WATER SERVICE AGREEMENT
for the
SKY RANCH PUD
THIS AGREEMENT is entered into this ______ day of October, 2003 by and
between AIRPARK METROPOLITAN DISTRICT, a quasi-municipal corporation and
political subdivision of the State of Colorado ("AMD"); ICON INVESTORS I, LLC, a
Colorado limited liability company ("DEVELOPER"); PURE CYCLE CORPORATION, a
Delaware corporation ("PURECYCLE"); and RANGEVIEW METROPOLITAN DISTRICT, a
quasi-municipal corporation and political subdivision of the State of Colorado,
acting by and through its Water Activity Enterprise ("RANGEVIEW").
RECITALS
WHEREAS, urban density development in general accordance with the
"Preliminary Development Plan" (Arapahoe County Case No. Z01-010) is proposed
for the Sky Ranch PUD ("Property"). The Property occupies about 772.3 acres
generally located south of Interstate-70 frontage road, north of Alameda Avenue,
west of Hayesmont Road, and east of Powhaton Road in unincorporated Arapahoe
County Colorado; as more specifically described in Exhibit A attached hereto.
WHEREAS, the Property can be so developed only if adequate and sufficient
domestic water service is provided thereto.
WHEREAS, the Property lies within the boundaries of AMD and one of the
services of AMD is to provide domestic water service.
WHEREAS, in order to efficiently provide water service to the Property,
AMD and DEVELOPER desire to enter into an agreement with RANGEVIEW and PURECYCLE
to finance, acquire, design, construct, operate and maintain certain water
facilities to serve the Property, under the terms set forth below.
WHEREAS, subject to the terms and conditions of the "Amended and Restated
Lease Agreement" ("Lease") dated April 4, 1996 between the State of Colorado
Board of Land Commissioners ("Land Board") and RANGEVIEW and the Agreement for
Sale of Export Water ("Export Water Agreement") dated April 11, 1996 between
PURECYCLE and RANGEVIEW, the Land Board conveyed to RANGEVIEW, which
subsequently conveyed to PURECYCLE, certain rights to surface water and
groundwater on and beneath the Land Board's property known as the Lowry Range,
which water rights are more specifically outlined in Section 6.1 of the Lease.
WHEREAS, PURECYCLE serves as the service provider for RANGEVIEW.
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WHEREAS, pursuant to Section 8.3 of the Lease, RANGEVIEW and PURECYCLE have
the right to provide a water delivery system for use by customers both on and
off the Lowry Range, which system shall be developed pursuant to a unified
master plan.
WHEREAS, facilities developed for use by customers off the Lowry Range
shall be integrated with facilities developed for use by customers within the
Lowry Range.
WHEREAS, subject to the terms and conditions of an Option Agreement for
Export Water Service anticipated to be entered into between PURECYCLE and the
DEVELOPER attached hereto as Exhibit F, PURECYCLE desires to reserve certain
Export Water Rights sufficient to provide water service to the Property at the
development densities anticipated for the Property.
WHEREAS, PURECYCLE and RANGEVIEW are capable of providing domestic water
service to the Property subject to the terms and conditions of the Lease.
WHEREAS, in order to induce RANGEVIEW and PURECYCLE to cause the Water
Facilities to be constructed on a schedule which will accommodate anticipated
development of the Property, AMD and DEVELOPER desire to participate with
RANGEVIEW and PURECYCLE as provided herein with financing and otherwise
promoting the construction of such Water Facilities.
WHEREAS, to make water service available, RANGEVIEW and PURECYCLE are
relying in part upon AMD's and DEVELOPER's timely payment of certain fees and
charges and also on their timely execution of other obligations, all as
identified in this Agreement.
WHEREAS, the Water Facilities will benefit and enhance the value of the
Property.
WHEREAS, the execution of this Agreement will serve a public purpose and
promote the health, safety, prosperity and general welfare by providing for the
planned and orderly provision of domestic water service.
WHEREAS, AMD intends to provide a wastewater treatment plant to serve the
development of the Property.
WHEREAS, AMD will provide wastewater treatment services to RANGEVIEW and
PURECYCLE as well as allowing RANGEVIEW and PURECYCLE to use the wastewater
effluent from the wastewater treatment plant for irrigation purposes.
NOW THEREFORE, in consideration of the above recitals, the mutual promises
and covenants herein contained, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereby
agree as follows:
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ARTICLE 1
DEFINITIONS AND INTERPRETATIONS
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1.01 Definitions. As used herein unless the context indicates otherwise, the
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words defined below and capitalized throughout the text of this Agreement shall
have the respective meanings set forth below:
(a) Agreement: This Water Service Agreement and any amendments hereto
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made in accordance herewith.
(b) AMD: Airpark Metropolitan District, a party to this Agreement, and
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its employees, agents, officers, directors, successors and assigns.
(c) Corporation Stop: The valve which connects to a water main by its
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upstream connection and to the Customer's water service pipeline by its
downstream connection.
(d) Customer: Customer shall refer to an end user of water from
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PURECYCLE's Water Facilities whose property and place of use are located
within the Property.
(e) Dedicated Groundwater: 443 acre-feet per year of water from the
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Arapahoe and Laramie-Fox Hills aquifers underlying the Property as decreed
in Case No. 85CW157 in the Water Court for Colorado, Water Division No. 1
and which DEVELOPER is obligated to dedicate to PURECYCLE pursuant to
Section 2.01(e) herein.
(f) DEVELOPER: ICON INVESTORS I, LLC, a party to this Agreement, and its
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employees, agents, officers, directors, successors and assigns.
(g) Effective Date: The Effective Date of this Agreement as defined in
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Section 10.01 herein.
(h) Equivalent Residential Unit (EQR): The measure of demand placed upon
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the Water Facilities by a typical and average single-family detached
residence, as determined under RANGEVIEW's Rules and Regulations and as
further described in Section 2.01(d).
(i) Export Water: Water from the Lowry Range that PURECYCLE can use
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outside of the Lowry Range service area, as more specifically defined in
Section 6.1 of the Lease.
(j) Export Water Agreement: The Agreement for Sale of Export Water by and
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among RANGEVIEW and PURECYCLE executed April 11, 1996.
(k) Export Water Deed: The Bargain and Sale Deed among the Land Board,
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RANGEVIEW and PURECYCLE executed April 11, 1996, as recorded on July 31,
1996 at Reception No. A6097803 in the Arapahoe County Clerk and Recorder's
Office, together with any and all amendments thereto.
(l) Lease: The Amended and Restated Lease Agreement between RANGEVIEW and
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the State of Colorado, acting by and through the Land Board (Lease No.
S-37280), executed April 4, 1996, as recorded on July 31, 1996 at Reception
No. A6097802 in the
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Arapahoe County Clerk and Recorder's Office, together with any and all
amendments thereto.
(m) Option Agreement: The Option Agreement for Export Water Service
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attached hereto as Exhibit F and referenced in Section 2.01(e)(ii).
(n) Person: Any individual, corporation, joint venture, estate, trust,
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partnership, association or other legal entity other than PURECYCLE or
RANGEVIEW.
(o) PURECYCLE: Pure Cycle Corporation, a party to this Agreement, and its
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employees, agents, officers, directors, successors, and assigns.
(p) Property: The real property known as the "Sky Ranch PUD" and as
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specifically described in Exhibit A hereto.
(q) RANGEVIEW: Rangeview Metropolitan District, a party to this
---------
Agreement, and its employees, agents, officers, directors, successors, and
assigns.
(r) Rules and Regulations: The Rules and Regulations adopted by
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RANGEVIEW, as they may be amended from time to time.
(s) Water Facilities: Those facilities required for the production,
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treatment, storage, and delivery of both potable and irrigation water to,
on, or for the Property, all as more particularly described hereunder.
(t) Water Tap: The written authorization, in the form of sequentially
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numbered tap licenses issued by PURECYCLE, to connect to the Water
Facilities, as governed by RANGEVIEW's Rules and Regulations. Unless
otherwise provided for herein, a Water Tap shall be assumed to be for one
EQR.
(u) Water Tap Fee: Collective reference to the Water System Development
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Charge and the Water Resource Charge, both as defined and established in
Article 12 of RANGEVIEW's Rules and Regulations.
1.02 Interpretation. In this Agreement, unless the context otherwise requires:
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(a) The terms "herein," "hereunder," "hereby," "hereto," "hereof" and any
similar term, refer to this Agreement as a whole and not to any particular
Article, Section or subdivision hereof; the term "heretofore" means before
the date of execution of this Agreement; the term "now" means at the date
of execution of this Agreement; and the term "hereafter" means after the
date of execution of this Agreement.
(b) All definitions, terms and words shall include both the singular and
the plural.
(c) Words of the masculine gender include correlative words of the
feminine and neuter genders, and words importing the singular number
include the plural number and vice versa.
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(d) The captions or headings of this Agreement are for convenience only
and in no way define, limit or describe the scope or intent of any
provision, Article or Section of this Agreement.
ARTICLE 2
WATER SERVICE
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2.01 Conditions of Service. PURECYCLE and RANGEVIEW agree to provide water
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service to the Property subject to the terms and conditions of this Agreement.
The Water Facilities will include a "dual pipe distribution system" that will
provide both potable water and irrigation water service to the Property.
(a) Development of the Property is anticipated to occur in phases over
several years. Construction of Water Facilities will also occur in phases,
as mutually determined by PURECYCLE, RANGEVIEW, the DEVELOPER and AMD, to
reasonably meet the anticipated water demands of the Property and the
service for Water Taps as outlined in Exhibit C. Certain water facilities
will be constructed by PURECYCLE, RANGEVIEW and AMD as more specifically
described herein.
(b) Water service to the Property hereunder shall be generally governed by
and subject to RANGEVIEW's Rules and Regulations (providing inter alia for
rates, fees and charges), which are incorporated herein by reference, and
to the laws, ordinances and regulations of all federal, state and local
governmental entities and agencies having jurisdiction. PURECYCLE
acknowledges that the Water Tap Fees, user charges, service charges, and
any other rates, fees, tolls, and charges imposed in connection with water
service to the Property provided by PURECYCLE in connection therewith,
except for the Special Facilities Surcharge described in Section 4.03(b)
below, shall be subject to Section 8.2 of the Lease. RANGEVIEW acknowledges
that, to the extent DEVELOPER or the Customers pay fees to PURECYCLE in
accordance with the fee schedule set forth in the RANGEVIEW Rules and
Regulations, that no additional fees shall be imposed or collected by
RANGEVIEW.
(c) Water service to the Property hereunder is subject to the Lease and
the Export Water Deed. If any provision of this Agreement creates or causes
a breach or violation of the Lease or of the Export Water Deed, the parties
shall work together to revise such provision so that it no longer causes
such breach or violation.
(d) RANGEVIEW's Rules and Regulations establish the use of EQRs for
determining the impact of different water customers on the Water Facilities
and for assessing rates and charges. To the extent that they apply to water
service to the Property, the standards for determination of an EQR shall
not be changed during the term of this Agreement without the prior written
consent of AMD, except that AMD's consent shall not be required in the
event that development of the Property is not substantially consistent with
the Sky Ranch Preliminary Development Plan, Arapahoe County Case Number
Z01-010 ("PDP").
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(e) The DEVELOPER and/or AMD will secure sufficient water rights to serve
the proposed development of the Property as follows:
(i) DEVELOPER shall acquire, transfer and convey, or otherwise effect
the transfer and conveyance, to PURECYCLE of good and
merchantable title without encumbrances for the Dedicated
Groundwater underlying the Property by a conveyance in the form
of the "Water Rights Special Warranty Deed" attached as Exhibit
D. DEVELOPER shall convey the Dedicated Groundwater to PURECYCLE
upon DEVELOPER's request for construction water as provided for
in Exhibit C.
(ii) In order to assure sufficient and adequate amounts of Export
Water to serve reasonable demands as identified in Exhibit C for
the Property, PURECYCLE shall grant the DEVELOPER an option for
obtaining water service utilizing Export Water pursuant to the
Option Agreement attached hereto as Exhibit F. In the event that
the DEVELOPER exercises the Option for export water service
("Option") pursuant to the Option Agreement, the DEVELOPER shall
purchase Water Taps and receive such service in accordance with
the terms and conditions of this Agreement. The terms and
conditions of this Agreement shall be deemed incorporated by
reference into the Option Agreement except to the extent they are
contrary to or inapplicable to the terms and conditions of the
Option Agreement. In the event that the DEVELOPER does not
exercise the Option, this Agreement shall be deemed effective for
water service only up to 1,500 EQRs.
(iii) DEVELOPER shall be entitled to receive a credit for the
Dedicated Ground Water in accordance with Section 4.03(a).
(f) PURECYCLE shall cause the Water Facilities to be designed to comply
with applicable requirements of the federal Safe Drinking Water Act or such
other similar or successor laws (the "Safe Drinking Water Act") in effect
at the time the Water Facilities are constructed. In addition, PURECYCLE
shall operate and maintain the Water Facilities, and to the extent
necessary, modify or upgrade the Water Facilities, such that the water
provided through the Water Facilities complies with the Safe Drinking Water
Act.
(g) The responsibilities for the construction, operation, and maintenance
and the ownership and/or transfer of ownership, for the Water Facilities
generally are set out in Article 3 below.
ARTICLE 3
WATER FACILITIES
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3.01 Classification of Water Facilities. For the purposes of this Agreement,
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Water Facilities are segregated into four categories: Wholesale, Retail,
Customer, and Special.
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(a) Wholesale Facilities. Wholesale Facilities consist of water wells,
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well water collection pipelines, water treatment plants, water storage
tanks, water storage reservoirs, major water pumping stations, water
transmission pipelines, and related appurtenances, all except as may
otherwise be identified as Retail Facilities, Special Facilities, or
Customer Facilities below. PURECYCLE shall own the Wholesale Facilities.
PURECYCLE shall have direct responsibility for the design, construction,
operation and maintenance of the Wholesale Facilities in accordance with
all state and local governmental requirements. DEVELOPER shall convey or
otherwise have transferred to PURECYCLE fee title to or easements
acceptable to PURECYCLE for property required for the Wholesale Water
Facilities to be located on the Property, including but not limited to the
following:
(i) The pump station/water tank site identified as the 3.4-acre,
planning area A19, public facility tract on Sheet 5 of 23 of the
PDP.
