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R-86-923 - 10/9/1986THE STATE OF TEXAS COUNTY OF WILLIAMSON This agreement ( "Agreement ") regarding the construction, ownership, purchase, and use of certain wastewater transportation improvements is made and entered into as of the day of October, 1986, by and between the following: BRUSHY CREEK WATER CONTROL AND IMPROVEMENT DISTRICT NO. 1 OF WILLIAMSON AND MILAM COUNTIES ( "District "), a political subdivision of the State of Texas organized as a conservation and reclamation district under authority of Article 16, Section 59 of the Texas Constitution, CITY OF AUSTIN ( "Austin "), a municipal corporation organized under authority of Article 11, Section 5 of the Texas Constitution, CITY OF ROUND ROCK ( "Round Rock "), a municipal corporation organized under authority of Article 11, Section 5 of the Texas Constitution, WILLIAMSON COUNTY MUNICIPAL UTILITY DISTRICT NO. 2 ( "MUD 2 "), a political subdivision of the State of Texas, organized under authority of Article 16, Section 59 of the Texas Constitution, WILLIAMSON COUNTY MUNICIPAL UTILITY DISTRICT NO. 3 ( "MUD 3 "), a political subdivision of the State of Texas, organized under authority of Article 16, Section 59 of the Texas Constitution, FERN BLUFF MUNICIPAL UTILITY DISTRICT ( "Fern Bluff "), a political subdivision of the State of Texas, organized under authority of Article 16, Section 59 of the Texas Constitution, and AGREEMENT REGARDING CONSTRUCTION, OWNERSHIP, PURCHASE, AND USE OF SPECIFIC WASTEWATER TRANSPORTATION FACILITIES BILL MILBURN, INC. ( "Milburn "), a Texas corporation. RECITALS 1. The District previously signed an agreement with Austin, Round Rock, MUD 2 and MUD 3, which agreement is captioned "Wastewater Disposal Contract" and dated December 16, 1985. In this Agreement, Austin, Round Rock, MUD 2 and MUD 3 are collectively referred to as the "Customers." The Wastewater Disposal Contract provides for the construction and operation by the District of a regionalized wastewater transportation and treatment system owned by the Customers which system would serve the western portion of the Brushy Creek watershed in Williamson County, Texas. In this Agreement, the wastewater transportation and treatment system is referred to as the "District's System." 2. The District's System is described in the Wastewater Disposal Contract by reference to an engineering report, which report may be modified from time to time. Integral parts of Phases lA and 1B of the District's System are the Onion Creek Pumpover and Onion Creek Interceptor, Phase 1 and 2, all projects being subsequently described in Section 1.01 of this Agreement. The District proposes to use the Onion Creek Pumpover and the Onion Creek Interceptor to transport wastewater from the Brushy Creek watershed west of Round Rock to Round Rock's wastewater collection system in the Onion Creek watershed on an interim basis until the District can complete construction of the District's treatment facilities and the facilities which are proposed to transport the wastewater from the Brushy Creek watershed through Round Rock's corporate limits to the District's treatment facilities. 3. Milburn proposes to immediately construct the initial phase of the District's proposed Onion Creek Pumpover, Phase 1 of the District's Onion Creek Interceptor, and a 12 -inch force main, in an effort to receive wastewater transportation and treatment service for Milburn's property located within the boundaries of Fern Bluff by December 15, 1986. Milburn also proposes to convey the initial phases of the Onion Creek Pumpover and District's Onion Creek Interceptor, Phase 1 constructed by Milburn to the District, if and when the District pays Milburn a portion of the costs paid by Milburn for constructing the portions of the Onion Creek Pumpover and District's Onion Creek Interceptor, Phase 1. 3- 886.17 - 2 (10 -8 -86) 4. Fern Bluff is located within Austin's extraterritorial jurisdiction, so Fern Bluff is eligible to receive wastewater collection, treatment, and disposal service through Austin's participation in the District's System. 5. The general location of the Onion Creek Pumpover, District's Onion Creek Interceptor, 12 -inch force main, and point of connection to Round Rock's existing Onion Creek interceptor is shown on the vicinity map attached to this Agreement as Exhibit "A," attached hereto and incorporated herein for all purposes. AGREEMENT For and in consideration of the mutual promises, covenants, obligations, and benefits of this Agreement, the District, Customers, Fern Bluff, and Milburn contract and agree as follows: ARTICLE I. CONSTRUCTION OF FACILITIES Section 1.01. DESCRIPTION OF FACILITIES. As used in this Agreement, the terms and phrases beginning with capitalized letters listed below shall be defined as follows, unless the context clearly indicates to the contrary: (a) FACILITIES. The term "Facilities" shall mean both the "District Facilities" and "Milburn Force Main." (b) MILBURN FORCE MAIN. The phrase "Milburn Force Main" shall mean the 12 -inch force main approximately 5808 feet in length which begins at the Onion Creek Force Main, parallels Farm to Market Road 3406, and terminates at the Onion Creek Interceptor, Phase 1. (c) DISTRICT FACILITIES. The phrase "District Facilities" shall mean the "Onion Creek Lift Station," "Onion Creek Force Main," and "Onion Creek Interceptor, Phase 1." (d) ONION CREEK PUMPOVER. The phrase "Onion Creek Pumpover" shall mean the "Onion Creek Lift Station," "Onion Creek Force Main" and "Onion Creek Interceptor, Phase 1." (e) ONION CREEK LIFT STATION. The phrase "Onion Creek Lift Station" shall mean the project consisting of a lift station and related appurtenances described in the drawings and plans and specifications for District Contract No. 4, which drawings and 3- 886.17 - 3 (10 -8 -86) plans and specifications are incorporated into this Agreement by reference as if attached to this Agreement as an exhibit, together with fee simple title to the site; an all- weather road located within an access easement from a paved road dedicated to the public as of the effective date of this Agreement to the site; permits, licenses, easements, rights -of -way, and land required for the construction, operation, maintenance, repair, replacement and expansion of the lift station; and all other related appurtenances. The Onion Creek Lift Station shall consist, by way of example and not by limitation, of the following: a wet -well with a capacity of 5000 Living Unit Equivalents (as "LUEs" are defined in the Wastewater Disposal Contract) and an initial pumping capacity of 1650 LUEs. (f) ONION CREEK FORCE MAIN. The phrase "Onion Creek Force Main" shall mean the project consisting of a 16 -inch force main approximately 3055 feet in length, as more specifically described in the drawings and plans and specifications for District Contract No. 5, which drawings and plans and specifications are incorporated into this Agreement by reference as if attached to this Agreement as an exhibit; together with all permits, licenses, easements, rights -of -way, and land required for the construction, operation, maintenance, repair and replacement of the force main; and all other related appurtenances. The Onion Creek Force Main begins at the Onion Creek Lift Station, generally parallels the eastern boundary of the Tonkawa Springs subdivision, and terminates at the Milburn Force Main. (g) ONION CREEK INTERCEPTOR, PHASE 1. The phrase "Onion Creek Interceptor, Phase 1" shall mean the project consisting of a 24 -inch interceptor approximately 1179 feet in length, as shown on the drawing and plans and specifications for District Contract No. 5, which drawings and plans and specifications are incorporated into this Agreement by reference as if attached to this Agreement as an exhibit; together with all permits, licenses, easements, rights -of -way, and land required for the construction, operation, maintenance, repair and replacement of the interceptor; and all other related appurtenances. The Onion 3- 886.17 - 4 (10 -8 -86) Creek Interceptor Phase One shall begin at the Milburn Force Main near Farm to Market Road 3406 and terminate at Round Rock's existing wastewater interceptor for the Onion Creek watershed. (h) ONION CREEK INTERCEPTOR, PHASE 2. The phrase "Onion Creek Interceptor, Phase 2" shall mean the project consisting of a 24 -inch interceptor approximately 7920 feet in length, as more specifically described on the drawings and plans and specifications for District Contract No. 5. The Onion Creek Interceptor, Phase 2 begins at the Onion Creek Force Main and terminates at the beginning of the Onion Creek Interceptor, Phase 1. Section 1.02. AUTHORIZATION TO CONSTRUCT FACILITIES. By execution of this Agreement, District, Customers, and Fern Bluff authorize Milburn to construct the Facilities. The District, Customers and Fern Bluff may terminate their respective authorizations to construct the Facilities in the event Milburn defaults in the performance of this Agreement and after notice of default and opportunity for cure as provided by Section 5.04 of this Agreement, if Milburn does not cure the default during the time allowed for cure of default under Section 5.04 of this Agreement, or if Milburn does not commence construction (as determined by the issuance of notice to the contractor to proceed with construction) of the District Facilities within one hundred twenty (120) days after the date all parties have executed this Agreement. Milburn agrees to proceed with due diligence to construct the District Facilities. Section 1.03. CONSTRUCTION COSTS. All equipment, materials, and supplies required in connection with the construction of the Facilities shall be acquired in the name of Milburn. Milburn shall require the construction contractor or contractors to construct the Facilities in a good and workmanlike manner and to meet the requirements of all federal, state and local regulatory authorities and to represent that the materials used in construction of the Facilities shall be free from defects and fit for their intended purpose. Milburn shall promptly pay when due all costs of constructing or installing the Facilities, 3- 886.17 - 5 (10 -8 -86) including the following by way of example and not by limitation: all engineering, surveying, materials, labor, construction, ,fiscal, legal, administrative, advertising, auditing of project costs, conveyance of Facilities to District, and material testing and construction inspection arising in connection with the construction of the Facilities; all costs incurred in connection with obtaining governmental approvals, certificates, or permits, required as a part of the Facilities; all insurance premiums required of Owner in construction contracts, ad valorem taxes, and any miscellaneous costs by Milburn attributable to the construction of the Facilities; and all out -of- pocket expenses incurred by Milburn in connection with the construction of the Facilities. District, Customers, and Fern Bluff shall not be liable to any contractor, engineer, attorney, materialman, or other party employed or contracted with by Milburn in connection with the construction of the Facilities. Section 1.04. SUPERVISION BY DISTRICT. Milburn shall comply with the following conditions: (a) STATUS REPORTS. Milburn shall make monthly written status reports to District regarding the construction of the Facilities and the costs incurred by Milburn relating to the construction of the Facilities. (b) ENGINEER. Milburn shall employ W.C. Engineers, Inc. who shall (1) perform or supervise construction administration by supervising and controlling the day -to -day activities of the construction of the Facilities, and pursue the timely completion of the Facilities subject to the weather, the availability of adequate labor, machinery and materials, and other factors beyond the control of Milburn; and (2) perform or supervise construction staking and resident project representation during construction of the Facilities. Milburn shall have the right at any time to terminate the services of the engineer and to engage the services of other engineers provided, however, prior to employment of the other engineers, Milburn shall submit the name of the engineer and the contract for engineering services relating to the 3- 886.17 - 6 (10 -8 -86) Facilities to the District for the District's review and approval. (c) PLANS AND SPECIFICATIONS AND CONTRACT DOCUMENTS. Milburn shall obtain the District's and Fern Bluff's approval of the plans and specifications and contract documents for the Facilities. Milburn shall construct the District Facilities in substantial conformance with the drawings, plans and specifications, and contract documents approved by the District. District makes no express warranties and disclaims all implied warranties, if any, with respect to the drawings, plans and specifications, and contract documents. In the event the District does not purchase the District Facilities from Milburn as provided by Article III of this Agreement, Milburn shall not be required to pay District the District's actual cost of preparing the drawings, plans and specifications, and contract documents for the District Facilities. (d) ADVERTISEMENT OF CONSTRUCTION CONTRACT. Milburn represents to District, Customers, and Fern Bluff that Milburn has advertised, or shall advertise, the request for bids for the construction of the Facilities. Milburn further represents to the District, Customers, and Fern Bluff that Milburn has advertised or will advertise the request for bids for the construction of the Facilities in the manner required by law to be followed for advertising the request for bids on construction contracts by municipal utility districts and by water control and improvement districts and as required by the rules of the Texas Water Commission. (e) AWARD OF CONSTRUCTION CONTRACT. Milburn shall review and approve or reject bids for the construction of the Facilities, provided