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3. Sales Royalties. <br /> For all Materials weighed and removed from the Property during any <br /> calendar month the Company shall pay"Sales Royalty"to Lessor, as <br /> follows: <br /> for all sand and gravel, aggregate,overburden or <br /> o er matenal weighed and removed from the Property. Company <br /> can import Material to Property and removed again, including Material <br /> incorporated into concrete or asphalt products without incurring <br /> Royalty assessment. <br /> Monthly Royalty Payments to Lessor shall be made by the 20t"of the <br /> next month after weighing and removal with supporting documentation <br /> used by Company to determination tonnage and royalty due Lessor. <br /> If the Lease is extended beyond initial ten(10)year tern,Parties shall <br /> negotiate a royalty rate which will take into account market increases <br /> or decreases in price. In the event a new rate cannot be agreed to, the <br /> Parties shall engage an independent and impartial arbitrator who shall <br /> receive a proposal from each Party of its proposed new rate with no <br /> more than a one page summary explanation attached,and from the two <br /> proposals the arbitrator shall select one proposal and that proposal shall <br /> be the new rate, and the Parties shall be so bound. There shall be no <br /> right of appeal from arbitrator's decision. <br /> The Company shall keep and maintain adequate and accurate records <br /> of the quantities of Materials mined and sold. The Sales Royalty <br /> payments shall be accompanied by a monthly statement with the <br /> royalty calculation attached. Lessor shall have 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 Material weighed and <br /> removed. <br /> 3. Weighing of Materials; Commingling. <br /> For purpose of calculation of Sales Royalty,all materials shall be <br /> weighed on a certified scale before removal from the Property. If <br /> materials on which sales royalty is due are mixed with non-excavated <br /> materials(for example, in case of mixing sand and gravel with water <br /> and Portland Cement in the concrete batch plant),then for purpose of <br /> calculating the sales royalty,the weight of the Subject material used in <br /> the mixture will be determined using the certified scales at the <br /> 2 <br /> Lessor Initials f <br /> Lessee Initials_ <br />