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remain obligated for royalty payments (minimum and production royalties) and for <br />reclamation obligations. Lessor must give Lessee at least thirty (30) days written notice of <br />its intent to exercise this option. Lessor shall abide by all federal, state and local laws, rules <br />and regulations when conducting activities within the mining lease. Lessor shall incur any <br />and all costs associated with said production. Should Lessor or its contractor cause damage <br />to the slurry wall during Lessors production or activities, Lessor shall incur any and all <br />costs to make repairs. During the Term, Lessor shall not make for sale any aggregate <br />products harvested from within the mine property or otherwise compete with Lessee in its <br />aggregate sales from the Premises. <br />6. Use of Scale. Quantities of Sand and Gravel removed from the Property will be <br />measured as follows: Lessee shall install, and maintain in good working order and <br />properly calibrated, its own scale over which all materials removed from the Property <br />shall be weighed, and keep accurate records of all weights of such materials, including <br />date and time when weighed, and a reasonable identification of such vehicles, which shall <br />be available for inspection by Lessor at all reasonable times during business hours. If <br />Sand and Gravel is to be mixed with non - excavated materials prior being removed from <br />the Property (for example, in case of mixing gravel with asphalt cement or water and <br />Portland cement prior to removal), then the Sand and Gravel will be separately weighed <br />prior to mixing, and the mixed material shall be weighed and/or measured when it leaves <br />Lessor's Property, and Lessee shall keep accurate records of all weights of such <br />materials, including date and time when weighed, and a reasonable identification of such <br />vehicles, which shall be available for inspection by Lessor at all reasonable times during <br />business hours. Lessee shall deliver each quarter a correct statement of the quantity and <br />type of materials removed from the Premises during such preceding month, including any <br />precious metal extractions and sales, and materials removed from the pit and stockpiled <br />on the Premises, all certified to by an officer of Lessee as being a correct and accurate <br />accounting thereof (the "Monthly Reports "). <br />7. Equipment. Lessee shall provide, at its own expense, all necessary equipment for <br />sampling, drilling and testing for, excavating, removing, crushing, screening, washing <br />and selling sand and gravel. <br />8. Labor. Lessee shall have the sole responsibility to hire, oversee and compensate any <br />personnel necessary to operate any sand and gravel operation. <br />9. Water. Unless otherwise agreed, Lessee will provide sufficient water for all of Lessee's <br />operations on Lessor's property. <br />10. Permits. Unless otherwise agreed between the parties, all mining permits from the <br />Colorado Division of Minerals and Geology and all special use permits and other permits <br />or authorizations required by state, county or local authorities to conduct sand and gravel <br />extraction and processing operations on Lessor's Property shall be obtained and <br />maintained in Lessee's name, and Lessee shall post any reclamation bonds or <br />undertakings required for such operations. Both Lessor and Lessee acknowledge the <br />existence of an active mining permit, which said permit is hereby attached and referenced <br />