Exhibit 10.20**PURCHASE AND SALE AGREEMENT**This Purchase and Sale Agreement is entered into effective as of July 31, 2007, by and betweenPURE CYCLE CORPORATION, a Delaware corporation (“Pure Cycle”), and APEX INVESTMENT FUND II, L.P., aDelaware limited partnership (“Seller”).RECITALSWHEREAS, Pure Cycle and Seller are parties to a Comprehensive Amendment Agreement No. 1, datedas of April 11, 1996 (the “CAA”), pursuant to which Pure Cycle is obligated to pay to the partiesto the CAA certain proceeds it receives from the sale of Export Water (as defined in the CAA); andWHEREAS, Seller is a party entitled to receive Gross Proceeds totaling $7,163,274 incategories (i), (p), (q), (s), and (t) of Paragraph 2 of the CAA; andWHEREAS, Pure Cycle has offered to purchase from Seller its rights to receive all paymentsunder the CAA at a discount to the face amount of the Gross Proceeds to be received, and Seller hasaccepted the offer, on and subject to the terms set forth herein.AGREEMENTNOW THEREFORE, in consideration of the mutual promises herein and other good and valuableconsideration, the receipt and sufficiency of which are hereby acknowledged, the parties herebyagree as follows:1. Purchase of CAA Interest. Pure Cycle hereby purchases from Seller, and Sellerhereby sells to Pure Cycle, all of its right, title and interest in the CAA. Seller herebyunconditionally and irrevocably transfers, assigns and conveys to Pure Cycle, and Pure Cycle herebyaccepts from Seller, all of Seller’s rights related to its interest in the CAA, including, withoutlimitation: (i) the rights of Seller to receive monies and other property or assets due and tobecome due to Seller with respect to such interest pursuant to the CAA and (ii) all rights ofSeller with respect to such interest and to compel performance and otherwise exercise all remediesthereunder (collectively, the “transferred interest”). Pure Cycle hereby accepts the transferredinterest and assumes all of the rights, obligations, and responsibilities of Seller under the CAA.2. Purchase Price. The consideration payable by Pure Cycle for the transferredinterest shall be One Million Seven Hundred Ninety Thousand Eight Hundred Nineteen Dollars($1,790,819) (the “Consideration”), payable by cash, check or wire transfer of immediately payablefunds to the bank account specified on Exhibit A attached hereto.3. Effect of Purchase. Upon payment to Seller of the Consideration, all rights ofSeller relating in any way to the CAA will be owned by Pure Cycle. Pure Cycle and the Seller agreethat this Agreement constitutes an assignment to Pure Cycle of all of Seller’s rights, title andinterest in and to the CAA as of the date hereof, and as of the date hereof, the Seller shall ceaseto possess any rights with respect to the CAA.
 
 

