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Ordinance No. 9,552ORDINANCE NO. 9552 ® AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF BAYTOWN, TEXAS, APPROVING THE WATER SUPPLY CONTRACT — TREATED WATER BETWEEN THE BAYTOWN AREA WATER AUTHORITY AND COUNTRY TERRACE WATER CO., INC.; AND PROVIDING FOR THE EFFECTIVE DATE THEREOF. ****************************************************** * * * * * * * * * * * * * * * * * * * * * * * * * * * * * ** WHEREAS, Country Terrace is located on Wallisville Road between Thompson Road and Wade Road and has a population of approximately 1,800 and 323 connections; and WHEREAS, on September 19, 2001, the Board of Directors of the Baytown Area Watei Authority ( "BAWA ") approved the Water Supply Contract — Treated Water (the "Contract ") with Country Terrace contingent upon a capital buy -in fee of $88,748 and approval from the City of Houston; and WHEREAS, on April 12, 2002, BAWA received a majority of the capital buy -in fee, namely $79,873; and WHEREAS, on November 25, 2002, the City of Houston approved the Contract; and WHEREAS, on December 18, 2002, the BAWA Board of Directors approved a payment arrangement for the balance of the capital buy -in fee of $8,875 over a one -year term; and WHEREAS, pursuant to Chapter 600, Acts of the 63`' Legislature, Regular Session, 1973, the City Council of the City of Baytown must approve the Contract; NOW THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF BAYTOWN, TEXAS: Section l: That the City Council of the City of Baytown, Texas, hereby approves the Water Supply Contract — Treated Water between the Baytown Area Water Authority and the Country Terrace Water Co., Inc. A copy of such contract is attached hereto as Exhibit "A," and incorporated herein for all intents and purposes. Section 2: This ordinance shall take effect immediately from and after its passage by the City Council of the City of Baytown. INTRODUCED, READ and PASSED by the affirmative vote of the City Council of the City of Baytown this the 10`h day of April, 2003. PETE C. ALFARO, M` yor ATTEST: Z W /A G :Y W. SMITE, City Clerk • APPROVED AS TO FORM: Gj pre 4KNACI0 RAMIREZ, SR. .ty Attorney F:\Karen\Files \City Council\ Ordinances\ ApproveBAWAContractWCountryTerrace.doc I Water Supply Contract -- Treated Water Country Terrace Water Co. STATE OF TEXAS COUNTY OF HARRIS This Water Supply Contract -- Treated Water, hereinafter referred to as the "Contract," is made and entered into on the date herein after last specified by and between the Baytown Area Water Authority, a governmental agency and a body politic and corporate of the State of Texas, created pursuant to Chapter 600, Acts of the 63rd Legislature, Regular Session, 1973, hereinafter referred to as `BAWA," and the Country Terrace Water Co., Inc., a Texas corporation having a mailing address of P.O. Box 24433, Houston, Texas 77229, hereinafter referred to as "CTW." WHEREAS, BAWA has the right under a contract with the City of Houston to buy untreated water from the City of Houston; and WHEREAS, BAWA has constructed and will continue to repair, construct and modify certain facilities to treat and deliver water to its customers at several points of delivery; and WHEREAS, CTW has constructed or contracted with BAWA to construct certain facilities to enable CTW to receive treated water from BAWA; and WHEREAS, BAWA desires to sell quantities of treated water to CTW; and WHEREAS, CTW, subject to the terms and conditions contained herein, desires to purchase from BAWA its treated water; and WHEREAS, BAWA and CTW have found, and do hereby find, that BAWA and CTW are authorized by the laws of the State of Texas to enter into a contract for the sale of water upon such terms and for the period of time hereinafter set forth; and WHEREAS, CTW is authorized to enter into a contract for the purchase of treated water from BAWA pursuant to Section 54.218 of the Texas Water Code; NOW THEREFORE, for and in consideration of the premises and the mutual covenants and agreements herein contained, the parties hereto do hereby mutually agree as follows: ARTICLE I DEFINITIONS Unless a different meaning or intent clearly appears from the context, the following words • and terms shall have the meanings specified in this Article, respectively: EMU A 1.01 "Act" means Chapter 600, Acts of the 63rd Legislature, Regular Session, 1973. 1.02 "BAWA Contract" means the Water Supply Contract between the City of Houston and Baytown Area Water Authority, dated October 24,1994, between BAWA, as buyer,-and the City of Houston, Texas, as seller, a copy of which is attached hereto and incorporated herein for all intents and purposes. 1.03 `Beginning Date" shall mean the date that CTW begins receiving treated water from BAWA under this Contract or the effective date hereof, whichever is later. Such date may occur after the effective date of this Contract as defined in Article IX. Provided, however, that if CTW does not begin receiving treated water within one year of the effective date hereof, BAWA shall be under no further obligation to supply CTW with treated water. 