O&M Agreement
-----------------------------------------
For
City of Laguna Beach
For
Solar PV Project
By
Staten Solar Corporation
-----------------------------------------
119
119 of 843
_________________________ GENERATION PROJECT
OPERATION AND MAINTENANCE AGREEMENT
This OPERATION AND MAINTENANCE AGREEMENT ("Agreement") is made and entered into as of ______________, 2025 by and between the City of Laguna Beach, located at 505 Forest Avenue, Laguna Beach, CA 92651 ("Owner"), and Staten Solar, located at 175 Nortech Pkwy, San Jose, CA 95134 ("Contractor").
RECITALS
WHEREAS, Owner owns two separate solar facilities: (i) Fire Station 2 – 24.20 kW-DC PV; and (ii) Fire Station 3 – 10.45 kW-DC PV (together, the “Project”), and desires to contract for operation, maintenance and management of the Project,
WHEREAS, Contractor provides operation, maintenance and management services for Solar PV generation facilities and has agreed to provide those services for the Project on the terms and conditions set forth in this Agreement,
NOW THEREFORE, in consideration of the mutual covenants, undertakings and conditions set forth below, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows:
ARTICLE 1
AGREEMENT
Section 1.1 - Agreement. This Agreement consists of the terms and conditions set forth in the sections captioned by numbered article designations (“Articles”) and the following appendices, which are incorporated and made part this Agreement by this reference and are included in any reference to this Agreement.
Appendix A - Scope of Services
Appendix B – Calculation of Performance Guarantee
If the terms and conditions of the Articles of this Agreement vary or are inconsistent with any portion of the Appendices, the terms of the Articles this Agreement shall control and be given priority, and the provisions of the Appendices shall be subject to the terms of the Articles. This Agreement contains the entire agreement between the parties and supersedes all prior agreements, whether oral or written, between the parties with respect to the subject matter of this Agreement. Neither Party will be bound by or be deemed to have made any representations, warranties, commitments or other undertakings with respect to the subject matter of this Agreement that are not contained in this Agreement.
Section 1.2 - Effective Date and Term. This Agreement shall be effective and shall govern the rights and obligations of the parties from the date of Permission to Operate (PTO) for a period of ten (10) years, with an option to extend the Contract for up to an additional ten (10) years. The Owner reserves the right to not execute the Operations and Maintenance services agreement.
Section 1.3 - Relationship of The Parties. Contractor has been retained by Owner as an independent contractor to operate, maintain and manage the Project on behalf of Owner, in accordance with Prudent Utility Practice and the requirements of the Project Agreements. Owner has delegated to Contractor overall responsibility for operating, maintaining and managing the Project to ensure that the Project is available to produce electric energy for sale or use by Owner and meets all requirements under the Project Agreements. Neither Contractor nor any of its employees, subcontractors or agents shall be deemed to have any other status, except that Contractor is the agent 120
120 of 843
of Owner to the limited extent that this Agreement expressly grants Contractor the authority to act on behalf of Owner.
ARTICLE 2
DEFINITIONS
Section 2.1 - Definitions. Unless otherwise required by the context in which a defined term appears, the following terms shall have the meanings specified in this Article 2. Terms that are defined in other Articles shall have the meanings given to them in those Articles. "Annual Operating Fee" means an annual operating fee paid to Contractor during each Contract Year as set forth in Section 5.2.
"Bankruptcy" means a situation in which (i) a Party’s actions under applicable debtor relief laws demonstrate an inability to pay its debts as they mature or a need for protection from its creditors; (ii) a court of competent jurisdiction approves a petition filed against a Party, which petition sought relief for the Party’s creditors, and the action of the court remains in effect for an aggregated period of 60 days (whether or not consecutive); (iii) a Party admits in writing its inability to pay its debts as they mature; (iv) a Party gives notice to any person or entity of its current (or pending) insolvency or suspension of operations; or (v) a Party makes an assignment for the benefit of creditors or takes other similar action for the protection or benefit of its creditors. "Business Day" means any day other than a Saturday, Sunday or other day on which commercial banks are authorized or required to close in the USA.
"Contract Year" means each year of the ten-year period from the date of Permission to Operate (PTO); and subsequent optional ten-year periods thereafter.
"Force Majeure Event" means an event, condition or circumstance beyond the reasonable control of, and not due to the fault or negligence of, the Party affected, and which could not have been avoided by due diligence and use of reasonable efforts, which prevents the performance by such affected Party of its obligations hereunder; provided, that a "Force Majeure Event" shall not be deemed to have occurred or to be continuing unless the Party claiming Force Majeure complies with the requirements of Section 15.3 (Force Majeure). Subject to the foregoing, "Force Majeure Event" shall include, as to either Party, explosion and fire (in either case to the extent not attributable to the negligence of the affected Party), flood, earthquake, storm or other natural calamity or act of God, strike or other labor dispute, war, insurrection or riot, actions or failures to act by governmental entities or officials, failure to obtain governmental permits or approvals (despite timely application therefor and due diligence) and changes in laws, rules, regulations, orders or ordinances affecting operation of the Project, Pandemic, which events were not pending on the date of this Agreement. "Operating Manuals" means the operating data, design drawings, specifications, vendors' manuals, warranty requirements, procedures (including those for maintenance of the Project and environmental and safety compliance), and similar materials with respect to the Project. “Not to Exceed Limit” means the discretionary spending limit Owner grants to Contractor for costs related to repairing or replacing Project components and servicing the Project. For this Agreement this limit shall be $5,000.
"Procedures Manual" has the meaning set forth in Section 5.1. "Project" means the two separate solar facilities: (i) Fire Station 2 – 24.20 kW-DC PV; and (ii) Fire Station 3 – 10.45 kW-DC PV (together, the “Project”) and related assets, together with other facilities and related assets.
"Reference Rate" means the rate published in the Money Rates table of The Wall Street Journal, from time to time, as the "prime rate", plus 1%.
121
121 of 843
ARTICLE 3
SERVICES
Section 3.1 - Scope of Services. Contractor shall (i) maintain and manage the Project on behalf of Owner (“Services”) and (ii) also perform the specific duties set forth in this Agreement if they are not otherwise required by the standards defined in Section 3.2.
Section 3.2 - Standards for Performance of the Services. Contractorshall perform the Services required under this Agreement, including those set forth in Appendix A, in a prudent, reasonable, and efficient manner and in accordance with (i) Operating Manuals, the Administrative Procedures Manual and applicable vendor warranties, (ii) all applicable Laws, (iii) Prudent Utility Practices, (iv) the Project Agreements, (v) the requirements of any System Contractor, and (vi) all insurance policies specified in Article 9 of this Agreement. Contractor shall use all reasonable efforts to optimize the useful life of the Project and to minimize Reimbursable Costs and Project outages or other unavailability.
Section 3.3 - Contractor's Personnel Standards. Contractor shall provide as reasonably necessary all labor and professional, supervisory and managerial personnel as are required to perform the Services. Such personnel shall be qualified to perform the duties to which they are assigned. With respect to labor matters, hiring personnel, and employment policies, Contractor shall comply with all applicable Laws.
Section 3.4 - Compliance. Contractor shall comply with all Laws applicable to the operation, maintenance and management of the Project and the performance of the Services. Contractor shall apply for and obtain, and Owner shall assist Contractor in applying for and obtaining, all necessary permits, licenses and approvals (and renewals of the same) required to allow Contractor to do business or perform the Services in the jurisdictions where the Services are to be performed.
Section 3.5 - No Liens or Encumbrances. Contractor shall maintain the Project free and clear of all liens and encumbrances resulting from any action of Contractor or work done at the request of Contractor, except for such liens or encumbrances that result directly from nonpayment by Owner of amounts due and owing to Contractor under this Agreement.
Section 3.6 - Emergency Action. If an emergency endangering the safety or protection of persons, the Project, or property located near the Project occurs, Contractor shall promptly notify Owner and take all necessary action to attempt to prevent or mitigate any such threatened damage, injury or loss. Contractor shall make reasonable efforts to minimize any cost associated with remedial action in case of such an emergency.
Section 3.7 - Action in Extraordinary Circumstances. In the event that:
(A) the Project or major Project equipment suffers an unplanned outage (or Contractor reasonably believes that such an occurrence is imminent), and (B) Contractor has made reasonable, but unsuccessful, efforts to notify and communicate with Owner regarding such occurrence or imminent occurrence in accordance with the terms of this Agreement, then Contractor shall:
(i) take all necessary action to prevent or to mitigate such unplanned outage, (ii) make reasonable efforts to minimize any cost associated with such remedial action, (iii) continue to attempt to notify and communicate with Owner regarding the occurrence and the remedial action, and
(iv) shall not expend for such purposes more than an aggregate of three thousand dollars ($3000) in any Contract Year.
Section 3.8 – Generation Guarantee. Contractor guarantees that the Project will generate at least 90% of the projected annual energy output as defined in the Project Agreements. If the generation falls below this threshold, Contractor shall take corrective actions at its own expense to restore performance levels, subject to the limitations outlined in Article 11. 122
122 of 843
(A) Calculation of Generation Guarantee: The generation guarantee shall be calculated based on the actual energy output recorded by the Data Acquisition System (DAS) compared to the projected annual energy output specified in the Project Agreements. Adjustments for Force Majeure Events, grid outages, or other external factors beyond Contractor's control shall be accounted for in the calculation. Detail calculation methodology is as per Appendix-B.
ARTICLE 4
OWNER RESPONSIBILITIES
Section 4.1 - Information. Owner shall provide Contractor with all vendor manuals, spare parts lists, Project data books and drawings which are provided to Owner pursuant to any Project Agreement or by any contractor responsible for construction, installation, repair or maintenance of the Project or a part thereof. Subject to the standards of performance set forth in Section 3.2.
Contractor shall be entitled to rely upon such information in performance of the Services. Owner shall also provide Contractor with copies of all Project Agreements and any amendments thereto and any other documents that define the Project's operating requirements.
ARTICLE 5
COMPENSATION AND PAYMENT
Section 5.1 - Payments. As compensation to Contractor for performance of the Services hereunder, Owner shall pay Contractor a) the Annual Operating Fee as indicated in Section 5.2 and Appendix A-1, Section (a) and b) applicable Per Incident Fees as indicated in Appendix A-2.
Section 5.2 Annual Operating Fee. For the first Contract Year and each subsequent Contract Year, Owner shall pay to Contractor the sum of $2,500 (the "Annual Operating Fee"). The Annual Operating Fee shall increase by 2.5% per year, starting from the second Contract Year to account for inflation and increased operational costs.
Section 5.3 - Reserved.
Section 5.4 - Billing and Payment.
(a) Yearly Amount:
The Annual Operating Fee shall be paid in advance on the 1st day of each Contract Year. (b) Reimbursable Expenses:
(a) Within 15 days following the end of each month, Contractor shall submit the receipts and disbursements showing Reimbursable Costs for such month in accordance with Subsection 3.7(B)(iv). Within 15 days after receipt of any such invoice, Owner shall Pay Contractor the sum specified in such invoice, less (i) any amounts previously deposited with Contractor relating to such invoice, and (ii) any portion of such invoice amount that Owner disputes in good faith or is permitted to offset under this Agreement; and (b) With respect to any disputed portion of such invoice, provide Contractor with a written statement explaining, in reasonable detail, the basis for such dispute. The parties shall attempt to resolve any such disputed portion in accordance with Article 14.
Section 5.5 - Interest. Any amount owed to either Party under this Agreement by the other Party which remains unpaid more than 30 days after the date such amount is due and payable shall begin to accrue interest at the Reference Rate commencing on the thirty-first day after such due date. 123
123 of 843
ARTICLE 6
PROCEDURES, PLANS AND REPORTING
Section 6.1 - Procedures Manual. The parties have approved a procedures manual that includes procedures for (i) reporting and correspondence pursuant to this Agreement, (ii) procurement and contracting, and (iii) accounting, bookkeeping and record-keeping ("Procedures Manual"). The Procedures Manual shall govern the covered activities of Contractor for the term of this Agreement, subject to such revision and amendment as agreed in writing by Owner and Contractor.
Section 6.2 - Operating Data and Records. Contractor shall monitor and record all operating data and information that (i) Owner must report to any person or entity under any Project Agreement, (ii) Owner must report to any government agency or other person or entity under applicable Laws and (iii) Owner reasonably requests within 15 Business Days following a request by Owner.
Section 6.3 - Accounts and Reports. Contractor shall cooperate with Owner in complying with reporting requirements set forth in the Project Agreements and shall, during the term of this Agreement, furnish or cause to be furnished to Owner reports concerning the Project operations and the Services:
(a) Quarterly Reports. Within ten (10) Business Days following the last day of each calendar quarter, Contractor shall submit: (i) a progress report, covering all activities during such quarter with respect to operations and maintenance, a listing of any significant operating problems along with immediately planned remedial actions, and a brief summary of any major activities planned for the next reporting period, and (ii) a statement setting forth all Reimbursable Costs paid or incurred in such quarter, which statement shall itemize, in detail acceptable to Owner, the computation of such Reimbursable Costs.
(b) Annual Reports. As soon as available, and in any event within 60 days after the end of each Contract Year, Contractorshall submit an annual report describing, in detail substantially similar to that contained in the quarterly reports referred to in Section 6.4(a), the Project activities and operating data for such Contract Year.
(d) Other Information. Contractor shall promptly submit to Owner any material information concerning new or significant aspects of the Project's activities and, upon Owner's request, shall promptly submit any other information concerning the Project or the Services.
ARTICLE 7
TERM AND TERMINATION
Section 7.1 - Term. The term of this Agreement is ten (10) years and shall begin on the Permission to Operate (PTO) date. Upon agreement of Owner and Contractor, this Agreement may be extended for another ten (10) years. This Agreement is subject to earlier termination pursuant to Sections 7.2, 7.3, 7.4 or 7.5.
Section 7.2 - Termination Upon Notice By Owner. Subject to the terms of any Project Agreements, Owner may terminate this Agreement upon 10 days prior written notice to Contractor in the event (i) that Contractor violates, or consents to a violation of, any Laws applicable to the Services or the Project, where the violation has or may have a material adverse effect on the maintenance or operation of the Project or Owner's interest, and Contractor does not cure such violation within 30 days (or, if not curable within 30 days, within such period of time as is reasonably necessary, but in no event more than 90 days, provided Contractor diligently commences and pursues such cure and indemnifies Owner for all related costs, of whatever kind), or (ii) of a material breach by Contractor in the performance of the Services, if Contractor does not cure such breach within 30 days from the date of Contractor’s receipt of notice from Owner demanding cure (or, if not curable within 30 days, within such period of time as is reasonably necessary, but in no event more than 90 days, provided Contractor diligently commences and pursues such cure and indemnifies Owner for all related costs, of whatever 124
124 of 843
kind). If the Agreement is terminated by Owner pursuant to this Section 7.2, Contractor shall be compensated for all Reimbursable Costs incurred by Contractor and all unpaid Annual Operating Fees to and including the date of termination.
Section 7.3 - Termination By Owner Without Cause. In addition to its rights set forth in this Agreement, Owner reserves the right to terminate this Agreement without cause upon 90 days written notice to Contractor. If the Agreement is terminated by Owner pursuant to this Section 7.3, Contractor shall be compensated for all Reimbursable Costs incurred by Contractor and all unpaid Annual Operating Fees to the end of the Contract Year. Such payments shall be Contractor's sole remedy in respect of such termination and shall be made by Owner within 30 days of receipt of a final invoice from Contractor.
Section 7.4 - Termination By Contractor. Subject to the terms of any Project Agreements, Contractor may terminate this Agreement for cause upon 15 days prior written notice to Owner in the event of: (i) Owner's Bankruptcy; or (ii) Owner's failure to perform in a timely manner any of its material obligations under this Agreement and such failure is not cured within 30 days of Owner's receipt of a notice from Contractor demanding cure (or, if not curable within 30 days, within such period of time as is reasonably necessary, but in no event more than 90 days, provided that Owner diligently commences and continues to pursue such cure). Owner shall be entitled to terminate this Agreement upon ten (10) business days prior written notice to Contractor if any Force Majeure Event affecting either Party’s ability to perform has been in existence for a period of forty-five (45) consecutive days or longer. In such event, Contractor shall be paid for Services performed up to the point at which the Force Majeure Event started which payment may include reasonable payment incurred to comply with System Owner’s directions in connection with the termination and reasonable costs of Contractor demobilization
Section 7.5 - Project Condition At End Of Term. Upon expiration or termination of this Agreement, Contractor shall remove its personnel from the Project. Contractor shall leave the Project in as good condition as it was on the Effective Date, normal wear and tear and casualty excepted.
Contractor shall be paid all unpaid Reimbursable Costs. All special tools, improvements, inventory of supplies, spare parts, safety equipment, Operating Manuals and Procedures Manuals, operating logs, records and documents maintained by Contractor pursuant to Section 3.5 and any other items furnished on a Reimbursable Cost basis under this Agreement will be left at the Project and will become or remain the property of Owner without additional charge. Owner shall also have the right, in its sole discretion, to assume and become liable for any contracts or obligations that Contractor may have undertaken with third parties in connection with the Services. Contractor shall cooperate in taking all reasonable steps requested by Owner required to affect the assumption of the contracts, provided that Owner agrees to indemnify and hold harmless Contractor for all liabilities arising out of events and obligations arising from the assumption of contract rights and obligations after the date of any such assumption. Contractor shall use commercially reasonable efforts to cooperate with Owner or a succeeding Contractor to assure that the operation, maintenance and management of the Project are not disrupted.
ARTICLE 8
BLANK (RESERVED)
125
125 of 843
ARTICLE 9
INSURANCE
Section 9.1 - Coverage.
(a) Obligation to Obtain. Owner and Contractor shall obtain and maintain the insurance set forth in Sections 9.1(b) and 9.1(c). Such insurance may be maintained under individual or blanket insurance policies.
(b) Contractor Coverage. Contractor shall maintain during the term of this Agreement the insurance described below with limits and coverage provisions not less than the limits and coverage provisions set forth below:
(i) Workers’ Compensation/Employers’ Liability. Limits as follows:
• Workers' Compensation – Statutory Coverage.
• Employers' Liability – Bodily Injury by accident $1,000,000 each accident • Bodily Injury by disease $1,000,000 each employee
• Bodily Injury by disease $1,000,000 policy limit
(ii) Commercial General Liability including Contractual Liability insurance with limits of:
• $1,000,000 per occurrence for Bodily Injury and Property Damage • $2,000,000 General Aggregate - other than Products/Completed Operations • $2,000,000 Products/Completed Operations Aggregate
• $1,000,000 Personal & Advertising Injury
• $1,000,000 Fire Damage Coverage to be written on an "Occurrence" form per location basis, without endorsements that limit the policy terms with respect to: (1) the definition of an Insured Contract, (2) provisions for severability of interest, (3) explosion, collapse, underground hazard. (iii) Auto Liability insurance for owned (if any), hired, leased, and non-owned vehicles with limits of $1,000,000 combined single limit per occurrence for bodily injury and property damage per accident. To the extent the Work involves hauling any Hazardous materials, coverage shall be endorsed in accordance with Section 30 of the Motor Carrier Act of 1980 (Category 2) of the CA 99-48 endorsement. Coverage shall also contain appropriate no-fault insurance provisions or other endorsements in accordance with applicable State Law.
(iv) Umbrella or Excess Liability Insurance on an "occurrence" basis covering claims in excess of the underlying insurance described in Sections (i), (ii), and (iii) above in the amount of $5,000,000 per occurrence, and on a following-form basis. Note the liability limits may be met with any combination of primary, excess or umbrella insurance policies. Coverage to be written on an Occurrence form per location aggregate limit. Coverage terms and limits to apply excess of the primary per occurrence and/or aggregate limits provided for in the Commercial General Liability, Auto Liability and Professional Liability policies. Coverage terms and limits to also apply in excess of those required for Employers Liability and may be met with any combination of primary, excess or umbrella insurance policies.
(v) Professional Liability Insurance (errors and omissions) on a claims-made basis with limits of $1,000,000.00 for liability arising out of any negligent act, error, mistake or omission resulting from Contractor's management, design, engineering, procurement, construction, installation, commissioning, start-up and testing services, and such coverage shall remain in effect for not less than four years following completion of construction of the System. (vi) All equipment, supplies and materials belonging to Contractor or to any of the Subcontractors or used by or on behalf of Contractor or Subcontractors for its performance under this Agreement which is not intended to become a permanent part of the completed Work shall be brought to and kept at the applicable Site at the sole cost, risk and expense of Contractor or the applicable Subcontractor, and owner shall not be liable for loss or damage thereto. Should such property be insured, said insurers shall waive rights of subrogation against Owner and Owner's Investors or Financing Parties.
126
126 of 843
(vii) If required by Owner, pollution liability coverage with a limit of not less than $1,000,000 per occurrence. Such insurance shall include coverage for bodily injury and property damage, including clean-up costs and defense costs, resulting from sudden, accidental pollution conditions, including the discharge, dispersal, release or escape of smoke, vapors, soot, fumes, acids, alkalis, toxic chemicals, hydrocarbons, liquids or gases, waste materials or other irritants, contaminants or pollutants into or upon land, the atmosphere or any water course or body of water. (vii) Policy Endorsements.
(a) The Parties shall, in all policies of insurance related to the Project maintained by each, include clauses providing that each underwriter shall release, assign to the other Party, and its successors and assigns and waive all of its rights of recovery, under subrogation or otherwise, against the other Party, and each of their parent companies, Affiliates, subsidiaries, employees, successors, permitted assigns, insurers and underwriters, as well as against its officers, directors, employees, agents and representatives of each of them.
(b) The insurance provided for Commercial General Liability, Employer's Auto Liability and Excess Liability shall:
(c) include Owner and Owner's Financing parties as an additional insured with respect to Work performed under this Contract, and
(d) provide that the insurance is primary coverage with respect to all insureds and shall not be considered contributory insurance with any insurance or selfinsurance maintained by the Owner. (e) with respect to workers' compensation/employer's liability insurance, to provide that the insurer shall waive for the benefit of Owner and where permitted by law, all rights of subrogation against Owner, its subsidiaries and Affiliates, coventurers, or their directors, officers, members, managers, as well as their respective employees and/or agents or each.
(f) with respect to general liability, automobile liability and excess/umbrella insurance, to provide that such insurance shall waive any and all rights of subrogation or recovery with the insurer may have or acquire against owner, its subsidiaries and Affiliates, co-venturers, Owner's Indemnified Parties, or their directors, officers, members, managers, as well as the employees and/or agents of each.
(g) to provide a severability of interest and cross liability clause.
It is expressly agreed and understood that:
1) The cost of premiums and deductibles for insurance required to be maintained by Contractor as set forth in this Agreement and all Taxes thereon shall be borne by Contractor, and shall be endorsed to provide that Owner shall have no liability for the payment of any premium thereon; and 2) The insurance coverages required of Contractor set forth in this Agreement shall in no way affect, nor are the intended as a limitation of, Contractor's liability with respect to its performance of the Work.
3) If Contractor fails to provide or maintain any insurance required of it hereunder, the Owner shall have the right, but not the obligation, to provide or maintain any such insurance, and to deduct the cost thereof from any amounts due and payable to the breaching party (including, in the case of Owner, from any amounts due and payable to Contractor in respect of the Contract Price), or, if there are no such amounts due and payable to the breaching party, the breaching Party shall reimburse the other Party for such cost on demand. Should any of the policies required to be maintained become unavailable or be cancelled for any reason during the period of the Agreement, such Party shall 127
127 of 843
immediately procure replacement coverage. The failure to procure such replacement coverage which is within the reasonable control so as to provide continuous coverage shall constitute a material breach under this Agreement.
4) Contractor shall Notify Owner of any and all incidents giving rise to an insurance claim, and otherwise keep the Owner timely apprised of insurance claim proceedings.
Example Insurance Certificate (endorsements to be provided by carrier):
128
128 of 843
All policies of insurance required to be maintained pursuant to Section 9.1 shall include a provision that bars any cancellation or reduction in coverage in a manner that affects the interests of Owner, without 60 days prior written notice to Owner, except for termination for non-payment of premium which shall require 10 days prior written notice to Owner. Owner has the option in placing the coverages listed above and naming the Contractor as an additional insured. (c) Owner Coverage. Owner shall maintain from and after the date of this Agreement the insurance described below and with limits and coverage provisions not less than the limits and coverage provisions set forth below:
(i) Liability Insurance: Liability insurance on an occurrence basis against claims for personal injury (including bodily injury and death) and property damage. Owner may provide adequate selfinsurance in lieu of the requirements set forth in this Section.
Section 9.2 - Certificates. To the extent available from the applicable insurer, on or prior to the Effective Date in the case of the insurance required by this Agreement and no later than the time required to have the applicable insurance in effect to commence the Work, Contractor shall furnish to owner certificates of insurance (on Acord Form 25 for Liability and Acord Form 28 for Property) from each insurance carrier showing that the insurance required by this Agreement is in full force and effect and the amount of the Carrier's liability thereunder. Certificates of insurance submitted under this section shall be in form and content reasonably acceptable to Owner and shall provide that Owner and any Owner Financing Parties or Investors shall receive timely copies of any Notices of any default or other act or omission by the Contractor or other insured parties that might invalidate, render unenforceable or result in a lapse of such policy in whole or in part. Certificates of each renewal of the insurance should also be delivered to Owner and any Owner Investor or Financing party promptly after receipt.
ARTICLE 10
INDEMNIFICATION AND LIABILITIES
Section 10.1 - Indemnification.
(a) Indemnification by Contractor. Contractor shall indemnify, defend and hold harmless Owner, the members thereof, and their respective officers, directors, employees, agents, Affiliates and representatives (the "Owner Indemnified Parties"), from and against any and all claims (in whatever form and to the fullest extent permitted by law) arising out of or in any way connected with, but only to the extent of, any gross negligence, fraud or wilful misconduct of Contractor or anyone acting on Contractor's behalf or under its instructions, in connection with this Agreement and Contractor's obligations thereunder. Any costs or expenses incurred by Contractor pursuant to its indemnity obligations under this Section 10.1(a), including the cost of deductibles with respect to the insurance maintained by Contractor or Owner pursuant to Article 9 or losses in excess of such insurance coverage, shall not constitute a Reimbursable Cost under this Agreement. (b) Indemnification by Owner. Owner shall indemnify, defend and hold harmless Contractor, its officers, directors, employees, agents, Affiliates and representatives (the "Contractor Indemnified Parties") from and against any and all claims (in whatever form and to the fullest extent permitted by law) arising out of or in any way connected with, but only to the extent of, any gross negligence, fraud or wilful misconduct of Owner or anyone acting on Owner's behalf or under its instructions (other than Contractor and its suppliers, subcontractors, venders, and their subcontractors and vendors and any employee or agent of the foregoing), in connection with this Agreement and Owner's obligations thereunder.
Section 10.2 - Environmental Liability.
(a) Contractor Liability. Contractor shall not be responsible for claims directly or indirectly related to hazardous materials present at the Project before the date of this Agreement, except to the extent Contractor acted with respect to such materials in a grossly negligent manner. Owner shall 129
129 of 843
defend, indemnify and hold Contractor harmless against such claims, except to the extent such claims arise from Contractor's grossly negligent or intentional acts. (b) Owner Liability. Owner shall not be responsible for claims directly related to hazardous materials at the Project arising out of the grossly negligent or intentional acts of Contractor. This provision of the Agreement shall not be construed to require Contractor to take corrective action with respect to any hazardous materials at the Project before the date of this Agreement. (c) Governmental Actions. If action is required at the Project to comply with any applicable environmental laws during the term of this Agreement, Owner (with Contractor's assistance) shall be responsible for the costs of compliance. Costs for such compliance action shall only be incurred by Contractor only with Owner's prior written consent, unless a governmental authority requires Contractor to incur such costs and expenses prior to obtaining such written consent.
ARTICLE 11
LIMITATIONS OF LIABILITY
Section 11.1 - Limitations Of Liability.
(a) Consequential Damages. Notwithstanding any provision in this Agreement to the contrary, Contractor and Owner each agree not to assert against the other any claim, demand or suit for consequential, incidental, indirect or special damages arising from any aspect of the performance or non-performance of the other Party or any third-Party engaged by such other Party under this Agreement, and each Party hereto waives any such claim, demand or suit against the other in connection with this Agreement.
(b) Damages Limited to Annual Operating Fee. The aggregate liability of Contractor (except for those claims that are subject to the provisions of Section 10.1(a) (Indemnification by Contractor) or covered by the insurance set forth in Article 9, and then only to the extent such claims are actually covered thereby, after giving effect to any deductibles, exclusions, limits, or self-insured retentions thereunder) with respect to claims of Owner arising out of the performance or non-performance of obligations under this Agreement. Contractor’s liability shall in no event exceed, during any Contract Year, the Annual Operating Fee payable to Contractor during such Contract Year plus the amount necessary to satisfy Contractor's indemnification responsibilities under Article 10. (c) Personal Liability Limited. Contractor and Owner each understand and agree that there shall be absolutely no personal liability on the part of any of the members, partners, officers, employees, directors, agents, authorized representatives or Affiliates of Owner or Contractor for the payment of any amounts due hereunder, or performance of any obligations hereunder. Contractor shall look solely to the assets of Owner for the satisfaction of each and every remedy of Contractor in the event of any breach by Owner. Owner shall look solely to the assets of Contractor for the satisfaction of each and every remedy of Owner in the event of any breach by Contractor. (d) Survival. The parties further agree that the waivers and disclaimers of liability, indemnities, releases from liability, and limitations on liability expressed in this Agreement shall survive termination or expiration of this Agreement, and shall apply at all times (unless otherwise expressly indicated), regardless of fault, negligence, strict liability, or breach of warranty of the Party indemnified, released or whose liabilities are limited, and shall extend to the members, partners, principals, officers, employees, controlling persons, executives, directors, agents, authorized representatives, and affiliates of such Party.
(e) Exclusivity. The provisions of this Agreement constitute Contractor's and Owner's exclusive liability, respectively, to each other, and Contractor's and Owner's exclusive remedy, respectively, with respect to the Services to be performed hereunder and Owner hereby releases Contractor performing Services hereunder, and Contractor hereby releases Owner performing its obligations hereunder, from any further liability.
ARTICLE 12
130
130 of 843
CONFIDENTIALITY
Section 12.1 - Contractor. Contractor agrees to hold in confidence for a period of Three Years from the date of disclosure, any information supplied to Contractor by Owner or others acting on its behalf. Contractor further agrees, to the extent requested by the supplier of such information, to require its subcontractors, vendors, suppliers and employees to enter into appropriate nondisclosure agreements relative to such information, prior to the receipt thereof.
Section 12.2 - Owner. Owner agrees to hold in confidence for a period of three years from the date of disclosure, any information supplied to Owner by Contractor or others acting on its behalf, provided that Owner may disclose such information as is required by Lenders (including their agents and advisors), provided Lenders enter into appropriate nondisclosure agreements. Owner further agrees, to the extent requested by the supplier of such information, to require its members and contractors to enter into such appropriate nondisclosure agreements relative to such information, prior to their receipt thereof.
Section 12.3 - Exceptions. The provisions of this Article shall not apply to information that was in the public domain, was already in the receiving Party’s possession, or was received lawfully and free of any obligation to treat it as confidential.
Section 12.4 - Required Disclosure. If a receiving Party or any of its respective representatives is required by applicable law to disclose any of the information that is otherwise required to remain confidential pursuant to this Article 12, the receiving Party will notify the other Party promptly in writing so that the other Party may seek a protective order or other appropriate remedy (which the receiving Party will not oppose), or, in the other Party's sole discretion, waive compliance with the terms of this Agreement.
ARTICLE 13
TITLE, DOCUMENTS AND DATA
Section 13.1 - Materials And Equipment. Title to all materials, equipment, tools, supplies, consumables, spare parts and other items purchased or obtained by Contractor on a Reimbursable Cost basis hereunder shall pass immediately to and vest in Owner upon the passage of title from the vendor or supplier thereof, provided, however, that such transfer of title shall in no way affect Contractor's obligations as set forth in this Agreement.
Section 13.2 - Documents. All materials and documents prepared or developed by Contractor, its employees, representatives or contractors in connection with the Project or performance of the Services, including all manuals, data, drawings, plans, specifications, reports and accounts, shall become Owner's property when prepared, and Contractor, its agents, employees, representatives, or contractors shall not use such materials and documents for any purpose other than performance of the Services, without Owner's prior written approval. All such materials and documents, together with any materials and documents furnished to Contractor, its agents, employees, representatives, or contractors by Owner, shall be delivered to Owner upon expiration or termination of this Agreement and before final payment is made to Contractor.
Section 13.3 - Review By Owner. All materials and documents referred to in Section 13.2 hereof shall be available for review by Owner or Lenders (including their agents or advisors) at all reasonable times during development and promptly upon completion. All such materials and documents required to be submitted for approval by Owner shall be prepared and processed in accordance with the requirements and specifications set forth in the Administrative Procedures Manual. However, Owner's approval of materials and documents submitted by Contractor shall not relieve Contractor of its responsibility for the correctness thereof or of its obligation to meet all requirements of this Agreement.
