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HomeMy WebLinkAboutC10-010 Stock Subscription Agreement Eagle Park Reservoir Co.STOCK SUBSCRIPTION AGREEMENT ~~C This AGREEMENT is made this `~ day of X963', by and between the County of Eagle, Colorado, a political subdi ision o the State of Colorado acting by and through its Board of County Commissioners ("County") and the Eagle Park Reservoir Company, a Colorado nonprofit mutual reservoir company (the "Reservoir Company"). RECITALS A The Company owns and operates the Eagle Park Reservoir located in Eagle County, Colorado. B. The Eagle Park Reservoir as enlarged has a firm year yield of 2,089 acre feet. C. The Articles, as amended by Resolution adopted on September 24, 2008, currently authorize the issuance of 20,890 Class A shares of common stock, consisting of 11,000 Class A Series 1 shares and 9,890 Class A Series 2 shares, based on the firm year yield of Eagle Park Reservoir. D. The Articles provide that each Class A share entitles the holder thereof to one-tenth of one acre-foot of the firm year yield of Eagle Park Reservoir, as such yield is defined by the Company. E. The Company and the City of Aurora have negotiated a Water Delivery Agreement dated 2009 (the "Water Delivery Agreement"), attached hereto as Exhibit A, whereby the Company will be entitled to the release of water from Homestake Reservoir when the amount of water in Eagle Park Reservoir falls below certain levels. F. As consideration for the Homestake Reservoir releases under the Water Delivery Agreement, the Company is required to pay to Aurora the sum of Seven Million Five Hundred Thousand Dollars (the "Purchase Price"). G. The Company has determined that the effect of the Water Delivery Agreement will be to increase the firm year yield of Eagle Park Reservoir by 500 acre feet. H. By virtue of the Water Delivery Agreement and the fact that each Class A share represents one-tenth of one acre foot of the firm year yield of Eagle Park Reservoir, the Company has determined that it is appropriate to authorize and issue an additional 5000 Class A Series 2 shares (the "Additional Shares"), which are subordinate to the preferential rights of the Class A Series 1 shares. Page 1 of 4 } 1,~~" I. The allocation and issuance of the Additional Shares shall be based on the amounts paid to Aurora by the existing and new shareholders under the Water Delivery Agreement, rounded to the nearest whole or half acre foot amount; J. The County desires to contribute to the financial assistance to be provided to Aurora by the Company and in exchange to receive 760 Class A Series 2 shares of the Company pursuant to the Resolution of the Eagle Park Reservoir Company shareholders attached hereto as Exhibit B, and the Articles of Amendment to the Articles of Incorporation of the Eagle Park Reservoir Company attached hereto as Exhibit C. AGREEMENTS NOW THERFORE, in consideration of the foregoing Recitals and the agreements made herein, the Parties agree as follows: 1. Effective Date. This Agreement shall become effective upon the full execution of the Water Delivery Agreement by the Company and Aurora consistent with and without material changes thereto. 2. Eagle County Payments. (a) Within I S days prior to the Company's payment to Aurora of the Purchase Price, the County shall pay to the Company One Million One Hundred Forty Thousand Dollars ($1,140,000.00) to be used as a portion of the Purchase Price to be paid to Aurora. (b) On or before October 1, 2010, Eagle County shall pay to the Company Five Hundred Ninety Eight Thousand, Eight Hundred Eighty Four and 32/100 Dollars $598,884.32, which is the agreed present value of the capital cost of the acquisition and development of the original Eagle Park Reservoir by which the Class A shares are supplied. This payment is in addition to the payment under paragraph 2(a) above. 3. Issuance of Shares. Contingent upon the County's payment to the Company under subparagraph 2(a) above, within 60 days of the Company's and Aurora's execution of the Water Delivery Agreement, the Company shall issue to the County a stock certificate for 760 Class A Series 2 shares in the Company that will entitle the County to seventy-six (76) acre feet of the firm annual yield of Eagle Park Reservoir as such yield is defined by the Company. 