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1. ADVANCE MINIMUM ROYALTY — As minimum 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 amounts:
<br /> LEASE YEAR AMR LEASE YEAR AMR
<br /> NA NA NA NA
<br /> If Lessee does not extract minerals from the;Leased,Premises sufficient-to retum;_,to,the:Le*ssor the minimum
<br /> amounts above specified, it is.nevertheless underst68sit at 411e.-above sums of money are due and payable,to Lessor
<br /> whether or not minerals are mined, but that such:adv'AA-ae'inimmurn'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, ontiiiuous:paying quantities before.the_expiration.date of the lease, all advance minimum royalties and
<br /> al rentals:shall.be forfeited taL'essor.
<br /> Acreage changes resultin—from .surrender:or partial;assignment- may reduce the advance minimum royalty
<br /> proportionately. Further,, at the end of each,,—jive—year--.period, commencing:from,tlie. original lease date, Lessor
<br /> may reasonably change the;rate or amount of advance iminimum,royal y to bet.paid by Lessee. Failure to.comply
<br /> with any new advance minimum royalty rate.set by-.Lessor,may,.'subject this lease to cancellation-by thirty day
<br /> written notice by Lessor.
<br /> In case of assignment;of this lease,-all.,advan_c_e-minimum royalty paid,to the state shall be carried-forward
<br /> and credited to the new assignee.
<br /> 2_ — Lessor reserves asffoyalty,,arid-Lessee agrees to pay to Lessor on or before the last
<br /> day of each calendar month following the month:ofproductioriahe following amounts:
<br /> • For 318 inch plus rock the royalty rate shall be IMMMEWon of 2000#, or$ na per cubic yard,or na% of
<br /> the gross sale price at the first point of sale to an independent purchaser,whichever is greater;
<br /> • For base course consisting of approximately xx to x:c% of 3/8 inch minus fines and xx to xx%of 3/8 inch
<br /> plus rock the royalty rate shall be na per ton;
<br /> • For 3/8 inch minus fines,overburden,fill,or clay the royalty rate shall b C<5W,per ton.
<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 reappraise the property herein: leased and .fix and determine the rate.of production
<br /> royalty to be paid during each year of the:succeeding five-year-period. Failure to comply with any new royalty rate
<br /> set by Lessor may subject this lease to cancellation by thirty=day written notice by Lessor.
<br /> Reporting of production royalty that is credited agalnsf-advanced-minimum royalty is also due on or before the
<br /> last day of each calendar month for mining duririg.the preceding:calendar month.
<br /> 3. EXTENSION--Lessee may have a preferential right to-renew-the-lease or to receive a new lease,whichever may be
<br /> determined by Lessor to be in the best interest of the State,under the following conditions:
<br /> A. An advance minimum royalty, the amount to be negotiated before expiration of the lease, will be due and
<br /> payable annually commencing on the date this lease is renewed or a new lease is executed and shall
<br /> continue until the expiration of the rev, or renewed lease. This amount may be adiusted by Lessor at the end
<br /> of each five-year period of the renewed or new lease.
<br /> B. Lessee shall furnish to Lessor satisfactory evidence ofplans for mining during the term of the renewed lease
<br /> or during the term•of a new lease.
<br /> C. Lessee shall furnish adequate geological 7evidence to Lessor that the acreage subject to the renewed or new
<br /> lease is in fact an integral part of and contains reserves in a logical mining unit. Whether the acreage is or is
<br /> not a part of a logical mining unit will be determined by Lessor.
<br /> D. Ain extension of this Lease as determined by Lessor-wouId be in the bes.interest of Lessor.
<br /> 4. EXTENSION BY PRODUCTION—The Lease may continue in effect for a Secondary Term of 10 years to the 6th
<br /> day-of 9- anuarv_2032.as long as sand-and gravel.are being produced in-..paying quantities from.the Leased Premises.
<br /> Paying quantities is defined as'production-and sales of a quantity sufficient to return to Lessor production royalty
<br /> payments of a minimum of$2,000.00 per year.
<br /> 5. ANCILLARY USE — Lessee may remove.approved minerals,-.and place on the Leased Premises stock piles of
<br /> material mined from the Leased Premises and other such equipment as is approved by Lessor for this removal and
<br /> processing. All temporary ancillary .uses such -as concrete .plants, asphalt, plants, accessory equipment, offsite
<br /> agg:•egate materials and-any other uses not specifically.mentioned.herein.wdl be subject to the approval of Lessor
<br /> and require-a yearly rental payment of no less than$2,000.00.J-N_au-I roads and/or access roads which.do not directly
<br /> benefit the Leased Premises will.be subject to a separate-permit and approval of Lessor.
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