Gardena City Council
August 13, 2024

Recusal Rules

Business Entity Disclosures. The official must disclose “the name of the business entity, [a] general description of the business’ activity, and any position held.” Real Property Disclosures. The official must disclose one of the following: “Real property address, assessor’s number, or identification that the property is the official’s personal residence.”

Source of Income. The official must disclose the name of the source of income.

Source of Gift. The official must disclose the name of the source of a gift.

Personal Financial Effect. The official must disclose the nature of the expense, liability, asset, or income affected.

Timing of Disclosure

The public identification must be made immediately before the consideration of the agenda item. If the official leaves the meeting before the agenda item is called, the official must “publicly identify the agenda item and the financial interest prior to leaving the meeting.” If the individual arrives after the consideration of the item where the individual was disqualified, s/he must publicly identify the agenda item and financial interest immediately upon joining the meeting. It remains legal to avoid any disclosure requirements by entirely absenting oneself from a meeting in its entirety.

Identification of conflicts for closed sessions must be made orally during open session before the body goes into closed session. However, the identification may be limited to a declaration that the recusal is due to a conflict of interest under Section 87100.

Leaving the Room

Once an official identifies the conflict, s/he must generally step down from the dais and leave the room and refrain from participating in the decision. If the item is on the consent calendar, the official may remain in the room. However, we suggest that if the item is pulled from the consent calendar for discussion, then the official leave the room.

Special rules apply when the official has a personal interest in the agenda item, including interests in real property owned by the official or immediate family members or business entities owned by the official or immediate family members. In that case, the official must leave the dais and speak or observe from the area reserved for the public relating to his or her personal interest.

Real Property Rules

An official has an interest in real property which s/he owns, including a personal residence. A financial interest includes any real property in which the official has a direct

Recusal Rules

or indirect interest of at least $2,000. This can include a pro rata share of interests in real property of a business entity or trust in which the individual or immediate family owns, directly, indirectly, or beneficially, a 10 percent interest or greater. Month- to-month tenancies are not considered an interest in real property. A financial effect need only be reasonably foreseeable. This standard does not require as much certainty as “substantially likely” which was considered to require more than 50 percent likely.

For real property, the FPPC includes specific presumptions.

• Property within 500 foot radius - If an official’s property is within 500 feet of a decision, the official may not participate unless there is clear and convincing evidence that the decision will not have any measurable impact on the official’s property.

• P roperty between 501 – 1,000 foot radius – If an official’s property is within this range, the official must consider a number of factors to determine whether participation would be allowed including: whether the decision will impact the development potential or income- producing potential of his or her property; or whether the decision would impact the use of his or her property or the character of the neighborhood due to such things as noise, traffic, view or privacy. If it is reasonably foreseeable that there will be a material financial effect (i.e., $2,000 or more), then the official may not participate in the decision.

• Property outside of a 1,000 foot radius – If the property is outside of a 1,000 foot radius, then there is a presumption that the financial effect is not material. This presumption can only be rebutted if there is clear and convincing evidence that the decision would have a “substantial effect on the official’s property.”

• Leasehold interest – If the official has a leasehold interest as opposed to an ownership interest, the interest would be material if the decision changes the termination date of the lease, or affects the potential rental value of the property, changes the actual or allowable use of the property, or impacts the official’s use and enjoyment of the property.

The conflict of interest rules contain an exemption for when the decision on a financial interest is indistinguishable from the effect on the public generally. In order for this to apply, the official must establish that a significant segment of the public is affected and effect on the official’s financial interest is not unique as compared to the effect on the significant segment. With relation to the official’s primary residence, a significant segment of the public is at least 15 percent of residential real property within the jurisdiction.

Housing Element Implementation/Land Use Plan/Zoning Ordinance

In the coming months, the Planning Commission and City Council will be asked to readopt the Housing Element, adopt the Land Use Element and adopt changes to the Zoning Ordinance and Zoning Map. Staff has made the necessary computations and determined that 58% of all R-1 properties and 55% of all R -2 properties are within 1,000 feet of the new housing overlay zones. Therefore, no official should be disqualified from participating in the decisions relating to these items based on ownership of their primary

Recusal Rules

residence. This analysis would not apply to individual projects such as the developments being proposed on Normandie and Western.

If you have other ownership interests in real property, please contact the City Attorney’s office so we may discuss this with you.

City of Gardena
Gardena City Council Meeting

AGENDA REPORT SUMMARY
Agenda Item No. 8.G
Section: CONSENT CALENDAR
Meeting Date: August 13, 2024

TO: THE HONORABLE MAYOR AND MEMBERS OF THE GARDENA CITY COUNCIL AGENDA TITLE:

RESOLUTION NO. 6679
, Authorizing the City Manager or Designee to
Execute Agreements with the California Department of Transportation for the GTrans Comprehensive Operations Analysis Project
CONTACT: TRANSPORTATION
COUNCIL ACTION REQUIRED:

RECOMMENDATION AND STAFF SUMMARY:

Staff recommends the City Council adopt Resolution No.
6679
, which authorizes the City
Manager or designee to execute all agreements with the California Department of Transportation (Caltrans) for the GTrans Comprehensive Operations Analysis Project.

GTrans was recently awarded grant funding under the California Department of Transportation's Fiscal Year 2024-25 Sustainable Communities, Climate Adaptation and Strategic Partnership Grant Program for its Comprehensive Operations Analysis Project. With the goal of increasing system ridership, GTrans plans to evaluate its current service and routing to ensure it is aligned with the new, post-COVID-19-pandemic era ridership patterns.

Along with recent and planned developments and trip generators, this in-depth analysis will help determine how GTrans’ existing service (alignment, performance, reliability, and frequency) can become a more attractive option for current and new customers. The analysis will then be translated into phased improvements that will ultimately increase transit ridership, and improve air quality and mobility for the underserved communities in which GTrans traverses.

Caltrans awarded GTrans $442,650, with a local match provided by GTrans of $57,350 (11.47%), for a total project value of $500,000. Funds will be allocated on a reimbursement basis.

Therefore staff requests that the City Council adopt Resolution No. 6679 authorizing the City Manager or designee to execute agreements with the California Department of Transportation for this project.

FINANCIAL IMPACT/COST:

The award is for $442,650 with a required local match of 11.47%, or $57,350. GTrans has sufficient funds in the FY25 and FY26 budgets to accomodate this match. There is no impact to the General Fund.

ATTACHMENTS:

Caltrans Sustainable Communities Grant RESO No. 6679 8_13_24.pdf

APPROVED:
___________________________________
Clint Osorio, City Manager
Resolution No. 6679

RESOLUTION NO. 6679

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF GARDENA,

CALIFORNIA, AUTHORIZING THE CITY MANAGER OR DESIGNEE TO

EXECUTE AGREEMENTS WITH THE CALIFORNIA DEPARTMENT OF

TRANSPORTATION FOR THE GTRANS COMPREHENSIVE

OPERATIONS ANALYSIS PROJECT

WHEREAS, the City Council of the City of Gardena is eligible to receive Federal and/or State funding for certain transportation planning related plans, through the California Department of Transportation; and

WHEREAS, a Restricted Grant Agreement is needed to be executed with the California Department of Transportation before such funds can be reimbursed through the Transportation Planning Grant Program; and

WHEREAS, the City of Gardena wishes to delegate authorization to execute these agreements and any amendments thereto;

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF GARDENA , CALIFORNIA, DOES HEREBY FIND, DETERMINE, AND RESOLVE AS FOLLOWS:

That the City Council of the City of Gardena authorizes the City Manager, or designee, to execute all Restricted Grant Agreements and any amendments thereto with the California - Department of Transportation.

BE IT FURTHER RESOLVED that the City Clerk shall certify to the passage and adoption of this resolution; shall cause the same to be entered among the original resolutions of said City; and shall make a minute of the passage and adoption thereof in the rec ords of the proceedings of the City Council of said City in the minutes of the meeting at which the same is passed and adopted.

Passed, approved, and adopted this 13th day of August 2024.

_____________________________
Tasha Cerda, Mayor
City of Gardena, California
ATTEST:

___________________________
Mina Semenza, City Clerk

APPROVED AS TO FORM:

___________________________
Carmen Vasquez, City Attorney
Docusign Envelope ID: 23AC48B1-C575-4CB3-BB58-08681F02DA28

NOTICE OF CANCELLATION

City of Gardena

Planning & Environmental Quality Commission

Notice is hereby given that the regular meeting of the
Planning & Environmental Quality Commission
scheduled for August 6, 2024,
has been canceled.

The next regularly scheduled meeting will be held on
August 20, 2024, at 7:00 p.m.

Dated this
1st day of August 2024

/s/ MINA SEMENZA
City Clerk
City of Gardena
Gardena City Council Meeting

AGENDA REPORT SUMMARY
Agenda Item No. 16.A
Section: DEPARTMENTAL

ITEMS - PUBLIC WORKS
Meeting Date: August 13, 2024

TO: THE HONORABLE MAYOR AND MEMBERS OF THE GARDENA CITY COUNCIL AGENDA TITLE:

Authorize the Transfer Agreement Renewal Between the Los Angeles County Flood Control District and City of Gardena Pertaining to Safe, Clean Water Program (Measure W).

COUNCIL ACTION REQUIRED:

Staff Recommendations: Authorize the Transfer Agreement Renewal RECOMMENDATION AND STAFF SUMMARY:

On October 9, 2017, Assembly Bill (AB) 1180 (Holden) was signed in to law, which amended the Los Angeles County Flood Control Act and authorized the District to levy a tax to pay the costs and expenses of carrying out projects and programs to increase stormwater capture and reduce stormwater and urban runoff pollution in the District subject to voter approval.

Thereafter, the AB 1180 was amended into Measure W and was approved by the L.A. County voters on November 6, 2018. Funding is to be provided through a parcel tax of 2.5 cents per square foot of impermeable land areas (buildings, concrete, etc.) and Gardena is anticipated to receive approximately $820,000 per Fiscal Year.

The prior Transfer Agreement expired on June 30, 2024. The L.A. County Department of Public Works now requires a renewal and distributed the template for the next term of the Municipal Transfer Agreement on July 15, 2024 (attached), following the expiration of the existing agreement. This agreement, to be implemented between the County and the municipality, outlines the requirements for the annual plan, general terms and conditions, Nature Based Solutions (NBS) Best Management Practices, and Operations & Maintenance Guidance to maintain funding eligibility.

The City’s Annual Plan is to be submitted no later than 90 days before the start of each subsequent fiscal year (April 1st). Audit reports are due nine months after the end of each three-year period, and progress reports are due annually, six months after the close of the fiscal year.

Staff respectfully recommends that City Council authorize the Director of Public Works to execute the Transfer Agreement between the Los Angeles County Flood Control District and the City of Gardena pertaining to the Safe, Clean Water (SCW) Program, also known as Measure W, in a form approved by the City Attorney. This Agreement is to expire at the end of the 2027-2028 Fiscal Year.

FINANCIAL IMPACT/COST:

Funding Source: SCW Program (Measure W)
Anticipated Revenue: $820,000
ATTACHMENTS:

Attachement - SCWP-Transfer-Agreement-Municipal.pdf

APPROVED:
___________________________________
Clint Osorio, City Manager
Municipal Program
Agreement No. 2024MP27

TRANSFER AGREEMENT BETWEEN

THE LOS ANGELES COUNTY FLOOD CONTROL DISTRICT

AND CITY OF GARDENA
AGREEMENT NO. 2024MP27
SAFE, CLEAN WATER PROGRAM – MUNICIPAL PROGRAM
This Transfer Agreement, hereinafter referred to as “Agreement,” is entered into as of by and between the Los Angeles County Flood Control District, hereinafter referred to as "District," and City of Gardena, hereinafter referred to as "Municipality."
WHEREAS, District, pursuant to the Los Angeles Region Safe, Clean Water (SCW) Program ordinance (Chapter 16 of the Los Angeles County Flood Control District Code) and the SCW Program Implementation Ordinance (Chapter 18 of the Los Angeles County Flood Control District Code), administers the SCW Program for the purpose of funding Projects and Programs to increase stormwater and urban runoff capture and reduce stormwater and urban runoff pollution in the District;
WHEREAS, pursuant to Section 16.04.A.2. of the Los Angeles County Flood Control District Code, forty percent (40%) of annual SCW Program tax revenues shall be allocated to Municipalities within the District, in the same proportion as the amount of revenues collected within each Municipality, to be expended by those cities within the cities' respective jurisdictions and by the County within the unincorporated areas that are within the boundaries of the District, for the implementation, operation and maintenance, and administration of Projects and Programs, in accordance with the criteria and procedures established in this Chapters 16 and 18 of the Los Angeles County Flood Control District Code;
WHEREAS, pursuant to Section 16.05.A.1. of the Los Angeles County Flood Control District Code, prior to their receipt of SCW Program funds, Municipalities must enter into an agreement with the District to transfer SCW Program funds; WHEREAS, the County of Los Angeles Board of Supervisors has approved a standard template Agreement, as required by and in accordance with Section 18.09 of the Los Angeles County Flood Control District Code, for the transfer of SCW Program funds to Municipalities.

NOW, THEREFORE , in consideration of the promises, mutual representations, covenants and agreements in this Agreement, the District and the Municipality, each binding itself, its successors and assigns, do mutually promise, covenant, and agree as follows:

I. DEFINITIONS
The definitions set forth in Sections 16.03 and 18.02 of the Los Angeles County Flood Control District Code shall apply to this Agreement. In addition, the following definitions shall also apply:

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Agreement No. 2024MP27

“Agreement” means this Transfer Agreement, including all exhibits and attachments hereto.
“Annual Plan” means the plan referred to in Section 18.09.B.5 of the Code that includes the contents specified in Exhibit A.
"Code" means the Los Angeles County Flood Control District Code. “Days” means calendar days unless otherwise expressly indicated.
“Fiscal Year” means the period of twelve (12) months terminating on June 30 of any year. “Safe Clean Water (SCW) Program Payment” means the Municipality's annual allocation of SCW Program funds as described in Section 16.04.A.2. of the Code disbursed by the District to the Municipality.
“Year” means calendar year unless otherwise expressly indicated.

II. PARTY CONTACTS
The District and the Municipality designate the following individuals as the primary points of contact and communication regarding the Municipal Program and the administration and implementation of this Agreement.

Los Angeles County Flood Control District Municipality:

Name: Harris Harouny Name: Allan Rigg
Address: 900 S. Fremont Ave, Alhambra, CA 91803 Address: 1717 W. 162nd St, CA 90247-3778 Phone: (626) 300-2620 Phone: (310) 217-9571
Email: [email protected] Email: [email protected]

Either party to this Agreement may change the individual identified as the primary point of contact above by providing written notice of the change to the other party.

III. EXHIBITS INCORPORATED BY REFERENCE
The following exhibits to this Agreement, including any amendments and supplements hereto, are hereby incorporated herein and made a part of this Agreement:

EXHIBIT A – ANNUAL PLAN CONTENTS
EXHIBIT B – GENERAL TERMS AND CONDITIONS
EXHIBIT C – NATURE-BASED SOLUTIONS (Best Management Practices) EXHIBIT D – OPERATIONS AND MAINTENANCE GUIDANCE DOCUMENT

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Agreement No. 2024MP27

IV. MUNICIPAL PROGRAM IMPLEMENTATION
A. The Municipality shall annually prepare and submit to the District, an Annual Plan.

The Annual Plan shall be submitted not later than 90- days prior to the start of the Fiscal Year for which the Plan is prepared.

B. The Municipality shall utilize the SCW Program Payments in compliance with Chapters 16 and 18 of the Code.

C. The Municipality shall comply with the terms and conditions in Exhibits B, C, and D, of this Agreement, and all applicable provisions of Chapters 16 and 18 of the Code, specifically including, without limitation, Section 18.06.

V. SCW PROGRAM PAYMENTS TO MUNICIPALITIES
A. SCW Program Payments will generally be available for disbursement by December 31, provided a duly executed transfer agreement is in effect and subject to the Municipality's compliance with the conditions described in paragraph B, below; however the District may, in its discretion, change the date and number of the actual disbursements for any Fiscal Year based on the amount and timing of revenues actually collected by the District.

B. The District shall disburse the Municipality's SCW Program Payment upon satisfaction of the following conditions: (1) the District has received the Annual Progress/Expenditure Report required pursuant to Section 18.06.D of the Code; (2) the District has received Municipality's Annual Plan for that Fiscal Year, and (3) the Municipality has complied with the audit requirements of Section B-6 of Exhibit B.

C. Notwithstanding any other provision of this Agreement, no disbursement shall be made at any time or in any manner that is in violation of or in conflict with federal, state, County laws, policies, or regulations.

D. All disbursements shall be subject to and be made in accordance with the terms and conditions in this Agreement and Chapters 16 and 18 of the Code.

VI. TERM OF AGREEMENT
This Agreement shall expire at the end of the 2027-28 Fiscal Year. The parties shall thereafter enter into a new agreement based on the most recent standard template agreement approved by the Board.

Municipal Program
Agreement No. 2024MP27

IN WITNESS WHEREOF, this Agreement has been executed by the parties hereto.

City of Gardena:

By:

Name: Allan Rigg

Title: Director of Public Works

Date:

LOS ANGELES COUNTY
FLOOD CONTROL DISTRICT:

By:

Name:

Title:

Date:

ATTEST:

Mina Semenza, City Clerk

APPROVED AS TO FORM:

Carmen Vasquez, City Attorney

Municipal Program
Agreement No. 2024MP27

EXHIBIT A – ANNUAL PLAN CONTENTS
A-1. Description of all projects anticipated to be funded using the SCW Program Payment. Include a discussion of how the projects will result in the achievement of one or more SCW Program Goals, including quantitative targets and corresponding metrics for subsequent reporting of all applicable parameters.

A-2. Description of all programs anticipated to be funded using the SCW Program Payment. Include a discussion of how the programs will result in the achievement of one or more SCW Program Goals; including quantitative targets and corresponding metrics for subsequent reporting of all applicable parameters.

A-3. Description of all operation and maintenance activities anticipated to be funded using the SCW Program Payment. Include a discussion of how those activities will result in the achievement of one or more SCW Program Goals. Additional operation and maintenance activities, even if funded by other sources, should be referenced to provide an overview of anticipated overall project approach.

A-4. Description of the stakeholder and community outreach/engagement activities anticipated to be funded with the SCW Program Payment, including discussion of how local NGOs or CBOs will be involved, if applicable, and if not, why. Additional outreach/engagement activities, even if funded by other sources, should be referenced to provide an overview of anticipated overall project approach.

A-5. Description of post-construction monitoring for projects completed using the SCW Program Payment. Additional post -construction monitoring activities, even if funded by other sources, should be referenced to provide an overview of anticipated overall project approach.

A-6. Provide the status of any projects that have been awarded (or are seeking award of) Institute for Sustainable Infrastructure (ISI) verification, if applicable.

A-7. Provide the budget for the activities described in provisions A1 through A -5 SCW Program Payment.

Municipal Program
Agreement No. 2024MP27

EXHIBIT B – GENERAL TERMS AND CONDITIONS
B-1. Accounting and Deposit of Funding Disbursement

1. SCW Program Payments distributed to the Municipality shall be held in a separate interest-bearing account and shall not be combined with other funds. Interest earned from each account shall be used by the Municipality only for eligible expenditures consistent with the requirements of the SCW Program.

2. The Municipality shall not be entitled to interest earned on undisbursed SCW Program Payments; interest earned prior to disbursement is property of the District.

3. The Municipality shall operate in accordance with Generally Accepted Accounting Principles (GAAP).

4. The Municipality shall be strictly accountable for all funds, receipts, and disbursements for their SCW Program Payment.

B-2. Acknowledgement of Credit and Signage
The Municipality shall include appropriate acknowledgement of credit to the District’s Safe, Clean Water Program for its support when promoting activities funded with SCW Program funds or using any data and/or information developed SCW Program funds.

When the SCW Program Payment is used, in whole or in part, for construction of an infrastructure Project, signage shall be posted in a prominent location at Project site(s) or at the Municipality’s headquarters and shall include the Safe, Clean Water Program color logo and the following disclosure statement: “Funding for this project has been provided in full or in part from the Los Angeles County Flood Control District’s Safe, Clean Water Program.” At a minimum the sign shall be 2’ x 3’ in size. The Municipality shall also include in each of its contracts for work under this Agreement a provision that incorporates the requirements stated within this paragraph.

When the SCW Program Payment is used, in whole or in part, for a scientific study, the Municipality shall include the following statement in the study report: “Funding for this study has been provided in full or in part from the Los Angeles County Flood Control District’s Safe, Clean Water Program.” The Municipality shall also include in each of its contracts for work under this Agreement a provision that incorporates the requirements stated within this paragraph.

B-3. Acquisition of Real Property - Covenant
Any real property acquired in whole or in part with SCW Program funds shall be used for Projects and Programs that are consistent with the SCW Program Goals and with the provisions of Chapter 16 and 18 of the Code.

Any Municipality that acquires the fee title to real property using, in whole or in part, SCW Program funds shall record a document in the office of the Registrar-Recorder/County

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Clerk containing a covenant not to sell or otherwise convey the real property without the prior express written consent of the District, which consent shall not be unreasonably withheld.

B-4. Amendment
Except as provided in Section II of the Agreement, no amendment or variation of the terms of this Agreement shall be valid unless made in writing and signed by the parties. No oral or written understanding or agreement not incorporated in this Agreement is binding on any of the parties.

B-5. Assignment
The Municipality shall not assign this Agreement.

B-6. Audit and Recordkeeping

1. The Municipality shall retain for a period of seven (7) years, all records necessary in accordance with Generally Accepted Accounting Principles to determine the amounts expended, and eligibility of Projects implemented using SCW Program Payments. The Municipality, upon demand by authorized representatives of the District, shall make such records available for examination and review or audit by the District or its authorized representatives. Records shall include accounting records, written policies and procedures, contract files, original estimates, correspondence, change order files, including documentation covering negotiated settlements, invoices, and any other supporting evidence deemed necessary to substantiate charges related to SCW Program Payments and expenditures.

2. The Municipality is responsible for obtaining an independent audit to determine compliance with the terms and conditions of this Agreement and all requirements applicable to the Municipality contained in chapters 16 and 18 of the Code.

Municipality shall o btain an independent audit of their SCW Program Payments every three (3) years. Audits shall be funded with Municipal Program funds.

3. Municipality shall file a copy of all audit reports by the ninth (9 th) month from the
end of each three (3) year period to detail the preceding three (3) years of expenditures. Audit reports shall be posted on the District’s publicly accessible website. Due date example below.

Every Third Fiscal Year
Fiscal Year Audit Begins Audit Report Due to District
2023-24 7/1/2027 No later than 3/31/2028

4. Upon reasonable advanced request, the Municipality shall permit the Chief Engineer to examine the infrastructure Projects using SCW Program Payments.

The Municipality shall permit the authorized District representative, including the

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Agreement No. 2024MP27

Auditor-Controller, to examine, review, audit, and transcribe any and all audit reports, other reports, books, accounts, papers, maps, and other records that relate to the SCW Program Payments. Examination activities are considered District administration of the SCW Program.

5. Expenditures determined by an audit to be in violation of any provision of Chapters 16 or 18 of the Code, or of this Agreement, shall be subject to the enforcement and remedy provisions of Section 18.14 of the Code.

B-7. Availability of Funds
District’s obligation to disburse the SCW Program Payment is contingent upon the availability of sufficient funds to permit the disbursements provided for herein. If sufficient funds are not available for any reason including, but not limited to, failure to fund allocations necessary for disbursement of the SCW Program Payment, the District shall not be obligated to make any disbursements to the Municipality under this Agreement.

This provision shall be construed as a condition precedent to the obligation of the District to make any disbursements under this Agreement. Nothing in this Agreement shall be construed to provide the Municipality with a right of priority for disbursement over any other Municipality. If any disbursements due to the Municipality under this Agreement are deferred because sufficient funds are unavailable, it is the intention of the District that such disbursement will be made to the Municipality when sufficient funds do become available, but this intention is not binding. If this Agreement’s funding for any Fiscal Year is reduced or deleted by order of the Board, the District shall have the option to either cancel this Agreement with no liability occurring to the District or offer an amendment to the Municipality to reflect the reduced amount.

B-8. Choice of Law
The laws of the State of California govern this Agreement.

B-9. Claims
Any claim of the Municipality is limited to the rights, remedies, and claims procedures provided to the Municipality under this Agreement. Municipal expenditures of a SCW Program Payment that involves the District shall utilize a separate and specific agreement to that Project that includes appropriate indemnification superseding that in this Agreement.

B-10. Compliance with SCW Program
The Municipality shall comply with and require its contractors and subcontractors to comply with all provisions of Chapters 16 and 18 of the Code.

B-11. Compliance with Law, Regulations, etc.

The Municipality shall, at all times , comply with and require its contractors and subcontractors to comply with all applicable local, state and federal laws, rules,

Municipal Program
Agreement No. 2024MP27

guidelines, regulations, and requirements.

B-12. Continuous Use of Municipal Projects; Lease or Disposal of Municipal Projects The Municipality shall not abandon, substantially discontinue use of, lease, or dispose of all or a significant part or portion of any Project funded in whole or in part with SCW Program Payments during the useful life (defined as 30 years unless specified otherwise in annual plans and subsequent reports) of the Project without prior written approval of the District. Such approval may be conditioned as determined to be appropriate by the District, including a condition requiring repayment of a pro rata amount of the SCW Program Payments used to fund the Project together with interest on said amount accruing from the date of lease or disposal of the Project.

B-13. Disputes
Should a dispute arise between the parties, the party asserting the dispute will notify the other parties in writing of the dispute. The parties will then meet and confer within 21 calendar days of the notice in a good faith attempt to resolve the dispute.

If the matter has not been resolved through the process set forth in the preceding paragraph, any party may initiate mediation of the dispute. Mediation will be before a retired judge or mediation service mutually agreeable to the parties. All costs of the mediation, including mediator fees, will be paid one- half by the District and one- half by the Municipality. SCW Program Payments shall not be used to pay for any costs of the mediation.

The parties will attempt to resolve any dispute through the process set forth above before filing any action relating to the dispute in any court of law.

B-14. Final Inspection and Certification of Registered Professional Upon completion of the design phase and before construction of a project, the Municipality shall provide certification by a California Registered Professional (i.e., Professional Civil Engineer, Engineering Geologist) that the design has been completed.

Upon completion of the project, the Municipality shall provide for a final inspection and certification by a California Registered Professional (i.e., Professional Civil Engineer, Engineering Geologist), that the Project has been completed in accordance wi th submitted final plans and specifications and any modifications thereto and in accordance with this Agreement.

B-15. Force Majeure.

In the event that Municipality is delayed or hindered from the performance of any act required hereunder by reason of strikes, lockouts, labor troubles, inability to procure materials not related to the price thereof, riots, insurrection, war, or other reasons of a like nature beyond the control of the Municipality, then performance of such acts shall be excused for the period of the delay, and the period for the performance of any such act

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shall be extended for a period equivalent to the period of such delay.

B-16. Funding Considerations and Exclusions

1. All expenditures of SCW Program Payments by Municipality must comply with the provisions of Chapters 16 and 18 of the Los Angeles County Flood Control District Code, including but not limited to the provisions regarding eligible expenditures contained in Section 16.05.A.2 and the provision regarding ineligible expenditures contained in Section 16.05.A.3.

2. SCW Program Payments shall not be used in connection with any Project implemented as an Enhanced Compliance Action ("ECA") and/or Supplemental Environmental Project ("SEP") as defined by State Water Resources Control Board Office of Enforcement written pol icies, or any other Project implemented pursuant to the settlement of an enforcement action or to offset monetary penalties imposed by the State Water Resources Control Board, a Regional Water Quality Control Board, or any other regulatory authority; provided, however, that SCW funds may be used for a Project implemented pursuant to a time schedule order ("TSO") issued by the Los Angeles Regional Water Quality Control Board if, at the time the TSO was issued, the Project was included in an approved watershed management program (including enhanced watershed management programs) developed pursuant to the MS4 Permit.

B-17. Indemnification
The Municipality shall indemnify, defend and hold harmless the District, the County of Los Angeles and their elected and appointed officials, agents, and employees from and against any and all liability and expense, including defense costs, legal fees, claims, actions, and causes of action for damages of any nature whatsoever, including but not limited to bodily injury, death, personal injury, or property damage, arising from or in conjunction with: (1) any Project or Program implemented by the Municipality, in whole or in part, with SCW Program Payments or (2) any breach of this Agreement by the Municipality.

B-18. Independent Actor
The Municipality, and its agents and employees, if any, in the performance of this Agreement, shall act in an independent capacity and not as officers, employees, or agents of the District.

The Municipality shall not contract work with a contractor who is in a period of debarment from any agency within the District. (LACC Chapter 2.202) B-19. Integration
This is an integrated Agreement. This Agreement is intended to be a full and complete statement of the terms of the agreement between the District and Municipality, and expressly supersedes any and all prior oral or written agreements, covenants,

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representations and warranties, express or implied, concerning the subject matter of this Agreement.

B-20. Lapsed Funds

1. The Municipality shall be able to carry over uncommitted SCW Program Payments for up to five (5) years from the end of the fiscal year in which those funds are transferred from the District to the Municipality.

2. If the Municipality is unable to expend the SCW Program Payment within five (5) years from the end of the fiscal year in which those funds are transferred from the District to the Municipality, then lapsed funding procedures will apply. Lapsed funds are funds that were transferred to the Municipality but were not committed to eligible expenditures by the end of the fifth (5th ) fiscal year after the fiscal year in which those funds were transferred from the District.

3. Lapsed funds shall be allocated by the Watershed Area Steering Committee of the respective Watershed Area to a new Project with benefit to that Municipality, if feasible in a reasonable time frame, or otherwise to the Watershed Area.

4. In the event that funds are to lapse, due to circumstances beyond the Municipality’s control, then the Municipality may request an extension of up to twelve (12) months in which to commit the funds to eligible expenditures. Extension Requests must contain sufficient justification and be submitted to the District in writing no later than three (3) months before the funds are to lapse.

5. The decision to grant an extension is at the sole discretion of the District.

6. Funds still uncommitted to eligible expenditures after an extension is granted will be subject to lapsed funding procedures without exception. Example Below.

Fiscal Year
Transferred
Funds Lapse
After
Extension
Request Due
Commit By
2019-20 6/30/2025 No later than
3/31/2025
No later than
6/30/2026

B-21. Municipal Project Access
Upon reasonable advance request, the Municipality shall ensure that the District or any authorized representative, will have safe and suitable access to the site of any Project implemented by the Municipality in whole or in part with SCW Program Payments at all reasonable times.

B-22. Non-Discrimination
The Municipality agrees to abide by all federal, state, and County laws, regulations, and policies regarding non-discrimination in employment and equal employment opportunity.

Municipal Program
Agreement No. 2024MP27

B-23. No Third-Party Rights
The parties to this Agreement do not create rights in, or grant remedies to, any third party as a beneficiary of this Agreement, or of any duty, covenant, obligation, or undertaking established herein
B-24. Notice

1. The Municipality shall notify the District in writing within five (5) working days of the occurrence of the following:
a. Bankruptcy, insolvency, receivership or similar event of the Municipality; or b. Actions taken pursuant to State law in anticipation of filing for bankruptcy.

2. The Municipality shall notify the District within ten (10) working days of any litigation pending or threatened against the Municipality regarding its continued existence, consideration of dissolution, or disincorporation.

3. The Municipality shall notify the District promptly of the following:
a. Any significant deviation from the submitted Annual Plan for the current Fiscal Year, including discussion of any major changes to the scope of funded projects or programs, noteworthy delays in implementation, reduction in benefits or community engagement, and/or modifications that change the SCW Program Goals intended to be accomplished.
b. Discovery of any potential archaeological or historical resource. Should a potential archaeological or historical resource be discovered during construction, the Municipality agrees that all work in the area of the find will cease until a qualified archaeologist has evaluated the si tuation and made recommendations regarding preservation of the resource, and the District has determined what actions should be taken to protect and preserve the resource.

The Municipality agrees to implement appropriate actions as directed by the District.
c. Any public or media event publicizing the accomplishments and/or results of this Agreement and provide the opportunity for attendance and participation by District representatives with at least fourteen (14) days’ notice to the District.

B-25. Municipality’s Responsibility for Work
The Municipality shall be responsible for all work and for persons or entities engaged in work performed pursuant to this Agreement including, but not limited to, contractors, subcontractors, suppliers, and providers of services. The Municipality shall be responsible for responding to any and all disputes arising out of its contracts for work on the Project.

The District will not mediate disputes between the Municipality and any other entity concerning responsibility for performance of work.

Municipal Program
Agreement No. 2024MP27

B-26. Reporting
The Municipality shall be subject to and comply with all applicable requirements of the District regarding reporting requirements. Municipalities shall report available data through the SCW Reporting Module, once available.

1. Annual Progress/Expenditure Reports. The Municipality shall submit Annual Progress/Expenditure Reports, using a format provided by the District, within six (6) months following the end of the Fiscal Year to the District to detail the activities of the prior year. The Annual Progress/Expenditure Reports shall be posted on the District’s publicly accessible website and on the Municipality’s website. The Annual Progress/Expenditure Report shall include:
a. Amount of funds received;
b. Breakdown of how the SCW Program Payment has been expended; c. Documentation that the SCW Program Payment was used for eligible expenditures in accordance with Chapters 16 and 18 of the Code; d. Description of activities that have occurred, milestones achieved, and progress made to date, during the applicable reporting period including comparison to the Annual Plan and corresponding metrics;
e. Discussion of any existing gaps between what was planned and what was achieved for the prior year, include any lessons learned; f. Description of the Water Quality Benefits, Water Supply Benefits, and Community Investment Benefits and a summary of how SCW Program Payments have been used to achieve SCW Program Goals for the prior year, including graphical representation of available da ta and specific metrics to demonstrate the benefits being achieved through the years’ investments. g. Discussion of alignment with other local, regional, and state efforts, resources, and plans, as applicable. This includes discussion of opportunities for addressing additional SCW Program Goals, leveraging SCW Program Goals, and increasing regional capacity to supplement the SCW Program. h. Additional financial or Project-related information in connection with activity funded in whole or in part using SCW Program Payments as required by the District.
i. Certification from a California Registered Professional (Civil Engineer or Geologist, as appropriate), that projects implemented with SCW Program Payments were conducted in accordance with Chapters 16 and 18 of the Code. j. Report on annual and total (since inception of program) benefits provided by programs and projects funded by SCW Program Payment. This includes

Municipal Program
Agreement No. 2024MP27

comparisons to annual plans and alignment with corresponding specific quantitative targets and metrics (note that SCW Reporting Module will facilitate calculation of benefits and graphical representation of pertinent data):
i. Annual volume of stormwater captured and treated
ii. Annual volume of stormwater captured and reused
iii. Annual volume of stormwater captured and recharged to a managed aquifer
iv. Annual creation, enhancement, or restoration of Community Investment Benefits. If none, discuss considerations explored and reasons to not include.
v. Annual acreage increases in Nature- Based Solutions and claimed level of NBS (with matrix demonstrating determination of good, better, best, as outlined in Exhibit C). If none, discuss considerations explored and reasons to not include.
vi. Annual expenditures providing DAC Benefits. If none, discuss considerations explored and reasons to not include.

2. Documentation of the Community Outreach and Engagement utilized for and/or achieved with the SCW Program Payment described in the Annual Plan Exhibit A.

This information must be readily accessible to members of the public.

3. As Needed Information or Reports. The Municipality agrees to promptly provide such reports, data, and information as may be reasonably requested by the District including, but not limited to material necessary or appropriate for evaluation of the SCW Program or to fulfill any reporting requirements of the County, state or federal government.

B-27. Representations, Warranties, and Commitments
The Municipality represents, warrants, and commits as follows:

1. Authorization and Validity. The execution and delivery of this Agreement, including all incorporated documents, by the individual signing on behalf of Municipality, has been duly authorized by the governing body of Municipality, as applicable. This Agreement constitutes a valid and binding obligation of the Municipality, enforceable in accordance with its terms, except as such enforcement may be limited by law.

2. No Violations. The execution, delivery, and performance by the Municipality of this Agreement, including all incorporated documents, do not violate any provision of any law or regulation in effect as of the date set forth on the first page hereof, or result in any breach or default under any contract, obligation, indenture, or other instrument to which the Municipality is a party or by which the Municipality is bound as of the date set forth on the first page hereof.

