<PAGE>   1
                                                                   EXHIBIT 10.13


                RESIGNATION AGREEMENT AND MUTUAL GENERAL RELEASE


        This Resignation Agreement and Mutual General Release ("Agreement"),
entered into by and between Western Water Company, a Delaware corporation
("Western Water"), on the one hand, and Eric R. Robbins, an individual
("Robbins"), on the other hand (Western Water and Robbins are sometimes
hereinafter referred to individually as a "Party" and collectively as the
"Parties"), is made with respect to the following facts:

                                 R E C I T A L S

        A. Western Water and Robbins entered into an Employment Agreement dated
August 15, 1997.

        B. Robbins and Western Water desire to terminate the Employment
Agreement.

        C. The Parties now intend to fully and finally settle and compromise any
and all other Claims (as defined below) of any type, whether known or unknown,
arising prior to the date hereof, and to execute and deliver this Agreement.

        NOW, THEREFORE, in consideration of the mutual covenants contained
herein, and for other good and valuable consideration, the receipt and adequacy
of which are hereby acknowledged, the Parties agree as follows:

                              OPERATIVE PROVISIONS

        1. Resignation. Robbins shall resign effective January 31, 1998, in all
capacities as an officer and employee of Western Water by executing Exhibit A
attached hereto contemporaneous with the execution of this Agreement by the
Parties.

        2. Consideration. Western Water and Robbins agree to the following
actions in full discharge of any and all of Western Water's obligations to
Robbins including, without limitation, any possible claims of Robbins:

                (a) In consideration of Robbins' performance of his obligations
under this Agreement, Western Water shall pay to Robbins as a severance payment
the sum of Three Hundred and Thirty Thousand Dollars ($330,000.00) less
deductions required by law, including without limitation FICA, State and Federal
withholding, and SDI ("appropriate withholdings"). This sum shall be paid to
Robbins in the form of forty-eight (48) equal payments over a period of two (2)
years. The payments shall be made to Robbins twice per month, on the 15th and
last business days of each month, commencing February 13, 1998 and concluding on
January 31, 2000.

                (b) On February 1, 1998, Western Water shall pay to Robbins Nine
Thousand Five Hundred Nineteen Dollars ($9,519.00) for accrued vacation time to
which Robbins is entitled, less appropriate withholdings and less the advance of
Five Thousand Dollars ($5,000.00) Western Water previously made to Robbins.

                (c) Robbins presently owns incentive or non-qualified options to
purchase 160,000 shares of common stock of Western Water. The terms of such
options shall be and are hereby amended to provide that on the date of the
execution of this agreement they will be fully vested, and all 160,000 options
shall expire on the second anniversary of the execution of this Agreement, if
not sooner exercised.

                (d) In consideration of the payments to be made in sub-section
2(a), and to ensure an orderly transition for Western Water matters on which he
is working, Robbins hereby agrees that he 



                                       1
<PAGE>   2

will act as a consultant to Western Water from February 1, 1998 to March 31,
1998, on an "as-needed" basis, not to exceed 40 hours per week. Robbins shall
perform such consulting services under the direction of and at the request of
the President of Western Water Company. Robbins shall not charge Western Water
for these consulting services; however, upon presentation by Robbins of
appropriate documentation of the expenses incurred, Western Water shall
reimburse Robbins for all reasonable and necessary out-of-pocket expenses he
incurs in performing such consulting services.

                (e) Western Water shall reimburse Robbins for all corporate
expenses Robbins incurs on Western Water's behalf through January 31, 1998, upon
presentation by Robbins to Western Water of appropriate documentation of the
expenses incurred.

                (f) Robbins shall be entitled to keep and retain the Xerox
machine, computer, computer related equipment, fax machine, office supplies, and
materials located at 24976 Oxford Drive, Laguna Niguel, California (Robbins'
residence from which he has conducted Western Water's marketing and sales
activities).

                (g) Western Water shall reimburse Robbins for all his attorneys'
fees incurred in preparing, negotiating and completing this Agreement, up to the
sum of $2,000.00, subject to appropriate documentation of such attorneys' fees.

