EXHIBIT 10.14
WATER AGREEMENT
BETWEEN
AQUAPENN SPRING WATER CO.
AND
BELLEFONTE BOROUGH
TABLE OF CONTENTS
RECITALS................................................. 1
ARTICLE I - SALE OF WATER................................ 1
ARTICLE II - COMMENCEMENT DATE........................... 2
ARTICLE III - RATES AND PAYMENTS......................... 3
ARTICLE IV - TERMS OF AGREEMENT.......................... 5
ARTICLE V - WATER FACILITIES............................. 6
ARTICLE VI - INSURANCE AND INDEMNIFICATION............... 8
ARTICLE VII - RESTRICTION ON USE OF WATER................ 9
ARTICLE VIII - EXCUSES FOR NON-PERFORMANCE............... 11
ARTICLE IX - RELATIONSHIP OF THE PARTIES................. 12
ARTICLE X - PROHIBITION ON ASSIGNMENT.................... 12
ARTICLE XI - SOURCE IDENTIFICATION....................... 13
ARTICLE XII - NOTICES.................................... 13
ARTICLE XIII - MISCELLANEOUS............................. 14
WATER AGREEMENT
THIS WATER AGREEMENT, made and entered this 10th day of July,
1995, by and between the AQUAPENN SPRING WATER CO., with its office address
at 3035 Research Drive, State College, Centre County, Pennsylvania, (herein
called "AquaPenn")
AND
THE BOROUGH OF BELLEFONTE, with its office address at 236 West Lamb Street,
Bellefonte, Centre County, Pennsylvania (herein called "Bellefonte").
RECITALS
(a) AquaPenn is interested in securing a source of potable
drinking water for use in its bottled water company, within a reasonable
distance of the production facilities of AquaPenn.
(B) Bellefonte presently has an excess of potable drinking water
which, subject to the terms and conditions of this Agreement, will be made
available to AquaPenn.
NOW, THEREFORE, in consideration of the foregoing recitals and
intending to be legally bound hereby the parties agree as follows:
ARTICLE I
SALE OF WATER
SECTION 1.01. Bellefonte agrees to sell AquaPenn excess
gravity-pressured potable water not to exceed 1,000,000 (1.00 mgd) per day
from a pipe which is a sixteen (16) inch pipe originating
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from a spot in the immediate area of the Big Spring, Bellefonte,
Pennsylvania, subject to and expressly conditioned to the following:
(a) To all the terms and conditions of the Bellefonte's Water
Allocation Permit as issued by the Commonwealth of Pennsylvania,
Department of Environmental Resources, Permit No. WA-23A, as amended,
and, all the Ordinances, Resolutions, Rules, Regulations and Laws of
any Local, State or Federal Governmental Authority having jurisdiction
over the subject and the performance of this Agreement;
(b) That the source of the water, known as the Big Spring,
continues to produce water at a rate which allows all of the water use
demands of the Borough of Bellefonte to be met before there is water
available to AquaPenn; and,
(c) Fulfillment of the needs and requirements of Bellefonte's
inhabitants, existing contracts and agreements for supply of water,
and, the present customers of Bellefonte's water system located within
and beyond the political boundaries of Bellefonte.
(d) That the Big Spring is determined to be a "spring," and not
influenced by surface water, as to be determined by the Surface Water
Influence Testing being currently conducted.
SECTION 1.02. It is expressly understood that Bellefonte makes no
representations, warranties or guarantees as to the source of the water,
its availability or quantity.
ARTICLE II
COMMENCEMENT DATE
SECTION 2.01. Commencement date means the date on which AquaPenn
notifies the Borough of Bellefonte when all applicable permits, licenses
and approvals, with respect to the subject of
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this Agreement, have been obtained, and, that all construction has been
completed to receive the water from the point located in the immediate area
of the Big Spring, Bellefonte, Pennsylvania.
SECTION 2.02. If all the permits, licenses and approvals are not
obtained by AquaPenn or all construction necessary to transfer the water is
not completed prior to the 1st day of May, 1997, this Agreement shall
terminate forthwith and be deemed null and void.
ARTICLE III
RATES AND PAYMENTS
SECTION 3.01 AquaPenn shall pay for the potable water as follows:
(a) During the first five (5) years from the commencement
date of this Agreement as provided in Article II and IV, the
amount of forty ($.40) cents per thousand gallons transferred
each day.
(b) On commencement of the second five (5) years from the
commencement date of this Agreement as provided in Article II and
IV, the amount of fifty ($.50) cents per thousand gallons
transferred each day.
