ACQUISITION AGREEMENT



         THIS  PURCHASE  AGREEMENT,  made and entered  into this 1st day of July

2005, to be effective as of Closing,  as  subsequently  defined,  by and between

BRONCO HAZELTON CO., an Indiana  corporation (the "ACQUIRING  CORPORATION")  and

WHITE RIVER COAL, INC., an Indiana corporation ("WRC");  Blankenberger  Brothers

Holdings,  LLC, Hoosier King Coal Company,  members of HAZLETON MINING,  LLC, an

Indiana limited liability company ("HML");  Blankenberger Brothers Holdings, LLC

and Black Rush  Mining,  LLC,  members of HAZLETON  WASH PLANT,  LLC, an Indiana

limited liability company ("HWP") (Collectively White River Coal, Inc., Hazleton

Mining, LLC and Hazleton Wash Plant, LLC are referred to as "Target".)



                                   WITNESSETH:



         WHEREAS,  Acquiring  Corporation is a wholly owned subsidiary of Bronco

Energy Fund, Inc.,  currently a Reporting Company under the Securities  Exchange

Act of 1934 (the  "1934  Act"),  and  Acquiring  Corporation  intends to acquire

Target and its business via the purchase of 100% of the  ownership  interests of

WRC, HML, and HWP;



         WHEREAS,  the board of  directors  of  Acquiring  Corporation,  and the

manager(s)  of  Target  (deeming  it  advisable  for the  benefit  of  Acquiring

Corporation and its stockholders that the Target ownership interests be acquired

by Acquiring Corporation - the "ACQUISITION") have approved this Agreement,  and

Target shall  forthwith  submit the  Acquisition  Agreement  for approval by its

members and shareholders;



         NOW,  THEREFORE,  in consideration of the above and foregoing  premises

and the mutual  covenants and  conditions  set forth herein,  and such other and

further  consideration,   the  receipt  and  sufficiency  of  which  are  hereby

acknowledged,  THE PARTIES HEREBY ADOPT THE  ACQUISITION  AGREEMENT AND AGREE AS

FOLLOWS:



ARTICLE I



                                   ACQUISITION



1.01.  CONTINUANCE  OF  CORPORATIONS.  Target shall be acquired by, and become a

wholly-owned subsidiary of, Acquiring Corporation.  The Acquisition shall become

effective upon closing as defined by Paragraph 8 below.



1.02.  TERMS  OF THE  ACQUISITION.  Upon  the  execution  and  delivery  of this

Agreement  and  the  effectiveness  of  the  Acquisition,  all  stockholder  and

membership  interests then issued and  outstanding  of Target,  by virtue of the

Acquisition  and without any action on the part of the  holder(s)  thereof other

than their signature  affixed to this agreement,  shall no longer be outstanding

and shall be  canceled  and  retired  and cease to  exist,  other  than a single

ownership interest of Target, which shall be owned by Acquiring Corporation, and

all other Target  interests  shall be converted into the right to receive,  upon

surrender of the certificate  representing such interest,  the consideration set

forth under Paragraph 1.03 hereof.



1.03. PAYMENT FOR INTEREST(S).  In consideration for the Acquisition,  Acquiring

Corporation  shall  pay the total  amount  of  Twenty-Five  Million  US  Dollars

($25,000,000.00)  (Six Million US Dollars  ($6,000,000.00)  for HWP and Nineteen

Million US Dollars ($19,000,000.00) for HML and WRC) as follows:



         $250,000.00 (two hundred and fifty thousand dollars) cash earnest money

         deposit,  upon mutual execution of this Agreement paid by wire transfer

         to escrow account no. at First American Bank, First American Bank named

         as sole escrow agent; $24,750,000.00 (Twenty-four million seven hundred

         fifty thousand  dollars) cash at Closing paid by wire transfer to First

         American Bank account no. .



