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<br />v <br />ADVANCE MINIMUM ROYALTY -- P,s minimum and advance royalty, without relation to the amount of <br />nti~ralbjrnin from;the,,le~ed premises, Lessee shall pay annually in advance to Lessor the following amounts: <br />~ ~ASEp~ ~ ~ ~ ..' AMR_ LEASE YEAR AMR <br />One -Five None_ <br />Six -Ten 10.00/,acre <br />If Lessee does not extract minerals from the Leased Premises sufficient to return to the Lessor the minimum <br />amounts above specified, it is nevertheless understood that the above sums of money are due and payable to <br />Lessor whether or not minerals are: mined, but that such advance minimum royalty shall be credited upon the fvst <br />royalties due as herein provided I.`or minerals actually produced from the Leased Premises. In the absence of <br />production of minerals in continuous paying quantities before [he expiration dale of the lease, all advance <br />minimum royalties and all rentals shall be 6~rfei[ed to Lessor. <br />Acreage changes resulting from surrender or partial assignment may reduce the advance minimum royalty <br />proportionately. Further, at the encl of each five-year period, commencing from the original lease date, Lessor <br />may reasonably change the rate or amount ~~f advance minimum royalty to be paid by Lessee. Failure to comply <br />with any new advance minimum royalty rate set by Lessor may subject this lease to cancellationby thirty day <br />written notice by Lessor. <br />In case of assignment of this lease, all advance minimum royalty paid to the state shall be carried forward <br />and credited to the new assignee. <br />2. PRODUCTION ROYALTY -- Lessor reserves as royalty, and Lessee agrees to pay to Lessor on or before the <br />last day of each calendar month fallowing the month of production, $ .35 per ton of 2000N, or $ <br />per cubic yard, or ------------ °o of the gross sale price at the first point of sale to an independent purchaser, <br />whichever is greater. <br />Further, at the end of each fivt:-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 <br />rate set by Lessor may subject this lease to cancellationby thirty-day written notice by Lessor. <br />Reporting of production royalty that is credited against advanced minimum royalty is also due on or before the <br />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, whichever may <br />be 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 new or renewed lease. This amount may be adjusted by Lessor at the <br />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 d wring the term of the renewed <br />lease or during the term of a new Lase. <br />C. Lessee shall Furnish adequate geological evidence to Lessor that the acreage subject to the renewed or new <br />lease is in fact an integral part of :md contains reserves in a logical mining unit. Whether the acreage is <br />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 -- This lease may not be held in perpetuity; however, the lease will continue in <br />effect (or so tong as minerals are produced in paying quantities. Cessation of production for a period in excess of <br />l80 consecutive days will automatically remove lease from producing status unless otherwise agreed to in writing <br />b}' Lessor. Lessee shall notify Lesser of each cessation of production, Ih.e seasons therefor, and the time period <br />during which production will or did cease. <br />Payine quantities means production sufficient to return royalties to Lessor equal to the advance minimum <br />royalty but in no event less than _Ten Dollars ($ 10.00 )per acre per year. <br />5. ANCILLARY USE -- Lessee Wray remove approved minerals, and place on the Leased Premises stock piles of <br />material mined from this lease and such equipment as is approved by Lessor for this removal. All other ancillary <br />uses such as concrete plants, asphalt plants, accessory equipment, offsite aggregate materials and any other uses <br />not specifically mentioned herein will be subject to the approval of Lessor and require a yearly rental payment of <br />no less than $ 100.00 per acre. Haul roads and/or access roads which do not directly benefit the Leased <br />Premises will be subject to a separate permit and approval of Lessor. <br />Page 2 of 7 <br />