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R-88-1095 - 2/25/1988WHEREAS, the City Council has for the past several years promoted the concept of regionalization of wastewater treatment services, and WHEREAS, the Brushy Creek Water Control and Improvement District No. 1 of Williamson and Milam Counties (WCID) has received official designation as the regional provider of wastewater treatment services, and WHEREAS, a Wastewater Disposal Agreement (Agreement) has been prepared whereby the City of Round Rock and City of Austin will purchase on a wholesale basis wastewater services from the WCID, and WHEREAS, the Council wishes to enter into said Agreement with the WCID, NOW THEREFORE BE IT RESOLVED BY THE COUNCIL OF THE CITY OF ROUND ROCK, TEXAS, THAT The Mayor is hereby authorized and directed to execute on behalf of the City the Agreement with the WCID, a copy of said Agreement being attached hereto and incorporated herein for all purposes. RESOLVED this day of February, 1988. ATTEST: GRESWCID LAND, City Secretary t , y RESOLUTION NO. 690 MIKE ROBINSON, Mayor City of Round Rock, Texas DATE:, February 22, 1988 SUBJECT: Council Agenda, February 25, 1988 ITEM: 13J. Consider a resolution authorizing the Mayor to execute an agreement concerning Regional Wastewater. STAFF RESOURCE PERSON: Jim Nuse STAFF RECOMMENDATION: Staff recommends acceptance of this agreement. On February 25, 1988 both Round Rock and Austin will consider the Regional Sewer Contract. This contract will construct the project to the Davis Springs Pumpover tie -in therefore eliminating contract #1 and a portion of contract #2. Please refer to the Option 6 report enclosed. ECONOMIC IMPACT: This option decreases our cost over the previous project costs. 4 -6 -88 WASTEWATER DISPOSAL AGREEMENT Between Brushy Creek Water Control and Improvement District No. 1 of Williamson and Milam Counties The City of Austin and The City of Round Rock TABLE OF CONTENTS Recitals 4 ARTICLE I DEFINITIONS 1.01. Definition of Terms 5 1.02. Interpretation 10 ARTICLE II RESERVED CAPACITY; CUSTOMER CATEGORY 2.01. Reserved Capacity 10 2.02. Category of Customer 10 ARTICLE III DESIGN. ACQUISITION AND CONSTRUCTION OF SYSTEM BY DISTRICT 3.01. Construction 10 3.02. Acquisition and Construction - 11 3.03. Conditions Precedent 11 ARTICLE IV DISCHARGE OF WASTEWATER AND METERING 4.01. Rights of Customers 11 4.02. Discharge 11 4.03. Point of Entry 11 4.04. Conveyance to Point of Entry 11 4.05. Quantity at Point of Entry 11 4.06. Liability for Damages and Responsibility for Treatment and Disposal of Wastewater 12 4.07. Metering 12 4.08. Unit of Measurement 12 ARTICLE V QUALITY AND TESTING 5.01. General 13 5.02. Admissible Discharges 13 5.03. District Regulations 13 5.04. Industrial Wastes 13 ARTICLE VI FISCAL PROVISIONS 6.01. Cost of Phase IA of System 14 6.02. Construction of Please IB of the System 19 6.03. Deposits on Funding Date 20 6.04. Service Charge 20 6.05. Payments by Customers and Additional Customers for Future System Capacity 20 6.06. Capital Recovery Fee 21 6.07. Default 23 6.08. Surcharge 24 6.09. Management Fee 24 6.10. Payments by Customers 24 ARTICLE VII REQUIRED IMPROVEMENTS 7.01. District to Determine Required Improvements 25 7.02. District's Duty to Make Required Improvements 25 7.03. Customer's Obligation In Event of Required Improvement 26 ARTICLE VIII GENERAL PROVISIONS 8.01. Obligations of Customers 26 8.02. Payments to Constitute Operating Expenses of Customer 26 8.03. Customer to Establish Adequate Rates 27 8.04. Mandamus and Other Remedies Against Category B Customers 27 8.05. Other Remedies 27 8.06. Use of Public Property 27 8.07. Use of Revenues of System 27 8.08. Force Majeure 27 8.09. Insurance 28 8.10. Regulatory Bodies 28 8.11. District Contracts with Others 28 8.12. Additional Capacity and Facilities 28 8.13. Contracts with Others 28 8.14. Annual Report and Audit of System 29 8.15. Governmental Regulations 29 8.16. Operation of the System 29 8.17. Regional Designation 29 8.18. No Additional Waiver Implied 29 8.19. Addresses and Notice 29 8.20. Modification 30 8.21. Assignability 30 8.22. Severability 30 8.23. Merger 30 ARTICLE IX DISTRICT SYSTEM BUDGET 9.01. Filing with Customers 30 ARTICLE X OTHER MATTERS 10.01. Agreement Concerning Permits for Existing Utility Systems 31 10.02. Interim Capacity in Round Rock Wastewater Transportation and Treatment System 31 10.03. Ownership of System 31 10.04. Provisions Applicable to Austin 32 10.05. Provisions Applicable to Round Rock 32 10.06. Provisions Applicable to Fern Bluff MUD and Milburn Investments, Inc 33 ARTICLE XI TECHNICAL COMMITTEE 11.01. Composition of Technical Committee 33 11.02. Organization of the Technical Committee 34 11.03. Action of the Technical Committee 34 11.04. Responsibility of Technical Committee 34 ARTICLE XII SUCCESSION TO RIGHTS AND PROPERTIES ACQUIRED PURSUANT TO PRIOR CONTRACT 12.01 Prior Contract 34 ARTICLE XIII EFFECTIVE DATE AND TERM OF AGREEMENT 13.01. Effective Date 35 13.02. Term of Agreement 35 Signatures 35 - 3 - WASTEWATER DISPOSAL AGREEMENT This agreement (the "Agreement ") is entered into between Brushy Creek Water Control and Improvement District No. 1 of Williamson and Milam Counties (the "District "), the City of Austin ( "Austin "), and the City of Round Rock ( "Round Rock "), all of such parties other than the District being collectively referred to as the "Customers ". RECITALS WHEREAS, the District was created by order of the State of Texas Board of Water Engineers (presently the Texas Water Commission) by order dated November 1, 1956, which creation was confirmed by an election held within the District on January 8, 1957, and was validated by Acts, 1957, 55th Legislature, Regular Session, Chapter 341, Page 807, as amended by Acts, 1957, 55th Legislature, Second Called Session, Chapter 10, Page 166; WHEREAS, the District's boundaries include all of the Brushy Creek watershed, an area in Williamson and Milam Counties, Texas; WHEREAS, the District is authorized to provide Wastewater collection and treatment services to lands within the District and in the vicinity of the District; WHEREAS, there is a need to establish in the upper Brushy Creek Watershed, generally in the area outlined in the Engineering Report (as hereinafter defined), a regional Wastewater collection, treatment and disposal system for the purpose of providing facilities to adequately receive, transport, treat and dispose of Wastewater in such area; WHEREAS, the Texas Water Development Board has, pursuant to Chapter 26, Texas Water Code, declared the area in the upper Brushy Creek watershed to be in need of a regional Wastewater collection, treatment and disposal system and has ordered that the District be the provider of regional Wastewater services in said area [31 T.A.C. § 351.111 - 351.113, adopted 10 TEN REG 3217 (8 -23- 1985)]; WHEREAS, the District, the Customers, Williamson County Municipal Utility District No. 2 ( "MUD 2 ") and Williamson County Municipal Utility District No. 3 ( "MUD 3 ") heretofore entered into a Wastewater Disposal Contract dated December 16,,1985 ( "Contract ") which Contract terminated on August 20,1987; WHEREAS, the parties hereto desire that all rights and properties acquired by the District pursuant to such Contract shall henceforth be held pursuant to the terms and provisions of this Agreement; WHEREAS, the Customers each presently own, operate and maintain their respective Wastewater systems to collect, treat and dispose of Wastewater from the areas served by the Customers; WHEREAS, the Customers desire to discharge Wastewater from their Wastewater collection systems into the regional Wastewater collection, treatment and disposal system (the "System ") proposed to be constructed by the District and as described in the Engineering Report, in order to achieve efficiencies of cost and operation and to protect and preserve the environment of the upper and lower Brushy Creek watersheds; WHEREAS, the District is willing to acquire, construct and expand the System to receive Wastewater from the Customers' Wastewater collection systems and to treat and dispose of such Wastewater; - 4 - WHEREAS, the District and the Customers are authorized to make this Agreement under the provisions of Chapter 30, Texas Water Code, and other applicable provisions of state law; and WHEREAS, the parties hereto recognize: (a) That the District has used the payments received under the contract and will use the payments to be received under this Agreement for the payment of the expenses of acquiring. constructing, financing and operating the System: (b) That contracts similar to this Agreement may, in the future, be executed between the District and Additional Customers to expand the System; (c) That the District plans to secure cash contributions and /or to issue and sell its Bonds to raise funds to finance the acquisition and construction of the System; (d) That the District may issue Bonds from time to time in the future or receive additional cash contributions from Customers and /or Additional Customers to further expand, extend, enlarge, repair and improve the System; and (e) That the Customers and the District are subject to all valid rules, regulations and requirements of the Texas Water Commission, the Environmental Protection Agency and such State, federal and local laws, rules and regulations as now exist or may be enacted during the term of this Agreement; NOW, THEREFORE, the Customers and the District do hereby contract and agree as follows: ARTICLE I DEFINITIONS Section 1.01. DEFINITION OF TERMS. Terms and expressions as used in this Agreement, unless the context clearly shows otherwise, shall have the following meanings: (a) "Additional Customer" means any party with whom the District makes a contract for receiving, transporting. treating and disposing of Wastewater through the System in an Expansion. Additional Customers shall be designated as either Additional Category A Customers or Additional Category B Customers under the same criteria as used for determining Category A Customers and Category B Customers. (b) "Agreement" means this agreement. (c) "Annual Debt Service Requirement" means the principal of and redemption premium, if any, and the interest on Bonds, if any, issued by the District on behalf of a Category B Customer or Additional Category B Customer as such principal, redemption premium, if any, and interest become due during any Fiscal Year. less interest to be paid out of Bond proceeds as permitted by the Bond Resolution and less any other funds which are dedicated by the District for payment of principal, redemption premium and interest on the Bonds during such Fiscal Year; plus the amounts, if any, required to be deposited to restore any deficiency in the Debt Service Reserve Fund in accordance with the provisions of the Bond Resolution; and plus any amounts required to pay charges, fees or expenses of any trustee, paying agent or registrar for the Bonds. (d) "Annual Operation and Maintenance Expense Requirement" means the amount paid or payable for all Operation and Maintenance Expenses during any Fiscal Year together with any amount required or - 5 - necessary to replenish and maintain the Repair and Replacement Reserve Fund and the Operation and Maintenance Reserve Fund for the System. (e) "Austin" means the City of Austin. (f) "Bond" means any bond, note or other evidence of indebtedness (including, without limitation, any Improvement Bonds) to be issued by the District pursuant to this Agreement to provide temporary, interim or permanent financing for the acquisition, construction, expansion, extension, enlargement, improvement or repair of the System, whether one or more issues, or any bond issued to refund the same, or issued for any purpose necessary to acquire, construct, expand, extend, enlarge, improve or repair the System. but does not include any other bonds of the District issued heretofore or hereafter for any other District purpose. (g) "Bond Issuance Costs" means all costs associated with the authorization, insurance, issuance, sale and delivery of the Bonds, including all legal, financial, advisory and engineering fees related thereto, expenses of printing the Bonds, expenses to retain a trustee, paying agent or registrar for the Bonds, advertising expenses and all other out -of- pocket expenses directly related to the authorization, issuance, sale and delivery of the Bonds. In addition, "Bond Issuance Costs" shall include an amount equal to eighteen months interest on the Bonds, which amount shall be deposited into the Interest Account of the Debt Service Reserve Fund and be used to pay interest on the Bonds. (h) "Bond Resolution" means any resolution of the Board of Directors of the District (including, without limitation, any Improvement Bond Resolution) authorizing the issuance of Bonds and providing for their security and payment, as such resolution may be amended from time to time as therein permitted; without limitation, "Bond Resolution" shall include any trust indenture pursuant to which the Bonds are issued. (i) "Capacity Charge" means a lump sum payment made in accordance with the terms of any contract between the District and a Category A Customer, which payment shall equal such Category A Customer's proportionate share of the Project Costs of the System. (j) "Capital Recovery Fee" means the fee established by the District pursuant to Section 6.06(a) - (c) of this Agreement. (k) "Common Facilities" means the facilities described in Section 6.06 of this Agreement, which while constituting a part of Phase I of the System, also either benefit the Additional Customers or constitute a necessary expense of accomplishing Phase I of the System as a regional system. (1) "Construction Fund" means the fund established by the District to receive that portion of the Capacity Charges from Category A Customers and that portion of the proceeds of Bonds issued by the District on behalf of Category B Customers which are allocable to the cost of acquiring or constructing Phase I of the System. (m) "Customers" means Austin and Round Rock. There shall be two classes of Customers, and every Customer shall be designated as either a "Category A Customer" or a "Category B Customer ", as defined herein, as appropriate. Category A Customer: Shall be any Customer who pays for its proportionate share of the Project Costs of Phase I of the System by payment of a Capacity Charge. Category B Customer: Shall be any Customer who pays for its proportionate share of the Project Costs of Phase I of the System by monthly payment of a Facility Charge. - 6 - (n) "Debt Service Fund" means the fund established in the Bond Resolution for the purpose of receiving deposits of Facility Charge payments and paying debt service on the Bonds, which fund shall be comprised of a Principal Account and an Interest Account. (o) "Debt Service Reserve Fund" means the fund established in the Bond Resolution authorizing the issuance of Bonds on behalf of a Category B Customer or Additional Category B Customer which will be used as a reserve to secure payment of debt service on such Bonds. (p) "District" means the Brushy Creek Water Control and Improvement District No. 1 of Williamson and Milam Counties. (q) "Eligible Securities" means obligations of the United States or obligations unconditionally guaranteed by the United States or an agency of the United States, and certificates of deposits of banks and savings and loan associations authorized to do business in the State of Texas provided such deposits are secured in the manner provided by law for the deposit of county funds. (r) "Engineering Report" means a report of Haynie & Kallman, Inc., and Espey, Huston & Associates, Inc., Consulting Engineers, entitled A Feasibility Study of a Potential Regional Wastewater Treatment Facility for the Upper Brushy Creek Watershed of Southwest Williamson County, Texas, dated July, 1984, and currently specifying Option 6A, dated April, 1988, as such report may be amended, modified and changed and superseded by the District at its direction at any time prior to the execution of construction contracts for improvements, additions and enlargements to Phase I of the System or as modified and changed by change orders issued after execution of such construction contracts; provided, however, that no such change orders shall affect the Reserved Capacity, rate of discharge or Point of Entry for any Customer without such Customer's consent. (s) "Expansion" means any facilities or equipment which constitute an expansion, extension or enlargement beyond Phase I of the System other than Required Improvements. (t) "Facility Charge" means the annual charge which each Category B Customer or Additional Category B Customer agrees unconditionally to pay to the District calculated in accordance with this Agreement. (u) "Fiscal Year" means the twelve (12) month period beginning October 1 of each year or such other twelve (12) month period as may be established in the future to constitute the District's Fiscal Year. (v) "Funding" means the receipt by the District of the funds necessary to pay the Project Costs from Capacity Charge payments made by a Category A Customer or from the Net Bond Proceeds of Bonds issued by the District on behalf of a Category B Customer. (w) "Funding Date" means the date or dates on which a Funding occurs. (x) "Improvement Bond" means any bond, note or other evidence of indebtedness to be issued by the District pursuant to Article VII of this Agreement to provide temporary, interim or permanent financing for the improvement or repair of the System as deemed necessary by the Board of Directors of the District to cause the System to be in compliance with State or federal law or with the requirements of any regulatory body, other than the District, whether one or more issues, or any Bond issued to refund same, but does not include any other bonds of the District issued heretofore or hereafter for any other District purpose. (y) "Improvement Bond Resolution" means any resolution of the Board of Directors of the District authorizing the issuance of Improvement Bonds and providing for their security and payment, as such resolution may be amended from time to time as therein permitted; without limitation, "Improvement Bond Resolution" shall include any trust indenture pursuant to which the Improvement Bonds are issued. (z) "LCE" means the amount of sewage collection and treatment capacity needed by one living unit equivalent which amount shall be 350 gallons per day based on a 30 -day average. (aa) "Month" means a calendar month. (bb) "Net Bond Proceeds" means the proceeds received by the District upon the sale of its Bonds less all Bond Issuance Costs. (cc) "Operation and Maintenance Expense" means all costs of operation and maintenance of the System including, but not limited to, repairs and replacements to the extent not paid from the Repair and Replacement Reserve Fund or the Operation and Maintenance Reserve Fund, costs of maintaining any permits or licenses necessary to operate and maintain the System, and cost of utilities, supervision, engineering, accounting, auditing, legal services, liability insurance for the District and the District directors and employees, expenses of the Technical Committee in fulfilling its responsibilities, and any other supplies, services, administrative costs and equipment necessary for proper operation and maintenance of the System, and payments made by the District in satisfaction of judgments resulting from claims not covered by the District's insurance or not paid by one particular Customer or Additional Customer arising in connection with the operation and maintenance of the System including any fines or penalties lawfully assessed and any and all expenses incurred by the District in connection with any litigation of any nature whatsoever concerning the System or the District's responsibilities hereunder to any person, entity or party hereto. Depreciation shall not be considered an item of Operation and Maintenance Expense. (dd) "Operation and Maintenance Reserve Fund" means the fund to be established by the District to provide moneys to operate and maintain the System in the event current revenues of the System are insufficient to meet the Operation and Maintenance Expenses of the System. (ee) "Phase I of the System" includes Phases IA and IB of the ' System and means an interceptor line and related facilities and a 12 MGD Wastewater treatment plant or such other size plant as will adequately provide the Reserved Capacity needs of the Customers in the System, all as generally described in the Engineering Report, including interim components which may be abandoned as future expansions are added and Project Costs associated with acquisition or construction of downsized components which may be smaller than ultimately necessary to receive the Reserved Capacity of all Customers. (ff) "Point of Entry" means a point at which Wastewater enters the System. (gg) "Project Contracts" means any contract or agreement, any amendments thereto, and any termination thereof, whether in writing or not, entered into by the District in connection with or in furtherance of the management, planning, design, financing, construction, acquisition, expansion, implementation, operation or maintenance of the System. (hh) "Project Costs" includes all acquisition and construction costs and reconstruction costs as those terms are generally understood in standard accounting practice as applied to projects of the nature of the System, and without limiting the generality of the foregoing, the term shall include the costs of obtaining all licenses and permits: purchase of equipment, property, rights in property, costs of land, easements and rights -of -way, including - 8 - damages to land and property; engineering, administrative, auditing, legal expenses and liability insurance for the District and District directors and employees incurred in connection with the planning, development, acquisition and construction of the System; any and all tools and equipment required for the operation and maintenance of the System; costs of the same nature for any expansion, extension, enlargement, improvement or replacement of the System; the costs of establishing the Operation and Maintenance Reserve Fund and the Repair and Replacement Reserve Fund; legal and other expenses incurred by the District in accomplishing the acquisition or construction of the System including any and all expenses incurred by the District in connection with any litigation of any nature whatsoever concerning the System or the District's responsibilities hereunder to any person, entity or party hereto; and a reasonable amount for contingencies, not to exceed ten (10) percent of the construction contract amount. The Project Costs shall be composed of two components: (1) "Line Project Costs" which shall be all Project Costs related to constructing interceptor lines, collection lines, easement acquisition and special legal cost and related facilities to collect and transport Wastewater to the System's proposed Wastewater treatment plant; (2) "Treatment Project Costs" which shall be all Project Costs related to constructing the System's Wastewater treatment plant (such Treatment Project Costs consisting of [a] "Treatment Project Common Facilities Costs" being those Treatment Project Costs for Common Facilities and [b] "Treatment Project Phase Costs" being those Treatment Project Costs for a particular phase of the Project which are not related to the cost of Common Facilities). "Project Management Costs" which shall be all Project Costs relating to administration of construction of the System and shall be treated as Treatment Project Common Facilities Costs, except for those costs which can be specifically assigned as a Line Project Cost or a Treatment Project Phase Cost. (ii) "Repair and Replacement Reserve Fund" means the fund to be established by the District, the moneys from which will be used to repair the System or to replace worn or obsolete parts of the System. - (jj) "Required Improvement" means any facilities or equipment which constitute an improvement to or modification of the System. the construction, acquisition and ownership of which is undertaken pursuant to Article VII this Agreement as the result of the requirement of a regulatory body other than the District or repairs and replacements which cost more than the amount of money on hand in the Repair and Replacement Reserve Fund. (kk) "Reserved Capacity" means, with respect to any given period of time, the total quantity of Wastewater that a particular Customer or Additional Customer is entitled to deliver into the System pursuant to this Agreement and similar contracts with Additional Customers. (11) "Round Rock" means the City of Round Rock. (mm) "Service Charge" means a monthly charge which will be paid by every Customer and Additional Customer of each Category (Categories A and B), to enable the District to meet the Annual Operation and Maintenance Expense Requirement. (nn) "System" means all of the facilities for receiving, transporting, treating and disposing of Wastewater generally in the upper Brushy Creek watershed, together with any expansions, extensions, enlargements or improvements to said facilities and any replacements of said facilities constructed or otherwise incorporated into said facilities in the future, including any Required Improvements, which facilities are to be owned by the District and the Customers as provided in Article X hereof and to be managed and operated by the District as provided in Article X. Said term shall include only those facilities which are used, constructed - 9 - or acquired, or the use of which is arranged for, by the District to afford service to the Customers and Additional Customers. (oo) "System Year" means an annual period beginning October 1 of a year and ending September 30 of the next year. (pp) "Technical Committee" means the committee created by Article XI of this Agreement. (qq) "Total Reserved Capacity" means, with respect to any given period of time, the total quantity of Wastewater that all Customers and /or Additional Customers are entitled to deliver into the System pursuant to this Agreement and similar agreements with Additional Customers. (rr) "Wastewater" means liquid and water carried waste discharged from sanitary conveniences of dwellings, business buildings, institutions and the like including garbage which has been shredded to such degree that all particles will be carried freely under flow conditions normally prevailing in public sewers, with no particle greater than one -half (1/2) inch in any dimension and the liquid wastes from industrial processes, and includes any infiltration water that has migrated from the ground into the System. Section 1.02. INTERPRETATION. Terms used in this Agreement with initial letters capitalized and not otherwise defined in this Agreement have the meanings assigned to them in Section 1.01. Except where the context otherwise requires, words imparting the singular number shall include the plural number and vice _versa. Reference to any document means that document as amended or supplemented from time to time. Reference to any party means that party and its successors and assigns. ARTICLE II RESERVED CAPACITY; CUSTOMER CATEGORY Section 2.01. RESERVED CAPACITY. The Customers are entitled to Reserved Capacity in the System (and its various phases and components) as described in Exhibit "A ", attached hereto and hereby incorporated herein by reference for all intents and purposes. Section 2.02. CATEGORY OF CUSTOMER. All of the Customers are now Category A Customers. Each of the Customers agrees to notify the District at least sixty (60) days in advance of any Funding Date for which this Agreement provides for an election as to category of Customer if the Customer desires to be a Category A or Category B Customer for purposes of the payments made at each subsequent Funding Date; provided, however that any customer which has an existing Category designation shall not be required to give such notification unless it desires to change its Category designation for such funding. ARTICLE III DESIGN, ACQUISITION AND CONSTRUCTION OF SYSTEM BY DISTRICT Section 3.01. CONSTRUCTION. In order to provide services for receiving, transporting, treating and disposing of Wastewater for the Customers and Additional Customers, the District will design and acquire or construct the System as described in the Engineering Report, will acquire all necessary lands. easements and rights -of -way, and will own, operate, maintain and from time to time expand, extend, enlarge, improve and repair the System. The District shall exercise due diligence and use its best efforts to complete construction of Phase IA of the System within 24 months after funding for such construction has been received. Phase IB shall be constructed and completed as necessary and as otherwise provided herein. - 10 - Section 3.02. ACQUISITION AND CONSTRUCTION. The District agrees to proceed promptly with the acquisition and construction of Phase I of the System as described in Article VI and as necessary to the performance of its obligations hereunder subject to the provisions of Section 3.03 of this Agreement. The District shall not be liable to the Customers for any damages occasioned by delay in the commencement of such service to the Customers. After the District has notified the Customers of its readiness to accept such Wastewater at the Point or Points of Entry, the District shall, subject to other terms and conditions of this Agreement, continually hold itself ready, willing and able to supply such service to the Customers. Liability of the District under this covenant shall be subject to the provisions of Sections 6.07 and 8.08 of this Agreement. Section 3.03. CONDITIONS PRECEDENT. It is expressly understood and agreed that any obligation on the part of the District to acquire, construct and operate the System or Phase I thereof, as appropriate, shall be conditioned upon the following: (1) the District's obtaining sufficient funds to pay the Project Costs of the System, or Phase I thereof, as appropriate, including the payment of all Capacity Charges and the sale and delivery upon terms satisfactory to the District of the Bonds for the System, or Phase I thereof, as appropriate; (2) the District's ability to reasonably obtain all sites, rights -of -way, easements, labor, equipment and materials required for acquisition or construction of the System, or Phase I thereof, as appropriate; and (3) the District's obtaining all permits, approvals and licenses required to acquire, construct or operate the System, or Phase I thereof, as appropriate, including waste discharge permits issued by the Texas Water commission or its successors. ARTICLE IV DISCHARGE OF WASTEWATER AND METERING Section 4.01. RIGHTS OF CUSTOMERS. The Customers shall have the right to discharge Wastewater into the System under this Agreement upon the completion of Phase IA of the System described in the Engineering Report. Section 4.02. DISCHARGE. The Customers shall have the right to discharge Wastewater into the System meeting the requirements for quantity set forth in this Agreement and the requirements of quality as set forth in District regulations to be adopted from time to time as described in Article V. Section 4.03. POINT OF ENTRY. Each Customer shall discharge its Wastewater at a Point or Points of Entry designated for each Customer in the Engineering Report, or at such additional Points of Entry as may be mutually agreed upon by the District and any Customer utilizing such Point of Entry. Section 4.04. CONVEYANCE TO POINT OF ENTRY. It shall be the sole responsibility of each Customer to convey its Wastewater to the Point or Points of Entry. Section 4.05. QUANTITY AT POINT OF ENTRY. (a) The quantity of Wastewater conveyed to the Point or Points of Entry by each Customer shal] be metered and the total annual contributing flow of Wastewater received during any Fiscal Year from each Customer shall be used to determine each Customer's payment of the Variable Charges of the Service Charge as set forth in Article VI. (b) Each Customer's discharge rate into the System is designated in the Engineering Report. Section 4.06. LIABILITY FOR DAMAGES AND RESPONSIBILITY FOR TREATMENT AND DISPOSAL OF WASTEWATER. Liability for damages arising from the reception, transportation, delivery and disposal of all Wastewater discharged hereunder shall remain in each Customer to the Points of Entry, and immediately prior to passing through meters installed at the Points of Entry liability for such damages shall pass to the District. As between the parties, each party hereto agrees to save and hold the other parties harmless from all claims, demands and causes of action which may be asserted by anyone on account of the reception, transportation, delivery and disposal of Wastewater while the Wastewater is in the control of such party. This covenant is not made for the benefit of any third party. The District takes the responsibility as between the parties hereto for the proper reception, transportation, treatment and disposal of all such Wastewater received by it at Points of Entry. This Section shall in no manner be construed to relieve any party from its obligation to pay its share of Operation and Maintenance Expense. Section 4.07. METERING. The District will operate and maintain at its expense at each Point of Entry the necessary equipment and devices of standard type for measuring properly all Wastewater to be discharged under this Agreement as such devices are specified in the Engineering Report. Such meters and other equipment shall be furnished by the Customers according to the District's specifications and become the property of the District. The Customers and the District shall have access to such metering equipment at all reasonable times for inspection and examination, and the reading, calibration and adjustment thereof shall be done by employees or agents of the District in the presence of a representative of any Customer if requested by the Customer. All readings of meters will be entered upon proper books of record maintained by the District and a copy of said readings supplied to the Customers. Upon written request any Customer may have access to said record books during reasonable business hours. Not more than three times in each year of operation, the District shall calibrate the meters, if