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<br />SURFACE USE AGREEMENT
<br />THIS AGREEMENT entered into dtis ~_ day of 1996 ("Effective Date")
<br />by and between between Hazel Eleanor Stenerson and Kimberly Ann St rson ("OWNER") with an
<br />address of 6364 Clearview Road, Boulder,CO 80303 and COTTONWOOD LAND COMPANY, a
<br />Delaware corporation ("CLC"), with an office at 1475 Pine Grove Road, Suite 207, Steamboat Springs,
<br />Colorado 80487, its successors and assigns, whereby in consideration of the sum of Ten Dollars ($10. 00)
<br />and other good and valuable consideration, the receipt of which OWNER hereby acknowledges, and in
<br />furdter consideration of the mutual covenants set foNt below, OWNER hereby grants unto CLC the right
<br />to enter, conduct certain operations for the purpose of exploring for coal and other minerals, and conduct
<br />environmental monitoring and other activities associated with obtaining a coal mining permit, on, under and
<br />across the following described lands located in the County of Routt, State of Colorado ("Property"):
<br />Township 5 North. Rance 88 West, 6th P.M.
<br />Section 18: Lots 5, 7, 9-19, SW14NE/4, Wl2SE(4
<br />Section 19: Lots 5, 6, 9, 10, W/2NE/4
<br />containing 674.44 acres, more or less
<br />OWNER and CLC hereby agree as follows:
<br />Term. Tlus Agreement shall be for a two (2) year term commencing from [he effective date reof~ Ivfjg~
<br />("Primary Term") upon CLC paying to OWNER One Thousand Three Hundred Dollars Fi>R~
<br />($1,350.00), with CLC having the option to extend the Primary Tenn of dris Agreement on a year-to-
<br />year basis for die purpose of conducting additional exploration drilling, seismic surveys, and periodic
<br />environmental monitoring activities as se[ forth below, for so long as mine related activities are being
<br />conducted in the vicinity of the Property by CLC, including the right of ingress and egress for such
<br />activities, by CLC paying to OWNER on or before the expiration of the Primary Term, and
<br />thereafter on each anniversary date of dtis Agreement, an annual rental of Six Hundred Seventy
<br />Five Dollars ($675.00) for such extension.
<br />2. Exploration Drilling. OWNER hereby grants unto CLC the nonexclusive right to enter the Property
<br />from time to time and to prospect for, drill, take core samples, survey, and otherwise evaluate coal
<br />and other minerals and strata underlying the surface of the Property. In the event, and only at such
<br />time as CLC elects to drill such core holes on the Property, CLC shall make a onetime payment to
<br />OWNER, prior to commencing such drilling, of Seven Hundred Fifty Dollars ($750.00 for each
<br />drill hole location.
<br />3. Seismic Surveys. OWNER hereby grants unto CLC the nonexclusive right to wnduct one or more
<br />geophysical (seismic) surveys on, under and across the Property provided, however that prior to the
<br />commencement of such seismic survey, CLC shall notify OWNER as to the location of the receiver
<br />line(s) and shot holes or source points for such seismic survey. In the event, and only at such time as
<br />CLC elects to conduct such seismic survey, CLC shall make a onetime payment to OWNER, prior to
<br />commencing such operations, calculated on die basis of Two Thousand Five Hundred Dollars
<br />($2,500.00) for each mile(5,280 Feet x 10 foot wide) of Property covered by such seismic survey.
<br />4. Environmental Studies. OWNER hereby grants unto CLC, for the term of this Agreement, the
<br />nonexclusive right to perform all studies necessary or convenient to obtain governmental approvals
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