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<br />Section 2.04. Construction of Supply Line. <br /> <br />A. The Buyer will be responsible for constructing the supply line (the "Supply Line") for the <br />transmission of the Reclaimed Water from the Treatment Plant to the Facility. The Buyer will have <br />plans and specifications for the Supply Line prepared by a professional engineer registered in Texas. <br />These plans and specifications will be subject to review and approval by the Seller (which will not <br />be unreasonably withheld) and the Texas Natural Resource Conservation Commission ("TNRCC"). <br />The Seller may request that the Buyer construct the Supply Line with a capacity exceeding the <br />Seller's minimum standards or the Buyer's needs for the Facility, whichever are greater. The Seller <br />will reimburse the Buyer for the additional construction cost of any oversizing requested by the <br />Seller, with the additional cost being the difference in alternative bids submitted by the construction <br />contractor for the Supply Line, one for the size required for the Buyer, and the other for the size <br />requested by the Seller. <br /> <br />B. The Buyer will be responsible for obtaining all easements and permits necessary for the <br />Supply Line. Descriptions of all easement areas will be prepared by a land surveyor registered in <br />Texas, and the form of all easements will be subject to review and approval by the Seller's legal <br />counsel, which will not be unreasonably withheld. In the event the Buyer is unable to obtain a <br />needed easement through voluntary conveyance by a property owner, the Buyer may request that the <br />Seller use its eminent domain authority to obtain the easement. The exercise of the power of eminent <br />domain will be at the sole discretion of the Seller. The Buyer will reimburse the Seller for all costs <br />of any eminent domain proceeding, and will pay the amount of any award or judgment in the <br />proceeding. <br /> <br />C. The Buyer will ensure that the construction is carried out under the supervision of a <br />professional engineer registered in the State of Texas. The Buyer will include in the construction <br />contract requirements that a) the contractor must maintain commercial general liability insurance <br />coverage for all of its operations under the contract, and b) all persons engaged in work under the <br />contract must be covered by workers' compensation insurance. <br /> <br />D. The Seller will have the right to inspect the Supply Line during the process of <br />construction, and upon completion. Upon acceptance ofthe completed Supply Line by the Seller, <br />the Buyer will convey title to the Supply Line and all easements to the Seller, free and clear of any <br />liens, and the Buyer will assign all permits for the Supply Line to the Seller. <br /> <br />E. The Seller will design and construct, at the Buyer's expense, pumping, storage and <br />chemical feed facilities at the Treatment Plant necessary to transport the Reclaimed Water to the <br />Point of Delivery through the Supply Line. <br /> <br />F. The Seller will ensure that any connections made to the Supply Line to serve other <br />customers are equipped in such a way that the Seller is able to comply with its supply obligations <br />hereunder. <br /> <br />3 <br />