Common use of Production Royalties Clause in Contracts

Production Royalties. a. Lessee shall pay to Lessor a production royalty for the nonmetallic minerals and/or nonmetallic mineral products produced and sold from the leased premises which shall be the product of: 1. the sale value, as defined in this lease, of nonmetallic minerals and/or nonmetallic mineral products sold during the past calendar quarter; and 2. the production royalty rate according to the following schedules: Type of Salt and Mining Method In Bulk Rock Salt (NaCl - halite) - conventional dry mining 3.24 % Sodium Chloride - solution mining and natural brines 4.0% Potash - solution mining 5.0% 3. Royalties of all other products will be negotiated by Lessor and Lessee. b. Production royalties shall be paid on a quarterly basis on or before the twenty-fifth (25th) day of January, April, July, and October of every year during the term of this lease for all nonmetallic minerals and/or nonmetallic mineral products sold during the preceding calendar year. c. Lessee shall secure written authorization of the Lessor in order to delay any royalty payments beyond the date specified. Payments made after the due dates shall include interest at the rate of 1.5 percent per month, or at the maximum legal rate, whichever is less, on the amount of royalty unpaid. If royalty payments are delayed, or if such authorization is not secured, Lessor may, at its sole discretion, declare the lease defaulted under the provisions of Section D herein or invoke any other remedies available to Lessor under the lease. Lessor agrees that sales of nonmetallic minerals and/or nonmetallic mineral products on a consignment basis may be justification for allowing Lessee to delay payment of royalty payments beyond the date specified above, however if Lessor approves such delay, Lessor shall specify an alternate payment schedule binding on Lessee. d. Lessee agrees that all royalties accruing to the Lessor herein shall be without deduction of any costs incurred by the Lessee unless agreed to in writing by the Lessor. e. The Lessor is not liable for any taxes incurred by the Lessee and no tax deductions may be taken in computing the royalty.

Production Royalties. a. Lessee LESSEE shall pay to Lessor the LESSOR a production royalty for calculated as follows: a. Determine the nonmetallic gross sales value of all minerals and/or nonmetallic mineral products produced and sold from the leased premises which shall be the product of: 1. the sale value, as defined in this lease, of nonmetallic minerals and/or nonmetallic mineral products lease sold during the past calendar quarter; and. Such sales value shall be based on the actual sales value on the open market as shown by sales receipts. If mineral or mineral products are not sold to an independent consumer on the open market at fair market value, but are processed further by a plant which is operated by the LESSEE, or in which the LESSEE has an interest, the gross sales value shall be determined using prices for the metallic form or for normally accepted forms as published by the Engineering and Mining Journal in the "E and MJ Markets" section, or other mutually agreed upon forms and prices. The gross sales value shall then be divided by the tons of ore processed in that production of minerals and/or mineral products sold to determine the gross sales value per ton. 2b. Determine the price index factor by dividing the constant price index by the current price index. Both price indexes shall be obtained from the producer price index for all commodities, or its successor index, as published monthly by the U.S. Department of Labor, Bureau of Labor Statistics. The constant price index shall be the index for February (month) of 1983 (year), quoted as being 301.2. The current price index shall be the index for the middle month for that quarter. c. Determine the adjusted sales value per ton by multiplying the gross sales value per ton by the price index factor. d. The production royalty rate according shall be not less than 2% nor more than 7%, and shall vary with the Adjusted Sales Value per ton of ore. For every dry short ton of ores containing minerals and/or mineral products other than iron ores that is mined from the leased premises and sold, and for every dry long ton of ores containing minerals and/or mineral products mined principally for iron content that is mined from the leased premises and sold, the royalty rate shall be two (2) percent when the adjusted sales value of the minerals and/or mineral products is twelve dollars ($12.00) or less. The royalty rate shall be increased by one-half (1/2) percent for each six dollar ($6.00) increase in the adjusted sales value per ton of minerals and/or mineral products above twelve dollars ($12.00) per ton, fractions prorated to the following schedules: Type three decimal places, with a maximum royalty rate limit of Salt and Mining Method In Bulk Rock Salt seven (NaCl - halite7) - conventional dry mining 3.24 % Sodium Chloride - solution mining and natural brines 4.0% Potash - solution mining 5.0% 3. Royalties of all other products percent, which limit will be negotiated by Lessor and Lesseereached when the adjusted sales value per ton of minerals and/or mineral products is seventy-two dollars ($72.00) per ton. b. e. The amount of production royalty is then the product of the royalty rate expressed in decimals to five places and the gross sales value. f. Production royalties shall be paid on a quarterly basis basis. If payments specified are not made on or before the twenty-fifth (25th) day of January, April, July, October and October January of every year during the term of this lease for all nonmetallic minerals and/or nonmetallic mineral products sold during the preceding calendar year. c. Lessee shall secure written authorization quarter, LESSOR may claim default under the provisions of Section H herein. In addition to any remedies available to LESSOR under the Lessor in order to delay any royalty lease, payments beyond the date specified. Payments made after the due dates date shall include interest at the rate of 1.5 percent 1.5% per month, or at the maximum legal rate, whichever is less, on the amount of royalty unpaid. g. LESSEE shall secure written authorization of the LESSOR in order to delay any royalty payments beyond the date specified. If royalty payments are delayed, or if such authorization is not secured, Lessor secured and royalty payments are delayed LESSOR may, at its sole discretion, declare the lease defaulted under the provisions of Section D herein or invoke any other remedies available to Lessor under the lease. Lessor agrees that sales of nonmetallic minerals and/or nonmetallic mineral products on a consignment basis may be justification for allowing Lessee to delay payment of royalty payments beyond the date specified above, however if Lessor approves such delay, Lessor shall specify an alternate payment schedule binding on Lesseedefaulted. d. Lessee h. LESSEE agrees that all royalties accruing to the Lessor LESSOR herein shall be without deduction of any costs incurred by the Lessee LESSEE unless agreed to in writing by the LessorLESSOR. e. i. The Lessor LESSOR is not liable for any taxes incurred by the Lessee LESSEE and no tax deductions may be taken in computing the royalty.

