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HomeMy WebLinkAbout11367AS AMENDED: 08/11/08 RESOLUTION NO. 11367 A RESOLUTION APPROVING TWO AGREEMENTS FOR THE SALE AND PURCHASE OF PROPERTIES FROM CF &I STEEL, L.P., A DELAWARE LIMITED PARTNERSHIP FOR THE LAKE MINNEQUA PROJECT, AUTHORIZING THE PRESIDENT OF THE CITY COUNCIL TO EXECUTE SAME AND ALL OTHER DOCUMENTS ASSOCIATED THEREWITH BE IT RESOLVED BY THE CITY COUNCIL OF PUEBLO, that SECTION 1. The Agreement For Sale and Purchase of Property (Lands) dated June 27, 2008, between the City and CF &I Steel, L.P., a Delaware Limited Partnership relating to the Minnequa Lake Project, copies of which are attached hereto, having been approved as to form by the City Attorney, are hereby approved. SECTION 2. Staff will complete and report to Council full due diligence pertaining to issues from Council /Citizen concerns. Provide financial impact report (ongoing maintenance /initial costs) to be given to Council three (3) days prior to final approval of the City of Pueblo's purchase of Minnequa Lake project. Purchase is for open space, habitat and storm water detention. Land conditions to be kept in a natural state. Storm water detention with no body /water contact or motorized boating. The conditions of storm water detention will meet the 100 -year storm event. Closing to be on or before September 30, 2008 but have Council final approval of all conditions prior to closing. SECTION 3. The Agreement For Sale and Purchase of Property (Raw Water Pipeline) dated June 27, 2008, between the City and CF &I Steel, L.P., a Delaware Limited Partnership relating to the Minnequa Lake Project, copies of which are attached hereto, having been approved as to form by the City Attorney, are hereby approved. SECTION 4. The President of the City Council is hereby authorized to execute and deliver the aforesaid two Agreements For Sale and Purchase of Property together with all other documents associated therewith in the name of and on behalf of the City of Pueblo, a Municipal Corporation, and the City Clerk is directed to affix the seal of the City thereto and attest same. SECTION 5. The President of City Council is hereby authorized to execute amendments to the aforesaid two Agreements For Sale and Purchase of Property extending the closing dates to September 30, 2008. SECTION 6. Funds in the amount of $1,500,000.00 for the properties included in the aforesaid Agreements For Sale and Purchase of Property are available and will be transferred from Project Account No. ML0601. INTRODUCED August 11, 2008 BY Vera Ortegon Councilperson APPROVE Lim PPI`81f I T' i I LXr Krs . 11361 D �I p �J Background Paper for Proposed RESOLUTION AGENDA ITEM # DATE: AUGUST 11, 2008 DEPARTMENT: PLANNING AND COMMUNITY DEVELOPMENT JERRY M. PACHECO, DIRECTOR TITLE A RESOLUTION APPROVING TWO AGREEMENTS FOR THE SALE AND PURCHASE OF PROPERTIES FROM CF &I STEEL, L.P., A DELAWARE LIMITED PARTNERSHIP FOR THE LAKE MINNEQUA PROJECT, AUTHORIZING THE PRESIDENT OF THE CITY COUNCIL TO EXECUTE SAME AND ALL OTHER DOCUMENTS ASSOCIATED THEREWITH ISSUE Should City Council approve two purchase agreements for properties from CF &I Steel, L.P., a Delaware Limited Partnership relating to the Minnequa Lake Project? RECOMMENDATION Approval of the Resolution. BACKGROUND This resolution approves two purchase agreements for the sale and purchase of properties from CF &I Steel, L.P., a Delaware Limited Partnership for the Minnequa Lake project. The purchase agreements include the following properties: Purchase Agreement (Land) — A $1.1 million purchase of the 243 -acres Lake Minnequa Reservation including the lake property, land surrounding Lake Minnequa, the St. Charles Feeder Ditch property and right -of -way containing 51.88 acres along a corridor extending 3 miles to the St. Charles Feeder Ditch outlet structure below St. Charles Reservoir No. 2. The purchase agreement also includes an access easement across CF &I's property to the St. Charles Feeder Ditch head gate and a Carriage Agreement between CF &I and the Pueblo Board of Water Works which allows water to be transported through the Minnequa Canal and St. Charles Reservoirs No. 2 and No. 3 to the Minnequa Feeder Ditch. 2. Purchase Agreement (Raw Water Pipeline) — $400,000 - This property includes an .84 -acre parcel north of the Lake Minnequa Reservation to Lakeview Avenue that intersects the Minnequa Shores Apartment property. A 24" raw water pipeline that provides water from Minnequa Lake to the steel mill extends through this property, as well as the City's 19" stormwater outlet pipe from the lake. The purchase also includes any and all interest in the 24" raw water pipeline extending from Lakeview Avenue to Jones Avenue a distance of 715' and then along Jones Avenue 4,035' to the western right -of -way of Interstate 25. If City Council authorizes the approval of the purchase agreements, the closing date for the acquisition of the property will be requested to be extended to September 30, 2008. Minnequa Lake is a multi - purpose urban water quality, stormwater, open space and park project that has received $2.3 million in funding from Great Outdoors Colorado (GOCO). The GOCO funds will assist in the purchase of the property. The acquisition of the Minnequa Lake property will be combined with approximately 50 acres owned by the city for a future 300 -acre multi -use regional storm water and water quality treatment facility and open space/ park area. FINANCIAL IMPACT The acquisition cost combined from the two purchase agreements is $1.5 million. The funds to purchase the property are being provided through $900,000 of GOCO funds, $400,000 from the Lower Arkansas River Valley Water Conservancy District, $200,000 in City Stormwater Utility Funds. The property acquisition would be paid from the Minnequa Lake Capital Project Account number ML0601. The Minnequa Lake Project Budget is shown below. Budget for Lake Minnequa Project SOURCES OF FUNDS CASH GOCO Funds 2,300,000 City General Funds 226,400 Lower Ark. Water Conserv. 600,000 Fishing Is Fun 100,000 HUD - EDI Funds 118,600 City Stormwater Funds 725,000 City CTF Funds 300,000 State of Colorado EIAF 650,000 IN -KIND CO Division of Wildlife 10,000 Arkansas Valley Audubon 10,000 Total Sources of Funds 5,040,000 USES OF FUNDS 1. Property Acquisition 1,500,000 2. Design & Engineering 125,000 3. Lake Habitat Enhancement a. Non - native Plant Removal 125,000 b. Stocking Fish 10,000 c. Dredging Lake 200,000 d. Wetland Enhancement 1,165,000 e. Shoreline and Lake Features 535,000 4. Park Improvements a. Parkin /Access 450,000 b. General Park Features 630,000 c. Trails 300,000 Total Uses of Funds 5,040,000 AGREEMENT FOR SALE AND PURCFLASE OF PROPERTY (Lands) Fv l 06/27108 Agreemem made Tune 27, 2008 by and between CF &I Steel, L.P., a Delaware Limited Partnership, 1612 E. Abrlendo Avenue, Pueblo. Colorado. 81004 (herein referred to as "Seller ") and Pueblo, a Municipal Corporation (herein "Purchaser'). L. Sale. Seller shall sell and convey, and the Purchaser shall purchase, all of the real propergr described in Exhibit "_A" attached hereto and incorporated herein located in Pueblo Counw, Colorado, together with all tenements, hereditaments, appurtenances, and easements thereunto belonging or appertaining, all buildings, structures, dams, outfalls, pipelines (except for the Raw Water Pipeline and associated real property to be purchased and sold under a separate Agreement of even date hcrca,ith), fixtures, additions and improvements thereon, and all adjacent vacated streets, all eys and public r ghts of way, if any (the "Proper''). Seller shall also, as part of the consideration for this Agreement, enter into the Water Carnag Agreement, a copy of which is attached hereto as Exhibit "C ". The Property is ben- acquired by Purchaser for a municipal multiple -use project known as the Minnequa Lake Project lithe "Project. ? Fixtures. The term "fixtures" as used in paragraph 1 includes all water conveyance structures, raw water pipelines (except for the Raw Water Pipeline referred to in Section 1), and all other fixtnres, equipment and personal proper- attached or appurtenant to or used in connection with the Property or buildings thereon to the extent presently located on the Property and to the extent owned by Seller except the personal property r described in Exhibit "B" attached hereto. 3. Purchase Price. Unless modified in accordance with Section 17(b) of this Agreement, the purchase price for the Propey ned above, is $US 1,100.000.00 to be allocated and paid as follows: ( a) Payment. The entire purchase price will be paid at the time of closing subject to compliance by Seller with Se el �aranties and representations contained herein. 4. Liens and Encumbrances. The Proper is sold and will be conveyed free of all liens, charges, encumbrances, equities of any nature, rights of part es to or in possession, taxes and assessments, except current year taxes and NO OTHER EXCEPTIONS 5. Marketable Title. Good and marketable title to the Property will be conveyed by Seller to Purchaser by speca warranty deed in proper statutory form duly executed, acknowledged and ready for recording and 'ov bill of sale. Easements to be granted by Seller to Pu chaser identified on Exhibit A a Parcel D -3 and D -4 shall be -ranted by easement in such form and with such conditions as the parties shall agree prior to closing. The legal Rescrlption for the easement identified on Exhibit A as Parcel D -2 shall also be as the parties shall agree prior to closing. 6. Apportionments. The ad valorem taxes for the year of sale for both real and personal properly, water and sewer char -er utilities will be apportioned as of the date of closing. All special assessments, if arty, shall be paid in U by Seller. If the closing shall occur before current year taxes are fixed, the apportionment of taxes shall be based upon the prior year mill levy applied to the latest assessed valuation. 7. Closine. The date of closing shall be as determined by mutual agreement of Seller and Purchaser but shall be no later than Auwst 30 2008. The time and place of closing shall be designated by Purchaser. S. Seller's Representations. Seller represents and warrants: (a) Seller has full power and authority to execute, deliver and perform this Agreement and at closing all acts of Seller necessary and required for such execution, delivery and performance of this Agreement ,rill have been taken. (b) There is not pending or, to the knowledge of Seller, threatened any suit, action or -1- proceedings against or affect m' the Seller or the Pronem before or by a ny court, arbitrator, adm n tranve agena* or other governmental authority that materially and 'adverseh affect the validity, as to the Seller, of any of - the transactions contemplated hereby or the ability of the Seller to perform its obligations hereunder or as contemplated hereby. (c) To the knowledge of Seller, the Property and its present use do not violate any provision of any applicable, federal or state environmental statutes, rules, ordinances, orders, or regulations. Seller warrants that there is not Deriding or, to the knowledge of Seller, threatened, any action or proceeding concerning any environmental condition upon the Properuy or any release or threatened release therefrom of hazardous substances or petroleum -based substances. Purchaser's Representations. Purchaser represents and warrants: (a) The Purchaser is a municipal corporation duly organized, existing and in good standing under the laws of the State of Colorado. (b) The Purchaser has full power and authorit to execute, deliver and perform this Agreement and at the time of closing all acts of the Purchaser necessary for such execution, deliven, and performance of this Agreement will have been taken. (c ) No Other Representations or Warranties. Except as set forth in Section S, Seller has not made any representations or warranties to Purchaser. Purchaser acknowledges that it is purchasing the Land "AS IS ", "WHERE IS ", "WITH ALL FAULTS ", and Purchaser is not relying upon any other statements, representations or warranties by Seller, its agents or representatives. 10. Seller's Dutv to. Perform. Time is of the essence hereof and unless, at the time of closing, the following conditions are satisfied, the Seller shall not be obligated to make this sale, transfer and conveyance provided herein to be made by them or otherwise to effectuate their pan of the purchase and sale herein provided: (a) The representations and warranties set forth in paragraph 9 herein are, on the date hereof and as of the time of closing, correct, subject to any change permitted herein. (b) The Purchaser has complied with its agreements to be performed herein by it prior to the time of closing. (c) The Parties have agreed on the legal description for the easement identified on Exhibit A hereto as D -2, and the form and terms of the easements for the Parcels identified on Exhibit A hereto as D -3 and D -4, and Purchaser has closed on the purchase of the Raw Water Pipeline and associated real property pursuant to the separate Agreement therefore of even date herewith. 11. Purchaser's Duty to Perform. Time is of the essence hereof and unless, at the time of closing, the following conditions are satisfied, the Purchaser shall not be obligated to pay the consideration as provided for herein or otherwise to effectuate its pan of the purchase and sale herein provided: (a) The representations and warranties of the Seller contained herein shall be true in all respects as of the time of closing as though such representations and warranties were then made in exactly the same language and the Seller shall have performed all obligations and complied with all covenants required by this Agreement to be performed or complied adth by Seller prior to the closing date. (b) The Seller has complied with their agreements herein to be performed by them prior to tthe time of closing. -2- (c) The Purchase- shall have received from the Seller the (i) special warranty deed and bill of sale, (ii) title insurance commitment. (iii) Pueblo Counts Treasurer's certificate of personal and real estate taxes and special assessments on the Property and (iv) complete list of personal nropem% (d) The results of environmental inspection by Purchaser do not indieate a level: of contamination of the Prope. -ty, or other adverse environmental conditions, which are deemed unacceptable to Purchaser, in Purchaser's sole discretion. (e) The Seller has tendered to Purchaser a fully executed duplicate original o; the Water Carriage Agreement, an unexecuied copy of which is attached hereto as Exhibit "C." (f) Approval and release of rant funds for land acquisition by the Board of Great Outdoor Colorado Trust. Fund ( "(�OCO ") to the City of Pueblo in the aggregate amount of 5900.000.00 and GOCO's approval of: (i) this Agreement, (ii) app.aisals of the Propem-, (iii) environmenta! repons. so, saris action of all other requirements contained in agreements between Purchaser and GOCO concerning the entitlement to and use of land acquisition grant funds for 1- Minnequa Lake Project. (g) Funds for the payment of the Purchase Price have been dul appropriated by Purchaser's governing body in accordance with law and a sufficient unencumbered balance thereof exists sufficient for payment of he Purc ase Price stated above. (h) The Parties have agreed on the legal description for the easement identified on Exhibit A hereto as D -2 and the form and terms of the easements for Parcels identified on Exhibit A hereto as D -3 and D -4. L. Termination. This Agreement may be terminated upon written notice a any time prior to closing by Purchaser or the Seller it there has been a material misrepresentation or breach of warranty on the part of the other partly in representations and warranties set forth in this Agreement. 