131
131 of 843
Section 13.4 - Proprietary Information. Where materials or documents prepared or developed by Contractor or its agents, employees, representatives or contractors contain proprietary information, systems, techniques, or know-how acquired from third parties by Contractor or others acting on its behalf, such persons or entities shall retain all rights to use or dispose of such information, provided, however, that Owner shall have the right to the same to the extent necessary for operation or maintenance of the Project.
ARTICLE 14
RESOLUTION OF DISPUTES
Section 14.1 - Resolution Through Discussions. If any dispute or difference of any kind (a Dispute") arises between Owner and Contractor in connection with, or arising out of, this Agreement, the Owner and Contractor within 30 days shall attempt to settle such Dispute in the first instance through discussions. The designated representatives of Owner and Contractor shall promptly confer and exert their best efforts in good faith to reach a reasonable and equitable resolution to such Dispute. If the representatives are unable to resolve the Dispute within 5 Business Days, the Dispute shall be referred within 2 Business Days of the lapse of the 5 Business Day period to the responsible senior management of each Party for resolution. Neither Party shall seek any other means of resolving any Dispute arising in connection with this Agreement until the responsible senior management of Owner and Contractor have had at least 5 Business Days to resolve the Dispute following referral of the Dispute to them. If the Parties are unable to resolve the Dispute using the procedure described in this section, either Party may deliver notice to the other Party of its intent to submit the Dispute to arbitration ("Arbitration Notice"). The Arbitration Notice shall include the specific issues concerning the Dispute which must be resolved by the arbitration.
Section 14.2 - Arbitration. Any Dispute arising out of, or in connection with, this Agreement and not settled by the procedure prescribed in Section 14.1, shall (regardless of the nature of the Dispute) be finally settled in accordance with the California Arbitration Act. Any dispute, claim or controversy that may arise between the Parties arising out of the interpretation or breach of this Agreement, whether sounding in tort, contract, statutory violation or otherwise, or involving the construction or application or any of the terms, provisions, or conditions of this Agreement. The Parties agree that in the event any action is brought to enforce any provision of this Agreement, the prevailing Party in such action shall be entitled to its reasonable attorneys’ fees and costs as part of any judgment or award. The Parties shall try to mutually agree upon an arbitrator who shall hear and determine the controversy or dispute. In the event the Parties are unable to agree upon a mutually acceptable arbitrator, they shall select an arbitrator through the procedures established by the Judicial Arbitration & Mediation Service (JAMS). The Parties further agree that this Agreement is intended to be strictly construed to provide for arbitration as the sole and exclusive means for resolution of all disputes hereunder. The Parties expressly waive any entitlement to have such controversies decided by a court or a jury in order to obtain the benefits of arbitration.
Section 14.3 - Continued Performance. During the pendency of any arbitration, Contractor and Owner shall continue to perform their obligations under this Agreement.
ARTICLE 15
MISCELLANEOUS PROVISIONS
Section 15.1 - Assignment. Neither Owner nor Contractor Party may assign its rights or obligations under this Agreement without the prior written consent of the other Party hereto, except that this Agreement may be assigned by Owner without such prior consent to any successor of Owner, to a person or entity acquiring all or substantially all of the Project, or to a Lender or any purchaser of the Project upon the exercise of remedies under a Project Agreement by a Lender. Contractor hereby consents to the assignment by Owner of a security interest in this Agreement to Lenders. Contractor 132
132 of 843
further agrees to execute documentation to evidence such consent reasonably required by the Lenders typical for project finance. Contractor recognizes that such consent may grant certain rights to such Lenders, which shall be fully described in the consent documents.
Section 15.2 - Access to Project.
(a) Owner. Owner, Lenders and their respective agents and representatives shall have access at all times to the Project and any documents, materials and records and accounts relating to Project operations for purposes of inspection and review. Upon the request of Owner, Lender or their respective agents and representatives, Contractor shall make available to such persons or entities and provide them with access to any operating data and all operating logs. (b) Cooperation. During any such inspection or review of the Project, each of Owner, Lender and their respective agents and representatives shall use its reasonable commercial efforts to cause authorized visitors to comply with Contractor's safety and security procedures and to conduct such inspection and review in a manner which causes minimal interference with Contractor's activities.
Contractor agrees to cooperate fully with Owner, Lender and their respective agents and representatives in providing requested information and documentation for the support of any financial or legal transactions associated with the Project.
Section 15.3 - Force Majeure. If either Owner or Contractor is rendered wholly or partially unable to perform its obligations under this Agreement (other than payment obligations) due to a Force Majeure Event, the Party affected by such Force Majeure Event shall be excused from whatever performance is impaired by such Force Majeure Event, provided that the affected Party promptly, upon learning of such Force Majeure Event and ascertaining that it will affect its performance hereunder, (i) promptly gives notice to the other Party stating the nature of the Force Majeure Event, its anticipated duration, and any action being taken to avoid or minimize its effect and (ii) uses its reasonable commercial efforts to remedy its inability to perform. The suspension of performance shall be of no greater scope and no longer duration than that which is necessary. No obligations of either Party which arose before the occurrence causing the suspension of performance and which could and should have been fully performed before such occurrence shall be excused as a result of such occurrence. The burden of proof shall be on the Party asserting excuse from performance due to a Force Majeure Event.
Section 15.4 - Reserved
Section 15.5 - Amendments. No amendments or modifications of this Agreement shall be valid unless evidenced in writing and signed by duly authorized representatives of both parties.
Section 15.6 - Survival. Notwithstanding any provisions herein to the contrary, the obligations set forth in Articles 7, 10, 12 and 14, and the limitations of liabilities set forth in Article 11, shall survive in full force despite the expiration or termination of this Agreement.
Section 15.7 - No Waiver. It is understood and agreed that any delay, waiver or omission by Owner or Contractor with respect to enforcement of required performance by the other under this Agreement shall not be construed to be a waiver by Owner or Contractor of any subsequent breach or default of the same or other required performance on the part of Owner or Contractor. Except as expressly provided in this agreement, neither Party makes any warranties or guarantees to the other, either express or implied, with respect to the subject matter of this agreement, and both parties disclaim and waive any implied warranties or warranties imposed by law including merchantability or fitness for a particular purpose.
Section 15.8 - Notices. All notices and other communications (collectively "Notices") required or permitted under this Agreement shall be in writing and shall be given to each Party at its address or fax number set forth in this Section 15.8 or at such other address or fax number as hereafter specified as provided in this Section 15.8. All Notices shall be (i) delivered personally or (ii) sent by fax, electronic mail, telegraph, registered or certified mail (return receipt requested and postage prepaid), or (iii) sent by a nationally recognized overnight courier service. Notices shall be deemed to given (A) when 133
133 of 843
transmitted if sent by fax, electronic mail, or telegraph (provided the transmittal is confirmed), or (B) upon receipt by the intended recipient if given by any other means. Notices shall be sent to the following addresses:
To Contractor:
Staten Solar
175 Nortech Pkwy, San Jose, CA 95134
ATTN:
Tel: _______________
Fax: ________________
E-Mail:
To Owner:
City of Laguna Beach
505 Forest Avenue, Laguna Beach 92651
ATTN:
Tel:
E-Mail:
Section 15.9 - Fines And Penalties. If during the term of this Agreement any governmental or regulatory authority or agency assesses any fines or penalties against Contractor or Owner arising from Contractor's failure to operate and maintain the Project in accordance with applicable Laws without Owner's prior written consent, such fines and penalties shall, subject to the limitations set forth in Article 11, be the sole responsibility of Contractor and shall not be deemed a Reimbursable Cost.
Section 15.10 - Representations And Warranties. Each Party represents and warrants to the other Party that:
(a) such Party has the full power and authority to execute, deliver and perform this Agreement and to carry out the transactions contemplated hereby;
(b) to the best of such Party's knowledge, the execution, delivery and performance by such Party of this Agreement, does not and will not materially conflict with any legal, contractual, or organizational requirement of such Party; and
(c) there is no pending or threatened legal, administrative, or other proceedings that if adversely determined, could reasonably be expected to have a material adverse effect on such Party's ability to perform its obligations under this Agreement.
Section 15.11- Counterparts. The parties may execute this Agreement in counterparts, which shall, in the aggregate, when signed by both parties constitute one instrument. Thereafter, each counterpart shall be deemed an original instrument as against any Party who has signed it.
Section 15.12 - Governing Law. This Agreement is executed and intended to be performed in the USA, and the laws of country shall govern its construction, interpretation and effect.
Section 15.13 - Partial Invalidity. If any term, provision, covenant or condition of this Agreement is held by a court of competent jurisdiction to be invalid, void or unenforceable, the rest of this Agreement shall remain in full force and effect and in no way be affected, impaired or invalidated.
Section 15.14 - Captions. Titles or captions of Sections contained in this Agreement are inserted as a matter of convenience and for reference, and do not affect the scope or meaning of this Agreement or the intent of any provision hereof.
Section 15.15 - Dollar Amounts. All amounts of money in this Agreement are denominated in the currency of the United States of America (written as “USA”). 134
134 of 843
Section 15.16 - Vendor's Warranties. For Owner's benefit, Contractor shall obtain from sellers of equipment, material, or services (other than the Services), warranties against defects in materials and workmanship to the extent such warranties are reasonably obtainable, and, to the extent of any such warranties actually obtained, Owner releases Contractor from any further liability arising in respect of such equipment, material or services (other than the Services) to the extent such liability is covered by any such warranty. Contractor itself shall not be liable for any such warranties, or for any defects or damage caused by such equipment, material or services (other than the Services). Upon Owner's request, Contractor agrees to take such steps as are necessary, short of litigation, to enforce said warranties. Each such warranty shall be enforceable by Owner for Owner's benefit or assignable by Contractor to Owner without any further action or consent by or on the part of any third Party.
Unless otherwise requested, Contractor shall administer such warranties and immediately notify Owner of any defects discovered or suspected that may be covered by such warranties. When requested, Contractor shall assign any such warranty to Owner and assist Owner with the administration and enforcement of such warranty, or, if such warranty is not assignable to Owner, assist Owner with the administration and enforcement of such warranty.
IN WITNESS WHEREOF, the parties have executed this Agreement through their duly authorized officers as of the date set forth in the preamble to this Agreement.
City of Laguna Beach
By:
Name:
Title:
STATEN SOLAR CORPORATION
By:
Name:
Title:
135
135 of 843
APPENDIX-A
SCOPE OF SERVICES
1. ANNUAL OPERATIONS AND MAINTENANCE PACKAGE:
a) Annual Fee: customized as per the services.
b) Proactive Service
i. Includes 1 visit per site per year for any requirements. If Owner requests more than 1 visit, Owner will pay a $500 minimum service fee at the rate of $75/hour.
This visit can be but is not limited to the annual maintenance checkup. If additional visit(s) is required to perform major repairs or replacements, the Owner shall provide timely approval for such work, and the Contractor shall not be liable for any damages or performance issues resulting solely from unreasonable delays in the Owner’s approval process; provided, however, that the Contractor shall remain responsible for promptly notifying the Owner of the required work and for mitigating impacts to the extent reasonably practicable. ii. Remote monitoring for both sites, provided that the Contractor shall promptly notify the Owner of any identified issues and shall take reasonable steps to prevent, mitigate, or correct system performance problems within the scope of its obligations under this Agreement.
c. Panel Washing. At Staten’s discretion based on performance monitoring d. Snow Removal: NA
e. Weed Abatement (optional service). Contractor will notify Owner if there is a need to perform weed control activities to prevent damage to array components or prevent shading. This is an additional service. A quote to perform the service will be provided at Owners request.
f. General Condition and Physical Inspection
i. Inspect site for any defects or damage
ii. Inspect panels for defect or damage
iii. Identify new and/or existing shade concerns for the photovoltaic array. iv. Identify any required weed abatement from array and immediate vicinity as needed, subject to Owner approval.
v. Verify that all placards are firmly attached and legible; replace them as required.
vi. Note any potential safety concerns or fire hazards based on Project HSE rules; correct as required.
g. Inter-modules Wiring and Connections
i. Verify condition of inter-module array wiring for aging and corrosion. 136
136 of 843
ii. Inspect all array wiring connections to make sure quick connect leads are fully seated into one another.
iii. Inspect all array wiring to make sure it is secured/dressed properly to the module frame and/or array racking so as not to hang from the underside of the array.
h. Racking Condition
i. Verify secure module attachment by random torque test of 25% of module attachments.
ii. Verify condition of racking for corrosion, sagging of rails, etc. iii. Verify condition of racking hardware connections, splices, etc. i. BOS Components
i. Verify condition of wire transition junction boxes for weatherproofing, corrosion and security of internal wiring connections.
ii. Verifying condition of all DC conduit and connections. iii. Verify interior and exterior condition of DC combiner box (es). iv. Verify condition of all wall & pad mounted switchgear, meters and inverters for corrosion & security of attachment to wall/structure/pad, etc. Note any new access issues.
v. Verify the physical condition of all AC conduits and ensure all connections are still tight.
vi. Verify condition of dc disconnect(s).
vii. Verify condition of ac disconnect(s).
j. Data Acquisition System (DAS)
i. Tightening of all connections.
ii. Clean pyranometers.
iii. Inspection and lubrication of Wind Sensors.
iv. Clearing of debris from temperature sensors.
v. Confirm that pyranometers are aligned with the plane of the PV array or note if pyranometer(s) cannot be adjusted to match the array.
vi. Log kwh readings from Inverters and meters and compare data to monitoring system to verify proper calibration of meters and monitoring system. Note any anomalies in the annual report and recalibrate meters as needed. k. Electrical Connection Torque Test
i. Torque tests all AC and DC power cable terminations 8 AWG or larger from combiner boxes to the point of interconnection.
137
137 of 843
ii. Verify ground bond integrity.
l. Inverter Maintenance: Perform all maintenance as and when required by the inverter manufacturer, but in all cases perform the following services every six months:
i. Test Operating AC voltage and current at the inverter output. ii. Calculate power output corrected for temperature and insolation. iii. Measure ground resistance at POC ground. Resistance = ohms iv. Check the operation of all inverter safety devices (E-stop, door switches) v. Check appearance/cleanliness of inverter cabinet, ventilation system and all exposed surfaces
vi. Inspect weather stripping, replace as necessary
vii. Inspect, clean or replace inverter air filter elements as necessary viii. Check for corrosion on all inverter terminals, cables and enclosure ix. Perform a complete visual inspection of inverter internally mounted equipment including subassemblies, wiring harnesses, contactors, power supplies and all major components (tighten as necessary).
x. Complete thermal scan of inverter connections, wiring and electronics xi. Check all inverter fuses
xii. Inspect AC and DC fans, replace as necessary
xiii. Confirm the inverter operating modes including Standby, Startup, and Run xiv. Validate display data accuracy
xv. Record all operating voltages and current readings via the inverter front display panel
xvi. Record lifetime and instantaneous inverter power output including environmental data
xvii. Visual inspection and thermal scan of system electrical components xviii. Clean fan and heat sink and check for proper cooling during operation. xix. Note condition of circuit boards and electrical components. xx. Verify that all service bulletins have been performed. Note any manufacturer updates that may be available.
xxi. Review Inverter Manufacturer Annual Maintenance Requirements with Owner and address any resulting additional actions.
m. Infrared Inspections (conduct as close to full load as possible) i. Set baseline IR files for all components.
ii. Conduct IR inspection of tie-in/point of connection. iii. Conduct IR inspection of inverter(s).
138
138 of 843
iv. Conduct IR inspection of combiner boxes.
v. Conduct IR inspection of junction boxes.
vi. Make any repairs as necessary and note any anomalies in the Annual Report. n. On-line String Level Tests
i. Test Operating DC Voltages (Vmp).
ii. Test Operating DC Currents (Imp) of All Strings.
o. Final Checks
i. Verify all signage still in place.
ii. Verify one-line electrical drawing, maintenance manual, keys, and spare fuses are still intact on site.
iii. Confirm that the system is back online and that the output is at the expected level.
iv. Confirm that the monitoring system is in service and functioning properly. p. NOTES:
i. Take digital photos of arrays and all major system components. ii. Take digital images of any anomalies during thermographic (IR) inspections, if possible.
iii. Submit digital images along with checklist and other documentation
2. PER INCIDENT MAINTENANCE, TROUBLESHOOTING, AND REPAIR:
a. After consuming the one (1) included service visit per site per year; Owner will pay a service fee for any additional site visits.
b. The Owner is responsible for costs of all replacement parts, new equipment, and any other required materials not under warranty.
139
139 of 843
APPENDIX B
Performance Guarantee
Contractor shall calculate the Annual Deficit for each Contract Year during the Term:
Guaranteed Generation = ((Expected Energy x Guarantee Level) x Weather Adjustment) - Actual Generation
Where:
A. Actual Generation (kWh) – Solar Production units measured by Solar Energy Meter B. Expected Energy (kWh) – Estimated Solar Production as per PvSyst (E_Grid) C. Actual Irradiation (kWh/m²) – Irradiation (Sun Light) measured by Irradiation Sensor D. Expected Irradiation (kWh/m²)- Expected Irradiation (GlobInc) as per PvSyst.
E. Guarantee Level (%) - Generation Guarantee as per Section 3.7.
F. Weather Adjustment (%) - means the following ratio:
Actual Irradiation for a Metrological Year
Expected Irradiation for a Metrological Year
True up Period:
To obtain the true average, a Five-year generation period will be considered to calculate the performance guarantee. To calculate the 90% threshold, the system's actual generation will be compared to the Expected Energy output after adjustment for measured metrological conditions per the Weather Adjustment/variance in a true-up period of Sixty (60) month basis. Any excess energy produced within a true-up period can be applied towards covering shortfalls in kWh production in subsequent years within the same true-up period, provided that (a) the shortfalls are not attributable to Contractor error, negligence, or system downtime outside normal operating parameters, and (b) such carry-forward credits shall not extend beyond the applicable true-up period.
Guarantee Payment:
• At the end of each True-up Period of Five Years:
(i) if the ∑ Annual Deficits > 0, then Contractor shall pay to Owner an amount equal to the product of (i) the Annual Deficit and (ii) the Energy Price per kWh for each Contract Year, with each product then aggregated for the Contract Years comprising such True-Up Period.
(ii) Contractor shall, by invoice, promptly notify Owner of any Guarantee Payment due. A Guarantee Payment shall be payable within thirty (30) days of the date of such invoice. (iii) Contractor shall provide Owner with a report detailing the calculations set forth in the “Guaranteed Output Calculations” and the “Guarantee Payment” Sections. This report shall contain sufficient information for the Owner to be able to determine the accuracy of the Contractor’s conclusion as the amount, if any, of Guarantee Payment.
Actual Generation Measurement:
The process for measuring Actual Generation for each Contract Year shall be:
140
140 of 843
• Initial Output Data Collection. During the Term, the Contractor will collect energy output data using its Data Acquisition System. For each Contract Year, the Contractor will sum the daily kWh output provided by the DAS to calculate the Actual Generation for such Contract Year.
• Equipment Calibration and Replacement: Contractor may request to have the meteorological equipment independently calibrated or replaced at its own expense every eighteen to thirty months. The Contractorshall notify the other Party of the scheduled calibration date and time no less than 30 days prior and shall provide the Owner with written proof of calibration or replacement.
• Contingency for Equipment Failure: In the event of hardware, communication, or other failure affecting the DAS, Contractor will make commercially reasonable efforts to resolve the failure in a timely manner. If data is lost, Actual Generation shall be adjusted to compensate for such lost data, which shall be Contractor’s sole liability, and Owner’s exclusive remedy, for any Guaranteed Output arising from any equipment failure or lost data relating to the DAS:
➢ In lieu of lost meteorological data, Contractor will utilize such data obtained from a nearby meteorological station that Contractor monitors and selects for such purpose. ➢ In lieu of lost electricity data, Contractor will utilize the cumulative data from System meter readings to calculate the electricity generated during the missing interval. If data from the System meter is inaccurate or missing, the Contractor will simulate electricity production during the missing interval utilizing measured meteorological data and PVsyst. The simulated electricity production during the missing interval will be added to the Actual Generation for the subject Contract Year.
Adjustment of Expected Energy:
Guaranteed output levels shall be adjusted as part of the Construction Document Phase of Design.
This revised number will be developed based on the final system design agreed on by both the Contractor and Owner. Annual guaranteed output levels shall be normalized to account for variance between actual weather conditions and those assumed in the output modeling (PVSyst) used as the basis for the Production Guarantee.
If, and to the extent, any of the following events results in a change in the production of electricity by the System, Expected Energy shall be adjusted correlatively for the period of such change:
• There is structural failure in a building supporting the System. • There is a material change in solar access or irradiance causing shading such as added trees or structures.
• The equipment, including any modules, inverters, racking or structure, transformers, switchgear, panelboards combiner boxes or monitoring equipment suffers a manufacturers serial defect to the extent more than 5% of the equipment at a singular site is out of service for a period greater than thirty (30) days and requires replacement, provided that Contractor used its best efforts to assist the Owner in its attempts to remedy the equipment with respective manufacturer;
• The manufacturer of the equipment including any modules, inverters, racking or structure, transformers, switchgear, panelboards combiner boxes or monitoring equipment is not able or willing to honor its product warranty to Contractor or the warranty has expired, and Owner does not remedy by replacement at its own expense, provided that Contractor used its best 141
141 of 843
efforts to assist the Owner in its attempts to oblige the manufacturer to comply with its warranty obligations;
• There is any curtailment, reduction, or adjustment to the System, or failure of the System to perform, whether foreseen or unforeseen, as a result of any legislation, regulation, administrative or executive order, requisition or any other action by any (i) federal, state or local government or agency, (ii) local utility or public utilities commission; or (iii) independent system Contractor or regional transmission organization. • There is an event of Force Majeure; or
• There is any change in usage of our structures on any of the Sites, or buildings at or near any of the Sites, which causes additional shading, soiling, or otherwise reduced performance of the System
Fire Station 2:
Contract
Year
Expected Solar
Energy Production
(kWh)
Expected Solar
Energy
Production
(%)
Guaranteed Solar
Energy Production
(kWh)
Utility Energy Cost
Rate
($/kWh)
1 90.00%
2 3
4 5
6 7
8 9
10 Fire Station 3:
Contract
Year
Expected Solar
Energy Production
(kWh)
Expected Solar
Energy
Production
(%)
Guaranteed Solar
Energy Production
(kWh)
Utility Energy Cost
Rate
($/kWh)
1 90.00%
2 3
4 5
6 7
8 9
10 142
142 of 843
Equipment Lease for Battery Energy Storage Systems
1 EQUIPMENT LEASE FOR BATTERY ENERGY STORAGE SYSTEMS
AGREEMENT NUMBER
@
This Battery Energy Storage Systems Equipment Lease (the “Lease”) is dated ___________ __, 20__, and is entered into by and between ____________________ (“Lessor”) and the City of Laguna Beach (the “City” or “Lessee”).
RECITALS
A. The City of Laguna Beach (the “City”) owns the fee simple title to certain real properties located at (i) Fire Station 2 (285 Agate Street, Laguna Beach, CA 92651) and (ii) Fire Station 3 (2900 Alta Laguna Boulevard, Laguna Beach, CA 92651) (the “Sites”); and B. The City desires to lease from Lessor certain energy system(s) to be installed, constructed, operated, and maintained by Lessor at the Site; and C. As of the Effective Date, the Parties commit to Fire Station 2 and Fire Station 3 (the ‘Committed Sites’). Any other facility identified in Exhibit A of the Master Agreement is an ‘Optional Site’ that shall become subject to this Lease only upon the City’s written Notice to Proceed (NTP).
D. Lessor and the City have this same date entered into a Site License Agreement (“SLA”), Agreement Number ________, under which the City has licensed the Licensed Area, as that term is defined in the SLA, to Lessor to construct and install the system(s), as well as to operate and maintain the system(s); and
NOW, THEREFORE, in consideration of the above recitals and mutual promises set forth below, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:
143
143 of 843
Equipment Lease for Battery Energy Storage Systems
i
TABLE OF CONTENTS
1. DEFINITIONS………............................................................................................................1
2. LEASE OF BATTERY ENERGY STORAGE SYSTEM EQUIPMENT.............................1
3. LEASE TERM…....................................................................................................................1
4. RENT, PAYMENT AND TERMS, AND TAXES.........................................................................1
5. ENVIRONMENTAL ATTRIBUTES AND RENEWABLE ENERGY CREDITS. .............................2
6. FUNDING AVAILABILITY. ....................................................................................................3
7. INSTALLATION AND ACCEPTANCE OF THE SYSTEM...........................................................4
8. SYSTEM ADDITIONS.............................................................................................................4
9. USE; MAINTENANCE; OPERATION......................................................................................4
10. LIENS AND PAYMENT OF CONTRACTORS AND SUPPLIERS .. ..............................................5
11. INSURANCE………. .............................................................................................................6
12. QUIET ENJOYMENT…. ........................................................................................................6
13. CUSTOMER SERVICE SUPPORT. ..........................................................................................6
14. ASSIGNMENT……................................................................................................................6
15. DEFAULT……......................................................................................................................8
16. LESSOR INDEMNITY...........................................................................................................11
17. OTHER TERMS AND CONDITIONS .....................................................................................11 144
144 of 843
Equipment Lease for Battery Energy Storage Systems
1 AGREEMENT
1. Definitions. Except as specifically provided to the contrary in this Lease, or unless the context clearly requires otherwise, the capitalized terms in this Lease (including any exhibits, attachments, and appendices) shall have the meanings set forth in the SLA.
2. Lease of BESS Equipment System. Lessor agrees to lease to the City, and the City agrees to lease from Lessor, the BESS equipment system and all replacements, repairs, restorations, modifications and improvements thereto (the “System”) described in Exhibit A, attached hereto and incorporated herein.
3. Lease Term. The Initial Term of this Lease shall commence on the Effective Date and shall continue for a period of twenty (20) years (“Initial Term”) from the date Lessor delivers the System to the City, unless terminated earlier pursuant to the provisions in this Lease. The terms and conditions the Initial Term, except that the rental payments (“Rental Payments”) shall be as provided in the payment schedule, attached hereto and incorporated herein as Exhibit B (“Payment Schedule”).
3.1. Optional Sites. For each Optional Site, a separate Lease Term shall commence on the NTP date stated in the applicable Work Order and continue for the period stated therein.
4. Rent, Payment and Terms, and Taxes.
4.1. Rent. Lessee shall pay Lessor rent (“Rent”) for the use of the System and for operation and maintenance of the System, at the rate and intervals shown in the Payment Schedule.
Rent and all financial obligations for an Optional Site shall commence only after (i) City issues a signed Work Order, and (ii) City countersigns the Placed in Service Certificate for that Site.
4.1.1. The Rent to be paid Lessor, as provided herein, shall be in compensation for all of Lessor’s expenses incurred in the performance of this Lease, including travel, per diem, and taxes, unless otherwise expressly so provided.
4.2. Payment Terms. All Rent amounts due under this Lease shall be due and payable on the date set forth in the Payment Schedule. For the convenience of the City only, Lessor may invoice the City monthly, stating (i) the Rent due, (ii) any additional charges incurred by the City under this Lease and (iii) the total amount due from the City. Lessee’s obligation to pay timely amounts due under this Lease shall be directly contingent upon the Lessor’s issuance of an accurate invoice and may be affected in the event of the Lessor’s failure to issue an invoice or any inaccuracy in such invoice.
4.3. Work Orders. (a) Each Work Order shall attach (i) site description, (ii) system size, (iii) BESS power & energy ratings, (iv) expected PTO date and (v) Payment Schedule. (b) A Work Order signed by both Parties constitutes an amendment to this Lease solely for the Site listed therein.
145
145 of 843
Equipment Lease for Battery Energy Storage Systems
2 4.4. Additional Project Expenses. The parties anticipate that the City may incur other costs in connection with the installation of the System, such as out of scope or unforeseen conditions related to, among other things, concealed conditions (singularly, a “Project Expense” and collectively, “Project Expenses”). Except as specified in sections 4.4 and
4.5 below, the City intends to pay for such Project Expenses as they are incurred outside of the Rent payments. However, at City’s option, City may elect to pay some or all of the Project Expenses by providing written notice to Lessor of the City’s election(s) as set forth in section 4.5.
4.5. Utility Upgrades. For this project a utility required upgrade budget of $__0______ has been included in the Rent. Once Utility detailed engineering review is completed Rent can be adjusted in accordance with section 4.5 below. If actual utility-upgrade cost is less than the placeholder amount, Rent shall be reduced dollar-for-dollar (net of any ITC benefit) effective the next billing cycle.
4.6. Scope Changes. If changes in project scope occur, and such additional scope and associated costs go beyond those contemplated as part of the development and implementation of the System in this Agreement, Lessor will provide reasonable documentation demonstrating the direct and actual time and materials costs relating to such associated costs with a ten percent (10%) markup, and, within thirty (30) days of receipt of notice from Lessor reasonably substantiating the associated costs, City will provide written notice to Lessor of the City’s election of one of the following options:
4.6.1. City will pay the entire amount of such scope change costs, and the Rent will remain unchanged.
OR
4.6.2. The City will finance such scope change costs by adjustment to the Rent as follows:
a. For every ITC eligible $10,000 of the scope change costs, the Rent will increase $95 per month;
b. For every non-ITC eligible $10,000 of the scope change costs, the Rent will increase $125 per month;
4.6.3. No Rent adjustment shall exceed the original Payment Schedule without City approval.
5. Environmental Attributes and Renewable Energy Credits. The Rent includes all Environmental Attributes, which shall become the property of the Lessor.
5.1. Reserved
5.2. Reserved
5.3. Rebates and Other Incentives. Except as otherwise provided in Section 5 (Environmental Attributes), any grant, rebate, credit, tax benefit, tariff payment, market 146
146 of 843
Equipment Lease for Battery Energy Storage Systems
3 participation payment, demand-response revenue, or other monetary or non-monetary incentive (collectively, “Incentives”) that becomes available as a direct result of the design, purchase, installation, ownership, operation, or maintenance of the Battery Energy Storage System (“BESS”) shall accrue exclusively to Lessor.
5.3.1. Federal Tax Benefits. “Incentives” include, without limitation, any and all federal, state, or local:
5.3.1.1. Investment Tax Credits (“ITC”) available for qualified energy-storage property under § 48 of the Internal Revenue Code (or any successor or substantially similar provision);
5.3.1.2. accelerated or bonus depreciation or other cost-recovery deductions; and
5.3.1.3. production or performance-based tax credits, direct payments, or transferable credits that may from time to time replace or supplement the ITC.
5.3.2. State & Utility Programs. “Incentives” also include programs such as the California Self-Generation Incentive Program (SGIP), utility demand-response or capacity-reserve programs, and any successor or comparable programs that provide payments or credits for installing or dispatching energy-storage resources.
5.3.3. City Cooperation. The City shall cooperate in good faith with Lessor to (i) execute any documents reasonably required to secure or assign an Incentive to Lessor, and (ii) provide data, attestations, or site access reasonably necessary for Lessor to qualify for or continue receiving any Incentive. The City shall not, however, be required to incur out-of-pocket expenses or waive any privilege or immunity in providing such cooperation.
5.3.4. No Modification of Environmental Attributes. Nothing in this § 5.3 alters the City’s rights (if any) in Environmental Attributes as defined in § 5; it applies solely to Incentives associated with the BESS.
6. Funding Availability.
6.1. General Funding Requirement. All payment obligations of the City under this Lease or any related agreement are subject to the City’s appropriation of sufficient funds.
6.2. Funding Requirement for Electricity. It is mutually agreed that if the City does not timely appropriate sufficient funds to make Rental Payments, the obligations of the City under this Lease shall be suspended during the continuation of such non-appropriation event or amended to reflect any reduction of appropriated funds. The City will take such action as may be necessary to include, or cause to be included, in its annual operating budget funds sufficient to make Rental Payments hereunder. Should the City fail to appropriate, or otherwise make available, funds to pay Rental Payments, this Lease shall be deemed terminated upon the expiration of available funds. The City will promptly 147
147 of 843
Equipment Lease for Battery Energy Storage Systems
4 notify Lessor if it appears likely that a non-appropriation event will occur, but failure to give such notice shall not extend the Lease beyond the expiration of available funds.
7. Installation and Acceptance of the System. Lessor shall have access to the Site, and shall deliver, construct and install the System at the Site pursuant to the terms of the SLA. Prior to construction, Lessor shall obtain all necessary permits. Upon installation, Lessor shall conduct such inspection and/or testing of the System as necessary and appropriate to determine the System's capability and functionality prior to placing it in service. Acceptance of the System shall follow the milestone definitions and certificate procedures in Exhibit C of this Agreement. The City’s execution of the Placed in Service Certificate for a Site shall constitute ‘Delivery’ for purposes of this Lease.