1.04 "CTW's Facilities" shall mean facilities constructed by CTW to enable CTW to receive treated water. 1.05 "Contract Quantity" shall mean the maximum quantity of treated water that BAWA agrees to reserve and sell to CTW pursuant to Section 2.01 herein. 1.06 "Contract Term" is defined in Article IX. 1.07 "General Manager" shall mean the General Manager of the Baytown Area Water Authority or any successor agency and all persons designated by the General Manager to administer the sale and delivery of water to CTW. 1.08 "MGD" is an abbreviation for million gallons of water per day. As used in this contract, "MGD" refers to a quantity of water during a period of time expressed for convenience in terms of an average daily quantity during a calendar month (unless a different period of time is specified). The volume of two MGD for a calendar month, for example, is calculated as follows: Two million gallons multiplied by the number of days in such calendar month. 1.09 "Point of Delivery" shall mean those delivery points as indicated on Exhibit "A," which is attached hereto and incorporated herein for all intents and purposes, to which BAWA agrees to deliver treated water to CTW. 1.10 "Point of Measurement" shall mean the location of the meter at which CTW's consumption of water is measured, more particularly described in Exhibit "A." 1.11 "Prof ect" means the property, works, facilities and improvements, whether previously existing or to be made, constructed or acquired, within or without the boundaries of BAWA, necessary (a) to acquire surface water supplies from sources both within and without the boundaries of BAWA, including particularly the sources provided by BAWA's Contract (herein defined), 2 0 (b) to conserve, store, transport, treat and purify untreated water purchased by BAWA pursuant to BAWA's Contract, and (c) to distribute, sell and deliver treated water to CTW pursuant to the terms of the Contract. 1.12 "Service Area" shall mean the area within the boundaries more particularly described in Exhibit "B," which is attached hereto and incorporated herein for all intents and purposes. 1.18 "TNRCC" shall mean the Texas Natural Resource Conservation Commission or its successor. 1.13 "Water" shall mean potable water meeting the minimum drinking water standards prescribed by Texas Department of Health Resources and Texas Natural Resource Conservation Commission, and their successor agencies. ARTICLE H SALE AND DELIVERY OF WATER 2.01 Subject to the terms and conditions of this Contract, during the Contract Tenn, BAWA agrees to sell and deliver (or cause to be delivered) to CTW, all of CTW's water requirements of treated water at the Points of Delivery at daily rates of delivery; and CTW agrees to purchase from BAWA, all of CTW's treated water requirements for resale at the Points of Delivery during the term of this Contract. It is expressly agreed to and understood that BAWA shall not be obligated to deliver to CTW treated water in excess of the Contract Quantity which shall be the monthly average per day of 0.110 MGD. 2.02 The Points of Delivery for treated water sold under this-contract shall be designated in writing by CTW; provided, however, BAWA reserves the right to reject any Point of Delivery designated by CTW which would affect, interfere with or increase the cost of any other facilities or operations which BAWA might wish to construct or implement, or plan to construct or implement, or which would adversely affect BAWA's ability to provide treated water to any of its customers. Both BAWA and CTW agree that the Points of Delivery shall be those indicated on Exhibit "A," which is attached hereto and incorporated herein for all intents and purposes. Additionally, CTW may give BAWA notice in writing of any additional or change in Point(s) of Delivery designated by CTW, and BAWA agrees to accept or reject such Point(s) of Delivery by a response in writing within thirty (30) days after BAWA's receipt of the notice. 2.03 Treated water may be delivered to CTW from any source or combination of sources available to BAWA. • 2.04 The treated water to be delivered shall meet minimum standards prescribed by the State of Texas for municipal purposes (as such term is defined by the TNRCC in its rules) and shall be only used by CTW within the Service Area. 2.05 If CTW wishes to reserve for itself additional monthly quantities of treated water, CTW must notify BAWA in writing of CTW's desire to do so. The General Manager may, at his discretion after considering the treated water requirements of CTW and BAWA's obligations and commitments, increase the quantity of treated water supplied to CTW; provided, however, that BAWA shall be under no obligation to deliver treated water in excess of Contract Quantity. BAWA may, at its discretion, discontinue delivery of such additional monthly requirements of treated water by giving CTW thirty (3 0) days' written notice. 