INYANGA RANCH Garfield County, Colorado

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1 INYANGA RANCH Garfield County, Colorado Summary of Water and Mineral Rights September 22, 2017 Inyanga Ranch (the Ranch ) is comprised of approximately acres located within the Canyon Creek drainage in western Garfield County near Glenwood Springs, Colorado. Below is a brief overview of the water and mineral rights associated with the Ranch. Please note that the delivery of this information does not obligate Inyanga Ranch, LLC (the Ranch s owner) to enter into any contract for the sale and purchase of all or any portion of the Ranch. The contents of this document include only a preliminary gathering of information concerning water and mineral rights associated with the Ranch which is not to be relied on, copied or disseminated without the prior express written consent of Inyanga Ranch, LLC, which reserves the right to modify, update, amend, supplement, delete or replace any of this information. I. WATER RIGHTS. In Colorado, water rights are generally administered first in time, first in right according to a priority system. Water rights priorities are confirmed by specialized water courts. Water rights can be for diversion of surface water (typically ditches), storage water (typically ponds), and/or groundwater (typically wells). Groundwater diversions also require the issuance of well permits by the Colorado Division of Water Resources. Additionally, Colorado water law provides for the opportunity to use water out of priority pursuant to an approved plan for augmentation whereby replacement water is provided to downstream water rights to offset out-of-priority water use. Below are preliminary summaries of the surface, storage and groundwater rights approved for use on the Ranch, the Ranch s existing plan for augmentation, and the additional water rights approvals that are pending for the Ranch. A. Surface Water Rights (Ditches). The following surface water rights have previously been approved by the Garfield County District Court and/or the District Court in and for Water Division No. 5 for use on Ranch: Water Right Priorit y No. Adjudication Information Appropriation Approved Amount Approved Use 1 1, First 68AA 277 May 1, cfs Irrigation of 90 acres June 1, cfs Irrigation 1

2 2 8A April 30, cfs Irrigation of up to 80 acres 2, First 3 5 5, First 1 Ditch 2 Ditch 2 Ditch A 165 Domest ic Priorit y No Decreed in Case No. 03CW130 on December 31, 2003 Diligence decreed in Case No. 12CW10, on November,6 2013, next diligence due November 2019 June 1, cfs Irrigation June 30, cfs Irrigation of 110 acres March 1, cfs Irrigation of 70 acres March 1, cfs Power March 1, cfs Domestic May 1, cfs Irrigation of up to 120 acres June 1, cfs Irrigation November 11, cfs Irrigation June 1, cfs Irrigation and piscatorial March 3, cfs, conditional Replace evaporative depletions from Rock-n- Pines Pond Nos. 1-9; aesthetic, recreational, and storage in Rock-n-Pines Pond No. 9. A map showing the points of diversion for each of these water rights is attached as Figure 1. 2

3 B. Water Storage Rights (Ponds). Rock-n-Pines Pond No. 9 was decreed as a conditional storage water right pursuant to the decree entered on August 2, 2006 in Case No. 03CW130 (Water Division No. 5) for storage of 2. acre-feet of water for aesthetic, recreational, piscatorial and augmentation purposes. As described below, Pond No. 9 provides augmentation storage as part of the augmentation plan decreed in Case No. 03CW130. Although no water storage rights were confirmed, the decree in Case No. 03CW130 described Rock-N-Pines Pond Nos. 1-8 as having the following capacities: Pond No. 1.6 acre-feet; Pond No. 2.7 acre-feet; Pond No acre-feet; Pond No. 2.7 acre-feet; Pond No acre-feet; Pond No acre-feet; Pond No acrefeet; Pond No acre-feet. As described below, the Ranch s pending water rights application would confirm additional storage water rights for Pond Nos All of Rock-N-Pines Ponds 1-9, inclusive, are shown on Figure 1. C. Groundwater Rights/Well Permits. There are both court-approved groundwater rights and well permits associated with the Ranch, including the following: 1. Adjudicated groundwater rights. Groundwater Right Adjudication Information Application Priority Approved Amount Approved Use Creek Cabin Well Decreed in Ranch House Well Decreed in Upper Ranch Well Decreed in Well permits. Well Permit No. Receipt No. Owner/ Approved Approved Use Applicant Issued Amount B Inyanga Ranch, January 15 gpm Exempt* 3

