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Department of Labor, Bureau of Labor Statistics. Failure to comply with any new royalty rate set by <br /> Lessor may subject this tease to cancellation by thirty-day written notice by Lessor. <br /> Reporting of production royalty that is credited against advanced minimum royalty is also due on or <br /> before the last day of each calendar month for mining during the preceding calendar month. <br /> 3. EXTENSION -- Lessee may have a preferential right to renew the lease or to receive a new lease, <br /> whichever may be determined by Lessor to be in the best interest of the State, under the following <br /> conditions: <br /> A. An advance minimum royalty, the amount to be negotiated before expiration of the lease, will <br /> be due and payable annually commencing on the date this lease is renewed or a new tease is <br /> executed and shall continue until the expiration of the new or renewed lease. This amount may <br /> be adjusted by Lessor at the end of each five-year period of the renewed or new lease. <br /> B. Lessee shall furnish to Lessor satisfactory evidence of plans for mining during the term of the <br /> renewed lease or during the term of a new lease. <br /> C. Lessee shall furnish adequate geological evidence to Lessor that the acreage subject to the <br /> renewed or new lease is in fact an integral part of and contains reserves in a logical mining unit. <br /> Whether the acreage is or is not a part of a logical mining unit will be determined by Lessor. <br /> D. An extension of this Lease as determined by Lessor would be in the best interest of Lessor. <br /> 4. EXTENSION BY PRODUCTION-The Lease may continue in effect for a Secondary Term of 5 years to the <br /> 10`h day of March, 2026 as tong as sand and gravel are being produced in paying quantities from the <br /> Leased Premises. Paying quantities is defined as production and sales of a quantity sufficient to return <br /> to Lessor production royalty payments of a minimum of$10,000 per year. <br /> 5. ANCILLARY USE -- Lessee may remove approved minerals, and place on the Leased Premises stock piles <br /> of material mined from the Leased Premises and other such equipment as is approved by Lessor for this <br /> removal and processing. All temporary ancillary uses such as concrete plants, asphalt plants, accessory <br /> equipment, offsite aggregate materials, recycled asphalt processing and stockpiles, and any other uses <br /> not specifically mentioned herein will be subject to the approval of Lessor and require a yearly rental <br /> payment of $500 per acre occupied by such ancillary uses. Haul roads and/or access roads which do <br /> not directly benefit the Leased Premises will be subject to a separate permit and approval of Lessor. <br /> 6. REPORTS AND RECORDS -- After operations begin, it is agreed that on or before the last day of each <br /> month during the term of this tease Lessee shall submit a sworn, verified, written report to Lessor, in <br /> which report shall be entered and set down the exact amount in weight of all products and the assay <br /> thereof mined and removed from said Leased Premises during the preceding calendar month. Lessee <br /> agrees to keep and to have in possession complete and accurate books and records showing the <br /> production and disposition of any and all substances produced on the Leased Premises and to permit <br /> Lessor at all reasonable hours, to examine the same or to furnish copies of same to Lessor within 60 <br /> days following written request along with purchaser's support documentation. All said books and <br /> records shalt be retained by Lessee and made available in Colorado to Lessor for a period of not less <br /> than 10 years. If any such examination shall reveal, or if either party shall discover any error or <br /> inaccuracy in its own or the other party's statement, payment, calculation, or determination, then <br /> proper adjustment or correction thereof shalt be made as promptly as practicable thereafter, except <br /> that no adjustment or correction shall be made if more than 10 years have elapsed between the time <br /> the error or inaccuracy occurred and the discovery by either party of said error or inaccuracy. <br /> GL 110167 Revised 9/2015 <br /> Page 3 of 13 <br />