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55695.00001\33485367.1
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<br />service territory of the withdrawing Party, and not from the general fund of the withdrawing Party
<br />itself. The liability of a withdrawing Party under this subsection shall be only to the Authority and
<br />not to any other Party.
<br />6.4 Termination of Agreement. This Agreement may be terminated by vote of the
<br />Board in accordance with subsection 3.9.4.1, or by mutual agreement of all the Parties approved
<br />by majority votes of their respective governing bodies. provided, however, that this subsection
<br />shall not be construed as limiting the rights of a Party to withdraw in accordance with Section 6.
<br />6.5 Disposition of Authority Assets Upon Termination of Agreement. Upon
<br />termination of this Agreement, any surplus money or assets in possession of the Authority for use
<br />under this Agreement, after payment of all liabilities, costs, expenses, and charges incurred by the
<br />Authority, shall be returned to the then-existing Parties in proportion to the contributions made by
<br />each.
<br />SECTION 7: MISCELLANEOUS PROVISIONS
<br />7.1 Dispute Resolution. The Parties and Authority shall make efforts to settle all
<br />disputes arising out of or in connection with this Agreement. Before exercising any remedy
<br />provided by law, a Party or Parties and the Authority shall engage in nonbinding mediation in the
<br />manner agreed to by the Party or Parties and the Authority. In the event that nonbinding mediation
<br />does not resolve a dispute within one hundred twenty (120) days after the demand for mediation
<br />is made, any Party or the Authority may pursue any all remedies provided by law.
<br />7.2 Liability of Directors, Officers, and Employees. The Directors, officers, and
<br />employees of the Authority shall use ordinary care and reasonable diligence in the exercise of their
<br />powers and in the performance of their duties pursuant to this Agreement. No current or former
<br />Director, officer, or employee will be responsible for any act or omission by another Director,
<br />officer, or employee. The Authority shall defend, indemnify, and hold harmless the individual
<br />current and former Directors, officers, and employees for any acts or omissions in the scope of
<br />their employment or duties in the manner provided by California Government Code § 995 et seq.
<br />Nothing in this subsection shall be construed to limit the defenses available under the law to the
<br />Parties, the Authority, or its Directors, officers, or employees.
<br />7.3 Indemnification. The Authority shall acquire such insurance coverage as the Board
<br />deems necessary to protect the interests of the Authority, the Parties, and the Authority’s
<br />ratepayers. The Authority shall indemnify, defend, and hold harmless the Parties and each of their
<br />respective board members or council members, officers, agents, and employees, from any and all
<br />claims, losses, damages, costs, injuries, and liabilities of every kind to the extent arising directly
<br />or indirectly from the conduct, activities, operations, acts, and omissions of the Authority under
<br />this Agreement.
<br />7.4 Assignment. The rights and duties of a Party may not be assigned or delegated
<br />without the advance written consent of all other Parties. Any attempt to assign or delegate such
<br />rights or duties without express written consent of all other Parties shall be null and void. This
<br />Agreement shall inure to the benefit of, and shall be binding upon, the successors and assigns of
<br />the Parties. This subsection does not prohibit a Party from entering into an independent agreement
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