4. Company Use of Funds. The Company agrees that it will hold the $598,884.32 payment made by the County pursuant to subparagraph 2(b) above in a reserve account to be used for the cost of the operation, maintenance, repair, replacement, and enlargement of Company facilities and/or any other expense items or capital expenditures of the Company, which shall be the exclusive use of that fund. Page 2 of 4 5. Company Actions Under Water Deliver~A~reement. (a) The Company shall not provide consent to Aurora pursuant to paragraph 28 of the Water Delivery Agreement without unanimous consent of all of the Company's Class A shareholders, and will make such needed amendments to its Bylaws to provide for such limitation. (b) The Parties' mutual consent shall be necessary to allow Aurora to assign a portion of the yield of the Columbine Ditch to any other west slope water user other than the Company or its shareholders. 6. Miscellaneous Provisions. (a) Notices. All notices, requests, and other communications pertaining to this Agreement shall be transmitted in writing and shall be deemed duly given when received by the Parties at their addresses stated below or at any subsequent addresses provided to the other Party in writing: NOTICE TO EAGLE COUNTY: County Attorney Eagle County Attorney's Office P.O. Box 850 Eagle, CO 81631 NOTICE TO RESERVOIR COMPANY President, Eagle Park Reservoir Company 846 Forest Road Vail, CO 81657 (b) Assignments. The Parties shall not assign their rights or delegate their duties under this Agreement without the consent of the other Party, except that the County may assign its rights and delegate its duties in whole or in part to a water supply enterprise established by the County under Colorado law upon providing notice to the Reservoir Company of any such assignment and delegation. (c) Amendments. This Agreement may be amended by the Parties only in writing and in a form executed in the same manner as this Agreement. (d) Authorizations. Each person executing this Agreement represents and warrants that they have been duly authorized by their Party to execute this Agreement and that they have the authority to bind that Party to the terms and conditions hereof. Page 3 of 4 (e) Appropriations. The Parties' financial obligations under this Agreement shall be subject to their annual budgeting and appropriation of funds for such purposes under Colorado law. (f) Integrated Agreement. This Agreement constitutes the entire, integrated agreement between the Parties regarding the subject of this Agreement, and all prior negotiations, communications, and understandings regarding this subject matter are merged herein. (g) Survival. This Agreement shall survive the Company's issuance of stock to the County pursuant to the provisions hereof. IN WITNESS WHEREOF, the Parties have executed this Agreement in duplicate originals. EAGLE COUNTY, acting by and through its Board of County Commissioners Attest: ~ ~8~ ~By• ~ ~ -~Ul~~ ~ ~~ Name: Serer ~' ~ f c - ~: ~ y o '~ i itle: Chairman of the Board Teak Simonton, County Cle' ~, o *~ V ~ ~ Attest:,.-1 ~> ~~/~~` L,s_3~-,.~.. `~ ,Secretary EAGLE PARK RESERVOIR COMPANY By: 4.~~ ;. Name: Frederick P. Sackbauer, IV Title: Chairman of the Board Page 4 of 4 EXHIBIT A WATER DELIVERY AGREEMENT This Agreement dated as of this day of , 2009, is between the City of Aurora, acting by and through its Utilities Enterprise ("Aurora"); and the Eagle Park Reservoir Company, a Colorado nonprofit mutual reservoir company {the "Reservoir Company"), whose shareholders consist of the Colorado River Water Conservation District, the Eagle River Water and Sanitation District {the "District"), the Upper Eagle Regional Water Authority ("Authority"}, and Vail Associates, Inc {"Vail"). Aurora and the Reservoir Company are sometimes collectively referred to herein as the "Parties." Recitals A. The Board of Water Works of Pueblo ("Pueblo"} has released a Request for Proposals ("RFP") to sell the Columbine Ditch, decreed by the Eagle County District Courtin Civil Action No. 963 on October 3, 1936, for 60 cfs, with an appropriation date of June 21, 1930, the source of which is the East Fork of the Eagle River, as changed by the District Court in and for Water Division No. 5 (the "Water Court") in Case No. 90CW340 {consolidated with Case No. 90CW052 Water Division No. 2) to include all beneficial uses, and as decreed therein as foreign water pursuant to C.R.S. § 37-82-106, together with all associated appurtenances, easements and rights of way {collectively, the "Columbine Ditch"). B. The Reservoir Company is the owner of the following described water rights and all associated appurtenances, land, easements and permits (collectively the "Eagle Park Reservoir project"): (1) Eagle Park Reservoir, as decreed by the Water Court in Case Nos. 92CW340 and 93CW301, for a combined total capacity of 27,600 acre feet, with an appropriation date of March 16, 1991, for 5300 acre feet, and May 18, 1993, for 22,300 acre feet, together with the right to divert into storage at the rate of 80 cfs under the August 10, 1956 appropriation date of the Pando Feeder Canal pursuant to the decree of the Water Court in Case No. 97CW288, for