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at the end of the Ten (10) year term, unless the ompany gives written <br /> notice to Lessor sixty (60) days before the end o f term. <br /> 2. Sales Royalties. <br /> a. Subject to Paragraph 3.B. and 4, for all Materia s sold from the <br /> Property during each calendar month, the Corn ,any shall pay to Lessor <br /> a"Sales Royalty"calculated as follows: <br /> b. <br /> i. per ton for all sand and gravel, aggre_ate.overburden or any <br /> other material. <br /> ii. All payments shall be made within twenty( 0) days after the close <br /> of each calendar month. <br /> iii. At the end of the initial five (5) year lease t:rm the parties agree to <br /> negotiate in good faith new royalty rates. In the event they do not <br /> agree to new rates they shall engage a com s etent arbitrator who <br /> shall have the sole authority to decide the nD w royalty rates, and <br /> the parties shall be so bound. <br /> c. The Company shall keep and maintain adequat: and accurate records <br /> of the quantities of Materials mined and sold. he Sales Royalty <br /> payments shall be accompanied by a monthly s atement with the <br /> royalty calculation that includes an accounting s f the tons of Materials <br /> mined from the Property and sold or deemed s.Id pursuant to <br /> Paragraph 5.C. for the month. Lessor shall hay- the right at all <br /> reasonable times during business hours and upon reasonable prior <br /> notice to examine such records of the Company at the offices of the <br /> Company and to verify the quantities of Materi.1 removed and sold. <br /> and the accuracy of the scales used to weigh th. Materials. <br /> 3. Weighing of Materials: Commingling. For purpose of calculation of Sales <br /> Royalty, quantities of Materials removed from the Pro oerty on which Sales <br /> Royalty is due will be measured as follows: <br /> a. Use of Scales: All materials shall be weighed n a certified scale upon <br /> sale and removal from the Property. If materia s on which sales <br /> royalty is due are mixed with non-excavated m:terials (for example, in <br /> case of mixing sand and gravel with water and 'ortland Cement in the <br /> concrete batch plant). then for purpose of calcu ating the sales royalty. <br /> the weight of the Subject material used in the ixture will be <br /> determined using the certified scales at the Pro iierty to measure the <br /> weight of the materials that comprise the mix e and deducting the <br /> weight of the added non-excavated materials. i'necessary. <br /> 2 <br /> Lessor Initials k: ";I <br /> Lessee Initials <br />