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<br /> (c) 'KANNAPOLIS shall pay to CABARRUS the KWG Expense,.'less the
<br /> sum of $25,000.00 disbursed to CABARRUS by Atlantic American
<br /> Properties, Inc., under the provisions of Paragraph 7.13.2 of the
<br /> KWG Acquisition Agreement, and CABARRUS shall deliver to KANNAPOLIS
<br /> copies of all engineering or other studies i~ process or completed
<br /> regarding the KWG Water System prepared by HDR Engineering of North
<br /> Carolina, Inc., project engineers for the Reservoir; and
<br /> (d) Subject to the provisions of Paragraphs 9 and 10, for the
<br /> sum of One Dollar ($1.00), CABARRUS shall lease to KANNAPOLIS that
<br /> portion of the KWC Real Property set forth and described in "Exhibit
<br /> B" attached hereto and incorporated herein by reference. The lease
<br /> shall commence on the' Closing Date and shall terminate on the
<br /> Completion Date.
<br /> 6. Acknowledgment of and Compensation for Historic Floor Amount for
<br />KANNAPOLIS and Designation as Customer of the Reservoir. As consideration to
<br />KANNAPOLIS, as the successor to KWC, for KWG's historic usage of raw water from
<br />Coddle Creek, as withdrawn through the Existing Pump Station or otherwise, upon
<br />the Completion Date, CABARRUS hereby designates KANNAPOLIS as a customer of the
<br />Reservoir and reserves and grants to KANNAPOLIS a right of first refusal to Two
<br />Million(2,000,000) gallons per day of the available yield (the"Historic Floor
<br />Amount" for KANNAPOLIS) at the AME rate set forth in Paragraph 3(a), but such
<br />yield amount shall not be accumulated.
<br /> 7. Additional Raw Water Authorization. Upon the Completion Date, in
<br />addition to its Historic Floor Amount, CABARRUS grants to KANNAPOLIS, together
<br />with other customers, if any, the non-exclusive, continuing right and authority
<br />to withdraw, consume and receive raw water from the Reservoir, to the extent of
<br />the net available yield thereof, subject to and limited only as follows:
<br /> (a) In the event of the existence of maximum use conditions, drought
<br />conditions (but only for the drought rationing period), or other objective
<br />restrictive conditions requiring the rationing of the net available yield,
<br />CABARRUS may limit the withdrawal, consumption and receipt of raw water by
<br />KANNAPOL%S to a proportionate quota of the net available yield computed as
<br />follows:
<br /> KANNAPOLIS's average daily consumption of the net available yield
<br /> from the Reservoir over the twelve (12) month period immediately
<br /> preceding the declaration of the existence of such condition or
<br /> conditions shall be divided by the total average daily consumption
<br /> of all customers of the net available yield from the Reservoir, and
<br /> the quotient thereof shall be multiplied by the Reservoir's net
<br /> available yield, but such amount shall not be accumulated; and
<br /> (b) Withdrawal, consumption and receipt of raw water by KANNAPOLIS in any
<br />event will be limited to the maximum capacity of the existing pump station or
<br />the new pump station constructed by GABARRUS. Any modification, expansion or
<br />replacement of any or all portions of the existing pump station and/or the new
<br />pump station or appurtenant facilities (the "Existing Raw Water Line") which
<br />would result in additional withdrawal (or pumping) capacity above 2.6 MGD must
<br />be submitted to CABARRUS for approval. CABARRUS reserves the right to regulate
<br />the maximum withdrawal capacity for any and all of its customers at all times.
<br /> (c) In any event, CABARRUS shall not be liable to KANNAPOLIS, in damages
<br />or otherwise, for the failure to furnish raw water to KANNAPOLIS from the
<br />Reservoir as set forth in Paragraphs 6 or 7 of this Agreement, or for the
<br />quality of same, arising from the existence of any or all of the restrictive
<br />conditions defined in Paragraph 3(n) that objectively preclude the delivery of
<br />any or all raw water from the Reservoir, e.g. contamination, structural or
<br />mechanical failure, act of God, or like conditions beyond the control of
<br />CABARRUS.
<br /> 8. Raw Water Charge. While KANNAPOLIS and CABARRUS acknowledge that the
<br />Raw Water Charge may increase or decrease due to debt service, capital outlays,
<br />and/or maintenance and operation costs for the Reservoir, for any and all raw
<br />water drawn or received by KANNAPOLIS from the Reservoir, the Raw Water Charge
<br />to KANNAPOLIS shall be no more than the lowest/best raw water rate, (whether
<br />denominated bulk, industrial, institutional, commercial, residential or
<br />otherwise) which CABARRUS charges to any of its customers from the Reservoir,
<br />PROVIDED THAT:
<br /> (a) for any Historic Floor Amount which CABARRUS establishes
<br /> or acknowledges in this Agreement or otherwise, the Raw Water Charge
<br /> therefor shall not be considered as a "lowest/best raw water rate"
<br /> as identified in this paragraph;
<br /> (b) for the Historic Floor Amount of KANNAPOLIS, the Raw Water
<br /> Charge to KANNAPOLIS shall not exceed the AME as defined in
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