Paramount City Council
December 12, 2023

October 31, 2023
John King, AICP
Assistant Planning Director
City of Paramount
16400 Colorado Avenue
Paramount, CA 90723
RE: Commercial Design Guidelines Update Proposal
Dear John,
GRUENASSOCIATES (Gruen) appreciates the opportunity to submit our proposal to provide Planning Services for the Paramount Commercial Design Guidelines Update project. Gruen is passionate about architecture and urban design, active transportation, and walkable communities which will serve as a great benefit to achieve the City of Paramount’s goals. Gruen has experience and a distinguished record of preparing award-winning Specific Plans, design guidelines, TOD/TOC plans, planning, streetscape design, landscape architecture and design, master planning, and bikeways/greenways design. We are also committed to public engagement events that allow residents and key stakeholders to shape the transformation and improvements of their neighborhoods through economic development in commercial areas, mixed-use and multi-modal access.

Our team is familiar with Paramount and surrounding areas due to our work on the West Santa Ana Branch Transit Corridor Station Area and Vision Plan and the North Paramount Gateway Specific Plan for the City of Paramount. In addition to our specific plans, our team offers the following experience providing guidelines and standards solutions for other public agencies and commercial corridors:
• The Los Angeles Countywide Objective Design Standards • The County of Los Angeles Transit Oriented District Design Guidelines • Exposition Corridor Transit Neighborhood Plans (Expo TNP) and Five Streetscape Plans Under the leadership of Project Manager Orlando Gonzalez, a Senior Associate and Senior Planner of the firm, Gruen delivered the approved and recently-adopted North Paramount Gateway Specific Plan, informed by the Eco-Rapid Vision Study he delivered for Paramount, and is completing a Specific Plan for the City of Simi Valley and updates to Long Beach’s Downtown Plan for conversion to a Specific Plan. Orlando was also the Project Manager on the recently completed, approved and APA-awardwinning City of Chino Downtown Civic Center Master Plan.

UNDERSTANDING THE PROJECT AND APPROACH
The City of Paramount requested a proposal from Gruen Associates to develop design guidelines for the Central Business District and other commercially zoned properties in the C-3 zone and C-M zones of the City. The design guidelines will primarily address aesthetics and will evaluate and update where appropriate per the Central District Architecture Guidelines prepared in 1984. They will also provide new guidelines such as those that address the relationship of buildings to the arterial streets including buildings that “frame“ the streetscape creating a vibrant, attractive pedestrian environment and a sense of place.

Gruen Associates reviewed the City’s land use map, the Central District Architecture Guidelines and the streetscape character ofParamount Boulevard andAlondraBoulevard. Paramount Boulevard's recently constructed, attractive streetscape depicts a “Boulevard of Gardens” and integrating the private property along the streetscape will be critical. Keeping in mind the intent of the guidelines outlined in the RFP, Gruen Associates’ approach will be to work collaboratively with City staff from the beginning to understand and address the following:
• An efficient and inclusive outreach process.
• The text and graphic portions of the current design guidelines that are appropriate today, guidelines to be updated, and new guidelines needed.
• Existing and unique streetscape and active transportation character envisioned for the arterials adjacent to commercially zoned properties.
• Connectivity from the public to the private realm.
• If the 1980’s clay tiles, tile roofs, masonry plasters, rustic wood plaster and glass with overhangs should remain as the dominant style, or if more diverse architectural treatment and material opportunities should be provided.
• The City’s current and planned project and design review approval process.

Through an understanding of the City’s goals and the community/business outreach, Gruen Associates will prepare a draft and final graphically-rich design guidelines document that combines concise text, diagrams, maps, relevant sketches from the current document, new design guidelines, 2D and 3D drawings, and an example photo illustrating the guidelines.

SCOPE OF SERVICE
Gruen is flexible and will work with the City of Paramount to develop a refined scope of work and schedule as necessary.

TASK 1.0 – Project Coordination, Research and Outreach
TASK 1.1 - Project Coordination Kick-Off Meeting
Gruen Associates will participate in a kickoff meeting arranged by the City. The goals of the kickoff meeting are as follows:
• Meet with representatives from the City of Paramount staff, as determined by the client. • Discuss City’s goals and objectives for the project and City’s guiding principles. • Review the preliminary scope of work and schedule, and key issues to be addressed. • Discuss roles and responsibilities.
• Obtain City staff reports, existing conditions data and information relevant for the project. • DiscussPreliminary Outreach Plan activities and schedule. • Establish invoicing requirements.
• Schedule a standing date and time for monthly check-in meetings.

Check-in Meetings
Gruen Associates will work with the City to establish a standing date and time for monthly check-in meetings. The scope assumes up to (4) meetings. These meetings can be held via conference call and/or Gruen’s Zoom or Teams meetings capabilities. The Gruen Project Manager will provide an update on current tasks and activities and discuss other issues with the City’s project manager and other participants asappropriate.

Monthly Invoices
Gruen will submit monthly invoices and brief progress reports to the City for review and payment.

TASK 1.2 Research
Gruen will review the staff reports, zoning standards/land-use for C-3 and CM zones, other existing condition data, current commercial design guidelines, and other information provided by the City at the Kickoff meeting or before.

On the same day as the kickoff meeting, Gruen Associates staff will visit the downtown commercial area and take site photos. City staff are welcome to visit the site with Gruen Associates to help identify issues to address in the design guidelines.

Gruen’s staff will spend up to one day identifying and reviewing recent designs guidelines and standards as precedent for the city of Paramount commercial guidelines.

TASK 1.3 Outreach
The Outreach Plan formulation will be a collaborative process involving Gruen Associates and City staff at the kickoff meeting plus an additional follow up phone call. It will be a focused outreach action plan for the City that effectively captures feedback on project goals and key design issues.

Once the Outreach Plan is established, Gruen Associates will be responsible for facilitating community workshops/meetings and preparing graphic materials such as PowerPoints or boards for the workshops. Gruen Associates will also provide material to be placed by City staff on the City’s website.

It is envisioned that City staff will beresponsible for identifying key stakeholders from local businesses and others in the community, sending out invitations to meetings/workshops, advertisements, arranging venues, and providing input from City public officials and staff.

This proposal assumes two in-person workshops, one to understand information that needs to be addressed and modified in the current commercial design guidelines and another to review draft recommendations. Also, included is up to a half day of interviews with business interests or virtual meetings with representatives such as members of the Design Review Board, the Chamber of Commerce, developers and others. Gruen Associates is flexible to adjust this assumed program and address the City needs within the budget established for this task.

Deliverables
• Kick off meeting with City staff.
• Monthly check-in meeting to discuss project status (4 virtual meetings). • Site photos
• List of precedent design guidelines.
• Community Workshops (2)
• Business outreach virtual meeting (1) or DRB meeting (1). • Workshop materials, sign in sheet, agendas, presentations, meeting minutes, one page marketing fact sheet and noticing flyers for workshops for City to post on website and in other locations.

TASK 2.0 Draft Design Guidelines
Gruen Associates recently completed the Los Angeles Countywide Objective Design Standards, the County of Los Angeles Transit Oriented District Design Guidelines, and guidelines and standards for several specific plans. These guidelines/standards help property owners, residents, businesses, and agencies to understand the intent and rationale behind the standards and include not only building/site design on private property but also guidelines to promote an active environment of walking, cycling

and the use of transit. Guidelines/standards are organized into major topic categories. Gruen envisions using a similar approach for the City of Paramount.

As mentioned in our approach, Gruen Associates will start with the current City of Paramount Central Business District Architectural Guidelines which include over 25 different categories and were prepared in 1984. Among these categories are site access, parking and landscape of parking lots, setbacks, site planning, landmarks, parks, scenery, trash receptacles, street furniture, paving, colors, materials, forms, properties, uniformity, landscaping lighting, rear facades, site entries, security of buildings, signs, and service areas. Gruen will also ensure consistency with the City's Public Art Master Plan and the Central District Sign Guidelines by integrating the appropriate references to those documents within the major topics of the Commercial Design Guidelines outlined below. Additionally, Gruen will provide limited content in the form of precedent image examples in support of the Public Art Master Plan and the Central District Sign Guidelines.

Gruen Associates will work with the City to determine the topics for the Design Guidelines and suggests that topics will be consolidated into several larger categories with subcategories for many of the topics mentioned in the 1984 design guidelines. A preliminary outline for the updated commercial design guidelines includes the major topics suggested:

1. Cover

2. Table of Contents

3. Introduction - Including the design guidelines purpose, the City’s land maps showing the C- 3 & C-M areas applicable to the design guidelines, a brief summary and tables of key development standards in the zones such as setbacks, height, floor area ratio, parking, signage, trash enclosures, etc., and a brief illustrated summary of the character of commercial zones and adjoining arterial streetscape.

4. Draft Design Guidelines by Suggested Topics
a. Relationship to the Arterial Streets
i. Site & building access
ii. Treatment of front setbacks along the street
iii. Streetwall height and location relative to the sidewalk iv. Entries and landscape treatment along the street
v. Parking lot locations
vi. Drop off and pick up locations
b. Building Design and Articulation
i. Building height
ii. Ground floor treatment along the street to activate the area iii. Corner treatment
iv. Massing/form/scale/stepbacks of the façades
v. Materials
vi. Energy efficiency & sustainability
vii. Transitions to other adjoining properties
viii. Parking garage design
c. Landscape & Screening
i. Parking lots
ii. Trash enclosures
iii. Open space
d. Special Community Elements & Lighting
i. Landmarks
ii. Wayfinding signage and entry
iii. Lighting
iv. Street furniture

v. Connectivity and paving of internal pathways
vi. Electric charging locations
Commercial design guidelines will consist of photos from built projects, sketches, and plan-level and 3D drawings illustrating guidelines with brief text and notations, The design guidelines will be concise, easy to follow, and will provide the city with a flexible roadmap to follow for improving the design quality.

In some instances, objective design standards will be provided such as adjacencies to arterial streets.

It is not anticipated that the design guidelines will modify the current C-3 and C-M zone standards but build upon these and show how the setback areas may be utilized to enhance the quality of the pedestrian environment.

The illustrations for the relationship to the street will include up to a total of 10 typical cross sections along Paramount Boulevard, Alondra Boulevard, Somerset Boulevard and Garfield Boulevard depicting the relationship of the building to the sidewalks, landscaping, and setback areas. Up to 20 new illustrations will be prepared for the design guidelines. Up to two illustrations will address mixeduse in the commercial area. It is assumed that the City will provide input for the streamlined review process.

TASK 3.0 Final Design Guidelines
Once the Design Guidelines are prepared by Gruen and reviewed by City staff and one round of changes made in Task 2, the Draft Design Guidelines will be reviewed in a community workshop and a virtual meeting by stakeholders as described in Task 1.0. Comments reviewed from the community workshops and those attending the virtual workshops and additional City comments will be incorporated into the Final Design Guidelines. It is assumed the any hearings or additional workshop meetings will be the responsibility of City staff.

Deliverables
• Final Design Guidelines.
• Sample “Design Review Checklist".
• Ten (10) copies of the Commercial DesignGuidelines.
• One (1) electronic copy of final project files in both Microsoft and Adobe PDFFormat. • One (1) flash drive or other storage device containing all images and electronic files of the project.

Project Schedule

Project Fee Estimate
We trust that this is understandable to you and consistent with your thinking. We are very interested in providing services for the project. As such, we would be happy to meet with you to further discuss our working relationship.

As a Partner of the firm, I, Larry Schlossberg, AIA, AICP, LEED AP BD+C am authorized to sign and obligate Gruen to perform the commitments included in our proposal.

If you have any questions or if you require any additional information, please feel free to contact me at 323.937.4270, x301 or you can e-mail me at [email protected]. In addition, I encourage you to also contact Orlando at 323.937.4270, x300 or [email protected], as he will be the Project Manager and Senior Urban Designer for the project. We are both located at 6330 San Vicente Boulevard, Suite 200 / Los Angeles, CA 90048.

Respectfully submitted,

GRUENASSOCIATES
Larry Schlossberg, AIA, AICP, LEED AP BD+C
Partner
cc: Orlando Gonzalez, Senior Associate, Project Manager

https://paramountcity1957.sharepoint.com/sites/Planning/Shared Documents/ADMIN/MOTIONS 2023/AwardContract-DemoSvcs16305Hunsaker.doc;12/4/2023 5:04 PM DECEMBER 12, 2023

AWARD OF CONTRACT
DEMOLITION SERVICES AT 16305 HUNSAKER AVENUE
MOTION IN ORDER:

AWARD THE CONTRACT FOR DEMOLITION SERVICES OF 16305
HUNSAKER AVENUE TO RESOURCE ENVIRONMENTAL, INC. IN THE
AMOUNT OF $79,700.00 AND AUTHORIZE THE MAYOR OR HER
DESIGNEE TO EXECUTE THE AGREEMENT.

MOTION:

MOVED BY: _________________
SECONDED BY: ______________
[ ] APPROVED
[ ] DENIED
ROLL CALL VOTE:

AYES: __________________
NOES: __________________
ABSENT: ________________
ABSTAIN:________________
To: Honorable City Council
From: John Moreno, City Manager
By: John Carver, Planning Director
Sol Bejarano, Management Analyst
Date: December 12, 2023

Subject: AWARD OF CONTRACT FOR DEMOLITION SERVICES AT 16305

HUNSAKER AVENUE

BACKGROUND
In 2019, the City acquired the property at 16305 Hunsaker Avenue with the Low-toModerate Income Housing Fund to redevelop the property with low-density affordable housing of high quality. The property is 7,840 square feet and consists of two detached structures. The first structure measures 1,642 square feet, and the second structure measures 814 square feet. The property has been poorly maintained and has a long history of numerous code violations over the years. While the property is now vacant and unattended, it is a nuisance.

On November 14, 2023, Council adopted Ordinance No. 1176/Zone Change No. 246, which amended the Zoning Map from R-2 (Medium Density Residential) to PD-PS (Planned Development with Performance Standards)/Single-Family Residential at 16305 Hunsaker Avenue. Pending City Council review and approval of a Development and Disposition Agreement at a later date, staff will be proposing to partner with a qualified nonprofit organization to develop the property.

This item is a request to award the contract to carry out the necessary demolition of two severely dilapidated structures at 16305 Hunsaker Avenue to Resources Environmental, Inc.

DISCUSSION
To avoid any unwanted vagrancy and to preserve the immediate safety and quality of life of the residential neighborhood, a request for demolition services for the structures at 16305 Hunsaker Avenue was solicited from licensed demolition contractors to perform the demolition services.

On Thursday November 2, 2023, the City published the Notice Inviting Sealed Bids in the Paramount Journal.

Agenda Report December 12, 2023
AWARD OF CONTRACT Page 2
On Tuesday November 14, 2023, the City Engineer opened and examined the bids for demolition services at 16305 Hunsaker Avenue. The bids were opened at 11:00 a.m. at the City Council Chamber.

Three (3) bids were received; however, only two (2) bids were found to be responsive as one bid submittal was incomplete. Therefore, the lowest responsible and responsive bid was submitted by Resource Environmental, Inc. in the amount of $79,700 and the contract is attached as Exhibit A.

The following is a breakdown of the estimated total project costs:

Project: $79,700
Contingency (10%): $ 7,970
Total: $87,680

FISCAL IMPACT
At the November 2, 2023 adjourned meeting, the City Council approved a budget of $100,000.00 in the General Fund reserve for Demolition – 16305 Hunsaker Ave, which is funded from the balance of the ARPA money. Therefore, there is no fiscal impact.

VISION, MISSION, VALUES, AND STRATEGIC OUTCOMES
The City’s Vision, Mission, and Values set the standard for the organization; establish priorities, uniformity, and guidelines; and provide the framework for policy decisionmaking. The Strategic Outcomes were implemented to provide a pathway to achieving the City’s Vision. This item aligns with Strategic Outcome No.1: Safe Community.

RECOMMENDED ACTION
It is recommended that the City Council award the contract for the demolition services of 16305 Hunsaker Avenue to Resource Environmental, Inc. in the amount of $79,700.00, and authorize the Mayor or her designee to execute the agreement.

EXHIBIT A

Agenda Report December 12, 2023
AWARD OF CONTRACT Page 3
JOB NAME: DEMOLITION SERVICES OF 16305 HUNSAKER AVENUE
BID DATE: November 14, 2023
BID TIME: 11:00 AM
Company Name Company Address Bid Amount

1. Victorious La Mirada, CA 90638 $61,000

2. Resource Environmental,
Inc.

Cerritos, CA 90703 $79,700

3. Integrated Demolition and
Remediation Inc.

Anaheim, CA 92807 $97,500
https://paramountcity1957.sharepoint.com/sites/Planning/Shared Documents/PLANNINGDIV/SOL/Reports 2023/16305Hunsaker/DemoSvcs/Demo SVCS 16305 Hunsaker Ave rptcc 12_12_2023.docx

EXHIBIT A
SPC23-23 D-1

CITY OF PARAMOUNT

CONTRACT AGREEMENT
FOR

DEMOLITION SERVICES OF
16305 HUNSAKER AVENUE
PARAMOUNT, CA 90723
PROJECT NO. ______
This contract agreement is made and entered into for the above-stated project this day of , 20 , by and between the City of Paramount, as
AGENCY and ,as Contractor.

WITNESSETH that AGENCY and Contractor have mutually agreed as follows:

ARTICLE I
The Contract Documents for the aforesaid project shall consist of the Notice Inviting Sealed Bids, Instructions to Bidders, Proposal, General Specifications, Standard Specifications, Special Provisions, Plans, and all referenced specifications, details, standard drawings, and appendices; together with this contract agreement and all required bonds, insurance certificates, permits, notices, and affidavits and also including any and all addenda or supplemental agreements clarifying, amending, or extending the work contemplated as may be required to ensure its completion in an acceptable manner.

All of the provisions of said Contract Documents are made a part hereof as though fully set forth herein.

ARTICLE II
For and in consideration of the payments and agreements to be made and performed by AGENCY, Contractor agrees to furnish all materials and perform all work required for the above-stated project and to fulfill all other obligations as set forth in the aforesaid contract documents.

ARTICLE III
Contractor agrees to receive and accept the prices set forth in the Proposal as full compensation for furnishing all materials, performing all work, and fulfilling all obligations hereunder. Said compensation shall cover all expenses, losses, damages, and consequences arising out of the nature of the work during its progress or prior to its acceptance including those for well and faithfully completing the work and the whole thereof in the manner and time specified in the aforesaid contract documents and also including those arising from actions of the elements, unforeseen difficulties, or obstructions encountered in the prosecution of the work and also including those arising from actions of the elements, unforeseen difficulties, or obstructions encountered in the SPC23-23 D-2
prosecution of the work, suspension, or discontinuance of the work and all other unknowns or risks of any description connected with the work.

ARTICLE IV
AGENCY hereby promises and agrees to employ and does hereby employ, Contractor to provide the materials, do the work and fulfill the obligations according to the terms and conditions herein contained and referred to, for the prices aforesaid and hereby contracts to pay the same at the time, in the manner and upon the conditions set forth in the contract documents.

ARTICLE V
Contractor acknowledges the provisions of the State Labor Code requiring every employer to be insured against liability for workers’ compensation or to undertake selfinsurance in accordance with the provisions of that code and certifies compliance with such provisions. Contractor further acknowledges the provisions of the State Labor Code requiring every employer to pay at least the minimum prevailing rate of per diem wages for each craft classification or type of workman needed to execute this contract as determined by the Director of Labor Relations of the State of California.

ARTICLE VI
Contractor agrees to indemnify and hold harmless AGENCY and all of its officers and agents from any claims, demands, or causes of action including related expenses, attorney’s fees, and costs based on, arising out of, or in any way related to the work undertaken by Contractor hereunder. In the event the insurance coverage is on a claims made basis the Contractor shall indemnify and hold harmless the AGENCY and all of its officers and agents from any and all claims, demands, or causes of action that arise after the expiration of the Contractor’s current policy or after the service contract has ended, for any occurrences arising out of or any way related to the work undertaken by the Contractor. The liability insurance coverage values shall be:

Insurance Coverage Requirements Limit Requirements
Comprehensive General Liability $1,500,000
Product/Completion Operations $1,500,000
Contractual General Liability $1,500,000
Comprehensive Automobile Liability $1,500,000
A combined single-limit policy with aggregate limits in the amount of $3,000,000 will be considered equivalent to the required minimum limits. The issuer shall be an “admitted surety insurer” duly authorized to transact business under the laws of the State of California.

Acceptable insurance coverage shall be placed with carriers admitted to write insurance in California with a rating of A:VIII by A.M. Best & Co. Any deviation from this rule shall require specific approval in writing from the AGENCY.

SPC23-23 D-3
Insurance shall name the City of Paramount, its officers, agents, and employees as additional insured by endorsement of the Contractor’s policy. A copy of the endorsement, showing policy limits, shall be provided to the AGENCY on or before signing this contract.

ARTICLE VII
Contractor affirms that the signatures, titles, and seals set forth hereinafter the execution of this contract agreement represent all individuals, firm members, partners, joint venturers, and/or corporate officers having a principal interest herein.

ARTICLE VIII

DELETED

ARTICLE IX
Records and Audits. The Contractor shall maintain accounts and records, including personnel, property, and financial records, adequate to identify and account for all costs pertaining to the contract and such other records as may be deemed necessary by the AGENCY to assure proper accounting for all project funds, both federal and non-federal shares. These records will be made available for audit purposes to the AGENCY or any authorized representative and will be retained for 5 years after the expiration of this Contract unless permission to destroy them is granted by the AGENCY.

ARTICLE X
False Claims and Debarment Procedures. The AGENCY hereby gives notice to Contractor that Chapter 34 of the Paramount Municipal Code dealing with false claims of contractors provides for an administrative debarment action for submitting a false claim subjecting Contractor to a potential five (5) year debarment upon finding that Contractor knowingly submitted a false claim as further set forth in Chapter 34. Failure to abide by the provisions of Chapter 34 may lead to a disqualification of the Contractor as an irresponsible bidder and resultant prohibition of Contractor, from bidding as a Contractor, Subcontractor or Consultant for a period up to five (5) years in the City of Paramount.

