Exhibit 10.6

(6/22/05)

MINERAL LEASE NO. ML 50773

GRANT: SCH: 1920.00

UTAH STATE MINERAL LEASE FORM

GEOTHERMAL STEAM

THIS MINING LEASE AND AGREEMENT (the “Lease”) is entered into and is effective
as of APRIL 1, 2007, by and between the STATE OF UTAH, acting by and through the
SCHOOL AND INSTITUTIONAL TRUST LANDS ADMINISTRATION, 675 East 500 South, Suite
500, Salt Lake City, Utah 84102 (“Lessor”), and

INTERMOUNTAIN RENEWABLE POWER, LLC

5152 NORTH EDGEWOOD DRIVE

SUITE 375

PROVO, UT 84604

having a business address as shown above (“Lessee”).

WITNESSETH:

That the State of Utah, as Lessor, in consideration of the rentals, royalties,
and other financial consideration paid or required to be paid by Lessee, and the
covenants of Lessee set forth below, does hereby GRANT AND LEASE to Lessee the
exclusive right and privilege to explore for, drill for, mine, remove,
transport, convey, cross-haul, commingle, and sell the leased substances covered
by this lease and located within the boundaries of the following-described tract
of land (the “Leased Premises”) located in BEAVER County, State of Utah:

T30S, R12W, SLB&M.

SEC. 13:     LOTS 3(35.70), 4(35.74), W 1/2SE 1/4, SW 1/4

SEC. 14:     S 1/2

SEC. 26:     NW 1/4, S 1/ 2

SEC. 28:     E 1/2NE 1/4, NE 1/4NW 1/4

SEC. 29:     S 1/2SW 1/4, NW  1/4SW 1/4

SEC. 30:     LOTS 1(40.22), 2(40.20), 3(40.16), 4(40.14), N 1/2NE 1/4, SW
 1/4NE 1/4, E 1/2NW 1/4, N 1/ 2SE 1/4

SEC. 32:     E 1/2, NW 1/4

Containing 2272.16 acres, more or less.

Together with the right and privilege to make use of the surface and subsurface
of the Leased Premises for uses reasonably incident to the mining of leased
substances by Lessee on the Leased Premises or on other lands under the control
of Lessee or mined in connection with operations on the Leased Premises,
including, but not limited to, conveying, storing, loading, hauling and
otherwise transporting leased substances; excavating; removing, stockpiling,
depositing and redepositing of surface materials; developing and utilizing mine
portals and adjacent areas for access, staging and other purposes incident to
mining; and the subsidence, mitigation, restoration and reclamation of the
surface.

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This Mining Lease and Agreement is subject to, and Lessee hereby agrees to and
accepts, the following covenants, terms, and conditions:

 

1. LEASED SUBSTANCES.

 

  1.1 Geothermal Steam, as Classified and defined in Utah Administrative Code
R850-27-100 (collectively “leased substances”). This mineral lease grants Lessee
the right, subject to the terms and conditions set forth herein, to extract the
leased substances. In the event that minerals or materials other than the leased
substances are discovered during lease operations, Lessee shall promptly notify
the Lessor and shall not further disturb or remove the other minerals or
materials without Lessor’s written permission. Upon notifying Lessor of such
discovery the Lessee shall have preference in making application to the Lessor
for a lease or permit covering the unleased minerals or materials that are
discovered.

 

  1.2 Ore From Adjacent Lands; Transport Fee, Process Fee. Lessee may use mine
workings, portals and ore processing facilities located on the Subject Property
to transport or process ore extracted from non-state lands adjacent to or nearby
the Subject Property. As a condition of Lessor’s consent to such use of the
Subject Property, Lessee shall pay Lessor a fee per ton of ore attributable to
non-state lands that is removed from portals located on the Subject Property and
transported offsite or processed on site. Lessee shall also pay Lessor a fee per
ton of any other ore that is mined from non-state lands and is transported to
the Subject Property for processing at a facility located upon the Subject
Property. Said transport or process fee per ton shall be paid at One-half the
leased substances royalty rate as contained in Paragraph 6 of this lease. Lessee
shall maintain separate stockpiles of ore removed from the Subject Property and
ores attributable to non-state lands, and shall not commingle such ores. For
purposes of this paragraph, weight of ores shall be the “dry weight,” determined
by taking moisture content measurements, and deducting the average moisture from
the ore weight, measure at the point of receipt at the mill or other processing
facility. For all ore subject to the transport or process fee that is
transported for milling or processing during a particular month, Lessee shall
pay transport or process fees to Lessor on or before the end of the next
succeeding month. Transport or process fees shall be accounted for separately on
the monthly royalty settlement sheet required to be submitted by Lessee pursuant
to paragraph 6.4, Royalty Payment.

