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payable to the State of Colorado pursuant to applicable provisions of Colorado statutes governing <br />mined land reclamation and that Rimrock Exploration & Development, Inc. or its successor has <br />neglected, failed, or refused to pay such amount although requested to do so by the Director. <br />A written statement of the Colorado State Director of the United States Department of the Interior, <br />Bureau of Land Management, Colorado State Office ("BLM") certifying that he is a duly <br />authorized official acting on behalf of the United States Department of the Interior, Bureau of <br />Land Management and that the amount of the accompanying sight draft is due and payable to the <br />United States Department of the Interior, Bureau of Land Management, Colorado State Office <br />pursuant to applicable provisions of Colorado statutes governing mined land reclamation and that <br />Rimrock Exploration & Development, Inc. or its successor has neglected, failed, or refused to pay <br />such amount although requested to do so by the Director. <br />Each sight draft so drawn and presented shal I be honored by us if presented prior to the close of business on <br />the expiration date of this letter of credit. The Bank shall make a payment by wire transfer to the <br />Beneficiary. This letter of credit refers to Rimrock Exploration & Development, Inc.'s application for a <br />permit to engage in mining and reclamation activities within the State of Colorado, <br />It is an express condition of this letter of credit that it shall be automatically extended for successive <br />additional periods of one year each, from the initial and each future expiration date unless the Citizen's <br />State Bank of Ouray ("the Bank") shall notify the Director or the Colorado State Director of the United <br />States Department of the Interior, Bureau of Land Management at least 90 days prior to an expiration date <br />in writing by registered mail, at the above address, that the Bank elects not to extend the letter of credit for <br />such additional period. In such event, in addition to his power to draw hereon under the preceding <br />paragraphs, the Director or the Colorado State Director of the United States Department of the Interior, <br />Bureau of Land Management may draw the full or any lesser amount hereof at any time prior to such <br />expiration date by sight draft, or drafts, accompanied by the written statement of the Director or the <br />Colorado State Director of the United States Department of the Interior, Bureau of Land Management <br />certifying that the amount drawn will be held as a cash deposit in lieu of financial warranty, as provided in <br />applicable Colorado statutes governing mined land and reclamation. <br />The original signed letter of credit and any amendments will be presented to the Bank by the beneficiary <br />along with any draft presented pursuant to this letter of credit, and will be surrendered to the Bank with any <br />draft which draws the full amount, or the balance remaining available, under this letter of credit. Delivery <br />of the original letter of credit, sight draft(s) and all other documents required as a condition precedent for <br />payment, may be made by overnight courier to the Bank. Each payment on a draft shall reduce the <br />aggregate above written amount by the amount drawn. <br />This Letter of Credit is subject to Uniform Customs and Practice for Documentary Credits (1993 Revision), <br />International Chamber of Commerce -Publication No. 500 (the "UCP500") and shall be governed by the <br />laws of the State of Colorado with respect to subject matters not addressed by the UCF500. In the event of <br />an action between the beneficiary and the Bank regarding this letter of credit, the bank submits to the <br />jurisdiction and venue of the Denver District Court, State of Colorado. The Bank agrees to accept service <br />of process in any such action, if service is made by registered or certified mail (return receipt requested) or <br />courier service, postage or delivery fee prepaid, to the address of the Bank set forth above. <br />If any expiration date specified herein shall fall upon a day other than a regular business day of the Bank, <br />the expiration date shall ipso facto be extended to the close of business on the next successive business day <br />of the Bank. <br />The Citizen's State Bank of Ouray, Naturita, Colorado <br />BY~ ~~ b~O~~Q,{ ~ April 3, 2007 <br />Term Tooker, Vice President <br />2 <br />