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<br />City of San Marcos/Guadalupe-Blanco River Authority <br />Water Treatment Facilities <br /> <br />Service Contract <br />Article VI - Management and Operation <br /> <br />their design, and their physical condition relevant to the obligations of the Authority pursuant <br />to this Service Contract, including structural and operating conditions, roads, Utilities, <br />topographical conditions; (2) the Authority is familiar with current local conditions which may <br />be material to the Authority's performance of its obligations under this Service Contract; (3) the <br />Authority has received and reviewed the Reference Documents, the background documents <br />provided by the City in the RFP process and other records and information pertaining to the <br />Facilities that it has deemed necessary to receive and review for the purposes of entering into <br />and performing this Service Contract, and assumes the risk of incompleteness or inaccuracy in <br />any information provided to it by the City or third parties in the process of entering into this <br />Service Contract; and (4) based on the foregoing, the Facilities can be managed, operated, <br />maintained, repaired and replaced, so as to comply with the Performance Guarantees and the <br />other terms and conditions hereof. <br />(B) "As-Is" Condition of Facilities. Based on its review of the design <br />drawings, plans and specifications pertaining to the Plant, its inspections of the Facilities, and <br />other inquiries and investigations made by the Authority prior to the Commencement Date, <br />which the Authority acknowledges to be sufficient for this purpose, the Authority assumes the <br />risk of the adequacy and sufficiency of the Facilities and the existing, "as-is" condition of the <br />Facilities as such condition may affect the ability of the Authority to comply with Applicable <br />Law, meet the Performance Guarantees, meet its maintenance, repair and replacement <br />obligations or perform any of its other obligations hereunder on the schedule and for the <br />compensation provided for herein. Prior to the Commencement Date, the Authority will provide <br />the City written notification of any defect, flaw, error, inoperability, inadequacy or other <br />condition or aspect of the existing condition of the Facilities which exists. Any such defect, <br />flaw, error, inoperability, inadequacy or other condition or aspect not identified by the <br />Authority in its notice to the City as of the Commencement Date or which may be revealed <br />during the performance hereof shall not be an Uncontrollable Circumstance. The Authority's <br />assumption of risk under this subsection is subject to the limitations provided in <br />subsection (C) of this Section. <br />(C) Limitations on the Authority's Assumption of "As-Is" Risk. It is <br />specifically understood that the Authority's assumption of the "as-is" risk of the condition of <br />the Facilities as provided in subsection (B) of this Section shall not extend to the following: <br />(1) Pre-Existing Environmental Conditions, (2) Specified Site Conditions and (3) the actual <br />condition of structures and equipment which could not have been known to the Authority prior <br />to the Commencement Date or could not have been verified by the Authority prior to the <br />Commencement Date without cutting through such equipment or structures, draining or <br />removing material therefrom or unreasonably materially interfering with the operation of the <br />Facilities, but only to the extent that such conditions could not have been reasonably <br /> <br />35 <br />