3. No Litigation. There are no pending or, to the Municipality’s knowledge, threatened

Municipal Program
Agreement No. 2024MP27

actions, claims, investigations, suits, or proceedings before any governmental authority, court, or administrative agency which affect the Municipality's ability to complete the Annual Plan.

4. Solvency. None of the transactions contemplated by this Agreement will be or have been made with an actual intent to hinder, delay, or defraud any present or future creditors of the Municipality. As of the date set forth on the first page hereof, the Municipality is solvent and will not be rendered insolvent by the transactions contemplated by this Agreement. The Municipality is able to pay its debts as they become due.

5. Legal Status and Eligibility. The Municipality is duly organized and existing and in good standing under the laws of the State of California. The Municipality shall at all times maintain its current legal existence and preserve and keep in full force and effect its legal rights and authority.

6. Good Standing. The Municipality must demonstrate it has not failed to comply with previous County and/or District audit disallowances within the preceding five years.

B-28. Travel
Any reimbursement for necessary ground transportation and lodging shall be at rates not to exceed those set by the California Department of Human Resources; per diem costs will not be eligible expenses. These rates may be found at http://www.calhr.ca.gov/employees/Pages/travel-reimbursements.aspx. Reimbursement will be at the State travel amounts that are current as of the date costs are incurred by the Municipality. No travel outside the Los Angeles County Flood Control District region shall be reimbursed unless prior written authorization is obtained from the Program Manager.

B-29. Unenforceable Provision
In the event that any provision of this Agreement is determined by a court of competent jurisdiction to be unenforceable, the parties agree that all other provisions of this Agreement have force and effect and shall not be affected thereby.

B-30. Withholding of Disbursements and Material Violations Notwithstanding any other provision of this Agreement, the District may withhold all or any portion of the SCW Program Payment for any Fiscal Year in the event that:

1. The Municipality has violated any provision of this Agreement; or

2. The Municipality fails to maintain reasonable progress in achieving SCW Program Goals, following an opportunity to cure.

3. Failure to remain in Good Standing, described in Section B-26 of Exhibit B.

Municipal Program
Agreement No. 2024MP27

4. Failure to submit annual reports on meeting SCW Program Goals.

Municipal Program
Agreement No. 2024MP27

EXHIBIT C – NATURE BASED SOLUTIONS (NBS) BEST MANAGEMENT

PRACTICES
Municipalities shall consider incorporation of Nature- based solutions (NBS) into their projects. NBS refers to the sustainable management and use of nature for undertaking socio-environmental challenges, including climate change, water security, water pollution, food security, human health, and disaster risk management. As this environmental management practice is increasingly incorporated into projects for the SCW Program, this guidance document may be expanded upon to further quantify NBS practices based on benefits derived from their incorporation on projects.

The SCW Program defines NBS as a Project that utilizes natural processes that slow, detain, infiltrate or filter Stormwater or Urban Runoff. These methods may include relying predominantly on soils and vegetation; increasing the permeability of Impermeable Areas; protecting undeveloped mountains and floodplains; creating and restoring riparian habitat and wetlands; creating rain gardens, bioswales, and parkway basins; enhancing soil through composting, mulching; and, planting trees and vegetation, with pref erence for native species. NBS may also be designed to provide additional benefits such as sequestering carbon, supporting biodiversity, providing shade, creating and enhancing parks and open space, and improving quality of life for surrounding communities . NBS include Projects that mimic natural processes, such as green streets, spreading grounds and planted areas with water storage capacity. NBS may capture stormwater to improve water quality, collect water for reuse or aquifer recharge, or to support vegetation growth utilizing natural processes.

Municipalities are to include in each Annual Progress/Expenditure Report whether and how their project achieves a good, better, or best for each of the 6 NBS methods in accordance with the guidance below. Additionally, Annual Progress/ Expenditure Reports should include discussion on any considerations taken to maximize the class within each method. If at least 3 methods score within a single class, the overall project can be characterized as that class. Municipalities must attach a copy of the matrix for each project with the good, better, or best column indicated for each method, to facilitate District tracking of methods being utilized.

Municipal Program
Agreement No. 2024MP27

METHODS GOOD BETTER BEST
Vegetation/Green
Space
Use of climate
appropriate, eco-friendly
vegetation
(groundcover, shrubs,
and trees) / green space
5%-15% covered by
new climate-appropriate
vegetation
Use of native, climate
appropriate, eco-friendly
vegetation
(groundcover, shrubs,
and trees) / green space
16%-35% covered by
new native vegetation
Establishment of plant
communities with a
diversity of native
vegetation
(groundcover, shrubs,
and trees) / green space
that is both native and
climate-appropriate
More than 35% covered
by new native vegetation
Increase of
Permeability
Installation of vegetated
landscape – 25%-49%
paved area removed
Redesign of existing
impermeable surfaces
and/or installation of
permeable surfaces (e.g.
permeable pavement
and
infiltration trenches)
Installation of vegetated
landscape – 50%-74%
paved area removed
Improvements of soil
health (e.g., compaction
reduction)
Installation of vegetated
landscape – 75%-100%
paved area removed
Creation of well-
connected and self-
sustained natural
landscapes with healthy
soils, permeable
surfaces, and
appropriate vegetation
Protection of
Undeveloped
Mountains &
Floodplains
●Preservation of native
vegetation
●Minimal negative
impact to existing
drainage system
●Preservation of native
vegetation
●Installation of new
feature(s) to improve
existing drainage system
●Creation of open green
space
●Installation of features
to improve natural
hydrology
Creation &
Restoration of
Riparian Habitat &
Wetlands
●Partial restoration of
existing riparian habitat
and wetlands Planting
of climate appropriate
vegetation between 11
and 20
different climate
appropriate or native
plant species newly
planted
●No potable water used
to sustain the wetland
●Full restoration of
existing riparian habitat
and wetlands
●Planting of native
vegetation - between 21
and 40 different native
plant species newly
planted
●No potable water used
to sustain the wetland
●Full restoration and
expansion of existing
riparian habitat and
wetlands Planting of
plant communities with a
diversity of native
vegetation – between 41
and 50 different native
plant species newly
planted
●No potable water used
to sustain the wetland

Municipal Program
Agreement No. 2024MP27

METHODS GOOD BETTER BEST
New Landscape
Elements
Elements designed to
capture runoff for other
simple usage (e.g. rain
gardens and cisterns),
capturing the 85th
percentile 24-hour storm
event for at least 50% of
the entire parcel
Elements that design to
capture/redirect runoff
and filter pollution (e.g.
bioswales and parkway
basins), capturing the
85th percentile 24-hour
storm event from the
entire parcel
Large sized elements
that capture and treat
runoff to supplement or
replace existing water
systems (e.g. wetlands,
daylighting streams,
groundwater infiltration,
floodplain reclamation),
capturing the 90th
percentile 24-hour storm
event from the entire
parcel and/or capturing
off-site runoff
Enhancement of Soil
Use of soil amendments
such as mulch and
compost to retain
moisture in the soil and
prevent erosion
Planting of new climate
appropriate vegetation to
enhance soil organic
matter
Use of soil amendments
such as mulch and
compost that are locally
generated to retain
moisture in the soil,
prevent erosion, and
support locally based
composting and other
soil enhancement
activities
Planting of new native,
climate-appropriate
vegetation to enhance
soil organic matter
Use of soil amendments
such as mulch and
compost that are locally
generated, especially
use of next-generation
design with regenerative
adsorbents (e.g.
woodchips, biochar) to
retain moisture in the
soil, prevent erosion,
and support on-site
composting and other
soil enhancement
activities
Planting of new native,
climate appropriate
vegetation to enhance
soil organic matter

Municipal Program
Agreement No. 2024MP27

EXHIBIT D – OPERATIONS AND MAINTENANCE GUIDANCE DOCUMENT Municipalities shall operate and maintain infrastructure projects for the useful life of the project and are to consider using the following guidance for operations and maintenance for infrastructure projects. Operational maintenance is the care and upkeep of Projects that may require detailed technical knowledge of the Project’s function and design. Project specific operational and maintenance plans shall consider the activities listed below and set forth specific activities and frequencies (not limited to those below) as determined to be appropriate by the Municipalities and best practices, including stakeholder engagement as applicable. Operational maintenance is to be performed by the operator of the Project with a purpose to make the operator aware of the state of readiness of the Project to deliver stormwater and urban runoff benefits.

1. Litter Control
• Regular removal of litter, nonhazardous waste materials, and accumulated debris near planted areas, rock areas, decomposed granite areas, rest areas, fence perimeters, adjoining access roads and driveways, drains, pedestrian trails, viewing stations, shelter houses, and bicycle pathways. • Regular inspection and maintenance of pet waste stations. • Maintaining trash receptacles.
• Removal of trash, debris, and blockages from bioswales. • Inspection and cleaning of trash booms.
• Inspection of weir gates and stop logs to clean debris, as required.

2. Vegetation Maintenance
• Weed control
o Recognition and removal of weeds, such as perennial weeds, morning glory, vine -type weeds, ragweed, and other underground spreading weeds.
o Avoiding activities that result in weed seed germination (e.g. frequent soil cultivation near trees or shrubs).
o Regular removal of weeds from landscape areas, including from berms, painted areas, rock areas, gravel areas, pavement cracks along access roads and driveways, drains, pedestrian trails, viewing stations, park shelters, and bicycle paths.
• Tree and shrubbery trimming and care
o Removal of dead trees and elimination of diseased/damaged growth. o Prevent encroachment of adjacent property and provide vertical clearance.
o Inspect for dead or diseased plants regularly.

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Agreement No. 2024MP27

• Wetland vegetation and landscape maintenance
o Installation and maintenance of hydrophytic and emergent plants in perennially wet and seasonal, intermittent habitats.
o Draining and drawdown of wetland and excessive bulrush removal o Weed and nuisance plant control.
o Removal of aquatic vegetation (e.g. algae and primrose) using appropriate watercraft and harvesting equipment.
o Wildflower and meadow maintenance.
o Grass, sedge, and yarrow management.
o Removal of unwanted hydroseed.

3. Wildlife Management
• Exotic species control.
• Provide habitat management; promote growth of plants at appropriate densities and promote habitat structure for animal species. • Protect sensitive animal species (e.g. protection during critical life stages including breeding and migration).
• Avoid disturbances to nesting birds.
• Avoid spread of invasive aquatic species.

4. Facility Inspection
• Inspect project sites for rodent and insect infestations on a regular basis. • Inspect for and report graffiti in shelter houses, viewing stations, benches, paving surfaces, walls, fences, and educational and directional signs. • Inspect facilities for hazardous conditions on roads and trails (e.g. access roads and trails, decomposed granite pathways, and maintenance roads). • Inspect shade structures for structural damage or defacement. • Inspect hardscapes.
• Inspect and maintain interpretive and informational signs. • Inspect site furnishings (e.g. benches, hitching posts, bicycle racks). • Maintain deck areas (e.g. benches, signs, decking surfaces). • Visually inspect weirs and flap gates for damage; grease to prevent locking. • Inspect all structures after major storm events, periodically inspect every 3 months, and operate gates through full cycles to prevent them from locking up.

5. Irrigation System Management
• Ensuring automatic irrigation controllers are functioning properly and providing various plant species with proper amount of water.

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Agreement No. 2024MP27

o Cycle controller(s) through each station manually and automatically to determine if all facets are functioning properly.
o Inspection should be performed at least monthly.
o Recover, replace, or refasten displaced or damaged valve box covers.
o Inspect and repair bubbler heads.
o Repair and replace broken drip lines or emitters causing a loss of water (to prevent ponding and erosion).
o Maintain drip system filters to prevent emitters from clogging.

Inspection and cleaning should occur at least monthly.
o Inspect and clean mainline filters, wye strainers, basket filters, and filters at backflow devices twice a year.
o Maintain and check function of the drip system.
• Keeping irrigation control boxes clear of vegetation. • Operating irrigation system to ensure it does not cause excessively wet, waterlogged areas, and slope failure.
• Utilizing infrequent deep watering techniques to encourage deep rooting, drought tolerant plant characteristics to promote a self-sustaining, irrigation free landscape.
• Determine watering schedules based on season, weather, variation in plant size, and plant varieties. At least four times a year (e.g. change of season), reschedule controller systems.
• Turn off irrigation systems at the controller at the beginning of the rainy season, or when the soil has a high enough moisture content. • Use moisture sensing devices to determine water penetration in soil.

6. Erosion Management and Control
• Inspect slopes for erosion during each maintenance activity. • Inspect basins for erosion.
• Take corrective measures as needed, including filling eroded surfaces, reinstalling or extending bank protection, and replanting exposed soil.

7. Ongoing Monitoring Activities
• Monitor controllable intake water flow and water elevation. • Examine inflow and outflow structures to ensure devices are functioning properly and are free of obstructions.
• Water quality sampling (quarterly, unless justified otherwise). • Checking telemetry equipment.
• Tracking and reporting inspection and maintenance records.

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8. Vector and Nuisance Insect Control
• Monitoring for the presence of vector and nuisance insect species. • Adequate pretreatment of influent wastewater to lessen production of larval mosquitos.
• Managing emergent vegetation.
• Using hydraulic control structures to rapidly dewater emergent marsh areas. • Managing flow velocities to reduce propagation of vectors.

City of Gardena
Gardena City Council Meeting

AGENDA REPORT SUMMARY
Agenda Item No. 16.B
Section: DEPARTMENTAL

ITEMS - PUBLIC WORKS
Meeting Date: August 13, 2024

TO: THE HONORABLE MAYOR AND MEMBERS OF THE GARDENA CITY COUNCIL AGENDA TITLE:

Authorization to Purchase Three Heavy Equipment Vehicles from Quinn Company in the amount of $593,712.75 for the Public Works Department and Sell Current Equipment at Estimated Residual Value
COUNCIL ACTION REQUIRED:

Staff Recommendation: Approve Purchase and Sell Current Equipment RECOMMENDATION AND STAFF SUMMARY:

Staff requests that the City Council approve the purchase of a wheel loader, backhoe loader and tractor and sell the current equipment out-of-state.

The wheel loader, backhoe loader and tractor are used on a daily basis for day-to-day operations by the Public Works Department. All three equipment are over 15 years old and parts are not available for repair. The equipment is also not able to pass the smog check. In addition, the equipment is not able to be retrofitted to the State of California AQMD standards.

Zero emission vehicles are not available for purchase.

The current vehicles can be sold for the estimated residual value of a cumulative $110,000.00 to out-of-state end users. Other states have less stringent air quality standards and the equipment has much more value there. The quotes received for the three vehicles that were obtained from Source Well #020223-CAT that other municipalities have used to negotiate the best prices. Gardena Ordinance No. 1780 and Gardena Purchasing Policy APP-2018-003, Section (B) permit contracts using the Cooperative and "Piggyback" Agreements.

Equipment
Purchase of New Equipment
Estimated Out-of-State
Equipment Residual Value
Wheel Loader
$263,532.02
$50,000.00
Backhoe Loader
$189,782.97
$30,000.00
Tractor
$140,397.76
$30,000.00
TOTAL
$593,712.75
$110,000.00

Staff recommends that the City Council approve the purchase of the wheel loader, backhoe loader and tractor from Quinn Company in the amount of $593,712.75 and sell the current equipment out-of-state.

FINANCIAL IMPACT/COST:

Source of Funds: $593,712.75 Gas Tax funds for Fiscal Year 2024-2025 ATTACHMENTS:

Quinn Company_Wheel Loader.pdf
Quinn Company_Backhoe Loader.pdf
Quinn Company_Tractor.pdf
Source Well Contract #020223-CAT.pdf

APPROVED:
___________________________________
Clint Osorio, City Manager

020223-CAT

Rev. 3/2022 1

Caterpillar: Confidential Green

Solicitation Number: RFP #020223

CONTRACT

This Contract is between Sourcewell, 202 12th Street Northeast, P.O. Box 219, Staples, MN 56479 (Sourcewell) and Caterpillar Inc., 5212 N. O’Connor Blvd., Suite 1100, Irving, TX 75039 (Supplier).

Sourcewell is a State of Minnesota local government unit and service cooperative created under the laws of the State of Minnesota (Minnesota Statutes Section 123A.21) that offers cooperative procurement solutions to government entities. Participation is open to eligible federal, state/province, and municipal governmental entities, higher education, K-12 education, nonprofit, tribal government, and other public entities located in the United States and Canada.

Sourcewell issued a public solicitation for Medium Duty and Compact Construction Equipment with Related Attachments from which Supplier was awarded a contract.

Supplier desires to contract with Sourcewell to provide equipment, products, or services to Sourcewell and the entities that access Sourcewell’s cooperative purchasing contracts (Participating Entities).

1. TERM OF CONTRACT

A. EFFECTIVE DATE. This Contract is effective upon the date of the final signature below.

B. EXPIRATION DATE AND EXTENSION. This Contract expires April 17, 2027, unless it is cancelled sooner pursuant to Article 22. This Contract may be extended one additional year upon the request of Sourcewell and written agreement by Supplier.

C. SURVIVAL OF TERMS. Notwithstanding any expiration or termination of this Contract, all payment obligations incurred prior to expiration or termination will survive, as will the following: Articles 11 through 14 survive the expiration or cancellation of this Contract. All other rights will cease upon expiration or termination of this Contract.

2. EQUIPMENT, PRODUCTS, OR SERVICES

A. EQUIPMENT, PRODUCTS, OR SERVICES. Supplier will provide the Equipment, Products, or Services as stated in its Proposal submitted under the Solicitation Number listed above.

DocuSign Envelope ID: 7FBA555D-2590-4D87-A3EF-7DEA989EAD85 DocuSign Envelope ID: FC9F9D33-278C-48EA-BCBB-11FDFA91D43C 020223-CAT

Rev. 3/2022 2

Caterpillar: Confidential Green
Supplier’s Equipment, Products, or Services Proposal (Proposal) is attached and incorporated into this Contract.

Pursuant to Section 10(b), Supplier will subcontract certain obligations under this Contract to its dealers. Only those dealers that sign a Participation Agreement with Supplier obligating them to comply with the terms of this Contract will be eligible to provide Equipment, Products, or Services as a subcontractor under this Contract. In the event there is no dealer who has entered into a Participation Agreement available to provide Equipment, Products, or Services to a Participating Entity, Supplier will be under no obligation to provide Equipment, Products, or Services to such Participating Entity under this Contract. Supplier will provide a copy of this Contract to its dealers that would normally service Participating Entities and invite such dealers to enter into a Participation Agreement as a subcontractor of Supplier under the terms of this Contract.

All Equipment and Products provided under this Contract must be new and the current model.

Supplier may offer close-out or refurbished Equipment or Products if they are clearly indicated in Supplier’s product and pricing list. Unless agreed to by the Participating Entities in advance, Equipment or Products must be delivered as operational to the Participating Entity’s site.

This Contract offers an indefinite quantity of sales, and while substantial volume is anticipated, sales and sales volume are not guaranteed.

B. WARRANTY. Supplier warrants that all Equipment, Products, and Services furnished are free from liens and encumbrances, and are free from defects in design, materials, and workmanship.

In addition, Supplier warrants the Equipment, Products, and Services are suitable for and will perform in accordance with the ordinary use for which they are intended. Supplier’s dealers and distributors must agree to assist the Participating Entity in reaching a resolution in any dispute over warranty terms with the manufacturer. Any manufacturer’s warranty that extends beyond the expiration of the Supplier’s warranty will be passed on to the Participating Entity.

C. DEALERS, DISTRIBUTORS, AND/OR RESELLERS. Upon Contract execution and throughout the Contract term, Supplier must provide to Sourcewell a current means to validate or authenticate Supplier’s authorized dealers, distributors, or resellers relative to the Equipment, Products, and Services offered under this Contract, which will be incorporated into this Contract by reference. It is the Supplier’s responsibility to ensure Sourcewell receives the most current information.

3. PRICING

All Equipment, Products, or Services under this Contract will be priced at or below the price percentage list discount stated in Supplier’s Proposal.

DocuSign Envelope ID: 7FBA555D-2590-4D87-A3EF-7DEA989EAD85 DocuSign Envelope ID: FC9F9D33-278C-48EA-BCBB-11FDFA91D43C 020223-CAT

Rev. 3/2022 3

Caterpillar: Confidential Green
Upon request made to a participating CAT dealer, from a Participating Entity identifying themselves as a Sourcewell member by providing their Sourcewell member number and contract number; formal quotes will list all costs, including all delivery expenses, such as freight and permits (when required). Alternatively, Participating Entities may choose to make their own transportation arrangements. In such case, there would be no delivery charges from the local participating Cat dealer.

Regardless of the payment method chosen by the Participating Entity, the total cost associated with any purchase option of the Equipment, Products, or Services must always be disclosed in the pricing quote to the applicable Participating Entity at the time of purchase.

A. SHIPPING AND SHIPPING COSTS. All delivered Equipment and Products must be properly packaged. Damaged Equipment and Products may be rejected. If the damage is not readily apparent at the time of delivery, Supplier must permit the Equipment and Products to be returned within a reasonable time at no cost to Sourcewell or its Participating Entities.

Participating Entities reserve the right to inspect the Equipment and Products at a reasonable time after delivery where circumstances or conditions prevent effective inspection of the Equipment and Products at the time of delivery. In the event of the delivery of nonconforming Equipment and Products, the Participating Entity will notify the Supplier as soon as possible and the Supplier will replace nonconforming Equipment and Products with conforming Equipment and Products that are acceptable to the Participating Entity.

Supplier must arrange for and pay for the return shipment on Equipment and Products that arrive in a defective or inoperable condition.

Sourcewell may declare the Supplier in breach of this Contract if the Supplier intentionally delivers substandard or inferior Equipment or Products.

B. SALES TAX. Each Participating Entity is responsible for supplying the Supplier with valid tax- exemption certification(s). When ordering, a Participating Entity must indicate if it is a tax- exempt entity.

C. HOT LIST PRICING. At any time during this Contract, Supplier may offer a specific selection of Equipment, Products, or Services at discounts greater than those listed in the Contract.

When Supplier determines it will offer Hot List Pricing, it must be submitted electronically to Sourcewell in a line-item format. Equipment, Products, or Services may be added or removed from the Hot List at any time through a Sourcewell Price and Product Change Form as defined in Article 4 below.

Hot List program and pricing may also be used to discount and liquidate close-out and discontinued Equipment and Products as long as those close-out and discontinued items are clearly identified as such. Current ordering process and administrative fees apply. Hot List Pricing must be published and made available to all Participating Entities.

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4. PRODUCT AND PRICING CHANGE REQUESTS

Supplier may request Equipment, Product, or Service changes, additions, or deletions at any time. All requests must be made in writing by submitting a signed Sourcewell Price and Product Change Request Form to the assigned Sourcewell Supplier Development Administrator. This approved form is available from the assigned Sourcewell Supplier Development Administrator.

At a minimum, the request must:

• Identify the applicable Sourcewell contract number;
• Clearly specify the requested change;
• Provide sufficient detail to justify the requested change; • Individually list all Equipment, Products, or Services affected by the requested change, along with the requested change (e.g., addition, deletion, price change); and • Include a complete restatement of pricing documentation in Microsoft Excel with the effective date of the modified pricing, or product addition or deletion. The new pricing restatement must include all Equipment, Products, and Services offered, even for those items where pricing remains unchanged.

A fully executed Sourcewell Price and Product Request Form will become an amendment to this Contract and will be incorporated by reference.

5. PARTICIPATION, CONTRACT ACCESS, AND PARTICIPATING ENTITY REQUIREMENTS

A. PARTICIPATION. Sourcewell’s cooperative contracts are available and open to public and nonprofit entities across the United States and Canada; such as federal, state/province, municipal, K-12 and higher education, tribal government, and other public entities.

B. Supplier may not enter into a contract with a U.S. Federal Government entity prior to obtaining necessary internal approvals and shall not be obligated to provide Equipment, Products or Services to any U.S. Federal Government entity under this Contract unless separately agreed in writing. Suppliermay work with such parties and may agree to provide equipment or services under the Contract on a case-by-case basis.

The benefits of this Contract should be available to all Participating Entities that can legally access the Equipment, Products, or Services under this Contract. A Participating Entity’s authority to access this Contract is determined through its cooperative purchasing, interlocal, or joint powers laws. Any entity accessing benefits of this Contract will be considered a Service Member of Sourcewell during such time of access. Supplier understands that a Participating Entity’s use of this Contract is at the Participating Entity’s sole convenience and Participating Entities reserve the right to obtain like Equipment, Products, or Services from any other source.

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Supplier is responsible for familiarizing its sales and service forces with Sourcewell contract use eligibility requirements and documentation and will encourage potential participating entities to join Sourcewell. Sourcewell reserves the right to add and remove Participating Entities to its roster during the term of this Contract.

C. PUBLIC FACILITIES. Supplier’s employees may be required to perform work at government- owned facilities, including schools. Supplier’s employees and agents must conduct themselves in a professional manner while on the premises, and in accordance with Participating Entity policies and procedures, and all applicable laws.

6. PARTICIPATING ENTITY USE AND PURCHASING

A. ORDERS AND PAYMENT. To access the contracted Equipment, Products, or Services under this Contract, a Participating Entity must clearly indicate to Supplier that it intends to access this Contract; however, order flow and procedure will be developed jointly between Sourcewell and Supplier. Typically, a Participating Entity will issue an order directly to Participating Dealers with payments made to the Participating Dealers. If a Participating Entity issues a purchase order, it may use its own forms, but the purchase order should clearly note the applicable Sourcewell contract number. All Participating Entity orders under this Contract must be issued prior to expiration or cancellation of this Contract; however, Supplier performance, Participating Entity payment obligations, and any applicable warranty periods or other Supplier or Participating Entity obligations may extend beyond the term of this Contract.

Supplier’s acceptable forms of payment are included in its attached Proposal. Participating Entities will be solely responsible for payment and Sourcewell will have no liability for any unpaid invoice of any Participating Entity.

B. ADDITIONAL TERMS AND CONDITIONS/PARTICIPATING ADDENDUM. Additional terms and conditions to a purchase order, or other required transaction documentation, may be negotiated between a Participating Entity and Supplier’s Participating Dealer, such as job or industry-specific requirements, legal requirements (e.g., affirmative action or immigration status requirements), or specific local policy requirements. Some Participating Entities may require the use of a Participating Addendum, the terms of which will be negotiated directly between the Participating Entity and the Supplier’s Participating Dealer or its authorized dealers, distributors, or resellers, as applicable. Any negotiated additional terms and conditions must never be less favorable to the Participating Entity than what is contained in this Contract.

C. SPECIALIZED SERVICE REQUIREMENTS. In the event that the Participating Entity requires service or specialized performance requirements not addressed in this Contract (such as e- commerce specifications, specialized delivery requirements, or other specifications and requirements), the Participating Entity and the Supplier may enter into a separate, standalone agreement, apart from this Contract. Sourcewell, including its agents and employees, will not be made a party to a claim for breach of such agreement.

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D. TERMINATION OF ORDERS. Participating Entities may terminate an order, in whole or in part, immediately upon notice to Supplier in the event of any of the following events:

1. The Participating Entity fails to receive funding or appropriation from its governing body at levels sufficient to pay for the equipment, products, or services to be purchased; or

2. Federal, state, or provincial laws or regulations prohibit the purchase or change the Participating Entity’s requirements.

E. GOVERNING LAW AND VENUE. The governing law and venue for any action related to a Participating Entity’s order will be determined by the Participating Entity making the purchase.

7. CUSTOMER SERVICE

A. PRIMARY ACCOUNT REPRESENTATIVE. Supplier will assign an Account Representative to Sourcewell for this Contract and must provide prompt notice to Sourcewell if that person is changed. The Account Representative will be responsible for:

• Maintenance and management of this Contract;
• Timely response to all Sourcewell and Participating Entity inquiries; and • Business reviews to Sourcewell and Participating Entities, if applicable.

B. BUSINESS REVIEWS. Supplier must perform a minimum of one business review with Sourcewell per contract year. The business review will cover sales to Participating Entities, pricing and contract terms, administrative fees, sales data reports, performance issues, supply issues, customer issues, and any other necessary information.

8. REPORT ON CONTRACT SALES ACTIVITY AND ADMINISTRATIVE FEE PAYMENT

A. CONTRACT SALES ACTIVITY REPORT. Each calendar quarter, Supplier must provide a contract sales activity report (Report) to the Sourcewell Supplier Development Administrator assigned to this Contract. Reports are due no later than 45 days after the end of each calendar quarter. A Report must be provided regardless of the number or amount of sales during that quarter (i.e., if there are no sales, Supplier must submit a report indicating no sales were made).

The Report must contain the following fields:

• Participating Entity Name (e.g., City of Staples Highway Department); • Participating Entity Physical Street Address;
• Participating Entity City;
• Participating Entity State/Province;
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• Participating Entity Zip/Postal Code;
• Participating Entity Contact Name;
• Participating Entity Contact Email Address;
• Participating Entity Contact Telephone Number;
• Sourcewell Assigned Entity/Participating Entity Number; • Item Purchased Description;
• Item Purchased Price;
• Sourcewell Administrative Fee Applied; and
• Date Purchase was invoiced/sale was recognized as revenue by Supplier.

B. ADMINISTRATIVE FEE. In consideration for the support and services provided by Sourcewell, the Supplier will pay an administrative fee to Sourcewell on all Equipment, Products, and Services provided to Participating Entities. The Administrative Fee must be included in, and not added to, the pricing. Supplier may not charge Participating Entities more than the contracted price to offset the Administrative Fee.

The Supplier will submit payment to Sourcewell for the percentage of administrative fee stated in the Proposal multiplied by the total sales of all Equipment, Products, and Services purchased by Participating Entities under this Contract during each calendar quarter. Payments should note the Supplier’s name and Sourcewell-assigned contract number in the memo; and must be mailed to the address above “Attn: Accounts Receivable” or remitted electronically to Sourcewell’s banking institution per Sourcewell’s Finance department instructions. Payments must be received no later than 45 calendar days after the end of each calendar quarter.

Supplier agrees to cooperate with Sourcewell in auditing transactions under this Contract to ensure that the administrative fee is paid on all items purchased under this Contract.

In the event the Supplier is delinquent in any undisputed administrative fees, Sourcewell reserves the right to cancel this Contract and reject any proposal submitted by the Supplier in any subsequent solicitation. In the event this Contract is cancelled by either party prior to the Contract’s expiration date, the administrative fee payment will be due no more than 30 days from the cancellation date.

9. AUTHORIZED REPRESENTATIVE

Sourcewell's Authorized Representative is its Chief Procurement Officer.

Supplier’s Authorized Representative is the person named in the Supplier’s Proposal. If Supplier’s Authorized Representative changes at any time during this Contract, Supplier must promptly notify Sourcewell in writing.

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10. AUDIT, ASSIGNMENT, AMENDMENTS, WAIVER, AND CONTRACT COMPLETE

A. AUDIT. Pursuant to Minnesota Statutes Section 16C.05, subdivision 5, the books, records, documents, and accounting procedures and practices relevant to this Contract are subject to examination by Sourcewell or the Minnesota State Auditor for a minimum of six years from the end of this Contract. This clause extends to Participating Entities as it relates to business conducted by that Participating Entity under this Contract.

B. ASSIGNMENT. Neither party may assign or otherwise transfer its rights or obligations under this Contract without the prior written consent of the other party and a fully executed assignment agreement. Such consent will not be unreasonably withheld. Any prohibited assignment will be invalid. Provided, however, that Supplier is permitted to subcontract certain of its rights and obligations to Supplier Participating Dealers for performance without Sourcewell’s prior written consent.

C. AMENDMENTS. Any amendment to this Contract must be in writing and will not be effective until it has been duly executed by the parties.

D. WAIVER. Failure by either party to take action or assert any right under this Contract will not be deemed a waiver of such right in the event of the continuation or repetition of the circumstances giving rise to such right. Any such waiver must be in writing and signed by the parties.

E. CONTRACT COMPLETE. This Contract represents the complete agreement between the parties. No other understanding regarding this Contract, whether written or oral, may be used to bind either party. For any conflict between the attached Proposal and the terms set out in Articles 1-22 of this Contract, the terms of Articles 1-22 will govern.

F. RELATIONSHIP OF THE PARTIES. The relationship of the parties is one of independent contractors, each free to exercise judgment and discretion with regard to the conduct of their respective businesses. This Contract does not create a partnership, joint venture, or any other relationship such as master-servant, or principal-agent.

11. INDEMNITY AND HOLD HARMLESS

Intentionally omitted.

12. GOVERNMENT DATA PRACTICES

Supplier and Sourcewell must comply with the Minnesota Government Data Practices Act, Minnesota Statutes Chapter 13, as it applies to all data provided by or provided to Sourcewell DocuSign Envelope ID: 7FBA555D-2590-4D87-A3EF-7DEA989EAD85 DocuSign Envelope ID: FC9F9D33-278C-48EA-BCBB-11FDFA91D43C 020223-CAT

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under this Contract and as it applies to all data created, collected, received, maintained, or disseminated by the Supplier under this Contract.

13. INTELLECTUAL PROPERTY, PUBLICITY, MARKETING, AND ENDORSEMENT

A. Intentionally deleted.

B. PUBLICITY. Any publicity regarding the subject matter of this Contract must not be released without prior written approval from the Authorized Representatives. Publicity includes notices, informational pamphlets, press releases, research, reports, signs, and similar public notices prepared by or for the Supplier individually or jointly with others, or any subcontractors, with respect to the program, publications, or services provided resulting from this Contract.

C. MARKETING. Any direct advertising, marketing, or offers with Participating Entities must be approved by Sourcewell. Send all approval requests to the Sourcewell Supplier Development Administrator assigned to this Contract.

D. ENDORSEMENT. The Supplier must not claim that Sourcewell endorses its Equipment, Products, or Services.

14. GOVERNING LAW, JURISDICTION, AND VENUE

The substantive and procedural laws of the State of Minnesota will govern this Contract. Venue for all legal proceedings arising out of this Contract, or its breach, must be in the appropriate state court in Todd County, Minnesota or federal court in Fergus Falls, Minnesota.

15. FORCE MAJEURE

Neither party to this Contract will be held responsible for delay or default caused by acts of God or other conditions that are beyond that party’s reasonable control. A party defaulting under this provision must provide the other party prompt written notice of the default.

16. SEVERABILITY

If any provision of this Contract is found by a court of competent jurisdiction to be illegal, unenforceable, or void then both parties will be relieved from all obligations arising from that provision. If the remainder of this Contract is capable of being performed, it will not be affected by such determination or finding and must be fully performed.

17. PERFORMANCE, DEFAULT, AND REMEDIES

A. PERFORMANCE. During the term of this Contract, the parties will monitor performance and address unresolved contract issues as follows:

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1. Notification. The parties must promptly notify each other of any known dispute and work in good faith to resolve such dispute within a reasonable period of time. If necessary, Sourcewell and the Supplier will jointly develop a short briefing document that describes the issue(s), relevant impact, and positions of both parties.

2. Escalation. If parties are unable to resolve the issue in a timely manner, as specified above, either Sourcewell or Supplier may escalate the resolution of the issue to a higher level of management. The Supplier will have 30 calendar days to cure an outstanding issue.

3. Performance while Dispute is Pending. Notwithstanding the existence of a dispute, the Supplier must continue without delay to carry out all of its responsibilities under the Contract that are not affected by the dispute. If the Supplier fails to continue without delay to perform its responsibilities under the Contract, in the accomplishment of all undisputed work, the Supplier will bear any additional costs incurred by Sourcewell and/or its Participating Entities as a result of such failure to proceed.

B. DEFAULT AND REMEDIES. Either of the following constitutes cause to declare this Contract, or any Participating Entity order under this Contract, in default:

1. Nonperformance of contractual requirements, or

2. A material breach of any term or condition of this Contract.

The party claiming default must provide written notice of the default, with 30 calendar days to cure the default. Time allowed for cure will not diminish or eliminate any liability for liquidated or other damages. If the default remains after the opportunity for cure, the non-defaulting party may:

• Exercise any remedy provided by law or equity, or
• Terminate the Contract or any portion thereof, including any orders issued against the Contract.

