened, challenging or seeking revocation or
limitation of any such Permits and Bonds;

          (c) All plans, applications, reports, certificates and other instruments filed by it or any
third-party operator of its Assets with any Governmental Authority with respect to its Assets do
not:

               (i) contain any untrue statement of fact; or

               (ii) omit any statement of fact necessary to make the statements therein not misleading.

     6.11 Environmental Conditions.

          (a) To its’ Knowledge, with respect to its Assets, it, the CONSOL Parties, and each
third-party operator of its Assets have been in material compliance with, and have not been and are
not in any material respect in violation of or liable under, any Environmental Law in effect on the
date hereof. It has no Knowledge of any facts relating to the condition, use or
operation of any of its Assets that are reasonably likely to constitute or result in a
violation of

17

 

any Environmental Law in effect on the date hereof, or result in a suit, action,
claim, investigation or inquiry under or with respect to such Environmental Law.

          (b) With respect to its Assets, it has not and, to its Knowledge, the CONSOL Parties, and each
third-party operator of its Assets have not, received any actual or threatened Order, notice or
other communication from a Governmental Authority or other Person of any actual or potential
violation or failure to comply with any Environmental Law in effect on the date hereof.

          (c) None of the estates in land containing the Assets is a “Superfund” site and, to its
Knowledge, none of the estates in land containing the Assets is being investigated or evaluated by
any Governmental Authority as a “Superfund” site. To its Knowledge, no substances or wastes have
been disposed of or released onto the estates in land containing the Assets in violation of any
applicable Environmental Laws.

     6.12 Taxes. Except as set forth on Schedule 6.12, all Taxes due and payable
on or before the Effective Time applicable to its, or the other CONSOL Parties’, ownership of or
operation of its Assets have been duly and timely paid except as may be contested by it or a
third-party operator of its Assets in good faith. All reports and returns required to be filed by
it, or the other CONSOL Parties, prior to the Effective Time with respect to such Taxes have been
duly and timely filed. There are no Liens or encumbrances on any of its Assets that arose in
connection with any failure or alleged failure to pay any Taxes, and it has no Knowledge of any
basis for assertion of any claims attributable to Taxes which, if adversely determined, would
result in any such Liens or encumbrances.

     6.13 Regulatory Approvals. Except for the Transfer Approvals, no governmental notice,
filing, authorization, approval, order or consent is required to be given, filed or obtained by it
with respect to a Governmental Authority in connection with the execution, delivery and performance
by it of this Agreement or the transactions contemplated hereby.

     6.14 Limited Title Warranty as to Assets. Except for Permitted Liens, (i) its Assets
are free and clear of valid claims or rights of any Person claiming rights or interests therein by,
through or under it, any of its Affiliates, or the CONSOL Parties; (ii) to its Knowledge, no Person
claims an interest in or Lien upon its Assets; and (iii) to its Knowledge, it has acquired from the
CONSOL Parties all rights, title, and interests to its Assets that were owned by the CONSOL Parties
on the date of such acquisition, free and clear of all Liens created by, through or under any
CONSOL Party. It hereby expressly disclaims all other representations and warranties, express or
implied, with respect to its title to its Assets except as set forth in Section 6.18 below, or in
the Transfer Documents.

     6.15 Material Contracts. Schedule 2.1(c)(ii) contains a complete and accurate
list of all Material Contracts to which it is a party, all of which have been provided to Buyer.

          (a) To its Knowledge, each of such Material Contracts is valid and in full force and effect
and is enforceable in accordance with its terms against the parties thereto.

18

 

          (b) It has not received any written notice of an asserted material default by it, or its
Affiliates, thereunder.

          (c) It is not in material default or in arrears in any material respect in the performance or
satisfaction of their obligations thereunder and, to its Knowledge, it has fulfilled when due, or
have taken all action necessary to enable them to fulfill when due, all of their obligations
thereunder.

          (d) To its Knowledge, Persons other than it, or its Affiliates, who are parties to any such
Material Contracts are not in material default or in arrears in any material respect in the
performance or satisfaction of their obligations thereunder.

     6.16 Employees.

          (a) Except as specified in Schedule 6.16:

               (i) it is not a party to or subject to any pending labor union or collective bargaining
agreement or arrangement in connection with its Assets; and

               (ii) to its Knowledge, it is not party to any material labor or employment dispute involving
any employees employed in connection with its Assets.

          (b) It has provided Buyer with a copy of the collective bargaining agreements or arrangements
specified in Schedule 6.16.

     6.17 No Material Adverse Change.

          (a) To its Knowledge, since the Effective Time, there has not been any material adverse change
in the operations or condition of its Assets, and no event has occurred or circumstance exists that
may result in such a material adverse change; provided, however, that in no event shall any change
resulting from conditions affecting the Oil and Gas industry generally, changes in commodity
prices, or changes in general business or economic conditions constitute a material adverse change
in the operations or condition of the Assets.

          (b) Since the Effective Time, it has not sold, transferred or abandoned any part of its Assets
or terminated any of the Material Contracts, or voluntarily permitted any of its Assets or any
material rights with respect thereto to expire, and has not waived or released any material rights
with respect to its Assets.

     6.18 Undisclosed Material Liabilities. Except (a) for the Seller Retained
Liabilities, (b) as set forth in Schedule 6.18, (c) liabilities arising in the ordinary
course of business since the Effective Time, (d) Permitted Liens, or (e) liabilities which,
individually or in the aggregate, are not material to its Assets, there are no liabilities relating
to its Assets of any kind whatsoever, whether accrued, contingent, absolute, determined,
determinable or otherwise, and there is no existing condition, situation or set of circumstances
which would reasonably be expected to result in such a liability.

19

 

     6.19 Insurance. All of its material Assets are covered by self insurance or currently
effective insurance policies of such types and amounts as are consistent with customary practices
and standards in the Oil and Gas industry; provided, however, that with respect to Oil and Gas in
the ground, no insurance is in place. It does not know of any threatened termination of, premium
increase with respect to, or material alteration of coverage under any such policies.