requested in writing by the affected Customer to do so, in the presence of a representative of such Customer, and such parties shall jointly observe any adjustments which are made to the meters in case any adjustment is found to be necessary. If, for any reason, any meters are out of service or out of repair, or if, upon any test, the percentage of inaccuracy of any meter is found to be in excess of five percent (5 %), registration thereof shall be corrected for a period of time extending back to the time when such inaccuracy began, if such time is ascertainable, and if not ascertainable, then for a period extending back one -half (1/2) of the time elapsed since the date of the last calibration, but in no event further back than a period of six (6) months. Any Customer may, at its option and its own expense, install and operate a check meter to check each meter installed by the District, but the measurement for the purpose of this Agreement shall be solely by the District's meters, except as in this section specifically provided to the contrary. All such check meters shall be of standard make and shall be subject at all reasonable times to inspection and examination by any employee or agent of the District, but the reading, calibration and adjustment thereof shall be made only by the Customer installing same, except during any period when a check meter may be used under specific written consent by the District for measuring the amount of Wastewater delivered into the System in which case the reading, calibration and adjustment thereof shall be made by the District with like effect as if such check meter or meters had been furnished or installed by the District. Section 4.08. UNIT OF MEASUREMENT. The unit of measurement for Wastewater delivered hereunder shall be one thousand (1,000) gallons, U.S. Standard Liquid Measure. - 12 - ARTICLE. V QUALITY AND TESTING Section 5.01. GENERAL. The Customers agree to limit their discharge into the System to wastes defined by the District as admissible discharges, and to prohibit entry into the System of any wastes that have the characteristics of prohibited discharges, also as defined by the District. Section 5.02. ADMISSIBLE DISCHARGES. Wastes discharged into the System shall consist only of wastes which the System is capable of handling, so that: (a) effluent from the System meets the current and future legal standards of the Texas Water Commission or of any governmental body having legal authority to set standards for such effluent; and (b) the System is not damaged to the extent to cause unnecessary repairs or replacements resulting in increased Operation and Maintenance Expense. Section 5.03. DISTRICT REGULATIONS. The District may, from time to time, after giving sixty (60) days notice to all Customers and Additional Customers, establish by regulation the quality of Wastewater which will qualify as admissible discharges and be accepted into the System from Customers and Additional Customers at the Points of Entry and to establish the quality of Wastewater which will qualify as prohibited discharges and not be accepted into the System. The District may establish standards which are stricter than those required from time to time by applicable law, rule or regulation by a 4 /5ths majority vote of the Board of Directors of the District; provided. however, the District may not establish any standards to require pretreatment of normal domestic wastewater unless such treatment is required by applicable federal or State law or regulation. The District shall immediately notify all Customers and Additional Customers of such regulations after they are adopted by the District. Each Customer and Additional Customer shall have one hundred and eighty (180) days after the date of adoption of any such regulations to bring the quality of its Wastewater into compliance with such regulation unless a shorter periods is required by applicable State or federal law or regulation. The District may also provide in such regulations for the testing of Wastewater delivered into the System. Such regulations may provide that the District may terminate service to any Customer or Additional Customer which continues to violate said regulations after being notified by the District in writing and given a reasonable period of time (not to exceed thirty (30 days) to correct such violation. The regulations shall establish reasonable procedures for terminating such service and shall make reasonable provisions for due process rights of the Customers and Additional Customers. The District may also establish, charge and collect a surcharge from any such Customer or Additional Customer for discharge of admissable discharges which, because of the excessive concentration of biochemical oxygen demand, suspended solids or other characteristic, are exceedingly difficult or expensive to treat, which surcharge shall be in addition to the Customer's or Additional Customer's Service Charge as described in Section 6.08. Section 5.04. INDUSTRIAL WASTES. The effects of certain types of industrial waste upon Wastewater and Wastewater treatment processes are such as to require that careful consideration be made of each industrial connection. This is a matter of concern both to the District and the Customers. Accordingly, the District, upon request by any Customer, will work jointly in processing applications for discharge of industrial waste into any sewers ultimately discharging into the System. Each Customer covenants that it will have in effect and will enforce an industrial waste ordinance acceptable to federal and State agencies or departments having lawful jurisdiction to set standards for waste discharges. - 13 - Each Customer will allow the District access to the Customer's records to gather information and data that will be useful to the District as statistical data for planning the operation, improvement and expansion of the System. ARTICLE VI FISCAL PROVISIONS Section 6.01. COST OF PHASE IA OF SYSTEM. (a) The District intends to construct Phase I of the System in two phases to be known as Phases IA and IB, as described in the Engineering Report. The parties recognize that Phases IA and IB of the System will be designed and advertised for bid by the District at separate times as described later in this section. The parties further recognize that although each Customer will not become fully liable for its pro rata share of the construction costs of the various phases until such time as construction bids are obtained by the District, that nevertheless the District has incurred or will incur Project Costs for design of the System, preparation of plans and specifications for construction of the System, and certain engineering, legal, administrative and other expenses included in the Project Costs of the System prior to the time that construction bids are accepted. The District has no source of funds to pay the Project Costs of Phase IA of the System other than those provided by the Customers. which such funds have previously been deposited to the District by the Customers as shown in Exhibit "B ". Project Costs for any funding required to be paid by all Customers shall be calculated as follows: (1) each Customer's share of Line Project Costs shall be determined by dividing the estimated Line Project Costs of Phase IA of the System to be incurred prior to the other Funding Dates by the number of LUEs of Total Reserved Line Capacity in Phase IA of the System and multiplying the result times the Customer's number of LUEs of Reserved Line Capacity in Phase IA of the System, (2) each Customer's share of Treatment Project Phase Costs of Phase IA of the System shall be determined by dividing the estimated Treatment Project Phase Costs of Phase IA of the System to be incurred prior to the other Funding Dates by the number of LUEs of Total Reserved Treatment Capacity in Phase IA of the System and multiplying the result times the Customer's number of LUEs of Reserved Treatment Capacity in Phase IA of the System and (3) each Customer's share of Treatment Project Common Facilities Costs shall be determined by dividing the Treatment Project Common Facilities Costs of Phase IA of the System by the total number of LUEs of Total Reserved Common Capacity of all Customers in Phase IA of the System and multiplying the result times the Customer's number of LUEs of Reserved Common Capacity in Phase IA of the System. (b) The District shall proceed to take all action necessary to acquire or construct Phase IA of the System, including obtaining appropriate easements, making appropriate surveys, obtaining appropriate permits and governmental approvals and taking all other necessary and proper actions. Plans and specifications for the contracts shown on Exhibit "D" have been reviewed by the District and the Customers. All other plans and specifications shall be submitted to the Customers for their comments which must received within thirty (30) days after receipt of same. The District shall make any adjustments to the plans and specifications which it deems appropriate thereafter. The District anticipates that after final plans and specifications have been prepared a period of thirty (30) days will be necessary in order to obtain approval by all appropriate regulatory bodies of the plans and specifications. After all such approvals have been obtained, the District shall proceed, as appropriate, to advertise for bids for construction of Phase IA of the System in two stages. The first stage - 14 - shall include all of Phase IA except for the construction of those interceptors upstream of Contract 21 (tunnel) and the construction of the wastewater treatment plant which comprise the second stage of Phase IA. The estimate of Project Costs of the two stages of Phase IA are set forth in Option 6A ofthe Engineering Report and are shown in Exhibit "C ". Upon receipt of the bids for the first stage of Phase IA, the District shall tabulate the bids and notify the Customers and the Technical Committee of the bids which have been received. The District shall notify the Customers and the Technical Committee, based on the Engineers' recommendation of the lowest and best bid, or bids, of the as- bid Project Costs of the first stage of' Phase IA of the System. The District shall then establish a Funding Date for the first stage of Phase IA of the System, which Funding Date shall be prior to the time that such construction bids for those contracts contained in the first stage of Phase IA of the System expire, but shall not be less than forty -five (45) days after the date the District notifies the Customers and the Technical Committee of the recommended low bid. Prior to advertising for bids for the second stage of Phase IA, the Customers shall obtain authorization for funding the estimated cost of such second stage of Phase IA. Upon receipt of the bids for the second stage of Phase IA of the System, the District shall tabulate the bids and notify the Customers and the Technical Committee of the bids which have been received. The District shall notify the Customers and the Technical Committee, based on the Engineers' recommendation of the lowest and best bid, or bids, of the as -bid Project Costs of the second stage of Phase IA of the System. If the as -bid Project Costs of the second stage of Phase IA do not exceed the estimated cost of construction of such second stage of Phase IA of the System as set forth in Option 6A of the Engineering Report and as shown on Exhibit "C" for which bids were received by more than ten (10) percent, then the District shall establish a Funding Date for the second stage of Phase IA of the System, which Funding Date shall be prior to the time that such construction bids for those contracts contained in the second stage of Phase IA of the System expire, but shall not be less than forty -five (45) days after the date the District notifies the Customers and the Technical Committee of the recommended low bid. If the as -bid project costs of the second stage of Phase IA exceeds the estimated cost of construction of such second stage of Phase IA of the system by more than ten (10) per cent, then within thirty (30) days after receiving such notice from the District, each Customer shall notify the District as to whether or not it desires the District to proceed with the construction of the second stage of Phase IA of the System. If any Customer elects not to authorize the District to proceed to acquire or construct the second stage of Phase IA, then the District shall not be obligated to so proceed and the District and the Customers shall be relieved from any further obligations one to the other under this Agreement and the District shall return any excess moneys in the Construction Fund which are not needed to pay Project Costs to each Customer as appropriate; provided, however, the District and the other Customers agree to use their best efforts to continue to proceed to construct the System without the declining Customer. If all Customers shall notify the District that they desire the District to proceed with the construction of the second stage of Phase IA of the System, the District shall thereafter establish a Funding Date for the second stage of Phase IA of the System, which Funding Date shall be prior to the time that such construction bids for those contracts contained in the second stage of Phase IA of the System expire, but shall not be less than forty - five (45) days after the receipt of notice from all Customers to proceed with the construction of the second stage of Phase IA of the System. (c) In order to obtain the Project Cost per LUE for Phase IA of the System, which shall be used in determining the amount of the Capacity Charge to be paid by a Category A Customer for Phase IA of the System and which shall be used in determining the amount of Bonds which must be issued for a Category B Customer for Phase IA of the System, Project Costs of each Phase IA of the System shall be divided into Line Project Costs, Treatment Project Phase Costs, and Treatment Project Common Facilities Costs. Each Customer's share of Line Project Costs in Phase IA of the System shall be determined by dividing the Line Project Costs - 15 - of Phase IA of the System by the number of LUEs of Total Reserved Line Capacity in Phase I of the System, and multiplying the result times such Customer's number of LUEs of Reserved Line Capacity in Phase IA of the System. Each Customer's share of the Treatment Project Phase Costs in Phase IA of the System shall be determined by dividing the estimated Treatment Project Phase Costs in Phase IA of the System by the Total Reserved Treatment Capacity of all Customers in Phase IA of the System and multiplying the result times the Customer's number of LUEs of Reserved Treatment Capacity in Phase IA of the System. Each Customer's share of Treatment Project Common Facilities Costs in Phase IA of the System shall be determined by dividing the estimated Treatment Project Common Facilities Costs in Phase IA of the System by the number of LUEs of Total Reserved Common Capacity in Phase IA of the System and multiplying the result times such Customer's number of LUEs of Reserved Common Capacity in Phase IA of the System. After the Funding Date, if the District, on the advice of the District's engineer, determines that its estimate of the cost of acquisition and construction of Phase IA of the System should be increased, it shall calculate the additional cost per LUE in the manner described above and shall promptly notify each Customer in writing of the additional amount that said Customer must pay to the District for deposit into the Construction Fund, the Operation Maintenance Reserve Fund and the Repair and Replacement Reserve Fund, as appropriate. Each Customer shall within ninety (90) days of receipt of such notice pay to the District the additional amount; provided that at the request of any Category B Customer which must pay an additional amount in excess of ten thousand (10,000) dollars which request must be in writing and received by the District at least sixty (60) days prior to the date such additional amounts are payable to the District, the District agrees that it will use its best efforts to issue Bonds on behalf of such Category B Customer to allow for the payment of such amounts; and provided further, that the failure in inability of the District to issue, sell and deliver such Bonds shall not relieve the Category B Customer from its obligation to pay the additional amount. Upon completion of acquisition or construction of Phase IA of the System and payment of all costs of acquisition and construction then due and owing, any remaining moneys in the Construction Fund shall be credited to the Customer's pro rata share of the costs of Phase IB of the System if then under construction, or returned to each Customer if Phase IB is not under construction or the Customer has no capacity in Phase IB. (d) If a Customer elects to be treated as a Category A Customer, it shall pay to the District a Capacity Charge equal to (1) such Customer's share of Line Project Costs determined by dividing the Line Project Costs of Phase IA of the System by the number of LUEs of Total Reserved Line Capacity in Phase IA of the System, and multiplying the result times such Customer's number of LUEs of Reserved Line Capacity in Phase IA of the System plus (2) such Customer's share of the Treatment Project Phase Costs for Phase IA of the System determined by dividing the Treatment Project Phase Costs in Phase IA of the System by the number of LUEs of Total Reserved Treatment Capacity in Phase IA of the System and multiplying the result time the Customer's number of LUEs of Reserved Treatment Capacity in Phase IA of the System plus (3) such Customer's share of Treatment Project Common Facilities Costs determined by dividing the Treatment Project Common Facilities Costs for Phase IA of the System by the number of LUEs of Total Reserved Common Capacity in Phase IA of the System and multiplying the result times such Customer's number of LUEs of the Reserved Common Capacity in Phase IA of the System. The Capacity Charge shall be paid on the Funding Date and shall be deposited by the District into the Construction Fund, the Operation and Maintenance Reserve Fund and the Repair and Replacement Reserve Fund, as appropriate. (e) Funding as provided in this section is subject to the following provisions: (1) It is estimated that reimbursement to be due Austin pursuant to Section 10.04 (b) is $7,150,000, and it is agreed that payment of such $7,150,000, of the amount to be paid by Austin on the Funding Date shall be 'deferred until completion of the Lake Creek Interceptor and conveyance thereof to the District according to the provisions of Section 10.04 (a) and (b) hereof, at which time - 16 - the amount of deferred payment above shall be credited to the reimbursement of Austin provided for in Section 10.04 (b). Provided however, that if the amount of reimbursement as agreed by the District and Austin to be due Austin is greater than the deferred sum, Austin will be credited with the deferred sum in partial reimbursement and upon completion of Phase IA, the District will, if needed, call for a funding pursuant to Section 6.01 (c), by the Customers of their pro rata share of the balance of such reimbursement due Austin, and, upon receipt of such funds, shall pay Austin the balance of the reimbursement due. If the actual amount of reimbursement due Austin is less than the deferred amount, an amount of the deferred payment equal to the actual amount of reimbursement due shall be credited to Austin's actual reimbursement due, and, upon completion of Phase IA, the remaining balance of Austin's deferred payment shall be paid by Austin into the Construction Fund and credited pursuant to the provisions of Section 6.01 (c). If Austin does not complete the Lake Creek Interceptor as provided for in Section 10.04 (a) within two years from the Funding Date, upon the expiration of such two year period, any deferred funding remaining unpaid shall immediately become due and payable by Austin to the District. (2) It is estimated that reimbursement to be due Round Rock pursuant to Section 10.05 (a) and (b) is $4,862,662, and it is agreed that payment of such $4,862,662 of the amount to be paid by Round Rock on the Funding Date shall be deferred until completion and conveyance of the land and facilities to the District according to the provisions of Section 10.05 (a) and (b) hereof, at which time the amount of deferred payment above shall be credited to reimbursement of Round Rock as provided in Section 10.05 (a) and (b). Provided however, that if the amount of reimbursement agreed by the District and Round Rock to be due Round Rock is greater than the deferred sum, Round Rock will be credited with the deferred sum in partial reimbursement and upon completion of Phase IA, the District will, if needed, call for a funding pursuant to Section 6.01 (c), by the Customers of their pro rata share of the balance of such reimbursement due Round Rock, and, upon receipt of such funds, shall pay Round Rock the balance of the reimbursement due. If the actual amount of reimbursement due Round Rock is less than the deferred amount, an amount of the deferred payment equal to the actual amount of reimbursement due shall be credited to Round Rock's actual reimbursement due, and, upon completion of Phase IA, the remaining balance of Round Rock's deferred payment shall be paid by Round Rock into the Construction Fund and credited pursuant to the provisions of Section 6.01 (c). If Round Rock fails to complete and comply with the provisions of Section 10.05 (a) and (b) within 6 months of the Funding Date, upon the expiration of such 6 month period, and deferred funding remaining unpaid shall immediately become due and payable by Round Rock to the District. (f) If a Customer elects to be treated as a Category B Customer, the District shall use its best efforts to issue Bonds on behalf of such Customer in the amount necessary to allow for a deposit of the Net Bond Proceeds in an amount equal to the sum of (1) such Customer's share of Line Project Costs determined by dividing the Line Project Costs of Phase IA of the System by the number of LUEs of Total Reserved Line Capacity in Phase IA of the System, and multiplying the result times such Customer's number of LUEs of Reserved Line Capacity in Phase IA of the System plus (2) such. Customer's share of the Treatment Project Phase Costs for Phase IA of the System determined by dividing the Treatment Project Phase Costs in Phase IA of the System by the number of LUEs of Total Reserved Treatment Capacity in Phase IA of the System and multiplying the result times the Customer's number of LUEs of Reserved Treatment Capacity in Phase IA of the System plus (3) such Customer's share of Treatment Project Common Facilities Costs of Phase IA of the System determined by dividing the Treatment Project Common Facilities Costs for Phase IA of the System by the number of LUEs of Total Reserved Common Capacity in Phase IA of the System and multiplying the result times the Customer's number of LUEs of Reserved Common Capacity in Phase IA of the System into the Construction Fund, the Operation and Maintenance Reserve Fund and the - 17 - Repair and Replacement Reserve Fund, as appropriate, and to allow for a deposit into the Debt Service Reserve Fund of the amount required to be deposited therein pursuant to the Bond Resolution. Such Category B Customer shall pay a Facility Charge to the District to meet the Annual Debt Service Requirement on the Bonds issued on behalf of such Customer. All Facility Charge payments shall be deposited by the District in the Debt Service Fund created by the Bond Resolution. Except as provided below, (1) the Facility Charge will be payable to the District in monthly installments, which shall be due and payable, in immediately available funds, on the last business day of each calendar month and (ii) the monthly Facility Charge shall equal the sum of (w) an amount equal to one - twelfth of the principal of and any redemption premium on Bonds which mature (or are to be redeemed) during the twelve months following such monthly payment date, plus (x) an amount equal to the amount of interest which will be due and payable on the Bonds on the next interest payment date divided by the number of months (or 30 -day periods) between the last succeeding interest payment date and the next preceding interest payment date, plus (y) any fees or expenses of the trustee, paying agent or registrar for the Bonds and plus (z) the amount required to restore any deficiency in the Debt Service Reserve Fund; provided that such Category B Customer shall pay as a special Facility Charge payment on the fifth business day prior to any date on which the District is required to pay principal, premium or interest on the Bonds, the amount, if any, necessary to cause the amount on deposit in the Debt Service Fund created under the Bond Resolution to equal the amount required to be paid to the owners of the Bonds by the District on the next succeeding payment date; and provided further that the obligation of such Category B Customer to pay the amounts described in clauses (w) and (x) above shall be offset by the respective amounts in the Principal Account and the Interest Account of the Debt Service Fund of such Customer. (g) A Customer, to the extent it is a Category B Customer, agrees that its obligation to pay the Facility Charge shall be absolute and unconditional, irrespective of any rights of set -off, diminution, abatement, recoupment or counterclaim the Customer might otherwise have against the District or any other person, and the Customer covenants not to seek and hereby waives, to the extent permitted by applicable law, the benefits of any rights which it may have at any time to any stay or extension of time for performance or to terminate, cancel or limit its liability to pay the Facility Charge. Each Category B Customer hereby agrees that the holders from time to time of the District's Bonds shall be entitled to rely upon the agreement of the Customer to pay the Facility Charge regardless of the validity of the remainder of this Agreement or any other agreement. (h) The preceding paragraph shall not be construed to release the District from the performance of any of its agreements contained in this Agreement or, except to the extent provided in this section, prevent or restrict any Category B Customer from asserting any rights which it may have against the District or any other person under this Agreement or under any provision of law or prevent or restrict such Customer, at its own cost and expense, from prosecuting or defending any action or proceeding against or by third parties or taking any other action to secure or protect its rights under this Agreement. (i) To the extent it elects to become a Category B Customer, a Customer recognizes that the Bonds issued by the District on its behalf will be supported by the pledge of the payment of the Facility Charge by the Customer under the terms of its agreement with the District. In order to enable the District to issue the Bonds, such Category B Customer agrees, if requested to do so by the District, to execute a separate agreement with the District, the owners of the Bonds or a trustee acting on behalf of the owners of the Bonds evidencing its unconditional obligation to pay the Facility Charge to enable the District to pay debt service on the Bonds issued by the District on behalf of the Customer. Such additional agreements shall in all respects be consistent with the requirements of this Agreement regarding the payment of the Facility Charge by the Customer. - 18 - (j) The District shall maintain separate accounts in the Construction Fund for each Customer to account for the Customer's pro rata share of the costs of Phase IA of the System. The District shall, with the advice of the Customer, invest the moneys in the Construction Fund in Eligible Securities. All income shall accrue to the benefit of such Customer and shall be paid to the Customer within fifteen (15) days after receipt by the District unless otherwise agreed by the District and such Customer. (k) Notwithstanding anything herein to the contrary, it is understood that Funding of Phase IA of the System shall occur in two stages as the District obtains bids for construction or otherwise acquires the System or parts thereof. The District, with the advice of the Technical Committee and the District's engineer. will establish, and from time to time revise, a budget showing the estimated expenditures of and need for funds to construct or otherwise acquire Phase IA of the System in order to provide the Customers with as much notice as reasonably possible as to when Fundings will occur and how much money will be needed from each Customer. It is understood that each Funding will be designed to provide the District with sufficient funds to enter into all Project Contracts, and pay all Project Costs, (including engineering and contingencies) related thereto, to continue prompt construction and acquisition of the System. Section 6.02. CONSTRUCTION OF PHASE IB OF THE SYSTEM. The District at its sole discretion, shall determine when to notify the District's engineers to proceed with the development of plans and specifications and construction of Phase IB of the System. The District shall give the Customers and the Technical Committee forty -five (45) days prior written notice of its intent to so advise the District's engineers. Any Customer or Customers may request in writing that the District proceed with design, construction, and acquisition of Phase IB of the System. Upon receiving such request, the District shall immediately notify all other Customers of such request and ask whether such other Customers desire the District to proceed with development of Phase I5. Within thirty (30) days after receiving such request, the District shall determine whether or not it will proceed with development of Phase IB and shall so notify the Customers and the Technical Committee. If requested by the Customer or Customers after the 'completion of Phase IA of the System, the District shall apply in its name for all necessary governmental approvals to acquire or construct Phase IB of the System or any part thereof. If the District elects not to proceed with development of Phase IB, then the Customer or Customers desiring to proceed with such development may proceed to design, acquire or construct at their sole expense their share of the capacity in Phase IB as provided herein. Subject only to the other provisions of this section, the District and the Customers agree to support the Customer or Customers designing and constructing such facilities in regard to obtaining necessary governmental approvals and in regard to all other matters related to design, construction and acquisition of said facilities by the Customer and the operation thereof by the District. Specifically, the parties agree that the Customer or Customers proceeding to implement all or a portion of Phase IB may apply for all necessary governmental approvals in the name of said Customer or Customers for their own benefit or as agent or agents of the District. Prior to commencement of such construction by a Customer, the District, with the advice of the Technical Committee, shall have the right to review and approve the plans and specifications for any such construction to ensure that such construction is compatible with the design standards and physical structure of the System, which approval shall not be unreasonably withheld or delayed. After approval os such plans and specifications, such construction shall conform thereto unless the District thereafter approves a change to the plans and specifications. The District shall have the right to inspect the construction during the progress thereof to ensure compliance with the approved plans and specifications. Upon completion of construction and approval thereof by the District, such facilities shall become a part of the System and the Customer or Customers shall be entitled to use said facilities. - 19 - If the District proceeds to design, acquire, or construct Phase IB of the System, then the provisions of Section 6.01 of this Agreement shall apply to the duties and responsibilities of the parties in regard to the design, acquisition and construction of Phase IB of the System in the same manner as applicable to the second stage of Phase IA of the System, except that "the second stage of Phase IA" in such Section 6.01 (b) and "Phase IA" elsewhere in Section 6.01 shall instead be "Phase'IB ". Each Customer's pro rata share of such amounts shall be payable to the District in the same manner as provided for Project Costs to be paid prior to the other Funding Dates for Phase IA of the System as described in Section 6.01(a). Notwithstanding anything herein or in Sections 6.01 or 11.03 to the contrary, however, it is specifically provided that if the recommended low bid for construction of Phase IB of the System ex- ceeds the estimated construction cost by more than ten (10) percent, then the Customers receiving Reserved Capacity in Phase IB of the System shall review the District's recommendation. Either of such Customers may decide to require the District to reject the bid and redesign or re- advertise the contract, In any event, the District shall be obligated to rebid the construction contract only one time. Thereafter, the District's recommendation shall be final and conclusive. Section 6.03. DEPOSITS ON FUNDING DATE. After the District obtains all funds on the Funding Date for any Phase of the System from the payment of Capacity Charges and from Net Bond Proceeds, the District shall deposit all of said funds into the Construction Fund, the Operation and Maintenance Reserve Fund and the Repair and Replacement Reserve Fund, as appropriate. Section 6.04. SERVICE CHARGE. Every Customer and Additional Customer of each Category (Categories A and B), shall be required to pay a monthly charge (the "Service Charge ") to meet the Annual Operation and Maintenance Expense Requirement. The rate used in determining the amount of the Service Charge shall be established by the Board of Directors of the District and shall be adjusted by said Board from time to time, and in any event at least annually, for all Customers and Additional Customers in order to recover the Operation and Maintenance