 

  1.3 No Warranty of Title. Lessor claims title to the mineral estate covered by
this Lease. Lessor does not warrant title nor represent that no one will dispute
the title asserted by Lessor. It is expressly agreed that Lessor shall not be
liable to Lessee for any alleged deficiency in title to the mineral estate, nor
shall Lessee become entitled to any refund for any rentals, bonuses, or
royalties paid under this Lease in the event of title failure.

 

2. RESERVATIONS TO LESSOR. Subject to the exclusive rights and privileges
granted to Lessee under this Lease, and further provided that Lessor shall
refrain from taking actions with respect to the Leased Premises that may
unreasonably interfere with Lessee’s operations, Lessor hereby excepts and
reserves from the operation of this Lease the following rights and privileges
(to the extent that Lessor has the right to grant such rights and privileges):

 

  2.1 Rights-of-Way and Easements. Lessor reserves the right, following
consultation with the Lessee, to establish rights-of-way and easements upon,
through or over the Leased Premises, under terms and conditions that will not
unreasonably interfere with operations under this Lease, for roads, pipelines,
electric transmission lines, transportation and utility corridors, mineral
access, and any other purpose deemed reasonably necessary by Lessor.

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  2.2 Other Mineral Leases. Lessor reserves the right to enter into mineral
leases and agreements with third parties covering minerals other than the leased
substances, under terms and conditions that will not unreasonably interfere with
operations under this Lease in accordance with Lessor’s regulations, if any,
governing multiple mineral development.

 

  2.3 Use and Disposal of Surface. To the extent that Lessor owns the surface
estate of the Leased Premises and subject to the rights granted to the Lessee
pursuant to this Lease, Lessor reserves the right to use, lease, sell, or
otherwise dispose of the surface estate or any part thereof, provided that any
such actions will not unreasonably interfere with operations under this Lease.
Lessor shall notify Lessee of any such sale, lease, or other disposition of the
surface estate.

 

  2.4 Rights Not Expressly Granted. Lessor further reserves all rights and
privileges of every kind and nature, except as specifically granted in this
Lease, provided that any actions under such reservations will not unreasonably
interfere with operations under this Lease.

 

3. TERM OF LEASE; MINIMUM ROYALTIES; READJUSTMENT.

 

  3.1 Primary Term. This Lease is granted for a “primary term” of ten (10) years
from the date hereinabove first written.

 

  3.2 Extension Beyond Primary Term By Production. Subject to Lessee’s
compliance with the other provisions of this Lease, this Lease shall remain in
effect beyond the primary term so long as leased substances are being produced
in paying quantities, as defined herein, from the Leased Premises, or from lands
constituting a mining unit as approved by Lessor in its reasonable discretion.
For purposes of this lease, production of leased substances in paying quantities
shall mean the mining and sale of the leased substances during the lease-year in
an amount sufficient to cover all operating expenses accruing to the lessee
pursuant to the leasehold for that lease year, including the payment of all
taxes and the payment of rentals and royalties accruing to the Lessor.

 

  3.3 Extension Beyond Primary Term By Diligent Development, Financial
Investment and Minimum Royalty. In the absence of actual production in paying
quantities as set forth in paragraph 3.2, Extension Beyond Primary Term, this
Lease shall remain in effect beyond the primary term only if the Lessee is
engaged in diligent operations, exploration or development activity, as well as
making a substantial financial investment, which in Lessor’s sole discretion is
calculated to advance development or production of leased substances from the
Leased Premises or lands constituting a mining unit as approved by the Director
which includes the Leased Premises, and Lessee pays the annual minimum royalty
set forth in Paragraph 3.4, Minimum Royalty, in advance, on or before the
anniversary date of the date first written hereinabove.

 

  3.4 Minimum Royalty. Commencing with the n/a year of this lease Lessee shall
pay Lessor an annual minimum royalty, in advance, on or before the Effective
Date and each anniversary thereof. The advance annual minimum royalty shall be
in the amount of $ n/a. Lessee may credit each lease-year’s minimum royalty
payment against actual production royalties accruing during that lease year, but
such credit shall not carry over beyond the lease year in which the advance
royalty was paid. Minimum royalties may not be credited against the annual
rentals or bonus bids.

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  3.5 Expiration; Cessation of Production. This Lease may not be extended
pursuant to paragraph 3.3, Diligent Operations, beyond the end of the twentieth
year after the Effective Date except by the actual production of leased
substances in commercial quantities from the Leased Premises or from lands
constituting an approved mining unit which includes the Leased Premises, or
except by suspension of the Lease pursuant to Article 17.3, unless otherwise
specifically approved in writing by the Director of the Trust Lands
Administration in the interest of the trust beneficiaries. After expiration of
the primary term, this Lease will expire of its own terms, without the necessity
of any notice or action by Lessor, if: (a) Lessee fails to produce leased
substances in accordance with Article 3.2; (b) Lessee ceases to engage in
exploration, development, or operations or fails to pay annual advance minimum
royalties in accordance with Article 3.4; or, (c) the Director fails to make a
written determination that it is in the interest of the trust beneficiaries to
extend this lease.

