Exhibit 10.1

WATER SERVICE AGREEMENT
BY AND BETWEEN
RANGEVIEW METROPOLITAN DISTRICT,
acting by and through its Water Activity Enterprise
AND
ELBERT & HIGHWAY 86 COMMERCIAL METROPOLITAN DISTRICT,
acting by and through its Wild Pointe Water Activity Enterprise
DECEMBER 15, 2016
 

 
TABLE OF CONTENTS
Page
ARTICLE I CLOSING AND CONDITIONS PRECEDENT  
2
1.1
Closing
2
1.2
Deliveries
2
1.3
Conditions to the Obligations of Each Party
2
1.4
Additional Conditions to the Obligations of Provider
3
1.5
District Adoption of Rules and Regulations
4
1.6
Water Report
5
1.7
Termination
6
1.8
Effect of Termination
7
ARTICLE II EXCLUSIVITY  
7
2.1
Exclusive Service
7
2.2
Exclusive License to Water Rights
7
2.3
Use of District Water System, Easements and Property Interests
7
2.4
Limitations
8
2.5
Provider Facilities
8
ARTICLE III WATER SOURCES  
8
3.1
District Water
8
3.2
Non-Potable Water
9
3.3
Reuse Water
9
3.4
Service Restrictions
9
ARTICLE IV OWNERSHIP, OPERATION, AND MAINTENANCE OF FACILITIES  
11
4.1
Categories of Facilities and Ownership
11
4.2
Service Commitment
12
4.3
Provider Obligations
12
4.4
Oversized Facilities
14
4.5
District Obligations
14
4.6
Cost Recovery for System Loss
18
ARTICLE V RECORDS AND INSPECTIONS  
19
5.1
Records Maintained by Provider
19
5.2
Records Maintained by District
19
5.3
Inspection of District Records
20
5.4
Audit of District Records
20
5.5
Inspection of Provider Records
21
ARTICLE VI BILLING AND RATES, FEES AND CHARGES  
21
6.1
District Rates, Fees and Charges
21
6.2
Updates to District Rates, Fees and Charges
21
6.3
Billing
22
ARTICLE VII RATES, FEES AND CHARGES; ADJUSTMENTS  
23
7.1
Adjustments to Rates, Fees and Charges
23
7.2
Rate Studies
23
7.3
Effectiveness of Adjusted Rates, Fees and Charges
25
7.4
Fairness
25
ARTICLE VIII EXISTING AGREEMENTS  
25
ARTICLE IX DISTRICT EXPANSION  
25
ARTICLE X RULES AND REGULATIONS  
26
10.1
Enforcement
26
10.2
Amendment
26
10.3
Supersession
27
10.4
No Limit on District Authority; Legislative Authority Not Delegated
27
ARTICLE XI EVENTS OF DEFAULT; REMEDIES  
27
11.1
Events of Default
27
11.2
Remedies for Events of Default
28
ARTICLE XII TERMINATION  
29
12.1
Termination
29
12.2
Compliance with Regulations
29
ARTICLE XIII INDEMNIFICATION  
29
13.1
Indemnification by Provider
29
13.2
Indemnity by District
30
13.3
Exclusions and Acknowledgement
30
ARTICLE XIV MODIFICATION OR AMENDMENT  
31
14.1
Material Change in Regulatory Conditions
31
14.2
Other Modifications or Amendments
31
ARTICLE XV MISCELLANEOUS PROVISIONS  
31
15.1
Relationship of the Parties
31
15.2
Liability of Parties
31
15.3
Insurance Requirements
32
15.4
Notices
32
15.5
Representations
33
15.6
Regulatory Approval
33
15.7
Dispute Resolution
34
15.8
Governmental Immunity
36
15.9
No Waiver
36
15.1
Force Majeure
36
15.11
Severability
36
15.12
Form
37
15.13
Integration
37
15.14
Third-Party Beneficiaries
37
15.15
Counterparts
37
15.16
Governing Law
37
15.17
No Presumption
37
15.18
Assignment
38
15.19
Binding Effect; Covenants Run With the Land
38

 
 

 
EXHIBIT INDEX
TITLE
Exhibit A  Definitions
Exhibit B  Property Description
Exhibit C  District Water Rights
Exhibit D  District Facilities
Exhibit E  Taps Planned to be Serviced Upon Build-Out
Exhibit F                       
Undeveloped Lots
Exhibit G  District Rates, Fees and Charges
 
 

 
WATER SERVICE AGREEMENT
This Water Service Agreement (“Agreement”) is entered into to be effective as of
December 15, 2016 (the “Effective Date”), by and between RANGEVIEW METROPOLITAN
DISTRICT, a quasi-municipal corporation and political subdivision of the State
of Colorado, acting by and through its Water Activity Enterprise (“Provider”),
and ELBERT & HIGHWAY 86 COMMERCIAL METROPOLITAN DISTRICT, a quasi-municipal
corporation and political subdivision of the State of Colorado, acting by and
through its Wild Pointe Water Activity Enterprise (“District”).
RECITALS
A.           Capitalized terms used in this Agreement shall have the meanings
set forth or as referenced on Exhibit A or as indicated elsewhere in this
Agreement.
B.           District is responsible for providing water service to customers
within its boundaries and service area, which consists of the real property
located in Elbert County, as more specifically described on Exhibit B attached
hereto (the “Property”).
C.           District has investigated matters relating to the long-term
provision of water services to District Customers and has determined that the
terms and provisions of this Agreement provide an economical, dependable and
beneficial means to provide such services.
D.           District has determined that the execution and performance of this
Agreement will serve a public purpose and promote the health, safety, prosperity
and general welfare of District Customers by providing for the planned and
orderly provision of water service.
AGREEMENT
In consideration of the foregoing, the covenants and agreements set forth
herein, and for other good and valuable consideration, the sufficiency of which
is hereby acknowledged, the parties agree as follows:
ARTICLE I
CLOSING AND CONDITIONS PRECEDENT
1.1           Closing. Subject to the provisions of Sections 1.3 and 1.4, the
closing (the “Closing”) of the transactions hereunder shall take place no later
than February 23, 2017, or on the second business day following the satisfaction
or waiver of all conditions to the obligations of the parties to consummate the
transactions contemplated hereby if satisfaction and waiver occurs prior to
February 23, 2017 (the “Closing Date”), at the offices of Davis Graham & Stubbs
LLP, 1550 Seventeenth Street, Suite 500, Denver, Colorado 80202, or at such
other time and place as the parties may agree.
1.2           Deliveries. At the Closing and in exchange for the exclusive
rights granted by District to Provider under this Agreement, Provider shall
deliver one million six hundred thousand and no/100 dollars ($1,600,000) by wire
transfer of immediately available funds to an account of District designated in
writing by District to Provider, and District shall deliver a bill of sale and
assignment in sufficient form to convey to Provider ownership of the SCADA
system and the automated meter reading system described in Section 6.3(a). In
addition, District and Provider’s designated representatives shall use best
efforts to complete the appointment of two (2) individuals designated by
Provider to the board of directors of the District. The District understands and
acknowledges that the appointment of the two directors is a material provision
and if such appointment cannot be accomplished, this Agreement is subject to
termination pursuant to Section 1.7(d) hereunder.
1.3           Conditions to the Obligations of Each Party. Unless these
conditions are waived in writing by the parties, the obligations of each party
to effect the transactions contemplated by this Agreement shall be subject to
the fulfillment at or prior to the Closing Date of the following conditions:
(a)           No preliminary or permanent injunction or other order, decree or
ruling issued by a governmental authority, nor any statute, rule, regulation or
executive order promulgated or enacted by any governmental authority, shall be
in effect that would make the transactions contemplated by this Agreement
illegal or otherwise prevent the consummation of the transactions contemplated
by this Agreement;
(b)           All waivers, consents, approvals and actions or non-actions of any
governmental authority and of any other third party required to consummate the
transactions contemplated by this Agreement shall have been obtained and shall
not have been reversed, stayed, enjoined, set aside, annulled or suspended,
except for such failures to obtain such waiver, consent, approval or action
which would not be reasonably likely (i) to prevent the consummation of the
transactions contemplated hereby or (ii) to have a material adverse effect on
either party;
(c)           Each party shall have performed or complied, in all material
respects, with each obligation, agreement and covenant to be performed or
complied with by it hereunder at or prior to the Closing Date; and
(d)           The representations and warranties of each party in this Agreement
shall be true and correct on the date of this Agreement and on the Closing Date.
1.4           Additional Conditions to the Obligations of Provider. The
obligations of Provider to effect the transactions contemplated by this
Agreement are also subject to the fulfillment at or prior to the Closing Date of
the following conditions, unless such conditions are waived in writing by
Provider:
(a)           District shall have adopted the District Rules and Regulations
referenced in Section 1.5;
(b)           District shall have delivered the report of Wayne Forman,
referenced in Section 1.6 and complied with the provisions in Section 1.6
related to such report; and
(c)           Provider shall have completed, and in its sole discretion be
satisfied with the results of, its due diligence investigation of District,
including but not limited to the condition of the District Systems.
1.5           District Adoption of Rules and Regulations. A condition precedent
to the Closing and the continued effectiveness and enforceability of this
Agreement shall be District’s adoption and continued maintenance and enforcement
of the rules and regulations of Provider, as such rules and regulations may be
amended from time to time in Provider’s discretion (the “Rangeview Rules and
Regulations”), with only such additions, deletions or modifications thereto as
may be approved in writing by Provider. The Rangeview Rules and Regulations as
adopted by the District with such modifications as are approved by the Provider
shall be hereafter referred to as the “District Rules and Regulations.” The
District Rules and Regulations shall include, without limitation, provisions
that:
(a)           Exclusive Service. Require all District Customers to exclusively
connect to and receive metered water service from the District Water System;
(b)           Rule Updates. Provide for automatic updates to the District Rules
and Regulations effective as of the same date that updates to the Rangeview
Rules and Regulations become effective, except that the following provisions
shall not be updated automatically: (i) provisions of the District Rules and
Regulations that correspond to Article 6, “Fees and Charges;” Article 12, “Water
Fees and Charges;” § 11.2.a, charges for water meters; § 11.3.a, charges for
licenses; § 11.7, charges for pool permits; and § 11.8, credits for dedication
of water, of the Rangeview Rules and Regulations (collectively, the “District
Rates, Fees and Charges”); (ii) any provision in an update which contravenes the
provisions of Title 32, Article 1, C.R.S., or any other law or regulation to
which the District is subject, (iii) any provision in an update which reduces
the rights and privileges of the District in this Agreement, (iv) any provision
in an update which enlarges the rights and privileges of the Provider in this
Agreement or which nullifies any obligation of Provider under this Agreement,
and (v) such other provisions as may be approved in writing by Provider. Any
dispute as to the automatic effectiveness of a provision included in an update
due to subparagraphs (ii)-(iv) above shall be resolved pursuant to the
provisions of Section 15.7.
1.6           Water Report. District shall provide to Provider within sixty (60)
days after the Effective Date, at District’s cost and expense, a letter report
confirming the current state of title with respect to the Water Rights (as
defined in Section 3.1) by Wayne Forman or another attorney of District’s choice
reasonably acceptable to Provider, along with copies of all documents that were
utilized or relied upon by District’s water attorney in preparing the report.
The report shall be based, at a minimum, upon a review of the records of the
Elbert County Clerk and Recorder for the Water Rights and overlying land for a
period reasonably greater than (i) the date of the decree(s) for all of the
Water Rights, or (ii) 1973, whichever is earlier, and a review of the records of
the Colorado Division of Water Resources related to the Water Rights and
overlying land rights. Provider shall have twenty (20) days after receipt of the
report to review the report and notify District of any objections to the state
of title to the Water Rights. If District receives timely written notice of
objections to title to the Water Rights from Provider, it shall within fifteen
(15) days of receipt of such notice, either (i) notify Provider in writing that
District is unable or unwilling to remove or satisfy the matters raised in
Provider’s written objection, in which case Provider shall elect by written
notice to District within ten (10) days of receipt of District’s notice to
terminate this Agreement or be deemed to have waived such objection; or
(ii) notify Provider of District’s intent to remove or satisfy the objection
within such time as may be reasonably required by District to effect the removal
or satisfaction, in which case District shall be entitled to an appropriate
extension of the Closing Date, but in no event longer than sixty (60) days.
Provider shall be deemed to have consented to such extension of time to cure in
favor of District. If District fails to remove or satisfy the objection within
the time specified (and Provider does not waive its objection thereto), this
Agreement shall terminate.
1.7           Termination. This Agreement may be terminated at any time prior to
the Closing Date, or on the Closing Date for subparagraph (d) below, whether
before or after approval of this Agreement and the transactions contemplated
herein:
(a)           by mutual written consent of the parties;
(b)           by either party if the Closing Date shall not have occurred on or
before February 23, 2017; provided, however, that the right to terminate this
Agreement under this Section 1.7(b) shall not be available to any party whose
breach of any obligation under this Agreement has been the cause of, or resulted
in, the failure of the Closing Date to occur on or before such date;
(c)           by either party if a court of competent jurisdiction or other
governmental authority shall have issued an order, decree or ruling or taken any
other action (which order, decree or ruling each of the parties hereto shall use
all reasonable efforts to lift), in each case permanently restraining, enjoining
or otherwise prohibiting the transactions contemplated by this Agreement, and
such order, decree, ruling or other action shall have become final and
non-appealable; or
(d)           by Provider if the appointment of two directors designated by
Provider shall not be accomplished on the Closing Date.
1.8           Effect of Termination. Upon the termination of this Agreement
pursuant to Section 1.7, this Agreement shall forthwith become null and void
without any liability or obligation on the part of any party, except to the
extent that such termination results from the breach by a party of any of its
representations, warranties, covenants or agreements set forth in this
Agreement.
 
