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UNIT'-') STATES I <br />DEPARTMEi\ JF THE INTERIOR <br />r BUREAU OF LAND MANAGEMENT Serial Number: COC -0-023703-01 <br />LEASE <br />PART I. LEASE RIGHTS GRANTED <br />Lease Date: March 01, 1963 <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 March 01, 2013, 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 />T. 2 N., R. 101 W., 6th P.M. <br />sec. 1, lots 3 and 4, S'/sNW'/4, and SW%a; <br />sec. 2, lots 1 to 4, inclusive, S%zN'/z, and SE'/4; <br />sec. 3, lots 1 to 4, inclusive, S%N'/2, and SW'/<; <br />sec. 4, lots 1 to 4, inclusive, S'/zN%z, and S%. <br />T. 3 N., R. 101 W., 6th P.M. <br />sec. 32, S'/:SE%4; <br />sec. 33, S% S%z; <br />sec. 34, S''/, S%s; <br />sec. 35, S%sN'/ZSE'/4, and S'/z S'/2; <br />sec. 36, S%zSW'/4. <br />containing 2,597.22 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 II. TERMS AND CONDITIONS <br />Sec. 1. (a) RENTAL RATE - Lessee must pay lessor rental <br />Sec. 2. (a) PRODUCTION ROYALTIES - The royalty will <br />annually and in advance for each acre or fraction thereof <br />be 12.5 percent of the value of the coal for surface mining, <br />during the continuance of the lease at the rate of $3.00 for <br />and 8.0 percent of the value of the coal for underground <br />each lease year. <br />mining as set forth in the regulations. Royalties are due to <br />lessor the final day of the month succeeding the calendar <br />(b) RENTAL CREDITS - Rental will not be credited <br />month in which the royalty obligation accrues. <br />against either production or advance royalties for any year. <br />