        3. Release by Robbins. Subject to Section 15, Robbins, on behalf of
himself and his spouse, family members, relatives, affiliates, assignors,
assigns, predecessors and successors-in-interest, and their respective
officers, directors, shareholders, principals, partners, employees, assigns, and
attorneys (collectively the "Robbins Releasing Parties"), hereby forever
unconditionally releases and discharges Western Water (including its
shareholders, officers, directors, employees, subsidiaries and affiliates,
agents, lawyers and representatives), and their spouses, family members,
relatives, predecessors and successors-in-interest, and their respective
affiliates, servants, agents, representatives, assigns and attorneys
(collectively the "Western Water Released Parties"), from any and all rights,
liabilities, claims, demands, damages, costs, fees, expenses, losses, judgments,
liens, interests, debts, actions and causes of action of every kind whatsoever
(collectively, the "Claims") that Robbins has, had or may have, arising or
accruing on or before the date hereof, regardless of whether asserted before, on
or after the date hereof, and regardless of whether known or unknown, including
without limitation the following: (a) Robbins' employment with Western Water;
(b) the cessation of Robbins' employment with Western Water; (c) the allegations
by Robbins regarding allegedly improper management policies and practices of
Western Water; (d) violations of any contracts, express or implied, any covenant
of good faith and fair dealing, express or implied, any breach of fiduciary
obligation, or any tort, including, without limitation, defamation, invasion of
privacy, intentional or negligent infliction of emotional distress, fraud,
negligent misrepresentation, wrongful discharge in violation of public policy or
any legal restrictions on Western Water's right to terminate employees, or any
federal, state, or other governmental statute, regulation or ordinance,
including, without limitation; i) Title VII of the Civil Rights Act of 1964
(race, color, religion, sex, and national origin discrimination); ii) 42 U.S.C.
Section 1981 (discrimination); iii) 29 U.S.C. Section 206(d)(1) (equal pay); iv)
the California Fair Employment and Housing Act (discrimination including race,
color, national origin, ancestry, physical handicap, medical condition, marital
status, sex or age); v) Executive Order 11246 (race, color, religion, sex and
national origin discrimination); vi) Sections 503 and 504 of the Rehabilitation
Act of 1973 (handicap discrimination); vii) California Labor Code (wages, hours
and other regulations of employment); and viii) the Employee Retirement Income
Security Act of 1974 (ERISA) (denial of employee benefits) (collectively the
"Robbins Released Claims"). Robbins agrees never to seek, reapply or apply for
employment or reemployment from Western Water or the Western Water Released
Parties, and agrees not to bring any action of any kind, administrative or
judicial, based upon any future denial of employment or reemployment, excepting
only Robbins' professional association with former Western Water officer and
director John Huston with Integrated Water Technologies, otherwise known as IWT.

        4. Covenant Not to Sue by Robbins. Subject to Section 15, Robbins, on
his behalf and on behalf of the Robbins Releasing Parties, hereby forever
unconditionally agrees and covenants to refrain 



                                       2
<PAGE>   3

from suing Western Water or any of the Western Water Released Parties or
bringing any action of any kind whatsoever against Western Water or any of the
Western Water Released Parties with respect to the Robbins Released Claims.

        5. Release by Western Water. Subject to Section 15, Western Water, on
behalf of itself and on behalf of its affiliates, assignors, assigns,
predecessors and successors-in-interest, and their respective officers,
directors, shareholders, principals, partners, employees, assigns, and attorneys
(collectively the "Western Water Releasing Parties"), hereby forever
unconditionally releases and discharges Robbins and his spouse, family members,
relatives, predecessors and successors-in-interest, and their respective
officers, directors, shareholders, principals, partners, employees, affiliates,
servants, representatives, assigns and attorneys (collectively the "Robbins
Released Parties") from any and all rights, liabilities, claims, demands,
damages, costs, fees, expenses, losses, judgments, liens, interests, debts,
actions, and causes of action of every kind whatsoever (collectively the
"Claims") that Western Water has, had or may have, arising or accruing on or
before the date hereof, regardless of whether asserted before, on or after the
date hereof, and regardless of whether known or unknown, including without
limitation the following: (a) Robbins' employment with Western Water; (b) the
cessation of Robbins' employment with Western Water; (c) the allegations by
Robbins regarding allegedly improper management policies and practices of
Western Water; and (d) violations of any contracts, express or implied, any
covenant of good faith and fair dealing, express or implied, any breach of
fiduciary obligation, or any tort, including, without limitation, defamation,
invasion of privacy, intentional or negligent infliction of emotional distress,
fraud, negligent misrepresentation, or any federal, state, or other governmental
statute, regulation or ordinance (collectively the "Western Water Released
Claims").

