for each and every year thereafter during the continuance of the lease. If the lease is surrenderd or cancelled, no rent theretofore paid to Lessor will be refunded.

3. Diligence, Prevention of Waste.-To exercise diligence in the conduct of operations, to carry on development and operations in a workmanlike manner and to the fullest possible extent; to neither commit nor suffer waste to be committed upon the land leased; to comply with the applicable laws of the State in which the land is located; to take appropriate steps to preserve the property and provide for the health and safety of workmen; to surrender and return promptly the premises upon the termination of this lease to whomever is lawfully entitled thereto; in as good condition as received, except for the ordi nary wear and tear and unavoidable accidents in the proper use of the premises; not to remove any buildings or permanent improvements erected on the leased property during the lease. If the payments agreed upon by this lease have been made and the other lease terms and applicable regulations have been complied with, the office fixtures and records, personal property, tools, pumping, and drilling outfits, boilers, engines, and all machinery and equipment may be removed by Lessee at any time before 120 days after the lease expires by forfeiture or otherwise, such removal period to be subject to reasonable extension up to one (1) year if required due to weather conditions, economic conditions, or any other casualty or cause beyond Lessee's control.

4. Forest Protection.-Lessee agrees:

(a) Not to cut, destroy or damage timber without prior authority of the Commissioner of the Bureau of Indian Affairs or his authorized representative, such authorization to be made only where required by the pursuance of necessary operations.

(b) To pay for all such timber cut, destroyed or damaged at rates prescribed by the Commissioner of the Bureau of Indian Affairs or his authorized representative, such rates to be determined on the basis of sales of similar timber in the vicinity.

(c) Not to interfere with the sale or removal of timber from the land covered by this lease by contractors operating under an approved timber sales contract now in effect or which may be entered into during the period of this lease.

(d) To do all in its power to prevent and suppress forest, brush or grass fires on the leased land and in its vicinity, and to require its employees, contractors, subcontractors, and employees of contractors or subcontractors to do likewise; to place its employees, its contractors or subcontractors employed on the leased land at the disposal of any authorized officer of the Indian Service for the purpose of suppressing forest, brush or grass fires with the understanding that the payment for such services shall be made at rates to be determined by the Commissioner of Bureau of Indian Affairs or his authorized representative, which rates shall not be less than the rates of pay prevailing in the vicinity for services of similar character: Provided, That no payment shall be made for services rendered in the suppression of fires for which Lessee, its employees, contractors or subcontractors, or the employees of such contractors or subcontractors are responsible.

(e) To pay for the loss of all timber ten (10) inches or more in diameter occasioned by fires for which it, or any of its employees, its contractors, or subcontractors, or the employees of such contractors or subcontractors are responsible for the start or spread, the assessment of the value of such damages to be determined by the Commissioner of Indian Affairs or his authorized representative on the basis of the value of such timber on sales of similar timber in the vicinity; also, to pay liquidated damages at rates to be determined by the Commissioner of Indian Affairs or his authorized representative for all young timber less than ten (10) inches in diameter destroyed by such fires unless a lesser rate of damages shall be approved by the Commissioner of Indian Affairs or his authorized representative, and to pay all costs for the suppression of fires for which it, or any of its employees, contractors, or subcontractors, or the employees of such contractors or subcontractors are responsible.

(f) Not to burn rubbish, trash, or other flammable materials except with the consent of the authorized representative of the Commissioner of Indian Affairs, and not to use explosives in such manner as to scatter flammable materials on the surface of the land during the fire season, except as authorized to do so by such representative.

5. Development. The land described herein shall not be held by Lessee for speculative purposes, but in good faith for the purposes specified. Lessee shall

spend annually each lease year in actual operations, exploration, development, or improvements upon the leased land, or for the benefit of the leased land, including the annual rental, not less than $10.00 per acre. Lessee shall file with the Area Director an itemized statement, in duplicate, within 20 days after each lease year, setting forth the amount and character of the expenditures during the lease year. The statement must be certified under oath by the Lessee or its agent. If Lessee fails to diligently develop or operate the leased property, except when operation is interrupted by a strike, an act of God, or casualty not attributable to the Lessee, this lease will be subject to cancellation. Whenever the Secretary of the Interior or his authorized representative considers the marketing facilities inadequate or the economic conditions unsatisfactory (taking into account the principal marketing requirement that developed reserves and other economic facts must be adequate to induce public utility power plant construction in the immediate area for most advantageous utilization of products produced), he may authorize the suspension of operations, in whole or in part, for such time as he considers advisable, but this does not release Lessee from paying the advance annual rental.

