Exhibit 10.32**PURCHASE AND SALE AGREEMENT**THIS PURCHASE AND SALE AGREEMENT (the “**Agreement**”) is entered into as of October 1, 2007 byand between Pure Cycle Corporation, a Delaware corporation (“**Pure Cycle**”), and Landmark WaterPartners, L.P., a Delaware limited partnership (“**CAA Holder**”).**RECITALS**A. Pursuant to the Comprehensive Amendment Agreement No. 1, dated as of April 11, 1996(the “**CAA**”), between Pure Cycle and certain investors (including CAA Holder), Pure Cycle isobligated to pay such investors certain proceeds it receives from the sale of “**ExportWater**” (as defined in the CAA).B. CAA Holder is referenced in Section 2.1(c), (j), and (s)(ii) of the CAA and is entitledto receive “Gross Proceeds” (as defined in the CAA) totaling $500,000, $500,000, and$599,333, respectively, under these subsections of the CAA (collectively, the “**CAA HolderGross Proceeds**”).C. Pure Cycle has offered to purchase from the CAA Holder all of its rights to receivepayments under the CAA at a discount to the face amount of the CAA Holder Gross Proceeds inconsideration of the issuance of certain shares of the capital stock of Pure Cycle, and CAAHolder has accepted the offer, on and subject to the terms set forth herein.**AGREEMENT**In consideration of the mutual promises herein and other good and valuable consideration, thereceipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows:1. Purchase and Sale of CAA Interest. CAA Seller hereby unconditionallyand irrevocably sells, transfers, assigns and conveys to Pure Cycle, and Pure Cyclehereby purchases and accepts from CAA Holder, all of its right, title and interest inand to CAA, including without limitation: (i) the right of CAA Holder to receivemonies and other property or assets due and to become due to the CAA Holder pursuant tothe CAA (including, without limitation, the CAA Holder Gross Proceeds) and (ii) allrights of the CAA Holder to compel performance and otherwise exercise all remediesthereunder (collectively, the “**Transferred Interest**”). Pure Cycle hereby assumes allof the obligations, liabilities, responsibilities and commitments of the CAA Holderunder the CAA.2. Purchase Price. In consideration of the sale of the TransferredInterests, Pure Cycle hereby agrees to issue and deliver 72,196 shares of common stockof Pure Cycle (the “PC Shares”) to CAA Holder. The PC Shares shall bear the legendrestricting transfer set forth in Section 8 hereof.3. Effect of Purchase. Upon issuance to the CAA Holder of the PC Shares,all rights of the CAA Holder relating in any way to the CAA will be owned by PureCycle. Pure Cycle and CAA Holder agree that this Agreement constitutes an assignmentto Pure Cycle of all of the CAA Holder’s rights, title and interest in and to the CAAas of the date hereof, and that as of the date hereof the CAA Holder shall cease topossess any rights with respect to the CAA.
 
 

