Exhibit 10.2
AGREEMENT
for a Supply of Water
between
MIDDLESEX WATER
COMPANY
and the
CITY OF RAHWAY
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Entered into as of April 1, 2006
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This Agreement
(hereinafter referred to as the "Agreement") is entered
into as of this 1st day of April 2006 between:
MIDDLESEX WATER
COMPANY, a public
utility and
corporation
organized
under the laws of the State of New Jersey, with offices at 1500 Ronson
Road, Iselin, New Jersey (hereinafter referred to as
"Middlesex")
and the
CITY OF RAHWAY, a municipal corporation of the State of New Jersey
with
its principal offices
located at City Hall Plaza, Rahway, New Jersey
07065 (hereinafter referred to as "Rahway").
W I T N E S S E T H:
WHEREAS, Middlesex owns and operates a public water supply system;
and
WHEREAS, Rahway has
requested that Middlesex provide it with a supply
of water for private and public use; and
WHEREAS, this Agreement is designed to set for the terms and
conditions
between the parties relating to a supply of water.
Now therefore,
in consideration of the premises and of the mutual
covenants herein contained, the parties agree that:
1.
Supply of Water.
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Middlesex agrees to
supply Rahway
with water,
and Rahway
agrees to
accept such water upon the terms and conditions set forth
herein.
2.
Term.
----
The term of this
Agreement shall be ten (10) years from the date
hereof. Except as
otherwise provided herein, or as the parties may mutually
agree upon, service
shall terminate on a
date that is ten (10) years following
the date hereof.
The terms of the Agreement shall remain in effect after the
termination
date and any periods
of renewal of the
Agreement,
unless written notice of
intention to
terminate the Agreement is given by either party
at least three
hundred sixty-five
(365) days prior to the end of any such period. In the event
that such notice has not been given, the Agreement shall remain in
effect until
the earlier of (a) renewal or modification of the Agreement by consent of
both
parties, or (b) a date
no less than three hundred sixty-five (365) days after
the date that either party provides written notification of
termination.
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3.
Rates.
-----
Rahway shall pay
Middlesex at a rate
which is the sum of (a) the rate
for Service Under
Contract pursuant to Rate Schedule No. 5 of Middlesex's
tariff, currently
at the rate of
$1,476.72 per million gallons (Exhibit A
attached hereto),
and (b) the rate for
Transmission
Service pursuant to
Rate
Schedule No. 8 of
Middlesex's
tariff, currently at the rate of $50.00 per
million gallons (Exhibit B attached hereto); or as applicable rates and
tariffs
may be established and/or changed from time to time with the
approval of the New
Jersey Board of Public
Utilities ("BPU") as required by law. (Such rate is
hereinafter referred
to as the "Contract
Rate.") Rahway shall pay Middlesex at
the said Contract Rate
for the greater of the Daily Minimum quantity of water
(as defined below in paragraph 7) or for all water delivered to Meter Stations
(as defined below in paragraph 5 (Meter Stations/Points of Delivery) up to and
including the Allowable Excess as determined under paragraph 8 (a).
Rahway shall
pay Middlesex the applicable Peaking Charges, set forth in paragraph 8, for
all
water in excess of the Allowable Excess, subject to the provisions of
paragraph
9 hereof.
4.
Delivery System.
---------------
Water to be supplied
by Middlesex
hereunder shall be delivered to
Rahway through
Middlesex's
water transmission system and all existing
interconnections
located on such transmission system as existed at the date
of
this Agreement and such other interconnections as may be
reasonably agreed upon
from time to time.
5.
Meter Stations/Points of Delivery.
---------------------------------
The parties understand
and agree that
delivery shall be made
through
such points of delivery into the Rahway system as may be reasonably
agreed upon
from time to time by the parties (hereinafter referred to as "Meter
Stations").
Water so supplied shall be metered at the Meter Stations.
6.
Meters, Services and Other Appurtenances.
----------------------------------------
Middlesex shall
furnish, install and maintain at its own cost such
service connections
and meters as it shall deem necessary for connection to the
Meter Stations.
The meters and
service pipes shall remain the property of
Middlesex. Middlesex
shall maintain and verify the accuracy
of said meters at
least annually, and
Rahway, at its sole
cost, shall have the right to test the
meters at the Meter Stations by a certified meter
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technician at any reasonable time upon written notice to Middlesex.
Rahway shall
provide for
furnishing, installing
and maintaining at its own cost all
other
piping, fittings,
valves, meter pits or vaults and
appurtenances,
including
pressure reducing stations, necessary to take water from
Middlesex.
7.
Minimum Payment Obligation.
(a) Rahway shall be
obligated to pay for the Daily Minimum quantity of
water at the Contract Rate. "Daily Minimum" shall mean:
(i) One
hundred thousand (100,000) gallons of water a day
(0.10 million gallons per day (mgd)), or
(ii)
Such greater amount as may be elected under paragraph
7 (b) of this Agreement.
(b) At any time during
the term of this
Agreement, Rahway may
elect,
upon written
notification to Middlesex, to increase the Daily Minimum
quantity
of water to a greater quantity of water (hereinafter referred to as
the "Revised
Daily Minimum").
Once such an
election is made by
Rahway, the Revised
Daily
Minimum quantity of water shall remain in effect for a period of at
least twelve
(12) months from the effective date of such election unless further increased
pursuant to this
Agreement. At the end
of such twelve (12) month period, the
Revised Daily
Minimum shall remain
in effect unless Rahway shall further amend
(increase or decrease)
the Revised Daily
Minimum. Each such
election to amend
shall be on written
notice to Middlesex and shall remain in effect for a period
of twelve (12) months from the effective date of such election unless further
increased pursuant to this Agreement. Any election to decrease the
Revised Daily
Minimum shall not be
reduced below the initial amount of one hundred thousand
(100,000) gallons
of water a day specified in paragraph 7(a)(i) of this
Agreement.
8.
Peaking Charges.
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(a) The total
daily quantity of water taken by Rahway at the Meter
Stations may exceed the Daily Minimum or the Revised Daily
Minimum by up to 50%
on a 24-hour basis without affecting the Contract
Rate. The quantity of water
taken in the peak hour
multiplied by 24 may
exceed the Daily Minimum or the
Revised Daily Minimum by up to 100% without affecting the Contract
Rate. Such
excess quantities of water are known as the "Allowable Excess".
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(b) If the quantity of water taken in a 24-hour period shall exceed
the
Daily Minimum or the
Revised Daily Minimum
by more than 50%,
("Daily Peaking
Excess"), Rahway shall
pay for s
