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Pearose agrees, in order to minimize interference with irrigation delivery to shareholders, to construct its own delivery pipeline fi•om the Reservoir to the water treatment plant by or before that time when its demand through the G St. Pump Station exceeds 2 Cubic Feet Per Second (CFS), the current capacity of the G St. Pump Station, as metered at the water treatment plant. Releases from the Reservoir will also be measured at the Brush Hollow outlet gauging station to account for storage releases and conveyance losses in the Lower Canal. When Beaver Park is not making releases for the benefit of their shareholders, Penrose will be responsible for ali conveyance losses in the Lowec Canal. When Beaver Park is making releases for the benefit of their shareholders, Beaver Park wili be responsible for all conveyance losses in the Lower Canal and Penrose's releases from the outlet works will be limited to 2 CFS. Penrose agrees that it will not undertake other modification to facilities owned by Beaver Park unless and until Penrose has obtained from Beaver Park the right to reasonable modifications. Penrose agrees to install on the Uppea• Canal a gauging station and weir upstream of the Brush Hollow inlet siphon to facilitate water accounting. 1. RIGHTS AND INTEREST GRANTED a. Penrose: Beaver Park will sell to Penrose 500 AF of Storage Space in Brush Hollow Reservoir. Such Storage Space is limited strictly for the benefit of the inhabitants within the Penrose Water District boundaries. Storage Space will not be at any particular gauge height or location in the Reservoir except that it cannot be below the staff gauge reading of 59 Feet in accordance with the existing Division of Wildlife lease mininium pooL Beaver Park shall have priority at all times to use the full capacity of the Reservoir, less Penrose's 500 AF, including al( inlet and outlet facilities, except as otherwise defined in this agreement, and nothing in this agreement shall impair the right of Beaver Park to use, sell or lease its remaining storage capacity to any other party. Beaver Park may enter into storage space agreements with other parties, from time to time, for use by others of Beaver Park's remaining storage space in the Reservoir, In no event will agreements with other parties have a higher priority of space in the Reservoir, or use of inlet and outlet facilities, than that granted to Penrose. b. Beaver Park: The parties acknowledge that the use of excess capacity in the Penxose-Arkansas P.ipeline to the benefit of Beaver Park is part of th.e consideration under. the .terms of this agreement. Beaver Park cannot lease, sublease,,or sell their rights to the pipeline. Penrose shall allow Beaver Park to use a maximum o�' 1.5 CFS of capacity in the Penrose- Arkansas Pipeline. At times Penrose may, at its sole discretion, allow Beaver Park to use more than I.5 CFS of capacity in the p.ipe4ine. .Penrose shall-have grioriry at al��times to use the futl capxcity.ofthe Penrose-Arkansas Pipeline including all pumping and pipeline facilities. Nothing in this agreement .s.hall impair the right of Penrose to use sell or lease pipeline capacity to any other party subject to this agree�ent. Eenrose may enter into carriage agreements with.other parties, from time to time, for use by others of the available caniage capacity in the Penrose=Arkansas Aipeline. In no event will carriage agreements granted to others have a higher prioiity for utilization than the 1.5 CFS granted to Beaver Park herein. 2. DESIGPi AND CONSTRUCTIUN . a. Design Engineering: Penrose shall select and hire one or more. engineering firms to perform construction .design engineering for the Penrose-Arkansas Pipeline inlet to Brush Hollow Reservoir for the Penrose-Arkansas Pipefine. Beaver Park and Penrose will jointly review the Brush Hollow Inlet engineering construction documents. Beaver Park's engineer may determine that a supplemental review of the engineering construction documents is necessary. Any use of Beaver Park Easements or Crossings of Bcaver Park faciiities will be, subject to the approvaf of Beaver Park's board of direclors and underlying ]and owners. Penrose agrees to not interrupt irrigation water deliveries by performing "work arounds" and project scheduting. b. Construction: Penrose will selecl and hire a contractor to construct the. Penrose Arkansas Pipeline. Beaver Park shall have the right to review construction progress of the Brush Hollow Inlet: Penrose will ensure that the selected contractor is appropriately qualified and bonded for the Project and includes Beaver Park on their insurance as a second insured for work related to the inlet. Penrose will provide to Beaver Park pertinent construction documents including, but not limited to, construction drawings, requested change-orders, progress reports,.inspection reports, record drawings, and ciaims or disputes. Penrose agrees to schedule coustruction during periods which will not impact the irrigation season. Penrose agrees to insure and indemnify Beaver Park and its sto.ckholdets agairist.any injury as a result of activities specific to the constiuction of the Project, including loss or inability to deliver irrigatioo water. 3. OPERATIONS a. Brush Hollow Reservoir: Beaver Park is solely responsible for physical operations and ma,intenance of the Reservoir. Penrose shall have the right to direct the frequency, duration and rate of the delivery of its water into and out of the Reservoir, subject to operational limitations, and at amounts and times which do no harm to Beaver Park and provided the amount of water deli�ered by Penrose out of the Reservoir shall not.exceed the amount stored in Brush Hollow for Penrose, less evaporative and seepage losses.