HomeMy WebLinkAbout20-03 - Approval of Agreement with the Northern Intergrated Supply Project Water Activity Enterprise (NISP)RESOLUTION N0.20-03
A RESOLUTION OF THE BOARD OF TRUSTEES OF THE TOWN OF FIRESTONE,
COLORADO, APPROVING AN AGREEMENT WITH THE NORTHERN
INTEGRATED SUPPLY PROJECT WATER ACTIVITY ENTERPRISE, FOR
PARTICIPATION IN THE NORTHERN INTEGRATED SUPPLY PROJECT
WHEREAS, the Northern Integrated Supply Project Water Activity Enterprise (the
"NISP Enterprise" or "NISP") is a government -owned business within the meaning of Article X,
§ 20(2)(d) of the Colorado Constitution, organized pursuant to C.R.S. §§ 3745.1401 et seq.,
which is owned by the Northern Colorado Water Conservancy District; and
WHEREAS, NISP is a complex regional water supply and storage project that will be
developed over time by the NISP Enterprise for the purpose of providing water supply, water
storage, and related benefits to the participants that elect to participate in NISP; and
WHEREAS, NISP has been and will be developed in multiple phases over a period of
time; and
WHEREAS, NISP Phase 1 includes the pre -construction elements and actions for NISP,
including but not limited to acquisition of certain assets, such as (i) real property and other assets
for NISP reservoir sites and associated facilities, (ii) stock in or other agreements with mutual
ditch companies, irrigation companies, water companies and water users' associations, and (iii)
real property or interests in real property associated with the use of such stock or other
agreements ("NISP Phase 1 Assets"), and operation, maintenance, and improvement costs for the
NISP Phase 1 Assets; and
WHEREAS, the Town of Firestone (the "Town") has a substantial investment in NISP to
date; and
WHEREAS, the Town and the NISP Enterprise desire to enter into a NISP Phase 1
Agreement to provide funding for NISP Phase 1 activities and to define the Town's current
rights and obligations in NISP; and
WHEREAS, approval of this NISP Phase 1 Agreement assures the Town of its ability to
participate in NISP Phase 1 activities.
NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF TRUSTEES OF THE
TOWN OF FIRESTONE, COLORADO:
The NISP Phase 1 Agreement between the Town of Firestone, acting with and on behalf
of the Firestone Water Activity Enterprise, agovernment-owned business within the meaning of
Article X, § 20(2)(d) of the Colorado Constitution, organized pursuant to C.R.S. §§ 3745.1-101
it seq., and owned by the Town, and the Northern Integrated Supply Project Water Activity
Enterprise is approved in a form substantially similar to the one attached hereto and made a part
of this resolution as Exhibit A. The Mayor is hereby authorized to execute the NISP Phase I
Agreement on behalf of the Town.
WN OF FIRESTONE, COLORADO
bi Sinde�iar, Mayor
AS TO FORM:
'Town Attorney
e
NISP PHASE 1 AGREEMENT
DATED AS OF JANUARY �, �,�;'�
BY AND AMONG
NORTHERN INTEGRATED SUPPLY PROJECT WATER ACTIVITY ENTERPRISE
AND
THE NISP PHASE 1 PARTICIPANTS LISTED HEREIN
TABLE OF CONTENTS
Section1. Definitions................................................................................................................... 2
Section 2. Purpose %J Agreement and NISP Allotment............................................................... 4
Section3. Funding....................................................................................................................... 5
Section 4. NISP Participation Percentages.................................................................................. 6
Section 5. Future Development of NISP Phase 1........................................................................ 6
Section 6. Default and Forfeiture................................................................................................. 7
Section7. Term............................................................................................................................ 9
Section 8. Withdrawal from Agreement or Withdrawal from or Reduction in Further NISP
Par-ticipation.................................................................................................................................... 9
Section 9. Transfer of NISP Allotment; Admission of New NISP Phase 1 Participants........... 10
Section 10. Project Termination.............................................................................................. 11
Section 11. Liability of Enterprise and NISP Phase 1 Participants ......................................... 13
Section12. Amendments......................................................................................................... 14
Section 13. Assignment; Binding on Successors..................................................................... 14
Section 14. Third Party Beneficiaries...................................................................................... 14
Section15. Counterparts.......................................................................................................... 14
Section 16. Merger of Prior Agreements................................................................................. 15
Section17. Severability........................................................................................................... 15
Section 18. Choice of Law; Venue.......................................................................................... 15
Section19. Notices.................................................................................................................. 15
EXHIBIT A NISP PHASE 1 PARTICIPANTS
EXHIBIT B NISP PHASE 1 DESCRIPTION AND SUMMARY WORK PLAN
EXHIBIT C NOTIFICATIONS
THIS NISP PHASE 1 AGREEMENT (this "Agreement") dated as of January,
2020, is made effective as provided in Section 7.1 hereof by and between (a) the Northern
Integrated Supply Project Water Activity Enterprise (the "Enterprise"), and (b) The Town of
Firestone, a municipal corporation, acting with and on behalf of the Firestone Water Activity
Enterprise, a government -owned business within the meaning of Article X, § 20(2)(d) of the
Colorado Constitution, organized pursuant to C.R.S. § 3745.1-101 et seq., and owned by the
Town of Firestone (the "Participant"), and is made with reference to the following facts:
RECITALS
A. The Enterprise is a government -owned business within the meaning of Article X,
§ 20(2)(d) of the Colorado Constitution, organized pursuant to C.R.S. §§ 3745.1401 et seq., that
is owned by the Northern Colorado Water Conservancy District ("District"), and whose address
is 220 Water Avenue, Berthoud, Colorado 80513. The Enterprise is a water activity enterprise that
will exercise the authorities granted by C.R.S. §§ 3745-101 etseq., 3745.1.101 etseq., 31-35401
et seq., and any other relevant grant of statutory authority for the purpose of the planning,
Financing, acquisition, construction and operation of the Northern Integrated Supply Project
("NISP").
