ORD 1998-12 - Agreement For Purchase & Delivery Of Treated Water 05-26-1998ORDINANCE 98 -12
AN ORDINANCE APPROVING AND AUTHORIZING THE EXECUTION AND
DELIVERY OF CONTRACT BETWEEN THE CITY OF HUNTSVILLE AND
TENASKA FRONTIERS PARTNERS, LTD. ENTITLED "AGREEMENT FOR
PURCHASE AND DELIVERY OF TREATED WATER "; CONTAINING OTHER
PROVISIONS RELATING TO SUCH SUBJECT; AND PROVIDING THAT THIS
ORDINANCE SHALL TAKE EFFECT FROM AND AFTER ITS FINAL
PASSAGE
WHEREAS the City Council of the City of Huntsville (the "City Council ") desires to approve the
execution and delivery of a contract (the "Contract ") between the City of Huntsville
(the "City ") and Tenaska Frontier Partners, Ltd. ( "Tenaska "); and
WHEREAS the City Council is authorized to enter into the Contract pursuant to the City Charter
of the City and pursuant to general laws of the State of Texas; and
WHEREAS the Council has reviewed the Contract and has determined that it is in the best
interests of the City to enter into the Contract;
Now, Therefore, Be it Ordained by the City Council of the City of Huntsville, Texas, that:
Section 1: The City is hereby authorized to enter into a contract with Tenaska in substantially
the form attached hereto, which is hereby approved as to the form and substance,
subject to such insertions, completions and variations as shall be approved by the
officers of the City (such approval to be evidenced by execution of the Contract and
by approval of the City Attorney who shall pass upon the Contract as executed), and
the Mayor or any other duly appointed person is hereby authorized and directed to
execute and deliver the Contract and the City Secretary is hereby authorized and
directed to attest thereto and impress the seal of the City thereupon.
Section 2: The obligations of the City pursuant to the Contract are payable as an operating
expense of its waterworks system and consequently, the money will be available
when the obligations of the City pursuant to the Contract become due and payable.
Section 3: The facilities which are to be provided pursuant to the Contract constitute an
extension and a part of the City's waterworks system and the operation, maintenance
and repair of such facilities pursuant to the Contract are necessary in the judgment
of the City Council to render adequate service to Tenaska.
Section 4: The Council hereby affirmatively finds, determines and declares that all matters set
forth in the preamble of this Ordinance are true, correct and complete.
Section 5: It is hereby found, determined and declared that a sufficient written notice of the date,
hour, place and subject of this regular meeting of the Council was posted at a place
convenient to the meeting at the City Hall for the time required by law preceding this
meeting and that such place of posting was readily accessible at all times to the
general public from the time of posting to the time of this meeting; that the foregoing
was done as required by the Open Meetings Law, as amended; and that this meeting
has been open to the public as required by law at all times during which this
Ordinance and the subject matter thereof has been discussed considered and formally
acted upon.
Section 6: This Ordinance shall be and become effective from and after its adoption upon its
passage.
PASSED AND APPROVED on the 26nd day of May, 1998.
CITY 0 F HL24TSVIVE, TEXAS
WfYiarn B. Green, Mayor
A ST,
Danna Welter, City Secretary
Scott Boundl, City Attorney
CERTIFICATE FOR ORDINANCE
THE STATE OF TEXAS §
COUNTY OF WALKER §
We, the undersigned officers of the City of Huntsville (the "City "), do hereby execute and deliver
this certificate for the benefit of all persons interested in the validity of the proceedings authorizing
execution and delivery of a contract. We hereby certify as follows:
We are the duly chosen, qualified and acting officers ofthe City for the offices shown below our
signatures; as such we are familiar with the facts herein certified; and we are duly authorized to
execute and deliver this certificate.
2. There is attached to this certificate a true, correct and complete copy of Ordinance No. 98 -12 of
the City (the "Ordinance "), which was passed and approved by the City Council at a Regular
Meeting held May 26, 1998.
3. The Ordinance has been duly and lawfully adopted by the City Council of the City at a regular
meeting at which a quorum of the City Council was present throughout; the Mayor of the City
has approved, and hereby approves, the Ordinance; the Mayor and the City Secretary of the City
have duly signed and attested the Ordinance and hereby declare that the signing of this certificate
shall also constitute the signing of the Ordinance for all purposes; and the Ordinance, as signed,
has been duly recorded in the official records of the City.
4. Each of the officers and members of the City Council was duly and sufficiently notified,
officially and personally, in advance, of the date, hour, place and subject of each meeting of the
City Council at which the Ordinance was considered for passage, and each of such officers and
members consented, in advance, to the holding of said meetings to consider and act upon such
subject.
5. Written notice ofthe date, hour, place and subject of said meeting ofthe City Council was posted
for the time required by law preceding said meeting on a bulletin board located at a place
convenient to the public in the City Hall; said bulletin board was readily accessible to the public
at all times from the time of posting until the convening of said meeting of the City Council; and
said meeting was open to the public as required by law at all times during which the Ordinance
and the subject matter thereof was discussed, considered and acted upon, all as required by the
Open Meetings Act, as amended.
WITNESS OUR HANDS AND THE SEAL OF THE CITY this V day of May, 1998.
City Secretary Mayor
(SEAL)
MINUTES OF MEETING
May 26,1998
City Council of the City of
Huntsville, Texas
THE STATE OF TEXAS §
COUNTY OF WALKER §
The City Council of the City of Huntsville convened in Regular Meeting, open to the public,
ON THE 26 DAY OF MAY, 1998, in the City Hall within the City, and the roll was called of the
duly constituted officers and members of said Council to-wit:
William B. Green
Mayor
Ron Lange
Councilmember — Ward I
Dave Luning
Councilmember — Ward 2
JoAnn Matthews
Councilmember — Ward 3
Ann James
Councilmember — Ward 4
Dan Davis
Councilmember-at-Large —Position
1
Marjorie Rex
Councilmember-at-Large —
Position 2
Vance Howard
Councilmember-at-Large —
Position 3
David Martinez
Councilmember-at-Large —
Position 4
and all of said persons were present, thus constituting a quorum. Whereupon, the following [among
other] business was transacted at said meeting: a written ordinance entitled:
AN ORDINANCE APPROVING AND AUTHORIZING THE EXECUTION AND
DELIVERY OF CONTRACT BETWEEN THE CITY OF HUNTSVILLE AND
TENASKA FRONTIERS PARTNERS, LTD. ENTITLED "AGREEMENT FOR
PURCHASE AND DELIVERY OF TREATED WATER"; CONTAINING OTHER
PROVISIONS RELATING TO SUCH SUBJECT; AND PROVIDING THAT THIS
ORDINANCE SHALL TAKE EFFECT FROM AND AFTER ITS FINAL
PASSAGE
was duly introduced for the consideration of said Council. It was then duly moved by
Councilmember Luning and seconded by Councilmember Lange that such Ordinance be adopted;
and after due discussion, such motion, carrying with it the adoption of the Ordinance, prevailed by
the following vote:
AYES: 9
NOES: 0
The Mayor thereupon announced that the Ordinance had been duly and lawfully adopted and
was in full force and effect. The Ordinance thus adopted follows:
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AGREEMENT FOR PURCHASE AND DELIVERY
OF TREATED WATER
This Agreement for Purchase and Delivery of Treated Water ( "Agreement ") is entered into
this day of , 1998 ( "Effective Date "), by and between the City of
Huntsville, Texas, a home rule municipal corporation in Walker County, Texas ( "City "), and
Tenaska Frontier Partners, Ltd., a Texas limited partnership ( "Tenaska "). Whenever used in this
Agreement, the term "Party" shall mean City or Tenaska, individually, and the term "Parties" shall
mean City and Tenaska, collectively.
RECITALS:
WHEREAS, Tenaska intends to construct, own and operate an electric generating facility together
with related equipment and other improvements ( "Electric Plant ") at a location near
Shiro, Grimes County, Texas ( "Electric Plant Site "); and
WHEREAS, the Electric Plant will require a substantial volume of water for operation; and
WHEREAS, City contracts with Trinity River Authority ( "Authority ") for water and water
treatment in connection with City's operation ofthe City's own water production and
water transmission facilities for service to the public, and City has the ability to
deliver to Tenaska the volume and quality of water required by Tenaska for its
operation of the Electric Plant; and
WHEREAS, subject to the terms and conditions of this Agreement, City has agreed to sell to
Tenaska and deliver to the Electric Plant certain volumes of treated water with an
average turbidity less than 5 NTU units ( "Treated Water "); and
WHEREAS, in order to sell and deliver Treated Water to Tenaska it will be necessary to modify,
extend, improve and enhance the Authority's water treatment facilities and City's
water transmission system (hereinafter Authority's water treatment facilities and
City's water transmission system, as any of them may currently exist or are to be
modified, extended, improved, and enhanced pursuant to this Agreement, shall be
referred to in this Agreement as, the "City's Water System ").
NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained,
the Parties agree as follows:
1. PURPOSE. The purpose of this Agreement is to define the Parties' contractual rights and
obligations relative to the supply of Treated Water to the Electric Plant.
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2. TERM OF AGREEMENT.
