Operation and Maintenance Agreement for the Village of Red Hook

OPERATION AND MAINTENANCE AGREEMENT FOR THE VILLAGE OF RED HOOK

This Agreement is made on August 1, 2025 (the “Effective Date”) between The Village of Red Hook (the “Owner’), having a place of business located at 7467 S Broadway, Red Hook, New York 12571, and H2O Innovation Operation & Maintenance, LLC (the “Operator’), having a place of business located at 4 Commerce Street, A-2, Poughkeepsie, New York 12603

WHEREAS the Operator provides operation and maintenance services, as well as other professional utility management services, for water and/or wastewater treatment plants and facilities: and

WHEREAS the Owner wishes to retain the Operator for the performance of the services described in this Agreement (the “Services’).

NOW, THEREFORE, in consideration of the premises and of the mutual promises hereinafter contained, and intending to be legally bound hereby, the parties hereto agree as follows:

1. GENERAL

• 1.1. Unless defined in the Agreement, all capitalized terms and expressions have the meaning ascribed to them in Appendix A.

• 1.2. All facilities, grounds, and equipment owned by the Owner shall remain the property of the Owner.

• 1.3. This Agreement shall be governed by and interpreted in accordance with the laws of the State of New York.

• 1.4. | This Agreement shall be binding upon the successors of each of the parties. Neither party may assign the Agreement without prior written consent of the other party; provided, however, that Operator may assign the Agreement to any of its affiliates or any other entity that directly or indirectly through one or more intermediaries, controls or is controlled by, or is under the common or shared control with the Operator, upon providing ninety (90) days written notice to the Owner.

• 1.5. All notices shall be given in writing and transmitted by certified mail, personal deliver or email, with acknowledgment of receipt, to the addresses listed above.

• 1.6. This Agreement, including Appendices, constitutes the entire agreement between the parties and supersedes all prior agreements, understandings, negotiations and discussions, whether oral or written of the parties.

• 1.7. No supplements, modifications, amendments or changes of any nature or kind to this Agreement will be valid or binding unless set forth in writing and duly executed by the parties. Such supplements, modifications, amendments or changes will be expressly added to this Agreement to be valid and in force.

• 1.8. | Wherever used, the terms “Owner” and “Operator” shall include the respective officers, directors, elected or appointed officials and employees.

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2. SCOPE OF SERVICES - OPERATOR

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During the Term of this Agreement, Operator shall:

• 2.1. The Operator shall hire, train, and employ personne! meeting the following minimum qualifications: a Chief Operator possessing a valid New York State Department of Environmental Conservation (NYSDEC) Grade 2A or higher certification; an Assistant Operator possessing a valid NYSDEC Grade 1A or higher certification; and a Direct Operator in Responsible Charge certified by the New York State Department of Health (NYSDOH). These personne! shall be assigned to staff and operate the Project in compliance with all applicable NYSDEC and NYSDOH minimum staffing requirements and shall provide continuous, efficient, and timely operation and maintenance of the water and/or wastewater treatment systems serving the Owner.

  • 2.1.1. The Owner shall supply daily operations personnel to support the operation of the water and wastewater facilities. Such personnel shall work under the supervision and direction of the Operator, which may be provided either on-site or remotely, as determined by the Operator in accordance with the operational needs of the Project. The Owner's staffing coverage shall be provided 365 days per year, inclusive of all weekends, holidays, and emergency events such as storms or other extraordinary circumstances, to ensure continuous and reliable facility operations.

• 2.2. Provide sufficient staff that will meet certification requirements of the State of New York and provide Labor and Benefits Costs to all employees assigned ona full-time basis to the Project.

• 2.3. The Operator shall provide and maintain a real-time data collection software platform capable of tracking and trending regulatory compliance data, process control metrics, and preventative maintenance activities. The system shall support effective monitoring, reporting, and analysis to ensure efficient operation and compliance with applicable regulatory requirements.

• 2.4. The Operator shall perform routine compliance and safety audits of the Project to ensure adherence to all applicable federal, state, and local regulations, as well as to the Owner’s operational standards and safety protocols.

• 2.5. | The Operator shall attend all meetings as requested by the Owner, including but not limited to Village board meetings, regulatory agency meetings, and engineering or project coordination meetings, at no additional cost to the Owner.

• 2.6. Prepare all Federal and State regulatory water and wastewater permit reports and submit these to Owner and the appropriate State and Federal agencies.

• 2.7. Provide assistance to the Owner's engineering staff or consultants in review of any proposed project rehabilitation plans for the utilities.

