Fill and Sign the Oil Gas and Mineral Titles Resolving Perenial Problems Form

IN -Rental, Pooling (Rev. 8/99) OIL AND GAS LEASE This Oil and Gas Lease (the “Lease”) is dated _____ (the “Effectiv e Date”). The parties to this Lease are ____, as Lessor (whether one or more), whose address is _____, and ____, as Lessee, whose address is _____. 1. Lease Description. In consideration of Ten Dollars ($10.00) paid by Lessee, and other good and valuable considerations, the receipt and sufficiency of which are a cknowledged, and for the covenants contained in this Lease, Lessor grants, leases, and lets exc lusively to Lessee the following de scribed land (the “Land”) in the District/Township of _____, _____ County, Indiana, and bound substantially by lands now or formerly owned as follows: On the North by: On the East by: On the South by: On the West by: ; being the same land acquired by Lessor in that instrument recorded in Book/Volume _____, page of _____, of the _____ Records of the county in which the Land is located. The Land is estimated to comprise _____ acres, whether the tract or tract s contain more or less, which acreage figure may be relied on by Lessee in determini ng the amount of rentals or other payments provided for in this Lease. In addition to the Land described a bove, this Lease also covers all accretions and any strips or parcels of land now or later owned by Lessor which are contiguous or adjacent to the Land, including any interest in the Land which Less or may later acquire by reversion, prescription, or otherwise, together with all oil, gas, and the ir constituents underlying lakes, rivers, streams, roads, easements, and rights of way whic h traverse or adjoin any of the Land. All of the Land and rights of Lessor that are covered by and the subject of this Lease may be referred to as the “lease premises.” 2. Term of Lease . This Lease shall be in force for a primary term of _____ years from the Effective Date, and as long thereafter as oil or gas or other substances covered by this Lease are produced in paying quantities from the lease premises or from lands pooled wi th the lease premises, or this Lease is maintained in force pursuant to any of its other provisions. 3. Lease Rights Granted . Lessee shall have and is granted by Lessor, during the term of this Lease, the exclusive right to enter on the Land to conduct geologic al, geophysical and seismic surveys and explorations, and to operate for, produce and save oil, gas, and sulfur produced in connection with oil and gas; together with the right to drill wel ls, recondition producing wells and re-drill and use abandoned well on the Land for all those purpose s; together with rights-of-way and servitudes on, over, and through the Land for roads, pipelines , telephone, electric power lines, structures, plants, drips, tanks, stations, structures f or machinery, gates, meters, regulators, tools, appliances, materials and other equipment that ma y be used in exploring for and producing oil, gas, and sulfur storage of gas and liquids, and all other rights and privileges necessary, incident to and convenient for the operation of the Land for production and transportation of oil, gas, and sulfur, and the injection of gas, air, water, or other fluids for the enhanced recovery and production of oil, gas, and sulfur; together with the rig ht to use oil, ga s, and water from the Land free of cost to Lessee for all such purposes, e xcept water from Lessor’s wells or ponds; to remove, either during or after the term of this Le ase, any and all property and improvements placed or located on the Land by Lessee, including the right to draw and remove casing; together with the right of ingress, egress, and regres s on, over, and through the Land for any of the purposes of this Lease. 4. Delay Rental Payments. If operations for drilling are not commenced on the lease premises, or on acreage pooled with the lease premises, as provided in Sec tion 6 below, on or before one (1) year from the Effective Date, this Lease shall termi nate as to both Lessor and Lessee unless Lessee, on or before the expiration of that period, shall pay or tender to Lessor, or to the credit of Lessor in _____ Bank, or any successor depository, the sum of _____ Doll ars ($_____), the “delay rental,” which shall extend for twelve (12) months the time within which drilling operations may be commenced. Thereafter, annually, in like manner and on like payments or tenders of delay rental, the commencement of drilling operations may be further deferred for periods of twelve (12) months each during the primary term. Drilling operations shall be deemed to be commenced when the first material is placed on the lease premises or when the first work, other than surveying or staking the location, is done which is necessary for the operations. 