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EXPLORATION AND DRILLING AGREEMENT <br />Made as of this /"day of May, 2007 ("Effective Date") <br />This EXPLORATION AND DRILLING AGREEMENT ("Agreement"), is made by and <br />between SENECA COAL COMPANY, with an address of P.O. box 670, Hayden, CO 81639- <br />0670 (LICENSOR") and COLORADO COAL RESOURCES, LLC, with an address of 701 <br />Market Street, Suite 832, St. Louis, MO 63101 ("LICENSEE"). In consideration of the sum of <br />$10.00, the receipt of which LICENSOR hereby acknowledges, and in further consideration of <br />the mutual covenants set forth below, LICENSOR and LICENSEE agree as follows: <br />1. Exploration Rights. LICENSOR grants LICENSEE, for the term of this Agreement, the <br />nonexclusive right to enter the lands depicted or described on Exhibit A attached hereto <br />and incorporated herein by reference (the "Property"), from time to time, to prospect for, . <br />drill, take core samples, survey, and otherwise evaluate coal and other minerals and <br />strata underlying the surface of the Property. LICENSEE shall also have the <br />nonexclusive right to perform all studies necessary or convenient to obtain governmental <br />approvals and permits necessary for coal exploration and related operations. <br />2. Indemnity and Insurance. LICENSEE shall fully indemnify, defend and save LICENSOR <br />free and harmless against any and all claims, damages, loss and expense, including <br />attorney's fees and other legal expenses, by reason of liability imposed or claimed to be <br />imposed by law upon the LICENSOR for damage because of bodily injuries (including <br />death at any time resulting therefrom) or on account of damage to property sustained by <br />any person or persons arising out of or in consequence of LICENSEE's use of the <br />Property described in this Agreement whether or not such bodily injuries, death or <br />damage to property arise or are claimed to have arisen in whole or in part out of the <br />negligence or any other grounds of legal liability, but excluding, however, any liability <br />caused by the sole negligence or willful misconduct of the employees or agents of <br />LICENSOR. Without limiting the foregoing, LICENSEE shall maintain in force the <br />following insurance; <br />(a) If LICENSEE has any employees (whether full or part time), Workers' <br />Compensation Coverage, Traumatic Injury (including death) and Occupational <br />Disease Disability insurance in accordance with the laws of the state in which the <br />Property is located for all employees located on the Property; and <br />(b) Comprehensive General Liability and Property Damage insurance (including <br />contractual coverage) with bodily injury limits of $2,000,000.00 per person and <br />$2,000,000.00 aggregate and property damage with a limit of $1,000,000.00 <br />aggregate; and <br />(c) Accident insurance covering each participant in an amount of $1,000,000.00 per <br />person and aggregate. <br />All insurance policies must contain an unqualified provision that the insurance carrier will <br />give LICENSOR ten (10) days' prior written notice of any cancellation, change or lapse <br />of such policy. Prior to utilizing the property herein and upon LICESORS request,