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<br />Part H. TERMS AND CONDTTIONS
<br />Sec. 1.(a) RENTAL RATE-Lessee shall pay Lessor rentalawually and in
<br />advance for each acre or fraction thereof during the continuance of the lease
<br />az the rate of 33.00 for each lease yeaz.
<br />(b) RENTAL CREDITS -Rental shall trot be credited against either
<br />production or advance royalOes for any yeaz.
<br />Sec. 2.(a) PRODUCTION ROYALTIES -The royalty shall be 8.0 percent
<br />of the value of the coalas set forth in the regulaions. Royalties are due m
<br />Lessor the final day of the month succeeding the calendaz month in which
<br />the royalty obligation accmes.
<br />(b) ADVANCE ROYALTIES -Upon request by the Lessee, the
<br />authorized officer [nay accep4 for a mtal of not [Wore than 10 years, the
<br />pay~rtt of advanix royalties in lieu of continual operation, consisteatwith
<br />the regulations. The advance royalty shall be based on a percent of the
<br />value of a mioimumnumber oftona-determioed in the manner established
<br />by the advance royalty regulations in effect az the time the Lessee requests
<br />approval m pay advance royalties in Geu of continued operation.
<br />Sec. 3. BONDS -Lessee shall maintain in the propecoffice alease bond in
<br />Ole amount of t'!, 39yp:uThe authorized officer may require ah knaeasein
<br />this amount when additional wverage is determined appropriate.
<br />Sea 4. DILIGFIVCE -This lease is subject m the conditions of diligent
<br />developtrumt and centumed operaOon, accept thaz these cendiOans arc
<br />accused when operations under the lease are interrupted by strikes, the
<br />elements, or casualties not attributable to the Lessee. The lessor, in the
<br />-=public in(eres4 mayysuspend thecondition bf contnbed operation upon
<br />payment of advance royalties in accordance with the ~reguladons m
<br />existence az the time of the suspension feuers failure m produce Foal in
<br />commercial quantifies by October 1, 2008. shall Mnn;narr the lease. Lessee
<br />shall submit an amended operation and reclantatioa plan pursuant to
<br />Section 7 of the Act (30 U.S.C. 207(c) within 3 yeas of the date of
<br />modification or prior m approval m commence minbtg operafions
<br />The Lessor reserves the power to assort m or order the suspension of the
<br />terms and conditions of this lease is accordance with, inter is Section 39
<br />of the Mineral Leasing Act, 30 U.S.C. 209.
<br />Sec. 5. fAGICAL MINING UNIT (LMU) -Either upon approval by the
<br />Lessor of the Lessee=s application or az the direction oP the Lessor, this
<br />lease shag become an LMU orpart ofan LMU, subject m lheprovisiens set
<br />forth in [he regulations. ThestipuladonsestablishedmanLMUapprovalin
<br />effect at rite time of LMU apptoval.or modification wBl snpersede.lhe_
<br />relevant inconsistent terms of this leax so long as the leau remains
<br />cemmitted m the I.MI). If the LMU of which this lease is a part is
<br />dissolved, the lease shall char be subject to the lease terms which would
<br />have been applied if the lease had sot been included in an LMU.
<br />Sec. 6. DOCUMENTS, EVIDENCE AND INSPECTION - At sudt times
<br />and in such form as Lessor may prescribe, Lessee shall furnish derailed
<br />stazemenis showing the amounts and quality of all products removed and
<br />sold from the ]ease, the proceeds Oterefiam, and the amomt used for
<br />production purposes m unavoidably Itut
<br />Lessee shall keep open at all reasonable times for Ole inspection of any dtdy
<br />authorized officer of Lessor, the leased premises and all surface and
<br />underground improvements, works, tnaclnnery, ore stockpiles, equipment,
<br />and aO~books, accounts, maps, and records relative m operations, surveys,
<br />or investigations on or under the leased lands.
<br />Lessee shall allow Lessor access [o and copying of documents reasonably
<br />necessary to verify Lessee compliance with terms and conditions of the
<br />lease.
