JANUARY 2006 CROW TRIBAL LEGISLATURE

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JOINT ACTION RESOLUTION NO.

JAR06-01

INTRODUCED BY CARL E. VENNE, CHAIRMAN

CROW TRIBAL EXECUTIVE BRANCH

JOINT ACTION RESOLUTION OF THE CROW TRIBAL LEGISLATURE AND THE

CROW TRIBAL EXECUTIVE BRANCH ENTITLED:

“FINAL APPROVAL OF THE FRAMEWORK AGREEMENT BETWEEN THE CROW

TRIBE OF INDIANS AND WESTMORELAND COAL COMPANY.”

WHEREAS, the Chairman of the Executive Branch has authority and responsibility

pursuant to the enumerated powers in Article IV, Section 3(a) of the Constitution and Bylaws of

the Crow Tribe of Indians to represent the Crow Tribe in negotiations in matters of economic

development, in Section 3(f) to negotiate and approve or prevent any sale, disposition, lease or

encumbrance of Tribal lands or other Tribal assets, including minerals, with final approval

granted by the Legislative Branch, and in Section 3(k) to negotiate and approve limited waivers

of sovereign immunity when such a waiver is necessary for business purposes, subject to final

approval by the Legislative Branch; and.

WHEREAS, Westmoreland Coal Company, a Delaware corporation (hereinafter,

“Westmoreland”) has experience and expertise in the development of coal mines and coal-fired

power plants, and owns an 80% interest in Westmoreland Resources, Inc., which has been

operating the Absaloka Mine under lease from the Crow Tribe for more than 30 years; and

WHEREAS, the Chairman and the other elected Tribal Executive Branch Officials have

been in discussions since early 2005 with Westmoreland Coal Company on the possible

development of a Crow-owned electric power generating plant using Tribally-owned coal and

other Tribal resources in the northern portion of the Reservation, including the Ceded Strip

(referred to as the “Project”); and

WHEREAS, in order to further investigate this power plant development possibility, the

Chairman and Westmoreland subsidiary Westmoreland Power, Inc., entered into a Project

Evaluation and Confidentiality Agreement dated June 2, 2005 (the “Project Evaluation

Agreement,” a copy of which is attached to and incorporated herein by reference), whereby the

parties agreed to keep confidential all the confidential information provided or obtained in the

course of their investigation for a period of two (2) years, and not to negotiate with others on a

competing project within the “Project Area” for a period of one (1) year; and

January 2006 Session

JAR Westmoreland Coal Framework Agreement

Page 1 of 4

WHEREAS, the Tribe provided a limited waiver of sovereign immunity for enforcement

of the Project Evaluation Agreement by equitable or injunctive relief in the U.S. or State District

Courts, with the Tribe’s total monetary liability limited to One Dollar as previously authorized

by the Legislature according to CLB02-17 (March 12, 2002), and which does not allow for the

encumbrance of any Tribal assets; and

WHEREAS, the Tribal Executive Branch and Westmoreland have worked together

under the Project Evaluation Agreement to, among other things: (a) identify markets for and

discuss the Project with potential customers and participants; (b) assemble information on the

Tribe’s coal, wind, land and water resources that would be utilized for the Project; (c) complete

preliminary conceptual studies on alternative power plant designs, transmission options and

estimated costs; (d) consult with the Bureau of Indian Affairs on the Project and potential

benefits available under the National Energy Policy Act of 2005, and to obtain extensions of

other existing tax incentive programs; and (e) commission more detailed feasibility and cost

studies in order to market and finance the Project, including a response to a Request for

Proposals (“the “RFP”) from a major potential customer that is due in early January 2006; and

WHEREAS, the parties’ preliminary evaluation of the Project is positive, and further

expenditure of money and effort is justified, the Chairman of the Executive Branch and

Westmoreland have negotiated a “Framework Agreement” to further define the parties’

relationship and their respective contributions, goals and objectives for the Project (a copy of

which is attached to and incorporated herein by reference); and

WHEREAS, the Framework Agreement (a) continues the parties’ obligations under the

Project Evaluation Agreement; (b) limits the Tribe additional obligations to the reimbursing

