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**ARTICLE 4 DEFINITION OF “MINING RIGHTS”**     “Mining Rights,” as used herein, shall mean all necessary or convenient rights and privilegesincident to the mining, storing, processing, and shipping of Coal under this Coal Lease or any Coalacquired pursuant to Article 15, including, but not limited to, the right to mine, remove,transport, and process Coal in, on, or under the Leased Premises by any method; the right tomarket, sell, and ship coal removed; the right to use Tribal Lands leased hereunder to construct,maintain, and operate roadways, railroads, sidetracks, switches, haul ways, dams, substations,buildings, processing plants, tipples, water drainage courses and conveyors, and any otherimprovements or structures necessary or convenient to accomplish the purpose of this Coal Lease;the right to use and transport water developed by Lessee and any other water made available to theLessee on the Leased Premises; the right to enter in accordance with applicable law upon thesurface of the Leased Premises from time to time with tools, equipment, and machinery for thepurpose of drilling, taking core samples, surveying, mapping, and performing environmentalresearch; the right to pump and discharge water; the right to transport, without further charge,rent, or royalty, over and through the Leased Premises and over and through the Crow Reservationfrom the Leased Premises, personnel, materials, supplies, and Coal, including coal mined from otherproperties now or hereafter leased; the right to make such other use of the Leased Premises asshall be necessary and convenient for the mining, transporting, storage, and processing of Coal,Coal refuse, and by-products; the right to do all things necessary and convenient to satisfy allapplicable legal requirements for environmental protection and reclamation during and after MiningActivities; the right to ingress and egress to the Leased Premises, including the right toconstruct, maintain, and operate access roads, power lines, telephone lines, pipelines, andrailroads to and in the Leased Premises, the right to remove Lessee’s improvements, fixtures, andequipment at the conclusion of mining or reclamation, all without further charge, rent, or royalty,except as otherwise provided in the Exploration Agreement.     Subject to the provisions of Article 17 of this Coal Lease, any rights-of-way across CrowReservation land shall be granted in accordance with applicable federal laws and regulationsgoverning rights-of-way across Indian land.     The parties further agree that any off-lease Mining Rights to be exercised by the Lessee shallbe reasonable and necessary and shall be utilized by Lessee in accordance with all applicablefederal regulations, other than those waived by the Secretary where waiver is found to be in thebest interests of the Lessor and is otherwise appropriate to effectuate the terms and conditions ofthis Coal Lease. The parties further agree that Lessee will take whatever measures it deemsnecessary to obtain whatever additional rights or interests may be necessary for the uses of landsdescribed in this Article from the owner or owners of the surface estate other than the Lessor.The parties understand that the Lessor grants to the Lessee only those rights and interests in thesurface estate within the Leased Premises that it owns or controls and will cooperate with Lesseein Lessee’s efforts to obtain additional surface rights as provided in the Exploration Agreement.**ARTICLE 5 COVENANT OF QUIET ENJOYMENT**     Lessor covenants that the Lessee, upon complying with the terms, conditions, covenants, andagreements hereof, shall have quiet and peaceful possession and enjoyment of the Leased Premisesand the Mining Rights granted herein.
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**ARTICLE 6 TERM**     This Coal Lease is granted for a primary term of ten (10) years from the Effective Date ofthis Coal Lease, and for so long thereafter as the Coal is being produced by Lessee in “PayingQuantities,” but the period for mining shall not exceed twenty-five (25) years from the date of thefirst Coal delivery from the Leased Premises, plus any adjustment for Force Majeure. As used inthis Article, the term “Paying Quantities” means that, by midnight of the last day of the primaryterm of the Exploration Lease, the Lessee has commenced and thereafter continues the primaryremoval of Coal intended for sale and upon which royalties will be paid, subject to the provisionsof Force Majeure contained in Article 31 of this Coal Lease.     No Coal may be mined from the Leased Premises after the end of such twenty-five (25) yearperiod, as extended by Force Majeure. However, after the end of the twenty-five (25) year periodfor mining or, when prior thereto, mining on the Leased Premises otherwise ceases, this Coal Leaseshall continue for as long as is necessary to allow Lessor to conduct activities necessary orappropriate to reclaim the land, salvage equipment, and comply with applicable laws andregulations. Reclamation shall be deemed complete at time of final bond release. If, at the endof twenty-five (25) years, there is mineable Coal remaining within the Leased Premises that wouldbe sterilized, bypassed, or forever forsaken by the termination of mining of Coal by Lessee,adjustments to this termination date may be made by the mutual consent of Lessor and Lessee.**ARTICLE 7 ROYALTY PAYMENTS**     7.1 **Minimum Royalty**. Lessee shall pay, or cause to be paid, a royalty to the Superintendentfor the use and benefit of Lessor, on or before the twenty-fifth (25th) day of each calendar monthduring the term hereof on all Coal mined and shipped from the Leased Premises during the precedingcalendar month. The amount of minimum royalty, hereinafter “Minimum Royalty,” paid shall be anamount per ton equal to 6.5% of the sales price per ton sold and delivered F.O.B. Mine at loadoutinto or onto a Carrier, hereinafter “Sales Price.” The Minimum Royalty of 6.5% may be increased asprovided in provision 7.3 below.     7.2 **Additional Royalty.**Lessee shall pay, or cause to be paid, an additional royalty to theSuperintendent for the use and benefit of Lessor, on or before the twenty-fifth (25th) day of thecalendar month following each calendar quarter during the term hereof on all Coal mined and shippedfrom the Leased Premises during the preceding calendar quarter. The amount of additional royaltyshall be determined as follows: a. Lessee shall determine the Sales Price less Minimum Royalty andany production taxes, hereinafter “Base Price.” The Base Price is determinedusing the formula and methodology set forth in Appendix A attached hereto. Theproduction tax components shown in Appendix A are those currently in effect.If, in the future, taxes levied and payable change, taxes in effect at the timeof sales will be included in the formula and methodology used in determiningBase Price. The amount of additional royalty shall be equal to one-third (1/3)the increase in the Base Price per ton above $5.157 per ton,
