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<br />this __ day of November, 1989, by and between the CITY OF KANNAPOLIS, North
<br />Carolina (hereinafter referred to as "KANNAPOLIS"), and CABARRUS COUNTY
<br />(hereinafter referred to as "CABARRUS");
<br /> W I T N E S S E T H: that --
<br /> WHEREAS, simultaneously with the execution of this Agreement, KANNAPOLIS
<br />and CABARRUS have executed an Agreement (the "Reservoir Agreement") with regard
<br />to the construction, operation and maintenance of a dam, lake and watershed in
<br />Cabarrus County, North Carolina, on Coddle Creek (hereinafter referred to as the
<br />"Reservoir") for the storage of raw water and the use thereof; and
<br /> WHEREAS, KANNAPOLIS has leased a water filter plant and treatment facility
<br />known as the Kannapolis Water Company Water Filter Plant ("the KWC Water Filter
<br />Plant") with an option to purchase the same from the Water Company Acquisition
<br />Corporation; and
<br /> WHEREAS,.from among other sources, the KWC Water Filter Plant derives raw
<br />water from Coddle Creek for treatment and distribution; and
<br /> WHEREAS, KANNAPOLIS desires to sell treated water to CABARRUS and CABARRUS
<br />desires to purchase treated water from KANNAPOLIS;
<br /> NOW, THEREFORE, in consideration of the premises herein, the terms of the
<br />Reservoir Agreement and the mutual covenants and agreements hereinafter set
<br />forth, KANNAPOLIS and CABARRUS 'agree as follows:
<br /> 1. Purpose. The purpose of this Agreement is to establish a basis for
<br />cooperation between KANNAPOLIS and CABARRUS with regard to the sale of treated
<br />water by KANNAPOLIS to CABARRUS.
<br /> 2. Duration of Agreement. The duration of this Agreement is forty (40)
<br />years, which term shall be automatically renewed for successive periods of
<br />twenty (20) years each, unless amended or terminated as to executory matters in
<br />the manner set forth in Paragraph 5 of this Agreement.
<br /> 3. Treated Water Authorization. Effective with the execution of this
<br />Agreement, KANNAPOLIS grants to CABARRUS, together with other customers, the
<br />non-exclusive, continuing right and authority to consume and receive treated
<br />water from the KWC Water Filter Plant to the extent of the available rated
<br />capacity thereof, at the rate set forth in Paragraph 4. KANNAPOLIS shall not
<br />unreasonably or arbitrarily withhold delivery of such amounts of treated water.
<br />It is, however, specifically PROVIDED THAT:
<br /> (a) The treated water furnished and delivered to CABARRUS by
<br /> KANNAPOLIS shall be of a quality consistent with or exceeding all
<br /> applicable federal and state regulatory standards, including, but
<br /> not limited to, the Federal Safe Drinking Water Act and the North
<br /> Carolina Drinking Water Act (N.C.G.S. 130A-311, et sec., as
<br /> presently existing or subsequently amended; and
<br /> (b) Notwithstanding the foregoing, KANNAPOLIS shall not be
<br /> liable to CABARRUS, in damages or otherwise, for the failure to
<br /> furnish treated water, as set forth herein, or for the quality of
<br /> same, arising from the existence of a condition or conditions that
<br /> objectively preclude the delivery of treated water to any customer
<br /> of KANNAPOLIS, e.g. contamination, equipment failure, act of God,
<br /> or like conditions beyond the control of KANNAPOLIS.
<br /> 4. Treated Water Charge. For all treated water sold or delivered by
<br />KANNAPOLIS to CABARRUS or received by CABARRUS from KANNAPOLIS pursuant to this
<br />Agreement or otherwise, KANNAPOLIS shall charge CABARRUS no more than the
<br />lowest/best treated water rate (whether denominated bulk, industrial,
<br />institutional, commercial, residential or otherwise) which KANNAPOLIS charges
<br />to any of its customers (the "Treated Water Charge"), PROVIDED THAT:
<br /> (a) the Treated Water Charge, if any, of KANNAPOLIS to
<br /> Fieldcrest Cannon, Inc., shall not constitute or otherwise be
<br /> considered to be a Treated Water Charge or rate under the provisions
<br /> of this Agreement;
<br /> (b) the Treated Water Charge may increase or decrease due to
<br /> debt service, capital outlays, maintenance and operation costs;
<br /> (c) if the Treated Water Charge is a graduated rate based upon
<br /> the amount of usage in any billing period, CABARRUS shall be subject
<br /> to the same graduated rate schedule;
<br /> (d) KANNAPOLIS shall notify CABARRUS of any change in the
<br /> Treated Water Charge at least thirty (30) days prior to the
<br /> effective date thereof;
<br /> (e) KANNAPOLIS shall bill CABARRUS in accordance with its
<br /> established billing cycle based upon readings from metering stations
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