        6. Covenant Not to Sue by Western Water. Subject to Section 15, Western
Water, on its behalf and on behalf of the Western Water Releasing Parties,
hereby forever unconditionally agrees and covenants to refrain from suing
Robbins or any of the Robbins Released Parties or bringing any action of any
kind whatsoever against Robbins or any of the Robbins Released Parties with
respect to the Western Water Released Claims.

        7. Unknown Claims. Subject to Section 15, Robbins, on his behalf and on
behalf of the Robbins Releasing Parties, and Western Water, on its behalf and on
behalf of the Western Water Releasing Parties, understand and hereby agree that
this Agreement shall act as a release of any and all Robbins Released Claims and
Western Water Released Claims, respectively, whether known or unknown, arising,
accruing or based on facts, events or circumstances in existence on or before
the date hereof, whether known or unknown, that each of the Parties has, had or
may ever have against each of the other Parties relating to the Robbins Released
Claims and the Western Water Released Claims.

               In this connection, each of Robbins, on his behalf and on behalf
of the Robbins Releasing Parties, and Western Water, on its behalf and on behalf
of the Western Water Releasing Parties, acknowledge that, subject to Section 15
hereof, each hereby releases the Robbins Released Claims, and Western Water
Released Claims, respectively, whether such currently are known or unknown,
foreseen or unforeseen, suspected to exist or not suspected to exist, and each
of the Parties acknowledges that each has read, is familiar with, understands
and waives the provisions of California Civil Code Section 1542, which provides
as follows:

               A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR
               DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF
               EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY
               AFFECTED HIS SETTLEMENT WITH THE DEBTOR.

               Furthermore, each of the Parties acknowledges that the foregoing
waivers were separately bargained for and are a key element of the consideration
for entering into this Agreement.



                                       3
<PAGE>   4

        8. Insurance and Indemnification. Nothing contained in this Agreement
shall be interpreted or construed or deemed to be interpreted or construed as
preventing Robbins from obtaining indemnification from Western Water if such
indemnification otherwise would be available to Robbins strictly in accordance
with Article 11 of the Bylaws of Western Water and applicable common or
statutory law.

        9. Information. "Confidential Information" means documented information
not in the public domain and not published that Western Water or the Western
Water Released Parties, in the period preceding and up to and including the
cessation of Robbins' employment, developed, compiled, owned, or have received
under conditions of confidentiality, and Western Water trade secrets, Western
Water unpublished data, Western Water marketing plans, Western Water business
plans, Western Water unpublished financial information, Western Water budgets,
and Western Water corporate unpublished projections, strategies, research, or
forecasts, the disclosure of which could be detrimental to Western Water or
subject Western Water to liability to a third party. Robbins acknowledges that
by reason of his position with Western Water he has been given access to such
Confidential Information. Robbins represents and warrants that he does have in
his possession, but will deliver to Western Water prior to January 31, 1998, any
and all documented Confidential Information and any copies thereof, together
with all documents belonging to Western Water or the Western Water Released
Parties. Robbins agrees that he shall preserve as confidential and not use any
Confidential Information.

        10. Taxes. Except for the appropriate withholdings, Robbins shall be
liable for the payment of all federal and state taxes which may be due as a
result of the payment of Western Water to Robbins of the consideration stated in
sub-Sections 2(a) through 2 (g). Should Robbins not pay all state and federal
taxes which may be due as the result of Western Water's payment to him of said
consideration, Robbins agrees to save, hold harmless, indemnify and defend (with
counsel acceptable to Western Water) Western Water and the Western Water
Released Parties from any and all loss, cost, fees, claims, damages or expense's
(including without limitation reasonable attorney's fees, costs and
disbursements) taxes, interest or penalties incurred by Western Water and the
Western Water Released Parties in any way arising out of a breach of Robbins'
obligations arising out of this section 10.

        11. No Duress. Each of the Parties hereto acknowledges that each has
been advised by or has had the opportunity to consult legal counsel in
connection with the granting of the releases contained in this Agreement and
that this Agreement is entered into freely, without duress, coercion, menace or
other undue influence.