Expenses of the System during any applicable period. The Service Charge shall be composed of two components, one representing those Operation and Maintenance Expenses which are incurred by the District regardless of the amount of actual use by any Customer or Additional Customer (the "Fixed Charges" and the other representing those Operation and Maintenance Expenses which are directly related to the amount of service actually provided by the District (the "Variable Charges ") which shall be all Operation and Maintenance Expenses other than the Fixed Charges. The rate for Fixed Charges shall be calculated by multiplying a Fixed Charge rate times the Reserved Capacity of each Customer and Additional Customer in the System and Variable Charges shall be calculated by multiplying a Variable Charge rate times the actual amount of Wastewater delivered to the System, expressed in U. S. gallons and determined in accordance with Article IV of this Agreement. Section 6.05. PAYMENTS BY CUSTOMERS AND ADDITIONAL CUSTOMERS FOR FUTURE SYSTEM CAPACITY. (a) All Customers shall be required to share in Project Costs of Expansions of the System if, and only to the extent that, those Customers request additional Reserved Capacity. A Customer which requests additional Reserved Capacity shall be treated as an Additional Customer for such purposes. However, if a Customer does not request additional Reserved Capacity in the Expansion its obligation to pay the Capacity Charge or Facility Charge will not be increased to reflect the additional Project Costs of the Expansion. (b) At such time as the District desires to acquire or construct an Expansion of the System for Additional Customers, it may enter into additional agreements with such Additional Customers, similar to this Agreement, whereby such Additional Customers may acquire Reserved Capacity in the System by payment of either a Capacity Charge or a Facility Charge, as appropriate, and by payment of the Service Charge all - 20 - in a manner consistent with that previously described herein for Phase I of the System. The parties recognize that the Bonds issued by the District for any Expansion of the System for Additional Category B Customers shall be supported by and be payable from solely the Facility Charges of the Additional Category B Customers under separate Contracts to be signed between the Additional Category B Customers and the District and the Customers shall in no way be responsible for payment of Facility Charges or debt service of Bonds issued to construct an Expansion of the System for the Additional Category B Customers. (c) After the Expansion of the System by the District to serve Additional Customers, each Customer and Additional Customer shall be required to pay a Service Charge calculated in accordance with Section 6.04 above. (d) Any Customer or Additional Customer which requires an Expansion of the System as a result of projected future needs or as a result of a Customer exceeding its discharge rate into the System as set forth in the Engineering Report shall request such Expansion in writing to the District and shall specify in such request the amount of capacity required in the Expansion. Upon receiving a request for Expansion of the System, the District shall, within five (5) days, contact all Customers and Additional Customers to determine whether or not such Customers and Additional Customers desire additional capacity in the Expansion. Any such other requests from the Customers and Additional Customers shall be provided in writing to the District within thirty (30) days after such Customer or Additional Customer receives such notice from the District. If the total of the requests is at least 1 MGD, then the District shall proceed as indicated below. If the total of the requests is less than 1 MGD, the District may deny the request or proceed as indicated below, at its discretion. After receipt of all such requests for Expansion of the System, the District shall determine what capacity in the System, the District shall determine what capacity in the System is presently being utilized by all Customers and Additional Customers. If less than eighty (80) percent of the then Total Reserved Capacity of the System is being utilized, the District need not commence the Expansion for the Customers and Additional Customers as requested by them immediately, but may defer the acquisition or construction of the requested Expansion to a later date to be determined by the District, but to be no later than the date at which time eighty (80) percent or more of the existing Total Reserved Capacity in the System is being utilized by the Customers and Additional Customers; provided that the District is able to find a Customer which is willing to lease its excess capacity in the System to such Additional Customer(s) under terms and at prices to be approved by the District. However, no Customer shall be required to lease its Reserved Capacity in the System. If no Customer is willing to lease such excess capacity or, in any event, once the District determines that eighty (80) percent or more of the existing Total Reserved Capacity in the System is being utilized, the District must commence the requested Expansion if the total requests are at least 1 MGD. If the District fails or is not obligated to commence the required Expansion as indicated herein, any Customer or Additional Customer requesting such Expansion may commence the Expansion at the sole cost of the Customer or Additional Customer and, upon completion of the Expansion, convey the Expansion to the District to own and operate on behalf of the Customer or Additional Customer making the Expansion. The District shall have the right to review and approve any construction of an Expansion by a Customer or Additional Customer. Section 6.06. CAPITAL RECOVERY FEE. (a) The parties recognize that certain costs of the facilities (as described in the Engineering Report) being acquired or constructed in Phase 1 of the System will be incurred because (1) such facilities are designed and built to serve the needs not only of the Customers of Phase I of the System, but are designed and will be constructed to benefit all Customers and Additional Customers of the System, or (2) are costs for facilities which the District is required to construct or acquire in order to accomplish Phase I of the System as a regional system. It is - 21 - recognized and agreed between the parties that these costs for facilities, referred to as the Common Facilities, include the following: (1) Phase IA Line Project Costs, including the amount paid to Austin for the Lake Creek Interceptor. (2) Phase IA Plant Site; (3) Phase IA Treatment Project Common Facilities Costs (4) Costs of obtaining any wastewater discharge permits necessary to acquire, construct, improve or operate Phase I of the System; provided, however, that in regards to obtaining wastewater discharge permits for Phase IB of the System, if more than two permits are obtained for Phase IB of the System, then all costs for permits for Phase IB over and above said two permits shall be Treatment Plant Common Facilities Costs only for purposes of computing the Capital Recovery Fee, and shall be considered as Treatment Plant Phase Costs for purposes of distributing said costs among the Customers; and (5) Such other items as determined by the District. (b) The parties recognize that the Customers, by paying the Project Costs of Phase IA of the System, will be funding the cost of the Common Facilities. The parties therefore agree that the District, prior to the time that it enters into agreements with Additional Customers, will establish a Capital Recovery Fee for Additional Customers a pro rata share of the cost of the Common Facilities. (c) The Capital Recovery Fee shall be calculated as follows: the District will determine the cost of each Common Facility, including an appropriate amount for Project Costs incurred by the District in the acquisition or construction of Phase I of the System which should be allocated to all Customers and all Additional Customers because such costs are related to implementing the System for the entire Brushy Creek Watershed as opposed to only benefiting specific Customers. In order to determine the Capital Recovery Fee per LUE for each Expansion, the District will divide the cost of the Common Facilities (increased by ten (10) percent each year, or part thereof, for inflation and carrying costs) by the number of LUEs in Phase I and the Expansion of the System. The resulting cost per LUE for all of the Common Facilities shall be used in determining the Capital Recovery Fee to be charged by the District per LUE of Reserved Capacity for any Additional Customer. The District shall, prior to agreeing to expand the System for Additional Customers, determine the Capital Recovery Fee in accordance with this formula and shall establish such a Capital Recovery Fee by appropriate action of the District's Board of Directors. If the total actual demand of the Reserved Capacity for all of the Additional Customers who participate in a given Expansion is less than the total Reserved Capacity provided in the Expansion, such Additional Customers shall pay on a pro rata basis, in proportion to the actual demand of the Reserved Capacity each of them acquires in the Expansion, the Capital Recovery Fees for the LUEs provided in the Expansion in excess of their actual demand of the Reserved Capacity in the Expansion. Additional Customers having rights to LUEs in the Reserved Capacity of the Expansion in excess of their actual demand in the Expansion may sell, transfer or assign their excess LUEs to other parties at their cost, plus interest at 10% per annum for inflation and carrying costs, subject to prior verification by the District that the price being charged per LUE does not exceed the amount authorized under the foregoing formula and subject to prior approval the District of the part to whom the LUEs are being assigned, which approval shall not be unreasonably withheld or delayed. - 22 - (d) In addition to all other charges previously described herein, at the time the District executes an agreement with any Additional Customers for Reserved Capacity in any Expansion of the System, the District shall require payment by the Additional Customer of the Capital Recovery Fee. The Capital Recovery Fee shall be paid to the District prior to the commencement of acquisition and construction of any Expansion of the System. Within thirty (30) days after receipt of the Capital Recovery Fee by the District, the District shall pay the moneys thus received to the Customers in the proportion that each Customer's Reserved Capacity of all Customers in Phase I of the System. (e) After such an Expansion, future Capital Recovery Fees shall be calculated and implemented in the same manner as previously described in this section except that Additional Customers that have previously paid a Capital Recover Fee shall be entitled to reimbursement from future Capital Recovery Fees on the same basis as the Customers. Section 6.07. DEFAULT (a) In the event any Customer or Additional Customer defaults in the payment of the Facility Charge or Service Charge required hereunder, the District shall immediately give notice of such default to such Customer or Additional Customer and other Customers or Additional Customers; provided, however, that nothing in this section shall prevent any Customer from paying under protest any amount alleged as owed by the District or prevent the District from accepting any payment even if less than the amount alleged by the District as owed by the Customer. Payment or receipt of any such disputed amount shall not be construed as a waiver of any right of the party making or receiving such disputed amount to contest such matter and to demand payment or receipt of a different amount. Thereafter, the defaulting Customer or Additional Customer shall take all appropriate steps to correct such default and shall correct such default within ten (10) days after receipt of such notice. Any past due amount shall be paid, together with interest at ten (10) percent per annum thereon, or the maximum legal rate of interest then in effect, whichever is lesser. In the event such default remains unremedied for a period of thirty (30) days from the date of receipt of notification of default, then the District may terminate service to such defaulting Customer or Additional Customer after providing ten days' written notice to such defaulting Customer or Additional Customer of its intention to so terminate service hereunder. If such default remains unremedied for a continuous period of ninety (90) days from the date of receipt of notification of default, then the District shall notify all Customers and Additional Customers of such fact and the District shall, after giving the defaulting Customer or Additional Customer ten (10) written notice, terminate the contract between the District and such a defaulting Customer or Additional Customer by delivery of a written notice to such Customer or Additional Customer. The Customers agree that the District shall have the right to so terminate this Agreement as to any defaulting Customer in the event such defaulting Customer is in default of any of its obligations hereunder as described in this section and the defaulting Customer, in the even of termination of its rights under this Agreement by the District as provided herein, waives any and all of its rights to seek any damages or other remedy against the District or any of the Customers or Additional Customers of the District or to claim any amounts as due and owing to it from the District or other Customers or Additional Customers wither from amounts then on hand or to be paid in the future to the District or such other Customers and Additional Customers. (b) It is specifically provided that regardless of any other provisions in this Agreement or in similar contracts executed between the District and Additional Customers, in the event a Category B Customer or Additional Category B Customer defaults in the payment of its Facility Charge, then the following shall occur: (1) The District shall immediately give written notice to such defaulting Category B Customer or Additional Category B Customer and to all other Customers and Additional Customers of such default. If such default is not fully remedied within ten (10) days after receipt of such notice by the defaulting party, - 23 - then the District shall immediately take all actions necessary and appropriate to cause such defaulting party to correct such default including pursuing all legal remedies such as mandamus of the officials of such defaulting party. (2) If such default remains unremedied for a continuous period of ninety (90) days from the date of receipt of notification of default, then the District shall notify all Customers and additional Customers of such fact and shall take all actions necessary to terminate service to such defaulting party. If the District terminates service to such defaulting Category B Customer or Additional Category B Customer and terminates the contract entered into between the District and such defaulting party, then the Reserved Capacity in the System of such defaulting party shall be owned by the District. The District may execute additional contracts with Customers, Additional Customers or other persons similar to this Agreement, which contracts would provide the District with the necessary revenues to pay the Annual Debt Service Requirement related to Bonds issued on behalf of such defaulting Category B Customer or Additional Category B Customer for the System and the District may reserve for any such part that enters into any such contract with it that portion of the Reserved Capacity in the System that was previously reserved for the defaulting Category B Customer or Additional Category B Customer. All Customers agree to cooperate with the District in enabling the District to enter into any such contracts in order to prevent a default in the payment of the debt service on Bonds issued by the District to acquire or construct the System. (c) Termination of the rights of a defaulting Customer shall not relieve the Customer from the performance of any of its obligations hereunder. Section 6.08. SURCHARGE. The Annual Operation and Maintenance Expense Requirement allocable to a Customer or Additional Customer may be increased by a surcharge as described in Section 5.03. In the event a Customer is assessed a surcharge, the District will bill such Customer for such surcharge monthly as determined by the District following the determination of the surcharge and such Customer shall pay such surcharge within ten (10) days of the receipt of any such bill. Any such surcharge collected by the District shall be applied by the District against the total cost of Operation and Maintenance Expense of the System. Section 6.09. MANAGEMENT FEE. It is agreed between the parties that, in addition to all other compensation or reimbursement authorized and required to be made to the District by the Customers as otherwise provided in this Agreement, the District shall receive annually on each February 1 a fee in the total aggregate amount from all Customers of twenty thousand (20,000) dollars per year to compensate the District for the increased administrative responsibility borne by the District in fulfilling its management obliga- tions under this Agreement. This shall include the $20,000 annual fee for 1988 which shall be paid to the District upon receipt of construction funding. The parties agree that such fee shall be a Project Cost of Phase IA of the System until the completion of Phase IA of the System and, in connection therewith, shall be considered a Line Project Cost. After completion of construction of Phase IA of the System, such fee shall be considered an Operation and Maintenance Expense of the System and shall be part of the Fixed Charges of the System. Money received by the District from such fee may be used for any lawful purpose. Section 6.10. PAYMENTS BY CUSTOMERS (a) Recognizing that the District will use payments received from each Customer to the extent such Customer is a Category B Customer to pay, secure and finance the issuance of the Bonds, it is hereby agreed that upon the effective date of this Agreement, each Customer, to the extent it is a Category B Customer, shall be unconditionally obligated to - 24 - pay the Facility Charge regardless of whether or not such Customer actually discharges Wastewater hereunder, whether due to Force Majeure or otherwise. (b) On or before March 15 of each year the District will furnish each Customer with an estimated schedule of monthly payments to be made by the Customer for the ensuing System Year. One or before June 1 of each year, the District shall furnish each Customer with a finalized schedule of the monthly payments to be made by such Customer to the District for the ensuing System Year. Each Customer hereby agrees that it will make such payments to the District on or before the last day of each month of such System Year. If a Customer at any time disputes the amount to be paid by it to the District, such Customer shall nevertheless promptly make the payment or payments determined by the District, and, if it is subsequently determined by agreement, arbitration, administrative agency or court decision that such disputed payments made by the Customer should have been less, the District shall promptly revise and reallocate the charges among all Customers and Additional Customers then being served by the District in such manner that such Customer will recover its overpayment together with interest thereon at reasonable rate to be determined by the District. (c) If a Customer's Facility Charge or Service Charge is redetermined as herein provided, the District will promptly furnish the Customer with an updated schedule of monthly payments reflecting such redetermination. (d) All interest income earned by the investment of any funds created in the Bond Resolution or any other funds related to the System shall be taken into account in determining the Facility Charge and the Service Charge. ARTICLE VII REQUIRED IMPROVEMENTS Section 7.01. DISTRICT TO DETERMINE REQUIRED IMPROVEMENTS. In the event that Required Improvements of the System are necessary in order to treat and dispose of waste adequately in accordance with the orders, rules, regulations or requirements of any regulatory body, other than the District, the District will determine the Required Improvement which is necessary. The District's determination that Required Improvements are necessary to enable the System to meet the waste treatment and disposal requirements of the Customers and Additional Customers shall be supported by a certificate from the District's consulting engineer which certifi- cate shall be submitted to the Customers and the Technical Committee. Section 7.02. DISTRICT'S DUTY TO MAKE REQUIRED IMPROVEMENTS. The District shall design, acquire, construct, own, operate, maintain and repair all Required Improvements. The District's obligation to acquire or construct any Required Improvement shall be contingent upon and subject to: (1) the District's obtaining sufficient funds to pay the Project Costs of the Required Improvement of the System including the payment of any Capacity Charges and the sale and delivery upon terms satisfactory to the District of the Improvement Bonds for any Required Improvement of the System; (2) the District's ability to obtain all sites, rights -of -way, easements, labor, equipment and materials required for acquisition or construction of any Required Improvement of the System; and (3) the District's obtaining all permits, approvals and licenses required to acquire or construct the Required Improvement and to operate the System thereafter, including waste discharge permits issued by the Texas Water Commission or its successors and approval of the project and Improvement Bonds issued therefor by the Texas Water Commission or its successors. - 25 - Section 7.03. CUSTOMER'S OBLIGATIONS IN EVENT OF REQUIRED IMPROVEMENT. (a) In the event the District determines that a Required Improvement is necessary, it shall notify all Customers, Additional Customers and the Technical Committee in writing of such fact. Such notice shall specify a date by which such Customer or Additional Customer shall be liable for contribution of its share of all funds necessary for acquisition or construction of the Required Improvement, either by way of a Capacity Charge therefor or by the District's issuance of Bonds therefor on behalf of such Customer or Additional Customer. The date so specified shall be not less than forty -five (45) days after such notice is mailed. Such notice shall include the estimated total Project Costs of the Required Improvement, the estimated Project Cost of the Required Improvement per LUE, and the number of LUEs for which each Customer and Additional Customer is responsible. At least thirty (30) days prior to such date, each Customer shall notify the District as to whether it desires to be treated as a Category A Customer or (Additional Category A Customer) or Category B Customer (or Additional Category B Customer) for the purposes of such Required Improvement. (b) In the event the Customer elects to be treated as a Category A Customer (or Additional Category A Customer) for purposes of such Required Improvement, it shall pay a Capacity Charge to the District by the date specified in the notice, which Capacity Charge shall be determined in the manner described in Article VI. (c) In the event the Customer elects to be treated as a Category B Customer (or Additional Category B Customer) for purposes of the Required Improvement, the District shall use its best efforts to issue Improvement Bonds on behalf of the Customer in an amount sufficient to provide from the Net Bond Proceeds the amount sufficient to pay the Customer's share of the Project Costs of the Required Improvement in the manner described in Article VI. (d) If, thereafter, the estimated costs of the Required Improvement increase, the District shall notify the Customers and the Technical Committee of such fact in the same manner as provided in Section 6.01 hereof in connection with the acquisition or construction of Phase IA of the System and the Customer shall be required to provide additional Capacity Charge payments or be responsible for additional Improvement Bonds, as appropriate, in the same manner as provided in Section 6.01 hereof in connection with the acquisition or construction of Phase IA of the System. (e) The Category B Customers shall thereafter be responsible for payment of any Facility Charge, if appropriate, and any Service Charge related to the Required Improvement in the same manner as provided in Article VI hereof. ARTICLE VIII GENERAL PROVISIONS Section 8.01. OBLIGATIONS OF CUSTOMERS. Unless otherwise specifically provided in writing by subsequent agreement between the District and any Customer, the District shall never have the right to demand payment by a Customer of any obligation assumed or imposed on it under and by virtue of this Agreement from funds raised or to be raised by taxation, it being expressly understood by the parties hereto that all payments due by the Customers hereunder are to be made from the revenues and income received by each Customer from its waterworks and sanitary sewer systems. Section 8.02. PAYMENTS TO CONSTITUTE OPERATING EXPENSES OF CUSTOMER. Each Customer represents and covenants that the services to be obtained pursuant to this Agreement are essential and necessary to the operation of the Customer and its own Wastewater facilities, and that all payments to be made hereunder by it will constitute reasonable and - 26 - necessary "operating expenses" of the Customer's waterworks and sanitary sewer systems, within the meaning of Article 1113, Vernon's Texas Civil Statutes, if appropriate, and the provisions of all ordinances authorizing the issuance of all bonds of the Customer which are payable from revenues of the Customer's waterworks and sewer systems. Section 8.03. CUSTOMER TO ESTABLISH ADEQUATE RATES. Each Customer agrees to establish and collect such rates and charges for its water works and Wastewater services to be supplied by its system as will make possible the prompt payment of all expenses of operating and maintaining its system including the payments contracted hereunder,and the prompt payment of the principal of and interest on its obligations, if any, payable from the revenues of its waterworks and Wastewater systems. Section 8.04. MANDAMUS AND OTHER REMEDIES AGAINST CATEGORY B CUSTOMERS. To the extent the Customer is a Category B Customer, the parties recognize that the District will be issuing its Bonds on behalf of such Customer and will pledge the revenues from the Facility Charge to secure payment of principal of, premium, if any, and interest on the Bonds. Therefore, the parties agree that, in addition to all other remedies provided herein or at law or in equity, each Category B Customer agrees that the District or any other Customer shall be entitled to a writ of mandamus issued by a court of competent jurisdiction compelling and requiring the Category B Customer to take all actions covenanted herein and to make prompt payment of the Facility Charge and other payments contracted to be made herein and to observe and perform the covenants, obligations and conditions imposed in this Agreement. Section 8.05. OTHER REMEDIES. The District also agrees that each Customer shall be entitled to a writ of mandamus or injunctive relief . from a court of competent jurisdiction compelling and requiring the District to perform the covenants, obligations and conditions imposed upon the District in this Agreement. Section 8.06. USE OF PUBLIC PROPERTY. By these presents, each Customer, to the extent capable under existing law, authorizes use by the District of streets and general utility or sewer easements of the Customer for construction, operation and maintenance of the System, so long as such use by the District is in compliance with the terms of any easement utilized by the District and does not interfere with any lawful use by the Customer and subject to all of the Customer's ordinances, rules and regulations respecting the manner of such use and restoration of lands, pavement or improvements resulting from exercise of the rights provided in this section, including the cost of relocation of any facilities located within any such easement as an expense of the System. The District will cooperate with each Customer in the timing, planning and installation of the System to be constructed and installed by the District. Section 8.07. USE OF REVENUES OF SYSTEM. All revenues received from any source whatsoever by the District by reason of its ownership of this System shall, to the extent permitted by law, be credited to the funds of the System as established herein and in the Bond Resolutions and, to the extent required or permitted, be credited to the appropriate Customer. To the extent permitted by law, if the District receives income from the use of treated Wastewater, prior to its discharge into a public stream of the State of Texas, the District will apply said income against the Operation and Maintenance Expense of the System. No funds derived from the Customers and Additional Customers shall ever be used for the benefit of any project the revenues of which have been excluded from the pledge for payment of the Bonds hereunder or which may be so excluded in the future. Section 8.08. FORCE MAJEURE. In case by reason of "Force Majeure" any party hereto shall be rendered unable wholly or in part to carry out its obligations under this Agreement, then if such party shall give notice and full particulars of such "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, with the exception of the - 27 - obligation of a Category B Customer to pay Facility Charges, if appropriate, shall be suspended during the continuance of the inability then claimed, but for no longer period, and any such 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, lightening, earthquakes, fires, hurricanes, storms, floods, washouts, droughts, arrests, restraint of government and people, civil disturbances, explosions, breakage or accidents to machinery, pipelines or canals, partial or entire failure of water supply and inability on the part of such Customer to provide water necessary for operation of its water and Wastewater system hereunder or of the District to receive Wastewater on account 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 8.09. INSURANCE. The District will, and the Bond Resolution will contain appropriate provisions requiring the District to, carry insurance for purposes including, without limitation, those purposes contemplated in Sections 1.01 (cc) and (hh) and in amounts which would ordinarily be carried by a privately owned utility company under contract to perform services similar to those undertaken by the District in the Agreement. Such provisions will be so designed as to afford protection not only for the owners of the Bonds but to assure and facilitate, to the extent feasible and practicable, the restoration of damaged or destroyed properties and to minimize the interruption of service to the Customers and others. Section 8.10. REGULATORY BODIES. This Agreement shall be subject to all valid rules, regulations and laws 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 8.11. DISTRICT CONTRACTS WITH OTHERS. The District reserves the right to contract with other persons, natural or corporate, private or public, to perform services similar to those to be performed under this Agreement or other services; provided, however that no contract will be made for service within a Customer's limits or within the extraterritorial jurisdiction of any Customer, if appropriate, as defined, in Article 970a, Vernon's Annotated Civil Statutes, on the date of such contract, without the District first allowing such Customer a reasonable opportunity (not to be less than three months) to agree to provide Wastewater service to any such person. Section 8.12. ADDITIONAL CAPACITY AND FACILITIES. As the responsible agency for the establishment, administration, operation and maintenance of the System, the District will, from time to time, as provided previously herein, determine when it is necessary to provide additional facilities to receive, transport, treat and dispose of additional Wastewater of the Customers and any Additional Customers. In making the determinations called for herein, District covenants that such determinations will be made only after detailed studies of statistical data available as to the need and feasibility have been made and after consulting with consulting engineers and financial advisors. Each Customer will be kept advised at all times of planning and proposed development of the System. Section 8.13. CONTRACTS WITH OTHERS. Each Customer shall have the right to enter into contracts with other persons natural or corporate, private or public, to receive Wastewater from such persons. Each Customer covenants that it will advise the District of all such written - 28 - contracts and will, if requested by the District, furnish the District with a list of all customers other than retail, residential customers. Section 8.14. ANNUAL REPORT AND AUDIT OF SYSTEM. The District shall, at the close of each Fiscal Year, cause to be prepared an annual report and audit of the System. Such report shall contain such matters and information as may be considered necessary and useful by the District and as customarily supplied in an audit performed by and certified by a nationally recognized independent public accounting firm. A copy of the annual report and audit and accompanying management letter shall be promptly provided to each Customer and the Technical Committee. Such report shall be prepared in conformity with applicable law. Section 8.15. GOVERNMENTAL REGULATIONS. In each instance herein where reference is made to a federal or State regulation, it is the in- tention of the parties that at any given time the then current edition of any such federal or State regulation shall apply. New standards shall be adopted by the District which are in compliance with applicable State and federal laws and any valid rules and regulations issued pursuant thereto. Section 8.16. OPERATION OF THE SYSTEM. The District covenants that it will operate the System in accordance with accepted good business and engineering practices and in accordance with requirements of the Clean Water Act and the Texas Water Code, as amended, and as said laws may be amended in the future, and any rules and regulations issued and to be issued by appropriate agencies in the administration of said laws. The Customers and the District agree that their obligations hereunder shall include compliance with the requirements made under said laws, and any rules and regulations issued pursuant thereto. Section 8.17. REGIONAL DESIGNATION. The parties recognize that the District has been designated as the entity to provide regional Wastewater system services to the upper Brushy Creek watershed by the Texas Water Development Board pursuant to the powers previously vested in the Board by Chapter 26, Texas Water Code. The District covenants that it will faithfully and diligently perform its duties as the regional provider of Wastewater services in the upper Brushy Creek watershed as provided in Chapter 26, Texas Water Code. Section 8.18. NO ADDITIONAL WAIVER IMPLIED. No waiver or waivers of any breach or default (or any breaches or defaults) by any party hereto of any term, covenant, condition, or liability hereunder, or of performance by the other parties of any duty or obligation hereunder, shall be deemed or construed to be a waiver of subsequent breaches or defaults of any kind, under any circumstances. Section 8.19. ADDRESSES AND NOTICE. Unless otherwise provided in the Agreement, any notice, communication, request, reply, or advice (herein severally and collectively, for convenience, called "Notice ") herein provided or permitted to be given, made or accepted by any party to the others must be in writing and may be given or be served by depositing the same in the United States mail postpaid and registered or certified and addressed to the party to be notified, with return receipt requested, or by delivering the same to an officer of such party, or by prepaid telegram, when appropriate, addressed to the party to be notified. Notice deposited in the mail in the manner hereinabove described shall be conclusively deemed to be effective, unless otherwise stated in this Agreement, from and after the expiration of four (4) days after it is so deposited. Notice given in any other manner shall be effective only if and when received by the party to be notified. For the purpose of notice, the addresses of the parties shall, until changed as hereinafter provided, be as follows: If to the District, to: Brushy Creek Water Control and Improvement District No. 1 of Williamson and Milam Counties P. 0. Box 882 Taylor, Texas 76574 Attention: President, Board of Directors - 29 - If to Austin, to: City of Austin P. 0. Box 1088 Austin, Texas 78767 -8828 Attention: Director, Water and Wastewater Utilities. If to Round Rock, to: City of Round Rock 221 E. Main Street Round Rock, Texas 78664 Attention: City Manager The parties 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' written notice to the other parties. Section 8.20. MODIFICATION. This Agreement shall be subject to change or modification only with the mutual consent of the governing bodies of each of the parties hereto, but the parties recognize that the Bond Resolution may contain covenants by the District not to consent to certain changes or modifications of this Agreement. Section 8.21. ASSIGNABILITY. This Agreement shall not be assignable by any party without the prior written consent of the other parties, which consent shall not be unreasonably withheld or delays. Section 8.22. 