Agenda packet — Apple Valley City Council, May 24, 2022 (part 1 of 3)

APPLE VALLEY TOWN COUNCIL
AGENDA

Tuesday, May 24, 2022, 6:30 p.m.

Council Chamber

PLEASE SILENCE CELL PHONES UPON ENTERING THE CHAMBER

FOR INDIVIDUALS NOT PHYSICALLY PRESENT AND STILL WISHING TO MAKE PUBLIC COMMENTS, YOU MAY COMMENT IN ONE OF TWO WAYS: 1) COMMENTS AND CONTACT INFORMATION CAN BE EMAILED TO [email protected], TO BE INCLUDED IN THE RECORD; 2) A REQUEST TO SPEAK CAN BE EMAILED TO THE SAME

ADDRESS AS ABOVE AND AT THE TIME OF THE REQUESTED AGENDA ITEM, THE TOWN

CLERK WILL PLACE A PHONE CALL TO THE COMMENTER AND ALLOW THEM TO SPEAK TO

THE COUNCIL VIA SPEAKER PHONE DURING THE LIVE MEETING FOR UP TO THREE MINUTES.

The meeting will occur in the Council Chamber located at 14955 Dale Evans Parkway in Apple Valley, California.

This is an agenda for the scheduled meeting of the Town of Apple Valley.

This agenda contains a brief description of each item of business to be considered at today’s meeting. In accordance with the Brown Act, this meeting agenda is posted at least 72 hours prior to the regularly scheduled meeting. The agenda, its supporting documents and all writings received by the Town Council related to these items are public records and available for review during regular business hours in the Town Clerk’s office in the Town Council Chamber. The agenda and its supporting documents, along with live and archived video of the meeting, can be viewed online at http://www.applevalley.org. However, the online agenda may not include all available supporting documents or the most current version of documents.

Materials related to an item on this agenda submitted to the Council after distribution of the agenda packet are available for public inspection in the Town Clerk’s Office at 14955 Dale Evans Parkway, Apple Valley, CA during normal business hours. Such documents are also available on the Town of Apple Valley website at www.applevalley.org subject to staff’s ability to post the documents before the meeting.

Items listed on the Consent Calendar are expected to be routine and non-controversial and, unless the Town Council directs that an item be held for further discussion, the entire Consent Calendar will be acted upon as the first item of business. If the Town Council directs that an item listed on the Consent Calendar be held for further discussion, the item will be addressed immediately after approval of the Consent Calendar.

In accordance with the Rules of Procedure, members of the public may address the Town Council on any item on the agenda and on any matter that is within the Town Council’s jurisdiction. To address the Town Council regarding an item, complete and submit the yellow card entitled Request to Speak.

Please indicate on the card whether you are speaking under Public Comments or on an item that is listed on the agenda and please list the item number.

When called, approach the podium and if desired, please state your name before giving your presentation. Speakers may address the Town Council for up to three (3) minutes. Speakers are to address the Town Council as a whole through the Presiding Officer. Comments to individual Council Members and/or staff are not permitted.

Individuals, who demonstrate disruptive conduct during Town Council meetings that prevent the Town Council from conducting its meeting in an orderly manner, are guilty of a misdemeanor as stated in PC403, disrupting a public meeting and are subject to removal from the chamber or arrest.

The Town of Apple Valley recognizes its obligation to provide equal access to those individuals with disabilities. Please contact the Town Clerk’s Office at (760) 240-7000 two working days prior to the scheduled meeting for any requests for reasonable accommodations.

Pages

1. Call to Order

2. Opening Ceremonies

2.1. Invocation
Bishop Kevin Wheeler - The Church of Jesus Christ of Latter-Day Saints

2.2. Pledge of Allegiance

2.3. Presentations

2.3.1. Employee of the Quarter - Chris Johnson, Innovation and Technology Coordinator

3. Public Comments

4. Councilmember Committee/Commission/Community Participation 6 Councilmembers to make brief reports on their participation on committees, boards, and commissions on the Town’s behalf since the last meeting.

Councilmembers may also make brief reports on their community participation.

No formal action will be taken.

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5. Town Council Announcements

5.1. Suggested items for next Agenda

5.2. Time, Date & Place for Next Town Council Regular or Special Meeting A. Regular Meeting - June 14, 2022 - Council Chambers Regular Session at 6:30 p.m.

6. Town Council Consent Agenda
Recommended Motion:

To approve the Consent Calendar items numbered 6.1-6.13 as recommended.

6.1. APPROVAL OF MINUTES 8
That the Town Council approve the subject minutes as part of the consent agenda.

6.2. QUARTERLY TREASURER'S REPORT – JULY – SEPTEMBER 2021 16 That Town Council receive and file the July-September 2021 Quarterly Treasurer’s Report.

6.3. QUARTERLY TREASURER'S REPORT - OCTOBER - DECEMBER
2021
27 That Town Council receive and file the October-December 2020 Quarterly Treasurer’s Report.

6.4. BEAR VALLEY ROAD BRIDGE OVER MOJAVE RIVER
REHABILITATION & WIDENING PROJECT: FUNDING AGREEMENT
NO. 22-1002754
37 That the Town Council approve Project Funding Agreement No. 22- 1002754 with San Bernardino County Transportation Authority for Phase 1 of the Bear Valley Road Bridge over Mojave River Rehabilitation and Widening Project, subject to approval as to form by the Town Attorney and as to content by the Town Manager.

6.5. BEAR VALLEY ROAD BRIDGE OVER MOJAVE RIVER
REHABILITATION & WIDENING PROJECT: FORMAL CONTRACT
AMENDMENT NO. 2 BAT MITIGATION AND MULTI-AGENCY

COORDINATION
49 Approve Formal Contract Amendment No. 2 to the March 11, 2014 Agreement between the Town of Apple Valley and Dokken Engineering for engineering and design services for the Bear Valley Road Bridge over the Mojave River Rehabilitation and Widening Project for an amount notto-exceed $178,791 and a time extension to December 31, 2023.

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6.6. BEAR VALLEY ROAD BRIDGE OVER MOJAVE RIVER
REHABILITATION & WIDENING PROJECT: UTILITY AGREEMENTS
NOS. 2030.011, 2030.01 AND 2030.013
69 That the Town Council approve Utility Agreements Nos. 2030.011, 2030.012 and 2030.013 with Southern Californa Edison for the Bear Valley Road Bridge over Mojave River Rehabilitation and Widening Project, subject to approval as to form by the Town Attorney and as to content by the Town Manager.

6.7. APPROVE AMENDMENT FOR CONSTRUCTION SUPPORT

SERVICES FOR THE JESS RANCH LIFT STATION PROJECT
84 Approve an Amendment to the Professional Services Agreement with Lee + Ro for additional construction support services for the Jess Ranch Lift Station Upgrade project, subject to “Approval as to Form” by the Town Attorney and “Approval as to Content” by the Town Manager.

6.8. APPROVE CALIFORNIA CHOICE ENERGY AUTHORITY ENTERING

INTO A LONG-TERM RESOURCE ADAQUACY AGREEMENT WITH
SANTA PAULA ENERGY STORAGE, LLC. ON BEHALF OF APPLE

VALLEY CHOICE ENERGY
89 Approve California Choice Energy Authority Entering into a Long-Term Resource Adequacy Agreement with Santa Paula Energy Storage, LLC on behalf of Apple Valley Choice Energy.

6.9. HOUSEHOLD HAZARDOUS WASTE COLLECTION AGREEMENT 173 That the Town Council approve the Household Hazardous Waste (HHW) Agreement between the Town of Apple Valley and the San Bernardino County Fire Protection District (SBCFPD).

6.10. RESOLUTION DESIGNATING JUNE 19 AS JUNETEENTH

INDEPENDENCE DAY IN THE TOWN OF APPLE VALLEY
182
Adopt Resolution 2022-15 designating June 19, as Juneteenth Independence Day in the Town of Apple Valley.

6.11. RESOLUTION OF INTENT TO RENEW AND MODIFY BOUNDARY OF

THE APPLE VALLEY VILLAGE PROPERTY AND BUSINESS

IMPROVEMENT DISTRICT (PBID)
186
That the Town Council adopt a Resolution of Intention to renew and modify the boundaries of the Apple Valley Village Property and Business Improvement District (Village PBID) and to levy and collect assessments therein.

6.12. STATE ROUTE 18 CORRIDOR ENHANCEMENT PLAN PHASE II 253 Adopt Resolution 2022-17 authorizing the Town Manager to execute agreements with the California Department of Transportation for the Apple Valley State Route 18 Corridor Enhancement Plan Phase II.

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6.13. A RESOLUTION OF THE TOWN COUNCIL OF THE TOWN OF APPLE

VALLEY AMENDING THE CLASSIFICATION AND SALARY PLAN FOR

THE TOWN OF APPLE VALLEY
259
Approve Resolution No. 2022-18, A Resolution of the Town Council of the Town of Apple Valley, California, amending the current Classification and Salary Plan.

7. Public Hearings

7.1. 2022-2026 CONSOLIDATED PLAN, 2022-2023 ANNUAL ACTION

PLAN, ANALYSIS OF IMPEDIMENTS TO FAIR HOUSING CHOICE,

AND CITIZEN PARTICIPATION PLAN
318
It is recommended the Town Council approve the 2022-2026 Consolidated Plan, Analysis of Impediments to Fair Housing Choice, the Community Development Citizen Advisory Committee (“CDCAC”) funding recommendations for the 2022-23 First-Year Annual Action Plan, and the Citizen Participation Plan, and authorize the Town Manager to execute all necessary HUD documents on behalf of the Town.

8. Business of the Council

8.1. INTRODUCE ORDINANCE NO. 555 – AN ORDINANCE OF THE TOWN

COUNCIL OF THE TOWN OF APPLE VALLEY AMENDING CHAPTER

3.08 (INVESTMENT OF MONEYS AND FUNDS) OF TITLE 3 OF THE

TOWN OF APPLE VALLEY MUNICIPAL CODE RELATING TO THE

OFFICE OF REVENUE AND FINANCE
322
AND EXCEPTIONS OF CHAPTER 3.08
Move to WAIVE reading of Ordinance 555 in its entirety and read by title
A.

Move to INTRODUCE Ordinance No. 555 amending Chapter

3.08 (Investment of Moneys and Funds) of Title 3 of The Town of Apple Valley Municipal Code by Amending Sections 3.08.050 Relating to the Office of Revenue and Finance and Exceptions of Chapter 08.

9. Reports, Requests and Communications

10. Town Manager’s Comments & Legislative Update

11. Closed Session

12. Adjournment
Recommended Motion:

To adjourn the meeting of the Apple Valley Town Council at TIME.

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TOWN OF APPLE VALLEY

TOWN COUNCIL SERVING ON BOARDS, COMMITTEES & COMMISSIONS

CITIZEN ADVISORY COMMITTEES

HISTORICAL ADVISORY COMMITTEE (HAC)
Council Member Cusack
Meets every 2nd Tuesday of each month at 9:00 a.m.,
(location may vary)

SPECIAL ADVISORY COMMITTEES
DISASTER PREPAREDNESS*
Mayor - Chairman
Meets quarterly at 1:30 p.m., Town of Apple Valley
Conference Center - Development Services Building
14975 Dale Evans Parkway, Apple Valley.

TRAFFIC ADVISORY COMMITTEE (TAC)
Council Member Nassif
As needed.

Town Council Chambers

TOWN PERSONNEL COMMITTEE
Council Member Nassif
Mayor Pro Tem Bishop
Meets as Needed

PARK AND RECREATION ADVISORY COMMITTEE
Council Member Nassif
Council Member Emick

AD HOC COMMITTEES

APPLE VALLEY ROAD AD HOC COMMITTEE
Council Member Nassif

VILLAGE MERCHANTS AD HOC COMMITTEE
Council Member Emick

AGENCY - BOARDS/COMMITTEES &

COMMISSIONS

CALIFORNIA JOINT POWERS INSURANCE

AUTHORITY (CJPIA)
Council Member Nassif – Director
Exec. Committee meets every 4th Wednesday of each
month at 7:00 p.m., La Palma, CA.

HIGH DESERT CORRIDOR JOINT POWERS

AUTHORITY (HDCJPA)
Council Member Nassif – Director
Council Member Emick – Alternate
Meets every 2nd Thursday of each quarter at 2:00 p.m.
385 N. Arrowhead Ave, San Bernardino, CA

LEAGUE OF CALIFORNIA CITIES/DESERT

MOUNTAIN DIVISION (LOCC/DMD)
Council Member Nassif- Voting Delegate
Mayor Pro Tem Bishop – Alternate
Meets quarterly on the 4th Friday of every other month
at 10:00 a.m., rotating cities.

MOJAVE DESERT AIR QUALITY MANAGEMENT

DISTRICT (MDAQMD)
Mayor Leon-– Delegate
Council Member Emick – Alternate
Meets every 4th Monday of each month at 10:00 a.m.,
14306 Park Avenue, Victorville

MOJAVE DESERT AND MOUNTAIN RECYCLING

AUTHORITY
Council Member Cusack – Delegate
Mayor Pro Tem Bishop – Alternate
Meets quarterly on the 2nd Thursday February, May,
August and November at 10:00 a.m.
at the Materials Recovery Facility, 17000 Abbey Lane,
Victorville

SAN BERNARDINO COUNCIL OF GOVERNMENTS
(SBCOG)
Mayor Pro Tem Bishop - Board Member
Council Member Cusack – Alternate
Meets 1st Wednesday of each month at 10:00 a.m.,
1170 West 3rd St.

San Bernardino

SOLID WASTE ADVISORY TASK FORCE (SWAT)
Council Member Cusack – Committee Member
Julie Ryan - Alternate
Meets as needed on Wednesdays at 1:30 p.m.

Sam J. Racadio Library & Environmental Learning
Center Community Room 7863 Central Ave. Highland

VICTOR VALLEY ECONOMIC DEVELOPMENT

AUTHORITY (VVEDA)
(George Air Force Base Reuse Task Force)
Council Member Emick – Commissioner
Mayor Pro Tem Bishop – Alternate
Meets every 2nd Wednesday of each quarter at 5:00
p.m., SCLA

VICTOR VALLEY TRANSIT AUTHORITY (VVTA)
Council Member Emick – Representative
Mayor Leon - Alternate
Meets every 3rd Monday of each month at 9:30 a.m.,
Victorville City Hall

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VICTOR VALLEY WASTE WATER RECLAMATION

AUTHORITY (VVWRA)
Council Member Nassif – Commissioner
Mayor Pro Tem Bishop – Alternate
Meets every 3rd Thursday at 7:30 a.m.

VVWRA Offices

APPLE VALLEY CHAMBER OF

COMMERCE

GOVERNMENTAL RELATIONS COMMITTEE
Mayor Pro Tem Bishop – Representative
Council Member Cusack – Alternate
*These Boards, Committees and
Commissions require the Mayor to serve
as the representative.

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Town Council Agenda Report
Date: May 24, 2022
To: Honorable Mayor and Town Council
Subject: APPROVAL OF MINUTES

From: Douglas Robertson, Town Manager
Submitted by: La Vonda M-Pearson, Town Clerk
Town Clerk
Budgeted Item: Yes No N/A

RECOMMENDED ACTION
That the Town Council approve the subject minutes as part of the consent agenda.

SUMMARY:

A. Regular Meeting May 10, 2022

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1 Apple Valley Town Council

MINUTES
May 10, 2022, 6:30 p.m.

Council Chamber
Members Present: Council Member Curt Emick
Council Member Scott Nassif
Council Member Larry Cusack
Mayor Pro Tem Art Bishop
Mayor Kari Leon
_____________________________________________________________________

1. Call to Order
Mayor Leon called to order the regular session of the Apple Valley Town Council at 6:30 p.m.

2. Opening Ceremonies

2.1 Invocation
Pastor Green - Way of the Cross.

2.2 Pledge of Allegiance
The Pledge of Allegiance was led by Council Member NAME.

2.3 Presentations

3. Public Comments

4. Councilmember Committee/Commission/Community Participation Councilmembers to make brief reports on their participation on committees, boards, and commissions on the Town’s behalf since the last meeting.

Councilmembers may also make brief reports on their community participation.

No formal action will be taken.

Council Member Emick commented on committee meetings and events that he attended.

Council Member Cusack commented on committee meetings and events that he attended.

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2 Council Member Nassif commented on committee meetings and events that he attended.

Mayor Pro Tem Bishop commented on committee meetings and events that he attended.

Mayor Leon commented on committee meetings and events that she attended.

5. Town Council Announcements

5.1 Suggested items for next Agenda
Council Member Scott Nassif, asked staff to create a resolution to commemorate Juneteenth.

5.2 Time, Date & Place for Next Town Council Regular or Special Meeting A. Regular Meeting - May 24, 2022 - Council Chambers Regular Session at 6:30 p.m.

6. Town Council Consent Agenda
Kiel Mangerino, Deputy Town Clerk, read the disclosure statement for specific warrants listed on the agenda.

Council Member Cusack has a remote interest in specific warrants on tonight’s Commercial Warrants dealing with Apple Valley Communications, AV Tech Services or AVCOM Services for the Town of Apple Valley as the owner of these businesses. Therefore, he will be recusing from voting on the warrants for Apple Valley Communications, AV Tech Services and AVCOM Services listed under Agenda Item Number 6.2. In addition, due to his interest in these businesses, Council Member Cusack will be recusing from voting on specific warrants listed under Agenda Item Number 6.2 because these entities are considered sources of income to his businesses. A list of business entities for Council Member Cusack is maintained on file in the Town Clerk’s Office and available for review at the dais.

Council Member Cusack confirmed that he would be recusing from voting on these warrants.

Council Member Nassif has a remote interest in specific warrants on tonight’s Commercial Warrants dealing with NAPA Auto Parts or High Desert Auto Supply for the Town of Apple Valley as the owner of these businesses. Therefore, he will be recusing from voting on the warrants for NAPA Auto Parts and High Desert Auto Supply listed under Agenda Item Number 6.2. In addition, due to his interest in both businesses, Council Member Nassif will also be recusing from voting on specific warrants listed under Agenda Item Number 6.2 because these entities

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3 are considered sources of income to his businesses. A list of business entities for Council Member Nassif is maintained on file in the Town Clerk’s Office and available for review at the dais.

Council Member Nassif confirmed that he would be recusing from voting on these warrants.

Mayor Leon has a remote interest in specific warrants on tonight’s Commercial Warrants dealing with Solution Strategies and Christian Brothers as a landlord to these entities. Therefore, she will be recusing herself from voting on the warrants for these businesses.

Motion by: Council Member Emick
Seconded by: Mayor Pro Tem Bishop
To approve the Consent Calendar items numbered 6.1 - 6.10 as recommended.

Yes (5): Council Member Emick, Council Member Nassif, Council Member Cusack, Mayor Pro Tem Bishop, and Mayor Leon
Carried (5 to 0)

6.1 APPROVAL OF MINUTES
That the Town Council approve the subject minutes as part of the consent agenda.

6.2 APRIL 2022 COMMERCIAL WARRANTS AND WIRE TRANSFER

SCHEDULES
That the Town Council receive, ratify, and file the Commercial Warrants and Wire Transfer Schedules as presented.

6.3 APRIL 2022 PAYROLL/BENEFITS WARRANTS SCHEDULE
That the Town Council receive, ratify and file the payroll/benefits warrants as presented.

6.4 ADOPT FISCAL YEAR 2022-2023 SB1 ROAD MANTENANCE AND

REHABILITATION ACCOUNT (RMRA) PROJECT LIST RESOLUTION
Adopt Resolution 2022-13 Identifying the project(s) to be funded by SB1 RMRA funding.

6.5 ACCEPTANCE OF WORK: TOWN WIDE SCHOOL ZONE TRAFFIC

CONTROL UPDATE PROJECT

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4 A. Accept the work completed as part of the Town Wide School Zone Traffic Control Update project for a total contract cost of $79,780.00 B. Direct the Town Clerk to file the Notice of Completion for the contract work.

C. Direct the Finance Director to release the retained funds 30 days after the Notice of Completion has been filed, provided no claims are filed against the contractor.

6.6 APPROVAL OF POWER CHARGE INDIFFERENCE ADJUSTMENT

VOLUNTARY ALLOCATION OF LONG-TERM RENEWABLE ENERGY

PORTFOLIO FROM SOUTHERN CALIFORNIA EDISON AND

AUTHORIZATION TO EXECUTE THE VOLUNTARY ALLOCATION

AGREEMENT ON BEHALF OF APPLE VALLEY CHOICE ENERGY
Approve the Power Charge Indifference Adjustment (PCIA) Voluntary Allocation of Long-Term Renewable Energy Portfolio from Southern California Edison (SCE) and Authorize the Town Manager to Execute the Voluntary Allocation Agreement on behalf of Apple Valley Choice Energy (AVCE).

6.7 ACCEPTANCE OF WORK: BEAR VALLEY ROAD WIDENING FROM

CENTRAL ROAD TO QUINNAULT ROAD
A. Accept the work completed as part of the Bear Valley Road Widening from Central Road to Quinnault Road project for a total contract cost of $461,231.39.

B. Direct the Town Clerk to file the Notice of Completion for the contract work.

C. Direct the Finance Director to release the retained funds 30 days after the Notice of Completion has been filed, provided no claims are filed against the contractor.

6.8 AGREEMENT WITH TYLER TECHNOLOGIES, INC. FOR THE

UPGRADE TO ENTERPRISE ERP (MUNIS) AND BUSINESS PROCESS

AND IMPLEMENTATION SERVICES WITH SOFTWARE AND

SUPPORT SERVICES
That Council ratify the upgrade purchase of Enterprise ERP (Enterprise Resource Planning – Munis), including business process and implementation services from Tyler Technologies, Inc. (Tyler), in the amount of $945,553.00 with additional annual costs for on-going software

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5 services starting at $231,747.00, and authorize the Town Manager or designee to execute appropriate agreements and documentation.

6.9 THIRTY-THIRD AMENDMENT TO LAW ENFORCEMENT CONTRACT
#94-798
Staff recommends that the Town Council approve the Thirty-Third Amendment to Law Enforcement Contract #94-798 for the period of July 1, 2022 through June 30, 2023 and authorize the Mayor or designee to process all documents required for the agreement.

6.10 ACCEPT GRANT REVENUE FROM THE EDWARD BYRNE MEMORIAL

JUSTICE ASSISTANCE GRANT PROGRAM
Accept grant revenue from the Edward Byrne Memorial Justice Assistance Grant Program in the amount of $34,706 for years 2020 and 2021 and authorize the Town Manager to execute award Agreements.

7. Public Hearings

7.1 A RESOLUTION OF THE TOWN COUNCIL OF THE TOWN OF APPLE

VALLEY, CALIFORNIA, AMENDING AND ESTABLISHING SPECIFIED

FEES FOR TOWN SERVICES
Adopt Resolution No. 2022-14 a Resolution of the Town Council of the Town of Apple Valley, California, amending and establishing specified fees for Town services for Fiscal Year 2022-2023.

Mayor Leon opened the public hearing at 7:04 p.m.

Adam Cripps, Finance Analyst, presented the staff report as presented to the Town Clerks Office.

Discussion ensued surrounding the increase of the current municipal fees.

Mayor Leon closed the public hearing at 7:15 p.m.

Motion by: Council Member Cusack
Seconded by: Mayor Pro Tem Bishop
Adopt Resolution 2022-14 a Resolution of the Town Council of the Town of Apple Valley, California, amending and establishing specified fees for Town Services for Fiscal Year 2022-2023
Yes (5): Council Member Emick, Council Member Nassif, Council Member Cusack, Mayor Pro Tem Bishop, and Mayor Leon

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6 Carried (5 to 0)

8. Business of the Council

8.1 vacancy on the PLANNING COMMISSION
Council Member Bishop to nominate: ____________ to the Town of Apple Valley Planning Commission.

Council Member Bishop presented the staff report as filed with the Town Clerk
Motion by: Mayor Pro Tem Bishop
Seconded by: Council Member Nassif
To nominate David North to the Town of Apple Valley Planning Commission.

Yes (5): Council Member Emick, Council Member Nassif, Council Member Cusack, Mayor Pro Tem Bishop, and Mayor Leon
Carried (5 to 0)

9. Reports, Requests and Communications

10. Town Manager’s Comments & Legislative Update
Doug Robertson, Town Manager, informed the Town Council about upcoming events in the Town of Apple Valley.

11. Closed Session
NONE

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7 12. Adjournment
Motion by: Mayor Leon
Seconded by: Council Member Nassif
To adjourn the meeting of the Apple Valley Town Council at 7:30 p.m.

Carried Unanimously
Kari Leon, Mayor Kiel Mangerino, Deputy Town
Clerk

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Town Council Agenda Report
Date: May 24, 2022
To: Honorable Mayor and Town Council
Subject: QUARTERLY TREASURER’S REPORT – JULY – SEPTEMBER 2021

From: Douglas Robertson, Town Manager
Submitted by: Sydnie Harris, Director of Finance
Finance
Budgeted Item: Yes No N/A

RECOMMENDED ACTION
That Town Council receive and file the July-September 2021 Quarterly Treasurer’s Report.

SUMMARY
The July-September 2021 Treasurer’s Report is attached for Town Council review. The attached investment portfolio for the fiscal year-to-date period ended September 30, 2021 is presented to Town Council for Council’s review. The portfolio is in compliance with the investment policy and there is adequate liquidity in the portfolio to meet the next six months of expenditures.

BACKGROUND
Under provisions of Section 53646 of the California Government Code, the Treasurer or his/her designee shall render a quarterly investment report to the Town Council, the Town Manager, and the Town Attorney within 30 days following the end of the quarter covered by the report.

Attached is the Treasurer’s Report for the period ended September 30, 2021. This investment performance report lists the various types of securities, institutions the securities were purchased from, maturity dates and interest rates for all securities held in the Town’s investment portfolio as of the end of the reporting period. All of the Town’s investments as of September 30, 2021, are in compliance with the Investment Policy adopted by Council on June 23, 2021 and the California Government Code except as may otherwise be noted or disclosed herein. All market values provided in this report were obtained from the various financial institutions associated with the various accounts.

Market values for LAIF were provided by the State Treasurer’s Office. The market value

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shown for the Town’s LAIF investment represents the Town’s contractual rights to its LAIF account and does not represent the value of the underlying portfolio securities. As of September 30, 2021, the Town has adequate cash reserves necessary to meet its obligations for the next six months.

The State of California Government Code requires that the investment policy be adopted at least once annually by the governing body to ensure its continued compliance with current laws and investment practices. The Town’s adopted investment policy conforms to the State Government Code in all respects.

COMPLIANCE REPORTING
The Town’s investment portfolio is in compliance with the Town’s adopted investment policy and applicable State laws during, and as of the end of, the reporting period.

Also, attached for informational purposes, is the preliminary Schedule of Revenues, Expenditures and Changes in Fund Balance for the Apple Valley Golf Course Fund for the period ending September 2021.

FISCAL IMPACT
The Town’s investment portfolio has adequate liquidity to meet the budgeted and actual expenditures of the Town for the next six months.

ATTACHMENTS
A. Treasurer’s Report
B. Apple Valley Golf Course Fund Schedule
C. Line of Credit Statement

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Town Council Agenda Report
Date: May 24, 2022
To: Honorable Mayor and Town Council
Subject: QUARTERLY TREASURER’S REPORT – OCTOBER – DECEMBER 2021

From: Douglas Robertson, Town Manager
Submitted by: Sydnie Harris, Director of Finance
Finance
Budgeted Item: Yes No N/A

RECOMMENDED ACTION
That Town Council receive and file the October-December 2020 Quarterly Treasurer’s Report.

SUMMARY
The October – December 2021 Treasurer’s Report is attached for Town Council review.

The attached investment portfolio for the fiscal year-to-date period ended December 31, 2021 is presented to Town Council for Council’s review. The portfolio is in compliance with the investment policy and there is adequate liquidity in the portfolio to meet the next six months of expenditures.

Attached is the Treasurer’s Report for the period ended December 31, 2021. This investment performance report lists the various types of securities, institutions the securities were purchased from, maturity dates and interest rates for all securities held in the Town’s investment portfolio as of the end of the reporting period. All of the Town’s investments as of December 31, 2021, are in compliance with the Investment Policy adopted by Council on June 23, 2021 and the California Government Code except as may otherwise be noted or disclosed herein. All market values provided in this report were obtained from the various financial institutions associated with the various accounts.

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Market values for LAIF were provided by the State Treasurer’s Office. The market value shown for the Town’s LAIF investment represents the Town’s contractual rights to its LAIF account and does not represent the value of the underlying portfolio securities. As of December 31, 2021, the Town has adequate cash reserves necessary to meet its obligations for the next six months.

COMPLIANCE REPORTING
The Town’s investment portfolio is in compliance with the Town’s adopted investment policy and applicable State laws during, and as of the end of, the reporting period.

Also, attached for informational purposes, is the preliminary Schedule of Revenues, Expenditures and Changes in Fund Balance for the Apple Valley Golf Course Fund for the period ending December 2021.

FISCAL IMPACT
The Town’s investment portfolio has adequate liquidity to meet the budgeted and actual expenditures of the Town for the next six months.

ATTACHMENTS
A. Treasurer’s Report
B. Apple Valley Golf Course Fund Schedule

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Town Council Agenda Report
Date: May 24, 2022
To: Honorable Mayor and Town Council
Subject: BEAR VALLEY ROAD BRIDGE OVER MOJAVE RIVER
REHABILITATION & WIDENING PROJECT: FUNDING AGREEMENT
NO. 22-1002754
From: Douglas Robertson, Town Manager
Submitted by: Brad Miller, Town Engineer
Engineering
Budgeted Item: Yes No N/A

RECOMMENDED ACTION
That the Town Council approve Project Funding Agreement No. 22-1002754 with San Bernardino County Transportation Authority for Phase 1 of the Bear Valley Road Bridge over Mojave River Rehabilitation and Widening Project, subject to approval as to form by the Town Attorney and as to content by the Town Manager.

BACKGROUND
The The Bear Valley Road Bridge Over Mojave River Project is one of the projects identified in The Measure I 2010-2040 Expenditure Plan by the Victor Valley Subarea transportation planning partners as eligible for partial funding from Measure I 2020-2040.

Additionally, the project is eligible for funding through the Highway Bridge Program (HBP) for up to 88.53% of participating costs.

San Bernardino County Transportation Authority (SBCTA) prepared the Nexus Study, dated November 2, 2011, updated every two years in accordance with the Measure I 2010-2040 Expenditure Plan, that identified for projects located in Town the SBCTA Public Share as 45% and the Town Developer Share as 55% of costs necessary to complete the project, and not covered by HBP.

The project has been split into Phase 1 (grading and water line relocation) that will allow for the SCE relocation and Phase 2 (bridge and roadwork). Phase 1 construction is expected to start in December of 2022 and based on the engineer’s cost estimate, staff has developed a cost split as follows:
 HBP’s share: $ 987,000
 SB County Flood Control’s share: $ 16,000
 SBCTA’s share: $ 50,400

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 Town’s share $ 61,600
 Total: $1,115,000
Another funding agreement will be prepared and entered into for Phase 2 once Phase 1 and SCE relocation are completed and the project is ready to move into Phase 2.

