1998-141-RES WHEREAS, CITY COUNCIL DID HERETOFORE ONTHE 8TH DAY OF JUNE eretofore, on the 8th day of June,

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(e) The Financial Closing shall have occurred. ARTICLE III PURCHASE AND SUPPLY OF RAW WATER Section 3.01. Purchase and Supply of Raw Water. The City agrees to make available for sale to Panda at the Supply Delivery Point up to eight (8) million gallons per Day of Raw Water from the Source and Panda agrees to purchase from the City all or part of such Raw Water, subject to the terms and conditions set forth herein. The City shall deliver the Raw Water to Panda at the Supply Delivery Point through one or more Meters, which will measure the volume delivered. All Raw Water delivered hereunder shall be delivered at a maximum pressure of 60 pounds per square inch. The Raw Water shall be owned by the City until it is delivered to the Supply Delivery Point, and thereafter the Raw Water shall be owned by Panda. The Raw Water shall be used by Panda at the Plant in connection with the generation of electricity, including, without limitation, as cooling water for the cooling towers associated with the Plant. Panda shall not permit any Raw Water furnished hereunder to be used to supply any other Person for use other than in regard to the operation of the Plant without specific approval of the City. Section 3.02. Commencement of Delivery. Panda shall notify the City at least thirty (30) days in advance of when it desires the City to commence the initial delivery of Raw Water to the Supply Delivery Point for purchase and sale hereunder; provided that such delivery shall commence no earlier than October 1, 1999 and no later than the Commercial Operations Date. Notwithstanding anything contained herein to the contrary, in no event will Panda be obligated to purchase Raw Water hereunder until the Commercial Operations Date. Section 3.03. Quantity. The City agrees to deliver to Panda, at the Supply Delivery Point, the quantity of Raw Water requested by Panda (up to and including eight (8) million gallons per Day). To facilitate this process, the City and Panda shall cooperate and coordinate in the control of the equipment that regulates the delivery of Raw Water pursuant to this Agreement. ARTICLE IV COLLECTION AND TRANSPORT OF W ASTEW A TER Section 4.01. Wastewater Collection. Process Wastewater from the Plant will be collected, transported, and treated by the City in a manner to be separately agreed on by Panda and the City. Domestic Wastewater (sewage) will be collected and treated by the City in accordance with City Ordinances separate and apart from process Wastewater. The Parties agree to use their best efforts to promptly reach an agreement on all such Wastewater matters so that the City may be able to commence the collection of the process Wastewater contemporaneous with the delivery of Raw Water hereunder (in order to facilitate Panda's testing of the Plant's operations). ARTICLE V CONSTRUCTION OF PIPELINE; WASTEWATER FACILITIES Section 5.01. Construction of the Pipeline; Transfer. Panda agrees at its sole cost and expense to design, engineer, survey, construct and install the Pipeline in accordance with the terms and conditions contained herein. The Pipeline shall be designed, sized and constructed to transport and supply up to eight (8) million gallons per Day of Raw Water from the Source to the Supply Delivery Point and otherwise permit the City to perform its obligations hereunder (subject to the provisions of Section 5.09 herein). The Pipeline shall be designed, engineered, and constructed in compliance with all TNRCC and EP A Regulatory Requirements for a potable water pipeline. Furthermore, the Pipeline shall be designed, engineered and constructed so that it conforms with and connects to any other applicable pipelines and related facilities of the Plant. Upon completion, Panda shall transfer title and ownership of the Pipeline to the City in consideration of any grant funds obtained by the City for such purpose and ten dollars ($10). Section 5.02. Alternate Construction of the Pipeline by PEDC; Transfer. The Parties agree that, if Panda so determines, the PEDC may design, engineer, survey, construct and install the Pipeline pursuant to a separate written agreement which may be entered into between PEDC and Panda. Upon completion, PEDC will .3. G:\A TTORNEY\Scott\Current Work\water agr - finaLdoc3