Common use of Qualification of Exploration, Development and Marketability Requirements Clause in Contracts

Qualification of Exploration, Development and Marketability Requirements. Lessor and Lessee acknowledge and agree that certain provisions of this Lease Agreement, including this Section 6. and Section 7., set out certain obligations of Lessee regarding exploration, marketability, and development. Lessor and Lessee desire to clarify Lessee’s obligations with respect to any such obligations. The terms of this Section 6. E. shall control over any other conflicting terms of this Lease Agreement. Lessor and Lessee acknowledge and agree that Lessee will take all steps necessary that a reasonable prudent mining operator operating a comparable property with similar annual gross revenues of Lessee would take to put the Materials into a marketable condition and that any analysis of the obligations of Lessee regarding exploration, marketability and development shall take in to account such factors as the market and economic conditions of the industry and the ability to secure profits that will commonly benefit both the Lessor and the Lessee. Lessor and Lessee further acknowledge and agree that Lessee’s exploration, marketing and development obligations shall in no event be interpreted to require Lessee to engage in any activity that may be characterized as speculative or bear a high degree of risk. Lessor and Lessee hereby reconfirm that portion of Section 3. E. of this Lease Agreement which states that during the Primary Term of this Lease Agreement (not including any extension of the Primary Term), so long at the Minimum Royalty is paid to Lessor as provided herein, Lessee shall have no obligation to explore, market, produce and/or develop the Materials or otherwise develop the Leased Premises during the Primary Term, and this Lease Agreement shall remain in full force and effect.