Blueprint






Exhibit 10.18







EXPORT SERVICE AGREEMENT

 


 

 



between

 


 

 



PURE CYCLE CORPORATION

 


 

 



and

 


 

 



RANGEVIEW METROPOLITAN DISTRICT,

 



ACTING BY AND THROUGH ITS WATER ACTIVITY ENTERPRISE

 


 















TABLE OF CONTENTS



Page

 





 


	


ARTICLE I Definitions

	


2


	


1.1

	


Lowry Range

	


2


	


1.2

	


New Service Agreement

	


2


	


1.3

	


Operating Expenses

	


3


	


1.4

	


Rules and Regulations

	


3


	


1.5

	


Schedule of Service

	


3


	


1.6

	


Wastewater User

	


3


	


1.7

	


Wastewater System

	


3


	


1.8

	


Water User

	


3


	


1.9

	


Water System

	


3


	


ARTICLE II Contract Service Provider

	


3


	


2.1

	


Exclusivity

	


3


	


2.2

	


Service Provider

	


3


	


2.3

	


Additional Consideration

	


4


	


ARTICLE III Representations and Covenants

	


4


	


3.1

	


Lease

	


4


	


3.2

	


New Service Agreements

	


4


	


3.3

	


Conflicts of Interest

	


4


	


3.4

	


Rangeview Administrative Functions

	


4


	


ARTICLE IV Agreements and Service

	


5


	


4.1

	


Customers

	


5


	


4.2

	


Construction

	


5


	


4.3

	


Water Quality

	


6


	


4.4

	


Wastewater System

	


6


	


4.5

	


Rules and Regulations of Rangeview

	


6


	


ARTICLE V Coordination of Lease Assets

	


7


	


ARTICLE VI Ownership, Operation, and Maintenance of
Facilities

	


7


	


ARTICLE VII Obligations of Service Provider

	


7


	


7.1

	


Water System and Wastewater System

	


7


	


7.2

	


Control

	


7


	


7.3

	


Phased Development

	


7


	


7.4

	


Administration

	


7


	


7.5

	


Records

	


7


	


7.6

	


Services

	


8


	


7.7

	


Compliance with Laws

	


8


	


7.8

	


Personnel

	


8


	


7.9

	


Permits and Licenses

	


8


	


7.1

	


Taxes

	


9


	


7.11

	


Financing

	


9








 

-i-







 





 


	


7.12

	


Reporting

	


9


	


7.13

	


Accounting

	


9


	


7.14

	


Schedule of Service

	


9


	


ARTICLE VIII Billing and Rates

	


10


	


8.1

	


Rates

	


10


	


8.2

	


Billing

	


10


	


8.3

	


Renegotiation

	


10


	


8.4

	


Reserves

	


11


	


8.5

	


Reports and Audits

	


12


	


ARTICLE IX Management of Water

	


13


	


ARTICLE X Rights-of-Way

	


13


	


10.1

	


Rights-of-Way

	


13


	


10.2

	


Fees for Rights-of-Way

	


13


	


10.3

	


Condemnation of Land

	


14


	


ARTICLE XI Indemnification

	


14


	


ARTICLE XII Insurance and Bonds

	


14


	


12.1

	


Insurance

	


14


	


12.2

	


Bonds

	


14


	


12.3

	


Bond of Contractors

	


14


	


ARTICLE XIII Term, Default and Termination

	


15


	


13.1

	


Term

	


15


	


13.2

	


Default and Remedies

	


15


	


13.3

	


Service Provider Right of Termination

	


16


	


13.4

	


Termination of New Service Agreement

	


16


	


13.5

	


Compliance with Regulations

	


16


	


13.6

	


Multi-Fiscal Year Obligation

	


16


	


ARTICLE XIV General Provisions

	


16


	


14.1

	


Assignment

	


16


	


14.2

	


Third Party Beneficiaries

	


17


	


14.3

	


Notice

	


17


	


14.4

	


Construction

	


17


	


14.5

	


Entire Agreement

	


17


	


14.6

	


Authority

	


17


	


14.7

	


Copies

	


18


	


14.8

	


Counterparts

	


18


	


14.9

	


Amendment

	


18


	


14.1

	


Compliance with Law

	


18


	


14.11

	


Binding Effect

	


18


	


14.12

	


Severability

	


18








 

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14.13

	


Duty of Good Faith and Fair Dealing; Regular
Consultation

	


18


	


14.14

	


Further Assurance

	


18


	


14.15

	


Governing Law

	


18


	


14.16

	


Arbitration

	


18


	


14.17

	


Litigation and Attorneys’ Fees

	


19


	


14.18

	


No Waiver of Governmental Immunity

	


19


	


14.19

	


Force Majeure

	


19






 

 



Exhibit
A        


Schedule of
Services






 



-iii-








 







EXPORT SERVICE AGREEMENT

 


THIS
EXPORT SERVICE AGREEMENT (the “Agreement”) is entered
into as of the 16 day of June 2017, by and between PURE CYCLE
CORPORATION, a Colorado corporation (“Service
Provider”), and RANGEVIEW METROPOLITAN DISTRICT, a
quasi-municipal corporation and political subdivision of the State
of Colorado, acting by and through its water activity enterprise
(“Rangeview”).

 


RECITALS

 

A. Rangeview is a
special district organized pursuant to Title 32 of the
Colorado Revised Statutes with the power, among others, to supply
water for domestic and other public and private purposes and to
provide complete sanitary sewage collection, transmission,
treatment and disposal services. Rangeview’s water activity
enterprise was established by resolution of the district adopted at
a public meeting of its board of directors on September 11,
1995, and effective as of the date of its adoption.

 

B. Service Provider is
a corporation involved in the acquisition and development of water
and wastewater facilities and systems.

 

C. Rangeview, Service
Provider, and the State of Colorado, acting through the State Board
of Land Commissioners (the “Land Board”), are parties
to Lease Number S-37280, most recently amended and restated on
July 10, 2014 (the “Lease”), pursuant to which
Rangeview and Service Provider have certain water rights as defined
in the Lease.

 

D. Service Provider
and Rangeview are parties to a Service Agreement dated
April 11, 1996, most recently amended and restated on July 10,
2014 (the “Lowry Service Agreement”), pursuant to which
Rangeview granted Service Provider the exclusive right as its agent
to provide water services to surface tenants, occupants,
developers, landowners and all other water users on the Lowry Range
(as defined below), subject to the terms and conditions set forth
in the Lease.

 

E. Service Provider
and Rangeview are parties to a Wastewater Service Agreement dated
January 22, 1997 (the “Lowry Wastewater Service
Agreement”), pursuant to which Rangeview granted Service
Provider the exclusive right as its agent to provide wastewater
service to persons and entities who own real property on the Lowry
Range and in all other property included in Rangeview’s
service area with Service Provider’s prior written consent
and agreement to provide such properties with wastewater
service.

 

F. Service Provider
owns certain water rights, including water rights and water storage
rights it purchased pursuant to the Lease, water rights located in
Arapahoe County, and water rights pursuant to the WISE Project
Financing and Service Agreement between Service Provider and
Rangeview dated November 10, 2014 (the “WISE
Agreement”) relating to the Water Infrastructure Supply
Efficiency Partnership known as “WISE”, and may acquire
additional water rights for use as it deems desirable.

