Asset Purchase Agreement

Exhibit 10.5

Execution Version

Asset Purchase Agreement

AMONG

CNX Gas Company LLC

Buyer

and

American Land Holdings of Indiana, LLC; Beaver Dam Coal
Company; Black Beauty Coal Company, LLC; Caballo Coal
Company; Central States Coal Reserves of Indiana, LLC;
Coal Reserve Holding Limited Liability Company #1;
Hayden Gulch Terminal, Inc.; Midwest Coal Reserves of
Indiana, LLC; Peabody Coal Company, LLC; Peabody
Development Company, LLC; Peabody Natural Gas, LLC; and
Peabody Natural Resources Company

Seller

Dated as of April 1, 2007

TABLE OF CONTENTS

Recitals									1
Agreements									1
ARTICLE I. Definitions									1
			1.1			Defined Terms			1
			1.2			Other Definitions			8
			1.3			Rules of Construction			10
ARTICLE II. Sale and Purchase									10
			2.1			Sale and Purchase of Assets			10
			2.2			Purchase Price			13
			2.3			Buyer Assumed Liabilities; Seller Retained Liabilities			13
ARTICLE III. Adjustments; Actions Prior to Closing									14
			3.1			Purchase Price Adjustments			14
			3.2			Adjusted Purchase Price Calculation			15
			3.3			Allocated Values; Post-Closing Allocations			16
			3.4			Updated Schedules and Exhibits			17
			3.5			Taxpayer Identification Numbers			17
			3.6			Consents			17
			3.7			Asset Due Diligence			17
			3.8			Adjustments for Environmental Defects			18
			3.9			Adjustments for Title Defects			19
			3.10			Seller’s Response to Title Defect Notice			20
			3.11			Liens			21
ARTICLE IV. Surface Use and Other Activities									21
			4.1			Surface Use Agreements			21
			4.2			Cooperative Development			22
ARTICLE V. Closing and Actions Prior to Closing									22
			5.1			Closing			22
			5.2			Seller’s Closing Deliveries			23
			5.3			Buyer’s Closing Deliveries			23
			5.4			Transfer Documents			23
ARTICLE VI. Transfer Period Covenants									24
			6.1			Transfer Period			24
			6.2			Further Assurances			24
			6.3			Obtaining Consents and Delivery of Notices			24
			6.4			Governmental Filings			25
			6.5			Recording Fees, Transfer Taxes and Similar Costs			25
			6.6			Transition Services			25

ARTICLE VII. Buyer’s Representations and Warranties									26
			7.1			Organization and Standing			26
			7.2			Power			26
			7.3			Authorization and Enforceability			26
			7.4			Liability for Brokers’ Fees			26
			7.5			Alien Status			26
			7.6			Litigation			26
			7.7			Orders			26
			7.8			No Conflicts			26
			7.9			Regulatory Approvals			27
			7.10			Buyer Due Diligence			27
			7.11			Disclosure			27
			7.12			Effectiveness of Representations and Warranties			27
ARTICLE VIII. Seller’s Representations and Warranties									27
			8.1			Organization and Standing			28
			8.2			Power			28
			8.3			Authorization and Enforceability			28
			8.4			Liability for Brokers’ Fees			28
			8.5			Alien Status			28
			8.6			Litigation			28
			8.7			Orders			28
			8.8			Rentals and Royalties			28
			8.9			No Conflicts			29
			8.10			Compliance with Laws			29
			8.11			Environmental Conditions			30
			8.12			Taxes			30
			8.13			Regulatory Approvals			30
			8.14			Limited Title Warranty as to Assets			30
			8.15			Material Contracts			31
			8.16			Employees			31
			8.17			No Material Adverse Change			31
			8.18			Undisclosed Material Liabilities			32
			8.19			Insurance			32
			8.20			Intellectual Property			32
			8.21			Conveyance by Seller			32
			8.22			Disclosure			32
			8.23			Effectiveness of Representations and Warranties			32
ARTICLE IX. Other Covenants									32
			9.1			Certain Affirmative Covenants of Peabody Subs			32
			9.2			Certain Negative Covenants of Seller			33
			9.3			Confidentiality and Publicity			34
			9.4			DISCLAIMERS			35
			9.5			Indiana Dormant Minerals Act Filings			36