 
4. Representations and Warranties of the CAA Holders.(a) Authority. The CAA Holder represents that it has all requisite right, power, andauthority to execute, deliver and perform its obligations under this Agreement; this Agreement hasbeen duly and validly authorized, executed and delivered by the CAA Holder; and this Agreement isthe valid and binding obligation of the CAA Holder, enforceable against it in accordance with itsterms, except as enforceability may be limited by (i) applicable bankruptcy, insolvency,reorganization, arrangement, moratorium, fraudulent conveyance, redemption, reinstatement, andother laws affecting the rights or remedies of creditors generally or (ii) general principles ofequity.(b) Ownership. The Transferred Interest represents the entire interest of the CAAHolder under the CAA. The CAA Holder owns the Transferred Interest and passes to Pure Cycle goodand marketable title to the Transferred Interest, free and clear of any lien, encumbrance, pledge,option, adverse interest, charge or assessment of any kind (a “**Lien**”). The CAA holder representsthat it has not taken any action to sell or otherwise transfer the Transferred Interest, tomortgage, hypothecate or otherwise encumber the Transferred Interest, or to grant any Lien on theincidents of ownership of the Transferred Interest, including any right of first offer or othercontractual obligation.(c) No Conflicts. The CAA Holder represents that the execution, delivery andperformance by it of this Agreement does not and will not (i) conflict with, violate, result in abreach of or constitute a default under any agreement, instrument or obligation to which such CAAHolder is a party or by which it is bound; (ii) conflict with or violate any order, judgment,decree, statute, rule or regulation applicable to the CAA Holder; (iii) result in the creation orimposition of any Lien against or upon the Transferred Interest; or (iv) require any consent,approval or authorization of, or filing with, any governmental authority or any other third party.(d) Investment Representations. The CAA Holder understands that the valuation ofinterests in the CAA and the common stock of Pure Cycle is uncertain and that such value derivessignificantly from future transactions and developments that are largely unknown and unknowable.The CAA Holder acknowledges that the consideration being paid hereunder represents the result of anarms’ length negotiation between Pure Cycle and the CAA Holder and represents the fair market valueof the Transferred Interest. The CAA Holder has read and understands the public filings made byPure Cycle with the U.S. Securities and Exchange Commission (the “**SEC**”). In addition, the CAAHolder has been given the opportunity to solicit from Pure Cycle all information relevant tovaluation of rights under the CAA and regarding Pure Cycle’s business and operations and hasreceived all the information requested. The CAA Holder has made an investigation of the pertinentfacts related to Pure Cycle, the PC Shares, and the likelihood of payment under the CAA and hasreviewed all information regarding Pure Cycleto the extent it deems necessary in order to be fully informed with respect thereto. The CAAHolder is an “accredited investor” within the meaning of Rule 501 under the Securities Act of 1933,as amended (the “**Securities Act**”), and is knowledgeable and experienced in securities, financialand business matters and in transactions of this nature, and has made its own assessment of thevalue of the PC Shares and of its rights under the CAA. The CAA Holder is capable of evaluatingthe merits and risks of this transaction and is able to bear a complete loss of the investment inthe PC Shares. The CAA Holder understands that subsequent events may prove that values ofinterests in the CAA were higher or lower than the valuation indicated by the PC Shares paidhereunder.
 
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(e) Restricted Stock. The CAA Holder represents that it has been advised andunderstands that the PC Shares have not been registered under the Securities Act or any statesecurities laws and that the PC Shares are being issued in reliance upon exemptions from suchregistration requirements. The CAA Holder acknowledges that the PC Shares are “restrictedsecurities” as that term is defined in Rule 144 promulgated by the SEC under the Securities Act andmay not be sold or transferred by the CAA Holder unless such PC Shares are subsequently registeredunder that act and applicable state securities laws or are transferred pursuant to an exemptionfrom such registration requirements.5. Representations and Warranties of Pure Cycle.(a) Authority. Pure Cycle has all corporate right, power, and authority to execute,deliver and perform its obligations under this Agreement. This Agreement has been duly and validlyauthorized, executed and delivered by Pure Cycle. This Agreement is the valid and bindingobligation of Pure Cycle, enforceable against Pure Cycle in accordance with its terms, except asenforceability may be limited by (i) applicable bankruptcy, insolvency, reorganization,arrangement, moratorium, fraudulent conveyance, redemption, reinstatement, and other laws affectingthe rights or remedies of creditors generally or (ii) general principles of equity.(b) No Conflicts. The execution, delivery and performance by Pure Cycle of thisAgreement does not and will not (i) conflict with, violate, result in a breach of or constitute adefault under any agreement, instrument or obligation to which Pure Cycle is a party or by whichPure Cycle is bound; (ii) conflict with or violate any order, judgment, decree, statute, rule orregulation applicable to Pure Cycle; or (iii) except as required by Form 8-K under the Securitiesand Exchange Act of 1934, require any consent, approval or authorization of, or filing with, anygovernmental agency.(c) PC Shares. The PC Shares are duly authorized validly issued, fully paid andnon-assessable.6. Release.(a) CAA Holder Release. The CAA Holder, on behalf of itself and its partners,officers, employees, affiliates, and agents, hereby fully and forever releases and discharges PureCycle and its officers, directors, agents, employees, affiliates, successors and predecessors fromany and all claims, demands, proceedings, causes of actions, orders,obligations, contracts, agreements, debts, guarantees, damages, expenses, costs, attorneys’fees and liabilities whatsoever, whether known or unknown, suspected or unsuspected, both at lawand in equity, which the CAA Holder now has, has ever had or may hereafter have against Pure Cyclein connection with, related to or arising out of (i) the CAA Holder’s interest in the CAA, (ii) thefinancing transactions pursuant to which the CAA Holder acquired its interest in the CAA and(iii) the business, operations, management, financing, or other matters relating to Pure Cycle,provided that this release shall not apply with respect to any claims arising out of thisAgreement.(b) Pure Cycle Release. Pure Cycle, on behalf of itself and its officers, directors,employees and agents, hereby fully and forever releases and discharges the CAA Holder and itspartners, officers, agents, employees, affiliates, successors and predecessors from any and allclaims, demands, proceedings, causes of actions, orders, obligations, contracts, agreements, debts,guarantees, damages, expenses, costs, attorneys’ fees and liabilities whatsoever, whether known orunknown, suspected or unsuspected, both at law and in equity, which Pure Cycle now has, has everhad or may hereafter have against the CAA Holder in connection with, related to or arising out of(i) the CAA Holder’s interest in the CAA and (ii) the financing transactions pursuant to which PureCycle entered into the CAA.
 
