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EXHIBIT 10.8
WATER PURCHASE AGREEMENT
1. IDENTIFICATION.
THIS AGREEMENT is executed as of June ____, 1997, by and between
ELSINORE VALLEY MUNICIPAL WATER DISTRICT, a municipal water district ("EVMWD")
and WESTERN WATER COMPANY, a corporation ("WESTERN WATER").
2. RECITALS.
2.1 The purpose of this Agreement is to provide for the sale and
delivery of water by EVMWD to WESTERN WATER for the temporary period hereinafter
provided, and to set forth the terms and conditions under which said water shall
be sold and delivered.
2.2 EVMWD represents that it has properly determined that it has
water available to sell to WESTERN WATER.
2.3 WESTERN WATER is a water resource company engaged in the
business of acquiring, owning, developing and marketing water supplies and water
rights. WESTERN WATER represents that it desires to purchase water from EVMWD.
NOW, THEREFORE, in reliance upon the above recitals and in
consideration of the mutual covenants and promises of the parties hereinafter
set forth, it is agreed as follows:
3. AGREEMENT.
3.1 Term of Agreement.
The term of this Agreement, unless sooner terminated in accordance
with the provisions herein, is for ten (10) years, which term shall commence
July 1, 1997, and continue through June 30, 2006.
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3.2 Minimum Purchase Obligation of Western Water.
WESTERN WATER hereby purchases, and EVMWD hereby sells and agrees to
deliver to WESTERN WATER, as hereinafter provided, during the term of this
Agreement not less than forty thousand (40,000) acre-feet of water, with not
less than four thousand (4,000) acre-feet delivered each year during the term of
this Agreement.
3.3 Payment for Minimum Sale and Purchase Obligation.
(a) For each acre-foot of water provided by EVMWD in any one
contract year, WESTERN WATER shall pay EVMWD at the rate of one hundred
forty-five dollars ($145.00).
(b) Beginning July 1, 1998, and on the same day of each year
during the term of this Agreement, the per acre-foot cost of water provided by
EVMWD to WESTERN WATER shall be adjusted by three and one-half percent (3.5%).
(c) WESTERN WATER shall pay EVMWD for water delivered within
thirty (30) days after delivery of such water and receipt of an invoice therefor
from EVMWD.
3.4 Additional Water.
(a) When additional water is available, subject to use for
existing customers upon execution of this Agreement, WESTERN WATER shall have
the first right of refusal for up to an additional two thousand (2,000)
acre-feet (the "Additional Acre-Feet") of water delivered by EVMWD during each
year of the term of this Agreement. Each year during the term that EVMWD desires
to sell Additional Acre-Feet, EVMWD shall notify WESTERN WATER in writing.
WESTERN WATER shall have thirty (30) days from receipt of EVMWD's notice to
notify EVMWD in writing that WESTERN WATER agrees to purchase the Additional
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Acre-Feet on the terms and conditions contained in this Agreement. If WESTERN
WATER elects not to purchase the Additional Acre-Feet during any year of the
term of this Agreement, then EVMWD may sell to a third party the Additional
Acre-Feet available for sale during that year.
(b) For each additional acre-foot of water above the minimum
obligation, WESTERN WATER shall pay the rate specified in Paragraph 3.3
(c) WESTERN WATER shall pay EVMWD for additional water delivered
above the minimum obligation within thirty (30) days after delivery of such
water and receipt of an invoice therefor from EVMWD.
3.5 Source of Water.
The water which EVMWD is obligated to sell and deliver to
WESTERN WATER may be provided from any source available to EVMWD.
3.6 Delivery of Water.
(a) Subject to availability and capacity, EVMWD shall deliver
water to WESTERN WATER at such times and in such quantities as is requested from
time to time by WESTERN WATER. EVMWD shall use its reasonable efforts to
commence delivery of water as requested for delivery. If at the time specified
by WESTERN WATER for delivery of water there is or there is expected to be
insufficient availability or capacity to make such delivery, EVMWD shall
promptly so advise WESTERN WATER, stating the reason for such lack of
availability or capacity, and EVMWD shall continue to make all reasonable
efforts to schedule and make delivery of the requested water as soon as
possible.