 

G. Rangeview has
acquired and anticipates acquiring rights to provide water and/or
wastewater service to governmental entities, including cities,
towns, and special districts, and property owners, who may or may
not have sufficient water supplies, financial capabilities, design,
engineering, construction, or operational capabilities to construct
Water Systems or Wastewater Systems (each as defined below) and who
may require services that Service Provider is capable of
providing.

 



 







 





 

H. Rangeview is
desirous of expanding its relationship with Service Provider in
exchange for Service Provider’s commitment to provide water
and wastewater service, as applicable, to customers pursuant to
this Agreement and has determined that it is in the best interest
of Rangeview to enter into this Agreement with Service Provider for
the following reasons, among others:

 

(1) Service Provider
has a long-term relationship with Rangeview and is the service
provider for the Lowry Range;

 

(2) It is more
efficient and economical to have only one service provider with
respect to Rangeview’s development of Water and Wastewater
Systems to provide water and wastewater service for customers on
and off the Lowry Range;

 

(3) It is desirable to
limit the number of parties jointly using and expanding the Water
and Wastewater Systems; and

 

(4) Service Provider
has expertise in the development and financing of water and
wastewater facilities and systems.

 

I. The parties desire
to enter into this Agreement to provide the terms and conditions
under which Service Provider will act as Rangeview’s contract
service provider to design, permit, finance, construct, operate and
maintain Water Systems to provide water service to Water Users and
Wastewater Systems to provide wastewater service to Wastewater
Users.

 


AGREEMENT

 


In
consideration of the foregoing, the covenants and agreements set
forth herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the
parties hereby agree as follows:

 



ARTICLE I 


Definitions

 


As used
in this Agreement, the following terms shall have the meanings set
forth in this Agreement or as referenced below:

 

1.1 Lowry Range . “Lowry
Range” shall mean the approximately 24,567.21 acres in
Arapahoe County, Colorado as more particularly described in the
Lease.

 

1.2 New Service Agreement
.
“New Service Agreement” shall mean the agreement(s) set
forth on the Schedule of Service that provides for the extension of
(i) water services to one or more specified Water Users and/or
(ii) wastewater services to one or more specified Wastewater
Users.



 

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1.3 Operating Expenses
.
“Operating Expenses” shall mean all actual maintenance
and operating costs incurred by Rangeview in discharging
Rangeview’s obligations to provide water service to Water
Users and wastewater services to Wastewater Users.

 

1.4 Rules and Regulations
.
“Rules and Regulations” shall mean the rules and
regulations of Rangeview as adopted and amended from time to
time.

 

1.5 Schedule of Service
.
“Schedule of Service” shall mean Exhibit A attached hereto, as it may be
amended from time to time by the parties.

 

1.6 Wastewater User
.
“Wastewater User” shall mean any user receiving service
from a Wastewater System pursuant to this Agreement.

 

1.7 Wastewater System
.
“Wastewater System” shall mean the wastewater
transmission, treatment and disposal facilities, including re-use
and land application facilities, and all other components of a
wastewater system or systems to provide wastewater service to
Wastewater Users.

 

1.8 Water User . “Water
User” shall mean any user of potable or non-potable water
provided pursuant to this Agreement.

 

1.9 Water System
.
“Water System” shall mean wells, intake lines, pumps,
treatment facilities, transmission systems, storage facilities and
all other components of a water supply system or systems to provide
water to Water Users.

 



ARTICLE II 


Contract Service
Provider

 

2.1 Exclusivity . Service Provider
shall have the sole and exclusive right to be Rangeview’s
water and wastewater service provider. The parties acknowledge that
if Rangeview acquires additional water, such water shall be subject
to the provisions of this Agreement. Further, if Rangeview acquires
additional water or wastewater service rights, such water or
wastewater service rights shall be subject to the terms of this
Agreement unless determined otherwise after compliance with
Section 4.1 and Section 14.16.

 

2.2 Service Provider
.
During the term of this Agreement, Rangeview hereby grants to
Service Provider the sole and exclusive right as its contract
service provider to (a) market, lease, license, sell or otherwise
transfer, and withdraw and treat in and through the Water Systems
covered by this Agreement any water supplies owned or controlled by
Rangeview; (b) collect wastewater from Wastewater Users and to
market, lease, license, sell or otherwise transfer, and treat such
wastewater in and through the Wastewater Systems covered by this
Agreement; (c) design, permit, finance, construct, operate and
maintain Water Systems and Wastewater Systems to provide water
services to Water Users and wastewater services to Wastewater
Users, respectively; and (d) provide other requested water and
wastewater provider services as required by Rangeview. To the
extent, if any, that the terms of this Agreement are contrary to,
or inconsistent with, the terms of the Lease relating to assets
covered under the Lease, the provisions of the Lease shall control
and govern the conduct of the parties. Rangeview hereby grants to
Service Provider the sole and exclusive right and license to
market, lease, license, sell or otherwise transfer and to collect,
withdraw and treat in and through (i) the Water Systems
covered by this Agreement any water supplies owned or controlled by
Service Provider and (ii) the Wastewater Systems covered by
this Agreement any wastewater owned or controlled by Service
Provider.



 

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2.3 Additional Consideration
. Any
additional consideration paid by Service Provider in exchange for
the exclusive rights granted hereunder with respect to a particular
New Service Agreement shall be set forth on the Schedule of
Service. Rangeview acknowledges that Service Provider has paid
Rangeview the amount(s) set forth on the Schedule of Service in
exchange for the exclusive rights granted hereunder.

 



ARTICLE III 


Representations and
Covenants

 

3.1 Lease . Rangeview
represents and warrants that all terms and conditions of the Lease
have been complied with by it. Rangeview shall not enter into any
amendments to the Lease that affect Service Provider’s rights
and/or obligations under this Agreement without Service
Provider’s prior written approval. Rangeview agrees that it
will comply with the terms of the Lease, including paying all rents
and royalties due under the Lease, and maintain it in effect during
the term of this Agreement. It shall not be a breach of this
covenant if Rangeview’s failure to maintain the Lease in
effect is due to a breach of this Agreement or the Lease by Service
Provider.

 

3.2 New Service Agreements
.
Rangeview represents and warrants that all terms and conditions of
each New Service Agreement set forth on the Schedule of Service
have been complied with by it. Rangeview shall not enter into any
amendments to a New Service Agreement that affect Service
Provider’s rights and/or obligations under this Agreement
without Service Provider’s prior written approval. Rangeview
agrees that it will comply with the terms of each New Service
Agreement and maintain it in effect during the term of this
Agreement. It shall not be a breach of this covenant if
Rangeview’s failure to maintain a New Service Agreement in
effect is due to a breach of this Agreement or a New Service
Agreement by Service Provider.

 

3.3 Conflicts of Interest
. The
parties hereto acknowledge that certain members of the board of
directors of Rangeview are officers, directors or employees of
Service Provider and may have conflicts of interest with regard to
this transaction. Rangeview represents and warrants that such board
members have, pursuant to § 24-18-110, C.R.S., filed all
necessary disclosure statements with Rangeview and the Colorado
Secretary of State. Service Provider represents and warrants that
the members of Service Provider’s board of directors who also
serve on the Rangeview board of directors have fully disclosed such
interests to the disinterested board members of Service Provider
prior to obtaining board approval of this Agreement and those
members with potential conflicts have abstained from voting on this
Agreement.

