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A. An AMR, the amount to be negotiated before expiration of the Lease, will be due and payable <br /> annually commencing on the date this Lease is extended or a new lease is executed and shall <br /> continue until the expiration of the new or extended lease. This amount may be adjusted by <br /> Lessor at the end of each five-year period of the extended or new lease. <br /> B. Lessee shall furnish to Lessor satisfactory evidence of plans for mining during the term of the <br /> extended lease or during the term of a new lease. <br /> C. Lessee shall furnish adequate geological evidence to Lessor that the acreage subject to the <br /> extended or new lease is in fact an integral part of and contains reserves in a logical mining <br /> unit. Whether the acreage is or is not a part of a logical mining unit will be determined by <br /> Lessor. <br /> D. An extension of this Lease as determined by Lessor would be in the best interest of Lessor. <br /> 4. EXTENSION BY PRODUCTION - The Lease may continue in effect for a Secondary Term (as defined <br /> above) of 20 years to the 13th day of April, 2046 as long as sand and gravel are being produced in <br /> paying quantities from the Leased Premises. Paying quantities is defined as production and sales of a <br /> quantity sufficient to return to Lessor production royalty payments of a minimum of$100,000 per year. <br /> 5. ANCILLARY USE - This paragraph is deleted. <br /> 6. REPORTS AND RECORDS -- After mining operations begin on the Leased Premises, it is agreed that on <br /> or before the last day of each month during the Term of this Lease, Lessee shall submit a sworn, <br /> verified, written report to Lessor, in which report shall be entered and set down the exact amount in <br /> weight of all products and the assay thereof mined and removed from said Leased Premises during the <br /> preceding calendar month. Any products moved within or from the Leased Premises onto adjacent <br /> property owned by Lessee for the purpose of storage shall not be counted against this total. <br /> Lessee agrees to keep and to have in possession complete and accurate books and records <br /> showing the production and disposition of any and all substances produced on the Leased Premises and <br /> to permit Lessor at all reasonable hours, to examine the same or to furnish copies of same to Lessor <br /> within 60 days following written request along with purchaser's support documentation. All said books <br /> and records shall be retained by Lessee and made available in Colorado to Lessor for a period of not <br /> less than 10 years. If any such examination shall reveal, or if either party shall discover any error or <br /> inaccuracy in its own or the other party's statement, payment, calculation, or determination, then <br /> proper adjustment or correction thereof shall be made as promptly as practicable thereafter, except <br /> that no adjustment or correction shall be made if more than 10 years have elapsed between the time <br /> the error or inaccuracy occurred and the discovery by either party of said error or inaccuracy. <br /> Further, Lessee shall furnish annually a complete operations report to Lessor disclosing <br /> the number of tons and the assay thereof of all Minerals and other materials mined from the premises <br /> during the preceding year. Lessee shall also furnish in said report geologic interpretations and <br /> recoverable reserve calculations, and maps and cross sections showing location of any mineral-bearing <br /> outcrops, drill holes, trenches, ore bodies and other prospecting and exploration activities, along with <br /> assays showing the amount of mineral contained in the ore. The records required to be maintained by <br /> Lessee and provided to Lessor upon request include logs of all strata penetrated and all geologic and <br /> Page 4 of 15 <br /> 13524702 <br />