        12. Voluntary Execution. Each of the Parties hereto: (a) voluntarily and
knowingly executes this Agreement with the intent of effecting the
extinguishment of the Robbins Released Claims and the Western Water Released
Claims, whichever applies; (b) has read this Agreement and understands all of
its terms; and (c) has executed this Agreement, with full knowledge of its
significance without relying upon any representations or warranties, except
those set forth as provided for herein, by any of the other Parties or their
attorneys.

        13. Representations and Warranties. Each of the Parties hereto
represents and warrants that: (a) the person executing this Agreement on behalf
of such Party has the authority to execute and deliver this Agreement; (b) he or
it has taken all necessary action to authorize the execution and delivery of
this Agreement; and (c) he or it has all requisite power to consummate the
transactions contemplated by this Agreement and to perform the obligations under
this Agreement.

        14. No Admission of Liability. This Agreement is a compromise of
disputed claims, and the execution of this Agreement shall not be considered or
treated at any time or for any purpose as an admission of liability by any of
the Parties to this Agreement. No past or present wrongdoing on the part of any
of the Parties shall be implied from the negotiation or the consummation of this
Agreement.

        15. Effectiveness of Agreement and Releases. The date of execution or
entry into this Agreement shall be deemed the last date of execution of the
Agreement by any of the Parties (the "Date 



                                       4
<PAGE>   5

of Entry"). This Agreement is intended to and shall become effective only upon
the execution of this Agreement by each of the Parties hereto. The releases set
forth in this Agreement shall not apply to breaches of this Agreement by either
Party.

        16. No Transfer of Claims. Except as otherwise provided herein, each
Party warrants and represents to the other Party that it has not transferred,
assigned, sold, hypothecated or otherwise conveyed, or purported to transfer,
assign, sell, hypothecate or otherwise convey, any of the Robbins Released
Claims or Western Water Released Claims, as the case may be, that such Party may
have against the other Party, and each Party hereby agrees to save, hold
harmless, indemnify and defend (with counsel reasonably acceptable to the
indemnified Party) the other Party from and against any and all loss, cost,
fees, claims, damages or expenses (including without limitation reasonable
attorneys' fees, costs and disbursements) in any way arising out of a breach of
the foregoing representations.

        17. Confidentiality of Agreement. Except for the public announcement
attached as Exhibit B hereto, and except as provided in sub-Section 19(b), no
public announcement concerning the negotiation, execution and/or delivery of
this Agreement or the transactions contemplated hereby, or concerning the facts
and circumstances surrounding Robbins' cessation of employment with Western
Water (the "Settlement Information"), shall be made by any Party, and all
Settlement Information shall be deemed confidential. Either Party's disclosure
of the fact that the Parties entered into this Agreement shall not be deemed a
public announcement of Settlement Information within the meaning of this Section
17.

        18. Non-Defamatory and Disparaging Statements. Neither Party shall make
any defamatory statements concerning the other Party. Each Party represents and
warrants that such Party and its agents, representatives and attorneys have not
made, at any time, any defamatory statements regarding the other Party to any
third party. Robbins agrees that he has not, directly or indirectly, disparaged,
and will not, directly or indirectly disparage, Western Water in any way, and
that he will not make any disparaging comments to entities (including, without
limitation, banks and shareholders) doing business with or contemplating doing
business with Western Water concerning Western Water, its officers and
directors, its management policies, and its properties. Western Water, on its
behalf and on behalf of the Western Water Released Parties, agrees that it has
not, directly or indirectly, disparaged Robbins in any way, and that it will not
make any disparaging comments to entities (including, without limitation, banks
and shareholders) doing business with or contemplating doing business with
Robbins.

        19. Disclosure Provision. Notwithstanding any provision to the contrary
contained herein, each Party shall be entitled to disclose the Settlement
Information: (a) to the extent the same shall have otherwise become publicly
available (unless made publicly available only by the Party seeking to disclose
the same); (b) to their spouses, attorneys, and accountants, provided such
persons are informed of this confidentiality provision and agree to be bound
hereby; (c) as required by federal or state law, including without limitation
federal or state securities laws; (d) as required by court order deposition or
document subpoena or otherwise in truthful statements made under oath or penalty
of perjury; or (e) as necessary to enforce this Agreement or any provision or
term of this Agreement, or defend against the alleged breach of this Agreement
or any provision or term of this Agreement.