Westmoreland’s costs from Project funds and to providing Westmoreland with a preferential

opportunity to operate the coal mine if the Tribe’s resources are later committed to a coal-fired

power plant in the Project Area using a different developer; and (c) provides a limited waiver of

the Tribe’s sovereign immunity to allow Westmoreland to enforce of such obligations; and

WHEREAS, the Legislative Branch has authority and responsibility pursuant to its

“powers and duties” in Article V, Section 2(c) of the Constitution to charter instrumentalities of

the Crow Tribe for purposes of economic development, in Section 2(d) to “grant final approval

or disapproval of items negotiated by the Executive Branch of Government pertinent to the sale,

disposition, lease or encumbrance of Tribal lands, interests in lands or mineral assets,” and in

Section 2(f) to “grant final approval or disapproval of limited waivers of sovereign immunity by

the Executive Branch when waivers are necessary for business purposes;” and

WHEREAS, if the Tribe and Westmoreland determine that the Project is feasible, and

prior to obtaining the financing for the Project, the Framework Agreement will be supplemented

or replaced by more definitive agreements involving the encumbrance of Tribal resources, the

chartering of Tribal instrumentalities, and limited waivers of the Tribe’s sovereign immunity,

and such definitive agreements will be subject to further approval of the Tribal Legislature and

the Bureau of Indian Affairs; and

January 2006 Session

JAR Westmoreland Coal Framework Agreement

Page 2 of 4

WHEREAS, although the current Framework does not commit or encumber the Tribe’s

land or mineral resources to the Project or require the chartering of any Tribal instrumentality at

this time, the Executive Branch requests to the Legislature to express its overall support for the

Project through this Resolution, based on the information currently available, and to approve the

limited waiver of sovereign immunity contained in the Framework Agreement; and

WHEREAS, at the time this Joint Action Resolution was submitted to the Legislature in

order to comply with Article V, Section 7 of the Constitution, the parties had reached substantial

agreement on the draft Framework Agreement submitted with the Resolution, and were in the

process of finalizing the remaining legal terms of the Agreement, and the final Framework

Agreement attached hereto has been reviewed by the Legislature;

NOW THEREFORE, BE IT RESOLVED BY THE LEGISLATURE AND THE

EXECUTIVE BRANCH OF THE CROW TRIBE:

Section 1. That the “Framework Agreement” between the Crow Tribe and

Westmoreland Coal attached hereto and incorporated by this reference, and the limited

waiver of sovereign immunity contained therein, is hereby granted final approval pursuant

to Article V, Section 2(f) of the Constitution and Bylaws of the Crow Tribe.

Section 2. That the authority of the Chairman of the Executive Branch to enter into

the Project Evaluation and Confidentiality Agreement dated June 2, 2005, including the

limited waiver of sovereign immunity contained therein, is hereby reaffirmed and ratified.

Section 3. That the Chairman of the Executive Branch is authorized to sign and

execute the Framework Agreement on behalf of the Crow Tribe, and to take such further

actions as are necessary to implement and administer the Agreements.

Section 4. That the final approval granted herein is effective on the date of approval

of this Resolution.

CERTIFICATION

Thereby certify that this Joint Action Resolution granting final approval of the

Framework Agreement between the Crow Tribe and Westmoreland Coal Company was duly

approved by the Crow Tribal Legislature with a vote of __16_ in favor, _1 opposed, and _0

abstained and that a quorum was present on this 10™ day of January, 2006.

January 2006 Session

JAR Westmoreland Coal Framework Agreement

Page 3 of 4

Chhon Goa Zl

Speaker of the House

Crow Tribal Legislature

Attest:

I, OE

Secretary, Cw Tribal Legislature

EXECUTIVE ACTION

Thereby

_ approve,

veto

this Joint Action Resolution granting final approval of the Framework Agreement between the

Crow Tribe and Westmoreland Coal Company pursuant to the authority vested in the Chairman

of the Crow Tribe by Article V, Section 8 and Article IV, Sections 3(a) and 3(k) of the

Constitution and Bylaws of the Crow Tribe of Indians on this_//_ day of January, 2006.

hairman, Executive Branc!

Crow Tribe of Indians

January 2006 Session

JAR Westmoreland Coal Framework Agreement

Page 4 of 4

Bill or Resolution Number JNROU-O| Introduced by: Evenctive Date of Vote:_Ol /\c | Zc0le.