SPC23-23 D-4
IN WITNESS WHEREOF, the parties hereto for themselves, their heirs, executors, administrators, successors, and assigns do hereby agree to the full performance of the covenants herein contained and have caused this contract agreement to be executed in duplicate by setting hereunto their names, titles, hands, and seals this ________ day of __________________, 20___.

Contractor:
(Signature)
Name and Title (Printed)
Contractor’s License No.

Agency Business License No.

Federal Tax Identification No.

Note: Contractor signature must be acknowledged before a Notary Public, and evidence of the authority of any person signing as attorney-in-fact must be attached.

AGENCY:

Mayor of the City of Paramount
Attested:

City Clerk of the City of Paramount
Date
Approved
as to form:

City Attorney of the City of Paramount
Date
SPC23-23 D-5

FAITHFUL PERFORMANCE BOND
FOR

DEMOLITION SERVICES OF
16305 HUNSAKER AVENUE
PARAMOUNT, CA 90723
PROJECT NO. ______
KNOW ALL MEN BY THESE PRESENTS that as
CONTRACTOR and ,
a corporation organized and existing under the laws of the State of , and duly authorized to transact business under the laws of the State of California, as SURETY, are held and firmly bound unto the City of Paramount, as AGENCY, in the penal sum of
Dollars ($ ), which is 100 percent of the total contract amount for the above-stated project, for the payment of which sum, CONTRACTOR and SURETY agree to be bound, jointly and severally, firmly by these presents.

THE CONDITIONS OF THIS OBLIGATION ARE SUCH that, whereas CONTRACTOR has been awarded and is about to enter into the annexed Contract Agreement with AGENCY for the above-stated project, if CONTRACTOR faithfully performs and fulfills all obligations under the contract documents in the manner and time specified therein, then this obligation shall be null and void, otherwise it shall remain in full force and effect in favor of AGENCY; provided that any alterations in the obligations or time for completion made pursuant to the terms of the Contract Documents shall not in any way release either CONTRACTOR or SURETY, and notice of such alterations is hereby waived by SURETY.

IN WITNESS WHEREOF, two (2) identical counterparts of this instrument, each of which shall for all purposes be deemed an original hereof, have been duly executed by Bidder and Surety, on the date set forth below, the name of each corporate party being hereto affixed and these presents duly signed by its undersigned representative(s) pursuant to authority of its governing body.

Dated:

BIDDER: Name:

Address:

By:
(Signature)
Type Name and Title
SURETY: Name:

Address:

By:
(Signature)
Type Name and Title:

Note: This bond must be executed in duplicate and dated, all signatures must be acknowledged before a Notary Public, and evidence of the authority of any person signing as attorney-in-fact must be attached.

SPC23-23 D-6

MATERIAL AND LABOR BOND
FOR

DEMOLITION SERVICES OF
16305 HUNSAKER AVENUE
PARAMOUNT, CA 90723
PROJECT NO. ______
KNOW ALL MEN BY THESE PRESENTS that ___________________________, as CONTRACTOR, and __________________________________________________, a corporation organized and existing under the laws of the State of
, and duly authorized to transact business under the laws of the State of California, as SURETY, are held and firmly bound unto the City of Paramount, as AGENCY, in the penal sum of _______________________________________ Dollars ($_______________), which is 100 percent of the total contract amount for the above-stated project, for payment of which sum, CONTRACTOR and SURETY agree to be bound, jointly and severally, firmly by these presents.

THE CONDITIONS OF THIS OBLIGATION ARE SUCH that, whereas CONTRACTOR has been awarded and is about to enter into the annexed Contract Agreement with AGENCY for the above-stated project, if CONTRACTOR or any subcontractor fails to pay for any labor or material of any kind used in the performance of the work to be done under said contract, or fails to submit amounts due under the State Unemployment Insurance Act with respect to said labor, SURETY will pay for the same in an amount not exceeding the sum set forth above, which amount shall inure to the benefit of all persons entitled to file claims under the State Code of Civil Procedures; provided that any alterations in the work to be done, materials to be furnished, or time for completion made pursuant to the terms of the contract documents shall not in any way release either CONTRACTOR or SURETY, and notice of said alterations is hereby waived by SURETY.

IN WITNESS WHEREOF, two (2) identical counterparts of this instrument, each of which shall for all purposes be deemed an original hereof, have been duly executed by Bidder and Surety, on the date set forth below, the name of each corporate party being hereto affixed and these presents duly signed by its undersigned representative(s) pursuant to authority of its governing body.

Dated:

BIDDER: Name:

Address:

By:
(Signature)
Type Name and Title
SURETY: Name:

Address:

By:
(Signature)
Type Name and Title:

Note: This bond must be executed in duplicate and dated, all signatures must be acknowledged before a Notary Public, and evidence of the authority of any person signing as attorney-in-fact must be attached.

DECEMBER 12, 2023
AGREEMENT WITH FLOCK GROUP, INC. FOR FLOCK SAFETY

LICENSE PLATE RECOGNITION SYSTEM
MOTION IN ORDER:
1) AMEND THE FISCAL YEAR 2023-24 BUDGET APPROPRIATION FOR

THE FLOCK SAFETY CAMERA SYSTEM TO INCLUDE SIX ADDITIONAL CAMERAS AND APPROPRIATE $15,400 FROM THE GENERAL FUND
ARPA RESERVE; AND 2) APPROVE THE AGREEMENT WITH FLOCK
GROUP, INC. FOR FLOCK SAFETY LICENSE PLATE RECOGNITION (LPR)

SYSTEM FOR A FIVE-YEAR TERM IN A TOTAL AMOUNT NOT TO EXCEED $266,400.00 AND AUTHORIZE THE MAYOR OR HER DESIGNEE TO
EXECUTE THE AGREEMENT.

MOTION:

MOVED BY: _________________
SECONDED BY: ______________
[ ] APPROVED
[ ] DENIED
ROLL CALL VOTE:

AYES: __________________
NOES: __________________
ABSENT: ________________
ABSTAIN:________________
HTTPS://PARAMOUNTCITY1957.SHAREPOINT.COM/SITES/PUBLICSAFETY/MANAGMENT/WP/COUNCIL REPORTS/MOTION SHEETS/FLOCK GROUP, INC. AGREEMENT MS 12.12.23.DOC
To: Honorable City Council
From: John Moreno, City Manager
By: Margarita Matson, Public Safety Director
Date: December 12, 2023
Subject: AGREEMENT WITH FLOCK GROUP, INC. FOR FLOCK SAFETY

LICENSE PLATE RECOGNITION SYSTEM

BACKGROUND
During the Special Meeting of the City Council on Thursday, November 2, 2023, the City Council discussed the prospective use of additional fixed License Plate Recognition (LPR) camera technology. This staff report proposes amending the contract with Flock Group, Inc. to deploy six more fixed LPR cameras in addition to the 14 existing units already in place.

License Plate Recognition (LPR) technology uses a combination of cameras and computer software to scan the license plates of passing vehicles. The cameras, which can be fixed (e.g., mounted on road signs or traffic lights) or mobile (i.e., mounted on a vehicle), capture computer-readable images that allow law enforcement to compare plate numbers against plates of known stolen vehicles or vehicles associated with individuals wanted on criminal charges. When a match is found, a real-time alert is generated, notifying police of the location where the image of the stolen or wanted vehicle was captured. Investigators can also use LPR data to identify and locate vehicles associated with the commission of a crime.

The City of Paramount has utilized mobile LPR technology through the Los Angeles County Sheriff’s Department vehicles. The limitations of the mobile LPR units are that the alerts and data collection can only occur when a deputy is operating the vehicle, and the data generated is limited to the specific route and distance that is traveled by that patrol vehicle. In 2021, the City of Paramount installed 10 fixed LPR cameras at high-traffic intersections to help overcome these limitations. This deployment strategy proved to be effective, and in 2022, the City added four additional fixed LPR. During the day, Flock Safety cameras operate similarly to regular security cameras. They capture still images of vehicle license plates, and process information like license plate numbers vehicle makes, and vehicle models. At night, the cameras use infrared technology to capture images. The cameras are solar-powered and use cellular networks to communicate with law enforcement officials.

Agenda Report December 12, 2023
FLOCK GROUP, INC. AGREEMENT Page 2

DISCUSSION
The addition of six fixed LPR cameras to the City’s Flock Safety Camera program provides the City with a cost-effective force multiplier that helps direct deputies to where crimes are occurring and provides invaluable investigative leads following criminal activity. Designated LPR technology is also widely used by many local police agencies to locate stolen vehicles and solve crimes in which a vehicle was used. Over time, the quality and accuracy of LPR technology has continued to evolve and become more effective and affordable.

The City’s current agreement with Flock Group, Inc. will expire on December 31, 2023.

The proposed new five-year agreement with Flock Group, Inc. includes the installation and maintenance of six additional LPR cameras and the maintenance of 14 existing cameras at locations identified by the Los Angeles County Sheriff’s Department. It also requires Flock Group, Inc. to provide the Sheriff’s Department with searchable access to its LPR data and the storage of that data for 30 days. The Sheriff’s Department has a privacy policy and field operations directive that has established basic procedural guidelines and responsibilities for personnel and units utilizing the LPR system.

This contract is for the installation and use—not the purchase of LPR cameras. Flock Group, Inc. will complete the installation and set-up of the cameras and will be the equipment owner. The solar-powered cameras transmit data via a wireless cell signal, requiring no utility connection. Flock Group, Inc. will maintain or replace the cameras as needed.

City staff reviewed the marketplace for this technology and received uniformly positive feedback from numerous other local government agencies regarding their experiences with the quality and reliability of the LPR systems supplied by Flock Group, Inc. Therefore, staff recommend continuing the service agreement with Flock Safety.

FISCAL IMPACT
Funding for the ALPR program is included in the FY 2023-24 Adopted Budget in the amount of $38,500 for the 14 existing cameras under the Sworn Services Division (111- 3121-5167). The implementation of six new additional cameras will cost an additional $15,400, including installation and setup, which will encompass the remainder of FY 2023-24. As approved at the November 2nd Special Meeting of the City Council, the funding will be provided through the remaining ARPA money that is reserved in the General Fund for community priorities. For subsequent years, the General Fund will cover the costs, projected to be $52,500 annually, which includes camera access, data storage, and the LPR database. Damaged cameras will be replaced as needed and underutilized units will be relocated by Flock Group, Inc. at a cost ranging from $350 - $500 per camera, with an annual contingency cost not expected to exceed $2,500. Funding for subsequent years of the contract will come from the General Fund balance through the annual appropriation of funds through the annual budget process. The contract with Flock Group, Inc. is included as Attachment A.

Agenda Report December 12, 2023
FLOCK GROUP, INC. AGREEMENT Page 3

VISION, MISSION, VALUES, AND STRATEGIC OUTCOMES
The City’s Vision, Mission, and Values set the standard for the organization; establish priorities, uniformity, and guidelines; and provide the framework for policy decision making. The Strategic Outcomes were implemented to provide a pathway to achieving the Vision of a city that is safe, healthy, and attractive. This item aligns with Strategic Outcome No. 1: Safe Community.

RECOMMENDED ACTION
It is recommended that the City Council: 1) Amend the Fiscal Year 2023-24 Budget Appropriation for the Flock Safety Camera System to include six additional cameras and appropriate $15,400 from the General Fund ARPA reserve; and 2) approve the agreement with Flock Group, Inc. for Flock Safety License Plate Recognition (LPR) system for a five-year term in a total amount not to exceed $266,400.00 and authorize the mayor or her designee to execute the agreement.

HTTPS://PARAMOUNTCITY1957.SHAREPOINT.COM/SITES/PUBLICSAFETY/MANAGMENT/WP/COUNCIL REPORTS/AGREEMENT WITH FLOCK GROUP, INC. REPORT 12.12.23.DOCX

ATTACHMENT A
Flock Safety + CA - City of Paramount
______________
Flock Group Inc.
1170 Howell Mill Rd, Suite 210
Atlanta, GA 30318
______________
MAIN CONTACT:

Tonia Crump
[email protected]
4049329942
Company Overview
At Flock Safety, technology unites law enforcement and the communities they serve to eliminate crime and shape a safer future, together. We created the first public safety operating system to enable neighborhoods, schools, businesses, and law enforcement to work together to collect visual, audio, and situational evidence across an entire city to solve and prevent crime.

Our connected platform, comprised of License Plate Recognition (LPR), live video, audio detection, and a suite of integrations (AVL, CAD & more), alerts law enforcement when an incident occurs and turns unbiased data into objective answers that increase case clearance, maximize resources, and reduce crime -- all without compromising transparency or human privacy.

Join thousands of agencies reducing crime with Flock Safety’s public safety operating system 2000+ 120 1B+ <60%*
communities with privatepublic partnershipsincident alerts / minute 1B+ vehicles detected / month
<60% local crime reduction
in Flock cities
*According to a 2019 study conducted by Cobb County Police Department Introduction
Layer Intelligence to Solve More Crime
The pathway to a safer future looks different for every community. As such, this proposal presents a combination of products that specifically addresses your public safety needs, geographical layout, sworn officer count, and budget. These components make up your custom public safety operating system, a connected device network and software platform designed to transform real-time data into a panoramic view of your jurisdiction and help you zero in on the leads that solve more cases, prevent future crimes, and foster trust in the communities you serve.

Software Platform
Flock Safety's out-of-box software platform collects and makes sense of visual, audio, and situational evidence across your entire network of devices.

Out-of-Box Software Features
Simplified Search Get a complete view of all activity tied to one vehicle in your network of privately and publicly owned cameras.

The user-friendly search experience allows officers to filter hours of footage in seconds based on time, location, and detailed vehicle criteria using patented Vehicle Fingerprint ™ technology. Search filters include:
● Vehicle make
● Body type
● Color
● License plates
○ Partial tags
○ Missing tags
○ Temporary tags
○ State recognition
● Decals
● Bumper stickers
● Back racks
● Top racks
National and Local Sharing Access 1B+ additional plate reads each month without purchasing more cameras. Solve cross-jurisdiction crimes by opting into Flock Safety's sharing networks, including one-toone, national, and statewide search networks. Users can also receive alerts from several external LPR databases:

California SVS
FDLE
FL Expired Licenses
FL Expired Tags
FL Sanctioned Drivers
FL Sex Offenders
Georgia DOR
IL SOS
Illinois Leads
NCIC
NCMEC Amber Alert
REJIS
CCIC
FBI
Real-time Alerts Receive SMS, email, and in-app notifications for custom Hot Lists, NCIC wanted lists, AMBER alerts, Silver alerts, Vehicle Fingerprint matches, and more.

Interactive ESRI Map View your AVL, CAD, traffic, and LPR alerts alongside live onscene video from a single interactive map for a birdseye view of activity in your jurisdiction.

Vehicle Location Analysis Visualize sequential Hot List alerts and the direction of travel to guide officers to find suspect vehicles faster.

Out-of-Box Software Features (Continued)
Transparency Portal Establish community trust with a public-facing dashboard that shares policies, usage, and public safety outcomes related to your policing technology.

Insights Dashboard Access at-a-glance reporting to easily prove ROI, discover crime and traffic patterns and prioritize changes to your public safety strategy by using data to determine the most significant impact.

Native MDT Application Download FlockOS to your MDTs to ensure officers never miss a Hot List alert while out on patrol.

Hot List Attachments
Attach relevant information to Custom Hot List alerts. Give simple, digestible context to Dispatchers and Patrol Officers responding to Hot List alerts so they can act confidently and drive better outcomes. When you create a custom Hot List Alert, add case notes, photos, reports, and other relevant case information.

Single Sign On (SSO) Increase your login speed and information security with Okta or Azure Single Sign On (SSO). Quickly access critical
information you need to do your job by eliminating the need for password resets and steps in the log-in process.

License Plate Recognition
The Flock Safety Falcon® LPR camera uses Vehicle Fingerprint™ technology to transform hours of footage into actionable evidence, even when a license plate isn't visible, and sends Hot List alerts to law enforcement users when a suspect vehicle is detected. The Falcon has fixed and location-flexible deployment options with 30% more accurate reads than leading LPR.* *Results from the 2019 side-by-side comparison test conducted by LA County Sheriff's Department Flock Safety Falcon®LPR Camera Flock Safety Falcon® Flex Flock Safety Falcon® LR Fixed, infrastructure-free LPR camera
designed for permanent placement.
√ 1 Standard LPR Camera
√ Unlimited LTE data service + Flock OS
platform licenses
√ 1 DOT breakaway pole
√ Dual solar panels
√ Permitting, installation, and ongoing
maintenance
Location-flexible LPR camera designed
for fast, easy self-installation, which is
ideal for your ever-changing
investigative needs.
√ 1 LPR Camera
√ Unlimited LTE data service + software
licenses
√ 1 portable mount with varying-sized
band clamps
√ 1 Charger for internal battery
√ 1 hardshell carrying case
Long-range, high-speed LPR camera
that captures license plates and Vehicle
Fingerprint data for increasing
investigative leads on high-volume
roadways like highways and interstates.
√ 1 Long-Rage LPR Camera
√ Computing device in protective poly
case
√ AC Power
√ Permitting, installation, and ongoing
maintenance
Your Flock Safety Team
Flock Safety is more than a technology vendor; we are a partner in your mission to build a safer future. We work with thousands of law enforcement agencies across the US to build stronger, safer communities that celebrate the hard work of those who serve and protect. We don’t disappear after contracts are signed; we pride ourselves on becoming an extension of your hard-working team as part of our subscription service.

Implementation Meet with a Solutions Consultant (former LEO) to build a deployment plan based on your needs. Our Permitting Team and Installation Technicians will work to get your device network approved, installed, and activated.

User Training + Support Your designated Customer Success Manager will help train your power users and ensure you maximize the platform,
while our customer support team will assist with needs as they arise.

Maintenance We proactively monitor the health of your device network. If we detect that a device is offline, a full-time technician will service your device for no extra charge.

Note: Ongoing maintenance does not apply to Falcon Flex devices.

Public Relations Government Affairs
Get support educating your stakeholders, including city councils and other governing bodies.

Media Relations
Share crimes solved in the local media with the help of our Public Relations team.

EXHIBIT A

ORDER FORM
Customer: CA - City of Paramount Initial Term: 60 Months Legal Entity Name: CA - City of Paramount Renewal Term: 24 Months Accounts Payable Email: [email protected] Payment Terms: Net 30 Address: 16400 Colorado Ave Paramount, California
90723
Billing Frequency: Annual Plan - First Year Invoiced at Signing.

Retention Period: 30 Days
Hardware and Software Products
Annual recurring amounts over subscription term
Item Cost Quantity Total
Flock Safety Platform $50,000.00
Flock Safety Flock OS
FlockOS ™ Included 1 Included
Flock Safety LPR Products
Flock Safety Falcon ® Included 20 Included
Professional Services and One Time Purchases
Item Cost Quantity Total
One Time Fees
Flock Safety Professional Services
Professional Services - Standard Implementation Fee $650.00 6 $3,900.00 Subtotal Year 1: $53,900.00
Annual Recurring Subtotal: $50,000.00
Discounts: $50,000.00
Estimated Tax: $0.00
Contract Total: $253,900.00
Billing Schedule
Billing Schedule Amount (USD)
Year 1
At Contract Signing $53,900.00
Annual Recurring after Year 1 $50,000.00
Contract Total $253,900.00
*Tax not included
Discounts
Discounts Applied Amount (USD)
Flock Safety Platform $50,000.00
Flock Safety Add-ons $0.00
Flock Safety Professional Services $0.00
Product and Services Description
Flock Safety Platform Items Product Description Terms
Flock Safety Falcon ®
An infrastructure-free license plate reader camera that utilizes Vehicle Fingerprint® technology to capture vehicular attributes.

The Term shall commence upon first installation and validation of Flock Hardware.

One-Time Fees Service Description
Installation on existing
infrastructure
One-time Professional Services engagement. Includes site & safety assessment, camera setup & testing, and shipping & handling in accordance with the Flock Safety Advanced Implementation Service Brief.

Professional Services - Standard
Implementation Fee
One-time Professional Services engagement. Includes site and safety assessment, camera setup and testing, and shipping and handling in accordance with the Flock Safety Standard Implementation Service Brief.

Professional Services -
Advanced Implementation Fee
One-time Professional Services engagement. Includes site & safety assessment, camera setup & testing, and shipping & handling in accordance with the Flock Safety Advanced Implementation Service Brief.

FlockOS Features & Description
Package: Essentials
FlockOS Features Description
Community Cameras (Full Access) Access to all privately owned Flock devices within your jurisdiction that have been shared with you.

Unlimited Users Unlimited users for FlockOS
State Network (LP Lookup Only) Allows agencies to look up license plates on all cameras opted in to the statewide Flock network.

Nationwide Network (LP Lookup Only) Allows agencies to look up license plates on all cameras opted in to the nationwide Flock network.

Direct Share - Surrounding Jurisdiction (Full Access) Access to all Flock devices owned by law enforcement that have been directly shared with you. Have ability to search by vehicle fingerprint, receive hot list alerts, and view devices on the map.

Time & Location Based Search Search full, partial, and temporary plates by time at particular device locations License Plate Lookup Look up specific license plate location history captured on Flock devices Vehicle Fingerprint Search Search footage using Vehicle Fingerprint™ technology. Access vehicle type, make, color, license plate state, missing / covered plates, and other unique features like bumper stickers, decals, and roof racks.

Flock Insights/Analytics page Reporting tool to help administrators manage their LPR program with device performance data, user and network audits, plate read reports, hot list alert reports, event logs, and outcome reports.

