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A~JVANCL ~MINIIvICTM RitYq_L~1-)_ - As minimum and advanoc royalty, adthout ralatinn to d+e amount of <br />ntinertL^ ntlnzd fioni [be Izased premises, Lessee shalipay annually in advance to Lessar the following amounts: <br />LEAA„E PBI:JOp AR1R <br />200a torn 2005 NONE <br />3006 and thereafter' 52.11110 each veur <br />If Lcsscc dots nel eauacl minerals fi~om the Leased Premises Sufficient to rehtm to dte Lessor the ntinimmn <br />amo+uns al..uve sycciticd, iL Ls nevertheless m+dersmod that t}te above sums oP money are due and payable Vr Lasso[ <br />whether or not minerals are tmncd, bra that suoh sdcance.ntinimun, myalTy• sbalfbe credited upon the firs) royalties <br />due as herein pro,~ded for mkieraU aehrally produced Lrom the Leased Rrutises. ht Ste absenet of production of <br />mioemlS in continuous paying qusrtfities before Hte expimtien date of the lease, all advu+ce nthtimum royaltes and <br />:dl rental steal I }re forfeited to Lessor. <br />Further, at the end of each fiat-ycaz patiod, Lessar tray increase the rate ar amount of advance minimum royalty <br />to be paid by Lessee by a rate not to exceed the rate of increase of the average Producer's Ftice Jndcx for sand S, <br />gravel cnnsnvcdon matenalS for the previous five year prnod, as published by the U.S. Department of Labor, <br />Rureau of Labm~ Statistics. Faiturc to comply tvilh any ncN~ advance minimum ro}roltV rate set by Lessor may Subject <br />this lease to cancellation by thirty clay written notice by Lessor. <br />Jn case of essigmtent of [Iris lease, all ademice minimum royalty paid to the state shall be tamed fanvard <br />and credited tq thenew assi¢nee. _ <br />PRODi1CTk1N RC)YALTI' - Leseor reserves as royalty, end Lesser. agrees to pay to Lessor on or before the last <br />day of each calendar month following the month of production, 1$ 0.00 per tan of?00(Nt, or 6 % of the p~oss sale <br />price [lei traitSlxmatian, at the first point of sale to a¢ independent purchaser, whichever is greater. <br />Transportation is defined as all haulage beyond t0e Division of Minerals and Geology Pemvc lxmndary W the <br />first point ofsalc to an irtdtpendrnt purchaser. Trartsporiatiou cktar¢cs ro a entail silts }axd shall not exceed Ure ptx <br />foa-toile rate for local trattspottas. <br />Ftuthtr, at the ettd of each five-ytar period, eotranencing froth tht atieinal (ease date, for so Jong as tlds lease <br />remains in effect, Lessor may reappraise the propetry ltere~in Rased and increase the mhthnttm per nm cote of <br />production royalty by a rate not to exceed the rate of increase of the average Producer's Price Sndox far natural stone <br />building material or a suitable equivalent for [he previous five year period, as published by tht U.S. Depattntcnt of <br />Labor, Bureau of Labor 5tati5hes to be paid during each year of the succeeding iivcrye~aT period. Failure to eompiy <br />with any ncav royalty rate set by Lessor may sulpect this lease to cancellation b}' thut}•-day writtt0 notice by Lessor. <br />Reporting of ptnductian royalty that is credited against advanced minimum myalry' is aUo due on or before the <br />last day of each calendar month for mhtirtg during the pmceding calendar month. <br />E}."PENSION -- Lessee t0ay }rave a preferential right to renew the lease or to receive a new lease after the expiration <br />of the secovda*y term, wdticbever [nay be determined by Lessor to be in the best interest of the Sntz, under the <br />following cmtditions: <br />A. An advance miaimimt royalty, the amount to be negotiated before expiration of the lease, vnYl be due and <br />payable annually comrnencin~ nn the date this Rase is renewed or a new lease is executed and shalt <br />continue until the expiration of the aew or renewed lease. 21tis amotmt may be adjusted by Lessor at the end <br />of each five-yeaz period of dtt rtntwed ai new lease. <br />I3. Lessee shall fvmish to Leaaar satisfactory evidence of plans f'or mining dating the term of the renewed least <br />or during the term of a new lease. <br />C. Lessee shall furnish adequate geological eaddence to Lessor that the acreage subject m the renewed or new <br />lease is in fact an integal part of a¢d eoptainS xeseves m a lo¢icat mining [talc Whdher the acreage is or is <br />not s part of a logical mining unit will be detentilntd by Lessor, <br />D. ~ An extension of this Lease as detemtined by Lessor would he in the best intc.est of Lessor <br />EX"IFNS}ON H}' PRODUCTION - 71ris lease may nbt be kaeld in perpetuity; however, the lease will continue in <br />effect for an a:iditional tau years, the secondary term; [trail ;~ if minerals are produced in paying quafrtities prior <br />to the end of the primar}~ rem, unless mining activities are cunatled due [o reservoir construction. Cessation of <br />production for a period in oxceae of 180 consecutive days vvsli automatically rernovc lenec tiara producing statue <br />unless od,ernise agreed to ua writing by Lessor. Lessee shall notify Less of each cessation of production, the <br />reasons therefor, and the time period daring ufiich production will ar did cease. <br />Faadnn nuanti[its meane productiom sufficient to return my¢lnes to Lessor equal to the advance aainitnttm <br />myalry. <br />A.NCIi;LAT.l' USE -Lesser may remove approved minerals, and place on the Leased Premises stock piles of <br />material mined from this Icasc and such equipment as is approved by Lessor for this removal. All other ancillary <br />uses such as concrete plants, asphalt, plants, accessory equipmem; offsitt aggregate nuterials and any other uses not <br />specifiwll7 mentioned herein will be subject m the approval of Lessor and require a yearly rental pa}nuent of no less <br />Page 2 of 7 <br />2S <br />