2014-06-23_ENFORCEMENT - M2013036

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IRRIGATION WATER LEASE AGREEMENT THIS IRRIGATION WATER LEASE AGREEMENT (hereinafter "Lease Agreement"),is made and entered into this 13h day of June,2012 by and between MICHAEL R. THREADGILL, P. O. 1159, Burnett, Texas 78611 (hereinafter "Lessor°') and LUKE THE DUKE,LLC, a Colorado limited liability company, 989 County Road 120, Hesperus, Colorado 81326(hereinafter"Lessee"). RECITALS WHEREAS, Lessor is the owner of irrigation water rights consisting of 28.67 Class B Shares in Hay Gulch Ditch Incorporated(the leased water rights)and Lessee desires to lease said water rights for purposes of irrigation. AGREEMENT NOW THEREFORE, in consideration of the mutual covenants and agreements herein contained,the parties agree as follows: 1. TERM: The term of this Lease Agreement shall be for two (2) years, commencing June 13, 2012, provided however, that this Lease shall be extended for so long as Lessee is not in default on that certain Promissory Note dated June 13,2012 wherein Lessee is borrower and Lessor is payee; 2. PERMITTED USES: The irrigation water described herein shall only be used by Lessee for irrigation purposes; 3. PAYMENT TERMS: Lessee shall pay the sum of$100.00 and 00/100 Dollars ($100.00) payable in full upon the commencement date of this Lease Agreement. Lessee shall be responsible for paying all ad valorem taxes, fees and assessments for the water rights during the lease term; 4. LESSEE'S RESPONSIBILITIES: Lessee shall be responsible for use of the leased water rights in compliance with all restrictions, rules and regulations of Hay Gulch Ditch Incorporated pertaining to said irrigation water, 5. LESSOR'S LIABILITY: Lessor shall not be liable for any loss, damage or injury to Lessee, Lessee's agents,employees,livestock or crops; 6. INDEMNITY OF LESSOR: Lessee shall indemnify and hold Lessor harmless against any loss, costs, damages,and claims that arise from Lessee's negligence or wrongful acts and shall further indemnify and hold Lessor harmless against and from any loss,costs, damages and claims to the extent that such damages arise from Lessee's negligence or wrongful acts or of his agents, contractors, servants, invitees, employees and against all costs, attorney fees, expenses and liabilities incurred or paid in connection with any such claim or any action or such proceeding brought by Lessor by reason of Lessee's use of the leased water rights;