6. Monthly Statements.-To keep an accurate record of operations, showing the sales, prices, dates, purchasers, and the amount of products produced, the amount of products removed, and the actual gross receipts, and to furnish the Area Director sworn monthly reports before the twenty-fifth (25th) day of the succeeding month. All royalty and advance rental due shall be a lien on all implements, tools, movable machinery, and all other chattels used in the operations and upon all of the unsold products obtained under the lease. An audit of the accounts and books of Lessee may be made annually or at any other time directed by the Area Director by a certified public accountant approved by the Secretary of the Interior and at the expense of the Lessee. Lessee shall furnish, through the Area Director, a free copy of the audit to the Secretary of the Interior within 30 days after the completion of each audit.

7. Regulations.-To abide by and conform to any and all regulations of the Secretary of the Interior now or hereafter in force relative to such leases. Rate of royalty, the annual rental, or the term of the lease may not be changed by a future regulation as to the existing term of the lease without the written consent of the parties to this lease. Code of Federal Regulations, Title 30 Section 231.8 regarding restrictions on core holes, their casing, and cementation, although promulgated for mining operations, is by reference made a part of this lease and is to be complied with to the satisfaction of the Area Director or his authorized representative.

8. Assignment of Lease.-Not to assign this lease or any interest therein by an operating agreement including agreements providing for payment of overriding royalty or otherwise, nor to sublet any portion of the leased premises, except with the approval of Lessor and the Secretary of the Interior (which shall not be unreasonably withheld): Provided, That Lessee shall have the right to assign or sublet or enter into an operating agreement with respect to any plant site, together with related rights of way, to any responsible and duly qualified public utility, whether or not affiliated with Lessee, for the purpose of constructing, maintaining or operating a power plant or other installation utilizing products from the leased land, either alone or co-mingled with products from other land, but without releasing Lessee in any respect with respect to its obligations hereunder. If this lease is divided by the assignment of an entire interest in any part of it, each part shall be considered a separate lease under all the terms and conditions of the original lease.

9. Bond. To furnish to the Area Director an acceptable surety bond in the amount of TWENTY THOUSAND DOLLARS ($20,000.00). The right is reserved to the Secretary of the Interior or his authorized representative to increase the amount of bond above the sum named.

10. Liquor.-Lessee further agrees that it will not use or permit to be used any part of said premises for any unlawful conduct or purpose whatsoever; that it will not use or permit to be used any part of said premises for the manufacture, sale, gift, transportation, drinking, or storage of intoxicating liquors or beverages in violation of existing laws relating thereto, and that any violation of this clause by Lessee or with its knowledge, shall render this lease cancellable at the option of the Area Director.

11. Inspection.--The leased premises, producing operations, appurtenances, and all books and accounts of Lessee may be inspected by Lessor or its agents or any authorized representative of the Secretary of the Interior.

12. Disposition of Minerals and Surface.-Lessor expressly reserves the right to lease, sell, or otherwise dispose of the oil and gas, minerals and other substances not constituting products as defined herein, as well as the surface of the lands in this lease under existing law or laws hereafter enacted, such disposition to be subject to the exclusive right of Lessee as to the products covered hereby within the leased area and as to the non-exclusive use of as much of the surface of the leased area as is necessary for the purposes defined in paragraph I.

13. Surrender and Termination.-Lessee may at any time terminate this lease or any part thereof upon the payment of all rentals, royalties, and other obligations due to the Lessor, and the further sum of $5, and in the event restrictions have not been removed, upon a showing reasonably satisfactory to the Secretary of the Interior or his authorized representative that full provision has been made for the conservation and protection of the property, the lease to continue in full force and effect as to the lands not so surrendered. If this lease has been recorded, Lessee shall file a release in form eligible for recordation with its application to the Area Director for termination of this lease.

14. Relinquishment of Supervision by the Secretary of the Interior.—Nothing contained in this lease shall operate to delay or prevent a termination of Federal trust responsibilities with respect to the land by the issuance of a fee patent or otherwise during the term of the lease; however, such termination shall not serve to abrogate the lease. The owners of the land and the Lessee and his surety or sureties shall be notified by the Secretary of the Interior of any such change in the status of the land. After notice of relinquishment has been received by Lessee, this lease is subject to the following further conditions:

(a) All rentals and royalties accruing shall be paid directly to Lessor or its successors in title.

(b) If at the time supervision is relinquished by the Secretary of the Interior as to all lands under this lease, and Lessee has made all payments due under the lease and has fully performed all obligations on its part to be performed up to the time of such relinquishment, then the bond given to secure the performance of the lease and on file in the Indian Office shall be of no further force or effect and shall, upon request, be suitably exonerated, and Lessor shall have the right to demand an appropriate bond in lieu thereof.

