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05/12 <br />RED~II~Ep <br />NOV p 3 Y006 <br />that no adjustment or correction shall be made if more than l0 ye'n4119sea~obnetween the time <br />the error or inaccuracy occurred and the delivery by either party of sat"~@fl'~~reryinaccuracy. <br />Further, Lessee shall fumish annually a complete operations report to Lessor disclosing the <br />number of tons and the value thereof of all materials mined from the Leased Premises during the <br />preceding yeaz. Lessee shall also furnish in said report geologic interpretations and recoverable <br />reserve calculations, and maps and cross sections showing the location of any materials and other <br />prospecting and exploration activities. The records required to be maintained by Lessee and provided <br />to Lessor upon request include logs of all strata penetrated and all geologic and hydrologic <br />conditions encountered, and copies of in-hole surveys -this information to be collected and prepared <br />under the supervision of a qualified geologist, geological engineer or mining engineer. Other <br />qualified persons may collect and prepare this data, if agreed to in writing between Lessee and <br />Lessor. Any request to keep certain information confidential should be in writing to Lessor at the <br />time such information is submitted to Lessor, and such data maybe kept confidential as consistent <br />with State law. Lessee shall submit, if requested by Lessor, such additional reports, records or <br />documents regazding Lessee's operation on the Leased Premises as necessary for compliance with <br />lease provisions. <br />6. OVERRIDING ROYALTY LIMPTATIONS -This lease and any subsequent assignment hereof shall <br />not be burdened with overriding royalties the aggregate of which exceeds two percent (2°k) of the <br />gross value of the materials at the first point of sale. Lessee shall immediately notify Lessor in <br />writing of all ovemding royalties accruing to this lease. <br />7. PENALTIES - A penalty may be imposed by Lessor for, but not limited to, late payments, improper <br />payments, operational deficiencies of any kind whatsoever, violations of any covenants of this lease, <br />or any false statements made to Lessor. Penalties shall be determined by Lessor unless otherwise <br />provided by law and may be in the form of, but not limited to, interest, fees, fines, and/or lease <br />cancellation <br />8. ASSIGNMENT -Lessee may assign this lease, or any interest in this lease or the Leased Premises, <br />in whole or in part, only with the prior written approval of the Lessor. If an assignment of a part of <br />this lease is approved by Lessor, a new lease designated as an assignment will be issued to the <br />assignee covering the lands assigned for the balance of the term of the base lease on the mining lease <br />form in use at the time of assignment and limited to the same term as this lease. <br />9. WEIGHTS -All materials mined and taken from the Leased Prenuses shall be weighed on certified <br />truck scales located within 3 miles of the Leased Premises and the weight thereof shall be entered <br />in due form in weight records kept for such purposes by Lessee. As used in this lease, ton means <br />2,000 pounds. Weights shall be determined by official Colorado State certified scales or other <br />methods approved by Lessor. <br />10. OPERATION PLAN -All plans for exploration and mining shall be submitted to Lessor for <br />approval by Lessor before such operations begin. Plans shall include location of roads, location of <br />access points to the Leased Premises, and location of any cattle guards or gates and shall include <br />provisions for control of weeds. <br />H:Vv1ANGMENMGREEMN"1~2004\09-10.04 Quarry lsase-Stotx Wholesale Corporation-FWALwpd Page4 of 10 <br />