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Requested By: s ib 03/2812008 <br />Instruseat Book Rase <br />200800696948 OR 1075 1937 <br />B. The right to use or lease the Leased Premises or any part thereof at any time for <br />any purpose, including the right to explore and prospect said premises for <br />minerals other than coal. The use and leasing of said premises shall be for <br />purposes other than and not inconsistent with the rights and privileges herein <br />specifically granted. <br />C. The right to dispose of or lease the surface above the Leased Premises where <br />Lessor is the surface owner. <br />D. The right at all times during the life of this Lease to go upon the Leased Premises <br />and every part thereof for the purpose of inspecting same, and the books of <br />accounts and records of mineral workings therein, and of ascertaining whether or <br />not said Lessee and those holding thereunder by and from it, are carrying out the <br />terms, covenants and agreements of this Lease. <br />E. The right at any time to grant a right -of -way upon, over or across all or any part of <br />the Leased Premises as to which Lessor is the surface owner for any ditch, <br />reservoir, railroad, communication system, electric powerline, pipeline, <br />schoolhouse or other lawful purpose. Such grants shall be subordinate to the <br />rights of Lessee, including the right to subside the surface of the Leased Premises, <br />and shall provide that any and all damages caused to any structures or <br />improvements placed upon the surface of the Leased Premises subsequent to the <br />date hereof shall be repaired by and at the expense of the party to whom the <br />easement or right -of -way was granted. If the grant of such rights shall <br />unreasonably interfere with Lessee's rights hereunder, the implementation or <br />effectiveness of the grant of such rights shall be delayed until such time as the <br />interference with Lessee's rights is minimized. <br />TO HAVE AND TO HOLD the above described premises unto Lessee, its heirs, <br />successors, assigns, or legal representatives for the term of 20 years from the Effective Date of <br />this Lease (the " Primary Term "), and subject to automatic extension pursuant to Section 6 below <br />for so as long as coal is being produced in paying quantities (as defined in Section 6, below) <br />from the Leased Premises, subject to compliance with the royalties, rentals, and other terms, <br />conditions, and agreements of this Lease. <br />1. ANNUAL RENT Lessee shall, within thirty (30) days of the Effective Date of this <br />Lease, pay the State an amount equal to $3 per acre (which totals $46,658.40) as the first <br />year's Annual Rent. Thereafter, Lessee shall pay to Lessor Annual Rent of an equal <br />amount ($46,658.40), provided, however, that (A) Lessee's obligation to pay Annual <br />Rent shall be suspended after the first year in which the Production Royalty received by <br />Lessor (including Annual Advance Minimum Royalty credited against Production <br />Royalty) exceeds the amount of the Annual Rent, but (B) Lessee's obligation to pay <br />Annual Rent shall be reinstated for each year following a year in which the Production <br />Royalty as described above does NOT exceed the amount of the Annual Rent. Annual <br />Rent shall be due to Lessor on the annual anniversary of the Effective Date of this Lease. <br />Once paid, all Annual Rent payments shall be retained by Lessor and shall not be repaid <br />to Lessee under any circumstance. <br />Page 3 of 17. <br />