• 2.8. Document all repair parts and expenses incurred on behalf of the Owner. All current purchasing policies and procedures of the Owner will remain in place. In addition, Operator shall update the Owner monthly on the cost-to-date of repair parts and supplies for budgetary purposes.

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• 2.9. Perform other professional management services as directed by the Owner. Such services must be pre-authorized by the Owner and additional compensation to the Operator will be negotiated on a case-by-case basis.

• 2.10. Pay for and/or cover all of the Direct Costs as identified in part 1 of Appendix B for water and/or wastewater treatment plants and facilities. All other costs related to the Project will be the responsibility of the Owner.

• 2.11. Ensure process sampling and laboratory analysis for the wastewater facility at a frequency sufficient to meet permit requirements. In the event that analysis requirements change, it is agreed upon that the Owner will provide for payment of those costs.

3. PERFORMANCE OF THE SERVICES safetyOperator and will industryperform practicethe Services and within thata professional degree of care,manner,skillin andaccordance diligence with normalgoodinengineering, performing services of a similar nature. Operator is responsible for and has control over the methods and means of performing the Services. The performance of any third party employed by Operator shall remain under Operator's supervision and responsibility.

4. HEALTH AND SAFETY Operator shall at all times conduct its operations under the Agreement in a manner to avoid the risk of endangerment to health and bodily harm to persons. To the best of its knowledge, Operator undertakes to comply with all applicable health and safety local laws and regulations. 5. SCOPE OF SERVICES - OWNER

During the Term of this Agreement, Owner shall:

• 5.1. Maintain all existing Project easements, warranties and licenses that have been granted to Owner.

• 5.2. Pay all Administrative Costs and franchise, property or other normal taxes associated with the Project.

• 5.3. Pay for all the Direct Costs as identified in part 2 of Appendix B for water and/or wastewater treatment plants and facilities, including Repairs of the water treatment system, wastewater treatment system and associated facilities.

• 5.4. Provide and pay for all required Capital Expenditures. Capital Expenditures shall include, without limitations, any expansions or modifications to the existing utility system as a result of increased demand, normal replacement needs or regulatory requirements imposed by State or federal agencies as well all Repairs performed on behalf of the Owner by the Operator.

6. OWNER’S RESPONSIBILITIES

• 6.1. Owner shall, in a timely manner and at its own expense, provide to Operator, before of the commencement of the Services and on a continuing basis thereafter, all information necessary for Operator's performance of the Services or required in order to ensure that the Services are performed in a proper and complete manner. Owner recognizes that all

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this information provided to or made available to Operator pursuant to this Agreement is an essential basis to the Agreement between the parties and therefore warrants and guarantees to Operator its quality, reliability and accuracy. Owner hereby grants Operator the irrevocable right to use, copy and modify this information and any data related to the Services and to disclose it to any third party who needs to know such information in order to perform the Services.

• 6.2. | Owner shall provide Operator with access to its premises, facilities or sites so as to permit Operator to perform the Services as per this Agreement.

• 6.3. | Owner is fully responsible for any and all penalties or any fines that may be imposed by any governmental authority related to an infringement of or general non-compliance related to the specifications of an operating permit, license or any other required authorization related to the Project and associated facilities for which Operator is performing the Services, unless the said penalty or fine imposed upon Owner is solely attributable to Operator’s ordinary negligence, willful misconduct or gross negligence.

• 6.4. | Owner agrees to compensate Operator of any fines assessed against Operator by any State or federal Occupational Safety and Health Administration (‘OSHA’), associated with infrastructure violations. Electrical or mechanical (or any other infrastructure) which does not meet OSHA’s standards and results will be compensated by the Owner. Operator is responsible for all safety training programs and plans normally associated with employee safety.

• 6.5. | When the Operator's scope of services includes the operation of wastewater treatment plant, Owner shall guarantee to Operator that the wastewater treatment facility will receive Adequate Nutrients and that said facility will not be adversely impacted by illegal infusions of Biologically Toxic Substances which would affect Operator’s ability to meet NPDES (SPDES) requirements.

7. COMPENSATION

• 7.1. Owner shall pay to Operator as compensation for the Services an annual amount of $48,000.00 (the “Base Fee”), which will be paid by monthly installments of $4,000.00 each.

• 7.2. Any Capital Expenditures and/or Repairs performed on behalf of the Owner by the Operator, with Owner’s approval, shall be billed as an additional expense. Those expenses shall be in addition to the Base Fee and shall not be considered as Direct Costs.

