Blueprint






Exhibit 10.3







TENTH AMENDMENT TO



CONTRACT FOR PURCHASE AND SALE OF REAL ESTATE



(Sky Ranch)


 


THIS
TENTH AMENDMENT TO CONTRACT FOR PURCHASE AND SALE OF REAL ESTATE
(this “Amendment”)
is made as of the date the last of the Parties executes and dates
this Amendment (the “Effective
Date”), by and between PCY HOLDINGS, LLC, a Colorado limited
liability company (“Seller”),
and KB HOME COLORADO INC., a
Colorado corporation (“Purchaser”).
Seller and Purchaser may be referred to collectively as the
“Parties.”


 



RECITALS


 

A. Seller and
Purchaser previously entered into a Contract For Purchase and Sale
of Real Estate effectively dated June 29, 2017, as amended (the
“Contract”)
for approximately 149 platted single-family detached residential
lots in the Sky Ranch master planned residential community in the
County of Arapahoe, State of Colorado.


 

B. Purchaser and
Seller desire to amend the terms and conditions of the Contract as
set forth below.


 



AGREEMENT


 


NOW,
THEREFORE, in consideration of the mutual covenants contained in
this Amendment and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the
Purchaser and Seller hereby agree as follows:


 

1. Lotting
Diagram. The Lotting Diagram in Contract Exhibit A is
deleted and replaced with attached Schedule 1.


 

2. Number of
Lots. The references in the fourth WHEREAS clause and
elsewhere in the Contract to (i) “103” SFD 45 Lots is
replaced with “106” SFD, and (ii) “46” SFD
50 Lots is replaced with “43” SFD 45 Lots


 

3. Purchase and
Sale. Section 1 “Purchase and Sale” is
deleted and replaced with the following


 




“1.                 


Purchase and Sale






. The
Property shall be purchased at six (6) Closings. Subject to the
terms and conditions of this Contract, Seller agrees to sell to
Purchaser, and Purchaser agrees to purchase from Seller, on or
before the dates set forth in Section 6(b), below, the
Lots in each Takedown, as generally depicted on the Lotting Diagram
and as follows:


 


At the
Takedown 1 Closing (“First
Closing”), twenty-five (25) Lots of which 9 are SFD
45’ Lots and 16 are SFD 50’ Lots;


 







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At the
Takedown 2 Closing (“Second
Closing”), twenty-five (25) Lots of which 15 are SDF
45’ Lots and 10 are SFD 50’ Lots;


 


At the
Takedown 3 Closing (“Third
Closing”), twenty-five (25) Lots of which 25 are SFD
45’ Lots and 0 are SFD 50’ Lots;


 


At the
Takedown 4 Closing (“Fourth
Closing”), twenty-four (24) Lots of which 24 are SFD
45’ Lots and 0 are SFD 50’ Lots;


 


At the
Takedown 5 Closing (“Fifth
Closing”), twenty-five (25) Lots of which 25 are SFD
45’ Lots and 0 are SFD 50’ Lots; and


 


At the
Takedown 6 Closing (“Sixth
Closing”), twenty-four (25) Lots of which 8 are SFD
45’ Lots and 17 are SFD 50’ Lots.


 


The
exact number and location of the Lots within each Takedown are
subject to adjustment based upon the approval by the Authorities of
the Final Plat (as hereinafter defined) that includes the Lots to
be acquired by Purchaser at each Takedown. The precise number,
dimension (subject to the provisions of this Contract), location
and legal description of the Lots will be established at the time
the Final Plat for such Lots is approved by the County and/or any
other Authority, and upon approval of each such Final Plat the
parties shall execute an amendment to this Contract setting forth
the legal description of those Lots included in the approved Final
Plat.”


 

4. Master
Covenants. Pursuant to Section 4(d) of the Contract,
Purchaser has approved the form of the Master Covenants set forth
in attached Schedule 4, subject to the Parties agreeing as to
completion of any blanks or exhibits, if applicable.


 

5. Public Improvement
Fee Covenant. Pursuant to Section 9(e) of the Contract, the
agreed-upon form of the Public Improvement Fee Covenant is set
forth in attached Schedule 5, subject to the Parties agreeing as to
completion of any blanks or exhibits, if applicable.


 

6. Tap Purchase
Agreement. Pursuant to Section 16(a) of the Contract, the
agreed-upon form of the Tap Purchase Agreement is set forth in
attached Schedule 6, subject to the Parties agreeing as to
completion of any blanks or exhibits, if applicable.


 

7. Offsite
Infrastructure Escrow Agreement. The agreed-upon form of the
Offsite Infrastructure Agreement is set forth in attached Schedule
7, subject to the Parties agreeing as to completion of any blanks
or exhibits, if applicable. With respect Exhibit C, Section 4 of
the Contract, Seller agrees to complete the WWRF not later than 18
months after the first building permit is issued for any
Lot.


 

8. Homebuyer
Disclosure. Pursuant to Section 12(e) of the Contract, the
agreed-upon form of the Homebuyer Disclosure is set forth in
attached Schedule 8. However, it is agreed Purchaser need not use
and need not provide the specific Homebuyer Disclosure attached,
but rather Purchaser may provide disclosures to its homebuyers
similar in nature as part of Purchaser’s homebuyer sales
documentation.


 




 

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9. Amenity Development
Agreement And Escrow Instructions. The Parties agree to an
additional document as part of the transaction, entitled the
“Amenity Development Agreement And Escrow Instructions”
(herein the “Amenity Agreement”). The agreed-upon form
of the Amenity Agreement is set forth in attached Schedule 9,
subject to the Parties agreeing as to completion of any blanks or
exhibits, if applicable. The Amenity Agreement is to be entered not
later than the First Closing.


 

10.  Continuation
Notice. With this Amendment, Purchaser issues its
Continuation Notice.


 

11. Miscellaneous.
In the case of any conflict between the terms of this Amendment and
the provisions of the Contract, the provisions of this Amendment
shall control. Except as the Contract is specifically modified by
this Amendment, the Parties hereby ratify, reaffirm, and restate
the terms of the Contract. This Amendment may be executed in
counterparts, each of which shall be deemed an original and may be
signed and delivered by facsimile transmission or electronic mail,
and all of which, when taken together, shall constitute one and the
same Amendment.


 


[SIGNATURE
PAGE FOLLOWS]


 




 

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IN
WITNESS WHEREOF, the Parties hereto have executed this Amendment as
of the last day and year written below.


 


	


SELLER:


 


PCY
HOLDINGS, LLC, a Colorado limited liability company


 


By:
Pure Cycle Corporation, a Colorado corporations, its sole
member


 


 


    By:
/s/ Mark Harding 


    Mark
Harding, President


    Date:
11-19-17


 


	
 







 


 


PURCHASER:


 


KB HOME
COLORADO INC.,


a
Colorado corporation


 


 



By: /s/ Randy
Carpenter






Name:
Randy Carpenter


Title:
Division President


Date:
11-10-17


 




 

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Schedule 1 - Lotting Diagram


 


 


 




 




 

5








 







Schedule 4 - Master Covenants


 


 


 


 




 

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DRAFT


McGEADY
BECHER P.C.


October
9, 2017



FR DRAFT REV. 10/30/2017


 






 



When Recorded, Return to:


 


 



COVENANTS, CONDITIONS AND RESTRICTIONS



FOR SKY RANCH


THESE
COVENANTS, CONDITIONS AND RESTRICTIONS FOR SKY RANCH
(“Covenants,” as
hereinafter more fully defined) are made and entered into the date
and year hereinafter set forth by PCY Holdings, LLC, a Colorado
limited liability company (“Developer,” as hereinafter more
fully defined).

 


 


WITNESSETH:


 

A. Developer is the
owner of that certain real property in the County of Arapahoe
(“County”), State of Colorado, which is described on
Exhibit A, attached hereto and incorporated herein by this
reference (“Property,”, as hereinafter more fully
defined).


 

B. Developer desires
to subject the Property to certain covenants, conditions,
restrictions, easements, architectural guidelines, reservations,
rights-of-way, obligations, liabilities and other
provisions.


 

C. These Covenants do
not create a Common Interest Community, as defined by the Colorado
Common Interest Ownership Act at C.R.S. §38-33.3-103(8);
therefore, these Covenants are not governed by the Colorado Common
Interest Ownership Act.


 

D. Pursuant to C.R.S.
§ 32-1-1004(8), and other provisions of Title 32 of C.R.S.,
the Developer empowers the Sky Ranch Community Authority Board (the
“CAB”) with
authority to furnish covenant enforcement and design review
services for the Property (collectively, the “Services,” as hereinafter more
fully defined).


 

E. Developer reserves
the right to add additional real property to these Covenants by
recording an annexation document as more particularly described and
set forth herein.


 

F. Pursuant to the
Colorado Constitution, Article XIV, Sections 18(2)(a) and (b), and
C.R.S. Section 29-1-2-3, metropolitan districts may cooperate or
contract with each other to provide any function, service or
facility lawfully authorized to each, and any such contract may
provide for the sharing of costs, the impositions of taxes, and the
incurring of debt.


 

G. Pursuant to the
Modified Service Plans for Sky Ranch Metropolitans District Nos. 1,
3, 4 and 5 (“Sky Ranch
Districts”), approved by Arapahoe County on September
14, 2004, as may be amended from time to time (“Service Plans”), the Sky Ranch
Districts may furnish covenant enforcement and design review
services and cooperate and contract with each other regarding
administrative and operational functions.


 




 

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H. Pursuant to the Sky
Ranch Districts’ Service Plans, the Districts intend to
exercise their powers to provide covenant enforcement and design
review services, as defined in C.R.S. Section 32-1-1004(8), for the
Property.


 

I. In accordance with
the Service Plans and statutory authority, the Sky Ranch Districts
intend to enter into a Sky Ranch Community Authority Board
Establishment Agreement (“CABEA”), creating the CAB and
authorizing the CAB to provide covenant enforcement and design
review services within the Service Areas of the Sky Ranch Districts
that are parties to the CABEA using revenue derived from the areas
in which the services are to be furnished.


 

J. In accordance with
the Service Plans, the CABEA and statutory authority, the CAB has
duly adopted a resolution acknowledging its power to provide
covenant enforcement and design review services pursuant to state
statute, the intention of the CAB to provide for uniform
enforcement and design review services within the service areas of
the Sky Ranch Districts that are parties to the CABEA, and
authorizing the CAB to provide covenant enforcement and design
review services within the service area of the Sky Ranch Districts
that are parties to the CABEA using revenue derived from the areas
in which the services are to be furnished.


 

K. Before the addition
of the service area of any Sky Ranch District to these Covenants,
the applicable Sky Ranch District intends to: (i) duly adopt a
resolution acknowledging the CAB’s power to provide covenant
enforcement and design review services pursuant to state statute
and its intention to provide for uniform enforcement and design
review services within the service areas of the Sky Ranch Districts
using revenues derived from the areas in which the services are to
be furnished; and (ii) authorize the CAB to provide covenant
enforcement and design review services within such Sky Ranch
District’s service area.


 



DECLARATION


NOW,
THEREFORE, Developer hereby declares that the Property shall be
held, sold, and conveyed, subject to the following covenants,
conditions, restrictions, easements, architectural guidelines,
reservations, rights-of-way, obligations, liabilities, and other
provisions, as set forth herein.


 



ARTICLE 1



GENERAL


 


Section 1.1 Planned
Community.


  Developer
is the owner of the Lots and other Property located in the County
as more particularly described on Exhibit A
attached hereto and by this reference incorporated herein, which
collectively constitute and are defined in these Covenants as the
“Property”. Developer intends to develop the Property
as a planned community of single family residential homes and
related uses. The name of the community to be developed on the
Property is “Sky Ranch”. All of the Property is located
within the Service Area of Sky Ranch Metropolitan District No. 1, a
quasi-municipal corporation and political subdivision of the State
of Colorado. Because ownership of a Unit (as defined below) does
not obligate the owner to pay for real estate taxes, insurance
premiums, maintenance, or improvement of other real estate
described in these Covenants, the Property is not and will not be a
“common interest community”, as defined in the Colorado
Common Interest Ownership Act (“Act”), and therefore the Property
and these Covenants are not subject to or required to comply with
the Act. Developer confirms its intention that the Act will not
apply to the Property or these Covenants.


 




 

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Section 1.2 Purposes of
Covenants.


  These
Covenants are executed (a) to further a common and general plan for
the development of the Property; (b) to protect and enhance the
quality, value, aesthetics, desirability and attractiveness of the
Property; (c) to provide for and define certain duties, powers and
rights of the Architectural Review Committee, as defined herein;
(d) to define certain duties, powers and rights of the CAB under
these Covenants; and (e) to define certain duties, powers and
rights of Owners of Lots within the Property.


 


Section 1.3 Declarations.


 Developer,
for itself and its successors and assigns, hereby declares that the
Property, and all other real property that becomes subject to these
Covenants in the manner hereinafter provided from the date the same
becomes subject to these Covenants, shall be owned, held,
transferred, conveyed, sold, leased, rented, hypothecated,
encumbered, used, occupied, maintained, altered and improved
subject to the covenants, conditions, restrictions, limitations,
reservations, exceptions, equitable servitudes and other provisions
set forth in these Covenants. The provisions of these Covenants run
with the land and, until their expiration in accordance with the
terms hereof, shall bind, be a charge upon and inure to the mutual
benefit of: (a) the Property and all other real property that
becomes part of the Property; (b) Developer and its successors and
assigns; (c) the Sky Ranch Districts, through the CAB, and their
successors and assigns; and (d) all Persons having or acquiring any
right, title or interest in any portion of the Property or in any
property that becomes part of the Property, or any Improvement
thereon, and their heirs, personal representatives, successors or
assigns. These Covenants will be recorded in the real property
records of the County.


 


Section 1.4  CAB
Authority.



  Declarant, through these Covenants, grants
authority to the Sky Ranch Districts, through the CAB, to act on
behalf of Declarant for certain matters specifically set forth in
these Covenants, including implementing these Covenants, enforcing
these Covenants and providing design review services. Declarant
grants the Sky Ranch Districts, through the CAB, authority as
provided herein to adopt Rules and Regulations, and Guidelines
pertaining to architectural and design review, each for the
effective governance of the Property to implements these Covenants.
Declarant grants to the Sky Ranch Districts, through the CAB,
authority to review and approve Improvements in compliance with the
Guidelines and these Covenants and to enforce the Guidelines.
Declarant grants to the Sky Ranch Districts, through the CAB,
authority to appoint the ARC as provided herein and to exercise all
other powers necessary and proper to implement and enforce these
Covenants and provide design review services.


 



ARTICLE 2



DEFINITIONS


 


Section 2.1 ARC.


   “ARC”
means the Architectural Review Committee appointed by the Developer
during the Developer Control Period (as defined in Section 3.1), and upon expiration of the
Developer Control Period, appointed by the Sky Ranch Districts,
through the CAB, all as provided in Section 3.1 of these Covenants. The ARC shall
review, consider and approve, or disapprove, requests for
architectural approval, as more fully provided in these
Covenants.


 




 

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Section 2.2 Builder.


  “Builder”
means any Person who: (i) acquires one or more parcels of the
Property for the purpose of constructing at least one residence on
each such parcel for sale, and/or rental, to the public; or (ii)
acquires one or more parcels of the Property for sale to any Person
fitting the description in clause (i) above; and is designated as a
“Builder” under these Covenants in a written
designation that is signed by the then-Developer, and which
designation is recorded in the office of the Clerk and Recorder of
the County.


 


Section 2.3 CAB.


  “CAB”
means the Sky Ranch Community Authority Board.


 


Section 2.4 Covenants.



 “Covenants” means these Covenants,
Conditions and Restrictions for Sky Ranch, as amended and
supplemented from time to time.


 


Section 2.5 Developer.



  “Developer” means PCY Holdings, LLC,
a Colorado limited liability company, and any other Person to whom
the Developer may assign one or more of the Developer’s
rights under these Covenants (which will be the extent of the
Developer’s rights to which such assignee succeeds);
provided, that no assignment of any Developer rights is effective
unless such assignment is duly executed by the assignor Developer
and recorded in the office of the Clerk and Recorder of the
County.


 


Section 2.6 Governing
Documents.



 “Governing Documents” means these
Covenants, any Guidelines (as hereinafter defined), any CCR Rules
and Regulations (as hereinafter defined), and any other documents
now or hereafter adopted by or for the Sky Ranch Districts, the
CAB, or ARC, as amended and supplemented.


 


Section 2.7 Improvements.



  “Improvements” means all exterior
improvements, structures, and any appurtenances thereto or
components thereof of every type or kind, and all landscaping
features, including but not limited to buildings, outbuildings,
swimming pools, hot tubs, satellite dishes, antennas, tennis
courts, patios, patio covers, awnings, porches, solar collectors,
roof materials, painting or other finish materials on any visible
structure, additions, walkways, sprinkler systems, garages,
driveways, dog runs, fences, basketball backboards and hoops,
swingsets or other play structures, screening walls, retaining
walls, stairs, decks, landscaping, hedges, windbreaks, plantings,
trees, shrubs, flowers, vegetables, sod, gravel, groundcover,
exterior light fixtures, poles, signs, exterior tanks, and exterior
air conditioning, cooling, heating and water softening equipment,
permanent fire pits, chimneys, and exterior ornaments, if
any.


 


Section 2.8 Owner.


  “Owner”
means each fee simple title holder of a Unit, including Developer,
any Builder and any other Person who owns a Unit, but does not
include a Person having an interest in a Unit solely as security
for an obligation.


 


Section 2.9 Person.



  “Person” means a natural person, a
corporation, a limited liability company, a partnership, a trust, a
joint venture, an unincorporated association, or any other entity
or any combination thereof, and includes each Owner, the Developer,
each Builder, the ARC, the Sky Ranch Districts and CAB, and the
governing body of the Sky Ranch Districts and CAB.


 




 

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Section 2.10 Property.



  “Property” means the real property
described on Exhibit A attached hereto, as supplemented and
amended, and all other real property, if any, made subject to the
terms and provisions of these Covenants after the date hereof, and
as the Developer, any Builder or Owner may now or hereafter
subdivide or re-subdivide any portion thereof; provided, however,
that the Property does not include any real property that has been
withdrawn as provided in Section 6.10 hereof.


 


Section 2.11 Services.



  “Services” means the services that
the CAB is empowered to provide pursuant to C.R.S. §32-1-1004,
as amended, and other provisions of Title 32 of C.R.S., as amended,
including but not limited to covenant enforcement and design
review.


 


Section 2.12 Sky Ranch
Districts.


  “Sky
Ranch Districts” means Sky Ranch Metropolitans
District Nos. 1, 3, 4 and 5, and any other metropolitan
district(s), to which the Sky Ranch Districts or CAB may transfer
or assign any or all of the rights and duties of the Sky Ranch
Districts or CAB under these Covenants. Each such assignment or
transfer, if any, will be effective upon recording in the County of
a document of transfer or assignment, duly executed by the Sky
Ranch Districts and/or CAB. In addition to the authority to provide
the Services (as defined in Section
2.11), the CAB has such other authority with respect to the
provision of the Services, as may be permitted by the Special
District Act, C.R.S. 32-1-101 et seq., including but not limited to
the right to adopt rules and regulations, fees, rates, tolls,
penalties and charges, and undertake enforcement actions (but these
Covenants do not limit in any way the authority of the Sky Ranch
Districts or CAB under the statutes of the State of
Colorado).


 


Section 2.13 Unit.



  “Unit” means each portion of the
Property which is designated as a lot on a recorded plat, including
each residence (attached or detached) now or hereafter located
thereon.


 



ARTICLE 3



ARCHITECTURAL
REVIEW


 


Section 3.1 Composition of
ARC.


  The
ARC shall consist of three (3) or more natural Persons. The
Developer has the authority to appoint the ARC, and/or to delegate
some or all architectural authority (as provided in Section 3.2 hereof), from the date of
recording of these Covenants until the date of conveyance of all
the Units to the first Owners thereof other than: (i) the
Developer; or (ii) any Builder; or (iii) any other Person who
acquires one or more parcels of the Property for the purpose of
constructing at least one residence on each such parcel (the
“Developer Control
Period”). After expiration of the Developer Control
Period, the governing board of the CAB has the authority to serve
as or appoint members to the ARC , and/or to delegate some or all
architectural authority (as provided in Section 3.2 hereof). The appointments of all
then-current members of the ARC who were appointed by the Developer
will automatically terminate on the date which is thirty (30) days
after expiration of the Developer Control Period.


 


Section 3.2 Delegation of Some or All
Architectural Authority.


  The
Person with the authority to appoint the ARC, as provided in the
preceding Section 3.1, has the right
and authority to: (i) delegate, in writing, some or all
architectural authority, to one or more other Persons, including
one or more management companies, metropolitan or other
district(s), such as by entering into intergovernmental
agreement(s) or other document(s) or agreement(s); and (ii)
withdraw, in writing, any delegated authority.


 




 

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Section 3.3 Architectural Review
Requirements; Authority of the ARC.


 


3.3.1                      No
Improvements may be constructed, erected, placed, altered, planted,
applied, installed or modified, upon any Unit, unless said
Improvements are in full compliance with all provisions of the
Governing Documents, and unless such Improvements are approved in
writing by the ARC. At least one (1) detailed set of complete plans
and specifications of proposed Improvements (said plans and
specifications to show exterior design, height, materials, color,
and location of the Improvements, plotted horizontally and
vertically, location and size of driveways, location, size, and
type of landscaping, fencing, walls, windbreaks and grading plan,
as well as such other materials and information as may be required
by the ARC), must first be submitted to the ARC for review and
consideration.


 


3.3.2                      The
ARC shall endeavor to exercise its judgment in an attempt to
provide for each proposed Improvement to generally harmonize with
the existing surroundings, residences, landscaping and structures.
However, the ARC shall not review or approve any proposed
Improvements regarding whether the same complies with governmental
requirements. Rather, as provided in subsection 0, below,
the applicant is also required to submit proposed Improvements to
the applicable governmental entities for a determination of
compliance with governmental requirements. In its review of such
plans, specifications and other materials and information, the ARC
may require, as a condition to its considering an approval request,
that the applicant(s) pay, and/or reimburse the ARC, for the
expenses incurred in the process of review and approval or
disapproval.


 


3.3.3                      In
addition to the foregoing review and approval, and notwithstanding
anything to the contrary in these Covenants, the construction,
erection, addition, deletion, change or installation, of any
Improvements also requires the applicant to obtain the approval of
all governmental entities with jurisdiction thereover, and requires
the issuance of all required permits, licenses and approvals by all
such entities. Without limiting the generality of the preceding
sentence, issuance of building permit(s) by the governmental entity
with jurisdiction thereover, if required, is a precondition to
commencement of any construction of, alteration of, addition to or
change in, any Improvement.


 


3.3.4                      In
addition to the authority that is given to the ARC in these
Covenants, as well as such authority as may be implied from any
provision(s) of these Covenants, the ARC has all authority and
powers that are given by Colorado statute and case law, to a
corporation, a limited liability company, or any other legal
entity. The foregoing shall include the power to receive and review
complaints from one or more Owners, Developer, one or more
Builders, or any other Person(s), alleging that a violation of any
of the Governing Documents has occurred or is
occurring.


 


3.3.5                      The
ARC may, at any time, appoint a representative or committee to act
on its behalf. If so, then the actions of such representative or
committee shall be the actions of the ARC. However, if such a
representative or committee is appointed, then the ARC will have
full power over such representative or committee, including the
power to at any time withdraw from such representative or
committee, any authority to act on behalf of the ARC, and the power
to at any time remove or replace such representative or
committee.


 




 

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Section 3.4 Guidelines.


  The
Developer may promulgate, adopt, enact, modify, amend, repeal, and
re-enact, architectural standards, rules, regulations and/or
guidelines, regarding architectural and design matters and matters
incidental thereto (collectively the “Guidelines”), and the CAB, once it
has the authority to appoint the ARC as provided in Section 3.1 of these Covenants may modify,
amend, repeal, and re-enact the Guidelines, but the Guidelines may
not be in conflict with these Covenants. The Guidelines may
include: clarifying the designs and materials that may be
considered in architectural approval; requirements for submissions,
procedural requirements, specification of acceptable Improvement(s)
that may be installed without prior review or approval; and
permitting the ARC, with respect to any violation(s) or alleged
violation(s) of any of the Governing Documents, to send demand
letters and notices, levy and collect fines and interest, and
negotiate, settle and take any other actions. In addition, the
Guidelines may provide for blanket approvals, interpretations, or
restrictions. By way of example, and not by way of limitation, the
Guidelines may state that a certain type of screen door will be
acceptable and will not require approval, or may state that only
one or more types of fences are acceptable and no other types will
be approved. All Improvements proposed to be constructed, erected,
placed, altered, planted, applied, installed or modified, upon any
Unit by any Owner must be done and used in accordance with the
Guidelines and these Covenants. The Guidelines (as amended from
time to time in accordance with their terms) may not be recorded
against the Property but are hereby incorporated into these
Covenants as if fully set forth herein.


 


Section 3.5 Procedures.


  The
ARC shall review each request for architectural approval in
accordance with the design review procedures set forth in the
Design Guidelines or the CCR Rules and Regulations, and approve
(which may be with conditions and/or requirements) or disapprove,
each request in writing within forty-five (45) days after the
complete submission to the ARC along with a receipt of
acknowledgement by the ARC of the plans, specifications and other
materials and information, which the ARC may require in conjunction
therewith. If the ARC fails to review and give its writing approval
(which may be with conditions and/or requirements) or disapproval
within forty-five (45) days after the complete submission of the
plans, specifications, materials and other information with respect
to a written request for architectural approval, then such request
is deemed approved by the ARC.

 


Section 3.6 Vote.


  The
affirmative, majority vote of the ARC is required for approval
(which may be with conditions and/or requirements) of each matter,
unless the ARC has appointed a representative or committee to act
for it, in which case the decision of such representative or
committee will control, unless the denial of the ARC is appealed by
the applicant to the CAB Board of Directors within thirty (30) days
of the date of the ARC written decision of denial in which case the
written decision of the Board of the CAB shall
control.


 


Section 3.7 Prosecution of Work After
Approval.


 
After the ARC approves (which may be with conditions and/or
requirements) any proposed Improvement, the proposed Improvement
must be completed and constructed as promptly and diligently as
possible, and in complete conformity with all conditions and
requirements of the approval. Failure to complete the proposed
Improvement within the time period set forth in the Guidelines or,
if not set forth in the Guidelines, then within one (1) year after
the date of approval of the application (“Completion Deadline”), or to
complete the Improvement in complete conformance with the
conditions and requirements of the approval, constitutes
noncompliance; provided, however, that the ARC may grant extensions
of time to individual Owners for completion of any proposed
Improvements, either (a) at the time of initial approval of
such Improvements, or (b) upon the request of any Owner,
provided such request is delivered to the ARC in writing and the
Owner is diligently prosecuting completion of the subject
Improvements or other good cause exists at the time such request is
made. Builders are exempt from this Section 3.7.


 




 

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Section 3.8 Notice of
Completion.


  Upon
the completion of an Improvement, the applicant for approval of the
same shall give a written “Notice of Completion” to the ARC
(in form and substance acceptable to the ARC, or on forms provided
by the ARC). Until the date of receipt of such Notice of
Completion, the ARC shall not be deemed to have notice of
completion of any Improvement on which approval (which may be with
conditions and/or requirements) has been sought and granted as
provided in this Article.




 


Section 3.9 Inspection of
Work.


 The
ARC, or its duly authorized representative, has the right to
inspect any Improvement at any time, including prior to or after
completion, in order to determine whether or not the proposed
Improvement is being completed or has been completed in compliance
with the approval granted pursuant to this Article. Such
inspections may be made in order to determine whether or not the
proposed Improvement is being completed, or has been completed, in
compliance with the approval granted pursuant to this Article.
However, such right of inspection terminates ninety (90) days after
the ARC has received a Notice of Completion from the applicant and
no action has been initiated by the ARC. The 90-day period to
perform inspections after the ARC has received a Notice of
Completion does not apply to or limit the right or authority of the
ARC or the Board to enforce these Covenants, including but not
limited to the requirements pertaining to the maintenance of
Improvements.


 


Section 3.10 Notice
of Non-compliance


. If,
as a result of inspections or otherwise, the ARC determines that
any Improvement has been done without obtaining all required
approvals (which may be with conditions and/or requirements), or
was not done in substantial compliance with the approval that was
granted, or has not been completed by the Completion Deadline
(except landscaping, as provided below), subject to any extensions
of time granted pursuant to Section
3.7 hereof, then the ARC shall notify the applicant in writing
of the non-compliance. Such notice of non-compliance must be given
not later than sixty (60) days after (as applicable), (a) the ARC
receives a Notice of Completion from the applicant, or (b) the ARC
discovers any such noncompliance. The notice of non-compliance must
specify the particulars of the non-compliance.




 


Section 3.11 Correction of
Non-compliance.


  If
the ARC determines that a non-compliance exists, the Person
responsible for such non-compliance shall remedy or remove the same
within the time period set forth in the Guidelines or, if not set
forth in the Guidelines, then not more than forty-five (45) days
from the date of receipt of the notice of non-compliance. If such
Person does not comply with the ruling within such period, the ARC
may, at its option, record a notice of non-compliance against the
Unit on which the non-compliance exists, may impose fines,
penalties and interest, may remove the non-complying Improvement,
or may otherwise remedy the non-compliance, and the Person
responsible for such non-compliance shall reimburse the ARC, upon
demand, for all costs and expenses, as well as anticipated costs
and expenses, with respect thereto. This Section 3.11 does not prohibit composting to
the extent that it has been approved by the ARC.




 


Section 3.12 Cooperation.


  The
ARC has the right and authority to enter into agreements and
otherwise cooperate with any architectural review or similar
committees, any metropolitan or other districts, or one or more
boards or committees that exercise architectural or design review
functions, or any other Person, in order to increase consistency or
coordination, reduce costs, or as may otherwise be deemed
appropriate or beneficial by the ARC. The costs and expenses for
all such matters, if any, shall be shared or apportioned between
such Persons and the ARC, as the ARC may determine. The foregoing
includes collection, payment, and disbursement of fees, charges,
and/or any other amounts.


 




 

14








 






 


 


 


Section 3.13 Access
Easement.


  The
Developer hereby reserves, and each Owner hereby grants, to the
ARC, the CAB, and the Person who then has the authority to appoint
the ARC, as provided in Section 3.1 of
these Covenants, including the agents, employees and contractors of
each such Person (including the ARC), on, over, under and across
the Units and each of them, excluding any habitable structure and
the interior of any residence thereon, easements for performing any
of the actions contemplated in the Governing Documents, including
inspections pursuant to the first sentence of Section 3.9 of these Covenants and including
enforcement of each of the terms and provisions of the Governing
Documents. If damage is inflicted on any property or Unit, or a
strong likelihood exists that damage will be inflicted, then the
Person responsible for the damage or expense to avoid damage is
liable for the cost of prompt repair. The term “Person”
in the preceding sentence includes the ARC and the Person who then
has the authority to appoint the ARC, as provided in Section 3.1 of these Covenants, if they are
responsible for such damage or expense to avoid damage. Further,
the rights and easements granted in this Section may be exercised
only during reasonable hours after reasonable notice to the
Owner(s) or occupant(s) of any affected Unit; except that no such
notice is required in connection with any exterior, non-intrusive
inspections and maintenance; and except that, in emergency
situations, entry upon a Unit may be made at any time, provided
that the Owner(s) or occupant(s) of each affected Unit is given
notice of the emergency entry as early as is reasonably possible.
The interior of any residence is not subject to the easements
provided for in this Section.




 


Section 3.14 No Liability.


  The
ARC, the Sky Ranch Districts and CAB, the Person who then has the
authority to appoint the ARC, as well as any representative or
committee appointed by the ARC, will not be liable in equity or
damages to any Person by reason of any action, failure to act,
approval (which may be with conditions and/or requirements),
disapproval, or failure to approve (which may be with conditions
and/or requirements) or disapprove, in regard to any matter. In
reviewing or approving any matter, the ARC is not responsible for
the safety, whether structural or otherwise, of the Improvements
submitted for review, nor the conformance with applicable building
codes or other governmental laws or regulations, nor compliance
with any other standards or regulations, and any approval (which
may be with conditions and/or requirements) of an Improvement by
the ARC does not constitute an approval of any such matters and
does not constitute a warranty by the ARC to any applicant of the
adequacy of design, workmanship or quality of such work or
materials for any applicants’ intended use. No Owner or other
Person will be a third party beneficiary of any obligation imposed
upon, rights accorded to, action taken by, or approval granted by,
the ARC.




 


Section 3.15 Variance.


  The
ARC may grant reasonable variances or adjustments from any
conditions and restrictions imposed by Error! Reference source not found. of
these Covenants, or by the Guidelines, in order to overcome
practical difficulties or prevent unnecessary hardships arising by
reason of the application of any such conditions and restrictions.
Such variances or adjustments may be granted only in case the
granting thereof is not materially detrimental or injurious to the
other property or improvements in the neighborhood, and does not
militate against the general intent and purpose hereof. However,
any variance that may be granted under this Section is only a
variance from the requirements of the applicable Governing Document
for the individual applicant or Unit, and is not a variance from
the requirements of any applicable governmental or
quasi-governmental agency or entity. No granting of a variance or
adjustment to any one applicant/Owner constitutes a variance or
adjustment, or the right to a variance or adjustment, to any or all
other applicants, Owners or Units.


 




 

15








 






 


 


Section 3.16 Waivers; No
Precedent.


  The
approval or consent of the ARC, or any representative or committee
thereof, to any application for approval does not constitute a
waiver of any right to withhold or deny approval or consent by such
Person, or any Person, as to any application or other matters
whatsoever, as to which approval or consent may subsequently or
additionally be required. Nor does any such approval or consent
constitute a precedent as to any other matter.




 


Section 3.17 Developer and Builder
Exemption.


 


3.17.1                      The
Developer is exempt from this Article and all provisions of the
Governing Documents that require ARC review or approval, except for
the requirement to obtain approval from all governmental entities
with jurisdiction thereover (as provided in subsection
0
of these
Covenants.