mining, milling, industrial, snowmaking, municipal, domestic, stock watering, recreation, fish and wildlife, irrigation, agricultural, exchange, replacement, augmentation and all other beneficial purposes, as augmented by decrees of the Water Court in Case Nos. 95CW348 and 03CW211. The north abutment of the dam crest is located approximately 160 feet north of the south section line and 650 feet east of the west section line of Section 28, T. 7 S., R. 79 W., 6th P.M., Eagle County, Colorado. The source of Eagle Park Reservoir is the East Fork of the Eagle River including runoff, surface flow and seepage from the area above and below the reservoir and tributary thereto, and water tributary to Ten Mile Creek a tributary of the Blue River. (2) 80 cfs of the Pando Feeder Canal, decreed by the Eagle County District Court in Civil Action No. 1193 for a total of 400 cfs, with an appropriation date of August 10, 1956, for irrigation, domestic, municipal, generation of electric energy and industrial purposes, as changed by decree of the Water Court in Case No. 97CW288, and as augmented by decree of the Water Court in Case No. 03CW211. Irl Case No. 97CW288, the Water Court decreed the 33812 East Fork Pumping Plant as an alternate point of diversion for the 80 cfs Pando Feeder Canal water right, and changed the permissible uses to include mining, milling, industrial, snowmaking, municipal, domestic, stock watering, recreational, fish and wildlife, irrigation, agricultural, exchange, replacement, and augmentation purposes. The East Fork Pumping Plant is located on the East Fork of the Eagle River in the SE1/4 of the NE1/4 of Section 32, T. 7 S., R. 79 W., of the 6th P.M. at a point whence the Northeast corner of said Section 32 bears North 31°53' East a distance of 2,414 feet. In Case No. 03CW211, up to 5,010.7 acre feet of out of priority diversions at the East Fork Pumping Plant are augmented by various sources of augmentation water. The existing capacity of the East Fork Pumping Plant is 6 cfs. A map depicting Eagle Park Reservoir and the East Fork Pumping Plant is attached hereto as Figure 1. C. The current total capacity of Eagle Pazk Reservoir is approximately 3,300 acre feet and the active storage capacity of Eagle Park Reservoir is currently 3,158 acre feet. The Reservoir Company manages the Eagle Park Reservoir project to provide a firm annual yield of 2,089 acre feet, and desires to increase the firm annual yield of the Eagle Park Reservoir project by an additional 500 acre feet. D. Aurora has historically leased Colorado River water, including the Columbine Ditch for use within its municipal system, and owns a first right of refusal on the sale of the Columbine Ditch by virtue of the "Intergovernmental Agreement Between the Board of Water Works of Pueblo, Colorado and the City of Aurora Acting by and through its Utilities Enterprises for the Lease of Water" dated November 25, 1997 (the "Right of First Refusal"}. E. A third pazty was the high bid in response to the Pueblo RFP, and Aurora has exercised its Right of First Refusal to purchase the Columbine Ditch. F. Aurora is a co-owner (with Colorado Springs Utilities) of the Homestake Reservoir Project, which includes, among other water rights, Homestake Reservoir, also known as Elliott-Weers Reservoir, decreed by the Eagle County District Courtin Civil Action No. 1193 for 83,338.98 acre feet conditional, 43,504.7 acre feet of which is now absolute. Homestake Reservoir is located on Homestake Creek with a dam being located whence the NW Comer of Section 31, T. 7 S., R. 80 W., 6th P.M. bears N. 58°30.6' E. 24,659 feet from the East dam abutment and N. 62°25.8' E. 25,746 feet from the West dam abutment. The sources of supply of said reservoir are the East Fork of Homestake Creek, the Middle Fork of Homestake Creek and Homestake Creek. G. As part of its co-ownership of the Homestake Project, Aurora is also the co-owner of a conditional water right for the diversion of 230 cfs from the East Fork of the Eagle River through the Eagle-Arkansas Ditch at a point located whence the East 1/4 corner of Section 24, T. 7 S., R. 80 W., 6th P.M. bears North 55°38' West a distance of 11,786 feet (the "Eagle-Arkansas Conditional Water Right"). The Eagle-Arkansas Conditional Water Right is a component of the Homestake Project and also was decreed by the Eagle County District Court in Civil Action No. 1193 on June 8, 1962. 