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records shall be retained by Lessee and made available in Colorado to Lessor for a period of not less <br /> 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 shalt be made as promptly as practicable thereafter, except <br /> that no adjustment or correction shalt 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 the <br /> number of tons and the assay thereof of all ores, minerals and other materials mined from the Leased <br /> Premises during the preceding year. Lessee shalt 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 togs of all strata penetrated and at( geologic and <br /> hydrologic conditions encountered, and copies of in-hole surveys--this information to be collected and <br /> prepared under the supervision of a qualified geologist, geological engineer or mining engineer. Other <br /> qualified persons may collect and prepare this data, if agreed to in writing between Lessee and Lessor. <br /> Any request to keep certain information confidential should be in writing to Lessor at the time such <br /> information is submitted to Lessor, and such data may be kept confidential as consistent with State <br /> taw. Lessee shalt submit, if requested by Lessor, such additional reports, records or documents <br /> regarding Lessee's operation on the Leased Premises as necessary for the compliance with Lease <br /> provisions. <br /> 11. OVERRIDING ROYALTY LIMITATIONS -- This Lease or any subsequent assignment hereof shalt not be <br /> burdened with overriding royalties the aggregate of which exceeds 2 percent of the gross value of the <br /> material at the first point of sate. Lessor must be notified of all overriding royalties accruing to this <br /> Lease. <br /> 12. PENALTIES -- A penalty shall be imposed for, but not limited to, late payments, improper payments, <br /> operational deficiencies of any kind whatsoever, violations of any covenants of this Lease, or any false <br /> statements made to Lessor. Penalties shall be determined by Lessor unless otherwise provided for by <br /> law and may be in the form of, but not limited to, interest, fees, fines, and/or tease cancellation. A <br /> penalty schedule shalt be prepared by Lessor. Said schedule may be changed from time to time. <br /> 13. ASSIGNMENT -- Lessee may not assign this Lease in whole or part of the Leased Premises except with <br /> the approval of Lessor. No assignment of undivided interests or retention or reservation of overriding <br /> royalties will be recognized or approved by Lessor. The effect, if any, of any such assignments or <br /> reservations wilt be strictly and only as between the parties thereto and outside the terms of this <br /> Lease. No dispute between parties to any assignment or reservation shall operate to relieve Lessee <br /> from or postpone performance of any terms or conditions hereof. Lessor will at at[ times be entitled to <br /> took solely to Lessee or his assignee shown on Lessor's books as being sole owner hereof, for the sending <br /> of all notices required by this Lease, and for the performance of at( terms and conditions hereof. <br /> Page 6 of 18 <br />