Milburn shall approve or reject bids in the manner required by law to be followed by municipal utility districts and by water control and improvement districts and as required by the rules of the Texas Water Commission. Milburn represents to District, Customers, and Fern Bluff that Milburn has submitted or will submit to the District and Fern Bluff all bids received by Milburn for the contracts for construction of 3- 886.17 - 7 (10 -8 -86) the Facilities; shall advise the District and Fern Bluff regarding the amount of the bids and the experience and competency of the bidders; and shall make recommendations to the District and Fern Bluff concerning the award of the contracts for construction of the Facilities. Milburn shall obtain the District and Fern Bluff's approval of the award of all the contracts for construction of the Facilities and shall file with the Texas Water Commission all construction drawings, plans and specifications, contract documents, and supporting engineering data for the construction and installation of the Facilities, together with evidence that the materials had been filed with and approved by both the District and Fern Bluff. (f) CHANGE ORDERS. Milburn shall review and approve or reject all changes to the plans and specifications and change orders to the contracts for construction of the Facilities. Prior to Milburn's approval of a change to the plans or specifications or a change order, Milburn shall submit the changed plans and specifications and change order, as approved by Milburn's engineer, together with an explanation of the need for the change in plans and specifications or change order, to the District's general manager for review and conditional approval. Milburn shall also submit the requested changes to Fern Bluff for approval. Consideration of approval of the change order or change to the plans and specifications by the Board of Directors shall be considered at the next board meetings of the District and Fern Bluff so long as such request for consideration is filed with the appropriate Board not less than ten (10) days prior to such Board meeting. Within sixty (60) days after approval of a change order by both District and Fern Bluff, Milburn shall file with the Texas Water Commission a copy of the change order, together with supporting engineering data and evidence that the change order was filed with and approved by the District and Fern Bluff. Either District or Fern Bluff may request a change in the plans and specifications and change order, but Milburn shall not be obligated to approve any change in the plans and specifications or change order requested by either Fern Bluff or 3- 886.17 - 8 (10 -8 -86) District if either: (1) except for unforeseen changes that are reasonably necessary to complete and use the Facilities as intended by this Agreement the change in the plans and specifications or change order increases the cost of construction of the Facilities and the request for change order is not accompanied by a financial guarantee acceptable to Milburn in the amount of the cost increase; (2) the change in the plans and specifications or change order increases the time schedule for completion of the Facility; or (3) the change in the plans and specifications or change order reduces the capacity allocated to Milburn or Fern Bluff. (g) PROGRESS AND FINAL PAYMENTS. Milburn shall review and approve or reject all requests for progress and final payments to the contractor or contractors. Within seven (7) days after receipt of an engineer's approval of a request for payment to the contractor, Milburn shall submit to District and Fern Bluff for review and approval such requests for progress and final payments. Within sixty (60) days of completion of the projects, Milburn shall file copies of all requests for progress and final payments with the Texas Water Commission. (h) ADDITIONAL CONSTRUCTION INSPECTION. If Milburn elects to construct the Facilities, Milburn authorizes District, Customers, and Fern Bluff additionally to inspect and test the materials and to observe the test procedures used in the construction of the Facilities; provided, however, that such additional inspection, testing, and observation shall be performed at the expense of the party who chooses to inspect, test, or observe materials or construction. The choice by District, Customers, or Fern Bluff not to inspect, observe, or test materials and procedures used during construction of the Facilities shall not be construed to be a waiver by District, Customers, or Fern Bluff of any defective material or construction. (i) TESTING. Milburn shall notify District and Round Rock at least twenty -four (24) hours in advance of any testing of materials or construction. If District does not observe a 3- 886.17 - 9 (10 -8 -86) testing because Milburn did not give District 24 -hour advance notice of the testing, then if District requests, Milburn shall repeat the testing or cause the testing to be repeated in the presence of District. The cost of the repeated testing shall not be included in the purchase price under Section 3.02 of this Agreement. (j) NON - COMPLIANCE. In the event District, Customers or Fern Bluff observes materials and procedures that do not comply with the drawings, plans and specifications, and general and special conditions approved by the District, District shall report its observations, or the observations by Customers or Fern Bluff, to Milburn within 24 hours of observing the alleged deficiency and Milburn shall correct or cause to be corrected the deficiency, if any. (k) FINAL PLANS. Within sixty (60) days after Milburn's engineer signs the certificate of substantial completion of construction of a completed phase of the Facilities and after the District's purchase of the Facilities, Milburn shall furnish District the following: (1) complete "as- built" plans, together with a certificate, signed and sealed by a registered professional engineer acceptable to the District, that the Facilities shown on the plans, were constructed as shown on the drawings and in accordance with the plans and specifications and change orders, if any, for the Facilities approved by District and also by Fern Bluff for Milburn Facilities; (2) any operations and maintenance manuals for the Onion Creek Lift Station provided by the manufacturer; and (3) a surety's performance bond which shall secure against non - performance or defects for a period starting with the completion of each project of the Facilities to at least six (6) months after the Contractor's one year warranty expires. Section 1.05. RECORDS AND REPORTS. Milburn shall maintain books of records and accounts in which full, true and proper entries are made pertaining to the construction, operation, maintenance and repair of the Facilities or Round Rock Facilities. The books and accounts will be available for 3- 886.17 - 10 (10 -8 -86) inspection and copying by the District, Customers, and Fern Bluff during normal business hours and under reasonable circumstances. Upon transfer of the District Facilities to the District, Milburn shall transfer such records and accounts to the District and Milburn shall have no further duty to maintain such records and accounts. Section 1.06. INDEMNITY BY MILBURN. Milburn shall indemnify the District, Customers, and Fern Bluff and hold the District, Customers, and Fern Bluff free and harmless from and against any and all liens, claims, debts, charges, damages, loss, penalties, and expenses, liquidated or unliquidated, executed or executory, oral or written, express or implied, actual or contingent, not expressly listed or described, but which may be asserted against the District, Customers, and Fern Bluff resulting from occurrences or omissions occurring prior to the time of closing specified in Section 3.03 of this Agreement and arising out of: 1) any default under or in violation of any federal, state, or local statute, regulation, or order relating to the construction of the Facilities; (2) death or injury in connection with construction of the Facilities, or any portion of the Facilities; (3) any damage to property arising out of the construction of the Facilities; or (4) any default by Milburn under any agreement, contract or understanding pertaining to the construction of the Facilities, however caused, except for such injury, death, or property damage caused by the negligence of the District, Customers, or Fern Bluff. In case any action proceeding may be brought against the District, Customers, Fern Bluff for any matter for which the District, Customers 3- 886.17 - 11 (10 -8 -86) or or or Fern Bluff are indemnified under this Section of this Agreement, Milburn shall assume in full and direct the defense of the action or proceeding at Milburn's expense, and subsequently, Milburn shall not be liable to District, Customers, or Fern Bluff for any legal or other expenses, other than reasonable costs subsequently incurred by the District, Customers, or Fern Bluff in connection with the defense of the action or proceeding at the request of Milburn. The District, Customers, and Fern Bluff shall have the right to employ separate counsel in any action and participate in the defense of the action or proceeding, but the fees and expenses of the District's, Customers', or Fern Bluff's counsel shall be at the expense of the District, Customers, or Fern Bluff unless: (1) the employment of separate counsel has been approved by Milburn; or (2) the District, Customers, or Fern Bluff has been advised by counsel that there may be one or more defenses available to the District, Customers, or Fern Bluff which are different from or additional to the defenses available to Milburn. Milburn shall not be liable for any settlement by District, Customers or Fern Bluff of any claim, action or proceeding effected without Milburn's consent. Milburn, prior to construction of the Facilities shall provide proof of insurance for its activities in the construction of the Facilities, which insurance shall include an umbrella policy with a Limitation of Liability of no less than $2,000,000.00. Section 1.07. RISK OF LOSS. As between Milburn and the District, Milburn shall bear all risk of loss of or damage to the District Facilities, occurring prior to the time of closing specified in Section 3.3 of this Agreement. ARTICLE II. LEASE OF FACILITIES Section 2.01. LEASE. Subject to District's right to purchase the District Facilities as provided by Section 3.01, and Milburn's right to capacity within the Facilities as provided by Sections 3.06 and 4.01 of this Agreement, Milburn may lease the Facilities to Fern Bluff. Provided, however, such lease shall in no manner release Milburn from any duties or obligations hereunder to the District or Customers. Upon purchase of the Facilities by the District, such lease shall terminate. Section 2.02. ALTERATIONS. During the term of the lease as provided by Section 2.01 of this Agreement, Milburn and Fern Bluff shall make no alterations, improvements, or additions to the District Facilities, without the prior consent of District and Customers, however, the prior consent of District and Customers shall not be required when the alteration, improvement, 3- 886.17 - 12 (10 -8 -86) or addition is necessary to maintain service to the public or to avoid or mitigate damage to the District Facilities or other property. Such alterations, improvements or additions to the District Facilities shall not be reimbursed to Milburn pursuant to Sections 3.01 and 3.02 without the approval of the District. Section 2.03. INDEMNITY BY FERN BLUFF. Fern Bluff shall indemnify the District and Customers and hold the District and Customers free and harmless from and against any and all liens, claims, debts, charges, damages, loss, penalties, and expenses, liquidated or unliquidated, executed or executory, oral or written, express or implied, actual or contingent, not expressly listed or described, but which may be asserted against the District and Customers resulting from occurrences or omissions occurring prior to the time of closing specified in Section 3.03 of this Agreement and arising out of: (1) any default under or in violation of any federal, state or local statute, regulation, or order relating to the operation and maintenance of the Facilities; (2) death or injury in connection with operation, maintenance, repair, replacement or condition of the Facilities; (3) any damage to property arising out of the operation, maintenance, repair, replacement, or existence of the Facilities, however caused, except for such injury, death, or property damage caused by the negligence of the District or Customers; or (4) any default by Fern Bluff under any agreement, contract, or understanding pertaining to the operation, maintenance, repair, or replacement of the Facilities. In case any action or proceeding may be brought against the District or Customers for any matter for which the District or Customers are indemnified under this Section 2.03 of this Agreement, Fern Bluff shall assume in full and direct the defense of the action or proceeding at Fern Bluff's expense, and subsequently, Fern Bluff shall not be liable to the District or Customers for any legal or other expenses, other than reasonable costs subsequently incurred by the District or Customers in connection with the defense of the action or proceeding at the request of Fern Bluff. The District and Customers shall have the right to employ separate counsel in 3- 886.17 - 13 (10 -8 -86) any action and participate in the defense of the action or proceeding, but the fees and expenses of the District's or Customers' counsel shall be at the expense of the District or Customers unless: (1) the employment of separate counsel has been approved by Fern Bluff; or (2) the District or Customers have been advised by counsel that there may be one or more defenses available to the District or Customers, which are different from or additional to the defenses available to Fern Bluff. Fern Bluff shall not be liable for any settlement by the District or Customers of any claim, action, or proceeding effected without Fern Bluff's consent. It is specifically understood and agreed by all parties that no action shall lie against any individual Fern Bluff director by any party to this Agreement. Section 2.04. INSURANCE. Prior to operation of the Facilities by Fern Bluff, Fern Bluff shall provide to District proof of comprehensive general liability insurance in an amount not less than $300,000.00 per year in the aggregate. ARTICLE III. PURCHASE OF FACILITIES Section 3.01. PURCHASE OF DISTRICT FACILITIES. Subject to the conditions specified in this Section 3.01, Milburn shall sell the District Facilities to District and the District shall purchase the District Facilities from Milburn upon the occurrence of the following conditions: (a) REQUIRED APPROVALS. Milburn obtains the District's approval of the plans and specifications and contract documents, award of construction contracts, change orders, requests for partial and final payments to contractors, and completion of construction of the District Facilities, which approvals shall not be unreasonably withheld by District. (b) DISTRICT FUNDING. The District proceeds to implement funding of Phase IA and IB of the Regional System and all funds therefor have been received by the District pursuant to the terms and conditions of Section 6.01b of the Contract. 