(a) This Agreement shall be effective upon its execution by the duly authorized
representatives of each Party. Subject to the provisions of the remainder of this
paragraph 2, the term of this Agreement shall extend to December 31, 2020, unless
this Agreement is earlier terminated in accordance with the provisions of paragraph
13(o) or paragraph 15; provided, however, if Tenaska is then not in material default
under this Agreement, Tenaska shall have the option to extend this Agreement for
two consecutive 5 -year terms ( "Extended Term ") conditioned upon City then being
a party to an agreement ( "Extended Raw Water Supply Contract ") with the Authority
or any of its successors or assigns, in the nature of that of the Huntsville Raw Water
Supply Contract entered into as of April 22, 1998 attached to this Agreement as
Exhibit "C" ( "Raw Water Supply Contract ", which shall not be amended without
Tenaska's consent); provided, fiirther, that the minimum monthly water charge will
increase during the extension as provided in paragraph 5. City will use good faith
and best efforts to negotiate toward the execution of an Extended Raw Water Supply
Contract with a term not to expire prior to December 31, 20' )0 for the lowest possible
water purchase price. Tenaska shall exercise its option(s) under this paragraph 2(a)
by delivery of written notice of such exercise to City to be given no later than one
hundred eighty (180) days prior to the expiration of the then current term of this
Agreement.
(b) City acknowledges in performing its obligations under this Agreement it is acting as
a public utility. City acknowledges that as a public utility it has a dirty to provide
continuity of service during and after the termination of this Agreement for
reasonable rates. In the event the City cannot meet such obligations for reasons other
than a default by Tenaska, then Tenaska shall, in addition to any other available
remedy, be entitled to secure water, including the right to purchase water, including
Treated Water, for use at the Electric Plant from any other source, including any
other person or entity. Such other person or entity shall have the right, privilege,
license and authority to use the Pipeline and the Pump Station (as such terms are
defined in paragraph 3 of this Agreement) to deliver up to seven million gallons of
water per day to Tenaska without objection or charge by City. To the extent
permitted by law now or at any time in the future, City hereby waives any objection
to such use and agrees that it shall grant and convey to such other person or entity all
right, privilege, license and authority as may then be necessary or appropriate for
such purposes. The provisions of this paragraph 2(b) shall survive the expiration of
this Agreement for reasons other than default by Tenaska.
(c) Tenaska shall be entitled to secure water, including the right to purchase water,
including Treated Water, for use at the Electric Plant from any other source,
including any other person or entity (i) until Tenaska begins receiving delivery of
Treated Water through the Pipeline at the Metering Point (as defined in paragraph
4(a)) in volumes identified in paragraph 3(b)(iv) and thereafter as may be permitted
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under this Agreement, and (ii) at all times following the expiration or termination of
this Agreement. The provisions of this paragraph 2(c) shall survive the expiration
or termination of this Agreement.
3. SERVICE TO BE RENDERED. Services to be rendered by the respective Parties shall
include the following:
(a) (i) By no later than 550 days after City's receipt of the Notice to Proceed (as
defined in paragraph 3(a)(iii)), the City shall have obtained financing,
acquired the necessary easements, licenses and other interests in real estate,
designed, engineered, constructed and put in operating condition those
facilities, more particularly identified on Exhibit "A" to this Agreement,
together with any related appurtenances or facilities (collectively, the "Water
Intake/Plant Improvements "). Nothing in this paragraph 3(a)(i) shall be
construed to relieve City of any obligation to make the volume of Treated
Water available to Tenaska at the Metering Point (as defined in paragraph
4(a)) required by paragraph 3(b)(ii) and paragraph 3(b)(iii) and City shall
prioritize all construction work as may be necessary to meet those
obligations.
(ii) By no later than 180 days after City's receipt of the Notice to Acquire
Easements (as defined in paragraph 3(a)(iii), City shall have acquired the
necessary easements, licenses and other interests in real estate to enable City
and Tenaska to construct, operate, maintain, repair and replace a 32 mile
pipeline with a maximum capacity to convey 8.4 million gallons of water per
day ( "Pipeline ") and the Treated Water delivering pump station ( "Pump
Station ") more particularly identified on Exhibit "B" to this Agreement,
together with any necessary and related appurtenances or facilities. The
locations of the Pipeline and the Pump Station are also identified on Exhibit
"B" to this Agreement. The location of the Pump Station shall be referred to
in this Agreement as the "Water Plant Site ". Except as provided in this
paragraph 3 (a)(ii), Tenaska shall be solely responsible for the construction of
the Pipeline and Pump Station. City shall be responsible and liable for
financing the acquisition of the necessary easements, licenses and other
interests in real estate to be acquired by City pursuant to this paragraph
3(a)(ii). Tenaska shall be responsible and liable for the other costs necessary
to construct the Pipeline and the Pump Station.
(iii) (1) A "Notice to Acquire Easements" shall mean a written notice from
Tenaska to City permitting the City to acquire all necessary
easements, licenses and other interests in real estate to comply with
its related obligations set forth in paragraphs 3(a)(ii) through 3(a)(iii).
The Notice to Acquire Easements shall be delivered to City by no
later than one year following the Effective Date. Promptly following
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the receipt by City of the Notice to Acquire Easements, subject to the
remaining provisions of this paragraph 3(a)(iii), City will initiate all
undertakings necessary or appropriate to acquire such interests in real
estate. With respect to the City acquiring any easement, license or
interest in such real estate, Tenaska shall not be required to reimburse
the City any amount or consideration for such easement, license or
interest in real estate in excess of the fair market value thereof.
(2) A "Notice to Proceed" shall mean a written notice from Tenaska to
the City directing the City to proceed with its obligations under
paragraph 3(a), other than those undertaken as a result of a Notice to
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Acquire Easements. The Notice to Proceed shall be delivered to City
by no later than one year following the Effective Date.
(3) Until Tenaska delivers a Notice to Proceed to City, City shall not
undertake any of its obligations under paragraph 3(a), except as set
forth in a Notice to Acquire Easements or as may be necessary to
obtain the Authority's approval of the preliminary Plans and
Specifications (as defined in paragraph 3 (a)(iv)) and the construction
and other related documents. Tenaska shall be entitled to review and
comment upon such matters prior to City obtaining the Authority's
approval.
(iv) The Water Intake/Plant Improvements, the Pipeline and the Pump Station
shall be collectively referred to in this Agreement as "City's Extended Water
System "; provided, however, any reference to "City's Water System" in this
Agreement shall include City's Extended Water System. Tenaska shall have
the right to review and comment upon all designs, engineering plans and
specifications ( "Plans and Specifications ") for construction of the City's
Extended Water System, including all architects, engineers and contractors
or other professionals utilized by the City in connection with the Plans and
Specifications prior to their finalization and implementation. Additionally,
Tenaska shall have the right to approve all Plans and Specifications for
construction of the Pipeline and the Pump Station. The City shall be
responsible and liable for financing the Water Intake/Plant Improvements,
which financing shall include all costs of engineering, design, construction,
inspection, fees for issuance, attorneys, financial advisors, bond ratings,
escrow agents, reserve funds and other obligations typically incurred and
financed by the City for similar projects in past transactions with the
Authority ( "Cost of Financing "); provided, however, unless otherwise
approved by Tenaska in writing in advance, the Cost of Financing shall not
exceed a principal amount of $5,560,000, which principal amount does not
include the amount required for the bond reserve (not to exceed six (6)
months principal and interest) or the cost of issuing the financing
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instruments. The Parties estimate that the sum of those two amounts will not
exceed $1,000,000. The Cost of Financing shall be payable over a term of
not less than twenty (20) years in substantially equal annual payments over
such term.
(i) City shall use its best efforts to secure from the Texas Natural Resources
Conservation Commission and any other appropriate federal or state agency,
any necessary authorizations required to supply water to Tenaska or to
otherwise meet its obligations under this Agreement in accordance with any
applicable time constraints; provided, however, Tenaska shall cooperate with
City as shall be reasonably necessary to further City's efforts.
(ii) Commencing 365 days after City's receipt of the Notice to Proceed, City
shall make available at the Metering Point the volume of Treated Water
required by Tenaska, not to exceed two million gallons per day (2 MGD), in
order to allow Tenaska to perform functional testing of the Pipeline and the
Pump Station and related improvements.
(iii) Commencing 380 days after City's receipt of the Notice to Proceed, City
shall make available at the Metering Point not less than four million gallons
of Treated Water per day (4 MGD).
(iv) Commencing 550 days after City's receipt of the Notice to Proceed, City
shall make available at the Metering Point seven million gallons of Metered
Water (as defined in paragraph 4(a)) per day (7 MGD); provided, however,
Tenaska shall not use more than an average of six million gallons of Treated
Water per day (6 MGD) during any annual period commencing on the date
of commercial operation (collectively, the 7 MGD and average of 6 MGD
shall be referred to as the "Supply of Water" or "Water Supplied").
(v) City makes no representation or warranty, whether express or implied, that
Water Supplied is suitable for Tenaska's purposes. The Treated Water to be
provided to Tenaska under this Agreement is not potable.
(c) Title to the materials and consurnables to be incorporated into the Pipeline and Pump
Station shall transfer as a donation from Tenaska to the City upon delivery of the
same to the construction site and prior to their incorporation or use by Tenaska or its
contractors or subcontractors. Tenaska hereby grants, transfers and conveys all of
its right, title and interest in such materials and consurnables effective as of such date.
City hereby accepts the transfer of title to such materials and consurnables as a
donation as of such effective date. The foregoing transfer of title does not relieve
Tenaska of its obligation to construct the Pipeline and the Pump Station nor any
obligation for protection, custody, care and operational control of the Pipeline and
the Pump Station until the time of completion of the Pipeline, the Pump Station and
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the Water Intake /Plant Improvements. The City shall assume all such obligations
thereafter except as expressly set forth in connection with the Pipeline set forth in this
paragraph 3 (c). During the term of this Agreement the City shall not lien, encumber,
subordinate, transfer or convey any of its interest in the Pipeline or the Pump Station
to any other person or entity without the prior written consent of Tenaska.
