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Lessee, all time limits set forth in this Lease may be • adjusted, should the judicial proceedings continuo beyond September of 1981. iJOtwithstanding anything else to the contrary, if Lessee chooses to remove gravel from Section 34, all terms of Chis Agreement, except those reouiring Lessee Lo make advance royalL-y payments and Che August 30, 1988 term of this Agreement, shall be in full force and effect. 10. In the event that any encumbrance of the Leased Premises incurred by Lessor is not paid when due, the Lessee shall have the right to pay such encumbrance on behalf of and for the benefit of Lessor and deduct all such payments from advance or production royalties due to r• Lessor, or, at its option, the Lessee may give thirty (30) days written notice of its intend to cancel this Agreement and should Lessor not cure such default within such thirty {30) day period, the Agreement shall become null and void. 11. Lessor hereby grants Lessee reasonable access to the Leased Premises during the full term of this Agreement. 12. In consideration of this Lease Agreement, and each and every convenant of the Lessor herein contained, the Lessee agrees to pay to the Lessor as follows: A. A production royalty shall be paid to Lessor at the rate of 5.275 per ton of sand and gravel mined and removed from the Leased Premises, subject to increase or decrease as provided hereinafter. B. The production royalty shall be paid to Lessor at the earlier of: (i) the 25th day of the month subsequent to removal of the sand 'and gravel from the Leased Premises, or (ii) 180 days after August 30, 1988. C. Lessee shall provide Lessor with a ;written statement as to the sand or gravel removed from the Leased Premises during the oc'eceding month and make payment to Lessor of the total due therefor, by the 25th day of each rionth for materials removed in the preceding month. D. The increase or dec~•~ase in the royalty shall be in accordance with the percent change in the Consumer Price Index (1967 = 100) - all Urban Consumers, for the area of Denver, Colorado, as published by the United States Department of Labor. On July 1 of each year during the lease term, beginning July 1, 1982, the last index published shall be consulted and the oercenC chance from one year prior thereto as revealed therein shall be initially applied to the 5.275 per ton and thereafter to the price per ton currently being paid. The new price per ton shall then control until July 1 next follo,~ino. For example, if the -4-