ESRI Based Map Interface
Flock Safety’s maps are powered by ESRI, which offers the ability for 3D visualization, viewing of floor plans, and layering of external GIS data, such as City infrastructure (i.e., public facilities, transit systems, utilities), Boundary mapping (i.e., precincts, county lines, beat maps), and Interior floor plans (i.e., hospitals, corporate campuses, universities)
Real-Time NCIC Alerts on Flock ALPR Cameras Alert sent when a vehicle entered into the NCIC crime database passes by a Flock camera Unlimited Custom Hot Lists Ability to add a suspect’s license plate to a custom list and get alerted when it passes by a Flock camera By executing this Order Form, Customer represents and warrants that it has read and agrees to all of the terms and conditions contained in the Master Services Agreement attached. The Parties have executed this Agreement as of the dates set forth below.

FLOCK GROUP, INC. Customer: CA - City of Paramount
By:
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By:
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Name:
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Name:
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Title:
\FSTitle2\
Title:
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Date:
\FSDateSigned2\
Date:
\FSDateSigned1\
PO Number:

Master Services Agreement
This Master Services Agreement (this “Agreement”) is entered into by and between Flock Group, Inc. with a place of business at 1170 Howell Mill Road NW Suite 210, Atlanta, GA 30318 (“Flock”) and the entity identified in the signature block (“Customer”) (each a “Party,” and together, the “Parties”) on this the 30 day of November 2023. This Agreement is effective on the date of mutual execution (“Effective Date”). Parties will sign an Order Form (“Order Form”) which will describe the Flock Services to be performed and the period for performance, attached hereto as Exhibit A. The Parties agree as follows:

RECITALS
WHEREAS, Flock offers a software and hardware situational awareness solution through Flock’s technology platform that upon detection is capable of capturing audio, video, image, and recording data and provide notifications to Customer (“Notifications”); WHEREAS, Customer desires access to the Flock Services (defined below) on existing devices, provided by Customer, or Flock provided Flock Hardware (as defined below) in order to create, view, search and archive Footage and receive Notifications, via the Flock Services; WHEREAS, Customer shall have access to the Footage in Flock Services. Pursuant to Flock’s standard Retention Period (defined below) Flock deletes all Footage on a rolling thirty (30) day basis, except as otherwise stated on the Order Form. Customer shall be responsible for extracting, downloading and archiving Footage from the Flock Services on its own storage devices; and

AGREEMENT
NOW, THEREFORE, Flock and Customer agree that this Agreement, and any Order Form, purchase orders, statements of work, product addenda, or the like, attached hereto as exhibits and incorporated by reference, constitute the complete and exclusive statement of the Agreement of the Parties with respect to the subject matter of this Agreement, and replace and supersede all prior agreements, term sheets, purchase orders, correspondence, oral or written communications and negotiations by and between the Parties.

1. DEFINITIONS
Certain capitalized terms, not otherwise defined herein, have the meanings set forth or crossreferenced in this Section 1.

1.1 “Anonymized Data” means Customer Data permanently stripped of identifying details and any potential personally identifiable information, by commercially available standards which irreversibly alters data in such a way that a data subject (i.e., individual person or entity) can no longer be identified directly or indirectly.

1.2 “Authorized End User(s)” means any individual employees, agents, or contractors of Customer accessing or using the Services, under the rights granted to Customer pursuant to this Agreement.

1.3 “Customer Data” means the data, media and content provided by Customer through the Services. For the avoidance of doubt, the Customer Data will include the Footage.

1.4. “Customer Hardware” means the third-party camera owned or provided by Customer and any other physical elements that interact with the Embedded Software and the Web Interface to provide the Services.

1.5 “Embedded Software” means the Flock proprietary software and/or firmware integrated with or installed on the Flock Hardware or Customer Hardware.

1.6 “Flock Hardware” means the Flock device(s), which may include the pole, clamps, solar panel, installation components, and any other physical elements that interact with the Embedded Software and the Web Interface, to provide the Flock Services as specifically set forth in the applicable product addenda.

1.7 “Flock IP” means the Services, the Embedded Software, and any intellectual property or proprietary information therein or otherwise provided to Customer and/or its Authorized End Users. Flock IP does not include Footage (as defined below).

1.8 “Flock Network End User(s)” means any user of the Flock Services that Customer authorizes access to or receives data from, pursuant to the licenses granted herein.

1.9 “Flock Services” means the provision of Flock’s software and hardware situational awareness solution, via the Web Interface, for automatic license plate detection, alerts, audio detection, searching image records, video and sharing Footage.

1.10 “Footage” means still images, video, audio and other data captured by the Flock Hardware or Customer Hardware in the course of and provided via the Flock Services.

1.11 “Hotlist(s)” means a digital file containing alphanumeric license plate related information pertaining to vehicles of interest, which may include stolen vehicles, stolen vehicle license plates, vehicles owned or associated with wanted or missing person(s), vehicles suspected of being involved with criminal or terrorist activities, and other legitimate law enforcement purposes.

Hotlist also includes, but is not limited to, national data (i.e., NCIC) for similar categories, license plates associated with AMBER Alerts or Missing Persons/Vulnerable Adult Alerts, and includes manually entered license plate information associated with crimes that have occurred in any local jurisdiction.

1.12 “Installation Services” means the services provided by Flock for installation of Flock Services.

1.13 “Retention Period” means the time period that the Customer Data is stored within the cloud storage, as specified in the product addenda.

1.14 “Vehicle Fingerprint™” means the unique vehicular attributes captured through Services such as: type, make, color, state registration, missing/covered plates, bumper stickers, decals, roof racks, and bike racks.

1.15 “Web Interface” means the website(s) or application(s) through which Customer and its Authorized End Users can access the Services.

2. SERVICES AND SUPPORT

2.1 Provision of Access. Flock hereby grants to Customer a non-exclusive, non-transferable right to access the features and functions of the Flock Services via the Web Interface during the Term, solely for the Authorized End Users. The Footage will be available for Authorized End Users to access and download via the Web Interface for the data retention time defined on the Order Form (“Retention Period”). Authorized End Users will be required to sign up for an account and select a password and username (“User ID”). Customer shall be responsible for all acts and omissions of Authorized End Users, and any act or omission by an Authorized End User which, including any acts or omissions of authorized End user which would constitute a breach of this agreement if undertaken by customer. Customer shall undertake reasonable efforts to make all Authorized End Users aware of all applicable provisions of this Agreement and shall cause Authorized End Users to comply with such provisions. Flock may use the services of one or more third parties to deliver any part of the Flock Services, (such as using a third party to host the Web Interface for cloud storage or a cell phone provider for wireless cellular coverage).

2.2 Embedded Software License. Flock grants Customer a limited, non-exclusive, nontransferable, non-sublicensable (except to the Authorized End Users), revocable right to use the Embedded Software as it pertains to Flock Services, solely as necessary for Customer to use the Flock Services.

2.3 Support Services. Flock shall monitor the Flock Services, and any applicable device health, in order to improve performance and functionality. Flock will use commercially reasonable efforts to respond to requests for support within seventy-two (72) hours. Flock will provide Customer with reasonable technical and on-site support and maintenance services in-person, via phone or by email at [email protected] (such services collectively referred to as “Support Services”).

2.4 Upgrades to Platform. Flock may make any upgrades to system or platform that it deems necessary or useful to (i) maintain or enhance the quality or delivery of Flock’s products or services to its agencies, the competitive strength of, or market for, Flock’s products or services, such platform or system’s cost efficiency or performance, or (ii) to comply with applicable law.

Parties understand that such upgrades are necessary from time to time and will not diminish the quality of the services or materially change any terms or conditions within this Agreement.

2.5 Service Interruption. Services may be interrupted in the event that: (a) Flock’s provision of the Services to Customer or any Authorized End User is prohibited by applicable law; (b) any third-party services required for Services are interrupted; (c) if Flock reasonably believe Services are being used for malicious, unlawful, or otherwise unauthorized use; (d) there is a threat or attack on any of the Flock IP by a third party; or (e) scheduled or emergency maintenance (“Service Interruption”). Flock will make commercially reasonable efforts to provide written notice of any Service Interruption to Customer, to provide updates, and to resume providing access to Flock Services as soon as reasonably possible after the event giving rise to the Service Interruption is cured. Flock will have no liability for any damage, liabilities, losses (including any loss of data or profits), or any other consequences that Customer or any Authorized End User may incur as a result of a Service Interruption. To the extent that the Service Interruption is not caused by Customer’s direct actions or by the actions of parties associated with the Customer, the time will be tolled by the duration of the Service Interruption (for any continuous suspension lasting at least one full day). For example, in the event of a Service Interruption lasting five (5) continuous days, Customer will receive a credit for five (5) free days at the end of the Term.

2.6 Service Suspension. Flock may temporarily suspend Customer’s and any Authorized End User’s access to any portion or all of the Flock IP or Flock Service if (a) there is a threat or attack on any of the Flock IP by Customer; (b) Customer’s or any Authorized End User’s use of the Flock IP disrupts or poses a security risk to the Flock IP or any other customer or vendor of Flock; (c) Customer or any Authorized End User is/are using the Flock IP for fraudulent or illegal activities; (d) Customer has violated any term of this provision, including, but not limited to, utilizing Flock Services for anything other than the Permitted Purpose; or (e) any unauthorized access to Flock Services through Customer’s account (“Service Suspension”). Customer shall not be entitled to any remedy for the Service Suspension period, including any reimbursement, tolling, or credit. If the Service Suspension was not caused by Customer, the Term will be tolled by the duration of the Service Suspension.

2.7 Hazardous Conditions. Flock Services do not contemplate hazardous materials, or other hazardous conditions, including, without limit, asbestos, lead, toxic or flammable substances. In the event any such hazardous materials are discovered in the designated locations in which Flock is to perform services under this Agreement, Flock shall have the right to cease work immediately.

3. CUSTOMER OBLIGATIONS

3.1 Customer Obligations. Flock will assist Customer Authorized End Users in the creation of a User ID. Authorized End Users agree to provide Flock with accurate, complete, and updated registration information. Authorized End Users may not select as their User ID, a name that they do not have the right to use, or any other name with the intent of impersonation. Customer and Authorized End Users may not transfer their account to anyone else without prior written permission of Flock. Authorized End Users shall not share their account username or password information and must protect the security of the username and password. Unless otherwise stated and defined in this Agreement, Customer shall not designate Authorized End Users for persons who are not officers, employees, or agents of Customer. Authorized End Users shall only use Customer-issued email addresses for the creation of their User ID. Customer is responsible for any Authorized End User activity associated with its account. Customer shall ensure that Customer provides Flock with up to date contact information at all times during the Term of this agreement. Customer shall be responsible for obtaining and maintaining any equipment and ancillary services needed to connect to, access or otherwise use the Flock Services. Customer shall (at its own expense) provide Flock with reasonable access and use of Customer facilities and Customer personnel in order to enable Flock to perform Services (such obligations of Customer are collectively defined as “Customer Obligations”).

3.2 Customer Representations and Warranties. Customer represents, covenants, and warrants that Customer shall use Flock Services only in compliance with this Agreement and all applicable laws and regulations, including but not limited to any laws relating to the recording or sharing of data, video, photo, or audio content.

4. DATA USE AND LICENSING

4.1 Customer Data. As between Flock and Customer, all right, title and interest in the Customer Data, belong to and are retained solely by Customer. Customer hereby grants to Flock a limited, non-exclusive, royalty-free, irrevocable, worldwide license to use the Customer Data and perform all acts as may be necessary for Flock to provide the Flock Services to Customer. Flock does not own and shall not sell Customer Data.

4.2 Customer Generated Data. Flock may provide Customer with the opportunity to post, upload, display, publish, distribute, transmit, broadcast, or otherwise make available, messages, text, illustrations, files, images, graphics, photos, comments, sounds, music, videos, information, content, ratings, reviews, data, questions, suggestions, or other information or materials produced by Customer (“Customer Generated Data”). Customer shall retain whatever legally cognizable right, title, and interest in Customer Generated Data. Customer understands and acknowledges that Flock has no obligation to monitor or enforce Customer’s intellectual property rights of Customer Generated Data. Customer grants Flock a non-exclusive, irrevocable, worldwide, royalty-free, license to use the Customer Generated Data for the purpose of providing Flock Services. Flock does not own and shall not sell Customer Generated Data.

4.3 Anonymized Data. Flock shall have the right to collect, analyze, and anonymize Customer Data and Customer Generated Data to the extent such anonymization renders the data nonidentifiable to create Anonymized Data to use and perform the Services and related systems and technologies, including the training of machine learning algorithms. Customer hereby grants Flock a non-exclusive, worldwide, perpetual, royalty-free right to use and distribute such Anonymized Data to improve and enhance the Services and for other development, diagnostic and corrective purposes, and other Flock offerings. Parties understand that the aforementioned license is required for continuity of Services. Flock does not own and shall not sell Anonymized Data.

5. CONFIDENTIALITY; DISCLOSURES

5.1 Confidentiality. To the extent required by any applicable public records requests, each Party (the “Receiving Party”) understands that the other Party (the “Disclosing Party”) has disclosed or may disclose business, technical or financial information relating to the Disclosing Party’s business (hereinafter referred to as “Proprietary Information” of the Disclosing Party).

Proprietary Information of Flock includes non-public information regarding features, functionality and performance of the Services. Proprietary Information of Customer includes non-public data provided by Customer to Flock or collected by Flock via Flock Services, which includes but is not limited to geolocation information and environmental data collected by sensors. The Receiving Party agrees: (i) to take the same security precautions to protect against disclosure or unauthorized use of such Proprietary Information that the Party takes with its own proprietary information, but in no event less than commercially reasonable precautions, and (ii) not to use (except in performance of the Services or as otherwise permitted herein) or divulge to any third person any such Proprietary Information. The Disclosing Party agrees that the foregoing shall not apply with respect to any information that the Receiving Party can document (a) is or becomes generally available to the public; or (b) was in its possession or known by it prior to receipt from the Disclosing Party; or (c) was rightfully disclosed to it without restriction by a third party; or (d) was independently developed without use of any Proprietary Information of the Disclosing Party.

Nothing in this Agreement will prevent the Receiving Party from disclosing the Proprietary Information pursuant to any judicial or governmental order, provided that the Receiving Party gives the Disclosing Party reasonable prior notice of such disclosure to contest such order. At the termination of this Agreement, all Proprietary Information will be returned to the Disclosing Party, destroyed or erased (if recorded on an erasable storage medium), together with any copies thereof, when no longer needed for the purposes above, or upon request from the Disclosing Party, and in any case upon termination of the Agreement. Notwithstanding any termination, all confidentiality obligations of Proprietary Information that is trade secret shall continue in perpetuity or until such information is no longer trade secret.

5.2 Usage Restrictions on Flock IP. Flock and its licensors retain all right, title and interest in and to the Flock IP and its components, and Customer acknowledges that it neither owns nor acquires any additional rights in and to the foregoing not expressly granted by this Agreement.

Customer further acknowledges that Flock retains the right to use the foregoing for any purpose in Flock’s sole discretion. Customer and Authorized End Users shall not: (i) copy or duplicate any of the Flock IP; (ii) decompile, disassemble, reverse engineer, or otherwise attempt to obtain or perceive the source code from which any software component of any of the Flock IP is compiled or interpreted, or apply any other process or procedure to derive the source code of any software included in the Flock IP; (iii) attempt to modify, alter, tamper with or repair any of the Flock IP, or attempt to create any derivative product from any of the foregoing; (iv) interfere or attempt to interfere in any manner with the functionality or proper working of any of the Flock IP; (v) remove, obscure, or alter any notice of any intellectual property or proprietary right appearing on or contained within the Flock Services or Flock IP; (vi) use the Flock Services for anything other than the Permitted Purpose; or (vii) assign, sublicense, sell, resell, lease, rent, or otherwise transfer, convey, pledge as security, or otherwise encumber, Customer’s rights. There are no implied rights.

5.3 Disclosure of Footage. Subject to and during the Retention Period, Flock may access, use, preserve and/or disclose the Footage to law enforcement authorities, government officials, and/or third parties, if legally required to do so or if Flock has a good faith belief that such access, use, preservation or disclosure is reasonably necessary to comply with a legal process, enforce this Agreement, or detect, prevent or otherwise address security, privacy, fraud or technical issues, or emergency situations.

6. PAYMENT OF FEES

6.1 Billing and Payment of Fees. Customer shall pay the fees set forth in the applicable Order Form based on the billing structure and payment terms as indicated in the Order Form. If Customer believes that Flock has billed Customer incorrectly, Customer must contact Flock no later than thirty (30) days after the closing date on the first invoice in which the error or problem appeared to receive an adjustment or credit. Customer acknowledges and agrees that a failure to contact Flock within this period will serve as a waiver of any claim. If any undisputed fee is more than thirty (30) days overdue, Flock may, without limiting its other rights and remedies, suspend delivery of its service until such undisputed invoice is paid in full. Flock shall provide at least thirty (30) days’ prior written notice to Customer of the payment delinquency before exercising any suspension right.

6.2 Notice of Changes to Fees. Flock reserves the right to change the fees for subsequent Renewal Terms by providing sixty (60) days’ notice (which may be sent by email) prior to the end of the Initial Term or Renewal Term (as applicable).

6.3 Late Fees. If payment is not issued to Flock by the due date of the invoice, an interest penalty of 1.0% of any unpaid amount may be added for each month or fraction thereafter, until final payment is made.

6.4 Taxes. Customer is responsible for all taxes, levies, or duties, excluding only taxes based on Flock’s net income, imposed by taxing authorities associated with the order. If Flock has the legal obligation to pay or collect taxes, including amount subsequently assessed by a taxing authority, for which Customer is responsible, the appropriate amount shall be invoice to and paid by Customer unless Customer provides Flock a legally sufficient tax exemption certificate and Flock shall not charge customer any taxes from which it is exempt. If any deduction or withholding is required by law, Customer shall notify Flock and shall pay Flock any additional amounts necessary to ensure that the net amount that Flock receives, after any deduction and withholding, equals the amount Flock would have received if no deduction or withholding had been required.

7. TERM AND TERMINATION

7.1 Term. The initial term of this Agreement shall be for the period of time set forth on the Order Form (the “Term”). Following the Term, unless otherwise indicated on the Order Form, this Agreement will automatically renew for successive renewal terms of the greater of one year or the length set forth on the Order Form (each, a “Renewal Term”) unless either Party gives the other Party notice of non-renewal at least thirty (30) days prior to the end of the then-current term.

7.2 Termination. Upon termination or expiration of this Agreement, Flock will remove any applicable Flock Hardware at a commercially reasonable time period. In the event of any material breach of this Agreement, the non-breaching Party may terminate this Agreement prior to the end of the Term by giving thirty (30) days prior written notice to the breaching Party; provided, however, that this Agreement will not terminate if the breaching Party has cured the breach prior to the expiration of such thirty (30) day period (“Cure Period”). Either Party may terminate this Agreement (i) upon the institution by or against the other Party of insolvency, receivership or bankruptcy proceedings, (ii) upon the other Party's making an assignment for the benefit of creditors, or (iii) upon the other Party's dissolution or ceasing to do business. In the event of a material breach by Flock, and Flock is unable to cure within the Cure Period, Flock will refund Customer a pro-rata portion of the pre-paid fees for Services not received due to such termination.

7.3 Survival. The following Sections will survive termination: 1, 3, 5, 6, 7, 8.3, 8.4, 9, 11.1 and

11.6. 8. REMEDY FOR DEFECT; WARRANTY AND DISCLAIMER

8.1 Manufacturer Defect. Upon a malfunction or failure of Flock Hardware or Embedded Software (a “Defect”), Customer must notify Flock’s technical support team. In the event of a Defect, Flock shall make a commercially reasonable attempt to repair or replace the defective Flock Hardware at no additional cost to the Customer. Flock reserves the right, in its sole discretion, to repair or replace such Defect, provided that Flock shall conduct inspection or testing within a commercially reasonable time, but no longer than seven (7) business days after Customer gives notice to Flock.

8.2 Replacements. In the event that Flock Hardware is lost, stolen, or damaged, Customer may request a replacement of Flock Hardware at a fee according to the reinstall fee schedule (https://www.flocksafety.com/reinstall-fee-schedule). In the event that Customer chooses not to replace lost, damaged, or stolen Flock Hardware, Customer understands and agrees that (1) Flock Services will be materially affected, and (2) that Flock shall have no liability to Customer regarding such affected Flock Services, nor shall Customer receive a refund for the lost, damaged, or stolen Flock Hardware.

8.3 Warranty. Flock shall use reasonable efforts consistent with prevailing industry standards to maintain the Services in a manner which minimizes errors and interruptions in the Services and shall perform the Installation Services in a professional and workmanlike manner. Services may be temporarily unavailable for scheduled maintenance or for unscheduled emergency maintenance, either by Flock or by third-party providers, or because of other causes beyond Flock’s reasonable control, but Flock shall use reasonable efforts to provide advance notice in writing or by e-mail of any scheduled service disruption.

8.4 Disclaimer. THE REMEDY DESCRIBED IN SECTION 8.1 ABOVE IS CUSTOMER’S SOLE REMEDY, AND FLOCK’S SOLE LIABILITY, WITH RESPECT TO DEFECTS.

FLOCK DOES NOT WARRANT THAT THE SERVICES WILL BE UNINTERRUPTED OR ERROR FREE; NOR DOES IT MAKE ANY WARRANTY AS TO THE RESULTS THAT MAY BE OBTAINED FROM USE OF THE SERVICES. EXCEPT AS EXPRESSLY SET FORTH IN THIS SECTION, THE SERVICES ARE PROVIDED “AS IS” AND FLOCK

DISCLAIMS ALL WARRANTIES, EXPRESS OR IMPLIED, INCLUDING, BUT NOT

LIMITED TO, IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE AND NON-INFRINGEMENT. THIS DISCLAIMER ONLY

APPLIES TO THE EXTENT ALLOWED BY THE GOVERNING LAW OF THE STATE MENTIONED IN SECTION 11.6.

