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Jul 19 04 09:38a Randolph W. Starr 970 669 3841 p.5 <br />07/18/2004 OS: SO FA7C a70 S99 1709 PITTINGTON I®007 <br />- 3 - <br />The Bosh may present drabs upon the Bask forpayment under the Islter of Credit if the Board dclermines <br />that reclamation which ought to twee been performed by the Operator, or ila suooe~ors or assigtts, retttairrs <br />uttpetiormed. No ofhercondition precedentaeed be tnl6lled so mdde dre Baatid to receive the amamts ofsrrdt <br />dtafis. However, i>, upon completion ofsuch xeclamation by the Hoard, the amounts expended for mismatiar <br />shall be leas than the amount received 6rom the Bank, the excess shall be promptly refuadod to ilre Operator. <br />if or to the extent that the Bank shall cancel its Letter ofCtedit and such assurance shall not concrmentlybe <br />reduced to a cash deposit as substitute assurara;e, the Operator agrees that it wilt forthwith provide substituu <br />assurance, in fntm and substance approved by the Soacd, equal to the amo®t of the Letter ofCYedit which has <br />been so canceled and not reduced to a cash deposit <br />With the prior consent of the Board, which consent shall not be unreasonably withheld, the Operator may <br />from time to time change the Bank whose Letter of Credit is held by the State as assurance or alter the form of <br />assnrartce of fitranciai responsibility held by the State for the faithfnt performance by the tperator of its <br />obligations hecermder; provided that at all times there shall be in existence and delivered to the Board such <br />assurance arother evidence of 5aancial responsibility as shall 6e regnirod by applicable laws and rogulstiom of <br />the State of Colorado and as shall be, in forth and subsfartce, approved by tiro Board or the Division <br />11-e obligation of the Operator shall continue until the Board has released this Financial Warranty or has <br />ordered it forfeited in accordance with applicable provisions of the Aet. It is understood that periods of years <br />may rteccasariiy be rCgW[ed before detennirtation can be made that reclamation of the AEfecsad Lands has been <br />astisfactodly completed. II is also rocognizad that, as raelart>adon is accomplished, the amoutrt of this Financial <br />Watranrymay baredueod with the approval ofthe Board so that it reIIects the then current estimated cost ofthe <br />tcmainirtg reclamation of the Affected Lands. No revising extaosioq or renewal of the permit ~ of the time <br />allowed to complete reclamation aball dimrttish the Operator's obligation wider this Firtarteia] Warranty. <br />In' any single year during the life of8re pctmik the arsormt of dre Financial Warranty shall trot exceed the <br />estimated cost of fully xeclaiming all lands to be atFected in said year, Plus all lands affected in ptsvious permit <br />years and not yet fully reclaimed. Reclanoatioa costs shall be computed with refetesce to curtest reclamation <br />casts <br />The amotmt of this Financial Warranty is baud upon estimates as to the cost of reclamation, and does cot <br />operate to liquidate, limit, enlarge orrestt'ict the Operators obligations to oorapJete the reclamation, evert though <br />the seiner costa thereof may substantially excced the amount of this Financial Watraety. <br />ThisFiaaocia] WaaantyahallbosubjeettofiorfeiturewhenevertheBoarddete+minesthatanyatearmoreof <br />the following circumstances exist: <br />1. A Cease and Desist Order entered pursusm! !o Seeflast 34-32-124 of the Act has been <br />violated, and the corrective action proposed in such Order has nm been completed. although ample time to have <br />Baste so has elapsed; or <br />