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• Board Meeting Date: 7/11/2007
• Description: ISF Section - Hat Creek Water Right Acquisition
• Board Meetings - Doc Type: Memo

natural environment to a reasonable degree in Hat Creek from the headgate of the Hat
Creek Ditch to the confluence of Hat Creek and East Brush Creek;

WHEREAS, the Board's use of the Hat Creek Right for instream flow purposes
will require Water Court approval of a change in use of the Hat Creek Right;

WHEREAS, the Trust wishes to assist the Board in obtaining judicial approval of
the change in use to instream flow use;

NOW, THEREFORE, in consideration of the mutual and dependent covenants
contained herein, the parties agree as follows:

1. Conveyance. Within thirty days of the Effective Date of this Agreement
(as defined in Section 9 below), the Trust will convey the Hat Creek Right to the Board
by Bargain and Sale Deed in substantially the form as the deed attached hereto as Exhibit
A. The Trust shall record said deed with the Eagle County Clerk and Recorder within ten
days of such conveyance, and shall provide a copy of the recorded deed to the Board.

2. Water Court Proceedings. Within one year after receiving title to the Hat
Creek Right, the Board shall file an application with the Water Court to change the Hat
Creek Right to allow instream flow use exclusively by the Board in the reach of Hat
Creek from the headgate of the Hat Creek Ditch to the confluence of Hat Creek and East
Brush Creek (the "Change Proceeding"). The Board shall keep the Trust informed of all
significant proceedings in the Change Proceeding, and provide the Trust with a copy of
the final decree once entered. The Board will not enter into stipulations in the Change
Proceeding without first consulting with and obtaining the approval of the Trust, which
approval shall not be unreasonably withheld.

3. Assistance. The Board will be responsible for the normal and reasonable
costs of the Change Proceeding. The Trust shall provide reasonable assistance to the
Board in the Change Proceeding.

4. Enforcement. If the Board successfully obtains a decree in the Change
Proceeding, the Board commits to use the Hat Creek Right, as changed, for instream flow
purposes to preserve or improve the natural environment to a reasonable degree,
consistent with the terms of the decree, and to take all reasonable steps to enforce those
rights for instream flow purposes and protect them from injury. If the Board receives a
request to consider injury with mitigation for the portion of Hat Creek benefited by the
change of the Hat Creek Right, the Board shall promptly infOllli the Trust of such
request, consult with the Trust regarding such request, and not take any action that, in the
CWCB's and Trust's reasonable judgment, would impair the benefits to Hat Creek
resulting from the Trust's donation to the Board of the Hat Creek Right and its change to
instream flow uses. Nothing herein shall diminish the Board's right to exercise its
discretion regarding enforcement of instream flow water rights; however, the Board
acknowledges that the intended use of the Hat Creek Right is to preserve the natural
environment to a reasonable degree.

00013907

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