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11. POSP Default. In case of any dispute between the POFP and the POSP as to this Agreement or the .production royalties payable under this Agreement, the POSP shall not be in default in payment of production royalties, or such portion thereof as aze disputed and not paid, until such dispute has been finally resolved, and then POSP shall have sixty (60) days after final resolution of such dispute within which to make payment. The POSP shall not withhold such payments as are admitted to be due or which are not in dispute. 12. Waiver of Liability. The POSP shall indemnify and hold harmless the POFP for and on account of all claims, demands, or liabilities arising out of the POSP's operations on the Properties; shall assume full and sole responsibility for the operations conducted on the Properties, and no employee or agent of the POSP shall, under any circumstances, be deemed an employee or agent of the POFP; shall perform all operations on the Properties in accordance with good mining practices; shall comply with all applicable laws and regulations; shall pay in full for all labor performed upon or materials brought to or placed upon the Properties; and shall keep the Properties free and cleaz from any and atl materialmen's, mechanic's and laborer's liens. The POSP retains the right to contest, in good faith, liens which the POSP deems inappropriate, provided that the POFP's claim to the Properties is preserved. 13. Failure of the POSP to Perform. Failure by the POSP to perform or comply with any of the teens, provisions or conditions of this Agreement, expressed or implied, shall not automatically terminate this Agreement nor render it null and void; but in case of such default, the POFP may notify the POSP in writing of each specific breach and the POSP shall have a period of thirty (30) days after receipt of such notice within which to cure such default, provided further that the period of time for rectifying such matters of default shall be extended when the POSP is prevented from acting by causes beyond the control of the POSP, such as floods, fires, government reclamation, restrictions or orders by the government, and acts of God, said examples being given by way of illustration and not by way of limitation. If the default is not cured accordingly, this Agreement shall be deemed to be terminated without further notice. 14. Right to Recover Property, The PUSP shall have the right at any time during or within ninety (90) days in the event of termination of this Agreement to remove all property, fixtures or structures erected or placed by the POSP on or in the Properties. The compensation herein provided, except for expenses accrued by the POFP to remove any of the POSP's equipment or property following the termination of this Agreement, shall be deemed to be full payment to the POFP for any damages which may be caused to the Properties by the PUSP's operations hereunder so long as the POSP conducts such operation in a reasonable and prudent manner and without negligence. Ali of the POSP's equipment and property remaining on the Properties after ninety (90) days from termination shalE become the property of the PUFP unless the POFP does not want said equipment or property, in which case, the POFP will bill the POSP for its removal. The PUFF assumes no responsibility or liability for the FOSP°s property during the term hereof. 15. Statement of Permits and Responsibility for Permits. The POFP states but does not warrant that, to the best of his knowledge, all workings on the Properties are in compliance with all applicable Rules and Regulations of the Environmental Protection Agency, the tJS Forest Service, and the Teller County Board of Commissioners. The following permits are held by the POFF as of Aprii 2004. Upon executing this Agreement, the POSP agrees to take over all permitting and bonding and will keep all permits and bonds current. 3