B. NISP is a complex regional water supply and storage project that will be developed
over time by the Enterprise for the purpose of providing water supply, water storage, and related
benefits to the Participant and all other participants that elect to participate in NISP (collectively,
the "NISP Phase 1 Participants"), and that, from time to time, execute an agreement in a form
substantially similar to this Agreement (a "NISP Phase 1 Agreement") for the purpose of
receiving a NISP Allotment, as is further defined in Section 1 below and in Exhibit A attached
hereto.
C. NISP is described in general in the Summary section of the U.S. Army Corps of
Engineers Final Environmental Impact Statement for the Northern Integrated Supply Project.
D. NISP has been and will be developed in multiple phases over a period of time.
"NISP Phase 1" includes the pre -construction elements and actions for NISP more generally
described in Exhibit B attached hereto, which may be modified from time to time by the
Enterprise.
E. The Enterprise is entering into a NISP Phase 1 Agreement with each NISP Phase 1
Participant to provide funding for NISP Phase 1 activities and to define the NISP Phase 1
Participants' current rights and obligations in NISP.
AGREEMENT
THEREFORE, in consideration of the facts recited above and of the covenants, terms, and
conditions set forth herein, the parties agree as follows:
Section 1. Definitions
"Agreement" has the meaning assigned to the term in the introductory paragraph to this
Agreement.
"Annual Interim Agreement" means the annual funding agreements entered into between
the Enterprise and the NISP Participants under which the NISP Participants agree to pay, on a pro
rata basis, for the operation, maintenance, legal, administrative, improvement, and other costs of
developing NISP. The most recent Annual Interim Agreement was the Fifteenth Interim
Agreement, executed in 2019. The Annual Interim Agreements do not and will not provide funds
to pay for NISP Phase 1 Project Costs, which instead are subject to this Agreement.
"District" has the meaning assigned to the term in the recitals to this Agreement.
"Enterprise" has the meaning assigned to the term in the introductory paragraph to this
Agreement.
"Enterprise Board" means the Board of Directors of the Enterprise.
"Event of Default" means an event described in Section 6.1 or Section 6.4 hereof as an
Event of Default.
"Fiscal Year" means the fiscal year of the Enterprise, which currently begins on October 1
of each calendar year and ends on September 30 of the following calendar year, or such other
twelve-month period which may be designated by the Enterprise as its Fiscal Year.
"NISP" has the meaning assigned to the term in the recitals to this Agreement.
"NISP Allotment" means the number of NISP Units allotted by the Enterprise to a NISP
Phase 1 Participant pursuant to a NISP Phase 1 Agreement, including the allotment of NISP Units
to the undersigned Participant pursuant to Section 2.2 of this NISP Phase 1 Agreement. Exhibit A
shows the current NISP Allotment of NISP Units to each NISP Phase 1 Participant.
"NISP Assets" means, and may include, without limitation, water, waterworks, water
rights, rights to water, or contractual or other interests in water, sources of water supply, works,
improvements, water projects, water facilities, stock in or other agreements with canal companies,
water companies, and water users' associations, and real and personal property or interests therein
that are necessary or convenient to or for the diversion, storage, collection, and distribution of
water yielded by NISP to and for the use of NISP Phase 1 Participants. NISP Phase I Assets, as
defined below, are a subset of NISP Assets.
"NISP Participant" means an entity that holds a NISP Allotment.
"NISP Participation Percentage" means the quotient of a NISP Phase 1 Participant's
NISP Allotment divided by the sum of all NISP Phase 1 Participants' NISP Allotments, as such
NISP Participation Percentages may be modified in accordance herewith. The NISP Participation
Percentages are further described in Section 4 hereof and are set forth in Exhibit A hereto opposite
each NISP Phase 1 Participant's name.
"NISP Phase 1 Agreement" has the meaning assigned to the term in the recitals to this
Agreement.
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"NISP Phase I Asset Disposition" means any sale, lease, transfer, or other conveyance of
NISP Phase 1 Assets by the Enterprise occurring before adoption of a resolution of project
termination under Section 10.1.
"NISP Phase 1 Assets" are NISP Assets that the Enterprise has determined should be
acquired at this point in the development of NISP in order to assure that these assets will be
available for integration into NISP. NISP Phase 1 Assets include real property and other assets
purchased with funds made available as the result of this Agreement that are necessary or
convenient to the construction and operation of NISP, including without limitation (i) real property
and other assets for NISP reservoir sites and associated facilities, (ii) stock in or other agreements
with mutual ditch companies, irrigation companies, water companies and water users' associations,
and (iii) real property or interests in real property associated with the use of such stock or other
agreements. Each of the District and the Enterprise own and/or control other assets that are or may
in the future be a part of NISP that are not included within NISP Phase 1 Assets as defined for the
purposes of this Agreement.
"NISP Phase 1 Budget" means the NISP Phase 1 Budget approved by the Enterprise
Board on August 1, 2019, as such NISP Phase 1
Budget may be amended or supplemented from
"NISP Phase 1 Capital Funding Obligations" means the pro rata obligations of each
NISP Phase 1 Participant to fund NISP Phase 1 Project Costs in the amounts set forth in Exhibit A
attached hereto. The amount of NISP Phase 1 Capital Funding Obligations is the product of the
NISP Participation Percentage multiplied by the NISP Phase 1 Project Costs.
"NISP Phase 1 Participants" means all NISP Participants which execute a NISP Phase 1
Agreement, including any additional parties who execute a NISP Phase 1 Agreement from time to
time pursuant to Section 9 hereof.
"NISP Phase 1 Project Costs" means all costs associated with the purchase, acquisition,
improvement, operation, and maintenance %J NISP Phase 1 Assets. NISP Phase 1 Project Costs do
not include and are separate from the annual NISP costs paid under Annual Interim Agreements.
