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<br /> SAND AND GRAVEL LEASE
<br /> THIS LEASE, is entered into and is effective as of January 1, 2011 between JRT Limited
<br /> Partnership and Terry Grazing Association, P.O. Box 3170, Cheyenne, WY 82003, (jointly
<br /> referred to as the "Lessor"), and Connell Resources, Inc. or assigns ("Lessee").
<br /> In consideration of the mutual covenants contained in this Lease, and for other valuable
<br /> consideration, the receipt and sufficiency of which is acknowledged, the parties agree as follows:
<br /> 1. Leased Propaty. Lessor, Terry Grazing Association, is the owner of real property
<br /> (the "Property") and Lessor, JRT Limited Partnership is the owner of the Material located on that
<br /> propertly situated in the County of Weld and State of Colorado and more specifically described
<br /> as:
<br /> a. The currently-operating Carr/Tucker Pit, including all of Section 17,
<br /> Township 11, Range 67, except I acre in SW4SW4, and the N2NE4 in Section
<br /> 20, Township 11, Range 67, Quarter Section I, AND
<br /> b. additional real property which is being added to the Carr/Tucker Pit, including
<br /> all of Section 21, Township 11, Range 67, and the SW4&S2SE4 in Section 22,
<br /> Township 11 , Range 67 (25RR).
<br /> Lessor, in consideration of the royalties herein reserved and the covenants to be performed by the
<br /> Lessee, does hereby lease, let, and demise unto the Lessee for the purposes of mining and
<br /> processing sand, gravel, rock, overburden (fill dirt), and related materials (collectively referred to
<br /> as "Material") from the Property, stockpiling and storing Material on the Property, and for
<br /> conducting any and all related activities including, but not limited to, testing, drilling, surveying
<br /> and inspecting the Property; constructing, operating, using, dismantling and removing an asphalt
<br /> plant on the Property; constructing, operating, using, dismantling, and removing a concrete batch
<br /> plant on the Property; and constructing, using and operating any other improvements, processing
<br /> plants, scales, sales offices, facilities other improvements, machinery and equipment in connection
<br /> with Lessee's operation on the Property. Lessee shall also have the right to import and store on
<br /> the Property sand, gravel, and similar materials for resale from the Property. All Material
<br /> extracted from the Property by the Lessee (including any stockpiled, processed Material located
<br /> on the Property) shall, subject to the payment of Royalty amount herein stated, be considered the
<br /> sole property of Lessee.
<br /> 2. Term of Lease. Unless earlier terminated under Section 8 below, this Lease shall be
<br /> in effect as of the date set forth in the introductory paragraph and shall continue until January 1,
<br /> 2016. Lessee shall also have the option to extend the lease for an additional 5 years on the same
<br /> terms.
<br /> 3. Royalties and Minimum Tonnage Requirement.
<br /> 3.1 Royalty Amounts. Lessee shall pay Lessor JRT Limited Partnership a royalty of-
<br /> (i) $1.00 per ton for all sand and gravel Material and (ii) $.50 per ton for all overburden (fill
<br />
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