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reservoir (the "Reservoir ") not to exceed 500,000 gallons of capacity (including active and dead
<br />storage), in a manner which is consistent with sound engineering, construction and operation
<br />principles. Prior to commencement of construction of the Reservoir and any related facilities,
<br />Kirkland shall submit to Galloway SG for its approval design plans for such Reservoir and
<br />facilities, which, at a minimum, shall provide that the Reservoir and related,facilities shall be
<br />constructed with a synthetic (HDPE membrane) liner (which Kirkland shall remove and,properly
<br />dispose of upon reclamation). Galloway SG may condition its approval of the design plans in its
<br />discretion. Kirkland shall be responsible, at its own_expense, for installation, repair, operation,
<br />maintenance and reclamation of the Reservoir and related facilities. Kirkland shall 'be solely
<br />responsible to apply for and obtain any rights, permits or other.govermnental authorizations
<br />necessary for construction and operation of the Reservoir and related facilities and the storage of
<br />water therein.
<br />4. Electric Service. Kirkland may utilize electric service (the "Electric Service ")
<br />which may be provided by MPE from time to time to BVR at the Property for the sole purpose of
<br />exercising the Mining Rights, performing the Operations and performing this Agreement;
<br />provided, however, that all such use of Electric Sei vice by Kirkland shall be separately metered
<br />and that Kirkland shall be responsible for all costs and expenses of any kind or nature associated
<br />with bringing service to the Property, and with installing any equipment necessary to allow
<br />Kirkland to use such service in compliance with this Agreement. Kirkland's use of Electric
<br />Service shall comply in all respects with all applicable laws and with any service agreement in
<br />place between MPE and BVR or Galloway SG from time to time.
<br />5. Costs and Expenses. Kirkland shall reimburse BVR and Galloway SG for all
<br />out-of-pocket costs and expenses incurred in connection with the Electric Service to the
<br />Property, and in connection with the Water Contracts to the extent related to the Bureau
<br />Industrial Water or the CRWCD Water. Such reimbursement shall include, but not be limited to,
<br />application fees, taxes, equipment purchases, electric and water charges attributable to
<br />Kirkland's use thereof, fees, penalties and other costs of any kind or nature. Kirkland's
<br />reimbursement payments to BVR and Galloway SG, as applicable, shall be due and payable
<br />within thirty (30) days of receipt of an invoice therefor. All payments hereunder shall be mailed
<br />to BVR or Galloway SG at 6915 Highway 9, P.O. Box 1120, Kremmling, CO 80459, or such
<br />other address as BVR or Galloway SG may designate by written notice to Kirkland.
<br />6. Covenants. Kirkland hereby warrants, covenants and agrees as follows:
<br />a. Kirkland shall comply with all laws governing.the exercise of any rights granted
<br />hereunder or the use of any water or Electric Service on the Property or otherwise in conjunction
<br />with the Project, including, without limitation, laws governing water rights and water storage,
<br />storm water management, environmental matters, historic preservations, reclamation, and safety.
<br />b. Kirkland 'shall obtain all nights, permits and other governmental authorizations
<br />necessary for its proposed actions hereunder, and shall comply with the Plans and the Permits.
<br />c. Kirkland shall not suffer or permit to be placed upon or enforced against the
<br />Subject Site or the Property, or any part thereof, or any improvements thereon, any liens arising
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