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5298389.1
<br />implementing, and funding the costs of such Capital Improvement needs. This provision shall not
<br />be construed to require Zone 7 to fund all costs of routine O&M costs, including routine and/or
<br />minor repairs to Project facilities, which costs will be captured and included as O&M costs and
<br />invoiced pursuant to Section 6.4 of this Agreement.
<br />7. Dispute Resolution. If the Parties’ Project staff disagree on Project-level decisions
<br />or a dispute arises regarding Project operations, staff from both Parties shall meet and confer to
<br />resolve the outstanding issues promptly and avoid delays. If such dispute remain unresolved, the
<br />Parties will escalate the dispute to their respective management and executives. If, after escalation,
<br />the dispute remains unresolved, the Parties shall submit the dispute to a mediator within ninety
<br />(90) days of the date of escalation to management. The costs of mediation shall be divided evenly
<br />between the Parties. The Parties agree that the procedure described in this paragraph represents an
<br />effort to resolve disputes without the need for a formal claim under the California Tort Claims Act
<br />or other applicable law. The period of time for the presentation of a claim by one Party against
<br />another shall be tolled for the period from the date on which the Parties met and conferred at the
<br />staff level until the date upon which the mediator renders a decision. Nothing in this paragraph
<br />shall require a Party to comply with a decision of the mediator and, after the completion of the
<br />mediation process described above, each Party shall retain and may exercise at any time all legal
<br />and equitable rights and remedies it may have to enforce the terms of this Agreement; provided
<br />that prior to commencing litigation, a Party shall provide at least ten (10) calendar days of written
<br />notice of its intent to sue to the other Party.
<br />8. Books and Records. The Parties shall have access to and the right to examine any
<br />pertinent books, documents, papers, or other records (including, without limitation, records
<br />contained on electronic media) relating to the other Party’s performance of its obligations pursuant
<br />to this Agreement and, in general, the operation, maintenance, and repair of Project facilities.
<br />9. Indemnification. The Parties shall each indemnify the other for any and all
<br />damages, liabilities, claims, actions, demands, costs and expenses (including, but not limited to,
<br />costs of investigations, lawsuits and any other proceedings whether in law or in equity, settlement
<br />costs, attorneys’ fees and costs), and penalties or violations of any kind, which arise out of, result
<br />from, or are related to the respective Parties’, or the Parties’ employees’, agents’, contractors’, or
<br />subcontractors’, actions associated with the Project (“Claims”). Provided that neither Party shall
<br />indemnify the other for Claims that solely arise from or are related to the other Party’s, or its
<br />employees’, agents’, contractors’, or subcontractors’, grossly negligent or intentional conduct
<br />(“Exempt Claims”).
<br />10. Notice. All notices, requests, demands, or other communications required or
<br />permitted under this Agreement shall be in writing, unless provided otherwise in this Agreement,
<br />and shall be deemed to have been duly given and received on: (i) the date of service, if served
<br />personally or served by facsimile transmission or electronic mail on the Party to whom notice is
<br />to be given at the address(es) provided below, (ii) on the first day after mailing, if mailed by Federal
<br />Express, U.S. Express Mail, or other similar overnight courier service, postage prepaid, and
<br />addressed as provided below, or (iii) on the third day after mailing if mailed to the Party to whom
<br />notice is to be given by first class mail, registered or certified, postage prepaid, addressed as
<br />follows:
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