ANALYSIS
The development of the Bear Valley Road Bridge over Mojave River Rehabilitation and Widening project has been in process since 2014 and, at this time, Phase 1 final design, encroachment permits and the necessary Right-of-Way acquisition are nearing completion. Phase 1 construction is scheduled to begin in December of 2022 and the estimated total construction cost is $1,115,000.00. In preparation for the commencement of this phase, a Funding Agreement has been prepared between the Town of Apple Valley and the San Bernardino County Transportation Authority (SBCTA) to formalize the construction funding commitments between the two agencies. The Funding Agreement includes a pledge of 45% ($50,400.00) funding from SBCTA using Measure I Major Local Highway Program. The Town’s pledge for the 55% ($61,600.00) local match share will come from a combination of Local Measure I and Traffic Impact Fees.

FISCAL IMPACT
The total estimated amount for the project’s Phase 1 construction and construction management is $1,115,000.00. HBP’s share is $987,000.00 (88.53% of the eligible expenses). San Bernardino County Flood Control’s share is $16,000. The remaining amount will be funded by SBCTA in the amount of $50,400.00, through Project Funding Agreement No. 22-1002754, and by the Town in a combination of TIF and Local Measure I totaling $61,600.00. These amounts are reflected in the budget for FY 22/23.

ATTACHMENTS
A. Vicinity map
B. Project Funding Agreement No. 22-1002754 with San Bernardino County Transportation Authority for Phase 1 of the Bear Valley Road Bridge over Mojave River Rehabilitation & Widening Project.

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Council Meeting Date: May 24, 2022 X-3

1. Vicinity Map.

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22-1002754 Page 1 of 9
PROJECT FUNDING AGREEMENT NO. 22-1002754
FOR

BEAR VALLEY ROAD BRIDGE OVER MOJAVE RIVER PROJECT
(TOWN OF APPLE VALLEY)
THIS Project Funding Agreement (“AGREEMENT”) is made and entered into by and between the San Bernardino County Transportation Authority (“SBCTA”) and the Town of Apple Valley (“TOWN”). SBCTA and TOWN are each a “Party” or collectively “Parties.”

RECITALS
A. The Measure I 2010-2040 Expenditure Plan and the Victor Valley Subarea transportation planning partners have identified projects eligible for partial funding from Measure I 2010-2040 Victor Valley Subarea Major Local Highway Program (“MLHP”) funds; and B. The Bear Valley Road Bridge Over Mojave River Project (“PROJECT”) is one of the projects identified as eligible for such funding and is described more fully in Attachment A; and C. The PROJECT is eligible for funding through the Highway Bridge Program (HBP) for up to

88.53% of participating costs; and
D. SBCTA prepared a study, referenced herein as the Nexus Study, dated November 2, 2011, updated every two years in accordance with the Measure I 2010-2040 Expenditure Plan, that identified for projects located in TOWN the SBCTA Public Share as 45% and the TOWN Developer Share as 55% of costs necessary to complete the project, and not covered by the HBP; and
E. TOWN identified a need of $50,400 to complete Phase I work on the PROJECT; and F. The Victor Valley Subarea transportation planning partners have identified this PROJECT as eligible for partial funding in an amount up to $50,400 from Measure I 2010-2040 MLHP funds for the PROJECT; and
G. PROJECT WORK is defined as the Phase I Utility Relocation Construction of the PROJECT; and
H. This AGREEMENT is to be carried out in accordance with the policies in the Measure I 2010- 2040 Strategic Plan including the use of Development Impact Fees by TOWN to pay its share of PROJECT costs; and
I. TOWN desires to proceed with the PROJECT WORK in a timely manner; and

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22-1002754 Page 2 of 9
J. This AGREEMENT is intended to delineate the duties and funding responsibilities of the Parties for the PROJECT WORK; and
K. SBCTA and TOWN are entering into this AGREEMENT with the understanding that SBCTA will reimburse TOWN for eligible PROJECT WORK expenditures with MLHP funds.

NOW, THEREFORE, SBCTA and TOWN agree to the following:

SECTION I
SBCTA AGREES:

1. To reimburse TOWN for the actual cost of the PROJECT WORK up to a maximum of $50,400 in MLHP funds. An estimate of costs for the PROJECT WORK is provided in Attachment B. SBCTA shall have no further responsibilities to provide any funding for PROJECT WORK exceeding this amount without an amendment to this AGREEMENT.

2. To reimburse TOWN within 30 days after TOWN submits an electronic copy of the signed invoices in the proper form covering those actual allowable PROJECT WORK expenditures that were incurred by TOWN up to a maximum amount identified in Section I, Paragraph 1 of this AGREEMENT, consistent with the invoicing requirements of the Measure I 2010-2040 Strategic Plan, including backup information.

Invoices may be submitted to SBCTA as frequently as monthly.

3. When conducting an audit of the costs claimed under the provisions of this AGREEMENT, to rely to the maximum extent possible on any prior audit of TOWN performed pursuant to the provisions of State and Federal laws. In the absence of such an audit, work of other auditors will be relied upon to the extent that work is acceptable to SBCTA when planning and conducting additional audits.

4. To assign a project liaison for the purpose of attending Project Development Team (PDT) meetings.

SECTION II
TOWN AGREES:

1. To be the lead agency for PROJECT WORK and to diligently undertake and complete in a timely manner the Scope of Work for the PROJECT WORK as shown in Attachment A.

2. To be responsible for expending that portion of allocated MLHP funds on eligible PROJECT WORK expenses in an amount not to exceed $50,400 in MLHP Funds unless AGREEMENT is amended and approved increasing PROJECT WORK costs.

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22-1002754 Page 3 of 9
Reimbursement by SBCTA shall be in accordance with Section I, Paragraph 2.

Additionally, expenses relative to time spent on the PROJECT WORK by TOWN staff are considered eligible PROJECT expenses and may be charged to the PROJECT, subject to SBCTA’s guidelines.

3. To abide by all applicable SBCTA, TOWN, State and Federal laws, regulations, policies and procedures pertaining to the PROJECT WORK.

4. To prepare and submit to SBCTA an electronic copy of signed invoices for reimbursement of eligible PROJECT WORK expenses. Invoices may be submitted to SBCTA as frequently as monthly.

5. To maintain all source documents, books and records connected with its performance under this AGREEMENT for a minimum of five (5) years from the date of the Final Report of Expenditures submittal to SBCTA or until audit resolution is achieved, whichever is later, and to make all such supporting information available for inspection and audit by representatives of SBCTA during normal business hours at TOWN Hall.

Copies will be made and furnished by TOWN upon written request by SBCTA.

6. To establish and maintain an accounting system conforming to Generally Accepted Accounting Principles (GAAP) to support TOWN’s requests for reimbursement, payment vouchers, or invoices which segregate and accumulate costs of PROJECT WORK elements and produce monthly reports which clearly identify reimbursable costs, matching fund costs, indirect cost allocation, and other allowable expenditures by TOWN.

7. To prepare a Final Report of Expenditures, including a final invoice reporting the actual eligible PROJECT WORK costs expended for those activities described in the work activities, and to submit that Final Report of Expenditures and final invoice no later than one hundred twenty (120) days following the completion of those expenditures funded under this AGREEMENT. The Final Report of Expenditures shall be submitted to SBCTA and must state that these PROJECT WORK funds were used in conformance with this AGREEMENT and for those PROJECT WORK-specific work activities described.

8. To cooperate in having a PROJECT-specific audit completed by SBCTA, at SBCTA’s option and expense, upon completion of the PROJECT WORK. The audit must state that all funds expended on the PROJECT WORK were used in conformance with this AGREEMENT.

9. To repay to SBCTA any reimbursement for Measure I costs that are determined by subsequent audit to be unallowable within one hundred twenty (120) days of TOWN receiving notice of audit findings, which time shall include an opportunity for TOWN to respond to and/or resolve the findings. Should the findings not be otherwise resolved and TOWN fail to reimburse moneys due SBCTA within one hundred twenty (120) days of audit findings, or within such other period as may be agreed between both Parties,

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22-1002754 Page 4 of 9
SBCTA reserves the right to withhold future payments due TOWN from any source under SBCTA’s control.

10. To include SBCTA in Project Development Team (PDT) meetings if and when such meetings are held and in related communications on PROJECT WORK progress, to provide at least quarterly schedule updates to SBCTA, and to consult with SBCTA on critical issues relative to the PROJECT WORK.

11. As an eligible PROJECT WORK expense, to post signs at the boundaries of the PROJECT noting that PROJECT is funded with Measure I funds. Signs shall bear the logos of SBCTA and TOWN.

12. To include in all contracts between TOWN and contractors for the PROJECT WORK the requirement that SBCTA be named as an additional insured under general liability insurance policies maintained by the contractor for the PROJECT.

SECTION III
IT IS MUTUALLY AGREED:

1. To abide by all applicable Federal, State and Local laws and regulations pertaining to the PROJECT WORK, including policies in the applicable program in the Measure I 2010-2040 Strategic Plan, as amended, as of the Effective Date of this AGREEMENT.

2. The final PROJECT WORK cost may ultimately exceed current estimates of PROJECT WORK cost. Any additional eligible costs resulting from unforeseen conditions over the estimated total of the PROJECT WORK cost shall be borne by TOWN unless prior authorization has been approved by the SBCTA Board of Directors pursuant to Section III, Paragraph 3 of this AGREEMENT.

3. In the event TOWN determines PROJECT WORK costs may exceed the not to exceed amount identified in Section I, Paragraph 1, TOWN shall inform SBCTA of this determination and thereafter the Parties shall work together in an attempt to agree upon an amendment to the PROJECT WORK amounts identified in this AGREEMENT. In no event, however, shall SBCTA be responsible for PROJECT WORK costs in excess of the amounts identified herein absent a written amendment to this AGREEMENT that is approved and signed by both Parties.

4. Eligible PROJECT WORK reimbursements shall include only those costs incurred by TOWN for PROJECT WORK-specific work activities that are described in this AGREEMENT and shall not include escalation or interest.

5. Neither SBCTA nor any officer or employee thereof is responsible for any injury, damage or liability occurring or arising by reason of anything done or omitted to be done by TOWN under or in connection with any work, authority or jurisdiction delegated to TOWN under this AGREEMENT. It is understood and agreed that,

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22-1002754 Page 5 of 9
pursuant to Government Code Section 895.4, TOWN shall fully defend, indemnify and save harmless SBCTA, its officers and employees from all claims, suits or actions of every name, kind and description brought for or on account of injury (as defined by Government Code Section 810.8) occurring by reason of anything done or omitted to be done by TOWN under or in connection with any work, authority or jurisdiction delegated to TOWN under this AGREEMENT. TOWN’s indemnification obligation applies to SBCTA’s “active” as well as “passive” negligence but does not apply to SBCTA’s “sole negligence” or “willful misconduct” within the meaning of Civil Code Section 2782.

6. Neither TOWN nor any officer or employee thereof is responsible for any injury, damage or liability occurring or arising by reason of anything done or omitted to be done by SBCTA under or in connection with any work, authority or jurisdiction delegated to SBCTA under this AGREEMENT. It is understood and agreed that, pursuant to Government Code Section 895.4, SBCTA shall fully defend, indemnify and save harmless TOWN, its officers and employees from all claims, suits or actions of every name, kind and description brought for or on account of injury (as defined by Government Code Section 810.8) occurring by reason of anything done or omitted to be done by SBCTA under or in connection with any work, authority or jurisdiction delegated to SBCTA under this AGREEMENT. SBCTA’s indemnification obligation applies to TOWN’s “active” as well as “passive” negligence but does not apply to TOWN’s “sole negligence” or “willful misconduct” within the meaning of Civil Code Section 2782.

7. In the event TOWN and/or SBCTA is found to be comparatively at fault for any claim, action, loss or damage which results from their respective obligations under this AGREEMENT, TOWN and/or SBCTA shall indemnify the other to the extent of its comparative fault.

8. This AGREEMENT will be considered terminated upon reimbursement of all eligible costs by SBCTA or June 30, 2026, whichever is sooner, provided that the provisions of Paragraphs 5, 6, 7, 8, and 9 of Section II, and Paragraphs 5, 6 and 7 of Section III, shall survive the termination of this AGREEMENT. The AGREEMENT may also be terminated by SBCTA, in its sole discretion, in the event the PROJECT WORK described in Attachment A has not been initiated by TOWN within twelve (12) months of the Effective Date of this AGREEMENT.

9. SBCTA may terminate this AGREEMENT if TOWN fails to perform according to the terms of this AGREEMENT and if this failure jeopardizes the delivery of the PROJECT WORK according to the terms herein.

10. The Recitals to this AGREEMENT are true and correct and are incorporated into this Agreement.

11. Attachment A (Description of Project and Milestones) and Attachment B (Summary of Estimated Costs) are attached to and incorporated into this AGREEMENT.

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22-1002754 Page 6 of 9

12. The AGREEMENT may be signed in counterparts, each of which shall constitute an original.

13. This AGREEMENT is effective and shall be dated on the date executed by SBCTA. ----SIGNATURES ON FOLLOWING PAGE----

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22-1002754 Page 7 of 9
IN WITNESS WHEREOF, the Parties have executed this AGREEMENT by their authorized signatories below.

SAN BERNARDINO COUNTY

TRANSPORTATION AUTHORITY TOWN OF APPLE VALLEY
By: ________________________ By: ________________________ Curt Hagman, President Kari Leon
Board of Directors Mayor
Date: ________________________ Date:________________________

APPROVED AS TO FORM AND APPROVED AS TO FORM AND
PROCEDURE: PROCEDURE:

By: ________________________ By: ______________________ Julianna K. Tillquist Thomas Rice
SBCTA General Counsel Town Attorney
Date: ________________________

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22-1002754 Page 8 of 9

ATTACHMENT A

BEAR VALLEY ROAD BRIDGE OVER MOJAVE RIVER PROJECT
Description of Project and Milestones
Project Title
Bear Valley Road Bridge Over Mojave River Project
Location, Project Limits, Description, Scope of Work
The project generally consists of rehabilitation, widening and partial replacement of the Bear Valley Road Bridge over the Mojave River in the Town of Apple Valley, including pedestrian and ADA improvements, and the necessary utility relocations, roadway approach widening and intersection modifications.

Project Milestone Proposed
Begin Environmental (PA&ED) Phase 06/10/2013
Circulate Draft Environmental Document Document Type ISMND February 2017 December 2019 revalidation
End Environmental Phase (PA&ED Milestone) 03/01/2017
Begin Design (PS&E) Phase 04/01/2017
End Design Phase (Ready to List for Advertisement Milestone) 10/30/2022 Begin Right of Way Phase 01/01/2020
End Right of Way Phase (Right of Way Certification Milestone) 11/30/2022 Begin Construction Phase (Contract Award Milestone)(1) 01/11/2023 End Construction Phase (Construction Contract Acceptance Milestone)(1) 03/01/2026 Begin Closeout Phase 03/30/2026
End Closeout Phase (Closeout Report) 06/30/2026
(1) The PROJECT will include more than one construction contract. Phase I will be to construct utility relocations, and Phase II is the bridge widening. The Begin/End Construction dates encompass both construction contracts.

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22-1002754 Page 9 of 9

ATTACHMENT B

BEAR VALLEY ROAD BRIDGE OVER MOJAVE RIVER PROJECT
Summary of Estimated Costs
Phase Total Cost
Caltrans
HBP Share
SB County
Flood Control
District(1)
SBCTA
Share(2)
45%
TOWN
Share
55%
Phase I CON:

Utility Relocations $1,115,000 $987,000 $16,000 $50,400 $61,600 TOTAL $1,115,000 $987,000 $16,000 $50,400 $61,600
(1) Town is responsible for the contribution from the SB County Flood Control District share separately from this AGREEMENT.
(2) SBCTA’s Share can be from sources under control of SBCTA including but not limited to Measure I Major/Local Highways program, State Transportation Improvement Program (STIP), Surface Transportation Program (STP), or other funds without necessitating an amendment of this AGREEMENT.

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Town Council Agenda Report
Date: May 24, 2022
To: Honorable Mayor and Town Council
Subject: BEAR VALLEY ROAD BRIDGE OVER MOJAVE RIVER
REHABILITATION & WIDENING PROJECT: FORMAL CONTRACT
AMENDMENT NO. 2, BAT MITIGATION AND MULTI-AGENCY
COORDINATION.

From: Douglas Robertson, Town Manager
Submitted by: Brad Miller, Town Engineer
Engineering
Budgeted Item: Yes No N/A

RECOMMENDED ACTION
Approve Formal Contract Amendment No. 2 to the March 11, 2014 Agreement between the Town of Apple Valley and Dokken Engineering for engineering and design services for the Bear Valley Road Bridge over the Mojave River Rehabilitation and Widening Project for an amount not-to-exceed $178,791 and a time extension to December 31, 2023.

BACKGROUND
On March 11, 2014, the Town of Apple Valley entered an agreement with Dokken Engineering for alternative analysis and selection, preliminary design, environmental study, CEQA/NEPA documentation and approval, final design and right of way services.

The scope of services was assembled, based on a preliminary concept for a bridge rehabilitation or replacement project, and included numerous assumptions regarding the project needs for right-of-way acquisitions, utility relocations, environmental studies/permits, soils/geotechnical studies, hydrology studies, and much more. As the project progressed, work was added to include funding assistance, and coordination with various agencies including City of Victorville, City of Hesperia, Caltrans, San Bernardino County Special Service District, San Bernardino County Flood Control, Lahontan Water Resources Board, California Department of Fish and Wildlife, Southern California Edison, Southwest Gas, Victor Valley College, and other private property owners and developments. Additionaly, Procedures and Policy changes at Caltrans resulted in extra reports, studies, and analysis. Utility relocation, in particular the large Southern California Edison Transmission lines and towers, and the CSA-64 water mainline, became much bigger components of the project than anticipated. To allow for all additional work, Town

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Council approved Contract Amendment request No. 1 in June, 2021, for an amount not to exced $887,786.

The current amendment is necessary to allow the preparation of a Bat Mitigation and Management Plan, continue coordination with the California Department of Fish and Wildlife (CDFW) and to assist the Town with providing information to and coordinating with neighboring jurisdictions and the Flood Control District. A time extension to December 31, 2023 is also requested. This tracks with the scheduled completion of Phase I Grading, SCE’s Relocation and the completion of the PS&E for Phase II, which is the Bridge and Roadway work.

ANALYSIS
Attached is Dokken’s formal Contract Amendment request No. 2 to enable the project to move forward into final design and construction. Contract amendment No. 2 has been reviewed by staff, and the proposed additional work and tasks are considered warranted and competitive for this large and increasingly complex project.

Dokken Engineering proposes to provide the additional services outlined in the April 28, 2022 request for a not-to-exceed added amount of $178,791. The addition of this amendment brings Dokken Engineering’s total contract amount to $3,196,975.

The revised contract total is proposed to stay at 8.4% of the currently estimated construction cost of $38 million for Phases 1 and 2, and remains well under the industry standard of 15 to 20%. The total construction estimated cost, including construction support and construction management is approximately $43 million.

FISCAL IMPACT
This project spans multiple years. It is currently budgeted in FY 21-22 for $400,000 ($134,410 from Measure I and $265,590.00 from Highway Bridge Program Federal grant).

The project and Dokken’s contract will continue throughout FY 22-23 and beyond years.

Appropriate funding is being proposed for these next fiscal years.

ATTACHMENTS
This is for attachments, if your report does not have attachments then delete this heading.

If you do have attachments please number them:

A. Vicinity map.

B. Dokken’s formal contract amendment request No. 2.

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Council Meeting Date: May 24, 2022 X-3

1. Vicinity Map.

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PHASE I ‐ BRIDGE CONDITION ANALYSIS AND EVALUATION $ ‐ 398,978 $ $ 398,978 $ ‐ 398,978 $ TASK 1 ‐ PROJECT MANAGEMENT/AGENCY COORDINATION 77,422 $ ‐ $ $ 77,422 $ ‐ 77,422 $ TASK 2 ‐ BRIDGE AND SITE EVALUATION 200,548 $ ‐ $ $ 200,548 $ ‐ 200,548 $ TASK 3 ‐ PRELIMINARY ALTERNATIVE DEVELOPMENT & ANALYSIS 101,975 $ ‐ $ $ 101,975 $ ‐ 101,975 $ TASK 4 ‐ PRELIMINARY ENVIRONMENTAL INVESTIGATIONS 19,034 $ ‐ $ $ 19,034 $ ‐ 19,034 $ PHASE II ‐ PROJECT APPROVAL AND ENVIRONMENTAL DOCUMENT $ 710,059 $ 74,540 $ 784,599 $ 697,595 $ 87,004 TASK 1 ‐ PROJECT MANAGEMENT/AGENCY COORDINATION 131,851 $ $ 6,766 $ 138,617 $ 128,866 $ 9,751

1.1 Project Management/Agency Coordination 115,877 $ $ 6,766 $ 122,643 $ 112,892 $ 9,751

1.2 Funding Assistance 15,974 $ ‐ $ $ 15,974 $ ‐ 15,974 $ TASK 2 ‐ PRELIMINARY ENGINEERING 355,066 $ ‐ $ $ 355,066 $ 349,573 $ 5,493 TASK 3 ‐ TECHNICAL STUDIES AND ENVIRONMENTAL DOCUMENTATION 223,142 $ $ 67,774 $ 290,916 $ 219,156 $ 71,760

3.1 Technical Studies 105,647 $ ‐ $ $ 105,647 $ ‐ 105,647 $

3.2 Environmental Documentation 50,291 $ ‐ $ $ 50,291 $ ‐ 50,291 $

3.3 Environmental Permits 54,486 $ $ 13,013 $ 67,499 $ 53,852 $ 13,647

3.4 Pre‐Construction Southwestern Willow Flycatcher Surveys 8,827 $ $ 7,933 $ 16,761 $ 6,402 $ 10,358

3.5 Pre‐Construction Rare Plant Surveys 3,890 $ ‐ $ $ 3,890 $ 2,963 $ 927

3.6 Bat Mitigation and Management Plan ‐ $ $ 46,827 $ ‐ 46,827 $ $ 46,827 PHASE III ‐ FINAL DESIGN $ 1,692,480 $ 82,264 $ 1,774,744 $ 1,483,393 $ 291,351 TASK 1 ‐ PROJECT MANAGEMENT/AGENCY COORDINATION 161,214 $ $ 74,779 $ 235,993 $ 139,042 $ 96,951

1.1 Project Management/Agency Coordination 119,636 $ $ 24,003 $ 143,639 $ 98,098 $ 45,542

1.2 Funding Assistance 41,578 $ $ 17,254 $ 58,832 $ 40,945 $ 17,887

1.3 Inter‐Agency Agreements $ 13,636 $ ‐ 13,636 $ $ 13,636

1.4 City / Flood Control Encroachment Permits 19,886 $ $ ‐ 19,886 $ $ 19,886 TASK 2 ‐ FINAL DESIGN 1,531,266 $ $ 7,485 $ 1,538,751 $ 1,344,351 $ 194,400

2.1 Design Level Survey 49,004 $ ‐ $ $ 49,004 $ 49,016 $ (11)

2.2 Hydraulics/Hydrology $ ‐ 100,851 $ $ 100,851 $ 97,852 $ 2,999

2.3 Utility Coordination 162,287 $ $ 7,485 $ 169,772 $ 152,985 $ 16,786

2.3.1 Utility Coordination (SCE) 87,991 $ ‐ $ $ 87,991 $ 79,993 $ 7,998

2.3.2 Utility Coordination (Non‐SCE) 55,404 $ $ 7,485 $ 62,889 $ 50,725 $ 12,164

2.3.3 Potholing 18,892 $ ‐ $ $ 18,892 $ 22,267 $ (3,375)

2.4 65% Plans and Estimate 382,825 $ ‐ $ $ 382,825 $ ‐ 382,825 $

2.5 90% Plans, Specifications and Estimate 566,065 $ ‐ $ $ 566,065 $ 566,071 $ (7)

2.6 100% Plans, Specifications and Estimate 191,216 $ ‐ $ $ 191,216 $ 63,719 $ 127,497

2.7 Right of Way Engineering 31,883 $ ‐ $ $ 31,883 $ ‐ 31,883 $

2.8 Project Approval 47,135 $ ‐ $ $ ‐ 47,135 $ $ 47,135 PHASE IV ‐ RIGHT OF WAY SERVICES $ 181,694 $ 21,987 $ 203,681 $ 39,209 $ 164,472 TASK 1 ‐ RIGHT OF WAY TASKS 181,694 $ $ 21,987 $ 203,681 $ 39,209 $ 164,472

1.1 Project Tracking Table 5,268 $ ‐ $ $ 5,268 $ 2,957 $ 2,311

1.2 Right of Way Requirements & POE's 6,165 $ $ 7,815 $ 13,981 $ 8,716 $ 5,265

1.3 Title Research/Title Clearance 5,268 $ ‐ $ $ 5,268 $ 1,553 $ 3,715

1.4 Plats & Legals 19,872 $ $ 9,171 $ 29,043 $ 23,011 $ 6,032

1.5 Appraisal Process $ ‐ 22,028 $ $ 22,028 $ 2,328 $ 19,700

1.6 Obtain Appraisal Review Reports $ ‐ 8,775 $ $ ‐ 8,775 $ $ 8,775

1.7 Summary Statement 3,902 $ ‐ $ $ ‐ 3,902 $ $ 3,902

1.8 Negotiate for Right of Way $ 84,389 $ 5,000 $ 89,389 $ 644 $ 88,745

1.9 Escrow Coordination 12,360 $ ‐ $ $ ‐ 12,360 $ $ 12,360

1.10 Caltrans Right of Way Certification 9,575 $ ‐ $ $ ‐ 9,575 $ $ 9,575

1.11 Right of Way Close‐Out 4,093 $ ‐ $ $ ‐ 4,093 $ $ 4,093 PHASE V ‐ BIDDING & CONSTRUCTION SUPPORT $ ‐ 34,972 $ $ ‐ 34,972 $ $ 34,972 TASK 1 ‐ PHASE I BIDDING & CONSTRUCTION SUPPORT 34,972 $ ‐ $ $ ‐ 34,972 $ $ 34,972

1.1 Engineering Support of Construction 19,892 $ ‐ $ $ ‐ 19,892 $ $ 19,892

1.2 Environmental Support of Construction 15,081 $ ‐ $ $ ‐ 15,081 $ $ 15,081 TOTAL COST 3,018,184 $ $ 178,791 $ 3,196,975 $ 2,619,176 $ 577,799

EXPENDITURES

THROUGH
MARCH 2022

REMAINING

BALANCE
April 8, 2022

ATTACHEMNT A
CONTRACT SUMMARY AND AMENDMENT REQUEST NO. 2

TOWN OF APPLE VALLEY

BEAR VALLEY BRIDGE OVER THE MOJAVE RIVER REHABIILITATION AND WIDENING PROJECT TASK DESCRIPTION AMENDMENT 2

REQUEST

REVISED CONTRACT

AMOUNT PER
AMENDMENT 1 ‐ May
4, 2021

NEW CONTRACT

AMOUNT PER
AMENDMENT 2

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ATTACHMENT B ‐ ESTIMATED HOURS BY TASK FOR AMENDMENT NO. 2

TOWN OF APPLE VALLEY

BEAR VALLEY ROAD BRIDGE OVER THE MOJAVE RIVER REHABILITATION WIDENING PROJECT April 8, 2022
Elizabeth Diamond, PE
Project Manager
Eric Espinoza, PE
Roadway Project Engineer
Anthony Powers, PE
Bridge Project Engineer
Sarah Holm
Environmental Manager
Senior Engineer
Assistant Engineer
Senior Environmental
Planner
Associate Environmental
Planner
TOTAL
HOURS

LABOR COST ESCALATION OH FEE
OTHER

DIRECT COST

TOTAL COST
FULLY BURDENED RATE $ 271.70 $ 174.46 $ 197.34 $ 214.50 $ 214.50 $ 114.40 $ 174.46 $ 131.56 160.00% 10.00% PHASE I - BRIDGE CONDITION ANALYSIS AND EVALUATION $ - - $ - $ - $ - $ - $ TASK 1 - PROJECT MANAGEMENT/AGENCY COORDINATION $ - - $ - $ - $ - $ - $ TASK 2 - BRIDGE AND SITE EVALUATION $ - - $ - $ - $ - $ - $ TASK 3 - PRELIMINARY ALTERNATIVE DEVELOPMENT & ANALYSIS $ - - $ - $ - $ - $ - $ TASK 4 - PRELIMINARY ENVIRONMENTAL INVESTIGATIONS $ - - $ - $ - $ - $ - $ PHASE II - PROJECT APPROVAL AND ENVIRONMENTAL DOCUMENT 26 32 44 55 12 125 294 18,065.00 $ 245.50 $ 29,296.81 $ 4,760.73 $ 11,600.00 $ 63,968.04 $ TASK 1 - PROJECT MANAGEMENT/AGENCY COORDINATION 6 4 8 20 38 2,334.00 $ 31.72 $ 3,785.15 $ 615.09 $ - $ 6,765.96 $

1.1 Project Management/Agency Coordination 6 4 8 20 38 2,334.00 $ 31.72 $ 3,785.15 $ 615.09 $ 6,765.96 $

1.2 Funding Assistance $ - - $ - $ - $ - $
TASK 2 - PRELIMINARY ENGINEERING $ - - $ - $ - $ - $ - $ TASK 3 - TECHNICAL STUDIES AND ENVIRONMENTAL DOCUMENTATION 20 28 44 47 12 105 256 15,731.00 $ 213.78 $ 25,511.65 $ 4,145.64 $ 11,600.00 $ 57,202.08 $

3.1 Technical Studies $ - - $ - $ - $ - $

3.2 Environmental Documentation $ - - $ - $ - $ - $

3.3 Environmental Permits 8 8 4 15 40 75 4,489.00 $ 61.01 $ 7,280.01 $ 1,183.00 $ 13,013.02 $

3.4 Pre-Construction Southwestern Willow Flycatcher Surveys 10 10 460.00 $ 6.25 $ 746.00 $ 121.23 $ 6,600.00 $ 7,933.48 $

3.5 Pre-Construction Rare Plant Surveys $ - - $ - $ - $ - $

3.6 Bat Mitigation and Management Plan 12 20 40 32 12 55 171 10,782.00 $ 146.53 $ 17,485.64 $ 2,841.42 $ 5,000.00 $ 36,255.59 $ PHASE III - FINAL DESIGN 118 128 48 144 438 28,378.00 $ 385.66 $ 46,021.85 $ 7,478.55 $ - $ 82,264.06 $ TASK 1 - PROJECT MANAGEMENT/AGENCY COORDINATION 112 116 48 112 388 25,796.00 $ 350.57 $ 41,834.51 $ 6,798.11 $ - $ 74,779.18 $