2.06 CTW shall own and be responsible for all lines connected to BAWA's transmission line, beginning at the point where the metering device is installed to meter sales to CTW. ARTICLE III CONSTRUCTION OF THE PROJECT 3.01 CTW agrees to proceed promptly with the acquisition and construction of the Project with monies lawfully available for such purpose after obtaining written approval of the plans and specifications from BAWA. However, such approval shall not be deemed to be for the benefit of CTW, bur rather just for the protection of BAWA's system. 3.02 If CTW desires to materially revise the scope of or the plans and specifications for the Project, such proposed revisions shall be submitted to BAWA for approval. If BAWA approves such revisions, the Project shall be modified. ARTICLE IV RATES AND PRICES 4.01 As a contribution to the capital investment of BAWA and in consideration for connection of CTW's work system, CTW shall. pay EIGHTY -EIGHT THOUSAND SEVEN HUNDRED FORTY -EIGHT AND N01100 DOLLARS ($88,748.00), within thirty (30) days ofthe funding of the first issue of capital improvement bonds by CTW. Notwithstanding the above, however, CTW is obligated and hereby promises to pay or cause to be paid to BAWA said amount no later than one year from the date of this contract. Additionally in order to further secure CTW's assurance of the availability of such funds, CTW will provide or cause to be provided to BAWA an irrevocable letter of credit, payable to BAWA, in a form acceptable to BAWA in the amount of EIGHTY -EIGHT THOUSAND SEVEN HUNDRED FORTY -EIGHT AND NO /100 DOLLARS ($88,748.00), so that, should BAWA be required to enlarge or expand its water treatment facilities to provide treated water to CTW in the amounts set forth herein prior to the payment to BAWA, by CTW of EIGHTY -EIGHT THOUSAND SEVEN HUNDRED FORTY -EIGHT AND N0 1100 DOLLARS ($88,748.00), described above, then, in such event, the Letter of Credit can be drawn 4 W upon by BAWA in such amounts and installments necessary in order to provide funds for such enlargement or expansion of water treatment facilities in the amount of CTW's pro rata share of any such capital expansion costs. BAWA shall also be entitled to draw upon the full amount of such letter of credit of the full amount of the capital investment contribution has not been paid within one year of the date of this Contract. 4.02 Whenever CTW's consumption shall exceed Contract Quantity by ten percent (10 %), a five percent (5%) surcharge shall be charged against that portion of the consumption that exceeds the Contract Quantity. Provided, however, this surcharge shall not apply to any increase in the quantity of treated water granted by the General Manager pursuant to Section 2.05 hereof. 4.03 All water sold and delivered by BAWA to CTW for which CTW is obligated to pay hereunder shall be sold to CTW at the rate of $1.29 per one thousand gallons. 4.04 The amount of water delivered to CTW shall be measured by the metering equipment located at the point of delivery. 4.05 Additionally, CTW understands and agrees that BAWA may at anytime, by' order duly enacted, increase or change the price or prices for treated' water as set forth in this article; provided, however that except where an independent rate analysis conducted by a qualified concern indicates that certain rate increase is required, the price or prices for treated water shall not be increased percentagewise to CTW during any twelve (12) month period of this contract in excess of the percentage rate increase in BAWA's water rates to other purchasers of treated water during the same period. ARTICLE V REPORTS 5.01 Within fifteen (I S) days after the end of each quarterly period during the tern of this Contract, CTW shall furnish BAWA with a statement under oath showing the quantities and sources of all water for use or resale by CTW. ARTICLE VI MEASURING EQUIPMENT 6.01 At its own cost and expense, CTW shall furnish and install at the Point of Delivery hereunder, measuring equipment properly equipped with meters, totalizers and devices of standards type for measuring and recoding accurately the quantity of water delivered under this Contract. The meters shall have a capacity for measuring the quantity of water delivered within an accuracy tolerance of two per cent (2 %) plus or minus for a given rate of flow. CTW shall also install, operate and maintain as required by BAWA, pressure regulating devices and equipment. Such measuring equipment shall be approved by BAWA and after BAWA's approval of the installation, same shall become property of BAWA. All measuring equipment shall be owned by BAWA, even when • M purchased