8. PAYMENT OF COMPENSATION

• 8.1. The Base Fee shall be due and payable by monthly instalments as described in Section 7.1 on the first day of the month for each month that Services are to be provided (“Due Date’).

• 8.2. Any amount not paid by Client within thirty (30) days of the Due Date, absent any good faith dispute regarding the unpaid portion, will be subject to a late charge in the amount of 1.5% per month or the maximum amount allowable by law, whichever is less. Such interest shall accrue from the Due Date up to and including the date on which payment is received by Operator.

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• 8.3. All other compensation and additional services provided shall be billed separately by the Operator and such amount is due by Owner upon receipt of the invoice and is payable within thirty (30) days.

• 9. TERM AND RENEWAL

• 9.1. The initial term of this Agreement shall be a period of 1 years, beginning on the Effective Date (the “Initial Term’). Base Fee shall increase annually to the amounts specified in Appendix C.

• 9.2. After the end of the Initial Term and with the approval of the Operator, the Owner has the option to extend this Agreement for additional one (1) year periods, under the same terms and conditions. The Owner shall give the Operator a sixty (60) day written notice of its intent to renew this Agreement. The Initial Term and any additional periods are collectively referred to as the “Term”.

• 10. TERMINATION 10.1. Either party may terminate this Agreement for a material breach of the Agreement after giving written notice of breach and allowing the other party thirty (30) days to remedy to such breach. If the breach has not been remedied or if no plan of action to remedy the default has been submitted to the non-defaulting party within the thirty (30) day period, the non-defaulting may terminate this Agreement without additional notice.

• 10.2. Either party may cancel this Agreement, at its sole discretion, by giving to the other party a ninety (90) day written notice of its intent, being understood and agreed that in such case of termination, Operator shall receive payment for the Services already performed upon the date of termination.

• 10.3. Upon termination of this Agreement by the Owner in accordance with Section 10.1 or Section 10.2, Operator shall cooperate fully to ensure a smooth transition of service to the new Operator on behalf of the Owner and shail provide all data obtained during the term of this Agreement to the Owner.

• 10.4. Upon termination of the Agreement by Owner pursuant to Section 10.2, all outstanding Operator invoices shall be paid by the effective termination date.

• 11. CHANGE — SCOPE OF SERVICES 11.1. Operator acknowledges and agrees that the scope of services is subject to change by additions, deletions or revisions by the Owner. Operator shall be advised in writing of any of such changes and shall promptly perform and strictly comply with each such change when released in writing; provided however those changes are reasonably within the scope of this Agreement.

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• 11.2. In the event Operator believes that the performance of any change would justify modification of the Base Fee, Operator shall inform the Owner within seven (7) business days following notice of change. In such case, Owner and Operator will negotiate, in good faith, a commensurate adjustment in the Base Fee before modification.

• 11.3. For greater clarity, water or wastewater treatment facility modifications and expansions constitute a change in the scope of services.

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12. NON-SOLICITATION OF PERSONNEL

During the period beginning on the Effective Date and ending on the first anniversary of the expiration or termination of the Agreement, neither party shall, nor assist any other person to, directly or indirectly, (i) solicit, recruit or hire any employee of the other party (‘Employee’), and (ii) solicit or encourage any Employee to leave the employment of the other party; provided, however, that the provisions of this Section shall not prevent either party from making a general solicitation for employment that are not specifically targeted at the other party Employees.

13. ACCOUNTING RECORDS

• 13.1. Operator shall keep full, detailed and accurate records and books of account showing, among others, the actual costs reimbursable to the Operator, in accordance with the provisions of this Agreement.

• 13.2. The Owner shall also be afforded access to Operator’s records, books, correspondence, instructions, memoranda and similar data relating to this Agreement and any of the work provided in connection with the Project.

• 13.3. Operator shall preserve financial documents and other records to which Owner has access rights, without additional compensation, for a period of three (3) years or longer as required by law, following termination of this Agreement.

14. INDEMNIFICATION

• 14.1. Each party shail indemnify, defend, and hold harmless the other party from and against any liability, damage or claim, arising out of or related to the Services performed under this Agreement, including but not limited to liabilities attributable to personal injury, death, loss of use, or property damage to the extent that such liability, damage or claim results directly from the willful misconduct or gross negligence of the indemnifying party or that of the person for which it is responsible.

• 14.2. Operator shall indemnify, defend, and hold harmless Owner from and against any and all losses, damages, penalties, fines, costs, fees and expenses (including legal fees) resulting from any breach of, or non-compliance with, the permits or approvals’ specifications held by the Owner in connection with the Project, or the environmental obligations of the Owner under any applicable environmental laws and regulations to the extent that such breach or non-compliance is solely and directly attributable to the willful misconduct or gross negligence of the Operator.