Throughout the term of this Agreement, City shall repair, replace, operate and
maintain all of the City's Water System, other than the Pipeline, in a manner
consistent with (i) the terms and provisions of this Agreement, (ii) the Plans and
Specifications, (iii) industry practice, and (iv) all applicable federal, state or local
laws, statutes, regulations, orders, requirements and codes. Tenaska shall repair,
replace and maintain the Pipeline in a manner consistent with (i) the terms and
provisions of this Agreement, (ii) the Plans and Specifications, (iii) industry practice,
and (iv) all applicable federal, state or local laws, statutes, regulations, orders,
requirements and codes at its cost and expense except to the extent made necessary
as a result of the negligent act, error or omission of City or its agents or to serve any
other customer of City. City authorizes Tenaska to undertake the Tenaska
obligations set forth in this paragraph 3(c); provided, however, such obligations shall
(i) commence only following the conveyance of the Pipeline to City, and (ii) not
create any liability or obligation of any nature whatsoever to any other person or
entity including any customer of City (and City hereby waives any claim against
Tenaska therefor or in connection therewith).
(d) (i) Tenaska shall purchase Treated Water solely and exclusively from the City
in accordance with the provisions of this Agreement. Except as otherwise
permitted in paragraph 2(b), 2(c) or this paragraph 3(d), Tenaska shall not
purchase water from any other supplier without obtaining the prior written
consent of the City; provided, however, Tenaska shall be entitled to purchase
or otherwise obtain and use water from other sources whenever (1) the
Supply of Water is Interrupted (as defined in paragraph 7(a)) or City does not
deliver the Supply of Water because of an Excusable Interruption (as defined
in paragraph 7(b)), but only during the period of Interruption or Excusable
Interruption; (2) City fails to deliver the volume of Treated Water required
by this Agreement; or (3) this Agreement is terminated. If Tenaska purchases
or otherwise obtains water from a person or entity other than the City
whenever allowed by paragraph 2(b), paragraph 2(c), this paragraph 3(d)(i)
or paragraph 3(d)(ii), then Tenaska shall have the right to contribute such
water to the City, and the City shall make such amount of water available to
Tenaska at the Metering Point at no charge and otherwise in accordance with
the delivery conditions required under this Agreement. If City shall not make
such water so available to Tenaska, then such person or entity shall have the
right, privilege, license and authority to use the Pipeline and the Pump
Station to deliver such water to Tenaska without objection or charge other
than reasonable operation and maintenance expenses related to the Pipeline
and Pump Station, by the City or any of its successors or assigns. The
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provisions of this paragraph 3 (d)(i) shall survive the expiration or termination
of this Agreement.
(ii) Tenaska shall not use any other water source for its commercial operation at
the Electric Plant Site other than the City's Water except as follows: (1) for
potable water for consumption and typical indoor office use, (2) whenever
permitted by paragraph 3(d)(i), and (3) for any water required for Tenaska's
operations of its administration building.
4. METERING POINT.
(a) A metering station with all pertinent metering equipment shall be owned, installed,
continually operated and maintained, tested, calibrated and adjusted by the City, to
be located at a point designated by the City and where the Supply of Water enters the
Pipeline ( "Metering Point ") on property of the City or the Authority near the Water
Plant Site. The metering station shall be capable of providing accurate and
continuous measurements and recording of the quality of Treated Water, rate of
Treated Water flow, and volume of Treated Water. Tenaska bears the responsibility
for maintaining the Treated Water quality and flow rate at any point on its side of the
Metering Point. City shall test all metering equipment at least annually and shall
maintain the equipment within acceptable industry standards of accuracy.
Acceptable accuracy shall be variation within plus or minus three percent (3 %) at the
manufacturer's recommended testing range. Upon either Party's request such
metering equipment may be retested at the requesting Party's expense. If upon test,
said Treated Water metering equipment is found to be in error by not more than three
percent (3 %), then any previous records produced based on such meter shall be
deemed accurate, but such meter shall be immediately adjusted to record more
accurately. If such metering equipment is found to be in error by more than three
percent (3 %), then the Parties shall use reasonable efforts to determine the volume
of Treated Water actually metered at the Metering Point ( "Metered Water "; provided,
however, "Metered Water" shall not include any water delivered through the Pipeline
for the benefit of any other customer of City) during the period affected by such
error, and the equipment shall be adjusted to record accurately. City shall notify
Tenaska of the scheduled time and date of each test at least three (3) days in advance
of each test and Tenaska shall have the right to have a representative present at the
time of any test.
(b) City and Tenaska shall each have the right to have their respective representatives
examine and audit the other Party's records concerning the quality, volume and flow
rate of Water Supplied to Tenaska at the Metering Point.
(c) The City shall supply at least monthly, upon request by Tenaska, a chemical analysis
report of the Treated Water prepared by the City's laboratory or designee which
report shall include an analysis of raw water and clarified water for the analyses
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similar to that set forth in the example on the attached Exhibit "D". In the event
Tenaska desires a more comprehensive chemical analysis ofthe Water Supplied, then
the cost of such shall be borne by Tenaska.
(d) The City reserves the right of reasonable access to the Electric Plant Site to be
limited to those times reasonably agreed to in advance by Tenaska to make
inspections of the Pipeline that may affect the quality of the Treated Water or rate of
flow and perform reasonably required tests.
(e) The Parties understand that due to the nature of the Electric Plant, when Treated
Water will be taken and the rate at which the Water Supply will be taken will
fluctuate. However, City and Tenaska will make reasonable efforts to deliver and
take, respectively, Treated Water at a relatively uniform rate over a 24-hour period.
The Authority will control and operate the Pump Station as a part of the Water
Plant's operations.
5. RATES, INVOICING AND PAYMENT, • LATE CHARGE; TERMINATION OF WATER
SERVICE. During the term of this Agreement, Tenaska shall pay the City for the City's
services as follows:
(a) Predelivery. Prior to the date City begins to deliver Treated Water through the
Pipeline to Tenaska in volumes required by paragraph 3(b)(iv), Tenaska shall pay to
the City the following amounts:
(i) Standby Water Fees. An amount equal to the cost that the City is required to
pay to Authority under the Raw Water Supply Contract ("Standby Water
Fees"); and
(ii) Debt Service. An amount equal to any payments the City is required to pay
to the Authority for the Cost of Financing; and
(iii) Pipeline Improvements. Subject to the last sentence ofparagraph 3(a)(iii)(1),
thirty (30) days of receipt of City's invoice itemizing the same, an amount
equal to all direct out-of-pocket expenses, reasonably and necessarily
incurred by the City, for the acquisition, permitting, design, construction,
testing, of the Pipeline right-of-way and the Pipeline, including water used
for such tests; and
(iv) Predelivery Service Fee. $2,400 per month.
Payment Due Date. All amounts identified in paragraphs 5(a)(i) and 5(a)(ii) shall be
paid to the City by no later than the 28" day of the calendar month preceding the
calendar month in which such payment is required or due to be made by the City to
Authority.
(b) Post Delivery. After the date City has commenced the delivery of Treated Water
through the Pipeline to Tenaska in volumes required by paragraph 3(b)(iv), the City
will send an itemized invoice to Tenaska and Tenaska shall pay the City for Treated
Water the following amounts:
(i) Minimum Monthly Water Charge. A minimum monthly charge calculated
by adding:
(1) 1/12 of the minimum annual City cost for 2,190,000,000 gallons of
raw water in accordance with the Raw Water Supply Contract ( "Raw
Water Charge "); plus
(2) 1/12 of the average annual debt service for the Cost of Financing;
plus
(3) 1/12 of $450,000.00.
(ii) (1) Volume Charge.
(a) Until the City reconciles an operating budget from the
Authority that includes twelve (12) months of Electric Plant
commercial operation as provided hereunder, Tenaska shall
pay a volume charge ( "Volume Charge ") in the amount of
$.40 for each one thousand gallons of Metered Water.
Volume Charge = Metered Water ($.40)
1,000
(b) After there has been a reconciliation of such an operating
budget, Tenaska shall pay to the City a volume charge equal
to the result of multiplying the number for each one thousand
gallons of Metered Water times the quotient of the Adjusted
Huntsville Regional Water Supply System ( "HRWSS ")
Expenses (i.e., the Authority's expenses ( "HRWSS
Expenses ") for operating the HRWSS, less the line items for
all raw water less the line items for all debt service of the
HRWSS, including the Cost of Financing, less $650,000)
divided by each one thousand gallons treated by the HRWSS
in the twelve (12) month period included in the audit.
Vof ume Ch arg e =
Metered Water r HRWSS Expenses — (Raw Water + Debt Service +$650,000
L1,000 HRWSS Treated Water / 1,000
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(2) Reconciliation of Water Charge. Within thirty (30) days after the
City receives the Annual Audit Report of the Authority, the City will
prepare and deliver to Tenaska a reconciliation report
( "Reconciliation Report"). The Reconciliation Report will compare
the City's actual costs for Metered Water against payments made by
Tenaska under paragraph 5(b)(ii) for the Volume Charge
( "Reconciled Volume Charge "). The Reconciliation Report shall
identify the amount of Metered Water, the actual HRWSS Expenses
and the Reconciled Volume Charge. The Reconciled Volume Charge
is the result of multiplying each one thousand gallons of Metered
Water covered by the Annual Audit Report times the quotient (of the
Authority's actual expenses for operating the HRWSS, less the line
items for all raw water less the line items for all debt service of the
HRWSS, including the Cost of Financing, as all such items are
reported in the Annual Audit Report of the Authority, less $650,000)
divided by each one thousand gallons of all water treated by HRWSS.
