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<br />SAND AND GRAVEL MINING LEASE LI
<br />A LEASE made and entered into this ~~~ day of S'QP~tM b2~
<br />19 ~L by and between RUBY B. MACKENZIE, ANN MACKENZIE EMMERSON and JEAN
<br />MACKENZIE COLON, d/b/a FOUR MILE RANCH, whose address is 202 MacKenzie,
<br />Canon City, Colorado 81212 (herein the Lessor), and R.E. MONKS CONSTRUCTION
<br />COMPANY, a Colorado corporation, whose address is P.O. Box 25579, Colorado
<br />Springs, Colorado 80936 (herein the Lessee).
<br />LESSOR, in consideration of the payment of the sum of Five Dollars and
<br />the agreements set forth herein to be kept and performed by Lessee,
<br />including the payment of royalties by the Lessee as provided herein, and
<br />subject to the terms, conditions, and provisions contained herein, Lessor
<br />leases to the Lessee that a certain tract of Land situate in Fremont
<br />County, State of Colorado, which is described in Exhibit "A" attached
<br />hereto and made a part hereof (hereinafter referred to as the Property) for
<br />the purpose of quarrying, mining, removing, and marketing therefrom all
<br />sand, gravel, rock and overburden, (hereinafter referred to ae the
<br />material, but not including other minerals or topsoil). Lessee shall also
<br />have the right to use the Property for scale houses, sales offices,
<br />crushing and screening plants, storage of related equipment and to use
<br />oexistinq roads on the Property as well as to build such additional roads as
<br />~~may be•nedessary for the conduct of its operations.
<br />1. Term of Lease. Thie lease shall be in effect for a period of ten
<br />years from the date hereof, or until it becomes economically unfeasible to
<br />continue send and gravel mining operations, whichever first occurs.
<br />Determination of "Economically Unfeasible" shall be at Lessees sole
<br />discretion and upon written notice thereof, Lessee shall hale no further
<br />liability hereunder. Lessee shall also have the right and option to renew
<br />this lease for one additional tdrm of ten years at the expiration hereof,
<br />and in the event it shall desire to renew this lease is shall give Lessor
<br />written notice of its intention to do so at least six months prior to the
<br />expiration of the original term.
<br />2. Royalties. Lessee shall pay Lessor a royalty of ~ per
<br />ton for all material removed from the Property during the term of the
<br />lease. Lessee shall not be required to pay for, nor pay a royalty based
<br />on, material used by Lessee in constructing, maintaining or repairing
<br />roadways on the Property.
<br />Tonnage of material removed from the Property on which royalty is due
<br />will be calculated by the scale method. Lessee shall maintain and accurate
<br />scale (or scales) over which all material removed from the Property shall
<br />be weighed, and keep accurate records of all weights of such material,
<br />including weights of trucks or other vehicles transporting the material,
<br />which shall be available for inspection by Lessor at all reasonable times.
<br />Lessee agrees to keep a strict and accurate record of all material
<br />removed from the leased premises and all sales thereof, and Lessor shall
<br />have the privilege at reasonable times of examining the mining procedures
<br />and checking the books and records of Lessee for the purpose of verifying
<br />the royalty payable. Lessee shall forward to lessor monthly reports
<br />showing the quantity of material removed during the preceding montri,
<br />according to load tickets, with dates of loading. Such reports shall be
<br />forwarded to Lessor by the fifteenth day of the month following the month
<br />in which material is removed. It is understood that during certain months
<br />oP the year it may. be impracticable to remove material because of weather
<br />conditions, and no report shall be required for any month during which no
<br />material has been removed.
<br />The minimum annual royalty payable by the Lessee for material removed
<br />during each year this lease is in effect shall be the sum of ~
<br />which shall be payable in advance on each anniversary dated of this lease
<br />end entitle the Lessee to remove 100,000 tons of material during the
<br />ensuing year. If the amount of material removed during any years shall
<br />exceed 100,000 tons, the Lessee shall pay royalty on the tonnage in excess
<br />of 100,000 tone, and such royalties shall be payable on the fifteenth day
<br />of the month
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