2009-08-25_PERMIT FILE - M2009070

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WITHERBEE PIT LEASE AGREEMENT THIS LEASE AGREEMENT is made and entered into this 16`h day of July , 2009 by and among, Sandhill Resources, LLC whose address is 54500 County Road 00 Wray Colorado 80758 , hereinafter collectively called LESSOR, and PUMA COUNTY, COLORADO, whose address is 310 Ash, Suite A, Wray, Colorado 80758, hereinafter called LESSEE. THE INITIAL TERM OF THIS LEASE shall be for a period of ten (10) years, commencing on July 1 , 2009 and ending July 1 , 2019 . After the original term of this lease as set forth above, this lease shall renew itself from year to year unless either party notifies the other in writing on or before the 1st day of November in the year prior to which expiration of this lease is desired. WITNESSETH: That the LESSOR has this day leased to the LESSEE a portion of the following described property, as specified in a permit issued by the State of Colorado Mined Land Reclamation Board, situated in the County of Yuma, State of Colorado: Township 5 North Range 43 West of the 6"' P.M. Part of the NI/2 of the NE 1 /4 Section 25 TERMS SPECIFIC TO LESSEE: (a) LESSEE shall be responsible for periodic reclamation of the mined area located on the subject property, as shown in Exhibit A attached, pursuant to the requirements of the permit issued by the State of Colorado Mined Land Reclamation Board. (b) LESSEE will hold the permit issued by the Colorado Division of Reclamation, Mining, and Safety and shall be responsible for keeping the permit valid. (c) LESSEE may not sublease the subject property without the prior written approval of LESSOR. This provision shall not limit the right of ingress and egress necessary for LESSEE or its customers to mine and transport material from the property. In the event LESSEE subleases or subcontracts with any other party for any activity under the Lease, LESSEE shall obligate the subcontractor to indemnify, protect and defend LESSOR for any and all costs and/or claims against LESSOR that may arise out of subcontractor's activities under the contract. Any sublessee or subcontractor shall be required to show proof of liability insurance covering bodily injury to third parties and/or their property in limits of no less than One Million Dollars ($1,000,000) any one claim and aggregate any annual policy period prior to commencing any activity on the property. Further, sublessee or subcontractor's insurance shall include LESSOR as an Additional Insured for any claims arising out of activities related hereto. Sublessee or subcontractors shall be required to promptly notify LESSOR of any events that may give rise to a claim for any activities hereunder. (d) LESSEE will keep records of material removed from the site and shall provide to LESSOR a quarterly report of material removed (e) LESSEE will pay LESSOR $0.45/yard or the current rate, whichever is greater, subject to annual review and determined by the Yuma County Commissioners. (f) LESSEE shall be responsible for safety and security of the site and shall install appropriate signage, cattle guards, and gates with locks at the access road as long as the property is under lease to Yuma County; and LESSEE further agrees to maintain the surface of the right-of-way in a reasonable fashion to protect the adjoining property. This road will be graded and left for landowner access when reclamation is completed. (g) LESSEE shall ensure that at all times LESSEE and its subcontractors are in compliance with any applicable law relevant to the Lease and/or any activities thereunder. (h) LESSEE shall indemnify, protect and defend LESSOR for any and all costs and any claims that may arise out of this Lease and LESSEE'S operations hereunder, except as otherwise specified herein. LESSEE shall promptly notify LESSOR of any claims or any incidents that could give rise to a claim involving any third parties.