8. System Additions. During the Term of this Lease, the City may, at its sole option and in its sole discretion, notify Lessor that it desires additional BESS capacity to be installed upon negotiated pricing terms and conditions similar to those of this Lease. The City and Lessor shall meet and confer to determine the amount of additional BESS capacity which Lessor believes can be technically and economically installed. In the event that the City and Lessor agree that additional BESS capacity can be installed, the Lease and the SLA will be amended to reflect the installation and operation of the additional BESS capacity. The City reserves the right in its sole discretion to pursue other suppliers of renewable power generating capacity at the Site and Lessor has no exclusive option or right to provide such additional renewable power generating capacity.
9. Use; Maintenance; Operation. Lessor shall cause the System to be operated and maintained in good repair and operation at Lessor’s sole expense, including the cost of capital repairs and replacements, in a commercially reasonable manner throughout the Term in accordance with the terms of the SLA. Lessor warrants that all of its operating and maintenance personnel will be adequately qualified and trained throughout the Term. Lessor shall also be responsible for any maintenance and repairs to the Site if such maintenance and repairs are necessary as a result of Lessor’s use.
9.1. Performance and Availability. If the System fails to maintain at least 98% availability during any contractual month (the “Minimum Availability”), and such failure is not caused by the City, the Local Electric Utility (including a Disruption Period), or an Event of Force Majeure, then the monthly lease payment shall be reduced proportionally to reflect the loss of availability. The adjustment shall account for expected system degradation and external factors such as weather variability consistent with industry standards and operating as per OEM provided manual, provided that the assumed end-of-warranty guaranteed usable capacity as per OEM technical manual shall not exceed 70% after ten (10) years.
9.2. BESS Availability shall be calculated as follows:
Monthly Lease Fee for BESS Services = [BESS Monthly Service Rate ($/kW/month)] x [Effective Storage Capacity (kW)] x [Availability Adjustment] “Availability Adjustment” or “AA”: If the Monthly Storage Availability during any month is less than the Guaranteed Storage Availability (98%), Lessor’s payment shall be 148
148 of 843
Equipment Lease for Battery Energy Storage Systems
5 calculated by reference to the Availability Adjustment (“Availability Adjustment” or “AA”), which is calculated as follows:
Shortfall damages:
• Guaranteed BESS Availability: 98%
• If the monthly storage availability is greater than or equal to the Guaranteed Storage Availability, then: AA = 100%
• If the monthly storage availability is less than the Guaranteed Storage Availability, then: AA = 100% - [(98% - monthly storage availability)] “Guaranteed Storage Availability” means the percentage of time the BESS is guaranteed to be available and online by the Lessor.
“Monthly Storage Availability” is calculated as a percentage based on this formula:
Online and available hours (H_avail):
Hours in which the BESS is connected to the grid, operating within manufacturerspecified limits (SOC, temperature, voltage, etc.), and capable of charging/discharging at contracted power.
When calculating H_avail, it excludes:
• Force Majeure events.
• Utility/Owner/Host-requested curtailments.
• Grid/Power Source outages and/or interconnection issues (not caused by BESS). • Scheduled planned maintenance (sometimes excluded, sometimes capped). • Major Equipment failure (OEM/Manufacturer Fault).
• Host error/driven faults.
Formula for Available Hours(H_avail)
Havail = H_online + H_forced + H_scheduled + H_excluded Where:
• H_online = Number of hours BESS is online
• H_forced = hours of forced outage (Force Majeure, Manually system off by City).
• H_scheduled = hours of scheduled maintenance (may or may not be excluded depending on contract).
• H_excluded = hours not counted due to exclusions (Grid outage, OEM defect, tripping, EMS fault etc.).
10. Liens and Payment of Contractors and Suppliers. During the Term, Lessor shall comply with the provisions in section 4 of the SLA concerning the senior priority of the Senior Security Documents. Lessor shall not cause or permit any liens to attach or to be placed upon or 149
149 of 843
Equipment Lease for Battery Energy Storage Systems
6 encumber the Facility, the Site, or the Licensed Area arising out of or resulting from this Lease or any work performed by Lessor. If any such lien attaches, Lessor agrees to cause the lien to be promptly removed by the posting of a bond, payment of the lien, or otherwise, without cost to the City. If Lessor fails to promptly remove the lien, in addition to its other remedies under this Lease, the City may undertake to cause such lien to be removed and charge to Lessor any costs and expenses incurred in connection with the removal of said lien. Lessor agrees to hold harmless, defend and indemnify the City against all costs and expenses including reasonable attorneys’ fees and court costs incurred in discharging and releasing any such lien.
11. Insurance. During the Term, Lessor shall maintain and comply with the insurance coverages required in section 9 of the SLA.
12. Quiet Enjoyment. So long as the City is not in default hereunder, neither Lessor nor any entity claiming by, through or under Lessor, shall interfere with the City’s quiet use and enjoyment of the System during the Lease Term.
13. Customer Service Support. Lessor will provide customer service support accessible to the City twenty-four (24) hours per day, seven (7) days per week. For purposes of this provision, “accessible” means that Lessor will provide a designated customer service telephone number with a voice mail system which records the time and date of the call. The initial contact name and phone number are: Name: ________________; Phone Number: (___) ________________. Lessor agrees that it will respond to the City messages on this designated customer service voice mail system within twenty-four (24) hours of the City call. Lessor shall be responsible for notifying Lessee within twenty-four (24) hours of any change in Lessor’s contact information.
14. Assignment.
14.1. Assignment. Except as otherwise provided in this section 14 and as provided in the SLA, the rights, duties, and obligations of Lessor under this Lease shall not be assignable by Lessor in whole or in part without the written consent of the City and upon such reasonable terms and conditions that the City may require. No such assignment shall relieve Lessor of its obligations under this Lease unless the City has agreed otherwise in writing. For purposes of section 14, the sale, assignment, transfer, or disposition, directly or indirectly, of any type which results in a change of control of Lessor shall be deemed an assignment of this Lease. Change of control shall be as defined in common law and may be the result of single or multiple related transactions which result in the cumulative transfer in a twelve (12) month period of more than fifty percent (50%) of the voting stock or equity interests of Lessor. The following transactions or events shall not constitute an assignment that is subject to the City’s prior written approval:
14.1.1. The assignment to an Affiliate of Lessor provided that the assignee shall produce a Certificate of Status from the Secretary of State and business formation documents demonstrating and confirming assignee’s Affiliate status and provided that Lessor submits documentation to demonstrate to the City, in its 150
150 of 843
Equipment Lease for Battery Energy Storage Systems
7 reasonable judgment, that Lessor for the full Term of the SLA and this Lease shall retain all obligations and responsibilities under those Agreements.
14.1.2. The sale of shares of a publicly traded company in an open market transaction.
14.2. City Approval. Lessor acknowledges that the City is relying upon the unique expertise and capability of Lessor. Any assignment of this Lease shall be subject to the written approval of the City, which approval shall not be unreasonably withheld. Lessor shall provide the City with thirty (30) calendar days’ written notice of any proposed assignment that requires their approval. Lessor must include in such notice supporting documentation sufficient to demonstrate to the reasonable satisfaction of the City that the proposed assignee has both the financial capacity and the technical and managerial ability to perform the duties and obligations required under this Lease at a level equal to or exceeding Lessor’s abilities. If the City determines in its sole reasonable judgment that those standards are satisfied, it shall approve such proposed assignment. In the event the City determines in its sole reasonable judgment that the assignee fails to meet the financial capacity and the technical ability to perform the duties and obligations required under this Lease, the City shall promptly give Lessor written notice of such determination and Lessor shall be prohibited from making such assignment. The City shall notify Lessor within thirty (30) calendar days after the City’s receipt of Lessor’s notice of a proposed assignment and supporting documentation as to whether or the City approves of the proposed assignment. In the event the City does not approve the requested assignment, no funds submitted with that request as may have been required under section 14.1 shall be refunded to Lessor.
14.3. Collateral Assignment. The City acknowledges that Lessor may be financing the acquisition and installation of the System with financing accommodations from one or more Lenders and that Lessor’s obligations under the financing documents may be secured by, among other collateral, a pledge or collateral assignment of Lessor’s rights under this Lease and a personal property security interest in the System subject to the senior priority of the Senior Security Documents as set forth in section 4 of the SLA.
Lessor may assign its personal property interest in the System, including Lessor’s rights under this Lease, as security for loans or financing of the System including a System Lease with a System Lessor, subject to the requirements of section 4.1 of the SLA. The City if applicable, will work in good faith with Lessor and Lender to agree upon the documentation that may be required in connection with the financing. If a Lender requests additional or different terms and conditions, the City, if applicable, agree to consider such requests in good faith, but the City or the SPWB is not obligated to agree to any newly proposed terms and conditions contrary to the provisions in section 4 of the SLA if the City each in its sole judgment, determines that such changes are detrimental to the City.
14.4. Lessor’s Default Under Financing Agreements. Lessor agrees to request that any Lender notify the City in writing of any default of Lessor under any agreement with Lender regarding the System. If the Lender notifies the City that an event of default under the System Lease or other financing agreement has occurred and that the Lender 151
151 of 843
Equipment Lease for Battery Energy Storage Systems
8 has elected to exercise its rights and remedies thereunder or under any of the related security documents, then, upon the exercise of such rights and remedies, the Lender or any other qualified purchaser of, or successor to, the interests in a judicial or non-judicial foreclosure sale (a “Substitute Lessor”) shall be substituted for Lessor under this Lease, provided that the conditions in this section are satisfied. In that event, the City will continue to perform its obligations under this Lease in favor of the Substitute Lessor provided that such Substitute Lessor expressly acknowledges in writing that (i) it is assuming all rights, duties, and obligations of Lessor under this Lease and (ii) it agrees to cure all of Lessor’s defaults under this Lease existing at the time such Substitute Lessor assumes the rights, duties, and obligations of Lessor; and that the Lender has included in such notice supporting documentation sufficient to demonstrate to the reasonable satisfaction of the City that such proposed Substitute Lessor or designee has both the financial capacity and the technical ability to perform the duties and obligations required under this Lease at a level equal to or exceeding Lessor’s ability. If the City determines in its sole reasonable judgment that those standards are satisfied, the City shall approve such proposed Substitute Lessor or designee for the remaining Term and on the same terms and conditions contained in this Lease.
In the event the City determines in its sole reasonable judgment that the proposed Substitute Lessor or designee fails to meet the financial capacity and the technical ability to perform the duties and obligations required under this Lease or if the proposed Substitute Lessor has failed to satisfy the requirements of (i) and (ii) in the preceding paragraph, the City shall promptly give the Lender written notice of the City’s determination and Lender and Lessor shall be prohibited from making such assignment.
15. DEFAULT.
15.1. Events of Default. A default includes any of the following:
15.1.1. Failure of the City to pay the Rental Payments under the following circumstances, (i) if the City fails to pay the Rental Payments of for a period of sixty (60) calendar days or more, Lessor shall provide the City with a sixty (60) day notice to cure, (ii) the City may extend such cure period by thirty (30) calendar day increments by making one or more payments (“Cure Extension Payment”) to Lessor in the amount equal to the monthly payment that would have been due for such period had the City not been in breach, (iii) all Cure Extension Payments shall be credited against amounts otherwise due from the City, (iv) if the breach is not cured by the City during the cure period, as may be extended by the City, Lessor may terminate this Lease and the SLA upon expiration of such cure period, and (v) the City’s failure to pay as a result of the City not appropriating funding shall not be considered an event of default and shall not trigger the payment of damages of any kind;
15.1.2. Any representation or warranty made by a Party to this Lease proves to have been false or misleading in any material respect when made or if such representation or warranty is required to remain true in all material respects 152
152 of 843
Equipment Lease for Battery Energy Storage Systems
9 during the Term of this Lease, if the accuracy of the representation or warranty is not cured within fifteen (15) Business Days after written notice from the other Party;
15.1.3. Failure by a Party to perform any obligation set forth in this Lease (other than the events that are otherwise specifically covered as a separate event of default), and such failure is not cured within thirty (30) calendar days or other such period as specified in this Lease after receipt of written notice of default from the nondefaulting Party; or in the event of a default which cannot be cured within such thirty (30) calendar day period, if the defaulting Party has not commenced and diligently prosecuted such cure within thirty (30) calendar days of written notice and thereafter and diligently prosecuted to cure such default within sixty (60) calendar days after receipt of written notice of default from the non-defaulting Party.
15.1.4. A default by the City or Lessor under the SLA not cured within any applicable cure periods;
15.1.5. A Party makes an assignment or any general arrangement for the benefit of creditors; files a petition or otherwise commences, authorizes or acquiesces in the commencement of a proceeding or cause of action under any bankruptcy or similar law for the protection of creditors, or has such petition filed against it and such petition is not withdrawn or dismissed within twenty (20) Business Days after such filing; otherwise becomes bankrupt or insolvent, however evidenced; or is unable to pay its debts as they fall due; or
15.1.6. Unreasonable interference by Lessor with the operations of the City at the Facility, if the interference is curable by suspension of operation of the System and Contractor fails to suspend operation of the System within forty-eight (48) hours of the City’s notice to Lessor regarding the interference without good cause, as determined by the City.
15.2. Notice of Default. The non-defaulting Party shall provide the defaulting Party written notice of any alleged default hereunder, and such notice shall describe the alleged default.
Provided that Lessor has notified the City in writing of any Lender and such Lender’s name and address, a notice of default shall only be effective if and when the nondefaulting Party also gives such Lender a copy of such notice.
15.3. Exclusivity. The City grants Lessor exclusivity to provide BESS at the Committed Sites during the Term. The City reserves all rights regarding any Optional Site unless and until an NTP is issued.
15.4. Remedies for Default. A Party may terminate this Lease if the other Party is in default of this Lease and such default is not cured within the periods specified in this section 15.
Except as expressly stated otherwise in this Lease, the rights and remedies granted to the Parties pursuant to this Lease shall be the sole and exclusive remedies for a failure of a Party to perform its obligations hereunder. If the default is also a default under the SLA, 153
153 of 843
Equipment Lease for Battery Energy Storage Systems
10 the non-defaulting party shall have the rights and benefit of all default provisions and remedies provided for therein.
15.4.1. System Removal. Promptly after notice of termination, Lessor shall fulfill its obligations in accordance with section 11.1 of the SLA.
15.4.2. City Self Help. In the event of default by Lessor, the City may offset Rent payments due to Lessor for the purpose of recovering costs or fees for Lessor’s performance obligations,
15.4.3. City Option to Retain System on Lessor Default. In the event Lessor defaults on this Lease and such default is not cured within the time permitted by this Lease, the City has the option to obtain clear title and exclusive possession of the System pursuant to section 11.4 of the SLA.
15.5. Lender’s Rights. In the event of a default by Lessor under this Lease, Lenders shall have the same rights as provided in the SLA. The City shall not take any action to terminate this Lease because of any default or breach by Lessor if any Lender, within thirty (30) calendar days after service of written notice, adheres to the procedures set forth for Lender’s Rights in the SLA.
15.6. Lessor’s Remedies. If any default by the City shall continue uncured following notice of default as required by this Lease, Lessor’s sole remedies are the following:
15.6.1. Lessor’s Termination of Lease. Except as specifically provided otherwise in this Lease, if the City defaults under this Lease, Lessor shall have the right to terminate this Lease. Upon any termination of this Lease under this subsection, the City shall execute such documents as Lessor may request to memorialize the termination and to release Lessor from the terms and conditions of this Lease.
15.6.2. Actual Damages. If Lessor elects to terminate this Lease due to the City’s default, Lessor shall fulfill its obligation under section 11.1 of the SLA and thereafter the City shall pay Lessor Actual Damages due as defined in section 15.5.4. The payment of Actual Damages shall be the sole remedy available to Lessor under this Lease and the SLA for a default by the City.
15.6.3. Removal of System. Upon termination of this Lease for default of the City, Lessor shall remove the System and restore the Licensed Area to its original condition, less normal wear and tear, pursuant to section 11.1 of the SLA. After Lessor has removed the System and restored the Licensed Area, the City shall pay Lessor Actual Damages as defined in section 15.5.4 following City’s acceptance of the removal of the System and restoration of the Licensed Area.
15.6.4. For the purpose of this Lease, the term “Actual Damages” shall mean those amounts set forth in the schedule attached as Exhibit T to the SLA. 154
154 of 843
Equipment Lease for Battery Energy Storage Systems
11 15.6.5. Any uncured default by either Party under the Master Agreement, Solar EPC Agreement or this Lease shall constitute a default under the other, and remedies may be exercised cumulatively. In any conflict, the hierarchy in §8 of the Master Agreement (Agreement > Exhibits, except Exhibits C & D) shall apply.
16. Lessor Indemnity. Lessor shall indemnify, defend, and hold harmless the City, the Court, and their respective judicial officers, officers, agents, and employees from and against any claims, damages, or expenses, including an amount equal to reasonable attorneys’ fees, and liabilities arising out of or in any way connected with this Lease for claims, damages, expenses, or liabilities for loss or damage to any property, or for any death or injury to any person or persons in proportion to and to the extent that such claims, damages, expenses, or liabilities arising from the negligence or willful acts or omissions of Lessor, or its officers, agents, employees, assigns, and successor.
17. OTHER TERMS AND CONDITIONS
17.1. Approval. This Lease is of no force or effect until signed by both Lessor and the City and, if applicable, is approved by the SPWB, and the SLA has been duly executed and approved. Lessor may not commence performance until such approvals have been obtained.
17.2. Taxes. Lessor, its successor, and assigns shall pay all taxes, including possessory interest or other tax, assessments, or charges that may at any time be levied upon any interest in System or this Lease. The City will not pay municipal energy or utility users’ taxes or franchise fees to Lessor. The City’s Rental Payment shall be Lessor’s sole remuneration for the Lease.
17.3. Notices. Except as otherwise expressly provided in this Lease, all notices and other communications to be given or made under this Lease shall be in writing and shall be personally delivered (including by means of professional messenger service) or sent by overnight courier, or sent by registered or certified mail, postage prepaid, return receipt requested to the addresses set forth below. Notices may also be delivered by electronic mail to the email address indicated below provided that the originator verifies that recipient has received such notice and originator delivers a copy of such notice to recipient using the means in the first sentence of this paragraph as soon as possible. All such notices or other communications shall be deemed received upon the earlier of:
(i) Personally delivered or sent by overnight courier, the date of delivery to the address of the person to receive such notice.
(ii) Mailed as provided above, on the date of receipt or rejection. (iii) Given by electronic email, when received by the other party if received between Monday through Friday between 9:00 a.m. and 5:00 p.m. so long as such day is not a State or federal holiday and otherwise, on the next day, provided that if the next day is a Saturday, Sunday, or a State or federal holiday, such notice shall be effective on the following Business Day.
155
155 of 843
Equipment Lease for Battery Energy Storage Systems
12 To Lessor:
LESSOR:
TITLE:
ADDRESS:
PHONE:
EMAIL:
Copy to Lender/System Lessor:
LENDER:
ADDRESS:
PHONE:
EMAIL:
To City:
_____________________________________________
ATTN:
TITLE:
ADDRESS:
PHONE:
EMAIL:
17.4. Lessor Certification. If Lessor is a different party from Licensee under the SLA, this Lease shall not be effective unless and until Lessor has executed Licensee’s Certifications, attached as Exhibit O to the SLA.
17.5. Recycling Certification. Lessor shall certify in writing under penalty of perjury, the minimum, if not exact, percentage of recycled content, both post-consumer waste and secondary waste as defined in the Public Contract Code, section 12153, et seq. (“State Agency Buy Recycled Campaign”), in materials, goods, or supplies offered or products used in the performance of this Agreement, regardless of whether the product meets the required recycled product percentage as defined in Public Contract Code sections 12200 et seq. Contractor may certify that the product contains zero recycled content (Public Contract Code section 12205).
17.6. Continued Operations. Lessor shall continue to fulfill its obligations under this Lease during the period of any dispute between the Parties.
17.7. Counterparts. This Lease may be executed in counterparts (including PDF copies), each of which shall be deemed an original as against the Party signing such counterpart and which together shall constitute one and the same instrument. The Parties agree that the signature pages of this Lease may be executed, scanned, and transmitted electronically and electronic signatures shall be deemed original signatures for purposes 156
156 of 843
Equipment Lease for Battery Energy Storage Systems
13 of this Lease, with such scanned and electronic signatures having the same legal effect as original signatures.
17.8. Authority. The signatories hereto represent and warrant that they are duly authorized on behalf of their respective entities to enter into and consummate this Lease.
LIST OF EXHIBITS
Exhibit A — System Description
Exhibit B — Payment Schedule
CITY’S SIGNATURE LESSOR’S SIGNATURE
LESSOR’S NAME (if Lessor is not an
individual person, state whether Lessor is a
corporation, partnership, etc.)
BY (Authorized Signature) @
?
BY (Authorized Signature)
?
PRINTED NAME AND TITLE OF PERSON SIGNING PRINTED NAME AND TITLE OF
PERSON SIGNING
DATE EXECUTED DATE EXECUTED
ADDRESS ADDRESS
@
157
157 of 843
Equipment Lease for Battery Energy Storage Systems
A-1
EXHIBIT A
SYSTEM DESCRIPTION
SYSTEM DESCRIPTION (SCOPE OF WORK):
Lessor shall be solely responsible for all work required to complete the Project including but not limited to:
(a) Project management includes design, engineering, submittals, construction, interconnection, and commissioning.
(b) Procurement of all materials and equipment.
(c) Design and engineering include civil, structural, electrical, and fire protection requirements.
(d) Permitting and compliance with the current version of all applicable codes and standards. (e) Distribution Utility interconnection requirements.
(f) Site preparations
(g) Meters, and monitoring
(h) Performance analysis for the BESS
(i) Conformance of manufacturers’ installation requirements and warranty terms (j) Acceptance testing, commissioning, interconnection and Permission to Operate (“PTO”) by the Distribution Utility
(k) Construction closeout including punch list, as-built drawings and documents package, and site cleanup.
(l) Operation and maintenance.
158
158 of 843
Equipment Lease for Battery Energy Storage Systems
A-2
SITE DESCRIPTION
Particulars Project-1 Project-2
Project Name: Fire Station 2 Fire Station 3
System Location: 285 Agate Street, Laguna
Beach, CA 92651
2900 Alta Laguna Boulevard,
Laguna Beach, CA 92651
Proposed Power Capacity
(kW):
11.50 7.60
Proposed Energy Capacity
(kWh): 189 95
Utility: SCE SCE
Expected BESS OEM(s): Tesla or Equivalent Tesla or Equivalent Facility and System Layout Attached at Annexure-1 to
Exhibit A
Attached at Annexure-2 to
Exhibit A
Notes for Equipment Make/Specification: It is important to note that equipment makes and models are subject to change based on market availability at the time of procurement. In such cases, any replacements will be chosen to be at least similar or superior in technical specifications and warranty terms and approved by the Owner prior to procurement.
159
159 of 843
Equipment Lease for Battery Energy Storage Systems
A-3
Annexure-1 to Exhibit A
(System Layout – Fire Station 2)
160
160 of 843
Equipment Lease for Battery Energy Storage Systems
A-4
Annexure-2 to Exhibit A
(System Layout – Fire Station 3)
161
161 of 843
EXHIBIT B
PAYMENT SCHEDULE
Payment Schedule for Fire Station 2
Project Site Name Fire Station 2
Project Site Address 285 Agate Street, Laguna
Beach, CA 92651
Battery Energy Storage System (BESS)
Rated Power (kW) 11.5kW
BESS Energy Storage Capacity (kWh) 189kWh
Monthly Lease Payment ($/month/kW) $ 196.73/month/kW
End Lease Term Termination Value ($) $ 44,372
Year Monthly Lease Payment
($/mo)
Annual Lease Payment
($/yr)
1 $ 2,262 $ 27,148
2 $ 2,262 $ 27,148
3 $ 2,262 $ 27,148
4 $ 2,262 $ 27,148
5 $ 2,262 $ 27,148
6 $ 2,262 $ 27,148
7 $ 2,262 $ 27,148
8 $ 2,262 $ 27,148
9 $ 2,262 $ 27,148
10 $ 2,262 $ 27,148
11 $ 2,262 $ 27,148
12 $ 2,262 $ 27,148
13 $ 2,262 $ 27,148
14 $ 2,262 $ 27,148
15 $ 2,262 $ 27,148
16 $ 2,262 $ 27,148
17 $ 2,262 $ 27,148
18 $ 2,262 $ 27,148
19 $ 2,262 $ 27,148
20 $ 2,262 $ 27,148
162
162 of 843
Payment Schedule for Fire Station 3
Project Site Name Fire Station 3
Project Site Address 2900 Alta Laguna Boulevard,
Laguna Beach, CA 92651
Battery Energy Storage System (BESS)
Rated Power (kW) 7.6kW
BESS Energy Storage Capacity (kWh) 95kWh
Monthly Lease Payment ($/month/kW) $ 152.23/month/kW
End Lease Term Termination Value ($) $ 22,690
Year Monthly Lease Payment
($/mo)
Annual Lease Payment
($/yr)
1 $ 1,157 $ 13,883
2 $ 1,157 $ 13,883
3 $ 1,157 $ 13,883
4 $ 1,157 $ 13,883
5 $ 1,157 $ 13,883
6 $ 1,157 $ 13,883
7 $ 1,157 $ 13,883
8 $ 1,157 $ 13,883
9 $ 1,157 $ 13,883
10 $ 1,157 $ 13,883
11 $ 1,157 $ 13,883
12 $ 1,157 $ 13,883
13 $ 1,157 $ 13,883
14 $ 1,157 $ 13,883
15 $ 1,157 $ 13,883
16 $ 1,157 $ 13,883
17 $ 1,157 $ 13,883
18 $ 1,157 $ 13,883
19 $ 1,157 $ 13,883
20 $ 1,157 $ 13,883
163
163 of 843
EXHIBIT C
PROJECT MILESTONE REQUIREMENTS
Preliminary Project Construction Schedule
Task
ID Task Name Duration Finish
1 Notice to Proceed (NTP) 0 Weeks Dec 31, 2025
2 50% drawings due to Site Host 6 Weeks Feb 11, 2026
3 100% drawings due to Site Host 4 Weeks Mar 11, 2026
4 Major Equipment Order Date 2 Weeks Mar 25, 2026
5 Permit Received 36 Weeks Dec 02, 2026
6 Construction Start/Battery on Site 10 Weeks Feb 10, 2027 7 Electrical & Mechanical Completion 4 Weeks Mar 10, 2027 8 Interconnection Sign-off 2 Weeks Mar 24, 2027
9 Testing & Commissioning Completion 1 Weeks Mar 31, 2027 10 Utility Meter and Rate Switch Submittal 1 Weeks Apr 07, 2027 11 Permission to Operate Date 4 Weeks May 05, 2027
12 Final Project Completion Date 2 Weeks May 19, 2027
a) Overall Schedule: The table above shows our High-Level critical path schedule. Many details have been omitted for ease of use and appropriate abstraction. The schedule shall be adjusted based on the actual Notice to Proceed issued by Owner to Contractor to start the project activities. b) This timeline is subject to change based on unforeseen circumstances, such as regulatory delays or technical challenges (if any). The timeline is applicable based on assumptions that we have the NTP as per the above schedule.
164
164 of 843
EXHIBIT D
SITE LICENSE AGREEMENT
165
165 of 843
SITE LICENSE AGREEMENT FOR BATTERY ENERGY STORAGE SYSTEM (“SYSTEM”)
AGREEMENT NUMBER: __________________
(Licensee)
FOR THE LICENSED AREA LOCATED AT
(SITE) _______________, (CITY) ______________, CA, (ZIP) ____ DATED: ___________, 20___
166
166 of 843
i
TABLE OF CONTENTS
1. EXHIBITS, DEFINITIONS, AND COMPLIANCE WITH THE LEASE ..................1
1.1. EXHIBITS. ............................................................................................................1
1.2. DEFINITIONS........................................................................................................2
1.3. COMPLIANCE WITH LEASE, INCLUDING REMEDIES.............................................2
2. TERM..................................................................................................................................3
2.1. TERM.. .................................................................................................................... 3
2.2. NO POST-TERMINATION USE RIGHT. ..................................................................3
3. GRANT OF LICENSE AND PERMITTED AND PROHIBITED USE......................3
3.1. PERMITTED USE AND MAINTENANCE OF LICENSED AREA. .................................3
3.2. NO CITY WARRANTIES. .....................................................................................3
3.3. LICENSEE WAIVER ..............................................................................................3
3.4. LIMITATION ON USE.. ..........................................................................................5
3.5. PROHIBITED USES. ..............................................................................................5
3.6. PERMITTEES ACCESS...........................................................................................5
3.7. LICENSE AREA SIGNAGE AND LIGHTING. ..........................................................5
3.8. SECURITY. ...........................................................................................................6
3.9. NO INTERFERENCE/QUIET ENJOYMENT..............................................................6
3.10. APPLICABLE LAWS AND REGULATIONS...............................................................6
3.11. HAZARDOUS MATERIAL. .....................................................................................6
3.12. VIOLATION OF LAW.............................................................................................9
3.13. NO INFRINGEMENT............................................................................................10
3.14. AIR QUALITY – DUST CONTROL PLAN................................................................ 10
4. LICENSEE NON-ENCUMBRANCE IN FACILITY, SITE AND LICENSED AREA, SUBORDINATION............................................................................................10
4.1. NON-ENCUMBRANCE AND SUBORDINATION TO SENIOR SECURITY DOCUMENTS. ........................................................................................................ 10
4.2. LICENSEE PERSONAL PROPERTY SECURITY INTEREST...................................... 11
4.3. NO LIEN IN LICENSED AREA..............................................................................11
5. SLA AND SYSTEM ASSIGNMENT AND FINANCING...........................................11
5.1. SLA ASSIGNMENT. ............................................................................................11
5.2. CITY APPROVAL...............................................................................................12
5.3. SYSTEM FINANCING...........................................................................................12
5.4. COLLATERAL ASSIGNMENT...............................................................................13
5.5. CITY CONSENT AND ESTOPPEL CERTIFICATE..................................................13
5.6. LICENSEE’S DEFAULT UNDER FINANCING AGREEMENTS..................................13
6. OWNERSHIP OF SYSTEM...........................................................................................14
6.1. TITLE TO SYSTEM..............................................................................................14 167
167 of 843
ii
6.2. FILINGS. ............................................................................................................14
6.3. SECURITY INTERESTS IN SYSTEM. .....................................................................15
6.4. NO FIXTURE. .....................................................................................................15
6.5. NO RECORDING. ................................................................................................15
6.6. EXISTING LIENS.................................................................................................15
7. DESIGN REQUIREMENTS; CONDITIONS PRECEDENT ....................................15
7.1. GENERAL...........................................................................................................15
7.2. CEQA COMPLIANCE.........................................................................................15
7.3. SYSTEM REQUIREMENTS ...................................................................................15
7.4. PERMITS. ...........................................................................................................16
7.5. SYSTEM DESIGN AND PLAN APPROVAL .............................................................16
7.6. RESERVED. ........................................................................................................17
7.7. TRANSACTION FEES. ..........................................ERROR! BOOKMARK NOT DEFINED.
7.8. FORM OF SUBMITTALS. .....................................................................................17
7.9. ASSOCIATED AGREEMENTS ...............................................................................17
8. SYSTEM CONSTRUCTION; INSTALLATION; OPERATION AND
MAINTENANCE.............................................................................................................18
8.1. CITY APPROVAL...............................................................................................18
8.2. CONSTRUCTION START DATE............................................................................18
8.3. COMPLETION OF SYSTEM..................................................................................19
8.4. EXTENSIONS OF DATES......................................................................................19
8.5. LIQUIDATED DAMAGES FOR DELAY.. ................................................................19
8.6. NOTICE OF COMMERCIAL OPERATION DATE (COD)........................................19
8.7. PUNCH LIST.......................................................................................................19
8.8. PROJECT MANUAL. ...........................................................................................20
8.9. ALTERATIONS....................................................................................................20
8.10. INSPECTION OF SYSTEM. ...................................................................................20
8.11. AS-BUILT DRAWINGS. .......................................................................................20
8.12. SYSTEM DESIGN AND INSTALLATION PROCESS AND MILESTONES. ...................20
8.13. NO CITY RESPONSIBILITY................................................................................21
8.14. LICENSEE LIABILITY FOR DAMAGE TO FACILITY OR SITE................................21
8.15. PREVAILING WAGE. ..........................................................................................21
8.16. OPERATIONS AND MAINTENANCE. ....................................................................21
8.17. SYSTEM MALFUNCTIONS, SHUTDOWNS, AND EMERGENCIES............................23
8.18. SYSTEM SHUTDOWNS. .......................................................................................24
9. INSURANCE....................................................................................................................25
9.1. NO CITY OBLIGATION TO INSURE....................................................................25
9.2. LICENSEE’S INSURANCE OBLIGATIONS. ............................................................25
9.3. MINIMUM SCOPE OF INSURANCE......................................................................... 26
9.4. MINIMUM LIMITS OF INSURANCE......................................................................26
9.5. DEDUCTIBLES AND SELF-INSURED RETENTIONS. ..............................................27
9.6. SUBCONTRACTOR(S)..........................................................................................27
9.7. EARTHQUAKE....................................................................................................27 168
168 of 843
iii
9.8. OTHER INSURANCE PROVISIONS .......................................................................28
10. CITY OBLIGATIONS ....................................................................................................29
10.1. GENERAL...........................................................................................................29
10.2. NOTICE OF DAMAGE..........................................................................................29
10.3. LIENS.................................................................................................................29
