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REIMBURSEMENT AGREEMENT
 
THIS REIMBURSEMENT AGREEMENT dated as of April 19, 2006 (the “Agreement”), is
entered by and between SUNRISE COAL, LLC, a Indiana limited liability company
(“Sunrise Coal”), and HALLADOR PETROLEUM COMPANY, a Colorado corporation
(“Hallador Petroleum”).
 
RECITALS
 
A. Sunrise Coal, as borrower, and OLD NATIONAL BANK, as lender (“Bank”), have
entered into a Credit Agreement, dated as of the date hereof (the “Credit
Agreement”), which provides for, among other things, certain loans (“Loans”) to
be made by Bank to Sunrise Coal. To induce Bank to enter into the Credit
Agreement and provide the Loans to Sunrise Coal, Hallador Petroleum has agreed
to provide a Continuing Guaranty in favor of Bank in the form of Exhibit “A”
attached hereto (the “Guaranty”).
 
B. To induce Hallador Petroleum to execute and deliver the Guaranty to Bank,
Sunrise Coal has agreed to reimburse Hallador Petroleum for any amounts paid, or
damages or losses incurred, by Hallador Petroleum under or in connection with
the Guaranty, pursuant to the terms and conditions set forth in this Agreement.
 
NOW, THEREFORE, to induce Hallador Petroleum to execute and deliver the Guaranty
to Bank and in consideration of the foregoing recitals which by this reference
are incorporated herein and the mutual covenants contained herein, the parties
hereto, each intending to be legally bound hereby, covenant and agree as
follows:
 

Section 1.  
CERTAIN DEFINITIONS.

 
As used herein, the following respective terms shall have the following
respective meanings (terms defined in the plural to include the singular and
vice versa):
 
“Applicable Law” means any law, provision of statute, rule, regulation, or order
of a Governmental Authority applicable to a Person, and all orders and decrees
of all courts and arbitrators in proceedings or actions in which the Person in
question is a party.
 
“Authorized Officer” means, with respect to any Person, its chief executive
officer, chief financial officer, chief accounting officer, any vice president,
or treasurer.
 
“Base Rate” means, as determined by Hallador Petroleum on a daily basis, the
variable rate of interest per annum most recently announced by Wells Fargo Bank,
as its “Prime Rate” or “Reference Rate,” as the case may be, whether or not such
announced rate is the best rate available from such financial institution.
 
“Business Day” means any day on which commercial banks are not authorized or
required to close in Denver, Colorado.
 
“Default” means an Event of Default or any other event which with the giving of
notice or lapse of time, or both, would become an Event of Default.
 
 
 

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“Event of Default” shall have the meaning assigned to such term in Section 7
hereof.
 
“GAAP” means United States generally accepted accounting principles consistently
applied (except for accounting changes in response to FASB releases, or other
authoritative pronouncements).
 
“Governmental Authority” means any federal, state, municipal or other
governmental department, commission, board, bureau, agency or instrumentality,
or any court, or any arbitrator or arbitration board whose rulings are
judicially recognized as lawful and binding, in each case whether of the United
States or foreign.
 
“hereunder”, “herein”, “hereof” and the like mean and refer to this Agreement as
a whole and not merely to the specific section, paragraph or clause in which the
respective word appears.
 
“Loan Documents” means the Credit Agreement and all promissory notes, security
agreements, mortgages, pledge agreements, indemnities, and other agreements,
instruments, and documents executed and/or delivered by Sunrise Coal or any
other Person with respect to, or in connection with, the Loans.
 
“Lien” means any mortgage, pledge, security interest, encumbrance, lien or
charge of any kind whatsoever (including any conditional sale or other title
retention agreement, any lease in the nature thereof, and the filing of or the
agreement to give any financing statement under the Uniform Commercial Code of
any jurisdiction).
 
