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5. Method of Measuring the Amount of Sand & Gravel Removed. <br />5.1. Use of Scale. Quantities of Sand s Gravel removed from the Property <br />on which royalty is due will be measured as follows. The Lessee shall maintain a <br />scale (or scales) which are certified and licensed by the State of Colorado, <br />over which all materials removed from the Property shall be weighed, and keep <br />accurate records of all weights of such materials, including date and time when <br />weighed, and including empty weights of the trucks or other vehicles <br />transporting the materials, and a reasonable identification of such vehicles, <br />which shall be available for inspection by Owner at all reasonable times during <br />business hours. Lessee shall make its trucks and scale available for Owner to <br />verify their empty weight at the scale for the Property at all reasonable times <br />during business hours. If Sand & Gravel on which royalty is due are mixed with <br />non-excavated materials prior to weighing {for example, in case of mixing gravel <br />with asphalt or water and Portland cement prior to removal) then the mixed <br />material shall be weighed and/or measured, an appropriate deduction from the <br />weight of the mixed materials shall be made for the weight of the materials <br />added. <br />5.2. Records to be Kept. Lessee shall keep accurate records of quantities, <br />nature and weights of materials on which Production Royalties are due, which <br />records shall be available for inspection by 'Owner at all reasonable times <br />during business hours. ' <br />5.3. Retention of Records. Records for each annual periad ending on an <br />Anniversary Date shall be kept for three years after the Anniversary Date, and <br />may be destroyed after the end of the three-year period. <br />5.4. Audit: Cost. Owner may cause an audit of Lessee's books and records <br />to be made, for purposes of verifying the amount of Production Royalty due to <br />Owner. All reasonably necessary records shall be made available to Owner or its <br />agents for such purposes. The fees of the auditors shall be paid by Owner, <br />unless the audit discloses an understatement of the Production Royalty properly <br />due to Owner in excess of two percent of the amount of the Production Aoyalty <br />reported, in which event Lessee shall pay the fees of the auditors. <br />5.6. Interest on Late Payments. Any late payment shall bear interest at <br />the rate of eighteen percent (188) per annum. <br />6. Water. <br />6.1. Lessee shall be responsible for installation and maintenance of <br />culverts and drains to insure the adequacy and control of drainage, and for not <br />impairing the existence and operation of existing irrigation ditches, if any, <br />located on the Property. <br />~.2. Owner shall furnish c+r cause to be furnished to Lessee water for the <br />operation and, as applicable, reclamation of the Property in accordance with the <br />terms of this Section 6.2. <br />~~~ 6.2.1. Owner shall furnish or cause to be furnished to Lessee water or <br />water rights sufficient for the operation of the Property, including water <br />sufficient for dust suppression. <br />.4, ./V' <br />~~ 5of14 <br /> <br />