 

3.4 Rangeview Administrative
Functions . Rangeview shall
be responsible for performing at its sole expense all functions and
reporting obligations imposed upon it as a local government entity
and political subdivision of the State of Colorado. Such functions
include without limitation, compliance with budget, audit,
election, open meetings, public records, conflict of interest
disclosure and management laws, and Article X, Section 20 of
the Colorado Constitution. Rangeview shall further be solely
responsible for performing customer relations functions, adopting
and amending the Rules and Regulations, including establishing
rates, fees and charges imposed by it upon Water and Wastewater
Users, and supervising tap sales. Rangeview shall have primary
responsibility for the administration and enforcement of the Rules
and Regulations, design standards, easements and service and main
extension agreements, but shall coordinate with Service Provider in
the performance of these functions.



 

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ARTICLE IV


Agreements and
Service

 

4.1 Customers . Rangeview or
Service Provider, as the contract service provider, may negotiate
and enter into agreements to lease, license, sell or otherwise
transfer and withdraw, collect or treat any water or wastewater
available to Rangeview to provide water or wastewater service
subject to the terms of this Agreement. Rangeview further agrees
that Service Provider may, at its option, negotiate and enter into
agreements to lease, license, sell or otherwise transfer, withdraw,
collect or treat any water or wastewater available to Service
Provider to provide water or wastewater service subject to the
terms of this Agreement. Each party shall make available to the
other copies of any such agreements twenty-one (21) days prior to
execution (a draft being acceptable if finals are not available).
The receiving party shall review such information for the sole
purposes of determining whether (i) such contract is commercially
reasonable, (ii) such contract is in compliance with prudent water
provider practice in Colorado, and (iii) such contract is in
compliance with this Agreement. The receiving party shall be deemed
to have consented to the contract unless, within fourteen (14) days
of the date of delivery of the contract, it delivers to the other
party a notice specifically stating the reasons that it objects to
such contract based on the criteria stated in this section 4.1.
Disputes, if any, as to matters under this Section will be
submitted to arbitration pursuant to Section 14.16, and a
hearing shall be held within fourteen (14) days of selection of an
arbitrator or arbitrators, as applicable. Any undisputed contract
shall become a New Service Agreement and shall be added to the
Schedule of Service. Whether a disputed contract becomes a New
Service Agreement that is added to the Schedule of Service will be
resolved pursuant to Section 14.16.

 

4.2 Construction
.
Service Provider shall be responsible for designing, permitting,
financing, and managing the construction of each Water System and
Wastewater System owned by Rangeview, pursuant to Rangeview’s
Rules and Regulations to provide water or wastewater service to
meet the demands of Water Users and Wastewater Users, as
applicable, and shall do so in a commercially reasonable time and
manner consistent with (i) prudent water or wastewater service
provider practices in Colorado, (ii) the terms of any applicable
New Service Agreement, and (iii) the terms of any other applicable
agreement to which Rangeview and Service Provider are parties, and
subject to the receipt of all necessary governmental approvals.
Upon receiving a written request for water or wastewater service
from a Water User or Wastewater User, Rangeview shall give Service
Provider written notice of such request. Within thirty (30) days
after receipt of all information necessary to establish the service
needs of the Water or Wastewater User, Rangeview and Service
Provider shall establish a construction schedule identifying the
scope of improvements and the timing of construction for such User
(“Construction Schedule”). Upon execution of an
agreement which secures the commitment of such Water or Wastewater
User to purchase taps or receive water and/or wastewater service,
as applicable, which agreement shall indicate, if applicable, that
Rangeview’s commitment for service is subject to the
completion of the improvements identified in the Construction
Schedule, Service Provider shall design, permit, finance, and
manage the construction of the identified improvements pursuant to
Rangeview’s Rules and Regulations and pursuant to the time
frame set forth in the Construction Schedule. Once construction is
completed, Service Provider will provide Rangeview with copies of
the plans for the improvements as built. Service Provider shall
cause the Water System and/or Wastewater System to be completed in
a workmanlike manner and in compliance with the plans approved by
Rangeview, which approval will not be unreasonably withheld or
delayed. Service Provider shall make available to Rangeview copies
of any and all construction contracts and related documents
concerning the Water System or Wastewater System. Twenty-one (21)
days prior to the execution of any construction contract related to
either System in excess of One Million Dollars ($1,000,000),
Service Provider shall provide Rangeview with a copy of such
contract (a draft being acceptable if finals are not available) and
information regarding how the improvements will be financed and how
such financing obligation will be paid. Rangeview shall review such
information for the sole purposes of determining whether such
contract is commercially reasonable and in compliance with
governing laws and consistent with prudent water or wastewater
service provider practices in Colorado, as applicable, and whether
the project is fiscally viable. Rangeview shall be deemed to have
consented to the contract unless, within fourteen (14) days of the
date of delivery of the contract, it delivers to Service Provider a
notice specifically stating the reasons for its determination that
the proposed contract is not commercially reasonable, is not in
compliance with governing laws or with prudent water or wastewater
service provider practices in Colorado, as applicable, or the
project is not fiscally viable. Disputes, if any, as to matters
under this Section will be submitted to arbitration pursuant to
Section 14.16, and a hearing shall be held within fourteen (14)
days of selection of an arbitrator or arbitrators, as
applicable.



 

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4.3 Water Quality
.
Service Provider shall cause the Water System to be designed to
comply with applicable requirements of the Colorado Primary
Drinking Water Regulations, 5CCR 1002-11 or such other similar or
successor laws (the “Primary Drinking Water
Regulations”) in effect at the time the Water System is
constructed. In addition, Service Provider shall operate and
maintain the Water System, and to the extent necessary, modify or
upgrade the Water System, such that the water provided through the
Water System complies with the Primary Drinking Water Regulations;
provided, however, that it shall not be a default of this Section
if at any time the water fails to comply with the requirements of
the Primary Drinking Water Regulations, Service Provider cures such
noncompliance within thirty (30) days of learning of such
noncompliance, or if more than thirty (30) days is reasonably
required to cure such noncompliance, Service Provider commences to
correct the problem within thirty (30) days and thereafter
prosecutes the same to completion with reasonable
diligence.


 

4.4 Wastewater System.
 
Service Provider shall cause the Wastewater System to be designed,
and shall operate and maintain the Wastewater System, in compliance
with applicable regulatory requirements. It shall not be a default
of this Section if the Service Provider cures such noncompliance
within thirty (30) days of learning of such noncompliance, or if
more than thirty (30) days is reasonably required to cure such
noncompliance, Service Provider commences to correct the problem
within thirty (30) days and thereafter prosecutes the same to
completion with reasonable diligence.


 

4.5 Rules and Regulations of
Rangeview . All construction,
operation, and maintenance of the Water System and Wastewater
System shall be performed in accordance with the Rules and
Regulations.



 

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ARTICLE V 


Coordination of Lease
Assets

 


Rangeview and
Service Provider hold certain rights to water, storage, and
infrastructure capacities pursuant to the terms and conditions of
the Lease, and the parties shall coordinate the use of any Lease
assets subject to the party’s respective rights to such
assets and subject to the provisions of the Lease

 



ARTICLE VI 


Ownership, Operation, and
Maintenance of Facilities

 


Rangeview shall own
the Water System and Wastewater System, except as otherwise
specified in a New Service Agreement. Service Provider shall
operate, maintain, repair, replace and administer the Water System
and the Wastewater System in a commercially reasonable manner
consistent with prudent water or wastewater service provider
practices in Colorado, as applicable, and in accordance with this
Agreement and any applicable New Service Agreement.