     6.20 Intellectual Property. Except as would not, individually or in the aggregate,
reasonably be expected to have a material adverse effect on the ownership or operation of its
Assets after Closing, all activities relating to its Assets since April 1, 2001 have been conducted
in such a manner so as not to violate or infringe upon the rights, or give rise to any rightful
claim of any Person for copyright, trademark, service mark, patent, license or other intellectual
property right infringement.

     6.21 Disclosure. To its Knowledge, none of the statements, representations or
warranties made by it in this Agreement or in any Exhibit, Schedule, Transfer Document, or
certificate delivered with or pursuant to this Agreement contains any untrue statement of fact or
omits to state any material fact necessary to be stated in order to make the statements,
representations or warranties contained herein or therein not misleading.

     6.22 Effectiveness of Representations and Warranties. The representations and
warranties contained in the foregoing Article VI are made as of the Effective Time, the Closing
Time, and the last day of the Transfer Period.

ARTICLE VII.

Buyer’s Representations and Warranties

     As a material inducement to Seller to enter into this Agreement and to consummate the
transactions contemplated hereby, Buyer represents and warrants to Seller that:

     7.1 Organization and Standing. It is a limited liability company, duly organized and
validly existing under the laws of the state of Delaware, and is duly qualified to carry on its
business in all states in which are located the Assets to be acquired by it hereunder.

     7.2 Power. It has all requisite limited liability company power and authority to
carry on its business as presently conducted and to enter into this Agreement and the Transfer
Documents and to perform its obligations hereunder and thereunder. The execution and delivery of
this Agreement or the Transfer Documents do not, and the fulfillment of and compliance with the
terms and conditions hereof will not, contravene, violate, or be in conflict with, any provision of
its organizational or governing documents or resolutions adopted by its governing body.

     7.3 Authorization and Enforceability. The execution, delivery and performance of this
Agreement and the transactions contemplated
hereby have been duly and validly authorized by all requisite limited liability company action
on its part. This Agreement constitutes, and all agreements and instruments delivered by it
pursuant hereto constitute, the legal, valid and binding obligations of it, enforceable in
accordance with their respective terms, subject, however, to the effects of bankruptcy, insolvency,
reorganization, moratorium and other laws for the

20

 

protection of creditors, as well as to general principles of equity, regardless of whether such
enforceability is considered in a proceeding in equity or at law.

     7.4 Liability for Brokers’ Fees. It has incurred no liability, contingent or
otherwise, for brokers’ or finders’ fees relating to the transactions contemplated by this
Agreement for which Seller shall have any responsibility whatsoever.

     7.5 Alien Status. It is not a non-resident alien, foreign corporation, foreign
partnership, foreign trust or foreign estate alien, as those terms are defined in the Code.

     7.6 Litigation. There is no Litigation pending or, to its Knowledge, threatened in
writing against it or any of its assets in any court or by or before any Governmental Authority, or
arbitration or mediation that would impair its ability to consummate, or that would reasonably be
expected to prevent, delay or make illegal the transactions contemplated hereby.

     7.7 Orders. There are no Orders against Buyer or affecting any of its assets that
would impair its ability to consummate, or that would reasonably be expected to prevent, delay or
make illegal the transactions contemplated hereby.

     7.8 No Conflicts. The execution and delivery of this Agreement does not, and the
fulfillment of and compliance with the terms and conditions hereof will not

          (a) contravene, violate, or be in conflict with or breach any material provision of, or give
any Person the right to declare a default or exercise any remedy under, or to cancel, terminate or
modify, any Contract to which it is a party or by which it or any of its assets are bound or its
governing documents; or

          (b) contravene, violate, be in conflict with, or give any Governmental Authority or other
Person the right to challenge any of the transactions contemplated herein or to exercise any remedy
or obtain any relief under, any Legal Requirements or any Order applicable to it, except such
contraventions, violations, challenges, conflicts or claims for or exercises of any remedy or
relief as would not, individually or in the aggregate, have a material adverse effect on its
ability to consummate this Agreement or the transactions contemplated hereby.

     7.9 Regulatory Approvals. Except for the Transfer Approvals, no governmental notice,
filing, authorization, approval, order or consent is required to be given, filed or obtained by it
with respect to a Governmental Authority in connection with the execution, delivery and performance
by it of this Agreement or the transactions contemplated hereby.

     7.10 Buyer Due Diligence. It has conducted such due diligence investigations
concerning the Assets as it has determined to be appropriate. It has not relied upon any estimates
by Seller concerning any Oil or Gas reserves included in the Assets or concerning the nature,
quantity or quality or costs of producing such
Oil or Gas, and with respect to such matters and other matters concerning the Assets which are
not specifically addressed by Seller’s representations and warranties in Article VI of this
Agreement, it has relied exclusively upon its own due diligence investigation of the Assets,
including the advice of such experts or consultants as it has determined to be necessary or
desirable in its sole discretion. It acknowledges that Seller’s records and files concerning the
Assets which have been made available for inspection

21

 

by it contain valuative and interpretive
reports, studies and other material, and that it has not relied upon such reports, studies or other
material in electing to purchase the Assets, but has undertaken such independent analysis and other
due diligence inquiries concerning the Assets as it has determined to be necessary or desirable in
its sole discretion.

     7.11 Disclosure. To its Knowledge, none of the statements, representations or
warranties made by it in this Agreement or in any Exhibit, Schedule, Transfer Document, or
certificate delivered with or pursuant to this Agreement contains any untrue statement of fact or
omits to state any material fact necessary to be stated in order to make the statements,
representations or warranties contained herein or therein not misleading.

     7.12 Effectiveness of Representations and Warranties. The representations and
warranties contained in the foregoing Article VII are made as of the Effective Time, the Closing
Time, and the last day of the Transfer Period.

ARTICLE VIII.