 


3.17.2                      As
long as, and to the extent that, a Builder has received written
architectural approval from the Developer for one or more matters,
such Builder is, as to Developer-approved Improvements, exempt from
this Article and all provisions of the Governing Documents that
require ARC review or approval of such matters, except for the
requirement to obtain approval from all governmental entities with
jurisdiction thereover (as provided in subsection 0 of these
Covenants).


 



ARTICLE 4



RESTRICTIONS


 


Section 4.1 General.


  The
Property is subject to all covenants, conditions, restrictions,
requirements, easements, licenses, and other provisions of all
documents recorded in the office of the Clerk and Recorder of the
County, as amended, including those stated on the recorded plats of
the Property, or any portion thereof, but only as and to the extent
provided in such documents. In addition, the Developer declares
that, subject to Section 6.4 hereof,
all of the Units shall be held and shall henceforth be sold,
conveyed, used, improved, occupied, owned, resided upon and
hypothecated, subject to the following provisions, conditions,
limitations, restrictions, agreements and covenants, as well as
those contained elsewhere in these Covenants.


Section 4.2 Compliance with
Law.


  All
Owners, and all other Persons, who reside upon or use any Unit or
any other portion of the Property, shall comply with all applicable
statutes, ordinances, laws, regulations, rules and requirements of
all governmental and quasi-governmental entities, agencies and
authorities, but neither the Developer, the ARC nor the Sky Ranch
Districts nor CAB has any obligation to enforce compliance with the
statutes, ordinances, laws, regulations, rules and requirements of
any other governmental or quasi-governmental entities, agencies or
authorities.


 


Section 4.3 Residential Use; Professional
or Home Occupation.


  Units
that consist of platted single-family lots may be used for
residential use only, including uses which are customarily incident
thereto, and may not be used at any time for business, commercial
or professional purposes except that Owners may conduct home
occupations and business activities within their residences to the
extent permitted by, and in compliance with, the ordinances of the
County (as applicable) and any Guidelines and CCR Rules and
Regulations that do not conflict with such ordinances.


 




 

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Section 4.4 Animals.


  No
animals, livestock (pigs, cattle, horses, goats, lamas, etc.),
birds, poultry, reptiles or insects of any kind may be raised,
bred, kept or boarded in or on the Units except as permitted by,
and in compliance with, the ordinances of the County, as
applicable, and any Guidelines and/or the CCR Rules and Regulations
that do not conflict with such the ordinances of the County, as
applicable. An Owner’s right to keep household pets is
coupled with the responsibility for collecting and properly
disposing of any animal waste and to pay for all damage caused by
such pets.


 


Section 4.5 Temporary Structures; Unsightly
Conditions.


  Except
as hereinafter provided, no structure of a temporary character,
including a house trailer, tent, shack, storage shed, or
outbuilding shall be placed or erected upon any Unit; provided,
however, that during the actual construction, alteration, repair or
remodeling of a structure or other Improvements, necessary
temporary structures, offices and trailers for construction,
marketing, sales or storage of materials may be erected and
maintained by the Person doing such work. The work of constructing,
altering or remodeling any structure or other Improvements must be
prosecuted diligently from the commencement thereof until the
completion thereof. Further, no unsightly conditions, structures,
facilities, equipment or objects, may be so located on any Unit as
to be visible from a street or from any other Unit.




 


Section 4.6 Miscellaneous
Improvements.


 


4.6.1                      No
advertising or signs of any character other than political signs,
may be erected, placed, permitted, or maintained on any Unit other
than a name plate of the occupant and a street number, and except
for a “For Sale,” “Open House,” “For Rent,” or security sign of not more than five
(5) square feet in the aggregate; except that signs advertising
garage sales, block parties, or similar community events, may be
permitted if the same are in accordance with the Guidelines and
applicable laws or have been submitted to the ARC for review and
written approval (which may be with conditions and/or
requirements), prior to posting of such signs. Notwithstanding the
foregoing, any signs, billboards or other advertising may be placed
by the Developer or by any Builder (with the prior, written
approval of the Developer if located on Developer owned property),
without regard to the foregoing or any limitations, requirements,
specifications or other provisions of the Governing Documents, the
ARC, or the Sky Ranch Districts or CAB, and without any approval of
the foregoing (except as stated earlier in this
sentence).


 


4.6.2                      No
wood piles or storage areas, may be so located on any Unit as to be
visible from a street or from the ground level of any other
Unit.


 


4.6.3                      No
types of refrigerating, cooling or heating apparatus are permitted
on a roof, except as permitted by law, and then only with the
prior, written approval of the ARC. Further, no such apparatus is
permitted elsewhere on a Unit, other than on the ground, except
when appropriately screened and approved in writing by the
ARC.


 




 

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4.6.4                      No
exterior radio antenna, television antenna, or other antenna,
satellite dish, or audio or visual reception device of any type may
be placed, erected or maintained on any Unit, except inside a
residence or otherwise concealed from view; provided, however, that
any such devices may be erected or installed by the Developer or by
any Builder during its sales or construction upon the Units; and
provided further, however, that the requirements of this subsection
do not apply to those “antenna” (including certain satellite dishes) which
are specifically covered by the Telecommunications Act of 1996
and/or applicable regulations, as amended. As to
“antenna” (including certain satellite dishes) which
are specifically covered by the Telecommunications Act of 1996
and/or applicable regulations, as amended, the ARC is empowered to
adopt CCR Rules and Regulations governing the types of
“antenna” (including certain satellite dishes) that
are permissible hereunder and, to the extent permitted by the
Telecommunications Act of 1996 and/or applicable regulations, as
amended, establish reasonable, non-discriminatory restrictions
relating to appearance, safety, location, maintenance, and other
matters.


 


4.6.5                      No
fences, other than fences constructed or installed by the Developer
or a Builder (with the prior,
written approval of the Developer), are permitted, except with the
prior, written approval (which may be with conditions and/or
requirements) of the ARC. Any fence(s) constructed on a Unit shall
be maintained, repaired and replaced by the Owners of that
Unit.


 


4.6.6                      The
ARC may not effectively prohibit renewable energy generation
devices or the installation or use of any energy efficient
measures, provided that the ARC may adopt reasonable aesthetic
rules and regulations concerning dimensions, placement or external
appearance of such devices or measures to the extent such rules and
regulations do not conflict with or violate applicable
laws.


 


Section 4.7 Vehicular Parking, Storage and
Repairs.


 


4.7.1                      Subject
to the Guidelines and/or the CCR Rules and Regulations (as
hereinafter defined), the garage area and driveway of each Unit
should first be fully used for the parking of vehicles before any
street parking is done. However, notwithstanding the foregoing,
street parking is not restricted by this
Section.


 


4.7.2                      Commercial
vehicles, vehicles with commercial writing on their exteriors,
vehicles primarily used or designed for commercial purposes,
tractors, mobile homes, recreational vehicles, trailers (either
with or without wheels), campers, camper trailers, boats and other
watercraft, recreational vehicles, golf carts and boat trailers,
may only be parked in enclosed garages or specific areas, if any,
which may be designated by ARC. This restriction, however, does not
restrict trucks or commercial vehicles which are necessary for
construction or for the maintenance of any portion of the Property,
or any Improvements located thereon, and such restriction does not
prohibit vehicles that may be otherwise parked as a temporary
expedient for loading, delivery or emergency, or emergency service
vehicles. Stored vehicles and vehicles which are inoperable or do
not have current operating licenses are not be permitted on the
Property except within enclosed garages. For purposes of this
Section, the ARC may determine whether a vehicle is considered
“stored”. For example, a vehicle may be considered
to be “stored” if it is up on blocks or covered with a
tarpaulin and remains on blocks or so covered for seventy-two (72)
consecutive hours without the prior approval (which may be with
conditions and/or requirements) of the ARC.


 




 

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4.7.3                      No
activity, including maintenance, repair, rebuilding, dismantling,
repainting or servicing of any kind of vehicles, trailers or boats,
may be performed or conducted in the Property unless it is done
within completely enclosed structure(s) which screen the sight and
sound of the activity from the street and from adjoining property.
Any Owner or other Person undertaking any such activities will be
solely responsible for, and assumes all risks of, such activities,
including adoption and utilization of any and all necessary safety
measures, precautions and ventilation. However, the foregoing
restrictions do not prevent washing and polishing of any motor
vehicle, boat, trailer, motor-driven cycle, or other vehicle on a
Unit, together with those activities normally incident and
necessary to such washing and polishing.


 


4.7.4                      In
the event the ARC determines that a vehicle is parked or stored in
violation of subsections 0
or 0
hereof, then the ARC shall deliver a
written notice describing said vehicle to the owner thereof (if
such owner can be reasonably ascertained) or conspicuously place
such notice upon the vehicle (if the owner thereof cannot be
reasonably ascertained), and if the vehicle is not removed within a
reasonable time thereafter, as determined by the ARC, then the ARC
may have the vehicle removed at the sole expense of the owner
thereof.


 


4.7.5                      DEVELOPER,
EACH BUILDER, THE SKY RANCH DISTRICTS AND CAB, AND THE ARC, HEREBY
DISCLAIM ANY AND ALL OBLIGATIONS REGARDING, RELATING TO OR ARISING
OUT OF, THE PERFORMANCE OF ANY MAINTENANCE, SERVICING, REBUILDING,
REPAIR, DISMANTLING, OR REPAINTING OF ANY TYPE OF VEHICLE, BOAT,
TRAILER, MACHINE OR DEVICE OF ANY KIND, BY ANY OWNER OR OTHER
PERSON.


 


Section 4.8 Nuisances.


  No
nuisance is permitted which is visible within or otherwise affects
any portion of the Property, nor any use, activity or practice
which interferes with the peaceful enjoyment or possession and
proper use of any Unit, or any portion thereof, by its residents.
As used herein, the term “nuisance” includes each
violation of the Governing Documents.




 


Section 4.9 No Hazardous Activities; No
Hazardous Materials or Chemicals.


 No
activities shall be conducted on any Unit which are unsafe or
hazardous to any person or property. Without limiting the
generality of the foregoing, no firearms shall be discharged upon
any Unit, and no open fires shall be lighted or permitted on any
Unit (except in a contained barbecue unit while attended and in use
for cooking purposes or within an interior fireplace or outdoor
fire pit powered by natural gas, propane or something similar).
Further, no hazardous materials or chemicals shall at any time be
located, kept or stored in, on or at any Unit, except such as may
be contained in household products normally kept at homes for use
of the residents thereof, and in such limited quantities so as not
to constitute a hazard or danger to person or
property.




 


Section 4.10 No Annoying Lights,
Sounds.


  No
light shall be emitted from any Unit which is unreasonably bright
or causes unreasonable glare and no sound shall be emitted from any
Unit which is unreasonably loud or annoying.


 




 

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Section 4.11 Restrictions on Trash and
Materials.


  No
refuse, garbage, trash, lumber, grass, shrubs or tree clippings,
plant waste, metal, bulk materials, scrap or debris of any kind
shall be kept, stored, or allowed to accumulate, except inside the
residence, nor shall such items be deposited on a street, unless
placed in a suitable, tightly-covered container that is suitably
located solely for the purpose of trash or recycling pickup. All
equipment for the storage or disposal of such materials shall be
kept in a clean and sanitary condition. No garbage or trash cans or
receptacles shall be maintained in an exposed or unsightly manner.
Finally, trash removal services may be subscribed to by the Sky
Ranch Districts or CAB on behalf of the residents of the Property
and, if so, the governing board of the Sky Ranch Districts or CAB
may determine the scope, frequency, and all other matters, with
regard to such trash removal services; and the Owners shall pay
their proportionate share of such trash removal services, as
determined by the governing board of the Sky Ranch Districts or
CAB.




 


Section 4.12 Trash Removal Services and
Recycling.


  Declarant
requires centralized trash removal and recycling services for the
Lots and/or Units, other than with respect to removal of
construction waste resulting from Declarant’s,
Declarant’s Affiliates’ or Builders’ respective
construction activities. Without limiting its authority, the CAB,
on behalf of the Sky Ranch Districts, may levy and collect fees,
charges, and other amounts to be imposed upon the Lots and/or Units
for such trash removal and recycling services; provided, however
that such fees, charges and other amounts must be derived from
within the applicable District boundaries where the trash removal
and recycling services are required or performed. The scope,
frequency, and all other matters with respect to such trash removal
and recycling services, shall be determined by the CAB. Without
limiting the generality of the foregoing, the CAB may, for example,
as a part of establishing rules and regulations related to the
enforcement of the covenant to provide centralized trash removal
and recycling services, elect to provide for regularly scheduled
trash pick-ups and recycling, but may require each Owner to be
responsible for scheduling, and paying for, any extraordinary trash
pick-ups and/or other recycling and may limit the items eligible
for trash pick-up and/or recycling from time to time. In the event
that the CAB does not administer trash removal and/or recycling
services for the Property, one or more of the Districts shall
enforce this covenant by coordinating the centralized trash removal
and recycling services for the Lots and/or Units, including,
without limitation, the levy and collection of fees, charges, and
other amounts to be imposed upon the Lots and/or Units for such
trash removal and recycling services; provided, however that such
fees, charges and other amounts must be derived from within the
applicable District boundaries where the trash removal and
recycling services are required or performed.


 


Section 4.13 Units to be
Maintained.


  Subject
to Section 4.5 hereof, each Unit
(including adjacent tree lawn areas) shall at all times be
maintained, repaired and replaced in a good, clean and sightly
condition by the Owners of such Unit.




 


Section 4.14 Leases.


  The
term “lease,” as
used herein, includes any agreement for the leasing or rental of a
Unit, or any portion thereof, and shall specifically include
month-to-month rentals and subleases. Any Owner has the right to
lease his Unit, or any portion thereof, as long as all leases
provide that the terms of the lease and lessee’s occupancy of
the leased premises are subject in all respects to the Governing
Documents; and that any failure by the lessee to comply with any of
the aforesaid documents, in any respect, constitutes a default
under the lease.


 




 

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Section 4.15 Landscaping.


  Within
the time frames as hereinafter provided, subject to applicable
“force majeure”
delays as determined by the ARC, the Owner of each Unit (other than
Developer or a Builder) shall install landscaping on all portions
of the Unit which is not covered by a building or Improvement, as
well as on the tree lawn areas adjacent to such Unit in accordance
with the Governing Documents and the requirements of the applicable
governmental entity having jurisdiction. The Owner of each Unit
(other than Developer or a Builder) shall install landscaping on
such Unit, and on adjacent tree lawn areas, within the time period
set forth in the Guidelines or, if not set forth in the guidelines,
then one hundred (180) days after acquisition of such Unit by such
Owner, if said acquisition occurs between April 1 and July 31, or;
by the following July 31 if such acquisition does not occur between
such dates, then such Owner shall install such landscaping.
Landscaping plans must be submitted to the ARC for review and
approval (which may be with conditions and/or requirements), and
such approval must be obtained prior to the installation of
landscaping, in accordance with Article 3 of these Covenants. Each
Owner shall maintain all landscaping on such Owner’s Unit,
and on adjacent tree lawn areas, in a neat and attractive
condition, including periodic and horticulturally correct pruning,
removal of weeds and debris, and replacement of
landscaping.




 


Section 4.16 Grade and Drainage; Irrigation
Recommendations; Drainage Easement; Maintenance of Surface Drainage
Improvements and Underdrains.


  


4.16.1                      Each
Owner shall maintain the grading upon his Unit, and grading around
the building foundation, at the slope and pitch fixed by the final
grading thereof, so as to maintain the established drainage. Each
Owner agrees that he will not in any way interfere with the
established drainage pattern over his Unit. In the event that it is
necessary or desirable to change the established drainage over any
Unit, then the Owner thereof shall submit a plan to the ARC for
review and approval (which may be with conditions and/or
requirements), in accordance with Article 3 of
these Covenants, and any such change shall also be made in
accordance with all laws, regulations, requirements and resolutions
of all applicable governmental entities. For purposes of this
Section, “established
drainage” is defined as
the drainage which exists at the time final grading of a Unit by
the Developer, or by a Builder, is completed.


 


4.16.2                      The
Owner of a Unit should not plant flower beds (especially annuals),
vegetable gardens and other landscaping which requires regular
watering, within five (5) feet of the foundation of the dwelling
unit or any slab on the Unit. If evergreen shrubbery is located
within five (5) feet of any foundation wall or slab, then the Owner
of the Unit should water such shrubbery by
“controlled
hand-watering,” and
should avoid excessive watering. Further, piping and heads for
sprinkler systems should not be installed within five (5) feet of
foundation walls and slabs.


 


4.16.3                      Developer
reserves to itself and to the Sky Ranch Districts and CAB the right
to enter in and upon each rear, front and side yard drainage
easements of record, at any time, to construct, repair, replace or
change drainage pipes, structures or drainage ways, or to perform
such grading, drainage or corrective work as Developer or the Sky
Ranch Districts or CAB may determine.


 




 

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ARTICLE 5  



ALTERNATIVE
DISPUTE RESOLUTION


 


Section 5.1 Intent of Article;
Applicability of Article; and Applicability of Statutes of
Limitation.


 


5.1.1                      Each
Bound Party (as defined below) agrees to encourage the amicable
resolution of disputes, without the emotional and financial costs
of litigation. Accordingly, each Bound Party covenants and agrees
to submit any Claims (as defined below) to the procedures set forth
in Section 4.6 hereof.


 


5.1.2                      By
acceptance of a deed for a Unit, each Owner agrees to abide by the
terms of this Article.


 


5.1.3                      Any
applicable statute of limitation applies to the alternative dispute
resolution procedures set forth in this
Article.


 


Section 5.2 Definitions Applicable to this
Article.


  For
purposes of this Article only, the following terms have the
meanings set forth in this Section:


 


5.2.1                      “Bound
Party” means each of the
following: the Developer, each Builder, each contractor,
subcontractor, supplier, and laborer, the Sky Ranch Districts or
CAB, to the extent permitted by law, and their respective
directors, officers, members, partners, employees and agents; the
ARC and the committees and representatives appointed by the ARC,
and each of their respective members and agents; all Persons
subject to these Covenants; and any Person who is not otherwise
subject to these Covenants, but who agrees to submit to this
Article. Notwithstanding the foregoing, “Bound Party” does not include any of the Persons
identified in this Section, if such Persons have jointly entered
into a separate written agreement providing for dispute resolution
applicable to the Claim; in such circumstance, the dispute
resolution mechanism set forth in such separate written agreement
between such Persons will apply with respect to such Claim, unless
such Persons mutually agree to submit such Claim to the provisions
of this Article.


 


5.2.2                      “Claimant”
means any Bound Party having a Claim.


 


5.2.3                      “Claim”
means, except as exempted by the terms of this Article, any claim,
grievance or dispute between one Bound Party and another,
regardless of how the same may have arisen or on what it might be
based, including those arising out of or related to (i) the
interpretation, application or enforcement of any of the Governing
Documents or the rights, obligations or duties of any Bound Party
under any of the Governing Documents; and/or (ii) any statements,
representations, promises, warranties, or other communications made
by or on behalf of any Bound Party.


 




 

22








 






 


 


 


5.2.4                      “JAG”
means the Judicial Arbiter Group or any other Person agreed to by
the Claimant and Respondent in writing for the purpose of
performing the functions of the Judicial Arbiter Group under these
Covenants.


 


5.2.5                      “Notice”
means the written notification given by a Claimant to a Respondent
which complies with subsection 0
of these
Covenants.


 


5.2.6                      “Party”
means the Claimant and the Respondent individually;
“Parties” means the Claimant and the Respondent
collectively.


 


5.2.7                      “Respondent”
means any Bound Party against whom a Claimant asserts a
Claim.


 


5.2.8                      “Termination
of Mediation” means a
period of time expiring thirty (30) days after submission of the
matter to mediation (or within such other time as determined by the
mediator or otherwise agreed to by the Parties) and upon the
expiration of which the Parties have not settled the applicable
Claim.


 


5.2.9                      “Termination
of Negotiations” means a
period of time expiring thirty (30) days after the date of the
Notice (or such other period of time as may be agreed upon by the
Parties) and upon the expiration of which the Parties have not
resolved a Claim.


 


Section 5.3 Commencement or Pursuit of
Claim Against Bound Party.


 


5.3.1                      A
Bound Party may not commence or pursue a Claim against any other
Bound Party except in compliance with this
Article.


 


5.3.2                      Prior
to any Bound Party commencing any proceeding against another Bound
Party, the Respondent has the right to be heard by the Claimant,
and to access, inspect, correct the condition of, or redesign, any
portion of any Improvement as to which a defect is alleged or
otherwise correct the alleged dispute.


 


Section 5.4 Claims.


  Unless
specifically exempted below, all Claims between any of the Bound
Parties are subject to the provisions of Section 5.6 hereof. Notwithstanding the
foregoing, unless all Parties thereto otherwise agree, the
following shall not be Claims and shall not be subject to the
provisions of Section 5.6
hereof:


 


5.4.1                      any
action by the ARC, the governing board of the Sky Ranch Districts
or CAB, or the Developer, to enforce these Covenants, or any
provision(s) of the Guidelines or the CCR Rules and Regulations (as
hereinafter defined), including obtaining a temporary restraining
order or injunction (or equivalent emergency equitable relief), and
such other ancillary relief as a court may deem
necessary;


 




 

23








 






 


 


 


5.4.2                      any
suit between or among Owners, which does not include Developer,
Builder, the Sky Ranch Districts or CAB, or the governing board of
the Sky Ranch Districts or CAB as a Party, if such suit asserts a
Claim which would constitute a cause of action independent of the
Governing Documents; and


 


5.4.3                      any
suit in which any indispensable party is not a Bound
Party.


 


Section 5.5 Mandatory
Procedures.

 


5.5.1                      Notice.
Prior to proceeding with any Claim against a Respondent, each
Claimant shall give a Notice to each Respondent, which Notice must
state plainly and concisely:


 

(a) the nature of the
Claim, including all Persons involved and Respondent’s role
in the Claim;


 

(b) the legal basis of
the Claim (i.e., the specific authority out of which the Claim
arises);


 

(c) the proposed
remedy; and


 

(d) the fact that
Claimant will give the Respondent an opportunity to inspect all
property and Improvements potentially involved with the Claim, and
that Claimant will meet with Respondent not sooner than thirty (30)
days after such inspection to discuss in good faith ways to resolve
the Claim.


 

 



5.5.2                       

Negotiation and
Mediation.






 

(a) The Parties shall
make every reasonable effort to meet in person and confer for the
purpose of resolving the Claim by good faith negotiation. If
requested in the Notice, the governing board of the Sky Ranch
Districts or CAB may appoint a representative to assist the Parties
in negotiation.


 

(b) Upon a Termination
of Negotiations, Claimant shall have thirty (30) days to submit the
Claim to mediation under the auspices of JAG (or such other
reputable arbitration service as acceptable to the parties) in
accordance with the rules of JAG (or the rules of such other
reputable arbitration service as acceptable to the parties) in
effect on the date of the Notice that is provided for in subsection
0 of these Covenants.


 

(c) If Claimant does
not submit the Claim to mediation within such time, or does not
appear for the mediation, Claimant shall be deemed to have waived
the Claim, and Respondent shall be released and discharged from any
and all liability to Claimant on account of such Claim; provided,
nothing herein shall release or discharge Respondent from any
liability to any Person other than the Claimant.


 




 

24








 






 


 


 

(d) Any settlement of
the Claim through mediation shall be documented in writing by the
mediator and signed by the Parties. If a Termination of Mediation
occurs, the mediator shall issue a notice of Termination of
Mediation. The Termination of Mediation notice must state that the
Parties are at an impasse and the date that mediation was
terminated.


 

(e) Each Party shall
bear its own costs of the mediation, including attorneys’
fees, and each Party shall share equally all charges rendered by
the mediator.

(f) If the Parties
agree to a resolution of any Claim through negotiation or mediation
in accordance with subsection 0 and
any Party thereafter fails to abide by the terms of such agreement,
then any other Party may file suit or initiate arbitration
proceedings to enforce such agreement without the need to again
comply with the procedures set forth in Section 5.5 hereof. In such event, the Party
taking action to enforce the agreement is entitled to recover from
the non-complying Party (or if more than one non-complying Party,
from all such Parties pro rata) all costs incurred in enforcing
such agreement, including attorneys’ fees and court
costs.


 

 


Section 5.6 Final, Binding
Arbitration.


 


 


5.6.1                      Upon
termination of mediation, if Claimant desires to pursue the Claim,
Claimant shall thereafter be entitled to initiate final, binding
arbitration of the Claim under the auspices of JAG, in accordance
with the then-current rules of JAG in effect as of the date of the
Notice provided in accordance in subsection 0
of these Covenants (or such other
reputable arbitration service and its rules as acceptable to the
parties). Any judgment upon the award rendered by the arbitrator
may be entered in and enforced by any court having jurisdiction
over such Claim. Unless otherwise mutually agreed to by the
Parties, there will be one arbitrator who must have expertise in
the area(s) of dispute, which may include legal expertise if legal
issues are involved.


 


5.6.2                      Each
Party shall bear its own costs and expenses, and an equal share of
the arbitrator’s and administrative fees of arbitration.
Notwithstanding the foregoing, if a Party unsuccessfully contests
the validity or scope of arbitration in a court of law, reasonable
attorneys’ fees and expenses incurred in defending such
contests, including those incurred in trial and on appeal, shall be
awarded to the non-contesting Party. All decisions respecting the
arbitrability of any Claim shall be decided by the
arbitrator.


 


5.6.3                      The
award of the arbitrator shall be accompanied by detailed written
findings of fact and conclusions of law. Except as may be required
by law or for confirmation of an award, neither a Party nor an
arbitrator may disclose the existence, content, or results of any
arbitration without the prior written consent of all
Parties.


 




 

25








 






 



ARTICLE 6



GENERAL PROVISIONS


 


Section 6.1 Rules and
Regulations.


  Any
rules and regulations, if any, concerning and governing the
Property, may be
promulgated, adopted, enacted, modified, amended, repealed, and
re-enacted by the governing board of the Sky Ranch Districts or CAB
(“CCR Rules and Regulations”) and such
actions shall not be construed as an amendment to these Covenants
requiring processing under Section
6.6, hereof. The CCR Rules and Regulations, if any, may state
procedural requirements, interpretations, clarifications and
applications of any provision(s) of these Covenants or the
Guidelines and law, and may include blanket requirements, blanket
interpretations, and blanket applications. The governing board of
the Sky Ranch Districts or CAB has the authority to adopt or vary
one or more CCR Rules and Regulations that are different for
different types of Units, if any. Any CCR Rules and Regulations, if
any, that are adopted must be in accordance with, and must not be
inconsistent with or contrary to, these Covenants.


 


Section 6.2 Enforcement.


 


6.2.1                      Enforcement
of the covenants, conditions, restrictions, easements,
reservations, rights-of-way, liens, charges and other provisions
contained in these Covenants, as amended, may be by any proceeding
at law or in equity against any Person(s) violating or attempting
to violate any such provision, and possible remedies include all of
those available at law or in equity, but Claims subject to Article
5 will be subject to the alternative dispute resolution procedures
set forth in Article 5. The Developer, the Sky Ranch Districts or
CAB, ARC and any aggrieved Owner, has the right, but not the duty,
to institute, maintain and prosecute any such proceedings. No
remedy is exclusive of other remedies that may be available. Except
as otherwise provided in Article 5 of these Covenants, in any
action instituted or maintained under these Covenants or any other
such documents, the prevailing party shall be awarded its costs and
attorney fees incurred in asserting or defending the claim, as well
as any and all other sums; except that, any Person who brings an
action against the Developer, any Builder, the Sky Ranch Districts
or CAB, or the ARC, regarding enforcement, or non-enforcement, of
any provision(s) of the Governing Documents, shall not be awarded
their costs or any attorney fees. Failure by the Developer, the Sky
Ranch Districts or CAB, the ARC or any Owner, to enforce any
covenant, restriction or other provision contained in these
Covenants, shall in no event give rise to any liability, nor shall
such non-enforcement be deemed a waiver of the right to thereafter
enforce any covenant, restriction or other provision of these
Covenants, regardless of the number of violations or breaches that
may occur.


 


6.2.2                      The
foregoing includes the right of the Sky Ranch Districts or CAB, to
send demand letters and notices, to charge interest and/or late
charges, to levy and collect fines, to impose liens (as provided in
C.R.S. Section 32-1-1001(j)(1), as amended), to negotiate, settle
and/or take any other actions, with respect to any violation(s), or
alleged violation(s), of any of the Governing
Documents.


 


 




 

26








 






 


 


Section 6.3 Severability.


 All
provisions of these Covenants are severable. Invalidation of any of
the provisions by judgment, court order or otherwise, shall in no
way affect or limit any other provisions, which shall remain in
full force and effect.




 


Section 6.4 Rights and Easements of
Developer and Builders.


 Notwithstanding
anything to the contrary contained in the Governing Documents, it
is expressly permissible and proper for Developer and each Builder,
and their respective employees, agents, and contractors, to perform
all activities, and maintain Improvements, tools, equipment, and
facilities, on the portion of the Property owned by them and also
on public property, incidental to development, construction, use,
rental, sale, occupancy, and/or advertising. The foregoing includes
locating, maintaining and relocating management offices,
construction offices, signs, model units and sales offices, in such
numbers, of such sizes, and at such locations on the portion of the
Property owned by them and also on public property, as determined
by the Developer or applicable Builder. In addition, nothing
contained in these Covenants limits the rights of Developer, or
require the Developer, to obtain approvals:


 


6.4.1                      to
excavate, cut, fill or grade any property (with the consent of the
Owner thereof), or to construct, alter, demolish or replace any
Improvements;


 


6.4.2                      to
use any Improvements on any property (with the consent of the Owner
thereof) as a construction, management, model home or sales or
leasing office, in connection with the development, construction or
sale of any property; and/or


 


6.4.3                      to
seek or obtain any approvals under these Covenants for any such
activity.


 


Section 6.5 Conflict of
Provisions.


  In
the case of any conflict between any of the Governing Documents,
these Covenants control.


 


Section 6.6 Duration, Revocation and
Amendment.


 


 


6.6.1                      Each
and every provision of these Covenants run with and bind the
Property perpetually from the date of recording of these Covenants.
Subject to subsection 0 of these
Covenants, these Covenants may be amended, supplemented and/or
terminated, by the affirmative vote or agreement of the Owners of
sixty-seven percent (67%) of the Units, but the Sky Ranch Districts
or CAB shall not be required to comply with or enforce any
Owner-adopted amendments, supplements or termination, until such
time as the governing board of the Sky Ranch Districts or CAB
receives a recorded copy of such amendment, supplement and/or
termination.


 


6.6.2                      Until
all of the Units have been conveyed to the first Owners thereof
other than the Developer or a Builder, no amendment, supplement or
termination of these Covenants shall be effective, without the
prior written approval of the Developer, which may be with
conditions and/or requirements. This subsection 0
will remain in effect until conveyance
of all the Units to the first Owners thereof, other than the
Developer or any Builder.


 




 

27








 






 


 


6.6.3                      These
Covenants may be amended, in whole or in part, by the Developer
without the consent or approval of any other Owner, the Sky Ranch
Districts or CAB, or any other Person, in order to comply with the
requirements, standards, or guidelines of any recognized secondary
mortgage markets, including the department of housing and urban
development, the federal housing administration, the veterans
administration, the federal home loan mortgage corporation, the
government national mortgage association, and the federal national
mortgage association. This subsection 0 will remain
in effect until conveyance of all the Units to the first Owners
thereof, other than the Developer or any
Builder.


 


6.6.4                      These
Covenants may be amended, in whole or in part, by the Developer
without the consent or approval of any other Owner, any Builder,
the Sky Ranch Districts or CAB, or any other Person, in order to
correct any clerical, typographical, technical or other errors in
these Covenants and/or to clarify any provision(s) of these
Covenants. This subsection 0
will remain in effect until conveyance
of all the Units to the first Owners thereof, other than the
Developer or any Builder.


 


6.6.5                      Each
Amendment to this Declaration enacted by the vote or agreement of
Owners of Units shall be applicable only to disputes, issues,
controversies, circumstances, events, claims or causes of action
that arose out of acts, omissions, events or other circumstances
that occurred after the date of recording of such amendment in the
real property records of the County, and no such amendment shall be
applied retroactively (i) to any disputes, issues, controversies,
circumstances, events, claims or causes of action that arose out of
acts, omissions, events or other circumstances that occurred before
the date of recording of such amendment in the County, or (ii) to
impair the rights or obligations of any Person, including
Developer, as originally set forth in these Covenants. This
subsection 0 may not
be amended without the written consent of the
Developer.




 


Section 6.7 Minor Violations of Setback
Restrictions.


  If
upon the erection of any structure, it is disclosed by survey that
a minor violation or infringement of setback lines has occurred,
the Owners of each Unit immediately adjoining the structure which
is in violation of the setback waive such violation or infringement
and such waiver shall be binding upon all other Owners. However,
nothing contained in this Section prevents the prosecution of a
suit for any other violation of these Covenants or the Guidelines,
if any. A “minor
violation,” for the purpose of this Section, is a
violation of not more than two (2) feet beyond the required setback
lines or Unit lines. This provision applies only to the original
structures and is not applicable to any alterations or repairs to,
or replacements of, any of such structures.




 


Section 6.8 Subdivision or Replatting of
Units.


  The
Developer reserves the right to subdivide or replat any Unit(s)
owned by the Developer. Each such subdivision or replatting may
change the number of Units in the Property. The foregoing
reservation includes the right to move any lot line(s) on Unit(s)
for the purpose of accommodating Improvements which are, or may be
constructed. This Section 6.8 will
remain in effect until conveyance of all the Units to the first
Owners thereof, other than the Developer or any
Builder.


 




 

28








 






 


 


Section 6.9 Annexation.


  The
Developer may annex to the Property additional real estate
(including Improvements), including any real estate (including
Improvements) which may previously have been withdrawn from the
Property. Each such annexation, if any, shall be accomplished by
recording, in the office of the Clerk and Recorder of the County,
of an annexation document that expressly states that the real
estate (including Improvements) described therein is annexed and
made subject to these Covenants and all terms and provisions
hereof. However, any such annexation may include provisions which,
as to the real estate (including Improvements) described therein,
adds to or changes the rights, responsibilities and other
requirements of these Covenants. Any such additional or changed
provisions may be amended, supplemented, and/or terminated, with
the consent of the Owners of 67% of the Units to which those
provisions apply. The first three (3) sentences of this Section 6.9, will remain in effect until
conveyance of all the Units to the first Owners thereof, other than
the Developer or any Builder.




