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25. HOLD HARMLESS -- Lessee shall indemnify Lessor against all liability and loss, and against all claims and
<br /> actions,including the defense of such claims or actions.based upon or arising out of damage or injury,including
<br /> death, to persons or property caused by or sustained in connection with this lease or by conditions created
<br /> thereby,or based upon any violation of any statute,ordinance,or regulation.
<br /> 26. LIENS AND CLAIMS --Lessee shall not suffer or permit to be enforced against the leased premises.or any part
<br /> thereof,or any improvements thereon,any liens arising from.or any claim for damage growing out of the work
<br /> of any construction,repair,restoration,replacement or improvement,or any other claims or demand howsoever
<br /> the same may arise, but Lessee shall pay or cause to be paid all of said liens, claims, or demands before any
<br /> action is brought to enforce die same against the leased premises or improvements. Lessee agrees to defend,
<br /> indemnify and hold Lessor and the leased premises free and harmless from all liability for any and all such liens,
<br /> claims, demands, and actions together with reasonable attorney fees and all costs and expenses in connection
<br /> therewith.
<br /> Lessee shall, upon execution of this lease at its cost, prepare a Notice, pursuant to C.R.S. 1973,
<br /> §38-22-105 and cause the same to be posted for the purpose of protecting Lessor against any liens or
<br /> encumbrances upon the leased premises by reason of work,labor,services or materials contracted for or supplied
<br /> to Lessee.
<br /> 27. BOND -- It is agreed that no operations are to be commenced on the lands herein described unless and until
<br /> Lessee or Lessee's agent has filed a good and sufficient bond with Lessor in an amount fixed by Lessor,to secure
<br /> the payment for damages caused by Lessee's or Lessee's agent's operations on said lands. Lessor reserves the
<br /> right to grant relief from the foregoing bond requirements.Lessor may require such bond to be held in full force
<br /> and effect for one year after cessation of operations for which the bond was intended. This requirement may be
<br /> waived in favor of the requirements of the Division of Minerals and Geology.
<br /> 28. WATER -- If Lessee initiates or establishes any water rights for which the point of surface diversion or ground
<br /> water withdrawal is on the leased premises,title to such water rights shall,upon termination of the lease,become
<br /> the property of the surface owner without cost,and title to the water rights shall be conveyed to the surface owner
<br /> immediately upon termination,except that if Lessor is the surface owner the water right shall be taken in the name
<br /> of Lessor in the first instance and shall be the property of Lessor without cost.
<br /> 29 SURRENDER AND RELINQUISHMENT --Lessee may,at any time,by paying to Lessor,all amounts then due
<br /> as provided herein, surrender and cancel this lease insofar as the same covers all or any portion of the lands
<br /> herein leased and be relieved from further obligations or liability hereunder with respect to the lands so
<br /> surrendered; provided that no partial surrender or cancellation of this lease shall be for less than tracts of
<br /> approximately forty (40) acres or governmental lot corresponding to a quarter-quarter section, the rental being
<br /> reduced proportionately.
<br /> This surrender clause and option herein reserved to Lessee shall cease and become absolutely inoperative
<br /> unmediately and concurrently with the institution of any suit in any court of law by Lessee, Lessor or any
<br /> assignee of either to enforce this lease,or any of its terms,express or implied,but in no case shall surrender be
<br /> effective until Lessee shall have made full provision for conservation of the minerals and protection of the surface
<br /> rights of the leased premises as may be determined by Lessor.
<br /> Notwithstanding the foregoing,no surrender and relinquishment of this lease shall be effective unless and
<br /> until all reports,documents and information of any kind required to he submitted to Lessor under this lease,or to
<br /> such state agencies as provided in this lease have been submitted to lessor or such state agency.
<br /> 30 RIGHT OF REMOVAL—In the event this lease is terminated by surrender,or the expiration of its term,and all
<br /> obligations of Lessee under this lease are satisfied.all Lessee's improvements,equipment,man-made objects of
<br /> any type, including stockpiles and dumps except as these stock piles and dumps may he disposed of pursuant to
<br /> the reclamation plan, shall he removed from the leased premises within six months from the date of such
<br /> termination at Lessee's expense Such removal is to be accomplished without unnecessary waste or damage to the
<br /> premises and Lessee shall restore the surface of the leased premises to the same condition as immediately prior to
<br /> the execution of this lease as it pertains to such removal, All improvements and equipment remaining on the
<br /> leased premises six months after the termination hereof shall be forfeited automatically to Lessor without
<br /> compensation and without necessity of execution of additional documents.
<br /> 31. CONDEMNATION -- If the leased land shall be taken in any condemnation proceeding, this lease shall
<br /> automatically terminate as of the date of taking. The award for such condemnation shall be paid to Lessor,except
<br /> for any specific award(s)paid to Lessee for severed minerals reserves,in which event a percent of such specific
<br /> award(s)equal to royalty shall be paid to Lessor in lieu of royalty lost by virtue of the condemnation.
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