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dirt and related materials) removed from the leased premises by the Lessee. The Lessee's <br /> weight tickets from a certified scale will be used to determine the Royalty due Lessor, which <br /> records shall be available to Lessor on a monthly basis, all as herein provided. <br /> 3.2 Royalty Payment Terms. Lessee's royalty payments are due by the 251h day of each <br /> month following the month in which the Material is removed from the leased premises. If <br /> any monthly payment is not received by the 10`h day of the month following the due date, <br /> a late fee of 1% of such payment shall be added to the balance due. <br /> 3.3 Minimum Tonnage Requirement. Lessee will be required to pay Lessor for a minimum <br /> of 30,000 tons of Material per year for each calendar year, however, further provided <br /> that: <br /> 3.3.1 Excess tonnage, the net amount over the minimum for any year, accrues and <br /> carries forward to subsequent years and counts as a credit toward the <br /> minimum annual tonnage for subsequent years. (For example, if the total <br /> tonnage for 2011 is 35,000 tons, that meets the minimum for 2011 and <br /> results in a credit of 5,000 tons, which is carried forward.) <br /> 3.3.2 If the annual minimum tonnage requirement (including credits for any <br /> unused, accrued tonnage credits for previous years) does not meet the annual <br /> minimum, then Lessee shall pay Lessor for the shortfall by January 25th of <br /> the following year. <br /> 4. Permit Ownership and Management. Yarra Companies, Inc. currently holds <br /> permits for a gravel mining operation on the Property. Lessee will coordinate with Lessor for the <br /> transfer to Lessee of applicable permits authorizing such operations from the appropriate <br /> governmental authorities ("Permits"). Lessee will be responsible for complying with all such <br /> permits, both before and after transfer, and for paying ongoing premiums for the reclamation <br /> bond. In the event Lessor is unable to complete the transfer of applicable permits, the <br /> responsibility shall fall on the Lessee to obtain the applicable permits. <br /> 5. Records and Reports. Lessee and Lessor shall keep records and furnish reports to <br /> each other as follows: <br /> 5.1 Material Records. Lessee agrees to keep strict and accurate records, including scale <br /> weight tickets, of all Material removed from the Property, and the Lessor shall have the <br /> privilege, during business hours, of examining the mining procedures and checking the <br /> books and records of Lessee for the purpose of verifying the amount of production and of <br /> royalties payable. <br /> 5.2 Monthly Reports. Lessee shall forward to Lessor monthly reports showing the <br /> quantity of Material removed during the preceding month. Such reports shall be forwarded <br /> to Lessor by the 25`h day of the month for the preceding month. The parties acknowledge <br /> that during certain months of the year it may be impractical to remove Material because of <br /> weather conditions and no report shall be required for any month during which no Material <br /> 2 <br />