 


Section 6.10 Withdrawal.


  The
Developer reserves the right to withdraw the Property, or any
portion thereof, including one or more Units, from these Covenants,
so long as the Developer owns the portion of the Property to be
withdrawn. Each withdrawal, if any, may be effected by the
Developer recording a withdrawal document in the office of the
Clerk and Recorder of the County. A withdrawal as contained in this
paragraph constitutes a divestiture, withdrawal, and de-annexation
of the withdrawn real estate (including Improvements) from these
Covenants so that, from and after the date of recording a
withdrawal document, the real estate (including Improvements) so
withdrawn is not a part of the “Property”. This
Section 6.10 will remain in effect
until conveyance of all the Units to the first Owners thereof,
other than the Developer or any Builder.




 


Section 6.11 Notices.


  Any
notice permitted or required in these Covenants is effective upon
the earlier to occur of (i) personal delivery upon the Person to
whom such notice is to be given; or (ii) two (2) days after deposit
in the United States mail, postage prepaid, addressed to the Owner
at the address for such Owner’s Unit.




 


Section 6.12 Limitation on
Liability.


  The
Developer, any Builder, the Sky Ranch Districts or CAB, the ARC,
and their respective directors, officers, shareholders, members,
partners, agents and employees, are not liable to any Person for
any action or for any failure to act arising out of any of the
Governing Documents, unless the action or failure to act was not in
good faith and was done or withheld with malice. Further, the Sky
Ranch Districts and CAB do not waive, and no provision of these
Covenants constitutes a waiver of, the immunities and limitations
to which the Sky Ranch Districts and CAB are entitled as a matter
of law, including the Colorado Governmental Immunity Act,
§24-10-101,
et seq. C.R.S., as amended. The release and waiver set forth in
Section 6.16 (Waiver) applies to this Section.




 


Section 6.13 No Representations, Guaranties
or Warranties.


  Neither
Developer, any Builder, the Sky Ranch Districts or CAB, the ARC,
nor their respective officers, directors, shareholders, members,
partners, agents or employees, have given or made any
representations, guaranties or warranties of any kind, express or
implied in connection with any portion of the Property, or any
Improvement, its physical condition, structural integrity, freedom
from defects, zoning, compliance with applicable laws, fitness for
intended use, or view, or in connection with the subdivision, sale,
operation, maintenance, cost of maintenance, taxes or regulation
thereof, unless and except as specifically set forth in writing.
The release and waiver set forth in Section 6.16 (Waiver) applies to this
Section.


 




 

29








 






 


 


Section 6.14 Disclaimer Regarding
Safety.


  DEVELOPER,
THE BUILDERS, THE SKY RANCH DISTRICTS AND CAB, THE ARC, AND THEIR
RESPECTIVE OFFICERS, DIRECTORS, SHAREHOLDERS, MEMBERS, PARTNERS,
AGENTS AND EMPLOYEES, HEREBY DISCLAIM ANY OBLIGATION REGARDING THE
SECURITY OF ANY PERSONS OR PROPERTY WITHIN THE PROPERTY. BY
ACCEPTING A DEED TO A UNIT WITHIN THE PROPERTY, EACH OWNER
ACKNOWLEDGES THAT DEVELOPER, THE BUILDERS, THE SKY RANCH DISTRICTS
AND CAB, THE ARC, AND THEIR RESPECTIVE OFFICERS, DIRECTORS,
SHAREHOLDERS, MEMBERS, PARTNERS, AGENTS AND EMPLOYEES, ARE
OBLIGATED TO DO THOSE ACTS SPECIFICALLY ENUMERATED IN THE GOVERNING
DOCUMENTS, IF ANY, AND ARE NOT OBLIGATED TO DO ANY OTHER ACTS WITH
RESPECT TO THE SAFETY OR PROTECTION OF PERSONS OR PROPERTY WITHIN
THE PROPERTY. THE RELEASE AND WAIVER SET FORTH IN SECTION 5.16
(WAIVER) APPLIES TO THIS SECTION.




 


Section 6.15 Development Within and
Surrounding the Property.


 Each
Owner acknowledges that development within and surrounding the
Property may continue for an indefinite period, and that plans for
the density, type and location of improvements, developments or
land uses may change over time. Such development may entail changes
to or alterations in the access to the Property, views of or from
the Property or the Units, surrounding land uses, open space or
facilities, traffic volumes or patterns, privacy or other aspects
or amenities. Development also may entail noise, odors,
unsightliness, dust and other inconveniences or disruptions. By
accepting a deed to a Unit, each Owner accepts title to such Unit
subject to the foregoing, and waives and releases any claim against
the Developer, any Builders, the Sky Ranch Districts and CAB, the
ARC, and their respective officers, directors, members, partners,
agents and employees, heirs, personal representatives, successors
and assigns, arising out of or associated with any of the
foregoing. The release and waiver set forth in Section 6.16 (Waiver) applies to this
Section.


 


Section 6.16 Waiver.


  By
acceptance of a deed to a Unit, each Owner hereby releases, waives,
and discharges the Developer, each Builder, the Sky Ranch Districts
and CAB, the ARC, and their respective officers, directors,
members, partners, agents and employees, heirs, personal
representatives, successors and assigns, from all losses, claims,
liabilities, costs, expenses, and damages, arising directly or
indirectly from any hazards, disclosures or risks set forth in
these Covenants, including, but not limited to, those contained in
Section 6.12, Section 6.13, Section
6.14 and Section
6.15.




 


Section 6.17 Headings.


 The
Article, Section and subsection headings in these Covenants are
inserted for convenience of reference only, do not constitute a
part of these Covenants, and in no way define, describe or limit
the scope or intent of these Covenants or any of the provisions
hereof.




 


Section 6.18 Gender.


  Unless
the context requires a contrary construction, the singular includes
the plural and the plural the singular and the use of any gender is
applicable to all genders.


 




 

30








 






 


 


Section 6.19 Action.


  Any
action that has been or may be taken by the Developer, any Builder,
the Sky Ranch Districts or CAB, the ARC, or any other Person, may
be taken “at any time, from
time to time”. Each provision that authorizes, directs
or permits action shall be deemed to include such
language.


 


Section 6.20 Sole
Discretion.


  All
actions which are to be taken by, or on behalf of, the Developer,
any Builder, Sky Ranch Districts or CAB, the governing body of the
Sky Ranch Districts or CAB, the ARC, or any other Person, will be
considered to have been taken “in the sole discretion” of such
Person.




 


Section 6.21 Use of “Include,”
“Includes,” and
“Including”.


  All
uses, in these Covenants, of the words “include,” “includes,” and “including,” will be construed to
include the words “without
limitation” immediately thereafter.


 


Section 6.22 Runs with the Land; Binding
Upon Successors.


  The
benefits, burdens, and all other provisions contained in these
Covenants are covenants running with and binding upon the Property
and all Improvements which are now or hereafter located on the
Property. The benefits, burdens, and all other provisions contained
in these Covenants are binding upon, and inure to the benefit of
the Developer, the Builders and all Owners, and upon and to their
respective heirs, personal representatives, successors and assigns;
but, no Person becomes a “Developer” or a
“Builder” under
these Covenants, except by written assignment or designation, as
more fully provided in Section 1.2 or
Section 1.4 of these Covenants,
respectively.


 


Section 6.23 Governmental
Immunity.



  Nothing herein shall be construed as a waiver of the
rights and privileges of the Sky Ranch Districts and CAB pursuant
to the Colorado Governmental Immunity Act, §§ 24-10-101,
et seq., C.R.S., as amended from time to time.


 


[SIGNATURE
PAGE FOLLOWS]


 




 

31








 






IN
WITNESS WHEREOF, the undersigned, being the Developer herein and
the Owner of the Property, has hereunto set its hand and seal this
___ day of ____________, 2017.

 

 


 

 

 


DEVELOPER:

 


PCY
Holdings, LLC,


a
Colorado limited liability company


 


 


By:                                                                           


Name:
___________________________________


Its:                                                                           


 



STATE OF
COLORADO  


)






)
ss.



COUNTY
OF 


)






 


The
foregoing instrument was acknowledged before me this ___ day of
____________, 2017, by  as  of PCY Holdings, LLC, a
Colorado limited liability company.


 


Witness
my hand and official seal.


 



{S E A
L}






Notary
Public


My
Commission expires: 


 


 


 




 

32








 







CONSENT OF SKY RANCH COMMUNITY AUTHORITY BOARD


 


The
undersigned, Sky Ranch Community Authority Board, hereby consent to
the aforesaid Covenants, Conditions and Restrictions for Sky
Ranch.


 

 


IN
WITNESS WHEREOF, the undersigned has hereunto set its hand this ___
day of ____________, 2017.

 


 


SKY
RANCH COMMUNITY AUTHORITY BOARD


 



By:           

____________________________________President






 



STATE OF
COLORADO


)







)           

ss.







COUNTY OF
________________________     


)






 


The
foregoing instrument was acknowledged before me this ___ day of
____________, 2017 by _________________ as President of SKY RANCH
COMMUNITY AUTHORITY BOARD.


Witness
my hand and official seal.


 


(S E A
L)


______________________________


Notary
Public My Commission Expires:
____________________


 




 

33








 







EXHIBIT A



TO



COVENANTS, CONDITIONS AND RESTRICTIONS



FOR SKY RANCH


(Property)


 


 


 




 

34








 







COVENANTS, CONDITIONS AND RESTRICTIONS

 



FOR SKY RANCH

 

 



TABLE OF CONTENTS

 


	

ARTICLE 1 GENERAL  

	

2


	

Section
1.1

	

Planned
Community.

	

2


	

Section
1.2

	

Purposes
of Covenants.

	

3


	

Section
1.3

	

Declarations.

	

3


	

Section
1.4

	

CAB
Authority.

	

3


	

ARTICLE 2 DEFINITIONS  

	

3


	

Section
2.1

	

ARC.

	

3


	

Section
2.2

	

Builder.

	

4


	

Section
2.3

	

CAB.

	

4


	

Section
2.4

	

Covenants.

	

4


	

Section
2.5

	

Developer.

	

4


	

Section
2.6

	

Governing
Documents.

	

4


	

Section
2.7

	

Improvements.

	

4


	

Section
2.8

	

Owner.

	

4


	

Section
2.9

	

Person.

	

4


	

Section
2.10

	

Property.

	

5


	

Section
2.11

	

Services.

	

5


	

Section
2.12

	

Sky
Ranch Districts.

	

5


	

Section
2.13

	

Unit.

	

5


	

ARTICLE 3 ARCHITECTURAL REVIEW
 

	

5


	

Section
3.1

	

Composition
of ARC.

	

5


	

Section
3.2

	

Delegation
of Some or All Architectural Authority.

	

5


	

Section
3.3

	

Architectural
Review Requirements; Authority of the ARC.

	

6


	

Section
3.4

	

Guidelines.

	

7


	

Section
3.5

	

Procedures.

	

7


	

Section
3.6

	

Vote.

	

7


	

Section
3.7

	

Prosecution
of Work After Approval.

	

7


	

Section
3.8

	

Notice
of Completion.

	

8


	

Section
3.9

	

Inspection
of Work.

	

8


	

Section
3.10

	

Notice
of Non-compliance

	

8


	

Section
3.11

	

Correction
of Non-compliance.

	

8


	

Section
3.12

	

Cooperation.

	

9


	

Section
3.13

	

Access
Easement.

	

9


	

Section
3.14

	

No
Liability.

	

9


	

Section
3.15

	

Variance.

	

10


	

Section
3.16

	

Waivers;
No Precedent.

	

10


	

Section
3.17

	

Developer
and Builder Exemption.

	

10






 

 



 

35







 





 


	

ARTICLE 4 RESTRICTIONS  

	

10


	

Section
4.1

	

General.

	

10


	

Section
4.2

	

Compliance
with Law.

	

11


	

Section
4.3

	

Residential
Use; Professional or Home Occupation.

	

11


	

Section
4.4

	

Animals.

	

11


	

Section
4.5

	

Temporary
Structures; Unsightly Conditions.

	

11


	

Section
4.6

	

Miscellaneous
Improvements.

	

11


	

Section
4.7

	

Vehicular
Parking, Storage and Repairs.

	

12


	

Section
4.8

	

Nuisances.

	

13


	

Section
4.9

	

No
Hazardous Activities; No Hazardous Materials or
Chemicals.

	

14


	

Section
4.10

	

No
Annoying Lights, Sounds.

	

14


	

Section
4.11

	

Restrictions
on Trash and Materials.

	

14


	

Section
4.12

	

Trash
Removal Services and Recycling.

	

14


	

Section
4.13

	

Units
to be Maintained.

	

15


	

Section
4.14

	

Leases.

	

15


	

Section
4.15

	

Landscaping.

	

15


	

Section
4.16

	

Grade
and Drainage; Irrigation Recommendations; Drainage Easement;
Maintenance of Surface Drainage Improvements and
Underdrains.

	

15


	

ARTICLE 5 ALTERNATIVE DISPUTE RESOLUTION
 

	

16


	

Section
5.1

	

Intent
of Article; Applicability of Article; and Applicability of Statutes
of Limitation.

	

16


	

Section
5.2

	

Definitions
Applicable to this Article.

	

16


	

Section
5.3

	

Commencement
or Pursuit of Claim Against Bound Party.

	

17


	

Section
5.4

	

Claims.

	

18


	

Section
5.5

	

Mandatory
Procedures.

	

18


	

Section
5.6

	

Final,
Binding Arbitration.

	

19


	

ARTICLE 6 GENERAL PROVISIONS
 

	

20


	

Section
6.1

	

Rules
and Regulations.

	

20


	

Section
6.2

	

Enforcement.

	

20


	

Section
6.3

	

Severability.

	

21


	

Section
6.4

	

Rights
and Easements of Developer and Builders.

	

21


	

Section
6.5

	

Conflict
of Provisions.

	

21


	

Section
6.6

	

Duration,
Revocation and Amendment.

	

21


	

Section
6.7

	

Minor
Violations of Setback Restrictions.

	

22


	

Section
6.8

	

Subdivision
or Replatting of Units.

	

23


	

Section
6.9

	

Annexation.

	

23


	

Section
6.10

	

Withdrawal.

	

23


	

Section
6.11

	

Notices.

	

23


	

Section
6.12

	

Limitation
on Liability.

	

23


	

Section
6.13

	

No
Representations, Guaranties or Warranties.

	

24


	

Section
6.14

	

Disclaimer
Regarding Safety.

	

24


	

Section
6.15

	

Development
Within and Surrounding the Property.

	

24


	

Section
6.16

	

Waiver.

	

24


	

Section
6.17

	

Headings.

	

25


	

Section
6.18

	

Gender.

	

25


	

Section
6.19

	

Action.

	

25


	

Section
6.20

	

Sole
Discretion.

	

25


	

Section
6.21

	

Use
of “Include,” “Includes,” and
“Including”.

	

25


	

Section
6.22

	

Runs
with the Land; Binding Upon Successors.

	

25


	

Section
6.23

	

Governmental
Immunity.

	

25







 


 




 

36








 










 


 



Schedule 5 - Public Improvement Fee Covenant


 


 


 


 


 


 




 

37








DRAFT
8-15







DECLARATION OF COVENANTS IMPOSING AND IMPLEMENTING

 


THE SKY
RANCH PUBLIC IMPROVEMENT FEE

 

 


THIS
DECLARATION OF COVENANTS IMPOSING AND IMPLEMENTING THE SKY RANCH
PUBLIC IMPROVEMENT FEE (this “PIF Covenant”) is made and
effective as of __________, 2017 by PCY Holdings, LLC, a
Colorado limited liability company (“Declarant”).

 



RECITALS

 


This
PIF Covenant is made with respect to the following
facts:

 

A.  All terms
used herein shall have the meanings set forth in Section 1 hereof
unless the context otherwise requires.


B.
Declarant owns certain real property described on Exhibit A hereto, which Declarant is
currently operating or intends to develop as a residential and
commercial development to be known as the
_________________________________ (“Property”) located within
unincorporated Arapahoe County, Colorado. New public improvements
and services are needed to serve the Property and other properties
within the service area boundaries of the Sky Ranch Metropolitan
District No. 5 or other quasi-municipal entity which may exist or
be formed to include the Property or a public improvement
corporation established for such purpose (the “District”).

 


C.           The
public improvements that the District will construct, install or
cause to be constructed and installed, operated and maintained,
include those public improvements the costs of which may lawfully
be paid for by the District (the “Public Improvement Costs”),
including, without limitation, water services, safety protection
devices, sanitation services, street improvements, curbs, gutters,
culverts, drainage facilities, sidewalks, parking facilities,
paving, lighting, grading, railroad crossings, landscaping,
transportation services and storm and wastewater management
facilities and associated land acquisition and remediation (the
“Public
Improvements”).

 


D.           The
Public Improvement Costs shall be paid, in part, through the
imposition of:

 


i.) a
Retail Public Improvement Fee on all PIF Sales equal to
2.75%. Subject to
the terms of this PIF Covenant, such Retail Public Improvement Fee
shall be required to be collected by all Retailers and then paid
over to the PIF Collection Agent on behalf of the District or the
Bond Trustee; and

 


ii.) a
one-time Material Sales and Use Public Improvement Fee imposed on
Construction Activities for the materials incorporated into the
construction of any newly constructed building, dwelling or
structure within the Property. The Material Sales and Use Public
Improvement Fee shall be equal to 2.75% of an amount equal to fifty
percent (50%) of the Construction Valuation Amount. Subject to the
terms of this PIF Covenant, such Material Sales and Use Public
Improvement Fee shall be required to be collected from all Persons
constructing any new building, dwelling or structure within the
Property at the time a building permit is obtained for such
construction. The Material Sales and Use Public Improvement Fee
shall be paid over to the PIF Collection Agent on behalf of the
District or the Bond Trustee.

 


 




 

38








 






 


 

 


The PIF
Collection Agent shall receive the Retail Public Improvement Fees
and the Material Sales and Use Public Improvement Fees and remit
the same to the Bond Trustee to pay for Bond Requirements and other
costs provided in the Public Financing Documents or if the Public
Financing Documents are not in place or do not require the full
amount of fees collected to be remitted to the Bond Trustee, to the
District.

 


E.           The
Declarant under this PIF Covenant owns fee title to all of the
Property, which is the property that is subject to this PIF
Covenant.

 


F.           The
Declarant intends to assign its declarant rights, as fee simple
owner of the


Property
subject to this PIF Covenant to the District in accordance with the
terms and conditions


of this
PIF Covenant and the District intends to assume the declarant
rights of the Declarant and


to
exercise all of the rights and perform the obligations of the
Declarant hereunder.

 


G.           Subject
to and in accordance with the terms and provisions of this PIF
Covenant, Declarant now desires to impose the obligation to collect
and pay, and to provide for the implementation of the collection
and payment of, the Retail Public Improvement Fee and the Material
Sales and Use Public Improvement Fee.

 



Declaration

 


In
consideration of the facts set forth in the Recitals and for other
good and valuable consideration, the receipt and sufficiency of
which are acknowledged by Declarant, Declarant hereby declares as
follows:

 


1.           Defined
Terms. The following terms, when used in this PIF Covenant,
shall have the following meanings:

 


“Bond
Requirements” means principal, redemption or purchase price,
premium, if any, interest, reserves and other amounts required to
be paid with respect to the Bonds or other Public Financing
outstanding from time to time.

 


“Bonds”
means any of the bonds, notes, certificates, leases, loan
agreements or other financial obligations to be issued from time to
time by the District, the proceeds of which are used to pay Public
Improvement Costs or to pay the costs of any refunding or
refinancing of outstanding bonds, notes, certificates, leases, loan
agreements or other financial obligations issued by the
District.

 


“Bond
Trustee” means the trustee or fiduciary acting on behalf of
holders of the Bonds pursuant the Public Financing
Documents.

 


“Confidential
Information” has the meaning set forth in Section 6
hereof.

 


“Construction
Activities” means the use of building and construction
materials for incorporation into the construction of any new
building, dwelling or structure, in each case to the same extent
that such building and construction materials are included in the
Construction Valuation Amount as indicated on the application for a
County building permit. The Material Sales and Use Public
Improvement Fee shall apply to all Construction Activities within
the Property including, but not limited to, commercial, retail,
residential and industrial classified structures; provided,
however, “Construction Activities” shall not include
the use of building and construction materials in connection with
reconstruction, renovation, remodel or other improvement of
existing buildings or existing structures.

 


 




 

39








 






 


 

 


“Construction
Activities Guidelines” has the meaning set forth in Section
3(b) hereof.

 


“Construction
Valuation Amount” means the total cost or valuation of the
project giving rise to the applicable Construction Activities as
indicated on the application for the County building permit for
such project and finally determined by the County to be a
reasonable approximation of the value of materials for the
applicable Construction Activities.

 


“County”
means the County of Arapahoe, State of Colorado, or any government
with the jurisdiction to grant building permits for construction on
the Property.

 


“County
Clerk” means the County Clerk and Recorder of Arapahoe
County, Colorado.

 


“Declarant”
means PCY Holdings, LLC a Colorado limited liability company or its
successors or assigns.

 


“Default
Rate” means eighteen percent (18%) per annum, but if such
rate exceeds the maximum interest rate permitted by State law, such
rate shall be reduced to the highest rate allowed by State law
under the circumstances.

 


“Dissemination
Agent” means an agent of the District or the Bond Trustee
charged with disseminating information on a periodic basis to the
Public Financing Documents.

 


“District”
has the meaning set forth in Recital A above.

 


“Enforcing
Party” has the meaning set forth in Section 7
hereof.

 


“Material
Sales and Use Public Improvement Fee” shall mean a one-time
fee assessed pursuant to and in accordance with this PIF Covenant
against all Construction Activities occurring on the Property. The
Material Sales and Use Public Improvement Fee shall be equal to
2.75% of an amount equal to fifty percent (50%) of the Construction
Valuation Amount. Subject to the terms of this PIF Covenant, such
Material Sales and Use Public Improvement Fee shall be required to
be collected from all Persons undertaking Construction Activities
at the time a building permit is obtained for such
construction.

 


“Occupant”
means any Person who has the legal right, pursuant to a deed,
lease, sublease, license, concession, easement or other occupancy
agreement of any type or nature, to possess or occupy any portion
of the PIF Property, including, without limitation, any space
within any building constructed on any PIF Property; provided that
a mortgagee, a trustee under or beneficiary of a deed of trust, or
any other Person who has such of right of possession primarily for
the purpose of securing a debt or other obligation owed to such
Person, shall not constitute an “Occupant” unless and
until such Person becomes an Owner or a mortgagee in possession or
otherwise possesses or occupies a portion of the PIF Property by an
intentional or voluntary act of its own, whereupon the subject
mortgagee, trustee, beneficiary or other Person shall be an
“Occupant” hereunder.

 


 




 

40








 






 


 

 


“Owned/Leased
Property” means, with respect to any Owner, the portion of
the PIF Property to which such Owner owns fee title and, with
respect to any Occupant, the portion of the PIF Property which such
Occupant has the right to possess or occupy pursuant to its lease,
sublease, license, concession or other occupancy
agreement.

 


“Owner”
means any Person who owns fee title to all or any portion of the
PIF Property.

 


“Person”
means any individual, partnership, corporation, limited liability
company, association, trust or other type of entity or
organization.

 


“PIF
Collection Agent” means the person or firm designated by the
District as responsible for monitoring, receiving and enforcing the
collection of Public Improvement Fee revenues pursuant to this PIF
Covenant.

 


“PIF
Covenant” means this PIF Covenant as it may be supplemented
or amended from time to time.

 


“PIF
Obligor(s)” means, with respect to the Retail Public
Improvement Fee, any Retailer or, with respect to the Material
Sales and Use Public Improvement Fee, any Person who engages in
Construction Activities, or hires another (e.g., a contractor) to
engage in Construction Activities, and is therefore obligated to
pay a Material Sales and Use Public Improvements Fee with regard to
such Construction Activities pursuant to the terms of this PIF
Covenant.

 


“PIF
Property” or “Property” means the real property
described on Exhibit A
hereto, provided that additional property may be made a part of the
PIF Property pursuant to the provisions of Section 13
hereof.

 


“PIF
Sales” shall mean and refer to any and all retail sales
transactions by any Retailer of tangible personal property
initiated, consummated, conducted, transacted or otherwise
occurring from or within any portion of the Property which are on
the date of recording of this PIF Covenant subject to the Sales
Tax, plus any and all retail sales transactions by any Retailer of
tangible personal property initiated, consummated, conducted,
transacted or otherwise occurring from or within any portion of the
Property which are from time to time in the future subject to a
retail Sales Tax but excluding any retail sales transactions
specified as exempt from the definition of PIF Sales in the
guidelines established by the District from time to time pursuant
to Section 4 hereof.

 


“PIF Sales
Guidelines” has the meaning set forth in Section 4(a)
hereof.

 


“Pledge”
means such assignment, conveyance, pledge, remittance or other
transfer as may be customary and necessary or appropriate to make
fully available for payment of the Bond Requirements any Public
Improvement Fee revenues.

 


“Public
Financing” means the sale of Bonds by the
District.

 


“Public
Financing Documents” means any documents executed or
delivered in connection with any Public Financing.

 


 




 

41








 






 


 

 


“Public
Improvements” has the meaning set forth in Recital B above.

 


“Public
Improvement Costs” has the meaning set forth in Recital B above.

 


“Public
Improvement Fee” as used in this PIF Covenant shall mean the
Retail Public Improvement Fee and the Material Sales and Use Public
Improvement Fee as may be applicable in the context of such
reference herein.

 


“Report
Recipients” has the meaning set forth in Section 6
hereof.

 


“Reports”
has the meaning set forth in Section 6 hereof.

 


“Retailer”
means any Occupant who is a seller or provider of goods or services
who engages in any PIF Sales initiated, consummated, conducted,
transacted or otherwise occurring from or within any portion of the
PIF Property.

 


“Retail
Public Improvement Fee” means a Public Improvement Fee
assessed pursuant to this PIF Covenant on all PIF Sales equal to
2.75%.

 


“Sales
Tax” means that tax levied by the State pursuant to the Sales
Tax Statutes.

 


“Sales Tax
Statutes” means Sections 39-26-101 et. seq., Colorado Revised
Statutes, and any regulations promulgated pursuant thereto, both as
amended from time to time.

 


“State”
means the State of Colorado.

 


2.
Assignment of Declarant
Rights. The Declarant, as owner of the Property does hereby
transfer, assign, convey and deliver to District any and all rights
and benefits reserved to the Declarant pursuant to this PIF
Covenant and District hereby assumes from the Property Owners any
and all rights and benefits reserved to the Declarant under this
PIF Covenant.

 

3. Assessment of Public Improvement
Fee. From and after the filing of this PIF
Covenant:

 

(a) every Retailer
shall collect the Retail Public Improvement Fee on each PIF Sale
and pay the same to the District or the PIF Collection Agent as
required by the Public Financing Documents or this PIF
Covenant;

 

(b) every Owner or
Occupant who leases or subleases any portion of its Owned/Leased
PIF Property to a Retailer, or who permits a Retailer to occupy any
portion of its Owned/Leased PIF Property by license, concession or
otherwise, shall require, pursuant to the lease, sublease, license,
concession or other occupancy agreement between such Owner or
Occupant and each Retailer by virtue of which such Retailer is
given the right to possess or occupy any portion of such
Owned/Leased PIF Property, that such Retailer collect in the Retail
Public Improvement Fee on each PIF Sale and pay the same to the
District or the PIF Collection Agent as required by the Public
Financing Documents or this PIF Covenant; and

 


 




 

42








 






 


 

 

(c) each Person who
intends to engage in Construction Activities will, prior to, or at
the time of issuance of a building permit for such Construction
Activities, pay the Material Sales and Use Public Improvements Fee
with respect to such Construction Activities to the District or the
PIF Collection Agent as set forth in the Construction Activities
Guidelines.

 

4. Guidelines.

 



(a)           

In accordance with
the definition of PIF Sales set forth in Section 1 above, the
District in its sole discretion may from time to time establish
uniform guidelines further clarifying or delineating which
transactions are included in the definition of “PIF
Sales” (“PIF Sales
Guidelines”) for purposes of calculating the Retail
Public Improvement Fee due hereunder, provided, however, that such
guidelines may not change the definition of PIF Sales or waive the
Retail Public Improvement Fee collection. Such guidelines shall be
delivered to all Retailers in writing (and for purposes of
determining the names and addresses of Retailers, any Owner will,
within 10 business days after receipt of a written request therefor
from the District, the Trustee or the PIF Collection Agent, provide
such requesting party with the name and address of all Retailers
that then occupy any PIF Property owned by such Owner). Each
Retailer shall be entitled to rely on such guidelines for purposes
of compliance with this PIF Covenant. In addition to the Retail
Public Improvement Fee, each Retailer shall be subject to all sales
and use taxes that may be imposed and otherwise not waived or
credited by any other applicable taxing entity.





 



(b)           

In accordance with
the definition of Construction Activities set forth in Section 1
hereof, the District in its sole discretion (but subject to any
applicable terms of any Public Financing Documents) may from time
to time establish reporting forms (“MSU Reports”), instructions and
uniform guidelines for the calculation, collection and remittance
of revenues derived from imposition of the Material Sales and Use
Public Improvements Fee, and for further clarifying or delineating
which transactions are included in the definition of
“Construction Activities” (“Construction Activities
Guidelines”). The Construction Activities Guidelines
shall apply and be enforced in a uniform and consistent manner to
all of the PIF Property and each portion of the PIF Property. The
District or PIF Collection Agent shall make available the
Construction Activities Guidelines to all Owners, Occupants and PIF
Obligors. Each Owner, Occupant and PIF Obligor shall be entitled to
rely on the Construction Activities Guidelines for purposes of
compliance with this PIF Covenant. In addition to the Material
Sales and Use Public Improvements Fee, each Owner, Occupant and PIF
Obligor is subject to all use taxes that may be imposed and
otherwise not waived or credited by the State of Colorado or any
other applicable taxing entity.





 


 




 

43








 






 


 

 

5. Payment of Public Improvement
Fee.

 



(a)           

Retail Public Improvement Fee.
Whether or not collected from customers, each Retailer shall pay
the Retail Public Improvement Fee monthly in arrears for all PIF
Sales initiated, consummated, conducted, transacted or otherwise
occurring during the immediately preceding month from or within the
portion of the PIF Property occupied by such Retailer during such
month. The Retail Public Improvement Fee shall be due and payable
without notice within 20 days after the close of each calendar
month, and unless the District in its sole discretion otherwise
directs, each Retailer shall pay the same directly to the PIF
Collection Agent on behalf of the District or its assignee. The
procedures for reporting, assessment, collection, and segregation
of the Retail Public Improvement Fee (but not for calculation)
shall be identical in all material respects to those set forth in
Colorado law regarding the reporting, assessment, collection and
segregation of State sales tax, and each Retailer shall report PIF
Sales and remit the Retail Public Improvement Fee to the PIF
Collection Agent on a monthly basis when such Retailer reports and
remits sales taxes to the State, employing reporting forms and
following procedures provided by the State intended to be
substantially similar to those used and required by the State for
the remittance of Sales Tax. The Retail Public Improvement Fee
shall be calculated and imposed on transactions at the rate stated
above (in the definition of Public Improvement Fee) prior to the
calculation and assessment of the Sales Tax, and before any sales
taxes of any other taxing entity required to be imposed by law. The
Retail Public Improvement Fee shall be added to the sales price for
transactions subject to sales tax prior to the calculation of sales
taxes. The Sales Tax and sales taxes of other taxing entities shall
be calculated and assessed on the sum of the PIF Sales price plus
the amount of the Retail Public Improvement Fee. Specific
instructions regarding reporting forms and payment procedures shall
be provided to all Retailers by the District, and each Retailer
shall be entitled to rely thereon for purposes of compliance with
this Section 5(a). Declarant hereby acknowledges, any other Owner,
by acquiring fee title to any portion of the PIF Property subject
to this PIF Covenant, shall be deemed to have acknowledged, any
Occupant, by acquiring the right to possess or occupy any portion
of the PIF Property subject to this PIF Covenant, shall be deemed
to have acknowledged, and each Owner and Occupant shall cause any
Retailer whom such Owner or Occupant permits to possess or occupy
(by lease or otherwise) any portion-of its Owned/Leased PIF
Property, to acknowledge, prior to conducting any business at any
PIF Property, (i) THAT THE RETAIL PUBLIC IMPROVEMENT FEE IS
NOT A TAX IN ANY FORM AND IS A FEE IMPOSED UNDER PRIVATE COVENANT
AND NOT THROUGH THE EXERCISE OF ANY GOVERNMENTAL TAXING AUTHORITY;
(ii) THAT THE RETAIL PUBLIC IMPROVEMENT FEE REVENUES ARE NOT
TAX REVENUES IN ANY FORM AND THE RETAIL PUBLIC IMPROVEMENT FEE
SHALL NOT BE ENFORCEABLE BY THE ANY OTHER GOVERNMENTAL ENTITY OR
QUASI-GOVERNMENTAL ENTITY, OTHER THAN THE DISTRICT (EXCEPT WHERE
THE GOVERNMENTAL ENTITY IS THE PIF COLLECTION AGENT AND IS ACTING
IN SUCH CAPACITY UNDER THIS PIF COVENANT OR EXCEPT BY JUDICIAL
ENFORCEMENT PURSUANT TO AN ENFORCEMENT ACTION BROUGHT BY A PERSON
AUTHORIZED TO ENFORCE THIS PIF COVENANT); AND (iii) THAT THE
AUTHORITY OF THE DISTRICT AND/OR PIF COLLECTION AGENT TO RECEIVE
THE RETAIL PUBLIC IMPROVEMENT FEE IS DERIVED THROUGH THIS PIF
COVENANT. In the event the District or the Bond Trustee ceases to
be the PIF Collection Agent for the Public Improvement Fee (as
further described in Section 10 below), the District shall promptly
notify each Retailer of the same and provide appropriate direction
for payment and reporting of the Retail Public Improvement Fee
thereafter. For purposes of compliance with this Section 5, each
Retailer shall be entitled to rely upon written notice from the
District and, in such event, upon specific instructions regarding
reporting forms and payment procedures for the Retail Public
Improvement Fee provided in writing to such Retailer by the
District.