"NISP Unit," for purposes of this Agreement, means the right to 1 /40,000th of the benefits
and yield of NISP, which may include water supply, delivery, and storage, subject to any terms
and conditions included in subsequent agreements related to future phases of NISP or otherwise
in the final allotment contract between the parties. There are 40,000 NISP Units. The Enterprise
and the Participants agree that "NISP Unit" may be defined in greater detail in subsequent
agreements related to future phases of NISP or otherwise in the final allotment contracts for NISP.
"Upfront Payment" means the cash payment made by a NISP Phase 1 Participant to the
Enterprise for the purpose of paying its NISP Phase 1 Capital Funding Obligations.WWWROW
Section 2. Purpose of Agreement and NISP Allotment
2.1 Purpose of Agreement. The purpose of this Agreement is to (i) confirm the
Participant's NISP Allotment, which allotment maybe further defined in one or more subsequent
allotment contracts between the Enterprise and such Participant; (ii) provide for the acquisition
and funding of NISP Phase 1 Assets; and (iii) define Participant's pro rata share of and obligation
to pay for NISP Phase 1 Project Costs. Performance of the terms of this Agreement constitutes
good and sufficient consideration for all parties to this Agreement.
2.2 NISP Allotment. The Enterprise hereby allots to the undersigned Participant
15300 NISP Units. Unless this NISP Allotment is terminated or modified under the terms herein,
the Participant shall have a right to its NISP Units under any subsequent allotment contracts on the
same terms and conditions as other similarly situated NISP Participants,
2.3 NISP Allotment Termination. This NISP Allotment shall terminate in the
event any of the following shall occur: (i) default and forfeiture pursuant to Section 6 of this
Agreement, (ii) the undersigned Participant does not participate in future NISP funding or
Financing agreements on the same terms and conditions as other similarly situated NISP Phase 1
Participants, (iii) the undersigned Participant does not enter into, or provide funding required
under, future Annual Interim Agreements on the same terms and conditions as other NISP Phase
1 Participants, (iv) the undersigned Participant and the Enterprise do not enter into a final NISP
allotment contract on the same terms and conditions as other NISP Phase 1 Participants, (v) a
withdrawal or reduction in further NISP participation pursuant to Section 8 of this Agreement
(provided that, in the case of a reduction in further NISP participation, the NISP Allotment shall
be terminated to the extent of the reduction), (vi) a Project Termination pursuant to Section 10 of
this Agreement, or (vii) the undersigned Participant violates the rules and regulations of the
Enterprise, as may be established or amended from time to time.
Section 3. Funding
3.1 NISP Phase 1 Budget and Annual Budgets. The Enterprise Board has
previously approved the NISP Phase 1 Budget, The Enterprise Board also has previously approved
the Fiscal Year 2020 Enterprise budget and shall provide and approve Enterprise operating budgets
for future Fiscal Years annually or more frequently as needed, which budgets will be funded by
the NISP Participants through Annual Interim Agreements.
3.2 NISP Phase 1 Capital Funding Obli ations. Each NISP Phase 1 Participant
hereby agrees to meet its NISP Phase 1 Capital Funding Obligations under its NISP Phase 1
Agreement and in the amount set forth in Exhibit A attached hereto by providing its Upfront
Payment to the Enterprise on or before January 22, 2020. The Enterprise shall deposit the proceeds
of each NISP Phase 1 Participant's Upfront Payment into segregated accounts as further described
in Section 3.3.
3.3 Segregated Accounts. For the purpose of malting NISP Phase 1 accounting
specific to each NISP Phase 1 Participant, the Enterprise shall create interest -bearing segregated
accounts within the Enterprise that are unique to each Participant. In addition to the NISP Phase 1
Participants' Upfront Payments, the Enterprise shall also deposit all revenue that may be generated
from the lease or operation of NISP Phase 1 Assets pursuant to Section 5.3 into the segregated
accounts in proportion to the NISP Phase 1 Participant's NISP Participation Percentages. All funds
in the segregated accounts, including any interest that may accrue, shall be used by the Enterprise
to pay for NISP Phase 1 Project Costs. Disbursements under the NISP Phase 1 Agreements from
the segregated accounts shall be made in proportion to the NISP Phase 1 Participants' NISP
Participation Percentages as they exist at the time of such disbursements. The Enterprise shall
provide Participant with annual reports of all deposits and disbursements from, and interest
accrued on, the Participant's segregated account.
3.4 Participants' Claim on SeSrerated Account Funds. Each NISP Phase 1
Participant shall have a claim on the full balance of its respective segregated account regardless of
the source of funds, except that the NISP Phase 1 Participants are entitled to payment of the balance
only upon the conclusion of NISP Phase 1, which shall occur when the Enterprise and Participant
enter into a subsequent agreement related to future phases of NISP or a final allotment contract for
NISP that expressly supersedes this Agreements replacement of the balance by another entity under
Sections 8.1 and 9.2; or Project termination under Section 10.
Section 4. NISP Participation Percentages
The initial NISP Participation Percentages are for the purpose of establishing the NISP
Phase 1 Participants' respective responsibilities to pay their pro rata amounts contained in the
approved NISP Phase 1 Budget. The NISP Participation Percentage of a NISP Phase 1 Participant
may be modified by the Enterprise from time to time as the result of the execution by a new NISP
Phase 1 Participant of a NISP Phase 1 Agreement pursuant to Section 9.1, the withdrawal or
reduction of participation of a NISP Phase 1 Participant pursuant to Section 8, or the transfer or
assignment of a NISP Allotment in whole or in part pursuant to Sections 8, 9, or 13 of this
Agreement, and in each such case Exhibit A shall be amended to reflect all such changes. All
amendments to Exhibit A shall, upon approval by the Enterprise, be attached hereto and upon
attachment, shall supersede all prior versions of Exhibit A without the requirement of further
amendment of this Agreement.
Section 5. Future Development of NISP Phase 1
5.1 The NISP Phase 1 Participants acknowledge that NISP Phase 1 is still in the
conceptual stage and there are no assurances that NISP or any water supplies will be developed as
a result of the NISP Phase 1 Agreements. The NISP Phase 1 Participants therefore recognize that
they are not acquiring any interest in NISP except as expressly provided in the NISP Phase 1
Agreements, and that the NISP Phase 1 Participants are not acquiring under the NISP Phase 1
Agreements any interest in any future water supply or access to any other services from NISP or
the Enterprise except as expressly provided hereunder.