 
4. Representations and Warranties.(a) Authority. Seller has all requisite right, power and authority to execute,deliver and perform this Agreement. This Agreement has been duly and validly executed anddelivered by the Seller. This Agreement is the valid and binding obligation of the Seller,enforceable against the Seller in accordance with its terms, except as enforceability may belimited by (a) applicable bankruptcy, insolvency, reorganization, arrangement, moratorium,fraudulent conveyance, redemption, reinstatement, and other laws affecting the rights or remediesof creditors generally and (b) general principles of equity.(b) Ownership of Transferred Interest. The transferred interest represents the entireinterest of Seller under the CAA. Seller owns the transferred interest, and passes to Pure Cyclegood and marketable title to the transferred interest, free and clear of any lien, encumbrance,pledge, option, charge or assessment of any kind. Seller has not taken any action to sell orotherwise transfer the transferred interest or to mortgage, hypothecate or otherwise encumber thetransferred interest, or to grant any lien, pledge, option, encumbrance, adverse interest or claimof any kind on the incidents of ownership of the transferred interest, including any right of firstoffer or other contractual obligation.(c) No Conflicts. Seller has full right and power to sell, assign and transfer thetransferred interest as provided in this Agreement. The execution, delivery and performance by theSeller of this Agreement does not and will not: (a) conflict with, violate, result in a breach ofor constitute a default under any agreement, instrument or obligation to which the Seller is aparty or by which the Seller is bound; (b) conflict with or violate any order, judgment, decree,statute, rule or regulation applicable to the Seller; (c) result in the creation or imposition ofany Lien against or upon the transferred interest; or (d) require any consent, approval orauthorization of, or filing with, any governmental authority or any other third party.(d) Investment Representatives. Seller understands that the valuation of interests inthe CAA is uncertain and that the value derives from future transactions and developments that arelargely unknown and unknowable. Seller acknowledges that the Consideration being paid hereunderrepresents an arms’ length negotiation between Pure Cycle and Seller and represents the fair marketvalue of transferred interest. Seller has read and understands the public filings made by PureCycle with the Securities and Exchange Commission. In addition, Seller has been given theopportunity to solicit from Pure Cycle all information relevant to valuation of rights under theCAA, and has received all the information requested. Seller has made an investigation of thepertinent facts related to Pure Cycle and the likelihood of payment under the CAA and has reviewedall information regarding Pure Cycle to the extent it deems necessary in order to be fully informedwith respect thereto. Seller is a sophisticated investor, knowledgeable and experienced infinancial and business matters and in transactions of this nature, and has made its own assessmentof the value of the rights under the CAA. Seller is capable of evaluating the merits and risks ofthis transaction. Seller understands that subsequent events may prove that values of interests inthe CAA were higher or lower than the valuation indicated by the Consideration paid hereunder.
 
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5. Release. Seller, on behalf of itself and its partners and agents, hereby fully andforever releases and discharges Pure Cycle and its officers, directors, agents, employees,affiliates, successors and predecessors from any and all claims, demands, proceedings, causes ofactions, orders, obligations, contracts, agreements, debts, guarantees, damages, expenses, costs,attorneys’ fees and liabilities whatsoever, whether known or unknown, suspected or unsuspected,both at law and in equity, which the Seller now has, has ever had or may hereafter have againstPure Cycle in connection with, related to or arising out of (i) the Seller’s interest under theCAA, (ii) the financing transactions pursuant to which Seller acquired shares of Series A PreferredStock of Pure Cycle and its interest in the CAA and (iii) the business, operations, management,financing, or other matters relating to Pure Cycle.6. Survival. Each of the covenants, representations and warranties of the Seller andPure Cycle made herein shall survive the Closing.7. Entire Agreement; Amendments; Waivers. This Agreement constitutes the entireagreement of the parties with respect to the subject matter hereof and supersedes all prioragreements and understandings, oral or written, with respect thereto. This Agreement may not bemodified orally, but only by an agreement in writing signed by the party against whom any waiver oramendment may be sought to be enforced. No action taken pursuant to this Agreement and noinvestigation by or on behalf of any party hereto shall be deemed to constitute a waiver by suchparty of compliance with any representation, warranty, covenant or agreement herein. The waiver byany party hereto of any condition or of a breach of another provision of this Agreement shall notbe construed as a waiver of any other condition or subsequent breach. The waiver by any party ofany part of any condition precedent to its obligations under this Agreement shall not preclude itfrom seeking redress for breach of this Agreement other than with respect to the condition waived.8. Binding Effect. This Agreement shall inure to the benefit of and be binding uponthe parties hereto and their respective heirs, legal representatives, successors and permittedassigns.9. Headings and Exhibits. The section, exhibit and other headings in this Agreementare for reference purposes only and shall not affect the meaning or interpretation of thisAgreement.10. Counterparts. This Agreement may be executed in any number of counterparts, eachof which, when executed, shall be deemed to be an original and all of which together shall bedeemed to be one and the same Agreement.11. Governing Law. This Agreement shall be construed and enforced in accordance withthe laws of the State of Colorado, without giving effect to the principles of conflicts of law ofsuch state.
 
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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       By: /s/ Mark Harding         Mark Harding, President       SELLER:       APEX INVESTMENT FUND II, L.P.       By: Apex Management Partnership, General Partner       By: /s/ George Middlemas         George Middlemas, General Partner
 
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