Representative: Yes No Abstain

L. Plain Bull

C. Goes Ahead

O. Costa

V. Crooked Arm

M. Not Afraid

R. Iron

B. House

E. Fighter

L. Costa

L. Hogan

S. Fitzpatrick

K. Real Bird

M. Covers Up

R. Old Crow

L. Not Afraid

B. Shane

D. Wilson

VI NISAY AIS IV BISA IN AKIININ

J. Stone

Totals: \lo \ O

Result of Vote:

Passed

~Passed Not Passed Tabled Veto Override

Signature Officer: Calon Loch Coa ‘s Jan. /O_,2OOE

CONFIDENTIAL

FRAMEWORK AGREEMENT

CONCERNING THE DEVELOPMENT OF

ELECTRIC GENERATING FACILITIES

USING NATURAL RESOURCES

UNDER THE OWNERSHIP OR CONTROL OF

THE CROW TRIBE OF INDIANS

This FRAMEWORK AGREEMENT is entered into as of the day of January, 2006

by and between the Crow Tribe of Indians (hereinafter, the “Tribe”), P.O. Box 159, Crow

Agency, MT 59022, and Westmoreland Coal Company (hereinafter, “Westmoreland”), a

company organized under the laws of the state of Delaware, with its principal office at 2 North

Cascade Avenue, 14" Floor, Colorado Springs, CO 80903, together with its affiliates and

subsidiaries.

WHEREAS, the Tribe wishes to develop natural resources owned or controlled by the

Tribe on or near the Crow Indian Reservation, including the “ceded strip” (the “Reservation”)

for the purpose of generating and selling electric and thermal energy; and

WHEREAS, Westmoreland has expertise in the development of natural resources and

the production of energy, including development and operation of coal mines and coal-fired

" power plants; and

WHEREAS, the Tribe and Westmoreland (the “Parties”) wish to cooperate and

collaborate to jointly pursue the Project as defined in this agreement; and

WHEREAS, the Tribe and Westmoreland Power, Inc., have previously entered into a

certain Project Evaluation and Confidentiality Agreement dated June 2, 2005 (the “Project

Evaluation Agreement”), whereby they have, on a preliminary basis:

(a) identified markets for and discussed the Project with potential customers

and participants;

(b) assembled additional information on the Tribe’s resources that would be

utilized for the Project; and

power plant sizes and designs, and transmission routes and estimated

costs; and

WHEREAS, the Parties’ preliminary evaluation of the Project is positive, and the Parties

have determined that the Project’s potential justifies the expenditure of substantial additional

time and financial resources in order to bring the Project to the point of being able to obtain

financing for the Project, including:

{a) identifying specific sites for the Project’s essential components;

(b) completing detailed cost and environmental feasibility analyses; and

the Project; and

WHEREAS, recognizing that time is of the essence, the parties wish to set forth in further

detail the terms of their joint efforts during the planning, organization and feasibility phase,

which will be supplemented by more definitive agreements prior to finalizing the financing for

the Project;

NOW, THEREFORE, the Tribe and Westmoreland agree as follows:

PART A. PARTIES’ GENERAL OBJECTIVES AND RELATIONSHIP

1. The Project. (a) As used in this agreement, the “Project” consists of the

development of and operation of a mine-mouth electric generating plant fueled by Triballyowned coal (the “power plant”) and located on or near the Crow Indian Reservation (including

the “ceded strip”) in the “Project Area” as defined in Section A.1 of the parties’ Project

Evaluation and Confidentiality Agreement dated June 2, 2005, together with related and ancillary

facilities that the parties may determine to be necessary or desirable to enhance the overall

economic return of the power plant, including but not limited to:

@ coal mine to supply Tribally-owned coal for the power plant;

(ii) _‘ transmission lines to transport the power plant output to markets in Montana and

the Pacific Northwest;

Gii) water pipeline{s) to provide Tribally-controlled water for the power plant;

(iv) co-generation and/or other facilities utilizmg power, steam or heat generated by

the power plant; and

(v) __ pollution contro! materials and by-products of the power plant, including supply

of limestone from the Reservation and utilization of carbon dioxide and ash by-

products.