 

  3.6 Readjustment. At the end of the primary term and at the end of each period
of ten (10) years thereafter (“Readjustment Period”), Lessor may exercise its
option to readjust the terms and conditions of this Lease (including, without
limitation: rental rates, minimum royalties, royalty rates, valuation methods,
and provisions concerning reclamation). Notice of intent to exercise the right
to readjust is timely given by Lessor if mailed prior to the end of the
Readjustment Period to the last address set forth for Lessee in Lessor’s files.
Lessor shall have up to one year after exercising its option to readjust to
review and communicate in writing the final readjusted terms of the lease. If
within thirty (30) days after submission of the readjusted lease terms to the
Lessee, the Lessee determines that any or all of the proposed readjusted terms
and conditions are unreasonable, then Lessee shall so notify Lessor in writing
and the parties, acting reasonably, shall attempt to resolve the objectionable
term or condition. If the parties are unable, acting reasonably, to resolve the
matter and agree upon the readjusted terms and conditions as submitted by Lessor
at the end of the Readjustment Period, Lessee shall forfeit any right to the
continued extension of this lease, and the lease shall automatically terminate,
provided that nothing herein shall be deemed to preclude Lessee from appealing
any readjustment by Lessor pursuant to applicable law.

 

4. BONUS BID. Lessee agrees to pay Lessor an initial bonus bid in the sum of n/a
dollars as partial consideration for Lessor’s issuance of this Lease, payable in
cash prior to execution of this lease. The initial bonus bid may not be credited
against annual rentals, annual minimum royalties or production royalties
accruing pursuant to this lease.

 

5. RENTALS/MINIMUM RENTALS. Lessee agrees to pay Lessor an annual rental of
$1.00 for each acre and fractional part thereof within the Leased Premises;
provided however, the minimum annual rental required by this lease shall be
$500.00 irrespective of acreage. Lessee shall promptly pay annual rentals each
year in advance on or before the anniversary date of the Effective Date. The
rental payment for a mineral lease year may be credited against production
royalties only as they accrue for that lease year. The Lessee may not credit
rentals paid for one lease year against production royalties accruing to another
lease year. Rental payments may not be credited against minimum royalties or
bonus bids accruing to any lease year.

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6. ROYALTIES.

 

  6.1 Production Royalties. Lessee shall pay Lessor a production royalty on the
basis of 10% of the Gross Value, f.o.b. the mine, of the leased substances sold
under an arm’s length transaction, bona fide contract of sale or $ n/a per short
ton, whichever amount is greater. For purposes of this lease the Gross Value of
the leased substances shall mean the actual compensation received by the Lessee,
or any affiliated entity, on the basis of U.S. Dollars, including all payments,
bonuses and allowances, received plus the value of all services, payments in
kind and all other compensation whether monetary or non-monetary, received by
the Lessee from the buyer or from other parties for the sale or disposal of the
leased substances.

 

  6.2 Non-Arms Length Transactions. In the event that Lessee uses, sells or
otherwise disposes of leased substances without a non-arm’s-length contract or
bill of sale, Lessee shall promptly notify Lessor of such use, sale or disposal.
The Director may then determine and assign the Gross Value to the leased
substances for royalty purposes after taking into account spot market prices,
the value of similar or like leased substances reported by other trust lands
lessees, the value of like mineral commodities as reported by the United States
Geological Survey, and other pertinent economic data regarding the fair market
value of the leased substances, f.o.b. the mine.

 

  6.3 No Deductions. It is expressly understood and agreed that none of Lessee’s
mining, production or processing costs, including but not limited to costs for
materials, labor, overhead, distribution, transportation f.o.b. mine, loading,
crushing, processing, or general and administrative activities, may be deducted
in computing Lessor’s royalty. All such costs shall be entirely borne by Lessee
and are anticipated by the rate of royalty set forth in this Lease.

 

  6.4 Royalty Payment. For all leased substances that are sold or transported
from the leased lands during a particular month, Lessee shall pay royalties to
Lessor on or before the end of the next succeeding month. Royalty payments shall
be accompanied by a verified statement, in a form approved by Lessor, stating
the amount of leased substances sold or transported, the gross proceeds accruing
to Lessee, and any other information reasonably required by Lessor to verify
production and disposition of the leased substances or leased substances
products. Delinquent royalties may be subject to late fees and penalties in
accordance with Lessor’s Rules.

 

  6.5 Suspension, Waiver or Reduction of Rents or Royalties. Lessor, to the
extent not prohibited by applicable law, is authorized to waive, suspend, or
reduce the rental or minimum royalty, or reduce the royalty applicable with
respect to the entire Lease, whenever in Lessor’s sole judgment it is necessary
to do so in order to promote development, or whenever in the Lessor’s sole
judgment the Lease cannot be successfully operated under the terms provided
herein and continued operations are in the trust land beneficiaries best
interest.

