HomeMy WebLinkAboutContracts & Agreements_109-2003_CCv0001.pdf MOUNTAINVIEW
POWER COMPANY, LLC
A SOUTHERN CALIFORNIA EDISON* Company
September 14, 2005
Municipal Utilities Director
City of Redlands
35 Cajon Street, Suite 15A
Redlands, CA 92373
By US Mail
Subject: Mountainview Power Company, LLC
Notice of Address Change and Contact Changes
Reference: Reclaimed Water Supply Agreement by and between Mountainview Power
Company, LLC and City of Redlands, June 3, 2003
MVLN# 280
Dear Mr. Director:
As per the Reclaimed Water Supply Agreement, dated June 3, 2003, this letter provides
Notice by Mountainview Power Company, LLC (MVL) that there is a change in MVL's mailing
address and other contact information and that the contacts have changed for all Notices and
other communications covered in Section 7.4 of the Agreement.
First, regarding the change of address and other contact information, MVL's new contact
information is:
Mountainview Power Company, LLC
2492 West San Bernardino Avenue
Redlands, CA 92374
Reception Number: 909 478 1758
FAX Number: . 478 1743
2492 WEST SAN BERNADENO AVE.REDLANDS,CA 92374
Page 1 of 2
RECLAIMED WATER SUPPLY AGREEMENT
by and between
MOUNTAINVIEW POWER COMPANY, LLC
and
CITY OF REDLANDS
Dated as of June 3, 2003
TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS 1
ARTICLE II SUPPLY OF RECLAIMED WATER 4
SECTION 2.1 RECLAIMED WATER SUPPLY 4
SECTION 2.2 COMPENSATION 6
SECTION 2.3 SERVICE INTERRUPTIONS 6
SECTION 2.4 NON-CONFORMING RECLAIMED WATER 7
ARTICLE III PIPELINE, SIGNAL INDICATOR AND REAL ESTATE RIGHTS...................................8
SECTION 3.1 CONCERNING THE SIGNAL INDICATOR AND THE PIPELINE. 8
SECTION 3.2 OPERATION AND MAINTENANCE OF THE PIPELINE AND SIGNAL INDICATOR. ...............................9
SECTION 3.3 CAPITAL IMPROVEMENTS TO THE PIPELINE. _..... ......... ................................ 9
ARTICLE IV ADDITIONAL OBLIGATIONS OF THE PARTIES 10
SECTION 4.1 ADDITIONAL OBLIGATIONS OF REDLANDS........ ... ................................... 10
ARTICLE V FORCE MAJEURE 11
SECTION 5.1 FORCE MAJEURE 11
ARTICLE VI TERM 11
SECTION 6.1 TERM. 11
SECTION 6.2 EARLY TERMINATION FOR EVENT OF DEFAULT 12
ARTICLE VII MISCELLANEOUS 13
SECTION 7.1 ENTIRE AGREEMENT,AMENDMENTS, ETC 13
SECTION 7.2 AssioNmENT. 13
SECTION 7.3 COOPERATION IN FINANCING 13
SECTION 7.4 NOTICES, ETC 13
SECTION 7.5 SEVERABILITY....... ...... ............ ....... ................................ 14
SECTION 7.6 BINDING EFFECT 14
SECTION 7.7 GOVERNING EA1A: 14
SECTION 7.8 HEADINGS 14
SECTION 7.9 EXECUTION IN COUNTERPARTS 14
SECTION 7.10 WAIVER OF JURY TRIAI 14
SECTION 7.11 WAIVER OF SOVEREIGN IMMUNITY 14
SECTION 7.12 INDEMNITY 15
SECTION 7.13 SALT CREDITS
SECTION 7.14 ATTORNEYS' FEES
ARTICLE VIII REPRESENTATION AND WARRANTIES OF THE PARTIES 15
SECTION 8.1 REPRESENTATIONS AND WARRANTIES OF REDLANDS 15
SECTION 8.2 REPRESENTATIONS AND WARRANTIES OF MOUNTAINVIEW 16
50289.000077 WASHINGTON 333300v8
RECLAIMED WATER SUPPLY AGREEMENT
RECLALMED WATER SUPPLY AGREEMENT (this "Agreement"), dated as of June
3, 2003, by and between Mountainview Power Company, LLC ("Mountainview") and the City
of Redlands ("Redlands"). Both Mountainview and Redlands are hereinafter sometimes
referred to as a"Party" and, collectively, as the "Parties".
WHEREAS, Mountainview is developing a power generation facility (as further defined
below, the "Project") which will provide substantial benefits for the State of California and the
Redlands area;
WHEREAS, Redlands is constructing and will own and operate a water reclamation
facility (as further defined below, the "Redlands Facility") for the handling, treatment and
delivery of reclaimed water which meets and is anticipated to continue to meet all applicable
governmental requirements (such treated water, as further defined below, "Reclaimed Water");
WHEREAS, Redlands and Mountainview have entered into that certain Development
Agreement, effective as of October 24, 2000 (as in effect from time to time, the "Development
Agreement"), relating to the Project; and
WHEREAS, Redlands is willing to provide and Mountainview is willing to accept, in
each case pursuant to the terms of this Agreement, Reclaimed Water;
NOW THEREFORE, the Parties hereto, for good and valuable consideration the receipt
and sufficiency of which is hereby acknowledged, do hereby agree as follows:
ARTICLE I
DEFINITIONS
"Bankruptcy Code" means the Bankruptcy Reform Act of 1978, Title II of the United
States Code, as amended, and any other applicable law with respect to bankruptcy, insolvency or
reorganization that is successor thereto.