 



ARTICLE VII 


Obligations of Service
Provider

 

7.1 Water System and Wastewater
System . At its cost,
Service Provider shall provide a Water System for Water Users and a
Wastewater System for Wastewater Users in a commercially reasonable
manner consistent with prudent water or wastewater service provider
practices in Colorado, as applicable, in order to meet the demands
of Water Users and Wastewater Users. In addition, Service Provider
shall install meters, in accordance with the Rules and Regulations,
capable of measuring the quantity of water delivered to Water
Users.

 

7.2 Control . Service Provider
shall have the responsibility for and control over the details and
means for providing the services hereunder subject to the
requirement that the services be provided in a commercially
reasonable time and manner consistent with prudent water or
wastewater service provider practices in Colorado, as applicable,
and in accordance with this Agreement and the Rules and
Regulations.

 

7.3 Phased Development
.
Service Provider may phase the installation of the Water System and
Wastewater System in accordance with the needs of Water Users and
Wastewater Users. Service Provider shall have no obligation
whatsoever to install or create access to a Water System or
Wastewater System in advance of the need for such facilities, such
need to be based upon commercially reasonable standards for similar
development projects and the existence of agreements with Water
Users or Wastewater Users, as applicable, providing for payment for
such services.

 

7.4 Administration
.
Service Provider shall operate, maintain and administer the Water
System and Wastewater System, including, but not limited to issuing
taps on behalf of Rangeview and billing all charges for water and
wastewater services in accordance with Article VIII and any
applicable New Service Agreements.

 

7.5 Records . Service Provider
shall keep and maintain accurate files of all contracts concerning
the Water System and Wastewater System and all other records
necessary to the orderly administration and operation of the Water
System and Wastewater System which are required to be kept by
local, state or federal statutes, ordinances or regulations.
Service Provider shall provide to Rangeview a copy of each executed
contract concerning the Water System or Wastewater System within
five business days.



 

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7.6 Services . Service Provider
shall employ or contract with such qualified engineers, operators,
and administrative and other personnel as it deems appropriate, to
perform the duties of operating the Water System and Wastewater
System, including the following:

 

(a) cooperating with
Rangeview and other state, county, local and federal authorities in
providing such tests, performing such activities, and maintaining
such records as are necessary to maintain compliance with
appropriate governmental standards;

 

(b) supervising the
connection of lines to private development and recording such
connections for billing proposes in accordance with Section
8.2;

 

(c) coordinating
construction with various utility companies to ensure minimum
interference with the Water System and Wastewater
System;

 

(d) performing all
maintenance and repairs, or otherwise providing for the services of
contractors, necessary to maintain and continue the efficient
operation of the Water System and Wastewater System;
and

 

(e) providing for
emergency preparedness to provide response to emergencies,
including, but not limited to line breaks, freeze-ups,
obstructions, backups, mechanical problems, violations of water or
effluent treatment standards, and the interruption of services from
other causes.

 


To the
extent Service Provider engages contractors, it shall require such
contractors to maintain bonds (or other acceptable sureties or
guaranties) and insurance, including workers’ compensation
insurance, in compliance with applicable laws and the Rules and
Regulations. Such bonds and insurance shall name Rangeview, and any
third party reasonably requested by Rangeview, as additional
insured.

 

7.7 Compliance with Laws
.
Service Provider shall comply with the Rules and Regulations and
all applicable government statutes, regulations, ordinances,
permits and orders, and, if applicable, Colo. Rev. Stat.
§24-91-103, 103.5 and 103.6, in its performance under this
Agreement.

 

7.8 Personnel . Service Provider
shall engage Certified Water Professionals holding appropriate
levels of certification to act as Certified Operator(s) in
Responsible Charge for the Water System and the Wastewater System
in accordance with and as those terms are defined in Regulation No.
100 of the Colorado Department of Public Health and Environment or
any successor requirements of the State of Colorado.

 

7.9 Permits and Licenses
.
Service Provider shall, at its own expense, apply for and obtain
all necessary building, occupancy, well and other permits, licenses
and authorizations which may be required by any governmental entity
that has jurisdiction over the operations to be performed by
Service Provider pursuant to this Agreement. Rangeview shall
cooperate with and provide such reasonable assistance to Service
Provider, as Service Provider may request in obtaining such
authorizations. All well permits shall be in the name of the owner
of the water rights for whom the well permits are filed, and
Service Provider shall demonstrate it has the lawful authority to
use the water rights.



 

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7.10 Taxes . Service Provider
shall be solely responsible for and shall pay all taxes, fees,
charges and assessments, if any, in connection with work or the
materials on facilities it will own which are to be utilized in
accomplishing the activities of Service Provider pursuant to this
Agreement.

 

7.11 Financing . Service Provider
shall be responsible for financing its obligations hereunder with
the funds it receives pursuant to this Agreement or from such other
sources as it deems desirable subject to Section 4.2 hereof and the
terms of any applicable New Service Agreement.

 

7.12 Reporting . In addition to
the reports required pursuant to Section 8.5, Service Provider
agrees to provide Rangeview with annual budgets and business plans
with respect to the Water System and Wastewater System and such
other information as Rangeview may reasonably request in order to
assure itself that the demands of Water Users and Wastewater Users
are being adequately provided for and to assist Rangeview in its
long-term planning efforts. Service Provider shall also supply
Rangeview with such information as Rangeview may reasonably require
to comply with its obligations to state, county, local and federal
authorities, including, for example, the results of tests on the
quality of the water and information concerning compliance with
health and safety regulations.

 

7.13 Accounting . Service Provider
shall prepare and maintain records reflecting or recording costs of
service, both for capital development and for operations and
administration expenses, for the Water System and the Wastewater
System, in accordance with accounting principles generally accepted
in the United States of America (“GAAP”) for state and
local governments as prescribed by the Governmental Accounting
Standards Board, as now or hereafter constituted, or if GAAP is no
longer available or appropriate, in accordance with other generally
accepted water and wastewater utility cost accounting standards
designated by the parties. Such records shall be available during
normal business hours for inspection and copying by Rangeview.
Service Provider shall ensure that any contract or other
arrangement it makes with a third person to perform capital
development or operations and administration functions assumed by
Service Provider hereunder expressly imposes this same requirement
upon such person for the benefit of Rangeview. Disputes, if any, as
to the appropriate cost accounting standards to be followed will be
submitted to arbitration pursuant to
Section 14.16.

 

7.14 Schedule of Service
. To
the extent Rangeview has obligations under a New Service Agreement
related to the services to be performed by Service Provider under
this Agreement, Service Provider agrees to provide the services
hereunder in conformance with the applicable terms of the New
Service Agreement, and Service Provider shall not take any action
or omit to take any action that would cause Rangeview to be in
breach of any New Service Agreement.

 



 

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ARTICLE VIII 


Billing and Rates

 

8.1 Rates . Unless otherwise
established in a New Service Agreement, Rangeview shall establish
tap fees, usage charges, service charges, and other rates, fees and
charges to be imposed upon Water Users and Wastewater Users in
accordance with the Rules and Regulations.