ARTICLE X. Conditions Precedent									36
			10.1			Conditions to Buyer’s Obligations			36
			10.2			Conditions to Seller’s Obligations			37
ARTICLE XI. Termination, Effect of Termination and Specific Performance									38
			11.1			Termination			38
			11.2			Effect of Termination			38
			11.3			Specific Performance			38
ARTICLE XII. Indemnification									39
			12.1			Indemnification by Seller			39
			12.2			Indemnification by Buyer			40
			12.3			Procedure for Certain Indemnified Claims			40
			12.4			Determination of Indemnification Amounts and Related Matters			41
			12.5			Time and Manner of Certain Claims			41
			12.6			Peabody Guaranty			42
			12.7			Other Indemnification			42
			12.8			Exclusivity			42
ARTICLE XIII. Miscellaneous Provisions									42
			13.1			Data and Information Review			42
			13.2			Expenses			43
			13.3			Brokers			43
			13.4			Waivers			43
			13.5			Notices			43
			13.6			Entire Agreement; Prior Representations; Amendments; No Merger			44
			13.7			Jurisdiction			45
			13.8			WAIVER OF JURY TRIAL			45
			13.9			Binding Effect; Benefits			45
			13.10			Headings, Exhibits and Schedules			45
			13.11			Counterparts			45
			13.12			GOVERNING LAW			46
			13.13			Severability			46
			13.14			Third Persons; Joint Ventures			46
			13.15			Construction			46
			13.16			Attorneys’ Fees			46
			13.17			Risk of Loss			46
			13.18			Tax Consequences			47
			13.19			Commercially Reasonable Efforts			47
			13.20			Time			47
			13.21			Reserved Rights			47
			13.22			Rule Against Perpetuities			47
List of Exhibits and Schedules									50

Asset Purchase Agreement

     THIS ASSET PURCHASE AGREEMENT (“Agreement”) is made and entered into on June 20, 2007, but effective as of April 1, 2007, among American Land Holdings of Indiana, LLC, a Delaware limited liability company, Beaver Dam Coal Company, a Delaware corporation, Black Beauty Coal Company, LLC, a Delaware limited liability company, Caballo Coal Company, a Delaware corporation, Central States Coal Reserves of Indiana, LLC, a Delaware limited liability company, Coal Reserve Holding Limited Liability Company #1, a Delaware limited liability company, Hayden Gulch Terminal, Inc., a Delaware corporation, Midwest Coal Reserves of Indiana, LLC, a Delaware limited liability company, Peabody Coal Company, LLC, a Delaware limited liability company, Peabody Development Company, LLC, a Delaware limited liability company, Peabody Natural Gas, LLC, a Delaware limited liability company, and Peabody Natural Resources Company, a Delaware general partnership (collectively, the “Peabody Subs” or “Seller”), each with their principal place of business located at 701 Market Street, St. Louis, Missouri 63101, and CNX Gas Company LLC, a Virginia limited liability company, ( “CNX” or “Buyer”), with its principal place of business 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, Seller’s rights, title, 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, Seller and Buyer agree as follows:

ARTICLE I.

     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 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 either of the Parties 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 5.2 and 5.3.

     “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.

     “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, service or supply agreement, certificate, option, warrant, right or other instrument, document, obligation or agreement, and any ratifications or amendments to

any of the foregoing, which relates to the Assets or Seller’s right to conduct Oil and Gas operations on or with respect to any Asset; provided that “Contract” shall not include any such agreements, contracts or other rights to the extent they relate to any Reserved Rights.

