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<br />on-site activity with the surface owner or lessee, and make a reasonable effort to protect the integrity of surface
<br />owner's or surface lessee's fences, gates, cattleguards, and other property.
<br />23. PROTECTION AGAINST SURFACE DAMAGE -- Lessee has the right to utilize as much of the surface of the
<br />lands as is reasonably necessary for mining operations; however, Lessee shall be liable and agrees [o pay for all
<br />damages to the surface, livestock, growing crops, water wells, reservoirs, or other improvements caused by
<br />Lessee's operations on said lands. There shall be no removal of timber wi[Itou[ prior notice to Lessor. Any
<br />merchantable timber cut in conjunction with the approved mining plan is to remain the property of the State. All
<br />other timber, slash, stumps, and boughs are to be disposed of by Lessee.
<br />24. 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 />25. 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 the same against [he leased premises or improvements. Lessee agrees [o 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 />§ 3g-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 />26. BOND -- It is agreed that no operations are to be commenced on [he 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, [o secure
<br />[he 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 reyuiretnent may be
<br />waived in favor of the requirements of the Division of Minerals and Geology.
<br />27. 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 terntination 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 />28. SURRENDER AND RELINQUISHMENT -- Lessee may, a[ any tune, by paying to Lessor, all amounts [hen due
<br />as provided herein, surrender and cancel this lease insofar as the same covers all or any portion of [he lands
<br />herein leased and he relieved from further obligations or liability hereunder with respect to the lands so
<br />surrendered; provided that no partial surrender or cancellation of [his lease shall be for less than tracts of
<br />approximately forty (40) acres or governmental lot corresponding to a quaver-quarter section, the rental being
<br />reduced proportionately.
<br />This surrender clause and option herein reserved [o Lessee shall cease and become absolutely inoperative
<br />inunediately 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 />Notwiths[andingthe 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 be submitted [o 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 />29. 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 be disposed of pursuant [o
<br />the reclamation plan, shall be 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
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