5. Royalty Payments. The royalties reserved by Lessor, and which shall be paid by Lessee, are: (a) on oil (including but not limited to distillate and condensate) _____ (_____) of that produced and saved from the lease premises, the same to be delivered at the w ells or to the credit of Lessor in the pipeline to which the wells may be connected, provided; how ever, Lessee, at its option, may from time to time purchase the royalty oil, paying not less than the price prevailing in the pricing area for oil of like grade and gravity at the time of delivery; (b) on gas, including casinghead gas and all other gaseous or vaporous substances, produced from the La nd and sold or used off the lease premises or in the manufacture of gasoline or in the extraction of sulphur or any other product, the market value at the wells of _____ (_____) of the gas sold or used, with the market value at the wells in no event to exceed the net proceeds received by Lessee calculated or allocated back to the wells from which produced, making allow ance and deduction for a fair and reasonable charge for gathering, compressing, and making the g as merchantable, provided, that on gas sold at the wells, the royalty shall be _____ (_____) of the net proceeds received by Lessee from the sale, all allowances and deductions, and prov ided further that, if any sale of gas is regulated as to price by any governmental agency ha ving the jurisdiction, the market value or net proceeds shall in no event exceed the amount received by Less ee, not subject to refund, calculated, or allocated back to the wells from which produced, maki ng allowance and deduction for a fair and reasonable charge for gathering, compressing, and making the gas merchantable, and which amount may be further adjusted up or down prospectively or retrospectively when the price or rate authorized by the governmental agenc y is finally determined; (c) on sulphur extracted and marketed, One Dollar ($1.00) per long ton. Lessor agrees to pay any and all taxes levied or assessed on the Lessor’s interest in t he production of oil, gas, and sulphur from the lease premises and Lessee is authorized to pay the taxes and assessments on behalf of Lessor and to deduct the amount so paid from any m onies payable to Lessor. In the event any extraneous substance (being any substance that is obtained from source s other than the lease premises or lands pooled or unitized with the lease pre mises) is injected into subsurface strata in connection with secondary, tertiary, or other enhanced recove ry operations, any like substance thereafter produced, or contained in oil or gas produced from the strata shall be deemed to be part of the extraneous substance injected until the total volume equals the total volume of the extraneous substance injected, and no royalty shall be payable on any extraneous substance. During any period (whether before or after expiration of the primary term ) where there is a gas well on the lease premises or on a unit that includes all or a part of the lease premises, however designated, capable of producing gas and gas is not being sold or used on or off the lease premises and the well or wells are shut-in and there i s no current production of oil or operations on any part of the lease premises sufficient to keep this L ease in force, Lessee shall be obligated to pay or tender as shut-in rental an amount (which shall be the s ame and shall be paid regardless of the number of shut-in wells and regardless of whether the shut-in well or wells be located on the lease premises or on other acreage included in a unit) for each twelve (12) month period equal to the annual rental provided for in this Lease and it will be considered that gas is produced, for all purposes of this Lease, during any period that a well or wells are shut -in; such amount for the first twelve (12) month period to be payable within ninety (90) days following shutting-in of the last well, and payment for each subsequent twelv e (12) month period shall be payable on or before the beginning date of each subsequent twelve (12) month period. The amount of each rental payment or tender may be paid by check or draft of Lessee in the same manner as provided in Section 4, and the payments may be commenced a nd continued either during or beyond the primary term. Lessee’s failure to properly pay renta l payments shall render the Lessee liable for the amount due but shall not operate to termi nate this Lease. Lessee shall use reasonable diligence to market gas capable of being produced from a shut -in well or wells, but shall be under no obligation to market gas under terms, conditions, or c ircumstances which, in Les see’s judgment, exercised in good faith, are unsatisfactory. 