3- 886.17 - 14 (10 -8 -86) (c) CONDITION OF FACILITIES. The District Facilities are in as good a condition as when Milburn completed construction of the District Facilities, assuming the District Facilities are constructed according to plans and specifications and change orders approved by the District, excepting only such normal wear and deterioration as shall reasonably be expected from Fern Bluff's prudent operation of the District Facilities. (d) CONDEMNATION AWARDS. In the event that Milburn and /or Fern Bluff have found it necessary to acquire any land or easement rights by condemnation and such condemnation procedure has not been legally concluded and finally determined, Milburn shall at closing, provide a letter of agreement, the form of which shall be approved by the District's General Counsel, stating that in the event a final and nonappealable judgment for the condemnee is made in an amount in excess of the amount placed with the Court registry, Milburn shall pay thirty percent (30 %) of such additional amount immediately on behalf of the District. Provided, however, District may, at its sole discretion, waive or excuse any of the conditions to the purchase and sale as provided by this Agreement. If at such time the Customers decide not to proceed with the District's System, the Facilities preconstructed or under construction by Milburn shall remain the property of Milburn, this Agreement shall terminate pursuant to Section 7.02 below. Milburn understands and acknowledges that its expenditures on the Facilities are made at its own risk and that in the event the District's System were not to become operational or the above conditions are not met, reimbursements from the District or from the Customers would not be made to Milburn. Section 3.02. PURCHASE PRICE OF DISTRICT FACILITIES. The purchase price of the District Facilities shall equal seventy percent (70 %) of the costs approved by District for constructing and installing the District Facilities, as follows: (a) ENGINEER. The expenses paid by Milburn for the engineering services performed in accordance with a contract for engineering services approved by the District for contract 3- 886.17 - 15 (10 -8 -86) documents approved by the District and for construction administration, construction staking, and resident project representation. The expenses paid by Milburn for preparation of additional drawings, plans and specifications. (b) CONSTRUCTION COSTS. The total amount of the construction contracts for District Facilities, as increased or reduced by any change orders approved by the District. (c) EASEMENTS. The cost of acquiring permits, licenses, easements, rights -of -way, and land required for the construction, operation, maintenance, repair, replacement and removal of the District Facilities; provided the cost of the easements, rights -of -way or land shall not exceed the fair market value of the easements, rights -of -way or land, plus damages, if any, to the remaining portion of the person's property that is not acquired. The fair market value and amount of damages shall be equal to the lesser of either (1) the amount paid by Milburn or (2) the amount determined by RMS Diversified, doing business as Trans -Texas Land Services, or other appraiser approved by the District, or by the District. The cost of acquiring the easement, right -of -way or land, whether by negotiated donation or purchase or by eminent domain, the costs of obtaining title research, title insurance or legal opinion as to title, and the costs of preparing and recording the documents of title, shall not exceed the cost per parcel that District is obligated to pay Trans -Texas Land Services, as provided by Article XIII of the contract between District and RMS Diversified unless the District approves the amount of the expense prior to the time Milburn incurs the expense. (d) OTHER CONSTRUCTION COSTS. The costs of advertising for bids for construction contracts, materials testing, construction inspection, cost of approvals, permits and certificates from governmental entities, surveying and any other costs agreed to by the District. The purchase price shall specifically not include the following: 3- 886.17 - 16 (10 -8 -86) 1. NEGOTIATIONS. The costs of negotiating and preparing this Agreement. It is specifically understood and agreed by the parties to this Agreement that all costs, including legal fees, of negotiating and preparing this Agreement shall be borne solely by the party incurring such costs. 2. INTEREST. Interest expense incurred or paid by Milburn on the construction costs paid by Milburn or loss of interest or investment earnings on the construction costs paid by Milburn. 3. MANAGEMENT. Administrative, management, or clerical expense paid or incurred by Milburn relating to the construction of the District Facilities. 4. AUDIT. The cost to have the purchase price verified, calculated and certified by a certified public account acceptable to the District which verification, calculation and certification shall be required as a condition under Section 3.03 below. 5. REVIEW OF CONVEYANCE DOCUMENTS. Milburn shall pay the District's expense of preparing, reviewing, and recording documents of title, which expense shall be deducted from the purchase price at closing. Section 3.03. CLOSING DATE. The date for closing of purchase and sale shall be as determined by District in accordance with the conditions of Section 3.01, but the date of closing shall not be more than five days after the occurrence of: (1) the District's receipt of construction funding pursuant to Section 3.01(b) above from the Customers, whether one or more, for the purchase of the District Facilities; (2) the District's Board of Directors award the contract for construction of the Onion Creek Interceptor, Phase 2, (Contract No. 5); and (3) the completion of an audit of the purchase price. Section 3.04. CONVEYANCE. Upon payment of the purchase price by District, Milburn shall convey the District Facilities to District, together with all rights to any existing insurance, construction bonds, guarantees and other matters. The conveyance shall be evidenced by a warranty deed or an assignment of 3- 886.17 - 17 (10 -8 -86) easements and a bill of sale, whichever is legally appropriate. The conveyance shall be free and clear of all liens and encumbrances. In the event District and Milburn are unable to agree upon the amount of the purchase price of the District Facilities, the District may deposit the amount equal to the difference between the disputed amounts claimed to be correct by each party into an interest bearing escrow account and upon the deposit, District and Milburn may close the transaction, provided Milburn and District reserve their respective rights to recover the disputed amount. Section 3.05. ASSUMPTION OF CONTRACTS. In the event Milburn has failed to complete the construction within the construction periods set forth in the construction contracts with all allowed time delays included, the District may purchase District Facilities prior to completion of construction, by assuming Milburn's rights and obligations under the contracts for construction of the District's Facilities and contract for engineering services, and payment to Milburn of the costs paid by Milburn for constructing the District Facilities as provided by Section 3.02 of this Agreement. The date of closing shall be not more than ten or less than five days after the District elects to assume the contracts for construction of the District Facilities. Section 3.06. USE OF DISTRICT FACILITIES BY CUSTOMERS WITHOUT REGIONAL SYSTEM. In the event the District elects not to proceed to construct or acquire Phase lA and 1B of the District's System, as provided by Section 6.01(b) of the Wastewater Disposal Contract, any Customer may elect within thirty (30) days of written notice from the District to the Customers that the District will not proceed to construct Phase lA and 1B of the District's System to purchase a share of the District Facilities from Milburn. Should some or all of the Customers elect to purchase a share, each Customer so electing shall be required and hereby agrees to pay their pro -rata share for the District Facilities as follows: (a) Should MUD 2, MUD 3 or Round Rock elect to purchase, that party so electing shall pay its pro -rata share of 3- 886.17 - 18 (10 -8 -86) all costs of the District Facilities, including accrued interest, from the date the initial expense was incurred. (b) Should Austin, which shall be providing service to Fern Bluff and Milburn's property, elect to purchase, it shall pay its pro -rata share of the Purchase Price, as defined in Section 3.02, of the District Facilities. Such payment by the purchasing party shall be in cash within ten (10) business days after such Customer elects to purchase a share of the District Facilities. Their pro -rata share shall be equal to their percentage of use of the available capacity of the District Facilities. Provided, however, it is specifically understood and agreed by the Customers that Milburn and Fern Bluff shall at all times have a guaranteed minimum capacity of 1500 LUEs in the District Facilities. It is further understood and agreed that all capacity within the Milburn Force Main financed by Milburn shall be reserved for the sole use of Milburn and Fern Bluff except as set forth in this paragraph. Milburn and Fern Bluff specifically agree that Austin shall have a reservation of 150 LUEs of capacity in the Milburn Force Main and Round Rock shall have a reservation of 150 LUEs of capacity in the Milburn Force Main. Neither Milburn nor Fern Bluff shall have any obligation to secure or otherwise provide wastewater treatment capacity or any additional improvements necessary for such Customer to utilize the District Facilities. Section 3.07. USE OF FACILITIES PRIOR TO PURCHASE. It is specifically understood and agreed by the parties that: (a) No parties other than Milburn and Fern Bluff except Austin and Round Rock as set forth in Section 3.06 above shall have the right to use the Facilities prior to the conveyance of the Facilities to the District which right to use shall be contingent upon execution of an agreement for interim wastewater treatment between the District, Round Rock, and the other Customers. (b) Any wastewater which may be discharged from the Facilities shall pass into the ownership and control of Austin and Round Rock at the point where the Onion Creek Interceptor, 3- 886.17 - 19 (10 -8 -86) Phase I enters Round Rock's existing Onion Creek Interceptor, at which point such wastewater shall pass immediately thereafter into the ownership and control of the District for discharge into Round Rock's system in accordance with the Interim Wastewater Disposal Contract between the District, the Customers and Round Rock. ARTICLE IV. ALLOCATION OF CAPACITY Section 4.01. Guaranteed reservations of capacity in the Facilities by the Customers shall be set forth in the Interim Waste Treatment Agreement between the District, Round Rock and the other Customers and shall be subject to the execution of such agreement between Round Rock, the District and the other Customers for sufficient wastewater treatment capacity and shall not be effective until such time as that agreement is in effect. ARTICLE V. DEFAULT, NOTICE, AND REMEDIES Section 5.01. FORCE MAJEURE. In case by reason of "Force Majeure" either party shall be rendered unable wholly or in part to carry out its obligations under this Agreement, then if the party shall give notice and full particulars of the "Force Majeure" in writing to the other parties within a reasonable time after occurrence of the event or cause relied on, the obligation of the party giving such notice, so far as it is affected by such Force Majeure, if appropriate, shall be suspended during the continuance of the inability then claimed, but for no longer period, and they shall incur no liability by reason of the party's failure to perform in whole or in part, and the party shall endeavor to remove or overcome such inability with all reasonable dispatch. The term "Force Majeure" as employed herein, shall mean acts of God, strikes, lockouts, or other industrial disturbances, acts of public enemy, orders of any kind of the United States or the State of Texas, or any civil or military authority, insurrections, riots, epidemics, landslides, lightning, earthquakes, fires, hurricanes, storms, floods, washouts, droughts, arrests, restrain of government and people, 3- 886.17 - 20 (10 -8 -86) civil disturbances, explosions, breakage or accidents to machinery, pipelines or canals, or of any other causes not reasonably within the control of the party claiming such inability. It is understood and agreed that the settlement of strikes and lockouts shall be entirely within the discretion of the party having the difficulty and that the above requirement that any Force Majeure shall be remedied with all reasonable dispatch shall not require the settlement of strikes and lockouts by acceding to the demands of the opposing party or parties when such settlement is unfavorable in the judgment of the party having the difficulty. Section 5.02. REMEDIES UPON DEFAULT. The parties to this Agreement do not intend to specify, and this Agreement shall not be constructed as specifying, an exclusive remedy for any default, but all such other remedies, other than termination, existing at law or in equity may be availed of by any party to this Agreement and shall be cumulative. Section 5.03. NOTICES. Unless otherwise provided in this Agreement, any notice, communication, request, reply, or advice (severally and collectively called "Notice ") required or permitted to be given as provided by this Agreement shall be in writing and will be deemed to be delivered and received either: (1) when deposited in the United States Mail, postage prepaid, certified or registered, with return receipt requested, properly addressed to the party to be notified; or (2) when delivered to a courier service for delivery, delivery charges prepaid, properly addressed to the party to be notified. Notice given in any other manner shall be effective only if and when received by the party to be notified. For the purposes of notice, the addresses of the parties to this Agreement shall be as shown above the signatures of each party to this Agreement, until changed as subsequently provided. The parties to this Agreement shall have the right from time to time and at any time to change their respective addresses and each shall have the right to specify as its address any other address by at least fifteen (15) days notice to the other parties to this Agreement. 