• 14.3. Owner shall indemnify, defend, and hold harmless Operator from and against any and all losses, damages, penalties, fines, costs, fees and expenses (including legal fees) resulting from any breach of, or non-compliance with, the permits or approvals’ specifications held by the Owner in connection with the Project, or the environmental obligations of the Owner under any applicable environmental laws and regulations or any losses resulting from unsafe or outdated equipment and/or facility unless such breach or non-compliance is solely and directly attributable to the willful misconduct or gross negligence of the Operator.

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15. LIMITATION OF LIABILITY

• 15.1. Operator shall not be liable for any damages suffered by the Owner or any third party, except to the extent such damages are caused by the ordinary negligence, willful misconduct, or gross negligence of Operator or any of its representatives in the course of performing the Services.

16. INSURANCE

• 16.1. Owner and Operator shall obtain and maintain for the Term of this Agreement sufficient insurance coverage, including, without limitation, insurance coverage of the type and in the amounts described in Appendix D. Upon request, Operator will provide to the Owner written proof of insurance. Owner shall be named as additionally insured on the Certification of Insurance.

17. COMPLIANCE WITH LAWS

• 17.1. The parties shall comply with all applicable laws and regulations including, without limitation, environmental and anti-bribery laws relating to bribery, extortion, kickbacks and any other illegal or unfair method of doing business, whether direct or indirect. Each party shall be obligated to reasonably cooperate with the other party in any claim or legal proceeding and to indemnify the other party for any act or omission in connection therewith.

• 17.2. Both parties shall comply with the provisions of all applicable data protection laws and regulations in respect of all personal data to be held or processed as part of the execution of the Work or as part of any other action to be made by a party under this Agreement.

• 17.3. Both parties agree to put in place policies and procedures to minimize the risks of modern slavery or human trafficking in their respective supply chain, and to comply fully with any modern slavery, human trafficking or similar applicable laws.

18. LABOR DISPUTES

In the event activities by employee groups or unions cause a disruption in Operator’s ability to perform at the Project, Owner or Operator may seek appropriate injunctive court orders. Operator will continue to operate the Project on a best-efforts basis until any such disruptions cease.

19. FORCE MAJEURE

Neither party shall be liable for its failure to perform its obligations under this Agreement if performance is made impractical, abnormally difficult or abnormally costly due to any unforeseen occurrence beyond its reasonable control. The party invoking Force Majeure shall notify the other party within ten (10) working days after its occurrence.

20. RELATIONSHIP

Nothing in this Agreement shall be deemed to constitute Operator or any of Operator’s employees to be the agent, representative or employee of the Owner. Operator shall be an independent service provider and shall have responsibility for and control over the details and means for performing the services and shall be subject to the directions of the Owner only with respect to the scope of the services and results required.

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21. CONFIDENTIALITY

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Each party agrees and commits to maintain all confidential information to which it has access during the performance of the Services as confidential, to not disclose it to others and to use it solely for the intended purpose of the Agreement. These obligations of confidentiality shall continue for the term of the Agreement and shall survive indefinitely thereafter.

22. FAILURE TO ENFORCE

The failure of either party to enforce at any time or for any period of time any provisions of this Agreement in accordance with its terms shall not be construed to be a waiver of such provisions or of the right of such party thereafter to enforce each and every provision.

23. SEVERABILITY

If any part, term or provision of this Agreement shall be held void, illegal, unenforceable, or in conflict with any law of a federal, state or local government having jurisdiction over this Agreement, the validity of the remaining portions of provisions shall not be affected thereby.

24. DISPUTE RESOLUTION

24.1. Mediation Requirement.

in the event of any dispute, claim, or controversy arising out of or relating to this Agreement, or the breach, termination, enforcement, interpretation, or validity thereof, the parties agree to submit the matter to non-binding mediation before commencing any legal or equitable proceeding in any court of law.

The mediation shall be conducted in Dutchess County, New York, or any other jurisdiction agreed to by the parties, before a mediator jointly selected by the parties. If the parties cannot agree on a mediator within ten (10) days of one party’s written notice requesting mediation, then the mediation shall be administered by and in accordance with the rules of the American Arbitration Association (AAA), and the mediator shall be appointed in accordance with those rules.

Each party shall bear its own attorneys’ fees and other costs associated with the mediation. The parties shall share equally the costs and fees of the mediator and any administrative fees of the mediation service provider.

