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• 4 • <br />7. OVER IDING ROYALT]' LIMITATIONS -- It is agreed that this lease or any <br />subsequent assignment hereof shall not be burdened with overriding <br />royalties the aggregate of which exceeds two percent (28) of the gross <br />value of the minerals or ore at the first point of sale. Lessor must be <br />notified of all overriding royalties accruing to this lease. Violation <br />of the above may subject this lease to cancellation by Lessor. <br />S. ASSIGNMENT -- Lessee, with the written consent of Lessor, may assign this <br />lease as to the leasehold interest of Lessee in all or part of the lands <br />covered hereby, not less, however, than tracts of approximately forty <br />(40) acres, or governmental lots corresponding to a quarter-quarter <br />section for partial assignment. For approval of such assignment Lessor <br />may charge an assignment fee in an amount currently in effect at the time <br />of the assignment. <br />If an assignment of a part of this lease is approved, a new lease <br />designated as an assignment will be issued to the assignee covering the <br />lands assigned for the balance of the term of the base lease on the <br />mining lease form in use at the time of assignment and limited as to term <br />as said lease is limited. The assignor will be released and discharged <br />from all further obligations for such lands assigned, as if the same had <br />never been a part of this lease. <br />No assignment or transfer of this lease will be held valid by Lessor <br />unless made with its consent in writing and duly entered in the books or <br />records of Lessor. <br />Assignment Consideration -- The consideration for approval of assignment <br />by Lessor shall l:e tecLpercent ( ~O$,) of the value of any consideration <br />tendered to Ase;ignor by Assignee for the assignment, Divulgence of the <br />value of these considerations shall be mandatory, in affidavit form, <br />which form shall be presented to Lessor along with the otheY assignment <br />instruments in order to obtain Lessor's approval for the assignment. An <br />assignment does not constitute a new lease but is a continuation of the <br />base lease. Any attempt to withhold this information shall be construed <br />as an attempt to defraud the State of Colorado and shall render this <br />lease null, void, and nonexistent, and all monies paid to Lessor shall be <br />forfeited to Lessor. In addition, the current statutory fees will be <br />paid at the time the assignment record form is submitted. <br />9. AGREEMENTS OUTSIDE THE TERMS OF THIS LEASE -- No assignment of undivided <br />interests or retention or reservation of overriding royalties will be <br />recognized or approved by Lessor; and the effect, if any, of any such <br />assignments or reservations will be strictly and only as between the <br />parties thereto, and outside the terms of this lease, and no dispute <br />between parties to any such assignment or reservation shall operate to <br />relieve Leases from performance of any terms or conditions hereof or to <br />postpone the time therefor. Lessor will and shall at all times be <br />entitled to look solely to Lessee or its assignee shown on Lessor's <br />books as being the sole owner hereof, and for the sending of all notices <br />required by this lease and for the performance of all terms and <br />conditions hereof. <br />Although not binding on Lessor, all instruments of every kind and nature <br />whatsoever, including but not limited to sublease agreements and <br />operating agreements, affecting this lease shall be filed in the records <br />of the Mineral Department of Lessor. Upon request, such Instruments <br />furnished may be kept confidential as consistent within the law. <br />10. REPO T -- After operations begin, it is agreed that on or before the <br />last day of each month during the term of this lease Lessee shall submit <br />a sworn, verified, written report to Lessor, in which report shall be <br />entered and set down the exact amount in weight of all products and the <br />assay thereof mined and removed from said leased premises during the <br />preceding calendar month, which report shall show the amount of work <br />performed during the preceding calendar month. Lessee shall also, <br />annually during the term of this lease, submit a sworn, verified, written <br />statement to Lessor disclosing the number of tons and the assay thereof <br />of all ores, minerals and other materials mined from the premises during <br />the preceding year, Such annual statements may coincide with Lessee's <br />fiscal years or with official calendar years, Further, Lessee shall <br />furnish a map annually showing all workings, depth, thicknesses and shape <br />of any ore body with location of same tied to a corner established by <br />