le`C
Pla Docket Golo.1'336—F
WAT:21 PURCHASE CONTRACT
THIS CUNTLACT made this 12th day of July$1939, 'bt3trieon THE LONT.2,11111 VALIZY PUBLIC IRRIGATION DISTRICT, a public corporation duly on;anized and existing under and by virtue of the laws of the State of Colorado (hereinafter referred to as the "District"), and THE ; ,U11A L-IGLTION C01111:Y, a corporation duly organio,ed and existing under and by virtue of the of the .itate of Colorado (hereinafter called the "Utter Purchaser").
WITNESSETII
the .iator Purchaser is organized for the purpose of buildings constructing, purchasing, ac uiring, holding, using, operating, contro:lings managing and maintaining ditches, canals, pipe lines and reservoirs, in order to carry, store and distribute water for irrigation and domestic purposes, and for the purpose of ac:luiring, by purchase or otherwise, ditches, canals, pipe lines or reservoirs, uhether represented by fillings, franchises, easementss
stocks in other corporations or priorities to the use of tor under decre of Court, and to distribute and suplay ..;iater, to its stockholders, for domestic and irrigation purposes.
-IEL.:AS, the 'later Purchaser owns and operates an irale,ation system(including equipment and shops, water rights, and vrater storage and diversion fac:'aitiee, and canals, ditches, laterals and rights of via) for the purpose of supplying
water for irrigation and domestic uses in llonterzatia and Dolores Counties, Colorado, and floods additional water supply; and
?'11:1tEAS, the District proposes to construct an iryigationl)roject,(licreinalter called the "Project") consisting of a water reservoir, designated as the Groundhog Reservoir, a dan and appurtenances, including feeder ditches, and the ac••luisition of necessary land and rights of way, in accordance with the plans and specifications awl. estimates of cost heretofore adopted, and
it is agreed by the parties hereto that the District is entitled to and will be able to store sac: icient water to permit the operation of said project at its full capacity so that not less than 21,000 acre fat of water can -Oe made available annually during, the irilgation season, and the •,ater Purchaser recognizes the right of the District to iev)ound and sell such aforesaid waters, and
to finance a. part el the c st 01 the construction c,f said project the District nropones to is:.ue its negotiable revenue debentures,
(herein called the "(lebentures") in the ag,regate ITinciivkl amount of ',3.84,000, dated Jn.ntr,ry 1,1939, bearing interest at the rate of four (4) per e.litum or annum, paya,le semi-annually and maturing on January 1 in amounts and years as follows: 3,000 4,000 1941-1943, inclusive 1944-1949, inclusive 5,000 1950...1955, inclusive 6,000 1956-1959, inclusive 7,000 19601963, inclusive 8,000 19641966, inclusive 9,000 19671971, inclusive and
11 2:• 33 the Debentures ..11,ich the District will is ue a,v1 'ill be payable solely out of the net revenues of the District, and it is t• erefcre necessary that so long - s any of said Debentures remain outstanding and unpaid, the artivai charges for services rendered by the oistrict must be suf icient to provide for the reasonable yearly expenses of o, eration and Laintenance of the roject including all additions, improvements and extensions thereto, and fc.r the .r)rincieal and interest rek-luirements of the Debentures in the current fiscal year(as herein- fter defined), and to create and maintain in the Debenture Fund a reserve e-lual to the princinal and interest re uirenents of the Debentures for the next two succeeding fiscal :ears, athich reserve shall be used only for the ayment of principal and interest.
