2010-11-02_REVISION - M1985029 (7)

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-2- WHEREAS, as proof of its financial responsibility, the Warrantor has proceeded pursuant to Section 34-32-117(3)(2)(H) of the Act and has caused the American National Bank of Cheyenne State of Wyoming (the "Bank") to issue its Irrevocable Letter of dated November 7 2003 _ payable to the Board in the amount of Fifty Thousand Nine Hundlf.ty Six 50,93 •00 } for the period from 11/7/03 , through 11/7/04 and has delivered it to the Board to be held by the Board as proof of the Operator's financial responsibility under this financial warranty. The Bank is not a parry to this agreement; its obligations are set forth in its Letter of Credit. Nothing in this Financial Warranty diminishes or qualifies the Banes obligation under its Letter of Credit. NOW THEREFORE, the Operator and the Warrantor are held hereby firmly unto the State of Colorado in the amount of those sums for those periods of time as set forth herein, until this financial warranty is amended or released in accordance with applicable law. The Board 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 of notice of any such adjustment to fulfill all new requirements. The Operator and the Warrantor shall notify the Board immediately of any event which may impair this financial warranty. If the Board receives such notice, or otherwise has reason to believe that this Financial Warranty has been materially impaired, it may convene a hearing in accordance with the Act for the purpose of determining whether impairment has occurred. No misrepresentation by the Warrantor 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. The Board may present drafts upon the Bank for payment under the Letter of Credit if the Board determines that reclamation which ought to have been performed by the Operator, or its successors or assigns, remains unperformed No other condition precedent need be fiMed to entitle the Board to receive the amounts of such drafts. However, if, upon completion of such reclamation by the Board, the amounts expended for reclamation shall be less than the amount received from the Bank, the excess shall be promptly refunded to the Warrantor. If or to the extent that the Bank shall cancel its Letter of Credit and such assurance shall not concurrently be reduced to a cash deposit as substitute assurance, the Operator agrees that it will forthwith provide substitute assurance, in form and substance approved by the Board, equal to the amount of the Letter of Credit which has been so cancelled and not reduced to a cash deposit. With the prior consent of the Board, which consent shall not be unreasonably withheld, the Operator and/or Warrantor may from time to time change the Bank whose Letter of Credit is held by the State as assurance or alter the form of assurance of financial responsibility held by the State for the faithful performance by the Operator of its obligations hereunder; provided that at all times there shall be in existence and delivered to the Board such assurance or other evidence of financial responsibility as shall be required by applicable laws and regulations of the State of Colorado and as shall be, in form and substance, approved by the Board or the Division. The obligation of the Operator and the Warrantor shall continue until the Board has released this Financial Warranty or has ordered it forfeited in accordance with applicable provisions of the Act. It is understoodthat periods of years may necessarily be required before determination can be made that reclamation of the Affected Lands has been satisfactorily completed. It is also recognized that, as reclamation is accomplished, the amount of this Financial Warranty may be reduced with the approval of the Board so that it reflects the then current estimated cost of the remaining reclamation of the Affected Lands. No revision, extension, or renewal of the permit or of the time allowed to complete reclamation shall diminish the Operator's and/or Warrantor's obligation under this Financial Warranty.