8.5 Insurance. Flock will maintain commercial general liability policies as stated in Exhibit B.

8.6 Force Majeure. Parties are not responsible or liable for any delays or failures in performance from any cause beyond their control, including, but not limited to acts of God, changes to law or regulations, embargoes, war, terrorist acts, pandemics (including the spread of variants), issues of national security, acts or omissions of third-party technology providers, riots, fires, earthquakes, floods, power blackouts, strikes, supply chain shortages of equipment or supplies, financial institution crisis, weather conditions or acts of hackers, internet service providers or any other third party acts or omissions.

9. LIMITATION OF LIABILITY; INDEMNITY

9.1 Limitation of Liability. NOTWITHSTANDING ANYTHING TO THE CONTRARY,

FLOCK, ITS OFFICERS, AFFILIATES, REPRESENTATIVES, CONTRACTORS AND

EMPLOYEES SHALL NOT BE RESPONSIBLE OR LIABLE WITH RESPECT TO ANY

SUBJECT MATTER OF THIS AGREEMENT OR TERMS AND CONDITIONS RELATED

THERETO UNDER ANY CONTRACT, NEGLIGENCE, STRICT LIABILITY, PRODUCT LIABILITY, OR OTHER THEORY: (A) FOR LOSS OF REVENUE, BUSINESS OR BUSINESS INTERRUPTION; (B) INCOMPLETE, CORRUPT, OR INACCURATE DATA; (C) COST OF PROCUREMENT OF SUBSTITUTE GOODS, SERVICES OR TECHNOLOGY; (D)

FOR ANY INDIRECT, EXEMPLARY, INCIDENTAL, SPECIAL OR CONSEQUENTIAL DAMAGES; (E) FOR ANY MATTER BEYOND FLOCK’S ACTUAL KNOWLEDGE OR

REASONABLE CONTROL INCLUDING REPEAT CRIMINAL ACTIVITY OR INABILITY TO CAPTURE FOOTAGE; OR (F) FOR ANY AMOUNTS THAT, TOGETHER WITH

AMOUNTS ASSOCIATED WITH ALL OTHER CLAIMS, EXCEED THE FEES PAID

AND/OR PAYABLE BY CUSTOMER TO FLOCK FOR THE SERVICES UNDER THIS AGREEMENT IN THE TWELVE (12) MONTHS PRIOR TO THE ACT OR OMISSION THAT

GAVE RISE TO THE LIABILITY, IN EACH CASE, WHETHER OR NOT FLOCK HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. THIS LIMITATION OF

LIABILITY OF SECTION ONLY APPLIES TO THE EXTENT ALLOWED BY THE GOVERNING LAW OF THE STATE REFERENCED IN SECTION 10.6.

NOTWITHSTANDING ANYTHING TO THE CONTRARY, THE FOREGOING

LIMITATIONS OF LIABILITY SHALL NOT APPLY (I) IN THE EVENT OF GROSS

NEGLIGENCE OR WILLFUL MISCONDUCT, OR (II) INDEMNIFICATION OBLIGATIONS.

9.2 Responsibility. Each Party to this Agreement shall assume the responsibility and liability for the acts and omissions of its own employees, officers, or agents, in connection with the performance of their official duties under this Agreement. Each Party to this Agreement shall be liable for the torts of its own officers, agents, or employees.

9.3 Flock Indemnity. Flock shall indemnify and hold harmless Customer, its agents and employees, from liability of any kind, including claims, costs (including defense) and expenses, on account of: (i) any copyrighted material, patented or unpatented invention, articles, device or appliance manufactured or used in the performance of this Agreement; or (ii) any damage or injury to property or person directly caused by Flock’s installation of Flock Hardware, except for where such damage or injury was caused solely by the negligence of the Customer or its agents, officers or employees. Flock’s performance of this indemnity obligation shall not exceed the fees paid and/or payable for the services rendered under this Agreement in the preceding twelve (12) months.

10. INSTALLATION SERVICES AND OBLIGATIONS

10.1 Ownership of Hardware. Flock Hardware is owned and shall remain the exclusive property of Flock. Title to any Flock Hardware shall not pass to Customer upon execution of this Agreement, except as otherwise specifically set forth in this Agreement. Except as otherwise expressly stated in this Agreement, Customer is not permitted to remove, reposition, re-install, tamper with, alter, adjust or otherwise take possession or control of Flock Hardware. Customer agrees and understands that in the event Customer is found to engage in any of the foregoing restricted actions, all warranties herein shall be null and void, and this Agreement shall be subject to immediate termination for material breach by Customer. Customer shall not perform any acts which would interfere with the retention of title of the Flock Hardware by Flock. Should Customer default on any payment of the Flock Services, Flock may remove Flock Hardware at Flock’s discretion. Such removal, if made by Flock, shall not be deemed a waiver of Flock’s rights to any damages Flock may sustain as a result of Customer’s default and Flock shall have the right to enforce any other legal remedy or right.

10.2 Deployment Plan. Flock shall advise Customer on the location and positioning of the Flock Hardware for optimal product functionality, as conditions and locations allow. Flock will collaborate with Customer to design the strategic geographic mapping of the location(s) and implementation of Flock Hardware to create a deployment plan (“Deployment Plan”). In the event that Flock determines that Flock Hardware will not achieve optimal functionality at a designated location, Flock shall have final discretion to veto a specific location, and will provide alternative options to Customer.

10.3 Changes to Deployment Plan. After installation of Flock Hardware, any subsequent requested changes to the Deployment Plan, including, but not limited to, relocating, repositioning, adjusting of the mounting, removing foliage, replacement, changes to heights of poles will incur a fee according to the reinstall fee schedule located at (https://www.flocksafety.com/reinstall-fee-schedule). Customer will receive prior notice and confirm approval of any such fees.

10.4 Customer Installation Obligations. Customer is responsible for any applicable supplementary cost as described in the Customer Implementation Guide, attached hereto as Exhibit C (“Customer Obligations”). Customer represents and warrants that it has, or shall lawfully obtain, all necessary right title and authority and hereby authorizes Flock to install the Flock Hardware at the designated locations and to make any necessary inspections or maintenance in connection with such installation.

10.5 Flock’s Obligations. Installation of any Flock Hardware shall be installed in a professional manner within a commercially reasonable time from the Effective Date of this Agreement. Upon removal of Flock Hardware, Flock shall restore the location to its original condition, ordinary wear and tear excepted. Flock will continue to monitor the performance of Flock Hardware for the length of the Term. Flock may use a subcontractor or third party to perform certain obligations under this agreement, provided that Flock’s use of such subcontractor or third party shall not release Flock from any duty or liability to fulfill Flock’s obligations under this Agreement.

11. MISCELLANEOUS

11.1 Compliance With Laws. Parties shall comply with all applicable local, state and federal laws, regulations, policies and ordinances and their associated record retention schedules, including responding to any subpoena request(s).

11.2 Severability. If any provision of this Agreement is found to be unenforceable or invalid, that provision will be limited or eliminated to the minimum extent necessary so that this Agreement will otherwise remain in full force and effect.

11.3 Assignment. This Agreement is not assignable, transferable or sublicensable by either Party, without prior consent. Notwithstanding the foregoing, either Party may assign this Agreement, without the other Party's consent, (i) to any parent, subsidiary, or affiliate entity, or (ii) to any purchaser of all or substantially all of such Party's assets or to any successor by way of merger, consolidation or similar transaction.

11.4 Entire Agreement. This Agreement, together with the Order Form(s), the reinstall fee schedule (https://www.flocksafety.com/reinstall-fee-schedule), and any attached exhibits are the complete and exclusive statement of the mutual understanding of the Parties and supersedes and cancels all previous or contemporaneous negotiations, discussions or agreements, whether written and oral , communications and other understandings relating to the subject matter of this Agreement, and that all waivers and modifications must be in a writing signed by both Parties, except as otherwise provided herein. None of Customer’s purchase orders, authorizations or similar documents will alter the terms of this Agreement, and any such conflicting terms are expressly rejected. Any mutually agreed upon future purchase order is subject to these legal terms and does not alter the rights and obligations under this Agreement, except that future purchase orders may outline additional products, services, quantities and billing terms to be mutually accepted by Parties. In the event of any conflict of terms found in this Agreement or any other terms and conditions, the terms of this Agreement shall prevail. Customer agrees that Customer’s purchase is neither contingent upon the delivery of any future functionality or features nor dependent upon any oral or written comments made by Flock with respect to future functionality or feature.

11.5 Relationship. No agency, partnership, joint venture, or employment is created as a result of this Agreement and Parties do not have any authority of any kind to bind each other in any respect whatsoever. Flock shall at all times be and act as an independent contractor to Customer.

11.6 Governing Law; Venue. This Agreement shall be governed by the laws of the state in which the Customer is located. The Parties hereto agree that venue would be proper in the chosen courts of the State of which the Customer is located. The Parties agree that the United Nations Convention for the International Sale of Goods is excluded in its entirety from this Agreement.

11.7 Special Terms. Flock may offer certain special terms which are indicated in the proposal and will become part of this Agreement, upon Customer’s prior written consent and the mutual execution by authorized representatives (“Special Terms”). To the extent that any terms of this Agreement are inconsistent or conflict with the Special Terms, the Special Terms shall control.

11.8 Publicity. Flock has the right to reference and use Customer’s name and trademarks and disclose the nature of the Services in business and development and marketing efforts.

11.9 Feedback. If Customer or Authorized End User provides any suggestions, ideas, enhancement requests, feedback, recommendations or other information relating to the subject matter hereunder, Agency or Authorized End User hereby assigns to Flock all right, title and interest (including intellectual property rights) with respect to or resulting from any of the foregoing.

11.10 Export. Customer may not remove or export from the United States or allow the export or re-export of the Flock IP or anything related thereto, or any direct product thereof in violation of any restrictions, laws or regulations of the United States Department of Commerce, the United States Department of Treasury Office of Foreign Assets Control, or any other United States or foreign Customer or authority. As defined in Federal Acquisition Regulation (“FAR”), section

2.101, the Services, the Flock Hardware and Documentation are “commercial items” and according to the Department of Defense Federal Acquisition Regulation (“DFAR”) section 252.2277014(a)(1) and are deemed to be “commercial computer software” and “commercial computer software documentation.” Flock is compliant with FAR Section 889 and does not contract or do business with, use any equipment, system, or service that uses the enumerated banned Chinese telecommunication companies, equipment or services as a substantial or essential component of any system, or as critical technology as part of any Flock system. Consistent with DFAR section 227.7202 and FAR section 12.212, any use, modification, reproduction, release, performance, display, or disclosure of such commercial software or commercial software documentation by the U.S. Government will be governed solely by the terms of this Agreement and will be prohibited except to the extent expressly permitted by the terms of this Agreement.

11.11 Headings. The headings are merely for organization and should not be construed as adding meaning to the Agreement or interpreting the associated sections.

11.12 Authority. Each of the below signers of this Agreement represent that they understand this Agreement and have the authority to sign on behalf of and bind the Parties they are representing.

11.13 Conflict. In the event there is a conflict between this Agreement and any applicable statement of work, or Customer purchase order, this Agreement controls unless explicitly stated otherwise.

11.14 Morality. In the event Customer or its agents become the subject of an indictment, contempt, scandal, crime of moral turpitude or similar event that would negatively impact or tarnish Flock’s reputation, Flock shall have the option to terminate this Agreement upon prior written notice to Customer.

11.15 Notices. All notices under this Agreement will be in writing and will be deemed to have been duly given when received, if personally delivered; when receipt is electronically confirmed, if transmitted by email; the day after it is sent, if sent for next day delivery by recognized overnight delivery service; and upon receipt to the address listed on the Order Form (or, if different, below), if sent by certified or registered mail, return receipt requested.

11.16 Non-Appropriation. Notwithstanding any other provision of this Agreement, all obligations of the Customer under this Agreement which require the expenditure of funds are conditioned on the availability of funds appropriated for that purpose. Customer shall have the right to terminate this Agreement for non appropriation with thirty (30) days written notice without penalty or other cost.

FLOCK NOTICES ADDRESS:
1170 HOWELL MILL ROAD, NW SUITE 210
ATLANTA, GA 30318
ATTN: LEGAL DEPARTMENT
EMAIL: [email protected]
Customer NOTICES ADDRESS:

ADDRESS:

ATTN:

EMAIL:

EXHIBIT B

INSURANCE
Required Coverage. Flock shall procure and maintain for the duration of this Agreement insurance against claims for injuries to persons or damages to property that may arise from or in connection with the performance of the services under this Agreement and the results of that work by Flock or its agents, representatives, employees or subcontractors. Insurance shall be placed with insurers with a current A. M. Best rating of no less than “A” and “VII”. Flock shall obtain and, during the term of this Agreement, shall maintain policies of professional liability (errors and omissions), automobile liability, and general liability insurance for insurable amounts of not less than the limits listed herein. The insurance policies shall provide that the policies shall remain in full force during the life of the Agreement. Flock shall procure and shall maintain during the life of this Agreement Worker's Compensation insurance as required by applicable State law for all Flock employees.

Types and Amounts Required. Flock shall maintain, at minimum, the following insurance coverage for the duration of this Agreement:
(i) Commercial General Liability insurance written on an occurrence basis with minimum limits of One Million Dollars ($1,000,000) per occurrence and Two Million Dollars ($2,000,000) in the aggregate for bodily injury, death, and property damage, including personal injury, contractual liability, independent contractors, broad-form property damage, and product and completed operations coverage;
(ii) Umbrella or Excess Liability insurance written on an occurrence basis with minimum limits of Ten Million Dollars ($10,000,000) per occurrence and Ten Million Dollars ($10,000,000) in the aggregate;
(iii) Professional Liability/Errors and Omissions insurance with minimum limits of Five Million Dollars ($5,000,000) per occurrence and Five Million Dollars ($5,000,000) in the aggregate;
(iv) Commercial Automobile Liability insurance with a minimum combined single limit of One Million Dollars ($1,000,000) per occurrence for bodily injury, death, and property coverage, including owned and non-owned and hired automobile coverage; and (v) Cyber Liability insurance written on an occurrence basis with minimum limits of Five Million Dollars ($5,000,000).

DECEMBER 12, 2023

PUBLIC HEARINGS

ENERGY EFFICIENCY AND INFRASTRUCTURE IMPROVEMENT

PROJECT BY WILLDAN ENERGY SOLUTIONS
A. HEAR STAFF REPORT
B. OPEN THE PUBLIC HEARINGS
C. HEAR TESTIMONY IN THE FOLLOWING ORDER:
(1) THOSE IN FAVOR
(2) THOSE OPPOSED
D. MOTION TO CLOSE THE PUBLIC HEARINGS
MOTION:

MOVED BY: _______________
SECONDED BY: ____________
[ ] APPROVED
[ ] DENIED
ROLL CALL VOTE:

AYES: __________________
NOES: __________________
ABSENT: ________________
ABSTAIN:________________
To: Honorable City Council
From: John Moreno, City Manager
By: Adriana Figueroa, Public Works Director
Kim Sao, Finance Director
Date: December 12, 2023
Subject: ENERGY EFFICIENCY AND INFRASTRUCTURE IMPROVEMENT

PROJECT BY WILLDAN ENERGY SOLUTIONS

BACKGROUND
On March 28, 2023, the City Council approved a Contingent Design and Engineering Services agreement with Willdan Energy Solutions (WES). This approval authorized the City to initiate a comprehensive energy efficiency analysis, involving multiple tasks at various City sites and buildings. In November of this year, WES provided two presentations with the outcomes of the analysis and recommendations for projects that not only cut energy costs for the City, but also align with the objectives outlined in the City’s Climate Action Plan (CAP). The projects presented include the installation of Advanced Metering Infrastructure (AMI) water meters citywide, solar photovoltaic systems at Paramount Park and City Yard, and an Electric Vehicle Quick Charger installation at the City Yard.

DISCUSSION
Agreement with Willdan Energy Solutions
The first step to approving the energy efficiency and infrastructure improvements outlined in the analysis, includes approving an Agreement with Willdan Energy Solutions (WES) for implementation of the projects presented. WES will handle all aspects of the project, including design, solicitation of bids, selection of contractors, construction management and all required reporting. California Government Code Sections 4217.10 to 4217.18, authorizes the City to enter into an Energy Services Contract for the implementation of energy related improvements if the Council determines that it is in the best interest of the City to enter into such an agreement. In particular, under Section 4217.12 of said Code, the cost to the City to implement the improvements provided by the Energy Services Contract must be less than the anticipated cost to the City for the energy that would have been consumed by the City in lieu of purchasing the improvements. Approval of Resolution No. 23:037 will allow the City to enter into an agreement with WES.

Agenda Report December 12, 2023
ENERGY EFFICIENCY PROJECT Page 2
H:\Public Works\PWAGENDA\COMMON FILE\Agenda Rpt - Reso 23-037 and 23-038.docx; 12/8/2023 9:38 AM Lease Agreement with Banc of America
The second step in the process is to approve a resolution authorizing the City to enter into an Equipment Lease/Purchase Agreement (the “Lease Agreement”) with Banc of America Public Capital Corp. (“BAPCC”) to provide funds to finance the AMI meter portion of the improvements to be constructed by WES. Said resolution would also authorize the City to enter into an escrow agreement among the City, BAPCC and Wilmington Trust, National Association, as escrow agent, to provide a mechanism for holding and applying the proceeds of the Lease Agreement to the acquisition and installation of the AMI meter project. The rental payments under the Lease Agreement will be payable from all legal available funds of the City, subject to annual appropriation. The City plans to make annual lease payments from its General Fund and to reimburse the General Fund for such payments from amounts in the Water Enterprise Fund, subject to satisfaction of certain conditions specified in Resolution No. 23:038. In the event such conditions are not satisfied, the City will need to use other legally available funds (i.e. the City’s General Fund) to make annual lease payments.

Project Costs
The following is a breakdown of estimated total project costs:

AMI Meters $11,174,355
Closing Costs (estimated) $66,000
Subtotal $11,240,355
Paramount Park Solar $400,386
City Yard Solar $809,313
City Yard EV Charger $274,719
Subtotal $1,484,418
Project Total $12,724,773

FISCAL IMPACT
The AMI meters will be financed through the Lease Agreement with BAPCC for a 20-year term at an interest rate of 4.859%. The Lease Agreement is structured with level fiscal year payments of approximately $897,304 per year. The rental payments under the Lease Agreement will be payable from all legal available funds of the City, subject to annual appropriation. The solar production and water meter accuracy is guaranteed and will be measured and verified annually for 3 years. The guaranteed meter accuracy created by the newly installed meters will generate additional billable gallons that have been calculated to pay for the annual lease payment of the system.

Because the AMI meters represent a project of the Water Enterprise, Resolution No. 23:038 directs the Finance Director to prepare a budget for each fiscal year for approval by the City Council that includes amounts for direct payments or reimbursement from the Agenda Report December 12, 2023
ENERGY EFFICIENCY PROJECT Page 3
H:\Public Works\PWAGENDA\COMMON FILE\Agenda Rpt - Reso 23-037 and 23-038.docx; 12/8/2023 9:38 AM Water Enterprise Fund of the City for rental payments payable under the Lease Agreement, in the amounts and at the times set forth in the Lease Agreement, which shall be calculated with a repayment term over 20 years, prepayable at any time, and at interest rate equal to the City’s interest cost of said rental payments; provided, however, that all such amounts will be payable therefrom only (A) after the City has (i) paid all Operations and Maintenance Costs for such fiscal year in accordance with Section 3.02 of the Installment Sale Agreements, and (ii) made all other payments required to be made under Section 3.03 of the Installment Sale Agreements for such fiscal year, and (B) so long as no Event of Default has occurred and is continuing under the Installment Sale Agreements. This means that in the event that the foregoing conditions are not satisfied with respect to any fiscal year, such amounts will not be payable from the Water Enterprise Fund in said fiscal year and the payments under the Lease Agreement will need to be paid from other legally available funds of the City (i.e. the City’s General Fund).

The obligation of the Water Enterprise to make, or reimburse the City’s General Fund for, rental payments payable under the Lease Agreement will not be secured by a pledge on or lien on System Revenues or Net System Revenues or any other revenues or properties of the Water Enterprise Fund.

However, it is important to note that annual savings generated by the AMI meters are anticipated to exceed the annual lease payments in each year. In the event that the annual savings are not enough to cover the annual lease payments, the City contract with WES requires WES to pay for any costs associated with the lease payments.

Additionally, the City anticipates receiving up to $5 million of funds under the WaterSmart Grant program. The grant funds may be applied to pay down the principal of the Lease Agreement, if received within three years of the closing of the financing, at a premium of 1%. Additionally, the City has the option to pre-pay the entire Lease Agreement, in whole, on any interest payment date at a premium of 2%.

Funding for the solar and EV Charger in the approximate amount of $1,484,814 was not included in the FY 2023-24 Budget. Funding for this project will be covered by the available General Fund balance reserved for Capital Improvement projects.

See Attachment A for a preliminary numbers packet.

VISION, MISSION, VALUES, AND STRATEGIC OUTCOMES
The City’s Vision, Mission, and Values set the standard for the organization; establish priorities, uniformity, and guidelines; and provide the framework for policy decision making. The Strategic Outcomes were implemented to provide a pathway to achieving the City’s Vision. This item aligns with Strategic Outcome No. 4: Environmental Health and No. 6 Efficient, Effective, and Fiscally Responsible.