ARTICLE II
EXCLUSIVITY
2.1           Exclusive Service. Provider shall have the sole and exclusive
right to furnish water services to the District, and the District shall require
all District Customers to receive service from the District.
2.2           Exclusive License to Water Rights. Effective as of the Closing
Date, District hereby grants Provider an exclusive license to use, re-use,
treat, and distribute the Water Rights, including the return flows therefrom, in
accordance with the water decrees by which such Water Rights have been or may be
adjudicated (i) for the purpose of furnishing water service to District
Customers in accordance with the terms of this Agreement, and (ii) for other
such purposes as Provider deems appropriate as long as such other uses do not
impair water service to District Customers.
2.3           Use of District Water System, Easements and Property Interests.
Effective as of the Closing Date, District hereby grants to Provider an
exclusive license to use the District Water System for the purposes of and
pursuant to the provisions of this Agreement and a non-exclusive license to use
any easements, rights-of-way or other property interests held or owned by
District, or hereafter acquired by District, as may reasonably be required or
useful to accommodate (i) Provider’s operation and maintenance of the District
Water System and (ii) subject to the limitation set forth in Section 2.2,
Provider’s distribution of the Water Rights. District shall reasonably cooperate
with Provider to enable Provider to obtain, on District’s behalf, such
additional easements, rights-of-way or other property interests reasonably
required to enable Provider to perform its obligations under this Agreement. If
Provider recommends or District requires that the location of any easements,
rights-of-way or other property interests be adjusted, the parties agree to
cooperatively work together on relocating easements (and any water facilities
that may exist therein or that may be affected by the relocation). The
District’s cooperation does not create any obligation for the District to
purchase or provide funds in any manner, or to expend funds in any manner to
obtain, acquire or relocate the additional easements, rights-of-way or other
property interests described herein.
2.4           Limitations. Provider acknowledges that unless expressly agreed to
by the District in writing, the Water Rights, the District Water System, the
rights-of-way and any other rights of the District with respect to the Water
Rights and the District Water System shall not be used for any business or other
purpose except as permitted by this Agreement.
2.5           Provider Facilities. District acknowledges that Provider owns and
operates other water rights and water, irrigation water, and wastewater
facilities to provide water and wastewater services to customers other than the
District and District Customers, and in the absence of a written agreement to
the contrary, Provider shall have no obligation to use such other water rights
or facilities to provide service to the Property or District Customers.
 