Production Royalties. a. Lessee shall pay to Lessor a production royalty for the nonmetallic minerals and/or nonmetallic mineral products produced and sold from the leased premises which shall be the product of: (1. the ) The sale value, as defined in this lease, of nonmetallic minerals and/or nonmetallic mineral products sold during the past calendar quarter; and. (2. the ) The production royalty rate according to the following schedules: Type of Salt and Mining Method In Bulk Rock Salt (NaCl - halite) - conventional dry mining 3.24 3.24% Sodium Chloride - solution mining and natural brines 4.04.00% Potash - solution mining 5.05.00% (3. ) Royalties of all other products will be negotiated by Lessor and Lessee. b. Production royalties shall be paid on a quarterly basis on or before the twenty-fifth (25th) day of January, April, July, and October of every year during the term of this lease for all nonmetallic minerals and/or nonmetallic mineral products sold during the preceding calendar year. c. Lessee shall secure written authorization of the Lessor in order to delay any royalty payments beyond the date specified. Payments made after the due dates shall include interest at the rate of 1.5 percent per month, or at the maximum legal rate, whichever is less, on the amount of royalty unpaid. If royalty payments are delayed, or if such authorization is not secured, Lessor may, at its sole discretion, declare the lease defaulted under the provisions of Section D herein or invoke any other remedies available to Lessor under the lease. Lessor agrees that sales of nonmetallic minerals and/or nonmetallic mineral products on a consignment basis may be justification for allowing Lessee to delay payment of royalty payments beyond the date specified above, however if Lessor approves such delay, Lessor shall specify an alternate payment schedule binding on Lessee. d. Lessee agrees that all royalties accruing to the Lessor herein shall be without deduction of any costs incurred by the Lessee unless agreed to in writing by the Lessor. e. The Lessor is not liable for any taxes incurred by the Lessee and no tax deductions may be taken in computing the royalty.

Production Royalties. a. (a) Lessee shall pay to Lessor a production royalty for the nonmetallic minerals and/or nonmetallic mineral products produced and sold from the leased premises which shall be the product of: 1. (i) the sale value, as defined in this lease, of nonmetallic minerals and/or nonmetallic mineral products sold during the past calendar quarter; and 2. (ii) the production royalty rate according to the following schedules: Type of Salt and Mining Method In Bulk Rock Salt (NaCl - halite) - -- conventional dry mining 3.24 3.24% Sodium Chloride - -- solution mining and natural brines 4.0% Potash - -- solution mining 5.0% 3. (iii) Royalties of all other products will be negotiated by Lessor and Lessee. b. (b) Production royalties shall be paid on a quarterly basis on or before the twenty-fifth (25th) day of January, April, July, and October of every year during the term of this lease for all nonmetallic minerals and/or nonmetallic mineral products sold during the preceding calendar year. c. (c) Lessee shall secure written authorization of the Lessor in order to delay any royalty payments beyond the date specified. Payments made after the due dates shall include interest at the rate of 1.5 percent per month, or at the maximum legal rate, whichever is less, on the amount of royalty unpaid. If royalty payments are delayed, or if such authorization is not secured, Lessor may, at its sole discretion, declare the lease defaulted under the provisions of Section D herein or invoke any other remedies available to Lessor under the lease. Lessor agrees that sales of nonmetallic minerals and/or nonmetallic mineral products on a consignment basis may be justification for allowing Lessee to delay payment of royalty payments beyond the date specified above, however if Lessor approves such delay, Lessor shall specify an alternate payment schedule binding on Lessee. d. (d) Lessee agrees that all royalties accruing to the Lessor herein shall be without deduction of any costs incurred by the Lessee unless agreed to in writing by the Lessor. e. (e) The Lessor is not liable for any taxes incurred by the Lessee and no tax deductions may be taken in computing the royalty.