Agenda Report December 12, 2023
ENERGY EFFICIENCY PROJECT Page 4
H:\Public Works\PWAGENDA\COMMON FILE\Agenda Rpt - Reso 23-037 and 23-038.docx; 12/8/2023 9:38 AM

RECOMMENDED ACTION
It is recommended that the City Council
a) 1) Read by title only and adopt Resolution No. 23:037 Adopting certain findings and approving the Energy Service Contract for energy related improvements to City facilities and infrastructure with Willdan Energy Solutions, and 2) appropriate $1,484,850 from the available General Fund CIP reserve for the solar and EV charger project and add this to the Willdan Energy Audit Project (CIP No. 9493). b) Read by title only and adopt Resolution No. 23:038 Authorizing an Equipment Lease/Purchase Agreement with respect to the acquisition, financing and leasing of water meters and other equipment and delegating authority to negotiate and execute documents required in connection therewith, and to memorialize the obligation of the City’s Water Enterprise Fund to pay or reimburse the City’s General Fund for all costs of such water meters and equipment advanced or to be advanced by the City’s General Fund.

DECEMBER 12, 2023
RESOLUTION NO. 23:037
“A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PARAMOUNT

AUTHORIZING THE CITY TO EXECUTE AN ENERGY SERVICES

CONTRACT WITH WILLDAN ENERGY SOLUTIONS UNDER
GOVERNMENT CODE SECTION 4217.12”
MOTION IN ORDER:
1) READ BY TITLE ONLY AND ADOPT RESOLUTION NO. 23:037; AND 2) APPROPRIATE $1,484,850 FROM THE AVAILABLE GENERAL

FUND CIP RESERVE FOR THE SOLAR AND EV CHARGER PROJECT
AND ADD THIS TO THE WILLDAN ENERGY AUDIT PROJECT (CIP NO. 9493).

MOTION:

MOVED BY: _______________
SECONDED BY: ____________
[ ] APPROVED
[ ] DENIED
ROLL CALL VOTE:

AYES: __________________
NOES: __________________
ABSENT: ________________
ABSTAIN:________________

CITY OF PARAMOUNT

LOS ANGELES COUNTY, CALIFORNIA
RESOLUTION NO. 23:037

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PARAMOUNT

AUTHORIZING THE CITY TO EXECUTE AN ENERGY SERVICES

CONTRACT WITH WILLDAN ENERGY SOLUTIONS UNDER
GOVERNMENT CODE SECTION 4217.12
WHEREAS, California Government Code Section 4217.10 to 4217.18, authorizes the City to enter into an Energy Services Contract for the implementation of energy related improvements if the City finds that it is in the best interest of the City to enter into such Energy Service Contract and that the anticipated cost to the City for thermal or electrical energy or conservation services provided by Willdan Energy Solutions under the contract will be less than the anticipated marginal cost to the City for thermal, electrical, or other energy that would have been consumed by the City in absent of those purchases; and WHEREAS, the proposed Energy Service Contract by and between the City and Willdan Energy Solutions for the implementation of certain energy measures whose cost to the City for thermal or electrical energy or conservation services provided under the Energy Service Contract will be less than the anticipated marginal cost to the City for thermal, electrical, or other energy that would have been consumed by the City in absent of the implementation of the improvements under the Energy Service Contract.

NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PARAMOUNT AS FOLLOWS:

SECTION 1. The above recitations are true and correct.

SECTION 2. This City hereby declares its intention to enter into the proposed agreement with Willdan Energy Solutions for energy conservation services for the City’s facilities as defined by the Energy Services Contract.

SECTION 3. The City Clerk is directed to certify the adoption of this Resolution.

SECTION 4. This Resolution shall take effect immediately upon its adoption.

PASSED, APPROVED, and ADOPTED by the City Council of the City of Paramount this 12th of December 2023.

Isabel Aguayo, Mayor
ATTEST:

Heidi Luce, City Clerk
H:\Public Works\PWAGENDA\COMMON FILE\Reso 23-037 WES.docx;12/8/2023 9:41 AM Two-Phase Energy [and Water] Performance Contract | Page 1 3767-1001 / 2392697.4

CITY OF PARAMOUNT

ENERGY AND WATER SAVINGS PERFORMANCE CONTRACT
This Energy and Water Savings Performance Contract (together with its attached Schedules and Exhibits, the “Contract”) is made and entered into as of this 12th day of December 2023 (the “Effective Date”), between Willdan Energy Solutions, a California corporation with California state contractor’s license number 1065713 (“WES”), and the City of Paramount, a municipal corporation in Los Angeles County, California (“Customer”). Each of WES and Customer may be referred to in this Contract as a “Party” and collectively as the “Parties.”
The purpose of this Contract is two-fold; i.e., for WES to (1) perform an investment grade audit (an “IGA”) of the Customer’s property and buildings (the “Premises”) and Customer-owned and/or operated water distribution infrastructure (the “Infrastructure”); the IGA will form the basis for recommendations, which WES will present to Customer; and (2) implement energy- and water-savings efficiency measures, or other operating cost saving measures and equipment, as well as energy generation measures, and/or feeproducing infrastructure facilities, as described in Schedule A (Scope of Work), with respect to the Premises and the Infrastructure, as well as estimate program costs and overall potential energy and water consumption savings. The Contract will also set forth the terms and conditions under which WES will implement recommendations agreed to by Customer, and any other services agreed by WES and Customer, all of which will be designed to save energy, water, or other operating costs at the Premises and/or with respect to the Infrastructure (collectively, the “Project”).

RECITALS
WHEREAS, Customer owns and operates the Premises and the Infrastructure, and is in need of energy- and water-saving equipment and services designed to reduce energy and water consumption and costs for the Premises and the Infrastructure, as well as improve energy quality and reliability for the Premises and the Infrastructure;
WHEREAS, Customer desires to retain WES to identify and develop energy efficiency measures as well as energy generation measures, and/or fee-producing infrastructure facilities, and in compliance with California Government Code §§4217.10 through 4217.18, to design, engineer, procure, construct, install, and commission such energy efficiency measures and energy generation measures, and/or fee-producing infrastructure facilities, all as described in Schedule A (Scope of Work), attached hereto and made a part hereof, as well as to provide other services for the purpose of achieving energy, water, and operational savings for the Premises and the Infrastructure, as more fully set forth herein; WHEREAS, by adoption of Resolution No. 23:037 at its duly authorized and noticed public meeting on December 12, 2023, Customer approved this Contract and authorized its execution; and WHEREAS, Customer is authorized under the laws of the State of California to enter into this Contract for the purposes set forth herein.

NOW, THEREFORE, in consideration of the mutual promises and covenants contained herein, and intending to be legally bound hereby, Customer and WES hereto covenant and agree as follows:

SECTION 1 ESPC DOCUMENTS
Section 1.1. The ESPC Documents (hereinafter, “ESPC Documents”) consist of this Contract; other documents listed in this Contract; and Modifications issued after execution of this Contract. A “Modification” is a written amendment to the Contract (including the Performance Contract Amendment defined below), signed by both Parties. A change order is a Modification.

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Section 1.2. The ESPC Documents represent the entire and integrated agreement between the Parties and supersede prior negotiations, representations, or agreements, either written or oral. The Contract may be amended or modified only by a Modification. The ESPC Documents shall not be construed to create a contractual relationship of any kind between any persons or entities other than the Customer and WES.

Section 1.3. Schedules and Exhibits. WES has prepared, and Customer has approved and accepted, the Exhibits and Schedules set forth below, copies of which are attached hereto and made part of this Contract by reference.

SCHEDULES
Schedule A Scope of Work
Schedule B Compensation to WES
Schedule C Insurance

EXHIBITS
Exhibit 1 Form of Performance Contract Amendment, including the following Schedules (the “Performance Contract Amendment”):

Schedule 1-A Additional Responsibilities
Schedule 1-B Certificate of Substantial Completion
Schedule 1-C Certificate of Acceptance – Project Final Completion Exhibit 2 Form of Energy and Water Savings Guarantee, including the following Schedules (the “Energy and Water Savings Guarantee”):

Schedule 2-A Baseline Energy and Water Consumption
Schedule 2-B Savings Measurement & Calculation Formulae; Methodology to Adjust Baseline
Exhibit 3 Form of Assured Performance Guarantee – Utility Meters SECTION 2 THE WORK
Section 2.1. The term “Work” means the investigation, design, engineering, construction, installation, commissioning and related services required to fulfill WES’s obligations under the ESPC Documents, whether completed or partially completed, and includes all labor, materials, equipment, and services provided or to be provided by WES.

Section 2.2. WES shall fully execute the Work described in the ESPC Documents, except to the extent specifically indicated in the ESPC Documents to be the responsibility of others.

Section 2.3. WES shall perform all Work through its sub-contractors or through WES’s own forces.

Section 2.4. WES shall perform the Work in accordance with sound engineering and safety practices, in compliance with any and all reasonable rules of Customer relative to the Premises, and in compliance with all applicable state, federal and local laws, statutes, ordinances, codes, rules and regulations, or lawful orders of public authorities in effect on the Effective Date or the date of a Modification, as applicable. If WES performs Work contrary to applicable state, federal and local laws, statutes, ordinances, codes, rules and regulations, and lawful orders of public authorities, WES shall assume responsibility for such Work and shall bear the costs attributable to correction, including costs for any and all legal services necessary for such correction.

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SECTION 3 PHASES OF THE WORK
Section 3.1. The Work, under this Contract, shall be performed in three phases: the IGA Phase, the Construction Phase, and the Energy and Water Savings Guarantee Phase, each as outlined in the Scope of Work.
(a) The IGA Phase will commence on the Effective Date.
(b) The Construction Phase will commence upon the issuance of a formal Notice to Proceed (NTP) following the execution of a Performance Contract Amendment in the form of Exhibit 1, following the conclusion of the IGA Phase.
(c) The Guarantee Phase will commence upon the execution of an Energy and Water Savings Guarantee in the form of Exhibit 2, following the execution of the Certificate of Acceptance – Project Final Completion in the form of Schedule 1-C and an Assured Performance Guarantee in the form of Exhibit 3, following the execution of the Certificate of Acceptance – Project Final Completion in the form of Schedule 1-C.

Section 3.2. The Scope of Work for each phase of the Work is defined in Schedule A (Scope of Work) (the “Scope of Work”). The fee for each phase of the Work is defined in Schedule B (Compensation to WES) (the “Compensation Schedule”).

SECTION 4 FEES FOR THE WORK; PAYMENTS
Section 4.1. Customer will pay WES for the performance of the Work in accordance with the Compensation Schedule.

Section 4.2. Billing Information Procedure. Payments due to WES shall be calculated each month and paid in accordance with the Compensation Schedule.

Section 4.3. Payment. Customer shall pay WES within thirty (30) days of receipt of WES’s application for payment as to all non-disputed fees. If Customer disputes any of WES’s fees, it shall give written notice to WES within thirty (30) days of receipt of an invoice of any disputed fees set forth on the invoice. Non-disputed amounts unpaid thirty (30) days after the invoice date shall bear interest at 1.5% per month.

Section 4.4. Title to Work. WES warrants that title to all Work covered by an Application for Progress Payment will pass to the Customer no later than the time of payment. WES further warrants that upon submittal of an Application for Progress Payment, all Work for which a Progress Payment has been previously issued and WES has received payment from the Customer therefor shall, to the best of WES’s knowledge, information and belief, be free and clear of liens, claims, stop notices, security interests or encumbrances in favor of WES, Subcontractors, Material Suppliers or other persons or entities making a claim by reason of having provided labor, materials and equipment relating to the Work.

SECTION 5 FISCAL FUNDING
Section 5.1. Non-appropriation of Funds. In the event no Customer funds (or other funds), or insufficient Customer funds (or other funds), are appropriated and budgeted for any future fiscal period in which payment will be due to WES under this Contract, and funds are otherwise unavailable by any means whatsoever in such future fiscal period, then the Customer will, not less than thirty (30) days prior to the beginning of such future fiscal period, notify WES in writing of such occurrence, and this Contract shall terminate on the last day of the fiscal period for which appropriations were made, without penalty or expense to the Customer of any kind whatsoever, except as to the portions of payments herein agreed, for which Customer funds and/or other funds shall have been appropriated and budgeted or are otherwise available.

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SECTION 6 ENERGY AND WATER USAGE RECORDS AND DATA
Section 6.1. Customer has furnished or shall furnish (or cause its energy and water suppliers to furnish) to WES, upon its request, all of Customer’s records and complete data concerning energy and water usage and energy- and water-related maintenance for the Premises, including the following data for the most current twenty-six (26) month period: utility records; occupancy information; descriptions of any changes in the building structure or its heating, cooling, lighting, water, or other systems or energy and water requirements; descriptions of all energy and water consuming or saving equipment used in the Premises; bills and records relating to maintenance of energy- and water-related equipment, and a description of energy and water management procedures presently utilized. If requested, Customer shall also provide any prior energy and water audits of the Premises, and copies of Customer’s financial statements and records related to energy and water usage and operations for the most current twenty-six (26) month period at the Premises, and shall make agents and employees familiar with such records available for consultations and discussions with WES.

SECTION 7 REPRESENTATIONS AND WARRANTIES
Section 7.1. Each Party warrants and represents to the other that:
(a) it has all requisite power, authority, licenses, permits, and franchises, corporate or otherwise, to execute and deliver this Contract and perform its obligations hereunder; (b) its execution, delivery, and performance of this Contract have been duly authorized by, or are in accordance with, its organic instruments, and this Contract has been duly executed and delivered for it by the signatories so authorized, and constitutes its legal, valid, and binding obligation; (c) its execution, delivery, and performance of this Contract will not breach or violate, or constitute a default under any Contract, lease or instrument to which it is a party or by which it or its properties may be bound or affected; and
(d) it has not received any notice, nor to the best of its knowledge, is there pending or threatened any notice, of any violation of any applicable laws, ordinances, regulations, rules, decrees, awards, permits or orders which would materially and adversely affect its ability to perform hereunder.

SECTION 8 ADDITIONAL REPRESENTATIONS OF THE PARTIES
Section 8.1. Customer hereby warrants, represents and promises that it has provided, or shall provide timely, to WES all records relating to energy and water usage and energy- and water-related maintenance of the Premises requested by WES and the information set forth therein is, and all information in other records to be subsequently provided pursuant to this Contract will be, true and accurate in all material respects.

Section 8.2. WES hereby warrants, represents and promises that:
(a) it is properly qualified, licensed and equipped to supply and perform the Work in the State of California ;
(b) it shall make available, upon reasonable request, all documents relating to its performance under this Contract, including all contracts and subcontracts entered into; (c) it shall use qualified subcontractors and delegates, appropriately registered, licensed and bonded in this state, to perform the Work so subcontracted or delegated pursuant to the terms hereof; (d) it is financially solvent, able to pay its debts as they mature and possessed of sufficient working capital to complete the Work and perform its obligations under this Contract.

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SECTION 9 PERFORMANCE BY WES
Section 9.1. WES shall perform all tasks/phases under the Contract, including the IGA Phase and the Construction Phase, in such a manner so as not to harm the structural integrity of the buildings or their operating systems. WES shall repair and restore, at its own cost and expense and without reimbursement from Customer, to its original condition any area of damage caused by WES’s performance under this Contract. Customer reserves the right to review the Work performed by WES and to direct WES to take certain corrective action if, in the reasonable opinion of the Customer, the structural integrity of the Premises or its operating system is or will be harmed. All costs associated with such corrective action to damage caused by WES’s performance of the Work shall be borne by WES.

Section 9.2. WES shall remain responsible for the professional and technical accuracy of all Work performed, whether by WES or its subcontractors or others on its behalf, throughout the term of this Contract.

Section 9.3. WES shall keep informed of state and federal laws and regulations which in any manner affect those employed by it or in any way affect the performance of services pursuant to this Contract.

WES shall at all times observe and comply with all such laws and regulations. Customer, and its officers and employees, shall not be liable at law or in equity occasioned by failure of WES to comply with this Section.

SECTION 10 OWNERSHIP
Section 10.1. Ownership of Certain Proprietary Property Rights. Customer shall not, by virtue of this Contract, acquire any interest in any formulas, patterns, devices, secret inventions or processes, copyrights, patents, other intellectual or proprietary rights, or similar items of property which are or may be used in connection with the Work. All data, reports, proposals, plans, specifications, flow sheets, drawings, and other products of the Work (the “Instruments of Service”) furnished directly or indirectly, in writing or otherwise, to Customer by WES under this Contract will remain WES’s property and may be used by Customer only for the Work. WES will be deemed the author and owner of such Instruments of Service and will retain all common law, statutory and other reserved rights, including copyrights. The Instruments of Service may not be used by Customer for future additions or alterations to the Project or for other projects, without the prior written agreement of WES. Any unauthorized use of the Instruments of Service will be at Customer’s sole risk and without liability to WES. If Customer uses the Instruments of Service for implementation purposes, including additions to or completion of the Project, without the written permission of WES, Customer agrees to waive and release, and indemnify and hold harmless, WES, its subcontractors, and their directors, employees, subcontractors, and agents from any and all claims, losses, and other liabilities associated with or resulting from such use.

SECTION 11 INDEMNIFICATION
Section 11.1. To the fullest extent permitted by law, WES shall defend (with counsel of Customer’s choosing, reasonably acceptable to WES), indemnify and hold Customer, its directors, officials, officers, employees, volunteers and agents free and harmless from any and all third-party claims, demands, causes of action, costs, expenses, liability, loss, damage or injury of any kind, in law or equity, to property or persons, including wrongful death, to the extent arising in any manner out of, pertaining to, or incident to any alleged acts, errors or omissions, or willful misconduct of WES, its officials, officers, employees, subcontractors, contractors or agents in connection with the performance of WES’s Work, the Project or this Contract, including without limitation the payment of all damages, reasonable expert witness fees and reasonable attorney’s fees and other related costs and expenses. WES’s obligation to indemnify shall not be restricted to insurance proceeds, if any, received by WES, Customer, its officials, officers, employees, agents, or volunteers.

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Section 11.2. If WES’s obligation to defend, indemnify, and/or hold harmless arises out of WES’s performance as a “design professional” (as that term is defined under Civil Code section 2782.8), then, and only to the extent required by Civil Code section 2782.8, which is fully incorporated herein, WES’s indemnification obligation shall be limited to claims that arise out of, pertain to, or relate to the negligence, recklessness, or willful misconduct of WES, and, upon WES obtaining a final adjudication by a court of competent jurisdiction, WES’s liability for such claims, including the cost to defend, shall not exceed WES’s proportionate percentage of fault.

Section 11.3. Payment by Customer is not a condition precedent to enforcement of this indemnity.

In the event of any dispute between WES and Customer, as to whether liability arises from the sole negligence of Customer or its officers, employees, or agents, WES will be obligated to pay for Customer’s defense until such time as a final judgment has been entered adjudicating the Customer as solely negligent.

WES will not be entitled in the absence of such a determination to any reimbursement of defense costs including but not limited to reasonable attorney’s fees, expert fees, and costs of litigation.

Section 11.4. The liability of a defaulting Party will be limited to direct, actual damages. Neither Party shall be liable to the other Party for any special, indirect, incidental or consequential damages whatsoever, whether in contract, tort (including negligence) or strict liability, including, but not limited to, operational losses in the performance of business such as lost profits or revenues or any increase in operating expense.

SECTION 12 CONDITIONS BEYOND CONTROL OF THE PARTIES
Section 12.1. WES shall notify Customer in writing immediately of any delay or anticipated delay in WES’s performance of this Contract due to causes or circumstances beyond the reasonable control of WES. Notice shall include the reason for and anticipated length of the delay, and the date of performance shall be extended for a period equal to the time lost by reason of the delay. WES may be entitled to additional compensation due to any such extension of time due to causes or circumstances beyond the reasonable control of WES. Any extension of time pursuant to this Section 12.1 shall be documented by a Modification signed by the Parties. Examples of such possibly excusable delays are natural calamities, strikes and boycotts, war, viral pandemics or civil unrest or governmental actions and other events that are commonly deemed force majeure events.

SECTION 13 EVENTS OF DEFAULT
Section 13.1. Events of Default by Customer. Each of the following events or conditions shall constitute a “Customer Event of Default”:
(a) any failure by Customer to pay any non-disputed amount to WES which is not paid within five (5) days after written notification by WES that Customer is delinquent in making payment; provided that WES is not then in default in its performance under the terms of this Contract; or (b) any other material failure by Customer to perform or comply with the terms and conditions of this Contract, including breach of any covenant contained herein, provided that such failure continues for thirty (30) days after notice to Customer demanding that such failures to perform be cured, or if such cure cannot be effected in thirty (30) days, Customer shall not be in default if Customer commences a cure within such thirty (30) day period and diligently pursues completion thereof; or (c) any representation or warranty furnished by Customer in this Contract was false or misleading in any material respect when made.

Section 13.2. Events of Default by WES. Each of the following events or conditions shall constitute a “WES Event of Default”:

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(a) any failure by WES to meet the standards of comfort and service set forth in Schedule 1-A-3 due to failure by WES to properly design, install, maintain, repair or adjust the Equipment; provided that such failure continues for thirty (30) days after notice to WES demanding that such standards be met, or if such failure cannot be cured within thirty (30) days, WES shall not be in default if WES commences a cure within such thirty (30) day period and diligently pursues completion thereof. (b) any other material failure by WES to perform or comply with the terms and conditions of this Contract, including breach of any covenant contained herein, provided that such failure continues for thirty (30) days after notice to WES demanding that such failures to perform be cured, or if such cure cannot be effected in thirty (30) days, WES shall not be in default if WES commences a cure within such thirty (30) day period and diligently pursues completion thereof; (c) any representation or warranty furnished by WES in this Contract was false or misleading in any material respect when made; or
(d) the filing of a bankruptcy petition, whether by WES or its creditors against WES, which proceeding shall not have been dismissed within sixty (60) days of its filing, or an involuntary assignment for the benefit of all creditors or the liquidation of WES.

SECTION 14 REMEDIES UPON DEFAULT
Section 14.1. Remedies upon Default. All disputes shall be submitted to the individuals listed in Section 23 for resolution. In the event that a remedy acceptable to both Customer and WES cannot be found, either Party may seek mediation as outlined in Section 15.