2 H. The City of Colorado Springs, Aurora, Cypress Climax Metals Company, and the shareholders of the Reservoir Company entered into a Memorandum of Agreement dated April 21, 1998, regarding the development of a joint use water project in the upper Eagle River Basin and related issues. That document is referred to herein as the "Eagle River MOU." One of the joint use projects that the parties to the Eagle River MOU are investigating is the development of a well field in the general vicinity of Camp Hale which was conditionally decreed by the Water Court in Case No. 88CW449 (the "Camp Hale Well Field"). I. References herein to "the Cities" are to the cities of Colorado Springs and Aurora collectively, however, the obligations herein pertaining to the release of water from Homestake Reservoir are obligations solely of Aurora, and not of any other participant in the Homestake Reservoir Project. J. A pipeline maybe constructed to deliver water from the Columbine Ditch to Eagle Park Reservoir. The currently proposed pipeline route is generally depicted and described on the map attached as Figure 1 as the "Proposed Columbine Ditch Interceptor." K. The Parties desire to enter into an agreement which provides a framework for accomplishing their mutual objectives. Agreements Now, therefore, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows: 1. Trade of Water for Water Rights. Aurora agrees to deliver water to the Reservoir Company as detailed below in exchange for water rights obtained by Aurora by funds provided by the Reservoir Company. 2. Reservoir Company Consideration. (a) The parties have agreed that the value of the water to be delivered to the Reservoir Company from Aurora's storage pursuant to this Agreement is Seven Million Five Hundred Thousand Dollars ($7,500,000). Within 4S days of the execution of this Agreement, the Reservoir Company will transfer into an interest bearing escrow account for the benefit of Aurora $7,500,000, which funds will be utilized by Aurora to pay for purchases of water rights that can be used in its water supply system (the "Trade Water Rights"}. The Trade Water Rights shall not include water rights that are currently decreed for use in Water Division No. 5. In accordance with the notice provision below, Aurora will notify the Reservoir Company as each such purchase is completed. The portion of the interest that has accrued on the $7,500,000 that is attributable to the amount of such principle released for the purchase of Trade Water Rights at each closing will be released to Aurora concurrently with such closing in accordance with the terms of the lease described in paragraph 2(c) below. (b) Prior to the completion of the purchases of the Trade Water Rights, Aurora's obligation to deliver water to the Reservoir Company as provided herein shall be limited to the percentage of the $7,500,000 that has been expended on Trade Water Rights purchases. {c) By separate agreement, Aurora will lease water to the Reservoir Company on a temporary basis during the period prior to Aurora's completion of the purchases of the Trade Water Rights, to the extent needed to make up any difference between the amount of water to which the Reservoir Company will be entitled under paragraph 2.(b) and the amount of water to which the Reservoir Company will be entitled under this Agreement after completion of the Trade Water Rights purchases. The interest from the funds in the aforementioned escrow account shall be credited against any charge for the lease water, and any charge for such interim lease water will not exceed the amount of the interest generated by the funds in the escrow account. 3. ContingencX. This Agreement is contingent upon Aurora's closing of the acquisition of the Columbine Ditch pursuant to the exercise of its Right of First Refusal. In the event Aurora does not complete its acquisition of an interest in the Columbine Ditch, this Agreement shall be null and void and of no further force and effect. 4. Homestake Reservoir Deliveries. (a) Aurora shall have the perpetual delivery obligation to release to the Reservoir Company upon request the following amounts of water from Aurora's interest in Homestake Reservoir subject to the following limitations: (1) In any year in which the storage volume in the active storage pool of Eagle Park Reservoir falls below 1,200 acre feet, the Reservoir Company shall be entitled to call for the release of up to 500 acre feet of water from Homestake Reservoir. (2) In any year in which the storage volume in the active storage pool of Eagle Park Reservoir falls below 500 acre feet, the Reservoir Company shall be entitled to call for the release of up to 1,000 acre feet of water from Homestake Reservoir (including the 500 ac- ft described in 4{a)(1} above) minus the amount released or delivered in the previous year under paragraph 4(a)(1). By way of example, if the Reservoir Company obtained 300 acre feet in the previous year and storage falls below 500 acre feet in the subsequent year, the Reservoir Company could obtain the release andlor the delivery of up to 700 acre feet of water from Homestake