ARTICLE III
WATER SOURCES
3.1           District Water. District owns the water rights, as more
specifically described on Exhibit C attached hereto (the “Water Rights”).
Subject to the license granted to Provider in Section 2.2, District shall retain
ownership, dominion and control of the Water Rights, and other water owned or
legally available to District, including the right to use and reuse said water
until extinction.
3.2           Non-Potable Water. Provider and District agree that the District’s
Customers would be best served, where feasible and if economically viable in the
opinion of each of Provider and District, to: (i) develop the District Water
System to include a “dual pipe distribution system”; and (ii) use non-potable
water for non-residential irrigation purposes including, but not limited to,
common areas, parks, community spaces, schools, and other open spaces.
3.3           Reuse Water. District Customers shall not have any right to make a
succession of uses of the Water Rights. Provider shall have the exclusive right
to make any subsequent uses of the Water Rights for augmentation water, delivery
of non-potable water, or other uses in the sole discretion of Provider.
3.4           Service Restrictions . The parties agree that Provider may, in
order to comply with any applicable law, rule, directive or order, and to enable
it to provide adequate services to District Customers, in times of shortage or
other practical or legal limitations on the ability of Provider to provide the
services contemplated hereby, limit the delivery of water services, and/or
restrict the use of water delivered hereunder. The extent to which limitation of
services may be necessary to enable Provider to provide adequately for all
District Customers is a fact to be determined by Provider as circumstances may
require. The current policy to be applied by the Provider with respect to its
operations on behalf of the District, which will not be changed without good
reason, is as follows:
The welfare of District’s customers requires stable water services. While it is
the purpose of District to maintain systems and supplies adequate to meet the
needs of all dependent upon District for water services, there are many elements
which make it uncertain whether such services can always be adequate for all,
and therefore in times of shortage or other practical or legal limitation, water
use, and therefore the use of District’s systems, will be curtailed on the
following basis, the first listed curtailment being adopted to meet the least
serious situation and the succeeding curtailment being adopted in addition to
prior listed curtailments, the last to meet the gravest possible situation and
one which reasonable precautions must be taken to avoid, to-wit:
a.           Restriction of uses (such as irrigation), which can be accomplished
without serious injury to person or property and prohibition of non-essential
uses.
b.           Prohibition of irrigation except for commercial greenhouses.
c.           Prohibition of every use except for domestic use and for essential
commercial enterprises and industry.
d.           Prohibition of all use except domestic uses.
Such curtailments shall be imposed, if at all, uniformly upon the Property and
other areas served by Provider using the Water Rights or District Water System;
provided, however, in the event of a failure of the District Water System,
action of a governmental authority particularly affecting the Property or other
cause to curtail service in only the Property, Provider may act to curtail
service only in the Property. Provider shall give District written notice prior
to the enactment of any restriction in service at least (30) days in advance, if
practicable, and if not, as far in advance as is practicable. Such notice shall
provide all information in Provider’s possession that has caused it to conclude
that restrictions are necessary. Upon implementation of the restriction of
service, Provider shall provide notice no less than weekly to District
concerning any change in the circumstances that led to the restrictions and an
estimate of when the restrictions will be lifted or enlarged.
ARTICLE IV
OWNERSHIP, OPERATION, AND MAINTENANCE OF FACILITIES
4.1           Categories of Facilities and Ownership
.
(a)           District Facilities. District owns or plans to own upon build-out
the facilities comprising the District Water System, as more specifically
described on Exhibit D attached hereto, to provide water services District
Customers. District shall retain (i) ownership of and (ii) except to the extent
provided in Section 4.3 (with respect to replacing facilities exceeding their
useful life) and Section 4.6, sole responsibility for financing and constructing
all Wholesale and Retail Facilities that now exist or may be constructed in the
future to provide potable and non-potable water service to District Customers.
Exhibit E attached hereto sets forth the following information with respect to
taps planned to be serviced by the District Water System upon build-out: (x) the
number of unpaid residential taps remaining; (y) the number of taps purchased
for homes under construction; and (z) the number of unpaid commercial taps
remaining. Exhibit F attached hereto consists of a map of the remaining
undeveloped lots on the Property and sets forth the owner of each such lot. The
District represents and warrants that as of the Effective Date the information
set forth on Exhibits B, C, D, and E, and, to its knowledge, the information set
forth on Exhibit F, is true and complete in all material respects. Except as set
forth in Section 1.3(d), the District has no continuing obligation to update the
information in Exhibits B, C, D and E.
(b)           Customer Facilities. Customer Facilities means service pipelines,
meters, plumbing and related appurtenances necessary and appropriate to deliver
potable water service from the point of connection from the District Water
System and, if applicable, irrigation water service from the point of connection
from the District Irrigation Water System to individual District Customers.
District Customers shall retain ownership and responsibility for the
construction, maintenance, expansion, extension or modification of all Customer
Facilities in compliance with District Rules and Regulations.
(c)           Special Facilities. Responsibility for construction and operation
of specific Special Facilities will be determined by separate agreements.
Examples of Special Facilities include, but are not limited to, pumping stations
or additional storage facilities that may be necessary to serve a specific site
or location.
4.2           Service Commitment. Commencing on the Closing Date and subject to
the terms of this Agreement, Provider shall provide water services to District
Customers using the Water Rights and the District Water System, including (i)
withdrawing and treating the Water Rights using the District Wholesale
Facilities and delivering the Water Rights to the Customer Facilities and (ii)
operating and maintaining (including repairing and replacing) the District Water
System.
4.3           Provider Obligations. Provider shall operate and maintain the
District Water System in compliance with all applicable laws and regulations, in
a commercially reasonable time and manner consistent with prudent water service
provider practices in Colorado and in accordance with this Agreement and the
District Rules and Regulations. Maintenance of the District Water System
includes the obligation to replace the District Water System as necessary based
on the useful life of the facilities and components comprising the District
Water System.
(a)           Duties. Provider shall employ or contract with such engineers
and/or qualified operators as it deems appropriate to perform the duties of
operating the District Water System, including the following:
(i)           cooperating with state, county, local and federal authorities in
providing such tests as are necessary to maintain compliance with appropriate
governmental standards;
(ii)           supervising the connection of Customer Facilities to District
Water System after the issuance of taps by the District to New Customers and
recording such connections for billing proposes in accordance with Section 5.1;
(iii)           coordinating construction with various utility companies to
ensure minimum interference with the District Water System;
(iv)           performing all maintenance and repairs necessary to continue the
efficient operation of the District Water System;
(v)           providing for emergency preparedness to provide response to
emergencies, including, but not limited to, interruption of services because of
line breaks, freeze-up or other mechanical problems; and
(vi)           providing monthly billing to District Customers, collection
efforts and enforcement of the District Rules and Regulations.
(b)           Contractors. To the extent Provider engages contractors, it shall
require such contractors to maintain bonds and insurance, including workers’
compensation insurance, in compliance with applicable laws and regulations,
including the District Rules and Regulations.
(c)           Control of Service. Subject to the terms of this Agreement,
Provider shall have the responsibility for and control over the details and
means for providing the services hereunder.
(d)           Authorizations. Provider shall, at its own expense, apply for and
obtain all necessary permits, licenses, and other authorizations that may be
required by any governmental authority for Provider to operate and maintain the
District Water System in accordance with the terms of this Agreement. District
shall cooperate with and provide such reasonable assistance to Provider as
Provider may request in obtaining such authorizations.
(e)           Taxes. Provider shall be solely responsible for and shall pay all
taxes, fees, charges and assessments, if any, in connection with the work or the
materials to be utilized in accomplishing the activities of Provider pursuant to
this Agreement.
(f)           Financing. Provider shall be responsible for financing its
obligations hereunder with the funds it receives pursuant to this Agreement or
from such other sources as it deems desirable.
4.4           Oversized Facilities. If Provider requests that the District
oversize the District Water System, or a portion thereof, for the purpose of
allowing Provider to provide water service to customers other than District
Customers, the parties shall enter into a separate cost-recovery agreement prior
to the time of construction of the oversized facilities in question. Absent such
a cost-recovery agreement, District shall have no obligation to construct
oversized District facilities under this Section unless (i) construction of the
oversized District facilities is required by law, or (ii) Provider deposits
funds into an escrow account, on terms and conditions reasonably acceptable to
the District, for the estimated cost of the oversizing and pays the actual costs
attributable to such oversizing, and (iii) Provider acquires any additional
easements or interests in land required by the oversizing at Provider’s sole
expense.
4.5           District Obligations.
(a)           Construction. District has constructed the District Water System
in substantial compliance with all applicable laws and regulations. District
shall construct or cause to be constructed all future portions the District
Water System, at its sole expense, in compliance with all applicable laws and
regulations, in a commercially reasonable time and manner consistent with
prudent water service provider practices in Colorado, and in accordance with
this Agreement and the District Rules and Regulations. With respect to the
construction of the District Water System, the District agrees as follows:
(i)           to construct or cause to be constructed the proposed portions of
the District Water System in compliance with the final plans and specifications;
(ii)           to permit Provider or its designee to observe and inspect any and
all construction operations;
(iii)           to give reasonable notification (in any event not less than 48
hours) of the time proposed to make connections to the existing District Water
System;
(iv)           to acquire all necessary easements, rights-of-way or other
property interests, at its expense, for the proposed facilities; and
(v)           to contract for work and materials in accordance with all
applicable laws and regulations.
(b)           Contractors. To the extent District engages contractors, it shall
require such contractors to maintain bonds and insurance, including workers’
compensation insurance, in compliance with applicable laws and regulations,
including the District Rules and Regulations.
(c)           Authorizations. District shall, at its own expense, apply for and
obtain all necessary permits, licenses and other authorizations that may be
required by any governmental authority with respect to the ownership, financing,
and construction of the District Water System and the acquisition and
maintenance of the Water Rights (including obtaining and complying with any
decrees of the Colorado Water Court and continuing due diligence obligations).
Provider shall cooperate with and provide such reasonable assistance to District
as District may request in obtaining such authorizations.
(d)           Plan Access. District shall make available to Provider copies of
any and all designs, plans, specifications, construction drawings, construction
contracts and related documents concerning the District Water System as Provider
may request from time to time.
(e)           Unauthorized Taps. District shall be responsible for enforcing the
District Rules and Regulations, including, without limitation, taking such
actions as are required to prevent unauthorized connections to the District
Water System. If District fails to report any unauthorized connections to
Provider, District shall be fully liable for payment of all District Rates,
Fees, and Charges attributable to such unauthorized connections.
(f)           Warranty and Claims Enforcement. District shall timely submit and
pursue any warranty, insurance, damage or other claims District has against a
third party with respect to the Water Rights and/or District Water System or
provide appropriate authorization to Provider to enable it on District’s behalf
to timely submit and pursue any such claim, and if the claim relates to a loss
which Provider is to repair pursuant to Section 4.3 or relates to a System Loss
that District wants Provider to handle on District’s behalf pursuant to
Section 4.6, District shall make the proceeds of such claim available to
Provider to repair the Water Rights and/or District Water System, as applicable.
(g)           Facility Locations. District will provide or make available to
Provider copies of all “as-built” drawings and/or GIS mapping files for all
facility locations, as well as copies of well completion reports for all wells
supplying the District Water System.
(h)           Operation and Maintenance Records. District will provide or make
available to Provider copies of all records related to the operation and
maintenance of the Water Rights and the District Water System, including, but
not limited to, maintenance logs, water quality test results, recall notices,
warranties, notices from and correspondence with the Colorado Department of
Public Health and Environment and any other governmental authorities related to
the Water Rights or District Water System.
(i)           Condition of District Water System and Water Rights. District
shall be solely responsible for any and all losses, labilities, damages, costs,
and claims of any and every kind whatsoever related to the existence and
condition of the District Water System and the Water Rights (a “System Loss”),
other than a condition caused by Provider’s failure to operate and maintain the
District Water System in accordance with the terms of this Agreement. District’s
responsibility with respect to any System Loss includes, but is not limited to,
any design or construction defect of the District Water System except those
portions of the District Water System repaired or replaced by Provider pursuant
to Section 4.3, any inadequacy of the Water Rights or the District Water System
as constructed by District but not including those portions of the District
Water System repaired or replaced by Provider pursuant to Section 4.3, any
violations of applicable laws or regulations with respect to the District Water
System or Water Rights not caused by Provider’s operation and maintenance of the
District Water System, and any damage or destruction to the District Water
System or Water Rights by fire or other casualty or contamination not caused by
Provider’s operation and maintenance of the District Water System. Providers’
obligations with respect to operating and maintaining the District Water System
hereunder include the obligation to maintain and repair the District Water
System due to normal wear and tear caused in the ordinary course of business and
to replace the District Water System as necessary based on its useful life in
order to maintain the functionality required to provide water service to the
Property. In all other instances, except as otherwise provided in Section 4.6,
District shall diligently and continuously prosecute the necessary
reconstruction, replacement, decontamination or other efforts required to
restore the Water Rights and District Water System to enable District and
Provider to provide water service as soon as practicable to the Property in
accordance with the terms of this Agreement and all applicable laws and
regulations.
4.6           Cost Recovery for System Loss
. In the event of any System Loss, Provider shall, at the request of the
District, conduct the necessary reconstruction, replacement, decontamination or
other efforts to restore the Water Rights and District Water System on
District’s behalf subject to the following conditions:
(a)           Cost Plus Basis. Provider shall be reimbursed in full for the
total cost incurred by it to restore the Water Rights and District Water System
plus an additional percentage rate of return in the amount specified by Provider
as consideration for its efforts in restoring the Water Rights and District
Water System. Provider must bid any work if and as required by C.R.S.
§ 32-1-1001(d), as amended. If the District does not use the Provider for the
necessary reconstruction, replacement, decontamination or other efforts, the
Provider shall fully cooperate in providing all necessary access to the entity
working on the District Water System.
(b)           System Loss Covered by Warranty, Insurance and Other Claims. If
the System Loss is covered by any warranty, insurance, damage or other claim the
District has against a third party with respect to the Water Rights and/or
District Water System, District shall comply with the procedures set forth in
Section 4.5(f).
(c)           Interim Rate Study. If a System Loss is not sufficiently covered
by a third party claim, the parties agree that an interim rate study will be
performed in accordance with Section 7.2 to determine the costs to be incurred
and possible recovery mechanisms. Each of District and Provider shall pay fifty
percent (50%) of the cost of such study.
(d)           Implementation of Cost Recovery Mechanism. District and Provider
shall mutually work together to determine how the cost recovery process should
be implemented to finance the necessary efforts to restore the Water Rights and
District Water System, which may include, among other things, increasing
existing District Rates, Fees and Charges, adding new rates, fees and charges,
including special assessments, or other financing mechanisms to fund the
restoration efforts. Other financing mechanisms could include, among other
things, allocating special assessments or new rates, fees and charges to secure
repayment of District bonds or loans. Any dispute regarding the appropriate cost
recovery mechanism and implementation thereof shall be resolved pursuant to the
provisions of Section 15.7.
 