1.03A.  ROYALTY.  In  further  consideration  for  the  Acquisition,   Acquiring

Corporation shall grant HML's Members a 5% Overriding  Royalty Interest (divided

according to their ownership  interest in HML) in the ongoing  production of the

coal mined from the properties leased and/or controlled by Target at the time of

closing.   "Overriding  Royalty  Interest"  shall  means  the  royalty  interest

calculated on the Gross Sales Price of Ore that is mined,  removed and sold from

the subject  lands less taxes,  including  ad valorem  tax,  Black Lung fees and

abandoned  mine land ("AML") fees,  the  reasonable and actual costs incurred by

the  Grantor  for  washing,  processing  and  handling  the  Ore  and  less  any

transportation charges (including freight, insurance,  transaction taxes, import

and export duties, levies, handling, port, demurrage,  delay stowage and forward

expenses incurred by reason of or in the course of such  transportation)  in the

event the sales  price is not based on delivery  at the  subject  Hazelton  Coal

Mine. The overriding  royalty interest shall be executed in the form as Appendix

A attached hereto.



1.03B.  ROYALTY  BUYOUT.  Within  180  days  after  Closing,   either  Acquiring

Corporation  or Target  Members  may elect a buyout  of the  Overriding  Royalty

Interest   from  Target   Members  for  a  price  of  Five  Million  US  Dollars

($5,000,000.00)  (the  "Purchase  Price").  In the  event  of such an  election,

Acquiring  Corporation shall execute a promissory note in favor of HML's Members

in the sum of Five Million and No/100  ($5,000,000.00)  Dollars  (the  "Purchase

Note")  representing the Purchase Price of the Overriding Royalty Interest.  The

Purchase  Note shall bear  interest at eight per cent (8%) per annum  compounded

monthly  from the date of Closing and  continuing  for the life of the  Purchase

Note.  The Purchase Note plus all  compounded  interest  shall be payable on the

second anniversary date of the Closing. The Acquiring  Corporation shall furnish

HML's  Members a security  interest in all real  property  leases  owned  and/or

controlled by Target at the time of Closing, a security interest in the Columbia

mine  property,  in Carbon  County,  Utah as  described  in  Appendix B attached

hereto, and a security interest in the coal that is mined from those properties.

The security interest in the real property leases owned and/or controlled by the

Target at the time of the Closing,  in the Columbia  mine, and in the coal shall

be third position security interests,  the prior two security documents for each

interest attached hereto as Appendix C. Any and all overriding  royalty payments

made by Acquiring  Corporation  to HML's  Members shall reduce the amount of any

Purchase  Note and interest due  hereunder.  If the Royalty  Buyout  election is

made,  the  Purchase  Note shall be  executed in the form as Appendix D attached

hereto.



1.04. CERTAIN EFFECTS OF THE ACQUISITION. Upon effectiveness of the Acquisition,

the Target  shall be  acquired  in whole and become a  subsidiary  of  Acquiring

Corporation,  and  shall  continue  its  own  company  existence  with a  single

ownership interest of Target being owned by the Acquiring Corporation.



1.05. DEBT AND  LIABILITIES.  Target's  Members agree to pay First American Bank

Debts listed below whose value at Closing is estimated to be approximately $14.6

million ("Bank Debts").  The estimated Bank Debts value including  approximately

$439,517.86 of additional debt on the Blankenberger  Brother Holdings' and Black

Rush  Mining's  notes for  payment  of HWP  construction  costs as  detailed  in

Paragraph 1.08.



 Bank Debt                                          Amount- (as of May 31, 2005)

Note Payable by Blankenberger Brothers Holdings, LLC $1,835,482.14

Note Payable by Black Rush Mining, LLC                        $1,835,482.14

Notes Payable by Hazleton Mining Co.                          $8,064,169.48

Note Payable by John Brandt                                   $1,872,424.76



All other  debt,  liabilities  including  but not  limited to known and  unknown

contingent  liabilities,  unasserted  claims,  accrued and unaccrued coal taxes,

payroll taxes,  wages,  benefits and unemployment  obligations shall remain with

Target Corporation except for those HML debts described as follows:



