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<br />from the Leased Premises. <br />If there is no production from the Leased Premises during the preceding calendaz month, <br />Lessee shall so state in a monthly report to UPLRC. <br />In the event the Lessee uses the survey method (as described in Section 9 herein) to <br />determine the quantities of Clay mined and removed from the Leased Premises, Lessee shall use <br />good engineering practices to estimate Clay mined and removed from the Leased Premises as the <br />basis for making monthly production royalty payments and accompanying monthly statements. <br />Such estimated production royalty payments shall be adjusted annually in accordance with the <br />results of the annual volumetric survey refereed to in Section 9 herein and such adjustment payment <br />would be due and payable on or before each effective anniversary date of this Lease along with <br />supporting information showing the basis for such adjustment. Lessee shall also famish annually <br />to UPLRC with such adjustment payment a full accounting of the total amount of Clay mined and <br />removed from the Leased Premises during that respective year. <br />Section BASIS FOR DETERMINING AMOUNT OF CLAY MINED <br />Quantities of Clay mined and removed from the Leased Premises shall be determined either <br />by weight method or by survey method. In the event the weight method is used, then all Clay mined <br />and removed from the Leased Premises shall be weighed on truck scales. Copies of all certified <br />scale weights shall be made available to UPLRC upon request and UPLRC shall have the right to <br />checktest the truck scales and to inspect books and records of Lessee to verify scale weights relative <br />to computing production royalty due herein. In the event the survey method is used, the in-place <br />weight of a unit volume of Clay shall be deemed to constitute one and one-half (1.5) tons of material <br />and such volume/tonnage ratio shall be used in calculating production royalty due herein. All Clay <br />mined and removed from the Leased Premises shall be determined by volumetric survey insufficient <br />detail and in accordance with sound mining engineering principles to enable the Lessee to determine <br />the amount or volume of Clay removed from the Leased Premises. Such survey notes and records <br />shall be made available for UPLRC's review upon request and the methods of recording this data <br />shall be subject to UPLRC's approval. In the event UPLRC reasonably determines there is a <br />potential discrepancy in Lessee's survey figures, UPLRC may, at its own expense, have the Leased <br />Premises resurveyed by a registered land surveyor to detertine whether any such discrepancy exists. <br />Whether the Lessee uses the weight method or the survey method in determining the amount <br />of Clay mined and removed from the Leased Premises, Lessee shall within thirty (30) days of the <br />effective date of this Lease, or prior to such time as Lessee may commence working the Leased <br />Premises, whichever is earlier, at its sole cost and expense obtain through a registered land surveyor <br />an accurate survey and map plot of the Leased Premises to establish the preproduction physical <br />condition of the entire Leased Premises. Permanent boundary markers shall be placed on the Leased <br />Premises, which markers shall not be disturbed during the course of excavation, to cleazly and easily <br />identify the boundary lines of the Leased Premises with adjoining lands. Annually thereafter and <br />at more frequent intervals at the reasonable request of UPLRC, the Lessee at its sole cost and <br />Page 4 of 13 <br />z <br />