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i 7. CO1~IPLIANCE WITH REGULATIONS -- Lessee covenants and agrees that during the continuance of this lease he will fully comply with all of the provisions, terms and conditions of all laws, whether Federal, State, or Local, and orders issued thereunder, which may be in effect during the continuance hereof relating to the operations of Lessee under this lease, and the marketing of ally product thereof, or labor relations in connection with such operations or marketing. 8. REPORTS -= On or before the last day of each and every calendar month durinll; the term of this lease, Lessee shall make a sworn, verified, written report to Lessor in which shall be entered and set down the exact amount in tons of all material removed from said premises during the preceding calendar month. Such sworn, verified, written statements shall clearly set forth the tonnage as shown by production report, and shall also show the use or disposal by Lessee of such material. i 9. SURRENDER -- Lessee may at any time surrender and cancel this lease insofai as the same covers all or any portion of the lands herein leases and be relieved from further obligations or liability hereunder with respect to the lands so surrendered; provided that no partial surrender or cancellation of this lease shall be for less than contiguous• tracts of approximately forty (40) acres or Governmental lot corresponding to aquarter-quarter section; provided further that this surrender clatise and the option herein reserved to Lessee shall cease and become absolutely inoperative immediately ari~i concurrently with the institution of any suit in any court of law by Lessee, Lessor or any assignee of either to enforce this lease, or any of its terms, express or implied, but in no case shall surrender be effective until Lessee shall have made full provision for protection of the surface rights of the leases premises. 10. BONDS AND SURFACE DAMAGE -- Lessee shall be liable and agrees to pays for all damages to the surface of the land, livestock, growing crops or improvements caused by Lessee's operations on said lands. It is agreed and understood that no operations shall be commenced on~the lands hereinabove described unless and until Lessee or his assignee shall have filed a good and sufficient bond with Lessor in an amount to he fixed by Lessor, to secure the payment for such damage to the surface of the land, livestock, growing crops or improvements as may be caused by Lessee or his assignee's operations on said lands. With Lessor's approval the bond may be waived in favor of that which titay be required by the Colorado Mined Land Reclamation Division. j There shall be no removal of timber without prior notice to Lessor. Any merchantable timber cut in conjunction with the approved mining plan is to remain the property of the State. All other timber, slash, stumps, and boughs are to be disposed of by Lessee. 11. HOLD HARMLESS -- Lessee shall indemnify Lessor against all liability and loss, and against all claims and actions, including the defense of such claims or actions, based upon or arising out of damage or injury, including death, to persons or property caused by or sustained in connection with this lease or by conditions created thereby, or based upon any violation of any statute, ordinance,~or regulation. 12. OPERATION PLAN -- All plans for mining may he requested by Lessor for revieli and approval before these operations begin. ~ I 13. ENVIRONMENTAL ANALYSIS --Submittal of an environmental analysis may be~required for approval by Lessor before any exploration or mining begins on leased premises. i I Page 4 of 8 •