SECUREDGUARANTY

EXHIBIT  4.10

SECURED GUARANTY

THIS SECURED GUARANTY (this “Guaranty”) is made as of December 28, 2006 by PRB ENERGY, INC. and PRB GATHERING, INC. (each a “Guarantor” and together the “Guarantors”).

WHEREAS, PRB OIL & GAS, INC. (the “Company”) has on even date herewith issued senior secured debentures (the “Debentures”) to the Holders, as defined therein, pursuant to the terms of that certain Securities Purchase Agreement dated as of even date herewith (as amended, modified, supplemented or extended from time to time, the “Securities Purchase Agreement” and, together with all related agreements and documents issued or delivered thereunder or pursuant thereto, the “Transaction Documents”);

WHEREAS, it is a condition to the willingness of the Holders to purchase the Debentures from the Company as contemplated under the Securities Purchase Agreement that the Guarantors enter into this Guaranty for the benefit of the Holders;

WHEREAS, the Guarantors will each receive either a direct or indirect benefit from the credit provided to the Company under the Transaction Documents; and

NOW THEREFORE, the parties hereto, intending to be legally bound, and in consideration of the foregoing and the mutual covenants contained herein, hereby agree as follows:

Section 1.               Guaranty.

(a)           Each of the Guarantors, jointly and severally, as primary obligor and not merely as surety, hereby absolutely, unconditionally and irrevocably guarantees: (i) the performance of all obligations of the Company under the Transaction Documents, including without limitation the due and punctual payment in full (and not merely the collectibility) of all obligations under the Debentures, including all principal thereof and all interest payable thereon, at the interest rate provided therein, in each case regardless of the extent allowed as a claim in any proceeding in respect of the bankruptcy, reorganization or insolvency of the Company, any Guarantor or any of their respective Affiliates (a “Reorganization”), in each case when due and payable, according to the terms of the Debentures and the other Transaction Documents, whether at stated maturity, by reason of acceleration or otherwise; (ii) the due and punctual payment in full (and not merely the collectibility) of all other sums and charges which may at any time be due and payable by the Company in accordance with, or under the terms of, the Debentures or the other Transaction Documents, whether at stated maturity, by reason of acceleration or otherwise; (iii) the due and punctual payment in full (and not merely the collectibility), performance and/or observance of all other indebtedness, liabilities, obligations, terms, covenants and conditions contained in the Transaction Documents, whether now or hereafter existing, on the part of the Company to be paid, performed or observed; and (iv) the due and punctual payment and performance in full (and not merely the collectibility) of any and all other future advances and other obligations, indebtedness, obligations and liabilities of the Company to each of the Holders of every kind and

description, whether now existing or hereafter arising, whether direct, indirect or contingent, whether secured or unsecured, and howsoever evidenced, incurred or arising, including without limitation any future loans and advances made to the Company by any Holder prior to, during or following any Reorganization (all of the foregoing being hereinafter collectively called the “Guaranteed Obligations”).

(b)           Notwithstanding any provision contained in this Guaranty or any other Guaranty Document (as defined in Section 2) to the contrary (except as set forth in clause (c) below), it is the intention and guaranty of the Guarantors and the Company that the obligations of each of the Guarantors under this Guaranty shall be valid and enforceable against each such Guarantor to the maximum extent permitted by applicable law.  Accordingly, if any provision of this Guaranty creating any obligation of a Guarantor in favor of the Holders shall be declared to be invalid or unenforceable in any respect or to any extent, it is the stated intention and agreement of the Guarantors and the Holders that any balance of the obligation created by such provision and all other obligations of the Guarantors to the Holders created by other provisions of this Guaranty shall remain valid and enforceable.  Likewise, if any sums which any  Holder may be otherwise entitled to collect from a Guarantor under this Guaranty shall be declared to be in excess of those permitted under any law (including any federal or state fraudulent conveyance or like statute or rule of law) applicable to such Guarantor’s obligations under this Guaranty, it is the stated intention and agreement of such Guarantor and such Holder that all sums not in excess of those permitted under such applicable law shall remain fully collectible by such Holder from such Guarantor and such excess sums shall nevertheless survive as a subordinate obligation of such Guarantor, junior in right to the claims of general unsecured creditors, but prior to the claims of equityholders in the Guarantor.  This provision shall control every other provision of the Guaranty Documents.

