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Par[ II. TERMS AND CONDITIONS
<br />Sec. I. (a) RENTAL RATE -Lessee shall pay lessor rental
<br />annually and in advance for each acre or fraction thereof during
<br />the continuance of the lease at the rate of $3.00 for each lease
<br />year.
<br />(b) RENTAL CREDITS -Rental shall not be credited
<br />against either production or advance royalties for any year.
<br />Sec 2. (a) PRODUCTION ROYALTIES -The royalty shall
<br />be 8.0 percent of the value of the coal as set forth in the
<br />regulations. Royalties are due to Lessor the final day of the
<br />month succeeding the calendar month in which [he royalty
<br />obligation accrues.
<br />(b) ADVANCE ROYALTIES -Upon request by the
<br />Lessee, the authorized officer may accept, for a total of not more
<br />than 10 years, the payment of advance royalties in lieu of
<br />continued operation, consistent with [he regulations. The
<br />advance royalty shall be based on a percent of the value of a
<br />minimum number of tons determined in the manner established
<br />by the advance royalty regulations in effect at the time fhe Lessee
<br />requests approval to pay advance royalties in lieu of continued
<br />operation.
<br />Sec, 3. IIONDS -Lessee shall maintain in the proper office a
<br />lease bond in the amount of $3,833,000. The authorized officer
<br />may require an increase in this amount when additional~coverage
<br />is de[entrined appropriate.
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<br />Sec. 4. DILIGENCE -This lease is subject to the conditions of
<br />diligent development and continued operation, except That these
<br />conditions are excused when operations tinder the lease are
<br />interrupted by strikes, the elements, or casualties not atCributab]e
<br />to the Lessee. The lessor, in the public interest, may suspend the
<br />condition of continued operation upon payment of advance
<br />royalties in accordance with the regulations in existence at the
<br />time of the suspension. Lessee shall submit an amended
<br />operation and reclamation plan pursuant to Section 7 of the Act
<br />(30 U.S.C. 207(c) within 3 years of the date of modification or
<br />prior to approval [o commence mining operations. I
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<br />Lessor reserves the power [o assent to or order the suspension of
<br />the terms and conditions of this lease in accordance with, inter
<br />ilia, Section 39 of the Mineral Leasing Act, 30 U.S.C. 209.
<br />Sec. 5. LOGICAL MINING UNIT (LMU) -Either upon
<br />approval by the lessor of the lessee's application or at the
<br />direction of the lessor, this lease shall become part of an LMU,
<br />subject to the provisions set forth in the regulations. The
<br />stipulations established in an LMU approval in effect at the time
<br />of LMU approval or modification will supersede the relevant
<br />inconsistent terms of this lease so tang as the lease remains
<br />committed to the LMU. If [he LMU of which this lease is a part
<br />is diszolved, the lease shall then be subject `~ the lease terms
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<br />which would have been applied if [he lease had not been included
<br />in an LMU.
<br />Sec. 6. DOCUMENTS,EVIDENCEANDINSPECTION-At
<br />such times and in such form as Lessor may prescribe, Lessee
<br />shall furnish detailed statements showing theamounts and quality
<br />of all products removed and sold from the lease, the proceeds
<br />therefrom, and the amount used for production purposes of
<br />unavoidablylos[.
<br />Lessee shall keep open at all reasonable times for the inspection
<br />of any duly authorized officer of Lessor, the leased premises and
<br />all surface and underground improvements, works, machinery,
<br />ore stockpiles, equipment, and all books, accounts, maps, and
<br />records relative to operations, surveys, or investigatioris on or
<br />under the teased lands.
<br />Lessee shall allow lessor access to and copying of documents
<br />reasonably necessary to verify Lessee compliance with terms and
<br />conditions of the lease.
<br />While this lease remains in effect, information obtained tinder
<br />this section shall be closed to inspection by the public in
<br />accordance with the Freedom of Information Action (5 U.S.C.
<br />552).
<br />Sec. 7. DAMAGES TO PROPERTY AND CONDiJCT OP
<br />OPERATIONS -Lessee shall comply at its own expense with
<br />all reasonable prders of the Secretary, respecting diligent
<br />operations, prevention of waste, and protection of other
<br />resources.
<br />Lessee shall not conduct exploration operations, other than
<br />casual use, without an approved exploration plan. All
<br />exploration plans prior to the commencement of mining
<br />operations within an approved mining permit area shall be
<br />submitted to the authorized officer.
<br />Lessee shall carry on all operations in accordance with approved
<br />methods and practices as provided in the operating regulations,
<br />having due regm'd for the prevention of injury to life, health, or
<br />property, and- prevention of waste, damage or degradation any
<br />land, air, water, cultural, biological, visual, and other resources,
<br />including mineral deposits and formations of mineral deposits
<br />not leased hereunder, and to other land uses or users. Lessee
<br />shall tales measures deemed necessary by lessor ro accomplish
<br />the intent of this lease term. Such measures may include, but not
<br />limited to, modification to proposed siting or design of facilities,
<br />timing of operations, and specifications of interim and final
<br />reclamation procedures. Lessor reserves to itself the right to
<br />lease, sell, or otherwise dispose of the surface or other mineral
<br />deposits in the lands and the right to continue existing uses and to
<br />authorize future uses upon a' in [he ]eased ]ands, including
<br />issuing leases for mineral deposits not covered hereunder and
<br />approving easements or rights-of-way. Lessor shall condition
<br />such uses to prevent u»^ecessary or um'easonable interference
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