Document:

exv10w1

Exhibit 10.1

LOAN SALE AND ASSIGNMENT AGREEMENT

This LOAN SALE AND ASSIGNMENT AGREEMENT (this “Agreement”), dated as of this 30th day of July,
2010 (the “Effective Date”), is by and between Bank of America, N.A., a national banking
association, successor to LaSalle Bank National Association (“Assignor”) and Pure Cycle
Corporation, a Colorado corporation (“Assignee”).

RECITALS

A. Assignor is the owner and holder of the loan documents identified on Exhibit A
hereto (each, a “Loan Document” and collectively, the “Loan Documents”), all such Loan Documents
relating to the loan(s) (whether one or more, the “Loan”) of Sky Ranch LLC, a Colorado limited
liability company (whether one or more, the “Borrower”), which indebtedness is currently owed to
Assignor.

B. Certain of the Loan Documents encumber land legally described in one or more of the Loan
Documents located in Arapahoe County, Colorado and known as the “Sky Ranch development” (the
“Land”).

B. Assignee has offered to purchase from Assignor, and Assignor has agreed to sell to
Assignee, the Loan Documents, subject to the terms and conditions contained herein.

AGREEMENT

NOW, THEREFORE, in consideration of the premises herein contained and of other good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Assignor and
Assignee (the “Parties”) agree as follows:

1. Purchase and Sale of Loan. Assignee does hereby purchase, and in exchange for good
and valuable consideration paid by Assignee, Assignor does hereby sell, assign, transfer and set
over to Assignee the Loan Documents, without recourse, representation or warranty of any kind,
express or implied, except as set forth herein. Assignee’s obligation to purchase the Loan
Documents is subject to and conditioned upon satisfaction of Assignee’s due diligence contingency
set forth in Paragraph 3.1 herein.

2. Earnest Money. Within three (3) business days after the execution and delivery of
this Agreement by Assignor and Assignee, Assignee shall deliver by wire transfer of immediately
available funds, to Chicago Title and Trust Company, 171 North Clark Street, Chicago, Illinois
60601 (“Escrow Agent”), the sum of Seven Hundred Thousand Dollars
($700,000.00) as earnest money (together with any interest earned thereon, the “Earnest
Money”). Assignee and Assignor shall enter into an escrow agreement with Escrow Agent, which shall
provide for the following with respect to the disposition of the Earnest Money:

 

 

 

2.1 Except to the extent otherwise provided in this Agreement, the Earnest Money shall be
refunded to Assignee if Assignee timely exercises its right provided in Paragraph 3.1
hereof to terminate this Agreement.

2.2 The Earnest Money shall be disbursed to Assignor and applied to the Purchase Price upon
the Closing

2.3 If Assignee should fail to close the transaction contemplated herein as and when required
under the terms of this Agreement, and Assignor terminates this Agreement as a result thereof,
Assignor shall be entitled to retain Seventy-Thousand Dollars ($70,000) of the Earnest Money, as
provided in Paragraph 12.1 hereof.

3. Matters Relating to the Land.

3.1 Due Diligence Contingency. Provided that (i) Sky Ranch LLC, as
debtor-in-possession, executes and delivers that certain License Agreement dated as of July      ,
2010 between Sky Ranch LLC, as debtor-in-possession, and Assignee (the “License Agreement”), and
(ii) Assignee delivers the Earnest Money to Escrow Agent, for a period (“Inspection Period”)
commencing upon the date of the License Agreement and ending at 5:00 p.m. Eastern time on
September 30, 2010, Sky Ranch LLC, as debtor-in-possession, has granted Assignee the right
and privilege to enter upon the Land for the sole purpose of allowing Assignee’s consultant to
conduct a phase 1 environmental assessment of the Land. Assignor acknowledges and agrees that in
connection with Assignee’s evaluation of the environmental condition of the Land, (i) it shall not
use any consultant previously engaged by Assignor and (ii) it shall not perform or permit any of
its consultants or contractors to perform any physically invasive tests of the Land (including,
without limitation, drilling, boring, digging, excavation, test pits or the like) without
Assignor’s express written consent. Notwithstanding any other provision of this Agreement, if
Assignee is not satisfied for any reason with the results of the phase 1 environmental assessment
of the Land, Assignee’s review of the property documentation or the bankruptcy proceeding of Sky
Ranch LLC, as such bankruptcy proceeding may affect the Loan Documents, Assignee shall have the
right in Assignee’s sole and exclusive determination, to terminate this Agreement by giving written
notice of such termination to the Assignor (a “Termination Notice”) on or before the end of the
Inspection Period, time being of the essence. Assignee shall deliver any such Termination Notice
in accordance with the terms and conditions set forth in Paragraph 17 hereof relating to
the giving of notices. If Assignee shall timely exercise its right under this Paragraph
3.1 to terminate this Agreement, the Earnest Money shall be refunded to Assignee, except to the
extent otherwise provided herein.

3.2 Indemnification. Assignee hereby undertakes and agrees (which agreement shall
survive the Closing or termination of this Agreement) to indemnify, defend, and hold Assignor and
its officers, directors, employees, agents and representatives, free and harmless from any loss,
injury, damage, claim, lien, cost or expense, including attorneys’ fees

 

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and costs, resulting from any entry upon the Land by Assignee and its officers, employees,
agents, consultants, invitees and contractors (collectively, “Assignee’s Representatives”) and any
tests or inspections conducted on the Land by Assignee or any of Assignee’s Representatives
(referred to herein individually as a “Claim” and collectively as “Claims”), to the extent Assignee
gives its express written consent for any such testing. Notwithstanding anything to the contrary
contained in this Agreement or the Escrow Agreement, in the event any Claims exist at a time when
Assignee otherwise is entitled to the return, refund, payment or delivery of the Earnest Money
under any provisions of this Agreement, the Earnest Money shall not be refunded to Assignee, but an
amount equal to 150% of the amount of any outstanding and unsatisfied Claims shall be deducted and
withheld from the Earnest Money and retained in escrow. Such amount shall be retained in Escrow
until such time as the Claims are satisfied and Assignee has performed its indemnification
obligations with respect thereto. The balance of the Earnest Money, less and except the hold back
amount, shall be refunded to Assignee on the date that Assignee otherwise becomes entitled to a
return, refund, payment or delivery of the Earnest Money.

3.3 No Liens. Assignee shall keep the Land free from any liens arising out of any
work performed, materials furnished or obligations incurred by or on behalf of Assignee or
Assignee’s Representatives with respect to any inspection or testing of the Land (a “Lien Claim”),
to the extent Assignee gives its express written consent for any such testing. If any such a Lien
Claim at any time shall be filed, Assignee shall cause the same to be discharged of record within
fifteen (15) days after knowledge by Assignee thereof by satisfying the same or, if Assignee, in
its discretion and in good faith determines that such Lien Claim should be contested, by obtaining
a bond or providing a cash escrow acceptable to the Assignor in an amount not less than 150% of the
maximum amount of such Lien Claim, including possible interest that may accrue on the same.
Failure by Assignee to discharge such Lien Claim or obtain and provide to the Assignor such bond or
cash escrow within the fifteen (15) day said period shall be a breach of this Agreement.
Notwithstanding anything to the contrary contained in this Agreement or the Escrow Agreement, in
the event any Lien Claims exist at a time when Assignee otherwise is entitled to the return,
refund, payment or delivery of the Earnest Money under any provisions of this Agreement, the
Earnest Money shall not be refunded to Assignee, but an amount equal to 150% of the amount of any
outstanding and unsatisfied Claims shall be deducted and withheld from the Earnest Money and
retained in escrow. Such amount shall be retained in Escrow until such time as the Lien Claims are
satisfied and Assignee has performed its indemnification obligations with respect thereto. The
balance of the Earnest Money, less and except the hold back amount, shall be refunded to Assignee
on the date that Assignee otherwise becomes entitled to a return, refund, payment or delivery of
the Earnest Money. If Assignee fails to discharge such Lien Claim or obtain and provide to the
Assignor such bond or cash escrow within the fifteen (15) day said period, Assignor shall have the
right to use and apply the Earnest Money to satisfy Lien Claims.