15. Water Wells.—Lessee may, at its own expense, drill and equip water wells on the leased premises and agrees that all such wells (as distinguished from wells for products as herein defined) will be left intact and properly cased at the terminaton of the lease by expiration of its term or otherwise. Lessee shall have the right to remove all mechanical pumping equipment installed by it at any wells. If any of said water wells shall produce water surplus to the needs of Lessee, said water shall be available, at or adjacent to the well site, to Lessor and its members in a manner consistent with Lessee's operations. In addition, no use of water by Lessee shall be authorized which conflicts with existing water rights or which unreasonably interferes with the use of water by Lessor and its members.

16. Damages.-Lessee shall conduct all operations authorized in this lease in a manner reasonably consistent with the multiple use of the area and with due regard to safety of all persons and property and to preventing unnecessary damages to vegetation, timber, soil, roads, bridges, cattle-guards, fences, and other improvements, including construction, operation or maintenance of any of the facilities on or connected with this lease and shall not cause damage to the watershed or pollution of the water resources inconsistent with any present or contemplated use thereof. Lessee shall not in its operations hereunder or under any lease executed as contemplated hereby damage or disturb unduly the surface area or esthetic values composing or surrounding the Sulphur Bank Rancheria but with the understanding by the parties that the location in or adjacent to such areas of approprate exploratory, development and operating wells, equipment, power plants, pipe lines and appurtenances contemplated hereby shall not in and of themselves be deemed damages or disturbance for purposes hereof. On termination of operations under this lease. Lessee shall make provisions for the conservation, repair, and protection of the property and leave all of the areas on which Lessee has worked in a condition substantially equal to the condition existing at outset of operations hereunder and in a condition that will not be hazardous to life or limb, and will be to the satisfaction of the Area Director. 17. Liability for Damage.-Lessee is liable for any and all damages resulting from its operations, or the operations of any agent, employee, subcontractor or assignee, under this lease; including injury to Lessor, the tenants, licensees and surface owners, and for any and all damage to, or destruction

of, all property, caused by Lessee's operations hereunder. Lessee shall have the right to exclude all persons from the site or sites of operations hereunder, and areas adjacent thereto, to the extent necessary to comply with reasonable safety measures. Lessee agrees to effect public liability and property damage coverage with an insurer and with limits, reasonably acceptable to Lessor, naming Lessor as an additional insured with respect to the liability provided for in this paragraph, and to evidence such coverage by furnishing an appropriate certificate to Lessor. Lessee agrees to save and hold Lessor and the United States, its employees, licensees, and the surface owner or their tenants, harmless from all suits for injury or claims for damages to persons and property resulting from Lessee's operations under this lease, or the operations of any agent, employee, subcontractor or assignee, including, but not by way of limitation, the following specific claims, demands and damages so resulting:

1. To property of third persons, including members of Lessor's tribe. 2. To third persons, including members of Lessor's tribe, for injury and death.

3. To livestock of Lessor and members of its tribe and third persons, and to the buildings and structures of the Lessor and members of its tribe situated within the reservation.

4. Liens or lien claims on account of labor performed upon or material furnished to property covered by this lease at the instance of Lessee, or any agent, employee, subcontractor or assignee of Lessee.

18. Roads.-Lessee may use existing roads, if any, on the land (provided Lessee assumes the responsibility for maintenance and repair necessitated by the increased use thereof), and may construct, and maintain, at its own expense, any additional roads across Lessor's lands that are necessary in carrying on the actual work after the location and type of these roads suitable for Lessee's purposes has been approved in writing by the Area Director. Lessee shall have the right to limit use by others of any such roads to comply with reasonable safety measures. The public obtains no rights to these roads by reasons of Lessee's use, and upon termination of this lease or if at any time it becomes unnecessary for Lessee to use the road for conducting the operations authorized under this lease, the right to use the road shall thereupon cease and all the rights shall revest in Lessor in accordance with law. Lessee shall hold Lessor and the United States harmless, and indemnify them, against any loss or damage that might result from the negligent construction or maintenance by Lessee of any road. Installations made in connection with roads by Lessee may be removed by the Lessee. Lessee shall have the right, free of charge, to install on the premises power and water lines which may be removed by Lessee upon termination of the lease.