        20.    Miscellaneous.

                (a) Attorneys' Fees. Should any Party to this Agreement
reasonably retain counsel for the purpose of enforcing any provision of this
Agreement, including without limitation instituting any action or proceeding to
enforce any provision of this Agreement, for damages or injunctive or other
relief by reason of any alleged breach of any provision of this Agreement for a
declaration based on a demonstrated necessity of such Party's rights or
obligations under this Agreement, or for any other judicial or equitable remedy,
then if the matter is resolved by judicial or quasi judicial determination
(including arbitration, if such arbitration is agreed to by the Parties), the
prevailing Party or Parties shall be entitled, in addition such other relief as
may be granted, to be reimbursed by the losing Party or Parties for all
reasonable costs and expenses incurred, including without limitation all
reasonable



                                       5
<PAGE>   6

attorneys' fees and costs for services rendered to the prevailing Party or
Parties and all reasonable attorneys' fees and costs incurred in enforcing any
judgment or order entered. The prevailing Party or Parties shall be determined
by the court (or arbitrator, if arbitration is agreed to by the Parties) in the
initial or any subsequent proceeding.

                (b) Controlling Law. This Agreement shall be governed by,
construed and interpreted in accordance with the laws of the State of
California, without giving effect to any choice-of-law or conflicts-of-laws rule
or principle that would result in application of other laws.

                (c) Headings. Headings, titles and captions hereof are for
convenience only and shall not constitute a portion of this Agreement or be used
for the interpretation thereof.

                (d) Amendment. Neither this Agreement nor any provision hereof
may be waived, modified, amended, discharged, or terminated except by an
instrument in writing signed by the Party against which the enforcement of such
writing is sought, and then only to the extent set forth in writing.

                (e) Waiver. Any waiver of any provision or of any breach of any
provision of this Agreement must be in writing and any waiver by any Party of
any breach of any provision of this Agreement shall not operate as or be
construed to be a waiver of any other breach of that provision or of any breach
of any other provision of this Agreement. The failure of any Party to insist
upon strict adherence to any term of this Agreement on one or more occasions
shall not be considered or construed or deemed a waiver of any provision, or any
breach of any provision, of this Agreement or deprive that Party of the right
thereafter to insist upon strict adherence to that term or provision, or any
other term or provision, of this Agreement. No delay or omission on the part of
any of the Parties in exercising any right under this Agreement shall operate as
a waiver of any such right or any other right under this Agreement.

                (f) Liberal Construction. This Agreement constitutes a fully
negotiated agreement among commercially sophisticated parties, each assisted by
legal counsel, and the terms of this Agreement shall not be construed or
interpreted for or against any Party hereto. The Parties hereby agree that
California Civil Code Section 1654 shall not apply to the terms of this
Agreement.

                (g) Entire Agreement. This Agreement constitutes the entire
understanding between the Parties with respect to the matters set forth herein
and supersedes all prior or contemporaneous understandings or agreements between
the Parties with respect to the subject matter hereof whether oral or written.

                (h) Notice. Any notice, approval, consent, waiver or other
communication required or permitted to be given or to be served upon any of the
Parties in connection with this Agreement shall be in writing. Such notice shall
be personally served, sent by facsimile, telegram, or cable, or sent prepaid by
registered or certified mail with return receipt requested, or sent by reputable
overnight delivery service, such as Federal Express, and shall be deemed given:
i) if personally served, when delivered to the Party to whom such notice is
addressed; ii) if given by facsimile, telegram, or cable, when sent; iii) if
given by prepaid or certified mail with return receipt requested, on the date of
execution of the return receipt; or iv) if sent by reputable overnight delivery
service, such as Federal Express, when received. Any notice given by facsimile,
telegram, or cable shall be confirmed in writing by the Party sending such
notice, and such confirmation shall be delivered or sent by any of the other
means of delivery set forth in this Section 20, within forty-eight (48) hours
after notice was sent by facsimile, telegram or cable. Such notices shall be
addressed to the Party to whom such notice is to be given at the Party's address
set forth below or as such Party shall otherwise direct in a writing to all
other Parties delivered or sent in accordance with this Section 20(h).