 


 




 

44








 






 


 

 


(b)           Material
Sales and Use Public Improvement Fee. Each PIF Obligor shall
pay the Material Sales and Use Public Improvement Fee. The Material
Sales and Use Public Improvement Fee owed by a PIF Obligor for any
Construction Activities shall be due and payable prior to or at the
time of such PIF Obligor obtaining a building permit from the
County for such Construction Activities, and in no event shall any
Construction Activities be commenced by or on behalf of any PIF
Obligor prior to the payment of the Material Sales and Use Public
Improvement Fee owed with respect to such Construction Activities.
Each PIF Obligor shall pay the Public Improvement Fee owed with
respect to Construction Activities to the PIF Collection Agent on
behalf of the District or its assignee. With the consent of the
County, the procedures for collection of any or all of the PIF
Revenues owed by a PIF Obligor for any Construction Activities may
be coordinated with the building permit process administered by the
County. The District may implement procedures applicable to all
proposed development and Construction Activities within the PIF
Property or any portion thereof pursuant to which PIF Obligors are
required to demonstrate payment of the Material Sales and Use
Public Improvement Fee with respect to any planned Construction
Activities as a precondition to commencing such Construction
Activities. Each PIF Obligor shall deliver to the PIF Collection
Agent a true and complete MSU Report relating to the applicable
Construction Activities and the PIF Collection Agent is expressly
authorized to deliver such MSU Report to the District and, at the
express written direction of the District, to the Bond Trustee or
other entity. Each PIF Obligor shall be under a continuing duty to
make such adjustments, additions, modifications or supplements to
the MSU Report as may be necessary to correct any mistake in a
previously delivered Report or to otherwise cause such MSU Report
to accurately reflect the Construction Valuation Amount for the
applicable Construction Activities and such other information
contained therein, and to deliver such adjustments, additions,
modifications or supplements to the MSU Report to the PIF
Collection Agent for distribution to the District. If any such
adjustment increases the amount of the Material Sales and Use
Public Improvement Fee that a PIF Obligor is required to remit or
pay, such PIF Obligor shall immediately pay such additional
Material Sales and Use Public Improvement Fee in the amount due to
the PIF Collection Agent. District hereby acknowledges, any Owner,
by acquiring fee title to any portion of the PIF Property subject
to this PIF Covenant, shall be deemed to have acknowledged, any
other Occupant, by acquiring the right to possess or occupy any
portion of the PIF Property subject to this PIF Covenant, shall be
deemed to have acknowledged (i) THAT THE MATERIAL SALES AND
USE PUBLIC IMPROVEMENT FEE IS NOT A TAX IN ANY FORM AND IS A FEE
IMPOSED UNDER PRIVATE COVENANT AND NOT THROUGH THE EXERCISE OF ANY
GOVERNMENTAL TAXING AUTHORITY; (ii) THAT THE MATERIAL SALES
AND USE PUBLIC IMPROVEMENT FEE REVENUES ARE NOT TAX REVENUES IN ANY
FORM AND THE MATERIAL SALES AND USE PUBLIC IMPROVEMENT FEE SHALL
NOT BE ENFORCEABLE BY ANY GOVERNMENTAL ENTITY OR QUASI-GOVERNMENTAL
ENTITY, OTHER THAN THE DISTRICT (EXCEPT WHERE THE GOVERNMENTAL
ENTITY IS THE PIF COLLECTION AGENT AND IS ACTING IN SUCH CAPACITY
UNDER THIS PIF COVENANT OR EXCEPT BY JUDICIAL ENFORCEMENT PURSUANT
TO AN ENFORCEMENT ACTION BROUGHT BY A PERSON AUTHORIZED TO ENFORCE
THIS PIF COVENANT); AND (iii) THAT THE AUTHORITY OF THE
DISTRICT AND/OR PIF COLLECTION AGENT TO RECEIVE THE MATERIAL SALES
AND USE PUBLIC IMPROVEMENT FEE IS DERIVED THROUGH THIS PIF
COVENANT.

 


 




 

45








 






 


 

 

6. Additional Reporting
Requirements. Each Retailer shall deliver to Declarant or
Affiliate of a Declarant specified by Declarant, the District and,
at the express written direction of the District, to the Bond
Trustee or other entity (collectively, “Report Recipients”), true and
complete copies of all written reports, returns, statements,
records and declarations, including any supplements or amendments
thereto (collectively the “Reports”) made or provided to the
State of Colorado by such Retailer in connection with all Sales Tax
for the corresponding Sales Tax period at the same time such
Reports are delivered to the State of Colorado. If any subsequent
adjustments, additions or modifications are made: to any Sales
Taxes or the Retail Public Improvement Fee reported, remitted or
paid, or Report made, by a Retailer to the State of Colorado with
respect to Sales Taxes or the Retail Public Improvement Fee, such
Retailer shall provide the Report Recipients with true and complete
copies of all revised Reports or other written material issued or
received by such Retailer in regard thereto. If any such adjustment
increases the amount of the Retail Public Improvement Fee which a
Retailer is required to remit or pay, or results in a refund of
such Retail Public Improvement Fee, such Retailer shall immediately
pay such additional Retail Public Improvement Fee in the amount
due, or shall receive an appropriate credit against the next retail
Public Improvement Fee due from such Retailer in the amount of such
excess Retail Public Improvement Fee. Such Retailer shall claim
such credits or pay such additional retail Public Improvement Fee
in the next monthly reporting period by use of the standard
reporting and remittance forms. All Reports made or provided by a
Retailer shall be maintained by such Retailer for at least three
years from the date of submission thereof to the State of Colorado,
and upon written request, shall be made available to the Report
Recipients for inspection and audit. Subject to Section 7 below,
Reports received by any Declarant, the District or the Bond Trustee
shall remain confidential and be used only for purposes of
collecting the Retail Public Improvement Fee due, enforcing
Retailers’ obligations hereunder, and otherwise monitoring
compliance with the provisions of this PIF Covenant.

 

7. Audits and Release of Information by
the PIF Collection Agent. By acquiring its possessory
interest in and to its Owned/Leased PIF Property subject to the
terms and conditions of this PIF Covenant, each Retailer and PIF
Obligor hereby specifically authorizes the District, the Bond
Trustee and or the PIF Collection Agent to audit the books and
records of such Retailer or PIF Obligor to determine compliance
with the Public Improvement Fee collection and remittance
obligation of such Retailer or PIF Obligor under this PIF Covenant
and, subject to the restrictions set forth in the next sentence, to
release to the Declarants, the District, the Bond Trustee and any
Dissemination Agent for distribution to the holders of any Bonds
(but not to any other person or entity, except as required by law)
such audited information and any Public Improvement Fee-related
reports, returns (including sales tax returns) and other documents
as are delivered to the District, the Bond Trustee and the PIF
Collection Agent by such Retailer or PIF Obligor and any relevant
information gathered by the District, the Bond Trustee, or
successor PIF Collection Agent during an audit or in reviewing such
reports, returns or other documents (collectively, the
“Confidential
Information”); provided, however, that all
Confidential Information, together with the contents thereof, shall
be kept strictly confidential and shall not be disclosed or
otherwise published by any person to whom the District, the Bond
Trustee, or successor PIF Collection Agent so releases Confidential
Information, except for such disclosures or publications as may be
required by applicable laws. Without limiting the foregoing
confidentiality and non-disclosure requirements, to the fullest
extent permitted under applicable laws, any publication or
disclosure of Confidential Information submitted by or pertaining
to a specific Retailer or PIF Obligor (or the contents of such
Confidential Information) by the District, the Bond Trustee or
successor PIF Collection Agent, any Declarant, the District, or any
Dissemination Agent (or by anyone else to whom the District, the
Bond Trustee or the successor PIF Collection Agent is required by
law to disclose Confidential Information) which is otherwise
required to be made, shall be made only on an aggregated basis with
the similar information submitted by other Retailers and PIF
Obligors and without separate identification (direct or indirect)
of the Public Improvement Fee or sales of such specific
Retailer.

 


 




 

46








 






 


 

 

8. Compliance and Enforcement.
Each Retailer and PIF Obligor shall comply with all policies and
requirements of District and the PIF Collection Agent regarding the
calculation and payment of the Public Improvement Fee. Each
Retailer shall comply with all policies and requirements of the
District regarding notification to customers of the assessment and
collection of the Public Improvement Fee as such policies and
requirements are communicated by the District to such Retailer in
writing from time to time. The failure or refusal of any Retailer
to assess, collect or remit the Public Improvement Fee, or to
comply with the requirements concerning notification to customers
as required in this PIF Covenant, shall constitute a default by
such Retailer under the terms of this PIF Covenant. The failure or
refusal of any PIF Obligor to remit the Material Sales and Use
Public Improvement Fee shall constitute a default by such PIF
Obligor under the terms of this PIF Covenant. THE DISTRICT, THE
BOND TRUSTEE, OR THE PIF COLLECTION AGENT ARE HEREBY EXPRESSLY MADE
THIRD PARTY BENEFICIARIES OF THE RETAILERS’ AND PIF
OBLIGORS’ OBLIGATIONS UNDER THIS PIF COVENANT, INCLUDING, BUT
NOT LIMITED TO, THE ASSESSMENT, COLLECTION AND REMITTANCE OF THE
PUBLIC IMPROVEMENT FEE. Declarant hereby acknowledges, any other
Owner, by acquiring fee title to any portion of the PIF Property
subject to this PIF Covenant, shall be deemed to have acknowledged,
any Occupant, by acquiring the right to possess or occupy any
portion of the PIF Property subject to this PIF Covenant, shall be
deemed to have acknowledged, and each Owner and Occupant shall
cause any Retailer whom such Owner or Occupant permits to possess
or occupy (by lease or otherwise) any portion of its Owned/Leased
PIF Property to acknowledge, prior to conducting any business at
any PIF Property, THAT ANY DECLARANT, THE DISTRICT, THE BOND
TRUSTEE, OR THE PIF COLLECTION AGENT SHALL HAVE A DIRECT CAUSE OF
ACTION AND FULL RIGHT AND AUTHORITY TO ENFORCE EACH
RETAILER’S AND PIF OBLIGOR’S OBLIGATIONS UNDER THIS PIF
COVENANT; AND THAT NO DEFAULT BY A RETAILER’S LANDLORD UNDER
ANY PROVISION OF THE LEASE OR OTHER OCCUPANCY AGREEMENT PURSUANT TO
WHICH SUCH RETAILER OCCUPIES ANY PIF PROPERTY SHALL ENTITLE SUCH
RETAILER TO ANY OFFSET, DEDUCTION OR OTHER DEFENSE TO PAYMENT OF
THE PUBLIC IMPROVEMENT FEE DUE HEREUNDER. Any payment of the Public
Improvement Fee not paid when due hereunder shall bear interest at
the Default Rate, and the defaulting Retailer or PIF Obligor shall
bear all costs of enforcement and collection thereof, including
reasonable attorney’s fees. In addition, if a Retailer or PIF
Obligor fails to pay any Public Improvement Fee when due and such
failure continues for more than 10 days after notice thereof is
given to such Retailer or PIF Obligor by the PIF Collection Agent,
the PIF Collection Agent may charge such Retailer or PIF Obligor,
and such Retailer or PIF Obligor shall be obligated to pay the PIF
Collection Agent, a late charge in an amount equal to the greater
of 10% of the delinquent Public Improvement Fee or $100.00. So long
as the District or the Bond Trustee is the PIF Collection Agent,
the District or the Bond Trustee shall have the right to take any
lawful action to the collect the Public Improvement Fee.
Notwithstanding anything to the contrary contained in this PIF
Covenant, any Declarant, the District, the Bond Trustee, or the PIF
Collection Agent, or any third party designated by any of the
foregoing (collectively, an “Enforcing Party”), shall have the
right to enforce the provisions of this PIF Covenant against any
Retailer or PIF Obligor that fails to abide by any of the terms and
conditions of this PIF Covenant. An Enforcing Party shall be
awarded and recover from a defaulting Retailer all costs and
expenses incurred by such Enforcing Party in successfully enforcing
the obligations of such Retailer or PIF Obligor under this PIF
Covenant in any legal
proceedings brought (or defended) by such Enforcing
Party.

 


 




 

47








 






 


 

 

9. Use and Pledge of Public Improvement
Fee Revenues; PIF Collection Agent’s Payment
Instructions. The Public Improvement Fee revenues generated
by the Public Improvement Fee imposed pursuant to this PIF Covenant
may be used for the payment of Public Improvements Costs or
otherwise as expressly provided in this PIF Covenant and the Public
Financing Documents. Any right, title and interest of any Declarant
in the Public Improvement Fee and the obligations of the PIF
Obligors as set forth in this PIF Covenant may be assigned by such
Declarant to the District or the Bond Trustee; provided, however,
notwithstanding any such assignment, such Declarant shall be
entitled to enforce this PIF Covenant against any Retailer or PIF
Obligor in the event such PIF Obligor fails to comply with the
provisions hereof. The District is hereby expressly authorized to
Pledge for the payment of Bond Requirements all Public Improvement
Fee revenues, or any portion thereof, generated by the Public Improvement Fee imposed
pursuant to this PIF Covenant and received or receivable by the PIF
Collection Agent. The PIF Collection Agent is hereby instructed and
required to pay so much of such Public Improvement Fee revenues
received by it as may be so Pledged to the party entitled thereto
pursuant to the applicable Public Financing Documents and the
balance thereof shall be paid to the District, to the extent
required for ongoing operation, maintenance and administrative
expenses of the District related to Public
Improvements.

 

10. PIF Collection Agent
Succession. If the District terminates the services of the
PIF Collection Agent and appoints a new PIF Collection Agent, the
District shall notify all Retailers thereof pursuant to Section
4 hereof.

 

11. General Acknowledgement.
Declarant hereby acknowledges, any other Owner, by acquiring fee
title to any portion of the PIF Property subject to this PIF
Covenant, shall be deemed to have acknowledged, and any Occupant,
by acquiring the right to possess or occupy any portion of the PIF
Property subject to this PIF Covenant, shall be deemed to
have acknowledged,
prior to conducting any business at any PIF Property, THAT THE
PROVISIONS OF THIS PIF COVENANT HAVE BEEN OR SHALL BE AGREED TO BY
THE DISTRICT AND THE BOND TRUSTEE, AND THAT THE DISTRICT AND THE
BOND TRUSTEE ARE OR SHALL BE RELYING UPON THESE PROVISIONS IN
TAKING CERTAIN ACTIONS WITH RESPECT TO THE PUBLIC IMPROVEMENT FEE
AND THE PUBLIC IMPROVEMENTS WITH THE EXPRESS CONDITION THAT THIS
PIF COVENANT SHALL NOT BE AMENDED, MODIFIED OR WAIVED; ACCORDINGLY,
DECLARANT HEREBY AGREES AND ALL OTHER OWNERS AND OCCUPANTS SHALL BE
DEEMED TO HAVE AGREED THAT NO AMENDMENT OR MODIFICATION SHALL BE
MADE TO, NOR ANY WAIVER MADE OR ACCEPTED BY DECLARANT, ANY OWNER OR
ANY OCCUPANT WITH RESPECT TO THIS PIF COVENANT WITHOUT THE WRITTEN
CONSENT OF THE DISTRICT AND THE BOND TRUSTEE, AND THAT ANY SUCH
PURPORTED AMENDMENT, MODIFICATION OR WAIVER, WITHOUT THE WRITTEN
CONSENT OF THE DISTRICT AND THE BOND TRUSTEE, SHALL BE VOID AND OF
NO FORCE AND EFFECT. Each Owner and Occupant shall cause any
Retailer whom such Owner or Occupant permits to possess or occupy
(by lease or otherwise) any portion of its Owned Leased PIF
Property to acknowledge, prior to conducting any business at any
PIF Property, THAT THE PROVISIONS OF THIS PIF COVENANT THAT PERTAIN
TO RETAILERS HAVE BEEN OR WILL BE AGREED TO BY THE DISTRICT AND THE
BOND TRUSTEE, AND THAT THE DISTRICT AND THE BOND TRUSTEE ARE OR
WILL BE RELYING UPON SUCH PROVISIONS IN TAKING CERTAIN ACTIONS WITH
RESPECT TO THE PUBLIC IMPROVEMENT FEE AND THE PUBLIC IMPROVEMENTS
WITH THE EXPRESS CONDITION THAT THE PROVISIONS OF THIS PIF COVENANT
THAT PERTAIN TO RETAILERS SHALL NOT BE AMENDED, MODIFIED OR WAIVED;
ACCORDINGLY, SUCH RETAILER SHALL BE DEEMED TO HAVE AGREED THAT NO
AMENDMENT OR MODIFICATION SHALL BE MADE TO, NOR ANY WAIVER MADE OR
ACCEPTED BY SUCH RETAILER WITH RESPECT TO THE PROVISIONS
OF THIS PIF COVENANT
THAT PERTAIN TO RETAILERS WITHOUT THE WRITTEN CONSENT OF THE
DISTRICT AND THE BOND TRUSTEE, AND THAT ANY SUCH PURPORTED
AMENDMENT, MODIFICATION OR WAIVER, WITHOUT THE WRITTEN CONSENT OF
THE DISTRICT AND THE BOND TRUSTEE, SHALL BE VOID AND OF NO FORCE
AND EFFECT.

 


 




 

48








 






 


 

 

12. Owner/Occupant Obligations.
Each Owner and Occupant shall cause any Retailer to whom such Owner
or Occupant leases or whom such Owner or Occupant otherwise permits
to occupy any portion of its Owned/Leased PIF Property, in its
lease or other occupancy agreement with such Retailer pursuant to
which such Retailer occupies any portion of such Owner’s or
Occupant’s Owned/Leased PIF Property, to acknowledge and
agree to (in a manner that causes such Retailer to be bound by) all
provisions of this PIF Covenant that pertain to such
Retailer.

 

13. Additional PIF Property.
Declarants may acquire fee title to, or cause one or more of its
affiliates to acquire fee title to, additional property
(“Additional PIF
Property”). Upon acquisition of any Additional PIF
Property by Declarant or such an affiliate, the new fee owner
thereof may record a supplement to this PIF Covenant in the real
property records maintained by the County Clerk, which shall set
forth the legal description of such Additional PIF Property and
state that, from and after the date of such recording, such
Additional PIF Property shall constitute PIF Property
for all purposes
under this PIF Covenant. From and after the date any such
supplement is properly signed, acknowledged and recorded, the
Additional PIF Property described therein shall constitute, and
become a part of the, PIF Property for all purposes under this PIF
Covenant.

 

14. No Dominion or Control by
Declarants. Notwithstanding anything contained in this PIF
Covenant to the contrary, or in any other document related to the
PIF Property, Declarant does not have and shall not be legally
entitled, authorized or empowered to exercise any dominion or
control over any of the Public Improvement Fee revenues imposed or
collected pursuant to this PIF Covenant and the Public Financing
Documents. To the extent any Public Improvement Fee revenue is
collected by any Declarant, such Declarant is merely acting on
behalf of the District in implementing this PIF Covenant and
providing for the collection and payment of Public Improvement Fee
revenues under the Public Financing Amendment. Subject to the
express terms of this Section 14: (a) the Public Improvement
Fee is a fee imposed on Retailers and PIF Obligors to pay Public
Improvements Costs as provided herein; (b) the nature of the
Public Improvement Fee is that of a fee imposed for the benefit of
the District under private contract and not through the exercise of
any District taxing authority; (c) the Public Improvement Fee
revenues are not tax revenues in any form and the Public
Improvement Fee shall not be enforceable by the State or any taxing
entity other than the District; (d) the Public Improvement Fee
revenues are the property of the District to be used for the
payment of the Bond Requirements and as otherwise may be provided
in this PIF Covenant or the Public Financing Documents; and
(e) the authority of the District to receive the Public
Improvement Fee revenues is derived through this PIF Covenant and
the Public Financing Documents.

 

15. Notices to Retailers. Whenever
a party is required pursuant to the provisions of this PIF Covenant
to give notice to “all” Retailers, the notice given
shall be deemed sufficient if given to all Retailers the names and
addresses of which were known to the party giving such notice after
a reasonably diligent effort to ascertain the names and addresses
of all Retailers

 

16. Governing Laws. This PIF
Covenant shall be governed by, and enforced in accordance with, the
laws of the State of Colorado.

 


 




 

49








 






 


 

 

17. Covenants Run with the Land.
The covenants, agreements, promises and duties as set forth in this
PIF Covenant shall be construed as covenants and not as conditions
and, to the fullest extent legally possible, all such covenants
shall run with and be enforceable against both the covenantor and
the land and shall constitute equitable servitudes burdening both
the respective covenantor and its PIF Property for the benefit of
the respective covenantee. Each covenant to do or refrain from
doing some act on or with respect to activities on any portion of
the PIF Property under this PIF Covenant (i) is a burden upon
such portion of the PIF Property and is for the benefit of the
remainder of the PIF Property, (ii) shall be a covenant
running with the land with respect to both the burdened and
benefited portions of the PIF Property, and (iii) shall be
binding upon of each Owner, Occupant and Retailer and each
successor to their respective interests in the PIF Property and
shall inure to the benefit of Declarants, the other Owners,
the District, the Bond
Trustee and any other PIF Collection Agent. If and to the extent
that any of the covenants or other provisions herein would
otherwise be unlawful or void for violation of (a) the rule
against perpetuities, (b) the rule restricting restraints on
alienation, or (c) any other applicable statute or common law
rule analogous thereto or otherwise imposing limitations upon the
time for which such covenants maybe valid, then the provisions
concerned shall continue and endure only until the expiration of a
period of 90 years after the date this PIF Covenant is filed in the
real property records maintained by the County Clerk.

 


17.           Severability.
Invalidation of any of the provisions contained in this PIF
Covenant, or of the application thereof to any person or entity, by
judgment or court order, will in no way affect any of the other
provisions of this PIF Covenant or the application thereof to any
other person or entity or circumstance and the remainder of this
PIF Covenant shall remain in effect; provided, however, that in the
event such invalidation would render the remaining portions of this
PIF Covenant ineffective to carry out the material intentions of
Declarant as expressed or implied by this PIF Covenant, then the
objectionable provisions) hereof shall be construed, and this PIF
Covenant shall be deemed amended, as if such provision were
replaced with an enforceable provision which effectuates, as nearly
as possible, the material intentions of Declarants.

 


18.           Applicability
of Retail Public Improvement Fee to Residential Property.
Declarant may cause portions of the PIF Property to be developed
for residential use. The Retail Public Improvement Fee as
established by this PIF Covenant shall have no applicability to any
portion of the PIF Property that is used solely for residential
purposes, except to the extent that any PIF Sales are initiated,
consummated, conducted, transacted or otherwise occur from or
within such portion of the PIF Property. Notwithstanding to
foregoing, the Material Sales and Use Public Improvement Fee is
applicable to the residential portions of the PIF
Property.

 


IN
WITNESS WHEREOF Declarants have executed this PIF Covenant as of
the date first set forth above.

 


Declarant:


 


PCY
Holdings, LLC,


a
Colorado limited liability company

 



By:                                                                 






Name: 


Title: 

 


 




 

50








 





 



STATE OF
__________ 


)






)
ss.



COUNTY OF
_____________  


)





 


 


The
foregoing instrument was acknowledged before me as of the _____ day
of _________________, 2017, by ______________________________ as
________________ of PCY Holdings, LLC, a Colorado limited liability
company.

 


WITNESS
my hand and official seal.


 


 


Notary
Public for the State of ____________


 


My
Commission Expires: 


 


 


 




 

51








 







Exhibit A

 


 

 


LEGAL
DESCRIPTION OF THE


PIF
PROPERTY

 


 


 


 




 

52








 







Schedule 6 - Tap Purchase Agreement


 


 


 


 




 

53








 






DRAFT
10/30/19



TAP PURCHASE AGREEMENT



(Sky Ranch)

 


THIS
TAP PURCHASE AGREEMENT (“Agreement”), dated as of the
_____ day of ____________, 2017 (the “Effective Date”),
by and between Rangeview Metropolitan District, a quasi-municipal
corporation and political subdivision organized and existing under
the constitution and laws of the State of Colorado, acting by and
through its water activity enterprise, with the address of 141
Union Boulevard, Suite 150, Lakewood, CO 80228
(“Rangeview”), and KB HOME COLORADO INC., a Colorado
corporation, with the address of 7807 E Peakview Avenue, Suite 300,
Centennial, CO 80111 (the “Company”). Rangeview and the
Company are sometimes hereafter referred to collectively as the
“Parties,” and either of them may sometimes hereafter
be referred to as a “Party”.

 



RECITALS

 

A. Company is a party
to a Contract for Purchase and Sale of Real Estate (the
“Contract”) for certain property located within the
development commonly known as Sky Ranch, County of Arapahoe, State
of Colorado, as generally depicted on Exhibit A
attached hereto and made a part of this Agreement (the
“Property”) and as more particularly described in said
Contract.

 

B. The Property is now
undeveloped.

 

C. Rangeview is
authorized to provide water and wastewater services to the Property
and the Company desires to obtain such services from Rangeview to
allow development of the Property to proceed.

 

D. Company desires to
acquire and use the Property for the construction of
________________ (___) [insert number – should be about
149] single family detached homes, which are to be developed
in phases as generally outlined on Exhibit A,
in compliance with applicable zoning, building, and other laws,
rules, and regulations.

 

E. Rangeview has
certain existing water and wastewater infrastructure, and plans to
construct additional infrastructure, to provide water and
wastewater services at the Property and to other
customers.

 

F.  Company
desires to purchase from Rangeview water and wastewater taps to
serve the Property with the revenue from said purchases to be
available to Rangeview in consideration of Rangeview providing
water and wastewater services to the Property.

 

G. The execution of
this Agreement will serve a public purpose and promote the health,
safety, prosperity, and general welfare of present and future
residents and landowners by providing for the planned and orderly
extension of water and wastewater services to the Property by
Rangeview.

 


 




 

54








 






 



COVENANTS


 


In
consideration of the recitals, the mutual promises and covenants
contained in this Agreement, and other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, Rangeview and Company agree as follows:

 



ARTICLE I

 


DEFINITIONS
AND INTERPRETATIONS

 

Section
1.1. Definitions. As used in this
Agreement, the words defined below and capitalized throughout the
text of this Agreement shall have the respective meanings set forth
below:

 


Agreement: This Tap Purchase
Agreement and any amendment to it made in accordance with Section
6.9 below.

 


Board: The duly constituted
Board of Directors of Rangeview.

 


Company: A Party to this
Agreement as described above.

 


Event of Default: One of the
events or the existence of one of the conditions set forth in
Section 5.1 below.

 


Lot: Lot means a single family
residential building lot as shown on a final subdivision plat of
the Property which designates a unique block and lot number to the
Lot.

 


Person: Any individual,
corporation, limited liability company, joint venture, estate,
trust, partnership, association, or other legal
entity.

 


Plans: The plans, documents,
drawings, and specifications for the engineering, design,
surveying, construction, installation, or acquisition of any water
and wastewater improvements; including any addendum, change order,
revision, or modification affecting the same.

 


Property: The real property as
described above.

 


Rangeview: A Party to this
Agreement as described above.

 


Residential Unit: One single
family detached dwelling unit.

 


Rules and Regulations: The duly
adopted rules, regulations, bylaws, resolutions, policies and
procedures of Rangeview governing water and wastewater service,
fees and charges, and other matters; effective as of the Effective
Date and as may be amended from time to time.

 


SFE: An SFE shall mean one
single family equivalent unit of water or wastewater demand as
defined in the Rules and Regulations. Absent unusual circumstances,
one SFE is a single family detached residence with an assumed water
demand of 0.4 acre feet of water per year, provided with a
three-quarter inch water service line and meter, and with a typical
balance of in-house and outside water usage. The average wastewater
demand for one SFE is 180 gallons of domestic-strength wastewater
per day.

 


 




 

55








 






 

 


Systems: The water and
wastewater systems of Rangeview, consisting of the facilities,
supplies, assets, and appurtenant property rights owned or directly
controlled by Rangeview, which are used and useful to Rangeview to
provide water and wastewater services to the Property and other
customers but not including the service lines and any other
facilities owned by individual customers as established in the
Rules and Regulations. The water system may be referred to herein
as the “Water System”; the wastewater system may be
referred to herein as the “Wastewater System”; and
together they may be referred to as the “Water and Wastewater
Systems”.

 


System Development Charges.
Collectively, the Water System Development Charges and the
Wastewater System Development Charges.

 


Tap: The physical connection to
Rangeview’s Water or Wastewater Systems which is authorized
by sequentially numbered Water and/or Wastewater Tap Licenses
issued by Rangeview for the same.

 


Tap License: The Tap License
issued by Rangeview that acknowledges the receipt of payment of
Water System Development Charges and/or Wastewater System
Development Charges, along with applicable Administrative Fees, as
provided for in the Rules and Regulations, for a specific Lot
within the Property.

 


Wastewater System Development
Charge: The Wastewater System Development Charges paid to
Rangeview as provided in Section 3.1 below for the right to make a
Tap and obtain domestic wastewater service from
Rangeview

 


Water System Development
Charge: The Water System Development Charges paid to
Rangeview as provided in Section 3.1 below for the right to make a
Tap and obtain potable and/or non-potable water service from
Rangeview.

 

Section
1.2. Interpretation. In this
Agreement, unless the context otherwise requires:

 

(a) All definitions,
terms, and words shall include both the singular and
plural.

 

(b) Words of the
masculine gender include correlative words of the feminine and
neuter genders.

 

(c) The captions or
headings of this Agreement are for convenience only and in no way
define, limit, or describe the scope or intent of any provision,
article, or section of this Agreement.

 

(d) The Recitals set
forth above are incorporated herein by this reference.

 


 




 

56








 






 



ARTICLE II

 


WATER
AND WASTEWATER SYSTEMS

 

Section
2.1. Construction of Certain On-Site and
Off-Site Water and Wastewater Systems. Rangeview has or
shall cause the construction and installation of the Water and
Wastewater Systems as needed to serve customers when needed within
the boundaries of the Property.

 

Section
2.2. Ownership, Operation and Use of Water
and Wastewater Systems. The Water and Wastewater Systems,
shall be owned, operated, and maintained by Rangeview. The
Company’s payment of System Development Charges shall not be
deemed to give Company any ownership right in any of the Water and
Wastewater Systems. The Water and Wastewater Systems shall be
available for the use of all persons in accordance with the Rules
and Regulations. The proceeds of System Development Charges may be
used, in the discretion of the Board, for capital, debt service,
operation, maintenance of Water and Wastewater Systems, payment of
other costs, fees and charges payable by Rangeview, and other
lawful purposes.

 

Section
2.3. Administration of Water and Wastewater
Systems. Rangeview shall establish all rates, fees, tolls,
penalties, and charges for the use of the Water and Wastewater
Systems. Unless otherwise expressly specified in this Agreement,
service to the Property shall be subject to all duly promulgated
rates, rules, regulations, and policies of Rangeview adopted and
applied on a nondiscriminatory basis for similarly situated
customers within their respective powers and
limitations.

 



ARTICLE III

 


SYSTEM
DEVELOPMENT CHARGES

 

Section
3.1. Water and Wastewater System
Development Charges.

 

(a) Subject to the
terms hereof, Rangeview hereby agrees to sell to Company, and
Company hereby agrees to purchase from Rangeview (if and when
Company secures building permits for the applicable lots within the
Property, Company not having any obligation to secure building
permits by any date(s) specific), Tap Licenses for (___)
[insert number –
should be about 149] Residential Units to be located on the
Property.

 

(b) The use of Tap
Licenses and the connection of the Taps shall be subject to all
applicable Rules and Regulations, including the requirement for
construction by Company at its cost of the “Service
Lines” as defined in the Rules and Regulations except as may
otherwise by specifically provided for in this
Agreement.

 

(c) System Development
Charges per Lot shall be calculated in accordance with the Rules
and Regulations. The System
Development Charges applicable to any particular Lot shall be paid
in accordance with the schedule provided for below at Section 3.2.
The System Development Charges may increase or decrease prior to
issuance of any Tap License, and Company shall pay the amount of
the System Development Charge in effect at the time of
payment.

 


 




 

57








 






 

(d) Additional Charges.
In addition to System Development Charges, Rangeview charges
certain administrative fees as outlined in Exhibit B
that includes a meter/meter set fee, inspection fee, and account
set up fee (the “Administrative Fees”) along with
periodic service charges, usage fees, and other rates, fees,
charges and assessments as provided for in the Rules and
Regulations and consistent with the District’s Service Plan,
as may be amended from time to time. Such rates, fees, charges and
assessments shall be imposed by Rangeview in such amounts as may be
determined by its board of directors on a nondiscriminatory basis
for similarly situated customers within their respective powers and
limitations.

 

(e) Additional Lots.
This Agreement does not obligate Rangeview to extend water and
wastewater services to additional lots beyond those specified in
Section 3.1(a). Nothing herein shall be deemed or construed to
limit Company’s ability to obtain water and wastewater
services from Rangeview, consistent with the Rules and Regulations,
for additional lots located off the Property and where Rangeview
has the right to provide such services.

 

Section
3.2. Schedule for Payment, Changes in
Fees.

 

(a) Payments. Company shall pay the
total amount due for System Development Charges and Administrative
Fees, as described in Section 3.1(d) above, applicable to a
specific Lot not later than the time of issuance of a building
permit for the construction of a Residential Unit on said Lot.
Payments shall be made by check, to the address specified by
Rangeview, or by wire transfer, with routing information as
specified by Rangeview.

 

(b) Changes in Rates, Fees, and
Charges. Changes to the System Development Charges,
Administrative Fees, or other rates, fees, charges and assessments
by Rangeview will become effective, including for Tap Licenses
thereafter purchased by the Company under this Agreement, after the
Board of Directors adopts and approves such new fees in a publicly
noticed meeting of the Board.

 

Section
3.3. Allocation of Taps. Each Tap
License purchased by Company shall be allocated to a Lot within the
Property as required by the Rules and Regulations. The SFE
allocation for each Lot shall be commensurate with the anticipated
demands on the Water and Wastewater Systems as provided in the
Rules and Regulations.