"Bankruptcy Event" means, in respect of any Person, (a) such Person shall (i) apply for
or consent to the appointment of, or the taking of possession by, a receiver, custodian, trustee or
liquidator of itself or of all or substantially all of its property, (ii) admit in writing its inability, or
be generally unable, to pay its debts as such debts become due, (iii) make a general assignment
for the benefit of its creditors, (iv) commence a voluntary case under the Bankruptcy Code or
any similar or corresponding insolvency law, (v) file a petition seeking to take advantage of any
law relating to bankruptcy, insolvency, reorganization, winding-up, or composition or
readjustment of debts, (vi) fail to controvert in a timely and appropriate manner, or acquiesce in
writing to, any petition filed against such Person in an involuntary case under the Bankruptcy
Code or any similar or corresponding insolvency law, or (vii) take any other action for the
purpose of effecting any of the foregoing; or (b) a proceeding or case shall be commenced
without the application or consent of such Person in any court of competent jurisdiction, seeking
(i) its liquidation, reorganization, dissolution, winding-up, or the composition or readjustment of
debts, (ii) the appointment of a trustee, receiver, custodian, liquidator or the like of such Person
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under any law relating to bankruptcy, insolvency, reorganization, winding-up, or composition or
adjustment of debts, and such proceeding or case shall continue undismissed, or any order,
judgment or decree approving or ordering any of the foregoing shall be entered and continue
unstayed and in effect, for a period of 90 or more consecutive days, or any order for relief against
such Person shall be entered in an involuntary case under the Bankruptcy Code or any similar or
corresponding insolvency law.
"Base Rate" has the meaning specified in Section 2.2(a).
"Business Day" means any day other than a Saturday, a Sunday or a day on which
banking institutions are authorized or obligated by law or executive order to close in the City of
New York or the State of California.
"Capital Improvements" means any new equipment or facilities, or replacement of
existing equipment or facilities (in either case such as force main piping or pumps) and related
items necessary to ensure that the Pipeline is capable of delivering Reclaimed Water to the
Delivery Point in the quantities specified in this Agreement.
"Commencement Notice" means a written notice from Mountainview to Redlands
delivered at the election of Mountainview at the later to occur of Substantial Completion of the
Project and the Redlands Facility being able to produce Reclaimed Water meeting the
requirements of this Agreement.
"Delivery Point" means the point immediately south of the Project on San Bernardino
Avenue where the Pipeline is physically connected to the Project, capable of delivering a
minimum of 3,500 gallons per minute of water to the Project, and at a minimum hydraulic grade
line of"maximum water level tank plus 10 feet."
"Development Agreement" has the meaning specified in the Recitals to this Agreement.
"Escalation Start Date" has the meaning specified in Section 2.2(c).
"Excess Reclaimed Water" has the meaning specified in Section 2.1(c).
"Financing Parties" shall mean those Persons (other than Mountainview) party to the
loan contracts, promissory notes, documents, guarantee contracts, mortgages, pledges,
subordination contracts, assignment contracts, subscription contracts, capital contribution
contracts and other documents related to the acquisition of debt (whether senior or subordinate)
and capital to carry out the Project, including any modification, extension, renewal, refinancing
or replacement of the same.
"Force Majeure" means an event beyond the reasonable control, and not attributable to
the negligence or willful misconduct, of the Party affected, including but not limited to the
following: flood; earthquake; storm; lightning; fire; explosion; xvar; riot; civil disturbance;
strike; sabotage; or electrical outage; provided, however, that Force Majeure shall not include
any equipment failure due to normal wear and tear or due to neglected maintenance or repair.
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"Governmental Approval" means any law, rule or regulation of any Governmental
Authority and any authorization, consent, approval, license, franchise, lease, ruling, permit
(including but not limited to any National Pollutant Discharge Elimination System (NPDES)
permit), tariff, rate, certification, exemption, filing or registration by or with any Governmental
Authority (including, without limitation, zoning variances, special exceptions and non-
conforming uses) relating to the construction, ownership, operation or maintenance of the
Project, the Pipeline or the Redlands Facility (including those relating to Reclaimed Water), as
the case may be.
"Governmental Authority" means the California Department of Health Services and
any national, federal, state, provincial, departmental or municipal government or any political
subdivision thereof, and any other entity exercising executive, legislative,judicial, regulatory or
administrative functions of or pertaining to government, and any other governmental entity with
authority over any aspect of the construction or operation of the Project, the Pipeline, the
Reclaimed Water or the Redlands Facility, but excluding in each case Redlands.
"Minimum Standards" means the minimum acceptable quality of Reclaimed Water
described in Exhibit "A" attached hereto and incorporated herein.
"Mountainview" has the meaning specified in the Recitals to this Agreement.
"Non-Conforming Notice" has the meaning specified in Section 2.4(a).
"Non-Conforming Reclaimed Water" means reclaimed water from the Redlands
Facility which would otherwise be Reclaimed Water but for its failure to meet all requirements
of applicable Governmental Approvals and the Minimum Standards.
"Parties" or"Party" has the meaning specified in the Recitals to this Agreement.
"Person" means any individual, corporation, partnership, limited liability company,joint
venture, incorporated or unincorporated association, joint stock company, trust, or other
unincorporated organization, governmental body, instrumentality or agency, or other entity of
any kind.
"Pipeline" means the approximately 3 mile pipeline, related pumphouse and ancillary
facilities required to connect the Delivery Point with the Redlands Facility for the purpose of
delivery of Reclaimed Water in accordance with this Agreement. The Pipeline will be
comprised of, among other things, an approximately 24" diameter pipe and related pumphouse
with a design capacity of 7,000 gallons per minute rate.
"Project" means the power generation facility to be constructed in Redlands, California,
including any water supply facilities installed by Mountainview on Mountainview's side of the
Delivery Point.
"Project Financial Closing" means the date Mountainview obtains an initial drawdown
on the financing for the construction of the Project. Mountainview agrees to provide written
notice to Redlands within thirty (30) days after Mountainview obtains such initial drawdown.
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"Real Estate Rights" means those interests in real estate of a recordable and insurable
nature, including but not limited to fee interests, easements and rights of way and any other
interests in real estate reasonably acceptable to Mountainview including revocable or irrevocable
licenses, necessary or desirable for the siting of the Pipeline.
