C150298 Easement & ROW Agreement

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a FMRICO AND GROVES PIPELINE PROJECT OPERATING AGREEMENT THIS AGREEMENT is entered into this 94., day of , 2009, by and between the Fort Morgan Reservoir and Irrigation Company, a Colorado mutual ditch company ("FMRICO"), and Groves Farms, LLC, a Colorado limited liability corporation ("Groves"). RECITALS A. FMRICO operates an augmentation plan that delivers replacement water to offset well depletions caused by wells operated by FMRICO shareholders ("FMRICO Augmentation Plan"). FMRICO delivers water to approximately 15,000 acres of farmland in Morgan County and the FMRICO Augmentation Plan is a source of supplemental water supply to these farms. At times, FMRICO has excess augmentation credits generated by the FMRICO Augmentation Plan. It is FMRICO's goal to develop facilities to retime these excess augmentation credits for later use in the FMRICO Augmentation Plan. FMRICO also owns an existing diversion dam from the South Platte River and real property surrounding this dam ("FMRICO Property"). B. Groves operates an augmentation plan that delivers replacement water to offset well depletions caused by irrigation wells owned by Groves ("Groves Augmentation Plan"). Under the Groves Augmentation Plan, Groves irrigates approximately 1,000 acres of farmland in Morgan County. In the past, the Groves Augmentation Plan has relied heavily on leased water sources. It is Groves' goal to develop facilities to divert additional augmentation water, recharge that water, and develop additional and permanent sources of augmentation credits for the Groves Augmentation Plan. Groves also owns real property located approximately four miles south of the FMRICO diversion dam ("Groves Property"). Groves has already constructed some recharge ponds located on the Groves Property and plans to construct more such ponds. C. FMRICO and Groves have jointly developed a plan to construct a pumping plant and pipeline project through which they can divert water from the South Platte River at the FMRICO diversion dam, transport and deliver that water to recharge ponds on the Groves Property("Groves Recharge Ponds") and other properties along the pipeline route ("Pipeline Project"). By virtue of this Pipeline Project, FMRICO will be able to retime excess credits from the FMRICO Augmentation Plan, and Groves will be able to develop additional augmentation credits for use in the Groves Augmentation Plan. D. The purpose of this Agreement is to spell out the terms and conditions under which the parties will continue their joint work on the Pipeline Project, to define how project financing will be obtained, to specify how costs for developing and constructing the Pipeline Project will be shared, and to provide operating terms and conditions for the Pipeline Project after it is completed.