3.4 Damage to Land; Restoration and Indemnification Obligations. If and to the extent
Assignee or any of Assignee’s Representatives shall cause any damage to the Land during the
performance of any soil, environmental and engineering tests and inspections of the Land, to the
extent Assignee gives its express written consent for the performance of any such

 

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testing, Assignee undertakes and agrees to restore the Land to as near as may be possible to
the condition it existed prior to the occurrence of such damage. Assignee hereby undertakes and
agrees to indemnify, defend and hold the Assignor, and its agents, representatives and employees
harmless from any claim, loss, cost, expense, liability, damage, loss or injury, including
reasonable attorneys’ fees, caused by Assignee and any of the Assignee’s Representatives arising
out of or related to such entry upon the Land including, without limitation, any damage or injury
caused by Assignee and Assignee’s Representatives in performing said tests and inspections and any
failure of Assignee to perform its restoration obligations.

3.5 Survival. The obligations of Assignee under this Paragraph 3 and each
sub-paragraph contained in this Paragraph 3 shall survive and continue in full force and
effect following the Closing or any termination of this Agreement.

4. Disclaimer — Inspection Materials. Assignee acknowledges and agrees that neither
Assignor nor any of its officers, directors, principals, agents, attorneys, employees or
contractors have made or are making any representations or warranties regarding the Land or the
truth, accuracy or completeness of any documentation relating to the Land, or any engineering
reports, architectural reports, feasibility reports, marketing reports, soils reports,
environmental reports, analyses or data or other similar reports, analyses, data or information of
whatever type or kind and any other information which Assignee has received or may hereafter
receive from the Assignor or the Assignor’s agents, attorneys or representatives relating to the
Land (collectively, “Property Documentation”). Assignee further acknowledges and agrees that
Assignor has provided the Property Documentation to Assignee (a) solely as an accommodation to
Assignee, (b) without any representation or warranty of any kind or nature on the part of Assignor,
(c) on the express condition that Assignee has performed or will perform its own independent
verification of the accuracy, reliability and completeness of the Property Information, and (d)
based on Assignee’s understanding and agreement that it will not rely thereon. Assignee hereby
fully and forever releases, acquits and discharges Assignor and the Assignor’s agents, attorneys or
representatives of and from any claims, actions, causes of action, proceedings or liability,
whether known or unknown, arising from the inaccuracy, unreliability or incompleteness of, or any
defect, or mistake in any of the Property Documentation. Assignee acknowledges and agrees that the
terms of this Paragraph 4 shall survive the Closing or any termination of this Agreement.

5. Limitation on Assignor’s Representations and Warranties. Except as provided
herein, Assignor makes no representation or warranty, express or implied, to Assignee or any other
person with respect to the Loan or any Loan Document, or any other matter with respect to the Loan
or any Loan Document. Specifically, and not as a limitation of any other provision hereof,
Assignor makes no representation or warranty, express or implied, to Assignee or any other person
with respect to the condition (financial or otherwise) of Borrower or any other person; the
existence or nature of any asset or liability of Borrower; the ability of Borrower or any other
person to perform its obligations under the Loan Documents; the existence, perfection or priority
of any lien securing performance under the Loan Documents; the validity or enforceability of the
Loan or any of the Loan Documents; or the effect of this Agreement upon the rights of Assignee or
any other person under any Loan Document. The Loan Documents are purchased and sold “AS IS.” The
terms and

 

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conditions set forth herein are the result of arm’s-length bargaining between parties familiar
with transactions of this nature. The price, terms and conditions reflect the fact that except for
the representations and warranties of Assignor, as set forth below, Assignee shall have the benefit
of, and is relying upon, no statements, representations or warranties, express or implied, made by
or enforceable directly against Assignor or Assignor’s affiliates or the officers, employees,
consultants, appraisers, attorneys and agents of each.

6. Assignee’s Representations and Warranties. Assignee hereby represents and warrants
to Assignor, and agrees, that:

6.1 Assignee has all right, power, legal capacity and authority to execute and deliver this
Agreement and to perform hereunder and under any other agreement or document that Assignee may
execute and deliver in connection herewith.

6.2 The execution, delivery and performance of this Agreement and the consummation of the
transactions contemplated by this Agreement do not and will not (i) violate any law, rule,
regulation, order, writ, judgment, injunction, decree, determination or award presently in effect
having applicability to Assignee or any property of Assignee, (ii) result in a breach or constitute
a default under any agreement to which Assignee is subject, or (iii) require any authorizations,
consents, approvals, licenses, exemptions from or filings or registrations with any state,
commonwealth, federal, foreign, territorial, regulatory, or other governmental department,
commission, board, bureau, agency or instrumentality.

6.3 Assignee has made such examination, review and investigation of Borrower, and of the facts
and circumstances necessary to evaluate Borrower, as Assignee has deemed necessary or appropriate.

6.4 Assignee has received copies of each of the Loan Documents and has made such examination,
review and investigation of the Loan, the Loan Documents and the Land securing the Loan, if any,
water rights and water agreements, if any, relating to the Land (“Water Rights”) and of the related
facts and circumstances necessary to evaluate the Loan, the Loan Documents, the Land and the Water
Rights as Assignee has deemed necessary or appropriate.

6.5 Except for those explicitly provided herein, Assignee has not relied on any statement,
representation or warranty, express or implied, of Assignor or any of Assignor’s officers,
employees, consultants, appraisers, attorneys or agents, regarding Borrower, the Loan, the
collectability of the Loan, the Loan Documents, the Land and the Water Rights. Assignee has made
its own independent evaluation of Borrower, the Loan, the collectability of the Loan, the Loan
Documents, the Land and the Water Rights.

6.6 Assignee acknowledges that (i) Assignor is not responsible for any statement,
representation or warranty of Borrower, of any person acting or purporting to act on behalf of
Borrower, or contained in any Loan Document, (ii) Assignee possesses such information as Assignee
deems necessary or appropriate in order for Assignee to evaluate Borrower, and (iii) there may
exist at this time various events of default under the Loan Documents, including, but not limited
to, default in the payments required thereunder.

 

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6.7 Assignee is acquiring the Loan for its own account and not with a view to, or for sale in
connection with, any public distribution thereof, and Assignee has no present intention of making
any distribution of the Loan or any Loan Documents in a manner which would violate any applicable
securities or banking laws. Neither Assignee, nor any parent, subsidiary or affiliate of Assignee,
is related to or affiliated in any way with the Borrower or Neumann Homes, Inc.