"Reclaimed Water" means Reclaimed water provided from the Redland's Facility which
meets all applicable Governmental Approvals and the requirements described in Exhibit "A" and
is delivered through the Pipeline.
"Redlands"has the meaning specified in the Recitals to this Agreement.
"Redlands Facility" means the water reclamation facility owned and operated by
Redlands located in Redlands, California which will provide Reclaimed Water transported by
and through the Pipeline under and in accordance with the terms of this Agreement.
"Shortfall Notice" has the meaning specified in Section 2.1(a).
"Signal Indicator" means the real-time water tank level indicator signal located at or
near the Delivery Point.
"SoCal Index" means the consumer price index for Los Angeles-Riverside-Orange
County for a calendar year as published in the United States Department of Commerce, Bureau
of Economic Analysis publication entitled "Survey of Current Business".
"Substantial Completion" means the date that "Substantial Completion" of the Project
occurs or is deemed to have occurred under the engineering, construction and procurement
contract relating to the Project.
ARTICLE II
SUPPLY OF RECLAIMED WATER
SECTION 2.1 Reclaimed Water Supply.
(a) Subsequent to completion of the Pipeline and promptly following delivery of a
Commencement Notice and throughout the Term of this Agreement, Redlands shall use its best
efforts to make available to Mountainview by January 1, 2005, unless otherwise provided for in
Section 2.1(b) a daily quantity of Reclaimed Water of not less than 5.04 million gallons per day.
If Redlands is unable on any day to make available such daily minimum quantity of Reclaimed
Water, whether due to a shortage of Reclaimed Water, due to the presence of Non-Conforming
Reclaimed Water or otherwise. Redlands shall promptly (but in any event within 5 hours of
obtaining knowledge thereof) notify Mountainview orally (with prompt written confirmation
thereof) or in writing of such inability to provide the minimum daily quantity of Reclaimed
Water (a "Shortfall Notice"). Each Shortfall Notice shall specify (i) that a shortfall in the
delivery of Reclaimed Water has occurred or will occur, the amount of such shortfall, the reasons
for such shortfall and the anticipated length of such shortfall, including in each case all relevant
dates and (ii) the steps Redlands is taking to remedy the shortfall. Redlands shall undertake to
remedy such shortfall at its sole expense and as promptly as practicable.
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(b) All Reclaimed Water shall be provided at a pressure customary for similar service
and mutually agreed to by the Parties. Actual acceptances of Reclaimed Water by Mountainview
may be less than the maximum allowed and actual usage will, at the sole discretion of
Mountainview, vary according to the electric dispatch of the Project, weather conditions and
electrical outages (forced or scheduled). Mountainview shall also have the right to stop deliveries
of Reclaimed Water in the event that the water stored in the on-site storage tank on the site of the
Project is above the 50 percent level and Redlands shall act in such event to stop deliveries of
Reclaimed Water without additional notice from Mountainview. Title and risk of loss of
Reclaimed Water shall pass to Mountainview upon Mountainview's receipt of such Reclaimed
Water at the Delivery Point. Until such time as title to Reclaimed Water passes to
Mountainview, Redlands shall bear risk of loss of Reclaimed Water and shall retain liability for
any and all claims, costs, demands, damages, expenses, liabilities and losses relating to
Reclaimed Water or other discharges from the Redlands Facility.
(c) If Reclaimed Water is available from the Redlands Facility in an amount in excess
of 4,000 acre feet ("Excess Reclaimed Water") per year, Mountainview shall purchase the
Excess Reclaimed Water to the extent it can be utilized by Mountainview for any lawful purpose
and any acceptances of Excess Reclaimed Water shall be in accordance with the terms of this
Agreement, including but not limited to Section 2.2. The foregoing provisions of this Section
2.1(c) notwithstanding, Mountainview shall have the right at all times to utilize water from other
sources, including without limitation from wells located or controlled by Mountainview or its
affiliates.
(d) In the event that Redlands is unable in good faith to deliver the Reclaimed Water
by January 1, 2005, Redlands shall notify the California Energy Commission of its inability to so
deliver and the date, if any, by which Redlands anticipates that Reclaimed Water will be
delivered.
(e) During the period prior to the delivery of the Commencement Notice, Redlands
shall use its best efforts to deliver to the Delivery Point sufficient Reclaimed Water to support
the start-up, commissioning and testing of the Project and Mountainview shall pay Redlands the
variable portion of the Base Rate as contemplated by Section 2.1(b) for such volumes of
Reclaimed Water actually received at the Delivery Point. Unless otherwise agreed by Redlands,
the amount of Reclaimed Water to be delivered by Redlands pursuant to this Section 2.1(e) shall
not exceed 100 acre feet.
(0 Mountainview shall provide Redlands with an estimate of Reclaimed Water needs
every Friday prior to the following week's operation to assist Redlands in developing delivery
schedules for Reclaimed Water, and the Parties shall work together in good faith to coordinate
the timing of delivery of Reclaimed Water in accordance with such notice and the other terms of
this Agreement;provided, however that Mountainview shall be under no obligation to accept any
or all of the anticipated Reclaimed Water if Mountainview's actual demand for such is less than
the estimate provided to Redlands. Subject to the requirements of applicable Governmental
Approvals and prudent practice, Redlands shall use its best efforts to coordinate any transmission
of Reclaimed Water discharge so as to maximize the quantity of Reclaimed Water made
available to Mountainview with due regard to the timing of the Project's Reclaimed Water
requirements.
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(g) The foregoing provisions of this Section 2.1 notwithstanding, Redlands shall, at
all times during the Term, use its best efforts to meet Mountainview's Reclaimed Water
requirements.
SECTION 2.2 Compensation.
