2011-03-30_REVISION - M1977493 (16)

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• conditions set forth herein (the "Pumpback Conversion Option'). The Pumpback Conversion Option shall have a term of, and shall expire if not exercised within, 89 years from the date of this Agreement. The Pumpback Conversion Option may only be exercised if all of the following have occurred: (a) a Closing of the Project Rights has or simultaneously occurs as set forth in paragraph 6 above; (b) Climax has successfully permitted, constructed and made operational the East Fork Pumpback Facility in compliance with the specifications set forth on Exhibit N attached hereto; (c) Climax is not in breach of any of its obligations under this Agreement or any document executed at Closing; (d) Climax and the Reservoir Company have obtained a final decree, not subject to appeal, adjudicating the East Fork Pumpback Facility as an alternate point of diversion for the water rights decreed in Case No. 92CW340; and (e) Climax and the Reservoir Company have obtained a final decree, not subject to appeal, designating the East Fork Pumpback Facility as an alternative point of diversion for the exchange rights decreed in Case No. 95CW348. The Pumpback Conversion Option must be exercised, if at all, by written notice delivered to the Reservoir Company within the term of such option. At the closing upon exercise , of such option,. (a) the Reservoir Company shall convey the Retained AW Water to Climax by special warranty deed, free and clear of all liens, encumbrances, leases, contracts, assessments, charges or interests, using the form of deed attached hereto as Exhibit O, and (b) Climax shall convey the East Fork Pumpback Facility to the Reservoir Company, together with easements and rights of ingress and egress thereto adequate for operation of the facility, all by special warranty deed, free and clear of all liens, encumbrances, leases, contracts, assessments, charges or interests, together with all permits thereto. • 9. Seepage Pumaback Facilities. (a) Climax has constructed and maintained a pond located approximately 300 feet below the toe of Dam 4 which captures groundwater, seepage or other water escaping from Eagle Park Reservoir. Water from this pond is pumped back to Robinson Reservoir or Climax's industrial process water system by means of an existing pipeline. The foregoing pond, pipeline and pumpback system are hereinafter collectively referred to as the "Dam 4 Seepage Pumpback Facility." The Dam 4 Seepage Pumpback Facility is not included among the Project Rights being purchased pursuant to this Agreement, and Climax shall be solely responsible for the operation and maintenance of the Dam 4 Seepage Pumpback Facility. Climax further agrees that it shall continue to operate and maintain the Dam 4 Seepage Pumpback Facility at any time that water captured by any component of the Dam 4 Seepage Pumpback Facility does not meet the water quality standards of the East Fork of the Eagle River as determined by the Colorado Department of Health; provided, however, that with prior written notice to the Reservoir Company, Climax may terminate its operation of the Dam 4 Seepage Pumpback Facility and remove and/or eliminate said facility if it obtains written approval from the Colorado Division of Minerals and Geology and the Colorado Department of Health. Notwithstanding such approval and removal of the Dam 4 Seepage Pumpback Facility, Climax shall remain liable for any ground or seepage water escaping from Eagle Park Reservoir that does not meet the water quality standards of the East Fork of the Eagle River. (b) As set forth in paragraph 2(d) above, Climax is obligated to permit, construct and make operational the Robinson Seepage Pumpback Facility. The Robinson • Seepage Pumpback Facility is not included among the Project Rights being purchased pursuant M2669 -7-