(ii) A northern and a southern wellfield allowing for completing,
operating, maintaining, and replacing the wells described in Case
No. 85CW157 in the Water Court for Colorado, Water Division No. 1
The northern well field is situated in planning area A8 as shown
on the PDP. The southern well field is situated in planning area
D10 as shown on the PDP. The dedicated area for each wellfield
will be about one acre. PURECYCLE shall work cooperatively with
DEVELOPER to establish acceptable legal boundaries for each
wellfield, with approval by the DEVELOPER not being unreasonably
withheld.
Should DEVELOPER not have or choose not to provide suitable property for
the Water Facilities, DEVELOPER shall reimburse PURECYCLE for its costs for
acquiring suitable property as an additional designated Special Facility,
as is anticipated for the effluent reservoir site in Section 3.01(d)(ii).
(b) Retail Facilities. Retail Facilities shall be the water distribution
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system to transport potable and irrigation water from connection points
with the Wholesale Facilities to all areas of use on the Property. Retail
Facilities include, and are limited to, water distribution pipelines
("Water Mains"), valves, fire hydrants, and other appurtenances related to
such distribution system. All Water Mains located on or adjacent to the
Property shall be considered Retail Facilities. AMD shall be responsible
for the design and construction of the Retail Facilities in accordance with
the minimum design standards and other provisions contained in RANGEVIEW's
Rules and Regulations. Any changes to RANGEVIEW's Rules and Regulations
shall be applied consistently to all of RANGEVIEW's customers and to the
Property and such changes will not be applied retroactively. AMD shall be
solely responsible for all costs for the design and construction of the
Retail Facilities independent from any fees, rates and charges assessed by
RANGEVIEW. Upon completion of construction, and prior to being placed into
operation, AMD shall dedicate and transfer title to all Retail Facilities
to RANGEVIEW in accordance with Article 5 of RANGEVIEW's Rules and
Regulations. RANGEVIEW's obligations for operation and maintenance of the
Retail Facilities shall commence upon its "conditional acceptance" of the
Retail Facilities. RANGEVIEW's
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obligations for repair or replacement of defective work of the Retail
Facilities shall commence upon its "final acceptance" of the Retail
Facilities. The terms "conditional acceptance" and "final acceptance" shall
have the meanings provided for in Article 5 of RANGEVIEW's Rules and
Regulations.
(c) Customer Facilities. Customer Facilities consist of water service
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pipelines, piping, meters, plumbing, and related appurtenances used to
convey water from a Water Main to an individual Customer, including the
physical connection of a service line to a Water Main. The dividing point
between the Water Main and the Customer Facilities is the downstream end of
the Corporation Stop. Customer Facilities shall be constructed in
accordance with the requirements contained in RANGEVIEW's Rules and
Regulations and with applicable building codes.
(d) Special Facilities. Special Facilities are specified facilities
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required to provide water service to the Property but which are not
considered Wholesale Facilities, Retail Facilities, or Customer Facilities.
Responsibility for funding, planning, design, construction, operation and
maintenance of the Special Facilities are set out below. Special Facilities
anticipated to serve the Property consist of, and are limited to, the
following:
(i) Special Facility "A" includes extraordinary facilities required
to allow for the interim use of the irrigation Water Facilities
for potable water service to accommodate the Property's
development schedule and to allow for the deferred construction
of an Offsite Water Transmission Pipeline and certain other
facilities. Funding for Special Facility "A" shall be pursuant to
Section 4.03 below. PURECYCLE shall own and shall assume
responsibilities for the planning, design, construction,
operation and maintenance of Special Facility "A".
(ii) Special Facility "B" is an approximately 18-acre site for the
proposed effluent storage reservoir. Although the reservoir
itself is considered a Wholesale Facility, the property on which
the reservoir is to be located is considered a Special Facility
since AMD and DEVELOPER represent they do not currently have a
suitable site on the Property to dedicate to RANGEVIEW. Funding
for Special Facility "B" shall be pursuant to Section 4.04 below.
RANGEVIEW shall assume responsibilities for the planning, site
selection, and acquisition of Special Facility "B". RANGEVIEW
shall own and hold the Property interests for Special Facility
"B". RANGEVIEW shall request AMD's and DEVELOPER's approval prior
to entering into a purchase contract for the reservoir site, with
said approval not being unreasonably withheld.
(iii) Special Facility "C" is the Offsite Water Transmission Pipeline
that will transport Export Water to the Property. Said pipeline
is to consist of an 18" (or larger) water transmission pipeline
and appurtenances located outside of and not directly abutting
the Property. Special Facility "C" shall be scheduled to be
complete and operational by the time that Water Taps for 1,500
EQRs are purchased for the Property. Funding for Special Facility
"C" shall be pursuant to Section 4.03 below. PURECYCLE shall own
and shall assume responsibilities
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for the planning, design, construction, operation and maintenance
of Special Facility "C". AMD shall cooperate with RANGEVIEW in
obtaining rights-of-way outside of its boundaries as may be
necessary for construction of the Offsite Water Transmission
Pipeline, which may include exercising the power of eminent
domain.
(iv) Special Facility "D" includes extraordinary facilities required
by PURECYCLE to provide effluent water to the Property for
irrigation purposes. Special Facility "D" shall be scheduled to
be complete and operational by the applicable date shown in the
"Special Facilities Schedule" in Exhibit C. Funding for Special
Facility "D" shall be pursuant to Section 4.03 below. PURECYCLE
shall own and shall assume responsibilities for the planning,
design, construction, operation and maintenance of Special
Facility "D".
3.02 Construction of Wholesale and Special Facilities. RANGEVIEW and PURECYCLE
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shall use all reasonable efforts to cause the Wholesale Facilities and Special
Facilities, having sufficient capacity to meet the demands described in Exhibit
C, to be permitted, designed, acquired, constructed, installed and made ready to
be placed into service according with the schedule also shown in Exhibit C.
RANGEVIEW's and PURECYCLE's obligations shall be contingent on the timely
payment of fees, rates and charges and on the timely execution of other
obligations by AMD and DEVELOPER as identified in this Agreement.
3.03 Regulatory Approval Contingencies. All parties to this Agreement
-----------------------------------
acknowledge that the design, construction and operation of the Water Facilities,
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the Special Facilities, and the wastewater facilities require permits and
approvals from regulatory entities including the State of Colorado, Arapahoe
County, Tri-County Health Department, Bennett Fire Protection District, and
others. The granting of such regulatory permits and approvals is beyond the
direct control of the parties to this Agreement. In the event one of the
parties receives notice from any regulatory agency of a potential delay in the
issuance of a permit or necessary approval, such party shall provide immediate
written notice to the other parties of such potential delay. The parties shall
mutually cooperate to determine a potential solution to lessen the impact of
such delay(s).
3.04 Force Majeure. Without limiting the foregoing, should any party be unable
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to perform any obligation required of them under this Agreement because of any
cause beyond its control, including but not limited to war, insurrection, riot,
civil commotion, strikes, lockout, fire, earthquake, windstorm, flood, acts of
governmental authorities, moratoriums, material shortages, or any other force
majeure, each party's performance of the obligation affected shall, subject to
the provisions of Section 9.01 below, be suspended for so long as such cause
prevents it from performing such obligation.
3.05 Unified Operation and Use of Water Facilities. The Water Facilities to be
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constructed to serve the Property are components of a larger water system
planned and to be operated by RANGEVIEW and PURECYCLE. The Water Facilities
shall be available for use by all of PURECYCLE's customers in accordance with
RANGEVIEW's Rules and Regulations and with sound domestic water system
engineering, management and operational practices. If PURECYCLE defaults in its
obligations under this Agreement and AMD assumes operation of the Water
Facilities in accordance with Section 9.02, AMD shall have the right to serve
its existing Customers first and then to provide water service to the remaining
Export Water
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customers. The parties agree that every effort shall be taken to provide
continuous, uninterrupted water service to existing Customers.
3.06 Deeds of Trust and Security Interests. In order to secure the obligations
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of PURECYCLE under this Agreement, PURECYCLE shall provide, to the extent held
by PURECYCLE, AMD and DEVELOPER with a first-priority deed of trust and/or
Uniform Commercial Code security interest ("UCC Security Interest"), as
appropriate, in PURECYCLE's rights to the following collateral: (i) the
Dedicated Groundwater, immediately upon any conveyances by DEVELOPER to
PURECYCLE pursuant to Section 2.01(e)(i); (ii) the Wholesale Facilities,
together with any real property associated therewith upon commencement of
construction of such facilities; (iii) Special Facilities A, C and D, together
with any real property associated therewith upon commencement of construction of
such facilities; and (iv) any other real property or easements (together with
any existing or future improvements thereon) conveyed or granted by AMD or the
DEVELOPER to PURECYCLE, simultaneously with such conveyance. In order to secure
the obligations of RANGEVIEW under this Agreement, RANGEVIEW shall provide AMD a
first-priority deed of trust and/or UCC Security Interest in Special Facility B
and the Retail Facilities, together with any real property conveyed or granted
to RANGEVIEW associated with the Special Facilities and the Retail Facilities.
PURECYCLE previously granted a first-priority deed of trust and/or UCC Security
Interest to the Land Board in the Export Water. PURECYCLE shall grant AMD and
DEVELOPER with a second-priority deed of trust and/or UCC Security Interest in
the Dedicated Export Water, as defined in the Option Agreement, at the time the
Option is exercised by the DEVELOPER. Upon the payment of Water Tap Fees by the
DEVELOPER, PURECYCLE shall obtain, with respect to the Dedicated Export Water
applicable to such Water Tap Fees, the release of any first-priority deed of
trust and/or UCC Security Interests in the Export Water, such that AMD and the
DEVELOPER Deed of Trust and/or UCC Security Interest shall remain as the only
first-priority Deed of Trust and/or UCC Security Interest in the Export Water.
PURECYCLE covenants that it shall not place any additional encumbrances on the
Dedicated Export Water without AMD's and/or DEVELOPER's prior written consent.
All of the deeds of trusts and/or UCC Security Interests referenced in this
Section 3.06 shall remain in place until DEVELOPER has purchased all of the
Water Taps pursuant to Exhibit C.
3.07 Parties Obligated. RANGEVIEW is liable and responsible only for the
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specific undertakings provided for in Sections 3.01(b) and 3.01(d)(ii) above and
-
shall have no liability or responsibility whatever for performance of any
obligations imposed upon PURECYCLE under this Agreement. Services to be
provided by RANGEVIEW pursuant to Section 3.01(b) above shall be provided by
PURECYCLE, but RANGEVIEW shall nevertheless be primarily obligated and
responsible to the other parties to this Agreement for the performance of those
services. Notwithstanding the foregoing, RANGEVIEW shall still be obligated to
enforce the provisions of any agreements it has with PURECYCLE that affect the
rights and obligations of AMD and/or the DEVELOPER under this Agreement.
3.08 Delegation of Authority. AMD represents that it has power and authority to
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provide water service to users on the Property and to design and construct the
Retail Water Facilities in aid thereof. AMD and RANGEVIEW each recognizes in
the other the right to make and enforce rules and regulations and to perform the
terms of this Agreement, but AMD shall not interfere with RANGEVIEW and
PURECYCLE in the enforcement of RANGEVIEW's Rules and
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Regulations or the performance of its obligations under this Agreement to
provide water service to the Property. AMD hereby delegates and grants to
RANGEVIEW and PURECYCLE all such authority deemed necessary by RANGEVIEW and
PURECYCLE to perform their respective obligations under this Agreement,
including without limitation all of the power and authority needed to impose and
collect RANGEVIEW's rates, fees, and charges for all service provided hereunder
and for normal incidental purposes reasonably related thereto. AMD shall
require the Customers on the Property to pay RANGEVIEW's rates, fees, and
charges, and RANGEVIEW and PURECYCLE shall have power to enforce collection of
all such rates, fees, and charges in the manner provided for in RANGEVIEW's
Rules and Regulations.
ARTICLE 4
FEES, RATES, CHARGES, CREDITS AND REIMBURSEMENTS
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4.01 General. RANGEVIEW shall establish and from time to time may amend rates,
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fees and charges for water service, which are incorporated herein by reference.
Except as otherwise provided for in this Agreement, such rates, fees and charges
shall apply to all Customers on the Property obtaining domestic water service
from PURECYCLE. For information purposes, the Water Tap Fees and water service
charges in effect as of the Effective Date of this Agreement are shown in
Exhibit E.
4.02 Water Tap Fees. DEVELOPER shall purchase Water Taps from PURECYCLE for use
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on the Property in accordance with the "Water Tap Takedown Schedule" in Exhibit
C.
4.03 Special Facilities"A","C" and"D". DEVELOPER shall participate in funding
---------------------------------
the construction of Special Facilities "A", "C" and "D", as identified in
Section 3.01(d), using a combination of groundwater dedication credits and
special facilities surcharges:
(a) Groundwater Dedication Credits: In lieu of DEVELOPER receiving
credits towards the Water Resource Charge portion of Water Tap Fees for
DEVELOPER's dedication of approved Dedicated Groundwater per Section
2.01(e)(i), these credits shall be used to fund a portion of the Fund, as
hereafter defined. The credit shall be calculated using the Water Resource
Charge portion of the Water Tap Fee and shall be granted in accordance with
RANGEVIEW's Rules and Regulations, with only one credit being applied to
each Water Tap purchased by DEVELOPER. The amount of the credit, using the
current Water Resource Charge, is approximately $2,152,000 (which is $3,400
per EQR times 443 acre feet/year divided by 0.7 acre feet/year per EQR).
This amount shall be allocated to the Fund.
(b) Special Facilities Surcharge: DEVELOPER shall pay a special
facilities surcharge for the first 1,500 Water Taps purchased. The initial
surcharge shall be $442 per EQR; however, if additional facilities are
required with respect to Special Facility "D", PURECYCLE and the DEVELOPER
will renegotiate the amount of the surcharge.