4 LLC 11, Inyanga Ranch, LLC August 28, Kathryn October 2, Williams gpm Exempt* 10 gpm Domestic SE SE 1 5S 90W *Approved under C.R.S. Section (3)(b)(II)(A) as the only well on a tract of land of 0 acres for use inside not more than 3 single family dwellings, the watering of poultry, domestic animals and livestock on a farm or ranch and the irrigation of not more than 1 acre of home gardens and lawns. D. Fish Ponds. A plan for augmentation for the replacement of out-of-priority depletions caused by evaporation from the eight fish ponds on the property was decreed in Case No. 03CW130 (Water Division No. 5) on August 2, Historically, the ponds were filled by the 2 Ditch and the 2 Ditch. Under the decreed augmentation plan, water from the 2 Ditch is used to replace the evaporative depletions from the eight fish ponds through releases from the Rock-n-Pines Pond No. 9 to Canyon Creek as required. The augmentation plan provides for administration of the evaporative depletions from these eight ponds. Water stored in Pond No. 9 can be released to offset evaporative depletions from Pond Nos If more replacement water is necessary to replace the evaporative depletions, then the water level in each of the first eight ponds must be lowered equal to the evaporation rate. E. Additional Water Rights Approvals (Including Updated Plan for Augmentation). In December 2012, the current owner of the Ranch initiated an application for water rights, changes of water rights, and approval of an updated plan for augmentation in Case No. 12CW191, Water Division No. 5. All opposition to such proceeding has been resolved. A final decree of the Court entered on September 13, 2015, which decree included confirmation of the following additional water rights for the Ranch: 1. Additional surface water right. A conditional surface water right for hydroelectric power generation in the amount of.0 c.f.s. during the irrigation season and 2.0 c.f.s. during the non-irrigation season. 2. Additional water storage rights. Conditional water storage rights for Rock-N-Pines Pond Nos. 1-8 in the cumulative amount of 23.5 acre-feet. 3. Changes of water rights.

5 The final decree in 12CW191 also includes approvals of changes of water rights such that: (1) the historical irrigation ditches on the east side of Canyon Creek (including the Baxter No. 2 Ditch and Baxter No. 2 Ditch First, and Baxter No. 5 Ditch and Baxter No. 5 Ditch ) can be diverted on the west side of Canyon Creek or at a new downstream diversion point on the east side of Canyon Creek, for purposes of irrigating up to 8 acres on the east side of Canyon Creek; and (2), to the extent that the on the ground, as-built locations of certain water rights on the Ranch differed from their legally decreed locations, amendment of prior decrees to conform the legal location of each structure with its actual location.. Updated plan for augmentation. The final decree in Case No. 12CW191 includes an update to augmentation plan for the ponds that was approved in Case No. 03CW130 such that, during times when the water rights downstream that need to be augmented are on the Colorado River, replacement water can be provided pursuant to a Water Supply Contract in the amount of 17.1 acre-feet between the Ranch and the Colorado River Water Conservation District ( CRWCD ) for purposes of augmenting evaporation from all nine ponds (Rock-N-Pines Pond Nos. 1-9) and depletions related to use of water from the ponds for dust suppression. If, however, the calling water right is located on Canyon Creek, then the plan for augmentation may still require releases of water from Pond No. 9 and/or draw-down of storage levels in Pond Nos The CRWCD Water Supply Contract is assignable to any successor owner of the Ranch upon notice to and approval by the CRWCD and payment to the CRWCD of a requisite transfer fee. II. MINERAL RIGHTS. When the current owner of the Ranch purchased the property, the mineralrelated exceptions to the title warranties in the vesting deeds included reservations or exceptions contained in U.S. Patents to the property reserving rights of the proprietor of a vein or lode to extract and remove his ore therefrom (and rights-of-way for ditches and canals constructed under the authority of the United States). ATTACHMENTS: 1. Figure 1 (water rights location map). 2. Final water court decree in 12CW191, with exhibits _2.doc 5