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

     “Environmental Defect” means an adverse environmental condition of the Assets as to which both of the following are true: (a) the environmental condition is required to be remediated under Environmental Laws in effect at the Closing Date; and (b) the total cost to remediate such environmental condition to levels required by Environmental Laws in effect at the Closing Date, when combined with the total cost to remediate all other environmental conditions of which Buyer has given Seller notice to levels required by Environmental Laws in effect at the Closing Date, is reasonably estimated to exceed $1,000,000 (net to Seller’s interest); provided, however, that “Environmental Defect” shall not include any adverse environmental condition relating to, or any plugging, abandonment or reclamation obligation that may exist under applicable Legal Requirements on or with respect to, any Wells or Equipment or the surface areas on which Wells and Equipment are located.

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

     “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 each 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.

     “Net Mineral Acre” means, with respect to the Oil and Gas Interests, the product obtained by multiplying (a) each surface acre of land listed on Exhibit “A” and depicted or described in Exhibits “A-1” through “A-19” , by (b) Seller’s percentage fee Oil and Gas Interest (with CBM or CMM accounted for separately in such lands to the extent located in the states of Illinois or Kentucky), or Seller’s percentage interest in CBM or CMM, as the case may be, in such lands, or, in the case of Oil and Gas or CBM or CMM leasehold interests, by (c) Seller’s percentage working interest in the coal or Oil and Gas or coal mineral estate, as the case may be, in such lands. For purposes of this Agreement, the Parties agree that in Illinois CBM and CMM shall deemed to be owned by the owner of the coal estate and that in Kentucky CBM and CMM shall be deemed to be owned by the owner of the “other minerals” estate. In such states, as to each surface acre under which Seller owns all minerals rights in fee, or Oil and Gas rights acquired separately from the Oil and Gas estate, or CBM or CMM rights acquired through the coal or other minerals estate, Seller shall be credited with a separate Net Mineral Acre (based on Seller’s actual percentage ownership in the applicable mineral estate and reduced in accordance with the formula set forth above) for each of the Oil and Gas Interests and CBM or CMM Interests which shall be aggregated in calculating the Net Mineral Acre Threshold and the Mineral Acre Compensation Threshold in Section 3.10.

     “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 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 Partial Assignment Leases; (h) any joint operating agreement, crude oil or gas sales or purchase agreement, division order, or other Contract disclosed on Schedule 2.1(c)(iii) hereto; (i) 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; (j) any Third-Party Consents which are obtained and are in force and effect on the Closing Date; (k) 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; (l) rights of reassignment upon the surrender or expiration of any lease; (m) such Environmental Defects and Title Defects as Buyer has waived pursuant to Sections 3.8(a), 3.9(a)(ii) or 3.9(b)(ii), as applicable; (n) any Liens that Seller shows by affirmative evidence are to be released at Closing; (o) defects in the early chain of title consisting of the mere failure to recite marital status in a document or omissions of successors of heirship proceedings, unless Buyer provides affirmative evidence that such failure or omission has resulted in another Person’s actual and superior claims of title to the relevant Asset; (p) defects that have been cured by possession under applicable statutes of limitation for adverse possession or for prescription; (q) defects bases solely on lack of information in Seller’s files; and (r) 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, encumbrance or monetary claim, or any pledge, deed of trust, mortgage, security interest or similar lien, caused, created or allowed, with respect to the Assets, by Seller or their respective Affiliates, which could prevent or interfere with the conduct of the business of 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.

     “Reserved Rights” means the rights reserved by Seller under the Peabody Deed described in Section 5.4(a).

     “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 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.

     “Title Defect” means with respect to any Asset: (a) any material noncompliance with Legal Requirements of any Governmental Authority relating to ownership of property that results in substantial risk of loss of Seller’s title to such Asset or value thereof; (b) the existence of any suit, action, or other proceeding before any court or Governmental Authority that would result in substantial loss or impairment of the Seller’s title to any Asset or a material portion of the value thereof; (c) the holder’s exercise of any preferential right to purchase affecting such Asset; (d) any material encumbrance, encroachment, irregularity, defect in, or objection to Seller’s title to any of the Assets (other than Permitted Liens), which, alone or in combination with other defects, renders Seller’s title to such Asset less than good, or which would unreasonably interfere with Buyer’s enjoyment of such Asset; and (e) any defect in title resulting from Peabody’s failure to comply with the Indiana Dormant Mineral Interest Act where (i) title has lapsed or will lapse prior to the end of the Transfer Period or (ii) the title attorneys for CNX are reasonably unwilling to certify title in Peabody as a result of non-compliance with the Indiana Dormant Mineral Interest Act. Title Defect does not, however, include any Permitted Lien, any pending Litigation or legislation seeking to resolve the status of CBM or CMM ownership, any prescriptive rights, any Lien, right, remedy or claim arising under any title curative statute pertaining to mineral interests, or any defect, noncompliance, or other limitation on Seller’s title, right, and interest in or to ERCs or ERC Rights, or Seller’s ability to deliver to Buyer ERC Rights which arises as a result of legislation by any Governmental Authority.