 

7. RECORDKEEPING; INSPECTION; AUDITS.

 

  7.1

Registered Agent; Records. Lessee shall maintain a registered agent within the
State of Utah to whom any and all notices may be sent by Lessor and upon whom
process may be served. Lessee shall also maintain an office within the State of
Utah containing originals or copies of all maps, engineering data, permitting
materials, books, records or contracts (whether such documents are in paper or
electronic form) generated by Lessee that pertain in any way to leased
substances production, output and valuation; mine operations; assays; processing
returns; leased substances sales and dispositions; and calculation

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of royalties from the Leased Premises. Lessee shall maintain such documents for
at least seven years after the date of the leased substances production to which
the documents pertain.

 

  7.2 Inspection. Lessor’s employees and authorized agents at Lessor’s sole risk
and expense shall have the right to enter the Leased Premises to check scales as
to their accuracy, and to go on any part of the Leased Premises to examine,
inspect, survey and take measurements for the purposes of verifying production
amounts and proper lease operations. Upon reasonable notice to Lessee, Lessor’s
employees and authorized agents shall further have the right to audit, examine
and copy (at Lessor’s expense) all documents described in paragraph 7.1,
Registered Agent; Records, whether such documents are located at the mine site
or elsewhere. Lessee shall furnish all conveniences necessary for said
inspection, survey, or examination; provided, however, that such inspections
shall be conducted in a manner that is in conformance with all applicable mine
safety regulations and does not unreasonably interfere with Lessee’s operations.

 

  7.3 Geologic Information. In the event Lessee conducts core-drilling
operations or other geologic evaluation of the Leased Premises, Lessor may
inspect core samples, evaluations thereof, and proprietary geologic information
concerning the Leased Premises. Upon request by Lessor, Lessee shall timely
provide Lessor with a true and correct copy of all such evaluations, geological
reports, drilling logs, assays and interpretive maps of the leased substances
within the leased lands.

 

  7.4 Confidentiality. Any and all documents and geologic data obtained by
Lessor through the exercise of its rights as set forth in paragraphs 7.2,
Inspection., and 7.3, Geologic Information., may be declared confidential
information by Lessee, in which event Lessor and its authorized agents shall
maintain such documents and geologic data as protected records under the Utah
Governmental Records Access Management Act or other applicable privacy statute,
and shall not disclose the same to any third party without the written consent
of Lessee, or as required under the order of a court of competent jurisdiction
requiring such disclosure, provided that Lessor’s obligations of confidentiality
to Lessee shall cease upon termination of this Lease.

 

8. USE OF SURFACE ESTATE.

 

  8.1 Lessor-Owned Surface. If Lessor owns the surface estate of all or some
portion of the Leased Premises, at the time of the execution of this Lease, by
issuance of this Lease the Lessee has been granted the right to make use of such
lands to the extent reasonably necessary and expedient for the economic
operation of the leasehold. Lessee’s right to surface use of Lessor-owned
surface estate shall include the right to subside the surface. Such surface uses
shall be exercised subject to the rights reserved to Lessor as provided in
paragraph 2, RESERVATIONS TO LESSOR, and without unreasonable interference with
the rights of any prior or subsequent lessee of Lessor.

 

  8.2 Split-Estate Lands. If Lessor does not own the surface estate of any
portion of the Leased Premises, Lessee’s access to and use of the surface of
such lands shall be determined by applicable law governing mineral development
on split-estate lands, including without limitation applicable statutes
governing access by mineral owners to split estate lands, and reclamation and
bonding requirements. Lessee shall indemnify, defend and hold Lessor harmless
for all claims, causes of action, damages, costs and expenses (including
attorney’s fees and costs) arising out of or related to damage caused by
Lessee’s operations to surface lands or improvements owned by third parties.

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9. APPLICABLE LAWS AND REGULATIONS; HAZARDOUS SUBSTANCES

 

  9.1 Trust Lands Statute and Regulations. This Lease is issued pursuant to, and
is subject to, the provisions of Title 53C, Utah Code Annotated, 1953, as
amended. Further, Lessee and this lease are subject to and shall comply with all
current and future rules and regulations adopted by the School and Institutional
Trust Lands Administration and its successor agencies.

 

  9.2 Other Applicable Laws and Regulations. Lessee shall comply with all
applicable federal, state and local statutes, regulations, and ordinances,
including without limitation the Utah Mined Land Reclamation Act, applicable
statutes and regulations relating to mine safety and health, and applicable
statutes, regulations and ordinances relating to public health, pollution
control, management of hazardous substances and environmental protection.

