*Confidential materials omitted and filed separately with the SEC. Asterisks denote omissions.*THEREFORE, based on the foregoing, and for good and valuable consideration, the partiesrepresent, covenant, state, and agree as follows:**SECTION 1 DEFINITIONS**1.1 **Allotted Land:**All allotted trust land, as well as all allotted fee land, owned byindividual Crow Indians whether or not subject to federal restraints on alienation.1.2 **Regional Director:**The Regional Director of the Bureau of Indian Affairs, Rocky MountainRegional Office, Billings, Montana, or any of that individual’s successors.1.3 **Carrier:**Trucks, railroads, conveyor belts, pipelines, or any instrumentality ormachinery used to deliver Coal after sale.1.4 **Coal:**Any combustible carbonaceous rock, whether classified as anthracite, bituminous,subbituminous, or lignite, as defined by ASTM Standard D-388-77, along with all substances mixedwith Coal.1.5 **Coal Delivery or Delivered Coal:**Coal loaded into a Carrier at the load out facilityoperated by Westmoreland on the Tract III Lease for movement to another location for commercialuse.1.6 **Coal Lease:**The document attached hereto as Exhibit A, which was executed concurrentlywith execution of this Exploration Agreement, by the Crow Tribe and Westmoreland.1.7 **Crow Indian:**An individual who is properly enrolled as a member of the Crow Tribe.1.8 **Crow Reservation:**All lands lying within the exterior boundaries of the Crow IndianReservation in the state of Montana. For the purposes of this Exploration Agreement, the “CrowReservation” is further divided into: (i) Allotted Land; (ii) Tribal Land; and (iii) Fee Land, asthose terms are defined herein.1.9 **Exercise Date:**The date on which Westmoreland exercises its option to lease pursuant toSection 3.2.1.10 **Exploration Agreement:**This document and the exhibits and attachments hereto.1.11 **Exploration Rights:**The exclusive right to enter in and upon the Prospect Area or MiningArea for the purpose of conducting drilling, exploration, environmental testing, monitoring, datagathering, and other incidental rights relating thereto, including the right to remove and testsamples of Coal. These Exploration Rights shall be limited in scope and only pertain to Coalexploration.
 
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*Confidential materials omitted and filed separately with the SEC. Asterisks denote omissions.*1.12 **Facilities Area:**The area within the Tract III Lease that will be utilized and isnecessary for the production of Coal under this Exploration Agreement, including, but not limitedto, haul roads, access roads, buildings, water drainage courses, dams, ponds, water wells andstorage facilities, Coal processing facilities, railroads, sidetracks, switches, storagefacilities, conveyors, and other structures and improvements.1.13 **Fee Land:**Any land except Tribal Land and/or Allotted Land.1.14 **Mining Activities:**All functions and activities, whether performed on or off the CrowReservation, required to prepare for and conduct the mining, preparation, transportation, andmarketing of Coal, by any method, from the Mining Area covered by this Exploration Agreement;including, but not limited to: a. Pre-development drilling, sampling, testing, and data gatheringactivities;  b. Environmental and permitting activities; c. Design, construction, and operation of the mine and relatedfacilities such as buildings, power lines, access roads, railroads, and othertransportation facilities; d. Hauling Coal, Coal processing, or delivery to a Carrier and allequipment, machinery, and workers related thereto;  e. Related administrative activities;  f. Termination activities; and  g. Reclamation.1.15 **Mining Area:**The tract of the South Extension Area selected and identified pursuant toSection 8 of this Exploration Agreement.1.16 **Mining Permits:**All permits, plans, licenses, and approvals required by the SurfaceMining Control and Reclamation Act of 1977; the Clean Air Act of 1990; the Federal Water PollutionControl Act, as amended; and all other applicable governmental permits, plans, approvals, andlicenses required in order to conduct Mining Activities as contemplated by this ExplorationAgreement.1.17 **Operating Subsidiary:**A wholly owned subsidiary of Westmoreland to which Westmorelandmay sublease or assign all or a portion of the lands leased pursuant to this Exploration Agreementand the Mining Area.
 
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*Confidential materials omitted and filed separately with the SEC. Asterisks denote omissions.*1.18 **Prospect Area:**The area of land identified on the map or maps attached hereto as ExhibitB.1.19 **Secretary of Interior or Secretary:**The Secretary of Interior of the United States orhis duly authorized representative.1.20 **South Extension**: An area of land on the Crow Reservation south of the existing Tract IIILease, shown on Exhibit “B.”1.21 **Superintendent:**The Superintendent of the Bureau of Indian Affairs at Crow Agency,Montana.1.22 **Ton:**A measure of weight of 2000 pounds avoirdupois.1.23 **Tract III Lease:**The existing Coal Mining Lease (United States Department of theInterior Bureau of Indian Affairs, Contract No. 1420-0252-4088, Tract 3, Sale 3), together with allamendments and exhibits thereto, entered into between the Crow Tribe and Westmoreland.1.24 **Tribal Attorney:**An attorney retained by the Crow Tribe to represent and act as thelegal representative for the Crow Tribe with regard to this Exploration Agreement.1.25 **Tribal Land:**All land, whether now owned or hereafter acquired, held in trust by theUnited States of America for the Crow Tribe, as well as all Fee Land owned by the Crow Tribe,including Fee Land subject to federal restrictions on alienation.1.26 **Tribal Coal:**All Coal, any interest in which is owned by the Crow Tribe, whether held infee or in trust by the United States for the benefit of the Crow Tribe, or in fee subject to arestriction on alienation.1.27 **Trust Land:**All land held in trust by the United States of America for individual CrowIndians or for the Crow Tribe.**SECTION 2 EXPLORATION LICENSE**2.1 **Grant.**The Crow Tribe grants to Westmoreland, for a term commencing on the date ofapproval of this Exploration Agreement by both parties and ending on April 1, 2005 (unless extendedpursuant to Section 5.4), Exploration Rights in and on the Prospect Area for all Tribal Land andTribal Coal located within the Prospect Area. Approval by the Crow Tribe shall be given bysignature of the Chairman and approval as provided in Section 5.1. Approval by Westmoreland shallbe upon approval by its Board and execution of this Agreement by its executive.
 
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*Confidential materials omitted and filed separately with the SEC. Asterisks denote omissions.*2.2 **Exploration Rights.**Westmoreland, as licensee, shall have the right to exercise allExploration Rights, including the right to drill, prospect, explore, test, develop, and work at itsown discretion and at its own expense, on all or any part of the Prospect Area on the conditionall work and all improvements made by Westmoreland on the Prospect Area, or any part of the CrowReservation, under the terms of this Exploration Agreement and during the period of thisExploration Agreement, shall be done in a miner-like and proper manner, so that the Prospect Areashall be carefully operated and the minerals contained in the Prospect Area may be sampled andevaluated in an economical and environmentally responsible manner. a. **Roads.**Westmoreland may use existing roads, if any, on theSouth Extension and may construct and maintain at its own expense anyadditional roads within the Prospect Area that are necessary in carrying onprospecting and exploration work. The Crow Tribe consents to the constructionand use of such roads and will cooperate in obtaining any needed consents orapprovals from any government entity, including the BIA. b. **No Public Right.**The public shall obtain no rights to anyroads constructed by Westmoreland, nor shall Westmoreland be obliged tomaintain said roads for use by any other person, or permit any other persons touse them, and on termination of this Exploration Agreement, or if at any timeit becomes unnecessary for Westmoreland to use any roads for conductingauthorized operations, the right to use and any obligation to maintain theroads shall cease and, subject to any need to use roads to completereclamation, all rights shall revest in the surface owner.Installations made by Westmoreland in connection with roads may be removedby Westmoreland. c. **Removal and Reclamation.**Installations made by Westmorelandin connection with roads may be removed by Westmoreland. If Westmoreland doesnot exercise its option, and subject to all terms and conditions of itsgovernmental permits, Westmoreland will reclaim and restore all roads andrelated installations it has constructed, except to the extent that the surfaceowners (including the Crow Tribe) wish them to remain in place.2.3 **Licensing and Permits.**Prior to exercising the exploration rights set forth in thisExploration Agreement, Westmoreland shall obtain all necessary licenses and permits from thefederal government. The parties recognize that time is of the essence in Westmoreland’s ability toconduct exploration within the Prospect Area, and it is contemplated that Westmoreland will be ableto obtain a federal approval of a prospecting permit for the limited purpose of conducting thoseexploration activities immediately after the Crow Tribe’s approval of this Agreement, and prior tofederal approval pursuant to the requirements of the IMDA. The Crow Tribe shall cooperate fullywith Westmoreland in Westmoreland’s attempt to obtain all requisite licenses and permits, and theCrow Tribe shall impose no charges for same.
 
