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12-29-2004 05:26pm From-ALSTON AND BIRD <br />404881777T T-729 P.003/006 F-643 <br />4. Operation of the McCann Ditch. Grantor shall be responsible for the day to day <br />operation of the McCanne Ditch, headgates and check structures. Grantee shall be <br />responsible for delivery of its water through the headgate or other structure, and the day <br />to day operation of any structures needed for subsequent release, storage or recharge. <br />Grantee shall notify Grantor 24 hours in advance of its intent to begin running water. <br />5. Cost of Carriage. Grantor shall not look to Grantee for the payment of any carriage cost <br />for the Foreign Water. Instead, Grantor agrees to negotiate with Brighton in good faith <br />for Brighton's direct payment of such carriage costs. <br />6. Measurement of Foreign Waters. Measurement of the waters carried in the McCann <br />Ditch by Grantee shall be at any measuring structure where the water is delivered into <br />and out of the McCann Ditch to storage into the Kenneth Mitchell Lakes. Grantee <br />shall be entitled to claim all recharge credits for Grantee's water which seeps out of the <br />McCanne Ditch between the point at which water is delivered to McCann Ditch and <br />the release point or any storage or recharge sites. <br />7. Grantor's Rights to Use Ditch. Grantee's rights granted herein are subordinate to the <br />primary right of Grantor to use the McCann Ditch for the diversion of the water rights <br />now decreed to the McCann Ditch or a change to augmentation of up to 900 acre-feet <br />per year pursuant to the application filed Case No. 96CW197, District Court, Water <br />Division No. 1. Grantee may use carriage capacity that is excess to the needs of <br />Grantor whenever it is available in the water year, and Grantee shall have a first and <br />prior right to such carriage capacity to the extent of the rights granted herein. In the <br />event that Grantor desires or intends to sell or assign all or part of its interest in the <br />McCann Ditch (or in the Henderson Water Company), the parties hereto agree to <br />determine the quantity of water, in acre-feet, to which Grantee shall be entitled to carry <br />through the McCann Ditch to satisfy its obligation to satisfy the Brighton to carry <br />water to its Kenneth Mitchell Lakes in accordance with the MOU and Tri-Party <br />Agreement described above. Once so determined, Grantee shall have a first and prior <br />right to such capacity notwithstanding sale or assignment of Grantor's interest in the <br />McCann Ditch. <br />8. Dispute Resolution. if any disagreement should arise between the parties with respect <br />to their respective rights and obligations under this Agreement, such disagreement shall <br />be decided by binding arbitration before a single arbitrator experienced in Colorado <br />water law pursuant to the Construction Rules of the American Arbitration Association. <br />The fees and costs of the arbitrator, and any other costs of the proceeding, shall be paid <br />one-half by Grantor and one-half by Grantee; provided, however, that the arbitrator <br />shall award attorneys' fees and costs to the substantially prevailing parry, which shall <br />be determined in the sole discretion of the arbitrator. <br />9. Tern. The term of this Agreement shall be perpetual- <br />10. Relocation of Ditch. Grantee shall be entitled to relocate any portion of the McCann <br />Ditch located on the property of Grantee or its affiliates as necessary to facilitate or <br />assist its mining operations. Grantee shall provide its plans and specifications, which <br />2