5.2 The Enterprise agrees to diligently pursue NISP and the acquisition of NISP
Phase I Assets in good faith to the extent that funds therefor are provided by NISP Phase 1
Participants under the NISP Phase 1 Agreements and Annual Interim Agreements. By entering
into this Agreement and accepting payments from the undersigned Participant, the Enterprise does
not obligate itself to, nor does the Enterprise warrant that it will, proceed with NISP beyond NISP
Phase 1 or that it will construct or operate NISP. By entering into their respective NISP Phase 1
Agreements and malting payments hereunder, the NISP Phase 1 Participants do not obligate
themselves to, nor do they warrant that they will, proceed with NISP beyond NISP Phase 1 or that
they will maintain their NISP Allotments and NISP Participation Percentages at the same level in
the future; the NISP Phase 1 Participants may withdraw from NISP Phase 1 or NISP, reduce their
overall participation in NISP, or transfer or assign all or a portion of their NISP Allotment and
NISP Participation Percentage under the terms of their respective NISP Phase 1 Agreements. At
the end of NISP Phase 1, the Enterprise Board will determine after consultation with the NISP
Phase 1 Participants whether to proceed with NISP. The Enterprise agrees that, if the NISP Phase
1 Participants provide all required funding, if the Enterprise has the ability, and if the Enterprise
Board determines that NISP is feasible and practical, it will pursue the construction and operation
A NISP if requested to do so by sufficient NISP Phase 1 Participants to fully fund NISP. In the
event that the Enterprise Board decides not to proceed with NISP, it will so notify the NISP Phase
1 Participants, and, upon the giving of such notice, NISP Phase 1 will be wound up in accordance
with Section 10 hereof.
5.3 The Enterprise, acting by and through the Enterprise Board and with input
from and consultation with the NISP Phase 1 Participants, will acquire, own, and control NISP
Phase 1 Assets. Any such acquired NISP Phase I Assets shall be used solely for the purpose of
NISP; provided, however, that any such NISP Phase I Assets may be used for another purpose on
a temporary basis subject to payment of fair compensation to the Enterprise for such other use.
The Enterprise shall use reasonable efforts to generate revenues from NISP Phase I Assets. Income
from the temporary lease or use of NISP Phase 1 Assets shall only be used for NISP purposes.
5.4 Before termination of NISP and this Agreement and wind-up as provided in
Section 10 of this Agreement, the Enterprise may in its discretion, with input from and consultation
with the NISP Phase 1 Participants, make NISP Phase 1 Asset Dispositions. Proceeds ftom a NISP
Phase 1 Asset Disposition shall, at the discretion of the Enterprise Board, be (i) used to further
pursue NISP Phase 1, (ii) used for the purposes of the development and construction of NISP, or
(iii) distributed to then -existing NISP Phase 1 Participants in proportion to their respective NISP
Participation Percentages as they exist at the time of such distribution.
Section 6. Default and Forfeiture
6.1 Default by NISP Phase 1 Participant. Upon (i) the termination of a NISP
Allotment pursuant to Section 2.3 of this Agreement (except for clause (V )thereof), ( )the failure
A a NISP Phase 1 Participant to make any payment in full when due under a NISP Phase 1
Agreement, or (iii) the failure of a NISP Phase 1 Participant to perform any other obligation
hereunder, the Enterprise shall make written demand upon such NISP Phase 1 Participant. If a
Failure described in clause (ii) above is not remedied, with a late -fee penalty equal to 3% of the
defaulted amount, within thirty (30) days from the date of such demand, such failure shall
constitute an Event of Default at the expiration of such period. If a failure described in clause (iii)
above cannot be remedied within thirty (30) days from the date of such demand but such NISP
Phase 1 Participant commences remedial action within such thirty (30) day period in a form
acceptable to the Enterprise, then such failure shall not constitute an Event of Default hereunder.
Notice of any such demand shall be provided to each other NISP Phase 1 Participant by the
Enterprise.
Additionally, if a NISP Phase 1 Participant shall file any petition or institute any
proceedings under any act or acts, state or federal, dealing with or relating to the subject of
bankruptcy or insolvency or under any amendment of such act or acts, either as a bankrupt or as
an insolvent or as a debtor or in any similar capacity, wherein or whereby a NISP Phase 1
Participant asks or seeks or prays to be adjudicated a bankrupt, or to be discharged from any or all
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of its debts or obligations, or offers to its creditors to effect a composition or extension of time to
pay its debts, or asks, seeks or prays for a reorganization or to effect a plan of reorganization or
for a readjustment of its debts or for any other similar relief, or if a NISP Phase 1 Participant shall
make a general or any assignment for the benefit of its creditors then in each and every such case,
such action by a NISP Phase 1 Participant shall be deemed to be an Event of Default hereunder.
6.2 Forfeiture. Upon an Event of Default by a NISP Phase 1 Participant under
Section 6.1, the Enterprise may give notice of termination of the defaulting NISP Phase 1
Participant's NISP Allotment and NISP Participation Percentage under this Agreement, which
termination shall be effective thirty (30) days following the sending of the notice unless such
termination is delayed by judicial action. Upon such notice given, such termination shall result in
the complete forfeiture of any and all right, title, claim, or interest, whether express or implied, of
the NISP Phase 1 Participant in or to NISP, including without limitation any and all NISP
Allotments or NISP Phase 1 Assets under this Agreement or any other Annual Interim Agreement
related to NISP. The undersigned Participant, by executing this Agreement, certifies that it has
fully disclosed to the governing body of such undersigned Participant the existence and
consequence of this Agreement, and agrees that but for the Participant's acceptance of the
termination of a NISP Allotment pursuant to Section 2.3 of this Agreement and the consequences
of an Event of Default under Section 6.1, the Enterprise would not have entered into this
Agreement or any other agreement related to NISP. Except for claims of breach against the
Enterprise under the express terms of this Agreement, the undersigned Participant waives any and
all legal or equitable claims, in any forum, to NISP, NISP Allotments, or NISP Phase 1 Assets, or
against the Enterprise, arising out of an Event of Default under this Agreement by the undersigned
Participant. Irrespective of such termination, a NISP Phase 1 Participant shall remain liable to the
Enterprise to pay the full amount of its pro rata share of the NISP Phase 1 Project Costs under a
NISP Phase 1 Agreement, except as such amounts are otherwise recovered by the Enterprise as
provided by this Agreement.
