2013-02-01_PERMIT FILE - M2013006

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received by lessors from any third person, Should Lessors receive any such bo fide offer ( which offer they are willing to accept, absent the provisions), Lessors shall immediately notify Lessee thereof, and lessee shall have thirty (30) days within which to elect to meet the same and thus to lease the property beyond the initial term hereof. Lessee shall have the right to receive all information and to make all reasonable inquiry concerning the bona fides of such offer. 5. Royalty: Lessee agrees to pay lessors $1.35 per ton with an (.10) ten cent increase every five years starting from time of permitting process is completed. For any of the first three possibly inactive years a payment of $1,000 per year will be paid to lessor and this payment may be applied to royalties for that year. 6. Taxes: During the lease term, Lessee shall seasonably pay any and all ad valorum taxes or other taxes, assessments or license fees upon the property caused or assessed by reason of Lessee's operations hereunder. 7. Obligations of lessee: Lessee shall keep and maintain true and accurate accounts of all production hereunder and lessors shall be entitled to examine and reproduce the same at all reasonable times and places. Reclamation of the affected portions of the property shall be in accordance with the Colorado Land Surface Reclamation Act, and to applicable Federal laws, if any. 8. Termination: This lease may be terminated by Lessors for failure of Lessee to observe and perform any of its obligations hereunder and those specified below, if within 120 days of mailing notice of such observance or performance or embark upon and thereafter diligently pursue a course of action designed to cure such default. Lessee will have thirty (30) days only to cure any failure to pay monies due. Upon termination of this lease for any reason, Lessors shall have the right, with reasonable notice, to re -enter and repossess themselves of the property and upon such termination, Lessee shall quit and peaceabley surrender the property. 9. Upon termination of this lease for any reason, Lessee shall have a period of 180 days within which to remove any and all buildings, plants, structures, equipment and other facilities placed thereon by lessee, this at no additional cost or expense to Lessee, and shall have the continuing right to complete reclamation work. 10. Notices: Any notice sent hereunder shall be sent to each of the following addresses, directly to the attention of the persons indicted or such person as may hereafter by indicated: Lessors: Name Address Paul Paul G. Hertzog F'; , %/" ,hr ro got/0 Rosemary Hertzog P'7 L 'm ,a r/ /)l ;,; n,° /1 (c 4/0.