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e.Term. The Term of this lease shall be for a period of Ten (10) years <br />commencing on May 26`x', 2017. The lease shall renew automatically <br />at the end of the Ten(10) year term, unless the Company gives written <br />notice to Lessor sixty (60) days before the end of term. <br />2.Sales Royalties. <br />a.Subject to Paragraph 3.B. and 4, for all Materials sold from the <br />Property during each calendar month, the Company shall pay to Lessor <br />a "Sales Royalty' calculated as follows: <br />b. <br />i. per ton for all sand and gravel, aggregate, overburden or any <br />other material. <br />ii. All payments shall be made within twenty (20) days after the close <br />of each calendar month. <br />iii. The Company shall make a minimum annual payment to Lessor of <br />which amount shall be a credit against payments due <br />Lessor for materials mined and removed,as set forth in subsections <br />b (i) & (ii) above. Once the pit has been completely permitted, the <br />annual minimum payment will be paid in advance for the first <br />seven (7) years of this lease. The remaining payments will be <br />made accordingly following the initial seven year period. To the <br />extent that in any calendar year there remains a credit to Company, <br />that credit shall be carried forward into the next calendar year(s) <br />and applied to mined and removed materials until such time as the <br />entire credit has been used. <br />iv. Annual payments shall be made on or before January 20th. which <br />payment covers the period January 1 —December 31 of each <br />calendar year of this agreement. <br />v. At the end of the initial ten (10) year lease term the parties agree to <br />negotiate in good faith new royalty rates. In the event they do not <br />agree to new rates they shall engage a competent arbitrator who <br />shall have the sole authority to decide the new royalty rates, and <br />the parties shall be so bound. <br />c.The Company shall keep and maintain adequate and accurate records <br />of the quantities of Materials mined and sold. The Sales Royalty <br />payments shall be accompanied by a monthly statement with the <br />royalty calculation that includes an accounting of the tons of Materials <br />mined from the Property and sold or deemed sold pursuant to <br />Paragraph S.C. for the month. Lessor shall have the right at all <br />reasonable times during business hours and upon reasonable prior <br />notice to examine such records of the Company at the offices of the <br />Company and to verify the quantities of Material removed and sold, <br />land the accuracy of the scales used to weigh the Materials. <br />A 2 <br />Lessor Initials \1 <br />Lessee Initials_7