“Obligations” means the reimbursement obligations of Sunrise Coal under
Section 3.A hereof and all other monetary obligations of Sunrise Coal to
Hallador Petroleum hereunder, including, without limitation, Sunrise Coal’s
obligations set forth in Section 8.D hereof.
 
“person” or “Person” means any natural person, corporation, division of a
corporation, partnership, trust, joint venture, association, company, limited
liability company, estate, unincorporated organization or government or any
agency or political subdivision thereof.
 
“Principal Office” means the principal office of Hallador Petroleum presently
located at 1660 Lincoln Street, Suite 2700, Denver, Colorado 80264.
 

Section 2.  
GUARANTY.

 
Hallador Petroleum agrees, on the terms and subject to the conditions set forth
in this Agreement, to execute and deliver to Bank the Guaranty.
 

Section 3.  
REIMBURSEMENT; FEES; ETC.

 
A.  Obligation. Sunrise Coal is obligated, and hereby unconditionally agrees, to
reimburse Hallador Petroleum on demand for any amounts paid, and all damages,
expenses, and losses incurred, by Hallador Petroleum (or its successors and
assigns) under or in connection with the Guaranty. The payment obligations of
Sunrise Coal hereunder shall be unconditional and irrevocable, and shall be paid
strictly in accordance with the terms hereof under all circumstances, including,
without limitation, the following circumstances:
 
 
 

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(i)  any lack of validity or enforceability of the Loan Documents or the
Guaranty or any other agreement or instrument relating to the Guaranty
(collectively, the “Related Documents”);
 
(ii)  any amendment or waiver of, or any consent to departure from, all or any
of the Related Documents;
 
(iii)  the existence of any claim, set-off, defense or other right which Sunrise
Coal may have at any time against Bank or any transferee or assignee of the
Loans or the Loan Documents (or any persons or entities for whom Bank or any
such transferee or assignee may be acting), Hallador Petroleum, or any other
person or entity, whether in connection herewith, the transactions contemplated
herein or in the Related Documents, or any unrelated transaction; or
 
(iv)  any other circumstance or happening whatsoever whether or not similar to
any of the foregoing, except as a result of Hallador Petroleum’s own gross
negligence or willful misconduct.
 
B.  Interest. Sunrise Coal hereby agrees to pay interest (computed on the basis
of a year of 360 days and actual days elapsed) on the amount of any Obligation
arising as the result of any payment under or in connection with the Guaranty,
in respect of each day during the period from the date of such payment by
Hallador Petroleum until the date the same shall be reimbursed in full to
Hallador Petroleum, at a rate per annum for each day during such period equal to
the Base Rate plus 2% for such day, such interest to be payable on demand. None
of the terms and provisions contained in this Agreement, or in other documents
or instruments related hereto, shall ever be construed to create a contract for
the use, forbearance or detention of money requiring payment of interest at a
rate in excess of the maximum interest permitted to be charged by applicable
laws or regulation governing the Obligations (“Usury Laws”). Borrower shall
never be required to pay interest under this Agreement in excess of the maximum
interest that may be lawfully charged under such Usury Laws, as made applicable
by the final judgment of a court of competent jurisdiction, and the provisions
of this Section shall control over all other provisions hereof and of any other
instrument executed in connection herewith or executed to secure the
indebtedness evidenced hereby, which may be in apparent conflict with this
Section. If Hallador Petroleum collects monies which are deemed to constitute
interest which would otherwise increase the effective interest rate on this
Agreement to a rate in excess of that permitted to be charged by such Usury
Laws, all such sums deemed to constitute interest in excess of the maximum rate
shall, at the option of Hallador Petroleum, either be credited to the payment of
principal or returned to Sunrise Coal.
 
C.  Payments. All payments by Sunrise Coal to Hallador Petroleum under this
Agreement shall be made to Hallador Petroleum at the Principal Office in
immediately available funds on or prior to 12:00 noon Mountain time on the due
date thereof (any payment made after such time being deemed made on the next
succeeding Business Day).
 