DEVELOPER's sole obligations for participating in Special Facilities "A", "C",
and "D" shall be the Groundwater Dedication Credits per Section 4.03(a) above,
payment of the special facilities surcharges as described in Sections 4.03(b)
above, and the provision of acceptable
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easements for the Special Facilities in accordance with Section 6.02(c). The
parties shall establish a Special Facilities Fund (the "Fund"), which shall be
held by the Bank of Cherry Creek, a Branch of Western National Bank (the
"BANK"). The Escrow Agreement between the DEVELOPER, PURECYCLE and the BANK
substantially in the form of Exhibit G is attached hereto. DEVELOPER shall
deposit amounts equal to the Groundwater Dedication Credits and the Special
Facilities Surcharges into the Fund in accordance with the provisions of the Tap
Fee Schedule set forth in Exhibit C. Interest shall accrue to the benefit of
the Fund. Funds shall be used by PURECYCLE only for direct and indirect costs
for the planning, right-of-way acquisition, design, construction, inspection,
and other necessary activities for Special Facilities "A", "C", and "D", with
these activities being performed in a timely manner such that each special
facility is ready to be placed into service as needed and in general accordance
with Table C-2, the Special Facilities Schedule, in Exhibit C. The BANK shall
maintain a ledger of the Fund and shall provide DEVELOPER and PURECYCLE with a
copy of the ledger within seven days of notice by DEVELOPER and PURECYCLE
requesting same. If any funds remain in the Fund following completion of the
construction of Special Facilities "A", "C", and "D", said funds shall be
disbursed to PURECYCLE. In the event that the Fund is insufficient to complete
the construction of Special Facilities "A", "C", and "D", PURECYCLE shall be
responsible for providing additional funds. In the event that the DEVELOPER
does not exercise the Option, any unused funds remaining in the Fund after
construction of Special Facilities "A","C" and "D" shall be disbursed to the
DEVELOPER.
4.04 Special Facility"B". AMD shall reimburse RANGEVIEW for the actual costs
--------------------
and expenses for Special Facility "B" in an amount not to exceed $270,000.00
(the "Maximum SFB Budget"). If the costs for Special Facility "B" exceed the
Maximum SFB Budget, RANGEVIEW shall provide AMD with documentation supporting
such increased cost. AMD will have fifteen days to review such information. If
AMD is satisfied with the documentation regarding the increased cost AMD will
agree to pay such increased costs. If AMD is not satisfied with the
documentation regarding such increased costs, RANGEVIEW and AMD will work
together to mutually resolve the issue, including further negotiation with the
property owner to reduce the cost or parties may determine to pursue
condemnation of such property. If the parties are unable to reach resolve about
the increased costs of Special Facility "B", RANGEVIEW will pay 60% and AMD will
pay 40% of those costs exceeding the Maximum SFB Budget. The selection and
purchase of the reservoir site is anticipated to be completed on or about the
date set forth in the "Special Facilities Schedule" in Exhibit C. Payment by
AMD to RANGEVIEW shall be due upon closing for the site purchase, with RANGEVIEW
providing AMD at least thirty days advanced notice of the closing date. Should
AMD subsequently obtain a reservoir site, suitable in time and place to
RANGEVIEW, and convey this site to RANGEVIEW, then AMD shall only reimburse
RANGEVIEW for the costs and expenditures incurred by RANGEVIEW for obtaining
title for the reservoir site. Title for the reservoir site shall be held by
RANGEVIEW.
4.05 DEVELOPER Reimbursement. Reimbursement opportunities, as provided for in
------------------------
Article 5 of RANGEVIEW's Rules and Regulations, shall be available to the
DEVELOPER only for the Offsite Water Transmission Pipeline, Special Facility
"C".
Page 12 of 55
ARTICLE 5
DOMESTIC WASTEWATER TREATMENT FACILITIES
----------------------------------------
5.01 Service to PURECYCLE. AMD shall arrange for the collection and treatment
---------------------
of domestic wastewater from the Property and shall arrange for the treated
wastewater to be available to PURECYCLE for use in PURECYCLE's reclaimed water
system, all as provided for in Exhibit B.
5.02 Wastewater Service Charges. AMD will establish the rates, fees, tolls, and
--------------------------
charges for connection to and use of the wastewater system in accordance with
rules and regulations to be adopted by AMD and that are to be uniformly applied
to all wastewater customers on the Property, including PURECYCLE, subject to the
provisions of Exhibit B. PURECYCLE shall be subject to applicable conditions
and provisions of AMD's rules and regulations with regards solely to PURECYCLE's
obtaining wastewater service from AMD.
5.03 IrrigationSystem. AMD and DEVELOPER shall cooperate with PURECYCLE in the
----------------
planning, design, construction, operation, maintenance, and management of the
irrigation Water Facilities such that almost all irrigation demands throughout
the Property are met using reclaimed water or raw water. If PURECYCLE is unable
to use reclaimed water, the acre-foot per EQR calculation will be adjusted
accordingly.
ARTICLE 6
REPRESENTATIONS, WARRANTIES AND COVENANTS
-----------------------------------------
6.01 AMD Representations and Covenants. In addition to the other
------------------------------------
representations, warranties and covenants made by AMD herein, AMD makes the
following representations, warranties and covenants:
(a) AMD is duly authorized to execute this Agreement and perform its
obligations hereunder, and all action on its part for the execution and
delivery of this Agreement has been or will be duly and effectively taken.
(b) AMD shall at its sole cost develop, design, acquire, construct, and
install all Retail Facilities in accordance with Section 3.01(b) herein.
Upon completion of construction, all Retail Facilities shall be conveyed to
RANGEVIEW pursuant to Article 5 of RANGEVIEW's Rules and Regulations.
(c) AMD shall participate in all Special Facilities as provided for in
Sections 3.01(d) and 4.04 and elsewhere in this Agreement.
(d) AMD anticipates performing over lot grading, installing streets,
sanitary sewers, and storm sewers, and other development activities on the
Property. AMD acknowledges that construction of the Water Facilities can
only proceed concurrently with these other development activities. AMD
shall endeavor to schedule and cause these other development activities to
occur in a manner and on a schedule that allow for the efficient, cost
effective, and timely construction of all water facilities.
Page 13 of 55
(e) AMD shall abide by all applicable conditions and provisions of
RANGEVIEW's Rules and Regulations with regard solely to water service for
the Property.
(f) AMD shall keep and perform all of their covenants and agreements
contained herein in a timely manner that will not impede RANGEVIEW,
PURECYCLE or DEVELOPER from meeting their respective obligations.
(g) Neither the execution of this Agreement, the consummation of the
transactions contemplated hereunder, nor the fulfillment of or the
compliance with the terms and conditions of this Agreement by AMD will
conflict with or result in a breach of any terms, conditions or provisions
of, or constitute a default under, or result in the imposition of any
prohibited lien, charge or encumbrance of any nature under any agreement,
instrument, indenture or any judgment, order or decree to which AMD is a
party or by which AMD is bound.
6.02 DEVELOPER Representations and Covenants. In addition to the other
------------------------------------------
representations, warranties and covenants made by DEVELOPER herein, DEVELOPER
makes the following representations, warranties and covenants:
(a) DEVELOPER is duly authorized to execute this Agreement and perform its
obligations hereunder, and all action on its part for the execution and
delivery of this Agreement has been or will be duly and effectively taken.
(b) DEVELOPER shall at no cost to PURECYCLE provide or otherwise transfer
to PURECYCLE acceptable easements for pipelines, utilities and access to
the wholesale water facilities described in Section 3.01(a) above and to
Special Facilities to be located on the Property.
(c) DEVELOPER shall provide or otherwise transfer to AMD, or directly to
RANGEVIEW upon AMD's direction, easements in accordance with RANGEVIEW's
Rules and Regulations for all Retail Facilities to be located on the
Property.
(d) DEVELOPER anticipates installation of the electric power distribution
system, and other development activities on the Property. DEVELOPER
acknowledges that construction of the Water Facilities can only proceed
concurrently with these other development activities. DEVELOPER shall
endeavor to schedule and cause these other development activities to occur
in a manner and on a schedule that allow for the efficient, cost effective,
and timely construction of the water facilities.
(e) DEVELOPER anticipates installing a portion of the Customer Facilities.
In any event, RANGEVIEW and PURECYCLE shall not incur or be responsible for
any cost or expense related to any Customer Facilities except as may be
specifically provided for in RANGEVIEW's Rules and Regulations.
(f) DEVELOPER shall abide by all applicable conditions and provisions
of RANGEVIEW's Rules and Regulations with regard solely to water service
for the Property.
Page 14 of 55
(g) DEVELOPER shall keep and perform all of their covenants and agreements
contained herein in a timely manner that will not impede RANGEVIEW,
PURECYCLE and AMD from meeting their obligations.
(h) Neither the execution of this Agreement, the consummation of the
transactions contemplated hereunder, nor the fulfillment of or the
compliance with the terms and conditions of this Agreement by DEVELOPER
will conflict with or result in a breach of any terms, conditions or
provisions of, or constitute a default under, or result in the imposition
of any prohibited lien, charge or encumbrance of any nature under any
agreement, instrument, indenture or any judgment, order or decree to which
DEVELOPER is a party or by which DEVELOPER or the Property are bound.
6.03 PURECYCLE Representations and Covenants. In addition to the other
------------------------------------------
representations, warranties and covenants made by PURECYCLE herein, PURECYCLE
makes the following representations, warranties and covenants:
(a) PURECYCLE is duly authorized to execute this Agreement and perform its
obligations hereunder, and all action on its part for the execution and
delivery of this Agreement has been or will be duly and effectively taken.
(b) PURECYCLE shall keep and perform all of its covenants and agreements
contained herein in a timely manner that will not impede AMD, DEVELOPER or
RANGEVIEW from meeting their respective obligations.
(c) PURECYCLE shall reserve Export Water sufficient to provide water
service to the Property in substantial conformance with the development
approved in the PDP and pursuant to the provisions of the Option Agreement.
(d) Neither the execution of this Agreement, the consummation of the
transactions contemplated hereunder, nor the fulfillment of or the
compliance with the terms and conditions of this Agreement by PURECYCLE
will conflict with or result in a breach of any terms, conditions or
provisions of, or constitute a default under, the Export Water Agreement,
the Export Water Deed, or any other agreement, mortgage, indenture, or
instrument to which PURECYCLE is a party, or result in the imposition of
any prohibited lien, charge or encumbrance of any nature under any
agreement, instrument, indenture or any judgment, order or decree of any
court to which PURECYCLE is a party or by which PURECYCLE is bound.
(e) Water Rights. PURECYCLE shall provide to AMD and DEVELOPER an opinion
------------
letter of water counsel in the form of Exhibit H within sixty (60) days of
the mutual execution of this Agreement prepared by Petrock and Fendel,
P.C., for the benefit of AMD and the DEVELOPER. Petrock and Fendel, P.C.
will provide to AMD and DEVELOPER evidence of its liability insurance
coverage, including the amount of coverage provided.
(f) PURECYCLE shall abide by all applicable conditions and provisions of
AMD's Rules and Regulations with regard solely to Wastewater Service.
Page 15 of 55
(g) Estoppels. RANGEVIEW and PURECYCLE shall request from the Land Board
---------
assurances concerning the current status and validity of the Lease. The
Land Board's assurances shall be in the general form of the Estoppel
Certificate provided in Exhibit I. RANGEVIEW shall also provide an estoppel
concerning the current status and validity of the Lease in the general form
of the Estoppel Certificate provided in Exhibit J within 60 days of mutual
execution of this Agreement
6.04 RANGEVIEW Representations. RANGEVIEW makes the following representations,
-------------------------
warranties and covenants:
(a) RANGEVIEW is duly authorized to execute this Agreement and perform its
obligations hereunder, and all action on its part for the execution and
delivery of this Agreement has been or will be duly and effectively taken.
(b) RANGEVIEW shall keep and perform all of their covenants and agreements
contained herein in a timely manner that will not impede PURECYCLE,
DEVELOPER and AMD from meeting their respective obligations.
(c) Neither the execution of this Agreement, the consummation of the
transactions contemplated hereunder, nor the fulfillment of or the
compliance with the terms and conditions of this Agreement by RANGEVIEW
will conflict with or result in a breach of any terms, conditions or
provisions of, or constitute a default under, the Lease, the Export Water
Agreement, the Export Water Deed, or any other agreement, mortgage,
indenture, or instrument to which RANGEVIEW is a party or by which
RANGEVIEW is bound, or result in the imposition of any prohibited lien,
charge or encumbrance of any nature under any agreement, instrument,
indenture or any judgment, order or decree of any court to which RANGEVIEW
is a party or by which RANGEVIEW is bound.
6.05 Instruments of Further Assurance. AMD, DEVELOPER, PURECYCLE and RANGEVIEW
--------------------------------
covenant that they will do, execute, acknowledge and deliver, or cause to be
done, executed, acknowledged and delivered, such acts, instruments and transfers
as may reasonably be required for the performance of their obligations
hereunder.
ARTICLE 7
DEFAULT BY AMD; REMEDIES AND ENFORCEMENT
----------------------------------------
7.01 Events of Default. The occurrence of any one or more of the following
-------------------
events or the existence of any one or more of the following conditions shall
constitute an Event of Default by AMD under this Agreement:
(a) Failure by AMD to make payment of any fees or charges identified
herein when the same shall become due and payable as provided herein.
(b) Failure by AMD to design and construct the Retail Facilities in a
timely manner.
Page 16 of 55
(c) Failure by AMD to provide wastewater service to PURECYCLE or to
provide adequately treated wastewater effluent to PURECYCLE in accordance
with Section 5.02 above.
(d) Default in the performance or observance of any other of the
covenants, agreements or conditions on the part of AMD in this Agreement.
7.02 Remedies on Occurrence of Event of Default. Upon the occurrence of an
----------------------------------------------
Event of Default by AMD, and after all cure periods have expired, RANGEVIEW,
acting on its own or on PURECYCLE's behalf, shall have the following rights and
remedies, any or all of which may be pursued in the sole discretion of
RANGEVIEW:
(a) To protect and enforce its rights under this Agreement and any
provision of law by such suit, action or special proceedings as RANGEVIEW
may deem appropriate, including without limitation for the enforcement of
any appropriate legal or equitable remedy, or for the recovery of damages
caused by breach of this Agreement, including attorneys' fees and all other
costs and expenses incurred in enforcing this Agreement.
(b) To exercise any and all other remedies provided by RANGEVIEW's Rules
and Regulations and this Agreement, until the default is fully cured. Any
delay in a payment due pursuant to Article 4 shall extend the time of
performance of PURECYCLE's and RANGEVIEW's obligations under Section 3.02
above.
(c) To take or cause to be taken such other actions as it deems necessary
to enforce its rights hereunder.
7.03 Cure of Default. In the Event of Default by AMD, the default may be cured
---------------
as described following:
(a) For default caused due to a failure by AMD to make payments, or by
DEVELOPER on behalf of AMD, making payment to PURECYCLE within sixty days
of RANGEVIEW's notice of the default of all amounts due through the date of
payment plus all costs incurred by PURECYCLE as a result of the default.
