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UNITED STATES
<br />DEPARTMENT OF THE INTERIOR
<br />BUREAU OF LAND MANAGEMENT
<br />COAL LEASE READJUSTMENT
<br />PART I. LEASE RIGHTS GRANTED
<br />Serial Number: COC- 126669 -01
<br />Lease Date: August 01, 1982
<br />This lease, entered into by and between the UNITED STATES OF AMERICA, hereinafter called lessor, through the Bureau of
<br />Land Management (BLM), and
<br />Blue Mountain Energy, Inc.
<br />10714 S Jordan Gateway #300
<br />South Jordan, UT 80495
<br />hereinafter called lessee, is readjusted, effective August 01, 2012, for a period of 10 years and for so long thereafter as coal is
<br />produced in commercial quantities from the leased lands, subject to readjustment of lease terms at the end of each 10 -year
<br />period thereafter.
<br />Sec. 1. This lease readjustment is issued pursuant and subject to the terms and provisions of the Minerals Lands Leasing Act of
<br />1920, Act of February 25, 1920, as amended, 41 Stat. 437, 30 U.S.C. 181 -287, hereinafter referred to as the Act; and to the
<br />regulations and formal orders of the Secretary of the Interior which are now or hereafter in force, when not inconsistent with the
<br />express and specific provisions herein.
<br />Sec. 2. Lessor, in consideration of any bonuses, rents, and royalties to be paid, and the conditions and covenants to be observed
<br />as herein set forth, hereby grants and leases to lessee the exclusive right and privilege to drill for, mine, extract, remove, or
<br />otherwise process and dispose of the coal deposits in, upon, or under the following described lands:
<br />6th Principal Meridian
<br />T. 2 N., R. 101 W.,
<br />sec. 11, lots 1, 2, 4, 5, and 6;
<br />sec. 12, lots 2 to 5, inclusive.
<br />containing 259.06 acres, more or less, together with the right to construct such works, buildings, plants, structures, equipment
<br />and appliances and the right to use such on -lease rights -of -way which may be necessary and convenient in the exercise of the
<br />rights and privileges granted, subject to the conditions herein provided.
<br />PART H. TERMS AND CONDITIONS
<br />Sec. 1. (a) RENTAL RATE - Lessee must pay lessor rental
<br />annually and in advance for each acre or fraction thereof
<br />during the continuance of the lease at the rate of $3.00 for
<br />each lease year.
<br />(b) RENTAL CREDITS - Rental will not be credited
<br />against either production or advance royalties for any year
<br />Sec. 2. (a) PRODUCTION ROYALTIES - The royalty will
<br />be 12.5 percent of the value of the coal for surface mining,
<br />and 8.0 percent of the value of the coal for underground
<br />mining as set forth in the regulations. Royalties are due to
<br />lessor the final day of the month succeeding the calendar
<br />onth in which the royalty obligation accrues.
<br />(b) ADVANCE ROYALTIES - Upon request by the lessee,
<br />the BLM may accept, for a total of not more than 20 years,
<br />the payment of advance royalties in lieu of continued
<br />operation, consistent with the regulations. The advance
<br />royalty will be based on a percent of the value of a
<br />minimum number of tons determined in the manner
<br />established by the advance royalty regulations in effect at
<br />the time the lessee requests approval to pay advance
<br />royalties in lieu of continued operation.
<br />Sec. 3. BONDS - Lessee must maintain in the proper office
<br />a lease bond in the amount of $5,000. The BLM may
<br />require an increase in this amount when additional coverage
<br />is determined appropriate.
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