 
 

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D.  Commercial Practices. Sunrise Coal agrees that neither Hallador Petroleum
nor any of its officers, directors, employees, agents, or attorneys shall be
liable or responsible for, and the obligations of Sunrise Coal to Hallador
Petroleum hereunder shall not in any manner be affected by: (i) the use which
may be made of the Guaranty or the respective proceeds thereof by Bank or any
other Person; or (ii) any other circumstances whatsoever in making or failing to
make payment under the Guaranty. In furtherance and not in limitation of the
foregoing, Hallador Petroleum may accept documents or notices in connection with
requested payments under the Guaranty that appear on their face to be in order
without responsibility for further investigation.
 

Section 4.  
REPRESENTATIONS AND WARRANTIES.

 
Sunrise Coal represents and warrants to Hallador Petroleum that:
 
A.  Existence and Power. Sunrise Coal has been duly organized and is validly
existing under the laws of Indiana and is in good standing as a foreign
corporation in all jurisdictions where the nature of its properties or business
so requires it. Sunrise Coal has the limited liability company power to own its
properties and carry on its business as now being conducted, to execute, deliver
and perform its obligations under this Agreement and other documents
contemplated hereby to which it is a party.
 
B.  Authority and No Violation. The execution, delivery and performance of this
Agreement (a) have been duly authorized by all necessary limited liability
company action on the part of Sunrise Coal, (b) will not violate any provision
of any Applicable Law, any order of any court or other Governmental Authority
applicable to Sunrise Coal or any of its properties or assets, (c) will not
violate any provision of the Articles of Organization or Operating Agreement of
Sunrise Coal or, of any indenture, any agreement for borrowed money, any bond,
note or other similar instrument or any other agreement to which Sunrise Coal is
a party or by which Sunrise Coal or any of its properties or assets are bound,
and (d) will not result in the creation or imposition of any Lien, charge or
encumbrance of any nature whatsoever upon any property or assets of Sunrise Coal
other than pursuant to this Agreement.
 
C.  Governmental Approval.
 
(a)  No action, consent or approval of, or registration or filing with, or any
other action by, any Governmental Authority is required in connection with the
execution, delivery and performance by Sunrise Coal of this Agreement except for
consents, approvals, filings and registrations which have been obtained or made
and remain in full force and effect, or which are not yet required to be
obtained or made but which will be obtained or made and will be in full force
and effect when and to the extent required.
 
(b)  All necessary consents and approvals by Governmental Authorities and other
Persons in connection with the transactions contemplated under this Agreement,
or otherwise referred to herein, have been obtained and remain and will remain
in effect.
 
 
 

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D.  Financial Statements. The unaudited financial statements of Sunrise Coal at
December 31, 2005, each in the form previously delivered to Hallador Petroleum,
fairly present in all material respects the financial condition and the results
of operations of Sunrise Coal at the date or for the period indicated.
 
E.  No Material Adverse Change. Except as previously disclosed in writing to
Hallador Petroleum, since December 31, 2005, there has been no material adverse
change in the business, assets, property, condition (financial or otherwise), or
results of operations of Sunrise Coal.
 
F.  Litigation; Compliance with Laws.
 
(a)  Except as previously disclosed in writing to Hallador Petroleum, there are
no actions, lawsuits or other proceedings pending (including, but not limited
to, matters relating to environmental liability), or, to the knowledge of
Sunrise Coal, threatened, against or affecting Sunrise Coal or any of its
properties, by or before any Governmental Authority, arbitration panel, or
arbitrator, which could reasonably be expected to have a material adverse effect
on the business, assets, property, condition (financial or otherwise), prospects
or results of operations of Sunrise Coal or which seeks to restrain, prevent,
impose materially adverse conditions upon, hinder or delay any of the
transactions contemplated hereby.
 
(b)  The transactions contemplated hereby will not violate any Applicable Law.
 