 

Section
3.4. Service Upon Payment. With
respect to any Residential Unit, Rangeview will permit a Tap
connection only upon payment by Company of the System Development
Charge and the Administration Fee provided for in this
Agreement.

 

Section
3.5. Expiration of SFE. If Company
fails to use any Tap License purchased from Rangeview by connecting
the Tap authorized by such Tap License within one (1) year after
the date of purchase, Company’s rights to use such Tap
License shall expire pursuant to the Rules and Regulations.
Although Company is not entitled to a refund of any
System Development Charges previously paid, Company shall be
entitled to a credit in the amount of those charges previously paid
towards the amount of the then-current System Development Charges
due and payable at the time any subsequent application is made to
purchase a Tap License for service to said Lot.

 


 




 

58








 






 

 

Section
3.6. License’s Non-Transferable,
Exception. Company shall not reallocate any Tap License
allocated to one Lot on the Property to another Lot without the
consent of Rangeview.

 

Section
3.7. Liability for Service Fee. The
then-current owner of the Lot for which the License was furnished
shall be liable for payment of all service fees and system
operation fees (including minimum service fees, if any) assessed by
Rangeview (on a nondiscriminatory basis for similarly situated
customers within their respective powers and limitations) with
respect to the particular Tap License purchased.

 



ARTICLE IV


REPRESENTATIONS,
WARRANTIES, AND COVENANTS


 

Section
4.1. Company Representations. In
addition to the other representations, warranties, and covenants
made by Company in this Agreement, Company makes the following
representations, warranties, and covenants to
Rangeview.

 

(a) Upon purchase of
the Property, Company will have good and marketable title to the
Property.

 

(b) Company has the
full right, power, and authority to enter into, perform, and
observe this Agreement.

 

(c) Neither the
execution of this Agreement, the consummation of the transactions
contemplated under it, nor the fulfillment of or the compliance
with the terms and conditions of this Agreement by Company will
conflict with or result in a breach of any terms, conditions, or
provisions of, or constitute a default under, or result in the
imposition of any prohibited lien, charge, or encumbrance of any
nature under any agreement, instrument, indenture, or any judgment,
order, or decree to which Company is a party or by which the
Company or the Property are bound.

 

Section
4.2. Rangeview Representations. In
addition to the other representations, warranties, and covenants
made by the Rangeview in this Agreement, Rangeview makes the
following representations, warranties, and covenants to
Company:

 

(a) Rangeview is
authorized under the Constitution and laws of the State of Colorado
to execute this Agreement and perform its obligations under this
Agreement, and all action on its part for the execution and
delivery of this Agreement has been or will be duly and effectively
taken.

 

(b) Rangeview has the
right, power, and authority to enter into, perform, and observe
this Agreement and to allocate Tap Licenses to Lots on the Property
and no third-party consent or approval is required for the
performance of the Rangeview’s obligations
hereunder.

 

(c) Neither the
execution of this Agreement, the consummation of the transactions
contemplated under it, nor the fulfillment of or the compliance
with the terms and conditions of this Agreement by Rangeview will
conflict with or result in a breach of any terms, conditions, or
provisions of, or constitute a default under, or result in the
imposition of any prohibited lien, charge, or encumbrance of any
nature under any agreement, instruction, indenture, resolution, or
any judgment, order, or decree of any court to which Rangeview is a
Party or by which Rangeview is bound.

 


 




 

59








 






 


 

 

(d) To
Rangeview’s actual knowledge, based on the representations of
the Company, as of the date hereof, the number of SFEs identified
in Section 3.1(a) are sufficient under the Rules and Regulations of
Rangeview for servicing the proposed Residential Units; however,
Company is responsible for determining the sufficiency of said
number of SFEs for Company’s use on the Property and if
additional SFEs are needed, Company shall acquire the same from
Rangeview.

 

(e) Rangeview has or
shall cause the construction and installation of the Water and
Wastewater Systems as needed to serve customers when needed within
the boundaries of the Property.

 

Section
4.3. Instruments of Further
Assurance. To the extent allowed by applicable law,
Rangeview and Company covenant that they will do, execute,
acknowledge, and deliver or cause to be done, executed,
acknowledged, and delivered, such acts, instruments, and transfers
as may reasonably be required for the performance of their
obligations under this Agreement.

 



ARTICLE V

 


DEFAULT,
REMEDIES, AND ENFORCEMENT

 

Section
5.1. Events of Default. The
occurrence of any one or more of the following events or the
existence of any one or more of the following conditions shall
constitute an Event of Default under this Agreement:

 

(a) Failure of the
Company to pay any System Development Charges, and/or service fees
when the same shall become due and payable as provided in this
Agreement or, as applicable, under the applicable Rules and
Regulations of Rangeview. The non-payment of any amount due
hereunder when due, if such failure continues for a period of ten
(10) business days after the delivery of written notice from
Rangeview to Company, shall constitute a default.

 

(b) Failure to perform
or observe any other of the material covenants, agreements, or
conditions in this Agreement, if such failure continues for a
period of ten (10) business days after the delivery of written
notice from Rangeview to Company as provided in Section
5.4;

 

(c) The failure of any
material representation or warranty made in this Agreement, if such
representation or warranty is not remedies within a period of ten
(10) business days after the delivery of written notice from
Rangeview to Company as provided in Section 5.4;

 

Section
5.2. Occurrence of Event of Default by
Company Results in Forfeiture. Upon the occurrence of an
Event of Default by Company, after written notice by Rangeview to
the Company and opportunity to cure as provided in Section 5.4, and
at the election of Rangeview, in its sole discretion,
Company’s rights to purchase additional SFEs for which System
Development Charges have not been received by Rangeview shall be
suspended until the Event of Default is cured; provided, that such
suspension shall not act to terminate the provision of water and
wastewater service for which System Development Charges have been
paid.

 


 




 

60








 






 


 

 

Section
5.3. Remedies on Occurrence of Events of
Default.

 

(a) Upon the occurrence
of an Event of Default by Company, after written notice by
Rangeview to the Company and opportunity to cure as provided in
Section 5.5, Rangeview shall have the following rights and
remedies:

 




(i)

To shut off or
discontinue water and/or wastewater service, in accordance with law
and the Rules and Regulations, to those Lots owned by Company for
which service fees have not been paid or that otherwise are not
compliant with the Rules and Regulations.





 




(ii)

To protect and
enforce its rights under this Agreement and any provision of law by
such suit, action, or special proceedings as Rangeview shall deem
appropriate, including, without limitation, any proceedings for the
specific performance of any covenant or agreement contained in this
Agreement or the enforcement of any other appropriate legal or
equitable remedy, or for the recovery of damages caused by breach
of this Agreement, including reasonable attorneys’ fees and
all other costs and expenses incurred in enforcing this
Agreement;





 




(iii)

To enforce
collection of any amount due to Rangeview by collection upon its
perpetual lien against the property served as provided in C.R.S.
§ 32-1-1001(1)(j) or (k) whether the amounts are due for
property within or without the district boundary of
Rangeview;





 




(iv)

To suspend
Company’s rights to purchase additional SFEs under this
Agreement as provided for in Section 5.2; and






 




(v)

If an Event of
Default is also a violation of the Rules and Regulations of
Rangeview, then Rangeview shall have all remedies available to them
to enforce the Rules and Regulations in addition to the remedies
provided under this Agreement.





 

(b) Upon the occurrence
of an Event of Default by Rangeview, after written notice by the
Company and opportunity to cure as provided in Section 5.5, the
Company is entitled to such remedies at law or in equity that are
available to it; provided, that such default shall not act to
terminate the provisions of water and wastewater service to a Lot
owner by Company for which a valid Tap License has been obtained
and water and wastewater service fees have been paid.

 

(c) Delay or Omission No Waiver. No
delay or omission of Rangeview or Company to exercise any right or
power accruing upon any Event of Default shall exhaust or impair
any such right or power or shall be construed to be a waiver of any
such Event of Default, or acquiescence in the Event of
Default.

 


 




 

61








 






 


 

 

Section
5.4. No Waiver of One Default to Affect
Another; All Remedies Cumulative; Notice and Opportunity to
Cure. No waiver of any Event of Default under this Agreement
by Rangeview or Company shall extend to or affect any subsequent or
any other then-existing Event of Default or shall impair any rights
or remedies available for such other Event of Default. All rights
and remedies of Rangeview and Company whether or not provided in
this Agreement, may be exercised following notice and an
opportunity to cure such default within ten (10) business days,
shall be cumulative, may be exercised separately, concurrently, or
repeatedly, and the exercise of any such right or remedy shall not
affect or impair the exercise of any other right or
remedy.

 

Section
5.5. No Effect on Rights. No
recovery of any judgment by Rangeview shall in any manner or to any
extent affect any rights, powers, or remedies of Rangeview or
Company under this Agreement, but such rights, powers, and remedies
of Rangeview or Company shall continue unimpaired as before. No
moratorium shall impair the rights of Rangeview or Company
hereunder.

 

Section
5.6. Discontinuance of Proceedings on
Default; Position of Parties Restored. In case Rangeview or
Company shall have proceeded to enforce any right under this
Agreement and such proceedings shall have been discontinued or
abandoned for any reason, or shall have been determined adversely
to Rangeview or Company, then and in every such case Rangeview and
Company shall be restored to their former positions and rights
hereunder (unless Rangeview shall have exercised its right to
terminate or rescind this Agreement), and, except as may be barred
by res judicata, all rights, remedies, and powers of Rangeview and
the Company shall continue as if no such proceedings had been
taken.

 

Section
5.7. Unconditional Obligation. The
obligations of Company to pay the System Development Charges as
provided for herein shall be absolute and unconditional and shall
be binding and enforceable in all circumstances and shall not be
subject to setoff or counterclaim (unless Rangeview is in in
default hereunder).

 



ARTICLE VI

 


MISCELLANEOUS
PROVISIONS

 

Section
6.1. Effective Date. Upon the
execution by both Parties of this Agreement, this Agreement shall
be in full force and effect and be legally binding upon each Party
on the date first written above.

 

Section
6.2. Time of the Essence. Time is of
the essence under this Agreement. If the last day permitted or the
date otherwise determined for the performance of any act required
or permitted under this Agreement falls on a Saturday, Sunday or
legal holiday, the time for performance shall be the next
succeeding weekday that is not a holiday, unless otherwise
expressly stated.

 

Section
6.3. Parties Interested Herein.
Nothing expressed or implied in this Agreement is intended or shall
be construed to confer upon, or to give to, any Person other than
Rangeview and the Company, any right, remedy, or claim under or by
reason of this Agreement or any covenants, terms, conditions, or
provisions hereof, and all the covenants, terms, conditions, and
provisions in this Agreement by and on behalf of Rangeview and
Company shall be for the sole and exclusive benefit of Rangeview
and the Company. The covenants, terms, conditions, and provisions
contained herein and all amendments of this Agreement shall inure
to and be binding upon the heirs, personal representatives,
successors and assigns of the Parties hereto, provided that any
assignment that requires consent as provided in Section 6.4 hereof
has been consented to by Rangeview.

 


 




 

62








 






 


 

 

Section
6.4. Assignment. Except as provided
in Section 3.6, Company shall not assign its rights or obligations
(in whole or in part) under this Agreement without the prior
written consent of Rangeview. Any other assignment of this
Agreement without written consent by Rangeview and resolution by
the Board shall be void. Except for an assignment by Rangeview to
another municipal, quasi-municipal, or political subdivision that
is a water and/or wastewater service provider, Rangeview shall not
assign its rights or obligations (in whole or in part) under this
Agreement without the prior written consent of
Company.

 

Section
6.5. Impairment of Credit. None of
the obligations of Company hereunder shall impair the credit of
Rangeview. Rangeview shall be able to rely upon the timely
performance of the obligations by Company to pay for Taps as herein
provided.

 

Section
6.6. Notices. Except as otherwise
provided herein, any notice or other communication required to be
given hereunder will be in writing and delivered personally, sent
by United States certified mail, return receipt requested, by
reputable overnight courier, or by facsimile, in each case
addressed to the Party to receive such notice at the following
addresses:

 


If to
District:                                      
Rangeview Metropolitan District


Attn:
Manager


141
Union Boulevard Suite 150,


Lakewood, CO
80228


E-mail:
ljohnson@SDMI.com


 


with a
copy
to:                                   
Rangeview Metropolitan District


Attn:
Mark Harding, President


34501
East Quincy Ave., Bldg. 34, Box 10


Watkins, CO
80137


Facsimile No:
(303)292-3475


E-mail:
mharding@purecyclewater.com


 


If to
Company:                                  
KB Home Colorado Inc.


7807 E
Peakview Avenue, Suite 300


Centennial, CO
80111


Attention: Doug
Shelton


Telephone:
(303) 323-1141


E-mail:
dshelton@kbhome.com


 


Any
notice delivered personally will be deemed given on receipt; any
notice delivered by mail will be deemed given three business days
after the deposit thereof in the United States mail with adequate
postage prepaid; any notice delivered by overnight courier will be
deemed given one business day after the same has been deposited
with the courier, with delivery charges prepaid; and any notice
given by facsimile will be deemed given on receipt by the
recipient’s facsimile facilities.

 


 




 

63








 






 


 

 

Section
6.7. Severability. If any covenant,
term, condition, or provision under this Agreement shall, for any
reason, be held to be invalid or unenforceable, the invalidity or
unenforceability of such covenant, term, condition, or provision
shall not affect any other provision contained in this Agreement,
the intention being that such provisions are
severable.

 

Section
6.8. Venue. Exclusive venue for all
actions arising from this Agreement shall be in the District Court
in and for Arapahoe County, Colorado.

 

Section
6.9. Amendment. This Agreement may
be amended from time to time by agreement between Rangeview and
Company; provided, however that no amendment, modification, or
alteration of the terms or provisions of this Agreement shall be
binding upon Rangeview or Company unless the same is in writing and
duly executed by Rangeview and Company.

 

Section
6.10. Entirety. This Agreement,
together with the recitals and exhibits attached hereto,
constitutes the entire contract between Rangeview and Company
concerning the subject matter herein, and all prior negotiations,
representations, contracts, understandings, or agreements
pertaining to such matters are merged into and superseded by this
Agreement.

 

Section
6.11. Governing Law. This Agreement
shall be governed and construed in accordance with the laws of the
State of Colorado.

 

Section
6.12. Attorneys’ Fees. Should
any action be brought in connection with this Agreement, including,
without limitation, actions based on contract, tort or statute, the
prevailing party in such action shall be awarded all costs and
expenses incurred in connection with such action, including
reasonable attorneys’ fees, plus interest at a rate of 12%
per annum on all said costs from the date of expenditure. The
provisions of this Paragraph 6.12 shall survive purchase of all
Taps by Company, or the expiration or termination of this
Agreement.

 



IN WITNESS WHEREOF, the Parties have caused this Agreement
to be executed on the date first written above:


 


COMPANY:


 


KB HOME
COLORADO INC.,


a
Colorado corporation


 




 

64








 






 


 


 



By:                                                                            







Name:                                                                                      







Title:                                                                                      






 


 


RANGEVIEW:


 


RANGEVIEW
METROPOLITAN DISTRICT,


a
Colorado quasi-municipal corporation and political subdivision
acting by and through its water enterprise


 


 


 


 



By:                                                                            






President


 


ATTEST:


 



By:                                                                 






Secretary


 




 

65








 






 



EXHIBIT A

 


To Tap
Purchase Agreement

 


[Diagram
of Property]

 


 

 


 

 


 




 

66








 






 



EXHIBIT B

 


to Tap
Purchase Agreement

 


 

 



RANGEVIEW RATES AND CHARGES

 


Being
Appendices C and E of the Rules and Regulations

 


(Current
as of the Effective Date)

 


 

 


Note:
“Administrative Fees”, as used in the Tap Purchase
Agreement, are the sum of the Administrative License Fee ($50.00)
and Water Meter Purchase and Set Fee (estimated to be $367.00 for
5⁄8”x3⁄4” or 3⁄4” water
meters)

 


 

 


 

 


 




 

67








 






 


Appendix
C – Rules and Regulations of Rangeview Metropolitan
District



ADMINISTRATIVE RATES AND CHARGES*


	


Article

	


Fee/Charge

	


Amount


	

6.2

	

System
Review Fee

	

Actual
Cost


	

6.3

	

Disconnection/Reconnection
Charge

	

Actual
Cost


	

6.4

	

Plan
Review Fee (Main Extensions)

	

Actual
Cost


	

6.5

	

Inspection/Observation
Fee (Main Extensions/Tap Installation)

	

Actual
Cost


	

6.6

	

Permit
Review Fee

	

Actual
Cost


	

6.9

	

Cure
Charge

	

Actual
Cost


	

6.11.c

	

Delinquent
Payment Late Fee

	

$10 +
1% Monthly Interest


	

6.11.d

	

Returned
Check Fee

	

$15.00


	

11.2

	


Water Meter Purchase and Set

	


Actual Cost


	

11.3.a

	


Administrative License Fee

	


$50.00


	

12.1.a

	

Water
System Development Charge

	

See
Appendix E


	

12.2.b

	

Potable
Water Consumption Charge

	

See
Appendix E


	

12.2.c

	

Monthly
Water Service Charge

	

See
Appendix E


	

12.3.a

	

Hydrant
Use Fee

	

$40.00
per permit


	

12.3.b

	

Hydrant
Use Rates

	

$13.00
per 1,000 gallons


	

12.3.c

	

Owner-initiated
Shutoff Fee, each shutoff

	

$15.00
per hour


	

12.3.d


 

	

Fire
Service Standby Fee, monthly fee

	
 


	

4-inch

	

$12.00


	

6-inch

	

$18.00


	

8-inch

	

$24.00


	

12.3.e

	

Well
Site Surcharge

	

$300
per acre


	

13.7

	

Non-Potable
Water Consumption Charge

	

85% of
potable charges


	

17.1.c

	

Sewer
System Development Charge

	

See
Appendix E


	

17.2.a

	

Monthly
Sewer Service Charge

	

See
Appendix E


	

17.3.a

	

Interceptor
Inspection Fee, each inspection

	

$25.00







* Rates
and charges as effective as of March 2017


 


 




 

68








 






 


Appendix
E – Rules and Regulations of Rangeview Metropolitan District
(Note: Residential only listed)



(1) 

SKY
RANCH SERVICE AREA SYSTEM DEVELOPMENT CHARGES






	


Article

	


Fee/Charge

	


Amount


	

12

	

Residential
Water System Development Charge

	

$26,675
per SFE based on 0.4 acre feet of water use per year.


	

17

	

Wastewater
System Development Charge

	

$4,659
per SFE







 



SKY RANCH EXAMPLE SYSTEM DEVELOPMENT CHARGES


	


Component

	


1.0 SFE Amount*

	


0.8 SFE Amount**


	

Total
Water System Development Charge

	

26,675

	

$21,500


	

Wastewater
System Development Charge

	

$4,659

	

$4,659


	

Total
Water & Wastewater Tap Fee

	

$31,334

	

$26,159







SFE =
Single Family Equivalent


*
Assumes 0.4 AFY annual demand and 0.56 gpm max day flow
rate.


**
Assumes 0.32 AFY annual demand and 0.44 gpm max day flow
rate.

 



SKY RANCH SERVICE AREA RESIDENTIAL MONTHLY CHARGES


	


Article

	


Fee/Charge

	


Amount


	

12.2b

	

Potable
Water Consumption Charge

	
 


	

0% to
100% of Monthly Budget

	

$4.25
per 1000 gallons


	

101% to
125% of Monthly Budget

	

$6.38
per 1000 gallons


	

126% to
150% of Monthly Budget

	

$8.50
per 1000 gallons


	

Over
150% of Monthly Budget

	

$12.75
per 1000 gallons


	

12.2c

	

Potable
Water Monthly Service Charge

	

$32.27


	

17.2b

	

Sewer
Water Generation Charge

	

$6.34
per 1000 gallons*


	

17.2a

	

Sewer
Monthly Service Charge

	

$10.05







*
Monthly sewer generation assumed to be equal to the average potable
water consumption in the months of December through
February.

 


 


 


 


 




 

69








 







Schedule 7 –



Offsite Infrastructure Escrow Agreement


 


 


 


 


 




 

70








 







OFFSITE INFRASTRUCTURE AGREEMENT


 


(Sky
Ranch – Offsite Infrastructure)


 


THIS
OFFSITE INFRASTRUCTURE AGREEMENT (the "Agreement")
is entered into this  day of _________ 2017 (the
“Effective
Date”) by and among PCY Holdings, LLC, a Colorado
limited liability company ("PCY"), and
the undersigned builders who have executed a counterpart signature
page to this Agreement or who have been added as a party by
execution of a Joinder hereto (each referred to herein as a
"Builder",
and collectively as the "Builders").
PCY and the Builders are sometimes individually referred to as a
“Party”
and collectively referred to as the “Parties.”


 


This
Agreement is made and entered into in contemplation of the
following facts and circumstances:


 

A. PCY is the
developer of certain real property located in Arapahoe County
(“County”),
Colorado, which consists of a portion of the land development known
as Sky Ranch (the "Subdivision")
according to the Preliminary Plat and Preliminary Development Plan
therefore as approved by the County.


 

B. Each Builder and
PCY have entered into a Contract for Purchase and Sale of Real
Estate (Sky Ranch) (the “Purchase
Agreements”), pursuant to which each Builder has
purchased from PCY and is the owner of, and/or is under contract
with PCY to purchase, residential building lots within the
Subdivision. Under the terms of the Purchase Agreements, PCY has
agreed to construct or cause the construction of certain public
infrastructure improvements that are necessary to serve the
Subdivision and fund the cost of such construction, including the
public offsite infrastructure improvements all as more particularly
described in this Agreement.


 

C. The Sky Ranch
Community Authority Board (“CAB”) has been organized by the
Sky Ranch Colorado Metropolitan District Nos. 1 and 5 (the
“Districts”)
pursuant to the laws of the State of Colorado in order to
construct, operate and maintain certain public facilities and
improvements in accordance with the Sky Ranch Community Authority
Board Establishment Agreement (the “CABEA”)
and each of the service plans for the Districts. The CAB will
construct the Drainage System Improvements and the Monaghan Road
Improvements identified on Exhibit A
(the “CAB
Infrastructure”). In order to fund the Cab
Infrastructure, PCY will deposit funds into a segregated
construction account owned and maintained by the CAB to be used by
the CAB to pay for the costs of designing, permitting and
constructing the CAB Infrastructure identified and described on
Exhibit
A.


 

D. Rangeview
Metropolitan District (“Rangeview”
and with the CAB, each is a “Constructing
Entity”) will construct the Water System Improvements,
Wastewater System Improvements and the Wholesale Water and
Irrigation Lines identified on Exhibit A (the
“Rangeview
Infrastructure.” In order to fund the Rangeview
Infrastructure, PCY will deposit funds into a segregated
construction account owned and maintained by Rangeview to be used
by Rangeview to pay for the costs of designing, permitting and
constructing the Rangeview Infrastructure identified and described
on Exhibit
A.


 




 

71








 






 

E. On or before the
Effective Date, PCY and the CAB shall enter into a Service
Agreement for Project Management
Services for Sky Ranch (“CAB Service
Agreement”) pursuant to which PCY shall serve as the
Project Manager (“PM”)
for the CAB for the construction of the CAB Infrastructure and
shall provide the services required to construct and deliver the
CAB Infrastructure, including but not limited to: CAB compliance
and coordination with legal counsel and accountants; planning
design and approvals; project administration; contractor
agreements; construction management and administration; and CAB
acceptance of the CAB Infrastructure. A copy of the CAB Service
Agreement is attached hereto as a part of Exhibit
D.


 

F.  On or before
the Effective Date, PCY and Rangeview shall enter into a Service
Agreement for Project Management
Services (“Rangeview Service
Agreement” and together with CAB Service Agreement,
the “Service
Agreements”) pursuant to which PCY shall serve as the
PM for Rangeview for the construction of the Rangeview
Infrastructure and shall provide the services required to construct
and deliver the Rangeview Infrastructure, including but not limited
to: Rangeview compliance and coordination with legal counsel and
accountants; planning design and approvals; project administration;
contractor agreements; construction management and administration;
and Rangeview acceptance of the Rangeview Infrastructure. A copy of
the Rangeview Service Agreement is attached hereto as a part of
Exhibit
D.


 

G. The Parties enter
this Agreement in order to establish the terms and procedures that
will be utilized in order for funds to be disburse from the
construction accounts to pay for the costs to construct the
Improvements, all as more particularly set forth
herein.


 


NOW,
THEREFORE, in consideration of the mutual promises and covenants
set forth herein and in the Purchase Agreements, and for other good
and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the Parties hereby agree as
follows:


 

1. Incorporation
of Recitals. The recitals set forth above are true and
correct and are incorporated herein in their entirety by this
reference.


 

2. Construction Obligation. The
CAB is constructing the Sky Ranch Infrastructure and Rangeview is
constructing the Rangeview Infrastructure (collectively, the
“Improvements”).
PCY as the PM for both the CAB and Rangeview shall cause the
construction of the Improvements pursuant to Service
Agreements.


 

3. Deposit of Construction
Funds.


 

3.1 The estimated cost
to construct each of the Improvements is set forth on Exhibit A.

 

3.2 Not later than the
Effective Date, PCY shall advance to the CAB for deposit into a
segregated construction account that is owned and maintained by the
CAB at a nationally or regionally recognized FDIC insured financial
institution funds in the amount of _______________________________
Dollars ($_____________.00) (“CAB
Funds”) for the costs of design, testing, engineering
and construction of the CAB Infrastructure. The amount of the CAB
Funds is equal to the total estimated cost to substantially
complete construction of the CAB Infrastructure as set forth on
Exhibit
A. The CAB Funds shall be utilized solely to pay for the
construction of the CAB Infrastructure.

 


 




 

72








 






 

3.3 Not later than the
Effective Date, PCY shall advance to Rangeview for deposit into a
segregated construction account that is owned and maintained by
Rangeview at a nationally or regionally recognized FDIC insured
financial institution funds in the amount of
_______________________________ Dollars ($_____________.00)
(“Rangeview
Funds”) for the costs of design, testing, engineering
and construction of the Rangeview Infrastructure. The amount of the
Rangeview Funds is equal to the total estimated cost to
substantially complete construction of the Rangeview Infrastructure
as set forth on Exhibit A.
The Rangeview Funds shall be utilized solely to pay for the
construction of the Rangeview Infrastructure.

 

3.4 To the extent that
the contracted price to construct the Improvements exceeds the
estimated cost to substantially complete the Improvements, PCY
shall advance additional funds to increase the amount of the CAB
Funds deposited with the CAB, or the Rangeview Funds deposited with
Rangeview, as applicable, by the difference in the estimated versus
the contracted amounts. PCY is solely liable for any cost overruns
incurred in connection with the construction of the applicable
Improvements that exceed the amount of funds advanced by PCY to
either the CAB or Rangeview (a “Cost
Overrun”) and shall promptly notify the Builders of
the amount of the additional funds being deposited. If there is an
increase the construction cost in excess of the amount advanced to
a Constructing Entity, then PCY shall advance good funds to the
applicable Constructing Entity in the amount of the Cost Overrun
for deposit into the Construction Account (as herein after defined)
within five (5) business days after the date upon which PCY learns
that such increase has occurred. If PCY fails to advance the
necessary additional funds to the applicable Constructing Entity to
cover Cost Overruns, each affected Builder shall be entitled to all
remedies available at law or in equity, except incidental,
consequential, or punitive damages. In addition, any Builder or
group of Builders may advance additional funds PCY fails to pay, in
which event PCY shall reimburse the Builder(s) who advanced the
funds within thirty (30) days after receipt of an invoice (or, if
such reimbursement is outstanding as of the date of the Second
Closing, such Builders shall receive a credit in such amount at the
Second Closing). Invoices not paid within thirty (30) days after
receipt shall bear simple interest at the rate of 12% per annum
until paid.

 

4. Account. The CAB Funds and the
Rangeview Funds shall be held in construction accounts (each a
"Construction
Account") that are owned and maintained by the CAB or
Rangeview, as applicable, as provided in Section 3 above. As PM,
PCY shall administer the payment of funds from the Construction
Account in payment of Draw Requests (as hereinafter defined) to pay
the costs to construct the Improvements. All funds deposited into
the Construction Account, together with any interest accrued
thereon, shall be referred to herein as the "Construction
Funds". The Construction Funds in a Construction Account
shall not be commingled with other funds or accounts. PCY shall
keep good and accurate books of the Construction Funds and in
sufficient detail to allow construction costs and expenditures to
be calculated and which books and records shall be made available
to the Builders for review by the Builders upon reasonable prior
written notice.


 

5. Disbursement from the Construction
Account. As PM for each of the Constructing Entities, PCY
shall administer and process the payment of Construction Funds from
each Construction Account to pay contractors and payees identified
in Draw Requests in accordance with the instructions set forth on
Exhibit
B attached hereto and incorporated herein by this reference
(“Instructions”).
If at any time PCY or a Builder becomes aware that Construction
Funds have been disbursed from a Construction Account for purposes
other than the construction of the applicable Improvements, such
Party shall immediately notify the other Parties.


 




 

73








 






 

6. Construction
of Improvements.


 

(a) Construction Schedule. PCY, as
PM for the Constructing Entities, shall use commercially reasonable
efforts cause the Improvements to be Substantially Complete within
the timeframe referenced in the first Sentence of Section 7(a),
below, subject to Force Majeure Delays.


 

(b) Construction Standard. The
Improvements will be completed, and each construction contract
entered into for the construction of any Improvement
(“Work
Contract”) will provide that the applicable
Improvements shall be completed, in a good, workmanlike and
lien-free manner, in accordance with the CDs and specifications
therefor as approved by the applicable approving authorities, and
the applicable laws, codes, regulations and governmental
requirements for the Development and Subdivision (the
“Construction
Standard”). PCY shall post or cause to be posted when
due all sureties or guaranties, if any, that are required by the
Authorities under the Entitlements in connection with the
construction of the Improvements.


 

(c) Progress Reports. PCY shall, no
less frequently than once per calendar month, provide the Builders
with a progress report setting forth the amount of Construction
Funds expended to date, a list of Improvements completed to date,
and an estimate of the status of overall completion of the
Improvements, in such form as PCY deems reasonably
appropriate.


 

(d) Temporary Construction
Easements.


 


(1)                      Each
Builder hereby creates and grants to PCY and each other Builder,
for the use of PCY, the Constructing Entity and each other Builder
(if such other Builder exercises its respective step-in option) and
their respective successors, assigns, employees, agents,
contractors and subcontractors, such temporary non-exclusive
easements and licenses to enter upon the real property owned by
each Builder within the Subdivision (the “Builder Property”) as are
reasonable or necessary to permit PCY, the Constructing Entity or
such other Builder to perform the Improvements work, provided that
neither PCY, the Constructing Entity nor such other Builder in so
doing shall unreasonably impair or interfere with the performance
of any work on the other Builders’ property.

 


(2)                      PCY
hereby creates and grants to each Builder (if it exercises its
Step-In Option), for the use of such Builder and its respective
successors, assigns, employees, agents, contractors and
subcontractors, such temporary non-exclusive easements and licenses
to enter upon the real property owned or controlled by PCY within
the Subdivision (the “PCY
Property”) as are reasonable or necessary to permit
such Builder to cause the completion of the construction of the
Improvements hereunder; provided that such Builder in doing so
shall unreasonably impair or interfere with the performance of any
work on the PCY Property by PCY.

 


(3)                      The
foregoing temporary easements and licenses granted to the Parties
shall automatically terminate and cease to be of any further force
or effect upon the earlier of: (a) the date upon which the entirety
of the Improvements shall be completed; and (b) as to a particular
Lot, the date upon which a Builder (as applicable) has obtained a
certificate of occupancy for the home constructed upon such
Lot.

 


 




 

74








 






 

(e) Warranty Work. Notwithstanding
that either PCY or another Builder has caused the completion of the
Improvements in accordance with the terms of this Agreement, PCY as
PM shall be responsible for performing or causing to be performed
the warranty work required to release any applicable warranty
surety or guaranty with the County or other applicable
Authority.


 

(f) Erosion Control. As a part of
the Improvements hereunder, PCY shall provide or cause to be
provided all erosion control and stormwater management services
required by all Authorities having jurisdiction for the performance
of the Improvements work hereunder, including, without limitation,
obtaining, maintaining, complying with and fulfilling the
obligations under, all required permits, licenses and approvals
from any Authority having jurisdiction in connection therewith
concerning stormwater runoff, sediment or erosion control, storm
drainage, or any other water or sediment discharge pertaining to
the Property (the “Stormwater Permit”),
including any and all requirements, conditions, restrictions or
other terms contained in such Stormwater Permit, such as, but not
limited to, surety requirements, treatment requirements, discharge
limitations and revegetation requirements.


 

(g) Force Majeure Delays. A delay
in or failure to perform any obligations required of PCY (or any
Builder exercising a step-in right) hereunder shall not constitute
a default to the extent such delay or failure is caused by Force
Majeure Delays and all times for performance shall be extended by
the number of days of Force Majeure Delays. "Force Majeure Delays" shall be
limited to acts of God, war, terrorism, fire, flood, earthquake,
hurricane, weather conditions, strike, delay or unavailability of
labor or materials, delay or unavailability of utilities, delays in
obtaining governmental approvals to the extent not caused by the
party seeking approval, moratoria, injunctions, orders or
directives of any court or governmental body, or other actions of
third parties (but not including financial inability) which,
despite the exercise of reasonable diligence, the Party required to
perform is unable to prevent, avoid or remove. Within thirty (30)
days after the cessation of the occurrence of a Force Majeure
Delay, PCY (or Builder, as the case may be) will give notice
thereof specifying the cause of the Force Majeure Delay and the
number of days of the occurrence.