 

  9.3 Hazardous Substances. Lessee [or other occupant pursuant to any agreement
authorizing mining] shall not keep on or about the premises any hazardous
substances, as defined under 42 U.S.C. § 9601(14) or any other Federal
environmental law, any regulated substance contained in or released from any
underground storage tank, as defined by the Resource Conservation and Recovery
Act, 42 U.S.C. § 6991, et seq, or any substances defined and regulated as
“hazardous” by applicable State law, (hereinafter, for the purposes of this
Lease, collectively referred to as “Hazardous Substances”) unless such
substances are reasonably necessary in Lessee’s mining operations, and the use
of such substances or tanks is noted and approved in the Lessee’s mining plan,
and unless Lessee fully complies with all Federal, State and local laws,
regulations, statutes, and ordinances, now in existence or as subsequently
enacted or amended, governing Hazardous Substances. Lessee shall immediately
notify Lessor, the surface management agency, and any other Federal, State and
local agency with jurisdiction over the Leased Premises, of contamination
thereon, of (i) all reportable spills or releases of any Hazardous Substance
affecting the Leased Premises, (ii) all failures to comply with any applicable
Federal, state or local law, regulation or ordinance governing Hazardous
Substances, as now enacted or as subsequently enacted or amended, (iii) all
inspections of the Leased Premises by, or any correspondence, order, citations,
or notifications from any regulatory entity concerning Hazardous Substances
affecting the Leased Premises, (iv) all regulatory orders or fines or all
response or interim cleanup actions taken by or proposed to be taken by any
government entity or private Party concerning the Leased Premises.

 

  9.4 Hazardous Substances Indemnity. Lessee [or other occupant pursuant to any
agreement authorizing mining] shall indemnify, defend, and hold harmless Lessor,
employees, officers, and agents with respect to any and all damages, costs,
liabilities, fees (including reasonable attorneys’ fees and costs), penalties
(civil and criminal), and cleanup costs arising out of or in any way related to
Lessee’s use, disposal, transportation, generation, sale or location upon or
affecting the Leased Premises of Hazardous Substances, as defined in paragraph
9.3 of this Lease. This indemnity shall extend to the actions of Lessee’s
employees, agents assigns, sublessees, contractors, subcontractors, licensees
and invitees. Lessee shall further indemnify, defend and hold harmless Lessor
from any and all damages, costs, liabilities, fees (including reasonable
attorneys’ fees and costs), penalties (civil and criminal), and cleanup costs
arising out of or in any way related to any breach of the provisions of this
Lease concerning Hazardous Substances. This indemnity is in addition to, and in
no way limits, the general indemnity contained in paragraph 16.1 of this Lease.

 

  9.5

Waste Certification. The Lessee shall provide upon abandonment, transfer of
operation, assignment of rights, sealing-off of a mined area, and prior to lease
relinquishment, certification to the Lessor that, based upon a complete search
of all the

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operator’s records for the Lease, and upon its knowledge of past operations,
there have been no reportable quantities of hazardous substances as defined in
40 Code of Federal Regulations §302.4, or used oil as defined in Utah
Administrative Code R315-15, discharged (as defined at 33 U.S.C. §1321 (a)(2)),
deposited or released within the Leased Premises, either on the surface or
underground, and that all remedial actions necessary have been taken to protect
human health and the environment with respect to such substances. Lessee shall
additionally provide to Lessor a complete list of all hazardous substances,
hazardous materials, and their respective Chemical Abstracts Service Registry
Numbers, used or stored on, or delivered to, the Leased Premises. Such
disclosure will be in addition to any other disclosure required by law or
agreement.

 

10. BONDING.

 

  10.1 Lease Bond May Be Required. At the time this Lease is executed, Lessor
may require Lessee to execute and file with the Lessor a good and sufficient
bond or other financial guarantee acceptable to Lessor in order to:
(a) guarantee Lessee’s performance of all covenants and obligations under this
Lease, including Lessee’s obligation to pay royalties; and (b) ensure
compensation for damage, if any, to the surface estate and any surface
improvements.

 

  10.2 Reclamation Bonding. The bond required by and filed with the Utah
Division of Oil, Gas and Mining (“UDOGM”) in connection with the issuance of a
mine permit which includes the Leased Premises may be accepted by the Director
to satisfy Lessor’s bonding requirements with respect to Lessee’s reclamation
obligations under this Lease; provided, however, upon notice to Lessee, the
Lessor may, in its reasonable discretion, determine that the bond filed with
UDOGM is insufficient to protect Lessor’s interests. In such an event the
Director shall enter written findings as to the basis for calculation of the
perceived insufficiency and enter an order establishing the amount of additional
bonding required. Lessee shall file any required additional bond with Lessor
within thirty (30) days after demand by Lessor. Lessor may increase or decrease
the amount of any additional bond from time to time in accordance with the same
procedure.

 

11. WATER RIGHTS.

 

  11.1 Water Rights in Name of Lessor. If Lessee files to appropriate water for
use in association with this lease or operations upon the Leased Premises, the
filing for such water right shall be made by Lessee in the name of Lessor at no
cost to Lessor, and such water right shall become an appurtenance to the Leased
Premises, subject to Lessee’s right to use such water right at no cost during
the term of this Lease.