ARTICLE V
RECORDS AND INSPECTIONS
5.1           Records Maintained by Provider. Provider shall keep and maintain
accurate records of all contracts and expenses related to the District Water
System and all other records necessary for the orderly administration and
operation of the District Water System that are required to be kept by
applicable laws and regulations or are of the type generally maintained
consistent with prudent water provider practices in Colorado. Provider shall
provide to District: (i) annual budgets and operating plans with respect to the
District Water System not later than October 1 of each year for the following
year; (ii) annual reports on the status of the District Water System within
twenty (20) days of the end of each calendar year; and (iii) such other
information as District may reasonably request in order to assure itself that
the water demands of District are being adequately provided for, to comply with
its obligations under applicable laws and regulations, and to assist District in
its long-term planning efforts.
5.2           Records Maintained by District. District shall keep and maintain
(i) accurate books, records and accounts of all collections and disbursements of
District Rates, Fees and Charges; (ii) records related to the issuance of taps;
and (iii) such other records as may be required by applicable laws and
regulations.
5.3           Inspection of District Records. Provider shall have the right,
upon ten (10) days’ prior written notice, to inspect the District’s records
maintained hereunder to verify the District’s compliance with this Agreement
including, without limitation the payment obligation set forth in Article VI.
5.4           Audit of District Records. Provider may, upon not less than thirty
(30) days’ prior written notice to District, cause at Provider’s expense a
partial or complete audit of all District records related to the issuance of
taps, collection and disbursement of District Rates, Fees and Charges and such
other matters as may be reasonably related to determine District’s compliance
with its payment obligations to Provider under this Agreement, including without
limitation, the amounts required under Article VI. Following completion of the
audit, Provider shall submit a written report to District detailing any
deficiencies determined upon such inspection or audit, if any (a “Deficiency
Notice”). In the event that the District disputes any finding of the Deficiency
Notice, and said dispute is not resolved within thirty (30) days’ of the
delivery of the Deficiency Notice, such dispute shall be submitted to mediation
pursuant to Section 15.7. Any finally determined deficiency shall be immediately
due and payable by District together with simple interest thereon at the rate of
ten percent (10%) per annum from the date or dates such amounts should have been
paid. If the deficiency is in excess of five percent (5%) of the revenues
previously paid by District for the period covered by the audit, then District
shall also pay Provider the actual cost of the audit. Such inspection right and
audit right may be exercised no more than one time each fiscal year of District,
except if the prior inspection showed a deficiency in excess of five percent
(5%), in which case an additional inspection may commence at any time prior to
the end of the third fiscal quarter of District in the year following the audit
period showing such deficiency.
5.5           Inspection of Provider Records. District shall have the right,
upon ten (10) days’ prior written notice, to inspect all records maintained by
Provider related to the District Water System. Such rights may be exercised no
more often than once each fiscal year of District, unless Provider otherwise
agrees.
 
ARTICLE VI
BILLING AND RATES, FEES AND CHARGES
6.1           District Rates, Fees and Charges (a)  . District shall assess all
District Rates, Fees and Charges for the use and maintenance of the District
Water System in accordance with the District Rules and Regulations. All District
Rates, Fees, and Charges established in this Section 6.1 shall initially be
assessed at the amounts set forth on Exhibit G, attached hereto and are subject
to adjustment pursuant to Article VII. Commencing on the Closing Date and
thereafter, District shall remit to Provider all District Rates, Fees and
Charges received by District in accordance with Section 6.3(b).
6.2           Updates to District Rates, Fees and Charges. Section numbers set
forth next to the rates, fees and charges on Exhibit G correspond to the section
numbers in the current version of the Rangeview Rules and Regulations.
Notwithstanding Section 1.5, the section numbers and the description of the
rates, fees, and charges shall be automatically updated to correspond to any
revisions to the Rangeview Rules and Regulations, and if the Rangeview Rules and
Regulations are amended to provide for additional rates, fees or charges related
to water service, such additional rates, fees or charges shall be added to
Exhibit G and the District Rules and Regulations.
6.3           Billing.
(a)           Provider shall read the meters and bill District Customers for
water services provided hereunder, including all Water System Development Fees,
consumption and other District Rates, Fees and Charges on behalf of District and
in accordance with the District Rules and Regulations. The bills shall provide
that payment shall be made by District Customers to District at an address
designated by District. At the Closing, District shall transfer ownership of all
components of the Supervisory Control and Data Acquisition (SCADA) system and
the automated meter reading system to Provider so Provider can read the meters
and bill District Customers as required by this Agreement.
(b)           Provider shall be responsible for collection efforts on delinquent
accounts and District hereby delegates to Provider, to the extent permitted by
law, all authority of the District in the name of and on behalf of the District
to conduct collection efforts on delinquent accounts, including the authority to
exercise all remedies available to the District, including but not limited to
shutting of water service and placing liens on the property for which water
service accounts are delinquent. Provider shall not take any actions in
contravention of the requirements of Title 32, Article 1, C.R.S. District shall
sign any authorizations or take such other actions as may be reasonably required
to enable Provider to act on District’s behalf. District shall pay Provider on
or before the 15th day of each month one hundred percent (100%) of all Water
System Development Fees and other District Rates, Fees and Charges collected
from District Customers in the previous month. Failure of District to make any
payments required under this Article VI when due shall constitute an Event of
Default pursuant to Article XI and, in addition to any other remedy available to
Provider, District shall remain obligated to pay any such amounts together with
interest at the rate of eighteen percent (18%) per annum until fully paid.
 
