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WATER LEASE AGREEMENT and RIGHT OF F1R,ST REFUSAL <br />THIS AGREEMENT made this g7N day of OC'-T~~~ .2004, by and <br />between the Boazd of Water Works of Pueblo, Colorado, hereinafter referred to as the "Board," <br />and C.R. Evans, hereinafter refemd to as "Evans." <br />BACKGROUND INFORMATION <br />The following statements are intended to provide backffound for this Agreement and to <br />aid in understanding attd interpreting this Agreement. <br />A. Evans owns the land described in the attached Exhibit A consistigg of 448 acres <br />permitted under the Colorado Division of Minerals and Geology ("DMG' Permit No. M-2000- <br />041 that is currently issued in the name of LaFarge West, Ina ("LaFarge West'7; <br />B. By mutual agreement between LaFarge West and Evans, Evans is in ffie process <br />of completing the DMG's requirements for becoming the successor operator under Permit No. <br />M-2000-041; <br />C- Evans is the successor in interest to LaFazge West, under a certain Water Lease <br />between the Board and LaF'arge West dated July 21, 2000, and that Water Lease is not amended <br />or modified in any manner by this Agreement; <br />D. Evans intends to file a request for revision of DMG Permit No. M-2000-041, <br />which currently allows for the mining of 15 surface acres, to allow the training of 50 stufaee <br />acres; <br />E. As part of the DMG's requirements for succession of an operator, Evans is <br />required to either have a commitment for Augmentation of the Mined Land, or post a <br />reclamation bond that assures that the Mined Land will be backf~lled. <br />F. Evans intends to amend the current DMG approved reclamation plan under <br />Permit No. M-2000-04, to provide for Slurry Walls and, once approved, such an amendment will <br />eliminate the need for either Augmentation of the Mined Land, or a bond to backfiil the mine <br />site; <br />G. The Board is willing to enter into an agreement on the terms set forth below to <br />provide Augmentation water for tho Mined Land; and <br />FI. The water use that is the subject of this Agreement is of a type not normally <br />within any regular rate schedule fixed by the Board, and the parties mutually agree that the ternts <br />of base and delivery of water for the purposes set forth should be the subject of this special <br />Agreement. <br />500 S9NI2Id5 TIV618PIbSS 88S98988TL %dd CT~CT 9005/90/OT <br />