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GoodMiller #2 Pit <br />112c Permit <br />1:. The right at any time to grant a right -cif -way upon, over or across all or any part of said premises for any <br />ditch, reservoir, railroad, communication system, electric powerlinc, or pipeline, schoolhouse or other <br />lawful purpose; but that such giants shall be subject to the rights of Lessee. <br />F. The right at any time to place the Leased Premises into the Stewardship Trust as set forth in Section <br />1(X 1)(b)(1) of Article IX, of the State Constitution. Said placement into the Stewardship Trust shall be for <br />reasons not inconsistent with the rights and privileges of Lessee. <br />TO HAVE AND TO HOLD the above described Leased Premises unto lc-,-cc, its heirs, successors, assigns, or <br />legal representatives for the primary term of 1 ears, and until Twelve O'clock noott on the 1st day of August, 2023_ 7 he <br />Lease may continue in effect for an additional 10 years to the 1st day of Jamra 2Q33 (the "Secondary Term ") as long as <br />sand and gravel are being produced in paying quantities from said Leased Premises and subject to the terns of paragraph 4 <br />of this Lease, and the royalties and rentals provided for herein are being paid, subject to the following tenns, conditions and <br />agreements, to wit: <br />_1s minimum and sdvance royalty, withuut relation to the amount of <br />u ne <br />uials mined M Ed Premises, lessee shall pay annually in advance to Lesser the following amounts: <br />LEASE YEAR ANIR VOM ! <br />Lease Year ti AM <br />(starting August 1, 2018) <br />and each year thereafter that the lease <br />is in full force and effect <br />if I,essce dues trot extract minerals from the Leased Premises sufficient to return to the Lessor the minimum <br />amounts above specified, it is nevertheless understood that the above sums of money are due and payable to Lessor <br />whether or not minerals arc mined, but that such advance minimum royalty shall be credited upon the first royalties <br />due as herein provided for minerals actually produced from the Leased Premises. In the absence of production of <br />minerals in continuous paying quantities before the expiration date of the lease, all advance minimum royalties and <br />all rentats shall be forfeited to Lessor. <br />Acreage changes resulting from surrender or partial .assignment do not reduce the advance minimum royalty <br />proportionately. Further, at the end of each five - )-car period, commencing front August 1, 2018, Lessor may increase <br />the rate or amount of advance minimum royalty to be paid by Lessee: by a rate not to exceed the rate of increase of <br />the average Producer's Price Index for Construction Sand, Gravel and Crushed Store for the previous 5 -year period, <br />as published by the U.S. Department of Labor, Bureau of Labor Statistics. Failure to comply with any new advance <br />minimum royalty rate set by Lessor may subject this lease to ca►tccllation by thirty day written notice by Liessur. <br />In case of assignment of this lease, all advance minimum royalty paid to the state shall be carried forward <br />and credited to the new assignee. <br />2. PRODUCTION ROYAL : -- Lessor reserves as royalty, and Lessee agrees to pay to Lessor on or before die last <br />day of each calendar month following the mouth of production the following amounts: <br />• The royalty rate shall be am per ton (2000 pounds) of sand & gravel produced and sold from the Leased <br />Premises, or NA % of the gross sale prig: at the first point of sale to an independent purchaser, whichever <br />is greater. <br />Further, at the end of each five-year period, commencing from the original lease date, for so long as this lease <br />remains in effect, Lessor may increase the rate or amount of production royalty to be paid by Lessee by a rate not to <br />Page 2 of 11 <br />GoodMiller #2 Pit Dec 2014 N -3 <br />