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 the Agreement to other persons or circumstances shall not be affected thereby. Section 8.23. MERGER. This Agreement constitutes the entire agreement between the parties relative to the subject matter thereof. There have been and are no agreements, covenants, representations or warranties between the parties other than those expressly stated herein or expressly provided for herein. ARTICLE IX DISTRICT SYSTEM BUDGET Section 9.01. FILING WITH CUSTOMERS. Not less than forty (40) days before commencement of the second Fiscal Year and not less than forty (40) days before the commencement of each Fiscal Year thereafter while this Agreement is in effect, District shall cause to be prepared and filed with the Technical Committee and each Customer and Additional Customer its tentative budget for the operation of the System for the next ensuing Fiscal Year. If no protest or request for a hearing on such tentative budget is presented to District within twenty five (25) days after such filing of the tentative budget by one or more Customers or Additional Customers, the tentative budget for the System, when adopted by the District's Board of Directors, shall be considered for all purposes as the "System Budget" for the next ensuing Fiscal Year. But if a protest or request for a hearing is duly filed, it shall be the duty of the District to fix a date and time for a hearing on the tentative budget before the Board of Directors of the District and the District shall so advise the Technical Committee, all Customers and Additional Customers in writing. After said hearing, the Board of Directors of District may adopt the budget or make such amendments thereof as to it may seem proper. The budget thus approved by the Board of Directors of the District shall be the System Budget for the next ensuing Fiscal Year. - 30 - ARTICLE X OTHER MATTERS Section 10.01. AGREEMENT CONCERNING PERMITS FOR EXISTING UTILITY SYSTEMS. By the execution of this Agreement, the Customers and the District agree that they will not protest or take any action to prevent or delay any permit amendment, renewal, extension. temporary order or other authorization sought by a Customer to enable the Customer to continue operation of its existing Wastewater treatment plants. Section 10.02. INTERIM CAPACITY IN ROUND ROCK WASTEWATER TRANSPORTATION AND TREATMENT SYSTEM. The District agrees to use its best efforts to negotiate and execute an agreement with Round Rock to obtain wastewater transportation and treatment capacity and services in the Round Rock wastewater transportation and treatment system, to provide interim wastewater treatment and disposal service to Austin pending construction of the District's proposed wastewater plant to be constructed in Phase IA and to provide interim wastewater transportation capacity pending the completion of Phase IA of the System.. Section 10.03. OWNERSHIP OF SYSTEM. (a) Notwithstanding anything to the contrary hereinbefore provided, to the extent a Customer has been credited with Capacity Charge payments as shown on Exhibit "B ", and hereafter agrees to pay Capacity Charges as a Category A Customer, then such Customer shall own an undivided interest in the Phase of the System being acquired or constructed in the ratio that such Customer's Reserved Capacity purchased by such payments in that Phase of the System bears to the Total Reserved Capacity of that Phase. Such undivided interest shall be represented by the right of the Customer to deliver Wastewater to the District for collection and treatment as provided in this Agreement. In such event, the Customer designates the District as the sole and exclusive manager and operator of the System under the provisions of this Agreement for the longer of the term of this Agreement or so long as any Bonds or Additional Bonds issued by the District remain outstanding. As manager and operator, the District is authorized to enter into all contracts necessary or convenient to perform its responsibilities, including contracting with other persons to perform such functions on behalf of the District. Further, in such event, wherever this Agreement refers to the District as the owner or operator of the System, such rights shall be construed to mean the right of the District to be the sole and exclusive manager and operator of such Customer's undivided interest in the System. (b) Notwithstanding anything to the contrary hereinbefore provided, to the extent a Customer agrees to pay Facility Charges as a Category B Customer, then so long as any Bonds or Additional Bonds issued by the District on behalf of such Customer remain outstanding, the District shall own and undivided interest in the Phase of the System being acquired or constructed in the ration that such Customer's share of the Reserved Capacity purchased by such payments in that Phase of the System bears to the Total Reserved Capacity of that Phase. Such undivided interest shall be utilized solely to provide Wastewater collection and treatment services to such Customer as provided herein. Upon payment of all principal. interest and other charges related to such Bonds and Additional Bonds by such Customer (it being understood that such payments constitute installment sales of the District's undivided interest in the System),' the District shall convey such undivided interest to the Customer. In such event, if other Bonds or Additional Bonds issued by the District on behalf of other Customers or Additional Customers remain outstanding. the Customer designates the District as the sole and exclusive manager and operator of the System under the provision of this Agreement for the longer of the term of this Agreement or so long as any Bonds or Additional Bonds issued by the District remain outstanding. As manager and operator, the District is authorized to enter into all contracts necessary or convenient to perform its functions, including contracting with other persons to perform such functions on behalf of the District. Further, in such event, whenever this Agreement refers to the rights of the District as the owner or operator of the System, such - 31 - rights shall be construed to mean the right of the District to be the sole and exclusive manager and operator of the Customer's undivided interest in the System. (c) Pursuant to Resolution dated August 20, 1987, Williamson County Municipal Utility District No. 2 (MUD 2) gave notice to the District that MUD 2 elected not to authorize the District to proceed to acquire or construct Phases IA and IB of the System pursuant to that certain Wastewater Disposal Contract between the District, Austin, Round Rock, MUD 2 and MUD 3, dated December 16, 1985 ( "Contract ") thereby relieving itself, the District and the other Customers of any further obligation one to the other under such Contract. The District has received $984,361.25 in funding from MUD 2 under such Contract and has returned to MUD 2 excess moneys in the Construction Fund pursuant to such Contract and it is recognized that MUD 2 shall have no rights or obligations under this Agreement. (d) Pursuant to Section 6.01 (b) of the Contract the District has or shall return excess monies remaining in the Construction Fund in the name of Williamson County Municipal Utility District No. 3 (MUD 3) to MUD 3 and MUD 3 shall have no rights or obligations under this agreement. Section 10.04. PROVISIONS APPLICABLE TO AUSTIN. (a) It is expressly understood and agreed that Austin intends to acquire and construct at its sole expense and option that portion of the Lake Creek Interceptor from its uppermost point to the Davis Springs Transfer Line as described in the Engineering Report, including all necessary land, easements, and right -of -way therefor, and, after completion of said facilities, shall, if allowed by applicable law, convey said facilities along with the land, easements, or right -of -way upon which the facilities are located to the District which shall therefore own and operate said facilities as part of the System. (b) Upon completion of the Lake Creek Interceptor and conveyance thereof to the District, the District agrees to reimburse Austin for the costs thereof plus interest on said costs at a rate of interest equal to the net effective interest rate on bonds issued by or on behalf of Austin to pay for such costs with interest accruing from the date or dates of each payment of such costs by Austin to the date of payment therefor by the District. Such reimbursement shall be made in accordance with the provisions of Section 6.01 (e) (1). (c) Notwithstanding anything to the contrary hereinbefore provided, it is specifically agreed that Austin may, in the event that use of the existing 1.3 MGD wastewater treatment plant owned by Williamson County Municipal Utility District No. 1 located at Anderson Mill subdivision is permanently discontinued, acquire 1.3 MGD of additional capacity in an Expansion of the System without being required to pay any Capital Recovery Fee as otherwise provided in Section 6.06. Section 10.05. PROVISIONS APPLICABLE TO ROUND ROCK. (a) It is expressly understood and agreed that Round Rock has acquired the plant site for the District's Wastewater treatment plant at great expense and Round Rock hereby agrees, if allowed by applicable law, to convey to the District ownership of such plant site free and clear of all liens and encumbrances except as otherwise agreed to by the District. The purchase price shall be twenty thousand (20,000) dollars per acre for approximately twenty -five (25) acres as described in Exhibit "E" attached hereto. Such sale shall be consummated upon receipt by the District of the funding for the first stage of Phase IA of the System. (b) The District agrees also to reimburse Round Rock for any and all out -of- pocket expenses incurred by Round Rock for design, acquisition or construction of facilities including access easement to the plant site as described in Exhibit "F" attached hereto, for Phase IA of the System (except for costs of acquiring any governmental permits), such reimbursement to occur upon conveyance of such easement and facilities. -32- Such reimbursement shall include interest on such costs calculated at a rate of interest equal to the net effective interest rate on bonds issued by Round Rock to pay such costs with interest accruing from the date or dates of each payment of such costs by Round Rock to the date of payment therefor by the District. Such reimbursement shall be made in accordance with the provisions of Section 6.01 (e) (2). (c) Notwithstanding anything to the contrary hereinbefore provided, it is specifically agreed that Round Rock may, in the event it permanently discontinues use of its existing 3 MGD wastewater treatment plant located at its existing site on Austin Avenue in Round Rock, acquire 3 MGD of additional capacity in an Expansion of the System without being required to pay any Capital Recovery Fee as otherwise provided in Section 6.06. (d) It is expressly understood and agreed that Round Rock has constructed wastewater treatment improvements on the plant site referred to in 10.05 (a) above and that it will continue to operate and maintain said facilities for a period of time. The District shall lease to Round Rock approximately 1.582 acres as described in Exhibit "G" for $1.00 per year. Round Rock shall have access to and through the entire 25 acre tract and access easement so long as Round Rock continues to operate and maintain its facilities. Section 10.06. PROVISIONS APPLICABLE TO FERN BLUFF MUD AND MILBURN INVESTMENTS, INC. It is understood and acknowledged by the parties that Milburn Investments, Inc. ( "Milburn ") has constructed certain wastewater facilities for the provision of wastewater service by the District to Fern Bluff Municipal Utility District ( "Fern Bluff ") through Austin's participation in the Regional System. The facilities ( "Fern Bluff Facilities ") consist of the Onion Creek Lift Station described in the plans and drawings and specifications for District Contract No. 4, the Onion Creek 16 -inch Force Main generally paralleling the eastern boundary of Tonkawa Springs, and the Onion Creek 24 -inch Interceptor described in the plans and drawings and specifications of the District's Contract No. 5 - Phase I. Milburn agrees to convey and the District agrees to purchase the Fern Bluff Facilities at such time that the District has received funds from the Customers for Phase IA of the System pursuant to Section 6.01(b) of this Agreement, provided that the District's purchase of the Fern Bluff facilities is and shall be conditioned upon compliance by Milburn with the terms and conditions set forth in that certain Agreement Regarding Construction, Ownership, Purchase and Use of Specific Wastewater Transportation Facilities, dated October 15, 1986. The purchase price of the Fern Bluff Facilities shall equal seventy percent (70 %) of the costs approved by the District for constructing the Fern Bluff Facilities. The purchase price will consist of the costs of engineering, including design, construction administration, construction staking and resident project representation; construction costs; and easements including costs of acquisition of such easements. Subject to the condition set forth above regarding compliance with the terms and conditions of the October 15, 1986 agreement, the closing of the purchase and sale shall be within thirty (30) days after the occurrence (1) the District's receipt of the funding for the first stage of Phase IA of the Regional System and (2) the completion of an audit of the purchase price. At such closing the District shall pay the purchase price to Milburn and Milburn shall convey title to the Fern Bluff Facilities to the District along with any warranties or other guarantees. The conveyance shall be free and clear of all liens and encumbrances. ARTICLE XI TECHNICAL COMMITTEE Section 11.01. COMPOSITION OF TECHNICAL COMMITTEE. There is hereby created a Technical Committee to be composed of the following: (a) Two representatives appointed by Austin: (b) Two representatives appointed by Round Rock; and (c) One representative appointed by the District. - 33 - The governing bodies of the Customers shall each appoint their representatives (and alternate representatives to serve in the absence of the Customer's representatives) to the Technical Committee within ten (10) days after execution of this Agreement, and shall immediately notify the District of such appointment. The District shall, within ten (10) days thereafter, appoint its representative (and alternate representative to serve in the absence of the District's representative) to the Technical Committee and shall promptly notify all Customers of the representatives (and their alternates, it being understood that there may be more than one alternate for each representative) initially comprising the Technical Committee. Each representative (or alternate representative), of a Customer or the District shall serve at the will of the governing body which the person represents. Upon the death, signation or revocation of the power of such representative (or alternate representative), the governing body of the appropriate entity shall immediately appoint a new representative (or alternate representative) to the Technical Committee. Section 11.02. ORGANIZATION OF THE TECHNICAL COMMITTEE. The Technical Committee, shall, within ten (10) days after the appointment of all representatives thereto, meet at a time and place established by the District's representative to the Technical Committee. At such meeting, the Technical Committee shall elect one of its members as chairman to preside over the meetings and shall elect another member as secretary to keep records of the business and actions of the Technical Committee. The Technical Committee may establish such other offices as it may deem proper. The Technical Committee may take any other actions necessary for the establishment of rules and procedures for the efficient and economical operation of the Technical Committee, including, but not limited to, rules governing future election and terms of office of officers, meeting dates, and other matters pertinent to the functioning of the Technical Committee. Section 11.03. ACTION OF THE TECHNICAL COMMITTEE. No action of the Technical Committee is valid unless such action is approved at a meeting of the Technical Committee by the affirmative vote of a majority of the members of the Technical Committee. Section 11.04. RESPONSIBILITY OF TECHNICAL COMMITTEE. The Technical Committee shall be responsible for: (a) Reviewing plans and specifications for, and work performed under, Project Contracts; (b) Reviewing and recommending for approval to the District of the award of or changes in Project Contracts; (c) Submitting recommendations to the District as to operating budgets for the System and rates for service by the System; (d) Reviewing changes to the Engineering Report; and (e) Reporting to the District on any other matters which may be referred to the Technical Committee by the District or any Customer. ARTICLE XII SUCCESSION TO RIGHTS AND PROPERTIES ACQUIRED PURSUANT TO PRIOR CONTRACT Section 12.01. PRIOR CONTRACT. All rights and properties acquired pursuant to the Contract dated December 16, 1985 are now hereby held and shall be maintained pursuant to the terms and provisions of this Agreement. - 34 - ATTEST: e Roscoe Conoley Secretary (SEAL) ATTEST: AL! J f nne Land, C 7 y Secretary (SEAL) ARTICLE XIII EFFECTIVE DATE AND TERM OF AGREEMENT Section 13.01. EFFECTIVE DATE. This Agreement shall become effective upon execution by the District and all Customers and such fact shall be communicated in writing to the Customers by the District. This Agreement shall constitute the sole and only agreement between the Customers and the District regarding Wastewater disposal services and the Customers hereby recognize and affirm their responsibility to make the payments required hereunder. Section 13.02. TFRM OF AGREEMENT. This Agreement shall continue in force and effect from the effective date hereof for a period of forty (40) years, and thereafter shall continue in effect until any Bonds, or Bonds issued to refund same, if any, have been paid in full. The Customers shall have the right to the continued performance of services provided hereunder for the useful life of the System after amortization of the District's investment in the System, upon payment of charges by the Customers, reduced to take into consideration such amortization. This Agreement is dated as of the �� day of r zic 1988, and 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. BRUSHY CREEK WATER CONTROL AND IMPROVEMENT DISTRICT NO. 1 OF WILLIAMSON AND MILAM COUNTIES By CITY OF ROUND ROCK By: - 35 - Dan Mize President Mike Robinson Mayor ATTEST: James E. Aldridge, City Clerk (SEAL) CITY OF AUSTIN By: - 36 - Jo ar Acting City Manager CUSTOMER Phase 1A Phase 1B TOTAL 1. CITY OF AUSTIN Exhibit "A" SUMMARY: Option hA WASTEWATER DISPOSAL AGREEMENT Phases 1A and 1B Reserved Capacity Line 27,500 0 27,500 Treatment 14.285 13,215 27,500 Common 27,500 0 27,500 2. CITY OF ROUND ROCK Line Treatment Common 4,900 0 4,900 Line 32,400 Treatment 14.285 Common 32,400 0 4,900 4,900 4,900 0 4,900 0 18,115 0 32.400 32,400 32,400 Exhibit "8" CONTRIBUTION TOTAL PAYMENTS PREVIOUSLY RECEIVED AUSTIN _BY_ REGIONAL___ Initial Funding Line 2,063,773.19 368.365.71 782,212.75 3.214,331.65 'Treatment 757.091.00 0 451,134.00 1,210,225.00 Common 35 021.71 6240.21 0 __41.261_.92 Option 6A WASTEWATER DISPOSAL AGREEMENT Capacity Charge Payments Previously Received Total Initial Funding 2,857,885.90 374,605.92 1,233,346.75 4,465,838.57 CONTRIBUTION TOTAL TOTAL PROJECT_COSTS , AUSTIN__ ROUND_ROCK BY OTHERS REGIONAL Line 25.382.500 4.522,700 782,213 30.687,413 Option 6A Exhibit "C" WASTEWATER DISPOSAL AGREEMENT Total Project Costs Treatment 5.128,315 0 451,134 5,579,449 Common _2,200,000 _39000 0 _2,592.000 CURRENT PROJECT COSTS 32.710,815 4.91 1,233,347 38,858,862 Less Credits and Reimbursements [ 7,1_10,000] [4,862 C12,012 662] NET PROJECT COSTS 25.560.815 52.038 26.846.200 Less Initial Funding C_2,857,886_] C 374 6067 C_1_233347] C 4 CONSTRUCTION FUNDING First Stage 11.081.349 C1.660.268] 9.421.081 Second Stage 11,621.580 1,337,700 12.959.280 TOTAL 22,702,929 C 322,568] 0 22,380,361 Option hA CONTRACT NO. 21 (tunnel) Exhibit "D" WASTEWATER DISPOSAL AGREEMENT Phase 1A Plans and Specifications Previously Reviewed Plans, specifications and contract documents for the following construction contracts which will be built by the District under its direct supervision and which will make up the first stage of Phase lA of Option 6A of the System have been previously reviewed and approved by the District and the Customers: DESCRIPTION OF WORK 6 Approximately 5,990 LF of 60" wastewater interceptor and appurtenant work from the Round Rock 3 MGD WWTF to Lake Creek Approximately 8,230 LF of 78" Tunnel and 84" wastewater interceptor and appurtenant work from the Georgetown Railroad to the Round Pock 3 MGD WWTF Exhibit "E" WASTEWATER DISPOSAL AGREEMENT FIELD NOTES FOR 25.012 ACRES OF LAND Field notes describing a 25.012 acre tract of land in the Joseph Marshall Survey, Abstract No. 409, in Williamson County, Texas, being a part - of a tract of land called 31.372 acres in a deed to the City of Round Rock, Texas, recorded in Volume 768, Page 648 of the Deed Records of Williamson County, Texas, and being further described by metes and bounds as follows: BEGINNING at an iron pin found in the Southwest corner of the above mentioned 31.372 acre tract for the Southwest corner ot this tract. THENCE N 00° 05' 54" E with the West line of the said 31.372 acre tract 1444.55 feet to an iron pin set for the Northwest corner ot the said 31.372 acre tract and the Northwest corner of this tract. THENCE N 31° 51' 45" E with the North line of the said 31.372 acre tract 19.93 feet to an iron pin set for an angle point of this tract. THENCE S 72° 09' 25" E 222.91 feet to an angle point of this tract. THENCE S 87° 46' 24" E 80.41 feet to an angle point of this tract. THENCE N 75° 29' 48" E 85.88 feet to an angle point of this tract. THENCE S 69° 05' 45" E 183.13 feet to an angle point of this tract. THENCE N 86° 05' 38" E 229.71 feet to an angle point of this tract. THENCE N 88° 36' 46" E 140.60 feet to a point on the East line of the said 31.372 acre tract for the Northeast corner ot this tract. THENCE S 00° 29' 27" E with the said East line 184.43 feet to an iron pin set for an angle point of the said line. THENCE S 02 03' 00" W with the said line 657.77 feet to a point in the centerline of Brushy Creek for the Southeast corner of this tract. THENCE S 58° 15' 42" W with the said centerline 198.82 feet to an angle point. THENCE S 47° 40' 48" W with the said centerline 150.64 feet to an angle point. THENCE S 71° 48' 36" W with the said centerline 120.96 feet to an angle point. THENCE S 42° 58' 50" W with the said centerline 190.25 feet to an angle point. THENCE S 10° 45' 08" W with the said centerline 71.27 feet to an angle point. THENCE S 06° 00' 25" W with the said centerline 100.88 feet to a point on. the South line of the said 31.372 acre tract for an angle point of this tract. THENCE N 85° 14' 57" W with the said South line 359.83 feet to the POINT OF BEGINNING, containing 25.012 acres of land, more or less. EXHIBIT "E" Page 1 of 3 I,•Jay D. Becker, A REGISTERED PUBLIC SURVEYOR, do hereby certify that these field notes accurately represent.the results.ot an on- the - ground survey made under my direction and supervision on the 8th day of July, 1987. All corners located are as shown. The property described herein is correct and has no visible discrepancies, protrusions, encroachments, easements, conflicts in boundary, overlapping of improvements, roads in place, nor shortages in area except as shown. HAYNIE &.•KALLMAN, INC. Becker Regi - red Public Surveyor No. 4443 Date Job No.775- 1953 -6 EXHIBIT "E" Page 2 of 3 SURVEY'PL'AT'SHOWING 25.012 OF LAND IN THE JOSEPH MARSHALL SURVEY, A -409, ' WILLIAMSON COUNTY, TEXAS SCALE 1' ■ 300' 6 1 I BERTIL TELANDER, ET AL VOL. 366, PG. 507 POINT OF ' BE6INNIN6 PUE / UNRECORDED / • l LEASE TRACT CITY OF ROUND ROCK 31.222 AC. (31.372 AC.) VOL. 768, PG. 648 TRACT 2 25.012 AC. 0 1 76 LINE TABLE N0. BE,ARING DISTANCE T1 N31,51'45'E 59.90 T2 N20,41'06'11 22.03 73 N69,01'16'E 241.31 74 558,15'42'11 196.62 T5 547 ' 40'48'11 150.64 T6 57148'36'11 120.96 T7 542,66'50'11 190.25 TB 510,45'08'11 71.27 79 508,00'25'11 100.88 110 085,14'57'8 359.83 T11 N31,51'45'E 19.93 112 N31,51'45'E 39.97 113 500,29'27'E 104.43 114 588,36'46'11 140.60 115 S86,05'38'11 228.71 116 N69,05'45'w 163.13 117 575,29'48'11 85.88 116 N67,46'24'14 60.41 T19 N72 08'25'N 222.91 • 0 PUE LEGEND IRON PIN FOUND IRON PIN SET PUBLIC UTILITY '1 E BRUSHY CREEK 4 EASEMENT 4 V.A. AND MARIE SOUTHERN VOL. 339, PG. 289 EXHIBIT "E" Page 3 of 3 I, Jay D. Becker. A REGISTERED PUBLIC SURVEYOR. do hereby certify that Lhasa field notes accurately represent the results of. an on- theigroun6 survey made under my direction and supervision on the Bth day of July. 1987. All corners located are as shown. The property described herein 1s correct and has no visible discrepancies, protrusions. encroachments, easements, conflicts in boundary, overlapping of improvement roads in place, nor shortages in area except as shown. PROJECT NR 775 - 1953 -6 DESIGNED BY: PAT FILE N0: 775 -1953 P DRAWN BY: PAT OATS: JULY 1987 CHECKED BY: SCALE 1' - 300' REVISED BY: '1 ''Z Haynie & Milan Inc. Consulting Engineers Austin , Texas EXHIBIT "F" Page 1 of 4 ACCESS ROAD TO REGIONAL WASTEWATER TREATMENT PLANT FIELD NOTES describing an access easement across a portion of that certain 73 acre tract conveyed to Bertil Telander found of record in•Volume 366, Page 507 of the Deed Records of Williamson County, Texas. BEGINNING at a point in the North line of said Telander tract for the Northwest corner hereof and being S65 °30"W, 1685.70 feet from the Northeast corner of said tract; THENCE N65 °30'E, fifty feet (50') southerly of and parallel to the center line of the I & G N Railroad tracks, 1374.88 feet to the Point of Curvature of a curve to the right; THENCE 311.06 feet along the arc of said curve, having a radius of 250.0 feet and a sub-chord bearing and distance of 378 °51'15 "E, 291.38 feet to a point in the East line of said Telander tract for the Northeast corner hereof and also being in the West line of the remainder of that tract conveyed to William E. McCarthy, Jr. (dba Eddie McCarthy) found of record in Volume 537, Page 166 of said Deed Records; THENCE SO0 °56'40 "E, 92.17 feet along the common on line between said Telander and McCarthy tracts to the Southeast corner hereof; THENCE southeasterly 318.46 feet along the arc of a curve to the left, being fifty feet southerly of and parallel to the last described curved line, having a radius of 200.00 feet and a sub -chord bearing and distance of N68 °53'W, 285.87 feet to the Point of Tangency of said curve; THENCE 365 °30'W, 1374.88 feet to the Southwest corner hereof; THENCE N24 °30'W, 50.00 feet to the Point of Beginning of this described easement containing 1.935 acres or 84,307 square feet of land. 'SKETCH TO ACCOMPANY FIELD NOTES NE. C o.e..vc4- .— Tcc.wir� 30 oN rtki m N24 so'/a se•a' Le(E. 1 CART#// ✓.t Vet . /66 4 o-" 91 0 4, 7TE CI y o • /f NNO A 4 y>4-. 7G/, RS 64.0 /oo' Be ra- Tr aaoar , et eG 144-.366, ,.. 3 22 R,...dq,/ Ef e.i Y < . 7 .a, P9. 6 ?z EXHIBIT "F" Page 2 of 4 Haynie & _Kallman Inc. CONSULTING ENGINEERS Round Rock & Austin 255-7861 Date s /as Drawn By F. Sh. 2 of 2 FIELD NOTES describing a 0.055 acre tract out of the Joseph Marshall Survey situated in Williamson County, Texas and also being a part of a 3.6 acre tract conveyed to Hollis Scruggs by deed recorded in Volume 672, Page 415 of the Deed Records of said County and also being a part of an access easement granted to the City of Round Rock by deed recorded in Volume 768, Page 648 of said Deed Records; BEGINNING at a point in the West line of a 31.372 acre tract conveyed to said City by the aforesaid deed and also being N00 °05'54 "E 1084.97 feet along said West line from an iron pin found at the Southwest corner of said City tract and being an ell corner of said Scruggs tract; THENCE S00 ° 05'54 "W 194.51 feet along said West line, being the East line of said access easement, to the most southerly corner hereof; THENCE N04 °28'33 "W 50.16 feet to the beginning of a non - tangent curve to the left; THENCE 79.67 feet along the arc of said curve having a radius of 200.00 feet and a chord bearing and distance of N11 °18'50 "W 79.15 feet to a point-in the•West said•Scruggs tract and being, the East line of a 73.0 acre tract conveyed to Bertil Telander by deed recorded in Volume 366, Page 507 of said Deed Records; THENCE N00 °24'06 "W 92.17 feet along said common property line, being the West line of said access easement, to the most northerly corner hereof; THENCE southeasterly 32.51 feet along the arc of a curve to the right, said curve having a radius of 250.00 feet and a chord bearing and distance of S38 °56'28 "E 32.49 feet to the POINT OF BEGINNING. I, Jay D. Becker, A REGISTERED PUBLIC SURVEYOR, do hereby certify that 'th field notes -were prepared•from•maps and records made by others and a partial on the ground survey made under my direction and supervision in February 1985. OF ..ti JAY D. BECKER is 4443 • • 4. /C 'su4. EXHIBIT "F" PAGE 3 OF 4 OCT. 1, 1987 BC /WWTPRD HAYNIE, HALLMAN & GRAY INC. io -1 $1 Date . Becker, gistered Public Surveyor No. 4443 9 o i 1 i 1 / 1 / I SKETCH TO ACCOMPANY tt FIELD NOTES FOR A l$ ROADWAY EASEMENT I IN I THE NO A 4 UR. I � WILLIAMSON CO., TEXAS POINT OF BEGINNING J W w - in w 0 z 4 W m Ir w 1 " to Y CC W > ¢ c < a I I HOLLIS SCRUGGS VOL. 672 P6. 4i5 LINE TABLE ,q TEARING DISTANCE 71 504' 26'3391 00. 15 CURVE TABLE 110. SEARING CHORD DELTA RADIUS LENGTH TAN C1 Par 15'00•N 70.10 2r 411•27• 200.00 70. 57 40.37 C2 S35' 55'24 32 45 r 27•00 200. 00 32. 01 00. 20 VOL OF 8 ROUND 648 EXHIBIT "F" Page 4 of 4 I RON PIN FOUND HOLLIS SCRUGGS PROJECT NEC 003- 2004.23 FILE N4 103 -2005 DATE OCT. 1. 