 

  11.2

Option to Purchase. If Lessee purchases or acquires an existing water right for
use in association with this lease or operations upon the Leased Premises,
Lessor shall have the option to acquire that portion of such water right as was
used on the Leased Premises upon expiration or termination of this Lease. The
option price for such water right shall be the fair market value of the water
right as of the date of expiration or termination of this Lease. Upon expiration
or termination of this Lease, Lessee shall notify Lessor in writing of all water
rights purchased or acquired by Lessee for leased substances mining operations
on the Leased Premises and its estimate of the fair market value of such water
right. Lessor shall then have forty-five (45) days to exercise its option to
acquire the water by payment to Lessee of the estimated fair market value. If
Lessor disagrees with Lessee’s estimate of fair market value, Lessor shall
notify Lessee of its disagreement within the 45 day option exercise period. The
fair market value of the water right shall then be appraised by a single
appraiser

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mutually acceptable to both parties, which appraisal shall be final and not
subject to review or appeal. If the parties cannot agree upon the choice of an
appraiser, the fair market value of the water right shall be determined by a
court of competent jurisdiction. Conveyance of any water right pursuant to this
paragraph shall be by quit claim deed.

 

12. ASSIGNMENT OR SUBLEASE; OVERRIDING ROYALTIES.

 

  12.1 Consent Required. Lessee shall not assign or sublease this Lease in whole
or in part, or otherwise assign or convey any rights or privileges granted by
this Lease, including, without limitation, creation of overriding royalties or
production payments, without the prior written consent of Lessor, which shall
not be unreasonably withheld. Lessee agrees that Lessor, in determining whether
to consent to any proposed assignment, may reasonably consider the proposed
assignee’s financial capacity, ability to market and process leased substances,
and may refuse to consent to such assignment if, in the Lessor’s reasonable
opinion, the proposed assignee lacks the necessary financial or technical
capacity to mine, market and/or process leased substances in a manner comparable
to Lessee. Any assignment, sublease or other conveyance made without prior
written consent of Lessor shall have no legal effect unless and until approved
in writing by Lessor. Exercise of any right with respect to the Leased Premises
in violation of this provision shall constitute a default under this Lease.

 

  12.2 Binding Effect. All of the terms and provisions of this Lease shall be
binding upon and shall inure to the benefit of their respective successors,
assigns, and sublessees.

 

  12.3 Limitation on Overriding Royalties. Lessor reserves the right to
disapprove the creation of an overriding royalty or production payment that
would, in Lessor’s reasonable discretion, constitute an unreasonable economic
burden upon operation of the Lease. In exercising its discretion to disapprove
the creation of an overriding royalty, Lessor shall consult with Lessee and any
third parties involved and shall prepare findings to evidence the basis of its
decision. Any transfer in interest which would create a cumulative overriding
royalty burden in excess of 20% shall not be approved.

 

13. OPERATIONS.

 

  13.1 Permitting. Before Lessee commences exploration, drilling, or mining
operations on the Leased Premises, it shall have obtained such permits and
posted such bonds as may be required under applicable provisions of the Utah
Mined Land Reclamation Act and associated regulations. Lessee shall maintain any
required permits in place for the duration of mining operations and reclamation.
Upon request, Lessee shall provide Lessor with a copy of all regulatory filings
relating to permitting matters.

 

  13.2 Plan of Operations. Prior to the commencement of any exploration,
drilling, or mining operations on the Leased Premises, Lessee shall obtain
Lessor’s approval of a plan of operations for the Leased Premises. Lessor may
modify the proposed plan of operations as is needed to insure that there is no
waste of economically recoverable mineral reserves contained on the Leased
Premises. In this context “waste” shall mean the inefficient utilization of, or
the excessive or improper loss of an otherwise economically recoverable mineral
resource. Lessor shall notify Lessee in writing of its approval or modifications
of the plan of operations. The plan of operations submitted by Lessee shall be
deemed approved by Lessor if Lessor has not otherwise notified Lessee within
sixty (60) days of filing.

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  13.3 Plan of Operations - Modification. In the event that material changes are
required to the plan of operations during the course of mining, Lessee shall
submit a modification of the plan of operations to the Lessor. Routine
adjustments to the plan of operations based upon geologic circumstances
encountered during day-to-day mining operations do not require the submission of
a modification. If the proposed changes require emergency action by Lessor, then
the Lessee shall so notify the Lessor at the time of submission of the
modification and the parties shall use their best efforts to meet the Lessee’s
time schedule regarding implementation of the changes. Non-emergency
modifications will be reviewed promptly by Lessor to insure that there is no
waste of economically recoverable mineral reserves pursuant to the plan of
operations, as modified, and Lessor shall notify lessee in writing of its
approval or modification of the proposed modification. Modifications shall be
deemed approved by Lessor if Lessor has not otherwise notified Lessee within
thirty (30) days of filing.