(b) No delivery of water shall be made during periods of rain.
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(c) The water sold and delivered hereunder shall be discharged
by EVMWD to the Xxxxx Flood Control Basin ("Xxxxx"), at which point ownership of
and title to the water will pass to WESTERN WATER.
(d) EVMWD will obtain, prior to delivery, all necessary permits,
licenses or authorizations necessary to transport the water to Xxxxx.
3.7 Measurement of Water Delivered
(a) EVMWD shall provide WESTERN WATER with an accounting of
water delivered to Xxxxx to support an invoice of payment. EVMWD shall determine
the method and facilities necessary to provide measurement of water delivered to
WESTERN WATER.
(b) WESTERN WATER may at all reasonable times, and at its option
and its own expense, inspect, examine and test the flow measurement facilities
used by EVMWD to measure the delivery of water to WESTERN WATER by a designated
employee or agent.
(c) EVMWD shall assume and bear the burden of all losses of
water attributable to evaporation, evapotranspiration and other causes during
the course of transmission and until it is delivered to WESTERN WATER at Xxxxx.
The parties agree that losses due to evaporation and evapotranspiration will
amount to three percent (3%) between the point of measurement upstream and its
delivery at Xxxxx. Accordingly, EVMWD shall be credited with only ninety-seven
percent (97%) of the quantity of water measured at said flow meter facility with
respect to any delivery of water, and it shall be obligated to discharge such
additional quantity of water as will restore to the transmission facilities for
delivery to WESTERN WATER said agreed loss of three percent (3%) of the water so
measured.
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3.8 Adjustments for Errors in Measurements of Water.
If at any time an error is discovered in the measurement of
deliveries of water, whether due to a malfunction of the flow meter in the
measurement facility or to a mathematical calculation, appropriate adjustments
shall be made in the amounts of water credited to EVMWD as having been delivered
to WESTERN WATER.
3.9 Quality of Water
(a) All water delivered by EVMWD pursuant to this Agreement
shall meet and comply with all water quality standards established and required
by the State of California, Department of Health Services, for the applicable
constituents in municipal drinking water excluding microbiological parameters;
and by the State of California Regional Quality Control Board, Santa Ana River
Region, Resolution No. 94-1 and the State Water Resources Control Board,
Resolution No. 94-60, pursuant to the Santa Ana River Basin (8) Water Quality
Control Plan published by the Santa Xxx Regional Water Quality Control Board, or
by any modification of said Resolutions or Basin plan; and by any other state,
county or local agency having jurisdiction to fix minimum standards for the
quality of water discharged to the Santa Ana River or its tributaries (including
Temescal Creek) or stored in the Orange County Groundwater Basin.
(b) EVMWD and WESTERN WATER shall agree on an independent third
party which shall be contracted to collect samples for water quality analysis.
Said analysis shall be conducted by an independent, licensed laboratory mutually
agreeable to EVMWD and WESTERN WATER. During the first three days of any new
water stream which is delivered to WESTERN WATER, a sample of water, together
with water temperature, shall be acquired at the point of delivery and submitted
for analysis required for municipal drinking water.
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Results of the analysis shall promptly be provided to EVMWD and to WESTERN WATER
for review.
(c) In the event that delivered water flows continuously for
more than four (4) weeks, another sample shall be taken and analyzed four (4)
weeks after the new water stream began. In the event that delivered water flows
continuously thereafter, regular water quality sampling and analysis shall occur
at bi-monthly intervals for as long as continuous water flows are delivered to
WESTERN WATER.
(d) If water delivered by EVMWD does not meet the requirements
of subparagraph (a) of Paragraph 3.9 above, then all deliveries of water
hereunder shall cease immediately. Deliveries of water shall not be recommenced
until the parties are in agreement that the water to be delivered will meet and
comply with all applicable water quality standards.