by CTW, and all measuring equipment shall be located at the Point of Delivery as shown on Exhibit "A." 6.02 During all reasonable hours as determined by the General Manager in his sole discretion, BAWA, the City of Houston, and the Coastal Water Authority of Texas shall have access to the measuring equipment. CTW may have access to all records pertinent to determining the measurement and quantity of treated water actually delivered hereunder, but the reading of the measuring equipment for purposes of billing shall be done by BAWA. 6.03 After approved installation thereof, BAWA shall maintain the measuring equipment within the accuracy tolerance specified in Section 6.04 by periodic tests. BAWA shall conduct such tests at least once every twelve (12) months and shall notify CTW at least forty-eight (48) hours in advance of the time and location at which tests are to be made. BAWA agrees to properly test said measuring equipment at BAWA's cost when requested to do so by CTW once every twelve (12) months. If CTW requests an additional test within twelve (12) months, BAWA shall charge CTW an amount equal to BAWA's costs to perform such test unless the test reveals that the equipment registers one hundred two percent (102 %) or more for a given flow rate. In addition, CTW shall have the right to independently check, at its own cost, said measuring equipment at any time upon forty-eight (48) hours' notification to the General Manager and opportunity for the General Manager to witness such tests. 6.04 Should any test of the measuring equipment in question show that the equipment registers either more than one hundred two percent (102 %) or less than ninety-five percent (95 %) of the water delivered for a given flow rate, the total quantity of water delivered to CTW will be deemed to be the average daily consumption as measured by the measuring equipment when in working order, and the meter shall be calibrated to the manufacturer's specifications (in the case of Venturi meters) or the AWWA specifications (for all other types of meters) for the given rate of flow, or replaced by BAWA with accurate measuring equipment that is tested before it is placed in service. The adjustment shall be for a period extending back to the time when the inaccuracy began, if such time is ascertainable; and if such time is not ascertainable, for a period extending back to the last test of the measuring equipment or one hundred twenty (120) days, whichever is shorter. If, for any reason, the measuring equipment is out of service or out of repair and the amount of treated water delivered cannot be ascertained or computed from the reading thereof, water delivered during the period shall be estimated and agreed upon by the parties hereto on the basis of the best data available. As used in this section, the expression "given rate of flow" means one of the following selected by the General Manager: (a) the total quantity of water delivered during the preceding period (usually a calendar month) as reflected by the totalizer, converted to gallons per minute; (b) high, low and intermediate rates of flow in the flow rate, as reflected by the flow 40 recording devices; 3 9 (c) the applicable Contract Quantity for the current period, usually a calendar month, converted to gallons per minute; or • (d) AWWA- specified test flow rates for that size and type of meter. 6.05 In the event of a dispute between BAWA and CTW as to the accuracy of the testing equipment used by BAWA to conduct the accuracy test, an independent check may be mutually agreed upon between CTW and BAWA and shall be conducted by an independent measuring equipment company suitable to both CTW and BAWA. The cost of such test shall be at CTW's sole expense. 6.06 CTW may install, at its own cost and expense, such check meters in CTW's pipeline or canal as may be deemed appropriate, but BAWA shall have the right of ingress and egress to such check meters during all reasonable hours; provided, however, that billing computations shall be on the basis of the results of the measuring equipment set forth above. ARTICLE VII BILLING AND PAYMENT 7.01 As used in this Article VII, the term "day" shall mean a period of twenty-four (24) consecutive hours beginning at a mutually agreed -upon time on one calendar day and ending at the same time on the next succeeding calendar day, and the term "month" shall mean a period beginning at a mutually agreed -upon time on the first day of a calendar month and ending at the same time on the first day on the next succeeding calendar month. 7.02 The measuring equipment shall be read on the day at the end of each month (or at such period of frequency arranged between the parties) and at a mutually agreed upon time, or as near thereto as practicable. 7.03 The quantities of treated water for which payment is due by CTW hereunder in any month shall be the total quantity of treated water delivered to CTW in such month determined by the measuring equipment described in Article VI hereof. 