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• complies with the laws and Hill Ranch pays for costs over and above those
<br />required of Lorencito under the law and under this Lease.
<br />b. Lorencito agrees to hold harmless and indemnify Hills, and their respective
<br />affiliates, officers, directors, shareholders, partners, employees, agents,
<br />representatives, heirs, personal representatives, successors and assigns, from and
<br />against, Lorencito's Operating and Environmental Obligations and Liabilities.
<br />c. Lorencito's Operating and Environmental Obligations and Liabilities shall mean
<br />environmental and reclamation obligations, liabilities, claims, penalties or
<br />damages of any nature including without limitation damages for personal injury,
<br />disease and death, property damage, natural resource damage and punitive
<br />damage, administrative or judicial penalties or fines, accountants' fees,
<br />consultant's fees and attorneys' fees, related directly to the ownership, operation,
<br />maintenance, exploration, development and mining of the coal and the use and/or
<br />reclamation of the Leased Lands by Lorencito, its employees, agents and
<br />contractors and the successors and permitted assigns of Lorencito.
<br />d. Hill Ranch and Hills, to the extent of their interest in the Leased Lands, reserve
<br />the rights to use the Leased Lands, including subsurface strata, to prospect,
<br />explore and drill for, develop, mine, produce, process, store and transport from
<br />the Leased Lands minerals and mineral materials of any description, nature, or
<br />kind whatsoever known now or which may come to be known in the future,
<br />• including without limitation oil and gas, including all coalbed methane gas,
<br />gravel, sand and aggregate, excluding only the coal in the Leased Lands
<br />(collectively, "Other Minerals"). Lorencito agrees that the exercise of its rights
<br />under this Agreement shall not unreasonably interfere with the rights of Hills or
<br />Hill Ranch, and their respective successors, assigns, heirs, personal
<br />representatives, lessees, contractors and agents, to exercise the foregoing reserved
<br />rights. Hills agree that the exercise of their reserved rights with respect to Other
<br />Minerals shall not unreasonably interfere with the rights of Lorencito under this
<br />Agreement, beyond what is reasonable to extract such Other Minerals.
<br />e. Lorencito and Hills shall in good faith cooperate to develop procedures whereby
<br />the operations with respect to Other Minerals can be conducted concurrently with
<br />the mining by Lorencito. Each party shall give the other as much advance notice
<br />as is reasonably possible of proposed activities that aze likely to adversely impact
<br />the present or future recovery of their respective minerals. Nothing contained in
<br />this Lease shall be construed to limit the full development of the coalbed methane
<br />or the oil and gas.
<br />6. Concurrent Development
<br />a. The parties recognize that there is an oil and gas lease on the Leased Lands which
<br />includes the right of the lessee thereunder to extract coalbed methane. Lorencito
<br />shalt use reasonable efforts to ensure that development of the coal will occur with
<br />. due regazd for the rights of the oil and gas lessee, and Hills shall use reasonable
<br />COAL LEASE FMAL6-25-0I.doc
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