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GRAVEL LEASE AGREEMENT <br />h <br />This Agreement is made this O day of 2 <br />Y 007, by and between <br />Sam F. Love, and Virginia L. Love. P.O. Box B, Meeker, C 81641, hereinafter referred to as <br />"Lessor ", and Western Gravel, LLC, a Colorado Limited Liability Company, P.O. Box 1231, <br />Meeker, CO 81641, hereinafter referred to as "Lessee ". <br />Lessor, in consideration of the Agreements set forth herein to be kept and performed by <br />Lessee, and the payment of royalties by Lessee as provided herein, and subject to the terms, <br />conditions, and provisions contained herein, leases exclusively to Lessee that certain tract of land <br />situate in the County of Rio Blanco, State of Colorado, more particularly described on Exhibit A, <br />attached hereto and incorporated herein by reference, for the sole purpose of quarrying <br />"materials'. , mining, <br />removing and marketing therefrom gravel, rock, dirt and/or pit run which are herein referred to as <br />1. TERM OF LEASE <br />1.1- This Lease shall be in effect for a term commencing on the 3`d day of January, 2008, <br />and continuing until January 2, 2028 or until all economically recoverable materials are <br />exhausted, whichever event occurs first. <br />1.2 - Upon execution of this Agreement, Lessee shall pay to Lessor the sum of $25,000 as <br />a non refundable payment which shall not be considered royalty payment or offset by Lessee's <br />royalty payments pursuant to paragraph 2.1. In the event any portion of this payment is <br />determined to be owed by Lessor to Neal J. Dow and Anna Dow Trustees, Lessor shall make any <br />required payment to the Dows and hold Lessee harmless from any obligation to pay a portion of <br />the ;25,000 to the Dows. <br />2. ROYALTIES <br />2.1- Lessee shall pay to Lessor, as royalty, the sum of $1.00 for each ton of materials <br />removed from the !eased premises during the first three years of this Lease. Beginning the fourth <br />year of this Agreement the royalty amount shall be increased to S 1.33 per ton. Thereafter, every <br />three years the royalty amount shall be adjusted based upon the wholesale market price for pit run <br />at the pit on the effective daze of this Agreement, which is agreed to be $8.00 per ton, compared <br />to the wholesale market price for pit run at the pit on the adjustment date. The adjusted royalty <br />shall be calculated as follows: the wholesale market price for pit run as of the adjustment date is <br />divided by $8.00 multiplied by $1.00. The wholesale market price shall be determined by <br />averaging the price of pit run at the pit for all dealers within a radius of thirty miles of Meeker, <br />Colorado. The quantity of material shall be determined by scale weight at the pit, weighed before <br />materials are hauled away from the leased premises. Lessee will provide Lessor with quarterly <br />reports on or before the 10' day of the month following the end of the quarter, which will include <br />copies of all weigh scale tickets verifying the total amount of material removed from the pit <br />during the preceding quarter. <br />PILL E;VE -D <br />JAN 2 9 2015 <br />Division of Declamation, <br />Mining & Safety <br />