7.04 BAWA shall bill CTW at CTW's address within ten (10) days after the read date by a statement showing the quantity of water used during the preceding month. Payment shall be due and payable to BAWA at its offices in Baytown, Harris County, Texas, on or before the twentieth day after receipt of such statement. 7.05 Should CTW fail to tender payment of any amount when due, interest thereon shall accrue at the rate of ten percent per annum from the date when due until paid and CTW shall be deemed to be in default. 7 • ARTICLE VIII TITLE TO AND RESPONSIBILITY FOR WATER 8.01 As between BAWA and CTW, BAWA shall be in exclusive control and possession of, and solely responsible for, all treated water deliverable hereunder and solely responsible for any damage or injury caused thereby until the same shall pass through the Point of Delivery and thereafter, CTW shall be in exclusive control and possession thereof and solely responsible for any injury or damage caused thereby. 8.02 BAWA MAKES NO WARRANTY, EXPRESS OR IMPLIED, REGARDING THE QUALITY OR DELIVERY PRESSURE OF TREATED WATER, INCLUDING THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. 8.03 With respect to all water handling facilities located between the Point of Delivery and the Point of Measurement, BAWA and CTW specifically agree: (a) that all such facilities, other than the measurement equipment itself, shall be and remain the property of CTW subject to the terms of this Contract; (b) that CTW shall take all reasonable steps to maintain such facilities and to prevent leaks or discharges from such facilities; (c) that CTW shall repair any such leak or discharge at once upon receiving notice thereof and pay BAWA the price of any water lost by reason of such a leak or discharge; (d) that CTW shall correct or repair any damage caused by any such leak or discharge and shall hold BAWA harmless from and against any such damage and claims therefore; (e) that CTW shall alter or relocate, at its sole cost, any such facilities whenever BAWA shall reasonably request in writing that the same be done; and (f) that CTW shall promptly remove such facilities and restore their locations to their pre- existing conditions whenever this Contract is no longer in effect and BAWA so requests in writing. ARTICLE IX TERM This Contract shall be in force and effect beginning on the date of execution by BAWA until December 31, 2021, at 8:00 a.m. 9 • I♦ ARTICLE X PERFORMANCE BY BAWA AND CTW 10.01 BAWA covenants and agrees that it will not contract for the sale of water to other users to such an extent or for such quantities as to impair BAWA's ability to perform fully and punctually its obligations to CTW under this Contract. In case of temporary shortage of water, notwithstanding BAWA's compliance with the portions of this Article X, BAWA shall distribute the available supply as provided by the laws of the State of Texas, particularly Section 11.039(a) of the Texas Water Code, as amended. 10.02 Pursuant to the Amendatory Contract entered into by the City of Houston and the San Jacinto River Authority, which is incorporated herein by this reference, CTW covenants and agrees that it shall take treated water for the purpose of distribution through its system, and such water shall be used for municipal purposes (as such term is defined by TNRCC Rules, currently in effect or as hereinafter amended) and for no other purposes. CTW covenants and agrees that such treated water shall be sold, distributed or used and ultimately consumed only for residential household or other strictly municipal purposes exclusively within the Service Area. No extension of these boundaries may be made by CTW without written consent of BAWA as well as the written consent of the San Jacinto River Authority and City of Houston, when required pursuant to the Water Supply Contract between the City of Houston and BAWA, dated October 24, 1994. CTW agrees to include covenants similar to those contained in this Section 10.02 in any sales or contracts for sale of water by CTW to any other entity. CTW agrees to submit the wording of such covenants to BAWA for the written approval of BAWA and all other required entities prior to entering into such contracts. CTW understands and agrees that BAWA, the City of Houston and/or the San Jacinto River Authority may enforce the covenants contained in Section 10.02 herein by an action brought directly against CTW. In the event that BAWA and/or the City of Houston maintains any legal proceeding to enforce such covenants, CTW agrees to indemnify BAWA and/or the City ofHouston in the amount of all expenses relating to the legal proceeding, including, but not limited to, costs of court and reasonable attorneys' fees. 10.03 CTW acknowledges that according to the terms of the contract between