(c) After the tenth (10th) year of the commencement date of
this Agreement as provided in Articles II and IV, and upon sixty
(60) days written notice by Bellefonte to AquaPenn, Bellefonte
may increase the costs of the water by applying the fluctuations
in the Consumer Price Index to the costs per thousand gallons as
set forth in subparagraph (b) as follows:
(i) The Consumer Price Index for the purpose of this
Agreement shall be the Consumer Price Index for "All
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Items for All Urban Customer" published by the Bureau of
Labor Statistics of the United States Department of Labor,
Pittsburgh-Beaver Valley. For All Items 1982-84 equals 100.
If the Consumer Price Index ceases to be published by the
United States Department of Labor, Bureau Statistics, then
the calculations shall be based on the closest Successor
Index as identified by the United States Department of
Labor. If no such Successor exists, the calculations shall
be based on an Index prepared by Bellefonte and submitted to
AquaPenn.
(ii) The base date shall be the first day of the calendar
month preceding the date of this Agreement.
(iii) The adjusted increase for payments for the water shall
be determined by multiplying the cost of the water per
thousand gallons paid during the second five (5) year term
by a fraction, the numerator of which shall be the Consumer
Price Index for the last calendar month at the conclusion of
the second five (5) year term of this Agreement, and, the
denominator which shall be the Consumer Price Index for the
base date. The resulting sum, if greater than the amount set
forth in subparagraph (b) above may be adjusted by
Bellefonte, commencing with the month following the
expiration of ten (10) years from the commencement date of
this Agreement.
SECTION 3.02. Beginning on the commencement date of this
Agreement, and, thereafter, Bellefonte shall monthly invoice AquaPenn for
payment of the water transferred the preceding month.
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AquaPenn shall pay Bellefonte the amount due, and any other amount due,
within ten (10) days of the date of the invoice.
SECTION 3.03. In the event AquaPenn shall fail to pay for the
water as required hereunder for a period of thirty (30) days after receipt
of written notice, then AquaPenn agrees that Bellefonte shall have the
right, at its option, to proceed against AquaPenn in any manner permitted
by law.
SECTION 3.04. If AquaPenn and Bellefonte are unable to resolve
any dispute with respect to any amount owed by AquaPenn hereunder, AquaPenn
shall be obligated to pay all undisputed amounts with respect to such
dispute.
ARTICLE IV
TERMS OF AGREEMENT
SECTION 4.01. Upon receipt of the notice provided in Article II,
this Agreement shall commence for a term of fifty (50) years from the date
of the notice. After the expiration of the term of fifty (50) years, the
Agreement shall automatically renew itself for a term of five (5) years
unless written notice is delivered by either party to the other six (6)
months prior to the expiration of the initial fifty (50) year term of this
Agreement indicating an intent not to renew. Any renewal shall be on the
terms and conditions then mutually agreed upon between AquaPenn and
Bellefonte.
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ARTICLE V
WATER FACILITIES
SECTION 5.01. AquaPenn, at its sole cost and expense, shall
acquire, construct, install, repair and maintain all facilities, pipes,
pipelines, pumps and equipment or other apparatus necessary to transmit the
water from the pipe in the immediate area of the Big Spring to AquaPenn.
All such construction, installation, repairs and maintenance of wells,
pipes and equipment shall be in accordance with engineering standards
acceptable to Bellefonte. Bellefonte, upon reasonable notice, shall provide
AquaPenn with access to the transmission point in the immediate area of the
Big Spring for the purpose of transmitting water to AquaPenn. AquaPenn, at
its sole cost and expense, shall acquire all rights-of-way from AquaPenn to
the Big Spring, and, upon termination of this Agreement, Bellefonte shall
have the right but not the responsibility to have ownership of the
rights-of-way transferred to Bellefonte.
SECTION 5.02. The AquaPenn pipeline shall not intrude into, or in
any other way invade the pond of the Big Spring, but shall terminate at a
point near the Big Spring. A separate and distinct pipeline, being very
short in length, from the AquaPenn pipeline, to the pond of the Big Spring,
shall be constructed by Bellefonte, with all costs of construction to be
paid by AquaPenn. This portion of pipe shall then be immediately turned
over to, and surrendered to, Bellefonte, who shall have sole control of it.
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SECTION 5.03. AquaPenn shall, at its sole cost and expense,
provide a meter at the Big Spring at the point where the water is delivered
to AquaPenn. AquaPenn, at its sole cost and expense, shall cause the meter
to be calibrated every three (3) years after the commencement date of this
Agreement, and, AquaPenn shall be solely responsible for its maintenance
and repair. Should the accuracy of the meter at any time during the term of
this Agreement be challenged, the costs of calibration shall be paid by the
party whose position was changed (plus or minus five percent deviation) as
a result of the re-calibration. Should the meter be inaccurate for a
specified period of time or inoperable for any reason, the usage for such
period will be based on the average daily use for the ten (10) days
following the repair or replacement of the meter or its accurate
re-calibration.
