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NEW MEXICO STATE LAND OFFICE – Oil, Gas, and Minerals Division

BOND FOR CONTRACT PERFORMANCE AND SURFACE OR IMPROVEMENT DAMAGE

Surface Improvement Damage Megabond

BOND NO.________________

(For use of Surety Company)

BOND NO.________________

Know all men by these presents

(For use of State Land Office)

___________________________________________________________________________________, as Principal,

and ________________________________________________________, as Surety, a corporation organized,

existing and doing business under and by virtue of the laws of the State of _______________________________ and

authorized to transact a surety business in the State of New Mexico, are held and firmly bound unto the New Mexico

Commissioner of Public Lands in the sum of Twenty-five Thousand Dollars ($25,000) for the following uses:

1. For the use and benefit of the Commissioner, to secure the performance of said Principal as lessee under

one or more state leases or permits for minerals, oil and gas, coal or geothermal resources or as holder under one or

more state rights-of-way or easements which Principal has heretofore executed or may hereafter execute with the

Commissioner; and

2. For the use and benefit of the Commissioner, state surface lessees, state land contract purchasers, state

patentees, and their successors and assigns, to pay for damages to the surface of lands subject to a state lease or permit

for minerals, oil and gas, coal or geothermal resources or a state right-of-way or easement held by Principal, or for

damages to surface improvements located thereon, suffered by reason of Principal's operations under a state lease or

permit for minerals, oil and gas, coal or geothermal resources or under a state right-of-way or easement.

For the payment of said sum, well and truly to be made, Principal and Surety bind themselves, their heirs,

executors, administrators, successors and assigns, jointly and severally.

The conditions of the foregoing obligations are:

1. If the above bound Principal or its successors or assigns shall well and truly perform and keep all terms,

covenants, conditions, and requirements of all state leases for minerals, oil and gas, coal or geothermal resources and

of all state rights-of-way and easements heretofore or hereafter executed by the Commissioner and Principal, including

the payment of royalties when due and compliance with all established mining plans; and

2. If Principal or its successors or assigns shall in all respects make good and sufficient recompense,

satisfaction or payment to the Commissioner of Public Lands for damages to the surface of lands subject to a state

lease or permit for minerals, oil and gas, coal or geothermal resources or a state right-of-way or easement held by

Principal and for damages to livestock, water, crops, tangible improvements or surface improvements of any kind

located thereon suffered by reason of Principal's operations under such state lease, permit, right-of-way or easement

heretofore or hereafter executed by the Commissioner and Principal;

THEN, the obligation to pay the sum of Twenty-five Thousand Dollars ($25,000) shall be null and void.

If, however, Principal shall default or otherwise fail in performance under such state lease, permit, right-of-

way or easement, including the failure to pay royalties when due or to comply with established mining plans, or if

Principal shall fail or refuse to make good and sufficient recompense, satisfaction or payment to the Commissioner for

damages to the surface of the above designated lands or to improvements located thereon, then the obligation to pay

said sum shall remain in full force and effect.

The liability of Surety upon this bond shall not expire upon the termination of any state lease or permit or any

Bond For Contract Performance And Surface Or Improvement Damage Form - Surface Improvement Damage Megabond - 2004