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hereinafter “Initial Base Price.” The Initial Base Price was determinedusing the formula and methodology set forth in Appendix A for a Sales Priceof $7.38 per ton. b. The Initial Base Price of $5.157 per ton is effective July 1,2004, and will be adjusted quarterly thereafter on January 1, April 1, July 1,and October 1 during the term hereof, hereinafter the “Adjustment Date.” TheInitial Base Price as adjusted shall be used to determine the additionalroyalty for the quarter preceding the Adjustment Date. The Initial Base Priceshall be adjusted to reflect 85% of any increase in the “GDP-IPD” in accordancewith the definitions, formula, and methodology set forth in Appendix B attachedhereto and effective on the Adjustment Date.  c. After April 1, July 1, October 1, and January 1 each yearduring the term hereof, the Lessee shall determine the Base Price for all Coalmined and shipped on a year-to-date basis during all of the previous quartersfor the calendar year. The additional royalty due for all Coal mined andshipped on a year-to-date basis will then be computed. The additional royaltydue for the previous quarter will then be equal to the total additional royaltyas computed on a year-to-date basis less the additional royalty payments paidfor all quarters during the current year prior to the quarter being paid.Appendix C hereto attached shows an example of the formula and methodology fordetermining the additional royalty payment for a quarter.     7.3 **Royalty Offset**. If the amount of taxes payable to the Crow Tribe is reduced for anyreason (including, but not limited to, a reduction in the Montana tax rates) after this Coal Leasetakes effect, the Minimum Royalty provided in Article 7.1 and payable to the Crow Tribe shall beincreased by an amount necessary to offset the reduction in taxes, so that the total taxes androyalty paid to the Crow Tribe equals the current taxes in existence in 2003, plus the royaltyotherwise payable under this Coal Lease; provided, however, that the maximum royalty rate shallnot exceed 12.5% of the Sales Price; and provided further that if Westmoreland notifies the CrowTribe that the increased royalty will result in serious difficulty in marketing the coal, or lossof sales under current long term coal sales agreements, the Crow Tribe will negotiate in good faithon reducing the amount of increase in the royalty rate. If a tax increase occurs, following a taxreduction and royalty increase per this section, then there will be a commensurate royaltyreduction, so that the total taxes and royalty paid remains as provided in the first sentence ofthis Section 7.3.     7.4 **Royalty Cap and Additional Royalty Adjustment**. Notwithstanding Sections 7.1, 7.2, or7.3, the total royalty paid to Lessor from the mining operations under this Coal Lease shall neverexceed 12.5% of the Sale Price.     7.5 **Measure of Quantity for Royalty Payment.**The quantity of all Coal mined and shipped bythe Lessee shall be determined by railroad or truck scales, belt weightometers, or other meansmutually agreed upon.
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     7.6 **Royalty Payments**. All royalty payments and reports shall be made according to theapplicable federal regulations governing royalty payments for Indian coal. Where the express termsof this Agreement differ from any provisions of the applicable federal regulations, the terms ofthis Agreement shall control. This method of payment shall also apply to the Annual Rental andsurface rental payable pursuant to Articles 9 and 10 of this Coal Lease, and to royalties payableunder the Tract III Lease as provided in section 6.1 of the Exploration Agreement.**ARTICLE 8 TAX**     Lessee shall pay, or cause to be paid, to the Superintendent for the use and benefit ofLessor, a tax on its mining operations as follows:     8.1 **Exploration Agreement**. All tax provisions in the Exploration Agreement, including,without limitation, Sections 15, 17, and 19, shall apply to all mining and Mining Activitiesundertaken pursuant to this Coal Lease.     8.2 **Tax Obligation and Calculation**. On Coal mined and shipped from the Mining Area pursuantto this Coal Lease, Lessee will from time to time pay to the Lessor a tax equal to the Montana coalseverance tax existing at the time the Exploration Agreement is executed and applicable to themining of Coal generally within the state of Montana and a tax equal to the Montana state grossproceeds tax existing at that time and applicable to the mining of Coal generally within the state,less whatever amount is required to be paid in severance and gross proceeds taxes to the state ofMontana or its political subdivisions. The tax shall be levied on the Sales Prices of Coal asdefined in Section 7.1, less any applicable deductions.          Compliance with the terms of this Coal Lease shall satisfy any obligation which Lessee mayhave now, or at any time hereafter, to pay any severance or other tax to Lessor pursuant to any taxordinance which now exists or may be adopted by Lessor hereafter. Lessor shall not attempt toassess or collect any tax or other amount from Lessee except as provided for in this Coal Lease orthe Exploration Agreement.          Nothing in this Lease is to be construed as an admission that Montana has any right to taxcoal on the Crow Reservation. In the event the Crow Tribe litigates this issue, Lessee willcooperate reasonably to provide information to the Lessor.     8.3 **Maximum Tax**. The amount of tax payable to Lessor under provision 8.2 will not exceed theamount that otherwise would be payable by a Coal operator on non-tribal lands to Montana or itspolitical subdivisions, giving effect to all allowable deductions and credits, if Lessor’sactivities were fully taxable by Montana or its political subdivisions.     8.4 **Reporting and Payment**. Lessee shall provide to the Lessor all of the information thatLessee may be, or otherwise would be, required to provide to the state of Montana or its politicalsubdivisions in satisfaction of the requirements of Montana’s severance tax law and gross proceedstax law at the same time that such information is, or otherwise would be, provided to the state ofMontana or to its political subdivisions. Lessee shall pay any amounts due to the Lessor underthis Article, and provide an accounting of, and explanation for, said amounts, at the same time