                                       6
<PAGE>   7


If to Western Water, to:

        Western Water Company
        4660 La Jolla Village Drive
        Suite 825
        San Diego, California 92122
        Attn: Peter L. Jensen
        Fax No. (619) 535-9260

With a copy to:

        Lorenz Alhadeff Cannon & Rose, LLP
        550 West C Street
        Nineteenth Floor
        San Diego, California 92101
        Attn: Keith R. Solar, Esq.
        Fax No. (619) 231-8323

If to Robbins, to:

        Eric R. Robbins
        24976 Oxford Drive
        Laguna Niguel, California 92677

With a copy to:

        Strauss & Asher
        750 B Street
        Suite 1910
        San Diego, CA 92101
        Attn: David Strauss, Esq.
        Fax No. (619) 237-5311

                (i) Binding Effect; Assignment. Neither this Agreement nor any
of the rights, interests, or obligations hereunder shall be assignable by any
Party without the prior written consent of all other Parties, which shall not be
unreasonably withheld. Subject to the foregoing restriction, provisions of this
Agreement shall be binding upon and inure to the benefit of all affiliates,
parent corporations, subsidiaries, assigns, successors-in-interest, personal
representatives, administrators, spouses, family members, relatives, heirs,
devisees and legatees of the Parties hereto.

                (j) Severability. If any provision of this Agreement is invalid,
illegal or unenforceable, the balance of this Agreement shall remain in full
force and effect notwithstanding such invalidity, illegality or
unenforceability.

                (k) Good Faith and Fair Dealing. The Parties hereto acknowledge
and agree that the performances required by the provisions of this Agreement
shall be undertaken in good faith, and with all Parties dealing fairly with each
other.

                (l) No Third Party Beneficiaries. This Agreement does not
create, and shall not be construed to create, any rights enforceable by any
person, partnership, corporation, joint venture, limited liability company or
other form of organization or association of any kind, not a Party to this
Agreement, excepting only those rights benefiting non-parties to this Agreement
created by the terms of Sections 3, 5, 9 and 20(i) in this Agreement.



                                       7
<PAGE>   8

                (m) Costs and Fees of Litigation. Except as otherwise set forth
in this Agreement, each of the Parties acknowledges and agrees that each of the
Parties shall bear his or its own attorney's fees and costs incurred on account
of, or in any way related to or arising from, the negotiation and execution of
this Agreement.

                (n) Arbitration. Any dispute or controversy between the Parties
in any way arising out of, related to, or connected with this Agreement or the
subject matter thereof, otherwise in any way arising out of, related to, or
connected with Robbins' employment with Western Water, shall be resolved through
final and binding arbitration in San Diego, California, pursuant to California
Civil Procedure Code Section 12801294.2, and shall include limited
discovery rights as agreed to by the Parties, or as ordered by the arbitrator.
The arbitration shall be before the American Arbitration Association Employee
Dispute Panel and shall be governed by the National Rules for the Resolution of
Employment Disputes and/or the Commercial Arbitration Rules promulgated by the
American Arbitration Association. In the event of such arbitration, it is the
intent of the parties to provide for judicial review of the arbitrator's award
for errors of law and fact and to permit the reviewing court to revise and
correct the award accordingly. The prevailing Party shall be entitled to recover
all reasonable costs and expenses incurred by such Party in connection
therewith, including attorneys' fees. The non-prevailing Party shall also be
solely responsible for all costs of the arbitration, including, but not limited
to, the arbitrators' fees, court reporters' fees, and any and all other
administrative costs of the arbitration, and promptly shall reimburse the
prevailing Party for any portion of such costs previously paid the prevailing
Party. Any dispute as to the reasonableness of costs and expenses shall be
determined by the arbitrator.

                (o) Competition and Non-Solicitation. Robbins agrees that for a
period of 24 months from the Entry Date of this Agreement Robbins shall not
directly or indirectly, without the prior written consent of Western Water:

                      (i) solicit, entice, persuade or induce any employee,
consultant, agent or independent contractor of Western Water, or any of the
subsidiaries or affiliates of Western Water, to become employed by any person,
firm or corporation other than Western Water, or such subsidiary or affiliate,
or approach any such employee, consultant, agent or independent contractor for
any of the foregoing purposes, or authorize or assist in the taking of any such
actions by any third party; provided, however, this restriction does not apply
to Robbins' association with former Western Water officer, director, and
employee John Huston;

                      (ii) directly or indirectly own, control, or invest in any
entity (other than Western Water and Integrated Water Technologies, otherwise
known as ("IWT") which buys or sells water rights in the states of Utah,
California, Nevada, Arizona, and New Mexico; provided, however, that
notwithstanding anything herein to the contrary, nothing shall limit Robbins'
right to hold and make passive investments not in excess of 5% of the
outstanding Common Stock of any publicly traded entity; or

                      (iii) solicit any entity presently having a contractual
relationship with Western Water, which at the time of solicitation has a
contractual relationship with Western Water.