(b) — The Parties recognize and agree that the development of power from wind energy,

to which the Tribe has devoted a significant amount of time and effort, will likely be necessary

or desirable to complement the Project, and that the total economic return to the Tribe may be

enhanced if the power from wind energy on or near the Reservation is marketed as a component

of the Project’s output. The Tribe agrees that it will cooperate with Westmoreland to market

the power from wind-energy facilities as part of the Project output, but if such marketing efforts

show that power from wind energy is not important to the customers of the Project, or if it is

determined by the Parties that including wind power in the Project would cause unreasonable

delay in the commercial availability of the wind power under review by the Tribe, the Tribe

may commit its wind power project to another development partner, in which case the Tribe will

take appropriate steps to closely coordinate its timing and marketing to take advantage of

identified synergies with the Project.

and gas or coalbed natural gas development, or development of the Tribe’s coal resources

outside the Project Area.

(d) _ In developing the Project, the Tribe and Westmoreland are both fully committed

to maintaining a clean and healthful environment and protecting the land, air, water and the

people of the Reservation and surrounding areas, including the use of best available pollution

control technologies in all aspects of the Project design and operation, and provisions for

implementing future control technologies as they become technically and economically feasible.

2. Tribe’s Objectives. Westmoreland recognizes and agrees to assist the Tribe in

achieving the Tribe's ultimate goals and objectives for the Project which include the following:

(a) in conjunction with Westmoreland, retention of control over decisions

conceming the development and operation of the Project;

(6) majority equity ownership in the power plant, excluding the equity owned by

the power purchasers, if any, as well as equity ownership in the coal mine and

certain ancillary facilities, resulting in a steady stream of income to the Tribe

representing a fair share of the value added by the Project to the resources

contributed by the Tribe; ;

their businesses so that:

@ they will have a substantial role in the development and construction of the

portions of the Project located on or near the Reservation; and

(ii) management and operation of the power plant and coal mine will be staffed

primarily by Tribal members when and as qualified Tribal members are

available for such management and operations with the support of effective,

long-range technical education and job training programs;

(d) enhance the value of the Tribe’s other resources, including renewable energy

resources by coordinating their development closely with the Project;

(e) avoidance of risk to the overall financial viability of the Tribal Government,

including protection of other Tribal assets and income other than the Tribal

resources committed to the Project.

3. Westmoreland’s Objectives. The Tribe recognizes and agrees to assist the

Westmoreland in achieving the Westmoreland’s ultimate goals and objectives for the Project

which include the following:

(a) a central role in the development of the Project and earning a customary

development fee from the Project and/or the other Participants that fully

compensates Westmoreland for its risk investment and opportunity cost of its

resources dedicated to the Project;

(b) —_a long-term mining contract to produce and deliver the coal needed by the power

plant with customary compensation, subject to the employment objectives of the

Tribe and subject to the right of the Tribe to acquire up to 50% of the equity

ownership of the company that is formed to mine the coal at a price equal to a

corresponding percentage of the capital invested by Westmoreland in such mining

company, as described in section 4 (d) below;

interest in the power plant;

(d) —_ a contract to operate and maintain the power plant with customary compensation,

subject to the employment objectives of the Tribe and subject to the Tribe’s

ownership of 50% of the company that is formed to operate and maintain the

power plant and the longer-term goal of transferring these contractual obligations

and majority ownership of the power plant operating company to the Tribe when

itis feasible to do so;

(©) . avoidance of financial risk beyond planned amounts committed to the Project in

advance.

4. General Relationship of the Parties. (a) The parties intend by this agreement

to work together as co-venturers to bring the Project to point where the Parties are able to

mutually determine whether the Project can be marketed, financed and constructed on terms

acceptable to both Parties, and, if so, to enter into further definitive agreements to develop the

Project. The Parties acknowledge and affirm that their mutual interests in pursuing the Project

are closely aligned, and that while this agreement is in effect, they will deal with each other

openly and make reasonable efforts to protect each other’s interests as well as their joint

interests.

(b) The Parties recognize that in order to market or finance the Project, it will likely

be necessary or desirable for other parties, particularly customers of the Project (the “other

Participants”), to acquire equity interests in the Project, and that it may be necessary for the

Parties to compromise some of their respective Objectives in order to obtain investments from

such other Participants and/or to control the Parties’ respective risks. The Parties agree that

regardless of their respective equity interests in the Project, neither Party will make or support

any significant decisions related to the Project over the objection of the other Party.

for the purpose of developing various portions of the Project, and such companies will become

parties to this agreement or a supplemental agreement.