3- 886.17 - 21 (10 -8 -86) Section 5.04. NOTICE OF DEFAULT. If any party to this Agreement believes that another party has defaulted in performance under this Agreement, then within ten days after the discovery of the alleged default, the complaining party shall give written notice to the alleged defaulting party and the other parties, which notice shall specify in detail the nature of the alleged default and the action proposed by the complaining party to remedy the alleged violation. If the alleged defaulting party does not cure the default or otherwise resolve the alleged default within thirty days after receipt of the default notice, then the complaining party shall have recourse to the available remedies, as specified in this Agreement or as provided by applicable law. Except as expressly provided by Section 5.5 of this Agreement, the failure by a party to immediately discover a default and give notice to the defaulting party of an alleged default shall not constitute a waiver by a party of the alleged default should the alleged default be proven from its inception. Section 5.05. WAIVER. Any right or remedy or any default under this Agreement shall be deemed to be conclusively waived unless asserted by a proper proceeding at law or in equity within two (2) years plus one (1) day after the occurrence of the default or alleged default. Notice of default and opportunity for cure of the default as provided by Section 5.4 of this Agreement shall be a prerequisite to any proceeding at law or in equity, unless the default is discovered less than twenty (20) months after the default occurred or unless the default harms or threatens to damage the property or facilities belonging to the party alleging the default or the default harms or threatens to harm the health, safety, and welfare of the general public and the harm or threatened harm will occur before notice of the default and opportunity to cure the default can be given. No waiver or waivers of any breach or default (or any breaches or defaults) by any party to this Agreement of any term, covenant, condition, or liability under this Agreement or of the performance by the other party to this Agreement of any duty or obligation under this Agreement, shall be deemed or construed to 3- 886.17 - 22 (10 -8 -86) be a waiver in the future of subsequent breaches or defaults of any kind, character, or description, under any circumstances. Section 5.06. VENUE. All amounts due under this Agreement, including, but not limited to, payments due under this Agreement or damages for the breach of this Agreement, shall be paid and be due in Williamson County, Texas, which is the county in which Round Rock is located. The parties to this Agreement expressly agree that Williamson County, Texas, is the place of performance of this Agreement and in the event that any legal proceeding is brought to enforce this Agreement or any provision of the Agreement, the legal proceeding shall be brought in Williamson County, Texas. Section 5.07. APPLICABLE LAW. This Agreement shall be construed under the laws of the State of Texas. ARTICLE VI. INTERPRETATION AND CONSTRUCTION Section 6.01. INTERPRETATION. Unless the context requires otherwise, words of the masculine gender shall be construed to include correlative words of feminine and neuter genders and vice -versa and words of the singular number shall be construed to include correlative words of the plural number and vice - versa. Reference to any party to this Agreement means that party and the successors and assigns of that party. The parties agree that this Agreement or any provision of this Agreement shall not be construed in favor of or against any Party on the basis that the Party did or did not author this Agreement or provision. This Agreement and all the terms and provisions shall be liberally construed to effectuate the purposes set forth herein and to sustain the validity of this Agreement. Nothing in this Agreement shall be construed to permit a violation of any federal or state statutory provision or any provision of the federal or state constitutions, and all acts done pursuant to this Agreement shall be performed in such manner as to conform thereto, whether expressly provided or not. Where any procedure hereunder may be held by a court of competent jurisdiction to be violative of any federal or state statutory or constitutional provision, the 3- 886.17 - 23 (10 -8 -86) parties to this Agreement shall have the power by resolution to adopt and promulgate reasonable and necessary alternative procedures which will conform thereto and the Parties agree that they would have entered into this Agreement notwithstanding the invalidity of any provision or provisions hereof. Section 6.02. REGULATORY AUTHORITY. This Agreement shall be subject to all valid rules, regulations, laws, permits, orders, and ordinances applicable hereto passed or promulgated by the United States of America, the State of Texas or any governmental body or agency having lawful jurisdiction or any authorized representative or agency of any of them. Section 6.03. CURRENT REGULATIONS. In each instance in this Agreement where reference is made to a federal, state, or local law or regulation, the parties to this Agreement intend that, at any given time, the then- current edition of any such federal, state or local law or regulation shall apply. Section 6.04. MODIFICATION. This Agreement shall be subject to change or modification only with the mutual consent of the parties to this Agreement. Section 6.05. ASSIGNMENT. This Agreement shall not be assignable in whole or in part by any party without the prior written consent of the other party or parties to this Agreement. Section 6.06. SEVERABILITY. The provisions of this Agreement are severable, and if any provision or part of this Agreement or the application thereof to any person or circumstance shall ever be held by any court of competent jurisdiction to be invalid or unconstitutional for any reason, the remainder of this Agreement and the application of such provision or part of this Agreement to other persons or circumstances shall not be affected thereby. Section 6.07. MERGER. Except as otherwise provided by this Agreement, this Agreement constitutes the entire agreement between the parties relative to the construction and use of the Facilities. There have been and are not agreements, covenants, representations or warranties between the parties other than those expressly stated herein or expressly provided for herein. 3- 886.17 - 24 (10 -8 -86) Section 6.08. APPROVAL OR CONSENT. Whenever this Agreement requires or permits approval or consent to be hereafter given by any party, the parties agree that such approval or consent shall not be unreasonably withheld. Such approval or consent may be evidenced by an order or resolution adopted by the governing body of the respective parties or by an appropriate certificate executed by a person, firm or entity authorized to determine and give approval or consent on behalf of the respective parties pursuant to an order or resolution adopted by the governing body or board of directors thereof. Such approval or consent shall be effective without regard to whether given before or after the time required herein and no approval or consent of the parties shall be required as a condition of any action except as expressly required in this Agreement. Section 6.09. PARTIES IN INTEREST. Except as expressly provided otherwise by this Agreement, this Agreement shall be for the sole and exclusive benefit of the parties hereto and shall not be construed to confer any rights upon any third party. Nothing herein shall be construed to confer standing to sue upon any third party who did not otherwise have such standing. Section 6.10. CAPTIONS. The captions appearing at the first of each numbered section or paragraph in this Agreement are inserted and included solely for convenience and shall never be considered or given any effect in construing this Agreement, or any provisions hereof, or in connection with the duties, obligations, or liabilities of the respective parties hereto or in ascertaining intent, if any questions of intent should arise. Section 6.11. TIME OF THE ESSENCE. Time shall be of the essence of this Agreement. Section 6.12. NO PARTNERSHIP. The parties to this Agreement do not intend that this Agreement establishes, nor shall this Agreement be construed to as in any way establishing a partnership or joint venture, express or implied agency, or employer - employee relationship between the parties to this Agreement. 3- 886.17 - 25 (10 -8 -86) Section 6.13. COUNTERPARTS. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original and all of which shall together constitute one and the same instrument. The terms of this Agreement shall become binding upon each party from and after the time it has been executed by all parties and an interim wastewater disposal agreement with Round Rock has been entered into and executed by the District and the Customers. ARTICLE VII. EFFECTIVE DATE AND TERM OF AGREEMENT Section 7.01. EFFECTIVE DATE. This Agreement shall become effective as of date shown above. Section 7.02. TERM. This Agreement shall continue in force and effect from the effective date of this Agreement for a period of five (5) years, unless terminated earlier by (1) the mutual written agreement of the parties to this Agreement; (2) pursuant to Section 1.02 above; (3) the District's purchase of the District Facilities from Milburn; or (4) the elapse of forty -one (41) days after the District gives written notice to the Customers that the District does not intend to proceed to construct the Phase 1A and Phase 1B of the District's System. IN WITNESS WHEREOF, the parties to this Agreement acting under the authority of their respective governing bodies have caused this Agreement to be duly executed. ATTEST: Roscoe Conoley Secretary Dan Mize President 3- 886.17 - 26 (10 -8 -86) BRUSHY CREEK WATER CONTROL AND IMPROVEMENT DISTRICT NO. 1 OF WILLIAMSON AND MILAM COUNTIES P.O. Box 882 Taylor, Texas 76574 Executed , 1986 r ATTEST: James E. Aldridge Jorge Carrasco City Clerk City Manager ATTEST: Joanne Land Mike Robinson City Secretary Mayor ATTEST: Al Paricio Wayne Wood Secretary President ATTEST: CITY OF AUSTIN P.O. Box 1088 Austin, Texas 78767 Executed , 1986 CITY OF ROUND ROCK 214 E. Main Round Rock, Texas 78664 Executed , 1986 WILLIAMSON COUNTY MUNICIPAL UTILITY DISTRICT NO. 2 3737 Hairy Man Road Round Rock, Texas 78681 Executed , 1986 WILLIAMSON COUNTY MUNICIPAL UTILITY DISTRICT NO. 3 408 Ridgewood Road Cedar Park, Texas 78613 Danny Malone James H. Parkhurst Secretary President 3- 886.17 - 27 (10 -8 -86) Executed , 1986 BILL MILBURN, INC., a Texas corporation P.O. Box 9802 -682 Austin, Texas 78766 Bill Milburn President Executed , 1986 ATTEST: Secretary President 3- 886.17 3- 886.17 - 28 (10 -8 -86) FERN BLUFF MUNICIPAL UTILITY DISTRICT 2600 One American Center Austin, Texas 78701 Dene M. Jacobson Thomas J. Sandridge Executed , 1986 RESOLUTION NO. /OZ�R__ WHEREAS, The City of Round Rock has heretofore entered inl.0 a wastewater disposal contract. dated 12/16/85 providing fn. tt�e construction and operation of a regional wastewater system: ,:,nc; WHEREAS; the parties recognized that there would be a need For interim wastewater transportation and treatment:; services from The City of Round Rock, and WHEREAS, the parties have prepared an interim wastewater disposal contract that is being recommended to all the ooverni!:-rl bodies of the parties, and WHEREAS, in order to benefit from the interim wastewater transportation and treatment contract certain facilities must: ne construed or purchased, and WHEREAS, the parties have prepared an agreement for the construction and purchase of those facilities which by its term�:: provides for the eventual ownership of a portion of rho se facilities by the City of Round Rock, said agreement being recommended