Reservoir in the subsequent year. {3) The Reservoir Company's right to such releases under paragraphs 4{a}(1) and {2) above is subject to the following further conditions: (i) The volume of water released to the Reservoir Company pursuant to this paragraph shall be measured at the Homestake Reservoir outlet works; (ii) releases from Eagle Park Reservoir, when combined with releases from Homestake Reservoir or an alternate source pursuant to paragraph 14 of this Agreement, shall not exceed 2,589 acre feet in any twelve month period beginning April 1 and ending March 31; and (iii) releases from Homestake Reservoir pursuant to this Agreement shall not exceed 2,000 acre feet over any consecutive 20 year period unless Homestake Reservoir fills and spills, in which event the 20 year period for purposes of calculating the 2000 acre feet hereunder shall be reset and a new 20 year period will begin, however, this 20 year period shall not be xeset more than once in any ten year period. The election of whether to reset after a Homestake Reservoir spill shall be at the sole discretion of the Reservoir Company. (b) On or before July 1 of each year, the Reservoir Company shall provide Aurora with a tentative schedule for the release of water during the next twelve months to inform 4 Aurora of the general pattern of intended reservoir releases; provided, however, that such schedule of releases may be periodically adjusted by the Reservoir Company. The flow rate of the releases may be varied no more often than once per week, and the maximum rate of release shall not exceed 8 cfs. If the Reservoir Company, through a future agreement with the Cities, participates in modification of the outlet of Homestake Reservoir which allows higher flows for the Reservoir Company's releases, Aurora will allow the maximum rate of release under this Agreement to increase to the flow rates allowed under such future agreement. The foregoing flow rate limitation shall apply to the combination of all releases made for the benefit of the Reservoir Company pursuant to this Agreement and all other agreements with the Reservoir Company in effect at the time a release is being made. (c) The Parties acknowledge that from time to time, scheduled and unscheduled maintenance requirements for Homestake Reservoir Dam and Eagle Park Reservoir Dam may disrupt the operations anticipated herein. For example, but not by way of limitation, it is anticipated that maintenance for Homestake Reservoir may require that facility to be substantially drained in 2012 or 2013. The Parties agree that when such disruptions occur, they will negotiate in good faith to reach a mutually satisfactory accommodation that substantially preserves the benefits of each under this Agreement. With regard to any draining, the Parties agree as follows: (i} The Reservoir Company may call for deliveries pursuant to this Agreement during the year of draining only to the extent the water it needs can be delivered prior to June 1 of the year of draining. (ii} The Reservoir Company may call for a resumption of deliveries following such draining in the following amounts when the amount of water in storage in Homestake Reservoir reaches the following total volumes: delivery amount storage volume 100 of 7,000 of 200 of 9,000 of 300 of 11,000 of 400 of 13,000 of full delivery 15,000 of (d) Any deliveries of water pursuant to the interim lease under paragraph 2(c) above shall be included in determining the amount of deliveries made pursuant to paragraph 4(a) above. 5. Homestake Reservoir Maintenance. Beginning with the first water year following the acquisition of the Columbine Ditch pursuant to this Agreement, the Reservoir Company will pay for a portion of all normal and routine costs of operation, maintenance and repair of Homestake Reservoir. For simplicity of accounting and administration, the Parties have agreed that this portion will be a flat rate of $5,000 per year, which adjusted annually on March 31 in accordance with to the Denver-Boulder Area Consumer Price Index (CPl); provided, however, that in no event shall such cost increase by more than 3% in any year. Such payment shall represent all of the Reservoir Company's obligation for Homestake Reservoir maintenance, and Aurora shall be solely responsible for all other maintenance costs, including costs of any extraordinary repairs or rehabilitation costs of Homestake Reservoir. 6. Permitting. The Reservoir Company shall not oppose and shall support {if requested) the issuance of any federal, state and local permits that may be required for Aurora and the Climax Molybdenum Company to utilize the Columbine Ditch. 