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EXHIBIT 10.7
WATER SALE AGREEMENT
This Water Sale Agreement ("Agreement"), entered as of the Effective
Date, is made by and between WESTERN WATER COMPANY, a Delaware corporation,
("Western Water"), and SANTA XXXXXXXXX WATER DISTRICT, a California water
district ("Santa Xxxxxxxxx") (Western Water and Santa Xxxxxxxxx sometimes
hereinafter are referred to collectively as the "Parties" and individually as a
"Party"), with respect to the following facts:
R E C I T A L S
A. The purpose of this Agreement is to provide for the sale and delivery
of water by Western Water to Santa Xxxxxxxxx.
B. Santa Xxxxxxxxx has a need to minimize its costs for water and improve
the reliability of its water supply.
C. Western Water is in the business of acquiring by option, lease and/or
purchase water and water rights, and it has rights to water available for sale
and delivery to Santa Xxxxxxxxx.
D. Western Water now desires to sell and Santa Xxxxxxxxx now desires to
buy water under the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the foregoing recitals, of the
mutual covenants and conditions herein contained, and for other good and
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the Parties hereby agree as follows:
OPERATIVE PROVISIONS
1. Sale of Water. Subject to all of the terms and provisions of
this Agreement, Western Water hereby agrees to sell Santa Xxxxxxxxx 10,000
acre-feet of water each year during the Term (as defined in Section 2 below).
2. Term. The term ("Term") of this Agreement shall commence on
the Effective Date (as defined in Section 10 below) and shall continue for a
period of ten (10) years or until June 30, 2007, whichever is earlier.
3. Payments.
3.1 Initial Payment. Santa Xxxxxxxxx shall pay to Western
Water the sum of $250.00 for each acre-foot of water delivered through June 30,
1998 by Western Water to Santa Xxxxxxxxx at the point of delivery specified in
the Plan of Delivery (prepared in accordance with Section 4.4 below).
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3.2 Adjustments to Payments. Commencing July 1, 1998 and
continuing on the same day of each year thereafter during the Term, the price
per acre-foot in effect for the Water Year (defined in Section 4.4 below) just
ended of water delivered by Western Water shall be increased by the amount of
any dollar increase in the treated, non- interruptible water rate (the "Met
Rate") of the Metropolitan Water District of Southern California
("Metropolitan"). In no event, however, shall the price per acre foot be
decreased, even if the Met Rate should decrease during the preceding twelve (12)
months.
3.3 Metropolitan Water Rates. If the Met Rate is discontinued
or Metropolitan changes the current Met Rate by breaking it into component
parts, the Parties agree to identify and use an alternative index that most
closely matches the Met Rate at the time of such discontinuance or change.
3.4 Take-if-Delivered Contract. Santa Xxxxxxxxx acknowledges
and agrees that this Agreement is a "take-if-delivered" contract for the
purchase of water from Western Water during each year of the Term. Payments made
by Santa Xxxxxxxxx shall be based upon the quantity of water delivered to the
Xxxxx Flood Control Basin ("Xxxxx"). Santa Margarita's payments shall be based
on the quantity delivered multiplied by the price per- acre-foot in effect at
the time of delivery, calculated in accordance with Sections 3.1 through 3.3
hereof, unless the Parties otherwise agree in writing.
3.5 Time and Manner for Payments. Payment shall be made by
Santa Xxxxxxxxx to Western Water within fifteen (15) days following the receipt
of an invoice therefor. This payment obligation arises at the time of delivery
without regard to when Santa Xxxxxxxxx in fact does or is entitled to take or
make use of the water. All payments shall be paid to Western Water at the same
address as notices are to be delivered pursuant to Section 9.4 of this
Agreement. Western Water shall invoice Santa Xxxxxxxxx upon delivery of water to
Xxxxx, but not more frequently than monthly.
3.6 Delinquent Payments. All payments by Santa Xxxxxxxxx to
Western Water under this Agreement, if not received within fifteen (15) days
after the same is due, shall bear interest at the lesser of the rate of twelve
percent (12%) per annum or the maximum rate permitted by law (collectively the
"Applicable Interest Rate"), from the date due until payment is received by
Western Water. Santa Xxxxxxxxx also shall pay to Western Water a fee in the
amount of five percent (5%) of any overdue amount to compensate Western Water
for the administrative costs incurred as a result of Santa Margarita's failure
to pay on time, if such overdue amount is not received by Western Water within
five (5) days after the same is due.