(b) For other defaults, by AMD's performance, or by DEVELOPER's
performance on behalf of AMD, within sixty days of RANGEVIEW's notice of
the Default, or if more than sixty days is reasonably required to cure such
default, by commencing to correct the default within said sixty-day period
and thereafter prosecuting the same to completion with reasonable
diligence.
7.04 Delay or Omission of Waiver. No delay or omission of RANGEVIEW, PURECYCLE
---------------------------
or DEVELOPER to exercise any right or power accruing upon any Event of Default
shall exhaust or impair any such right or power or shall be construed to be a
waiver of any such Event of Default or acquiescence therein.
7.05 No Waiver of One Default to Affect Another; All Remedies Cumulative. No
---------------------------------------------------------------------
waiver of any Event of Default hereunder by RANGEVIEW, PURECYCLE or DEVELOPER
shall extend to or affect any subsequent or any other then existing Event of
Default or shall impair any rights
Page 17 of 55
or remedies consequent thereon. All rights and remedies of RANGEVIEW, PURECYCLE
and DEVELOPER provided herein may be exercised with or without notice, shall be
cumulative, may be exercised separately, concurrently or repeatedly, and the
exercise of any such right or remedy shall not affect or impair the exercise of
any other right or remedy.
ARTICLE 8
DEFAULT BY DEVELOPER; REMEDIES AND ENFORCEMENT
----------------------------------------------
8.01 Events of Default. The occurrence of any one or more of the following
------------------
events or the existence of any one or more of the following conditions shall
constitute an Event of Default by DEVELOPER under this Agreement:
(a) Failure by DEVELOPER to make payment of any Water Tap Fees or other
fees or charges identified herein when the same shall become due and
payable as provided herein.
(b) Failure by DEVELOPER to convey, or otherwise effect the conveyance of,
the Dedicated Groundwater to PURECYCLE as provided herein.
(c) Failure by DEVELOPER to provide fee title to or easements for any
property required by PURECYCLE for the Wholesale Water Facilities to be
located on the Property.
(d) Default in the performance or observance of any other of the
covenants, agreements or conditions on the part of DEVELOPER in this
Agreement.
8.02 Remedies on Occurrence of Event of Default. Upon the occurrence of an
----------------------------------------------
Event of Default by DEVELOPER, and after all cure periods have expired,
PURECYCLE, acting on its own or on RANGEVIEW's behalf, shall have the following
rights and remedies, any or all of which may be pursued in the sole discretion
of PURECYCLE:
(a) To protect and enforce its rights under this Agreement and any
provision of law by such suit, action or special proceedings as PURECYCLE
may deem appropriate, including without limitation for the enforcement of
any appropriate legal or equitable remedy, or for the recovery of damages
caused by breach of this Agreement, including attorneys' fees and all other
costs and expenses incurred in enforcing this Agreement in the event
PURECYCLE prevails in its exercise of such remedies, and DEVELOPER agrees
that PURECYCLE shall have the right to proceed against DEVELOPER for
specific performance of any covenant or agreement contained herein.
(b) To exercise any and all other remedies provided by RANGEVIEW Rules
and Regulations and this Agreement, until the default is fully cured. Any
delay in a payment due pursuant to Article 4 shall extend the time of
performance of PURECYCLE's and RANGEVIEW's obligations under Section 3.02
above.
(c) To take or cause to be taken such other actions as it deems necessary
to enforce its rights hereunder.
Page 18 of 55
(d) In the event PURECYCLE prevails in its exercise of such remedies, any
expenses incurred by PURECYCLE in connection with the remedies set forth
herein shall become due and payable by DEVELOPER immediately without notice
and shall bear interest at a percentage rate of ten percent (10%) per
annum.
8.03 Cure of Default. In the Event of Default by DEVELOPER, the default may be
---------------
cured as described following:
(a) For default caused due to a failure by DEVELOPER to make payments as
set forth in Section 8.01(a) above, by DEVELOPER, or by AMD on behalf of
DEVELOPER, making payment to RANGEVIEW and/or PURECYCLE within sixty days
of PURECYCLE's notice of the default of all amounts due through the date of
payment plus all costs incurred by PURECYCLE as a result of the default.
(b) For other defaults, by DEVELOPER's performance, or by AMD's
performance on behalf of DEVELOPER, within sixty days after the Event of
Default, or if more than sixty days is reasonably required to cure such
default, by commencing to correct the default within said sixty-day period
and thereafter prosecuting the same to completion with reasonable
diligence.
8.04 Delay or Omission of Waiver. No delay or omission of RANGEVIEW, PURECYCLE
---------------------------
or AMD to exercise any right or power accruing upon any Event of Default shall
exhaust or impair any such right or power or shall be construed to be a waiver
of any such Event of Default or acquiescence therein.
8.05 No Waiver of One Default to Affect Another; All Remedies Cumulative. No
---------------------------------------------------------------------
waiver of any Event of Default hereunder by RANGEVIEW, PURECYCLE or AMD shall
extend to or affect any subsequent or any other then existing Event of Default
or shall impair any rights or remedies consequent thereon. All rights and
remedies of RANGEVIEW, PURECYCLE and AMD provided herein may be exercised with
or without notice, shall be cumulative, may be exercised separately,
concurrently or repeatedly, and the exercise of any such right or remedy shall
not affect or impair the exercise of any other right or remedy.
ARTICLE 9
DEFAULT BY RANGEVIEW OR PURECYCLE; REMEDIES AND ENFORCEMENT
-----------------------------------------------------------
9.01 Termination for Frustration of Essential Purpose.
-----------------------------------------------------
(a) If a failure to obtain necessary regulatory approval, any force
majeure, or any default by RANGEVIEW or PURECYCLE in the performance of
their obligations hereunder causes a delay in the construction of any
essential element of the Water Facilities, and it is impossible for any
reconfiguration of the Water Facilities, or for any assumption of control
pursuant to Section 9.02 below (if applicable under the circumstances), to
achieve water service to the Property, AMD or DEVELOPER shall have the
right to terminate this Agreement upon written notice to RANGEVIEW and
PURECYCLE. Notwithstanding the foregoing, the parties will mutually
cooperate to the
Page 19 of 55
extent possible with respect to delays pursuant to this Section. However,
if AMD or the DEVELOPER determine that such delays pursuant to this Section
will not be resolved in a timely manner, AMD or the DEVELOPER shall have
the right to terminate the Agreement upon sixty (60) days' written notice
to PURECYCLE and RANGEVIEW.
(b) Upon receipt of a notice issued pursuant to subsection (a) above,
RANGEVIEW and PURECYCLE shall immediately cease all work on the Water
Facilities, except such work as may be required for the protection of
public safety, to secure and protect the site of any construction work, and
to preserve the utility of any non-construction work for possible future
use.
(c) In the event of a termination under this Section 9.01, AMD and
DEVELOPER shall pay RANGEVIEW and PURECYCLE for all work performed and
materials purchased through and including the date on which RANGEVIEW and
PURECYCLE receive such notice and for reasonable termination expenses it
incurred unless RANGEVIEW or PURECYCLE has committed a material breach of
this Agreement which is the proximate cause of the impossible circumstance.
In that event, AMD and DEVELOPER shall not be required to pay RANGEVIEW or
PURECYCLE for any work performed and materials purchased. In addition, if a
material breach of this Agreement by RANGEVIEW or PURECYCLE is the
proximate cause of the impossible circumstance, this subsection (c) shall
not be construed to bar AMD or DEVELOPER from claiming whatever damages it
may be entitled to as a result of such breach.
(d) For the purposes of this Section 9.01, the term "impossible" shall
mean a circumstance in which RANGEVIEW or PURECYCLE is truly prevented from
performing, and not that continued performance is merely impracticable or
unreasonably expensive. Such a circumstance must be beyond the control of
and not created by AMD or DEVELOPER.
9.02 AMD's Right to Assume Control of Water Facilities.
--------------------------------------------------------
(a) In the event of a material default by PURECYCLE or RANGEVIEW in the
performance of their obligations hereunder, AMD shall be entitled to assume
the rights and obligations of RANGEVIEW and PURECYCLE with respect to
operation of those Water Facilities which directly provide service to the
Property, including the right to use the Dedicated Export Water reserved by
PURECYCLE to service the Property provided AMD has exercised the Option,
along with the concomitant groundwater supply and water transmission
facilities for said Dedicated Export Water. To the extent that any of the
Dedicated Export Water facilities also serve other customers, AMD shall
have the right to provide water service to its Customers first and then to
provide service to other customers receiving service from the Export Water.
(b) The assumption rights granted to AMD herein are subject to any and all
applicable terms and conditions of the Lease, the Export Water Deed, and
any obligations recorded in the Arapahoe County Clerk and Recorder's Office
with respect to the Lease or the Export Water.
Page 20 of 55
(c) If the DEVELOPER has exercised the Option provided for in Section
2.01(e)(ii), and to the extent that more than 1,500 Water Taps have been
purchased for the Property, PURECYCLE shall, upon AMD's request and
following a material default by PURECYCLE or RANGEVIEW, convey title to AMD
of the number of acre feet of Export Water allocable on an EQR basis
necessary to service Water Taps purchased by AMD and/or the DEVELOPER prior
to the date of transfer. PURECYCLE shall convey such Export Water pursuant
to the terms of a deed in the same form and with the same rights and
obligations as the Export Water Deed. Such transfer will be free and clear
of any security interests and other liens provided AMD pays the Water
Resource Charge allocable to such taps to the trust account of Davis Graham
& Stubbs LLP to enable that firm to release outstanding security interests.
(d) If AMD places additional Water Taps in service after assuming control
of the Water Facilities pursuant to this Section 9.02, PURECYCLE will
convey title to AMD of the additional Dedicated Export Water allocable to
such taps, provided AMD pays the Water Resource Charge allocable to such
taps to the trust account of Davis Graham & Stubbs LLP to enable that firm
to release outstanding security interests.
(e) If AMD assumes control of the Water Facilities pursuant to this
Section 9.02, AMD will not be responsible for paying any fees, rates or
charges to PURECYCLE except as provided in Section 9.02(d) above.
(f) For the purposes of this Section 9.02, a material default shall be
defined as a failure to perform a material term, covenant or condition in
this Agreement which continues uncured for a period of sixty (60) days
after written notice specifically setting forth the nature of the default
has been given by AMD or DEVELOPER to RANGEVIEW and PURECYCLE, or if more
than sixty (60) days is reasonably required to cure such matter complained
of, if RANGEVIEW and PURECYCLE shall fail to commence to correct the same
within said sixty (60) day period or shall thereafter fail to prosecute the
same to completion with reasonable diligence. Unless otherwise agreed upon
by AMD and DEVELOPER, any material defaults shall be cured within ninety
(90) days of such notice.
(g) Insolvencyand OtherProceedings. In the event of any bankruptcy or
-------------------------------
insolvency proceedings, any other debtor-creditor actions or proceedings,
or any other litigation, actions, or proceedings whatsoever involving
PURECYCLE and/or RANGEVIEW, whether voluntary or involuntary, both
PURECYCLE and RANGEVIEW each hereby agree that each of them will use
reasonable efforts to prevent water service, or rights to water service for
any existing water users within AMD from being terminated, interrupted,
reduced, modified, or threatened.
9.03 Foreclosure. In addition to all of the foregoing rights and remedies, in
-----------
the event of a material default by PURECYCLE or RANGEVIEW in the performance of
their obligations under this Agreement or the Option Agreement, AMD and/or the
DEVELOPER may exercise any rights provided pursuant to the deeds of trust and
security interests granted under Section 3.06, including the right to foreclose
on any Deeds of Trust or Security Interests, and to exercise, enforce, or assert
any and all other rights and remedies that are available in law or in equity.
Page 21 of 55
ARTICLE 10
MISCELLANEOUS PROVISIONS
------------------------
10.01 Effective Date; Contingency. This Agreement shall be in full force and
-----------------------------
effect and be legally binding on the date it is fully executed and delivered by
the Parties hereto and upon the meeting of the contingency described immediately
below. This entire Agreement is expressly contingent upon approval from
Arapahoe County of the PDP. If said approval of the PDP is not obtained in a
timely manner, but in no event later than June 1, 2004, any Party may terminate
the Agreement on or before September 1, 2004, upon thirty days written notice to
all Parties and this Agreement shall be terminated and of no force or effect,
except that, in the event of termination pursuant to this Section, DEVELOPER
shall reimburse RANGEVIEW and PURECYCLE for all administrative, engineering and
attorney fees and expenses incurred by RANGEVIEW and PURECYCLE in pursuing and
planning for water service to the Property prior to such date of termination.
10.02 Termination Contingency.
------------------------
(a) Development Approvals. Development of the Property is contingent upon
---------------------
DEVELOPER obtaining approval from Arapahoe County of a Final Development
Plan ("FDP") for a portion of the Property targeted for initial
development, as identified as "Phase 1 (Neighborhood A-1)" in the PDP. If
said approval of the FDP is not obtained in a timely manner, but in no
event later than twenty four (24) months after the Effective Date of this
Agreement, any Party may terminate the Agreement on or before July 1, 2006
upon thirty days written notice to all Parties.
(b) Water Service Marketability. DEVELOPER has raised concerns about the
----------------------------
marketability of the Property based on the Export Water supply. If the
DEVELOPER is unable to consummate a sale or sales of at least 700 lots to a
nationally recognized homebuilder or homebuilders within 24 months of the
date of approval of the FDP for the Property, due principally to the
homebuilders' or the homebuilder's concern over the Export Water, which
concern must be supported and documented, then the DEVELOPER and AMD shall
be entitled to terminate the Agreement by giving written notice thereof to
RANGEVIEW and PURECYCLE. Termination shall be contingent upon the right of
RANGEVIEW and PURECYCLE to address such documented homebuilder concerns
with engineering evaluations and other documentation as they choose. If
PURECYCLE is unable to persuade the homebuilder or homebuilders to meet
with PURECYCLE and RANGEVIEW to address the documented homebuilder's or
homebuilders' concerns, or to consummate the acquisition of the property as
evidenced by a deed for all or a portion of the property within 60 days of
notice of termination, then this Agreement shall be deemed effectively
terminated on said 60th day.
(c) Water Rights. If AMD or the DEVELOPER are unsatisfied with the
-------------
opinion of water counsel provided pursuant to Section 6.03(e), AMD or the
DEVELOPER shall have the right to terminate this Agreement by giving
written notice to RANGEVIEW and PURECYCLE. In no event shall AMD or the
DEVELOPER have the right to terminate
Page 22 of 55
this Agreement pursuant to this Section after the Board of County
Commissioners of Arapahoe County has approved the PDP.