SECTION 15 MEDIATION
Section 15.1. Any claims or actions (“Claims”) arising out of or related to the Contract shall be subject to mediation as a condition precedent to arbitration or the institution of legal or equitable proceedings by either Party.

Section 15.2. The Parties shall endeavor to resolve their Claims by mediation which, unless the Parties mutually agree otherwise, shall be in accordance with the Construction Industry Mediation Rules of the American Arbitration Association then in effect. Request for mediation shall be filed in writing with the other Party to the Contract and with the American Arbitration Association. The request may be made concurrently with the filing of a demand for arbitration but, in such event, mediation shall proceed in advance of arbitration or legal or equitable proceedings, which shall be stayed pending mediation for a period of sixty (60) days from the date of filing, unless stayed for a longer period by agreement of the Parties or court order.

Section 15.3. The Parties shall share the mediator’s fee and any filing fees equally.

Section 15.4. The mediation shall be held in the place where the Project is located, unless another location is mutually agreed upon.

Section 15.5. Agreements reached in mediation shall be enforceable as settlement agreements in any court having jurisdiction thereof.

SECTION 16 LIENS
Section 16.1. WES will promptly pay, when due, all amounts payable for labor and materials furnished in the performance of this Contract and will endeavor to prevent any lien or other claim from arising against any Customer property, against WES’s rights to payments hereunder, or against Customer.

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SECTION 17 INDEPENDENT CONTRACTOR
Section 17.1. Customer and WES agree and represent this Contract is entered into with the understanding that WES is not an employee of Customer and is intended, for all purposes, to have the status of independent contractor under Labor Code Section 2776.

Section 17.2. In the event the Customer determines that a legal, judicial, or administrative determination has a material effect upon the status of WES as an independent contractor, the Customer shall have the right, with or without notice, to automatically terminate the Contract. In Customer’s sole discretion, Customer may propose modification of the Contract’s terms to permit WES’s continued performance of the Work.

Section 17.3. As an independent contractor, WES shall be free from control and direction of the Customer in connection with the performance of duties, and WES retains exclusive discretion in how to perform duties, subject to other terms and conditions of this Contract. The personnel performing the Work under this Contract on behalf of WES shall at all times be under WES’s exclusive direction and control.

Neither Customer nor any of its officers, employees, or agents shall have control over the conduct of WES or any of WES’s officers, employees, or agents, except as set forth in this Contract.

Section 17.4. WES shall pay all wages, salaries, and other amounts due such personnel in connection with their performance of Work under this Contract and as required by law. WES shall be responsible for all reports and obligations respecting such additional personnel, including, but not limited to: social security taxes, income tax withholding, unemployment insurance, disability insurance, and workers’ compensation insurance.

Section 17.5. WES shall not at any time or in any manner represent that it or any of its officers, employees, or agents are in any manner officers, employees, or agents of Customer. WES shall not incur or have the power to incur any debt, obligation, or liability whatsoever against Customer, or bind Customer in any manner.

Section 17.6. No employee benefits shall be available to WES in connection with the performance of this Contract. Customer shall not be liable for compensation or indemnification to WES for injury or sickness arising out of performing Work hereunder.

SECTION 18 NO WAIVER
Section 18.1. The failure of WES or Customer to insist upon the strict performance of the terms and conditions hereof shall not constitute or be construed as a waiver or relinquishment of either Party’s right to thereafter enforce the same in accordance with this Contract in the event of a continuing or subsequent default on the part of WES or Customer.

SECTION 19 SEVERABILITY
Section 19.1. In the event that any clause or provision of this Contract or any part thereof shall be declared invalid, void, or unenforceable by any court having jurisdiction, such invalidity shall not affect the validity or enforceability of the remaining portions of this Contract unless the result would be manifestly inequitable or unconscionable.

SECTION 20 COMPLETE AGREEMENT
Section 20.1. This Contract, when executed, together with all Exhibits and Schedules attached hereto or to be attached hereto, as provided for by this Contract, shall constitute the entire agreement between the Parties and this Contract may not be amended, modified, or terminated except by a written Modification signed by the Parties hereto.

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SECTION 21 FURTHER ASSURANCES
Section 21.1. The Parties shall execute and deliver all documents and perform all further acts that may be reasonably necessary to effectuate the provisions of this Contract.

SECTION 22 APPLICABLE LAW
Section 22.1. This Contract and the construction and enforceability thereof shall be interpreted under the laws of the State of California.

SECTION 23 NOTICE
Section 23.1. Any notice required or permitted hereunder shall be deemed sufficient if given in writing and delivered personally or sent by registered or certified mail, return receipt requested, postage prepaid, or delivered to a nationally recognized express mail service, charges prepaid, receipt obtained, to the address shown below or to such other persons or addresses as are specified by similar notice.

TO WES: TO CUSTOMER:

Willdan Energy Solutions The City of Paramount
Attention: Micah Chen Attention: Adriana Figueroa
2401 East Katella Avenue, Suite 300 15300 Downey Ave
Anaheim, CA 92806 Paramount, CA 90723
SECTION 24 HEADINGS
Section 24.1. Headings and subtitles used throughout this Contract are for the purpose of convenience only, and no heading or subtitle shall modify or be used to interpret the text of any section.

SECTION 25 INSURANCE
Section 25.1. WES agrees to procure and maintain, at WES’s expense, unless otherwise stated, all insurance specified in Schedule C attached hereto and by this reference incorporated herein. WES shall require all subcontractors to carry appropriate insurance policies with limits of insurance commensurate with the portion of the Work to be performed by the applicable subcontractor.

SECTION 26 EPACT 179D
Section 26.1. To encourage the implementation of a more energy-efficient system, Section 179D of the Internal Revenue Code provides for the allocation of a tax deduction based on the efficiency of the design. Since a public entity is exempt from paying taxes, the Internal Revenue Code permits this allocation to be passed along to the designer of the system as an additional incentive to incorporate the most efficient system affordable. Accordingly, once the building/system is placed into service, it is understood and agreed that the tax deduction granted pursuant to Section 179D of the Internal Revenue Code will be allocated to WES, in consideration of which WES intends to maximize the energy efficiency of the design being contracted.

SECTION 27 CONFIDENTIAL INFORMATION; RELEASE OF INFORMATION Section 27.1. To the extent permitted by applicable law, WES will maintain the confidentiality of all non-public information, documents, programs, procedures, and all other non-public items that it receives from Customer pursuant to this Contract, unless such information is already known to WES. WES shall not release or disclose any such information to persons or entities other than Customer without prior written authorization from the City Manager or designee, except as may be required by law.

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Section 27.2. WES, its officers, employees, agents or subcontractors, shall not, without prior written authorization from the City Manager or unless requested by the City Attorney, voluntarily provide declarations, letters of support, testimony at depositions, response to interrogatories or other information concerning the Work performed under this Contract; provided that WES reserves the right to reference the Customer as a client and to use the Customer’s name and describe the Project on its website and other promotional materials for marketing purposes. Response to a subpoena or court order shall not be considered “voluntary”.

Section 27.3. WES shall promptly notify Customer should WES, its officers, employees, agents or subcontractors be served with any summons, complaint, subpoena, notice of deposition, request for documents, interrogatories, request for admissions or other discovery request, court order or subpoena from any party regarding this Contract and the Work performed thereunder. Customer retains the right, but has no obligation, to be present at any deposition, hearing or similar proceeding. WES agrees to cooperate fully with Customer and to provide Customer with the opportunity to review any response to discovery requests provided by WES. However, this right to review any such response does not imply or mean the right by Customer to control, direct, or rewrite said response.

SECTION 28 ASSIGNMENT
Section 28.1. WES may delegate its duties and performance under this Contract and has the right to enter into agreements with any subcontractors and other service or material providers as WES may select in its discretion to perform the Work. WES will not be required to enter into any subcontracts with parties whom WES has not selected or subcontractors whom WES has objection to using.

Section 28.2. WES shall, at all times, be responsible for the negligent acts, errors and/or omissions of its subcontractors and agents. Nothing in this Contract shall constitute any contractual relationship between any others and the Customer or any obligation on the part of the Customer to pay, or to be responsible for the payment of, any sums to any WES subcontractors.

SECTION 29 CITY BUSINESS LICENSE
Section 29.1. In addition to any other permits or licenses, WES shall obtain, maintain and comply with the requirements for a current city business license during the term of this Contract.

IN WITNESS WHEREOF, and intending to be legally bound, the Parties hereto subscribe their names to this Contract by their duly authorized officers as of the Effective Date.

WES CUSTOMER
Signed Signed
Name Name
Title Title
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SCHEDULE A

SCOPE OF WORK
California State Contractor’s License Number 1065713
California Public Works Contractor Registration Number [●] This scope of work (“Scope of Work”) is attached to, and forms an integral part of, the Energy and Water Performance Contract (together with its Schedules and Exhibits, the “Contract”) between Willdan Energy Solutions (“WES”) and Customer. Capitalized terms used and not defined in this Scope of Work have the meanings given them in the Contract.

The purpose of this Contract is for WES to perform an investment grade audit (an “IGA”) of the Customer’s property and buildings (the “Premises”) and Customer-owned and/or operated water distribution infrastructure (the “Infrastructure”); the IGA will form the basis for recommendations, which WES will present to Customer, for the implementation of energy- and water-savings efficiency measures, or other operating cost saving measures and equipment, as well as energy generation measures, and/or fee-producing infrastructure facilities, as described in Schedule A (Scope of Work), with respect to the Premises and the Infrastructure, as well as estimated program costs and overall potential energy and water consumption savings. The Contract will also set forth the terms and conditions under which WES will implement recommendations agreed to by Customer, and any other services agreed by WES and Customer, all of which will be designed to save energy, water, or other operating costs at the Premises and/or with respect to the Infrastructure (collectively, the “Project”).

Schedule A-1. IGA PHASE SERVICES
(a) General.

WES shall advise the Customer on all proposed Projects, selection of materials, building systems and equipment, financing options, and utility incentives. WES shall also provide the Customer with recommendations, consistent with the Customer’s stated criteria, on constructability; availability of materials and labor; time requirements for procurement, installation and construction; and factors related to construction cost including, but not limited to, costs of alternative designs or materials, preliminary budgets, life-cycle data, and possible cost reductions. (b) Engineering and Design. During the IGA Phase, WES shall perform:

Design required to develop the scope and Project solution that meets Performance Contract Program Requirements as identified in Schedule A-4.

Develop design in enough detail to procure subcontractors and materials and develop the Contract Sum included (and defined) in the Performance Contract Amendment. (A) Perform a survey of the spaces and existing systems throughout the Premises to document existing conditions.
(B) Work with the Customer to establish Project goals and criteria. (C) Prepare design documents and/or criteria for subcontractor pricing procurement to install modifications to HVAC, electrical, and plumbing systems. (c) Pre-Construction Services. During the IGA Phase:

WES shall assemble all design documents necessary for pricing procurement.

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WES shall engage subcontractors; familiarize them with the Project, site and bidding information; and procure pricing for the purposes of establishing WES’s cost proposal in the Performance Contract Amendment.

WES shall coordinate with the Customer, sub-consultants, financiers, utilities and other stakeholders throughout the IGA Phase.
(d) Energy-Related Services.

WES will walk through facility to become familiar with existing systems and the building’s operations. WES will also gather as-built plans and O&M data on existing HVAC systems from Customer.

WES will quantify energy savings for each recommend Project through a calibrated computer energy model or other industry standard energy calculation procedure.

WES will quantify and summarize Project economics throughout each phase of design, including:
(A) Project costs;
(B) Energy savings;
(C) Maintenance and other costs savings;
(D) Utility incentives; and
(E) Project financing terms and debt service payment terms. (e) Preparation of the Performance Contract Amendment.

When the Drawings and Specifications are sufficiently complete, WES will prepare a Performance Contract Amendment. The Performance Contract Amendment shall include:
(A) Contract Sum;
(B) Contract Time;
(C) Construction Schedule;
(D) Energy and other cost savings;
(E) Grants, financing, and incentive opportunities;
(F) Project Cashflow;
(G) Information upon which the Performance Contract Amendment is based, including:
(i) Scope of Work;
(ii) Drawings;
(iii) Specifications;
(iv) Supplementary and other Conditions of the Contract; and (v) Deviations from the Performance Contract Program Requirements as identified in Schedule A-4.
(H) WES’s Personnel, Contractors and Suppliers.

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Schedule A-2. CONSTRUCTION PHASE SERVICES
(a) Construction Documents. As the Drawings and Specifications may not be finished at the time the Performance Contract Amendment is prepared, the Performance Contract Amendment will provide for further development of the Drawings and Specifications for construction. Such further development does not include such things as changes in scope, systems, or kinds and quality of materials, finishes or equipment, all of which, if required, shall be incorporated by Change Order. (b) WES’s Construction Phase Responsibility.

WES shall supervise and direct the Work, using WES’s best skill and attention.

WES shall be solely responsible for, and have control over, construction means, methods, techniques, sequences and procedures, and for coordinating all portions of the Work under the Contract, unless the ESPC Documents give other specific instructions concerning these matters.

WES shall schedule Work and coordinate Subcontractors and any other persons on the site of the Project.

WES will inspect the Work of each subcontractor for defective Work, manage resolution of the defective Work, and notify applicable subcontractor(s) to correct such defective Work in a manner approved by the design team and Customer.

WES shall record the progress of the Project and provide reports to the Customer.

Such reports shall include, without limitation, information about variations between actual and budgeted or estimated costs and information on each subcontractor’s Work, as well as completion status on the entire Project, showing percentages of completion.

With the cooperation of the Subcontractors, WES will prepare and maintain the Construction Schedule.

WES shall schedule and conduct preconstruction, progress, quality control and special meetings with the Customer, designers, the subcontractors and any other parties involved in the Project to discuss such matters as procedures, progress, problems and scheduling.

WES shall receive, review for completeness and responsiveness the subcontractors’ submittals such as shop drawings, product data and samples and deliver them to the Customer for review and approval.

WES shall manage the Punch List, coordinate final inspections, and prepare the certificates of Substantial Completion and Final Completion. Upon Final completion, WES will receive, review for conformity with the requirements of the ESPC Documents, transmit to the Customer any affidavits, and turn over to the Customer any manuals and the originals of any guarantees, warranties, releases, bonds and waivers.
(c) Enhanced Commissioning. WES shall develop the commissioning plan, review construction documents, develop functional test procedures, coordinate commissioning activities, verify startup tests, perform functional performance tests, and generate final commissioning report. (d) Labor and Materials.

Unless otherwise provided in the ESPC Documents, WES shall provide and pay for labor, materials, equipment, tools, construction equipment and machinery, water, heat, utilities, transportation, and other facilities and services, necessary for proper execution and completion of the Work, whether temporary or permanent, and whether or not incorporated or to be incorporated in the Work.

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WES shall enforce strict discipline and good order among WES’s employees, Subcontractors, and other persons carrying out the Work. WES shall not permit employment of unfit persons or persons not properly skilled in tasks assigned to them.

Schedule A-3. GUARANTEE PHASE SERVICES
(a) Facility Personnel Assistance.

WES’s commissioning group will assist Customer personnel in achieving the most efficient operation of Customer’s facility. The commissioning group will remotely monitor the facility and will help identify potential problems with the HVAC as well as work with the facility staff to enhance and implement energy conservation programs.

Customer will be responsible for the maintenance of all energy systems, including lighting, mechanical, electrical, and building automation control systems per Schedule 1-A-5. (b) Savings Tracking and Reporting.

WES will be responsible for the annual tracking and monitoring of the Project and will provide ongoing assistance to Customer’s staff.

WES will provide an annual savings report. This report will detail current monthly savings, year to date savings, and guaranteed savings. This report will also show the actual savings in units of energy.
(c) Utility Rate Negotiation. If, during the term of this Contract, deregulation of the electric and gas utilities should occur, WES shall have the right to negotiate on behalf of the Customer, in total or in portion, other utility services beyond the current providers of those services. WES will represent the Customer as long as the services being negotiated are cost competitive for the Customer. WES will seek the most cost competitive providers of those services who can provide equal or better-quality service. In the event that the Customer is able to locate a more cost competitive provider, with equal quality, WES will agree to use that provider. The purpose of this paragraph is to minimize utility costs for the Customer. (d) Cancellation.

Customer may cancel the Guarantee Phase services on any anniversary of the commencement of Guarantee Services, or at the end of Customer’s fiscal year.

If Customer cancels these services, WES reserves the right to cancel the Energy Savings Guarantee as outlined in the form of Exhibit 2 [and the Assured Performance Guarantee as outlined in the form of Exhibit 3].

Schedule A-4. ENERGY AND WATER PERFORMANCE CONTRACT PROGRAM REQUIREMENTS:
(a) Financial Criteria.
(b) General Scope and Intent.

Schedule A-5. PROJECT IMPLEMENTATION SCOPE OF WORK
(a) Final, detailed scope of work will be included in the Performance Contract Amendment.

Schedule A-6. TIME.
(a) Construction and installation of energy-saving and/or energy-generating equipment (“Equipment”) by WES shall proceed throughout the Construction Period described in the detailed schedule of construction, which will be submitted to Customer following commencement of the Construction Phase.

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endeavor to minimize disruption to Customer operations while allowing for completion of Scope of Work in a timely fashion.
(b) Weather disruptions, availability of necessary equipment, remediation of hazardous materials, and other delays beyond the control of WES shall not count toward the Construction Period. The completion dates will be modified by Change Order for these events.

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SCHEDULE B

COMPENSATION TO WES
This compensation schedule (“Compensation Schedule”) is attached to, and forms an integral part of, the Energy and Water Performance Contract (together with its Schedules and Exhibits, the “Contract”) between Willdan Energy Solutions (“WES”) and Customer. Capitalized terms used and not defined in this Compensation Schedule have the meanings given them in the Contract.

The Customer shall compensate and make payments to WES for the IGA Phase services, the Construction Phase services and the Guarantee Phase services as follows:

Schedule B-1. INVESTMENT GRADE AUDIT PHASE SERVICES
The Customer shall compensate and make payments to WES for the IGA Phase services as follows:
(a) If the Performance Contract Amendment is executed within ninety (90) days of the date it is submitted to Customer, the fee for IGA services will be incorporated into the Performance Contract Amendment; otherwise,
(b) Customer shall pay WES the stipulated sum of $0.00.

Schedule B-2. CONSTRUCTION PHASE
For WES’s performance of the Construction, the Customer shall pay WES the Construction Phase Contract Sum in current funds for WES’s performance of the Contract after the execution of the Performance Contract Amendment. The Contract Sum shall be identified in the Performance Contract Amendment.

Schedule B-3. GUARANTEE PHASE
For WES’s performance of the Energy and Water Savings Guarantee [and the Assured Performance Guarantee], the Customer shall pay WES in current funds for WES’s performance of the Guarantee Phase services following Final Completion of the entire Project, and issue to WES the “Certificate of Acceptance – Project Final Completion” as defined in Schedule 1-C. The Guarantee Phase Contract Sum shall be identified in the Energy and Water Savings Guarantee [and the Assured Performance Guarantee].

Schedule B-4. PAYMENT PROCEDURES
(a) Investment Grade Audit Phase Payments. WES shall provide an Application for Payment to Customer for IGA Phase services completed in accordance with Schedule A-1 above. The Customer shall make payment in the manner and within the time provided in Section 4.3 of the Contract (b) Construction Phase Payments.
(1) Project Mobilization. The initial Application for Payment shall include all remaining pre-construction-phase services amounts as well as twenty percent (20%) of the remaining total compensation to allow for mobilization of WES and subcontractors. (2) Progress Payments. WES shall provide a monthly Application for Payment to Customer for work completed during the previous month. The Customer shall make payment in the manner and within the time provided in Section 4.3 of the Contract. Until the Project is complete, as identified as a line item in the Schedule of Values, Customer will pay one hundred percent (100%) of the amount due to WES on account of progress payments. WES shall provide a Retainage Bond that represents ten percent (10%) of the total Contract value.
(3) Schedule of Values. WES will prepare and submit a complete schedule of values along with the initial Application for Payment. Projects listed as line items in the Schedule of Values will be treated as individual Projects for the purposes of Progress Payments, Substantial Completion, Final Completion, and withholding of retention amounts.

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(4) Substantial Completion. Substantial Completion is the stage in the progress of the Project when the Project or designated portion thereof is sufficiently complete in accordance with the ESPC Documents so that the Customer can utilize the Work for its beneficial use.

When WES considers that an individual Project is substantially complete, WES shall prepare and submit to the Customer a comprehensive list of items to be completed or corrected prior to final payment (the “Punch List”). Upon receipt of WES’s Punch List, the Customer shall, within seven (7) days, inspect the Work to determine whether the Work or designated portion thereof is substantially complete. If the Customer’s inspection discloses any item, whether or not included on the Punch List, which is not sufficiently complete in accordance with the ESPC Documents so that the Customer can utilize the Project or designated portion thereof for its intended use, WES shall, before issuance of the Certificate of Acceptance – Project Final Completion, complete or correct such item upon notification by the Customer. In such case, WES shall then submit a request for another inspection by the Customer to determine Substantial Completion.