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

     “Transfer Documents” means the instruments and documents described in Section 5.4 which are to be executed and delivered by or on behalf of Seller in connection with the transaction contemplated in this Agreement.

     “Workable Coal Bed” means 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 the Oil and Gas operations affecting such seam (such determination being made by a nationally recognized mining engineering firm selected by the Parties) based upon reasonable assumptions and trade custom in effect as of the start date of such proposed Oil and Gas operations.

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

TERM		SECTION
Adjusted Purchase Price		2.2
Adjustment Period		3.1(a)
Agreement		Preamble
Allocated Values		3.3(a)
Assets		2.1(c)
Assumed Liabilities		2.3(a)
Buyer		Preamble
Buyer ERC Actions		2.1(c)(v)(B)
Buyer Group		3.7(e)
CNX		Preamble
Cap		12.4(a)
Closing		5.1
Confidential Information		9.3(a)
Contract Operating Agreement		6.6
Deed		5.4(a)
Environmental Defects Amount		3.8(b)(ii)
Environmental Defects Deadline		3.8(a)
Equipment		2.1(c)(ii)
ERC Rights		2.1(c)(v)(B)

TERM		SECTION
Excess Title Defects Amount		3.10(c)
Excluded Assets		2.1(d)
Final Adjustment Certificate		3.2(b)(i)
Final Purchase Price		3.2(b)(i)
Final Title Defect Notice Deadline		3.9(b)(i)
Indemnified Losses		3.7(e)
Indemnitee		12.3
Indemnitor		12.3
Initial Adjustment Certificate		3.2(a)
Initial Title Defect Notice Deadline		3.9(a)(i)
Litigation Matter		12.3
Material Contracts		2.1(c)(iii)
Mineral Acre Compensation Threshold		3.10(b)
Minimum Damage Requirement		12.4(a)
Net Mineral Acre Threshold		3.10(a)
Oil and Gas Books and Records		2.1(c)(vii)
Oil and Gas Interests		2.1(c)(i)
Partial Assignment Leases		2.1(c)(iv)
Peabody Guaranty		12.6
Peabody Predecessors		8.6
Peabody Subs		Preamble
Post-Closing Consent		6.3(a)
Purchase Price		2.2
Replacement Interests		3.8(b)(iii)
Reviewable Data		13.1
Right of First Refusal		5.2(d)
Seller Group		3.7(e)

TERM		SECTION
Seller Retained Liabilities		2.3(b)
Surface Use Agreement (SUA)		4.1(a)
Taking		13.17(b)
Title Defect Notice		3.9(a)(i)
Transfer Period		6.1
Wells		2.1(c)(ii)

     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 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.

     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 grant, sell, convey, transfer, assign and deliver, free and clear of all Liens (other than Permitted Liens), all of its rights, title, estates, interests and claims in, to, under or derived from, and Buyer agrees to purchase and assume, pay, discharge and perform 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 to, 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, interests and claims in and to the following described assets and properties, excepting and excluding the Excluded Assets and the Reserved Rights described in Sections 2.1(d) and 5.4(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 approximately Two Hundred Seventy Three Thousand Nine Hundred Twenty One (273,921) acres of land listed on Exhibit “A” and depicted on the maps attached hereto as Exhibits “A-1” through “A-19” (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 except as otherwise provided in Section 5.4(a)) (collectively, the “Oil and Gas Interests”);