Section 2.               Security.  This Guaranty (as the same may be amended, modified, supplemented, replaced or extended from time to time) and all obligations, indebtedness or liabilities of the Guarantors arising hereunder, as well as the obligations under the other Transaction Documents, shall be secured by the Pledge and Security Agreement of even date herewith (as the same may be amended, restated, renewed, replaced, supplemented or otherwise modified from time to time, the “Pledge Agreement”; the Pledge Agreement, together with this Guaranty and any and all other agreements now or hereafter securing this Guaranty, being collectively referred to herein as the “Guaranty Documents”).

Section 3.               Subsequent Changes.  Each Guarantor expressly agrees that each Holder may, in its sole and absolute discretion, without notice to or further assent of the Guarantors and without in any way releasing, affecting or impairing the Guaranteed Obligations and liabilities of the Guarantors hereunder: (a) waive compliance with, or any default under, or grant any other indulgences with respect to, the Guaranteed Obligations; (b) modify, amend or change any provisions of the Guaranteed Obligations; (c) grant extensions or renewals of or with respect to the Guaranteed Obligations, and/or effect any release, compromise or settlement in connection therewith; (d) agree to the substitution, exchange, release or other disposition of any Guarantor or of all or any part of the collateral securing the Guaranteed Obligations; (e) make advances for the purpose of performing any term or covenant contained in the Guaranty Documents or any other Transaction Documents evidencing the Guaranteed Obligations, with respect to which the

Company shall be in default; (f) subject to the provisions of the Debentures, assign or otherwise transfer the Guaranteed Obligations, including, without limitation, the assignment and transfer of any Holder’s rights and remedies under this Guaranty, or any interest therein; (g) deal in all respects with the Company and the Guarantors, the Guaranteed Obligations or any collateral securing the Guaranteed Obligations as if this Guaranty were not in effect; (h) extend credit to the Company or the Guarantors whether or not (1) notice of election to terminate any of the Transaction Documents or any other agreement among the Holders and the Company or the Guarantors has been given by the Holders, or by the Company or the Guarantors, or (2) any Event of Default, or any event which with notice or lapse of time, or both, would constitute an Event of Default, has occurred under the Debentures or any other agreement among the Holders and the Company or the Guarantors; (i) replace any existing obligations and the documentation therefore with an amended and restated obligation and the documentation therefor; and (j) settle or compromise any or all of the Guaranteed Obligations with the Company or the Guarantors, and/or any other person or persons liable therein, and/or subordinate the payment of same or any part hereof to the payment of any other debts or claims which may at any time be due or owing to the Holders and/or other person.

Section 4.               Direct and Absolute Obligation.  The liability of each Guarantor under this Guaranty shall be primary, direct and immediate and not conditional or contingent upon pursuit by the Holders of any remedies it may have against the Company or the Guarantors or any other party with respect to the Guaranteed Obligations, whether pursuant to the terms of the Debentures or otherwise.  The obligations of each Guarantor under this Guaranty shall be absolute and unconditional, irrespective of the genuineness, validity, regularity, enforceability or priority of the Debentures or the Transaction Documents, the Guaranteed Obligations or any other circumstances which might otherwise constitute a legal or equitable discharge of a surety or guarantor and without regard to any counterclaim, setoff, declaration or defense of any kind which any party obligated under the Debentures or any other document evidencing or securing any of the Guaranteed Obligations may have or assert.  No exercise or nonexercise by any Holder of any right given to it hereunder or under the Debentures, and no change, impairment or suspension of any right or remedy of any Holder, shall in any way affect any of either Guarantor’s obligations hereunder or give any Guarantor any recourse against any Holder.  Without limiting the generality of the foregoing, no Holder shall be required to make any demand on the Company, its Affiliates and/or any other party, or otherwise pursue or exhaust its remedies against the Company or any other party, before, simultaneously with or after, enforcing its rights and remedies hereunder against the Guarantors.  Any one or more successive and/or concurrent actions may be brought hereon against any Guarantor, either in the same action, if any, brought against the Company and/or any other party, or in separate actions, as often as a Holder, in its sole discretion, may deem advisable.