to a 1 1 the governing bodies of the parties, N )W THEREFORE RE IT RESOLVED BY THE COUNCIL OF THE CITY OF ROTUND ROC TEXAS That The Mayor is hereby authorized and directed to execu..e on behalf of The City of Round Rock the Agreement Recer Construction, Ownership, purchase And Use Of Specific Wastew_at.er Transportation Facilities, a copy of said agreement being attached hereto and incorporated herein for all purposes. RESOLVED this 9th day of October, 1986. ATTEST: DLW /jmb 9/7/86 Multimatte program Resolution Disk Titled: Onioncrk JC//tNNE LAND, City Secretary 7a� MIKE ROBINSON, Mayor City of Round Rock, Texas AGREEMENT REGARDING CONSTRUCTION, OWNERSHIP, PURCHASE, AND USE OF SPECIFIC WASTEWATER TRANSPORTATION FACILITIES DRAFT 10-3.8cv THE STATE OF TEXAS COUNTY OF WILLIAMSON This agreement ( "Agreement ") regarding the construction, ownership, purchase, and use of certain wastewater transportation improvements is made and entered into as of the day of October, 1986, by and between the following: BRUSHY CREEK WATER CONTROL AND IMPROVEMENT DISTRICT NO. 1 OF WILLIAMSON AND MILAM COUNTIES ( "District "), a political subdivision of the State of Texas organized as a conservation and reclamation district under authority of Article 16, Section 59 of the Texas Constitution, CITY OF AUSTIN ( "Austin "), a municipal corporation organized under authority of Article 11, Section 5 of the Texas Constitution, CITY OF ROUND ROCK ( "Round Rock "), a municipal corporation organized under authority of Article 11, Section 5 of the Texas Constitution, WILLIAMSON COUNTY MUNICIPAL UTILITY DISTRICT NO. 2 ( "MUD 2 "), a political subdivision of the State of Texas, organized under authority of Article 16, Section 59 of the Texas Constitution, WILLIAMSON COUNTY MUNICIPAL UTILITY DISTRICT NO. 3 ( "MUD 3 "), a political subdivision of the State of Texas, organized under authority of Article 16, Section 59 of the Texas Constitution, FERN BLUFF MUNICIPAL UTILITY DISTRICT ( "Fern Bluff "), a political subdivision of the State of Texas, organized under authority of Article 16, Section 59 of the Texas Constitution, and BILL MILBURN, INC. ( "Milburn "), a Texas corporation. RECITALS 1. The District previously signed an agreement with Austin, Round Rock, MUD 2 and MUD 3, which agreement is captioned "Wastewater Disposal Contract" and dated December 16, 1985. In this Agreement, Austin, Round Rock, MUD 2 and MUD 3 are collectively referred to as the "Customers." The Wastewater Disposal Contract provides for the construction and operation by the District of a regionalized wastewater transportation and treatment system owned by the Customers which system would serve the western portion of the Brushy Creek watershed in Williamson County, Texas. In this Agreement, the wastewater transportation and treatment system is referred to as the "District's System." 2. The District's System is described in the Wastewater Disposal Contract by reference to an engineering report, which report may be modified from time to time. Integral parts of Phases lA and 1B of the District's System are the Onion Creek Pumpover and Onion Creek Interceptor, Phase 1 and 2, all projects being subsequently described in Section 1.01 of this Agreement. The District proposes to use the Onion Creek Pumpover and the Onion Creek Interceptor to transport wastewater from the Brushy Creek watershed west of Round Rock to Round Rock's wastewater collection system in the Onion Creek watershed on an interim basis until the District can complete construction of the District's treatment facilities and the facilities which are proposed to transport the wastewater from the Brushy Creek watershed through Round Rock's corporate limits to the District's treatment facilities. 3. Milburn proposes to immediately construct the initial phase of the District's proposed Onion Creek Pumpover, Phase 1 of the District's Onion Creek Interceptor, and a 12 -inch force main, in an effort to receive wastewater transportation and treatment service for Milburn's property located within the boundaries of Fern Bluff by December 15, 1986. Milburn also proposes to convey the initial phases of the Onion Creek Pumpover and District's Onion Creek Interceptor, Phase 1 constructed by Milburn to the District, if and when the District pays Milburn a portion of the costs paid by Milburn for constructing the portions of the Onion Creek Pumpover and District's Onion Creek Interceptor, Phase 1. 3- 886.17 - 2 (10 -3 -86) 4. Fern Bluff is located within Austin's extraterritorial jurisdiction, so Fern Bluff is eligible to receive wastewater collection, treatment, and disposal service through Austin's participation in the District's System. 5. The general location of the Onion Creek Pumpover, District's Onion Creek Interceptor, 12 -inch force main, and point of connection to Round Rock's existing Onion Creek interceptor is shown on the vicinity map attached to this Agreement as Exhibit "A," attached hereto and incorporated herein for all purposes. AGREEMENT For and in consideration of the mutual promises, covenants, obligations, and benefits of this Agreement, the District, Customers, Fern Bluff, and Milburn contract and agree as follows: ARTICLE I. CONSTRUCTION OF FACILITIES Section 1.01. DESCRIPTION OF FACILITIES. As used in this Agreement, the terms and phrases beginning with capitalized letters listed below shall be defined as follows, unless the context clearly indicates to the contrary: (a) FACILITIES. The term "Facilities" shall mean both the "District Facilities" and "Milburn Force Main." (b) MILBURN FORCE MAIN. The phrase "Milburn Force Main" shall mean the 12 -inch force main approximately 5808 feet in length which begins at the Onion Creek Force Main, parallels Farm to Market Road 3406, and terminates at the Onion Creek Interceptor, Phase 1. (c) DISTRICT FACILITIES. The phrase "District Facilities" shall mean the "Onion Creek Lift Station," "Onion Creek Force Main," and "Onion Creek Interceptor, Phase 1." (d) ONION CREEK PUMPOVER. The phrase "Onion Creek Pumpover" shall mean the "Onion Creek Lift Station," "Onion Creek Force Main" and "Onion Creek Interceptor, Phase 1." (e) ONION CREEK LIFT STATION. The phrase "Onion Creek Lift Station" shall mean the project consisting of a lift station and related appurtenances described in the drawings and plans and specifications for District Contract No. 4, which drawings and 3- 886.17 - 3 (10 -3 -86) plans and specifications are incorporated into this Agreement by reference as if attached to this Agreement as an exhibit, together with fee simple title to the site; an all- weather road located within an access easement from a paved road dedicated to the public as of the effective date of this Agreement to the site; permits, licenses, easements, rights -of -way, and land required for the construction, operation, maintenance, repair, replacement and expansion of the lift station; and all other related appurtenances. The Onion Creek Lift Station shall consist, by way of example and not by limitation, of the following: a wet -well with a capacity of 5000 Living Unit Equivalents (as "LUEs" are defined in the Wastewater Disposal Contract) and an initial pumping capacity of 1650 LUEs. (f) ONION CREEK FORCE MAIN. The phrase "Onion Creek Force Main" shall mean the project consisting of a 16 -inch force main approximately 3055 feet in length, as more specifically described in the drawings and plans and specifications for District Contract No. 5, which drawings and plans and specifications are incorporated into this Agreement by reference as if attached to this Agreement as an exhibit; together with all permits, licenses, easements, rights -of -way, and land required for the construction, operation, maintenance, repair and replacement of the force main; and all other related appurtenances. The Onion Creek Force Main begins at the Onion Creek Lift Station, generally parallels the eastern boundary of the Tonkawa Springs subdivision, and terminates at the Milburn Force Main. (g) ONION CREEK INTERCEPTOR, PHASE 1. The phrase "Onion Creek Interceptor, Phase 1" shall mean the project consisting of a 24 -inch interceptor approximately 1179 feet in length, as shown on the drawing and plans and specifications for District Contract No. 5, which drawings and plans and specifications are incorporated into this Agreement by reference as if attached to this Agreement as an exhibit; together with all permits, licenses, easements, rights -of -way, and land required for the construction, operation, maintenance, repair and replacement of the interceptor; and all other related appurtenances. The Onion 3- 886.17 - 4 (10 -3 -86) Creek Interceptor Phase One shall begin at the Milburn Force Main near Farm to Market Road 3406 and terminate at Round Rock's existing wastewater interceptor for the Onion Creek watershed. (h) ONION CREEK INTERCEPTOR, PHASE 2. The phrase "Onion Creek Interceptor, Phase 2" shall mean the project consisting of a 24 -inch interceptor approximately 7920 feet in length, as more specifically described on the drawings and plans and specifications for District Contract No. 5. The Onion Creek Interceptor, Phase 2 begins at the Onion Creek Force Main and terminates at the beginning of the Onion Creek Interceptor, Phase 1. Section 1.02. AUTHORIZATION TO CONSTRUCT FACILITIES. By execution of this Agreement, District, Customers, and Fern Bluff - authorize Milburn to construct the Facilities. The District, Customers and Fern Bluff may terminate their respective authorizations to construct the Facilities in the event Milburn defaults in the performance of this Agreement and after notice of default and opportunity for cure as provided by Section 5.04 of this Agreement, if Milburn does not cure the default during the time allowed for cure of default under Section 5.04 of this Agreement, or if Milburn does not commence construction (as determined by the issuance of notice to the contractor to proceed with construction) of the District Facilities within one hundred twenty (120) days after the date all parties have executed this Agreement. Milburn agrees to proceed with due diligence to construct the District Facilities. Section 1.03. CONSTRUCTION COSTS. All equipment, materials, and supplies required in connection with the construction of the Facilities shall be acquired in the name of Milburn. Milburn shall require the construction contractor or contractors to construct the Facilities in a good and workmanlike manner and to meet the requirements of all federal, state and local regulatory authorities and to represent that the materials used in construction of the Facilities shall be free from defects and fit for their intended purpose. Milburn shall promptly pay when due all costs of constructing or installing the Facilities, 3- 886.17 - 5 (10 -3 -86) including the following by way of example and not by limitation: all engineering, surveying, materials, labor, construction, fiscal, legal, administrative, advertising, auditing of project costs, conveyance of Facilities to District, and material testing and construction inspection arising in connection with the construction of the Facilities; all costs incurred in connection with obtaining governmental approvals, certificates, or permits, required as a part of the Facilities; all insurance premiums required of Owner in construction contracts, ad valorem taxes, and any miscellaneous costs by Milburn attributable to the construction of the Facilities; and all out -of- pocket expenses incurred by Milburn in connection with the construction of the Facilities. District, Customers, and Fern Bluff shall not be liable to any contractor, engineer, attorney, materialman, or other party employed or contracted with by Milburn in connection with the construction of the Facilities. Section 1.04. SUPERVISION BY DISTRICT. Milburn shall comply with the following conditions: (a) STATUS REPORTS. Milburn shall make monthly written status reports to District regarding the construction of the Facilities and the costs incurred by Milburn relating to the construction of the Facilities. (b) ENGINEER. Milburn shall employ W.C. Engineers, Inc. who shall (1) perform or supervise construction administration by supervising and controlling the day -to -day activities of the construction of the Facilities, and pursue the timely completion of the Facilities subject to the weather, the availability of adequate labor, machinery and materials, and other factors beyond the control of Milburn; and (2) perform or supervise construction staking and resident project representation during construction of the Facilities. Milburn shall have the right at any time to terminate the services of the engineer and to engage the services of other engineers provided, however, prior to employment of the other engineers, Milburn shall submit the name of the engineer and the contract for engineering services relating to the 3- 886.17 - 6 (10 -3 -86) Facilities to the District for the District's review and approval or disapproval. (c) PLANS AND SPECIFICATIONS AND CONTRACT DOCUMENTS. Milburn shall obtain the District's and Fern Bluff's approval of the plans and specifications and contract documents for the Facilities. Milburn shall construct the District Facilities in substantial conformance with the drawings, plans and specifications, and contract documents approved by the District. District makes no express warranties and disclaims all implied warranties, if any, with respect to the drawings, plans and specifications, and contract documents. In the event the District does not purchase the District Facilities from Milburn as provided by Article III of this Agreement, Milburn shall not be required to pay District the District's actual cost of preparing the drawings, plans and specifications, and contract documents for the District Facilities. (d) ADVERTISEMENT OF CONSTRUCTION. CONTRACT. Milburn represents to District, Customers, and Fern Bluff that Milburn has advertised, or shall advertise, the request for bids for the