BAWA and the City of Houston, BAWA may be liable to the City of Houston and/or the San Jacinto River Authority for monetary damages in the event that CTW (or any purchaser of water from or through CTW) fails to comply with the restrictions and limitations on the sale of water set out in Section 10.02 herein. CTW acknowledges that such monetary damages would amount to seventy-five percent (75 %) of the consideration or revenue received by BAWA for the estimated amount of water distributed, sold or used in violation of such restrictions or limitations, plus all litigation expenses, reasonable attorney's fees, and all other remedies available to the City of Houston and/or the San Jacinto River Authority. CTW hereby agrees to totally indemnify, defend, and save BAWA harmless from and against any such expenses and liability which BAWA might incur or any loss BAWA might suffer, as a result of any failure by CTW, or any purchaser of water from or through CTW, to comply with such restriction and limitation. CTW agrees that in the event that CTW furnishes or sells water or water services to a third party that in turn will furnish water to the ultimate consumer, CTW shall include covenants in any such sales or contracts for sale of water to such third party(ies) E to ensure that said other entity(ies) will likewise indemnify, hold harmless, and, defend BAWA. CTW agrees to submit the wording of such covenants for the approval of BAWA prior to entering into such contracts. CTW acknowledges that according to the terms of the contract between the City of Houston and the San Jacinto River Authority, the City of Houston may be liable to the San Jacinto River Authority for monetary damages in the event that CTW (or any purchaser of water from or through CTW) fails to comply with the restrictions and limitations on the sale of water set out in Section 10.02 herein. CTW acknowledges that such monetary damages would amount to seventy-five percent (75 %) of the consideration or revenue received by the City of Houston for the estimated amount of water distributed, sold or used in violation of such restrictions or limitations, plus all litigation expenses, reasonable attorney's fees, and all other remedies available to the San Jacinto River Authority. CTW hereby agrees to fully indemnify, defend, and save the City of Houston harmless from and against any such expenses and liability which the City of Houston might incur or any loss the City of Houston might suffer, as a result of any failure by CTW, or any purchaser of water from or through CTW, to comply with such restrictions and limitations. CTW agrees that in the event that CTW furnishes or sells water or water services to a third party that in turn will furnish water to the ultimate consumer, CTW shall include covenants in any such sales or contracts for sale of water to such third party(ies) to ensure that said other entity(ies) will likewise indemnify, hold harmless, and defend the City of Houston. CTW agrees to submit the wording of such covenants for the approval of BAWA and the City of Houston prior to entering into such contracts. 10.04 CTW agrees to maintain, at its sole expense, its water wells, if any, in good repair and working order to facilitate the use of such water wells as an emergency source of supply, if required, should BAWA be unable to deliver the Contract Quantity of water for any reason. CTW shall bear all costs of maintaining and supplying such emergency sources of supply. ARTICLE XI ENVIRONMENTAL CONSIDERATIONS 11.01 On or before the first anniversary of the effective date of this contract; CTW shall approve, implement and throughout the term hereof remain in full compliance with a water conservation program, including, but not limited to, a drought contingency plan, in accordance with the requirements of the TNRCC. Such plan (and any amendments thereto) shall be submitted to the appropriate authority as required by state law for review and approval. In the event that the TNRCC adopts new requirements, CTW shall adopt an amended plan and submit the same to the appropriate authority for review and approval. 11.02 CTW agrees that in the event that CTW furnishes or sells water or water services to a third party that in turn will furnish water to the ultimate consumer, the requirements of this Contract relative to water conservation shall be met through contractual agreements between CTW and the third party, providing for the implementation and continued compliance with a water conservation • program consistent with the requirements of the TNRCC. 