1101,1, TIIMEFU E, in consideration of' the promises and the mutual terms, coven nts and conditions hereof, it is mutually covenanted and agreed as fol OWB:
L)ection 1. Upon the comqletion of the 1 rojoct a.O tho availaLility of sufticie t -,ter, during the useful life of the Project, but not after the irrigation season of 1971, the District will furnish the ater Purchaser at the reservoir, annually. during the irrigation season(of each year) all of the
n ter stored by the Project and available, it bein understood that in the event from time to time the District shell have an made uate amount of water from the Project to permit the furnishing in ny year of the full reservoir capacity amount, the distribution of such amount of Iiater as is available shall constitute a com, lete lorforrlance in said year of the obligation f the District to deliver
ater and the ater Purchaser nevertheless shall be oh ted to pay the full sums due under this contract and to perform its covenants and o. ligaticns hereunder.
:,ection 2. The %later Purchaser shall pay to the District, in c'sh, an uaily on or before December 15 in each of the years 1939 through 1971, inclusive, an amount of money suLicient to defray the District's annual expenses for the fiscal ::ear commencing January 1st each year(herein defined as including all necessary
an r,,asonade cost of e,,eration and nninten. nce f the Project, as originally constructed, or as at any time added to, improve,' or (p.tended, II costs incurred by the District in the distribution of 1:ater fro- such 1-roject, all necessary and reasonable rvn- f:cnent expenses f the Astrict, the s ,synent of the rinci al xx of and interest on the de entures above mentioned a the same become due, and
creation and mai Itennnce of a reserve fund). The determin'tion of the District of the amount of and .ocesstity for such an ual expenses shall be final, csnc usive and binding upon the eater Purchaser, and the amount so determined shall be deemed a debt pryable as herein specified, to the same extent As if herein
musaiftexity specified, to the sane extent as if herein s ecffically set out. he annual payment to :e made on or before December 15,1939, sh'al be not less than U5,000, and subse.uent annual 'rynents shall not thereafter be reduced below 1'015,000 until such time as and only so long as there is acci.muleted in the Debenture Fund the gum of gi20,000 except that if there be in said r serve in the !benture fund an amount sufficient to flay the interest on all o) tho outstanding de enturen of the District until the maturity thereof. and to nay such bonds at :aturity, then said reserve inthe Debenture Fund need not be restored to 202000.
The ,ater urchaser agrees that, in a Cition to all other asse,ments, it wi 1 annually levy an assessment upon each and every share of its capital stock which together with funds otherwise available will be suf icient to provide the above cu- s.
r)ection
3.
All monies reeuired to be ! aid by the inter 'Ilrchaser to the District hereunder shall be : a.A at the of ice of the District in the T wn of Cortez, Colorado, or such other :,lace as the District shall appoint in writing. -very installment or other sum of money re uired to La paid hereunder which shall renain unpaid after the sane becomes due, shall bear interest at the rte of six (6) per contumx per emu*.:4ection
5.
The ,ater Purchaser hereby agrees to he bound by fly and all the terms, provisions and limit- tions of the laws of the ;tate of Colorado, end the duly adopted resolutions of the District 'ortaining to the operations of the District, including all amendments and supplements hereafter made thereto, as fully and completely as if the terns, conditions and limtition therein contained were herein fully written.The ,ater Purchaser hereby consents and agreJs to the execution by the District of any debentures re uired in finencing the construction of the Project, the assignment thereby of the interest of the District in and to this eter Purchase Contract, and to the remedies of any trustee thereunder in the event of default by the District in its obligations under the debentures.
:Action
5.
Both the I) strict and the ,ater Purchaser will L ro- er booksof record and accounts and each arty will furnish t the other, not nore than sixty days after the close of each fiscal year, corelete finenciel stateeents of the respective parties. Duly authorized agunts of each party 'ereto shall have the right et all reasonable times to inseect the i rigation systems and the records of the other.
C,e tion
6.
