Common use of Mandatory Expenditures Clause in Contracts

Mandatory Expenditures. (a) Commencing with the first full calendar year after the Effective Date, for each Lease Year during the term of this Lease prior to commencement of Commercial Production, Tectonic must make the following mandatory minimum Expenditures, to be spent according to the Programs and Budgets adopted under SECTION 4.2: 2018 $400,000 2019 $600,000 2020 - 2023 $750,000 2024 - 2027 $1,500,000 2028 and each Lease Year thereafter $2,000,000 The obligation to make Expenditures for any Lease Year accrues on the first day of that Lease Year. Expenditures in excess of the minimum for any year may be carried forward and credited toward the minimum accruing for any subsequent year or years. Regardless of the carry-forward credit, commencing with the seventh Lease Year and prior to commencement of Commercial Production, Tectonic must expend at least $2,000,000 over every five-year period of this Lease, or at Tectonic’s election to keep this Lease in effect, satisfy any shortfall in expenditures during any such five-year period by payment in cash to ▇▇▇▇▇ of an amount equal to the shortfall; provided, further, that if Tectonic fails to spend the full amount, less any carry-forward credit, it must satisfy the commitment for that year by paying the shortfall in cash to ▇▇▇▇▇ by January 31st following the end of the applicable Lease Year. (b) No implied covenants or conditions whatsoever shall be read into this Lease relating to the prospecting, developing, or mining of the Premises or any other operations of Tectonic hereunder, including but not limited to the marketing or sale of Minerals, Mineral Products or Ores, or as to the time therefor or measure of diligence thereof, it being expressly agreed and understood that any operations conducted by Tectonic upon or relating to the Premises shall be conducted at such time and in such manner as Tectonic, in its sole discretion, deems advisable, subject only to the express provisions of this Lease.