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feed tons changes from the time this Lease is executed to the time production of <br />Materials begins due to Permit restrictions, recalculations, third party interests or <br />similar changes in the existing mine plan, then the maximum cumulative amount of <br />Advance Minimum Royalty the Company is required to pay during the Term of the <br />Lease shall be adjusted using the above formula and new base feed ton volume. <br />V, The Advance Minimum Royalty payment for a Lease Year shall be <br />due on or prior to commencement of that Lease Year. Amounts paid as Advance Minimum Royalty <br />shall be credited as an advance payment of and applied to reduce Materials tonnages otherwise <br />subject to the Sales Royalty pursuant to Paragraph 3.A, based upon the tonnage associated with the <br />royalty rate in effect at the time the Sales Royalty is accrued. Sales Royalties paid pursuant to <br />Paragraph 3.A, after taking into account Advance Minimum Royalties paid pursuant to this <br />Paragraph, shall be applied in succeeding years to reduce amounts subsequently payable as Advance <br />Minimum Royalty. If Import Fees become payable pursuant to Paragraph 3.I), the Company at its <br />option may credit Advance Minimum Royalty not previously applied against the Import Fees <br />otherwise due. Upon termination of this Lease for any reason, the obligation to make Advance <br />Minimum Royalty payments shall likewise terminate except as to payments that became due prior to <br />termination. <br />5. 1Nei.srhing of Materials; Comminalin T. For purposes of calculation of Sales Royalty <br />And/or Import fees, quantities of Materials removed from the Property on which a Sand and Gravel <br />Fee (whether Sales Royalty or Import Fee) is due will be measured as follows: <br />A. Use of Scales. All Materials shall be weighed on a certified scale upon sale <br />and removal from the Company's Plant site. If Materials on which a Sand and Gravel Fee is due are <br />mixed with non-excavated materials (for example, in case of mixing sand and gravel with water and <br />Portland cement in the concrete batch Plant), then for the purpose of calculating the Sand and Gravel <br />Fee, the weight of the Materials used in the mixture will be determined using the certified scales at <br />the batch Plant that measure the weight of the materials that comprise the mixture and deducting the <br />weight of the added non-excavated materials, if necessary. Subject to Paragraph 5.D, below, the <br />weight of Imported Materials and Recycle Materials used in concrete or other mixed products sold <br />from the Property shall be calculated in the same wanner as newly excavated Materials. <br />B. Scale Aduustments. Accuracy of the scale shall be checked and adjustments <br />made at least as often as required to continue to be certified. Records of the accuracy check and <br />adjustments shall be preserved and made available in the same manner as other records. <br />C. Commingling. Subject to Paragraph 3.1), the Company may commingle <br />Materials extracted from the Property with Materials extracted and removed from other properties. <br />In order to fairly and properly allocate production between properties from which commingled <br />Materials are extracted, the pit-run Materials extracted from each property shall be weighed prior to <br />commingling on certified conveyor belts scales upon removal :from the relevant property. Records <br />will be kept as to the tonnages removed from each property, and the total production for each <br />calendar month will be attributed to each property pro-rata, after adjustment of the total tonnage of <br />pit run from all properties for washed fines and tailings pursuant to Paragraph 5.F. below. Materials <br />-5-