3.7 Unconditional Obligation. Subject only to Section 4.3,
Santa Margarita's obligation to pay all amounts due under this Agreement for
water delivered by Western Water in accordance with this Agreement is an
absolute and unconditional obligation of Santa Xxxxxxxxx, not subject to
deduction, set off, prior notice, demand, changes or
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fluctuations in demand or price of water, or inability of Santa Xxxxxxxxx to
accept delivery of water, or to use, store or resell water after delivery
thereof by Western Water.
3.8 Additional Imported Water. If, following the expiration of
the Term, Santa Xxxxxxxxx determines it has a need for imported water in any
Water year, then, prior to contacting or responding to unsolicited inquiries
from suppliers of water other than Western Water, Santa Xxxxxxxxx shall notify
Western Water. Promptly thereafter, Western Water and Santa Xxxxxxxxx shall meet
and confer in good faith to determine whether Western Water can supply such
imported water to Santa Xxxxxxxxx on mutually acceptable terms and conditions.
If the Parties are unable to agree on mutually acceptable terms and conditions,
then Santa Xxxxxxxxx shall so notify Western Water in writing, and thereafter,
Santa Xxxxxxxxx shall be free to contact or respond to inquiries from other
suppliers of water to arrange for the purchase of imported water in that Water
Year. The Parties' inability to agree on mutually acceptable terms and
conditions in one Water Year shall not excuse Santa Margarita's compliance with
the terms of this Section 3.8 if it determines it has a need for imported water
in any subsequent Water Year.
4. Delivery of Water.
4.1 Best Efforts. Western Water shall use its best efforts to
deliver up to 10,000 acre-feet of water annually to Santa Xxxxxxxxx pursuant to
the approved Plan of Delivery.
4.2 Requirement to Purchase. Santa Xxxxxxxxx is required to
purchase all water delivered by Western Water to Xxxxx that meets the quality
standard set forth in Section 4.7 hereof.
4.3 Delivery Point. Xxxxx shall be the delivery point
("Delivery Point") for the water.
4.4 Plan of Delivery. Each year during the Term of this
Agreement, Western Water shall provide to Santa Xxxxxxxxx, an operations plan
("Plan of Delivery") setting forth the details (including without limitation the
timing of water deliveries, the quantity of water to be delivered and the
Delivery Point) concerning the water to be delivered by Western Water during the
ensuing year, which for purposes of this Agreement shall commence on July 1 and
continue until June 30 (severally a "Water Year"), for the use and benefit of
Santa Xxxxxxxxx.
4.4.1 Partial Water Year. During the partial Water Year
commencing on the Effective Date and continuing until June 30, 1998, Western
Water shall deliver water to Santa Xxxxxxxxx without a Plan of Delivery.
4.4.2 Santa Xxxxxxxxx Delivery Plan. On or before March 1,
1998, and thereafter on or before March 1 of each year during the Term (except
for the final year
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of the Term, or the Extension Term), Western Water shall submit for Santa
Margarita's approval a Plan of Delivery for water to be delivered by Western
Water to Santa Xxxxxxxxx for the next Water Year.
4.4.3 Approval Procedure. A Plan of Delivery shall be
deemed approved unless, within thirty (30) days after Santa Xxxxxxxxx receives a
Plan of Delivery, Santa Xxxxxxxxx gives Western Water written notice of
disapproval, specifying in reasonable detail Santa Margarita's reasons for
disapproval and the particular items of which it disapproves. Within fourteen
(14) days after receipt of Santa Margarita's notice of disapproval, and after
consultation with Santa Xxxxxxxxx, Western Water shall submit to Santa Xxxxxxxxx
a new proposed Plan of Delivery or appropriate portions thereof. The same
procedure shall be followed until the Plan of Delivery is finally approved by
Santa Xxxxxxxxx as to all items, except that the applicable response periods for
both Santa Xxxxxxxxx and Western Water shall be fourteen (14) days. Until final
approval, the portions of the Plan of Delivery that Santa Xxxxxxxxx has approved
shall become effective, and, for items as to which Santa Margarita's approval is
still pending, the Plan of Delivery for the preceding Water Year shall remain in
effect. Western Water may, from time to time during the Water Year, propose
amendments to the Plan of Delivery and submit amendments to Santa Xxxxxxxxx in
accordance with this Section 4.4. Upon approval, the amended Plan of Delivery
shall be in force to the end of the Water Year or until further amendments,
whichever first occurs.