18. INSURANCE

A. REQUIREMENTS. At its own expense, Supplier must maintain insurance policy(ies) in effect at all times during the performance of this Contract with insurance company(ies) licensed or authorized to do business in the State of Minnesota having an “AM BEST” rating of A- or better, with coverage and limits of insurance not less than the following:

1. Workers’ Compensation and Employer’s Liability.

Workers’ Compensation: As required by any applicable law or regulation.

Employer's Liability Insurance: must be provided in amounts not less than listed below:

Minimum limits:
$500,000 each accident for bodily injury by accident
$500,000 policy limit for bodily injury by disease
$500,000 each employee for bodily injury by disease
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2. Commercial General Liability Insurance. Supplier will maintain insurance covering its operations, with coverage on an occurrence basis, and must be subject to terms no less broad than the Insurance Services Office (“ISO”) Commercial General Liability Form CG0001 (2001 or newer edition), or equivalent. At a minimum, coverage must include liability arising from premises, operations, bodily injury and property damage, independent contractors, products-completed operations including construction defect, contractual liability, blanket contractual liability, and personal injury and advertising injury. All required limits, terms and conditions of coverage must be maintained during the term of this Contract.

Minimum Limits:
$1,000,000 each occurrence Bodily Injury and Property Damage $1,000,000 Personal and Advertising Injury
$2,000,000 aggregate for products liability-completed operations $2,000,000 general aggregate

3. Commercial Automobile Liability Insurance. During the term of this Contract, Supplier will maintain insurance covering all owned, hired, and non-owned automobiles in limits of liability not less than indicated below. The coverage must be subject to terms no less broad than ISO Business Auto Coverage Form CA 0001 (2010 edition or newer), or equivalent.

Minimum Limits:
$1,000,000 each accident, combined single limit

4. Umbrella Insurance. During the term of this Contract, Supplier will maintain umbrella coverage over Employer’s Liability, Commercial General Liability, and Commercial Automobile.

Minimum Limits:
$2,000,000

Failure of Supplier to maintain the required insurance will constitute a material breach entitling Sourcewell to immediately terminate this Contract for default.

B. CERTIFICATES OF INSURANCE. Prior to commencing under this Contract, Supplier must furnish to Sourcewell a certificate of insurance, as evidence of the insurance required under this Contract. Prior to expiration of the policy(ies), renewal certificates must be mailed to Sourcewell, 202 12th Street Northeast, P.O. Box 219, Staples, MN 56479 or sent to the Sourcewell Supplier Development Administrator assigned to this Contract. The certificates must be signed by a person authorized by the insurer(s) to bind coverage on their behalf.

Failure to request certificates of insurance by Sourcewell, or failure of Supplier to provide certificates of insurance, in no way limits or relieves Supplier of its duties and responsibilities in this Contract.

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C. ADDITIONAL INSURED ENDORSEMENT AND PRIMARY AND NON-CONTRIBUTORY INSURANCE CLAUSE. Supplier agrees to list Sourcewell and its Participating Entities, including their officers, agents, and employees, as an additional insured under the Supplier’s commercial general liability insurance policy with respect to liability arising out of activities, “operations,” or “work” performed by or on behalf of Supplier, and products and completed operations of Supplier. The policy provision(s) or endorsement(s) must further provide that coverage is primary and not excess over or contributory with any other valid, applicable, and collectible insurance or self-insurance in force for the additional insureds. A Participating Dealer may name a Participating Entity as an additional insured on a case-by-case basis.

D. WAIVER OF SUBROGATION. Supplier waives and must require (by endorsement or otherwise) all its insurers to waive subrogation rights against Sourcewell and other additional insureds for losses paid under the insurance policies required by this Contract or other insurance applicable to the Supplier or its subcontractors. The waiver must apply to all deductibles and/or self-insured retentions applicable to the required or any other insurance maintained by the Supplier or its subcontractors.

E. UMBRELLA/EXCESS LIABILITY/SELF-INSURED RETENTION. The limits required by this Contract can be met by either providing a primary policy or in combination with umbrella/excess liability policy(ies), or self-insured retention.

19. COMPLIANCE

A. LAWS AND REGULATIONS. All Equipment, Products, or Services provided under this Contract must comply fully with applicable federal laws and regulations, and with the laws in the states and provinces in which the Equipment, Products, or Services are sold.

B. LICENSES. Supplier’s Participating Dealers must maintain a valid and current status on all required federal, state/provincial, and local licenses, bonds, and permits required for the operation of the business that the Participating Dealer conducts with Sourcewell and Participating Entities.

20. BANKRUPTCY, DEBARMENT, OR SUSPENSION CERTIFICATION

Supplier certifies and warrants that it is not in bankruptcy or that it has previously disclosed in writing certain information to Sourcewell related to bankruptcy actions. If at any time during this Contract Supplier declares bankruptcy, Supplier must immediately notify Sourcewell in writing.

Supplier certifies and warrants that neither it nor its principals are presently debarred, suspended, proposed for debarment, declared ineligible, or voluntarily excluded from programs operated by the State of Minnesota; the United States federal government or the Canadian government, as applicable; or any Participating Entity. Supplier certifies and warrants that DocuSign Envelope ID: 7FBA555D-2590-4D87-A3EF-7DEA989EAD85 DocuSign Envelope ID: FC9F9D33-278C-48EA-BCBB-11FDFA91D43C 020223-CAT

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neither it nor its principals have been convicted of a criminal offense related to the subject matter of this Contract. Supplier further warrants that it will provide immediate written notice to Sourcewell if this certification changes at any time.

21. PROVISIONS FOR NON-UNITED STATES FEDERAL ENTITY PROCUREMENTS UNDER

UNITED STATES FEDERAL AWARDS OR OTHER AWARDS

Intentionally omitted.

22. CANCELLATION

Sourcewell or Supplier may cancel this Contract at any time, with or without cause, upon 60 days’ written notice to the other party. However, Sourcewell may cancel this Contract immediately upon discovery of a material defect in any certification made in Supplier’s Proposal. Cancellation of this Contract does not relieve either party of financial, product, or service obligations incurred or accrued prior to cancellation.

Sourcewell Caterpillar Inc.

By: __________________________ By: __________________________ Jeremy Schwartz Patrick Kearns
Title: Chief Procurement Officer Title: Vice President Sales & Marketing, Construction Industries

Date: ________________________

Date: ________________________

Approved:

By: __________________________
Chad Coauette
Title: Executive Director/CEO

Date: ________________________

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5/24/2023 | 9:14 AM PDT
5/24/2023 | 12:16 PM CDT
DocuSign Envelope ID: FC9F9D33-278C-48EA-BCBB-11FDFA91D43C RFP 020223 - Medium Duty and Compact Construction Equipment with Related Attachments

Vendor Details
Company Name: Caterpillar Inc
Address:
100 NE Adams St
Peoria, IL 61629
Contact: Sean Egel
Email: [email protected]
Phone: 309-675-1399
HST#:

Submission Details
Created On: Tuesday December 06, 2022 08:40:12
Submitted On: Wednesday February 01, 2023 17:08:39
Submitted By: Sean Egel
Email: [email protected]
Transaction #: 9a461f27-b7e7-4aa6-83b3-419bcf0de541
Submitter's IP Address: 199.247.43.43
Bid Number: RFP 020223 Vendor Name: Caterpillar Inc
DocuSign Envelope ID: 7FBA555D-2590-4D87-A3EF-7DEA989EAD85 DocuSign Envelope ID: FC9F9D33-278C-48EA-BCBB-11FDFA91D43C Specifications
Table 1: Proposer Identity & Authorized Representatives General Instructions (applies to all Tables) Sourcewell prefers a brief but thorough response to each question. Do not merely attach additional documents to your response without also providing a substantive response. Do not leave answers blank; respond “N/A” if the question does not apply to you (preferably with an explanation).

Line
Item Question Response *
1 Proposer Legal Name (one legal entity only):
(In the event of award, will execute the
resulting contract as "Supplier")
Caterpillar Inc.
*
2 Identify all subsidiary entities of the Proposer
whose equipment, products, or services are
included in the Proposal.

N/A
*
3 Identify all applicable assumed names or DBA
names of the Proposer or Proposer's
subsidiaries in Line 1 or Line 2 above.

N/A
*
4 Provide your CAGE code or Unique Entity
Identifier (SAM):
11083 *
5 Proposer Physical Address: 5212 N O'Connor Blvd Ste. 1100, Irving, TX 75039 * 6 Proposer website address (or addresses): https://www.caterpillar.com/, https://www.cat.com/en_US.html * 7 Proposer's Authorized Representative (name,
title, address, email address & phone) (The
representative must have authority to sign
the “Proposer’s Assurance of Compliance” on
behalf of the Proposer and, in the event of
award, will be expected to execute the
resulting contract):

Primary Contact: Patrick Kearns
Title: Vice President Sales & Marketing
Address: 100 NE Adams St, Peoria, IL 61629
Email: [email protected]
Phone: (309) 675-5181
*
8 Proposer's primary contact for this proposal
(name, title, address, email address & phone):

Primary Contact: Sean Egel
Title: Governmental Sales Consultant
Address: 100 NE Adams St, Peoria, IL 61629
Email: [email protected]
Phone: (309) 675-1399
*
9 Proposer's other contacts for this proposal, if
any (name, title, address, email address &
phone):

Primary Contact: Marta Sevilla
Title: Governmental Marketing Manager
Address: 100 NE Adams St, Peoria, IL 61629
Email: [email protected]
Phone: (309) 578-1150
Table 2: Company Information and Financial Strength
Line
Item Question Response *
Bid Number: RFP 020223 Vendor Name: Caterpillar Inc
DocuSign Envelope ID: 7FBA555D-2590-4D87-A3EF-7DEA989EAD85 DocuSign Envelope ID: FC9F9D33-278C-48EA-BCBB-11FDFA91D43C 10 Provide a brief history of your company,
including your company’s core values,
business philosophy, and industry longevity
related to the requested equipment, products
or services.

The history of Caterpillar is all about doing: creating, building, problem solving, innovating, testing, servicing and improving. We’re proud of the ingenious machines that are part of our rich heritage. More importantly, we are proud of the people who founded and built the company one breakthrough at a time. Beginning with Benjamin Holt and C. L. Best, the people of Caterpillar have always been - and continue to be - extraordinary.

In 1925 when Holt and Best merged to form their new tractor company, they used the name Caterpillar, which had become familiar with people around the world. The name was registered in 1910 by Holt and placed on his tractors to reflect the undulating movement the machine made as it crawled across the field like a caterpillar.

With 2022 sales and revenues of $59.4 billion, Caterpillar Inc. is the world’s leading manufacturer of construction and mining equipment, off-highway diesel and natural gas engines, industrial gas turbines and diesel-electric locomotives. For nearly 100 years, we’ve been helping customers build a better, more sustainable world and are committed and contributing to a reduced-carbon future. Our innovative products and services, backed by our global dealer network, provide exceptional value that helps customers succeed. Caterpillar does business on every continent, principally operating through three primary segments – Construction Industries, Resource Industries and Energy & Transportation – and providing financing and related services through our Financial Products segment.

Our Worldwide Code of Conduct, first published in 1974, defines what we stand for and believe in, documenting the uncompromisingly high ethical standards our company has upheld since its founding in 1925. The Code helps Caterpillar employees put our values and principles into action every day by providing detailed guidance on the behaviors and actions that support our values of Integrity, Excellence, Teamwork, Commitment and Sustainability.

Caterpillar's Code of Conduct that can be found at
https://www.caterpillar.com/en/company/code-of-conduct.html *
11 What are your company’s expectations in the
event of an award?
Caterpillar is honored to have served Sourcewell and its members who have purchased Cat® construction equipment, attachments (work tools), and electrical power generation products through Sourcewell since 2008. Furthermore, we are proud to have earned the Sourcewell Legacy Award in 2019, and have recently been awarded contracts 060122-CAT and 092222-CAT.

Caterpillar's expectations in the event of an award would be to focus on customer needs and continued growth across all governmental segments. Sourcewell has built a strong reputation within the industry that has shown the importance of how this cooperative contract delivers upon customer needs. This contract will be a top factor in our go to market strategy within our strong Cat dealer network. If awarded, we will send out an email to our entire sales force, applicable to governmental, introducing the contract along with ways to train our salesforce, market, and grow the contract.

We look forward to the opportunity to further grow business and serve member needs together in this new Medium Construction Equipment RFP opportunity. *
12 Demonstrate your financial strength and
stability with meaningful data. This could
include such items as financial statements,
SEC filings, credit and bond ratings, letters
of credit, and detailed reference letters.

Upload supporting documents (as applicable)
in the document upload section of your
response.

Caterpillar Inc. is a publicly traded company, and as such, its financial information is updated quarterly and available at: https://investors.caterpillar.com/overview/default.aspx Caterpillar's 2021 Annual Report provides details about our financial position. Our SEC filing documents can be found at:
https://investors.caterpillar.com/financials/sec-filings/default.aspx. Both documents are included as attachments in our Financial Strength and Stability Documents.

As 2022 results have just been released, below you can find a high level sales statement for 2022 followed by our more detailed 2021.

In 2022 full year sales and revenues were $59.4B with a profit per share of USD $12.64.

In 2021 full year sales and revenues were $51B of which, North American sales were $22B. Operating profit was $6.9B with a profit per share of USD $11.83.

Dividends paid per share of USD $4.28.
*
13 What is your US market share for the
solutions that you are proposing?
Caterpillar is a significant contributor to the overall Heavy Equipment sector within the US and Canada. Market share information beyond what is made publicly available through our annual reports is considered confidential. *
14 What is your Canadian market share for the
solutions that you are proposing?
Caterpillar is a significant contributor to the overall Heavy Equipment sector within the US and Canada. Market share information beyond what is made publicly available through our annual reports is considered confidential. *
Bid Number: RFP 020223 Vendor Name: Caterpillar Inc
DocuSign Envelope ID: 7FBA555D-2590-4D87-A3EF-7DEA989EAD85 DocuSign Envelope ID: FC9F9D33-278C-48EA-BCBB-11FDFA91D43C 15 Has your business ever petitioned for
bankruptcy protection? If so, explain in detail.

No. *
16 How is your organization best described: is
it a manufacturer, a distributor/dealer/reseller,
or a service provider?  Answer whichever
question (either a) or b) just below) best
applies to your organization.
a)    If your company is best described as
a distributor/dealer/reseller (or similar entity),
provide your written authorization to act as a
distributor/dealer/reseller for the manufacturer
of the products proposed in this RFP. If
applicable, is your dealer network
independent or company owned?
b)    If your company is best described as
a manufacturer or service provider, describe
your relationship with your sales and service
force and with your dealer network in
delivering the products and services
proposed in this RFP. Are these individuals
your employees, or the employees of a third
party?
Caterpillar is a world class manufacturer which distributes products through a vast and capable independent dealer network. Cat dealers are strong independently owned companies and in North America alone our 47 dealers have a combined net worth of billions of dollars. Their large valuation is a competitive advantage because it allows them to have the infrastructure to support customers regardless of location, industry, fleet size, or application.

Another advantage of independently owned dealers is that they know their customers and market well. They tailor their services specifically to their customers' needs.

Although we will sign this contract as a manufacturer, our Cat dealers will be given the opportunity to avail themselves of the opportunity presented by the contract and will
execute all the transactions with governmental customers as they do today. This includes but is not limited to consultation, quoting, accepting payment, delivery, warranty support, parts sales, and service.

Caterpillar dealers heartily embrace the other Sourcewell contracts currently available to them (032119-CAT, 092222-CAT, 062320-CAT, 060122-CAT). They have all been trained on contract usage. In fact, the current Heavy Equipment contract is leveraged by 95% of our dealers in North America. Caterpillar offers specific discounts to Sourcewell members. By using any Sourcewell Contract, our dealers agree to honor those discounts.
*
17 If applicable, provide a detailed explanation
outlining the licenses and certifications that
are both required to be held, and actually
held, by your organization (including third
parties and subcontractors that you use) in
pursuit of the business contemplated by this
RFP.

Caterpillar and its subsidiaries operate across the globe in a variety of markets that require Caterpillar to adhere to all locally mandated laws and regulations in order to do business. With regards to the territories covered by this RFP, Caterpillar will comply with applicable laws in order to do business in the territories described herein.

As an equipment manufacturer focused on quality, Caterpillar created the Caterpillar Quality Management System, which is a process-based, ISO 9001:2015 compliant quality management system used throughout Caterpillar to continually improve the quality of our products and services to meet customer, statutory, and regulatory requirements. It is registered with IRCA (International Register of Certificated Auditors) as Caterpillar Quality Management System CAT791A. *
18 Provide all “Suspension or Debarment”
information that has applied to your
organization during the past ten years.

N/A
*
Table 3: Industry Recognition & Marketplace Success
Line
Item Question Response *
Bid Number: RFP 020223 Vendor Name: Caterpillar Inc
DocuSign Envelope ID: 7FBA555D-2590-4D87-A3EF-7DEA989EAD85 DocuSign Envelope ID: FC9F9D33-278C-48EA-BCBB-11FDFA91D43C 19 Describe any relevant industry awards or
recognition that your company has received
in the past five years
Please note: To list all the awards received in the past 5 years would unnecessarily lengthen our response. For brevity, we are highlighting some recognition received in 2020, 2021 and 2022. Also note there are many global awards.

Fortune Magazine #78 on the Fortune 500 2021
Fortune Magazine World's Most Admired Companies
Forbes Best Employers for diversity 2020 and 2021
#82 Best Global Brands- Interbrand 2021
The Wall Street Journal Best Managed Companies in 2020 and 2021 The Wall Street Journal World's Most Sustainably Managed Companies Human Rights Campaign Foundation Corporate Equality Index Dow Jones Sustainability Index (World and North America) 21 years World’s Most Sustainably Managed Companies – The Wall Street Journal United Way World Wide’s Global Corporate Leadership Program
U.S. President’s Volunteer Service Award from Junior Achievement Corporate Equality Index – Human Rights Campaign Foundation CSR China Top 100 – the 4th CSR China Education Award (China) China CSR Excellence Award – China Philanthropy Times (China)
Corporate Social Responsibility Research Center of Southern Weekly (China) Outstanding Contribution to Poverty Alleviation – China Foundation for Poverty Alleviation (China)
2020 Global 500 – Fortune Magazine
America’s Most Responsible Companies 2020, 2021 & 2022 – Newsweek Best-Managed Companies of 2020 & 2021 – The Wall Street Journal Top Companies for Customer Satisfaction – The Wall Street Journal The CEO Leaderboard: COVID-19 Reputation Rankings – SJR All-America Executive Team – Institutional Investor
Top 150 Global Licensors – Global License Best Global Brands Top 100 – Interbrand World’s Most Valuable Brands 2020 – Forbes
2020 Best Places to Work for Disability Inclusion – Disability Equality Index World’s Best Employers 2020 – Forbes
Best Employers for Women 2020 – Forbes
America’s Best Employers by State 2020 – Forbes
America's Best Employers for Diversity 2020 – Forbes
Best Employers for New Grads 2020 – Forbes
Global 2000 – Forbes 2020, 2021 & 2022
Best Employers for Veterans 2020 and 2021– Forbes
Top Veteran-Friendly Company – U.S. Veterans Magazine
#1 Great Place to Work – Great Place to Work Institute (Brazil) #1 Great Place to Work in the Ag Business - Great Place to Work Institute (Brazil) Chile’s 20 Best Places in 2020 to Work for LGBTQ Equality, pwc Human Rights Campaign
Top of Mind Company “Industry category” (Piracicaba, Brazil) Certification on Promoting Work-Life Balance in Hyogo Prefecture – Hyogo Work and Life Center (Japan)
Hyogo’s Women’s Success in Business Promotion Company – Hyogo Women Empowerment & Promotion Center (Japan)
Hanada Award for WIN Akashi – Hyogo Women and Future Association (Japan) Hyogo Childcare Supporting Company Award (Japan)
Science & Technology Industry Summit: Outstanding Contribution – The Economic Observer (China)
*
20 What percentage of your sales are to the
governmental sector in the past three years
The governmental and educational sector is extremely important to Caterpillar. We have a dedicated team to support governmental customers and their specific needs. However, percentage of sales to governmental is considered confidential. *
21 What percentage of your sales are to the
education sector in the past three years
The governmental and educational sector is extremely important to Caterpillar. We have a dedicated team to support governmental customers, including the education sector, and their specific needs. However, percentage of sales to education is considered confidential.
*
22 List any state, provincial, or cooperative
purchasing contracts that you hold. What is
the annual sales volume for each of these
contracts over the past three years?
While Cat dealers would typically hold contracts with states and provinces, as an exception Caterpillar holds the state contract with Ohio and NY.

Additionally, we are contract holders with OMNIA and NASPO ValuePoint.

Just as we would never share Sourcewell sales information with other cooperatives, we also keep the sales volumes from other cooperatives confidential. *
23 List any GSA contracts or Standing Offers
and Supply Arrangements (SOSA) that you
hold. What is the annual sales volume for
each of these contracts over the past three
years?
Listed below are the current GSA contracts that Caterpillar holds:

SIN 333924 Utility Trucks and Tractors: 2020=$6,857,211 2021=$14,071,364 SIN 333120 Street Repair and Cleaning Equipment and Attachments: 2020=$0 / 2021=$143,837 SIN 335999 Power Distribution Equipment: 2020=$151,267.70 / 2021=$9,473.07
These contracts are used by Caterpillar, but we do not allow our dealers to use GSA contracts.

Final sales for the year 2022 have yet to be fully reported. *
Bid Number: RFP 020223 Vendor Name: Caterpillar Inc
DocuSign Envelope ID: 7FBA555D-2590-4D87-A3EF-7DEA989EAD85 DocuSign Envelope ID: FC9F9D33-278C-48EA-BCBB-11FDFA91D43C Table 4: References/Testimonials
Line Item 24 . Supply reference information from three customers who are eligible to be Sourcewell participating entities.

Entity Name * Contact Name * Phone Number *
Baltimore County, MD Jamie Donahue 410-952-6981 *
Washington DC Fleet Greg Harrelson 202-437-3799 *
Town of Scituate Mass. Kevin Cafferty 781-545-8732 *
Table 5: Top Five Government or Education Customers
Line Item 25. Provide a list of your top five government, education, or non-profit customers (entity name is optional), including entity type, the state or province the entity is located in, scope of the project(s), size of transaction(s), and dollar volumes from the past three years.

Entity Name Entity Type * State /
Province * Scope of Work * Size of Transactions * Dollar Volume Past Three Years *
Virginia
Department of
Transportation-
Central
Government Virginia - VA State Department of
Transportation for Virginia.

Caterpillar requests that
Sourcewell treat the information
in this table as confidential.

Purchased 41 units. $12,321,972
*
State of Idaho Government Idaho - ID State of Idaho. Caterpillar requests that Sourcewell treat the
information in this table as
confidential.

Purchased 39 units. $10,304,218
*
Alaska
Department of
Transportation
Government Alaska - AK State Department of
Transportation for Alaska.

Caterpillar requests that
Sourcewell treat the information
in this table as confidential.

Purchased 37 units. $12,176,875
*
Arkansas State Government Arkansas - AR State of Arkansas. Caterpillar requests that Sourcewell treat the
information in this table as
confidential.

Purchased 28 units. $10,053,000
*
Suwannee
County
Government Florida - FL A county local to Florida.

Caterpillar requests that
Sourcewell treat the information
in this table as confidential.

Purchased 26 units. $6,567,420
*
Table 6: Ability to Sell and Deliver Service
Describe your company’s capability to meet the needs of Sourcewell participating entities across the US and Canada, as applicable.

Your response should address in detail at least the following areas: locations of your network of sales and service providers, the number of workers (full-time equivalents) involved in each sector, whether these workers are your direct employees (or employees of a third party), and any overlap between the sales and service functions.

Line
Item Question Response *
Bid Number: RFP 020223 Vendor Name: Caterpillar Inc
DocuSign Envelope ID: 7FBA555D-2590-4D87-A3EF-7DEA989EAD85 DocuSign Envelope ID: FC9F9D33-278C-48EA-BCBB-11FDFA91D43C 26 Sales force. The Cat dealer salesforce is highly capable and trained in the construction industry.

The Cat dealer salespeople are consultants to their customers and advise their customers on the best solutions for their application and job. As a manufacturer we request our dealers to follow strict training protocols to ensure our sales force remains current on all product updates. Specifically, as it relates to governmental sales, each dealer has one or more people named to be a key liaison between us as manufacturer and their dealer sales team. They're offered additional in depth training on Sourcewell and ensures that all contract terms are followed.

Caterpillar has Operational Excellence Programs that recognize dealers' excellence in marketing and sales processes and operations, among other areas of the business.

In North America, Cat dealers employ more than 53,000 people across the machine, energy, parts and service divisions. The dealer sales teams are supported by a network of Caterpillar professionals. Each dealer has in territory support of 5 to 8 Caterpillar sales/marketing employees. It is the responsibility of these people to ensure that the dealer and Caterpillar are working well together to constantly improve and to adapt to marketplace changes. Beyond the territory experts, the sales and marketing department at Caterpillar is staffed by more than 600 people whose mission is to focus on customer satisfaction. Even more are employed "behind-the scenes" to ensure industry leading product design, up to date product information, and maintaining the ease of doing business in an increasingly connected marketplace. *
27 Dealer network or other distribution
methods.

The Cat dealer network is key to the success of our company. Boasting 160 dealers throughout 193 countries worldwide, the Cat dealer network is widely considered to be the best in industry. Within Canada and the United States, we have 47 dealers and more than 800 dealer owned locations that sell and rent equipment.

Please refer to our directory listing of Cat dealer locations and our easy to view locations map in the attached "Additional Documents" zip file. Cat dealers are independently-owned. Each dealer has multiple branches and a mobile service fleet than can serve customers regardless of location. These are full physical locations our governmental customers can use.

Because of the size of Cat dealers, they are exceptionally capable to serve governmental customers. Dealers have trained specialists that cover many industries including heavy equipment.

Collectively, Cat dealers' large net worth permits them to stock a high volume of replacement parts - allowing governmental customers the fastest turnaround on parts availability and repair time. Cat dealers recognize the importance of governmental business to their overall success and they each have one or more governmental specialists whose job it is to serve governmental agencies well.

Please refer to the Cat dealer locations map included in "Additional Documents". Additionally, you can leverage  https://www.cat.com/en_US/support/dealer- locator.html to locate dealers by location.
*
Bid Number: RFP 020223 Vendor Name: Caterpillar Inc
DocuSign Envelope ID: 7FBA555D-2590-4D87-A3EF-7DEA989EAD85 DocuSign Envelope ID: FC9F9D33-278C-48EA-BCBB-11FDFA91D43C 28 Service force. At Caterpillar we are very proud of the saying "The sales department sells the first machine; the service department sells every one after that." The Cat dealer network in North America collectively employs more than 20,000 factory trained technicians, parts experts, product support managers and
other service-oriented staff. These subject matter experts are supported by the best repair shop equipment and materials. As machines and engines are constantly updated, so too are our service experts. We conduct product-specific training every week of the year. Technician shortage is an industry-wide concern, but because Cat dealers are large, long established companies, they can offer strong compensation and benefit packages that encourage the best people to seek employment and to retain them once hired. Caterpillar works very closely with dealers and through a program called "ThinkBIG", we are able to keep the pipeline of high quality employees full. ThinkBIG is a Caterpillar-specific instructional program that pays the student while they train to become a technician. It is a 2-year program with lab and classroom work, and a paid internship at a sponsoring Cat Dealer. As a result, the student will graduate with an accredited degree backed with over 2,000 hours of work experience.

In addition to the technicians and mechanics that work on the machines directly, each dealer has a service support staff that includes customer-facing consultants who are responsible for working with customers to set up maintenance and repair schedules to ensure the best possible up-time.

Collectively, service support staff makes up the bulk of each dealers' staff. Roughly half of their personnel investment goes to ensuring customer success via product support.

The dealer service teams are supported by a network of Caterpillar professionals.

Each dealer has in territory support of 5 to 8 Caterpillar parts/service employees. It is the responsibility of these specialists to ensure that the dealer and Caterpillar are working well together to constantly improve and to adapt to marketplace changes.

Beyond the territory experts, the service and support groups at Caterpillar are staffed by thousands of people whose mission is to focus on post-sale customer satisfaction.

Even more are employed "behind-the-scenes" to ensure technical literature is up to date, service standards are adhere to and repair questions are answered quickly. We exceed our 95% 2-hour response rate target in responding to dealer service inquiries. *
29 Describe the ordering process. If orders
will be handled by distributors, dealers or
others, explain the respective roles of the
Proposer and others.

Our simple order process has been and will continue to be well appreciated by Sourcewell and Sourcewell members:
1) When a member decides to purchase a new Cat machine, they simply include their Sourcewell member number on the Purchase Order they issue to the Cat dealer. 2) The Cat dealer then accepts the PO, issues the invoice, accepts payment and delivers the machine.
3) After the machine has been delivered, the dealer, as part of their normal process, includes the member number when filing their sales claims with Caterpillar. 4) At month's end, Caterpillar aggregates these reports and sends the sales information quarterly to Sourcewell along with the administrative fee.

IMPORTANT NOTE: Should a member wish to include additional terms and conditions to this contract, or to otherwise request a Participating Addendum, that agreement / PA should be executed between the member and Cat dealer directly. *
Bid Number: RFP 020223 Vendor Name: Caterpillar Inc
DocuSign Envelope ID: 7FBA555D-2590-4D87-A3EF-7DEA989EAD85 DocuSign Envelope ID: FC9F9D33-278C-48EA-BCBB-11FDFA91D43C 30 Describe in detail the process and
procedure of your customer service
program, if applicable.  Include your
response-time capabilities and
commitments, as well as any incentives
that help your providers meet your stated
service goals or promises.

We are proud that our reputation stands on having the best customer support in the industry. In fact, our capabilities are industry leading. In the event a customer ever has a problem or issue with a machine, their Cat dealer is empowered to resolve that issue locally. If the problem is a result of a defect in material or workmanship, within the standard warranty period, the local Cat dealer will work with Caterpillar to apply the appropriate warranty, and keep the customer informed. Every Cat dealer has a common detailed service process in place. Caterpillar supports and verifies that all the dealer service technicians are supplied with the tools and equipment needed to repair all Cat products.

Technicians have access to an electronic library of technical information including Service Letters, Technical Information Bulletins, System Operations, Troubleshooting and Disassembly and Assembly manuals. These manuals are provided for every Cat product. Each dealer also has one or more "Technical Communicators" who are dedicated to supporting the service technicians by acting as a liaison between the shop personnel and Caterpillar.

The service technicians also have a dealer support network (DSN) system with direct access to Caterpillar's Service Engineers. Caterpillar responds to more than 95% of all high priority tickets within one hour.

Caterpillar is got everything customers need to keep their Cat machines in top shape. Whether they want Genuine Cat parts, manuals and resources to do maintenance and repairs themselves, or prefer to have one of our expert dealer technicians do the work. We make it easy to keep their Cat equipment running.

Some of our service solutions include:
-Cat Fleet Management (Condition Monitoring) - Lowers the total cost of ownership of machine. By connecting your fleet, you will be able to: track the location of your assets, monitor & manage the fuel consumption, identify the operators who would need extra training, and plan & schedule your maintenance. All of which will maximize your uptime.
-Customer Value Agreements (CVA) - Customizable plans for your equipment new or used - to do more work with lower, more predictable costs. It's a convenient plan to get the most from your equipment throughout its life. Examples of CVAs may include but are not limited to: Maintenance CVAs, Component CVAs, and Machine CVAs. -S•O•S Services - A fluid analysis program that provides results that you can trust including trend analysis that provides benefit to your machine and fleet. -Cat Inspect - A digital way to perform checklists, pre-work inspections, annual inspections and PM checklists. All of which can be captured in the easy to use app. *
31 Describe your ability and willingness to
provide your products and services to
Sourcewell participating entities in the
United States.

We are proud to serve all geographic areas and all Sourcewell member sectors within the United States to offer our complete products and services. Caterpillar has successfully and proudly utilized Sourcewell to sell machines in all 50 states.

Caterpillar's global reach and presence is unmatched in the industry, and we serve customers around the globe. Our manufacturing, marketing, logistics, services, research and development and related facilities, along with our dealer locations, total more than 500 locations worldwide. North America specifically is home to 47 factories and 10 parts distribution centers, which make up 40% of our global footprint! The Caterpillar parts network delivers 98% of the parts orders within 24 hours.

In addition to our facilities listed above, Cat Parts are available through the Cat dealer network in at different price points, including: Cat New, Cat General Duty and Cat Reman. The Cat dealer network also have the capability to provide dealer exchange components, dealer rebuilt components and used parts when available.

Each dealer can match the appropriate parts offering to match the customers application and productivity. For example, Cat dealers offer Cat factory remanufactured parts (Cat reman) to follow the same quality, performance, and reliability as Cat new parts. This product line provides the same as new parts warranty, includes critical engineering changes, reduces waste, and protects the environment and saves critical repair time on machines. Cat reman also uses 100% Cat parts in the remanufacture process.

Our 1.4 million parts are available to order 24/7 on Parts.Cat.Com. *
Bid Number: RFP 020223 Vendor Name: Caterpillar Inc
DocuSign Envelope ID: 7FBA555D-2590-4D87-A3EF-7DEA989EAD85 DocuSign Envelope ID: FC9F9D33-278C-48EA-BCBB-11FDFA91D43C 32 Describe your ability and willingness to
provide your products and services to
Sourcewell participating entities in Canada.

We are proud to serve all geographic areas and all Sourcewell member sectors within the United States to offer our complete products and services. Caterpillar has successfully and proudly utilized Sourcewell to sell machines in all 50 states.

Caterpillar's global reach and presence is unmatched in the industry, and we serve customers around the globe. Our manufacturing, marketing, logistics, services, research and development and related facilities, along with our dealer locations, total more than 500 locations worldwide. North America specifically is home to 47 factories and 10 parts distribution centers, which make up 40% of our global footprint! The Caterpillar parts network delivers 98% of the parts orders within 24 hours.

In addition to our facilities listed above, Cat Parts are available through the Cat dealer network in at different price points, including: Cat New, Cat General Duty and Cat Reman. The Cat dealer network also have the capability to provide dealer exchange components, dealer rebuilt components and used parts when available.

Each dealer can match the appropriate parts offering to match the customers application and productivity. For example, Cat dealers offer Cat factory remanufactured parts (Cat reman) to follow the same quality, performance, and reliability as Cat new parts. This product line provides the same as new parts warranty, includes critical engineering changes, reduces waste, and protects the environment and saves critical repair time on machines. Cat reman also uses 100% Cat parts in the remanufacture process.

Our 1.4 million parts are available to order 24/7 on Parts.Cat.Com. *
33 Identify any geographic areas of the United
States or Canada that you will NOT be
fully serving through the proposed contract.

We are proud to serve all geographic areas of the United States and Canada. *
34 Identify any Sourcewell participating entity
sectors (i.e., government, education, not-for-
profit) that you will NOT be fully serving
through the proposed contract. Explain in
detail. For example, does your company
have only a regional presence, or do other
cooperative purchasing contracts limit your
ability to promote another contract?
We are proud to serve all Sourcewell Member sectors within the United States and Canada with our complete product and service offering through Sourcewell.

Caterpillar's cooperative purchasing contracts are non-exclusive; i.e. none of them restrict Caterpillar from promoting our Sourcewell contracts. * 35 Define any specific contract requirements
or restrictions that would apply to our
participating entities in Hawaii and Alaska
and in US Territories.

There are no restrictions or limitations for sales to members in Hawaii, Alaska or U.S. Territories. *
Bid Number: RFP 020223 Vendor Name: Caterpillar Inc
DocuSign Envelope ID: 7FBA555D-2590-4D87-A3EF-7DEA989EAD85 DocuSign Envelope ID: FC9F9D33-278C-48EA-BCBB-11FDFA91D43C Table 7: Marketing Plan
Line
Item Question Response *
36 Describe your marketing strategy for
promoting this contract opportunity.

Upload representative samples of your
marketing materials (if applicable) in
the document upload section of your
response.

