Town of Castle Rock Agreement for Aquisition

3.1.2. The Initial Closing of the Initial Acquisition will be held ten (10)
business days after Purchaser has signed its Water Provider Agreement.
3.1.2.1. At the Initial Closing, the Purchaser will deliver to
the CWCB: (1) the Initial Payment Amount in cash, certified funds, or by electronic
transfer; (2) a duly executed written acceptance and assumption of responsibility to
pay to the CWCB the O&M-RRR&R costs associated with the Initial Acquisition as
and when such costs are quantified and become due; and (3) a written specific
undertaking and acceptance of responsibility to pay to the CWCB all O&M-RRR&R
costs attributable to the Optioned Orphan Shares as and when such costs are
quantified and become due. The Parties acknowledge that O&M-RRR&R costs will
not be assessed by the Government until construction on the Reallocation Project is
complete.
3.1.2.2. At the Initial Closing, the CWCB will deliver to the
Purchaser: (1) a duly executed assignment assigning to Purchaser the CWCB's
rights to 87 acre-feet of Orphan Shares corresponding to the Initial Acquisition.
3.2. Installment Option. For and in consideration of the sum of $10.00 in
hand paid and other good and valuable consideration, including the specific
undertaking and acceptance of responsibility to pay to the CWCB all O&M-RRR&R
costs attributable to the Optioned Orphan Shares, as and when such costs are
quantified and become due, the receipt of which the CWCB acknowledges, the
Purchaser shall have an option to purchase additional increments of the Optioned
Orphan Shares, up to a cumulative total of 1,300.339 acre-feet of Orphan Shares:
3.2.1. Exercise. Beginning in 2015, and thereafter at least once in
each calendar year until the earlier of the expiration of the Term of the Installment
Option herein, or termination of this Agreement in accordance with Paragraph 4
herein, the Purchaser may exercise its option to purchase additional increments of
the Optioned Orphan Shares, as follows:
3.2.1.1. Notice of Intent to Exercise. Purchaser shall notify
the CWCB in writing, as provided in Paragraph 8.1 herein, on or before September
15 of each year during the option term: (a) if it intends to exercise an Installment
Option during that calendar year; and (b) if so, the amount of Optioned Orphan
Shares it will acquire in that year. Provided that the increment of Optioned
Orphan Shares to be acquired shall be no less than the lesser of 87 acre-feet, or the
difference between 1,300.339 acre-feet and the quantity, in acre-feet, of Optioned
Orphan Shares previously acquired by Purchaser pursuant to this Agreement.
3.2.1.2. Installment Acquisition Payment Amount. The
amount to be paid by Purchaser to the CWCB for each Installment Acquisition
("Installment Acquisition Payment Amount") shall be: (1) the Base Water Charge
for the Orphan Shares to be acquired; plus (2) if the Reconciled Payment Obligation
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