7. Water Court Adjudications. The Reservoir Company and its present and future shareholders shall not oppose the following Water Court applications except to assure compliance with the agreed limitations thereon set forth below: (a) An application to change the place of use of the Columbine Ditch to permit the intended uses by Aurora and beneficial uses by Climax Molybdenum Company, provided that such uses by Climax are only in connection with the Climax Mine. (b) An application for a new junior water right to be diverted through the Columbine Ditch for the benefit of Aurora and Climax Molybdenum Company, so long as the application and any resulting decree for the junior right expressly state and provide that: (1) any use by Climax shall be limited to the Climax Mine; (2) water will not be diverted pursuant to the junior right until such time one or more of the volumetric limits applicable to the senior Columbine Ditch priority as decreed in Case No. 90CW340 prevents the exercise of the senior right; (3) no changes or improvements are made to Columbine Ditch to increase the current physical capacity of the ditch; however nothing herein prevents maintenance, repair, or rehabilitation of the ditch necessary to maintain its existing physical capacity; and (4) diversions under the junior water right are linuted to the current physical capacity of the Columbine Ditch or 60 cfs, whichever is less. (c) An application to authorize the use of the Columbine Ditch as alternate points of diversion for a portion of the Eagle-Arkansas Conditional Water Right. However, diversions by Aurora under Aurora's Eagle-Arkansas Conditional Water Right at the Columbine Ditch shall be subordinate to the 6 cfs of the Pando Feeder Canal previously changed to allow diversion at the East Fork Pumping Plant in Water Court Case Nos. 97CW288 and 03CW211. The Reservoir Company may participate in any such Water Court proceeding to ensure that the foregoing condition shall be contained in any final decree. Aurora shall not file the application under this paragraph 7(c) if it files an application and adjudicates the water right under paragraph 7(b). {d) Water diverted and utilized by Aurora at the Columbine Ditch pursuant to the changed portion of the Eagle-Arkansas Conditianal Water Right pursuant to paragraph 7(c) will be deemed part of the 20,000 a.f. of yield identified in Paragraph IV.B.2. of the Eagle River MOU to the extent that the diversion of such water constitutes "average yield" as defined in paragraph IV.A.2. of the Eagle River MOU. The parties agree that water delivered to the Reservoir Company under this Agreement and any diversions pursuant to the water rights referenced in7(a) and 7(b) shall not be considered part of the yield identified at Paragraph IV.B.1 and IV.B.2 of the Eagle River MOU. (e) The Parties shall cooperate in such other applications as maybe necessary to effect the intent of this Agreement. 8. Eagle River Pumpback Project. Aurora and the Reservoir Company also desire to develop additional water supplies for their respective needs. Accordingly, the Parties have been studying the potential joint development of a pumpback project that would divert ground and/or surface water from the Eagle River at Camp Hale, pump that water via pipeline up to an enlarged Eagle Park Reservoir or other facilities in the area (the "Eagle River Pumpback Project}. The Parties shall continue to explore the feasibility of developing the Eagle River Pumpback Project, including the feasibility of enlarging Eagle Park Reservoir; provided, however, by this Agreement the Parties are not obligated to participate in the actual development of the Eagle River Pumpback Project or the enlargement of Eagle Park Reservoir. Nevertheless, the Parties shall remain subject to the terms of the Eagle River MOU. 9. Upper Colorado River Compact Call. In the event the Colorado State Engineer curtails diversions of Division 5 water rights in a manner that adversely impacts the exercise of Aurora's rights within the basin, or requires the release of water previously stored by such rights, due to the operation of the Upper Colorado River Compact, the Parties agree that they will renegotiate the terms of this Agreement based on the conditions then occurring and anticipated to occur thereafter. 10. No Transfer of Water Rights or Facilities. The Parties agree that no portion of this Agreement shall be construed or interpreted to transfer title or to transfer ownership of any water right or any facility for the supply, treatment, and/or distribution of water owned by any of the Parties hereto as of the date of this Agreement. 11. Transportation Losses. The Parties mutually agree that the party receiving water will bear any transportation losses due to evaporation, seepage or phreatophytes (so-called shrinking) incurred after water is released for its benefit from the HomestaIce Reservoir outlet or alternate source. 