Our current marketing strategy with Sourcewell contract 032119-CAT proves to be effective with year over year sales growth. Our primary strategy to promote this contract with participating entities is through our Cat dealers' sales force. We provide group and individual training to our dealer sales reps, focusing on benefits from selling through cooperative contracts vs bids. We proudly announce the award publicly through our multiple customer facing touchpoints which may include:
1) Press Release
2) Government Solutions Magazine (Caterpillar produced magazine distributed to governmental customers in the US and Canada)
3) Government Training & Safety Days (Government customer training events at Caterpillar facilities)
4) Announcement in our governmental customer e-newsletter 5) Feature on our governmental focused website: www.cat.com/governmental 6) Announcement on our social media channels (FB, Instagram, LinkedIn) 7) Display mentions at all governmental tradeshows we attend. (NACE Annual Conference, APWA Snow Show, Waste EXPO, GFX, NIGP Annual Forum & Products Expo, and APWA PWX & Annual Roadeo)
8) Update literature with the new contact information. (An updated version can be found within our attached marketing plan attachment.)
*
37 Describe your use of technology and
digital data (e.g., social media,
metadata usage) to enhance
marketing effectiveness.

Caterpillar and the Cat dealer network are leaders in using technologies to reach our customers.
- Focus on organic search and Search Engine Optimization (SEO) to help our customers digitally find our products and the information they need. - Leverage Caterpillar's social media platforms (YouTube, Facebook, LinkedIn, Instagram, etc) and ability to target governmental segments.
- Leverage predictive data analytics (past purchase history and financing information) to recognize in advance when customers may be considering replacing machines they currently own.
- Leverage Deltek's GovWIN data in the US and Canada for governmental lead generation.

Caterpillar has a Customer Interaction Center available 24/7 who handles digital leads received from cat.com, social media, etc. Our team qualifies those leads and passes them on to our Cat Dealer network using the Salesforce platform (Customer Relationship Management system). We have processes that allows us to confirm our Cat dealers have reached out to those customers.
*
38 In your view, what is Sourcewell’s role
in promoting contracts arising out of
this RFP? How will you integrate a
Sourcewell-awarded contract into your
sales process?
Sourcewell is a well-respected contracting agency within the public procurement industry. It is important, in the event of an award, that our products and logos be included in Sourcewell marketing and website. We believe that the most important role that Sourcewell can play in marketing our contract and products, is to market themselves and promote contract purchasing across the industry.

In the event of an award, Caterpillar will put high priority in building awareness and enthusiasm within our dealer network and customer base to leverage the Sourcewell contract as our go to market strategy.
*
39 Are your products or services
available through an e-procurement
ordering process? If so, describe your
e-procurement system and how
governmental and educational
customers have used it.

We do offer a e-procurement ordering process for parts via parts.cat.com. We can also integrate into a variety of procurement systems for high volume customers.

Our wide machine portfolio and multiple configurations per machine model allows us to provide the best machine for the customer need. Our Cat dealers are trained to configure our equipment and advise the customer on the best machine and configuration for their application. Therefore, a consultative salesperson is integral in this process, and we do not use an e-procurement machine ordering process.
*
Table 8: Value-Added Attributes
Line
Item Question Response *
Bid Number: RFP 020223 Vendor Name: Caterpillar Inc
DocuSign Envelope ID: 7FBA555D-2590-4D87-A3EF-7DEA989EAD85 DocuSign Envelope ID: FC9F9D33-278C-48EA-BCBB-11FDFA91D43C 40 Describe any product, equipment,
maintenance, or operator training
programs that you offer to
Sourcewell participating entities.

Include details, such as whether
training is standard or optional,
who provides training, and any
costs that apply.

All dealers offer basic operation, safety, and maintenance training with every sale. Should a customer desire more advanced training, such as productivity improvement or advanced repairs, each of our dealers can supply that training. Often there is a cost associated with that specific training and it would be negotiated between the dealer and the customer.

Caterpillar also offers training programs directly to customers in three areas: operation, safety and service. Members may access courses online, via CD's, or through instructor-led classes leading to operator certifications. The fees for these services vary depending on the depth of training desired. These high-level instruct-led courses can be conducted at one of our dedicated training facilities in the US or on a customer's local site using their own equipment.

Caterpillar also has a licensed supplier that offers Cat Simulators to teach operational techniques from real job sites.

For more information visit: https://catsimulators.com/
*
Bid Number: RFP 020223 Vendor Name: Caterpillar Inc
DocuSign Envelope ID: 7FBA555D-2590-4D87-A3EF-7DEA989EAD85 DocuSign Envelope ID: FC9F9D33-278C-48EA-BCBB-11FDFA91D43C 41 Describe any technological
advances that your proposed
products or services offer.

Cat technology gives you the power to track, monitor, automate and manage all types of assets- from a single machine, engine, to an entire fleet. We even offer technologies that protect your people. Listed below are a few technology offerings (standard and optional) that are used throughout the world in our Cat equipment.

Next Generation Excavators:

Cat Vision Link - Delivering valuable data with connected machine.

Cat Payload - Precisely load targets every time for faster cycle times.

Cat E-Fencing - Automatically stops excavator motion using boundaries you set in the monitor for the entire working envelope - above, below, sides and front.

Cat Birds Eye 360 View Camera - Rearview and right-side-view cameras always keep operators aware of their surroundings.

Cat Skid Steer and Compact Track Loaders:

Electronic Torque Management System - Helps maximize performance, minimize fuel consumption.

Sealed and Pressurized Cabs - Provides a cleaner, quieter work environment.

Cat Backhoe Loaders:

Selectable Power Management Modes - Saves fuel while maintaining machine performance.

Load-Sensing Hydraulic System - Provides excellent response for improved hoe and loader productivity and greater bucket breakout force.

Cat Wheel Loaders:

Operator Assist - Helps the operator reduce tire slippage, automatic rimpull management and provides up to 10% better cycle time resulting in higher productivity.

Autodig - consistent high bucket fill factors delivers up to 10% more productivity.

Cat Track Type Tractors:

Display with Camera - Optional 10" touchscreen, color display including rearview camera and slope indicate/assist screens. Larger reversing camera gives the operator better visibility to the job site.

Cat Material Handlers:

Smartboom - significantly enhances operator comfort and job efficiency by reducing stress and vibrations transmitted to the machine. Loading is more productive and more fuel efficient.

Machine/Operator Safety Technology:

Machine Security System - Gives you control over who can operate your machines and when. Prevents theft.

Seat Belt Reminder - Cost effective safety upgrade that significantly improves operator safety.

Cat Detect for Personnel - Alert ground crews in close proximity to mobile equipment.

Cat Detect for Personnel sounds an immediate, unique alert that cuts through the white noise of engines, generators, cell phones and job site chatter to protect ground workers from equipment backing incidents.

Cat Command - Remote control in operations where an operator could be at safety risk.

Whether you're looking to add technology to your current machine, or want new ways to get more value out of the technology on your equipment, we have options for you. *
Bid Number: RFP 020223 Vendor Name: Caterpillar Inc
DocuSign Envelope ID: 7FBA555D-2590-4D87-A3EF-7DEA989EAD85 DocuSign Envelope ID: FC9F9D33-278C-48EA-BCBB-11FDFA91D43C 42 Describe any “green” initiatives
that relate to your company or to
your products or services, and
include a list of the certifying
agency for each.

Caterpillar shares the concerns of governments and the public about the risks of climate change and supports global efforts to mitigate its impact. We are committed to contributing to a reduced-carbon future.

We demonstrate this in many ways including through our significant progress in reducing greenhouse gas (GHG) emissions from our operations and our continued investment in new products, technologies and services.

Caterpillar is engineering a brighter future through:
- Product innovations
- Advanced technologies leveraging know-how and R&D
- Usage of renewable fuels and fluids
- Solutions to improve jobsite efficiency
- Maintenance solutions
- Manufacturing operations’ carbon efficiency
Caterpillar's long-standing commitment to sustainability inspires us to set and achieve meaningful environmental, social and governance (ESG) goals and develop innovative products, technologies and services to support our customers on their sustainability journey.

Caterpillar is fully committed to our customers’ success by not only the design and manufacture of durable, reliable, innovative and rebuildable construction equipment, but also through our extensive and unmatched dealer network that provides you the best service and support to keep your equipment running, regardless of the environment or challenges.

We consider this as we work toward a vision of a world in which people's basic needs - such as shelter, clean water, education, and reliable energy - are fulfilled. We provide work environments, products, services, and solutions that make productive and efficient use of resources as we strive to achieve our vision. We believe this commitment supports the enduring success of our customers, stockholders, dealers, and our people.

Caterpillar is a proud 22-year member of the Dow Jones Sustainability Indices, including both the World and North America Indices. The annuals DJSI process follows a best-in- class approach, evaluating numerous corporate economic, environmental, and social performance factors.

For more on sustainability please visit our full report attached in the Financial and Stability attachment section.
*
43 Identify any third-party issued eco-
labels, ratings or certifications that
your company has received for
the equipment or products
included in your Proposal related
to energy efficiency or
conservation, life-cycle design
(cradle-to-cradle), or other
green/sustainability factors.

Plants certified with IDO 14001:2004 Environmental Management System include:
1) Anchor Coupling - Goldsboro NC, ISO 14001:2004- Sept 2018 2) Anchor Coupling - Menominee - ISO 14001: 2015 - Jan. 2021 3) Gen Sets - Newberry 0 ISO 14001:2004 - Nov. 2017
4) Mapleton - 14001:2004 self-certification issued Jan 2013 5) Reman Services - Corinth MS - ISO 14001-2015- Sept. 2021 6) Reman Services - Franklin - ISO 14001:2004-May 2017
*
Bid Number: RFP 020223 Vendor Name: Caterpillar Inc
DocuSign Envelope ID: 7FBA555D-2590-4D87-A3EF-7DEA989EAD85 DocuSign Envelope ID: FC9F9D33-278C-48EA-BCBB-11FDFA91D43C 44 Describe any Women or Minority
Business Entity (WMBE), Small
Business Entity (SBE), or veteran
owned business certifications that
your company or hub partners
have obtained. Upload
documentation of certification (as
applicable) in the document
upload section of your response.

Caterpillar has long drawn on the diversity of its people as a source of innovation and competitive advantage. We are proud that our people come from across the globe, with diverse backgrounds, experiences and perspectives. Despite our differences – in geography, culture, language and business – we are one Caterpillar, one company united by these common principles with a shared commitment to the highest standards of conduct.

For example: Foley Equipment, a Cat dealer, with territory primarily in Kansas and Missouri, is woman owned. In addition to Foley equipment, there are 31 other women in our North American dealer network who hold the titles of President, Vice President or Director.

One of the more recognized initiatives within Caterpillar's Global Supply Network Division is the Caterpillar Inc. Proprietary Information Supplier Diversity Program which spurs economic growth by increasing business opportunities to minority-owned, women-owned, veteran and service disabled veteran-owned, small disadvantaged businesses and those certified in HUBZones, all while ensuring expectations are met with regards to quality, velocity, capacity, and cost. Currently more than 37% of our direct and indirect purchasing is conducted with suppliers in these categories.

Caterpillar is a proud member of the National Minority Supplier Development Council (NMSDC). We also use the System for Aware Management (SAM), SBA, and NMSDC databases to locate SDB, VOSB, SDVOSB and HUBZone suppliers.

Supplier Diversity is discussed with Global Supply Network Division leadership during the Monthly Operating Results Review meetings. This in turn forces accountability for supplier inclusion by measuring drivers, such as the number of sourcing projects, which include Divers Suppliers and the values of the projects in which they participate. The goal is to create greater transparency to determine which teams are creating inclusive environments and which are not.

For more detail, please see our attached 2021 Global Diversity & Inclusion Report in the Additional Documents folder.
*
Bid Number: RFP 020223 Vendor Name: Caterpillar Inc
DocuSign Envelope ID: 7FBA555D-2590-4D87-A3EF-7DEA989EAD85 DocuSign Envelope ID: FC9F9D33-278C-48EA-BCBB-11FDFA91D43C 45 What unique attributes does your
company, your products, or your
services offer to Sourcewell
participating entities? What makes
your proposed solutions unique in
your industry as it applies to
Sourcewell participating entities?
BEST OVERALL VALUE / LOWEST LIFE CYCLE COST:

Cat products deliver the best value for the money. While we rarely have the lowest initial purchase price, we are happy to demonstrate to customers that our machines offer the lowest overall owning and operating costs when factors such as fuel efficiency, repair frequency, productivity, and resale value are factored in. We believe that government agencies are tasked to be the best stewards of taxpayer funds and our products can prove that they are the best solution. Sourcewell members are in the best position to allow these discussions to take place in contrast to a local bid situation where the focus is often only on initial price.

CAT SAFETY SERVICES / SAFETY FEATURES:

In addition to the tangible, measurable aspects of the life cycle cost equation, we also bring our focus on safety to every product that we manufacture. Quantifying a human life or debilitating injury is impossible, but each machine has industry-leading features that strive to minimize the possibility for accidents.

In addition to built-in safety features, we also offer products and services that are unique in the industry.

Cat Safety Services include, but are not limited to, the following:

Safety Perception Survey - Used to establish a baseline safety-culture assessment by measuring employee perceptions and gaps in beliefs between management and employees on the front line across 20 Safety Culture Indicators.

Safety Leadership Assessment - Used to measure individual safety leadership capability around four domains of safety leadership.

Worksite Assessment - Compares onsite observations of safety practices and employee interview data to the documented processes and procedures.

Continuous Improvement Process - Involving all levels of the organization to generate engagement, involvement, and ownership in the safety improvement process.

Training - can be conducted with e-learning courses on http://safelyhome.cat.com, instructor led
training products or as Supplier-facilitated workshops. Topics available include, but are not limited to, safety culture, effective communication, supervisor safety training, recognition, etc.

Fleet Management & Services through Caterpillar Job Site Solutions:

We leverage the power of Caterpillar and our dealers by designing innovative solutions that solve customer problems and that have a positive impact on their bottom line. We approach each site differently, striving to deliver exactly what’s needed — no more, no less.

Every solution includes a unique mix of Caterpillar and dealer capabilities using industry best products, technology, services and expertise necessary to meet the customer’s definition of success. The goal is to leave customers better off tomorrow than they are today.

Details on products and services are available at www.cat.com/safety. More information can be found in the additional document section. Pricing can be found in the pricing document section.
*
Bid Number: RFP 020223 Vendor Name: Caterpillar Inc
DocuSign Envelope ID: 7FBA555D-2590-4D87-A3EF-7DEA989EAD85 DocuSign Envelope ID: FC9F9D33-278C-48EA-BCBB-11FDFA91D43C Table 9: Warranty
Describe in detail your manufacturer warranty program, including conditions and requirements to qualify, claims procedure, and overall structure. You may upload representative samples of your warranty materials (if applicable) in the document upload section of your response in addition to responding to the questions below.

Line
Item Question Response *
46 Do your warranties cover all products, parts, and
labor?
Caterpillar has extensive warranty coverage. Please see our warranty statements attached in the warranty information documents. * 47 Do your warranties impose usage restrictions or
other limitations that adversely affect coverage?
Please see applicable warranty statements in the attached documents. * 48 Do your warranties cover the expense of
technicians’ travel time and mileage to perform
warranty repairs?
Caterpillar does not cover travel time and mileage. Dealer service territories vary considerably from state to state as do their policies about travel time and mileage during the warranty period.
*
49 Are there any geographic regions of the United
States or Canada (as applicable) for which you
cannot provide a certified technician to perform
warranty repairs?  How will Sourcewell
participating entities in these regions be provided
service for warranty repair?
One of our key differentiating strengths is our ability to service equipment regardless of where it is located. Please see applicable warranty statements in the attached documents. *
50 Will you cover warranty service for items made by
other manufacturers that are part of your proposal,
or are these warranties issues typically passed on
to the original equipment manufacturer?
Warranty service for machines ordered from a Caterpillar facility are generally provided by Caterpillar and performed by Cat dealers. Some items, such as tires, are covered under their manufacturers' warranties. * 51 What are your proposed exchange and return
programs and policies?
Please see applicable warranty statements in the attached documents. * 52 Describe any service contract options for the
items included in your proposal.

We have a large variety of service contract options which can all be customized according to customer needs. Below are just two examples.

More solutions are available and we encourage members and dealers to explore all options.
1) Equipment Protection Plans (EPP): After the initial warranty period ends, members may choose to purchase additional protection plans to reduce their exposure to unplanned costs. These policies are written based on months and hours of operation. There are four standard levels of coverage:
1) Powertrain
2) Powertrain + Hydraulics
3) Powertrain + Hydraulics + Technology
4) Premier
A description of all these options is included in the attached Equipment Protection Plans document. EPP can be purchased at the same time as the machine purchase, or anytime before the standard warranty expires. 2) Customer Value Agreements (CVA's):

A member may choose to enter into an agreement with their Cat dealer to perform routine maintenance and/or repairs. These contracts are customizable based on member needs.

The selling Cat dealer can take responsibility for some or all the required service and maintenance needs to allow the agency to gain efficiency by focusing on the performance demands more than maintenance. CVA's are a useful tool to manage expenses. CVAs can be purchased at the same time as the machine purchase, or anytime after. Cat Financial also offers CVAs, which can be performed by Cat dealers in the United States, and are particularly helpful for customers who move their machine fleet to multiple locations which may have different servicing Cat dealers. *
Bid Number: RFP 020223 Vendor Name: Caterpillar Inc
DocuSign Envelope ID: 7FBA555D-2590-4D87-A3EF-7DEA989EAD85 DocuSign Envelope ID: FC9F9D33-278C-48EA-BCBB-11FDFA91D43C Table 10: Payment Terms and Financing Options
Line
Item Question Response *
53 Describe your payment terms and accepted payment
methods.

Cat dealers are independently owned businesses. As such their payment terms and accepted payment methods vary, but all will be stated on individual invoices. The most common terms are net 30. *
54 Describe any leasing or financing options available for use by educational or governmental entities.

We offer both leasing and financing options to governmental members of Sourcewell at rates lower than available to the general public.

Caterpillar has its own financing arm, Cat Financial.

Cat Financial was founded in 1981 and serves Cat customers and dealers. With over 1,900 employees, Cat Financial is active in more than 40 countries covering more than 148,000 customers worldwide.

Cat Financial offers you a complete solution for your acquisition needs:
- Equipment & Attachments
- Parts
- Service
- Rebuilds
Financial products are aligned and customized with the project and work site requirements such as operating lease, loan or finance lease.

Find more information from Cat Financial here:
https://www.catfinancial.com/en_US.html/
*
55 Describe any standard transaction documents that you propose to use in connection with an awarded contract
(order forms, terms and conditions, service level
agreements, etc.). Upload a sample of each (as
applicable) in the document upload section of your
response.

Cat dealers are independently owned businesses. As such their standard transaction documents will vary.
*
56 Do you accept the P-card procurement and payment
process? If so, is there any additional cost to Sourcewell participating entities for using this process?
Because Cat dealers will be receiving payments directly from members, accepting P-card procurement will be at their discretion.

Many dealers do accept this method without additional fees. Some have limitations on the amount that can be processed.
*
Bid Number: RFP 020223 Vendor Name: Caterpillar Inc
DocuSign Envelope ID: 7FBA555D-2590-4D87-A3EF-7DEA989EAD85 DocuSign Envelope ID: FC9F9D33-278C-48EA-BCBB-11FDFA91D43C Table 11: Pricing and Delivery
Provide detailed pricing information in the questions that follow below. Keep in mind that reasonable price and product adjustments can be made during the term of an awarded Contract as described in the RFP, the template Contract, and the Sourcewell Price and Product Change Request Form.

Line
Item Question Response *
57 Describe your pricing model (e.g., line-item discounts or product-category discounts). Provide detailed pricing data (including standard or list pricing and the Sourcewell
discounted price) on all of the items that you want
Sourcewell to consider as part of your RFP response. If applicable, provide a SKU for each item in your proposal.

Upload your pricing materials (if applicable) in the
document upload section of your response.

We offer a deep list discount off the current Caterpillar machine and work tool list prices to all Sourcewell members. We have provided base machine list pricing in the document pricing section.

Base machines must be properly configured with other mandatory and optional items from the price list before they are considered operational. For the execution of the agreement we will ask our Cat dealer and Sourcewell member to use the Caterpillar price list that is current at the time of the quote. Dealers, in consultation with the member, will configure the machine to the desired specifications and apply the stated list discount to that configured list price amount. Dealer and members should remember to factor in any expected price increases if a machine will be built to order. The pricing document, in the applicable pricing document attachment section, shows the list discount offered for each new machine.

Additionally, we are pleased to offer a list discount of 15% off all products and consulting services under Cat Safety Services. *
58 Quantify the pricing discount represented by the pricing proposal in this response. For example, if the pricing in your response represents a percentage discount from
MSRP or list, state the percentage or percentage range.

Pricing in this proposal is a percentage discount from list on current machine and work tools list prices. Our discount range varies between 10 - 26% off of the list price depending on the product family or model.
*
59 Describe any quantity or volume discounts or rebate
programs that you offer.

Our dealers are empowered to consider purchase order volume, repeat purchases, etc. They may offer members additional discounts and /or services at their discretion.
*
60 Propose a method of facilitating “sourced” products or related services, which may be referred to as “open
market” items or “nonstandard options”. For example, you may supply such items “at cost” or “at cost plus a
percentage,” or you may supply a quote for each such
request.

Sourced goods / Open Market Items are available to members from Cat dealers. The prices for these good or services will represent fair marketing value and will be determined between the member and the selling dealer. We encourage our dealers and members to use these options as it facilitates complimentary products and streamlines the procurement process. Customers and dealers are responsible for including their Sourcewell member numbers on all documentation related to these purchases. Caterpillar Inc. is not a party to these sales and is exempted from including them in quarterly reports.

For audits, inclusion of a customer's Sourcewell member number on the PO and /or invoice shall be deemed sufficient.
*
61 Identify any element of the total cost of acquisition that is NOT included in the pricing submitted with your response.

This includes all additional charges associated with a
purchase that are not directly identified as freight or shipping charges. For example, list costs for items like pre- delivery inspection, installation, set up, mandatory training, or initial inspection. Identify any parties that impose such costs and their relationship to the Proposer.

Machines are unique in their requirements for preparation prior to use. Some may require local final assembly due to their large size others may have locally installed options (fire suppression, beacons, auto lube systems for example). When a dealer issues a quote for a machine, any dealer costs (like pre-delivery inspection, installation, set up, training, etc.) will be itemized separately and are not subject to the Caterpillar list discount for Sourcewell members. *
62 If freight, delivery, or shipping is an additional cost to the Sourcewell participating entity, describe in detail the complete freight, shipping, and delivery program.

There is no additional cost to members who choose to pick up their machines from the Cat dealer. Dealers may charge fees for delivery to the Sourcewell member's location.
*
63 Specifically describe freight, shipping, and delivery terms or programs available for Alaska, Hawaii, Canada, or any
offshore delivery.

Just as for members in the 48 contiguous states, there is no additional cost to members who choose to pick up their machine from their Cat dealer. Dealers may charge fees for delivery to the Sourcewell members' location.
*
64 Describe any unique distribution and/or delivery methods or options offered in your proposal.

Machines are large purchases and if there are unique Sourcewell member requirements our dealers will be happy to discuss on a case by case basis.
*
Bid Number: RFP 020223 Vendor Name: Caterpillar Inc
DocuSign Envelope ID: 7FBA555D-2590-4D87-A3EF-7DEA989EAD85 DocuSign Envelope ID: FC9F9D33-278C-48EA-BCBB-11FDFA91D43C Table 12: Pricing Offered
Line
Item The Pricing Offered in this Proposal is: * Comments 65 b. the same as the Proposer typically offers to GPOs, cooperative procurement organizations, or state purchasing departments.

Caterpillar wants to provide
the governmental customer
the best list discount possible
to allow them to be good
stewards of tax-payers funds.

We want our governmental
customers to have the ability
to choose which cooperative
contract better fits their needs.

Table 13: Audit and Administrative Fee
Line
Item Question Response *
66 Specifically describe any self-audit process or program that you plan to employ to verify compliance with your proposed Contract with Sourcewell. This process includes ensuring that Sourcewell participating entities obtain the proper pricing, that the Vendor reports all sales under the Contract each quarter, and that the Vendor remits the proper administrative fee to Sourcewell. Provide sufficient detail to support your ability to report quarterly sales to Sourcewell as described in the Contract template.

We plan to continue our very robust process to ensure
reporting speed, accuracy, and contract compliance.

Caterpillar and Cat dealers have very close and trusting relationships. Cat dealers are long-established, and the current process (under contract #032119-CAT) is working well. 1) To ensure pricing accuracy, we maintain our current
Sourcewell customer discount sheet on our dealer facing pricing pages. Dealers integrate these numbers automatically in their quoting software.
2) To ensure new machines and work tool sales are
recorded properly, we use our post-sale credit system. In a nutshell, this means that we corporately support the pricing offered in this contract at a level below what's available to other customers. To receive this additional monetary support after the machine is delivered, dealers must supply the member's name, address, and member number. There is no
additional burden or cost to our dealers to use the
Sourcewell contract and this is part of the reason for their high engagement and our high reporting accuracy.
3) At month end, we gather the new machine and work tool sales data attributed to Sourcewell and aggregate it for our reporting.
4) After quarter end, we will send the quarterly sales report and administration fee payment to Sourcewell for all items that are subject to the administrative fee.
*
67 If you are awarded a contract, provide a few examples of internal metrics that will be tracked to measure whether you are having success with the contract.

We regularly track the % of sales that are sold using a cooperative contract. We will continue this practice if we are awarded a contract for RFP 020223.
*
68 Identify a proposed administrative fee that you will pay to Sourcewell for facilitating, managing, and promoting the Sourcewell Contract in the event that you are awarded a Contract.  This fee is typically calculated as a percentage of Vendor’s sales under the Contract or as a per-unit fee; it is not a line-item addition to the Member’s cost of goods. (See the RFP and template Contract for additional details.)
Per amendment #1 to Contract #032119-CAT, we will be
pleased to offer an administrative fee of 0.33% of
Caterpillar's list price for each piece of new equipment and serialized work tools purchased by Sourcewell's Participating Entities. Caterpillar will pay this fee and will not ask dealers or members to pay the fee.
*
Bid Number: RFP 020223 Vendor Name: Caterpillar Inc
DocuSign Envelope ID: 7FBA555D-2590-4D87-A3EF-7DEA989EAD85 DocuSign Envelope ID: FC9F9D33-278C-48EA-BCBB-11FDFA91D43C Table 14A: Depth and Breadth of Offered Equipment Products and Services Line
Item Question Response *
69 Provide a detailed description of the
equipment, products, and services that you
are offering in your proposal.

The Cat equipment product line, consisting of more than 300 machines, sets the standard for our industry. We plan to help you meet your needs with our equipment, with our distribution and product support system, and the continual introduction and updating of products.

Caterpillar is pleased to offer a wide variety of products for Sourcewell members.

These products include some from the previously submitted RFP 011723, while excluding paving products, equipment, and services awarded on 060122-CAT. The equipment, products, and services for offered for RFP 020223 include:
- Cat Backhoe Loaders (9 models offered)
- Cat Compact Track Loader (7 models offered)
- Cat Skid Steer Loader (7 models offered)
- Cat Track Hydraulic Excavator (34 models offered)
- Cat Wheel Hydraulic Excavator (7 models offered)
- Cat Forestry (4 models offered)
- Cat Telehandlers (8 models offered)
- Cat Track Type Tractors (3 models offered)
- Cat Track Loaders (3 models offered)
- Cat Wheel Loaders (19 models offered)
- Cat Material Handlers (3 models offered)
- Cat Landfill Compactors (3 models offered)
- Product offerings by model and discount can be found in the pricing attachment within the applicable proposal pricing section.

Services and support include:
- Cat Attachments (Worktools)
- Cat Technology
- Cat Safety Services
- Cat Job Site Solutions
- Product offerings by model and discount can be found in the pricing attachment within the applicable proposal pricing section.
- Services and support brochures can be found in the additional documents section by name of offering.

For more detailed information on each of these products/offerings see the following website: https://www.cat.com/en_US.html
*
70 Within this RFP category there may be
subcategories of solutions. List subcategory
titles that best describe your products and
services.

N/A
*
Bid Number: RFP 020223 Vendor Name: Caterpillar Inc
DocuSign Envelope ID: 7FBA555D-2590-4D87-A3EF-7DEA989EAD85 DocuSign Envelope ID: FC9F9D33-278C-48EA-BCBB-11FDFA91D43C Bid Number: RFP 020223 Vendor Name: Caterpillar Inc
Table 148: Depth and 8readth of Offered Equipment Products and Services

Indicate below if the listed types or classes of equipment, products, and services are offered within your proposal. Provide additional comments in the text box provided, as necessary.

Line
Item Category or Type Offered * Comments
71 Wheeled, tracked, and backhoe loaders; Yes
No
Manufactured by Caterpillar. Offerings
listed in applicable pricing attachment
section.

*
72 Skidsteers; Yes
No
Manufactured by Caterpillar. Offerings
listed in applicable pricing attachment
section.

*
73 Mini excavators; Yes
No
Manufactured by Caterpillar. Offerings
listed in applicable pricing attachment
section.

*
74 Telehandlers; Yes
No
Manufactured by Caterpillar. Offerings
listed in applicable pricing attachment
section.

*
75 Soil compaction and site preparation
equipment
Yes
No
Manufactured by Caterpillar. Offerings
listed in applicable pricing attachment
section.

*

Exceptions to Terms, Conditions, or Specifications Form

Only those Proposer Exceptions to Terms, Conditions, or Specifications that have been accepted by Sourcewell have been incorporated into the contract text.

Documents

Ensure your submission document(s) conforms to the following:

1. Documents in PDF format are preferred. Documents in Word, Excel, or compatible formats may also be provided.

2. Documents should NOT have a security password, as Sourcewell may not be able to open the file. It is your sole responsibility to ensure that the uploaded document(s) are not either defective, corrupted or blank and that the documents can be opened and viewed by Sourcewell.

3. Sourcewell may reject any response where any document(s) cannot be opened and viewed by Sourcewell.

4. If you need to upload more than one (1) document for a single item, you should combine the documents into one zipped file. If the zipped file contains more than one (1) document, ensure each document is named, in relation to the submission format item responding to. For example, if responding to the Marketing Plan category save the document as "Marketing Plan."

Pricing - Pricing.zip - Tuesday January 31, 2O23 14:O5:38 Financial Strength and Stability - Fin Strength and Stability.zip - Tuesday January 31, 2O23 O9:2O:54 Marketing Plan/Samples - Marketing Plan.zip - Tuesday January 31, 2O23 O9:23:O4 WMBE/MBE/SBE or Related Certificates (optional)
Warranty Information - Warranty Combined.pdf - Tuesday January 31, 2O23 O9:21:38 Standard Transaction Document Samples (optional)
Upload Additional Document - Additional Documents.zip - Wednesday February O1, 2O23 17:O5:29 DocuSign Envelope ID: 7FBA555D-2590-4D87-A3EF-7DEA989EAD85 DocuSign Envelope ID: FC9F9D33-278C-48EA-BCBB-11FDFA91D43C Addenda, Terms and Conditions

PROPOSER AFFIDAVIT AND ASSURANCE OF COMPLIANCE
I certify that I am the authorized representative of the Proposer submitting the foregoing Proposal with the legal authority to bind the Proposer to this Affidavit and Assurance of Compliance:

1. The Proposer is submitting this Proposal under its full and complete legal name, and the Proposer legally exists in good standing in the jurisdiction of its residence.

2. The Proposer warrants that the information provided in this Proposal is true, correct, and reliable for purposes of evaluation for contract award.

3. The Proposer, including any person assisting with the creation of this Proposal, has arrived at this Proposal independently and the Proposal has been created without colluding with any other person, company, or parties that have or will submit a proposal under this solicitation; and the Proposal has in all respects been created fairly without any fraud or dishonesty. The Proposer has not directly or indirectly entered into any agreement or arrangement with any person or business in an effort to influence any part of this solicitation or operations of a resulting contract; and the Proposer has not taken any action in restraint of free trade or competitiveness in connection with this solicitation. Additionally, if Proposer has worked with a consultant on the Proposal, the consultant (an individual or a company) has not assisted any other entity that has submitted or will submit a proposal for this solicitation.

4. To the best of its knowledge and belief, and except as otherwise disclosed in the Proposal, there are no relevant facts or circumstances which could give rise to an organizational conflict of interest. An organizational conflict of interest exists when a vendor has an unfair competitive advantage or the vendor’s objectivity in performing the contract is, or might be, impaired.

5. The contents of the Proposal have not been communicated by the Proposer or its employees or agents to any person not an employee or legally authorized agent of the Proposer and will not be communicated to any such persons prior to Due Date of this solicitation.

6. If awarded a contract, the Proposer will provide to Sourcewell Participating Entities the equipment, products, and services in accordance with the terms, conditions, and scope of a resulting contract.

7. The Proposer possesses, or will possess before delivering any equipment, products, or services, all applicable licenses or certifications necessary to deliver such equipment, products, or services under any resulting contract.

8. The Proposer agrees to deliver equipment, products, and services through valid contracts, purchase orders, or means that are acceptable to Sourcewell Members. Unless otherwise agreed to, the Proposer must provide only new and first-quality products and related services to Sourcewell Members under an awarded Contract.

9. The Proposer will comply with all applicable provisions of federal, state, and local laws, regulations, rules, and orders.

10. The Proposer understands that Sourcewell will reject RFP proposals that are marked "confidential" (or "nonpublic," etc.), either substantially or in their entirety. Under Minnesota Statutes Section 13.591, subdivision 4, all proposals are considered nonpublic data until the evaluation is complete and a Contract is awarded. At that point, proposals become public data. Minnesota Statutes Section 13.37 permits only certain narrowly defined data to be considered a "trade secret," and thus nonpublic data under Minnesota's Data Practices Act.

11. Proposer its employees, agents, and subcontractors are not:

1. Included on the “Specially Designated Nationals and Blocked Persons” list maintained by the Office of Foreign Assets Control of the United States Department of the Treasury found at: https://www.treasury.gov/ofac/downloads/sdnlist.pdf;

2. Included on the government-wide exclusions lists in the United States System for Award Management found at:
https://sam.gov/SAM/; or

3. Presently debarred, suspended, proposed for debarment, declared ineligible, or voluntarily excluded from programs operated Bid Number: RFP 020223 Vendor Name: Caterpillar Inc
DocuSign Envelope ID: 7FBA555D-2590-4D87-A3EF-7DEA989EAD85 DocuSign Envelope ID: FC9F9D33-278C-48EA-BCBB-11FDFA91D43C by the State of Minnesota; the United States federal government or the Canadian government, as applicable; or any Participating Entity. Vendor certifies and warrants that neither it nor its principals have been convicted of a criminal offense related to the subject matter of this solicitation.

By checking this box I acknowledge that I am bound by the terms of the Proposer’s Affidavit, have the legal authority to submit this Proposal on behalf of the Proposer, and that this electronic acknowledgment has the same legal effect, validity, and enforceability as if I had hand signed the Proposal. This signature will not be denied such legal effect, validity, or enforceability solely because an electronic signature or electronic record was used in its formation. - Sean Egel, Sales Consultant, Caterpillar Inc.

The Proposer declares that there is an actual or potential Conflict of Interest relating to the preparation of its submission, and/or the Proposer foresees an actual or potential Conflict of Interest in performing the contractual obligations contemplated in the bid.

Yes No
The Bidder acknowledges and agrees that the addendum/addenda below form part of the Bid Document.

Check the box in the column "I have reviewed this addendum" below to acknowledge each of the addenda.

File Name
I have reviewed the
below addendum and
attachments (if
applicable)
Pages
Addendum_4_Medium_Duty_and_Compact_Construction_Eqpt_RFP_020223 Tue January 24 2023 02:56 PM 2
Addendum_3_Medium_Duty_and_Compact_Construction_Eqpt_RFP_020223 Tue January 3 2023 11:29 AM 1
Addendum_2_Medium_Duty_and_Compact_Construction_Eqpt_RFP_020223 Tue December 27 2022 03:08 PM 1
Addendum_1_Medium_Duty_and_Compact_Construction_Eqpt_RFP_020223 Mon December 12 2022 04:08 PM 1
Bid Number: RFP 020223 Vendor Name: Caterpillar Inc
DocuSign Envelope ID: 7FBA555D-2590-4D87-A3EF-7DEA989EAD85 DocuSign Envelope ID: FC9F9D33-278C-48EA-BCBB-11FDFA91D43C TM-20-01077

SOURCEWELL TRADEMARK LICENSE ADDENDUM

This Addendum is by and between SOURCEWELL, 202 – 12th Street NE, PO Box 219, Staples, Minnesota 56479 (“Sourcewell”) and Caterpillar Inc., having its principal place of business at 5212 N. O’Connor Blvd., Suite 1100, Irving, TX 75039, and offices at 100 NE Adams Street, Peoria, Illinois, 61629 (“Caterpillar” or “Vendor”). Sourcewell and Caterpillar may be referred to in this Agreement as a “Party” and collectively as the “Parties.”

