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described 52 acres (Parcel A) for the surface rights and associated improvements on about 160 <br />acres of land (Parcel B) situated in: <br />Section 25, T47N R16W. N.M.P.M. <br />(i) E1/2 SW1 /4 a.k.a. San Miguel property, conditional on its sale to the Lessee by San <br />Miguel Power Association. <br />(ii) W1/2 SW1 /4 a.k.a. Rice Tract, owned by Lessee but subject to waiver of the "first <br />right of refusal to purchase" from Don and Mariana Rice. <br />Details of this trade are included in the Coal Mining Lease and Contract to Exchange Real Property. <br />3. Roy alties . Lessee shall pay to Lessor, as total payment for all of the benefits <br />secured by Lessee under or in connection with the Lease, production royalties as stated in the <br />Lease and Contract to Exchange Real Property. <br />4. Special Rights of Lessee. In addition to whatever rights Lessee may have by <br />implication of law or by the transfers of property hereunder, Lessor specifically grants to Lessee the <br />following exclusive rights ('Rights "). These Rights shall be in effect immediately on the execution <br />of the Lease and Contract by the parties: <br />(a) to drill, take core samples, survey, map and otherwise evaluate the Coal, and <br />to perform environmental and cultural resource studies, all without liability, except for the destruction <br />of growing crops and field improvements in the growing season in which the Property trade occurs. <br />(b) to mine, extract, remove, process, own, market or otherwise use the Coal, <br />including mining by the strip, auger and /or any other methods now or hereafter in existence, without <br />any liability to Lessor for any current or future damages (including surface support and damage or <br />loss to other minerals or strata) to Lessor's estate; <br />(c) Jn the event that sand or gravel are found on Parcel A during Lessee's mining <br />activities, Lessee shall have the right to use or sell such, however, Lessor will be due a royalty rate <br />of 5% of the revenues realized from any sale of this material. Lessee shall be entitled to use sand <br />or gravel without additional payment. <br />(d) Lessor may use the surface of the property for farming or any other use until <br />Lessee elects to exercise its Rights stated above. No provision of the Lease shall be construed to <br />deprive Lessee of the exclusive right to determine the uses to which the property is to be put after <br />mining, or the crops, if any, to be raised, or the methods to be employed and the costs to be <br />incurred as part of such after - mining uses. Before Lessee commences to exercise the Rights <br />E <br />Attachment 2.03.6 -1 -31 <br />