4.5 Quantity of Water. The Plan of Delivery shall set forth:
(a) the minimum and maximum amounts of water estimated to be delivered by
Western Water for use by Santa Xxxxxxxxx; (b) the proposed monthly delivery
schedule measured in cubic feet per second (subject to restrictions or
limitations imposed by governmental agencies having jurisdiction over the
transport, delivery and storage of the water); (c) Xxxxx as the Delivery Point;
and (d) the establishment at the Delivery Point of the metering devices
necessary to enable Western Water to measure the water delivered to Santa
Xxxxxxxxx.
4.6 Permits.
4.6.1 Western Water's Responsibility. Western Water shall
be responsible for obtaining all permits and entitlements and approvals
(collectively the "Permits") to enable it to make water available to Santa
Xxxxxxxxx pursuant to the Plan of Delivery.
4.6.2 Santa Xxxxxxxxx Cooperation. Santa Xxxxxxxxx shall
cooperate with Western Water in its efforts to secure all necessary Permits,
including joinder in applications as necessary to carry out the purposes of this
Agreement.
4.6.3 Santa Margarita's Responsibility. Santa Xxxxxxxxx
shall obtain all necessary Permits, and pay all costs and expenses incurred
after delivery in connection with, further transport, the spreading, injection,
storage, percolation or production or use of
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water delivered by Western Water. Written confirmation of such authority
together with copies of such Permits, shall be provided by Santa Xxxxxxxxx prior
to the initial commencement of deliveries.
4.7 Water Quality. All water delivered by Western Water to
Santa Xxxxxxxxx shall meet and comply with all applicable water quality
standards established and required by: (a) 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 (b) any other state, county, or local agency having jurisdiction to
fix minimum standards for the quality of water discharged to the Santa Ana
River.
4.8 Conveyance Losses. Western Water shall be responsible only
for water losses incurred in the conveyance of water from its source to the
Xxxxx or alternate, mutually agreeable point of delivery.
4.9 No Consequential Damages. Western Water shall have no
liability to Santa Xxxxxxxxx for consequential damages, incidental damages,
special damages, or any other damages relating to the delivery or non-delivery
of water if Western Water is unable for any reason to deliver water in the
amounts or manner specified in, or pursuant to, the Plan of Delivery.
4.10 Force Majeure. If deliveries of water under the
provisions of this Agreement are prevented, delayed, or made impracticable due
to extended drought, flood, fire, earthquake, or other natural disaster, strike,
unavailability of necessary materials, electrical power or fuel, civil rioting,
war or military conflict, Western Water shall not be required to deliver that
portion of the water the delivery of which has been prevented, delayed or made
impracticable, for the period of prevention, delay or impracticability. Water
not delivered timely as a result of such prevention, delay or impracticability
shall be delivered to Western Water on a make-up basis on a schedule to be
reasonable and agreed upon by the Parties, and the Term of this Agreement shall
be extended by a period of time equal to the total number of days of such
prevention, delay or impracticability.
4.11 Condition Precedent to Obligation of Santa Xxxxxxxxx.
Santa Margarita's obligations under this Agreement are conditioned upon Santa
Xxxxxxxxx obtaining the rights to exchange or store water (the "Storage or
Exchange Rights") in the Orange County Groundwater Basin (the "Basin") for its
own account within ninety (90) days of the date this Agreement is fully-executed
by the Parties hereto. Santa Xxxxxxxxx shall use its best efforts, in good
faith, to obtain Storage or Exchange Rights in the Basin. If Santa Xxxxxxxxx is
unable to obtain Storage or Exchange Rights within ninety (90) days of the date
this Agreement is fully-executed by the Parties hereto, then this Agreement
shall automatically terminate and be of no further force or effect. Western
Water shall cooperate with Santa Xxxxxxxxx in obtaining Storage or Exchange
Rights in the Basin.
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5. Assignment.
5.1 Transfer by Western Water. From and after the Effective
Date, Western Water, at any time, without the consent of Santa Xxxxxxxxx, may
assign, delegate, encumber, pledge, hypothecate or otherwise transfer
(collectively a "Transfer") all or any portion of Western Water's interest in
this Agreement. Without limiting the generality of the foregoing, from and after
the Effective Date, Western Water, at any time, without the consent of Santa
Xxxxxxxxx, may: (a) conditionally or absolutely Transfer all or any of its
interest in this Agreement in favor of any lender of Western Water lending money
in connection with this Agreement; and (b) contract with a third party to
monitor or perform any or all of Western Water's duties or obligations
hereunder.