Reconciled Volume Charge= AleteredWaterrHRTVSSE .penes— (Raiv Water +DebtService +$650,000)1
1,000 IL HRWSS Treated Water l 1,000 JI
If the Volume Charge paid by Tenaska exceeds the Reconciled
Volume Charge, the City will refund the difference to Tenaska when
City delivers the Reconciliation Report to Tenaska. If the Volume
Charge paid by Tenaska is less than the Reconciled Volume Charge,
Tenaska will pay the additional amount owed within thirty (30) days
of receipt of the Reconciliation Report.
Additionally, for each one thousand gallons of Metered Water in
excess of 2,190,000,000 gallons during the period covered by the
Annual Audit Report of the Authority, Tenaska shall pay the City for
the raw water at the rate of twenty -five percent (25 %) of the then
current industrial rate for potable water.
(c) Adjustment of Minimum Charge. If Tenaska Extends this Agreement under the
provisions of paragraph 2(a), then that portion of the minimum monthly charge
during any Extended Term, provided for in subparagraph 5(b)(i)(3) for the Extended
Term shall be adjusted proportionate to the change in the Consumer Price Index -
Urban published by the U.S. Department of Labor Statistics, or its successor, from
the Effective Date to the commencement of each Extended Term.
(d) Payment Due Dates: Late Charges. Tenaska shall make each payment provided for
by paragraph 5(b) by the 28`h of the month in which the invoice has been delivered.
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If Tenaska fails to pay any amount when due, interest thereof shall accrue at the rate
of ten percent (10 %) per annum from the date when due until paid.
(e) Termination of Water Service. Subject to the provisions of paragraph 13(k), if
Tenaska shall refuse, neglect or fail to pay any amount due under paragraph 5(b),
then the City shall have the right to shut off the Supply of Water at the expiration of
ten (10) days written notice to Tenaska. The shut off of the Supply of Water shall not
release Tenaska from its obligation to make payment of any amount or amounts due
or to become due under this Agreement.
6. OTHER USERS. The Parties recognize that the City may have other customers desiring to
purchase water from the City using the City's Extended Water System. Subject to City's
obligation to serve Tenaska first, the City shall have the right to use the City's Extended
Water System to serve water to other customers up to 1.4 MGD, subject also to the condition
that doing so will in no way interfere with the City providing the Supply of Water or
Tenaska's right to use the Pipeline and the Pump Station as provided in paragraph 2(b),
paragraph 2(c) or paragraph 3(d). In addition, City and Tenaska shall then enter into such
agreements as may be necessary to meter such customers' water and to provide for a
proportionate allocation of the expense of, and the responsibility for, the repair, replacement
and maintenance of the Pipeline.
7. CONTINUITY OF SERVICE.
(a) Scheduled Interruptions for Necessary Maintenance. Upon receipt by Tenaska from
City of notice prior to any scheduled suspension, interruption, delay, reduction or
other interference ( "Notice of Interruption ") of the Supply of Water ( "Interruption,
Interrupt or Interrupted "), City may temporarily Interrupt ( "Scheduled Interruption ")
the Supply of Water during (i) a period not to exceed twelve (12) hours which is
agreed to by Tenaska prior to such Interruption to correct the reason for the
Interruption and (ii) a period not to exceed the length of any shut -down of the
Electric Plant scheduled by Tenaska, written notice of which has been delivered in
advance by Tenaska to City. Whenever possible, a proposed Scheduled Interruption
shall be scheduled during such shut -down of the Electric Plant. The Notice of
Interruption shall specify the duration and extent of the proposed Scheduled
Interruption in the Water Supply and the reason therefor.
(b) Excusable Interruptions.
(i) If the Supply is Interrupted as a result of an Excusable Intemiption (as
hereinafter defined), directly affecting the City's Water System then during
the Excusable Interruption the City shall not be obligated to deliver the
Supply of Water to Tenaska.
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(ii) The term "Excusable Interruption" means acts of God, comets, drought,
earthquake, explosion, fire, flood, insurrection, landslide, lightening, meteors,
natural calamity, riot, storm, war, washout, unforeseen breakage of Pipeline,
or, the cutting of line by a third party beyond the reasonable control of the
Party affected.
(iii) In the event that either Party is rendered unable, wholly or in part, by
Excusable Interruption, to carry out its obligations under this Agreement,
except for those obligations requiring the payment of money, and if such
Party gives notice stating the reasons therefor to the other Party as soon as
practicable after the occurrence being claimed as an Excusable Interruption
then, insofar as and to the extent and for such reasonable time that such
obligations are so affected (not including those obligations requiring the
payment of money) by the Excusable Interruption, the performance
obligations of such Party shall be suspended. The suspension of the Party's
performance obligations shall be for no longer period than that necessary to
cause such inability to be remedied with reasonable dispatch.
(c) Other Interruptions. In the event of an Interruption, other than a Scheduled
Interruption or an Excusable Interruption, that interferes with the operation of the
Electric Plant, then for each day, partial or whole, of such Interruption City shall pay
to Tenaska $1,250. In any such event, Tenaska shall be entitled to set off such
amount against any payment to be made to City under this Agreement.
8. TAXES. Each Party shall pay all sales, real or personal property taxes and assessments
imposed on such Party pursuant to applicable law or local custom with respect to the
activities of generation, transportation, delivery, sale, emission, disposal or use of Treated
Water.
9. ASSIGNMENT AND DELEGATION.
(a) Except as otherwise provided herein, no right or interest in this Agreement shall be
assigned by either Tenaska or City without the written permission of the other Party
and no delegation of any obligation or of the performance of any obligation by either
Tenaska or City shall be made without the written permission of the other Party,
which permission shall not unreasonably be withheld; provided, however, nothing
contained in this paragraph 9 shall be construed to restrict Tenaska in any manner
from freely granting a security interest, transferring in trust, mortgaging,
hypothecating, assigning or otherwise transferring Tenaska's right, title and interest,
or delegating its duties under this Agreement to any institutional or commercial
lender or its collateral agent or other person, its successors or assigns providing credit
or loans to Tenaska in connection with the financing, refinancing or operation of the
Electric Plant (a "Lender ") or construed to restrict any Lender from exercising its
rights or pursuing its remedies available under any loan agreements, security
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agreements or other instruments or documents between itself and Tenaska or
otherwise available to such Lender at law or in equity; and that Tenaska may assign
this Agreement, without the prior written permission of City, to Tenaska's Lender(s),
and City will execute a consent to such assignment as may be reasonably requested
by such Lender(s). Any attempted assignment or delegation shall be void and
ineffective for all purposes unless made in conformity with this paragraph 9.
(b) Either Party may assign its rights and delegate its obligations to any subsidiary or
affiliate of such Party provided that no such assignment or delegation releases such
Party from any of its obligations.
(c) This Agreement shall be legally binding upon and shall inure to the benefit of the
Parties and their respective legal representatives, successors and permitted assigns.
10. RESPONSIBILITY OF PARTIES.
(a) Except as expressly limited by any other provision of this Agreement, City shall be
solely responsible for payment of all costs and expenses in respect to any and all loss,
action, suits, proceedings, claims, liabilities, damages, causes of action, demands,
assessments, judgements, penalties, fines, costs and expenses, including attorneys
fees (collectively "Damages") that may result or arise from or out of or in connection
with (i) any act, error, omission of the City, including any of City's performance or
nonperformance of, or under, this Agreement, (ii) any inaccuracy in or breach of or
omission from any representation or warranty made by City in this Agreement, and
(iii) any nonfulfillment, partial or total, of any of the covenants or agreements made
by City in this Agreement. Further, If Tenaska, its officers, affiliates, partners,
employees and assigns shall sustain or otherwise incur any damages as described in
the preceding sentence, City shall reimburse Tenaska, its officers, affiliates, partners,
employees and assigns for any such damages sustained or otherwise incurred by any
of them. In any circumstance, where negligence by the Parties is concurrent and
contributes to the cause of the same Damages, then each of the Parties shall be
responsible and liable to the degree of their own negligence.
(b) Except as expressly limited by any other provision of this Agreement, Tenaska shall
be solely responsible for payment of all costs and expenses in respect to any and all
loss, action, suits, proceedings, claims, liabilities, damages, causes of action,
demands, assessments, judgments, penalties, fines, costs and expenses, including
attorneys fees (collectively "Damages") that may result or arise from or out of or in
connection with (i) any act, error, omission of Tenaska, including any of Tenaska's
performance or nonperformance of, or under, this Agreement, (ii) any inaccuracy in
or breach of or omission from any representation or warranty made by Tenaska in
this Agreement, and (iii) any nonfulfillment, partial or total, of any of the covenants
or agreements made by Tenaska in this Agreement. Further, if the City, its members
of its governing body, officials, officers, employees and assigns shall sustain or
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otherwise incur any damages as described in the preceding sentence, Tenaska shall
reimburse City, its members of its governing body, officials, officers, employees and
assigns for any such damages sustained or otherwise incurred by any of them. In
any circumstance, where negligence by the Parties is concurrent and contributes to
the cause of the same Damages, then each of the Parties shall be responsible and
liable to the degree of their own negligence.
(c) For purposes of this paragraph 10, the obligation of either Party to reimburse the
other for "Damages" shall not include any of the other Party's own lost profits, or
exemplary damages.
(d) The provisions of this paragraph 10 shall survive the consummation of the
transactions contemplated by, and the termination of, this Agreement.
(e) (i) Notwithstanding anything to the contrary contained in this Agreement, City
agrees that this Agreement is solely between City and Tenaska, and City
agrees that only Tenaska (and not any of its officers, employees or partners)
shall be liable for damages or money judgments or a specific performance,
whether based upon contract (including this Agreement), warranty,
negligence, indemnity, strict liability or otherwise which may result or arise
from or out of or in connection with any act, error, omission of Tenaska
under this Agreement, including its construction of the Pipeline and the Pump
Station, its operation of the Electric Plant or from any inaccuracy in or breach
of or omission from any representation or warranty made by Tenaska in this
Agreement, or any nonfulfillment, partial or total, of any of the covenants or
agreements made by Tenaska in this Agreement.
