PREANNEXATION AGREEMENT FOR
OLSON ADDITION ANNEXATION


THIS AGREEMENT is made and entered into this ______ day of _____________, 2008, by and
between the SANDRA S. OLSON TRUST, the JENNIFER C. OLSON TRUST, and the JULIA D. OLSON
TRUST (hereinafter collectively referred to as “the Owners”), and the CITY OF LOVELAND,
COLORADO, a home rule municipality (hereinafter referred to as “the City”). The Owners and the City
shall hereinafter be referred to collectively as “the Parties.”

WITNESSETH:

WHEREAS, the Owners own that certain real property located in Larimer County, Colorado, legally
described in Exhibit “A” attached hereto and incorporated herein by referenced, which real property
shall hereinafter be referred to as “the North Parcel”; and

WHEREAS, the Owners also own that certain other real property located in Larimer County, Colorado,
legally described in Exhibit “B” attached hereto and incorporated herein by reference, which real
property shall hereinafter be referred to as “the South Parcel”; and

WHEREAS, the North Parcel and the South Parcel shall hereinafter be referred to jointly as “the
Property”; and

WHEREAS, the Owners have proposed to the City that the Property be annexed into the City of
Loveland; and

WHEREAS, the Property is located within the City’s Growth Management Area as defined in the City’s
Comprehensive Master Plan and, therefore, the City desires for the Property to be annexed into the
City; and

WHEREAS, the Parties therefore desire to set forth in this Agreement the terms and conditions
pursuant to which the Owners will file a petition for annexation of the Property with the City subject to
the terms and conditions of this Agreement, which terms and conditions the Parties also intend to
include in a future annexation agreement to be considered in connection with the City Council’s
annexation of the Property.

NOW, THEREFORE, IN CONSIDERATION OF THE PROMISES AND COVENANTS CONTAINED
HEREIN, AND OTHER GOOD AND VALUABLE CONSIDERATION, THE RECEIPT AND ADEQUACY OF
WHICH THE PARTIES HERETO ACKNOWLEDGE, THE PARTIES AGREE AS FOLLOWS:

1.        Petition for Annexation.  The Owners agree to execute and file with the City Clerk the Petition for
Annexation of the Property attached hereto as Exhibit “C” and incorporated herein by reference
(hereinafter referred to as “the Petition”). The Owners agree to execute and file the Petition with the
City Clerk contemporaneously with their execution of this Agreement. The Owners also agree to
execute upon the request of the City any and all of their surveys, maps and other documents
necessary to accomplish the annexation of the Property under City Code Article 17, under the Colorado
Municipal Annexation Act of 1965, and as are otherwise reasonably needed for the performance of the
other provisions of this Agreement. The Owners agree not to execute, or to direct their agents,
representatives or attorneys to execute on their behalf, any other petition for the annexation of any or
all of the Property to any other municipality or to file any other such petition for annexation of any or all
of the Property with any other municipality during the term of this Agreement.

2.        Effective Date and Term.  This Agreement shall become effective as of the date that this
Agreement has been signed by all of the Parties. If on or before                         , 2008, the Property
has not been annexed and zoned by the City Council in accordance with the terms of this Agreement
and in accordance with the terms of any future annexation agreement negotiated by the Parties, this
Agreement shall terminate and all Parties shall be released from all further obligations under the
Agreement except for the City’s obligation to pay the Owners’ costs as provided in Section 8. below.

3.        Annexation Agreement.  The Parties agree that after the execution of this Agreement that they
will proceed in good faith and with due diligence to negotiate and enter into an annexation agreement
for the annexation of the Property, the terms and conditions of which shall be in general accord with the
terms and conditions of this Agreement, which annexation agreement shall be hereinafter referred to as
“the Annexation Agreement.” If the Annexation Agreement is entered into by the Parties in connection
with the annexation of the Property, the terms and conditions of the Annexation Agreement, unless
expressly provided otherwise in the Annexation Agreement, shall supersede in all respects the terms
and conditions of this Agreement.

