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continued pursuit of water reuse and further implement reuse of its water to enlarge and <br /> enhance its water supply system; and <br /> WHEREAS, more than one water storage facility may be constructed on the <br /> Property and construction of all the water storage facilities on the Property may not be <br /> completed at the same time, and each completed lined water storage facility, including <br /> that additional portion of the Property necessary for access and use of each lined water <br /> storage facility by Owner for the purposes set forth above, shall constitute and be <br /> referred to as a "Cell"; and <br /> WHEREAS the Cells collectively shall constitute and be referred to as the <br /> "Reservoir," which may consist of a single body of water or interconnected bodies of <br /> water which function as a single reservoir, and <br /> WHEREAS the Cells comprising the Reservoir are to be constructed by the <br /> Contractor and delivered to the Owner, upon completion and acceptance of a Cell or <br /> Cells (the "Delivery" or"Delivery Date"). <br /> AGREEMENT <br /> NOW THEREFORE, in consideration of the foregoing recitals, the mutual <br /> covenants and agreements contained herein and other good and valuable <br /> consideration, the adequacy, sufficiency, and receipt of which is hereby acknowledged, <br /> the parties hereto agree as follows: <br /> 1. Contract Amount: Owner shall compensate Contractor for the completed and <br /> approved Useable Active Storage ("Storage") Capacity in the Reservoir as <br /> defined in Paragraph 11 herein in an amount of $3,200 per acre foot of Useable <br /> Active Storage. This compensation amount is the actual cash compensation <br /> regardless of Delivery Date with no adjustments for the time value of money. <br /> Upon execution of this Construction Agreement, Owner shall pay Contractor <br /> $209,350. This amount will represent the "Down Payment" for future Useable <br /> Active Storage Capacity in an amount of 65.42 acre feet. The Parties agree and <br /> understand that this Down Payment will be applied to the first 65.42 acre feet of <br /> Storage delivered to the Owner per the terms of this Construction Agreement. <br /> 2. Contractor's Use of Mineral Interest: Owner grants Contractor the right to <br /> extract, convey, sell or otherwise use the minerals from the Property prior to <br /> delivery of the Storage to Owner under this Construction Agreement. This right <br /> shall include the use of the Property for the purpose of mining, extraction, and <br /> processing of sand and gravel and minerals contained therein, the extraction of <br /> any related materials encountered in the course of sand and gravel mining, and <br /> the normal and customary activities of Contractor, its employees, subcontractors <br /> and agents associated therewith. Contractors right to extraction, use and/or sale <br /> of the minerals and collection of royalties from the Property expires for each Cell <br /> Construction Agreement—Zadel(v.4-24-08) <br /> 2 <br />