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that Montana’s severance and gross proceeds taxes are being, or otherwise would be, paid. Theconfidentiality provisions of Article 18 shall apply equally to this Article. All tax paymentsshall be made according to the applicable federal regulations governing royalty payments for Indiancoal. Where the express terms of this Agreement differ from any provisions of the applicablefederal regulations, the terms of this Agreement shall control.     8.5 **Changes in Rate of Tax.**a. **Tax Reduction.**In the event that either the Montana state severance tax or gross proceeds taxshould be repealed or reduced below its current level, then amounts paid by Lessee under Section8.2 shall be reduced accordingly. Further, an adjustment to royalty will be made in accord withArticle 7. In addition, the parties shall have the rights provided herein below: (1) Lessor may require Lessee to negotiate withLessor on the amount of severance and/or gross proceeds taxes, if any,which Lessee will pay to the Lessor by giving Lessee notice of anintent to renegotiate this provision with respect to a severance taxand/or gross proceeds tax within ninety (90) days (unless otherwiseagreed) after the effective date of the act of the Montana legislatureor after action of any Montana political subdivision effecting suchreduction.  (2) Unless otherwise agreed, negotiations shallcommence within thirty (30) days after Lessee’s receipt of the Lessor’snotice of intent to renegotiate.  (3) Lessee’s obligation to pay a severance and/or agross proceeds tax to Lessor under this Coal Lease shall be suspendedduring the period of renegotiation from the last day of the month inwhich the intent to renegotiate is received by Lessor. If tax ratesare established by agreement as a result of renegotiation, then Lesseeshall pay Lessor a tax or taxes based on those rates retroactive to thetime of suspension of payment under this Coal Lease.b. **Procedure for Renegotiation Impasse**. In the event Lessor and Lessee are unable to reach anagreement on the amount of taxes to be paid to the Lessor within sixty (60) days of thecommencement of negotiations provided for in 8.5a.(1) (excluding time required to seek approval ofany such agreement at the next meeting of Lessor’s Tribal Legislature), then, unless otherwiseagreed, either Lessor or Lessee may resolve the issue of the proper amount of taxes payable byLessee to Lessor under this Coal Lease through binding arbitration. The arbitration procedureshall be that provided in the Exploration Agreement at Section 26. The arbitrators shall be askedto arrive at a reasonable rate of severance and gross proceeds tax which, when combined with theroyalty received by the Crow Tribe, accomplishes the following goals: provision to Westmoreland ofa reasonable profit and rate of return on its investment, when compared with similar (includingnon-tribal) mining operations located within Lessee’s market area; whileproviding a reasonable return to the Crow Tribe from the mining of its mineral assets in the formof royalty and severance and gross proceeds taxes.
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**ARTICLE 9 ANNUAL RENTAL**     Lessee shall pay, or cause to be paid, for the use and benefit of Lessor, in advance,beginning with the date of approval of this Coal Lease by the Secretary, as annual rental, OneDollar and 0/100 ($1.00) per acre for the first lease year, and subsequently One Dollar and 0/100($1.00) per acre per year, payable in advance on or before the first day of each lease year, foreach and every year during the continuance of this Coal Lease. The rent is not to be credited onroyalties accruing to Lessor under this Coal Lease. If this Coal Lease is surrendered orcancelled, no part of any advance rental shall be refunded to Lessee, nor shall the surrender orcancellation relieve Lessee from the obligation to pay the advance rental when it becomes due, onany portion of the Lease that is retained.**ARTICLE 10 SURFACE LEASE**     Lessee shall pay a separate surface rental on all surface property owned by Lessee within theMining Area of one dollar and 0/100 cents ($1.00) per acre per year.**ARTICLE 11 PREVENTION OF WASTE**     Lessee shall carry on development and operations in a workmanlike manner and agrees to thefollowing: to neither commit nor suffer waste to be committed upon the land leased; to complywith applicable laws of the United States; and to surrender and return promptly the premises uponthe termination of this Coal Lease to whoever is lawfully entitled thereto. If Lessee is incompliance with applicable federal laws and regulations and mining in accord with approved miningplans and permits, including the Resource Recovery and Protection Plan, it shall be deemed to be infull compliance with its obligation to prevent waste and to mine in a workmanlike manner.     If the payments agreed upon in this Coal Lease have been made and the other lease terms andapplicable regulations have been complied with, the office fixtures and records, personal property,tools, pumping and drilling equipment, boilers, engines and mining machinery, facilities andequipment, and all other personal property and improvements on the leased land (except the Lessor’sproperty) may be removed by the Lessee as soon as practicable after the Coal Lease expires byforfeiture or otherwise.**ARTICLE 12 FORESTS, CROPS, AND GRAZING**     The Lessor agrees that with respect to any surface property rights acquired by Lessee in theLeased Land, or acquired by Lessee for Lessor as provided in Article 15, Lessee may remove anytimber, crop, or improvements to the extent convenient for Mining Activities without compensationfor same to Lessor.     With respect to any surface owned by the Tribe and under lease pursuant to this Agreement,Lessee will reasonably compensate the Tribe for any forest, crops, or grazing damage or removal inthe year it occurs, and for any diminution in value due to mining assessed as of thecompletion of final reclamation (i.e., final bond release).