Other Covenants

     8.1 Certain Affirmative Covenants of Seller. Except as Buyer may otherwise consent in
writing, between the Effective Time and the end of the Transfer Period, Seller, with respect to the
Assets (or, with respect to the Assets Seller transfers to Buyer at Closing, during the period
between the Closing Date and the end of the Transfer Period, Seller acting as Buyer’s Agent),
shall:

          (a) operate or cause to be operated such Assets only in the usual, regular and ordinary course
and in accordance with applicable Legal Requirements (including paying all royalties and rentals
when due) and, to the extent consistent with such operation, (i) use its commercially reasonable
efforts to preserve existing relationships with Governmental Authorities, suppliers, lessors,
lessees, customers and others having business dealings involving such Assets, unless Buyer requests
otherwise, and (ii) use commercially reasonable efforts to keep available the services of its
employees providing services in connection with such Assets;

          (b) perform all of its obligations under all of the Material Contracts without material breach
or default, and in material compliance with all Legal Requirements;

          (c) maintain or cause to be maintained (i) such Assets in good condition and repair, ordinary
wear excepted, and (ii) in full force and effect all existing policies of insurance with respect to
such Assets, in such amounts and with respect to such risks as are customarily maintained in the
Oil and Gas industries;

          (d) maintain or cause to be maintained the Oil and Gas Books and Records with respect to the
Assets in the usual, regular and ordinary manner on a basis consistent with past practices; and

          (e) (i) Give or cause to be given to Buyer, and its counsel, accountants and other
representatives, reasonable access during normal business hours to all of the Assets, the Oil and
Gas Books and Records (including all account books of original entry, general ledgers and financial
records used in connection with its Assets), as applicable, and appropriate personnel,

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and (ii)
furnish or cause to be furnished to Buyer and such representatives all such additional documents,
financial information and other information as the other from time to time reasonably may request;
provided that no investigation shall affect or limit the scope of any of the representations and
warranties; and any investigation pursuant to this subsection shall be conducted in such manner as
not to interfere unreasonably with the conduct of the business of Seller.

     8.2 Certain Negative Covenants of Seller. Except as Buyer may otherwise consent in
writing, or as contemplated by this Agreement, between the Effective Time and the end of the
Transfer Period (or, with respect to the Assets Seller transfers to Buyer at Closing, during the
period between the Closing Date and the end of the Transfer Period, Seller acting as Buyer’s
Agent), shall not:

          (a) modify, terminate, renew, suspend or abrogate any Material Contract other than in the
ordinary course of business;

          (b) enter into any Contract or commitment of any kind relating to its Assets which would be
binding on Buyer after Closing and which is not being entered into in the usual regular and
ordinary course and in accordance with past practices, is not on arm’s-length terms, or is with an
Affiliate of Seller;

          (c) enter into any transaction or take any action that would result in any of its
representations and warranties in this Agreement or in any Transfer Document not being true and
correct in all material respects when made or at Closing (unless and to the extent that any such
representation or warranty speaks specifically as of an earlier date, in which case, at such
earlier date);

          (d) sell, assign, transfer or otherwise dispose of any of its Assets except in the ordinary
course of business and except for (i) the disposition of obsolete or worn-out equipment, or (ii)
dispositions with respect to which such Assets are replaced with assets of at least equal value; or

          (e) mortgage, pledge or subject to any material Lien that would survive the Closing any of the
Assets other than Permitted Liens.

     8.3 Confidentiality and Publicity.

          (a) Any non-public information that either Party may obtain from the other in connection with
this Agreement shall be confidential. Each Party shall keep confidential any non-public
information that such Party may receive from another Party unrelated to the Assets
transferred hereunder. All information that a Party is required to keep confidential pursuant
to this Section shall be referred to as “Confidential Information”.

          (b) Each Party shall not disclose any Confidential Information to any other Person (other than
its Affiliates and its Affiliates’ directors, officers and employees, and representatives of its
advisers and lenders, in each case, whose knowledge thereof is necessary in order to facilitate the
consummation of the transactions contemplated hereby, in which case such

23

 

Party shall be responsible
for any breach by any such Person) or use such information to the detriment of the other; provided
that:

               (i) such Party may use and disclose any Confidential Information once it has been publicly
disclosed (other than by such Party in breach of its obligations under this Section 8.3) or which,
to its knowledge, rightfully has come into the possession of such Party (other than from the other
Party); and

               (ii) to the extent that such Party may, in the reasonable judgment of its counsel, be
compelled by Legal Requirements to disclose any of such information, such Party may disclose such
information if it has used commercially reasonable efforts, and has afforded the other the
opportunity, to obtain an appropriate protective order, or other satisfactory assurance of
confidential treatment, for the information compelled to be disclosed.

          (c) In the event of termination of this Agreement by mutual agreement of the Parties as
provided in Section 10.1:

               (i) the obligation set forth in this Section 8.3 shall continue for a period of two (2) years
after such termination; and

               (ii) each Party shall use commercially reasonable efforts to cause to be delivered to the
other, and shall retain no copies of, any documents, work papers or other materials obtained by
such Party or on its behalf from the other, whether so obtained before or after the execution of
this Agreement.

          (d) Each Party shall consult with and cooperate with the other with respect to the content and
timing of all press releases and other public announcements concerning this Agreement and the
transactions contemplated hereby. The Party making the release or public announcement shall
provide a draft of the proposed release or public announcement relating to the transaction
contemplated by this Agreement to the other Party at least two (2) Business Days prior to issuing
such release or making such announcement. Except as required by applicable Legal Requirements or
by any national securities exchange or quotation system, neither Party shall make any such release,
announcement or statement without the prior written consent and approval of the other, which shall
not be unreasonably withheld. Each Party shall each respond promptly to any such request for
consent and approval.