5.2 Attornment. If Western Water's lender brings any
proceedings for foreclosure, or exercises any of its rights or obligations under
any absolute or conditional Transfer of this Agreement made in favor of such
lender, Santa Xxxxxxxxx shall attorn to the lender upon any such foreclosure or
exercise of rights under conditional or absolute Transfer and recognize such
lender as the party assuming Western Water's obligations under this Agreement.
5.3 Santa Xxxxxxxxx Consolidation. This Agreement shall not be
terminated by the voluntary or involuntary dissolution of Santa Xxxxxxxxx or by
any merger, reorganization or consolidation where Santa Xxxxxxxxx is not the
surviving or resulting entity, or upon any transfer of all or substantially all
of the assets of Santa Xxxxxxxxx. In the event of any such dissolution, merger,
reorganization, consolidation, or transfer of assets, the terms and provisions
of this Agreement shall be binding on and shall obligate the surviving or
resulting district, authority, agency, corporation, partnership, joint venture,
limited liability company, public entity or other form of organization or
association to which such assets shall be transferred or which is carrying on
the business of Santa Xxxxxxxxx.
6. Defaults and Remedies.
6.1 Defaults. The occurrence of any of the following shall
constitute a material default and breach of this Agreement by Santa Xxxxxxxxx:
6.1.1 Failure to Pay. Santa Margarita's failure to make
any payments required under this Agreement as and when due, where such failure
shall continue for a period of thirty (30) days after the date due;
6.1.2 Failure to Perform. Santa Margarita's failure to
take delivery of water provided by Western Water under the provisions of this
Agreement;
6.1.3 Failure to Indemnify. Santa Margarita's failure to
honor and perform its indemnity of Western Water in accordance with Section 8.1
of this Agreement;
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6.1.4 Representations and Warranties. If any
representation or warranty, or other information in this Agreement or any other
document supplied at any time by Santa Xxxxxxxxx to Western Water in connection
with this Agreement was, when made or supplied, materially untrue or omitted to
state any material fact necessary to make such information not misleading;
6.1.5 Failure to Pay Debts When Due. Santa Margarita's
failure to pay its debts as they become due, and for purposes of this Section, a
debt shall be deemed overdue when the earliest of the following occurs: (a)
thirty (30) days from the date a statement for such debt is rendered; (b) the
date on which any action or proceeding for such debt is commenced; or (c) the
date on which a formal notice of default or demand is sent;
6.1.6 Bankruptcy. The making by Santa Xxxxxxxxx of any
general arrangement or assignment for the benefit of creditors; Santa
Margarita's becoming bankrupt, insolvent or a "debtor" as defined in the United
States Bankruptcy Code or any successor statute (unless, in the case of a
petition filed against Santa Xxxxxxxxx, such petition is dismissed within thirty
(30) days after its original filing); the institution of proceedings under the
bankruptcy or similar laws in which Santa Xxxxxxxxx is the debtor or bankrupt;
the appointing of a trustee or receiver to take possession of substantially all
of Santa Margarita's assets or of Santa Margarita's interest in this Agreement
(unless possession is restored to Santa Xxxxxxxxx within thirty (30) days after
such taking); the attachment, execution or judicial seizure of substantially all
of Santa Margarita's assets or Santa Margarita's interest in this Agreement
(unless such attachment, execution or judicial seizure is discharged within
thirty (30) days after such attachment, execution or judicial seizure).
