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9. Lessee agrees to proceed with due diligence to make application to <br />the Colorado Department of Natural Resources, Division of Minerals and <br />Geology Eot a Colorado Mined Land Reclamation Pernlt and to any Other <br />regulatory entities that have juriedictf on over such an operation. <br />Such permits will be maintained in good standing until such time that <br />mining Aae ceased, the affected area has been reclaimed and the Lease <br />has been terminated. <br />The reclamation permit and reclamation blind will be obtained in the <br />name of United Companies of Hesa County, Inc. All expenses of <br />obtaining and maintaining the required permits will be borne by the <br />Lessee. <br />5. Shia Agreement shall be effective from the date of execution and <br />shall remain in full Larce and effect, for the purposes of mining, <br />extraction and processing of aggregates until July 1, 2014. This <br />Agreement may be renewed for up to twenty (20) years with the mutual <br />consent and agreement of the Lessor or successors and Lessee or <br />successors. <br />6. In consideration of this Lease Agreement, the Lessee agrees to pay <br />to Che Lessor as follows, <br />a. A royalty fee shall be paid for each ton (2000 lbs.) of aggregates <br />that is sold and removed from the Leased Property. <br />b. The royalty fee shall be paid to the Lessor at a rate of 50.50 per <br />ton of aggregate material for the first 100,000 tons of material sold <br />and removed from the Leased Property. <br />The royalty fee shall be increased by 50.05 per ton for each subsequent <br />100,000 tons of aggregate material sold and removed from the Leased <br />Property up to a maximum rate of 50.75 per ton. <br />c. Nithin six (6) months of such time that the maximum royalty rate <br />(S.75) has been attained, by virtue of having sold and removed 600,000 <br />tone of aggregates from the Leased Property, the Lessor or the Lessee <br />may initiate a .discussion regarding the royalty rate of subsequent <br />quantlties~of aggregatea sold and removed Lrom the Property. <br />This discussion will address the present royalty rate amount and the <br />proposed future royalty rate amount in relation to the then present <br />market conditions. An adjustment in the royalty rata amount may then <br />be addressed. The party to this Agreement initiating ouch a discussion <br />shall provide the ocher pasty to this Agreement written merits of said <br />request. <br />d. Lessee will provide the Lessor with a written statement for the <br />material sold and removed iron the Leased Property during the preceding <br />month and make royalty payment to Lessor for the total royalty due by <br />the 25th day of each auccessive~month, for aggregates sold and removed <br />in the preceding month. <br />Colons Pit November 06 N-3 <br />