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Royalty hereunder. Said records will be retained by Lessee for a period of at least three (3)years. Said <br /> records may be inspected by Lessor or by a duly authorized representative of Lessor at any reasonable <br /> time. <br /> 4.2. Inspection Rights. Lessor, or its duly authorized agent, shall have the right to enter upon the <br /> Property and to go through any of the workings of Lessee thereon at her own cost, risk and expense in <br /> order to examine, inspect or survey the Property and any of Lessee's operations thereon. <br /> S. MANNER OF MINING <br /> 5.1. Compliance With Laws and Regulations. All work performed by Lessee hereunder shall be in <br /> compliance with all applicable environmental, reclamation, safety, health and other requirements of <br /> federal, state and local governments, and shall be undertaken in accordance with good mining practices. <br /> Lessee shall apply for and maintain at all times Worker's Compensation Insurance pursuant to the laws <br /> of the State of Colorado covering its employees working on the Property, and shall comply in all respects <br /> with all state and federal !aws oertainine to the employmew of persons in mining operations. <br /> 5.2. Lessee's Discretion. The timing, nature, manner and extent of any exploration, development or <br /> mining operations on the Property shall be within the sole discretion of Lessee, and Lessee shall have <br /> complete and absolute control with respect to the manner and nature of work performed and with <br /> respect to whether work, if any, is undertaken. Lessee may use and employ such methods of mining as <br /> he may desire or find most profitable. Lessee shall not be required to mine, preserve or protect in his <br /> mining operations any Leased Substances which, under good mining practices, cannot be mined, <br /> shipped, and recovered at a reasonable profit to Lessee at the time encountered. <br /> 5.3. Indemnification. Lessee shall pay when due all claims for work done, services rendered or <br /> materials furnished to the Property. Lessee shall defend at its own expense any suits or claims resulting <br /> from its operations under this Lease, and shall keep the Property free from any liens. In the event a lien <br /> is placed on the Property directly or indirectly arising out of Lessee's operations hereunder, Lessee shall <br /> cause such lien to be removed within sixty(60) days. In the event Lessee disputes any such lien and it is <br /> not removed within sixty(60) days, Lessee shall post a bond assuring payment in full of the amount in <br /> dispute in the event the claimant is successful. Lessee shall protect, defend, indemnify and hold <br /> harmless Lessor from any liability or expenses asserted or incurred by Lessee as a result of any accident <br /> or injury arising out of Lessee's operations on the Property, except for any accidents or injuries caused <br /> by the sole negligence of Lessor. <br /> 6. WARRANTY AND LESSER INTEREST Lessor does not own any interest in the surface of the Property. <br /> Lessor hereby warrants title to her undivided interest in the Leased Substances in, upon or under the <br /> Property and the quiet and peaceful possession of the Leased Substances and will do everything iawfuiiy <br /> within her power to defend title against all persons who may claim an interest in the same. Lessor <br /> agrees that Lessee, at its option, may pay and discharge, if overdue, any taxes, mortgages or other liens <br /> existing, levied or assessed on or against the Property and that upon such payment Lessee may, at <br /> Lessee's option, be subrogated to the rights of the holder or holders whom he has paid, or may <br /> reimburse himself for such expenditures out of any payment thereafter due Lessor under this Lease and <br /> otherwise accruing to Lessor. <br /> 6.1 Lesser Interest. If Lessor owns a lesser interest in the Property than the entire and undivided <br /> fee simple mineral estate therein, then the Production Royalties herein provided to Lessor shall be <br /> determined based on the proportion which Lessor's interest bears to the whole and undivided fee. <br /> 6.2. Title Defects. If title to the Property or any part thereof, in the opinion of Lessee's counsel, is <br /> defective, Lessor shall cooperate fully with Lessee in curing any such defects promptly, including <br /> executing all documents and doing any and all things which may be reasonably necessary or desirable to <br /> assist in eliminating any defect in Lessor's title. <br /> 2 <br />