(ii) Notwithstanding anything to the contrary contained in this Agreement,
Tenaska agrees that this Agreement is solely between City and Tenaska, and
Tenaska agrees that only City (and not any of the members of its governing
body or its officers or employees) shall be liable for damages or money
judgments or a specific performance, whether based upon contract (including
this Agreement), warranty, negligence, indemnity, strict liability or otherwise
which may result or arise from or out of or in connection with any act, error,
omission of City under this Agreement, including its construction of the
Water Intake /Plant Improvements and operation of the City's Water System
or from any inaccuracy in or breach of or omission from any representation
or warranty made by City in this Agreement, or any nonfiilfullment, partial
or total, of any of the covenants or agreements made by City in this
Agreement.
(iii) The Parties agree that any obligations or liabilities of City to Tenaska arising
from or out of or in connection with this Agreement are solely the obligations
of City's waterworks and sanitary sewer systems, including the City's Water
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Facilities, and that any of such obligations or liabilities of City to Tenaska
shall never be payable out of any fiends raised or to be raised by taxation, and
any of such obligations or liabilities of City to Tenaska shall be payable
solely as an operating expense of its waterworks and sanitary sewer systems,
including City's Water Facilities (except those obligations which are to be
funded with proceeds of bonds as provided in this Agreement), and City
covenants and agrees to establish, adjust, and revise its rates and charges for
the use and services of its waterworks and sanitary sewer systems, including
City's Water Facilities, from time to time so that its revenues of such systems
shall be sufficient to pay all operating expenses of such systems including
obligations of City to Tenaska arising from or out of or in connection with
this Agreement.
(f) Except as expressly provided in paragraph 10(c), nothing in this Agreement shall be
construed to preclude either Party from pursuing a remedy against a third party.
(g) Specific Performance Remedies. City recognizes the undertakings of City to
provide a Supply of Water, all in accordance with this Agreement, are essential to the
operation of Tenaska's Plant and that such obligations are obligations for which
failure in performance cannot be adequately measured or compensated by money
damages alone. City agrees that in addition to all other remedies at law or in equity,
Tenaska shall be entitled to the equitable remedy of specific performance of City's
obligations to provide a Supply of Water, all in accordance with this Agreement
pursuant to mandamus, mandatory injunction or other appropriate judicial remedy
to assure specific performance by City.
11. REPRESENTATIONS AND WARRANTIES. The representations and warranties made
respectively by the Parties shall remain in existence during the term of this Agreement.
(a) Tenaska represents and warrants that:
(i) Tenaska is a Texas limited partnership organized and existing under and by
virtue of the laws of the State of Texas and has the power and authority to
own its properties and to carry on the business as presently conducted and as
represented in this Agreement; and
(ii) This Agreement has been duly authorized, executed and delivered by
Tenaska; and Tenaska has all requisite corporate power and authority to
execute, deliver and perform this Agreement; and this Agreement constitutes
a valid and binding obligation of Tenaska, enforceable in accordance with its
terms and conditions; and
(iii) The execution, delivery, and performance of this Agreement will not violate,
or be in conflict with, or result in a material breach of, or constitute a default
15
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under, any material agreement, order, judgment, or decree to which Tenaska
is a party or by which Tenaska is bound; and
(iv) Tenaska will obtain as required any and all lawful authority to construct and
operate the Electric Plant; and
(v) Tenaska shall cooperate with City as may be necessary to further City's best
efforts to obtain any permits necessary for the Pipeline, such as
environmental assessments, U. S. Army Corps of Engineers' permits, storm
water permits, cultural resources (archaeological) permits, special use
permits, and Interbasin transfer permits.
(vi) Tenaska represents that its Electric Plant site is not in an area covered by a
CCN for water services and Tenaska will use its reasonable best efforts to not
be included within the CCN of any entity other than the City of Huntsville.
(b) City represents and warrants that:
(i) City is a municipal corporation duly organized, validly existing and in good
standing under and by virtue of the laws of the State of Texas and has the
corporate power and authority to own its properties and to carry on its
business as presently conducted and as represented in this Agreement; and
(ii) Except as provided in subparagraphs 11 (a)(v) and I I (b)(iii), City has lawful
authority to Supply Water as contracted for herein; and
(iii) City will use its best efforts to timely obtain all permits, including any
Interbasin transfer permit, and all authorizations and all certificates, and all
other authorities necessary to permit City to comply with the terms and
provisions of this Agreement; and
(iv) This Agreement has been duly authorized, executed and delivered by City
and that City has the requisite power and authority to execute, deliver and
perform this Agreement; and
(v) This Agreement constitutes a valid and binding obligation of City,
enforceable in accordance with and to the extent of its terms and conditions;
and
(vi) The source of the raw water supply to be delivered to Tenaska shall be from
the intake facilities of the Authority located on Lake Livingston; and
(vii) City has the authority to acquire through the power of eminent domain all
easements, licenses and other interests in real estate which may be necessary
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or appropriate for City or Tenaska to perform its obligations under this
Agreement; and City shall exercise such authority whenever necessary to
acquire any such easements, licenses and other interests in real estate; and
(viii) The execution, delivery, and performance of this Agreement will not violate,
or be in conflict with, or result in a material breach of, or constitute a default
under, any material agreement, order, judgment, or decree to which City is
a party or by which City is bound.
(c) Upon written request from Tenaska, City shall promptly deliver to Tenaska a
certificate stating that as of the date of the execution of this Agreement and as of the
Effective Date, each of City's representations and warranties contained in paragraph
I I (b) (i), (ii), (iii), (iv), (v), (vii) and (viii) are true and correct, and City shall deliver
an opinion of counsel to the same effect as to City's representations and warranties
contained in paragraphs I I (b)(i), (ii), (iii), (iv), (v), (vii) and (viii). City shall
concurrently provide Tenaska with a complete transcript of the proceedings
evidencing the authority of City to execute and deliver this Agreement, including the
incumbency of relevant members of its governing body, officials, officers or
employees and compliance with the Open Meetings Laws and all requirements of
City's charter.
(d) At the time of the written request described in paragraph 11(c), Tenaska shall
concurrently deliver to City a certificate stating that as of the execution of this
Agreement and as of the Effective Date, each of Tenaska's representations and
warranties contained in paragraph 11 (a)(i) through (iii) are true and accurate, and
Tenaska shall deliver an opinion of counsel to the same effect as to Tenaska's
representations and warranties contained in paragraph I I (a)(i) through (iii), and
Tenaska shall provide City with a complete transcript as may reasonably necessary
to evidence the authority of Tenaska to execute and deliver this Agreement, including
the incumbency of relevant officers or employees in compliance with all
requirements of its partnership agreement.
Other than as provided in paragraphs 2(a), 11 (a), 11 (b), I I (c) and 11(d), neither Party makes
any representation or warranty in this Agreement.
12. WAIVER OF SUBROGATION. Each Party shall ensure that any policy of insurance which
it carries as insurance against property damage or against general liability for property
damage or bodily injury (including death) that may occur in connection with the
construction, maintenance or operation of the City's Water System or any electrical system
used in conjunction therewith shall either name the other Party as additional insured or
include a waiver of insurer's rights of subrogation against the other Party, its successors and
assigns, and the respective directors, officers, employees, agents and representatives of such
other Party and its successors and assigns. Further, to the extent permitted by such policy,
17
each Party shall waive such rights of subrogation. Notwithstanding the foregoing, nothing
in this paragraph 12 shall affect the indemnity obligations set forth in paragraph 10.
13. MISCELLANEOUS PROVISIONS.
(a) Notices. Except as otherwise provided in this paragraph, any notice, request,
authorization, invoice, payment, direction or other communication as allowed or
required under this Agreement shall be given in writing and may be delivered in
person, or by facsimile, or by first class United States certified mail, properly
addressed, return receipt requested with the required postage prepaid, to the intended
recipient as follows:
TENASKA FRONTIER PARTNERS, LTD.
c/o TENASKA VI PARTNERS, L.P.
ATTN: Mike Lebens
1044 North 115th Street, Suite 400
Omaha, NE 68154 -4446
Phone: (402) 691 -9500
Fax: (402) 691 -9530
CITY OF HUNTSVILLE, TEXAS
ATTN: City Manager
1212 Avenue M
Huntsville, TX 77.340
Phone: (409) 291 -5400
Fax: (409) 291 -5409
In the event a Party utilizes "facsimile" transmitted signed documents, the Parties
agree to accept and to rely upon same; and the Party shall provide to the other Party,
within 72 hours of transmission, such documents bearing the original signatures.
Either Party may change its address or Designated Representative specified above
by giving the other Party reasonable notice of such change in accordance with this
paragraph. All notices, requests and authorization of directions or other
communications by a Party shall be deemed delivered when mailed as provided in
this paragraph or personally delivered to the other Party.
(b) No Partnership. This Agreement shall not be interpreted or construed to create an
association, joint venture or partnership between the Parties, nor to impose any
partnership obligations or liability on either Party. Furthermore, neither Party shall
have any right, power or authority to enter into any agreement or undertaking for or
on behalf of, to act as or be an agent or representative of or to otherwise bind the
other Party.
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(c) Nonwaiver. The failure of either Party to insist upon or enforce strict performance
by the other Party of any provision of this Agreement or to exercise any right under
this Agreement shall not be construed as a waiver or relinquishment to any extent of
such Party's right to assert or rely upon any such provision or right in that or any
other instance; rather, the same shall be and remain in full force and effect.
