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any extensions or renewals thereof, the above price paid from Tenant to Landlord, per ton of <br /> material mined Royalties, shall be adjusted for the next year in direct proportion to any increase <br /> or decrease in the reported Department of Labor's Consumer Price Index, All items, Denver- <br /> Boulder-Greeley Areas, for twelve (12) months preceding the adjustment date <br /> (EXAMPLE: using an adjustment from the year 2000 to year 2001. Annual CPI for year 2000 <br /> Was 173.2. CPI for year 2001 was 181.3, an increase of 4.6%,18.3 CPI 2001 - 173.2 CPI 2000 = <br /> 8.1 change in CPI/173.2 2000 CPI = 4.6% change from 2001 to 2002 in CPI X$1.05 cents Royalty = <br /> 3.91 cents increase) Refer. US and Denver/Boulder Consumer Price Index. <br /> b. Such newly adjusted Royalty payments shall be in effect until the next January 1st <br /> adjustment rate. <br /> C. Tenants shall provide to Landlord monthly reports showing the quantity of material mined <br /> and shipped during the preceding month, pursuant to weight tickets. Monthly reports shall include <br /> copies of all weight tickets for the preceding month. Monthly reports shall be delivered by mail <br /> or personal service to the Landlord on or before the 20th of each month. Contained within each report <br /> shall be royalty payments, calculated pursuant to the term herein. <br /> d. Tenant agrees to pay minimum of$28,000.00 each year unless Royalties, as described <br /> above, exceed the minimum, in which case the Landlord shall/will be entitled, and paid, Royalties <br /> only. For purposes of minimum annual royalty payments a fiscal year beginning June1 thru May 31 <br /> will be used. Minimum annual payments must be met quarterly. Any payment of royalties in excess <br /> of the quarterly minimum payment (7,000.00)shall be applied to the next quarterly minimum payment. <br /> In no event shall excess minimum payments be credit to more than three future quarters.Tenant shall <br /> not be obligated to pay minimum royalty payments until property permitted and this contract goes into <br /> effect as hereinafter provided. <br /> e. At such times that it is impractical, due to weather conditions or inability to Tenant to sell <br /> materials, no weigh tickets shall be required for said period of impractical operation. <br /> f. Monthly payments are due on the 20th of each month. If any monthly payment is not received <br /> within 10 days of any date due, Tenant agrees to pay a late charge of 10% of any unpaid monthly <br /> amount in addition to the monthly amount due. <br /> g. Tenant shall keep an accurate record of all materials removed from the Premises and shall <br /> thereof. Landlord shall have the right at anytime Monday through Friday, 8:00 a.m.to 5 a.m. and <br /> upon 24-hour advance notice to Tenant to examine the books and records of Tenant for purpose of <br /> verification of amounts payable herein. <br /> h. Tenant shall use its own truck/loader scales, to be located upon the Premises and sales <br /> weight all materials prior to shipping materials from Premises. Such scales must be certified by <br /> State of Colorado on an annual basis, at Tenant's expense. Said scales shall be available for <br /> Landlord's use, during normal business hours and upon payment of a reasonable fee. <br /> 3. Tenant may clear brush and undergrowth from such portion of the Premises as may be reasonably <br /> necessary to explore for material or to locate pits, quarries and stockpile areas. In order to obtain access to <br /> the Premises and to carry on its operations herein, Tenant shall have the right to make use of all roadways <br /> presently existing on the Premises and shall have the further right to upgrade or widen such existing roads as <br /> pertaining to the mining and removal of materials hereunder. Tenant will bear all cost of constructing the road across the property Exhibit A from County Road 61 in order to gain suitable access to the mining area W <br /> 2 <br />