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<br />• COAL LEASE <br />THIS INDENTURE O~.LEASE made and entered into this ~ day of <br />~~-.err 198 E, by and between TONY SARVER and BAR BAR SARVER, of <br />Durango, Colorado, hereinafter Lessor, and LA PLATA COAL COkPORATIOH of <br />Durango, Colorado, lie reinafter referred to as Lessee. <br />WITNESSETH: <br />WHEREAS, Lessors are the owners of and have the right to mine and <br />remove coal underlying the following described real estate: <br />Townshi 35 North, Ranae I1 West, N.N.P.hI. <br />ectlon 2 N 2 h'1 4; h' 4N6' 4 <br />Section 29: SE/4NE/4; N2SE/4 <br />WHEREAS, Lessee desires to mine and remove coal underlying said real <br />estate upon the terms and conditions hereinafter set forth and Lessors <br />desire to lease the same to Lessee for said purpose, <br />NOW THEREFORE, in consideration of Seven Thousand Five Hundred Dollars <br />(57,500.00) to be paid to Lessors as set out below, and other valuable con- <br />• siderations, the receipt and sufficiency of which is hereby acknowledged, <br />Lessors hereby grant and Tease to Lessee the exclusive right to mine and <br />remove coal from the real estate described upon the following terms and <br />conditions: <br />• i) The consideration of the sum of Seven Thousand Five Hundred <br />Dollars (51,500.00) set out above shall be paid to Lessees or their lawful <br />agents upon execution of this Lease and shall be earnest money to ho)d this <br />lease for a term of five years with four automatic options to renew for five <br />(S) year periods as herein described. <br />2) This lease shall be in full force and effect for a period of <br />five (5) years from and after the date hereof and as much longer thereafter <br />as coal may he profitably produced, with automatic extensions of successive <br />five (5) year terms to a total of twenty (20) years for the leasehold. <br />3) Lessee shall pay to Lessors a production royalty of Fifty Cents <br />(50.50) per ton per one-fourth (1 /4) mineral interest for all coal mined and <br />shipped from the real estate described herein. Such production royalty <br />shall be payble no later than the 25th day of each month following the <br />calendar month in which such coal is mined, removed and shipped. In deter- <br />mining the royalties payable hereunder, railroad weights shall govern with <br />respect to coal shipped by truck, Lessee shall furnish Lessors with state- <br />ment showing the amount of coal mined, removed and shipped from the real <br />estate described herein during the preceeding calendar month with each pro- <br />duct ion royalty remittance. Such production royalty paynent and the produc- <br />LIGfi Sia Lrihi'nt Slicll hc' Gc{'~DS71c~ :0 ur ;;,r lfir cC C~LUt :;f LeS5 Gr5 ct SUCh <br />location as Lessees shall later designate ir, writing, payable to <br />~ar~Srn ~cr'rrr. and Lessee shall not be responsible for the proper <br />