SECTION 5.04. All facilities, pipes, pipeline pumps, equipment
and/or other apparatus installed or constructed by AquaPenn to receive and
distribute the water pursuant to this Agreement shall be and remain the
sole property of AquaPenn, other than that pipeline described in Paragraph
5.02. above. Such facilities may at the termination or expiration of this
Agreement be removed by AquaPenn.
SECTION 5.05. AquaPenn, at its sole cost and expense, shall
comply with all acts, rules, regulations, orders and directives of any
legislative, executive, administrative or judicial body applicable to the
performance of this Agreement, and,
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to the operation, repair and maintenance of the transmission facilities
from Bellefonte to AquaPenn. Without limiting the foregoing, AquaPenn or
Bellefonte may contest, in good faith, any such laws, ordinances, rules,
regulations, permits, licenses, orders, or directives of any executive,
administrative or judicial body.
ARTICLE VI
INSURANCE AND INDEMNIFICATION
SECTION 6.01. AquaPenn shall insure and keep insured all the
distribution and transmission facilities of its water system which are of a
character usually insured by persons operating properties of a similar
nature by a responsible insurance company or companies authorized and
qualified under the laws of the Commonwealth of Pennsylvania to assume the
risks thereof against loss or damage by fire and any hazards to the extent
that such properties are usually insured by persons operating properties of
similar nature in the same or similar localities. The amount of said
insurance in each case and the provisions of these insurance policies shall
be subject to the approval of Bellefonte.
SECTION 6.02. AquaPenn will maintain public liability insurance,
property damage and worker's compensation insurance in such amounts and
containing such terms and provisions as shall be approved by Bellefonte.
SECTION 6.03. All insurance policies provided herein shall be for
the benefit of Bellefonte, and, Bellefonte shall be
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named as an additional insured on all the insurance policies. All insurance
policies shall be filed with Bellefonte, and, no changes shall be made to
the policies of insurance without the prior consent of Bellefonte.
SECTION 6.04. AquaPenn agrees that it shall protect, indemnify
and hold Bellefonte and their respective officers, employees and agents
from and against all liabilities, actions, damages, claims, demands,
judgments, losses, costs, expenses, suits, or actions and reasonable
attorney's fees and shall defend Bellefonte in any suit, including appeals,
for personal injury to, or death of, any person or persons, or for loss of
or damage to, property resulting from the acts or omissions of AquaPenn in
the performance (or non-performance) of AquaPenn's obligations under this
Agreement and for any loss or claim resulting from the performance (or
non-performance) of Bellefonte's obligation under this Agreement, or, the
execution and performance of this Agreement or any other suit filed against
Bellefonte as a result of this Agreement.
ARTICLE VII
RESTRICTION ON USE OF WATER
SECTION 7.01. AquaPenn shall use the water obtained from
Bellefonte for sale in its bottled water business, and is specifically
prohibited from providing, at any price or cost, water from the Big Spring
to any other customer, corporation, or entity without prior written
approval from Bellefonte.
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SECTION 7.02. AquaPenn shall not contest or appeal or otherwise
oppose, directly or indirectly, the application for any permit or the
issuance of any permit to Bellefonte concerning its water source or its
transmission or distribution system, and, the delivery of water to any of
Bellefonte's customers.
SECTION 7.03. AquaPenn shall continually operate its water
distribution and transmission system in a sufficient and economic manner
and will keep its system in a state of good repair and will replace all
equipment necessary from time to time so as not to waste any water provided
hereunder.
SECTION 7.04. Should Bellefonte be required to install new
procedures or improve its water system as a result of this Agreement with
AquaPenn, all costs of the same shall be paid by AquaPenn. If the
improvements or new procedures are required as a result of a combination of
this Agreement and the supplying water to Bellefonte customers, then
Bellefonte shall pro-rate the costs thereof based on the number of gallons
of water used within the geographic boundaries of Bellefonte and those
transferred to AquaPenn. The proration shall be based on the highest
average of any amount of water furnished to AquaPenn during the previous
year prior to the necessity for installing such new procedures or making
the improvements.
SECTION 7.05. AquaPenn shall execute any and all documents which
may be required by Bellefonte to modify, alter or amend this Agreement in
order to accommodate any financing which
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Bellefonte may undertake to improve or which effects its water system.
