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GRAVEL LEASE AGREEMENT <br />r Fk <br />THIS LEASE AGREEMENT is made and entered into the day of 2009, <br />and, effective October 1, 2009, by and between Lazy V S Family Limited Partnership, 58788 <br />Falcon Rd_, Olathe, CO 81425 ("Lessor") and the hoard of County Commissioners of <br />Montrose County for the County of Montrose, State of Colorado, a body corporate and <br />politic, ("Lessee" or "County"), 161 South Townsend Avenue, Montrose, Colorado, collectively <br />;'Parties", and provides as follows: <br />\VHl-`RI-`AS, Lessor is the owner of certain real property located at-" 1225 Cimarron Road, <br />Montrose County, Colorado, and more specifically described on Exhibit A, attached hereto and <br />incorporated herein by this reference ("Premises"); and <br />WHEREAS, County desires to lease the Premises from Lessor for the purpose of the removal <br />and crushing of gravel to be used for maintenance of public County Roads, and Lessor desires to <br />lease the Premises to County for said purpose pursuant to this Lease Agreement; <br />NOW THEREFORE, in consideration of the covenants and promises contained herein, Lessor <br />agrees to lease to County and County agrees to lease from Lessor, the Premises on the following <br />terms and conditions: <br />1_ USE OF PREMISES. County shall have the right of ingress and egress to and from the <br />Premises, and the exclusive right to occupy and use the Premises. County's use of the Premises <br />shall be for the specific purposes of mining. removing, crushing, and storing gravel. County <br />shall have the sole responsibility to obtain all applicable permits or other governmental approvals <br />necessary, if any, for such use of the Premises. Lessor agrees to cooperate with County in its <br />efforts to obtain such permits or approvals. County's obligation to make any lease payments <br />required herein is expressly contingent upon County obtaining such permits or approvals, <br />provided County makes a good faith effort to obtain said permits or approvals. <br />1 RENT AND ROYALTY. The lease payments required pursuant to this Lease Agreement <br />shall be in the form of an annual lease fee plus royalty ("Royalty') payable as follows: <br />a. $1,000 per year flat fee; and <br />b. 50.75 per ton of gravel mined from the Premises and crushed during the year; and <br />c. $ 1,00 per cubic yard of pit run removed from the Premises during the year. <br />All lease payments for the term of this lease are subject to Paragraph 10, below. <br />The Royalty shall be payable to Lessor twice annually during the term of this Lease Agreement, <br />under normal accounts payable process as near the I" of July and 31st of December as possible. <br />Royalty rates may be reviewed in 2011, 2014, and 2017 and adjusted for inflation and/or market <br />conditions. New rates will become effective January 1 of the year following review. <br />I