13. Possession, Li uidated Damages. Possession of the Proper y shall be delivered by Seller on or before the date and time of c osing. The parties acknowledge that if Purchaser does not obtain possession by this date and time, Purchaser may incur a substantial loss. Consequently, if Seller shall fail or refuse to deliver possession of the Property to Purchaser on or before said daze and time, Seller shall be subject to eviction and shall be liable for liquidated damages in the amount of $50C.00 day. 14. Personal Property. Within 30 da after execution of this Agreement by Seller, Seller will deliver to Purchaser a complete ist o all chattels, fixtures and equipment located on the Prope or used in connection with the Property or buildings thereon and owned by Seller, except the m- e personal proper- described in Exhibit "B ", and a description of same shall be included in the bill of sale to be delivered at closing. 15. Title Insurance (a) Commitment and Title Policy. Within five (5) business days following Purchaser's execution of this Agreement, Seller shall instruct Land America (the "Title Company ") to furnish Purchaser and Seller at Seller's expense, a current standard coverage owner's title commitment (the "Convnitment "), together with copies of all documents shown as exceptions in the Commitment Within thirty (30) days after Purchaser's receipt of the Commitment, together with copies of all documents referenced therein, Purchaser may disapprove the Commitment by written notice to Title Company and Seller ( "Notice of Defect ") specifying the matter shown in the Commtment, if any, which are disapproved by Purchaser ( "Disap roved Exception"). If Seller and Title Company have not received the Notice of Defect from Purchaser on or before 12 o'clock noon on the last day of said thirty (30) days period, then Purchaser's title contingency under this paragraph (a) shall be conclusively deemed satisfied in all respects. (b Title Defects. Provided Purchaser shall have timely and properly delivered Purchaser's Notice of Defect, Seller, within ten 10 days after receiving the Notice of Defect, may deliver to Purchaser a notice stating whether or not Seller will use its reasonable efforts to cure the Disapproved Exception(s) on or before -3- Closing Date. Seller's failure to give timely notice in response to Purchaser's Notice of Defect ect shall constitute Seller's notice that it will not use its reasonable efforts to cure the Disapproved Excepiion(s) on or before Closing Date. If Seller will not use its reasonable efforts to cure the Disapproved 'Exception (s) on or before Closing Date, Purchaser shall be deemed to have terminated the Agreement unless Purchaser delivers to Seller a written notice waiving the Disapproved Exception(s) within. five (il days after Seller's notice to that effect has been given. If the Agreement is terminated as urovided in this paragraph, Seller and Purchaser shall have no further rights or obligations under this Agreement aria Purchaser shall have no right, title or interest in the Propem. (c) Failure to Cure Land. If Seller notifies Purchaser in writing, as provided above, that it will use its reasonable efforts to cure a Disapproved Excepption an d then fa is to cure tl Disapproved Exception as provided in Seller's notice, Purchaser, as its only remeT for Seller having failed to cure the Disapproved Exception, ma)- elect either to (i) waive the Disapproved Exception in writing within two (2) days after Seller's delivery of written nonce o Purchaser that Seller is unable or unw ll ng to cure the disapproved Exception, or (ii) Purchaser Terminates the Agreement. Purchaser shall have no further ii his or obligations under this Agreement or right, title or interest in theland. (d) Reasonable Efforts. Seller's `reasonable efforts ", as used in this Section 15 shall not include any obligation of Seller to incur any frability, to spend any money or to file a lawsuit or maintain any legal action to correct or eliminate any exceptions to title, except that voluntary monetan liens and taxes shall be cured by Seller's payment of money. Except as to voluntan monetary liens, the issuance of a title policy endorsement by Tiife Company on or before Closing Date with respect to any Disapproved Exceptions(s') shall be conclusively deemed to cure the Disapproved Excepion(s) 16. Soecial. Warranty. Seller guarantees and warrants to Purchaser that: (a) All of the creditors of Seller, as of closing date, shall be paid by Seller when their hills are due. (b) Seller, at Seller's expense, shall indemnify and hold Purchaser harmless from mry claim of a creditor of Seller, which claim arises under the Colorado Uniform Commercial Code, or Bulb Sales Act or any similar Acts. 17. Environmental Inspection. (a) During the period between the effective date of this Agreement and Purchaser obtaining possession, Seller grants to Purchaser, and to Purchaser's employees, agents, contractors and consultants, the right to enter upon and inspect the Propem- for the purpose of evaluating and inspecting the Propem'to determine the existence, presence, and extent of any underground storage tanks, petroleum pproducts, volatile organic compounds, lead, lead based paint, asbestos, and of hazardous substances m, on, of upon the Property, whether located above or below the pound surface or in or upon any building or structure located thereon, m connection with Purchaser's intended acquisition of the Property. In perforr ing its evaluation and inspection of the Property, Purchaser shall have the right, at Purchaser's sole cost and expense, to conduct such studies, inspections, evaluations, audits, environmental assessments, and surveys (hereinafter collectively referred to as "environmental assessments" as Purchaser mm- deem appropriate. As pan of such environmental assessments, Purchaser is authorized to perform or conduct any soil, pounda lead or asbestos tests it deems necessary, and to take and analyze samples of soil, groundwater, paint and other materials located in or upon the Propem'. Purchaser is authorized to perform subsurface excavation, bore testing, and drilling upon the Propem' and to establish one or more groundwater monitoring wells. This right to insppect is not intended, nor should it be construed, to impose upon Purchaser any liability or responsibility whatsoever for any containment, mitigation, remediation, removal, or cleanup with respect to any preexisting condition discovered or revealed by Purlaser's activities pursuant to this instrument; provided, however, that Purchaser shall at its own expense properly dispose of samples of soil,. water or other matenals removed by Purchaser from the Propem', and, in the event Purchaser does not P un tease the Propem', Purchaser shaft reasonably correct or repair any physical damage to the Property directly caused by its activities, including the plugging of bore holes and closure of momtonng wells, if any (b) Based upon the foregoing inspection, Purchaser may, with the aid of its employees, agents and consultants, prepare an estimate of the reasonable costs of remediating the presence upon the property of arty underground storage tanks, petroleum products, volatile organic compounds, Tead or other hazardous substances, if any. Purchaser shall provide a copy of the inspection report and estimate of remediation costs to Seller. By mutual agreement, the panics may agree to reduce the Purchase Price set forth in Section 3 of this Agreement by the amount of estimate in order to induce Purchaser to accept the environmental condition of the Property. (c) "AS IS" Condition Purchaser agrees that except as set forth in this Agreement (i) the sale M of the Properry is concluded without warranties, representations of guarantees made by Seller of anv hind or nature, express or implied, (i) the Propem purchased i)v Purchaser on an "A'S 1S ", "VIIIERE IS ", "VII 'T - I ALL FAULTS" bast, with regard to all matters, including without limitation the physical condition of the property and improvements, all legal matters now or hereafter af the Property, all environmental matters and conditions, u d all other material facts and /or issues, now or here,- ter existin1 or ansmg, known or unknown: (iii) Pur -naser exr,ressiv assumes liability for all matters described in this par ao aph Section 17 dricludutg without limitation the physical, environmental, mechanical and seismic condition of the Propene mown or unknown); and (iv) Purchaser's decision to purchase the Property is based only on the investigation, stud and analysis of all aspects of the Property as made by Purchaser and /cu Purchasers agents, employees, representatives and /o: independent contractors (collectively "Purchaser's Investigation"). Except as orherwise specifically provided in this Agreement, it is expressly understood by Purchaser and Seller that all statements and representations made by Seller and Sellers agents and independent contractors (a) are intended by Purchaser to be made only as an accommodation to Purchaser and Purchaser's investigation and not in lieu of Purchaser's Investigation, and (b) are not to be relied or acted on by Purchaser. The parties expressly- stipulate and agree that it is not, and shalt not be deemed to be, reasonable for the Purchaser to rely in any way upon any statements and representations made by Seller and Seller's agent and independent contractors, nor shall any information set forth therein be, or be deemed to be, a representation or warranty by or on behalf of the Seller. 18. Environmental Indemnification. (a) Purchaser - agrees to defend, indemnify and hold harmless the Seller from all claims, losses, damages, penalties, expenses and costs including, but not linuted to, consultants' and atcornevs' fees, remedial, and cleanup costs, incurred by Seller by reason of the presence, use, storage, generation, release, discharge, maintenance, disposal, or removal of Hazardous Materials in, on, under, about, or the Property, or any par, thereof, unless same are attributable to Sellers use, storage, generation or disposal of Hazardous Materials upon the Propem' after the date of its possession in 1993. As used herein, the phrase "Hazardous Materials" means any hazardous or toxic substance, material or waste which is or become regulated by any local government authority, the State of Colorado or the United States government, or any department or agency thereof, and shall include, but not be limited to (1) substances defined as "hazardous waste," "restricted hazardous waste," "hazardous substance" or "hazardous material" under any' applicable federal, state or local law or regulation, (2) asbestos - containing materials, (3) PCBs, (4) p etro leum or petroieum based products, and (3) lead. (b) Purchaser agrees to defend, indemn f<- and hold harmless the Seller from all claims, losses, damages, penalties, expenses and costs, including, but not limited to, consultants' and attorneys fees, remedial, and cleanup costs incurred by Seller by reason oTthe presence of petroleum or petroleum based products in the groundwater or subsurface soil in volume or quantity which exceeds applicable state or federal standards for public park use or mater reservoir use in, on, or under the Propem, which is attnbutable to actions occurring prior to Purchaser's possession. (c) The provisions and covenants of this Section are independent of, and in addition to, Purchaser's rights and obligations as provided in Section 17 of this Agreement. 19. Singular Includes Plural. If two or more persons constitute the Seller, the word "Seller" shall be if it r construed as ead "Se ers" whenever the sense of the Agreement so requires. 20. Risk of Loss. The risk of loss or damage to the Property or to tenants or occupants thereof or their propem by fire or of eil r casualty is assumed by the Seller until the dehvery of possession of the Property to Purchaser. 21. Enforcement. Time is of the essence hereof and this Agreement may be specifically enforced. In the event of ariv litigation arising out of this Agreement, the Court may award to the prevailing party all reasonable costs and expenses, including attorney's fees. 22 Survival of Re resentations. The respective representations, warranties, covenants and agreements of the parties hereto or any instrument de vered or to be delivered hereunder shall survive the time of closing. 23. Notice. Any notice, request, mstruaion or other document to be given hereunder b any pam- hereto to the other shall be in writing and shall be delivered personally or sent by certifieJ mail, postage prepaid; if to Purchaser, addressed to City of Pueblo, Attention: City Manager, 1 City Hall Place, Pueblo, Colorado, 81003; and if to Seller, to Rocky Mountain Steel Mills, Attention: Legal Department, P. 0. Box 316, Pueblo, Colorado, 81002. 24. Expenses. Each pain- hereto shall separately bear its expenses incurred in connection with this Agreement and in connection with all things required to be done by each hereunder, except that costs of recording documents, obtaining title insurance, and other incidental Coss associated with the purchase of the property shag be paid by Purchaser. -5- 2.5. Entire Unders and nos. Th s Ag eement is entered into after full investigation. neither pam'rel; ng upon anv statement of representation of the o her not contained herein. This Agreement contains the entire understanding of the parties hereto relating to the subject matter herein contained and this Agreement cannot be modified or terminated except by written instrument signed by the parties. 26. Govemmn, Laws. This Agreement shall he governed by and construed in accordance with the laws of the State of Colorado. 27. Recording Multiple Counterparts. For the convenience of the parties hereto and to facilitate the filing and recordmp of this Agreement, it ma be executed in one or more counterparts, each of which, shall be deemed to be an ono al, but Z of which shall constitute one and the same Agreement. 28. No Benefit to Third Parties. Noticing herein expressed or implied is intended or shall be construed to confer upon or give any person, cr a or corporation, other than the parties hereto, any rights or remedies under or by reason hereof. 29. No Waiver of Governmental Powers. Nothing in this Agreement is intended, nor shall it be construed. to limit or res ric. he exercise oY anypo ce powers held S Purchaser as a Colorado home rule city; and in the event that Purchaser or Seller for arryy reason rail to conclude the sale and purchase of the Property pursuant to this Agreement, nothing in this Agreement is intended, not shall it be construed, to limit or restria the exercise of Purchaser's power oY nt emine comain with respect to the Property 30. Authority of Undersi -m-d. The persons signing this Agreement and Exhibit "C" on behalf of Seller represent and war ant thaz ey have the requisite power and authority to enter into, execute and deliver this Agreement and Exhibit "C" on behalf of their respective par , and that thereafter upon timely execution by the Purchaser, this Agreement shall be a valid and legally enforceable ag eement in accordance with its terms. 