10.4. ESTOPPEL CERTIFICATE. ..................................................................................29
10.5. NO RELOCATION ASSISTANCE...........................................................................29
11. REMOVAL OF SYSTEM AND RESTORATION OF LICENSED AREA..............29
11.1. SYSTEM REMOVAL AND LICENSED AREA RESTORATION. .................................29
11.2. SECURITY FOR SYSTEM REMOVAL. ....................ERROR! BOOKMARK NOT DEFINED.
11.3. END OF TERM; CITY PURCHASE OPTION. ........................................................30
11.4. CITY OPTION TO RETAIN SYSTEM ON LICENSEE DEFAULT..............................30
11.5. CLEAR TITLE.....................................................................................................30
12. PURCHASE OPTION, RIGHT OF FIRST OFFER AND FIRST REFUSAL .........31
12.1. PURCHASE OPTION............................................................................................31
12.2. RIGHT OF FIRST OFFER AND FIRST REFUSAL....................................................31
12.3. CITY’S FAILURE TO EXERCISE ITS RIGHT OF FIRST REFUSAL.........................31
12.4. CITY ACCEPTANCE. .........................................................................................31
12.5. ASSIGNMENT OF LICENSEE CONTRACTS TO CITY............................................31
12.6 SYSTEM LESSOR. ……………………………………………………………….. 38
13. DEFAULTS AND REMEDIES ......................................................................................32
13.1. EVENTS OF DEFAULT............................................................................................ 32
13.2. NOTICE OF DEFAULT.........................................................................................33
13.3. REMEDIES FOR DEFAULT. .................................................................................33
13.4. THE CITY’S REMEDIES.....................................................................................33
13.5. LENDER’S RIGHTS................................................................................................ 34
13.6. LICENSEE’S REMEDIES......................................................................................35
14. EARLY TERMINATION...............................................................................................36
14.1. CITY’S EARLY TERMINATION RIGHTS.............................................................36
14.2. LICENSEE EARLY TERMINATION RIGHTS..........................................................36
14.3. EARLY TERMINATION DUE TO FORCE MAJEURE. .............................................37
14.4. PERMANENT SHUTDOWN OF THE FACILITY.......................................................37
14.5. FUNDING AVAILABILITY.....................................ERROR! BOOKMARK NOT DEFINED.
15. GENERAL TERMS AND CONDITIONS ....................................................................38
15.1. INSPECTIONS. ....................................................................................................38
15.2. MECHANIC’S LIEN / STOP NOTICES – REMOVAL OF LIENS. ..............................38
15.3. PROTECTION OF FACILITY, SITE AND LICENSED AREA. ....................................38
15.4. FACILITY RE-ROOFING (IF ROOF-MOUNTED SYSTEM).......................................39
15.5. LOSSES/DAMAGES. ............................................................................................39
15.6. HEALTH AND SAFETY. .......................................................................................39 169
169 of 843
iv
15.7. CITY SYSTEM REPAIR COSTS...........................................................................39
15.8. DAMAGE COVERED BY INSURANCE. ..................................................................39
15.9. CONDEMNATION................................................................................................40
15.10. LIMITATION ON LIABILITY AND LICENSEE INDEMNIFICATION..........................40
16. OTHER TERMS AND CONDITIONS .........................................................................41
16.1. NOTICES................................................................................................................ 41
16.2. AMENDMENT. ....................................................................................................42
16.3. NOTIFICATION OF CHANGE IN PARTIES.............................................................42
16.4. TAXES................................................................................................................42
16.5. AUDIT. ...............................................................................................................42
16.6. INTEGRATION OF EXHIBITS. ..............................................................................42
16.7. RESERVED .........................................................................................................42
16.8. LIMITED EFFECT OF WAIVER............................................................................42
16.9. SURVIVAL OF OBLIGATIONS. .............................................................................42
16.10. RELATIONSHIP OF PARTIES. ..............................................................................43
16.11. INDEPENDENT STATUS.......................................................................................43
16.12. SUCCESSORS AND ASSIGNS.. ..............................................................................43
16.13. LICENSEE CERTIFICATIONS...............................................................................43
16.14. NON-DISCRIMINATION. .....................................................................................43
16.15. EMPLOYMENT OF UNDOCUMENTED ALIENS......................................................44
16.16. CHILD SUPPORT COMPLIANCE ACT. .................................................................44
16.17. DISPUTE RESOLUTION. ......................................................................................44
16.18. SEVERABILITY; UNENFORCEABLE PROVISION.. ................................................44
16.19. GOVERNING LAW.. ............................................................................................45
16.20. PRESS RELEASES.. .............................................................................................45
16.21. CONFIDENTIALITY OF INFORMATION ................................................................45
16.22. ENDORSEMENT. .................................................................................................46
16.23. COVENANT AGAINST GRATUITIES.....................................................................46
16.24. NO CONFLICT WITH THE SLA...........................................................................46
16.25. COUNTERPARTS.................................................................................................47
16.26. TIMELINESS.......................................................................................................47
16.27. AUTHORITY .......................................................................................................47 170
170 of 843
Site License Agreement for Battery Energy Storage System Site License Agreement (SLA) 1
[Insert Info]
SITE LICENSE AGREEMENT
This SITE LICENSE AGREEMENT (“SLA”) is dated _________ __, 20__ for reference purposes only and is by and among the City of Laguna Beach (the “City” or “Licensor”) and _____________________________ (“Licensee”). The Parties agree as follows:
W I T N E S S E T H:
WHEREAS, the City of Laguna Beach (“City”) owns the property located at (i) Fire Station 2 (285 Agate Street, Laguna Beach, CA 92651) and (ii) Fire Station 3 (2900 Alta Laguna Boulevard, Laguna Beach, CA 92651), in the City of Laguna Beach, County of Orange, State of California (the “Site” or “Sites”); and
WHEREAS, pursuant to the Government Code section _____________, the City is empowered by the California Legislature to “exercise full responsibility, jurisdiction, control, and authority as an owner and is thereby authorized to enter into this License; and WHEREAS, Licensee desires to obtain, and the City desires to provide, a non-exclusive revocable license (the “License”) to use a designated area of the Sites (the “Licensed Area” or “Licensed Areas”) to install, construct, maintain, and operate the Systems, which area is more fully defined and described in Exhibit B; and
WHEREAS, upon completion of construction of the Systems, , Licensee has agreed to operate and maintain the Systems under the terms and conditions set forth herein; and WHEREAS, Licensee and City, have this same date entered into an Equipment Lease for BESS (“Lease”) for Licensee’s lease of the Systems to the City, NOW, THEREFORE, in consideration of the above recitals and mutual promises set forth below, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:
1. Exhibits, Definitions, And Compliance With the Lease
1.1. Exhibits. The following is a list of Exhibits to this SLA:
Exhibit A – Definitions
Exhibit B – Depiction of Licensed Areas
Exhibit C – Reserved
Exhibit C-1 – Reserved
Exhibit C-2 – Reserved
Exhibit D – Reserved
Exhibit E – Licensee Access Procedures
171
171 of 843
Site License Agreement for Battery Energy Storage System Site License Agreement (SLA) 2
[Insert Info]
Exhibit F – Design and Installation Process and Milestone Schedule Exhibit G – Prevailing Wage Certification
Exhibit H – Prevailing Wage and Labor Requirements
Exhibit I – As-Built Drawings and Other Technical Documents and Specifics Exhibit J – Reserved
Exhibit K – Reserved
Exhibit L – Form of Lender Estoppel Certificate for Financing Exhibit M – Form of City Estoppel Certificate
Exhibit N – Reserved
Exhibit O – Licensee Certifications
Exhibit P – Reserved
Exhibit Q – Reserved
Exhibit R – Reserved
Exhibit S – Reserved
Exhibit T – Contract Termination Schedule
Exhibit U – Reserved
1.2. Definitions. Except as specifically provided to the contrary in this SLA, or unless the context clearly requires otherwise, the capitalized terms in this SLA (including any exhibits, attachments, and appendices) shall have the meanings set forth in Exhibit A.
1.3. Compliance with Lease, including Remedies. The Lease is hereby incorporated by reference into this SLA. In particular, any default by Licensee, as applicable, under the Lease, shall be deemed a default by Licensee under this SLA, and the provisions in the Lease regarding the Parties’ default, termination, and remedies shall also apply to this SLA. Should any provision, term, or requirement in this SLA be in conflict with any provision, term, or requirement in the Equipment Lease for BESS, the following order of control shall apply: (i) Master Agreement; (ii) BESS Lease; (iii) this SLA; (iv) Solar EPC Agreement. A default by either Party under the Master Agreement, Solar EPC Agreement, or BESS Lease is a default under this SLA, and vice-versa..
172
172 of 843
Site License Agreement for Battery Energy Storage System Site License Agreement (SLA) 3
[Insert Info]
2. TERM
2.1. Term. The Initial Term shall commence on the Effective Date and continue for a period of twenty (20) years after the Commercial Operation Date (“Term”), unless terminated earlier pursuant to the provisions in this SLA. The “Termination Date” is the date on which this SLA terminates. In the event of termination of the Lease, this SLA shall be deemed to terminate as of the same date.
2.2. No Post-Termination Use Right. This SLA shall terminate as of the Termination Date without any further notice thereof by the City, and Licensee shall have no right to use the Licensed Area after the Termination Date except as expressly provided in this SLA, including but not limited to section 11.1.
3. GRANT OF LICENSE AND PERMITTED AND PROHIBITED USE
3.1. Permitted Use and Maintenance of Licensed Area. The City grants to Licensee, and its agents, employees, subcontractor(s), and authorized successors and assigns (collectively the “Permittees,” each a “Permittee”) a non-exclusive and revocable limited license (the “License”) to enter upon and use the Licensed Area, together with the right of ingress and egress to and from, under, over, and across the Licensed Area, for the construction, maintenance, and operation of the System _______________________________________ under the provisions of this SLA and the Lease and for no other use or purpose (the “Permitted Use”). In no event shall Licensee’s Permitted Use of the Licensed Area upon which a System is located interfere in any way with Court’s ingress and egress to and from and ongoing use of the parking and driveway areas within the Licensed Area.
Licensee shall maintain the Licensed Area, or cause the Licensed Area to be maintained, in a commercially reasonable manner, at its sole expense, in order to maximize the functionality of the System. Notwithstanding the foregoing, Licensee may not remove any trees without the City’s prior written approval. Licensee shall have no expectation of the City’s maintenance of the Licensed Area for vegetation management.
3.2. No City Warranties. Licensee acknowledges that the City has not made any statements or representations or warranties regarding the Licensed Area’s fitness, including existing conditions of any improvements or underground utility locations and subsurface ground conditions, for the Permitted Use, and Licensee agrees that it is not relying upon any statement or representation or warranty by the City or any third party regarding the Licensed Area, the fitness of the Licensed Area for the Permitted Use or any other matter. Licensee acknowledges and accepts the Licensed Area in “As-Is Where-Is” condition. Licensee has had an opportunity to inspect the Licensed Area and every aspect thereof and represents to the City that the Licensed Area is in a condition acceptable to Licensee for the Permitted Use.
3.3. Licensee Waiver. The City hereby expressly disclaims and Licensee hereby waives all implied warranties regarding the Licensed Area including, without 173
173 of 843
Site License Agreement for Battery Energy Storage System Site License Agreement (SLA) 4
[Insert Info]
limitation, any warranty of merchantability or warranty of fitness for a particular use or purpose and accepts the Licensed Area, “As-Is, Where-Is.” Licensee hereby initials this section to verify this waiver.
Initials
3.3.1 Lead-based Paint Disclaimer. Except as disclosed by the City, Licensee, by acceptance of this SLA, is hereby notified and informed and shall assume that the Licensed Area contains lead-based paint. Licensee shall be prepared to perform localized abatement in the Licensed Area.
Licensee accepts the Licensed Area in its “As-Is, Where-Is” condition and shall hold harmless, indemnify, and defend the State, the City, and Court, their officers, agents, and employees from all liability, damages, claims which may occur to any real or personal property or persons by the presence of any lead-based paint currently in or at the Licensed Area. If lead-based paint containment and/or removal will be required as a result of Licensee’s installation of the System, Licensee shall not install the System until all lead-based paint containment and/or removal work is performed and certified as completed by a licensed lead-based paint contractor approved by the City in accordance with Article 3.11. Licensee shall submit copies of the certification of completion of any and all leadbased paint work to the City pursuant to the Notice provisions in section
16.1 prior to the installation of the System at the Licensed Area.
If checked by the City, Licensee hereby initials this section to verify its agreement with this provision.
Initials
3.3.2 Asbestos Disclaimer. Except as disclosed by the City, Licensee, by acceptance of this SLA, is hereby notified and informed and shall assume that the Licensed Area contains asbestos. Licensee shall be prepared to perform localized abatement in the Licensed Area. Licensee accepts the Licensed Area in its “As-Is Where-Is” condition and shall hold harmless, indemnify, and defend the State, the City, and the Court, their officers, agents, and employees from all liability, damage, losses, and claims which may occur to any real or personal property or persons by the presence of any asbestos currently in or at the Licensed Area. If asbestos containment and/or removal will be required as a result of Licensee’s installation of the System, Licensee shall not install the System until all asbestos containment and/or removal work is performed and certified as completed by a licensed asbestos contractor approved by the City in accordance with Article 3.11. Licensee shall submit copies of the certification of completion of any and all asbestos work to the City pursuant to the Notice provisions in section 16.1 prior to the installation of the System.
X
X
174
174 of 843
Site License Agreement for Battery Energy Storage System Site License Agreement (SLA) 5
[Insert Info]
If checked by the City, Licensee hereby initials this section to verify this indemnity and agreement.
Initials
3.3.3 Licensee Remediation. If subsurface conditions, material, lead, or asbestos is found that was not disclosed by the City to Licensee before the Effective Date, the Parties agree that Licensee shall be responsible for such remediation and the work shall be considered an Additional Project Expense as listed in the Lease. If remediation is required, then the milestone dates set forth for design and construction in Exhibit F, shall be adjusted for the time required by Licensee to complete the remediation.
3.4. Limitation on Use. Licensee and Permittees shall use the Licensed Area for the Permitted Use only. Licensee shall not permit or suffer any other use of the Licensed Area or any part thereof by parties or persons other than Permittees, or provide the System for the use by parties or persons other than Permittees without first obtaining the City’s prior written consent. No change or Alteration to the Licensed Area, System, or Permitted Use may be made by Licensee without the prior written approval of the City and the SPWB.
3.5. Prohibited Uses. Licensee shall not use or allow the Licensed Area to be used for any improper, immoral, or unlawful purposes, nor shall Licensee cause, maintain, or permit any nuisance in, on, or about the Licensed Area. Licensee will not use or allow the Licensed Area to be used for any purpose inconsistent with the Permitted Use or other terms of this SLA or the Lease. Licensee will comply with all policies, rules, and regulations (collectively the “Regulations”) adopted by the City for the Licensed Area. Such Regulations shall include, but not be limited to, any laws, regulations, policies, or orders pertaining to the Covid-19 pandemic, as well as the prohibition against the possession or use of firearms, liquor, or illegal drugs. Any violation of said Regulations may be grounds for immediate termination of this SLA and the Lease, and removal of Licensee; Licensee shall have the right to remove the System pursuant to section 11.1 of this SLA. Upon such removal of the System, Licensee shall have no further right to use the Licensed Area and the City shall not have any obligation to pay Licensee Actual Damages.
3.6. Permittees Access. Permittees’ access to the Licensed Area shall be subject to access procedures as set forth in Exhibit E (License Access Procedures). Only Permittees shall be permitted access to the Licensed Area; provided that Lender and its employees and agents (all as agents of Licensee) shall have access to the Licensed Area once during each calendar year to inspect the System, subject to the same access requirements as Licensee.
3.7. License Area Signage and Lighting. Licensee shall not erect or install any signage or exterior lighting within the License Area without the prior written X
175
175 of 843
Site License Agreement for Battery Energy Storage System Site License Agreement (SLA) 6
[Insert Info]
approval of the City which shall be at the sole discretion of the City and shall not be withhold.
3.8. Security. Licensee shall at all times keep the Licensed Area and all areas of construction and operation adequately secured for safety and security purposes.
Licensee shall coordinate with City and the Court and comply with all Site security requirements when accessing the Licensed Area as provided in this SLA. Licensee hereby acknowledges that neither the City nor the Court shall have any obligation whatsoever to provide guard services or other security measures for the benefit of Licensee. Licensee assumes all responsibility for the protection of Permittees, the System, and other personal property of Licensee and of Licensee’s subcontractor(s), agents, and invitees from acts of third parties.
3.9. No Interference/Quiet Enjoyment. Licensee shall ensure that use of the Licensed Area for the Permitted Use will not obstruct or interfere with the City’s or Court’s use of the Licensed Area, the Site, the Facility, or the rights of any other occupants of the Licensed Area, the Site, or the Facility. Licensee will not injure or annoy any occupants of the Licensed Area, the Site, or the Facility. Such interference shall constitute a default of this SLA. In the event interference occurs, Licensee agrees to take all reasonable steps necessary to eliminate such interference as promptly as possible upon written notice thereof by the City. The City reserves to itself all rights in the Licensed Area, including but not limited to, the right to construct, reconstruct, modify, or make alterations to the Licensed Area, so long as the exercise of such retained rights do not unreasonably interfere with the Permitted Use, provided that City’s construction, repair, or expansion activities shall not be deemed interference so long as the City uses commercially reasonable efforts to minimize disruption.
3.10. Applicable Laws and Regulations. All activities conducted by Licensee pursuant to this SLA shall be in compliance with all Applicable Laws and shall be conducted at Licensee’s own cost and expense. Interpretation and enforcement of the terms of this SLA and the Lease shall be governed by California law. Any contract entered into by Licensee for work to be performed pursuant to this License shall incorporate this section and shall require that subcontractors comply with all Applicable Laws.
3.11. Hazardous Material.
3.11.1 General. Licensee agrees to comply with all Applicable Laws pertaining to the use, storage, transportation, and disposal of Hazardous Material at the Licensed Area. Licensee shall indemnify, defend, and hold harmless the State, the City, and the Court, including their officers, agents, representatives, and employees from any and all liabilities and costs (including any and all sums paid for settlement of claims, litigation, expenses, attorneys’ fees, consultant and expert fees) of whatever kind or nature, known, or unknown, resulting from any violation of Applicable 176
176 of 843
Site License Agreement for Battery Energy Storage System Site License Agreement (SLA) 7
[Insert Info]
Laws caused by Licensee or Licensee’s representatives. In addition, Licensee shall reimburse the City for any and all costs related to investigation, clean up and/or fines incurred by the City for noncompliance with Applicable Laws that are caused by Licensee or Licensee’s representatives. The City reserves the right to inspect the Licensed Area for purposes of verifying compliance with Applicable Laws.
3.11.2 Cutting, Patching, and Repairing. Prior to any cutting or removing of existing materials, Licensee must ensure that a hazardous material survey has been completed on all materials disturbed by cutting or removing activities. Refer to section 3.11.3 Hazardous Materials for additional detail. By starting cutting or patching operations, the Licensee acknowledges completion of hazardous material survey results, completion of abatement requirements prior to cutting or removing, acceptance of existing conditions, and the responsibility to restore the cut and patched area to match the original conditions. (i) Licensee is responsible for all cutting, fitting, or patching required to complete the work or to make its parts fit together properly.
(ii) The cutting work shall be executed by methods that will avoid damage to surrounding areas and provides proper surface conditions to receive patching, repairing, and finish work. (iii) Surfaces shall be refinished to match adjacent finishes. For continuous surfaces, refinish to nearest intersection; for an assembly, refinish entire unit.
(iv) Licensee is responsible for providing supports to assure structural integrity of the surroundings, devices, and methods to protect other portions of the surroundings from damage.
(v) Licensee must not cut or otherwise alter the work of the City or any other Licensee except with the written consent of the City.
3.11.3 Hazardous Material Treatment. Prior to performing any work that would disturb the existing conditions (i.e., cutting, removing, etc.), the Licensee shall complete a hazardous material survey on all Hazardous Material that will be disturbed prior to the performance of the scope of work. The Licensee will be required to comply with the City’s Asbestos Management Plan and Hazardous Materials Management Process. The Licensee will review all test results prior to performing work. The Licensee will be responsible for soliciting and contracting with a licensed abatement contractor to perform abatement of 177
177 of 843
Site License Agreement for Battery Energy Storage System Site License Agreement (SLA) 8
[Insert Info]
hazardous material present in accordance with all regulatory requirements.
(i) Licensee must comply with all federal, State, County, and local laws, statutes, ordinances, and other regulations covering the use, storage, transportation, and disposal of any Hazardous Materials on the Project and must obtain all permits and pay all fees and taxes related thereto for all services and materials required to perform the Project.
(ii) Prior to commencing work to install the System, Licensee must submit to the City three (3) copies of a list of all Hazardous Materials expected to be used in the System or its installation.
Licensee must keep a copy of the list at the Site. This list must include but not be limited to any cleaners, solvents, paints, or explosive charges used in the installation of the System. Licensee must submit one (1) copy of OSHA Safety Data Sheet (“SDS”) for each material listed and must advise every person at or near the Site of these materials, of proper handling, and of proper action in case of accident or exposure.
(iii) Licensee must safely contain and store all its Hazardous Material, and in the event of spill or discharge, must immediately notify all required federal, State, County, and local agencies including the fire department. Licensee must protect personnel from exposure and provide treatment as necessary.
(iv) Licensee must immediately advise the City of any potentially Hazardous Material encountered at the Site and must take all necessary action to prevent exposure of personnel until the material is identified and proper action can be taken.
(v) Licensee must not store or use any Hazardous Material near air intakes or doors and windows serving persons on or off the Site without proper protection and safeguards to prevent exposure. (vi) Licensee must exercise all required precautions and safeguards in the storage, use, and disposal of Hazardous Materials. Nothing in this Article 3.11, “Hazardous Material,” relieves Licensee of responsibility for compliance with all applicable laws and statutes, or other provisions of this Agreement, particularly Licensee’s responsibility for damage and preservation of life and property.
(vii) The Licensee will be responsible for soliciting and contracting with a licensed abatement contractor to perform abatement of 178
178 of 843
Site License Agreement for Battery Energy Storage System Site License Agreement (SLA) 9
[Insert Info]
Hazardous Material present in accordance with all regulatory requirements.
3.11.4 Prohibited Hazardous Substance or Materials. Licensee is prohibited from, and will prohibit its Subcontractor(s), and their Subcontractor(s) from bringing onto the Site or using in the installation of the System, any Hazardous Material including, but not limited to, asbestos, asbestos containing material or product, polychlorinated biphenyls (PCB), lead contaminated material, or any substances that are regulated by any governmental entity. (i) Should the Licensee be required to utilize hazardous materials in the installation of the System it shall notify the City of its need to do so, and the Licensee shall comply with all applicable laws, ordinances, rules, regulations, and lawful orders of public authorities regarding the storage and/or use of explosives or other hazardous materials or equipment necessary for the installation of the System.
(ii) Licensee must comply with all federal, State, County and local laws, statutes, ordinances, and other regulations covering the use, storage, transportation, and disposal of any Hazardous Material on the Site, and must obtain all permits and pay all fees and taxes related thereto for all services and materials required to construct, install, operate, or maintain the System.
(iii) Licensee must exercise all required precautions and safeguards in the storage, use and disposal of Hazardous Material. Nothing in this Article 3.11, “Hazardous Material,” relieves Licensee of responsibility for compliance with all applicable laws and statutes, or other provisions of this Agreement, particularly Licensee’s responsibility for damage and preservation of life and property.
(iv) Licensee agrees to comply with City’s Asbestos Management Plan and Hazardous Materials Management Process.
3.12. Violation of Law. Licensee shall immediately suspend any use of the System upon notice by the CPUC, CEC, or any governmental authority having jurisdiction over any of Licensee’s activities under this SLA which constitutes notice of an alleged violation of any Applicable Laws until the violation, if any, is corrected and the applicable governmental authority determines that the violation is corrected.
Licensee shall immediately notify the City regarding any alleged violation. Failure of Licensee to immediately suspend use of the System and/or to notify the City in accordance with this provision after receiving a notice of a violation of any Applicable Laws or violations posing a risk to public health or safety may be 179
179 of 843
Site License Agreement for Battery Energy Storage System Site License Agreement (SLA) 10
[Insert Info]
grounds for termination by the City of this SLA with no obligation to pay Actual Damages to Licensee under this SLA; provided, however; Licensee shall have the right to remove the System as provided in this SLA.
3.13. No Infringement. Licensee represents and warrants that Licensee’s installation and operation of the System shall not infringe upon any third party’s intellectual property or other proprietary rights. In addition, Licensee shall pay all royalties and license fees which may be required for the methodology, techniques, and for other intellectual property in connection with the System. Licensee shall indemnify the State and the City against and defend all suits or claims for infringement of any patent, copyright, trade secret, trade name, trademark, or any other proprietary or contractual rights and shall defend and hold the State and the City harmless from loss, expense, claim, or cost on account thereof.
3.14. Air Quality – Dust Control Plan. If applicable, Licensee must develop and implement a Dust Control Plan for dust control during pre-construction, construction, and post-construction activities including maintenance activities. The plan must identify sources of dust and measures to control the dust from those sources. The plan must also identify methods to control dust migration from the work and staging areas, including all unpaved roadways servicing the construction site and Licensed Area. Adherence to the Dust Control Plan is a requirement for the entire operating Term of the SLA. The plan must comply with local air pollution control district requirements, including approval by or notification to the local authority, if required. On-site activities are not to commence until the Dust Control Plan has been submitted and accepted by the City and the Licensee is prepared to implement the measures in the Dust Control Plan. The Licensee must designate a person or persons to monitor and record dust control measures during on-site activities that cause dust and maintain daily records that shall be submitted to the City upon request. Licensee shall be responsible for any costs, including any fees or charges, imposed by any air quality regulatory authority in relation to Licensee’s work under this SLA.
3.15. Reserved.
4. Licensee Non-Encumbrance in Facility, Site and Licensed Area, Subordination
4.1. Non-Encumbrance and Subordination to Senior Security Documents.
Licensee shall not encumber the Facility, the Site, or the Licensed Area. Licensee acknowledges and understands that this SLA and all rights of Licensee under this SLA are subject and subordinate to all existing leases, easements, rights of way, declarations, restrictions, or other matters of record and all existing agreements of the State with respect to the Facility, the Site, or the Licensed Area. All rights of control, use, occupancy, and enjoyment of the Licensed Area by Licensee, as provided in this SLA, are subordinate and subject to the rights, covenants, and obligations of the State and the City as set forth in any Senior Security Documents. 180
180 of 843
Site License Agreement for Battery Energy Storage System Site License Agreement (SLA) 11
[Insert Info]
Upon request by Licensee, a copy of the Senior Security Documents will be provided to Licensee by the City within a reasonable time period.
4.2. Licensee Personal Property Security Interest. Licensee agrees and acknowledges that the State owns the fee simple title to the Licensed Area and that this SLA and the License granted herein are not real property interests but are personal property interests that Licensee may transfer and assign with the express written approval of the City as provided herein. Licensee shall make all Lenders, or parties to any financing transaction, or equity holders aware that pursuant to section 5.3, only with the prior written consent of the City, may the personal property interests created by this SLA and the Lease be given or pledged as a security, and that any such pledge or security is subordinate to the Senior Security Documents as provided in section 4.1. Any loan or other System financing agreements to be entered into by Licensee and any assignments of such agreements shall require that the Lender or equity financing beneficiary execute a Lender Estoppel Certificate within ten (10) Business Days of request by the City substantially in the form of Exhibit L certifying, among other things, that the loan or other System financing agreements are subordinate to the Senior Security Documents. In addition, any Uniform Commercial Code (UCC) filing or other security filing by a Lender shall attach the executed Lender Estoppel Certificate.
4.3. No Lien in Licensed Area. Nothing in this SLA or the Lease shall constitute a mortgage, charge, assignment, transfer, pledge, lien, or encumbrance upon the Licensed Area, the Site, or the Facility. If this SLA or the Lease were ever construed or deemed to create any such lien or encumbrance, then:
4.3.1 This SLA and the Lease shall be junior and subordinate to the Senior Security Documents;
4.3.2 Any term or condition of this SLA relating to any right, title, or interest in the Licensed Area or System or any insurance, eminent domain, or other proceeds or benefits derived therefrom shall be in all respects junior and subordinate to, and subject to the terms of, the Senior Security Documents.
4.3.3 City may withhold payments otherwise due under the BESS Lease until Licensee delivers unconditional lien releases for all Work through the date of the most recent invoice, recognizing that subcontractors and suppliers retain the right under California Civil Code to file mechanic’s liens or stop payment notices for up to 90 days after completion of work.
5. SLA AND SYSTEM ASSIGNMENT AND FINANCING
5.1. SLA Assignment. Except as otherwise provided in this section 5, the rights, duties, and obligations of Licensee under this SLA shall not be assignable by Licensee in whole or in part without the written consent of the City upon such reasonable terms and conditions that the City may require. The City’s consent to one assignment 181
181 of 843
Site License Agreement for Battery Energy Storage System Site License Agreement (SLA) 12
[Insert Info]
shall not be deemed consent to any subsequent assignment. No such assignment shall relieve Licensee of its obligations under this SLA unless the City has agreed otherwise in writing, and the predecessor Licensee shall remain jointly and severally liable hereunder unless the City has agreed otherwise in writing regarding the assignment. For purposes of this section 5, the sale, assignment, transfer, or disposition, directly or indirectly, of any type which results in a change of control of Licensee shall be deemed an assignment of this SLA. Change of control shall be as defined in common law and may be the result of single or multiple related transactions which result in the cumulative transfer in a twelve (12) month period of more than fifty percent (50%) of the voting stock or equity interests of Licensee.
The following transactions or events shall not constitute an assignment that is subject to the City prior written approval:
5.1.1 To an Affiliate of Licensee provided that the assignee shall produce a Certificate of Status from the Secretary of State and business formation documents demonstrating and confirming assignee’s Affiliate status.
5.1.2 The sale of shares of a publicly traded company in an open market transaction.
5.2. City Approval. Licensee acknowledges that the City is relying upon the unique expertise and capability of Licensee. Any assignment of this SLA shall be subject to the City’s written approval, which approval shall not be unreasonably withheld.
Licensee shall provide the City with thirty (30) calendar days’ written notice of each proposed assignment that requires the City’s approval. Licensee must include in such notice supporting documentation sufficient to demonstrate to the reasonable satisfaction of the City that such proposed assignee has both the financial capacity and the technical and managerial ability to perform the duties and obligations required under this SLA at a level equal to or exceeding Licensee’s ability (an entity having such capacity and ability is a “Qualified Purchaser”). If the City determines in its reasonable judgment that those standards are satisfied, the City shall approve such proposed assignment. In the event the City determines in its reasonable judgment that standards are not satisfied, the City shall promptly give Licensee written notice of the City’s determination and Licensee shall be prohibited from making such assignment. The City shall notify Licensee within thirty (30) calendar days after the City’s receipt of Licensee’s notice of a proposed assignment as to whether or not the City approves the proposed assignment.
5.3. System Financing
5.3.1 Within sixty (60) calendar days of the Effective Date, Licensee shall submit to the City evidence of pending or planned financing sought by Licensee to be secured by the System. In addition, prior to any refinancing or restructuring of the financing arrangements, Licensee shall comply with the requirements of this SLA.
182
182 of 843
Site License Agreement for Battery Energy Storage System Site License Agreement (SLA) 13
[Insert Info]
5.3.2 Any financing to be secured by any personal property interest in the SLA or the Lease shall be subject to approval by the City which approval shall not be unreasonably withheld. The City shall use reasonable efforts to complete its review and approval of the proposed form of financing within thirty (30) days of receipt of the details of the planned financing. As a part of the submittal, Licensee shall submit an executed Lender Estoppel Certificate. If the City do not approve such financing for any reason, this SLA and the Lease may be cancelled by the City or Licensee if Licensee is unable to resolve the concerns for the disapproval; the canceling Party must notice the other Party or Parties in writing within thirty (30) calendar days of the notice of disapproval of the financing transaction in order for cancellation to be effective.
5.4. Collateral Assignment. The City acknowledges that Licensee may be financing the acquisition and installation of the System with financing accommodations from one or more Lenders and that Licensee’s obligations under the financing documents may be secured by, among other collateral, a pledge or collateral assignment of Licensee’s rights under this SLA and a first security interest in the System subject to subordination to Senior Security Documents as set forth in section 4. Licensee may assign its interest in the System, including Licensee’s rights under this SLA, as security for loans or financing of the System including a System Lease with a System Lessor, subject to the requirements of section 4.1 of this SLA. The City as applicable, will work in good faith with Licensee and Lender to agree upon the documentation that may be required in connection with the financing. If a Lender requests additional or different terms and conditions, the City agree to consider such requests in good faith, but neither the City, nor the SPWB is obligated to agree to any newly proposed terms and conditions contrary to the provisions in section 4 of this SLA if the City, each in its sole judgment, determines that such changes are detrimental to the City. Any collateral assignment shall be expressly subject to City’s purchase option and decommissioning rights in §§11 and 12.