(a) Subject to Sections 2.2(c) and 3.2(c) below, Mountainview shall pay Redlands
monthly in accordance with Section 4.1(c) for all Reclaimed Water delivered to the Delivery
Point during the prior month. The base rate for Reclaimed Water (the "Base Rate") supplied
shall be according to the following schedule:
ACRE FEET S/PER ACRE FOOT
(GALLONS PER YEAR) (S/PER 1000 GALLONS)
0 - 4,000 5110.00
(0 - 1,303,315,200) ($0.337)
For Excess Reclaimed Water $60.00 ($0.184)
(b) The rates specified in Section 2.2(a) above are stated as of January 1, 2004 (the
"Escalation Start Date"). As of the Escalation Start Date, the variable portion of the Base Rate
shall be $60.00 per acre foot ($0.184 per 1000 gallons), with the remainder being the fixed
portion of the Base Rate. During the Term, the variable portion of the Base Rate shall be subject
to escalation on each anniversary of the June 1 of the year Reclaimed Water is delivered to the
Project in accordance with the SoCal Index (with 2004 being the base year), or if the parties so
elect, such other mutually agreeable escalation index.
(c) Notwithstanding Section 2.2(a) above, but subject to Section 2.4(b),
Mountainview shall take or pay for a minimum of 3,000 acre feet per year at the fixed portion of
the Base Rate, if the Reclaimed Water is deliverable by Redlands to the Delivery Point. Such
annual take or pay requirements shall be measured from the anniversary of the date of delivery of
the Commencement Notice, which shall occur, or be deemed to have occurred, no later than
September 30, 2005; provided, however that neither party shall be liable for their respective
inability to deliver or take such Reclaimed Water at any time prior to such date.
Notwithstanding the foregoing, in the event that delivery of Reclaimed Water to Mountainview
occurs after the date of delivery of the Commencement Notice, the annual take or pay obligations
set forth in this Section 2.2 shall be based on the later date.
SECTION 2.3 Service Interruptions.
Upon the event of a temporary interruption or curtailment in Reclaimed Water delivery
attributable to a break or leak in the Pipeline or otherwise, Redlands shall have a reasonable
period of time, not to exceed 18 hours from the commencement of the interruption or
curtailment, to make needed repairs and to restore full service. Redlands shall provide a
Shortfall Notice in accordance with Section 2.1(a) upon the interruption or curtailment of
Reclaimed Water under this Section. If Redlands fails to restore full service within such period
of time, the following provisions shall apply:
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(a) Mountainview shall have the right, but not the obligation, to contract with such
contractors as reasonably approved by Redlands from time to time to step in and remedy the
interruption or curtailment, with the good faith cooperation and under the direction of a Redlands
engineer or other duly appointed official of Redlands.
(b) All reasonable costs associated with the taking of actions under Section 2.3(a)
shall be borne by Redlands.
SECTION 2.4 Non-Conforming Reclaimed Water.
(a) Redlands and Mountainview shall mutually and in good faith cooperate to
designate a laboratory to be used for analyzing Reclaimed Water quality, at Redlands' sole
expense, prior to the commencement of deliveries of Reclaimed Water in order to analyze the
quality of the Reclaimed Water prior to, and as a condition to, Redlands' delivery of Reclaimed
Water to Mountainview. The Parties may, from time to time, designate in writing a successor or
replacement laboratory to conduct any analysis of Reclaimed Water under this Agreement.
(b) Either party may, from time to time, take samples of Reclaimed Water for the
purpose of analyzing the Reclaimed Water delivered or to be delivered under this Agreement. If
at any time during the Term, the Reclaimed Water is reasonably suspected by Redlands or
Mountainview to be Non-Conforming Reclaimed Water or any sample conducted pursuant to the
first sentence of this Section 2.4(b) indicates that Non-Conforming Reclaimed Water has been or
is to be delivered, a confirmation sample shall be collected and analyzed, at Redlands' sole
expense, at the laboratory chosen pursuant to Section 2.4(a). In the event that such confirmation
sample is determined to be Non-Conforming Reclaimed Water, (i) Redlands shall immediately
stop delivery of Reclaimed Water and shall, at its sole expense, take any and all corrective action
needed to conform the Reclaimed Water to the Minimum Standards and Governmental
Approvals and provide additional samples confirming that the Reclaimed Water meets the
Minimum Standards and Governmental Approvals and (ii) Mountainview shall be relieved of its
obligations to take Reclaimed Water under Section 2.2(c) and the annual minimum take or pay
obligations under this Agreement shall be reduced on a pro rata basis.
(c) If Redlands becomes aware that it has provided or will provide Non-Conforming
Reclaimed Water, Redlands shall promptly (but in any event within 5 hours of obtaining
knowledge thereof) notify Mountainview orally (with prompt written confirmation thereof) or in
writing (a "Non-Conforming Notice"). Each Non-Conforming Notice shall specify(i) the cause
of such Reclaimed Water being Non-Conforming Reclaimed Water and (ii) the steps Redlands is
taking to remedy the situation.
(d) Mountainview shall have the right to reject all Non-Conforming Reclaimed
Water. Redlands shall have the responsibility at its own cost and expense to accept and treat or
re-treat any Non-Conforming Reclaimed Water rejected by Mountainview. Redlands shall have
the responsibility at its own cost and expense to transport any Non-Conforming Reclaimed
Water Mountainview rejects back to the Redlands Facility through the Pipeline or to the nearest
available and practicable point of entry into Redlands waste water collection system or such
other disposal method elected by Redlands.
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(e) Any Non-Conforming Reclaimed Water accepted by Mountainview shall not be
subject to the rates in Section 2.2(a) above or any other payment obligations under this
Agreement, nor shall Redlands be entitled to any other form of compensation in respect of such
Non-Conforming Reclaimed Water.