4.        Zoning and Vesting.  

A.        North Parcel.

It is the intention and desire of the Parties that after the North Parcel is annexed by the City that it shall
be zoned MAC-Mixed-Use Activity Center (“MAC”) pursuant to City Code Chapter 18.29 of the Loveland
Municipal Code.  A conceptual master plan, including the information required pursuant to City Code
Section 18.20.050.B and in compliance with the development standards in City Code Section
18.29.040, shall be prepared for the entire North Parcel.  To be in substantial compliance with the
Loveland Comprehensive Plan Land Use Map, said master plan shall designate the general type,
intensity, and location of land uses as follows:
(1)        Approximately 10-15 acres at the southwest corner of the North Parcel shall be designated for
uses consistent with the description of the Corridor Commercial land use category, as defined in the
Loveland Comprehensive Plan.  Said uses shall include retail, low-rise office, public/quasi-public uses,
entertainment (e.g. restaurants, theaters), medical facilities, places of worship and other non-residential
uses listed as uses permitted by right or permitted by special review under the MAC zoning district.
(2)        Approximately 30-35 acres located generally adjacent to the commercial land use designation
shall be designated for uses consistent with the description of the Medium Density Residential land use
category, as defined in the Loveland Comprehensive Plan.  Said uses shall include single family
detached, single family attached, duplex, and multi-family dwelling units and other complimentary uses
listed as uses permitted by right or permitted by special review under the MAC zoning district.  The
permitted gross density range shall be 4-10 dwelling units per acre.
(3)        The remainder of the North Parcel shall be designated for uses consistent with the description
of the Low Density Residential land use category, as defined in the Loveland Comprehensive Plan.  
Said uses shall include single family detached, single family attached, duplex and multi-family dwelling
units and other complimentary uses listed as uses permitted by right or permitted by special review
under the MAC zoning district.  The permitted gross density range shall be 2-4 dwelling units per acre.

B.        South Parcel.

It is also the intention and desire of the Parties that after the South Parcel is annexed by the City that it
shall be zoned MAC-Mixed-Use Activity Center (“MAC”) pursuant to City Code Chapter 18.29 of the
Loveland Municipal Code.  A conceptual master plan, including the information required pursuant to
City Code Section 18.20.050.B and in compliance with the development standards in City Code Section
18.29.040, shall be prepared for the entire South Parcel.  To be in substantial compliance with the
Loveland Comprehensive Plan Land Use Map, said master plan shall designate the general type,
intensity, and location of land uses as follows:
(1)        Approximately 50-80 acres located along the entire frontage of Highway 402 shall be
designated for uses consistent with the description of the Employment land use category, as defined in
the Loveland Comprehensive Plan.  Said uses shall include a mix of low-to medium-rise office, light-
industrial, retail, lodging, and other non-residential uses listed as uses permitted by right or permitted
by special review under the MAC zoning district.
(2)        The remainder of the South Parcel shall be designated for uses consistent with the description
of the Low Density Residential land use category, as defined in the Loveland Comprehensive Plan.  
Said uses shall include single family detached, single family attached, duplex and multi-family dwelling
units and other complimentary uses listed as uses permitted by right or permitted by special review
under the MAC zoning district.  The permitted gross density range shall be 2-4 dwelling units per acre.

C.        The Annexation Agreement.

The Parties agree that the zoning for the North Parcel and the South Parcel, as set forth in this Section,
shall be agreed to in the Annexation Agreement.  The Annexation Agreement shall also provide that
this zoning for the North Parcel and the South Parcel shall be vested for twenty-five (25) years from the
effective date of the annexation of the Property as provided in City Code Chapter 18.72.

5.        Purchase of Water Shares.  Provided that the Property is annexed into the City, the City agrees
to purchase from the Owners twenty-seven (27) shares of Consolidated Home Supply Ditch and
Reservoir Company stock, bearing stock Certificate Nos.                                  (“the Water Shares”).
The City shall purchase the Water Shares from the Owners within                  days after the effective
date of the annexation of the Property at a per share price of $70,000.00 for a total purchase price of
$1,890,000.00. The Owners shall convey the Water Shares to the City by general warranty deed, a
written bill of sale and assignment with general warranties of title, and through the execution of any and
all other documents required for such transfer by the Consolidated Home Supply Ditch and Reservoir
Company. The City also agrees to include in the Annexation Agreement a provision obligating the City
to lease back to the Owners the Water Shares for raw water irrigation of the Property on terms and
conditions acceptable to the Parties.

6.        Extension of Sewer Main to the Property.  The City agrees to extend, or pay for the extension of,
a                  inch Sewer Main from                                          to the intersection of Highway 402 and
County Road 7 (hereinafter referred to as “the Sewer Main”) in order for the City to provide future
wastewater service to the Property when the Property develops. The City agrees to meet this obligation
by either paying directly for the cost to install the Sewer Main or to reimburse the Owners for their costs
if they install the Sewer Main. It is estimated that the current cost of extending the Sewer Main is
approximately $                         . The Parties agree that the City’s obligation to pay for the costs to so
extend the Sewer Main to the Property shall also include all costs for any needed lift stations for the
effective operation of the Sewer Main pursuant to the City’s engineering standards. The City agrees
that language will be included in the Annexation Agreement to ensure that the City’s financial obligation
to pay for the costs of the extension of the Sewer Main will not be considered a multiple-fiscal year
financial obligation subject to Section 20 of Article X of the Colorado Constitution.  