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7. Survival. Each of the covenants, representations and warranties of theCAA Holder and Pure Cycle made herein shall survive the delivery of the PC Shares.8. Restrictive Legend. The PC Shares issued hereunder shall bear thefollowing (or substantially equivalent) legend on the face or reverse side thereof:“These shares have not been registered under the Securities Act of1933, as amended, or applicable state securities laws, and may notbe sold, transferred or otherwise disposed of unless the same areregistered or unless an exemption from such registration isavailable and Pure Cycle Corporation has received evidence of suchexemption satisfactory to it (which may include, among other things,an option of counsel satisfactory to the corporation).9. Entire Agreement; Amendments; Waivers. This Agreement constitutes theentire agreement of the parties with respect to the subject matter hereof andsupersedes all prior agreements and understandings, oral or written, with respectthereto. This Agreement may not be modified orally, but only by an agreement inwriting signed by the party against whom any waiver or amendment may be sought to beenforced. No action taken pursuant to this Agreement and no investigation by or onbehalf of any party hereto shall be deemed to constitute a waiver by such party ofcompliance with any representation, warranty, covenant or agreement herein. The waiverby any party hereto of any condition or of a breach of another provision of thisAgreement shall not be construed as a waiver of any other condition or subsequentbreach. The waiver by any party of any part of any condition precedent to itsobligations under this Agreement shall not preclude it from seeking redress for breachof this Agreement other than with respect to the condition waived.10. Binding Effect. This Agreement shall inure to the benefit of and bebinding upon the parties hereto and their respective heirs, legal representatives,successors and permitted assigns.11. Headings and Exhibits. The section, exhibit and other headings in thisAgreement are for reference purposes only and shall not affect the meaning orinterpretation of this Agreement.12. Counterparts. For the convenience of the parties hereto, thisAgreement may be executed in any number of original or facsimile counterparts, each ofwhich, when executed, shall be deemed to be an original and all of such counterpartstogether shall be deemed to be one and the same Agreement.13. Governing Law. This Agreement shall be construed and enforced inaccordance with the laws of the State of Colorado, without giving effect to theprinciples of conflicts of law of such state.*      *      *[Signature page follows]
 
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IN WITNESS WHEREOF, the parties hereto have executed this Purchase and Sale Agreement as ofthe date set forth above.         **PURE CYCLE CORPORATION,**   **LANDMARK WATER PARTNERS, L.P.,**   a Delaware corporation      a Delaware limited partnership               By: **COMPTON CAPITAL, LTD.**,        its general partnerBy: /s/ Mark Harding                 Mark Harding, President            By: /s/ Earl A. Samson III                 Earl A. Samson, III, President
 
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