ARTICLE VII
RATES, FEES AND CHARGES; ADJUSTMENTS
7.1           Adjustments to Rates, Fees and Charges. Commencing in February
2017, and in February for every year thereafter unless otherwise determined by a
rate study (in accordance with the provisions of Section 7.2), the Water
Consumption Charges shall be adjusted. The rate of adjustment shall be computed
by the percentage change for the period from the second half of the year two
years prior to the second half of the prior year for the All Urban Consumers
(CPI-U) for the Denver-Boulder-Greeley, Colo., metropolitan area, all items less
food and energy, as published by the U.S. Bureau of Labor Statistics, By way of
example, on February 1, 2017, the Water Consumption Charges will change by the
percentage change of the CPI-U published for the second half of 2015 to the
second half of 2016. The CPI-U for the Denver-Boulder-Greeley, Colo.,
metropolitan area can be accessed at:
http://www.bls.gov/regions/mountain-plains/‌news-release/‌consumerpriceindex_denver.htm
7.2           Rate Studies. Notwithstanding the generally applicable rate
adjustment set forth in Section 7.1, unless otherwise agreed by the parties: (i)
rate studies shall be performed every three (3) years in the third quarter of
the applicable year, with the first such study to occur in the third quarter of
District’s 2019 fiscal year; and (ii) Provider and District shall meet in the
second quarter of each year (with the first such meeting to occur in 2017) to
determine whether an interim rate study is desirable or required. All rate
studies to be performed hereunder shall be subject to the following terms,
provisions and requirements:
(a)           Consultant Qualifications. Rate studies shall be performed by a
consultant with experience in setting water rates jointly selected and
supervised by District and Provider, using assumptions mutually agreed upon
between District and Provider.
(b)           Cost of Studies. Each of the District and Provider shall pay fifty
percent (50%) of the costs of (i) rate studies required under this Section and
(ii) interim rate studies conducted pursuant to subsection (c)(i) and (c)(ii)
below.
(c)           Interim Studies. Interim rate studies will be performed: (i) if
the parties mutually determine that an interim rate study is desirable or
required; (ii) if changes are required that will materially increase the cost of
providing water service as contemplated by this Agreement, including but not
limited to changes required to the Water Supply, the District Water System, or
the operation and maintenance procedures of the District Water System due to new
or revised statutory or regulatory criteria applicable to the Water Rights or
the District Water System, events of force majeure, or other causes (a “Material
Event”), or (iii) upon the request of either party. Unless otherwise agreed upon
by the parties, the party requesting an interim rate study pursuant to
subsection (iii) shall be responsible for the cost of the interim rate study. If
either party disputes whether a Material Event has occurred, then the parties
shall utilize the dispute resolution process described herein prior to
initiating the interim study.
(d)           Material Event. In the case of a Material Event, Provider shall
detail the specifics of the recovery of the investment required due to the
Material Event, including an amortization schedule and cost of capital. The
District may elect to have Provider make the necessary investment or it may seek
other parties to make such investment, and in either case the costs will be
recovered through a rate adjustment as determined through a rate study. Provider
or District, as applicable shall bid any work if and as required by C.R.S.
§ 32-1-1001(d), as amended. Any rate adjustment attributable to such investment
shall be allocated proportionately among the parties (the Provider, the
District, or a third party) and/or instruments (i.e. debt) providing the
funding.
7.3           Effectiveness of Adjusted Rates, Fees and Charges. Except as
provided in Section 7.2(c), adjustments to the Water Consumption Charges shall
be made no more frequently than once a year, and any such adjustments shall
become effective on the March 1 next following the date of determination of the
adjustments. District shall, from time to time, adopt or take such other legal
actions as may be required to give timely effect to such adjusted rates.
7.4           Fairness. District agrees that the terms of this Agreement,
including without limitation, the procedures for establishing and adjusting
rates, fees and charges, are fair and reasonable and shall be deemed in all
respects to be rationally related to their legitimate governmental purpose.
 
ARTICLE VIII
EXISTING AGREEMENTS
District represents and warrants to Provider that District is not a party to any
existing agreements regarding the provision of water and/or the collection of
rates, fees, or charges related to same. Any loss, cost, expense or damage
suffered or incurred by Provider based on or arising from the inaccuracy of such
representation and warranty, including but not limited to loss of revenues by
Provider, shall be the responsibility of the District and shall be payable to
Provider on demand and such payment shall accrue interest at the statutory rate
of interest as provided in C.R.S. § 13-21-101(3) until paid in full.
 
ARTICLE IX
DISTRICT EXPANSION
The District service area as of the Effective Date is set forth on Exhibit B
attached hereto. Nothing herein shall be interpreted or construed as limiting
the District’s authority to expand its boundaries by including new areas into
its boundaries, nor shall anything herein be interpreted or construed as
requiring the District to expand its boundaries. The parties will communicate
with respect to master planning for water service within the District, including
those areas anticipated or otherwise being considered for inclusion. Prior to
including any such areas and during the period of its consideration of an
inclusion agreement, District shall provide notice to Provider of the proposed
inclusion and afford Provider reasonable and meaningful opportunity to comment
with respect to water service issues relating to any such area. Provider shall
have the exclusive first right, but not the obligation, to provide water service
on behalf of the District to any property included in such expansion area. The
inclusion agreement covering such area shall expressly provide that water
service to the included area shall be subject to the terms of this Agreement and
the applicable District Rules and Regulations. If Provider declines to provide
water service to the proposed inclusion, District is free to obtain water
service by any means it deems appropriate; provided, however, District may not
use any portion of the existing District Water System in arranging service to
the newly included areas without Provider’s consent.
ARTICLE X
RULES AND REGULATIONS
10.1           Enforcement. District shall enforce compliance with the District
Rules and Regulations to the extent necessary to comply with the terms of this
Agreement, and District’s failure to enforce such District Rules and Regulations
in accordance herewith shall constitute an Event of Default under this
Agreement.
10.2           Amendment. The parties acknowledge that the District Rules and
Regulations may need to be amended from time to time and agree that, during the
term of this Agreement, the District shall provide no less than thirty (30) days
prior notice to Provider before the District adopts or approves any amendment to
the District Rules and Regulations. If Provider advises the District that it
believes the amended District Rules and Regulations will materially affect the
performance of the parties under this Agreement, said amendment shall be the
subject of a dispute to be resolved pursuant to the provisions of Section 15.7.
10.3           Supersession. If and to the extent there is any inconsistency
between the terms, covenants or provisions hereof and the District Rules and
Regulations, the terms, covenants and provisions of this Agreement shall
supersede and be controlling unless otherwise mutually agreed upon in writing by
the parties.
10.4           No Limit on District Authority; Legislative Authority Not
Delegated. Nothing herein shall be interpreted or construed as limiting the
District’s right to make and enforce ordinances, rules and regulations not
inconsistent with the terms of this Agreement. Nothing herein is intended to
delegate to Provider the legislative authority of the District, which is
reserved entirely to the District notwithstanding any provisions of this
Agreement.
 
ARTICLE XI
EVENTS OF DEFAULT; REMEDIES
11.1           Events of Default. The occurrence or existence of any one or more
of the following events shall be an Event of Default under this Agreement, and
there shall be no Event of Default hereunder except as follows:
(a)           Non-Enforcement of Rules. District fails or refuses to enforce the
District Rules and Regulations required by this Agreement;
(b)           Non-Payment. District fails or refuses to make any payment to
Provider required under this Agreement when due;
(c)           Untrue Representations. Any representation or warranty made by any
party in this Agreement proves to have been untrue or incomplete in any material
respect when made and such untruth or incompletion would have a materially
adverse effect upon the other party;
(d)           Failure to Perform. Any party fails in the performance of any
other of its covenants in this Agreement and such failure continues for thirty
(30) days after written notice specifying such default is given by the
non-defaulting party; provided, however, if the default is of a type which
cannot be cured within such thirty (30) day period, the cure period shall be
extended by the non-defaulting party if the defaulting party has commenced to
cure the default within thirty (30) days and at all times thereafter actively
and diligently continues to pursue the cure;
(e)           Insolvency or Dissolution. Proceedings under any bankruptcy law or
insolvency act or for the dissolution of a party shall be instituted by or
against a party, or a receiver or trustee shall be appointed for all or
substantially all of the property of a party, and such proceeding shall not be
dismissed or such receivership or trusteeship vacated within sixty (60) days
after such institution or appointment; provided, however, that if a party seeks
to dissolve pursuant to C.R.S. § 32-1-701, et  seq., as amended and (i) it
notifies the other party in writing concurrently with filing the application for
dissolution, and (ii) the plan for dissolution shall include provisions for
continuation of this Agreement with a responsible party acceptable to the other
party being substituted as a party to this Agreement, and such substituted party
assumes all obligations and rights of the dissolving party hereunder, then such
dissolution shall not be a default.
11.2           Remedies for Events of Default.
(a)           Enforcement Rights. Upon the occurrence of an Event of Default,
the non-defaulting party may proceed to protect and enforce its rights against
the party causing the Event of Default by mandamus or such other suit, action or
special proceedings in equity or at law, in any court of competent jurisdiction,
including an action for damages or specific performance, or by self-help. In the
event of any litigation or other proceeding to enforce any of the terms,
covenants or conditions hereof, the prevailing party in such litigation or other
proceeding shall obtain, as part of its judgment or award, its reasonable
attorneys’ fees and costs.
(b)           Limited Termination Rights. Upon the occurrence of an Event of
Default, and after the non-defaulting party proceeds in accordance with Section
11.2(a), the non-defaulting party shall be permitted to terminate this Agreement
only upon sixty (60) days advance written notice to the defaulting party and
only if: (i) monetary damages are not paid by the defaulting party when due or
(ii) the defaulting party refuses to perform its obligations hereunder.
 
