E.CS 080508 AGRMT Telco Foods - Laserfiche WebLink

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APPROVED BY CITY O�INCIL Date S S O X Item #C oW Scsst E ELECTRIC SERVICE AGREEMENT This Electric Service Agreement, dated for reference purposes as of AEfVA6 G , 2008, is entered into by and between TELCO FOOD PRODUCTS, INC., a California corporation ("Telco"), and CITY OF COLTON, a municipal corporation and electric utility service provider ("City"). In this Agreement Telco and the City may sometimes be referred to individually referred to as a "Party" and collectively as "Parties". RECITALS: A. City owns and operates a municipal electric utility serving residential, commercial, and industrial customers located within the City limited ("Electric Utility"). B. On or about December 2, 1997, City and Telco entered into that certain Electric Service Agreement ("ESA"), for the provision of electric service by the Electric Utility at rates set forth in the ESA. The term of the ESA expired December 2, 2007. C. Section 2.A of the ESA provides a service rate of 4.17 cents per kiloWatt hour (`kWh") during the first five ( term of years of the terof the ESA, and 4.28 cents per kWh during the second five (5) years of the tern of the ESA, subject to certain potential adjustments as provided in Section 2.A ("ESA Rate"). D. City has asserted that (i) City is entitled to adjust the ESA Rate based on certain language in Section 2A, and (ii) the ESA Rate applies to only the first megaWatt of power over the term of the ESA based on certain language in Section 6.A of the ESA. Telco has disputed City's interpretation of the applicable language in Section 2.A and Section 6.A and has asserted that City is not entitled to adjust the ESA Rate. E. The Parties desire to enter into this new Electric Service Agreement (`Agreement") to (i) resolve their difference of opinion regarding the proper interpretation of the provisions of the ESA referred to in Recital D and to mutually release any claims which City could assert against Telco (`City Claims"), or Telco could assert against City (`Telco Claims") (the City Claims and Telco Claims, collectively, the "Claims") with respect to the ESA, and (ii) set forth the electric rate applicable to the Telco facilities set forth in Section 3(a) for calendar year 2008. AGREEMENT: NOW THEREFORE, in consideration of the foregoing Recitals and the covenants and promised hereinafter contained, and for good and valuable consideration, the sufficiency and receipt of which are hereby acknowledged, the Parties agree as follows: 1. Recitals Incorporated. The foregoing Recitals are incorporated herein and made a part of this Agreement. 2. Continuation of ESA Rate to December 27, 2007; Zero Balance As Of December 31, 2007. The Parties agree that the ESA Rate of 4.28 cents per kWh shall apply through December 27, 2007. The Parties further agree that Telco has paid in full all amounts due City for provision of electric service through December 31, 2007. Notwithstanding the foregoing 394/018745-0001 862068.07 a07,131/08 -1-