               (ii)  Wells and Equipment . All of Seller’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 (a) all related wellhead equipment, pumps, machinery, materials and supplies, and (b) 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”);

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

               (iv)  Partial Assignment Leases . Except as set forth in the Deed, all of Seller’s rights, title, and interests in, to, under, or derived from, those certain Oil and Gas leases and other Contracts entered into between a Peabody Sub and third Persons covering part of the Oil and Gas Interests which are described on Exhibit “C” attached hereto (collectively, the “Partial Assignment Leases”);

               (v)  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 that 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 Seller, or its successors and assigns, on the real property containing the Oil and Gas Interests ((A) and (B) collectively, the “ERC Rights”); provided, however, that in exercising the ERC Rights, Buyer shall not take any action that results or would reasonably be expected to result in additional cost (as determined by Seller in good faith in connection with its exercise of the Reserved Rights) to Seller in connection with operations conducted pursuant to the Reserved Rights; and provided further that the ERC Rights are subject to Seller’s paramount Reserved Rights, and Buyer agrees that upon receiving notice from Seller, in accordance with the terms set forth in the Deed, or in any development plan prepared in accordance therewith, setting forth the time period for the intended exercise of any of Seller’s Reserved Rights with respect to the ERC Rights, Buyer will take all action, at its sole cost, reasonably required to timely develop such rights so as to not interfere with or delay any of Seller’s coal mining operations (the “Buyer ERC Actions”). If Buyer fails to take any Buyer ERC Action then, promptly upon Seller’s request, Buyer shall relinquish and reassign to Seller all ERC Rights relating to CBM or CMM emissions recoverable in advance of Seller’s coal mining operations; provided, however, that such relinquishment and reassignment only shall apply to ERC Rights on a site-specific basis, in an area reasonably defined by Seller and only to the extent necessary for the exercise of its Reserved Rights as described above;

               (vi)  Other Tax Credits . All rights Seller 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 exploration and production of Oil and Gas by Buyer after the Effective Time with respect to the Assets;

               (vii)  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, Wells and Equipment (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

               (viii)  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) all Reserved Rights; (ii) any accounts receivable accruing or attributable to the Assets for the period prior to the Effective Time; (iii) 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; (iv) any refund of Taxes, costs or expenses borne by Seller or its predecessors in title attributable to the period prior to the Effective Time; (v) and any rights, titles, estates or interests owned, leased, held or otherwise controlled by Seller in the lands described on Exhibits “A-1” through “A-19” that are not described or included in Section 2.1(c) hereof; (vi) all Oil and Gas rights, estates, interests, and claims in and to properties not depicted on the attached Exhibits “A-1” through “A-19” except as otherwise expressly provided herein as well as all Reserved Rights and data, books, maps, records and other information relating thereto; (vii) 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 listed on Exhibit “A” and depicted on the maps attached hereto as Exhibits “A-1” through “A-19” , and all roads, ditches and other surface improvements on such lands; and (viii) subject to Buyer’s review rights under Section 13.1, 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, Wells and Equipment, (B) in connection with Seller’s exercise of its Reserved Rights, (C) in connection with internal evaluations of the Assets for management purposes, or (D) 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 Fifteen Million Dollars ($15,000,000.00) (the “Purchase Price”), adjusted as provided in Section 3.1 (the “Adjusted Purchase Price”). Seller shall be solely responsible for determining the allocation of the Adjusted Purchase Price among the Peabody Subs.

     2.3 Buyer Assumed Liabilities; Seller Retained Liabilities .

          (a) Buyer 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 on, under or with respect to the Assets;

               (ii) obligations and liabilities arising from or attributable to any operations conducted by or on behalf of any Peabody Sub or any Peabody Predecessor 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, abandonment, and other similar obligations and liabilities relating to the Wells and Equipment; and

               (iii) 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 Reserved Rights.

          (b) 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 Reserved Rights, shall remain and be the obligations and liabilities solely of Seller (the “Seller Retained Liabilities”), 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, royalties or Taxes related to the Assets.

ARTICLE III.