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*Confidential materials omitted and filed separately with the SEC. Asterisks denote omissions.*2.4 **Exploration Results.**Upon exercise of its option to lease as provided for in Section 3 ofthis Exploration Agreement, or if Westmoreland elects not to lease, Westmoreland shall provide onecopy each to the Crow Tribe, MMS, and the Regional Director of logs, tests, and other raw dataobtained through the exploration efforts of Westmoreland on the Prospect Area, which the CrowTribe, MMS, and the Regional Director agree to keep strictly confidential. If Westmoreland electsnot to lease, all data developed hereunder shall be provided to the Crow Tribe as additionalconsideration for the right of first refusal provided in Section 3.3. Westmoreland shall notprovide or disclose the data to any other party. The data provided to the Tribe may be usedwithout restriction by the Tribe and its consultants for planning a Tribally-owned mine or providedby the Tribe to other potential lessors, developers, operators, or partners at the Tribe’s solediscretion.2.5 **Reservation of Right to Grant Additional Exploration Licenses.**The Crow Tribe retains theright to grant exploration rights for minerals other than Coal, on the Prospect Area designated byWestmoreland, but the parties agree any exploration rights so granted shall not interfere with theexploration rights of Westmoreland. Any exploration rights granted to parties other thanWestmoreland covering the Prospect Area shall provide that activities conducted pursuant to suchrights are subordinate to the exploration rights of Westmoreland and thus shall not interfere withWestmoreland’s exploration rights and shall further provide any selection of a mining (includingdrilling for hydrocarbons) area by such third parties shall be made only after Westmoreland hasselected its Mining Area in accordance with Section 8 of this Exploration Agreement, and afterselection, Westmoreland shall have the exclusive use of said Mining Area. To the extentpracticable, Westmoreland shall conduct its exploration activities so as not to diminish thequantity or value of the Tribe’s Coal or coal bed methane resources in seams that Westmoreland doesnot intend to mine under this Agreement.**SECTION 3 OPTION TO LEASE**3.1 **Exclusive Option to Lease.**Westmoreland shall have the exclusive option to lease the CrowTribe’s Coal in the Prospect Area. Said option shall be exercised, if at all, upon completion ofWestmoreland’s exploration and reserve analysis in the Prospect Area or no later than April 1,2005, unless Westmoreland elects the extension provided in provision 5.4 of this ExplorationAgreement.3.2 **Exercise of Option.**If Westmoreland elects to exercise the option granted and receive aCoal Lease to the Mining Area, it shall notify the Crow Tribe in a manner in accordance withprovision 25.3 of this Exploration Agreement. On giving such notice, Westmoreland shall beentitled to receive, in accordance with and subject to the terms of this Exploration Agreement, alease in the form of the Coal Lease attached hereto as Exhibit A. The Crow Tribe shall, on thereceipt of the notice of Westmoreland’s intention to exercise its option, deliver the fullyexecuted lease to Westmoreland.
 
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*Confidential materials omitted and filed separately with the SEC. Asterisks denote omissions.*3.3 **Conversion of Option into Right of First Refusal.**The option to demand and receive a CoalLease, if not exercised, shall convert into a right of first refusal for as long as Westmorelandoperates the Absaloka Mine. If the Crow Tribe receives an offer to lease Coal in theProspect Area from any party other than Westmoreland during the right of first refusal period,it must present to Westmoreland an offer to lease said Coal on the same terms as said offer, andWestmoreland shall have sixty (60) days within which to accept or reject.This right of first refusal shall not apply if, after Westmoreland fails to exercise itsoption, the Crow Tribe decides to develop the Coal in the Prospect Area itself, or through anyentity or joint venture of which the Crow Tribes owns not less than one-half (i.e., aTribally-owned mine); provided, however, that Westmoreland will be given the opportunity to bid onany general contract for operating a Tribally-owned mine in the Prospect Area.The Crow Tribe must inform any offeror no later than five (5) days after receiving any offerof Westmoreland’s right of first refusal.3.4 **Machinery and Equipment.**No equipment, tools, machinery, improvements, or personalproperty of any nature or description brought or placed in the property prior to the exercise ofthis option by Westmoreland for use in the work shall become a fixture.All the equipment, structures, improvements, and other property shall remain the property ofWestmoreland, subject to removal by Westmoreland. If Westmoreland does not exercise this option,it shall be entitled to remove all equipment, tools, machinery, structures, improvements, andpersonal property from the property within ninety (90) days after the expiration of this option.3.5 **Title of Owner.**The Crow Tribe represents that it is the lawful owner of all mineralslocated in the Mining Area, as specifically described herein, and such Tribal Land as is located inthe Mining Area. The Crow Tribe further represents the minerals covered by this ExplorationAgreement are each free from all liens and encumbrances of every nature and description.During the period of this option, the Crow Tribe shall protect all of its property in theMining Area from any and all liens except those arising from the acts of Westmoreland on the MiningArea.The Crow Tribe shall not encumber any of its property in the Mining Area or any part of it andshall furnish to Westmoreland satisfactory evidence of good title to same not less than ninety (90)days after any written request from Westmoreland to do so.Nothing herein shall be construed as prohibiting the Tribe from pledging or assigning paymentsdue the Tribe under this Agreement, including lump sum payments, royalties, and taxes.3.6 **Unavoidable Delays.**Any time lost by Westmoreland in the event of Force Majeure, as thatterm is defined in Section 11 of this Exploration Agreement, shall not run against the timespecified in this Exploration Agreement for exercise of this option.
 
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*Confidential materials omitted and filed separately with the SEC. Asterisks denote omissions.***SECTION 4 SETTLEMENT WITH MMS**As additional consideration for this Exploration Agreement, the parties agree to settle thematters recited in the Settlement Agreement attached hereto as Exhibit C by executing same andcarrying out its terms.Except for the Exploration License granted in Section 2, the Crow Tribe’s performance of thisExploration and Option to Lease Agreement is contingent upon the Tribe’s receipt of the payment dueunder said Settlement Agreement as provided in Section 5.2 below.**SECTION 5 LUMP SUM PAYMENTS****Payments.**In consideration for the execution of this Exploration Agreement, as well as thegrant of the rights and obligations contained in this Exploration Agreement, and the agreement tosettle the MMS dispute per Section 4, Westmoreland shall make lump sum payments as follows:5.1 [*****] upon final approval of this Exploration Agreement, including the Coal Lease andthe MMS Settlement Agreement. For purposes of this contingency, the term “final approval” shallmean binding approval of this Exploration Agreement and Coal Lease, and all exhibits and agreementsattached thereto, by the Crow Tribe by signed approval of the Executive Branch of the governingbody of the Crow Tribe of Indians and final and binding approval by the legislature of the CrowTribe pursuant to Article V, Section 2(d), of the Constitution of the Crow Tribe. A true andcorrect copy of the Crow Tribal Legislative Act No. CLB 0402, enacted February 10, 2004, andapproved February 12, 2004, approving this Exploration Agreement and the Coal Lease, and allexhibits and attachments, and authorizing the Executive of the Crow Government to execute saidagreements on behalf of the Crow Tribe is attached hereto as Exhibit “D.”If Westmoreland elects not to exercise its option, or if this Exploration Agreement is notapproved by the Secretary as provided in Section 21, then the [*****], paid pursuant to this, shallbe treated as an advance of royalty and taxes under the existing Tract III Lease and shall bereimbursed *pro rata*over the next twenty-four (24) months following expiration of the term of theoption.5.2 One Million Five Hundred Thousand Dollars and 0/100 ($1,500,000), following approval perSection 5.1, and upon approval and execution of the Settlement Agreement attached as Exhibit C,according to its terms, releasing Westmoreland from any further royalties, assessments, or taxes ofany kind based on option payments received from Xcel Energy (formerly NSP), from the period from1986 to 1999, as full, final and complete settlement of the MMS dispute. Following approval,execution, and payment as provided herein, the MMS Settlement Agreement shall survive any of thefollowing: termination of this Exploration Agreement or the Coal Lease, or failure or refusal ofthe Secretary to approve same, and shall be permanent and binding according to its terms.This lump sum payment for the MMS Settlement Agreement is not contingent upon federal approvalof this Exploration and Option to Lease Agreement or associated prospecting permit or Coal MiningLease and is non-recoupable according to the terms of the Settlement Agreement, as long as it hasbeen separately approved according to its terms.
 