6.8 This Agreement constitutes the legal, valid and binding obligation of Assignee enforceable
against Assignee in accordance with its terms and is entered into voluntarily by Assignee. The
transaction represented hereby is an arms-length transaction for fair value.

7. Assignor’s Representations and Warranties. Assignor hereby represents and warrants
to Assignee, and agrees, that:

7.1 Assignor is the sole legal and beneficial owner and holder of the Loan Documents. Except
as may be evidenced by the Loan Documents, Assignor (i) has not assigned or otherwise transferred
to any third party any rights with respect to the Loan or any rights to the indebtedness
represented by the Loan Documents or any rights to the collateral securing the Loan; (ii) has not
released any collateral securing the Loan or modified or terminated its security interest in such
collateral; and (iii) has not modified the Loan Documents in any material respect.

7.2 Assignor has all right, power, legal capacity and authority to execute and deliver this
Agreement and to perform hereunder and under each other agreement that Assignor may execute and
deliver in connection herewith.

7.3 The execution, delivery and performance of this Agreement and the consummation of the
transactions contemplated by this Agreement do not and will not (i) violate any law, rule,
regulation, order, writ, judgment, injunction, decree, determination or award presently in effect
having applicability to Assignor or any property of Assignor, (ii) result in a breach or constitute
a default under any agreement to which Assignor is subject, or (iii) require any authorizations,
consents, approvals, licenses, exemptions from or filings or registrations with any state,
commonwealth, federal, foreign, territorial, regulatory, or other governmental department,
commission, board, bureau, agency or instrumentality.

7.4 This Agreement constitutes the legal, valid and binding obligation of Assignor enforceable
against Assignor in accordance with its terms and is entered into voluntarily by Assignor. The
transaction represented hereby is an arms-length transaction for fair value.

8. Conditions Precedent to Closing. The closing of the transactions contemplated by
this Agreement (“Closing”) shall take place on the date which is ten (10) days following the
expiration of the Inspection Period, time being of the essence, and shall be effective upon the
occurrence of all of the following:

8.1 Assignor’s receipt of Seven Million and No/100 Dollars ($7,000,000.00) (the “Purchase
Price”) by wire transfer in accordance with wire instructions shown on Schedule I hereto,
such Purchase Price to take into consideration any Earnest Money deposit made by
Assignee, to the extent such Earnest Money deposit has not been applied to any of Assignee’s
obligations relating to the Land, as provided herein; and

 

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8.2 Assignee’s receipt of the original Promissory Note and Guaranty (or a lost note and
guaranty affidavit, if Assignor cannot produce the originals) and, to the extent Assignee has
actual possession of original Loan Documents, all of the other original Loan Documents, in each
case endorsed or otherwise transferred by Assignor, where appropriate, without recourse,
representation or warranty, except as expressly provided in this Agreement.

9. Delivery of Property Documents. Within ten (10) business days after the date of
Closing, to the extent not previously delivered to Assignee, Assignor will, at Assignee’s expense,
ship the Property Documents held in Assignor’s actual possession, if any, to Assignee at Assignee’s
address set forth beneath its signature.

10. Further Actions. Assignor and Assignee hereby covenant and agree to execute and
deliver all such documents and to take all such further actions as any of them may reasonably deem
necessary from time to time to carry out the intent and purpose of this Agreement and to consummate
the transactions contemplated hereby, without material cost, liability or expense to the party
asked to take such further actions.

11. Governing Law. This Agreement and all documents executed in connection herewith
shall be deemed contracts made under the laws of the State of Illinois and shall be construed and
enforced in accordance with and governed by such laws.

12. Default.

12.1 Assignee’s Failure to Close. If Assignee should fail to close the transaction
contemplated herein as and when required under the terms of this Agreement, Assignor may terminate
this Agreement by giving written notice of termination to Assignee. In the event of any such
failure to close by Assignee, Assignor shall be entitled to retain Seventy-Thousand Dollars
($70,000) of the Earnest Money as and for liquidated damages as Assignor’s sole remedy on account
of Assignee’s failure to close, in lieu of any other claims or rights to sue Assignee for money
damages on account of such failure to close, it being acknowledged and agreed that Assignor’s
actual damages are difficult or impossible to ascertain for Assignee’s failure to close hereunder.
After deducting the amount specified above, Assignor shall refund the balance of the Earnest Money
to Assignee, so long as Assignee is not otherwise entitled to retain Earnest Money under the terms
of this Agreement. In the event Assignor shall so terminate this Agreement, (a) the Assignor shall
be entitled to entertain any and all bids for the Loan and Loan Documents from any other parties,
(b) Assignee shall have no rights or interests in or to the Loan and the Loan Documents arising out
of this Agreement, (c) Assignor shall have no duties or obligations to Assignee (other than to
direct the Escrow Agent to refund the balance of the Earnest Money), and (d) Assignee shall have no
rights or claims with respect to the Assignor (other than with respect to the balance of the
Earnest Money). Notwithstanding any such termination, all of the provisions of this Agreement
which by their express terms are intended to survive termination of this Agreement shall survive
such termination and remain in full force and effect.

 

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12.2 Other Assignee Breach or Default. If Assignee should default or breach any other
duties or obligations to be performed by Assignee under this Agreement (other than a failure to
close as and when required under the terms of this Agreement), Assignor may terminate this
Agreement by giving written notice of termination to Assignee. In the event of any such default or
breach by Assignee, Assignor shall be entitled to any applicable remedy at law or in equity. In
the event Assignor shall so terminate this Agreement, (a) the Assignor shall be entitled to
entertain any and all bids for the Loan and Loan Documents from any other parties, (b) Assignee
shall have no rights or interests in or to the Loan and the Loan Documents arising out of this
Agreement, (c) Assignor shall have no duties or obligations to Assignee (other than to direct the
Escrow Agent to refund the Earnest Money, if applicable), and (d) Assignee shall have no rights or
claims with respect to the Assignor (other than with respect to the Earnest Money, if applicable).
Notwithstanding any such termination, all of the provisions of this Agreement which by their
express terms are intended to survive termination of this Agreement shall survive such termination
and remain in full force and effect.

12.3 Breach of Default by Assignor. If the Assignor shall default or breach its
obligations to be performed by Assignor under this Agreement, Assignee shall be entitled, as its
sole and exclusive remedy hereunder, in lieu of any other claims, rights or remedies that otherwise
might be available to Assignee, to enforce the terms of this Agreement by injunctive relief in the
Circuit Court of Cook County, Illinois and receive a refund of the Earnest Money, unless there are
any pending or threatened Claims or Lien Claims under any indemnity undertaking made by Assignee
herein or any unsatisfied restoration obligation of Assignee as provided in Paragraph 3
hereof, in which event, the Assignor shall have the right to withhold a portion of the Earnest
Money up to 150% of the amount of such claim(s) as security for such obligations until such time as
any such claims are paid in full, satisfied or released.

13. Waiver of Claims Against Assignor. Except to the extent expressly provided in
Paragraph 12.3 hereof, Assignee agrees that no claim may be made by Assignee against
Assignor or its shareholders, directors, officers, employees or agents for any special, indirect or
consequential damages related to any breach or wrongful conduct (whether the claim therefore is
based on contract, tort or duty imposed by law) in connection with, arising out of or in any way
related to the transactions contemplated and relationship established by this Agreement, any other
document executed in connection herewith or any of the Loan Documents, or any act, omission or
event occurring in connection therewith. Assignee hereby waives, releases and agrees not to bring
a claim for any such damages, whether or not accrued and whether or not known or suspected to exist
in its favor.