6.2 Western Water's Remedies. If Santa Xxxxxxxxx commits a
default or breach and such default or breach remains uncured for any cure period
expressly provided for herein, then, in addition to all other remedies that
Western Water may have at law or in equity, which remedies shall be cumulative
in addition to any remedies provided in this Agreement, Western Water, may sell
the water on the "spot market." The Parties acknowledge and agree a sale or
lease on the "spot market" means that Western Water shall sell or lease the
water to a willing buyer or willing lessee for such period of time agreed to by
such willing buyer or willing lessee. If Western Water elects to sell all or any
portion of the water, any consideration that Western Water receives from such
sale shall be applied to the payment of, in the following order and priority:
(a) any payments due from Santa Xxxxxxxxx to Western Water; (b) all costs
(including attorneys' fees and costs) incurred by Western Water in such resale;
and (c) any other payments due and unpaid under this Agreement. If after selling
the water as aforesaid, the consideration received by Western Water as a result
of such sale is less than the sum of the payments plus all other amounts due
from Santa Xxxxxxxxx to Western Water under this Agreement, then, upon demand by
Western Water, Santa Xxxxxxxxx shall be liable for and obligated to pay to
Western Water the deficiency, together with interest thereon at the Applicable
Interest Rate from the date such payments and other sums were due until the
deficiency amount is received by Western Water. After applying such
consideration in the order referred to above, any sum remaining
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from the consideration Western Water receives from such resale shall be and
belong solely to Western Water. In no event shall Santa Xxxxxxxxx be entitled to
any excess consideration received by Western Water. If such sale or lease on the
"spot market" is for a period of time that is less than the remainder of the
Term, then upon the expiration of the term of any sale or lease on the "spot
market," and provided Santa Xxxxxxxxx is not then in default or breach
hereunder, Santa Xxxxxxxxx again shall become entitled to the use of the water
in accordance with all of the terms and conditions of this Agreement.
7. Representations and Warranties.
7.1 Representations and Warranties of Santa Xxxxxxxxx. Santa
Xxxxxxxxx makes the following representations, warranties and covenants to
Western Water:
7.1.1 Municipal Power and Authority. Santa Xxxxxxxxx has
the right, power and authority to enter into this Agreement and to perform its
obligations hereunder, and the person(s) executing this Agreement on behalf of
Santa Xxxxxxxxx has (have) the right, power and authority to do so. Without
limiting the generality of the foregoing, Santa Xxxxxxxxx has taken all steps
necessary and obtained all approvals necessary to purchase imported water from
Western Water and to accept delivery of such imported water in accordance with
the terms and provisions of this Agreement.
7.1.2 Enforceability. This Agreement constitutes the
legal, valid and binding obligation of Santa Xxxxxxxxx enforceable against Santa
Xxxxxxxxx in accordance with its terms.
7.1.3 No Litigation. There is no suit, action or
arbitration, or legal, administrative, or other proceeding, formal or informal,
pending or threatened, which affects Santa Margarita's ability to purchase water
from Western Water and accept delivery thereof as contemplated by this
Agreement.
7.1.4 No Conflict. The execution, delivery and performance
of this Agreement shall not breach or constitute a default under, any law,
regulation, ruling, court order, agreement, indenture, undertaking or other
instrument, to which Santa Xxxxxxxxx is a party or by which Santa Xxxxxxxxx or
any of its property may be bound or affected.
7.1.5 Governmental Consents. The execution, delivery and
performance of this Agreement by Santa Xxxxxxxxx do not require the consent or
approval of, or other action by or filing with, any local, state or federal
governmental body or other regulatory authority and are not in contravention or
in conflict with existing California or federal law or regulations as presently
in effect and interpreted, having applicability to Santa Xxxxxxxxx, or any term
or provision of this Agreement.
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All representations, warranties and covenants of Santa Xxxxxxxxx in
this Agreement are made as of the date of this Agreement, and as of each payment
hereunder, and shall survive the termination of this Agreement.
7.2 Representations and Warranties of Western Water. Western
Water makes the following representations, warranties and covenants to Santa
Xxxxxxxxx:
7.2.1 Due Organization. Western Water is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware, qualified to do and doing business in the State of
California.
7.2.2 Corporate Power and Authority. Western Water has the
right, power and authority to enter into this Agreement and to perform its
obligations hereunder, and the person(s) executing this Agreement on behalf of
Western Water has (have) the right, power and authority to do so.
7.2.3 Enforceability. This Agreement constitutes the
legal, valid and binding obligation of the Western Water enforceable against
Western Water in accordance with its terms.
7.2.4 No Litigation. There is no suit, action or
arbitration, or legal, administrative, or other proceeding, formal or informal,
pending or threatened, which affects Western Water's ability to sell and deliver
water to Santa Xxxxxxxxx as contemplated by this Agreement.
7.2.5 No Conflict. The execution, delivery and performance
of this Agreement by Western Water shall not breach or constitute a default
under, or grounds for the acceleration of the maturity of, any agreement,
indenture, undertaking or other instrument, to which Western Water is a party or
by which Western Water or any of its property may be bound or affected.