 

8.2 Billing

 

(a) Unless otherwise
provided in a New Service Agreement, (i) Service Provider
shall read the meters and bill the Water Users for water services
provided hereunder, including all tap fees, usage charges, and
service charges, and (ii) Service Provider shall bill the
Wastewater Users for wastewater services hereunder, including all
system development fees and service charges; in each case on behalf
of Rangeview and in accordance with the Rules and Regulations. The
bills shall provide that payment shall be made by Water Users and
Wastewater Users to Rangeview at an address designated by
Rangeview.

 

(b) Rangeview shall be
responsible for collection efforts on delinquent accounts and will
establish and maintain policies and procedures encouraging prompt
and vigorous collection of delinquent accounts.

 

(c)   After
deducting the amount required to be paid or accrued to pay the
royalties required for water governed under the Lease, Rangeview
shall pay Service Provider on or before the 15th day of each month
one hundred percent (100%) of tap fees and ninety-eight percent
(98%) of all remaining amounts collected by Rangeview from Water
Users in the previous month. To the extent necessary to enable
Rangeview to determine royalties due under the Lease, Service
Provider shall provide Rangeview with a written report to enable
Rangeview to distinguish which payments are for water governed
under the Lease and of such bills, which are to Title 32 water
districts or similar municipal entities supplying water for public
use (“Public Entities”).

 

(d) Rangeview shall pay
Service Provider on or before the 15th day of each month
100% of wastewater system development fees and ninety percent (90%)
of all remaining amounts collected by Rangeview from Wastewater
Users in the previous month.

 

(e) Each payment by
Rangeview for system development fees pursuant to Sections 8.2(c)
and (d) above shall be accompanied by a written report from
Rangeview stating the service address or other description of the
licensed premises for which the water and/or wastewater system
development fees were paid, the number of equivalent taps licensed
for each premise, and the amount of the system development fees
collected for each licensed premise.

 

8.3 Renegotiation
. The
parties acknowledge that the administrative and operating costs of
Rangeview and Service Provider with respect to the water and
wastewater service to be provided to Water Users and Wastewater
Users are unknown. Therefore, notwithstanding the provisions of
Section 8.2, if the percentage of water and wastewater fees and
charges allocable to each party pursuant to Section 8.2 are
insufficient to cover the respective parties’ costs relating
to the provision of water service or wastewater service, as
applicable, pursuant to this Agreement, including, in each case,
without limitation, the proportionate share of each party’s
reasonable general, legal, administrative, engineering, regulatory
compliance, and long-term planning costs attributable to provision
of water service or wastewater service, as applicable, Service
Provider and Rangeview shall negotiate in good faith, within ninety
(90) days after the insufficiency is reasonably claimed by either
party, an amendment to Section 8.2 which provides each party
with sufficient revenues from this Agreement to cover its costs
related to the provision of water or wastewater service, as
applicable, or amend the rate structure so that additional rate
revenues are generated. During any period of renegotiation, each
party shall continue to perform its obligations under this
Agreement. Disputes as to an appropriate amendment to provide
either party with sufficient rate revenues under Section 8.2
or to amend the rate structure in the Rules and Regulations will be
settled by arbitration pursuant to Section 14.16 of this
Agreement.



 

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8.4 Reserves.

 

(a) Rangeview shall
utilize the revenues retained by it pursuant to Section 8.2(c) and
(d) and, any other revenues retained by it, (i) to pay proper and
necessary expenses related to the functions of Rangeview, (ii) to
establish a fund for Rangeview’s budget for the following
calendar year, (iii) to establish an operating reserve fund in an
amount consistent with prudent water service provider practices in
Colorado and conforming with applicable statutory requirements, and
(iv) to establish any operating reserve required by any New
Service Agreement. The operating reserve funds shall be
continuously maintained and may be utilized by Rangeview solely for
paying lawful obligations relating to the provision of water and
wastewater service to Water Users and Wastewater Users. The
obligations of Rangeview with respect to the budget and operating
reserve fund required by subsection (ii) and (iii) above are
not cumulative with any budget and operating reserve fund
requirements included in other agreements between the parties with
respect to water and/or wastewater services, including, but not
limited to the Lowry Service Agreement and the Lowry Wastewater
Service Agreement. Thus, Rangeview need not establish duplicate
budget funds and need only establish one operating reserve fund for
the highest percentage of Operating Expenses required by any
agreement between the parties. The obligations of Rangeview
pursuant to subsection (iv) are exclusive to and allocated
pursuant to the revenues derived from this Agreement and shall not
affect and shall not be reduced or limited by reserves or funds
accumulated by Rangeview under subsections (ii) or (iii)
or derived from or required by other agreements entered into
by Rangeview for purposes that are outside of the terms of this
Agreement.

 

(b) Service Provider
agrees that if and to the extent at any time monies are not
available to Rangeview to fund the operating reserve which
Rangeview is required to maintain pursuant to a New Service
Agreement or if monies in such operating reserve are withdrawn (for
a purpose permitted by a New Service Agreement) such that the
amount of the operating reserve drops below the amount which
Rangeview is required to maintain pursuant to a New Service
Agreement and such operating reserve cannot reasonably be expected
to be reestablished from anticipated income to Rangeview within one
year, then within thirty (30) days of receipt of notice from
Rangeview of such fact, Service Provider shall deliver funds to
Rangeview sufficient to replenish the operating reserve fund to the
level required pursuant to the New Service Agreement.
Notwithstanding the fact that the operating reserve can reasonably
be expected to be reestablished within one year, if this Service
Agreement terminates during such one-year period, Service Provider
agrees to deliver funds to Rangeview sufficient to replenish the
operating reserve fund to the level required pursuant to a New
Service Agreement at the time this Agreement terminates. If Service
Provider has given notice to Rangeview pursuant to Section 13.4 of
Service Provider’s election to terminate this Agreement, any
use by Rangeview of the reserve fund in a manner which would cause
Service Provider to be required to replenish the fund pursuant to
the foregoing sentence because the termination date of this
Agreement will occur sooner than the date on which the reserves are
reasonably expected to be reestablished shall require the prior
written consent of Service Provider, which consent shall not be
withheld to the extent it is necessary to make such expenditure at
that time.



 

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(c) Any dispute as to
the necessity of an expenditure or whether the operating reserve
fund can reasonably be expected to be reestablished from
anticipated income within one year shall be submitted to
arbitration pursuant to Section 14.16 of this
Agreement.

 

(d) Service Provider
shall, in consideration of reasonable industry practice, accumulate
or make provisions for an adequate capital reserves for repair and
replacement of the Water System and Wastewater System. Service
Provider shall establish a methodology for calculating the
appropriate capital reserve amount. Upon termination of this
Agreement, all amounts accumulated for capital reserves shall be
transferred to and become the property of Rangeview.

 

8.5 Reports and
Audits.

 

(a) Within twenty-five
(25) days after the end of each calendar year, or within such other
time period as may be set forth in the New Service Agreements,
during the term of this Agreement, Service Provider shall deliver a
report to Rangeview which specifies the quantity of water per New
Service Agreement (including any recharged or stored water)
delivered by Service Provider and the amount of such water removed
from any aquifer and such other information as may be necessary in
order to enable Rangeview to comply with its reporting
obligations.