 

  13.4 Mine Maps. Lessee shall maintain at the mine office clear, accurate, and
detailed maps of all actual and planned operations. Such maps shall be certified
by an engineer or geologist who is professionally licensed by the State of Utah
or by a state having a reciprocal licensing agreement with the State of Utah.
Lessee shall provide copies of such maps to Lessor upon request.

 

  13.5 Good Mining Practices. Lessee shall conduct exploration and mining
operations on the Leased Premises in accordance with standard industry operating
practices, and shall avoid waste of economically recoverable leased substances.
Lessee shall comply with all regulations and directives of the Mine Safety and
Health Administration or successor agencies for the health and safety of
employees and workers. Leased substances shall be mined from this Lease by
underground methods only.

 

  13.6 Mining Units. Lessor may approve the inclusion of the Leased Premises in
a mining unit with federal, private or other non-state lands upon terms and
conditions that it deems necessary to protect the interests of the Lessor,
including without limitation segregation of production, accounting for
commingled leased substances production, and minimum production requirements or
minimum royalties for the Leased Premises.

 

14. EQUIPMENT; RESTORATION.

 

  14.1 Equipment. Upon termination of this Lease, Lessee shall remove, and shall
have the right to remove, all improvements, equipment, stockpiles, and dumps
from the Leased Premises within six (6) months; provided, however, that Lessor
may, at Lessor’s sole risk and expense, and subject to Lessee’s compliance with
requirements imposed by UDOGM and MSHA, require Lessee to retain in place
underground timbering supports, shaft linings, rails, and other installations
reasonably necessary for future mining of the Leased Premises. All improvements
and equipment remaining on the Leased Premises after six (6) months may be
deemed forfeited to Lessor upon written notice of such forfeiture to Lessee.
Lessee may abandon underground improvements, equipment of any type, stockpiles
and dumps in place if such abandonment is in compliance with applicable law, and
further provided that Lessee provides Lessor with financial or other assurances
sufficient in Lessor’s reasonable discretion to protect Lessor from future
environmental liability with respect to such abandonment or any associated
hazardous waste spills or releases. Lessee shall identify and locate on the mine
map the location of all equipment abandoned on the Lease Premises.

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  14.2 Restoration and Reclamation. Upon termination of this Lease, Lessee shall
reclaim the Leased Premises in accordance with the requirements of applicable
law, including mine permits and reclamation plans on file with UDOGM. Lessee
shall further abate any hazardous condition on or associated with the Leased
Premises. Lessee and representatives of all governmental agencies having
jurisdiction shall have the right to re-enter the Leased Premises for
reclamation purposes for a reasonable period after termination of the Lease.

 

15. MULTIPLE MINERAL DEVELOPMENT.

The Utah School and Institutional Trust Lands Administration may designate any
lands under its authority as a Multiple Mineral Development Area (MMD). In
designated MMDs the Lessor may require in addition to the terms and conditions
of this lease such stipulations or restrictions as may be necessary in the
determination of the Director to integrate and coordinate the operations of
lessees having an interest in the lands in order to conserve natural resource
and optimize revenues to the trust-land beneficiaries.

 

16. DEFAULT

 

  16.1 Notice of Default; Termination. Upon Lessee’s violation of or failure to
comply with any of the terms, conditions or covenants set forth in this Lease,
Lessor shall notify Lessee of such default by registered or certified mail,
return receipt requested, at the last address for Lessee set forth in Lessor’s
files. Lessee shall then have thirty (30) days, or such longer period as may be
granted in writing by Lessor, to either cure the default or request a hearing
pursuant to the Lessor’s administrative adjudication rules. In the event Lessee
fails to cure the default or request a hearing within the specified time period,
Lessor may cancel this Lease without further notice to or appeal by Lessee.

 

  16.2 Effect of Termination. The termination of this Lease for any reason,
whether through expiration, cancellation or relinquishment, shall not limit the
rights of the Lessor to recover any royalties and/or damages for which Lessee
may be liable, to recover on any bond on file, or to seek injunctive relief to
enjoin continuing violations of the Lease terms. No remedy or election under
this Lease shall be deemed exclusive, but shall, wherever possible, be
cumulative with all other remedies available under this Lease, at law, or in
equity. Lessee shall surrender the Leased Premises upon termination; however,
the obligations of Lessee with respect to reclamation, indemnification and other
continuing covenants imposed by this Lease shall survive the termination. All
fees, rentals and monies of any type previously paid by the Lessee to the Lessor
are forfeited to the trust.