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*Confidential materials omitted and filed separately with the SEC. Asterisks denote omissions.*5.3 If Westmoreland elects to exercise the option specified in Section 3 of this ExplorationAgreement, Westmoreland shall pay the Crow Tribe the sum of [*****], which shall be paid, less anyadvance payment as provided in Section 5.4 below, within ten (10) days of exercising the option.5.4 Westmoreland may extend its exploration rights and the date for exercising its option fromApril 1, 2005, to June 1, 2006, by paying an additional [*****] to the Crow Tribe on or beforeApril 1, 2005. If Westmoreland subsequently elects to exercise its right to mine, said [*****]shall be an advance on the consideration required for Westmoreland’s right to elect its option asspecified in provision 5.3. If Westmoreland elects not to exercise its option, then [*****] ofthis payment shall be treated as an additional advancement on royalty and taxes under the existingTract III Lease to be reimbursed over the next eight (8) quarters.5.5 With the exception of the contingencies outlined in Sections 5.1 and 5.4 of thisExploration Agreement, the above described lump sum payments shall not be recoupable against futureroyalties, taxes, or any other amounts Westmoreland owes the Crow Tribe.5.6 All lump sum payments to the Crow Tribe shall be made to the Superintendent in trust forthe use and benefit of the Crow Tribe.5.7 All lump sum payments shall be paid by electronic funds transfer to an account or accountsdesignated by the Crow Tribe and approved by the Superintendent.**SECTION 6 AMENDMENT TO TRACT III LEASE**6.1 **Royalty Renegotiation.**Lessor and Lessee agree that the royalty renegotiation providedfor in the Tract III Lease, which is scheduled for November of 2004, shall be resolved as follows:Lessor and Lessee agree that the tax and royalty terms of the Coal Lease shall be amended into, andshall apply, to the Tract III Lease from and after December 1, 2004, for new Coal sales (new salesmade or contracted after December 1, 2004). Current Tract III Lease Royalty Rates shall remain ineffect on all sales made under contracts existing on December 1, 2004, through their term, or anyprice renegotiation date, whichever comes first, but Westmoreland shall agree that on such sales,the Crow Tribe will realize an overall royalty of not less than that provided in Article 7 of theCoal Lease.6.2 **Extension of Tract III Lease.**If Westmoreland exercises its option to lease under thisExploration Agreement, the parties recognize that Westmoreland must use its current Tract IIIFacilities Area for the efficient production of Coal from the Mining Area for the entire periodduring which Westmoreland conducts Mining Activities in the Mining Area. The parties furtherrecognize that it is to their mutual interest and benefit to maintain Westmoreland’s Tract IIIfacilities area beyond the end of the current projected Tract III production to provide the meansfor future production should market conditions warrant. Therefore, if Westmoreland exercises itsoption to lease hereunder, the Tract III Lease shall be amended to provide that Westmoreland shallhave the option to extend the term of the Tract III Lease beyond production of Coal in payingquantities for a term equal to the term of the Coal Lease by the payment of One Dollar and 0/100cents ($1.00) per acre per year as minimum royalty under the Tract III Lease.
 
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*Confidential materials omitted and filed separately with the SEC. Asterisks denote omissions.*6.3 **Tribal Employment.**The Tribal employment provisions in Article 36 of the Coal Leaseshall also apply to the Tract III Lease effective upon the Tribe’s approval of this Agreement.6.4 **Amendment to Tract III Lease.**The parties will amend the Tract III Lease to reflect theterms of this Section 6.**SECTION 7 PHOTOGRAPHIC SURVEY**As additional consideration for the promises herein, following execution of this ExplorationAgreement and approval by the Secretary, Westmoreland shall actively assist the Crow Tribe in itsplan to obtain and create a photographic survey of the Crow Reservation. Westmoreland will providetechnical advice and support to the Crow Tribe’s project manager. Westmoreland’s staff, time, andavailability will be contingent upon and limited by Westmoreland’s own work load. In addition,Westmoreland will provide One Hundred Twenty-Five Thousand Dollars and 0/100 cents ($125,000.00) tothe Crow Tribe to help fund this project. Said fund shall be available thirty (30) days after thedate upon which final approval of this Exploration Agreement is granted by the Secretary. At theTribe’s option and request at any time thereafter, the remaining balance of the fund shall be paiddirectly to the Tribe.**SECTION 8 SELECTION OF MINING AREA**8.1 **Mining Tract Designation.**On or before the Exercise Date, Westmoreland shall select, fromthe Prospect Area, the Mining Area. Selection of the Mining Area shall not itself constituteexercise of the option, and the Mining Area may be amended by Westmoreland prior to the ExerciseDate.8.2 **Selection Notice.**Westmoreland shall select the Mining Area by delivering to the CrowTribe written notice, in the manner set forth herein, providing the legal description of the tractselected. The mining tract described in the notice shall constitute the Mining Area. The MiningArea shall be identified and by addendum attached to the Coal Lease.**SECTION 9 COAL LEASE**9.1 **Execution and Approval of Lease Form.**The parties will execute and the Crow Tribe willapprove the Coal Lease in the manner provided in Section 5.1 at the same time as this ExplorationAgreement. In addition, the parties shall request that approval of the attached Coal Lease besimultaneous with approval of this Exploration Agreement by the Secretary. The parties agree tocooperate to seek approval of all terms of this Exploration Agreement and Coal Lease by theSecretary as expeditiously as possible. Approval of the Coal Lease is subject to the limitationsin Section 21.6.
 