          (e) Upon request by either Party and as necessary in fulfilling their obligations under this
Agreement, the Parties agree that each Party, including all of its agents, employees, officers,
directors, consultants, and advisors, will execute and deliver separate confidentiality agreements
with the other Party whereby, among other things, such Party will
agree to maintain all information strictly confidential and shall not disclose any information
to any Affiliates not required to execute this Agreement (including its agents, employees,
officers, directors, consultants, and advisors), any Governmental Authority, or any third-persons
as designated by the requesting Party.

     8.4 DISCLAIMERS. THE PARTIES AGREE THAT, TO THE EXTENT REQUIRED BY APPLICABLE LEGAL
REQUIREMENTS TO BE OPERATIVE, THE

24

 

DISCLAIMERS OF WARRANTIES CONTAINED IN THIS SECTION ARE
“CONSPICUOUS” DISCLAIMERS FOR THE PURPOSES OF ANY APPLICABLE LEGAL REQUIREMENT, RULE OR ORDER.
EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT AND THE TRANSFER DOCUMENTS, SELLER MAKES NO, AND
HEREBY EXPRESSLY DISCLAIMS AND NEGATES, REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED,
CONCERNING THE ASSETS.

ARTICLE IX.

Conditions Precedent

     9.1 Conditions to Seller’s Obligations. The obligations of Seller to proceed with the
Closing of the transaction contemplated by this Agreement shall be subject to the following
conditions, which may be waived by Seller:

          (a) Accuracy of Representations and Warranties. The representations and warranties of
Buyer in this Agreement, if qualified by a reference to materiality, are true and, if not so
qualified, are true in all material respects at and as of Closing with the same effect as if made
at and as of Closing, except for changes, if any, permitted or contemplated by this Agreement and
except to the extent a different date is specified therein, in which case such representation and
warranty if qualified by a reference to materiality shall be true and correct as of such date and,
if not so qualified, shall be true and correct in all material respects as of such date.

          (b) Performance of Agreements. Buyer has performed in all material respects all
obligations and agreements and has complied in all material respects with all covenants in this
Agreement to be performed and complied with by it at or before Closing.

          (c) Officer’s Certificate. Seller has received a certificate executed by an executive
officer of Buyer, dated as of Closing, reasonably satisfactory in form and substance to Seller,
certifying that the conditions specified in Sections 9.1(a) and (b) have been satisfied, as of
Closing.

          (d) Consents. Seller has received evidence, in form and substance reasonably
satisfactory to it, that all material Third Party Consents (other than Post-Closing Consents and
other Third Party Consents the absence of which would not have a material effect on the affected
Asset) have been obtained and are in effect.

          (e) Closing Documents. Seller has executed and delivered the Closing Documents.

          (f) Legal Proceedings. There is no Legal Requirement, and no Judgment has been
entered and not vacated by any Governmental Authority of competent jurisdiction in any Litigation
or arising therefrom, which enjoins, restrains, makes illegal or prohibits consummation of the
transactions contemplated by this Agreement or by any Transfer Document, or otherwise materially
and adversely affects the operation of the Assets, and there is no Litigation pending which was
commenced by any Governmental Authority seeking, or which if successful would have the effect of,
any of the foregoing.

25

 

          (g) Surface Use Agreement. The Parties shall have agreed on the form of a Surface Use
Agreement.

          (h) CONSOL Closing. Seller and the CONSOL Parties shall have finalized the closing of
that certain Agreement of Sale, dated June 8, 2007, by and between Consolidation Coal Company and
Seller.

     9.2 Conditions to Buyer’s Obligations. The obligations of Buyer to proceed with the
Closing of the transaction contemplated by this Agreement shall be subject to the following
conditions, which may be waived by Buyer:

          (a) Accuracy of Representations and Warranties. The representations and warranties of
Seller in this Agreement, if qualified by a reference to materiality, are true and, if not so
qualified, are true in all material respects at and as of Closing with the same effect as if made
at and as of Closing, except for changes, if any, permitted or contemplated by this Agreement and
except to the extent a different date is specified therein, in which case such representation and
warranty if qualified by a reference to materiality shall be true and correct as of such date and,
if not so qualified, shall be true and correct in all material respects as of such date.

          (b) Performance of Agreements. Seller has performed in all material respects all
obligations and agreements and has complied in all material respects with all covenants in this
Agreement to be performed and complied with by it at or before Closing.

          (c) Officer’s Certificate. Buyer has received a certificate executed by an executive
officer of CNX Gas Corporation, dated as of Closing, reasonably satisfactory in form and substance
to Buyer, certifying that the conditions specified in Sections 9.2(a) and (b) have been satisfied,
as of Closing.

          (d) Consents. Buyer has received evidence, in form and substance reasonably
satisfactory to it, that all Third Party Consents (other than Post-Closing Consents and other Third
Party Consents the absence of which would not have a material adverse effect on the affected Asset)
have been obtained and are in effect.

          (e) Closing Documents. Buyer has executed and delivered the Closing Documents.

          (f) Legal Proceedings. There is no Legal Requirement, and no Judgment has been
entered and not vacated by any Governmental Authority of competent jurisdiction in any Litigation
or arising therefrom, which (i) enjoins, restrains, makes illegal or prohibits
consummation of the transactions contemplated by this Agreement or by any Transfer Document or
(ii) requires separation or divestiture by Buyer of all or any significant portion of the Assets
after Closing or otherwise materially and adversely affects the operation of the Assets, and there
is no Litigation pending which was commenced by any Governmental Authority seeking, or which if
successful would have the effect of, any of the foregoing.

          (g) No Material Adverse Change. There has been no material adverse change in the
Assets since the Effective Time.

26

 

          (h) Documents and Records. Seller has delivered or made available to Buyer all Oil
and Gas Books and Records.

          (i) Surface Use Agreement. The Parties shall have agreed on the form of a Surface Use
Agreement.

ARTICLE X.

