Common use of IN CONSIDERATION OF THE FOREGOING, THE LESSEE COVENANTS AND AGREES Clause in Contracts

IN CONSIDERATION OF THE FOREGOING, THE LESSEE COVENANTS AND AGREES. (a) BOND When the lease becomes an operating lease or actual operations for the mineral are to be commenced, the bond shall be furnished in such a reasonable amount as the Office of State Lands and Investments shall determine to be advisable in the premises. The operating bond shall preferably be a corporate surety bond, executed by the lessee, the surety being authorized to do business in the State of Wyoming. A cash bond may be furnished on the consent of the Office of State Lands and Investments if the lessee is unable to obtain a corporate surety bond. Form of bond will be furnished by the Office of State Lands and Investments. The State will require two executed copies of the bond, therefore as many additional copies should be made as will be required by the lessee and the bonding company. (b) PAYMENTS To make all payments accruing hereunder to the Office of State Lands and Investments, 000 Xxxx 00xx Xxxxxx, Xxxxxxxxx Xxxxxxxx, Cheyenne, Wyoming 82002-0600. (c) RENTALS Prior to the discovery of commercial quantities of coal in the lands herein leased, to pay the lessor in advance beginning with the effective date hereof, an annual rental of ONE DOLLAR ($1.00) PER ACRE OR FRACTION THEREOF PER YEAR for the 1st through the 5th year inclusive and TWO DOLLARS ($2.00) PER ACRE OF FRACTION THEREOF PER YEAR for the 6th through 10th years inclusive—or renewal thereof; provided, however, that if the said lands are not on a commercial mining basis and so operated at the end of two (2) years from the date hereof, such rental may be increased at the option of the lessor, to such an amount as the lessor may decide to be fair and equitable. After the discovery of commercial quantities of coal in the lands herein leased to pay to the lessor in advance, beginning with the first day of the lease year succeeding the lease year in which commercial discovery was made, an annual rental of TWO DOLLARS ($2.00) PER ACRE OR FRACTION THEREOF PER YEAR unless changed by agreement, such rental so paid for any one year to be credited on the royalty for that year. Annual rentals on all leases shall be payable in advance for the first year and each year thereafter. No Notice of Rental Due shall be sent to the lessee. If the rental is not received in this office on or before the date it becomes due, Notice of Default will be sent to the lessee and a penalty of 50¢ per acre or fraction thereof for late payment will be assessed. The lessee is not legally obligated to pay either the rental or the penalty, but if the rental and penalty are not received in this office within thirty (30) days after the Notice of Default has been received by the lessee, the lease will terminate automatically by operation of law. Termination of the lease shall not relieve the lessee of any obligation incurred under the lease other than the obligation to pay rental or penalty. The lessee shall not be entitled to a credit on royalty due for any penalty paid for late payment of rental on an operating lease. (d) ROYALTY To pay a royalty on all coal mined from the land herein leased, either in kind or value as the lessor may elect of 121/2% on coal mined by surface mining operations and 8% on coal mined by underground mining methods. Royalty shall be payable on the gross value at the mine on all coal mined. Gross value for the purpose of royalty calculation means the unit sale or contract price times the number of units sold. In calculating gross value the sales price shall be prima facia evidence of such gross value. No deduction shall be allowed for fees, taxes, assessments or similar levies imposed by the State of Wyoming, its political subdivisions, any other state or the federal government, nor for the expense of mining, processing and loading the coal in merchantable condition at the mine ready for shipment. If the coal is not sold and valued at the mine, transportation from the mine to the point of sale or delivery may be deducted in determining value. In the event there is no sale of the coal or the Board of Land Commissioners determines that the sales price does not truly reflect the value of the coal, it may make its own determination of value and require that royalties be paid on the basis of the value determined by the Board. If the lessor elects to take its royalty in kind, such coal shall be good merchantable coal delivered for shipment at the mine.