               (p) Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument. The signature page of any counterpart
may be detached therefrom without impairing the legal effect of the signature(s)
thereon, provided such signature page is attached to any other counterpart
identical thereto except having additional signature page(s) executed by one or
more of the other Parties. Each of the Parties agrees that each of the other
Parties may rely upon the facsimile signature of any Party on this Agreement as
constituting a duly authorized, irrevocable, actual, current delivery of this
Agreement as fully as if this Agreement contained the original ink signature of
the Party or Parties supplying a facsimile signature.



                                       8
<PAGE>   9


IN WITNESS WHEREOF, this Agreement is executed as of the last date below
written.


WESTERN WATER COMPANY, a Delaware corporation




/s/     PETER L. JENSEN                       Dated:  January 30, 1998.
----------------------------------
By: Peter L. Jensen, President



ERIC R. ROBBINS ("ROBBINS")



/s/     ERIC R. ROBBINS                       Dated:  January 30, 1998.
-----------------------------------
Eric R. Robbins


APPROVED AS TO FORM AND CONTENT:

LORENZ ALHADEFF CANNON 8 ROSE, LLP



By: /s/ KEITH R. SOLAR
   -----------------------------------
        Keith R. Solar, Esq.
        Robert J. Parks, Esq.
        Attorney for Western Water Company

STRAUSS & ASHER



By:  /s/       MARK A. BENNETT
   -----------------------------------
        David J. Strauss, Esq.
        Mark A. Bennett, Esq.
        Attorney for Eric R. Robbins



                                CONSENT OF SPOUSE

        I, Kristine M. Robbins, acknowledge that I have read the foregoing
Resignation Agreement and Mutual General Release ("Agreement") and that I know
its contents. I am aware that by its provisions my spouse, Eric R. Robbins,
agrees to waive and release the Robbins Released Claims, as that term is defined
in the Agreement, against Western Water and the Western Water Released Parties,
as those terms are defined in the Agreement, including my community interest, if
any, in the Robbins Released Claims. I am aware that my spouse was given or took
21 days to consider the foregoing Agreement and voluntarily chose to sign the
Agreement prior to the expiration of the 21-day period. I hereby consent to my
spouse's waiver and release of the Robbins Released Claims and to my spouse's
execution of the Agreement prior to the expiration of the 21-day period, and
agree that the Robbins Released Claims and my interest in them are subject to
the provisions of the Agreement and that I will take no action at any 



                                       9
<PAGE>   10

time to hinder operation of the Agreement or to assert any of the Robbins
Released Claims against Western Water or the Western Water Released Parties.

        I declare under penalty of perjury under the laws of the State of
California that the foregoing is true and correct.

        Executed this 29th day of January, 1998 in Laguna Niguel, California.



                                            /s/    KRISTINE M. ROBBINS
                                            ------------------------------------
                                            Kristine M. Robbins


                                       10
<PAGE>   11

                                    EXHIBIT A


        This is to advise you that effective January 31, 1998, I hereby resign
my positions as an officer and an employee of Western Water Company and any
subsidiaries or affiliates of Western Water Company.



                                            /s/    ERIC R. ROBBINS
                                            ------------------------------------
                                            Eric R. Robbins



                                       11
<PAGE>   12


                                    EXHIBIT B

        WESTERN WATER COMPANY ANNOUNCES OF RESIGNATION OF ERIC R. ROBBINS
                 AS AN OFFICER AND VICE PRESIDENT OF THE COMPANY

        Western Water Company (Nasdaq: WWTR) announced today that Eric R.
Robbins has resigned as an Officer and Vice President of the Company.

        Peter L. Jensen, President of Western Water, said: "Mr. Robbins assisted
Western Water in identifying and developing new markets for the Company. His
expertise and contacts helped Western Water become a leader in the emerging
water transfer market. I look forward to working with him in his new pursuits
and expect to have a productive and ongoing relationship."


                                       12