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<br />The point of delivery shall be a Ground Storage Tank (the "GST") constructed by Kyle at <br />a point approximately 1,000 feet east of the intersection of Interstate Highway 35 and <br />Yarrington Road (the "Point of Delivery"). The water will be delivered at a rate <br />sufficient to provide approximately 700 gallons per minute through an eight-inch (8") or <br />larger meter. Water deliveries above the specified rate may be allowed up to the available <br />pumping and pipeline capacity if not detrimental to service pressures or flows in the San <br />Marcos system and if the water supply (treated surface or groundwater) is available to <br />Kyle by contract and/or permit. <br /> <br />B. San Marcos and Kyle may designate substitute or additional points of delivery by mutual <br />agreement of the City Managers of the parties. The points of delivery designated in this manner, <br />or otherwise identified in this Agreement are collectively referred to as the "Points of Delivery". <br /> <br />Section 2. Water Transmission Line. <br /> <br />A. Subject to the terms and conditions of this Section and Section 6 of this Agreement, Kyle will <br />design, construct and install a twelve inch (12") water transmission line (the "WT Line") from a <br />point of connection with the San Marcos water system at the intersection of Interstate Highway <br />35 and Technology Way to the intersection of Interstate Highway 35 and Yarrington Road, a <br />distance of approximately 4,500 feet, thence from the intersection of Interstate Highway 35 and <br />Yarrington Road along the south side of Yarrington Road to the Point of Delivery. The two <br />segments of the WT Line will be located within the right-of-way of Interstate Highway 35, and <br />the right-of-way of Yarrington Road, respectively. <br /> <br />B. Upon completion of construction of the WT Line by Kyle and acceptance of the WT line by <br />San Marcos, the WT Line will be and become the property of San Marcos and a part of the San <br />Marcos water system, subject to the right of Kyle to have the use and benefit of water <br />transmission capacity in the WT Line that is equal to the capacity of an eight inch (8") water line <br />with water pressure of not less than 55 psi (the "Kyle Capacity"), and subject to the obligation of <br />San Marcos to use the Kyle Capacity for the transmission of potable drinking water to Kyle at <br />the Point of Delivery. San Marcos shall operate and maintain the WT Line after acceptance of <br />the WT Line as built. <br /> <br />C. Kyle and San Marcos shall each participate in the cost and expense of designing, constructing <br />and installing the WT Line. Kyle shall obtain bids for both an eight-inch (8") water line and a <br />twelve-inch (12") water line. San Marcos shall fund and pay to Kyle the cost difference between <br />the bid for a 12" water line and the bid for the 8" water line. Such payment shall be made by San <br />Marcos in monthly increments as and when Kyle makes progress payments on the contract for <br />construction of the WT Line. The San Marcos progress payments to Kyle shall be a percentage <br />of each progress payment that is equal to the percentage of the total cost of constructing and <br />installing the WT Line that is to be paid by San Marcos. <br /> <br />D. In addition to the WT Line and the GST, Kyle shall construct and install a twelve-inch (12") <br />water line (the "Kyle WTL") on the north side of Yarrington Road, from the Point of Delivery at <br />the GST to a point of connection with the Kyle water system at the intersection of Interstate <br />Highway 35 and Yarrington Road. Kyle shall fund and pay all costs and expenses for designing, <br /> <br />C:IMy DocumentslAGRsmwa.doc <br /> <br />Page 2 <br />