6. Pooling . Lessee is given and granted the right, at its option, at any time and from time to time, within the primary term or at any time during which this Lease may be extended by any of its provision, to pool, unitize, and reform, enlarge and/or reduce a unit or pool, and repool all or any part or parts of the lease premises or rights, depths, strata, or formati ons, with any other land in the vicinity of the Lease, or with any leasehold, operating, or other rig hts or interests in other land to create units of such size and surface acreage as Lessee m ay desire but containing not more than eighty (80) acres for an oil well and not more than six hundred forty (640) a cres for a gas well plus, in each case, a ten percent (10%) acreage tolerance. If at any time larger units are specified or permitted under any then applicable law, rule, regulation, or order of any governmental authority for the drilling, completion or operation of a well, or for obtaining maximum allowable, any unit may be established or enlarged to conform to t he size authorized or permitted. Each unit or reformation of a unit may be created by government al authority or by recording in the appropriate county office a declaration containing a descripti on of the pooled or unitized acreage. Any well which is commenced, or is drilled, or is on a ny part of any lands which have been or later pooled with the lease premises shall, except f or the payment of royalties, be considered a well commenced, drilled, and producing on the lease premises subject to this Lease. There shall be allocated to the portion of the lease premises included in any unit, pooling or repooling the proportion of the actual production from all lands unitized, pooled or repooled as the portion of lease premises, computed on an acreage basis, bears to the entire acreage of the lands unitized, pooled or repooled. The production so allocated shal l be considered for the purpose of payment or delivery of royalty to be the entire produc tion from the portion of the lease premises included in the unit, pooling or repooling in the sa me manner as though produced from the portion of the lease premises under the terms of this Le ase. A unit established by the terms of this Lease shall be valid and effect ive for all purposes of this Lease even though there may be land, oil, and gas rights, royalty, and/or leasehold i nterests in land within the unit which are not pooled or unitized, or even though there may be a f ailure of the leasehold title (in whole or in part) to any tract or interest included in a pooled unit. 7. Warranty and Lesser Interest . Lessor warrants and agrees to defend the title to the Land, covenants that Lessee will have quiet enjoyment under this Leas e, covenants that Lessee shall have the benefit of the doctrine of after-acquired title, and cov enants that Lessee, at its option, may discharge any tax, mortgage, or other lien on the Land in the event of default in payment by Lessor, and be subrogated to the rights of the holder of a mortgag e or lien with the right to enforce same and apply royalties and payments accruing under this Lease toward satisfying same. Without impairment of Lessee’s rights under this w arranty in event of failure of title, it is agreed that if Lessor owns an interest in the Land le ss than the entire oil and gas estate covered by this Lease, then the rentals and royalties to be paid Lessor shall be reduced proportionately. 8. Notices . Failure to pay or an error in paying any rental or other payment due Lessor shall not constitute a ground for forfeiture of this Lease and shall not affect Lessee’s obligation to make a payment, but Lessee shall not be considered in default on account of a failure or error until Lessor has first given Lessee written notice of the non-payment and Le ssee shall have failed for a period of thirty (30) days after receipt of the notice to make the payment. 9. Ownership Changes . The rights of Lessor or Lessee may be assigned or transferred in whole or in part, but no change or division in ownership of the lease premises, s hut-in rentals, storage rentals, or royalties, or in the status of Lessor or Lessee, howev er accomplished, shall operate to enlarge the obligations or diminish the rights of Lessee. No change in owne rship or status of Lessor shall be binding on Lessee until thirty (30) days after Lessee shall have been furnished by U.S. mail, at Lessee’s principal place of business, with a certified copy of the recorded instrument or instruments satisfactory to the Lessee, evidencing the change in ownership. In the event of the death of any person entitled to any payment provided for in this Lease, Lessee may pay or tender the same to the credit of the dece ased or to the estate of the deceased until the time Lessee is furnished with proper evidence of the appointment and qualification of an executor or administrator of the estate or, if there be none, evidence satisfactory to Lessee as to the heirs or devisees of the deceas ed and that all debts of the estate have been paid. If at any time two or more parties are entitled to or adversely claim all or any part of any sums payable under the terms of this Lease, Lessee may pay or tender the sums either jointly to the parties or separately to each in accordance with their r espective ownership. If six or more parties become entitled to