The Parties maintain a contractual relationship for Vendor to provide equipment, products, or services to Sourcewell’s cooperative purchasing contracts as follows:

Sourcewell Contract 020223 – CAT (Solicitation Number: 020223)

Sourcewell and Vendor each own all right, title, and interest in their respective names, trademarks, service marks, related logos , and all other rights in the names, designs, likenesses and v isual representations thereof (“Licensed Trademarks”) , and desire to grant each other a royalty -free license to use certain Licensed Trademarks owned by the other Party under the terms and conditions set forth herein.

ARTICLE I: GRANT OF LICENSE

A. GRANT OF LICENSE. During the term of the Contract:

1. Sourcewell grants to Vendor a royalty-free, worldwide, non-exclusive right and license to use Sourcewell’s Licensed Trademarks provided to Vendor by Sourcewell in advertising and promotional materials for the purpose of marketing Sourcewell’s relationship with Vendor.

2. Vendor grants to Sourcewell a royalty-free, worldwide (except for those jurisdictions that are prohibited by applicable Anti-Corruption and International Trade Laws), non-exclusive right and license to use Vendor’s Licensed Trademarks provided to Sourcewell by Vendor in advertising and promotional materials for the purpose of marketing Vendor’s relationship with Sourcewell.

“Anti-Corruption and International Trade Laws” means all statutes, regulations, rules, executive orders, supervisory requirements, directives, ordinances, circulars, opinions, interpretive letters, and official releases of or by any government, or any authority, department or agency thereof or self- regulatory organization related to bribery, fraud, corruption, or international trade.

3. The Parties agree that each is the owner of all rights, including without limitation common law rights and goodwill, in relation to their respective Licensed Trademarks, and that any goodwill derived from the use of Licensed Trademarks by the other Party shall inure to the owner of the respective Licensed Trademarks.

B. LIMITED RIGHT OF SUBLICENSE. The rights and licenses granted herein includes a limited right of each Party to grant sublicenses to its and their respective distributors, marketing representatives, and agents (collectively “Permitted Sublicensees”) in advertising and promotional materials for the purpose of marketing the Contract. Any sublicense granted will be subject to the terms and conditions of this Addendum. Each Party will be responsible for any breach of this Article by any of their respective sublicensees.

DocuSign Envelope ID: 7FBA555D-2590-4D87-A3EF-7DEA989EAD85 DocuSign Envelope ID: FC9F9D33-278C-48EA-BCBB-11FDFA91D43C TM-20-01077

C. USE; QUALITY CONTROL.

1. Neither Party may alter the other Party’s Licensed Trademarks from the form provided by the other Party and must comply with the other Party’s removal requests as to specific uses of its Licensed Trademarks.

2. Each Party agrees to use, and to cause its Permitted Sublicensees to use, the other Party’s Licensed Trademarks only in good faith and in a dignified manner consistent with such Party’s use of the Licensed Trademarks. Upon written notice to the breaching Party, the breaching Party or their Permitted Sublicensees have thirty (30) days of the date of the written notice to cure the breach or the license will be terminated.

3. Beyond what is permitted in this Addendum, neither Party will:

a. attempt to register, or register any trademark, service mark, symbol, logo, get-up or device which is confusingly similar to any of the other Party’s Licensed Trademarks in any jurisdiction;

b. represent that it has any rights of any nature in the Licensed Trademarks other than those enjoyed under the terms of this Agreement;

c. use the other Party’s trademarks, service marks or copyrights, translations thereof or marks similar thereto, as part of its corporate name, trade name or a d/b/a name, favicons, social media names/handles, email addresses, email extensions, or domain names without prior written approval from the other Party; or

d. use the other Party’s trade names, trademarks, or service marks on any collateral business materials (e.g., business cards, letterhead, invoices, pens, notepads, fax cover sheets, etc.), unless otherwise approved in writing by the other Party.

ARTICLE II: TERM, TERMINATION, AND MISCELLANEOUS.

A. EFFECTIVE DATE. This Addendum is effective upon the date of the final signature below.

B. TERMINATION. Unless earlier terminated in accordance with this Article, this Addendum expires immediately upon the expiration or termination of the Contract.

1. Termination for Convenience. This Addendum may be terminated by either Party at any time upon ninety (90) days’ prior written notice to the other Party.

2. Termination for Breach. This Addendum may be terminated by either Party upon a breach of the terms of this Addendum by the other Party, upon written notice of breach to the breaching Party, and only if such breach is not cured within thirty (30) days of the date of the written notice.

3. Effect of Termination. Upon the termination of this Addendum for any reason, each Party will have thirty (30) days to, and require its Permitted Sublicensees to, remove all Licensed Trademarks from signage, websites, and the like bearing the other Party’s name or logo DocuSign Envelope ID: 7FBA555D-2590-4D87-A3EF-7DEA989EAD85 DocuSign Envelope ID: FC9F9D33-278C-48EA-BCBB-11FDFA91D43C TM-20-01077

(excepting Sourcewell’s pre-printed catalog of vendors which may be used until the next printing). Vendor must return all marketing and promotional materials, including signage, provided by Sourcewell, or dispose of it according to Sourcewell’s written directions.

4. Miscellaneous. The terms and conditions of this Addendum shall have no effect on the terms and conditions of any other trademark licenses signed by the Parties.

All other terms of the Contract remain in full force and effect, unless otherwise terminated.

SOURCEWELL
By: _________________
Name:

Title:

Date:

Caterpillar Inc.

By: _________________
Name:

Title:

Date:

DocuSign Envelope ID: 7FBA555D-2590-4D87-A3EF-7DEA989EAD85 DocuSign Envelope ID: FC9F9D33-278C-48EA-BCBB-11FDFA91D43C Jeremy Schwartz
Director of Operations and Procurement/CPO
5/24/2023 | 2:46 PM CDT
Patrick Kearns
5/24/2023 | 12:47 PM PDT
Vice President Sales & Marketing - North America
City of Gardena
Gardena City Council Meeting

AGENDA REPORT SUMMARY
Agenda Item No. 18.A
Section: DEPARTMENTAL

ITEMS - TRANSPORTATION
Meeting Date: August 13, 2024

TO: THE HONORABLE MAYOR AND MEMBERS OF THE GARDENA CITY COUNCIL AGENDA TITLE:

Approve Contract with Clean Energy for the Operations and Maintenance of GTrans' CNG Facility for $775,020 and a Project Total of $852,522 COUNCIL ACTION REQUIRED:

Staff Recommendation: Approval Contract
RECOMMENDATION AND STAFF SUMMARY:

GTrans has recently completed construction of its Compressed Natural Gas (CNG) fueling station and infrastructure upgrades. With its completion, GTrans is now able to fuel and maintain its 39 Compressed Natural Gas (CNG) buses on site.

The maintenance of the CNG fueling station itself is essential for the operation of the bus fleet, and to maintain the warranty on all subsystem and parts of the station. The maintenance and repair of the fuel station and all its related systems is highly specialized work. As such, GTrans wishes to hire Clean Energy, who built the CNG station, to provide all staff and resources necessary to maintain the fuel station in a state of good repair. Clean Energy has a unique understanding of GTrans' requirements, as it is the firm that designed and built GTrans' station and those of many local transit agencies. In addition, they have ample experience operating and maintaining CNG fueling stations for many public agencies.

The contract includes all labor, materials and equipment necessary to maintain and repair the fuel station and the related equipment. The contract also includes remote monitoring software system which allows the state of the CNG fueling station to be continuously monitored 24/7/365 by the Clean Energy Command Center. Fault errors can be corrected remotely and a technician can immediately travel to the site if the system goes down and needs repair.

Similarly, Clean Energy's national warehouse is in Carson, CA, which stocks critical parts and consumables - making for short lead times for any repairs or spare parts needed for GTrans' station.

Clean Energy's proposal is for one-year base contract, with four, one-year options. Their proposal maintains the monthly fixed fee at $12,917 for the entire base and option years of the contract, as outlined below:

Year
Monthly Fee
Annual Cost
Base Year
$12,917
$155,004
Option Year 1
$12,917
$155,004
Option Year 2
$12,917
$155,004
Option Year 3
$12,917
$155,004
Option Year 4
$12,917
$155,004

Total:
$775,020

GTrans would also like to include a 10 percent contingency, or $77,502 to accommodate any unforeseen expenditures that may arise. Such expenditures would not be allowed unless agreed upon and approved in advance by GTrans management. GTrans has reviewed the pricing and determined it to be fair and reasonable.

Therefore it is recommended that Council authorize a contract with Clean Energy for a base year with four, one-year options, at a five-year cost of $775,020 plus an additional 10 percent contingency ($77,502) as required, for a total of $852,522.

FINANCIAL IMPACT/COST:

GTrans has allocated funding in the FY25 and FY26 operating budgets for this service. If exercised, the cost of subsequent years of the agreement will be included in future budgets for Council consideration. There is no impact to the General Fund.

ATTACHMENTS:

City of Gardena Agreeement with Clean Energy O&M with Redacted Proposal.pdf

APPROVED:
___________________________________
Clint Osorio, City Manager

AGREEMENT BETWEEN

THE CITY OF GARDENA
AND

CLEAN ENERGY

This contract, hereinafter referred to as Agreement, is entered into by and between THE CITY OF GARDENA (“City”) and CLEAN ENERGY. (“Consultant”). Based on the mutual promises and covenants contained herein, the Parties hereto agree as follows:

1. Recitals.

A. City is desirous of obtaining operations and maintenance service for GTrans’ Compressed Natural Gas (CNG) fueling station (the “Station”).

B. Consultant is qualified by virtue of experience, training, education and expertise to provide these services.

C. City has determined that the public interest, convenience and necessity require the execution of this Agreement.

2. Services.

A. The services to be performed by Consultant shall consist of the scope of operations and maintenance services outlined as “Option A” on page 25 of Consultant’s proposal dated July 5, 2024 (“Consultant’s Proposal ”), and any associated addendum, incorporated herein by reference, unless otherwise instructed by City (collectively, the “Services”).

B. The Services shall be performed in accordance with the maintenance schedule set forth in Appendix B of Consultant’s Proposal. Consultant shall not be liable for any failure or delay in furnishing the Services resulting from fire, explosion, flood, storm, Act of God, governmental acts, orders or regulations, hostilities, civil disturbances, strikes, labor difficulties, difficulty in obtaining parts, supplies, or shipping facilities, inability to obtain o r delays in obtaining suitable material or facilities required for performance, temporary unavailability of qualified personnel, failure by City to provide appropriate access to e quipment or personnel, or other causes beyond Consultant’s reasonable control.

3. Additional Services. If City determines that additional services are required to be provided by Consultant in addition to the Services set forth above, City shall authorize Consultant to perform such additional services in writing (“Additional Services”). Such Additional Services shall be specifically described and approved by City in writing prior to the perf ormance thereof. Consultant shall be compensated for such Additional Services in accordance with the amount agreed upon in writing by the Parties. No compensation shall be paid to Consultant for Additional Services which are not specifically approved by City in writing.

4. Agreement Administrator. For purposes of this Agreement, City designates Rachel Yoo as the Agreement Administrator who shall monitor Consultant’s performance under this Agreement. All notices, invoices or other documents shall be addressed to the Agreement Administrator, as well as all substantive issues relating to this contract. City reserves the right to change this designation upon written notice to Consultant.

5. Consultant’s Proposal. This Agreement shall include and incorporate therein Consultant’s Proposal in response incorporated herein by reference. In the event of any inconsistency between the Docusign Envelope ID: E15EEB8B-60EB-4201-B7BA-8ECAAF71D5DE

terms of the proposal and this Agreement, this Agreement shall govern.

6. Timing of Performance. Time is of the essence with respect to Consultant’s performance of the Services required by this Agreement. Consultant shall diligently and timely pursue and complete the performance of the Services required of it by this Agreement. City, in its sole discretion, may extend the time for performance of any Service.

7. Compensation. Compensation for the Services shall be billed as set forth on page 25 of Consultant’s Proposal. The Compensation is inclusive of all costs that may be incurred by Consultant in performance of the Services, including but not limited to such items as travel, copies, delivery charges, phone charges, facsimile charges and taxes, except that any maintenance or repair costs incurred by Consultant due to damage, abuse or neglect by City shall be billed to City at Consultant’s then existing labor and materials rates.

8. Term of Agreement/Termination.

A. This Agreement shall be effective as of the date of execution by the City and shall remain in effect until the one (1) year anniversary of such date of execution , provided that upon the mutual written agreement of the Parties, this Agreement may be extended for four (4) additional one (1) year options.

B. City may terminate this Agreement without cause by providing written notice to Consultant not less than forty-five (45) days prior to an effective termination date. City’s only obligation in the event of termination will be payment of fees and allowed expenses incurred up to and including the effective date of termination.

C. Unless for cause, Consultant may not terminate this Agreement.

D. Upon receipt of a termination notice, Consultant shall: (1) promptly discontinue all Services, unless the notice directs otherwise; and (2) within ten (10) days after the effective termination date, deliver to City all files, data, reports, estimates, summaries, and such other information and materials as may have been accumulated or prepared to date by Consultant in performing the Services under this Agreement, whether completed or in progress. Consultant shall provide these documents by both hard copy and in electronic format if available. In the event of termination for other than cause attributable to Consultant, Consultant shall be entitled to reasonable compensation for the services it performs up to the date of termination and shall be deemed released from liability for any work assigned but not completed as of the effective date of termination.

9. Invoices and Payments.

A. Payment shall be made upon receipt and approval of invoices for Services rendered. In order for payment to be made, Consultant’s invoice must include an itemization as to the services rendered, date(s) of service, direct and/or subcontract costs, and be submitted on an official letterhead or invoice with Consultant’s name, address, and telephone number referenced.

B. The Agreement Administrator shall review the invoices to determine whether services performed and documents submitted are consistent with this Agreement. Payment shall be made within forty-five (45) days following receipt of the invoice or the Agreement Administrator shall provide Consultant with a written statement objecting to the charges and stating the reasons therefore.

C. Payment by City under this Agreement shall not be deemed a waiver of defects, even if such defects were known to City at the time of payment.

Docusign Envelope ID: E15EEB8B-60EB-4201-B7BA-8ECAAF71D5DE

10. Records/Audit.

A. Consultant shall be responsible for ensuring accuracy and propriety of all billings and shall maintain all supporting documentation for a minimum of three (3) years from the completion date of the Services under this agreement the following records:

1. All accounts and records, including personnel, property and financial, adequate to identify and account for all costs pertaining to this Agreement and assure proper accounting for all funds.

2. Records which establish that Consultant and any subconsultant who renders Services under this Agreement are in full compliance with the requirements of this Agreement and all federal, state and local laws and regulations.

3. Any additional records deemed necessary by City to assume verification of full compliance with this Agreement.

B. City shall have the right to audit Consultant’s invoices and all supporting documentation for purposes of compliance with this Agreement for a period of three years following the completion of Services under this Agreement.

C. Upon reasonable notice from City or any other governmental agency, Consultant shall cooperate fully with any audit of its billings conducted by, or of, City and shall permit access to its books, records and accounts as may be necessary to conduct such audits.

11. Successors and Assignment. This Agreement covers professional services of a specific and unique nature. Except as otherwise provided herein, Consultant shall not assign or transfer its interest in this Agreement or subcontract any services to be performed without amending this Agree ment. For the avoidance of doubt, Consultant has identified two subcontractors on page 10 of Consultant’s Proposal who may perform certain limited services on an as-needed basis, and such subcontractors are deemed pre-approved by City to perform such services. This Agreement shall be binding upon the heirs, executors, administrators, successors and assigns of the parties hereto.

12. Change in Name, Ownership or Control. Consultant shall notify the Agreement Administrator, in writing, of any change in name, ownership or control of Consultant’s firm or subconsultant. Change of ownership or control of Consultant’s firm may require an amendment to the Agreement.

13. Key Personnel . City has relied upon the professional training and ability of Consultant to perform the services hereunder as a material inducement to enter into this Agreement. Consultant shall provide properly skilled professional and technical personnel to perform al l services under this Agreement. In the event that City, in its sole discretion, at any time during the Agreement, desires the removal of any person or persons assigned by Consultant to perform Services pursuant to this Agreement, Consultant shall remove any such person immediately upon receiving notice from City.

14. Use of Materials.

A. City shall make available to Consultant such materials from its files as may be required by Consultant to perform Services under this Agreement. Such materials shall remain the property of City while in Consultant’s possession. Upon termination of this Agreement and payment of outstanding invoices of Consultant, or completion of work under this Agreement, Consultant shall return to City any property of City in its possession and any calculations, notes, reports, electronic files, or other materials prepared by Consultant in the course of performance of this Agreement.

B. City may utilize any material prepared or work performed by Consultant pursuant to this Agreement, including computer software, in any manner, which City deems proper without Docusign Envelope ID: E15EEB8B-60EB-4201-B7BA-8ECAAF71D5DE

additional compensation to Consultant. Consultant shall have no responsibility or liability for any revisions, changes, or corrections made by City, or any use or reuse pursuant to this paragraph unless Consultant accepts such responsibility in writing.

15. Confidentiality. Consultant acknowledges that some of the material and information that may come into its possession or knowledge in connection with this Agreement or its performance may consist of information that is exempt from disclosure to the public or other unauthorized persons under either state or federal statutes ("Confidential Information"). Confidential Information includes, but is not limited to, names, addresses, Social Security numbers, e -mail addresses, telephone numbers, financial profiles, credit card information, driver's license numbers, medical data, law enforcement records, agency source code or object code, agency security data, or information identifiable to an individual that relates to any of these types of information. Consultant ag rees to hold Confidential Information in strictest confidence and not to make use of Confidential Information for any purpose other than the performance of this Agreement, to release it only to authorized employees or Sub-consultants requiring such information for the purposes of carrying out this Agreement, and not to release, divulge, publish, transfer, sell, disclose, or otherwise make the information known to any other party without City's express written consent or as provided by law. Consultant agrees to release such information or material only to employees or Sub-consultants who have signed a nondisclosure agreement, the terms of which have been previously approved by City. Consultant agrees to implement physical, electronic, and managerial safeguards to prevent unauthorized access to Confidential Information.

"Personal information" including, but not limited to, "Protected Health Information" (PHI) under Health Insurance Portability And Accountability Act (HIPAA), individuals' names, addresses, phone numbers, birth dates, and social security numbers collected, used, or acquired in connection with this Agreement shall be protected against unauthorized use, disclosure, modification or loss.

HIPAA establishes national minimum standards for the use and disclosure of certain health information.

The Consultant must comply with all HIPAA requirements and rules when determined applicable by the City. If City determines that (1) City is a "covered entity" under HIPAA, and that (2) Consultant will perform "business associate" services and activities covered under HIPAA, then at City's request, Consultant agrees to execute City's Agreement in compliance with HIPAA.

Consultant shall ensure its directors, officers, employees, Sub-consultants or agents use personal information solely for the purposes of accomplishing the services set forth herein. Consultant and its Sub-consultants agree not to release, divulge, publish, transfer, sell or otherwise make known to unauthorized persons personal information without the express written consent of the City or as otherwise required by law.

Any breach of this provision may result in termination of the Agreement and demand for return of all personal information. Moreover, Consultant will indemnify and hold the City harmless from and against all losses and damages resulting from any unauthorized or improper disclosure, dissemination or use of the information as a result, in whole or in part, of Consultant’s action or inaction.

16. Nonuse of Intellectual Property of Third Parties. Consultant shall not use, disclose or copy any intellectual property of any third parties in connection with work carried out under this Agreement, except for intellectual property for which Consultant has a license. Consultant shall indemnify and hold City harmless against all claims raised against City based upon allegations that Consultant has wrongfully used intellectual property of oth ers in performing work for City, or that City has wrongfully used intellectual property developed by Consultant pursuant to this Agreement.

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17. Ownership of Work Product. All documents or other information created or developed by Consultant specifically for the Services shall, for purposes of copyright law, be deemed worked made for hire for City by Consultant and shall be the sole property of City. Consultant shall provide City with copies of these items upon demand, and in any event, upon termination of this Agreement.

18. Legal Requirements.

A. Consultant shall secure and maintain all licenses or permits required by law, including a City business license, and shall comply with all ordinances, laws, orders, rules, and regulations pertaining to the work.

B. Consultant warrants that it shall perform the services required by this Agreement in compliance with all applicable Federal and California employment laws, including, but not limited to, those laws related to minimum hours and wages; occupational health and safety; fair employment and employment practices; workers’ compensation; and all other Federal, State and local laws and ordinances applicable to the services required under this Agreements.

C. Consultant covenants that there shall be no discrimination based upon race, color, creed, religion, sex, marital status, age, handicap, national origin or ancestry, or any other category forbidden by law in performance of this Agreement.

19. Conflict of Interest and Reporting.

A. Consultant shall at all times avoid conflicts of interest or the appearance of a conflict of interest in the performance of this Agreement. If required, Consultant shall comply with the City’s Conflict of Interest reporting requirements. Consultant understands that pursuant to Gardena Municipal Code sections 2.24.020H and 2.24.025G, it is forbidden to make any contribution to a candidate or committee of a candidate for a municipal office of the City, or to an officeholder, until the completion of services to be performed under this Agreement.

B. Consultant and its representatives shall refrain from lobbying City of Gardena officials, employees and representatives for the duration of this Agreement.

20. Guarantee and Warranty. Consultant warrants to City that the material, analysis, data, programs and SERVICES to be delivered or rendered hereunder will be of the kind and quality designated and will be performed by qualified personnel. Without waiver of City’s other rights or remedies, City may require Consultant to re - perform any of said services, which were not performed in accordance with these standards. Consultant shall perform the remedial services at its sole expense.

21. Insurance.

A. Commencement of Work. Consultant shall not commence work under this Agreement until it has obtained City approved insurance. Before beginning work hereunder, during the entire period of this Agreement, for any extensions hereto, and for periods after the end of this Agreement as may be indicated below, Consultant must have and maintain in place all of the insurance coverage required in this Section. Consultant’s insurance shall comply with all items specified by this Agreement.

Any subcontractors shall be subject to all of the requirements of this Sectio n and Consultant shall be responsible to obtain evidence of insurance from each subcontractor and provide it to City before the subcontractor commences work. Alternatively, Consultant’s insurance may cover all subcontractors.

B. Insurance Company Requirements. All insurance policies used to satisfy the requirements imposed hereunder shall be issued by insurers admitted to do business in the State of California. Insurers shall have a current Best’s rating of not less than A-: VII, unless otherwise approved by City.

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C. Coverage, Limits and Policy Requirements. Consultant shall maintain the types of coverage and limits indicated below:

1. Commercial General Liability Insurance - a policy for occurrence coverage for bodily injury, personal injury and property damage, with coverage at least as broad as Insurance Services Office Form CG 00 01, with no special limitations affecting City. The limit for all coverage under this policy shall be no less than one million dollars ($1,000,000.00) per occurrence.

2. General Auto Liability Insurance - a policy including all coverage provided by and to the extent afforded by Insurance Services Office form CA 0001, including hired and non -owned autos with no special limitations affecting City. The limit for bodily injury and property damage liability shall be no less than one million dollars ($1,000,000.00) per accident.

3. Worker’s Compensation and Employer’s Liability Insurance - a policy which meets all statutory benefit requirements of the Labor Code, or other applicable law, of the State of California. The minimum coverage limits for said insurance shall be no less than one million dollars per claim. The policy shall be issued by an insurance company which is admitted to do business in the State of California and shall contain a clause that the policy may not be canceled without thirty (30) days prior written notice, return receipt requested, is mailed to City.

4. Professional Errors & Omissions - a policy with minimum limits of one million dollars ($1,000,000.00) per claim and aggregate. This policy shall be issued by an insurance company which is admitted to do business in the State of California and shall contain a clause that the policy may not be canceled until thirty (30) days written notice, unless cancelled for non-payment, then ten (10) calendar days notice shall be given, is mailed to City.

5. Policy Requirements. The policies set forth above shall comply with the following, as evidenced by the policies or endorsements to the policies:
a. The City, its appointed and elected officers, employees, agents and volunteers shall be added as additional insured to the policy. b. The insurer shall agree to provide City with thirty (30) days prior written notice, of any cancellation, non-renewal or material change in coverage, unless cancelled for non-payment, then ten (10) calendar days notice shall be given. c. For any claims with respect to the Services covered by this Agreement, Consultant’s insurance coverage shall be primary insurance as respects the City, its elected and appointed officers, employees, agents and volunteers. Any insurance or self-insurance maintained by the City, its elected and appointed officers, employees, agents and volunteers shall be excess of Consultant’s insurance and shall not contribute with it.

D. Additional Requirements. The procuring of such required policies of insurance shall not be construed to limit Consultant’s liability hereunder or to fulfill the indemnification provisions and requirements of this Agreement. There shall be no recourse again st City for payment of premiums or other amounts with respect thereto. City shall notify Consultant in writing of changes in the insurance requirements. If Consultant does not deposit copies of acceptable insurance policies or endorsements with City incorporating such changes within sixty (60) days of receipt of such notice, Consultant shall be deemed in default hereunder.

E. Deductibles. Any deductible or self -insured retention over $25,000 per occurrence must be declared to and approved by City. Any deductible exceeding an amount acceptable to City shall be subject to the following changes: either the insurer shall eliminate or reduce such deductibles or Docusign Envelope ID: E15EEB8B-60EB-4201-B7BA-8ECAAF71D5DE

self-insured retentions with respect to City, its officers, employees, agents and volunteers (with additional premium, if any, to be paid by Consultant); or Consultant shall provide satisfactory financial guarantee for payment of losses and related investigations, claim administration and defense expenses.

F. Verification of Compliance. Consultant shall furnish City with original policies or certificates and endorsements effecting coverage required by this Agreement. The endorsements are to be signed by a person authorized by the insurer to bind coverage on its behalf. All endorsements are to be received and approved by City before work commences. Not less than fifteen (15) days prior to the expiration date of any policy of insurance required by this Agreement, Consultant shall deliver to City a binder or certif icate of insurance with respect to each renewal policy, bearing a notation evidencing payment of the premium therefore, or accompanied by other proof of payment satisfactory to City.

Consultant shall provide full copies of any requested policies to City within three (3) days of any such request by City.

G. Termination for Lack of Required Coverage. If Consultant, for any reason, fails to have in place, at all times during the term of this Agreement, including any extension hereto, all required insurance and coverage, City may immediately obtain such coverage at Consultant’s expense and/or terminate this Agreement.

22. Indemnity and Limitation of Liability.

A. Consultant assumes all risk of injury to its employees, agents, and contractors, including loss or damage to property, except to the extent caused by the negligence or willful misconduct of City, its officers, agents, employees or volunteers.

B. Consultant shall defend, indemnify, and hold harmless the City, including its officials, officers, employees, and agents from and against all claims, suits, or causes of action for injury to any person or damage to any property arising out of any intentional or negligent acts or errors or omissions to act by Consultant or its agents, officers, employees, subcontractors, or independent contractor, in the performance of its obligations pursuant to this Agreement. This indemnity shall apply to all claims and liability regardless of whether any insurance policies are applicable. The policy limits do not act as a limitation upon the amount of indemnification to be provided by Consultant. This indemnity shall not apply if the claim arises out of the sole negligence or willful misconduct of City, its officers, agents, employees or volunteers.

C. No official, employee, agent or volunteer of City shall be personally liable for any default or liability under this Agreement.

D. Neither Party shall have any liability to the other Party for special, consequential, or incidental damages, except however in connection with any third-party claims that fall within the scope of the indemnity obligations of Consultant under this Agreement.

23. Independent Contractor. Consultant agrees to furnish consulting services in the capacity of an independent contractor and neither Consultant nor any of its employees shall be considered to be an employee or agent of City.

24. PERS Eligibility Indemnification. In the event that Consultant or any employee, agent, or subcontractor of Consultant providing services under this Agreement claims or is determined by a court of competent jurisdiction or the California Public Employees Retirement System (PERS) to be eligible for enrollment in PERS as an employee of the City, Consultant shall indemnify, defend, and hold harmless City for the payment of any employee and/or employer contributions for PERS benefits on behalf of Consultant or its employees, agents, or subcontractors, as well as for the payment of any penalties and interest on such contributions, which would otherwise be the responsibility of City.

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Notwithstanding any other agency, state or federal policy, rule, regulation, law or ordinance to the contrary, Consultant and any of its employees, agents, and subcontractors providing service under this Agreement shall not qualify for or become entitled to, and hereby agree to waive any claims to, any compensation, benefit, or any incident of employment by City, including but not limited to eligibility to enroll in PERS as an employee of City and entitlement to any contribution to be paid by City for employer contribution and/or employee contributions for PERS benefits.

25. Notices. Any notice or communication given under this Agreement shall be effective when deposited, postage prepaid, with the United States Postal Service and addressed to the contracting parties. Name, address, telephone and facsimile numbers of the parties are as follows:

City of Gardena – GTrans
Attn: Rachel Yoo
13999 S. Western Avenue
Gardena, California 90249
Email: [email protected]

Clean Energy
Attn: Chad Lindholm
With a copy to: Deputy General Counsel
4675 MacArthur Court, Suite 800
Newport Beach, California 92660
Fax: (949) 724-1397
Either party may change the information to which notice or communication is to be sent by providing advance written notice to the other party.

26. Severability. If any provision of this Agreement shall be held illegal, invalid, or unenforceable, in whole or in part, such provision shall be modified to the minimum extent necessary to make it legal, valid, and enforceable, and the legality, validity, and enforceability of the remaining provisions shall not be affected thereby.

27. Jurisdiction and Venue. This Agreement shall be deemed a contract under the laws of the State of California and for all purposes shall be interpreted in accordance with such laws. Both parties hereby agree and consent to the exclusive jurisdiction of the courts of the State of California and that the venue of any action brought hereunder shall be Los Angeles County, California.

28. Waiver. No delay or failure by either Party to exercise or enforce at any time any right or provision of this Agreement shall be considered a waiver thereof or of such Party’s right thereafter to exercise or enforce each and every right and provision of this Agreement. To be valid a waiver shall be in writing but need not be supported by consideration. No single waiver shall constitute a continuing or subsequent waiver.

29. Electronic Signatures. The parties hereby acknowledge and agree that electronic records and electronic signatures, as well as facsimile signatures, used in connection with the execution of this Agreement and electronic signatures, facsimile signatures or signatures transmitted by electronic mail in so-called pdf format shall be legal and binding and shall have the same full force and effect as if a paper original of this Agreement had been delivered and had been signed using a handwritten signature. City and Consultant (i) agree that an electronic signature, whether digital or encrypted, of a party to this Agreement is intended to authenticate this writing and to have the same force and effect as a manual signature, (ii) intend to be bound by the signatures (whether original, faxe d or electronic) on any document sent or delivered by facsimile or, electronic mail, or other electronic means, (iii) are aware that the other party will reply on such signatures, and (iv) hereby waive any defenses to the enforcement of the terms of this A greement based on the foregoing forms of signature. If this Docusign Envelope ID: E15EEB8B-60EB-4201-B7BA-8ECAAF71D5DE

Agreement has been executed by electronic signature, all parties executing this document are expressly consenting under the United States Federal Electronic Signatures in Global and National Commerce Act of 2000 ("E-SIGN") and California Uniform Electronic Transactions Act ("UETA")(Cal. Civ. Code § 1633.1, et seq.), that a signature by fax, email or other electronic means shall constitute an Electronic Signature to an Electronic Record under both E-SIGN and UETA with respect to this specific transaction.

30. Joint Drafting. Each party acknowledges that it has had an adequate opportunity to review each and every provision in this Agreement and to submit the same to counsel and other consultants for review and comment and that the parties jointly drafted this Agreement. No provision of this Agreement or any Assignment shall be construed more strictl y against one party than the other party by reason that one or the other party proposed, drafted or modified such provision or any other existing or proposed provision.

31. Public Records Act Disclosure. Consultant has been advised and is aware that this Agreement and all reports, documents, information and data, including, but not limited to, computer tapes, discs or files furnished or prepared by Consultant, or any of its subcontractors, pursuant to this Agreement and provided to City may be subject to public disclosure as required by the California Public Records Act (California Government Code section 7920.000 et seq.). Exceptions to public disclosure may be those documents or information that qualify as trade secrets, as that term is defined in the California Government Code section 7924.510, and of which Consultant informs City of such trade secret. The City will endeavor to maintain as confidential all information obtained by it that is designated as a trade secret. The City shall not, in any way, be liable or responsible for the disclosure of any trade secret including, without limitation, those records so marked if disclosure is deemed to be required by law or by order of the Court.

32. Authority to Execute. The persons executing this Agreement on behalf of the parties warrant that they are duly authorized to execute this Agreement.

33. Attorney’s Fees. In the event that legal action is necessary to enforce the provisions of this Agreement, or to declare the rights of the parties hereunder, the parties agree that the prevailing party in the legal action shall be entitled to recover attorney’s fees and court costs from the opposing party.

34. Entire Agreement. This Agreement contains the entire understanding between City and Consultant relating to the subject matter herein. Any prior agreement, promises, negotiations or representations not expressly set forth herein are of no force or effect. Subsequent modifications to this Agreement shall be effective only if in writing and signed by both parties. This Agreement may be si gned by the parties hereto in separate counterparts, including both counterparts that are executed on paper and counterparts that are in the form of electronic signatures. Electronic signatures include facsimile or email electronic signatures. Each execute d counterpart shall be deemed an original. All counterparts, taken together, constitute the executed Agreement. If any term, condition or covenant of this Agreement is held by a court of competent jurisdiction to be invalid, void or unenforceable, the remaining provisions of this Agreement shall be valid and binding.

(The Remainder of This Page is Intentionally Left Blank) (Signature Page Follows)

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IN WITNESS WHEREOF, the parties have hereunto affixed their names as of the day and year written below.

CITY OF GARDENA

By ______________________
Tasha Cerda
Mayor

Date ____________________

ACCEPTED: CLEAN ENERGY

By ______________________
Chad Lindholm
Senior Vice President

Date ____________________

APPROVED AS TO FORM:

________________________
Carmen Vasquez
City Attorney

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July 5, 2024

Ms. Rachel Yoo
Transit Administrative Supervisor
City of Gardena
13999 S. Western Ave
Gardena CA 90249

Re: CNG Fueling Station Maintenance and RNG

Dear Ms. Yoo,

Clean Energy has provided reliable CNG fuel station maintenance service to many transit agencies, locally and nationally, for more than 26 years. We are also the leading provider of RNG in North America. We are uniquely positioned to offer both of these services to the City of Garden transit division (GTrans) as you embark on owning a private CNG fuel station for your bus fleet.

This proposal contains two contract options for O&M maintenance and RNG supply and credit management.

The following is a summary of the advantages Clean Energy provides, specific to the scope of this proposal:

Maintenance Service
▪ Local, Trained Staff. Clean Energy’s local technicians are fully trained and experienced with maintaining ANGI compressors and equipment just like yours.

Our closest technician is approximately 30 minutes driving distance from your site.

As a backup, we have a large team of over 40 technicians in the LA/OC area. Our technicians complete rigorous CNG training courses at our training facility and are certified to work on a variety of CNG compressors and equipment.

▪ Around The Clock Support. Clean Energy’s technicians work scheduled day and night shifts, so any time your station has an issue, we respond quickly. Our headquarters in Newport Beach houses our Command Center, which is staffed 24/7/365 and actively monitors the status of your station. When possible, minor alarms can be reset remotely, and when needed, technicians are dispatched to your station.

▪ Parts Access. Our customers and technicians have access to a large inventory of parts in our main warehouse in Carson, CA, which enables us to provide parts to your site quickly to avoid station downtime. We also maintain thousands of inventory items at three other regional parts warehouses located across the Docusign Envelope ID: E15EEB8B-60EB-4201-B7BA-8ECAAF71D5DE

country. For speed of service, our technicians keep an inventory of common spare parts directly in their vehicles.