(f) Redlands acknowledges and agrees that it shall be solely responsible to pay for, or
reimburse Mountainview to the extent Mountainview has paid for, all claims, costs, demands,
damages, expenses, increased operation and maintenance expenses or costs (including those
relating to the Project, the Pipeline or the Redlands Facility), liabilities and repairs or
replacement of equipment (including repairs or replacement of equipment of the Project, the
Pipeline or the Redlands Facility) arising, directly or indirectly, from the delivery of any Non-
Conforming Reclaimed Water under this Agreement unless the delivery of such Non-
Conforming Reclaimed Water was notified and accepted in accordance with the terms of this
Agreement.
ARTICLE III
PIPELINE, SIGNAL INDICATOR AND REAL ESTATE RIGHTS
SECTION 3.1 Concerning the Signal Indicator and the Pipeline.
(a) Mountainview shall be solely responsible, at its cost and expense, for purchasing
and installing the Signal Indicator. As soon as is reasonably practical following the execution of
this Agreement and from time to time thereafter as is reasonably necessary, the Parties shall meet
to discuss the final design and siting of the Signal Indicator. The Parties agree to cooperate in
good faith to effect the purposes of this Article.
(b) Redlands shall be solely responsible, at its cost and expense, for constructing and
installing the Pipeline and operating and maintaining the Signal Indicator. As soon as is
reasonably practical following the execution of this Agreement and from time to time thereafter
as is reasonably necessary, the Parties shall meet to discuss the final design and siting of the
Pipeline. The Parties agree to cooperate in good faith to effect the purposes of this Article.
(c) Redlands shall be solely responsible, at its cost and expense, for final design of
the Pipeline, the selection of the contractor to construct the Pipeline and the siting of the
Pipeline. Mountainview shall have the right to review and comment on the design of the
Pipeline, the selection of the contractor and the siting of the Pipeline and Redlands shall
incorporate those of Mountainview comments that it finds reasonable and in accordance with
prudent practice and applicable Governmental Approvals.
(d) Mountainview and Redlands shall cooperate in good faith to obtain the necessary
Real Estate Rights for the construction, operation and maintenance of and access to the Pipeline.
From time to time Mountainview and Redlands shall meet and discuss the siting of the Pipeline
and the course of action best suited to obtain such Real Estate Rights in the most time efficient
manner and with the least cost.
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SECTION 3.2 Operation and Maintenance of the Pipeline and Signal Indicator.
(a) Redlands shall operate and maintain the Pipeline and the Signal Indicator in a
good and workmanlike manner, consistent with prudent practices and shall continuously
maintain the Pipeline and the Signal Indicator in good operating condition and in compliance
with all Governmental Approvals applicable to the Pipeline and the Signal Indicator. Such
operation and maintenance by Redlands shall be accomplished in a manner so as to minimize to
the maximum extent practicable any disruption or interruption in the services to be provided
under this Agreement.
(b) Redlands shall install, own and maintain metering equipment to measure the
delivery of Reclaimed Water to the Delivery Point. The metering equipment shall transmit to
Mountainview and Redlands the daily amount of Reclaimed Water delivered to the Delivery
Point in accordance with this Agreement. At least once every year, or more frequently if
Mountainview reasonably requests, and with at least one week prior written notice to
Mountainview, Redlands shall test the accuracy of the metering equipment, at which time
Mountainview shall have the right to be present. If such test indicates that the metering
equipment is not measuring accurately, Redlands shall recalibrate or replace the metering
equipment and, if appropriate, a billing adjustment shall be made.
(c) Mountainview shall make available to Redlands such rights of access to its
property as may be reasonably necessary to allow Redlands to meet its obligations under this
Agreement in respect of the operation and maintenance of the Signal Indicator. Prior to
Redlands obtaining access to the property of Mountainview as described in this Section 3.2(c),
Redlands shall provide evidence reasonably acceptable to Mountainview that Redlands has in
place insurance coverage with reputable and credit worthy insurers sufficient to insure against
any risks that may be encountered in connection with such access.
SECTION 3.3 Capital Improvements to the Pipeline.
(a) Redlands shall bear costs and expenses in connection with the implementation of
the Capital Improvements to the Pipeline.
(b) In the event that Redlands or its agents causes damage to the property of
Mountainview (including but not limited to the Project) while constructing, installing, operating,
maintaining or repairing the Capital Improvements or the Pipeline, Redlands shall restore or pay
Mountainview to restore, at Mountainview's election, Mountainview's property or the Project as
nearly as possible to its condition prior to such damage. In the event that Mountainview causes
damage to the Capital Improvements or the Pipeline while constructing, installing, operating,
maintaining or repairing the Project, Mountainview shall restore or pay Redlands to restore, at
Redlands' election, the Capital Improvements or the Pipeline as nearly as possible to its
condition prior to such damage.
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ARTICLE IV
ADDITIONAL OBLIGATIONS OF THE PARTIES
SECTION 4.1 Additional Obligations of Redlands.
(a) Promptly upon obtaining knowledge thereof (but in any event within 5 hours of
obtaining knowledge thereof), Redlands shall provide Mountainview with oral (with prompt
written confirmation thereof) or written notice of any violation of applicable Governmental
Approvals relating to the Redlands Facility or the Pipeline.
(b) Promptly after submission thereof to the applicable Governmental Authority,
Redlands shall provide Mountainview with a copy of any report, filing, notice, request for
variance or similar document filed with or submitted to a Governmental Authority that relates to
the Redlands Facility and that may affect the delivery of Reclaimed Water under and in
accordance with this Agreement or the Pipeline.
(c) Not later than the fifteenth day of each month following the month in which
delivery of Reclaimed Water commences or at such other time as required in accordance with
this Agreement, Redlands shall provide to Mountainview a written invoice specifying in
reasonable detail (including the method of calculation of any amounts invoiced) the amount
claimed by Redlands from Mountainview in accordance with this Agreement, including amounts
under Sections 2.2, 3.2, and 3.3. Undisputed amounts set forth in any invoice shall be due and
payable by Mountainview not later than 20 days following receipt of such invoice.