To secure the due performance on the , art of the ater Purchaser of all of its covenants and ogre emits hereunder, the ate' Purchaser has this day, simultaneously with the execution of this Contract, executed and delivered to the District, its Indenture of Mortgage. covering all of its - roperties, real, personal, or nixed and whereever situated, and hereby agrees that in the event that any default is eade by the .ater Purchaser under any of its covenants or agreements under this Contract or under said Mortgage, the District nay roceed ns in said Mortgage erovided.;ectf.on 7. In the event thar the eter Purchaser shall fail to make any peyment by this contr.-et re ,uired to be e_ade by it, or shall fail to observe or perform any other cceenent or condition of this Contract or of the nort-age securing the due perferrance thereof( and such default shall have continued for a eeriod of ni ety (90) drys aAer written notice thereof to the ater Purchaser by the District) and by reason of said failurepckimadmdanimilolumextentnd or
failuresothe District hat- elected to declare a total Preach of this Contract, rnd to foreclose on the liort,:age securing the same, than as iiluidated cienec,es for said breach, the ,inter Purchaser covenants and agrees to pay on amount e'ual to:
(a) The amount refluired to pay oil debts incurred by the District in operating and maintaining same through the dote w the gorti;age force osure sale and owed by the District on said Date, plua (b) 'ho amount renuired to pay all delin uent interest on the
debentures of the District as of the date of the foreclosure sale, elua
(c) The amounts re uired to pay any interest ehich eill accrue on any of the outstending debentures of the District until the earliest date fol'owing the (':- te of such for closure sale on which it is pceeiLle to redeem said debentures, • lus
(d) Th.; amount re uirod to redeem all outstanding debentures of the District in accordance with the turns thereof, on the earliest date follouing the date of such foreclosure
sale on Jhich it is possible to redeum said bonds.
Asti n 8. The iater Purchaser agrucs that in the event the trustee undo: any de enture given by the District to secure the payment of the debentures above reierred t. shall e written hot ice t the ,:ater Purchaser that the
District is in default in the performance of any of its obligations under said debentures, and that the trustee has ele ted to exorcise the function of the District under this cntract, all monies duo or to Leco_e due and payable to the Lstrict hereunder shall be paid to the xiustee, and the rustee in its awn -aro shall have the sole right to enforce this Contract and the Mortgage securing same, an' to exorcise aL the ights and powers of the District , ith respect thereto, unless and until the Trustee shall give written notice t the
ater Purchaser that the District itsself may 20E1=0 the co action of moneys
and the exercise of its poaers under this Contract and the iert['sge securing sar-.o..1.1onies to be paid by the ;Aar Purchaser to the Trustee under the Fravisions of this :Aaction shall be paid at such lace as the Trustee shall a' :pointin milting.
Section
9.
The 'ayments and obligations of the dater PurChaser hereunder arc for the ::rivilege of obtaining water so long as the ater Purchaser shall not be in defauly uncle:. this Contract and its rights hereunder have not terninrted, and the ater Purchaser shall be ob1L7ated to mahe the ,ayrrlent srovided for herein, and to ,erform its cevensnts and d-ties h.2reunder notwithstanding the fact that no water shall ho available by reason of a shortage or otherwise, or that no water is actually then by the .ater Purchaser, or that the District may be axeresing one or TIore of its rights under the nort go securing the contract, or that the District may bu withholding water from the ator Purchaser by reason of its default under this c>ntract or under the mortgage securing same( except to the extent of the revenues co - ected by the District fru the sale of 'ter with'eld from said Ater l'urchaser). The obligation of the ater Purchaser tomake the payments
re.uired hereby shall 11) absolute and unconditional, so long as th's contract renanis i fu _ force and ofect. It
is expressly understood that all the right, title and interest in and to the Project andthe
ter
rights exercised in. connection therewith shall be and remain i the District
and
that the Ater Purchaser shall ac,.uire no r4 ,:hts or e uities under this contract which wil in any nznner prejudice the right of the District to terminate this Contractin the avant that the ater Purchaser shall be in default hereunder.Se tion 10. For the purpose of this contract(but not necessarily for all purposes of the District) the fiscal year of the District shall commance January 1 and run for twelve (12) months u to and including Decerther 31.