(4) The Parties plan to form a special company to mine the coal that will supply the

coal to the Project. This special company will enter into a lease with Tribe and pay a marketbased royalty to the Tribe for the coal that is produced on Tribal lands or Trust lands. This

special company will also enter into a life-of-mine coal mining contract with Westmoreland or

one of its subsidiaries to mine the coal at a market-based mining fee. As mining contractor,

Westmoreland will be subject to the hiring preferences and other Tribal objectives expressed

herein, and will be subject to the control of the Board of Directors of the special company . The

Tribe shall have the right to own up to 50% of the special company, provided that the Tribe shall

bear a portion of the capital expenditures and operating expenditures of the special company as

they are incurred, and shail be entitled to a portion of the profits, in the same proportion as the

Tribe’s equity ownership in the special company.

(e) At the time of financial closing, any management and/or development fees

payable to either of the Parties shall be aggregated and distributed as follows: First, to reimburse

the Tribe for any of its direct and indirect costs incurred prior to financial closing which have not

otherwise been reimbursed, second, to reimburse Westmoreland for any of its direct and indirect

costs incurred prior to financial closing which have not otherwise been reimbursed, and third, the

remaining amount, if any, will be distributed to Westmoreland and the Tribe in the ratio of 2 to

1, respectively.

® If either Party chooses to forego an opportunity to acquire a portion of the equity

ownership in any company contemplated herein—for example, if a Party determines that the

investment risk in a particular company is too great in light of the required capital—the other

Party shall have the right to acquire the foregone equity interest before it is offered to any third

party, and such equity interest may not be sold to a third party at a price that is better than the

price at which it was offered to the other Party.

PART B. PARTIES’ ROLES AND RESPONSIBILITIES.

1. The Project shall be developed jointly by the Tribe and Westmoreland, and

neither party shall implement or develop such a Project without the involvement of the other

party on the terms contemplated herein.

2. Westmoreland and the Tribe shall cooperate and assist each other in all matters

of mutual interest with respect to a Project, such as all documents to be used in the financing of

the project and other normal business activities required to achieve financial closure,

employment of personnel, acquiring all equipment and supplies necessary for the conduct of

business, maintenance of bank accounts, and making of necessary purchases.

3. Westmoreland will be responsible for the development of the business plan for

the Project. A business plan, including a preliminary Project cost estimate, will be completed as

soon as possible after the execution of this agreement. The projected cost of the Projects will be

refined upon completion of the final Project documentation.

4. Each party acknowledges that it will receive from the other party information

about Projects and proposed Projects, including technical and business information and financial

projections relating to the Projects. Each party agrees to hold such information in strict

confidence and use it solely and exclusively for the purpose of internal review.

5. Responsibilities of the parties shall be:

(a) | Westmoreland shail be the lead in the development of all necessary

documentation, including site-specific feasibility studies, that will allow the

formation the Project and the subsequent borrowing of funds from agreed-upon

lenders.

(i) Westmoreland shall be responsible for the daily operation and

development of the Project, establishing necessary documentation, and

setting up offices, as Westmoreland determines to be necessary, with the

Tribe’s agreement;

(ii) Westmoreland shall be responsible for the day-to-day management of the

Project; and

Gii) | Westmoreland shall be entitled to receive management fees or any other

types of fees for management and/or operation as customarily occur in the

normal course of business for such a Project. Management fees eamed by

Westmoreland prior to financial close for a Project shall be paid at

financial close from Project funds provided by lenders and other

Participants. Westmoreland shali be entitled to assign its interest in the

development fee to a lender for the purpose of securing financing.

(iv) Westmoreland shall also be entitled to a significant equity interest in the

Project from the Tribe, prior to and/or subsequent to financial closing of

the Project. Westmoreland may assign such interest to a lender for the

purpose of securing financing, but may not transfer such interest to

another party until after the financial closing. :

(b)

The Tribe shall provide the following support and services:

Gi)

(vy)

(v)

(vi)

(vii)

(viii)

Technical and service personnel as mutually determined to be necessary

for the Project and to. the Tribe’s employment objectives, subject to

availability of Tribal personnel and funds;

Representatives to assist Westmoreland in negotiation with the Project

off-takers, equipment suppliers. and other parties involved in Project

activities. Westmoreland and the Tribe shall coordinate these activities

in a manner that is convenient to both parties,

Provide access to permits and licenses, etc. for review to assist

Westmoreland in any required modification of the same.