19. Indian labor.-Lessee shall do everything practicable to employ Indians, giving priority to Lessor and members of its tribe, in all positions for which they are qualified and available and shall pay the prevailing wage rates for similar services in the area. Lessee shall also do everything practicable to hire equipment of Indians, giving like priority, in the hauling of all materials under this lease, insofar as Lessee does not use its own equipment for that purpose, at competitive rates. Lessee agrees to make special efforts to work Indians, giving priority to the Lessor and members of its tribe, into skilled, technical, and other higher jobs in connection with the Lessee's operations under this lease.

20. Insurance, social security, taxes, and so forth.-Lessee agrees to carry such insurance covering all persons working for Lessee in, on, or in connection with the leased premises as will fully comply with the provisions of the statutes of the State of California covering workmen's compensation and occupational disease, as are now in force or as may be amended. Further, Lessee agrees to comply with all the terms and provisions of all applicable laws of the State of California, and of the United States as now exist or as may be amended, pertaining to Social Security, unemployment compensation, wages, hours and conditions of labor; and to indemnify and hold Lessor and the United States harmless from payment of any damages occasioned by the Lessee's failure to comply with these laws. Lessee shall pay all taxes lawfully levied or assessed against its property interests or operations hereunder.

21. Succesors in Interest.-It is further covenanted and agreed that each obligation under this lease shall extend to and be binding upon, and every benefit hereof shall inure to, the successors and assigns of the parties to this lease.

22. Government Employees Cannot Acquire Lease.-No lease, assignment thereof, or interest therein will be approved to any employee or employees of the United States whether connected with the Indian Service or otherwise, and

no employee of the Interior Department shall be permitted to acquire any interest in such leases by ownership of stock in corporations having leases or in any other

manner.

23. Cancellation and Forfeiture.—When, in the opinion of the Secretary of the Interior or his authorized representative, there has been a violation of any of the terms or conditions of this lease before restrictions are removed, the Secretary of the Interior or his authorized representative has the right at any time after 30 days' notice to Lessee, specifying the terms and conditions violated, and after a hearing, if Lessee shall so request within 30 days of receipt of notice, to declare this lease void, and Lessor may then take immediate possession of the lands. After restrictions are removed, Lessor may use any available remedy in law or equity for breach of this contract by Lessee.

24. Violations of Lease.-It is understood and agreed that violations of this lease shall be acted upon in accordance with the regulations in 25 C.F.R., Part 131. The Lessee agrees that it will not use or cause to be used any part of the leased premises for any unlawful conduct or purpose.

25. Upon Whom Binding. It is understood and agreed that the covenants and agreements hereinbefore mentioned shall extend to and be binding upon the heirs, assigns, successors, executors and administrators of the parties to this lease. While the leased premises are in trust or restricted status, all of the Lessee's obligations under this lease, and the obligations of its sureties are to the United States as well as to the owner of the land.

In Witness Whereof, the said parties have caused this instrument to be fully executed on the day and year first above mentioned.

Lessor. Granted and approved in behalf of the adult members of Sulphur Bank Indian Rancheria pursuant to 25 CFR 131.2(a)5 and petition of said members dated April 7, 1964.

LEONARD M. HILL.

Area Director.

Pursuant to authority delegated by Order 551 (16 FR 2939) Amdt. No. 70 (26 FR 3499). Date: May 22, 1964.

STATE OF CALIFORNIA, COUNTY OF SACRAMENTO

I, Regina H. Ellston, a Notary Public in and for the State of California do hereby certify that before me personally appeared Leonard M. Hill, known to me to be the Area Director of the Sacramento Area Office of the Bureau of Indian Affairs, Department of the Interior, and the person who subscribed the foregoing instrument, and acknowledged to me that he executed the same in behalf of the United States of America, sitting in his official capacity as the Area Director of the Sacramento Area Office of the Bureau of Indian Affairs.

In Witness Whereof, I have hereunto set my hand and official seal on this 22nd day of May, 1964.

[SEAL]

REGINA H. ELLSTON,

Notary Public in and for the County of Sacramento, State of California. My commission expires April 30, 1965. Lessee.-S. I. Corporation, A California Corporation.

Attest:

WM. S. TOWNE,
President.

CHRISTOPHER CLEGG,
Secretary.

STATE OF CALIFORNIA, COUNTY OF SAN FRANCISCO, SS

On this 18th day of May, 1964, before me personally came Wm. S. Towne, known to me who being duly sworn, did depose and say that he is President of S. I. Corporation, the corporation described in and who executed the above instrument; that he knows the seal of said corporation; that it was so affixed by authority conferred by said corporation, and that he signed his name hereto by like authority.

[SEAL]

MARION ABRAHAMSON,

Notary Public in and for the County of San Francisco, State of California. My commission expires June 12, 1966.