 

(b) Service Provider
shall prepare and keep full, complete, and proper books, records
and accounts of all water (including any recharged or stored water)
sales or dispositions and shall document such transactions as may
be required by law. Said books, records, and accounts of Service
Provider shall be open at all reasonable times, upon three (3) days
prior written notice, to the inspection of Rangeview and its
representatives, and upon ten (10) days prior written notice,
Service Provider shall cooperate and produce such documents as may
be required by a lawful request presented to Rangeview pursuant to
the Colorado Open Records Act. Rangeview may, upon no less than
fourteen (14) days’ prior written notice to Service Provider,
cause a partial or complete audit to be made at Rangeview’s
expense by an auditor selected by Rangeview of the entire records
and operations of Service Provider for a five (5) year period
preceding the date of the audit relating to water use pursuant to
this Agreement. Within fourteen (14) days following receipt of such
a notice, Service Provider shall make available to the auditor the
books and records the auditor reasonably deems necessary or
desirable for the purpose of making the audit. If the results of
the audit reveal a deficiency in the amounts paid by Rangeview to a
third party as a result of inaccurate reports provided by Service
Provider to Rangeview, then Service Provider shall refund the
revenues it received from Rangeview under Section 8.2 which
should have been paid by Rangeview to such third party, together
with interest thereon at the rate of two percent (2%) per month
from the date or dates such amounts should have been paid to the
third party. If such inaccuracies resulted in a deficiency to the
third party in excess of two percent (2%) of the amounts previously
computed by Rangeview for the period covered by the audit, then
Service Provider shall also pay the actual cost of the
audit.



 

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(c) Rangeview shall
prepare and keep full, complete, and proper books, records and
accounts of all collections with respect to water (including any
recharged or stored water) sales or dispositions and shall document
such transactions as may be required by law. Said books, records,
and accounts of Rangeview shall be open at all reasonable times to
the inspection of Service Provider and its representatives who may
also, at Service Provider’s expense, audit, copy or extract
all or a portion of said books, records, and accounts for a period
of five (5) years after the date such books, records and
accounts are made. Service Provider may, upon fourteen (14)
days’ prior written notice to Rangeview, cause a partial or
complete audit to be made at Service Provider’s expense, by
an auditor selected by Service Provider, of the entire records and
operations of Rangeview relating to water revenue collections
pursuant to this Agreement. Within fourteen (14) days following
receipt of such a notice, Rangeview shall make available to the
auditor the books and records the auditor deems necessary or
desirable for the purpose of making the audit. Any deficiency in
the payment of amounts due Service Provider pursuant to Section 8.2
determined by such audit shall be immediately due and payable by
Rangeview together with interest thereon at the rate of two percent
(2%) per month from the date or dates such amounts should have been
paid. If such deficiency is in excess of two percent (2%) of the
amounts previously computed by Rangeview for the period covered by
the audit, then Rangeview shall also pay the actual cost of the
audit, at the time the deficiency is paid.

 



ARTICLE IX 


Management of
Water

 


All use
of water by Service Provider hereunder, including any re-use or
successive use, shall be done in a commercially reasonable manner
consistent with prudent water service provider practices in
Colorado in accordance with the decrees adjudicating such water and
in accordance with applicable New Service Agreements.

 



ARTICLE X 


Rights-of-Way

 

10.1 Rights-of-Way
.
Rangeview shall use its best efforts to obtain licenses within
public rights-of-way and easements reasonably necessary to perform
the services contemplated by this Agreement. To the extent
rights-of-way on or under the Lowry Range are reasonably necessary
to enable Service Provider to perform the services contemplated by
this Agreement, Service Provider shall notify Rangeview, and
Rangeview shall file a request for the right-of-way with the Land
Board in accordance with the Lease. Upon grant of a right-of-way by
the Land Board, Rangeview shall promptly notify Service Provider
and, to the extent necessary to enable Service Provider to perform
its services hereunder, Rangeview shall grant a license to Service
Provider to use the rights-of-way granted by the Land
Board.

 

10.2 Fees for Rights-of-Way
.
Service Provider shall pay the costs (including, if applicable,
legal and engineering fees) associated with obtaining licenses
within public rights-of-way or easements necessary for the Water
System.



 

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10.3 Condemnation of Land
. Upon
Service Provider’s request, Rangeview agrees to consider and
use best efforts to utilize its governmental powers of condemnation
if such condemnation is reasonably necessary to enable Service
Provider to perform the services contemplated by this Agreement.
Rangeview agrees to grant Service Provider a right-of-way, easement
or license in such condemned property in such form as is reasonable
and appropriate for the services to be conducted or facilities to
be constructed on the property. Service Provider shall be
responsible for the costs associated with Rangeview’s
condemnation of such land. Nothing in this section 10.3 shall be
construed as a delegation of Rangeview’s governmental powers
to Service Provider, and Rangeview shall retain sole judicial and
legislative discretion in regard to such matters.

 



ARTICLE XI 


Indemnification

 


As
between Service Provider and Rangeview, each party shall indemnify
and hold harmless the other, to the extent permitted by law,
against and from all liabilities, claims and demands, settlement or
litigation expenses, and related attorneys’ fees (i) for
personal injury or property damage arising out of, or caused by,
any act or omission of such party, its contractors, agents or
employees or (ii) relating to liens or claims of right to
enforce liens arising from actions of such party, its contractors
and agents. The party whose actions caused such liens to arise
shall promptly cause any such lien to be removed notwithstanding
the fact that such party may believe that there is a valid defense
to any such claim. Such party shall retain the right to pursue any
claims against the person filing the lien after any such lien is
removed.

 



ARTICLE XII 


Insurance and
Bonds

 

12.1 Insurance . Service Provider
shall at all times carry insurance in amounts and with carriers
acceptable to Rangeview for workers’ compensation coverage
fully covering all persons engaged in the performance of this
Agreement in accordance with Colorado law, and for public liability
insurance covering death and bodily injury with limits of not less
than $1,500,000 for one person and $5,000,000 for any one accident
or disaster, and property damage coverage with limits of not less
than $500,000, which insurance shall name Rangeview and any other
party reasonably requested by Rangeview as additional
insureds.

 

12.2 Bonds . No operations are
to be commenced until Service Provider has arranged for good and
sufficient bonds, or other acceptable sureties or guaranties,
consistent with any applicable governmental requirements, including
the Rules and Regulations, and listing Rangeview and any other
required parties as a coinsured, in an amount prescribed by the
applicable governmental requirements to secure the payment for
damages, losses or expenses caused by Service Provider as a result
of its operations.

 

12.3 Bond of Contractors
. Bonds
provided by contractors for construction activities to Service
Provider shall list Rangeview and any other required parties as
coinsureds. As long as such bonds otherwise comply with Section
12.2 above and list Rangeview and all other required parties as
coinsureds, the contractors shall not be required to obtain any
other bonds for Rangeview.



 

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ARTICLE XIII 


Term, Default and
Termination

 

13.1 Term . This Agreement
shall commence on the date first entered above and, unless sooner
terminated pursuant to this Article, shall expire on the day that
the last New Service Agreement set forth on the Schedule of Service
expires.