5.5. City Consent and Estoppel Certificate. The City, upon not less than thirty (30) calendar days prior written request by Licensee or Licensee’s Lender, execute, acknowledge, and deliver to Licensee or to Licensee’s Lender a City Estoppel Certificate substantially in the form of Exhibit M.
5.6. Licensee’s Default Under Financing Agreements. Licensee agrees to request any Lender to notify the City in writing of any default of Licensee under any agreement with Lender regarding the System. If the Lender notifies the City that an event of default under the System Lease or other financing agreement has occurred and that the Lender has elected to exercise its rights and remedies thereunder or under any of the related security documents, then, upon the exercise of such rights and remedies, the Lender or Qualified Purchaser may become the Substitute Licensee and this SLA will remain in full force and effect, subject to Lender or Qualified Purchaser expressly acknowledging in writing that (i) it is assuming all rights, duties, and obligations of Licensee under this SLA and (ii) it 183
183 of 843
Site License Agreement for Battery Energy Storage System Site License Agreement (SLA) 14
[Insert Info]
agrees to cure all of Licensee’s defaults under this SLA existing at the time such Substitute Licensee assumes the rights, duties, and obligations of Licensee under this SLA and provided further that the Lender or Qualified Purchaser has included in such notice supporting documentation sufficient to demonstrate to the reasonable satisfaction of the City that it has both the financial capacity and the technical ability to perform the duties and obligations required under this SLA at a level equal to or exceeding Licensee’s ability. The City shall notify the Lender or Qualified Purchaser, as applicable, and Licensee of the City’s determination as to whether the proposed Substitute Licensee satisfies the requirements of this section within thirty (30) calendar days of the City’s receipt of all the required supporting documentation.
If the City determines in its reasonable judgment that those standards are satisfied, the City shall approve such proposed Substitute Licensee for the remaining Term and on the same terms and conditions contained in this SLA.
In the event that City determines in its sole reasonable judgment that the proposed Substitute Licensee does not have the financial capacity or the technical ability to perform the duties and obligations required under this SLA, or if the proposed Substitute Licensee has failed to satisfy requirements (i) and (ii) in this section, the City shall promptly give the Lender written notice of the City’s determination and Lender and Licensee shall be prohibited from making such assignment.
6. OWNERSHIP OF SYSTEM
6.1. Title to System. Licensee has leased the System to the City pursuant to the terms of the Lease. Subject to City’s right to acquire the System upon Licensee’s default, Licensee, System Lessor, or their permitted assigns with respect to the System, shall at all times retain title to and be the legal and beneficial owner of the System, including the right to any tax credits available under federal or State law. The City and Licensee, acknowledge and agree that the System shall remain the personal property of Licensee, System Lessor, or their permitted assigns and shall not attach to or be deemed a part of, or fixture to, the Licensed Area or Site; and that the System shall at all times retain the legal status of personal property. The System shall be clearly marked and identified by Licensee as being the personal property of Licensee, System Lessor, or their permitted assigns.
6.2. Filings. Licensee shall be entitled to file one or more precautionary UCC filing(s) in such jurisdictions as it deems appropriate with respect to the System in order to protect its rights in the System. Any filing to perfect or provide notice of the security interest in the System shall confirm that the System is personal property and is not a fixture to the Licensed Area or Site, and shall comply with the provisions in section 4 of this SLA, including but not limited to executing and delivering a Lender Estoppel Certificate substantially in the form of Exhibit L. 184
184 of 843
Site License Agreement for Battery Energy Storage System Site License Agreement (SLA) 15
[Insert Info]
6.3. Security Interests in System. The City acknowledges and agrees that Licensee may grant or cause to be granted to Lender a security interest in the System and Licensee’s rights under this SLA as expressly provided in this SLA. Any security interest in the System shall not create any security interest in the Site or Licensed Areas and shall be subject to the terms and conditions of this SLA.
6.4. No Fixture. In no event shall the System be deemed a fixture. Neither the City nor anyone claiming by, through, or under the City have any rights in or to the System at any time under the Senior Security Documents except as otherwise provided in this SLA.
6.5. No Recording. Licensee shall not record this SLA or any memorandum of SLA or short-form thereof.
6.6. Existing Liens. The City is not aware of any existing lease, mortgage, security interest, or other interest in or lien upon the Facility, the Site, or the Licensed Area that could attach to the System as an interest adverse to Lender’s security interest therein or System Lessor’s ownership thereof.
7. DESIGN REQUIREMENTS; CONDITIONS PRECEDENT
7.1. General. Licensee shall at its sole cost and expense, design, build, install, own, maintain, and operate the System in compliance with this SLA and Applicable Laws. Licensee shall construct and install and complete the System and all related matters in accordance with this SLA and the CITY’s approved System design and Construction Documents as set forth in sections 7 and 8 of this SLA. Licensee may make Minor Field Changes provided the CITY is notified in advance of such changes.
7.2. CEQA Compliance. Licensee shall facilitate comply with all California Environmental Quality Act, codified at Public Resources Code section 21000 et seq. (“CEQA”), mitigation requirements applicable to the activities undertaken pursuant to this SLA as directed by the CITY.
7.3. System Requirements
7.3.1 Compliance. Licensee agrees that the System shall be designed to comply with all applicable California building and electrical codes and standards, CSI Tier One Standards, and California Public Utility Rule 21 in accordance with the State’s permit process at Licensee’s cost. System design and Construction Documents shall expressly state and identify the applicable building and electrical codes and standards. ▪
7.3.2 Electric Power. Electricity from the System must be provided at 60 Hertz and at the appropriate voltage for electrical interconnection to the Facility 185
185 of 843
Site License Agreement for Battery Energy Storage System Site License Agreement (SLA) 16
[Insert Info]
voltage service level, which will be established by the CITY. The System components must comply with all standards relevant to the operation and installation of BESS. Inverters must comply with all applicable requirements including but not limited to the following:
▪ Any and all requirements as listed by the CSI incentive program, Utility or the CEC for the installation and interconnection of Systems. ▪ The BESS System must include all required hardware needed for the installation, to comply with utility interconnection requirements, and operation of the System. The System shall include all of the equipment necessary to interconnect and operate in parallel to the utility grid, including metering and the required interconnection protective relays and event recording devices in accordance with the applicable Utilities Interconnection Guidelines.
7.4. Permits. Licensee is responsible at its sole cost to obtain all permits necessary for the construction, maintenance, and operation of the System. Licensee shall provide the CITY with PDF electronic copies of all permits, approvals and conditions issued by applicable federal, State, and local governmental entities, including the Utility as provided in section 7.8 of this SLA.
7.5. System Design and Plan Approval
7.5.1 Schematic Design. Licensee shall submit System outline specifications in sufficient detail to convey an initial indication of the design of the System with regard to the Licensed Area and Site, the materials to be used in construction, and the types of mechanical, electrical, and structural systems to be utilized for approval by the CITY. The CITY shall review the System outline specifications within fifteen (15) Business Days and respond to Licensee. Once approved by the CITY, the System outline specifications shall become a part of the Project Manual.
7.5.2 Construction Documents. Licensee shall submit 95% Construction Documents from the later of (i) the CITY’s approval of the schematic design of the System or (ii) completion of the CEQA process. The Construction Documents shall address System constraints and specifications that are deemed to be necessary and shall incorporate the requirements of the CEQA review. The CITY will review the Construction Documents for compliance with Applicable Laws and this SLA and notify Licensee in writing within fifteen (15) Business Days of submittal as to whether or not the CITY approves the submittals. If the CITY does not approve the submittals, the CITY’s written notice shall specify the deficiencies. The CITY’s approval of the Construction Documents shall not be unreasonably withheld or delayed. 186
186 of 843
Site License Agreement for Battery Energy Storage System Site License Agreement (SLA) 17
[Insert Info]
7.5.3 Final CITY Review. Changes to System schematic design and Construction Documents required by the CITY shall be submitted to Licensee and Licensee shall incorporate such changes into the System schematic design and Construction Documents and return such documents to the CITY. Provided Licensee has made all required changes, the CITY shall complete its review and approval of Construction Documents within thirty (30) calendar days from receipt of the revised documents. The CITY reserves the right to require Licensee use the contractor of CITY’s choice for any roof membrane penetrations.
Deadlines in this section may be extended as necessary, by the CITY, to accommodate required approvals from State Fire Marshal, or in case of County or City-owned building, if Licensee is required to get permit(s) or other approval(s) from the municipal Building Department or other applicable authority having jurisdiction in addition to CITY approval.
7.5.4 Professional Engineers. Licensee understands that all System design, structural and civil Construction Documents, and engineering calculations must be submitted under the authority of a duly licensed professional engineer(s) certified to practice in the State, and who is a professional engineer in good standing. Licensee further understands and agrees to retain a duly licensed professional electrical engineer(s) in good standing certified to practice in the State. System design, construction documents, and engineering calculations submitted to the CITY for review without the appropriate professional engineering stamp will not be reviewed and will be returned to Licensee as incomplete and insufficient System documentation. All structural drawings must be signed by licensed structural engineer.
7.6. Reserved.
7.7. Reserved
7.8. Form of Submittals. All documents, drawings and other submittals required under either section 7 or section 8 of this SLA shall be submitted to the CITY electronically with an electronic signature. Prior to System start-up, the Licensee shall supply the CITY with one electronic copy, and one hard copy of all Component Product Data and Component Operation and Maintenance manuals.
The information shall be sufficient for the CITY to evaluate and ensure appropriate O&M Services are being completed over the life of the System.
7.9. Associated Agreements
7.9.1 Interconnection Agreement(s). Licensee shall be solely responsible for all costs of negotiating and executing interconnection agreement(s) with the Utility and for all costs of interconnecting the System with the Utility.
Licensee shall reimburse the CITY for any and all out of pocket costs the 187
187 of 843
Site License Agreement for Battery Energy Storage System Site License Agreement (SLA) 18
[Insert Info]
CITY incurs in connection with those activities. Licensee’s failure to negotiate and execute interconnection agreement(s) shall be an event of default and CITY may terminate this SLA consistent with the provisions of section 13 herein.
7.9.2 Other Agreements. Within thirty (30) calendar days after the Effective Date, Licensee shall provide the CITY copies of all forms of other agreements including but not limited to Interconnection Agreements, rebate agreements, or other required agreements which Licensee anticipates that it will require the CITY to execute in order to effectuate the purpose of this SLA. Such copies shall be delivered as provided in section 7.8 of this SLA. The CITY shall notify Licensee no later than thirty (30) calendar days after it receives the forms of agreements as to whether the agreements are acceptable to the CITY or the CITY will require amendment. If the CITY requires an amendment the CITY will provide written notice as to the form of required amendment within such thirty (30) calendar day period. The final agreements submitted to the CITY for execution shall not deviate materially from, or impose any obligations on the CITY beyond those approved forms of agreements, and the CITY will not unreasonably withhold its signature on such final agreements in compliance with this section.
8. SYSTEM CONSTRUCTION; INSTALLATION; OPERATION AND
MAINTENANCE
8.1. CITY Approval. No construction or installation by Licensee or its subcontractor(s) shall be permitted to begin until:
8.1.1 The CITY has approved the final Construction Documents and specifications;
8.1.2 Licensee has satisfied all the conditions precedent necessary to commence construction including, but not limited to, all “DEVELOPMENT” tasks listed in Exhibit F, and
8.1.3 The CITY has issued a Notice to Proceed which notice will occur within five (5) Business Days after the conditions in (8.1.1) and (8.1.2) have been satisfied.
8.2. Construction Start Date. Licensee shall start construction of the System within ten (10) calendar days after receipt of the CITY’s Notice to Proceed. Licensee shall provide written notice to the CITY of the date that Licensee commences construction at the Site (the “Construction Start Date”) and shall diligently pursue construction until the System’s completion. If Licensee has not commenced substantial construction activities within sixty (60) calendar days after Licensee’s receipt of the Notice to Proceed, either Party may terminate this SLA by written notice to the other Party. In the event of such notice by either Party, this SLA shall 188
188 of 843
Site License Agreement for Battery Energy Storage System Site License Agreement (SLA) 19
[Insert Info]
terminate, the CITY shall retain any Transaction Fee paid or due as of the date of such termination notice, Licensee shall comply with section 11.1 and neither Party shall have any further obligation to the other Party.
8.3. Completion of System. The Parties agree that the COD as provided in Exhibit F (“the Guaranteed Completion Date”) after the CITY’s issuance of the Notice to Proceed unless otherwise agreed to by the Parties in writing. If a delay is attributable solely to City, the Guaranteed Completion Date shall be extended dayfor-day; otherwise, Licensee bears the risk of delay.
8.4. Extensions of Dates. In the event of a Force Majeure, the Construction Start Date and the Guaranteed Completion Date shall be extended pursuant to the provisions in section 14.4 of this SLA provided that Licensee exercises its best efforts to mitigate any delay caused by such Force Majeure. The Construction Start Date and the Guaranteed Completion Date may also be extended by the mutual written agreement of the Parties.
8.5. Liquidated Damages for Delay. If the COD has not occurred by the Guaranteed Completion Date, Licensee shall pay the CITY as liquidated damages the amount of one hundred dollars ($100) for each calendar day (or part day) after the Guaranteed Completion Date until such time that the COD occurs. If COD has not occurred within ninety (90) calendar days of the Guaranteed Completion Date, the CITY reserves the right to terminate this SLA by written notice to Licensee. The CITY shall retain any Transaction Fee paid or due as of the date of such termination notice, and Licensee shall comply with section 11.1 and neither Party shall have any further obligation to the other Party.
8.6. Notice of Commercial Operation Date (COD). Licensee shall notify the CITY in writing no less than ten (10) Business Days and no more than thirty (30) Business Days before the date on which Licensee expects the COD to occur. Licensee shall give the CITY written notice of the actual COD within twenty-four (24) hours after its occurrence.
8.7. Punch List. The CITY shall have fifteen (15) Business Days after receiving notice that the COD has occurred to inspect the Licensed Area and the System for compliance with all design and Construction Documents. The CITY shall present Licensee with a list of any deficiencies found by the CITY together with a punch list of tasks to be completed post-COD that relate to the Licensed Area, including but not limited to tasks related to cleanliness, safety, security, accessibility, Utility service and noise. Licensee shall have thirty (30) calendar days after Licensee’s receipt of the CITY’s notice to correct any deficiencies and to complete the tasks on said punch list. If Licensee fails to correct any deficiency or complete the tasks on the punch list within such thirty (30) calendar day period, the Rent that would otherwise be applicable under the Lease shall be reduced on a daily rate of $50 one thirtieth (1/30) the Rent until such time as all tasks are completed to the CITY’s reasonable satisfaction.
189
189 of 843
Site License Agreement for Battery Energy Storage System Site License Agreement (SLA) 20
[Insert Info]
8.8. Project Manual. Within fifteen (15) Business Days of COD, Licensee shall provide a complete Project Manual to the CITY in a format set forth in section 7.8 of this SLA. Licensee shall subsequently notify the CITY of any changes to the Project Manual within ten (10) Business Days of such change.
8.9. Alterations. Upon approval by the CITY of the System design and Construction Documents, Licensee shall have no right to change the approved design and Construction Documents or to make Alterations to the System without receiving prior written approval of the CITY, except for Minor Field Changes pursuant to section 7.1. Prior to undertaking any Alterations, Licensee shall submit to the CITY detailed and complete plans and specifications for the proposed Alterations. In its sole discretion, the CITY may waive the requirement for detailed plans upon Licensee’s demonstration that the proposed Alteration consists solely of modification or replacement of like-kind equipment. The CITY shall not unreasonably delay or withhold written approval of Licensee’s proposed Alteration.
However, as a condition to consenting to the Alterations, the CITY may impose reasonable requirements, including the requirement that Licensee provide the CITY with payment and performance bonds or other financial assurance that the alterations will be completed and the cost of the Alterations will be paid when due, and reimbursement of any costs incurred by the CITY in responding to Licensee’s request. Any such Alterations shall be performed in accordance with all Applicable Laws, including any and all necessary permits and approvals by the CITY.
Licensee agrees to provide the CITY with sufficient advance notice of any proposed Alterations to allow the coordination and approval by the CITY of the construction schedule for such Alterations.
8.10. Inspection of System. The CITY’s inspections of the System during construction shall be allowed in accordance with section 15.1. In no event shall the CITY inspections of the System be interpreted as making the CITY responsible for, and Licensee acknowledges that the CITY is not responsible for, the design or construction of the System.
8.11. As-Built Drawings. Licensee shall deliver to the CITY As-Built Drawings following completion of the System installation and prior to the COD in a format set forth in section 7.8 of this SLA. The As-Built Drawings will reflect the final installed System. Licensee understands that As-Built Drawings are required to be submitted for the purpose of full and complete compliance with the applicable provisions of this SLA. In the event Licensee fails to provide acceptable As-Built Drawings with sixty (60) calendar days after the COD, then the CITY may contract for provision of such As-Built Drawings and shall deduct the cost thereof from any sums otherwise due to Licensee.
8.12. System Design and Installation Process and Milestones. The System design and installation process and milestone schedule is set forth in Exhibit F. The purpose of Exhibit F is to provide a milestone schedule of the System Development and the 190
190 of 843
Site License Agreement for Battery Energy Storage System Site License Agreement (SLA) 21
[Insert Info]
Installation and Construction documentation and technical review processes and the responsible Parties.
8.13. No CITY Responsibility. In no event shall the CITY’s review or approval of the design and Construction Documents or any other submittals by Licensee in accordance with this SLA be interpreted as making the CITY responsible for, and; Licensee acknowledges that the CITY is not responsible for, any aspect of the design, construction or operation of the System.
8.14. Licensee Liability for Damage to Facility or Site. Licensee, its agents, employees, assigns, and Licensees shall be liable for any damages caused to the CITY’s Facility or the Site arising from Licensee’s use thereof.
8.15. Prevailing Wage. For construction and installation of the System, Licensee and its subcontractor(s) shall pay the rate of wages for regular, overtime, and holiday work plus employer payments for all benefits generally prevailing in the locality in which the work is to be performed, as determined by the State Department of Industrial Relations. This requirement shall include all crafts, classifications, or types of workmen used at the Licensed Area at the point of delivery of Licensee, or Licensee’s subcontractor(s), for the assembly and installation of the System including the materials at the Licensed Area under this SLA. Licensee shall comply with all Applicable Laws governing the payment of prevailing wage as identified in the California Labor Code and Applicable Laws. Licensee shall certify that it will comply with Applicable Laws related to prevailing wage using the form attached hereto as Exhibit G. Licensee shall require that all contracts for construction let pursuant to this License shall incorporate the prevailing wage provisions set forth in Exhibit H.
8.16. Operations and Maintenance. Licensee shall operate and maintain the System, or shall cause the System to be operated and maintained, in a commercially reasonable manner throughout the Term in accordance with all of the provisions herein. Licensee warrants that all of its operating and maintenance personnel will be adequately qualified and trained throughout the Term. Licensee shall also be responsible for any maintenance and repairs to the Licensed Area if such maintenance and repairs are necessary as a result of Licensee’s use.
8.16.1 Notice. Licensee shall notify the CITY twenty-four (24) hours prior to accessing the Licensed Area to perform System maintenance. In the case of a fire, life, or safety issue pertaining to the System, the CITY will endeavor to provide immediate access. Licensee shall be subject to access procedures reasonably adopted from time to time by the CITY including, but not limited to, the procedures set forth in Exhibit E.
8.16.2 Standard of Performance. Licensee shall, and shall cause any subcontractors to, perform the Services in accordance with the terms of this Agreement and applicable operation and maintenance manuals, in a 191
191 of 843
Site License Agreement for Battery Energy Storage System Site License Agreement (SLA) 22
[Insert Info]
good and workmanlike manner, and in accordance with practices, methods, techniques, and standards that (i) are generally accepted in the solar photovoltaic power industry in the United States for use in connection with the operation and maintenance of solar power generating projects of similar size and type as the System all in a manner consistent with all Applicable Laws, reliability and good workmanship; and (ii) conform to manufacturer design, engineering, construction, testing, operation, and maintenance guidelines applicable to the equipment in question. All maintenance and inspection services shall be performed by qualified technical personnel in accordance with the operation and maintenance manuals.
8.16.3 Permits. Licensee is responsible at its sole cost to obtain all permits necessary for the maintenance and operation of the System. Licensee shall provide the CITY with electronic copies of all permits, approvals, and conditions issued by applicable federal, state, and local governmental entities, including the Utility.
8.16.4 Outage Reporting. Within thirty (30) calendar days of any outage of fifteen percent (15%) or more of the System capacity lasting more than twenty-four (24) hours, Licensee shall provide to the CITY a report indicating the nature and cause of the outage and the steps taken by Licensee to correct the problem.
8.16.5 Security. At all times during the construction and operation of the System on the Licensed Area, Licensee shall keep the area adequately secured for safety and security purposes. Licensee shall coordinate with the Site manager and comply with all Site security requirements when accessing the Licensed Area, including, but not limited to those in ExhibitE to the SLA. Licensee hereby acknowledges that the CITY shall have no obligation whatsoever to provide guard services or other security measures for the benefit of Licensee. Licensee assumes all responsibility for the protection of Licensee and Permittees and the property of Licensee and Permittees from acts of third parties.
8.16.6 Customer Service Support. Licensee will provide customer service support accessible to the CITY twenty-four (24) hours per day, seven (7) days per week. For purposes of this provision, “accessible” means that Licensee will provide a designated customer service telephone number with a voice mail system which records the time and date of the call.
Licensee agrees that it will respond to the CITY messages on this designated customer service voice mail system within twenty-four (24) hours of the CITY call.
8.16.7 CITY Training. Licensee shall instruct and train CITY designated personnel on how to shut down the System in the event of an emergency 192
192 of 843
Site License Agreement for Battery Energy Storage System Site License Agreement (SLA) 23
[Insert Info]
within thirty (30) days of acceptance of the COD, and from time to time thereafter, but will provide not less than one (1) hour of hands-on training once each Contract Year. Licensee shall also maintain current emergency procedures as part of the Project Manual and shall update the Project Manual and provide written notice to the CITY promptly for any changes in those procedures.
8.16.8 Warranty. Lessor shall maintain manufacturer warranties in good standing, including but not limited to procuring equipment with warranties, paying fully for equipment, conducting required maintenance utilizing trained technicians, and causing any manufacturer upgrades to be completed.
8.16.9 Licensee’s Failure to Maintain. If Licensee fails to maintain the System in good repair and operation, the CITY shall give Licensee written notice to perform such maintenance and repair activities as are reasonably required. If within ten (10) Business Days thereafter, Licensee fails to commence and diligently complete the requested maintenance or repairs, then, in addition to its other remedies under the SLA, the CITY shall have the right to have such work performed and expend such funds at the expense of Licensee as are reasonably required to perform such work including the cost of a project manager. Any amount so expended by the CITY shall be paid promptly by Licensee upon the CITY’s submittal of the work invoices to Licensee, or the CITY may deduct the amount expended from invoices submitted to the CITY by Licensee for O&M Services.
8.16.10 Metering. Licensee shall provide for the metering.
8.16.11 Reserved.
8.17. System Malfunctions, Shutdowns, And Emergencies
8.17.1 System Malfunctions. The CITY and Licensee each shall notify the other Party as soon as possible but not more than twenty-four (24) hours following such Party’s discovery of any material malfunction in the operation of the System or of their discovery of an interruption in the supply of Electricity from the System by providing notice in accordance with section 16.1.
8.17.2 System Malfunction Repairs. Licensee shall commence repairs to the malfunctioning System and restore the supply of Electricity, as soon as reasonably possible after receipt of the CITY’s notice or upon Licensee’s discovery of any of the conditions causing a malfunction in the operation of the System, subject to the Access Procedures for the Site and Licensed Area or any permits required to perform the repairs. In the event Licensee must repair the System and requires CITY personnel or service provider 193
193 of 843
Site License Agreement for Battery Energy Storage System Site License Agreement (SLA) 24
[Insert Info]
to be present after normal business hours, Licensee shall reimburse the CITY for all costs for after-hours access to the Site and Licensed Area and shall bear all costs to repair the System.
8.17.3 System Emergencies
8.17.3.1 Notification. Licensee and the CITY each shall notify the other Party as soon as possible upon the discovery of an emergency condition in the System. For emergency repairs, the Parties shall contact the persons identified in section 16.1.
8.17.3.2 Immediate Dispatch. If an emergency condition exists, Licensee shall immediately dispatch the appropriate personnel to perform the necessary repairs or corrective action in an expeditious and safe manner subject to the CITY’s access procedures in Exhibit E.
8.17.3.3 Disconnection of System by the CITY. In case of emergency in which the CITY determines that the continued operation of the System presents an imminent threat requiring immediate action to prevent or mitigate the loss or impairment of life, health, property, or essential public services, the Parties agree that the CITY may electrically disconnect the System prior to notification of Licensee. The CITY will notify Licensee if the CITY disconnects the System pursuant to this provision no later than eight (8) hours after the System is disconnected. Parties agree that only Licensee or an agent designated by Licensee will be authorized to reconnect the System after the System is disconnected by the CITY pursuant to this section. In no event shall the CITY be liable for any damage for actions taken by the CITY in the event of an emergency.
8.18. System Shutdowns.
8.18.1 Scheduled Shutdown. If Licensee schedules a shutdown of the System, Licensee shall notify the CITY in writing as soon as practical after Licensee schedules such shutdown but in no event less than fifteen (15) calendar days prior to the start of such shutdown. Such notice shall include the reasons and expected duration of such shutdown.
8.18.2 Unscheduled Shutdown. If a shutdown of the System occurs that is not scheduled, Licensee shall provide notice to the CITY as soon as possible.
For any shutdown which duration exceeds twenty-four (24) hours, Licensee shall be required to notify the CITY of the cause and time of expected resumption of operation of the System.
194
194 of 843
Site License Agreement for Battery Energy Storage System Site License Agreement (SLA) 25
[Insert Info]
8.18.3 Facility Temporary Shutdown. During the Term, the CITY shall be entitled to shut down the System in order to perform maintenance, repairs, and renovations to the Facility. The CITY will work in good faith with Licensee to minimize the impact of such shutdowns on Licensee’s operations to the extent practical in the CITY’s sole reasonable judgment.
The Parties agree there shall be no impact on Licensee’s operations if any such shutdowns occur during the hours of 8 p.m. to 6 a.m. on any day.
All such shutdowns outside of the hours of 8 p.m. to 6 a.m. shall be tracked and reported in the annual report to the CITY in accordance with
16.1. 9. INSURANCE
9.1. No CITY Obligation to Insure. The CITY is not responsible for and will not maintain insurance covering the System and Licensee will make no claim of any nature against the CITY by reason of any damage to the property of Licensee in the event of damage or destruction by fire or other cause.
9.2. Licensee’s Insurance Obligations. Licensee shall procure and maintain for the duration of this SLA insurance against all claims for injuries to persons or damages to property which may arise from the installation, construction, maintenance, and operation of the System or the Permitted Use. This insurance shall meet the following requirements:
9.2.1 Any insurance company used by Licensee shall be acceptable to the CITY. In any event, insurance is to be placed with insurers with a current A.M. Best’s rating of no less than A-VII. If self-insured, Licensee must demonstrate to the satisfaction of the CITY that such insurance is acceptable.
9.2.2 Licensee shall furnish the CITY with original certificates and amendatory endorsements effecting coverage required by this clause. All certificates and endorsements are to be received and approved by the CITY as a condition of the issuance of the Notice to Proceed. The CITY reserves the right to require complete, certified copies of all required insurance policies, including endorsements affecting the coverage required by these specifications at any time.
9.2.3 All coverage shall be in force during the Term of this SLA. If the insurance expires during the Term, Licensee shall immediately provide a new current certificate showing that it has in place all insurance policies required in this section 9.2 or may be declared in default of this SLA. The CITY reserves the right to withhold all payment for O&M Services until the default is cured to the satisfaction of the CITY. Renewal insurance certificates must be tendered to the CITY at least ten (10) Business Days 195
195 of 843
Site License Agreement for Battery Energy Storage System Site License Agreement (SLA) 26
[Insert Info]
prior to the expiration of the previous insurance certificate. This new insurance shall be in accordance with the terms of this SLA.
9.2.4 Insurance policies shall contain a provision stating that coverage will not be cancelled without thirty (30) calendar days’ prior written notice to the CITY.
9.2.5 In the event Licensee fails to keep in effect at all times the specified insurance coverage, the CITY may, in addition to any other remedies it may have, terminate this SLA upon the occurrence of such event, subject to the provisions of this SLA.
9.2.6 The insurance coverage required herein shall not in any way limit the liability of Licensee, its officers, agents, partners, or employees.
9.3. Minimum Scope of Insurance. Coverage shall be at least as broad as:
▪ Insurance Services Office Commercial General Liability coverage (occurrence Form CG 0001)
▪ Insurance Services Office Form Number CA 0001 covering Automobile Liability, code 1 (any auto)
▪ Workers’ Compensation Insurance if required by the State and Employer’s Liability Insurance
▪ Property insurance, Fire and Extended Coverage Form
▪ Pollution Liability
9.4. Minimum Limits of Insurance. Licensee shall maintain limits no less than:
9.4.1 General Liability (including operations, products, and completed operations): $1,000,000 per occurrence, $2,000,000 annual aggregate for bodily injury, personal injury, and property damage. If Commercial General Liability insurance or other form with a general aggregate limit is used, either the general aggregate limit shall apply separately to this Project/location or the general aggregate limit shall be twice the required occurrence limit. The policy shall include coverage for liabilities arising out of premises, operations, independent contractors, products, completed operations, personal & advertising injury, and liability assumed under an insured contract. The policy shall not include exclusion for property damage resulting from explosion, collapse, or underground hazard. The products and completed operation liability coverage shall extend for a period of not less than three (3) years past the acceptance of the Project, or termination of the SLA, whichever is later. This insurance shall apply separately to each insured against whom claim is made or suit is brought subject to the Licensee and/or Permittee’s limit of liability. 196
196 of 843
Site License Agreement for Battery Energy Storage System Site License Agreement (SLA) 27
[Insert Info]
9.4.2 Automobile Liability: $1,000,000 per accident for bodily injury and property damage combined single limit per accident. Such insurance shall cover liability arising out of a motor vehicle including owned, hired, and non-owned motor vehicles.
9.4.3 Pollution Legal Liability: For operations with a limit no less than $1,000,000 per claim or occurrence and $2,000,000 aggregate per policy period of one year. This policy shall include coverage for bodily injury, property damage personal injury, and environmental site restoration, including fines and penalties in accordance with applicable EPA or state regulations. If the services involve lead-based paint or asbestos identification/remediation, the Pollution Liability policy shall not contain lead-based paint or asbestos exclusions.
9.4.4 Employer’s Liability: Licensee shall maintain statutory worker’s compensation and employer’s liability coverage for all its employees who will be engaged in the performance of the Contract. Employer’s liability limits of $1,000,000 are required. The insurer waives any right of recovery the insurer may have against the State because of payments the insurer makes for injury or damage arising out of the work done under contract/permit with the State.
9.4.5 Property Insurance: Fire and Extended Coverage against all risks of loss to any improvements or betterments, at full replacement cost with no coinsurance penalty provision.
9.5. Deductibles and Self-Insured Retentions. Any deductibles or self-insured retentions must be declared to the CITY in a written notice by Licensee. If the CITY determines that such deductibles or self-insured retentions are not appropriate, the CITY shall so notify Licensee in writing within thirty (30) calendar days of Licensee’s submittal to the CITY. Subject to the CITY’s approval, Licensee shall either (i) reduce or eliminate such deductibles or self-insured retentions as respects the CITY, its officers, officials, and employees or (ii) shall provide a financial guarantee satisfactory to the CITY guaranteeing payment of losses and related investigations, claim administration, and defense expenses.
9.6. Subcontractor(s). Licensee shall include all subcontractor(s) as insureds under its policies or shall furnish separate certificates and endorsements for each subcontractor(s) to Licensee for review and approval by the CITY. All coverages for subcontractor(s) shall be subject to all of the requirements stated herein and each subcontractor(s) shall further agree to indemnify, defend and hold the CITY harmless including reasonable attorneys’ fees and costs.
9.7. Earthquake. Licensee is hereby notified that the CITY does not have coverage for earthquake damage. The CITY assumes no responsibility or liability whatsoever for any damage or destruction to the System or to any property or persons under 197
197 of 843
Site License Agreement for Battery Energy Storage System Site License Agreement (SLA) 28
[Insert Info]
the control or direction of Licensee including any Lender and any subcontractor(s) or agents of Licensee or Lender that may result from an earthquake.