The Tribe shall cause the transfer of all necessary licenses, permits,

approvals, etc., whether whole. or partial, to the Projects for the purposes

contemplated by this Framework Agreement, subject to approvals required

by Federal law.

Both on its own initiative in connection with other Tribal matters and

together with Westmoreland, work with Federal, State, local and other

Tribal Governments to facilitate and obtain approvals, consents and

support for (or non-opposition to) the Project, the use of Tribal resources

commnitted to the Project, and the benefits of government grants, federal

tax and other energy development incentives. (including amendments to

existing legislation for application to the Project).

On or before the time that the Project has been financed, commit the

Tribal resources necessary for the Project, including coal, water, arid land,

pursuant to further definitive agreements and subject to final approval

according to the Tribal and Federal law, as applicable.

The Tribe shall be entitled to the entire equity interest in the Project,

except as made available to Westmoreland as provided above and as

otherwise necessary to market the Project’s output, fully finance the

Project, and/or to control the Tribe’s risk.

The Tribe shall also be entitled to a portion of the management fees

and/or development fees payable at financial closing of the project

sufficient to reimburse the Tribe for its direct and indirect costs incurred

prior to closing, and at least equal to Westmoreland’s equity in the power

plant expressed as a percentage of the Tribe’s and Westmoreland’s

combined equity in the power plant immediately after closing, as

described in section 4(e) of Part A above.

6. Westmoreland, in consultation with the Tribe, shall establish policies,

procedures, systems and specifications for the following:

(a) Hiring and terms of employment for local personnel. Preference shall be given to

hiring members of the Tribe.

(b) —_ Purchase of equipment and supplies.

Projects including engagement of one or more subcontractors as required.

(d) Lending, banking and other financing arrangements.

(e) Accounting and financial reporting.

(f) Legal compliance and litigation.

(g) _ Publicity, advertising and public relations.

(h) _— Procuring other services that are necessary or desirable to develop and operate the

Project.

7. The Tribe, assisted by Westmoreland, agrees to seek modifications to and/or

obtain any and all licenses and: permits for the Projects, as necessary, to upgrade, install,

maintain and operate the Projects for not less than twenty-five years beginning at the

Commercial Operation Date.

8. Upon completion of a business plan that establishes the economic viability of the

Project, Westmoreland and the Tribe will commence negotiations on further definitive

agreements and any other contracts necessary to successfully implement the project.

9. In all actions relating to any Project, Westmoreland agrees to respect the Tribe’s

aspiration to make this a predominantly Tribal Project, to preserve the integrity of Tribal lands,

including protection of cultural and historic sites and artifacts, and to. design and develop the

Projects in a manner that recognizes the customs, rights, privileges, sovereignty and policies of

the Tribe.

PART C. GENERAL TERMS.

1. Nothing in this agreement shall be construed as selling, alienating, transferring, or

otherwise encumbering any Tribal property or assets, including but not limited to resources held

in trust for the Tribe by the United States. Prior to irrevocably committing or encumbering any

trust resources, the Parties will enter into a further definitive agreement subject to approval

pursuant to Tribal and Federal law.

2 In the event of a dispute between the parties as declared in either party’s written

notice, the CEO of Westmoreland or his designated representative and the Chairman of the

Tribe or his designated representative shall meet, and in good faith make every effort to resolve

the dispute. If after 60 days of this notice, the dispute is not resolved, either party may declare

the Agreement to be terminated and the parties shall proceed in accordance with Section C.7(b).

3. Each party hereto shall be responsible for its own expenses until such time as a

further definitive agreement between the parties is prepared for the Project, and all or part of the

Project financing is obtained. The parties shall avail themselves of grants, loan guarantees and

loans offered by the state and federal government for the development of energy projects to the

maximum extent desirable.

4. After execution of this Framework Agreement, each party pledges to use its best

efforts to perform all further acts and execute any other documents required to. allow for the

development and implementation of Projects in a technically competent and commercially viable

manner.