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**ARTICLE 13 ENVIRONMENTAL PROTECTION AND SURFACE RESTORATION**     Lessee’s mining operations shall be conducted in accord with all applicable federal lawsregarding protection of the environment, reclamation, and restoration of mined areas.Westmoreland’s compliance with said laws shall constitute full compliance with any obligationWestmoreland has to the Crow Tribe concerning pollution, pollution control or abatement,environmental protection, control or abatement, mining procedures, reclamation, reclamationprocedures, results, mining plans, protection of persons or property, and any other issue addressedby said laws or regulations. The parties recognize the Crow Tribe’s legal position that the Stateof Montana lacks jurisdiction to regulate Westmoreland’s activities under this Agreement that occuron or affect lands within the exterior boundaries of the diminished Reservation (which include allof the Prospect Area and Mining Area), while the State asserts jurisdiction to regulateWestmoreland’s activities outside the boundaries of the diminished Reservation (includingWestmoreland’s existing mining operations on Tract III within the “ceded strip”).     The Lessee shall comply with all applicable requirements of the law, including the SurfaceMining Control and Reclamations Act of 1977, and all regulations promulgated thereunder, includingthose codified at 30 CFR part 750.     Lessee recognizes that the Crow Tribe may seek and be granted legal authority pursuant tofederal law (including future acts of Congress) to operate and administer certain environmentalregulatory programs within the Crow Indian Reservation that would otherwise be operated oradministered by federal agencies, including, but not limited to, SMCRA and the Clean Water Act.Lessee will not take any actions opposing the Tribe’s efforts to obtain such authority. If at anytime in the future the Crow Tribe gains the legal right and ability to regulate those activitiesdescribed above in this Article 13, and desires to establish and undertake such regulation, Lesseeagrees to negotiate in good faith to amend this Agreement to allow such regulation of itsactivities upon such terms as shall guarantee: (a) no net increase in Lessee’s costs; (b) noduplication, overlap, inconsistency, or conflict with, between, or among competing laws andregulations issued and applied by any other government with the right and power to impose suchregulation; and (c) Lessee shall not be subjected to inspection, regulation, and enforcement bymore than one governmental entity.**ARTICLE 14 USE OF LANDS OUTSIDE THE LEASED PREMISES**     Subject to Article 4 of this Coal Lease, Lessee shall be entitled to make use of tribalsurface lands lying outside the Leased Premises reasonably required for Mining Activities on theLeased Premises, including, but not limited to, the construction, operation, and maintenance ofroads, power lines, railroads, conveyors, and any road easements required for landowner access.Lessee shall, to the extent deemed by it to be reasonably feasible and prudent, utilize such landsin a manner which will minimally impact the Lessor’s use of such lands, including mining operationsconducted by others.     Lessee shall at all times be required to comply with the federal laws and regulationsgoverning rights-of-way across Indian lands, unless waived in accordance with Article 4 of thisCoal Lease. Notwithstanding any provision of this Coal Lease or the Exploration Agreement, anyrights-
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of-way across tribal land shall be granted by the Crow Tribe without further charge orcompensation, in consideration of the payments made to the Lessor under this Coal Lease and theExploration Agreement. However, if the Secretary or the Lessor should ever require the Lessee topay compensation for any right-of-way across tribal land, then there is hereby granted to theLessee a credit, against any tribal taxes due hereunder, equal to the amount of any compensationLessee is required to pay.**ARTICLE 15 ACQUISITION OF NON-TRIBAL COAL AND SURFACE RIGHTS BY LESSEE**     15.1 **Acquisition**. When requested by Lessee, Lessor shall assist Lessee in acquiring therights to utilize whatever surface land or interests in lands within the Crow Reservation Lesseedeems necessary or convenient for Mining Activities.     15.2 **Transfer of Surface Rights to Lessor.** a. Lessee may acquire and maintain ownership of surface landswithin the Crow Reservation owned by persons or entities other than the CrowTribe to the maximum extent possible while remaining in compliance with thelimitations on land ownership contained in any relevant and applicable federallaw. Any surface lands within the Crow Reservation necessary or convenient forMining Activities in excess of permissible acreage limitations may first beacquired by Lessor, and leased back to the Lessee at the surface rental ratesspecified in this Coal Lease.    If Lessor declines to acquire such lands, then such lands may be acquired byLessee for Lessor, such acquisition to be evidenced by an appropriate deedin Lessor’s name. Lessor shall then execute and deliver a lease of saidlands back to Lessee which grants Lessee all rights to use provided in thisCoal Lease and the Exploration Agreement, without cost, (except as otherwiseprovided for in this Coal Lease or the Exploration Agreement) any and all ofthe land and any water rights associated with such land for MiningActivities until the Mining Activities on that land have been completed, andall uses by Lessee for any purposes connected with mining or reclamationcease. The term of said lease shall run concurrently with the term of thisCoal Lease. Lessee shall provide Lessor with copies of any data,information or materials in its possession relative to title to the landsconveyed.  b. The mechanism provided in this Article for the acquisition ofsurface rights may also be used by Lessee to acquire surface lands within theCrow Reservation which are outside the Mining Area for the purpose ofexchanging said lands for lands within the Mining Area.  c. With respect to any surface lands acquired and owned by Lesseepursuant to provision 15.2.a. of this Coal Lease, Lessee shall, at the end ofthe term of this Coal Lease, convey the same to the Crow Tribe. However, thisprovision