RNG Supply and ESP Services
▪ RNG Experience. Clean Energy was the first to establish a D3 RIN generating landfill project under the US EPA, so we understand the complexities of navigating the Renewable Fuel Standard (RFS) and California Low Carbon Fuel Standard (LCFS). We employ dedicated staff focused on project investment and development, gas marketing, operations, regulatory adherence, compliance management, and customer service. This in-house team will ensure GTrans meets all compliance obligations.

▪ Extensive RNG Supply. Clean Energy has one of the largest RNG supply portfolios available, with over 100 active and in-development projects at dairy farms, wastewater treatment facilities, and landfills nationwide, including 58 projects in CA. We have strategic partnerships with TotalEnergies and bp that allow us to quickly develop and scale our pipeline of projects. Clean Energy has a large network of public fueling stations in California but prioritizes our customers’ private stations when it comes to supply.

▪ Portfolio Approach vs. Back-to-Back Approach. Unlike most RNG suppliers and marketers, we do not back-to-back a supply source to a customer’s station.

Instead, we bring a portfolio of RNG to each of our customers, which ensures a reliable supply through a diverse mix of projects, and a guaranteed financial settlement. Others in the market use “unit contingent” contracts which eliminate their obligation to deliver RNG and pay the station customer if the RNG source is not flowing gas. Partnering with Clean Energy ensures uninterrupted, high-value RNG throughout the contract term.

▪ Commodity Management. Clean Energy is a long-standing registered Core Transport Agent (CTA) for the California Public Utilities Commission (PUC), delivering natural gas to core accounts across SoCalGas, SDG&E, and PG&E territory for over 10 years. We are also one of the largest CTAs, transporting over 8 million therms of natural gas to Southern California customers each month. We provide all commodity management services in-house, and our experienced team is in frequent and regular communication with the utility to balance customer pools, provide supply, and monitor pipeline conditions so customers don’t have to worry about the reliability of physical gas supply.

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Should you have any questions during the proposal evaluation period, please contact Alphonse Anderson, Senior Account Manager, at
[email protected] or (949) 266-1475. Alphonse works at our headquarters, located at 4675 MacArthur Court, Suite 800, Newport Beach, CA 92660.

We appreciate the opportunity to continue as a key partner in your transit fueling services.

Sincerely,

Chad Lindholm
Senior Vice President

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City of Gardena
Proposal for CNG Fueling Station Maintenance and RNG

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Qualifications, Related Experience, and References
Clean Energy Profile
Clean Energy provides CNG, RNG, LNG, LCNG, hydrogen, renewable electricity, and energy management solutions across North America. We are headquartered in Newport Beach, California and have regional offices in Colorado, Texas, New Hampshire, British Columbia and Ontario, Canada.

We were established on October 28, 1996, and have been a publicly traded corporation since 2007 (Nasdaq: CLNE).

In June 2018, we received a significant equity investment from Total Energies, one of the largest energy companies in the world. We serve fleet operators in a variety of markets, including transit, municipal/government, heavy-duty trucking, airports, refuse, industrial and institutional energy users.

Our 530 employees are based in North
America to provide services including
fueling station operation and
maintenance, station design and
construction, facility modification, and
supply of renewable fuel to our
customers.

Transit Experience
Since our inception in 1996, we have designed and constructed more than 700 natural gas fueling stations throughout North America.

We fuel over 9,000 transit vehicles with approximately 90 million gallons of RNG and CNG annually. Our customers include Foothill Transit, LA Metro, New York MTA, Long Beach Transit, City of Simi Valley, Gold Coast Transit, Santa Monica Big Blue Bus, Dallas Area Rapid Transit, Valley Metro, New Jersey Transit, Jacksonville Transportation Authority, NICE Bus (Nassau County, New York) and Washington Metro Area Transportation Authority. We currently operate 80 natural gas fueling stations for transit agencies nationwide.

We have performed new and upgraded station design-build services, and have ongoing operation and maintenance service contracts, for many of our 80 transit customer sites.

Additionally, Clean Energy is trusted by transit and fleet customers to provide station operation and maintenance services at 144 Southern California locations.

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City of Gardena
Proposal for CNG Fueling Station Maintenance and RNG

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Financial Strength and Staff Capability
As of December 31, 2023, our current assets are $470 million, including $265 million of cash and cash equivalents. For additional information, please refer to our latest financial statements here: https://investors.cleanenergyfuels.com/sec-filing s/sec-filing/10-
k/0001558370-24-002174. For 2023, our balance sheet is referenced on page 56. The income statement is referenced on page 57. The statement of cash flows is referenced on page 60. Finally, the notes to the financial statements begin on page 61.

References
Our references can be provided upon request.

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City of Gardena
Proposal for CNG Fueling Station Maintenance and RNG

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Personnel and Project Organization
Our primary project team assigned to the contracts are stated below. They are either based at our headquarters or are field-based and local. We will self-perform the specialized CNG maintenance and RNG services described herein. Please see Appendix A for our resumes.

CNG Station Maintenance Services
The following key personnel are assigned to the maintenance service contract.  Chris Gate, Operations Director
 Jose Armas, Operations Supervisor
 Ed Acepcion, Master Technician
 Dana Hufstetler, Service Technician 2
RNG Supply Services
The following key personnel are assigned to the RNG contract.  Sean Wine, Vice President, Renewables Distribution
 Paul Franza, Director of Operations Finance
 Hailin Koo, Renewables Portfolio Manager
 William Han, Vice President Commodities
Overall Contract Management
Clean Energy’s contract management team will oversee contract administration including contract negotiations, business terms, regular status meetings during execution of the contract with your team, and more.
 Alphonse Anderson, Contract Manager
 Mark Barton, Vice President
Project Organizational Charts
The project teams for the maintenance and RNG contracts, respectively, are shown below in our organizational charts.

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City of Gardena
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Subcontractors
Clean Energy will perform the specialized CNG maintenance services. We have identified subcontractors that are long-time subcontractors for Clean Energy who perform non-specialized CNG services only on an as-needed basis. Both subcontractors would likely perform less than 20 hours of work per year on this contract.

ICA Inc. will provide as nee ded specialized mechanical services such as pressure vessel welding or laser alignment. We have worked with ICA Inc. on numerous contracts where they’ve provided specialized mechanical services such as pressure welding and laser alignment.

Dr. Detail Services, cer
tified DBE, will provide station equipment pressure washing for the City’s new contract. We have worked with Dr. Detail on numerous contracts for 12 years where they’ve provided steam cleaning of the CNG compressor compounds and the dispensers, as well as re-painting equipment as needed to prevent corrosion and maintain a tidy appearance.

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City of Gardena
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CNG Station Maintenance: Work Plan
Project Kickoff
Clean Energy is familiar with your CNG fuel station as your design-build contractor. If awarded, we would recommend organizing an in-person meeting at your facility, including your operations and facilities team and our operations team, to discuss practical details such as check-in procedure, the typical schedule, and more.

Weekly Inspections
Our technicians will be onsite weekly to perform routine inspections on your compressors, dryer, dispensers, and other equipment according to OEM recommendations and best practices from our experience. The purpose is to identify potential future issues, excessive wear, or deviations from normal trends for the equipment’s expected performance. Please see Appendix B for our sample maintenance plan.

Preventative Maintenance
The required major PM intervals for the Ariel (ANGI) compressors are at 4000, 8000, 16000, 20000, 24000, 28000 and 32000 run hours. In between those hours there are additional minor PMs. Clean Energy has all required tasks for each PM fully documented in equipment manuals and periodic update bulletins from the OEM. All of this information is loaded into our Field Service computerized maintenance system. This is one of many tools used by our planners to ensure we effectively plan for and execute PM work at all sites we maintain.

Quality Control / Budget and Schedule Control
Service Quality Monitoring Program
The quality of our operation and maintenance service is ensured by the depth of experience of our technicians, and by our clear processes for detailed documentation of services performed. Any time work is performed at your sites our technicians note what has been done in our Field Service software using their tablets. Our work orders go through two levels of review to ensure accuracy and the appropriateness of work performed. Our supervisors, managers, and directors make regular quality inspections of our worksites to ensure equipment performs to the proper standards our customers Docusign Envelope ID: E15EEB8B-60EB-4201-B7BA-8ECAAF71D5DE

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expect. Any quality issues discovered are immediately resolved and require next-level approval when complete. The entire service team also focuses on consistent communications (prior, during, and post-work) as well as regular meetings with customers to ensure expectations are met or exceeded.

Schedule Control
Clean Energy manages scheduling by assigning service technicians to perform regular maintenance at fuel stations. At all hours of the day and night, Clean Energy technicians are working. Critical after-hour service does not require Clean Energy to dispatch an on- call employee from their home as we have technicians assigned to work all three shifts 24/7/365.

Schedules for preventative maintenance are managed by our operations team at our Newpor
t Beach headquarters. They ensure that correct parts are in stock and properly trained technicians are available to perform PM tasks at OEM recommended intervals.

Budget Control
Our proposed prices are based on experience from maintaining many CNG stations across the nation for many years. We know what it takes to maintain a high quality staff of technicians, support personnel and spare parts inventory, as well as all the ancillary systems and technologies to make it all work effectively together. Additionally, our strong financial position and our stable and long-term local presence ensures GTrans will receive effective maintenance service for the life of the contract.

Compliance to Contract Requirements and Technical Specifications Clean Energy employs a simple operation and maintenance philosophy, which is to protect customer fueling. We prioritize the reliability and safety of your CNG fueling equipment to ensure your buses will make rollout each day. We do this by focusing on preventative and corrective maintenance, and by investing in our people, training, processes, and technology. The following sections describe in greater detail how we accomplish this, and the positive results including world-class station reliability and performance.

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Command Center. Our Command Center, located in Newport Beach, CA is staffed by 20 Clean Energy employees for 24/7/365 coverage to monitor real time station status and respond to any station alert or fault that occur.

Once a fault is detected, our Command Center staff will immediately evaluate the situation and determine the appropriate response.

Remote SCADA. Our Command Center has access to screens that show the real time status of your stations. The screens are customized to match the equipment and automation hardware installed at your locations. We can remotely reset faults from the SCADA screens when appropriate.

Historian. Clean Energy uses technology to collect and record data that we use to make station adjustments and improvements, analyze station performance, and assist in diagnosing station faults. This product records critical station data including pressures, temperatures, valve status, and many other conditions.

The data collected is used to make improvements in station software, optimize set points, and help diagnose station issues. The long-term goal is to use this data to minimize station outages by predicting future component failures and correcting them before they fail.

Field Service Software. We use Microsoft Field Service software to manage assets and maintenance services. This software is used to manage tasks such as:
 Scheduled inspections and proactive maintenance
 Workforce task scheduling
 Document and organize all maintenance activities including scheduled and corrective maintenance activities
 Track status of OEM recommended maintenance plans for all tracked assets These electronic tools give our employees accurate, real-time maintenance records for every Clean Energy-maintained station.

Reporting Plan
The basis of our reporting plan is our cloud-based Field Service and Historian software, which will capture all relevant information about your station. GTrans will have access to reports as described below.

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RNG Overview
What is RNG?
Renewable Natural Gas (RNG) is biogas that has been upgraded for end-use applications including fueling natural gas vehicles. Unlike conventional natural gas, RNG is not a fossil fuel and does not involve drilling. It is derived from the breakdown of organic matter at sources including municipal solid waste landfills, digesters at wastewater treatment plants, livestock farms, food production facilities and organic waste management operations. See the following diagram for an overview of the source-to-end use process.

RNG Value
RNG provides great environmental benefits in comparison to other vehicle fuels. It drastically reduces carbon emissions - by an average of 300% - compared with diesel.

For this reason, the US Environmental Protection Agency (EPA) and California Air Resources Board (CARB) have incentivized the development of upstream RNG production facilities and downstream (vehicle fuel) RNG use through programs including the Renewable Fuel Standard (RFS) and Low Carbon Fuel Standard (LCFS).

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When qualifying RNG fuel is dispensed to a vehicle, it generates two types of environmental credits in California: RINs through the EPA RFS program, and LCFS credits through the CARB program. A fixed amount of RINs or LCFS credits are generated per gallon of RNG dispensed, according to detailed rules that all RNG providers must comply with. Once these RINs and LCFS credits are generated, they can be monetized (sold) to other regulated parties such as oil refineries, who must offset the greenhouse gas emissions they produce. This has resulted in a market-based system where the dollar value of RINs and LCFS credits fluctuate daily. For example, see the following chart, which shows the market value of these credits varying tremendously over a prior 2.5 year period; RINs ranged from $1 to $3.50 and LCFS credits ranged from less than $100 to more than $200.

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Please note that most of the monetary value of these credits stays with the upstream producers of RNG through contractual commitments that pay for the significant costs of developing and operating RNG production facilities. Please also note the values in this chart are per environmental credit, and not per gallon of RNG dispensed.

Clean Energy Makes RNG Easy
Clean Energy makes RNG easy for our customers. We understand the entire RNG value chain from experience. We have in-house experts who manage the entire process of flowing this renewable fuel into the natural gas pipeline network and then to our customers’ vehicles. We handle all associated administrative and regulatory reporting requirements in a dedicated division of our company called Clean Energy Renewable Fuels (CERF). Our customers simply reap the environmental and financial benefits of RNG. Here is a summary workflow of providing RNG to our customers in California.

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Our Value-Add Approach
Below is a summary of why Clean Energy is unique and the leading supplier of RNG to end-user customers like GTrans.
▪ RNG Experience. Clean Energy was the first to establish a D3 RIN generating landfill project under the US EPA, so we understand the complexities of navigating the Renewable Fuel Standard (RFS) and California Low Carbon Fuel Standard (LCFS). We employ dedicated staff focused on project investment and development, gas marketing, operations, regulatory adherence, compliance management, and customer service. This in-house team will ensure GTrans meets all compliance obligations.

▪ Extensive RNG Supply. Clean Energy has one of the largest RNG supply portfolios available, with over 100 active and in-development projects at dairy farms, wastewater treatment facilities, and landfills nationwide, including 58 projects in CA.

We have strategic partnerships with TotalEnergies and bp that allow us to quickly develop and scale our pipeline of projects. Clean Energy has a large network of public fueling stations in California but prioritizes our customers’ private stations when it comes to supply.

▪ Portfolio Approach vs. Back-to-Back Approach. Unlike most RNG suppliers and marketers, we do not back-to-back a supply source to a customer’s station. Instead, we bring a portfolio of RNG to each of our customers, which ensures a reliable supply through a diverse mix of projects, and a guaranteed financial settlement.

Others in the market use “unit contingent” contracts which eliminate their obligation to deliver RNG and pay the station customer if the RNG source is not flowing gas.

Partnering with Clean Energy ensures uninterrupted, high-value RNG throughout the contract term.

▪ Commodity Management. Clean Energy is a long-standing registered Core Transport Agent (CTA) for the California Public Utilities Commission (PUC), delivering natural gas to core accounts across SoCalGas, SDG&E, and PG&E territory for over 10 years. We are also one of the largest CTAs, transporting over 8 million therms of natural gas to Southern California customers each month. We provide all commodity management services in-house, and our experienced team is in frequent and regular communication with the utility to balance customer pools, provide supply, and monitor pipeline conditions. We can act as an Energy Service Provider (ESP) so customers don’t have to worry about the reliability of physical gas supply and can potentially receive better value.

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RNG Supply and Credit Management: Work Plan
Contract Implementation
Clean Energy is one of the largest providers of RNG for vehicles in the country and work with a variety of customers who operate bus and heavy-duty vehicle fleets in all sectors. We have standardized processes to make your move to RNG as easy as possible.

Our standard schedule for implementation of an RNG supply agreement and credit management service is 30-60 days. Below outlines the typical plan we follow to start this service.
• Weeks 1-2: Execute a Base Contract for the Sale and Purchase of Natural Gas (NAESB, example provided upon request), RNG transaction confirmation, and fossil natural gas transaction confirmation between GTrans and Clean Energy. Clean Energy will update all relevant pathways and registrations with the respective verification and compliance provider for RNG delivery to the delivery point, which is GTrans’ CNG fuel station. LCFS reporting on behalf of GTrans will be designated to Clean Energy in the contract, and you will not need to report under the LCFS Reporting Tool.
• Week 3-4: Clean Energy’s biogas operations team will collect utility statements from GTrans, update all relevant fuel pathway registrations with EPA and CARB, and assume fuel reporting responsibility.
• Week 5-6: GTrans will begin receiving RNG on the first of the month upon successful registration. This process is contingent upon producers processing applications with the EPA.

Once RNG is flowing to your station there will be an initial lag in the first RIN and LCFS credit payments. Afterward, RIN payments will be made monthly and LCFS payments quarterly, in line with reporting and processing requirements from CARB and the EPA.

This depends on which contract option is selected, as described in greater detail below.

Delivering RNG into the Pipeline System
GTrans will not have to make any changes to how you are currently receiving physical natural gas from the SoCalGas pipeline, nor will there be any technical change to the fuel dispensed into your bus fuel tanks. RNG is pooled upstream at the producer level, injected into the existing natural gas infrastructure, and allocated to the your station as a dispensing point. Clean Energy will supply RNG at the price point offered in this Docusign Envelope ID: E15EEB8B-60EB-4201-B7BA-8ECAAF71D5DE

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proposal for the full quantity your bus fleet uses, as determined by the SoCalGas invoice with meter reading for your site.

Optional: ESP Process
If GTrans chooses during the term of our contract, Clean Energy can serve as your Energy Service Provider (ESP) by entering into a pooling contract that requires monthly balancing of your monthly natural gas consumption. Clean Energy would communicate with GTrans to accurately nominate monthly gas use, monitor natural gas usage as accurately as possible, and communicate any material usage discrepancies. Using the month-end utility bills and readings from SoCalGas, Clean Energy would check the monthly natural gas consumption and forecast future usage.

Optional: Billing Services for Natural Gas Commodity
As part of the ESP service, billing would be performed monthly, with GTrans receiving two separate bills. Clean Energy would invoice GTrans for the natural gas delivered to the meter during the delivery month, and SoCalGas would invoice you for the applicable transmission and utility charges associated with the delivery of that gas. Clean Energy proposes to bill for the monthly gas consumption, based upon monthly meter reads and nominated volumes, by the middle of each following month.

Portfolio Approach to Delivering RNG Supply
To date, Clean Energy has secured over 100 low-carbon RNG supply projects (third party offtake and investment projects) to meet the demand from our customers and station network. The size of this RNG portfolio allows us to mitigate any risk of supply interruption, which is particularly important to municipal providers of critical community services.

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Cost Proposal and Scope of Work Summary
This proposal includes two options for GTrans consideration. Option A is maintenance of your CNG fueling station equipment. Option B is RNG supply and environmental credit management and monetization. Please see below for details.

Option A: O&M Maintenance (CONFIDENTIAL)
Included with this scope:
 Proactive maintenance and inspections. Monitoring of CNG station systems including critical flow, temperature, pressure, vibrations, leaks, and alarms. This includes remote monitoring, weekly on-site inspections and changing of compressor oil and filters.
 Preventative maintenance. Specific maintenance performed in conformance with manufacturer’s recommendations, industry best practices, and Authority Having Jurisdiction (AHJ). See the sample preventative maintenance schedule included in Appendix B for reference.

 Emergency maintenance and repair callouts. Unplanned service resulting from a system shutdown or failure causing the CNG station to not be fully operational shall be provided with expected 2 hour response time when commercially possible.  Standard monthly reporting of inspections, maintenance activity and equipment status according to the format shown in Appendix C

Excluded from this scope:
 Oil for compressors. GTrans to provide oil for filling of compressor reservoirs and GTrans to dispose of used oil.
 Additional permit fees for annual operation of the fuel station. For example, a South Coast Air Quality Management District permit for a station backup generator

Term:
 One year, with option to extend by mutual agreement. Clean Energy will hold the price for up to five years if the contract includes four years of optional extensions.

Price:
 $12,917 per month fixed fee, to be invoiced monthly

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RNG Payment Schedule
Clean Energy will settle all LCFS and RIN payments based on the volume weighted average price realized for LCFS and RIN transactions. For example, all August RINs generated realize the same volume weighted average price, and all Q1 LCFS credits generated realize the same volume weighted average price.

RIN payments are made monthly after we have received payment from buyers of the RINs. For example, RNG supplied and dispensed in August generates RINs in September, with payment to GTrans approximately 60 days later.

LCFS payments are made quarterly after we have received payment from buyers of the LCFS credits. For example, Q1 RNG delivered and dispensed would be reported to the agency by the end of Q2 with LCFS credits generated and sold at the beginning of Q3.

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Appendix A - Resumes

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Appendix B - Sample Maintenance Plan
We will perform weekly, monthly, and annual inspections, preventative maintenance, and corrective repairs as necessary on your CNG fuel station equipment. The following page shows the preventative maintenance schedule for your compressors. Please note the content of this schedule changes occasionally when Ariel releases updated maintenance bulletins that amend the recommendations.

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Gardena City Council Meeting

AGENDA REPORT SUMMARY
Agenda Item No. 18.B
Section: DEPARTMENTAL

ITEMS - TRANSPORTATION
Meeting Date: August 13, 2024

TO: THE HONORABLE MAYOR AND MEMBERS OF THE GARDENA CITY COUNCIL AGENDA TITLE:

Approve Contract with Clean Energy for the Purchase of Renewable Natural Gas (RNG) and Credit Management Services
COUNCIL ACTION REQUIRED:

Staff Recommendation: Approve Contract
RECOMMENDATION AND STAFF SUMMARY:

GTrans has recently completed construction of its Compressed Natural Gas (CNG) fueling station and is now able to fuel and maintain its 39 CNG buses onsite. As part of its effort to utilize renewable energy and eliminate greenhouse gas emissions, GTrans' plan included sourcing Renewable Natural Gas (RNG) for use at its new fueling station and receive eligible federal and State of California credits for using green energy.

Renewable Natural Gas (RNG) is a biogas that has been recycled and upgraded to a quality similar to fossil natural gas and can be used for end-use applications, including fueling natural gas vehicles. Unlike conventional natural gases, RNG is not a fossil fuel and does not involve drilling. Instead, it is derived from the breakdown of organic matter from solid waste landfills, livestock farms, food production facilities, and organic waste management operations. Biogas is captured and extracted from these sources, processed and purified to standards to become biomethane, and then entered into pipelines to be delivered locally to fueling stations. Using RNG as a fuel source will help GTrans maintain its commitment to sustainability, reducing carbon emissions, and improving the environment for our community.

As RNG provides environmental benefits, the U.S. Environmental Protection Agency (EPA) and California Air Resources Board (CARB) have incentivized the development of RNG production facilities and the use of RNG itself, through programs such as the Renewable Fuel Standard (RFS) and Low Carbon Fuel Standard (LCFS), respectively. When GTrans uses qualifying RNG fuel to power its vehicles, GTrans will generate credits from both programs (RIN credits and LCFS credits), which then can be monetized (sold) to obligated parties, such as oil refineries, who must purchase credits to offset the greenhouse gas emissions they produce. These credits are sold in a market-based system where credit values fluctuate daily.

The process to obtain credits requires comprehensive reporting, multiple contractual agreements, hiring brokers or credit clearance markets, and detailed record keeping for verifications and audits. This RNG credit management work requires constant observation and in-depth knowledge of the market, and GTrans needs a qualified firm who can provide this service on its behalf.

GTrans wishes to hire Clean Energy to provide both RNG commodity supply and associated credit management services. Since its inception in 1996, Clean Energy fueled over 9,000 transit vehicles with approximately 90 million gallons of RNG and CNG annually, and their California customers include LA Metro, Foothill Transit, Long Beach Transit, Santa Monica Big Blue Bus, and Gold Coast Transit. They have one of the largest RNG supply portfolios available, with over 100 active and in-development projects at dairy farms, wastewater treatment facilities, and landfills nationwide, which will ensure that GTrans will always have an uninterrupted source of RNG commodity and a guaranteed financial settlement. Also, Clean Energy has a dedicated division that handles all associated administrative and regulatory requirements of RNG process and credits, and they will handle all compliance obligations on GTrans' behalf.

Clean Energy's proposal is for a two-year base contract with three, one-year options. The RNG commodity will be provided by Clean Energy, but GTrans will receive the physical RNG delivery through the SoCalGas pipeline and will pay SoCalGas directly for the RNG quantity used as part of its utility bill. In terms of the RNG credit management services, Clean Energy will handle all RIN/LCFS credit sales on GTrans' behalf. Clean Energy will take a share of the revenue generated from the credit sales. The remaining revenue of 10% RIN and 60% LCFS will be paid to GTrans on a monthly (for RIN) and quarterly (for LCFS) basis. Estimation of each payment is subject to market conditions and actual fueling volumes, but GTrans will be earning revenue as we continue to use RNG and earn credits.

Therefore, it is recommended that Council authorize contracts with Clean Energy for RNG commodity supply to be delivered to GTrans through SoCalGas pipeline, as well as for RIN and LCFS credit management services that will bring another source of revenue to GTrans to support its operations.

FINANCIAL IMPACT/COST:

GTrans has allocated funding for the RNG commodity supply in the FY25 and FY26 operating budgets. Subsequent years will be included in future budgets for Council consideration. The revenue generated through the credit management service is not included in the budget due to the market volatility. There is no impact to the General Fund.

ATTACHMENTS:

RNG Overview from Clean Energy Proposal.pdf
Clean Energy Proposal - GTrans CNG Station Maintenance and RNG_Redacted.pdf City of Gardena - NAESB with Special Provision.pdf
City of Gardena - RNG TC.pdf
City of Gardena - Fossil TC.pdf

APPROVED:
___________________________________
Clint Osorio, City Manager

City of Gardena
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RNG Overview
What is RNG?
Renewable Natural Gas (RNG) is biogas that has been upgraded for end-use applications including fueling natural gas vehicles. Unlike conventional natural gas, RNG is not a fossil fuel and does not involve drilling. It is derived from the breakdown of organic matter at sources including municipal solid waste landfills, digesters at wastewater treatment plants, livestock farms, food production facilities and organic waste management operations. See the following diagram for an overview of the source-to-end use process.

RNG Value
RNG provides great environmental benefits in comparison to other vehicle fuels. It drastically reduces carbon emissions - by an average of 300% - compared with diesel.

For this reason, the US Environmental Protection Agency (EPA) and California Air Resources Board (CARB) have incentivized the development of upstream RNG production facilities and downstream (vehicle fuel) RNG use through programs including the Renewable Fuel Standard (RFS) and Low Carbon Fuel Standard (LCFS).

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When qualifying RNG fuel is dispensed to a vehicle, it generates two types of environmental credits in California: RINs through the EPA RFS program, and LCFS credits through the CARB program. A fixed amount of RINs or LCFS credits are generated per gallon of RNG dispensed, according to detailed rules that all RNG providers must comply with. Once these RINs and LCFS credits are generated, they can be monetized (sold) to other regulated parties such as oil refineries, who must offset the greenhouse gas emissions they produce. This has resulted in a market-based system where the dollar value of RINs and LCFS credits fluctuate daily. For example, see the following chart, which shows the market value of these credits varying tremendously over a prior 2.5 year period; RINs ranged from $1 to $3.50 and LCFS credits ranged from less than $100 to more than $200.

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Please note that most of the monetary value of these credits stays with the upstream producers of RNG through contractual commitments that pay for the significant costs of developing and operating RNG production facilities. Please also note the values in this chart are per environmental credit, and not per gallon of RNG dispensed.

Clean Energy Makes RNG Easy
Clean Energy makes RNG easy for our customers. We understand the entire RNG value chain from experience. We have in-house experts who manage the entire process of flowing this renewable fuel into the natural gas pipeline network and then to our customers’ vehicles. We handle all associated administrative and regulatory reporting requirements in a dedicated division of our company called Clean Energy Renewable Fuels (CERF). Our customers simply reap the environmental and financial benefits of RNG. Here is a summary workflow of providing RNG to our customers in California.

July 5, 2024

Ms. Rachel Yoo
Transit Administrative Supervisor
City of Gardena
13999 S. Western Ave
Gardena CA 90249

Re: CNG Fueling Station Maintenance and RNG

Dear Ms. Yoo,

Clean Energy has provided reliable CNG fuel station maintenance service to many transit agencies, locally and nationally, for more than 26 years. We are also the leading provider of RNG in North America. We are uniquely positioned to offer both of these services to the City of Garden transit division (GTrans) as you embark on owning a private CNG fuel station for your bus fleet.

This proposal contains two contract options for O&M maintenance and RNG supply and credit management.

The following is a summary of the advantages Clean Energy provides, specific to the scope of this proposal:

Maintenance Service
▪ Local, Trained Staff. Clean Energy’s local technicians are fully trained and experienced with maintaining ANGI compressors and equipment just like yours.

Our closest technician is approximately 30 minutes driving distance from your site.

As a backup, we have a large team of over 40 technicians in the LA/OC area. Our technicians complete rigorous CNG training courses at our training facility and are certified to work on a variety of CNG compressors and equipment.

▪ Around The Clock Support. Clean Energy’s technicians work scheduled day and night shifts, so any time your station has an issue, we respond quickly. Our headquarters in Newport Beach houses our Command Center, which is staffed 24/7/365 and actively monitors the status of your station. When possible, minor alarms can be reset remotely, and when needed, technicians are dispatched to your station.

▪ Parts Access. Our customers and technicians have access to a large inventory of parts in our main warehouse in Carson, CA, which enables us to provide parts to your site quickly to avoid station downtime. We also maintain thousands of inventory items at three other regional parts warehouses located across the

country. For speed of service, our technicians keep an inventory of common spare parts directly in their vehicles.

RNG Supply and ESP Services
▪ RNG Experience. Clean Energy was the first to establish a D3 RIN generating landfill project under the US EPA, so we understand the complexities of navigating the Renewable Fuel Standard (RFS) and California Low Carbon Fuel Standard (LCFS). We employ dedicated staff focused on project investment and development, gas marketing, operations, regulatory adherence, compliance management, and customer service. This in-house team will ensure GTrans meets all compliance obligations.

▪ Extensive RNG Supply. Clean Energy has one of the largest RNG supply portfolios available, with over 100 active and in-development projects at dairy farms, wastewater treatment facilities, and landfills nationwide, including 58 projects in CA. We have strategic partnerships with TotalEnergies and bp that allow us to quickly develop and scale our pipeline of projects. Clean Energy has a large network of public fueling stations in California but prioritizes our customers’ private stations when it comes to supply.

▪ Portfolio Approach vs. Back-to-Back Approach. Unlike most RNG suppliers and marketers, we do not back-to-back a supply source to a customer’s station.

Instead, we bring a portfolio of RNG to each of our customers, which ensures a reliable supply through a diverse mix of projects, and a guaranteed financial settlement. Others in the market use “unit contingent” contracts which eliminate their obligation to deliver RNG and pay the station customer if the RNG source is not flowing gas. Partnering with Clean Energy ensures uninterrupted, high-value RNG throughout the contract term.

▪ Commodity Management. Clean Energy is a long-standing registered Core Transport Agent (CTA) for the California Public Utilities Commission (PUC), delivering natural gas to core accounts across SoCalGas, SDG&E, and PG&E territory for over 10 years. We are also one of the largest CTAs, transporting over 8 million therms of natural gas to Southern California customers each month. We provide all commodity management services in-house, and our experienced team is in frequent and regular communication with the utility to balance customer pools, provide supply, and monitor pipeline conditions so customers don’t have to worry about the reliability of physical gas supply.

Should you have any questions during the proposal evaluation period, please contact Alphonse Anderson, Senior Account Manager, at
[email protected] or (949) 266-1475. Alphonse works at our headquarters, located at 4675 MacArthur Court, Suite 800, Newport Beach, CA 92660.

We appreciate the opportunity to continue as a key partner in your transit fueling services.

Sincerely,

Chad Lindholm
Senior Vice President

City of Gardena
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Qualifications, Related Experience, and References
Clean Energy Profile
Clean Energy provides CNG, RNG, LNG, LCNG, hydrogen, renewable electricity, and energy management solutions across North America. We are headquartered in Newport Beach, California and have regional offices in Colorado, Texas, New Hampshire, British Columbia and Ontario, Canada.

We were established on October 28, 1996, and have been a publicly traded corporation since 2007 (Nasdaq: CLNE).

In June 2018, we received a significant equity investment from Total Energies, one of the largest energy companies in the world. We serve fleet operators in a variety of markets, including transit, municipal/government, heavy-duty trucking, airports, refuse, industrial and institutional energy users.

Our 530 employees are based in North
America to provide services including
fueling station operation and
maintenance, station design and
construction, facility modification, and
supply of renewable fuel to our
customers.

Transit Experience
Since our inception in 1996, we have designed and constructed more than 700 natural gas fueling stations throughout North America.

We fuel over 9,000 transit vehicles with approximately 90 million gallons of RNG and CNG annually. Our customers include Foothill Transit, LA Metro, New York MTA, Long Beach Transit, City of Simi Valley, Gold Coast Transit, Santa Monica Big Blue Bus, Dallas Area Rapid Transit, Valley Metro, New Jersey Transit, Jacksonville Transportation Authority, NICE Bus (Nassau County, New York) and Washington Metro Area Transportation Authority. We currently operate 80 natural gas fueling stations for transit agencies nationwide.

We have performed new and upgraded station design-build services, and have ongoing operation and maintenance service contracts, for many of our 80 transit customer sites.

Additionally, Clean Energy is trusted by transit and fleet customers to provide station operation and maintenance services at 144 Southern California locations.

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Financial Strength and Staff Capability
As of December 31, 2023, our current assets are $470 million, including $265 million of cash and cash equivalents. For additional information, please refer to our latest financial statements here: https://investors.cleanenergyfuels.com/sec-filing s/sec-filing/10-
k/0001558370-24-002174. For 2023, our balance sheet is referenced on page 56. The income statement is referenced on page 57. The statement of cash flows is referenced on page 60. Finally, the notes to the financial statements begin on page 61.

References
Our references can be provided upon request.

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Personnel and Project Organization
Our primary project team assigned to the contracts are stated below. They are either based at our headquarters or are field-based and local. We will self-perform the specialized CNG maintenance and RNG services described herein. Please see Appendix A for our resumes.

CNG Station Maintenance Services
The following key personnel are assigned to the maintenance service contract.  Chris Gate, Operations Director
 Jose Armas, Operations Supervisor
 Ed Acepcion, Master Technician
 Dana Hufstetler, Service Technician 2
RNG Supply Services
The following key personnel are assigned to the RNG contract.  Sean Wine, Vice President, Renewables Distribution
 Paul Franza, Director of Operations Finance
 Hailin Koo, Renewables Portfolio Manager
 William Han, Vice President Commodities
Overall Contract Management
Clean Energy’s contract management team will oversee contract administration including contract negotiations, business terms, regular status meetings during execution of the contract with your team, and more.
 Alphonse Anderson, Contract Manager
 Mark Barton, Vice President
Project Organizational Charts
The project teams for the maintenance and RNG contracts, respectively, are shown below in our organizational charts.

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Subcontractors
Clean Energy will perform the specialized CNG maintenance services. We have identified subcontractors that are long-time subcontractors for Clean Energy who perform non-specialized CNG services only on an as-needed basis. Both subcontractors would likely perform less than 20 hours of work per year on this contract.

ICA Inc. will provide as nee ded specialized mechanical services such as pressure vessel welding or laser alignment. We have worked with ICA Inc. on numerous contracts where they’ve provided specialized mechanical services such as pressure welding and laser alignment.

Dr. Detail Services, cer
tified DBE, will provide station equipment pressure washing for the City’s new contract. We have worked with Dr. Detail on numerous contracts for 12 years where they’ve provided steam cleaning of the CNG compressor compounds and the dispensers, as well as re-painting equipment as needed to prevent corrosion and maintain a tidy appearance.

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CNG Station Maintenance: Work Plan
Project Kickoff
Clean Energy is familiar with your CNG fuel station as your design-build contractor. If awarded, we would recommend organizing an in-person meeting at your facility, including your operations and facilities team and our operations team, to discuss practical details such as check-in procedure, the typical schedule, and more.