ARTICLE VIII
EXCUSES FOR NON-PERFORMANCE
SECTION 8.01. The failure of either party to perform any
obligation under this Agreement due to an uncontrollable circumstance shall
operate as an excuse to performance and will not constitute a breach of any
obligation. Uncontrollable circumstance means by act, event or condition,
that has had, or may reasonably be expected to have, a direct material
adverse effect on the rights or obligations of a party under this Agreement
or a direct material adverse effect on the furnishing of water under this
Agreement, if such act, event or condition is beyond the reasonable control
or the party relying thereon has justification for not performing an
obligation or complying with any condition required of such party under
this Agreement. Such acts or events shall include, but shall not be limited
to the following:
(a) An Act of God, hurricanes, tornadoes, epidemic,
landslides, lightening, earthquake, flood, fire or explosion or
similar occurrence; or an act of the public enemy, war, blockade,
insurrection, riot, general unrest, or restraint of government
and people, civil disturbance of similar occurrence;
(b) The order, final actions, injunction and/or judgment of
any federal, commonwealth or local court, administrative agency
or governmental body which has jurisdiction over the performance
of the parties' obligation to this Agreement;
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(c) A change in the law which includes the enactment,
adoption, promulgation, modification or repeal after the date of
this Agreement, of any Federal, commonwealth, county or other
local law, ordinance, code rule, or regulation or other similar
regulation or other similar legislation which establishes
obligation on responsibility affecting the performance under this
Agreement which are more burdensome than those in effect on the
date of this Agreement.
SECTION 8.02. Notwithstanding the foregoing, Bellefonte may
terminate this contract at any time, in its discretion, and at its option,
after written notice from Bellefonte, if AquaPenn shall ever be more than
60 days in default or in delinquency to Bellefonte.
ARTICLE IX
RELATIONSHIP OF THE PARTIES
SECTION 9.01. Neither AquaPenn nor Bellefonte shall have the
responsibility to perform services for or to assume contractual obligations
which are the obligations of the other.
SECTION 9.02. Nothing herein shall constitute either party as a
partner, agent or representative of the other, or be deemed to create any
fiduciary relationship between them.
ARTICLE X
PROHIBITION ON ASSIGNMENT
SECTION 10.01. This Agreement may not be assigned by AquaPenn
without the prior written consent of Bellefonte duly approved by Resolution
of Bellefonte's governing bodies, and, shall
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not be assigned by AquaPenn in connection with the obtaining of financing
for any purpose.
SECTION 10.02. Bellefonte and AquaPenn agree to work for the
assignment of all rights and privileges provided to the Borough of
Milesburg, in Commonwealth of Pennsylvania, Department of Environmental
Resources, Permit No. WA-23A, to AquaPenn.
ARTICLE XI
SOURCE IDENTIFICATION
SECTION 11.01. AquaPenn confirms that all bottled water from the
Big Spring packaged for sale to the public shall prominently display on its
label information which identifies the source of the water as the Big
Spring, Bellefonte, PA. Current regulations from the Pennsylvania
Department of Environmental Resources require such identification. Even
absent that requirement, however, AquaPenn shall continue to list the Big
Spring, Bellefonte, PA, as the source of the water.
ARTICLE XII
NOTICES
SECTION 12.01. All notices, demands, requests and other
communications hereunder shall be deemed sufficient and property given if
in writing and delivered to the following addresses by certified or
registered mail, postage prepaid:
(a) TO: AquaPenn Spring Water Co.
3035 Research Drive
State College, PA 16801
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(b) TO: Bellefonte and Bellefonte Borough
Borough Manager
236 West Lamb Street
Bellefonte, PA 16823
ARTICLE XIII
MISCELLANEOUS
SECTION 13.01. This Agreement shall be authorized and approved by
duly authorized ordinances adopted by Bellefonte, and by corporate
action/resolution by AquaPenn.
SECTION 13.02. Time shall be the essence of the performance of
this Agreement.
SECTION 13.03. This Agreement shall be construed under the laws
of the Commonwealth of Pennsylvania.
SECTION 13.04. This Agreement reflects the understanding and
agreement among the parties and there are no other covenants or agreements
that are not herein contained.
SECTION 13.05. In the event that any provision of this Agreement
shall, for any reason, be determined to be invalid, illegal or
unenforceable in any respect, all other provisions of this Agreement shall
be binding on the parties, and shall remain in full force and effect. If
the provisions on payment are found to be invalid, illegal or
unenforceable, then, in such an event,
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Bellefonte may upon written notice terminate this Agreement forthwith, and,
this Agreement shall be null and void.
IN WITNESS WHEREOF, the parties have signed this Agreement the
day and year first above written.
ATTEST AQUAPENN SPRING WATER CO.
/s/ Tammy S. Hahn By: /s/ Edward J. Lauth, III
EDWARD J. LAUTH, III
President
ATTEST BOROUGH OF BELLEFONTE
(Illegible Signature) By: /s/ William C. Schultz
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