6.3 Reallocation Upon Event of Default and Forfeiture. Upon an Event of
Default and Forfeiture under Sections 6.1 and 6.25 the Enterprise shall use its best efforts to
reallocate the defaulted NISP Phase 1 Participant's forfeited NISP Allotment and NISP
Participation Percentage first to the remaining NISP Phase 1 Participants who elect to receive
additional NISP Units by the Enterprise in proportion to the pro rata interest in NISP of each
remaining NISP Phase 1 Participant who elected to receive additional NISP Units, and second to
an entity or entities that the Enterprise Board determines may be a NISP Participant or NISP
Participants pursuant to Section 9. Notwithstanding that all or any portion of a defaulting NISP
Phase 1 Participant's NISP Allotment and NISP Participation Percentage is so transferred, such
defaulting NISP Phase 1 Participant shall remain liable to the Enterprise to pay the full amount of
its share of NISP Phase 1 Project Costs hereunder except to the extent that the Enterprise receives
payment from the transferee thereof.
6.4 Default by Enterprise. Upon failure of the Enterprise to perform any
obligation of the Enterprise under this Agreement, the Participant may make written demand upon
the Enterprise, and if such failure is not remedied within thirty (30) from the date of such demand,
or for such additional time as is reasonably required in the discretion of Participant to correct the
same, such failure shall constitute an Event of Default at the expiration of such period. The
Participant shall provide notice of such demand to each NISP Phase 1 Participant. Upon an Event
of Default of the Enterprise under this Section 6.4, the Enterprise and the Participant agree that
they shall confer in good faith to attempt to resolve the Event of Default, and if conferral fails to
resolve the Event of Default, then to participate in non -binding mediation.
6.5 Enforcement of Remedies. In addition to the remedies set forth in this
Section 6, upon the occurrence of an Event of Default as defined herein, the Enterprise or a NISP
Phase 1 Participant, as the case may be, shall be entitled to proceed to protect and enforce the rights
vested in such party by agreement by such appropriate judicial proceeding as such party shall deem
most effectual, either by suit in equity or by action of law, whether for the specific performance of
any covenant or agreement contained herein or to enforce any other legal or equitable right vested
in such party by this Agreement or by law. The provisions of a NISP Phase 1 Agreement and the
duties of each party thereto, their respective boards, officers or employees shall be enforceable by
the other party hereto by mandamus or other appropriate suit, action or proceeding in any court of
competent jurisdiction, and the prevailing party shall be entitled to an award of its costs and
attorney fees to the extent permitted by law.
Section 7. Term
7.1 No provision of this Agreement shall take effect until all NISP Phase 1
Participants listed on Exhibit A duly authorize, execute, and deliver to the Enterprise their
respective NISP Phase 1 Agreements, and the Enterprise duly authorizes, executes, and delivers
to the NISP Phase 1 Participants their respective NISP Phase 1 Agreements,
7.2 The NISP Allotment confirmed in Section 2.2 of this Agreement shall be
perpetual unless terminated pursuant to this Agreement. The term of the remainder of this
Agreement shall continue until the Enterprise and Participant enter into a subsequent agreement
related to future phases of NISP or a final allotment contract for NISP that expressly supersedes
this Agreement, unless otherwise terminated pursuant to this Agreement.
Section 8. Withdrawal from Agreement or Withdrawal from or Reduction in
Further NISP Participation
NISP Phase 1 Participants may withdraw from a NISP Phase 1 Agreement and further
participation in NISP, or may reduce further participation in NISP, as provided in this Section 8.
NISP Phase 1 Participants also may transfer their NISP Units, in whole or in part, as provided in
Section 9 below.
8.1 Except as otherwise provided in Section 8.2 below, a NISP Phase 1
Participant may withdraw from NISP Phase 1 and NISP, or reduce its overall participation in NISP,
by giving the Enterprise and all other NISP Phase 1 Participants written notice of such withdrawal
or reduction in overall NISP participation not less than 180 days prior to the withdrawal or
reduction date. Notwithstanding the foregoing, a NISP Phase 1 Participant that withdraws or
reduces NISP participation under this Section 8 shall not receive any balance in its respective
segregated account unless an equal amount is provided to the Enterprise by another entity as
replacement of the balance in the withdrawing or reducing NISP Phase 1 Participant's account.
8.2 Withdrawal from a NISP Phase 1 Agreement and NISP, or reduction in
overall NISP participation, shall not excuse any withdrawing or reducing NISP Phase 1
Participant's performance of obligations imposed upon that parry by any judgment which has been
entered by a court of competent jurisdiction or regulation to which the Enterprise or the NISP
Phase 1 Participants are subject and that arise from or are related to activities of the NISP Phase 1
Agreements conducted during the period when the withdrawing or reducing NISP Phase 1
Participant participated in the NISP Phase 1 Agreement,
Section 9. Transfer of NISP Allotment; Admission of New NISP Phase 1
Participants
9.1 Additional entities may become NISP Phase 1 Participants if the NISP
Enterprise, in its discretion, approves transfer of existing or allotment of new NISP Units to such
entity, provided, however, that the total number of NISP Units shall not be increased without the
consent of each NISP Participant,
9.2 Transfer of NISP Allotment.
9.2.1 The Enterprise Board shall approve a requested transfer of NISP
Units constituting all or a portion of a NISP Allotment from a NISP
Phase 1 Participant to one or more other NISP Participants that have
a NISP Allotment as of the time of the transfer if the Enterprise
Board determines that (i) the NISP Participant receiving the
additional NISP Units has an existing or future need for additional
NISP Units for use within the District, (ii) the NISP Participant
receiving the additional NISP Units has sufficient financial capacity,
and (iii) the transfer will not create a material risk under applicable
laws provided, however, that approval of a transfer is subject to
delivery capacity limitations.