Description                                                      Amount

-----------                                                      ------

Note Payable - Blankenberger Brothers Holdings, L.L.C.           2,316,748.72

Note Payable (1) - Hoosier King Coal Company                     2,316,748.72

Note Payable (2) - Hoosier King Coal Company                     600,000.00

Note Payable -BB Mining, Inc.                                    600,000.00



Accrued Interest                                $524,287.61 (as of May 31, 2005)

                                                --------------------------------

                              Total             $6,357,785.05

                                                =============





1.06  RELEASE OF TARGET  MEMBERS  FROM LENDER  OBLIGATIONS.  The parties to this

Agreement  expressly agree that as a condition of the Closing of this Agreement,

Target's  lenders whose Bank Debts are paid by Target's  Members  release all of

Target's  pre-acquisition  members and  stockholders  (including  any affiliated

organization,  member,  or stockholder)  from any and all guarantees  related to

such Bank Debts within 7 business  days of Closing.  The lenders  release  shall

also include a discharge from all  obligations  affiliated with such Bank Debts,

including but not limited to guarantees,  securities, collateral assignments and

subornation agreements.



1.07 RELATED COMPANY DEBT.  Acquiring Company acknowledges that for a fee and in

the ordinary  course of business  companies  related to Target have performed or

have had third parties  perform  certain  services for or upon behalf of Target,

including  but not limited to  administration,  financing,  payment of invoices,

forwarding of payment for accounts receivable,  shipping,  handling, billing and

other services ("Services").  Target's liabilities related to these Services are

recorded on the Target  Balance  Sheets.  These  Services  will  continue in the

ordinary course of business until the date of Closing and such  liabilities will

be  recorded  on  the  Target  Balance  Sheets  and/or   invoiced  to  Acquiring

Corporation as they become available.  Additionally, these Services may continue

after  Closing to complete  orders,  transactions  and/or  shipments  made on or

before the day of Closing.



Therefore,  Acquiring  Corporation  agrees to pay,  reimburse and/or fulfill the

related companies for all invoices, debts, liabilities,  and obligations related

to the Services performed in the ordinary course of business for or on behalf of

Target on or after  Closing.  Details of the payment for  Services to  Lafayette

Coal are  contained in the  Lafayette  Payment for Services  Agreement  attached

hereto as Appendix E



1.08 HWP CONSTRUCTION COSTS AND INVOICES.  Blankenberger  Brothers Holdings, LLC

and  Black  Rush  Mining,  LLC,  members  of HWP,  agree  to pay the  contracted

construction  costs of the HWP wash plant as  invoiced  by the  Daniels  Company

within 15 days of Closing up to a total combined dollar amount of  $4,550,00.00.

As of May 31,  2005 the two  member  companies  have  paid a  combined  total of

approximately $3,670964.28.



                                   ARTICLE II



                         REPRESENTATIONS AND WARRANTIES



                                     TARGET



         Target,  Target's  manager(s),  members,  directors,  and stockholders,

unanimously,   jointly  and  severally,   represent  and  warrant  to  Acquiring

Corporation, without reservation, as of the date hereof and Closing as follows:



2.01. CORPORATE ORGANIZATION. Target consists of one corporation and two limited

liability  companies all duly organized,  validly  existing and in good standing

under the laws of Indiana. Target has all corporate power and authority to carry

on its  business  as now  being  conducted  and to own,  lease  or  operate  its

properties and assets; is duly qualified or licensed to do business as a foreign

corporation  in good  standing in every  jurisdiction  in which the character or

location of the  properties  and assets  owned,  leased or operated by it or the

conduct of its business requires such  qualification or licensing.  Schedules to

be initialed  and  delivered by WRC,  HML and HWP to  Acquiring  Corporation  at

Closing as Appendixes F, G AND H ("WRC  DISCLOSURE  SCHEDULE,"  "HML  DISCLOSURE

SCHEDULE" and "HWP  DISCLOSURE  SCHEDULE")(collectively  the "TARGET  DISCLOSURE

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