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This Gravel Lease Agreement ( "Lease ") is made this 25th day of March, 2014, by and between Happy
<br />Creek Inc, aNevada corporation, 2955 County Rd 30, Stratton, CO 80836, ('Lessor") and McCormick Excavation
<br />& Paving, LLC, 30887 Highway 24, Stratton, CO 80836 ("Tenant ").
<br />1. GR.41+7T OF LEASE.
<br />deration of the
<br />1.1 Lessor, in consi agreements to be performed by Tenant and the payment of
<br />royalties by Tenant as provided in this Lease, and subject to the terms and conditions in this Lease, leases to
<br />Tenant that certain tract of land situate in Kit Carson County, Colorado ( "Premises "), described as SE/4
<br />Section 33 and SW /4 Section 34, Township 11 South, Range 46 West of the 6th P.M., for the sole purpose of
<br />quarrying, mining, removing and marketing sand, gravel, and rock from the Premises (referred to as
<br />"Material "), and the operation of a crushing plant and a sorter /separator facility (all such activity by Tenant on
<br />the Premises is collectively referred to as ('Gravel Mining Operations"). Tenant accepts the Premises in its
<br />present condition.
<br />1.2 Tenant has acquired all state and local permits/licenses required to operate its Gravel Mining
<br />Operations.
<br />1.3 Tenant will not assign this Lease, sublease the Premises or convey any interest in this Lease to
<br />any third party except as permitted under the terms of Section 12; and Lessor will not lease the Premises to any
<br />third parry_ Tenant has the sole right to sell material from the Premises. If Lessor sells any material, it will be a
<br />violation of the mining permit. Lessor will be allowed to remove in-place pit run material for its use without
<br />compensation to Tenant, however, if Lessor desires to obtain for its use Material that has been processed and
<br />stock piled by Tenant, Lessor must compensate Tenant at an agreed price.
<br />2 TERM OF LEASE. The term of this Lease shall commence on March 25, 2014 and will expire at the end of
<br />the day on March 24, 2017, unless terminated sooner pursuant to the provisions of this Lease. There shall be a
<br />one year renewal option, which is to be exercised by Tenant serving upon Lessor, no later than ninety (90) days
<br />prior to the end of the initial three year term, a written notice of Tenant's intention to renew the Lease for an
<br />additional one year period. The parties will negotiate in good faith during the initial 60 days of that 90 day time
<br />period and will attempt to reach an agreement as to the renewal terms. The renewal option will be effective only
<br />if the parties are able to reach such an agreement in writing by the and of that initial 60 days.
<br />3. ROYALTIES,
<br />3.3 Tenant shall pay to Lessor, as royalty, the sum of sixty cents ($0.60) for each ton of sand and
<br />pit run removed from the Premises and sixty cents ($0.60) for each tan of rock and gravel removed from the
<br />Premises. The tonnage of Material shall be determined by certified scales at the Tenant's Stratton plant site
<br />location, and the original load tickets will be maintained by Tenant as part of its files. Tenant agrees to pay
<br />Lessor the royalty on a quarterly basis no later than the 151h day of the month following the end of a calendar
<br />quarter, with the initial payment due July 15, 2014, for the time period from the beginning of this Lease through
<br />June 2014.
<br />3.2 Tenant shall forward to Lessor quarterly reports showing the tonnage of Material removed
<br />from the Premises during the preceding quarter according to numbered load tickets, with the date of loading.
<br />The reports shall be forwarded to Lessor by the fifteentYr(15th) day of the following month, whether Material
<br />is removed or not.
<br />3.3 Tenant agrees to keep a complete and accurate record of all Material removed from the
<br />Premises and all sales thereof Lessor shall have the right, at reasonable times, of examining the musing
<br />procedures and checking the books and records of Tenant for the purpose of verifying the amount of royalties
<br />paid or payable.
<br />3.4 In November of each year in which this Lease is effective, the royalty rate to be paid for
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