31. Execution by Purchaser. A faxed signature upon ant counte an shall be sufficient to bind the pain for whom made. Upon execution hereof Seller on or before June 30, 2008, and by Purchaser this A� eement shall become a contract b nil ng upon and inuring to the benefit of Seller and Purchaser, their successors and assigns; provided. however, that this Agreement shall not be valid and enforceable until and unless it is approved by duh adopted Resolution of the City Council of Pueblo. VTINESS THE-DUE EXECLMON HEREOF, as of the day and year first above written. ATTEST: - Citv Cle A PPRO\ E D AS TO FORM: City An PURCI LASER: PUEBLO A MUNICIPAL CORPORSTION By President of the City Council SELLER: CFCI STEEL, L.P. By its General Partner, NEW CFLI, INC. By Name Title: Vice- rest ent S� �- EXHfBIT "A" Parcel A: That certain lake or reservoir heretofore known as Lake Minnequa. or Reservoir No. I, located in Sections 11, 12, 13 and 14, Township 21 South, Range 65 West of the 6th P.M., Pueblo County, Colorado, on lands more particularly described as follows: Beginning at a point marked by a sandstone monument. which point is a distance of 1,290 feet South of a monument at the Northeast corner of Lake View Addition. a subdivision of Block 38, Uplands Park, according to a plat of said Lake View Addition filed in the office of the County Clerk and Recorder of Pueblo County thence N 86'45' East, a distance of 76 feet; thence S 38'26' East. a distance of 133 feet: thence S 15'59' East. a distance of 69.1 feet, thence S 00'12' West, a distance of 308.1 feet; thence S 2'17' West, a distance of 373 feet; thence S 16'22' West, a distance of 426.3 feet; thence S 26'29' West, a distance of 152.6 feet; thence S 38'47' West, a distance of 506 feet; thence S 40'29' West, a distance of 75 feet; thence S 46'00' West, a distance of 90.3 feet; thence S 52'28' West. a distance of 307.2 feet to a sandstone firmly set in the g round; thence S 1'22' West, a distance of 1,016 feet; thence S 9 '57' West, a distance of 148.9 feet; thence S 19'19' West. a distance of 214.3 feet; thence S 83'01' West, a distance of 106.9 feet; thence S 29'15' West, a distance of 110.3 feet thence S 48'55' West. a distance of 60.1 feet to a sandstone firmly set in the ground; thence S 86 West, a distance of 223.6 feet; thence N 59`43' West, a distance of 1343.7 feet; thence N 25'25' West, a distance of 306 feet; thence N 01'20" West, a distance of 769.1 feet; thence N 41'06' West, a distance of 324.8 feet to a sandstone firmly set in the ground; thence N 7' 21' West, a distance of 144.4 feet thence N 4 West. a distance of 225.3 feet; thence N 30`48' West, a distance of 330.4 feet; thence N 4'31' West, a distance of 222.3 feet; thence N 23'58' East, a distance of 865.2 feet; thence N 40'05' East, a distance of 130.1 feet to a sandstone firmly set in the ground; thence N 65'35' East, a distance of 91.6 feet; thence N 84'16' East, a distance of 764.3 feet; thence S 84'56' East. a distance of 276 feet; thence S 72'12' East, a distance of 199.6 feet; thence S 68'12' East, a distance of 133.8 feet; thence S 82'06' East. a distance of 342.6 feet; thence N 87'41' East, a distance of 265.3 feet thence S 83'16' East, a distance of 815.9 feet: thence N 76'35' East, a distance of 286.4 feet to the Point of Beginning; As shown as Lake Minnequa on the Plat of Lake Minnequa Reservation, Second Filing, County of Pueblo, State of Colorado; Except portion conveyed to Minnequa University Club recorded October 31, 1927 in Book 671 at page 327, to Godwin- Bev ers Co., Inc., March 23, 1972 in Book 1713 at page 613, to the County of Pueblo. August 13, 1957 in Book 1340 at page 425; Tracts A, B, C. D and E. Lake Minnequa Reservation, Second Filing, County of Pueblo, State of Colorado; Except portions conveyed to the County of Pueblo recorded March 28, 1904 in Book 269 at page 371, School District No. 60, recorded February 27, 1952 in Book 1176 at page 275, Continental Oil Company, recorded January 30, 1952 in Book 1174 at page 207, Godwin - Bevers Co., Inc., recorded March 23, 1972 in Book 1713 at page 613, Minnequa Shores, Inc., September 30, 1975 in Book 1825 at page 763, School District No. 60, October 10, 1975 in Book 1826 at page 736 and Book 1826 at page 738; together with portions of vacated streets as vacated in Resolution recorded November 20, 1936 in Book 830 at page 168. Parcel B: (not included; to be transferred under the separate agreement concerning the Raw Water Pipeline and associated property) Parcel C: An unmarked lot in Block 10 in Mahoney Subdivision, Second Filing, being a portion of the Northwest quarter of Section 14, Township 21 South, Range 65 West of the 6th P.M., Pueblo County, Colorado more particularly described as follows: Commencing at the Northwest corner of the said Section 14; thence due East a distance of 66.00 feet tc a point on the East line of Prairie Avenue, thence due South along said Prairie Avenue, a distance of 1252.89 feet to a point on the North line of Plains Avenue; thence due East, along said Plains Avenue, a distance of 706.27 feet to the true point of beginning; said point being on the Easterly line of Alma Avenue, according to the plat of Mahoney Subdivision, Second Filing, filed for record December 11, 1953, and also being on the Westerly right of way line of the CF & I Corporation's Minnequa Ditch; thence N 8 °41'E along the ditch right of way line a distance of 272.88 feet to a point on the Southerly line of Lot 1 Block 10 of said Mahoney Subdivision, Second Filing; thence S 89'18'W along said South line of Lot 1 a distance of 47.82 feet, to a point on the Easterly line of said Alma Avenue; thence S 10 °00'40 "E along said Easterly line of Alma Avenue, a distance of 275.08 feet, more or less to the true point of beginning. Parcel D: Minnequa Feeder Ditch 1. That certain Ditch, known as the Lake Minnequa Feeder Ditch, located in Section 11 and 14, Township 21 South, Range 65 NN est, described as follows: Beginning at the northwest comer of Section 14, Township 21 South, Range 65 West thence N89 °20'E, 2,012.5 feet; thence SO°43'E, 474.5 feet to the Point of Beginning; thence SO °43'E, 1855 feet: thence S81 °28'W, 43 7.47 feet; thence S88 °55 °W 238.45 feet; thence NO °59'W, 20.4 feet; thence S89 °47 'W, 426.7 feet to a point of Curve' thence alone the arc of a curve to the left with a radius of 25.4 feet, a distance of 39.38 feet; thence SO °57'E 268.7 feet; thence N89 °18'E, 42.0 feet; thence SO °41'E. 1,1043 feet; thence S7O48' 305.80 feet; thence SY38'W, 330.92 feet; thence SV_'S'E, 1, 253.85 feet; thence S30°54'E, 1,53833 feet; thence SO °24'E, 15_.67 feet: thence S89 °36'W,1 25.00 feet; thence NO °24'W, 118,6 feet; thence X30°54'4V', 1,534.55 feet; thence N3 °28'W, 1,290.64 feet; thence N0 340.09 feet; thence N7 °48'E, 340.00 feet; thence NO °41'W, 1,059.10 feet; thence N89 °18'E, 53.0 feet; thence NO °57'E, _ 2 70,24 feet to a point of curve; thence along the are of a curve to the right with a radius of 75.4 feet, a distance of 116.9 feet; thence N89°47'E. 425.9 feet_ thence N82 °03' E, 180.6 feet; thence N5747'E, 119.5 feet, thence N83 61.0 feet; thence S80 °54'E, 49.6 feet; thence N72°07'E, 315.9 feet, to the Point of Beginning. Containing 17.564 acres, more or less. 2. Together with the easement and right of way for the St. Charles Ditch (Mimnequa Feeder Ditch) reserved to Seller by instrument recorded September 24, 1984 in Book 2214, at Page 239. of the records of Pueblo County and described as: an easement and right -of -way sixty (60') feet in width for the St. Charles Ditch (1v4innequa Feeder Canal) being thirty (30') feet on either side of the center -line of the St. Charles ditch in its present location on, over and across the W 1 /2 of Section 1 -3 and the W',! of Section 26, Township 21 South. Range 65 West of the 6`° P.M. (The legal description is to be ac-Teed upon by Seller and Purchaser prior to closing.) 3. Together with an easement and right of way to be granted by Seller to Purchaser for the Mhmequa Feeder Ditch sixty feet (60') in width on either side of the center line of the said Ditch in its present location on over and across the NW '/ of Section 35, Township 21 South, Range 65 West of the Sixth P.M. (The legal description, terms and conditions of this easement are tone agreed upon by Seller and Purchaser poor to closing.) 4. Together with an acees easement and right of way across other lands of Seller in the N '/ of Section 35, Township 21 South, Range 65 West of the 6 6 ' P.M. from Interstate 25 to the headgate of the Mimnequa Feeder Ditch for the use, operation, maintenance, repair and reconstruction of the St. Charles Feeder Ditch and its headgate. (The legal description, terms and conditions of this easement are to be agreed upon by Seller and Purchaser prior to closing.) together with all interest of Seller in vacated streets and alleys adjacent thereto, all easements and other appurtenances thereto, all improvements thereon and all attached fixtures thereon in their present condition and free of encumbrances except as herein provided (collectively the "Property "). fin1-6/ ^_7'2()08 Exhibit "C" NVATER CARRIAGE AGREEMENT THIS WATER CARRIAGE AGREEMENT ( "Aa reement ") is made effective as of the day of .2008 between CF &I Steel, L.P, a Delaware limited partnership ( "CF &I" ), whose address is P.O. Box 316. Pueblo, Co 81002, and the Board of Water Works of Pueblo, Colorado, ( "the Board "), whose address is P.O. Box 400, Pueblo, CO 81002. INTRODUCTORY STATEMENTS A. CF &I owns and operates the Milmequa Canal including diversion and associated structures (the "Canal ") for the diversion and delivery of water from the Arkansas River through the Canal to, among other delivery points, the St. Charles Reservoirs No. 2 and 3, under various existing water rights decreed to the Canal. B. Lake Minnequa is a water storage reservoir located in Sections 11 and 14, T21S, R65W of the 6` P.M., Pueblo, Colorado. C. The City of Pueblo ( "Pueblo ") has purchased Lake Minnequa from CF &I and desires to have water supplied to Lake Minnequa by the Board. D. The Board has agreed with Pueblo to supply to Lake Minnequa water which the Board or Pueblo owns, controls, or has the right to use or convey, and the best means to deliver that water from the Arkansas River to Lake Minnequa is to use the Canal to divert and carry that water from the Arkansas River through the Canal and St. Charles Reservoirs No. 2 and 3 to the outlet of St. Charles Reservoir No. 2. E. CF &I is willing to transport water, that is delivered by the Board ( "Pueblo Water ") to the headgate of the Canal, through the Canal and St. Charles Reservoirs No. 2 and 3 to the outlet of St. Charles Reservoir No. 2. F. The Board is willing to pay CF &I for carriage of Pueblo Water through the Canal and St. Charles Reservoirs No. 2 and 3 to the outlet of St. Charles Reservoir No. 2. NOW, THEREFORE, and in consideration of the premises and mutual promises hereinafter contained, the parties hereto agree as follows: AGREEMENT Tenn The initial term of this Agreement shall be for 25 years. Thereafter, this Agreement may be extended in additional ten year increments upon the Board providing notice to CF &I of its desire to extend the agreement for a successive ten -year period. Each successive extension shall be on the same terms and conditions herein. The Board may terminate this Agreement, or assign its rights and obligations hereunder to the City of Pueblo, a municipal corporation, should it determine that it no longer intends to deliver Pueblo Water to Lake Minnequa. In the event of such assignment or termination, notice of same shall be delivered in writing at least 30 days prior to the effective date of the expiration or intended assignment or termination. 00335715.1 final-0,2 ^_. Delivery of Water The Parties shall cooperate in the scheduling of diversions and deliveries of Pueblo Water to be carried by CF &I for delivery to the outlet of St. Charles Reservoir No. 2. The maximum rate at which Pueblo Water will be carried in the Canal and through St. Charles Reservoirs Nos. 2 and 3 for delivery to the outlet of St. Charles Reservoir No. 2 is 10 c.f.s. CF &I will assess a 16% shrinkage (seepage and evaporation) charge on all such Pueblo Water carried in the Canal for delivery to the outlet of St. Charles Reservoir No. 2. The maximum volume ofPueblo Water to be delivered annually shall be 800 acre -feet, measured at the outlet of St. Charles Reservoir No. 2 into the Lake Minnequa Supply Ditch, or such other structure that may hereafter be used to deliver Pueblo Water from St. Charles Reservoir No. 2. 3. Annual Minimum Pavinent and Carriage Rate: In consideration of this Agreement the Board shall pay CF &I an annual minimum payment of 51,000.00 per year, whether or not Pueblo Water is diverted or carried through the Canal for delivery to Lake Minnequa. The first annual minimum payment is due upon execution of this Agreement and thereafter annually on each anniversary date of this Agreement. In addition, the Board shall pay CF &I a carria rate of ten dollars ($10.00) per acre -foot of Pueblo Water delivered to the outlet of St. Charles Reservoir No. 2 ( "Carriage Rate "). On every fifth anniversary of the date of this Agreement the Carriage Rate per acre -foot will be adjusted by the percentage change occurring during the previous 5 years in the Consumer Price Index for Denver /Boulder, Colorado published by the U.S. Department of Labor. In no event, however, will the per acre -foot Carnage Rate be less than $10.00 in 2007 dollars. 4. Capacities and Priorities CF &I shall not be obligated to accept for carriage at the headgate of the Canal more Pueblo Water than, in CF &I's sole determination, the safe carrying capacity of the Canal will permit. In addition, the Board recognizes and agrees that CF &I owns or has the right to use or may in the future own or have the right to use its own water rights that it diverts and delivers through the Canal ( "CF &I Water Rights ") and has also entered into various agreements for the use of the Canal with the Union Ditch and Water Company dated September 1, 1942, with the City of Florence dated June 20, 1963 and with the City of Florence, Town of Williamsburg. Town of Coal Creek dated May 7, 1986, Pueblo Suburban Development LLC dated May 14, 2003, and the Stephen J. Schnurr Living Trust, hereinafter referred to as the ( "Previous Agreements "). Pueblo and the Board recognize and agree that CF &I Water Rights and water that CF &I is obligated to divert and carry under the Previous Agreements shall have a first priority to the use of Canal capacity. Pueblo Water shall have priority thereafter. CF &I shall not be liable to the Board if it determines that it is necessary for CF &I to reduce the amount of Pueblo Water being diverted into the Canal: (1) to carry water owned or used by CF &1 or water delivered under Previous Agreement rights; (2) to reduce the flow in the Canal to a safe carrying capacity; or (3) for any other safety reasons associated with the operation of the Canal. CF &I agrees that any contracts for the carriage of water by CF &I entered into or amended after the date of this Agreement shall be subordinate to the rights of the Board under this Agreement. d. Right to Maintain Carnage Capacity The Board, after approval of CF &I given in writing shall have the right, but not the obligation, to undertake reasonable and prudent maintenance activities on the Canal, Salt Creek and associated diversion structures so as to maintain their capacity to divert and carry Pueblo Water in the canal and Salt Creek. Any such maintenance activities shall be at the sole cost and liability of the Board. 00_3571 2 final - 6127;3005 6. Measurement Records and Accounting CF &1 shall maintain measurement devices at or near the headgate of the Canal capable ofineasuring all water diverted into the Canal, including the Pueblo Water. CF &I shall maintain daily records of all diversions at the head,-ate of the Canal, including the rate of floN of Pueblo Water being diverted for deliver} to the outlet of St. Charles Resernoir No. 2. The Board shall maintain daily records of all Pueblo Water delivered by the Board to the Canal for delivery to Lake Minnequa. The Board shall install and maintain a measuring device in the Lake Minnequa Supply Ditch, at or near the outlet of St. Charles Reservoir No. 2. The Board shall maintain daily records of all Pueblo Water delivered from St. Charles Reservoir No. _ into the Lake Minnequa Supply Ditch by CF &1 under this Agreement. The Board's measurement of deliveries by CF &I of Pueblo Water to Lake Minnequa Supply Ditch will be used to determine the amount of payment due to CF &I under Paragraph 3 above. All records that any party is required to maintain under this paragraph shall be furnished to any party within a reasonable time after a request is made for same. 7. Payment of Carriage Char-, : CF &I will bill the Board monthly for carriage charges incurred in the prior month. The carriage charge shall be the number of acre -feet of Pueblo Water delivered at the outlet of St. Charles Reservoir No. 2 into the Lake Mirmequa Supply Ditch times the Carriage Rate. The number 1.9835 shall be used to convert the rate of flow in cubic feet per second into acre -feet. Payment shall be made within 45 days of the Board's receipt of the invoice from CF &I. S. No Representations CF &I agrees to operate the Canal in a responsible manner, but makes no representations, warranties or assurances to the Board with respect to quantity of water, water quality, absence of capacity, equipment failure or other circumstances beyond CF &I's reasonable control. 