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05/24/2810 09:10 17193365031 R M HIIER CONST CO I PAGE 03 <br />COPY <br />WATER LEASE AGREEMENT <br />(GRAHAM DITCH) <br />This Water I-ease Agreement ("Agreement's is entered Into this 1_ day Of <br />MAY -. 2010 by and between R.M. Hiner Construction Co., Inc., "Lessee` and <br />GRAHAM DRAINAGE DITCH COMPANY ("Ditch Company'), `Lessor". <br />A. The Ditch Company owns and operates, for the benefit of its shareholders, the Graham Seepage <br />and Drainage Canal and the water right decreed to that Structure In case Na W-7818-74, District Court, <br />Water Division No. 1 ("Graham Duch'). The Graham Ditch is decreed as a developed water right for up to <br />2800 acre feet per year. The Graham Ditch originates M Section 27 of Township 7 North, Range 6B West <br />of the e`" P.M., Weld County. Colorado and Is capable of delivering water to the Cache La Poudre River at <br />two points In section 36 of Township a North, Range 66 West of the a P.M„ Weld County, Colorado. <br />B. Lessee intends to operate and administer a Substitute Water Supply Plan CSWSP"). Lessee <br />desires to lease water temporarily from Lessor until Its permanent sources of augmentation water are in <br />place. <br />C. Lessor is willing to lease to Lessee water delivered from the Graham Ditch to the Cache Le <br />Poudre River, and Lessee desires to lease such water, in accordance with the terms and conditions of <br />this agreement. <br />AGREEMENT <br />Now, therefore. In consideration Of the foregoing recitals, and mutual covenants and agreements herein, <br />and for other good and valuable consideration, the receipt and sufficiency of which is hereby <br />acknowledged, the parties agree as follows: <br />1. Lease, Lessor hereby leases and agrees to provide to Lessee up to 61.7 acre feet of fully <br />consumable water from the Graham Ditch (the "Graham Ditch Water] according to the monthly schedule <br />below, subject to the limitations, terms and conditions stated herein. <br />A JI %,Vkmj In ac ft <br />2010 <br />Apr May Jun Jul Aug Sep Oct <br />Total <br />0 8.8 12.3 13.5 12.5 8.8 5.8 61,7 <br />2. Rgihl. Lessee shall pay Lessor $50 for each acre foot of fully consumable Graham Ditch Water <br />that Is made available to Lessee In accordance with the measurement and delivery terms set forth in <br />Paragraph 3 of this Agreement and approved by the State Engineer for consumptive use In the SWSP. <br />Within five (5) days following the and of each calendar month, Lessor shall provide Lessee with a written <br />statement indicating the total number of acre feet of Graham Ditch Water made available to Lessee for <br />replacement and augmentation use during that month. Lessee's payment shalt be due no later then <br />twenty (20) days following submission of the bill. Lessee shall make all rental payments to the Lessor In <br />care of the Ditch Company, and the Ditch Company shall be responsible for distributing such payments <br />amongst its shareholders according to their pro rata share. <br />3. MCasurement and Delkerv. The point of delivery for the Graham Ditch water leased pursuant to <br />this agreement shall be to the Cache La Poudre River at the point when: the least Lateral of the Graham <br />Ditch is capable of delivering to the Cache La Poudre River in Section 36 of Township 6 North, Range e6 <br />West of the a P.M., Weld County Colorado. Lessor shall make daily metered measurements of <br />deliveries of the Graham Ditch Water and shall provide reports of such deliveries to Lessee on a weekly <br />1 of 3 <br />Received Time May, 24. 2010 9:14AM Flo. 2702