(d) Entire Agreement. This Agreement sets forth the entire agreement, and supersedes
any and all prior agreements of the Parties with respect to the subject matter hereof.
(e) No Specified Third -Party Beneficiaries. Except as otherwise specifically provided
in this Agreement, there are no third -party beneficiaries of this Agreement. Nothing
contained in this Agreement is intended to confer any right or interest on anyone
other than the Parties, their respective successors, assigns and legal representatives,
and the third -party beneficiaries, if any, specifically identified in this Agreement.
(f) Amendment. No change, amendment or modification of any provision of this
Agreement shall be valid unless set forth in a written amendment to this Agreement
signed by both Parties.
(g) Implementation. Each Party shall take such action (including, but not limited to, the
execution, acknowledgment and delivery of documents) as may reasonably be
requested by the other Party for the implementation or continuing performance of this
Agreement.
(h) Invalid Provision. The invalidity or unenforceability of any provision of this
Agreement shall not affect the other provisions hereof, and this Agreement shall be
construed in all respects as if such invalid or unenforceable provisions were omitted;
and to this end the terms and provisions of this Agreement are agreed to be severable.
(i) Applicable Law. This Agreement shall be interpreted, construed and enforced in
accordance with the laws of the State of Texas, except to the extent such laws may
be preempted by the laws of the United States of America.
(j) Venue. If venue is proper in Walker County, the venue of any litigation arising out
of this Agreement shall be in Walker County, State of Texas, or such other place as
the Parties may agree in writing.
(k) Disputes/Default.
(i) Prior to either Party's right to claim that the other has defaulted or otherwise
breached any obligation or other provision of this Agreement, the Parties
shall first attempt to resolve the potential claim of default or breach in
accordance with this paragraph 13(k).
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(ii) In the event either Party claims the other is in material default or either Party
disputes the validity of any agreement or warranty or representation under
this Agreement or the other's interpretation or performance of any provision
under this Agreement, including the other's failure to perform (any one or all
of which shall be referred to as a "Dispute "), the disputing Party shall notify
the other that a Dispute exists, specifying the nature and extent of the Dispute
(the "Dispute Notice "). The Dispute Notice shall be delivered to the other
Party within ten (10) days after the incident giving rise to the Dispute. The
Parties shall then make a good faith attempt to resolve the Dispute. During
such attempted Dispute resolution, the Parties shall continue to proceed in
good faith and diligently perform their respective obligations under this
Agreement.
(iii) In the event the Dispute is not resolved within twenty (20) days after the
delivery of the Dispute Notice, the disputing Party may then take legal action
in law or equity subject to the restrictions and limitations imposed by this
Agreement; provided, because the Parties agree that the nature and subject
matter of this Agreement are so unique City and Tenaska shall also have
available the remedy for specific performance.
(1) Interpretation and Fair Construction of Contract. This Agreement has been reviewed
and approved by each of the Parties. In the event it should be determined that any
provision of this Agreement is uncertain or ambiguous, the language in all parts of
this Agreement shall be in all cases construed as a whole according to its fair
meaning and not strictly construed for or against either Party. Whenever used in this
Agreement, the term (i) "including" shall mean "including without. limitation"
whether or not so specified, (ii) "term of this Agreement" shall include an Extended
Term if exercised, (iii) "NTU" shall mean a measure of relative light transmission
through a sample based on use of a nephelometer turbidity unit, and (iv) "average
turbidity" shall mean the turbidity of Treated Water based on daily samples and as
reported based upon the sum of the turbidity values obtained over each month
divided by the number of samples obtained during the month.
(m) Counterpart Originals. This Agreement may be executed in one or more
counterparts, each of which shall constitute an original but all of which together shall
constitute one instrument.
(n) Survival. Whether or not so specified in this Agreement, the representations, and
warranties identified in paragraph 2(a), paragraph 2(b), paragraph 2(c) and in
paragraph 11 (other than in paragraphs 11(a)(iv),11(a)(v), I I (b)(iii), 11 (b)(vi), 11 (c)
and 11(d)), and the remedies and indemnities, including any waivers or limitations
thereupon, of City and Tenaska contemplated herein shall survive the expiration or
termination of this Agreement.
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(o) Termination for City Default. In addition to any other right of Tenaska to terminate
this Agreement, Tenaska may terminate this Agreement for any material breach of,
or default under, this Agreement by City, including for any breach of any
representation or warranty made by City in this Agreement. Such termination shall
be effective thirty (30) days following receipt of written notice ( "Notice of
Termination ") by City from Tenaska specifying such breach or default unless such
breach or default is cured within such thirty (30) day period. In the event Tenaska
terminates this Agreement pursuant to this paragraph 13(0), Tenaska shall have no
further obligation under this Agreement, except as provided in paragraph 10.
14. CONSENT AND AGREEMENT LEGAL OPINION. The City acknowledges that, as a
condition of Tenaska obtaining financing for construction of the Electric Plant, Tenaska's
Lender(s) will require a collateral assignment of this Agreement. In connection therewith,
such Lenders will require the Tenaska to execute a collateral assignment of this Agreement
and an estoppel certificate together with a Consent and Agreement, all in a form and
substance satisfactory to the Lenders, as well as deliver an opinion from legal counsel as to
the organization and standing of the City, the validity and proper execution of this
Agreement, and like matters. The City agrees to execute and deliver such Consent and
Agreement and to deliver such opinion of legal counsel as such Lenders may reasonably
require and in form and substance as the Lenders and City may reasonably agree.
15. OPTION TO TERMINATE. Tenaska may, in its sole discretion, terminate this Agreement
upon notice to the City ( "Notice of Termination for Convenience "); provided, however, that
in the event of such termination Tenaska shall remain obligated to pay to the extent incurred
by the City prior to the delivery date of the Notice of Termination for Convenience: (i) the
Cost of Financing (in accordance with the terms of the financing instruments, which shall
include the right to pay the unamortized principal and accrued interest in a lump sum amount
at Tenaska's discretion if the financing instruments so allow); provided that such obligation
shall be reduced to reflect Tenaska's share of Treated Water usage of the City's Extended
Water System if they are being used by the City to provide Treated Water to customer(s)
other than Tenaska, phis (ii) the amount necessary to reimburse the City for any Standby
Water Fees that the City is obligated to pay to the Authority under paragraph 5(a)(i) and
paragraph 5(a)(iii), plus (iii) any amount due to City pursuant to [paragraph 5(a)(iv) or]
paragraph 5(b); provided, that any amount due in connection with the Raw Water charge
shall be limited to the amount accrued through the effective date of such termination; plus
(iv) those amounts reasonably and necessarily incurred by City in connection with the
preparation of the preliminary Plans and Specifications or other documents to be developed
in accordance with paragraph 3(a)(iii)(3). The Notice of Termination for Convenience shall
notify City of Tenaska's decision to terminate this Agreement as of the date specified in the
Notice of Termination for Convenience. A decision to terminate made in accordance with
this paragraph 15 shall be enforceable without obligation in the fiuture for Tenaska, except
as expressly provided in paragraph 10 or this paragraph 15.
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16. INSURANCE. During the term of this Agreement, the Parties shall be obligated to procure
and maintain, each at their respective cost and expense, the following policies of insurance:
(a) Insurance to be maintained by City:
(i) All -Risk Builder's Risk. Until completion of construction of the Water
Intake/Plant Improvements, the City shall maintain "All- Risk" Builder's Risk
insurance in a form acceptable to Tenaska which includes coverage for flood,
earthquake, transit and testing perils in an amount equal to the full
replacement value of the Water Intake/Plant Improvements. At Tenaska's
option, Tenaska may elect to include the construction of the Water
Intake/Plant Improvements under its master builder's risk program.
(ii) Upon completion of the Water Intake/Plant Improvements and throughout the
term of the Agreement, the City shall maintain "all- risk" property and
machinery breakdown insurance which includes coverage for flood and
earthquake perils in an amount equal to the full replacement cost of the Water
Intake/Plant Improvements, Pipeline and Pump Station.
(iii) Commercial General Liability. Throughout the term of the Agreement, the
City will maintain Commercial General Liability insurance for bodily injury
(including death) and property damage with a combined single limit of
$1,000,000 per occurrence and in the aggregate. Such insurance shall include
but not be limited to coverage for broad form contractual liability, XCU
hazards, broad form property damage liability, personal injury liability,
independent contractors, products and completed operations liability.
(iv) Comprehensive Auto Liability. Throughout the term of the Agreement, the
City will maintain Comprehensive Auto Liability coverage with bodily injury
(including death) and property damage with a combined single limit of
$1,000,000 per occurrence and in the aggregate.
(v) Worker's Compensation and Employers' Liability. Throughout the term of
the Agreement, the City will maintain Worker's Compensation insurance
which complies with the statutory limits of the workers' compensation laws
of the State of Texas and Employers' Liability insurance with limits of
$1,000,000 each accident and $1,000,000 disease policy limit/each employee.
(vi) Excess Umbrella Liability Insurance. Throughout the term of the Agreement,
the City will maintain Excess Umbrella Liability Insurance with a limit of
[$1,000,000] per occurrence and in the aggregate.
The City shall also cause its contractor(s) for the Water Intake/Plant Improvements
to comply with the above insurance requirements.
22
(b) Insurance to be maintained by Tenaska:
(i) All -Risk Builder's Risk. Until completion of construction ofthe Pipeline and
Pump Station, Tenaska shall maintain, or cause to be maintained "All- Risk"
Builder's Risk insurance including coverage for flood, earthquake, testing
and transit perils in an amount equal to the full replacement cost of the
facilities being constructed.
