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the date of notice of termination of Lease at the rate of ten percent (10%) per annum. This <br />contingent liability will be secured by a Deed of Trust of even date to be recorded in the real <br />property records of Mesa County Colorado. <br />Once Lessee commences the term of this Lease, royalties for materials removed shall <br />be credited against the advanced payment until the entire amount is offset by the advance <br />payment credit. Lessee shall release the Deed of Trust upon commencement of this Lease, <br />Lessee shall forwazd to each individual Lessor monthly reports showing the quantity <br />of Material removed from the Leased Property during the preceding month according to <br />consecutively numbered load tickets, with the date of loading. The reports shall be <br />forwarded to Lessor by the twenty-fifth (25s`) day of the following month, whether materials <br />aze removed or not. <br />Royalties for materials removed from the Leased Property in excess of the Twenty <br />Thousand Dollars ($20,000.00) advance royalty shall be due on the twenty-fifth (25a`) day of <br />the month following the calendar month in which such material is removed. All payments <br />due to Lessor by Lessee under this Lease shall be made to each individual Lessor in the pro <br />rata amount due to each individual Lessor. <br />Lessee agrees to keep a strict and accurate record of all materials removed from the <br />Leased Property and all sales thereof. Lessor shall have the privilege, at reasonable times, of <br />examining the mining procedures and checking the books and records of Lessee for the <br />purpose of verifying the amount of royalties payable. <br />N. COVENANTS OF LESSEE <br />Lessee covenants and agrees with Lessor as follows: <br />1. To comply with all applicable laws, rules and regulations of governmental <br />authorities, including, without limitation, the Mined Land Reclamation Board of the State of <br />Colorado, and as well to comply with appropriate zoning, land use, and other regulations of <br />Mesa County, Colorado. <br />2. To conduct all of its operations in accordance with the laws of the State of <br />Colorado, including, without limitations, the water laws, mining laws, and regulations of the <br />State Engineer. <br />3. To allow the Lessor or their officers or agents, from time to time, to enter upon <br />all parts of the leased premises for the purpose of inspection, surveys, taking of samples and <br />measurements. <br />4. To provide the Lessor continued access to those portions of Leased Property <br />not actually being used in mining activities of the Lessee and to accept the leased premises in <br />its present condition. <br />