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*Confidential materials omitted and filed separately with the SEC. Asterisks denote omissions.*9.2 **Effective Date of Lease.**In the event Westmoreland elects to exercise its option tolease, the Coal Lease shall take effect thirty (30) days following Westmoreland’s notice of itselection to lease.9.3 **Limitation of Mining Area.**Notwithstanding any provision in this Exploration Agreementor the Coal Lease, any grant of rights from the Crow Tribe to Westmoreland to use or lease land, orto explore for and/or mine Coal is limited to Tribal Land and Tribal Coal. To the extent there isother land and/or Coal located in the Prospect Area and/or the Mining Area, Westmoreland shall beresponsible for obtaining any necessary right to enter, explore for, and mine Coal on said land orto use and occupy said land, including the acquisition of any necessary surface rights.9.4 **Acreage Under Lease**. Lessee currently leases Coal owned by Lessor outside the boundariesof the Crow Reservation pursuant to the terms of the Tract III lease. Lessee may identify andlease a Mining Area in excess of 2,560 acres, but not more than 3,400 acres, in a single,reasonably compact block. Approval of the Exploration Agreement and Coal Lease shall constituteconsent of the Crow Tribe and approval by the Secretary of the Interior, pursuant to applicable law(including 25 C.F.R. §211.25) of: (a) Lessee holding both the Tract III lease and the Coal Lease;and (b) Lessee leasing more than 2,560 acres, but not more than 3,400 acres under the Coal Lease.**SECTION 10 ACQUISITION OF SURFACE RIGHTS**10.1 The parties recognize that Exploration Rights and Mining Activities will requireacquisition of surface rights and/or payment for use and/or damage to surface owners. The partiesalso recognize that without the ability to conduct Mining Activities in the Mining Area, the CrowTribe will be unable to realize financial returns of significant benefit to the Crow people.10.2 Westmoreland will be solely responsible for the cost of paying surface property ownersfor interests acquired, including grants of ownership, easements, or leases, and for payment of anyloss of use or surface damage incurred.10.3 The Crow Tribe will cooperate and reasonably assist Westmoreland in gaining access to thesurface as required to conduct Mining Activities. The Crow Tribe acknowledges that, according tothe law, custom, and usage of the Crow Tribe, it has the right, particularly within the boundariesof the Crow Reservation, but also elsewhere, to use and disturb the surface and subsurface oflands, including lands owned by others, to explore for and evaluate mineral deposits, to extractminerals owned by the Crow Tribe, and to convey these rights to a mineral lessee, subject only tothe obligation of the Crow Tribe, or the mineral lessee as the case may be, to compensate theproperty owner for any loss of use or damage to the property. The Crow Tribe agrees to fullysupport Westmoreland’s efforts in accord with this principle, to obtain such surface rights as maybe required to conduct Mining Activities under this Exploration Agreement, or to enforce said rightto mine subject to said obligation to reasonably compensate surface owners for loss of use anddamage to property.
 
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*Confidential materials omitted and filed separately with the SEC. Asterisks denote omissions.*10.4 If Westmoreland’s acquisition of surface title within the Crow Reservation wouldotherwise be prevented as a practical matter by the operation of Section 2 of the 1920 CrowAllotment Act, 41 Stat. 751, 752, and initial acquisition of such lands in the name of the CrowTribe would lawfully avoid the impediment, the Tribe agrees to cooperate with Westmoreland bytaking title to (and, as applicable, exchanging) such lands as are necessary for the purposes ofthis Agreement in its name and subject to Westmoreland’s rights to use and possess them or to usethem for exchange purposes pursuant to Sections 16.2 and 16.3. Nothing in this Agreement shallaffect any rights of individual Crow allottees or their heirs or successors arising under Section2.**SECTION 11 FORCE MAJEURE**11.1 **Suspension of Obligations.**In the event of Force Majeure, as defined in this section,the obligations of Westmoreland pursuant to this Exploration Agreement and the documents executedpursuant to this Exploration Agreement, including deadlines for exercising options, shall besuspended, and the term of this Exploration Agreement and all time periods provided for hereinshall be extended during the period of Force Majeure, but for no longer period, except as otherwiseprovided by this Exploration Agreement. However, this provision shall not apply to the settlementwith MMS addressed in Section 4.11.2 **Definition.**The term “Force Majeure”, as used in this Exploration Agreement, means anycause beyond the control of Westmoreland, including, but not limited to: acts of God, labordisputes, insurrections, riots, labor or material shortages, break downs of or damage to equipmentor facilities, interruption of transportation of Coal, (including rail car shortages), embargoes,fires, explosions, floods, litigation of any nature preventing Westmoreland from exercising anyrights outlined in this Exploration Agreement, the elements, casualties not attributable toWestmoreland, an administrative delay in a governmental agency (including Tribal Government), whichis not caused by Westmoreland’s action, newly enacted or mandatory legislation or administrativeregulations or changes in the interpretation thereof, orders of civil or military authority or ofanybody having jurisdiction over the parties, the Prospect Area or the Mining Area, andextraordinary circumstances not attributable to and not reasonably foreseeable by a reasonablyprudent operator, whether such situations affect Westmoreland directly or by reason of their effecton a subsidiary, customer, contractor, shipper, or supplier, which wholly or partly prevent theexercise of the Exploration Rights or the mining or delivery of Coal at a reasonable profit.The examples enumerated above are by way of example, and not limitation. Force Majeure shallnot include any condition arising out of business risks such as fluctuations in prices, sales, orcosts, including costs of compliance with requirements for environmental protection; commonlyexperienced delays in delivery of supplies or equipment; or inability to obtain sufficient sales.11.3 **Mitigation.**Westmoreland shall diligently attempt to remedy, as soon as possible, anyForce Majeure and to mitigate its effects on the implementation of this Exploration Agreement andon the payments due the Crow Tribe hereunder; provided, that nothing contained herein shallrequire the settlement of strikes, lockouts, or other labor difficulties by Westmorelandcontrary to its wishes, and the disposition or manner of handling or remedying any and all suchlabor difficulties is hereby expressly acknowledged to be entirely within the discretion ofWestmoreland.
 
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*Confidential materials omitted and filed separately with the SEC. Asterisks denote omissions.*11.4 **Procedures.**If a period of Force Majeure is incurred, Westmoreland will notify the CrowTribe within thirty (30) days from the beginning of such period of Force Majeure. The notice willinclude descriptions of the circumstances that prevent Westmoreland’s performance andWestmoreland’s plans and efforts to remedy or mitigate the Force Majeure, and an estimate of theexpected duration of the period of Force Majeure. When the period of Force Majeure has ended,Westmoreland will also notify the Crow Tribe. Notice of the commencement of and cessation of ForceMajeure periods will be given to the Crow Tribe in writing in accordance with provision 25.3 ofthis Exploration Agreement. Notice shall also be given to the Regional Director and to the TribalAttorney.**SECTION 12 CROW REPRESENTATIVES****Authorized Representative.**Crow Tribal Chairperson, who is recognized as such by the BIA, orthe said Chairperson’s designee (“Designated Official”), shall be the sole party authorized to dealwith Westmoreland on any matters related to this Exploration Agreement, excluding regulatorymatters and any action taken or authorized by the Tribal Chairperson or the Designated Officialshall be deemed to be action taken or authorized by the Crow Tribe unless the authority of theTribal Chairperson or the Designated Official has been called into question or otherwise beendiminished or withdrawn by a properly adopted Tribal resolution delivered to Westmoreland.Westmoreland may otherwise rely upon the authority of the Tribal Chairperson or the DesignatedOfficial in conducting any transactions, negotiations, or dealings involving the Crow Tribe, to thefull extent of the Chairperson’s powers as head of the Executive Branch of the Crow TribalGovernment as provided in Article IV of the Constitution and Bylaws of the Crow Tribe.**SECTION 13 EMPLOYMENT STANDARDS****Employment Rights**. Tribal employment rights are provided in Article 36 of the Coal Lease.**SECTION 14 ASSIGNMENT**14.1 **Assignment of Rights.**Each right and obligation hereunder shall extend to and bebinding upon, and every benefit hereof shall inure to the heirs, executors, administrators,successors, or assigns of the respective parties.14.2 **Restriction on Assignment.**Westmoreland agrees not to assign this ExplorationAgreement, by an operating agreement or otherwise, not to sublet any portion of the lands underthis Exploration Agreement except with the approval of the Crow Tribe and the Secretary, provided,however, such approval shall not be unreasonably withheld. It is further provided such approvalshall not be required in the event the assignment or sublease is to an Operating Subsidiary ofWestmoreland. Westmoreland shall, however, provide notice of such assignment to the CrowTribe, the Tribal Attorney, and the Regional Director.
 
