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,~ i <br />I S. EaPLORATION-- An exploration permit is required and must be obtained before any field work of any <br />type or kind is undertaken. A restoration bond is required in conjunction wi[h this exploration permit. <br />The bond required by the Colorado Mined Land Reclamation Division for exploration activities may <br />be substituted for this bond. The proposed type and method of exploration shall be outlined on the <br />application for an exploration permit. <br />Lessee is required to keep an accurate log or record of all surface and subsurface exploration. <br />This exploration work shall be tied [o a corner established by an official USGS survey. All such logs <br />and/or records may be requested by Lessor at any time, but Lessor agrees that during the term of this <br />lease all such information so supplied by Lessee shall remain confidential and unpublished insofar as <br />it is consistent within the law. <br />19. PROTECTION AGAINST SURFACE DAMAGE -- Lessee has the right to utilize as much of the <br />surface of the lands as is necessary for mining operations, and shall be liable and agrees to pay for all <br />damages to the surface, livestock, growing crops, water wells, reservoirs, or other improvements caused <br />by Lessee's operations on said lands. Further, it is understood that this lease is subject to surface <br />patents, deeds, and certificates of purchase, and Lessee shall assume responsibility for all claims arising <br />from damages to the surface caused by Lessee's operations. <br />20. HOLD HARMLESS -- Lessee shall indemnify Lessor against all liability and loss, and against all claims <br />and actions, including the defense of such claims or actions, based upon or arising out of damage or <br />injury, including death, to persons or property caused by or sustained in connection with this lease or <br />by conditions created thereby, or based upon any violation of any statute, ordinance, or regulation. <br />2l . BOND -- It is agreed that no operations are to be commenced on the lands herein described unless and <br />until Lessee or Lessee's agent has filed a good and sufficient bond with Lessor in an amount fixed by <br />Lessor, to secure the payment for damages caused by Lessee's or Lessee's agent's operations on said <br />lands. Lessor reserves the right to grant relief from the foregoing bond requirements. Lessor may <br />require such bond to be held in full force and effect for one yeaz after cessation of operations for which <br />the bond was intended. This requirement may be waived in favor of the requirements of the Mined <br />Land Reclamation Division. <br />22. WATER R[GNTS -- If Lessee initiates or establishes any water right where the point of diversion or <br />groundwater withdrawal is on the leased premises and where the surface is owned by the State, such <br />water right must be obtained in the name of and with the consent of the State acting by and through its <br />Boazd of Land Commissioners. <br />Water rights and any improvement required to bring this water to the surface shall become the <br />property of the State, without cost upon termination of this lease for any cause whatsoever. <br />Under no circumstance may ground water be withdrawn without first having secured the <br />permission of Lessor and may not be withdrawn at a rate higher than necessary for the mining andfor <br />processing of Slate minerals only. Additional payment may be required for the use of any waters as <br />may be defined as tributary or non-tributary. <br />23. LENS AND CLAIMS -- Lessee shall not suffer or permit to be enforced against the leased premises, <br />or any pan thereof, or any improvements thereon, any liens arising from, or any claim for damage <br />Page 7 of 10 <br />