12. Survival of Representations. Each and every covenant, promise, agreement, or payment contained in this Agreement shall not merge in any other document but shall survive the transfer of any other document and be binding and obligatory upon each of the Parties hereto nonetheless. 13. Notices. Any and all notices or other communications desired or required to be given under any provision of this Agreement, shall be given in writing and delivered personally or sent to by registered or certified mail, return receipt requested, postage prepaid, or by fax addressed as follows: To Aurora: Director of Utilities City of Aurora 15151 E. Alameda Parkway, Suite 3600 Aurora, CO 80012 Fax: 303-739-7491 To Reservoir Company: President, Eagle Park Reservoir Company 846 Forest Road Vail, CO 81657 Fax: 970-476-4089 The above addresses, contacts and fax numbers may be changed at any time by giving written notice to the other Parties in accordance with this paragraph. 14. Alternate Source. The Parties shall mutually cooperate to determine the feasibility and suitability of utilizing water from the Camp Hale Well Field as an alternative source (in whole or in part) for water to be released from Homestake Reservoir pursuant to this Agreement. Prior to utilizing water from the Camp Hale Well Field as a supplemental or an alternate source, the Parties must agree that such water is suitable in timing, amount and quality to meet the needs of the Reservoir Company, and such water must be augmented as necessary by Aurora to allow its use. 15. Columbine Ditch Intercepttar. While the Parties hereto are interested in completing the Proposed Columbine Ditch Interceptor, that project will require the participation of entities not a party to this Agreement, on terms that cannot yet be predicted. The construction of the Proposed Columbine Ditch Interceptor, and delivery of water from it to the Reservoir Company will be the subject of a separate agreement to be negotiated in the future. 16. Modification. This Agreement may be modified, amended, changed or terminated in whole or in part by an agreement in writing duly authorized and executed by Parties hereto with the same formality as this Agreement. 17. Non-waiver. The waiver of any breach of any provision of this Agreement by any party shall not constitute a continuing waiver of any subsequent breach of said party of either the same or any other provision of this Agreement. 18. Interrelation. Each paragraph of this Agreement is interrelated with the other paragraphs and is not severable except by the mutual consent of the Parties hereto. This non- severability also applies in the case of a judicial determination finding that certain provisions of this Agreement are invalid. In the event of such finding, either party may rescind this Agreement, whereupon the funds paid by the Reservoir Company under paragraph 2 above shall be refunded to the Reservoir Company. In the alternative, the Parties agree that they will renegotiate the terms of this Agreement based on the conditions then existing so as to achieve the mutual objectives of this Agreement. 19. Assi ng ability. The Parties to this Agreement may assign their rights or delegate their duties under this Agreement without the prior written consent of the other Parties. Notwithstanding the foregoing, Aurora may not assign its portion of the yield fram the Columbine Ditch to any west slope water users upstream of the confluence of Gore Creek and the Eagle River other than the Climax Molybdenum Company without the consent of the Reservoir Company. 20. Applicable Law. This Agreement and its application shall be construed in accordance with the laws of the State of Colorado. 21. Venue. Notwithstanding the terms of this Agreement, the Parties agree and stipulate the proper venue for any court action which might occur in connection with or as a result of this Agreement is the Water Court. 22. Execution of Additional Documents. The Parries agree to execute any further documents reasonably necessary to complete the transactions provided by and contemplated by this Agreement. 23. Default & Remedies. If any party is in default of this Agreement, the non- defaultingparties may elect to treat this Agreement as terminated in which case, the non- defaulting parities may recover such damages as proper or seek specific performance. No such default shall be deemed to exist for purposes of this provision and Agreement until a defaulting party has been given notice of the alleged default and fails to remedy such default within 30 days of receipt of such notice, and there is a determination by a court having venue that there has been a breach of this Agreement. 