1M7 SCALE 1•-50' Illrfnu 1..1111 0E8101E0 5Y: JN MUM CHECKED ST: . REVISED NY: grey. Mel TOM Exhibit "G" WASTEWATER DISPOSAL CONTRACT FIELD NOTES FOR 1.582 ACRES OF LAND Field notes describing a 1.582 acre tract of land in the Joseph Marshall Survey, Abstract No. 409, in Williamson County, Texas, being a part of a tract of land called 31.372 acres in a deed to the City of Round Rock, Texas, recorded in Volume 768, Page 648 of the Deed Records of Williamson County, Texas, and being further described by metes and bounds as follows: BEGINNING at a point on the West line ot the above mentioned 31.372 acre tract tor the Southwest corner of this tract, and from which point the Southwest corner of the said 31.372 acre tract bears `S 00° 05' 54" W 282.00 feet. THENCE N 00° 05' 54" E with the said West line 325.00 feet to the Northwest corner of this tract. THENCE S 89° 54' 06" E 212.00 feet to the Northeast corner of this tract. THENCE S 00° 05' 54" W 325.00 feet to the Southeast corner ot this tract. THENCE N 89° 54' 06" W 212.00 feet to the POINT OF BEGINNING, containing 1.582 acres ot land more or less. Exhibit "G" Page 1 of 2 SKETCH FOR A 1.'582 ACRE TRACT OF LAND IN THE JOSEPH MARSHALL SURVEY, A - 409, WILLIAMSON COUNTY, TEXAS / / / / / / / ! / / / / / / L / / BERTIL TELANDER, ET AL / VOL. 366, PG. 507 // o /j /n / ,o gym• / o W / ! / % n� X7 2 / / / / / / / 9 / / h`/ . / h/S / 6 /m"I N / / / / / / / / / / / / / PROJECT N0: 775-1953 -6 FILE N0: 775 -1953 P2 DATE: JULY 1987 SCALE: 1' - 100' CITY OF ROUND ROCK 31.222 AC. (31.372 AC.) VOL. 768. PG. 648 Exhibit "G" Page 2 of 2 SCALE 100' DESIGNED BY: PAT DRAWN BY: PAT CHECKED BY: REVISED BY: S Haynie a Kallmon, Inc. Consulting Engineers Austin , Texas 4 -6 -88 WASTEWATER DISPOSAL AGREEMENT Between Brushy Creek Water Control and Improvement District No. 1 of Williamson and Milam Counties The City of Austin and The City of Round Rock /095R, TABLE OF CONTENTS Recitals 4 ARTICLE I DEFINITIONS 1.01. Definition of Terms 5 1.02. Interpretation 10 ARTICLE II RESERVED CAPACITY; CUSTOMER CATEGORY 2.01. Reserved Capacity 10 2.02. Category of Customer 10 ARTICLE III DESIGN. ACQUISITION AND CONSTRUCTION OF SYSTEM BY DISTRICT 3.01. Construction 10 3.02. Acquisition and Construction 11 3.03. Conditions Precedent 11 ARTICLE IV DISCHARGE OF WASTEWATER AND METERING 4.01. Rights of Customers 11 4.02. Discharge 11 4.03. Point of Entry 11 4.04. Conveyance to Point of Entry 11 4.05. Quantity at Point of Entry 11 4.06. Liability for Damages and Responsibility for Treatment and Disposal of Wastewater 12 4.07. Metering 12 4.08. Unit of Measurement 12 ARTICLE V QUALITY AND TESTING 5.01. General 13 5.02. Admissible Discharges 13 5.03. District Regulations 13 5.04. Industrial Wastes 13 ARTICLE VI FISCAL PROVISIONS 6.01. Cost of Phase IA of System 14 6.02. Construction of Phase IB of the System 19 6.03. Deposits on Funding Date 20 6.04. Service Charge 20 6.05. Payments by Customers and Additional Customers for Future System Capacity 20 6.06. Capital Recovery Fee 21 6.07. Default 23 6.08. Surcharge 24 6.09. Management Fee 24 6.10. Payments by Customers 24 ARTICLE VII REQUIRED IMPROVEMENTS 7.01. District to Determine Required Improvements 25 7.02. District's Duty to Make Required Improvements 25 7.03. Customer's Obligation In Event of Required Improvement 26 ARTICLE VIII GENERAL PROVISIONS 8.01. Obligations of Customers 26 8.02. Payments to Constitute Operating Expenses of Customer 26 - 2 - 8.03. Customer to Establish Adequate Rates 27 8.04. Mandamus and Other Remedies Against Category B Customers 27 8.05. Other Remedies 27 8.06. Use of Public Property 27 8.07. Use of Revenues of System 27 8.08. Force Majeure 27 8.09. Insurance 28 8.10. Regulatory Bodies 28 8.11. District Contracts with Others 28 8.12. Additional Capacity and Facilities 28 8.13. Contracts with Others 28 8.14. Annual Report and Audit of System 29 8.15. Governmental Regulations 29 8.16. Operation of the System 29 8.17. Regional Designation 29 8.18. No Additional Waiver Implied 29 8.19. Addresses and Notice 29 8.20. Modification 30 8.21. Assignability 30 8.22. Severability 30 8.23. Merger 30 ARTICLE IX DISTRICT SYSTEM BUDGET 9.01. Filing with Customers 30 ARTICLE X OTHER MATTERS 10.01. Agreement Concerning Permits for Existing Utility Systems 31 10.02. Interim Capacity in Round Rock Wastewater Transportation and Treatment System 31 10.03. Ownership of System 31 10.04. Provisions Applicable to Austin 32 10.05. Provisions Applicable to Round Rock 32 10.06. Provisions Applicable to Fern Bluff MUD and Milburn Investments, Inc 33 ARTICLE XI TECHNICAL COMMITTEE 11.01. Composition of Technical Committee 33 11.02. Organization of the Technical Committee 34 11.03. Action of the Technical Committee 34 11.04. Responsibility of Technical Committee 34 ARTICLE XII SUCCESSION TO RIGHTS AND PROPERTIES ACQUIRED PURSUANT TO PRIOR CONTRACT 12.01 Prior Contract 34 ARTICLE XIII EFFECTIVE DATE AND TERM OF AGREEMENT 13.01. Effective Date 35 13.02. Term of Agreement 35 Signatures 35 - 3 - WASTEWATER DISPOSAL AGREEMENT This agreement (the "Agreement ") is entered into between Brushy Creek Water Control and Improvement District No. 1 of Williamson and Milani Counties (the "District "), the City of Austin ( "Austin "), and the City of Round Rock ( "Round Rock "), all of such parties other than the District being collectively referred to as the "Customers ". RECITALS WHEREAS, the District was created by order of the State of Texas Board of Water Engineers (presently the Texas Water Commission) by order dated November 1, 1956, which creation was confirmed by an election held within the District on January 8, 1957, and was validated by Acts, 1957, 55th Legislature, Regular Session, Chapter 341, Page 807, as amended by Acts, 1957, 55th Legislature, Second Called Session, Chapter 10, Page 166; WHEREAS, the District's boundaries include all of the Brushy Creek watershed, an area in Williamson and Milam Counties, Texas; WHEREAS, the District is authorized to provide Wastewater collection and treatment services to lands within the District and in the vicinity of the District; WHEREAS, there is a need to establish in the upper Brushy Creek Watershed, generally in the area outlined in the Engineering Report (as hereinafter defined), a regional Wastewater collection, treatment and disposal system for the purpose of providing facilities to adequately receive, transport, treat and dispose of Wastewater in such area; WHEREAS, the Texas Water Development Board has, pursuant to Chapter 26, Texas Water Code, declared the area in the upper Brushy Creek watershed to be in need of a regional Wastewater collection, treatment and disposal system and has ordered that the District be the provider of regional Wastewater services in said area [31 T.A.C. § 351.111 - 351.113, adopted 10 TEX REG 3217 (8 -23- 1985)]; WHEREAS, the District, the Customers, Williamson County Municipal Utility District No. 2 ( "MUD 2 ") and Williamson County Municipal Utility District No. 3 ( "MUD 3 ") heretofore entered into a Wastewater Disposal Contract dated December 16, 1985 ( "Contract ") which Contract terminated on August 20,1987; WHEREAS, the parties hereto desire that all rights and properties acquired by the District pursuant to such Contract shall henceforth be held pursuant to the terms and provisions of this Agreement; WHEREAS, the Customers each presently own, operate and maintain their respective Wastewater systems to collect, treat and dispose of Wastewater from the areas served by the Customers; WHEREAS, the Customers desire to discharge Wastewater from their Wastewater collection systems into the regional Wastewater collection„ treatment and disposal system (the "System ") proposed to be constructed by the District and as described in the Engineering Report, in order to achieve efficiencies of cost and operation and to protect and preserve the environment of the upper and lower Brushy Creek watersheds; WHEREAS, the District is willing to acquire, construct and expand the System to receive Wastewater from the Customers' Wastewater collection systems and to treat and dispose of such Wastewater; - 4 - WHEREAS, the District and the Customers are authorized to make this Agreement under the provisions of Chapter 30, Texas Water Code, and other applicable provisions of state law; and WHEREAS, the parties hereto recognize: (a) That the District has used the payments received under the contract and will use the payments to be received under this Agreement for the payment of the expenses of acquiring, constructing, financing and operating the System; (b) That contracts similar to this Agreement may, in the future, be executed between the District and Additional Customers to expand the System; (c) That the District plans to secure cash contributions and /or to issue and sell its Bonds to raise funds to finance the acquisition and construction of the System; (d) That the District may issue Bonds from time to time in the future or receive additional cash contributions from Customers and /or Additional Customers to further expand, extend, enlarge, repair and improve the System; and (e) That the Customers and the District are subject to all valid rules, regulations and requirements of the Texas Water Commission, the Environmental Protection Agency and such State, federal and local laws, rules and regulations as now exist or may be enacted during the term of this Agreement; NOW, THEREFORE, the Customers and the District do hereby contract and agree as follows: ARTICLE I DEFINITIONS Section 1.01. DEFINITION OF TERMS. Terms and expressions as used in this Agreement, unless the context clearly shows otherwise, shall have the following meanings: (a) "Additional Customer" means any party with whom the District makes a contract for receiving, transporting, treating and disposing of Wastewater through the System in an Expansion. Additional Customers shall be designated as either Additional Category A Customers or Additional Category B Customers under the same criteria as used for determining Category A Customers and Category B Customers. (b) "Agreement" means this agreement. (c) "Annual Debt Service Requirement" means the principal of and redemption premium, if any, and the interest on Bonds, if any, issued by the District on behalf of a Category B Customer or Additional Category B Customer as such principal, redemption premium, if any, and interest become due during any Fiscal Year, less interest to be paid out of Bond proceeds as permitted by the Bond Resolution and less any other funds which are dedicated by the District for payment of principal, redemption premium and interest on the Bonds during such Fiscal Year; plus the amounts, if any, required to be deposited to restore any deficiency in the Debt Service Reserve Fund in accordance with the provisions of the Bond Resolution; and plus any amounts required to pay charges, fees or expenses of any trustee, paying agent or registrar for the Bonds. (d) "Annual Operation and Maintenance Expense Requirement" means the amount paid or payable for all Operation and Maintenance Expenses during any Fiscal Year together with any amount required or - 5 - necessary to replenish and maintain the Repair and Replacement Reserve Fund and the Operation and Maintenance Reserve Fund for the System. (e) "Austin" means the City of Austin. (f) "Bond" means any bond, note or other evidence of indebtedness (including, without limitation, any Improvement Bonds) to be issued by the District pursuant to this Agreement to provide temporary, interim or permanent financing for the acquisition, construction, expansion, extension, enlargement, improvement or repair of the System, whether one or more issues, or any bond issued to refund the same, or issued for any purpose necessary to acquire, construct, expand, extend. enlarge, improve or repair the System, but does not include any other bonds of the District issued heretofore or hereafter for any other District purpose. (g) "Bond Issuance Costs" means all costs associated with the authorization, insurance, issuance, sale and delivery of the Bonds, including all legal, financial, advisory and engineering fees related thereto. expenses of printing the Bonds, expenses to retain a trustee, paying agent or registrar for the Bonds, advertising expenses and all other out -of- pocket expenses directly related to the authorization, issuance, sale and delivery of the Bonds. In addition, "Bond Issuance Costs" shall include an amount equal to eighteen months interest on the Bonds, which amount shall be deposited into the Interest Account of the Debt Service Reserve Fund and be used to pay interest on the Bonds. (h) "Bond Resolution" means any resolution of the Board of Directors of the District (including, without limitation, any Improvement Bond Resolution) authorizing the issuance of Bonds and providing for their security and payment, as such resolution may be amended from time to time as therein permitted; without limitation, "Bond Resolution" shall include any trust indenture pursuant to which the Bonds are issued. (i) "Capacity Charge" means a lump sum payment made in accordance with the terms of any contract between the District and a Category A Customer, which payment shall equal such Category A Customer's proportionate share of the Project Costs of the System. (j) "Capital Recovery Fee" means the fee established by the District pursuant to Section 6.06(a) - (c) of this Agreement. (k) "Common Facilities" means the facilities described in Section 6.06 of this Agreement, which while constituting a part of Phase I of the System, also either benefit the Additional Customers or constitute a necessary expense of accomplishing Phase I of the System as a regional system. (1) "Construction Fund" means the fund established by the District to receive that portion of the Capacity Charges from Category A Customers and that portion of the proceeds of Bonds issued by the District on behalf of Category B Customers which are allocable to the cost of acquiring or constructing Phase I of the System. (m) "Customers" means Austin and Round Rock. There shall be two classes of Customers, and every Customer shall be designated as either a "Category A Customer" or a "Category B Customer ", as defined herein, as appropriate. Category A Customer: Shall be any Customer who pays for its proportionate share of the Project Costs of Phase I of the System by payment of a Capacity Charge. Category B Customer: Shall be any Customer who pays for its proportionate share of the Project Costs of Phase I of the System by monthly payment of a Facility Charge. - 6 - (n) "Debt Service Fund" means the fund established in the Bond Resolution for the purpose of receiving deposits of Facility Charge payments and paying debt service on the Bonds, which fund shall be comprised of a Principal Account and an Interest Account. (o) "Debt Service Reserve Fund" means the fund established in the Bond Resolution authorizing the issuance of Bonds on behalf of a Category B Customer or Additional Category B Customer which will be used as a reserve to secure payment of debt service on such Bonds. (p) "District" means the Brushy Creek Water Control and Improvement District No. 1 of Williamson and Milam Counties. (q) "Eligible Securities" means obligations of the United States or obligations unconditionally guaranteed by the United States or an agency of the United States, and certificates of `deposits of banks and savings and loan associations authorized to do business in the State of Texas provided such deposits are secured in the manner provided by law for the deposit of county funds. (r) "Engineering Report" means a report of Haynie & Kallman, Inc., and Espey, Huston & Associates, Inc., Consulting Engineers, entitled A Feasibility Study of a Potential Regional Wastewater Treatment Facility for the Upper Brushy Creek Watershed of Southwest Williamson County, Texas, dated July, 1984, and currently specifying Option 6A, dated April, 1988, as such report may be amended, modified and changed and superseded by the District at its direction at any time prior to the execution of construction contracts for improvements, additions and enlargements to Phase I of the System or as modified and changed by change orders issued after execution of such construction contracts; provided, however, that no such change orders shall affect the Reserved Capacity, rate of discharge or Point of Entry for any Customer without such Customer's consent. (s) "Expansion" means any facilities or equipment which constitute an expansion. extension or enlargement beyond Phase I of the System other than Required Improvements. (t) "Facility Charge" means the annual charge which each Category B Customer or Additional Category B Customer agrees unconditionally to pay to the District calculated in accordance with this Agreement. (u) "Fiscal Year" means the twelve (12) month period beginning October 1 of each year or such other twelve (12) month period as may be established in the future to constitute the District's Fiscal Year. (v) "Funding" means the receipt by the District of the funds necessary to pay the Project Costs from Capacity Charge payments made by a Category A Customer or from the Net Bond Proceeds of Bonds issued by the District on behalf of a Category B Customer. (w) "Funding Date" means the date or dates on which a Funding occurs. (x) "Improvement Bond" means any bond, note or other evidence of indebtedness to be issued by the District pursuant to Article VII of this Agreement to provide temporary, interim or permanent financing for the improvement or repair of the System as deemed necessary by the Board of Directors of the District to cause the System to be in compliance with State or federal law or with the requirements of any regulatory body, other than the District, whether one or more issues, or any Bond issued to refund same, but does not include any other bonds of the District issued heretofore or hereafter for any other District purpose. (y) "Improvement Bond Resolution" means any resolution of the Board of Directors of the District authorizing the issuance of Improvement Bonds and providing for their security and payment, as - 7 - such resolution may be amended from time to time as therein permitted; without limitation, "Improvement Bond Resolution" shall include any trust indenture pursuant to which the Improvement Bonds are issued. (z) "LEE" means the amount of sewage collection and treatment capacity needed by one living unit equivalent which amount shall be 350 gallons per day based on a 30 -day average. (aa) "Month" means a calendar month. (bb) "Net Bond Proceeds" means the proceeds received by the District upon the sale of its Bonds less all Bond Issuance Costs. (cc) "Operation and Maintenance Expense" means all costs of operation and maintenance of the System including, but not limited to, repairs and replacements to the extent not paid from the Repair and Replacement Reserve Fund or the Operation and Maintenance Reserve Fund, costs of maintaining any permits or licenses necessary to operate and maintain the System, and cost of utilities, supervision, engineering, accounting, auditing, legal services, liability insurance for the District and the District directors and employees, expenses of the Technical Committee in fulfilling its responsibilities, and any other supplies, services, administrative costs and equipment necessary for proper operation and maintenance of the System, and payments made by the District in satisfaction of judgments resulting from claims not covered by the District's insurance or not paid by one particular Customer or Additional Customer arising in connection with the operation and maintenance of the System including any fines or penalties lawfully assessed and any and all expenses incurred by the District in connection with any litigation of any nature whatsoever concerning the System or the District's responsibilities hereunder to any person, entity or party hereto. Depreciation shall not be considered an item of Operation and Maintenance Expense. (dd) "Operation and Maintenance Reserve Fund" means the fund to be established by the District to provide moneys to operate and maintain the System in the event current revenues of the System are insufficient to meet the Operation and Maintenance Expenses of the System. (ee) "Phase I of the System" includes Phases IA and IB of the System and means an interceptor line and related facilities and a 12 MGD Wastewater treatment plant or such other size plant as will adequately provide the Reserved Capacity needs of the Customers in the System, al] as generally described in the Engineering Report, including interim components which may be abandoned as future expansions are added and Project Costs associated with acquisition or construction of downsized components which may be smaller than ultimately necessary to receive the Reserved Capacity of all Customers. (ff) "Point of Entry" means a point at which Wastewater enters the System. (gg) "Project Contracts" means any contract or agreement, any amendments thereto, and any termination thereof, whether in writing or not, entered into by the District in connection with or in furtherance of the management, planning, design, financing, construction, acquisition, expansion, implementation, operation or maintenance of the System. (hh) "Project Costs" includes all acquisition and construction costs and reconstruction costs as those terms are generally understood in standard accounting practice as applied to projects of the nature of the System, and without limiting the generality of the foregoing, the term shall include the costs of obtaining all licenses and permits; purchase of equipment, property, rights in property, costs of land, easements and rights -of -way, including - 8 - damages to land and property; engineering,' administrative, auditing. legal expenses and liability insurance for the District and District directors and employees incurred in connection with the planning, development, acquisition and construction of the System; any and all tools and equipment required for the operation and maintenance of the System; costs of the same nature for any expansion, extension, enlargement, improvement or replacement of the System; the costs of establishing the Operation and Maintenance Reserve Fund and the Repair and Replacement Reserve Fund; legal and other expenses incurred by the District in accomplishing the acquisition or construction of the System including any and all expenses incurred by the District in connection with any litigation of any nature whatsoever concerning the System or the District's responsibilities hereunder to any person, entity or party hereto; and a reasonable amount for contingencies, not to exceed ten (10) percent of the construction contract amount. The Project Costs shall be composed of two components: (1) "Line Project Costs" which shall be all Project Costs related to constructing interceptor lines, collection lines, easement acquisition and special legal cost and related facilities to collect and transport Wastewater to the System's proposed Wastewater treatment plant; (2) "Treatment Project Costs" which shall be all Project Costs related to constructing the System's Wastewater treatment plant (such Treatment Project Costs consisting of [a] "Treatment Project Common Facilities Costs" being those Treatment Project Costs for Common Facilities and [b] "Treatment Project Phase Costs" being those Treatment Project Costs for a particular phase of the Project which are not related to the cost of Common Facilities). "Project Management Costs" which shall be all Project Costs relating to administration of construction of the System and shall be treated as Treatment Project Common Facilities Costs, except for those costs which can be specifically assigned as a Line Project Cost or a Treatment Project Phase Cost. (ii) "Repair and Replacement Reserve Fund" means the fund to be established by the District, the moneys from which will be used to repair the System or to replace worn or obsolete parts of the System. (jj) "Required Improvement" means any facilities or equipment which constitute an improvement to or modification of the System, the construction, acquisition and ownership of which is undertaken pursuant to Article VII this Agreement as the result of the requirement of a regulatory body other than the District or repairs and replacements which cost more than the amount of money on hand in the Repair and Replacement Reserve Fund. (kk) "Reserved Capacity" means, with respect to any given period of time, the total quantity of Wastewater that a particular Customer or Additional Customer is entitled to deliver into the System pursuant to this Agreement and similar contracts with Additional Customers. (11) "Round Rock" means the City of Round Rock. (mm) "Service Charge" means a monthly charge which will be paid by every Customer and Additional Customer of each Category (Categories A and B), to enable the District to meet the Annual Operation and Maintenance Expense Requirement. (nn) "System" means all of the facilities for receiving, transporting, treating and disposing of Wastewater generally in the upper Brushy Creek watershed, together with any expansions, extensions, enlargements or improvements to said facilities and any replacements of said facilities constructed or otherwise incorporated into said facilities in the future, including any Required Improvements, which facilities are to he owned by the District and the Customers as provided in Article X hereof and to be managed and operated by the District as provided in Article X. Said term shall include only those facilities which are used, constructed - 9 - or acquired, or the use of which is arranged for, by the District to afford service to the Customers and Additional Customers. (oo) "System Year means an annual period beginning October 1 of a year and ending September 30 of the next year. (pp) "Technical Committee" means the committee created by Article XI of this Agreement. (qq) "Total Reserved Capacity" means, with respect to any given period of time, the total quantity of Wastewater that all Customers and /or Additional Customers are entitled to deliver into the System pursuant to this Agreement and similar agreements with Additional Customers. (rr) "Wastewater" means liquid and water carried waste discharged from sanitary conveniences of dwellings, business buildings, institutions and the like including garbage which has been shredded to such degree that all particles will be carried freely under flow conditions normally prevailing in public sewers, with no particle greater than one -half (1/2) inch in any dimension and the liquid wastes from industrial processes, and includes any infiltration water that has migrated from the ground into the System. Section 1.02. INTERPRETATION. Terms used in this Agreement with initial letters capitalized and not otherwise defined in this Agreement have the meanings assigned to them in Section 1.01. Except where the context otherwise requires, words imparting the singular number shall include the plural number and vice versa. Reference to any document means that document as amended or supplemented from time to time. Reference to any party means that party and its successors and assigns. ARTICLE II RESERVED CAPACITY; CUSTOMER CATEGORY Section 2.01. RESERVED CAPACITY. The Customers are entitled to Reserved Capacity in the System (and its various phases and components) as described in Exhibit "A ", attached hereto and hereby incorporated herein by reference for all intents and purposes. Section 2.02. CATEGORY OF CUSTOMER. All of the Customers are now Category A Customers. Each of the Customers agrees to notify the District at least sixty (60) days in advance of any Funding Date for which this Agreement provides for an election as to category of Customer if the Customer desires to be a Category A or Category B Customer for purposes of the payments made at each subsequent Funding Date; provided, however that any customer which has an existing Category designation shall not be required to give such notification unless it desires to change its Category designation for such funding. ARTICLE III DESIGN, ACQUISITION AND CONSTRUCTION OF SYSTEM BY DISTRICT Section 3.01. CONSTRUCTION. In order to provide services for receiving, transporting, treating and disposing of Wastewater for the Customers and Additional Customers, the District will design and acquire or construct the System as described in the Engineering Report, will acquire all necessary lands, easements and rights -of -way, and will own, operate, maintain and from time to time expand, extend, enlarge, improve and repair the System. The District shall exercise due diligence and use its best efforts to complete construction of Phase IA of the System within 24 months after funding for such construction has been received. Phase IB shall be constructed and completed as necessary and as otherwise provided herein. - 10 - Section 3.02. ACQUISITION AND CONSTRUCTION. The District agrees to proceed promptly with the acquisition and construction of Phase I of the System as described in Article VI and as necessary to the performance of its obligations hereunder subject to the provisions of Section 3.03 of this Agreement. The District shall not be liable to the Customers for any damages occasioned by delay in the commencement of such service to the Customers. After the District has notified the Customers of its readiness to accept such Wastewater at the Point or Points of Entry, the District shall, subject to other terms and conditions of this Agreement, continually hold itself ready, willing and able to supply such service to the Customers. Liability of the District under this covenant shall be subject to the provisions of Sections 6.07 and 8.08 of this Agreement. Section 3.03. CONDITIONS PRECEDENT. It is expressly understood and agreed that any obligation on the part of the District to acquire, construct and operate the System or Phase I thereof, as appropriate, shall be conditioned upon the following: (1) the District's obtaining sufficient funds to pay the Project Costs of the System, or Phase I thereof, as appropriate, including the payment of all Capacity Charges and the sale and delivery upon terms satisfactory to the District of the Bonds for the System, or Phase I thereof, as appropriate; (2) the District's ability to reasonably obtain all sites, rights -of -way, easements, labor, equipment and materials required for acquisition or construction of the System, or Phase I thereof, as appropriate; and (3) the District's obtaining all permits, approvals and licenses required to acquire, construct or operate the System, or Phase I thereof, as appropriate, including waste discharge permits issued by the Texas Water commission or its successors. ARTICLE IV DISCHARGE OF WASTEWATER AND METERING Section 4.01. RIGHTS OF CUSTOMERS. The Customers shall have the right to discharge Wastewater into the System under this Agreement upon the completion of Phase IA of the System described in the Engineering Report. - Section 4.02. DISCHARGE. The Customers shall have the right to discharge Wastewater into the System meeting the requirements for quantity set forth in this Agreement and the requirements of quality as set forth in District regulations to be adopted from time to time as described in Article V. Section 4.03. POINT OF ENTRY. Each Customer shall discharge its Wastewater at a Point or Points of Entry designated for each Customer in the Engineering Report, or at such additional Points of Entry as may be mutually agreed upon by the District and any Customer utilizing such Point of Entry. Section 4.04. CONVEYANCE TO POINT OF ENTRY. It shall be the sole responsibility of each Customer to convey its Wastewater to the Point or Points of Entry. Section 4.05. QUANTITY AT POINT OF ENTRY. (a) The quantity of Wastewater conveyed to the Point or Points of Entry by each Customer shal] be metered and the total annual contributing flow of Wastewater received during any Fiscal Year from each Customer shall be used to determine each Customer's payment of the Variable Charges of the Service Charge as set forth in Article VI. (b) Each Customer's discharge rate into the System is designated in the Engineering Report. Section 4.06. LIABILITY FOR DAMAGES AND RESPONSIBILITY FOR TREATMENT AND DISPOSAL OF WASTEWATER. Liability for damages arising from the reception, transportation, delivery and disposal of all Wastewater discharged hereunder shall remain in each Customer to the Points of Entry, and immediately prior to passing through meters installed at the Points of Entry liability for such damages shall pass to the District. As between the parties, each party hereto agrees to save and hold the other parties harmless from all claims, demands and causes of action which may be asserted by anyone on account of the reception, transportation, delivery and disposal of Wastewater while the Wastewater is in the control of such party. This covenant is not made for the benefit of any third party. The District takes the responsibility as between the parties hereto for the proper reception, transportation, treatment and disposal of all such Wastewater received by it at Points of Entry. This Section shall in no manner be construed to relieve any party from its obligation to pay its share of Operation and Maintenance Expense. Section 4.07. METERING. The District will operate and maintain at its expense at each Point of Entry the necessary equipment and devices of standard type for measuring properly all Wastewater to be discharged under this Agreement as such devices are specified in the Engineering Report. Such meters and other equipment shall be furnished by the Customers according to the District's specifications and become the property of the District. The Customers and the District shall have access to such metering equipment at all reasonable times for inspection and examination, and the reading, calibration and adjustment thereof shall be done by employees or agents of the District in the presence of a representative of any Customer if requested by the Customer. All readings of meters will be entered upon proper books of record maintained by the District and a copy of said readings supplied to the Customers. Upon written request any Customer may have access to said record books during reasonable business hours. Not more than three times in each year of operation, the District shall calibrate the meters, if requested in writing by the affected Customer to do so, in the presence of a representative of such Customer, and such parties shall jointly observe any adjustments which are made to the meters in case any adjustment is found to be necessary. If, for any reason, any meters are out of service or out of repair, or if, upon any test, the percentage of inaccuracy of any meter is found to be in excess of five percent (5 %), registration thereof shall be corrected for a period of time extending back to the time when such inaccuracy began, if such time is ascertainable, and if not ascertainable, then for a period extending back one -half (1/2) of the time elapsed since the date of the last calibration, but in no event further back than a period of