Section 11. The provisions of this contract shall a ,ply to and bind the succes:.;ors and asz-iigns of tho respective parties, but the ..,ator Purchaser shall rake no as:3igviont of this Contract without the written consent of the District.
III'dITIL,13 MiiltEOF, the parties ht:reto have signed this Contract in duplicates as of the day and year hereinabove sot forth, the signature of each corporate party eing affixed by its duly authorized oi.ficers.
THE IfuNTYZ,I.J11A 'ALLEY PUI3LIC ThilGATION DISTRICT By J.L. Glenn (SE(L) President ATTaiTt JOhn J. Downey 3ecr,:tary
TIE; B.;;;T::',..U11A VALLIZ IR: IGATION CO. :3/
, resident ATT-bT:
Flovd C. .radfiold :,ocretary
ESCROW AGREMENT
THIS AGREEMENT made and entered into this 15th day of June, 1939, between the Lontezuma Valley Irrigation Company, party of the first part, hereinafter called the "Company", The Montezuma
Valley Public Irrigation District, party of the second part, herein-after called the "District", and the Citizens State Bank, Cortez, Colorado, party of the third part, hereinafter called the "Bank",
TITNESSETH:
MEREAS, simultaneously with the execution of this agreement, the Company and the District have entered into a certain contract, which contract among other things provided for certain annual pay-ments by the Company to the District for the purpose of paying
the
expenses of operating and maintaining the District, and for the pur-pose of providing a fund to pay the principal on and interest of bonds proposed to be issued by the District plus a reserve therefor, and7HEREAS, said contract further provides "the annual pment to be made on or before December 15, 1939, shall be not less than 7if-teen Thousand Dollars ('15,000), and subsequent annual payments shall not thereafter be reduced below Fifteen Thousand Dollars (15,000) until such time as and only so long as there is accumulated in the Reserve Fund the sum of Twen y Thousand Dollare (20,000) excert that
.61
if there be in said Reserve,\a mount sufficient to pay the interest on all of the outstanding bonds of the District until the maturity thereof, and to ray such bonds at maturity, then said 7eserve 7und need not be restored to Twenty Thousand Dollars ( -120,a,0) and
—T79EAS,
the
Company desires to meet its obligation under the paragraph above quoted by depositing with the Bank, subject to the ..scrow Agreement hereinafter set forth, one thousand (1j00) sharesof its treasury stock, and
THEREAS, subject to the terms of the agreement hereinafter set forth, such action 1s considered by the District to constitute
full compliance with said provision of said contract.
NOW TTTEREFORE, in consideration of the Premises and of the mutual terms and conditions hereinafter set forth, it is hereby agreed by and among the parties hereto as follows:
1.
The Company shall deposit with the Bank, as agent in escrow, one thousand ('1000) shares of the stock of The 1-ontezuma Valley ir-rigation Company now held by the Company in its treasury.
11.
The Company will use diligent effort to obtain purchasers for said stock at a price of not less than 2wenty Dollars (20) per share.
111.
'Irom time to tie the Bank shall deliver such stock duly endorsed to the purchaser or purchasers thereof upon receipt by it of the purchase price, provided that the Bank shall not so deliver any of such stock except upon receipt of payment in casiOat the rate of Twenty Dollars (1;20) per share or more. Immediately upon receiv-ing the proceeds of any such sale the Bank shall pay the same over to the District, which shall Place the same in its eserve
1V.
If, prior to the expiration of five (5) years from the date of this agreement, the District shall have accumulated from the pro-ceeds of the sale of the shares held in escrow, or froll, other
sources, the full sum of Twenty Thousand Dollars V320,000kin its
aeserve Fund, this agreement shall forthwith terminate, and any shares remaining in escrow shall immediately be returned to the Company to be held by it free from the provisions of this agreement.
V
.
