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ste xn< tam> STATE OF COLORADO
<br />Otev. rm, slat. zrazt
<br />STATE BOARD OF LAND COMMISSIONERS
<br />COAL MINING LEASE NO.
<br />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: Lard Fund: School
<br />THIS COAL MINING LEASE, Made N duplicate and entered into this 18th day of June Ig 85 ,
<br />by and between the State of Colorado, acting through its STATE BOARD OF LAND COMMISSIONERS, hereinafter referred to az Lessor,
<br />and Kai car Ster_1 Cornorati on
<br />9400 Cherrv Avenue, Fontana, California 92335 ,
<br />hereinafter referred to az Lessee:
<br />WITNESSETH: Lessor, for and N consideration of the sum of Three hundred thirty-four and 25/100 - - - -
<br />--------------------------------- Dollars (S 334.25 ).
<br />receipt of which is hereby acknowledged as payment of (ding fee N the amoum of E 14.25 ,fast year's
<br />rent in the amount of S 3"L0.00 and a bonus in the amount of S -0- ,and in
<br />further consideration of Lessee's agreement to pay One and No/100 Dollar(s) (S 1.00 )
<br />per acre annually as rental N advance of the anniversary date of this lease so long az said lease shall remain N effect; and N further consideration
<br />of the terms and conditions hereinaker stated, 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 nigh[ and privilege of exploring and prospecting for, and mining 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 SUBDMSION SEC. TWP. RGE. PATENTS
<br />320.00 N/2 16-305-65W None
<br />Lessee shall have the right to use as much of the surface thereof az may be reasonably required in the exercise of the right to mine coal, including
<br />strip mining, and the reasonable right to ingress and egress; the right to construct buildings, make excavations, stockpiles, dumps, drains, roads. railroads,
<br />power lines, pipelines and other improvements az may be necessary in the mining and removal of said coal; subject, however, to all existing easements
<br />and rightsof-way of third parties, and the rights of surface lessees and surface patentees, and further subject to the [arms, conditions and royalties
<br />set out in this lease. The above-mentioned rights may be exercised N connection with the mining of coal from other or adjacent lands only when mining
<br />on such lands is carried on N conjunction with the actual mining of coal on the land herein leased.
<br />RESERVING, however, [o the State of Colorado:
<br />A. All rights and privileges of every kitd and nature, except az are herein specifically granted.
<br />B. The right to use or lease said premises or any part thereof at any tune for any purpose, including the nigh[ to explore and prospect said premises
<br />other than the locating of coal deposits, which use and leasing of said premises shall be (or purposes other than and not inconsistent with
<br />the rights and privileges herein 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 ascertaining whether or not 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 premises, with the appurtenances, unto Lessee, its heirs, successors signs, or legal representa-
<br />tives from Tvelve O'clock noon on the 18th day of June 19 $~ ,for the fitll term of
<br />Ton ( 1 D )years, and umil 7lvelve O'clock noon on the 1 8th day of June 1995__, and,
<br />except az hereinafter stated, az long thereafter az coal is being produced in paying quantities from said premises, and the royalty and rents provided
<br />for herein, or by any extension hereof, are being paid, subject to the following terms, conditions and agreements, to-wit:
<br />I. ADVANCE MIIYIMUM ROYALTY - As minimum and advance royalty, without relation to the amount of coal mined from the leased premises,
<br />Lessee shall pay to Lessor the following amounts:
<br />LEASE YEAR ADVANCE MINIMUM ROYALTY LEAgE YEAR ADV N E MINAUM ROYALTY
<br />1st $10 per acre 6th ~1 er acre
<br />7r,d 510 oar acre 7th er acre
<br />3rd S10 per acre 8th 10 er acre
<br />4th S10 per acre 9th 10 er acre
<br />Srh $~ner acre 10th 510 per acre
<br />Acreage changes resulting 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 royalty ro be paid by Lessee. U the
<br />event Lessee shall not extras coal from the leased premises sufficient to remm to the State the minimum amounts above specified, it is nevertheless
<br />understood that the above sums of money are due and payable to Lessor whether or not coal is mined, but that such advance minimum royalty
<br />shall be credited upon the first royalties due as hereinafter provided for coal actually produced from said premises.
<br />2. FORFEITURE OF ADVANCE MINIMUM ROYALTY - N the absence of produttion of coal in continuous paying quantities before the
<br />expiration date of the lease, all advance minimum royalties and all rentals shall be forfeited to the State.
<br />3. EXTENSION -Lessee may have a preferential right to renew the lease or to receive a new lease, whichever may be determined by Lessor to
<br />be in the best interest of the State, under one or more of the fo0owing mndidons:
<br />A. An advance ntirrimum royalty, the amoum to be negotiated before expiration of the lease, will be continuous until the end of the second ten-year
<br />term of the lease, or until the expiration of the new lease. This amoum may be adjusted at the end of each five-year period of the lease.
<br />B. Lessea shall furnish to Lessor satisfactory eviderra of plans for rttinutgduring the stxordten-yeartertn or during the fat-year term of a new lean or:
<br />C. Furnish adequate geological evidence to Laver that the acreage leased is N fact an integral part of and contairo reserves N a logical mining
<br />uait. Final ~+^*~•++++~•tion az m whether the acreage is or is na a part of a logical mining unit will be made by Lessor. '
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