14. Brokers. Assignor and Assignee each represent and warrant to the other that they
have not used the services of any broker in connection with this Agreement. Assignee shall
indemnify, defend and forever save and hold Assignor harmless from and against claims for brokerage
or commission in connection with this transaction by Broker and any other person or entity claiming
by, through or under Assignee.

 

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15. WAIVER OF JURY TRIAL. TO THE FULLEST EXTENT LEGALLY PERMISSIBLE, THE PARTIES
HERETO WAIVE TRIAL BY JURY IN RESPECT OF ANY
CLAIM, DISPUTE OR ACTION ARISING OUT OF, RELATED OR PERTAINING TO THIS AGREEMENT, THE LOAN,
THE LOAN DOCUMENTS OR THE LAND. THIS WAIVER IS KNOWINGLY, WILLINGLY AND VOLUNTARILY MADE AND EACH
PARTY HEREBY REPRESENTS THAT NO REPRESENTATIONS OF FACT OR OPINION HAVE BEEN MADE BY ANY PERSON OR
ENTITY TO INDUCE THIS WAIVER OF TRIAL BY JURY OR TO IN ANY WAY MODIFY OR NULLIFY ITS EFFECT. THIS
PROVISION IS A MATERIAL INDUCEMENT FOR THE PARTIES ENTERING INTO THIS AGREEMENT. EACH PARTY IS
HEREBY AUTHORIZED TO FILE A COPY OF THIS SECTION IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS
WAIVER OF JURY TRIAL. ASSIGNEE REPRESENTS AND WARRANTS THAT IT HAS BEEN REPRESENTED IN THE SIGNING
OF THIS AGREEMENT AND IN THE MAKING OF THIS WAIVER BY INDEPENDENT LEGAL COUNSEL, OR HAS HAD THE
OPPORTUNITY TO BE REPRESENTED BY INDEPENDENT LEGAL COUNSEL SELECTED OF ITS OWN FREE WILL, AND THAT
IT HAS HAD THE OPPORTUNITY TO DISCUSS THIS WAIVER WITH COUNSEL.

16. Indemnity.

16.1 Assignee and the Assignee’s successor and assigns hereby jointly and severally indemnify
and hold the Assignor and its affiliates and their respective officers, employees, consultants,
appraisers, attorneys and agents (“Indemnified Parties”), harmless from and against any and all
liabilities, claims, actions or causes of action, assessments, losses, fines, penalties, costs,
losses, damages and expenses, including attorney’s fees (including, without limitation, contingency
or similar fee arrangements) and expert witness fees, sustained or incurred by Indemnified Parties
as a result of, or arising out of, or by virtue of: (a) the debt relationship evidenced by the Loan
Documents (except to the extent arising or accruing prior to the date of Closing); (b) the
inaccuracy of any representation or warranty made by the Assignee to the Assignor herein; (c) a
breach by the Assignee of any covenant of this Agreement to be performed by the Assignee; (d) any
and all liabilities arising out of any claim based upon breach of contract or the tortious or
unlawful acts or omissions of the Assignee in regard to the Loan; (e) any and all liabilities
arising out of any claim made by any person, organization or association against the Assignee
and/or Assignor with respect to the Loan, except liabilities arising out of any claim made against
Assignor to the extent such claim arises or accrues prior to the date of Closing; and (f) ad
valorem, real property and personal property taxes relating to the Land, whether accrued, due or
payable before or after the date of this Agreement or the date of Closing. The Assignor may defend
any such claim or cause of action brought or asserted against the Assignor arising out of any of
the foregoing set forth in subsections (a)-(f) of this Section at the expense of the Assignee, with
counsel designated by Assignor and to the exclusion of the Assignee. Alternatively, the Assignor
may call upon the Assignee to defend any such action at the Assignee’s sole cost and expense. The
Assignor may, in the Assignor’s sole and exclusive discretion (after consultation with Assignee),
adjust, settle, or compromise any such Claim or cause of action made upon or brought against the
Assignor, and the Assignee shall indemnify the Assignor for any such amounts adjusted, settled or
compromised, as well as all costs and expenses, including attorneys’ fees, (including without
limitation, contingency or similar fee arrangements) incurred in connection therewith. The
Assignee acknowledges and agrees that the

 

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Assignee’s liability and obligations hereunder are unconditional, unlimited and shall continue
in full force and effect at all times hereafter, including, without limitation, following any
subsequent assignment by the Assignee of the Loan Documents, or any of them, unless specifically
terminated in writing by a duly authorized officer of the Assignor.

16.2 The Assignee will not violate any laws, rules or regulations relating to unfair credit
collection practices in connection with the Loan Documents. The Assignee hereby indemnifies the
Assignor and agrees to hold the Assignor harmless from and against any and all claims, demands,
losses, damages, penalties, fines, forfeitures, judgments, legal fees and any other costs, fees,
and expenses incurred by the Assignor as a result of any claim, demand or assertion that, after the
effective date, the Assignor was in any way involved in or had in any way authorized any unlawful
collection practices in connection with the Loan Documents.

17. Notices. All notices hereunder shall be in writing to the address or addresses
set forth below and will be deemed to have been given as of the date delivered or telecopied, or if
by overnight courier service, the day after delivery to such service if overnight delivery is so
designated, or if mailed by registered or certified mail, return receipt requested, the third
business day after being so mailed. Assignor will endeavor to deliver copies of notices given to
Assignee to Assignee’s attorneys, Senn Visciano Rosenstein P.C., 1801 California Street, Suite
4300, Denver, Colorado 80202-2604, Attention Mark A. Senn, Esq. (e-mail: msenn@sennlaw.com).
Assignee will endeavor to deliver copies of notices given to Assignor to Assignor’s attorneys,
Duane Morris LLP, 190 South LaSalle Street, Suite 3700, Chicago, Illinois 60603, Attention: John
R. Weiss, Esq. (e-mail: jrweiss@duanemorris.com).

18. Environmental Matters.

18.1 Assignee expressly acknowledges that there may be certain environmental issues and/or
risks with respect to the Land described in the Loan Documents as securing the Loan (together with
all buildings, structures and improvements situated thereon). Assignor has no information other
than that found in the Loan files regarding the environmental condition of the Land. Assignee has
been expressly advised by Assignor to conduct an independent investigation and inspection of the
Land utilizing such experts as Assignee deems to be necessary in order to make an independent
assessment of all environmental liability and risk with respect to the Land.

18.2 It is Assignee’s sole responsibility to investigate, and before entering into this
Agreement Assignee has, to its satisfaction, investigated the past, present and future
environmental condition of the Land and any real property adjacent to or in the vicinity of the
Land. It is Assignee’s sole responsibility to take whatever action Assignee deems necessary to
protect its interests both before and after the effective date of this Agreement with respect to
Assignee’s potential liability for any present or future hazardous materials contamination and
environmental impairment of the Land and any real property adjacent to or in the vicinity of the
Land or any claims for personal injury or property damage as a result thereof.