six (6) months. Any Customer may, at its option and its own expense, install and operate a check meter to check each meter installed by the District, but the measurement for the purpose of this Agreement shall be solely by the District's meters, except as in this section specifically provided to the contrary. All such check meters shall be of standard make and shall be subject at all reasonable times to inspection and examination by any employee or agent of the District, but the reading, calibration and adjustment thereof shall be made only by the Customer installing same, except during any period when a check meter may be used under specific written consent by the District for measuring the amount of Wastewater delivered into the System in which case the reading, calibration and adjustment thereof shall be made by the District with like effect as if such check meter or meters had been furnished or installed by the District. Section 4.08. UNIT OF MEASUREMENT. The unit of measurement for Wastewater delivered hereunder shall be one thousand (1,000) gallons, D.S. Standard Liquid Measure. - 12 - ARTICLF. V QUALITY AND TESTING Section 5.01. GENERAL. The Customers agree to limit their discharge into the System to wastes defined by the District as admissible discharges, and to prohibit entry into the System of any wastes that have the characteristics of prohibited discharges, also as defined by the District. Section 5.02. ADMISSIBLE DISCHARGES. Wastes discharged into the System shall consist only of wastes which the System is capable of handling, so that: (a) effluent from the System meets the current and future legal standards of the Texas Water Commission or of any governmental body having legal authority to set standards for such effluent; and (b) the System is not damaged to the extent to cause unnecessary repairs or replacements resulting in increased Operation and Maintenance Expense. Section 5.03. DISTRICT REGULATIONS. The District may, from time to time, after giving sixty (60) days notice to all Customers and Additional Customers, establish by regulation the quality of Wastewater which will qualify as admissible discharges and be accepted into the System from Customers and Additional Customers at the Points of Entry and to establish the quality of Wastewater which will qualify as prohibited discharges and not be accepted into the System. The District may establish standards which are stricter than those required from time to time by applicable law, rule or regulation by a 4 /5ths majority vote of the Board of Directors of the District; provided, however, the District may not establish any standards to require pretreatment of normal domestic wastewater unless such treatment is required by applicable federal or State law or regulation. The District shall immediately notify all Customers and Additional Customers of such regulations after they are adopted by the District. Each Customer and Additional Customer shall have one hundred and eighty (180) days after the date of adoption of any such regulations to bring the quality of its Wastewater into compliance with such regulation unless a shorter periods is required by applicable State or federal law or regulation. The District may also provide in such regulations for the testing of Wastewater delivered into the System. Such regulations may provide that the District may terminate service to any Customer or Additional Customer which continues to violate said regulations after being notified by the District in writing and given a reasonable period of time (not to exceed thirty (30 days) to correct such violation. The regulations shall establish reasonable procedures for terminating such service and shall make reasonable provisions for due process rights of the Customers and Additional Customers. The District may also establish, charge and collect a surcharge from any such Customer or Additional Customer for discharge of admissable discharges which, because of the excessive concentration of biochemical oxygen demand, suspended solids or other characteristic, are exceedingly difficult or expensive to treat, which surcharge shall be in addition to the Customer's or Additional Customer's Service Charge as described in Section 6.08. Section 5.04. INDUSTRIAL WASTES. The effects of certain types of industrial waste upon Wastewater and Wastewater treatment processes are such as to require that careful consideration be made of each industrial connection. This is a matter of concern both to the District and the Customers. Accordingly, the District, upon request by any Customer, will work jointly in processing applications for discharge of industrial waste into any sewers ultimately discharging into the System. Each Customer covenants that it will have in effect and will enforce an industrial waste ordinance acceptable to federal and State agencies or departments having lawful jurisdiction to set standards for waste discharges. - 13 - Each Customer will allow the District access to the Customer's records to gather information and data that will be useful to the District as statistical data for planning the operation, improvement and expansion of the System. ARTICLE VI FISCAL PROVISIONS Section 6.01. COST OF PHASE IA OF SYSTEM. (a) The District intends to construct Phase I of the System in two phases to be known as Phases IA and IB, as described in the Engineering Report. The parties recognize that Phases IA and IB of the System will be designed and advertised for bid by the District at separate times as described later in this section. The parties further recognize that . although each Customer will not become fully liable for its pro rata share of the construction costs of the various phases until such time as construction bids are obtained by the District, that nevertheless the District has incurred or will incur Project Costs for design of the System, preparation of plans and specifications for construction of the System, and certain engineering, legal, administrative and other expenses included in the Project Costs of the System prior to the time that construction bids are accepted. The District has no source of funds to pay the Project Costs of Phase IA of the System other than those provided by the Customers. which such funds have previously been deposited to the District by the Customers as shown in Exhibit "B ". Project Costs for any funding required to be paid by all Customers shall be calculated as follows: (1) each Customer's share of Line Project Costs shall be determined by dividing the estimated Line Project Costs of Phase IA of the System to be incurred prior to the other Funding Dates by the number of LUEs of Total Reserved Line Capacity in Phase IA of the System and multiplying the result times the Customer's number of LUEs of Reserved Line Capacity in Phase IA of the System, (2) each Customer's share of Treatment Project Phase Costs of Phase IA of the System shall be determined by dividing the estimated Treatment Project Phase Costs of Phase IA of the System to be incurred prior to the other Funding Dates by the number of LUEs of Total Reserved Treatment Capacity in Phase IA of the System and multiplying the result times the Customer's number of LUEs of Reserved Treatment Capacity in Phase IA of the System and (3) each Customer's share of Treatment Project Common Facilities Costs shall be determined by dividing the Treatment Project Common Facilities Costs of Phase IA of the System by the total number of LUEs of Total Reserved Common Capacity of all Customers in Phase IA of the System and multiplying the result times the Customer's number of LUEs of Reserved Common Capacity in Phase IA of the System. (b) The District shall proceed to take all action necessary to acquire or construct Phase IA of the System, including obtaining appropriate easements, making appropriate surveys, obtaining appropriate permits and governmental approvals and taking all other necessary and proper actions. Plans and specifications for the contracts shown on Exhibit "D" have been reviewed by the District and the Customers. All other plans and specifications shall be submitted to the Customers for their comments which must received within thirty (30) days after receipt of same. The District shall make any adjustments to the plans and specifications which it deems appropriate thereafter. The District anticipates that after final plans and specifications have been prepared a period of thirty (30) days will be necessary in order to obtain approval by all appropriate regulatory bodies of the plans and specifications. After all such approvals have been obtained. the District shall proceed, as appropriate, to advertise for bids for construction of Phase IA of the System in two stages. The first stage - 14 - shall include all of Phase IA except for the construction of those interceptors upstream of Contract 21 (tunnel) and the construction of the wastewater treatment plant which comprise the second stage of Phase IA. The estimate of Project Costs of the two stages of. Phase IA are set forth in Option 6A ofthe Engineering Report and are shown in Exhibit "C ". Upon receipt of the bids for the first stage of Phase IA, the District shall tabulate the bids and notify the Customers and the Technical Committee of the bids which have been received. The District shall notify the Customers and the Technical Committee, based on the Engineers' recommendation of the lowest and best bid, or bids, of the as- bid Project Costs of the first stage of Phase IA of the System. The District shall then establish a Funding Date for the first stage of Phase IA of the System, which Funding Date shall be prior to the time that such construction bids for those contracts contained in the first stage of Phase IA of the System expire, but shall not be less than forty -five (45) days after the date the District notifies the Customers and the Technical Committee of the recommended low bid. Prior to advertising for bids for the second stage of Phase IA, the Customers shall obtain authorization for funding the estimated cost of such second stage of Phase IA. Upon receipt of the bids for the second stage of Phase IA of the System, the District shall tabulate the bids and notify the Customers and the Technical Committee of the bids which have been received. The District shall notify the Customers and the Technical Committee, based on the Engineers' recommendation of the lowest and best bid, or bids, of the as -bid Project Costs of the second stage of Phase IA of the System. If the as -bid Project Costs of the second stage of Phase IA do not exceed the estimated cost of construction of such second stage of Phase IA of the System as set forth in Option 6A of the Engineering Report and as shown on Exhibit "C" for which bids were received by more than ten (10) percent, then the District shall establish a Funding Date for the second stage of Phase IA of the System, which Funding Date shall be prior to the time that such construction bids for those contracts contained in the second stage of Phase IA of the System expire, but shall not be less than forty -five (45) days after the date the District notifies the Customers and the Technical Committee of the recommended low bid. If the as -bid project costs of the second stage of Phase IA exceeds the estimated cost of construction of such second stage of Phase IA of the system by more than ten (10) per cent, then within thirty (30) days after receiving such notice from the District, each Customer shall notify the District as to whether or not it desires the District to proceed with the construction of the second stage of Phase IA of the System. If any Customer elects not to authorize the District to proceed to acquire or construct the second stage of Phase IA, then the District shall not be obligated to so proceed and the District and the Customers shall be relieved from any further obligations one to the other under this Agreement and the District shall return any excess moneys in the Construction Fund which are not needed to pay Project Costs to each Customer as appropriate; provided, however, the District and the other Customers agree to use their best efforts to continue to proceed to construct the System without the declining Customer. If all Customers shall notify the District that they desire the District to proceed with the construction of the second stage of Phase IA of the System, the District shall thereafter establish a Funding Date for the second stage of Phase IA of the System, which Funding Date shall be prior to the time that such construction bids for those contracts contained in the second stage of Phase IA of the System expire, but shall not be less than forty - five (45) days after the receipt of notice from all Customers to proceed with the construction of the second stage of Phase IA of the System. (c) In order to obtain the Project Cost per LUE for Phase IA of the System, which shall be used in determining the amount of the Capacity Charge to be paid by a Category A Customer for Phase IA of the System and which shall be used in determining the amount of Bonds which must be issued for a Category B Customer for Phase IA of the System, Project Costs of each Phase IA of the System shall be divided into Line Project Costs, Treatment Project Phase Costs, and Treatment Project Common Facilities Costs. Each Customer's share of Line Project Costs in Phase IA of the System shall be determined by dividing the Line Project Costs - 15 - of Phase IA of the System by the number of LUEs of Total Reserved Line Capacity in Phase I of the System, and multiplying the result times such Customer's number of LUEs of Reserved Line Capacity in Phase IA of the System. Each Customer's share of the Treatment Project Phase Costs in Phase IA of the System shall be determined by dividing the estimated Treatment Project Phase Costs in Phase IA of the System by the Total Reserved Treatment Capacity of all Customers in Phase IA of the System and multiplying the result times the Customer's number of LUEs of Reserved Treatment Capacity in Phase IA of the System. Each Customer's share of Treatment Project Common Facilities Costs in Phase IA of the System shall be determined by dividing the estimated Treatment Project Common Facilities Costs in Phase IA of the System by the number of LUEs of Total Reserved Common Capacity in Phase IA of the System and multiplying the result times such Customer's number of LUEs of Reserved Common Capacity in Phase IA of the System. After the Funding Date, if the District, on the advice of the District's engineer, determines that its estimate of the cost of acquisition and construction of Phase IA of the System should be increased, it shall calculate the additional cost per LUE in the manner described above and shall promptly notify each Customer in writing of the additional amount that said Customer must pay to the District for deposit into the Construction Fund, the Operation Maintenance Reserve Fund and the Repair and Replacement Reserve Fund, as appropriate. Each Customer shall within ninety (90) days of receipt of such notice pay to the District the additional amount; provided that at the request of any Category B Customer which must pay an additional amount in excess of ten thousand (10,000) dollars which request must be in writing and received by the District at least sixty (60) days prior to the date such additional amounts are payable to the District, the District agrees that it will use its best efforts to issue Bonds on behalf of such Category B Customer to allow for the payment of such amounts; and provided further, that the failure in inability of the District to issue, sell and deliver such Bonds shall not relieve the Category B Customer from its obligation to pay the additional amount. Upon completion of acquisition or construction of Phase IA of the System and payment of all costs of acquisition and construction then due and owing, any remaining moneys in the Construction Fund shall be credited to the Customer's pro rata share of the costs of Phase IB of the System if then under construction, or returned to each Customer if Phase IB is not under construction or the Customer has no capacity in Phase IB. (d) If a Customer elects to be treated as a Category A Customer, it shall pay to the District a Capacity Charge equal to (1) such Customer's share of Line Project Costs determined by dividing the Line Project Costs of Phase IA of the System by the number of LUEs of Total Reserved Line Capacity in Phase IA of the System, and multiplying the result times such Customer's number of LUEs of Reserved Line Capacity in Phase IA of the System plus (2) such Customer's share of the Treatment Project Phase Costs for Phase IA of the System determined by dividing the Treatment Project Phase Costs in Phase IA of the System by the number of LUEs of Total Reserved Treatment Capacity in Phase IA of the System and multiplying the result time the Customer's number of LUEs of Reserved Treatment Capacity in Phase IA of the System plus (3) such Customer's share of Treatment Project Common Facilities Costs determined by dividing the Treatment Project Common Facilities Costs for Phase IA of the System by the number of LUEs of Total Reserved Common Capacity in Phase IA of the System and multiplying the result times such Customer's number of LUEs of the Reserved Common Capacity in Phase IA of the System. The Capacity Charge shall be paid on the Funding Date and shall be deposited by the District into the Construction Fund, the Operation and Maintenance Reserve Fund and the Repair and Replacement Reserve Fund, as appropriate. (e) Funding as provided in this section is subject to the following provisions: (1) It is estimated that reimbursement to be due Austin pursuant to Section 10.04 (b) is $7,150,000, and it is agreed that payment of such $7,150,000, of the amount to be paid by Austin on the Funding Date shall be deferred until completion of the Lake Creek Interceptor and conveyance thereof to the District according to the provisions of Section 10.04 (a) and (b) hereof, at which time - 16 - the amount of deferred payment above shall be credited to the reimbursement of Austin provided for in Section 10.04 (b). Provided however, that if the amount of reimbursement as agreed by the District and Austin to be due Austin is greater than the deferred sum, Austin will be credited with the deferred sum in partial reimbursement and upon completion of Phase IA, the District will, if needed, call for a funding pursuant to Section 6.01 (c), by the Customers of their pro rata share of the balance of such reimbursement due Austin, and, upon receipt of such funds, shall pay Austin the balance of the reimbursement due. If the actual amount of reimbursement due Austin is less than the deferred amount, an amount of the deferred payment equal to the actual amount of reimbursement due shall be credited to Austin's actual reimbursement due, and, upon completion of Phase IA, the remaining balance of Austin's deferred payment shall be paid by Austin into the Construction Fund and credited pursuant to the provisions of Section 6.01 (c). If Austin does not complete the Lake Creek Interceptor as provided for in Section 10.04 (a) within two years from the Funding Date, upon the expiration of such two year period, any deferred funding remaining unpaid shall immediately become due and payable by Austin to the District. (2) It is estimated that reimbursement to be due Round Rock pursuant to Section 10.05 (a) and (b) is $4,862,662, and it is agreed that payment of such $4,862,662 of the amount to be paid by Round Rock on the Funding Date shall be deferred until completion and conveyance of the land and facilities to the District according to the provisions of Section 10.05 (a) and (b) hereof. at which time the amount of deferred payment above shall be credited to reimbursement of Round Rock as provided in Section 10.05 (a) and (b). Provided however, that if the amount of reimbursement agreed by the District and Round Rock to be due Round Rock is greater than the deferred sum, Round Rock will be credited with the deferred sum in partial reimbursement and upon completion of Phase IA, the District will, if needed, call for a funding pursuant to Section 6.01 (c), by the Customers of their pro rata share of the balance of such reimbursement due Round Rock, and, upon receipt of such funds, shall pay Round Rock the balance of the reimbursement due. If the actual amount of reimbursement due Round Rock is less than the deferred amount, an amount of the deferred payment equal to the actual amount of reimbursement due shall be credited to Round Rock's actual reimbursement due, and, upon completion of Phase IA, the remaining balance of Round Rock's deferred payment shall be paid by Round Rock into the Construction Fund and credited pursuant to the provisions of Section 6.01 (c). If Round Rock fails to complete and comply with the provisions of Section 10.05 (a) and (b) within 6 months of the Funding Date, upon the expiration of such 6 month period. and deferred funding remaining unpaid shall immediately become due and payable by Round Rock to the District. (f) If a Customer elects to be treated as a Category B Customer, the District shall use its best efforts to issue Bonds on behalf of such Customer in the amount necessary to allow for a deposit of the Net Bond Proceeds in an amount equal to the sum of (1) such Customer's share of Line Project Costs determined by dividing the Line Project Costs of Phase IA of the System by the number of LUEs of Total Reserved Line Capacity in Phase IA of the System, and multiplying the result times such Customer's number of LUEs of Reserved Line Capacity in Phase IA of the System plus (2) such Customer's share of the Treatment Project Phase Costs for Phase IA of the System determined by dividing the Treatment Project Phase Costs in Phase IA of the System by the number of LUEs of Total Reserved Treatment Capacity in Phase IA of the System and multiplying the result times the Customer's number of LUEs of Reserved Treatment Capacity in Phase IA of the System plus (3) such Customer's share of Treatment Project Common Facilities Costs of Phase IA of the System determined by dividing the Treatment Project Common Facilities Costs for Phase IA of the System by the number of LUEs of Total Reserved Common Capacity in Phase IA of the System and multiplying the result times the Customer's number of LUEs of Reserved Common Capacity in Phase IA of the System into the Construction Fund, the Operation and Maintenance Reserve Fund and the - 17 - Repair and Replacement Reserve Fund, as appropriate, and to allow for a deposit into the Debt Service Reserve Fund of the amount required to be deposited therein pursuant to the Bond Resolution. Such Category B Customer shall pay a Facility Charge to the District to meet the Annual Debt Service Requirement on the Bonds issued on behalf of such Customer. All Facility Charge payments shall be deposited by the District in the Debt Service Fund created by the Bond Resolution. Except as provided below, (1) the Facility Charge will be payable to the District in monthly installments, which shall be due and payable, in immediately available funds, on the last business day of each calendar month and (ii) the monthly Facility Charge shall equal the sum of (w) an amount equal to one - twelfth of the principal of and any redemption premium on Bonds which mature (or are to be redeemed) during the twelve months following such monthly payment date, plus (x) an amount equal to the amount of interest which will be due and payable on the Bonds on the next interest payment date divided by the number of months (or 30 -day periods) between the last succeeding interest payment date and the next preceding interest payment date, plus (y) any fees or expenses of the trustee, paying agent or registrar for the Bonds and plus (z) the amount required to restore any deficiency in the Debt Service Reserve Fund; provided that such Category B Customer shall pay as a special Facility Charge payment on the fifth business day prior to any date on which the District is required to pay principal, premium or interest on the Bonds, the amount, if any, necessary to cause the amount on deposit in the Debt Service Fund created under the Bond Resolution to equal the amount required to be paid to the owners of the Bonds by the District on the next succeeding payment date; and provided further that the obligation of such Category B Customer to pay the amounts described in clauses (w) and (x) above shall be offset by the respective amounts in the Principal Account and the Interest Account of the Debt Service Fund of such Customer. (g) A Customer, to the extent it is a Category B Customer, agrees that its obligation to pay the Facility Charge shall be absolute and unconditional, irrespective of any rights of set -off, diminution, abatement, recoupment or counterclaim the Customer might otherwise have against the District or any other person, and the Customer covenants not to seek and hereby waives, to the extent permitted by applicable law, the benefits of any rights which it may have at any time to any stay or extension of time for performance or to terminate, cancel or limit its liability to pay the Facility Charge. Each Category B Customer hereby agrees that the holders from time to time of the District's Bonds shall be entitled to rely upon the agreement of the Customer to pay the Facility Charge regardless of 'the validity of the remainder of this Agreement or any other agreement. (h) The preceding paragraph shall not be construed to release the District from the performance of any of its agreements contained in this Agreement or, except to the extent provided in this section, prevent or restrict any Category B Customer from asserting any rights which it may have against the District or any other person under this Agreement or under any provision of law or prevent or restrict such Customer, at its own cost and expense, from prosecuting or defending any action or proceeding against or by third parties or taking any other action to secure or protect its rights under this Agreement. (i) To the extent it elects to become a Category B Customer, a Customer recognizes that the Bonds issued by the District on its behalf will be supported by the pledge of the payment of the Facility Charge by the Customer under the terms of its agreement with the District. In order to enable the District to issue the Bonds, such Category B Customer agrees, if requested to do so by the District, to execute a separate agreement with the District, the owners of the Bonds or a trustee acting on behalf of the owners of the Bonds evidencing its unconditional obligation to pay the Facility Charge to enable the District to pay debt service on the Bonds issued by the District on behalf of the Customer. Such additional agreements shall in all respects be consistent with the requirements of this Agreement regarding the payment of the Facility Charge by the Customer. - 18 - (j) The District shall maintain separate accounts in the Construction Fund for each Customer to account for the Customer's pro rata share of the costs of Phase IA of the System. The District shall, with the advice of the Customer, invest the moneys in the Construction Fund in Eligible Securities. All income shall accrue to the benefit of such Customer and shall be paid to the Customer within fifteen (15) days after receipt by the District unless otherwise agreed by the District and such Customer. (k) Notwithstanding anything herein to the contrary, it is understood that Funding of Phase IA of the System shall occur in two stages as the District obtains bids for construction or otherwise acquires the System or parts thereof. The District, with the advice of the Technical Committee and the District's engineer, will establish, and from time to time revise, a budget showing the estimated expenditures of and need for funds to construct or otherwise acquire Phase IA of the System in order to provide the Customers with as much notice as reasonably possible as to when Fundings will occur and how much money will be needed from each Customer. It is understood that each Funding will be designed to provide the District with sufficient funds to enter into all Project 'Contracts, and pay all Project Costs, (including engineering and contingencies) related thereto, to continue prompt construction and acquisition of the System. Section 6.02. CONSTRUCTION OF PHASE IB OF THE SYSTEM. The District at its sole discretion, shall determine when to notify the District's engineers to proceed with the development of plans and specifications and construction of Phase IB of the System. The District shall give the Customers and the Technical Committee forty -five (45) days prior written notice of its intent to so advise the District's engineers. Any Customer or Customers may request in writing that the District proceed with design, construction, and acquisition of Phase IB of the System. Upon receiving such request, the District shall immediately notify all other Customers of such request and ask whether such other Customers desire the District to proceed with development of Phase IB. Within thirty (30) days after receiving such request, the District shall determine whether or not it will proceed with development of Phase IB and shall so notify the Customers and the Technical Committee. If requested by the Customer or Customers after the completion of Phase IA of the System, the District shall apply in its name for all necessary governmental approvals to acquire or construct Phase IB of the System or any part thereof. If the District elects not to proceed with development of Phase IB, then the Customer or Customers desiring to proceed with such development may proceed to design, acquire or construct at their sole expense their share of the capacity in Phase IB as provided herein. Subject only to the other provisions of this section, the District and the Customers agree to support the Customer or Customers designing and constructing such facilities in regard to obtaining necessary governmental approvals and in regard to all other matters related to design, construction and acquisition of said facilities by the Customer and the operation thereof by the District. Specifically, the parties agree that the Customer or Customers proceeding to implement all or a portion of Phase IB may apply for all necessary governmental approvals in the name of said Customer or Customers for their own benefit or as agent or agents of the District. Prior to commencement of such construction by a Customer, the District, with the advice of the Technical Committee, shall have the right to review and approve the plans and specifications for any such construction to ensure that such construction is compatible with the design standards and physical structure of the System, which approval shall not be unreasonably withheld or delayed. After approval os such plans and specifications, such construction shall conform thereto unless the District thereafter approves a change to the plans and specifications. The District shall have the right to inspect the construction during the progress thereof to ensure compliance with the approved plans and specifications. Upon completion of construction and approval thereof by the District, such facilities shall become a part of the System and the Customer or Customers shall be entitled to use said facilities. - 19 - If the District proceeds to design, acquire, or construct Phase IB of the System, then the provisions of Section 6.01 of this Agreement shall apply to the duties and responsibilities of the parties in regard to the design, acquisition and construction of Phase IB of the System in the same manner as applicable to the second stage of Phase IA of the System, except that the second stage of Phase IA" in such Section 6.01 (b) and "Phase IA" elsewhere in Section 6.01 shall instead be "Phase IB ". Each Customer's pro rata share of such amounts shall be payable to the District in the same manner as provided for Project Costs to be paid prior to the other Funding Dates for Phase IA of the System as described in Section 6.01(a). Notwithstanding anything herein or in Sections 6.01 or 11.03 to the contrary, however, it is specifically provided that if the recommended low bid for construction of Phase IB of the System ex- ceeds the estimated construction cost by more than ten (10) percent, then the Customers receiving Reserved Capacity in Phase IB of the System shall review the District's recommendation. Either of such Customers may decide to require the District to reject the bid and redesign or re- advertise the contract. In any event, the District shall be obligated to rebid the construction contract only one time. Thereafter, the District's recommendation shall be final and conclusive. Section 6.03. DEPOSITS ON FUNDING DATE. After the District obtains all funds on the Funding Date for any Phase of the System from the payment of Capacity Charges and from Net Bond Proceeds, the District shall deposit all of said funds into the Construction Fund, the Operation and Maintenance Reserve Fund and the Repair and Replacement Reserve Fund, as appropriate. Section 6.04. SERVICE CHARGE. Every Customer and Additional Customer of each Category (Categories A and B), shall be required to pay a monthly charge (the "Service Charge ") to meet the Annual Operation and Maintenance Expense Requirement. The rate used in determining the amount of the Service Charge shall be established by the Board of Directors of the District and shall be adjusted by said Board from time to time, and in any event at least annually, for all Customers and Additional Customers in order to recover the Operation and Maintenance Expenses of the System during any applicable period. The Service Charge shall be composed of two components, one representing those Operation and Maintenance Expenses which are incurred by the District regardless of the amount of actual use by any Customer or Additional Customer (the "Fixed Charges" and the other representing those Operation and Maintenance Expenses which are directly related to the amount of service actually provided by the District (the "Variable Charges ") which shall be all Operation and Maintenance Expenses other than the Fixed Charges. The rate for Fixed Charges shall be calculated by multiplying a Fixed Charge rate times the Reserved Capacity of each Customer and Additional Customer in the System and Variable Charges shall be