EXAMPLE CLAY LEASE

THE STATE OF TEXAS 

COUNTY OF LOCATION

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THIS AGREEMENT, made and entered into this the ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ day of month,year , by and between Name of land owner(s), hereinafter called Lessors, and Name of land Lessee, hereinafter 

called Lessee, WITNESSETH: 

1. That the Lessors, for and in consideration of the sum of $2.00 per cubic yard in hand paid, the receipt of which is hereby acknowledged, have and by these presents do hereby grant, lease, and let exclusively unto the Lessee for and during the term hereinafter set out and subject to the conditions hereinafter stated, for the purpose of prospecting, exploring for, mining, operating, producing, storing and removing therefrom all shale, clays, bentonite, and claylike substances and volcanic ash (but not oil, gas, or sulphur), in and upon the following described property, together with the use of the surface thereof as may be necessary to produce, save, take care of, and mine all such shale, clays, and claylike substances, bentonite, and ash, (hereinafter referred to as clay), and also the right to erect, construct, install, locate, relocate, and maintain thereon such machinery, equipment, and to construct and make such roads, excavations, openings, ditches, drains and other improvements as are or may become necessary or convenient in the exploring for, mining, or removal of such clay, the following described real estate situated in County of Location, Texas, to-wit: 

(See field notes attached hereto as Exhibit "A") 2. TERM: The term of this lease shall be for a period of five 

Typically (5) years after this date and as long thereafter as clay shall be produced from said land in paying or commercial quantities; provided, however, that Lessee may terminate this lease at any time hereafter by executing and delivering to Lessors or by placing of record in the office of the County Clerk of County of Location, Texas, a recordable release and surrender of this lease and thereby surrender this lease and be relieved of all obligations hereunder, except such as have accrued prior to such surrender. While and so long as Lessee shall pay all of the minimum royalties hereinafter provided for in Paragraph 3 hereof, it will be considered that clay is being produced in paying quantities within the meaning of this paragraph, even if no mining operations are actually carried on, both during and after the primary term of this lease. 

3. ROYALTIES: (a) As royalties for all clay removed from the leased premises by Lessee, Lessee shall pay to Lessors the sum of $2.00 per cubic yard  of clay taken and removed from said land; and (b) Lessee agrees to pay to Lessors a minimum royalty annually of lease amount during each year while this contract shall remain in force, the first minimum royalty payment to be made on the date hereof and a similar payment on each anniversary date during the term hereof; PROVIDED, however, that if the Lessee shall release and surrender this lease at any time hereafter during the term of this lease, he shall have no further liability for payment of any further minimum royalty thereafter; and (c) Any and all payments of minimum advance or annual royalty shall be taken and deemed as payment in advance for clay that may be removed thereafter from said land at any time during this lease at the rate of $2.00 per cubic yard  of such clay so taken. In the event Lessee shall, at any time during this lease, take more clay than has been, by all previous minimum advance royalty payments paid for, then he shall pay Lessors at the rate of $2.00 per cubic yard  for all further clay taken. That is to say, such minimum advance royalty payments shall, in addition to extending the term of this lease for one year, be deemed as full payment in advance for clay rate of $2.00 per cubic yard  to be taken at any time after the date of such payment during the term of this lease that Lessee shall elect, and the aggregate amounts of such minimum advance royalty payments shall be credited against the first such clay taken and removed after the date of such payments, and after all such payments have been applied against clay taken, the Lessee shall pay for any further clay taken at the rate of $2.00 per cubic yard . Should Lessee at the termination of this lease, or the surrender hereof, have paid for more clay, by advance royalty payments, than he has taken during this lease, he shall be entitled to no refund or reimbursement of any kind, and (a) Lessee shall furnish to Lessors within 30 days after the end of each calendar month during which any clay may be removed from the 

leased premises a statement showing the number of yards of clay mined and removed during the previous month, the amount he had charged or credited against the advance royalty payments at $2.00 per cubic yard , and the amount of clay he still has paid for by said advance royalty payments or the amount of royalty, if any, due Lessors, Concurrently therewith, Lessee shall make payment to Lessors of the royalty, if any, then due to be paid by Lessee under the terms of this lease; and (e) All royalties, advance or otherwise, shall be paid or tendered to Lessors at Lease premises or as Lessors may from time to time designate in writing, by Lessee's check or draft mailed to Lessors at such address. 