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*Confidential materials omitted and filed separately with the SEC. Asterisks denote omissions.***SECTION 15 CROW REGULATION**15.1 **Recognition of Tribal Sovereignty.**Westmoreland recognizes the sovereignty of the CrowTribe as established by treaty and recognized by federal law. The parties recognize the CrowTribe, as a sovereign, is concerned with the protection of the health and general welfare of theCrow Tribe and its members, the quality of the environment, the protection, and conservation oftribal resources as well as concerns for the Crow Tribe’s unique cultural interests. The rightsprovided by this Section 15 are in addition to, and do not diminish, the rights provided in Section18.15.2 **Tribal Recognition of Competitive Nature of Mining.**The Crow Tribe recognizes thecompetitive nature of mining and the need for Crow Tribal Coal to be competitive in the marketplacewith other Coal mines located within and without Montana. The Crow Tribe also recognizes the Coalmined from the property covered by this Exploration Agreement will compete with low-costincremental Coal production from existing operations, including non-tribal operations.15.3 **Notification of Increased Government Costs.**The Crow Tribe agrees that while it mayadopt laws or regulations that affect the conduct of Westmoreland’s business and exploration andMining Activities pursuant to this Exploration Agreement, such laws or regulations will not beeffective, as to Westmoreland, until one hundred and twenty (120) days after Westmoreland has beenprovided with a copy of such regulation or law. Westmoreland shall then have the right todetermine whether the law results in any increased governmental costs to Westmoreland. a. **Definition.**For purposes of this Exploration Agreement,“Governmental Costs” shall include all externally imposed costs onWestmoreland, including, but not limited to, costs incurred by an OperatingSubsidiary and other costs associated with Mining Activities (excluding thecosts of Westmoreland’s regular staff required for reporting to the Crow Tribeas a government), whether imposed by the Crow Tribe, the United States, or someother governmental entity. b. Governmental Costs, as used herein, shall not include state,county, local, or tribal taxes, which are addressed elsewhere in thisExploration Agreement.15.4 **Objection Procedure.**If Westmoreland determines the new law or regulation will increaseWestmoreland’s total current Governmental Costs, Westmoreland shall notify the Crow Tribe, inwriting, detailing the basis of Westmoreland’s belief. Westmoreland and the Crow Tribe shallthereafter meet within thirty (30) days after the Crow Tribe’s receipt of Westmoreland’s notice todiscuss the matter. If, after that meeting, Westmoreland maintains its position and the Crow Tribedoes not amend or modify the Tribal Law to remove Westmoreland’s objection, Westmoreland may seekarbitration regarding such law or regulation and its economic impact on Westmoreland.
 
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*Confidential materials omitted and filed separately with the SEC. Asterisks denote omissions.*15.5 **Effect of Arbitrator’s Determination.**If the arbitrators rule that the law does notincrease Westmoreland’s Governmental Costs, then Westmoreland shall comply with such law, unlessotherwise provided for herein, including Section 18. If the arbitrators determine the new law orregulation results in an increase in Governmental Costs, then Westmoreland shall comply with thenew law or regulation but the Crow Tribe shall, at its option, either subsidize the increasedGovernmental Costs through a tribal tax credit or waive the applicability of the new law orregulation to the extent it results in Westmoreland’s Governmental Costs.If the arbitrators have not ruled within the one hundred and twenty (120) day period prior tothe new tribal law or regulation taking effect, Westmoreland will comply with the new law orregulation as provided above until a ruling is made, provided, however, that in the event thearbitrators subsequently rule that the tribal law under review causes the total Governmental Costsof mining Crow Coal to increase, then Westmoreland shall be entitled to recover the difference insuch costs incurred from the end of the one hundred and twenty day (120) period provided for aboveuntil the date the arbitrators’ ruling goes into effect. Such recovery shall be paid by the CrowTribe by giving Westmoreland a deduction in tribal taxes due or to become due from Westmoreland.15.6 **Arbitrators Standard of Review.**In determining whether the tribal law under reviewcauses the Governmental Costs of mining Crow Coal to increase, the arbitrators shall compare theGovernmental Costs applicable to mining under this Exploration Agreement and the Coal Lease priorto enactment to said Governmental Costs after enactment. Such costs shall include, but not belimited to, fees, operating expenses, safety requirements and reclamation costs. In making thiscomparison, the arbitrators shall take into account all relevant factors they consider reasonableand necessary to permit a valid comparison. In addition, the arbitrator may consider any savingsor reduction in Governmental Costs of mining Crow Coal which have resulted from the passage ofother tribal laws, and those savings shall be utilized as offsets in considering the GovernmentalCosts associated with the tribal law under review.15.7 **Prohibition Against Regulatory Takings.**While making no representations as to thequality, quantity, or location of any Coal reserves subject to this Exploration Agreement, the CrowTribe agrees it will take no action which precludes Westmoreland from mining Crow Coal covered bythis Exploration Agreement where such Coal could otherwise be mined under state or federal law, norwill the Crow Tribe enact, as to Westmoreland, any law, ordinance, or regulation which would resultin a regulatory taking of the rights and permits granted to Westmoreland under this ExplorationAgreement. The Crow Tribe further agrees not to unreasonably withhold or delay any licenses,permits, or other concurrences required by Westmoreland pursuant to any law enacted by the CrowTribe.15.8 **Procedure.**Arbitration shall be conducted in accord with Section 26, except asotherwise provided in this section.
 
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*Confidential materials omitted and filed separately with the SEC. Asterisks denote omissions.***SECTION 16 TRIBAL LAND**16.1 **Conveyance of Tribal Land.**Notwithstanding any provision of this Exploration Agreementor the Coal Lease to the contrary, no lease of coal or option to lease by the Crow Tribe providedfor herein, shall be construed by any court or regulatory agency, for any purpose, as a conveyanceof Tribal Land in fee. Any such conveyance shall be considered a conveyance of a possessoryinterest only, and shall in no way be construed to divest the Crow Tribe of its jurisdiction overits land and activities occurring thereon. Except as expressly and unequivocally provided in thisExploration Agreement and Coal Lease (including, without limitation, the limited waivers ofsovereign immunity contained therein), the Crow Tribe retains all attributes of its sovereignty andjurisdiction over the lands encumbered by this Exploration Agreement or any right-of-way grantedhereunder, and over any activities occurring thereon.16.2 **Conveyance of Acquired Property.**Westmoreland recognizes the Crow Tribe’s interest inobtaining title to property it may acquire within the boundaries of the Crow Reservation as part ofits South Extension Project. Westmoreland agrees to convey to the Crow Tribe title to any propertyinterest acquired within the boundary of the Crow Reservation pursuant to the Coal Lease at theconclusion of Mining Activities. Westmoreland shall retain the exclusive and entire right to useand possession of properties within the lease boundaries for the duration of its Mining Activities,including reclamation activities (through final bond release).16.3 **Property Acquired to Trade**. This provision will not prevent Westmoreland from acquiringproperty within the boundaries of the Crow Reservation for the purpose of swapping or trading forother property, to allow Westmoreland to acquire title to surface within the Mining Area. Propertyacquired by Westmoreland for that purpose, and eventually used for that purpose, shall not beconveyed to the Crow Tribe. Further, to facilitate acquisition of property needed for MiningActivities, Westmoreland may encumber any property it acquires within the Crow Reservation or anyproperty acquired by it for or in the name of the Crow Tribe with access road easements in favor ofWestmoreland (for Mining Activities) or private owners as may be needed to arrange land swaps orpurchases, for acquisition by Westmoreland of surface rights needed for Mining Activities.Westmoreland will not increase the number of acres owned on the Crow Reservation in fee bynon-tribal members.**SECTION 17 TRIBAL TAXES**17.1 **Tribal Severance and Gross Proceeds Taxes.**The parties recognize the economicdifficulties that will be encountered in developing a new mine in the proposed Mining Area whichwill be economically competitive in the marketplace, and that taxes on Coal mined hereunder have anegative effect on Westmoreland’s ability to market Tribal Coal and maximize the Crow Tribe’sroyalties and Westmoreland’s profits. The parties further recognize this Exploration Agreement andthe Coal Lease include provisions which will assist in making Crow Coal produced under theExploration Agreement more marketable. Thus, except as otherwise provided in this ExplorationAgreement or the Coal Lease, the parties hereto agree the activities of Westmoreland on the CrowReservation pursuant to this Exploration Agreement shall only be subject to the Crow Tribeseverance tax and gross proceeds tax calculated as provided in the Coal Lease and as furtherlimited by its terms.
 
