2011-03-14_REVISION - M1977493 (60)

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CM0001041 F. In consideration of the other terms of this Agreement, Climax is willing to exchange the Reservoir Enlargement Lands for the Surplus Lands. AGREEMENT In consideration of the covenants and mutual agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows: 1. Facility Specifications. For purposes of performance under this Agreement and paragraph 8 of the 1998 Agreement, the Facility shall be constructed to a minimum capacity of 6 cfs in accordance with the specifications contained in Exhibit N of the 1998 Agreement, as such specifications are hereby supplemented and modified by the drawings and specifications contained in the attached Exhibit 1 (collectively the "Facility Specifications"). To the extent there is a conflict between the specifications contained in Exhibit N and the attached Exhibit 1, the drawings and specif catiom in Exhibit 1 shall control. Climax shall pay and bear- all costs associated with the construction of the Facility in accordance with the Facility Specifications and the requirements of.the 404 Permit, including, but not limited to, any associated design, engineering and permitting activities; provided, however, that the Reservoir Company shall assume all mitigation activities required by the 404 Permit after Closing. 2. Option Exercise Conditions. The Reservoir Company agrees that conditions (d) and (e) of the Pumpback Conversion Option as described in paragraph 8 of the 1998 Agreement have been satisfied. Accordingly, the Parties agree that the only remaining precondition to the exercise of the Pumpback Conversion Option shall be the obligation of Climax to successfully permit, construct and make operational the Facility in* accordance with the Facility Specifications and the requirements of the 404 permit. The Reservoir Company agrees that the performance by Climax of the items listed below shall satisfy the condition contained in the 1998 Agreement for Climax to successfully permit, construct and make operational the Facility, and that upon performance of the following items, all conditions to the exercise of the Pumpback Conversion option set forth in paragraph 8 of the 1998 Agreement shall be deemed to have been satisfied: (a) Climax shall construct the Facility in accordance with the Facility Specifications and all requirements of the 404 Permit, and warrants that the Facility will operate without any leakage at a minimum capacity of 6 cfs. Climax shall give the Reservoir Company written notice of the completion of construction of the Facility in accordance with the Facility Specifications and all requirements of the 404 Permit. Upon receipt of such notice, the Reservoir Company shall have the opportunity to inspect the Facility and shall have 21 days from the date when the flow of the East Fork of the Eagle River at the diversion point is 7.5 cfs (6 cfs + the 1.5 cfs instream flow) or greater in which (i) to operate and pump test the Facility; and (ii) to provide Climax with written notice of any alleged defects in the Facility, or that the Facility has not been constructed to a minimum operational capacity of 6 cfs in accordance with the Facility Specifications and all requirements of the 404 Permit. In the event the Reservoir Company provides such written notice of any such defects, Climax will have an opportunity to cure any alleged defects within 90 days of receipt of such written notice. In the event Climax cures any defect within such 90 day period, Climax shall give the Reservoir Company written notice of the M10287 2 0 • •