(d) In the event of termination pursuant to this Section 10.02, PURECYCLE
shall retain ownership of any and all Wholesale Facilities completed,
substantially completed, or as may be under construction at the date of
termination, including any property, rights-of-way and easements required
for their access, operation and maintenance. DEVELOPER shall fully
reimburse PURECYCLE and RANGEVIEW for all direct and indirect costs and
expenses incurred by them in pursuance of their respective obligations
hereunder prior to the date of termination up to a maximum of $100,000.00.
PURECYCLE and RANGEVIEW shall provide DEVELOPER with invoices and canceled
checks evidencing such obligations. The DEVELOPER will reimburse PURECYCLE
and RANGEVIEW within 60 days of receipt of the same.
10.03 Time is of the Essence. Time is of the essence hereof; provided, however,
----------------------
that if the last day permitted or the date otherwise determined for the
performance of any act required or permitted under this Agreement falls on a
Saturday, Sunday or legal holiday, the time for performance shall be extended to
the next succeeding business day, unless otherwise expressly stated.
10.04 Term. This Agreement shall extend in perpetuity unless otherwise
----
terminated as provided for herein.
10.05 Parties Interested Herein. Nothing expressed or implied in this Agreement
-------------------------
is intended or shall be construed to confer upon, or to give to, any Person
other than AMD, DEVELOPER, PURECYCLE and RANGEVIEW, any right, remedy or claim
under or by reason of this Agreement or any covenants, terms, conditions or
provisions thereof. All the covenants, terms, conditions and provisions in this
Agreement by and on behalf of AMD, DEVELOPER, PURECYCLE and RANGEVIEW shall be
for the sole and exclusive benefit of the Parties hereto.
10.06 Covenants Run With the Land. The covenants, terms, conditions and
-------------------------------
provisions set forth in this Agreement shall inure to and be binding upon the
representatives, successors and assigns of the Parties hereto and shall run with
the Property. This Agreement or a Memorandum of Agreement shall be executed by
the Parties and recorded against the Property.
10.07 Notices. Except as otherwise provided herein, all notices or payments
-------
required to be given under this Agreement shall be in writing and shall be
hand-delivered or sent by certified mail, return receipt requested, to the
following addresses:
To AMD: Airpark Metropolitan District
141 Union Boulevard, Suite 150
Lakewood, Colorado 80228-1556
Tel (303)987-0835
Fax (303)987-2032
To DEVELOPER: Icon Investors I, LLC
5299 DTC Boulevard, Suite 815
Page 23 of 55
Greenwood Village, CO 80111
Tel (303)984-9800
Fax (303)984-9874
To PURECYCLE: Pure Cycle Corporation
8451 Delaware Street
Thornton, Colorado 80260
Tel (303)292-3456
Fax (303)292-3475
To RANGEVIEW: Rangeview Metropolitan District
141 Union Boulevard, Suite 150
Lakewood, Colorado 80228-1556
Tel (303)987-0835
Fax (303)987-2032
All notices will be deemed effective one (1) day after hand-delivery or three
(3) days after mailing by registered or certified mail, postage prepaid with
return receipt. Any Party by written notice so provided may change the address
to which future notices shall be sent.
10.08 Severability. If any covenant, term, condition or provision under this
------------
Agreement shall, for any reason, be held to be invalid or unenforceable, the
invalidity or unenforceability of such covenant, term, condition or provision
shall not affect any other provision contained herein, the intention being that
such provisions are severable.
10.09 Counterparts. This Agreement may be executed in one or more counterparts,
------------
each of which shall constitute an original, but all of which shall constitute
one and the same document.
10.10 Amendment. This Agreement may be amended from time to time by agreement
---------
between the Parties hereto; provided, however, that no amendment, modification
or alteration of the terms or provision hereof shall be binding upon either
party unless the same is in writing and duly executed by all Parties hereto.
10.11 Integration. This Agreement constitutes the entire agreement between the
-----------
Parties hereto concerning the subject matter hereof, and all prior negotiations,
representations, contracts, understandings or agreements pertaining to such
matters are merged into and superseded by this Agreement.
10.12 Governing Law. This Agreement arises out of the transaction of business
--------------
in the State of Colorado by the Parties hereto. This Agreement shall be
governed and construed in accordance with the laws of the State of Colorado.
The performance by the Parties hereto of their respective obligations provided
for in this Agreement shall be in strict compliance with all applicable laws and
the rules and regulations of all governmental agencies, municipal, county, state
and federal, having jurisdiction in the premises.
10.13 Assignment. Except for the assignment by AMD to another Title 32
----------
metropolitan district, this Agreement shall not be assignable by any of the
parties hereto, without the prior written consent of all of the other parties,
which consent shall not be unreasonably withheld or
Page 24 of 55
delayed. Any attempted assignment not in accordance with this Section shall be
void and of no force or effect. AMD will provide each of the other parties with
written notice of such permitted assignment.
ARTICLE 11
Insurance, Bonds, and Liens
---------------------------
11.01 Insurance. PURECYCLE shall at all times carry insurance in amounts and
---------
with carriers acceptable to AMD for workers' compensation coverage fully
covering all persons engaged in the performance of this Agreement in accordance
with Colorado law, and for public liability insurance covering death and bodily
injury with limits of not less than $1,500,000 for one person and $5,000,000 for
any one accident or disaster, and property damage coverage with limits of not
less than $500,000, which insurance shall name AMD and the DEVELOPER as
additional insureds.
11.02 Insurance and Bonds of Contractors. PURECYCLE shall cause its contractors
----------------------------------
and subcontractors to maintain adequate insurance and to obtain performance
bonds and labor and materials payments bonds in accordance with all statutory
requirements. Insurance provided by contractors for construction activities to
PURECYCLE must list AMD and the DEVELOPER as additional insureds.
11.03 Liens. With respect to any work to be performed by PURECYCLE and/or
-----
RANGEVIEW on the Property, the party performing the actual work shall protect
the Property from mechanic's liens, and shall indemnify the DEVELOPER and any
other property owner from and against and with respect to any such liens which
attach to such Property or easements rights and shall cause any such lien to be
removed as a lien within thirty (30) days of recording thereof.
11.04 Indemnification. Any party entering upon any other party's property
---------------
pursuant to the rights granted under this Agreement or otherwise in connection
herewith including, without limitation, for purposes of constructing any of the
Water Facilities, including any of the Special Facilities, to the extent
permitted by law, hereby indemnifies and saves the other party harmless from and
against any and all loss, liability, damage, claim, fee, penalty, cost or
expense (including court costs and reasonable attorneys' fees) arising out of or
related to any entry by said party, its agents, employees, officers,
contractors, tenants, licensees or invitees (collectively, the "Indemnifying
Parties") onto said other party's property including, without limitation, any
and all construction, installation, utility connection or other work or activity
performed thereon, the exercise of its rights pursuant to this Agreement, or
arising out of the negligent acts or omissions of said Indemnifying Parties
incurred by or asserted against said other party, its officers, employees,
agents, representatives, lessees, contractors, licensees or invitees.
[SIGNATURE PAGE AND EXHIBITS FOLLOW]
Page 25 of 55
Airpark Metropolitan District
By:
------------------------------------------
Andrew R. Klein, President
ATTEST:
By:
------------------------------
Otis C. Moore, III, Director
(SEAL)
Icon Investors I, LLC, a Colorado Limited
Liability Company
By: Airway Park Manager, LLC, a Colorado
limited liability company
By:
-------------------------------------
Andrew R. Klein, its Manager
Pure Cycle Corporation, a Delaware
Corporation
By:
------------------------------------------
Mark Harding, President
ATTEST:
By:
------------------------------
Scott Lehman, Secretary
(SEAL)
Page 26 of 55
Rangeview Metropolitan District
By:
------------------------------------------
Thomas P. Clark, Director
ATTEST:
By:
------------------------------
Tom Lamm, Assistant Secretary
(SEAL)
STATE OF COLORADO )
) ss.
COUNTY OF ____________________ )
The foregoing instrument was acknowledged before me this ______ day of
November, 2003, by Andrew R. Klein, as President, and by Otis C. Moore, III, as
Director, of Airpark Metropolitan District.
Witness my hand and official seal.
My commission expires: ________________________
-------------------------------------
Notary Public
( S E A L )
Page 27 of 55
STATE OF COLORADO )
) ss.
COUNTY OF ____________________ )
The foregoing instrument was acknowledged before me this ______ day of
November, 2003, by Andrew R. Klein, as Manager of Airway Park Manager, LLC, a
Colorado limited liability company, as Manger of ICON INVESTORS I, LLC
Witness my hand and official seal.
My commission expires: ________________________
-------------------------------------
Notary Public
( S E A L )
STATE OF COLORADO )
) ss.
COUNTY OF ____________________ )
The foregoing instrument was acknowledged before me this ______ day of
November, 2003, by Mark Harding, as President, and Scott Lehman, as Secretary,
of Pure Cycle Corporation, a Delaware corporation.
Witness my hand and official seal.
My commission expires: ________________________
-------------------------------------
Notary Public
( S E A L )
Page 28 of 55
STATE OF COLORADO )
) ss.
COUNTY OF ____________________ )
The foregoing instrument was acknowledged before me this ______ day of
November, 2003, by Thomas P. Clark, as Director, and Tom Lamm, as Assistant
Secretary, of Rangeview Metropolitan District, acting by and through its water
activity enterprise.
Witness my hand and official seal.
My commission expires: ________________________
-------------------------------------
Notary Public
( S E A L )
Page 29 of 55
EXHIBIT A
DESCRIPTION OF PROPERTY
A Replat of Lots 1 thru 16, Lots 17 thru 28, and Lots 30 thru 32 of Montclair
Gardens Second Filing and unplatted parcels of land located in the West Half of
Section 3, the Southeast Quarter of Section 4, and the East Half of Section 10,
all in Township 4 South, Range 65 West of the 6th Principal Meridian, Arapahoe
County, Colorado, and all as more particularly described on Sheet 1 of the
Preliminary Plat for Sky Ranch, prepared by Vision Land Consultants, Inc., and
dated 8/23/2003.
The Property occupies 772.3 acres, more or less, which includes about 6.7 acres
of property to be vacated as rights-of-way to Arapahoe County.
Page 30 of 55
EXHIBIT B
WASTEWATER TERMS SHEET
A. DESCRIPTION: Airpark Metropolitan District (AMD) shall arrange for the
collection and treatment of wastewater from the Property and shall arrange
for the treated wastewater to be available to PURECYCLE for use in
PURECYCLE's reclaimed water system ("Reclaimed Water System").
B. GENERAL: All wastewater treatment and collection obligations established
herein, except the Reclaimed Water System, shall be assumed and executed by
AMD at no cost to PURECYCLE unless specifically provided for otherwise
herein.
C. WASTEWATER PERMITTING: AMD shall be responsible for obtaining regulatory
approval for the construction of the wastewater treatment plant ("WWTP") or
connection to a wastewater treatment facility not on the Property.
D. DOMINION OVER WATER: PURECYCLE will maintain ownership and dominion over
all treated wastewater (after consumptive use treatment losses), except for
the treated wastewater from the Foxridge Farms mobile home park or other
sites or projects which are not part of the Property ("PURECYCLE Treated
Wastewater"). PURECYCLE intends to use and reuse the PURECYCLE Treated
Wastewater for irrigation, augmentation, storage, exchange and other
purposes until extinction. Wastewater treatment plant inflows from the
Property will be metered, recorded and totalized and consumptive losses
shall be determined to quantify the PURECYCLE Treated Wastewater and
PURECYCLE shall be provided with a monthly accounting of the wastewater
inflows from the Property. The flow metering equipment for inflows from the
Property shall be maintained in good and operating condition. PURECYCLE
will be allowed access to inspect the metering equipment and may request,
no more frequently than annually, a calibration of the metering equipment
by AMD which costs shall be paid by PURECYCLE.
E. POINT OF DELIVERY: The PURECYCLE Treated Wastewater shall be delivered to
a mutually acceptable point at Planning Tract B7 identified on the PDP (the
"Point of Delivery") for use in the Reclaimed Water System. Unless other
mutually satisfactory arrangements are made, any of the PURECYCLE Treated
Wastewater not delivered to PURECYCLE for the Reclaimed Water System, shall
be discharged to First Creek to the benefit of PURECYCLE.
F. WASTEWATER TREATMENT AND TREATED WASTEWATER QUALITY: Wastewater from the
Property shall be treated with secondary treatment, filtration and
disinfection processes, which shall meet the following criteria at the
outlet of the WWTP:
Page 31 of 55
30-day average 7-day average
-------------- --------------
a. Biochemical Oxygen Demand (5-day) 30 mg/l 45 mg/l
b. Fecal Coliform 200 per 100 ml 400 per 100 ml
c. Total Ammonia 8 mg/l 16 mg/l
AMD or the wastewater treatment operator shall notify PURECYCLE in the
event of a process upset, equipment malfunction, or other problem that
results or reasonably could result in the delivery of inadequately treated
wastewater, and PURECYCLE shall advise AMD whether the treated wastewater
should be delivered to the RWPS or discharged.
G. RECLAIMED WATER SYSTEM: PURECYCLE shall be responsible for obtaining all
regulatory approvals and permits necessary for the use of PURECYCLE Treated
Wastewater in the Reclaimed Water System. AMD or the wastewater treatment
operators shall provide wastewater treatment information, monitoring
reports, and other information in the possession of AMD or the operators as
may reasonably be requested by PURECYCLE for PURECYCLE's administration,
operation, monitoring and reporting obligations for the Reclaimed Water
System. However, nothing herein shall require AMD or the operators to
conduct additional monitoring, collect data or prepare reports that are not
otherwise required for the WWTP's regular reporting nor on a schedule other
than would be required for WWTP reporting for it's discharge permit.
H. RECLAIMED WATER PUMP STATION: AMD shall provide rights-of-way and
easements at mutually acceptable locations for PURECYCLE to construct,
modify, access, operate and maintain a Reclaimed Water Pump Station
("RWPS") at the Point of Delivery and for the associated pipelines.
