2005-10-12_PERMIT FILE - M1998059

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- 2 - ofthe Act and all applicable rules and regulations of the Board, as amended Rom time to time. WHEREAS, in its application for the permit, the Operator has agreed with the Board to provide fur reclamation of the Affected Lands that are now, or may become, subject to the permit, as required by law. WHEREAS, the Board has determined, in accordance with the Act, that the estimated costs ofreclatnatiorr of the Affected Lands are those amounts for the stated periods of time as set forth herein. Said tunount mey be amended from time to time to reflect revised estimates of said costs of reclamation. WHEREAS, The Operator, in accordance with the Act, has promised and hereby promises the Board that it will be responsible for art of the estimated costs of reclamation with regard to the Affected Lands. WHEREAS, the Board has determined that the Financial Warranty by the Operator equals the estimated costs of reclamation, as approved by the Board, with regard to the Affected [.ands. WHEREAS, as proof of its financial responsibility, the Operator has proceeded pursuant to Section 3432-117(3)(a)(II)oftheAct and has caused the First National Bank of Fleming , State of Colorado (the "Bank") to issue its Irrevocable Lettero£CreditNo. dated October 11 .2005 payabletolheBoazd in the amount of Twenty Four Thousand Dollars (S 24 , 000.00 1 for the period fiom October 11 2005 ,through October 11 . , 2006 and hasdeGve[edittotheBoard to be held by the Board as proof of the Operator's financial responsibility under this financial warranty. The Bank is not a party to this agreement; its obligations aze set forth in its Letter of Credit. Nottting in this Financial Warranty diminishes or qualifies the Bank's obligation under its Letter of Credit. NOW THEREFORE, the Operator is held hereby Cumly unto the State of Colorado in the amount of tiioae sums for those periods of time as set forth herein, until this financial warranty is amended or released in accordance with applicable law. The Boazd may, for good cause shown, increase or decrease the amount and duration of this financial warranty. The Operator shall have sixty (60) days after the date lice ofany such adjustment to fulfill all ru'w requirements. The Operator shall notify the Board immediately of any event which may impair this financial warranty. Additionally, the Warrantor reserves the right to cancel this Financial Warranty, effective only upon an anniversary date, and only by giving written notice to the effect, mailed by Certified Mail, at least ninety (90) days prior to such anniversary date, addressed to both the operator at its address herein stated, and to the Boanl or Division at the address herein stated. ICthe Board receives such notice, or otherwise has reason to believe that this Financial W arranty has been materially impaired, it may convene a hearing in accordance with the Act for Ute purpose of determining whether impairment has occurred. No m isrepresentation by the Operator which may have induced the Bank to deliver its Letter of Credit shall be any defense to any draft by the State under such Letter of Credit.