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| (1)   |     During the Term, the $0.83 Option will vest and become exercisable in 12 equal monthly installments commencing on February 1, 2012.  Notwithstanding the foregoing: |
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|   | (i)  the unvested portion of the $0.83 Option will immediately vest and become exercisable immediately prior to the occurrence of any of the following events:  (1) termination by the Company without Cause; (2) termination by the Manager for Good Reason; or (3) notice of non-renewal by the Company as provided in Section 2; and |
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|   |   |
|--------|--------|

|   |  (ii) the unvested portion of the $0.83 Option will immediately vest and become exercisable immediately prior to the occurrence of a Change in Control of the Company. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (2)     During their terms, 100% the 2012 Going Private Option, the 2012 SAR, and the 2012 Assumed Option will be fully vested and exercisable. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (i)   a written notice of exercise specifying the number of shares of Common Stock with respect to which the Option or SAR is being exercised; |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (ii)  in the case of the 2012 Options, payment in full of an amount equal to the exercise price multiplied by the number of shares of Common Stock underlying the portion of the Option exercised, the payment of which may be satisfied by (A) a cash payment, which may be paid by check or other instrument acceptable to the Company; (B) the Manager delivering to the Company shares of Common Stock which are already owned by the Manager (free and clear of any liens or encumbrances) valued at the fair market value of the exercise price on the date of exercise; (C) solely to the extent permitted by law, cashless exercise whereby the Manager delivers irrevocable instructions to a broker-dealer selected by Manager to sell or margin a sufficient portion of the Common Stock with respect to which the Option is being exercised and the broker-dealer delivers the sale or margin loan proceeds directly to the Company to pay for the exercise price; or (D) such other method approved or made available to another optionee by the Company. In addition to the foregoing, the Manager may satisfy the payment of up to 25% of the exercise price for the 2012 Going Private Option through a note, having will have a 5-year term and provide for interest at the applicable federal rate and will be secured by the shares purchased with the loan proceeds (the “Exercise Note”); |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (iii)  in the case of the 2012 SAR, a written notice of the extent to which payment is to be made in securities and/or cash . |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------|

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| (a)   | Manager will be entitled to receive any Management Fee earned through the date of termination |
|-----------------|-----------------------------------------------------------------------------------------------|

| (b)   | Unvested portion of $.83 Options terminate and are not subject to further vesting. |
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| (c)   | The 2012 Going Private Option, the 2012 Assumed Option, and the 2012 SAR and the vested portions of the $.83 terminate immediately and may no longer be exercised |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (a)   | Manager will be entitled to receive any Management Fee earned through the date of termination |
|-----------------|-----------------------------------------------------------------------------------------------|

| (b)   | Unvested portions of $.83 Option terminate and are not subject to further vesting. |
|-----------------|------------------------------------------------------------------------------------|

| (c)   | The 2012 Going Private Option, the 2012 Assumed Option, and the 2012 SAR and the vested portions of the $.83 Option terminate on the fifth anniversary of the termination date of the Manager (or, if earlier, upon expiration of their term).   |
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| (a)   | The Manager will be entitled to receive any Management Fee earned through the date of termination and a lump sum payment within 10 days following the date of termination equal to the Management Fee that the Manager would have otherwise received through the end of the then existing Term; |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (b)   | Unvested portion of $.83 Options immediately vest; |
|-----------------|----------------------------------------------------|

| (c)   | The 2012 Going Private Option, the 2012 Assumed Option, the 2012 SAR and the $.83 Option terminate on the fifth anniversary of the termination date of the Manager (or, if earlier, upon expiration of their term).   |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| Applied Minerals, Inc.                                         | Material Advisors LLC                                             |
|----------------------------------------------------------------|-------------------------------------------------------------------|
|                                                           |                                                              |
|                                                           |                                                              |
| By: ____________________________                               | By: __________________________                                    |
|         Its __________ |         Its _____________ |
|                                                           |                                                              |
|                                                           |                                                              |

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