ARTICLE XII
TERMINATION
12.1           Termination. Except as provided in Section 11.2(b) and Section
1.7, this Agreement shall remain in force unless terminated by mutual written
agreement of the parties.
12.2           Compliance with Regulations. The parties understand and agree
that compliance with all applicable federal and state regulations must take
place at all times. In the event of any termination of this Agreement, with or
without cause, the parties shall cooperate to ensure that there is no gap or
break in the compliance with all applicable regulations in the provision of
service to District Customers during the transition of service, including the
payment of all applicable District Rates, Fees and Charges.
 
ARTICLE XIII
INDEMNIFICATION
13.1           Indemnification by Provider. To the extent authorized by law,
Provider agrees to indemnify District from and against any loss, cost, liability
or expense (including reasonable attorneys’ fees) reasonably incurred by
District, including both third-party and direct claims, arising out of or
related to (i)  any failure of Provider to operate or maintain the District
Water System in compliance with applicable laws and regulations, including, but
not limited to, Environmental Laws; and (ii) the negligent acts or omissions of
Provider, its officers, directors, employees, agents and consultants in the
course of performing Provider’s obligations under this Agreement.
13.2           Indemnity by District. To the extent authorized by law, District
agrees to indemnify Provider from and against any loss, cost liability or
expense (including reasonable attorneys’ fees) reasonably incurred by Provider,
including without limitation, both third-party and direct claims, arising out of
or related to (i) the finance, design, ownership, or construction of the
District Water System, including but not limited to, any failure of the District
Water System or Water Rights to comply with applicable laws and regulations,
including, but not limited to, Environmental Laws; (ii) the operation and
maintenance of the District Water System and Water Rights prior to the Closing
Date; and (iii) the negligent acts or omissions of District, its officers,
directors, employees, agents and consultants in the course of performing
District’s obligations under this Agreement.
13.3           Exclusions and Acknowledgement. Notwithstanding the foregoing or
any other indemnification provision in this Agreement, no party shall have a
duty under this Agreement to indemnify and/or hold another party harmless from
or against any loss, cost, liability or expense to the extent caused or
contributed by the act or failure to act of the other party (including its
officers, directors, employees, agents and consultants). Further, the parties
hereto understand and acknowledge that Colorado law does not currently enforce
indemnity clauses entered into by Colorado local governments in contracts.  The
District and the Provider are Colorado local governments and neither provides to
the other any assurance or warranty that the indemnification provided herein
would be enforced in any Colorado court or in any proceeding under Colorado law.
 
ARTICLE XIV
MODIFICATION OR AMENDMENT
14.1           Material Change in Regulatory Conditions. In the event any state,
federal or local entity shall materially change any regulatory conditions
applicable to the provision of water service under this Agreement, the parties
agree that they shall expeditiously work together in good faith to modify or
amend this Agreement as necessary to comply, in a commercially reasonable
manner, with the changed regulations without otherwise materially changing the
terms and conditions of this Agreement.
14.2           Other Modifications or Amendments. This Agreement shall not be
modified or amended without the consent of both parties. No modification or
amendment shall be effective unless in writing, executed by all parties.
 
ARTICLE XV
MISCELLANEOUS PROVISIONS
15.1           Relationship of the Parties. Nothing contained in this Agreement
creates a joint venture, partnership, agency or similar endeavor between the
parties. Each party is acting solely as an independent contractor, and neither
party has any power or authority to directly or indirectly bind or act on behalf
of the other.
15.2           Liability of Parties. Nothing contained in this Agreement, nor
any obligation imposed upon a party hereunder, nor the issuance and sale of
bonds by a party, shall constitute or create an indebtedness of the other party.
Neither party shall have any obligation whatsoever to repay any debt or
liability of the other party.
15.3           Insurance Requirements.
(a)           District-Required Insurance. District shall maintain in full force
and effect, throughout the term of this Agreement, property damage and liability
insurance with respect to all water facilities owned by District and District’s
duties hereunder, consistent with insurance practices and coverages of prudent
local governments similarly situated.
(b)           Provider-Required Insurance. Provider shall maintain in full force
and effect, throughout the term of this Agreement, property damage and liability
insurance with respect to Provider’s duties hereunder, consistent with insurance
practices and coverages of prudent water system operators similarly situated.
15.4           Notices. Except as otherwise provided herein, all notices
required to be given under this Agreement shall be in writing and shall be
hand-delivered, sent by registered or certified mail, return receipt requested,
or electronically confirmed email transmission to the following addresses:
District:
Elbert & Highway 86 Commercial Metropolitan District Attn: District Managerc/o
CliftonLarsonAllen8390 E Crescent Parkway, Suite 500Greenwood Village, CO
80111Email: denise.denslow@claconnect.com
 
With a copy to:
Dianne D Miller
Miller & Associates Law Offices, LLC
1641 California Street, Suite 300
Denver CO 80202
Email: dmiller@ddmalaw.com
 
Provider:
Rangeview Metropolitan DistrictAttn: President141 Union Boulevard, Suite
150Lakewood, CO 80223Email: mharding@purecyclewater.com
 
With copy to:
Wanda J. Abel, Esq.Davis Graham & Stubbs LLP1550 – 17th Street, Suite 500Denver,
CO 80202Email: wanda.abel@dgslaw.com
 

