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2036 (the "Secc.idary Terri") as long as sand and gravel are being produced in paying quantities from said <br /> Leased Premises and subject to the terms of paragraph 4 of this Lease, and the royalties and rentals provided <br /> for herein are being paid, subject to the fotlov.-ing terms, conditions and agreements, to wit: <br /> 1. ADVANCE MINIMUM ROYALTY -- As min;murn and advance royalty, without relation to the amount of <br /> minerals mined from the Leased Premises. Lessee shall pay annually in advance to Lessor the following <br /> amounts: <br /> LEASE YEAR A1AF LEASE YEAR AMR <br /> If Lessee does not extract minerals from the Leased Premises sufficient to return to the Lessor the <br /> minimum amounts above spe;ified, it is nevertheless understood that the above sums of money are <br /> due and payable to Lessor whether or not :Minerals are mined, but that such advance minimum royalty <br /> shall be credited upon the first royalties due as herein provided for minerals actually produced from <br /> the Leased Pr emisas. in the absence of production of minerals in continuous paying quantities before <br /> the expir atlon date of the ;ease, all a dvarce minlm:im royalties and all rentals shalt be forfeited to <br /> Lessor. <br /> Acreage charges resutting from surrender or partial assignment do not reduce the advance <br /> minimum royalt;° p~oportiona,.eiy, Further, at the end of each five-year period, commencing from the <br /> original tease date, Lessor may reasonably charige the rate or amount of advance mirnmum royalty to <br /> be paid by Lessea. Failure to comply with any new advance minimum royalty rate set by Lessor may <br /> subject this lease to cancellation b, thirty day written notice by Lessor. <br /> In case of assi'gnrrien_ of :his lease, all advance miniir,urn royatty paid to the state shall be <br /> carried forward and credited to the ne•iJ ass;Qnee. <br /> _. PRODUCTION ROYALTY -- Lesso., rese;-ves as royalty, and Lessee agrees to pay to Lessor on or before <br /> the last day of each calendar morith fo'.to,^ring the month of production the following amounts: <br /> The royalty rate shall be $0,40 per ton (2000 pounds) or $0.60 per cubic yard of sand >x gravel <br /> produced and sots., from the Leased Premises. <br /> Further, at the end of each five-year peeriod, commencing from the original tease date, for so long <br /> as this tease remains in effect, Lessor may increase the rate or amount of production royalty to be paid <br /> by Lessee by a rate not to exceed the rate of increase of the average Producer's Price Index for <br /> Construction Sand, Gra,•el a:id Cri_,s-red Stone for the previous 5-year period, as published by the U.S. <br /> Department of Labor. Bureavi of Labor Statistics. Failure to comply with any new royalty rate set by <br /> Lessor may subject this lease to cancellation by thirty-day written notice by Lessor. <br /> Repertin, of production royatty 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 /> EXTENSION -- Lessee may have a preferential right to renew the tease 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 o,i the date this lease is renewed or a new lease is <br /> executed and shalt 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 shalt furnish to Lessor satisfactory evidence of pans for mining during the term of the <br /> renewed lease or during the term of a new tease. <br /> GL 110681 Revised 9/2015 <br />