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EXHIBIT F CAPITAL IMPROVEMENT PR03ECT REIMBURSEMENT TERMS AND CONDITIONS In addition to the Water Service Agreement, as amended, PURVEYOR and MUNICIPALITY agree as follows: I. Scope of Agreement. This Agreement shall apply to any Capital Improvements performed by MUNICIPALITY for which PURVEYOR is providing reimbursement during the term of the Water Service Agreement, as amended C'Agreement'). In instances where both parties determine that deviations from this Agreement are necessary due to the unique circumstances of a particular Capital Improvement project, the parties shall execute a letter agreement specifying any modifications to this Agreement for that particular project. Such letter agreement shall apply solely to the particular Capital Improvement project for which modifications are necessary, unless otherwise specified in the letter agreement. II. Engineering Consultants and Preparation of Design and Specifications. A. Hiring Consultants. MUNICIPALITY shall hire consultants and authorize work as required by its charter and ordinances only after obtaining the written approval of PURVEYOR to perform each Capital Improvement; the consultants shall design the Capital Improvement, prepare the specifications, provide engineer's estimates of the costs of the Capital Improvement, provide construction administration services, and prepare as -built drawings. All designs shall be prepared in accordance with PURVEYOR's standards and details. B. Payments to Consultant. MUNICIPALITY shall be responsible for making all payments to its consultants. Throughout each Capital Improvement, MUNICIPALITY shall provide on- going documentation to PURVEYOR related to the work performed by the consultants, including, but not limited to, consultants' requests for payment and MUNICIPALITY's payments to the consultants. MUNICIPALITY need not obtain approval of PURVEYOR prior to making payments to MUNICIPALITY's consultants; however, PURVEYOR shall inform MUNICIPALITY of any problems PURVEYOR identifies within the documentation provided, and the parties shall cooperate in resolving such problems. C. Approval of Design. MUNICIPALITY shall obtain PURVEYOR's written approval of all final designs and engineer's cost estimates of water work prior to bidding the construction portion of a Capital Improvement. Capital Improvements for which designs have been completed prior to the parties entering into this Agreement may be eligible for reimbursement under this Agreement so long as MUNICIPALITY obtains PURVEYOR's written approval of the completed design. D. Inslectors. In addition to MUNICIPALITY's construction site inspector, PURVEYOR shall have the right to have its own inspector or other designee present during all construction work. PURVEYOR's inspectors and/or designees shall be present to observe all water main hydrostatic testing, chlorination, final inspections, and warranty inspections. MUNICIPALITY's inspection costs shall be considered reimbursable construction 17