Weekly Inspections
Our technicians will be onsite weekly to perform routine inspections on your compressors, dryer, dispensers, and other equipment according to OEM recommendations and best practices from our experience. The purpose is to identify potential future issues, excessive wear, or deviations from normal trends for the equipment’s expected performance. Please see Appendix B for our sample maintenance plan.

Preventative Maintenance
The required major PM intervals for the Ariel (ANGI) compressors are at 4000, 8000, 16000, 20000, 24000, 28000 and 32000 run hours. In between those hours there are additional minor PMs. Clean Energy has all required tasks for each PM fully documented in equipment manuals and periodic update bulletins from the OEM. All of this information is loaded into our Field Service computerized maintenance system. This is one of many tools used by our planners to ensure we effectively plan for and execute PM work at all sites we maintain.

Quality Control / Budget and Schedule Control
Service Quality Monitoring Program
The quality of our operation and maintenance service is ensured by the depth of experience of our technicians, and by our clear processes for detailed documentation of services performed. Any time work is performed at your sites our technicians note what has been done in our Field Service software using their tablets. Our work orders go through two levels of review to ensure accuracy and the appropriateness of work performed. Our supervisors, managers, and directors make regular quality inspections of our worksites to ensure equipment performs to the proper standards our customers

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expect. Any quality issues discovered are immediately resolved and require next-level approval when complete. The entire service team also focuses on consistent communications (prior, during, and post-work) as well as regular meetings with customers to ensure expectations are met or exceeded.

Schedule Control
Clean Energy manages scheduling by assigning service technicians to perform regular maintenance at fuel stations. At all hours of the day and night, Clean Energy technicians are working. Critical after-hour service does not require Clean Energy to dispatch an on- call employee from their home as we have technicians assigned to work all three shifts 24/7/365.

Schedules for preventative maintenance are managed by our operations team at our Newpor
t Beach headquarters. They ensure that correct parts are in stock and properly trained technicians are available to perform PM tasks at OEM recommended intervals.

Budget Control
Our proposed prices are based on experience from maintaining many CNG stations across the nation for many years. We know what it takes to maintain a high quality staff of technicians, support personnel and spare parts inventory, as well as all the ancillary systems and technologies to make it all work effectively together. Additionally, our strong financial position and our stable and long-term local presence ensures GTrans will receive effective maintenance service for the life of the contract.

Compliance to Contract Requirements and Technical Specifications Clean Energy employs a simple operation and maintenance philosophy, which is to protect customer fueling. We prioritize the reliability and safety of your CNG fueling equipment to ensure your buses will make rollout each day. We do this by focusing on preventative and corrective maintenance, and by investing in our people, training, processes, and technology. The following sections describe in greater detail how we accomplish this, and the positive results including world-class station reliability and performance.

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Command Center. Our Command Center, located in Newport Beach, CA is staffed by 20 Clean Energy employees for 24/7/365 coverage to monitor real time station status and respond to any station alert or fault that occur.

Once a fault is detected, our Command Center staff will immediately evaluate the situation and determine the appropriate response.

Remote SCADA. Our Command Center has access to screens that show the real time status of your stations. The screens are customized to match the equipment and automation hardware installed at your locations. We can remotely reset faults from the SCADA screens when appropriate.

Historian. Clean Energy uses technology to collect and record data that we use to make station adjustments and improvements, analyze station performance, and assist in diagnosing station faults. This product records critical station data including pressures, temperatures, valve status, and many other conditions.

The data collected is used to make improvements in station software, optimize set points, and help diagnose station issues. The long-term goal is to use this data to minimize station outages by predicting future component failures and correcting them before they fail.

Field Service Software. We use Microsoft Field Service software to manage assets and maintenance services. This software is used to manage tasks such as:
 Scheduled inspections and proactive maintenance
 Workforce task scheduling
 Document and organize all maintenance activities including scheduled and corrective maintenance activities
 Track status of OEM recommended maintenance plans for all tracked assets These electronic tools give our employees accurate, real-time maintenance records for every Clean Energy-maintained station.

Reporting Plan
The basis of our reporting plan is our cloud-based Field Service and Historian software, which will capture all relevant information about your station. GTrans will have access to reports as described below.

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RNG Overview
What is RNG?
Renewable Natural Gas (RNG) is biogas that has been upgraded for end-use applications including fueling natural gas vehicles. Unlike conventional natural gas, RNG is not a fossil fuel and does not involve drilling. It is derived from the breakdown of organic matter at sources including municipal solid waste landfills, digesters at wastewater treatment plants, livestock farms, food production facilities and organic waste management operations. See the following diagram for an overview of the source-to-end use process.

RNG Value
RNG provides great environmental benefits in comparison to other vehicle fuels. It drastically reduces carbon emissions - by an average of 300% - compared with diesel.

For this reason, the US Environmental Protection Agency (EPA) and California Air Resources Board (CARB) have incentivized the development of upstream RNG production facilities and downstream (vehicle fuel) RNG use through programs including the Renewable Fuel Standard (RFS) and Low Carbon Fuel Standard (LCFS).

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When qualifying RNG fuel is dispensed to a vehicle, it generates two types of environmental credits in California: RINs through the EPA RFS program, and LCFS credits through the CARB program. A fixed amount of RINs or LCFS credits are generated per gallon of RNG dispensed, according to detailed rules that all RNG providers must comply with. Once these RINs and LCFS credits are generated, they can be monetized (sold) to other regulated parties such as oil refineries, who must offset the greenhouse gas emissions they produce. This has resulted in a market-based system where the dollar value of RINs and LCFS credits fluctuate daily. For example, see the following chart, which shows the market value of these credits varying tremendously over a prior 2.5 year period; RINs ranged from $1 to $3.50 and LCFS credits ranged from less than $100 to more than $200.

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Please note that most of the monetary value of these credits stays with the upstream producers of RNG through contractual commitments that pay for the significant costs of developing and operating RNG production facilities. Please also note the values in this chart are per environmental credit, and not per gallon of RNG dispensed.

Clean Energy Makes RNG Easy
Clean Energy makes RNG easy for our customers. We understand the entire RNG value chain from experience. We have in-house experts who manage the entire process of flowing this renewable fuel into the natural gas pipeline network and then to our customers’ vehicles. We handle all associated administrative and regulatory reporting requirements in a dedicated division of our company called Clean Energy Renewable Fuels (CERF). Our customers simply reap the environmental and financial benefits of RNG. Here is a summary workflow of providing RNG to our customers in California.

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Our Value-Add Approach
Below is a summary of why Clean Energy is unique and the leading supplier of RNG to end-user customers like GTrans.
▪ RNG Experience. Clean Energy was the first to establish a D3 RIN generating landfill project under the US EPA, so we understand the complexities of navigating the Renewable Fuel Standard (RFS) and California Low Carbon Fuel Standard (LCFS). We employ dedicated staff focused on project investment and development, gas marketing, operations, regulatory adherence, compliance management, and customer service. This in-house team will ensure GTrans meets all compliance obligations.

▪ Extensive RNG Supply. Clean Energy has one of the largest RNG supply portfolios available, with over 100 active and in-development projects at dairy farms, wastewater treatment facilities, and landfills nationwide, including 58 projects in CA.

We have strategic partnerships with TotalEnergies and bp that allow us to quickly develop and scale our pipeline of projects. Clean Energy has a large network of public fueling stations in California but prioritizes our customers’ private stations when it comes to supply.

▪ Portfolio Approach vs. Back-to-Back Approach. Unlike most RNG suppliers and marketers, we do not back-to-back a supply source to a customer’s station. Instead, we bring a portfolio of RNG to each of our customers, which ensures a reliable supply through a diverse mix of projects, and a guaranteed financial settlement.

Others in the market use “unit contingent” contracts which eliminate their obligation to deliver RNG and pay the station customer if the RNG source is not flowing gas.

Partnering with Clean Energy ensures uninterrupted, high-value RNG throughout the contract term.

▪ Commodity Management. Clean Energy is a long-standing registered Core Transport Agent (CTA) for the California Public Utilities Commission (PUC), delivering natural gas to core accounts across SoCalGas, SDG&E, and PG&E territory for over 10 years. We are also one of the largest CTAs, transporting over 8 million therms of natural gas to Southern California customers each month. We provide all commodity management services in-house, and our experienced team is in frequent and regular communication with the utility to balance customer pools, provide supply, and monitor pipeline conditions. We can act as an Energy Service Provider (ESP) so customers don’t have to worry about the reliability of physical gas supply and can potentially receive better value.

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RNG Supply and Credit Management: Work Plan
Contract Implementation
Clean Energy is one of the largest providers of RNG for vehicles in the country and work with a variety of customers who operate bus and heavy-duty vehicle fleets in all sectors. We have standardized processes to make your move to RNG as easy as possible.

Our standard schedule for implementation of an RNG supply agreement and credit management service is 30-60 days. Below outlines the typical plan we follow to start this service.
• Weeks 1-2: Execute a Base Contract for the Sale and Purchase of Natural Gas (NAESB, example provided upon request), RNG transaction confirmation, and fossil natural gas transaction confirmation between GTrans and Clean Energy. Clean Energy will update all relevant pathways and registrations with the respective verification and compliance provider for RNG delivery to the delivery point, which is GTrans’ CNG fuel station. LCFS reporting on behalf of GTrans will be designated to Clean Energy in the contract, and you will not need to report under the LCFS Reporting Tool.
• Week 3-4: Clean Energy’s biogas operations team will collect utility statements from GTrans, update all relevant fuel pathway registrations with EPA and CARB, and assume fuel reporting responsibility.
• Week 5-6: GTrans will begin receiving RNG on the first of the month upon successful registration. This process is contingent upon producers processing applications with the EPA.

Once RNG is flowing to your station there will be an initial lag in the first RIN and LCFS credit payments. Afterward, RIN payments will be made monthly and LCFS payments quarterly, in line with reporting and processing requirements from CARB and the EPA.

This depends on which contract option is selected, as described in greater detail below.

Delivering RNG into the Pipeline System
GTrans will not have to make any changes to how you are currently receiving physical natural gas from the SoCalGas pipeline, nor will there be any technical change to the fuel dispensed into your bus fuel tanks. RNG is pooled upstream at the producer level, injected into the existing natural gas infrastructure, and allocated to the your station as a dispensing point. Clean Energy will supply RNG at the price point offered in this

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proposal for the full quantity your bus fleet uses, as determined by the SoCalGas invoice with meter reading for your site.

Optional: ESP Process
If GTrans chooses during the term of our contract, Clean Energy can serve as your Energy Service Provider (ESP) by entering into a pooling contract that requires monthly balancing of your monthly natural gas consumption. Clean Energy would communicate with GTrans to accurately nominate monthly gas use, monitor natural gas usage as accurately as possible, and communicate any material usage discrepancies. Using the month-end utility bills and readings from SoCalGas, Clean Energy would check the monthly natural gas consumption and forecast future usage.

Optional: Billing Services for Natural Gas Commodity
As part of the ESP service, billing would be performed monthly, with GTrans receiving two separate bills. Clean Energy would invoice GTrans for the natural gas delivered to the meter during the delivery month, and SoCalGas would invoice you for the applicable transmission and utility charges associated with the delivery of that gas. Clean Energy proposes to bill for the monthly gas consumption, based upon monthly meter reads and nominated volumes, by the middle of each following month.

Portfolio Approach to Delivering RNG Supply
To date, Clean Energy has secured over 100 low-carbon RNG supply projects (third party offtake and investment projects) to meet the demand from our customers and station network. The size of this RNG portfolio allows us to mitigate any risk of supply interruption, which is particularly important to municipal providers of critical community services.

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Cost Proposal and Scope of Work Summary
This proposal includes two options for GTrans consideration. Option A is maintenance of your CNG fueling station equipment. Option B is RNG supply and environmental credit management and monetization. Please see below for details.

Option A: O&M Maintenance (CONFIDENTIAL)
Included with this scope:
 Proactive maintenance and inspections. Monitoring of CNG station systems including critical flow, temperature, pressure, vibrations, leaks, and alarms. This includes remote monitoring, weekly on-site inspections and changing of compressor oil and filters.
 Preventative maintenance. Specific maintenance performed in conformance with manufacturer’s recommendations, industry best practices, and Authority Having Jurisdiction (AHJ). See the sample preventative maintenance schedule included in Appendix B for reference.

 Emergency maintenance and repair callouts. Unplanned service resulting from a system shutdown or failure causing the CNG station to not be fully operational shall be provided with expected 2 hour response time when commercially possible.  Standard monthly reporting of inspections, maintenance activity and equipment status according to the format shown in Appendix C

Excluded from this scope:
 Oil for compressors. GTrans to provide oil for filling of compressor reservoirs and GTrans to dispose of used oil.
 Additional permit fees for annual operation of the fuel station. For example, a South Coast Air Quality Management District permit for a station backup generator

Term:
 One year, with option to extend by mutual agreement. Clean Energy will hold the price for up to five years if the contract includes four years of optional extensions.

Price:
 $12,917 per month fixed fee, to be invoiced monthly

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RNG Payment Schedule
Clean Energy will settle all LCFS and RIN payments based on the volume weighted average price realized for LCFS and RIN transactions. For example, all August RINs generated realize the same volume weighted average price, and all Q1 LCFS credits generated realize the same volume weighted average price.

RIN payments are made monthly after we have received payment from buyers of the RINs. For example, RNG supplied and dispensed in August generates RINs in September, with payment to GTrans approximately 60 days later.

LCFS payments are made quarterly after we have received payment from buyers of the LCFS credits. For example, Q1 RNG delivered and dispensed would be reported to the agency by the end of Q2 with LCFS credits generated and sold at the beginning of Q3.

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Appendix A - Resumes

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Appendix B - Sample Maintenance Plan
We will perform weekly, monthly, and annual inspections, preventative maintenance, and corrective repairs as necessary on your CNG fuel station equipment. The following page shows the preventative maintenance schedule for your compressors. Please note the content of this schedule changes occasionally when Ariel releases updated maintenance bulletins that amend the recommendations.

Copyright © 2006 North American Energy Standards Board, Inc. NAESB Standard 6.3.1 All Rights Reserved September 5, 2006
ID # 6552 (CE rev.

04.02.2024)
Base Contract for Sale and Purchase of Natural Gas
This Base Contract is entered into as of the following date: __________ The parties to this Base Contract are the following:

PARTY A
City of Gardena

PARTY NAME PARTY B
Clean Energy Renewable Fuels, LLC
13999 S Western Ave, Gardena, CA 90249 ADDRESS 4675 MacArthur Court, Suite 800 Newport Beach, CA 92660
www.ridegtrans.com BUSINESS WEBSITE www.cleanenergyfuels.com CONTRACT NUMBER COG001
D-U-N-S® NUMBER
X US FEDERAL: 95-6000713
OTHER:

TAX ID NUMBERS
US FEDERAL: 27-5411503
OTHER:

California

JURISDICTION OF
ORGANIZATION Delaware
Corporation
LLC
Limited Partnership
Partnership
LLP Other: Government Agency

COMPANY TYPE
Corporation LLC
Limited Partnership
Partnership
LLP
Other:

GUARANTOR
(IF APPLICABLE)

CONTACT INFORMATION
City of Gardena GTrans
ATTN: Dana Pynn
TEL#: (310) 965-8888
EMAIL: [email protected]
▪ COMMERCIAL

Clean Energy Renewable Fuels, LLC
ATTN: Jen Komonchak
TEL#: (949) 437-1251
EMAIL: [email protected]
City of Gardena GTrans
ATTN: Victor Santos
TEL#: (310) 965-8888
EMAIL: [email protected]
▪ SCHEDULING
Clean Energy Renewable Fuels, LLC
ATTN: Jen Komonchak
TEL#: (949) 437-1251
EMAIL: [email protected]
City of Gardena GTrans
ATTN: Rachel Yoo
TEL#: (310) 965-8888
EMAIL: [email protected]
▪ CONTRACT AND

LEGAL NOTICES

Clean Energy Renewable Fuels, LLC
ATTN: Jen Komonchak
TEL#: (949) 437-1251
EMAIL: [email protected]
City of Gardena GTrans
ATTN: Charles Santos
TEL#: (310)965-8839
EMAIL: [email protected]
▪ CREDIT
Clean Energy Renewable Fuels, LLC
ATTN: Jen Komonchak
TEL#: (949) 437-1251
EMAIL: [email protected]
City of Gardena GTrans
ATTN: Charles Santos
TEL#: (310)965-8839
EMAIL: [email protected]
▪ TRANSACTION

CONFIRMATIONS
Clean Energy Renewable Fuels, LLC
ATTN: Jen Komonchak
TEL#: (949) 437-1251
EMAIL: [email protected]

ACCOUNTING INFORMATION
City of Gardena GTrans
ATTN: Charles Santos
TEL#: (310)965-8839
EMAIL: [email protected]
▪ INVOICES
▪ PAYMENTS
▪ SETTLEMENTS
Clean Energy Renewable Fuels, LLC
ATTN: Jen Komonchak
TEL#: (949) 437-1251
EMAIL: [email protected]
BANK:

ABA: ACCT:

OTHER DETAILS:

WIRE TRANSFER

NUMBERS
(IF APPLICABLE)
BANK:

ABA: ACCT:

OTHER DETAILS:

BANK:

ABA: __________ ACCT: _______________
OTHER DETAILS:

ACH NUMBERS
(IF APPLICABLE)
BANK:

ABA: ACCT:

OTHER DETAILS:

ATTN:

ADDRESS:

CHECKS
(IF APPLICABLE)
ATTN: Clean Energy Renewable Fuels, LLC
ADDRESS: 4675 MacArthur Ct, Suite 800
Newport Beach, CA 92660
Docusign Envelope ID: 9779A4E5-BD07-447F-8D59-65B78EE3D6A0

Copyright © 2006 North American Energy Standards Board, Inc. NAESB Standard 6.3.1 All Rights Reserved Page 2 of 13 September 5, 2006
(CE rev. 04.02.2024)
Base Contract for Sale and Purchase of Natural Gas
(Continued)
This Base Contract incorporates by reference for all purposes the General Terms and Conditions for Sale and Purchase of Natural Gas published by the North American Energy Standards Board. The parties hereby agree to the following provisions offered in said General Terms and Conditions. In the event the parties fail to check a box, the specified default provision shall apply. Select the appropriate box(es) from each section:

Section 1.2
Transaction
Procedure

Oral (default)
OR
Written

Section 10.2
Additional
Events of
Default

No Additional Events of Default (default)

Indebtedness Cross Default

Party A: __________________

Party B: __________________

Transactional Cross Default
Specified Transactions:

___________________________________________

Section 2.7
Confirm Deadline

2 Business Days after receipt (default)
OR
5 Business Days after receipt

Section 2.8
Confirming Party

Seller (default)
OR
Buyer

Section 3.2
Performance
Obligation

Cover Standard (default)
OR
Spot Price Standard

Section 10.3.1
Early
Termination
Damages

Early Termination Damages Apply (default)

OR

Early Termination Damages Do Not Apply

Note: The following Spot Price Publication applies to both of the immediately preceding.

Section 10.3.2
Other
Agreement
Setoffs

Other Agreement Setoffs Apply (default)

Bilateral (default)

Triangular

OR

Other Agreement Setoffs Do Not Apply

Section 2.31
Spot Price
Publication

Gas Daily Midpoint (default)
OR

Section 6
Taxes

Buyer Pays At and After Delivery Point (default)
OR
Seller Pays Before and At Delivery Point

Section 7.2
Payment Date

25th Day of Month following Month of delivery
(default)
OR
Day of Month following Month of delivery

Section 15.5
Choice Of Law

California

Section 7.2
Method of Payment

Wire transfer (default)
Automated Clearinghouse Credit (ACH)
Check

Section 15.10
Confidentiality

Confidentiality applies (default)
OR
Confidentiality does not apply

Section 7.7
Netting

Netting applies (default)
OR
Netting does not apply
Special Provisions: Number of pages: 1
Addendum(s):

IN WITNESS WHEREOF, the parties hereto have executed this Base Contract in duplicate.

City of Gardena PARTY NAME Clean Energy Renewable Fuels, LLC

By:

SIGNATURE

By:

Tasha Cerda PRINTED NAME Robert M. Vreeland
Mayor TITLE Chief Financial Officer
Docusign Envelope ID: 9779A4E5-BD07-447F-8D59-65B78EE3D6A0

Copyright © 2006 North American Energy Standards Board, Inc. NAESB Standard 6.3.1 All Rights Reserved Page 3 of 13 September 5, 2006

General Terms and Conditions
Base Contract for Sale and Purchase of Natural Gas

SECTION 1. PURPOSE AND PROCEDURES

1.1. These General Terms and Conditions are intended to facilitate purchase and sale transactions of Gas on a Firm or Interruptible basis. "Buyer" refers to the party receiving Gas and "Seller" refers to the party delivering Gas. The entire agreement between the parties shall be the Contract as defined in Section 2.9.

The parties have selected either the “Oral Transaction Procedure” or the “Written Transaction Procedure” as indicated on the Base Contract.

Oral Transaction Procedure:

1.2. The parties will use the following Transaction Confirmation procedure. Any Gas purchase and sale transaction may be effectuated in an EDI transmission or telephone conversation with the offer and acceptance constituting the agreement of the parties.

The parties shall be legally bound from the time they so agree to transaction terms and may each rely thereon. Any such transaction shall be considered a “writing” and to have been “signed”. Notwithstanding the foregoing sentence, the parties agree that Confirming Party shall, and the other party may, confirm a telephonic transaction by sending the other party a Transaction Confirmation by facsimile, EDI or mutually agreeable electronic means within three Business Days of a transaction covered by this Section 1.2 (Oral Transaction Procedure) provided that the failure to send a Transaction Confirmation shall not invalidate the oral agreement o f the parties. Confirming Party adopts its confirming letterhead, or the like, as its signature on any Transaction Conf irmation as the identification and authentication of Confirming Party. If the Transaction Confirmation contains any provisions other than th ose relating to the commercial terms of the transaction (i.e., price, quantity, performance obligation, delivery po int, period of delivery and/or transportation conditions), which modify or supplement the Base Contract or General Terms and Conditions of this Contr act (e.g., arbitration or additional representations and warranties), such provisions shall not be deemed t o be accepted pursuant to Section 1.3 but must be expressly agreed to by both parties; provided that the foregoing shall not invalidate any transaction agreed to by the parties.

Written Transaction Procedure:

1.2. The parties will use the following Transaction Confirmation procedure. Should the parties come to an agreement regarding a Gas purchase and sale transaction for a particular Delivery Period, the Confirming Party shall, and the other party may, record that agreement on a Transaction Confirmation and communicate such Transaction Confirmation by facsimile, EDI or mutually agreeable electronic means, to the other party by the close of the Business Day following the date of agreement. The parties acknowled ge that their agreement will not be binding until the exchange of nonconflicting Transaction Confirmations or the passage of the Confirm Deadline without objection from the receiving party, as provided in Section 1.3.

1.3. If a sending party's Transaction Confirmation is materially different from the receiving party's understanding of the agreement referred to in Section 1.2, such receiving party shall notify the sending party via facsimile, EDI or mutually agreeable electronic means by the Confirm Deadline, unless such receiving party has previously sent a Transaction Confirmation to the sending party. The failure of the receiving party to so notify the sending party in writing by the Confirm Deadline constitutes the receiving party's agreement to the terms of the transaction described in the sending party's Transaction Confirmation. If there are any material differences between timely sent Transaction Confirmations governing the same transaction, then neither Transaction Confirmation shall be binding until or unless such differences are resolved including the use of any evidence that clearly resolves the differences in the Transaction Confirmations. In the event of a conflict among the terms of (i) a binding Transaction Confirmation pursuant to Section 1.2, (ii) the oral agreement of the parties which may be evidenced by a recorded conversation, where the parties have selected the Oral Transaction Procedure of the Base Contract, (iii) the Base Contract, and (iv) these General Terms and Conditions, the terms of the documents shall govern in the priority listed in this sentence.

1.4. The parties agree that each party may electronically record all telephone conversations with respect to this Contract between their respective employees, without any special or further notice to the other party. Each party shall obtain any necessary consent of its agents and employees to such recording. Where the parties have selected the Oral Transaction Procedure in Section 1.2 of the Base Contract, the parties agree not to contest the validity or enforceability of telephonic recordings entered into in accordance with the requirements of this Base Contract.

SECTION 2. DEFINITIONS
The terms set forth below shall have the meaning ascribed to them below. Other terms are also defined elsewhere in the Contr act and shall have the meanings ascribed to them herein.

2.1. “Additional Event of Default” shall mean Transactional Cross Default or Indebtedness Cross Default, each as and if selected by the parties pursuant to the Base Contract.

2.2. “Affiliate” shall mean, in relation to any person, any entity controlled, directly or indirectly, by the person, any entity that controls, directly or indirectly, the person or any entity directly or indirectly under common control with the person. For this purpose, “control” of any entity or person means ownership of at least 50 percent of the voting power of the entity or person.

Docusign Envelope ID: 9779A4E5-BD07-447F-8D59-65B78EE3D6A0

Copyright © 2006 North American Energy Standards Board, Inc. NAESB Standard 6.3.1 All Rights Reserved Page 4 of 13 September 5, 2006
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2.3. “Alternative Damages” shall mean such damages, expressed in dollars or dollars per MMBtu, as the parties shall agree upon in the Transaction Confirmation, in the event either Seller or Buyer fails to perform a Firm obligation to deliver Gas in the case of Seller or to receive Gas in the case of Buyer.

2.4. "Base Contract" shall mean a contract executed by the parties that incorporates these General Terms and Conditions by reference; that specifies the agreed selections of provisions contained herein; and that sets forth other information required herein and any Special Provisions and addendum(s) as identified on page one.

2.5. "British thermal unit" or "Btu" shall mean the International BTU, which is also called the Btu (IT).

2.6. "Business Day(s)" shall mean Monday through Friday, excluding Federal Banking Holidays for transactions in the U.S.

2.7. "Confirm Deadline" shall mean 5:00 p.m. in the receiving party's time zone on the second Business Day following the Day a Transaction Confirmation is received or, if applicable, on the Business Day agreed to by the parties in the Base Contract; provided, if the Transaction Confirmation is time stamped after 5:00 p.m. in the receiving party's time zone, it shall be deemed received at the opening of the next Business Day.

2.8. "Confirming Party" shall mean the party designated in the Base Contract to prepare and forward Transaction Confirmations to the other party.

2.9. "Contract" shall mean the legally -binding relationship established by (i) the Base Contract, (ii) any and all binding Transaction Confirmations and (iii) where the parties have selected the Oral Transaction Procedure in Section 1.2 of the Base Contract, any and all transactions that the parties have entered into through an EDI t ransmission or by telephone, but that have not been confirmed in a binding Transaction Confirmation, all of which shall form a single integrated agreement between the parties.

2.10. "Contract Price" shall mean the amount expressed in U.S. Dollars per MMBtu to be paid by Buyer to Seller for the purchase of Gas as agreed to by the parties in a transaction.

2.11. "Contract Quantity" shall mean the quantity of Gas to be delivered and taken as agreed to by the parties in a transaction.

2.12. "Cover Standard", as referred to in Section 3.2, shall mean that if there is an unexcused failure to take or deliver any quantity of Gas pursuant to this Contract, then the performing party shall use commercially reasonable efforts to (i) if Buyer is the performing party, obtain Gas, (or an alternate fuel if elected by Buyer and replacement Gas is not available), or (ii) if Seller is the performing party, sell Gas, in either case, at a price reasonable for the delivery or production area, as applicable, con sistent with: the amount of notice provided by the nonperforming party; the immediacy of the Buyer's Gas consumption needs or Seller's Gas sales requirements, as applicable; the quantities involved; and the anticipated length of failure by the nonperforming party.

2.13. "Credit Support Obligation(s)” shall mean any obligation(s) to provide or establish credit support for, or on behalf of, a party to this Contract such as cash, an irrevocable standby letter of credit, a margin agreement, a prepayment, a security interest in an asset, guaranty, or other good and sufficient security of a continuing nature.

2.14. "Day" shall mean a period of 24 consecutive hours, coextensive with a "day" as defined by the Receiving Transporter in a particular transaction.

2.15. "Delivery Period" shall be the period during which deliveries are to be made as agreed to by the parties in a transaction.

2.16. "Delivery Point(s)" shall mean such point(s) as are agreed to by the parties in a transaction.

2.17. "EDI" shall mean an electronic data interchange pursuant to an agreement entered into by the parties, specifically relating to the communication of Transaction Confirmations under this Contract.

2.18. "EFP" shall mean the purchase, sale or exchange of natural Gas as the "physical" side of an exchange for physical transaction involving gas futures contracts. EFP shall incorporate the meaning and remedies of "Firm", provided that a party ’s excuse for nonperformance of its obligations to deliver or receive Gas will be governed by the rules of the relevant futures exchange regulated under the Commodity Exchange Act.

2.19. "Firm" shall mean that either party may interrupt its performance without liability only to the extent that such performance is prevented for reasons of Force Majeure; provided, however, that during Force Majeure interruptions, the party invoking Force Majeure may be responsible for any Imbalance Charges as set forth in Section 4.3 related to its interruption after the nominatio n is made to the Transporter and until the change in deliveries and/or receipts is confirmed by the Transporter.

2.20. "Gas" shall mean any mixture of hydrocarbons and noncombustible gases in a gaseous state consisting primarily of methane.

2.21. “Guarantor” shall mean any entity that has provided a guaranty of the obligations of a party hereunder.

2.22. "Imbalance Charges" shall mean any fees, penalties, costs or charges (in cash or in kind) assessed by a Transporter for failure to satisfy the Transporter's balance and/or nomination requirements.

2.23. “Indebtedness Cross Default” shall mean if selected on the Base Contract by the parties with respect to a party, that it or its Guarantor, if any, experiences a default, or similar condition or event however therein defined, under one or more agreements or instruments, individually or collectively, relating to indebtedness (such indebtedness to include any obligation whether pres ent or future, contingent or otherwise, as principal or surety or otherwise) for the payment or repayment of borrowed money in an aggregate amount greater than the threshold specified in the Base Contract with respect to such party or its Guarantor, if any, which r esults in such indebtedness becoming immediately due and payable.

Docusign Envelope ID: 9779A4E5-BD07-447F-8D59-65B78EE3D6A0

Copyright © 2006 North American Energy Standards Board, Inc. NAESB Standard 6.3.1 All Rights Reserved Page 5 of 13 September 5, 2006
(CE rev. 08.01.14)

2.24. "Interruptible" shall mean that either party may interrupt its performance at any time for any reason, whether or not caused by an event of Force Majeure, with no liability, except such interrupting party may be responsible for any Imbalance Charges as set forth in Section 4.3 related to its interruption after the nomination is made to the Transporter and until the change in deliveries and/or receipts is confirmed by Transporter.

2.25. "MMBtu" shall mean one million British thermal units, which is equivalent to one dekatherm.

2.26. "Month" shall mean the period beginning on the first Day of the calendar month and ending immediately prior to the commencement of the first Day of the next calendar month.

2.27. "Payment Date" shall mean a date, as indicated on the Base Contract, on or before which payment is due Seller for Gas received by Buyer in the previous Month.

2.28. "Receiving Transporter" shall mean the Transporter receiving Gas at a Delivery Point, or absent such receiving Transporter, the Transporter delivering Gas at a Delivery Point.

2.29. "Scheduled Gas" shall mean the quantity of Gas confirmed by Transporter(s) for movement, transportation or management.

2.30. “Specified Transaction(s)” shall mean any other transaction or agreement between the parties for the purchase, sale or exchange of physical Gas, and any other transaction or agreement identified as a Specified Transaction under the Base Contract.

2.31. "Spot Price " as referred to in Section 3.2 shall mean the price listed in the publication indicated on the Base Contract, under the listing applicable to the geographic location closest in proximity to the Delivery Point(s) for the relevant Day; provide d, if there is no single price published for such location for such Day, but there is published a range of prices, then the Spot Price shall be the average of such high and low prices. If no price or range of prices is published for such Day, then the Spot Price shall be the average of the following: (i) the price (determined as stated above) for the first Day for which a price or range of prices is published that next precedes the relevant Day; and (ii) the price (determined as stated above) for the first Day for which a price or range of prices is published that next follows the relevant Day.

2.32. "Transaction Confirmation" shall mean a document, similar to the form of Exhibit A, setting forth the terms of a transaction formed pursuant to Section 1 for a particular Delivery Period.

2.33. “Transactional Cross Default” shall mean if selected on the Base Contract by the parties with respect to a party, that it shall be in default, however therein defined, under any Specified Transaction.

2.34. “Termination Option” shall mean the option of either party to terminate a transaction in the event that the other party fails to perform a Firm obligation to deliver Gas in the case of Seller or to receive Gas in the case of Buyer for a designated number of days during a period as specified on the applicable Transaction Confirmation.

2.35. "Transporter(s)" shall mean all Gas gathering or pipeline companies, or local distribution companies, acting in the capacity of a transporter, transporting Gas for Seller or Buyer upstream or downstream, respectively, of the Delivery Point pursuant to a particular transaction.

SECTION 3. PERFORMANCE OBLIGATION

3.1. Seller agrees to sell and deliver, and Buyer agrees to receive and purchase, the Contract Quantity for a particular transaction in accordance with the terms of the Contract. Sales and purchases will be on a Firm or Interruptible basis, as agreed to by the parties in a transaction.

The parties have selected either the “Cover Standard” or the “Spot Price Standard” as indicated on the Base Contract.

Cover Standard:

3.2. The sole and exclusive remedy of the parties in the event of a breach of a Firm obligation to deliver or receive Gas shall be recovery of the following: (i) in the event of a breach by Seller on any Day(s), payment by Seller to Buyer in an amount equa l to the positive difference, if any, between the purchase price paid by Buyer utilizing the Cover Standard and the Contract Price, ad justed for commercially reasonable differences in transportation costs to or from the Delivery Point(s), multiplied by the difference between the Contract Quantity and the quantity actually delivered by Seller for such Day(s) excluding any quantity for which no replacement is available; or (ii) in the event of a breach by Buyer on any Day(s), payment by Buyer to Seller in the amount equal to the positive difference, if any, between the Contract Price and the price received by Seller utilizing the Cover Standard for the resale of such Gas, adjusted for commercially reasonable differences in transportation costs to or from the Delivery Point(s), multiplied by the difference between the Contract Quantity and the quantity actually taken by Buyer for such Day(s) excluding any quantity for which no sale is available; and (iii) in the event that Buyer has used commercially reasonable efforts to replace the Gas or Seller has used commercially reasonable efforts to sell the Gas to a third party, and no such replacement or sale is available for all or any portion of the Contract Quantity of Gas, then in addition to (i) or (ii) above, as applicable, the sole and exclusive remedy of the performing party with respect to the Gas not replaced or sold shall be an amount equal to any unfavorable difference between the Contract Price and the Spot Price, adjusted for such transportation to the applicable Delivery Point, multiplied by the quantity of such Gas not replaced or sold. Imbalance Charges shall not be recovered under this Section 3.2, but Seller and/or Buyer shall be responsible for Imbalance Charges, if any, as provided in Section 4.3. The amount of such unfavorable difference shall be payable five Business Days after presentation of the performing party’s invoice, which shall set forth the basis upon which such amount was calculated.

Docusign Envelope ID: 9779A4E5-BD07-447F-8D59-65B78EE3D6A0

Copyright © 2006 North American Energy Standards Board, Inc. NAESB Standard 6.3.1 All Rights Reserved Page 6 of 13 September 5, 2006
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Spot Price Standard:

3.2. The sole and exclusive remedy of the parties in the event of a breach of a Firm obligation to deliver or receive Gas shall be recovery of the following: (i) in the event of a breach by Seller on any Day(s), payment by Seller to Buyer in an amount equa l to the difference between the Contract Quantity and the actual quantity delivered by Seller and received by Buyer for such Day(s), multiplied by the positive difference, if any, obtained by subtracting the Contract Price from the Spot Price; or (ii) in t he event of a breach by Buyer on any Day(s), payment by Buyer to Seller in an amount equal to the difference between the Contract Quantity and the actual quantity delivered by Seller and received by Buyer for such Day(s), multiplied by the positive difference, if any, obtained by subtracting the applicable Spot Price from the Contract Price. Imbalance Charges shall not be recovered under this Section 3.2, but Sell er and/or Buyer shall be responsible for Imbalance Charges, if any, as provided in Section 4.3 . The amount of such unfavorable difference shall be payable five Business Days after presentation of the performing party’s invoice, which shall set forth th e basis upon which such amount was calculated.