G.  Federal Reserve Regulations. No part of the proceeds of any extension of
credit under this Agreement will be used, directly or indirectly, and whether
immediately, incidentally or ultimately for any purpose violative of or
inconsistent with any of the provisions of any regulations of the Board of
Governors of the Federal Reserve System, including, without limitation,
Regulations T, U and X thereto.
 
H.  Investment Company Act. Sunrise Coal is not, and will not during the term of
this Agreement be, (x) an “investment company,” within the meaning of the
Investment Company Act of 1940, as amended or (y) subject to regulation under
the Public Utility Holding Company Act of 2005, the Federal Power Act or any
foreign, federal or local statute or regulation limiting its ability to incur
indebtedness for money borrowed as contemplated hereby.
 
I.  Enforceability. This Agreement constitutes the legal, valid and enforceable
obligation of Sunrise Coal (subject, as to enforcement, to applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the enforcement of creditors’ rights generally and to general
principles of equity).
 

Section 5.  
CONDITIONS PRECEDENT.

 
The obligation of Hallador Petroleum to execute and deliver the Guaranty to Bank
is subject to the following conditions precedent:
 
A.  Sunrise Coal shall have executed and delivered to Hallador Petroleum this
Agreement and any other agreement, document, or instrument requested by Hallador
Petroleum.
 
B.  The representations and warranties set forth in Section 4 hereof shall be
true and correct in all material respects.
 
C.  No Default or Event of Default shall have occurred and be continuing or will
result from the execution and delivery of the Guaranty.
 
 
 

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Section 6.  
COVENANTS OF SUNRISE COAL.

 
From the date hereof and so long as the Guaranty shall be outstanding and until
the payment in full of all of the Obligations, Sunrise Coal hereby agrees as
follows:
 
A.  Financial Statements and Reports.
 
(a)  As soon as is practicable, but in any event within 90 days after the end of
each fiscal year, Sunrise Coal will furnish or cause to be furnished to Hallador
Petroleum the audited balance sheet of Sunrise Coal as at the end of, and the
related statements of income, shareholders’ equity and cash flow for, such year,
and the corresponding figures as at the end of, and for, the preceding fiscal
year, accompanied by an opinion of Clifton Gunderson LLP or EKS & H, which
report and opinion shall be prepared in accordance with generally accepted
auditing standards relating to reporting and which report and opinion shall
(i) be unqualified as to going concern and scope of audit and shall state that
such financial statements fairly present the financial condition of Sunrise Coal
as at the dates indicated and the results of operations and cash flows for the
periods indicated, and (ii) contain no material exceptions or qualifications
except for qualifications relating to accounting changes (with which such
independent public accountants concur) in response to FASB releases or other
authoritative pronouncements;
 
(b)  As soon as is practicable, but in any event within 30 days after the end of
each of the first three fiscal quarters of each of its fiscal years, Sunrise
Coal will furnish or cause to be furnished to Hallador Petroleum the unaudited
balance sheet of Sunrise Coal as at the end of, and the related unaudited
statements of income, shareholders’ equity and cash flow for, such quarter, and
for the period from the beginning of the then current fiscal year to the end of
such fiscal quarter and, the corresponding figures as at the end of, and for,
the corresponding period in the preceding fiscal year, together with a
certificate signed by an Authorized Officer of Sunrise Coal, on behalf of
Sunrise Coal, to the effect that such financial statements, while not examined
by independent public accountants, reflect, in his or her opinion and in the
opinion of Sunrise Coal, all adjustments necessary to present fairly in all
material respects the financial position of Sunrise Coal as at the end of the
fiscal quarter and the results of its operations for the quarter then ended in
conformity with GAAP consistently applied, subject only to year-end adjustments
and to the absence of footnote disclosure; and
 
(c)  From time to time, Sunrise Coal will furnish or cause to be furnished to
Hallador Petroleum such additional information regarding the financial condition
or business of Sunrise Coal as Hallador Petroleum may reasonably request.
 