9. Indemnification The Board agrees that, to the extent allowed by law, it will indemnify CF &I against and hold CF &I harmless from any and all claims, loss. damage (whether direct, indirect or consequential), causes of action. suits and liabilities of every kind (including attorney's fees and expenses incurred in the investigation, defense and settlement of any claim or suit or for the payment of any judgment), for injuries to or death of any person, and all damages to and destruction of property by whomsoever owned, including loss of use thereof, resulting directly or indirectly, in whole or in part, from the prosecution or omission of any work or obligation undertaken by or required of the Board by this Agreement, except to the extent that such injuries, death or damages are proximately caused by CF &I's negligence. The Board, to the extent allowed by law, shall defend CF &I against any claims or litigation in connection with any injury, death or damage covered by their indemnity at their expense with counsel reasonably acceptable to CF &I or, at the election of CF &I, shall reimburse CF &I for reasonable legal fees and other costs incurred in CF &I's defense of such claims or litigation. CF &I shall have the right to participate in the defense of any claims or litigation and shall have the right to approve any settlement. Nothing in this Agreement, however, shall be construed as a waiver of any immunity from damages or limitation on damages available to the Board, including sovereign immunity and any limitations on liability provided in the Colorado Governiental hrur unity Act, C.R.S. § 24- 10 -101 etseq (2007). 10. Approvals The Board is solely responsible for obtaining approval, if necessary, of the 0033 3 final -GC7 /3008 Water Court and/or the appropriate State Water Officials to allow the diversion and carriage of the Pueblo Water by CF &I into the Canal and the use of the Pueblo Water by the Board. The Board retains the right to terminate this Agreement if it is unable to obtain appropriate approvals. In the event of such termination by the Board no refund of payments previously made shall be due fi CF &I. 11. No Adverse Legal Position a. The Board agrees that during the term of this Agreement it will not take a legal position adverse to CF &I in connection with the operation or administration of the Canal, Salt Creek, or the water rights associated therewith, except as may be necessary to enforce the terns of this Agreement or to protect from injury water rights owned by the Board. b. CF &I agrees not to oppose, except to protect its water rights from injury any proceeding which the Board may file in the District Court for Water Division No. 2 for the purposes of: (a) obtaining judicial approval to divert Pueblo Water at the Canal headgate and /or (b) to adjudicate water storage rights in Lake Minnequa to be filled from inflow from below St. Charles Reservoir No. 2, or Pueblo Water diverted at the Canal head -ate and thence carried through the Canal to Lake Mirnequa, so long as such water rights or new water rights are subject to the terns and conditions of this Agreement. 13. Notices All notices and other communications that are required or permitted to be given to the Parties under this Agreement shall be sufficient in all respects if given in writing and delivered in person, by overnight courier, or by certified mail, postage prepaid, return receipt requested, to the receiving party at the following address: If to CF &I. to: CF &I Steel, L.P. Attn: Legal Dept. P.O. Box 316 Pueblo, CO 51002 Telephone: If to the Board, to: Executive Director Board of Water Works of Pueblo, Colorado P.O. Box 400 Pueblo, CO 51002 Telephone: (719) 554 -0250 Any party may change the address for giving notice by notice given pursuant to this paragraph. 13. Assivnmen : Except as provided in Paragraph 1 hereof, this Agreement may not be assigned by any party without the prior written consent of the other Party. 14. Third Partv Beneficiary: The City of Pueblo is a third party beneficiary of the Board's carriage of water under this Agreement. 003357151 final-6,' 15. Right to Operate In the event that CF &I ceases to use the Canal, Salt Creek. and /or the St. Charles Reservoirs No. 3 and 2, and their related water diversion, control and measurement structures, or ceases to use the same for delivery of water, then the Board shall have the right, subject to the right previously granted by CF8_I to the Union Ditch Company, to the extent permitted by law, to continue to use and operate those structures, at their own risk and expense, for the purpose of delivery of water to Lake Minnequa. 16. Dispute Resolution If a dispute relating to this Agreement or any claimed default arises between the Parties, the following procedure shall be followed: a. The .Administrative Officers shall hold a meeting promptly, but in no event later than 20 calendar days from the referral of the dispute or notice of default, attended by persons with decision - making authority regarding the dispute, to attempt in good faith to negotiate a resolution of the dispute or to cure the default; provided, however, that no such meeting shall be deemed to vitiate or reduce the obligations and liabilities of the Parties or be deemed a waiver by a party hereto of any remedies to which such party would otherwise be entitled under this Agreement unless otherwise agreed to by the Parties in writing. "_Administrative Officers" collectively shall mean the Manager of Engineering or other designated person for CF &I, and the Executive Director of the Board. I£ within 20 calendar days after such meeting, the Parties have not succeeded in negotiating a resolution of the dispute or cure of the default, they agree to submit the dispute to non - binding mediation and to bear equally the costs of the mediation. Each party shall be responsible for its own attorney's fees through conclusion of compliance with this Paragraph 16. b. The Parties agree to participate in good faith in the mediation and related negotiations for a period of 30 calendar days. The substantive and procedural law of the State of Colorado shall apply to the proceedings. If the Parties are not successful in resolving the dispute through mediation, then the Parties shall be free to terminate the Agreement and to pursue any other legal remedy. 17. Remedies In addition to any other rights and remedies the Parties may have, after compliance with Paragraph 16, Dispute Resolution, the Parties shall be entitled to seek specific performance or injunctive relief restraining the breaching party from doing any act in violation, or compelling performance, of its obligations herein. 18. Termination After compliance with Paragraph 16, Dispute Resolution, should a Party or Parties fail to abide by their promises herein then the non- defaulting party or parties may, at their option, elect to terminate this Agreement, in which event, the terminating party or parties shall serve written notice of such election upon the other patties and the parties hereto shall be freed from all rights and responsibilities arising hereunder thirty (30) days after the service of such notice of termination upon the defaulting party or parties unless the default shall have been by then corrected. 19. Attornevs' Fees After compliance with Paragraph 15, Dispute Resolution, if a party shall 00335715.1 final - 6/27,2008 commence anv action or proceeding aLainst another party in order to enforce the provisions of this Agreement or to recover damages as a result of the alleged breach of any of the provisions of this Agreement, the prevailing party shall be entitled to recover from the other Party all reasonable costs in connection therewith, including reasonable attorneys' fees. 20. Force Majeure Any obligation for water delivery hereunder shall be subject to force majeure, including, without limitation, the following, and any other matters similar or dissimilar thereto if beyond the control of such party: damage to or destruction of Canal, Salt Creek or other conveyance facilities, senior water calls, administration of water rights, flood, drought fire, acts of God, unavoidable casualties, labor disputes or governmental regulations. Notice of force majeure shall be given as soon as practicable after the force majeure event. 21. No Third Partv Beneficiaries Except as stated in Paragraph 14 hereof, this Agreement is intended to describe the rights and responsibilities of and between the Parties and is not intended to, and shall not be deemed to confer any rights upon any persons or entities not named as parties, nor to limit in any ways the powers and responsibilities of the Parties or an) other entity not a party hereto. 22. Governin }Law- Venue This Agreement shall be governed under and controlled by the laws of the State of Colorado. Venue for any lawsuit between Parties concerning this Agreement shall be in the District Court for Pueblo County. 23. Merger and Amendment This Agreement constitutes the entire agreement of the parties and supersedes all prior representations, negotiations or other communications related thereto. This ATeement may be amended only in writing, which writing must be signed by all parties in order to be effective. 24. Binding Effect This Agreement shall be binding upon and inure to the benefit of the parties hereto, their successors or assigns, including all successors and assigns of CF& in the ownership, use, and /or operation of the Canal, Salt Creek, and the St. Charles Reservoirs No. 2 K 3. 25. Authorization and Counterparts Each party hereto represents that its representative signing below is authorized to execute this Agreement on its behalf. This Agreement may be executed in duplicate counterparts. 26. Recordation This .Agreement shall be recorded by Pueblo in the records of the office of Clerk and Recorder of Pueblo County. IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written. 00335715.1 final- 6!_7i''_008 Date: CF& I STEEL., L.P By its General Partner, NEW CF&;I, INC. Vice- President Date: THE BOARD OF WATER WORKS OF PUEBLO,COLORADO 0 Alan C. Hamel Executive Director 00335715.1 "0 AGREEMENT FOR SALE AND PURCHASE OF PROPERTY (Raw Water Pipeline) Fu 1 06/27/08 Agreement made Tune 27. 2008 by and between CF &I Steel, L.P., a Delaware Limited Partnership, 1611 E. Abnendo Avenue. Pueblo. Colorado. 81004 (herein referred to as "Seller ") and the City of Pueblo, a municipal corporation (herein "Purchaser "). L. Sale. Seller shall sell and convey, and the Purchaser shall purchase, all of the real property described in Exhibit "A" attached hereto and incorporated herein, referred to herein as the Raw Water Pipeline, located in Pueblo County, Colorado, together with all tenements, hereditaments, appurtenances, and easements thereunto belonging or appertaining, all buildings, structures, dams, outfalls, pipelines, fixtures, additions and improvements thereon, and all adjacent vacated streets, alleys and public rights of way, if any (the "Property"). ". The Property is being acquired by Purchaser for a municipal mutiple -use project cnowv as the Minnequa Lake Project the "Protect "). 2. Fixtures. The term "fixtures" as used in paragraph 1 includes all water conveyance structures, raw water pipelines, and — other fixtures, equipment and personal pro eny attached or appurtenant to or used in connection with the Property or buildings thereon to the extent pmsent)P located on the Propert and to the extent owned by Seiler except the'personai property described in Exhibit "B" attached hereto. 3. Purchase Price. Unless modified in accordance with Section 17(b) of this Agreement, the purchase price for the Property, as end above, is $US 400,000.00 to be allocated and paid as follows: (a) Payment. The entire purchase price will be paid at the time of closing subject to compliance by Seller with Se el warranties and representations contained herein. 4. Liens and Encumbrances. The Property is sold and will be conveyed free of all liens, charges, encumbrances, equities of any nature, rig is of parries to or in possession, taxes and assessments, except current year taxes and NO OTHER EXCEPTIONS 5. Marketable Title. Good and marketable title to the Property will be conveyed by Seller to Purchaser by special warran y eked n proper statutory form duly executed, acknowledged and ready for recording and by bill of s e. 6. A o�rnonme�nts. The ad valorem taxes for the year of sale for both real and personal property, water and sewer c argeh s, and other utilities will be apportioned as of the date of closing. All special assessments, if any, shall be paid in Kh by Seller. If the closing shall occur before current year taxes are Fixed, me apportionment of taxes shall be based upon the prior year mill levy applied to the latest assessed valuation. 7. Closing. The date of closing shall be as determined by mutual agreement of Seller and Purchaser but shall be no later than August 30, 2008. The time and place of closing shall be designated by Purchaser. 8. Seller's Representations. Seller represents and warrants: (a) Seller has full power and authorit to execute, deliver and perform this Agreement and at closing all acts of Seller- necessary and required for such execution, delivery and performance of this Agreement will have been taken. (b) There is not pending or, to the knowledge of Seller, threatened any suit, action or proceedings against or affecting the Seller or the Property before or by any court, arbitrator, administrative agency or other governmental audiot that materially and adversely affect the validity, as to the Seller, of any of the transactions contemplated hereby or the ability of the Seller to perform its obligations hereunder or as contemplated hereby- -1- (c) To the knowledge of Seller, the Property and its present use do not violate any provision of any applicable, federal or state environ enial statutes, Hiles, ordinances, orders, or regulations. Seller warrants that there is not pending or, to the knowledge of Seller, threatened, any action or proceeding concerning any environmental[ condition upon the Property or any release or threatened release therefrom of hazardous substances or petroleum -based substances. Purchaser's Representations. Purchaser represents and warrants: (a) The Purchaser is a municipal corporation duly organized, existing and in good standing under the laws of the State of Colorado. (b) The Purchaser has full power and authority to execute, deliver and perform this Agreement and at the time of closing all acts of the Purchaser necessary for such execution, delivery and Performance of this Agreement will have been taken. (c ) No Other Representations or Warranties. Except as set forth in Section 8, Seller has not made any representations or warranties to Purchaser. Purchaser acknowledges that it is purchasing the Land "AS IS", "WFIERE IS ", "WI1 I ALL FAULTS ", and Purchaser is not relying upon any other statements, representations or warranties by Seller, its agents or representatives. 1G. Seller's Duty to. Perform. Time is of the essence hereof and unless, at the time of closing, the following conditions are satisfied, the Seller shall not be obligated to make this sale, transfer and conveyance provided herein to be made by them or otherwise to effectuate their part of the purchase and sale herein provided: (a) The representations and warranties set forth in paragraph 9 herein are, on the date hereof and as of the time of closing, correct, subject to any change permitted herein. (b) The Purchaser has complied with its agreements to be performed herein by it prior to the time of closing. (c) The Purchaser has closed on the purchase of the real property consisting of approximatly 278 acres pursuant to the separate Agreement therefore of even date herewith. 