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<br />While this lease remains in effect; infermatign optained under this sectlon
<br />shall be closed m inspecion by thepubEc"niaccord'ance with the Freedom of
<br />Informaioo Actloa (5 U.S.C. 552).
<br />Sec. 7. DAMAGES TO PROPERTY AND CONDUCT OF OPERATIONS-
<br />I.essee sha0 comply az its own expense with all reasonable orders of the
<br />Secretary, respecting diligent operztions, prevenion of waste, andprotection
<br />of other resources.
<br />Lessee shall not conduct exploration operations, other than casual use,
<br />without an approved exploration plan. All explorafion plans prior~to the
<br />commencement of mining operations within an approved mining permit azea
<br />shall be submitted to the authorized officer.
<br />Lessce shag carr3' on all operations in accordance with approved methods
<br />and practices as provided in the operating regulations, having due regard for
<br />the prevention of injury m life, health, or property, and prevention of waste,
<br />damage or degradation any land, air, wets, cultural, biological, visual, and
<br />odter resources, including mineral deposits and formations of mineral
<br />deposits not leased hereundtt, and'to other ]ate »seSot usefs. Lessee shag
<br />take m.a~ < dcemed necessary by Lessor,m accomplish the intent of this
<br />lease term. Such measures may include, but not limited m, modification to
<br />proposed siting or design of facilities, timing of operations, and
<br />specifics[ionsofintetimandfiaalreclamationpmadures. Lessorteservesto
<br />itself the right to ]ease, sell, or otherwise dispose of the surface or other
<br />mineral deposits in the lands and the right m continue existing uses and to
<br />authorize future uses upon or in the leased lands, incNding issuing leases for
<br />mineral deposits not covered hereunder and approving °c~..ts or rights-
<br />of-way. ~ Lessor shall condition such uses to prevent unnecessary or
<br />unreasonable interference with rights of Lessee as may be consistent with
<br />concepts of multiple use and awldple mineral developmen4
<br />Sec. 8. PROTECTION OF DIVERSE INTERESTS, AND EQUAL
<br />OPPORTUNITY -Lessee shall: ~ pay when due all taxes legally assessed and
<br />levied under the laws of the State or the United States: accord all employees
<br />complete freedom of purchase: pay all wages az least twice each month in
<br />lawful money of the United States: maintain a safe working environment in
<br />accordance with standard industry practices; restrict the wodcday m nottnore
<br />than 8 hours in a~ one day for underground workers, except in emerge»ces:
<br />and take measures necessary to protect the health amt safety of Ole public.
<br />No person order the age of 16 years shall be employed in any mhte below the
<br />surface. To the extent that laws of the State in which the lands ate situated
<br />aremore restrictive than the provisions in this paragraph, then the State laws
<br />aPP1Y~
<br />Lessee will comply with all provisions of Executive Order No. 11246 of
<br />September 24, 1965, as amended, and the roles, regulations, and relevant
<br />orders ofOteSeeretaryofLabor. Neitherl~sacenorLessee'ssubcontrac[ors
<br />shag maintain segregated facilites..
<br />Sec. 9.(a) TRANSFERS -This lease may be transferred in whole or in part
<br />many person, association or corporation qualified to hold such lease interest.
<br />Transfers of record title, working or royalty interest must be approved in
<br />accordance with the regulations '',
<br />(b) RELINQUISfAfENTS -The Lessee may relinquish in writing at
<br />any time all rights under this lease or soy portion thereof as provided in the
<br />regulations. Upon Lessor's acceptance of the relinquishment, lessee shag be
<br />relieved of all future obligations under the lease or the refintptisbed portion
<br />thereof, whicheveris applicable. ~,
<br />Sec. 30. DELIVERY OF PREMISES, REMOVAL OF MACHIIdERY,
<br />EQUO?MFNf, ETC. - At such times as aO portiens of this lease are rammed
<br />to Lessor, Lessee shall defiver up to Lessor the land leased. underground
<br />timbering, and such other supports and structures necessary for the
<br />preservation of the mine workings on the leased premises or deposits and
<br />place all workings in condition for suspension or abandonment Within 180
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