(d) Redlands shall, upon prior written or oral request therefor, provide Mountainview,
the Financing Parties and each of their respective agents, consultants, advisors and
representatives with escorted access during normal business hours to the Redlands Facility, the
Pipeline and the other property of Redlands as may be reasonably requested in connection with
the development, financing, construction, operation and maintenance of the Project. Redlands
shall, upon prior written or oral request therefor, provide Mountainview, the Financing Parties
and each of their respective agents, consultants, advisors and representatives with access during
normal business hours to (and the right to reproduce) Redlands books and records relating
directly or indirectly to this Agreement and the performance of Redlands obligations hereunder
(including books and records relating to Governmental Approvals and compliance therewith) as
may be reasonably necessary in connection with the development, financing, construction,
operation and maintenance of the Project.
(e) Upon the reasonable request of Mountainview, Redlands shall, at the cost and
expense of Mountainview, execute such additional certificates, documents, instruments,
agreements and take such actions as may be reasonably required to give effect to the terms and
conditions of this Agreement.
(f) Not later than the fifteenth day of each month following the commencement of
delivery of Reclaimed Water or at such other time as required in accordance with this
Agreement, Mountainview shall provide to Redlands a written invoice specifying in reasonable
detail (including the method of calculation of any amounts invoiced) the amount claimed by
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Mountainview from Redlands in accordance with this Agreement. Undisputed amounts set forth
in any invoice shall be due and payable by Redlands not later than 30 days following receipt of
such invoice.
(g) Upon the reasonable request of Redlands, Mountainview shall, at its cost and
expense, execute such additional certificates, documents, instruments, agreements and take such
actions as may be reasonably required to give effect to the terms and conditions of this
Agreement.
ARTICLE V
FORCE MAJEURE
SECTION 5.1 Force Majeure.
If either Party shall be unable to carry out any obligation under this Agreement due to
Force Majeure, this Agreement shall remain in effect, but such obligation shall be suspended for
the period necessary as a result of the Force Majeure,provided, that:
(a) the non-performing Party gives the other Party written notice not later than
seventy-two (72) hours after the occurrence of the Force Majeure describing the particulars of
the Force Majeure, including but not limited to the nature of the occurrence and the expected
duration of the disability, and continues to furnish timely regular reports with respect thereto
during the period of Force Majeure and the disability;
(b) the suspension of performance is of no greater scope and of no longer duration
than is required by the Force Majeure; and
(c) the non-performing Party uses its best efforts to remedy its inability to perform.
Notwithstanding the foregoing, the settlement of strikes, lockouts, and other labor disputes shall
be entirely within the discretion of the affected Party, and such Party shall not be required to
settle any strike, lockout or other labor dispute on terms which it deems inadvisable.
ARTICLE VI
TERM
SECTION 6.1 Term.
(a) This Agreement shall take effect upon execution of the appropriate counterpart by
each Party and, except as provided in Section 6.1(b), Section 6.1(c) or Section 6.2 below, shall
remain in effect for a period of twenty (20) years (the "Term"). Mountainview may elect, in its
sole election, to extend this Agreement for one (1) or more (but in no event more than four (4))
successive five (5) year terms by providing written notice to that effect to Redlands not later than
six (6) months prior to the expiration of the then effective Term. All references in this
Agreement to the word "Term" shall mean the initial twenty (20) year Tenn as extended by
Mountainview and during the Term of this Agreement (as it may be extended) all the provisions
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of this Agreement shall remain in full force and effect; provided, that in respect of the
compensation provisions of this Agreement: (i) the variable portion of the Base Rate shall
continue to escalate in accordance with Section 2.2(b); (ii) the fixed portion of the Base Rate
(which is not subject to escalation pursuant to Section 2.2(b)) shall increase by 10% for each five
(5) year extension elected by Mountainview; and (iii) the take or pay requirements set forth in
Section 2.2(c) shall not apply to any extension elected by Mountainview.
(b) This Agreement may be terminated by Mountainview in its sole discretion (i) if
Mountainview is unable to obtain financing for the Project or (ii) if Mountainview is unable to
obtain all permits, licenses, and approvals necessary to construct and operate the Project.
Termination under this Section 6.1(b) shall be effective upon Redlands receipt of notice to that
effect.
(c) Either Party may terminate this Agreement if Mountainview has not delivered a
Commencement Notice by September 30, 2005. Notwithstanding the foregoing, in the event a
Commencement Notice is delivered prior to the delivery of written notice terminating this
Agreement under this Section 6.1(c), this Section 6.1(c) shall become inapplicable.
SECTION 6.2 Early Termination for Event of Default.
(a) Mountainview may terminate this Agreement (i) upon a Bankruptcy Event of
Redlands or (ii) if Redlands fails to perfolin or observe any of its material obligations under this
Agreement within the time contemplated by this Agreement and such failure continues for a
period of time greater than thirty (30) days from Redlands' receipt of notice thereof; provided,
that if Redlands is diligently pursuing a cure of such failure and such failure is not capable of
remedy within such thirty (30) day period, such thirty (30) day period shall be extended to such
period of time as Mountainview may agree in its sole discretion. For the avoidance of doubt, it is
understood that the failure to deliver Reclaimed Water to the Delivery Point shall be grounds for
early termination under this Section; provided, that if the failure to provide Reclaimed Water to
the Delivery Point is excused due to the occurrence of Force Majeure, Mountainview may only
terminate this Agreement if such Force Majeure continues for a period of time in excess of one
hundred twenty (120) days whether or not such failure is excused by the occurrence of such
Force Majeure.
