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SOURCE OF LEGAL RIGHT-TO-ENTER/INDEMNITY
<br />This Agreement is made and entered into, effective as of the 2nd day of July, 2008 ("Effective Date") by and between
<br />John Gilleland Manager for Gilleland Family Limited Partnership (GFLP), whose address is 514 CR 509, Ignacio CO
<br />81137, and is the owner of parcel # 5669-102-00-007, and for Gilleland Enterprises LLC (GELLC , whose address is
<br />27661 Hwy 160, Durango CO 81301, and is the owner of parcels #5669-102-00-015. #5669-102-00-016 and # 5669-
<br />102-00-024, ("Landowners"), and, Perry Neil, Operations Manager, C&J Gravel Products, Inc. ("Operator').
<br />RECITALS
<br />A. Colorado Revised Statutes 34-32.5.115 (4) states, in part: "The [Mined Land Reclamation) board or office shall not
<br />deny a permit except on one or more of the following grounds:..,
<br />(e) The mining operation will adversely affect the stability of any significant, valuable, and permanent manmade
<br />structures located within two hundred feet of the affected land; except that the permit shall not be denied on this basis
<br />where there is an agreement between the operator and the persons having an interest in the structure that damage to
<br />the structure is to be compensated for by the operator or, where such an agreement cannot be reached, the applicant
<br />provides an appropriate engineering evaluation that demonstrates that such structures shall not be damaged by
<br />proposed construction materials excavation operations.
<br />B. Landowner owns the minerals leases and rights and surface estate or otherwise controls the surface rights in and to
<br />the parcels of property described above ("Property").
<br />C. Operator has and will amend as necessary a county approval and state reclamation permit M-1980-146, and will
<br />conduct mineral extraction and related activities ("Operations") on the Property.
<br />D. Landowner owns or operates potentially significant, valuable, and permanent manmade structures ("Structures")
<br />located in or adjacent to Property which have some potential for the stability adversely affected by the Operator's
<br />Operations.
<br />E. Operator and Landowner desire to stipulate and agree on the Operator's right to conduct Operations within the
<br />Property, including access to SH-160, to be included within the permit boundaries of the state reclamation permit as
<br />required by applicable Colorado Revised Statute and La Plata County Ordinances and Land Use Plans.
<br />F. Operator and Landowner desire to stipulate and agree on the compensation and damages to be paid for such
<br />potential adverse affect on stability of the Structures, should it occur during the period of said Operations.
<br />AGREEMENT
<br />In consideration of the foregoing recitals and the terms, covenants and conditions contained herein,
<br />Landowner and Operator agree as follows:
<br />1. Right-of-Way. Landowner grants to Operator, and all of its parent, subsidiary, or other affiliated companies, their
<br />agents, employees, and others authorized by them, a private right of way upon and across the Property and lands
<br />adjacent to Property as Operator may reasonably require for roads and associated facilities, related to its Operations
<br />("Right-of-Way"). Landowner warrants that it is the owner of the Property and has the legal right to grant the Right-of-
<br />Way described herein and that Operator shall have the quiet use and enjoyment of the Right-of-Way in accordance
<br />with the terms and conditions of this Agreement.
<br />2. Right to Mine. Landowner grants to Operator, the legal right to conduct Operations on the property; to mine the
<br />property for sand, gravel, and borrow materials and to conduct other activities related to that mining.
<br />3. Operator agrees to indemnify and hold harmless Landowner from any and all claims, demands, causes of action and
<br />damages ("Claims") related to Operator's Operations.
<br />EXECUTED as of the date of acknowledgement, but this Agreement is effective as of the first date mentioned above.
<br />`--Jahn Gilleland, Ntanager, for Owners
<br />n ? n
<br />Perry Neil, gperat61ns Manager, C&J Gravel Products, Inc
<br />State of Colorado )
<br />County of La Plata )ss
<br />The foregoing instrument was acknowledged before me this _ day of Octobe 2009, by the above persons, John
<br />Gilleland and Perry Neil.
<br />[SEAL]
<br />My commission expires: 10 JUN 2012 Beth McLaughli , Notary Public
<br />BETH MCLAUGHLIN
<br />Notary Public
<br />State of Colorado
<br />I VIM W---
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