11. Purchaser's Duty to Perform. Time is of the essence hereof and unless, at the time of closing, the following conditions are satisfied, the Purchaser shall not be obligated to pay the consideration as provided for herein or otherwise to effectuate its part of the purchase and sale herein provided: (a) The representations and warranties of the Seller contained herein shall be true in all respects as of the time of closing as though such representations and warranties were then made in exactly the same language and the Seller shall have performed all obligations and complied with all covenants required by this Agreement to be performed or complied with by Seller prior to the closing date. (b) The Seller has complied with their agreements herein to be performed by them prior to tthe time of closing. -2- (c) The Purchaser shall have received from the Seller the (i) special warranty deed and bill of sale, (ii) title insurance commitment, (iii) Pueblo County Treasurer's certificate of personal and real estate taxes and special assessments on the Property, and (iv) complete list of personal property. (d) The results of environmental inspection by Purchaser do not indicate a level of contamination o{ the Property, or other adverse environmental conditions, which are deemed unacceptable to Purchaser, in Purchaser's sole discretion. (e) The Seller has tendered to Purchaser a fully executed duplicate original of the Water Carriage Agreement, an unexecuted copy of which is attached hereto as Exhibit "C." (f) Approval and release of grant funds for land acquisition by the Board of Great Outdoor Colorado Trust Fund ( "U ") to the Cin' of Pueblo in the aggregate amount of $900 000.00 and GOCO's approval of: (i) this Agreement, (u) appraisals of the Property, (in) environmental reports. Also, ttaction of all other requirements contained in a rcements between Purchaser and GOCO concerning the entitlement to and use of land acquisition grant funds for t ie klinnequa Lake Project. (g) Funds for the payment of the Purchase Price have been duly appropriated by Purchaser's ovemin- body in accordance with law and a sufficient unencumbered balance thereof'exists sufficient for payment of Tie PurcEase Price stated above. L. Termination. This Agreement may be terminated upon written notice at any time prior to closing by Purchaser or the l eler i there has been a material misrepresentation or breach of warranty on the part of the other party in representations and warranties set forth in this Agreement. 13. Possession. Li uidated Damages. Possession of the Prooerry shall be delivered by Seller on or before the date and time of closing. The parties acknowledge that if Purchaser does not obtain possession by this date and time, Purchaser may incur a substantial loss. Consequently, if Seller shall fail or refuse to deliver possession of the Propem'to Purchaser on or before said date and time, Seller shall be subject to eviction and shall be liable for liquidated damages in the amount of $500.00 day. 14. Personal Property. ty. Within 30 days after execution of this Agreement by Seller, Seller will deliver to Purchaser a complete list of all chattels, fixtures and equipment located on the Prone ry or used n connection with he Property or buildings thereon and owned by Seller, except the personal prope y described in Exhibit "B ", and a description of same shall be included in the bill of sale to be delivered at closing. 15. Tide Insurance (a) Commitment and Title Policy. Within five (5) business days following Purchaser's execution of this Agreement, Seller shall instruct Land America (the "Title Company ") co furnish Purchaser and Seller at Seller's expense, a current standard covera m a e owner's title comitment (the "Comm men "), together with copies of all documents shown as exceptions in the Commitment. Within thirty (30) days after Purchaser's receipt of the Commitment, together with copies of all documents referenced therein, Purchaser may disapprove the Commitment by written notice to Title Company and Seller ( "_Notice of Defect ") specifying the matter shown in the Commitment, if any, which are disapproved by Purchaser ( "Disapproved Exception'). If Seller and Title Company have not received the Notice of Defect from Purchaser on or before 12 o'clock noon on the last day of said thing (30) days period, then Purchaser's title contingency under this paragraph (a) shall be conclusively deemed satisfied in all respects, (b) Title Defects. Provided Purchaser shall have timely and properly delivered Purchaser's Notice of Defect, Seller, within days after receiving the Notice of Defect, may deliver to Purchaser a notice stating whether or not Seller will use its reasonable efforts to cure the Disapproved Exception(s) on or before Closing Date. Seller's failure to give timely notice in response to Purchaser's Notice of Defect shall constitute Seller's notice that it will not use its reasonable efforts to cure the D sapproved Exception(s) on or before Closing Date. If Seller will not use its reasonable efforts to cure the Disapproved Exception(s) on or before Closing Date, Krchaser r shall be deemed to have terminated the Agreement unless Purchaser delivers to Seller a written notice waiving the Disapproved Exception(s) within five (3) days after Seller's notice to that effect has been given. If the Agreement is terminated as provided in this paragraph Seller and Purchaser shall have no further rights or obligations tinder this Agreement and Purchaser shall have no right, title or interest in the Propern-- (c) Failure to Cure Land, If Seller notifies Purchaser in writing, as rovided above, that it will use its reasonable efforts to cure a Exec ption and then fails m cure t at Disapproved Exception as provided in Seller's notice, Purchaser, as us only remed - for Seller having failed to cure the Disapproved Exception, may elect either to (i) waive the Disapproved Exception in writing within two (2) days after Sellers delivery of written notice to Purchaser that Seller is unable or unadlling to cure the Disapproved Exception, or (ii) Purchaser terminates the Agreement. Purchaser shall have no further rights or obligations under this Agreement or right, title or interest in the (d) Reasonable Efforts. Seller's "reasonable efforts", as used in this Section 15 shall not include any obligation of Se er to i nability, to spend any money or to file a lawsuit or maintain any legal action to correct or eliminate any exceptions to title, except chat voluntary monetary liens and taxes shall be cured � yy Seller's payment of money. Except as to voluntary Mercian liens, the issuance of a title policy endorsement by Ti 1e Company on or before Closing Date with respect to any Disapproved Exceptions(s) shall be conclusively deemed to cure the Disapproved Exception(s) 16. Special Warranty. Seller guarantees and warrants to Purchaser that: (a) All of the creditors of Seller, as of closing date, shall be paid by Seller when their bills are due. (b) Seller, at Seller's expense, shall indemnify and hold Purchaser harmless from an v claim of a creditor of Seller, which claim arises under the Colorado Uniform Commercial Code, or Bulk Sales Act or any similar Acts. 17. Environmental Inspection. (a) During the period between the effective date of this Agreement and Purchaser obtaining possession, Seller grants to Purchaser, and to Purchaser's employees, agents, contractors and consultants, the right to enter upon and inspect the Pr7em for the purpose of evaluating and inspecting the Property to determine the existence, presence, and extent of any underground storage tanks, petroleum pproducts, volatile organic compounds, lead, lead based paint, asbestos, and of hazardous substances m, on, or upon the Property, whether located above or below the ground surface or in or upon any building or structure located thereon, in connection with Purchaser's intended acouis¢ ion of the Proper In performing its evaluation and inspection of the Property, Purchaser shall have the right, at Purchaser's sole cost and expense, to conduct such studies, inspections, evaluations, audits, environmental assessments, and surveys (hereinafter collectively referred to as "environmental assessments" as Purchaser may deem appropriate. As pan of such envirorunental assessments, Purchaser is authorized to perform or conduct any soil , groundwater, lead or an asbestos tests it deems necessary, and to take and analyze samples of soil, groundwater, paint d ogler materials located in or upon the Property. Purchaser is authorized to perform subsurface excavation, bore testing, and drilling upon the Prope4v and to establish one or more groundwater monitoring wells. This right to inspect is not intended, nor should it be construed, to impose upon Pur&aser any liability or responsibility whatsoever for any containment, mitigation, remediation, removal, or cleanup with respect to any preexisting condition discovered or reveaed by Purchaser's activities pursuant to this instrument; provided, however, that Purchaser shall at its own expense properly dispose of sam of soil,. water or other materials removed by Purchaser from the Property, and, in the event Purchaser does not ppurchase the Property, Purchaser shall reasonably correct or repair any physical damage to the Propem directly caused by its activities, including the plugging of bore holes and closure of momtoring wells, if any. Based upon the foregoing inspection, Purchaser may, with the aid of its employees, agents and consultants, prepare an estimate of the reasonable costs of remediating the presence upon the property of any underground storage tanks, petroleum products, volatile organic compounds, lead or other hazardous substances, if am'. Purchaser shall provide a copy of the inspection report and estimate of remediation costs to Seller. By mutual agreement, the parties may agree to reduce the Purchase Price set forth in Section 3 of this Agreement by the amount of estimate in order to induce Purchaser to accept the environmental condition of the Property. (c) "AS IS" Condition Purchaser agrees that except as set forth in this Agreement (i) the safe of the Property is concluded without warranties, representations or guarantees made by Seller of anv kind or nature, express or implied, (d) the Property purchased by Purchaser on an "AS IS ", "WHERE IS ", "WITI - I ALL FAULTS" basis with regard to all matters, including without limitation the physical condition of the Property and -4- improvements, all le matters now or hereafter affecting the Property, all environmental matters and conditions, and all other itateril facts and/or issues, now or hereafter existing or arising, known or unknown; (iii) Purchaser expressly assumes liability for all matters described in this paragraph Section 17 (including without limitation the physical, environmental, mechanical and seismic condition of the Property known or unknown); and (iv) Pu chaser's decision to purchase the Property is based only on the investigation, study and analysis of all aspects of the Property as made by Purchaser and /or Purchaser's agents, employees, representatives and/or independent contractors '(collectively, "Purchaser's Investigation "). Except as otherwise specifically provided in this Agreement, it is expressly understood by Purchaser and Seller that all statements and represenratiors made by Seller and Seller's agents and independent contractors (a) are intended by Purchaser to be made onk as an accommodation to Purchaser and Purchaser's investigation and not in lieu of Purchaser's Investigation, and (b) are not to be relied or acted on by Purchaser. The parties expressly stipulate and agree that it is not, and shall not be deemed to be, reasonable for the Purchaser to rely in any w•av upon any statements and representations made by Seller and Seller's agent and independent contractors, nor shall any information set forth therein be, or be deemed to be, a representation or warranty by or on behalf of the Seller. 18. Environmental Indemnification. (a) Purchaser agrees to defend, indemnify and hold harmless the Seller from all claims, losses, damages, pena ties, expenses and costs mch' fig, but .not m ted to, con sultan s and a omevs' fees, remedial, and cleanup con' near ed by Seller by reason of the presence, use, storage, generation, release, discharge, maintenance, d sposa, or removal of Hazardous Materials in, on, under, about, or from the Proper y, or any par thereof, unless same are at butable to Seller's use, s orage, generation or d spos l of I Iaza dous NIa eta s upon the Proper y after the date of its possession in 1993. As used herein, the phrase "Hazardous Materials" means any hazardous or toxic subs ante, mater a or waste which is or become regulated by any local government author ty -, the State of Colorado or the Urn ted States Bove nment, or any de "t unem or agen y hereot, and shall nclude, but not be limited to (1) subs antes defined as "h zardous was e," "yes nted hazardous was e," "hazardous substance" or "hazardous material" uncle any applicable federa ,state or local law or regulation, (2) asbestos -coma n fig mate a s, (3) PCBs, (4) petroleum or petroleum based products, and (5) lead. (b) Purchaser agrees to defend, indemnity and hold harmless the Seller from all claims, losses, damages, penalties, expenses and costs, including, but not l m ted m, consultants' and a orneys' fees, remedial, and cleanup costs incurred by Seller by reason of the presence of petroleum or petroleum based products in the groundwater or subsurface sod in volume or quantity which exceeds applicable state or federal standards for public park use or water reservoir use in, on, or under the Property, which is attributable to actions occurring prior to Purchaser's possession. (c) The provisions and covenants of this Section are independent of, and in addition to, Purchaser's rights and obligations as provided in Section 17 of this Agreement. 19. Sinwlar Includes Plural. If two or more persons constitute the Seller, the word "Seller" shall be construed as if it read "Sellers" whenever the sense of the Agreement so requires. 20. Risk of Loss. The risk of loss or dama to the Propemy or to tenants or occupants thereof or their property &re orb ualty is assumed by the Seller until the delivery of possession of the Property to Purchaser. 21. Enforcement. Time is of the essence hereof and this Agreement may be specifically enforced. In the event of any litigation arising out of this Agreement, the Court may award to the prevailing party all reasonable costs and expenses, mcluding attorney's fees. 22 Survival of Re resentations. The respective representations, warranties, covenants and agreements of the parties hereto or any instrument e tiered or to be delivered hereunder shall survive the time of closing. 23. Notice. Any notice, request, instruction or other document to be -iven hereunder by any party hereto to the other shall be m writing and shall be delivered personally or sent by cer[ifiA mail, postage prepaid; if to Purchaser, addressed to City of Pueblo, Attention: City Manager, 1 City Hall Place, Pueblo, Colorado, 81003; and if to Seller, to Rocky Mountain Steel Mills, Attention: Legal Department, P. 0. Box 316, Pueblo, Colorado, 81002. 24. Expenses, Each pain hereto shall separately bear its expenses incurred in connection with this Agreement and in connection with all things required to be done by each hereunder, except that costs of recording documents, obtaining title insurance, and other incidental costs associated with the purchase of the property shall be paid by Purchaser. 25. Entire Understandings. This Agreement is entered into after full investigation, neither pain relying upon any statement or representation of the other not contained herein. This Agreement contains the entire understanding -5- of the parties hereto relating to the subject matter herein contained and this Agreement cannot be modified or terminated except by written instrument signed by the parties. 26. Governing Laws. This Agreement shall be govemed by and construed in accordance with the laws of the State of Colorado. 27. Recording Multiple Counterparts. For the convenience of the parties hereto and to facilitate the filing and recording of this Agreement, it may be executed in one or more counterparts, each of which shall be deemed to be an onginal, but -Z of which shall constitute one and the same Agreement. 28. No Benefit to Third Parties. Nothing herein expressed or implied is intended or shall be construed to confer upon or give any person, firm or corporation, other than the parties hereto, any rights or . emedies under or by reason hereof. 