10 ARTICLE XII REMEDIES UPON DEFAULT 12.01 In the event of any default by CTW in the performance of any of CTW's obligations hereunder which shall continue for a period of thirty (30) days or more, BAWA shall give written notice to CTW specifying the matter with respect to which CTW is in default and requesting that the same be remedied with promptness and dispatch. In the event CTW, within forty-five (45) days after the mailing of such notice by BAWA, has failed to remedy the matter in default, BAWA may suspend further delivery of treated water to CTW hereunder; and in the event such default on the part of CTW continues for an-additional thirty (30) days, BAWA may, by an additional written notice to CTW, cancel and terminate this contract, whereupon all rights of CTW and all obligations ofBAWA hereunder shall terminate and be at an end. The exercise of such rights shall be in addition to any other remedies available to BAWA under the laws of the State of Texas. 12.02 During any monthly period in which BAWA is unable to deliver to CTW, CTW's daily requirements of water, whether as a result of temporary curtailments resulting from temporary shortages as provided in Section 10.01 hereof or of force majeure as provided in Article XM hereof, CTW shall be obligated to pay BAWA only for the quantities of treated water actually delivered to CTW under this contract during such month. During any such period, CTW shall be free to obtain treated water from other sources. 12.03 The failure of either party to insist in anyone or more instance upon performance of any of the terms, covenants or conditions of this Contract, shall not be construed as a waiver or relinquishment of the future performance of any such term, covenant, or condition by the other party hereto, but the obligation of such other party with respect to future performance shall continue in full force and effect. ARTICLE XIII FORCE MAJEURE 13.01 In the event either party is rendered unable, wholly or in part, by force majeure to carry out any of its obligations under this Contract other than the payment of money, or in the event CTW is rendered unable, wholly or in part, by force majeure to operate CTW's facilities, it is agreed that on such party's giving notice and full particulars of such force majeure in writing or by telefax or telegraph to the other party as soon as possible after the occurrence of the cause relied upon, then the obligations of the party given such notice, to the extent it is affected by force majeure and to the extent that due diligence is being used to resume performance at the earliest practicable time, shall be suspended during the continuance of any inability so caused as to the extent provided but for no longer period. Such cause shall as far as possible be remedied with all reasonable dispatch. 13.02 The term "force majeure" as used herein, shall include, but not be limited to, acts of God, strikes, lockouts, or other industrial disturbances, acts of the public enemy, war, blockades, insurrections, riots, epidemics, landslides, lighting, earthquakes, fires, storms, floods, washouts, 11 droughts, tornadoes, hurricanes, arrests and restraints of government and people, explosions, breakage or damage to machinery, equipment, pipelines or canals, and any other inabilities of either party whether similar to those enumerated or otherwise and not within the control of the party claiming such inability which by the exercise of due diligence and care such party could not have avoided. 13.03 It is understood and agreed that the settlement of strikes or lockouts shall be entirely within the discretion of the party having the difficulty and the above requirement that any force majeure be remedied with all reasonable dispatch shall not require the settlement of strikes or lockouts by acceding to demands of the opposing party when such course is inadvisable in the discretion of the party having the difficulty. 13.04 CTW shall not be guaranteed any specific quantity or pressure of water whenever BAWA's treated water supply is limited or when BAWA's equipment may become inoperative due to unforeseen breakdown or scheduled maintenance and repairs, and BAWA is in no case to be held to any liability for failure to furnish any specific amount or pressure of water. BAWA agrees that it will attempt to make any necessary repairs or adjustments to its equipment within reasonable times mutually agreeable to both parties. It is further agreed that BAWA may, without liability of default, interrupt its services hereunder to make necessary alterations to or repairs in its facilities, but only if such interruption cannot otherwise reasonably be avoided. BAWA shall schedule interruptions in advance after consultation with CTW. ARTICLE XIV ADDRESS AND NOTICES 14.01 Until CTW is otherwise notified in writing by BAWA, the address of BAWA is and shall remain as follows: Baytown Area Water Authority Attn: General Manager 2401 Market Street Baytown, Texas 77520 Until BAWA is otherwise notified in writing by CTW, the address of CTW is and shall remain as follows: Country Terrace Water Co, Inc. Attn: President P.O. Box 24433 Houston, Texas 77229 -4433 14.02 All written notices, statements, and payments required