construction of the Facilities. Milburn further represents to the District, Customers, and Fern Bluff that Milburn has advertised or will advertise the request for bids for the construction of the Facilities in the manner required by law to be followed for advertising the request for bids on construction contracts by municipal utility districts and by water control and improvement districts and as required by the rules of the Texas Water Commission. (e) AWARD OF CONSTRUCTION CONTRACT. Milburn shall review and approve or reject bids for the construction of the Facilities, provided Milburn shall approve or reject bids in the manner required by law to be followed by municipal utility districts and by water control and improvement districts and as required by the rules of the Texas Water Commission. Milburn represents to District, Customers, and Fern Bluff that Milburn has submitted or will submit to the District and Fern Bluff all bids received by Milburn for the contracts for construction of 3- 886.17 - 7 (10 -3 -86) the Facilities; shall advise the District and Fern Bluff regarding the amount of the bids and the experience and competency of the bidders; and shall make - recommendations to the District and Fern Bluff concerning the award of the contracts for construction of the Facilities. Milburn shall obtain the District and Fern Bluff's approval of the award of all the contracts for construction of the Facilities and shall file with the Texas Water Commission all construction drawings, plans and specifications, contract documents, and supporting engineering data for the construction and installation of the Facilities, together with evidence that the materials had been filed with and approved by both the District and Fern Bluff. (f) CHANGE ORDERS. Milburn shall review and approve or reject all changes to the plans and specifications and change orders to the contracts for construction of the Facilities. Prior to Milburn's approval of a change to the plans or specifications or a change order, Milburn shall submit the changed plans and specifications and change order, as approved by Milburn's engineer, together with an explanation of the need for the change in plans and specifications or change order, to the District's general manager for review and conditional approval. Milburn shall also submit the requested changes to Fern Bluff for approval. Consideration of approval of the change order or change to the plans and specifications by the Board of Directors shall be considered at the next board meetings of the District and Fern Bluff so long as such request for consideration is filed with the appropriate Board not less than ten (10) days prior to such Board meeting. Within sixty (60) days after approval of a change order by both District and Fern Bluff, Milburn shall file with the Texas Water Commission a copy of the change order, together with supporting engineering data and evidence that the change order was filed with and approved by the District and Fern Bluff. Either District or Fern Bluff may request a change in the plans and specifications and change order, but Milburn shall not be obligated to approve any change in the plans and specifications or change order requested by either Fern Bluff or 3- 886.17 - 8 (10 -3 -86) District if either: (1) ex e fo u o -s - -s t.at necessar to reasonabl intended b this A reement the change in the plans and specifications or change order increases the cost of construction of the Facilities and the request for change order is not accompanied by a financial guarantee acceptable to Milburn in the amount of the cost increase;A (2) the change in the plans and specifications or change order increases the time schedule for completion of the Facility; or (3) the change in the plans and specifications or change order reduces the capacity allocated to Milburn or Fern Bluff. (g) PROGRESS AND FINAL PAYMENTS. Milburn shall review and approve or reject all requests for progress and final payments to the contractor or contractors. Within seven (7) days after receipt of an engineer's approval of a request for payment to the contractor, Milburn shall submit to District and Fern Bluff for review and approval such requests for progress and final payments. Within sixty (60) days of completion of the projects, Milburn shall file copies of all requests for progress and final payments with the Texas Water Commission. (h) ADDITIONAL CONSTRUCTION INSPECTION. If Milburn elects to construct the Facilities, Milburn authorizes District, Customers, and Fern Bluff additionally to inspect and test the materials and to observe the test procedures used in the construction of the Facilities; provided, however, that such additional inspection, testing, and observation shall be performed at the expense of the party who chooses to inspect, test, or observe materials or construction. The choice by District, Customers, or Fern Bluff not to inspect, observe, or test materials and procedures used during construction of the Facilities shall not be construed to be a waiver by District, Customers, or Fern Bluff of any defective material or construction. (i) TESTING. Milburn shall notify District and Round Rock at least twenty -four (24) hours in advance of any testing of materials or construction. If District does not observe a 3- 886.17 - 9 (10 -3 -86) testing because Milburn did not give District 24 -hour advance notice of the testing, then if District requests, Milburn shall repeat the testing or cause the testing to be repeated in the presence of District. The cost of the repeated testing shall not be included in the purchase price under Section 3.02 of this Agreement. (j) NON - COMPLIANCE. In the event District, Customers or Fern Bluff observes materials and procedures that do not comply with the drawings, plans and specifications, and general and special conditions approved by the District, District shall report its observations, or the observations by Customers or Fern Bluff, to Milburn within 24 hours of observing the alleged deficiency and Milburn shall correct or cause to be corrected the deficiency, if any. (k) FINAL PLANS. Within sixty (60) days after Milburn's engineer signs the certificate of substantial completion of construction of a completed phase of the Facilities and after the District's purchase of the Facilities, Milburn shall furnish District the following: (1) complete "as- built" plans, together with a certificate, signed and sealed by a registered professional engineer acceptable to the District, that the Facilities shown on the plans, were constructed as shown on the drawings and in accordance with the plans and specifications and change orders, if any, for the Facilities approved by District and also by Fern Bluff for Milburn Facilities; (2) any operations and maintenance manuals for the Onion Creek Lift Station provided by the manufacturer; and (3) a surety's performance bond which shall secure against non - performance or defects for a period starting with the completion of each project of the Facilities to at least six (6) months after the Contractor's one year warranty expires. Section 1.05. RECORDS AND REPORTS. Milburn shall maintain books of records and accounts in which full, true and proper entries are made pertaining to the construction, operation, maintenance and repair of the Facilities or Round Rock Facilities. The books and accounts will be available for 3- 886.17 - 10 (10 -3 -86) inspection and copying by the District, Customers, and Fern Bluff during normal business hours and under reasonable circumstances. Upon transfer of the District Facilities to the District, Milburn shall transfer such records and accounts to the District and Milburn shall have no further duty to maintain such records and accounts. Section 1.06. INDEMNITY BY MILBURN. Milburn shall indemnify the District, Customers, and Fern Bluff and hold the District, Customers, and Fern Bluff free and harmless from and against any and all liens, claims, debts, charges, damages, loss, penalties, and expenses, liquidated or unliquidated, executed or executory, oral or written, express or implied, actual or contingent, not expressly listed or described, but which may be asserted against the District, Customers, and Fern Bluff resulting from occurrences or omissions occurring prior to the time of closing specified in Section 3.03 of this Agreement and arising out of 1) any default under or in violation of any federal, state, or local statute, regulation, or order relating to the construction of the Facilities; (2) death or injury in connection with construction of the Facilities, or any portion of the Facilities; (3) any damage to property arising out of the construction of the Facilities; or (4) any default by Milburn under any agreement, contract or understanding pertaining to the construction of the Facilities, however caused, except for such injury, death, or property damage caused by the negligence of the District, Customers, or Fern Bluff. In case any action or proceeding may be brought against the District, Customers, or Fern Bluff for any matter for which the District, Customers or Fern Bluff are indemnified under this Section of this Agreement, Milburn shall assume in full and direct the defense of the action or proceeding at Milburn's expense, and subsequently, Milburn shall not be liable to District, Customers, or Fern Bluff for any legal or other expenses, other than reasonable costs subsequently incurred by the District, Customers, or Fern Bluff in connection with the defense of the action or proceeding at the request of Milburn. The District, Customers, and Fern Bluff shall have the 3- 886.17 - 11 (10 -3 -86) right to employ separate counsel in any action and participate in the defense of the action or proceeding, but the fees and expenses of the District's, Customers', or Fern Bluff's counsel shall be at the expense of the District, Customers, or Fern Bluff unless: (1) the employment of separate counsel has been approved by Milburn; or (2) the District, Customers, or Fern Bluff has been advised by counsel that there may be one or more defenses available to the District, Customers, or Fern Bluff which are different from or additional to the defenses available to Milburn. Milburn shall not be liable for any settlement by District, Customers or Fern Bluff of any claim, action or proceeding effected without Milburn's consent. Milburn, prior to construction of the Facilities shall provide proof of insurance for its activities in the construction of the Facilities, which insurance shall include an umbrella policy with a Limitation of Liability of no less than $2,000,000.00. Section 1.07. RISK OF LOSS. As between Milburn and the District, Milburn shall bear all risk of loss of or damage to the District Facilities, occurring prior to the time of closing specified in Section 3.3 of this Agreement. ARTICLE II. LEASE OF FACILITIES Section 2.01. LEASE. Subject to District's right to purchase the District Facilities as provided by Section 3.01, and Milburn's right to capacity within the Facilities as provided by Sections 3.06 and 4.01 of this Agreement, Milburn may lease the Facilities to Fern Bluff. Provided, however, such lease shall in no manner release Milburn from any duties or obligations hereunder to the District or Customers. Upon purchase of the Facilities by the District, such lease shall terminate. Section 2.02. ALTERATIONS. During the term of the lease as provided by Section 2.01 of this Agreement, Milburn and Fern Bluff shall make no alterations, improvements, or additions to the District Facilities, without the prior consent of District and Customers, however, the prior consent of District and Customers shall not be required when the alteration, improvement, 3- 886.17 - 12 (10 -3 -86) or addition is necessary to maintain service to the public or to avoid or mitigate damage to the District Facilities or other property. .1ch alterations, improvements or additions to the District Facilities shall not be reimbursed to Milburn pursuant to Sections 3.01 and 3.02 without the approval of the District. Section 2.03. INDEMNITY BY FERN BLUFF. Fern Bluff shall indemnify the District and Customers and hold the District and Customers free and harmless from and against any and all liens, claims, debts, charges, damages, loss, penalties, and expenses, liquidated or unliquidated, executed or executory, oral or written, express or implied, actual or contingent, not expressly listed or described, but which may be asserted against the District and Customers resulting from occurrences or omissions occurring prior to the time of closing specified in Section 3.03 of this Agreement and arising out of: (1) any default under or in violation of any federal, state or local statute, regulation, or order relating to the operation and maintenance of the Facilities; (2) death or injury in connection with operation, maintenance, repair, replacement or condition of the Facilities; (3) any damage to property arising out of the operation, maintenance, repair, replacement, or existence of the Facilities, however caused, except for such injury, death, or property damage caused by the negligence of the District or Customers; or (4) any default by Fern Bluff under any agreement, contract, or understanding pertaining to the operation, maintenance, repair, or replacement of the Facilities. In case any action or proceeding may be brought against the District or Customers for any matter for which the District or Customers are indemnified under this Section 2.03 of this Agreement, Fern Bluff shall assume in full and direct the defense of the action or proceeding at Fern Bluff's expense, and subsequently, Fern Bluff shall not be liable to the District or Customers for any legal or other expenses, other than reasonable costs subsequently incurred by the District or Customers in connection with the defense of the action or proceeding at the request of Fern Bluff. The District and Customers shall have the right to employ separate counsel in 3- 886.17 - 13 (10 -3 -86) any action and participate in the defense of the action or proceeding, but the fees and expenses of the District's or Customers' counsel shall be at the expense of the District or Customers unless: (1) the employment of separate counsel has been approved by Fern Bluff; or (2) the District or Customers have been advised by counsel that there may be one or more defenses available to the District or Customers, which are different from or additional to the defenses available to Fern Bluff. Fern Bluff shall not be liable for any settlement by the District or Customers of any claim, action, or proceeding effected without Fern Bluff's consent. It is specifically understood and agreed by all parties that no action shall lie against any individual Fern Bluff director by any party to this Agreement. Section 2.04. INSURANCE. Prior to operation of the Facilities by Fern Bluff, Fern Bluff shall provide to District proof of comprehensive general liability insurance in an amount not less than $300,000.00 per year in the aggregate. ARTICLE III. PURCHASE OF FACILITIES Section 3.01. PURCHASE OF DISTRICT FACILITIES. Subject to the conditions specified in this Section 3.01, Milburn shall sell the District Facilities to District and the District shall purchase the District Facilities from Milburn upon the occurrence of the following conditions: (a) REQUIRED APPROVALS. Milburn obtains the District's approval of the plans and specifications and contract documents, award of construction contracts, change orders, requests for partial and final payments to contractors, and completion of construction of the District Facilities, which approvals shall not be unreasonably withheld by District. (b) DISTRICT FUNDING. The District proceeds to implement funding of Phase IA and IB of the Regional System and all funds therefor have been received by the District pursuant to the terms and conditions of Section 6.01b of the Contract. 