9.8. Other Insurance Provisions
9.8.1 Acceptance of certificates of insurance by the CITY shall not limit Licensee’s liability under this SLA.
9.8.2 The Commercial General Liability and Commercial Automobile Liability insurance required by this Agreement must contain, or be endorsed to contain, the following provisions:
(i) The State, CITY, the Court, the County, and their respective judicial officers, officers, officials, employees, and agents of those entities, are to be named as additional insured with the same type and amount of coverage as the Licensee.
(ii) For any claims related to this SLA, Licensee’s insurance coverage shall be primary insurance as respects the State, CITY, the Court, the County, and their respective judicial officers, officers, officials, employees, and agents. Any insurance or self-insurance maintained by the State, CITY, the Court, the County, and their respective judicial officers, officers, officials, employees, and agents shall be excess of Licensee’s insurance and shall not contribute to it. (iii) Licensee shall waive any right of recovery or subrogation they may have against the State, CITY, the Court, the County, and the judicial officers, officers, officials, employees, and agents of those entities. (iv) Coverage shall not be extended to any indemnity coverage for the active negligence of the additional insured in any case where an agreement to indemnify the additional insured would be invalid under subdivision (b) of section 2782 of the Civil Code. (v) In the event Licensee does not comply with these insurance requirements, in addition to reserving the right to terminate this SLA, the CITY may, at its option, provide insurance coverage to protect the CITY. Licensee shall pay the cost of the insurance and, if prompt payment is not received by the insurance carrier from Licensee, the CITY may pay for the insurance from the Lease Rent or O&M Service sums otherwise due Licensee, as applicable. (vi) If the State, CITY, Court, or County is damaged by the failure of Licensee to provide or maintain the required insurance, Licensee shall pay the State, CITY, Court, or County for all such damages. 198
198 of 843
Site License Agreement for Battery Energy Storage System Site License Agreement (SLA) 29
[Insert Info]
(vii) Licensee’s obligations to obtain and maintain all required insurance are non-delegable duties under this SLA.
10. CITY OBLIGATIONS
10.1. General. The CITY will maintain in good working order and available at all times, its connection and service contract(s) with the Utility. All obligations of the CITY under section 10 shall be subject to the right of the CITY to issue a shut-down order to the System in accordance with the provisions of this Agreement.
10.2. Notice of Damage. The CITY shall promptly notify Licensee of any matter it is aware of pertaining to any damage to or loss of the use of the System or that could reasonably be expected to adversely affect the System.
10.3. Liens. The CITY shall not permit or suffer any lien on or with respect to the System or any interest therein. If the CITY breaches its obligations under this section, it shall immediately notify Licensee in writing, shall promptly cause such lien to be discharged and released of record without cost to Licensee. Nothing in this section
10.3 shall change, alter, or modify the provisions in section 4.
10.4. Estoppel Certificate. The CITY shall, upon not less than thirty (30) calendar days’ prior written request by Licensee or Lender, execute, acknowledge, and deliver to Licensee or to Lender, an Estoppel Certificate substantially in the form of Exhibit M, which may be relied upon by any Lender or prospective Lender.
10.5. No Relocation Assistance. Except as specifically provided to the contrary elsewhere in this SLA, the Parties agree that no relocation payment or relocation advisory assistance under Applicable Laws will be sought or provided in any form as a consequence of this SLA. Licensee also acknowledges that Licensee, its employees, subcontractors, subordinates, or assignees are not entitled to any relocation payment or relocation advisory assistance due to their use and occupancy of the Licensed Area. In the event an assignment of this SLA is permitted pursuant to the terms herein, Licensee shall incorporate the provisions in this section 10.6 into each assignment. Failure to do so may make Licensee liable for any damages and costs resulting from claims for relocation payments from its assignees.
11. REMOVAL OF SYSTEM AND RESTORATION OF LICENSED AREA
11.1. System Removal and Licensed Area Restoration. Licensee shall, at its sole cost, within sixty (60) Days after the earlier of (a) SLA termination, or (b) City’s written demand following non-appropriation under §14.5 and CITY not opted to Buyback the System, remove the System from the Licensed Area, restore the Licensed Area to its pre-installation condition (except for System mounting pads in roof-mounted installations, and ordinary wear and tear) and peaceably and quietly leave, surrender, and yield the Licensed Area to the CITY. Upon written request by Licensee within this sixty (60) calendar day period, the CITY may, within its sole discretion, extend the time allowable for Licensee to vacate the Licensed Area and 199
199 of 843
Site License Agreement for Battery Energy Storage System Site License Agreement (SLA) 30
[Insert Info]
remove the System. Upon completion of Licensee’s removal of the System and completion of restoration of the Licensed Area, the CITY shall inspect the Licensed Area to determine that the Licensed Area is restored and returned in accordance with this section.
11.2. Reserved
11.3. End of Term; CITY Purchase Option. At SLA expiration the City may (i) purchase the System at the lesser of fair-market value or fifteen percent (15 %) of original installed cost, or (ii) require Licensee to remove the System and restore the Licensed Area pursuant to §11.1. City shall give Licensee written notice of its election no later than ninety (90) Days before the Termination Date.
11.4. CITY Option to Retain System on Licensee Default. In the event that (i) this SLA is terminated by the default of Licensee, the Lender or System Lessor and Lender or System Lessor exercises remedies thereunder, and in either case, the Lender elects to not take actions that would allow the CITY, within one hundred eighty (180) calendar days after the CITY has ceased receiving electricity from the System as a consequence of the foregoing, to receive electricity generated by the System on the terms set forth in this SLA or the Lease, then CITY may treat the System as abandoned and may either require Licensee to undertake removal and restoration in accordance with section 11.1 or, if Licensee fails to so remove the System from the Licensed Area, retain the System for its own use free and clear of any claims by Licensee, Lender, or System Lessor.
11.4.1 Licensee agrees to require that any Lender or System Lessor agree directly with the CITY that the System shall be deemed abandoned under the circumstances described in section 11.1.
11.4.2 Licensee shall provide in any financing agreement secured by the System that on such abandonment pursuant to this section 11.4, the Lender or System Lessor, as applicable, shall deliver to the CITY documents of clear title, free of all claims and encumbrances, as a condition of sale.
11.4.3 In the event the Lender or System Lessor for any reason fails to deliver clear title and exclusive right of possession of the System within six (6) months of the date of any abandonment, the CITY shall be authorized to take possession and control of the System and to retain a replacement Licensee to resume operations of the System free and clear of any claims by Licensee, Lender or System Lessor.
11.5. Clear Title. At the termination of this SLA, or in the event of a breach of the terms of this SLA, or the Lease by Licensee and termination of this SLA by the CITY, Licensee shall execute and deliver to the CITY within thirty (30) calendar days written confirmation of the termination of any and all UCC filings affecting the Licensed Area. If Licensee fails or refuses to deliver such confirmation, a written notice by the CITY documenting this failure shall, after ten (10) Business Days 200
200 of 843
Site License Agreement for Battery Energy Storage System Site License Agreement (SLA) 31
[Insert Info]
from the date of delivery of said notice, be conclusive evidence of such termination against Licensee and all persons claiming any interest in the Licensed Area under this SLA. Upon written request by the CITY, Licensee shall deliver a quitclaim deed in recordable form disclaiming any right, title, or interest in the Licensed Area under this SLA within ten (10) Business Days from the date of delivery of said request.
12. PURCHASE OPTION, RIGHT OF FIRST OFFER AND FIRST REFUSAL
12.1. CITY Purchase Option. The CITY shall have an option to purchase the System and any Alterations, materials, spares, tools, supplies, and equipment or any portions of the System after the sixth, tenth, fifteenth at a Termination value as per Exhibit-T. The CITY shall give notice of its intent to enter negotiations for exercise of this option at least one hundred eighty (180) calendar days before the end of the sixth, tenth, fifteenth year of operation respectively. The System and any Alterations, materials, spares, tools, supplies, and equipment or any portions of the System shall be transferred to CITY at the end of the Initial Term at Termination value as per Exhibit-T.
12.2. Reserved.
12.3. Reserved.
12.4. Reserved.
12.5. Assignment of Licensee Contracts to CITY. If the CITY exercises its right pursuant to section 12.1, the CITY may elect to take legal assignment of any or all contracts, purchase orders and other contractual rights related to the System. In such event, Licensee shall as a condition to receiving payments under this SLA, execute and deliver any or all documents and take all steps, including legal assignment to CITY of any and all contracts, purchase orders, and other contractual rights related to the System as the CITY may require for the purpose of fully vesting in the CITY the rights and benefits of Licensee under such contracts in order that the CITY may operate the System. Licensee shall notify the CITY of any or all such contracts and Licensee hereby warrants that all such contracts are or shall be assumable by the CITY at the CITY’s option. In addition, Licensee shall require that any and all warranties and guarantees related to the System are assumable at the CITY’s option.
12.6. System Lessor. The initial sale or transfer of the System to a System Lessor at any time up to ninety (90) calendar days after the Commercial Operation Date shall not constitute a sale for the purposes of the CITY’s right of first offer or right of first refusal. If the System Lessor desires to sell all or a part of the System any time after the expiration of the period specified in the preceding sentence, then CITY shall have a right of first offer and right of first refusal as provided in section 12. 201
201 of 843
Site License Agreement for Battery Energy Storage System Site License Agreement (SLA) 32
[Insert Info]
12.7. If City exercises its option under §11.3(i), Licensee shall deliver clear title free of all liens within thirty (30) Days after Closing.
13. DEFAULTS AND REMEDIES
13.1. Events of Default. A default includes the following:
13.1.1 The failure by a Party to make any payment required under this SLA by the Due Date and if not cured by payment within one hundred eighty (180) calendar days after receiving notice from the other Party that payment is past due. Provisions regarding defaults of payment required under the Lease shall be governed by the terms of the Lease.
13.1.2 Any representation or warranty made by a Party to this SLA proves to have been false or misleading in any material respect when made or if such is a condition that is required to remain true in all material respects during the Term of this SLA, if not cured within fifteen (15) Business Days after written notice from the other Party.
13.1.3 The failure by Licensee to perform any obligation set forth in this SLA (other than the events that are otherwise specifically covered as a separate event of default), and such failure is not cured within thirty (30) calendar days or other such period as specified in this SLA after receipt of written notice of default from the CITY; or in the event of a default which cannot be cured within such thirty (30) calendar day period, if Licensee has not commenced and diligently prosecuted such cure within thirty (30) calendar days of written notice and thereafter and diligently prosecuted to cured such default within sixty (60) calendar days after receipt of written notice of default from the CITY.
13.1.4 Material damage of the System by the CITY necessitating uninsured repair costs for which Licensee is not reimbursed by the CITY within one hundred eighty (180) calendar days after presenting the CITY with documentation establishing such costs.
13.1.5 The CITY denying Licensee reasonable access to maintain and operate the System which results in decreased electricity production or other uncompensated damage to Licensee, and the CITY fails to compensate Licensee within one hundred eighty (180) calendar days of being invoiced for the loss.
13.1.6 A termination of the Lease as a consequence of a default by the CITY (which shall constitute a default by the CITY hereunder) or Licensee (which shall constitute a default by Licensee hereunder).
13.1.7 A Party makes an assignment or any general arrangement for the benefit of creditors; files a petition or otherwise commences, authorizes or acquiesces 202
202 of 843
Site License Agreement for Battery Energy Storage System Site License Agreement (SLA) 33
[Insert Info]
in the commencement of a proceeding or cause of action under any bankruptcy or similar law for the protection of creditors, or has such petition filed against it and such petition is not withdrawn or dismissed within twenty (20) Business Days after such filing; otherwise becomes bankrupt or insolvent (however evidenced); or is unable to pay its debts as they fall due.
13.1.8 An event of default by the CITY pursuant to any Senior Security Document that results in Licensee losing such access or other rights under this SLA as are reasonably necessary for Licensee to operate and maintain the System and continue to perform their obligations, and exercise their rights, under the Lease or this SLA.
13.2. Notice of Default. The non-defaulting Party shall provide the defaulting Party written notice of any alleged default hereunder, and such notice shall describe the alleged default. If Licensee is the defaulting party, Licensee shall be responsible for giving any Lender a copy of the notice of default; Licensee’s failure to give such notice to any Lender shall not invalidate non-defaulting Party’s notice of default.
13.3. Remedies for Default. A Party may terminate this SLA if the other Party is in default of this SLA and such default is not cured within the periods specified in section 13.1. Except as expressly stated otherwise in this SLA, the rights and remedies granted to the Parties pursuant to this SLA shall be the sole and exclusive remedies for a failure of a Party to perform its obligations hereunder.
13.4. The CITY’s Remedies. If Licensee’s default continues uncured following notice of default as required by this SLA, the CITY, along with all other rights and remedies they may have, shall have the specific following remedies:
13.4.1 Offset. The CITY shall have the right to offset any amounts due to the CITY under this SLA or the Lease, as applicable, against any amounts that the CITY may otherwise owe to Licensee as applicable.
13.4.2 CITY Termination of SLA. The CITY shall have the right to terminate this SLA pursuant to section 14.1. Upon the CITY’s written notice of termination, all of Licensee’s rights in the Licensed Area shall terminate.
Termination shall not relieve Licensee from the obligation to pay any sum then due to the CITY or from any claim for damages previously accrued or then accruing against Licensee or for the costs to remove and remediate the Licensed Area as provided in section 11.1. Upon any termination of this SLA under this subsection 13.4.2, Licensee shall execute such documents as the CITY may request to (i) memorialize the termination of this SLA; (ii) release of the CITY from all further obligations under this SLA; and (iii) extinguish Licensee rights and interest in the Licensed Area.
13.4.3 Recovery of Damages. The CITY shall be entitled to sums equal to the amount necessary to compensate the CITY for all damages caused by 203
203 of 843
Site License Agreement for Battery Energy Storage System Site License Agreement (SLA) 34
[Insert Info]
Licensee’s failure to perform Licensee’s obligations under this SLA including any detriment which in the ordinary course of events would be likely to result from Licensee’s failures.
13.4.4 System Removal. Promptly after notice of termination, Licensee shall fulfill its obligations in accordance with section 11.1 hereof.
13.4.5 Actions Regarding Licensee. In the event of default by assignee of Licensee or any successor to Licensee in the performance of the terms hereof, the CITY may proceed directly against Licensee without the necessity of exhausting remedies against such assignee.
13.4.6 CITY’s Option to Retain System on Licensee Default. If Licensee defaults on either this SLA or the Lease and fails to cure the default as provided by the terms of the respective agreement, the CITY has the option to obtain clear title and exclusive possession of the System pursuant to section 11.4, above.
13.5. Lender’s Rights. The CITY shall not take any action to terminate this SLA because of any default or breach by Licensee if any Lender, within thirty (30) calendar days after service of written notice that the CITY (while not yet electing its remedies) believes it may terminate this SLA for such default, shall give the CITY written notice that Lender shall:
13.5.1 Cure such default if the same can be cured by the payment or expenditure of money required to be paid under this SLA.
13.5.2 In the case of a default that cannot be cured unless and until the Lender has obtained possession, diligently pursue actions to obtain possession of the System (including possession by receiver) and to cure such default; that Lender shall not be required to continue such foreclosure proceedings if Licensee has in the meanwhile cured such default.
13.5.3 If such default is not curable under the foregoing subsections 13.5.1 and 13.5.2, shall institute and complete judicial or non-judicial foreclosure proceedings, or otherwise acquire Licensee’s interest hereunder with due diligence, and keep and perform all of the covenants and conditions of this SLA, including those requiring the payment or expenditure of money by Licensee, until such time as Lender shall have acquired Licensee’s interest in the System and this SLA.
13.5.4 Have the right, but not the obligation, at any time prior to termination of this SLA to pay any amounts due hereunder, to effect any insurance, to pay any taxes and assessments, to make any repairs, improvements, or to do any other act required of Licensee hereunder to prevent termination of this SLA.
All payments so made, and all things so done and performed by any Lender 204
204 of 843
Site License Agreement for Battery Energy Storage System Site License Agreement (SLA) 35
[Insert Info]
shall be as effective to prevent a termination of this SLA as the same would have been if made, done, and performed by Licensee instead of Lender.
13.5.5 If any Lender is prohibited by any process or injunction issued by any court or by reason of any action by any court having jurisdiction of any bankruptcy or insolvency proceeding involving Licensee or by an automatic stay thereunder from commencing or prosecuting foreclosure or any unlawful detainer action, the time specified in section 13.5 for terminating this SLA shall be extended for the period of such prohibition; provided that Lender shall have fully cured any default of Licensee which it is obligated to cure under this SLA. In the event that Lender fails or refuses to comply with the conditions of this subsection, the CITY shall then and thereupon be released from the covenant of forbearance contained in this subsection.
13.5.6 Upon Lender’s acquisition or possession of the System by foreclosure or by transfer or assignment pursuant to or in lieu of foreclosure, the CITY agrees to substitute the Lender or Lender’s nominee as the Substitute Licensee, provided that in the CITY’s sole reasonable judgment, Lender or Lender’s nominee, as the case may be, has satisfied all of the conditions and requirements applicable to Lender or Lender’s nominee meeting the requirements to be the Substitute Licensee under section 5.6 of this SLA.
This SLA shall continue in full force and effect for the remainder of the Term hereof and shall be on the same terms and conditions contained in this SLA.
If in the CITY’s sole reasonable judgment, Lender or Lender’s nominee does not satisfy one or more of the requirements in section 5.6, the CITY shall give Lender or Lender’s nominee written notice of such determination by the CITY which notice shall describe the deficiencies. Lender or Lender’s nominee shall have sixty (60) calendar days after the receipt of such notice from the CITY to cure the deficiencies noted by the CITY. In the event Lender or Lender’s nominee does not comply with the provisions of this subsection within such sixty (60) calendar day period, the CITY may terminate this SLA without further obligation to Licensee, Lender or Lender’s nominee.
13.6. Licensee’s Remedies. If any default by the CITY shall continue uncured following notice of default as required by this SLA, Licensee’s sole remedies are the following:
13.6.1 Licensee’s Termination of SLA. Except as specifically provided otherwise in this SLA, if the CITY defaults under this SLA, Licensee shall have the right to terminate this SLA immediately in writing. In that event, termination under this subsection shall not relieve the CITY from the obligation to pay any sum then due to Licensee or from any claim for damages previously accrued or then accruing against the CITY. Upon 205
205 of 843
Site License Agreement for Battery Energy Storage System Site License Agreement (SLA) 36
[Insert Info]
any termination of this SLA under this section 13.6.1, the CITY shall execute such documents as Licensee may request to memorialize the termination and to release Licensee from the terms and conditions of this SLA.
13.6.2 Termination Damages. If Licensee elects to terminate this SLA due to the CITY’s default, Licensee shall fulfill its obligation under section 11.1 of this SLA and thereafter the CITY shall pay Licensee Actual Damages.
14. EARLY TERMINATION
14.1. CITY’s Early Termination Rights
14.1.1 Before Construction. If prior to Licensee’s commencement of construction of the System, the CITY determines there are easements, covenants, conditions, restrictions, or any other liens or encumbrances that would materially impair or prevent the installation, operation, maintenance, or removal of the System, the CITY may terminate this SLA upon written notice to Licensee and no Party shall be deemed in default by such action and no Party shall have any further obligation to the other Parties. CITY shall be liable for any costs previously incurred by the Licensee.
14.1.2 Reserved
14.1.3 Upon termination of this SLA for default of the CITY, Licensee shall remove the System at its cost and restore the Licensed Area to its original condition, less normal wear and tear, pursuant to section 11.1 of this SLA.
After Licensee has removed the System and restored the Licensed Area, the CITY shall pay Licensee Actual Damages and 15% markup within sixty (60) calendar days of the CITY’s acceptance of the removal of the System and restoration of the Licensed Area.
14.1.4 For the purpose of this SLA and the Lease, the term “Actual Damages” shall mean those amounts set forth in the schedule attached hereto as Exhibit T.
14.2. Licensee Early Termination Rights. Licensee may terminate this SLA at any time prior to the Commercial Operation Date on thirty (30) calendar days written notice to the CITY if Licensee determines that the System cannot be built as planned or that its construction and operation would not be economically viable for Licensee including Licensee’s determination that the installation of the System is not economically viable. In the event that Licensee terminates this SLA pursuant to this section, no Party shall be in default solely as a result of Licensee’s election to terminate hereunder, and Licensee shall fulfill its obligations under section 11.1 of this SLA and CITY shall not pay Actual Damages, and the CITY shall not refund any Transaction Fee already received.
206
206 of 843
Site License Agreement for Battery Energy Storage System Site License Agreement (SLA) 37
[Insert Info]
14.3. Early Termination Due to Force Majeure. If a Force Majeure occurs, the affected Party shall promptly provide written notice to the other Party describing the nature of the event; the length of time it is expected to continue; and efforts (planned or under way) to overcome the effects of the event. The Parties shall cooperate in good faith to overcome the effects of the Force Majeure. The obligations of each Party shall be suspended for the continuance of any inability to perform caused by a Force Majeure, but for no longer period. If a Force Majeure prevents a Party from performing its obligations under this SLA and such event continues for more than three hundred sixty-five (365) calendar days, each Party may terminate this SLA after exhausting all options to resolve the matter in good faith and no Party shall be in default.
14.4. Permanent Shutdown of the Facility. If during the Term, through no fault of Licensee and for reasons other than a Force Majeure, the System is permanently shut down due to the CITY’s renovation, destruction, or closure of the Facility, the following provisions shall apply:
14.4.1 Notification. The CITY shall notify Licensee as soon as possible but in no event less than one hundred twenty (120) calendar days prior to the planned permanent Facility shutdown that will result in the shutdown of the System. The CITY shall provide written notice to Licensee indicating whether or not the CITY desires to relocate the System.
14.4.2 Relocation. The CITY and Licensee agree to negotiate in good faith to find an alternative location where Licensee and the CITY can relocate the System. If Licensee and the CITY can agree on such new location and if Licensee and the CITY agree that such new location has sufficient solar insolation to meet its EEP and PV Availability Guarantee in this SLA, then this SLA shall be amended by the Parties to substitute the alternative location as the Licensed Area, subject to the approval by the SPWB, and the CITY shall pay reasonable costs associated with relocation of the System.
14.4.3 No Adequate Alternative Site. If the CITY and Licensee cannot locate an alternative site that meets the requirements of subsection 14.4.2 but can mutually agree upon an alternative location which is inferior to the Licensed Area for purposes of solar installation, then the CITY and Licensee shall attempt to negotiate in good faith an adjustment in the Rent to compensate for the alternative location such that Licensee receives payments comparable to what it would have received from the System at the original Licensed Area. If the CITY and Licensee mutually agree to such change in Rent, then the Parties shall amend all relevant terms in this SLA and Leaseand Licensee shall proceed to relocate the System (or as much of System as practical) to the new location. If the Parties agree to such relocation, the CITY shall pay for the reasonable costs for Licensee to relocate the System.
207
207 of 843
Site License Agreement for Battery Energy Storage System Site License Agreement (SLA) 38
[Insert Info]
14.4.4 Termination due to Permanent Shutdown of the Site. If, within seventy-five (75) calendar days prior to date that the CITY will commence the permanent Facility shutdown for reasons set forth in section 14.4, the CITY and Licensee have not agreed upon an alternative location for the System, Licensee shall remove the System pursuant to section 11.1 of this SLA and CITY shall pay the Termination Value as per Exhibit-T.
15. GENERAL TERMS AND CONDITIONS
15.1. Inspections. The CITY shall be permitted access to inspect the System upon twenty-four (24) hours’ prior written notice to Licensee. The CITY personnel must be accompanied by personnel of Licensee during any non-emergency inspection of the System, unless Licensee agrees in writing to waive its right to accompany the CITY personnel on all non-emergency inspections. This requirement in no way prohibits the CITY from inspecting any and all portions of the Site and Licensed Area at any time.
15.2. Mechanic’s Lien / Stop Notices – Removal of Liens. Licensee shall not cause or permit any liens to attach or to be placed upon or encumber the Site, Licensed Area or Facility, or permit the filing of a stop notice against the CITY, arising from or resulting out of any work performed by Licensee or its contractor(s). If any such lien attaches, or stop notice is filed, Licensee agrees to cause the lien and/or stop notice to be removed within ten (10) Business Days of notification thereof by the posting of a stop notice release bond or lien release bond, payment of the lien, and/or stop notice lien or otherwise. If Licensee fails to remove the lien within this time period, in addition to its other remedies under this SLA, the CITY may undertake to cause such lien and/or stop notice to be removed and charge to Licensee any costs and expenses incurred in connection with the removal of said Lien. Licensee agrees to hold harmless, defend and indemnify the State, the CITY, and Court against all costs and expenses (including reasonable attorneys’ fees and court costs at trial and on appeal) incurred in discharging and releasing any such lien and/or stop notice. The CITY may record a Notice of Non-Responsibility and shall provide a copy of such to Licensee when recorded.
15.3. Protection of Facility, Site and Licensed Area. Licensee shall not do or permit to be done anything which will invalidate any fire, extended coverage, or other insurance policy covering the Facility, the Site, or the Licensed Area, the State or the CITY’s interest in the Facility, the Site, or the Licensed Area, or that will violate any warranty for the Facility, the Site, the Licensed Area, or roof if the System is roof-mounted. Licensee shall comply with all Applicable Laws and Regulations, and recommendations of the CITY or the State, including without limitation any risk management department or office or any other department or office performing a similar function.
208
208 of 843
Site License Agreement for Battery Energy Storage System Site License Agreement (SLA) 39
[Insert Info]
15.4. Facility Re-roofing (if roof-mounted System). If the System will be installed on a roof, the System shall be designed and installed such that it can be easily removed from the roof without damaging the existing roofing system or the solar generation System. It must also be installed in compliance with applicable code and standard.
15.5. Losses/Damages. The State and the CITY will not be responsible for losses or damage to personal property, equipment, or materials of Licensee at the Licensed Area. Licensee will hold harmless the State, the CITY, and the Court from any such losses or damages. All losses by Licensee at the Licensed Area shall be reported immediately to the CITY upon discovery by Licensee.
15.6. Health and Safety. Licensee shall take all necessary and reasonable safety precautions and shall comply with all Applicable Laws pertaining to the safety of persons and real and personal property at or on the Licensed Area and the operation of the System. Licensee shall immediately report to the CITY any death, loss time injury, or property damage to the CITY’s property that occurs within the Facility, the Site, the Licensed Area, or as part of Licensee’s operation of the System.
15.7. CITY System Repair Costs. If the CITY damages the System as a result of CITY’s operations, maintenance, repairs, or renovations of the Licensed Area, and for reasons other than an event that constitutes a Force Majeure, the CITY shall reimburse Licensee’s reasonable costs to repair the damage to the System to the extent such damage is not covered by Licensee’s insurance as required in section 9 of this SLA. If, in its sole opinion, CITY deems the costs to repair the System are unreasonable, then the CITY may elect to terminate this SLA and Licensee shall remove the System in accordance with Section 11.1 and the CITY shall pay Licensee Actual Damages in accordance with Section 14.1.4 of this SLA.
15.8. Damage Covered by Insurance. If during the Term, the System is wholly or partially destroyed or damaged by an event covered by insurance or required to be covered by insurance under this SLA, the Licensee shall use the proceeds of such insurance to restore the System to its original capacity. If Licensee reasonably determines that it is not economically feasible to restore the System after such loss event, Licensee shall give the CITY written notice of such determination as soon as practical. In that case, this SLA shall be terminated, and the CITY shall have no obligation to pay Actual Damages except as provided immediately below. Upon receipt of such notice of election by Licensee to terminate this SLA and abandon the System, the CITY shall have the option to take title to the System at no cost. In such event, the insurance proceeds shall be paid in the following order of priority:
15.8.1 First, to pay for the reasonable costs to remove the damaged System and restore the Licensed Area to its original condition as of the Effective Date save for normal wear and tear, as provided in section 11.1. If the insurance proceeds are insufficient, or there are no insurance proceeds as provided in this SLA to cover the costs to restore the Licensed Area, Licensee shall be responsible for removing the System and restoring the 209
209 of 843
Site License Agreement for Battery Energy Storage System Site License Agreement (SLA) 40
[Insert Info]
Licensed Area at Licensee’s sole cost to its original condition as of the Effective Date save for normal wear and tear, as provided in section 11.1.
15.8.2 Second, to Licensee, the amount equal to Actual Damages as of the date immediately preceding the casualty event minus the amount paid to remove the System pursuant to section 11.1.
15.8.3 Third, any remaining insurance proceeds shall be distributed fifty percent (50%) to Licensee and fifty percent (50%) to the CITY.
15.9. Condemnation. In the event that the whole or any portion of the System or Licensed Area is acquired or condemned by any authority or sold in lieu thereof, the CITY agrees to notify Licensee immediately of such condemnation or sale.
15.9.1 If Licensee or the CITY, in its own reasonable judgment, determines that it cannot continue to satisfy the terms and conditions in this SLA as a consequence of such condemnation or sale, either Party shall within thirty (30) calendar days of the CITY’s notice give the other Party written notice of its intent to terminate the Lease.
15.9.2 The entire award in any such condemnation proceeding or sale shall be and remain the property of the CITY, and Licensee hereby fully waives and relinquishes any right to seek an award or participate in the condemnation proceeding except and to the extent provided in subsections 15.8.3 and 15.8.4, below.
15.9.3 If either Party gives a termination notice as provided in subsection 15.9.1 and if the condemnation specifies a value or allocation attributable to the System, such amount shall be paid to Licensee and this SLA shall terminate with no further obligation on either Party other than Licensee’s obligation to remove the System as provided in section 11.1.
15.9.4 If the condemnation does not specify a value or allocation to the System, the Parties agree that the terms set forth in section 15.8 of this SLA shall apply as if the condemnation or sale were the same as an insured loss event and the proceeds from the condemnation shall be allocated in accordance with section 15.8 of this SLA except that any excess that would be paid to Licensee under subsection 15.8.3 shall be paid one hundred percent (100%) to the CITY. This SLA shall terminate with no further obligation on either Party other than Licensee’s obligation to remove the System as provided in section 11 hereof.
15.10. Limitation on Liability and Licensee Indemnification. The CITY and State shall not be liable for any debts, liabilities, settlements, liens, or any other obligations of Licensee or its heirs, successors, or assigns. Licensee shall indemnify, defend, and hold harmless the CITY and State, the Court and their judicial officers, officers, agents, and employees from and against any claims, damages, or expenses, 210
210 of 843
Site License Agreement for Battery Energy Storage System Site License Agreement (SLA) 41
[Insert Info]
including an amount equal to reasonable attorneys’ fees, and liabilities arising out of or in any way connected with this SLA for claims, damages, expenses, or liabilities for loss or damage to any property, or for any death or injury to any person or persons in proportion to and to the extent that such claims, damages, expenses, or liabilities arise from the negligence or willful acts or omissions of Licensee, or its officers, agents, employees, assigns, and successors.
16. OTHER TERMS AND CONDITIONS
16.1. Notices. Except as otherwise expressly provided in this SLA, all notices, and other communications to be given or made under this SLA shall be in writing and shall be personally delivered (including by means of professional messenger service) or sent by overnight courier, or sent by registered or certified mail, postage prepaid, return receipt requested to the addresses set forth below. Notices may also be delivered by electronic mail to the email address indicated below provided that the originator verifies that recipient has received such notice and originator delivers a copy of such notice to recipient using the means in the first sentence of this paragraph as soon as possible. All such notices or other communications shall be deemed received upon the earlier of:
(i) Personally delivered or sent by overnight courier, the date of delivery to the address of the person to receive such notice.
(ii) Mailed as provided above, on the date of receipt or rejection. (iii) Given by electronic email, when received by the other party if received between Monday through Friday between 9:00 a.m. and 5:00 p.m. so long as such day is not a State or federal holiday and otherwise, on the next Business Day.
To Licensee: LICENSEE: _____________________________
TITLE: _____________________________
ADDRESS: _____________________________
_____________________________
PHONE: _____________________________
EMAIL: _____________________________
To CITY OF LAGUNA BEACH:
ATTN: _____________________________
TITLE: _____________________________
ADDRESS: _____________________________
_____________________________
PHONE: _____________________________
EMAIL: _____________________________
211
211 of 843
Site License Agreement for Battery Energy Storage System Site License Agreement (SLA) 42
[Insert Info]
16.2. Amendment. No amendment or variation of the terms of this SLA shall be valid unless made in writing and signed by the Parties. No oral understanding or agreement not incorporated in this SLA is binding on any of the Parties.
16.3. Notification of Change in Parties. Licensee shall notify the CITY in writing within five (5) Business Days after any change in name, ownership, or control of Licensee. The provisions of this section 16.3 shall in no way relieve Licensee of its obligations under section 5 of this Agreement.
16.4. Taxes. Licensee, its successor, and assigns, shall pay all lawful taxes, including possessory interest or other tax, assessments, or charges that may at any time be levied upon any interest in the System, the Lease, or this SLA.