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   will not prevent Westmoreland from acquiring property within theboundaries of the Crow Reservation for the purpose of swapping or trading forother property in order to allow Westmoreland to acquire title to surfacewithin the Mining Area. Property acquired by Westmoreland for that purpose,and eventually used for that purpose, shall not be conveyed to the Crow Tribe.Further, to facilitate acquisition of property needed for Mining Activities,Westmoreland may encumber any property it acquires within the Crow Reservationor any property acquired by it for or in the name of the Crow Tribe with accessroad easements in favor of Westmoreland (for Mining Activities) or privateowners as may be needed to arrange land swaps or purchases, for acquisition byWestmoreland of surface rights needed for Mining Activities.  d. Lessee reserves the right to burden any property acquired andconveyed pursuant to this Article with easements for road access in favor ofLessee or private landowners (to the extent required to obtain surface rightsneeded for Mining Rights).**ARTICLE 16 TRANSFER OF LANDS BY LESSOR**     The Lessor shall retain the right to sell, lease, trade, transfer, or otherwise convey any ofthe lands covered by this Coal Lease, including the Perimeter Area lands. Any such conveyanceshall, however, be subject at all times to the rights of Lessee provided in this Coal Lease and theExploration Agreement, including Article 23 of this Coal Lease.**ARTICLE 17 MINE OPERATIONS–ROADS AND WATER**     17.1 **Existing Roads**. To the extent it may do so, the Lessor grants to Lessee the right to useany existing public roads on the Crow Reservation and the right to improve such roads. Subject tothe provisions of Article 4 of this Coal Lease and compliance with applicable laws and regulationsgoverning rights-of-way across Indian lands, Lessor shall also grant to Lessee the right toconstruct, maintain, and use new roads within the Crow Reservation to facilitate activitiescontemplated by this Coal Lease.          Before Lessee paves or improves any existing road, or constructs a new road which provides alink to an existing road providing access beyond the Leased Premises, the Lessor shall be notifiedof the plan for such road. The location and construction of any new roads shall require theconsent of the Lessor and Secretary pursuant to applicable federal law, provided that the Lessor’sconsent may not be unreasonably withheld.          Lessee will not dedicate any road constructed by it within the Leased Premises for public useand such roads will be marked with signs indicating that they are only for private useunless Lessor determines that such road is needed as a public road, subject, however, to theconsent of Lessee.
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          Upon expiration of this Coal Lease, or at such times as the roads constructed on the LeasedPremises are no longer needed by Lessee for the activities contemplated under this Coal Lease, therights granted by Lessor to Lessee to use such roads shall cease. Such roads shall then vestsolely in the Lessor or surface owner, which shall assume all further responsibility for the upkeepand maintenance of such roads, to the maximum extent allowed by law.     17.2 **Water**. The Lessor grants to Lessee the right to use any tribal water rights Lessor mayhave appurtenant to the Leased Premises for Mining Activities. Lessee may use surface orsubsurface water for Mining Activities, regardless of the manner of its occurrence, includinggroundwater and pit water; except that any water and/or wastewater disposal shall be in compliancewith applicable laws and regulations. Lessee may drill at its expense any necessary water wells onland covered hereby; provided such well shall not affect the quality or quantity of water beingused for domestic, livestock, irrigation, or other existing tribal purposes, and further providedthat Lessee obtain any Crow Tribal permits required for water well drilling on the CrowReservation.**ARTICLE 18 MONTHLY STATEMENTS**     Lessee shall keep an accurate record of mining operations, showing for each month the totalsales and amounts of Coal mined and sold. Lessee shall furnish the Superintendent and Crow TribalMineral Office monthly reports of these matters before the twenty-fifth (25th) day ofthe succeeding month.     An audit of Lessee’s accounts and books shall be made annually or at any time directed by theSuperintendent, by a certified public accountant approved by the Secretary or the Secretary’sauthorized representative and at the expense of Lessee. Lessee shall furnish, through theSuperintendent, a free copy of the audit to the Secretary or the Secretary’s authorizedrepresentative and Crow Tribal Mineral office promptly after the completion of each audit.     Lessor acknowledges that much of the information described in this Article is trade secretinformation of potential benefit and use to Lessee’s business competitors and, therefore, agrees tokeep all information strictly confidential to the maximum extent allowed by law.**ARTICLE 19 REGULATIONS**     Lessee shall abide by and conform to any and all legal and enforceable regulations of theSecretary now or in the future in force relative to the Coal Lease. Neither the rate of royalty,nor the annual rental, nor the term of the Coal Lease may be changed by a future regulation withoutthe consent of the parties to this Coal Lease.**ARTICLE 20 ASSIGNMENT OF LEASE**     Lessee shall not assign this Coal Lease or sublet any portion of the Leased Premises, exceptwith the approval of the Secretary. Notwithstanding this limitation, Westmoreland may assign to anOperating Subsidiary without the approval of the Crow Tribe or the Secretary as provided in 25.1 ofthe Exploration Agreement.