 

(h) Mechanic’s Liens. If
because of any act or omission (or alleged act or omission) of any
Party or its employees, agents, contractors or subcontractors under
this Agreement, any mechanic’s or other lien, charge or order
for the payment of money or other encumbrance shall be filed or
threatened against any of the other Parties hereunder and/or any
portion of its property (whether or not such lien, charge, order or
encumbrance is valid or enforceable as such), such party (the
“Indemnifying
Party”) shall at its own cost and expense, cause the
same to be discharged of record or bonded within thirty (30) days
after the assertion or the filing thereof; and the Indemnifying
Party shall indemnify, defend and save harmless the other parties
(the “Indemnified
Parties”) against and from all costs, liabilities,
suits, penalties, claims and demands, including reasonable
attorneys’ fees, resulting therefrom; provided, however, that
any loss, cost, damage or expense to which the Indemnified Parties
shall be entitled under this Section shall be limited to out of
pocket losses, costs, damages or expenses (including, however any
punitive or consequential losses, costs, damages or expenses or
lost profits actually paid by an indemnified party to a contractor
or subcontractor pursuant to such a mechanic’s lien claim),
but none of the Indemnified Parties shall be entitled to recover
from the other any of its punitive or consequential losses, costs,
damages or expenses or lost profits as a result of any failure by
the Indemnifying Party to have complied with its obligations under
this Section. If the Indemnifying Party fails to comply with the
foregoing provisions, the other Party or Parties shall have the
option of discharging or bonding any such lien, charge, order or
encumbrance, and the Indemnifying Party shall reimburse the other
party or parties for all costs, expenses and other sums of money in
connection therewith with interest at the rate of 10% per annum
thereon promptly upon demand.


 




 

75








 






 

(i) Insurance. From and after the
Effective Date, PCY shall obtain and maintain, at its expense, and
shall cause each contractor constructing any Improvements to obtain
and maintain: (a) workman’s compensation insurance as may be
required pursuant to the provisions of applicable law; and (b)
comprehensive general liability insurance in an amount of at least
$1,000,000 per occurrence and $2,000,000 in the
aggregate


 

(j) Service Agreements. PCY may
only amend or terminate either of the Service Agreements in
accordance with the process set forth in the Service Agreements.
PCY shall deliver to Builders copies of any written default notice
sent by PCY to a Constructing Entity within five (5) business days
after PCY’s transmission thereof to a Constructing Entity,
and shall deliver to Builders copies of any default notice received
by PCY from a Constructing Entity within five (5) business days
after PCY’s receipt thereof.


 

7. Self Help Remedy.


 

(a) In the event that
PCY defaults in the performance of its obligations to cause any
applicable Improvement or Improvements to be Substantially Complete
within 10 months after the date of the occurrence of the initial
closing under a Builder’s Purchase Agreement, after any
applicable notice and cure period, subject to Force Majeure Delays
and any other extension rights granted to PCY by that
Builder’s Purchase Agreement, and PCY thereafter fails to
timely cure such default in accordance with the terms hereof, the
following provisions shall apply. The Builder under whose Builder
Purchase Agreement PCY has defaulted, at its option, shall have the
right, but not the obligation, to step into the rights of PCY as
the PM under the Service Agreements and take control of the
construction of the Improvements as hereinafter provided (the
“Uncompleted
Improvements”) in accordance with the terms of this
Agreement by delivering written notice of such election to PCY and
the other Builders; provided, however, that notwithstanding any
provision in any Purchase Agreement to the contrary, upon the
receipt of such notice, Richmond American Homes of Colorado, Inc.
(if it is then a Builder hereunder and the owner of property in the
Subdivision) may exercise such right (first and ahead of the other
Builders) on behalf of all of the Builders (the “Richmond Step-In
Option”) by delivering written notice of such election
to PCY and the other Builders and, if Richmond fails to do so
within fifteen (15) days after PCY’s uncured default, then
the Builder under whose Builder Purchase Agreement PCY has
defaulted shall have the right to exercise such right (the
“Builder Step-in
Option”). Seller represents and warrants that every
currently existing and future Builder Purchase Agreement with
respect to the acquisition of unfinished lots provides for Richmond
to have the first right to step-in as described in the immediately
preceding sentence, and the provision for such first right to
step-in will not be modified without Richmond’s prior
consent, which consent may be withheld in Richmond’s sole
discretion if Richmond is then a Builder hereunder. If Richmond
does not timely exercise the Richmond Step-in Option, then the
other Builders shall have the right to exercise an option to
step-in and select the Exercising Builder (hereinafter defined) to
act on behalf of all such Builders to complete the Improvements by
giving notice to PCY and the other Builders within fifteen (15)
days following the deadline for Richmond to exercise the Richmond
Step-In Option. In such event, (i) the Builder that exercises such
right, including Richmond if it is a Builder, as applicable (the
"Exercising
Builder") shall succeed to all of the rights and obligations
of PCY under this Agreement with respect to the applicable
Improvement or Improvements from and after the date such right is
exercised, including the right to obtain payment of Draw Requests
for the Construction Account to complete the Uncompleted
Improvements, and PCY shall assign to Exercising Builder all of
PCY's right, title and interest, in and to the applicable Service
Agreement between PCY and the CAB and/or Rangeview for the
applicable Improvement or Improvements, but the Exercising Builder
shall not assume any responsibility for or otherwise have any
liability for any such obligations prior to such date or for any of
the acts or omissions of PCY, and the obligation to pay the costs
of the Improvements, including Cost Overruns, shall remain the sole
responsibility of PCY even if the costs exceed the amounts in the
Construction Account, (ii) PCY shall have no further rights or
obligations under this Agreement after the date such right is
exercised (except as otherwise set forth herein, with PCY in all
events remaining responsible for all costs of the Improvements and
to cooperate and assist if and as needed to help the Exercising
Builder complete the applicable Improvements) and that PCY shall
not be released of any other liability relating to this Agreement
or the Purchase Agreements that may accrue or arise on or before
such date, (iii) to the extent the same are not owned by any third
party, PCY shall assign to Exercising Builder, on an "as is" basis
without any representations or warranties, all of PCY's right,
title and interest if any, in, to and under the construction plans
and specifications for the Improvements, and if same are owned by a
third party PCY shall be obligated and responsible to secure the
rights needed to use same from such third parties or to pay the
costs incurred to replace the same, and (iv) PCY and Builders shall
take all action reasonably required to permit the Exercising
Builder to act as the PM under the applicable Service Agreement to
complete the construction of the Uncompleted Improvements. In such
event, PCY and the Exercising Builder shall give notice to the
applicable Constructing Entity that PCY has assigned the applicable
Service Agreement to the Exercising Builder hereunder and that the
Exercising Builder has assumed the position of PM under the
Applicable Service Agreement and PCY shall take all action
necessary to permit the Exercising Builder act as the PM under the
Service Agreement, including the administration and processing of
Draw Requests from the Construction Account for the payment of
construction costs of the Uncompleted Improvements as identified in
Draw Requests in accordance with the terms hereof. The Exercising
Builder shall be entitled to a construction coordinator’s fee
in an amount equal to 5% of the costs which are the subject of each
Draw Request and which PCY shall pay within 30 days after the
Exercising Builder’s delivery of an invoice therefor to
PCY.


 




 

76








 






 

(b) Effective as of the
date upon which an Exercising Builder exercises its Step-In Option,
PCY shall be deemed to have assigned to the Exercising Builder: (A)
any construction contracts entered into by PCY on its own behalf
for the completion of any Improvements (“Work Contracts”), if any, to the
extent that they pertain to such Uncompleted Improvements, (B) all
of PCY’s agreements with any utility providers to the extent
that they pertain to such Uncompleted Improvements, and (C) The
Service Agreement between PCY and Rangeview and/or the CAB, as
applicable. PCY will cause the Service Agreements to be assignable
to a Builder. The Exercising Builder shall also have the right to
take such actions as may reasonably be necessary or desirable to
obtain the County’s, or any other applicable Authority having
jurisdiction, initial acceptance of any such Uncompleted
Improvements that are completed by the Exercising Builder and which
the County, or such other Authority, is required to accept, subject
to the applicable developer’s warranty. Additionally, PCY
will execute such additional reasonable certifications, documents
or agreements as may be required to confirm the foregoing
assignments to the Exercising Builder and to enable the Exercising
Builder to obtain such agreement by the County, or any other such
applicable Authority having jurisdiction, to initially accept such
Uncompleted Improvements so completed by the Exercising Builder;
provided, however, the Exercising Builder shall have no obligation
to replace any surety previously delivered by PCY to the County or
other applicable Authority having jurisdiction for the Uncompleted
Improvements.


 

(c) In the event the
Exercising Builder takes over construction coordination of
Improvements as PM under a Service Agreement, Exercising
Builder’s assumption of the construction coordination of the
Improvements is done only as an accommodation to the Parties and
that, except as expressly set forth in this Agreement, Exercising
Builder shall have no responsibility, liability or obligation with
respect to (and the Parties hereby covenant not to sue Exercising
Builder for, and hereby release the Exercising Builder from, all
liability and claims relating to or arising from) the design,
engineering, construction or completion of the Improvements, any
damage, loss or injury to any of the parties or otherwise related
to any action or inaction of Exercising Builder in connection with
this Agreement, or any defect in the materials or workmanship
pertaining to the Improvements, except for any “Exercising
Builder Covered Liability,” as hereinafter defined.
“Exercising Builder Covered Liability” means the
following matters for which Exercising Builder shall be liable to
the other Parties in connection with its performance as Exercising
Builder hereunder: (a) any damage, loss or injury arising from the
willful misconduct, bad faith, recklessness or illegal acts of the
Exercising Builder in performing or failing to perform hereunder,
or (b) damage, loss or injury arising from the fraudulent conduct
of Exercising Builder; provided, however, that any damages to which
the other Parties shall be entitled to recover for any Exercising
Builder Covered Liability shall be limited to out-of-pocket losses,
costs, damages or expenses, and the other Parties shall not be
entitled to recover from the Exercising Builder any punitive or
consequential losses, costs, damages or expenses or lost profits as
a result of, or in connection with, any Exercising Builder Covered
Liability. Exercising Builder makes no representation or warranty
with respect to the Improvements, and shall have no liability for
any defect in the materials or workmanship pertaining thereto. The
Parties hereby agree to look solely to the contractors engaged to
construct and complete the Improvements for any contractual
violation, indemnity, warranty or guarantee relating to the
Improvements. Upon completion of the Improvements, Exercising
Builder shall assign to the Parties (if any, and to the extent
assignable and without any representation or warranty whatsoever),
on a non-exclusive basis, any contractual rights received by
Exercising Builder from the contractors that construct or complete
any portion of the Improvements, including, without limitation, all
rights related to any indemnities, guaranties and/or warranties
received from such contractors.


 




 

77








 






 

8. Default
and Termination.


 

(a) Default. An “Event of
Default” by a Party shall be deemed to have occurred
hereunder if such Party shall materially breach or materially fail
to perform, observe or meet any material covenant or condition made
in this Agreement and such breach or failure shall not be cured
within 30 days after delivery of notice to the defaulting party
from the non-defaulting party or, in the event such breach or
failure cannot be cured within 30 days, if the defaulting party
shall not have commenced, within said period, to cure such breach
or default and be diligently pursuing such cure unto
completion.


 

(b) Remedies. Upon any Event of
Default by any Party hereunder, the other Parties shall, except as
may otherwise expressly be provided herein, have all rights and
remedies as are expressly provided herein (including, without
limitation, and as may be applicable, the right to exercise its
respective Step-In Option in accordance with, and subject to the
limitations provided in, Section 7), as the case may
be.


 

9. Termination. This Agreement
shall terminate upon the date that is one hundred fifty (150)
days following the later to occur of (i) payment of the final
Draw Request, and (ii) the lien-free completion of the
Improvements and the initial construction acceptance of the
Improvements by the Authority that will own such Improvements or
component thereof. Notwithstanding the foregoing, PCY’s
obligations with respect to warranty work under Section 6(e) above,
shall survive termination of this Agreement.


 

10. Applicable Law. This Agreement
shall be governed in accordance with the laws of the state of
Colorado, and venue for any court action hereunder shall lie
exclusively in a court of competent jurisdiction in Arapahoe
County, Colorado.


 

11. Headings; Use of Certain Words.
The headings used herein are for convenience only and are not to be
used in interpreting this Agreement. The words "hereof", "herein",
"hereto", "hereunder" or "herewith" as used in this Agreement shall
refer to this Agreement as a whole and not merely to the sentence
or paragraph in which such word is used.


 

12. Notices. All notices required
to be given hereunder shall be in writing and shall be addressed as
follows, or as any party may subsequently designate by written
notice to the others. All notices shall be delivered by facsimile
or pdf transmittal, recognized overnight delivery service, or
hand-delivery and shall be deemed effective upon: (i) the
successful transmission of a facsimile or pdf transmittal, provided
that a conforming copy is concurrently deposited for delivery by
first class U.S. mail, postage prepaid, or by hand delivery;
(ii) the first business day after deposit with a recognized
overnight delivery service; or (iii) upon receipt by
hand-delivery:


 


To
PCY:                
PCY Holdings, LLC


Attention:
Mark Harding


34501
E. Quincy Ave.


Bldg.
34, Box 10


Watkins,
Colorado 80137


Telephone:
(303) 292-3456


Facsimile:
(303) 292-3475


E-mail:
mharding@purecyclewater.com


 




 

78








 






 


 


with a
copy
to:                    
Fox Rothschild LLP


1225
17th
Street, Suite 2200


Denver,
CO 80202


Attention: Rick
Rubin, Esq.


Telephone: (303)
292-1200


Email:
rrubin@foxrothschild.com


 


To
Builders:                                At
the notice address set forth on their respective signature
pages


 


Each of
the above-listed addressees may change its address and number for
notice purposes under this Section by delivering to the
other addressees a written notice of change of address and number,
in a manner specified in this Section. However, no such
change of address or number shall be effective against another
addressee until written notice of such change is actually received
by such addressee.


 

13. Successors and Assigns. The
terms of this Agreement shall inure to the benefit of and bind the
parties hereto and their respective successors and permitted
assigns. Except as expressly contemplated herein, no party may
assign its rights or obligations hereunder without the prior
written consent of the other parties hereto.


 

14. Potential Additional Parties.
The parties acknowledge and agree that, with regard to any
third-parties (collectively, the "Additional Builders") with whom
PCY is under contract to sell any residential building lots, then,
at PCY's option, each of such Additional Builders may be added to
and become a party under this Agreement at any time provided
written notice of such Additional Builders is given to all Builders
at the time of such Joinder. In such event, each such Additional
Builder shall be deemed to be a "Builder" as such term is defined
herein, shall have all rights of a "Builder" under this Agreement.
Additional Builders will be added to this Agreement by execution of
a Joinder that is substantially in the form set forth as
Exhibit C attached
hereto.


 

15. No Waiver of Rights / Remedies
Cumulative. No delay or failure on the part of any party to
exercise any right, power or privilege under this Agreement shall
operate as a waiver thereof, and no single or partial exercise of
any right, power or privilege shall preclude any other or further
exercise thereof or the exercise of any other power or right, or be
deemed to establish a custom or course of dealing or performance
between the parties hereto. The rights and remedies herein provided
are cumulative and not exclusive of any rights or remedies provided
at law or in equity.


 

16. Amendment. This Agreement may
not be amended except by a written agreement executed by all
Parties to this Agreement.


 

17. Severability. If any term or
provision of this Agreement or the application thereof to any
person or circumstance shall to any extent be invalid or
unenforceable, the remainder of this Agreement, or the application
of such term or provision to persons or circumstances other than
those to which it is held invalid or unenforceable, shall not be
affected thereby, and each term and provision of this Agreement
shall be valid and enforceable to the fullest extent permitted by
law.


 




 

79








 






 


 

18. Attorneys' Fees.
Notwithstanding anything to the contrary contained herein, any
party prevailing in any litigation brought pursuant to or arising
under this Agreement shall recover its costs of court, fees and
reasonable attorneys' fees from the non-prevailing party as
determined by any court of competent jurisdiction.


 

19. Time of Essence. Time is of the
essence in the observance and performance of the terms and
obligations of this Agreement.


 

20. No Partnership. The provisions
of this Agreement are not intended to create, nor shall they in any
way be interpreted as creating, a joint venture, partnership or any
other similar relationship between the parties.


 

21. No Recording. Neither this
Agreement nor any memorandum hereof shall be recorded in the real
property records of Arapahoe County, State of
Colorado.


 

22. Counterparts. This Agreement
may be executed in several counterparts, each of which shall be
deemed an original, and all of such counterparts together shall
constitute one and the same instrument. Receipt of an executed
signature page to this Agreement by facsimile or other electronic
transmission shall constitute effective delivery
thereof.


 



[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]


 




 

80








 






IN
WITNESS WHEREOF, this Agreement has been duly executed as of the
day and year first above written.



PCY:


 



PCY HOLDINGS LLC,



a Colorado limited liability company


 



By:            

Pure
Cycle Corporation, a Colorado corporation






Its
sole member


 



By: ____________________________________



Name: _________________________________



Title: __________________________________


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 




 

81








 







BUILDER:


 


RICHMOND
AMERICAN HOMES OF COLORADO, INC, a Delaware
corporation


 


 


By:
____________________________________


      Linda
Purdy, Vice President


 


 


 


Address
for Notice:


 


Richmond American
Homes of Colorado, Inc.


Attention: Linda
Purdy, Vice President


4350
South Monaco Street


Denver,
Colorado 80237


E-Mail:
Linda.Purdy@mdch.com


Telecopier No.:
(720) 977-4707


 


with a
copy in each case to:


 


M.D.C.
Holdings, Inc.


Attention: Drew
Rippey


4350
South Monaco Street


Denver,
Colorado 80237


E-Mail:
Drew.Rippey@mdch.com


Telecopier No.:
(720) 482-8558


 


and


 


M.D.C.
Holdings, Inc.


Attention: Linda
Skultety


4350
South Monaco Street


Denver,
Colorado 80237


E-Mail:
Linda.Skultety@mdch.com


Telecopier No.:
(303) 488-4954


 




 

82








 







BUILDER:


 


Taylor
Morrison of Colorado, Inc.,


a Colorado corporation


 


By:
____________________________________


Name:
_________________________________


Title:
__________________________________


 


Address
for Notice:


 


Taylor
Morrison of Colorado, Inc.


1420
West Canal Court, Suite 170


Littleton,
Colorado 80120


Attention:
Phillip Cross


Telephone:
(303) 325-2426


E-mail: pcross@taylormorrison.com


 


With a copy
to:                   
Brier, Irish, Hubbard & Erhart
P.L.C.


2400
East Arizona Biltmore Circle, Suite 1300


Phoenix,
AZ 85016


Attn:
Jeff Hubbard


Telephone:
(602) 522-0160


Facsimile:
(602) 522-3945


E-mail: jhubbard@bihlaw.com


 


       
           
           
            With copy
to:                                

 


Tony Meier at same address




E-mail: tmeier@bihlaw.com


 


 




 

83








 







EXHIBIT A



OFF-SITE IMPROVEMENTS


 


 


 


 


 


 




 

84








 







EXHIBIT B



 Instructions


 



1.            

Draw Requests from the
Construction Account. PCY shall
process and administer Draw Requests for the payment of
construction costs in accordance with the terms of this
Agreement and these Instructions.






 

(a) On a periodic
basis, PCY shall submit to the Builders a copy of the request that
is to be submitted by PCY to the Constructing Entity for payment of
Construction Funds from the Construction Account to pay for:
(i) the design, engineering, permitting and all necessary
governmental approvals to construct the Improvements; and
(ii) the costs to construct the Improvements including, but
not limited to, the costs for any related landscaping, signage,
fencing and fixtures associated with the Improvements (each a
"Draw Request").
Each Draw Request shall identify whether it pertains to CAB
Infrastructure or Rangeview Infrastructure and the amount of the
requested payment, and shall be certified to be true and correct by
PCY and accompanied by: (A) a description of the basis for
disbursement (i.e., an application for progress payments based on
the status of completion of the applicable Improvements, or that
substantial completion or final acceptance, as applicable, has been
obtained); (B) conditional lien waivers (conditioned only upon
payment of the amount due) from all contractors covered thereunder
for the amounts to be paid pursuant to the Draw Request, and to the
extent not previously provided unconditional lien waivers from
contractors paid from prior Draw Requests; (C) PCY’s estimate
of the percentage of completion of the Improvements; and (D)
PCY’s estimate of the cost to complete the
Improvements.


 

(b)   If a
Builder objects to all or any portion of the Draw Request, such
Builder shall deliver written notice of such objection (a
“Objection Notice”) to PCY and the other Builders on or
before the fifth (5th) business day after PCY delivers the Draw
Request to the Builders. A Builder may only object to a Draw
Request in the event that (i) the documents or statements required
by Section (a) above in conjunction with a Draw Request were not
properly delivered, are incomplete or contain material errors, (ii)
the remaining cost to complete the Improvements after payment of
the Draw Request will exceed the amount of the Construction Funds
in the Construction Account which objection will be deemed cured
upon the deposit by PCY of additional Construction Funds into the
Construction Account to cover the excess amount, or (iii) the work
is not work that is to be completed pursuant to this Agreement. If
a Builder delivers an Objection Notice, the Builders and PCY shall
meet within three (3) business days after receipt of the Objection
Notice to review and discuss any such Objection Notice. If the
parties are unable to resolve any Objection Notice within five (5)
business days of such meeting, the matter shall be resolved
pursuant to the dispute resolution provisions set forth in Section
5 of these Instructions. Any Objection Notice shall specifically
identify the amount of the requested payment to which the objection
applies and the basis for such objection. No Objection Notice shall
be valid if it does not identify specific obligations. If a Builder
fails to deliver an Objection Notice within five (5) business days
after PCY delivers the Draw Request to the Builders, such Builder
shall be deemed to have waived any objection to such Draw
Request.


 




 

85








 






 


 

(c) PCY shall submit
the Draw Request to the applicable Constructing Entity for payment
as follows: (i) if no Builder has delivered a timely Objection
Notice within five (5) business days after PCY delivers the Draw
Request to the Builders, the Draw Request shall be deemed approved
and PCY shall submit the Draw Request to the applicable
Constructing Entity for payment in full of the amount identified in
such Draw Request out of the Construction Account to the
contractors and payees identified in such Draw Request; or
(ii) if a Builder has delivered a timely Objection Notice, the
portion of the payment identified in such Draw Request to which no
Builder has objected in an applicable Objection Notice shall be
deemed approved and PCY shall submit such portion to the applicable
Constructing Entity for payment out of the Construction Account to
the contractors and payees identified in such Draw Request; and
(iii) if a Builder has delivered a timely Objection Notice, the
amount of the portion of the payment identified in such Draw
Request to which a Builder has objected in an applicable Objection
Notice but which has been resolved pursuant to Section 5 of these
Instructions below, or if the Builder otherwise withdraws its
objection by notice to PCY and the other Builders, shall be paid by
the applicable Constructing Entity out of the Construction Account
to the contractors and payees identified in such Draw
Request.


 


(d)           Within
ten (10) days after PCY gives the Builders a Notice of Substantial
Completion for any Improvement (a “Completion Notice”), a
representative of PCY and each Builder shall inspect such
Improvements, and shall jointly prepare and agree upon a
“punch-list” of items for the applicable Improvement
which is uncompleted or which require repair or other corrective
work (the “Punch List
Items”). PCY shall, with reasonable diligence, use
commercially reasonable efforts as PM to cause the completion of
the Punch List Items.


 


(e)           On
or before fifteen (15) days after payment of the final Draw
Request, PCY shall deliver to each Builder copies of full and final
unconditional lien waivers executed by all contractors and
suppliers for all labor and materials paid for pursuant to the
final Draw Request.


 


3.         Limitation
of Liability. PCY shall not be liable for the loss or
impairment of the Construction Funds due to failure or insolvency
of any financial institution which may be the depository of the
Construction Funds.

 


4.         Expenses.
PCY shall pay the fees, charges and expenses of PCY, including, but
not limited to, reasonable attorneys' fees, expenses and other
out-of-pocket costs as may be incurred by PCY to administer and
process Draw Requests under this Agreement.

 


 




 

86








 






 

 


5. Expedited
Dispute Resolution.

 


(a) Disputes Related to
Draw Requests and Punchlist Items. Notwithstanding anything to the contrary herein,
disputes related to any Punch List Item or matter, a Draw Request
or an Objection Notice that the Parties are unable to resolve
(“Expedited
Disputes”) shall be
resolved by CVL Engineers – Melinda Lundquist or if
such party is not available or unwilling to serve as arbitrator,
another reputable third party licensed engineer selected by PCY and
approved by Builders (“Informal
Arbitrator”). Within five (5) business days after
notice to all Parties that an Expedited Dispute exists, each of the
Parties involved in the Expedited Dispute shall deliver to the
Informal Arbitrator a written statement of how such Party believes
the Expedited Dispute should be resolved, together with reasonable
supporting documentation of such position (“Resolution
Notice”). Within ten (10) business days after receipt
of Resolution Notices from both such Parties, the Informal
Arbitrator shall approve one (1) of the Parties’ Resolution
Notice and shall deliver written notice of such approval to each
Party and to Disburser. The decision of the Informal Arbitrator
shall be binding on all Parties with respect to the applicable
Expedited Dispute. All Parties shall timely cooperate with the
Informal Arbitrator in rendering his or her decision. The Party or
Parties involved in the Expedited Dispute that are not the
prevailing party in the resolution of the Expedited Dispute shall
promptly pay the Informal Arbitrator’s fee, and the
prevailing party’s other fees and costs of any such expedited
dispute resolution process and reasonable attorney’s fees.
The term “prevailing party” means the Party who
successfully obtains substantially all of the relief sought by such
Party or is successful in denying substantially all of the relief
sought by the other Party. The Parties acknowledge that there is a
benefit to the Parties in having work done as expeditiously as
possible and that there is a need for a streamlined method of
making decisions described in this Section so that work is not
delayed. A Party and shall not be entitled to recover from any
other Party exemplary, punitive, special, indirect, consequential
or any other damages other than actual damages (unless the Informal
Arbitrator finds intentional abuse or frustration of the dispute
resolution process) in connection with an Expedited
Dispute.

 


(b) Standards
of Conduct. The Parties agree that with respect to all
aspects of the expedited dispute resolution process contained
herein they will conduct themselves in a manner intended to assure
the integrity and fairness of that process. To that end, if an
Expedited Dispute is submitted to expedited dispute resolution
process, the Parties agree that they will not contact or
communicate with the Informal Arbitrator who was appointed with
respect to any Expedited Dispute either ex parte or outside of the contacts and
communications contemplated by these Instruction, and the Parties
further agree that they will cooperate in good faith in the
production of evidence in a prompt and efficient manner to permit
the review and evaluation thereof by the other
Parties.

 


 




 

87








 







EXHIBIT C



FORM OF JOINDER


 



JOINDER BY BUILDER


THIS
JOINDER TO CONSTRUCTION DISBURSEMENT AGREEMENT (this
“Joinder”), dated as of _________________, 201___ (the
“Joinder Date”), is made by
_____________________________________________________
(“Purchaser”), for the benefit of PCY Holdings, LLC, a
Colorado limited liability company (“PCY”) and each
other Builder that is a party to that Offsite Infrastructure
Agreement dated _______________, 201__.

 


WHEREAS, PCY, as
seller, and Purchaser, as purchaser, are parties to that certain
Contract for Purchase and Sale of Real Estate (Sky Ranch) dated
___________, 201__ (as amended and assigned from time-to-time, the
“Purchase Agreement”), with respect to the sale of
certain residential building lots located within the Sky Ranch
Development in Arapahoe County, Colorado, and

 


WHEREAS, PCY has
agreed to construct certain infrastructure improvements that are
necessary to serve the lots identified under the Purchase Agreement
and fund the cost of such construction by establishing a
construction disbursement agreement. PCY and Purchaser desire that
Purchaser become a party to the Offsite Infrastructure
Agreement.

 


NOW,
THEREFORE, in consideration of the foregoing premises and for other
good and valuable consideration, PCY and Purchaser hereby agree as
follows:

 



1.            

Any capitalized
terms not defined in this Joinder shall have the meanings ascribed
thereto in the Offsite Infrastructure Agreement, which is hereby
incorporated by reference.





 



2.            

By execution of
this Joinder, Purchaser becomes a party to the Offsite
Infrastructure Agreement for all purposes and shall be entitled to
exercise all of the rights of a Builder thereunder, subject to the
following limitations _______________________________.





 



3.            

This Joinder shall
inure to the benefit of the Builders and their successors and
assigns under the Construction Disbursement Agreement.





 


IN
WITNESS WHEREOF, Purchase has executed this Joinder as of the
Joinder Date.

 


___________________________________,


a
__________________________________


 


 



By:           






 



Name:                      






 



Title:                      






 


 




 

88








 







EXHIBIT D



SERVICE AGREEMENTS


 


 




 

89








 







Schedule 8 - Homebuyer Disclosure


 



Provisions to include in Homebuyer Disclosure:

 



Special District Disclosure. In accordance with the
provisions of C.R.S. §38-35.7-101(1), Seller provides the
following disclosure to Purchaser: SPECIAL
TAXING DISTRICTS MAY BE SUBJECT TO GENERAL OBLIGATION INDEBTEDNESS
THAT IS PAID BY REVENUES PRODUCED FROM ANNUAL TAX LEVIES ON THE
TAXABLE PROPERTY WITHIN SUCH DISTRICTS. PROPERTY OWNERS IN SUCH
DISTRICTS MAY BE PLACED AT RISK FOR INCREASED MILL LEVIES AND TAX
TO SUPPORT THE SERVICING OF SUCH DEBT WHERE CIRCUMSTANCES ARISE
RESULTING IN THE INABILITY OF SUCH A DISTRICT TO DISCHARGE SUCH
INDEBTEDNESS WITHOUT SUCH AN INCREASE IN MILL LEVIES. PURCHASERS
SHOULD INVESTIGATE THE SPECIAL TAXING DISTRICTS IN WHICH THE
PROPERTY IS LOCATED BY CONTACTING THE COUNTY TREASURER, BY
REVIEWING THE CERTIFICATE OF TAXES DUE FOR THE PROPERTY, AND BY
OBTAINING FURTHER INFORMATION FROM THE BOARD OF COUNTY
COMMISSIONERS, THE COUNTY CLERK AND RECORDER, OR THE COUNTY
ASSESSOR.

 



Source of Water Disclosure. In accordance with the
provisions of C.R.S. §38-35.7-104, Seller provides the
following disclosure to Purchaser:

 


THE
SOURCE OF POTABLE WATER FOR THIS REAL ESTATE IS:

 

 


A
WATER PROVIDER, WHICH CAN BE CONTACTED AS FOLLOWS:

 

 



NAME:                                 

Rangeview
Metropolitan District





 



ADDRESS:                                            

c/o
Special District Management Services, Inc.





 


141
Union Blvd., Suite 150

 


Lakewood,
Colorado 80228

 



WEB
SITE:                                            

www.rangviewmetro.org





 



TELEPHONE:                                            

303-987-0835





 



SOME WATER PROVIDERS RELY, TO VARYING DEGREES, ON NONRENEWABLE
GROUND WATER. YOU MAY WISH TO CONTACT YOUR PROVIDER TO DETERMINE
THE LONG-TERM SUFFICIENCY OF THE PROVIDER’S WATER
SUPPLIES.

 



Oil, Gas, Water and Mineral Disclosure. THE SURFACE ESTATE
OF THE PROPERTY MAY BE OWNED SEPARATELY FROM THE UNDERLYING MINERAL
ESTATE, AND TRANSFER OF THE SURFACE ESTATE MAY NOT NECESSARILY
INCLUDE TRANSFER OF THE MINERAL ESTATE OR WATER
RIGHTS.

 


 




 

90








 






 


THIRD
PARTIES MAY OWN OR LEASE INTERESTS IN OIL, GAS, OTHER MINERALS,
GEOTHERMAL ENERGY OR WATER ON OR UNDER THE SURFACE OF THE PROPERTY,
WHICH INTERESTS MAY GIVE THEM RIGHTS TO ENTER AND USE THE SURFACE
OF THE PROPERTY TO ACCESS THE MINERAL ESTATE, OIL, GAS OR
WATER.

 


SURFACE
USE AGREEMENT. THE USE OF THE SURFACE ESTATE OF THE PROPERTY TO
ACCESS THE OIL, GAS OR MINERALS MAY BE GOVERNED BY A SURFACE USE
AGREEMENT, A MEMORANDUM OR OTHER NOTICE OF WHICH MAY BE RECORDED
WITH THE COUNTY CLERK AND RECORDER.

 


OIL AND
GAS ACTIVITY. OIL AND GAS ACTIVITY THAT MAY OCCUR ON OR ADJACENT TO
THE PROPERTY MAY INCLUDE, BUT IS NOT LIMITED TO, SURVEYING,
DRILLING, WELL COMPLETION OPERATIONS, STORAGE, OIL AND GAS, OR
PRODUCTION FACILITIES, PRODUCING WELLS, REWORKING OF CURRENT WELLS,
AND GAS GATHERING AND PROCESSING FACILITIES.

 


ADDITIONAL
INFORMATION. PURCHASER IS ENCOURAGED TO SEEK ADDITIONAL INFORMATION
REGARDING OIL AND GAS ACTIVITY ON OR ADJACENT TO THE PROPERTY,
INCLUDING DRILLING PERMIT APPLICATIONS. THIS INFORMATION MAY BE
AVAILABLE FROM THE COLORADO OIL AND GAS CONSERVATION
COMMISSION.

 



Radon. The U.S. Environmental
Protection Agency, the U.S. Department of Health and Human
Services, and the U.S. Public Health Service have expressed concern
over the presence of radon gas in homes. Prolonged exposure to high
levels of indoor radon or its progeny may affect the health of
residents. Although such conditions may exist at the Community,
Seller has made no investigation to determine whether radon gas is
or will be present in the home or affecting the premises, and the
Community makes no representation or warranty as to (a) the
presence or lack of radon or hazardous environmental conditions nor
(b) the effect of radon or any such condition on the Community.
Seller recommends that the Buyer, at his/her sole expense, conduct
his/her own investigation and consult with such experts as the
Purchaser deems appropriate in order to determine the level of
radon gas in the home. By signing below Purchaser acknowledges that
he or she has read the foregoing Disclosure Statement, and hereby
releases Seller from any and all liability with respect to the
above matters.

