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in their present condition for any operations conducted by KMG in connection with any Well, <br />including, but not limited to, drilling and production activities, workovers, well deepenings, <br />recompletions, fracturing and replacement wells. All Wells will be limited to the Oil and Gas <br />Operations Areas shown on Exhibit A, unless this Agreement is amended by consent of [Gravel <br />Company] and KMG. Except for the Oil and Gas Operations Areas, and the access roads and <br />Petroleum Pipeline Easements (as defined below) as provided in this Agreement, KMG shall not <br />occupy the surface of the Property except in the event of an emergency or for reasonable <br />incidental, temporary and non-damaging activities, for which KMG shall be strictly and solely <br />responsible for any damages that may occur to the Property. <br />KMG shall have the right to drill Future Wells within the Oil and Gas Operations Areas, <br />including horizontal and directional wells that produce from and drain the Property and/or lands <br />other than the Property. As part of the consideration for this Agreement, [Gravel Company] <br />hereby waives its right to, and covenants that it shall not protest or object to any such exception <br />location or application for same by KMG. KMG shall not otherwise have the right to drill new <br />wells on the Property. The wellhead location for any Future Well drilled from the Oil and Gas <br />Operations Area shall not be closer than 200' from a the edge of the Oil and Gas Operations <br />Area. In no event shall [Gravel Company] stockpile mined materials within a radius of 150 feet <br />of any Existing Wells. <br />2. EXTRACTION IN VICINITY OF OIL AND GAS OPERATIONS AREAS; <br />SETBACK REQUIREMENTS. <br />[Gravel Company] reserves the option to mine the gravel within each of the Oil and Gas <br />Operations Areas in accordance with the terms of this Agreement. In the event that [Gravel <br />Company] elects to mine the gravel in an Oil and Gas Operations Area, [Gravel Company] shall <br />notify KMG in writing 60 days prior to commencing mining operations within the Oil and Gas <br />Operations Areas and shall first place temporary concrete barriers around the Existing Wells as <br />directed by KMG prior to commencing any mining operations on the Property. [Gravel <br />Company] shall conduct its mining operations in the Oil and Gas Operations Areas as quickly as <br />reasonably practicable. [Gravel Company] shall conduct it mining within the Oil and Gas <br />Operations Area by excavating pie shaped wedges of gravel and aggregate and thereafter <br />backfilling and compacting the area with overburden or other suitable material prior to <br />excavating the next pie shaped area; provided, however, that in no event shall [Gravel Company] <br />mine within 90 feet of any Existing Well or Production Facilities and provided further that in no <br />event shall more than one quarter circle segment of the pie shape be excavated at any one time. <br />Excavation in the Oil and Gas Operations Areas will be coordinated with KMG in a mutually <br />acceptable manner so as to avoid conflict with KMG's oil and gas operations and to ensure there <br />is an appropriate safety plan and interim emergency procedures. [Gravel Company] will bear all <br />costs associated with the mining operation, including permanent or temporary rerouting and <br />replacement of access roads, and flowlines and utility lines in order to prevent unnecessary <br />interruption of production from any affected Well. In addition, [Gravel Company] and its <br />successor and assigns shall indemnify and hold the KMG harmless from any and all damage, loss <br />and liability, including attorney's fees, incurred as a result of [Gravel Company]' operations in <br />an Oil and Gas Operations Area. <br />11