(b) Redlands may terminate this Agreement (i) upon a Bankruptcy Event of
Mountainview or (ii) if Mountainview fails to perform or observe any of its material obligations
under this Agreement within the time contemplated by this Agreement and such failure continues
for a period of time greater than thirty (30) days from Mountainview's receipt of notice thereof;
provided, that if Mountainview is diligently pursuing a cure of such failure and such failure is
not capable of remedy within such thirty (30) day period, such thirty (30) day period shall be
extended to such period of time as Redlands may agree in its sole discretion. The foregoing
notwithstanding, Redlands may not terminate this Agreement without first giving the Financing
Parties written notice of Redlands intention to terminate this Agreement and giving such
Financing Parties an additional reasonable period of time (but in any event not less than an
additional 90 days) to remedy the event giving rise to the right of Redlands to terminate this
Agreement. Mountainview covenants and agrees to give written notice to Redlands concerning
the identities and contact information of the Financing Parties from time to time and Redlands
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shall only be obligated to provide the aforementioned notice to Financing Parties of which it has
received notice.
ARTICLE VII
MISCELLANEOUS
SECTION 7.1 Entire Agreement, Amendments, Etc.
This Agreement represents the entire agreement of the Parties hereto as to the matters
contained herein, and supercedes any and all other agreements, either verbal or in writing,
between the Parties with respect to the matters contained herein;provided that the Development
Agreement shall remain in full force and effect as set forth therein. No amendment or waiver of
any provision of this Agreement shall be effective unless in writing and signed or consented to
by the Parties and then such waiver shall be effective only in the specific instance and for the
specific purpose for which given.
SECTION 7.2 Assignment.
Neither Party may assign this Agreement without the prior written consent of the other
Party;provided, however, that Mountainview may assign this Agreement to any affiliate or to the
Financing Parties as collateral security or otherwise without the prior written consent of
Redlands.
SECTION 7.3 Cooperation in Financing.
Redlands agrees to cooperate from time to time with Mountainview and the Financing
Parties in connection with the financing of the Project. In furtherance thereof, Redlands agrees
to enter into such consents to assignments or other agreements as Mountainview or the Financing
Parties may reasonably request and Redlands agrees to provide such certificates from its officers
and such opinions of counsel (which may be outside counsel) as Mountainview or the Financing
Parties may reasonably request. Mountainview agrees to reimburse Redlands for any reasonable
costs and expenses incurred by Redlands in complying with its obligations under this Section
7.3, including the reasonable fees and expenses of counsel to Redlands.
SECTION 7.4 Notices, Etc.
All notices and other communications provided for hereunder shall be in writing
(including by telecopier) and shall be mailed, telecopied or delivered, if to Mountainview, to it at
25770 San Bernardino Avenue, San Bernardino, CA 92406, Attention: Project Manager and a
copy to General Counsel, 15 Wayside Road, Burlington, MA 01803, (Fax: 781-993-3122); if to
Redlands, to it at 35 Cajon St., Suite 15A, Attention: Municipal Utilities Director, (Fax: 909-
798-7670), as to each Party, to it at such other address or telecopier number as designated by
such Party in a written notice to the other Parties. All such notices and communications shall be
deemed received, (a) if personally delivered, upon delivery, (b) if sent by first class mail, on the
third business day following deposit into the mails and (c) if sent by telecopier, upon
acknowledgement of receipt thereof by the recipient.
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SECTION 7.5 Severability.
Any provision of this Agreement that is prohibited, unenforceable or not authorized in
any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition,
unenforceability or non-authorization without invalidating the remaining provisions of this
Agreement or affecting the validity, enforceability or authorization of such provision in any other
jurisdiction.
SECTION 7.6 Binding Effect.
This Agreement shall be binding upon and inure to the benefit of the Parties and their
respective successors and permitted assigns.
SECTION 7.7 Governing Law.
THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF CALIFORNIA WITHOUT
REFERENCE TO THE CONFLICT OF LAW PRINCIPLES THEREOF.
SECTION 7.8 Headings.
The section and subsection headings used herein have been inserted for convenience of
reference only and do not constitute matters to be considered in interpreting this Agreement.
SECTION 7.9 Execution in Counterparts.
This Agreement may be executed in any number of counterparts and by different Parties
hereto in separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same agreement.
SECTION 7.10 Waiver of Jury Trial.
THE PARTIES HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY
WAIVE THE RIGHT EACH MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER OR IN CONNECTION
WITH THIS AGREEMENT AND ANY AGREEMENTS CONTEMPLATED HEREBY TO BE
EXECUTED IN CONJUNCTION THEREWITH, OR ANY COURSE OF CONDUCT,
COURSE OF DEALING. STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS
OF EACH PARTY. THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE
PARTIES ENTERING INTO THIS AGREEMENT.
SECTION 7.11 Waiver of Sovereign Immunity
Each Party acknowledges and agrees that the activities contemplated under this
Agreement are commercial in nature rather than governmental or public, and therefore
acknowledges and agrees that, to the greatest extent permitted by applicable law, it is not entitled
to any right of immunity on the grounds of sovereignty or otherwise with respect to such
activities or in any legal action or proceeding arising in connection with this Agreement. Each
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Party, in respect of itself, its process agents, and its properties and revenues, expressly and
irrevocably waives, to the greatest extent permitted by applicable law, any such right of
immunity which may now or hereafter exist (including any immunity from any legal process,
from the jurisdiction of any court or from any execution or attachment in aid of execution prior
to judgment or otherwise) or claim thereto which may now or hereafter exist, and agrees not to
assert any such right or claim in any action or proceeding.
SECTION 7.12 Indemnity
(a) Mountainview shall defend, indemnify and hold harmless Redlands and its
elected officials, officers and employees, from and against any and all claims, causes of action,
damages or liability arising out of, or resulting from, the negligent acts or omissions of
Mountainview in the execution and delivery of this Agreement or performance of its obligations,
or Mountainview's use of Reclaimed Water pursuant to this Agreement.