Notwithstanding other provisions herein, including but not limited to the
objectives below, nothing in this Agreement shall be construed to require
AMD to provide PURECYCLE Treated Wastewater flows that exceeds the
quantities, volumes, hydraulic head, quality reasonably achievable with the
volume, quantity and quality of inflow treated wastewater and the WWTP and
facilities then existing::
a. PURECYCLE's Treated Wastewater shall be delivered with a hydraulic
head of not less than three feet below the proposed finished grade at
and around the Point of Delivery.
b. PURECYCLE's Treated Wastewater shall be delivered at a flow equalized
rate not exceeding 150% of the design day wastewater flow rate
assigned to serve customers on the Property.
c. PURECYCLE's Treated Wastewater shall be delivered more or less
contemporaneously with the wastewater flows from the Property.
d. Truck access to the RWPS shall be reasonably provided by the overall
layout of any other facilities which AMD intends to locate on Planning
Tract B7.
AMD shall allow PURECYCLE unrestricted access to the RWPS and associated
pipelines. PURECYCLE will provide a copy of the construction plans for the
reclaimed water pump
Page 32 of 55
station to AMD for review and approval, which approval shall not be
unreasonably withheld.
I. WASTEWATER SERVICE TO PURECYCLE. AMD shall provide PURECYCLE with
treatment of the residuals from it's reclaimed water treatment plant,(1)
provided the quantity of such flows shall not exceed 5% of the WWTP
capacity and shall not cause AMD to exceed permitted hydraulic capacity for
the WWTP, and (2) the quality of such flows shall not cause upsets,
bypassed or other interference with the normal operations of the WWTP.
AMD may charge PURECYCLE its regular rates, as established from time to
time, for wastewater treatment. Usage charges shall be based on the metered
flow of wastewater from each of PURECYCLE's water treatment plants.
PURECYCLE shall not be assessed any sewer system development fees or other
charges for connecting the water treatment plants to the wastewater system,
unless treatment of PURECYCLE's wastewater requires special operations,
systems or additional processes, in which cases PURECYCLE shall be
responsible for all such costs. Notwithstanding the foregoing, PURECYCLE
agrees to fully comply with all provisions of AMD's pretreatment program
and shall be fully responsible for all fees, penalties and liabilities
arising from PURECYCLE's failure to comply with pretreatment requirements.
Page 33 of 55
EXHIBIT C
WATER SERVICE SCHEDULE, WATER TAP TAKEDOWN SCHEDULE, SPECIAL FACILITIES
SCHEDULE, AND WATER SYSTEM DEMAND ESTIMATES
WATER SERVICE SCHEDULE
In accordance with Section 3.02 of the Agreement, PURECYCLE shall endeavor to
cause the below-described Wholesale Facilities to be constructed in accordance
with the schedule shown below:
1. Phase Zero - Completion of Wholesale Water Facilities sufficient to furnish
non-potable construction water near the well and at a flow rate not
exceeding the production capacity from the initial Denver Basin well to be
drilled at the northern Dedicated Groundwater wellfield ("Construction
Water") not later than six months after the date of DEVELOPER's request for
construction water, or within thirty days after the date that electric
power is extended to or otherwise made available to the well-site,
whichever shall last occur.
2. Phase One - Completion of Wholesale Water Facilities sufficient to provide
potable water service including municipal-level fire protection flows
("Municipal Water Service"); not later than nine months after the
DEVELOPER's request for Municipal Water Service. The DEVELOPER may not
request Municipal Water Service without the prior or concurrent request for
Construction Water.
3. Completion of subsequent phases and construction of additional Wholesale
Water Facilities as required to provide water service to the developing
Property in general conformance with the Water Tap Takedown Schedule
described herein.
WATER TAP TAKEDOWN SCHEDULE
In accordance with Section 4.02 of the Agreement, DEVELOPER agrees to purchase
the minimum number of Water Taps described or shown below on or before the
schedule or development milestone described and shown below. DEVELOPER may
purchase additional Water Taps (up to a maximum number of 4,000 EQR) or may
purchase Water Taps at an accelerated schedule provided that, in the judgment of
PURECYCLE, water facilities are available or can be made available in a
commercially reasonable manner by PURECYCLE to accommodate the demands of the
additional Customers.
(i) Twenty (20) Water Taps to be purchased 60 days after the date that the
Preliminary Development Plan is recorded by Arapahoe County.
(ii) An additional eighty (80) Water Taps to be purchased upon the
DEVELOPER's request to PURECYCLE for Construction Water, resulting in
a total of 100 Water Taps purchased.
(iii) An additional fifty six (56) Water Taps to be purchased upon the
DEVELOPER's request to PURECYCLE for Municipal Water Service,
resulting in a total of 156 Water Taps purchased.
Page 34 of 55
(iv) An additional two hundred forty four (244) Water Taps to be purchased
within 90 days following the DEVELOPER's request for Municipal Water
Service, resulting in a total of 400 Water Taps purchased. The date
that Municipal Water Service is made available by PURECYCLE, as
evidenced by a certification letter from PURECYCLE to DEVELOPER, shall
be the anniversary date ("Anniversary") for subsequent minimum tap
purchases and certain other actions described herein.
(v) An additional two hundred and fifty (250) Water Taps to be purchased
on the first Anniversary and each subsequent Anniversary through the
twelfth (12th) Anniversary, or until a total of 4,000 Water Taps are
purchased, whichever is earlier. If the DEVELOPER has not purchased
4,000 Water Taps on the twelfth Anniversary, PURECYCLE shall not be
obligated to sell additional Water Taps to the Property or to reserve
Export Water to serve these additional Water Taps.
Table C-1 summarizes required minimum Water Tap purchases by DEVELOPER, along
with the schedule or development milestone for each takedown.
- -----------------------------------------------------------------------------------------
TABLE C-1 WATER TAP TAKEDOWN SCHEDULE
- -----------------------------------------------------------------------------------------
Scheduled Tap Minimum Tap
Takedown Takedown
------------------------------------------
EQR Per Cumulative EQR Per Cumulative
Development Milestone or Schedule Takedown EQR Takedown EQR
- -----------------------------------------------------------------------------------------
60 days after PDP Approval by Arapahoe County 20 20 20 20
- -----------------------------------------------------------------------------------------
DEVELOPER's Request for Construction Water 80 100 80 100
- -----------------------------------------------------------------------------------------
DEVELOPER's Request for Municipal Water
Service 56 156 56 156
- -----------------------------------------------------------------------------------------
90 days after DEVELOPER's Request for
Municipal Water Service 244 400 244 400
- -----------------------------------------------------------------------------------------
1st Anniversary of Municipal Water Service 400 800 250 650
- -----------------------------------------------------------------------------------------
2nd Anniversary of Municipal Water Service 400 1,200 250 900
- -----------------------------------------------------------------------------------------
3rd Anniversary of Municipal Water Service 400 1,600 250 1,150
- -----------------------------------------------------------------------------------------
4th Anniversary of Municipal Water Service 400 2,000 250 1,400
- -----------------------------------------------------------------------------------------
5th Anniversary of Municipal Water Service 400 2,400 250 1,650
- -----------------------------------------------------------------------------------------
6th Anniversary of Municipal Water Service 400 2,800 250 1,900
- -----------------------------------------------------------------------------------------
7th Anniversary of Municipal Water Service 400 3,200 250 2,150
- -----------------------------------------------------------------------------------------
8th Anniversary of Municipal Water Service 400 3,600 250 2,400
- -----------------------------------------------------------------------------------------
9th Anniversary of Municipal Water Service 400 4,000 250 2,650
- -----------------------------------------------------------------------------------------
10th Anniversary of Municipal Water Service 250 2,900
- -----------------------------------------------------------------------------------------
11th Anniversary of Municipal Water Service 250 3,150
- -----------------------------------------------------------------------------------------
12th Anniversary of Municipal Water Service 250 3,400
- -----------------------------------------------------------------------------------------
Page 35 of 55
SPECIAL FACILITIES SCHEDULE
DEVELOPER and AMD shall participate with the construction of Special Facilities
in accordance with Section 4.03 of the Agreement. Table C-2 shows the schedule
for the Special Facilities anticipated for the Property and PURECYCLE shall
endeavor to have each Special Facility fully operational in accordance with the
schedule.
- ---------------------------------------------------------------------------------------------
TABLE C-2 SPECIAL FACILITIES SCHEDULE
- ---------------------------------------------------------------------------------------------
Special Facility Development Milestone or Schedule
- ---------------------------------------------------------------------------------------------
"A" - Interim use of irrigation facilities for
potable service Municipal Water Service
- ---------------------------------------------------------------------------------------------
"B" - Effluent reservoir site Second Anniversary of Municipal Water Service
- ---------------------------------------------------------------------------------------------
"C" - Offsite Water Transmission Pipeline DEVELOPER's Purchase of 1,500 Water Taps
- ---------------------------------------------------------------------------------------------
"D" - Separate Wastewater Service Provider Use of Reclaimed Water for Irrigation
- ---------------------------------------------------------------------------------------------
WATER SYSTEM DEMAND ESTIMATES
Development of the Water Facilities is to be phased. PURECYCLE has undertaken
the planning and design of the Water Facilities to provide domestic water
service for the Property's anticipated Customers based, in part, on the
development schedule and other information provided by DEVELOPER and AMD.
PURECYCLE shall use commercially reasonable efforts to provide sufficient and
adequate water service to accommodate water demands in excess of those necessary
to serve the Water Taps provided for in Table C-1. In the event that there is
inadequate capacity to satisfy excess demands, PURECYCLE reserves the right to
restrict issuance of Water Taps to those provided for in Table C-1.
Page 36 of 55
EXHIBIT D
WATER RIGHTS SPECIAL WARRANTY DEED
This Water Rights Special Warranty Deed is made and given effective ___________,
200_, by and from __________________________, a _____________________________,
whose address is _________________________________________________________
("Grantor"), to PURECYCLE CORPORATION, a Delaware Corporation, whose address is
8451 Delaware Street, Thornton CO 80260 ("Grantee").
Grantor hereby sells, conveys, and assigns to Grantee all of Grantor's water
rights, title and related rights and interests of every kind in and to 443
acre-feet per year of nontributary groundwater from the Upper Arapahoe, Lower
Arapahoe and Laramie-Fox Hills aquifers underlying the lands described on
Exhibit A attached hereto (the "Property"), in the following proportions: (1)
158 acre-feet per year from the Upper Arapahoe aquifer, (2) 105 acre-feet per
year from the Lower Arapahoe aquifer, and (3) 180 acre-feet per year from the
Laramie-Fox Hills aquifer (collectively the "Dedicated Groundwater"). The
Dedicated Groundwater conveyed herein was decreed in Case No. 85CW157 in the
Water Court for Water Division No. 1, State to Colorado.
Grantor hereby expressly reserves all of its rights, title and interests in and
to all non-tributary waters in the Denver aquifer underlying or appurtenant to
the Property and related interests not conveyed herein to Grantee.
Grantor further warrants the title and agrees to defend quiet and peaceable
possession of the Dedicated Groundwater against all and every person or persons
claiming title by, through or under Grantor.
Date this _________ day of ______________, 200_.
___________________________
Attest:
By: __________________________________ By: ________________________________
Its: _________________________________ Title:______________________________
Page 37 of 55
STATE OF COLORADO )
) ss.
COUNTY OF ____________________ )
The foregoing instrument was acknowledged before me this ______ day of
__________, 2003, by _______________________, as ______________, and by
____________________________, as _______________, of ____________________, a
__________________________________.
Witness my hand and official seal.
My commission expires: ________________________
-------------------------------------
Notary Public
( S E A L )
Page 38 of 55
EXHIBIT E
FEES, RATES AND CHARGES
RANGEVIEW's Water Tap Fee and water service charges as of the Effective Date of
this Agreement are listed following for information purposes.
Water Tap Fee: 3,400 per EQR Water Resource Charge
7,750 per EQR Water System Development Charge
-----
11,150 per EQR combined Water Tap Fee
Potable Water Service Charges: $11.11 per month per EQR base fee
(plus) $2.26 per 1,000 gallons used for up to 10,000 gallons
per billing cycle month (1)
(plus) $2.90 per 1,000 gallons from 10,000 gallons up to 20,000
gallons used per billing cycle month
(plus) $6.31 per 1,000 gallons over 20,000 gallons used per billing
cycle month
Irrigation Tap Fee: No separate tap fee for typical residential
Customers
Same as Water Tap Fee for other Customers
Irrigation Water Service Charges: No separate base fee for typical
residential Customers
Base fee same as that for potable water service for other Customers
(plus) $1.92 per 1,000 gallons used for up to 10,000 gallons
per billing cycle month
(plus) $2.46 per 1,000 gallons from 10,000 gallons up to 20,000
gallons used per billing cycle month
(plus) $5.36 per 1,000 gallons over 20,000 gallons used per billing
cycle month
_______________
(1) Gallons per billing cycle month are for combined potable and irrigation use
where customers are provided service from both systems.
Page 39 of 55
EXHIBIT F
OPTION AGREEMENT FOR EXPORT WATER SERVICE
for the
SKY RANCH PUD
THIS OPTION AGREEMENT FOR EXPORT WATER SERVICE ("Agreement") is entered
into this ______ day of October, 2003 by and between ICON INVESTORS I, LLC, a
Colorado limited liability company ("DEVELOPER"); and PURE CYCLE CORPORATION, a
Delaware corporation ("PURECYCLE").
RECITALS
WHEREAS, urban density development in general accordance with the
"Preliminary Development Plan" (Arapahoe County Case No. Z01-010) is proposed
for the Sky Ranch PUD ("Property"). The Property occupies about 772.3 acres
generally located south of Interstate-70 frontage road, north of Alameda Avenue,
west of Hayesmont Road, and east of Powhaton Road in unincorporated Arapahoe
County Colorado.
WHEREAS, the Property can be so developed only if adequate and sufficient
domestic water service is provided thereto.
WHEREAS, the Property is owned by the DEVELOPER and one of the obligations
of the DEVELOPER is to provide domestic water service.
WHEREAS, in order to facilitate future development of the Property, the
DEVELOPER desires to enter into an agreement with PURECYCLE to secure an option
to acquire water service to the Property, under the terms set forth below.
WHEREAS, subject to the terms and conditions of the Amended and Restated
Lease Agreement ("Lease") dated April 4, 1996 between the State of Colorado
Board of Land Commissioners ("Land Board") and RANGEVIEW METROPOLITAN DISTRICT,
a quasi-municipal corporation and political subdivision of the State of
Colorado, acting by and through its Water Activity Enterprise ("RANGEVIEW"), and
the Agreement for Sale of Export Water ("Export Water Agreement") dated April
11, 1996 between PURECYCLE and RANGEVIEW, the Land Board conveyed to RANGEVIEW,
which subsequently conveyed to PURECYCLE, certain rights to surface water and
groundwater on and beneath the Land Board's property known as the Lowry Range,
which water rights are more specifically outlined in Section 6.1 of the Lease.