No party may initiate any litigation, arbitration, or other formal legal proceeding arising out of this Agreement until at least thirty (30) days have passed from the commencement of mediation, or unless a party has refused to participate in good faith. Nothing in this Section shall prevent any party from seeking temporary or preliminary injunctive relief in a court of competent jurisdiction in New York State to prevent irreparable harm pending the outcome of the mediation.

25. GOVERNING LAW

25.1. This Agreement shall be governed by and interpreted in accordance with the laws of the State of New York.

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date hereinabove indicated.

THE VILLAGE OF RED HOOK

H20 INNOVATION OPERATION & MAINTENANCE, LLC.

By. 4 OALU OMytnr By: Keg & a a Name: Koren Siw Narfe: Roy R. R. Title: Mosnyo— Title: Vice President, 1, 2025 Date: Bits =i 4{ 2025 Date: August

By: Keg & a a oe Narfe: Roy R. R. Rysinger Title: Vice President, New York

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APPENDIX A DEFINITIONS

1. “Project” means all equipment, vehicles, grounds and facilities related to the facility or facilities that is the subject of Agreement and where appropriate, the management, operations and maintenance of such.

2. “Capital Expenditures” means any expenditure for the purchase of new equipment, facility items or for any major Repairs which significantly extend facility life and cost more than two thousand dollars ($2,000); or expenditures that are planned, non-routine and budgeted by the Owner.

3. “Labor and Benefits Costs” means salaries, group insurance (including medical, life and dental), worker’s compensation, retirement and social security for employees.

4. “Administrative Costs” means audit and accounting fees, property insurance, interest expense, depreciation, state fees, recycling fees, curbside fees, landfill fees, ad valorem taxes, and fund transfers.

5. “Direct Costs” means expenses for personnel expenses, benefits, fuel, oil, repairs of Operator's vehicles or equipment, advertising, postage, travel expenses of employees,

6. and uniform expenses. “Repairs” means non-routine/non-repetitive activities required for operational continuity, safety, and performance generally due to failure or to avert a failure of the equipment, vehicles or facilities or a component thereof.

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7. “Biologically Toxic Substances” means any substance contained in the wastewater stream so as to interfere with biological processes necessary for the removal of the organic and chemical constituents of the wastewater required to meet the discharge requirements of the Owner's NPDES permit. Biologically toxic substances include but are not limited to heavy metals, phenols, cyanides, pesticides and herbicides.

8. “Adequate Nutrients” means plant influent nitrogen, phosphorus and iron contents proportional to biological oxygen demand ("BOD") in the ratio of five parts nitrogen, one part phosphorus and one-half part iron for each one hundred parts BOD.

9. “Emergency” means any situation in which Operator staff must respond quickly to protect the health and well-being of the public. [ts intent is clearly in an effort to protect the interests of the people in the event of a natural disaster, hurricane, tornado or other unusual occurrence.

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1. Operator’s Base Fee includes all costs associated with the following items:

2. Owner will pay for the following items:

APPENDIX B DIRECT COSTS

• ° Labor ° Overtime (except for Emergency) ° Corporate Engineering and Operations Support ° Federal and State Unemployment Taxes

• ° Social Security Taxes

• ° Medical, Life, and Dental Insurance ° Insurance coverage, as described in Appendix D. ° 401K Retirement Plan ° Training Costs (State certification schools) ° Uniforms e Cellular Phones ° Personal Protective Equipment (PPE)

• . Facility maintenance cost e Repair parts ° Chemicals ° Lab analysis . Fuel ° Utilities costs for the facilities and systems (including power expenses)

Operator will effectively manage power expenses so as to limit the Owner's financial exposure. It is understood that the Owner will pay for these costs.

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APPENDIX C ANNUAL INCREASES

Annual increases of the Base Fee will be commensurate with the adjustments in the Consumer Price Index (CPI).

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APPENDIX D INSURANCE COVERAGE

1. Operator shall maintain:

• a. Worker's compensation insurance for all of Operator’s employees at the Project.

• b. Comprehensive general liability insurance in an amount not less than $2,000,000 per occurrence for bodily injury and/or property damage.

• Cc. Automobile insurance for any vehicles owned or operated by the Operator.

2. Owner shall maintain:

• a. Property damage insurance for all of its property, including moving equipment owned by Owner and operated by Operator under this Agreement. Owner’s property not properly or fully insured shall be the financial responsibility of the Owner.

• b. Proper liability coverage for automobiles, trucks, dump trucks, and others, owned by Owner that could be used at the Project. Owner shall name Operator as an additionally insured party on the Certificate of Insurance.

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