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(d) Audit: Cost. Lessor may cause an annual audit of Lessee's books and records to be <br /> made by an independent auditor selected by Lessor for purposes of verifying the <br /> amount of royalties and waste material removed. All reasonably necessary records <br /> shall be made available to Lessor or his agents for such purposes. The fees of the <br /> auditor shall be paid by Lessor, unless the audit results in a variance in the amount <br /> of Royalty due Lessor of 10% or more for any Lease Year in which case the cost <br /> of the Audit as well as any other verification costs shall be paid by the Lessee. <br /> (e) In the event that Lessor asserts that an additional Royalty amount is due for any <br /> Lease Year, then within ten (10) days after Lessor's audit is completed, Lessor <br /> shall deliver a copy of Lessor's audit to Lessee, together with a statement <br /> demanding payment of the amount of the differential that Lessor's audit indicates <br /> were properly due and payable for the calendar year in question. If Lessee agrees <br /> with the amount of the differential demanded by Lessor, then Lessee shall <br /> promptly pay Lessor. If Lessee or Lessor do not agree with the differential <br /> adjustment demanded, then Lessor and Lessee shall attempt to resolve such <br /> dispute within ten (10) days after Lessee receives Lessor's Statement. If Lessor <br /> and Lessee cannot reach agreement within such ten (10) day period, then either <br /> Lessor or Lessee may demand that the matter be resolved by arbitration. Within <br /> fourteen (14) days after any such demand, the parties shall select a mutually <br /> acceptable arbitrator to resolve the dispute. If the parties cannot agree upon a <br /> mutually acceptable arbitrator within such fourteen (14) day period, then Lessor's <br /> independent auditor and Lessee's independent auditor shall select the arbitrator <br /> within ten (10) days thereafter, and the arbitrator selected by the independent <br /> auditors shall determine the amount of the differential adjustment payable by <br /> Lessee to Lessor in the manner set forth below. If Lessor's and Lessee's <br /> independent auditors cannot agree upon an arbitrator, then the parties shall apply <br /> first to the American Arbitration Association, and then to the El Paso County <br /> District Court if necessary, for the appointment of an arbitrator within five (5) <br /> days after the expiration of the foregoing ten (10) day period. <br /> (f) Once the arbitrator is selected or appointed, then as soon thereafter as practicable <br /> the arbitrator shall proceed with arbitration in accordance with the rules of the <br /> American Arbitration Association. After the arbitration hearing per such rules, <br /> the arbitrator shall either adopt Lessor's determination of the amount of the <br /> differential adjustment payable for such Lease Year, render a finding of fact that <br /> Lessee's calculation of the Royalty amount due for the Lease Year is correct, or <br /> render his or her own determination of the Royalty amount due. The arbitrator's <br /> decision and basis therefore shall be rendered in writing to both Lessor and <br /> Lessee for such Lease Year and shall be final and binding upon them. The party <br /> who substantially prevails in the amount of Royalty due, as shall also be <br /> determined by the arbitration, shall recover from the other party the costs of the <br /> arbitration, including reasonable attorney fees and expert witness fees. In no <br /> 6 <br />