 

Page 10

 

18.3 Except as provided in this Agreement, Assignor makes no representation or warranty and
expressly disclaims all implied warranties regarding: the past, present or future environmental
condition, impairment, or hazard materials contamination of the Land and any
real property adjacent to or in the vicinity of the Land and any human health issues or
concerns; any local, state or federal government actions or proceedings regarding the hazardous
materials contamination or environmental impairment of the Land or any real property adjacent to or
in the vicinity of the Land; the cost of remediating or otherwise removing or eliminating any
hazardous materials or environmental impairment of the Land or any real property adjacent to or in
the vicinity of the Land; whether any tenants of the Land or owners, users or tenants of any real
property adjacent to or in the vicinity of the Land have any claims or have suffered any damages,
for personal injury or property damage, as a direct or indirect result of the hazardous materials
contamination and environmental impairment of the Land; and, any existing building code violations
present on the Land.

19. Tax Reporting. On the effective date of this Agreement, Assignor shall be
relieved of, and Assignee shall assume all responsibility for, any tax reporting required with
respect to the Loan, including, without limitation, any reporting which may be required with
respect to debt forgiveness.

20. Assumption of Obligations. The Assignee agrees to be bound, after the date of
Closing, by the terms of the Loan Documents and hereby assumes, as of the date of Closing, all
obligations of the Assignor thereafter accruing under the Loan Documents, including but not limited
to loan administration and servicing obligations.

21. Assignee’s Duties Regarding Pending Litigation.

21.1 If a Loan is the subject of any type of pending litigation, including without limitation,
any bankruptcy proceeding of the Borrower, then the Assignee shall notify the Assignor in writing,
prior to the effective date, of the name of the attorney selected by the Assignee to represent the
Assignee’s interest in such litigation or bankruptcy proceeding. The Assignee shall, immediately
after the effective date, notify the Clerk of the Court and all counsel of record that the Loan
Documents relating to the Loan were assigned by the Assignor to the Assignee. The Assignee shall
have the Assignee’s attorney file appropriate pleadings with the Court (including, without
limitation, if applicable, a proof of claim) immediately after the Closing, substituting the
Assignee’s attorney for the Assignor’s attorney and also removing the Assignor as a party to the
litigation and substituting the Assignee as the real party in interest, all pursuant to forms and
filings as prescribed by the rules of the applicable Court. Copies of all such notices and
pleadings will be provided by the Assignee to the Assignor and the Assignor’s attorney in the
subject litigation or bankruptcy proceeding promptly upon the sending or filing thereof. In the
event the Assignee is unsuccessful in substituting, or does not substitute, the Assignee’s attorney
for the Assignor’s attorney, or in removing the Assignor as a party in interest, then the Assignee
agrees to reimburse the Assignor, upon demand, for the Assignor’s continued reasonable legal
expenses in such litigation or bankruptcy proceeding, after closing of the within Agreement. The
Assignee shall reimburse the Assignor for all legal fees and expenses reasonably incurred
subsequent to the effective date in connection with such litigation or bankruptcy proceeding,
irrespective of whether such legal fees are incurred with legal counsel performing services on an
hourly basis, pursuant to a contingency or similar fee arrangement or otherwise.

 

Page 11

 

21.2 Should the Assignee reach a resolution of a Loan with the Borrower through litigation,
stipulated judgment, or otherwise, at such time, the Assignee shall use commercially reasonable
efforts to obtain from such Borrower a complete release of liability of and covenant not to sue the
Assignor, and its affiliates, and their respective, officers, employees, agents and attorneys.

21.3 All pleadings filed by Assignee in any matter related to the Loan Documents, must comply
with all applicable State and Federal laws, rules and regulations (including, but not limited to,
the Gramm-Leach-Bliley Act; 15 USC 6801 et. seq.) regarding the prohibition on disclosure of
non-public financial information.

22. Reimbursement for Use of Assignor’s Agents. In the event of litigation with
respect to a Loan in which the Assignor or any of the Assignor’s officers, employees, agents or
attorneys are requested or required, by subpoena, court order, or otherwise, to perform any acts,
including but not limited to testifying in litigation, preparing responses to subpoenas or other
legal process or pleadings, and/or performing any review of public or private records such as
tracing funds, whether said litigation is commenced by the Assignee, the Borrower, or any other
party, the Assignee shall indemnify and promptly reimburse the Assignor for all reasonable costs
and expenses incurred in connection therewith; provided, however, that the foregoing shall not
extend to attorney’s fees, costs or expenses incurred by the Assignor in connection with (a) any
dispute arising out of or relating to this Agreement, or (b) any claim based upon breach of
contract or the tortious or unlawful acts or omissions of the Assignor in regard to the Loan prior
to the date of Closing.

23. Transfer and Recordation Taxes; Responsibility for Recording. The Assignee shall
promptly and diligently record, at the Assignee’s sole expense, all assignments and notices,
necessary to effect the transaction described in this Agreement. The Assignee shall be responsible
for, and shall pay when due and payable, all transfer, filing and recording fees and taxes, costs
and expenses, with respect to the filing or recording of any document or instrument contemplated
hereby. The Assignee shall bear sole responsibility for recording all assignments, instruments or
other documents delivered to the Assignee pursuant to this Agreement. The Assignee hereby
indemnifies and holds the Assignor harmless from and against any and all claims, liability, costs,
and expenses arising out of or in connection with the failure of the Assignee to record such
assignments and notices, and to pay any such amounts, on a timely basis.

24. Responsibility for Ad Valorem, Real Property and Personal Property Taxes. The
Assignee shall be responsible for, and shall pay when due and payable, all applicable ad valorem,
real property and personal property taxes, costs and expenses (including, without limitation, any
applicable late fees, penalties and interest). The Assignee hereby indemnifies and holds the
Assignor harmless from and against any and all claims, liability, costs, and expenses arising out
of or in connection with the failure of the Assignee to pay any such amounts, on a timely basis.

 

Page 12

 

25. Exclusivity. Assignee acknowledges that during the Inspection Period, Assignor
shall have the right to continue to market the Loan for sale, and to contact, discuss, negotiate
and otherwise deal with prospective purchasers; solicit, entertain and negotiate offers to sell the
Loan
and the Loan Documents; and execute back-up agreements for the sale of the Loan and the Loan
Documents, provided, however, that for so long as Assignee is not in default of any of its
representations, warranties, covenants and obligations hereunder and this Agreement remains in
effect, Assignor agrees not to close on the sale of the Loan and the Loan Documents to any other
party.

26. Miscellaneous Provisions.

26.1 This Agreement may be signed in counterparts, each of which shall be an original and each
of which taken together shall constitute one agreement.

26.2 This Agreement may not be changed, waived, discharged or terminated orally, but only by
an instrument in writing signed by the party against which enforcement of such change, waiver,
discharge or termination is sought.

26.3 This Agreement shall be valid and binding when executed by the Assignee and the original
or facsimile thereof is received and accepted by the Assignor. The executed Agreement may be sent
via facsimile to the facsimile numbers set forth in the signature blocks below. Facsimile
signatures shall be deemed valid and binding to the same extent as an original signature.

26.4 The agreements, representations and warranties of the Parties contained herein shall
survive the consummation of the transactions contemplated hereby.

26.5 This Agreement shall be binding upon, inure to the benefit of, and be enforceable by the
Parties hereto, their respective successors and assigns. No other person or entity shall be
entitled to claim any right or benefit hereunder, including, without limitation, the status of a
third party beneficiary hereunder.