IN CONSIDERATION OF THE FOREGOING, THE LESSEE COVENANTS AND AGREES. (a) BOND When the lease becomes an operating lease or actual operations for the mineral are coal is to be commenced, the and for all operations thereafter, a bond shall be furnished in such a reasonable an amount as determined by the Director of the Office of State Lands and Investments shall determine to be advisable in the premises. The operating bond shall preferably be a corporate surety bond, executed by the lessee, the surety being authorized to do business in the State of Wyoming. A cash Other bond may be furnished on the consent of the Office of State Lands and Investments if the lessee is unable to obtain a corporate surety bond. Form bond as per Chapter 19 of bond will be furnished by the Office rules of State Lands and Investmentsthe Board of Land Commissioners. The State will require two executed copies of the bond, therefore therefore, as many additional copies should be made as will be required by the lessee and the bonding company. (b) PAYMENTS To make all payments accruing hereunder to the Wyoming Office of State Lands and Investments, Xxxxxxxxx Building 3rd Floor West, 000 Xxxx 00xx Xxxxxx, Xxxxxxxxx Xxxxxxxx, Cheyenne, Wyoming 82002Xxxxxxx 00000-06000000. (c) RENTALS Prior to the discovery of commercial quantities of coal in the lands herein hereby leased, to pay the lessor in advance advance, beginning with the effective date hereof, an annual rental of ONE DOLLAR ($1.00) PER ACRE OR FRACTION THEREOF PER YEAR for the 1st through the 5th year years inclusive and TWO DOLLARS ($2.00) PER ACRE OF FRACTION THEREOF PER YEAR for the 6th through 10th 20th years inclusive—or renewal thereof, THREE DOLLARS ($3.00) PER ACRE OR FRACTION THEREOF PER YEAR for the 21st through 30th years inclusive, and FOUR DOLLARS ($4.00) PER ACRE OR FRACTION THEREOF for any year beyond the 30th lease year; provided, however, that if the said lands are not on a commercial mining basis and so operated at the end of two (2) years from the date hereof, such rental may be increased at the option of the lessor, to such an amount as the lessor may decide to be fair and equitable. After the discovery of commercial quantities of coal in the lands herein leased to pay to the lessor in advance, beginning with the first day of the lease year succeeding the lease year in which commercial discovery was made, an annual rental of TWO DOLLARS ($2.00) PER ACRE OR FRACTION THEREOF PER YEAR unless changed by agreement, such rental so paid for any one year to be credited on the royalty for that year. Annual rentals on all leases shall be payable in advance for the first year and each year thereafter. No Notice of Rental Due shall be sent to the lessee. If the rental is not received in this office on or before the date it becomes due, Notice of Default will be sent to the lessee and a penalty of 50¢ per acre or fraction thereof for late payment will be assessed. The lessee is not legally obligated to pay either the rental or the penalty, but if the rental and penalty are not received in this office within thirty (30) days after the Notice of Default has been received by the lessee, the lease will terminate automatically by operation of law. Termination of the lease shall not relieve the lessee of any obligation incurred under the lease other than the obligation to pay rental or penalty. The lessee shall not be entitled to a credit on royalty due for any penalty paid for late payment of rental on an operating lease. (d) ROYALTY To pay a royalty on all coal mined from the land herein leased, either in kind or value as the lessor may elect of 121/2% on coal mined by surface mining operations and 8% on coal mined by underground mining methods. Royalty shall be payable on the gross value at the mine on all coal mined. Gross value for the purpose of royalty calculation means the unit sale or contract price times the number of units sold. In calculating gross value the sales price shall be prima facia evidence of such gross value. No deduction shall be allowed for fees, taxes, assessments or similar levies imposed by the State of Wyoming, its political subdivisions, any other state or the federal government, nor for the expense of mining, processing and loading the coal in merchantable condition at the mine ready for shipment. If the coal is not sold and valued at the mine, transportation from the mine to the point of sale or delivery may be deducted in determining value. In the event there is no sale of the coal or the Board of Land Commissioners determines that the sales price does not truly reflect the value of the coal, it may make its own determination of value and require that royalties be paid on the basis of the value determined by the Board. If the lessor elects to take its royalty in kind, such coal shall be good merchantable coal delivered for shipment at the mine.After