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III. TER[; <br />Ttie initial term of this Lease shall be ten (10) years <br />("primary term"), renewable by Lessee at its option for three <br />additional terms of ten (10) years each, subject to the terms <br />and conditions set forth at Section VIII hereof. <br />IV. ROYALTIES PAYABLE TO CF&I <br />4.1 Minimum Advance Royalty. Upon the execution hereof <br />and on each anniversary date thereafter, Lessee shall pay to <br />CF6I a minimum advance royalty of Five Thousand dollars <br />($5,000.00). The minimum advance royalty shall be credited <br />against production royalty due for not to exceed two years <br />following the due date of each minimum royalty payment. The <br />minimum advance royalty shall be adjusted in accordance with <br />paragraph 14,2 each calendar year beginning on the second <br />anniversary hereof, provided it shall never be adjusted below <br />five thousand dollars ($5,000) per year. <br />4.2 Production Royalties. Subject to set-off as provided <br />in paragraph 4.1(a) above, Lessee shall pay each month to CF&I <br />a production royalty of thirty cents (30¢) on each and every <br />ton (2,000 lbs.) of limestone that is mined and removed from <br />the Premises, including limestone removed from existing or <br />hereafter created mine tailings or refuse piles. This royalty <br />rate shall be adjusted in accordance with paragraph 14.2 each <br />calendar year beginning on the second anniversary hereof, pro- <br />vided it shall never be adjusted below thirty cents (30¢) per <br />ton. <br />4.3 Weighing or Measurement. All limestone material which <br />is removed from the premises shall be weighed on certified <br />truck scales and copies of weigh tickets furnished to CF&I on a <br />monthly basis no later than the morning of the second working <br />day of the succeeding month. CF&I may at its sole discretion <br />approve some other method of measurement such as truck counts. <br />4.4 Payment. All minimum advance royalty payments payable <br />in accordance with paragraph 4.1 above shall be made on or be- <br />fore the day such payments are due as provided above. The pro- <br />duction royalties payable in accordance with paragraph 4.2 <br />above shall be paid on or before the 25th of the following <br />month to CF6I at the address set forth in paragraph 14.1. <br />V. TITLES, TECHNICAL INFORMATION AND WARRANTIES <br />5.1 Title Warranties. CF6I represents only that its title <br />to the Premises is based upon-the-entry-and-location of-unpat-. <br />ented mining claims made by CF&I, or its predecessors in inter- <br />est, in good faith attempted compliance with the mining laws of <br />the State of Colorado and the United States of America and has <br />been maintained against relocation by the requisite amounts of <br />-2- <br />