7.2.6 Governmental Consents. The execution, delivery and
performance of this Agreement do not require the consent or approval of, or
other action by or filing with, any local, state or federal governmental body or
other regulatory authority and are not in contravention or in conflict with
existing California or federal law or regulations as presently in effect and
interpreted, having applicability to Western Water, or any term or provision of
this Agreement.
All representations, warranties and covenants of Western Water in
this Agreement are made as of the date of this Agreement, and as of each payment
hereunder, and shall survive the termination of this Agreement.
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8. Indemnity.
8.1 Santa Margarita's Indemnity. Western Water shall not be
liable to Santa Xxxxxxxxx for any loss or damage to person or property caused by
theft, fire, act of God, acts of a public enemy, riot, strike, insurrection,
war, court order, requisition or order of governmental body or authority, or
other causes, or any damage or inconvenience which may arise from or relate to
use of the water after delivered by Western Water. Santa Xxxxxxxxx shall save,
indemnify, hold harmless and defend (with counsel acceptable to Western Water),
Western Water, its successors, assigns and affiliates, and their respective
officers, directors, controlling persons (if any), employees, attorneys, agents,
consultants and shareholders (the "Western Water Indemnitees") from, against and
in respect of any and all claims, suits, actions, proceedings (formal and
informal), investigations, judgments, deficiencies, damages, settlements,
liabilities, and legal and other expenses (including legal fees and expenses of
attorneys chosen by the Western Water Indemnitees) as and when incurred by any
of the Western Water Indemnitees arising out of or based upon any breach or
alleged breach of any express representation, warranty, covenant, or agreement
of Santa Xxxxxxxxx contained in this Agreement or in any document, instrument,
or agreement executed and delivered by Santa Xxxxxxxxx in connection herewith or
any loss or damage or alleged loss or damage to person or property related in
any way to the water delivered by Western Water pursuant to this Agreement after
delivery thereof.
8.2 Western Water's Indemnity. Western Water shall save,
indemnify, hold harmless and defend (with counsel acceptable to Santa
Xxxxxxxxx), Santa Xxxxxxxxx, its successors, assigns and affiliates, and their
respective officers, directors, controlling persons (if any), employees,
attorneys, agents, consultants and shareholders (the "Santa Xxxxxxxxx
Indemnitees") from, against and in respect of any and all claims, suits,
actions, proceedings (formal and informal), investigations, judgments,
deficiencies, damages, settlements, liabilities, and legal and other expenses
(including legal fees and expenses of attorneys chosen by the Santa Xxxxxxxxx
Indemnitees) as and when incurred by any of the Santa Xxxxxxxxx Indemnitees
arising out of or based upon Western Water's purchase of water for delivery to
Xxxxx; provided, however, that: (a) nothing contained in this Section 8.2 is or
shall be deemed or construed to be an indemnity by Western Water in favor of
Santa Xxxxxxxxx for any claims, suits, actions, proceedings (formal and
informal), investigations, judgments, deficiencies, damages, settlements,
liabilities, and legal and other expenses (including attorneys' fees and
expenses) arising out of or based upon Western Water's failure to deliver water
to Santa Xxxxxxxxx; and (b) Western Water, in its sole and absolute discretion,
may terminate this Agreement (but not its obligations under this Section 8) upon
thirty (30) days written notice to Santa Xxxxxxxxx should Western Water, in its
reasonable judgment, determine that its liability under this Section 8.2 will be
excessive.
8.3 Defense of Claims. No right to indemnification under this
Section shall be available to any Western Water Indemnitee or any Santa
Xxxxxxxxx Indemnitee unless the Party seeking indemnification (the "Indemnified
Party") shall have given to the Party obligated to provide indemnification (the
"Indemnitor") to such Indemnified Party a notice (a
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"Claim Notice") describing in reasonable detail the facts giving rise to any
claim for indemnification hereunder promptly after receipt of knowledge of the
facts upon which such claim is based. Any delay or failure to so notify the
Indemnitor shall relieve the Indemnitor of its obligations hereunder only to the
extent, if at all, that it is prejudiced by reason of such delay or failure.