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*Confidential materials omitted and filed separately with the SEC. Asterisks denote omissions.*17.2 **Exclusion of Additional Taxes.**It is the intent of the Crow Tribe that the taxesprovided for in this section and the Coal Lease shall be in lieu of all other ad valorem real orpersonal property taxes, or other taxes of any kind or character, including sales taxes, resourceindemnity trust taxes, real, personal, or business property taxes, or income taxes the Crow Tribemight otherwise be empowered to levy against Westmoreland.17.3 **Preemption.**It is the intent of the parties that the taxes imposed by the Crow Tribewill preempt all state and local taxes, since it is the finding and conclusion of the partieshereto that any additional or dual taxes will place the Coal produced under this ExplorationAgreement and Coal Lease at a competitive disadvantage in the marketplace, thus frustrating theCrow Tribe’s efforts to market Crow Coal and improve the Crow Reservation’s economy. Inparticular, the parties acknowledge Westmoreland is unwilling to enter into this ExplorationAgreement and Coal Lease without the tax incentives and protections provided herein and in the CoalLease, and that Coal cannot be mined profitably if Westmoreland is required to pay dual state andtribal taxes.**SECTION 18 JURISDICTIONAL DISPUTES**If Westmoreland should, in good faith, question any tribal law or regulation on the basis theCrow Tribe does not have jurisdiction to pass such law, Westmoreland shall, subject to the otherprovisions of this Exploration Agreement, comply with such tribal law or regulation where there isno conflicting federal law, and such compliance shall continue until there is a determination by acourt of competent jurisdiction that the Crow Tribe lacks jurisdiction to enforce such law. Ifthere exists a conflict between the tribal law or regulation and a law or regulation of the UnitedStates or the state of Montana, Westmoreland shall comply with the tribal law unless Westmorelandobtains an opinion of counsel which provides Westmoreland with a good faith basis for believingthat said law or regulation is preempted by conflicting state or federal law and that compliancewith the conflicting state or federal law or regulation is appropriate. In such a situation,Westmoreland need only comply with the conflicting state or federal law or regulation until suchtime as a court of competent jurisdiction determines the state or federal law has no application toWestmoreland. Thereafter, Westmoreland shall, subject to other provisions of this ExplorationAgreement, comply with the applicable tribal law or regulation.**SECTION 19 LIMITED WAIVER OF SOVEREIGN IMMUNITY**The Crow Tribe specifically and unequivocally waives its sovereign immunity from suit andhereby consents to being named as a party in any litigation between Westmoreland, an OperatingSubsidiary and the Crow Tribe involving the construction, execution, interpretation, validity,enforcement, performance, or any dispute arising under this Exploration Agreement and the CoalLease, including any dispute concerning the rights, responsibilities, and obligations of theparties hereto relating to the mining of Crow Coal under this Exploration Agreement and the CoalLease. It is agreed that this waiver of sovereign immunity is limited and extends only toWestmoreland and an Operating Subsidiary and to no other parties, and that the waiver is furtherlimited to only those matters referenced in this provision.
 
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*Confidential materials omitted and filed separately with the SEC. Asterisks denote omissions.*This waiver shall be effective such that both parties shall comply with the bindingarbitration provisions of the Exploration Agreement and Coal Lease and either party may haverecourse to federal court to fully enforce the parties’ agreement to arbitrate and the arbitrationresult pursuant to the Federal Arbitration Act found at 9 U.S.C. § 1, et seq.This waiver of sovereign immunity is based upon the Crow Tribe’s opinion, belief andconsidered finding that the assertion of the Crow Tribe’s sovereign immunity in any disputeinvolving Westmoreland concerning this Exploration Agreement or the Coal Lease would beinappropriate. The parties expressly recognize this waiver shall not extend to or apply to anyclaim which might be brought against the Crow Tribe for punitive damages. Further, the partiesexpressly recognize this waiver shall not permit or authorize the sale or transfer of any propertyheld by the United States in trust for the Crow Tribe. Except for an award of costs and attorneys’fees of or for any arbitration proceedings, the Crow Tribe’s monetary liability resulting from anydispute arising under the referenced agreements and the waiver of sovereign immunity herein islimited to an award against the Tribe of offsets or withholding of future royalties and taxesotherwise payable by Westmoreland to the Crow Tribe, and/or injunctive relief providing forenforcement of Westmoreland’s right to explore, lease, and mine according to the referencedagreements.A true and correct copy of Crow Tribal Legislative Act No. CLB 0402, enacted February 10,2004, and approved February 12, 2004, approving this limited waiver of sovereign immunity as tomatters arising in conjunction with this Exploration Agreement and Coal Lease, is attached heretoas Exhibit “D.”**SECTION 20 AUTHORIZATIONS**20.1 **Crow Tribe Authorizations.**The Crow Tribe warrants the execution of this ExplorationAgreement has been validly authorized by the Crow Tribal Legislature and Executive Branch and thatthe execution by the Chairman of the Crow Tribe has been duly authorized and approved. A certifiedcopy of a validly adopted resolution of the Crow Tribal Legislature approving this ExplorationAgreement and Coal Lease and authorizing its execution by the officers whose signatures are setforth below is attached hereto as Exhibit D.20.2 **Opinion of Tribal Attorney.**The Tribal Attorney has, simultaneously with the executionof this Exploration Agreement, delivered to Westmoreland an opinion that this Exploration Agreementis duly authorized and validly executed by the Crow Tribe in accordance with the TribalConstitution and Bylaws, which opinion is attached hereto as Exhibit E.20.3 **Corporate Existence of Westmoreland.**Westmoreland is a corporation duly incorporated,validly existing, and in good standing under the laws of the state of Delaware, is registered to dobusiness in Montana, and its registration status in Montana is active and in good standing.Westmoreland has full corporate power and authority to execute and deliver this Agreement and toperform its obligations hereunder.
 
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*Confidential materials omitted and filed separately with the SEC. Asterisks denote omissions.*20.4 **Authority.**The execution and delivery by Westmoreland of this Agreement, and theperformance by Westmoreland of its obligations hereunder, have been duly and validly authorized byWestmoreland and no other corporate action on the part of Westmoreland is necessary. Uponexecution by the President of Westmoreland, and delivery by Westmoreland, and upon due execution bythe Crow Tribe, and by governmental approval as provided herein, this Agreement shall be valid andbinding upon Westmoreland and enforceable against Westmoreland in accordance with its terms.20.5 **Opinion of Counsel of Westmoreland.**The legal counsel of Westmoreland hassimultaneously, with the execution of this Exploration Agreement, delivered to the Crow Tribe anopinion that this Exploration Agreement is duly authorized and validly executed by Westmoreland,which opinion is attached hereto as Exhibit F.**SECTION 21 APPROVAL BY SECRETARY AND BY THE TRIBE**21.1 **Approval by Crow Tribe.**The Crow Tribe shall approve this and all attached and relatedexhibits and agreements in the manner provided in Section 5.1.21.2 **Approval by the Secretary.**Approval by the Secretary is required. Westmoreland and theCrow Tribe shall cooperate in seeking prompt approval of this Exploration Agreement and the CoalLease and all other agreements and exhibits attached or incorporated therein. Failure to obtainapproval of the Secretary shall result in cancellation of this Agreement or related agreements asprovided herein. It is understood that after approval by the Crow Tribe, further approval of theMMS Settlement Agreement by the Secretary (including the MMS) shall be independent from theSecretary’s approval of the remainder of the Exploration and Option to Lease Agreement.21.3 **Deadline for Secretarial Approval.**The Secretary shall approve the agreements asprovided in Section 21.2 within six (6) months of the date of the payment of the sum described inSection 5.1. If said approval does not occur within six (6) months, Westmoreland may, at its soleoption, cancel this and all related agreements or extend the time provided for such secretarialapproval. The parties anticipate and request that the separate approvals by the Secretary of theMMS Settlement Agreement (Exhibit C) and the Prospecting Permit referred to in Section 2.3 occur assoon after the Tribe’s approval of this Agreement as is reasonably practical.21.4 **Payments Prior to Secretarial Approval.**The payment described in Section 5.1 shall bemade upon the approval described therein, but shall be refunded as provided therein if theSecretary does not provide approval as provided in this Section 21. The payment described inSection 5.2 shall not be refunded to Westmoreland if the Secretary does not provide approval of theExploration Agreement and Coal Lease, as long as the MMS Settlement Agreement referenced in Section5.2 has been fully approved according to its separate terms.
 