 



Soils Report. The soils within
the State of Colorado are variable, and include both expansive
soils/bedrock and compressible soils which may result in shifting
or other movement of basement floors or foundations, or otherwise
result in cracking of concrete floors, slabs, patios, the
foundation, or other components of a home. In some instances, soil
movements can result in more damage to the structure or other parts
of the improvements.

 


The
suitability of the soil of the lots contained within the Community
was tested by __________. As is common in the State of Colorado,
the soil conditions in the Community include variable bedrock and
soil conditions, including [expansive soils/bedrock and
compressible soils]. Therefore, the soils in the Community can
heave or settle, and cause cracking in foundations, slabs, walks,
drives, etc. All lots contain filled ground, which depth varies
from lot to lot. The fill soils placed during site grading were
compacted and tests of the degree of compaction were performed
under the supervision of a licensed Professional engineer. The
tests indicated this fill was compacted sufficiently to support the
houses.

 


 




 

91








 






 


 


The
findings are contained in the report entitled [Title of Soils
Report] dated _________, 20__ (the “Soils Report”).
Purchaser has been provided a summary report of the Soils Report
(the “Summary Soils Report”), in addition to a copy of
the Colorado Geologic Survey Special Publication 43: A Guide To
Swelling Soils For Colorado Homebuyers and Homeowners which details
the problems associated with expansive soils and the building
methods to address problems associated with construction on such
soils and suggestions for care and maintenance as required by
Colorado Revised Statutes § 6-6.5-101, or any subsequent or
additional law hereafter adopted. It is very important that
Purchasers read and understand the summary soils report and Special
Publication 43, and understand and accept the care and maintenance
responsibilities that Purchaser must assume. [Purchaser should also
review the soils addendum of their Purchase Agreement.] Purchasers
are encouraged to review a copy of the Soils Report which is
available for review in the Sales Office. If you do not understand
this information, you should contact a soils engineer of your
choice to help interpret and explain the conditions on your lot,
and/or legal counsel. For further information concerning soil
conditions, you may also contact ________________ for information
regarding the Soils Report.

 



Protective Covenants Disclosure. THE PROPERTY IS, OR WILL BE
PRIOR TO CLOSING, SUBJECT TO PROTECTIVE COVENANTS THAT ARE
ADMINISTERED AND ENFORCED BY THE SKY RANCH METROPOLITAN DISTRICT
NO. 5. THE PROTECTIVE COVENANTS MAY PROHIBIT THE OWNER FROM MAKING
CHANGES TO THE PROPERTY WITHOUT AN ARCHITECTURAL REVIEW BY THE
DISTRICT AND THE APPROVAL OF THE DISTRICT. PURCHASERS OF PROPERTY
WITHIN THE SKY RANCH DEVELOPMENT SHOULD REVIEW AND CAREFULLY READ
THE PROTECTIVE COVENANTS.

 




 

92








 


 


 


 


 







Schedule 9 - Amenity Development Agreement And Escrow
Instructions




 

93








 






 

 


DRAFT
10/30/17

 

 



AMENITY DEVELOPMENT AGREEMENT

 



AND ESCROW INSTRUCTIONS

 

 


 

 



Sky Ranch


 


THIS
AMENITY DEVELOPMENT AGREEMENT (this “Agreement”)
is made as of the ___ day of _________, 20____ (the
“Effective
Date”), by and between PCY Holdings, LLC, a Colorado
limited liability company (“Developer”),
and Richmond American Homes of Colorado, Inc., a Delaware
corporation (“Richmond”),
and Taylor Morrison of Colorado, Inc., a Colorado corporation
(“Taylor
Morrison”) and any other purchaser
(“Additional
Builder”) of any of the Builder Lots shown on the
Concept Plan (as defined below) that executes a joinder to this
Agreement and acquires the rights, liabilities and obligations
hereunder with respect to such Builder Lots (collectively the
“Builders”
and each a “Builder,”).
Developer and Builders are sometimes individually referred to as a
“Party”
and collectively referred to as the “Parties.”
Land Title Guarantee Company, as Escrow Agent, executes this
Agreement to acknowledge its agreement to act as the escrow agent
in accordance with the Section 5 and the instructions set forth on
Attachment 1
attached hereto.


 



RECITALS

 



A.           

Developer owns
certain real property located in Arapahoe County (the
“County”),
Colorado which Developer is developing as part of the Sky Ranch
master planned residential community (“Development”).
The Development is being subdivided in several subdivision filings
and developed in phases.





 



B.           

Each Builder has
entered into a separate Contract for Purchase and Sale of Real
Estate with the Developer (each a “Purchase
Agreement” and collectively the “Purchase
Agreements”), under which each Builder is acquiring
from Developer a portion of the Development consisting of single
family residential building lots (collectively, the
“Builder
Lots”). The approximate number and location of the
Builder Lots to be acquired by each Builder under the terms of the
Purchase Agreements are generally depicted on the attached as
Exhibit
A (“Concept
Plan”).





 



C.           

Pursuant to the
Purchase Agreements, Developer and the Builders have agreed to
construct or cause to be constructed certain park improvements and
amenities within the three park areas designated on the Concept
Plan (the “Parks”).
The improvements to be installed and constructed within the Parks
(the “Improvements”)
will be identified and described as provided in this Agreement. At
such time as the plans and specifications have been approved for
the Improvements by the County or other applicable governmental
authority, the Improvements and the applicable Plans will be set
forth on Exhibit B to
be attached hereto by amendment to this Agreement executed by the
Parties.





 


 




 

94








 






 

 



D.           

The Parties now
desire to enter into this Agreement in order to set forth the terms
and conditions under which the Improvements will be constructed and
paid for by the Parties, together with such other matters as are
set forth hereinafter.





 



AGREEMENT


 


NOW
THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Developer and
Builders agree as follows:


 

1. Incorporation of Recitals. The
Parties hereby acknowledge and agree to the Recitals set forth
above, which are incorporated herein by this
reference.

 

2. Responsibilities of Developer and
Builders.

 

2.1 Generally. Developer shall
construct, or cause to be constructed, the Improvements in the
manner set forth hereinafter. Developer shall coordinate,
administer and oversee (a) the preparation and filing of all
applications, filings, submittals, plans and specifications,
budgets, timetables and other documents pertaining to construction
and installation of the Improvements, and (b) the construction and
installation of the Improvements. Developer will engage or cause to
be engaged consultants, contractors and subcontractors who will be
responsible for the design and construction of the Improvements and
suppliers who will be responsible for supplying labor, materials,
equipment, services and other work in connection with the
construction of the Improvements (“Service
Provider(s)”), pursuant to the Contracts (as
hereinafter defined).

 

2.2 Comply with Legal Requirements.
Developer will comply with all terms and conditions of applicable
law in performing its obligations under this Agreement. Developer
will provide to each Builder copies of all notices filed by the
Developer with the County, and all other applicable governmental or
quasi-governmental entities or agencies (the “Approving
Authorities”) related to the Improvements and shall,
within ten (10) business days of receipt thereof, provide notice to
each Builder (together with copies of all notices received by
Developer) of any notice received by Developer alleging any failure
to comply with any applicable laws, ordinances, rules, regulations,
or lawful orders of public authorities bearing on the construction
of the Improvements.

 

2.3 Bonds and Assurances.
Developer, as part of the Costs, shall provide to all applicable
Approving Authorities any bonds, assurance agreements, or other
financial assurances if any are required with respect to the
construction of the Improvements. Developer shall, as part of the
Costs, provide to all Approving Authorities all warranties, bonds
and other financial assurances required to obtain permits for, and
the preliminary and final acceptance and approval of, the
Improvements. Builder shall take all commercially reasonable
actions and execute all documents reasonably requested by Developer
in its efforts to obtain releases of all such warranties, bonds,
and other financial assurances upon final acceptance of the
Improvements by the Approving Authorities.

 

2.4 Taxes, Fees and Permits.
Developer or the Service Providers shall pay all applicable sales,
use, and other similar taxes pertaining to the construction of the
Improvements, and shall secure and pay for all approvals,
easements, assessments, charges, permits and governmental fees,
licenses and inspections necessary for proper construction and
completion of the Improvements, except as provided otherwise in
this Agreement. Developer and the Service Providers shall not defer
the payment of any use taxes pertaining to the Improvements except
as may be authorized under law or agreement with the applicable
taxing authorities.

 


 




 

95








 






 

2.5 Dedications. Developer shall
timely make all conveyances and dedications of the Improvements if
and as required by the Approving Authorities, free and clear of all
liens and encumbrances.

 

2.6 Indemnity. Developer shall
indemnify, defend and hold harmless the Builders and their owners,
employees, members, managers, directors, officers, agents,
affiliates, successors and assigns (each a “Builder
Indemnitee” and collectively, the “Builder
Indemnitees”) for, from and against all claims,
demands, liabilities, losses, damages (exclusive of special,
consequential, punitive, consequential and lost profits damages),
costs and expenses, including but not limited to court costs and
reasonable attorneys’ fees, arising out of material damage
caused by Developer’s negligence or willful misconduct in the
performance of the construction of the Improvements.
Notwithstanding the foregoing, Developer shall not be obligated
under this Agreement to indemnify the Builder Indemnitees to the
extent such liabilities result from the act, negligence or willful
misconduct of any Builder Indemnitee.

 

2.7 Insurance. Developer shall
procure and maintain, and shall cause the Service Providers to
procure and maintain, the insurance described in Exhibit C
attached hereto during the construction of the Improvements and any
warranty work performed on the Improvements.

 

2.8 Independent Contractor.
Developer is an independent contractor and neither Developer nor
its employees are entitled to worker’s compensation benefits
or unemployment insurance benefits through any Builder as a result
of performing under this Agreement. The Developer is responsible
for and obligated to pay all assessable federal and state income
tax on amounts earned or paid under this Agreement.

 

3. Construction of
Improvements.

 

3.1 Plans and Specifications.
Developer shall diligently finalize, process and obtain approval of
the Plans for the Improvements from the applicable Approving
Authorities to the extent required by such entities. Upon receipt
of the approved Plans for the Improvements, Developer will furnish
a copy of such Plans to the Builders. Exhibit B
shall then be completed to identify the Plans and
Improvements.

 

3.2 Construction Standard.
Developer shall cause the applicable Improvements to be constructed
in accordance with the Construction Standard and shall obtain
preliminary and final acceptance thereof by the applicable
Approving Authorities. As used herein, the term “Construction
Standard” means construction and installation of the
Improvements in a good, workmanlike and lien-free manner and in
substantial conformity with the Plans (as may be modified pursuant
to the terms hereof), and the applicable requirements of the
Approving Authorities.

 


 




 

96








 






 

3.3 Contracts. Developer and
contractors of Developer shall contract for all of the work and
materials related to the design and construction of the applicable
Improvements. Developer shall bid, pursue, negotiate, agree to and
execute contracts and agreements with Service Providers for the
work and materials comprising the Improvements (each a
“Contract”
and collectively, the “Contracts”),
based upon forms that Developer deems necessary or appropriate in
its commercially reasonable discretion; provided, however, that
Developer shall deliver written notice to the Builders after it
enters into any Contract, which notice shall identify the Service
Provider(s). Developer shall use good faith efforts to cause each
Contract, in addition to other matters, to (i) allow for the
automatic assignment, without need for further action, of all of
Developer’s rights (including, without limitation, the
warranty and indemnity provisions thereof) to a Builder on a
non-exclusive basis in the event of replacement of Developer
pursuant to the terms of this Agreement and identify the Builders
as intended third-party beneficiaries of the Contract,
(ii) require the Service Providers to provide a warranty on
materials and labor supplied by such Service Provider for a period
coterminous with any warranty period required by the applicable
Approving Authorities for Improvements to be dedicated to an
Approving Authority, but in no event less than one (1) year for any
Improvement, (iii) require the Service Provider to perform its work
in accordance with the Construction Standard, (iv) require the
Service Provider to indemnify, defend, and hold harmless Developer
from all claims and causes of action arising from the negligent
acts or omissions or intentional misconduct of the Service Provider
providing construction services or its employees or agents, (v)
permit retainage in an amount of at least five percent (5%) of the
amounts payable to the Service Provider, until the work to be
completed pursuant to such Contract has been substantially
completed and, if applicable, granted initial acceptance by the
applicable Approving Authority; (vi) provide the Developer the
right, but not the obligation, to pay subcontractors and suppliers
of the Service Provider directly or by joint check, and (vii)
provide for no limitation on remedies against the Service Provider
for a default to the extent customary, except the prohibition of
recovery of punitive damages. Upon receipt of written request from
a Builder, Developer shall deliver a copy of each Contract to such
Builder.

 

3.4 Construction Schedule.
Developer shall cause construction of the Improvements to be
completed as follows:

 

3.4.1 Completion.
The Improvements will be completed in two phases (each a
“Phase”)
consisting of the construction of the Improvements applicable to
the Central Park (as identified on the Concept Plan) during the
first Phase (the “Phase 1 Park
Improvements”) and the construction of the
Improvements applicable to the North Park and the South Park (as
identified on the Concept Plan) during the second Phase (the
“Phase 2 Park
Improvements”). Developer shall cause Substantial
Completion of each component of the Phase 1 Park Improvements to
occur on the date that is ninety (90) days after substantial
completion of the Builder Lots that are designated as Takedown 1 as
depicted on the Concept Plan, provided, however, if such date for
completion would require landscape installation between the during
the months of October through April of any year, landscape
installation may be delayed until May 31 of such year (the
“Phase 1 Substantial
Completion Date”), and cause Substantial Completion of
the Phase 2 Park Improvements to occur on or before the date that
is one (1) year after the Phase 1 Substantial Completion Date
(referred to collectively as the “Substantial
Completion Dates”); provided, however, subject to
Section 3.4.2
below. Developer may cause the Improvements to be constructed and
installed as Developer deems necessary, in the Developer’s
commercially reasonable discretion, to coordinate such Improvements
with the development of other portions of the Development.
Notwithstanding anything to the contrary, the Developer shall have
no obligation to install landscaping during the months of October
through April.

 


 




 

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3.4.2 Force
Majeure. Notwithstanding any contrary provision of this
Agreement, the Substantial Completion Dates and the time for
performance of Developer’s other obligations under this
Agreement shall be extended by a period of time equal to any period
that such performance or progress in construction of the
Improvements is delayed due to any Dispute, as defined below, acts
or failure to act of any Approving Authority, strike, riot, act of
war, act of terrorism, act of violence, weather, act of God, or any
other act, occurrence or non-occurrence beyond Developer’s
reasonable control (each,
an “Force Majeure
Delay”). Within thirty (30) days after the cessation
of the occurrence of a Force Majeure Delay, PCY will give notice
thereof specifying the cause of the Force Majeure Delay and the
number of days of the occurrence.

 

3.5 Substantial
Completion.

 

3.5.1 Definition
of Substantial Completion. “Substantial
Completion” of the Improvements (or applicable
component thereof) shall be deemed to have occurred when all of the
following have occurred with respect to the Improvements (or
applicable component thereof):

 

(a) Developer has
substantially completed or corrected all punchlist items provided
by the Approving Authorities affecting the Improvements (or
applicable component thereof) in accordance with Section 3.5.2
below;

 

(b) Subject to
Section 3.5.1(c)
below, the Improvements (or applicable component thereof) have been
installed pursuant to the Construction Standard;

 

(c) Any Improvements
(or applicable component thereof) that are intended to be dedicated
to or accepted by an Approving Authority shall have been inspected
and preliminarily accepted by the applicable Approving Authority
(subject to the Government Warranty Period (as defined
below); 

 

(d) No mechanics’
or materialmen’s liens shall have then been filed with
respect to the Improvements and lien waivers have been obtained
from the Service Providers that constructed the Improvements (or
applicable portion thereof), or the Developer has obtained a bond
to insure over any such mechanics’ or materialmen’s
liens.

 

3.5.2 Notice
to Builders. Developer shall notify the Builders in writing
when Substantial Completion of the Improvements (or applicable
component thereof) has been achieved, except for minor punch-list
work and the date(s) and time(s) the Approving Authorities, if any,
will inspect such Improvements (or applicable component thereof).
Within ten (10) days after receipt by Builder of such notice from
the Developer, Developer and Builders shall jointly inspect the
Improvements (or applicable component thereof) and produce a
punchlist (“Builders
Punchlist”). The Builders Punchlist may not contain
any items other than incomplete Improvements or components thereof,
deficient or defective construction of the Improvements or
components thereof, or failure to construct the Improvements or
components thereof in accordance with the plans approved by the
applicable Approving Authorities. Builders shall not be able to
object or provide Builders Punchlist items for any portion of the
Improvements previously inspected by the Builders, except in the
case of construction defects. If the Parties are unable to agree
upon a Builders Punchlist within five (5) days after the joint
inspection described above, then any dispute related to such
punchlist shall be submitted to the expedited dispute resolution
procedures in accordance with Section 6 below. Developer will
attempt to provide Builders with copies of any inspection reports
or punchlists received from the Approving Authorities in connection
with the inspection of the Improvements, and Developer shall be
responsible to correct punchlist items from the Approving Authority
and items set forth on the Builders Punchlist. Notwithstanding
anything to the contrary including any Builders Punchlist, if an
Approving Authority grants preliminary approval or construction
acceptance to any of the Improvements, then it shall conclusively
be presumed that such Improvement or work was completed in
accordance with the plans approved by the Approving Authorities,
subject to completion of the punchlist items provided by the
Approving Authority. If an item is not identified as incomplete on
the Builders Punchlist, then it shall be presumed that such
Improvement was completed in accordance with the plans approved by
the Approving Authorities. Disputes regarding Builders Punchlist
items and matters will be resolved pursuant to the expedited
dispute resolution procedures set forth in Section 6 of this
Agreement.

 


 




 

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3.5.3 Correction
of Punchlist Items. Developer shall cause any punchlist
items received from the Approving Authorities and any items on the
Builders Punch List that are the same as the items on the Approving
Authorities punchlist to be corrected within the time required by
the County or other applicable Approving Authorities, and shall
cause any other punchlist items appearing on the Builders Punch
List to be corrected within 90 days, subject to Force Majeure
Delay.

 

3.6 Self-Help Remedy.

 

3.6.1 Notice
of Default. If Developer: (a) breaches its obligation under
this Agreement to complete or cause the completion of any
Improvement in accordance with the Plans or by the applicable
Substantial Completion Date (as extended by any Force Majeure
Delay); (b) otherwise breaches any material obligation under this
Agreement (c) fails to comply with any material provision of its
Contracts with Service Providers beyond any applicable express
notice or cure periods; or (d) files a petition for relief in
bankruptcy or makes an assignment for the benefit of its creditors,
or admits in writing its inability to pay its debts generally as
they become due (each a “Bankruptcy
Event”), then any Builder may deliver written notice
of the breach to Developer (a “Notice of
Default”). Each of the events set forth in Subsections
(a) through (d) inclusive of the preceding sentence shall be herein
referred to as a “Constructing Party
Default.” For any Constructing Party Default other
than a Bankruptcy Event, the Developer shall have thirty (30) days
after Developer’s receipt of the Notice of Default from any
Builder to cure the Constructing Party Default (the
“Cure
Period”); provided, however, if the nature of the
Constructing Party Default is such that it cannot reasonably be
cured within thirty (30) days, the Cure Period shall be deemed
extended for a reasonable period of time (not to exceed an
additional ninety (90) days) so long as Developer commenced in good
faith and with due diligence to cause such Constructing Party
Default to be remedied. If Developer does not cause the cure of the
Constructing Party Default within the Cure Period (as may be
extended pursuant to the preceding sentence, and subject to Force
Majeure Delays), or if a Bankruptcy Event occurs (either, an
“Event of
Default”), then Richmond (acting as
“Substitute
Constructing Party”) may elect to assume and take over
the construction of the Improvements by providing written notice to
Developer of such appointment within 15 days following the Event of
Default (the “Assumption
Notice”). If Richmond does not deliver an Assumption
Notice within such 15 day period, the remaining Builders may meet
and appoint one of the other Builders or another qualified third
party to serve as the Substitute Constructing Party. Substitute Constructing Party’s assumption
of the construction of the Improvements shall not include the
assumption of any liability for acts or omissions occurring prior
to the Assumption Notice, or payment of any “Constructing
Party Cost Overruns” (as defined below) incurred prior to the Assumption Notice, which
Constructing Party Cost Overruns shall remain the sole
responsibility of the Developer, or receipt of any cost savings
prior to the Assumption Notice; provided, however, that the
Substitute Constructing Party shall be entitled to an
administrative fee in an amount equal to two percent (2%) of the
remaining Costs (as defined below) actually paid, which
administrative fee shall be included in the Constructing Party Cost
Overruns. The Builders’ election to
appoint a Substitute Constructing Party to assume and take over the
construction of the Improvements and to exercise and enforce the
rights and obligations set forth in Section 3.6.2 below shall
thereafter be the Builders’ sole and exclusive remedy except
as provided in Section 3.6.2 and in Sections 3.7 and 3.8 with
respect to work performed by PCY.

 


 




 

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3.6.2 It
is expressly acknowledged and agreed that in the event the
Substitute Constructing Party takes over the construction of the
Improvements as contemplated hereby, Substitute Constructing
Party’s assumption of the
construction of the Improvements is done only as an
accommodation to the Parties and that, except as expressly set
forth in this Agreement, Substitute Constructing Party shall have
no responsibility, liability or obligation with respect to (and the
Parties hereby covenant not to sue Substitute Constructing Party
for, and hereby release the Substitute Constructing Party from, all
liability and claims relating to or arising from) the design,
engineering, construction or completion of the Improvements, the
funds collected and disbursed under this Agreement, any damage,
loss or injury to any of the parties or otherwise related to any
action or inaction of Substitute Constructing Party in connection
with this Agreement, or any defect in the materials or workmanship
pertaining to the Improvements, except for any “Substitute
Constructing Party Covered Liability,” as hereinafter
defined. “Substitute
Constructing Party Covered
Liability” means the following matters for which
Substitute Constructing Party shall be liable to the other Parties
in connection with its performance as Substitute Constructing Party
hereunder: (a)  any damage, loss or injury arising from the
willful misconduct, bad faith, recklessness or illegal acts of the
Substitute Constructing Party in performing or failing to perform
hereunder, or (b) damage, loss or injury arising from the
fraudulent conduct of Substitute Constructing Party; provided,
however, that any damages to which the other Parties shall be
entitled to recover for any Substitute Constructing Party Covered
Liability shall be limited to out-of-pocket losses, costs, damages
or expenses, and the other Parties shall not be entitled to recover
from the Substitute Constructing Party any punitive or
consequential losses, costs, damages or expenses or lost profits as
a result of, or in connection with, any Substitute Constructing
Party Covered Liability. Substitute Constructing Party makes no
representation or warranty with respect to the Joint Improvements,
and shall have no liability for any defect in the materials or
workmanship pertaining thereto. The parties hereby agree to look
solely to the contractors engaged to construct and complete the
Improvements for any contractual violation, indemnity, warranty or
guarantee relating to the Improvements. Upon completion of the
Improvements, Substitute Constructing Party shall assign to the
parties hereto (to the extent assignable and without any
representation or warranty whatsoever), on a non-exclusive basis,
the contractual rights received from the contractors that construct
or complete any portion of the Joint Improvements, including,
without limitation, all rights related to any indemnities,
guaranties and/or warranties received from such
contractors.

 


 




 

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3.6.3 Assumption
Right. If the Builders deliver an Assumption Notice, then:
(i) Developer shall cooperate to allow the Substitute Constructing
Party to take over and complete the incomplete Improvements,
including the execution and delivery to the Substitute Constructing
Party of such agreements, documents or instruments as may be
reasonably necessary to assign to the Substitute Constructing Party
all Contracts with third parties pertaining to the Improvements;
(ii) Developer shall remain responsible for all Constructing Party
Cost Overruns (as hereinafter defined) and Costs incurred through
the date that the Assumption Notice if given, but Developer shall
be relieved of all further obligations under this Agreement with
respect to the completion of the incomplete Improvements subsequent
to such assumption; (iii) Developer shall remain liable for
its negligence or willful misconduct, and any indemnification
obligations specified herein incurred prior to the date of such
assumption; and (v) Substitute Constructing Party shall assume and
perform all obligations under all Contracts for Improvements which
Substitute Constructing Party will complete to the extent such
obligations are to be performed after the date of delivery of the
Assumption Notice; and (vi) Substitute Contracting Party shall
succeed to all of the Developer’s rights under Section 5 of
this Agreement pertaining to the right to receive and collect
payment for Costs for completing the construction of the
Improvements. The Substitute Constructing Party shall be entitled
to recover the Constructing Party Cost Overruns incurred by the
Substitute Constructing Party from the Developer. In the event of
an Assumption Notice, the Substitute Constructing Party shall
indemnify, defend and hold harmless the Developer and its members,
managers, shareholders, employees, directors, officers, agents,
affiliates, successors and assigns for, from and against all
claims, demands, liabilities, losses, damages (exclusive of
special, consequential, punitive, speculative or lost profits
damages), costs and expenses, including but not limited to court
costs and reasonable attorneys’ fees, that accrue after the
date of the Assumption Notice and arise out of the Substitute
Constructing Party’s Covered Liability or gross negligence in
the completion of the Improvements, and this indemnity shall not
apply to any claims, demands, liabilities, losses, damages, costs,
expenses, acts or omissions arising or accruing before the date of
the Assumption Notice. The obligations under this Section shall
survive the termination or expiration of this
Agreement.

 

3.7 Warranty Periods.

 

3.7.1 Government
Warranty Period. The Approving Authorities may require a
warranty period after the Substantial Completion with respect to
certain Improvements (a “Government Warranty
Period”). In the event defects in the Improvements to
which a governmental warranty applies become apparent during the
Government Warranty Period, then Developer shall coordinate the
repairs with the applicable Approving Authorities and cause the
Service Provider(s) who performed the work or supplied the
materials in which the defect(s) appear to complete such repairs
or, if such Service Providers fail to correct such defects,
otherwise cause such defects to be repaired to the satisfaction of
the Approving Authorities. Any costs and expenses incurred in
connection with any repairs or warranty work performed during the
Government Warranty Period (including, but not limited to, any
costs or expenses incurred to enforce any warranties against any
Service Providers) that cause the Budgeted Costs to be exceeded
shall be borne by Developer and shall be included in the
Constructing Party Cost Overruns, unless such defect or damage was
caused by Builder or its contractors, subcontractors, employees, or
agents, in which event Builder shall pay all such costs and
expenses to the extent caused by Builder or its contractors,
subcontractors, employees, or agents.

 


 




 

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3.7.2 Non-Government
Warranty Period. Developer warrants (“Non-Government
Warranty”) to each Builder that each Improvement to
which a Governmental Warranty Period does not apply shall have been
constructed in accordance with the Plans for one (1) year from the
date of Substantial Completion of the applicable Improvement (the
“Non-Government
Warranty Period”). If the Builders deliver written
notice to Developer of breach of the Non-Government Warranty during
the Non-Government Warranty Period, then Developer shall coordinate
the corrections with the Builders and cause the Service Provider(s)
who performed the applicable work or supplied the applicable
materials to complete such corrections or, if such Service
Providers fail to make such corrections, otherwise cause such
corrections to be made. Any costs and expenses incurred in
connection with a breach of the Non-Government Warranty that cause
the Budgeted Costs to be exceeded shall be borne by Developer
(including, but not limited to, any costs or expenses incurred to
enforce any warranties against Service Providers), and shall be
included in the Constructing Party Cost Overruns, unless such
breach was caused by a Builder or its contractors, subcontractors,
employees, or agents, in which event the Builder shall pay all such
costs and expenses to the extent caused by the Builder or its
contractors, subcontractors, employees, or agents. EXCEPT AS
EXPRESSLY PROVIDED IN SECTION 3.7.1 OR 3.7.2, THE
DEVELOPER PARTIES MAKE NO REPRESENTATIONS OR WARRANTIES OF ANY KIND
TO BUILDER IN RELATION TO THE IMPROVEMENTS, EXPRESS OR IMPLIED,
INCLUDING WITHOUT LIMITATION, ANY IMPLIED WARRANTY OF HABITABILITY,
MERCHANTABILITY, OR FITNESS FOR ANY PARTICULAR PURPOSE, AND
EXPRESSLY DISCLAIMS ALL OF THE SAME AND SHALL HAVE NO OBLIGATION TO
REPAIR OR CORRECT ANY DEFECT IN IMPROVEMENTS FOR WHICH NO CLAIM IS
ASSERTED DURING THE APPLICABLE WARRANTY PERIOD. The preceding
sentence does not affect, alter or modify any Service
Provider’s obligations to repair or correct any defects in
Improvements and shall not be construed as a limitation on the
Builders’ statutory rights or remedies, if any, which may not
be modified by contract.

 

3.8 Liens. Developer shall pay, or
cause to be paid, when due, all liens and claims for labor and/or
materials furnished for the construction of the Improvements
pursuant to this Agreement to prevent the filing or recording by
any third party of any mechanics’, materialmen’s or
other lien, stop notice or bond claim or any attachments, levies or
garnishments (collectively “Liens”)
involving the Improvements.

 

4. Costs of
Improvements.

 

4.1 Definition of Costs. As used
herein, the term “Costs”
shall mean all hard and soft costs incurred in connection with the
design (including all engineering expenses), construction and
installation of the Improvements, including, but not limited to,
costs of labor, materials and suppliers, engineering, design and
consultant fees and costs, blue printing services, construction
staking, demolition, soil amendments or compaction, any processing,
plan check or permit fees for the Improvements, engineering
services required to obtain a permit for and complete the
Improvements, costs of surety and compliance with all applicable
laws, costs of insurance required by this Agreement, costs of any
financial assurances, any corrections, changes or additions to work
required by the Approving Authorities or necessitated by site
conditions, municipal, state and county taxes imposed in connection
with construction of the Improvements, any warranty work, and any
other costs incurred in connection with the performance of the
obligations of Developer or the Substitute Constructing Party (as
applicable) hereunder to complete the Improvements.

 


 




 

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4.2 Budget. Upon completion of the
Plans there will be attached hereto by an amendment as Exhibit D an
estimate of the Costs to construct the Improvements (the
“Budget”).
The Costs identified on the Budget are referred to herein as
“Budgeted
Costs.” The Builders shall pay or cause to be paid
pursuant to Article 6 below a share of
the Budgeted Costs not to exceed One Million Two Hundred Thousand
Dollars ($1,200,000.00) (the “Maximum Builder
Costs”).

 

4.3 Cost Overruns. Notwithstanding
anything in this Agreement to the contrary, the Developer shall pay
(i) all costs to correct any error or defect in the Plans that
cause the Costs to exceed the Maximum Builder Costs, and (ii) all
other costs and charges that cause the Costs to exceed the Maximum
Builder Costs (collectively, the “Constructing Party
Cost Overruns”). The Builders shall not have any
responsibility for Constructing Party Cost Overruns except that the
applicable Builder shall pay for such Constructing Party Cost
Overruns which occur as a result of that Builder’s breach of
its obligations under this Agreement or such Builder’s
actions.

 

4.4 Accounting. Developer shall
keep good and accurate books and records in sufficient detail to
allow the Costs to be calculated, which books and records shall be
made available for review (upon reasonable prior written notice) by
the Parties. Within thirty (30) days after Substantial Completion
of the Improvements, the Developer shall deliver to the Builders a
reasonably detailed final accounting of the Costs.

 

4.5 Progress Reports. Developer
shall, no less frequently than once per calendar quarter, provide
the Builders with a progress report setting forth the amount of
Costs expended to date, a list of Improvements completed to date,
and an estimate by a project manager of Developer of the status of
overall completion of the Improvements, in such form as Developer
deems reasonably appropriate.

 

5. Payment of Costs.

 

5.1 Payment.

 

5.1.1 Payment.
The Builders shall pay to Developer in the aggregate an amount
equal to the Maximum Builder Costs. Each Builder shall pay a
prorata portion of the Maximum Builder Costs that is equal to a
percentage of the Maximum Builder Costs that is calculated by
dividing the number of Builder Lots to be purchased by a Builder
under the terms of that Builder’s Purchase Agreement by the
total number of Builder Lots to be purchased by all of the Builders
in the first phase of the Development under the terms of all of the
Purchase Agreements. Based upon this calculation, each
Builder’s prorata share of the Maximum Builder Cost expressed
as a percentage (“Prorata
Share”) is as follows, subject to adjustment if the
total number or any Builder’s number of Builder Lots changes
as provided in Section 16.3 hereof:

 


 




 

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# of Lot to be Purchased 

	


Total # of Lots in Development

	


Percentage


	


Richmond:

	


196

	


506

	


38.70%


	


Taylor Morrison:

	


161

	


506

	


31.80%


	


Additional Builder:

	


149

	


506

	


29.50%







 

 


Notwithstanding the
foregoing or anything else to the contrary contained in this
Agreement, and for the avoidance of doubt, the Parties acknowledge
and agree that in no event will the amount due from any individual
Builder exceed the dollar amount equal to the product of (a)
$1,200,000.00 multiplied by (b) such Builder’s Percentage
shown in the table above.

