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<br />SAND AND GRAVEL LEASE ,A?t?LiDR.?J <br />(Surface) <br />k-E g IT- <br />LESSOR: SMITH RANCHO, LLC <br />ADDRESS: P. O. Box 215, Craig, CO 81626 <br />PHONE #: (970) 824-2631 or (970) 824-6100 <br />S.S.#: 84-0781351 <br />LESSEE: THE BOARD OF MOFFAT COUNTY COMMISSIONERS <br />ADDRESS:. c/o Moffat County Road Department, P. 0. Box 667, Craig, CO 81626 <br />PHONE #: (970) 824-3211 <br />S.S.#: 84-6000785 <br />PROPERTY: SEE EXHIBIT' "A" ATTACHED HERETO <br />DATE: December 10, 2008 <br />RECITALS <br />A. Lessor owns the Property. <br />B. Lessee wishes to enter the Property for the purpose of extracting sand and gravel. <br />C. Lessor and Lessee have agreed to a price for the right to enter the Property for the <br />purpose of extracting sand and gravel, as well as a royalty for sand and gravel <br />removed from the Property. <br />NOW THEREFORE, for a good and valuable consideration the parties agree as follows: <br />1. GRANT & TITLE Lessor grants to Lessee the right to enter upon the Property to mine, use, <br />sell or remove sand and gravel (herein, "mining'). This grant includes the right of entrance with trucks <br />and crusher plants and other necessary equipment, and the right to leave such equipment on the Property <br />during mining, stockpile reduction and reclamation. Lessor further warrants to Lessee that Lessor has <br />good title to the Property and has full authority to grant Lessee, this lease. Lessor agrees to indemnify <br />Lessee against any claim that Lessor does not have good title or the right to enter this lease. <br />The rights granted hereunder shall be exclusive in the sense that the Lessor will not grant to anyone <br />else the privilege of removing sand and gravel from the Property during the period hereof or until <br />reclamation is completed. Lessor reserves the right at any time during the term hereof to go on and use the <br />Property for any purpose whatsoever, but without unreasonable interference with the right of the Lessee. <br />2. TERM This Lease shall extend for a period of five (5) years from the 10th day of <br />December 2008 to the 9th day of December 2013. <br />Lessee shall have the absolute right to renew this Lease for an additional term of five (5) years, <br />subject only to a renegotiation of the rent and royalty set forth in Paragraph 3 .below. <br />To exercise this right to renew, Lessee shall serve Lessor at the above-stated address with written <br />notice of its intent to renew not less than ninety (90) days prior to the expiration hereof, whereupon the <br />parties shall endeavor in good faith to agree to a new rent and royalty to be applicable during the extended <br />term hereof. Each party shall be deemed to be negotiating in good faith if the price being negotiated is <br />related to a current bona fide offer to lease received by Lessor from a third party or to other objective <br />indicators in the market place. Upon agreement to a new rent and royalty, the parties will execute a written <br />agreement. <br />If the parties have not agreed to a new rent and royalty by the expiration hereof, this Lease shall <br />expire subject to Lessee's right in Paragraph 6 hereof. <br />3. RENT AND ROYALTY Lessee shall pay Lessor the sum of FIVE HUNDRED and <br />N01100 Dollars ($500.00) per year in advance (herein, "Annual Rental") during the primary term hereof <br />and during any extended time that Lessee is in possession for reclamation as provided in Paragraph 6 <br />below, which shall be full compensation for use of and damage to the Property. Additionally, Lessee will <br />pay Lessor a royalty and or surface damage equal to eighty cents ($.80) per cubic yard for sand and gravel <br />mined and removed from the Property. Payment is to be made on quantities as measured by a Licensed <br />Surveyor employed by Lessee for crushed gravel or by load count for other materials.