24. Costs and Fees. In the event of any litigation, arbitration or other dispute resolution process arising out of this Agreement, the Parties agree that each will pay its own costs and fees. 25. Indemnification. To the fullest extent permitted by law, each party shall indemnify and hold the other harmless for all losses and claims whatsoever, for any negligent act or omission or willful misconduct attributable to it, its agents, employees and contractors in the operation or management of any facility incident to the fulfillment of obligations under this Agreement. No part of this Agreement or any actions taken pursuant hereto shall be deemed to be a waiver of the Governmental Immunity Act, C.R.S. §§ 24-10-141, et seq., by any party covered by the Act. 26. Sole Obligation of Aurora Utilit~rprise. The Parties hereto agree that any and all obligations of Aurora pursuant to this Agreement are the sole obligations of the City of Aurora Utility Enterprise and, as such, do not constitute a general obligation or other indebtedness of Aurora, or a multiple fiscal year direct or indirect debt or other financial obligation whatsoever of Aurora within the meaning of any constitutional, statutory or charter limitation. The Parties agree that in the event of a default by Aurora on any of its obligations under the terms of this Agreement, or in the event of a judgment against Aurora pursuant to this Agreement, no party shall have any recourse against any other revenues of Aurora except for the net revenues of the water utility system available therefor in the City of Aurora Utility Enterprise water fund, after payment of all expenses related to the operation and maintenance of said water system. 27. Force Majeure. Notwithstanding anything herein to the contrary, the Parties agree not to hold each other responsible for any losses or damages incurred as a result of a party's inability to perform pursuant to this Agreement due to the following causes if beyond the party's control and when occurring through no direct or indirect fault of the party: acts of God; natural disasters; actions or failure to act by governmental authorities other than the Parties hereto; unavailability of power, fuel, supplies or equipment critical to a party's ability to perform; major equipment or facility breakdown; and changes in Colorado or federal law, including, without limitation, changes in any permit requirements. In the event of a condition of force majeure, the Parties agree that they will renegotiate the terms of this Agreement based on the conditions then occurring and anticipated to occur thereafter so as to achieve the mutual objectives of this Agreement. 28. Right of First Refusal. Aurora and Climax are acquiring the Columbine Ditch under a newly formed ditch company. In connection with such joint acquisition, Aurora has a right of first refusal to purchase the interest of Climax in the Columbine Ditch. Aurora agrees that it will not relinquish that right of first refusal by amendment of its agreement with Climax or otherwise or assign that right to any other person or entity without the Reservoir Company's prior approval and that, subject to the limitations on assignment in its agreement with Climax, it will assign its right of first refusal to acquire Climax's interest in the Columbine Ditch to the Reservoir Company in the event Aurora decides in it sole discretion that it will not exercise its right of first refusal to purchase Climax's interest. 29. Paragraph Headings. Paragraph headings herein inserted are for convenience and not intended to govern, limit, or in any way affect the interpretation of this Agreement. Executed as of the date first set forth above. EAGLE PARK RESERVOIR COMPANY Attest: g y; ~~~/ Q _~ Name: Frederick P. Sae Bauer, III J ~~-r~~- Title: Chairman of the Board 10 STATE OF COLORADO ) )ss. COUNTY OF ) The foregoing instrument was acknowledged before me this 2~_~day of ~~,(5z~, 2009 by Frederick P. Sackbaner, III, Chairman of the Board, and attested to byL,S~~snHOt7; Corporate Secretary, on behalf of the Eagle Park Reservoir Company. Witness my hand and official seal Notary P lic KATHY A. My Commission Expires: ~i_~..~-..~~~/G 2~,2 GARRISON 11 City of Aurora, a Colorado Municipal Corporation, Acting by and through its Utility Enterprise Edward J. Tauer, Mayor ATTEST: Debra A. Johnson City Clerk SEAL APPROVED AS TO FORM FOR AURORA City Attorney Date Date Special Counsel Date STATE OF COLORADO } }ss. COUNTY OF ) The foregoing instrument was acknowledged before me this day of , 2009 by Edward J. Tauer, Mayor and attested to by Debra A. Johnson, City Clerk on behalf of the City of Aurora, a Colorado Municipal Corporation, acting by and though it Utility Enterprise. Witness my hand and official seal Date SEAL Notary Public My Commission Expires: 12