Section 5.               Waivers.

(a)           Each Guarantor hereby expressly waives: (i) diligence, presentment and demand for payment and protest of nonpayment; (ii) notice of acceptance of this Guaranty and of presentment, demand, dishonor and protest; (iii) notice of any default hereunder or under the Debentures or any other Guaranteed Obligations and of all indulgences; (iv) all other notices and demands otherwise required by law which the Guarantors may lawfully waive; (v) the right to

assert in any action or proceeding hereupon any setoff, counterclaim or other claim which it may have against the Holders; and (vi) the benefit of all other principles or provisions of law, statutory or otherwise, which are or might be in conflict with the terms hereof.  As further consideration for the purchase of the Debentures by the Holders from the Company and as a material inducement to the Holders to purchase the Debentures and accept this Guaranty, each Guarantor hereby irrevocably waives, disclaims and relinquishes all claims, whether based in equity or law, whether by contract, statute or otherwise, that such Guarantor might now or hereafter have against the Company or any other person that is primarily or contingently liable on the Guaranteed Obligations guarantied hereby or that arise from the existence or performance of such Guarantor’s obligations under this Guaranty, including, but not limited to, any right of subrogation, reimbursement, exoneration, contribution, indemnification, or participation in any claim or remedy of the Company or any of its Subsidiaries against the Holders or any collateral security that any Holder now has or hereafter acquires.

(b)           Each Guarantor is presently informed of the financial condition of the Company and of all of the circumstances which a diligent inquiry would reveal and which bear upon the risk of nonpayment of the Guaranteed Obligations.  Each Guarantor hereby covenants and agrees that such Guarantor will continue to keep itself informed of the Company’s financial condition, the status of other guarantors, sureties, or other parties liable with respect to the Guaranteed Obligations, if any, and of all of the circumstances which bear upon the risk of nonpayment.  Absent a written request for such information by the Guarantors to the Holders, each Guarantor hereby waives its right if any, to require any Holder to disclose to the Guarantor any information which such Holder may now or hereafter acquire concerning such condition or circumstances, including, without limitation, the release of or revocation by any other guarantor or other party liable with respect to the Guaranteed Obligations.

Section 6.               Unenforceability of Obligations against the Company.  If for any reason the Company has no legal existence or is under no legal obligation to discharge any of the Guaranteed Obligations, or if any of the Guaranteed Obligations have become irrecoverable from the Company by reason of its insolvency, bankruptcy or reorganization or by other operation of law or for any other reason, this Guaranty shall nevertheless be binding on each Guarantor to the same extent as if such Guarantor at all times had been the principal obligor on all such Guaranteed Obligations.  In the event that acceleration of the time for payment of any of the Guaranteed Obligations is stayed upon the insolvency, bankruptcy or reorganization of the Company or for any other reason, all such amounts otherwise subject to acceleration under the terms of the Debentures, the other Transaction Documents or any other agreement evidencing, securing or otherwise executed in connection with any Guaranteed Obligation shall be immediately due and payable by the Guarantors.

Section 7.               Instrument for the Payment of Money.  Each Guarantor hereby acknowledges that this Guaranty constitutes an instrument for the payment of money, and consents and agrees that each Holder, at its sole option, in the event of a dispute by the Guarantor in the payment of monies due hereunder, shall have the right to bring motion-action under New York CPLR Section 3213.