(ii) Commercial General Liability. Until such time as the ownership of the
Pipeline and Pump Station has been transferred to the City as required by this
Agreement, Tenaska will maintain Commercial General Liability insurance
for bodily injury (including death) and property damage with a combined
single limit of $1,000,000 per occurrence and in the aggregate. Such
insurance shall include but not be limited to coverage for broad form
contractual liability, XCU hazards, broad form property damage liability,
personal injury liability, independent contractors, products and completed
operations liability.
(iii) Comprehensive Auto Liability. Throughout the term of this Agreement,
Tenaska will maintain Comprehensive Auto Liability coverage with bodily
injury (including death) and property damage with a combined single limit
of $1,000,000 per occurrence and in the aggregate.
(iv) Worker's Compensation and Employers' Liability. To the extent that
Tenaska has any employees, Tenaska will maintain, until such time as the
ownership of the Pipeline and Pump Station has been transferred to City as
required by this Agreement, Worker's Compensation insurance which
complies with the statutory limits of the workers' compensation laws of the
State of Texas and Employers' Liability insurance with limits of $1,000,000
each accident and $1,000,000 disease policy limit/each employee.
(v) Excess Umbrella Liability Insurance. Until such time as the ownership of the
Pipeline and Pump Station has been transferred to City as required by this
Agreement, Tenaska will maintain Excess Umbrella Liability Insurance with
a limit of [$1,000,000] per occurrence and in the aggregate.
(c) Waiver of Subrogation. The City and Tenaska hereby agree to waive its and its
insurers rights of subrogation against the other Party and the City further agrees to
waive its rights of subrogation against Tenaska's Lenders and any other parties as
reasonably requested by Tenaska.
(d) Additional Insured Status. The City hereby agrees to add Tenaska and Tenaska's
lenders identified to City by Tenaska any time during the term of this Agreement and
any other parties as reasonably requested by Tenaska as additional insurers under the
23
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policies of insurance required in Section 16(a)(iii), (iv) and (vi). Tenaska hereby
agrees to add the City as an additional insured under the policies of insurance
required in Section 16(b)(ii), (iii) and (v).
(e) Evidence of Coverage. Prior to the commencement of construction, each Party will
provide certificates of insurance to the other Party as evidence of the insurance
coverages required. In addition, on or before the expiration date of any policy of
insurance required under this paragraph 16, the Party will provide certificates of
insurance evidencing the renewal of such coverage. All policies of insurance
required in this paragraph 16 will provide for 30 days' written notice prior to
cancellation except for non - payment of premiums which shall require 10 days' prior
written notice.
(f) Availability of Insurance. If either Party is unable to obtain the required insurance
coverages or the required limits of any such coverage are not available in the
commercial market on reasonable terms, such Party shall deliver notice of such fact
to the other Party, with a description of its reasonable efforts to satisfy such
requirement. The obligation to maintain a particular coverage under this Agreement
or the limit of such coverage shall be waived or modified (for so long a coverage is
not able to be obtained in the commercial market on reasonable terms) but only if the
lender then holding the first priority security interest in the Electric Plant has agreed
that such coverage is not required to be maintained or that the amount of such
coverage may be so reduced.
(g) Other Insurance. The Parties may elect to purchase additional insurances for its
respective interests.
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed
by their duly authorized representatives all as of the day and year first above written.
Attest:
CITY OF HUNTSVILLE, TEXAS
Danna Welter, City Secretary William B. Green, Mayor
APPROVED:
Scott Bounds, City Attorney
24
+r.
TENASKA FRONTIER PARTNERS, LTD.
By: Tenaska VI Partners, L.P.
Managing General Partner
By: Tenaska VI, Inc.
Managing General Partner
By: _
Title:
EXHIBIT "A" - Huntsville Regional Water Supply System Water Treatment Plant and Intake
Improvements
EXHIBIT "B" - Pipeline and Pump Station Improvements
EXHIBIT "C" - Raw Water Supply Contract
EXHIBIT "D" - Trinity River Authority Lake Livingston Laboratory Chemical Analysis Report
25
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t
r,
EXHIBIT "A"
HUNTSVILLE REGIONAL WATER SUPPLY SYSTEM
WATER TREATMENT PLANT AND INTAKE IMPROVEMENTS
TREATED WATER DELIVERY
1. Raw Water Pump Station Improvements
2 - new 6 -8 MGD pumps
1 - 2 new 4 MGD pumps
New pump control valves
New electrical switchgear
New standby generator capability
Instrumentation/Controls
Wetwell enclosure
New suction line to Trinity River
Access Improvements
New bridge crane
2. Two 65 -foot Diameter Solids Contact Clarifiers with Tube Settlers/PipingNalves /Additional
Chemical Feed/Flow Meter /One New Sludge Holding Pond
3. One treated water splitter box arrangement/PipingNalves /Controls
26
a
EXHIBIT "B"
PIPELINE AND PUMP STATION IMPROVEMENTS
1. 24 -inch Water Supply Pipeline system within a 50 -ft wide easement with 25 -ft wide
additional temporary workspace originating at the Pump Station to be located at the
Trinity River Authority Huntsville Regional Water Supply Plant and extending
approximately 30 miles to the Electric Plant site.
2. Pump Station
3 - 3.5 MGD /400 HP Vertical Turbine, Outdoor Pumping Units with Wetwell and
Standby Generator Capability
Piping / Valves /Electrical /Controls/Monorail
27
EXHIBIT licit
HUNTSVILLE RAW WATER SUPPLY CONTRACT
STATE OF TEXAS
COUNTY OF WALKER
THIS CONTRACT (hereinafter called "Contract') is made and entered into as of the
22nd day of April, 1998, by and between the Trinity River Authority of Texas, a governmental
agency and a body politic and corporate, created by Chapter 518, Acts of the Regular Session
of the 54th Legislature, pursuant to Article XVI, Section 59 of the Constitution of Texas (herein
called "Authority's, and the City of Huntsville, Texas, a municipal corporation of the State of
Texas, acting under the laws of the State of Texas and its home rule charter (herein called
"City").
WHEREAS, the City entered into a raw water purchase contract with the Authority on
August 24, 1976 which provided initially for 2 million gallons per day (MGD) of water for use by
the City from Lake Livingston for municipal purposes, with incremental increases for up to a
maximum of 10 MGD through the year 2020; and
WHEREAS, the City's current commitment under the agreement is for 8 MGD on a "take
or pay' basis, with actual use at approximately 5 MGD; and
WHEREAS, the City has now requested that the Authority structure a supplemental raw
water supply agreement for the purchase of 6 MGD of raw water for industrial purposes; and
WHEREAS, the Authority is willing to supply the City with up to 6 MGD of raw water for
industrial purposes at an initial water cost of $0.08 per 1000 gallons ($175,200 per year), on a
"take or pay" basis through December 2020;
NOW THEREFORE, in consideration of the mutual covenants and agreements herein
contained, Authority agrees to sell raw water for industrial purposes to the City and the City
agrees to pay Authority standby charges for the right to purchase raw water upon terms and
conditions hereinafter set forth, to-wit
ARTICLE I
COST AND QUANTITY OF RAW WATER
The Authority shall reserve or supply up to 6 MGD of raw water (quantified herein as
annual average daily amounts) from its Lake Livingston Reservoir to sell to the City for industrial
purposes, at an initial water cost of $0.08 per 1000 gallons.
ARTICLE 2
INTERIM STANDBY CHARGE
The City agrees that in the event it does not divert the quantity of water established in
Article 1 above, it shall pay to the Authority an annual interim standby charge of $175,200.00
per year in consideration for the Authority's current annual commitment of six (6) MGD of raw
water from its share of the Livingston Reservoir. Payments shall be due and payable under this
Section in semiannual installments on or before the tenth day of March and the tenth day of
I r ,
September of each year beginning with the initial payment due September 10, 1998 and
continuing until such time as this provision may be superseded by the City's diversion of water
as referenced in Article I above. The parties agree that the rates and methods of calculating
rates may be amended by the Authority's adoption of new rates and methods of calculating
rates, but in no event, for purposes of establishing future rates under provisions of this Contract,
shall any amended rate be implemented other than at subsequent five-year intervals from the
anniversary of the effective date of this Contract. Additionally, any increase in water cost so
adopted shall be limited to no greater than fifteen percent (15%) over the contractual unit price
of water in effect at the time of such increase.
The City's right to take such amounts of raw water is conditioned on Authority's rights
under State Permit No. 1970, which Authority holds jointly with the City of Houston, Texas, and
Authority's contract with the City of Houston dated September 4, 1964 (the "Houston Contract").
If Authority's rights under Permit No. 1970 are changed by any action beyond the control of
Authority, and any such change reduces, or has the effect of reducing, the amount of water
Authority has the right to take, then, in that event, City's rights hereunder shall be reduced
proportionately by the percentage of the decrease Authority has the right to take under Permit
No. 1970.
If Permit No. 1970, the Houston Contract, or any other controlling document is changed
outside the control of Authority, which obligates Authority to costs not anticipated in the rate
structure established by this Contract, then Authority shall redetermine its cost of water in
Livingston Reservoir and City's payments hereunder shall be calculated as provided herein, but
using the newly established rate structure.
ARTICLE 3
EXCESS WATER
Should the City desire to contract for raw water supplies in addition to those committed
hereunder the Authority agrees, subject to the availability of its raw water, to commit said
additional water supplies based on rates as may be deemed reasonable by the Authority.
