2015-12-07_GENERAL DOCUMENTS - M1974132

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IV. ROYALTIES Lessee shall pay to Lessors, as royalty, the sum of sixty-five cents ($.65) for each ton of sand and gravel removed from the Leased Property and twenty-five cents ($.25) for each ton of overburden dirt removed from the Leased Property. The quantity shall be determined before the materials are removed from the Leased Property. Lessee agrees to pay Lessor Ten Thousand Dollars ($10,000.00) annually in advance of the Lease Year: the first Ten Thousand Dollar ($10,000.00) payment due after the thirty -day inspection period described in Section II, above, and payments due thereafter on the Annual Anniversary Date for each succeeding year. Royalties for materials removed shall be credited against the advanced royalties until the entire amount is offset by the advance payment credit. If, in any lease year, Lessee fails to remove Material as has been paid for by the advance payment, the excess of the advance payment shall constitute a credit against tons removed and sold in the future, provided that cumulative credits shall expire at the end of the original five-year term of this Lease and at the end of any five-year renewal term for this Lease and all sums paid to Lessors shall remain Lessors'. On each Annual Anniversary Date, the royalty rate to be paid for Material removed from the Leased Property shall be adjusted to reflect the change in the purchasing power of the dollar. The adjustment computation shall be based on The Consumer Price Index (All Urban Consumers, All Cities, All Items), as prepared by the United States Department of Labor as of the Annual Anniversary Date. The index obtained shall be compared with the price index figure for the immediately preceding Annual Anniversary Date (or Commencement Date, whichever the case may be), and the per -ton price shall be varied (either increased or decreased) in the same ratio as the more recent price index bears to the less recent price index. If the index prescribed above ceases to be published by the United States Department of Labor or its successor agency, a similar index shall be utilized. (This basis of computation is taken from the case of Centennial Enterprises. Inc. v. Mansfield Dev. Co., 568 P.2d 50 (Cob. 1977), and is to be interpreted consistently therewith.) Lessee shall forward to each individual Lessor monthly reports showing the quantity of Material removed from the Leased Property during the preceding month according to consecutively numbered load tickets, with the date of loading. The reports shall be forwarded to Lessors by the twenty-fifth (25th) day of the following month, whether materials are removed or not. Royalties for materials removed from the Leased Property in excess of the $10,000.00 advance royalty shall be due on the twenty-fifth (25th) day of the month following the calendar month in which such material is removed. All payments due to Lessors by Lessee under this Lease shall be made to Lessors at the addresses set forth in Article United/Sheridan Family Gravel Lease 2