9.2.2 At any time after all final federal permitting approvals for NISP are
issued and any litigation challenging such approvals is no longer
pending or appealable, a NISP Participant may request a transfer of
NISP Units constituting all or a portion of a NISP Allotment to a
municipality or a district formed under Colorado law that is not an
existing NISP Participant at the time of the proposed transfer. The
NISP Enterprise shall approve such a requested transfer if the
Enterprise Board determines that (i) the entity receiving the NISP
Units has an existing or future need for said NISP Units for use
within the District, (ii) the NISP Participant receiving the NISP
Units has sufficient financial capacity, (iii) the transfer will not
create a material risk under applicable law, and (iv) the entity has
not transferred or entered into an agreement to transfer water out of
the Northern Colorado Water Conservancy District. Any such
transfer shall also be subject to delivery capacity limitations. The
Enterprise Board may deny a proposed transfer under this Section
9.2.2 if it finds that, based on extraordinary circumstances, the
proposed transfer would not be in the best interests of the Enterprise
or the Northern Colorado Water Conservancy District.
e
9.2.3 A transfer of NISP Units under this Section 9 also shall result in the
transfer of all rights and obligations under the relevant NISP Phase
1 Agreement that correspond to the transferred NISP Units.
Notwithstanding the foregoing, a NISP Phase 1 Participant that
transfers NISP Units under this Section 9 is not entitled to any
balance in its respective segregated account that corresponds to the
amount of NISP Units transferred unless an equal amount of money
is provided to the Enterprise by the transferee as replacement of the
balance in transferor NISP Phase 1 Participant's account. The
transferring NISP Phase 1 Participant may also assign the
corresponding portion of its segregated account to the transferee.
Section 10. Project Termination
10.1 Event Giving Rise to Project Termination. NISP shall terminate and the
process of winding -up of NISP shall be initiated upon the Enterprise Board's adoption of a
resolution of termination. Such resolution may be adopted after the Enterprise Board's receipt of
a written request from all NISP Phase 1 Participants to terminate NISP Phase 1 or NISP, or for
other financial, legal or practical reasons that would make completion of NISP Phase 1 or NISP
impracticable as determined by the Enterprise Board. The decision to adopt a resolution of
termination shall be in the Enterprise Board's discretion.
10.2 Winding Up Procedure. Upon the Enterprise Board's adoption of a
resolution of termination under Section 10.1 above, NISP Phase 1 shall be wound up within a
reasonable time pursuant to the procedures set forth in this Section 10.2.
(i) The Enterprise Board shall appoint awinding-up agent to carry out
the procedures and responsibilities set forth in this Section 10.2 and to take any
other actions as determined by the Enterprise Board to be necessary and convenient
to the winding up of NISP Phase 1.
The winding -up agent shall obtain fiom the Financial Services
Manager of the District an accounting of NISP Phase 1 Assets and NISP Phase 1
liabilities and operations through the last day of the month in which the Enterprise
Board adopts a resolution of termination under Section 10.1 above. The winding -up
agent may also cause a proper accounting to occur at other times, including before
or after the distribution of NISP Phase 1 Assets pursuant to Section 10.3 below, if
the Enterprise Board determines in its discretion that such an additional accounting
is reasonably necessary for the orderly winding up of NISP.
(iii) Option of Northern Colorado Water Conservancy District to
Purchase Certain NISP Phase 1 Assets. The District shall have an option to
purchase, within 180 days of adoption of a resolution of termination by the
Enterprise pursuant to this Section 10, the real property necessary or useful for
Glade Reservoir, Galeton Reservoir, and any of the associated diversion structures,
pipelines, ditches, forebays, or other property or assets then owned by the
Enterprise and determined by the District to be necessary to place water into storage
11
in either or in each. The purchase price to be paid by the District for any NISP
Phase 1 Assets subject to this Section 10.2(iii) shall be the price paid by the
Enterprise for such asset plus the cost of capital improvements thereon or, if such
asset was acquired by the Enterprise other than by purchase, the actual cost to
acquire such asset. The proceeds of any sale of NISP Phase 1 Assets to the District
under this Section 10.2(iii) shall be transferred to the non -defaulting NISP Phase 1
Participants in accordance with Section 10.3 below.
(iv) After complying with Section 10.2(ii) and 10.2(iii), the winding -up
agent shall offer, on an asset -by -asset basis, each non -cash NISP Phase 1 Asset to
all of the NISP Phase 1 Participants for cash or cash equivalents for the price paid
by the Enterprise for such NISP Phase 1 Assets plus the cost of capital
improvements or, if such NISP Phase 1 Asset was acquired by the Enterprise other
than by purchase, the actual cost to acquire such NISP Phase 1 Asset. If more than
one NISP Phase 1 Participant desires to purchase any such NISP Phase 1 Asset, the
winding -up agent shall sell the NISP Phase 1 Asset to the highest bid submitted by
a NISP Phase 1 Participant in a closed -bid process.
(v) Subject to Section 10.2(vi) and (vii), and after complying with
Section 10.2(ii) through (iv), the winding -up agent shall make commercially
reasonable efforts to reduce to cash or cash equivalents the NISP Phase 1 Assets.
(vi) The winding -up agent shall exercise discretion in light of legal, tax,
contractual, and other considerations as to whether to liquidate particular NISP
Phase 1 Assets and to propose a sale to the Enterprise Board under Section 10.2(v).
The winding -up agent may consult with legal counsel, tax consultants, or other
experts.
