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<br />payment is made within six months following its due date, but <br />this grace period shall not apply to payments due pursuant to <br />the Assignment described in paragraph 1(d) below. <br />(c) The Note shall be secured by a deed of trust <br />to whatever lease or sublease rights AMCC holds (to the extent <br />that AMCC has the right to encumber such rights) to mine all <br />coal which underlies the West half of Section 16, Township <br />35-N, Range 10-W, La Plata County, Colorado and which lies at <br />least 100 feet above the bottom seam of coal (sometimes called <br />,. <br />the "A-1 seam") unde[lying such land (the "Deed of Trust"). <br />The Deed of Trust will grant McGriffin, upon default under the <br />Ncte and foreclosure, the right to mine such coal subject to <br />all royalties and other obligations owed by AMCC or Dutanqo to <br />others with regard to such coal and subject to a production <br />royalty of $.75 per ton payable to AMCC. The Deed of Trust <br />will include a due on sale clause providing that all amounts <br />due under the Note shall be paid in full upon sale of more than <br />508 of the Properties or more than SOS of the stock in AMCC. <br />(d) The Note will be further secured by an <br />assignment from AMCC to McGriffin of $.25 per ton out of AMCC's <br />minimum production royalty from Durango of $1.25 per ton, which <br />assignment shall be recorded in the real property recocds of <br />La Plata County, Colorado (the "Assignment"). The Assignment <br />shall provide for minimum annual payments to McGrifEin in the <br />_3_• <br />