16.5. Audit. Licensee agrees that the CITY, the Bureau of State Audits, or their designated representative shall have the right to review and to copy any records and supporting documentation pertaining to the performance of this SLA including without limitation matters relating to the Lease. Licensee agrees to maintain such records for possible audit for a minimum of three (3) years after final payment, unless a longer period of records retention is stipulated. Licensee agrees to allow the auditor(s) access to such records during normal business hours after reasonable notice and to allow interviews of any employees who might reasonably have information related to such records. Further, Licensee agrees to include a similar right of the CITY to audit records and interview staff in any subcontract related to performance of this SLA.
16.6. Integration of Exhibits. This SLA, together with the Exhibits, constitute the entire agreement and understanding between the CITY and Licensee with respect to the subject matter hereof and supersedes all prior agreements relating to the subject matter hereof, which are of no further force or effect. The Exhibits and Schedules referred to herein are integral parts hereof and thereof and are made a part of this SLA by reference.
16.7. Reserved
16.8. Limited Effect of Waiver. The failure of the Parties to enforce any of the provisions of this SLA, or the waiver thereof in any instance shall not be construed as a general waiver or relinquishment on its part of any such provision, in any other instance or of any other provision in any instance.
16.9. Survival of Obligations. Notwithstanding expiration or earlier termination of this SLA, the Parties shall continue to be bound by the provisions of this SLA which by their nature survive such expiration or termination. Such provisions shall include, but not be limited to, section 3.13 (“No Infringement”), section 8.5 (“Liquidated Damages for Delay”), section 3.11 (“Hazardous Material”), section 15.2 212
212 of 843
Site License Agreement for Battery Energy Storage System Site License Agreement (SLA) 43
[Insert Info]
(“Mechanic’s Lien”), section 11 (“Removal of System”), section 13 (“Defaults and Remedies”), section 15.10 (“Limitation on Liability and Licensee Indemnification”), section 16.4 (“Taxes”) and other provisions of this SLA that, by their sense and context, are intended to survive termination of this SLA shall survive the expiration or termination of this SLA.
16.10. Relationship of Parties. The relationship between the CITY on the one hand, and Licensee, on the other hand, shall not be that of partners, agents, or joint ventures for one another, and nothing contained in this SLA shall be deemed to constitute a partnership or agency agreement between them for any purposes, including federal income tax purposes.
16.11. Independent Status. Licensee, and the agents and employees of Licensee, in the performance of this SLA, shall act in an independent capacity and not as officers or employees or agents of the State. Licensee is not entitled to unemployment or workers’ compensation benefits from the State.
16.12. Successors and Assigns. This SLA and the rights and obligations under this SLA shall be binding upon and shall inure to the benefit of the Parties and their respective permitted successors and assigns. Assignment of rights under this SLA shall comply with section 5 of this SLA.
16.13. Licensee Certifications. This SLA shall not be effective unless and until Licensee has executed the Licensee Certifications attached as Exhibit O to this SLA.
Licensee warrants that it will be in continual compliance with the provisions in Exhibit O throughout the Term of this SLA.
16.14. Non-Discrimination. During the performance of this SLA, Licensee and its subcontractor(s) shall not unlawfully discriminate, harass, or allow harassment against any employee or applicant for employment because of age (40 and over), ancestry, color, creed, disability (mental or physical) including HIV and AIDS, marital or domestic partner status, medical condition (including cancer and genetic characteristics), national origin, race, religion, request for family and medical care leave, sex (including gender and gender identity), and sexual orientation. Licensee and subcontractor(s) shall insure that the evaluation and treatment of their employees and applicants for employment are free from such discrimination and harassment. Licensee and subcontractor(s) shall comply with the provisions of the Fair Employment and Housing Act (Government Code section 12990(a)-(f) et seq.) and the applicable regulations promulgated thereunder (California Code of Regulations, Title 2, section 7285 et seq.). The applicable regulations of the Fair Employment and Housing Commission implementing Government Code section 12990(a)-(f), set forth in Chapter 5 of Division 4 of Title 2 of the California Code of Regulations, are incorporated into this SLA by reference and made a part hereof as if set forth in full. Licensee and its subcontractor(s) shall give written notice of their obligations under this clause to labor organizations with which they have a collective bargaining or other agreement. Licensee shall include the 213
213 of 843
Site License Agreement for Battery Energy Storage System Site License Agreement (SLA) 44
[Insert Info]
nondiscrimination and compliance provisions of this clause in all subcontracts to perform work under this SLA..
16.15. Employment of Undocumented Aliens. Licensee verifies and warrants that, in entering into this SLA with the CITY, Licensee has not, in the preceding five (5) years, been convicted of violating a state or federal law regarding the employment of undocumented aliens.
16.16. Child Support Compliance Act. “For any Agreement in excess of one hundred thousand dollars ($100,000), Licensee acknowledges in accordance with Public Contract Code section 7110, that:
16.16.1 Licensee recognizes the importance of child and family support obligations and shall fully comply with all applicable state and federal laws relating to child and family support enforcement, including, but not limited to, disclosure of information and compliance with earnings assignment orders, as provided in Chapter 8 (commencing with section 5200) of Part 5 of Division 9 of the Family Code; and
16.16.2 Licensee, to the best of its knowledge is fully complying with the earnings assignment orders of all employees and is providing the names of all new employees to the New Hire Registry maintained by the California Employment Development Department.”
16.17. Dispute Resolution. If a dispute arises between the Parties regarding this SLA, the Parties shall attempt in good faith to negotiate expeditiously a resolution to the dispute. The Parties agree:
16.17.1 To attempt to resolve all disputes arising hereunder promptly, equitably and in a good faith manner; and
16.17.2 Conduct negotiations through a representative or representatives of each Party who is authorized to act for the Party and resolve the dispute without resorting to higher authority.
16.17.3 Each Party has the right, at its sole expense and during normal working hours, to examine the records of the other Party to the extent reasonably necessary to verify the accuracy of any statement, charge or computation made pursuant to this SLA.
16.17.4 The exhaustion of the dispute resolution procedure provided for in section 16.17 is a condition precedent to the initiation of legal action in a court of law.
16.18. Severability; Unenforceable Provision. In the event that any provision of this SLA is unenforceable or held to be unenforceable, then the Parties agree that all other provisions of this SLA have force and effect and shall not be affected thereby. 214
214 of 843
Site License Agreement for Battery Energy Storage System Site License Agreement (SLA) 45
[Insert Info]
16.19. Governing Law. This SLA shall be governed and construed in accordance with the laws of the State of California.
16.20. Press Releases. To avoid any conflicts with fair trade rules regarding claims of solar or renewable energy use, each Party to this SLA shall submit to the other Parties for approval any press releases regarding the use of solar or renewable energy in connection with this SLA and shall not submit for publication any such releases without the written approval of the other Parties, which approval shall not be unreasonably withheld or delayed. The Parties may by mutual written agreement set forth specific statements that may be used by Licensee in any press releases that address Licensee’s use of solar or renewable energy provided pursuant to this SLA.
16.21. Confidentiality of Information
16.21.1 Identification. Any information provided by one Party to the other Party shall be deemed confidential or proprietary provided that such information is clearly labeled as “proprietary” or “confidential” and provided that such information so marked is in fact proprietary or confidential. If only parts of a document are deemed confidential or proprietary, then only those portions shall be identified and marked as such. This provision shall have no effect if the cover page or entire document is marked as confidential or proprietary when, in fact, much of such document does not so qualify.
16.21.2 Limitations of Confidential Information. Notwithstanding the foregoing, confidential information shall not include information (a) that was publicly available at the time of the disclosure thereof by one Party to the other; (b) that becomes publicly available other than through actions of the receiving Party in violation of this Agreement; or (c) that was in the possession of the receiving Party (without confidential or proprietary restriction) at the time of disclosure or that becomes available to the receiving Party from a source not subject to any obligation to keep such information confidential.
16.21.3 Restrictions on Use and Disclosure. Unless and until it receives the prior written consent of the disclosing Party, the receiving Party agrees (a) to hold all confidential information of the disclosing Party in strict confidence, (b) not to publish or otherwise disclose any such confidential information and (c) not to use, copy, reproduce, photograph, or otherwise make any image of such confidential information except as otherwise provided section 16.21.4.
16.21.4 CITY Disclosures. Licensee acknowledges that the CITY is a public agency and its obligations regarding disclosure of records are governed by California Rule of Court Rule 10-500 governing public access to judicial administrative records. Accordingly, any documents provided by 215
215 of 843
Site License Agreement for Battery Energy Storage System Site License Agreement (SLA) 46
[Insert Info]
Licensee related to the award or performance of this SLA or the Lease will only be held as “confidential” by the CITY if they are otherwise exempt from disclosure under California Rule of Court Rule 10-500.
If the CITY receives a request for information which includes information provided by Licensee, the party receiving the request will contact Licensee within five (5) days of receipt of the request. Should Licensee desire to keep the requested documents confidential and not disclosed, it is Licensee’s responsibility, at their sole cost and expense, to take all steps necessary to prevent disclosure. If Licensee fails to obtain a court order supporting nondisclosure, Licensee will not be entitled to make a claim or maintain any legal action against the CITY in connection with disclosure of any requested information.
16.21.5 Permitted Disclosures. Notwithstanding any restrictions herein, each Party may disclose confidential information received by it to its representatives, provided that such Party informs each such person who has access to the confidential information of its confidential nature and the terms of this SLA. The Party receiving confidential information shall use reasonable efforts to ensure that each representative complies with the terms of this SLA and that any confidential information received by such representative is kept confidential.
16.21.6 Survival. The provisions in this section 16.21 shall survive until the earlier of (i) two (2) years after the date that such confidential information was provided or (ii) two (2) years after the termination of this SLA.
16.22. Endorsement. Nothing contained in this SLA shall be construed as conferring on any Party hereto, any right to use the other Party’s name as an endorsement of product/service or to advertise, promote or otherwise market any product or service without the prior written consent of the other Party. Furthermore, nothing in this SLA shall be construed as endorsement of any commercial product or service by the State, its officers, or employees.
16.23. Covenant Against Gratuities. Licensee warrants that no gratuities (in the form of entertainment, gifts, or otherwise) were offered or given by Licensee, or any agent or representative of Licensee, to any officer or employee of the CITY or the State with a view toward securing this SLA or securing favorable treatment with respect to any determinations concerning the performance of this SLA. For breach or violation of this warranty, the CITY shall have the right to terminate this SLA, either in whole or in part, and any loss or damage sustained by the CITY or the State in procuring on the open market any items which Licensee agreed to supply shall be borne and paid for by Licensee.
16.24. No Conflict with the SLA. Licensee warrants that all other contracts and agreements (including warranties and guarantees) related to the System or 216
216 of 843
Site License Agreement for Battery Energy Storage System Site License Agreement (SLA) 47
[Insert Info]
Licensee’s business of designing, building, operating, maintaining, and financing the System shall contain no terms or provisions that conflict with this SLA. Upon the CITY’s written request, Licensee shall provide the CITY copies of all such agreements. Licensee shall notify the CITY in writing of all significant amendments to such agreements.
16.25. Counterparts. This SLA may be executed in counterparts (including PDF copies), each of which shall be deemed an original as against the Party signing such counterpart and which together shall constitute one and the same instrument. The Parties agree that the signature pages of this SLA may be executed, scanned, and transmitted electronically and electronic signatures shall be deemed original signatures for purposes of this SLA, with such scanned and electronic signatures having the same legal effect as original signatures.
16.26. Timeliness. Time is of the essence in this SLA.
16.27. Authority. The signatories hereto represent and warrant that they are duly authorized on behalf of their respective entities to enter into and consummate this SLA.
[SIGNATURES ON FOLLOWING PAGE(S)]
(The remainder of this page intentionally left blank.)
217
217 of 843
Site License Agreement for Battery Energy Storage System Site License Agreement (SLA) 48
[Insert Info]
IN WITNESS WHEREOF and in confirmation of their consent to the terms and conditions contained in this SLA, including Exhibits, and intending to be legally bound hereby, the CITY and Licensee execute this SLA as of the date below.
CITY OF LAGUNA BEACH, CALIFORNIA
BY: ____________________________________
NAME: _________________________________
TITLE: _________________________________
DATED: ________________________________
APPROVED AS TO FORM:
Legal Services
BY: _____________________________________
NAME: __________________________________
TITLE:
DATED: _________________________________
LICENSEE: [INSERT ENTITY NAME]
BY: _____________________________________
NAME: __________________________________
TITLE: __________________________________
DATED: _________________________________
218
218 of 843
Site License Agreement for Battery Energy Storage System List of Exhibits to [SLA]
EXHIBITS TO SLA
A. Definitions
B. Depiction of Licensed Area
C. Reserved
C-1 Reserved
C-2 Reserved
D. Reserved
E. License Access Procedures
F. Design and Installation Process and Milestone Schedule G. Prevailing Wage Certification
H. Prevailing Wage and Labor Requirements
I. As-Built Drawings and Other Technical Documents
J. Reserved
K. Reserved
L. Form of Lender Estoppel Certificate for Financing
M. Form of CITY Estoppel Certificate
N. Reserved
O. Licensee Certifications
P. Reserved
Q. Reserved
R. Reserved
S. Reserved
T. Contract Termination Schedule
219
219 of 843
Site License Agreement for Battery Energy Storage System Exhibit A to [SLA] 1
Definitions
EXHIBIT A
DEFINITIONS
1. “AC” means alternating current.
2. “Access Procedures” means the access procedures to the Site by Licensee set forth in Exhibit E of this SLA and as reasonably amended from time to time.
3. “Actual Damages” shall mean those amounts set forth in the schedule attached to the SLA as Exhibit T.
4. “Additional Term” means the increase in term length agreed to by the parties beyond the Initial Term as set forth in section 2 of this SLA or the Lease.
5. “Affiliate” means, with respect to Licensee, any other entity directly or indirectly controlling, controlled by or under common control with Licensee.
6. “Alterations” means changes to, replacement of, or alteration to the System, erection of additions, or structures in or upon the System as further defined in section 8.9.
7. “ANSI” means American National Standards Institute.
8. “Applicable Law(s)” means any and all applicable federal, state, and local laws, codes, ordinances, rules, and Regulations, and all issued permits and licenses.
9. “As-Built Drawings” means Licensee’s annotated set, both hard and electronic copy, of Construction Documents that have been contemporaneously revised by Licensee during the course of the System’s installation and construction to identify changes to the System subsequent to the approval of the Construction Documents so as to record the actual physical constructed condition.
10. “As-Is” means the term used to notify Licensee that no express or implied warranty regarding the Site and Licensed Area is provided by the CITY. Licensee therefore takes the Site and Licensed Area at Licensee’s own risk, without recourse against the CITY or State for their condition or performance.
11. “ASME” means American Society of Mechanical Engineers.
12. “BESS” means Battery Energy Storage System as defined in BESS Lease Agreement
13. “BESS Capacity Guarantee” means the capacity of energy the BESS is capable of storing as defined in BESS Lease Agreement.
220
220 of 843
Site License Agreement for Battery Energy Storage System Exhibit A to [SLA] 2
Definitions
14. “BESS Capacity Damages” means the amount the Lessor will credit to the CITY in the event of under performance of the BESS Capacity Guarantee.
15. “Billing Cycle” means the period in which Licensee shall bill the CITY for the BESS Equipment Lease Rent, which shall be on a calendar month basis following the Notice of Commercial Operation.
16. “Business Day” means any day other than a Saturday, a Sunday or State holiday. The use of “day” otherwise means calendar day.
17. “California Solar Initiative” or “CSI” means the solar rebate program for State consumers who are customers of the investor-owned utilities - Pacific Gas & Electric, Southern California Edison, and San Diego Gas & Electric.
18. “CEC” means the California Energy Commission.
19. “CEQA” means the California Environmental Quality Act which is a State environmental law.
20. “Collateral Assignment” means an assignment to the Lender of certain rights and interests in the System owned by Licensee during the Term.
21. “Commercial Operation Date” or “COD” means the date that Licensee notifies the CITY the System is operational.
22. “Construction Documents” mean the design drawings, specifications, general conditions, supplementary general conditions, special conditions, addenda, and change orders developed to convey in detail the design, function and construction of the System.
23. “Construction Start Date” means the date that Licensee commences construction of the System, such date to be specified by written notice to the CITY as provided in section
8.2. 24. “Contract Year” means each twelve-month period commencing on the COD and each anniversary thereof; the last Contract Year may be less than twelve months in the event of any early termination of this SLA.
25. “County” means the county in which the Project is located.
26. “Court” means the Court of the County in which the Project is located.
27. “CPUC” means the California Public Utilities Commission.
28. “DC” means direct current.
221
221 of 843
Site License Agreement for Battery Energy Storage System Exhibit A to [SLA] 3
Definitions
29. “Demand Response” refers to energy resource programs designed to avoid brownouts and blackouts by compensating electricity users for reducing consumption when demand for electricity is high and system reliability is at risk.
30. “Demand Reduction Event” means an event in which the Court is required to close or cease regular operations for twenty (20) or more days in any given Billing Cycle, not including regular Court holidays.
31. “Departing Load” means the portion of the incumbent utility’s electric customer’s load for which the customer, discontinues, or reduces its purchases of bundled or direct access electricity service from the incumbent electric utility, and/or purchases electricity supplied by customer generation to replace incumbent electric utility or direct access purchases, whilst remaining physically located at a particular electric utility service area.
32. “Due Date” means forty-five (45) calendar days after receipt by the CITY of Licensee’s invoice for Rent under the Solar Equipment Lease.
33. “Expected Energy Storage Capacity” or “EESC” means the expected BESS storage capacity in kWh DC that Licensee will make available to the CITY and warrantied as defined in BESS Lease Agreement.
34. “Effective Date” means the first day on which this SLA and the Lease have been fully executed by the parties identified therein and consented to by the SPWB.
35. “Electricity” means electrical energy, measured in kilowatts and kilowatt-hours AC that is produced by the System and delivered by Licensee to the CITY at the Electrical Interconnection Point and that conforms to the applicable utility and/or authoritative regulatory body standards and to the conditions specified in this SLA.
36. “Electrical Interconnection Point” means the point(s) specified in the System design where the System connects to the existing electrical distribution line(s) serving the Site.
37. “Emergency” means an imminent threat requiring immediate action to prevent or mitigate the loss or impairment of life, health, property, or essential public services.
38. “Energy Management System” means a computer application system used by facility operators to monitor, control, and optimize the performance of the electricity and/or transmission system.
39. “Environmental Attributes” means any and all credits, offsets and other benefits related to the avoidance of the emission of any gas, chemical or other substance into the air, soil, or water resulting from the use of solar generation including but not limited, to Renewable Energy Credits (“RECs”) and any similar benefits for which a market may exist now, or at a future time, and all reporting rights with respect to the Environmental Attributes. Federal Investment Tax Credits are not Environmental Attributes for the 222
222 of 843
Site License Agreement for Battery Energy Storage System Exhibit A to [SLA] 4
Definitions
purposes of this Agreement. All Environmental Attributes generated by the System vest exclusively in City; Licensee shall execute all documents necessary to transfer or perfect City’s title thereto.
40. “Expected Electricity Production” or “EEP” means the expected System electricity output in kWh that Licensee expects the system to deliver to the CITY as provided in BESS Lease Agreement
41. “Exhibits” means Exhibits A through T attached to this SLA and incorporated by reference in this SLA as set forth in section 16.6 of this SLA.
42. “Facility” means the land, buildings, structures, or other improvements located on the Site.
43. “Federal Investment Tax Credits” shall mean any and all (a) depreciation benefits, (b) investment tax credits, (c) production tax credits and (d) similar tax credits or grants under federal, state, or local law relating to the construction, ownership, or production of electric energy from the Solar PV System.
44. “First Offer Notice” has the meaning ascribed to such term in section 12. 1 of this SLA.
45. “First Refusal Notice” has the meaning ascribed to such term in section 12.1 of this SLA.
46. “Force Majeure” means any event or circumstance which wholly or partly prevents or delays the performance of any material obligation arising under this SLA, but only if and to the extent (i) such event is not within the reasonable control, directly or indirectly, of the Party seeking to have its performance obligation(s) excused thereby, (ii) the Party seeking to have its performance obligation(s) excused thereby has taken all reasonable precautions and measures in order to prevent or avoid such event and mitigate the effect of such event on such Party’s ability to perform its obligations under this SLA and which by the exercise of due diligence such Party could not reasonably have been expected to avoid and which by the exercise of due diligence it has been unable to overcome, and (iii) such event is not the direct or indirect result of the negligence of or the failure to perform under this SLA by, or caused by, the Party seeking to have its performance obligations excused thereby; provided further, that such event is within or similar to one or more of the following categories: condemnation; expropriation; invasion; plague; drought; landslide; tornado; hurricane; unusually severe weather; tsunami; volcano; flood; lightning; earthquake; fire; explosion; epidemic (with the exception of the Covid19 pandemic as set forth below); quarantine; war (declared or undeclared), terrorism or other armed conflict; strikes and other labor disputes; riot or similar civil disturbance or commotion; other acts of God; acts of the public enemy; blockade; insurrection, sabotage or vandalism; embargoes; and actions of a governmental authority (other than in respect of Licensee’s compliance with: Applicable Laws in effect as of the Effective Date or actually passed as law but not yet in full force and effect as of the Effective Date; and permits, licenses and other approvals required under Applicable Laws in effect as of the 223
223 of 843
Site License Agreement for Battery Energy Storage System Exhibit A to [SLA] 5
Definitions
Effective Date, or laws enacted but not yet in full force and effect as of the Effective Date, in connection with Licensee’s performance under this SLA). Force Majeure does not include (i) the failure to pay moneys due under this SLA; (ii) the lack of wind, sun, or other fuel source of an inherently intermittent nature; (iii) reductions in generation from the System resulting from ordinary wear and tear, deferred maintenance, or operator error; or (iv) the Covid-19 pandemic, and any related impacts or events.
47. “Guaranteed Completion Date” shall be three hundred sixty-five (365) calendar days after the CITY’s issuance of Notice to Proceed to Licensee as provided in section 8.2 and subject to extensions, if any, as mutually agreed by the Parties in writing.
48. “Hazardous Material” means without limitation: (a) any chemical, compound, or substance that is defined or listed in, or otherwise classified pursuant to, any federal or State law as a “hazardous substance,” “hazardous waste,” “hazardous material,” “radioactive waste,” “infectious waste,” “biohazardous waste,” “toxic substance,” pollutant, or contaminant; (b) petroleum, natural gas, liquefied natural gas, synthetic gas usable as fuel; (c) “hazardous substance” as defined in section 2528l(h) of the California Health and Safety Code; (e) “waste” as defined in section 13050(d} of the California Water Code; (f) asbestos containing materials; and (g) any other material that, because of its quantity, concentration, or physical or chemical characteristics, poses a significant present or potential hazard to human health and safety or to the environment if released into the workplace of the environment. “Hazardous Material” does not include the foregoing to the extent that they are (i) contained in products that are commercially available in the United States of America; and (ii) used in quantities or concentrations that do not violate federal or State environmental law.
49. “IEEE” means Institute of Electrical and Electronics Engineers.
50. “Initial Term” means the term of the contract initially contracted for without the additional terms.
51. “Interconnection Agreement(s)” means any interconnection agreement described in section 7.9.1 of this SLA.
52. “CITY” means the CITY of Laguna Beach, California.
53. “CITY Estoppel Certificate” means an estoppel certificate substantially in the form of Exhibit M.
54. “kW” means kilowatt (which is 1,000 Watts) of electrical capacity measured in AC.
55. “kWh” means kW-hour and is a unit of energy equal to one thousand watt-hours. 224
224 of 843
Site License Agreement for Battery Energy Storage System Exhibit A to [SLA] 6
Definitions
56. “Lender” means any financial institution, equity financing holder, or other reasonably qualified provider of capital (and successors in interest and assignees permitted under this SLA), or System Lessor that provides or is requested to provide development, bridge, construction, term debt, or tax equity financing or refinancing for the System on behalf of Licensee.
57. “Lender Estoppel Certificate” means an estoppel certificate substantially in the form of Exhibit L.
58. “Licensed Area” means the portion of the Site licensed by the CITY to Licensee to install, operate, and maintain the System as provided in this SLA and as further described in Exhibit B.
59. “Licensee” means the entity identified on Page 1 of this SLA, who holds the license to use the Licensed Area for the Permitted Use pursuant to this SLA.
60. “Meter” means a device capable of collecting electricity consumption data that includes kWh AC and fifteen (15) minute or less kW AC and KVAR demands as recorded and may be transmitted or collected via telephone lines or wireless telephone.
61. “Minor Field Changes” means changes or deviations from the CITY approved System plans, System drawings or Construction Documents that do not materially deviate from or affect the design, construction, installation, operation, or aesthetics of the System as originally approved by the CITY.
62. “NFPA” means National Fire Protection Association.
63. “Net Energy Metering” or “NEM” means a Utility tariff or rule under which customers with qualifying renewable energy projects may “bank” the value of renewable energy produced in periods when such production exceeds the customer’s usage during that period and allows the customer to benefit from such “banked” value during periods when the renewable energy production is less than the customer’s usage.
64. “Notice of COD” means the notice that Licensee gives the CITY stating that the System has been completed and specifying the Commercial Operation Date.
65. “Notice to Proceed” means written notification from the CITY to Licensee that Licensee may begin construction of the System subject to the terms and conditions of this SLA.
66. “O&M Services” means those operations and maintenance services described in BESS Lease Agreement.
67. “Parties” means the CITY and Licensee each of whom may also be referred to as “Party.”
68. “Permitted Use” has the meaning ascribed to such term in section 3.1 of this SLA. 225
225 of 843
Site License Agreement for Battery Energy Storage System Exhibit A to [SLA] 7
Definitions
69. “Permittee” or “Permittees” shall have the meanings ascribed to such terms in section 3.1 of this SLA.
70. “Project” means the design, construction, maintenance, and operation of the System.
71. “Project Manual” means System documentation which includes, but is not limited to, System schematics, equipment data sheets, Construction Documents, As-Built Drawings, and System operation and emergency instructions provided by Licensee to the CITY pursuant to section 8.8 of this SLA.
72. “PTC” means PVUSA test Conditions.
73. “PV” means photovoltaic.
74. “PV System Availability Guarantee” means the weighted availability of each PV inverter which is measured as the percent of time that inverter is online while the site global horizontal irradiance is greater than 100W/m2.
75. “PV System Availability Damages” means the amount the Contractor will credit to the CITY in the event of under performance of the PV System Availability Guarantee.
76. “PV System” means the integrated assembly of photovoltaic panels, parking canopy structures, mounting assemblies, inverters, converters, metering, lighting fixtures, transformers, ballasts, disconnects, combiners, switches, wiring devices and wiring, alterations, materials, spares, tools, supplies, equipment (as specified in the Project Manual) installed in or located at the Licensed Area for the purpose of generating the Electricity.
77. “Qualified Purchaser” has the meaning ascribed to such term in section 5.2 of this SLA.
78. “Qualified Reporting Entity” means an organization providing renewable generation data for the purpose of creating WREGIS Certificates that has met the Qualified Reporting Entity guidelines established in appendix D of the WREGIS operating rules.
79. “Related Facilities” collectively means the land, buildings, structures, or other facilities on which or in which the System is constructed, installed, or situated.
80. “Regulations” have the meaning ascribed to such term in section 3.5 of this SLA.
81. “Renewable Energy Credit(s)” means renewable energy credit(s) or certificates, emission reduction credits, emission allowances, green tags, tradable renewable credits, and Green-e products related to renewable energy production supplied from the System. 226
226 of 843
Site License Agreement for Battery Energy Storage System Exhibit A to [SLA] 8
Definitions
82. “Rent” means the rent payable under the BESS Equipment Lease for lease of the equipment and for the performance of operations and maintenance services.
83. “Rule 21” means the Utility rule describing the interconnection, operating, and metering requirements for generating facilities to be connected to the Utility distribution system.
84. “Senior Security Documents” means any and all financing documents, leases, indentures, or other financing agreements entered into in the past, the present, or the future by the SPWB, State, or any subdivision of the State concerning any part of the Licensed Area, the Site, or the Facility.
85. “Site” has the meaning ascribed to such term in the Recitals to this SLA, an area of which is identified as the Licensed Area in this SLA, which is further described in Exhibit B to this SLA, which will accommodate the System.
86. “Site Representative” means the person designated by the CITY as the representative of the CITY to whom Licensee should address all notices and inquiries required under this SLA.
87. “SREC” means Solar Renewable Energy Credit under the WREGIS system.
88. “State” has the meaning ascribed to such term in the Recitals to this SLA.
89. “State Public Works Board” or “SPWB” means the State Public Works Board created by the State Legislature to oversee the fiscal matters associated with construction of projects for State agencies, and to select and acquire real property for state facilities and programs.
90. “Standby Charges” means rates electric utilities use to cover their costs for selfgeneration customers.
91. “Substitute Lessor” means the Lender, or any other party nominated by Lender and approved by the CITY in accordance with section 14.4 of the Lease, which party shall be substituted for the Licensee under the Lease.
92. “Substitute Licensee” means the Lender or any other qualified purchaser of, or successor to, the interests of Lender in a judicial or non-judicial foreclosure sale or otherwise that meets the conditions of assignment set forth in section 5.6 and shall be substituted for Licensee under this SLA.
93. “System” means the integrated project deliverables that encompass BESS in the Lease Agreement.
94. “System Lease” means a financing lease, including a sale-leaseback, between a Lender and Licensee whereby Licensee leases the System from the Lender strictly as a financing 227
227 of 843
Site License Agreement for Battery Energy Storage System Exhibit A to [SLA] 9
Definitions
arrangement. As set forth in section 4, the System Lease shall not encumber or constitute a lien in the Facility, the Site, or the Licensed Area.
95. “System Lessor” means the person or entity that owns the System and leases the System to Licensee as the lessor under the System Lease.
96. “Term” means the period that shall commence on the Effective Date and continue for the stated period years from the Commercial Operation Date of the System unless terminated earlier pursuant to the provisions in this SLA and may be added to with additional terms.
97. “Termination Date” means the date on which this SLA terminates.
98. “THD” means total harmonic distortion.
99. “Tier One” means the minimum equipment standards pursuant to California Public Resources Code sections 25780–25784 and/or CSI which are the minimum acceptable equipment standards as of the date of the Notice to Proceed under this SLA for installation of the System.
100. “Transaction Fee” means the non-refundable fee to be paid by Licensee to the CITY as provided in section 7.7 and further described in Exhibit P. 101. “UL” means Underwriters Laboratories, Inc.
102. “Utility” means the utility or any other party owning or controlling the electric utility transmission or distribution system to which the Site or the System will be interconnected.
103. “Watt” means a unit of power equal to one (1) joule per second; the power dissipated by a current of one (1) ampere flowing across a resistance of one (1) ohm. 104. “Western Renewable Energy Generation Information System” or “WREGIS” means the renewable energy accounting system developed in response to policies set by the State Legislature and the Western Governors’ Association and implemented by the Western Energy Coordination Council to track and verify renewable facilities compliance with the Renewable Portfolio Standards.
228
228 of 843
Site License Agreement for Battery Energy Storage System Exhibit B to [SLA]
Depiction of Licensed Area
EXHIBIT B
DEPICTION OF LICENSED AREA
Insert description of the limits of the Licensed Area along with an aerial image depicting the BESS Area at time of contracting.
[The Depiction of Licensed Area will include marked-up plans provided for each project location.
The Depiction of Licensed Area will include System’s locations and will specify approximate square footage of the Licensed Area as indicated on the layout drawings. For Systems that are not installed on a rooftop, Licensee shall survey/measure the Licensed Area and submit a final metes and bounds survey as part of the submitted plans for review and approval. After the survey and plans are approved by the CITY, this SLA will be amended to include the metes and bounds description.]
(System Layout/Area – Fire Station 2)
229
229 of 843
Site License Agreement for Battery Energy Storage System Exhibit B to [SLA]
Depiction of Licensed Area
(System Layout/Area – Fire Station 3)
230
230 of 843
Site License Agreement for Battery Energy Storage System Exhibit C to [SLA]
Technology Description
EXHIBIT C
RESERVED
231
231 of 843
Site License Agreement for Battery Energy Storage System Exhibit C-1 to [SLA]
EXHIBIT C-1
RESERVED
232
232 of 843
Site License Agreement for Battery Energy Storage System Exhibit C-2 to [SLA] 1
EXHIBIT C-2
RESERVED
233
233 of 843
Site License Agreement for Battery Energy Storage System Exhibit D to [SLA]
EXHIBIT D
RESERVED
234
234 of 843
Site License Agreement for Battery Energy Storage System Exhibit E to [SLA] 1
License Access Procedures
EXHIBIT E
LICENSE ACCESS PROCEDURES
Access Procedures for the Site and the Licensed Area
All access requests will be coordinated by CITY’s Customer Service Center (CSC). Access requests must be called in and e-mailed to the CSC by an approved representative of Licensee.