3.10 Adjustments for Delivery of Water of Unacceptable Quality.
If upon any test of the quality of the water being delivered it
is found that the water is not in substantial compliance with the quality
standards referred to in subparagraph (a) of Paragraph 3.9 above, EVMWD shall
not be credited with delivery of such water.
3.11 Repair and Maintenance Obligations.
It shall be the duty and obligation of EVMWD, at its sole
expense (a) to maintain in good operating condition, and to repair or replace,
if necessary, the flow measurement facilities described in Paragraph 3.7 above,
and (b) to properly maintain and repair all facilities used to carry water for
delivery to WESTERN WATER hereunder.
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3.12 Annual Accounting for Deliveries.
(a) Excluding deliveries of water pursuant to Paragraph 3.4
above, if at the end of any contract year EVMWD shall have delivered more water
to WESTERN WATER than it is obligated to deliver under this Agreement, then,
absent some other mutual arrangement by the parties, the amount of water which
EVMWD is obligated to deliver to WESTERN WATER for the following contract year
shall be reduced by the amount of such excess deliveries. If during the last
year of the term EVMWD shall have delivered more water to WESTERN WATER than it
is obligated to deliver under the terms of this Agreement, then WESTERN WATER
shall pay for such excess water at the rate specified in Paragraph 3.3 above.
(b) If at the end of any contract year EVMWD shall not have
delivered to WESTERN WATER the quantity of water that it is obligated to have
delivered by such date, WESTERN WATER shall request the delivery of the amount
of such deficiency as soon as it can be delivered.
3.13 Termination of Agreement by WESTERN WATER.
If EVMWD shall at any time during the term of this Agreement,
for any reason, be unable, or be unwilling without just cause, to comply further
with its obligations under this Agreement, or if it shall at any time breach
this Agreement in a material way by failing to provide and deliver water to
WESTERN WATER in the quantities required of it hereunder, or at the times
required hereunder, or of the quality required hereunder, and if it shall fail
to cure any breach within a reasonable period of time thereafter, the sole
remedy available to WESTERN WATER against EVMWD shall be to terminate this
Agreement by written notice to EVMWD, and such termination shall not give rise
to any damages claim.
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3.14 Fees, Expenses and Costs Incurred Prior to Agreement.
Each party shall be responsible for its own fees and expenses
incurred in connection with the negotiations for and the making and approval of
this Agreement. This shall include, but not be limited to, attorney, consultant
and administrative fees and expenses.
3.15 Fees, Expenses and Costs Incurred During Term of Agreement.
WESTERN WATER shall pay up to Fifty Thousand Dollars ($50,000)
or fifty percent (50%) of the cost, whichever is less, for the physical
improvements needed by EVMWD to deliver water pursuant to this Agreement.
WESTERN WATER shall pay EVMWD for its share of the cost of such physical
improvements within thirty (30) days after receipt of an invoice, with
appropriate backup documentation, detailing the physical improvements
constructed and the total cost therefor, as of the date of such invoice. WESTERN
WATER shall not compensate or reimburse EVMWD for any additional fees, costs or
expenditures it makes or incurs relating to or arising out of its performance of
its obligations hereunder, other than payment for additional water delivered
pursuant to a request made under Paragraph 3.4 above.
3.16 Representations and Warranties.
(a) EVMWD hereby represents and warrants as follows:
i) It reaffirms that it has the production capacity to
provide not less than four thousand (4,000) acre-feet of water to WESTERN WATER
each year for the term of this Agreement.
ii) It reaffirms that it has the capability and legal
authority to deliver the four thousand (4,000) acre-feet to WESTERN WATER as a
customer of EVMWD.