Termination, Effect of Termination and Specific Performance

     10.1 Termination. This Agreement may only be terminated upon the mutual written
agreement of Seller and Buyer.

     10.2 Effect of Termination. If this Agreement is terminated pursuant to Section 10.1,
all obligations of the Parties hereunder shall terminate, except for the obligations set forth in
Sections 8.3, 12.2, and 12.3. Termination of this Agreement pursuant to Section 10.1 shall not
limit or impair any remedies that either Buyer or Seller may have with respect to a breach or
default of the covenants, agreements or obligations hereunder occurring prior to termination.

     10.3 Specific Performance. The Parties recognize that their rights under this
Agreement are unique and, accordingly, the Parties shall, in addition to such other remedies as may
be available to any of them at law or in equity, have the right to enforce their rights hereunder
by actions for injunctive relief and specific performance to the extent permitted by applicable law
so long as the Party seeking such relief is prepared to consummate the transactions contemplated
hereby. The Parties agree that monetary damages would not be adequate compensation for any loss
incurred by reason of a breach of the provisions of this Agreement and hereby agree to waive the
defense in any action for specific performance that a remedy at law would be adequate. The Parties
waive any requirement (i) for security or the posting of any bond or other surety in connection
with any temporary or permanent award or injunctive, mandatory or other equitable relief and (ii)
the defense that the Party moving for such relief has an adequate remedy at law, but the Parties do
not waive the requirement of such moving Party to prove all other elements of any such temporary or
permanent award or injunctive, mandatory or other equitable relief and all other defenses and
objections of the non-moving Party are preserved.

ARTICLE XI.

Indemnification

     11.1 Indemnification by Buyer. From and after Closing, Buyer shall indemnify and hold
harmless Seller and its Affiliates, shareholders, members, officers, managers, employees, agents
and representatives, and any Person claiming by or through any of them, as the case may be, from
and against any and all Losses arising out of or resulting from:

          (a) any representations and warranties made by it in this Agreement or in any Transfer
Document not being true and accurate in all respects (determined without regard to any materiality
or material adverse effect qualification contained therein), when made or at Closing (or, in the
case of any representation or warranty made as of a specific date, as of such date);

27

 

          (b) any Asset or any claim or right or any benefit arising thereunder held by Seller for the
benefit of Buyer pursuant to Section 5.3(b);

          (c) any failure by it to perform in all respects any of its covenants, agreements, or
obligations in this Agreement or in any Transfer Document; and

          (d) the Assumed Liabilities.

If, by reason of the claim of any third Person relating to any of the matters subject to such
indemnification, a Lien is placed or made upon any of the properties or assets owned or leased by
Seller or any other Indemnitee under this Section 11.1, in addition to any indemnity obligation
under this Section, Buyer shall furnish a bond sufficient to obtain the prompt release thereof
within ten (10) days after receipt from Seller of notice thereof.

     11.2 Indemnification by Seller. From and after Closing, Seller shall indemnify and
hold harmless Buyer and its Affiliates, shareholders, members, officers, employees, managers,
agents and representatives, and any Person claiming by or through any of them, as the case may be,
from and against any and all Losses, with respect to the Assets owned, controlled, or claimed by
Seller, arising out of or resulting from:

          (a) any representations and warranties made by it in this Agreement or in any Transfer
Document not being true and accurate in all respects (determined without regard to any materiality
or material adverse effect qualification contained therein), when made or at Closing (or, in the
case of any representation or warranty made as of a specific date, as of such date);

          (b) any failure by it to perform in all respects any of its covenants, agreements, or
obligations in this Agreement or in any Transfer Document;

          (c) except to the extent constituting an Assumed Liability, the ownership or operation of the
Assets prior to the Effective Time and after the effective date of the Reversion;

          (d) the Excluded Assets;

          (e) the Seller Retained Liabilities; and

          (f) with respect to its Assets, except to the extent constituting an Assumed Liability, any
violation of any Environmental Law to the extent attributable to actions occurring or conditions
existing on or prior to the Effective Time and after the effective date of the Reversion.

If, by reason of the claim of any third Person relating to any of the matters subject to such
indemnification, a Lien is placed or made upon any of the properties or assets owned or leased by
Buyer or any other Indemnitee under this Section 11.2, in addition to any indemnity obligation of
Seller under this Section, the applicable Seller Entity shall furnish a bond sufficient to obtain
the prompt release thereof within ten (10) days after receipt from Buyer of notice thereof.

28

 

     11.3 Procedure for Certain Indemnified Claims. Promptly after receipt by a Party
entitled to indemnification hereunder (the “Indemnitee”) of written notice of the assertion or the
commencement of any Litigation with respect to any matter referred to in Sections 11.1 or 11.2 (the
“Litigation Matter”), the Indemnitee shall give written notice thereof to the Party from whom
indemnification is sought pursuant hereto (the “Indemnitor”) and thereafter shall keep the
Indemnitor reasonably informed with respect thereto; provided that failure of the Indemnitee to
give the Indemnitor notice and keep it reasonably informed as provided herein shall not relieve the
Indemnitor of its obligations hereunder, except to the extent that such failure to give notice
shall prejudice any defense or claim available to the Indemnitor. The Indemnitor shall be entitled
to assume the defense of any such Litigation Matter with counsel reasonably satisfactory to the
Indemnitee, at the Indemnitor’s sole expense. If the Indemnitor assumes the defense of any
Litigation Matter, (i) it shall not settle the Litigation Matter unless the settlement shall
include a full and complete release of the Indemnitee, satisfactory to the Indemnitee, of and from
all liability with respect to such Litigation Matter, and (ii) it shall indemnify and hold the
Indemnitee harmless from and against any and all Losses caused by or arising out of any settlement
or judgment of such claim and may not claim that it does not have an indemnification obligation
with respect thereto. If the Indemnitor does not assume the defense of any Litigation Matter, the
Indemnitee may defend against or settle such claim in such manner and on such terms as it in good
faith deems appropriate and shall be entitled to indemnification in respect thereof in accordance
with Section 11.1 or 11.2, as applicable. Each Party shall cooperate, and cause their respective
Affiliates to cooperate, in the defense or prosecution of any Litigation Matter and shall furnish
or cause to be furnished such records, information and testimony, and attend such conferences,
discovery proceedings, hearings, trials or appeals, as may be reasonably requested in connection
therewith.