Upon receipt by the Indemnitor of a Claim Notice from an Indemnified Party with
respect to a claim of a third party, such Indemnitor may assume the defense
thereof with counsel reasonably satisfactory to the Indemnified Party and the
Indemnified Party shall cooperate in the defense or prosecution thereof and
shall furnish such records, information, and testimony and attend all such
conferences, discovery proceedings, hearings, trials and appeals as may be
reasonably requested by the Indemnitor in connection therewith. If the
Indemnitor assumes such defense as provided above, then: (a) the Indemnified
Party shall have the right to employ its own counsel in any such case, but the
fees and expenses of such counsel shall be at the expense of the Indemnified
Party; and (b) the Indemnitor shall have the right, in its sole discretion, to
settle any claim for which indemnification has been sought and is available
hereunder, provided the Indemnified Party is fully released from all known and
unknown claims of such third party and the Indemnified Party is not obligated to
perform any actions or pay any money on account of such settlement. If the
Indemnitor does not assume such defense as provided above, then: (a) the
Indemnified Party shall have the right to employ its own counsel in any such
case, and the fees and expenses of such counsel shall be at the expense of
Indemnitor; and (b) the Indemnified Party shall have the right, in its sole
discretion, to settle any claim for which indemnification has been sought and is
available hereunder at the expense of Indemnitor.
8.4 Survival of Indemnity. Western Water's and Santa
Margarita's rights and obligations under, and the terms and provisions of, this
Section 8 shall survive the termination of this Agreement.
9. Miscellaneous Provisions.
9.1 Further Actions. At any time and from time to time after
the date hereof, each of the Parties agrees to take such actions and to execute
and deliver such documents as each of the other Parties may reasonably request
to effectuate the purposes of this Agreement.
9.2 Amendment. Neither this Agreement nor any provision hereof
may be waived, modified, amended, discharged, or terminated except by an
instrument in writing signed by the Party against which the enforcement of such
waiver, modification, amendment, discharge or termination is sought, and then
only to the extent set forth in such writing.
9.3 Entire Agreement. This Agreement and the agreements
provided for herein constitute the entire understanding among the Parties with
respect to the matters set forth herein and supersede all prior or
contemporaneous understandings or agreements among the Parties with respect to
the subject matter hereof, whether oral or written.
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9.4 Notices. Any notice, approval, consent, waiver or other
communication required or permitted to be given or to be served upon any of the
Parties in connection with this Agreement shall be in writing. Such notice shall
be personally served, sent by facsimile, telegram, or cable, or sent prepaid by
registered or certified mail with return receipt requested, or sent by reputable
overnight delivery service, such as Federal Express, and shall be deemed given:
(a) if personally served, when delivered to the Party to whom such notice is
addressed; (b) if given by facsimile, telegram, or cable, when sent; (c) if
given by prepaid or certified mail with return receipt requested, on the date of
execution of the return receipt; or (d) if sent by reputable overnight delivery
service, such as Fall deliver or send such confirmation by any of the other
means of delivery set forth in this Section, within forty-eight (48) hours after
notice was sent by facsimile, telegram or cable. Such notices shall be addressed
to the Party to whom such notice is to be given at the Party's address set forth
below or as such Party shall otherwise direct in a writing to all other Parties
delivered or sent in accordance with this Section.
If to Santa Santa Xxxxxxxxx Water District
Xxxxxxxxx, Attn: Xxxx X. Xxxxxx, General Manager
then to:
Mailing Address:
X.X. Xxx 0000
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000-0000
Office Location:
00000 Xxxxxxx Xxxxxxx
Xxxxxx Xxxxx Xxxxxxxxx, Xxxxxxxxxx 00000-0000
Phone: (000) 000-0000
Fax no.: (000) 000-0000
If to Western Western Water Company
Water, then to: Attn: Xxxx X. Xxxxxxx, Vice President
0000 Xx Xxxxx Xxxxxxx Xxxxx, Xxxxx 000
Xxx Xxxxx, Xxxxxxxxxx 00000
Phone: (000) 000-0000
Fax no.: (000) 000-0000
9.5 Controlling Law. This Agreement shall be governed by,
construed and interpreted in accordance with the laws of the State of
California, without giving effect to any choice-of-law or conflicts-of-laws rule
or principle that would result in the application of any other laws.
9.6 Headings. Headings, titles and captions are for
convenience only and shall not constitute a portion of this Agreement or be used
for the interpretation thereof.