3- 886.17 - 14 (10 -3 -86) (c) CONDITION OF FACILITIES. The District Facilities are in as good a condition as when Milburn completed construction of the District Facilities, assuming the District Facilities are constructed according to plans and specifications and change orders approved by the District, excepting only such normal wear and deterioration as shall reasonably be expected from Fern Bluff's prudent operation of the District Facilities. (d) CONDEMNATION AWARDS. In the event that Milburn and /or Fern Bluff have found it necessary to acquire any land or easement rights by condemnation and such condemnation procedure has not been legally concluded and finally determined, Milburn shall at closing, provide a letter of agreement, the form of which shall be approved by the District's General Counsel, stating that in the event a final and nonappealable judgment for the condemnee is made in an amount in excess of the amount placed with the Court registry, Milburn shall pay thirty percent (30 %) of such additional amount immediately on behalf of the District. Provided, however, District may, at its sole discretion, waive or excuse any of the conditions to the purchase and sale as provided by this Agreement. If at such time the Customers decide not to proceed with the District's System, the Facilities preconstructed or under construction by Milburn shall remain the property of Milburn, this Agreement shall terminate pursuant to Section 7.02 below. Milburn understands and acknowledges that its expenditures on the Facilities are made at its own risk and that in the event the District's System were not to become operational or the above conditions are not met, reimbursements from the District or from the Customers would not be made to Milburn. Section 3.02. PURCHASE PRICE OF DISTRICT FACILITIES. The purchase price of the District Facilities shall equal seventy percent (70%) of the costs approved by District for constructing and installing the District Facilities, as follows: (a) ENGINEER. The expenses paid by Milburn for the engineering services performed in accordance with a contract for engineering services approved by the District for contract 3- 886.17 - 15 (10 -3 -86) documents approved by the District and for construction administration, construction staking, and resident project representation. The expenses paid by Milburn for preparation of additional drawings, plans and specifications. (b) CONSTRUCTION COSTS. The total amount of the construction contracts for District Facilities, as increased or reduced by any change orders approved by the District. (c) EASEMENTS. The cost of acquiring permits, licenses, easements, rights -of -way, and land required for the construction, operation, maintenance, repair, replacement and removal of the District Facilities; provided the cost of the easements, rights -of -way or land shall not exceed the fair market value of the easements, rights -of -way or land, plus damages, if any, to the remaining portion of the person's property that is not acquired. The fair market value and amount of damages shall be equal to the lesser of either (1) the amount paid by Milburn or (2) the amount determined by RMS Diversified, doing business as Trans -Texas Land Services, or other appraiser approved by the District, or by the District. The cost of acquiring the easement, right -of -way or land, whether by negotiated donation or purchase or by eminent domain, the costs of obtaining title research; title insurance or legal opinion as to title, and the costs of preparing and recording the documents of title, shall not exceed the cost per parcel that District is obligated to pay Trans -Texas Land Services, as provided by Article XIII of the contract between District and RMS Diversified unless the District approves the amount of the expense prior to the time Milburn incurs the expense. (d) OTHER CONSTRUCTION COSTS. The costs of advertising for bids for construction contracts, materials testing, construction inspection, cost of approvals, permits and certificates from governmental entities, surveying and any other costs agreed to by the District. The purchase price shall specifically not include the following: 3- 886.17 - 16 (10 -3 -86) 1. NEGOTIATIONS. The costs of negotiating and preparing this Agreement. It is specifically understood and agreed by the parties to this Agreement that all costs, including legal fees, of negotiating and preparing this Agreement shall be borne solely by the party incurring such costs. 2. INTEREST. Interest expense incurred or paid by Milburn on the construction costs paid by Milburn or loss of interest or investment earnings on the construction costs paid by Milburn. 3. MANAGEMENT. Administrative, management, or clerical expense paid or incurred by Milburn relating to the construction of the District Facilities. 4. AUDIT. The cost to have the purchase price verified, calculated and certified by a certified public account acceptable to the District which verification, calculation and certification shall be required as a condition under Section 3.03 below. 5. REVIEW OF CONVEYANCE DOCUMENTS. Milburn shall pay the District's expense of preparing, reviewing, and recording documents of title, which expense shall be deducted from the purchase price at closing. Section 3.03. CLOSING DATE. The date for closing of purchase and sale shall be as determined by District in accordance with the conditions of Section 3.01, but the date of closing shall not be more than five days after the occurrence of: (1) the District's receipt of construction funding pursuant to Section 3.01(b) above from the Customers, whether one or more, for the purchase of the District Facilities; (2) the District's Board of Directors award the contract for construction of the Onion Creek Interceptor, Phase 2, (Contract No. 5); and (3) the completion of an audit of the purchase price. Section 3.04. CONVEYANCE. Upon payment of the purchase price by District, Milburn shall convey the District Facilities to District, together with all rights to any existing insurance, construction bonds, guarantees and other matters. The conveyance shall be evidenced by a warranty deed or an assignment of 3- 886.17 - 17 (10 -3 -86) easements and a bill of sale, whichever is legally appropriate. The conveyance shall be free and clear of all liens and encumbrances. In the event District and Milburn are unable to agree upon the amount of the purchase price of the District Facilities, the District may deposit the amount equal to the difference between the disputed amounts claimed to be correct by each party into an interest bearing escrow account and upon the deposit, District and Milburn Milburn and District reserve the disputed amount. Section 3.05. ASSUMPTION OF may close the transaction, provided their respective rights to recover CONTRACTS. 3- 886.17 - 18 (10 -3 -86) In written notice from the District to the Customers District will not proceed to construct Phase lA and District's System to purchase a share of the District the event Milburn has failed to complete the construction within the construction periods set forth in the construction contracts with all allowed time delays included, the District may purchase District Facilities prior to completion of construction, by assuming Milburn's rights and obligations under the contracts for construction of the District's Facilities and contract for engineering services, and payment to Milburn of the costs paid by Milburn for constructing the District Facilities as provided by Section 3.02 of this Agreement. The date of closing shall be not more than ten or less than five days after the District elects to assume the contracts for construction of the District Facilities. Section 3.06. USE OF DISTRICT FACILITIES BY CUSTOMERS WITHOUT REGIONAL SYSTEM. In the event the District elects not to proceed to construct or acquire Phase lA and 1B of the District's System, as provided by Section 6.01(b) of the Wastewater Disposal Contract, any Customer may elect within thirty (30) days of that the 1B of the Facilities from Milburn. Should some or all of the Customers elect to purchase a share, each Customer so electing shall be required and hereby agrees to pay their pro -rata share for the District Facilities as follows: (a) Should MUD 2, MUD 3 or Round Rock elect to purchase, that party so electing shall pay its pro -rata share of all costs of the District Facilities, including accrued interest, from the date the initial expense was incurred. (b) Should Austin, which shall be providing service to Fern Bluff and Milburn's property, elect to purchase, it shall pay its pro -rata share of the Purchase Price, as defined in Section 3.02, of the District Facilities. Such payment by the purchasing party shall be in cash within ten (10) business days after such Customer elects to purchase a share of the District Facilities. Their pro -rata share shall be equal to their percentage of use of the available capacity of the District Facilities. Provided, however, it is specifically understood and agreed by the Customers that Milburn and Fern Bluff shall at all times have a guaranteed minimum capacity of 1500 LUEs in the District Facilities. It is further understood and agreed that all capacity within the Milburn Force Main financed by Milburn shall be reserved for the sole use of Milburn and Fern Bluff except as set forth in this paragraph. Milburn and Fern Bluff specifically agree that Austin shall have a reservation of 150 LUEs of capacity in the Milburn Force Main and Round Rock shall have a reservation of 150 LUEs of capacity in the Milburn Force Main. Neither Milburn nor Fern Bluff shall have any obligation to secure or otherwise provide wastewater treatment capacity or any additional improvements necessary for such Customer to utilize the District Facilities. Section 3.07. USE OF FACILITIES PRIOR TO PURCHASE. It is specifically understood and agreed by the parties that: (a) No parties other than Milburn and Fern Bluff except Austin and Round Rock as set forth in Section 3.06 above shall have the right to use the Facilities prior to the conveyance of the Facilities to the District which right to use shall be contingent upon execution of an agreement for interim wastewater treatment between the District, Round Rock, and the other Customers. (b) Any wastewater which may be discharged from the Facilities shall pass into the ownership and control of Austin and Round Rock at the point where the Onion Creek Interceptor, 3- 886.17 - 19 (10 -3 -86) Phase I enters Round Rock's existing Onion Creek Interceptor, at which point such wastewater shall pass immediately thereafter into the ownership and control of the District for dischar a into Round Rock's system in accordance with the Interim Wastewater Disposal Contract between the District, the Customers and Round Rock. ..r. ARTICLE IV. ALLOCATION OF CAPACITY Section 4.01. Guaranteed reservations of capacity in the Facilities by the Customers shall be set forth in the Interim Waste Treatment Agreement between the District, Round Rock and the other Customers and shall be subject to the execution of such agreement between Round Rock, the District and the other Customers for sufficient wastewater treatment capacity and shall not be effective until such time as that agreement is in effect. ARTICLE V. DEFAULT, NOTICE, AND REMEDIES Section 5.01. FORCE MAJEURE. In case by reason of "Force Majeure" either party shall be rendered unable wholly or in part to carry out its obligations under this Agreement, then if the party shall give notice and full particulars of the "Force Majeure" in writing to the other parties within a reasonable time after occurrence of the event or cause relied on, the obligation of the party giving such notice, so far as it is affected by such Force Majeure, if appropriate, shall be suspended during the continuance of the inability then claimed, but for no longer period, and they shall incur no liability by reason of the party's failure to perform in whole or in part, and the party shall endeavor to remove or overcome such inability