29. No V "a ver of Governmenta Powers. Noth ngg in this Ag eement is intended, nor shall it be construed, to limit or restrict the exercise o any olice powers held b Purchaser as a Colorado home rule city; and in the event that Purchaser or Seller for any reason fail to conclude the sale and purchase of the Property pursuant to this Agreement, nothing in this Agreement is intended, nor shall it be construed, to limit or restrict the exercise of Purchaser's power of eminent Domain with respect to the Property. 30. Authority of Undersigued. The persons signing this Agreement and Exhibit "C" on behalf of Seller represent and warrant t at they have the requisite power and authority to enter into, execute and deliver this Agreement and Exhibit "C" on behalf of their respective party and that thereafter upon timely execution by the Purchaser, this Agreement shall be a valid and legally enforceable agreement in accordance with its terms. 31. Execution by Purchaser. A faxed signature upon any counterpart shall be sufficient to bind the party for whom made. Upon execution hereof by Seller on or before June 3C, 2008, and by Purchaser this Agreement shall become a contract binding upon and inuring to the benefit of Seller and Purchaser, their successors and assigns; provided, however, that this Agreement shall not be valid and enforceable until and unless it is approved by duly adopted Resolution of the City Council of Pueblo. '%TFNESS THE DUE EXECUTION HEREOF, as of the day and year first above written. -. 4 ATTEST:` PURCHASER: PUEBLO, 'ICII AL RA By President of the City Council APPROVED AS TO FORM: City Attorney SELLER: CF &I STEEL, L.P. By its General Partner, NEW CF &L INC. pie p��h MOM I� — -7- Exhibit A Legal Description (Raw Water Pipeline and associated real property) (Parcel B) A tract of land in Lake Minnequa Reservation, Second Filing, Pueblo, County, Colorado, being a strip of land 33.00 feet in width on each side of the following described centerline: Beginning at the intersection of the South line of Lakeview Avenue and the centerline of Carteret Street extended; thence South a distance of 346.75 feet, to a point of curve; thence along the arc of a curve to the right with a radius of 390.07 feet, a distance of 219.31 feet, to a point; thence S 32 a distance of 47.87 feet to a point of intersection with the South line of that property conveyed in Book 1713 at page 613, said point of intersection being located S 84 °19'52 "E, a distance of 521.58 feet from the Southwest corner of said property; together with that portion described in Deed recorded September 30, 1975 in Book 1825 at pages 761; less and except that portion conveyed in Deed recorded September 30, 1975 in Book 1825 at page 763. ;together with all of Seller's right, title and interest in and to the Raw Water Pipeline and its appurtenances located between the outfall of Lake Minnequa at its upstream end and the westerly boundary of the Colorado Department of Transportation Right of Way for Interstate 25 at its downstream end, as said pipeline is located under, through and along Parcel B, Carteret Avenue, Jones Avenue and Lakeview Avenue in Pueblo, Colorado, together with all easements and rights of way, if any, for said pipeline. (collectively the "Property ") final - 6/27/2008 Exhibit "C" WATER CARRIAGE AGREEMENT THIS WATER CARRIAGE AGREEMENT ('Agreement ") is made effective as of the day of , 2008 between CF &I Steel, L.P, a Delaware limited partnership ( "CF &P'), whose address is P.O. Box 316, Pueblo, Co 81002, and the Board of Water Works of Pueblo, Colorado, ('the Board "), whose address is P.O. Box 400, Pueblo, CO 81002. INTRODUCTORY STATEMENTS A. CF &I owns and operates the Minnequa Canal including diversion and associated structures (the "Canal') for the diversion and delivery of water from the Arkansas River through the Canal to, among other delivery points, the St. Charles Reservoirs No. 2 and 3, under various existing water rights decreed to the Canal. B. Lake Minnequa is a water storage reservoir located in Sections 11 and 14, T21 S, R65W of the 6 1h P.M., Pueblo, Colorado. C. The City of Pueblo (`Pueblo') has purchased Lake Minnequa from CF &I and desires to have water supplied to Lake Minnequa by the Board. D. The Board has agreed with Pueblo to supply to Lake Minnequa water which the Board or Pueblo owns, controls, or has the right to use or convey, and the best means to deliver that water from the Arkansas River to Lake Minnequa is to use the Canal to divert and carry that water from the Arkansas River through the Canal and St. Charles Reservoirs No. 2 and 3 to the outlet of St. Charles Reservoir No. 2. E. CF &I is willing to transport water, that is delivered by the Board (`Pueblo Water ") to the headgate of the Canal, through the Canal and St. Charles Reservoirs No. 2 and 3 to the outlet of St. Charles Reservoir No. 2. F. The Board is willing to pay CF &I for carriage of Pueblo Water through the Canal and St. Charles Reservoirs No. 2 and 3 to the outlet of St. Charles Reservoir No. 2. NOW, THEREFORE, and in consideration of the premises and mutual promises hereinafter contained, the parties hereto agree as follows: AGREEMENT Term: The initial term of this Agreement shall be for 25 years. Thereafter, this Agreement may be extended in additional ten year increments upon the Board providing notice to CF &I of its desire to extend the agreement for a successive ten -year period. Each successive extension shall be on the same terms and conditions herein. The Board may terminate this Agreement, or assign its rights and obligations hereunder to the City of Pueblo, a municipal corporation, should it determine that it no longer intends to deliver Pueblo Water to Lake Minnequa. In the event of such assignment or termination, notice of same shall be delivered in writing at least 30 days prior to the effective date of the expiration or intended assignment or termination. 00335715.1 final- 6/27/2008 2. Delivery of Water The Parties shall cooperate in the scheduling of diversions and deliveries of Pueblo Water to be carried by CF &I for delivery to the outlet of St. Charles Reservoir No. 2. The maximum rate at which Pueblo Water will be carried in the Canal and through St. Charles Reservoirs Nos. 2 and 3 for delivery to the outlet of St. Charles Reservoir No. 2 is 10 c.f.s. CF &I will assess a 16% shrinkage (seepage and evaporation) charge on all such Pueblo Water carried in the Canal for delivery to the outlet of St. Charles Reservoir No. 2. The maximum volume of Pueblo Water to be delivered annually shall be 800 acre -feet, measured at the outlet of St. Charles Reservoir No. 2 into the Lake Minnequa Supply Ditch, or such other structure that may hereafter be used to deliver Pueblo Water from St. Charles Reservoir No. 2. Annual Minimum Payment and Carriage Rate In consideration of this Agreement, the Board shall pay CF &I an annual minimum payment of $1,000.00 per year, whether or not Pueblo Water is diverted or carried through the Canal for delivery to Lake Minnequa. The first annual minimum payment is due upon execution of this Agreement and thereafter annually on each anniversary date of this Agreement. In addition, the Board shall pay CF &I a carriage rate of ten dollars ($10.00) per acre -foot of Pueblo Water delivered to the outlet of St. Charles Reservoir No. 2 ( "Carriage Rate "). On every fifth anniversary of the date of this Agreement the Carriage Rate per acre -foot will be adjusted by the percentage change occurring during the previous 5 years in the Consumer Price Index for Denver/Boulder, Colorado published by the U.S. Department of Labor. In no event, however, will the per acre -foot Carriage Rate be less than $10.00 in 2007 dollars. 4. Cauacities and Priorities CF &I shall not be obligated to accept for carriage at the headgate of the Canal more Pueblo Water than, in CF &I's sole determination, the safe carrying capacity of the Canal will permit. In addition, the Board recognizes and agrees that CF &I owns or has the right to use or may in the future own or have the right to use its own water rights that it diverts and delivers through the Canal ( "CF &I Water Rights ") and has also entered into various agreements for the use of the Canal with the Union Ditch and Water Company dated September 1, 1942, with the City of Florence dated June 20, 1963 and with the City of Florence, Town of Williamsburg, Town of Coal Creek dated May 7, 1986, Pueblo Suburban Development LLC dated May 14, 2003, and the Stephen J. Schnurr Living Trust, hereinafter referred to as the ( "Previous Agreements "). Pueblo and the Board recognize and agree that CF &I Water Rights and water that CF &I is obligated to divert and carry under the Previous Agreements shall have a first priority to the use of Canal capacity. Pueblo Water shall have priority thereafter. CF &I shall not be liable to the Board if it determines that it is necessary for CF &I to reduce the amount of Pueblo Water being diverted into the Canal: (1) to carry water owned or used by CF &I or water delivered under Previous Agreement rights; (2) to reduce the flow in the Canal to a safe carrying capacity; or (3) for any other safety reasons associated with the operation of the Canal. CF &I agrees that any contracts for the carriage of water by CF &I entered into or amended after the date of this Agreement shall be subordinate to the rights of the Board under this Agreement. Rieht to Maintain Carriage Capacity The Board, after approval of CF &I given in writing shall have the right, but not the obligation, to undertake reasonable and prudent maintenance activities on the Canal, Salt Creek and associated diversion structures so as to maintain their capacity to divert and carry Pueblo Water in the canal and Salt Creek. Any such maintenance activities shall be at the sole cost and liability of the Board. 00335715.1 final - 6/27/2008 6. Measurement Records and Accounting CF &I shall maintain measurement devices at or near the headgate of the Canal capable of measuring all water diverted into the Canal, including the Pueblo Water. CF &I shall maintain daily records of all diversions at the headgate of the Canal, including the rate of flow of Pueblo Water being diverted for delivery to the outlet of St. Charles Reservoir No. 2. The Board shall maintain daily records of all Pueblo Water delivered by the Board to the Canal for delivery to Lake Minnequa. The Board shall install and maintain a measuring device in the Lake Minnequa Supply Ditch, at or near the outlet of St. Charles Reservoir No. 2. The Board shall maintain daily records of all Pueblo Water delivered from St. Charles Reservoir No. 2 into the Lake Minnequa Supply Ditch by CF &I under this Agreement. The Board's measurement of deliveries by CF &I of Pueblo Water to Lake Minnequa Supply Ditch will be used to determine the amount of payment due to CF &I under Paragraph 3 above. All records that any party is required to maintain under this paragraph shall be furnished to any party within a reasonable time after a request is made for same. 7. Payment of Carriage Charge CF &I will bill the Board monthly for carriage charges incurred in the prior month. The carriage charge shall be the number of acre -feet of Pueblo Water delivered at the outlet of St. Charles Reservoir No. 2 into the Lake Minnequa Supply Ditch times the Carriage Rate. The number 1.9835 shall be used to convert the rate of flow in cubic feet per second into acre -feet. Payment shall be made within 45 days of the Board's receipt of the invoice from CF &I. 8. No Representations CF &I agrees to operate the Canal in a responsible manner, but makes no representations, warranties or assurances to the Board with respect to quantity of water, water quality, absence of capacity, equipment failure or other circumstances beyond CF &I's reasonable control. 9. Indemnification The Board agrees that, to the extent allowed by law, it will indemnify CF &I against and hold CF &I harmless from any and all claims, loss, damage (whether direct, indirect or consequential), causes of action, suits and liabilities of every kind (including attorney's fees and expenses incurred in the investigation, defense and settlement of any claim or suit or for the payment of any judgment), for injuries to or death of any person, and all damages to and destruction of property by whomsoever owned, including loss of use thereof, resulting directly or indirectly, in whole or in part, from the prosecution or omission of any work or obligation undertaken by or required of the Board by this Agreement, except to the extent that such injuries, death or damages are proximately caused by CF &I's negligence. The Board, to the extent allowed by law, shall defend CF &I against any claims or litigation in connection with any injury, death or damage covered by their indemnity at their expense with counsel reasonably acceptable to CF &I or, at the election of CF &I, shall reimburse CF &I for reasonable legal fees and other costs incurred in CF &I's defense of such claims or litigation. CF &I shall have the right to participate in the defense of any claims or litigation and shall have the right to approve any settlement. Nothing in this Agreement, however, shall be construed as a waiver of any immunity from damages or limitation on damages available to the Board, including sovereign immunity and any limitations on liability provided in the Colorado Governmental Immunity Act, C.R.S. § 24- 10 -101 etseq (2007). 10. Approvals The Board is solely responsible for obtaining approval, if necessary, of the 00335715.1 final- 6/27/2008 Water Court and /or the appropriate State Water Officials to allow the diversion and carriage of the Pueblo Water by CF &I into the Canal and the use of the Pueblo Water by the Board. The Board retains the right to terminate this Agreement if it is unable to obtain appropriate approvals. In the event of such termination by the Board no refund of payments previously made shall be due from CF &I. 11. No Adverse Legal Position a. The Board agrees that during the term of this Agreement it will not take a legal position adverse to CF &I in connection with the operation or administration of the Canal, Salt Creek, or the water rights associated therewith, except as may be necessary to enforce the terms of this Agreement or to protect from injury water rights owned by the Board. b. CF &I agrees not to oppose, except to protect its water rights from injury, any proceeding which the Board may file in the District Court for Water Division No. 2 for the purposes of (a) obtaining judicial approval to divert Pueblo Water at the Canal headgate and /or (b) to adjudicate water storage rights in Lake Minnequa to be filled from inflow from below St. Charles Reservoir No. 2, or Pueblo Water diverted at the Canal headgate and thence carried through the Canal to Lake Minnequa, so long as such water rights or new water rights are subject to the terms and conditions of this Agreement. 12. Notices All notices and other communications that are required or permitted to be given to the Parties under this Agreement shall be sufficient in all respects if given in writing and delivered in person, by overnight courier, or by certified mail, postage prepaid, return receipt requested, to the receiving party at the following address: If to CF &I, to: CF &I Steel, L.P. Attn: Legal Dept. P.O. Box 316 Pueblo, CO 81002 Telephone: If to the Board, to: Executive Director Board of Water Works of Pueblo, Colorado P.O. Box 400 Pueblo, CO 81002 Telephone: (719) 584 -0250 Any party may change the address for giving notice by notice given pursuant to this paragraph. 13. Assignment Except as provided in Paragraph 1 hereof, this Agreement may not be assigned by any party without the prior written consent of the other Party. 14. Third Party Beneficiary: City of Pueblo is a third party beneficiary of the Board's carriage of water under this Agreement. 00335715.1 final- 6/27/2008 15. Rieht to Operate In the event that CF &I ceases to use the Canal, Salt Creek, and /or the St. Charles Reservoirs No. 3 and 2, and their related water diversion, control and measurement structures, or ceases to use the same for delivery of water, then the Board shall have the right, subject to the right previously granted by CF &I to the Union Ditch Company, to the extent permitted by law, to continue to use and operate those structures, at their own risk and expense, for the purpose of delivery of water to Lake Minnequa. 