 

13.2 Default and
Remedies.

 

(a) The following
events shall constitute events of default under this
Agreement:

 

(i) The institution by
or against a party of proceedings under any bankruptcy law or
insolvency act or for dissolution, or the appointment of a receiver
or trustee for all or substantially all of the property of a party,
which proceeding is not dismissed or receivership or trusteeship is
not vacated within sixty (60) days after such institution or
appointment; provided, however, that if a party seeks to dissolve
pursuant to C.R.S. § 32-1-701, et  seq., as amended, and (i) it
notifies the other party in writing concurrently with filing the
application for dissolution, and (ii) the plan for dissolution
shall include provisions for continuation of this Agreement with a
responsible party acceptable to the other party being substituted
as a party to this Agreement, and such substituted party assumes
all obligations and rights of the dissolving party hereunder, then
such dissolution shall not be a default;

 

(ii) The
taking of the Lease or any part thereof upon execution or other
process of law directed against Rangeview or the subjection of the
Lease or any part thereof to attachment at the instance of any
creditor or claimant against Rangeview, which attachment is not
discharged or disposed of within sixty (60) days after the levy
thereof;

 

(iii) The
material default in the performance of any material term, covenant
or condition in this Agreement which default shall continue and not
be cured for a period of thirty (30) days after written notice
specifically setting forth the nature of the default has been given
by the non-defaulting party to the defaulting party, or if more
than thirty (30) days is reasonably required to cure such
matter complained of, if the defaulting party shall fail to
commence to correct the same within said thirty (30) day
period and shall thereafter fail to prosecute the same to
completion with reasonable diligence.

 

(b) If an event of
default shall occur, then the non-defaulting party may, at its
option, without any prejudice to any other remedies it may have,
proceed to protect and enforce its rights against the defaulting or
breaching party by mandamus or such other suit, action or special
proceedings in equity or at law, in any court of competent
jurisdiction, including an action for damages or specific
performance, or by self-help. In the event of any litigation or
other proceeding to enforce any of the terms, covenants or
conditions hereof, the prevailing party in such litigation or other
proceeding shall obtain, as part of its judgment or award, its
reasonable attorneys’ fees and costs.

 

(c) If either party
shall act or fail to act in a manner which would constitute an
event of default under any New Service Agreement (as that term may
be defined or described in any New Service Agreement) or if
Rangeview is in default pursuant to Section 13.2(a)(ii),
immediately, with the passage of time, with notice, or any of the
foregoing, the non-defaulting party may, at its option, without
prejudice to any other remedies it may have, cure such event of
default and seek reimbursement from the defaulting party for any
costs and damages associated therewith or offset such costs and
damages from any amounts owed to the defaulting party under this
Agreement or otherwise without waiting for the thirty-day period
provided for in Section 13.2(a)(iii) or the sixty-day period
provided for in Section 13.2(a)(ii) to run.



 

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(d) If an event of
default shall occur and after the non-defaulting party proceeds in
accordance with Section 13.2(b) or (c), the non-defaulting party
shall be permitted to terminate this Agreement upon sixty (60) days
advance written notice to the defaulting party only if: (i)
monetary damages are not paid by the defaulting party when due or
(ii) the defaulting party refuses to perform its obligations
hereunder.

 

13.3 Service Provider Right of
Termination . Service Provider
may terminate this Agreement at any time without cause upon giving
one year’s prior written notice to Rangeview. During the
one-year period, Service Provider shall continue to discharge all
of its obligations under this Agreement and shall be entitled to
the benefits of this Agreement, unless Rangeview, at its option,
requires Service Provider to discontinue providing services
hereunder prior to the expiration of the one-year notice
period.

 

13.4 Termination of New Service
Agreement . If
Rangeview’s rights under a New Service Agreement expire or
are terminated, the New Service Agreement shall be deleted from the
Schedule of Service and shall no longer be part of the rights and
obligations under this Agreement. This Agreement shall remain in
full force and effect as to all New Service Agreements remaining on
the Schedule of Service.

 

13.5 Compliance with
Regulations . The parties
understand and agree that compliance with all applicable federal
and state regulations must take place at all times. In the event of
any termination of this Agreement, with or without cause, the
parties shall cooperate to ensure that there is no gap or break in
the compliance with all applicable regulations in the provision of
service to Water Users and Wastewater Users during the transition
of service, including the payment of all applicable rates, fees and
charges by Water Users and Wastewater Users and as required by
Section 8.2.

 

13.6 Multi-Fiscal Year
Obligation . Nothing in this
Agreement shall be interpreted or construed as constituting a
multiple fiscal year obligation of Rangeview as defined in Article
X, Section 20 of the Colorado Constitution.

 



ARTICLE XIV 


General Provisions

 

14.1 Assignment . Servicer Provider
may assign its interest in this Agreement, but only upon terms
expressly approved in writing by Rangeview, which approval may not
be unreasonably withheld. Rangeview shall not be deemed to be
unreasonable in withholding consent if it is unable to obtain any
consent required under a New Service Agreement. Any attempted
assignment in contravention of this Section shall be null and void.
Notwithstanding the foregoing, Servicer Provider may contract with
third parties to perform portions of its obligations under this
Agreement and such action on Servicer Provider’s part shall
not be deemed an assignment of its interest in this
Agreement.



 

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14.2 Third Party
Beneficiaries . It is not the
intent of the parties, nor shall it be the effect of this
Agreement, to vest rights of any nature or form in individuals or
entities not executing this Agreement as a party.

 

14.3 Notice . All notices
required by this Agreement shall be in writing and shall be
delivered to the person to whom the notice is directed, in person,
by courier service or by United States mail as a certified item,
return receipt requested, addressed to the address stated below.
Notices delivered in person or by courier service shall be deemed
given when delivered to the person to whom the notice is directed.
Notices delivered by mail shall be deemed given on the date of
delivery as indicated on the return receipt. The parties may change
the stated address by giving ten (10) days’ written notice of
such change pursuant to this Section.

 


If to
Rangeview:

 


Rangeview
Metropolitan District


141
Union Boulevard, Suite 150


Lakewood, CO
80228


Attention:
Manager

 


If to
Service Provider:


 


Pure
Cycle Corporation


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


Watkins, Colorado
80137


Attention:
President

 

14.4 Construction
. Where
required for proper interpretation, words in the singular shall
include the plural, and the masculine gender shall include the
neuter and the feminine, and vice versa, as is appropriate. The
article and section headings are for convenience and are not a
substantive portion of the Agreement. The Agreement shall be
construed as if it were equally drafted in all aspects by all
parties.

 

14.5 Entire Agreement
. This
Agreement, including the items referenced herein or to be attached
in accordance with the provisions of this Agreement, constitutes
the entire agreement among the parties pertaining to the subject
matter of this Agreement and supersedes all prior and
contemporaneous agreements and understandings of the parties as to
the subject matter of this Agreement. No representation, warranty,
covenant, agreement or condition not expressed in this Agreement
shall be binding upon the parties or shall change or restrict the
provisions of this Agreement.

 

14.6 Authority . Each of the
parties represents and warrants that it has all requisite power,
corporate and otherwise, to execute, deliver and perform its
obligations pursuant to this Agreement, that the execution,
delivery and performance of this Agreement and the documents to be
executed and delivered pursuant to this Agreement have been duly
authorized by it, and that upon execution and delivery, this
Agreement and all documents to be executed and delivered pursuant
to this Agreement will constitute its legal, valid and binding
obligation, enforceable against it in accordance with their
terms.



 

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14.7 Copies . Numerous copies
of this Agreement have been executed by the parties. Each such
executed copy shall have the full force and effect of an original,
executed Agreement.

