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GRAVEL LEASE AGREEMENT <br />THIS GRAVEL LEASE AGREEMENT ("Lease") is made this 24~ day of <br />~1/ , 2002, by and between GERALD MUDGE AND MARY ANN <br />MUDG , 843 19 Road, Fmita, Colorado 81521 (referred to as "Lessor") and OLDCASTLE <br />SW GROUP, INC., DBA UNITED COMPANIES OF MESA COUNTY, a Colorado <br />corporation, 2273 River Road, Grand junction, Colorado 81505 ("Lessee"). <br />L GRANT OF LEASE <br />Lessor, in consideration of the agreements to be performed by Lessee and the ----' <br />payment of royalties by Lessee as provided in this Lease, and subject to the terms, <br />conditions, and provisions contained in this Lease, leases to Lessee that certain tract of land <br />situate in the County of Mesa, State of Colorado ("Leased Property"), more particularly <br />described on Exhibit A, attached hereto and incorporated herein by reference, for the purpose <br />of quarrying, mining, removing and marketing all sand, gravel, rock andlor dirt from the <br />Leased Property (referred to as "Material"), (all activity by Lessee on the Leased Property <br />collectively referred to as "Gravel Mining Operations"). <br />II. TERM OF LEASE <br />The term of this Lease shall commence on the first day after Lessee has acquired all <br />state and local licenses required to operate its Gravel Mining Operations ("Commencement <br />Date"); Lessee agrees to obtain all permits in as expeditious a manner as possible. The term <br />of this Lease shall be for a three (3) yeaz period, unless terminated sooner pursuant to the <br />provisions of this Lease. The first "Annual Anniversary Date" shall be one year after the <br />Commencement Date provided above. There shall be a one (1) year renewal option, which is <br />to be exercised by Lessee serving upon Lessor, no later than ninety (90) days prior to the end <br />of the initial three (3) year term, a written notice of Lessee's intention to renew the Lease for <br />an additional one (1) year period. <br />III. ROYALTIES <br />Lessee shall pay to Lessor, as royalty, the sum of fifty cents ($0.50) for each ton of <br />sand and gravel removed from the Leased Property and fifty cents ($0.50) for each ton of <br />overburden of dirt removed from the Leased Property. The quantity will be determined by <br />removing the material from the Leased Property and scaled on certified scales at Lessee's <br />facility located at 2273 River Road. <br />Lessee hereby advances Lessor Twenty Thousand Dollars ($20,000.00) in <br />consideration of this Lease, receipt of which is hereby acknowledged by Lessor. In the event <br />Lessee does not commence the term of this Lease pursuant to Section II above, Lessor agrees <br />to repay the Twenty Thousand Dollar advance to Lessee within three (3) yeazs in equal <br />monthly principal and interest payments of $625.53 per month with interest accruing from <br />