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remove any stockpile sand or gravel or other Leased Substances (which shall be the property of <br />LESSEE but subject to Royalty payment in accordance with the terms hereof). <br />10. Taxes: <br />(a) LESSOR shall be liable for and shall promptly pay when due all real property <br />and ad valorem taxes acrd assessments assessed against and levied upon the Leased Premises, <br />except thosetaxes assessed and levied against machinery, equipment, fixtures, structures and <br />improvements placed or erected on the Leased Premises by the Lessee, and except any taxes <br />which by law are assessed to and required to be paid by LESSEE, which taxes shall be paid <br />by LESSEE. LESSEE shall pay all severance, excise and production taxes, or other taxes <br />on or measured by production of Leased Substances. LESSEE shall pay all sales and use <br />taxes levied or assessed upon Leased Substances sold by it from the Leased Premises. <br />(b) If LESSOR fails to pay any of the taxes chargeable to it, when due, LESSEE, <br />at its option, tnay pay LESSOR'S taxes and deduct such payments from Royalties and <br />Minimum Annual Payments becoming due to LESSOR hereunder. <br />11. Disyosition of Overburden: For the purposes of this Agreement, overburden shall <br />be deemed to be all material situated above deposits of Leased Substances. LESSEE shall have the <br />right to sell all overburden removed and obtained in the course of its operations contemplated herein, <br />except for quantities of overburden required to be stockpiled or retained under any govetrunent <br />regulation or under any mining or reclamation plan submitted as a condition to issuance of such <br />permit. <br />12. Zoning -Permits: <br />(a) LESSOR represents that the Leased Premises are presently zoned Al, <br />permitting mining and processing by screening plant operations, in accordance with <br />SUMMIT County zoning regulations, which zoning does permit the mining, extraction and <br />removal of the Leased Substances from the Leased Premises and the conduct of the <br />additional activities contemplated hereunder, excepting crushing operations. Upon <br />LESSEE'S request, LESSOR agrees to make application for or to join LESSEE in making <br />any applications for, and to provide al] reasonable cooperation to LESSEE in order to obtain <br />a special use permit or the rezoning of the Leased Premises so as to permit LESSEE to <br />conduct the operations contemplated by this Agreement including, without limitation, <br />crushing operations. LESSOR agrees to transfer the ownership of, and/or allow operations <br />under, all Colorado Department of Public Health and Environment air permits currently held <br />by the LESSOR and relating to the Property. <br />(b) LESSOR represents and warrants that it is currently and validly holding <br />Colorado Division of Minerals and Geology ("DMG") Permit No. M-1998-052 (the "DMG <br />Pernrit"), which allows the mining activities on the Property as contemplated under this <br />Agreement. LESSOR further acknowledge that, to the extent that LESSEE and/or LESSOR <br />09/OG/2002 L.G. Everist /Rock Island Land Co. page 6 <br />Option and Lease Agreement <br />