All notices will be deemed effective: if delivered by hand on the date of
delivery; if mailed, three (3) days after mailing; and, if by email, upon
electronic confirmation of delivery. Any party may by written notice change the
address to which future notices shall be sent.
15.5           Representations. Each party represents and warrants that:
(a)           Authority. It has all requisite power, corporate and otherwise, to
execute, deliver and perform its obligations pursuant to this Agreement, that
such actions have been duly authorized by it, and that upon execution and
delivery of this Agreement, the provisions hereof will constitute its legal,
valid and binding obligation, enforceable against it in accordance with the
terms hereof;
(b)           No Litigation. There is no action, suit, inquiry, investigation or
proceeding to which it is a party, at law or in equity, which is pending or, to
the best of its knowledge, threatened, in connection with any of the
transactions contemplated by this Agreement wherein an unfavorable decision,
ruling or finding could reasonably be expected to have a materially adverse
effect on the validity or enforceability of, or its ability to perform it
obligations under, this Agreement; and
(c)           No Conflict. Its execution, delivery and performance of this
Agreement is not in violation of, nor does it constitute an event of default
under, any other contract, agreement or instrument to which it is a party.
15.6           Regulatory Approval. The design, construction, operation and
maintenance of the facilities to serve District Customers as provided for herein
require that permits and approvals be obtained from various regulatory entities,
including the State of Colorado. The parties shall cooperatively and diligently
pursue obtaining said regulatory approvals in such a manner that water services
contemplated by this Agreement can be provided in a timely manner. District
shall be primarily responsible for obtaining necessary regulatory approvals for
the design and construction of the District Water System. Provider shall be
primarily responsible for obtaining necessary regulatory approvals for the
operation and maintenance of the District Water System. The granting of such
regulatory permits and approvals is beyond the direct control of the parties to
this Agreement. In the event that any notice is received from a regulatory
agency of a potential delay or denial in the issuance of a necessary permit or
approval, the parties shall mutually cooperate to determine solutions to lessen
the impact of such delay or denial.
15.7           Dispute Resolution.
(a)           Representative Negotiations. If a party believes there is a
dispute under this Agreement that has not been resolved in the normal course of
business, such party will give the other party a written notice of the dispute
(the “Dispute Notice”). The Dispute Notice shall designate the name and title of
the representative authorized to resolve such dispute. The other party shall
send a response designating the name and title of its representative authorized
to resolve the dispute within five (5) days of receipt of the Dispute Notice.
The representatives shall meet within fifteen (15) days following receipt of the
Dispute Notice at a mutually acceptable time and place, and thereafter as often
as they reasonably deem necessary to attempt to resolve the dispute. All
negotiations pursuant to this clause are confidential and shall be treated as
compromise and settlement negotiations for purposes of applicable rules of
evidence.
(b)           Mediation. If a dispute is not resolved by the authorized
representatives within fifteen (15) days of their first meeting, or if a party
refuses to meet within that time period, then either party may initiate binding
mediation of the dispute in accordance with the International Center for
Conflict Prevention and Resolution Mediation Procedure then currently in effect,
as such procedure may be modified by mutual written agreement of the parties.
The mediator’s fee shall be shared equally by the parties. The mediator
designated or appointed shall have: (i) at least ten (10) years’ experience as a
mediator or arbitrator; and (ii) preference shall be given to mediator with
experience in the development, financing, operation and management of municipal
water systems. To the fullest extent allowed by law, the parties agree to
recognize and be bound by the final decision of the mediator.
(c)           Court Resolution. If a dispute has not been resolved pursuant to
mediation within sixty (60) days after the initiation of such procedure, or if a
party will not participate in mediation, any party may initiate litigation in
the District Court in and for Elbert County, Colorado or, to the extent
appropriate, the Water Court in Water Division I. In any such lawsuit in Elbert
County District Court, the parties agree to request the appointment of a special
master if the issues between them in such case involve complex technical or
economic aspects of water service, including without limitation, rates and
charges. The costs of such special master shall be shared equally by the
parties.
(d)           Obligations Uninterrupted. Pending final resolution of any
dispute, District must remain current on all payment obligations to Provider,
and water service by Provider shall continue uninterrupted.
(e)           Exclusivity. The procedures specified in this Section shall be the
sole and exclusive procedures for the resolution of disputes (which shall not
include undisputed Events of Default) between the parties arising out of or
relating to this Agreement; provided, however, that a party may use self-help or
seek a preliminary injunction or other preliminary relief if, in the judgment of
that party, such action is necessary to avoid irreparable damage. Despite the
initiation of any such judicial proceedings, the parties will continue to
participate in good faith in the procedures specified in this Section.
15.8           Governmental Immunity. Nothing herein shall be construed as a
waiver of the rights and privileges of the Provider or the District pursuant to
the Colorado Governmental Immunity Act, C.R.S. § 24-10-101, et seq., as amended.
15.9           No Waiver. No party shall waive its rights hereunder by failing
to exercise its rights; any such failure shall not affect the right of such
party to exercise at some future time the rights not previously exercised.
15.10         Force Majeure. Should any party be unable to perform any
obligation required of it under this Agreement because of any cause beyond its
control and not due to the party’s fault or negligence, including but not
limited to war, insurrection, riot, civil commotion, strikes, lockout, fire,
earthquake, windstorm, drought, flood, action or inaction of governmental
authorities (including the adoption of new or revised rules and regulations),
moratoriums, material shortages, or any other force majeure, each party’s
performance of the obligation affected shall be suspended for so long as such
cause prevents it from performing such obligation, without liability on its
part.
15.11         Severability. If any clause or provision of this Agreement is
illegal, invalid or unenforceable under present or future laws effective during
the term of this Agreement, then, and in that event, it is the intention of the
parties hereto that the remainder of this Agreement shall not be affected
thereby. It is also agreed that in lieu of each clause or provision of this
Agreement that is illegal, invalid or unenforceable, there shall be added as a
part of this Agreement a clause or provision as similar in terms to such
illegal, invalid or unenforceable clause or provision as may be possible and be
legal, valid and enforceable.
15.12         Form. Headings and titles of this Agreement are for convenience
only and do not hold any substantive meaning.
15.13         Integration. This Agreement, including the Exhibits attached
hereto, shall be construed and enforced as the fully integrated expression of
the parties’ agreement with respect to the matters addressed. No express or
implied covenant not specifically set forth herein shall be a part of this
Agreement. The parties expressly aver that no representations other than those
specifically set forth in this Agreement have been relied upon by either party
to induce it to enter into this Agreement.
15.14        Third-Party Beneficiaries. It is not the intent of the parties, nor
shall it be the effect of this Agreement, to vest rights of any nature or form
in individuals or entities not executing this Agreement as a party.
15.15        Counterparts. This Agreement may be executed in one or more
counterparts, all of which together shall constitute one and the same
instrument.
15.16        Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Colorado and applicable federal law.
15.17        No Presumption. The parties to this Agreement and their attorneys
have had a full opportunity to review and participate in the drafting of the
final form of this Agreement. Accordingly, this Agreement shall be construed
without regard to any presumption or other rule of construction against the
party causing the Agreement to be drafted.
15.18        Assignment. Except for the assignment by District to another
governmental entity, this Agreement shall not be assignable by District or
Provider without the prior written consent of the other party, which consent
shall not be unreasonably withheld or delayed.
15.19        Binding Effect; Covenants Run With the Land. The covenants, terms,
conditions and provisions set forth in this Agreement shall be binding upon and
inure to the benefit of the parties hereto and to their respective successors
and permitted assigns and shall run with the Property. This Agreement or a
Memorandum of Agreement may be executed by the parties and recorded against the
Property.
 

[Signature page and Exhibits follow.]
 
 
 

 
IN WITNESS WHEREOF, parties have executed this Water Service Agreement effective
as of the day and year first written above.
ELBERT & HIGHWAY 86 COMMERCIAL METROPOLITAN DISTRICT, acting by and through its
Wild Pointe Water Activity Enterprise
 
 
By:
/s/ Karl Nyquist
 
Karl Nyquist, President
 
 

 
 
RANGEVIEW METROPOLITAN DISTRICT, acting by and through its Water Activity
Enterprise
 
 
By:
/s/ Mark Harding
 
Mark W. Harding, President

 

 
Exhibit A
DEFINITIONS
1.           “Agreement” means this Water Service Agreement by and between
District and Provider, as may be supplemented or amended from time to time.
2.           “Closing” means as defined in Section 1.1.
3.           “Closing Date” means as defined in Section 1.1.
4.           “CPI-U” means as defined in Section 7.1. In the event that the
CPI-U shall subsequently be converted to a different standard reference base or
otherwise revised, the determination involved shall be made with the use of such
conversion factor, formula or table for converting such CPI-U as may be
published by the U.S. Bureau of Labor Statistics, or if the Bureau shall not
publish the same, then with the use of such conversion factor, formula or table
as may be published by any nationally recognized publisher of similar
statistical information. In the event that the CPI-U shall cease to be
published, then for the purposes of this Agreement, there shall be substituted
such other index as the parties shall agree upon.
5.           “Customer Facilities” means as defined in Section 4.1(b).
6.           “Deficiency Notice” means as defined in Section 5.4.
7.           “District” means as defined in the first paragraph of this
Agreement.
8.           “District Customers” means existing and future users of water
services located within the boundaries of the Property.
9.           “District Rates, Fees and Charges” means as defined in
Section 1.5(b).
10.           “District Rules and Regulations” means the rules and regulations
adopted by District, as defined in Section 1.5 of this Agreement, as the same
may be supplemented or amended from time to time, which govern the provision of
water services to District Customers, subject to the terms and conditions of
this Agreement.
11.           “District Water System” means the Wholesale and Retail Facilities
owned by District that provide potable, and if applicable, non-potable water to
District Customers.
12.           “Dispute Notice” means as defined in Section 15.7(a).
13.            “Effective Date” means as defined in the first paragraph of this
Agreement.
14.           “Environmental Laws” means any statute, law, ordinance,
regulation, rule, judgment, decree or order of any governmental authority or
court relating to any matter of pollution, protection of the environment,
environmental regulation or control regarding Hazardous Substances.
15.           “Hazardous Substance” means any toxic or hazardous materials,
wastes or substances, defined as, or included in the definition of, “hazardous
wastes,” “hazardous materials” or “toxic substances” under any Environmental
Law, including, but not limited to, friable asbestos, buried contaminants,
regulated chemicals, flammable explosives, radioactive materials,
polychlorinated biphenyls, petroleum and petroleum products.
16.           “New District Customer” means: (i) a customer receiving potable
and/or non-potable water service from the District that is issued a water tap
for such service after the Effective Date; or (ii) a customer receiving potable
and/or non-potable water service from the District who subsequently, due to
either a change of use of the property being served or an increased demand on
the potable and/or non-potable water system, is required by the District Rules
and Regulations to purchase or be allocated additional potable and/or
non-potable water tap(s) (including customers who may not be required to
physically install a new tap(s) where the existing tap is capable, with respect
to capacity, to accommodate the changed use or increased demand).
17.           “Property” means as defined in Recital C.
18.           “Provider” means as defined in the first paragraph of this
Agreement.
19.           “Rangeview Rules and Regulations” means as defined in Section 1.5.
20.           “Retail Facilities” means improvements and facilities necessary
and appropriate to deliver potable and/or non-potable water from their points of
connection to Wholesale Facilities to Customer Facilities including, but not
limited to, water mains, valves, fire hydrants, manholes and related
appurtenances. Retail Facilities are designed and constructed at the sole cost
of the owner of property within the District and conveyed at no cost to the
District for operation and maintenance in accordance with the District Rules and
Regulations.
21.           “SFE” means the measure of demand placed upon the District Systems
by a typical single-family detached residence, as determined under the District
Rules and Regulations.
22.           “Special Facilities” means any improvement or facility required to
provide water service to a specific property from Wholesale Facilities of the
District, but which is not a Wholesale Facility, Retail Facility or Customer
Facility (each as defined herein) and for which ownership, construction and
operation responsibilities will be determined by separate agreement.
23.           “System Loss” means as defined in Section 4.5(i).
24.           “Water Consumption Charge” means the monthly charge payable by
District Customers to District and District to Provider in accordance with this
Agreement for potable and/or non-potable water delivered to the District
Customers as measured by meters installed at the points of connection between
the Customer Facilities and the District Water System at the rate(s) set forth
on Exhibit G as adjusted pursuant to this Agreement.
25.           “Water Rights” means as defined in Section 3.1.
26.           “Water Service Charge” means the monthly charge payable by
District Customers to District and District to Provider in accordance with this
Agreement for water service at the rate(s) set forth on Exhibit G as adjusted
pursuant to this Agreement.
27.           “Water System Development Fee” means the fee payable by a District
Customer to District and District to Provider in accordance with this Agreement
with respect to any new or expanded connection of a District Customer to the
District Water System made after the Closing Date, whether metered or unmetered.
28.           “Wholesale Facilities” means improvements and facilities necessary
and appropriate to acquire, treat, store and deliver potable and/or non-potable
water to Retail Facilities, including, but not limited to, wells, treatment
plants, pumping stations, tanks, reservoirs, transmission pipelines, and related
appurtenances.
A-1