16. Dispute Resolution If a dispute relating to this Agreement or any claimed default arises between the Parties, the following procedure shall be followed: a. The Administrative Officers shall hold a meeting promptly, but in no event later than 20 calendar days from the referral of the dispute or notice of default, attended by persons with decision - making authority regarding the dispute, to attempt in good faith to negotiate a resolution of the dispute or to cure the default; provided, however, that no such meeting shall be deemed to vitiate or reduce the obligations and liabilities of the Parties or be deemed a waiver by a party hereto of any remedies to which such party would otherwise be entitled under this Agreement unless otherwise agreed to by the Parties in writing. "Administrative Officers" collectively shall mean the Manager of Engineering or other designated person for CF &I, and the Executive Director of the Board. If, within 20 calendar days after such meeting, the Parties have not succeeded in negotiating a resolution of the dispute or cure of the default, they agree to submit the dispute to non - binding mediation and to bear equally the costs of the mediation. Each party shall be responsible for its own attorney's fees through conclusion of compliance with this Paragraph 16. b. The Parties agree to participate in good faith in the mediation and related negotiations for a period of 30 calendar days, The substantive and procedural law of the State of Colorado shall apply to the proceedings. If the Parties are not successful in resolving the dispute through mediation, then the Parties shall be free to terminate the Agreement and to pursue any other legal remedy. 17. Remedies In addition to any other rights and remedies the Parties may have, after compliance with Paragraph 16, Dispute Resolution, the Parties shall be entitled to seek specific performance or injunctive relief restraining the breaching party from doing any act in violation, or compelling performance, of its obligations herein. 18. Termination After compliance with Paragraph 16, Dispute Resolution, should a Party or Parties fail to abide by their promises herein then the non - defaulting party or parties may, at their option, elect to terminate this Agreement, in which event, the terminating party or parties shall serve written notice of such election upon the other parties and the parties hereto shall be freed from all rights and responsibilities arising hereunder thirty (30) days after the service of such notice of termination upon the defaulting party or parties unless the default shall have been by then corrected. 19. Attomeys' Fees After compliance with Paragraph 15, Dispute Resolution, if a party shall 00335715.1 final- 6/27/2008 commence any action or proceeding against another party in order to enforce the provisions of this Agreement or to recover damages as a result of the alleged breach of any of the provisions of this Agreement, the prevailing party shall be entitled to recover from the other party all reasonable costs in connection therewith, including reasonable attorneys' fees. 20. Force Majeure Any obligation for water delivery hereunder shall be subject to force majeure, including, without limitation, the following, and any other matters similar or dissimilar thereto if beyond the control of such party: damage to or destruction of Canal, Salt Creek or other conveyance facilities, senior water calls, administration of water rights, flood, drought, fire, acts of God, unavoidable casualties, labor disputes or governmental regulations. Notice of force majeure shall be given as soon as practicable after the force majeure event. 21. No Third Party Beneficiaries Except as stated in Paragraph 14 hereof, this Agreement is intended to describe the rights and responsibilities of and between the Parties and is not intended to, and shall not be deemed to confer any rights upon any persons or entities not named as parties, nor to limit in any ways the powers and responsibilities of the Parties or any other entity not a party hereto. 22. Governing Law - Venue This Agreement shall be governed under and controlled by the laws of the State of Colorado. Venue for any lawsuit between Parties concerning this Agreement shall be in the District Court for Pueblo County. 23. Merger and Amendment This Agreement constitutes the entire agreement of the parties and supersedes all prior representations, negotiations or other communications related thereto. This Agreement may be amended only in writing, which writing must be signed by all parties in order to be effective. 24. Binding Effect This Agreement shall be binding upon and inure to the benefit of the parties hereto, their successors or assigns, including all successors and assigns of CF &I in the ownership, use, and /or operation of the Canal, Salt Creek, and the St. Charles Reservoirs No. 2 & 3. 25. Authorization and Counterparts Each party hereto represents that its representative signing below is authorized to execute this Agreement on its behalf. This Agreement may be executed in duplicate counterparts. 26. Recordation This Agreement shall be recorded by Pueblo in the records of the office of Clerk and Recorder of Pueblo County. IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written. 00335715.1 final - 6/27/2008 Date: CF& I STEEL., L.P By its General Partner, NEW CF &I, INC. 0 Vice - President Date: THE BOARD OF WATER WORKS OF PUEBLO, COLORADO IC Alan C. Hamel Executive Director 00335715.1 17 WATER AG 03/11/2009 03:30:43 PM 0 Ibert l 0rrtiz C1 e Peblo Co SIII r,61 Phl4 A14 401MMMMUM "1 11111 ® final- 6/27/2008 WATER CARRIAGE AGREEMENT �Q ` THIS WATER CARRIAGE AGREEMENT ("Agreement") is made effective as of the 29 day of Decemeber, 2008 between CF &I Steel, L.P, a Delaware limited partnership ( "CF &F'), whose address is P.O. Box 316, Pueblo, Co 81002, and the Board of Water Works of Pueblo, Colorado, ( "the Board "), whose address is P.O. Box 400, Pueblo, CO 81002, INTRODUCTORY STATEMENTS A. CF &I owns and operates the Minnequa Canal including diversion and associated structures (the "Canal') for the diversion and delivery of water from the Arkansas River through the Canal to, among other delivery points, the St. Charles Reservoirs No. 2 and 3, under various existing water rights decreed to the Canal. B. Lake Minnequa is a water storage reservoir located in Sections I 1 and 14, T21 S. R65W of the 6` P.M., Pueblo, Colorado. C. The City of Pueblo ( "Pueblo') has purchased Lake Minnequa from CF &I and desires to have water supplied to Lake Minnequa by the Board. D. The Board has agreed with Pueblo to supply to Lake Minnequa water which the Board or Pueblo owns, controls, or has the right to use or convey, and the best means to deliver that water from the Arkansas River to Lake Minnequa is to use the Canal to divert and carry that water from the Arkansas River through the Canal and St. Charles Reservoirs No. 2 and 3 to the outlet of St. Charles Reservoir No. 2. E. CF &I is willing to transport water, that is delivered by the Board ( "Pueblo Water ") to the headgate of the Canal, through the Canal and St. Charles Reservoirs No. 2 and 3 to the outlet of St. Charles Reservoir No. 2. F. The Board is willing to pay CF &I for carriage of Pueblo Water through the Canal and St. Charles Reservoirs No. 2 and 3 to the outlet of St. Charles Reservoir No. 2. NOW, THEREFORE, and in consideration of the premises and mutual promises hereinafter contained, the parties hereto agree as follows: AGREEMENT Term: The initial term of this Agreement shall be for 25 years. Thereafter, this Agreement may be extended in additional ten year increments upon the Board providing notice to CF &I of its desire to extend the agreement for a successive ten -year period. Each successive extension shall be on the same terms and conditions herein. The Board may terminate this Agreement, or assign its rights and obligations hereunder to the City of Pueblo, a municipal corporation, should it determine that it no longer intends to deliver Pueblo Water to Lake Minnequa. In the event of such assignment or termination, notice of same shall be delivered in writing at least 30 days prior to the effective date of the expiration or intended assignment or termination. 00335715.1 1798724 WATER PG 03/11/2009 03:50:43 PM Page: 2 of 7 R 36.00 D 0.00 T 36.00 Gilbert Ortiz Clerk /Recorder, Pueblo County, Co final- 6/27/2008 ®III IW+11 r+'AWNIK14 11WIV A W J4 11111 2. Delivery of Water The Parties shall cooperate in the scheduling of diversions and deliveries of Pueblo Water to be carried by CF &I for delivery to the outlet of St. Charles Reservoir No. 2. The maximum rate at which Pueblo Water will be carried in the Canal and through St. Charles Reservoirs Nos. 2 and 3 for delivery to the outlet of St. Charles Reservoir No. 2 is 10 c.£s. CF &I will assess a 16% shrinkage (seepage and evaporation) charge on all such Pueblo Water carried in the Canal for delivery to the outlet of St. Charles Reservoir No. 2. The maximum volume of Pueblo Water to be delivered annually shall be 800 acre -feet, measured at the outlet of St. Charles Reservoir No. 2 into the Lake Minnequa Supply Ditch, or such other structure that may hereafter be used to deliver Pueblo Water from St. Charles Reservoir No. 2. Annual Minimum Payment and Carriage Rate In consideration of this Agreement, the Board shall pay CF &I an annual minimum payment of $1,000.00 per year, whether or not Pueblo Water is diverted or carried through the Canal for delivery to Lake Minnequa. The first annual minimum payment is due upon execution of this Agreement and thereafter annually on each anniversary date of this Agreement. In addition, the Board shall pay CF &I a carriage rate of ten dollars ($10.00) per acre -foot of Pueblo Water delivered to the outlet of St. Charles Reservoir No. 2 ( "Carriage Rate "). On every fifth anniversary of the date of this Agreement the Carriage Rate per acre -foot will be adjusted by the percentage change occurring during the previous 5 years in the Consumer Price Index for Denver/Boulder, Colorado published by the U.S. Department of Labor. In no event, however, will the per acre -foot Carriage Rate be less than $10.00 in 2007 dollars. 4. Capacities and Priorities CF &I shall not be obligated to accept for carriage at the headgate of the Canal more Pueblo Water than, in CF &I's sole determination, the safe carrying capacity of the Canal will permit. Ill addition, the Board recognizes and agrees that CF &I owns or has the right to use or may in the future own or have the right to use its own water rights that it diverts and delivers through the Canal ( "CF &I Water Rights ") and has also entered into various agreements for the use of the Canal with the Union Ditch and Water Company dated September I, 1942, with the City of Florence dated June 20, 1963 and with the City of Florence, Town of Williamsburg, Town of Coal Creek dated May 7, 1986, Pueblo Suburban Development LLC dated May 14, 2003, and the Stephen J. Schnurr Living Trust, hereinafter referred to as the ( "Previous Agreements "). Pueblo and the Board recognize and agree that CF &I Water Rights and water that CF &I is obligated to divert and carry under the Previous Agreements shall have a first priority to the use of Canal capacity. Pueblo Water shall have priority thereafter. CF &I shall not be liable to the Board if it determines that it is necessary for CF &I to reduce the amount of Pueblo Water being diverted into the Canal: (1) to carry water owned or used by CF &I or water delivered under Previous Agreement rights; (2) to reduce the flow in the Canal to a safe carrying capacity; or (3) for any other safety reasons associated with the operation of the Canal. CF &I agrees that any contracts for the carriage of water by CF &I entered into or amended after the date of this Agreement shall be subordinate to the rights of the Board under this Agreement. 5. Right to Maintain CarriameCapacity The Board, after approval of CF &I given in writing shall have the right, but not the obligation, to undertake reasonable and prudent maintenance activities on the Canal, Salt Creek and associated diversion structures so as to maintain their capacity to divert and carry Pueblo Water in the canal and Salt Creek. Any sµc maintenance activities shall be at the sole cost and liability of the Board. 11 . 00335715.1 V �# 17 WATER AG 03/11/2009 03:50:43 PM P al b ert 3 0rt f 77CleR�r�k36,00 Ueyr,,O 00 Clerk/ 36. 0 0 0v, Co final -6 /27!2008 1�W,` ®IIIIA61 1fYAYT'tliIKITYiVIil�Y MIN I I11 6. Measurement Records and Accounting CF &I shall maintain measurement devices at or near the headgate of the Canal capable of measuring all water diverted into the Canal, including the Pueblo Water. CF &I shall maintain daily records of all diversions at the headgate of the Canal, including the rate of flow of Pueblo Water being diverted for delivery to the outlet of St. Charles Reservoir No. 2. The Board shall maintain daily records of all Pueblo Water delivered by the Board to the Canal for delivery to Lake Minnequa. The Board shall install and maintain a measuring device in the Lake Minnequa Supply Ditch, at or near the outlet of St. Charles Reservoir No. 2. The Board shall maintain daily records of all Pueblo Water delivered from St. Charles Reservoir No. 2 into the Lake Minnequa Supply Ditch by CF &I under this Agreement. The Board's measurement of deliveries by CF &I of Pueblo Water to Lake Minnequa Supply Ditch will be used to determine the amount of payment due to CF &I under Paragraph 3 above. All records that any party is required to maintain under this paragraph shall be furnished to any party within a reasonable time after a request is made for same. 7. Payment of Carriage Charge CF &I will bill the Board monthly for carriage charges incurred in the prior month. The carriage charge shall be the number of acre -feet of Pueblo Water delivered at the outlet of St. Charles Reservoir No. 2 into the Lake Minnequa Supply Ditch times the Carriage Rate. The number 1.9835 shall be used to convert the rate of flow in cubic feet per second into acre -feet. Payment shall be made within 45 days of the Board's receipt of the invoice from CF &I. 8. No Representations CF &I agrees to operate the Canal in a responsible manner, but makes no representations, warranties or assurances to the Board with respect to quantity of water, water quality, absence of capacity, equipment failure or other circumstances beyond CF &I's reasonable control. 9. Indemnification The Board agrees that, to the extent allowed by law, it will indemnify CF &I against and hold CF &I harmless from any and all claims, loss, damage (whether direct, indirect or consequential), causes of action, suits and liabilities of every kind (including attorney's fees and expenses incurred in the investigation, defense and settlement of any claim or suit or for the payment of any judgment), for injuries to or death of any person, and all damages to and destruction of property by whomsoever owned, including loss of use thereof, resulting directly or indirectly, in whole or in part, from the prosecution or omission of any work or obligation undertaken by or required of the Board by this Agreement, except to the extent that such injuries, death or damages are proximately caused by CF &I's negligence. The Board, to the extent allowed by law, shall defend CF &I against any claims or litigation in connection with any injury, death or damage covered by their indemnity at their expense with counsel reasonably acceptable to CF &I or, at the election of CF &I, shall reimburse CF &I for reasonable legal fees and other costs incurred in CF &I's defense of such claims or litigation. CF &I shall have the right to participate in the defense of any claims or litigation and shall have the right to approve any settlement. Nothing in this Agreement, however, shall be construed as a waiver of any immunity from damages or limitation on damages available to the Board, including sovereign immunity and any limitations on liability provided in the Colorado Governmental Immunity Act, C.R.S. § 24- 10 -101 et seq (2007). 