MPWMD Option to Own and Operate Phase I of Desalination Plant. 4.1 Exclusive Option. Company grants to MPWMD the sole and exclusive option (Option) to own and operate Phase I of the Desalination Plant. MPWMD may exercise this Option at any time within sixty (60) days following issuance of a Coastal Development Permit for the CCRWP by the California Coastal Commission. At the time of exercising the Option, MPWMD must not be in breach of any provision of this Agreement and must have fulfilled its obligation to reimburse Company for Environmental and Permitting Activities under sections 1.1, 1.2, 1.3 and 1.5, notwithstanding the provisions of section 1.4 or any other provision of this Agreement which obviates or excuses MPWMD’s obligation to make such reimbursements. The MPWMD Option shall be a priori to the rights of any other potential owner or operator of Phase I of the Desalination Plant. In the event Company receives a bona fide offer to purchase Phase I of the Desalination Plant, MPWMD shall have ninety (90) days after receipt of notice of such bona fide offer to exercise the Option. In the event MPWMD does not exercise the Option within such ninety (90) day period, the Option shall thereupon terminate and be of no further force or effect. If the Option is terminated pursuant to the provisions of this section 4.1 prior to issuance of a Coastal Development Permit for the CCRWP by the California Coastal Commission, MPWMD shall thereupon have the sole and exclusive right to enter an agreement with the owner of Phase I of the CCRWP to purchase up to all of the potable water produced by Phase I of the CCRWP (Water Purchase Agreement) on commercially reasonable terms. MPWMD may exercise its right to enter the Water Purchase Agreement at any time beginning on the date the Option is terminated under this section 4.1 and until sixty (60) days following issuance of a Coastal Development Permit for the CCRWP. The design and operation of the CCRWP shall accommodate Phase I of the Desalination Plant and facilitate exercise of the MPWMD Option and the MPWMD right to enter the Water Purchase Agreement.
