EXHIBIT 5-A

MEMORANDUM OF UNDERSTANDING

The purpose of this memorandum of understanding ("MOU") is to express non-binding but serious intention, on the part of the public entities on whose behalf this MOU is signed below, to do the following:

1. Jointly explore, with other public entity purveyors of water in Monterey and Santa Cruz Counties, the merits of developing a desalination project to be primarily located in Moss Landing (the "Project").

2. Subject to review and approval of organizational documents, to become a member of a joint powers authority ("JPA") to be formed to further explore development of the Project and, if merited, to undertake financing and development of the Project, as more fully described in the attached "Summary of Proposed Terms."

3. If the undersigned entity determines that participation in development of the Project is warranted, to enter into a Subscription Contract with the JPA to subscribe for a share of the Project Water at a cost over 30 years equal to a proportionate amount of debt service on bonds to be issued by the JPA to finance the Project plus operation and maintenance expenses, as more fully described in the attached "Summary of Proposed Terms."

Execution of this MOU does not bind any of the undersigned entities to become a member of a JPA, to subscribe for shares of Project Water or to otherwise purchase water from the Project. Each of these steps, if undertaken, would be the subject of separate agreement and separate approval based on incremental development and evaluation of the Project.

[Name of Entity]

By_____________________

Date__________________

[Name of Entity]

By_____________________

Date__________________

[Name of Entity]

By______________________

Date___________________

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