     3.1 Purchase Price Adjustments . The Purchase Price shall be adjusted as set forth below. All adjustments to the Purchase Price shall be made (i) according to factors set forth in this Section, (ii) in accordance with GAAP, and (iii) without duplication.

          (a) Revenue Adjustment . The Purchase Price shall be adjusted downward by an amount equal to the sum of all proceeds received by Seller between the Effective Time and the Closing Time (the “Adjustment Period”) attributable to the Assets and that are, in accordance with GAAP, attributable to the period of time after the Effective Time including: (i) proceeds from the sale of Oil and Gas (net of any production royalties or other Burdens on Production, transportation costs and of any Taxes on production including severance, conservation, and ad valorem Taxes, not reimbursed to Seller by the purchaser of production) produced from such Assets during the Adjustment Period and proceeds attributable to prepayments, and (ii) subject to Article IX hereof, proceeds from the sale, salvage or other disposition during the Adjustment Period of any property, equipment or rights included in such Assets; provided that there shall be no downward adjustment of the Purchase Price for proceeds received by Seller after the Effective Time in the form of checks deposited to Seller’s lockbox and which are either: (A) delivered and endorsed over to Buyer, or (B) negotiated by Seller and remitted to Buyer as part of the Final Purchase Price.

          (b) Cost Adjustment . The Purchase Price shall be adjusted upward by an amount equal to the sum of all costs attributable to the Assets that were incurred in the ordinary course of business, that are, in accordance with GAAP, attributable to times after the Effective Time, and that have accrued to and been paid by Seller during the Adjustment Period, or that were incurred by Seller pursuant to the Contract Operating Agreement: (i) as costs of the ordinary course of production, processing or other operations directly related to the Assets, (ii) as costs incurred with respect to staking, surveying, title examination, surface grading and similar activities directly related to the Assets, (iii) as costs for the maintenance of any of the Assets, (iv) as costs for the extension or renewal during the Adjustment Period of any of the Assets, (v) subject to Article IX hereof, as costs of any exploration or development activities related to its Assets or related to drilling, completion, recompletion, or workover activities, or mining or reclamation activities, and conducted during the Adjustment Period, (vi) the aggregate amount of all other expenditures made by Seller prior to the Effective Time for costs and expenses directly

attributable to the Assets after the Effective Time, and (vii) otherwise from the ownership of the Assets during the Adjustment Period.

          (c) Prepaid and Accrued Expenses . The Purchase Price shall be adjusted upward by an amount equal to prepaid expenses of or relating to the Assets, and downward by an amount equal to the accrued expenses of or relating to the Assets, all as determined in accordance with GAAP, to reflect the principle that (A) all expenses attributable to the Assets for periods on or prior to the Effective Time are for the account of Seller, and (B) all expenses attributable to the Assets for periods after the Effective Time are for the account of Buyer (but, with respect to prepaid expenses, only to the extent such prepaid expenses shall accrue to the benefit of Buyer upon and after the Effective Time). Without limiting the generality of the foregoing, the following expenses shall be prorated as described in the preceding sentence:

               (i) all payments and charges under Contracts and Permits;

               (ii) Taxes levied or assessed against any Assets;

               (iii) Taxes levied or assessed against or based upon production from any Assets, excepting Taxes arising from the transfer of Assets pursuant to this Agreement; and

               (iv) charges for utilities or other goods and services furnished to the Assets.

     3.2 Adjusted Purchase Price Calculation .

          (a) Initial Adjustment Certificate . Seller shall deliver to Buyer, no later than three (3) Business Days preceding the Closing Date, a certificate executed by an authorized representative of Seller (“Initial Adjustment Certificate”), setting forth Seller’s estimate of the Adjusted Purchase Price. The Initial Adjustment Certificate shall be based on actual information available to Seller at the time of its preparation and upon Seller’s good faith estimates and assumptions. The Initial Adjustment Certificate shall be accompanied by appropriate documentation, in summary form, supporting the adjustments proposed in such Certificate. Seller and Buyer shall mutually agree on the Adjusted Purchase Price prior to Closing, with any disagreements to be handled in the Final Adjustment Certificate.