 
Exhibit B
 
PROPERTY DESCRIPTION
 
 

 
 
[wildpoint_serviceagreemen000.jpg]
 
 
 
 
 
 
[wildpoint_serviceagreemen001.jpg]
 
 
 
[wildpoint_serviceagreemen002.jpg]
 
 
B-1

 
Exhibit C
DISTRICT WATER RIGHTS
[wildpoint_serviceagreemen003.jpg]
[wildpoint_serviceagreemen004.jpg]
 
 
C-1

 
Exhibit D
DISTRICT FACILITIES
(As Built and to be Built)
[wildpoint_serviceagreemen005.jpg]
D-1

 
Exhibit E
 
TAPS TO BE SERVICED UPON BUILD-OUT
 
REMAINING RESIDENTIAL & COMMERCIAL TAPS (as of 09/30/2016)
 
 
1. 
Unpaid Residential Taps Remaining
a. 
49 Total unpaid taps
 
2. 
Taps Purchased for Homes under Construction
a. 
18 homes under construction, of which 4 have already paid the Tap Fee
 
3. 
Unpaid Commercial Taps Remaining (Estimated – subject to change)
 
 
Lot #
Anticipated Use
 # Taps
Per Lot
Anticipated
Tap Size
1
Medical Office
1
2
2
Discount Store
1
1.5
3
Fast Food
1
1.5
4
Fast Food
1
1.5
5
Self Storage
1
2
6
DayCare
1
2
7
Health Care
1
3
8
Heath Care
1
3
10
AutoZone
1
1.5
12
Retail Shops
1
3
13
Murphy Oil
1
1.5
14
Urgent Care
1
2
15
Fast Food
1
1.5

 
 
E-1

 
Exhibit F
 
UNDEVELOPED LOTS AND OWNERS
 
LOT#
Physical Address
Owner Name
Builder
171
32300 Badger Ridge Circle
Patti & Rich Daniele
 
20
 33305 Viewpointe Circle
Wild Pointe Investments
WilliamMRK Homes
23
 33270 Wyndham Circle
Wild Pointe Investments
WilliamMRK Homes
73
 1524 Legacy Trail
Anthony L. Smith/Smith C
Smith Custom homes
76
 1450 Legacy Trail
Vida Pura Companies
Kyle Gustofson
94
 32810 Legacy Ridge Street
Carmen Leatherwood
n/a Perimeter Fence
113
 473 Heritage Trail
Wild Pointe Investments
WilliamMRK Homes
114
 460 Windward Circle
Wild Pointe Investments
WilliamMRK Homes
115
 458 Windward Circle
Wild Pointe Investments
WilliamMRK Homes
116
 455 Windward Circle
Wild Pointe Investments
WilliamMRK Homes
117
 451 Windward Circle
Wild Pointe Investments
WilliamMRK Homes
118
 270 High Meadows Loop
Wild Pointe Investments
WilliamMRK Homes
119
 264 High Meadows Loop
Wild Pointe Investments
WilliamMRK Homes
120
 250 High Meadows Loop
Wild Pointe Investments
WilliamMRK Homes
121
 242 High Meadows Loop
Wild Pointe Investments
WilliamMRK Homes
122
 240 High Meadows Loop
Wild Pointe Investments
WilliamMRK Homes
123
 236 High Meadows Loop
Wild Pointe Investments
WilliamMRK Homes
124
 230 High Meadows Loop
Wild Pointe Investments
WilliamMRK Homes
125
 226 High Meadows Loop
Wild Pointe Investments
WilliamMRK Homes
126
 224 High Meadows Loop
Wild Pointe Investments
WilliamMRK Homes
127
 222 High Meadows Loop
Wild Pointe Investments
WilliamMRK Homes
128
 220 High Meadows Loop
Wild Pointe Investments
WilliamMRK Homes
129
 218 High Meadows Loop
Wild Pointe Investments
WilliamMRK Homes
130
 214 High Meadows Loop
Wild Pointe Investments
WilliamMRK Homes
131
 210 High Meadows Loop
Wild Pointe Investments
WilliamMRK Homes
132
 208 High Meadows Loop
Wild Pointe Investments
WilliamMRK Homes
133
 213 High Meadows Loop
Wild Pointe Investments
WilliamMRK Homes
134
 225 High Meadows Loop
Wild Pointe Investments
WilliamMRK Homes
135
 229 High Meadows Loop
Wild Pointe Investments
WilliamMRK Homes
136
 243 High Meadows Loop
Wild Pointe Investments
WilliamMRK Homes
137
 255 High Meadows Loop
Wild Pointe Investments
WilliamMRK Homes
138
 265 High Meadows Loop
Wild Pointe Investments
WilliamMRK Homes
139
 285 High Meadows Loop
Wild Pointe Investments
WilliamMRK Homes
140
 395 High Meadows Loop
Wild Pointe Investments
WilliamMRK Homes
146
 31885 Kensington Circle
Wild Pointe Investments
WilliamMRK Homes
147
 31875 Kensington Circle
Wild Pointe Investments
WilliamMRK Homes
148
 31865 Kensington Circle
Wild Pointe Investments
WilliamMRK Homes
149
 31860 Kensington Circle
Wild Pointe Investments
WilliamMRK Homes
150
 31880 Kensington Circle
Wild Pointe Investments
WilliamMRK Homes
151
 31920 Whittaker Circle
Wild Pointe Investments
WilliamMRK Homes
152
 31930 Whittaker Circle
Wild Pointe Investments
WilliamMRK Homes
153
 31940 Whittaker Circle
Wild Pointe Investments
WilliamMRK Homes
154
 31950 Whittaker Circle
Wild Pointe Investments
WilliamMRK Homes
155
 31960 Whittaker Circle
Wild Pointe Investments
WilliamMRK Homes
156
 31990 Whittaker Circle
Wild Pointe Investments
WilliamMRK Homes
157
 32030 Whittaker Circle
Wild Pointe Investments
WilliamMRK Homes
158
 32025 Whittaker Circle
Wild Pointe Investments
WilliamMRK Homes
167
 545 Heritage Trail
Wild Pointe Investments
WilliamMRK Homes
168
 548 Heritage Trail
Wild Pointe Investments
WilliamMRK Homes
169
 550 Heritage Trail
Wild Pointe Investments
WilliamMRK Homes
172
33315 Badger Ridge Circle
John & Joann Orefice
 
177
965 Promontory Circle
Destiny Construction
Destiny Construction
180
 580 Heritage Trail
Wild Pointe Investments
WilliamMRK Homes

 
 
 
 
 
F-1

 
Exhibit G
 
DISTRICT RATES, FEES AND CHARGES
 
District Rates, Fees and Charges
 
6.2*
System Review Fee
Actual Cost
6.3
Disconnection/Reconnection Charge
Actual Cost
6.4
Plan Review Fee
Actual Cost
6.5
Inspection/Observation Fee
Actual Cost
6.6
Permit Review Fee
Actual Cost
6.9
Cure Charge
Actual Cost
6.10
Civil Fines Pass Through
Actual Cost
11.2
Water Meter Purchase
Actual Cost
11.3a
Administrative License Fee
$50.00
11.8.j.i)
Renewable Water Dedication Credit, per SFE
$_____
11.8.j.ii)
Groundwater Dedication Credit, per SFE
$_____
12.1.a
Water System Development Fee, per SFE
$_____
 
Potable Water Consumption Charge:
 
12.2.b
First 0-10,000 gallons per month
10,001-20,000 gallons per month
Over 20,000 gallons per month
$___ per 1000 gallons
$___ per 1000 gallons
$___ per 1000 gallons
Non-Potable Water Consumption Charge
85% of corresponding potable water charges
12.2.c
Water Service Charge, per SFE (monthly)
$_____
12.3.a
Hydrant Use Fee
$40.00 per permit
12.3.b
Owner-initiated Shutoff Fee, each shutoff
$15.00 per hour
12.3.c
Fire Service Standby Fee, monthly fee
4-inch
6-inch
8-inch
 
$12.00
$18.00
$24.00
12.3.d
Well Site Surcharge
$_____ per acre

 
*Corresponds to section number in the Rangeview Rules and Regulations.
 
G-1