26.6 Except for any written agreement of confidentiality between Assignor and Assignee, the
License Agreement and the Escrow Agreement which shall survive the consummation of the transactions
contemplated hereby, this Agreement and any assignments or other documents executed in connection
with this Agreement, sets forth the entire agreement and understanding of the Parties hereto with
respect to the transactions contemplated hereby and are intended by the Parties as the final
expression of their agreement and, therefore, incorporate all negotiations of the Parties hereto.
The Parties hereto acknowledge that they are relying on no written or oral agreement,
representation, warranty, or understanding of any kind.

26.7 In case any provision in this Agreement shall be invalid, illegal or unenforceable, such
provision shall be severable from the remainder of this Agreement and the validity, legality, and
enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

26.8 This Agreement may not be amended, waived or modified in any manner without the prior
written consent of the party against whom the amendment, waiver, or modification is sought to be
enforced.

 

Page 13

 

26.9 Each party shall bear their own costs and expenses incurred in negotiating, closing and
carrying out the transactions contemplated by this Agreement.

26.10 The terms and conditions set forth in this Agreement are the product of joint
draftsmanship by all Parties, each being represented by legal counsel of their choice in connection
with this Agreement, and any ambiguities in this Agreement or any documentation prepared pursuant
to or in connection with this Agreement shall not be construed against any of the Parties because
of draftsmanship.

26.11 In the event any party institutes legal proceedings in connection with, or for the
enforcement of this Agreement or any provision hereof, the prevailing party shall be entitled to
recover from the losing party its costs and expenses, including reasonable attorneys’ fees, at both
trial and appellate levels and in any bankruptcy proceeding.

The remainder of this page is intentionally left blank;

signatures appear on the following page.

 

Page 14

 

IN WITNESS WHEREOF, the Parties have duly executed this Loan Sale and Assignment Agreement as
of the date first above written.

	 	 	 	 	 
	 	Assignor:

BANK OF AMERICA, N.A.

 	 
	 	By:  	/s/ Traci Craig
 	 
	 	 	Traci Craig, Vice President 	 
	 	 	Bank of America NA

101 E. Kennedy Blvd. 10th Floor

Tampa, Florida 33602

MC: FL1-400-10-07

Telephone: 813-225-8478

Fascimile:  813-225-8327 	 
	 
	 	Assignee:

Pure Cycle Corporation,

a Colorado corporation

 	 
	 	By:  	/s/ Mark Harding
 	 
	 	 	Mark Harding 	 
	 	 	President and Chief Executive Officer

500 East 8th Avenue

Suite 201

Denver, Colorado 80203

Phone: (303) 292-3456

Fax: (303) 292-3475 	 
	 

 

Page 15

 

EXHIBIT A: DESCRIPTION OF LOAN DOCUMENTS

1. LOAN:

Title of Loan: Promissory Note

Original principal amount: $17,400,000.00

Date of Loan: September 12, 2005

Payable to the order of: LaSalle Bank National Association

2. DEED OF TRUST:

Title of Deed of Trust: Deed of Trust, Security Agreement, Assignment of Leases and Rents and Fixture Filing

Grantor: Sky Ranch LLC, a Colorado limited partnership

Trustee: Public Trustee of Arapahoe County, Colorado

Beneficiary: LaSalle Bank National Association

Dated: September 12, 2005

Recorded as Document Number: B5137538

In the Official Records of Arapahoe County

State of Colorado

On [Date] September 13, 2005

3. ASSIGNMENT OF RENTS:

Title of Document: Assignment of Rents and Leases

Assignor: Sky Ranch LLC, a Colorado limited partnership

Assign: LaSalle Bank National Association

Dated: September 12, 2005

Recorded as Document Number: B5127539

In the Official Records of Arapahoe County

State of Colorado

On [Date] September 13, 2005

 

 

 

4. MODIFICATION AGREEMENT:

Title of Modification Agreement (if any): Modification of Loan Documents

Parties to Modification Agreement: Sky Ranch LLC, Neumann Homes, Inc., and LaSalle Bank National Association

Dated: September 12, 2006

Recorded as Document Number B6154257

In the Official Records of Arapahoe County,

State of Colorado

On [Date] October 30, 2006

5. MODIFICATION AGREEMENT:

Title of Modification Agreement (if any): Second Modification of Loan Documents dated

Parties to Modification Agreement: Sky Ranch LLC, Neumann Homes, Inc., and LaSalle Bank National Association

Dated: March 12, 2007

Recorded as Document Number                     

In the Official Records of Arapahoe County,

State of Colorado

On [Date] March      , 2007

6. SECURITY AGREEMENT:

Title of Security Agreement:                                                             

Date:                               

Executed in favor of:                                                             

7. CERTIFICATE:

Title: Certificate of Representations, Warranties and Covenants

Date: September 12, 2005

Parties: Sky Ranch LLC to LaSalle Bank National Association

8. ENVIRONMENTAL INDEMNITY:

Title of Environmental Agreement: Environmental Indemnity Agreement

Date: September 12, 2005

Executed by: Sky Ranch LLC and Neumann Homes, Inc.

Executed in favor of: LaSalle Bank National Association

 

Page 2

 

9. REMARGINING AGREEMENT:

Title of Remargining Agreement: Remargining Agreement

Date: September 12, 2005

Executed by: Neumann Homes, Inc.

Executed in favor of: LaSalle Bank National Association

10. UCC-1 FINANCING STATEMENT:

Filed with Secretary of State, State of                                         

On [Date]                               

File No.                     

As continued [Date]                               

File No.                     

Recorded with the County Clerk of                                          County

State of                               

At: [Book/Volume           , Page/Instrument] Number                          

As continued [Date}                               

At [Book/Volume           , Page/Instrument]Number                          

11. GUARANTY:

Title of Guaranty: Guaranty of Payment

Name of Guarantor(s): Neumann Homes, Inc., an Illinois corporation

Date: September 12, 2006

Executed in favor of: LaSalle Bank National Association, a national banking association

 

Page 3exv10w2

Exhibit 10.2

LICENSE AGREEMENT

This License Agreement (“Agreement”) is entered into as of July
___, 2010, by and between Sky
Ranch LLC, a Colorado limited liability company, Debtor-in-Possession (“Debtor”) in connection with
the proposed purchase by Pure Cycle Corporation, a Colorado corporation (“Pure Cycle”) of certain
loan documents (each, a “Loan Document” and collectively, the “Loan Documents”) held by Bank of
America, N.A. (the “Bank”) relating to the loan of Sky Ranch LLC, a Colorado limited liability
company (“Borrower”).

RECITALS:

A. Borrower is one of the debtors in the bankruptcy proceeding of Neumann Homes, Inc. et al.
as debtors, pending in the United States Bankruptcy Court for the Northern District of Illinois,
Eastern Division in Bankruptcy Case No. 07-20412 (Jointly Administered).

B. Certain of the Loan Documents encumber land legally described in one or more of the Loan
Documents located in Arapahoe County, Colorado and know as the “Sky Ranch” development (the
“Land”). Debtor remains is in possession of the Land.

C. In connection with Pure Cycle’s proposed purchase of the Loan Documents from the Bank, Pure
Cycle desires to enter upon and inspect the Land and Debtor desires to permit such entry and
inspection, in accordance with the terms and subject to the conditions set forth in this Agreement.