(vii) Any sale or transfer of an NISP Phase 1 Asset by the winding -up
agent shall require advance notice to all NISP Phase I Participants and approval by
the Enterprise Board.
(viii) While conducting the winding -up procedures of this Section 10.2,
the winding -up agent shall manage the Enterprise's NISP Phase 1 Assets with
reasonable care and with the same powers as the Enterprise's managers exercised
before the Enterprise Board adopted a resolution of termination under Section 10.1.
10.3 Distribution of NISP Phase 1 Assets.
(i) Subject to Section 10.3(ii) below, upon completion of the winding -
up procedure set forth in Section 10.2 above, the Enterprise Board, with the
assistance of the winding -up agent, shall distribute the cash or cash equivalents held
by the Enterprise in the following manner and order:
(A) To cover any expenses incurred as a result of the winding -
up procedures set forth in Section 10.2;
12
(B) To maintain a reserve fund as the Enterprise Board may
deem necessary to cover any contingent liabilities or obligations of the
Enterprise as identified with specificity by the Enterprise, provided that
such reserves or any part thereof not required for payment of such
contingent liabilities shall be distributed as hereinafter provided;
(C) To satisfy any loans or advances made to the Enterprise by
the NISP Phase 1 Participants; and then
(D) To the non -defaulting NISP Phase 1 Participants in
proportion to their NISP Participation Percentages after adjusting for any
debts each NISP Phase 1 Participant may owe to the Enterprise.
(ii) Distribution of Enterprise assets under Section 10.3(i) is subject to
the following terms and conditions:
(A) If any unliquidated non -cash NISP Phase 1 Assets remain
after completion of the winding -up procedures set forth in Section 10.2,
then the Enterprise Board shall exercise all reasonable efforts to determine
whether the unliquidated non -cash NISP Phase 1 Assets are to be conveyed
to and owned by the NISP Phase 1 Participants individually or jointly.
(B) Notwithstanding Section 10.3(ii)(A) above, a NISP Phase 1
Participant is not entitled to and does not have the right to demand
distributions of non -cash NISP Phase 1 Assets in general or of any particular
non -cash NISP Phase 1 Asset.
10.4 Completion of Winding -Up of NISP. After the distribution of all NISP
Phase 1 Assets pursuant to Section 10.3, the winding -up agent shall give notice to the Enterprise
Board that NISP has been terminated and the NISP Phase 1 Assets have been disposed of pursuant
to the NISP Phase 1 Agreements.
Section 11. Liability of Enterprise and NISP Phase 1 Participants
11.1 Enterprise and Undersigned NISP Phase 1 Participant Liability. Participant
shall not be liable to another NISP Phase 1 Participant or to the Enterprise, and the Enterprise shall
not be liable to the NISP Phase 1 Participants, for consequential, indirect, punitive, or special
damages arising under this Agreement. Neither the Enterprise nor Participant shall be liable for
the acts or omissions of the other NISP Phase 1 Participants.
11.2 Enterprise Liability. Any and all obligations of the Enterprise that may arise
under this Agreement, whether financial or otherwise, shall be payable solely fiom the revenues,
income, rents and receipts earned by the Enterprise. Nothing herein shall be deemed to prevent the
Enterprise from making any payments from any other legally available source. In no event shall
the Enterprise be required to spend any money from taxes in violation of Section 20(4) of Article
X of the Colorado Constitution in the performance of its obligations under this Agreement or which
would cause the Enterprise to lose its enterprise status as such status is defined in the Colorado
Constitution. In addition, neither the Enterprise nor the District shall be required to expend any
13
funds or impair any assets of the District in the performance of any of the Enterprise's obligations
under this Agreement. The obligations of the Enterprise under this Agreement do not constitute a
debt or indebtedness of the Enterprise or the District within the meaning of any constitutional,
charter or statutory provision or limitation, and shall not be considered or held to be a general
obligation of the Enterprise or the District.
11.3 Undersigned NISP Phase 1 Participant Liability. Any and all obligations of
the undersigned Participant that may arise under this Agreement, whether financial or otherwise,
shall be payable solely from the revenues, income, rents and receipts earned by such Participant
from the operation of its water utility enterprise. Nothing herein shall be deemed to prevent the
undersigned Participant from making any payments from any other legally available source. In no
event shall undersigned Participant be required to spend any money from taxes in violation of
Section 20(4) of Article X of the Colorado Constitution in the performance of its obligations under
this Agreement or which would cause such Participant to lose its enterprise status as such status is
defined in the Colorado Constitution. In addition, the undersigned Participant shall not be required
to expend any funds or impair any assets of its parent entity in the performance of its obligations
under this Agreement. The obligations of the undersigned Participant under this Agreement do not
constitute a debt, indebtedness or multiple fiscal year obligation of its parent entity within the
meaning of any constitutional, charter or statutory provision or limitation, and shall not be
considered or held to be a general obligation of the Participant or of its parent entity.
11.4 Governmental Immunity. The Enterprise and the undersigned Participant
are each relying on, and do not waive or intend to waive by any provision of this Agreement, the
monetary limitations or any other rights, immunities, defenses, or protections provided by the
Colorado Governmental Immunity Act, C.R.S. § 24-10401 et seq., as amended from time to time.
Section 12. Amendments
This Agreement may be amended only by a writing executed by the Enterprise and each
non -defaulting NISP Phase 1 Participant.
Section 13. Assignment; Binding on Successors
Except as otherwise provided in this Agreement, the rights and duties of the Participant
may not be assigned or delegated without the written consent of the Enterprise. Any attempt to
assign or delegate such rights or duties in contravention of this Agreement shall be null and void.
This Agreement shall inure to the benefit of, and be binding upon, the successors and assigns of
the Enterprise and the Participant.
Section 14. Third Party Beneficiaries
Any NISP Phase 1 Participant shall have the right as a third -party beneficiary to initiate
and maintain suit to enforce the obligations of other NISP Phase 1 Participants hereunder. Except
as provided in the preceding sentence, no other entities are conferred a benefit under this
Agreement or may enforce this Agreement as third -party beneficiaries.