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*Confidential materials omitted and filed separately with the SEC. Asterisks denote omissions.*21.5 **Approval of This and Related Agreements.**Approval of this Exploration Agreement by theSecretary, the Crow Tribe, and Westmoreland constitutes approval of all other agreements andexhibits attached or incorporated herein, specifically including the Coal Lease, andfurther secretarial approval of those agreements shall be unnecessary. It is the finding ofthe Secretary, by the approval of this Exploration Agreement, that such approval is in the bestinterests of the Crow Indian Tribe, and any regulations that are, in any way, inconsistent with therights granted herein, are waived.21.6 **Approval of Agreements Does Not Constitute Permission to Mine.**The Secretary’s approvalof the Exploration Agreement and the Coal Lease do not constitute approval or authorization of anysurface disturbing activities from an environmental perspective. All parties acknowledge thatfuture NEPA (National Environmental Policy Act, 42 U.S.C. § 4321, et seq.) compliance will benecessary for exploration/development, drilling, and mining. it is contemplated that future NEPAcompliance will involve environmental analysis satisfactory to the BIA, BLM, and OSM prior toauthorization and permitting for mining. Therefore, the approval provided by this section does notconstitute issuance or approval of any required exploration, drilling, or mining permit or plan.**SECTION 22 FEDERAL TRUST AND SUPERVISION**22.1 **Federal Trust Responsibilities.**While the mineral interests and certain lands coveredby this Exploration Agreement and the Coal Lease are in trust or restricted status, all ofWestmoreland’s obligations under this Exploration Agreement and the Coal Lease, and the obligationsof its sureties, are to the United States as well as to the Crow Tribe, and all payments to theCrow Tribe provided herein or therein will be made to the Superintendent for the use and benefit ofthe Crow Tribe, and payments shall be made according to applicable federal regulations. Nothingcontained in this Exploration Agreement or the Coal Lease shall operate to delay or prevent atermination of Federal trust responsibilities with respect to the lands covered by this ExplorationAgreement or the Coal Lease; however, such termination shall not serve to abrogate this Mining AreaAgreement or the Coal Lease.22.2 **Relinquishment of Supervision.**Should the Secretary, at any time during the term ofthis Exploration Agreement or the Coal Lease, relinquish supervision as to all or part of the landscovered by this Exploration Agreement or the Coal Lease, the relinquishment shall not bindWestmoreland until it has received from the Secretary thirty (30) days written notice of suchrelinquishment. After notice of relinquishment has been received, this Exploration Agreement andthe Coal Lease are subject to the following further conditions: a. **Payments.**All payments payable after such notice attributableto tribally owned Coal relinquished from supervision shall be paid directly tothe Crow Tribe. b. **Effect on Bonding Requirements.**If at the time supervision isrelinquished by the Secretary as to all the tribally-owned Coal within theMining Area or Facilities Area, Westmoreland has made all payments due underthis Exploration Agreement or the Coal Lease and has fully performed allobligations to be performed up to the time of such relinquishment, then anybond given to secure the performance of this Exploration Agreement or theCoal Lease and on file in the office of the Bureau of Indian Affairs shallbe cancelled and released.
 
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*Confidential materials omitted and filed separately with the SEC. Asterisks denote omissions.*If at the time of any such relinquishment of supervision by the Bureau,Westmoreland has not performed all obligations imposed upon it hereunder orunder the Coal Lease, Westmoreland shall file with the Crow Tribe a bond(“New Bond”) in favor of the Crow Tribe in a principal amount equal to thatimmediately theretofore in force with the Bureau of Indian Affairs andconditioned upon the performance by Westmoreland of those undertakingsprovided for in the bond (“Old Bond”) immediately theretofore in force withthe Bureau. The new Bond shall be continued in force until Westmorelandperforms all obligations secured thereby, provided, however, that such NewBond shall not be required until the Old Bond filed with the Bureau has beenreleased.**SECTION 23 DEFAULT**23.1 **Conditions of Default.**The breach by Westmoreland or the Crow Tribe of any of the termsand conditions of this Exploration Agreement of the Coal Lease shall constitute a defaulthereunder.23.2 **Default Procedures.**If a party believes a default has occurred, it may notify the otherparty in writing of such alleged default, specifying its nature. The parties shall meet withinthirty (30) days to attempt to agree in whether there is such a default and, if so, on anappropriate remedy. If the parties are unable to agree, the complaining party may, within sixty(60) days after giving notice of such default, begin arbitration proceedings as provided for inthis Exploration Agreement. a. **Non-Monetary Default.**If the arbitrator decides that anon-monetary default has occurred, the defaulting party shall have one hundredand eighty (180) days after receipt of the decision finding a default to curesuch default, provided, however, such one hundred and eighty (180) day periodshall be extended to include any period during which the defaulting partyprosecutes with diligence and to completion an attempt to cure suchnon-monetary default, if it cannot be cured within one hundred and eighty (180)days. b. **Monetary Default.**If the arbitrator decides a monetarydefault has occurred, the defaulting party shall have sixty (60) days afterreceipt of the decision finding such a default to cure that default. If suchdefault is not cured as required, the complaining party, in addition to seekingother remedies available at law, may ask the arbitrator to impose penalties orsanctions; provided, any sanction that involves termination of all or part ofthis Exploration Agreement or the Coal Lease because such uncured defaultshall be effective only after a determination by the arbitrators that thedefaulting party has acted willfully in failing to cure the default.
 
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*Confidential materials omitted and filed separately with the SEC. Asterisks denote omissions.*23.3 **Remedies for Westmoreland’s Default.**If default by Westmoreland is not cured asrequired by the arbitrators, the Crow Tribe may request, and the arbitrators may order, atermination of this Exploration Agreement or the Coal Lease as to the Prospect Area or the MiningArea with respect to which the default occurred.23.4 **Remedies of Secretary.**The parties hereto expressly recognize this section does notlimit the options of the Secretary, in the exercise of the Secretary’s trust responsibilities,under this Exploration Agreement.**SECTION 24 TERMINATION****Termination Rights.**At any time prior to the effective date of the Coal Lease as provided inSection 9.2 herein, Westmoreland may terminate this Exploration Agreement. In the event oftermination, any payments made pursuant to Section 5 which are refundable in the event the optionto lease is not exercised, shall be refunded according to the terms of Section 5.**SECTION 25 MISCELLANEOUS**25.1 **Operating Subsidiaries**. Westmoreland may assign any portion of the Exploration Agreementor Coal Lease to an Operating Subsidiary, or sublease any portion of the Coal Lease to an OperatingSubsidiary. Westmoreland guarantees the performance of any Operating Subsidiary to which anyportion of the Exploration Agreement or Coal Lease is assigned or to which any lands coveredtherein are subleased.25.2 **Waiver.**No failure by either party to insist upon the strict performance of the termsor conditions of this Exploration Agreement or to exercise any right or remedy consequent upon thebreach thereof, or to complain of any act or omission by the other party and no acceptance of fullor partial payments during the continuance of such breach constitutes a waiver of any terms orconditions of this Exploration Agreement to be performed or observed by the parties.25.3 **Notices.**Unless otherwise specified, all notices, requests, statements, and otherinformation shall be in writing and delivered to or sent by registered or certified mail, withreturn receipt requested, postage prepaid, to the address of the party as set out below, and shallbe effective upon receipt.If to the Crow Tribe:ChairpersonThe Crow Tribe of IndiansCrow Tribal CouncilCrow Agency, Montana 59022andCrow Tribe Legal DepartmentP.O. Box 340Crow Agency, MT 59022
 
