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"EXHIBIT A" <br /> <br />UTILITY SERVICES OPERATING AGREEMENT <br /> <br /> This Utility Services Operating Agreement is made this <br />2!st day of August, 1989 among the City of Kannapolis ("City"), a <br />political subdivision of the State of North Carolina, Water <br />Company Acquisition Corporation ("Subsidiary"), a North Carolina <br />nonprofit corporation, and Fieldcrest Cannon, Inc. <br />("Fieldcrest"), a Delaware corporation. <br /> <br />STATEMENT OF PURPOSE <br /> <br /> By Agreement of Purchase and Sale dated August 21, 1989 <br />(the "Purchase Contract"), Subsidiary has agreed to purchase from <br />Kannapolis Water Company, a partnership organized and existing <br />under the laws of North Carolina, the Water Treatment Facility <br />(as defined below), the water and sewer distribution lines, lift <br />stations, pipelines and pump stations to Coddle Creek and Second <br />Creek, administrative offices, water storage tanks and the right <br />to draw water from Kannapolis Lake. City intends to lease the <br />Water Treatment Facility from Subsidiary under lease agreement <br />("Lease"). Fieldcrest, as a joint venture partner of Kannapolis <br />Water Company, has maintained and operated the water and sewer <br />systems pursuant to a Certificate of Public Convenience and <br />Necessity issued by the North Carolina Utilities Commission. <br />City, recognizing the need for the particular expertise and <br />experience of Fieldcrest in operating the water facilities which <br />Subsidiary has agreed to purchase from Kannapolis Water Company <br />and City intends to lease from Subsidiary under the Lease, wishes <br />to contract for the continued management and operation of the <br />Water Treatment Facility by Fieldcrest on behalf of City in <br />consideration of City providing water to Fieldcrest all pursuant <br />to the terms and conditions of the following agreement. <br /> <br />AGREEMENT <br /> <br /> !. The System. The Water Treatment Facility consists <br />of raw water intake, all piping between the intake structure and <br />the water treatment plant, two (2) auxiliary raw water pumping <br />stations and transmission lines (Coddle Creek and Second Creek), <br />rapid mix basin and coagulation/settling basin, three (3) 702 sq. <br />ft. each rapid sand filters, dual media-anthracite and sand, a 4 <br />million gallon finished water clear well (2 million gallon <br />potable, 2 million gallon process), chemical feed system (for <br />coagulation, ph adjustment, corrosion control, disinfection, <br />floridation, taste and odor control), high service distribution <br />pumping facilities, laboratory for operational control and <br /> <br /> <br />