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E. 1'he nigh[ a[ any time wgrant aright-of--way in, on, upon, over, under, across cr through all or any part of
<br />the Leased Premises for any ditch, reservoir, railroad, communication system, electric powerline,
<br />pipeline, schoolhouse or other lawful purpose. Such grants shall be subordinate to the rights of Lessee,
<br />including the right m subside [he surface of the Leased Premises 8nd shall provide that any and all
<br />damages caused to any structures or improvements placed upon the surface of [he Leased Premises
<br />subsequent to the date hereof shall be repaired by and at the expense of the party to whom the easement
<br />or right-of-way was granted. If the grant of such rights shall unreasonably interfere with Lessee's rights
<br />heretmder, the implementation or effectiveness of the grant of such rights shall be delayed until such time
<br />us [here is no interference with Lessee's rights.
<br />I'. The right a[ any time m place [he Leased Premises into [he Stewardship Trust as set forth in Section
<br />10(1)(b)(I) of Article IX, of the State Constitution. Said placement into [he Stewardship Tmst shall be for
<br />masons nut inconsistent with [he rights and privileges of Lessee.
<br />1'U HAVE AND TO BOLD the above-described Leased Premises unto Lessee, its heirs, successors, assigns, or
<br />legal representatives for a Primary Term of five years, and a Secondary Tetm of twenty-five years, until Twelve
<br />O'rloch noon on the 27~ day of Aueus[ ?009, subject to compliance with the royalties, rentals, and ocher terms,
<br />conditions, and agreemrnr of this Lease, and provided that coal is being produced in paying quantities from the
<br />LeaseU Premises or from th_ Adjacent Lands during the Secondary Term.
<br />ADVANCE MINIMUM ROYALTI_ -- As minimum and advance ro al , withc:rl relation to the amount of
<br />coat mined from the Leased Premises, Lessee shall pay a total o m three equal annual payments of
<br />$40,000.00 in advance to Lessor brei:tning on the second anniversary of t e issuance of the roclama[ion permit
<br />issued by the Division of Mi :erals and Geology.
<br />Acreage changes resulting from panial surrender or partial assignment will not reduce [he advance
<br />minimum royalty proportionately. if the Lessee does not extract coal from [he Leased Premises sufficient to
<br />return to Lessor [he minimum amounts above specified, it is nevertheless understood that the above sums of
<br />money are tine and payable to Lessor whether or not coal is mined, but that suoh advance minimum royalty
<br />shalt be credited upon the £tst royalties due as herein provided for coal actually produced from the Leased
<br />Premises. In the absence of production in paying quantities before the expiration date of the Lease, all advance
<br />minimum royalties end all rent is shall be forfeited to Lessor.
<br />i •
<br />[n ;ase of assignment of this Lease, all advance minimum royalty paid to Lessor shall be carried forward
<br />and credit:~d to the assignee.
<br />Z. PRODUC fiON ROYALTY, -- Durcg the term of [his Lease, Lassor hereby reserves, and Lessee agrees to pay
<br />w Lessor, as production ro, ulry fi:r coal mined, removed, sold, and shipped from the Leased Premises the
<br />following:
<br />Por coal removed by un;er~ :and mining methods, a sum equal t percent of the Gross Ssle
<br />Yrice (as herein defined) a[ L':e ftrsC point of sale; for coal removed by s tp mining met ods, a sum equal to
<br />oercen*. of the Gross Sale Price at the first puirt o: sale; and for lignite removed
<br />by strip mining me[ ods, a s m aeon r ~ercent~cf the Gross Sale Price at the
<br />firs[ point of sale, for each and every ton 00 lbs.) of coal or lignite mined from the Leased Premises. In the
<br />event the coal or lignite mined 6y either underground or strip mining methods is Bald on a captive market, a sum
<br />equal [o i c same respective pereerta.of the reasonable market value of con'. or lignite of the same quality frmn
<br />the same general area and mined under the same general conditions, whichever is greater, 1n no cast shall the
<br />production royalty to Lessor he less than per ton. "L;aite" means coal having an
<br />average rzlurific value of 1,300 btu ~ or less per poun . Thts value may be negotiated between Lessen and
<br />Lesser.
<br />For the purpose of this Lease, the "Gross Sale Price' shalt be the "Average Gross Sates Price" per ton of
<br />coal actually mined, removed, 'sold and shipped from [he Leased Premises during any month which shall be an
<br />amoum egttal to the .oral gross procr~:ds from all such sales of such coal during such month divided by the total
<br />number of tons of such coal, except that deductions shall be made-from fie total gross proceeds for the
<br />following items to the extent include 1 in such total gross proceeds: (i) transportation or delivery costs incurred
<br />by Lessee in transposing such con! Com the Division of Minerals & Geoloey ~petmit boundary to point of salt.;
<br />and (ii) any direct costs actually incurred in washing the coal, no[ to excee~ per con (such last deduction
<br />heminaftzr called the "Washing Deduction").
<br />At any time during :he :enn of this Lease, Lessor shall have the right':o provide Lessee written notice
<br />. that lessor wishes to renegoG~t[e tar; Washing Deduction. As soon as is reasonably practicable after Lessee's
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