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FRa'1 ~ FqX N0. : filar. 16 1498 89:31Pt1 P2
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<br />Y~ORSEY & WHITNEY LLP
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<br />Apti130, 201
<br />Mr, john Meggison
<br />MGP Enterprises
<br />2515 Oak Drive, ~8
<br />Lake+wod, CO 80215
<br />Dear Iabn:
<br />This ]allot r~n£uxos our discussions tzgarditrg a coal ]case between our client. Lotendto
<br />Coal Company, L.LC, a Colorado limited ]iabiliry company ("l:orrnci W") and MCrP Enterprises,
<br />a Colorado Ilmited patmetship ("MGP"), and evidenxs the good faith intention of MGP sad
<br />l,oteacito to proceed oa the following bade terms aadconditioas. This letter cotttairrs the
<br />gcaecal bsais of negotiations which, if su~zessfully cooeluded, wiil trsnlt is a deEutitive Coal
<br />Lease Ageerarnt (the "Agt*xateat'~.
<br />1. ]salad Asretr. Io the Agteemeot, MQP wi]1 lesx, to Lnreacito, foP the purpose of
<br />rsploring, developing. mining. semovittg, peepadng ~d loading all of MGP's interest fn the coal
<br />from tllc surface m the botrom of the t1rimcro seam lying ia, uadef end ttQan the property ]Dated
<br />is I.aa Animas County, Colorzdo descnbed on Exhibit A berets (the "Leased Lands") sod
<br />containing approxilnate]y 17,861.84 eaten, dating the rum of the Agrrxmetrt end subject to the
<br />limitations and coaditioos w be ptneided in the Agreement
<br />2. Definitive .lgrremwer, MQP and L.orenclto will proceed is good Faith towazd
<br />aegotiadoa and exentltlon of the Agreement. If the Agaeme~ has not been executed by 5:00
<br />p.¢r, MST, tm Jvsto 3, 2001, this letter shall aarnmadcallp terminate.
<br />3. Camptianee with I~w. The Agr~mcnt a~)S tequila Icrendto to comply with all
<br />applicable federal, crate, cad local govefameattl laws, rules, re~llations, orders and standards
<br />trrdh teepee to the based J1,nda end ~e mlaittg o F coal on the ]raced bands.
<br />6. Cartdltlaxr. The Agreement will be snbjed to: (a) negotiation and eltecrotloa of
<br />me Aggreement with mutually agxable terms, tcptarntatioas, cotlditionc, covenants and
<br />lndemniriee cad (b) receipt by Loreociro of a permit to mice coal on rite ltebed I.asds (the
<br />'Permit").
<br />5. Agrvsnrsrus. Until exeuldon or the Agrnamenr or termination of his Ietttt, MGP
<br />agrees that it w371 not dispose of the ligbss to be greeted to Iotencito itt the Agreermont, sad will
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