If, at the expiration of five (5) years from the date of th4Ri agreement, the District has not accumulated in its Reserve Tund from
the sale of the shares above mentioned, or from other sources, the full sum of -LVenty Thousand Dollars ( ii'20,000) cash, then the Bank shall forthwith proceed to sell so many of the shares still re-maining in its hands as is necessary to supply such deficiency at public auction for the best price obtainable, in any general accecpi-ble place in the County of Montezuma after advertisement for not less than four (4) weeks in some newspaper of .general circulation in said
the expense
County of Montezuma, and the Bank, after paying/of such sale, shall remit the proceeds of such sale to the District for deposit in its
Reserve 2und. Any shares in excess of the amount required to supply such deficiency in the Jistrict's Reserve lund shall be turned over to the Company.
Vl.
If, after such sale, any deficiency in said Twenty Thousand Dollars ( ;20,000) cash in said Reserve 'und still exists, the Company shall forthwith levy an assessment upon all of its outstanding capi-tal stock sufficient to produce the amount of such deficiency, and shall turn the proceeds of such levy over to the District for deposit in its Reserve Fund.
Vll.
The Company covenants and agrees that until said Twenty :hou-sand iollars (20,000) cash Reserve Fund has been created, it will not
sell or otherwise dispose of any shares of stock of said Company now or hereafter held by it in its treasury, and generally, that it will do all in its power to stimulate and foster the sale of the stock by
this agreement placed in escrow.
The District agrees that it is indebted to the Company in the amount of :Pour Thousand Six Hundred Twenty -6ight Dollars (4628) and that said :our Thousand Six Hundred Iwenty Eight Dollars ( 434628) shall apply as a credit against the Fifteen Thousand Dollars
that only the balance, to-wit, Ten Thousand Three T'undred eventy -two Dollars (1_0,372) need be paid in cash.
lx.
The 'District further agrees that the execution of this agreement, and the delivery of the shares of treasury stock to the Bank, constitutes the creation of the Twenty Thousand Dollars
c4rtrvx—f+Acrtiri ALikitxt 4+2.4t- "- 1“-•"41-'t t`if
-teut/1--(20,000) Heserve ':und provided for in the agrceer:,ent the annual payments to be made on December 15, 1940, and subsequent years, may be re,luced to an amount sufficient only to cover all necessary and reasonable costs of operating and maintaining the District's water storage system as originally constructed, or as at any time added to, improved or extended, all costs incurred by the District in the dis-tribution of water from such system, all necessary costs and reasonable management expenses of the District, and the payment of the principal of and interest on the bonds which the 'District proposes to issue, without regard to the creation of Reserve 7und. rrovided, however, that if, at any time or times after the termination of this agree-ment, the Reserve 7und shall be reduced below Twenty Thousand -Dollars (20,000), then in addition to a levy sufficient to defray said costs
of operating and maintaining the system ., anaging the District, and the payment of principal and interest on the bonds proposed to be is-sued by the District, there shall be levied an assessment sufficient to restore said Reserve Fund to said sun of Twenty Thousand Dollars ( 20,000), except that no such levy shall be required if there be in
said Reserve Fund an amount sufficient to pay interest on all of the
outstanding bonds of the District until the maturity thereof, and to redeem same at maturity.
X.
By the execution of this aEreeLent, the -Bank acknowledges receipt of the one thousand (1000) shares of stock in The :Thntezuma
7a11ey Irrigation Company herein referred to, and agrees to hold said stock subject to and to abide by the terms of this agreement.
IN 7:ITNESS WHEREOF, the parties hereto have signed this agreement as of the day and year hereinabove set forth, the signa-ture of each corporate Party being affixed by its duly authorized
officers. ATTEST: ATTEST: —) T MONTE-BY
ATY IR1 ATIO CWrANY
fres en
THE MO TE Vft LEY PUBLIC IRRIGATION DISTRICT By dmif if
ecre
ATTEST
CITIZENS STATE BANK By
Secre ary
