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requested, and are in the process of negotiating, a contractual arrangement with the
United States to allow the Association to become the operator, and undertake operation
and maintenance of, the ALP Project upon completion.
1.13 The operation of the ALP Project, and the allocation of OM &R costs by
the Association, as contemplated by the IGA and Operation Principles, will vary in some
respects from the operation of the ALP Project and allocation of OM &R costs
anticipated by the Funding Agreement, Purchase Agreement, and Durango Purchase
Agreement. Among other things, the IGA and Operation Principles provide for ALP
Project operation by means of a joint storage pool, and for preferential delivery of direct
flow supplies to certain ALP Project participants; and for assessment and payment of
fixed OM &R costs among ALP Project participants different from what is contemplated
by the Funding Agreement, Purchase Agreement, and Durango Purchase Agreement.
1.14 On August 22, 2008, at its regular meeting, the Board of Directors of the
Authority approved the IGA and the Operation Principles, contingent on the ALPWCD
executing this Supplemental and Amendatory Agreement, which supplements and
amends the Purchase Agreement. On September 9, 2008, at its regular meeting, the
Board of Directors of the ALPWCD authorized its president to sign and bind the
ALPWCD to the terms of this Supplemental and Amendatory Agreement, which
supplements and amends the Purchase Agreement.
2. Agreement. For and in consideration of the premises, of the mutual agreements
herein, and of their mutual participation in the ALP Project, the parties hereto agree as
follows:
2.1 Upon consummation of the IGA and closing of the Purchase Agreement,
the Authority shall assign its right, title and interest in, and obligations under, the IGA
and the Operation Principles to the ALPWCD, and the ALPWCD shall assume the rights
and obligations of the Authority under, and comply with, the IGA and Operation
Principles, including, but not limited to, the obligation to pay and be responsible for,
OM &R costs assessed in accordance with the IGA and Operation Principles, for that
portion of the 700 a -f of the ALP Depletion Allocation acquired by the ALPWCD.
2.2 In the event that Durango exercises its option under the Durango Purchase
Agreement and purchases all or some portion of the 1,900 acre feet of ALP Depletion
Allocation that is the subject of that option, the ALPWCD shall pay, in addition to the
OM &R costs set forth in section 2.1 above, all OM &R costs assessed in accordance
with the IGA and Operation Principles for that portion of the ALP Depletion Allocation
acquired by Durango, less those OM &R costs Durango is obligated to pay under the
Durango Purchase Agreement.
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