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NCWCD REC~IV~p NOV D 3 2006 PAGE 03/12 D. The right at all times during the life of this ]ease to go upon ~j~ ° t~Af4ses and every part thereof for the purpose of inspecting said premises, and to inspect the books of accounts and records of mineral workings therein. E. The right at any time to grant aright-of-way upon, over or across all or any part of said premises for any ditch, reservoir, railroad, communication system, electric power line, or pipeline, or other lawful purpose. TO HA VE AND TO HOLD the Leased Premises unto Lessee, its heirs, successors, assigns, or legal representatives for the term of ten years from the date first se[ forth above, the primary term, and, except as hereinafter stated, fot an additional ten years, the secondary term, if materials are being produced in paying quantities from said premises, and the royalties and rentals provided for herein aze being paid, subject to the following terms, conditions and agreements: ADVANCE MINIMUM ROYALTY - As minimum and advance royalty, without relation to the amount of materials mined from the Leased Premises, and in addition to the rental payments specified above, Lessee shall pay annually in advance to Lessor the following amounts: LEASE PERIOD 2004 thru 2007 2008 and thereafter AMR NONE $2,000 each ,Year If Lessee does not extract materials from the Leased Premises sufficient to return to the Lessor the minimum amount above specified, it is nevertheless understood that the above sums of money are due and payable to Lessor whether or not materials are mined, but that such advance minimum royalty shall be credited upon the First royalties due as herein provided for materials actually produced from the Leased Premises. Tn the absence of production of materials in continuous paying quantities before the expiration date of the lease, all advance minimum royalties and all rentals shall be retained by Lessor. Further, at the end of each five-year period, Lessor may increase the rate or amount of advance minimum royalty to be paid by Lessee by a rate not to exceed the rate of increase of the average Producer's Price Index for natural stone building materials or a suitable equivalent for the previous five-yeaz period, as published by the U.S. Department of Labor, Bureau of Labor Statistics. Failure to comply with any new advance minimum royalty rate set by Lessor may subject this lease to cancellation by thirty-day written notice by Lessor. In case of assignment of this lease, all advance minimum royalty paid to the Lessor shall be carried forward and credited to the new assignee. 2. PRODUCTION ROYALTY -Lessor reserves as royalty, and Lessee agrees to pay to Lessor on or before the last day of each calendar month following the month of production, 10.00 per ton, or 8% of the gross sale of materials price net transportation, at the first point of sale to an independent purchaser, whichever is greater. H:NIANGMEN'MGREEMNT2004\09-Ib04 Quarry Lease-S~one Wholesale Corporeiion-FINALwpd Page 2 of 10