AGREEMENTS:

NOW, THEREFORE, in consideration of the mutual covenants and conditions hereinafter set forth,
the sufficiency of which are hereby acknowledged and agreed by the Parties hereto, the Parties
hereto agree as follows:

1. Recitals. The recitals set forth above are incorporated into this Agreement as if
fully set forth herein.

2. Entry Upon Land; Inspection Period. For a period commencing upon the date hereof
and ending at 5:00 pm Eastern Time on September 30, 2010 (“Inspection Period”), Pure Cycle and its
officers, employees, agents, invitees and contractors (“Pure Cycle’s Representatives”) at Pure
Cycle’s sole option, cost, risk and expense, shall have the non-exclusive right and privilege to
enter upon the Land for the sole purpose of allowing Pure Cycle’s consultant to conduct a phase 1
environmental assessment of the Land. Pure Cycle acknowledges and agrees that in connection with
Pure Cycle’s evaluation of the environmental condition of the Land, (i) it shall not use any
consultant previously engaged by the Bank and (ii) it shall not perform or permit any of its
consultants or contractors to perform any physically invasive tests of the Land (including, without
limitation, drilling, boring, digging, excavation, test pits or the like) without the Debtor’s and
the Bank’s express written consent. Debtor and the Bank, at their option, each shall be permitted
to have a representative present during all such inspections. Pure Cycle’s rights to enter upon
the Land and conduct such phase 1 environmental
assessment of the Land shall expire automatically upon the end of the Inspection Period,
without the necessity of any notice or action on the part of Debtor or the Bank.

 

 

 

3. Insurance. Pure Cycle acknowledges, understands and agrees that, in connection
with and as a condition precedent to entry upon the Land, Pure Cycle and each of Pure Cycle’s
Representatives entering onto the Land shall carry comprehensive general liability insurance with a
combined single limit with respect to each occurrence in an amount of not less than $1,000,000 and
$2,000,000 in the aggregate, insuring all activities and conduct of Pure Cycle and Pure Cycle’s
Representatives while exercising such right of access and naming each of Debtor and the Bank as an
additional insured. Pure Cycle represents and warrants that it carries commercial general
liability insurance with contractual liability endorsement, with a combined single limit with
respect to each occurrence in an amount of not less than $1,000,000 and $2,000,000 in the
aggregate, which insures Pure Cycle’s indemnity obligations hereunder, and will provide Debtor and
the Bank with written evidence of same prior to entry on the Land. Pure Cycle shall promptly
restore any physical damage or alteration of the physical condition of the Land which is caused by
any environmental inspections or activities conducted by Pure Cycle or Pure Cycle’s Representatives
(provided, however, that the foregoing shall not be deemed to allow Pure Cycle to undertake any
physically invasive activities on the Land without first obtaining the express written consent of
each of the Debtor and the Bank), at Pure Cycle’s sole cost and expense and in strict accordance
with all requirements of applicable law.

4. Indemnification. Pure Cycle hereby undertakes and agrees (which agreement shall
survive any purchase of the Loan Documents by Pure Cycle or termination of the Loan Sale Agreement)
to indemnify, defend, and hold Bank and Debtor and their respective officers, directors, owners,
employees, agents and representatives, free and harmless from any loss, injury, damage, claim,
lien, cost or expense, including attorneys’ fees and costs, resulting from any entry upon the Land
by Pure Cycle or Pure Cycle’ Representatives and any environmental tests or inspections conducted
on the Land by Pure Cycle or any of Pure Cycle’ Representatives, provided, however, that the
foregoing shall not be deemed to allow Pure Cycle to undertake any physically invasive testing on
the Land without first obtaining the express written consent of each of the Debtor and the Bank.

5. No Liens. Pure Cycle shall keep the Land free from any liens arising out of any
work performed, materials furnished or obligations incurred by or on behalf of Pure Cycle or Pure
Cycle’s Representatives with respect to any environmental inspection or testing of the Land (a
“Lien Claim”), provided, however, that the foregoing shall not be deemed to allow Pure Cycle to
undertake any physically invasive testing on the Land without first obtaining the express written
consent of each of the Debtor and the Bank. If any such a Lien Claim at any time shall be filed,
Pure Cycle shall cause the same to be discharged of record within thirty (30) days after knowledge
by Pure Cycle thereof by satisfying the same or, if Pure Cycle, in its discretion and in good faith
determines that such Lien Claim should be contested, by obtaining a bond or providing a cash escrow
acceptable to Bank and Debtor in an amount not less than 150% of the maximum amount of such Lien
Claim, including possible interest that may accrue on the same. Failure by Pure Cycle to discharge
such Lien Claim or obtain and provide to Bank and Debtor such bond or cash escrow within the thirty
(30) day said period shall be a breach of this Agreement.

 

2

 

6. No Representations. Pure Cycle acknowledges and agrees that neither Bank, Debtor
nor any of their respective agents, attorneys, officers, employees or contractors have made any
representations or warranties regarding the Land or the truth, accuracy or completeness of any
documentation relating to the Land, and that the Bank has provided such documentation to Pure Cycle
solely as an accommodation to Pure Cycle, and that neither of Bank nor Debtor has undertaken any
independent investigation as to the truth, accuracy or completeness thereof.

7. Damage to Land; Restoration and Indemnification Obligations. If and to the extent
Pure Cycle or any of Pure Cycle’ Representatives shall cause any damage to the Land during the
performance of any environmental tests and inspections of the Land (provided, however, that the
foregoing shall not be deemed to allow Pure Cycle to undertake any physically invasive tests of the
Land without first obtaining the express written consent of each of the Debtor and the Bank), Pure
Cycle undertakes and agrees to restore the Land to as near as may be possible to the condition it
existed prior to the occurrence of such damage. Pure Cycle hereby undertakes and agrees to
indemnify, defend and hold Bank, Debtor and their respective officers, directors, owners,
employees, agents, representatives and employees harmless from any claim, loss, cost, expense,
liability, damage, loss or injury, including reasonable attorneys’ fees, caused by Pure Cycle and
any of the Pure Cycle’ Representatives arising out of or related to such entry upon the Land
including, without limitation, any damage or injury caused by Pure Cycle and Pure Cycle’
Representatives in performing said environmental tests and inspections and any failure of Pure
Cycle to perform its restoration obligations (provided, however, that the foregoing shall not be
deemed to allow Pure Cycle to undertake any physically invasive tests of the Land without first
obtaining the express written consent of each of the Debtor and the Bank). Neither Pure Cycle nor
any of Pure Cycle’ Representatives shall conduct or perform any drilling, boring, digging,
excavation, tests pits or any other physically invasive testing of the Land, or otherwise disturb
any portion of the Land, without in each case first obtaining the express written consent of the
Bank and the Debtor at least 48 hours in advance of any such work.

8. Survival. The duties, undertakings and obligations of Pure Cycle under this
Agreement shall survive and continue in full force and effect following any purchase of the Loan
Documents by Pure Cycle, the termination of the Loan Sale Agreement and/or the termination or
revocation of this Agreement.