     11.4 Determination of Indemnification Amounts and Related Matters.

          (a) The maximum liability of Buyer under Section 11.1(a) shall not exceed One Hundred Thousand
Dollars ($100,000.00) (the “Cap”); provided that the Cap shall not apply to breaches of the
representations and warranties in Sections 7.1 through 7.5.

          (b) The maximum liability of Seller in the aggregate under Section 11.2(a) shall not exceed
the Cap; provided that the Cap shall not apply to breaches of the representations and warranties in
Sections 6.1 through 6.5 or 6.14.

          (c) Amounts payable by the Indemnitor to the Indemnitee in respect of any Losses under
Sections 11.1 or 11.2, as applicable, shall be payable by the Indemnitor as incurred by the
Indemnitee, and shall bear interest at the Prime Rate plus two percent (2%) from the date the
Losses for which indemnification is sought were incurred by the Indemnitee until the date of
payment of indemnification by the Indemnitor.

     11.5 Time and Manner of Certain Claims. The representations and warranties of Seller
and Buyer in this Agreement and any Transfer Document shall survive Closing until December 31,
2007. Notwithstanding the foregoing:

          (a) the liability of the Parties shall extend beyond December 31, 2007 with respect to any
claim which has been asserted in a bona fide written notice prior to December 31,

29

 

2007 specifying
in reasonable detail the facts and circumstances giving rise to such right; provided that any such
liability shall expire on the first anniversary of such notice date unless the Party timely
asserting such claim diligently prosecutes such claim prior to such first anniversary;

          (b) all such representations and warranties with respect to any federal, state or local Taxes
and with respect to any environmental matters shall survive until the expiration of the applicable
statute of limitations (giving effect to any waiver, mitigation or extension thereof); and

          (c) the representations and warranties of the Parties in Sections 6.1 through 6.5, and 7.1
through 7.5 shall survive Closing and shall continue in full force and effect without limitation.

     11.6 Other Indemnification. The provisions of Sections 11.3, 11.4 and 11.5 shall be
applicable to any claim for indemnification made under any other provision of this Agreement, and
all references in Sections 11.3, 11.4 and 11.5 to Sections 11.1 and 11.2 shall be deemed to be
references to such other provisions of this Agreement.

     11.7 Exclusivity. Except as specifically set forth in this Agreement and except for
claims against a Party for breach of any provision of this Agreement, each Party waives any rights
and claims it may have against the other Parties to this Agreement, whether in law or in equity,
relating to the Assets or the transactions contemplated hereby. The rights and claims waived by
each Party include claims for contribution or other rights of recovery arising out of or relating
to any Environmental Law, claims for breach of contract, breach of representation or warranty,
negligent misrepresentation and all other claims for breach of duty. After Closing, Article XI
shall provide the exclusive remedy for any misrepresentation, breach of warranty, covenant or other
agreement (other than those contained in Sections 8.3, 12.2, and 12.3) or other claim arising out
of this Agreement or the transactions contemplated hereby. Notwithstanding anything to the
contrary in this Agreement, the limitations of this
Section 11.7 only shall apply to claims arising out of, or with respect to, this Agreement,
and such limitations shall not bar any claims which either Party may have against the other arising
out of, or with respect to, any of the Transfer Documents or ancillary documents related thereto.

ARTICLE XII.

Miscellaneous Provisions

     12.1 Data and Information Review. Subject to Section 8.3, and on the terms and
conditions set forth herein, between the Closing Date and December 31, 2007, Buyer shall be
entitled to review all geologic and other data and information (including gas content and
desorption information) relating to the Oil and Gas Interests that was prepared by Seller or the
CONSOL Parties (collectively, the “Reviewable Data”). Buyer shall submit a site-specific request
(relating to the Oil and Gas Interests conveyed pursuant to the Deed) to review the Reviewable Data
in writing not less than ten (10) Business Days in advance of the requested view date. Seller
shall make the Reviewable Data available to Buyer at Buyer’s sole cost and expense during normal
business hours at the Seller and CONSOL Parties’ offices in Pittsburgh, Pennsylvania.

30

 

     12.2 Expenses. Except as otherwise specifically provided in Section 12.16 or
elsewhere in this Agreement, each of the Parties shall pay its own expenses and the fees and
expenses of its counsel, accountants, and other experts in connection with this Agreement.

     12.3 Brokers. Buyer shall indemnify and hold Seller and its Affiliates harmless from
and against any and all Losses arising from any employment by Buyer or its Affiliates of, or
services rendered to Buyer or its Affiliates by, any finder, broker, agency or other intermediary,
in connection with the transactions contemplated hereby, or any allegation of any such employment
or services. Seller shall indemnify and hold Buyer and its Affiliates harmless from and against
any and all Losses arising from any employment by Seller or its Affiliates of, or services rendered
to Seller or its Affiliates by, any finder, broker, agency or other intermediary, in connection
with the transactions contemplated hereby, or any allegation of any such employment or services.

     12.4 Waivers. No action taken pursuant to this Agreement, including any investigation
by or on behalf of any Party hereto, shall be deemed to constitute a waiver by the Party taking the
action of compliance with any representation, warranty, covenant or agreement contained herein or
in any Transfer Document. The waiver by any Party hereto of any condition or of a breach of
another provision of this Agreement or any Transfer Document shall be in writing and shall not
operate or be construed as a waiver of any other condition or subsequent breach. The waiver by any
Party of any of the conditions precedent to its obligations under this Agreement shall not preclude
it from seeking redress for breach of this Agreement other than with respect to the condition so
waived.