3.3. Notwithstanding Section 3.2, the parties may agree to Alternative Damages in a Transaction Confirmation executed in writing by both parties.

3.4. In addition to Sections 3.2 and 3.3, the parties may provide for a Termination Option in a Transaction Confirmation executed in writing by both parties. The Transaction Confirmation containing the Termination Option will designate the length of nonperformance triggering the Termination Option and the procedures for exercise thereof, how damages for nonperformance will be compensated, and how liquidation costs will be calculated.

SECTION 4. TRANSPORTATION, NOMINATIONS, AND IMBALANCES

4.1. Seller shall have the sole responsibility for transporting the Gas to the Delivery Point(s). Buyer shall have the sole responsibility for transporting the Gas from the Delivery Point(s).

4.2. The parties shall coordinate their nomination activities, giving sufficient time to meet the deadlines of the affected Transporter(s).

Each party shall give the other party timely prior Notice, sufficient to meet the requirements of all Transporter(s) involved in the transaction, of the quantities of Gas to be delivered and purchased each Day. Should either party become aware that actual deliveries at the Delivery Point(s) are greater or lesser than the Scheduled Gas, such party shall promptly notify the other party.

4.3. The parties shall use commercially reasonable efforts to avoid imposition of any Imbalance Charges. If Buyer or Seller receives an invoice from a Transporter that includes Imbalance Charges, the parties shall determine the validity as well as the cause of such Imbalance Charges. If the Imbalance Charges were incurred as a result of Buyer’s receipt of quantities of Gas greater than or less than the Scheduled Gas, then Buyer shall pay for such Imbalance Charges or reimburse Seller for such Imbalance Charges paid by Seller. If the Imbalance Charges were incurred as a result of Seller’s delivery of quantities of Gas greater than or less than the Scheduled Gas, then Seller shall pay for such Imbalance Charges or reimburse Buyer for such Imbalance Charges paid by Buyer.

SECTION 5. QUALITY AND MEASUREMENT
All Gas delivered by Seller shall meet the pressure, quality and heat content requirements of the Receiving Transporter. The unit of quantity measurement for purposes of this Contract shall be one MMBtu dry. Measurement of Gas quantities hereunder shall be in accordance with the established procedures of the Receiving Transporter.

SECTION 6. TAXES
The parties have selected either “Buyer Pays At and After Delivery Point” or “Seller Pays Before and At Delivery Point” as indicated on the Base Contract.

Buyer Pays At and After Delivery Point:

Seller shall pay or cause to be paid all taxes, fees, levies, penalties, licenses or charges imposed by any government authority (“Taxes”) on or with respect to the Gas prior to the Delivery Point(s). Buyer shall pay or cause to be paid all Taxes on or with respect to the Gas at the Delivery Point(s) and all Taxes after the Delivery Point(s). If a party is required to remit or pay Taxes that are the other party’s responsibility hereunder, the party responsible for such Taxes shall promptly reimburse the other party for such Taxes. Any party entitled to an exemption from any such Taxes or charges shall furnish the other party any necessary documentation thereof.

Seller Pays Before and At Delivery Point:

Seller shall pay or cause to be paid all taxes, fees, levies, penalties, licenses or charges imposed by any government authority (“Taxes”) on or with respect to the Gas prior to the Delivery Point(s) and all Taxes at the Delivery Point(s). Buyer shall pay or cause to be paid all Taxes on or with respect to the Gas after the Delivery Point(s). If a party is required to remit or pay Taxes that are the other party’s responsibility hereunder, the party responsible for such Taxes shall promptly reimburse the other party for such Taxes. Any party entitled to an exemption from any such Taxes or charges shall furnish the other party any necessary documentation thereof.

SECTION 7. BILLING, PAYMENT, AND AUDIT

7.1. Seller shall invoice Buyer for Gas delivered and received in the preceding Month and for any other applicable charges, providing supporting documentation acceptable in industry practice to support the amount charged. If the actual quantity delivered is not known by the billing date, billing will be prepared based on the quantity of Scheduled Gas. The invoiced quantity will then be adjusted to the actual quantity on the following Month's billing or as soon thereafter as actual delivery information is available.

Docusign Envelope ID: 9779A4E5-BD07-447F-8D59-65B78EE3D6A0

Copyright © 2006 North American Energy Standards Board, Inc. NAESB Standard 6.3.1 All Rights Reserved Page 7 of 13 September 5, 2006
(CE rev. 08.01.14)

7.2. Buyer shall remit the amount due under Section 7.1 in the manner specified in the Base Contract, in immediately available funds, on or before the later of the Payment Date or 10 Days after receipt of the invoice by Buyer; provided that if the Payment Date is not a Business Day, payment is due on the next Business Day following that date. In the event any payments are due Buyer hereunder, payment to Buyer shall be made in accordance with this Section 7.2.

7.3. In the event payments become due pursuant to Sections 3.2 or 3.3, the performing party may submit an invoice to the nonperforming party for an accelerated payment setting forth the basis upon which the invoiced amount was calculated. Paymen t from the nonperforming party will be due five Business Days after receipt of invoice.

7.4. If the invoiced party, in good faith, disputes the amount of any such invoice or any part thereof, such invoiced party will pay such amount as it concedes to be correct; provided, however, if the invoiced party disputes the amount due, it must provide supporting documentation acceptable in industry practice to support the amount paid or disputed without undue delay. In the event the parties are unable to resolve such dispute, either party may pursue any remedy available at law or in equity to enforce its rights pursuant to this Section.

7.5. If the invoiced party fails to remit the full amount payable when due, interest on the unpaid portion shall accrue from the date due until the date of payment at a rate equal to the lower of (i) the then-effective prime rate of interest published under "Money Rates" by The Wall Street Journal, plus two percent per annum; or (ii) the maximum applicable lawful interest rate.

7.6. A party shall have the right, at its own expense, upon reasonable Notice and at reasonable times, to examine and audit and to obtain copies of the relevant portion of the books, records, and telephone recordings of the other party only to the extent reasonably necessary to verify the accuracy of any statement, charge, payment, or computation made under the Contract. This right to examine, audit, and to obtain copies shall not be available with respect to proprietary information not directly relevant to transactions under this Contract. All invoices and billings shall be conclusively presumed final and accurate and all associated claims for under- or overpayments shall be deemed waived unless such invoices or billings are objected to in writing, with adequate explanation and/or documentation, within two years after the Month of Gas delivery. All retroactive adjustments under Section 7 shall be paid in full by the party owing payment within 30 Days of Notice and substantiation of such inaccuracy.

7.7. Unless the parties have elected on the Base Contract not to make this Section 7.7 applicable to this Contract, the parties shall net all undisputed amounts due and owing, and/or past due, arising under the Contract such that the party owing the greater amount shall make a single payment of the net amount to the other party in accordance with Section 7; provided tha t no payment required to be made pursuant to the terms of any Credit Support Obligation or pursuant to Section 7.3 shall be subject to netting un der this Section. If the parties have executed a separate netting agreement, the terms and conditions therein shall prevail to the ex tent inconsistent herewith.

SECTION 8. TITLE, WARRANTY, AND INDEMNITY

8.1. Unless otherwise specifically agreed, title to the Gas shall pass from Seller to Buyer at the Delivery Point(s). Seller shall have responsibility for and assume any liability with respect to the Gas prior to its delivery to Buyer at the specified Delivery Point(s).

Buyer shall have responsibility for and assume any liability with respect to said Gas after its delivery to Buyer at the Delivery Point(s).

8.2. Seller warrants that it will have the right to convey and will transfer good and merchantable title to all Gas sold hereunder and delivered by it to Buyer, free and clear of all liens, encumbrances, and claims. EXCEPT AS PROVIDED IN THIS SECTION 8.2 AND IN SECTION 15.8, ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING ANY WARRANTY OF MERCHANTABILITY OR OF FITNESS FOR ANY PARTICULAR PURPOSE, ARE DISCLAIMED.

8.3. Seller agrees to indemnify Buyer and save it harmless from all losses, liabilities or claims including reasonable attorneys' fees and costs of court ("Claims"), from any and all persons, arising from or out of claims of title, personal injury (including death) or property damage from said Gas or other charges thereon which attach before title passes to Buyer. Buyer agrees to indemnify Seller and save it harmless from all Claims, from any and all persons, arising from or out of claims regarding payment, personal injury (including death) or property damage from said Gas or other charges thereon which attach after title passes to Buyer.

8.4. The parties agree that the delivery of and the transfer of title to all Gas under this Contract shall take place within the Customs Territory of the United States (as defined in general note 2 of the Harmonized Tariff Schedule of the United States 19 U.S.C. §1202, General Notes, page 3); provided, however, that in the event Seller took title to the Gas outside the Customs Territo ry of the United States, Seller represents and warrants that it is the importer of record for all Gas entered and delivered into the United States, and shall be responsible for entry and entry summary filings as well as the payment of duties, taxes and fees, if any , and all applicable record keeping requirements.

8.5. Notwithstanding the other provisions of this Section 8, as between Seller and Buyer, Seller will be liable for all Claims to the extent that such arise from the failure of Gas delivered by Seller to meet the quality requirements of Section 5.

SECTION 9. NOTICES

9.1. All Transaction Confirmations, invoices, payment instructions, and other communications made pursuant to the Base Contract ("Notices") shall be made to the addresses specified in writing by the respective parties from time to time.

9.2. All Notices required hereunder shall be in writing and may be sent by facsimile or mutually acceptable electronic means, a nationally recognized overnight courier service, first class mail or hand delivered.

9.3. Notice shall be given when received on a Business Day by the addressee. In the absence of proof of the actual receipt date, the following presumptions will apply. Notices sent by facsimile shall be deemed to have been received upon the sendin g party's receipt of its facsimile machine's confirmation of successful transmission. If the day on which such facsimile is received is Docusign Envelope ID: 9779A4E5-BD07-447F-8D59-65B78EE3D6A0

Copyright © 2006 North American Energy Standards Board, Inc. NAESB Standard 6.3.1 All Rights Reserved Page 8 of 13 September 5, 2006
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not a Business Day or is after five p.m. on a Business Day, then such facsimile shall be deemed to have been received on the next following Business Day. Notice by overnight mail or courier shall be deemed to have been received on the next Business Day after it was sent or such earlier time as is confirmed by the receiving party. Notice via first class mail shall be considered del ivered five Business Days after mailing.

9.4. The party receiving a commercially acceptable Notice of change in payment instructions or other payment information shall not be obligated to implement such change until ten Business Days after receipt of such Notice.

SECTION 10. FINANCIAL RESPONSIBILITY

10.1. If either party (“X”) has reasonable grounds for insecurity regarding the performance of any obligation under this Contract (whether or not then due) by the other party (“Y”) (including, without limitation, the occurrence of a material change in the creditworthiness of Y or its Guarantor, if applicable), X may demand Adequate Assurance of Performance. “Adequate Assurance of Performance” shall mean sufficient security in the form, amount, for a term, and from an issuer, all as reasonably acceptable to X, including, but not limited to cash, a standby irrevocable letter of credit, a prepayment, a security interest in an asset or guaranty. Y hereby grants to X a continuing first priority security interest in, lien on, and right of setoff against all Adequate Assurance of Performance in the form of cash transferred by Y to X pursuant to this Section 10.1. Upon the return by X to Y of such Adequ ate Assurance of Performance, the security interest and lien granted hereunder on that Ad equate Assurance of Performance shall be released automatically and, to the extent possible, without any further action by either party.

10.2. In the event (each an "Event of Default") either party (the "Defaulting Party") or its Guarantor shall: (i) make an assignment or any general arrangement for the benefit of creditors; ( ii) file a petition or otherwise commence, authorize, or acquiesce in the commencement of a proceeding or case under any bankruptcy or similar law for the protection of creditors or have such petition filed or proceeding commenced against it; ( iii) otherwise become bankrupt or insolvent (however evidenced); ( iv) be unable to pay its debts as they fall due; ( v) have a receiver, provisional liquidator, conservator, custodian, trustee or other similar official appointed with respect to it or substantially all of its assets; (vi) fail to perform any obligation to the other party with respect to any Credit Supper Obligations relating to the Contract; (vii) fail to give Adequate Assurance of Performance under Section 10.1 within 48 hours but at least one Business Day of a written request by the other party; ( viii) not have paid any amount due the other party hereunder on or before the second Business Day following written Notice that such payment is due; or ix) be the affected party with respect to any Additional Event of Default; then the other party (the "Non-Defaulting Party") shall have the right, at its sole election, to immediately withhold and/or suspend deliveries or payments upon Notice and/or to terminate and liquidate the transactions under the Contr act, in the manner provided in Section 10.3, in addition to any and all other remedies available hereunder.

10.3. If an Event of Default has occurred and is continuing, the Non-Defaulting Party shall have the right, by Notice to the Defaulting Party, to designate a Day, no earlier than the Day such Notice is given and no later than 20 Days after such Notice is given, as an early termination date (the “Early Termination Date”) for the liquidation and termination pursuant to Section 10.3.1 of all transactions under the Contract, each a “Terminated Transaction”. On the Early Termination Date, all transactions will terminate, other than those transactions, if any, that may not be liquidated and terminated under applicable law (“Excluded Transactions”), which Excluded Transactions must be liquidated and terminated as soon thereafter as is legally permissible, and upon termination shall be a Terminated Transaction and be valued consistent with Section 10.3.1 below. With respect to each Excluded Transaction, its actual termination date shall be the Early Termination Date for purposes of Section 10.3.1.

The parties have selected either “Early Termination Damages Apply” or “Early Termination Damages Do Not Apply” as indicated on the Base Contract.

Early Termination Damages Apply:

10.3.1. As of the Early Termination Date, the Non -Defaulting Party shall determine, in good faith and in a commercially reasonable manner, (i) the amount owed (whether or not then due) by each party with respect to all Gas delivered and received between the parties under Terminated Transactions and Excluded Transactions on and before the Early Termination Date and all other applicable charges relating to such deliveries and receipts (including without limitation any amounts owed under Sectio n 3.2), for which paymen t has not yet been made by the party that owes such payment under this Contract and (ii) the Market Value, as defined below, of each Terminated Transaction. The Non -Defaulting Party shall (x) liquidate and accelerate each Terminated Transaction at its Market Value, so that each amount equal to the difference between such Market Value and the Contract Value, as defined below, of such Terminated Transaction(s) shall be due to the Buyer under the Terminated Transaction(s) if such Market Value exceeds the Contract Value and to the Seller if the opposite is the case; and (y) where appropriate, discount each amount then due under clause (x) above to present value in a commercially reasonable manner as of the Early Termination Date (to take account of the period b etween the date of liquidation and the date on which such amount would have otherwise been due pursuant to the relevant Terminated Transactions).

For purposes of this Section 10.3.1, “Contract Value” means the amount of Gas remaining to be delivered or purchased under a transaction multiplied by the Contract Price, and “Market Value” means the amount of Gas remaining to be delivered or purchas ed under a transaction multiplied by the market price for a similar transaction at the Delivery Point determined by the Non -Defaulting Party in a commercially reasonable manner. To ascertain the Market Value, the Non -Defaulting Party may consider, among other valuations, any or all of the settlement prices of NYMEX Gas futures contracts, quotations from leading dealers in energy swap contracts or physical gas trading markets, similar sales or purchases and any other bona fide third -party offers, all adjusted for the length of the term and differences in transportation costs. A party shall not be required to enter into a replacement transa ction(s) in order to determine the Market Value. Any extension(s) of the term of a transaction to which parties are not bound as of the Early Docusign Envelope ID: 9779A4E5-BD07-447F-8D59-65B78EE3D6A0

Copyright © 2006 North American Energy Standards Board, Inc. NAESB Standard 6.3.1 All Rights Reserved Page 9 of 13 September 5, 2006
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Termination Date (including but not limited to “evergreen provisions”) shall not be considered in determining Contract Values and Market Values. For the avoidance of doubt, any option pursuant to which one party has the right to extend the term of a transaction shall be considered in determining Contract Values and Market Values. The rate of interest used in calculating net present v alue shall be determined by the Non-Defaulting Party in a commercially reasonable manner.

Early Termination Damages Do Not Apply:

10.3.1. As of the Early Termination Date, the Non-Defaulting Party shall determine, in good faith and in a commercially reasonable manner, the amount owed (whether or not then due) by each party with respect to all Gas delivered and received between the parties under Terminated Transactions and Exclud ed Transactions on and before the Early Termination Date and all other applicable charges relating to such deliveries and receipts (including without limitation any amounts owed under Section 3.2) , for which payment has not yet been made by the party that owes such payment under this Contract.

The parties have selected either “Other Agreement Setoffs Apply” or “Other Agreement Setoffs Do Not Apply” as indicated on the Base Contract.

Other Agreement Setoffs Apply:

Bilateral Setoff Option:

10.3.2. The Non-Defaulting Party shall net or aggregate, as appropriate, any and all amounts owing between the parties under Section 10.3.1, so that all such amounts are netted or aggregated to a single liquidated amount payable by one party to the o ther (the “Net Settlement Amount”). At its sole option and without prior Notice to the Defaulting Party, the Non-Defaulting Party is hereby authorized to setoff any Net Settlement Amount against (i) any margin or other collateral held by a party in connection with any Credit Support Obligation relating to the Contract; and (ii) any amount(s) (including any excess cash margin or excess cash collate ral) owed or held by the party that is entitled to the Net Settlement Amount under any other agreement or arrangement betwee n the parties.

Triangular Setoff Option:

10.3.2. The Non-Defaulting Party shall net or aggregate, as appropriate, any and all amounts owing between the parties under Section 10.3.1, so that all such amounts are netted or aggregated to a single liquidated amount payable by one party to the o ther (the “Net Settlement Amount”). At its sole option, and without prior Notice to the Defaulting Party, the Non-Defaulting Party is hereby authorized to setoff (i) any Net Settlement Amount against any margin or other collateral held by a party in connection with any Credit Support Obligation relating to the Contract; (ii) any Net Settlement Amount against any amount(s) (including any excess cash margin or excess cash collateral) owed by or to a party under any other agreement or arrangement between the partie s; (iii) any Net Settlement Amount owed to the Non -Defaulting Party against any amount(s) (including any excess cash margin or excess cash collateral) owed by the Non-Defaulting Party or its Affiliates to the Defaulting Party under any other agreement or arrangement; (iv) any Net Settlement Amount owed to the Defaulting Party against any amount(s) (including any excess cash margin or excess cash collateral) owed by the Defaulting Party to the Non-Defaulting Party or its Affiliates under any other agreement or arrangement; and/or (v) any Net Settlement Amount owed to the Defaulting Party against any amount(s) (including any excess cash margin or excess cash collateral) owed by the Defaulting Party or its Affiliates to the Non-Defaulting Party under any other agreement or arrangement.

Other Agreement Setoffs Do Not Apply:

10.3.2. The Non-Defaulting Party shall net or aggregate, as appropriate, any and all amounts owing between the parties under Section 10.3.1, so that all such amounts are netted or aggregated to a single liquidated amount payable by one party to the other (the “Net Settlement Amount”). At its sole option and without prior Notice to the Defaulting Party, the Non -Defaulting Party may setoff any Net Settlement Amount against any margin or other collateral held by a party in connection with any Credit Support Obligation relating to the Contract.

10.3.3. If any obligation that is to be included in any netting, aggregation or setoff pursuant to Section 10.3.2 is unascertained, the Non-Defaulting Party may in good faith estimate that obligation and net, aggregate or setoff, as applicable, in respect of the estimate, subject to the Non -Defaulting Party accounting to the Defaulting Party when the obligation is ascertained. Any amount not then due which is included in any netting, aggregation or setoff pursuant to Section 10.3.2 shall be discounted to net pr esent value in a commercially reasonable manner determined by the Non-Defaulting Party.

10.4. As soon as practicable after a liquidation, Notice shall be given by the Non -Defaulting Party to the Defaulting Party of the Net Settlement Amount, and whether the Net Settlement Amount is due to or due from the Non -Defaulting Party. The Notice shall include a written statement explaining in reasonable detail the calculation of the Net Settlement Amount, provided that failure to give such Notice shall not affect the validity or enforceability of the liquidation or give rise to any claim by the Defaulting Party against the Non-Defaulting Party. The Net Settlement Amount as well as any setoffs applied against such amount pursuant to Section 10.3.2, shall be paid by the close of business on the second Business Day following such Notice, which date shall not b e earlier than the Early Termination Date. Interest on any unpaid portion of the Net Settlement Amount as adjusted by setoffs, shall accrue from the date due until the date of payment at a rate equal to the lower of (i) the then-effective prime rate of interest published under "Money Rates" by The Wall Street Journal, plus two percent per annum; or (ii) the maximum applicable lawful interest rate.

10.5. The parties agree that the transactions hereunder constitute a "forward contract" within the meaning of the United States Bankruptcy Code and that Buyer and Seller are each "forward contract merchants" within the meaning of the United States Bankruptcy Code.

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10.6. The Non-Defaulting Party's remedies under this Section 10 are the sole and exclusive remedies of the Non-Defaulting Party with respect to the occurrence of any Early Termination Date. Each party reserves to itself all other rights, setoffs, count erclaims and other defenses that it is or may be entitled to arising from the Contract.

10.7. With respect to this Section 10, if the parties have executed a separate netting agreement with close-out netting provisions, the terms and conditions therein shall prevail to the extent inconsistent herewith.

SECTION 11. FORCE MAJEURE

11.1. Except with regard to a party's obligation to make payment(s) due under Section 7, Section 10.4, and Imbalance Charges under Section 4, neither party shall be liable to the other for failure to perform a Firm obligation, to the extent such failure was caused by Force Majeure. The term "Force Majeure" as employed herein means any cause not reasonably within the control of the party claiming suspension, as further defined in Section 11.2.

11.2. Force Majeure shall include, but not be limited to, the following: (i) physical events such as acts of God, landslides, lightning, earthquakes, fires, storms or storm warnings, such as hurricanes, which result in evacuation of the affected area, floods, wa shouts, explosions, breakage or accident or necessity of repairs to mac hinery or equipment or lines of pipe; (ii) weather related events affecting an entire geographic region, such as low temperatures which cause freezing or failure of wells or lines of pi pe; (iii) interruption and/or curtailment of Firm transportation and/or storage by Transporters; (iv) acts of others such as strikes, lockouts or other industrial disturbances, riots, sabotage, insurrections or wars, or acts of terror; and (v) governmental actions such as necessity for compliance with any court order, law, statute, ordinance, regulation, or policy having the effect of law promul gated by a governmental authority having jurisdiction. Seller and Buyer shall make reasonable efforts to avoid th e adverse impacts of a Force Majeure and to resolve the event or occurrence once it has occurred in order to resume performance.

11.3. Neither party shall be entitled to the benefit of the provisions of Force Majeure to the extent performance is affected by any or all of the following circumstances: (i) the curtailment of interruptible or secondary Firm transportation unless primary, in-path, Firm transportation is also curtailed; (ii) the party claiming excuse failed to remedy the condition and to resume the performance of such covenants or obligations with reasonable dispatch; or (iii) economic hardship, to include, without limitation, Seller’s ability to sell Gas at a higher or more advantageous price than the Contract Price, Buyer’s ability to purchase Gas at a lower or more advantageous price than the Contract Price, or a regulatory agency disallowing, in whole or in part, the pass through of costs resulting from this Contract; (iv) the loss of Buyer’s market(s) or Buyer’s inability to use or resell Gas purchased hereunder, except, in either case, as provided in Section 11.2; or (v) the loss or failure of Seller’s gas supply or depletion of reserves, except, in either case, as provided in Section 11.2. The party claiming Force Majeure shall not be excused from its responsibility for Imbalance Charges.

11.4. Notwithstanding anything to the contrary herein, the parties agree that the settlement of strikes, lockouts or other industrial disturbances shall be within the sole discretion of the party experiencing such disturbance.

11.5. The party whose performance is prevented by Force Majeure must provide Notice to the other party. Initial Notice may be given orally; however, written Notice with reasonably full particulars of the event or occurrence is required as soon as reasonably possible.

Upon providing written Notice of Force Majeure to the other party, the affected party will be relieved of its obligation, from the onset of the Force Majeure event, to make or accept delivery of Gas, as applicable, to the extent and for the duration of Force Majeure, and neither party shall be deemed to have failed in such obligations to the other during such occurrence or event.

11.6. Notwithstanding Sections 11.2 and 11.3, the parties may agree to alternative Force Majeure provisions in a Transaction Confirmation executed in writing by both parties.

SECTION 12. TERM
This Contract may be terminated on 30 Day’s written Notice, but shall remain in effect until the expiration of the latest Delivery Period of any transaction(s). The rights of either party pursuant to Section 7.6, Section 10, Section 13, the obligations to make payment hereunder, and the obligation of either party to indemnify the other, pursuant hereto shall survive the termination of the Base Contract or any transaction.

SECTION 13. LIMITATIONS

FOR BREACH OF ANY PROVISION FOR WHICH AN EXPRESS REMEDY OR MEASURE OF DAMAGES IS PROVIDED, SUCH EXPRESS REMEDY OR MEASURE OF DAMAGES SHALL BE THE SOLE AND EXCLUSIVE REMEDY. A PARTY’S LIABILITY

HEREUNDER SHALL BE LIMITED AS SET FORTH IN SUCH PROVISION, AND ALL OTHER REMEDIES OR DAMAGES AT LAW OR IN EQUITY ARE WAIVED. IF NO REMEDY OR MEASURE OF DAMAGES IS EXPRESSLY PROVIDED HEREIN OR IN A TRANSACTION, A PARTY’S LIABILITY SHALL BE LIMITED TO DIRECT ACTUAL DAMAGES ONLY. SUCH DIRECT ACTUAL DAMAGES SHALL BE THE SOLE AND EXCLUSIVE REMEDY, AND ALL OTHER REMEDIES OR DAMAGES AT LAW OR IN EQUITY ARE WAIVED. UNLESS

EXPRESSLY HEREIN PROVIDED, NEITHER PARTY SHALL BE LIABLE FOR CONSEQUENTIAL, INCIDENTAL, PUNITIVE,

EXEMPLARY OR INDIRECT DAMAGES, LOST PROFITS OR OTHER BUSINESS INTERRUPTION DAMAGES, BY STATUTE, IN TORT OR CONTRACT, UNDER ANY INDEMNITY PROVISION OR O THERWISE. 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. TO THE EXTENT ANY DAMAGES REQUIRED TO BE PAID HEREUNDER ARE

LIQUIDATED, THE PARTIES ACKNOWLEDGE THAT THE DAMAGES ARE DIFFICULT OR IMPOSSIBLE TO DETERMINE, OR

OTHERWISE OBTAINING AN ADEQUATE REMEDY IS INCONVENIENT AND THE DAMAGES CALCULATED HEREUNDER CONSTITUTE A REASONABLE APPROXIMATION OF THE HARM OR LOSS.

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SECTION 14. MARKET DISRUPTION
If a Market Disruption Event has occurred then the parties shall negotiate in good faith to agree on a replacement price for the Floating Price (or on a method for determining a replacement price for the Floating Price) for the affected Day, and if the parties have not so agreed on or before the second Business Day following the affected Day then the replacement price for the Floating Pri ce shall be determined within the next two following Business Days with each party obtaining, in good faith and from non -affiliated market participants in the relevant market, two quotes for prices of Gas for the affected Day of a similar quality and quanti ty in the geographical location closest in proximity to the Delivery Point and averaging the four quotes. If either par ty fails to provide two quotes then the average of the other party’s two quotes shall determine the replacement price for the Floating Price. "Float ing Price" means the price or a factor of the price agreed to in the transaction as being based upon a specified index. "Market Disruption Event" means, with respect to an index specified for a transaction, any of the following events: (a) the failure of the index to announce or publish information necessary for determining the Floating Price; (b) the failure of trading to commence or the permanent discontinuation or material suspension of trading on the exchange or market acting as the index; (c) the temporary or permane nt discontinuance or unavailability of the index; (d) the temporary or permanent closing of any exchange acting as the index; or (e) both parties agree that a material change in the formula for or the method of determining the Floating Price has occurred. For the purposes of the calculation of a replacement price for the Floating Price, all numb ers shall be rounded to three decimal places. If the fourth decimal number is five or greater, then the third decimal number shall be increased by one and if the fourth decimal number is less than five, then the third decimal number shall remain unchang ed.

SECTION 15. MISCELLANEOUS

15.1. This Contract shall be binding upon and inure to the benefit of the successors, assigns, personal representatives, and heirs of the respective parties hereto, and the covenants, conditions, rights and obligations of this Contract shall run for the full term of this Contract.

No assignment of this Contract, in whole or in part, will be made without the prior written consent of the non-assigning party (and shall not relieve the assigning party from liability hereunder), which consent will not be unreasonably withheld or delayed; provided, either party may (i) transfer, sell, pledge, encumber, or assign this Contract or the accounts, revenues, or proceeds hereof in connection with any financing or other financial arrangements, or (ii) transfer its interest to any parent or Affiliate by assignment, merger or otherwise without the prior approval of the other party. Upon any such assignment, transfer and assumption, the transferor shall remain principally liable for and shall not be relieved of or discharged from any obligations hereunder.

15.2. If any provision in this Contract is determined to be invalid, void or unenforceable by any court having jurisdiction, such determination shall not invalidate, void, or make unenforceable any other provision, agreement or covenant of this Contract.

15.3. No waiver of any breach of this Contract shall be held to be a waiver of any other or subsequent breach.

15.4. This Contract sets forth all understandings between the parties respecting each transaction subject hereto, and any prior contracts, understandings and representations, whether oral or written, relating to such transactions are merged into and superseded by this Contract and any effective transaction(s). This Contract may be amended only by a writing executed by both parties.

15.5. The interpretation and performance of this Contract shall be governed by the laws of the jurisdiction as indicated on the Base Contract, excluding, however, any conflict of laws rule which would apply the law of another jurisdiction.

15.6. This Contract and all provisions herein will be subject to all applicable and valid statutes, rules, orders and regulations of any governmental authority having jurisdiction over the parties, their facilities, or Gas supply, this Contract or transaction or any provisions thereof.

15.7. There is no third party beneficiary to this Contract.

15.8. Each party to this Contract represents and warrants that it has full and complete authority to enter into and perform this Contract.

Each person who executes this Contract on behalf of either party represents and warrants that it has full and complete authority to do so and that such party will be bound thereby.

15.9. The headings and subheadings contained in this Contract are used solely for convenience and do not constitute a part of this Contract between the parties and shall not be used to construe or interpret the provisions of this Contract.

15.10. Unless the parties have elected on the Base Contract not to make this Section 15.10 applicable to this Contract, neither party shall disclose directly or indirectly without the prior written consent of the other party the terms of any transaction to a third party (other than the employees, lenders, royalty owners, counsel, accountants and other agents of the party, or prospective purchasers of all or substantially all of a party’s assets or of any rights under this Contract, provided such persons shall have agreed to keep such terms confidential) except (i) in order to comply with any applicable law, order, regulation, or exchange rule, (ii) to the extent necessary for the enforcement of this Contract , (iii) to the extent necessary to implement any transaction, (iv) to the extent necessary to comply with a regulatory agency’s reporting requirements including but not limited to gas cost recovery proceedings; or (v) to the extent such information is delivered to such third party for the sole purpose of calculating a published index. Each party shall notify the other party of any proceeding of which it is aware which may result in disclosure of the terms of any transaction (other than as permitted hereunder) and use reasonable efforts to prevent or limit the disclosure. The existence of this Contract is not subject to this confidentiality obligation. Subject to Section 13, 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.

The terms of any transaction hereunder shall be kept confidential by the parties hereto for one year from the expiration of the transaction.

In the event that disclosure is required by a governmental body or applicable law, the party subject to such requirement may disclose the material terms of this Contract to the extent so required, but shall promptly notify the other party, prior to disclos ure, and shall Docusign Envelope ID: 9779A4E5-BD07-447F-8D59-65B78EE3D6A0

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cooperate (consistent with the disclosing party’s legal obligations) with the other party’s efforts to obtain protective orde rs or similar restraints with respect to such disclosure at the expense of the other party.

15.11. The parties may agree to dispute resolution procedures in Special Provisions attached to the Base Contract or in a Transaction Confirmation executed in writing by both parties

15.12. Any original executed Base Contract, Transaction Confirmation or other related document may be digitally copied, photocopied, or stored on computer tapes and disks (the “Imaged Agreement”). The Imaged Agreement, if introduced as evidence on paper, the Transaction Confirmation, if introduced as evidence in automated facsimile form, the recording, if introduced a s evidence in its original form, and all computer records of the foregoing, if introduced as evidence in printed format, in any judicial, arbitration, mediation or administrative proceedings will be admissible as between the parties to the same extent and under the same conditions as other business records originated and maintained in documentary form. Neither Party shall object to the admissi bility of the recording, the Transaction Confirmation, or the Imaged Agreement on the basis that such were not originated or maintained in documentary form. However, nothing herein shall be construed as a waiver of any other objection to the admissibility of such evidence.

DISCLAIMER: The purposes of this Contract are to facilitate trade, avoid misunderstandings and make more definite the terms of contracts of purchase and sale of natural gas. Further, NAESB does not mandate the use of this Contract by any party. NAESB DISCLAIMS AND EXCLUDES, AND ANY USER OF

THIS CONTRACT ACKNOWLEDGES AND AGREES TO NAESB'S DISCLAIMER OF, ANY AND ALL WARRANTIES, CONDITIONS OR

REPRESENTATIONS, EXPRESS OR IMPLIED, ORAL OR WRITTEN, WITH RESPECT TO THIS CONTRACT OR ANY PART THEREOF, INCLUDING

ANY AND ALL IMPLIED WARRANTIES OR CONDITIONS OF TITLE, NON-INFRINGEMENT, MERCHANTABILITY, OR FITNESS OR SUITABILITY FOR

ANY PARTICULAR PURPOSE (WHETHER OR NOT NAESB KNOWS, HAS REASON TO KNOW, HAS BEEN ADVISED, OR IS OTHERWISE IN FACT

AWARE OF ANY SUCH PURPOSE), WHETHER ALLEGED TO ARISE BY LAW, BY REASON OF CUSTOM OR USAGE IN THE TRADE, OR BY COURSE OF DEALING. EACH USER OF THIS CONTRACT ALSO AGREES THAT UNDER NO CIRCUMSTANCES WILL NAESB BE LIABLE FOR ANY DIRECT, SPECIAL, INCIDENTAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES ARISING OUT OF ANY USE OF THIS CONTRACT.

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TRANSACTION CONFIRMATION EXHIBIT A

FOR IMMEDIATE DELIVERY

Letterhead/Logo

Date: ____________________________, _____
Transaction Confirmation #: _______________

This Transaction Confirmation is subject to the Base Contract between Seller and Buyer dated ______________________.

The terms of this Transaction Confirmation are binding unless disputed in writing within 2 Business Days of receipt unless otherwise specified in the Base Contract.

SELLER:
_______________________________________________
_______________________________________________
_______________________________________________
Attn: ___________________________________________
Phone: _________________________________________
Fax: ___________________________________________
Base Contract No. ________________________________
Transporter: _____________________________________
Transporter Contract Number: _______________________

BUYER:
_______________________________________________
_______________________________________________
_______________________________________________
Attn: ___________________________________________
Phone: _________________________________________
Fax: ___________________________________________
Base Contract No. ________________________________
Transporter: _____________________________________
Transporter Contract Number: _______________________

Contract Price: $ /MMBtu or ______________________________________________________________________

Delivery Period: Begin: , ___ End: , ___

Performance Obligation and Contract Quantity: (Select One)

Firm (Fixed Quantity): Firm (Variable Quantity): Interruptible:

MMBtus/day MMBtus/day Minimum Up to MMBtus/day

EFP MMBtus/day Maximum
subject to Section 4.2. at election of
Buyer or
Seller

Delivery Point(s): ________________________
(If a pooling point is used, list a specific geographic and pipeline location):

Special Conditions:

Seller: __________________________________________

By: ____________________________________________

Title: ___________________________________________

Date: __________________________________________

Buyer: __________________________________________

By: ____________________________________________

Title: ___________________________________________

Date: __________________________________________

Docusign Envelope ID: 9779A4E5-BD07-447F-8D59-65B78EE3D6A0