calculated by multiplying a Variable Charge rate times the actual amount of Wastewater delivered to the System, expressed in U. S. gallons and determined in accordance with Article IV of this Agreement. Section 6.05. PAYMENTS BY CUSTOMERS AND ADDITIONAL CUSTOMERS FOR FUTURE SYSTEM CAPACITY. (a) All Customers shall be required to share in Project Costs of Expansions of the System if, and only to the extent that, those Customers request additional Reserved Capacity. A Customer which requests additional Reserved Capacity shall be treated as an Additional Customer for such purposes. However, if a Customer does not request additional Reserved Capacity in the Expansion its obligation to pay the Capacity Charge or Facility Charge will not be increased to reflect the additional Project Costs of the Expansion. (b) At such time as the District desires to acquire or construct an Expansion of the System for Additional Customers, it may enter into additional agreements with such Additional Customers, similar to this Agreement, whereby such Additional Customers may acquire Reserved Capacity in the System by payment of either a Capacity Charge or a Facility Charge, as appropriate, and by payment of the Service Charge all -20- in a manner consistent with that previously described herein for Phase I of the System. The parties recognize that the Bonds issued by the District for any Expansion of the System for Additional Category B Customers shall be supported by and be payable from solely the Facility Charges of the Additional Category B Customers under separate Contracts to be signed between the Additional Category B Customers and the District and the Customers shall in no way be responsible for payment of Facility Charges or debt service of Bonds issued to construct an Expansion of the System for the Additional Category B Customers. (c) After the Expansion of the System by the District to serve Additional Customers, each Customer and Additional Customer shall be required to pay a Service Charge calculated in accordance with Section 6.04 above. (d) Any Customer or Additional Customer which requires an Expansion of the System as a result of projected future needs or as a result of a Customer exceeding its discharge rate into the System as set forth in the Engineering Report shall request such Expansion in writing to the District and shall specify in such request the amount of capacity required in the Expansion. Upon receiving a request for Expansion of the System, the District shall, within five (5) days, contact all Customers and Additional Customers to determine whether or not such Customers and Additional Customers desire additional capacity in the Expansion. Any such other requests from the Customers and Additional Customers shall be provided in writing to the District within thirty (30) days after such Customer or Additional Customer receives such notice from the District. If the total of the requests is at least 1 MGD, then the District shall proceed as indicated below. If the total of the requests is less than 1 MGD, the District may deny the request or proceed as indicated below, at its discretion. After receipt of all such requests for Expansion of the System, the District shall determine what capacity in the System, the District shall determine what capacity in the System is presently being utilized by all Customers and Additional Customers. If less than eighty (80) percent of the then Total Reserved Capacity of the System is being utilized, the District need not commence the Expansion for the Customers and Additional Customers as requested by them immediately, but may defer the acquisition or construction of the requested Expansion to a later date to be determined by the District, but to be no later than the date at which time eighty (80) percent or more of the existing Total Reserved Capacity in the System is being utilized by the Customers and Additional Customers; provided that the District is able to find a Customer which is willing to lease its excess capacity in the System to such Additional Customer(s) under terms and at prices to be approved by the District. However, no Customer shall be required to lease its Reserved Capacity in the System. If no Customer is willing to lease such excess capacity or, in any event, once the District determines that eighty (80) percent or more of the existing Total Reserved Capacity in the System is being utilized, the District must commence the requested Expansion if the total requests are at least 1 MGD. If the District fails or is not obligated to commence the required Expansion as indicated herein, any Customer or Additional Customer requesting such Expansion may commence the Expansion at the sole cost of the Customer or Additional Customer and, upon completion of the Expansion, convey the Expansion to the District to own and operate on behalf of the Customer or Additional Customer making the Expansion. The District shall have the right to review and approve any construction of an Expansion by a Customer or Additional Customer. Section 6.06. CAPITAL RECOVERY FEE. (a) The parties recognize that certain costs of the facilities (as described in the Engineering Report) being acquired or constructed in Phase 1 of the System will be incurred because (1) such facilities are designed and built to serve the needs not only of the Customers of Phase I of the System, but are designed and will be constructed to benefit all Customers and Additional Customers of the System, or (2) are costs for facilities which the District is required to construct or acquire in order to accomplish Phase I of the System as a regional system. It is - 21 - recognized and agreed between the parties that these costs for facilities, referred to as the Common Facilities, include the following: (1) Phase IA Line Project Costs, including the amount paid to Austin for the Lake Creek Interceptor. (2) Phase IA Plant Site; (3) Phase IA Treatment Project Common Facilities Costs (4) Costs of obtaining any wastewater discharge permits necessary to acquire, construct, improve or operate Phase I of the System; provided, however, that in regards to obtaining wastewater discharge permits for Phase IB of the System, if more than two permits are obtained for Phase IB of the System, then all costs for permits for Phase IB over and above said two permits shall be Treatment Plant Common Facilities Costs only for purposes of computing the Capital Recovery Fee, and shall be considered as Treatment Plant Phase Costs for purposes of distributing said costs among the Customers; and (5) Such other items as determined by the District. (b) The parties recognize that the Customers, by paying the Project Costs of Phase IA of the System, will be funding the cost of the Common Facilities. The parties therefore agree that the District, prior to the time that it enters into agreements with Additional Customers, will establish a Capital Recovery Fee for Additional Customers a pro rata share of the cost of the Common Facilities. (c) The Capita] Recovery Fee shall be calculated as follows: the District will determine the cost of each Common Facility, including an appropriate amount for Project Costs incurred by the District in the acquisition or construction of Phase I of the System which should be allocated to all Customers and all Additional Customers because such costs are related to implementing the System for the entire Brushy Creek Watershed as opposed to only benefiting specific Customers. In order to determine the Capital Recovery Fee per LUE for each Expansion, the District will divide the cost of the Common Facilities (increased by ten (10) percent each year, or part thereof, for inflation and carrying costs) by the number of LUEs in Phase I and the Expansion of the System. The resulting cost per LUE for all of the Common Facilities shall be used in determining the Capita] Recovery Fee td be charged by the District per LUE of Reserved Capacity for any Additional Customer. The District shall, prior to agreeing to expand the System for Additional Customers, determine the Capital Recovery Fee in accordance with this formula and shall establish such a Capita] Recovery Fee by appropriate action of the District's Board of Directors. If the total actual demand of the Reserved Capacity for all of the Additional Customers who participate in a given Expansion is less than the total Reserved Capacity provided in the Expansion, such Additional Customers shall pay on a pro rata basis, in proportion to the actual demand of the Reserved Capacity each of them acquires in the Expansion, the Capital Recovery Fees for the LUEs provided in the Expansion in excess of their actual demand of the Reserved Capacity in the Expansion. Additional Customers having rights to LUEs in the Reserved Capacity of the Expansion in excess of their actual demand in the Expansion may sell, transfer or assign their excess LUEs to other parties at their cost, plus interest at 10% per annum for inflation and carrying costs, subject to prior verification by the District that the price being charged per LUE does not exceed the amount authorized under the foregoing formula and subject to prior approval the District of the part to whom the LUEs are being assigned, which approval shall not be unreasonably withheld or delayed. - 22 - (d) In addition to all other charges previously described herein, at the time the District executes an agreement with any Additional Customers for Reserved Capacity in any Expansion of the System, the District shall require payment by the Additional Customer of the Capital Recovery Fee. The Capital Recovery Fee shall be paid to the District prior to the commencement of acquisition and construction of any Expansion of the System. Within thirty (30) days after receipt of the Capital Recovery Fee by the District, the District shall pay the moneys thus received to the Customers in the proportion that each Customer's Reserved Capacity of all Customers in Phase I of the System. (e) After such an Expansion, future Capital Recovery Fees shall be calculated and implemented in the same manner as previously described in this section except that Additional Customers that have previously paid a Capital Recover Fee shall be entitled to reimbursement from future Capital Recovery Fees on the same basis as the Customers. Section 6.07. DEFAULT (a) In the event any Customer or Additional Customer defaults in the payment of the Facility Charge or Service Charge required hereunder, the District shall immediately give notice of such default to such Customer or Additional Customer and other Customers or Additional Customers; provided, however, that nothing in this section shall prevent any Customer from paying under protest any amount alleged as owed by the District or prevent the District from accepting any payment even if less than the amount alleged by the District as owed by the Customer. Payment or receipt of any such disputed amount shall not be construed as a waiver of any right of the party making or receiving such disputed amount to contest such matter and to demand payment or receipt of a different amount. Thereafter, the defaulting Customer or Additional Customer shall take all appropriate steps to correct such default and shall correct such default within ten (10) days after receipt of such notice. Any past due amount shall be paid, together with interest at ten (10) percent per annum thereon, or the maximum legal rate of interest then in effect, whichever is lesser. In the event such default remains unremedied for a period of thirty (30) days from the date of receipt of notification of default, then the District may terminate service to such defaulting Customer or Additional Customer after providing ten days' written notice to such defaulting Customer or Additional Customer of its intention to so terminate service hereunder. If such default remains unremedied for a continuous period of ninety (90) days from the date of receipt of notification of default, then the District shall notify all Customers and Additional Customers of such fact and the District shall, after giving the defaulting Customer or Additional Customer ten (10) written notice, terminate the contract between the District and such a defaulting Customer or Additional Customer by delivery of a written notice to such Customer or Additional Customer. The Customers agree that the District shall have the right to so terminate this Agreement as to any defaulting Customer in the event such defaulting Customer is in default of any of its obligations hereunder as described in this section and the defaulting Customer. in the even of termination of its rights under this Agreement by the District as provided herein, waives any and all of its rights to seek any damages or other remedy against the District or any of the Customers or Additional Customers of the District or to claim any amounts as due and owing to it from the District or other Customers or Additional Customers wither from amounts then on hand or to be paid in the future to the District or such other Customers and Additional Customers. (b) It is specifically provided that regardless of any other provisions in this Agreement or in similar contracts executed between the District and Additional Customers, in the event a Category B Customer or Additional Category B Customer defaults in the payment of its Facility Charge, then the following shall occur: (1) The District shall immediately give written notice to such defaulting Category B Customer or Additional Category B Customer and to all other Customers and Additional Customers of such default. If such default is not fully remedied within ten (10) days after receipt of such notice by the defaulting party, - 23 - then the District shall immediately take all actions necessary and appropriate to cause such defaulting party to correct such default including pursuing all legal remedies such as mandamus of the officials of such defaulting party. (2) If such default remains unremedied for a continuous period of ninety (90) days from the date of receipt of notification of default, then the District shall notify all Customers and additional Customers of such fact and shall take all actions necessary to terminate service to such defaulting party. If the District terminates service to such defaulting Category B Customer or Additional Category B Customer and terminates the contract entered into between the District and such defaulting party, then the Reserved Capacity in the System of such defaulting party shall be owned by the District. The District may execute additional contracts with Customers, Additional Customers or other persons similar to this Agreement, which contracts would provide the District with the necessary revenues to pay the Annual Debt Service Requirement related to Bonds issued on behalf of such defaulting Category B Customer or Additional Category B Customer for the System and the District may reserve for any such part that enters into any such contract with it that portion of the Reserved Capacity in the System that was previously reserved for the defaulting Category B Customer or Additional Category B Customer. All Customers agree to cooperate with the District in enabling the District to enter into any such contracts in order to prevent a default in the payment of the debt service on Bonds issued by the District to acquire or construct the System. (c) Termination of the rights of a defaulting Customer shall not relieve the Customer from the performance of any of its obligations hereunder. Section 6.08. SURCHARGE. The Annual Operation and Maintenance Expense Requirement allocable to a Customer or Additional Customer may be increased by a surcharge as described in Section 5.03. In the event a Customer is assessed a surcharge, the District will bill such Customer for such surcharge monthly as determined by the District following the determination of the surcharge and such Customer shall pay such surcharge within ten (10) days of the receipt of any such bill. Any such surcharge collected by the District shall be applied by the District against the total cost of Operation and Maintenance Expense of the System. Section 6.09. MANAGEMENT FEE. It is agreed between the parties that, in addition to all other compensation or reimbursement authorized and required to be made to the District by the Customers as otherwise provided in this Agreement, the District shall receive annually on each February 1 a fee in the total aggregate amount from all Customers of twenty thousand (20,000) dollars per year to compensate the District for the increased administrative responsibility borne by the District in fulfilling its management obliga- tions under this Agreement. This shall include the $20,000 annual fee for 1988 which shall be paid to the District upon receipt of construction funding. The parties agree that such fee shall be a Project Cost of Phase IA of the System until the completion of Phase IA of the System and, in connection therewith, shall be considered a Line Project Cost. After 'completion of construction of Phase IA of the System, such fee shall be considered an Operation and Maintenance Expense of the System and shall be part of the Fixed Charges of the System. Money received by the District from such fee may be used for any lawful purpose. Section 6.10. PAYMENTS BY CUSTOMERS (a) Recognizing that the District will use payments received from each Customer to the extent such Customer is a Category B Customer to pay, secure and finance the issuance of the Bonds, it is hereby agreed that upon the effective date of this Agreement, each Customer, to the extent it is a Category B Customer, shall be unconditionally obligated to - 24 - pay the Facility Charge regardless of whether or not such Customer actually discharges Wastewater hereunder, whether due to Force Majeure or otherwise. (b) On or before March 15 of each year the District will furnish each Customer with an estimated schedule of monthly payments to be made by the Customer for the ensuing System Year. One or before June 1 of each year, the District shall furnish each Customer with a finalized schedule of the monthly payments to be made by such Customer to the District for the ensuing System Year. Each Customer hereby agrees that it will make such payments to the District on or before the last day of each month of such System Year. If a Customer at any time disputes the amount to be paid by it to the District, such Customer shall nevertheless promptly make the payment or payments determined by the District, and, if it is subsequently determined by agreement, arbitration, administrative agency or court decision that such disputed payments made by the Customer should have been less, the District shall promptly revise and reallocate the charges among all Customers and Additional Customers then being served by the District in such manner that such Customer will recover its overpayment together with interest thereon at reasonable rate to be determined by the District. (c) If a Customer's Facility Charge or Service Charge is redetermined as herein provided, the District will promptly furnish the Customer with an updated schedule of monthly payments reflecting such redetermination. (d) All interest income earned by the investment of any funds created in the Bond Resolution or any other funds related to the System shall be taken into account in determining the Facility Charge and the Service Charge. ARTICLE VII REQUIRED IMPROVEMENTS Section 7.01. DISTRICT TO DETERMINE REQUIRED IMPROVEMENTS. In the event that Required Improvements of the System are necessary in order to treat and dispose of waste adequately in accordance with the orders, rules, regulations or requirements of any regulatory body, other than the District, the District will determine the Required Improvement which is necessary. The District's determination that Required Improvements are necessary to enable the System to meet the waste treatment and disposal requirements of the Customers and Additional Customers shall be supported by a certificate from the District's consulting engineer which certifi- cate shall be submitted to the Customers and the Technical Committee. Section 7.02. DISTRICT'S DUTY TO MAKE REQUIRED IMPROVEMENTS. The District shall design, acquire, construct, own, operate, maintain and repair all Required Improvements. The District's obligation to acquire or construct any Required Improvement shall be contingent upon and subject to: (1) the District's obtaining sufficient funds to pay the Project Costs of the Required Improvement of the System including the payment of any Capacity Charges and the sale and delivery upon terms satisfactory to the District of the Improvement Bonds for any Required Improvement of the System: (2) the District's ability to obtain all sites, rights -of -way, easements, labor, equipment and materials required for acquisition or construction of any Required Improvement of the System; and (3) the District's obtaining all permits, approvals and licenses required to acquire or construct the Required Improvement and to operate the System thereafter, including waste discharge permits issued by the Texas Water Commission or its successors and approval of the project and Improvement Bonds issued therefor by the Texas Water Commission or its successors. - 25 - Section 7.03. CUSTOMER'S OBLIGATIONS IN EVENT OF REQUIRED IMPROVEMENT. (a) In the event the District determines that a Required Improvement is necessary, it shall notify all Customers, Additional Customers and the Technical Committee in writing of such fact. Such notice shall specify a date by which such Customer or Additional Customer shall be liable for contribution of its share of all funds necessary for acquisition or construction of the Required Improvement. either by way of a Capacity Charge therefor or by the District's issuance of Bonds therefor on behalf of such Customer or Additional Customer. The date so specified shall be not less than forty -five (45) days after such notice is mailed. Such notice shall include the estimated total Project Costs of the Required Improvement, the estimated Project Cost of the Required Improvement per LUE, and the number of LUEs for which each Customer and Additional Customer is responsible. At least thirty (30) days prior to such date, each Customer shall notify the District as to whether it desires to be treated as a Category A Customer or (Additional Category A Customer) or Category B Customer (or Additional Category B Customer) for the purposes of such Required Improvement. (b) In the event the Customer elects to be treated as a Category A Customer (or Additional Category A Customer) for purposes of such Required Improvement, it shall pay a Capacity Charge to the District by the date specified in the notice, which Capacity Charge shall be determined in the manner described in Article VI. (c) In the event the Customer elects to be treated as a Category B Customer (or Additional Category B Customer) for purposes of the Required Improvement, the District shall use its best efforts to issue Improvement Bonds on behalf of the Customer in an amount sufficient to provide from the Net Bond Proceeds the amount sufficient to pay the Customer's share of the Project Costs of the Required Improvement in the manner described in Article VI. (d) If, thereafter, the estimated costs of the Required Improvement increase, the District shall notify the Customers and the Technical Committee of such fact in the same manner as provided in Section 6.01 hereof in connection with the acquisition or construction of Phase IA of the System and the Customer shall be required to provide additional Capacity Charge payments or be responsible for additional Improvement Bonds, as appropriate, in the same manner as provided in Section 6.01 hereof in connection with the acquisition or construction of Phase IA of the System. (e) The Category B Customers shall thereafter be responsible for payment of any Facility Charge, if appropriate, and any Service Charge related to the Required Improvement in the same manner as provided in Article VI hereof. ARTICLE VIII GENERAL PROVISIONS Section 8.01. OBLIGATIONS OF CUSTOMERS. Unless otherwise specifically provided in writing by subsequent agreement between the District and any Customer, the District shall never have the right to demand'payment by a Customer of any obligation assumed or imposed on it under and by virtue of this Agreement from funds raised or to be raised by taxation, it being expressly understood by the parties hereto that all payments due by the Customers hereunder are to be made from the revenues and income received by each Customer from its waterworks and sanitary sewer systems. Section 8.02. PAYMENTS TO CONSTITUTE OPERATING EXPENSES OF CUSTOMER. Each Customer represents and covenants that the services to be obtained pursuant to this Agreement are essential and necessary to the operation of the Customer and its own Wastewater facilities, and that all payments to be made hereunder by it will constitute reasonable and -26- necessary "operating expenses" of the Customer's waterworks and sanitary sewer systems, within the meaning of Article 1113, Vernon's Texas Civil Statutes, if appropriate, and the provisions of all ordinances authorizing the issuance of all bonds of the Customer which are payable from revenues of the Customer's waterworks and sewer systems. Section 8.03. CUSTOMER TO ESTABLISH ADEQUATE RATES. Each Customer agrees to establish and collect such rates and charges for its water works and Wastewater services to be supplied by its system as will make possible the prompt payment of all expenses of operating and maintaining its system including the payments contracted hereunder,and the prompt payment of the principal of and interest on its obligations, if any, payable from the revenues of its waterworks and Wastewater systems. Section 8.04. MANDAMUS AND OTHER REMEDIES AGAINST CATEGORY B CUSTOMERS. To the extent the Customer is a Category B Customer, the parties recognize that the District will be issuing its Bonds on behalf of such Customer and will pledge the revenues from the Facility Charge to secure payment of principal of, premium. if any, and interest on the Bonds. Therefore, the parties agree that, in addition to all other remedies provided herein or at law or in equity, each Category B Customer agrees that the District or any other Customer shall be entitled to a writ of mandamus issued by a court of competent jurisdiction compelling and requiring the Category B Customer to take all actions covenanted herein and to make prompt payment of the Facility Charge and other payments contracted to be made herein and to observe and perform the covenants, obligations and conditions imposed in this Agreement. Section 8.05. OTHER REMEDIES. The District also agrees that each Customer shall be entitled to a writ of mandamus or injunctive relief from a court of competent jurisdiction compelling and requiring the District to perform the covenants, obligations and conditions imposed upon the District in this Agreement. Section 8.06. USE OF PUBLIC PROPERTY. By these presents, each Customer, to the extent capable under existing law, authorizes use by the District of streets and general utility or sewer easements of the Customer for construction, operation and maintenance of the System, so long as such use by the District is in compliance with the terms of any easement utilized by the District and does not interfere with any lawful use by the Customer and subject to all of the Customer's ordinances, rules and regulations respecting the manner of such use and restoration of lands, pavement or improvements resulting from exercise of the rights provided in this section, including the cost of relocation of any facilities located within any such easement as an expense of the System. The District will cooperate with each Customer in the timing, planning and installation of the System to be constructed and installed by the District. Section 8.07. USE OF REVENUES OF SYSTEM. All revenues received from any source whatsoever by the District by reason of its ownership of this System shall, to the extent permitted by law, be credited to the funds of the System as established herein and in the Bond Resolutions and, to the extent required or permitted, be credited to the appropriate Customer. To the extent permitted by law, if the District receives income from the use of treated Wastewater, prior to its discharge into a public stream of the State of Texas, the District will apply said income against the Operation and Maintenance Expense of the System. No funds derived from the Customers and Additional Customers shall ever be used for the benefit of any project the revenues of which have been excluded from the pledge for payment of the Bonds hereunder or which may be so excluded in the future. Section 8.08. FORCE MAJEURE. In case by reason of "Force Majeure" any party hereto shall be rendered unable wholly or in part to carry out its obligations under this Agreement, then if such party shall give notice and full particulars of such "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, with the exception of the - 27 - obligation of a Category B Customer to pay Facility Charges, if appropriate, shall be suspended during the continuance of the inability then claimed, but for no longer period, and any such 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, lightening, earthquakes, fires, hurricanes, storms, floods, washouts, droughts. arrests, restraint of government and people, civil disturbances. explosions, breakage or accidents to machinery, pipelines or canals, partial or entire failure of water supply and inability on the part of such Customer to provide water necessary for operation of its water and Wastewater system hereunder or of the District to receive Wastewater on account 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 8.09. INSURANCE. The District will, and the Bond Resolution will contain appropriate provisions requiring the District to, carry insurance for purposes including, without limitation, those purposes contemplated in Sections 1.01 (cc) and (hh) and in amounts which would ordinarily be carried by a privately owned utility company under contract to perform services similar to those undertaken by the District in the Agreement. Such provisions will be so designed as to afford protection not only for the owners of the Bonds but to assure and facilitate, to the extent feasible and practicable, the restoration of damaged or destroyed properties and to minimize the interruption of service to the Customers and others. Section 8.10. REGULATORY BODIES. This Agreement shall be subject to all valid rules, regulations and laws 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 8.11. DISTRICT CONTRACTS WITH OTHERS. The District reserves the right to contract with other persons, natural or corporate, private or public, to perform services similar to those to be performed under this Agreement or other services; provided, however that no contract will be made for service within a Customer's limits or within the extraterritorial jurisdiction of any Customer, if appropriate, as defined, in Article 970a, Vernon's Annotated Civil Statutes, on the date of such contract, without the District first allowing such Customer a reasonable opportunity (not to be less than three months) to agree to provide Wastewater service to any such person. Section 8.12. ADDITIONAL CAPACITY AND FACILITIES. As the responsible agency for the establishment, administration, operation and maintenance of the System, the District will, from time to time, as provided previously herein, determine when it is necessary to provide additional facilities to receive, transport, treat and dispose of additional Wastewater of the Customers and any Additional Customers. In making the determinations called for herein, District covenants that such determinations will be made only after detailed studies of statistical data available as to the need and feasibility have been made and after consulting with consulting engineers and financial advisors. Each Customer will be kept advised at all times of planning and proposed development of the System. Section 8.13. CONTRACTS WITH OTHERS. Each Customer shall have the right to enter into contracts with other persons natural or corporate, private or public, to receive Wastewater from such persons. Each Customer covenants that it will advise the District of all such written - 28 - contracts and will, if requested by the District, furnish the District with a list of all customers other than retail, residential customers. Section 8.14. ANNUAL REPORT AND AUDIT OF SYSTEM. The District shall, at the close of each Fiscal Year, cause to be prepared an annual report and audit of the System. Such report shall contain such matters and information as may be considered necessary and useful by the District and as customarily supplied in an audit performed by and certified by a nationally recognized independent public accounting firm. A copy of the annual report and audit and accompanying management letter shall be promptly provided to each Customer and the Technical Committee. Such report shall be prepared in conformity with applicable law. Section 8.15. GOVERNMENTAL REGULATIONS. In each instance herein where reference is made to a federal or State regulation, it is the in- tention of the parties that at any given time the then current edition of any such federal or State regulation shall apply. New standards shall be adopted by the District which are in compliance with applicable State and federal laws and any valid rules and regulations issued pursuant thereto. Section 8.16. OPERATION OF THE SYSTEM. The District covenants that it will operate the System in accordance with accepted good business and engineering practices and in accordance with requirements of the Clean Water Act and the Texas Water Code, as amended, and as said laws may be amended in the future, and any rules and regulations issued and to be issued by appropriate agencies in the administration of said laws. The Customers and the District agree that their obligations hereunder shall include compliance with the requirements made under said laws, and any rules and regulations issued pursuant thereto. Section 8.17. REGIONAL DESIGNATION. The parties recognize that the District has been designated as the entity to provide regional Wastewater system services to the upper Brushy Creek watershed by the Texas Water Development Board pursuant to the powers previously vested in the Board by Chapter 26, Texas Water Code. The District covenants that it will faithfully and diligently perform its duties as the regional provider of Wastewater services in the upper Brushy Creek watershed as provided in Chapter 26, Texas Water Code. Section 8.18. NO ADDITIONAL WAIVER IMPLIED. No waiver or waivers of any breach or default (or any breaches or defaults) by any party hereto of any term, covenant, condition, or liability hereunder, or of performance by the other parties of any duty or obligation hereunder. shall be deemed or construed to be a waiver of subsequent breaches or defaults of any kind, under any circumstances. Section 8.19. ADDRESSES AND NOTICE. Unless otherwise provided in the Agreement, any notice, communication, request, reply, or advice (herein severally and collectively, for convenience, called "Notice ") herein provided or permitted to be given, made or accepted by any party to the others must be in writing and may be given or be served by depositing the same in the United States mail postpaid and registered or certified and addressed to the party to be notified, with return receipt requested, or by delivering the same to an officer of such party, or by prepaid telegram, when appropriate, addressed to the party to be notified. Notice deposited in the mail in the manner hereinabove described shall be conclusively deemed to be effective, unless otherwise stated in this Agreement, from and after the expiration of four (4) days after it is so deposited. Notice given in any other manner shall be effective only if and when received by the party to be notified. For the purpose of notice, the addresses of the parties shall. until changed as hereinafter provided, be as follows: If to the District, to: Brushy Creek Water Control and Improvement District No. 1 of Williamson and Milam Counties P. 0. Box 882 Taylor, Texas 76574 Attention: President, Board of Directors -29- If to Austin, to: City of Austin P. 0. Box 1088 Austin, Texas 78767 -8828 Attention: Director, Water and Wastewater Utilities. If to Round Rock, to: City of Round Rock 221 E. Main Street Round Rock, Texas 78664 Attention: City Manager The parties 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' written notice to the other parties. Section 8.20. MODIFICATION. This Agreement shall be subject to change or modification only with the mutual consent of the governing bodies of each of the parties hereto, but the parties recognize that the Bond Resolution may contain covenants by the District not to consent to certain changes or modifications of this Agreement. Section 8.21. ASSIGNABILITY. This Agreement shall not be assignable by any party without the prior written consent of the other parties, which consent shall not be unreasonably withheld or delays. Section 8.22. 