When the Work or designated portion thereof is substantially complete, WES will prepare a Certificate of Substantial Completion which shall establish the date of Substantial Completion, shall establish responsibilities of the Customer and WES for security, maintenance, heat, utilities, damage to the Project and insurance, and shall fix the time within which WES shall finish all items on the Punch List accompanying the Certificate. Warranties required by the ESPC Documents shall commence on the date of Substantial Completion of the Project or designated portion thereof unless otherwise provided in the Certificate of Substantial Completion. The Certificate of Substantial Completion shall be submitted to the Customer for their written acceptance of responsibilities assigned to them in such Certificate. (5) Substantial Completion Payment. Upon Substantial Completion acceptance, the Customer shall make payment of retainage applying to such Work or designated portion thereof within the time provided in Section 4.3 of the Contract. Such payment shall be reasonably adjusted to reflect the dollar value of Work that is incomplete or not in accordance with the requirements of the ESPC Documents.
(6) Project Final Completion and Payment. After WES’s completion of all Punch List items, Project closeout requirements, and upon receipt of written notice that the Project is ready for final inspection and acceptance and upon receipt of a Final Application for Payment, the Customer will make such inspection within seven (7) days and, when the Customer finds the Project acceptable under the ESPC Documents and the Contract fully performed, the Customer will execute and issue the Certificate of Acceptance within two (2) days from the final inspection and pay the entire balance found to be due to WES as stated in the Final Application for Payment within the time provided in Section 4.3 of the Contract. (c) Failure of Payment. If the Customer does not pay WES within five (5) days after the date established in Section 4.3 of the Contract, then WES may, upon written notice to the Customer, stop the Work until payment of the amount owing has been received. The Contract Time shall be extended appropriately, and the Contract Sum shall be increased by the amount of WES’s reasonable costs of shutdown, delay and start-up, plus interest.

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SCHEDULE C

INSURANCE REQUIREMENTS

INSURANCE

1. Time for Compliance. WES shall not commence Work under this Contract until it has provided evidence satisfactory to the Customer that it has secured all insurance required under this section. In addition, WES shall not allow any subcontractor to commence work on any subcontract until it has provided evidence satisfactory to the Customer that the subcontractor has secured appropriate insurance.

2. Types of Insurance Required. As a condition precedent to the effectiveness of this Contract for Work to be performed hereunder, and without limiting the indemnity provisions of the Contract, WES, in partial performance of its obligations under such Contract, shall procure and maintain in full force and effect during the term of the Contract the following policies of insurance. If the existing policies do not meet the insurance requirements set forth herein, WES agrees to amend, supplement or endorse the policies to do so.
(A) Commercial General Liability: Commercial General Liability Insurance which affords coverage at least as broad as Insurance Services Office “occurrence” form CG 0001, or the exact equivalent, with limits of not less than $1,000,000 per occurrence and no less than $2,000,000 in the general aggregate.

Defense costs shall be paid in addition to the limits. The policy shall contain no endorsements or provisions (1) limiting coverage for contractual liability; (2) excluding coverage for claims or suits by one insured against another (cross-liability); or (3) containing any other exclusion(s) contrary to the terms or purposes of this Contract.
(B) Automobile Liability Insurance: Automobile Liability Insurance with coverage at least as broad as Insurance Services Office Form CA 0001 covering “Any Auto” (Symbol 1), or the exact equivalent, covering bodily injury and property damage for all activities with limits of not less than $1,000,000 combined limit for each occurrence.

If WES does not own any company vehicles or may not be able to purchase a Business Automobile Insurance Policy, the requirement may be satisfied by providing either of the following: (1) a Personal Automobile Liability policy for WES’s own vehicle stipulating “Automobile Liability Insurance with a limit of not less than $1,000,000 each accident”; and (2) a non-owned auto endorsement to the Commercial General Liability policy if WES uses vehicles of others (e.g., vehicles of employees). (C) Workers’ Compensation: Workers’ Compensation Insurance, as required by the State of California and Employer’s Liability Insurance with a limit of not less than $1,000,000 per accident for bodily injury and disease.
(D) Professional Liability (Errors & Omissions): Professional Liability insurance or Errors & Omissions insurance appropriate to WES’s profession with limits of not less than $1,000,000 per claim. and $2,000,000 annual aggregate. Covered professional services shall specifically include all Work to be performed under the Contract and delete any exclusions that may potentially affect the Work to be performed (for example, any exclusions relating to lead, asbestos, pollution, testing, underground storage tanks, laboratory analysis, soil work, etc.). If coverage is written on a claims-made basis, the retroactive date shall precede the effective date of the initial Contract and continuous coverage will be maintained or Two-Phase Energy [and Water] Performance Contract | Page 19 3767-1001 / 2392697.4
an extended reporting period will be exercised for a period of at least three (3) years from termination or expiration of this Contract.
(E) Builders All-Risk Insurance: WES, at Customer’s expense, shall maintain “All Risk Insurance” for all Equipment, and property obtained by or for WES which is to become a part of the Work while such Equipment and property is stored at the job site, at temporary locations, or while in transit to the Project from such temporary locations. WES shall also be responsible for insuring subcontractors’ owned, rented, or borrowed equipment.
(F) Additional Insured: Customer be named as an additional insured for all liability arising out of the operations by or on behalf of the named insured, and this policy protects the additional insured, its officers, agents and employees against liability for personal and bodily injuries, deaths or property damage or destruction arising in any respect, directly or indirectly, in the performance of the Contract. (i) Each such policy shall be endorsed with the following language:

The City of Paramount, its elected or appointed officers, officials, employees and volunteers are included as insureds with regard to damages and defense of claims arising from: (a) activities performed by or on behalf of the Named Insured, including the insured’s general supervision of the Named Insured, (b) products and completed operations of the Named Insured, or (c) premises owned, leased or used by the Named Insured.
(ii) This policy shall be considered primary insurance as respects the Customer, its elected or appointed officers, officials, employees, agents, and volunteers. Any insurance maintained by Customer, including any self-insured retention Customer may have, shall be considered excess insurance only and shall not contribute with it.
(iii) The inclusion of more than one insured shall not operate to impair the rights of one insured against another insured, and the coverages afforded shall apply as though separate policies had been issued to each insured.
(iv) The Additional Insured coverage under WES’s policy shall be primary and noncontributory and will not seek contribution from Customer’s insurance or self-insurance and shall be at least as broad as CG 20 01 04 13.
(G) Deductibles and Self Insured Retentions: All self-insured retentions (SIR) must be disclosed to Customer’s Risk Management for approval and shall not reduce the limits of liability. At the option of Customer, either: the insurer shall reduce or eliminate such deductibles or self-insurance retention as respects Customer, its officers, officials, agents, employees and volunteers; or WES shall procure a bond guaranteeing payment of losses and related investigations, claim administration and defense expenses.

Policies containing any self-insured (SIR) provision shall provide or be endorsed to provide that the SIR may be satisfied by either the named insured or the Customer. Customer reserves the right to obtain a full certified copy of any insurance policy and endorsements. Failure to exercise this right shall not constitute a waiver of the right to exercise later.

3. Waiver of Subrogation. All policies of Commercial General Liability and Automobile Liability insurance shall specifically allow WES or others providing insurance evidence in compliance with these specifications to waive their right of recovery prior to a loss. WES hereby waives its own right of recovery against Customer, its officials, officers, employees, agents, and volunteers, and shall require similar written express waivers and insurance clauses from each of its subconsultants.

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4. Evidence of Insurance. WES, concurrently with the execution of the Contract, and as a condition precedent to the effectiveness thereof, shall deliver either certified copies of the required policies, or original certificates on forms approved by Customer, together with all endorsements affecting each policy.

Required insurance policies shall not be in compliance if they include any limiting provision or endorsement that has not been submitted to Customer for approval. The certificates and endorsements for each insurance policy shall be signed by a person authorized by that insurer to bind coverage on its behalf.

At least fifteen (15) days prior to the expiration of any such policy, evidence of insurance showing that such insurance coverage has been renewed or extended shall be filed with Customer. If such coverage is cancelled or reduced and not replaced immediately so as to avoid a lapse in the required coverage, WES shall, within ten (10) days after receipt of written notice of such cancellation or reduction of coverage, file with Customer evidence of insurance showing that the required insurance has been reinstated or has been provided through another insurance company or companies.

5. Failure to Maintain Coverage. In the event any policy of insurance required under this Contract does not comply with these specifications or is canceled and not replaced immediately so as to avoid a lapse in the required coverage, Customer has the right but not the duty to obtain the insurance it deems necessary and any premium paid by Customer will be promptly reimbursed by WES or Customer will withhold amounts sufficient to pay premium from WES payments. In the alternative, Customer may cancel this Contract effective upon notice.

6. Acceptability of Insurers. Each such policy shall be from a company or companies with a current A.M. Best’s rating of no less than A- VII and authorized to transact business of insurance in the State of California, or otherwise allowed to place insurance through surplus line brokers under applicable provisions of the California Insurance Code or any federal law.

7. Enforcement of Contract Provisions (non-estoppel). WES acknowledges and agrees that actual or alleged failure on the part of Customer to inform WES of non-compliance with any requirement imposes no additional obligation on Customer nor does it waive any rights hereunder.

8. Requirements Not Limiting. Requirement of specific coverage or minimum limits contained in this Contract are not intended as a limitation on coverage, limits, or other requirement, or a waiver of any coverage normally provided by any insurance.

9. Insurance for subcontractors. WES shall include all subcontractors engaged in any Work for WES relating to this Contract as additional insureds under WES’s policies, or WES shall be responsible for causing subconsultants to purchase the appropriate insurance in compliance with the terms of these Insurance Requirements, including adding Customer, its officials, officers, employees, agents, and volunteers as additional insureds to the subcontractor’s policies. All policies of Commercial General Liability insurance provided by WES’s subcontractors performing Work relating to this Contract shall be endorsed to name Customer, its officials, officers, employees, agents and volunteers as additional insureds using endorsement form ISO CG 20 38 04 13 or an endorsement providing equivalent coverage. WES shall not allow any subcontractor to commence Work on any subcontract relating to this Contract until it has received satisfactory evidence of subcontractor’s compliance with all insurance requirements under this Contract, to the extent applicable. WES shall provide satisfactory evidence of compliance with this section upon request of Customer.

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WORKER’S COMPENSATION INSURANCE CERTIFICATION
WORKERS’ COMPENSATION DECLARATION
I hereby affirm under penalty of perjury one of the following declarations:
(ONE OF THE PARAGRAPHS BELOW MUST BE CHECKED)
___I have and will maintain a certificate of consent from the California Labor Commission to selfinsure for workers’ compensation, as provided for by Section 3700 of the Labor Code, for the performance of the Work to be performed under this Contract.
___I have and will maintain workers’ compensation insurance, as required by Section 3700 of the Labor Code, for the performance of the Work to be performed under this Contract. My workers’ compensation insurance carrier and policy number are:

Carrier____________________________________________________ Policy Number______________________________________________ I certify that, in the performance of the Work under this Contract, I shall not employ any person in any manner so as to become subject to the workers’ compensation laws of California, and I hereby agree to indemnify, defend, and hold harmless the City of Paramount and all of its officials, employees, and agents from and against any and all claims, liabilities, and losses relating to personal injury or death, economic losses, and property damage arising out of my failure to provide such worker’s compensation insurance. I further agree that, if I should become subject to the workers’ compensation provisions of Section 3700 of the Labor Code, I shall forthwith comply with those provisions.

WARNING: FAILURE TO SECURE WORKERS’ COMPENSATION COVERAGE IS UNLAWFUL,

AND SHALL SUBJECT AN EMPLOYER TO CRIMINAL PENALTIES AND CIVIL FINES UP TO ONE HUNDRED THOUSAND DOLLARS ($100,000), IN ADDITION TO THE COST OF COMPENSATION, DAMAGES AS PROVIDED FOR IN SECTION 3706 OF THE LABOR CODE, INTEREST, AND ATTORNEY’S FEES.

Dated: ________________________, 2023____
________________________________ WES
By: ________________________________
________________________________
Title
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EXHIBIT 1

FORM OF PERFORMANCE CONTRACT AMENDMENT
This Performance Contract Amendment (“Amendment”), dated as of the [XX] day of [XX] in the year [202X] (the “Amendment Date”) is incorporated into the accompanying Energy Savings Performance Contract dated the [XX] day of [XX] in the year [202X] (together with its Exhibits and Schedules, the “Contract”) for the following:

PROJECT: City of Paramount Water Meter Project, Carport Solar PV and EV at Public Works building located at 15300 Downey Ave and Rooftop Solar PV at Gym building located at 14400 Paramount Blvd.

THE CUSTOMER: The City of Paramount, 15300 Downey Ave, Paramount, CA 90723 THE CONTRACTOR: Willdan Energy Solutions, Inc. (“WES”)
WHEREAS, Customer and WES previously executed the Contract, pursuant to which WES performed an investment grade audit (“IGA”) of the Customer’s Premises and Infrastructure and presented Customer with recommendations (the “Recommendations”) for the implementation of certain energy, water or other operating cost saving measures and equipment and/or fee-producing infrastructure facilities, including estimated program costs and overall potential energy consumption savings; and WHEREAS, WES delivered the Recommendations, on an arms’ length basis, to personnel of Customer with requisite technical training and experience, for those personnel to make judgments and determinations as to the desired scope of work; and
[For GC 4217.10 Energy Savings Projects: WHEREAS, in the Recommendations, WES identified potential energy and operational savings opportunities at Customer’s Facilities and estimated program costs to implement energy-efficiency- and energy-generation-measures and presented an overall potential energy cost and consumption savings for implementing those recommendations; [WHEREAS, Customer has accepted the Recommendations and has determined that the anticipated cost to Customer to implement the energy-savings Project will be less than the anticipated cost to Customer for thermal, electrical, and other energy, together with anticipated operational, maintenance and other costs, that would have been consumed by Customer in the absence of the energy-savings Project, in compliance with California Government Code §§4217.10 through 4217.18; and [WHEREAS, pursuant to California Government Code §4217.12, Customer held a regularly scheduled public hearing on [●], of which two weeks advance public notice was given regarding this Amendment and its subject matter; and
[WHEREAS, Customer has determined that entering into this Amendment to implement the Project is in the best interests of Customer and that California Government Code §4217.10 et seq. allows Customer to enter into this Amendment; and
WHEREAS, Customer has selected WES pursuant to a competitive negotiation process in which WES demonstrated its competence and qualifications for the studying, planning, design, developing, financing, construction, maintenance, rebuilding, improvement, repair, and operation of the Project; WHEREAS, Customer’s process also specifically prohibited practices that could result in unlawful activity including, but not limited to, rebates, kickbacks, or other unlawful consideration, and specifically prohibited its employees from participating in the selection process when those employees have a relationship with WES that would subject those employees to the prohibition of California Government Code §87100;
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WHEREAS, WES is duly licensed by the State of California to provide or enter into this Amendment to provide such services, and is willing and financially able to perform such services for Customer, all as more fully set forth herein;
WHEREAS, by adoption of Resolution No. [●] at the above-referenced meeting, Customer approved this Amendment and authorized its execution.

NOW THEREFORE, the Customer and WES hereby amend the Contract as follows.

TABLE OF SCHEDULES (the following Schedules are added by this Performance Contract Amendment):

Schedule 1-A Additional Responsibilities
Schedule 1-B Certificate of Substantial Completion
Schedule 1-C Certificate of Acceptance – Project Final Completion Exhibit 1-1. CONSTRUCTION PHASE CONTRACT SUM
Stipulated Sum.
(1) The Stipulated Sum shall be ($12,658,773), subject to authorized adjustments as provided in the ESPC Documents. A detailed description of the components of this compensation is provided below.
(2) The Stipulated Sum is based upon the following alternates, if any, which are described in the ESPC Documents and are hereby accepted by the Customer:
(3) Unit prices, if any:

Exhibit 1-2. {CHANGES IN THE CONSTRUCTION PHASE CONTRACT SUM:

Changes to the Contract Sum are warranted for, but are not limited to: Hazardous Substances, additions or modifications to the Scope of Work, and Differing Site Conditions, each as defined in this Performance Contract Amendment. All additional costs associated with these items shall be the responsibility of Customer.

Exhibit 1-3. CONTRACT TIME
Date of commencement of construction will be based on the date of execution of this contract.

The estimated contract duration is 352 calendar days from the date of commencement of construction.

The anticipated Energy Savings Guarantee Commencement Date is the date of final completion.

Weather disruptions, availability of necessary equipment, remediation of hazardous materials, and other delays beyond the control of WES shall not count toward the construction timeframe in this Exhibit 1-3.

Exhibit 1-4. SCHEDULE OF VALUES
WES will prepare and submit a complete schedule of values along with initial Application for Payment. Projects listed as line items in the Schedule of Values will be treated as individual Projects for the purposes of Progress Payments, Substantial Completion, Project Final Completion, and withholding of retention amounts.

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Exhibit 1-5. CONSTRUCTION SCHEDULE
To be determined.

Exhibit 1-6. INFORMATION UPON WHICH AMENDMENT IS BASED
The Contract Sum and Contract Time set forth in the Performance Contract Amendment are based on the following:

Scope of Work. The finalized scope of work to be performed under the original Contract is revised and clarified as set forth in this Performance Contract Amendment as follows:
(1) ECM #1: Advanced Metering Infrastructure (AMI) System Upgrade (A) WES will install new water meters, dispose of existing meters, install a cellular base Advanced Metering Infrastructure (“AMI”) system, perform commissioning and integration of the network, software, and billing system, and provide training to Customer staff.

Meter Replacements & Cellular Hardware
The quantities and sizes of meters to be replaced are as follows:

METER SIZE QTY METER REPLACEMENT TYPE
5/8” 5,805 Zenner Ultrasonic
3/4” 75 Zenner Ultrasonic
1” 736 Zenner Ultrasonic
1 1/2” 243 Zenner Ultrasonic
2” 593 Zenner Ultrasonic
3” 21 Honeywell Elster Q4 Electromagnetic
4” 37 Honeywell Elster Q4 Electromagnetic
6” 6 Honeywell Elster Q4 Electromagnetic
8” 5 Honeywell Elster Q4 Electromagnetic
10” 2 Honeywell Elster Q4 Electromagnetic
Total 7,516
Quantities are based on the count of active accounts, by meter size, in Customer’s latest utility rate study.

Based on information from Customer, differences in quantities or size will be addressed through use of contingency or change order.

Project Planning and Support
• Project will be completed in a single mobilization, pending availability of all materials. • WES and Customer will jointly develop a schedule for executing the Project. • Call center support, dispatch, and appointment setting, where applicable, with online appointment support.

QTY CELLULAR HARDWARE
7,516 AquaCell Cellular Endpoint with Nicor Connector
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• 24-hour answering service with emergency after-hours dispatch during construction. • On-site project management, including weekly reporting on data collected from the Work Order Management System (WOMS), provided to Customer by WES personnel. • WES & Customer will agree on a protocol to determine whether an RF-friendly lid will be installed, the lid will be drilled, or the lid will be left as-is. • Prevailing wage payroll oversight.
• Programing of all meters to proper truncation.
• Provision of secure material storage containers, to be located on Customer provided property.

Installation of New Meters and Cellular Hardware
• Removal of existing meter and installation of like-for-like meter size. • Installation of new rubber meter gaskets, nuts and bolts, if necessary. • Installation of meters 3” or larger includes right-sizing between the existing flanges for that meter and size.
• Installation of up to 2,352 new RF-friendly lids at 3/4” or 5/8” meter locations, 74 at 1” meter locations, 24 at 1 ½” meter locations, and 59 at 2” meter locations. • Removal of all job-related debris.
• Collection, tagging, and temporary storage of replaced meter in a way that provides Customer opportunity to retrieve a given meter. Upon Customer authorization, but no later than Final Completion of the Project, WES will recycle replaced meters. The value of the recycled material will be determined by WES and returned to Customer, after subtracting any costs incurred for incremental meter testing as required by the Performance Guarantee. • Drilling of up to 376 cast iron lids and 376 plastic lids. WES and Customer will jointly define which lids will be selected for drilling based on cellular reception and inability to replace with an RF-friendly lid due to environmental circumstances.
• Restoration of site to preexisting conditions, if necessary. • QA will be performed on meter functionality, cellular reception, and other performance factors within 48 to 72 hours of installation.
• Adherence to EPA guidelines regarding services with lead pipe material and parts.

Work Order Management System (WOMS)
The following will be recorded in the WOMS during installation activities, and provided to Customer either directly by WES personnel and/or through Customer’s direct access to WOMS portal:
• During installation, WES personnel will collect, the following at a minimum, at each location, and record it in the WOMS:
o Before and after pictures.
o Existing meter numbers – the physical number printed on the meter, if visible, and the associated meter number from the billing system as provided by Customer. o Final read – the numerical reading displayed on the meters register, which will also be photographed. As noted in Customer Requirements, this read may vary from the final read shown in Customer’s billing system. Within the weekly WOMS report to Customer, variances in the final read recorded and the cumulative final read shown in Customer billing system will be identified.
o New meter number – the manufacturer serial number printed on the meter. o New meter size.
o IMEI number – also known as the radio serial number, this is the serial number of the cellular unit attached to the meter.

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o New meter read – the initial reading of a new meter may be greater than zero due to manufacturer testing protocols.
o GPS coordinates.
o Digital photographs of exceptions identified in the field.

Software, Reading, Billing Integration, and Training
• After a meter and cellular device has been installed, WES shall ensure that a reading is provided to Customer in time for those specific meters reading and/or billing cycle. • WES oversee all data integration between the meter, cellular system, and Customer billing system. • Data formatting to allow for automatic uploading in utility billing system. • Training shall be provided to the Customer’s operations, billing, and finance functions to ensure understanding of the systems capabilities, troubleshooting, and for efficient operation.

