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TERMS AND CONDITIONS The Pennit Holder and the Project Sponsors (Gunnison County, Dos Rios Water System, Upper Gunnison River Water Conservancy District, Crested Butte Mountain Resort, Town of Crested Butte, Scenic River Tours, City of Gunnison, Gunnison County Stock Growers Association, and Crested Butte South Metropolitan District) are all subject to the terms and conditions in this Permit. I. The State of Colorado (State), Department of Natural Resources (DNR), and the Colorado Water Conservation Board (CWCB) reserve the right to revoke, suspend or investigate weather modification operations at any or all generator sites named in this Permit for any reason. 2. The Permit Holder and Project Sponsors release the State, DNR, and CWCB of all liability related to cloud seeding operations. Adequate safeguards are defined in this Permit to operate within the natural variability of the local climate. Reasonable operations to augment snowpack to near normal levels are required for the health, safety, and welfare of the environment and Colorado's citizenry. 3. The Permit Holder and Project Sponsors may not significantly change the Operational Plan contained in the Record of Decision for the August 17, 2007 hearing ("Operational Plan"), develop agreements with out-of-state entities, receive out-of-state funding, and relocate or add cloud seeding generators without prior written approval from the CWCB. 4. The permitted project is a commercial operation and the Permit Holder will pay a 2% commercial fee to the CWCB, which is 2% of the base contract between the Permit Holder and the Project Sponsors for each year of operations. 5. Cloud seeding operations must be carried out in conformity with the Operational Plan, except for those operations that are modified by the terms and conditions in this Permit. This Permit is also subject to state statutes and authorities for weather modification in Colorado 36-20-101 through 36- 20-127 C.R.S. If operations change a new Operational Plan must be submitted to the CWCB. 6. Wintertime cloud seeding in the Colorado River Basin is now being supported through the CWCB and water users in Nevada, California, Arizona, and New Mexico pursuant to Colorado River Seven Basin States water augmentation initiative. The Permit Holder and Project Sponsors will comply with all requests from the CWCB regarding operations, evaluations, and expenditures consistent with the Agreement among the Six Agency Committee, the Central Arizona Water Conservation District, the Southern Nevada Water Authority and the CWCB executed fully on March 21, 2007. The Permit Holder shall maintain a valid general liability insurance policy for $1 million dollars or more and add all Project Sponsors and parties to the Agreement referenced in this paragraph. 7. This Permit is subject to changes by the DNR and CWCB if any of the terms and conditions is inadequate to provide accurate monitoring and operations suspension criteria. New suspension criteria can amend this Permit at anytime by the CWCB. 8. Cloud seeding will be conducted only under conditions when seeding is likely to be beneficial in the target areas. The Permit Holder will define operational criteria and data used to make decisions and make this information a part of the Operational Plan and annual reports. 9. The Permit Holder is approved for twenty-eight generators for this Pennit as requested in the application. Additional generators can be requested for consideration by the eWeB Director. 2