Licensee will need to identify its approved representatives in advance including employees and agents of any of its subcontractors. Licensee Workers without security clearance and required badging will not be permitted to enter or remain in any non-public area of the CITY’s property at any time without a CITY designated or approved security escort. Any work which would reasonably disrupt court operations in any way will need to be scheduled after hours. Upon entry to the Licensed Area, Licensee Workers will sign and date the CITY’s “Request for Access” form (see copy below) when presented.
Non-Emergency Access Requests: Non-emergency access requests must be called in and emailed to the CSC at least seventy-two (72) hours in advance of the requested service date. Any missed appointment will be charged as one hour of time at the rate applicable to the scheduled start time of the visit.
Emergency Service Calls: Emergency appointments will be coordinated by the CSC within two (2) hours after receipt of a request for access. Any missed appointment will be charged as four (4) hours of time at the rate applicable to the scheduled start time of the visit.
To initiate a request for access, Licensee’s approved representative will:
1. Complete section 1 of CITY’s “Request for Access” form (see copy below) and email to ________________; AND ALSO
2. Call the CSC at ________________ (this will expedite the process) More detailed instructions are provided below.
235
235 of 843
Site License Agreement for Battery Energy Storage System Exhibit F to [SLA] 1
Design and Installation Process/Milestone Schedule
EXHIBIT F
DESIGN AND INSTALLATION PROCESS AND MILESTONE SCHEDULE
To be listed in this Exhibit are Project design, construction and installation requirements, constraints and specifications that are deemed to be necessary by the CITY, and the outcome of the CEQA review. Licensee understands that the Project design, construction, and installation documents will address these special considerations and be included in the review process by either the CITY’s Real Estate Services Division (RESD/CITY) or by the CITY’s designated review team for compliance.
Licensee understands that all System design documents and engineering calculations will be submitted under the authority of a licensed professional engineer (or engineers) that is certified to practice in the State and is a professional engineer in good standing. Licensee also understands that System design documents and engineering calculations that are submitted for review without the appropriate professional engineering stamp will not be reviewed and will be returned to Licensee as incomplete and insufficient System documentation.
System design documents will include, but not be limited to, the following:
1. System layout
2. System schematics
3. Single line electrical diagram
4. Point of Interconnection schematics
5. Point of Interconnection single line electrical diagram
6. Construction plans (electrical, architectural, structural, civil, mechanical, lighting, etc.)
7. Building information modeling for parking canopy installations
8. Structural calculations
9. List of Equipment and Materials Schedule
10. Construction schedule
11. Geotechnical Report / Soils Analysis/Foundation Recommendations as applicable Licensee acknowledges that the System will be designed to comply with all applicable California Building Codes and Standards. System design documents will expressly state and identify the applicable building codes and standards.
The following DEVELOPMENT table represents a general overview of the review and approval of the Project design and construction documentation. A preliminary construction schedule is 236
236 of 843
Site License Agreement for Battery Energy Storage System Exhibit F to [SLA] 2
Design and Installation Process/Milestone Schedule
required to be submitted by the Licensee as part of the Schematic design documents. This table assumes that the CEQA review has been completed, that due diligence has been completed, as required, and that both this SLA and the Lease have been duly signed and executed.
Initiation of the INSTALLATION AND CONSTRUCTION tasks and/or activities as outlined in that table is contingent upon the issuance of a Notice to Proceed to Project Design letter from the CITY. Coordination between the submitted preliminary construction schedule, the CITY’s review and approval process, and the final construction schedule shall be based on best efforts by both the CITY and Licensee and established in a cooperative manner.1 Preliminary Project Construction Schedule
Task
ID Task Name Duration Finish
1 Notice to Proceed (NTP) 0 Weeks Dec 31, 2025
2 50% drawings due to Site Host 6 Weeks Feb 11, 2026
3 100% drawings due to Site Host 4 Weeks Mar 11, 2026
4 Major Equipment Order Date 2 Weeks Mar 25, 2026
5 Permit Received 36 Weeks Dec 02, 2026
6 Construction Start/Battery on Site 10 Weeks Feb 10, 2027 7 Electrical & Mechanical Completion 4 Weeks Mar 10, 2027 8 Interconnection Sign-off 2 Weeks Mar 24, 2027
9 Testing & Commissioning Completion 1 Weeks Mar 31, 2027 10 Utility Meter and Rate Switch Submittal 1 Weeks Apr 07, 2027 11 Permission to Operate Date 4 Weeks May 05, 2027
12 Final Project Completion Date 2 Weeks May 19, 2027
1 City’s NTP may be issued only after Council approval of a Work Order for the applicable Site. 237
237 of 843
Site License Agreement for Battery Energy Storage System Exhibit G to [SLA]
Prevailing Wage Certification
EXHIBIT G
PREVAILING WAGE CERTIFICATION
PROJECT/CONTRACT NO.: [PROJECT NUMBER] between CITY of California (the “CITY”) and (the “Licensee”) (the “Contract” or
the “Project”).
I hereby certify that I will conform to the State of California Public Works Contract requirements regarding prevailing wages, benefits, on-site audits with forty-eight (48) hours’ notice, payroll records, and apprentice and trainee employment requirements, for all work on the Project including, without limitation, the requirement that Licensee and all of its subcontractor(s) are registered pursuant to Labor Code section 1771, et seq.
Date:
Proper Name of Licensee:
/ Subcontractor(s)
Licensee’s DIR Public
Works Registration #
Signature:
Print Name:
Title:
THIS FORM MUST BE COMPLETED BY THE LICENSEE.
PRIOR TO COMMENCING ANY WORK, LICENSEE SHALL ENSURE THAT ALL SUBCONTRACTOR(S) HAVE EXECUTED AND PROVIDED THIS FORM TO THE CITY.
END OF DOCUMENT
238
238 of 843
Site License Agreement for Battery Energy Storage System Exhibit H to [SLA] 1
Prevailing Wage and Labor Requirements
EXHIBIT H
PREVAILING WAGE AND LABOR REQUIREMENTS
1. Prevailing Wage.
1.1. Licensee and all subcontractors shall pay all workers on work performed pursuant to this Agreement (“Work”) not less than the general prevailing rate of per diem wages and the general prevailing rate for holiday and overtime work as determined by the Director of the Department of Industrial Relations, State of California (“DIR”), for the type of work performed and the locality in which the work is to be performed, pursuant to sections 1770 et seq. of the Labor Code. Copies of the general prevailing rates of per diem wages for each craft, classification, or type of worker needed to execute the Agreement, as determined by Director of the DIR, are on file at the CITY’s principal office. Prevailing wage rates are also available on the internet at http://www.dir.ca.gov.
1.2. Licensee shall ensure that Licensee and all subcontractors have each executed and provided to the CITY prior to commencing any Work a Prevailing Wage and Related Labor Requirements Certification.
1.3. Projects may be subject to compliance monitoring and enforcement by the DIR.
Licensee shall post job site notices, as prescribed by regulation. Licensee shall comply with all requirements of Labor Code section 1771.4, except the requirements that are exempted by the Labor Commissioner for the Project.
2. Registration.
2.1. Licensee shall comply with the registration and compliance monitoring provisions of Labor Code section 1771.4, including furnishing its certified payroll records (“CPR(s)”) to the Labor Commissioner of California and complying with any applicable enforcement by the DIR. Labor Code section 1771.1(a) states the following:
A contractor or subcontractor shall not be qualified to bid on, be listed in a bid proposal, subject to the requirements of Section 4104 of the Public Contract Code, or engage in the performance of any contract for public work, as defined in this chapter, unless currently registered and qualified to perform public work pursuant to Section 1725.5. It is not a violation of this section for an unregistered contractor to submit a bid that is authorized by Section 7029.1 of the Business and Professions Code or by Section 10164 or 20103.5 of the Public Contract Code, provided the contractor is registered to perform public work pursuant to Section 1725.5 at the time the contract is awarded.
239
239 of 843
Site License Agreement for Battery Energy Storage System Exhibit H to [SLA] 2
Prevailing Wage and Labor Requirements
2.2. Licensee shall ensure that Licensee and all subcontractors (which shall include any “contractor” and “subcontractor” as defined in Labor Code section 1722.1 for purposes of these provisions) comply with Labor Code section 1725.5, including without limitation the registration requirements with the DIR that are set forth in Labor Code section 1725.5. Licensee represents that all “subcontractors are registered pursuant to Labor Code section 1725.5. Licensee shall not permit any subcontractor to perform Work without first verifying the subcontractor is properly registered with the DIR as required by law and providing this information in writing to the CITY. Licensee acknowledges that, for purposes of Labor Code section 1725.5, the Work may be public work to which Labor Code section 1771 applies.
3. Hours of Work.
3.1. Notwithstanding the timing and duration of the Work which is subject to court activities and other coordination required for occupied facilities, as provided in Labor Code section 1810 et seq., eight (8) hours of labor shall constitute a legal day’s work. The time of service of any worker employed at any time by Licensee or by any subcontractor on any subcontract under this Agreement upon the Work or upon any part of the Work contemplated by this Agreement shall be limited and restricted by Licensee to eight (8) hours per day, and forty (40) hours during any one (1) week, except as hereinafter provided. Notwithstanding the foregoing provisions, Work performed by employees of Licensee in excess of eight (8) hours per day and forty (40) hours during any one (1) week shall be permitted upon any public work upon compensation for all hours worked in excess of eight (8) hours per day at not less than one and one-half (1.5) times the basic rate of pay.
3.2. Licensee shall keep and shall cause each subcontractor to keep an accurate record showing the name of and actual hours worked each calendar day and each calendar week by each worker employed in connection with the Work or any part of the Work contemplated by this Agreement. The record shall be kept open at all reasonable hours to the inspection of the CITY and to the Division of Labor Standards Enforcement of the DIR.
3.3. Pursuant to Labor Code section 1813, Licensee shall as a penalty to the CITY forfeit the statutory amount for each worker employed in the execution of this Agreement by Licensee or by any subcontractor for each calendar day during which such worker is required or permitted to work more than eight (8) hours in any one calendar day and forty (40) hours in any one calendar week in violation of the provisions of Labor Code section 1810 et seq. or other law.
3.4. Any Work necessary to be performed after regular working hours, or on Sundays or other holidays shall be performed without additional expense to the CITY. 240
240 of 843
Site License Agreement for Battery Energy Storage System Exhibit H to [SLA] 3
Prevailing Wage and Labor Requirements
3.5. Work will typically take place in an occupied court facility; therefore, work hours may be restricted depending upon the nature of the Project. Unless otherwise provided in this Agreement, Work must take place during business hours.
4. Payroll Records.
4.1. Licensee and all subcontractors shall comply with the compliance monitoring provisions of Labor Code section 1771.4, including furnishing its CPRs to the Labor Commissioner of California and complying with any applicable enforcement by DIR. Labor Code section 1771.4 requires Licensee and subcontractors to provide electronic copies of CPRs to the Labor Commissioner of California at least once every thirty (30) days, and within thirty (30) days of project completion, the failure to timely provide the CPRs could result in penalties of up to five thousand dollars ($5,000), or as otherwise determined by Labor Code section 1771.4, applicable laws, and regulations.
4.2. In addition to submitting CPRs to the Labor Commissioner of California pursuant to Labor Code section 1771.4 or any other applicable law, if requested by the CITY, Licensee shall provide, and shall cause each subcontractor performing any portion of the Work to provide the CITY with the CPRs showing the name, address, social security number, work classification, straight time, and overtime hours worked each day and week, and the actual per diem wages paid to each journeyman, apprentice, worker, or other employee employed by Licensee and/or each subcontractor in connection with the Work.
4.3. All CPRs shall be available for inspection at all reasonable hours at the principal office of Licensee on the following basis:
4.3.1. A certified copy of an employee’s CPR shall be made available for inspection or furnished to the employee or his/her authorized representative on request.
4.3.2. CPRs shall be made available for inspection or furnished upon request to a representative of the CITY, Division of Labor Standards Enforcement, Division of Apprenticeship Standards, and/or the DIR.
4.3.3. CPRs shall be made available upon request by the public for inspection or copies thereof made; provided, however, that a request by the public shall be made through either the CITY, Division of Apprenticeship Standards, or the Division of Labor Standards Enforcement. If the requested CPRs have not been provided pursuant to the provisions herein, the requesting party shall, prior to being provided the records, reimburse the costs of preparation by Licensee, subcontractors, and the entity through which the request was made. The public shall not be given access to the records at the principal office of Licensee.
4.4. The form of certification for the CPRs shall be as follows:
241
241 of 843
Site License Agreement for Battery Energy Storage System Exhibit H to [SLA] 4
Prevailing Wage and Labor Requirements
I, (Name-Print),
the undersigned, am the
(Position in business) with the authority to act for and on behalf of (Name of Licensee and/or
subcontractor), certify under penalty of perjury that the records or copies thereof submitted and consisting of
(Description, number of pages) are
the originals or true, full, and correct copies of the originals which depict the payroll record(s) of actual disbursements by way of cash, check, or whatever form to the individual or individual named, and (b) we have complied with the requirements of sections 1771, 1811, and 1815 of the Labor Code for any work performed by our employees on the project.
Date: Signature:
(Section 16401 of Title 8 of the California Code of Regulations)
4.5. Each Licensee shall file a certified copy of the CPRs with the entity that requested the records within ten (10) days after receipt of a written request.
4.6. Any records made available for inspection as copies and furnished upon request to the public or any public agency by the CITY, Division of Apprenticeship Standards, or Division of Labor Standards Enforcement shall be marked or obliterated in such a manner as to prevent disclosure of an individual’s name, address, and social security number. The name and address of Licensee awarded this Agreement or performing this Agreement shall not be marked or obliterated.
4.7. Licensee shall inform the CITY of the location of the records enumerated hereunder, including the street address, city, and county, and shall, within five (5) Business Days, provide a notice of change of location and address.
4.8. In the event of noncompliance with the requirements of this section, Licensee shall have ten (10) days in which to comply subsequent to receipt of written notice specifying in what respects Licensee must comply with this section. Should noncompliance still be evident after the ten (10) day period, Licensee shall, as a penalty to the CITY forfeit one hundred dollars ($100) for each calendar day, or portion thereof, for each worker, until strict compliance is effectuated. Upon the request of Division of Apprenticeship Standards or Division of Labor Standards Enforcement, these penalties shall be withheld from progress payments then due.
4.9. It shall be the responsibility of Licensee to ensure compliance with the provisions of Labor Code section 1776.
5. Apprentices.
242
242 of 843
Site License Agreement for Battery Energy Storage System Exhibit H to [SLA] 5
Prevailing Wage and Labor Requirements
5.1. Licensee acknowledges and agrees that, if this Agreement involves a dollar amount greater than or a number of working days greater than that specified in Labor Code section 1777.5, then this Agreement is governed by the provisions of Labor Code section 1777.5. It shall be the responsibility of Licensee to ensure compliance with this section and with Labor Code section 1777.5 for all apprenticeship occupations.
5.2. Apprentices of any crafts or trades may be employed and, when required by Labor Code section 1777.5, shall be employed provided they are properly registered in full compliance with the provisions of the Labor Code.
5.3. Every such apprentice shall be paid the standard wage paid to apprentices under the regulations of the craft or trade at which he/she is employed, and shall be employed only at the work of the craft or trade to which she/he is registered.
5.4. Only apprentices, as defined in Labor Code section 3077, who are in training under apprenticeship standards and written apprentice agreements under chapter 4 (commencing at section 3070), division 3, of the Labor Code, are eligible to be employed. The employment and training of each apprentice shall be in accordance with the provisions of the apprenticeship standards and apprentice agreements under which the apprentice is training.
5.5. Pursuant to Labor Code section 1777.5, if that section applies to this Agreement as indicated above, Licensee and any subcontractors employing workers in any apprenticeable craft or trade in performing any Work under this Agreement shall apply to the applicable joint apprenticeship committee for a certificate approving Licensee or subcontractor under the applicable apprenticeship standards and fixing the ratio of apprentices to journeymen employed in performing the Work.
5.6. Pursuant to Labor Code section 1777.5, if that section applies to this Agreement as indicated above, Licensee and any subcontractor may be required to make contributions to the apprenticeship program.
5.7. If Licensee or subcontractor willfully fails to comply with Labor Code section 1777.5, then, upon a determination of noncompliance by the Administrator of Apprenticeship, it shall:
5.7.1. Be denied the right to bid or propose on any subsequent project for one (1) year from the date of such determination; and
5.7.2. Forfeit as a penalty to the CITY the full amount as stated in Labor Code section 1777.7. Interpretation and enforcement of these provisions shall be in accordance with the rules and procedures of the California Apprenticeship Council and under the authority of the Chief of the Division of Apprenticeship Standards.
243
243 of 843
Site License Agreement for Battery Energy Storage System Exhibit H to [SLA] 6
Prevailing Wage and Labor Requirements
5.8. Licensee and all subcontractors shall comply with Labor Code section 1777.6, which section forbids certain discriminatory practices in the employment of apprentices.
5.9. Licensee shall become fully acquainted with the law regarding apprentices prior to commencement of the Work. Special attention is directed to sections 1777.5, 1777.6, and 1777.7 of the Labor Code, and title 8, California Code of Regulations, section 200 et seq. Questions may be directed to the State Division of Apprenticeship Standards, 455 Golden Gate Avenue, San Francisco, California 94102.
5.10. Licensee shall ensure compliance with all certification requirements for all workers performing Work including, without limitation, the requirements for electrician certification in Labor Code section 108 et seq.
244
244 of 843
Site License Agreement for Battery Energy Storage System Exhibit I to [SLA]
As-Built Drawings and other Technical Documents and Specifications
EXHIBIT I
AS-BUILT DRAWINGS AND OTHER TECHNICAL DOCUMENTS AND
SPECIFICATIONS
This Exhibit will contain the System design and Construction Documents which will reflect the final installed System in the As-Built Drawings. Licensee shall submit preliminary Project design documents, including metes and bounds survey.
245
245 of 843
Site License Agreement for Battery Energy Storage System Exhibit J to [SLA]
General Installation Requirements
EXHIBIT J
RESERVED
246
246 of 843
Site License Agreement for Battery Energy Storage System Exhibit K to [SLA]
Minimum Structural Requirements
EXHIBIT K
RESERVED
247
247 of 843
Site License Agreement for Battery Energy Storage System Exhibit L to [SLA] 1
Form of Lender Estoppel Certificate for Financing
EXHIBIT L
FORM OF LENDER ESTOPPEL CERTIFICATE FOR FINANCING
Licensed Area: ____________________________
Site License Agreement (SLA) Number: _________________ (the “License”) Dated:_____________, 20__, between the State of California, acting by and through the CITY of Laguna Beach, California (the “CITY”) and __________________________ (“Licensee”).
1. The undersigned, Lender [or Assignee], certifies to the CITY, that it is: (i) a holder or proposed holder of a note or other obligation secured, or to be secured, by a mortgage or deed of trust or other security interest in the above SLA, the System and the Solar Equipment Lease (“Lease”), or (ii) is the assignee under a sale-leaseback financing structure of the SLA and the System (collectively the “Lender Financing Documents”).
2. Licensee [or Assignee] agrees and acknowledges that the State owns the fee simple title to the Licensed Area and that the SLA, the License, the System and the Lease are not real property interests but are personal property interests that Licensee may transfer and assign with the expressed written approval of the CITY as provided in the SLA. Lender [or Assignee] acknowledges and agrees that nothing in the SLA or the Lease constitutes a mortgage, charge, assignment, transfer, pledge, lien, or encumbrance upon the Licensed Area, the Site, or the Facility.
The SLA, Lease and Lender Financing Documents are junior and subordinate to the Senior Security Documents as provided in section 4 of the SLA.
3. The address for notices to be sent to the Lender is:
______________________________
______________________________
______________________________
______________________________
In the event of any inaccuracy in the information set forth in this certificate, Lender or Assignee shall be estopped to deny the accuracy thereof as to the CITY and their successors and assigns. Any capitalized terms used herein and not otherwise defined shall have the meaning set forth in the SLA.
248
248 of 843
Site License Agreement for Battery Energy Storage System Exhibit L to [SLA] 2
Form of Lender Estoppel Certificate for Financing
Dated: _____________, 20__
Lender or [Assignee]:
__________________________________
BY: ______________________________
Its: _______________________________
249
249 of 843
Site License Agreement for Battery Energy Storage System Exhibit M to [SLA] 1
Form of LAGUNA BEACH Estoppel Certificate
EXHIBIT M
FORM OF CITY ESTOPPEL CERTIFICATE
Licensed Area: _________________________________________ Site License Agreement (SLA) Number:______________ (the “License”) Dated:_________________, 20__, between the CITY of Laguna Beach, California (the “CITY”) and __________________________, “Licensee.”
The undersigned, the CITY, licensor under the SLA, certifies to the certificate holder, _________________________, holder or proposed holder of a note or other obligation secured, or to be secured, by a mortgage or deed of trust upon Licensed Area, the System and/or the Solar Equipment Lease (“Lease”) and to the assignee, collateral assignee, or proposed assignee of said SLA, that;
1. The SLA is presently in full force and effect and unmodified except as indicated at the end of this certificate.
2. The Term of the SLA commenced on __________, 20__, and will expire on the date that is __ Years from the Commencement Operation Date as defined in said SLA.
3. Licensee’s obligations under said SLA, including those incorporated by reference in the Lease, if applicable, have been met through the date of signature hereon.
4. The address for notices to be sent to the undersigned is as set forth in said SLA or as set forth below.
5. To the best of the CITY’s knowledge, Licensee is not in default under the SLA, nor do any conditions exist or has any event occurred that, given the giving of notice or the passage of time, would ripen into a default under the SLA.
6. To the best of the CITY’s knowledge, it is not in default under the SLA, nor do any conditions exist or has any event occurred that, given the giving of notice or the passage of time, would ripen into a default under the SLA, except as set forth below.
7. The CITY has the right and authority to enter into, execute, deliver, and perform its obligations under the SLA and this certificate.
8. [Insert any other certifications or information reasonably requested and agreed to by Licensee and the CITY.]
In the event of any inaccuracy in the information set forth in this certificate, the CITY shall be estopped to deny the accuracy thereof as to the certificate holder named above, its successors and assigns. Any capitalized terms used herein and not otherwise defined shall have the meaning set forth the SLA.
250
250 of 843
Site License Agreement for Battery Energy Storage System Exhibit M to [SLA] 2
Form of LAGUNA BEACH Estoppel Certificate
Dated: _____________, 20___
CITY:
CITY OF LAGUNA BEACH, CALIFORNIA
By: ______________________
Name: ____________________
Title: _____________________
Approved as to form:
By: ______________________
Name: ____________________
Title: _____________________
251
251 of 843
Site License Agreement for Battery Energy Storage System Exhibit N to [SLA]
Reserved
EXHIBIT N
RESERVED
252
252 of 843
Site License Agreement for Battery Energy Storage System Exhibit O to [SLA] 1
Licensee Certifications
EXHIBIT O
LICENSEE CERTIFICATIONS
I, the official named below, CERTIFY UNDER PENALTY OF PERJURY that I am duly authorized to legally bind the prospective Licensee to the clause(s) listed below. This certification is made under the laws of the State of California.
Licensee Firm Name (Printed) Federal ID Number
By (Authorized Signature)
Printed Name and Title of Person Signing
Date Executed
Executed in the County of
LICENSEE CERTIFICATION CLAUSES
1. General Provisions
1.1 Qualifications. Licensee shall assign to this Project only persons who have sufficient training, education, and experience to successfully perform Licensee’s duties. The contractor(s) performing construction work under the Agreements must hold a valid State of California Class B, general building license, Class C-10, electrical license, and/or a Class C-46, solar contractor’s license, as applicable. All applicable contractors’ licenses must be valid at the time of commencing construction work and must remain valid throughout the duration of the construction work. If the CITY is dissatisfied with any of Licensee’s personnel, for any or no reason, Licensee shall replace them with qualified personnel.
1.2 Background Checks. Licensee shall cooperate with the CITY to perform any background checks on Licensee’s personnel by obtaining, at no additional cost, all releases, waivers, and permissions the CITY may require. Licensee shall not assign personnel who refuse to undergo a background check. Licensee shall provide prompt notice to the CITY of (i) any person who refuses to undergo a background check, and (ii) the results of any background check requested by the CITY and performed by Licensee. Licensee shall ensure that the following persons are not assigned to perform services for the CITY: (a) any person refusing to undergo such background checks, and (b) any person whose background check results are unacceptable to Licensee or that, after disclosure to the CITY, the CITY advises are unacceptable to the CITY.
1.2.1. DOJ and DMV Requirements. Notwithstanding anything in this Contract to the contrary, Licensee must comply with background check and 253
253 of 843
Site License Agreement for Battery Energy Storage System Exhibit O to [SLA] 2
Licensee Certifications
clearance requirements of the DOJ and the DMV relating to any employee of either Licensee or subcontractor(s) who has physical access to any area which is either connected to, or contains records from the following databases: the DOJ criminal computer database, including the California Law Enforcement Telecommunications System (CLETS) and the Criminal Offender Record Information (CORI), and the DMV computer database. If requested by either the Court or the CITY, Licensee must provide to either the Court or the CITY suitable documentation evidencing Licensee’s compliance with the policies, practices, and procedures of the DOJ and the DMV regarding background check and clearance requirements relating to access to these databases.
1.2.2. Costs. Licensee will be liable for all costs associated with escorting an unscreened employee (i.e., any employee who is not an Approved Person).
Emergency or other unplanned access arrangements for any unscreened employees shall incur the escorting charges described in Exhibit E (License Access Procedures). Upon completion of the work, the CITY will bill Licensee for those costs incurred by the CITY identified below in providing the security escort. Licensee will not receive additional compensation or reimbursement from the CITY for any costs related to escorting. The CITY will pay for the cost of the background check (e.g., Live Scan), however, the Licensee will be responsible for employee time, fingerprinting fees, local administrative or processing fees, or other costs. See Exhibit E (License Access Procedures).
1.2.3. Access to Project Site. Only Approved Persons may have unescorted access to (i) the restricted areas of a Project site and (ii) any area of the Project site, during non-business hours when there is no security screening available. Licensee and subcontractor(s) employees who are not Approved Persons may be granted access to Restricted Areas, only after formal written approval by the CITY, and only if they are to be escorted by an Approved Person at all times that they are in the Restricted Areas, or through the arrangements described in Exhibit E (License Access Procedures).
Licensee may not rely upon an employee of the Court to escort or monitor these persons. Licensee must take all reasonable steps to ensure that its operations in any Restricted Area are at all times consistent with this section (“Access to Project Site”). Costs related to access and escorting of personnel that are not Approved Persons are defined in Exhibit E (License Access Procedures). These costs will be chargeable to the Licensee by the CITY.
1.2.4. Notification. Licensee must notify all subcontractor(s) that (i) the CITY requires a background check for personnel working in Restricted Areas without an escort pursuant to this Background Checks provision, (ii) the Court may have supplemental screening procedures, criteria, and 254
254 of 843
Site License Agreement for Battery Energy Storage System Exhibit O to [SLA] 3
Licensee Certifications
requirements, and (iii) subcontractor(s) employees must comply with both the CITY’s and the Courts’ checks and procedures.
1.2.5. RESERVED
2. RESERVED lifornia R
3. RESERVED
255
255 of 843
Site License Agreement for Battery Energy Storage System Exhibit P to [SLA]
EXHIBIT P
RESERVED
256
256 of 843
Site License Agreement for Battery Energy Storage System Exhibit Q to [SLA]
EXHIBIT Q
RESERVED
257
257 of 843
Site License Agreement for Battery Energy Storage System Exhibit R to [SLA]
EXHIBIT R
RESERVED
258
258 of 843
Site License Agreement for Battery Energy Storage System Exhibit S to [SLA] 1
EXHIBIT S
RESERVED
259
259 of 843
Site License Agreement for Battery Energy Storage System Exhibit T to [SLA]
Contract Termination Schedule
EXHIBIT T
CONTRACT TERMINATION SCHEDULE
Contract
Period
Year
Contract Early
Termination Value for
Fire Station 2
($)
Contract Early
Termination Value for
Fire Station 3
($)
0 $401,950 $185,787
1 $377,397 $175,796
2 $352,843 $165,805
3 $328,290 $155,814
4 $303,737 $145,823
5 $279,183 $135,832
6 $254,630 $125,841
7 $245,306 $121,267
8 $235,330 $116,372
9 $224,655 $111,135
10 $213,233 $105,532
11 $201,011 $99,536
12 $187,934 $93,120
13 $173,941 $86,256
14 $158,969 $78,911
15 $142,949 $71,052
16 $125,807 $62,642
17 $107,466 $53,644
18 $87,840 $44,016
19 $66,841 $33,714
20 $44,372 $22,691
260
260 of 843
Site License Agreement for Battery Energy Storage System Exhibit U to [SLA]
EXHIBIT U
RESERVED
261
261 of 843
Laguna Beach City Council Minutes April 8, 2025
Public Testimony: Perry Mead, United Here Local 11, stated that they supported the current process, and they suggested amendments to the zoning code. He said they did not support the staff recommended modifications.
Ann Christoph listed her suggestions.
The City Council provided direction on the draft Revised Design Review Efficiency Ordinance, including directing that the revisions go next to the Laguna Beach Planning Commission; and provided further direction as to possible changes that may be included in the pending Comprehensive Zoning Code Update.
18. AUTHORIZATION TO PROCEED WITH PHASED MICROGRID DEPLOYMENT
USING A HYBRID SOLAR PURCHASE AND BATTERY LEASE MODEL FOR
CERTAIN CITY FACILITIES
Presentation and Discussion: Staff and the consultant gave a presentation and responded to Councilmembers' questions.
Moved by Mayor Alex Rounaghi, seconded by Councilmember Sue Kempf, and carried unanimously 5/0 to:
(1) Approve proceeding with microgrid implementation under the PV Direct Purchase BESS Lease model, Option 3, for a 24-hour ride-through at Fire Stations 2 and 3; +
(2) Authorize staff to prepare an agreement with Staten Solar for microgrid deployment which includes:
a. Phase I (FY 2025)
i. Fire Station 2
ii. Fire Station 3
b. Phase II: All other sites to be included in the 10-year CIP, with a goal of completion by 2033 to maximize the Investment Tax Credit 30% threshold program; and (3) Direct staff to monitor changes in technology costs, grant opportunities, and site conditions, and return to Council with updates or proposed adjustments to the deployment strategy as needed.
COUNCILMEMBER ITEM(S)
****************************
In accordance with Resolution #24.011, the City Council supported Mayor Alex Rounaghi's request to consider an agenda item on term limits for all committees, boards, and commissions. -10-
Attachment 4
262
262 of 843
STAFF REPORT
Meeting Date:
December 9, 2025
BUSINESS
22 SUBJECT: QUALIFICATION OF INITIATIVE MEASURE PROPOSING TO ENACT CITY
COUNCIL TERM LIMITS
RECOMMENDATIONS: It is recommended that the City Council:
1. Receive, file, and accept the certification of sufficiency of petition of signatures as valid in all respects for the Ballot Measure Initiative titled "AN ORDINANCE OF THE PEOPLE OF THE CITY OF LAGUNA BEACH, CALIFORNIA, ADDING SECTION 2.04.080 TO THE LAGUNA
BEACH MUNICIPAL CODE TO ESTABLISH TERM LIMITS FOR CITY COUNCIL MEMBERS";
2. Adopt the Resolution, titled, ”A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
LAGUNA BEACH, CALIFORNIA, SUBMITTING TO THE QUALIFIED VOTERS OF THE CITY OF LAGUNA BEACH ON THE NOVEMBER 3, 2026 GENERAL MUNICIPAL ELECTION BALLOT AN INITIATIVE MEASURE AMENDING THE CITY’S MUNICIPAL CODE TO ENACT CITY COUNCIL TERM LIMITS; REQUESTING THE COUNTY OF
ORANGE TO CONSOLIDATE SAID ELECTION WITH THE STATEWIDE GENERAL ELECTION OF EVEN DATE; AND SETTING RULES AND DEADLINES FOR ARGUMENTS AND REBUTTALS FOR AND AGAINST THE MEASURE.”
SUMMARY OF THE MATTER
On April 29, 2025, the City Clerk’s Office received a Notice of Intent to circulate an initiative petition from the initiative proponents (the “proponents”) seeking to qualify a measure in Laguna Beach that would enact City Council term limits. The initiative is written to set a two consecutive term limit with a two-year “cooling off” period before a person could again seek City Council office.
In accordance with California Elections Code Section 9203, the City Attorney prepared a Ballot Title and Summary for the proposed measure, and on May 28, 2025, the City Clerk submitted the Ballot Title and Summary to the initiative proponents and notified them of the 180-day signature gathering period to file a signed petition with the City Clerk’s Office. Pursuant to California Elections Code Section 9215, the initiative petition must be signed by not less than 10% of the registered voters of the City to qualify the measure for the ballot. Per the Orange Registrar Recorder/County Clerk’s (“OC Registrar”) official report of registration to the Secretary of State at the time the notice of intention was published, the number of registered voters in Laguna Beach was 18,179.
1 of 26
QUALIFICATION OF INITIATIVE MEASURE PROPOSING TO ENACT CITY COUNCIL
TERM LIMITS
December 9, 2025