 

14.8 Counterparts
. This
Agreement may be executed in one or more counterparts, all of which
together shall constitute one and the same instrument.

 

14.9 Amendment . This Agreement
shall not be amended except by a writing executed by both
parties.

 

14.10 Compliance with Law
.
Rangeview and Service Provider covenant and agree that during the
continuance of this Agreement, they shall comply fully with all
provisions, terms, and conditions of all laws whether state or
federal, and orders issued thereunder, which may be in effect
during the continuance hereof.

 

14.11 Binding Effect
. The
benefits and terms and obligations of this Agreement shall extend
to and be binding upon the successors or permitted assigns of the
respective parties hereto.

 

14.12 Severability
. If
any clause or provision of this Agreement is illegal, invalid or
unenforceable under present or future laws effective during the
term of this Agreement, then, and in that event, it is the
intention of the parties hereto that the remainder of this
Agreement shall not be affected thereby. It is also agreed that in
lieu of each clause or provision of this Agreement that is illegal,
invalid or unenforceable, there shall be added as a part of this
Agreement a clause or provision as similar in terms to such
illegal, invalid or unenforceable clause or provision as may be
possible and be legal, valid and enforceable.

 

14.13 Duty of Good Faith and Fair Dealing;
Regular Consultation . The parties
acknowledge and agree that each party has a duty of good faith and
fair dealing in its performance of this Agreement. Service Provider
will advise Rangeview of its activities no less than annually
during the term of this Agreement and will respond to reasonable
requests of Rangeview for additional information on Service
Provider’s activities.

 

14.14 Further Assurance
. Each
of the parties hereto, at any time and from time to time, will
execute and deliver such further instruments and take such further
action as may reasonably be requested by the other party hereto, in
order to cure any defects in the execution and delivery of, or to
comply with or accomplish the covenants and agreements contained in
this Agreement and/or any other agreements or documents related
thereto.

 

14.15 Governing Law
. This
Agreement shall be governed by and construed in accordance with the
laws of the State of Colorado and applicable federal
law.

 

14.16 Arbitration . Any controversy
or claim arising out of or relating to the computation of amounts
due pursuant to Section 8.2 under this Agreement and all other
controversies or claims which the parties have expressly agreed
herein shall be submitted to arbitration, shall be settled by
arbitration in accordance with the Commercial Rules of the American
Arbitration Association, including discovery, experts, evidence and
hearings. Judgment upon the award rendered by the arbitrator(s) may
be entered in any court having jurisdiction thereof. Arbitration
shall be instituted on written demand of any party setting forth
the issues to be arbitrated. The party responding to the
arbitration demand shall respond to the demand within ten (10)
days, after which the parties shall proceed to select an arbitrator
within ten (10) days; provided however, that if the parties are
unable to agree on a single arbitrator within such ten (10) days,
the arbitration shall be by majority decision of a panel of three
arbitrators, at least two of whom shall have experience and
expertise in water rights or water utility matters, who may, but
need not, be affiliated with the American Arbitration Association.
Within ten (10) days, each party shall appoint one arbitrator, who
together shall appoint the third. If a party fails to appoint an
arbitrator within ten (10) days, an arbitrator shall be appointed
for such party by the American Arbitration Association upon the
request of another party. Arbitration shall be concluded and an
award entered within sixty (60) days of the completion of selection
of the arbitration panel, unless a shorter period is set forth
elsewhere in this Agreement.



 

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14.17 Litigation and Attorneys’
Fees . Except as
provided in Section 14.16 above, in the event of claims,
disputes or other disagreements between the parties which the
parties are not able to resolve amicably, either party may bring
suit in a court of competent jurisdiction seeking resolution of the
matter. The prevailing party in any arbitration or suit shall be
entitled to recover its reasonable attorneys’ fees and costs
from the other party.

 

14.18 No Waiver of Governmental
Immunity . Nothing in this
Agreement shall be interpreted or construed as constituting a
waiver of the immunity granted to Rangeview pursuant to the
Colorado Governmental Immunity Act, C.R.S. § 24-10-101,
et seq., as
amended.

 

14.19 Force Majeure
.
Should either party be unable to perform any obligation required of
it under this Agreement, other than the payment of money, because
of any cause beyond its control (including, but not limited to war,
insurrection, riot, civil commotion, shortages, strikes, lockout,
fire, earthquake, calamity, windstorm, flood, material shortages,
failure of any suppliers, freight handlers, transportation vendors
or like activities, or any other force majeure), then such
party’s performance of any such obligation shall be suspended
for such period as the party is unable to perform such
obligation.

 


 




 

-19-








 






 


IN
WITNESS WHEREOF, the parties hereto have executed this Service
Agreement on the date first written above.

 



Rangeview:  RANGEVIEW METROPOLITAN DISTRICT,
acting by and through its water enterprise

 


 


By:
 /s/ Mark
Harding                                                 
Attest By: /s/ Scott
Lehman 


            
Mark
Harding,
President                                                      
Scott Lehman, Secretary


 


 


STATE
OF COLORADO     )


                                             
)
ss.


COUNTY
OF ARAPAHOE )


 


The
foregoing instrument was acknowledged before me this 16th day of
June 2017, by Mark Harding as President, and Scott Lehman as
Secretary of RANGEVIEW METROPOLITAN DISTRICT, a quasi-municipal
corporation and political subdivision of the state of
Colorado.


 


Witness
my hand and official seal.


 


My
commission expires: November 17, 2020


 


/s/ James D.
Ewing 


             
Notary


 


Service Provider: PURE CYCLE
CORPORATION, a Colorado corporation

 


  By:
 /s/ Mark
Harding


Mark
Harding, President


 


 


STATE
OF COLORADO     )


                                             
)
ss.


COUNTY
OF ARAPAHOE )


 


 


The
foregoing instrument was acknowledged before me this 16th day of
June 2017, by Mark Harding as President of Pure Cycle Corporation,
a Colorado corporation.


 


Witness
my hand and official seal.


 


My
commission expires: November 17, 2020


 


/s/ James D.
Ewing 


             
Notary



-20-








 







Exhibit A



Schedule of Services


(as of
June 16, 2017)


 


 




1.

Service Area
– Elbert County/Wild Pointe Ranch





 




a.

Terms of Service:





 


Water
Service Agreement by and between Rangeview Metropolitan District,
acting by and through its Water Activity Enterprise, and Elbert
& Highway 86 Commercial Metropolitan District, acting by and
through its Wild Pointe Water Activity Enterprise, effective as of
December 15, 2016 (the “Wild Pointe Service
Agreement”).

 




b.

Additional
Consideration:





 


Service
Provider paid Rangeview $1,600,000 in cash in exchange for the
exclusive right to provide water services to customers in Wild
Pointe Ranch in accordance with the Wild Pointe Service
Agreement.

 




c.

Exceptions to 8.2:





 


None

 




2.

Service Area
– Sky Ranch Development





 




a.

Terms of Service:





 


Water
and Wastewater Service Agreement for the Sky Ranch Development by
and between Rangeview Metropolitan District, acting by and through
its Water Activity Enterprise, and PCY Holdings, LLC, dated June
16, 2017 regarding the Sky Ranch Development.

 




b.

Additional
Consideration:





 


None

 




c.

Exceptions to 8.2:





 


None

 




A-1