1.1 Project Management/Agency Coordination 48 40 32 120 8,280.00 $ 112.53 $ 13,428.04 $ 2,182.06 $ 24,002.62 $

1.2 Funding Assistance 32 32 24 88 5,952.00 $ 80.89 $ 9,652.62 $ 1,568.55 $ 17,254.06 $

1.3 Inter-Agency Agreements 24 24 24 72 4,704.00 $ 63.93 $ 7,628.68 $ 1,239.66 $ 13,636.27 $

1.4 City / Flood Control Encroachment Permits 8 20 48 32 108 6,860.00 $ 93.23 $ 11,125.16 $ 1,807.84 $ 19,886.23 $ TASK 2 - FINAL DESIGN 6 12 32 50 2,582.00 $ 35.09 $ 4,187.34 $ 680.44 $ - $ 7,484.88 $

2.1 Design Level Survey $ - - $ - $ - $ - $ - $

2.2 Hydraulics/Hydrology $ - - $ - $ - $ - $ - $ 2.3 Utility Coordination 6 12 32 50 2,582.00 $ 35.09 $ 4,187.34 $ 680.44 $ - $ 7,484.88 $

2.4 65% Plans and Estimate $ - - $ - $ - $ - $ - $ 2.5 90% Plans, Specifications and Estimate $ - - $ - $ - $ - $ - $

2.6 100% Plans, Specifications and Estimate $ - - $ - $ - $ - $ - $ 2.7 Right of Way Engineering $ - - $ - $ - $ - $

2.8 Project Approval $ - - $ - $ - $ - $
PHASE IV - RIGHT OF WAY SERVICES 12 24 40 76 4,204.00 $ 57.13 $ 6,817.81 $ 1,107.89 $ 9,800.00 $ 21,986.84 $ TASK 1 - RIGHT OF WAY TASKS 12 24 40 76 4,204.00 $ 57.13 $ 6,817.81 $ 1,107.89 $ 9,800.00 $ 21,986.84 $

1.1 Project Tracking Table $ - - $ - $ - $ - $

1.2 Right of Way Requirements & POE's 8 16 24 48 2,696.00 $ 36.64 $ 4,372.22 $ 710.49 $ - $ 7,815.35 $

1.3 Title Research/Title Clearance $ - - $ - $ - $ - $ - $

1.4 Plats & Legals 4 8 16 28 1,508.00 $ 20.49 $ 2,445.59 $ 397.41 $ 4,800.00 $ 9,171.49 $ 1.5 Appraisal Process $ - - $ - $ - $ - $

1.6 Obtain Appraisal Review Reports $ - - $ - $ - $ - $

1.7 Summary Statement $ - - $ - $ - $ - $

1.8 Negotiate for Right of Way $ - - $ - $ - $ 5,000.00 $ 5,000.00 $

1.9 Escrow Coordination $ - - $ - $ - $ - $

1.10 Caltrans Right of Way Certification $ - - $ - $ - $ - $

1.11 Right of Way Close-Out $ - - $ - $ - $ - $
PHASE V - BIDDING & CONSTRUCTION SUPPORT $ - - $ - $ - $ - $ - $ TASK 1 - PHASE I BIDDING & CONSTRUCTION SUPPORT $ - - $ - $ - $ - $ - $ TOTAL HOURS 156 184 44 55 48 184 12 125 808
TOTAL COST 42,385.20 $ 32,100.64 $ 8,682.96 $ 11,797.50 $ 10,296.00 $ 21,049.60 $ 2,093.52 $ 16,445.00 $ 50,647.00 $ 688.29 $ 82,136.47 $ 13,347.18 $ 21,400.00 $ 168,218.94 $

TASK DESCRIPTION

DOKKEN ENGINEERING

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ATTACHMENT B ‐ ESTIMATED HOURS BY TASK FOR AMENDMENT NO. 2

TOWN OF APPLE VALLEY

BEAR VALLEY ROAD BRIDGE OVER THE MOJAVE RIVER REHABILITATION WIDENING PROJECT April 8, 2022

FULLY BURDENED RATE

PHASE I - BRIDGE CONDITION ANALYSIS AND EVALUATION
TASK 1 - PROJECT MANAGEMENT/AGENCY COORDINATIONTASK 2 - BRIDGE AND SITE EVALUATIONTASK 3 - PRELIMINARY ALTERNATIVE DEVELOPMENT & ANALYSISTASK 4 - PRELIMINARY ENVIRONMENTAL INVESTIGATIONS

PHASE II - PROJECT APPROVAL AND ENVIRONMENTAL DOCUMENT
TASK 1 - PROJECT MANAGEMENT/AGENCY COORDINATION

1.1 Project Management/Agency Coordination1.2 Funding Assistance TASK 2 - PRELIMINARY ENGINEERINGTASK 3 - TECHNICAL STUDIES AND ENVIRONMENTAL DOCUMENTATION

3.1 Technical Studies3.2 Environmental Documentation3.3 Environmental Permits3.4 Pre-Construction Southwestern Willow Flycatcher Surveys3.5 Pre-Construction Rare Plant Surveys3.6 Bat Mitigation and Management Plan

PHASE III - FINAL DESIGN
TASK 1 - PROJECT MANAGEMENT/AGENCY COORDINATION

1.1 Project Management/Agency Coordination1.2 Funding Assistance1.3 Inter-Agency Agreements1.4 City / Flood Control Encroachment Permits TASK 2 - FINAL DESIGN

2.1 Design Level Survey2.2 Hydraulics/Hydrology 2.3 Utility Coordination2.4 65% Plans and Estimate2.5 90% Plans, Specifications and Estimate2.6 100% Plans, Specifications and Estimate2.7 Right of Way Engineering2.8 Project Approval

PHASE IV - RIGHT OF WAY SERVICES
TASK 1 - RIGHT OF WAY TASKS

1.1 Project Tracking Table1.2 Right of Way Requirements & POE's1.3 Title Research/Title Clearance1.4 Plats & Legals1.5 Appraisal Process 1.6 Obtain Appraisal Review Reports 1.7 Summary Statement1.8 Negotiate for Right of Way 1.9 Escrow Coordination1.10 Caltrans Right of Way Certification1.11 Right of Way Close-Out

PHASE V - BIDDING & CONSTRUCTION SUPPORT
TASK 1 - PHASE I BIDDING & CONSTRUCTION SUPPORT

TOTAL HOURS

TOTAL COST

TASK DESCRIPTION
Blake Selna
Principal in Charge
Jill Carpenter
Project Manager/Bat
Specailist
Kathy Westlie
Project Assistant
Jessica Lieuw
Biologist
Heather Monteleone
Biologist
Meredith Canterbury
Senior Technical Specialist
Matt Phillips
Technical Specialist
Beverly Inloes
Assistant Technical
Specialist
TOTAL
HOURS
LABOR
COST

ESCALATION OH FEE
OTHER
DIRECT
COST

TOTAL COST
$ 288.86 $ 170.53 $ 127.20 $ 127.58 $ 126.45 $ 159.63 $ 166.70 $ 147.01 241.62% 10.00% $ - - $ - $ - $ - $ - $ - $ - $ $ - - $ - $ - $ - $ - $ - $ - $ $ - - $ - $ - $ - $ - $ - $ - $ $ - - $ - $ - $ - $ - $ - $ - $ $ - - $ - $ - $ - $ - $ - $ - $ 2 31 1 6 6 4 4 4 58 2,503.81 $ 201.73 $ 6,537.13 $ 924.27 $ 404.75 $ 10,571.68 $ 352 12,004.75 $ 74,539.72 $ $ - - $ - $ - $ - $ - $ 38 - $ 6,765.96 $
$ - - $ - $ - $ - $ 38 - $ 6,765.96 $
$ - - $ - $ - $ - $ - $ - $
$ - - $ - $ - $ - $ - $ - $ - $
2 31 1 6 6 4 4 4 58 2,503.81 $ 201.73 $ 6,537.13 $ 924.27 $ 404.75 $ 10,571.68 $ 314 12,004.75 $ 67,773.77 $ $ - - $ - $ - $ - $ - $ - $
$ - - $ - $ - $ - $ - $ - $
$ - - $ - $ - $ - $ 75 - $ 13,013.02 $
$ - - $ - $ - $ - $ 10 6,600.00 $ 7,933.48 $
$ - - $ - $ - $ - $ - $ - $
2 31 1 6 6 4 4 4 58 2,503.81 $ 201.73 $ 6,537.13 $ 924.27 $ 404.75 $ 10,571.68 $ 229 5,404.75 $ 46,827.27 $ $ - - $ - $ - $ - $ - $ 438 - $ 82,264.06 $ $ - - $ - $ - $ - $ - $ 388 - $ 74,779.18 $ $ - - $ - $ - $ - $ 120 - $ 24,002.62 $
$ - - $ - $ - $ - $ 88 - $ 17,254.06 $
$ - - $ - $ - $ - $ 72 - $ 13,636.27 $
$ - - $ - $ - $ - $ 108 - $ 19,886.23 $
$ - - $ - $ - $ - $ - $ 50 - $ 7,484.88 $
$ - - $ - $ - $ - $ - $ - $ - $
$ - - $ - $ - $ - $ - $ - $ - $
$ - - $ - $ - $ - $ - $ 50 - $ 7,484.88 $
$ - - $ - $ - $ - $ - $ - $ - $
$ - - $ - $ - $ - $ - $ - $ - $
$ - - $ - $ - $ - $ - $ - $ - $
$ - - $ - $ - $ - $ - $ - $
$ - - $ - $ - $ - $ - $ - $
$ - - $ - $ - $ - $ - $ 76 9,800.00 $ 21,986.84 $
$ - - $ - $ - $ - $ - $ 76 9,800.00 $ 21,986.84 $
$ - - $ - $ - $ - $ - $ - $
$ - - $ - $ - $ - $ 48 - $ 7,815.35 $
$ - - $ - $ - $ - $ - $ - $
$ - - $ - $ - $ - $ 28 4,800.00 $ 9,171.49 $ $ - - $ - $ - $ - $ - $ - $ $ - - $ - $ - $ - $ - $ - $
$ - - $ - $ - $ - $ - $ - $
$ - - $ - $ - $ - $ 5,000.00 $ 5,000.00 $ $ - - $ - $ - $ - $ - $ - $ $ - - $ - $ - $ - $ - $ - $
$ - - $ - $ - $ - $ - $ - $
$ - - $ - $ - $ - $ - $ - $ - $ $ - - $ - $ - $ - $ - $ - $ - $ 2 31 1 6 6 4 4 4 58 866
$ 5,286.43 577.73 $ 127.20 $ 765.47 $ 758.70 $ 638.53 $ 666.79 $ 588.02 $ 2,503.81 $ 201.73 $ 6,537.13 $ 924.27 $ 404.75 $ 10,571.68 $ 21,804.75 $ 178,790.62 $ LSA
GRAND

TOTAL COST
GRAND
TOTAL
OTHER
DIRECT
COSTS
GRAND
TOTAL
HOURS

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Local Assistance Procedures Manual EXHIBIT 10-H1
Cost Proposal
Note: Mark-Ups are Not Allowed
Consultant: DOKKEN ENGINEERING
Project No. 2030 Contract No. 2014-01 Date
Project Name

DIRECT LABOR
Classification/Title Name Hours Actual Hr Rate Total
Project Manager Elizabeth Diamond, PE 156 95.00 $ 14,820.00 $ Structures QA/QC Rob Burns, SE, PE 0 79.00 $ - $
Roadway Project Engineer Eric Espinoza, PE 184 61.00 $ 11,224.00 $ Bridge Project Engineer Anthony Powers, PE 44 69.00 $ 3,036.00 $ Lighting/Signal Designer Joe Ostdiek, PE, TE 0 67.00 $ - $ Environmental Manager Sarah Holm 55 75.00 $ 4,125.00 $
Right of Way Manager Jamie Formico 0 65.00 $ - $
Senior Engineer STAFF 48 75.00 $ 3,600.00 $
Associate Engineer STAFF 0 58.00 $ - $
Assistant Engineer STAFF 184 40.00 $ 7,360.00 $
Senior CAD STAFF 0 67.00 $ - $
Engineering Technician STAFF 0 45.50 $ - $
Senior Environmental Planner STAFF 12 61.00 $ 732.00 $
Associate Environmental Planner STAFF 125 46.00 $ 5,750.00 $ Environmental Planner STAFF 0 34.00 $ - $
Senior Right of Way Agent STAFF 0 52.00 $ - $
Right of Way Assistant STAFF 0 26.00 $ - $
Professional Land Surveyor STAFF 0 80.00 $ - $
808

LABOR COSTS
a) Subtotal Direct Labor Costs $ 50,647.00
b) Anticipated Salary Increases $688.29
c) TOTAL DIRECT LABOR COSTS [(a) + (b)] $ 51,335.29

INDIRECT COSTS
d) Fringe Benefits (Rate: 63.00% ) c) Total Fringe Benefits [(c) x (d)] 32,341.23 $ f) Overhead (Rate: 5.00% ) g) Overhead [(c) x (f)] 2,566.76 $ h) General and Administrative (Rate: 92.00% ) i) Gen & Admin [(c) x (h)] 47,228.47 $ j) TOTAL INDIRECT COSTS [(e) + (g) + (i)] $ 82,136.47
FIXED FEE k) TOTAL FIXED FEE [(c) + (j)] x fixed fee 10% ] $ 13,347.18 l) CONSULTANT’S OTHER DIRECT COSTS (ODC) – ITEMIZE (Add additional pages if necessary) Quantity Unit Unit Cost Total
Plat & Legals 1 LS 4,800.00 $ 4,800.00 $
Negotiate ROW 1 LS 5,000.00 $ 5,000.00 $
Pre-Construction Southwestern Willow Flycatcher Surveys 1 LS 6,600.00 $ 6,600.00 $ Bat Mitigation and Management Plan 1 LS 5,000.00 $ 5,000.00 $ i) TOTAL OTHER DIRECT COSTS $ 21,400.00
m) SUBCONSULTANTS' COSTS (Add additional pages if necessary) • LSA $ 10,571.68
m) TOTAL SUBCONSULTANTS' COSTS $ 10,571.68
n) TOTAL OTHER DIRECT COSTS INCLUDING SUBCONSULTANTS [(l) + (m)] $ 31,971.68 TOTAL COST [(c) + (j) + (k) + (n)] $ 178,790.62
Range
$85.00 - $110.00
$60.00 - $100.00
$60.00 - $100.00
$60.00 - $100.00
$55.00 - $85.00
$20.00 - $55.00
$45.00 - $75.00
$34.00 - $54.00
$60.00 - $100.00
$70.00 - $95.00
$60.00 - $100.00
$48.00 - $68.00
$60.00 - $100.00
$15.00 - $30.00
$30.00 - $40.00
EXHIBIT 10-H1 COST PROPOSAL Page 1 of 3

ACTUAL COST-PLUS-FIXED FEE OR LUMP SUM (FIRM FIXED PRICE) CONTRACTS (DESIGN, ENGINEERING AND ENVIRONMENTAL STUDIES)
April 8, 2022
Bear Valley Road over the Mojave River Bridge Rehabilitation and Widening Description of Item
$32.00 - $52.00
$55.00 - $85.00
$45.00 - $65.00
Prime Consultant Subconsultant 2nd Tier Subconsultant

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January 2020 Page 62 of 325
Local Assistance Procedures Manual EXHIBIT 10-H1
Cost Proposal
NOTES:

3. Anticipated salary increases calculation (page 2) must accompany.

1. Key personnel must be marked with an asterisk (*) and employees that are subject to prevailing wage requirements must be marked with two asterisks (**). All costs must comply with the Federal cost principles. Subconsultants will provide their own cost proposals.

2. The cost proposal format shall not be amended. Indirect cost rates shall be updated on an annual basis in accordance with the consultant’s annual accounting period and established by a cognizant agency or accepted by Caltrans.

Page 2 of 4 ends

January 2020 Page 63 of 325
Local Assistance Procedures Manual EXHIBIT 10-H1
Cost Proposal
Direct Labor Total Hours per Avg 5 Year
Subtotal per Cost Cost Proposal Hourly Contract
Proposal Rate Duration
= $62.68 Year 1 Avg
Hourly Rate
Avg Hourly Rate Proposed Escalation
Year 1 + 3.0% = $64.56 Year 2 Avg Hourly Rate
Year 2 + 3.0% = $66.50 Year 3 Avg Hourly Rate
Year 3 + 3.0% = $68.49 Year 4 Avg Hourly Rate
Year 4 + 3.0% = $70.55 Year 5 Avg Hourly Rate
Estimated % Completed Total Hours per Cost Total Hours per Each Year Proposal Year
Year 1 * 808 = 525 Estimated Hours Year 1
Year 2 * 808 = 202 Estimated Hours Year 2
Year 3 * 808 = 81 Estimated Hours Year 3
Year 4 * 808 = 0 Estimated Hours Year 4
Year 5 * 808 = 0 Estimated Hours Year 5
Total Total = 808
Avg Hourly Rate Estimated hours
(Calculated above) (Calculated Above)
Year 1 * 525 = Estimated Hours Year 1
Year 2 * 202 = Estimated Hours Year 2
Year 3 * 81 = Estimated Hours Year 3
Year 4 * 0 = Estimated Hours Year 4
Year 5 * 0 = Estimated Hours Year 5
Total Direct Labor Cost with Escalation =
Direct Labor Subtotal before Escalation =
Estimated total of Direct Labor Salary Increase = Transfer to Page 1 NOTES:

3. This assumes that one year will be worked at the rate on the cost proposal before salary increases are granted.

4. Calculations for anticipated salary escalation must be provided. $62.68 $32,920.55
$64.56 $13,041.60
$66.50 $5,373.14
$68.49 $0.00
$70.55 $0.00
$51,335.29
$50,647.00
$688.29

1. This is not the only way to estimate salary increases. Other methods will be accepted if they clearly indicate the % increase, the #

2. An estimation that is based on direct labor multiplied by salary increase % multiplied by the # of years is not acceptable.

0.0%
100.000%

4. Calculate Total Costs including Escalation (Multiply Average Hourly Rate by the number of hours) Cost Per
Year

3. Calculate estimated hours per year (Multiply estimate % each year by total hours)

65.0%

25.0%

10.0%

0.0%

1. Calculate hourly rate for all years (Increase the Average Hourly Rate for a year by proposed escalation %) $62.68
$64.56
$66.50
$68.49
EXHIBIT 10-H1 COST PROPOSAL Page 2 of 3

ACTUAL COST-PLUS-FIXED FEE OR LUMP SUM (FIRM FIXED PRICE) CONTRACTS (CALCULATIONS FOR ANTICIPATED SALARY INCREASES)

1. Calculate Average Hourly Rate for 1st year of the contract (Direct Labor Subtotal divided by total hours) $50,647.00 808

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January 2020 Page 64 of 325

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Local Assistance Procedures Manual
_________________________________________________________________________________________________________________________________________________ Exhibit 10-H1
Cost Proposal
_______________________________________________________________________________________________________________________________________Page 1 of 3 January 2020
☐ 2nd Tier Subconsultant
Consultant
Project No. Contract No. Date 02/03/2022

DIRECT LABOR
Hours Actual Hourly Rate Total
2 $76.87 $153.74
31 $45.38 $1,406.78
1 $33.85 $33.85
6 $33.95 $203.70
6 $33.65 $201.90
4 $42.48 $169.92
4 $44.36 $177.44
4 $39.12 $156.48
LABOR COSTS Total Hours: 58
a) Subtotal Direct Labor Costs $2,503.81
b) Anticipated Salary Increases (see page 2 for calculation) $201.73 c) TOTAL DIRECT LABOR COSTS [(a) + (b)] $2,705.54

INDIRECT COSTS
108.53% ) e) $2,936.32
133.09% ) g) Overhead [(c) x (f)] $3,600.80
h) General and Administrative (Rate: 0.00% i) Gen & Admin [(c) x (h)] $0.00 j) TOTAL INDIRECT COSTS [(e) + (g) + (i)] $6,537.13
FIXED FEE 10.00% ] $924.27
l) CONSULTANT’S OTHER DIRECT COSTS (ODC) – ITEMIZE (Add additional pages if necessary) Quantity Unit Unit Cost Total
Mileage (on-road) 2022 350 Miles $0.585 $204.75
4 Nights $50.00 $200.00
I) TOTAL OTHER DIRECT COSTS $404.75
n) TOTAL OTHER DIRECT COSTS INCLUDING SUBCONSULTANTS [(l)+(m)] TOTAL COST [(c) + (j) + (k) + (n)] $10,571.68
NOTES:

Night Vision Goggles
Project Manager/Bat Specialist* Jill Carpenter
Project Assistant Kathy Westlie
Principal in Charge* Blake Selna
Assistant Technical Specialist Beverly Inloes
EXHIBIT 10-H1 COST PROPOSAL PAGE 1 OF 3

ACTUAL COST-PLUS-FIXED FEE OR LUMP SUM (FIRM FIXED PRICE) CONTRACTS (DESIGN, ENGINEERING AND ENVIRONMENTAL STUDIES)
Classification/Title Name
Note: Mark-ups are Not Allowed ☐Prime Consultant ☒ Subconsultant LSA Associates, Inc.

Biologist* Jessica Lieuw
Biologist
Description of Item
k) TOTAL FIXED FEE [(c) + (j)] x fixed fee
Heather Monteleone
Senior Technical Specialist Meredith Canterbury
Technical Specialist
d) Fringe Benefits (Rate: Total Fringe Benefits [(c) x (d)] Matt Phillips
f) Overhead & G&A (Rate:
$404.75

2. The cost proposal format shall not be amended. Indirect cost rates shall be updated on an annual basis in accordance with the consultant's annual accounting period and established by a cognizant agency or accepted by Caltrans.

3. Anticipated salary increases calculation (page 2) must accompany.

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1. Calculate Average Hourly Rate for 1st year of the contract (Direct Labor Subtotal divided by total hours) Avg Hourly 5 Year Contract
Rate Duration
$2,503.81 = $43.17 Year 1 Avg Hourly Rate
Avg Hourly Rate
Year 1 $43.17 + = $45.33 Year 2 Avg Hourly Rate
Year 2 $45.33 + = $47.59 Year 3 Avg Hourly Rate
Year 3 $47.59 + = $49.97 Year 4 Avg Hourly Rate
Year 4 $49.97 + = $52.47 Year 5 Avg Hourly Rate
Total Hours
per Year
Year 1 20.00% * = 11.6 Estimated Hours Year 1
Year 2 40.00% * = 23.2 Estimated Hours Year 2
Year 3 15.00% * = 8.7 Estimated Hours Year 3
Year 4 15.00% * = 8.7 Estimated Hours Year 4
Year 5 10.00% * = 5.8 Estimated Hours Year 5
Total 100% = 58.0
Year 1 $43.17 * = $500.76 Estimated Hours Year 1
Year 2 $45.33 * = $1,051.60 Estimated Hours Year 2
Year 3 $47.59 * = $414.07 Estimated Hours Year 3
Year 4 $49.97 * = $434.77 Estimated Hours Year 4
Year 5 $52.47 * = $304.34 Estimated Hours Year 5
= $2,705.54
= $2,503.81
= $201.73 Transfer to Page 1
NOTES:

3. This assumes that one year will be worked at the rate on the cost proposal before salary increases are granted.

4. Calculations for anticipated salary escalation must be provided. per Cost Proposal per Cost Proposal

58.00 2. Calculate hourly rate for all years (Increase the Average Hourly Rate for a year by proposed escalation %)

58.0 58.0
Total Hours
EXHIBIT 10-H COST PROPOSAL PAGE 2 OF 3

ACTUAL COST-PLUS-FIXED FEE OR LUMP SUM (FIRM FIXED PRICE) CONTRACTS (CALCULATIONS FOR ANTICIPATED SALARY INCREASES)

58.0 8.7
Total

5.8 8.7
Estimated hours

1. This is not the only way to estimate salary increases. Other methods will be accepted if they clearly indicate the % increase, the # of years of the contract, and a breakdown of the labor to be performed each year.

2. An estimation that is based on direct labor multiplied by salary increase % multiplied by the # of years is not acceptable. (i.e. $250,000 x 2% x 5 yrs = $25,000 is not an acceptable methodology) Direct Labor Subtotal Total Hours
Proposed Escalation
5%
5%
5%
5%

3. Calculate estimated hours per year (Multiply estimate % each year by total hours) Estimated %
Completed Each Year per Cost Proposal

58.0 58.0
(calculated above)

11.6 23.2
Total Direct Labor Cost with Escalation
Direct Labor Subtotal before Escalation
Estimated total of Direct Labor Salary Increase

4. Calculate Total Costs including Escalation (Multiply Average Hourly Rate by the number of hours) Avg Hourly Rate Cost per Year (calculated above)

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1. Generally Accepted Accounting Principles (GAAP)

2. Terms and conditions of the contract
Name: Title*:

Signature: Date of Certification (mm/dd/yyyy): 02/03/2022 Email: Phone Number: (949) 553-0666 Ext. 7268
Address:

Performing bat surveys, preparing mitigation plan, and attending meetings. *An individual executive or financial officer of the consultant’s or subconsultant’s organization at a level no lower than a Vice President or a Chief Financial Officer, or equivalent, who has authority to represent the financial information utilized to establish the cost proposal for the contract. 20 Executive Park, Suite 200, Irvine, CA 92614
President
[email protected]
All costs must be applied consistently and fairly to all contracts. All documentation of compliance must be retained in the project files and be in compliance with applicable federal and state requirements. Costs that are noncompliant with the federal and state requirements are not eligible for reimbursement.

Local governments are responsible for applying only cognizant agency approved or Caltrans accepted Indirect Cost Rate(s).

3. Title 23 United States Code Section 112 - Letting of Contracts

5. 23 Code of Federal Regulations Part 172 - Procurement, Management, and Administration of

6. 48 Code of Federal Regulations Part 9904 - Cost Accounting Standards Board (when applicable) EXHIBIT 10-H1 COST PROPOSAL PAGE 3 OF 3
I, the undersigned, certify to the best of my knowledge and belief that all direct costs identified on the cost proposal(s) in this contract are actual, reasonable, allowable, and allocable to the contract in accordance with the contract terms and the following requirements:

Tony Petros
List services the consultant is providing under the proposed contract:

4. 48 Code of Federal Regulations Part 31 - Contract Cost Principles and Procedures Engineering and Design Related Service
Prime Consultant or Subconsultant Certifying:

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Town Council Agenda Report
Date: May 24, 2022
To: Honorable Mayor and Town Council
Subject: BEAR VALLEY ROAD BRIDGE OVER MOJAVE RIVER
REHABILITATION & WIDENING PROJECT: UTILITY AGREEMENTS
NOS. 2030.011, 2030.012 AND 2030.013.

From: Douglas Robertson, Town Manager
Submitted by: Brad Miller, Town Engineer
Engineering
Budgeted Item: Yes No N/A

RECOMMENDED ACTION
That the Town Council approve Utility Agreements Nos. 2030.011, 2030.012 and 2030.013 with Southern Californa Edison for the Bear Valley Road Bridge over Mojave River Rehabilitation and Widening Project, subject to approval as to form by the Town Attorney and as to content by the Town Manager.

BACKGROUND
In 2014, the Town retained the services of Dokken Engineering for alternative analysis and selection, preliminary design, environmental study, CEQA/NEPA documentation and approval, final design, right of way services, funding assistance, and coordination with various stakeholders.

Utility relocation, in particular the large Southern California Edison (SCE) Transmission lines and towers, and the CSA-64 water mainline, became much bigger components of the project than what had been anticipated early on and, consequently, the project has been split into Phase 1 (grading and water line relocation) that will allow for the SCE relocation and Phase 2 (bridge and roadwork). Phase 1 construction is expected to start in December of 2022 and be completed by May of 2023.

In preparation for the commencement of the SCE relocation phase, three Utility Agreements have been prepared between the Town of Apple Valley and SCE, and approved by Caltrans, to formalize the relocation funding commitments between the two parties. The three Utility Agreements include a split of 50% funding from SCE and another 50% from the Town (Local Agency). The Town’s share will be covered by HBP grant (88.53%) and the remaining funds (11.47%) will come from a combination of Local Measure I and Traffic Impact Fees.

Page 69 of 325 ends

ANALYSIS
The relocation work, and its respective cost, is covered in the three Utility Agreements.

The estimated total amount necessary for the SCE relocation is $1,224,000.00 and the costs are shared as follows:
 UA 2030.011 (Transmisson):
o SCE $ 572,500.00 (50%)
o Local Agency: (50%)
 HBP $ 506,834.25
 Town $ 65,665.75
 UA 2030.012 (Distribution):
o SCE $ 34,000.00 (50%)
o Local Agency: (50%)
 HBP $ 30,100.20
 Town $ 3,899.80
 UA 2030.013 (Telecom)
o SCE $ 5,500.00 (50%)
o Local Agency: (50%)
 HBP $ 4,869.15
 Town $ 630.85
Estimated Total $1,224,000.00

FISCAL IMPACT
The total estimated amount for the project’s SCE relocation work is $1,224,000.00. SCE’s share is $612,000.00. HBP’s share is $541,803.60 (88.53% of the Town’s eligible expenses). The Town’s share will be paid from a combination of TIF and Local Measure I totaling $70,196.40. These amounts are reflected in the budget for FY 22/23.

ATTACHMENTS
This is for attachments, if your report does not have attachments then delete this heading.

If you do have attachments please number them:

A. Vicinity map.

B. Utility Agreements Nos. 2030.011, 2030.012 and 2030.013 for the Bear Valley Road Bridge over Mojave River Rehabilitation & Widening Project.

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Council Meeting Date: May 24, 2022 X-3

1. Vicinity Map.

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Town Council Agenda Report
Date: May 24, 2022
To: Honorable Mayor and Town Council
Subject: APPROVE AMENDMENT FOR CONSTRUCTION SUPPORT

SERVICES FOR THE JESS RANCH LIFT STATION PROJECT

From: Douglas Robertson, Town Manager
Submitted by: Guy Eisenbrey, Interim Director of Public Works Public Works
Budgeted Item: Yes No N/A

RECOMMENDED ACTION
Approve an Amendment to the Professional Services Agreement with Lee + Ro for additional construction support services for the Jess Ranch Lift Station Upgrade project, subject to “Approval as to Form” by the Town Attorney and “Approval as to Content” by the Town Manager.

BACKGROUND
The existing Jess Ranch lift station was constructed to primarily service the Jess Ranch residential community to the south which is directly adjacent to the Mojave River. Since that time, the community has grown significantly with additional residential communities to the south and an expansive retail district to the north. Future development in the area west of Deep Creek Road will also be serviced by this lift station. Additional projects in the area have been proposed and conditionally approved requiring an upgraded lift station to adequately service the area when fully developed.

ANALYSIS
On October 13, 2020, the Town entered into an Agreement with Lee + Ro to conduct a feasibility study followed by the preparation of Plans, Specifications, and Engineer’s Estimate for the subject project. Lee + Ro completed the bid documents and construction of the project was awarded on February 22, 2022, to Canyon Springs Enterprises (formerly RSH Construction). The project is estimated to be completed by December, 2022. The contract amendment will authorize Lee + Ro to conduct

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additional Construction Supervison and inspection services which are essential to the success of the project.

The initial agreement for Lee + Ro was $111,316.00 which included the feasibility study and initial design. An Amendment for additional design services increased the cost by $28,688.00. As the project entered the bidding and construction phase, a second Amendment was issued for $65,896.00 for support and milestone inspection services.

Due to the complexity of the project, staff has determined that additional full-time specialized inspection is essential. The proposed Addendum will cover all inspection services which will be performed by Lee + Ro. The total not to exceed amount of this Amendment is $175,298.00 which will increase Purchase Order No. 2021-000029 to $381,198.00.

FISCAL IMPACT
Funding for this project has been appropriated in the adopted FY 2021-2022 budget (5010-4210-9300) using a 98-1 Sewer Assessment District Bond for the Jess Ranch Community.

ATTACHMENTS
A. Project Location.

B. Proposal from Lee + Ro.

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PROJECT LOCATION

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Town Council Agenda Report
Date: May 12, 2022
To: Honorable Mayor and Town Council
Subject: APPROVE CALIFORNIA CHOICE ENERGY AUTHORITY ENTERING

INTO A LONG-TERM RESOURCE ADEQUACY AGREEMENT WITH
SANTA PAULA ENERGY STORAGE, LLC. ON BEHALF OF APPLE

VALLEY CHOICE ENERGY

From: Douglas Robertson, Town Manager
Submitted by: Guy Eisenbrey, Interim Director fo Public Works Public Works
Budgeted Item: Yes No N/A

RECOMMENDED ACTION
Approve California Choice Energy Authority Entering into a Long-Term Resource Adequacy Agreement with Santa Paula Energy Storage, LLC on behalf of Apple Valley Choice Energy.

SUMMARY
Apple Valley Choice Energy (AVCE) is required to meet certain state-mandated obligations, including those required by the California Public Utilities Commission (CPUC). To meet the requirements of the Mid-Term Reliability Order, California Choice Energy Authority joined with Desert Community Energy and Clean Energy Alliance to enter into a Long-Term Resource Adequacy Agreement.

BACKGROUND
On August 9, 2016, Town Council adopted Ordinance No. 486 Establishing the Apple Valley Community Choice Aggregation (CCA) Program, Apple Valley Choice Energy (AVCE). AVCE began serving customers in April 2017. As a CCA, AVCE is required to meet certain state-mandated obligations, including those required by the CPUC’s MidTerm Reliability Order.

In June 2021, the CPUC adopted Decision 21-06-035 (Mid-Term Reliability Order) or MTR. The MTR Order seeks to ensure that there are sufficient resources available to

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ensure grid reliability and to meet the state’s greenhouse gas emission reduction goals for the electricity sector and imposes procurement requirements on all load-serving entities (LSEs), including CCAs.

The MTR orders the procurement of 11,500 MW of new generation resources to come online in the years 2023-2026, with all the resources coming from zero-emitting sources on non-fossil fuel resources. AVCE’s MTR requirement for the four-year period is 16 MW.

All LSEs must contract for clean resources, such as renewable energy, stand-alone battery storage, renewable energy plus battery storage, and demand response.

Contracts must be for ten years or greater from the initial project delivery to the end of the term.

To meet the requirements of the Mid-Term Reliability Order, California Choice Energy Authority (CalChoice) joined with Desert Community Energy and Clean Energy Alliance to issue a joint Request for Proposals for MTR projects in January 2022. Over 100 unique offers from 22 developers were received. Additionally, CalChoice on behalf of AVCE and its other member agencies continues to seek out projects that meet the MTR requirements and engage in bilateral negotiations.

CalChoice and its legal and technical team have negotiated an agreement with developer esVolta for the Santa Paula Energy Storage, LLC project (Santa Paula Energy Storage).

The project is for stand-alone battery storage located in Santa Paula, California with a commercial delivery date of August 2023.

As a condition of the agreement, Santa Paula Energy Storage recognizes and accepts the secured deposit account in the name of the Town of Apple Valley (Town) as credit and collateral, and no other security or credit backing by the Town will be required. Upon approval by the Town and CalChoice, Santa Paula Energy Storage will execute a joiner to the Intercreditor and Collateral Agency Agreement, ensuring the protection of the Town’s General Fund.

The agreement does not fulfill the entire MTR requirement; therefore, staff will be returning in the upcoming months with additional contract approval requests.

FISCAL IMPACT
Not to exceed $126,000 annually to begin August 2023 for a period of up to ten years and five months. The total not-to-exceed amount of the agreement is $1,312,500. There will be sufficient revenues generated to cover operating expenses, including power procurement, and to fund reserves to provide financial and rate stability to the program.

ATTACHMENTS
Power purchase agreement.

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Proposed Execution Version

IN FRONT OF THE METER

ENERGY STORAGE RESOURCE ADEQUACY AGREEMENT

COVER SHEET
Seller: Santa Paula Energy Storage, LLC, a Delaware limited liability company Buyer: California Choice Energy Authority, a California joint powers authority, on behalf of Town of Apple Valley, California (d/b/a Apple Valley Choice Energy) Description of Project: Santa Paula Energy Storage
Contract Amounts:

RA Attributes: 2 MW NQC
Local RA Attributes: 2 MW
Flexible RA Attributes: 4 MW EFC, Category 3
Payment Quantity: 2 MW
Contract Price: $5,250.00/MW
Milestones:

Milestone Date
Interconnection Agreement Executed
Site Control Completed
Construction Start Completed
Commercial Operation Deadline October 15, 2023
Expected Initial Delivery Date January 1, 2024
Delivery Term: 10 Contract Years

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TABLE OF CONTENTS
ARTICLE 1: DEFINITIONS..........................................................................................................1

1.1 Contract Definitions.................................................................................................1

1.2 Rules of Interpretation ...........................................................................................17 ARTICLE 2: TERM .....................................................................................................................19

2.1 Effectiveness..........................................................................................................19

2.2 Term.......................................................................................................................19 ARTICLE 3: PROJECT DEVELOPMENT.................................................................................19

3.1 Project Construction...............................................................................................19

3.2 Interconnection ......................................................................................................20

3.3 Metering.................................................................................................................20

3.4 Progress Reports ....................................................................................................20

3.5 Remedial Action Plans...........................................................................................20

3.6 Standalone Energy Storage Incentives...................................................................20 ARTICLE 4: INITIAL DELIVERY DATE .................................................................................21

4.1 Timing of the Initial Delivery Date .......................................................................21

4.2 Conditions Precedent to the Initial Delivery Date .................................................21

4.3 Cooperation in Connection with Initial Delivery Date ..........................................23

4.4 Confirmation of Initial Delivery Date....................................................................23 ARTICLE 5: TRANSACTION ....................................................................................................23

5.1 Product ...................................................................................................................23

5.2 Purchase and Sale Obligation ................................................................................24

5.3 Allocation of CAISO Payments and Costs............................................................25 ARTICLE 6: OPERATIONS........................................................................................................25

6.1 Operations..............................................................................................................25

6.2 Charging Energy ....................................................................................................25

6.3 Standard of Care ....................................................................................................25

6.4 Buyer’s Compliance Obligations; Certification of Product...................................25

6.5 Scheduling..............................................................................................................26

6.6 Information Sharing and Shared Learning.............................................................26

6.7 Changes in Law......................................................................................................27 ARTICLE 7: EVENTS OF DEFAULT; REMEDIES..................................................................28

7.1 Events of Default ...................................................................................................28

7.2 Remedies; Declaration of Early Termination Date................................................30

7.3 Termination Payment.............................................................................................30

7.4 Notice of Payment of Termination Payment .........................................................31

7.5 Disputes with Respect to Termination Payment....................................................31

7.6 Rights and Remedies Are Cumulative...................................................................31

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ARTICLE 8: FORCE MAJEURE ................................................................................................31

8.1 Force Majeure ........................................................................................................31 ARTICLE 9: INVOICING AND PAYMENT .............................................................................32

9.1 Invoicing ................................................................................................................32

9.2 Payment..................................................................................................................33

9.3 Payment Adjustments; Billing Errors....................................................................33

9.4 Billing Disputes .....................................................................................................33

9.5 Netting of Payments...............................................................................................33 ARTICLE 10: PERFORMANCE ASSURANCE ........................................................................34

10.1 Seller’s Development Security ..............................................................................34

10.2 Seller’s Delivery Term Security ............................................................................34

10.3 First Priority Security Interest in Cash or Cash Equivalent Collateral ..................34

10.4 Seller Financial Information ..................................................................................35

10.5 Buyer Credit Support .............................................................................................35 ARTICLE 11: SAFETY ...............................................................................................................37

11.1 Safety .....................................................................................................................37

11.2 Reporting Serious Incidents...................................................................................38

11.3 Remediation ...........................................................................................................38 ARTICLE 12: TAXES..................................................................................................................38

12.1 Taxes......................................................................................................................38

12.2 Cooperation............................................................................................................38 ARTICLE 13: LIMITATIONS.....................................................................................................38

13.1 No Consequential Damages...................................................................................38

13.2 Waiver and Exclusion of Other Damages..............................................................39 ARTICLE 14: REPRESENTATIONS; WARRANTIES; COVENANTS...................................40

14.1 Seller’s Representations and Warranties ...............................................................40

14.2 Buyer’s Representations and Warranties...............................................................41

14.3 General Covenants.................................................................................................42

14.4 Covenants of Seller................................................................................................42 ARTICLE 15: INDEMNITIES.....................................................................................................43

15.1 Indemnity by Seller................................................................................................43

15.2 Notice of Claim......................................................................................................43

15.3 Defense of Claims..................................................................................................43

15.4 Subrogation of Rights............................................................................................44

15.5 Rights and Remedies are Cumulative....................................................................44 ARTICLE 16: INSURANCE........................................................................................................44

16.1 Insurance ................................................................................................................44

16.2 Evidence of Insurance............................................................................................46

16.3 Failure to Comply ..................................................................................................46

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ARTICLE 17: RECORDS AND AUDIT RIGHTS......................................................................46

17.1 Operations Logs.....................................................................................................46

17.2 Records and Audit..................................................................................................46

17.3 General Audit Right...............................................................................................46

17.4 State Auditor..........................................................................................................46

17.5 Data Request Cooperation .....................................................................................46

17.6 Access Rights.........................................................................................................47 ARTICLE 18: ASSIGNMENT.....................................................................................................47

18.1 General Prohibition on Assignments.....................................................................47

18.2 Collateral Assignment............................................................................................47

18.3 Permitted Assignment by Seller.............................................................................47

18.4 Permitted Assignment by Buyer............................................................................47

18.5 Unauthorized Assignment; Costs...........................................................................48 ARTICLE 19: DISPUTE RESOLUTION....................................................................................48

19.1 Governing Law ......................................................................................................48

19.2 Dispute Resolution.................................................................................................48 ARTICLE 20: CONFIDENTIAL INFORMATION ....................................................................49

20.1 Confidential Information .......................................................................................49

20.2 Permitted Disclosures ............................................................................................49

20.3 Remedies................................................................................................................49 ARTICLE 21: GENERAL PROVISIONS ...................................................................................50

21.1 Entire Agreement; Integration; Exhibits................................................................50

21.2 Amendments..........................................................................................................50

21.3 Survival..................................................................................................................50

21.4 Waivers..................................................................................................................50

21.5 No Agency, Partnership, Joint Venture or Lease...................................................50

21.6 Severability ............................................................................................................50

21.7 Mobile Sierra .........................................................................................................51

21.8 Counterparts...........................................................................................................51

21.9 Electronic Delivery ................................................................................................51

21.10 No Recourse to Members of Buyer .......................................................................51

21.11 Lockbox Account...................................................................................................51

21.12 Forward Contract ...................................................................................................51

21.13 Further Assurances.................................................................................................52 ARTICLE 22: NOTICES..............................................................................................................52

22.1 Addresses for the Delivery of Notices...................................................................52

22.2 Time of Delivery....................................................................................................52

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APPENDICES
Appendix I – Description of Project & Units ..............................................................................I-1 Appendix II –Operational Characteristics ...................................................................................II-1 Appendix III – Progress Reporting Form .................................................................................. III-1 Appendix IV – Certification for Commercial Operation...........................................................IV-1 Appendix V-A – Form of Letter of Credit..............................................................................V-A-1 Appendix V-B – Form of Guaranty........................................................................................ V-B-1 Appendix VI – Project Safety Plan and Documentation ...........................................................VI-1 Appendix VII – MUA Decision Attestation .............................................................................VII-1 Appendix VIII – Notices......................................................................................................... VIII-1 Appendix IX – Approved Contractors.......................................................................................IX-1 Appendix X – Not Used.............................................................................................................. X-1 Appendix XI – Not Used ...........................................................................................................XI-1 Appendix XII – Workforce Development and Community Investment Obligations...............XII-1

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1 Energy Storage Resource Adequacy Agreement Form

ENERGY STORAGE RESOURCE ADEQUACY AGREEMENT
This Energy Storage Resource Adequacy Agreement (“Agreement”) is made by and between the buyer (“Buyer”) and the seller (“Seller”) as of May 24, 2022 (“Effective Date”), in each case as set forth on the cover sheet (“Cover Sheet”) to this Agreement. Seller and Buyer are referred to each individually as a “Party” and collectively as the “Parties.”

RECITALS
WHEREAS, Seller intends to develop, design, permit, construct, own, and operate the Project; and
WHEREAS, Seller desires to sell, and Buyer desires to purchase, on the terms and conditions set forth in this Agreement, the Product;
NOW THEREFORE, in consideration of the mutual covenants and agreements herein contained, and for other good and valuable consideration, the sufficiency and adequacy of which are hereby acknowledged, the Parties agree to the following:

ARTICLE 1: DEFINITIONS

1.1 Contract Definitions. Capitalized terms used in this Agreement have the following meanings, unless otherwise specified:
“Affiliate” of a Person means any other Person that (a) directly or indirectly controls the specified Person; (b) is controlled by or is under direct or indirect common control with the specified Person; or (c) is an officer, director, employee, representative or agent of the Person. For the purposes of this definition, “control”, when used with respect to any specified Person, means the power to direct the management or policies of the specified Person, directly or indirectly, through one or more intermediaries.
“Agreement” has the meaning set forth in the preamble.
“Ancillary Services” has the meaning set forth in the CAISO Tariff. “Availability Incentive Payments” has the meaning set forth in the CAISO Tariff. “Availability Standards” has the meaning set forth in the CAISO Tariff. “Balancing Authority” has the meaning set forth in the CAISO Tariff. “Bankrupt” means with respect to any entity, such entity that (a) files a petition or otherwise commences, authorizes or acquiesces in the commencement of a proceeding or cause of action under any bankruptcy, insolvency, reorganization or similar Law, (b) has any such petition filed or commenced against it which remains unstayed or undismissed for a period of ninety (90) days, (c) makes an assignment or any general arrangement for the benefit of creditors, (d) otherwise becomes bankrupt or insolvent (however evidenced), (e) has a liquidator, administrator,

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2 Energy Storage Resource Adequacy Agreement Form
receiver, trustee, conservator or similar official appointed with respect to it or any substantial portion of its property or assets, or (f) is generally unable to pay its debts as they fall due. “Bid” has the meaning set forth in the CAISO Tariff.
“Business Day” means any day except a Saturday, Sunday, or a Federal Reserve Bank holiday in California.
“Buyer” has the meaning set forth in the preamble to this Agreement. “Buyer Group” has the meaning set forth in Section 15.1(a). “Buyer’s Event of Default” means a Party’s Event of Default where Buyer is the Defaulting Party.
“CAISO” means the California Independent System Operator Corporation or any successor entity performing similar functions.
“CAISO Grid” means the system of transmission lines and associated facilities of the Participating Transmission Owners that have been placed under the CAISO’s operational control. “CAISO Markets” has the meaning set forth in the CAISO Tariff. “CAISO Tariff” means the CAISO Fifth Replacement FERC Electric Tariff and protocol provisions, including any CAISO-published procedures or business practice manuals, as they may be amended, supplemented or replaced (in whole or in part) from time to time. “California State Auditor” means the auditor that may audit Seller in accordance with Section 17.4.
“Capacity Adjustment Date” has the meaning set forth in Section 6.7(a). “Capacity Attributes” means, any and all of the following attributes of the Project that may be counted toward Compliance Obligations:
(a) RA Attributes,
(b) Local RA Attributes,
(c) Flexible RA Attributes, and
(d) Other Capacity Attributes.
“CARB” means the California Air Resources Board or any successor entity performing similar functions.
“CEC” means the California Energy Commission or any successor entity performing similar functions.

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3 Energy Storage Resource Adequacy Agreement Form
“CEQA” means the California Environmental Quality Act of 1970. “Change Notice” has the meaning set forth in Section 6.7(a). “Change of Control” means any circumstance in which esVolta, LP ceases to own, directly or indirectly through one or more intermediate entities, more than fifty percent (50%) of the outstanding equity interests in Seller; provided that in calculating ownership percentages for all purposes of the foregoing clause:
(a) any ownership interest in Seller held by esVolta, LP indirectly through one or more intermediate entities shall not be counted towards esVolta, LP’s ownership interest in Seller unless esVolta, LP directly or indirectly owns more than fifty percent (50%) of the outstanding equity interests in each such intermediate entity; and (b) ownership interests in Seller owned directly or indirectly by any Lender (including any tax equity provider) shall be excluded from the total outstanding equity interests in Seller.
“Charging Energy” means the amount of Energy withdrawn from the Utility Distribution Company’s electrical system, Participating Transmission Owner’s electrical system, the CAISO Grid, or otherwise, to be stored by the Project.
“Claims” has the meaning set forth in Section 15.1(a).
“Collateral Agent” has the meaning set forth in the Security Agreement. “Collateral Assignment Agreement” has the meaning set forth in Section 18.2(b). “Commercial Operation Date” means the date stated in Seller’s Notice, substantially in the form of Appendix IV, upon which the Project became Commercially Operable. “Commercial Operation Deadline” means the date that is seventy-five (75) days before the Expected Initial Delivery Date, as set forth on the Cover Sheet. “Commercial Operation Milestone” means the Project becoming Commercially Operable on or before the Commercial Operation Deadline. “Commercially Operable” with respect to the Project, is a condition occurring after such time as Mechanical Completion has occurred, commissioning is complete, the Project has been released by the EPC Contractor to Seller for commercial operations, and permission to operate has been formally obtained from the applicable transmission or distribution utility. “Compliance Actions” means actions to comply with Seller’s obligations under the Agreement with respect to obtaining, maintaining, conveying or effectuating Buyer’s use of all of the Capacity Attributes and Resource Adequacy associated with the Project in order for Buyer to meet its Compliance Obligations at levels equal to the Contract Amount, which may include making physical modification to the design of the Project.

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4 Energy Storage Resource Adequacy Agreement Form
“Compliance Obligations” means the RAR, Local RAR, Flexible RAR, and any other resource adequacy or capacity procurement requirements imposed on Load Serving Entities (as defined in the CAISO Tariff) by the CPUC pursuant to the CPUC Decisions, by the CAISO, by the WECC, or by any other Governmental Authority having jurisdiction. “Compliance Showings” means the total combination of (a) through (d) below that a Load Serving Entity (as defined in the CAISO Tariff) is required to make to the CPUC pursuant to the CPUC Decisions, or to any Governmental Authority having jurisdiction: (a) Local RAR compliance or advisory showings (or similar or successor showings), (b) RAR compliance or advisory showings (or similar or successor showings), (c) Flexible RAR compliance or advisory showings (or similar or successor showings), and (d) other Capacity Attributes compliance or advisory showings (or similar or successor showings).
“Conditions Precedent” has the meaning set forth in Section 4.2. “Confidential Information” has the meaning set forth in Section 20.1. “Confirmation Notice” has the meaning set forth in Section 6.7(a). “Contract Amounts” has the meaning set forth in Section 5.2(a). “Contract Price” means the amount specified in Section 5.2(d). “Contract Year” means a period of twelve (12) consecutive months; the first Contract Year shall commence on the Initial Delivery Date; and each subsequent Contract Year shall commence on the anniversary of the Initial Delivery Date. The final Contract Year may be a period of less than twelve (12) consecutive months.
“Contractor” means the EPC Contractor and its subcontractors, as well as Seller or Seller’s Affiliates if any such entities are developing, constructing, operating or maintaining the Project during the Term, and any Person under contract with Seller or Seller’s Affiliates for the purpose of developing, constructing, operating or maintaining the Project during the Term. “Costs” means, with respect to the Non-Defaulting Party, brokerage fees, commissions and other similar third party transaction costs and expenses reasonably incurred by such Party either in terminating any arrangement pursuant to which it has hedged its obligations or entering into new arrangements that replace this Agreement; and all reasonable attorneys’ fees and expenses incurred by the Non-Defaulting Party in connection with the termination of this Agreement. “Cover Sheet” has the meaning set forth in the preamble to this Agreement. “CPM” means “Capacity Procurement Mechanism” and has the meaning set forth in the CAISO Tariff and is inclusive of any successor mechanisms authorized by CAISO. “CPM Capacity” has the meaning set forth in the CAISO Tariff. “CPUC” or “Commission” means the California Public Utilities Commission or any successor entity performing similar functions.

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“CPUC Decisions” means CPUC Decisions 04-01-050, 04-10-035, 05-10-042, 06-04-040, 06-06-064, 06-07-031, 07-06-029, 08-06-031, 09-06-028, 10-06-036, 11-06-022, 12-06-025, 13- 06-024, 14-06-050, and any other existing or subsequent decisions, resolutions or rulings related to resource adequacy, as may be amended from time to time by the CPUC. “CPUC General Order No. 167” issued by the CPUC directs the implementation and enforcement of standards for the maintenance and operation of electric generating facilities and power plants and can be found at the link below:
http://docs.cpuc.ca.gov/PUBLISHED/GENERAL_ORDER/108114.htm “Credit Rating” means, with respect to any entity, the rating then assigned to such entity’s unsecured, senior long-term debt obligations (not supported by third party credit enhancements) or if such entity does not have a rating for its senior unsecured long-term debt, then the rating then assigned to such entity as an issuer rating by S&P or Moody’s. If ratings by S&P and Moody’s are not equivalent, the lower rating shall apply.
“Damage Payment” means the dollar amount equal to the total amount required to be posted by Seller as Development Security pursuant to Section 10.1. “Defaulting Party” means the Party that is subject to an Event of Default. “Delay Notice” has the meaning set forth in Section 4.1(c)(i). “Delivered Quantities” has the meaning set forth in Section 5.2(c). “Delivery Term” has the meaning set forth in Section 2.2(b). “Delivery Term Security” means (i) cash in an amount equal to forty dollars ($40.00) per kilowatt of the Payment Quantity, (ii) Guaranty in an amount equal to forty dollars ($40.00) per kilowatt of the Payment Quantity, or (iii) a Letter of Credit in an amount equal to forty dollars ($40.00) per kilowatt of the Payment Quantity.
“Development Security” means (i) cash or (ii) a Letter of Credit in an amount equal to forty dollars ($40.00) per kilowatt of the Payment Quantity. “Disclosing Party” has the meaning set forth in Section 20.2. “Disclosure Order” has the meaning set forth in Section 20.2(a). “Disclosure Request” has the meaning set forth in Section 20.2(b). “Early Termination Date” has the meaning set forth in Section 7.2(a). “EFC” or “Effective Flexible Capacity” has the meaning given to “Effective Flexible Capacity” in the CAISO Tariff.
“Effective Date” has the meaning set forth in the preamble.

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“Electric System Upgrades” means any upgrades, including, Network Upgrades, Distribution Upgrades, or Interconnection Facilities (as these terms are defined in the CAISO Tariff), that are determined to be necessary by the CAISO, Participating TO, or Utility Distribution Company as applicable, to physically and electrically interconnect the Project to the Utility Distribution Company’s/Participating TO’s electric system for delivery of Energy from the Project such that the Project can provide Product at all times during the Delivery Term. “Energy” means three-phase, 60-cycle alternating current electric energy, measured in MWhs.
“Environmental Costs” means costs incurred in connection with acquiring and maintaining all environmental permits and licenses for the Product, and the Product’s and Project’s compliance with all applicable environmental Laws, rules and regulations, including capital costs for pollution mitigation or installation of emissions control equipment required to permit or license the Product or Project, all operating and maintenance costs for operation of pollution mitigation or control equipment, costs of permit maintenance fees and emission fees as applicable, and the costs of all emission reduction credits, marketable emission trading credits, and any costs related to greenhouse gas emissions, required by any applicable environmental Laws, rules, regulations, and permits to operate, and costs associated with the disposal and clean-up of hazardous substances introduced to a Site or the Project.
“EPC Contract” means the Seller’s engineering, procurement and construction contract with the EPC Contractor.
“EPC Contractor” means Seller’s engineering, procurement and construction contractor or such Person performing those functions.
“Event of Default” means a Seller’s Event of Default, Buyer’s Event of Default or a Party’s Event of Default.
“Exigent Circumstance” means actual or imminent harm to life or safety, public health, third-party owned property, including a Site, or the environment due to or arising from the Project or portion thereof.
“Expected Initial Delivery Date” means the expected initial delivery date set forth on the Cover Sheet.
“FERC” means the Federal Energy Regulatory Commission or any successor entity performing similar functions.
“Flexible RA Attributes” means any and all flexible resource adequacy attributes, as may be identified at any time during the Delivery Term by the CPUC, CAISO or other Governmental Authority having jurisdiction that can be counted toward Flexible RAR, exclusive of any RA Attributes, Local RA Attributes, or Other Capacity Attributes. “Flexible RAR” means the flexible resource adequacy requirements established for Load Serving Entities (as defined in the CAISO Tariff) by the CPUC pursuant to the CPUC Decisions, or by any other Governmental Authority having jurisdiction.

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“Force Majeure” means any event or circumstance which wholly or partly prevents or delays the performance of any material obligation arising under this Agreement, but only if and to the extent (x) such event is not within the reasonable control, directly or indirectly, of the Party seeking to have its performance obligation excused thereby, (y) the Party seeking to have its performance obligation excused thereby has taken all reasonable precautions and measures in order to prevent or avoid such event or mitigate the effect of such event on such Party’s ability to perform its obligations under this Agreement and which by the exercise of due diligence such Party could not reasonably have been expected to avoid and which by the exercise of due diligence it has been unable to overcome, and (z) such event is not the direct or indirect result of the negligence or the failure of, or caused by, the Party seeking to have its performance obligations excused thereby. Additionally:
(a) Force Majeure may include:
(i) acts of God, including landslide, lightning, earthquake, storm, hurricane, flood, drought, tornado, or other natural disasters and weather related events affecting an entire region which caused failure of performance;
(ii) interruptions to supply or transportation delays or accidents affecting delivery of equipment caused by an event that would otherwise satisfy the definition of a Force Majeure event as defined above;
(iii) sabotage, riot, acts of terrorism, war and acts of public enemy, epidemics, pandemics and quarantines; or
(v) restraint by court order or other Governmental Authority. (b) Force Majeure does not include:
(i) a failure of performance of any third party, including Participating TO, Utility Distribution Company, or any other party providing electric interconnection, distribution or transmission service (except to the extent that such failure was caused by an event that would otherwise satisfy the definition of a Force Majeure event as defined above); (ii) breakage or malfunction of equipment (except to the extent that such failure was caused by an event that would otherwise satisfy the definition of a Force Majeure event as defined above);
(iii) a strike, work stoppage or labor dispute limited only to any one or more of Seller, Seller’s Affiliates, the EPC Contractor or subcontractors thereof or any other third party employed by Seller to work on the Project;
(iv) Seller’s ability to sell the Product at a price greater than the price set forth in this Agreement or Buyer’s ability to purchase the Product at a price lower than the price set forth in this Agreement;

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(v) Seller’s inability to obtain permits or approvals of any type for the operation or maintenance of the Project, unless caused solely by an event of Force Majeure of the specific type described in any of subsections (a)(i) through (a)(iv) above; (vi) Seller’s inability to complete interconnection by the Expected Initial Delivery Date, unless such delay is caused solely by an event of Force Majeure of the specific type described in any of subsections (a)(i) through (a)(iv) above; (vii) Seller’s inability to obtain sufficient Charging Energy, fuel, power or materials to operate the Project, except if Seller’s inability to obtain sufficient Charging Energy, fuel, power or materials is caused solely by an event of Force Majeure of the specific type described in any of subsections (a)(i) through (a)(iv) above; or (viii) Seller’s failure to obtain additional funds, including funds authorized by a state or the federal government or agencies thereof, to supplement the payments made by Buyer pursuant to this Agreement.
“Force Majeure Failure” has the meaning set forth in Section 8.1(d). “Gains” means, with respect to any Party, an amount equal to the present value of the economic benefit to it, if any (exclusive of Costs), resulting from the termination of this Agreement. Factors used in determining the economic benefit to a Party may include, without limitation, reference to information supplied by one or more third parties, which shall exclude Affiliates of the Non-Defaulting Party, including without limitation, quotations (either firm or indicative) of relevant rates, prices, yields, yield curves, volatilities, spreads or other relevant market data in the relevant markets, comparable transactions, forward price curves based on economic analysis of the relevant markets, settlement prices for comparable transactions at liquid trading hubs, all of which should be calculated for the remaining Delivery Term to determine the value of the Product.
“Generally Accepted Accounting Principles” means the standards for accounting and preparation of financial statements established by the Federal Accounting Standards Advisory Board (or its successor agency) or any successor standards adopted pursuant to relevant SEC rule. “Governmental Approval” means all authorizations, consents, approvals, waivers, exceptions, variances, filings, permits, orders, licenses, exemptions, notices to and declarations of or with any Governmental Authority and shall include those siting and operating permits and licenses, and any of the foregoing under any applicable environmental Law, that are required for the development, use and operation of the Project, including any approvals required under the CEQA.
“Governmental Authority” means any federal, state, provincial, local or municipal government, any political subdivision thereof or any other governmental, congressional or parliamentary, regulatory, or judicial instrumentality, authority, body, agency, department, bureau, or entity with authority to bind a Party at law, including CAISO; provided, however, that “Governmental Authority” shall not in any event include any Party.

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“Guarantor” means a Person having a Credit Rating of at least A- with an outlook designation of “stable” from S&P or A3 with an outlook designation of “stable” from Moody’s. “Guaranty” means a guaranty issued by a Guarantor in the form and substance set forth in Appendix V-B or as otherwise deemed acceptable by Buyer. “Hazardous Substance” means, collectively, (a) any chemical, material or substance that is listed or regulated under applicable Laws as a “hazardous” or “toxic” substance or waste, or as a “contaminant” or “pollutant” or words of similar import, (b) any petroleum or petroleum products, flammable materials, explosives, radioactive materials, asbestos, urea formaldehyde foam insulation, and transformers or other equipment that contain polychlorinated biphenyls, and (c) any other chemical or other material or substance, exposure to which is prohibited, limited or regulated by any Laws.
“IDD Cure Period” has the meaning set forth in Section 4.1(c)(i). “IDD Delay Damages” means liquidated damages in an amount equal to (a) the total Development Security amount required hereunder, divided by (b) one hundred eighty (180). “Indemnifiable Loss(es)” has the meaning set forth in Section 15.1(a). “Initial Delivery Date” has the meaning set forth in Section 2.2(b). “Interconnection Agreement” means the agreement(s) and associated documents (or any successor agreement and associated documentation approved by FERC or the CPUC) by and among Seller and, as applicable, the Utility Distribution Company, the Participating Transmission Owner, and the CAISO, governing the terms and conditions of the interconnection of the Project with the Utility Distribution Company’s or CAISO’s grid, including any description of the plan for interconnecting the Project to the applicable grid. “Intercreditor and Collateral Agency Agreement” means that certain Intercreditor and Collateral Agency Agreement, dated as of April 3, 2020, by and among River City Bank, as Collateral Agent, the Secured Creditors from time to time party thereto, and Member. “Interest Rate” has the meaning set forth in Section 9.2. “Joinder” has the meaning set forth in the Intercreditor and Collateral Agency Agreement. “Joint Powers Act” means the Joint Exercise of Powers Act of the State of California (Government Code Section 6500 et seq.).
“Joint Powers Agreement” means that certain Joint Powers Agreement dated August 12, 2012, as amended, under which Buyer is organized as a Joint Powers Authority in accordance with the Joint Powers Act.
“Law” means any statute, law, treaty, rule, regulation, ordinance, code, Permit, enactment, injunction, order, writ, decision, authorization, judgment, decree or other legal or regulatory determination or restriction by a court or Governmental Authority of competent jurisdiction,

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including any of the foregoing that are enacted, amended, or issued after the Effective Date, and which become effective during the Term; or any binding interpretation of the foregoing. “Lender” means, collectively, any Person (i) providing senior or subordinated construction, interim, back leverage or long-term debt, equity or tax equity financing or refinancing for or in connection with the development, construction, purchase, installation or operation of the Project, whether that financing or refinancing takes the form of private debt (including back-leverage debt), equity (including tax equity), public debt or any other form (including financing or refinancing provided to a member or other direct or indirect owner of Seller), including any equity or tax equity investor directly or indirectly providing financing or refinancing for the Project or purchasing equity ownership interests of Seller or its Affiliates for purposes of providing financing or refinancing for the Project, and any trustee or agent or similar representative acting on their behalf, (ii) providing interest rate or commodity protection under an agreement hedging or otherwise mitigating the cost of any of the foregoing obligations or (iii) participating in a lease financing (including a sale leaseback or leveraged leasing structure) with respect to the Project.
“Letter of Credit” means one or more irrevocable, standby letters of credit issued by a U.S. commercial bank or a foreign bank with a U.S. branch with such bank having a Credit Rating of at least A- with an outlook designation of “stable” from S&P or A3 with an outlook designation of “stable” from Moody’s, in a form substantially similar to the letter of credit set forth in Appendix V-A.
“LIBOR” means the London Interbank Offered Rate for the corresponding deposits of U.S. dollars.
“Licensed Professional Engineer” means a person acceptable to Buyer in its reasonable judgment who (a) is licensed to practice engineering in California in accordance with applicable Law including Cal. Bus. & Prof. Code §§ 6700 et seq., (b) has training and experience in the power industry specific to the technology of the Project, (c) has no economic or familial relationship, association, or nexus with Seller or Buyer, other than to meet the obligations of Seller pursuant to this Agreement, (d) is not a representative of a consultant, engineer, contractor, designer or other individual involved in the development of the Project or of a manufacturer or supplier of any equipment installed at the Project, and (e) is licensed in an appropriate engineering discipline for the required certification being made.
“Local Capacity Area” has the meaning set forth in the CAISO Tariff. “Local RA Attributes” means any and all resource adequacy attributes or other locational attributes related to a Local Capacity Area, as may be identified at any time during the Delivery Term by the CPUC, CAISO or other Governmental Authority having jurisdiction, associated with a physical location or point of electrical interconnection within the CAISO’s Balancing Authority, that can be counted toward a Local RAR.
“Local RAR” means the local resource adequacy requirements established for Load Serving Entities (as defined in the CAISO Tariff) by the CPUC pursuant to CPUC Decisions, or by any other Governmental Authority having jurisdiction. Local RAR may also be known as local

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area reliability, local resource adequacy, local resource adequacy procurement requirements, or local capacity requirement in other regulatory proceedings or legislative actions. “Lockbox Account” has the meaning set forth in the Security Agreement. “Lockbox Account Control Agreement” has the meaning set forth in the Security Agreement.
“Lockbox Arrangement Documents” means, collectively, the Intercreditor and Collateral Agency Agreement, the Security Agreement, and the Lockbox Account Control Agreement. “Losses” means, with respect to any Party, an amount equal to the present value of the economic loss to it, if any (exclusive of Costs), resulting from termination of this Agreement.

Factors used in determining economic loss to a Party may include, without limitation, reference to information supplied by one or more third parties, which shall exclude Affiliates of the NonDefaulting Party, including without limitation, quotations (either firm or indicative) of relevant rates, prices, yields, yield curves, volatilities, spreads or other relevant market data in the relevant markets, comparable transactions, forward price curves based on economic analysis of the relevant markets, settlement prices for comparable transactions at liquid trading hubs, all of which should be calculated for the remaining Delivery Term to determine the value of the Product. If the NonDefaulting Party is the Seller, then “Losses” shall exclude any loss of federal or state tax credits, grants, or benefits related to the Project or generation therefrom or any costs or fees related to the Site or Project.
“Mechanical Completion” means that (a) all components and systems of the Project have been properly constructed, installed and functionally tested according to EPC Contract requirements in a safe and prudent manner that does not void any equipment or system warranties or violate any permits, approvals or Laws; (b) the Project is ready for testing and commissioning, as applicable; and (c) Seller has provided written acceptance to the EPC Contractor of mechanical completion as that term is specifically defined in the EPC Contract. “Member” means Town of Apple Valley.
“Member Lockbox Arrangement” has the meaning set forth in Section 10.5(a). “Member Performance Security” means (a) cash deposited in an escrow agreement on terms and conditions satisfactory to Seller or (b) Letter of Credit, in either case in an amount reasonably agreed to by the Parties.
“Monthly Payment” or “MP” has the meaning set forth in Section 5.2(d). “Moody’s” means Moody’s Investors Service, Inc., or its successor. “MUA Decision” has the meaning set forth in Section 4.2(m). “Must Offer Obligations” means Seller’s obligation to Bid or cause Seller’s SC to Bid the Project into the CAISO Markets due to delivery of the Product to Buyer and in accordance with the CAISO Tariff.

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“MW” means megawatts in alternating current, unless expressly stated in terms of direct current.
“NERC” means the North American Electric Reliability Corporation or any successor entity performing similar functions.
“Non-Availability Charges” has the meaning set forth in the CAISO Tariff. “Non-Defaulting Party” has the meaning set forth in Section 7.2. “Non-Spinning Reserve” has the meaning set forth in the CAISO Tariff. “Notice” unless otherwise specified in this Agreement, means written communications by a Party to be delivered by hand delivery, United States mail, overnight courier service, or electronic messaging (e-mail).
“Notice of Claim” has the meaning set forth in Section 15.2(a). “Notify” means to provide a Notice.
“NQC” or “Net Qualifying Capacity” has the meaning given to “Net Qualifying Capacity” in the CAISO Tariff.
“Operational Characteristics” means the operational characteristics set forth in Appendix II.
“Other Capacity Attributes” means, exclusive of RA Attributes, Local RA Attributes, and Flexible RA Attributes, any (a) current or future capacity characteristics or attributes, including the ability to generate or charge at given capacity levels, the ability to ramp up or down at a given rate, flexibility or dispatchability attributes, and locational attributes, as may be identified at any time during the Delivery Term by any applicable Law, or voluntary or mandatory program of any Governmental Authority or other Person, (b) certificate, tag, or credit, intended to commoditize or otherwise attribute value resulting from or associated with the characteristics set forth in subsection (a) of this definition, and (c) any accounting construct so that the characteristics or values set forth in subsections (a) or (b) hereof may be counted toward any Compliance Obligations.
“Participating Transmission Owner” or “Participating TO” means an entity that (a) owns, operates and maintains transmission lines and associated facilities or has entitlements to use certain transmission lines and associated facilities and (b) has transferred to the CAISO operational control of such facilities or entitlements to be made part of the CAISO Grid. “Party” or “Parties” has the meaning set forth in the preamble of this Agreement. “Party’s Event of Default” has the meaning set forth in Section 7.1(b). “Payment Quantity” has the meaning set forth in Section 5.2(d).

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“Performance Assurance” means collateral provided by Seller to Buyer to secure Seller’s obligations under this Agreement and includes Development Security and Delivery Term Security. “Permit” means any waiver, exemption, variance, franchise, permit, authorization, consent, ruling, certification, license or similar order of or from, or filing or registration with, or notice to, any Governmental Authority that authorizes, approves, limits or imposes conditions upon a specified activity.
“Person” means any individual, sole proprietorship, corporation, limited liability company, limited or general partnership, joint venture, association, joint-stock company, trust, incorporated organization, institution, public benefit corporation, unincorporated organization, government entity or other entity.
“Pricing Node” or “PNode” has the meaning set forth in the CAISO Tariff. “Product” has the meaning set forth in Section 5.1(a).
“Progress Report” means a reasonably detailed progress report including the items set forth in Appendix III.
“Project” means the energy storage facility described in Appendix I, as such may be revised from time to time in accordance with this Agreement. “Project Safety Plan” means Seller’s written plan that includes the Safeguards and plans to comply with the Safety Requirements, as such Safeguards and Safety Requirements are generally outlined in Appendix VI.
“Prudent Operating Practice” means those practices, methods, codes and acts engaged in or approved by a significant portion of the electric power industry and applicable to energy storage facilities during the relevant time period, or any of the practices, methods and acts which, in the exercise of reasonable judgment in light of the facts known at the time a decision is made, that could have been expected to accomplish a desired result at reasonable cost consistent with good business practices, reliability, safety and expedition. Prudent Operating Practices are not intended to be limited to the optimum practices, methods, or acts to the exclusion of others, but rather to those practices, methods and acts generally accepted or approved by a significant portion of the electric power industry in the relevant region, during the relevant time period, as described in the immediately preceding sentence. Prudent Operating Practices also includes taking reasonable steps to ensure that:
(a) Safeguards are implemented and maintained for the Project and at each Site and are sufficient to address reasonably foreseeable incidents; (b) equipment, material, and supplies are sufficient and accessible to operate the Project safety and reliably;
(c) operating personnel are trained, equipped, and capable of responsible operation and maintenance of the Project and at each Site, including identifying and responding to

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System Emergencies, emergencies, or Exigent Circumstances originating from or impacting the Project or Site;
(d) the Project’s material components and control systems are designed, manufactured, and configured to meet the standard of durability and safety generally used for electric power or energy storage facilities operating in the relevant region; and (e) the Project is appropriately designed, operated, maintained, monitored, and tested to ensure it continues to function safely, reliably, and consistent with the intended design specifications, applicable Laws, and Permits, and over the complete range of environmental conditions reasonably expected to occur at each Site.
“RA Attributes” means, any and all resource adequacy attributes, exclusive of any Local RA Attributes, Flexible RA Attributes and Other Capacity Attributes, as may be identified at any time during the Delivery Term by the CPUC, CAISO or other Governmental Authority having jurisdiction, that can be counted toward RAR and Local RAR. “Receiving Party” has the meaning set forth in Section 20.2(b). “Regulation Down” has the meaning set forth in the CAISO Tariff. “Regulation Up” has the meaning set forth in the CAISO Tariff. “Reliability Organization” means an “Electric Reliability Organization” as defined in Section 215(a)(2) of the Federal Power Act or a “regional entity” as defined in Section 215(a)(7) of the Federal Power Act.
“Remedial Action Plan” has the meaning set forth in Section 3.5. “Remediation Event” means the occurrence of any of the following with respect to the Project or a Site: (a) an Exigent Circumstance; (b) a Serious Incident; (c) a change in the nature, scope, or requirements of applicable Laws, Permits, codes, standards, or regulations issued by Governmental Authorities which requires modifications to the Safeguards; (d) a material change to the manufacturer’s guidelines that requires modification to equipment or the Project’s operating procedures; (e) a failure or compromise of an existing Safeguard; (f) Notice by Buyer pursuant to Section 11.1 that the Project Safety Plan is not consistent with the Safety Requirements; or (g) any actual condition related to the Project or a Site that would reasonably be expected to adversely impact the safe construction, operation, or maintenance of the Project or a Site. “Remediation Period” means the time period between the first occurrence of the Remediation Event and the resolution of such Remediation Event which period may not exceed a total of ninety (90) days; provided, however, that Seller may request to extend the Remediation Period by up to ninety (90) days if Seller is unable to resolve the Remediation Event within the initial ninety (90) day period despite exercising diligent efforts (and Buyer shall not unreasonably withhold approval of such extension), and Seller may request an additional extension of the Remediation Period of up to ninety (90) days if Seller is unable to resolve the Remediation Event within the ninety (90) day extension period despite exercising diligent efforts, which Buyer may approve or reject in its sole discretion. The Remediation Period may not, under any circumstance,

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continue for more than two hundred and seventy (270) days from the first occurrence of the Remediation Event.
“Requirements” means Prudent Operating Practices and all applicable requirements of Law, the Utility Distribution Company, the Transmission Provider, Governmental Approvals, the CAISO, CPUC, CARB, FERC, NERC and WECC.
“Resold Product” has the meaning set forth in Section 5.1(b). “Resource Adequacy” means the procurement obligation of load serving entities, including Buyer, as such obligations are described in CPUC Decisions D.04-10-035 and D.05-10- 042 and subsequent CPUC decisions addressing Resource Adequacy issues, as those obligations may be altered from time to time, and all other capacity procurement obligations established by any other entity, including the CAISO.
“Resource Adequacy Plan” has the meaning set forth in the CAISO Tariff. “Resource Adequacy Requirement” or “RAR” means the Resource Adequacy or successor program requirements established by the CPUC, CAISO or any other regional entity, including submission of a Supply Plan or Resource Adequacy Plan. “RMR” means “Reliability Must-Run” and has the meaning set forth in, and as used in, the CAISO Tariff.
“RMR Contract” has the meaning set forth in the CAISO Tariff. “RMR Generation” has the meaning set forth in the CAISO Tariff. “S&P” means Standard and Poor’s Financial Services, LLC (a subsidiary of The McGrawHill Companies, Inc.) or its successor. “Safeguard” means any procedures, practices, or actions with respect to the Project, a Site or Work for the purpose of preventing, mitigating, or containing foreseeable accidents, injuries, damage, release of hazardous material or environmental harm. “Safety Remediation Plan” means a written Notice from Seller to Buyer containing information about a Remediation Event, including (a) the date, time and location of first occurrence, (b) the circumstances surrounding cause, (c) impacts, and (d) detailed information about Seller’s plans to resolve the Remediation Event.
“Safety Requirements” means Prudent Operating Practices, CPUC General Order No. 167, and all applicable safety-related (construed broadly) requirements of Law, the Utility Distribution Company, the Transmission Provider, Governmental Approvals, the CAISO, CARB, FERC, NERC and WECC.
“Scheduling Coordinator” or “SC” has the meaning set forth the CAISO Tariff. Under the terms of this Agreement, the SC may be Seller or Seller’s designated agent (i.e., a third-party).

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“SEC” means the U.S. Securities and Exchange Commission, or any successor entity performing similar functions.
“Security Agreement” means the Security Agreement, dated as of April 3, 2020, between Member and Collateral Agent, as collateral agent for the benefit of the Secured Creditors, or any successor agreement generally available to Member’s creditors. “Security Interest” has the meaning set forth in Section 10.3(a). “Seller” has the meaning set forth in the preamble to this Agreement. “Seller’s Event of Default” has the meaning set forth in Section 7.1(a). “Serious Incident” means a harmful event that occurs on a Site during the Term arising out of, related to, or connected with the Project or the Site that results in any of the following outcomes: (a) any injury to or death of a member of the general public; (b) the death or permanent, disabling injury to operating personnel, Seller’s Contractors or subcontractors, Seller’s employees, agents, or consultants, or authorized visitors to the Site; (c) any property damage greater than three hundred thousand dollars ($300,000.00); (d) release of hazardous material above the limits, or violating the requirements, established by Permits, codes, standards, regulations, Laws or Governmental Authorities; (e) environmental impacts exceeding those authorized by Permits or applicable Law.
“Settlement Amount” means the Non-Defaulting Party’s Costs and Losses, on the one hand, netted against its Gains, on the other. If the Non-Defaulting Party’s Costs and Losses exceed its Gains, then the Settlement Amount shall be an amount owing to the Non-Defaulting Party. If the Non-Defaulting Party’s Gains exceed its Costs and Losses, then the Settlement Amount shall be zero dollars ($0). The Settlement Amount does not include consequential, incidental, punitive, exemplary or indirect or business interruption damages. “Shortfall” means any difference between a Delivered Quantity and a Contract Amount. “Showing Month” incorporates each day of each calendar month of the Delivery Term that is the subject of the Compliance Showings, as set forth in the CPUC Decisions. For illustrative purposes only, pursuant to the CPUC Decisions in effect as of the Effective Date, the monthly Compliance Showings made in June are for the Showing Month of August and the annual Compliance Showing made in October is for the twelve (12) Showing Months of the following year.
“Site(s)” means the real property on which the Project is located, as identified in Appendix I.
“Site Control” means that Seller owns the Site and the Project or has demonstrable contractual real property rights to the Site sufficient for the permitting, control, development and operation of the Project.
“Spinning Reserve” has the meaning set forth in the CAISO Tariff.

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“Standalone Energy Storage Incentives” means (a) all federal tax credits associated with the construction or ownership from the Facility (including credits under Sections 38, 45, 46 and 48 of the Internal Revenue Code of 1986, as amended), and (b) any federal, subsidies or other like benefits relating in any way to the Facility, including a cash grant available under Section 1603 of Division B of the American Recovery and Reinvestment Act of 2009, in lieu of federal Tax credits or any similar or substitute payment available under subsequently enacted federal legislation. “Supply Plan” has the meaning set forth in the CAISO Tariff. “Supplying Party” has the meaning set forth in Section 20.2(b). “System Emergency” has the meaning set forth in the CAISO Tariff. “Tax” or “Taxes” means all U.S. federal, state and local and any foreign taxes, levies, assessments, surcharges, duties and other fees and charges of any nature imposed by a Governmental Authority, whether currently in effect or adopted during the Term, including ad valorem, excise, franchise, gross receipts, import/export, license, property, sales and use, stamp, transfer, payroll, unemployment, income, and any and all items of withholding, deficiency, penalty, additions, interest or assessment related thereto. “Term” has the meaning set forth in Section 2.2(a).
“Terminated Transaction” has the meaning set forth in Section 7.2(a). “Termination Payment” has the meaning set forth in Section 7.3. “Transmission Provider” means the CAISO.
“Utility Distribution Company” has the meaning set forth in the CAISO Tariff. “WECC” means the Western Electricity Coordinating Council or its successor entity with similar functions.
“Work” means (a) work or operations performed by a Party or on a Party’s behalf; and (b) materials, parts or equipment furnished in connection with such work or operations; including (i) warranties or representations made at any time with respect to the fitness, quality, durability, performance or use of “a Party’s work”; and (ii) the providing of or failure to provide warnings or instructions.

1.2 Rules of Interpretation. In this Agreement, except as expressly stated otherwise or unless the context otherwise requires:
(a) headings and the rendering of text in bold and italics are for convenience and reference purposes only and do not affect the meaning or interpretation of this Agreement; (b) words importing the singular include the plural and vice versa and the masculine, feminine and neuter genders include all genders;

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(c) the words “hereof”, “herein”, and “hereunder” and words of similar import shall refer to this Agreement as a whole and not to any particular provision of this Agreement; (d) a reference to an article, section, paragraph, clause, Party, appendix, or exhibit is a reference to that section, paragraph, clause of, or that Party, appendix, or exhibit to, this Agreement unless otherwise specified;
(e) a reference to a document or agreement, including this Agreement means such document, agreement or this Agreement including any amendment or supplement to, or replacement, novation or modification of this Agreement, but disregarding any amendment, supplement, replacement, novation or modification made in breach of such document, agreement or this Agreement;
(f) a reference to a Person includes that Person’s successors and permitted assigns;
(g) the term “including” means “including without limitation” and any list of examples following such term shall in no way restrict or limit the generality of the work or provision in respect of which such examples are provided; (h) references to any statute, code or statutory provision are to be construed as a reference to the same as it may have been, or may from time to time be, amended, modified or reenacted, and include references to all bylaws, instruments, orders and regulations for the time being made thereunder or deriving validity therefrom unless the context otherwise requires; (i) in the event of a conflict, a mathematical formula or other precise description of a concept or a term shall prevail over words providing a more general description of a concept or a term;
(j) references to any amount of money shall mean a reference to the amount in United States Dollars;
(k) words, phrases or expressions not otherwise defined herein that (i) have a generally accepted meaning in Prudent Operating Practice shall have such meaning in this Agreement or (ii) do not have well known and generally accepted meaning in Prudent Operating Practice but that have well known and generally accepted technical or trade meanings, shall have such recognized meanings;
(l) the terms “year” and “calendar year” mean the period of months from January 1 through and including December 31; the term “month” means a calendar month unless otherwise indicated, and a “day” means a 24-hour period beginning at 12:00:01 a.m. and ending at 12:00:00 midnight; provided that a “day” may be 23 or 25 hours on those days on which daylight savings time begins or ends, respectively;
(m) unless otherwise specified herein, where the consent of a Party is required, such consent shall not be unreasonably withheld or unreasonably delayed;

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(n) when an action is required to be completed on a Business Day, such action must be completed prior to 5:00 p.m. on such day, Pacific Standard time, and actions occurring after 5:00 p.m. (such as the delivery of a Notice) will be deemed to have occurred on the following Business Day;
(o) all references to Product mean each and all components of the Product unless the context infers a particular component of Product; and (p) each Party acknowledges that it was represented by counsel in connection with this Agreement and that it or its counsel reviewed this Agreement and that any rule of construction to the effect that ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of this Agreement.

ARTICLE 2: TERM

2.1 Effectiveness.
(a) Upon Effective Date.
(i) Upon execution by both Parties, this Agreement shall be in full force and effect, enforceable and binding in all respects as of the Effective Date. (ii) Seller shall deliver to Buyer on or before the Effective Date correct and complete copies of: (A) Seller’s most recent annual report, audited consolidated financial statements, and unaudited consolidated financial statements; and (B) Seller’s organizational documents (including any certification of formation, certification of incorporation, charter, operating agreement, partnership agreement, bylaws, or similar documents) and any amendments thereto.

2.2 Term.
(a) The “Term” of this Agreement shall commence upon the Effective Date and shall continue until the expiration of the Delivery Term (unless terminated earlier in accordance with the terms of this Agreement).
(b) The “Delivery Term” is the period commencing on the Initial Delivery Date and continuing for the number of Contract Years specified on the Cover Sheet. The “Initial Delivery Date” is the first day of the first Showing Month for which Product is delivered; provided that the Initial Delivery Date may not occur until satisfaction of the Conditions Precedent, as set forth in Article 4.

ARTICLE 3: PROJECT DEVELOPMENT

3.1 Project Construction.
(a) Seller has achieved Site Control as of the Effective Date.

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(b) Seller shall develop, design and construct the Project in timely fashion in order to perform Seller’s obligations under this Agreement. (c) Seller has caused the following to occur as of the Effective Date (“Construction Start”): (i) acquisition of all Governmental Approvals necessary for the construction of the Project, (ii) engagement of each Contractor, (iii) execution of the EPC Contract and issuance of a full notice to proceed thereunder that authorizes the Contractor to mobilize to the Site and begin physical construction (including, at a minimum, excavation for foundations or the installation or erection of improvements, as applicable) at the Site, and (iv) ordering of all essential equipment and supplies, in each case (i)-(iv), as reasonably necessary so that physical construction of the Project may begin and proceed to completion without foreseeable interruption of material duration.

3.2 Interconnection. Seller has executed and delivered all necessary Interconnection Agreements as of the Effective Date. Seller shall (a) comply with all terms and conditions contained in the Interconnection Agreement as necessary for the safe and reliable delivery of the Product and (b) arrange, schedule and be responsible for any and all electric distribution and transmission service including any Governmental Approvals required for the foregoing. Seller shall fulfill all contractual, metering and applicable interconnection requirements, including Electric System Upgrades and those requirements set forth in the Utility Distribution Company’s applicable tariffs, the Participating Transmission Owner’s applicable tariffs, the CAISO Tariff and implementing CAISO standards and requirements, so as to be able to deliver the Product to Buyer.

3.3 Metering. At Seller’s expense, Seller shall obtain and maintain a single CAISO resource ID dedicated exclusively to the Project and shall install, or cause to be installed, all necessary metering and telemetry required by the CAISO to deliver the Product.

3.4 Progress Reports. Within fifteen (15) days after the close of each calendar quarter, starting with the first calendar quarter following the Effective Date and until the Commercial Operation Date, Seller shall provide to Buyer a Progress Report in a Notice and agree to regularly scheduled meetings between representatives of Buyer and Seller to review such quarterly reports and discuss Seller’s progress.

3.5 Remedial Action Plans. If Seller anticipates that it will not be able to timely satisfy the Commercial Operation Milestone, except as the result of Force Majeure or a Buyer’s Event of Default, Seller shall submit to Buyer no later than thirty (30) days prior to the relevant deadline a remedial action plan (“Remedial Action Plan”), which will describe in detail the actual delay, any anticipated delay beyond the scheduled deadline, the cause of the delay, and Seller’s proposed course of action to achieve the Initial Delivery Date by the Expected Initial Delivery Date. Delivery of a Remedial Action Plan shall not relieve Seller of any obligation under this Agreement.

3.6 Standalone Energy Storage Incentives. Seller shall have exclusive rights to any Standalone Energy Storage Incentives and Buyer shall not own nor have the right to share in any benefits associated with such Standalone Energy Storage Incentives.

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ARTICLE 4: INITIAL DELIVERY DATE

4.1 Timing of the Initial Delivery Date.
(a) Timely Initial Delivery Date. Seller shall cause the Initial Delivery Date to occur on, and not prior to, the Expected Initial Delivery Date. (b) Early Initial Delivery Date. If Seller wishes for the Initial Delivery Date to occur prior to the Expected Initial Delivery Date, Seller may provide Buyer with a written request for a specified earlier date, so long as such written request is provided at least one (1) year prior to the Expected Initial Delivery Date. If Buyer agrees to the requested earlier date, the Parties shall execute a written amendment to this Agreement memorializing the agreement that each reference to the Expected Initial Delivery Date in this Agreement shall thereafter be deemed a reference to such earlier date.
(c) Failure to Meet Expected Initial Delivery Date.
(i) Seller shall provide Buyer with advance Notice of any delay in achieving the Initial Delivery Date on the Expected Initial Delivery Date, including a true and reasonably detailed explanation of the cause of such delay (“Delay Notice”), at least ninety (90) days in advance of the Expected Initial Delivery Date (or, if Seller’s anticipation of such delay does not arise until after such advance window, then as soon as reasonably possible following such anticipation arising). For each day beginning with the day after the Expected Initial Delivery Date until and including the date on which the Initial Delivery Date occurs, for a period beyond the Expected Initial Delivery Date lasting no more than one hundred eighty (180) days (“IDD Cure Period”), Seller shall pay IDD Delay Damages to Buyer. Buyer shall invoice Seller for the amount of any IDD Delay Damages. Buyer may draw any IDD Delay Damages that are due to Buyer from the Development Security after providing an invoice for the amounts due. Notwithstanding the foregoing, if Seller fails to achieve the Initial Delivery Date by the Expected Initial Delivery Date due to Force Majeure or a Buyer’s Event of Default, subject to the notice requirements in Section

8.1, the IDD Cure Period shall be extended on a day-for-day basis for such events, and no IDD Delay Damages shall be required to be paid for such period of delay due to Force Majeure or Buyer’s Event of Default.
(ii) Each Party agrees that (A) the damages that Buyer would incur due to Seller’s delay in achieving the Expected Initial Delivery Date would be difficult or impossible to predict with certainty and (B) the IDD Delay Damages are an appropriate approximation of such damages.

4.2 Conditions Precedent to the Initial Delivery Date. Seller shall take all actions and obtain all approvals necessary to meet the obligations of this Agreement and to deliver the Product to Buyer pursuant to the terms of this Agreement. The following obligations of Seller are conditions precedent to the Initial Delivery Date (collectively, the “Conditions Precedent”) and must be satisfied at least seventy-five (75) days before the Initial Delivery Date, unless a different deadline is set forth below, in which case such other deadline shall govern, to Buyer’s reasonable satisfaction:

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(a) Seller shall have provided to Buyer updated correct and complete copies of the items identified in Section 2.1(a)(ii).
(b) Seller shall have secured all CAISO and Governmental Approvals as are necessary for the safe and lawful operation and maintenance of the Project and to enable Seller to deliver the Product to Buyer, including at the Contract Amounts. (c) Seller has secured and maintained Site Control.
(d) On or before the Commercial Operation Deadline, Seller shall have caused the Project to become Commercially Operable.
(e) Seller shall have provided to Buyer a certification of Seller and a Licensed Professional Engineer, substantially in the form attached hereto as Appendix IV, demonstrating (i) that the Commercial Operation Date has occurred and (ii) satisfactory completion of the Project at the Site.
(f) Seller shall have provided to Buyer all documentation reasonably acceptable to Buyer demonstrating that the Project successfully completed all applicable testing and registration procedures required by CAISO to Bid into the CAISO Markets. (g) Seller shall have executed and complied with any necessary Interconnection Agreement(s) and installed any necessary metering to deliver Product to Buyer, in each case in accordance with the CAISO Tariff and any applicable tariffs of the Utility Distribution Company and the Participating Transmission Owner.
(h) On or before the Initial Delivery Date, Seller shall have provided Delivery Term Security to Buyer as required by Section 10.2.
(i) As of the Initial Delivery Date, no Event of Default on the part of Seller shall have occurred and be continuing and no Remediation Event shall have occurred and remain unresolved.
(j) Seller shall have submitted to Buyer a Project Safety Plan. (k) Seller shall have obtained certification of Product in accordance with the CAISO Tariff and CPUC requirements applicable to Product (i) resulting in certifications of not less than the Contract Amounts and (ii) so as to ensure the Project is fully deliverable such that Seller is able to deliver Product in the Contract Amounts to Buyer for purposes of counting towards Buyer’s Compliance Obligations.
(l) As of the dates required under Section 5.2(b) and Section 5.2(c), as applicable, (i) Seller shall have submitted, or shall have caused its SC to have submitted, a Notice to Buyer including Seller’s proposed Supply Plan for the first Showing Month in accordance with Section 5.2(b) and (ii) Seller shall have submitted, or shall have caused its SC to have submitted, a Supply Plan to CAISO in accordance with Section 5.2(c).

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(m) Seller shall have provided to Buyer an attestation, in the form attached hereto as Appendix VII, that Seller is following all of the rules set forth in CPUC Decision 18-01- 003 on Multiple-Use Application Issues, issued January 17, 2018, regarding the multiple-use applications of energy storage facilities (the “MUA Decision”). (n) Seller shall have delivered to Buyer all insurance documents required under Article 16.
(o) As of the Initial Delivery Date, Seller shall have paid Buyer for all amounts owing under this Agreement, if any, including IDD Delay Damages, if any.

4.3 Cooperation in Connection with Initial Delivery Date. The Parties agree that, in order for Seller to achieve the Initial Delivery Date, the Parties may have to perform certain of their Delivery Term obligations in advance of the Initial Delivery Date. The Parties shall cooperate with each other in order for Buyer to be able to utilize the Product beginning on the Initial Delivery Date and Seller agrees to cause the Project’s SC to cooperate in order to achieve the same.

4.4 Confirmation of Initial Delivery Date. Once each of the Conditions Precedent has been satisfied by Seller (other than any Condition Precedent that may only be satisfied as of the Initial Delivery Date), Seller shall certify such satisfaction to Buyer in a Notice confirming the anticipated occurrence of the Initial Delivery Date. Buyer shall Notify Seller of any disagreement that Seller has satisfied such Conditions Precedent (with reasonable detail in regard to each Condition Precedent) within fifteen (15) Business Days of Seller’s Notice. On or promptly following the Initial Delivery Date (in no event later than five (5) Business Days thereafter), Buyer shall provide a Notice to Seller confirming the occurrence of the Initial Delivery Date.

ARTICLE 5: TRANSACTION

5.1 Product.
(a) During the Delivery Term, Seller grants, pledges, assigns and otherwise commits and shall deliver to Buyer, for Buyer’s exclusive use, all Capacity Attributes that may be calculated or derived from the Operational Characteristics, which must be exclusively from the Project (collectively, the “Product”), pursuant to the terms and conditions contained herein.

Operational Characteristics shall not be modified during the Term. (b) In addition to the Capacity Attributes, the Product includes the exclusive right to claim the Contract Amounts as an incremental resource for purposes of CPUC D.21-06- 035. During the Delivery Term Buyer shall have the exclusive right to claim the Contract Amounts as an incremental resource for purposes of CPUC D.21-06-035. (c) Buyer shall have the right to re-sell all or a portion of the Product purchased under this Agreement (“Resold Product”).
(d) Product does not confer to Buyer any right to dispatch or receive Energy or Ancillary Services from the Project.

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5.2 Purchase and Sale Obligation.
(a) For each day of each Showing Month during the Delivery Term, Seller agrees to deliver all Capacity Attributes of Product to Buyer, including in the amounts and categories set forth on the Cover Sheet (“Contract Amounts”). (b) No later than fifteen (15) Business Days prior to the applicable Compliance Showing deadlines for each Showing Month, Seller shall submit, or cause its SC to submit, a Notice to Buyer which includes Seller’s proposed Supply Plan for such Showing Month in a format and to a platform as Notified by Buyer to Seller prior to such deadline. No later than ten (10) Business Days before the applicable Compliance Showing deadlines for each Showing Month, Buyer may Notify Seller of any administrative or typographical corrections to the Supply Plan and Seller shall implement any such corrections in the Supply Plan that it submits, or causes to be submitted, to the CAISO. In the event that Buyer does not Notify Seller of any such corrections to the proposed Supply Plan, Seller shall submit the Supply Plan to CAISO as it was proposed by Notice to Buyer.
(c) After following the procedure in Section 5.2(b), Seller shall submit, or cause to be submitted, a Supply Plan to CAISO, in accordance with the applicable Compliance Showing deadlines for each Showing Month, to identify and confirm the Product to be delivered to Buyer (or, with regard to Resold Product, Buyer’s designee) for each day within the applicable Showing Month. For each of the Capacity Attributes of Product that Seller submits in its Supply Plan in the applicable Showing Month, Seller shall not submit an amount greater than the Contract Amount of each of the respective Capacity Attributes. The lowest daily quantity that Seller submits for each of the Capacity Attributes in a Supply Plan shall be deemed to be the amount of the respective Capacity Attributes that Seller has delivered for such Showing Month (“Delivered Quantities”). (d) For all Capacity Attributes of the Product that Seller delivers during the Delivery Term in accordance with this Agreement, Buyer shall, in accordance with Article 9, pay Seller a monthly payment (“Monthly Payment” or “MP”) as follows:

MP = (DQ / CA) × PQ × CP
where,
DQ = The sum of the Delivered Quantities of all RA Attributes, Local RA Attributes, and Flexible Attributes;
CA = The sum of the Contract Amounts of all RA Attributes, Local RA Attributes, and Flexible Attributes;
PQ = The payment quantity set forth on the Cover Sheet (“Payment Quantity”); and
CP = The contract price set forth on the Cover Sheet (“Contract Price”).

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5.3 Allocation of CAISO Payments and Costs.
(a) Except as may otherwise be provided in this Agreement, Seller shall retain any revenues it may receive from and pay all costs charged by, the CAISO or any other third party with respect to the Product or Project.
(b) To the extent that the Project is subject to the terms of the Availability Standards, Non-Availability Charges, and Availability Incentive Payments of the CAISO Tariff, the Parties agree that any Availability Incentive Payments are for the benefit of Seller and for Seller’s account and that any Non-Availability Charges are the responsibility of Seller and for Seller’s account.

ARTICLE 6: OPERATIONS

6.1 Operations. Seller shall at all times retain operational control of the Project and be responsible for operation and maintenance of the Project.

6.2 Charging Energy. Seller shall be responsible for procuring and delivering all of the Charging Energy to the Project and paying all of the associated costs of such Charging Energy.

6.3 Standard of Care. In performing all of its obligations under this Agreement, including in its scheduling, interconnection, operation and maintenance of the Project, Seller shall comply with all Requirements and Safety Requirements.

6.4 Buyer’s Compliance Obligations; Certification of Product. (a) During the Term, Seller shall take all actions, including executing all documents or instruments, complying with all applicable registration, certification and reporting requirements of all applicable Governmental Authorities and other Persons, as such requirements may be amended from time to time, that are necessary to ensure that Buyer can use Product, including enabling Buyer to apply Product towards Buyer’s Compliance Obligations, or sell Resold Product, at all times during the Delivery Term. Promptly following Buyer’s written request, Seller agrees to take all actions and execute or provide any documents, information, or instruments with respect to Product reasonably necessary to enable Buyer to comply with the requirements of any Governmental Authority.
(b) During the Delivery Term, Seller shall, at no cost to Buyer, obtain and maintain CAISO and all applicable Governmental Authority certification(s) for all elements of the Product for which certification is or may become required in order to enable Buyer to receive and use such Product, including use of such Product to satisfy its Compliance Obligations. If Buyer is required under applicable Law to obtain such certification, Seller shall take all actions within its control to ensure that Buyer is able to secure such certification. Seller, at no cost to Buyer, shall take all other actions during the Delivery Term, including submission of all reports and other filings with CAISO and applicable Governmental Authorities, that are required to be taken by Seller to ensure that Buyer can receive the Product and shall take all actions within its control to assist Buyer in taking actions required to be taken by Buyer with regard to receipt of Product.

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6.5 Scheduling.
(a) Seller shall be the SC or shall designate a qualified third party to fulfill such role for the Project in order to deliver Product to Buyer during the Delivery Term in accordance with the terms of this Agreement. Seller shall be solely responsible for all costs associated with the SC. Seller shall take, or cause its SC to take, all necessary steps to qualify itself and the Project in such other manner identified and approved by the CAISO and CPUC that permits Seller to provide Product to Buyer.
(b) Seller shall comply, and shall cause SC to comply, with all applicable CAISO Tariff provisions, CPUC Decisions and all other applicable rules, requirements or Laws, including any Bidding of the Project to meet any Must Offer Obligations, in order to deliver the Product to Buyer and allow Buyer to use the Product to satisfy Buyer’s Compliance Obligations. (c) Buyer shall have no liability for the failure of Seller or SC to comply with any applicable Law, Requirements, or other requirement of the Transmission Provider or Utility Distribution Company, including any penalties, charges or fines imposed for such noncompliance except to the extent that such noncompliance is due to Buyer’s failure to comply with its obligations under this Agreement. In no event shall Buyer be required to use or change its utilization of its owned or controlled assets or market positions to minimize a Shortfall. (d) Seller shall not accept, and shall cause the Project’s SC to not accept, any proposed CPM or RMR designation by the CAISO unless and until Buyer has agreed to accept such designation in a Notice. In addition, Seller shall promptly Notify, or cause the Project’s SC to promptly Notify, Buyer within one (1) Business Day of the time Seller or the SC receives a proposal from CAISO to designate any portion of the Product as CPM Capacity or RMR Generation. During the Delivery Term, Buyer has exclusive right to enter into a RMR Contract with respect to the Product or any component thereof, provided that the RMR Contract would not require the Project to operate beyond the Operational Characteristics or beyond the end of the Delivery Term.

6.6 Information Sharing and Shared Learning. Seller understands and acknowledges that Buyer is entering into this Agreement in part to gain operational and market information regarding the performance, efficiency, operations, maintenance, and multiple uses of energy storage and storage assets as an integral part of Buyer’s portfolio of assets to meet its customers’ needs as well as to gain an understanding of the impact of energy storage on load forecasting as a load serving entity. Throughout the Delivery Term, Seller agrees to share such information with Buyer, including meter data and hourly charging and discharging data but excluding cost or similar proprietary information, upon Buyer’s request, with such information to be treated by Buyer as Confidential Information. Seller shall provide such applicable meter data to Buyer in a format and to a platform specified by Buyer that is reasonably acceptable to Seller.

For information related to Seller’s multiple uses of the Project, Seller shall promptly provide Notice to Buyer any time it provides any services, attributes, or products from the Project to a third party.

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6.7 Changes in Law.
(a) In the event of any change in Requirements by the CPUC, CAISO, or other Governmental Authority or Person (in each case, other than a Party) having jurisdiction over Capacity Attributes that results in an increase or decrease to the amount of Capacity Attributes (other than Other Capacity Attributes) that may be calculated or derived from the Operational Characteristics (including in the case of a new category of Capacity Attributes), then either Party shall provide Notice to the other Party as soon as practicable following knowledge of such change specifying the altered amounts of Capacity Attributes of Product (“Change Notice”). Following a Change Notice, Buyer will confirm via Notice to Seller the amended Contract Amounts and Payment Quantity based on such change and the date that Seller shall commence delivery of such amended amounts (“Confirmation Notice”); provided that, in the case of an increase to the amount of Capacity Attributes that may be calculated or derived from the Operational Characteristics, Buyer shall have sole discretion over whether to accept a corresponding increase to any Contract Amount and the Payment Quantity; provided further that, if Buyer declines to accept any such increase, Seller shall have the right to sell to third parties any Capacity Attributes resulting from such increase that are in excess of the Contract Amounts. The Contract Amounts and Payment Quantity shall automatically adjust upon the date set forth in the Confirmation Notice (“Capacity Adjustment Date”) without further need for the Parties to amend this Agreement.

Until the Capacity Adjustment Date, Seller shall continue to deliver the Contract Amounts of the Capacity Attributes of Product as stated prior to the Confirmation Notice, unless otherwise required by Law or other Requirements. In the event that Buyer disputes the altered amounts of Capacity Attributes that may be calculated or derived from the Operational Characteristics as set forth in the Change Notice, the Parties shall resolve such dispute in accordance with the dispute resolution procedures set forth in Section 19.2.

Notwithstanding the provisions of this Section 6.7(a), if Buyer sends a Change Notice that indicates that a decrease to the amount of Capacity Attributes will trigger a reduction of the total Monthly Payments that Seller will receive for the twelve (12)-month period following the Capacity Adjustment Date by ten percent (10%) or more of the total Monthly Payments received by Seller in the immediately preceding twelve (12)-month period, then Seller may send a Notice to Buyer of its intent to terminate this Agreement. Buyer and Seller shall then engage in good faith negotiations to resolve the effects of the change to the Requirements with respect to the Capacity Attributes and the percentage reduction of total Monthly Payments, if any. If Buyer and Seller are unable, within sixty (60) days after delivery of such Notice, to agree upon changes to this Agreement or to resolve issues relating to the change in Requirements with respect to the Capacity Attributes, then Seller may send a Notice designating a day, no earlier than the day such Notice is deemed to be received and no later than twenty (20) days after such Notice is deemed to be received, as an early termination date of this Agreement. If Seller terminates this Agreement pursuant to this Section 6.7(a), then neither Party shall have any further liability to one another other than with respect to any liabilities or obligations that have accrued as of the date of termination set forth in the Notice. Notwithstanding the foregoing, Seller shall have no right to terminate this Agreement pursuant to this provision if, and for so long as, Buyer has received a Confirmation Notice and Buyer agrees to pay a Monthly Payment equal to ninety percent (90%) of the amount that is equal to the total Monthly Payments received by Seller in the immediately preceding twelve (12)-month period, divided by twelve (12).

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(b) In the event a centralized capacity market develops within the WECC region, Buyer will have exclusive right to offer, bid, or otherwise submit the Product for re-sale in such markets, or to cause Seller or Seller’s SC to do so, and Buyer shall retain and receive any and all related revenues.
(c) If a change in CAISO, CPUC or other Governmental Authority Requirements renders this Agreement or any provisions hereof incapable of being performed or administered, then either Party may request that Buyer and Seller enter into negotiations to make the minimum changes to this Agreement necessary to make this Agreement capable of being performed and administered, while attempting to preserve to the maximum extent possible the benefits, burdens, and obligations set forth in this Agreement as of the Effective Date. Upon delivery of such a request, Buyer and Seller shall engage in such negotiations in good faith. If Buyer and Seller are unable, within sixty (60) days after delivery of such request, to agree upon changes to this Agreement or to resolve issues relating to changes to this Agreement, then either Party may submit issues pertaining to changes to this Agreement to the dispute resolution process set forth in Section 19.2. Notwithstanding the foregoing, (i) a change in cost shall not in and of itself be deemed to render this Agreement or any of the provisions hereof incapable of being performed or administered, or constitute, or form the basis of, a Force Majeure, and (ii) all of unaffected provisions of this Agreement shall remain in full force and effect during any period of such negotiation or dispute resolution.

ARTICLE 7: EVENTS OF DEFAULT; REMEDIES

7.1 Events of Default.
(a) Seller will be deemed a Defaulting Party upon the occurrence of any of the following (each, a “Seller’s Event of Default”):
(i) Seller fails to satisfy a Performance Assurance requirement set forth in Article 10 and Seller fails to provide replacement Performance Assurance within ten (10) Business Days of Buyer’s written demand therefor in accordance with Article 10; (ii) any material misrepresentation or omission, in any metering or submetering, Supply Plan, report, or Notice with regard to delivery of the Product, or undue delay or withholding of such data, report or Notice, which misrepresentation or undue delay or withholding is not cured within ten (10) Business Days of Buyer’s receipt thereof; (iii) Seller intentionally or knowingly delivers, or attempts to deliver Product that is not produced by the Project;
(iv) Seller fails to pay IDD Delay Damages in accordance with Section

4.1(c);
(v) Seller fails to achieve the Initial Delivery Date prior to the expiration of the IDD Cure Period, as such IDD Cure Period may be extended for Force Majeure or a Buyer’s Event of Default; or

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(vi) Any failure by Seller in a Showing Month to deliver Delivered Quantities to Buyer equal to the Contract Amounts in accordance with Section 5.2; provided that a Seller’s Event of Default shall not be deemed to have occurred under this Section 7.1(a)(vi) if such failure has not been preceded by two (2) or more such failures in separate Showing Months within the last six (6) months and Seller provides Buyer with substitute Capacity Attributes that are acceptable to Buyer in Buyer’s reasonable discretion in the amount of such Shortfall and for the time period of such Shortfall.
(vii) For the avoidance of doubt: (1) a Seller’s Event of Default shall be deemed to have occurred under Section 7.1(a)(vi) if Seller fails to provide Buyer with substitute Capacity Attributes in accordance with Section 7.1(a)(vi); (2) the amount described in Section

7.1(a)(vi) shall be owed by Seller to Buyer on a separate and additional basis for each of any two (2) failures under Section 7.1(a)(vi) occurring within any six (6) month period; and (3) the amount described in Section 7.1(a)(vi) represents Buyer’s direct damages as a result of a failure by Seller to deliver Delivered Quantities to Buyer equal to the Contract Amounts in accordance with Section

5.2 and is in addition to Seller’s indemnity obligations under Article 15 for any third-party Claims, including any penalties or fines imposed by CAISO or the CPUC. (b) Either Party will be deemed a Defaulting Party upon the occurrence of any of the following (each, a “Party’s Event of Default”):” (i) the failure by such Party to make, when due, any payment required pursuant to this Agreement and such failure is not remedied within ten (10) Business Days after Notice thereof;
(ii) any representation or warranty made by such Party under this Agreement is false or misleading in any material respect when made or when deemed made or repeated, and such default is not remedied within thirty (30) days after Notice thereof, or such longer additional period, not to exceed an additional sixty (60) days, if the Defaulting Party is unable to remedy such default within such initial thirty (30) day period despite exercising diligent efforts;
(iii) the failure by such Party to perform any material covenant or obligation set forth in this Agreement, including any failure by Seller to comply with Sections 5.1,

5.2, or 6.4 or with any Requirement or Safety Requirement in accordance with Section 6.3, in any case except to the extent constituting a separate Event of Default, and such failure is not remedied within thirty (30) days after Notice thereof, or such longer additional period, not to exceed an additional ninety (90) days, if the Defaulting Party is unable to remedy such default within such initial thirty (30) day period despite exercising diligent efforts; (iv) such Party becomes Bankrupt;
(v) such Party assigns this Agreement or any of its rights hereunder other than in compliance with Article 18; or
(vi) such Party consolidates or amalgamates with, or merges with or into, or transfers all or substantially all of its assets to, another entity and, at the time of such consolidation, amalgamation, merger or transfer, the resulting, surviving or transferee entity fails

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to assume all the obligations of such Party under this Agreement to which it or its predecessor was a party by operation of Law or pursuant to an agreement reasonably satisfactory to the other Party.

7.2 Remedies; Declaration of Early Termination Date. If an Event of Default with respect to a Defaulting Party has occurred, the other Party (“Non-Defaulting Party”) shall have the following rights:
(a) to send Notice, designating a day, no earlier than the day such Notice is deemed to be received and no later than twenty (20) days after such Notice is deemed to be received, as an early termination date of this Agreement (“Early Termination Date”) that terminates this Agreement (the “Terminated Transaction”) and ends the Delivery Term effective as of the Early Termination Date;
(b) to accelerate all amounts owing between the Parties, and to collect as liquidated damages (i) the Damage Payment, in the case of an Event of Default by Seller occurring before the Initial Delivery Date, including an Event of Default under Section 7.1(a)(v), or (ii) the Termination Payment calculated in accordance with Section 7.3 below, in the case of any other Event of Default by either Party;
(c) to withhold any payments due to the Defaulting Party under this Agreement; (d) to suspend performance; or
(e) to exercise any other right or remedy available at law or in equity, including specific performance or injunctive relief, except where an express and exclusive remedy or measure of damages is provided under this Agreement;
provided, that payment by the Defaulting Party of the Damage Payment or Termination Payment, as applicable, shall constitute liquidated damages and the Non-Defaulting Party’s sole and exclusive remedy for any Terminated Transaction and the Event of Default related thereto.

7.3 Termination Payment. The Termination Payment (“Termination Payment”) for a Terminated Transaction shall be the aggregate of the Settlement Amount plus any or all other amounts due to or from the Non-Defaulting Party, as of the Early Termination Date, netted into a single amount. The Non-Defaulting Party shall calculate a Settlement Amount for the Terminated Transaction as of the Early Termination Date. Third parties supplying information for purposes of the calculation of Gains or Losses may include, without limitation, dealers in the relevant markets, end-users of the relevant product, information vendors and other sources of market information.

The Settlement Amount shall not include consequential, incidental, punitive, exemplary, indirect or business interruption damages. Without prejudice to the Non-Defaulting Party’s duty to mitigate, the Non-Defaulting Party shall not have to enter into replacement transactions to establish a Settlement Amount. Each Party agrees and acknowledges that (a) the actual damages that the Non-Defaulting Party would incur in connection with a Terminated Transaction would be difficult or impossible to predict with certainty, (b) the Damage Payment or Termination Payment described in Section 7.2 or this Section 7.3, as applicable, is a reasonable and appropriate approximation of such damages, and (c) the Damage Payment or Termination Payment described in Section 7.2 or this Section 7.3, as applicable, is the exclusive remedy of the Non-Defaulting Party in connection with a Terminated Transaction but shall not otherwise act to limit any of the

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Non-Defaulting Party’s rights or remedies if the Non-Defaulting Party does not elect a Terminated Transaction as its remedy for an Event of Default by the Defaulting Party.

7.4 Notice of Payment of Termination Payment. As soon as practicable after a Terminated Transaction, Notice shall be given by the Non-Defaulting Party to the Defaulting Party of the amount of the Damage Payment or Termination Payment and whether the Termination Payment is due to or from the Non-Defaulting Party. The Notice shall include a written statement explaining in reasonable detail the calculation of such amount and the sources for such calculation.

The Termination Payment shall be made to or from the Non-Defaulting Party, as applicable, within ten (10) Business Days after such Notice is effective.

7.5 Disputes with Respect to Termination Payment. If the Defaulting Party disputes the Non-Defaulting Party’s calculation of the Termination Payment, in whole or in part, the Defaulting Party shall, within five (5) Business Days of receipt of the Non-Defaulting Party’s calculation of the Termination Payment, provide to the Non-Defaulting Party a detailed written explanation of the basis for such dispute. Disputes regarding the Termination Payment shall be determined in accordance with Article 19.

7.6 Rights and Remedies Are Cumulative. Except where an express and exclusive remedy or measure of damages is provided, the rights and remedies of a Party pursuant to this Article 7 shall be cumulative and in addition to the rights of the Parties otherwise provided in this Agreement.

ARTICLE 8: FORCE MAJEURE

8.1 Force Majeure.
(a) Effect of Force Majeure. A Party shall not be considered to be in default in the performance of its obligations to the extent that the failure or delay of its performance is due to a Force Majeure event, and the non-affected Party shall be excused from its corresponding performance obligations for the period of the affected Party’s failure or delay of performance. The burden of proof for establishing the existence and consequences of an event of Force Majeure lies with the Party initiating the claim.
(b) Notice of Force Majeure. The Party desiring to invoke the Force Majeure event as a cause for delay in its performance of, or failure to perform, any obligation hereunder, shall provide prompt Notice to the other Party in the form of a letter identifying the event of Force Majeure and describing in detail the particulars of the occurrence giving rise to the Force Majeure event including the expected duration, when known, and the effect of such Force Majeure event.

Failure to provide timely Notice constitutes a waiver of a claim of Force Majeure. Promptly, but in any event within ten (10) days after a Notice is given pursuant to the preceding sentence, the Parties shall meet to discuss the basis and terms upon which the arrangements set out in this Agreement shall be continued taking into account the effects of such event of Force Majeure. (c) Mitigation of Force Majeure. The suspension of a Party’s performance under this Agreement due to a claim of Force Majeure shall be of no greater scope and of no longer duration than is required by the Force Majeure event. A Party suspending performance due to Force Majeure shall take, or cause to be taken, such action as may be necessary to void, or nullify,

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or otherwise to mitigate, in all material respects, the effects of such event of Force Majeure. The Parties shall take all reasonable steps to resume normal performance under this Agreement after the cessation of any Force Majeure event. If Seller cannot meet the Expected Initial Delivery Date as a result of a Force Majeure event declared by Seller in accordance with this Agreement, then Seller shall work diligently to resolve the effect of the Force Majeure and provide evidence of its efforts promptly upon Buyer’s written request.
(d) Force Majeure Failure. Notwithstanding any provision to the contrary, Buyer shall have the right, but not the obligation, to terminate this Agreement after the occurrence of the following, each constituting a “Force Majeure Failure”:
(i) if during the Delivery Term:
(A) due to a Force Majeure event, Seller is unable to meet its obligations under this Agreement (including any failure to deliver Delivered Quantities to Buyer equal to the Contract Amounts) on more than one hundred eighty (180) days within any three hundred sixty-five (365) day period; or
(B) the Project is destroyed or rendered inoperable by an event of Force Majeure; provided that Seller may repair or restore the Project if: (1) Seller provides to Buyer within the sixty (60) day period following the conclusion of the Force Majeure event a certificate from a non-affiliated, licensed professional engineer attesting that the Project can be restored to original operational status within the six (6) month period following the conclusion of the Force Majeure event; (2) Seller provides Buyer with Notice of Seller’s election to repair or restore the Project within the sixty (60) day period following the conclusion of the Force Majeure event; and (3) Seller completes such repair or restoration to original operational status within the six (6) month period following the conclusion of the Force Majeure event; (ii) if Seller is unable, due to a Force Majeure event, to achieve the Initial Delivery Date by one hundred eighty (180) days after the Expected Initial Delivery Date. (e) Effect of Termination for Force Majeure Failure. If Buyer exercises its termination right in connection with a Force Majeure Failure under Section 8.1(d), then this Agreement shall terminate without further liability of either Party to the other, effective upon the date set forth in Buyer’s Notice of termination, subject to each Party’s satisfaction of all of the final payment and survival obligations set forth in Section 21.3.

ARTICLE 9: INVOICING AND PAYMENT

9.1 Invoicing. Seller shall make good faith efforts to deliver an invoice, in arrears, to Buyer no sooner than ten (10) Business Days after the end of each Showing Month of the Delivery Term for all amounts due from Buyer to Seller under this Agreement, including, as applicable: (a) the Monthly Payment, and (b) other compensatory adjustments required by this Agreement, including adjustments for Taxes. Each invoice shall (i) contain data sufficient to document and verify all amounts included therein, including any relevant records, invoices, or settlement data from CAISO, necessary to verify the accuracy of any amount and (ii) be in a format specified by Buyer.

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9.2 Payment. Buyer shall make payment to Seller by wire transfer or ACH payment to the bank account provided on each monthly invoice. Buyer shall pay undisputed invoice amounts by the twenty-third (23rd) day of the month following the month in which the invoice was provided by Seller. If such due date falls on a weekend or legal holiday, such due date shall be the next Business Day. Any undisputed portion of the invoice amount paid after the due date will be considered late and will bear interest on the unpaid balance. If the amount due is not paid on or before the due date or if any other payment that is due and owing from one Party to another is not paid on or before its applicable due date, a late payment charge shall be applied to the unpaid balance and shall be added to the next billing statement. Such late payment charge shall be calculated based on an annual interest rate equal to the three-month LIBOR, plus two percent (2%) (the “Interest Rate”). If the due date occurs on a day that is not a Business Day, the late payment charge shall begin to accrue on the next succeeding Business Day.

9.3 Payment Adjustments; Billing Errors. Payment adjustments shall be made if Buyer or Seller discovers there have been good faith inaccuracies in invoicing that are not otherwise disputed under Section 9.4 or an adjustment to an amount previously invoiced or paid is required due to a correction of data by CAISO. If the required adjustment is in favor of Buyer, Buyer’s next monthly payment shall be credited in an amount equal to the adjustment. If the required adjustment is in favor of Seller, Seller shall add the adjustment amount to Buyer’s next monthly invoice. Adjustments in favor of either Buyer or Seller shall bear interest at the Interest Rate, until settled in full, in accordance with Section 9.2, accruing from the date on which the adjusted amount should have been due.

9.4 Billing Disputes. A Party may, in good faith, dispute the correctness of any invoice or any adjustment to an invoice rendered under this Agreement or adjust any invoice for any arithmetic or computational error within twelve (12) months of the date of the invoice, or adjustment to an invoice, was rendered. In the event an invoice or portion thereof, or any other claim or adjustment arising hereunder, is disputed, payment of the undisputed portion of the invoice shall be required to be made when due. Any invoice dispute or invoice adjustment shall be in writing and shall state the basis for the dispute or adjustment. Payment of the disputed amount shall not be required until the dispute is resolved. Upon resolution of the dispute, any required payment shall be made within five (5) Business Days of such resolution along with interest accrued at the Interest Rate from and including the original due date to but excluding the date paid. Inadvertent overpayments shall be returned via adjustments in accordance with Section

9.3. Any dispute with respect to an invoice is waived if the other Party is not notified in accordance with this Section 9.4 within twelve (12) months after the invoice is rendered or subsequently adjusted, except to the extent any misinformation was from a third party not affiliated with any Party and such third party corrects its information after the twelve (12) month period. If an invoice is not rendered within twelve (12) months after the close of the month during which performance occurred, the right to payment for such performance is waived.

9.5 Netting of Payments. The Parties hereby agree that they shall discharge mutual undisputed debts and payment obligations due and owing to each other on the same date through netting, in which case all amounts owed by each Party to the other Party for the purchase and sale of Product during the monthly billing period under this Agreement or otherwise arising out of this Agreement, including any related damages, interest, and payments or credits, shall be netted so that only the excess amount remaining due shall be paid by the Party who owes it.

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ARTICLE 10: PERFORMANCE ASSURANCE

10.1 Seller’s Development Security. To secure its obligations under this Agreement, Seller shall deliver the Development Security to Buyer within thirty (30) days of the Effective Date. Seller shall maintain the Development Security in full force and effect and Seller shall within five (5) Business Days after any draw thereon replenish the Development Security in the event Buyer collects or draws down any portion of the Development Security for any reason permitted under this Agreement other than to satisfy a Termination Payment. Upon the earlier of (a) Seller’s delivery of the Delivery Term Security, or (b) sixty (60) days after termination of this Agreement, Buyer shall return the Development Security to Seller, less the amounts drawn in accordance with this Agreement. If the Development Security is a Letter of Credit and the issuer of such Letter of Credit (i) fails to maintain the minimum Credit Rating specified in the definition of Letter of Credit, (ii) indicates its intent not to renew such Letter of Credit and such Letter of Credit expires prior to the Expected Initial Delivery Date, or (iii) fails to honor Buyer’s properly documented request to draw on such Letter of Credit by such issuer, Seller shall have ten (10) Business Days to either post cash or deliver a substitute Letter of Credit that meets the requirements set forth in the definition of Development Security.

10.2 Seller’s Delivery Term Security. To secure its obligations under this Agreement, Seller shall deliver Delivery Term Security to Buyer on or before the Initial Delivery Date. Seller shall maintain the Delivery Term Security in full force and effect, and shall within five (5) Business Days after any draws made by Buyer in accordance with this Agreement (other than to satisfy a Termination Payment) replenish the Delivery Term Security (except in the case of a Guaranty, as to which there is no obligation of Seller to replenish), until the following have occurred: (a) the Delivery Term has expired or terminated early; and (b) all payment obligations of Seller then due and payable under this Agreement, including compensation for penalties, Termination Payment, indemnification payments or other damages are paid in full (whether directly or indirectly such as through set-off or netting). Following the occurrence of both events, Buyer shall promptly return to Seller the unused portion of the Delivery Term Security. If the Delivery Term Security is a Letter of Credit and the issuer of such Letter of Credit (i) fails to maintain the minimum Credit Rating set forth in the definition of Letter of Credit, (ii) indicates its intent not to renew such Letter of Credit and such Letter of Credit expires prior to the end of the Delivery Term, or (iii) fails to honor Buyer’s properly documented request to draw on such Letter of Credit by such issuer, Seller shall have ten (10) Business Days to deliver substitute Delivery Term Security that meets the requirements set forth in the definition of Delivery Term Security. If the Delivery Term Security is a Guaranty and the Guarantor (i) fails to maintain the minimum Credit Rating set forth in the definition of “Guarantor,” (ii) becomes Bankrupt, or (iii) fails to honor Buyer’s properly demanded payment in accordance with the terms of the Guaranty, Seller shall have ten (10) Business Days to deliver substitute Delivery Term Security that meets the requirements set forth in the definition of Delivery Term Security.

10.3 First Priority Security Interest in Cash or Cash Equivalent Collateral. (a) To secure its obligations under this Agreement, and until released as provided herein, Seller hereby grants to Buyer a present and continuing first-priority security interest (“Security Interest”) in, and lien on (and right to net against), and assignment of the Development Security, Delivery Term Security, any other cash collateral and cash equivalent

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collateral posted pursuant to Sections 10.1 and 10.2 and any and all interest thereon or proceeds resulting therefrom or from the liquidation thereof, whether now or hereafter held by, on behalf of, or for the benefit of Buyer, and Seller agrees to take all action as Buyer reasonably requires in order to perfect Buyer’s Security Interest in, and lien on (and right to net against), such collateral and any and all proceeds resulting therefrom or from the liquidation thereof. Upon or any time after the occurrence of a Seller’s Event of Default or a Party’s Event of Default on the part of Seller, an Early Termination Date resulting from a Seller’s Event of Default or a Party’s Event of Default on the part of Seller, or an occasion provided for in this Agreement where Buyer is authorized to retain all or a portion of the Development Security or Delivery Term Security, Buyer may do any one or more of the following (in each case subject to the final sentence of this Section

10.3):
(i) Exercise any of its rights and remedies with respect to the Development Security and Delivery Term Security, including any such rights and remedies under Law then in effect;
(ii) Draw on any outstanding Letter of Credit issued for its benefit and retain any cash held by Buyer as Development Security or Delivery Term Security; and (iii) Liquidate all Development Security or Delivery Term Security (as applicable) then held by or for the benefit of Buyer free from any claim or right of any nature whatsoever of Seller, including any equity or right of purchase or redemption by Seller. (b) Buyer shall apply the proceeds of the collateral realized upon the exercise of any such rights or remedies to reduce Seller’s obligations under this Agreement (Seller remains liable for any amounts owing to Buyer after such application), subject to Buyer’s obligation to return any surplus proceeds remaining after these obligations are satisfied in full.

10.4 Seller Financial Information. If requested by Buyer, Seller shall deliver to Buyer (a) within one hundred twenty (120) days following the end of each fiscal year, a copy of Seller’s annual report containing unaudited consolidated financial statements for such fiscal year, if available, (or audited consolidated financial statements for such fiscal year, if otherwise available) and (b) within sixty (60) days after the end of each of its first three fiscal quarters of each fiscal year, a copy of such Seller’s quarterly report containing unaudited consolidated financial statements for such fiscal quarter, if available. In all cases the statements shall be for the most recent accounting period and shall be prepared in accordance with Generally Accepted Accounting Principles. This information shall be deemed to be Confidential Information for purposes of this Agreement.

10.5 Buyer Credit Support.
(a) To secure Buyer’s obligations under this Agreement, Seller shall have the right to execute a Joinder, which shall allow Seller to become a “PPA Provider” and “Secured Creditor” for all purposes under the Lockbox Arrangement Documents for so long as Member is subject to the Security Agreement and the Lockbox Account Control Agreement (or any successor arrangement generally available to Member’s creditors and permitted under Section 10.5(b)(iii)) (the current arrangement under the Lockbox Arrangement Documents and any successor

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arrangement thereto generally available to Buyer’s creditors is the “Member Lockbox Arrangement”); provided, however, that if Member provides Member Performance Security, then so long as Buyer (or Member, as applicable) is not in default under this Agreement or any of the Lockbox Arrangement Documents, Buyer may, at the direction of its Member’s City Council, request the dissolution of the Member Lockbox Arrangement and Seller hereby agrees that (x) its security interest under the Member Lockbox Arrangement shall terminate, without further action, effective upon the termination of the security interests of all other PPA Providers under the Member Lockbox Arrangement and (y) if requested by Buyer or Member, Seller would promptly execute a written termination statement confirming such termination in accordance with the Lockbox Arrangement Documents.
(b) Under the Member Lockbox Arrangement:
(i) Buyer shall cause Member to provide notice to Seller of the termination of all security interests under the Security Agreement or the termination of any other Lockbox Arrangement Document.
(ii) Buyer further agrees it will cause Member to not grant any additional security interests or permit any party to have payment or enforcement rights (i) under the Security Agreement on terms more favorable than those currently offered to Seller, or (ii) under any arrangement similar to the Security Agreement that is generally available to Member’s creditors unless Seller is offered the right to participate in such arrangement on terms no less favorable than those offered to the other participants. (iii) In addition, so long as Buyer (or Member, as applicable) is not in default under this Agreement and Member is not in default under any of the Lockbox Arrangement Documents, Buyer may request the dissolution of the current Member Lockbox Arrangement in order to permit Member to enter into a substantially similar successor Member Lockbox Arrangement and, provided that Seller is allowed to become a PPA Provider (or its equivalent) and Secured Creditor (or its equivalent) under the successor Member Lockbox Arrangement, Seller hereby agrees that (x) its security interest under the Security Agreement shall terminate, without further action, effective upon the termination of the security interests of all other PPA Providers under the Security Agreement and the grant and perfection of a security interest under the successor Member Lockbox Arrangement, and (y) if requested by Buyer, Seller would promptly execute a written termination statement confirming such termination in accordance with Section

7.12 of the Security Agreement.
(c) If Buyer causes Member to provide Member Performance Security, then Buyer shall maintain, or cause Member to maintain, the Member Performance Security in full force and effect until the following have occurred: (i) the Delivery Term has expired or terminated early; and (ii) all payment obligations of Buyer arising under this Agreement, including compensation for penalties, Termination Payment, indemnification payments or other damages are paid in full (whether directly or indirectly such as through set-off or netting). Following the occurrence of both events, Seller shall promptly return to Buyer the unused portion of the Member Performance Security. If the Member Performance Security is a Letter of Credit and the issuer of such Letter of Credit (i) fails to maintain the minimum Credit Rating set forth in the definition of Letter of Credit, (ii) indicates its intent not to renew such Letter of Credit and such Letter of Credit

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expires prior to the time that Seller is required to return the Member Performance Security, or (iii) fails to honor Seller’s properly documented request to draw on such Letter of Credit by such issuer, Buyer shall have five (5) Business Days to either post, or cause Member to post, cash or deliver, or cause Member to deliver, a substitute Letter of Credit that meets the requirements set forth in this Agreement.

ARTICLE 11: SAFETY

11.1 Safety.
(a) Seller shall, and shall cause any Affiliates performing any design, construction, operation or maintenance of the Project and Contractors to, design, construct, operate, and maintain the Project and conduct all Work or cause all Work to be conducted in accordance with the Safety Requirements. Seller shall, and shall cause its Affiliates and Contractors to, take all actions to comply with the Safety Requirements. (b) Prior to Seller’s execution of a Contractor’s contract solely with respect to the operation and maintenance of the Project after the Initial Delivery Date (i) with a value of $500,000 or more (calculated on an aggregated basis with any other contract with such Contractor) or (ii) relating to any element of the Work that involves significant safety considerations, Seller shall demonstrate to Buyer’s reasonable satisfaction that the Contractor has the qualifications, experience, and safety record to operate and maintain the Project, as applicable; provided that Seller has pre-approved the Contractors set forth in Appendix IX. During the period that a Contractor is conducting Work, Seller shall cause the Contractor to meet and comply with the Safety Requirements.
(c) Seller shall document a Project Safety Plan and incorporate the Project Safety Plan’s features into the design, development, construction, operation, and maintenance of the Project. Seller shall submit for Buyer’s review a Project Safety Plan, in a format reasonably acceptable to Buyer, which must demonstrate (A) Seller’s plans to comply with the Safety Requirements and (B) Seller’s consideration of the Project Safety Plan items in Part Two (Project Design and Description) of Appendix VI. Upon Notice to Buyer, Seller may deviate from any specific procedures identified in the Project Safety Plan while designing, developing, constructing, operating, or maintaining the Project, if in Seller’s judgment, the deviation is necessary to design, develop, construct, operate, or maintain the Project safely or in accordance with the Safety Requirements.
(d) Throughout the Delivery Term, Seller shall update the Safeguards and the Project Safety Plan as required by Safety Requirements or as necessitated by a Safety Remediation Plan. Seller shall provide such updated Project Safety Plan to Buyer within thirty (30) days of any such updates. Throughout the Delivery Term, Buyer shall have the right to request Seller to provide its Project Safety Plan, or portions thereof, and demonstrate its compliance with the Safety Requirements within thirty (30) days of Buyer’s Notice. (e) Seller shall remove any Contractor that engages in repeated, material violations of the Project Safety Plan or Safety Requirements, unless doing so would present an ongoing material adverse effect to the operation of the Project.

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11.2 Reporting Serious Incidents. Seller shall provide Notice of a Serious Incident to Buyer within five (5) Business Days of occurrence. The Notice of Serious Incident must include the time, date, and location of the incident, the Contractor involved in the incident (as applicable), the circumstances surrounding the incident, the immediate response and recovery actions taken, and a description of any impacts of the Serious Incident. Seller shall cooperate and provide reasonable assistance, and cause each of its Contractors to cooperate and provide reasonable assistance, to Buyer with any investigations and inquiries by Governmental Authorities that arise as a result of the Serious Incident.

11.3 Remediation.
(a) Seller shall resolve any Remediation Event within the Remediation Period.

Within ten (10) days of the date of the first occurrence of any Remediation Event, Seller shall provide a Safety Remediation Plan to Buyer for Buyer’s review. (b) Seller shall cooperate, and cause each of its Contractors to cooperate, with Buyer in order for Seller to provide any report relating to a Remediation Event, in a form and level of detail that is acceptable to Buyer which incorporates information, analysis, investigations or documentation, as applicable or as requested by Buyer.

ARTICLE 12: TAXES

12.1 Taxes. Seller shall pay or cause to be paid all Taxes (a) on or with respect to the Project and (b) on or with respect to the sale and making available of Product to Buyer that are imposed on Product prior to its delivery to Buyer at the time and place contemplated under this Agreement. Buyer shall pay or cause to be paid all Taxes on or with respect to the delivery to and purchase by Buyer of Product that are imposed on Product at and after its delivery to Buyer at the time and place contemplated under this Agreement (other than withholding or other Taxes imposed on Seller’s income, revenue, receipts or employees), if any. If a Party is required to remit or pay Taxes that are the other Party’s responsibility hereunder, such Party shall promptly pay the Taxes due and then seek and receive reimbursement from the other for such Taxes. In the event any sale of Product hereunder is exempt from or not subject to any particular Tax, Buyer shall provide Seller with all necessary documentation within thirty (30) days after the Effective Date to evidence such exemption or exclusion. If Buyer does not provide such documentation, then Buyer shall indemnify, defend, and hold Seller harmless from any liability with respect to Taxes from which Buyer claims it is exempt.

12.2 Cooperation. Each Party shall use reasonable efforts to implement the provisions of and administer this Agreement in accordance with the intent of the Parties to minimize all Taxes, so long as no Party is materially adversely affected by such efforts. The Parties shall cooperate to minimize Tax exposure; provided, however, that neither Party shall be obligated to incur any financial or operational burden to reduce Taxes for which the other Party is responsible hereunder without receiving due compensation therefor from the other Party.

ARTICLE 13: LIMITATIONS

13.1 No Consequential Damages. EXCEPT TO THE EXTENT PART OF AN

EXPRESS REMEDY OR MEASURE OF DAMAGES HEREIN, OR PART OF AN ARTICLE

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15 INDEMNITY CLAIM, OR INCLUDED IN A LIQUIDATED DAMAGES CALCULATION,

OR ARISING FROM FRAUD OR INTENTIONAL MISREPRESENTATION, NEITHER

PARTY SHALL BE LIABLE TO THE OTHER OR ITS INDEMNIFIED PERSONS FOR ANY

SPECIAL, PUNITIVE, EXEMPLARY, INDIRECT, OR CONSEQUENTIAL DAMAGES, OR

LOSSES OR DAMAGES FOR LOST REVENUE OR LOST PROFITS, WHETHER

FORESEEABLE OR NOT, ARISING OUT OF, OR IN CONNECTION WITH THIS AGREEMENT.

13.2 Waiver and Exclusion of Other Damages.
(a) EXCEPT AS EXPRESSLY SET FORTH HEREIN, THERE IS NO

WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, AND ANY AND ALL IMPLIED WARRANTIES ARE DISCLAIMED. THE PARTIES

CONFIRM THAT THE EXPRESS REMEDIES AND MEASURES OF DAMAGES PROVIDED IN THIS AGREEMENT SATISFY THE ESSENTIAL PURPOSES HEREOF. ALL

LIMITATIONS OF LIABILITY CONTAINED IN THIS AGREEMENT, INCLUDING, WITHOUT LIMITATION, THOSE PERTAINING TO SELLER’S LIMITATION OF LIABILITY AND THE PARTIES’ WAIVER OF CONSEQUENTIAL DAMAGES, SHALL

APPLY EVEN IF THE REMEDIES FOR BREACH OF WARRANTY PROVIDED IN THIS AGREEMENT ARE DEEMED TO “FAIL OF THEIR ESSENTIAL PURPOSE” OR ARE OTHERWISE HELD TO BE INVALID OR UNENFORCEABLE.
(b) FOR BREACH OF ANY PROVISION FOR WHICH AN EXPRESS AND

EXCLUSIVE REMEDY OR MEASURE OF DAMAGES IS PROVIDED, SUCH EXPRESS

REMEDY OR MEASURE OF DAMAGES SHALL BE THE SOLE AND EXCLUSIVE REMEDY, THE OBLIGOR’S LIABILITY SHALL BE LIMITED AS SET FORTH IN SUCH

PROVISION, AND ALL OTHER REMEDIES OR DAMAGES AT LAW OR IN EQUITY ARE WAIVED.
(c) TO THE EXTENT ANY DAMAGES REQUIRED TO BE PAID
HEREUNDER ARE LIQUIDATED, INCLUDING UNDER SECTIONS 4.1(c), 7.1(a)(iv), 7.2 AND 7.3, THE PARTIES ACKNOWLEDGE THAT THE DAMAGES ARE DIFFICULT OR

IMPOSSIBLE TO DETERMINE, THAT OTHERWISE OBTAINING AN ADEQUATE

REMEDY IS INCONVENIENT, AND THAT THE LIQUIDATED DAMAGES CONSTITUTE A REASONABLE APPROXIMATION OF THE ANTICIPATED HARM OR LOSS. IT IS THE

INTENT OF THE PARTIES THAT THE LIMITATIONS HEREIN IMPOSED ON REMEDIES

AND THE MEASURE OF DAMAGES BE WITHOUT REGARD TO THE CAUSE OR

CAUSES RELATED THERETO, INCLUDING THE NEGLIGENCE OF ANY PARTY,

WHETHER SUCH NEGLIGENCE BE SOLE, JOINT OR CONCURRENT, OR ACTIVE OR PASSIVE. THE PARTIES HEREBY WAIVE ANY RIGHT TO CONTEST SUCH PAYMENTS AS AN UNREASONABLE PENALTY.
(d) THE PARTIES ACKNOWLEDGE AND AGREE THAT MONEY

DAMAGES AND THE EXPRESS REMEDIES PROVIDED FOR HEREIN ARE AN

ADEQUATE REMEDY FOR THE BREACH BY THE OTHER OF THE TERMS OF THIS

AGREEMENT, AND EACH PARTY WAIVES ANY RIGHT IT MAY HAVE TO SPECIFIC

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PERFORMANCE WITH RESPECT TO ANY OBLIGATION OF THE OTHER PARTY UNDER THIS AGREEMENT.

ARTICLE 14: REPRESENTATIONS; WARRANTIES; COVENANTS

14.1 Seller’s Representations and Warranties. As of the Effective Date, Seller represents and warrants as follows:
(a) Seller is a limited liability company, duly organized, validly existing and in good standing under the laws of the State of California, and is qualified to conduct business in the State of California and each jurisdiction where the failure to so qualify would have a material adverse effect on the business or financial condition of Seller. (b) Seller has the power and authority to enter into and perform this Agreement and is not prohibited from entering into this Agreement or discharging and performing all covenants and obligations on its part to be performed under and pursuant to this Agreement. The execution, delivery and performance of this Agreement by Seller has been duly authorized by all necessary action on the part of Seller (evidence of such due authorization Seller shall provide to Buyer if requested) and does not and will not require the consent of any trustee or holder of any indebtedness or other obligation of Seller or any other party to any other agreement with Seller. (c) The execution and delivery of this Agreement, consummation of the transactions contemplated herein, and fulfillment of and compliance by Seller with the provisions of this Agreement will not conflict with or constitute a breach of or a default under any Law presently in effect having applicability to Seller, subject to any permits that have not yet been obtained by Seller, the documents of formation of Seller or any outstanding trust indenture, deed of trust, mortgage, loan agreement or other evidence of indebtedness or any other agreement or instrument to which Seller is a party or by which any of its property is bound. (d) This Agreement has been duly executed and delivered by Seller. This Agreement is a legal, valid and binding obligation of Seller enforceable in accordance with its terms, except as limited by laws of general applicability limiting the enforcement of creditors’ rights or by the exercise of judicial discretion in accordance with general principles of equity. (e) The Project is located in the State of California.
(f) Seller will be responsible for obtaining all permits necessary to construct and operate the Project and Seller will be the applicant on any CEQA documents. (g) Seller is familiar with conflict of interest Laws, including the California Political Reform Act, and Buyer’s board policies governing conflicts of interest; Seller is in compliance with such Laws and board policies and does not know of any facts that would violate such Laws and board policies; Seller and its officers and agents have not, directly or indirectly, offered, paid, promised, or authorized the giving of money or anything of value to any employee, director, officer of Buyer or governmental official in San Bernardino County, California or Los Angeles County, California for the purpose of influencing any act or decision of such employee, director, officer or government official in her official capacity; no officer or agent of Seller (i) is a government official in San Bernardino County, California or Los Angeles County, California or a

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family member of a government official in San Bernardino County, California or Los Angeles County, California or (ii) has a personal, business, or other relationship or association with any government official in San Bernardino County, California or Los Angeles County, California, or family member thereof, who may have responsibility for or oversight of any activities of Buyer; Seller does not employ any government official in San Bernardino County, California or Los Angeles County, California, or family member thereof.

14.2 Buyer’s Representations and Warranties. As of the Effective Date, Buyer represents and warrants as follows:
(a) Buyer is a joint powers authority and a validly existing community choice aggregator, duly organized, validly existing and in good standing under the laws of the State of California and the rules, regulations and orders of the CPUC, and is qualified to conduct business in each jurisdiction of the Joint Powers Agreement members. All Persons making up the governing body of Buyer are the elected or appointed incumbents in their positions and hold their positions in good standing in accordance with the Joint Powers Agreement and other Law. (b) Buyer has the power and authority to enter into and perform this Agreement and is not prohibited from entering into this Agreement or discharging and performing all covenants and obligations on its part to be performed under and pursuant to this Agreement, except where such failure does not have a material adverse effect on Buyer’s performance under this Agreement. The execution, delivery and performance of this Agreement by Buyer has been duly authorized by all necessary action on the part of Buyer and does not and will not require the consent of any trustee or holder of any indebtedness or other obligation of Buyer or any other party to any other agreement with Buyer.
(c) The execution and delivery of this Agreement, consummation of the transactions contemplated herein, and fulfillment of and compliance by Buyer with the provisions of this Agreement will not conflict with or constitute a breach of or a default under any Law presently in effect having applicability to Buyer, the documents of formation of Buyer or any outstanding trust indenture, deed of trust, mortgage, loan agreement or other evidence of indebtedness or any other agreement or instrument to which Buyer is a party or by which any of its property is bound.
(d) This Agreement has been duly executed and delivered by Buyer. This Agreement is a legal, valid and binding obligation of Buyer enforceable in accordance with its terms, except as limited by laws of general applicability limiting the enforcement of creditors’ rights or by the exercise of judicial discretion in accordance with general principles of equity. (e) Buyer warrants and covenants that with respect to its contractual obligations under this Agreement, it will not claim immunity on the grounds of sovereignty or similar grounds with respect to itself or its revenues or assets from (i) suit, (ii) jurisdiction of court (provided that such court is located within a venue permitted in law and under this Agreement), (iii) relief by way of injunction, order for specific performance or recovery of property, (iv) attachment of assets, or (v) execution or enforcement of any judgment; provided, however that nothing in this Agreement shall waive the obligations or rights set forth in the California Tort Claims Act (Government Code Section 810 et seq.).

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(f) Buyer is a “local public entity” as defined in Section 900.4 of the Government Code of the State of California.

14.3 General Covenants. Each Party covenants that commencing on the Effective Date and continuing throughout the Term it shall continue to be duly organized, validly existing and in good standing under the laws of the jurisdiction of its formation and to be qualified to conduct business in the State of California and each jurisdiction where the failure to so qualify would have a material adverse effect on its business or financial condition.

14.4 Covenants of Seller. Seller covenants to and for the benefit of Buyer that throughout the Delivery Term (unless another time period is specified):
(a) Seller will (i) acquire and maintain all Governmental Approvals necessary for the construction, operation, and maintenance of the Project consistent with Safety Requirements, including any approvals required from the City of Santa Paula under the CEQA, (ii) Notify Buyer of any material modifications or lapse in renewal of Governmental Approvals, and (iii) at Buyer’s request, provide to Buyer digital copies of any Governmental Approvals. (b) Seller will use reasonable efforts to ensure that all employees hired by Seller, and its Contractors, that will perform construction work or provide services at the Site related to construction of the Project are paid wages at rates not less than those prevailing for workers performing similar work in the locality as provided by applicable California Law, if any. Nothing herein shall require Seller or its Contractors to comply with, or assume liability created by other inapplicable provisions of any California labor Laws. Buyer agrees that Seller’s obligations under this Section 14.4(b) will be satisfied upon the execution of a project labor agreement related to construction of the Project.
(c) Seller shall perform the obligations related to workforce development and community investment set forth in Appendix XII.
(d) Seller will deliver the Product to Buyer free and clear of all liens, security interests, claims and encumbrances or any interest therein or thereto by any Person. (e) Seller will take no action or permit any Person (other than Buyer) to take any action that would impair in any way Buyer’s ability to rely on the Project in order to satisfy its Compliance Obligations.
(f) Seller shall not transfer or assign the right to claim the Contract Amounts as an incremental resource for purposes of CPUC D.21-06-035 to any Person other than Buyer. (g) Seller shall operate the Project during the Delivery Term in accordance with Appendices I and II and Safety Requirements.
(h) Seller shall comply with all Utility Distribution Company, Participating Transmission Owner, and CAISO Tariff requirements applicable to energy storage facilities. (i) Seller shall follow all the rules set forth in Appendix A of the MUA Decision.

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ARTICLE 15: INDEMNITIES

15.1 Indemnity by Seller.
(a) Seller shall defend, indemnify and hold harmless Buyer, its directors, officers, agents, attorneys, employees, and representatives (“Buyer Group”) from and against all third party claims, demands, losses, liabilities, penalties, and expenses, including reasonable attorneys’ and expert witness fees, however described (collectively, “Claims”), which arise out of or relate to or are in any way connected with (i) Seller’s delivery of the Product to Buyer, (ii) Seller’s ownership, development, construction, operation or maintenance of the Project, including the Site(s); (iii) Seller’s actions or inactions, including Seller’s breach of this Agreement or other agreements related to the development, construction, ownership, operation or maintenance of the Project or Site (including any Claims relating to a Shortfall); (iv) any environmental matters associated with the Project, including the disposal and transportation of Hazardous Substances by or on behalf of the Seller or at the Seller’s direction or agreement; (v) any agreement between Seller or its Affiliates and a third party; or (vi) Seller’s violation of any applicable Law, Requirements, or other requirements of Transmission Provider, Utility Distribution Company, NERC, WECC or Reliability Organization; in each case including any loss, claim, action or suit, for or on account of injury to, bodily or otherwise, or death of, persons, or for damage to or destruction or economic loss of property belonging to Buyer, Seller, excepting only such losses, to the extent solely caused by the willful misconduct or gross negligence of a member of the Buyer Group (collectively, “Indemnifiable Losses”).
(b) Seller shall defend, indemnify and hold harmless the Buyer Group harmless from and against all Claims incurred by or brought against Buyer in connection with Environmental Costs.

15.2 Notice of Claim.
(a) Notice of Claim. Subject to the terms of this Agreement and upon obtaining knowledge of an Indemnifiable Loss for which it is entitled to indemnity under this Article 15, Buyer will promptly Notify Seller in writing of any Claim which Buyer has determined has given or could give rise to an Indemnifiable Loss under Section 15.1. The Notice is referred to as a “Notice of Claim.” A Notice of Claim will specify, in reasonable detail, the facts known to Buyer regarding the Indemnifiable Loss.
(b) Failure to Provide Notice. A failure to give timely Notice or to include any specified information in any Notice as provided in this Section 15.2 will not affect the rights or obligations of any Party hereunder except and only to the extent that, as a result of such failure, any Party which was entitled to receive such Notice was deprived of its right to recover any payment under its applicable insurance coverage or was otherwise materially damaged as a direct result of such failure and, provided further, Seller is not obligated to indemnify Buyer for the increased amount of any Indemnifiable Loss which would otherwise have been payable to the extent that the increase resulted from the failure to deliver timely a Notice of Claim.

15.3 Defense of Claims. If, within ten (10) days after giving a Notice of Claim regarding a Claim to Seller pursuant to Section 15.2(b), Buyer receives Notice from Seller that

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Seller has elected to assume the defense of such Claim as provided in the last sentence of Section

15.2(b), Seller will not be liable for any legal expenses subsequently incurred by Buyer in connection with the defense thereof; provided, however, that if Seller fails to take reasonable steps necessary to defend diligently such Claim within ten (10) days after receiving Notice from Buyer that Buyer believes Seller has failed to take such steps, or if Seller has not undertaken fully to indemnify Buyer in respect of all Indemnifiable Losses relating to the matter, Buyer may assume its own defense, and Seller will be liable for all costs or expenses, including attorneys’ fees, paid or incurred in connection therewith. Without the prior written consent of Buyer, Seller will not enter into any settlement of any Claim which would lead to liability or create any financial or other obligation on the part of Buyer for which Buyer is not entitled to indemnification hereunder; provided, however, that Seller may accept any settlement without the consent of Buyer if such settlement provides a full release to Buyer and no requirement that Buyer acknowledge fault or culpability. If a firm offer is made to settle a Claim without leading to liability or the creation of a financial or other obligation on the part of Buyer for which Buyer is not entitled to indemnification hereunder and Seller desires to accept and agrees to such offer, Seller will give Notice to Buyer to that effect. If Buyer fails to consent to such firm offer within ten (10) days after its receipt of such Notice, Buyer may continue to contest or defend such Claim and, in such event, the maximum liability of Seller to such Claim will be the amount of such settlement offer, plus reasonable costs and expenses paid or incurred by Buyer up to the date of such Notice.

15.4 Subrogation of Rights. Upon making any indemnity payment, Seller will, to the extent of such indemnity payment, be subrogated to all rights of the Buyer against any third party in respect of the Indemnifiable Loss to which the indemnity payment relates; provided that (a) Seller is in compliance with its obligations under this Agreement in respect of such Indemnifiable Loss, and (b) until Buyer recovers full payment of its Indemnifiable Loss, any and all claims of the Seller against any such third party on account of said indemnity payment are hereby made expressly subordinated and subjected in right of payment to Buyer’s rights against such third party.

Without limiting the generality or effect of any other provision hereof, Buyer and Seller shall execute upon request all instruments reasonably necessary to evidence and perfect the abovedescribed subrogation and subordination rights.

15.5 Rights and Remedies are Cumulative. The rights and remedies of a Party pursuant to this Article 15 are cumulative and in addition to the rights of the Parties otherwise provided in this Agreement, except with respect to any expressly exclusive remedies herein.

ARTICLE 16: INSURANCE

16.1 Insurance. Throughout the Term, Seller shall procure and maintain the following insurance coverage and require and cause its Contractors to maintain the same levels of coverage.

For the avoidance of doubt, the obligations of Seller in this Section 16.1 constitute a material obligation of this Agreement.
(a) Workers’ Compensation and Employers’ Liability.
(i) If it has employees, workers’ compensation insurance indicating compliance with any applicable labor codes, acts, Laws or statutes, California state or federal, where Seller performs Work.

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(ii) Employers’ liability insurance will not be less than one million dollars ($1,000,000.00) for injury or death occurring as a result of each accident. With regard to bodily injury by disease, the one million dollar ($1,000,000) policy limit will apply to each employee.
(b) Commercial General Liability.
(i) Commercial general liability insurance, including products and completed operations and personal injury insurance, in a minimum amount of two million dollars ($2,000,000) per occurrence, and an annual aggregate of not less than five million dollars ($5,000,000), endorsed to provide contractual liability in said amount, specifically covering Seller’s obligations under this Agreement and including Buyer as an additional named insured. (ii) An umbrella insurance policy in a minimum limit of liability of ten million dollars ($10,000,000).
(iii) Defense costs shall be provided as an additional benefit and not included within the limits of liability. Such insurance shall contain standard cross-liability and severability of interest provisions.
(c) Business Auto.
(i) Business auto insurance for bodily injury and property damage with limits of one million dollars ($1,000,000) per occurrence. (ii) Such insurance shall cover liability arising out of Seller’s use of all owned (if any), non-owned and hired vehicles, including trailers or semi-trailers in the performance of this Agreement.
(d) Construction All-Risk Insurance. During the construction of the Project prior to the Commercial Operation Date, construction all-risk form property insurance covering the Project during such construction periods, and naming Seller (and Lender if any) as the loss payee.
(e) Contractor’s Pollution Liability.
(i) If the scope of Work involves areas of known pollutants or contaminants, pollution liability coverage will be required to cover bodily injury, property damage, including clean-up costs and defense costs resulting from sudden, and accidental conditions, including the discharge, dispersal, release or escape of smoke, vapors, soot, fumes, acids, alkalis, toxic chemicals, hydrocarbons, liquids or gases, waste materials or other irritants, contaminants or pollutants into or upon land, the atmosphere or any water course or body of water shall be maintained.
(ii) The limit will be at least two million dollars ($2,000,000.00) each occurrence for bodily injury and property damage.
(iii) The policy will endorse Buyer as additional insured.

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16.2 Evidence of Insurance. Within ten (10) days after the Effective Date and upon annual renewal thereafter, Seller shall deliver to Buyer certificates of insurance evidencing the coverage required under this Agreement. These certificates shall specify that Buyer shall be given at least thirty (30) days prior Notice by Seller in the event of any material modification, reduction, cancellation or termination of coverage. Such insurance shall be primary coverage without right of contribution from any insurance of Buyer.

16.3 Failure to Comply. If Seller fails to comply with any of the provisions of this Article 16, Buyer may, but is not obligated, to purchase the insurance coverage required under Section 16.1 and set off the cost thereof from any amounts owed by Buyer to Seller under this Agreement.

ARTICLE 17: RECORDS AND AUDIT RIGHTS

17.1 Operations Logs. Seller shall maintain a complete and accurate log of all material operations on a daily basis. Such log will include, but not be limited to, information on charging, discharging, availability, maintenance performed, outages, electrical characteristics of the energy storage systems and similar information relating to the availability, testing and operation of the Project. Seller shall provide this information electronically to Buyer on a monthly basis. At the request of Buyer, the CPUC, or the staff of the CPUC, Seller shall provide all records demonstrating that the Project is operated and maintained in accordance with Requirements.

17.2 Records and Audit.
(a) Seller shall provide access to such financial records and personnel required by Buyer in order to facilitate Buyer’s compliance with applicable Law and Generally Accepted Accounting Principles.
(b) To facilitate payment and verification, each Party shall maintain all books and records necessary for billing and payments, including copies of all invoices under this Agreement, for a period of at least five (5) years or as otherwise required by Law. Seller will make all records available to Buyer at its principal place of business during normal working hours.

17.3 General Audit Right. Buyer has the right during normal working hours, and after reasonable Notice, to examine Seller’s records to the extent reasonably necessary to verify (a) Seller’s compliance with this Agreement (including Section 14.4), (b) the accuracy of any statement including the Project Safety Plan or other documents that supplement this Agreement, and (c) any charge, or computation made pursuant to this Agreement. If such examination reveals any material inaccuracy, necessary adjustments shall be made promptly.

17.4 State Auditor. In accordance with Government Code Section 8546.7, Seller may be subject to audit by the California State Auditor with regard to Seller's performance of this Agreement if the compensation under this Agreement exceeds ten thousand dollars ($10,000.00).

17.5 Data Request Cooperation. Each Party shall use reasonable efforts to assist the other Party in gathering information for and preparing responses to data requests and other inquiries from Governmental Authorities or Public Records Act requests that are related to or

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associated with the Project, delivery of Product or this Agreement, subject to the requirements of Article 20.

17.6 Access Rights. Buyer, its authorized agents, employees and inspectors, have, while observing and abiding by safety and security procedures of the Parties, the right of ingress to and egress from the Project, including the Site(s) with reasonable advance Notice and for any purposes connected with this Agreement. To the extent reasonably possible, Buyer will limit its requests to access the Project or the Site to normal business hours and coordinate its emergency activities with the safety and security departments, if any, of the Project operator. Seller shall keep Buyer advised of current procedures for contacting the Project operator’s safety and security departments.

ARTICLE 18: ASSIGNMENT

18.1 General Prohibition on Assignments. Except as provided below, neither Party may assign this Agreement or its rights or obligations under this Agreement, without the prior written consent of the other Party, which consent shall not be unreasonably withheld, conditioned or delayed. Any Change of Control of Seller or direct or indirect change of control of Buyer (whether voluntary or by operation of law) will be deemed an assignment and will require the prior written consent of the other Party, which consent shall not be unreasonably withheld, conditioned or delayed.

18.2 Collateral Assignment.
(a) Subject to the provisions of this Section 18.2, Seller has the right to assign this Agreement as collateral for any financing or refinancing of the Project. (b) In connection with any collateral assignment of this Agreement for purposes of the financing or refinancing of the Project by Seller, Buyer agrees to work in good faith with Seller and Lender to agree upon a consent to collateral assignment of this Agreement (“Collateral Assignment Agreement”). The Collateral Assignment Agreement must be in form and substance agreed to by Buyer, Seller and Lender.

18.3 Permitted Assignment by Seller. Except as may be precluded by, or would cause Buyer to be in violation of the Political Reform Act (Cal. Gov. Code section 81000 et seq.) or the regulations thereto, Cal. Government Code section 1090, Buyer’s Conflict of Interest Code/Policy or any other conflict of interest Law, Seller may, without the prior written consent of Buyer, transfer or assign this Agreement, including through a Change of Control, to an Affiliate of Seller.

18.4 Permitted Assignment by Buyer. Buyer may assign its interest in this Agreement to Town of Apple Valley without Seller’s consent, provided that Town of Apple Valley is a validly existing community choice aggregator, duly organized, validly existing and in good standing under the laws of the State of California and the rules, regulations and orders of the CPUC at such time and either (i) Town of Apple Valley and this Agreement are still subject to a Member Lockbox Arrangement for the benefit of Seller in accordance with Section 10.5 or (ii) Town of Apple Valley has provided other performance assurance reasonably acceptable to Seller; provided, further, that in each such case, no fewer than fifteen (15) Business Days before such assignment Buyer (x) notifies Seller of such assignment and (y) provides to Seller a written agreement signed by the Person to which Buyer wishes to assign its interests stating that such Person agrees to assume all

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of Buyer’s obligations and liabilities under this Agreement. Any assignment by Buyer, its successors or assigns under this Section 18.4 shall be of no force and effect unless and until such Notice and agreement by the assignee have been received and accepted by Seller.

18.5 Unauthorized Assignment; Costs.
(a) Any assignment or purported assignment in violation of this Article 18 is void.
(b) No assignment of this Agreement shall be effective unless such assignment is memorialized in a written agreement signed by the assignee and, except in connection with a collateral financing, in which agreement the assignee assumes all of the assignor’s obligations and liabilities under this Agreement.
(c) Seller shall be responsible for Buyer’s reasonable costs associated with the preparation, review, execution and delivery of documents in connection with any assignment of this Agreement, including without limitation reasonable attorneys’ fees.

ARTICLE 19: DISPUTE RESOLUTION

19.1 Governing Law. This Agreement and the rights and duties of the Parties hereunder shall be governed by and construed, enforced and performed in accordance with the laws of the State of California, without regard to principles of conflicts of law. The Parties agree that any suit, action or other legal proceeding by or against any Party (or its Affiliates or designees) with respect to or arising out of this Agreement shall be brought in the federal courts of the United States Central District of California, or the courts of the State of California sitting in the County of Los Angeles, California.

19.2 Dispute Resolution. In the event of any dispute arising under this Agreement, within ten (10) days following the receipt of a written Notice from either Party identifying such dispute, the Parties shall meet, negotiate and attempt, in good faith, to resolve the dispute quickly, informally and inexpensively. If the Parties are unable to resolve a dispute arising hereunder within the earlier of either thirty (30) days of initiating such discussions, or within forty (40) days after Notice of the dispute, the parties shall submit the dispute to mediation prior to seeking any and all remedies available to it at law in or equity. The Parties will cooperate in selecting a qualified neutral mediator selected from a panel of neutrals and in scheduling the time and place of the mediation as soon as reasonably possible, but in no event later than thirty (30) days after the request for mediation is made. The Parties agree to participate in the mediation in good faith and to share the costs of the mediation, including the mediator’s fee, equally, but such shared costs shall not include each Party’s own attorneys’ fees and costs, which shall be borne solely by such Party. If the mediation is unsuccessful, then either Party may seek any and all remedies available to it at law or in equity, subject to the limitations set forth in this Agreement. To the fullest extent permitted under applicable Law, any statute of limitations applicable to a dispute that is mediated by the Parties pursuant to this Agreement shall toll during any period in which such dispute is being mediated in accordance with this Section 19.2.

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ARTICLE 20: CONFIDENTIAL INFORMATION

20.1 Confidential Information. Throughout the Term, neither Party shall disclose (a) the non-public terms or conditions of this Agreement or (b) information disclosed to such Party by the other Party that is (i) marked or expressly identified as “confidential” and (ii) accompanied by a statutory reference to the applicable section of the Public Records Act pursuant to which such information may be kept confidential (collectively, “Confidential Information”) to a third party.

20.2 Permitted Disclosures. A Party may disclose Confidential Information: (a) to the Party’s Affiliates and the Party’s and its Affiliate’s employees, counsel, accountants, advisors, lenders, or equity investors who have a need to know such information and have agreed to keep such terms confidential; (b) in order to comply with any applicable Law or any exchange, regulation, Balancing Authority, control area or Transmission Provider rule, or order issued by a court or entity with competent jurisdiction over the disclosing Party (“Disclosing Party”), other than to those entities set forth in subsection (c); or (c) in order to comply with any applicable regulation, rule, or order of the CPUC, CEC, or FERC.
(a) Procedure for Permitted Disclosures. In connection with requests made pursuant to Section 20.2(b) (“Disclosure Order”), each Party shall, to the extent practicable, use reasonable efforts to: (A) Notify the other Party prior to disclosing the Confidential Information and (B) prevent or limit such disclosure. After using such reasonable efforts, the Disclosing Party shall not be: (I) prohibited from complying with a Disclosure Order or (II) liable to the other Party for monetary or other damages incurred in connection with such disclosures of the Confidential Information.
(b) Disclosure Requests. If a Party (“Receiving Party”) receives a request from a third party for access to, or inspection, disclosure or copying of, any of the other Party’s (the “Supplying Party”) Confidential Information (“Disclosure Request”), then the Receiving Party shall provide Notice and a copy of the Disclosure Request to the Supplying Party promptly after receipt of the Disclosure Request. Within three (3) Business Days of receipt of such Notice, the Supplying Party may provide a Notice to the Receiving Party stating that the Supplying Party believes there are reasonable legal grounds for denying or objecting to the Disclosure Request and will seek a protective order or other judicial determination to protect the confidential information, in such case, the Supplying Party will cover all of its own costs and further agrees to indemnify and pay any and all costs incurred by Receiving Party as a result of the Supplying Party’s attempts to protect from disclosure the information. If the Supplying Party does not seek or does not receive a protective order or other judicial determination protecting the Confidential Information, the Receiving Party may disclose the Confidential Information, which disclosure will not be considered a violation of this Agreement. The Parties recognize that Buyer is a public entity subject to the provisions of the California Public Records Act, and that disclosures made thereunder shall not be considered a violation of this Agreement.

20.3 Remedies. Except as provided in Section 20.2 with respect to the Parties’ permitted disclosures, the Parties shall be entitled to all remedies available at law or in equity to enforce, or seek relief in connection with, this confidentiality obligation.

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ARTICLE 21: GENERAL PROVISIONS

21.1 Entire Agreement; Integration; Exhibits. This Agreement constitutes the entire agreement and understanding between Seller and Buyer with respect to the subject matter hereof and supersedes all prior agreements relating to the subject matter hereof, which are of no further force or effect. The Cover Sheet and any exhibit, appendix, or other attachment hereto is an integral part hereof and is made a part of this Agreement by reference. This Agreement shall be considered for all purposes as prepared through the joint efforts of the Parties and shall not be construed against one Party or the other as a result of the preparation, substitution, submission or other event of negotiation, drafting or execution hereof.

21.2 Amendments. This Agreement may only be amended, modified or supplemented by an instrument in writing executed by duly authorized representatives of Seller and Buyer; provided, that, for the avoidance of doubt, this Agreement may not be amended by electronic mail communications.

21.3 Survival. Applicable provisions of this Agreement shall continue in effect after termination, to the extent necessary to enforce or complete the duties, obligations or responsibilities of the Parties arising prior to termination. Notwithstanding anything to the contrary in this Agreement, (i) all rights under Sections 15.1 through 15.5 (Indemnities) and any other indemnity rights survive the end of the Term without limit, (ii) all audit rights under Sections

17.2 and 17.3 survive the end of the Term for an additional one (1) year, or as required by applicable Law, (iii) all rights and obligations under Article 20 (Confidentiality) survive the end of the Term without limit, and (iv) all provisions relating to limitations of liability survive without limit.

21.4 Waivers. Waiver by a Party of any default by the other Party shall not be construed as a waiver of any other default. Any waiver of a default under this Agreement must appear in a writing signed by the waiving Party.

21.5 No Agency, Partnership, Joint Venture or Lease. Seller and the agents and employees of Seller shall, in the performance of this Agreement, act in an independent capacity and not as officers or employees or agents of Buyer. Under this Agreement, Seller and Buyer intend to act as Product seller and Product purchaser, respectively, and do not intend to be treated as, and shall not act as, partners in, co-venturers in or lessor/lessee with respect to the Project, the Product or any business related to the Project. This Agreement shall not impart any rights enforceable by any third party other than a permitted successor or assignee bound to this Agreement or, to the extent set forth herein, any Lender or indemnitee. In no event shall Buyer’s receipt or review of any Seller submission, or Buyer’s monitoring of Project data or cooperation in Project operations be construed as an assumption of any responsibility, liability or obligation of Seller for the design, construction or operation of the Project.

21.6 Severability. In the event that any provision of this Agreement is unenforceable or held to be unenforceable, the Parties agree that all other provisions of this Agreement have force and effect and shall not be affected thereby. The Parties shall, however, use their best endeavors to agree on the replacement of the void, illegal or unenforceable provision(s) with legally

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acceptable clauses which correspond as closely as possible to the sense and purpose of the affected provision and this Agreement as a whole.

21.7 Mobile Sierra. Notwithstanding any provision of this Agreement, neither Party shall seek, nor shall they support any third party seeking, to prospectively or retroactively revise the rates, terms or conditions of service of this Agreement through application or complaint to the FERC pursuant to the provisions of the Federal Power Act, absent prior written agreement of the Parties. Further, absent the prior written agreement in writing by both Parties, the standard of review for changes to the rates, terms or conditions of service of this Agreement proposed by a Party, a non-Party, or the FERC acting sua sponte shall be the “public interest” standard of review set forth in United States Gas Pipe Line Co. v. Mobile Gas Service Corp., 350 U.S. 332 (1956) and Federal Power Commission v. Sierra Pacific Power Co., 350 U.S. 348 (1956), and clarified by Morgan Stanley Capital Group, Inc. v. Public Util. Dist. No. 1 of Snohomish, 554 U.S. 527 (2008) and NRG Power Mrkt’g, LLC v. Maine Pub. Util. Comm’n, 558 U.S. 165 (2010).

21.8 Counterparts. This Agreement may be executed in one or more counterparts, all of which taken together shall constitute one and the same instrument and each of which shall be deemed an original.

21.9 Electronic Delivery. This Agreement may be duly executed and delivered by a Party by execution and electronic format (including portable document format (.pdf)) delivery of the signature page of a counterpart to the other Party, provided that any digital signatures are in compliance with California Code of Regulations, Title 2, Division 7, Chapter 10, Sections 22000 – 22005.

21.10 No Recourse to Members of Buyer. Buyer is organized as a Joint Powers Authority in accordance with the Joint Exercise of Powers Act of the State of California (Government Code Section 6500, et seq.) pursuant to its Joint Powers Agreement and is a public entity separate from its constituent members. Except as set forth in Section 21.11, Buyer shall solely be responsible for all debts, obligations and liabilities accruing and arising out of this Agreement. Except as otherwise set forth in this Agreement with respect to the Member Lockbox Arrangement, Seller shall have no rights and shall not make any claims, take any actions or assert any remedies against any of Buyer’s constituent members, or the employees, directors, officers, consultants or advisors or Buyer or its constituent members, in connection with this Agreement.

21.11 Lockbox Account. For so long as the Member Lockbox Arrangement exists, Buyer’s obligations to make payments with respect to this Agreement are to be made solely from the Member Lockbox Account, as set forth in the applicable Member Security Agreement. For so long as either (a) the Member Lockbox Arrangement exists or (b) Member has provided and continues to maintain Member Performance Security for the benefit of Seller, obligations to make payments under this Agreement do not constitute any kind of indebtedness of Member or create any kind of lien on, or security interest in, any property or revenues of Member, except as set forth in the Member Lockbox Arrangement or Member Performance Security, as applicable.

21.12 Forward Contract. The Parties intend that this Agreement constitutes a “forward contract” within the meaning of the U.S. Bankruptcy Code, and Buyer and Seller are “forward contract merchants” within the meaning of the U.S. Bankruptcy Code. Each Party agrees that, for

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all purposes of this Agreement, each Party waives and agrees not to assert the applicability of the provisions of 11 U.S.C. § 366 in any bankruptcy proceeding wherein such Party is a debtor. In any such proceeding, each Party further waives the right to assert that the other Party is a provider of last resort to the extent such term relates to 11 U.S.C. §366 or another provision of 11 U.S.C. § 101-1532.

21.13 Further Assurances. Each of the Parties hereto agree to provide such information, execute and deliver any instruments and documents and to take such other actions as may be necessary or reasonably requested by the other Party which are not inconsistent with the provisions of this Agreement and which do not involve the assumptions of obligations other than those provided for in this Agreement, to give full effect to this Agreement and to carry out the intent of this Agreement.

ARTICLE 22: NOTICES

22.1 Addresses for the Delivery of Notices. Any Notice required, permitted, or contemplated hereunder shall be in writing, shall be addressed to the Party to be notified at the address set forth on Appendix VIII or at such other address or addresses as a Party may designate for itself from time to time by Notice hereunder.

22.2 Time of Delivery. Each Notice required, permitted, or contemplated hereunder shall be deemed to have been validly served, given or delivered as follows: (a) if sent by United States mail with proper first class postage prepaid, three (3) Business Days following the date of the postmark on the envelope in which such Notice was deposited in the United States mail; (b) if sent by a regularly scheduled overnight delivery carrier with delivery fees either prepaid or an arrangement with such carrier made for the payment of such fees, the next Business Day after the same is delivered by the sending Party to such carrier; (c) if sent by electronic communication (including electronic mail or other electronic means) and if concurrently with the transmittal of such electronic communication the sending Party provides a copy of such electronic Notice by hand delivery, United States mail, or express courier, at the time indicated by the time stamp upon delivery; or (d) if delivered in person, upon receipt by the receiving Party. Notwithstanding the foregoing, Notices of outages or other scheduling or dispatch information or requests, may be sent by electronic communication and shall be considered delivered upon successful completion of such transmission.

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SIGNATURES
IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed as of the Effective Date.

SANTA PAULA ENERGY STORAGE,
LLC
By:

Name:

Title:

CALIFORNIA CHOICE ENERGY
AUTHORITY, a California joint powers
authority
By:

Name:

Title:

Acknowledged: Town of Apple Valley, California (d/b/a Apple Valley Choice Energy)

TOWN OF APPLE VALLEY
By:

Name:

Title:

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APPENDIX I

DESCRIPTION OF PROJECT
The following describes the Project to be constructed, operated and maintained by Seller through the Term in accordance with the Agreement.

A. PROJECT DESCRIPTION
Project name: Santa Paula Energy Storage
Technology type: Lithium-Ion Battery Energy Storage
Project physical address: 132 North 13th Street, Santa Paula, CA 93060 Interconnection:

CAISO transmission access charge area (e.g. PG&E): SCE
Point of interconnection: SCE Wakefield Substation 66 kV bus Existing zone (e.g. NP-15): SP-15
PNode: TBD
CAISO Resource ID: TBD
B. PROJECT SIZE
Nameplate capacity (NQC): 15 MW

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The following describes the Operational Characteristics to determine the amount of Capacity Attributes of Product generated by the entire Project, including Capacity Attributes of Product associated with portions of the Project that are being purchased by third parties. The Capacity Attributes of Product being sold and transferred under this Agreement are limited to the Contract Amounts set forth on the Cover Sheet.

APPENDIX II

OPERATIONAL CHARACTERISTICS
The following describes the Operational Characteristics to determine the amount of Capacity Attributes of Product.

Physical Location and Point of Interconnection
Shall be as set forth in Appendix I-A.

Discharging and Charging
Maximum continuous discharge power (Dmax): 15 MW
Minimum continuous discharge power (Dmin): .25 MW
Maximum discharge duration at constant Dmax : 4 (hours) Maximum continuous charge power (Cmax): -15 MW
Minimum continuous charge power (Cmin): - .25 MW
Maximum charge duration at constant Cmax: 4.7 (hours)
Amount of Energy released to fully discharge: 60 MWh
Amount of Energy required to fully charge: 70.6 MWh
Round-trip efficiency: 85 %

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Ramp Rates
Dmin to Dmax: 15 MW/second
Cmin to Cmax: -15 MW/second
Dmax to Dmin: -15 MW/second
Cmax to Cmin: 15 MW/second
System Response Time
Idle to Dmax: 1 second
Idle to Cmax: 1 second
Dmax to Cmax: 1 second
Cmax to Dmax: 1 second
Dmin to Cmin: 1 second
Cmin to Dmin: 1 second
Discharge Start-up time (from notification to Dmin): 5 seconds Charge Start-up time (from notification to Cmin): 5seconds Discharge Start-up Fuel: 9 MMBtu
Starts and other Run Time Limitations
Start limitations: None
Run hour limitations: None
The minimum run time after a Discharge Start-up is 0 seconds The minimum run time after a Charge Start-up is 0 seconds The minimum down time after a shutdown is 0 seconds
Ancillary Services (defined terms below have the meaning found in the CAISO Tariff as of the Effective Date):

At ISO conditions, normal efficiency mode:

Spinning Reserves: Range: -15 to 15 MW
Non-Spinning Reserves: Range: -15 to 15 MW

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Regulation Up: Range: -15 to 15 MW
Regulation Down: Range: -15 to 15 MW
Black Start capability (if applicable):

Other:

Voltage Services
Generator voltage regulation range (+/-): 0.90 volts per unit Maximum reactive power leading: 15 mega volt amps reactive (MVar) Maximum reactive power lagging: 15 mega volt amps reactive (MVar)

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APPENDIX III

PROGRESS REPORTING FORM
Each Progress Report must include the following items:

1. Executive Summary.

2. Project description.

3. Site plan of the Project.

4. Description of any material planned changes to the Project or the Site.

5. Schedule showing progress on Project construction generally and achieving the Commercial Operation Milestone and the Initial Delivery Date.

6. Summary of activities during the previous month, including any OSHA labor hour reports.

7. Forecast of activities scheduled for the current calendar quarter.

8. Written description about the progress relative to the Commercial Operation Milestone and the Initial Delivery Date, including whether Seller is on schedule with respect to the same.

9. List of issues that are likely to potentially affect achievement of the Commercial Operation Milestone and the Initial Delivery Date.

10. Progress and schedule of the EPC Contract, all major equipment supply agreements, Governmental Approvals, technical studies, and financing arrangements.

11. Pictures, in sufficient quantity and of appropriate detail, in order to document construction and interconnection progress.

12. Compliance with workforce and prevailing wage requirements.

13. Any other documentation reasonably requested by Buyer.

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IV - 1
Energy Storage Resource Adequacy Agreement Form

APPENDIX IV

CERTIFICATION

FOR COMMERCIAL OPERATION
This certification of commercial operation (“Certification”) is delivered by each of _______ (“Seller”) and ________ (“Engineer”) to California Choice Energy Authority, a California joint powers authority (“Buyer”) in accordance with the terms of that certain Energy Storage Resource Adequacy Agreement dated _______ (“Agreement”) by and between Seller and Buyer. All capitalized terms used in this Certification but not otherwise defined herein shall have the respective meanings assigned to such terms in the Agreement.

Seller and Engineer each hereby certifies and represents to Buyer the following, severally and not jointly:
(1) The Project became Commercially Operable on [ ].
(2) The Project has been constructed in accordance with Appendix I of the Agreement. (3) The Project has been constructed in accordance with the Project Safety Plan. (4) The Project is capable of producing and delivering Capacity Attributes of Product in the Contract Amounts, and a performance test was conducted to confirm this capability.
(5) Seller has designed and built the Project to have a design life for the Delivery Term in accordance with Prudent Operating Practices.
(6) The design and construction of the Project was carried out by the original equipment manufacturer or other qualified organization in accordance with the designs and requirements of the original equipment manufacturer.

SELLER: ENGINEER:

Signature: Signature:

Name: Name:

Title: Title:

Date: Date:

License
Number:

LPE Stamp:

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V-A - 1
Energy Storage Resource Adequacy Agreement Form

APPENDIX V-A

FORM OF LETTER OF CREDIT
[Issuing Bank Letterhead and Address]
IRREVOCABLE STANDBY LETTER OF CREDIT NO. [XXXXXXX]
Date:

Bank Ref.:

Amount: US$[XXXXXXXX]
Expiry Date:

Beneficiary:

California Choice Energy Authority
44933 Fern Avenue
Lancaster, CA 93534
Attn: Executive Director
Ladies and Gentlemen:

By the order of __________ (“Applicant”), we, [insert bank name and address] (“Issuer”) hereby issue our Irrevocable Standby Letter of Credit No. [XXXXXXX] (the “Letter of Credit”) in favor of California Choice Energy Authority, a California joint powers authority (“Beneficiary”), for an amount not to exceed the aggregate sum of U.S. $[XXXXXX] (United States Dollars [XXXXX] and 00/100), pursuant to that certain Energy Storage Resource Adequacy Agreement dated as of ______ and as amended (the “Agreement”) between Applicant and Beneficiary. This Letter of Credit shall become effective immediately and shall expire on [Insert Date] which is one year after the issue date of this Letter of Credit, or any expiration date extended in accordance with the terms hereof (the “Expiration Date”).

Funds under this Letter of Credit are available to Beneficiary by presentation on or before the Expiration Date of a dated statement purportedly signed by your duly authorized representative, in the form attached hereto as Exhibit A, containing one of the two alternative paragraphs set forth in paragraph 2 therein, referencing our Letter of Credit No. [XXXXXXX] (“Drawing Certificate”).

The Drawing Certificate may be presented by (a) physical delivery, (b) as a PDF attachment to an e-mail to [bank email address] or (c) facsimile to [bank fax number [XXX-XXX-XXXX]] confirmed by [e-mail to [bank email address]]. Transmittal by facsimile or email shall be deemed delivered when received.

The original of this Letter of Credit (and all amendments, if any) is not required to be presented in connection with any presentment of a Drawing Certificate by Beneficiary hereunder in order to receive payment.

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V-A - 2
Energy Storage Resource Adequacy Agreement Form
We hereby agree with the Beneficiary that all documents presented under and in compliance with the terms of this Letter of Credit, that such drafts will be duly honored upon presentation to the Issuer on or before the Expiration Date. All payments made under this Letter of Credit shall be made with Issuer’s own immediately available funds by means of wire transfer in immediately available United States dollars to Beneficiary’s account as indicated by Beneficiary in its Drawing Certificate or in a communication accompanying its Drawing Certificate.

Partial draws are permitted under this Letter of Credit, and this Letter of Credit shall remain in full force and effect with respect to any continuing balance.

It is a condition of this Letter of Credit that the Expiration Date shall be deemed automatically extended without an amendment for a one year period beginning on the present Expiration Date hereof and upon each anniversary for such date, unless at least one hundred twenty (120) days prior to any such Expiration Date we have sent to you written notice by overnight courier service that we elect not to extend this Letter of Credit, in which case it will expire on the date specified in such notice. No presentation made under this Letter of Credit after such Expiration Date will be honored.

Notwithstanding any reference in this Letter of Credit to any other documents, instruments or agreements, this Letter of Credit contains the entire agreement between Beneficiary and Issuer relating to the obligations of Issuer hereunder.

This Letter of Credit is subject to the Uniform Customs and Practice for Documentary Credits (2007 Revision) International Chamber of Commerce Publication No. 600 (the “UCP”), except to the extent that the terms hereof are inconsistent with the provisions of the UCP, including but not limited to Articles 14(b) and 36 of the UCP, in which case the terms of this Letter of Credit shall govern. In the event of an act of God, riot, civil commotion, insurrection, war or any other cause beyond Issuer’s control (as defined in Article 36 of the UCP) that interrupts Issuer’s business and causes the place for presentation of the Letter of Credit to be closed for business on the last day for presentation, the Expiration Date of the Letter of Credit will be automatically extended without amendment to a date thirty (30) calendar days after the place for presentation reopens for business.

Please address all correspondence regarding this Letter of Credit to the attention of the Letter of Credit Department at [insert bank address information], referring specifically to Issuer’s Letter of Credit No. [XXXXXXX]. For telephone assistance, please contact Issuer’s Standby Letter of Credit Department at [XXX-XXX-XXXX] and have this Letter of Credit available. [Bank Name]
___________________________
[Insert officer name]
[Insert officer title]

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V-A - 3
Energy Storage Resource Adequacy Agreement Form
(DRAW REQUEST SHOULD BE ON BENEFICIARY’S LETTERHEAD)
Drawing Certificate
[Insert Bank Name and Address]
Ladies and Gentlemen:

The undersigned, a duly authorized representative of California Choice Energy Authority, a California joint powers authority, 44933 Fern Avenue Lancaster, CA 93534, as beneficiary (the “Beneficiary”) of the Irrevocable Letter of Credit No. [XXXXXXX] (the “Letter of Credit”) issued by [insert bank name] (the “Bank”) by order of __________ (the “Applicant”), hereby certifies to the Bank as follows:

1. Applicant and Beneficiary are party to that certain Energy Storage Resource Adequacy Agreement dated as of ___________, 2022 (the “Agreement”).

2. Beneficiary is making a drawing under this Letter of Credit in the amount of U.S. $___________ because a Seller’s Event of Default (as such term is defined in the Agreement) has occurred or other occasion provided for in the Agreement where Beneficiary is authorized to draw on the Letter of Credit has occurred.

OR
Beneficiary is making a drawing under this Letter of Credit in the amount of U.S. $___________, which equals the full available amount under the Letter of Credit, because Applicant is required to maintain the Letter of Credit in force and effect beyond the expiration date of the Letter of Credit but has failed to provide Beneficiary with a replacement Letter of Credit or other acceptable instrument within thirty (30) days prior to such expiration date.

3. The undersigned is a duly authorized representative of California Choice Energy Authority and is authorized to execute and deliver this Drawing Certificate on behalf of Beneficiary.

You are hereby directed to make payment of the requested amount to California Choice Energy Authority by wire transfer in immediately available funds to the following account:
[Specify account information]
California Choice Energy Authority
_______________________________
Name and Title of Authorized Representative
Date___________________________

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Apple Valley City CouncilMay 24, 2022

Apple Valley City Council
May 24, 2022