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<br />If any title defects which render the title unmazketable or adversely affect the Company' right to <br />mine are not cured within sixty (60) days after receipt of such notice, the Company, at its option, <br />may temrirrate this Lease without any further obligation to Lessors. The Company shall, as part of <br />such termination, have the right at its option to have any and all prepaid royalties not offset by <br />production royalties refunded to the Company. <br />C. Without regard to the warranties of title given to the Company by Lessors, <br />if Lessors own less than one hundred percent (100.%) of the Materials under all or any portion of the <br />Property, then the amounts payable to Lessors hereunder as advance minimum royalty payments and <br />production royalties shall be reduced in the proportion that the interest of the Lessors in the Materials <br />beazs to one hundred percent (100%) of the Materials under the Property. <br />D. Lessors covenant and agree to purchase and/or extinguish the oil and gas <br />lease to Gerber Energy Corporation, executed on May 19, 1981 and now assigned to Magpie Oil <br />Company, encumbering the Property and to cause to be removed any equipment or improvements <br />related to any oil and gas wells or operations on the Property. In this regazd, at such time as the <br />Company exercises the Option for this Lease, Lessor shall authorize and direct the Company to pay <br />directly to the oil and gas lessee such part of the $~ initial payment set forth in the initial <br />granting clause of this Lease as is required to obtain or extinguish the oil and gas lease. Lessors <br />thereafter shall not lease or otherwise authorize oil and gas rights or operations on the Property <br />during the term of this Lease. <br />E. The Property constitutes a legally subdivided lot or parcel, and no <br />subdivision approval or waiver or exemption therefrom is required from any state, county or <br />local authority in order for Lessors to lease the Property to the Company or agree to enter into <br />this Lease. Lessors shall not convey or agree to convey the Property or any parcel adjoining the <br />Property or any portion thereof unless such conveyance is in full compliance with all applicable <br />state and local subdivision statutes, laws, resolutions, ordinances and regulations. <br />12. Rieht of First Refusal. The Company may acquire the following preemptive right <br />at any time during the term of this Lease by paying to Lessors the amount of-percent (~o) of <br />the estimated royalty value of Materials (presently estimated at-or-tons) on the <br />Property. If at any time after payment for the preemptive right Lessors receive an offer to purchase <br />all or any portion of the Subject Property for a price that Lessors aze willing to accept, then Lessors <br />shall give Mobile notice of such offer and a copy of the offer, and Mobile shall have thirty (30) days <br />after receipt of such notice to elect to match the offer, and Mobile and Lessors shall thereafter close <br />the purchase and sale of the Subject Property or relevant portion thereof in accordance with such offer <br />or as they may otherwise agree. If the Company does not exercise its preemptive right hereunder, <br />Lessors shall thereafter be free to close the purchase and sale of the Property, subject to this Lease, <br />on terms no less favorable to Lessors than those submitted to the Company by Lessors, free and cleaz <br />of the Company's preemptive right for a period of 90 days after the Company failed to exercise the <br />right. If no such sale is closed within the 90-day period, this right of first refusal shall be revived in <br />the Company. <br />RECEIVED <br />6 <br />MAR 3 0 2000 <br />pivision of Minerals & Geolo";y <br />