2011-12-12_REVISION - M2003058 (3)

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GRAVEL MINING LEASE This GRAVEL MINING LEASE is made this 1 ( 1 1-1A day of May, 2009, 'by and between FAIRBANKS DAILY NEWS - MINER, INC., (hereinafter referred to as "Lessor "), and GLENN E. SESSIONS & SONS, INC., (hereinafter referred to as "Lessee "). Lessor agrees to lease to Lessee a tract of Land in Jackson County, Colorado, described in Exhibit "A ", (hereinafter referred to as "Premises "), for the sole purpose of mining, extracting, crushing, processing and marketing sand, gravel and rock (hereinafter referred to as "Materials "). Lessor warrants that it has legal title to the surface of such real property as well as to the Materials situated in and under the real property described in Exhibit "A ". 1. USE OF PREMISES. Lessee shall have the right to erect on the Premises a crusher and equipment directly related to and necessary for processing and removing Materials mined from the Premises. Lessee shall have only those rights and privileges directly related to the mining and removal of Materials from the Premises and shall have no authority regarding the use or other rights associated with the Premises. Lessor reserves the right to remove from the Premises pit run gravel mined by Lessee without cost for use on Lessor's own property. Lessor may purchase from Lessee, at a cost of per yard, crushed gravel for use on Lessor's property only. Lessee need not pay royalty on pit run or crushed gravel removed from the Premises by Lessor for use on Lessor's own property. 2. TERM OF LEASE. The term of this Lease shall be five (5) years and shall commence on May 1, 2009 and shall expire on May 1, 2014. Lessee is granted the option to extend the term of this Lease for an additional five (5) years by notifying Lessor in writing 30 days prior to the expiration of the original Lease. The gravel mining operations may continue uninterrupted during which time terms of the Lease extension, including ro "yalty rates, shall be negotiated and mutually agreed upon by both Lessor and Lessee. If an agreement between both parties is not reached within sixty . (60) days after the expiration of the original Lease, the extended term to the Lease shall`be null and void. Lessee shall have the right to terminate the Lease at any time in the event that the Materials underlying the Premises are no longer economically mineable. 3. ROYALTIES. Except as provided in Paragraph 1, Lessee shall pay to the Lessor, as royalty for the term of this Lease $for each cubic yard of Materials removed from the Premises. All royalties shall be determined by volume of Materials loaded and removed from Premises. Lessee shall keep all records of the volume of Materials removed. Royalties and documentation of the calculation of the royalties shall be paid and given to Lessor by the anniversary (May 1) of each Lease year. 4. PAYMENT OF TAXES. Lessor shall pay all property taxes assessed on the Premises before they become delinquent. In the event property taxes are increased during the term of this Lease, and are attributable to sand and gravel mining on the Premises, Lessee .shall be responsible for and pay the increase in property tax. Should either party fail to pay such taxes, then the other party may, at_its discretion, pay said taxes and Lessor or Lessee (as the case may be) agrees to reimburse any costs, interest or penalties. Lessee shall be responsible for and pay any severance taxes due for any Materials mined by Lessee on the Premises. 5. PERMITS. Lessee agrees to obtain all necessary permits required by the Colorado Mined Reclamation Act and reclaim and restore the Premises in reasonable time (not to exceed 180 days) as required by the Act following termination of mining activities. Any other permits required by Jackson County for gravel mining activities, should there be any, will be the responsibility of the Lessee.