7.        Sales and Use Tax Credit.  The City agrees for a period of twenty-five (25) years from the
effective date of the City’s annexation of the Property that the City will grant to the Owners, and their
assigns, as authorized in City Code Section 3.16.590, a one percent sales and use tax credit for all
sales and use taxes required by the City’s Code to be collected by businesses located on the Property,
by allowing such businesses to collect a one percent public improvement fee in lieu of collection of such
sales and use taxes (hereinafter referred to as “the PIF”). The PIF shall be paid to the Owners, or their
assigns, to reimburse the Owners, or their assigns, for the costs of construction, installation,
maintenance, repair, replacement, and improvement of any public improvements installed by the
Owners, or their assigns, on the Property. The Parties agree that this obligation shall be set forth in the
Annexation Agreement and shall be written in a manner that the Parties agree will not result in a
multiple-fiscal year financial obligation subject to Section 20 of Article X of the Colorado Constitution.

8.        Reimbursement of Owners’ Costs.  The City agrees that within          days after the effective date
of the annexation of the Property into the City, that the City shall pay to the Owners a total sum of
$                 representing the Owners’ past costs in attempting to annex the Property into Loveland and
other costs related to the current annexation of the Property into Loveland. Notwithstanding the
foregoing, the City agrees, regardless of whether the Property is so annexed into the City, to reimburse
the Owners for any additional reasonable engineering and legal fees incurred by the Owners which are
documented and directly related to the negotiation and drafting of this Agreement, to the negotiation
and drafting of the Annexation Agreement, and to the annexation itself.  

9.        Council Approval.  Notwithstanding any of the provisions of this Agreement, nothing herein shall
be construed to require the City Council to approve the proposed annexation of the Property, to
approve the proposed zoning of the Property, or in any way obligate the City Council to grant such
approvals. The Owners further acknowledge and agree that the annexation and zoning of the Property,
as proposed in this Agreement, are subject to the legislative discretion of the Loveland City Council and
that no assurances of annexation or zoning have been made or relied upon by the Owners. However, in
the event that the City Council does not approve on or before                                 , 2008, the
annexation of the Property or approve the zoning of the Property as provided in Section 4. above, or as
otherwise provided in the Annexation Agreement, the City agrees that the Owners may withdraw their
Petition attached hereto as Exhibit “C” and that the Owners shall no longer be bound by the provisions
of Section 1 above to not file a petition for annexation for the Property with any other municipality.

10.        Severability.  The Parties agree that if any part, term, portion, section or provision of this
Agreement is held by a court of competent jurisdiction to be illegal or in conflict with any law or
regulation, the validity of the remaining parts, terms, portions, sections or provisions shall not be
affected, and the rights and obligations of the Parties shall be construed and enforced as if the
Agreement did not contain the particular part, term, portion, section or provision held to be invalid.

11.        Rules of Construction.  This Agreement shall be construed according to its fair meaning and as
if prepared by all of the Parties and shall be deemed to be and contain the entire understanding and
agreement between the Parties. There shall be deemed to be no other terms, conditions, promises,
understandings, statements or representations, expressed or implied, concerning this Agreement
unless set forth in writing and signed by all of the Parties.  

12.        Future Cooperation.  The Parties agree that they will cooperate with one another in
accomplishing the terms, conditions, and provisions of this Agreement and will execute such additional
documents as are reasonably necessary to effectuate the same.

13.        Remedies on Default.  Each and every term and condition of this Agreement shall be deemed
to be a material term and condition under this Agreement. In the event that any of the Parties should
fail or refuse to perform according to the terms of this Agreement, such party may be declared in
default. The Parties acknowledged and agree that the subject of this Agreement concerns unique real
property and performance by the Parties; therefore, the Parties agree that in case of default by any of
the Parties hereto, the other Parties shall be entitled to specific performance from the defaulting party
of its obligations hereunder together with any and all other remedies available at law or in equity. In the
event of such default, if the party that is not in default commences legal or equitable action against the
defaulting party, the defaulting party shall be liable for the non-defaulting party’s reasonable attorney’s
fees and costs incurred because of the default.

14.        Notices.  All notices under this Agreement shall be in writing and shall be hand delivered, sent
by facsimile transmission, or sent by certified mail, return receipt requested, postage pre-paid to the
addresses of the Parties hereinafter set forth. All notice by hand delivery shall be effective upon
receipt. All facsimile transmissions shall be effective upon transmission received, provided a hard copy
is mailed by first class mail on the same date. All notices by mail shall be considered effective 72 hours
after deposit in the United States mail with the proper address as set forth below. Any party, by notice
so given, may change the address to which future notice shall be sent.  