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**ARTICLE 21 BOND**     Lessee agrees to furnish such bonds as may be required by law to conduct Mining Activitiesunder this Coal Lease.**ARTICLE 22 INSPECTION**     The Leased Premises, producing operations, and appurtenances of the Lessee may be inspected bythe Lessor and its agents or any authorized representative of the Secretary.**ARTICLE 23 DISPOSITION OF OTHER RESOURCES**     Lessor, along with the United States, retains the right to grant to other persons, firms, orcorporations oil and gas leases (including methane gas), mineral leases (other than coal) orlicenses, or exploration rights for oil, gas or other minerals (other than coal) or rights-of-wayincident thereto, on the Mining Areas and Facilities Area, all of which will be made subordinateand subject to Lessee’s rights specifically granted herein. Such oil, gas, and minerals activities(other than coal) may be carried out concurrently with Mining Activities hereunder; provided,however, that such operations shall not interfere in any way with Mining Activities hereunder andno permanent fixture will be placed on, and no mining or drilling activity undertaken in, an activeor planned Mining Area without Lessee’s prior written approval. Any coal bed methane leasesgranted by Lessor covering lands covered by this Coal Lease shall provide that any attempts todrill for coal bed methane on the acres leased must be done in a manner that will not interfere inany way with Lessee’s operation, present or future, or sterilize any coal reserves.**ARTICLE 24 SURRENDER AND TERMINATION**     Lessee may at any time terminate this Coal Lease or any part thereof upon the payment of allrentals, royalties, and other obligations then due to the Lessor and a surrender fee of FiveDollars and 0/100 ($5.00) and upon written notice being given sixty (60) days in advance to theLessor through the Crow Tribal Government and the Secretary. This Coal Lease shall continue infull force and effect as to the lands not so surrendered. If this Coal Lease or any assignmentthereof has been recorded, the Lessee or assignee shall file a recorded release and provide noticeto the Superintendent of termination of this or any portion of this Coal Lease.**ARTICLE 25 RELINQUISHMENT OF SUPERVISION BY SECRETARY OF INTERIOR**     Should the Secretary of Interior, at any time during the term of this instrument, relinquishsupervision as to all or part of the acreage covered, the relinquishment shall not bind Lesseeuntil the Secretary has given Lessee thirty (30) days written notice. Until these requirements arefulfilled, Lessee shall continue to make all royalty and rental payments due under this Coal Lease.     After notice of relinquishment has been received by Lessee, this Coal Lease shall be subjectto the following further conditions:
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     25.1 All rentals and royalties accruing shall be paid directly to Lessor or its successors intitle; and     25.2 If, at the time supervision is relinquished by the Secretary as to all lands under thisCoal Lease, Lessee has made all payments due and has fully performed all obligations on its part tobe performed up to the time of the relinquishment, any bond given to the Secretary to secureperformance of the Coal Lease shall be released to Lessee.**ARTICLE 26 INSURANCE, SOCIAL SECURITY, AND TAXES**     Lessee agrees to carry such insurance covering all persons working in, on, or in connectionwith the Leased Premises for the Lessee as will fully comply with the provisions of the statutes ofthe state of Montana covering worker’s compensation and occupational disease, as are now in forceor as may be amended. Further, the Lessee agrees to comply with all the terms and provisions ofall applicable laws of the state of Montana and of the United States of America as now exist or asmay be amended, pertaining to Social Security, unemployment compensation, wages, hours andconditions of labor; and to indemnify and hold the Lessor and the United States harmless frompayment of any damages occasioned by the Lessee’s failure to comply with these laws.**ARTICLE 27 HEIRS AND SUCCESSORS IN INTEREST**     Lessor and Lessee agree each obligation under this Coal Lease shall extend to and be bindingon, and every benefit shall inure to, the heirs, executors, administrators, successors of, orassigns of the parties to this Coal Lease.**ARTICLE 28 GOVERNMENT EMPLOYEES NOT TO ACQUIRE LEASE**     No lease, its assignment, or interest in the same will be approved to any employee oremployees of the United States Government, whether connected with the Bureau of Indian Affairs orotherwise. No employee of the United States Department of the Interior shall be permitted toacquire any interest in the leases by ownership of stock in corporations having leases or in anyother manner.**ARTICLE 29 DEFAULT**     Any defaults hereunder by either party shall be handled in accord with Section 23 of theExploration Agreement.