     12.5 Notices. All notices, requests, demands, applications, services of process and
other communications which are required to be or may be given under this Agreement or any Transfer
Document shall be in writing and shall be deemed to have been duly given if sent by telecopy or
facsimile transmission, upon answer back requested, or
delivered by courier or mailed, certified first class mail, postage prepaid, return receipt
requested, to the Parties at the following addresses:

	 	 	 	 	 
	 

	 	To Buyer:
	 	Peabody Natural Gas, LLC
	 

	 	 	 	701 Market Street
	 

	 	 	 	St. Louis, Missouri 63101
	 

	 	 	 	ATTN: Land Department
	 

	 	 	 	Fax: 314-342-7597
	 

	 	 	 	Phone: 314-342-3400
	 
	 	 	 	 
	 

	 	Copies (which shall not
	 	Peabody Natural Gas, LLC
	 

	 	constitute notice)
	 	14062 Denver West Parkway, Suite 110
	 

	 	 	 	Lakewood, Colorado 80401
	 

	 	 	 	ATTN: Collon C. Kennedy, Esq.
	 

	 	 	 	Fax: 303-271-9049
	 

	 	 	 	Phone: 303-271-3600

31

 

	 	 	 	 	 
	 

	 	To Seller:
	 	CNX Gas Company LLC
	 

	 	 	 	5 Penn Center West, Suite 401
	 

	 	 	 	Pittsburgh, PA 15276-0102
	 

	 	 	 	ATTN: General Counsel’s Office
	 

	 	 	 	Fax: 412-200-6762
	 

	 	 	 	Phone: 412-200-6700
	 
	 	 	 	 
	 

	 	Copies (which shall not
	 	CNX Gas Corporation
	 

	 	constitute notice)
	 	5 Penn Center West, Suite 401
	 

	 	 	 	Pittsburgh, PA 15276-0102
	 

	 	 	 	ATTN: General Counsel’s Office
	 

	 	 	 	Fax: 412-200-6795
	 

	 	 	 	Phone: 412-200-6778

or to such other address as any Party shall have furnished to the other by notice given in
accordance with this Section. Such notice shall be effective, (i) if delivered in person or by
courier, upon actual receipt by the intended recipient, or (ii) if sent by telecopy or facsimile
transmission, upon confirmation of transmission received, or (iii) if mailed, upon the date of
delivery as shown by the return receipt therefore.

     12.6 Entire Agreement; Prior Representations; Amendments; No Merger. This Agreement,
the Exhibits and Schedules attached hereto, the Transfer Documents delivered after the date hereof
to Buyer, and that certain Confidentiality Agreement dated as of November 22, 2006 between Peabody
Natural Gas, LLC, and CNX Gas Company, LLC, embody the entire agreement between the Parties with
respect to the subject matter hereof and supersedes all prior representations, agreements and
understandings, oral or written, with respect thereto. Notwithstanding any representations which
may have been made by either Party in connection with the transactions contemplated by this
Agreement, each Party acknowledges that it has not relied on any representation by the other Party
with respect to such transactions or the Assets
except those contained in this Agreement, the Schedules or the Exhibits hereto. This
Agreement may not be modified orally, but only by an agreement in writing signed by the Party or
Parties against whom any waiver, change, amendment, modification or discharge may be sought to be
enforced. If there is a conflict between the terms of this Agreement and any deed delivered
hereunder, the Agreement and such deed shall be construed in pari materia to determine the intent
of the Parties. Notwithstanding anything to the contrary in this Agreement, this Agreement and the
provisions contained herein shall survive the Closing and shall not be merged into any deed that is
delivered pursuant to this Agreement.

     12.7 Jurisdiction. Except as otherwise expressly provided in this Agreement, the
Parties hereto agree that any suit, action or proceeding seeking to enforce any provision of, or
based on any matter arising out of or in connection with, this Agreement, the Transfer Documents or
the transactions contemplated hereby or thereby may be brought in the United States District Court
for the Southern District of Indiana or any other Indiana State court sitting in Evansville,
Indiana, and each of the Parties hereby consents to the jurisdiction of such courts (and of the
appropriate appellate courts therefrom) in any such suit, action or proceeding and irrevocably
waives, to the fullest extent permitted by law, any objection which it may now or hereafter have to
the laying of the venue of any such suit, action or proceeding in any such court

32

 

or that any such
suit, action or proceeding which is brought in any such court has been brought in an inconvenient
forum. Process in any suit, action or proceeding may be served on any Party anywhere in the world,
whether within or without the jurisdiction of any such court.

     12.8 WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY
AND ALL RIGHTS TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS
AGREEMENT, THE TRANSFER DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.

     12.9 Binding Effect; Benefits. This Agreement shall inure to the benefit of and shall
be binding upon the Parties hereto and their respective heirs, legal representatives, successors,
and permitted assigns. Neither Seller nor Buyer shall assign this Agreement or delegate any of its
duties hereunder to any other Person without the prior written consent of the other, which consent
shall not be unreasonably withheld. For purposes of this Section, any change in control of Seller
or Buyer shall not constitute an assignment by it of this Agreement.

     12.10 Headings, Exhibits and Schedules. The section and other headings contained in
this Agreement are for reference purposes only and shall not affect the meaning or interpretation
of this Agreement. Reference to Exhibits and Schedules shall, unless otherwise indicated, refer to
the Exhibits and Schedules attached to this Agreement, which shall be incorporated in and
constitute a part of this Agreement by such reference.

     12.11 Counterparts. This Agreement may be executed in any number of counterparts,
each of which, when executed, shall be deemed to be an original and all of which together shall be
deemed to be one and the same instrument.

     12.12 GOVERNING LAW. THE VALIDITY, PERFORMANCE, AND ENFORCEMENT OF THIS AGREEMENT AND
ALL TRANSFER DOCUMENTS, UNLESS EXPRESSLY PROVIDED TO THE CONTRARY, SHALL BE GOVERNED BY THE LAWS OF
THE STATE OF INDIANA, WITHOUT GIVING EFFECT TO THE PRINCIPLES OF CONFLICTS OF LAW OF SUCH STATE;
PROVIDED, HOWEVER, THAT ANY DISPUTE THAT TOUCHES OR CONCERNS THE RIGHTS IN AN ESTATE OR INTEREST IN
LAND OR MINERALS SHALL BE GOVERNED BY THE LAW OF THE JURISDICTION IN WHICH SUCH ESTATE OR INTEREST
IN LAND OR MINERALS IS LOCATED.

