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<br />9. PENALTIES -- A penalty shall be imposed for, but not limited to, late payments, improper payments, operational <br />. deficiencies of any kind whatsoever, violations of any covenants of this lease, or any false statements made to <br />Permitter_ Penalties shall be defeiinined~By Permitter unless otherwise provided-for by law and may be in the <br />form of, but not limited to, interest, fees, fines, and/or lease cancellation. A penalty schedule shall be prepared <br />by Permitter and shall become effective immediately afrer public notice. Said schedule may be changed from time <br />to time after such notice. <br />10. ASSIGNMENT -- Permittee, only with written consent of Permitter, may assign this lease as to the leasehold <br />interest of such Permittee in all or part of the lands .covered hereby; not less, however, than tracts of <br />approximately forty (40) acres or governmental lots corresponding to aquarter-quarter section for any partial <br />assignment. <br />No assignment of undivided interests or retention or reservation of overriding royalties will be recognized <br />or approved by Permitter, and the effect, if any.,.of any such assignments or reservations will be strictly and only <br />as between the parties thereto and outside the terms o this lease. No dispute between parties to any assignment or <br />reservation shall operate to relieve Permittee from performance of any terms or conditions hereof or to postporie <br />the time therefor. Permitter will at all times be entitled to look solely to Permittee or his assignee shown on <br />Permitter's books as being sole owner hereof, and for the sending of all notices required by this ]ease, for the <br />performance of all terms and conditions hereof. <br />If an assignment of a part of this lease is approved, a new lease designated as an assignment will be issued <br />to the assignee covering the lands assigned for the balance of the term of the base lease on the mining lease form <br />in use at the time of assignment and limited as to term as said lease is limited. The assignor will be released and <br />discharged from all further obligations for such lands assigned, as if the same had never been a part of this lease. <br />11. ASSIGNMENT CONSIDERATION -- The consideration for approval of assignment by Permitter shall be 10% <br />of the value of any consideration tendered to Assignor by Assignee for the assignment. Divulgence of"the value <br />of these considerations shall be mandatory, in affidavit form, which form shall be presented to Permitter along <br />with the other assignment instruments in order to obtain Permitter's approval for"the assignment. An assignment <br />does not constitute a new lease but is a continuation of the base lease. Any attempt to withhold this information <br />shall be construed as an attempt to defraud Ute State of Colorado and shall render this lease null, void and <br />nonexistent, and all moneys paid to Permitter shall be forfeited to Permitter. In addition, the current statutory fees <br />will be paid at the time the assignment record form is submitted. <br />12. WEIGHTS AND MEASUREMENTS <br />WEIGHTS -- It is agreed that all ores, minerals and other materials mined and taken from the leased premises <br />shall be weighed and assayed and the weight and assay thereof shall be entered in due form in weight and assay <br />records kept for such purposes by Permittee. <br />Ton means 2000 pounds. Ton shall be determined by official Colorado State certified scales or other <br />methods approved by Permitter. <br />MEASUREMENTS - It is agreed that all ores, minerals- and other materials mined and taken from the leased <br />premises shall be recorded b the counting of truckloads for mine run material and by the volume measurement <br />of stockpiles of washed material and shall be entered in due form in records kept for such purposes by <br />Permittee. <br />Yard shall mean loose cubic yard afrer extraction from the pit and before. washing unless otherwise stated. <br />If yard is measured in the pit it shalt be bank cubic yard and adjusted with an appropriate bulking factor. <br />13. STEWARDSHIP TRUST STIPULATION-- Permitter shall specify certain stipulations with respect to use of [he <br />surface if said surface is included in the Stewardship Trust prior to [he issuance of this Lease. These stipulations <br />are attached as Exhibit 1 and by this reference incorporated herein. . <br />14. MINING METHODS -- Only mining methods that will insure the extraction of the greatest possible amount of <br />minerals consistent within the laws and with prevailing good mining practice shall. be used: <br />15. OPERATION PLAN -- All plans for exploration and mining shall be submitted to Permitter for approval by <br />- Pcrrnitier before such operations begin. 'fttese plans will include, buf not be limited to, location of additional <br />roads, location of access points to the Leased Premises, and location of any cattle guards or gates. These plans <br />shall include provisions for control of weeds. <br />16. ENVIRONMENTAL ANALYSIS -- Permitter may require that Permittee submit an environmental analysis for <br />approval by Permitter before any exploration or mining begins. <br />Page 3 of 7 <br />