5. The parties confirm that each of them has the right, authority, power and ability to

enter into this Framework Agreement; provided, however, that prior to approval of the limited

waiver of sovereign immunity in Section C.8 of this agreement by the Crow Tribal Legislature,

this agreement shall only be binding on the Executive Branch officials acting in their official

capacities.

6. The terms and conditions of the Project Evaluation Agreement shall remain in full

force and effect following execution of this Framework Agreement. Notwithstanding

termination of this agreement or the Project Evaluation Agreement, Sections A.3 and B.6 of the

Project Evaluation Agreement shall survive termination and remain in full force and effect for

the periods stated therein.

7. Term. (a) —_‘ The term of this Framework Agreement shall be one (1) year from

its date, unless earlier terminated as provided in subsection (b) below, and from month to month

thereafter until terminated upon thirty (30) days’ notice.

(b) Either party may terminate this Framework Agreement during the initial term

upon sixty (60) days’ written notice to the other, provided, however, that prior to the effective

date of termination, the parties shall meet and in good faith make every effort to resolve the

reason for the termination as provided in Section C.2. In the event that the Parties have not

determined to continue the agreement or satisfactorily resolved any dispute (or entered into a

new or modified agreement) within 60 days following the notice, this Agreement shall be

deemed terminated. The provisions of Subsection C.7(c) below shall survive the termination and

remain in fall force and effect for the periods stated therein.

being replaced by a further definitive agreement between the Parties, and the Tribe successfully

obtains financing for development of a power plant in the Project Area within 5 years after the

termination date: (i) Westmoreland shall be entitled to reimbursement for the direct and indirect

costs incurred by it the performance of its obligations under this Agreement prior to the date of

Termination of this Agreement, provided that at the time of termination, Westmoreland has made

the product of its work on the Project available to the Tribe and released the Tribe from any

confidentiality restrictions regarding the use of the information; and (ii) if the power plant is

coal-fired, Westmoreland shall be given the first opportunity to secure a long-term contract

with the Tribe and the Project to operate the coal mine and supply the power plant. The right of

first opportunity referred to in the foregoing sentence shall be implemented as follows: (1)

Westmoreland and the company managing the power plant shall attempt to negotiate a long-term

coal supply agreement that is acceptable to both parties, (2) if a negotiated agreement cannot be

reached within 60 days, a mutually acceptable independent expert shall be appointed within 30

days to decide upon fair and reasonable terms for a long-term coal supply agreement, (3) the

independent expert shall be provided with data and information from both parties within 60 days

of appointment and shall make a proposal within 120 days of appointment, (4) Westmoreland

shall either accept the terms proposed by the independent expert within 10 business days of

receiving the proposal or, if it does not so accept, the project company shall be free to enter

negotiations with another party, subject to the right of Westmoreland to obtain the contract by

accepting the final terms negotiated with the other party within 30 days after written notice of

such terms to Westmoreland, and (5) if the Tribe’s coal resources are made available on terms

other than a lease at market lease rates, Westmoreland shall have a first opportunity to obtain a

mining agreement for the Tribal coal rights, to be implemented similarly to items (1), (2) and (4)

above, but without any terms being set by an independent expert.

8. Arbitration and Limited Waiver of Sovereign Immunity

(a) ‘The Parties agree that any dispute or claim as to the interpretation, application,

quantification or administration of the provisions of Section C.7(c) of this Agreement shall be

resolved exclusively by binding arbitration as provided for in this Section. The decision of the

arbitrators shall be final and binding upon the parties.

@ The Commercial Arbitration Rules of the American Arbitration Association (the '

“AAA”) shall be applicable, except as modified herein, and provided that nothing in the

AAA Rules shall be construed as effecting or enlarging any waiver of the Tribe’s

sovereign immunity beyond the limited waiver expressly provided in this Section.

Gi) _‘In the event of arbitration, Westmoreland shall select one arbitrator, the Tribe

shall select one arbitrator, and those two arbitrators shall select a mutually satisfactory

third arbitrator. Westmoreland and the Tribe shall select their respective arbitrators

within thirty 30) days of receipt of the arbitration demand. The two arbitrators shall

select a third, or announce 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 on a

third arbitrator, the parties agree that they shall request the AAA to appoint. a third

arbitrator. The parties agree that none of the arbitrators shall be enrolled members of the

Tribe or employees, advisors, stockholders, or bondholders of Westmoreland or any

organization affiliated with Westmoreland.