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9.7 Cumulative Rights; Waiver. The rights created under this
Agreement, or by law or equity, shall be cumulative and may be exercised at any
time and from time to time. No failure by any Party to exercise, and no delay in
exercising any rights shall be construed or deemed to be a waiver thereof, nor
shall any single or partial exercise by any Party preclude any other or future
exercise thereof or the exercise of any other right. Any waiver of any provision
or of any breach of any provision of this Agreement must be in writing, and any
waiver by any Party of any breach of any provision of this Agreement shall not
operate as or be construed to be a waiver of any other breach of that provision
or of any breach of any other provision of this Agreement. The failure of any
Party to insist upon strict adherence to any term of the Agreement on one or
more occasions shall not be considered or construed or deemed a waiver of any
provision or any breach of any provision of this Agreement or deprive that Party
of the right thereafter to insist upon strict adherence to that term or
provision or any other term or provision of this Agreement. No delay or omission
on the part of any of the Parties in exercising any right under this Agreement
shall operate as a waiver of any such right or any other right under this
Agreement.
9.8 Liberal Construction. This Agreement constitutes a fully
negotiated agreement among commercially sophisticated Parties, each assisted by
legal counsel, and the terms of this Agreement shall not be construed or
interpreted for or against either Party hereto because that Party or his or its
legal representative drafted or prepared such provision.
9.9 Severability. If any provision of this Agreement is
invalid, illegal or unenforceable, such provision shall be deemed to be severed
or deleted from this Agreement and the balance of this Agreement shall remain in
full force and effect notwithstanding such invalidity, illegality or
unenforceability.
9.10 Good Faith and Fair Dealing. The Parties hereto
acknowledge and agree that the performances required by the provisions of this
agreement shall be undertaken in good faith, and with both Parties dealing
fairly with each other.
9.11 No Third Party Beneficiaries. Subject to Sections 5 and
8, this Agreement does not create, and shall not be construed to create, any
rights enforceable by any person, partnership, corporation, joint venture,
limited liability company or other form of organization or association of any
kind that is not a party to this Agreement.
9.12 Execution in Counterparts; Facsimile Signatures. This
Agreement may be executed in counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument. The signature page of any counterpart may be detached therefrom
without impairing the legal effect of the signature(s) thereon, provided such
signature page is attached to any other counterpart identical thereto except
having additional signature page(s) executed by one or more of the other
Parties. Each of the Parties agrees that each of the other Parties may rely upon
the facsimile signature of any party on this Agreement as constituting a duly
authorized, irrevocable, actual, current
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delivery of this Agreement as fully as if this Agreement contained the original
ink signature of the Party or Parties supplying a facsimile signature.
9.13 Time of the Essence. Time is of the essence of each and
every provision of this Agreement. Unless business days are expressly provided
for, all references to "days" herein shall refer to consecutive calendar days.
If any date or time period provided for in this Agreement is or ends on a
Saturday, Sunday or federal, state or legal holiday, then such date shall
automatically be extended to the next day which is not a Saturday, Sunday or
federal, state or legal holiday.
9.14 Attorneys' Fees. Should any Party to this Agreement
reasonably retain counsel for the purpose of enforcing any provision of this
Agreement, including without limitation instituting any action or proceeding to
enforce any provision of this Agreement, for damages or injunctive or other
relief by reason of any alleged breach of any provision of this Agreement, for a
declaration based on a demonstrated necessity of such Party's rights or
obligations under this Agreement, or for any other judicial or equitable remedy,
then if the matter is settled by judicial or quasi-judicial determination
(including arbitration, if such arbitration is agreed to by the Parties), the
prevailing Party or Parties shall be entitled, in addition to such other relief
as may be granted, to be reimbursed by the losing Party or Parties for all costs
and expenses incurred, including without limitation all attorneys' fees and
costs for services rendered to the prevailing Party or Parties and any
attorneys' fees and costs incurred in enforcing any judgment or order entered.
The prevailing Party or Parties shall be determined by the court (or arbitrator,
if arbitration is agreed to by the Parties) in the initial or any subsequent
proceeding.
10. Effective Date. The effective date ("Effective Date") of this
Agreement shall be the closing date for the financing, arranged by or on behalf
of Western Water, pursuant to which Western Water is raising funds sufficient to
purchase the water to be sold to Santa Xxxxxxxxx under this Agreement. When the
Effective Date is determined, the Parties shall execute a memorandum setting
forth the date thereof.
IN WITNESS WHEREOF, this Agreement has been executed as of the
Effective Date.
"Western Water"
Western Water Company, a Delaware
corporation
Date: ________________ By:_____________________________
Title:_____________________
[SIGNATURES CONTINUED ON NEXT PAGE]
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"Santa Xxxxxxxxx"
Santa Xxxxxxxxx Water District, a
California water district
Date: ________________ By:_____________________________
Title:_____________________
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