Laserfiche WebLink
(30) days before the end of the initial five (5) <br />year term, to extend and renew this lease for a <br />successive term of five (5) years, provided strip <br />mining is being performed on the leased premises at <br />the end of the initial five (5) year term. In the <br />event that such option is so exercised by American <br />Fuels, CbU reserves the right to reasonably adjust <br />the production royalty rate for the ensuing five <br />(5) year term. <br />2. ROYALTY PAYMENTS <br />a) Quality Coal <br />American Fuels agrees to pay CbU a production <br />royalty for coal mined or recovered from surface <br />materials in the amount of Two Dollars ($2.00) per <br />ton of 2,000 pounds of quality merchantable coal, <br />except as provided in (c) below. <br />b) Computation of Royalty Payment <br />Royalty payments shall be computed from and com- <br />mence with the effective date of this lease for the <br />ensuing 12-month period, with each succeeding 12 <br />months thereafter constituting a year. The effect- <br />ive date of this lease shall be November 9, 1982. <br />c) Increased Royalty Payment <br />Royalty payments as provided for in (a) and (b) <br />above will be applicable to this lease agreement <br />until or unless the market price at the minehead <br />reaches $19.00 per ton of 2,000 pounds for quality <br />coal. Zf and when the market price reaches $19.00 <br />per ton for such coal, the royalty is changed here- <br />under to thirteen percent (138) of said market <br />price and shall continue at the 138 rate until such <br />time, if ever, that the market price falls below <br />$19.00 per ton, at which time the royalty rate <br />shall revert to $2.00 per ton. <br />d) Basis of Royalty Payment <br />The royalty payment contemplated in this Agreement <br />will become due at the time coal is sold by <br />-3- <br />