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6 4141352.1 4197282.1 4) Zone 7 guarantees and costs for supplying City GPQ until Phase II is complete and Phase III begins. 5) Land right grants to construct and operate new groundwater facilities. 6) Groundwater facilities ownership. 7) Groundwater facilities capacity rights (annual and maximum day) and ability for expansion by either party. 8) Delivery schedule of City GPQ and ability for City to go below or above GPQ on an annual basis as defined in the future operations agreement. 9) Addition of treatment technology if required to meet future water quality regulations. 10) Liability 11) Other draft terms deemed necessary by either party. The following outlines activities by each party during Phase I that will occur outside the scope of this agreement and be the sole responsibility of each party including all associated costs and liability, except where noted: 1) Zone 7 Groundwater Modeling: Zone 7 is the Groundwater Sustainability Agency for the Livermore Valley Groundwater Basin. Upon completion of the exploratory test drilling activities under this agreement, Zone 7 will utilize its groundwater model to determine the impacts, if any, to the sustainability of the groundwater basin from implementation of the Project. The results of this groundwater modeling will be factored into the technical feasibility review performed under this agreement. 2) City Distribution Modeling: As part of the Project concept, the Parties anticipate that the City’s GPQ will be delivered by Zone 7 to the City through City turnouts. Since the City’s GPQ currently is introduced directly into the distribution system through its wells, the Project will result in higher flowrates through City turnouts and Zone 7’s transmission system. The City will perform hydraulic modeling of its distribution system to determine required turnout and distribution system improvements and costs because of this Project. To perform this modeling, Zone 7 will assist and provide pressure assumptions at each turnout. The City will utilize the results of this modeling to help determine the feasibility of the Project. Based on the results of the scope of work from Phase I, both parties will make a recommendation on project feasibility. If both parties determine the Project to be feasible, the parties will work in good faith to reach an agreement to proceed into Phase II and III, said agreement will need to be authorized by the respective governing bodies prior to proceeding. If the parties cannot reach an agreement to proceed into Phase II and III, both parties will have equal rights to the work product produced by the contractor/ consultant in Phase I of the Project, and to proceed with completing subsequent phases of the Project unilaterally. Docusign Envelope ID: C3AEBDB6-7475-485D-A080-E7CE2789D1B8