10. Apnrovals The Board is solely responsible for obtaining approval, if necessary, of the 00335715.1 1798724 WATER AG 03/11/2009 03:50:43 PM Pa ge• 4 of 7 R MAT , 0.00 T 36.00 Gilbert Ortiz Clerk /Recorder, Puebla County, Co final- 6/27/2008 mill WAIIIIIINAI�P�I1 IALIVI t�41MINN, 1��'A III III Water Court and/or the appropriate State Water Officials to allow the diversion and carriage of the Pueblo Water by CF &I into the Canal and the use of the Pueblo Water by the Board. The Board retains the right to terminate this Agreement if it is unable to obtain appropriate approvals. In the event of such termination by the Board no refund of payments previously made shall be due from CF &I. 11. No Adverse Legal Position a. The Board agrees that during the term of this Agreement it will not take a legal position adverse to CF &I in connection with the operation or administration of the Canal, Salt Creek, or the water rights associated therewith, except as may be necessary to enforce the terms of this Agreement or to protect from injury water rights owned by the Board. b. CF &I agrees not to oppose, except to protect its water rights from injury, any proceeding which the Board may file in the District Court for Water Division No. 2 for the purposes of: (a) obtaining judicial approval to divert Pueblo Water at the Canal headgate and/or (b) to adjudicate water storage rights in Lake Minnequa to be filled from inflow from below St. Charles Reservoir No. 2, or Pueblo Water diverted at the Canal headgate and thence carried through the Canal to Lake Minnequa, so long as such water rights or new water rights are subject to the terms and conditions of this Agreement. 12. Notices All notices and other communications that are required or permitted to be given to the Parties under this Agreement shall be sufficient in all respects if given in writing and delivered in person, by overnight courier, or by certified mail, postage prepaid, return receipt requested, to the receiving party at the following address: If to CF &I, to: CF &I Steel, L.P. Attn: Legal Dept. P.O. Box 316 Pueblo, CO 81002 Telephone: If to the Board, to: Executive Director Board of Water Works of Pueblo, Colorado P.O. Box 400 Pueblo, CO 81002 Telephone: (719) 584 -0250 Any parry may change the address for giving notice by notice given pursuant to this paragraph. 13. Assignment Except as provided in Paragraph 1 hereof, this Agreement may not be assigned by any party without the prior written consent of the other Parry. 14. Third Party Beneficiary: The City of Pueblo is a third party beneficiary of the Board's carriage of water under this Agreement. 00335715.1 � 1798724 WATER AG 03/11/2009 03 :50:43 PM .Pa: 5 of 7 R 36.00 D 0.00 T 36.00 Gilbert Ortiz Cierk /Recorder, Pueblo County, Co ®III V161 N HW �4g Ai4 "W i 11111 final - 6/27/2008 15. Right to Operate In the event that CF &I ceases to use the Canal, Salt Creek, and/or the St. Charles Reservoirs No. 3 and 2, and their related water diversion, control and measurement structures, or ceases to use the same for delivery of water, then the Board shall have the right, subject to the right previously granted by CF &I to the Union Ditch Company, to the extent permitted by law, to continue to use and operate those structures, at their own risk and expense, for the purpose of delivery of water to Lake Minnequa. 16. Dispute Resolution If a dispute relating to this Agreement or any claimed default arises between the Parties, the following procedure shall be followed: a. The Administrative Officers shall hold a meeting promptly, but in no event later than 20 calendar days from the referral of the dispute or notice of default, attended by persons with decision - making authority regarding the dispute, to attempt in good faith to negotiate a resolution of the dispute or to cure the default; provided, however, that no such meeting shall be deemed to vitiate or reduce the obligations and liabilities of the Parties or be deemed a waiver by a party hereto of any remedies to which such party would otherwise be entitled under this Agreement unless otherwise agreed to by the Parties in writing. "Administrative Officers" collectively shall mean the Manager of Engineering or other designated person for CF &I, and the Executive Director of the Board. If, within 20 calendar days after such meeting, the Parties have not succeeded in negotiating a resolution of the dispute or cure of the default, they agree to submit the dispute to non - binding mediation and to bear equally the costs of the mediation. Each party shall be responsible for its own attorney's fees through conclusion of compliance with this Paragraph 16. b. The Parties agree to participate in good faith in the mediation and related negotiations for a period of 30 calendar days. The substantive and procedural law of the State of Colorado shall apply to the proceedings. If the Parties are not successful in resolving the dispute through mediation, then the Parties shall be free to terminate the Agreement and to pursue any other legal remedy. 17. Remedies In addition to any other rights and remedies the Parties may have, after compliance with Paragraph 16, Dispute Resolution, the Parties shall be entitled to seek specific performance or injunctive relief restraining the breaching party from doing any act in violation, or compelling performance, of its obligations herein. 18. Termination After compliance with Paragraph 16, Dispute Resolution, should a Party or Parties fail to abide by their promises herein then the non - defaulting party or parties may, at their option, elect to terminate this Agreement, in which event, the terminating party or parties shall serve written notice of such election upon the other parties and the parties hereto shall be freed from all rights and responsibilities arising hereunder thirty (30) days after the service of such notice of termination upon the defaulting party or parties unless the default shall have been by then corrected. 19. Attome sue After compliance with Paragraph 15, Dispute Resolution, if a party shall 00335715.1 1798724 WATER AG 03/11/2009 03:50:43 PM Pa e: 6 of 7 R 36.00 D 0.00 T 36.00 Gilbert Ortiz Clerk /Reooroer, Pueblo County, Co final- 6/27/2008 mill iriliplwAmtll lliv wl WJWR'0114IN'tl 11III commence any action or proceeding against another party in order to enforce the provisions of this Agreement or to recover damages as a result of the alleged breach of any of the provisions of this Agreement, the prevailing party shall be entitled to recover from the other party all reasonable costs in connection therewith, including reasonable attorneys' fees. 20. Force Maieure: Any obligation for water delivery hereunder shall be subject to force majeure, including, without limitation, the following, and any other matters similar or dissimilar thereto if beyond the control of such party: damage to or destruction of Canal, Salt Creek or other conveyance facilities, senior water calls, administration of water rights, flood, drought, fire, acts of God, unavoidable casualties, labor disputes or governmental regulations. Notice of force majeure shall be given as soon as practicable after the force majeure event. 21. No Third Party Beneficiaries Except as stated in Paragraph 14 hereof, this Agreement is intended to describe the rights and responsibilities of and between the Parties and is not intended to, and shall not be deemed to confer any rights upon any persons or entities not named as parties, nor to limit in any ways the powers and responsibilities of the Parties or any other entity not a party hereto. 22. Goveming_Law- Venue This Agreement shall be governed under and controlled by the laws of the State of Colorado. Venue for any lawsuit between Parties concerning this Agreement shall be in the District Court for Pueblo County. 23. Merger and Amendment This Agreement constitutes the entire agreement of the parties and supersedes all prior representations, negotiations or other communications related thereto. This Agreement may be amended only in writing, which writing must be signed by all parties in order to be effective. 24. Binding Effect This Agreement shall be binding upon and inure to the benefit of the parties hereto, their successors or assigns, including all successors and assigns of CF &I in the ownership, use, and /or operation of the Canal, Salt Creek, and the St. Charles Reservoirs No. 2 & 3. 25. Authorization and Counterparts Each party hereto represents that its representative signing below is authorized to execute this Agreement on its behalf. This Agreement may be executed in duplicate counterparts. 26. Recordation This Agreement shall be recorded by Pueblo in the records of the office of Clerk and Recorder of Pueblo County. IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written. 00335715.1 e � 1 M1 , final- 6/27/2008 CF& I STEEL., L.P By its General Partner, NEW CF &I, INC. Date: jtn 1& >crn By ( :�: � Vice - President THE BOARD OF WATER WORKS OF PUEBLO, COLORADO Date: IZ -�9-ba By: QQn,n Alan C. Hamel Executive Director Pa {gjER AG 03/11/2009 03:30:43 PM e i 1 a 9Phh'A144' im 1#1 M, w1w, ru ®III "11V,N 11 111 00335715.1 7 ORIGINAL AMENDMENT NO. 1 TO AGREEMENT FOR SALE AND PURCHASE OF PROPERTY (RAW WATER PIPELINE) THIS AMENDMENT NO. 1 to the Agreement for Sale and Purchase of Property (Raw Water Pipeline) ( "Amendment No. V) is made and entered into this .25 day of August, 2008, by and between CF &I Steel, L.P., a Delaware Limited Partnership (hereinafter referred to as "Seller ") and Pueblo, a Municipal Corporation (herein 'Purchaser "). WHEREAS, Seller and Purchaser have heretofore entered into an Agreement for Sale and Purchase of Property (Raw Water Pipeline) dated June 27, 2008 (the "Agreement'); and WHEREAS, Purchaser has requested an extension of the date of closing in order that conditions for closing may be satisfied; NOW, THEREFORE, in consideration of the foregoing recitals and the mutual terms and conditions set forth herein, the parties agree as follows: The first sentence of Section 7 of the Agreement is revised to read as follows: "The date of closing shall be as determined by mutual agreement of Seller and Purchaser but shall be no later than September 30, 2008. 2. Except as expressly modified by this Amendment No. 1, the Agreement shall remain in full force and effect. Except as expressly modified, any obligations remaining to be performed under the Agreement by either party, are not waived or excused in any manner, but shall be performed in accordance with the terms and conditions of the Agreement as it existed prior to this Amendment No. 1. IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written: Attest:— City: rk.� Approved as to form: 7 �,t-- �.�� City Attorney PURCHASER PUEBLO, a Municipal Corporation By President of the City Council SELLER CF &I STEEL, L.P. By its General Partner, NEW CF &I, INC. I By �J �� Name: 7 ORIGINAL AMENDMENT NO. 1 TO AGREEMENT FOR SALE AND PURCHASE OF PROPERTY (LANDS) THIS AMENDMENT NO. 1 to the Agreement for Sale and Purchase of Property (Lands) ( "Amendment No. 1 ") is made and entered into this c2V'% day of August, 2008, by and between CF &I Steel, L.P., a Delaware Limited Partnership (hereinafter referred to as "Seller ") and Pueblo, a Municipal Corporation (herein 'Purchaser "). WHEREAS, Seller and Purchaser have heretofore entered into an Agreement for Sale and Purchase of Property (Lands) dated June 27, 2008 (the "Agreement "); and WHEREAS, Purchaser has requested an extension of the date of closing in order that conditions for closing may be satisfied; NOW, THEREFORE, in consideration of the foregoing recitals and the mutual terms and conditions set forth herein, the parties agree as follows: The first sentence of Section 7 of the Agreement is revised to read as follows: "The date of closing shall be as determined by mutual agreement of Seller and Purchaser but shall be no later than September 30, 2008. 2. Except as expressly modified by this Amendment No. 1, the Agreement shall remain in full force and effect. Except as expressly modified, any obligations remaining to be performed under the Agreement by either party, are not waived or excused in any manner, but shall be performed in accordance with the terms and conditions of the Agreement as it existed prior to this Amendment No. 1. IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written.. PURCHASER PUEBLO, a unici al Corporation Attest:. - = B `City la`rl - Presi ent of the City Council Approved as to: form: SELLER CF &I STEEL, L.P. // City Attomw By its General Partner, J�71 NEW CF &I, INC. By Name: Title: VP oc v , n: Mrty ✓ra�clL AMENDMENT NO.2 TO AGREEMENT FOR SALE AND PURCHASE OF PROPERTY (LANDS) THIS AMENDMENT NO. 2 to the Agreement for Sale and Purchase of Property (Lands) ( "Amendment No. 2 ") is made and entered into this day of September, 2008, by and between CF &I Steel, L.P., a Delaware Limited Partnership (hereinafter referred to as "Seller ") and Pueblo, a Municipal Corporation (herein "Purchaser'). WHEREAS, Seller and Purchaser have heretofore entered into an Agreement for Sale and Purchase of Property (Lands) dated June 27, 2008 (the "Agreement ") and Amendment No. 1 thereto dated August 25, 2008; and WHEREAS, Purchaser has requested a further extension of the date of closing in order that conditions for closing may be satisfied; NOW, THEREFORE, in consideration of the foregoing recitals and the mutual terms and conditions set forth herein, the parties agree as follows: 1. The first sentence of Section 7 of the Agreement, as heretofore amended, is revised to read as follows: "The date of closing shall be as determined by mutual agreement of Seller and Purchaser but shall be no later than January 31, 2009. 2. Except as expressly modified by this Amendment No. 2, the Agreement shall remain in full force and effect. Except as expressly modified, any obligations remaining to be performed under the Agreement by either party, are not waived or excused in any manner, but shall be performed in accordance with the terms and conditions of the Agreement as it existed prior to this Amendment No. 2. IN WITNESS- WHEREOF, the parties hereto have executed this Amendment No. 2 as of the day and -year first abovC- written. Attest: r:_�� City_rk _ Approved as to form Ci ty Attorney PURCHASER By � , a Mu ' ipal Corporation President of the City Council SELLER CF &I STEEL, L.P. By its General Pa�er - - - - -- -EF8r1,- C�� „� Name: R ert A. Simon Title: V.P. & GeneralV.P. & General Manager AMENDMENT NO.2 TO AGREEMENT FOR SALE AND PURCHASE OF PROPERTY (RAW WATER PIPELINE) THIS AMENDMENT NO. 2 to the Agreement for Sale and Purchase of Property (Raw Water Pipeline) ( "Amendment No. 2 ") is made and entered into this 30 day of September, 2008, by and between CF &I Steel, L.P., a Delaware Limited Partnership (hereinafter referred to as "Seller ") and Pueblo, a Municipal Corporation (herein 'Purchaser "). WHEREAS, Seller and Purchaser have heretofore entered into an Agreement for Sale and Purchase of Property (Raw Water Pipeline) dated June 27, 2008 (the "Agreement ") and Amendment No. 1 thereto dated August 25, 2008; and WHEREAS, Purchaser has requested a further extension of the date of closing in order that conditions for closing may be satisfied; NOW, THEREFORE, in consideration of the foregoing recitals and the mutual terms and conditions set forth herein, the parties agree as follows: The first sentence of Section 7 of the Agreement, as heretofore amended, is revised to read as follows: "The date of closing shall be as determined by mutual agreement of Seller and Purchaser but shall be no later than January 31, 2009. 2. Except as expressly modified by this Amendment No. 2, the Agreement shall remain in full force and effect. Except as expressly modified, any obligations remaining to be performed under the Agreement by either party, are not waived or excused in any manner, but shall be performed in accordance with the terms and conditions of the Agreement as it existed prior to this Amendment No.:2., IN WITNESS WHEREOF, the parties hereto have executed this Amendment No. 2 as of the day and year�first above written. �. PURCHASER PUEBLO, a Municipal Corporation Attest: By City G rl President of the City Council Approved as to form: City Att SELLER CF &I STEEL, L.P. By i G eneral Partner, ; :NEW C By Name: obert A. Simon Title: V.P. & General Manager