(iii) _ Unless otherwise agreed, arbitration hearing shall be held in Billings, Montana.

The costs of arbitration proceedings shall initially be paid by the party requesting the

arbitration, but ultimate responsibility for such costs shall be determined by the

arbitrators in the course of their decision and/or award according to the extent to which

each party prevailed on the issues subject to the arbitration. Each party shall be

responsible for its own attorneys’ fees.

Gv) _ Ifeither party fails to comply with the arbitrators’ decision, the other party may

file an action to enforce the arbitration award in the U.S. District Court for the District of

Montana (Billings Division), or if such court lacks jurisdiction, the Montana Twenty-

Second Judicial District Court for Big Hor County, Montana.

(b) =‘ The Tribe specifically and unequivocally waives its sovereign immunity for the

limited purpose of enforcing its obligations under Section C.7(c) of this Agreement, provided,

however, that the waiver shall be limited as follows:

@ The Tribe’s waiver shall apply only to enforcement of the Tribe’s obligations

under Section C.7(c) of this Agreement, to compel the Tribe to arbitrate any dispute

conceming those obligations pursuant to the procedures in this Section, and to

enforcement of the result of any such arbitration. Any court action to compel arbitration

or enforce the arbitrators’ award shall be brought in the U.S. District Court for the

District of Montana, or if such court lacks jurisdiction, in the Montana Twenty-Second

Judicial District Court for Big Horn County, Montana.

Gi) The Tribe’s waiver shall extend only to Westmoreland and to no other parties;

(iii) Nothing herein shall permit or authorize the sale or transfer of any property or

assets held by the United States in trust for the Crow Tribe;

(iv) The Tribe’s monetary liability shall be limited to reimbursement of

Westmoreland’s costs as described in Section C.7(c)(i), and the costs of the arbitration as

awarded by the arbitrators, both as determined by the arbitrators, and shall not include

any additional damages;

(v) The source of payment of any such monetary award against the Tribe shall be

limited to the proceeds of financing obtained for the development of a power plant in the

Project Area (if any); and

(vi) Other relief available pursuant to the Tribe’s waiver shall be limited to injunctive

relief providing for enforcement of Westmoreland’s rights with respect to mining coal for

any such power plant as described in Section 7(c)(ii).

Pursuant to the Crow Tribal Constitution and Bylaws, this limited waiver of the Tribe’s

sovereign immunity shall only be effective upon approval by the Crow Tribal Legislature. A

true and correct copy of Joint Action Resolution JAR06-01, enacted by the Crow Tribal

Legislature on January 10, 2006, approved by the Chairman of the Executive Branch on January

11, 2006, and approving the foregoing limited waiver of sovereign immunity is attached hereto

as Exhibit “A”.

9. Notices. Unless otherwise specified by prior written notice, all formal notices

required under this Agreement shall be in writing and delivered to or sent by certified mail with

return receipt requested, postage prepaid, to the address of the party as set out below, and shall.

be effective upon receipt:

(a). If to the Crow Tribe:

Chairperson

Crow Tribe of Indians

P.O. Box 159

Crow Agency, MT 59022

and

Crow Tribe Legal Department

P.O. Box 340

Crow Agency, MT 59022

(b) If to Westmoreland:

Senior Vice President, Power

Westmoreland Coal Company

2 North Cascade Ave., 14th Floor

Colorado Springs, CO 80903

10. This Framework Agreement may be executed in a number of counterparts, each

of which shall be an original, but all of which together shall constitute one instrument. Any

counterpart or other signature delivered via facsimile by any party shall be deemed for all

purposes as being a good and valid execution and delivery of this Framework Agreement by that

party.

This Framework Agreement has been executed on the date first above written by the duly

authorized representatives of the parties hereto.

Westmoreland Coal Company

BY:

Signature

Christopher K: Seglem

President and CEO

AN-11-2006-WED 03:37 PM WESTMORELAND COAL FAX No. 7194485825 P.O14

JAN-11~2006 (01:12PM = FROM-CROW TRIBE LEGAL DEPARTMENT 4066383838 1-374 Pld F-15338

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.