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~, <br />SURFACE USE AGREEMENT <br />THIS SURFACE USE AGREEMENT ("Agreement") is entered into and made effective <br />as of the 1st day of January, 2001 by and between Hill Ranch, a Texas limited partnership, <br />whose address is 3974-C Highway 67 West, Glen Rose, Texas 76043 ("Hill Ranch"), and <br />LORENCITO COAL COMPANY, LLC, a Colorado limited liability company ("Lorencito"), <br />whose address is 4422 Bryan Station Road, Lexington, Kentucky 405 ] 6. <br />RECITALS <br />WHEREAS, pursuant to a Deed of Exchange recorded on August 28, 2000, in the records <br />of the Las Animas County Recorder at Book 998, Page 276, Hill Ranch became the sole owner <br />of the surface of the Leased Lands (including sand, gravel and surface minerals); and <br />WHEREAS, Maxwell is the sole owner of the membership interests in Lorencito; <br />WHEREAS, Lorencito and Hill Ranch have entered into a Coal Lease Agreement (the <br />"Coal Lease") of even date herewith; and <br />WHEREAS, Hill Ranch and Lorencito desire to enter into this Agreement to clarify <br />Lorencito's rights to use the surface of the Leased Lands (as defined in the Coal Lease), as set <br />• forth below. <br />NOW, THEREFORE, for and in consideration of the promises and agreements contained <br />herein, and other good and valuable consideration, the receipt of which is acknowledged, the <br />parties agree as follows: <br />Grant of Access <br />Hill Ranch hereby grants access to Lorencito over the surface of the Leased Lands and those <br />other lands specifically referenced herein. Such access is limited to that which is reasonable and <br />necessary to the development of the coal. <br />2. Compensation <br />During the term of this Agreement as compensation for the diminution of mazket value caused <br />by surface mining, Lorencito shall pay Hil] Ranch~Dollars ($~) per acre of Leased <br />Lands, to be paid annually in advance, on or before January 10 (but not before January 1) of each <br />year beginning on or before January 10, 2002. Hill Ranch hereby acknowledges that Lorencito <br />has paid Hill Ranch upon signing this lease the sum ofSDollazs per acre of Lease Lands for <br />the yeaz 2001. Such payments shall continue until Lorencito has completed Phase I reclamation <br />on any of the Leased Lands, and upon the issuance of a certificate of completion of Phase I <br />reclamation, any and all acreage covered by that completion shall be released from the <br />calculation of the amount due at the next payment date under this pazagraph (January of the year <br />• following receipt of the certificate of completion of Phase I reclamation). Payments under this <br />paragraph are compensation to Hill Ranch for the diminution in mazket value of the surface of <br />SURFACE AGRT FINAL 625-0IAoe 1, /~/O <br />