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terminated earlier than the Initial Term if the Tenant has produced 1500,000 tons of <br /> Materials and the Leased Premises has been reclaimed to the satisfaction.of the <br /> Landlord,the Division and any other regulatory agencies. <br /> 5. Lease Payments to Landlord <br /> 5.1. Tenant covenants and agrees to pay to Landlord as rent during the term of the Lease the . <br /> following amounts for use of the Leased Premises. <br /> 5(2. Sales Royalty: For all Materials sold from the Property during each Lease Year,Tenant <br /> shall pay to Landlord a royalty.("Sales Royalty") at the rate specified in Paragraph 5.2.1 <br /> per sales ton(2,000 pounds)on all Materials sold from the Leased Premises. • <br /> • <br /> 5.2.1.Sales Royalty Payment: With th9 exception of the first year of production and sales, <br /> Tenant will pay Landlord the Sales Royalty payment due within thirty (30) days <br /> following the close of each fiscal quarter during the Lease Year. However, for all <br /> Material sold from the Property during calendar year 2019,Tenant will make a one- <br /> time annual Sales Royalty payment pursuant to the Royalty Rate per ton for <br /> calendar year 2019 as specified in section 5.2.2, to Landlord within thirty (30) days <br /> following the end of 2019 (payment due February 28, 2020). Commencing in <br /> calendar year 2020, subsequent Sales Royalty payments due will be made within <br /> • thirty(30)days after the end of each fiscal quarter. <br /> 5.2.2.Sales Royalty Minimum: Tenant is obligated,on an annual basis,to pay landlord a <br /> sales royalty on a minimum of 40,000 tons of material, as rent, based upon the <br /> applicable fiscal year royalty rate. Upon signing of the Lease, Tenant will be <br /> obligated to pay the minimum royalty for fiscal year 2019 at the rate of$1.75 per <br /> ton ($70,000)or based on tonnage sold, whichever is higher(payment due in full by <br /> February 28,2020)If by March 1,2020,Tenant has been unable to begin production <br /> and sale of materials for any reason,Tenant may either continue the Lease in force <br /> and effect or may terminate the Lease with written notice to the landlord. If the <br /> Lease is terminated,Eagle Rocks shall transfer the mining permits from the State of <br /> Colorado and the SUP from Eagle County at no cost to VVR LLC. within 30 <br /> days of Lease termination. <br /> 5.2.3.Sales Royalty Schedule: <br /> LEASE YEAR ROYALTY RATE PER TON <br /> 2019 <br /> 2020 <br /> 2021 <br /> 2022 gar <br /> 2023-2029 111. <br /> 5.2.3.1.Adjustment: subject to Paragraph 5.2.3 the royalty rate shall be fixed the first <br /> 5 years of operations. A Royalty Rate adjustment will start in fiscal year 6. <br /> Ak <br /> x!), ( <br />