Exhibit 10.34**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 Warwick Partners,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 is obligated topay such investors certain proceeds it receives from the sale of “**Export Water**” (as defined in theCAA).B. CAA Holder is referenced in Section 2.1(i), (r), and (t)(i) of the CAA and is entitled toreceive “Gross Proceeds” (as defined in the CAA) totaling $250,000, $204,915, and $295,085,respectively, under these subsections of the CAA (collectively, the “**CAA Holder Gross 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 CAA Holderhas 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 unconditionally andirrevocably sells, transfers, assigns and conveys to Pure Cycle, and Pure Cycle hereby purchasesand accepts from CAA Holder, all of its right, title and interest in and to CAA, including withoutlimitation: (i) the right of CAA Holder to receive monies and other property or assets due and tobecome due to the CAA Holder pursuant to the CAA (including, without limitation, the CAA HolderGross Proceeds) and (ii) all rights of the CAA Holder to compel performance and otherwise exerciseall remedies thereunder (collectively, the “**Transferred Interest**”). Pure Cycle hereby assumes allof the obligations, liabilities, responsibilities and commitments of the CAA Holder under the CAA.2. Purchase Price. In consideration of the sale of the Transferred Interests, PureCycle hereby agrees to issue and deliver 33,856 shares of common stock of Pure Cycle (the “PCShares”) to CAA Holder. The PC Shares shall bear the legend restricting transfer set forth inSection 8 hereof.3. Effect of Purchase. Upon issuance to the CAA Holder of the PC Shares, all rightsof the CAA Holder relating in any way to the CAA will be owned by Pure Cycle. Pure Cycle and CAAHolder agree that this Agreement constitutes an assignment to Pure Cycle of all of the CAA Holder’srights, title and interest in and to the CAA as of the date hereof, and that as of the date hereofthe CAA Holder shall cease to possess 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 Cycle to the extent it deems necessary in order to be fullyinformed with respect thereto. The CAA Holder is an “accredited investor” within the meaning ofRule 501 under the Securities Act of 1933, as amended (the “**Securities Act**”), and is knowledgeableand experienced in securities, financial and business matters and in transactions of this nature,and has made its own assessment of the value of the PC Shares and of its rights under the CAA. TheCAA Holder is capable of evaluating the merits and risks of this transaction and is able to bear acomplete loss of the investment in the PC Shares. The CAA Holder understands that subsequentevents may prove that values of interests in the CAA were higher or lower than the valuationindicated by the PC Shares paid hereunder.
 
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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 liabilitieswhatsoever, whether known or unknown, suspected or unsuspected, both at law and in equity, whichthe CAA Holder now has, has ever had or may hereafter have against Pure Cycle in connection with,related to or arising out of (i) the CAA Holder’s interest in the CAA, (ii) the financingtransactions pursuant to which the CAA Holder acquired its interest in the CAA and (iii) thebusiness, operations, management, financing, or other matters relating to Pure Cycle, provided thatthis release shall not apply with respect to any claims arising out of this Agreement.(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 the CAA Holderand Pure Cycle made herein shall survive the delivery of the PC Shares.8. Restrictive Legend. The PC Shares issued hereunder shall bear the following (orsubstantially 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 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.10. 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.11. 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.12. Counterparts. For the convenience of the parties hereto, this Agreement may beexecuted in any number of original or facsimile counterparts, each of which, when executed, shallbe deemed to be an original and all of such counterparts together shall be deemed to be one and thesame Agreement.13. 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.*      *      *[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,**