 

17. MISCELLANEOUS PROVISIONS.

 

  17.1 Indemnity. Except as limited by paragraph 7.2, Inspection, Lessee shall
indemnify and hold Lessor harmless for, from and against each and every claim,
demand, liability, loss, cost, damage and expense, including, without
limitation, attorneys’ fees and court costs, arising in any way out of Lessee’s
occupation and use of the Leased Premises, including without limitation claims
for death, personal injury, property damage, and unpaid wages and benefits.
Lessee further agrees to indemnify and hold Lessor harmless for, from and
against all claims, demands, liabilities, damages and penalties arising out of
any failure of Lessee to comply with any of Lessee’s obligations under this
Lease, including without limitation reasonable attorneys’ fees and court costs.
Lessee may be required to obtain insurance in a type and in an amount acceptable
to Lessor, naming the Trust Lands Administration, its employees, its Board of
trustees and the State of Utah as co-insured parties under the policy.

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  17.2 Interest. Interest shall accrue and be payable on all obligations arising
under this Lease at such current rate as may from time to time be enacted by the
Director and recorded in the Director’s Minutes of the School and Institutional
Trust Lands Administration. Interest shall accrue and be payable, without
necessity of demand, from the date each such obligation shall arise.

 

  17.3 Suspension. In the event that Lessor in its reasonable discretion
determines that suspension is necessary in the interests of conservation of the
leased substances; that prevailing market conditions for the leased substances
render continued operation of the subject property uneconomic, or if Lessee has
been prevented from performing any of its obligations or responsibilities under
this Lease or from conducting mining operations by labor strikes, fires, floods,
explosions, riots, acts of terrorism, any unusual mining casualties or
conditions, Acts of God, government restrictions or orders, severe weather
conditions, or other extraordinary events beyond its control, then the time for
performance of this Lease by Lessee shall be suspended during the continuance of
such conditions or acts which prevent performance, excepting any payments due
and owing to Lessor.

 

  17.4 Consent to Suit; Jurisdiction. This Lease shall be governed by the laws
of the State of Utah. Lessor and Lessee agree that all disputes arising out of
this Lease shall be litigated only in the Third Judicial District Court for Salt
Lake County, Utah, and Lessee consents to the jurisdiction of such court. Lessee
shall not bring any action against Lessor without exhaustion of available
administrative remedies and compliance with applicable requirements of the Utah
Governmental Immunity Act.

 

  17.5 No Waiver. No waiver of the breach of any provision of this Lease shall
be construed as a waiver of any preceding or succeeding breach of the same or
any other provision of this Lease, nor shall the acceptance of rentals or
royalties by Lessor during any period of time in which Lessee is in default be
deemed to be a waiver of such default.

 

  17.6 Severability. The invalidity of any provision of this Lease, as
determined by a court of competent jurisdiction, shall in no way affect the
validity of any other provision hereof.

 

  17.7 Entire Lease. This Lease, together with any attached stipulations, sets
forth the entire agreement between Lessor and Lessee with respect to the subject
matter of this Lease. No subsequent alteration or amendment to this Lease shall
be binding upon Lessor and Lessee unless in writing and signed by each of them.

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IN WITNESS WHEREOF, the parties have executed this Lease as of the date
hereinabove first written.

 

      THE STATE OF UTAH, acting by and through the SCHOOL AND INSTITUTIONAL
TRUST LANDS ADMINISTRATION (“LESSOR”) APPROVED AS TO FORM:      
            MARK L. SHURTLEFF     KEVIN S. CARTER, DIRECTOR     ATTORNEY GENERAL
       

By: 

 

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    By:   

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        THOMAS B. FADDIES        

ASSISTANT DIRECTOR/MINERALS

School & Institutional Trust Lands Administration - LESSOR

        Form Approved: 6-27-08             LESSEE:       By:   

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      Its:   

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STATE OF UTAH

   )      

:

  

COUNTY OF SALT LAKE

   )   

On the 11th day of April, 2007, personally appeared before me THOMAS B. FADDIES
who duly sworn did say that he is Assistant Director of the School &
Institutional Trust Lands Administration of the State of Utah and the signer of
the above instrument, who duly acknowledged that he executed the same.

Given under my hand and seal this 11th day of April, 2007.

 

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NOTARY PUBLIC, residing at:

 

My Commission Expires:

   5/25/2010    LOGO [g95931g55r16.jpg]

STATE OF

   )       :   

COUNTY OF

   )   

On the 9th day of April, 2007, personally appeared before me Steven R. Brown,
signer of the above instrument, who duly acknowledged to me that he executed the
same.

Given under my hand and seal this 9th day of April, 2007.

 

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NOTARY PUBLIC, residing at:

 

My Commission Expires:

   09-07-2010    LOGO [g95931g40z83.jpg]

STATE OF UTAH

   )       :   

COUNTY OF UTAH

   )   

On the      day of             , 20    , personally appeared before me
                         , who being duly sworn did say that he is an officer of
                     and that said instrument was signed in behalf of said
corporation by resolution of its Board of Directors, and said
                     acknowledged to me that said corporation executed the same.

Given under my hand and seal this      day of             , 20    .

 

 

NOTARY PUBLIC, residing at:

My Commission Expires: