July 13, 2026
Brenda Lopez, City Clerk
Saba Engineer, P.E., Grant Administrator
City of Adelanto
11600 Air Expressway
Adelanto, CA 92301
RE: FORMAL BID PROTEST - REBID, BELLFLOWER PARK PHASE I (CIP 2024-11), BID OPENING JULY 8, 2026
Dear Ms. Lopez and Ms. Engineer:
Zeco, Inc., the apparent third-low bidder, submits this formal protest concerning the proposed award of the rebid for Bellflower Park Phase I. The prior procurement was rejected and rebid; the City should now enforce the rebid documents, California contractor-licensing law, and the mandatory disclosure requirements equally. Zeco respectfully requests rejection of the bids submitted by Blue Builders Inc. ("Blue") and Marjani Builders, Inc. ("Marjani"), and recognition of Zeco as the lowest responsive and responsible bidder.
Adelanto Municipal Code section 3.10.200 requires formal bid contracts to be awarded to the lowest responsible bidder. Public Contract Code section 1103 defines responsibility to include trustworthiness, quality, fitness, capacity, and experience. Statewide licensing and subcontractor-listing statutes also apply, including Public Contract Code sections 3300 and 4104-4107 and Business and Professions Code sections 7056, 7057, and 7059.
I. BLUE BUILDERS INC. - B-ONLY LICENSE AND BLANK SUBCONTRACTOR LIST A. The rebid language did not authorize work outside the lawful scope of a Class B license.
The rebid allowed a Class A or B prime contractor, but only "in accordance with the laws of this state." Public Contract Code section 3300 requires the City to specify the classification required at award, and Business and Professions Code section 7059(b) requires that determination to conform to the statutory classifications. The words "A or B" therefore do not expand the lawful scope of a B license.
Blue holds only a Class B General Building license. California Business and Professions Code section 7057 defines and limits the permissible scope of a Class B General Building contractor. Consistent with that statute, CSLB specifically advised that the appropriate classification for this project is Class A and that Class B work must be performed in connection with a qualifying structure or building. By contrast, section 7056 expressly places parks, playgrounds, recreational works, irrigation, drainage, utilities, grading, trenching, paving, and related concrete work within the Class A General Engineering classification.
Most importantly, CSLB reviewed this actual project and responded that "the appropriate classification would be the A General Engineering" and that the work of a B contractor must be in conjunction with a structure/building and "is not appropriate for playground equipment." CSLB then identified the specialty classifications implicated by the plans, including C-12 earthwork/paving, licensed land surveying, C-8 concrete, C-34 pipeline, C-27 landscaping/irrigation, C-10 electrical, C-36 plumbing, C-20 mechanical, and C-13 fencing. This project-specific clarification cannot reasonably be ignored (See the attached correspondence).
B. Blue's blank subcontractor list binds it to self-perform work it is not licensed to perform.
The bid schedule separately requires substantial earthwork, concrete, paving, drainage/utilities, irrigation, electrical, plumbing, mechanical, fencing, water-feature, and surveying work. Blue submitted an entirely blank subcontractor list. Public Contract Code section 4104 requires listing each subcontractor performing work above the statutory threshold. Under section 4106, when no subcontractor is listed, the prime represents that it is fully qualified and agrees to self-perform that portion of the work.
Blue cannot reconcile that statutory commitment with its B-only license and CSLB's project-specific determination.
Nor can the defect be cured after bid opening by naming specialty subcontractors: Public Contract Code section 4107(c) generally prohibits subcontracting an unlisted portion above the threshold after award, absent a statutory basis and required approval process. A post-opening cure would materially change who will perform major portions of the work and would give Blue an option unavailable to bidders who timely disclosed their teams.
Accordingly, Blue did not submit a legally performable bid as structured and should be found nonresponsive and not qualified for award.
559
ZECO, INC.
22765 Savi Ranch Parkway, Unit F | Yorba Linda, CA 92887 714-622-7111 | [email protected] | CSLB #1031463 | A | B | D21 | C13 | C27
II. MARJANI BUILDERS, INC. – OMISSION OF MANDATORY SWORN QUESTIONNAIRE AND
RESPONSIBILITY DEFECTS
A. Omission of the mandatory Public Contract Code Section 10162 Questionnaire is material.
The rebid documents expressly required each bidder to complete and submit the Section A, Page A-6 questionnaire identified in the Submission Certification as the “Public Contract Code Section 10162 Questionnaire.” The Submission Certification required all listed documents to be completed, fully executed, and included with the bid, and expressly warned that failure to complete or submit any required document may be cause for rejection.
Marjani did not submit this mandatory questionnaire. The omitted form requires the bidder, under penalty of perjury, to disclose whether the bidder, any officer, or any employee with a proprietary interest has ever been disqualified, removed, or otherwise prevented from bidding on or completing a federal, state, or local government project because of a violation of law or safety regulation. The form expressly constitutes part of the Proposal.
Marjani’s execution of the separate Debarred Certification Acknowledgment does not satisfy or cure this omission.
The two forms request different information. In particular, the Debarred Certification addresses, among other matters, contracts terminated for default by a federal agency during the preceding three years, while the omitted questionnaire separately addresses federal, state, and local government projects and is required under penalty of perjury.
This is not a minor clerical omission. Based on Zeco’s review of Marjani’s bid package, the required questionnaire was not included. If the City contends that the questionnaire was submitted, Zeco requests that the City identify its location in the bid and confirm whether Marjani selected “Yes” or “No.” If “Yes” was selected, the required explanation must also have been included with the bid; a checked “Yes” without the explanation would remain incomplete. If “No” was selected, the City should independently evaluate the accuracy of that response in light of the available public records. Marjani should not be permitted after bid opening to add, revise, explain, or supplement this sworn response, because doing so would allow a material responsibility disclosure to be completed after competitors’ prices became known.
B. The omitted information concerns a directly relevant prior termination and bond claim.
The March 26, 2026 First Amended Complaint filed by RLI Insurance Company alleges that Marjani defaulted on the Family Resource Center Rehabilitation Remodeling Project; that the City of Rancho Cucamonga terminated Marjani for cause on June 23, 2025; that the City made a performance-bond claim; and that RLI paid $240,170 in excess completion costs. RLI further alleges losses of not less than $259,246.98 and failure by Marjani and its principal to reimburse the surety after demand. These are allegations in a filed pleading, but they concern precisely the information the City required Marjani to disclose under oath and independently verify before award.
The Department of Industrial Relations also issued a final decision in Case No. 18-0252-PWH finding that Marjani failed to timely seek review of a Civil Wage and Penalty Assessment and that the assessment became final on June 18, 2018. Zeco does not rely on that older matter as proof of present ineligibility; it is additional documented compliance history relevant to the City's responsibility analysis under Public Contract Code section 1103 and Adelanto Municipal Code section 3.10.200.
III. REQUESTED ACTION
For the reasons above, Zeco respectfully requests that the City:
1. Find Blue Builders Inc. nonresponsive and not legally qualified for award because its B-only license and blank subcontractor list commit it to self-perform major work outside the lawful scope confirmed by CSLB; 2 Find Marjani Builders, Inc. nonresponsive for omission of the mandatory Public Contract Code Section 10162 Questionnaire and conduct an independent responsibility review concerning the prior termination, performancebond claim, related surety litigation, final DIR assessment, and the accuracy and completeness of Marjani’s Contractor’s Qualification Statement.
560
ZECO, INC.
22765 Savi Ranch Parkway, Unit F | Yorba Linda, CA 92887 714-622-7111 | [email protected] | CSLB #1031463 | A | B | D21 | C13 | C27
3. Determine that Zeco, which holds Class A and B licenses and relevant specialty classifications and submitted a complete bid, is the lowest responsive and responsible bidder; and
4. Suspend any award recommendation until this protest is formally resolved, preserve the complete procurement record, and provide Zeco with a written determination addressing each ground raised.
Zeco reserves all rights and remedies, including the right to supplement this protest as additional bid records or agency findings become available. This letter is submitted without waiver of any statutory, equitable, or administrative remedy.
Sincerely,
Alex J. Rodriguez, P.E.
Construction Vice President
ZECO, INC.
Attachments: CSLB correspondence dated July 9-10, 2026; RLI First Amended Complaint; DIR Decision No. 18-0252-PWH; relevant bid forms and bidder submissions.
561
562
1 Alex J. Rodriguez
From: CSLB Classifications Deputy@CSLB <[email protected]> Sent: Friday, July 10, 2026 4:09 PM
To: Alex J. Rodriguez
Cc: Denecochea, Joe@CSLB; Amin Nazarinia
Subject: RE: License Classification Compliance Inquiry — Bellflower Park Phase I, City of Adelanto, CaliforniaProject: CIP 2024-11 | Bid Opening: July 08
Yes, an A General Engineering contractor is able to perform this scope of work as part of an engineered project.
You may choose instead to hire specialty contractors for each item.
1. Grading and earthwork (site preparation, clearing, excavation) – C-12 Earthwork and Paving
2. Survey work (construction staking and elevation verification) – Land surveyor (licensed by a different board)
3. Concrete work (splash pad foundation, walks, pads, curbs) – C-8 Concrete
4. Paving (asphalt and permeable concrete) - C-8 or C-12
5. Site drainage and utilities (underground systems) – C-34 Pipeline
6. Irrigation systems (landscape and water feature infrastructure) - C-27 Landscaping
7. Electrical work (service installation, panel, branch circuits, lighting, NEC 680 compliance) – C-10 electrical
8. Plumbing work (water lines, drainage, fixture connections) – C-36 Plumbing
9. Mechanical systems (equipment installation and controls) - assuming you mean HVAC, C-20 HVAC contractor
10. Fencing and railings (structural installation) – C-13 Fencing
11. Landscaping (site furnishings, soil preparation) – C-27 Landscaping
12. Prefabricated building assembly and utility connections – B- General Building or C-5 Framing and Rough Carpentry.
Thank you,
Classifications Deputy
Contractors State License Board
916 255-6333 fax
This determination is not a formal declaratory decision under the comprehensive process in the Administrative Procedures Act. I trust that the foregoing information has been of assistance to you.
From: Alex J. Rodriguez <[email protected]>
Sent: Thursday, July 9, 2026 2:14 PM
To: CSLB Classifications Deputy@CSLB <[email protected]> Cc: Denecochea, Joe@CSLB <[email protected]>; Amin Nazarinia <[email protected]> Subject: RE: License Classification Compliance Inquiry — Bellflower Park Phase I, City of Adelanto, CaliforniaProject: CIP 2024-11 | Bid Opening: July 08 I appreciate your time and respons e. The response is not clear and might create confusion. T his is not just about playground equipment. How about the other trades: 1. Grading and earthw ork (site preparation, clearing , excavati on) 2. Survey work I appreciate your time and response.
The response is not clear and might create confusion. This is not just about playground equipment.
How about the other trades:
1. Grading and earthwork (site preparation, clearing, excavation)
2. Survey work (construction staking and elevation verification)
3. Concrete work (splash pad foundation, walks, pads, curbs)
4. Paving (asphalt and permeable concrete)
5. Site drainage and utilities (underground systems)
6. Irrigation systems (landscape and water feature infrastructure)
7. Electrical work (service installation, panel, branch circuits, lighting, NEC 680 compliance)
8. Plumbing work (water lines, drainage, fixture connections)
9. Mechanical systems (equipment installation and controls)
10. Fencing and railings (structural installation)
11. Landscaping (site furnishings, soil preparation)
12. Prefabricated building assembly and utility connections Thank you,
Alex J. Rodriguez, P.E.
Construction VP
OƯice : 844-932-6462 | 714-622-7111
22765 Savi Ranch Parkway, Unit F
Yorba Linda, CA 92887
CSLB#1031463
DIR#200000482
563
2 From: CSLB Classifications Deputy@CSLB <[email protected]> Sent: Thursday, July 9, 2026 1:45 PM
To: Alex J. Rodriguez <[email protected]>
Cc: Denecochea, Joe@CSLB <[email protected]>; Amin Nazarinia <[email protected]> Subject: RE: License Classification Compliance Inquiry — Bellflower Park Phase I, City of Adelanto, CaliforniaProject: CIP 2024-11 | Bid Opening: July 08 The appropriate classification would be the A General Engineering. The work of a B General Building contractor must be in conjunction with a structure / building and is not appropriate for playground equipment. 7056. General Engineering Contractor (A)
A general engineering contractor is a contractor whose principal contracting business is in connection with fixed works requiring specialized engineering knowledge and skill, including the following divisions or subjects: irrigation, drainage, water power, water supply, flood control, inland waterways, harbors, docks and wharves, shipyards and ports, dams and hydroelectric projects, levees, river control and reclamation works, railroads, highways, streets and roads, tunnels, airports and airways, sewers and sewage disposal plants and systems, waste reduction plants, bridges, overpasses, underpasses and other similar works, pipelines and other systems for the transmission of petroleum and other liquid or gaseous substances, parks, playgrounds and other recreational works, refineries, chemical plants and similar industrial plants requiring specialized engineering knowledge and skill, powerhouses, powerplants and other utility plants and installations, mines and metallurgical plants, land leveling and earthmoving projects, excavating, grading, trenching, paving and surfacing work and cement and concrete works in connection with the above-mentioned fixed works.
Thanks,
Classifications Deputy
Contractors State License Board
916 255-6333 fax
This determination is not a formal declaratory decision under the comprehensive process in the Administrative Procedures Act. I trust that the foregoing information has been of assistance to you.
From: Alex J. Rodriguez <[email protected]>
Sent: Wednesday, July 8, 2026 10:38 AM
To: CSLB Classifications Deputy@CSLB <[email protected]> Cc: Denecochea, Joe@CSLB <[email protected]>; Amin Nazarinia <[email protected]> Subject: License Classification Compliance Inquiry — Bellflower Park Phase I, City of Adelanto, CaliforniaProject: CIP 2024-11 | Bid Opening: July 08 Dear CSLB Classifications Deputy, The subject project is Bellfl ower Park Phas e I (CIP 2024-11) l oc ated on Bel lfl ower Street by Chamberlaine Way, Adel anto, Californi a 92301. This is a new c ommunity park construction project featuring: • Splash Dear CSLB Classifications Deputy,
The subject project is Bellflower Park Phase I (CIP 2024-11) located on Bellflower Street by Chamberlaine Way, Adelanto, California 92301.
This is a new community park construction project featuring:
• Splash pad with recirculation and filtration systems
• Basketball court
• Playground and fitness equipment
• Shade structures
• Prefabricated restroom building
• Site furnishings (BBQ, trash receptacles, signage)
• Parking lot (asphalt and permeable concrete)
• Landscape and irrigation systems
• Fencing and railings
• Site drainage and grading
• Electrical systems including utility service, panel, lighting, and NEC Article 680 compliance for the water feature • Plumbing and mechanical infrastructure
Engineer’s estimate: $1.7 million. Project carries federal and state funding obligations (Davis-Bacon, BABA, Section 3).
Licensing Requirement from Bid Package:
The bid package explicitly requires: “All contractors shall be licensed with Class A or B in accordance with the laws of this state.” The apparent lowest bidder, Blue Builders Inc.( CSLB:1125448), holds a Class B (General Building) license, not Class A. The City has indicated that both Class A and Class B licenses are acceptable to bid.
Blue Builders submitted a subcontractor list that contains no entries whatsoever—the list is entirely blank. 564
3 Given the scope of work described above, which includes:
1. Grading and earthwork (site preparation, clearing, excavation)
2. Survey work (construction staking and elevation verification)
3. Concrete work (splash pad foundation, walks, pads, curbs)
4. Paving (asphalt and permeable concrete)
5. Site drainage and utilities (underground systems)
6. Irrigation systems (landscape and water feature infrastructure)
7. Electrical work (service installation, panel, branch circuits, lighting, NEC 680 compliance)
8. Plumbing work (water lines, drainage, fixture connections)
9. Mechanical systems (equipment installation and controls)
10. Fencing and railings (structural installation)
11. Landscaping (site furnishings, soil preparation)
12. Prefabricated building assembly and utility connections Our Specific Questions:
1. Can a Class B General Building contractor legally serve as prime contractor and self-perform all of the trades listed above without subcontracting to licensed specialists (C-36 Plumbing, C-10 Electrical, C-15 HVAC/Mechanical, etc.)?
2. Does the project scope—specifically a public works recreation facility with engineering-intensive site work, utilities, electrical service, and water recirculation systems—fall under the Class A General Engineering classification for parks and recreational works as defined in California Business and Professions Code Section 7056?
3. If a Class B contractor is permitted to bid this project, what is the minimum scope of work that must be subcontracted to appropriately licensed specialists, and does Blue Builders’ blank subcontractor list indicate non-compliance with Public Contract Code Section 4104 (0.5 percent subcontractor listing threshold)? Attached Documentation:
• Blue Builders Inc. subcontractor list (blank submission) • Bellflower Park Phase I bid package excerpt (licensing requirement and scope summary) • Project specifications outline
We respectfully request your clarification on whether Blue Builders Inc., holding only a Class B license with no licensed subcontractors listed, can legally perform the full scope of work as described without violation of California contractor licensing law.
Thank you,
Alex Rodriguez, P.E.
Zeco Inc.
565
RLI INSURANCE COMPANY’S FIRST AMENDED COMPLAINT PAGE 1
IN THE UNITED STATES DISTRICT COURT
FOR THE CENTRAL DISTRICT OF ILLINOIS
PEORIA DIVISION
RLI INSURANCE COMPANY )
)
Plaintiff, )
)
v. ) CASE NO. 1:26-cv-01030-JEH-RLH
)
MARJANI BUILDERS, INC., AND )
ALEXANDER A. MARJANI, )
)
Defendants. )
RLI INSURANCE COMPANY’S FIRST AMENDED COMPLAINT
Plaintiff RLI Insurance Company, by its attorneys Davis & Campbell L.L.C., hereby files its First Amended Complaint against Defendants Marjani Builders, Inc. and Alexander A. Marjani (collectively the “Indemnitors”), pursuant to Federal Rule of Civil Procedure 15, as follows:
I.
PARTIES
1. RLI Insurance Company (the “Surety”) is an Illinois corporation with its principal place of business in Peoria, Illinois. For jurisdiction purposes, the Surety is a citizen of the State of Illinois.
2. Defendant Marjani Builders, Inc. (“Marjani Builders”) is a California corporation with its principal place of business in Mission Viejo, California. Marjani Builders may be served through its counsel of record in this matter. For jurisdiction purposes, Marjani Builders is a citizen of the State of California.
3. Alexander A. Marjani (“Marjani”) is an individual and a resident of the State of California. Marjani may be served through his counsel of record in this matter. For jurisdiction purposes, Marjani is a citizen of the State of California.
E-FILED
Thursday, 26 March, 2026 05:40:20 PM
Clerk, U.S. District Court, ILCD
1:26-cv-01030-JEH-RLH # 11 Filed: 03/26/26 Page 1 of 10 566
RLI INSURANCE COMPANY’S FIRST AMENDED COMPLAINT PAGE 2
II.
JURISDICTION
4. This Court has jurisdiction over the claims asserted herein pursuant to 28 U.S.C. § 1332 in that this is a civil action between citizens of different states and the matter in controversy exceeds the sum of $75,000.00, exclusive of interest and costs.
III.
VENUE
5. Venue is proper in this Court pursuant to 28 U.S.C. § 1391(b)(3) as the Indemnitors, pursuant to the Indemnity Agreement discussed and defined below, agreed to submit to the jurisdiction of the Court. Specifically, pursuant to the mandatory and enforceable forum selection clause of the Indemnity Agreement, the Indemnitors agreed to “irrevocably and unconditionally submit[] to the exclusive jurisdiction, at the sole and exclusive option of the Company, of the courts in any state in which… the [Surety] is domiciled.” A true and correct copy of the Indemnity Agreement is attached as Exhibit A.
IV.
FACTUAL BACKGROUND
6. On or about July 26, 2024, the Indemnitors entered into an Agreement of Indemnity (the “Indemnity Agreement”) in favor of the Surety. The Indemnity Agreement was executed and delivered to the Surety as consideration for and as a condition precedent to the issuance of certain surety bonds on behalf of the Indemnitors in connection with the Family Resource Center Rehabilitation Remodeling Project (the “Project”).
7. In the Indemnity Agreement, each of the Indemnitors agreed to indemnify and hold harmless the Surety from any and all liability and loss sustained or incurred arising from or related to bonds, including the Bonds,1issued on behalf of the Indemnitors. Ex. A, p. 2, ¶ 3. 1 As defined below in Paragraph 11.
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RLI INSURANCE COMPANY’S FIRST AMENDED COMPLAINT PAGE 3
8. The Indemnitors further agreed in the Indemnity Agreement to deposit with the Surety, on demand, any monetary sum to secure actual or contingent liability or claim pertaining to the Bonds. Id., ¶ 4.
9. The Indemnity Agreement grants RLI the authority to settle any claims made on the Bonds. More specifically, the Indemnity Agreement provides:
The [Surety], in its sole discretion, shall have the right to determine for itself and the Indemnitors whether any claim, demand or suit brought against the [Surety] or relating to any Bond shall be paid, compromised, settled, tried, defended or appealed, and the [Surety]'s decision and/or action with regard to any claim shall be binding upon the Indemnitors. If [the Surety] exercises its right to settle as described herein, the [the Surety] shall be entitled to reimbursement for its Loss.
See Ex. A, p. 3, ¶ 11.
10. Further, in the Indemnity Agreement, the Indemnitors, amongst other promises, agreed to hold harmless, indemnify, and keep indemnified the Surety from and against any and all claims, demands or legal expenses of any kind incurred by the Surety as a result of having issued the Bonds.
2 More specifically, in the Indemnity Agreement, the Indemnitors agreed, in relevant part, as follows:
The Indemnitors agree to exonerate, indemnify and hold [the Surety] harmless from and against all Loss. Upon demand, the Indemnitors shall pay to the [Surety], as soon as liability exists or is asserted against the [Surety], whether or not the [Surety] shall have made any payment therefor. The vouchers or other evidence of any such payments made by the [Surety] shall be prima facie evidence of the fact and amount of the liability of the Indemnitors to [the Surety]. The obligations of the Indemnitors under this Agreement are joint and several. In the event of any claim or demand being made by the [Surety] against the Indemnitors, or any one or more of the parties so designated, by reason of the execution of a Bond or Bonds, the [Surety] 2 The Indemnity Agreement defines “Loss” as “means any and all cost and expense of any kind or nature, including attorney fees, consulting, and other professional fees and expenses which the Company incurs in connection with any Bond or with enforcing the terms of this Agreement. Said cost and expense shall include, but not be limited to, the Company's (i) investigation in connection with any Bond; (ii) prosecuting, litigating or defending any action, claim, or other cause of action related to a Bond; (iii) obtaining the Company's release from any Bond; (iv) enforcing the terms of this Agreement by claim, demand, or litigation; (v) recovering or attempting to recover any collateral or causes of action assigned or for which the Company is granted a security interest; and (vi) all interest at the highest legal rate.” See Ex. A, p. 1, ¶ d.
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RLI INSURANCE COMPANY’S FIRST AMENDED COMPLAINT PAGE 4
is hereby expressly authorized to settle with any one or more of the Indemnitors individually, and without reference to the others, and such settlement or composition shall not affect the liability of any of the others, and Indemnitors hereby expressly waive the right to be discharged and released by reason of the release of one or more of the joint debtors, and hereby consent to any settlement or composition that may hereafter be made. The liability of the Indemnitors hereunder shall not be affected by the failure of any Indemnitor(s) to sign any Bond, nor by any claim that other indemnity or security was to have been obtained, nor by the release of any indemnity, nor the return or exchange of any collateral that may have been obtained. Further, if any party signing this Agreement is not bound for any reason, this Agreement shall still be binding upon each and every other party. The Indemnitors each waive and subordinate all rights of indemnity, subrogation and contribution each against the other until all obligations to the [Surety] under this Agreement have been satisfied in full.
See Ex. A, p. 2, ¶ 3. Further, Paragraph 4, provides:
At any time, if the [Surety] is threatened with liability, receives a claim against a Bond, or believes that it may incur liability, the Indemnitors will, immediately upon demand, and regardless of whether the [Surety] has made any payment, incurred liability, or established a reserve, pay the [Surety] an amount the [Surety] deems, in its sole discretion, is necessary to protect itself from a potential Loss or actual Loss. The [Surety] shall have the right to use the deposit, or any part thereof, as collateral security for a Loss, to reimburse itself for a Loss it paid, and/or to pay for a Loss. The [Surety] shall have no obligation to invest said collateral or to provide a return and/or interest on the collateral deposit. The [Surety] will return any unused portion of the deposit upon the termination of the [Surety]'s liability on the Bonds and after the [Surety] has fully reimbursed itself for its Loss under this Agreement.
The Indemnitors acknowledge and agree that their failure to provide collateral security to the [Surety] in accordance with the provisions of this section shall irreparably harm the [Surety] and that monetary damages will be inadequate to compensate the [Surety]. The Indemnitors waive any and all defenses they may have to such a request and shall not raise any defense in opposition to a request for order requiring the posting or deposit of collateral security.
11. In reliance upon the Indemnity Agreement and at the request of the Indemnitors, the Surety issued certain performance and payment bonds on behalf of Marjani Builders as principal. Among other bonds, the Surety issued certain payment and performance bonds, each identified by no. RCB0031131 (the “Bonds,” each the “Bond”) and each in the penal sum of $679,000.00, in connection with the Project. True and correct copies of the Bonds are attached as Exhibit B.
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RLI INSURANCE COMPANY’S FIRST AMENDED COMPLAINT PAGE 5
12. Marjani Builders defaulted on the Project, resulting in a claim against the Bond, and on June 23, 2025, the City of Rancho Cucamonga (the “City”) terminated Marjani Builders from the Project for cause alleging multiple defaults, including, but not limited to, Marjani Builders’ failure to comply with certain terms of its contract with the City. A true and correct copy of the letter terminating Marjani Builders is attached as Exhibit C.
13. The City made a claim on the Bond issued by the Surety in relation to the Project.
As a result of such claim, the Surety has already incurred substantial losses, costs, and expenses (including, but not limited to, court costs, consultant fees, and attorney’s fees), in connection with investigating and resolving claim asserted against the Bond for which the Indemnitors have failed to indemnify and hold harmless the Surety.
14. Specifically, following Marjani Builders’ termination from the Project, and the City’s subsequent claim on the Bond, RLI and the City entered into a Tender Agreement to settle the City’s claim on the Bond. Pursuant to the Indemnity Agreement, RLI had the right, in its sole discretion, to settle the City’s claim and RLI is entitled to reimbursement for its loss related to the Tender Agreement. Pursuant to the Tender Agreement, RLI paid $240,170.00 (the excess completion cost above and beyond the contract balance necessary for completion of the Project after Marjani Builders’ termination for default) to the City. A true and correct copy of the Tender Agreement is attached as Exhibit D.
15. Additionally, RLI has incurred additional losses of not less than $19,076.98 in fees and other expenses that are defined Losses pursuant to the Indemnity Agreement.
16. Accordingly, to date, the Surety has been damaged in the amount not less than $259,246.98.
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RLI INSURANCE COMPANY’S FIRST AMENDED COMPLAINT PAGE 6
17. Additionally, the Surety is exposed to additional losses, costs, and expenses as a result of defending frivolous claims of Marjani Builders and pursuing its rights of indemnity, all of which the Surety is entitled to recover.
18. On October 30, 2025, the Surety made written demand on the Indemnitors pursuant to the Indemnity Agreement to indemnify and reimburse the Surety for its losses, costs, and expenses and deposit collateral to protect the Surety from future liabilities and losses. A true and correct copy of the demand letter (the “Demand Letter”), without enclosures, is attached as Exhibit E.
19. Despite the Surety’s demand that the Indemnitors honor their obligations under the Indemnity Agreement, the Indemnitors have wholly failed and refused to indemnify and hold harmless the Surety from any and all and all claims, demands or legal expenses of any kind incurred by the Surety as a result of having issued the Bonds and have failed to place the Surety in funds to protect the Surety from liability and loss.
20. Indemnitors have failed to pay moneys as required by the Indemnity Agreement and have withheld said moneys by an unreasonable and vexatious delay in payment to the Surety.
V.
CAUSES OF ACTION
COUNT ONE
BREACH OF CONTRACT
21. The Surety incorporates the allegations in Paragraphs 1-20 above as if fully set forth herein.
22. The Indemnitors have an obligation under the Indemnity Agreement to, among other things, indemnify and hold harmless the Surety from and against any and all claims, demands or legal expenses of any kind or nature which arise by reason of the execution of any bonds issued 1:26-cv-01030-JEH-RLH # 11 Filed: 03/26/26 Page 6 of 10 571
RLI INSURANCE COMPANY’S FIRST AMENDED COMPLAINT PAGE 7
for and/or on behalf, or at the request of, any and/or all Indemnitors, including attorneys’ fees and costs incurred by the Surety in enforcing the terms of the Indemnity Agreement, which the Indemnitors have failed to do. Ex. A, p. 1, ¶ d., p. 2, ¶ 3.
23. Additionally, the Indemnitors have an obligation to deposit a monetary sum with the Surety in an amount the Surety determines is sufficient to secure any actual or contingent liability or claim pertaining to the Bonds. Id., at p. 2, ¶ 4.
24. The Surety has demanded that the Indemnitors honor their obligations under the Indemnity Agreement to, among other things, hold harmless, indemnify, and keep indemnified the Surety from and against any and all claims, demands or legal expenses of any kind (including, but not limited to pre and post-judgment interest, court costs, consultant and counsel fees and expenses) and to place the Surety in funds to protect the Surety from liability and loss pursuant to the Indemnity Agreement.
25. Despite such demand, the Indemnitors have failed and refused to honor their obligations under the Indemnity Agreement.
26. The Indemnitors’ failures and refusals to honor their express obligations under the Indemnity Agreement are material breaches of contract.
27. To date, the Surety has incurred losses in an amount not less than $259,246.98.
28. As a result of the Indemnitors’ breaches of the Indemnity Agreement, the Surety has sustained losses, costs, and expenses, including, but not limited to, attorneys’ fees, consulting fees, and expenses incurred investigating, resolving, and litigating claims made against the Bonds, and enforcing the Indemnity Agreement, and the Surety will continue to sustain additional losses and expenses through the time of trial.
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RLI INSURANCE COMPANY’S FIRST AMENDED COMPLAINT PAGE 8
29. Pursuant to the clear terms of the Indemnity Agreement, the Surety is entitled to judgment for indemnity and exoneration against the Indemnitors for the Surety’s losses, costs, and expenses (including, but not limited to, attorneys’ fees and consulting fees) as a result of issuing the Bonds to the Indemnitors and enforcing the Surety’s rights under the Indemnity Agreement.
Further, the Surety is entitled to specific performance of its collateral rights to protect it from loss.
30. All conditions precedent to the Surety’s entitlement to assert the above claims and causes of action have occurred or have been satisfied, waived, or excused.
VI.
REQUEST FOR RELIEF
31. Plaintiff RLI Insurance Company requests the following relief:
A. Judgment against the Defendants Marjani Builders, Inc. and Alexander A. Marjani, jointly and severally, and in favor of the Surety, in an amount not less than $259,246.98 for all costs, expenses, or other “Loss” (as defined in the Indemnity Agreement);
B. An award to the Surety of its attorneys’ fees, costs, pre- and post-judgment interest at the maximum amount allowed by law; and
C. Awarding the Surety such other and further relief at law or in equity to which it is justly entitled.
Dated: March 26, 2026 Respectfully submitted,
RLI INSURANCE COMPANY
By: /s/ Christopher J. Jump
One of its Attorneys
1:26-cv-01030-JEH-RLH # 11 Filed: 03/26/26 Page 8 of 10 573
RLI INSURANCE COMPANY’S FIRST AMENDED COMPLAINT PAGE 9
David G. Lubben (Lead Counsel)
Christopher J. Jump
Julie A. Noel
DAVIS & CAMPBELL L.L.C.
401 Main Street, Suite 1600
Peoria, Illinois 61602
Tele: (309) 673-1681
Fax: (309) 673-1690
E-Mail: [email protected]
[email protected]
[email protected]
Attorneys for RLI Insurance Company
1:26-cv-01030-JEH-RLH # 11 Filed: 03/26/26 Page 9 of 10 574
RLI INSURANCE COMPANY’S FIRST AMENDED COMPLAINT PAGE 10
CERTIFICATE OF SERVICE
The undersigned hereby certifies that a true and correct copy of the foregoing was served on all counsel of record listed below on this 26th day of March, 2026, via the Court’s electronic filing system, U.S. Mail, and/or electronic mail:
Mark D. Johnson
Offit Kurman, P.C.
[email protected]
Amy M. Gibson
Aronberg Goldgehn Davis & Garmisa
[email protected]
David G. Lubben
Davis & Campbell L.L.C.
[email protected]
Julie A. Noel
Davis & Campbell L.L.C.
[email protected]
/s/ Christopher J. Jump
Davis & Campbell L.L.C.
Attorneys for RLI Insurance Company
1:26-cv-01030-JEH-RLH # 11 Filed: 03/26/26 Page 10 of 10 575
STATE OF CALIFORNIA
DEPARTMENT OF INDUSTRIAL RELATIONS
In the Matter of the Request for Review of:
Marjani Builders, Inc. Case No.: 18-0252-PWH
From a Civil Wage and Penalty Assessment issued by:
Division of Labor Standards Enforcement
DECISION OF THE DIRECTOR OF INDUSTRIAL RELATIONS
Affected contractor Marjani Builders, Inc. (Marjani) requested review of a Civil Wage and Penalty Assessment (Assessment) issued by the Division of Labor Standards Enforcement (DLSE) on April 13, 2018. Pursuant to California Code of Regulations, title 8, section 17227, on September 18, 2018, the appointed Hearing Officer, Steven A.
McGinty, served an Order to Show Cause Why Request for Review Should Not Be Dismissed as Untimely under Labor Code section 1742, subdivision (a) (OSC).1 Section 1742, subdivision (a), mandates that a request for review be transmitted to the Labor Commissioner within 60 days after service of the Assessment.
For the reasons stated below, this Decision finds that the time limit for requesting review is mandatory and jurisdictional, and that Marjani’s Request for Review was not filed timely. Accordingly, the Request for Review must be dismissed.
Facts
DLSE issued the Assessment against Marjani on April 13, 2018. Marjani received the Assessment on April 16, 2018.2 Marjani filed a Request for Review on August 20,
1 All statutory references are to the Labor Code unless otherwise specified. 2 Marjani’s representative acknowledged receipt of the Assessment on April 16, 2018, in a pleading filed with the Labor Commissioner on August 20, 2018, entitled Request for Relief from Default (C.C.P. 473(b); Declaration of Alexander A. Marjani [in Support of Request from Relief from Default] (Marjani Declaration), p. 4.)
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2018. One hundred and twenty-nine (129) days lapsed between the date DLSE issued the Assessment and the date Marjani filed the Request for Review.
Notice of the right to seek review is found at the top of page two of the Assessment. The notice states in part:
Notice of Right to Obtain Review - Formal Hearing
In accordance with Labor Code Section 1742, an affected contractor or subcontractor may obtain review of this Civil Wage and Penalty Assessment by transmitting a written request to the office of the Labor Commissioner that appears below within 60 days after service of the assessment.
To obtain a hearing, a written Request for Review must be transmitted to the following address:
Labor Commissioner - State of California
Civil Wage and Penalty Assessment Review Office
PO Box 32889
Long Beach, CA 90832
Twice between the dates of issuance of the Assessment and the filing of the Request for Review, Marjani contacted the Deputy Labor Commissioner who prepared the Assessment, Lori Rivera, in writing. On April 23, 2018, Mr. Marjani, an officer of Marjani, wrote a letter to Rivera indicating that the Assessment included misinformation that needed clarification and requesting a settlement meeting to review “more valid documents.” On April 26, 2018, Rivera replied to Marjani’s letter indicating that she understood that it disagreed with the Assessment, and advising that: “If you wish to request review of this case, please submit your request to the address as indicated on page 2 of the Civil Wage and Penalty Assessment you received.” Rivera also informed Marjani that it could schedule a settlement meeting at any time; that settlement meetings were informal and conducted over the telephone; and, that if Marjani had additional evidence for her to review it should be submitted in advance of the meeting so she would have time to review it, and apply credit to the audit if applicable. Mr. Marjani understood
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Rivera’s response as an invitation to file a request for review. (Marjani Declaration, ¶ 11, p. 1.)
On May 4, 2018, Marjani wrote a letter to Rivera responding to various contentions in the Assessment. Attached to the letter was a summary timesheet for the subcontractor’s employees covering 14 weeks on the Project. Mr. Marjani concluded the letter by stating, “Unless for information, please remove Marjani Builders, Inc., from the assessment and kindly let me know if we still have to ask for a hearing.”3 On May 11, 2018, Rivera replied to Marjani’s letter stating, inter alia, that:
…Marjani Builders, Inc., will not be removed from the assessment. Again if you wish to request review of the case please submit your request to the address as indicated in the Civil Wage and Penalty Assessment you received.
Rivera also indicated in her letter that Marjani had failed to provide sufficient evidence to result in any credit against the amount assessed. (Declaration of Lori Rivera in Support of DLSE’s Response to Order to Show Cause (Rivera Declaration), ¶ 9, pp. 3, ll. 11-16, and Exhibit 5 attached thereto.)
In addition to communicating in writing, Rivera and Mr. Marjani spoke on the telephone. On April 26, 2018, Rivera told Marjani that if he disagreed with the Assessment, he needed to file an appeal. According to Rivera:
I told Mr. Marjani that the worst thing he could do was to do nothing. He asked how to file the request. I explained to him how to request for review and where it [sic] mail it as indicated on the assessment. (Rivera Declaration, ¶ 7, pp. 2-3, ll. 1-3.)
After May 11, 2018, there was no further communication from Marjani. (Id., ¶ 10, p. 3, ll. 17-18.)
On June 29, 2018, DLSE filed with the Superior Court in Orange County a Request That Clerk Enter Judgment on the Final Civil Wage and Penalty Assessment.
3 Both parties submitted copies of the letters dated April 23, April 26, and May 4, 2018, as attachments to declarations. Marjani submitted the letters as part of its Request for Relief from Default filed with the Labor Commissioner along with its Request for Review. DLSE submitted the letters as part of its Response to the Order to Show Cause.
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Judgment in favor of DLSE was entered that day. (Declaration of Luong Chau in Support of DLSE’s Response to Order to Show Cause (Chau Declaration), ¶ 4, p. 2, ll.16-21, and Exhibit 2 attached thereto.) On July 9, 2018, Marjani received the Notice of Entry of Judgment. (Marjani Declaration, ¶ 16, p. 2.) On August 20, 2018, Marjani filed with the Labor Commissioner a Request for Relief from Default (C.C.P. 473(b) (Request for Relief) and its Request for Review of the Assessment.
The parties were provided ten days to file a response in writing to the Hearing Officer’s OSC of September 18, 2018, and five days to reply to any submission by any other party. On September 27, 2018, Marjani’s representative requested an extension of time to respond to the OSC. The representative informed the Hearing Officer that Marjani had filed a Motion with the Superior Court seeking relief from the Judgment, and that counsel for DLSE had agreed to the extension of time. On September 28, 2018, the Hearing Officer extended the time to respond to the OSC by thirty days.
On October 26, 2018, DLSE filed its Response to the Order to Show Cause. In the Response pleadings, DLSE noted that on August 21, 2018, Marjani filed in Superior Court a Motion to Set Aside the Clerk’s Judgment (Motion). On September 28, 2018, the Court granted Marjani’s Motion and the Judgment was vacated. (Chau Declaration, ¶5, p. 2, ll. 22-28, and Exhibit 3 attached thereto.)
Discussion
Section 1742, subdivision (a), provides that an affected contractor may request review of a civil wage and penalty assessment within 60 days after service of the assessment. If no hearing is requested within that period, “the assessment shall become final.” (§ 1742, subd. (a.) The applicable regulations, at title 8, section 17222, restate the 60-day filing requirement, and expressly provide that, “Failure to request review within 60 days shall result in the Assessment…becoming final and not subject to further review under these Rules.”
Section 17227 of the regulations governs the early disposition of a Request for Review that appears untimely. Under the rule, the Hearing Officer issues an Order to 579
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Show Cause why the Request for Review should not be dismissed as untimely under section 1742. The Order is served on all parties and provides the parties an opportunity to respond to the Order and to reply to any submission by any other party. Evidence in support or opposition to the Order is submitted by affidavit or declaration. (Cal. Code Regs., tit. 8, § 17227, subds. (a) and (b).) There is no right to an oral hearing under the rule. (Id., subds. (b) and (c).)4 The rule expressly authorizes the Director to dismiss a Request for Review that is untimely under section 1742. (Id., subds. (c) and (d).) This case proceeded under procedures set forth in Section 17227 of the regulations. The Hearing Officer issued an OSC. The parties filed various pleadings in response and reply.
The evidence in the record established that the last day to transmit a written request for review in this matter was June 18, 2018.5 The Assessment became final on June 18, 2018. Therefore, under section 1742, Marjani’s Request for Review transmitted on August 20, 2018, was untimely. The Director is without jurisdiction to proceed on the untimely Request for Review. (§ 1742, subd. (a); Cal. Code Regs., tit. 8, § 17222, subd. (a); see also Pressler v. Donald L. Bren Co. (1982) 32 Cal.3d 831 [where the time for filing is mandatory and jurisdictional, a late filing may not be excused on the grounds of mistake, inadvertence, or excusable neglect]; REO Broadcasting Consultants v. Martin (1999) 69 Cal.App.4th 489 [same].)
Marjani advanced the argument that it should be relieved from “default” due to mistake, inadvertence, and excusable neglect, citing Code of Civil Procedure, section 473, subdivision (b). That section authorizes a trial court to set aside an entry of default
4 Marjani requested a hearing on the OSC. The request is denied, as the operative facts are clear. Rule 27 was designed to prevent the Director from having to provide a hearing where the Request for Review appears untimely. The rule serves to conserve resources and promotes efficient use of hearing calendar time. The Parties were provided ample opportunity to submit responses and replies in writing. The Hearing Officer extended the time to respond to the OSC by thirty days. The Requesting Party had previously submitted a Request for Relief from Default with the accompanying Marjani Declaration. Thus, there was already argument and sufficient evidence on the issue of timeliness in the record. 5 The Assessment issued on April 13, 2018. The 65th day after April 13, was June 17, 2018, a Sunday.
Thus, Monday, June 18, 2018, was the last day to transmit the Request for Review. 580
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or judgment because of mistake, inadvertence, surprise, or excusable neglect. However, neither the prevailing wage laws in the Labor Code nor the applicable regulations provide the Director authority to excuse a contractor from its failure to timely request review based on mistake, inadvertence, surprise, or excusable neglect. To the contrary, the plain language of section 1742, subdivision (a), unequivocally provides that if there is a failure to timely request review within 60 days after service of the assessment, “the assessment shall become final.” (Emphasis added). The word “‘shall’ is mandatory.” (§ 15.) Once the Assessment has become final, the Director lacks authority under the rules to further review the Assessment. (Cal. Code Regs., tit. 8, § 17222.) Even if the Director had the authority to relieve a contractor from “default,” the record in this case would not support such relief. Marjani was advised several times of the importance of submitting a request of review if it wished to appeal the Assessment.
In support of its “default” argument, Marjani argued that its letter dated May 4, 2018, was a Request for Review but that Marjani transmitted it to the wrong office by mistake. (Request for Relief from Default (C.C.P. 473(b)); Marjani Declaration, ¶ ¶ 12 and 13, p.
2.) The evidence belies the argument. The letter was, in fact, an attempt to furnish information to Rivera for her evaluation. The paragraph numbered “1” says as much, where it states, “We are just trying to furnish all information we possess for your [Rivera’s] correct evaluation.” Most importantly, the letter ends with the phrase, “[K]indly let me know if we still have to ask for a hearing.” Marjani used that phrase after being told twice how to request review and, importantly, encouraged, or as he himself admitted, “invited,” to request review.
In addition, the evidence established that Rivera wrote to Marjani on May 11, 2018, in response to the May 4 letter, making clear that it was necessary to file a Request for Review. Rivera’s letter stated “If you wish to request review of the case please submit your request to the address as indicated in the Civil Wage and Penalty Assessment you received.” At that time, there was still more than a month in which to act to preserve the right to contest the Assessment. Even after learning of the default taken in Superior Court on July 9, 2018, Marjani did not take action for another forty-two (42) days. 581
Had Marjani timely filed a Request for Revie.w, it would have vested the Director with jurisdiction to review the Assessment and to conduct a hearing as necessary.
Marjani failed to do so. The time limit is mandatory and jurisdictional, and accordingly, the Assessment is final.(§ 1742, subd. (a).)
Based on the foregoing, the Director makes the following findings:
FINDINGS
1. Marjani Builders, Inc. did not timely request review of the Civil Wage and Penalty Assessment issued April 13, 2018.
2. The Assessment became final on June 18, 2018.
3. The Director has no jurisdiction to proceed on the untimely Request for Review filed by Marjani Builders, Inc.
ORDER
Marjani Builder, Inc.'s Request for Review is dismissed. The Hearing Officer shall issue and serve a Notice of Findings on the parties.
Dated: ~IJ'(\L \ ~I 2.o\q ~.J
6 See Government Code sections 7, 11200.4.
Decision of the Director of
Industrial Relations
Victoria Hassid
Chief Deputy Director6
Department oflndustrial Relations
-7- Case No. 18-0252-PWH
582
CITY COUNCIL AGENDA REPORT
A D E L A N T O G O V E R N M E N T A L C E N T E R | 1 1 6 0 0 A I R E X P R E S S W A Y | A D E L A N T O , C A L I F O R N I A 9 2 3 0 1
DATE: July 8th, 2026
TO: Honorable Mayor and City Council Members
FROM: Jessie Flores, City Manager
BY: Jose Hernandez, Energy Consultant
SUBJECT: APPROVAL OF CONTRACT SERVICE AGREEMENT WITH APOLON 7, INC. FOR EV CHARGING STATIONS AND REVENUE SHARING.
STAFF RECOMMENDATION:
Staff recommend approval of the contract service agreement with Apolon7, Inc., for the development, installation, operation, and maintenance services of EV charging stations. Apolon7 will be financially responsible for building, operating, and maintaining the EV charging stations, with the city making certain city-owned parking areas available for the stations. The city will receive a portion of revenue from each station depending on type of charge (Level 2, 3, or 4).
BACKGROUND:
As electric vehicle adoption continues to increase throughout California and the nation, demand for accessible charging infrastructure has grown accordingly. With Highway 395 serving as a major transportation corridor through Adelanto, the city is well positioned to accommodate both residents and travelers seeking EV charging services. The proposed agreement with Apolon7, Inc. provides an opportunity to expand charging infrastructure within the city without requiring capital investment or ongoing maintenance responsibilities from the city. Under the agreement, Apolon7 will be responsible for the development, installation, operation, and maintenance of the charging stations, while the city will receive a share of revenue generated from station usage. The agreement also includes provisions that allow the city to require the relocation or removal of charging stations if future development projects necessitate changes to the designated sites.
The specific locations of the EV charging stations will be determined jointly by the City of Adelanto and Apolon7, Inc.
FISCAL IMPACT:
Approval of the contract will result in a positive impact on city funds, depending on the total amount of consumers who use the charging stations. The city will receive 40% of Net Revenue for Level 2 chargers (11 kW and 22kW chargers), and 20% of Net Revenue for Level 3 and 4 chargers (40 kW, 60 kW, 240 kW, and 480 kW chargers). In any case, the City’s minimum share of income will be a minimum of twenty percent (20%) of Gross Revenue for Level 2 chargers and ten percent (10%) of Gross Revenue for Level 3 & 4 Chargers.
ATTACHMENTS:
A. Apolon7 Contract Service Agreement
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PAGE 1
CONTRACT
BY AND BETWEEN
THE CITY OF ADELANTO
AND
APOLON7 INC.
FOR
EV CHARGING STATION
DEVELOPMENT, INSTALLATION,
OPERATION, AND MAINTENANCE SERVICES
584
Agreement Between Apolon7 and the City of Adelanto
PAGE 2
This Parking Space Lease and EV Charging Services Agreement (“Agreement”) is made as of July 17, 2026 (“Effective Date”), by and between the City of Adelanto, a California municipal corporation (“City” or “Lessor”), and Apolon7, Inc., a California corporation (“Apolon7” or “Lessee”). City and Apolon7 are sometimes referred to individually as a “Party” and collectively as the “Parties.”
RECITALS
A. City desires to support the expansion of electric vehicle (“EV”) charging infrastructure within the City of Adelanto, including at City-owned facilities.
B. Apolon7 is in the business of developing, installing, owning, operating, and maintaining EV charging stations and associated equipment and services.
C. City is willing to make certain City-owned parking areas available to Apolon7 for the installation and operation of EV charging stations, on the terms and conditions set forth in this Agreement.
D. The Parties intend this Agreement to be straightforward, to allocate responsibilities in a reasonable and commercially practical manner, and to avoid requiring City to assume extraordinary risks, while enabling Apolon7 to invest in and operate EV charging infrastructure that benefits residents, visitors, and businesses.
E. The Parties further intend that this collaboration will help position the City of Adelanto as a leading example in California for clean transportation and EV infrastructure deployment.
F. The Parties understand that Apolon7 also intends to develop EV charging stations at private properties within the City under separate arrangements, and that this Agreement governs only those locations situated on City-owned property.
NOW, THEREFORE, in consideration of the mutual covenants and promises contained herein, City and Apolon7 agree as follows:
1. DEFINITIONS
1.1 “Charging Revenue” means all amounts actually collected by Apolon7 from end users for charging services at EV charging stations installed on City Sites under this Agreement, excluding any taxes, surcharges, or fees collected on behalf of governmental entities. 585
Agreement Between Apolon7 and the City of Adelanto
PAGE 3
1.2 “Advertising Revenue” means all amounts actually collected by Apolon7 from third parties for paid advertising served on display screens integrated into EV charging stations at City Sites.
1.3 “LCFS Credit Revenue” means all proceeds actually received by Apolon7 from the sale or monetization of credits, offsets, or similar environmental attributes generated under California’s Low Carbon Fuel Standard or any successor or similar program, to the extent attributable to energy dispensed at EV charging stations on City Sites.
1.4 “Gross Revenue” means the sum of Charging Revenue, Advertising Revenue, and LCFS Credit Revenue from EV charging stations at City Sites.
1.5 “Allowable Deductions” means, solely for purposes of calculating Net Revenue, the following actual, out-of-pocket costs incurred by Apolon7 with respect to City Sites: (a) electricity and utility charges for operation of the EV charging stations; (b) payment processing and transaction fees charged by third-party processors; (c) network and software service fees directly related to the operation of the chargers; (d) sales, use, excise, or similar taxes imposed on Gross Revenue (excluding income taxes); and (e) any revenue-sharing or commissions payable to third-party site hosts, if any, with respect to City Sites (which are not expected for City-owned property but are included here for completeness in case the Parties later designate a jointly managed site).
1.6 “Net Revenue” means Gross Revenue from EV charging stations at City Sites, minus Allowable Deductions, as reasonably documented by Apolon7.
1.7 “City Sites” means those City-owned locations and associated parking spaces designated by mutual written agreement of the Parties from time to time, as more particularly described in Exhibit A (Site Schedule), as it may be amended by written Site Addenda.
1.8 “Site Addendum” means a short written supplement to this Agreement, signed by both Parties, describing a specific City Site (or Sites), including address, number and location of dedicated parking spaces to be used for EV charging, and any site-specific conditions.
2. PREMISES; SITE SCHEDULE
2.1 Lease of Parking Spaces. Subject to the terms of this Agreement, City leases to Apolon7, and Apolon7 leases from City, non-exclusive use (other than temporary exclusivity as to charging spaces themselves) of certain parking spaces and related areas at the City Sites described on Exhibit A and in any future Site Addenda (collectively, the “Premises”). 586
Agreement Between Apolon7 and the City of Adelanto
PAGE 4
The Parties anticipate that Apolon7 will develop approximately seven (7) EV charging locations throughout the City of Adelanto, including a mix of City Sites governed by this Agreement and separate private partner sites under separate agreements, and that the number of City Sites under this Agreement may be more or fewer than seven (7) over time.
2.2 City Sites and Additions. The Parties shall work cooperatively to identify and finalize each City Site. For each City Site, the Parties will execute a brief Site Addendum that will be attached to and incorporated into this Agreement. No City Site shall be added, and no work shall commence at any City Site, unless and until both Parties have signed the applicable Site Addendum and all required City approvals, if any, have been obtained in accordance with applicable law.
2.3 Shared Use of Parking Areas. Except for those parking spaces specifically designated for EV charging in a Site Addendum, City shall retain full control over its property and may continue to use and manage the surrounding areas, provided such use does not unreasonably interfere with Apolon7’s rights under this Agreement.
3. TERM
3.1 Initial Term. The term of this Agreement shall commence on the Effective Date and continue for ten (10) years, unless earlier terminated in accordance with this Agreement (“Initial Term”).
3.2 Renewal Terms. Upon mutual written agreement of the Parties, this Agreement may be extended for up to two (2) additional periods of five (5) years each (each, a “Renewal Term”). Any renewal shall be on substantially the same terms, subject to any adjustments agreed in writing by the Parties prior to the commencement of the applicable Renewal Term.
3.3 Site-Specific Commencement. Apolon7’s right to enter and perform work at a particular City Site shall commence on the date identified in the applicable Site Addendum, which may be tied to issuance of permits, utility approvals, or other prerequisites.
4. RIGHTS GRANTED; USE
4.1 Rights Granted. Subject to the terms of this Agreement, City grants Apolon7 the right, at Apolon7’s sole cost and expense, to: (a) design, install, own, operate, maintain, repair, upgrade, and remove EV charging stations, power cabinets, transformers (if applicable), conduit, metering devices, communication equipment, signage, and related appurtenances (collectively, the “Equipment”) at the City Sites; and (b) use the Premises for the provision of EV charging services to the public and related activities. 587
Agreement Between Apolon7 and the City of Adelanto
PAGE 5
4.2 Charger Types. The Parties anticipate that EV charging stations installed under this Agreement will range from approximately 40 kW to 240 kW in rated output, with the specific charger type and capacity at each City Site to be determined by mutual agreement and documented in the applicable Site Addendum.
4.3 Permitted Use. Apolon7 shall use the Premises solely for the installation, operation, maintenance, repair, and removal of the Equipment, together with reasonably related uses such as placement of directional, instructional, and safety signage, and customer access to the charging stations. Any other use requires City’s prior written consent, not to be unreasonably withheld, conditioned, or delayed.
4.4 No Extraordinary City Risk. The Parties acknowledge that City is a public agency subject to applicable statutory and constitutional limitations. Nothing in this Agreement is intended to require City to indemnify Apolon7 beyond what is permitted by California law, to guarantee Apolon7’s revenues, or to assume responsibility for the design, installation, or operation of the Equipment.
5. APOLON7 RESPONSIBILITIES
5.1 Cost of Equipment and Installation. Apolon7 shall, at its sole cost and expense, design, purchase, install, and commission the Equipment at the City Sites, including any necessary mounting hardware, protective bollards, cabinets, and communications equipment.
5.2 Operation and Maintenance. Apolon7 shall operate and maintain the Equipment in good working order, in a clean, safe, and orderly condition, and in compliance with all applicable laws, codes, and standards. Apolon7 shall respond to equipment outages and maintenance needs within commercially reasonable timeframes.
5.3 Permits and Approvals. Apolon7 shall obtain, at its cost, all permits, licenses, and approvals required for the installation and operation of the Equipment, except to the extent expressly allocated to City in Section 6.
5.4 Removal and Restoration. Upon expiration or earlier termination of this Agreement with respect to a particular City Site, Apolon7 shall, within a reasonable period of time, remove the above-ground portions of the Equipment from such City Site and restore the Premises to a safe condition, reasonable wear and tear and previously existing conditions excepted. The Parties may agree in writing that certain infrastructure (such as underground conduit) shall remain in place for City’s future use.
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Agreement Between Apolon7 and the City of Adelanto
PAGE 6
5.5 Insurance. Apolon7 shall maintain insurance as required in Section 14.
5.6 No City Funding Obligation. City shall not be required to contribute capital funds toward the design, purchase, installation, or maintenance of the Equipment, and nothing in this Agreement requires City to guarantee any level of usage or revenue from the EV charging stations.
5.7 Equipment Upgrades. Any upgrades to the Equipment that Apolon7 elects to implement, or that are required by applicable law, the serving utility, or relevant safety or charging standards, shall be at Apolon7’s sole cost and expense, and City shall have no obligation to fund or reimburse any such upgrades
6. CITY RESPONSIBILITIES; SUPPORT
6.1 Site Selection and Approval. City will work cooperatively with Apolon7 to identify candidate City Sites and will act reasonably and in good faith in reviewing and approving final site locations, subject to applicable City processes and approvals.
6.2 Permitting Support. City will support Apolon7’s efforts to obtain necessary permits and approvals, which may include confirming site control, executing standard forms, and facilitating internal City reviews in a reasonably prompt manner consistent with City’s applicable procedures and legal obligations. Nothing in this Agreement obligates City to approve any permit or application where such approval would be contravene applicable law or City’s regulatory discretion.
6.3 Utility Coordination. Apolon7 will coordinate directly with the local electric utility regarding required upgrades, interconnections, and meters. City will, at Apolon7’s reasonable request, assist with introductions, site access documentation, and other utility coordination steps to the extent consistent with City’s role and legal authority and will use reasonable efforts to provide such assistance in a timely manner, subject to City’s legal and operational constraints.
6.4 Parking Lot and Grounds Maintenance. City shall maintain the general parking areas and common grounds at each City Site in a reasonably safe and functional condition consistent with City’s usual standards for such facilities, including pavement repairs, striping, and lighting, subject to budgetary and operational constraints.
7. UTILITIES AND POWER
7.1 Utility Service. Apolon7 shall arrange for and pay all costs associated with 589
Agreement Between Apolon7 and the City of Adelanto
PAGE 7
electrical service to the Equipment, including but not limited to new service drops, transformers (if required by the utility), meters, and ongoing electricity charges.
7.2 Separate Metering. To the extent reasonably practicable and approved by the serving utility, Apolon7 shall establish separate metering for the Equipment at each City Site. If separate metering is not feasible, the Parties will cooperate to implement a reasonable submetering or cost-allocation methodology.
7.3 Outages. City shall not be liable for utility outages or interruptions except to the extent caused by City’s willful misconduct. In the event of a prolonged outage at a City Site (for example, exceeding ninety (90) consecutive days), the Parties shall meet and confer in good faith to determine whether to continue operations, temporarily suspend the site, or terminate such City Site from this Agreement without penalty.
8. REVENUE SHARING FOR CITY SITES
8.1 City’s Share of Net Revenue. For each City Site, the City shall be entitled to receive a share of Net Revenue derived from that City Site during the term of this Agreement, based on the charger type installed at such City Site, as follows:
(a) for Level 2 chargers, including 11 kW and 22 kW chargers, the Net Revenue shall be shared sixty percent (60%) to Apolon7 and forty percent (40%) to City; and (b) for Level 3 and Level 4 chargers, including 40 kW, 60 kW, 240 kW, and 480 kW chargers, the Net Revenue shall be shared eighty percent (80%) to Apolon7 and twenty percent (20%) to City.
If a City Site contains more than one charger type, the applicable revenue share shall be calculated separately for each charger type, unless otherwise stated in the applicable Site Addendum.
8.2 Calculation and Statements. Within thirty (30) days after the end of each calendar quarter, Apolon7 shall provide City with a written statement showing, for each City Site: (a) Charging Revenue; (b) Advertising Revenue; (c) LCFS Credit Revenue, if any; (d) Allowable Deductions by category; and (e) the resulting Net Revenue and City’s applicable share, determined in accordance with Section 8.1. Apolon7 shall remit payment of City’s share together with such statement.
8.3 Records and Audit. Apolon7 shall maintain accurate books and records reasonably sufficient to show Gross Revenue, Allowable Deductions, and Net Revenue by City Site. City shall have the right, upon at least thirty (30) days’ advance written notice and not more than once in any twelve (12) month period, to review such records during normal business hours, at City’s expense, for the sole purpose of verifying revenue share calculations. If an audit 590
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reveals an underpayment of more than five percent (5%) for the period audited, Apolon7 shall reimburse City’s reasonable audit costs in addition to any underpayment.
8.4 Private Sites. The Parties acknowledge that private property locations will be subject to separate agreements between Apolon7 and the applicable private site hosts. No revenue share is payable to City in connection with such private sites under this Agreement.
9. OWNERSHIP OF EQUIPMENT AND DATA
9.1 Equipment Ownership. Except as otherwise agreed in writing, all Equipment installed by Apolon7 at the City Sites shall remain the personal property of Apolon7 and shall not become fixtures or part of City’s real property.
9.2 Data. As between the Parties, Apolon7 shall own all technical and operational data generated by the Equipment. Upon City’s reasonable request, Apolon7 shall provide City with periodic summary reports (e.g., number of sessions, kWh dispensed, uptime) for public policy and planning purposes, provided that such reports do not disclose personally identifiable information.
10. COMPLIANCE WITH LAWS
Each Party shall comply with all applicable federal, state, and local laws, regulations, codes, and ordinances in performing its obligations under this Agreement. Apolon7 shall be solely responsible for compliance with EV charging-related requirements applicable to the Equipment and its operation, including accessibility requirements.
11. GRANTS AND FUNDING OPPORTUNITIES
11.1 Joint Efforts. The Parties may, but are not obligated to, identify and evaluate state, federal, or other grant programs or incentives that may be available to support EV charging infrastructure in Adelanto.
11.2 Applications. Where mutually agreed, City and Apolon7 may jointly apply for such funding. The Parties will coordinate in good faith on application content, matching requirements, and compliance obligations.
11.3 Allocation of Benefits. To the extent any grant or funding is awarded with respect to City Sites, the Parties will document in writing how such funds will be used and allocated, with the shared goal of maximizing benefit to the City of Livingston and the community, while supporting timely and effective implementation of the project. 591
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12. INSURANCE
12.1 Apolon7 Insurance. Apolon7 shall maintain in effect throughout the term of this Agreement: (a) commercial general liability insurance with limits of not less than $1,000,000 per occurrence and $3,000,000 aggregate, naming City, its officers, employees, and agents as additional insureds; (b) workers’ compensation insurance as required by California law; and (c) property insurance on the Equipment, at Apolon7’s option.
12.2 City Insurance. City shall maintain its customary liability and property insurance or self-insurance programs applicable to its facilities, in its sole discretion and in accordance with applicable law.
12.3 Certificates. Upon request, each Party shall provide the other with evidence of the required coverage.
13. INDEMNIFICATION
13.1 Apolon7 Indemnity. To the fullest extent permitted by law, Apolon7 shall indemnify, defend, and hold harmless City and its officers, employees, and agents from and against claims, damages, losses, and expenses (including reasonable attorneys’ fees) arising out of:
(a) Apolon7’s installation, operation, maintenance, or removal of the Equipment at the City Sites; (b) Apolon7’s use of the Premises; or (c) Apolon7’s breach of this Agreement; except to the extent caused by the active negligence or willful misconduct of City or any of its officers, employees, or agents.
13.2 Limitation. Nothing in this Agreement shall be construed to require Apolon7 to indemnify City for City’s sole negligence or willful misconduct, or to expand any indemnity beyond what is permitted under applicable California law.
13.3 City Indemnity. To the extent permitted by law, City shall indemnify and hold harmless Apolon7 from claims arising directly from City’s willful misconduct in connection with this Agreement.
14. DEFAULT AND TERMINATION
14.1 Default by Apolon7. City may terminate this Agreement with respect to one or more City Sites if Apolon7 materially breaches its obligations and fails to cure such breach within sixty (60) days after written notice, or such longer period as may be reasonably required if Apolon7 has commenced and is diligently pursuing cure.
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14.2 Default by City. Apolon7 may terminate this Agreement with respect to one or more City Sites if City materially breaches its obligations and fails to cure such breach within sixty (60) days after written notice, subject to applicable legal and budgetary constraints.
14.3 Prolonged Outage or Regulatory Change. If a City Site becomes impracticable to operate as an EV charging site due to prolonged utility outage, a change in law, or other circumstances beyond the reasonable control of both Parties, either Party may request that the Parties meet and confer. If no mutually acceptable solution is reached within ninety (90) days, either Party may terminate this Agreement with respect to that City Site upon written notice, without penalty.
14.4 Effect of Termination. Upon termination of this Agreement with respect to a City Site, Apolon7 shall remove its Equipment and restore the Premises as provided in Section 5.4, and each Party shall pay any amounts then accrued and owing to the other.
15. ASSIGNMENT
Apolon7 may not assign this Agreement, in whole or in part, without City’s prior written consent, which shall not be unreasonably withheld, conditioned, or delayed; provided that Apolon7 may assign this Agreement without City’s consent to an affiliate or to a successor by merger or sale of substantially all of Apolon7’s assets related to EV charging operations, upon written notice to City and assumption of this Agreement by the assignee. Any assignment by City shall be in accordance with applicable law.
16. PUBLIC RECORDS; CONFIDENTIALITY
16.1 Public Records. The Parties acknowledge that City is subject to the California Public Records Act (“CPRA”) and similar laws. City shall not be in breach of any confidentiality obligation by disclosing records as required by law, after providing Apolon7 with reasonable notice and an opportunity to assert applicable exemptions where feasible.
16.2 Limited Confidentiality. To the extent Apolon7 designates certain financial or technical information as confidential and City is not otherwise required to disclose it by law, City will use reasonable efforts to treat such information as confidential.
17. MISCELLANEOUS
17.1 Governing Law; Venue. This Agreement shall be governed by and construed in 593
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accordance with the laws of the State of California. Any legal action arising out of or relating to this Agreement shall be brought in the Superior Court of California, County of Merced, or in the federal courts located in the Eastern District of California, to the extent such courts have jurisdiction.
17.2 Independent Contractors. The Parties are independent contractors, and nothing in this Agreement shall be construed to create a partnership, joint venture, or agency relationship.
17.3 Entire Agreement; Amendments. This Agreement, together with Exhibit A and any Site Addenda, constitutes the entire agreement between the Parties regarding the subject matter hereof and supersedes all prior negotiations and understandings. Any amendment or modification must be in writing and signed by duly authorized representatives of both Parties.
17.4 No Third-Party Beneficiaries. This Agreement is for the benefit of the Parties and their permitted successors and assigns, and is not intended to confer rights on any third party.
17.5 Notices. All notices under this Agreement shall be in writing and delivered personally, by certified mail, or by nationally recognized overnight courier to the addresses set forth below, or to such other address as a Party may designate by notice.
For City:
City of Adelanto
[Address]
Attention: [Title]
For Apolon7:
Apolon7, Inc.
225 E. Broadway, Suite 107C
Glendale, CA 91206
Attention: Harutyun Nikoyan
17.6 Counterparts; Electronic Signatures. This Agreement may be executed in counterparts, each of which shall be deemed an original. Electronic and facsimile signatures shall be deemed original for all purposes.
17.7 Authority. Each person signing this Agreement represents and warrants that they have authority to bind the Party on whose behalf they are signing. 594
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IN WITNESS WHEREOF, the Parties have executed this Agreement as of the Effective Date.
CITY OF ADELANTO,
a California municipal corporation
By: _________________________________
Name: ______________________________
Title: ________________________________
Date: ________________________________
APOLON7, INC.,
a California corporation
By: _________________________________
Name: Harutyun Nikoyan
Title: CEO
Date: July 17, 2026
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EXHIBIT A
City Sites and Parking Spaces
[NOTE: To be completed by the Parties and updated from time to time by adding Site Addenda for each location. For each City Site, the Parties will specify the following: site name, address, number and location of parking spaces dedicated to EV charging, and any site-specific conditions or requirements.]
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