     12.13 Severability. Any term or provision of this Agreement which is invalid or
unenforceable shall be ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining rights of the Person intended to be benefited by
such provision or any other provisions of this Agreement.

     12.14 Third Persons; Joint Ventures. This Agreement constitutes an agreement solely
among the Parties hereto, and, except as otherwise provided herein, is not intended to and shall
not confer any rights, remedies, obligations, or liabilities, legal or equitable, including any
right of employment, on any Person other than the Parties hereto and their respective successors,
or assigns, or otherwise constitute any Person a third-Person beneficiary under or by reason of
this Agreement. Nothing in this Agreement, expressed or implied, is intended to or shall
constitute

33

 

the Parties hereto partners or participants in a joint venture including, but not
limited to, a mining joint venture.

     12.15 Construction. This Agreement has been negotiated by Seller and Buyer and their
respective legal counsel, and legal or equitable principles that might require the construction of
this Agreement or any provision of this Agreement against the Party drafting this Agreement shall
not apply in any construction or interpretation of this Agreement.

     12.16 Attorneys’ Fees. If any Litigation between Buyer and Seller with respect to
this Agreement, the Transfer Documents or the transactions contemplated hereby or thereby shall be
resolved or adjudicated by a Judgment of any court, the Party prevailing under such Judgment shall
be entitled, as part of such Judgment, to recover from the other Party its reasonable attorneys’
fees and costs and expenses of litigation.

     12.17 Risk of Loss.

          (a) Seller shall bear the risk of any loss or damage to the Assets resulting from fire, theft
or other casualty (except reasonable wear and tear) at all times prior to the Effective Time.

          (b) If, prior to Closing, any material part of or interest in the Assets is taken or condemned
as a result of the exercise of the power of eminent domain, or if a Governmental Authority having
such power informs Seller that it intends to condemn or take all or any of the Assets (such event
being called, in either case, a “Taking”), then (i) Buyer shall have the sole right, in the name of
Seller, if Buyer so elects, to negotiate for, claim contest and receive all
damages with respect to the Taking, (ii) Seller shall be relieved of its obligation to convey
to Buyer the Assets or interests that are the subject of the Taking, (iii) at Closing, Seller shall
assign to Buyer all of Seller’s rights to all payments payable with respect to such Taking and
shall pay to Buyer all payments previously paid to Seller with respect to the Taking, and (iv)
following Closing, Seller shall give Buyer such further assurances of such rights and assignment
with respect to the Taking as Buyer may from time to time reasonably request.

     12.18 Tax Consequences. No Party to this Agreement makes any representation or
warranty, express or implied, with respect to the tax implications of any aspect of this Agreement
on any other Party to this Agreement, and all Parties expressly disclaim any such representation or
warranty with respect to any tax implications arising under this Agreement. Each Party has relied
solely on its own tax and legal advisors with respect to the tax implications of this Agreement.

     12.19 Commercially Reasonable Efforts. For purposes of this Agreement, “commercially
reasonable efforts” shall not be deemed to require a Party to undertake extraordinary measures,
including the initiation or prosecution of legal proceedings or the payment of amounts in excess of
normal and usual filing fees and processing fees, if any.

     12.20 Time. Time is of the essence under this Agreement. If the last day for the
giving of any notice or the performance of any act required or permitted under this Agreement is a
day

34

 

that is not a Business Day, the time for the giving of such notice or the performance of such
act shall be extended to the next succeeding Business Day.

     12.21 Surface Use Agreements. Subject to applicable Legal Requirements and to valid
restrictions contained in Contracts with third Persons, from time to time after Closing, but
terminating on the fifth anniversary of the Closing, upon the written request of Buyer, Seller
covenants and agrees that it shall execute and deliver, and Seller shall cause the CONSOL Parties
to execute and deliver, one or more non-exclusive site-specific surface access and use agreements
covering portions of the surface overlying the Oil and Gas Interests, for which Seller or the
CONSOL Parties possess rights as of the date hereof, in substantially the form agreed to by the
Parties prior to the Closing Date (each a “Surface Use Agreement”). Prior to entering into any
Surface Use Agreement with Buyer, Seller and the CONSOL Parties shall have the unfettered right to
sell, from time to time, any surface overlying the Oil and Gas Interests. Notwithstanding the
foregoing, nothing in this Agreement shall be interpreted or construed to restrict Buyer’s common
law or statutory rights to use the surface overlying the Oil and Gas Interests as an incident or
right appurtenant to such Oil and Gas Interests acquired by it under this Agreement.

     12.22 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.

Signatures appear on the following page.

35

 

     IN WITNESS WHEREOF, Seller and Buyer have executed this Agreement as of the date first written
above.

	 	 	 	 	 	 	 
	 	 	SELLER:
	 
	 	 	 	 	 	 
	 	 	CNX GAS COMPANY LLC	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	BUYER:	 	 
	 
	 	 	 	 	 	 
	 	 	CYPRUS CREEK LAND RESOURCES, LLC	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 

36

 

List of Exhibits and Schedules

EXHIBITS

	 	 	 
	No.	 	DESCRIPTION
	A

	 	Oil and Gas Interests

37

 

SCHEDULES

	 	 	 
	No.	 	DESCRIPTION
	1.1a

	 	“Knowledge” Persons
	1.1b

	 	Burdens on Production
	1.1c

	 	Third Party Consents
	1.1d

	 	Transfer Approvals
	2.1(c)(ii)

	 	Material Contracts
	6.10(b)

	 	Permits and Bonds for the Assets
	6.12

	 	Taxes Due on the Assets
	6.16

	 	Labor Agreements and Disputes
	6.18

	 	Material Liabilities

38

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