Section 15. Counterparts
14
This Agreement may be executed by the Enterprise and the Participant in separate
counterparts that are identical except as to the number of NISP Units and the identity of the NISP
Phase 1 Participant, each of which when so executed and delivered shall be an original, but all
such counterparts shall together constitute but one and the same instrument. Facsimile and
electronic signatures shall be binding for all purposes.
Section 16. Merger of Prior Agreements
This Agreement and the exhibits hereto constitute the entire agreement between the parties
and supersede all prior agreements and understandings between the parties relating to the subject
matter hereof.
Section 17. Severability
If one or more clauses, sentences, paragraphs or provisions of this Agreement shall beheld
to be unlawful, invalid or unenforceable, then the remainder of this Agreement shall not be affected
thereby.
Section 18. Choice of Law; Venue
This Agreement shall be governed by the laws of the State of Colorado, and each party
hereto consents and submits to venue in the District Court of Weld County, Colorado,
Section 19. Notices
Notices authorized or required to be given under this Agreement shall be in writing and
shall be deemed to have been given when mailed, postage prepaid, or delivered during working
hours, to the addresses set forth in Exhibit C, or to such other address as a party may provide to
the other party and other NISP Phase 1 Participants from time to time. Any notice to the Participant
shall be given to all NISP Phase 1 Participants. Notices authorized or required to be given under
this Agreement may in the alternative be given by electronic mail (email) to the email addresses
set forth in Exhibit C, or to such other email addresses as a party may provide to the other party
and other NISP Phase 1 Participants from time to time, provided that the receiving party
acknowledges and does not object to receipt of such notice by email.
[Remainder- of page intentionally left blank]
15
IN WITNESS WHEREOF, the Enterprise and NISP Phase 1 Participants hereto, pursuant
to resolutions duly and regularly adopted by their respective governing bodies, have caused their
names to be affixed by their proper and respective officers as of the date set forth above.
Northern Integrated Supply Project Water
Activity Enterprise
Bradley D.
General l
The Town of Firestone, a municipal corporation,
acting with and on behalf of the Firestone Water
Activity Enterprise, a government -owned
business within the meaning of Article X, §
20(2)(d) of the Colorado Constitution, organized
pursuant to C.R.S. § 37-45.1401 et seq., and
owne
By:
Name
Title:
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EXHIBIT B
NISP PHASE I PROJECT DESCRIPTION AND SUMMARY WORK PLAN
The work to be performed and costs to be included under the NISP Phase 1 Project include the
following:
• Acquison of property associated with the Galeton Reservoir site (approximately 3,700
acres).
• Acquisition of property associated with Glade Reservoir site (approximately 400 acres)
• Acquisition of property associated with Highway 287 relocation (acreage to be
determined).
• Acquisition of easements for both the NISP delivery pipelines and the Galeton Unit
pipelines.
• Water Secure properties served by and/or under the New Cache and Larimer and Weld
Irrigation Companies' ditch systems (acreage to be determined based upon available
funds after the above items have been purchased).
• Operation, maintenance, and improvement costs for the NISP Phase 1 Assets.
EXHIBIT C
NOTIFICATIONS
IF TO:
MAILING ADDRESS
EMAIL
Northern Integrated Supply
c/o NISP Project Manager
cbrouwer@northernwater.org
braley@troutlaw.com
Project Water Activity
220 Water Avenue
Enterprise
Berthoud, CO 80513
c/o Mr. Stan Linker
stangcwcwd.com
Central Weld County
District Manager
Water District
2235 2nd Avenue
Greeley, CO 80631-7203
c/o Mr. A.J. Euckert
AEuckeit@cityofdacono.com
Dacono
City Manager
PO Box 186
Dacono, CO 80514-0186
c/o Mr. Jeff Schreier
jeffpeatonco.org
Eaton
Town Administrator
223 1 St Street
Eaton, CO 80615-3479
c/o Mr. Todd Fessenden
tfessenden@erieco.gov
Erie
Deputy Public Works Director
PO Box 750
Erie, CO 80516-0750
c/o Mr. Randy Ready
rready@evanscolorado.gov
Evans
Public Works Director
1100 37th Street
Evans, CO 80620-2036
c/o Ms. Julie Pasillas
jpasillas@firestoneco.gov
Firestone
Public Utilities Director
PO Box 100
Firestone, CO 80520-0100
c/o Mr. Chris Matkins
clirism@fclwd.com
Fort Collins —Loveland
General Manager
Water District
5150 Snead Drive
Fort Collins, CO 80525-3764
c/o Mr. Chris Cross
ccross(cr�,fortlupton.org
Fort Lupton
Assistant City Administrator
130 S McKinley Ave
Fort Lupton, CO 80621-1343
19
IF TO:
MAILING ADDRESS
EMAIL
c/o Mr. Jeffrey Wells
iwellskcityoffortmor ag n.com
Fort Morgan
Acting City Manager
PO Box 100
Fort Morgan, CO 80701-0100
c/o Ms. Sarah Watson
swatson a,frederickco.gov
Frederick
Water Engineer
PO Box 435
Frederick, CO 80530-0435
c/o Mr. Jeff Arthur
Jeff.arthui*@cityoflafayette.com
Lafayette
Public Works Director
1290 S Public Rd
Lafayette, CO 80026-2706
c/o Mr. Chris Smith
chrissmith(a lefthandwater.org
Left Hand Water District
General Manager
PO Box 210
Niwot, CO 80544-0210
c/o Mr. Kent Pflager
kpflager @mcgwd.org
Morgan County Quality
General Manager
Water District
PO Box 1218
Fort Morgan, CO 80701-1218
c/o Mr. Nicholas Wharton
nwhar•ton@townofseverance.or
Severance
Town Administrator
PO Box 339
Severance, CO 80546-0339
c/o Mr. John Thornhill
jhornhill a,windsorgov.com
Director of Community
Windsor
Development
301 Walnut Street
Windsor, CO 80550
20