B.  Existence, Properties, etc. Sunrise Coal will do or cause to be done all
things necessary to preserve, renew and keep in full force and effect its
limited liability company existence, rights, licenses, permits and franchises,
and comply with all applicable statutes, regulations and orders of, and all
applicable restrictions imposed by, any Governmental Authority.
 
 
 

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C.  Books and Records. Sunrise Coal will maintain or cause to be maintained at
all times books and records of its financial operations which are true and
correct in all material respects and provide Hallador Petroleum and its
representatives reasonable access to such books and records during regular
business hours in order that Hallador Petroleum may make such audits and
examinations and make abstracts from such books, accounts, records and other
papers and may discuss the affairs, finances and accounts with, and be advised
as to the same by, officers and independent accountants, all as Hallador
Petroleum may deem appropriate for the purpose of verifying the accuracy of the
various reports delivered by Sunrise Coal to Hallador Petroleum pursuant to this
Agreement or for otherwise ascertaining compliance with this Agreement.
 

Section 7.  
EVENTS OF DEFAULT.

 
In case of the happening and during the continuance of any of the following
events (herein called “Events of Default”):
 
A.  Sunrise Coal shall fail to pay when due any Obligation or any other amount
payable to Hallador Petroleum under this Agreement;
 
B.  Sunrise Coal shall fail to observe or perform any other covenant, condition
or agreement to be observed or performed pursuant to the terms of this
Agreement, and such default shall continue unremedied for ten (10) consecutive
days after Sunrise Coal receives written notice of such occurrence from Hallador
Petroleum;
 
C.  Sunrise Coal shall generally not pay its debts as they become due or shall
admit in writing its inability to pay its debts, or shall make a general
assignment for the benefit of creditors; or Sunrise Coal shall commence any
case, proceeding or other action seeking to have an order for relief entered on
its behalf as debtor or to adjudicate it a bankrupt or insolvent, or seeking
reorganization, arrangement, adjustment, liquidation, dissolution or composition
of it or its debts under any law relating to bankruptcy, insolvency,
reorganization or relief of debtors or seeking appointment of a receiver,
trustee, custodian or other similar official for it or for all or any
substantial part of its property or shall file an answer or other pleading in
any such case, proceeding or other action admitting the material allegations of
any petition, complaint or similar pleading filed against it or consenting to
the relief sought therein; or Sunrise Coal shall take any action to authorize
any of the foregoing; or
 
D.  Without the application or consent of Sunrise Coal, any involuntary case,
proceeding or other action against Sunrise Coal shall be commenced seeking to
have an order for relief entered against it as debtor or to adjudicate it a
bankrupt or insolvent, or seeking reorganization, arrangement, adjustment,
liquidation, dissolution or composition of it or its debts under any law
relating to bankruptcy, insolvency, reorganization or relief of debtors, or
seeking appointment of a receiver, trustee, custodian or other similar official
for it or for all or any substantial part of its property, and such case,
proceeding or other action (i) results in the entry of any order for relief
against it or (ii) shall remain undismissed for a period of thirty (30) days;
 
then, in every such event and at any time thereafter during the continuance of
such event, Hallador Petroleum may, by notice to Sunrise Coal, declare an Event
of Default (except with respect to the occurrence of an Event of Default under
Section 7.C or Section 7.D hereof, as to which no notice or declaration need be
given) and (a) terminate the obligation of Hallador Petroleum to execute and
deliver the Guaranty to Bank (if the same has not yet been executed and
delivered) or (b) declare all amounts owing hereunder to be due and payable, or
both, whereupon such obligation shall terminate, or all such amounts shall
become due and payable, or both; provided, however, that upon the occurrence of
an Event of Default specified in Section 7.C or Section 7.D, such obligation
shall terminate and all such amounts shall become immediately due and owing in
each case automatically, without any action on the part of Hallador Petroleum
and without any notice, protest, presentment or demand, all of which are hereby
expressly waived by Sunrise Coal.
 