with all reasonable dispatch. The term "Force Majeure" as employed herein, shall mean acts of God, strikes, lockouts, or other industrial disturbances, acts of public enemy, orders of any kind of the United States or the State of Texas, or any civil or military authority, insurrections, riots, epidemics, landslides, lightning, earthquakes, fires, hurricanes, storms, floods, washouts, droughts, arrests, restrain of government and people, 3- 886.17 - 20 (10 -3 -86) civil disturbances, explosions, breakage or accidents to machinery, pipelines or canals, or of any other causes not reasonably within the control of the party claiming such inability. It is understood and agreed that the settlement of strikes and lockouts shall be entirely within the discretion of the party having the difficulty and that the above requirement that any Force Majeure shall be remedied with all reasonable dispatch shall not require the settlement of strikes and lockouts by acceding to the demands of the opposing party or parties when such settlement is unfavorable in the judgment of the party having the difficulty. Section 5.02. REMEDIES UPON DEFAULT. The parties to this Agreement do not intend to specify, and this Agreement shall not be constructed as specifying, an exclusive remedy for any default, but all such other remedies, other than termination, existing at law or in equity may be availed of by any party to this Agreement and shall be cumulative. Section 5.03. NOTICES. Unless otherwise provided in this Agreement, any notice, communication, request, reply, or advice (severally and collectively called "Notice ") required or permitted to be given as provided by this Agreement shall be in writing and will be deemed to be delivered and received either: (1) when deposited in the United States Mail, postage prepaid, certified or registered, with return receipt requested, properly addressed to the party to be notified; or (2) when delivered to a courier service for delivery, delivery charges prepaid, properly addressed to the party to be notified. Notice given in any other manner shall be effective only if and when received by the party to be notified. For the purposes of notice, the addresses of the parties to this Agreement shall be as shown above the signatures of each party to this Agreement, until changed as subsequently provided. The parties to this Agreement shall have the right from time to time and at any time to change their respective addresses and each shall have the right to specify as its address any other address by at least fifteen (15) days notice to the other parties to this Agreement. 3- 886.17 - 21 (10 -3 -86) Section 5.04. NOTICE OF DEFAULT. If any party to this Agreement believes that another party has defaulted in performance under this Agreement, then within ten days after the discovery of the alleged default, the complaining party shall give written notice to the alleged defaulting party and the other parties, which notice shall specify in detail the nature of the alleged default and the action proposed by the complaining party to remedy the alleged violation. If the alleged defaulting party does not cure the default or otherwise resolve the alleged default within thirty days after receipt of the default notice, then the complaining party shall have recourse to the available remedies, as specified in this Agreement or as provided by applicable law. Except .as expressly provided by Section 5.5 of this Agreement, the failure by a party to immediately discover a default and give notice to the defaulting party of an alleged default shall not constitute a waiver by a party of the alleged default should the alleged default be proven from its inception. Section 5.05. WAIVER. Any right or remedy or any default under this Agreement shall be deemed to be conclusively waived unless asserted by a proper proceeding at law or in equity within two (2) years plus one (1) day after the occurrence of the default'or alleged default. Notice of default and opportunity for cure of the default as provided by Section 5.4 of this Agreement shall be a prerequisite to any proceeding at law or in equity, unless the default is discovered less than twenty (20) months after the default occurred or unless the default harms or threatens to damage the property or facilities belonging to the party alleging the default or the default harms or threatens to harm the health, safety, and welfare of the general public and the harm or threatened harm will occur before notice of the default and opportunity to cure the default can be given. No waiver or waivers of any breach or default (or any breaches or defaults) by any party to this Agreement of any term, covenant, condition, or liability under this Agreement or of the performance by the other party to this Agreement of any duty or obligation under this Agreement, shall be deemed or construed to 3- 886.17 - 22 (10 -3 -86) be a waiver in the future of subsequent breaches or defaults of any kind, character, or description, under any circumstances. Section 5.06. VENUE. All amounts due under this Agreement, including, but not limited to, payments due under this Agreement or damages for the breach of this Agreement, shall be paid and be due in Williamson County, Texas, which is the county in which Round Rock is located. The parties to this Agreement expressly agree that Williamson County, Texas, is the place of performance of this Agreement and in the event that any legal proceeding is brought to enforce this Agreement or any provision of the Agreement, the legal proceeding shall be brought in Williamson County, Texas. Section 5.07. APPLICABLE LAW. This Agreement shall be construed under the laws of the State of Texas. ARTICLE VI. INTERPRETATION AND CONSTRUCTION Section 6.01. INTERPRETATION. Unless the context requires otherwise, words of the masculine gender shall be construed to include correlative words of feminine and neuter genders and vice -versa and words of the singular number shall be construed to include correlative words of the plural number and vice - versa. Reference to any party to this Agreement means that party and the successors and assigns of that party. The parties agree that this Agreement or any provision of this Agreement shall not be ,construed in favor of or against any Party on the basis that the Party did or did not author this Agreement or provision. This Agreement and all the terms and provisions shall be liberally construed to effectuate the purposes set forth herein and to sustain the validity of this Agreement. Nothing in this Agreement shall be construed to permit a violation of any federal or state statutory provision or any provision of the federal or state constitutions, and all acts done pursuant to this Agreement shall be performed in such manner as to conform thereto, whether expressly provided or not. Where any procedure hereunder may be held by a court of competent jurisdiction to be violative of any federal or state statutory or constitutional provision, the 3- 886.17 - 23 (10 -3 -86) parties to this Agreement shall have the power by resolution to adopt and promulgate reasonable and necessary alternative procedures which will conform thereto and the Parties agree that they would have entered into this Agreement notwithstanding the invalidity of any provision or provisions hereof. Section 6.02. REGULATORY AUTHORITY. This Agreement shall be subject to all valid rules, regulations, laws, permits, orders, and ordinances applicable hereto passed or promulgated by the United States of America, the State of Texas or any governmental body or agency having lawful jurisdiction or any authorized representative or agency of any of them. Section 6.03. CURRENT REGULATIONS. In each instance in this Agreement where reference is made to a federal, state, or local law or regulation, the parties to this Agreement intend that, at any given time, the then - current edition of any such federal, state or local law or regulation shall apply. Section 6.04. MODIFICATION. This Agreement shall be subject to change or modification only with the mutual consent of the parties to this Agreement. Section 6.05. ASSIGNMENT. This Agreement shall not be assignable in whole or in part by any party without the prior written consent of the other party or parties to this Agreement. Section 6.06. SEVERABILITY. The provisions of this Agreement are Agreement or severable, and if any provision or part of this the application thereof to any person or circumstance shall ever be held by any court of competent jurisdiction to be invalid or unconstitutional for any reason, the remainder of this Agreement and the application of such provision or part of this Agreement to other persons or circumstances shall not be affected thereby. Section 6.07. MERGER. Except as otherwise provided by this Agreement, this Agreement constitutes the entire agreement between the parties relative to the construction and use of the Facilities. There have been and are not agreements, covenants, representations or warranties between the parties other than those expressly stated herein or expressly provided for herein. 3- 886.17 - 24 (10 -3 -86) Section 6.08. APPROVAL OR CONSENT. Whenever this Agreement requires or permits approval or consent to be hereafter given by any party, the parties agree that such approval or consent shall not be unreasonably withheld. Such approval or consent may be evidenced by an order or resolution adopted by the governing body of the respective parties or by an appropriate certificate executed by a person, firm or entity authorized to determine and give approval or consent on behalf of the respective parties pursuant to an order or resolution adopted by the governing body or board of directors thereof. Such approval or consent shall be effective without regard to whether given before or after the time required herein and no approval or consent of the parties shall be required as a condition of any action except as expressly required in this Agreement. Section 6.09. PARTIES IN INTEREST. Except as expressly provided otherwise by this Agreement, this Agreement shall be for the sole and exclusive benefit of the parties hereto and shall not be construed to confer any rights upon any third party. Nothing herein shall be construed to confer standing to sue upon any third party who did not otherwise have such standing. Section 6.10. CAPTIONS. The captions appearing at the first of each numbered section or paragraph in this Agreement are inserted and included solely for convenience and shall never be considered or given any effect in construing this Agreement, or any provisions hereof, or in connection with the duties, obligations, or liabilities of the respective parties hereto or in ascertaining intent, if any questions of intent should arise. Section 6.11. TIME OF THE ESSENCE. Time shall be of the essence of this Agreement. Section 6.12. NO PARTNERSHIP. The parties to this Agreement do not intend that this Agreement establishes, nor shall this Agreement be construed to as in any way establishing a partnership or joint venture, express or implied agency, or employer - employee relationship between the parties to this Agreement. 3- 886.17 - 25 (10 -3 -86) Section 6.13. COUNTERPARTS. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original and all of which shall together constitute one and the same instrument. The terms of this Agreement shall become binding upon each party from and after the time it has been executed by all parties and an interim wastewater A is os agreement with Round Rock has been entered into and executed by the District and the Customers.A ARTICLE VII. EFFECTIVE DATE AND TERM OF AGREEMENT Section 7.01. EFFECTIVE DATE. This Agreement shall become effective as of date shown above. Section 7.02. TERM. This Agreement shall continue in force and effect from the effective date of this Agreement for a period of five (5) years, unless terminated earlier by (1) the mutual written agreement of the parties to this Agreement; (2) pursuant to Section 1.02 above; (3) the District's purchase of the District Facilities from Milburn; or (4) the elapse ofhforty -one (41) days after the District gives written notice to the Customers that the District does not intend to proceed to construct the Phase lA and Phase 1B of the District's System. IN WITNESS WHEREOF, the parties to this Agreement acting under the authority of their respective governing bodies have caused this Agreement to be duly executed. ATTEST; Roscoe Conoley Secretary 3- 886.17 - 26 (10 -3 -86) BRUSHY CREEK WATER CONTROL AND IMPROVEMENT DISTRICT NO. 1 OF WILLIAMSON AND MILAM COUNTIES P.O. Box 882 Taylor, Texas 76574 Dan Mize President Executed , 1986 ATTEST: James E. Aldridge Jorge Carrasco City Clerk City Manager ATTEST: CITY OF AUSTIN P.O. Box 1088 Austin, Texas 78767 CITY OF ROUND ROCK 214 E. Main Round Rock, Texas 78664 Joanne Land Mike Robinson City Secretary Mayor ATTEST: Al Paricio Wayne Wood Secretary President ATTEST: Executed , 1986 Executed , 1986 WILLIAMSON COUNTY MUNICIPAL UTILITY DISTRICT NO. 2 3737 Hairy Man Road Round Rock, Texas 78681 Executed WILLIAMSON COUNTY MUNICIPAL UTILITY DISTRICT NO. 3 408 Ridgewood Road Cedar Park, Texas 78613 Danny Malone James H. Parkhurst Secretary President 3- 886.17 - 27 (10 -3 -86) Executed , 1986 BILL MILBURN, INC., a Texas corporation P.O. Box 9802 -682 Austin, Texas 78766 Bill Milburn President , 1986 Executed , 1986 ATTEST: Dene M. Jacobson Thomas J. Sandridge Secretary President 3- 886.17 3- 886.17 - 28 (10 -3 -86) FERN BLUFF MUNICIPAL UTILITY DISTRICT 2600 One American Center Austin, Texas 78701 Executed , 1986 DATE: October 7, 1986 SUBJECT: Council Agenda, October 9, 1986 ITEM: 13C - Consider a resolution authorizing the Mayor to enter into the Onion Creek Pumpover Contract for wastewater facilities. This contract provides for the prebuilding of the Onion Creek pumpover contracts by Milburn. Milburn will pay 30% of these improvements. A detailed description will be presented at the work session.