royalty, Lessee may withhold payment unless and until furnished with a recordable instrument executed by all parties designating an agent to receive payment for all. In the event of assignments of this Lease as to a segregated portion of the lease premises, shut-in rentals, and storage rentals payable under the terms of t his Lease shall be apportionable between the several leasehold owners ratably according to the surface area of each, and the failure to pay shut-in rentals or storage rentals on a segre gated portion of the lease premises shall not affect the rights of the party holding any other seg regated portion. In the event of assignment, in whole or in part, liability for breach of any obli gation of this Lease shall rest exclusively on the owner of this Lease or of a portion of the Lease who commits the breach. 10. Release of Lease . Lessee, at any time, and from time to time, may surrender this Le ase as to all or any part or parts of the lease premises by tendering an appropri ate instrument of surrender to the Lessor or filing for record a release or releases of this L ease as to any part or all of the Land, and then this Lease and the rights and obligations of the parti es shall terminate as to the part or parts so surrendered. On each surrender as to any part or parts of the l ease premises all payments specified in this Lease shall be proportionately reduced on an acreage basis, and Lessee shall maintain the rights to the surrendered portion as may be appropri ate to its enjoyment of the portion not surrendered. Lessee shall have the right at any time during or after the expiration of this Lease to remove all machinery, equipment, fixtures, buildings, or other structures placed on the lease premises by Lessee, including the right to pull and remove all casing. If this Lease is ever terminated, forfeited, or expires, the Lessee (or Lessee’s successors or assigns) shall execute a release or other form of document terminating or releasing the Lease, and file it of record in the county or counties where the lease premises are located. If the Lessee or Lessee’s successor or assigns fail to release or cancel the Lea se, on its forfeiture, termination, or expiration, the then current owner of the Land may compel a cancellation of the Lease pursuant to any applicable or operable law or statute, in effect, in the st ate in which the Land is located. 11. Adverse Claims . In case of notice of or an adverse claim to the lease premises, a ffecting all or any part of the shut-in rentals, storage rentals or royalties, Lessee ma y withhold payment or delivery of the same until the ownership is determined by compromise, or by final decree of a court of competent jurisdiction, and to this end Lessee may file a petition for interpleader. 12. Surface Use . No well shall be drilled nearer than two hundred (200) feet of any house or barn now on the lease premises without the written consent of Lessor. Les see shall pay for damages caused by Lessee’s operations to gr owing crops on the Land. When requested by Lessor, prior to the laying of any pipeline, Lessee shall bury Lessee’s pipeline below plow depth on cultivated lands. 13. Storage . Lessee shall have the exclusive right to use any stratum or stra ta underlying the lease premises for the storage of gas or liquids and may, for such purpose, re open and restore to operation any and all abandoned wells on the lease premises and may drill new wells for the purpose of injecting and storing gas or liquids in a stratum or strata and w ithdrawing the gas or liquids. If Lessee intends to use the premises for such purpose, or determine s that it is using the premises, Lessee may deliver to Lessor or have recorded in the county or c ounties in which this Lease is recorded a declaration that the premises are being used, or from a specified date will be used, for gas or liquid storage, and thereafter Lessee shall have the exc lusive right to use the premises for gas or liquid storage until the time as Lessee delive rs to Lessor or h ave recorded in the county or counties a surrender of the right granted to Lessee by this se ction of the Lease or until Lessee shall intentionally abandon the right to use the premises for storage. During the period or periods that Lessee utilizes the lease premises for the stora ge of gas or liquids, the royalties provided in this Lease to be paid to Lessor shall accrue and be come payable only on the gas and liquids that are taken from the lease premises by Lessee ov er and above the amount which Lessee stores or has stored in the stratum or strata. For and during the period or periods that Lessee uses the lease premises for storage, Lessee shall pay Lessor a minimum rental of One Dollar ($1.00) per acre per year on the number of acres covered by this Lease, this paym ent to be made not later than sixty (60) days from and after the end of each twelve (12) month period during which the lease premises are utilized for storage. Lessee is expressly granted the right to use so much of the surface of the premises as is reasonably necessary in the exercise of the rights granted to Lessee by this section. The rights granted to Lessee by this section shall continue in force for the period of time specified, but this Lease, insofar as it g rants to Lessee the right to prospect and explore for, and produce oil and gas from stratum or strata other than thos e employed in storage, shall not be continued in force solely by the storage of gas or liquids as provided in this section. 