EXHIBIT 10.4
AGREEMENT
THIS AGREEMENT dated this 8th day of December, 1998, between the Farmers
Reservoir & Irrigation Company ("FRICO") and Eldorado Artesian Springs, Inc.
("Eldorado") is as follows.
WHEREAS, Eldorado desires to acquire a reliable source of replacement water
which is suitable for the purpose of replacing depletions attributable to uses
of water in Eldorado's operations in Eldorado Springs, Colorado; and
WHEREAS, FRICO has facilities and rights which are suitable for storing,
exchanging, and effectuating the delivery of such replacement water to replace
depletions arising from Eldorado's operations; and
WHEREAS, FRICO is presently negotiating an agreement with the Superior
Metropolitan District through which FRICO anticipates that it will acquire one
unit of the Windy Gap Project water ("Windy Gap Unit") from the Northern
Colorado Water Conservancy District;
NOW, THEREFORE, in consideration of an initial payment by Eldorado to FRICO
of $10,000.00, the mutual promises set forth below and other good and valuable
consider-ation, receipt and sufficiency of which is hereby acknowledged, the
parties agree as follows;
1. FRICO will conclude its negotiations with the Superior Metropolitan
District through which FRICO anticipates it will be entitled to acquire the
Windy Gap Unit (equating up to 100 acre-feet of fully consumable water) and the
right to deliver the Windy Gap Unit water through an existing pipeline and a
proposed new pipeline spur into FRICO's Xxxxxxxx Reservoir.
2. Any such agreement between FRICO and the Superior Metropolitan District
("FRICO/Superior Agreement") must be concluded within ninety (90) days of this
Agreement, unless such time period is extended by mutual agreement of the
parties. The terms of the FRICO/Superior Agreement must be fully acceptable to
Eldorado; or the $10,000.00 initial payment will be refunded to Eldorado and
this Agreement will terminate.
3. Upon execution of an acceptable FRICO/Superior Agreement, Eldorado shall
secure the funds for the payment of $490,000.00 to the Superior Metropolitan
District pursuant to the terms of the FRICO/Superior Agreement. Such payment
shall be made at the time of the conveyance of the Windy Gap Unit after entry of
an acceptable decree as described in paragraph 5., below. The said $490,000.00
shall be consideration for the Windy Gap Unit and consideration for FRICO's
right to use the new delivery pipeline to deliver water attributable to the
Windy Gap Unit into Marshall Lake for the benefit of Eldorado.
4. Immediately upon execution of this Agreement, FRICO and Eldorado will
cooperate in obtaining any necessary approvals, authorizations from, and
inclusions into the
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Northern Colorado Water Conservancy District and the Municipal Subdistrict which
will enable use of the Windy Gap Unit by Eldorado for replacement purposes.
5. Prior to final action on inclusion of Eldorado into the Northern
Colorado Water Conservancy District and Municipal Subdistrict, the parties shall
jointly seek the consent of the Northern Colorado Water Conservancy District to
the filing of an application by Eldorado in the District Court, Water Division
No. 1, whereby injurious out-of-priority depletions attributable to Eldorado's
uses of water will be fully replaced by exchange or direct release of water
stored pursuant to the Windy Gap Unit in Xxxxxxxx Reservoir. If such consent is
not forthcoming, such application will be withdrawn and all amounts paid by
Eldorado to FRICO shall be returned. Eldorado will be the sole applicant in the
case, but the parties will cooperate in all significant case management
decisions and on the terms and conditions included in any proposed decree
submitted to the Court for consideration.
6. Within thirty (30) days after obtaining a final decree approving a
mutually acceptable plan for augmentation:
A. FRICO or Eldorado shall exercise the option to purchase the Windy
Gap Unit pursuant to the terms of the FRICO/Superior Agreement, Eldorado shall
make the $490,000.00 payment described in paragraph 3 to Superior and FRICO
shall pay $10,000.00 to Superior;
B. Eldorado shall pay FRICO $500,000.00, payable as follows:
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$150,000 down and the balance of $350,000.00 payable in ten (10) equal annual
installments, including principal and interest at the rate of nine percent (9%)
per annum. This amount shall include consideration for the operation of the
exchange of water within the FRICO System so as to make water attributable to
the Windy Gap Unit available at the headworks of the Community Canal at Eldorado
Springs, Colorado and/or to make direct releases of such water from Marshall
Lake to replace otherwise out-of-priority depletions attributable to Eldorado's
use of water at Eldorado Springs, Colorado, pursuant to the terms and conditions
set forth in the decree described in paragraph 5., above.
7. FRICO agrees that it will operate its system so as to make water
available at the headworks of the Community Canal at Eldorado Springs, Colorado
and/or to make direct releases of such water from Marshall Lake to replace
otherwise out-of-priority depletions attributable to Eldorado's use of water at
Eldorado Springs, Colorado, pursuant to the terms and conditions set forth in
the decree described in paragraph 5., above.
8. FRICO and Eldorado further agree that if Eldorado's future augmentation
requirements shall extend beyond the 100 acre-feet of water, which is the
subject of this Agreement, the parties will negotiate in good faith for
additional water which may be added to the Eldorado augmentation plan pursuant
to terms and conditions similar to those set forth herein.
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Dated the day and date above written.
FARMERS RESERVOIR & ELDORADO ARTESIAN SPRINGS,
IRRIGATION COMPANY INC.
By: /s/ Xxxx Xxxxxx By: /s/ Xxxxxxx X. Xxxxxx
------------------------------------- -------------------------------------
Xxxx Xxxxxx, President Xxxxxxx X. Xxxxxx, President
STATE OF COLORADO )
) ss.
COUNTY OF XXXXX )
The foregoing instrument was acknowledged before me this 8thday of
December, 1998, by Xxxx Xxxxxx, President, Farmers Reservoir & Irrigation
Company.
WITNESS my hand and official seal.
My Commission Expires: November 22, 2001
/s/ Xxxxx X. Xxxxxx
-----------------------------------------
NOTARY PUBLIC
00 Xx. 00xx Xxx.
Xxxxxxxx, XX 00000
Telephone: 000-000-0000
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STATE OF COLORADO )
) ss.
COUNTY OF BOULDER )
The foregoing instrument was acknowledged before me this 8th day of
December, 1998, by Xxxxxxx X. Xxxxxx, President, Eldorado Artesian Springs, Inc.
WITNESS my hand and official seal.
My Commission Expires: 8/8/2001
/s/ Xxxx Moplesh
------------------------------------
NOTARY PUBLIC
000 X. Xxxxxxxx
Xxxxxxx, XX 00000
Telephone: (000) 000-0000
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