      Notice to City:                                Don Williams, City Manager
                                              City of Loveland
                                              500 E. Third Street, Suite 330
                                              Loveland, CO 80537
                                              Fax No.: (970) 962-2900

      With copy to:                                John Duval, City Attorney
                                              City of Loveland
                                              500 E. Third Street, Suite 330
                                              Loveland, CO 80537
                                              Fax No.: (970) 962-2900

      Notice to Owners:                        Sandra S. Olson Trust
                                                                              
                                                                              

                                              Jennifer C. Olson Trust
                                                                              
                                                                              

                                              Julia D. Olson Trust
                                                                              
                                                                              

      With copy to:                                James A. Martell
                                              Liley, Rogers & Martell, LLC
                                              300 South Howes
                                              Fort Collins, CO 80521
                                              Fax No.: (970) 221-4242

15.        No Third-Party Beneficiaries.  This Agreement is made solely for the benefit of the Parties
hereto and is not intended to nor shall be deemed to confer rights on any other person or entity not
named as one of the Parties to this Agreement.

16.        Governing Law and Venue.  This Agreement shall be governed by, and construed in
accordance with the laws of the State of Colorado. In addition, the Parties hereto recognize that there
are legal constraints imposed upon the City by the constitutions, statutes and rules and regulations of
the State of Colorado and of the United States and imposed upon the City by its Charter and Code, and
that, subject to such constraints, the Parties intend to carry out the terms and conditions of this
Agreement. Notwithstanding any other provision of this Agreement to the contrary, in no event shall any
of the Parties exercise any power or take any action that would be prohibited by applicable law.
Whenever possible, each provision of this Agreement shall be interpreted in such manner so as to be
effective and valid under applicable law. Should any of the Parties institute legal suit or action for
enforcement of any obligation contained herein, it is agreed that venue of such suit or action shall be in
the District Court of Larimer County, Colorado.
17.        Binding Effect.  This Agreement shall be binding upon and inure to the benefit of the Parties
and of their respective personal representatives, successors, heirs, trustees and assigns, and shall
constitute covenants and equitable servitudes running with the Property. This Agreement shall be
recorded at the City’s expense with the Clerk and Recorder of Larimer County, Colorado.  
18.        Headings.  The headings of this Agreement are for convenience of reference only and shall not
be considered in construing or interpreting any section of this Agreement.
19.        Time of the Essence.  Time is of the essence of each and every term, covenant, condition and
provision of this Agreement.
20.        Applicability of other City Requirements, Rates, Fees and Charges.  The Parties agree that
except as otherwise provided in this Agreement and in the Annexation Agreement, that all other
applicable City Code provisions, regulations, standards, rates, fees and charges shall apply to any
future development of the Property.
21.        Assignment.  This Agreement shall not be assigned by any of the Parties hereto without the
prior written consent of all of the other Parties.

IN WITNESS WHEREOF, each of the Parties hereto have caused this Agreement to be executed as of
the date set forth below.

              CITY OF LOVELAND, COLORADO, A
              HOME RULE MUNICIPALITY

                          By:                                         Date:                        
                                    Mayor

ATTEST:

_____________________________
City Clerk

APPROVED AS TO FORM:

                              
City Attorney

STATE OF COLORADO                )
)  ss.
COUNTY OF ____________        )

The foregoing was acknowledged before me this ____ day of ______________, 2008 by
__________________________.

Witness my hand and official seal.

My Commission Expires: ______________________.

                                      __________________________________
      Notary Public





SANDRA S. OLSON TRUST


              By:                                                         Date:                        


                                            

STATE OF COLORADO                )
)  ss.
COUNTY OF ____________        )

The foregoing was acknowledged before me this ____ day of ______________, 2008 by
__________________________.

Witness my hand and official seal.

My Commission Expires: ______________________.

                                      __________________________________
      Notary Public







JENNIFER C. OLSON TRUST


              By:                                                         Date:                        
                                            

STATE OF COLORADO                )
)  ss.
COUNTY OF ____________        )

The foregoing was acknowledged before me this ____ day of ______________, 2008 by
__________________________.

Witness my hand and official seal.

My Commission Expires: ______________________.

                                      __________________________________
Notary Public



JULIA D. OLSON TRUST


              By:                                                         Date:                        
                                            

STATE OF COLORADO                )
)  ss.
COUNTY OF ____________        )

The foregoing was acknowledged before me this ____ day of ______________, 2008 by
__________________________.

Witness my hand and official seal.

My Commission Expires: ______________________.



EXHIBIT “A”
[INSERT LEGAL DESCRIPTION OF NORTH PARCEL]


EXHIBIT “B”
[INSERT LEGAL DESCRIPTION OF SOUTH PARCEL]

EXHIBIT “C”
[ATTACH PETITION FOR ANNEXATION]