2003-01-29_REVISION - M1998014 - Laserfiche WebLink

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4.3. Rovaltv Rate Adjustment. The Production Royalty rate per tan beginning on the first Adjustment Date and each subsequent Adjustment Date thereafter will be increased or decreased based on the adjustment, but never be less than the initial Production Royalty rate set forth in Paragraph 4.1. The adjustment shall be calculated by using the following method: The Production Rate of shall be multiplied by a factor determined by subtracting the index published for October 2001 (hereafter known as the base year) from the index published for October of the current year (beginning in October 2002) and divided by the base year's index. The adjustment will be added to the initial royalty rate of.~ to determine the royalty rate for the forth-coming year. The Adjustment Date is the last day of each calendar year during the term of this Lease beginning on December 31, 2ooz. The index means the Consumez Price Zndex, All Urban Consumers for the Denver-Boulder area (CPI-U) published by the Bureau of Labor Statistics U. S. Department of Labor. Percent changes in CPI-U Indexes shall be calculated on data with base year 1982 i00 until the BLS publishes data with a new base period. If the index just described or one reasonably similar thereto is no longer published, then an index or adjustment accomplishing as nearly as practical the result which would have been obtaiaed by using the CPI-U if it had been available shall be selected by agreement of the parties hereto, or if the parties are unable to agree promptly on such adjustment, by arbitration. 4.4. Minimum Rovaltv Pavment. For each Lease Year ending on or prior tc December 31, 2007, Lessee shall pay a Minimum Royalty calculated as though 200,000 tons were removed from the Property under paragraph 4.1 above; provided however, the Minimum Royalty tonnage for the period ending on December 31, 2001 shall be 100,000. For each Lease Year ending after Sanuary 1, 2008 the Minimum Royalty shall be calculated as though 300,000 tons were removed under paragraph s.l above. within thirty (30) days after the end of each Lease Year, the Minimum Royalty, if any, shall be calculated and paid as provided in the following sentence for the preceding Lease Year and paid to Owner. The Minimum Royalty shall be calculated by subtracting from the Minimum Royalty the sum of all royalties paid in the preceding Lease Year. If the sum is a positive number, it shall equal the Minimum Royalty due for the preceding year. A "Lease Year" is the twelve (12) month period ending on December 31, beginning with December 31, 2001. 4.5. Minimum Rovaltv Offset. In the event Lessee is required under paragraph 4.fl above to make payments that exceed those calculated solely under paragraph 4.1 above and in a succeeding Lease Year Lessee removes more sand and gravel than the applicable minimum, then Lessee may offset that portion of a succeeding year's royalties by the amount a preceding year's royalties exceeded the minimum, provided that the right of offset may only be carried forward, and the carry forward of the offset for any given year may not extend more than five !5) years. RECEIVE9~ FE6.12 2003 Division of MineraEs ar.;, Gc„coUY ---- ~ 4