Section 8.  
MISCELLANEOUS.

 
A.  Notices. Except when otherwise required by law, any notice which a party is
required or may desire to give the other under or in connection with this
Agreement shall be in writing and may be sent by personal delivery or by mail
(either (i) by United States registered or certified mail, return receipt
requested, postage prepaid, or (ii) by Federal Express or similar generally
recognized overnight carrier regularly providing proof of delivery), addressed
as provided below in this Section 8.A. Any notice so given by mail shall be
deemed to have been given as of the date of delivery (whether accepted or
refused) established by U.S. Post Office return receipt or the overnight
carrier’s proof of delivery, as the case may be. Any such notice not so given
shall be deemed given upon receipt of the same by the party to whom the same is
to be given.
 
(a)  If to Hallador Petroleum, at:
 
1660 Lincoln Street, Suite 2700
Denver, Colorado 80264
Attn: Victor Stabio
 
(b)  If to Sunrise Coal, at:
 
6641 S. State Road 46
Terre Haute, Indiana 47802
Attention: Brent Bilsland
 
B.  Survival of Covenants. All covenants, agreements, representations and
warranties made herein and in the certificates delivered pursuant hereto shall
survive the execution and delivery of the Guaranty by Hallador Petroleum and
shall continue in full force and effect so long as the Guaranty is outstanding
and until the Obligations and all other obligations of Sunrise Coal hereunder
shall have been paid and performed in full. Whenever in this Agreement any of
the parties hereto is referred to, such reference shall, subject to the last
sentence of this Section 8.B, be deemed to include the successors and assigns of
such party, and all covenants, promises and agreements by or on behalf of
Sunrise Coal which are contained in this Agreement shall inure to the benefit of
the successors and assigns of Hallador Petroleum. Sunrise Coal may not transfer
its rights or obligations under this Agreement without the prior written consent
of Hallador Petroleum.
 
C.  Expenses. Each party agrees to pay its own expenses incurred in connection
with the preparation and administration of this Agreement (whether or not the
transactions hereby contemplated shall be consummated). Sunrise Coal agrees to
pay all out-of-pocket expenses incurred by Hallador Petroleum in connection with
enforcement of the rights of Hallador Petroleum in connection with this
Agreement, including, but not limited to, the fees and disbursements of counsel
to Hallador Petroleum.
 
D.  Indemnification. Sunrise Coal hereby indemnifies and holds harmless Hallador
Petroleum from and against any and all claims and damages, losses, liabilities,
costs and expenses which Hallador Petroleum may incur (or which may be claimed
against Hallador Petroleum by any Person whatsoever) by reason of or in
connection with the execution and delivery or transfer of, or payment or failure
to pay under, the Guaranty; provided that Sunrise Coal shall not be required to
indemnify Hallador Petroleum for any claims, damages, losses, liabilities, costs
or expenses to the extent, but only to the extent, caused by the willful
misconduct or gross negligence of Hallador Petroleum as determined by a final
order issued by a court of competent jurisdiction.
 
E.  No Waiver. Neither any failure nor any delay on the part of Hallador
Petroleum in exercising any right, power or privilege hereunder, nor any course
of dealing with respect to any of the same, shall operate as a waiver thereof,
nor shall a single or partial exercise thereof preclude any other or further
exercise or the exercise of any other right, power or privilege. The remedies
herein provided are cumulative, and not exclusive of any remedies provided by
Applicable Law.
 
F.  Modification, Amendment, Waiver, etc. No modification, amendment or waiver
of any provision of this Agreement, and no consent to any departure by Sunrise
Coal herefrom, shall be effective unless the same shall be in writing and signed
by Hallador Petroleum and then such waiver or consent shall be effective only in
the specific instance and for the purpose for which given. No notice to or
demand on Sunrise Coal shall entitle Sunrise Coal to any other or further notice
or demand in the same, similar or other circumstances.
 
G.  Counterparts. This Agreement may be executed in two or more counterparts,
each of which shall constitute an original, but when taken together shall
constitute but one agreement and any of the parties hereto may execute this
Agreement by signing any such counterpart.
 
H.  Accounting Terms and Principles. Except as otherwise expressly stated or
defined herein, all computations required hereunder shall be made by the
application of, and each accounting term used herein shall have the meaning
given to it under, United States generally accepted accounting principles
applied on a basis consistent with that used in the preparation of the audited
financial statements referred to in Section 4.D hereof.
 
I.  Headings. The table of contents and the section and subsection headings used
herein have been inserted for convenience of reference only and do not
constitute matters to be considered in interpreting this Agreement.
 
J.  Governing Law; Jurisdiction; Waiver of Jury Trial, Etc.
 
(a)  This Agreement shall be governed by, and construed in accordance with, the
laws of the State of Colorado.
 
(b)  Sunrise Coal hereby irrevocably and unconditionally submits, for itself and
its property, to the nonexclusive jurisdiction of any Colorado State court or
federal court of the United States of America sitting in Denver, Colorado, and
any appellate court from any thereof, in any action or proceeding arising out of
or relating to this Agreement, or for recognition or enforcement of any
judgment, and Sunrise Coal hereby irrevocably and unconditionally agrees that
all claims in respect of any such action or proceeding may be heard and
determined in any such Colorado State or, to the extent permitted by law, in
such federal court. Sunrise Coal agrees that a final judgment in any such action
or proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law. Nothing in this
Agreement shall affect any right that any party may otherwise have to bring any
action or proceeding relating to this Agreement in the courts of any
jurisdiction.
 
(c)  Sunrise Coal irrevocably and unconditionally waives, to the fullest extent
it may legally and effectively do so, any objection that it may now or hereafter
have to the laying of venue of any suit, action or proceeding arising out of or
relating to this Agreement in any Colorado State or federal court. Sunrise Coal
hereby irrevocably waives, to the fullest extent permitted by law, the defense
of an inconvenient forum to the maintenance of such action or proceeding in any
such court.
 
(d)  WAIVER OF RIGHT TO JURY TRIAL. SUNRISE COAL HEREBY WAIVES TRIAL BY JURY,
AND SUNRISE COAL HEREBY WAIVES RIGHTS OF SETOFF AND THE RIGHT TO IMPOSE
COUNTERCLAIMS, IN ANY LITIGATION IN ANY COURT WITH RESPECT TO, IN CONNECTION
WITH, OR ARISING OUT OF THIS AGREEMENT, THE TRANSACTIONS CONTEMPLATED THEREBY OR
THE ACTIONS OF HALLADOR PETROLEUM IN THE NEGOTIATION, ADMINISTRATION,
PERFORMANCE OR ENFORCEMENT THEREOF, OR ANY OTHER CLAIM OR DISPUTE HOWSOEVER
ARISING, BETWEEN HALLADOR PETROLEUM AND SUNRISE COAL, AND SUNRISE COAL CONFIRMS
THAT THE FOREGOING WAIVERS ARE INFORMED AND IT HAS RECEIVED THE ADVICE OF
COUNSEL WITH REGARD TO THE FOREGOING WAIVERS.
 
[Signatures on next page]
 

 

 

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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the date first above written.
 
                                                                          
SUNRISE COAL, LLC,
 
                                                                          an
Indiana limited liability company
 
                                                                         By: 
/s/ BRENT BILSLAND
  Print Name: Brent Bilsland
                                                                         
Title:  Member
 
                                                                         
HALLADOR PETROLEUM COMPANY,
 
                                                                          a
Colorado corporation
 
                                                                         
By:  /S/VICTOR P. STABIO
Print Name:  Victor P. Stabio
Title: President, CEO and CFO
 
 
 

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EXHIBIT “A”
 

 
FORM OF GUARANTY
 
(see attached copy)