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**ARTICLE 30 PRESERVATION OF ANTIQUITIES**     Lessee shall obtain necessary archeological clearances in accordance with the Antiquities Actof 1906, the Archaeological Resources Protection Act of 1979, and other applicable laws before thestart of any mining. When directed by the Lessor or the Secretary, Lessee shall obtain, at its ownexpense, a qualified archaeologist to examine and, if necessary, excavate or gather any ruins orother objects of historical or cultural significance located on the Leased Premises. Such actionswill be conducted after consultation with Lessor, the Bureau of Indian Affairs, and the AdvisoryCouncil on Historic Preservation. Any objects that are excavated or gathered shall be turned overto the Lessor or the appropriate federal agency.**ARTICLE 31 FORCE MAJEURE**     If, because of Force Majeure, the Lessee is reasonably prevented from performing any of itsobligations under this Coal Lease or satisfying any of the conditions of this Coal Lease, includingthose obligations and conditions, which if unfulfilled, may limit the term of the Coal Lease, thensuch obligations and conditions shall be reduced, and any time or date (including those on the termof this Coal Lease if production of coal in paying quantities is interrupted by such ForceMajeure), shall be extended or reduced to the extent the Lessee is so prevented. As used herein,“Force Majeure” shall have the meaning provided at Section 11 of the Exploration Agreement and themitigation and notification procedures provided therein shall apply.**ARTICLE 32 ARBITRATION**     Except as otherwise provided herein, any disputes arising under this Coal Lease or theExploration Agreement, and any claims of breach, default, invalidity, or termination, orapplication or interpretation hereunder, and any other disputes arising hereunder, shall be settledby binding arbitration. The arbitration provisions of Section 26 of the Exploration Agreementshall apply.**ARTICLE 33 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 disputes arising under this Coal Lease and the ExplorationAgreement, including any dispute concerning the rights, responsibilities, and obligations of theparties hereto relating to the mining of Crow Coal under this Coal Lease and the ExplorationAgreement. 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.     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 tofederal court to fully enforce the parties’ agreement to arbitrate and the arbitration resultpursuant to the Federal Arbitration Act found at 9 U.S.C. § 1, et seq.
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     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.”**ARTICLE 34 OBLIGATIONS**     While the Leased Premises are in trust or restricted status, all of the Lessee’s obligationsunder this Coal Lease and the obligations of its sureties are to the United States as well as tothe owners of the Leased Premises.**ARTICLE 35 MISCELLANEOUS**     35.1 **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 Lessor:         Chairperson    Crow Tribal Council    Crow Agency, Montana 59022       and           Crow Tribe Legal Department    P.O. Box 340    Crow Agency, MT 59022       If to Lessee:         President
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         Westmoreland Resources, Inc.    P.O. Box 449    Hardin, MT 59034         and         General Counsel    Westmoreland Coal Company    2 North Cascade Avenue, Third Floor    Colorado Springs, CO 80903-1614       If to Regional Director:         Regional Director    Billings Area Office    Bureau of Indian Affairs    316 North 26th Street    Billings, Montana 59101       And if to the Superintendent:         Superintendent    Bureau of Indian Affairs    Crow Indian Agency    P.O. Box 69    Crow Agency, Montana 59022or to such other address or individual as the Lessor or Lessee may otherwise specify.     35.2 **Applicable Law.**This Coal Lease shall be construed in accordance with the laws of thestate of Montana. It is the intention of the parties that this provision shall relate only tomatters of contract construction, and that such provision shall in no way be construed to authorizethe imposition of Montana regulatory law relative to Mining Activities undertaken by Lessee withinthe exterior boundaries of the Crow Reservation.     35.3 **Headings.**The captions of Articles and underlying provisions are for convenience ofreference and are not to be considered a part of the text or to be used to interpret any provisionof this Coal Lease.     35.4 **Invalidity.**If any court shall hold any part of this Coal Lease to be invalid, suchholding shall not invalidate any other part of this Coal Lease.     35.5 **Other Tribal Coal Leases.**In the event Lessor enters into a coal lease or other coaldevelopment lease with someone other than Lessee on lands in the vicinity of the Mining Areasidentified herein, Lessee agrees that it will not unreasonably interfere with the operations ofsuch lessee. Lessor agrees that if it should enter into a coal lease or other coal developmentlease on lands
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in the vicinity of the Mining Areas identified herein, Lessor shall provide in suchlease or other lease that the lessee thereunder shall conduct its operations so as not tounreasonably interfere with Lessee’s Mining Activities.     35.6 **Interest.**All royalties, taxes, rentals, and any other sums payable under this CoalLease which are not paid when due shall thereafter bear simple interest, from the date due untilpaid, at the fixed rate of prime plus two percent (2%), with the rate fixed according to the primerate of interest in effect on the due date of the payment.