Unassociated Document


    


    INDEPENDENT
      CONTRACTOR AGREEMENT

    


    THIS
      INDEPENDENT CONTRACTOR AGREEMENT
      (this "Agreement"), is made and entered into on this 31st day
      of July,
      2007 (the "Effective Date"), by and between ONE WORLD ENERGY
      CORPORATION, a Nevada corporation, and RALPH SMITH & SON, INC., a
      Pennsylvania corporation.  As used in this Agreement, the term “OWEC”
shall mean One World Energy Corporation, or an Applicable One World Affiliate
      (as defined below), as the context requires.  As used in this
      Agreement, the term “Independent Contractor” shall mean Ralph Smith & Son,
      Inc., or an Applicable Smith Affiliate (as defined below), as the context
      requires.

    


    WHEREAS,
      OWEC and
      Independent Contractor have entered into a Contract Mining Agreement, dated
      as
      of July 31st,
      2007 (the “Nowrytown No.1 Agreement”), pursuant to which OWEC agreed to retain
      Independent Contractor as the operator of the surface coal mining operation
      and
      related surface facilities located in Indiana County, Pennsylvania known as
      the
“Nowrytown No.1 Mine”, and Independent Contractor agreed to perform the Work (as
      defined therein), subject to the terms and conditions set forth therein;
      and

    


    WHEREAS,
      OWEC and
      Independent Contractor intend to enter into one or more additional contract
      mining agreements (each, an “Additional Agreement”), pursuant to which
      OWEC, or an affiliate of OWEC (the “Applicable One World Affiliate”), will
      retain Independent Contractor, or an affiliate of Independent Contractor (the
      “Applicable Smith Affiliate”), as an operator of a surface coal mining operation
      and related surface facilities (each, an “Additional Project”).

    


    NOW,
      THEREFORE, in
      consideration of the strict and mutual performance and observance of the terms,
      conditions, covenants, and agreements hereinafter set forth, and intending
      to be
      legally bound, OWEC and Independent Contractor agree as follows:

    


    Section
      1—Net Profit. Under any
      Additional Agreement, Independent Contractor shall be entitled to forty percent
      (40%) of the Net Profit (as defined in the Nowrytown No.1 Agreement), including
      without limitation, expenses incurred under such Additional Agreement, debt
      service expenses and royalties, attributable to the Additional Project, during
      the term of such Additional Agreement.

    


    Section
      2—Operating Capital. Under
      any Additional Agreement, OWEC shall provide all operating capital and furnish
      all of the equipment, tools, machinery, parts, supplies and other items that
      may
      be required from time to time to perform to perform the Work relating to the
      Additional Project as contemplated in the Additional Agreement.  Under
      any Additional Agreement, OWEC shall reimburse Independent Contractor all
      reasonable expenses incurred by Independent Contractor related to the Additional
      Project.

    


    Section
      3—Right of First
      Refusal.  Under any Additional Agreement, before OWEC engages any
      other entity for any other coal mining project, Independent Contractor shall
      have a right of first refusal to be engaged as the operator of such project
      on
      the same terms and conditions offered to such other entity. Independent
      Contractor may exercise its right of first refusal within ten (10) days of
      its
      receipt of a written notice of such offer.

    


                  Section
      4—Integration. This Agreement contains the entire understanding and agreement
      of
      the parties with regard to the transactions contemplated hereunder and it
      supersedes all prior agreements, arrangements and understandings between the
      parties relating to the subject matter of this Agreement.

    


    Section
      5—Choice of
      Law.  This Agreement shall be governed and construed in accordance
      with the laws of the State of Pennsylvania.

    


    Section
      6—Headings.  The
      headings appearing in this Agreement are for convenience of reference only
      and
      shall not be construed as affecting in any way the meaning of the provisions
      of
      this Agreement.

    


    Section
      7—Modification.  This Agreement shall not be modified, changed or
      terminated, in whole or in part, except by written agreement, signed by all
      parties hereto or their respective successors-in-interest.

    


    Section
      8—Counterparts.  This Agreement may, for convenience, be executed in
      several counterparts, each of which shall be deemed to be an original and all
      of
      which, taken together, shall constitute one Agreement.

    


    IN
      WITNESS WHEREOF,
the parties have caused their corporate names to be signed hereto
      by their officers duly authorized.

    


    ONE
      WORLD ENERGY CORPORATION

    


    


    /s/
      Ashvin Mascarenhas

    By:
      ___________________________

    Ashvin
      Mascarenhas, President

    


    


    


    RALPH
      SMITH & SON, INC.

    


    


    /s/
      Ralph Smith

    By:
      ___________________________

    Ralph
      Smith, President