14. Regulations and Delays . Lessee’s obligations under this Lease, whether express or implied, shall be subject to all applicable laws, rules, regulations, a nd orders of any governmental authority having jurisdiction, including restrictions on the drilli ng and production of wells, and the price of oil, gas, and other substances. When drilling, rew orking, production or other operations are prevented or delayed by any laws, rules, regulations or orders, or by the inability to obtain necessary permits, equipment, services, material, w ater, electricit y, fuel, access or easements, or by fire, flood, adverse weather conditions, war, sabot age, rebellion, insurrection, riot, strike, or labor disputes, or by inability to obtain a satisfa ctory market for production or failure of purchasers or carriers to take or transport production, or by any othe r cause not reasonably within Lessee’s control, this Lease shall not term inate because of the prevention or delay, and shall be maintained in force and effect for so long as the prevention or delay continues, and for ninety (90) days thereafter, or so long as this Leas e is maintained in force by some other provisions, whichever is the later date. Lessee sha ll not be liable for the breach of any express or implied covenants of this Lease when drilling, product ion, or other operations are so prevented, delayed, or interrupted. 15. Breach or Default . In the event Lessor considers that Lessee has not complied with the express or implied obligations of this Lease, Lessor shall notify Less ee in writing of the facts relied on as constituting a breach of the obligations. Lessee shall t hen have sixty (60) days after receipt of that notice within which to meet or commence to meet all or any part of the breaches alleged by Lessor. The service of the notice shall be precedent to t he bringing of any action by Lessor for any cause, and no action shall be brought until the lapse of sixty (60) days after service of the notice on Lessee. Neither the service of the notice nor the doing of any acts by Lessee aimed to meet all or any of the alleged breaches shall be deemed an admission or presumption that Lessee has failed to perform all of Lessee’s obligat ions. However, after production of oil or gas has been obtained from the Land or land pooled with all or pa rt of the lease premises this Lease shall not be subject to forfeiture or loss , either in whole or part, for failure to comply with the express or implied obligations of this Lease except after final judicial ascertainment of the failure and after Lessee has been given a peri od of sixty (60) days after any final ascertainment to prevent a loss or forfeiture by complying with a nd discharging the obligations which the Lessee has been judicially determined to be in default. 16. Dower and Homestead . Lessor expressly relinquishes dower and releases and waives all rights under and by virtue of the homestead exemption laws of the sta te in which the lease premises are situated insofar as the same in any way affects t he purposes for which this Lease is made. 17. Title Curative . Lessor agrees to execute affidavits, ratifications, amendments, and other instruments as may be necessary to carry out the purposes of this Lease. 18. Execution . Should any one or more of the parties named as Lessor fail to execute t his Lease, it shall nevertheless be binding on the party or parties who execute it, and additional parties may execute this Lease as Lessor, and this Lease shall be binding on each party executing it notwithstanding that such party is not named as Lessor; and all of t he provisions o f this Lease shall inure to the benefit of and be binding on the parties and their respecti ve heirs, legal representatives, successors, and assigns. This Lease is executed by Lessor as of the date of the acknowledgm ent below, but shall be effective as of the Effective Date stated above. Lessor Individual STATE OF COUNTY OF Before me, ____, (title of officer) this ____ day of ____, ____, ____ acknowledged the execution of the annexed (name of instrument). Notary Public in and for the State of Printed Name: Commission Expires: Corporate STATE OF COUNTY OF Before me, ____, this day of ____, personally appeared by ____ and ____ (name of officers), its President and Secretary respectively, and acknowledged the execution of the foregoing instrument. Notary Public in and for the State of Printed Name: Commission Expires: