Agreement regarding the furnishing of water from Los Angeles & Salt Lake Railroad Company and Union Pacific Railroad Company to the Las Vegas Land and Water Company, November 30, 1950

LAW DEPT COPY App'd EEB 10/10/50 LW UP Audit NO._74531 LVL&WCo Audit No. 10567 AGREEMENT Between LOS ANGELES & SALT LAKE RAILROAD COMPANY, UNION PACIFIC RAILROAD COMPANY and LAS VEGAS LAND AND WATER COMPANY Dated; November 30th , 1950 Covering the furnishing of water by Railroad Company to Water Company at Las Vegas, Nevada, and the charges therefor. C.L.D. No. 10555 THIS AGREEMENT made and entered into this 30th day of November_, 1950, by and between LOS ANGELES & SALT LAKE RAILROAD COMPANY, a Utah corporation, First Party, UNION PACIFIC RAILROAD COMPANY, a Utah corporation, Second Party, both of said companies being hereinafter collectively called "Railroad Company", and LAS VEGAS LAND AND WATER COMPANY, a Nevada corporation, Third Party, hereinafter called "Water Company", WITNESSETH: Recitals First Party is the owner of certain real property hereinafter called "water bearing lands" located in the City of Las Vegas, County of Clark, State of Nevada, outlined in Red color upon the map marked Exhibit "A" attached hereto and made a part hereof, and certain springs, water wells, pipe lines, reservoirs and other facilities located upon said water bearing lands by means of which underground water is produced and saved from said lands. The First Party is the owner of pipe lines shown on Exhibit "A" through which water produced from said water bearing land is transported and delivered into the distribution systems of First Party and of Water Company. The center line location of said pipe lines outside the boundaries of the water bearing lands is shown by green lines on Exhibit "A". Rights of way sufficient for the said pipe lines shown by green lines on Exhibit "A" consist of strips of land 20 feet in width being 10 feet on each side of the oenter line location of eaoh of said pipe lines across property owned by First -1- Party outside the boundaries of the water bearing lands. The First Party is also the owner of power lines shown on Exhibit A which are used in connection with the production and transmission of said water. The center line location of one of said power lines upon property owned by First Party outside the boundaries of the water bearing lands is shown by yellow lines on Exhibit "A". Right of way sufficient for the said power line shown by yellow line on Exhibit "A" consists of a strip of land 50 feet wide being 25 feet on each side of the center line location of said power line across property owned by First Party outside the boundaries of the water bearing lands. The State of Nevada has duly issued to First party a certificate of appropriation of water authorizing First party to appropriate from said water bearing lands the amount of water which can be beneficially used by the First Party for railroad and domestic purposes not in excess of 2.5 oubic feet per seoond. Second party is the lessee of, in possession of and maintains and operates all of the property of First Party above mentioned. The Water Company is the owner of the right to put to beneficial use all water arising from the springs located upon the said water bearing lands which springs are known respectively as "Little Spring", "Middle Spring" and "Big Spring". The State of Nevada has duly issued to the water Company certificates of appropriation of water authorizing the Water Company to appropriate from said water bearing lands the amount of water which can be beneficially used by the Water Company for irrigation and domestic purposes, not -2- in excess of 1.88 cubic feat per second and the amount of water which can be beneficially used by Water Company for municipal supply and domestic purposes not in excess of 21.49 cubic feet per second. The Second party uses a portion of the water developed from the said water bearing lands for railroad purposes and for the purpose of supplying certain customers who purchase water from the Second Party under private contract. All of the rest of the water produced from said lands above described is delivered to the Water Company by Second Party. The Water Company owns a water distribution system in the City of Las Vegas, Nevada, through which the Water Company, as a public utility, furnishes water to the residents of said city for municipal and domestic purposes. On March 30, 1929, First Party and Water Company entered into a contract setting forth the terms and conditions upon which First Party agreed to transport and deliver into the distribution system of the Water Company at Las Vegas, Nevada, water produced from said water bearing lands which Water Company was entitled to appropriate and put to beneficial use. Conditions have changed somewhat since said contract was made and it is the intention of the parties hereto to substitute this agreement for said agreement dated March 30, 1929 between First Party and Water Company. NOW THEREFORE, it is agreed by and between the Parties hereto as follows: Section 1: Second Party shall use reasonable diligence to produce from said water bearing lands by means of the existing -3- water production facilities located thereon all water which Second Party and Water Company can put to beneflolal use not in excess of the amount thereof which both are entitled to appropriate and divert from said water bearing lands. In no event shall Second Party be required to produce from said water bearing lands an amount of water exceeding that which in the opinion of Second Party will cause substantial injury to or depletion of the source of supply. Section 2: Second Party shall have the right to make such changes, additions and betterments to or retirements of its existing facilities as Second Party shall conslder desirable for the production, transportation and delivery of water into the respective distribution systems of Second Party and Water Company, Section 3: The term "water production facilities" as hereinafter used in this agreement shall be deemed to include (a) The water bearing lands and the rights of way for the pipe lines and power line shown by green and yellow lines, respectively, on Exhibit "A". (b) All water wells, springs, pipe lines, power lines, reservoirs, settling basins and other structures or facilities located on said water bearing land and said rights of way which are used or useful in the production, transmission or delivery of water, (c) Any additions and betterments to the properties mentioned in subparagraphs (a) and (b) hereof which are made by Second Party subsequent to January 1, 1950 pursuant to Section 2 hereof -4- and shall be deemed to exclude any of the above mentioned properties which are retired subsequent to January 1, 1950. Section 4: It is agreed that the market value of the lands and rights of way mentioned in subparagraph (a) of Section 3 as of January 1, 1950, is $75,900.00, It is agreed that the original cost of all of the structures and facilities referred to in subparagraph (b) of Section 3 hereof as of January 1,1950,is $779,254.00 and that the accrued depreciation thereon as of said date is $108,511.00. It is further agreed that the amount of working each and the cost of material and supplies as of January 1, 1950, are $2,000.00 and $3,000.00, respectively. All of the above amounts less depreciation accrued to January 1, 1950, total $751,643, end for the purpose of this agreement such total is hereinafter referred to as the "agreed value" of the water production facilities as of January 1, 1950. Section 51 The cost to Second Party of producing, transporting and delivering water from the water-bearing lands into the distribution systems of second Party and water Company shall be deemed to include: (a) The actual cost to Second Party of labor and materials used in and directly assigned to such work. (b) A reasonable charge representing the actual eost to Second Party of all labor used in sush work not directly assigned thereto in payroll distribution. (e) A reasonable charge representing the actual cost to Second Party for supervision of such directly and indirectly assigned labor. (d) A reasonable charge representing the actual cost to Second Party of vacation allowances with respect to all labor directly or indirectly assigned and used in such work. (e) All social security, unemployment insurance, payroll taxes or other taxes which may be levied or assessed against or on account of such labor. (f) A reasonable charge representing the cost to Second Party of liability for injury to or death of persons (including employees) or damage to or destruction of property arising in the performance of such work, or representing the cost to Second Party of insuring against such liability. (g) A reasonable charge representing the cost to Second Party for use or rental of tools and machinery (exclusive of tools and machinery which are part of the water production facilities) Used in such work. (h) A reasonable charge representing the cost to Second Party of transportation expense, storehouse expense and purchasing department expense upon all items of material. (i) All sales taxes, use taxes or other taxes which may from time to time be levied or assessed against or on account of materials used in such work. (j) A reasonable charge representing the actual cost to Second Party for all executive, legal, engineering and accounting services performed by Second Party in the production, transportation or delivery of such water. (k) Depreciation at reasonable rates upon all depreciable facilities utilized by Second Party in producing, transporting and delivering such water. -6- (l) All taxes paid by Second Party which are levied and assessed upon or fairly allocable to the water production facilities. (m) Any loss incurred by Second Party in the retirement of facilities made pursuant to Section 2 hereof. (n) Any other expense, direct or Indirect, which is incurred by Second Party in producing, transporting and delivering such water. (o) Federal income taxes at the rates in effect from time to time upon that portion of the business of the Second Party consisting of the production, transmission and delivery of water produced from the water bearing lands computed on an amount of Income which will provide Second Party with the fair return mentioned in subparagraph (p) hereof. (p) An amount over and above the total of all of the costs referred to in subparagraphs (a) to (o) inclusive, equal to per annum upon the agreed value of the water production facilities adjusted to reflect any changes in market value since January 1, 1950 of the water bearing lands and rights of way mentioned in subparagraph (a) of Section 3 hereof, any depreciation upon the water production facilities mentioned in subparagraph (b) of Section 3 hereof accrued subsequent to January 1, 1950, and any changes, additions, betterments or retirements of or to the water production facilities made subsequent to said date. In computing such return for any calendar year, the adjusted value of the water production 7 facilities for said year shall be deemed to be the average of the adjusted value thereof at the beginning of the year and the adjusted value thereof at the end of the same year* Section 6: Second Party shall install asters at appropriate points in the pipe lines through which water produced from the water bearing lands is transported and delivered into the distribution systems of Second party and Water Company 30 as to record separately the water delivered to the Water Company and water delivered into the distribution system of Second party. Section 7: The Water Company shall be obligated to bear that portion of the cost to Second Party of producing, transporting and delivering water to both Water Company and Second Party as herein provided, computed as provided in Section 5 hereof, that the amount of water delivered to the Water Company during any calendar year bears to the total amount of water delivered in the same year to both Water Company and Second Party. Bills will be rendered by Second Party to Water Company promptly after the end of each calendar month for water delivered to Water Company during the preceding calendar month based upon the best Information then available as to cost of producing, transporting and delivering said water, and Water Company shall promptly pay such bills. As promptly after the end of each calendar year as completion of accounting will permit, an adjustment will be made between said parties so that the total amount paid by Water Company for water delivered to it during said calendar year shall equal the portion of the cost of producing, transporting and delivering water which Water Company is obligated to bear as -8- provided in the first sentence of this section 7. Section 8: Second party agrees to use reasonable diligence to maintain and operate all of the water production and transportation facilities above mentioned in such condition as to afford a continuous flow of water into the distribution systems of Second Party and Water Company. Section 9; Second party furnishes to the Water Company in connection with the construction, maintenance and operation of the distribution system and business of the Water Company, executive, legal, engineering and accounting services performed by officers and employees of Second Party. Water Company agrees to pay to Second Party promptly after the close of each calendar year upon rendition of bill by Second Party to Water Company therefor a reasonable charge representing the actual cost to Second Party for all such services furnished by Second Party to Water Company during said calendar year. Section 10: This agreement shall be binding upon and inure to the benefit of the parties hereto, their successors and assigns. Section 11 It is mutually agreed by and between the parties hereto that that certain agreement dated March 30, 1929 between the First Party and Water Company covering the transportation and delivery of water by First Party to Water Company at Las Vegas, Nevada, identified as First Party's Contract Audit No. 7322, shall be and is hereby terminated as of December 31, 1949, provided, however, that such termination shall not effect any of the rights -9- or obligations of the parties hereto with respect to said agreement which may have accrued or liabilities, accrued or otherwise, which may have arisen prior to said termination date. Section 12: This agreement shall take effect as of the First day of January, 1950, and shall continue in full force and effect until terminated as herein provided. This agreement may be terminated by written notice given to either party by the other on any date therein stated, not less, however, than twelve months subsequent to the date on which said notice shall be given. IN WITNESS WHEREOF, the parties hereto have caused this agreement to be executed the day and year first above written. LOS ANGELES & SALT LAKE RAILROAD COMPANY UNION PACIFIC RAILROAD COMPANY By (Sgd) A.E. Stoddard__ ------President Attest: (Sgd) L.J. Bachman Asst. secretary LAS VEGAS LAND AND WATER COMPANY (Sgd) A.E. Stoddard _ President Attest: (Sgd) L. J. Bachman Asst.Secretary 10 -10- APPROVED: (Sgd) Wm. Reinhardt, Vice President Approved as to form: (Sgd) E.E. Bennett, General Solicitor Approved as to execution: (Sgd) John A. Bennewitz-A Asst. Western General Counsel