          (b) Final Adjustment Certificate; Final Purchase Price .

               (i) On or before November 17, 2007, Buyer shall prepare and deliver to Seller a certificate executed by an authorized representative of Buyer (the “Final Adjustment Certificate”) setting forth each adjustment or payment that was not finally determined as of Closing and showing the calculation of each such adjustment, including any Environmental Defect Amount under Section 3.8 and any Excess Title Defect Amount under Section 3.10, and the resulting final purchase price (the “Final Purchase Price”). The Final Adjustment Certificate shall be accompanied by appropriate documentation supporting the adjustments proposed in such Certificate. Each Party shall provide to the other reasonable access to all records in its possession which were used in the preparation of the Initial and Final Adjustment Certificates or may otherwise be necessary for the preparation or review thereof.

               (ii) Seller shall review Buyer’s Final Adjustment Certificate and shall give written notice to Buyer of any objections it has to the calculations shown in such Certificate within ten (10) days after receipt. If Seller does not deliver a notice of objection within such 10-day period, then the Final Adjustment Certificate shall be deemed to be conclusive, final and binding on the Parties. Seller and Buyer shall endeavor in good faith to resolve any such objections within ten (10) days after the receipt by Buyer of Seller’s timely objections. If any objections or disputes have not been resolved at the end of such 10-day period, the disputed portion of the Final Adjustment Certificate shall be determined within the following ten (10) days by a partner in a major, national accounting firm with substantial Oil and Gas audit experience and which is not the auditor of either Seller or Buyer and is mutually acceptable to the Parties, and the determination of such auditor shall be final and binding upon the Parties. Notwithstanding anything to the contrary in this Agreement, the Parties agree that KPMG may serve as auditor despite its performance of any internal auditing services for Seller, if KPMG is not at the relevant time also performing accounting services for Seller, and has not between the Effective Time and the relevant time performed accounting services for Seller, and is not at the relevant time contemplated to be engaged to perform accounting services for Seller. If Seller and Buyer cannot agree with respect to the selection of an auditor, Seller and Buyer each shall select an auditor and those two auditors shall select a third auditor whose determination shall be final and binding upon the Parties. Such auditor shall have the right, if necessary, to retain a qualified environmental consulting firm and/or legal counsel with Oil and Gas experience to assist in making determinations and advising with respect to disputed portions of the Final Adjustment Certificate. The determination of the auditor as to each item in dispute shall be within the range for such item as proposed in the Final Adjustment Certificate, on the one hand, and in Seller’s notice of objection, on the other hand. Seller and Buyer shall bear equally the expenses of such auditor (including those of any professional retained by such auditor in accordance with this clause (ii)) incurred in connection with such determination. Within two (2) days after the Final Adjustment Certificate has been conclusively determined as provided above, Buyer shall pay Seller the amount, if any, by which the Final Purchase Price exceeds the Adjusted Purchase Price, or, if applicable, Seller will pay Buyer the amount, if any, by which the Adjusted Purchase Price exceeds the Final Purchase Price, in each case with interest thereon at the Prime Rate, from and including the Closing Date but excluding the date of payment.

               (iii) All payments to be made pursuant to this Section 3.2 shall be paid by wire or accounts transfer of immediately available funds to the accounts designated by the recipient by written notice to the Party owing such payment. The Party receiving any such payment shall be responsible for allocating it among its Affiliates as appropriate.

     3.3 Allocated Values; Post-Closing Allocations .

          (a) Schedule 3.3(a) attached hereto sets forth an allocation of values among the Assets (the “Allocated Values” of the respective Assets, as applicable). The Parties agree that, to the extent possible, the Allocated Values shall be used for calculating adjustments based on Environmental Defects, if any.

          (b) In addition, 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. Such allocations shall be consistent with the Allocated Values, to the extent possible, 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.

     3.4 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 Closing 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 Closing.

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

     3.6 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.

     3.7 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.

          (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.

          (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 3.7.

          (d) Buyer’s inspections, tests, surveys and studies conducted pursuant to this Section 3.7 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 3.7(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.