(b) Redlands shall defend, indemnify and hold harmless Mountainview and the
Financing Parties and their respective officials, officers and employees, from and against any and
all claims, causes of action, damages or liability arising out of, or resulting from, the negligent
acts or omissions of Redlands in the execution and delivery of this Agreement or performance of
its obligations under this Agreement.
SECTION 7.13 Salt Credits.
Redlands shall have the right to take credit for any "salts" discharged into the Santa Ana
Regional Interceptor line from the Project.
SECTION 7.14 Attorneys' Fees.
In the event any action is commenced to enforce or interpret the terms or conditions of
this Agreement the prevailing party shall, in addition to any other costs and other relief, be
entitled to the recovery of its reasonable attorneys' fees.
ARTICLE VIII
REPRESENTATION AND WARRANTIES OF THE PARTIES
SECTION 8.1 Representations and Warranties of Redlands.
Redlands hereby represents and warrants to and for the benefit of Mountainview as
follows:
(a) Organization and Qualification. Redlands (i) is a governmental body, duly
organized and validly existing under the laws of the State of California, with full right, power
and authority under its charter documents and under the laws of the State of California to enter
into this Agreement, to perform its obligations hereunder and to consummate the transactions
contemplated hereby, and (ii) has the power to carry on its business as now being conducted and
as proposed to be conducted.
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(b) Authorization and Enforceability. Redlands has taken all necessary action to
authorize the transactions contemplated by this Agreement, including without limitation the
conduct of any public meetings, hearings or comment opportunities necessary or advisable under
applicable law or its charter documents. This Agreement has been duly executed and delivered
by Redlands and constitutes the legal, valid and binding obligation of Redlands enforceable in
accordance with its terms, except as the enforceability thereof may be limited by (i) bankruptcy,
insolvency, reorganization or other similar laws affecting the enforcement of creditors' rights
generally and (ii) general equitable principles regardless of whether the issue of enforceability is
considered in a proceeding in equity or at law.
(c) No Conflict. Neither the execution and delivery of this Agreement nor
compliance with any of the terms and provisions hereof (i) contravenes any Governmental
Approval applicable to Redlands or any of its respective properties or other assets, (ii) conflicts
with, breaches or contravenes the provisions of the charter documents of Redlands or any
contractual obligation of Redlands, or (iii) results in the creation or imposition of any lien upon
any of the property or assets of Redlands under, or in a condition or event that constitutes (or
that, upon notice or lapse of time or both, would constitute) an event of default under any
contractual obligation of Redlands.
(d) Governmental Approvals. No Governmental Approval is required (other than
those which have previously been obtained and are in full force and effect) to authorize, or is
required in connection with the execution and delivery of this Agreement by Redlands.
SECTION 8.2 Representations and Warranties of Mountainview.
Mountainview hereby represents and warrants to and for the benefit of Redlands as
follows:
(a) Organization and Qualification. Mountainview (i) is a limited liability company,
duly organized and validly existing under the laws of the state of its formation, with full right,
power and authority under its organizational documents and under the laws of the state of its
formation to enter into this Agreement, to perform its obligations hereunder and to consummate
the transactions contemplated hereby, and (ii) has the power to carry on its business as now
being conducted and as proposed to be conducted.
(b) Authorization and Enforceability. Mountainview has taken all necessary action to
authorize the transactions contemplated by this Agreement. This Agreement has been duly
executed and delivered by Mountainview and constitutes the legal, valid and binding obligation
of Mountainview enforceable in accordance with its terms, except as the enforceability thereof
may be limited by (i) bankruptcy, insolvency, reorganization or other similar laws affecting the
enforcement of creditors' rights generally and (ii) general equitable principles regardless of
whether the issue of enforceability is considered in a proceeding in equity or at law.
(c) No Conflict. Neither the execution and delivery of this Agreement nor
compliance with any of the terms and provisions hereof (i) contravenes any Governmental
Approval applicable to Mountainview or any of its respective properties or other assets, (ii)
conflicts with, breaches or contravenes the provisions of the organizational documents of
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Mountainview or any contractual obligation of Mountainview, or (iii) results in the creation or
imposition of any lien upon any of the property or assets of Mountainview
under, or in a
condition or event that constitutes (or that, upon notice or lapse of time or both, would con
an event of default under any contractual obliation of Mountainview.
(d) Governmental Approvals. No Governmental Approval is required (other than
those which have previously been obtained and are in full force and effect) to authorize, or is
required in connection with the execution and delivery of this Agreement by Mountainview.
17
IN WITNESS WHEREOF, the parties hereto have each caused this Agreement to be
executed by their duly authorized officers and attested on the date first above written.
MOUNTAIN VIEW POWER COMPANY, LLC
CITY OF REDLANDS
2
By: By:
Name: Karl N. Haws Nae: \ 4- &j F-9,37-ek
Title: Mayor Titiec
-L-Ajire-SFAI-CAjr5 et-
PCATF:01..f ArlitiAGEA-tr'iT
ATTEST:
By: 1 444
Nam . Lorne Powie
Title: City.Clerk
[RECLAIMED WATER SUPPLY AGREEMENT]
50289 000077 WASHINGTON 333300v8
EXHIBIT A
Minimum Standards
Item Description Value Units Comments
BOD5 <5 mg/1 90% of time
<10 m gil 100% of time
TSS <2 mg/1 90% of time
<5 mg/1 100% of time
Total Coliform <2.2 / 23
NH3-N <1 mg/1 90% of time
<2 mg/1 100% of time
Total Inorganic N <12 mg/1
TDS <500 mg/1
pH 6.5 — 8.5 S.U.
Chlorine Residual 0.5 mg/1 minimum
(Pipe Maintenance) 5.0 mg/1 spiking
COD <35 mg/1 90% of time
<45 mg/1 100% of time
PO4 <4 mg/1 90% of time
<5 mg/1 100% of time
Silica <25 mg/1 90% of time
<30 mg/1 100% of time
Temperature <90 degrees F
50289.000077 WASHINGTON 333300v8