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royalty provided In paragraph 4 herein. Per -ton royalties due shall be set off against the <br />minimum royalty paid until such time as per -ton royalties due for producUon in a g"Wen <br />Lease year exceed the minimum royalty paid. At chat time Lessee shall begin making <br />monthly payments on the first day of each ensuing month equal to the excess production in <br />the previous month. The minimum royalty for the first yearthis Lease shall b <br />The minimum royalty shall be adjusted each year in the <br />same manner as the per -ton royalty provided In paragraph 4.b and 4.c herein. <br />17. DEFAULT. if for any reason Lessee shall fail or refuse to comply with any <br />material terms or provisions hereof, and such failure continues for a period of sixty (Bp) <br />days after receipt of written notice by Lessor to Lessee specifying the nature and chareAer <br />of the default, then, at the option of Lessor, this Lease and all right of Lessee hereunder <br />shall be terminated and Losses shalt quietly and peaceably surrender the leased premises <br />to Lessor, provided, however that Lessorw ill notterminate.this tease if, through no fault of <br />the Lessee such failure is impractical to correct within the sixty-day period foliowing <br />Lessor's notice and if within such period Lessee commences and thereafter prosecutes <br />With continuity and diligence measures to correct such failure. <br />j 18. TERMINATION. During the term of this Lease, Lessee may tenninate the <br />Lease at the and of any Lease year by giving written notice to Lessor ninety (90) days <br />before the and of such Lease year. Upon such early germination, Lessee agrees to pay <br />Lessor any unpaid per -ton royalties due in excess of the minimum royaltyforthatyear, plus <br />the prorated minimum royalty that would have been due for the flretthrea (3) months of the <br />combg Lease year. Lessee shall also deliver to Lessor a recordable Instrument of <br />surrender. In the event o€termination of this Lease by expiration ofthe term hereof, orfor <br />any season whatsoever, Lessee agrees to surrenderthe leased promises to Lessorin good <br />condlion and in full compliance with the above-mentioned Special Use Perin, Mined Land <br />Reclamation Permit, and Emission Permit, and to cooperate v*h Lessor In keeping all <br />perinits in force and good standing until ra-transferred to Lessor or Lessor's designee can <br />be accomplished. Priorto the expiration of this Lease, or within nine[y (90) days thereaftr, <br />Lessee shall effect the removal of machinery, equipment and improvements placed by it on <br />E the leased premises. Any such moohinery,.equipment or Improvements not removed prior <br />to the expiration of ninety (90) days following termination of the Lease shall be deemed <br />affixed to the leased premises and-shafl become and remain the prop" of Lessor. <br />19. EXTENSIONS. Lessor, as additional consideration forthe royalties hereunder, <br />grants to Lessee the irrevocable option to extend this Lease under the sarin terns and <br />condylions for four (4) additional five (5) year periods. In the event of exercise of this <br />option, the annual adjustment In royalties shall continue in the some manner as during the <br />Primary term. Lessee shall give written notice to Lessor of its exercise of each option at <br />least six (B) months prior to the expiration of the primary or extended term of this Lease. <br />20. RIGHT OF FIRST REFUSAL. Lessor, as additional consideration for the <br />royalties hereunder, does grant to Lessee an Irmocable right offirst refusal to purchase a <br />w %ve <br />V�2 e// 41 Page 8 of 6 <br />