or permitted to be given under . this Contract from one party to the other shall be deemed given by telefax or the deposit in a United States Postal Service mailbox or receptacle of certified or registered mail, with proper postage 12 affixed thereto, addressed to the respective other party at the address set forth above or at such other address as the parties respectively shall designate by written notice. ARTICLE XV MISCELLANEOUS PROVISIONS 15.01 This contract shall bind and benefit the respective parties and their legal successors, but shall not otherwise be assignable, in whole or in part, by either party without first obtaining the written consent of the other; provided, however, that CTW shall have the right, without any consent of BAWA to pledge or otherwise assign CTW's rights hereunder to the extent required by any mortgage, deed of trust or other similar agreement to which CTW may be, or hereafter become a party; provided that, CTW's successor or assignee, as the case may be, is a responsible person or entity and shall (by operation of law or otherwise) expressly assume CTW's obligations hereunder; and provided, further, however, that no successor or assignee of CTW shall be entitled to receive water or sell water to a third party under this Contract unless and until the City of Houston and the San Jacinto River Authority give their written consent to such assignment. 15.02 This Contract shall be for the sole and exclusive benefit of BAWA and CTW and shall not be construed to confer any rights upon any third party, except as expressly provided in Article X. BAWA shall never be subject to any liability in damages to any customer of CTW for any failure to perform under this Contract. 15.03 This Contract shall be subject to all present and future valid laws, orders, rules and regulations of the United States of America and the State of Texas and of any regulatory body having j urisdiction. 15.04 This instrument contains all the agreements made between the parties concerning the sale and delivery of water by BAWA to CTW at the Point of Delivery set out in this Contract. 15.05 The construction, interpretation and performance of this Contract shall be governed by the laws of the State of Texas, and venue shall lie in Harris County, Texas. 15.06 All parties agree that should any provision of this Contract be determined to be invalid or unenforceable, such determination shall not affect any other term of this Contract, which shall continue in full force and effect. The parties agree that this Agreement shall not be construed in favor of or against any party on the basis that the party did or did not author this Agreement. 15.07 Each party has the full power and authority to enter into and- perform this Contract, and the person signing this Contract on behalf of each party has been properly authorized and empowered to enter into this Contract. The persons executing this Contract hereby represent that they have authorization to sign on behalf of their respective entities. 15.08 The parties acknowledge that they have read, understand and intend to be bound by the terms and conditions of this Contract. 13 • n IN WITNESS WHEREOF, the parties hereto have executed this contract as of the,�day of September, 2001, in multiple copies each of which shall be deemed to be an original, but all of which shall constitute but one and the same contract. BAYTOWN AREA WATER AUTHORITY 1 n ROBERT L. GILLETTE, President ATTEST: PETER R. BUENZ, Sec ary COUNTRY TERRACE WATER CO., INC. 4S ature j ePr`9 ljow Printed Name Title STATE OF TEXAS COUNTY OF HARRIS Before me, _0&=, M EK"L4- the undersigned notary public, on this day personally appeared E,2 Kv in his/her capacity as oW nleiZ of Country Terrace Water Co., Inc. (4 one) known to me proved to me on the oath of proved to me through his current description of identification card or or "-7S9Z ► X -bL other document issued by the federal goverment or any state government that contains the photograph and signature of the acknowledging person) 14 • to be the person whose name is subscribed to the foregoing instrument, and acknowledged to me that he executed that instrument for the purposes and consideration therein expressed. t Given under my hand and seal of office thi day of September, 2001. — pa"�� Notary Public in and for the State of Texas PATTI MERRELL * * Notary Public, State of Tp"S Canmissim Expires Nov. 27, 2004 cAdh274\13AWA \country Terrace WateAWaterSuppKontract082001 15 My commission expires: // %a 7lo y APPROVED TO CONFORMING TO REQUIREMENTS OF CONTRACT NO. 34739, SECTIONS 9.2 AND ": ANTHONY-HALL, City A CITY OF HOUSTON =�i w z Er w F- 0 w O w ,--V) O 0- Ir CL • 1 I' z O U) 2 ,6 1<J ----- - - - --I ! 1f�T -- - - - --I L _ I i -�i i-� I r -I- f L� 'L- -1 L � iF--� O F L_J� J L i h- I I I_-a C I I I I L_ J F -1 I 7 r— 1 1 it _i i -! 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