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11 <br />19.3 'A*06 <br />RECEIVE <br />?AR p ??11 <br />/PURCHASE AND SALE AGREEMENT ? <br />1*MG000' <br />LDi 011CI !ot & 5016ty <br />(EAGLE PARK RESERVOIR PROJECT) T7l Min?A9 <br />This Purchase and Sale Agreement, dated this 17th day of June, 1998, is among CLIMAX <br />MOLYBDENUM COMPANY, a Delaware corporation ("Climax"), VAIL ASSOCIATES, a <br />Colorado corporation ("VA"), and EAGLE PARK RESERVOIR COMPANY, a Colorado <br />mutual ditch and reservoir company (the "Reservoir Company"). <br />RECITALS <br />A. Climax is the owner of the Climax Mine and Mill, and ancillary facilities, which <br />cover approximately 22.6 square miles in Summit, Eagle, and Lake Counties, Colorado, and <br />which encompass portions of the headwaters of Ten Mile Creek, the East Fork of the Eagle <br />River, and the East Fork of the Arkansas River (the "Climax Property"). <br />B. Climax is the owner of a reservoir known as Eagle Park Reservoir (a/k/a Dam No. <br />4), which is located on the Climax Property in portions of the N1/2 of Section 33, T. 7 S., R. 79 <br />W. of the 6th P.M. The legal description of Eagle Park Reservoir, including the dam and a <br />buffer area surrounding the high water line of the reservoir which is included in this purchase and <br />• sale, is more fully set forth in Exhibit A attached hereto. The existing storage capacity of the <br />reservoir is 3,148 acre feet. <br />C. Eagle Park Reservoir was historically used to store waste material from a milling <br />process used by Climax during the 1960's. Climax began reclaiming Eagle Park Reservoir in the <br />summer of 1994, with the ultimate goal of transforming the reservoir into a fresh water storage <br />facility. <br />D. It is the desire of the parties that upon completion of reclamation Eagle Park <br />Reservoir will be used to store fresh water for water supply purposes, and that water released <br />therefrom will be delivered to the East Fork of the Eagle River. Climax and the Reservoir <br />Company are working cooperatively to develop firm annual yield in Eagle Park Reservoir which <br />would help meet the water supply needs of the Reservoir Company and its shareholders. The <br />reclamation and development of Eagle Park Reservoir as a water storage facility and the <br />development of firm annual yield for the reservoir are collectively referred to herein as the <br />"Eagle Park Reservoir Project" or the "Project." <br />E. Pursuant to the terms of a Purchase Agreement between VA and Climax dated <br />April 9, 1993, and recorded in the real property records of Eagle County in Book 504 at Pages <br />347A-445 (the "1993 Agreement"), VA acquired rights to the "AW Water Rights" as that term is <br />defined in paragraph 1.1 of the 1993 Agreement, including the first 500 acre feet of the Arkansas <br />• Well Water, as that term is defined in Recital B of the 1993 Agreement (the "AW Priority <br />fd2669