4. DEVELOPMENT OF PREMISES: Lessee agrees that all operations 

Lessee on the leased premises shall be conducted in accordance with good exploration and mining practice and with due regard to the preservation of the leased premises. No exploration, development, or mining shall be made by Lessee on the leased premises within  ex: 150 ft of any building of Lessors located on said land without first obtaining the written consent of the Lessors. Lessee agrees to refill all holes and 

excavations made in exploring for clay deposits in areas where no commercial production is undertaken. 

5. LESSORS' USE OF PREMISES: Lessors reserve the right to pasture, cultivate, and till said land, except that such right shall be exercised in such a way as not to interfere with Lessee in the full and complete enjoyment of the rights granted Lessee herein. 

6. LESSEE'S USE OF PREMISES: Lessee shall be entitled, at his own expense, to erect, construct, install, relocate, and maintain on the leased premises such machinery and equipment as may be necessary or convenient in the conduct of Lessee's operations hereunder. A11 such machinery and equipment made or installed by Lessee shall remain the property of Lessee and shall be removable by Lessor at any time prior to thirty days after the expiration or other termination of this lease. 

DATES: Lessee agrees to install, at his own expense, a gate 

through each fence on Lessors' property through which Lessee must 

pass in order to arrive at the Leased premises, or on the Leased 

premises itself. Said gates shall become the property of Lessors at 

the expiration or other termination of this lease. 

8. CLAY PIT EXIT: Lessee agrees to slope the clay pit being 

mined in such a manner that there will be at least one exit which will 

permit a grown cow to walk out of said pit at all times. 

9. RECLAMATION: After ceasing mining operations on a given 

pit on the leased premises, Lessee agrees to restore said pit to the original contour and slope as nearly as is possible by filling the 

said pit with the overburden removed therefrom, and then leveling it. 

10. LESSEE TO KEEP RECORDS: Lessee covenants and agrees to keep true and accurate records showing the amount of clay mined and removed from the leased premises by Lessee, and such records shall be open to inspection by Lessors at all times which are reasonable. 

11. ASSIGNABILITY OF AGREEMENT: The rights of either party may be assigned in whole or in part and all of the provisions hereof shall bind and inure to the benefit of the respective heirs, executors, administrators, and assigns of either of the parties hereto; provided, however, that Lessee shall make no assignment without written approval from Lessors. No change in ownership of the land or any interest therein shall be binding on the Lessee until Lessee shall be furnished with a certified copy of all such recorded instruments, court proceedings, and other necessary evidence of any transfer, inheritance, or sale of said rights. 

12. DEFAULT BY LESSEE: The failure of Lessee to perform any obligation upon him in this lease imposed, including the failure to pay the advance royalty or furnish statements when due, shall not work as forfeiture or termination of this lease or cause a termination or reversion of the estate created hereby, nor be grounds for cancellation 

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hereof in whole or in part, unless and until Lessors shall notify 

Lessee in writing of the facts relied upon as constituting such breach 

or failure on the part of Lessee, and Lessee, if in default, shall not 

have, within 30 days after receipt of such notice. complied with the 

obligation on him imposed. 

13. LESSORS WARRANT TITLE: Lessors hereby warrant and agree 

to defend the title to the leased premises against every person whom 

soever lawfully claiming or to claim the same, or any part thereof, 

and to pay before delinquency any and all taxes or other encumbrances securing a monetary obligation affecting the land hereby leased. 

14. NOTICES: Any notice or other communication required or permitted to be given hereunder shall be given by certified mail addressed to Lessors or Lessee, as the case may be, at the following addresses or at such other address as the party in question may from time to time designate in writing: 

To Lessors at Location Premises. To Lessee at Lessee address, 

Any such notice or other communication mailed as aforesaid, shall be deemed to have been given by the deposit thereof in the United States mails addressed as above provided with postage sufficient to carry the same through the mails fully paid and certified. 

15. LESSEE'S OPTION: Lessors agree to give Lessee first option on leasing any of Lessors' other land situated in County of Location, Texas, should Lessors decide to lease said land for clay purposes. 

WITNESS OUR HANDS this  ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ day of month, year. 

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Name of Lessor(s)

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Name of Lessee

Example of an EXHIBIT "A" 

TRACT 1: Description of land with first owner

TRACT 2: Description of land with second owner

THE STATE OF TEXAS COUNTY OF LOCATION

BEFORE ME, the undersigned authority on this day personally appeared NAME OF LESSOR(S), and NAME OF LESSEE, known to me to be the persons whose names are subscribed to the foregoing instrument, and acknowledged to me that they executed the same for the purposes and consideration therein expressed. 

Given under my hand and seal of office this the  ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ ̲ day of month, year.

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NAME OF NOTARY PUBLIC