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SECTION 1: PLEASANTON TURN OUT <br /> 1.1. The Pleasanton Turn Out will be located on DSRSD Dedicated Land Disposal <br /> property 1,500 feet down stream on Pipeline AB located and configured as agreed upon <br /> by the parties in accordance with Paragraph 4.1 of the Agreement. <br /> 1.2. Upon completion of construction and acceptance by DERWA of the Pleasanton <br /> Turn Out and associated transmission pipeline to the Pleasanton recycled water <br /> distribution system as constructed by Pleasanton, Pleasanton shall transfer ownership of <br /> the Pleasanton Turn Out and portion of transmission pipeline on DSRSD property to <br /> DSRSD. <br /> 1.3. Upon transfer of ownership of the Pleasanton Turn Out and portion of <br /> transmission pipeline to DSRSD, DERWA shall be responsible for maintenance and <br /> replacement of the Pleasanton Turn Out and portion of transmission pipeline owned by <br /> DSRSD. <br /> 1.4. Upon transfer of ownership: <br /> 1.4.1. Pleasanton shall reimburse DERWA all direct costs of operation, <br /> maintenance and replacement of the Pleasanton Turn Out and <br /> transmission pipeline on DSRSD property; and <br /> 1.4.2. Replacement Expenditures for items with a cost of less than one <br /> hundred thousand dollars ($100,000)each, associated with the 1,500 <br /> feet of Pipeline AB utilized by Pleasanton, shall be considered an <br /> operating cost incorporated into the annual DEWRWA rate structure <br /> in the Fiscal Year in which DERWA makes such expenditures; and <br /> 1.4.3. Replacement Expenditures for items with a cost greater than one <br /> hundred thousand dollars($100,000) each, associated with the 1,500 <br /> feet of Pipeline AB utilized by Pleasanton, shall be considered a <br /> capital cost. Except in an emergency, DERWA will provide sixty (60) <br /> day notice of anticipated expenditures associated with the 1,500 feet <br /> of Pipeline AB utilized by Pleasanton. DERWA shall invoice <br /> Pleasanton upon completion of the work or after progress payment to <br /> contractor, whichever is appropriate. Said invoice shall be 20% (4.2 <br /> mgd / (16.5 mgd + 4.2 mgd)) of the total expenditure. Pleasanton <br /> shall reimburse DERWA within 30 days of receipt of invoice. <br /> Page 2 of 7 <br />