WHEREAS, simultaneously herewith, the DEVELOPER, PURECYCLE, RANGEVIEW, and
AIRPARK METROPOLITAN DISTRICT, a quasi-municipal corporation and political
subdivision of the State of Colorado ("AMD") are entering into a Water Service
Agreement ("Service Agreement") which provides for RANGEVIEW and PURECYCLE to
provide water service to the Property.
Page 40 of 55
WHEREAS, PURECYCLE is capable of providing domestic water service to the
Property subject to the terms and conditions of the Lease.
WHEREAS, the execution of this Agreement will serve a public purpose and
promote the health, safety, prosperity and general welfare by providing for the
planned and orderly provision of domestic water service.
NOW THEREFORE, in consideration of the above recitals, the mutual promises
and covenants herein contained, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, DEVELOPER and
PURECYCLE hereby agree as follows:
ARTICLE 1
DEFINITIONS AND INTERPRETATIONS
-------------------------------
1.01 Definitions. All terms which are not defined herein shall have the meaning
assigned to them in the Service Agreement. As used herein unless the context
indicates otherwise, the words defined below and capitalized throughout the text
of this Agreement shall have the respective meanings set forth below:
(a) Anniversary: The annual recurrence of the date falling sixty (60)
-----------
days after the date that the Preliminary Development Plan for the Property
is recorded by Arapahoe County and which is the basis for the making of
payments and for certain other actions under this Agreement.
(b) Dedicated Export Water: The Dedicated Export Water is the Export
------------------------
Water subject to this Agreement as defined in Section 2.01 herein.
(c) Effective Date: The Effective Date of this Agreement as defined in
---------------
Section 4.01 herein.
(d) Equivalent Residential Unit (EQR): The measure of demand placed
-----------------------------------
upon the water facilities servicing the Property by a typical and average
single-family detached residence, as determined under RANGEVIEW's Rules and
Regulations.
(e) Export Water: Water from the Lowry Range that PURECYCLE can use
-------------
outside of the Lowry Range service area, as more specifically defined in
Section 6.1 of the Lease.
(f) Export Water Deed: The Bargain and Sale Deed for the Export Water
-------------------
among the Land Board, RANGEVIEW and PURECYCLE executed April 11, 1996, as
recorded on July 31, 1996 at Reception No. A6097803 in the Arapahoe County
Clerk and Recorder's Office, together with any and all amendments
subsequently entered into by the said parties.
(g) Lease: The Amended and Restated Lease Agreement between RANGEVIEW and
-----
the State of Colorado, acting by and through the Land Board (Lease No.
S-37280), executed April 4, 1996, as recorded on July 31, 1996 at Reception
No. A6097802 in the
Page 41 of 55
Arapahoe County Clerk and Recorder's Office, together with any and all
amendments subsequently entered into by the said parties.
(h) Rules and Regulations: The Rules and Regulations adopted by
-----------------------
RANGEVIEW, as they may be adopted or amended from time to time.
(i) Water Tap: The written authorization, in the form of sequentially
----------
numbered tap licenses issued by PURECYCLE, to connect to PURECYCLE's water
facilities, as governed by RANGEVIEW's Rules and Regulations.
(j) Water Tap Fee: Collective reference to the Water System Development
---------------
Charge and the Water Resource Charge, both as defined and established in
Article 12 of RANGEVIEW's Rules and Regulations.
1.02 Interpretation. In this Agreement, unless the context otherwise requires:
--------------
(a) The terms "herein," "hereunder," "hereby," "hereto," "hereof" and any
similar term, refer to this Agreement as a whole and not to any particular
Article, Section or subdivision hereof; the term "heretofore" means before
the date of execution of this Agreement; the term "now" means at the date
of execution of this Agreement; and the term "hereafter" means after the
date of execution of this Agreement.
(b) All definitions, terms and words shall include both the singular and
the plural.
(c) Words of the masculine gender include correlative words of the
feminine and neuter genders, and words importing the singular number
include the plural number and vice versa.
(d) The captions or headings of this Agreement are for convenience only
and in no way define, limit or describe the scope or intent of any
provision, Article or Section of this Agreement.
ARTICLE 2
OPTION TERMS
------------
2.01 Option. In consideration for the payment of the option fee pursuant to the
------
schedule set forth in 2.02 (the "Option Fee") by the DEVELOPER to PURECYCLE,
PURECYCLE shall grant and convey to DEVELOPER an option (the "Option") to
purchase Water Taps for customers on the Property beyond 1,500 EQR and up to a
total of 4,000 EQR. One Thousand Two Hundred (1,200) acre-feet per year of the
Export Water (the "Dedicated Export Water") shall be so reserved by PURECYCLE.
The valuation for the Dedicated Export Water shall be set forth in accordance
with Section 2.05. The DEVELOPER shall be authorized to exercise the Option
beginning upon the Effective Date and expiring on the earliest date described
following:
(a) date on which the DEVELOPER has purchased Water Taps for 1,500
Equivalent Residential Units ("EQR") on the Property; or
Page 42 of 55
(b) at 5:00 p.m. on the fifth (5th), sixth (6th), or seventh (7th)
Anniversary, unless in each case the DEVELOPER extends the option in
accordance with Section 2.03;
(c) at 5:00 p.m. on the eighth (8th) Anniversary.
PURECYCLE's obligations to convey and deliver Export Water to the DEVELOPER
shall be expressly subject to the terms and conditions of the Export Water Deed.
2.02 Payment Terms. The Option Fee shall be payable by the DEVELOPER to
--------------
PURECYCLE in cash, by wire transfer or by certified check with payments being
made directly to the trust account of Davis Graham & Stubbs LLP as follows:
(a) Fifty Thousand Dollars ($50,000) payable 60 days after the date that
the Preliminary Development Plan is recorded by Arapahoe County;
(b) Fifty Thousand Dollars ($50,000) payable on each of the first, second,
third and fourth Anniversary unless the Option is exercised prior to such
anniversary date, in which case no further Option Fee shall be due.
2.03 Extension of Option. In the event that the DEVELOPER has not exercised the
-------------------
Option in accordance with Section 2.01, the DEVELOPER may extend the Option for
up to an additional three one-year terms by making payments to PURECYCLE of One
Hundred Thousand Dollars ($100,000) (the Option Extension Fee) for each
additional one-year extension term. Payments shall be due on the fifth
Anniversary for a one year extension, on the fifth and sixth Anniversaries for a
two year extension, and on the fifth, sixth and seventh Anniversaries for a
three year extension.
2.04 Exercise Terms. The Option shall be exercised by the DEVELOPER delivering
--------------
to PURECYCLE written notice of its intent to proceed with development beyond
1,500 EQR, provided such notice is delivered during the term of the Option and
the DEVELOPER is then in compliance with any other contracts between the
DEVELOPER and PURECYCLE and/or RANGEVIEW. Upon the DEVELOPER's exercise of the
Option, PURECYCLE shall reserve the Dedicated Export Water for use on the
Property and shall diligently complete construction of the facilities necessary
to deliver the Dedicated Export Water to the Property, and PURECYCLE will
provide domestic water service to the Property in accordance with the Service
Agreement.
2.05 Dedicated Export Water Valuation. The value of the Dedicated Export Water
--------------------------------
shall be calculated based on RANGEVIEW's Rules and Regulations in effect at the
time of exercise. The Rules and Regulations establish an allocation of 0.7
acre-feet per year per EQR. The 1,200 acre-feet per year of Dedicated Export
Water is allocated to 1,714 EQR's which, when multiplied by the current Water
Resource Charge of $3,400 per EQR, results in a total valuation of $5,827,600.
Upon receipt of the payment of the Water Resource Charge for each tap, PURECYCLE
will provide evidence to DEVELOPER that the Export Water associated with such
tap has been released from any encumbrances.
2.06 Termination of Option. PURECYCLE shall have the right to terminate this
-----------------------
Agreement if the DEVELOPER fails to pay any portion of the Option Fee or any
Option Extension Fee when due, unless such failure is cured within thirty (30)
days by the DEVELOPER making
Page 43 of 55
payment of all amounts due, plus interest at the rate of (10%) per annum from
the date of default to the date of payment, and payment of all costs incurred by
PURECYCLE as a result of the default, including but not limited to attorneys'
fees.
ARTICLE 3
REPRESENTATIONS, WARRANTIES AND COVENANTS
-----------------------------------------
3.01 DEVELOPER Representations and Covenants. In addition to the other
------------------------------------------
representations, warranties and covenants made by the DEVELOPER herein, the
DEVELOPER makes the following representations, warranties and covenants to
PURECYCLE:
(a) The DEVELOPER is duly authorized to execute this Agreement and perform
its obligations hereunder, and all action on its part for the execution and
delivery of this Agreement has been or will be duly and effectively taken.
(b) Neither the execution of this Agreement, the consummation of the
transactions contemplated hereunder, nor the fulfillment of or the
compliance with the terms and conditions of this Agreement by the DEVELOPER
will conflict with or result in a breach of any terms, conditions or
provisions of, or constitute a default under, or result in the imposition
of any prohibited lien, charge or encumbrance of any nature under any
agreement, instrument, indenture or any judgment, order or decree to which
the DEVELOPER is a party or by which the DEVELOPER or the Property are
bound.
3.02 PURECYCLE Representations and Covenants. In addition to the other
------------------------------------------
representations, warranties and covenants made by PURECYCLE herein, PURECYCLE
makes the following representations, warranties and covenants to AMD:
(a) PURECYCLE is duly authorized to execute this Agreement and perform its
obligations hereunder, and all action on its part for the execution and
delivery of this Agreement has been or will be duly and effectively taken.
(b) Neither the execution of this Agreement, the consummation of the
transactions contemplated hereunder, nor the fulfillment of or the
compliance with the terms and conditions of this Agreement by PURECYCLE
will conflict with or result in a breach of any terms, conditions or
provisions of, or constitute a default under, the Export Water Agreement,
the Export Water Deed, or any other mortgage, indenture or other instrument
to which PURECYCLE is a party or by which it is bound, or result in the
imposition of any prohibited lien, charge or encumbrance of any nature
under any agreement, instrument, indenture or any judgment, order or decree
of any court to which PURECYCLE is a party or by which PURECYCLE is bound.
3.03 Instruments of Further Assurance. The DEVELOPER and PURECYCLE covenant
-----------------------------------
that they will do, execute, acknowledge and deliver, or cause to be done,
executed, acknowledged and delivered, such acts, instruments and transfers as
may reasonably be required for the performance of their obligations hereunder.
Page 44 of 55
ARTICLE 4
MISCELLANEOUS PROVISIONS
------------------------
4.01 Effective Date; Contingency. This Agreement shall be in full force and
-----------------------------
effect and be legally binding on the date it is fully executed and delivered by
the Parties hereto and upon the meeting of the contingency described immediately
below. This entire Agreement is expressly contingent upon approval from
Arapahoe County of the Preliminary Development Plan ("PDP"), County Case Number
Z01-010. If said approval of the PDP is not obtained in a timely manner, but in
no event later than June 1, 2004, either party may terminate the Agreement on
or before September 1, 2004, upon thirty days written notice to the other party
and this Agreement shall be terminated and of no force or effect, except that,
in the event of termination pursuant to this Section, DEVELOPER shall reimburse
PURECYCLE for all administrative, engineering and attorney fees and expenses
incurred by PURECYCLE in pursuing and planning for water service to the Property
prior to such date of termination.
4.02 Savings Clause. If any provision of this Agreement causes a breach or
---------------
violation of the Lease or the Export Water Deed, the parties shall work together
to revise such provision so that it no longer causes such breach or violation.
4.03 Time is of the Essence. Time is of the essence hereof; provided, however,
----------------------
that if the last day permitted or the date otherwise determined for the
performance of any act required or permitted under this Agreement falls on a
Saturday, Sunday or legal holiday, the time for performance shall be extended to
the next succeeding business day, unless otherwise expressly stated.
4.04 Parties Interested Herein. Nothing expressed or implied in this Agreement
-------------------------
is intended or shall be construed to confer upon, or to give to, any person
other than PURECYCLE and the DEVELOPER, any right, remedy or claim under or by
reason of this Agreement or any covenants, terms, conditions or provisions
hereof. All the covenants, terms, conditions and provisions in this Agreement
by and on behalf of PURECYCLE and the DEVELOPER shall be for the sole and
exclusive benefit of the parties hereto.
4.05 Covenants Run With the Land. The covenants, terms, conditions and
-------------------------------
provisions set forth in this Agreement shall inure to and be binding upon the
representatives, successors and assigns of the parties hereto and shall run with
the Property. This Agreement or a Memorandum of Agreement may be executed by
the parties and recorded against the Property.
4.06 Notices. Except as otherwise provided herein, all notices or payments
-------
required to be given under this Agreement shall be in writing and shall be
hand-delivered or sent by certified mail, return receipt requested, to the
following addresses:
To PURECYCLE: Pure Cycle Corporation
8451 Delaware Street
Thornton, Colorado 80260
Tel (303)292-3456
Fax (303)292-3475
Page 45 of 55
To DEVELOPER: Icon Investors I, LLC
5299 DTC Boulevard, Suite 815
Greenwood Village, CO 80111
Tel (303)984-9800
Fax (303)984-9874
All notices will be deemed effective one (1) day after hand-delivery or three
(3) days after mailing by registered or certified mail, postage prepaid with
return receipt. Any party by written notice to provided may change the address
to which future notices shall be sent.
4.07 Severability. If any covenant, term, condition or provision under this
------------
Agreement shall, for any reason, be held to be invalid or unenforceable, the
invalidity or unenforceability of such covenant, term, condition or provision
shall not affect any other provision contained herein, the intention being that
such provisions are severable.
4.08 Counterparts. This Agreement may be executed in one or more counterparts,
------------
each of which shall constitute an original, but all of which shall constitute
one and the same document.
4.09 Amendment. This Agreement may be amended from time to time by agreement
---------
between the Parties hereto; provided, however, that no amendment, modification
or alteration of the terms or provision hereof shall be binding upon either
party unless the same is in writing and duly executed by all parties hereto.
4.10 Governing Law. This Agreement arises out of the transaction of business in
-------------
the State of Colorado by the parties hereto. This Agreement shall be governed
and construed in accordance with the laws of the State of Colorado. The
performance by the parties hereto of their respective obligations provided for
in this Agreement shall be in strict compliance with all applicable laws and the
rules and regulations of all governmental agencies, municipal, county, state and
federal, having jurisdiction in the premises.