ARTICLE 4
SOURCE OF CONTRACT PAYMENTS
Authority shall not demand payment by City of any obligations assumed by it or imposed
on it under and by virtue of this contract from funds raised or to be raised by taxes levied by
City. City's obligations under this contract shall not be construed to be a debt of the City of such
kind as to require it under the law of this State to levy and collect a tax to discharge such
obligation, it being expressly understood by the parties hereto that all payments due by City
hereunder are to be made from water and sewer revenues received by City. City represents
and covenants that all payments to be made hereunder by it shall constitute "Operating
Expenses" of its waterworks and sewer system as defined in Article 1113 of the Revised Civil
Statutes of Texas, as amended, and that ail such payments will constitute operating expenses
of City's waterworks and sewer system.
City agrees to fix and collect such rates and charges for water and sewer services to be
supplied by its waterworks and sewer system as will produce revenues in an amount equal to at
least the minimum payments due under this contract and other contracts with the Authority and
to comply with provisions of ordinances authorizing its outstanding revenue bonds.
0�1
The parties agree that the duties and obligations of each as governmental entities are
subject to limitations regarding appropriations under the State Constitution.
ARTICLE 5
FILING OF PLANS
Before diverting water hereunder the City shall file and have approved by Authority
detailed plans and specifications showing the location, size, and capacity of the diversion
structure and a legal description of (bearing and distance from a known survey point) the
intended point of diversion. In addition Authority must approve the point and rate of diversion.
The cost of diversion facilities and costs associated with the operation and maintenance thereof
shall be bome by the City.
ARTICLE 6
METERING
The City shall provide, operate, and maintain a meter or meters, approved by Authority,
to record monthly water diverted. For the purpose of accounting for water, the City shall
determine the amount of water diverted each month by recording, as a minimum, the reading on
the City's meter on the last day of each calendar month. The City shall report such reading to
Authority monthly. Authority reserves the right to read and inspect the meter or meters during
normal business hours. If requested in writing by Authority, the City shall calibrate its water
meter or meters. Authority shall have the opportunity to have a representative present during
such calibration. If upon any test of the water meter the percentage of inaccuracy of such
metering equipment is found to be in excess of two (2) percent, registration thereof shall be
corrected for a period extending back to the time when such inaccuracy began, if such time is
ascertainable, but in no event further back than a period of six (6) months. If the meter is out of
service so that the amount of water delivered cannot be ascertained or computed from the
reading thereof, the water delivered through the period such meter is out of service shall be
estimated and agreed upon by the parties on the basis of the best data available. Authority
reserves the right to install a check meter; it being understood that in no event shall Authority be
liable for any special or consequential damages occasioned by the installation of said check
meter.
ARTICLE 7
TERM OF CONTRACT
This Contract shall be effective upon the date hereof and shall continue in force and
effect until December 31, 2020. Any renewal shall be based upon terms and conditions
mutually agreed to by the parties hereto.
ARTICLE 8
ADDRESSES AND NOTICE
All notices, payments and communications required herein shall be sent, respectively, to
the Southern Region Manager of the Trinity River Authority of Texas at P.O. Box 1554
Huntsville, Texas 77340 and to the City Manager of the City of Huntsville at P. 0. Box 831
Huntsville, Texas 77340
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ARTICLE 9
CERTIFIED NOTICE
Any notice of breach of this Contract notice of forfeit, or notice of force majeure by either
party shall be sent by certified mail with return receipt requested to the addresses stated above.
The parties shall have the right from time to time and at any time to cKange their respective
addresses and both will have the right to specify as its address any other address by giving at
least fifteen (15) days' written notice to the other party.
ARTICLE 10
DEFAULT
In the event that either the City or Authority shall breach or fail to perform any of the
provisions of this Contract, the aggrieved party shall promptly notify the other party of the
breach or failure to perform. In the event such breach or failure to perform is not cured within
thirty (30) days after the receipt of such notice, the party sending the notice, at its discretion,
may notify the other party of its intention to declare this Contract forfeited and null and void.
Upon receipt of such notice the violating party shall have thirty (30) days to cure such violation
prior to final action by the other party declaring this Contract forfeited and null and void. Any
notice requirement under the terms of this section shall be in writing and shall be delivered by
certified mail in accordance with Articles 8 and 9 above.
No failure on the part of either party to this Contract to require the performance by the
other party of any portion of this Contract shall in any way affect either party's right to enforce
such provision, nor shall any waiver by either party to taken or held to be a waiver of any other
provision. No rights under this Contract may be waived and no modification or amendment to
this Contract may be made except by written amendment executed by the parties,
ARTICLE 11
SEVERABILITY
The parties hereto agree that if any of the provisions of this Contract should be or be
held to be invalid or to contravene the laws of this State, or the United States, such fact shall not
invalidate the entire Contract, but it shall be construed as though not containing that particular
provision, and the rights and obligations of the parties shall be construed and remain in force
accordingly.
ARTICLE 12
CONTRACT ASSIGNMENT
The City understands and agrees that this Contract may not be assigned and raw water
diverted by the City hereunder shall not be resold without the express written consent of
Authority..
ARTICLE 13
TERMINATION
This Contract may be terminated upon mutual written consent of the parties hereto.
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ARTICLE 14
VENUE
The place of performance as agreed to by the parties to this Contract shall be Tarrant
County, Texas. In the event any legal proceeding is brought to enforce this Contract or any
provision hereof the same shall be brought in said Tarrant County, Texas.
ARTICLE 15
FAILURE TO DELIVER
The City understands that Authority has made commitments of water available to
Authority under Permit No. 1970, as amended, prior to the effective date of this Contract. The
City agrees that in the event of water shortage, Authority shall incur no liability for the reduction
or termination of sales of water hereunder, when, in Authority's sole judgment such action is
necessary to comply with any order of any court or administrative body or any statute or
regulation of any governmental body having appropriate jurisdiction.
ARTICLE 16
QUALITY OF RAW WATER
Water sold hereunder is non-potable, raw untreated water. Authority expressly disclaims
any warranty as to the quality or suitability for use by the City. The City agrees that any
variation in the quality or characteristics of water contemplated for sale hereunder shall not
entitle the City to avoid its obligation to make payments provided for herein. THERE ARE NO
WARRANTIES THAT EXTEND BEYOND THE DESCRIPTION HEREIN.
ARTICLE 17
PAYMENT OF TAXES
In the event any sales or use taxes, or taxes of any similar nature are hereafter imposed
on gathering, taking, sale, use, or consumption of the water received by the City hereunder, the
amount of such taxes shall be bome by the City. In addition to all other charges, and whenever
Authority shall be required to pay, collect, or remit any such taxes on water received by the City,
then the City shall promptly reimburse Authority therefor.
ARTICLE 18
DELINQUENT PAYMENTS
All amount due and owing to Authority by the City shall, if not paid when due, bear
interest at the rate of ten (10) percent per annum from the date when due until paid. If any
amount due and owing by the City to Authority is placed with an attorney for collection, the City
shall pay to Authority reasonable attorneys' fees, in addition to all other payments provided for
herein, including interest.
ARTICLE 19
FORCE MAJEURE
In the event that the performance by the parties hereto of any of the parties' obligations
or undertaking hereunder shall be interrupted or delayed by an occurrence and not occasioned
by the conduct of either party hereto, whether such occurrence be an act of God or the common
enemy or the result of war, dot, civil commotion, sovereign conduct, or the act or conduct of any
5
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person or persons not party or privy hereto, then the parties shall be excused from such
performance for such period of time as is reasonably necessary after such occurrence to
remedy the effects thereof. No damage shall be recoverable from Authority by reason of the
suspension of the delivery of water due to any of the causes above mentioned, and no failure of
Authority to meet any obligations by reason of force majeure shall relieve the City from its
obligations to make payments required under the terms of this Contract
ARTICLE 20
STATE OR FEDERAL LAWS, RULES, ORDERS OR REGULATIONS
This Contract is subject to all applicable Federal, State and local laws and any
applicable ordinances, rules, orders and regulations of any local, State or Federal governmental
authority having or asserting jurisdiction. Nothing contained herein shall be construed as a
waiver of any right to question or contest any such law, ordinance, order, rule or regulation in
any forum having jurisdiction, and each party agrees to make a good faith effort to support such
proposed laws and regulations which would be consonant with the performance of this Contract
in accordance with its terms.
ARTICLE 21
CONTRACTUAL AMENDMENT
The effectiveness of this Contract is dependent upon the Authority and the City
complying with the rules and regulations of the Texas Natural Resource Conservation
Commission The Authority will file an executed copy of this Contract with the Executive Director
of said Commission pursuant to the rules of the Commission. The City shall submit an annual
written report to the foregoing Commission, on forms provided by said Commission, in
accordance with applicable Commission rules indicating the total amount of water diverted
under this Contract each week and each month. In addition, on or before the 5th day of each
month, the City shall furnish to Authority, on forms provided by Authority, the total amount of
water diverted under this Contract during the prior month.
ARTICLE 22
INDEMNITY
To the extent it legally may, the City hereby agrees to indemnify Authority and provide a
legal defense for and/or hold Authority harmless from and defend any claim that may arise in
connection with any claim that may arise as a result of this Contract, including but not limited to
the quality, quantity, use, misuse, transportation, and metering of water or the installation,
inspection, adjusting, and testing of metering equipment, except to the extent of gross
negligence on the part of Authority.
IN WITNESS WHEREOF, the parties hereto acting under authority of their respective
governing bodies have caused this Contract to be duly executed in several counterparts, each
of which is deemed to be an original and as of the day and date first written above.
TRINITY RIVER AUTHORITY OF TEXAS
DANNY F. VANCE, General Manager
0
CITY OF HUNTSVILLE, TEXAS
WILLIAM B. GREEN, Mayor
ATTEST.
JAMES L. MURPHY, Secretary
Board of Directors
(SEAL)
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(CITY SEAL)