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*Confidential materials omitted and filed separately with the SEC. Asterisks denote omissions.*If to Westmoreland:PresidentWestmoreland Resources, Inc.P.O. Box 449Hardin, MT 59034andGeneral CounselWestmoreland Coal Company2 North Cascade Avenue, Third FloorColorado Springs, CO 80903-1614And if to the Bureau of Indian Affairs:SuperintendentBureau of Indian AffairsCrow AgencyP.O. Box 69Crow Agency, MT 5902225.4 **Applicable Law.**This Exploration Agreement shall be construed in accordance with thelaws of the state of Montana. It is the intention of the parties that this provision shall relateonly to matters of contract construction, and that such provision shall in no way be construed toauthorize the imposition of Montana regulatory law relative to Mining Activities undertaken byWestmoreland within the exterior boundaries of the Crow Reservation.25.5 **Headings.**The captions of sections and underlying provisions in this ExplorationAgreement are for convenience of reference only and are not to be considered a part of the text orto be used to interpret any provision of this Exploration Agreement.25.6 **Invalidity.**If any court shall hold any part of this Exploration Agreement to beinvalid, such holding shall not invalidate any other part of this Exploration Agreement.25.7 **Legal Counsel.**Each party acknowledges it has had the advice and representation oflegal counsel in negotiating and entering into this Exploration Agreement, and the partiesrecognize that each party has been actively involved in drafting such Exploration Agreement.
 
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*Confidential materials omitted and filed separately with the SEC. Asterisks denote omissions.*25.8 **Interest.**Except as otherwise specifically provided, any sums payable under thisExploration Agreement which are not paid when due shall thereafter bear simple interest, from thedate due until paid, at the fixed rate of prime plus two percent (2%).25.9 **Transfer of Lands Subject to This Exploration Agreement.**The Crow Tribe shall retainthe right to sell, trade, transfer, or otherwise convey any surface it owns of the Prospect Area,Mining Area, or Facilities Areas, as the case may be. Any such conveyance shall, however, besubject at all times to the rights acquired by Westmoreland in such lands pursuant to thisExploration Agreement and the Coal Lease.**SECTION 26 ARBITRATION**26.1 **Exclusive Mechanism for Settlement of Disputes.**Except as otherwise provided herein,all disputes as to the application or interpretation of this Exploration Agreement, or the breach,default, termination, or invalidity thereof, shall be settled by arbitration as provided for inthis section. The arbitrators shall not have the authority to add to, delete from, or otherwisechange this Exploration Agreement. The decision of the arbitrators shall be final and binding uponthe parties. The Commercial Arbitration Rules of the American Arbitration Association shall beapplicable, except as modified herein.26.2 **Arbitration Process.** a. **Commencement of Arbitration.**Arbitration shall be commencedby written notice of the existence of a dispute and a demand for arbitration. b. **Selection of Arbitrators.**In the event of arbitration,Westmoreland shall select one arbitrator, the Crow Tribe shall select onearbitrator, and those two arbitrators shall select a mutually satisfactorythird arbitrator. Westmoreland and the Crow Tribe shall select theirrespective arbitrators within thirty (30) days of receipt of the arbitrationdemand. The two arbitrators the parties select shall select a third, orannounce their inability to do so, within thirty (30) days of their selection.In the event the two arbitrators selected by the parties are unable to agree ona third arbitrator, the parties agree that they shall request the federal judgefor the United States Federal District Court for the District of Montana toappoint a third arbitrator from lists provided by the parties. c. **Arbitrator Requirements.**All arbitrators shall be competentand professionally experienced in the technical and/or legal matters in disputein the arbitration. The parties agree that none of the arbitrators shall beenrolled members of the Crow Tribe or employees, advisors, stockholders, orbondholders of Westmoreland or any organization affiliated with Westmoreland.
 
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*Confidential materials omitted and filed separately with the SEC. Asterisks denote omissions.* d. **Schedule.**Within thirty (30) days of selection of the fullpanel of arbitrators, the arbitrators will select a chairperson and hold aconference by telephone with representatives of the parties to calendardiscovery, information or briefing submittal dates, a hearing date, and addresssuch other issues as shall ensure an economical, efficient, and timelyresolution of the dispute. The hearing shall be scheduled no more than onehundred eighty (180) days from the date of this conference. The arbitratorsshall issue their decision no more than thirty (30) days following the hearing. e. **Discovery.**Deposition and written discovery shall bereasonably limited by the arbitrators to achieve economical resolution of thedispute. Except in exceptional circumstances, or by mutual agreement of theparties, two sets of not more than sixty (60) interrogatories and ten (10)document requests and depositions of opposing experts and no more than five (5)fact depositions shall be deemed adequate. f. **Arbitration Hearings and Costs.**Unless mutually agreed,arbitration hearings shall be held in Billings, Montana. At such hearings, theparties may present evidence and may cross-examine the witnesses of the otherparty. After hearing both parties, the arbitrator shall promptly make adecision in writing upon the question or questions submitted and serve a copyof such award upon each party hereto.The cost of arbitration proceedings shall initially be paid by the partyrequesting the arbitration, but if that party prevails in the proceedings,it shall be reimbursed by the other party. Any question of cost shall bedetermined by the arbitrators in the course of their decision and/or award.26.3 **Procedure for Noncompliance.**If either party fails to comply with the arbitrators’decision, the other party shall file and serve a complaint against the party in noncompliance withthe arbitrators’ decision in federal district court to enforce the arbitrator’s decision inaccordance with that court’s rules of procedure.26.4 **Recognition of Secretary’s Authority.**The parties specifically recognize that theSecretary’s authority herein shall not be infringed upon or diminished pursuant to this section.**SECTION 27 SURVIVAL OF CONTRACT PROVISIONS**27.1 **Upon Termination.**Upon termination of this Agreement pursuant to Section 24, or if theAgreement expires without exercise by Westmoreland of its option to lease, the obligations inSection 3.3 and Sections 4 and 5.2 survive; and the provisions of Sections 19 and 26 shall surviveand be applicable to any disputes which may arise with respect to this Agreement.
 
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*Confidential materials omitted and filed separately with the SEC. Asterisks denote omissions.*27.2 **Upon Exercise of Option.**Upon exercise by Westmoreland of its option to lease providedherein, all provisions of this Exploration Agreement applicable to any activities related to theCoal Lease, including all Mining Activities, all efforts to acquire permits, property, surfacerights or easement accesses, licenses, or any other activities necessary or convenient to engage inMining Activities pursuant to the Coal Lease, including, without limitation, the definitions andSections 4 and 10 through 26 survive and apply as provided herein and in the Coal Lease to the CoalLease. Any conflict between the Exploration Agreement and the Coal Lease shall be resolved infavor of the Coal Lease. Further, Section 6 shall survive and amend the Tract III Lease asprovided therein.**IN WITNESS WHEREOF**, the parties have executed this Exploration Agreement on the day and yearfirst above mentioned.      **CROW TRIBE OF INDIANS**