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 the Agreement to other persons or circumstances shall not be affected thereby. Section 8.23. MERGER. This Agreement constitutes the entire agreement between the parties relative to the subject matter thereof. There have been and are no agreements, covenants, representations or warranties between the parties other than those expressly stated herein or expressly provided for herein. ARTICLE IX DISTRICT SYSTEM BUDGET Section 9.01. FILING WITH CUSTOMERS. Not less than forty (40) days before commencement of the second Fiscal Year and not less than forty (40) days before the commencement of each Fiscal Year thereafter while this Agreement is in effect, District shall cause to be prepared and filed with the Technical Committee and each Customer and Additional Customer its tentative budget for the operation of the System for the next ensuing Fiscal Year. If no protest or request for a hearing on such tentative budget is presented to District within twenty five (25) days after such filing of the tentative budget by one or more Customers or Additional Customers. the tentative budget for the System, when adopted by the District's Board of Directors, shall be considered for all purposes as the "System Budget" for the next ensuing Fiscal Year. But if a protest or request for a hearing is duly filed, it shall be the duty of the District to fix a date and time for a hearing on the tentative budget before the Board of Directors of the District and the District shall so advise the Technical Committee, all Customers and Additional Customers in writing. After said hearing, the Board of Directors of District may adopt the budget or make such amendments thereof as to it may seem proper. The budget thus approved by the Board of Directors of the District shall be the System Budget for the next ensuing Fiscal Year. - 30 - ARTICLE X OTHER MATTERS Section 10.01. AGREEMENT CONCERNING PERMITS FOR EXISTING UTILITY SYSTEMS. By the execution of this Agreement, the Customers and the District agree that they will not protest or take any action to prevent or delay any permit amendment, renewal, extension, temporary order or other authorization sought by a Customer to enable the Customer to continue operation of its existing Wastewater treatment plants. Section 10.02. INTERIM CAPACITY IN ROUND ROCK WASTEWATER TRANSPORTATION AND TREATMENT SYSTEM. The District agrees to use its best efforts to negotiate and execute an agreement with Round Rock to obtain wastewater transportation and treatment capacity and services in the Round Rock wastewater transportation and treatment system, to provide interim wastewater treatment and disposal service to Austin pending construction of the District's proposed wastewater plant to be constructed in Phase IA and to provide interim wastewater transportation capacity pending the completion of Phase IA of the System. Section 10.03. OWNERSHIP OF SYSTEM. (a) Notwithstanding anything to the contrary hereinbefore provided, to the extent a Customer has been credited with Capacity Charge payments as shown on Exhibit "B ", and hereafter agrees to pay Capacity Charges as a Category A Customer, then such Customer shall own an undivided interest in the Phase of the System being acquired or constructed in the ratio that such Customer's Reserved Capacity purchased by such payments in that Phase of the System bears to the Total Reserved Capacity of that Phase. Such undivided interest shall be represented by the right of the Customer to deliver Wastewater to the District for collection and treatment as provided in this Agreement. In such event, the Customer designates the District as the sole and exclusive manager and operator of the System under the provisions of this Agreement for the longer of the term of this Agreement or so long as any Bonds or Additional Bonds issued by the District remain outstanding. As manager and operator, the District is authorized to enter into all contracts necessary or convenient to perform its responsibilities, including contracting with other persons to perform such functions on behalf of the District. Further, in such event, wherever this Agreement refers to the District as the owner or operator of the System, such rights shall be construed to mean the right of the District to be the sole and exclusive manager and operator of such Customer's undivided interest in the System. (b) Notwithstanding anything to the contrary hereinbefore provided, to the extent a Customer agrees to pay Facility Charges as a Category B Customer, then so long as any Bonds or Additional Bonds issued by the District on behalf of such Customer remain outstanding, the District shall own and undivided interest in the Phase of the System being acquired or constructed in the ration that such Customer's share of the Reserved Capacity purchased by such payments in that Phase of the System bears to the Total Reserved Capacity of that Phase. Such undivided interest shall be utilized solely to provide Wastewater collection and treatment services to such Customer as provided herein. Upon payment of all principal, interest and other charges related to such Bonds and Additional Bonds by such Customer (it being understood that such payments constitute installment sales of the District's undivided interest in the System), the District shall convey such undivided interest to the Customer. In such event, if other Bonds or Additional Bonds issued by the District on behalf of other Customers or Additional Customers remain outstanding, the Customer designates the District as the sole and exclusive manager and operator of the System under the provision of this Agreement for the longer of the term of this Agreement or so long as any Bonds or Additional Bonds issued by the District remain outstanding. As manager and operator, the District is authorized to enter into all contracts necessary or convenient to perform its functions, including contracting with other persons to perform such functions on behalf of the District. Further, in such event. whenever this Agreement refers to the rights of the District as the owner or operator of the System, such - 31 - rights shall be construed to mean the right of the District to be the sole and exclusive manager and operator of the Customer's undivided interest in the System. (c) Pursuant to Resolution dated August 20, 1987, Williamson County Municipal Utility District No. 2 (MUD 2) gave notice to the District that MUD 2 elected not to authorize the District to proceed to acquire or construct Phases IA and IB of the System pursuant to that certain Wastewater Disposal Contract between the District, Austin, Round Rock, MUD 2 and MUD 3, dated December 16, 1985 ( "Contract ") thereby relieving itself, the District and the other Customers of any further obligation one to the other under such Contract. The District has received $984,361.25 in funding from MUD 2 under such Contract and has returned to MUD 2 excess moneys in the Construction Fund pursuant to such Contract and it is recognized that MUD 2 shall have no rights or obligations under this Agreement. (d) Pursuant to Section 6.01 (b) of the Contract the District has or shall return excess monies remaining in the Construction Fund in the name of Williamson County Municipal Utility District No. 3 (MUD 3) to MUD 3 and MUD 3 shall have no rights or obligations under this agreement. Section 10.04. PROVISIONS APPLICABLE TO AUSTIN. (a) It is expressly understood and agreed that Austin intends to acquire and construct at its sole expense and option that portion of the Lake Creek Interceptor from its uppermost point to the Davis Springs Transfer Line as described in the Engineering Report, including all necessary land, easements, and right -of -way therefor, and, after completion of said facilities, shall, if allowed by applicable law, convey said facilities along with the land, easements, or right -of -way upon which the facilities are located to the District which shall therefore own and operate said facilities as part of the System. (b) Upon completion of the Lake Creek Interceptor and conveyance thereof to the District, the District agrees to reimburse Austin for the costs thereof plus interest on said costs at a rate of interest equal to the net effective interest rate on bonds issued by or on behalf of Austin to pay for such costs with interest accruing from the date or dates of each payment of such costs by Austin to the date of payment therefor by the District. Such reimbursement shall be made in accordance with the provisions of Section 6.01 (e) (1). (c) Notwithstanding anything to the contrary hereinbefore provided, it is specifically agreed that Austin may, in the event that use of the existing 1.3 MGD wastewater treatment plant owned by Williamson County Municipal Utility District No. 1 located at Anderson Mill subdivision is permanently discontinued, acquire 1.3 MGD of additional capacity in an Expansion of the System without being required to pay any Capital Recovery Fee as otherwise provided in Section 6.06. Section 10.05. PROVISIONS APPLICABLE TO ROUND ROCK. (a) It is expressly understood and agreed that Round Rock has acquired the plant site for the District's Wastewater treatment plant at great expense and Round Rock hereby agrees, if allowed by applicable law, to convey to the District ownership of such plant site free and clear of all liens and encumbrances except as otherwise agreed to by the District. The purchase price shall be twenty thousand (20,000) dollars per acre for approximately twenty -five (25) acres as described in Exhibit "E" attached hereto. Such sale shall be consummated upon receipt by the District of the funding for the first stage of Phase IA of the System. (b) The District agrees also to reimburse Round Rock for any and all out -of- pocket expenses incurred by Round Rock for design, acquisition or construction of facilities including access easement to the plant site as described in Exhibit "F" attached hereto, for Phase IA of the System (except for costs of acquiring any governmental permits), such reimbursement to occur upon conveyance of such easement and facilities. -32 - Such reimbursement shall include interest on such costs calculated at a rate of interest equal to the net effective interest rate on bonds issued by Round Rock to pay such costs with interest accruing from the date or dates of each payment of such costs by Round Rock to the date of payment therefor by the District. Such reimbursement shall be made in accordance with the provisions of Section 6.01 (e) (2). (c) Notwithstanding anything to the contrary hereinbefore provided, it is specifically agreed that Round Rock may, in the event it permanently discontinues use of its existing 3 MGD wastewater treatment plant located at its existing site on Austin Avenue in Round Rock, acquire 3 MGD of additional capacity in an Expansion of the System without being required to pay any Capital Recovery Fee as otherwise provided in Section 6.06. (d) It is expressly understood and agreed that Round Rock has constructed wastewater treatment improvements on the plant site referred to in 10.05 (a) above and that it will continue to operate and maintain said facilities for a period of time. The District shall lease to Round Rock approximately '1.582 acres as described in Exhibit "G" for $1.00 per year. Round Rock shall have access to and through the entire 25 acre tract and access easement so long as Round Rock continues to operate and maintain its facilities. Section 10.06. PROVISIONS APPLICABLE TO FERN BLUFF MUD AND MILBURN INVESTMENTS, INC. It is understood and acknowledged by the parties that Milburn Investments, Inc. ( "Milburn ") has constructed certain wastewater facilities for the provision of wastewater service by the District to Fern Bluff Municipal Utility District ( "Fern Bluff ") through Austin's participation in the Regional System. The facilities ( "Fern Bluff Facilities ") consist of the Onion Creek Lift Station described in the plans and drawings and specifications for District Contract No. 4, the Onion Creek 16 -inch Force Main generally paralleling the eastern boundary of Tonkawa Springs, and the Onion Creek 24 -inch Interceptor described in the plans and drawings and specifications of the District's Contract No. 5 - Phase I. Milburn agrees to convey and the District agrees to purchase the Fern Bluff Facilities at such time that the District has received funds from the Customers for Phase IA of the System pursuant to Section 6.01(b) of this Agreement, provided that the District's purchase of the Fern Bluff facilities is and shall be conditioned upon compliance by Milburn with the terms and conditions set forth in that certain Agreement Regarding Construction, Ownership, Purchase and Use of Specific Wastewater Transportation Facilities, dated October 15, 1986. The purchase price of the Fern Bluff Facilities shall equal seventy percent (70 %) of the costs approved by the District for constructing the Fern Bluff Facilities. The purchase price will consist of the costs of engineering, including design, construction administration, construction staking and resident project representation; construction costs; and easements including costs of acquisition of such easements. Subject to the condition set forth above regarding compliance with the terms and conditions of the October 15, 1986 agreement, the closing of the purchase and sale shall be within thirty (30) days after the occurrence (1) the District's receipt of the funding for the first stage of Phase IA of the Regional System and (2) the completion of an audit of the purchase price. At such closing the District shall pay the purchase price to Milburn and Milburn shall convey title to the Fern Bluff Facilities to the District along with any warranties or other guarantees. The conveyance shall be free and clear of all liens and encumbrances. ARTICLE XI TECHNICAL COMMITTEE Section 11.01. COMPOSITION OF TECHNICAL COMMITTEE. There is hereby created a Technical Committee to be composed of the following: (a) Two representatives appointed by Austin; (b) Two representatives appointed by Round Rock; and (c) One representative appointed by the District. - 33 - The governing bodies of the Customers shall each appoint their representatives (and alternate representatives to serve in the absence of the Customer's representatives) to the Technical Committee within ten (10) days after execution of this Agreement, and shall immediately notify the District of such appointment. The District shall, within ten (10) days thereafter, appoint its representative (and alternate representative to serve in the absence of the District's representative) to the Technical Committee and shall promptly notify all Customers of the representatives (and their alternates, it being understood that there may be more than one alternate for each representative) initially comprising the Technical Committee. Each representative (or alternate representative), of a Customer or the District shall serve at the will of the governing body which the person represents. Upon the death. signation or revocation of the power of such representative (or alternate representative), the governing body of the appropriate entity shall immediately appoint a new representative (or alternate representative) to the Technical Committee. Section 11.02. ORGANIZATION OF THE TECHNICAL COMMITTEE. The Technical Committee, shall, within ten (10) days after the - appointment of all representatives thereto. meet at a time and place established by the District's representative to the Technical Committee. At such meeting, the Technical Committee shall elect one of its members as chairman to preside over the meetings and shall elect another member as secretary to keep records of the business and actions of the Technical Committee. The Technical Committee may establish such other offices as it may deem proper. The Technical Committee may take any other actions necessary for the establishment of rules and procedures for the efficient and economical operation of the Technical Committee, including, but not limited to, rules governing future election and terms of office of officers, meeting dates, and other matters pertinent to the functioning of the Technical Committee. Section 11.03. ACTION OF THE TECHNICAL COMMITTEE. No action of the Technical Committee is valid unless such action is approved at a meeting of the Technical Committee by the affirmative vote of a majority of the members of the Technical Committee. Section 11.04. RESPONSIBILITY OF TECHNICAL COMMITTEE. The Technical Committee shall be responsible for: (a) Reviewing plans and specifications for, and work performed under, Project Contracts; (b) Reviewing and recommending for approval to the District of the award of or changes in Project Contracts; (c) Submitting recommendations to the District as to operating budgets for the System and rates for service by the System; (d) Reviewing changes to the Engineering Report; and (e) Reporting to the District on any other matters which may be referred to the Technical Committee by the District or any Customer. ARTICLE XII SUCCESSION TO RIGHTS AND PROPERTIES ACQUIRED PURSUANT TO PRIOR CONTRACT Section 12.01. PRIOR CONTRACT. All rights and properties acquired pursuant to the Contract dated December 16, 1985 are now hereby held and shall be maintained pursuant to the terms and provisions of this Agreement. -34 - ARTICLE XIII Section 13.01. EFFECTIVE DATE. This Agreement shall become effective upon execution by the District and all Customers and such fact shall be communicated in writing to the Customers by the District. This Agreement shall constitute the sole and only agreement between the Customers and the District regarding Wastewater disposal services and the Customers hereby recognize and affirm their responsibility to make the payments required hereunder. Section 13.02. TERM OF AGREEMENT. This Agreement shall continue in force and effect from the effective date hereof for a period of forty (40) years, and thereafter shall continue in effect until any Bonds, or Bonds issued to refund same, if any, have been paid in full. The Customers shall have the right to the continued performance of services provided hereunder for the useful life of the System after amortization of the District's investment in the System, upon payment of charges by the Customers, reduced to take into consideration such amortization. This Agreement is dated as of the // 1, day of 1"�l 1988, and 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. ATTEST: Roscoe Conoiey Secretary (SEAL) ATTEST: 1:t i/I ILA 2, //./ J• nne Land, C y Secretary (SEAL) — . EFFECTIVE DATE AND TERM OF AGREEMENT BRUSHY CREEK WATER CONTROL AND IMPROVEMENT DISTRICT NO. 1 OF WILLIAMSON AND MILAM COUNTIES Dan Mize President CITY OF ROUND ROCK By: - 35 - Mike Robinson Mayor ATTEST: James E. Aldridge, City Clerk (SEAL) CITY OF AUSTIN By: - 36 - are Act ng City Manager CUSTOMER Phase lA Phase 18 TOTAL 1. CITY OF AUSTIN Exhibit "A" SUMMARY: Option hA WASTEWATER DISPOSAL AGREEMENT Phases 1A and 1B Reserved Capacity Line 27,500 0 27,500 Treatment 14.285 13,215 27,500 Common 27,500 0 27,500 2. CITY OF ROUND ROCK Line 4,900 0 4.900 • Treatment 0 4,900 4.900 Common 4.900 0 4,900 Line 32.400 0 32.400 Treatment 14.285 18.115 32,400 Common 32.400 0 32.400 CONTRIBUTION TOTAL PAYMENTS PREVIOUSLY RECEIVED AUSTIN ROUND_ROCK . BY OTHERS ___REGIONAL _ Initial Funding Line 2,063,773.19 36B.365.71 782,212.75 3.214.351.65 Treatment 759.0 0 451,134.00 1.210.225.00 Common _ 35.021.7 1_ _ 6_, 240 21_ O __41,261.9,2_ Option 6A Exhibit "B" WASTEWATER DISPOSAL AGREEMENT Capacity Charge Payments Previously Received Total Initial Funding 2,857,885.90 374,605.92 1,233,346.75 4,465,838.57 CONTRIBUTION TOTAL TOTAL_PROJECT COSTS AUSTIN ROUND_ROCK BY, OTHERS_ _REGIONAL Option 6A Exhibit "C" WASTEWATER DISPOSAL AGREEMENT Total Project Costs Line 25,382,500 4,522.700 782,213 30,687,413 Treatment 5.128.315 0 451,134 5,579.449 Common 2,200,000 392,000 0 _2,592,000 CURRENT PROJECT COSTS 32.710.815 4.914,700 1.233,347 38,858,862 Less Credits and Reimbursements 1 7,150,000,] [4,862_,662] L12,012,662] NET PROJECT COSTS 25.560.815 52.038 26,846,200 Less Initial Funding 1_2,85 826] 1 374,606] 1 1,233 [ 4465839] CONSTRUCTION FUNDING First Stage 11.081,349 [1.660,268] 9,421,081 Second Stage 11,621.580 1.337.700 12.959.280 TOTAL 22.702,929 1 322,568] 0 22,380,361 CONTRACT NO Option 6A 21 (tunnel) Exhibit "D" WASTEWATER DISPOSAL AGREEMENT Phase 1A Plans and Specifications Previously Reviewed Plans, specifications and contract documents for the following construction contracts which will be built by the District under its direct supervimion and which will make up the first stage of Phase lA of Option 6A of the System have been previously reviewed and approved by the District and the Customers: DESCRIPTILIN OF WORK 6 Approximately 5,990 LF of 60" wastewater interceptor and appurtenant work from the Round Rock 3 MGD WWTF to Lake Creek Approximately 8,238 LF of 78" Tunnel and 84" wastewater interceptor and appurtenant work from the Georgetown Pailroad to the Round Rock 3 MGD WWTF Exhibit "E" WASTEWATER DISPOSAL AGREEMENT FIELD NOTES FOR 25.012 ACRES OF LAND Field notes describing a 25.012 acre tract of land in the Joseph Marshall Survey, Abstract No. 409, in Williamson County, Texas, being a part - of a tract of land called 31.372 acres in a deed to the City of Round Rock, Texas, recorded in Volume 768, Page 648 of the Deed Records of Williamson County, Texas, and being further described by metes and bounds as follows: BEGINNING at an iron pin found in the Southwest corner of the above mentioned 31.372 acre tract for the Southwest corner ot this tract. THENCE N 00° 05' 54" E with the West line of the said 31.372 acre tract 1444.55 feet to an iron pin set for the Northwest corner ot the said 31.372 acre tract and the Northwest corner of this tract. THENCE N 31° 51' 45" E with the North line of the said 31.372 acre tract 19.93 teet to an iron pin set for an angle point of this tract. THENCE S 72° 09' 25" E 222.91 teet to an angle point of this tract. THENCE S 87° 46' 24" E 80.41 feet to an angle point of this tract. THENCE N 75° 29' 48" E 85.88 feet to an angle point of this tract. THENCE S 69° 05' 45" E 183.13 feet to an angle point of this tract. THENCE N 86° 05' 38" E 229.71 feet to an angle point of this tract. THENCE N 88° 36' 46" E 140.60 feet to a point on the East line of the said 31.372 acre tract for the Northeast corner of this tract. THENCE S 00° 29' 27" E with the said'East line 184.43 feet to an iron pin set for an angle point of the said line. THENCE S 02° 03' 00" W with the said line 657.77 feet to a point in the centerline of Brushy Creek for the Southeast corner of this tract. THENCE S 58° 15' 42" W with the said centerline 198.82 feet to an angle point. THENCE S 47° 40' 48" W with the said centerline 150.64 feet to an angle point. THENCE S 71° 48' 36" W with the said centerline 120.96 feet to an angle point. THENCE S 42° 58' 50" W with the said centerline 190.25 feet to an angle point. THENCE S 10° 45' 08" W with the said centerline 71.27 feet to an angle point. THENCE S 06° 00' 25" W with the said centerline 100.88 feet to a point on. the South line of the said 31.372 acre tract for an angle point of this tract. THENCE N 85° 14' 57" W with the said South line 359.83 feet to the POINT OF BEGINNING, containing 25.012 acres of land, more or less. EXHIBIT "E" Page 1 of 3 I, - Jay D. Becker, A REGISTERED PUBLIC SURVEYOR, do hereby certify that these field notes accurately represent.the results.ot an on- the - ground survey made under my direction and supervision on the 8th day of July, 1987. All corners located are as shown. The property described herein is correct and has no visible discrepancies, protrusions, encroachments, easements, conflicts in boundary, overlapping of improvements, roads in place, nor shortages in area except as shown. HAYNIE &.ICALLMAN, INC. J;flgecker Regi- -red Public Surveyor No. 4443 Date Job No.775- 1953 -6 EXHIBIT "E" Page 2 of 3 r 'SURVEY PLAT °SHOWING 0 25.012•ACRES OF LAND IN THE JOSEPH MARSHALL SURVEY, A -409, WILLIAMSON COUNTY, TEXAS SCALE 1' - 300' A, fi POINT OF BEGINNING r � / �UNRECO OR RDED LEASE TRACT J CITY OF ROUND ROCK 31.222 AC. (31.372 AC.) VOL. 768, PG. 648 TRACT 2 25.012 AC. T6 BERTIL TELANDER, ET AL VOL. 366, PG. 50 7 0 LINE TABLE N0. BEARING DISTANCE T1 N31,51'45'E 59.90 72 N20,41'06'6 22.03 T3 N69,01'16'E 241.31 T4 S58,15'42'W 190.82 75 547.40'48'W 150.64 T8 57i.40'38'W 120.96 T7 542,68'S0'W 190.25 TB 510.45'0B'w 71.27 79 008,00'25'6 000.80 110 N85.14'57 'W 359.83 111 1131,51'45'E 19.93 112 N31,51'45'E 39.97 113 S00,29'27'E 184.43 T14 S88,36'46'W 140.60 T15 586,05'36'W 229.71 116 N69 05'45'W 183.13 T17 575,29'48'W 85.88 118 N8746'24'W 80.41 119 N72 08'25'W 222.91 LEGEND 15 E BRUMAT CREEK 1. Jay D. Becker. A REGISTERED PUBLIC SURVEYOR. do hereby certify that thane field notes accurately represent the results of an on- the survey made under my direction and supervision on the 8th day of July. 1987. All corners located are as shown. The property described herein fa correct and has no visible discrepancies, protrusions. encroachments, easements. conflicte in boundary, overlapping of improvements. roads in place, nor shortages in area except as shown. • IRON PIN FOUND O IRON PIN SET PUE PUBLIC UTILITY EASEMENT PROJECT NO 775- 1953 -6 FILE N0: 775 -1953 P DATE: JULY 1987 SCALE: 1' - 300' V.A. ANO MARIE SOUTHERN VOL. 339, PG. 289 EXHIBIT "E" Page 3 of 3 0E5I6NE0 BY: PAT DRAWN BY: PAT CHECKED BY: REVISED BY: t Haynie & slab, Inc. Consulting Engineers Austin , Texas ACCESS ROAD TO REGIONAL WASTEWATER TREATMENT PLANT FIELD NOTES describing an access easement across a portion of that certain 73 acre tract conveyed to Bertil Telander found of record in.Volume 366, Page 507 of the Deed Records of Williamson County, Texas. BEGINNING at a point in the North line of said Telander tract for the Northwest corner hereof and being S65 1685.70 feet from the Northeast corner of said tract; THENCE N65°30'E, fifty feet (50') southerly of and parallel to the center line of the I i G N Railroad tracks, 1374.88 feet to the Point of Curvature of a curve to the right; THENCE 311.06 feet along the arc of said curve, having a radius of 250.0 feet and a sub -chord bearing and distance of 578 0 51'15 "E, 291.38 feet to a point in the East line of said Telander tract for the Northeast corner hereof and also being in the Weet line of the remainder of that tract conveyed to William E. McCarthy, Jr. (dba Eddie McCarthy) found of record in Volume 537, Page 166 of said Deed Records) THENCE 500 0 56'40 "E, 92.17 feet along the common line between said Telander and McCarthy tracts to the Southeast corner hereof; THENCE southeasterly 318.46 feet along the arc of a curve to the left, being fifty feet southerly of and parallel to the last described curved line, having a radius of 200.00 feet and a sub -chord bearing and distance of N68 °53'W, 285.87 feet to the Point of Tangency of said curvet THENCE S65 °30'W, 1374.88 feet to the Southwest corner hereof) EXHIBIT "F" Page 1 of 4 THENCE N24 °30'W, 50.00 feet to the Point of Beginning of this described easement containing 1.935 acres or 84,307 square feet of land. SKETCH TO ACCOMPANY FIELD NOTES Ld MSC #m// ✓.r. V"•5l7,p> /u NE. Corvcr 1 .FTswv 0 N C YN o- A t N 24 .06/. Tie C,ry a. iP uNO AcK py. 6411 s 5Er1/L Ts a.younr , c,' cL ths..366, r + y . So7 /00 - Haynie & Kallman Inc. CONSULTING ENGINEERS Round Rock a Austin 255-7861 22' /?..+0..1.4/ •$' - Y �. 7d.$, P9. 6Sz EXHIBIT "F" Page 2 of 4 Date s /as Drawn By Sh. 2 of 2 FIELD NOTES describing a 0.055 acre tract out of the Joseph Marshall Survey situated in Williamson County, Texas and also being a part of a 3.6 acre tract conveyed to Hollis Scruggs by deed recorded in Volume 672, Page 415 of the Deed Records of said County and also being a part of an access easement granted to the City of Round Rock by deed recorded in Volume 768, Page 648 of said Deed Records; BEGINNING at a point in the West line of a 31.372 acre tract conveyed to said City by the aforesaid deed and also being N00 °05'54 "E 1084.97 feet along said West line from an iron pin found at the Southwest corner of said City tract and being an ell corner of said Scruggs tract; THENCE S00 °05'54 "W 194.51 feet along said West line, being the East line of said access easement, to the most southerly corner hereof; THENCE N04 ° 28'33 "W 50.16 feet to the beginning of a non - tangent curve to the left; THENCE 79.67 feet along the arc of said curve having a radius of 200.00 feet and a chord bearing and distance of N11 °18'50 "W 79.15 feet to a point the.West line of said Scruggs tract and being the East line of a 73.0 acre tract conveyed to Bertil Telander by deed recorded in Volume 366, Page 507 of said Deed Records; THENCE N00 °24'06 "W 92.17 feet along said common property line, being the West line of said access easement, to the most northerly corner hereof; THENCE southeasterly 32.51 feet along the arc of a curve to the right, said curve having a radius of 250.00 feet and a chord bearing and distance of 538 °56'28 "E 32.49 feet to the POINT OF BEGINNING. I, Jay D. Becker, A REGISTERED PUBLIC SURVEYOR, do hereby certify that - f' - . = notes ;•were prepared from.maps and records made by others and a partial on the ground survey made under my direction and supervision in February 1985. EXHIBIT "F" PAGE 3 OF 4 OCT. 1, 1987 BC /WWTPRD HAYNIE, KALLMAN & GRAY INC. to1 `b1 Date . Becker, gistered Public Surveyor No. 4443 0 d J w F w?, c:,6 w z 4,6 J w w w 0 w � ¢ I N I ao to 4 II=I - x 4IWI a I 9 I k 1 f 6 1 1 S6R2GGS PG. 6. 15 SKETCH TO ACCOMPANY FIELD NOTES FOR A ROADWAY EASEMENT IN THE J. MARSHALL SUR. ABSTRACT NO. 409 WILLIAMSON CO., TEXAS POINT OF BEGINNING LINE TABLE on SEARING DISTANCE T1 1634'211'33•11 1634'211'33•11 50. 15 CURVE TABLE ▪ N A D. SEARING MORO DELTA RADIUS LENGTN TAN 02 N11" 53r 0 2S E 32. 4 n r 27 20 0 32.51 i L a VOL 7 68 PG. R 648 � EXHI "F" Page 4 of 4 ( IRON PIN FOUND HOLLIS SCRUGGS PROJECT N0: 103-2005 -23 FILE NO 103-2005 OATS OCT. L 1207 KALE 1'440' IIu'nli ka11 0ESIGE0 OV: .N ORANN SY: Ji CHECKED SY: J5 REVI n: 1 war. Inc. .um • Exhibit "G" WASTEWATER DISPOSAL CONTRACT FIELD NOTES FOR 1.582 ACRES OF LAND Field notes describing a 1.582 acre tract of land in the Joseph Marshall Survey, Abstract No. 409, in Williamson County, Texas, being a part of a tract of land called 31.372 acres in a deed to the City of Round Rock, Texas, recorded in Volume 768, Page 648 of the Deed Records of Williamson County, Texas, and being further described by metes and bounds as follows: BEGINNING at a point on the West line ot the above mentioned 31.372 acre tract tor the Southwest corner of this tract, and from which point the Southwest corner of the said 31.372 acre tract bears S 00° 05' 54" W 282.00 feet. THENCE N 00° 05' 54" E with the said West line 325.00 feet to the Northwest corner of this tract. THENCE S 89° 54' 06" E 212.00 feet to the Northeast corner of this tract. THENCE S 00° 05' 54" W 325.00 feet to the Southeast corner ot this tract. THENCE N 89° 54' 06" W 212.00 feet to the POINT OF BEGINNING, containing 1.582 acres ot land more or less. Exhibit "G" Page 1 of 2 SKETCH FOR A 1.582 ACRE TRACT OF LAND IN THE JOSEPH MARSHALL SURVEY, A -409, BERTIL TELANOER, ET AL VOL. 366, PG. 507 WILLIAMSON COUNTY, TEXAS \• CITY OF ROUND ROCK 31.222 AC. (31.372 AC.) VOL. 768. PG. 648 / PROJECT HE 775-1953 -6 FILE N0: 775 -1953 P2 DATE: JULY 1997 SCALE: 1' - 100' Exhibit "G" Page 2 of 2 *n DESIGNED 9Y: PAT DRAWN 9Y: PAT CHECKED BY: REVISED BY: Haynie 8 Kallmon, Inc. Consulting Engineers Austin . Texas