9. Disclaimer — Inspection Materials. Pure Cycle acknowledges and agrees that any
engineering reports, architectural reports, feasibility reports, marketing reports, soils reports,
environmental reports, analyses or data or other similar reports, analyses, data or information of
whatever type or kind and any other information which Pure Cycle has received or may hereafter
receive from Bank or Debtor or their respective officers, employees, agents, attorneys, agents or
representatives relating to the Land (collectively, “Property Documentation”) were and are
furnished to Pure Cycle solely as an accommodation, and without representation or warranty of any
kind or nature and on the express condition that Pure Cycle has performed or will perform its own
independent verification of the accuracy, reliability and completeness of such information and that
Pure Cycle will not rely thereon. Pure Cycle hereby fully and forever releases, acquits and
discharges Bank and Debtor and their respective officers, directors, owners, employees, attorneys,
agents or representatives of and from any claims, actions, causes of action, proceedings or
liability, whether known or unknown, arising from the inaccuracy, unreliability or incompleteness
of, or any defect, or mistake in any of the Property Documentation. Pure Cycle
acknowledges and agrees that the terms of this paragraph 10 shall survive and continue in full
force and effect following any purchase of the Loan Documents by Pure Cycle, the termination of the
Loan Sale Agreement and/or the termination or revocation of this Agreement.

 

3

 

10. Default.

A. If Pure Cycle should default or breach its obligations to be performed by Pure Cycle under
this Agreement, Debtor may terminate this Agreement by written notice of termination to Pure Cycle
and Bank and Debtor shall be entitled to pursue any remedies available at law or in equity. In the
event that this Agreement shall be so terminated, Pure Cycle shall have no rights or interests in
or to the Land arising out of this Agreement. Notwithstanding any such termination, all of the
those provisions of this Agreement which by their express terms are intended to survive termination
of this Agreement shall survive such termination and remain in full force and effect.

B. If Debtor shall default or breach its obligations to be performed by Debtor under this
Agreement, Pure Cycle shall be entitled, as its sole and exclusive remedy hereunder, to enforce the
terms of this Agreement by injunctive relief. Pure Cycle hereby expressly waives any right to sue
Debtor and the Bank for any money damages (including consequential, punitive or special damages)
for any default by Debtor hereunder, either before or after the occurrence of any purchase of the
Loan Documents by Pure Cycle, the termination of the Loan Sale Agreement and/or the termination or
revocation of this Agreement.

11. Entire Agreement. It is understood and agreed that all understandings and
agreements heretofore had between the Parties with respect to the subject matter hereof are merged
into this Agreement and the exhibits annexed hereto and the instruments and documents referred to
herein, which alone fully and completely express their agreements, and that neither Party is
relying upon any statement or representation, not embodied in this Agreement, made by the other.
Each Party expressly acknowledges that, except as expressly provided in this Agreement, the other
Party and the agents and representatives of the other Party have not made, and the other Party is
not liable for or bound in any manner by, any express or implied warranties, guaranties, promises,
statements, inducements, representations or information pertaining to the transactions contemplated
hereby.

12. No Assignment. No assignment of this Agreement or of any right, benefit,
privilege or obligation under this Agreement shall be made by any Party without the prior written
consent of the non-assigning Party.

13. Third Party Beneficiary. With the exception of the Bank, who is and shall be a
third party beneficiary of this Agreement, no person or entity not a direct party to this
Agreement, including, without limitation, any employee, customer, vendor, independent contractor,
consultant, lender, creditor or supplier of Pure Cycle, shall derive any rights hereunder or be
construed to be a third party beneficiary hereof.

 

4

 

14. Waiver of Provisions. The terms, covenants and conditions of this Agreement may
be waived only by a written instrument executed by the Party waiving compliance. The failure of
any Party at any time to require performance of any provision hereof shall, in no
manner, affect the right at a later date to enforce the same. No waiver by any Party of any
condition, contingency, or breach of any provision, term, covenant or warranty contained in this
Agreement, whether by conduct or otherwise, shall be deemed to be or construed as a further or
continuing waiver of any such condition, contingency or of the breach of any other provisions,
term, covenant or warranty of this Agreement.

15. Costs of Enforcement. In the event of a default by either Party of its
obligations under this Agreement, the prevailing Party in any action or proceeding in any court in
connection therewith shall be entitled to recover from such other Party its costs and expenses,
including reasonable legal fees and associated court costs.

16. Captions. Captions, titles and headings to articles, sections, or paragraphs in
this Agreement are inserted for convenience of reference only and are not intended to affect the
interpretation or construction of this Agreement.

17. Governing Law. This Agreement shall be governed by and construed in accordance
with the laws of the State of Illinois.

18. Notices. All notices, requests, demands, and other communications under this
Agreement shall be in writing to the address or addresses set forth below and shall be deemed given
when received if served personally, or if delivered by overnight courier service, the day after
delivery to such service if overnight delivery is so designated, or if mailed by registered or
certified mail, return receipt requested, the third business day after being so mailed, as follows:

If to Debtor:

Sky Ranch, LLC

                                                            

                                                            

Attention:                                         

Phone: (       )        -       

Fax:     (       )        -       

With a copy to:

David B. Yelin, Esq.

Duane Morris LLP

190 South LaSalle Street, Suite 3700

Chicago, Illinois 60603

Phone: (312) 499-6700

Fax:     (312) 466-6701

 

5

 

If to Pure Cycle:

Pure Cycle Corporation

Attention: Mark Harding

President and Chief Executive Officer

500 East 8th Avenue, Suite No. 201

Denver, Colorado 80203

Phone: (303) 292-3456

Fax:     (303) 292-3475

With a copy to:

Mark A. Senn, Esq.

Senn Visciano Rosenstein, P.C.

1801 California Street, Suite 4300

Denver, Colorado 80202-2604

Phone: (303)

Fax:     (303)

Any Party may change its address for purposes of this Paragraph 18 by giving the other Parties
written notice of the new address in the manner set forth above. If any notice is tendered to an
addressee in accordance with this Paragraph and delivery thereof is refused by such addressee, such
notice shall be effective upon such tender unless expressly set forth in such notice.

19. Counterparts. It is understood and agreed that this Agreement may be executed in
several counterparts, each of which, for all purposes, shall be deemed to constitute an original
and all of which counterparts, when taken together, shall be deemed to constitute one and the same
agreement, even though all of the Parties may not have executed the same counterpart.

20. Limitation on Debtor’s Liability. Any liability of Debtor under this Agreement
shall be limited solely and exclusively to its interest in the Land, and in no event shall any
personal liability be asserted against Debtor or any of its officers, directors, owners, employees,
attorneys, agents or representatives in connection with this Agreement nor shall any recourse be
had to any other Land or assets of Borrower or Debtor. Pure Cycle acknowledges and agrees that no
agent or other individual or entity having an interest in Debtor shall have any personal liability
for the performance of any of the terms, covenants or conditions to be performed by Debtor under
this Agreement, and Pure Cycle agrees that no personal liability shall be asserted against any such
parties.

The remainder of this page is intentionally left blank;

Signatures appear on the following page

 

6

 

IN WITNESS WHEREOF, the undersigned have executed this License Agreement as of the day and
year first above written.

	 	 	 	 	 
	 	PURE CYCLE CORPORATION,

a Colorado corporation

 	 
	 	By:  	/s/ Mark Harding
 	 
	 	 	Name:  	Mark Harding    	 
	 	 	Title:  	President 	 
	 

	 	 	 	 	 
	 	SKY RANCH, LLC,

a Colorado limited liability company

 	 
	 	By:  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

 

7

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