Draft 11/6/19 CONSTRUCTION, OPERATING AND COOPERATIVE ENDEAVOR AGREEMENT between ASCENSION CONSOLIDATED UTILITIES DISTRICT NO. 2, STATE OF LOUISIANA and ASCENSION SEWER, LLC, a Louisiana limited liability company Dated as of November __, 2019 {B1271617.22} TABLE OF CONTENTS ARTICLE 1 DEFINITIONS; INTERPRETATION ...................................................................................... 2 Section 1.1 Definitions .......................................................................................................................... 2 Section 1.2 Rules of Interpretation. ..................................................................................................... 10 ARTICLE 2 TERMS; EFFECTIVE DATE; COOPERATIVE ENDEAVOR REPRESENTATIONS ...... 12 Section 2.1 Term and Extension Option. ............................................................................................ 12 Section 2.2 Effective Date; Binding Effect. ........................................................................................ 12 Section 2.3 Cooperative Endeavor Representations ............................................................................ 13 ARTICLE 3 OWNERSHIP OF THE SYSTEM .......................................................................................... 13 Section 3.1 Ownership of the System. ................................................................................................ 13 ARTICLE 4 OPERATION OF THE SYSTEM ........................................................................................... 14 Section 4.1 The System Generally. ..................................................................................................... 14 Section 4.2 Operation and Construction.............................................................................................. 14 Section 4.3 Rights and Responsibilities of Operator ........................................................................... 14 Section 4.4 Rights and Responsibilities of the District ....................................................................... 17 Section 4.5 Affiliates; Staffing and Labor Issues ................................................................................ 19 Section 4.6 Safety ................................................................................................................................ 19 Section 4.7 Operating Period Insurance .............................................................................................. 19 Section 4.8 Insurance, Third Party Payments, and Warranties. .......................................................... 19 Section 4.9 Information. ...................................................................................................................... 20 Section 4.10 Construction of System Capital Improvements; Capital Asset Control. .......................... 20 Section 4.11 Technical Assistance ........................................................................................................ 23 Section 4.12 Operator as District’s Agent ............................................................................................. 24 Section 4.13 Other Services. ................................................................................................................. 24 Section 4.14 Hazardous Materials ......................................................................................................... 25 Section 4.15 Connection of New Properties to System ......................................................................... 25 Section 4.16 Access Rights ................................................................................................................... 26 Section 4.17 Performance Standards ..................................................................................................... 26 ARTICLE 5 COMPENSATION AND BUDGETS ..................................................................................... 26 Section 5.1 Compensation of Operator; Compensation of District; Budgets. ..................................... 26 Section 5.2 Budgets. ............................................................................................................................ 27 Section 5.3 FEMA Reimbursement .................................................................................................... 28 ARTICLE 6 RATE SETTING ..................................................................................................................... 28 Section 6.1 General ............................................................................................................................. 28 Section 6.2 Rate Setting Process. ........................................................................................................ 28 Section 6.3 Other Rate Adjustments. .................................................................................................. 30 Section 6.4 Fees and Other Charges .................................................................................................... 31 ARTICLE 7 ALLOCATION OF RISK OF CERTAIN COSTS AND LIABILITIES ................................ 31 {B1271617.22} ii Section 7.1 General ............................................................................................................................. 31 Section 7.2 Limitations on Liability .................................................................................................... 31 Section 7.3 Survival ............................................................................................................................ 31 ARTICLE 8 DEFAULT AND REMEDIES ................................................................................................ 32 Section 8.1 Events of Default by the Operator. ................................................................................... 32 Section 8.2 Events of Default by the District. ..................................................................................... 32 Section 8.3 Additional Remedies for Breach ...................................................................................... 33 Section 8.4 Submission to Jurisdiction ............................................................................................... 33 Section 8.5 Dispute Resolution ........................................................................................................... 33 ARTICLE 9 TERMINATION; SUCCESSOR OPERATORS; BACK-END TRANSITION SERVICES . 34 Section 9.1 Additional Termination Rights. ........................................................................................ 34 Section 9.2 Operator Obligations on Termination or Expiration. ....................................................... 34 Section 9.3 Termination Payment to Operator .................................................................................... 36 Section 9.4 Back-End Transition Services .......................................................................................... 37 ARTICLE 10 GENERAL ............................................................................................................................ 37 Section 10.1 Force Majeure Generally. ................................................................................................. 37 Section 10.2 Indemnification. ............................................................................................................... 37 Section 10.3 Proprietary Information. ................................................................................................... 39 Section 10.4 Relationship of the Parties ................................................................................................ 41 Section 10.5 Assignment and Transfer ................................................................................................. 41 Section 10.6 Interest on Overdue Obligations ....................................................................................... 41 Section 10.7 Non-Discrimination .......................................................................................................... 41 Section 10.8 Amendments..................................................................................................................... 42 Section 10.9 Notices .............................................................................................................................. 42 Section 10.10 Entire Agreement ............................................................................................................. 42 Section 10.11 Further Assurances ........................................................................................................... 42 Section 10.12 No Waivers ....................................................................................................................... 42 Section 10.13 Liability Limitation for Certain Damages ........................................................................ 43 Section 10.14 No Third Party Beneficiaries ............................................................................................ 43 Section 10.15 State Law Requirements ................................................................................................... 43 Section 10.16 Attorney Client Privilege ................................................................................................. 43 ARTICLE 11 REPRESENTATIONS AND WARRANTIES ....................................................................