4.11 Assignment. DEVELOPER may assign their rights and obligations under this
----------
Option Agreement for Export Water Service to another entity with the prior
written consent of PURECYCLE, which consent shall not be unreasonably withheld
or delayed.
4.12 Enforcement. The parties agree that this Agreement may be enforced in law
-----------
or equity, for specific performance, mandamus, injunctive or other appropriate
relief, including damages, as may be available according to the laws and
statutes of the State of Colorado.
4.13 Service Agreement. The parties agree that all of the terms and provisions
-----------------
of the Service Agreement are incorporated herein by this reference. To the
extent there is any conflict between the provisions of this Agreement and the
Service Agreement, the Service Agreement shall control.
4.14 Attorneys' Fees. In the event either party finds it necessary to employ
----------------
legal counsel or to bring an action at law or other proceeding against the other
party to enforce any of the terms, covenants, or conditions of this Agreement,
the party prevailing in any such action or other proceeding shall be paid all
reasonable attorneys' fees by the other party, and in the event any
Page 46 of 55
judgment is secured by such prevailing party, all such attorneys' fees, as
determined by a court and not by jury, shall be included in any such judgment.
Pure Cycle Corporation, a Delaware
Corporation
By:
------------------------------------------
Mark Harding, President
Icon Investors I, LLC, a Colorado Limited
Liability Company
By: Airway Park Manager, LLC, a Colorado
limited liability company
By:
-------------------------------------
Andrew R. Klein, its Manager
STATE OF COLORADO )
) ss.
COUNTY OF _________ )
The foregoing instrument was acknowledged before me this ______ day of
November, 2003, by Mark Harding, as President of Pure Cycle Corporation, a
Delaware corporation.
Witness my hand and official seal.
My commission expires: ________________________
-------------------------------------
Notary Public
( S E A L )
Page 47 of 55
STATE OF COLORADO )
) ss.
COUNTY OF _________ )
The foregoing instrument was acknowledged before me this ______ day of
November, 2003, by Andrew R. Klein, as Manager of Airway Park Manager, LLC, a
Colorado limited liability company, as Manger of ICON INVESTORS I, LLC
Witness my hand and official seal.
My commission expires: ________________________
-------------------------------------
Notary Public
( S E A L )
Page 48 of 55
EXHIBIT G
ESCROW AGREEMENT
The undersigned principals wish to establish an escrow account with The
Bank of Cherry Creek, N. A., hereinafter referred to as Escrow Agent, for the
purposes established herein.
FIRST: Detail of the assets and other items to be deposited into escrow are
listed on the attached Schedule A which is attached hereto and is hereby
incorporated into this agreement.
SECOND: Specific instructions to the Escrow Agent are detailed in the
attached Schedule B which is attached hereto and is hereby incorporated into
this agreement.
THIRD: The provisions of this agreement may only be supplemented, altered,
amended, modified or revoked in writing signed by all of the parties hereto and
after payment of all fees, costs and expenses of the Escrow Agent.
FOURTH: No assignment, transfer, conveyance or hypothecation of any right,
title or interest in and to the subject matter of this escrow shall be binding
upon the Escrow Agent unless written notice thereof shall be served upon the
Escrow Agent and all fees, costs and expenses incident thereto shall have been
paid and then only upon the Escrow Agent's assent thereto in writing.
FIFTH: Any notice required or desired to be given by the Escrow Agent to
any party to this Escrow may be given by mailing the same addressed to such
party at the address given below or the most recent address of such party shown
on the records of the Escrow Agent, and notice so mailed shall for all purposes
hereof be as effectual as though served upon such party in person at the time of
depositing such notice in the mail.
SIXTH: The Escrow Agent may receive any payment called for hereunder after
the due date thereof unless subsequent to the due date of such payment and prior
to the receipt thereof the Escrow Agent shall have been instructed in writing to
refuse such payment.
SEVENTH: The Escrow Agent shall not be personally liable for any act it
may do or omit to do hereunder as such agent, while acting in good faith and in
the exercise of its own best judgment.
EIGHTH: Except as set forth in this Agreement or its schedules, the Escrow
Agent is hereby expressly authorized to disregard any and all notices or
warnings given by any of the parties hereto, or by any other person, firm or
corporation, excepting only orders or process of court, and is hereby expressly
authorized to comply with and obey any and all process, orders, judgments or
decrees of any court, and in case the Escrow Agent obeys or complies with any
such process, order, judgment or decree of any court it shall not be liable to
any of the parties hereto or to any other person, firm or corporation by reason
of such compliance, notwithstanding any such process, order, judgment or decree
be subsequently reversed, modified, annulled, set aside or vacated, or found to
have been issued or entered without jurisdiction.
Page 49 of 55
NINTH: In consideration of the acceptance of this escrow by the Escrow
Agent, the undersigned agree, jointly and severally, for themselves, their
heirs, legal representatives, successors and assigns to pay the Escrow Agent its
charges hereunder and to release it as to any liability by it incurred to any
other person, firm or corporation by reason of its carrying out any of the terms
thereof, and to reimburse it for all its expenses, including, among other
things, reasonable counsel fees and court costs incurred in connection with
litigation arising out of this Agreement. Escrow fees or charges, as
distinguished from other expenses hereunder, are those fees detailed in the
nineteenth paragraph hereof.
TENTH: The Escrow Agent shall comply strictly with the requirements of
this Agreement but shall be under no duty or obligation to ascertain the
identity, authority or rights of the parties executing or delivering or
purporting to execute or deliver these instructions or any documents or papers
of payments deposited or called for hereunder, and assumes no responsibility or
liability for the validity or sufficiency of these instructions or any documents
or papers or payments deposited or called for hereunder.
ELEVENTH: The Escrow Agent shall not be liable for the outlawing of any
rights under any Statute of Limitation or by reason of laches in respect to
these instructions or any documents or papers deposited.
TWELFTH: In the event of any dispute between the parties hereto as to the
facts of default, the validity or meaning of these instructions or any other
fact or matter relating to the transaction between the parties, the Escrow Agent
is instructed as follows:
That it shall be under no obligation to act, except under process or order
of court, and shall sustain no liability for its failure to act pending such
process or court order;
That it may in its sole and absolute discretion, deposit the property
herein or so much thereof as remains in its hands with the then Clerk, or acting
Clerk, of the District Court of Arapahoe County, State of Colorado, interplead
the parties hereto, and upon so depositing such property and filing its
complaint in interpleader it shall be relieved of all liability under the terms
hereof as to the property so deposited, and furthermore, the parties hereto for
themselves, their heirs, legal representatives, successors and assigns do hereby
submit themselves to the jurisdiction of said court. The institution of any
such interpleader action shall not impair the rights of the Escrow Agent under
ninth paragraph above.
THIRTEENTH: Any expenses to transfer any instruments or other property
deposited hereunder may be paid by the Escrow Agent from funds held in Escrow,
or if none then the undersigned will pay or reimburse for any such expense.
FOURTEENTH: If the deposits hereunder are not withdrawn before
_____________, 20__, then PureCycle Corporation and Icon Investors I, LLC will
jointly provide the Escrow Agent with written instructions regarding
disbursements of the deposits.
FIFTEENTH: The provisions of these instructions shall be binding upon the
legal representatives, heirs, successors and assigns of the parties hereto.
Page 50 of 55
SIXTEENTH: The parties hereto shall be entitled to any income produced
from investments held in this Escrow.
SEVENTEENTH: Other provisions:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- -------------------
EIGHTEENTH: This agreement shall be construed under the laws of the State
of Colorado.
NINETEENTH: The undersigned principals hereby agree to pay the Escrow
Agent the following fees:
- -----------------------------------------------------------------------
$500.00 ANNUALLY (DEDUCTED FROM ACCOUNT EACH JUNE)
- -----------------------------------------------------------------------
Fees will be charged as follows:
Deduct from account XX Send invoice _____ Charge Checking
------
#___________ Fee at closing _____
Party(ies) responsible for fees PureCycle Corporation and Icon Investors I,
--------------------------------------------
LLC
- -----------------------------
This agreement consists of four typewritten pages including this page and
the additional three schedules which are incorporated by reference.
Page 51 of 55
IN WITNESS WHEREOF the undersigned have hereunto affixed their signatures
on the _____ day of ___________, 2003.
- ----------------------------- -------------------------------
Principal Principal
PureCycle Corporation Icon Investors I, LLC
8451 Delaware Street 5299 DTC Boulevard, Suite 815
Thornton, Colorado 80260 Greenwood Village, CO 80111
- ----------------------------- -------------------------------
Tax Identification No. Tax Identification No.
(303)292-3456 /303)292-3475 (303)984-9800 /(303)984-9874
- ----------------------------- -------------------------------
Telephone No. / Fax No. Telephone No. / Fax No.
ACCEPTED:
The Bank of Cherry Creek, N. A., Escrow Agent
By:__________________________________
Page 52 of 55
EXHIBIT H
WATER OPINION REQUIREMENTS
1. PURECYCLE owns the right to divert and sell outside the Lowry Range
the use of the Dedicated Export Water which will be used to supply the Property.
2. The Dedicated Export Water has not been conveyed or committed to
ECCV under the ECCV Agreement, or otherwise.
3. The Dedicated Export Water is not reserved to the Land Board pursuant
to Section 5.1(c) of the Amended and Restated Lease Agreement and per Exhibit A
thereto.
4. The Dedicated Export Water may be used for purposes as contemplated by
the Water Use Agreement, including re-use to extinction except for augmentation
obligations.
5. The Dedicated Export Water is not part of the "Reserved Water"
described in Section 5.1(e) of the Amended and Restated Lease Agreement.
6. Rangeview has diligently pursued and obtained the adjudication of
Water Rights as contemplated by Section 5.4 of the Amended and Restated Lease
Agreement.
7. The only encumbrances on the Dedicated Export Water to be used to
provide service under the Water Service Agreement are the provisions of the
Amended and Restated Lease Agreement and the Mortgage Deed, Security Agreement,
and Financing Statement dated 4/11/96 made by PURECYCLE for the benefit of the
Land Board.
8. The Dedicated Export Water to be used to provide service under the
Water Service Agreement is not subject to rights of first refusal for the
benefit of ECCV or Arapahoe County.
Page 53 of 55
EXHIBIT I
LAND BOARD ESTOPPEL CERTIFICATE
This Estoppel Certificate is given jointly to Airpark Metropolitan District, a
quasi-governmental corporation and political subdivision of the State of
Colorado ("AMD"), and ICON Investors I, LLC, a Colorado limited liability
company ("Developer"), by the State of Colorado, acting through its State Board
of Land Commissioners (the "State"), with the understanding that AMD and
Developer will rely on this Certificate in connection with entering into a Water
Service Agreement among AMD, Developer, Pure Cycle Corporation, a Delaware
corporation ("PureCycle"), and Rangeview Metropolitan District, a
quasi-governmental corporation and political subdivision of the State of
Colorado ("Rangeview").
The State hereby certifies as follows:
1. The State is the Lessor under that certain Amended and Restated Lease
Agreement between Rangeview and the State (Lease No. S-37280), executed April 4,
1996, as recorded on July 31, 1996 at Reception No. A6097802 in the Arapahoe
County Clerk and Recorder's Office (the "Lease"). A true, correct and complete
copy of the Lease, together with any amendments, modifications and supplements
thereto, is attached hereto. The Lease is the entire agreement between the
State and Rangeview pertaining to the use of all the waters on and under the
Lowry Range (as defined under the "Lease"). There are no amendments,
modifications, supplements, arrangements, side letters or understandings, oral
or written of any sort, of the Lease, except as attached.
2. The Lease has been duly executed and delivered by, and is a binding
obligation of, the State, and the Lease is in full force and effect.
3. All current obligations of the State under the Lease have been
performed, and to the best of the State's knowledge Rangeview is not currently
in default under the Lease.
4. The State is not in default under the Lease. The State has not
assigned, transferred or hypothecated the Lease or any interest therein.
5. The person executing this Estoppel Certificate is authorized by the
State to do so and execution hereof is the binding act of the State enforceable
against the State.
IN WITNESS WHEREOF, the State has executed this Estoppel Certificate this __ day
of _____________, 200_.
STATE OF COLORADO
STATE BOARD OF LAND COMMISSIONERS
By:_____________________________________
President
Page 54 of 55
EXHIBIT J
RANGEVIEW ESTOPPEL CERTIFICATE
This Estoppel Certificate is given jointly to Airpark Metropolitan District, a
quasi-governmental corporation and political subdivision of the State of
Colorado ("AMD"), and ICON Investors I, LLC, a Colorado limited liability
company ("Developer"), by the Rangeview Metropolitan District, a
quasi-governmental corporation and political subdivision of the State of
Colorado ("Rangeview"), with the understanding that AMD and Developer will rely
on this Certificate in connection with entering into a Water Service Agreement
among AMD, Developer, Pure Cycle Corporation, a Delaware corporation
("PureCycle"), and Rangeview.
Rangeview hereby certifies as follows:
1. Rangeview is Lessee under that certain Amended and Restated Lease
Agreement between Rangeview and the State Board of Land Commissioners (Lease No.
S-37280), executed April 4, 1996, as recorded on July 31, 1996 at Reception No.
A6097802 in the Arapahoe County Clerk and Recorder's Office (the "Lease"). A
true, correct and complete copy of the Lease, together with any amendments,
modifications and supplements thereto, is attached hereto. The Lease is the
entire agreement between Rangeview and the State pertaining to the use of all
the waters on and under the Lowry Range (as defined under the "Lease"). There
are no amendments, modifications, supplements, arrangements, side letters or
understandings, oral or written of any sort, of the Lease, except as attached.
2. The Lease has been duly executed and delivered by, and is a binding
obligation of, Rangeview, and the Lease is in full force and effect.
3. All current obligations of the Rangeview under the Lease have been
performed, and to the best of Rangeview's knowledge, neither the State or
Rangeview are currently in default under the Lease.
4. Rangeview has not assigned, transferred or hypothecated the Lease or
any interest therein.
5. The person executing this Estoppel Certificate is authorized by
Rangeview to do so and execution hereof is the binding act of Rangeview
enforceable against the Rangeview.
IN WITNESS WHEREOF, Rangeview has executed this Estoppel Certificate this __ day
of _________, 200_.
RANGEVIEW METROPOLITAN DISTRICT
By:_____________________________________
Page 55 of 55