 

5.1.2  Escrow
Instruction. Within ten (10) business days after substantial
completion of the Builder Lots to be acquired by a Builder at its
first Closing under its Purchase Agreement, each Builder shall pay
its Prorata Share of that portion of the Maximum Builder Costs
equal to $750,000 to Escrow Agent (the “Initial
Payment”). On or before the date that is two hundred
seventy (270) days after the Phase 1 Substantial Completion Date,
each Builder shall pay to Escrow Agent its Prorata Share of (a) the
lesser of the remaining portion of the Maximum Builder Costs equal
to $450,000, or (b) the remaining portion of the Budgeted Costs
(the “Final
Payment”). For the purposes of this Agreement,
Developer shall be deemed an Additional Builder with respect to the
Pro Rata Share allocated above to the Additional Builder and its
obligations hereunder and Developer shall pay the Additional
Builder’s Prorata Share of the Initial Payment at the first
closing of lots under a Purchase Agreement and pay the Final
Payment on or before the date required above. If a Builder’s
Purchase Agreement terminates before such Builder has closed on the
purchase of any Builder Lots thereunder, then Developer will fund
such Builder’s Prorata Share to the extent required so that
there is not a shortfall in the Initial Payment or Final Payment
required hereunder. When another builder executes a joinder to this
Agreement, the Additional Builder shall be substituted for
Developer as the Additional Builder and shall be responsible for
paying the Pro Rata Share of the Initial Payment and the Final
Payment allocated to the Additional Builder and the obligations of
a Builder hereunder and Developer will be reimbursed from such
payments for any Initial Payment or Final Payment made by
Developer. Escrow Agent has executed this Agreement in order to
reflect its agreement with regard to the Escrowed Funds under this
Section 5. Pursuant to the request of Developer and the Builders,
Escrow Agent agrees to receive and accept the Initial Payment and
the Final Payment (collectively the “Escrowed
Funds”) upon and subject to the remaining terms and
conditions hereof. Developer (or the Substitute Contracting Party
who has been appointed pursuant to Section 3.6.1) is entitled to
draw upon the Escrowed Funds for reimbursement of invoices for
Costs incurred by Developer (or the Substitute Contracting Party)
in connection with the completion of the Improvements. In the event
that a Substitute Contracting Party is appointed pursuant to
Section 3.6.1, Developer and such Substitute Contracting Party
shall promptly give notice thereof to the Escrow Agent and such
Substitute Contracting Party shall thereafter have the rights of
the Developer under this Section 5.1.2 in connection with Draw
Requests to pay for Costs incurred by such Substitute Contracting
Party to complete the construction of the Improvements. The Escrow
Agent shall disburse amounts from the Escrowed Funds in accordance
with the following instructions. To the extent that any
Builder’s Purchase Agreement has be terminated at the time
any payment is due pursuant to this Section, Developer will make
such Builder’s payment, subject to reimbursement from a New
Builder as herein after defined:

 


 




 

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(a) Submission
and Payment.
Developer may submit written draw requests
(“Draw
Requests”)
to the Builders and Escrow Agent from time to time. Draw Requests
must be accompanied by (i) copies of invoices from the third party
contractors and other Service Providers for the amounts to be
disbursed and (ii) shall include conditional lien waivers
and releases from Service Providers relating to work to paid for
from the current Draw Request, and to the extent not previously
provided, unconditional waivers and releases from such Service
Providers in the full amount shown on all conditional waivers and
releases previously submitted in connection with prior Draw
Requests for which payment has been made hereunder.

 

(b) Objection. Any portion of a
Draw Request that a Builder does not disapprove by written notice
to Developer and Escrow Agent within five (5) business days
following receipt thereof will be deemed approved. Builders may
only object to a Draw Request for the following reasons: (a) the
invoices to accompany the Draw Request were not properly delivered;
or (b) Builder has good cause to dispute the validity of the
invoice; or (c) the invoice is not for Costs incurred by Developer
in connection with the construction of the Improvements. Builders
shall deliver written notice of any objection (“Objection
Notice”) pursuant to the preceding sentence to Escrow
Agent and Seller within the five (5) business day period described
in the first sentence of this Section. If Escrow Agent and Seller
timely receive an Objection Notice, then Escrow Agent shall not be
authorized to disburse such disputed amount to Developer (but
Escrow Agent shall be authorized to disburse all other non-disputed
amounts to Developer) unless and until Escrow Agent receives
authorization to do so from the Parties. If Escrow Agent and
Developer timely receive an Objection Notice, then Builder and
Seller shall promptly meet and in good faith attempt to resolve all
objections and provide direction to Escrow Agent to disburse
mutually-acceptable amounts to the Developer. Any Objection Notice
shall specifically identify the amount of the requested payment to
which the objection applies and the basis for such objection. No
Objection Notice shall be valid if it does not identify specific
objections.

 

(c) Final Disbursement. Upon
Substantial Completion of the Improvements, Developer will submit a
Completion Notice to Escrow Agent and the Builders along with a
final Draw Request (which shall include an unconditional lien
waiver from all Service Providers, to the extent not previously
provided) with respect to any funds remaining in the Escrow
Account. If Escrow Agent is not in possession of an unresolved
Objection Notice, then Escrow Agent will pay any undisbursed
portion of the Escrow Funds then remaining in escrow to Developer.
If Escrow Agent receives an Objection Notice from a Builder in
accordance with this pertaining to Developer’s final Draw
Request, the Escrow Agent may hold such undisbursed Escrow Funds
until it receives joint written instructions from Developer and
such Builder directing Escrow Agent regarding the disbursement of
such amount, or Escrow Agent may proceed as permitted by the
General Provisions to this Agreement attached as Attachment 1
hereto.

 

(d) If the Developer
and Builders are unable to agree upon a resolution of an Objection
Notice within five (5) days after Developer’s receipt
thereof, then any dispute related to such Objection Notice shall be
submitted to the expedited dispute resolution procedures in
accordance with Section
6 below.

 


 




 

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(e) Developer shall pay
all charges of Escrow Agent in acting hereunder, and such
reasonable attorneys' fees, expenses and other costs as may be
incurred by Escrow Agent in connection with the negotiation,
preparation and administration of this Agreement.

 

6. Expedited Dispute
Resolution.

 

6.1 Disputes Related to
Contracts, Draw Notices and Costs. Notwithstanding anything to the contrary herein,
disputes related to any objections to Contracts,
determination of Substantial Completion, Draw Notices or the amount
of or responsibility for Constructing Party Cost Overruns
(“Expedited
Disputes”) shall all be
resolved by CVL Engineers – Melinda Lundquist or if
such party is not available or unwilling to serve as arbitrator,
another reputable third party licensed engineer selected by
Developer and approved by Builders (“Informal
Arbitrator”). Within five (5) business days after a
Party delivers a Dispute Notice to all Parties, the Developer and
the Builder or Builders involved in the Expedited Dispute shall
deliver to the Informal Arbitrator a written statement of how such
Party believes the Expedited Dispute should be resolved, together
with reasonable supporting documentation of such position
(“Resolution
Notice”). Within ten (10) business days after receipt
of Resolution Notices from both such Parties, the Informal
Arbitrator shall approve one (1) of the Parties’ Resolution
Notice and shall deliver written notice of such approval to each
Party. The decision of the Informal Arbitrator shall be binding on
all Parties with respect to the applicable Expedited Dispute. All
Parties shall timely cooperate with the Informal Arbitrator in
rendering his or her decision. The Party that is not the prevailing
party in the resolution of any Expedited Dispute shall promptly pay
the Informal Arbitrator’s fee, and the prevailing
party’s other fees and costs of any such expedited dispute
resolution process and reasonable attorney’s fees. The term
“prevailing party” means the party who successfully
obtains substantially all of the relief sought by such party or is
successful in denying substantially all of the relief sought by the
other party. The Parties acknowledge that there is a benefit to the
Parties in having work done as expeditiously as possible and that
there is a need for a streamlined method of making decisions
described in this Section so that work is not delayed. A Party
shall not be entitled to recover from any other Party exemplary,
punitive, special, indirect, consequential or any other damages
other than actual damages (unless the Informal Arbitrator finds
intentional abuse or frustration of the arbitration process) in
connection with an Expedited Dispute.

 

6.2 Standards of Conduct. The
Parties agree that with respect to all aspects of the expedited
dispute resolution process contained herein they will conduct
themselves in a manner intended to assure the integrity and
fairness of that process. To that end, if an Expedited Dispute is
submitted to expedited dispute resolution process, the Parties
agree that they will not contact or communicate with the Informal
Arbitrator who was appointed with respect to any Expedited Dispute
either ex parte or outside
of the contacts and communications contemplated by this
Section 6, and the
Parties further agree that they will cooperate in good faith in the
production of evidence in a prompt and efficient manner to permit
the review and evaluation thereof by the other
Parties.

 

7. Progress Meetings. From and
after the date of this Agreement and until Substantial Completion
of the Improvements, the Parties shall cause their designated
representatives to meet within five (5) business days following a
request from a Party regarding the status of construction of the
Improvements, scheduling and coordination issues, engineering and
design issues, and other similar issues. Any Party may change its
designated representative under this Agreement at any time by
written notice to the other parties. The initial designated
representative for each Party for the purpose of this Section shall
be the individual listed on each Party’s respective signature
page attached hereto. All inquiries, requests, instructions,
authorizations, and other communications with respect to the
matters covered by this Agreement shall be made to such
representatives. Any Party may without further or independent
inquiry, assume and rely at all times that the representatives of
the other parties designated hereunder have the power and authority
to make decisions on behalf of such other parties, to communicate
such decisions to the other Party and to bind such Party by his
acts and deeds, unless otherwise notified in writing by the Party
designating the representative. Any Party may change its
representative under this Agreement at any time by written notice
to the other Parties.

 


 




 

106








 






 

 

8. Developer’s Stormwater Permit
responsibilities. Developer shall obtain and comply with all
necessary permits related to stormwater and erosion control from
all Approving Authorities, in relation to the construction, repair,
and maintenance of the Improvements.

 

9. Notices and Communications. All
notices, statements, demands, requirements, approvals or other
communications and documents (“Communications”)
required or permitted to be given, served, or delivered by or to
any Party or any intended recipient under this Agreement shall be
in writing and shall be given to the
addresses set forth in this Section 9
(“Notice
Address”). Communications
to a Party shall be deemed to have been duly given (i) on the
date and at the time of delivery if delivered personally to the
Party to whom notice is given at such Party’s Notice Address;
or (ii) on the date and at the time of delivery or refusal of
acceptance of delivery if delivered or attempted to be delivered by
an overnight courier service to the Party to whom notice is given
at such Party’s Notice Address; or (iii) on the date of
delivery or attempted delivery shown on the return receipt if
mailed to the Party to whom notice is to be given by first-class
mail, sent by registered or certified mail, return receipt
requested, postage prepaid and properly addressed to such Party at
such Party’s Notice Address; or (iv) on the date and at
the time shown on the facsimile or electronic mail message if
telecopied or sent electronically to the number or address
designated in such Party’s Notice Address and receipt of such
telecopy or electronic mail message is electronically confirmed
(provided, however, any notice of default from Developer to Builder
may not be delivered by electronic mail message and must be
delivered by facsimile or other delivery method set forth above).
The Notice Addresses for the Developer and Builder are as follows:

 


To
Developer:


PCY
Holdings, LLC


Attention:
Mark Harding


34501
E. Quincy Ave.


Bldg.
34, Box 10


Watkins,
Colorado 80137


Telephone:
(303) 292-3456


Facsimile:
(303) 292-3475


E-mail: mharding@purecyclewater.com


 


with a
copy to:


Fox
Rothschild LLP


1225
17th
Street, Suite 2200


Denver,
CO 80202


Attention: Rick
Rubin, Esq.


Telephone: (303)
292-1200


Email:
rrubin@foxrothschild.com

 


 




 

107








 






 

 


To
Richmond:


Linda
Purdy


Richmond American
Homes of Colorado, Inc.


4350
South Monaco Street


Denver,
Colorado 80237


Telephone:
(720)-977-3847


Facsimile: (720)
977-4707


Email:
linda.purdy@mdch.com


 


with a
copy to:


M.D.C.
Holdings, Inc.


4350
South Monaco Street


Denver,
Colorado 80237


Attn:
Drew Rippey


Telephone: (720)
977-3213


Facsimile: (720)
482-8558


Email:
Drew.Rippey@mdch.com


 


M.D.C.
Holdings, Inc.


4350 S.
Monaco Street


Denver,
CO  80237


Attn:                      Linda
Zimmerman Skultety


Senior
Paralegal – Real Estate


Telephone: 
720-977-3254


Facsimile:
303-488-4954


Email:
Linda.Skultety@mdch.com


 


To
Taylor Morrison:


Taylor
Morrison of Colorado, Inc.


1420
West Canal Court, Suite 170


Littleton, Colorado
80120


Attention: Phillip
Cross


Telephone:
(303) 325-2426


E-mail: pcross@taylormorrison.com


 


With
copy to Phillip Cross at same address


E-mail: pcross@taylormorrison.com


 


with a
copy
to:                                


Brier,
Irish, Hubbard & Erhart P.L.C.


2400
East Arizona Biltmore Circle, Suite 1300


Phoenix, AZ
85016


Attn:
Jeff Hubbard


Telephone: (602)
522-0160


Facsimile: (602)
522-3945


E-mail: jhubbard@bihlaw.com


 


With
copy to Tony Meier at same address


E-mail: tmeier@bihlaw.com


 




 

108








 






 


 


If to
Escrow Agent:


 


Land
Title Guarantee Company


Attn:
____________________


3033 E.
1st Ave. #600


Denver,
Colorado 80206


Fax#: 303-393-4959


Direct: 303-_______________



           
           
           
        Email: ___________@ltgc.com


 

10. Attorneys’ Fees. Except
as provided in Section
6.1, should any action be brought in connection with this
Agreement including, without limitation, actions based on contract,
tort or statute, the prevailing Party in such action shall be
awarded all costs and expenses incurred in connection with such
action, including reasonable attorneys’ fees. The provisions
of this Section shall survive the expiration or termination of this
Agreement.

 

11. Further Acts. Each of the
Parties hereto shall execute and deliver all such documents and
perform all such acts as reasonably necessary, from time to time,
to carry out the matters contemplated by this
Agreement.

 

12. No Partnership; Third Parties.
It is not intended by this Agreement to, and nothing contained in
this Agreement shall, create any partnership, joint venture or
other arrangement among the Parties hereto. No term or provision of
this Agreement is intended to, or shall, be for the benefit of any
person, firm, organization or corporation not a Party hereto, and
no such other person, firm, organization or corporation shall have
any right or cause of action hereunder.

 

13. Entire Agreement; Headings for
Convenience Only; Not to be Construed Against Drafter; No Implied
Waiver. This Agreement and all other written agreements
among the Parties constitute the entire agreement among the Parties
hereto pertaining to the subject matter hereof. No change or
addition is to be made to this Agreement except by written
amendment executed by the Parties. The
headings, captions and titles contained in this Agreement
are intended for convenience of
reference only and are of no meaning in the interpretation or
effect of this Agreement. This Agreement shall not be construed
more strictly against one (1) Party than another merely by virtue
of the fact that it may have been initially drafted by one (1) of
the Parties or its counsel, since all Parties have contributed
substantially and materially to the preparation hereof. No failure
by a Party to insist upon the strict performance of any term,
covenant or provision contained in this Agreement, no failure by a
Party to exercise any right or remedy under this Agreement, and no
acceptance of full or partial payment owed to a Party during the
continuance of any default by the other Party(ies), shall
constitute a waiver of any such term, covenant or provision, or a
waiver of any such right or remedy, or a waiver of any such default
unless such waiver is made in writing by the Party to be bound
thereby. Any waiver of a breach of a term or a condition of this
Agreement shall not prevent a subsequent act, which would have
originally constituted a default under this Agreement, from having
all the force and effect of a default.

 


 




 

109








 






 

 

14. Governing Law. This Agreement
is entered into in Colorado and shall be construed and interpreted
under the law of the State of Colorado without giving effect to
principles of conflicts of law which would result in the
application of any law other than the law of the State of
Colorado.

 

15. Severability. If any provision
of this Agreement is declared void or unenforceable, such provision
shall be severed from this Agreement and shall not affect the
enforceability of the remaining provisions of this
Agreement.

 

16. Assignment; Binding Effect.
This Agreement shall be binding upon and inure to the benefit of
the Parties hereto and their respective successors and permitted
assigns. Neither the Builders nor Developer may assign any of their
rights or obligations under this Agreement without the prior
written consent of the other Party(ies), which consent may be
withheld in each Party’s sole and absolute discretion;
provided, however, that:

 

16.1 A
Builder may assign, without consent, its rights under this
Agreement in full, but not in part: (i) to a third party which
acquires some or all of Builder’s Builder Lots, or (ii) to an
entity that controls, is controlled by, or under common control
with, Builder; provided further, however that Developer approves
the form of assignment, which approval shall be in
Developer’s reasonable discretion; and

 

16.2 Developer
may assign, without consent (but with prior notice to Builder), its
rights under this Agreement: (i) to an entity that controls, is
controlled by, or under common control with, Developer; (ii) to any
entity that acquires all or substantially all of the
Developer’s interests in the Builder Lots which Seller
reasonably believes has the financial ability and experience to
perform Seller’s obligations under this
Agreement.

 

16.3 Notwithstanding
the foregoing, to the extent that any Builder identified herein
does not acquire all of the Builder Lots to be acquired pursuant to
its Purchase Agreement, the Developer shall have the right to
unilaterally amend this Agreement by having any other builder (each
a “New
Builder”) which contracts to acquire any of the
Builder Lots from Developer to execute a joinder to this Agreement
which shall set forth a Prorata Share for such New Builder as
calculated pursuant to Section 5.1.1 hereof and in the form
attached as Exhibit
E.

 

17. Counterparts;
Copies of Signatures. This Agreement may be executed in two
(2) or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one (1) and
the same instrument. The signature pages from one (1) or more
counterparts may be removed from such counterparts and such
signature pages all attached to a single instrument so that the
signatures of all Parties may be physically attached to a single
document. This Agreement
may be executed and delivered by
facsimile or by electronic mail in portable document format (.pdf)
or similar means and delivery of the signature page by such method
will be deemed to have the same effect as if the original signature
had been delivered to the other party. Upon execution of
this Agreement by Developer and
the Builders, Developer shall provide a fully executed copy of
this Agreement to each Builder
for its records.

 


 




 

110








 






 

 

18. Time of the Essence. Time is of
the essence for performance or satisfaction of all requirements,
conditions, or other provisions of this Agreement, subject to any
specific time extensions set forth herein.

 

19. Computation of Time Periods.
All time periods referred to in this Agreement shall include all
Saturdays, Sundays and holidays, unless the period of time
specifies business days. If the date to perform any act or give a
notice with respect to this Agreement shall fall on a Saturday,
Sunday or national or state holiday, the act or notice may be
timely performed on the next succeeding day which is not a
Saturday, Sunday or a national or state holiday.

 

20. Remedies. Except as hereinafter
provided with regard to Expedited Disputes and the self-help remedy
under Section 3.6,
if any Party is in default of any of its obligations under this
Agreement beyond any applicable notice or cure periods, the other
Party(ies) may avail itself to any rights and remedies available at
law and equity, but may only recover its actual, out-of-pocket
damages (excluding any incidental, consequential, speculative,
punitive or lost profits damages) incurred as a result of such
default. For Expedited Disputes, the sole and exclusive remedy of
the Parties is set forth in Section 6 of this Agreement, and for
Developer Defaults, the sole and exclusive remedy of the Parties is
set forth in Section
3.6 of this Agreement.

 

21. Jury Waiver. TO THE EXTENT
PERMITTED BY LAW, THE PARTIES HEREBY KNOWINGLY, INTENTIONALLY AND
VOLUNTARILY, WITH AND UPON THE ADVICE OF COMPETENT COUNSEL, WAIVE,
RELINQUISH AND FOREVER FORGO THE RIGHT TO A TRIAL BY JURY IN ANY
ACTION OR PROCEEDING BASED UPON, ARISING OUT OF, OR IN ANY WAY
RELATING TO THE PROVISIONS OF THIS AGREEMENT.

 


[SIGNATURE PAGE
FOLLOWS]

 


 




 

111








 






IN
WITNESS WHEREOF, the Parties have executed this Agreement as of the
Effective Date first set forth above.


 


DEVELOPER:


 


PCY
HOLDINGS. LLC,


a
Colorado limited liability company


 


 


By:           ___________________________________


Name:                      ___________________________________


Title:                      ___________________________________


 

 


 

 


Designated
Representative:
______________________________________________________

 


 

 


 

 


 



ESCROW AGENT:


 



Land Title Guarantee Company


 



By:            

___________________________________







Name:                       

___________________________________







Title:                       

___________________________________






 

 


 




 

112








 






BUILDER:


 


Richmond American
Homes of Colorado, Inc.,


a
Delaware corporation


 


By:           ___________________________________


Name:                      ___________________________________


Title:                      ___________________________________


 



Designated
Representative:    


_____________________________________________________






 


 


 


 


BUILDER:


 


Taylor
Morrison of Colorado, Inc.,


a
Colorado corporation


 


By:           ___________________________________


Name:                      ___________________________________


Title:                      ___________________________________


 

 



Designated
Representative:  


_____________________________________________________





 


 

 


 




 

113








 






Exhibit
A


to


Amenity
Development Agreement


Showing
Central Park, North Park and South Park


 


 


 




 


 


 


 


 




 

114








 






Exhibit
B


to


Amenity
Development Agreement


 


(Improvements
and Plans)


 




 




 

115








 










 

116








 








 




 

117








 






Exhibit
C


to


Amenity
Development Agreement


 


(Required
Insurance)


 


Developer
or the Substitute Constructing Party (as applicable) shall maintain
the amounts and types of insurance described below and shall cause
the Service Providers to maintain such coverages from insurance
companies licensed to do business in the State of Colorado having a
Best’s Insurance Report Rating of A/VI or better covering the
risks described below:


 



A.            

Commercial General
Liability Insurance (including premises, operations, products,
completed operations, and contractual liability coverages) in an
amount not less than One Million Dollars ($1,000,000.00) per
occurrence, One Million Dollars ($1,000,000.00) personal injury and
advertising injury, and Two Million Dollars ($2,000,000.00) General
Aggregate.






 



B.            

Automobile
Liability Insurance for all motor vehicles operated by or for
Developer or Substitute Constructing Party, including owned, hired,
and non-owned autos, with minimum Combined Single Limit for Bodily
Injury and Property Damage of One Million Dollars ($1,000,000.00)
for each occurrence.






 



C.            

Workers
Compensation Insurance for all employees of Developer or Substitute
Constructing Party as required by law, to cover the applicable
statutory limits in the State of Colorado and employer’s
liability insurance with limits of liability of not less than One
Million Dollars ($1,000,000.00) for bodily injury by accident (each
accident) and One Million Dollars ($1,000,000.00) for bodily injury
by disease (each employee).






 



D.            

With respect to
Service Providers that provide professional services (e.g.,
engineers), professional liability insurance, including prior acts
coverage sufficient to cover any and all claims arising out of the
services, or a retroactive date no later than the date of
commencement of the services, with limits of not less than One
Million Dollars ($1,000,000.00) per claim and Two Million Dollars
($2,000,000.00) annual aggregate. The professional liability
insurance shall be maintained continuously during the term of the
Agreement and so long as the insurance is commercially reasonably
available, for a period not less than the Government Warranty
Period. The professional liability insurance required by this
paragraph shall not contain any exclusions or limitations
applicable to residential projects.






 


The
following general requirements shall apply to all insurance
policies described in this Exhibit.


 



1.            

All liability
insurance policies, except workers compensation insurance, shall be
written on an occurrence basis.






 




 

118








 






 


 


 



2.            

All insurance
policies required hereunder except Workers Compensation and
Employers Liability shall: (i) name the Parties as
“additional insureds” utilizing an ACORD form or
equivalent acceptable to Developer or Substitute Constructing Party
(as applicable), excluding, however, insurance policies of Service
Providers who provide professional services whose insurance
policies do not permit the designation of additional insureds;
(ii) be issued by an insurer authorized in the State of
Colorado; and (iii) provide that such policies shall not be
canceled or not renewed, nor shall any material change be made to
the policy without at least thirty (30) days’ prior
written notice to the Parties. Each additional insured endorsement
(or each policy, by reasonably acceptable endorsement) shall
contain a primary insurance clause providing that the coverage
afforded to the additional insureds is primary and that any other
insurance or self-insurance available to any of the additional
insureds is non-contributing. A waiver of subrogation endorsement
for the workers’ compensation coverage shall be provided in
favor of the Parties.






 



3.            

The liability
insurance policies shall provide that such insurance shall be
primary on a non-contributory basis.






 



4.            

Service Providers
shall provide Developer or Substitute Constructing Party (as
applicable) with certificates, or copies of insurance policies if
request by the Developer, evidencing the insurance coverages
required by this Exhibit in the certificate form described in
Item 2 of this
Exhibit, prior to the commencement of any activity or operation
which could give rise to a loss to be covered by such insurance.
Replacement certificates shall be sent to Developer or Substitute
Constructing Party (as applicable), as policies are renewed,
replaced, or modified.






 



5.            

The foregoing
insurance coverage must be maintained in force at all times during
the construction of the Improvements.






 


 


 




 

119








 






Exhibit
D


to


Amenity
Development Agreement


 


(Budget)


 






 

120








 






Exhibit
E


to


Amenity
Development Agreement


 



JOINDER BY BUILDER

 


THIS
JOINDER TO AMENITY DEVELOPMENT AGREEMENT (this
“Joinder”), dated as of _________________, 201___ (the
“Joinder Date”), is made by
_____________________________________________________
(“Purchaser”), for the benefit of PCY Holdings, LLC, a
Colorado limited liability company (“PCY”) and each
other Builder that is a party to that Amenity Development Agreement
dated _______________, 201__.

 


WHEREAS, PCY, as
seller, and Purchaser, as purchaser, are parties to that certain
Contract for Purchase and Sale of Real Estate (Sky Ranch) dated
___________, 201__ (as amended and assigned from time-to-time, the
“Purchase Agreement”), with respect to the sale of
certain residential building lots located within the Sky Ranch
Development in Arapahoe County, Colorado, and

 


WHEREAS, PCY has
agreed to construct certain park amenities and improvements for the
benefit of the lots identified under the Purchase Agreement to be
funded as provided in the Amenity Development Agreement. PCY and
Purchaser desire that Purchaser become a party to the Amenity
Development Agreement.

 


NOW,
THEREFORE, in consideration of the foregoing premises and for other
good and valuable consideration, PCY and Purchaser hereby agree as
follows:

 



1.            

Any capitalized
terms not defined in this Joinder shall have the meanings ascribed
thereto in the Amenity Development Agreement, which is hereby
incorporated by reference.





 



2.            

By execution of
this Joinder, Purchaser becomes a party to the Amenity Development
Agreement for all purposes and shall be entitled to exercise all of
the rights, and subject to all of the obligations, of the
Additional Builder thereunder. Purchaser shall pay the Additional
Builder’s





 


 




 

121








 






 


Prorata
Share of the Initial Payment and the Final Payment as required by
the terms of the Amenity Development Agreement.

 



3.            

This Joinder shall
inure to the benefit of the Builders and their successors and
assigns under the Amenity Development Agreement.





 


IN
WITNESS WHEREOF, Purchaser has executed this Joinder as of the
Joinder Date.

 


___________________________________,


a
__________________________________


 


 



By:           






 



Name:                      






 



Title:                      








 

122








 







ATTACHMENT 1


to


Amenity
Development Agreement


 


LAND
TITLE GUARANTEE COMPANY Initials
_______


GENERAL
PROVISIONS TO THE ESCROW AGREEMENT Initials
_______


 




1.

Notices.





 


Any
notices required or permitted to be given under the Escrow
Agreement shall have been deemed to have been served:

 




i.

one business day
after the notice is hand delivered with proof of receipt by the
addressee, or





 




ii.

one business day
after transmission by facsimile evidencing confirmation of receipt
by the receiving facsimile machine, or





 




iii.

one business day
after transmission by email evidencing confirmation of receipt by
the receiving email address, or





 




iv.

if reputable
overnight courier (such as United Parcel Service or Federal
Express) is used, on the immediately following business day after
notice is sent for overnight delivery, or





 




v.

if the United
States Mail is used, on the third business day after the notice is
deposited in the United States Mail, postage prepaid;





 


Provided in each
case such notice is addressed to the parties at the addresses given
on the first page of this Escrow Agreement.

 




2.

Reliance
on Notice.





 


Escrow
Agent may act in reliance upon any writing or instrument or
signature which Escrow Agent, in good faith, believes to be
genuine, and may assume the validity and accuracy of any statement
or assertion contained in such a writing or instrument, and may
assume that any person purporting to give any writing, notice,
advice or instruction in connection with the provisions hereof has
been duly authorized so to do.

 




3.

Laws Relating to Unclaimed
Funds.





 


Seller
and Buyer are hereby advised that unclaimed funds may be payable to
the State at some future date pursuant to unclaimed property laws,
and should Escrow Agent pay any such funds held in the Escrow
Deposit, Escrow Agent shall be released from all further
responsibility under the Escrow Agreement and shall not be liable
to any Party so long as such payment was made pursuant to
applicable law.

 




4.

Escrow
Deposit and Interest Earned on Escrow Deposit





 




a.

In the event that
the Escrow Deposit consists partly or entirely of money, then
during the period the Escrow Agent is in possession of the Escrow
Deposit, the money will be deposited in an FDIC insured institution
(the "Institution").





 




b.

Upon receipt of
written direction of the parties along with a completed W-9, funds
will be invested in an interest bearing account.





 




c.

Deposits of
$100,000.00 or more may be directed by the parties hereto to other
types of investments, or the Escrow Agent may invest the Escrow
Deposit in Repurchase Agreements for U.S. Treasury obligations or
other Federal agency issued securities.





 




d.

Escrow Agent shall
not be responsible for maximizing the yield on the Escrow Deposit.
Under no circumstances shall Escrow Agent be liable for loss of
funds due to bank or other Institution failure, including employees
or agents thereof, suspension or cessation of business, or any
action or inaction on the part of the bank or other institution, or
any delivery service transporting funds to and from the
institution.





 




e.

All parties hereto
shall execute and deliver to Escrow Agent all forms required by
federal, state or other governmental agencies relative to taxation
matters and Escrow Agent will file appropriate 1099 or other
required forms.





 




5.

Fees and Expenses of Escrow
Agent.





 




a.

The Escrow Agent
shall be entitled to reimbursement in full, or may demand payment
in advance, for all costs, expenses, charges, fees or other
payments made or to be made by Escrow Agent in the performance of
Escrow Agent's duties and obligations under the Escrow
Agreement.





 




b.

The parties to the
Escrow Agreement are jointly and severally liable for the payment
to Escrow Agent of all fees and expenses. Escrow Agent is hereby
authorized and directed to reimburse to itself in payment of fees
or expenses from any funds in the Escrow Deposit, whether from
principal or interest or both, at any time, and from time to time,
as the same may be due and owing.





 




c.

Escrow Agent is
hereby authorized to withhold any fees or expenses from any
disbursement or distribution of Escrow Deposit to any Party hereto
or to the Clerk of the Court upon interpleader.





 




d.

In the event that
the Escrow Deposit shall consist of documents only and not funds,
Escrow Agent may refuse to distribute any such documents or to
otherwise act under this Agreement until all accrued but unpaid
fees and expenses have been paid in full.





 




6.

Non-liability
of Escrow Agent.





 




a.

Escrow Agent shall
not be liable for any mistakes of fact, or errors of judgment, or
for any acts or omissions of any kind unless caused by the willful
misconduct or gross negligence of Escrow Agent.





 




b.

Escrow Agent shall
not be liable for any taxes, assessments or other governmental
charges which may be levied or assessed upon the Escrow Deposit or
any part thereof, or upon the income therefrom.





 


 




 

123








 






 

 




c.

Escrow Agent may
rely upon the advice of counsel and upon statements of accountants,
brokers or other persons reasonably believed by it in good faith to
be expert in the matters upon which they are consulted, and for any
reasonable action taken or suffered in good faith based upon such
advice or statements





 




7.

Indemnity
of Escrow Agent.






The
Seller and Builders jointly and severally, agree to:




i.

indemnify Escrow
Agent and hold it harmless as to any liability by it incurred by
the Escrow Agent to any other person or persons by reason of this
Escrow Agreement, or in connection herewith except for Escrow
Agent's own willful misconduct or gross negligence,
and








ii.

reimburse Escrow
Agent for all its expenses, including, but not necessarily limited
to attorneys' fees and court costs incurred in connection
herewith.








8.

Request
for Written Instructions.








a.

Escrow Agent may at
any time, and from time to time, request the Seller and Buyer to
provide written instructions concerning the propriety of a proposed
payment of the Escrow Deposit, distribution of documents, or other
action or refusal to act by Escrow Agent.








b.

Should the Seller
and Buyer fail to provide such written instructions within a
reasonable time, Escrow Agent may take such action, or refuse to
act, as it may deem appropriate and shall not be liable to anyone
for such action or refusal to act.








c.

Notwithstanding the
foregoing, should the terms of the Escrow Agreement be complied
with, in the judgment of Escrow Agent, then the Escrow Agent may
disburse any funds, distribute documents, or take such action
without specific further written instructions from any
Party.








9.

Disputes and Interpleader.








a.

In the event of any
dispute between the Parties as to either law or fact, or in the
event any of the parties hereto fail, for any reason, to fully
receipt and acquit the Escrow Agent in writing, Escrow Agent may
refuse, in its discretion, to carry out said escrow instructions or
to deliver any funds, documents, or property in its hand to anyone
and in so doing shall not become liable to demand.








b.

Escrow Agent shall
be entitled to continue, without liability, to refrain and refuse
to act:








i.

until all the
rights of the adverse claimants have been finally adjudicated by a
court having jurisdiction over the Parties and the items affected
hereby, after which time the Escrow Agent shall be entitled to act
in conformity with such adjudication; or








ii.

until all
differences shall have been adjusted by agreement and Escrow Agent
shall have been notified thereof and shall have been directed in
writing signed jointly or in counterpart by the parties and all
persons making adverse claims or demand, at which time Escrow Agent
shall be protected in acting in compliance therewith.








c.

Escrow Agent also
has the right to interplead into a court of competent jurisdiction
at the expense of the Parties.








10.

Resignation of Escrow
Agent.








a.

Escrow Agent may
resign under this Agreement by giving written notice to all of the
parties hereto, effective 30 days after the date of said
notice.








b.

Upon the
appointment by the parties of a new Escrow Agent or custodian, or
upon written instructions to Escrow Agent for other disposition of
the Escrow Deposit, Escrow Agent shall, after retention of its
accrued escrow fees and expenses, if any, shall deliver the Escrow
Deposit within a reasonable period of time as so directed, and
shall be relieved of any and all liability hereunder arising
thereafter.








11.

Applicable Law.






This
Agreement shall be governed by the laws of the State of
Colorado.




12.

Counterparts/Facsimile.





 


The
Escrow Agreement may be executed in any number of counterparts,
each of which when so executed shall constitute the entire
agreement between the Seller and Buyer and may be executed in
facsimile and such facsimile signature shall be accepted as
original signatures. The Seller and Buyer acknowledge and agree
that there are no intended or unintended third party beneficiaries
who may rely upon or benefit from the provisions of this
agreement.


 


 


 


 


 


 




 

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