Section 8.               Representations and Warranties.  Each Guarantor, as to itself, hereby represents and warrants to the Holders that:

(a)           Such Guarantor (i) is a corporation duly organized and validly existing and in good standing under the laws of the state of its incorporation and is duly qualified to transact business in each  jurisdiction where because of the nature of its business or property such qualification is required, (ii) has full power and authority to own its properties and assets and to carry on its business as now being conducted and as presently contemplated, and (iii) has full power and authority to execute and deliver, and perform its obligations under, the Guaranty Documents to which it is a party or signatory.

(b)           The execution and delivery of, and performance by such Guarantor of its obligations under, the Guaranty Documents are within its corporate power, have been duly authorized by all requisite action and do not and will not violate any provision of law, any order, judgment or decree of any court or other agency of government, the corporate charter or by-laws of such Guarantor or any indenture, agreement or other instrument to which such Guarantor is a party, or by which such Guarantor is bound, or be in conflict with, result in a breach of, or constitute (with due notice or lapse of time or both) a default under, or result in the creation or imposition of any lien, charge or encumbrance of any nature whatsoever upon any of the property or assets of such Guarantor pursuant to, any such indenture, agreement or instrument, except where such violation, conflict or default would not have a material adverse effect on the properties, assets or condition (financial or otherwise) of such Guarantor or any rights of the Holders under any of the Guaranty Documents to which it is a party (hereinafter, a “Material Adverse Effect”).  Each of the Guaranty Documents to which such Guarantor is a party, including without limitation the Pledge Agreement, constitutes the valid and binding obligation of such Guarantor, enforceable against it in accordance with its terms, subject, however, to bankruptcy, insolvency, reorganization, moratorium and similar laws affecting the rights and remedies of creditors generally or the application of principles of equity, whether in any action in law or proceeding in equity, and subject to the availability of the remedy of specific performance or of any other equitable remedy or relief to enforce any right under any such agreement.

(c)           Except for filings to be made in connection with the Pledge Agreement (including, but not limited to, UCC-1 Financing Statements) and any other collateral document that requires the recordation or filing with any governmental authority, the Guarantors are not required to obtain any consent, approval or authorization from, or to file any declaration or statement with, any governmental instrumentality or other agency, or any other person, in connection with or as a condition to the execution, delivery or performance of any of the Guaranty Documents to which it is a party.

(d)           There is no action, suit or proceeding at law or in equity or by or before any governmental instrumentality or other agency, including any arbitration board or tribunal, now pending or, to the knowledge of such Guarantor, threatened (nor is any basis therefor known to such Guarantor), (i) which questions the validity of any of the Guaranty Documents, or any action taken or to be taken pursuant hereto or thereto, or (ii)

against or affecting such Guarantor which, if adversely determined, either in any case or in the aggregate, would have a Material Adverse Effect.

(e)           No Guarantor is a party to any agreement or instrument or subject to any corporate, partnership or other restriction which by its terms could have a Material Adverse Effect as a result such Guarantor entering into this Guaranty or performing hereunder.

(f)            No Guarantor is in violation of any provision of its corporate charter or by-laws or any material indenture, agreement or instrument to which it is a party or by which it is bound or, to the best of such Guarantor’s knowledge and belief, of any provision of law or any order, judgment or decree of any court or other Governmental Authority except to the extent such violation would not cause a Material Adverse Effect.

Section 9.               Affirmative Covenant.  Each Guarantor hereby covenants and agrees that, until payment in full of the Guaranteed Obligations and termination of all commitments with respect thereto, such Guarantor shall comply with all of the covenants and other provisions of the Debentures which apply to it (if any).

Section 10.             Events of Default.  In each case of the happening of an “Event of Default”, as such term (or any similar term) is defined in the Debentures (hereinafter referred to as an “Event of Default”), then and upon any such Event of Default and at any time thereafter during the continuance of such Event of Default, at the election of the Holders (or automatically in the case of certain Events of Default as specified in the Debentures), the Guaranteed Obligations and any and all other obligations of the Company and the Guarantors and any of them to the Holders shall for the purposes of this Guaranty immediately become due and payable, both as to principal and interest, without presentment, demand, or protest, all of which are hereby expressly waived, anything contained herein or other evidence of such Guaranteed Obligations to the contrary notwithstanding.