METROPOLITAN WATER DISTRICT OF SOUTHERN CALIFORNIA (5) -2014

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supply rate obligation (i) in full at the end of year five of the Term , (ii) amortize it in five equal installments over the remaining five calendar years of the Term or (iii) pay it at the end of the Term Commencing in year 6 of the Term, Purchaser shall pay any additional Tier 2 Supply Rate obligation annually. . Purchaser agrees to purchase System Water from Metropolitan during the Term in an amount not less than the Purchase Order Commitment. If Purchaser's applicable System Water purchases during the Term are less than the Purchase Order Commitment, Purchaser agrees to pay Metropolitan an amount equal to the difference between the sum total in acre feet of water of the Purchase Order Commitment and the sum total in acre feet of water of Purchaser's applicable System Water purchases during the Term times the average of the Tier 1 Supply Rate in effect during the Term. Purchaser agrees to pay all amounts owing to Metropolitan, whether to satisfy a Purchase Order Commitment or a Tier 2 Supply Rate obligation, within the next regular billing cycle following the reconciliation of all certifications for special programs that the Purchaser may participate in. The Purchaser may elect to pay such amount in twelve equal monthly payments over the course of the next twelve months beginning with the first regular billing cycle following the reconciliation of all outstanding certifications for special programs. If the Purchaser elects to pay such amount over the course of the next twelve months following the regular billing cycle any outstanding balance shall bear interest at Metropolitan's then current investment portfolio average yield. All other amounts payable under this Purchase Order shall be billed and paid in accordance with the Administrative Code. COMMITMENT APPEAL: If the Purchaser's applicable System Water purchases during the Term are less than the Purchase Order Commitment, each acre -foot of unmet commitment will be reduced by the amount of production from a local resource project, measured in acre -feet, that commences operation on or after January 1, 2014. Local resource production includes any project type as approved by the Board under the Local Resources Program. WATER SERVICE: Conditions of water service by Metropolitan to the Purchaser, including but not limited to (i) delivery points, (ii) water delivery schedules, and (iii) water quality, will be determined in accordance with Chapter 5 (Section 4500 through 4514, inclusive, as applicable) of Metropolitan's Administrative Code. In accordance with its Administrative Code, Metropolitan shall use its reasonable best efforts to supply System Water in the quantities requested by the Purchaser, but is not obligated to dedicate any portion of System capacity for the conveyance, distribution, storage or treatment of System Water for the benefit of the Purchaser or any other member agency. Metropolitan shall use its reasonable best efforts to deliver the System Water when needed by the Purchaser during the Term; provided however, there shall be no default under this Purchase Order if Metropolitan fails to deliver water to the Purchaser in accordance with any such schedule of deliveries during the Term. By execution of this Purchase Order, the Purchaser recognizes and agrees that it acquires no interest in or to any portion of the System or any other Metropolitan facilities or supplies, or any right to receive water delivered through the System, excepting the right to purchase up to Purchaser's Tier 1 Maximum — Cumulative at the Tier 1 Supply Rate provided that System Water is available. This Purchase Order governs pricing of the System Water delivered to the Purchaser pursuant to this Purchase Order and does not confer any entitlement to receive System Water -2-