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accurate books and records showing the production and disposition of any and <br /> all substances produced on the Leased Premises and to permit Lessor at all <br /> 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 <br /> documentation. All said books and records shall be retained by Lessee and made <br /> available In Colorado to Lessor for a period of not less than 10 years. If any such <br /> examination shall reveal, or if either party shall discover any error or inaccuracy <br /> in Its own or the other party's statement, payment, calculation, or determination, <br /> then proper adjustment or correction thereof shall be made as promptly as <br /> practicable thereafter, except that no adjustment or correction shall be made if <br /> more than 10 years have elapsed between the time the error or inaccuracy <br /> occurred and the discovery by either party of said error or inaccuracy. <br /> Further, Lessee shall furnish annually a complete operations report to <br /> Lessor disclosing the number of tons and the assay thereof of all ores, minerals <br /> and other materials mined from the Leased Premises during the preceding year. <br /> Lessee shall also furnish in said report geologic interpretations and recoverable <br /> reserve calculations, and maps and cross sections showing location of any <br /> mineral-bearing outcrops, drill holes,trenches, ore bodies and other prospecting <br /> and exploration activities, along with assays showing the amount of mineral <br /> contained in the ore. The records required to be maintained by Lessee and <br /> provided to Lessor upon request include logs of all strata penetrated and all <br /> geologic and hydrologic conditions encountered, and copies of in-hole surveys- <br /> -this information to be collected and prepared under the supervision of a <br /> qualified geologist, geological engineer or mining engineer. Other qualified <br /> persons may collect and prepare this data, if agreed to in writing between Lessee <br /> and Lessor. Any request to keep certain information confidential should be in <br /> writing to Lessor at the time such information is submitted to Lessor, and such <br /> data may be kept confidential as consistent with State law. Lessee shall submit, <br /> if requested by Lessor, such additional reports, records or documents regarding <br /> Lessee's operation on the Leased Premises as necessary for the compliance with <br /> lease provisions. <br /> 11. 0,VEgRJQ1M!U ROYALU LIVIIJIMONS: This Lease or any subsequent <br /> assignment hereof shall not be burdened with overriding royalties the aggregate <br /> of which exceeds 2 percent of the gross value of the material at the first point of <br /> sale. Lessor must be notified of all overriding royalties accruing to this Lease. <br /> 12. PENALTIES: A penalty shall be imposed for, but not limited to, late payments, <br /> improper payments, operational deficiencies of any kind whatsoever, violations <br /> of any covenants of this Lease, or any false statements made to Lessor. Penalties <br /> shall be determined by Lessor unless otherwise provided for by law and may be <br /> in the form of, but not limited to, interest, fees, fines, and/or lease cancellation. <br /> A penalty schedule shall be prepared by Lessor and shall become effective <br /> Page 7 of 20 <br />