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(b) Each of the parties makes the following representations and
warranties to the other party:
i) The persons who have executed this Agreement have been
authorized to do so by the party on whose behalf the party is signing. All
documents to be delivered under this Agreement will be executed by an authorized
person. Each party has a good and legal right to enter into this Agreement and
to perform all covenants of that party contained herein.
ii) None of the warranties, representations or statements
made by any party to this Agreement, including those made in the above recitals,
contains any untrue statement of material fact or omits a material fact
necessary to make the statements not misleading. All representations and
warranties of any party shall be true on and as of the date that this Agreement
is executed.
3.17 Successors and Assigns.
This Agreement shall be binding upon and inure to the benefit
of the successors and assigns of the parties. Neither party may delegate any of
its duties or obligations hereunder without the prior written consent of the
other party. Although EVMWD has the right to assign its rights under this
Agreement, it shall in any such event remain liable as a guarantor of all duties
and obligations imposed upon it by this Agreement. Any assignment of this
Agreement shall be effective only if the assignee assumes the duties and
obligations of the assignor in writing duly executed and delivered by the
assignor to the other party.
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3.18 Attorneys' Fees.
In the event of any litigation between the parties hereto
seeking to enforce or to interpret rights under this Agreement, or seeking
damages for breach of this Agreement, the party prevailing in such litigation,
on trial or appeal, shall, in addition to such other relief as may be awarded or
granted by the court, be entitled to a reasonable sum as and for its attorneys'
fees incurred in prosecuting or defending such litigation, such sum to be fixed
by the court. Such attorneys' fees and costs shall be included in and as a part
of any judgment or decree entered in the action.
3.19 Confidentiality.
All information and data, as well as all documents, provided
by one party to the other for the purpose of negotiating this Agreement, shall,
together with all information, data and documents provided by one party to the
other during the term of this Agreement or until its earlier termination, shall
be regarded as strictly confidential. Such information, data and documents shall
not be disclosed to third parties except as may be required by law or be
necessary to carry out an obligation of the party under this Agreement.
3.20 Notices.
All notices and other communications authorized or required
under this Agreement shall be in writing and shall be given by (a) personal
delivery, (b) mailing by certified mail or registered mail, return receipt
requested, postage prepaid, or by United States Express Mail, or (c) delivery by
commercially-recognized courier service. Any such notice or other communication
shall be deemed to have been given on the date of delivery or of a refusal to
accept delivery, if addressed as follows:
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Attn.: General Manager
Elsinore Valley Municipal Water District
00000 Xxxxxx Xxxxxx
Xxxx Xxxxxx Xxx 0000
Xxxx Xxxxxxxx, Xxxxxxxxxx 00000
Attn.: Xxxx X. Xxxxxxx, Vice President
Western Water Company
0000 Xx Xxxxx Xxxxxxx Xxxxx, Xxxxx 000
Xxx Xxxxx, Xxxxxxxxxx 00000
3.21 Entire Agreement.
This Agreement contains the entire agreement between the
parties pertaining to the subject matter. It supersedes all prior and
contemporaneous agreements, representations and understandings of the parties.
No supplement, modification or amendment of this Agreement shall be binding and
enforceable unless executed in writing by both parties.
3.22 Waiver.
No waiver of any provision of this Agreement shall constitute
or be deemed to be a waiver of any other provision, whether or not similar, nor
shall any waiver constitute a continuing waiver. No waiver shall be binding
unless it is executed in writing by the party making the waiver.
3.23 Applicable Law.
This Agreement shall be governed by and interpreted, construed
and enforced in accordance with the laws of the State of California.
3.24 Captions.
The captions to the paragraphs of this Agreement are inserted
for convenience only and shall not affect the intent or interpretation of this
Agreement.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first set forth above.
WESTERN WATER COMPANY ATTEST:
By:_____________________________ _______________________________
Xxxxx X. Xxxxxx Secretary
Chairman of the Board and
President
"WESTERN WATER"
ELSINORE VALLEY MUNICIPAL ATTEST:
WATER DISTRICT:
By:______________________________ _______________________________
(Name) Secretary
______________________________
(Title)
"EVMWD"
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