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After receipt of the above notice, but not less than five (5) working days prior to KMG's <br />mobilization on the applicable Oil and Gas Operations Areas, either KMG or [Gravel Company] <br />may request an on-site meeting. The purpose of the meeting shall be to inform [Gravel <br />Company] of the expected activity and to coordinate site access, hazards, barricades, restoration <br />or any other issues that affect the use and safety of [Gravel Company]' development. <br />7. COMPLIANCE WITH SAFETY REGULATIONS. <br />KMG understands that [Gravel Company] surface mining operations on the Property are <br />subject to certain OSHA regulations. KMG agrees that while conducting operations on Property, <br />it will comply with such reasonable OSHA requirements which [Gravel Company] notifies KMG <br />are applicable to KMG's operations on the Property. KMG also agrees to inform its contractors <br />and subcontractors about such requirement. <br />8. DRILLING AND COMPLETION OPERATIONS. <br />KMG shall endeavor to diligently pursue any drilling operations to minimize the total <br />time period and to avoid rig relocations or startup during the course of drilling. [Gravel <br />Company] waives any objections to continuous (i.e., 24-hour) drilling operations. <br />9. SHUT-IN OF WELLS. <br />In the event [Gravel Company] interferes with KMG's operations on the Property which <br />result in KMG shutting-in or prevents KMG from repairing or returning to production one or <br />more of the Wells, then [Gravel Company] shall pay to KMG as liquidated damages (actual <br />damages being difficult to ascertain) ($5,000) per day per Well for each day the Well(s) are not <br />producing . Both parities agree that such amount is a reasonable estimate of actual damages <br />which would be difficult to calculate with certainty. [Gravel Company] shall provide a bond in <br />the amount of $50,000 as security for payment of such liquidated damages. Such bond shall be in <br />form and from bonding agents acceptable to KMG, shall name KMG as an obligee and shall <br />expressly permit the KMG direct access to and recourse against the issuer of such bond. Copies <br />of such bond shall be provided for KMG's approval not less than 30 days prior to the <br />commencement of mining on the Property. <br />10. GOVERNMENTAL PROCEEDINGS. <br />[Gravel Company] shall not oppose KMG in any agency or governmental proceedings, <br />including but not limited to the COGCC, County, or other governing body <br />proceedings, related to KMG's operations on the Property, including but not limited to drilling, <br />workovers, well deepenings and recompletions, provided that KMG's position in such <br />proceedings is consistent with this Agreement. <br />11. DEVELOPMENT PLANS. <br />[Gravel Company] has provided herewith copies to KMG of its Mining Permit, and the <br />engineering structural report prepared in connection with the Mining Permit (the "Plans"). KMG <br />acknowledges receipt of said Plans and has no objections to said Plans as approved by the DMG. <br />15