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<br />i <br /> <br />~. <br />-., <br /> <br />further period of time until Lessee has completed mining, recovery and reclamation <br />operations on the Property or on lands within the Mining Unit. Mining activities shall be <br />consi tiered as having begun when overburden removal has started or when any entry to <br />the coal hasp been made. In the event mining activities are not commenced during The <br />Primary Term, Lessee shall have the right and optlai to extend the Primary Term for on <br />additional ten (10) year period and such further period of time until Lessee has completed <br />mining, recovery, and reclamation operatims on the Property or on lands within the <br />Mining Unit. Lessee shall notify Lessor in writing thirty (30) days prior to the expiration <br />of the Primay Term of its intention to extend the Primary Term. As consideration for <br />the extension, Lessee shall pay Lessor the extension payments set forth in that certain <br />"Ancillary Agreement to Coal Lease Amendment (Surface N' between Lessee and Lessor <br />bearing even date. The Terms and conditions of said Ancillary Agreement are incor- <br />porated herein by reference and are further made subject to all terms and conditions of <br />this Amendment and the Lease as the same may apply. <br />2. Royalties. For the coal and miningand operating rights and privileges herein <br />demised, Lessee covenants and agrees to pay Lessor royalties as more particularly set <br />forth in the above-referenced Ancillary Agreement. Payment of all royalties shall be <br />made by check and, for purposes of this Agreement, delivery thereof may be effectuated <br />by mailing same to the address of Lessor stated herein. Lessor shall promptly notify <br />Lessee in writing, sent by certified mail, of any change of address ~ change of ownership <br />by Lessor. If any payment of royalties is returned to Lessee by mail due to inability to <br />make delivery, then Lessee shall be entitled to hold same, free of interest and without <br />affecting the validity of this Lease, until Lessor shall contact Lessee in writing with <br />specific instructions. If at any time ownership of Lessor is transferred or divided, and if <br />Lessee is unable to satisfy itself as to whom and what amounts any royalties should be <br />paid or credited, Lessee may continue to effectuate payment hereunder by mailing <br />checks in payment thereof to Lessor in the name and at the address stated herein, until <br />Lessee shall have satisfied itself, upon the basis of relevant legal instruments, that o <br />payment method different from that stated above is authorized. <br />3. Mining Unit. It is understood and agreed that the Property may be taken, held, <br />or used in conjunction with coal mining operations by Lessee, its successors, sublessees or <br />assigns on other lands within a mining unit consisting of Sections 3, 9, 10, I I, 13, 14, I5, <br />16, 20, 21, 22, 23, 24, 25, 26, 27, 28, 33. 34 .and 35, Township 5 North, Range 88 West, <br />Routt County, Colorado ("Mining Unit"), and mining operations shall be deemed to be <br />commenced hereunder as soon as equipment is removing overburden in o pit on the <br />Property or within the Mining Unit a entry to coal is made on the Property or within the <br />-2- <br />