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E. The right at any time to grant aright-of--way upon, over or across all or any part of said premises for any ditch, reservoir, railroad, communication system, electric powerline, pipeline, schoolhouse or other lawful purpose; but that such grants shall be subject to the rights of Lessee. TO HAVE AND TO HOLD The above-described premises unto Lessee, its heirs, successors, assigns, or legal representatives for the term of en ]0 years, and until Twelve O'clock noon on the ~ day of arch, 2002, and, except as hereinafter stated, as long thereafter as coal is being produced in paying quantities from said premises, and the royalties and rentals provided for herein aze being paid, or by any. extension hereof, subject to the following terms, conditions and agreements, to-wit: 1. ADVANCE MINIMUM ROYALTY - As minimum and advance royalty, without relation to the amount of coal mined from the leased premises, Lessee shall pay annually in advance to Lessor the following amounts: LEASE YEAR ADVANCE MINIMUM ROYALTY 1st $10/advr 2nd $]0/adyr 3rd _ $70/adyr 4th $10/advr 5th $10/adyr LEASE YEAR 6th ' 7th 8th 9th 10th ~VANCE MINIMUM ROYAL ~10ladyr ~10ladyr 10/ac/yr 10ladvr .10/adyr Royalty due for coal produced from said premises shall be credited against such advance minimum royalty until the total sum is equal to the advance minimum royalty previously paid to the State, at which time a regular monthly royalty will be due and payable as herein provided. In the event Lessee does not extract coal from the leased premises during the primary term or any additional term so agreed to by Lessor, the minimum amounts above paid to the State will be forfeited. Acreage changes resulting from surrender or partial assignment may reduce the advance minimum royalty proportionately. Further, at the end of each five-yeaz period, commencing from the original lease date, Lessor may reasonably change the rate or amount of advance minimum royalty to be paid by Lessee. In case of assignment of this lease, all advance minimum royalty paid to the State shall be carried forwazd and credited to the new assignee. 2. PRODUCTION ROYALTY -Lessor hereby reserves and Lessee agrees to pay to Lessor as production royalty the following: For coal removed by underground mining methods a sum equal to eieht percent (~) of the gross sale price at the first point of sale; for coal removed by strip mining methods a sum equal to twelve and one half percent ( 12.5 % ) of the gross sale price at the first point of sale; and for lignite removed by strip mining methods a sum equal to six and one quarter percent ( 6. 52 .~) of the gross sale price at the first point of sale, for each and every ton (20001bs.) of coal or lignite mined from the leased premises, or, in the event the coal or lignite mined by either underground or strip mining methods is sold on a captive mazket, a sum equal to the same respective percents of the reasonable mazket value of coal or lignite of the same quality from the same general area and mined under the same general conditions, whichever is greater. All sums paid as production royalty shall be subject to review upon demand made by either party. In no case shall the production royalty to the State be less than one an Page 3 of 11