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<br />~~'~ atmj STATE OF COLORADO
<br />cttr. sin, vet, vazl
<br />STATE BOARD OF LAND COMMISSIONERS
<br />COAL MINING LEASE NO. 590/13-5
<br />ISSUED IN LIEU OF EXTENSION OF COAL MINING LEASE N0. 454/13-5.
<br />Containing 320.00 acres, more or less: Land Furl: School
<br />f
<br />THIS COAL MINIIJG LEASE, Made in duplicate and emered into this 18th ~,y of June Iq 85 ,
<br />by and between the State of Colorado, acting through its STATE BOARD OF LAND COMMISSIONERS, hereinafter rcferted ro az Lessor.
<br />and ai ter Creel Cnrporati on
<br />9400 Cherry Avenue. Fontana. California 92335 ,
<br />hereinafter referred to az Lessee:
<br />WfINESSETH: Lessor, for and in consideradon of the stun of Three hundred thirty-four and 25/100 - - - -
<br />- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Dollars (E 434.24 ).
<br />receipt of which is hereby acknowledged as payment of fding fee in the amoum of S 14.24 ,first year's
<br />rcn[ in the amount of 5 320.OU and a bonus in the amount of S -0- .and in
<br />further consideration of Lessee's agreement w pay One and No/100 Dollar(s) (S 1.00 )
<br />per acre annually az rental in advartce of the anniversary date of this lease so long az said lease shall remain in effect and in further consideration
<br />of the [ertns and cotditions hereinafter stared, and of the payments of royalties reserved herein. to be kept and performed by Lessee, its successors
<br />and assigns, does hereby lease to Lessee the right and privilege of exploring and prospeeing for, and muting of and taking coal from the lands hereinafter
<br />described, situate, lying and being in the County of Las Animas ,State of Colorado, to-wit:
<br />ACRES SUBDIVISION SEC. TWP. RGE. PATENTS
<br />320.00 N/2 16-30S-65W None
<br />Lessee shall have the right to use az much of the surface thereof az may be reasonably required in the exercise of the right m mine coal, including
<br />strip mining, and the reasonable ngh[ to [ogress and egress: the right to construe buddings, make excavanons, stockpiles, dumps, dravu, roads, railroads,
<br />power lines. pipelines and other vnprovemenu az may be necessary in the mining and removal of said coal; subject, however, to all existing easemems
<br />and rightsof-way of third parties, and the rights of surface lessors and surface patenreu, and further subject to the [eons, conditions std royalties
<br />set out in this lease. The above-mentioned rights may be exercised in connection with the muting of coal from other or adjau:nt lands only when rttiaing
<br />on such lands is carried on in conjunction with the actual mining of coal on the land herein leased.
<br />RESERVBJG, however, to the State of Colorado:
<br />A. All rights and privileges of every kind and nature, except az are herein specifically granted.
<br />B. The right to use or lease said premises or any part thereof at any time for any purpose, including the right m explore and prospect said premises
<br />other than the locating of coal deposes, which use and leasing of said premises shall be for purposes other than and rot inconsistent with
<br />the rights and privdeges harem specifically granted.
<br />C. The right to dispose of or lease the surface.
<br />D. The right at all times during the life of this lease to go upon said premises and every part thereof for the purpose of inspecting same, and
<br />the books of accounts and records of mineral workings therein, and of ascerravting whether or no[ said Lessee and those holding thereunder
<br />by and from it, are carrying out the terms, covenants and agreements in this lease contained.
<br />TO HAVE AND TO HOLD The above-0escribed prcrtuses. with the appurtenances. unto Lessee, its heirs, successors signs, or legal representa-
<br />tives from '[helve O'clock noon on the 18th ~,y of June 19 8~ ,for die toll term of
<br />fin, ( 10 )years, and uirtil Thelve O'clock noon on the 18th day of June 1g9S-, and,
<br />except az hereinafter stated, az long thereafter az coal h being produced in paying quantities from said premises. and the royalty and reins provided
<br />for herein, or by any extertsion hereof, arc being paid, subject to the following terms, conditions and agreements, [o-wit:
<br />I . ADVANCE MINNSUM ROYALTY - As minimum and advance royalty. without relation to the amount of coal mined from the leased premises.
<br />Lessee shall pay to Lusor the folowing amoums:
<br />LEASE YEAR ADVANCE MINEv1UM ROYALTY LEASChYEAR ADVANCE eMINIMUM ROYALTY
<br />1St S10 per BCre 6 S10
<br />2r~ S10 per acre 7th er acre
<br />3rd S10 per acre 8th 10 er acre
<br />4th S10 per acre 9th 10 er acre
<br />4th S10 net acre 10th S10 Der acre
<br />Acreage changes resddng from surrender or partial assignment may reduce the advance minimum royalty Proportionately.
<br />Further, at the end of each five-year period. Lessor may change the rate or amount of advance minimum royalt~'to be paid by Lessee. U the
<br />event Lessee shall nor extract coal from the leased premises sufficiem to return w the State the mudmum amounts above specified, it is nevertheleu
<br />understood [hat the above sotto of money are due and payable to Lessor whether or not coal is mined, but that such advance rtunimum royalty
<br />shall be credited upon the fast royalties due az hereinafter provided for coal actually produced from said prerttius.
<br />2. FORFEITURE OF ADVANCE MIIJIMIJM ROYALTY- N the absence of production of coal in continuous paying quantities before the
<br />expiration dare of tM lease, all advance minimum royalties and all rentals shall be forfeited to the Stale.
<br />3. EXTENSION -Lessee may have a prcferev[ial right to rcmw the lease or to receive a rcw lease, whichever may be determined by Lessor to
<br />be in the bee interest of the State, under one or more of the fogowing condidorts:
<br />A. An advance mfnnm.~n royalty, the amount m be negotiated before expiration of the lease, will be comvtuau until the end of the second ten-year
<br />term of the leax, or umil the expiration of the new lease. This smarm may be adjusted az the end of each five-year period of the lease.
<br />B. Lessee sball ftumslt m Lessor saticfxtory evitkm of plain for mining during the semod teo-year term or during the tertyear term of a ttesv Imx tx;
<br />~, C. Ftrrtrish adequate geological evidence to Lessor that the acreage leased is in fact an integral part of and contains reserves in a logical carting
<br />- unG. Fiml dtxermimtion az to whether the atrmge u or u rte a part of a logical mining trait will be made by I.e+eor. '
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