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3.4.3 During the first month after the objection to items of the Annual O&M Budget, the Participants shall pursue the dispute resolution procedures found in Section 5.15 of the Restated Contract. 3.4.4 If the Participants are still at an impasse one month after the vote objecting to item of the Annual O&M Budget, the Managing Participant shall procure a mediator acceptable to a majority of the Participants by weighted vote. If the Participants reach no agreement after mediation, then the amounts established above shall continue for the remainder of the Budget year unless amended by the majority of Participants by weighted vote, including the Managing Participant. All Participants shall make payment to the mediator as an O&M Expense. 3.4.5 As used herein "weighted vote" means a system of voting under which each Participant's vote is weighted in proportion to the amount of water it has taken in the prior 12 months under the Restated Agreement. Thus, for example, if A has taken 10% of all the water taken under the Restated Agreement, A is entitled to 10% of the voting strength. For voting purposes, no Participant's shall count for more than 49% regardless of the amount of water taken. ARTICLE VIII. COSTS FOR WATER LINE UPGRADE OR REPLACEMENT It is anticipated that it will be necessary to replace one or more water lines joining the Treated Water Transmission Facilities to the points of delivery of many of the Participants due to an order of the Texas Department of Transportation that some of such facilities be removed from State right-of-way or easement or other upgrade/replacement of the lines. Costs for any such replacements, including the cost of real estate and right-of-way are the responsibility of the Participants using the affected water line, and the Managing Participant shall charge the H.\EWB\SOUTHE.DOC 14 9/19/2006