**ARTICLE 36 TRIBAL EMPLOYMENT**     Lessee shall give a priority right of employment to members of the Crow Tribe for allpositions for which they are qualified and available and shall pay the prevailing wage rates forsimilar services in the area. Upon initial hiring and whenever thereafter a job opening occurs,Lessee, its contractors or subcontractors, shall give notice of such opening to the Crow Tribestating the time and place where job applications will be accepted. Except in cases of emergency,no nonmember of the Tribe shall be hired for any job until at least forty-eight (48) hours (notincluding Saturdays and Sundays) following the delivery of such notice to the Crow Tribe. In orderto supplement and reinforce the above employment standards, which have governed Westmoreland’sTribal employment obligations since the inception of the Tract III Lease, Lessee agrees to usereasonable good faith efforts to: a. Expand Tribal employment when job openings occur for whichthere are qualified and available Tribal members in supervisory, management,and staff positions within WRI and its mining contractor, and provide trainingand promotional opportunities to qualified Crow Tribal members at least equalto those opportunities provided to other members of WRI’s and its contractor’sprofessional staffs;  b. Expand employment of Crow Tribal members by subcontractors whenjob openings occur for which there are qualified and available Tribal membersand periodically provide advance planning notice of typical anticipatedsubcontracting needs (including emergency services) to the Tribe’s TERO office;  c. Encourage the purchase of materials and services by WRI and itsmining contractor from Crow-owned businesses when qualified and competitive,and periodically provide advance planning notice of typical anticipatedpurchasing needs to the Tribe’s TERO office.     Lessee further agrees to follow the foregoing Tribal employment provisions on the Tract IIILease effective immediately upon the parties’ execution of the Exploration Agreement.     The terms of this paragraph may be amended by subsequent agreement of the parties to thisLease. Compliance with this provision shall be deemed full compliance with any Crow Tribal law orregulation related to employment of Tribal members, except that Lessee take no position with
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respect to Tribal regulation of union membership or dues requirements for Tribal members working onthe Reservation.**ARTICLE 37 SALE OF COAL WITHIN FIFTY MILES**     Lessee will not sell coal mined from the Leased Premises for use in a coal conversion ormine-mouth generating facility to be located on the Crow Indian Reservation or within fifty (50)miles of the exterior boundaries of the diminished Crow Indian Reservation without first receivingapproval of such sale from the Lessor.**ARTICLE 38 THE MINE-MOUTH GENERATING FACILITY**     It is the intention of Westmoreland and the Crow Tribe to continue exploring the possibilityand feasibility, on mutually agreeable terms, of constructing and operating a coal-fired generatingfacility on or near the Crow Indian Reservation using coal mined by Westmoreland from the MiningArea and/or the Tract III lease area. The terms of this Lease are not intended to apply to Crowcoal produced to supply such a facility. Without affecting the terms of this Lease, the Crow Tribereserves the right and authority to grant tax and royalty concessions of any type for any Crow coalproduced to supply a coal conversion or electric generating facility in which the Crow Tribe orother Tribally-owned entity has an equity interest.**ARTICLE 39 USE OF FACILITIES AREA**     In addition to the Leased Premises, Lessee shall use the area lying north of the LeasedPremises and currently within the boundaries of the Tract III Lease existing between the Lessor andLessee dated November 26, 1974, for location of mining facilities. The Facilities Area shall beused for any hauling, processing, storing, weighing, loading, and any other Mining Activitiesrelated to the production of Coal.     To provide for the use of said area, and notwithstanding any other agreements between theparties, Lessor and Lessee agree that any obligations Lessee may have under that agreement entitled“Land Purchase Option Agreement” dated November 26, 1974, to offer to sell any lands to the CrowTribe shall abate and be suspended until the completion of any and all mining or reclamationactivities in connection with or occurring pursuant to this Coal Lease.**ARTICLE 40 WAIVER**     No failure by either party to insist upon the strict performance of the terms of conditions ofthis Coal Lease or to exercise any right or remedy consequent upon the breach thereof, or tocomplain of any act or omission by the other party and no acceptance of full or partial paymentsduring the continuance of such breach constitutes a waiver of any terms or conditions of this CoalLease to be performed or observed by the parties.**ARTICLE 41 MEMORANDUM OF LEASE**
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     Lessor or Lessee intend to execute a Memorandum of Lease for purposes of recordation in thecounty wherein the Leased Premises are located. In the event of any inconsistency between theMemorandum of Lease and the terms hereof, the terms hereof shall govern.**ARTICLE 42 APPROVAL BY SECRETARY**     The parties’ obligations hereunder are contingent upon the approval of this Coal Lease by theSecretary which shall occur pursuant to Section 21 of the Exploration Agreement. Approval of thisCoal Lease by the Secretary constitutes approval of the exhibits attached hereto and all otheragreements or exhibits incorporated herein. Further, by the approval of this Coal Lease, it is thefinding of the Secretary that this Coal Lease and the attached exhibits are in the best interest ofthe Crow Tribe, and any regulations that are, in any way, inconsistent with the rights grantedherein, are waived. The Secretary’s approval of this Lease is expressly limited by Section 21.6 ofthe Exploration Agreement.
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     **IN WITNESS WHEREOF**, the parties have executed this Coal Lease Agreement on the day and yearfirst mentioned.         **CROW TRIBE OF INDIANS**           By:                   Chairman           **WESTMORELAND RESOURCES, INC.**           By:                    Its:              **APPROVED:**      Secretary of Interior      
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