Customer Requirements
• WES assumes that the Customer will allow installation of all water meters. • Providing WES, its subcontractors, and its agents reasonable and safe access to all facilities and properties that are subject to the Work and/or M&V Services. • Provide WES with access to any service line mapping that Customer may have available. • Coordinate with WES on appropriate customer notifications. • Review with WES any troubled accounts that may require public safety officials’ involvement in scheduling and/or performance of Work.
• During pre-product delivery – the period between Notice-to-Proceed and installation activities – Customer will provide WES a CSV or excel document with account data exactly as shown in the billing system, including but not limited to street addresses, location/premise ID’s, account numbers, assigned meter numbers in the billing system, and, if available, meter manufacturer serial numbers, of meters to be replaced in the quantities as shown in the table above. This data is required to be incorporated into the WOMS, to both plan and direct installation activities as well as ensuring the WOMS can provide required installation data back to the Customer. • Provision of sufficient space on a centrally located property for storage of materials and equipment, including but not limited to secure material storage containers. • Provision of vehicle parking and staging area.
• Make an emergency, and regular operations, protocol available to WES, in the event of need for isolation of utility system.
• Scheduling shutdowns, downtimes, and relocation of any installation. • Provision of traffic safety during installation as applicable to California safety standards. • In the first ninety (90) days of installation, Customer agrees to allow WES to review all billing data from the cellular system prior to upload into the billing system and issuing of bills to endusers, assuming that such review is not unreasonably withheld. • Customer is responsible for retiring existing meters from Customer billing system, and the data to support this will be provided by WES in batch files, specifically including the account identifiers, exchanged meter number and final read.
• Customer recognizes that the final read shown on a replaced meter may vary from the cumulative final read in Customer’s billing system. Using the WOMS report and recorded variances, WES will provide Customer with a final read reconciliation. Customer is responsible to incorporate this final read reconciliation into the retirement of the existing meter. • Properly maintain cellular web portal and data affecting the Performance Guarantee.

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• Providing the utility bills, reports, and similar information reasonably necessary for administering WES’s obligations under the Performance Guarantee within five (5) days of Customer receipt and/or generation or WES’s request.
• Providing and maintaining access to all data within the Customer’s cellular web portal during the term of the Performance Guarantee.
• Promptly notifying WES of any change in use or condition or any other matter that may impact the Performance Guarantee.
• Ongoing care and maintenance of the utility system, including all meters, AMI equipment and systems, meter boxes, and meter vaults at or above manufacturers’ specifications and recommendations
(2) ECM #2: Solar PV
(A) This Work is to be performed at the following buildings:
(i) City of Paramount Public Works
(A) 148 kWdc Fixed-tilt carport canopy structure
(ii) City of Paramount Park/Gym Building
(A) 91 kWdc Fixed-tilt roof mount solar.
(B) Solar Photovoltaic (PV) System
(i) All necessary equipment, and temporary protection to meet project schedule.
(ii) Trenching or boring as required for electrical and communication wire in conduit, including patching, backfill and repair. (iii) Furnish and install a solar photovoltaic system that satisfies the project requirements.
(iv) Obtain necessary design approvals and permits required for the Customer & the AHJ.
(v) Furnish and install all mechanical mounting equipment necessary for a complete system installation.
(vi) Furnish and install all control system wiring and all electrical distribution wiring.
(vii) Furnish and install equipment required for proper grounding.
(viii) Furnish and install all solar panels and inverters required for system design.
(ix) Furnish and install all DC and AC wiring, conduit and equipment.
(x) Assumed load side bus tap with no electrical infrastructure upgrades.
(xi) Furnish and install balance of system equipment required for system design.

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(xii) Design, furnish and install array lighting for canopy systems and integrate into existing lighting controls to be compliant with CA Title 24
(xiii) Test and commission all installed solar PV systems. (xiv) Provide demonstration of system operation to owner. (xv) Provide system operating and maintenance training to owner.
(xvi) Install Data Acquisition System (DAS) that monitors all solar PV performance and provide remote access to Owner (xvii) Cleanup and removal of debris.
(xviii) Inclusion of 1-year workmanship warranty.
(xix) Inclusion of a 3-year O&M and yearly cleaning contract. (C) Solar Photovoltaic (PV) Structures
(i) Height at low side of canopies will be 13’6”.
(ii) All necessary equipment, and temporary protection to meet project schedule.
(iii) Furnish all labor, material, excavation, reinforcement and conveyance to set acceptable concrete foundations/footings for the solar canopies and ground-mount arrays. Foundation depths are covered in this pricing to an assumed 10-12 feet. Depth of foundations will be finalized upon completion of geotechnical survey and structural design. (iv) Furnish and install all required racking hardware with associated positive attachments required per regional seismic code. (v) Furnish and install all hardware for mounting equipment necessary for a complete system installation.
(vi) Cleanup and removal of debris.
(3) ECM #3: Electric Vehicle Chargers
(A) This Work is to be performed at the following buildings:
(i) Public Works Building
A. EVCS size: One Terra 180 kW DCFC with two charging ports and will be adjacent to the existing chargers
(B) EV Charger Installation
(i) All necessary equipment, and temporary protection to meet project schedule.
(ii) Fully design and specify EV charging stations (EVCS) that satisfies the project requirements.
(iii) Obtain necessary design approvals and permits required for the Customer and the AHJ.
(iv) Furnish and install all mechanical mounting equipment necessary for a complete system installation.

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(v) Furnish and install all control system wiring and all electrical distribution wiring.
(vi) Assumed load side bus tap with no electrical infrastructure upgrades.
(vii) Furnish and install equipment required for proper grounding.
(viii) Furnish and install all EVCS required for system design. (ix) Test and commission all installed EVCS.
(x) Provide demonstration of system operation to owner. (xi) Provide system operating and maintenance training to owner.
(xii) Cost includes 1 year of networking
(xiii) Cleanup and removal of debris.
(4) Work Excluded.
(A) General.
(i) Sales taxes are excluded from the Project. Customer will assist WES in securing Project exemption certificate.
(ii) Specific areas of the building not included in Project scope. (iii) ADA related scope
(iv) Landscaping beyond reseeding of damaged or disturbed earth.
(v) Integration or modification of security access controls and surveillance system. (Especially relevant when modifying entrances) (vi) Electrical infrastructure upgrades
(vii) Transformer upgrades
(viii) Electrical panel, switchboard, and service upgrades (ix) Cutting, trenching, and patching concrete over 6” thick (x) Temporary power
(B) Advanced Metering Infrastructure
(i) Additional installation beyond the above quoted quantities and sizes.
(ii) Re-plumbing of meter connections. Installations assume like-for-like meter exchanges.
(iii) Any plumbing of meter sets not identified on Scope of Work will be an additional charge on time and material basis.

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(iv) Replacement of angle stops for valves being retrofitted, repair or replacement of inoperable check valves, except in cases in which Customer elects to utilize Plumbing Allowance.
(v) Repair or replacement of any Work or material damaged due to vandalism.
(vi) Any existing water line damage before the meter valve will be the responsibility of the Customer.
(vii) Any parts and labor required to repair damaged upstream line will be the responsibility of the Customer.
(viii) Any parts required to repair existing damaged line will be the responsibility of the Customer. If damage is fault of WES, this repair will be made at WES cost.
(ix) Any water line damage before the meter valve will be the responsibility of the Customer.
(x) Repair or correction of any pre-existing code violations. (xi) Repair of any plumbing breaks due to corrosion or poor maintenance will be additional charge.
(xii) Replacement of any vaults or lids beyond the quantities indicated as included in the Scope of Work will be an additional cost to Customer.
(xiii) Installation of check valves or other back flow valves. (xiv) Any concrete or sidewalk repairs.
(C) ECM #2: Solar PV
(i) Utility-required infrastructure upgrades resulting from interconnection study.
(ii) Fees for Data Acquisition System after year 3 are excluded (iii) Grading, curb and gutter work beyond the canopy
(iv) Tree removal
(v) Rock excavation, dewatering or unforeseen concealed subterranean conditions when placing foundations or boring/trenching (vi) Concealed earth problems: soil contamination, soft soil, shallow hard rocks or presence of boulder.
(vii) Modifications to existing conditions not directly included in this scope of work
(viii) Structural upgrades to the gym roof
Drawings.
(1) The Scope of Work defined in Exhibit 1-6(a) supersedes any scope defined in the Drawings and Specifications. The Drawings and Specifications are provided to provide layout, quantities and general quality of equipment and materials to be incorporated in the Project.

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Number Title Date
Specifications.
(1) The Scope of Work defined in Exhibit 1-6(a) supersedes any scope defined in the Drawings and Specifications. The Drawings and Specifications are provided to provide layout, quantities and general quality of equipment and materials to be incorporated in the Project.

Number Title Date
Allowances and Contingencies.
(1) Allowances.
(A) Customer’s Allowance: $40,000.00
The plumbing allowance for this project is to be reserved for typical small repairs, as needed during the installation time, that are not the fault of WES.

The allowance will be tracked separately and any excess funds after the conclusion of the project will be returned to Customer. Customer will be responsible for repairs that exceed the allowance.

During production plumbing work, breaks and other issues will occur. To diminish the time that any end-user would be without water due to shut-off, and to maintain the installation schedule, WES will be prepared to make certain repairs at the installation site. WES will maintain a log of all such “ad-hoc” site-installation repairs, which will be reviewed weekly with Customer, at which point a determination will be made on whether the cost will be applied to the plumbing allowance or as a separate time and material change order.

The following scopes of work can optionally be funded out of the Plumbing Allowance, and will be jointly agreed to by WES and Customer, including how it will be allocated:
• Over the duration of the project, some service locations may be turned back to the Customer for repair if the meter service is deemed “inaccessible.” Once the repair is made by the Customer, WES will return and install the new meter and AMI transmitter using normal installation techniques. “Inaccessible” is:
o
o Location where a faulty valve prevents WES from shutting off the water to the facility.

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o Location where the meter flange or coupling is located outside of the meter pit.
o Locations that cannot be reached, requiring the lid ring and/or meter pit to be removed.
o Meters where the Customer’s end-user prevents WES from accessing the meter.
• Services turned back to the Customer for repairs/remedy are assumed to be corrected in a timely fashion. If corrections are not made, it is assumed the required metering products (meter, register, and transmitter) will be turned over to a representative of the Customer for installation at their convenience.
• Repair of any customer service lines within 16” of meter pit at WES expense, if damage was caused by WES personnel.
• Any preexisting condition that prevents WES personnel from replacing the meter will be documented and returned to the city for repair or repaired by WES, as an additional charge on a time and material basis.

This includes, but is not limited to, corroded lines beyond serviceability. • Pipe stands, straights, or other ancillary items not associated with right sizing between flanges for meters sized 3” or larger will be invoiced separately on a time and material basis.
• Any re-plumbing of meter sets will be an additional charge on time and material basis.
(2) Contingencies.
(A) Customer’s Contingency: Not Applicable
Deviations from the Performance Contract Program Requirements as identified in Schedule A-4:

NA
Exhibit 1-7. WES’S PERSONNEL, CONTRACTORS AND SUPPLIERS WES’s key personnel are identified below:
(1) Superintendent.

To be determined.
(2) Project Manager(s).

To be determined.
(3) Others.

Exhibit 1-8. CONSTRUCTION SCHEDULE AND EQUIPMENT INSTALLATION; APPROVAL Construction Schedule. Construction and installation of Equipment by WES shall proceed throughout the Construction Period described in the detailed schedule of construction, which will be submitted to Customer following commencement of the Performance Contract Amendment. This schedule, set forth in Exhibit 1-5, will be updated throughout construction to reflect ongoing progress on the Project.

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Systems Startup and Equipment Commissioning. WES shall conduct a thorough and systematic performance test of each element and total system of the installed Equipment in accordance with the procedures specified in Schedule 1-A-1, and prior to acceptance of the Project by Customer. WES shall provide notice to the Customer of the scheduled test(s) and the Customer and/or its designees shall have the right to be present at any or all such tests conducted by WES and/or manufacturers of the Equipment. WES shall be responsible for correcting and/or adjusting all deficiencies in systems and Equipment operations that may be observed during system commissioning procedures.

Exhibit 1-9. EQUIPMENT WARRANTIES
EXCEPT FOR THE WARRANTIES PROVIDED IN THIS Exhibit 1-9, WES MAKES NO WARRANTIES

IN CONNECTION WITH THE WORK PROVIDED UNDER THIS CONTRACT, WHETHER EXPRESS

OR IMPLIED IN LAW, INCLUDING ANY IMPLIED WARRANTIES OF MERCHANTABILITY OR

FITNESS FOR A PARTICULAR PURPOSE AND ANY IMPLIED WARRANTIES AGAINST INTELLECTUAL PROPERTY INFRINGEMENT. CUSTOMER WILL HAVE NO REMEDIES

AGAINST EITHER WES OR ANY WES SUBCONTRACTOR OR VENDOR FOR ANY DEFECTIVE

MATERIALS OR EQUIPMENT INSTALLED, EXCEPT FOR THE REPAIR OR REPLACEMENT OF

SUCH MATERIALS OR EQUIPMENT IN ACCORDANCE WITH THE WARRANTIES INDICATED BELOW.

WES covenants and agrees that all material and Equipment installed as part of this Contract will be new, in good and proper working condition and protected by appropriate written warranties covering the performance of parts and Equipment, which will be transferred to Customer upon substantial completion.

WES further warrants that its workmanship provided hereunder, including its subcontractors’ workmanship, will be free of material defects for a period of one (1) year from the date of Substantial Completion as indicated on the executed Certificate of Substantial Completion (“WES Warranty”). Notwithstanding the preceding sentence, the date the WES Warranty commences with respect to a specific piece or pieces of Equipment may be further defined in Schedule 1-B.

Equipment and material warranties that exceed the WES Warranty period will be provided directly by the equipment and/or material manufacturers and such warranties will be assigned directly to Customer, after the one (1) year period. During the WES Warranty period, WES will be Customer’s agent in working with the equipment and material manufacturers in resolving any equipment or material warranty issues. If any material defects are discovered within the WES Warranty period, WES, or WES’s subcontractors, will correct its defects, and/or WES will work with the equipment or material manufacturer as Customer’s agent to facilitate the manufacturer’s correction of the equipment or material defect. Such warranty services will be performed in a timely manner and at the reasonable convenience of Customer. If a warranty issue arises on any equipment or material installed after the WES Warranty period, and the equipment or material has a warranty period that exceeds one (1) year, Customer will contact the manufacturer directly to resolve such warranty issues and Customer acknowledges that the manufacturer will have sole responsibility for such issues.

The warranties in this Exhibit 1-9 expressly exclude any remedy for damage or defect caused by improper or inadequate maintenance of the installed equipment by service providers other than WES or its subcontractors, corrosion, erosion, deterioration, abuse, modifications or repairs not performed by an authorized WES subcontractor, improper use or operation, or normal wear and tear under normal usage. WES shall not be responsible for the cost of correcting a breach of warranty or defect to the extent that the manufacturer of the equipment that is the subject of a warranty hereunder does not honor its equipment warranty as a result of its termination of operations, insolvency, liquidation, bankruptcy or similar occurrence. Unless otherwise specified, all warranties hereunder, including without limitation those for defects, whether latent or patent, in design, engineering, or construction, will terminate one (1) year from the date of Substantial Completion; and thereafter, WES will have no liability for breach of any warranty or for any latent or patent defect of any kind pursuant to California Code of Civil Procedure §§337.1 and 337.15.

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Customer and WES have discussed the risks and rewards associated with this Project, as well as the Contract Sum to be paid to WES for performance of the Work. Customer and WES agree to allocate certain of the risks so that, to the fullest extent permitted by applicable law, WES’s total aggregate liability to Customer and all third parties is limited to the Contract Sum for any and all injuries, damages, claims, losses, expenses, or claim expenses (including attorney’s fees) arising out of this Contract from any cause or causes. Such causes include, but are not limited to, negligence, errors, omissions, strict liability, breach of contract, or breach of warranty.

Exhibit 1-10. TRAINING BY WES
WES shall conduct the training program described in Schedule 1-A-10 hereto. Such training must be completed prior to acceptance of the Equipment installation. WES shall provide ongoing training whenever requested by Customer with respect to updated or altered Equipment, including upgraded software. Such training shall be provided at no charge to the Customer.

Exhibit 1-11. PERMITS AND APPROVALS; COORDINATION
Permits and Approvals. The Equipment and the operation of the Equipment by WES shall at all times conform to all applicable federal, state and local code requirements. Customer shall cooperate fully with WES in obtaining all necessary permits and approvals for installation of the Equipment. WES is responsible for obtaining and paying for all permits, except those permits to be issued by Customer itself.

Customer will be responsible for obtaining and paying for annual operating permits and any approvals or exemptions required by CEQA. WES shall furnish copies of each permit or license which is required to perform the Work to the Customer before WES commences the portion of the Work requiring such permit or license. Customer is responsible for hiring and paying inspectors, and for fees associated with plan checks (including expedited plan checks), inspections, certifications, and utility interconnection(s), including any additional Work that may be required by the electric utilities as part of interconnection.

Coordination During Installation. The Customer and WES shall coordinate the activities of WES’s Equipment installers with those of the Customer, its employees, and agents. WES shall not commit or permit any act which will unreasonably interfere with the performance of business activities conducted by the Customer or its employees without prior written approval of the Customer.

Exhibit 1-12. LOCATION AND ACCESS
Customer shall provide sufficient space on the Premises for the installation and operation of the Equipment and shall take reasonable steps to protect such Equipment from harm, theft and misuse. Customer shall provide access to the Premises for WES to perform any function related to this Contract during regular business hours, or such other reasonable hours as may be requested by WES and reasonably acceptable to the Customer. WES’s access to Premises to make emergency repairs or corrections as it may determine are needed shall not be unreasonably restricted by the Customer.

Exhibit 1-13. EQUIPMENT SERVICE
Actions by WES. WES shall provide all service, repairs, and adjustments to the Equipment installed under terms of this Contract pursuant to Schedule 1-A-4. Customer shall incur no cost for Equipment service, repairs, and adjustments, except as set forth in the Compensation Schedule, provided, however, that if WES determines that the need for maintenance or repairs principally arises due to the negligence or willful misconduct of the Customer or any employee or other agent of Customer, WES may charge Customer for the actual cost of the maintenance or repair insofar as such cost is not covered by any warranty or insurance proceeds.

Malfunctions and Emergencies. Customer shall use its best efforts to notify WES or its designee(s) within twenty-four (24) hours after the Customer’s actual knowledge of the occurrence of: (i) any malfunction in the operation of the Equipment or any preexisting energy-related equipment that might materially impact upon any energy savings guaranteed by WES, (ii) any interruption or alteration to the Two-Phase Energy [and Water] Performance Contract | Page 35 3767-1001 / 2392697.4
energy supply to the Premises, or (iii) any alteration or modification in any energy-related Equipment or its operation.

Where Customer exercises due diligence in attempting to assess the existence of a malfunction, interruption, or alteration it shall be deemed not at fault in failing to correctly identify such conditions as having a material impact upon the guaranteed energy savings. Customer shall notify WES within twenty-four (24) hours upon its having actual knowledge of any emergency condition affecting the Equipment. WES or its designee(s) shall respond within twenty-four (24) hours to promptly proceed with corrective measures. Any telephonic notice of such conditions by Customer shall be followed within three (3) business days by written notice to WES from Customer. If Customer unreasonably delays in so notifying WES of a malfunction or emergency, and the malfunction or emergency is not otherwise corrected or remedied, such conditions will be treated as a Material Change (as defined herein) and the applicable provisions of Schedule 2-B shall be applied.

Actions by Customer. Customer shall not move, remove, modify, alter, or change in any way the Equipment or any part thereof without the prior written approval of WES except as set forth in Schedule 1-A-5. Notwithstanding the foregoing, Customer may take reasonable steps to protect the Equipment if, due to an emergency, it is not possible or reasonable to notify WES before taking any such actions. In the event of such an emergency, Customer shall take reasonable steps to protect the Equipment from damage or injury and shall follow instructions for emergency action provided in advance by WES.

Customer agrees to maintain the Premises in good repair and to protect and preserve all portions thereof, which may in any way affect the operation or maintenance of the Equipment.

Exhibit 1-14. STANDARDS OF COMFORT
NA
Exhibit 1-15. BONDS
Any and all performance and payment bonds obtained by WES for this Project shall specifically exclude coverage for those portions of the Contract or the Work pertaining to design services and any other part of this Contract and the ESPC Documents which do not relate specifically to construction management and supervision of Work for purchasing and installing of Equipment, or for work to be accomplished by the Customer.

Exhibit 1-16. OWNERSHIP
Ownership of Existing Equipment. Ownership of the equipment and materials presently existing at the Premises at the time of execution of this Contract shall remain the property of the Customer even if they are replaced or their operation made unnecessary by Work performed by WES pursuant to this Contract. If applicable, WES shall advise the Customer in writing of all equipment and materials to be replaced at the Premises and the Customer shall within thirty (30) days designate in writing to WES which equipment and materials (other than Hazardous Substances (as defined herein), which will be the responsibility of Customer) should not be disposed of off-site by WES. It is understood and agreed by both Parties that the Customer shall be responsible for and designate the location and storage for any equipment and materials that should not be disposed of off-site. WES shall be responsible for the disposal of all equipment and materials (other than Hazardous Substances) designated by the Customer as disposable offsite in accordance with all applicable laws and regulations regarding such disposal. WES will not be responsible for the removal and/or disposal of any Hazardous Substances except as specified in the Scope of Work.

New Equipment. All new Equipment or materials supplied to the Customer shall become the property of the Customer upon the earlier of installation or payment therefor. WES shall grant to the Customer a perpetual, irrevocable royalty-free license for any WES software or other WES intellectual Two-Phase Energy [and Water] Performance Contract | Page 36 3767-1001 / 2392697.4
property rights necessary for the Customer to continue to operate, maintain, and repair the Equipment in a manner that will yield maximal energy consumption reductions.

IN WITNESS WHEREOF, and intending to be legally bound, the Parties hereto subscribe their names to this Performance Contract Amendment by their duly authorized officers as of the Amendment Date.

WES CUSTOMER
Signed Signed
Name Name
Title Title
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SCHEDULE 1-A

ADDITIONAL RESPONSIBILITIES
{NOTE: this schedule is added by the Performance Contract Amendment. Retain the paragraph immediately below at the time originally issuing this contract (when entering into the IGA). All other content to be defined at the time of the Performance Contract Amendment}
[This Schedule is added as part of the Performance Contract Amendment] Schedule 1-A-1. System Start-up & Commissioning. WES will perform start-up and commissioning services for all equipment installed.

Schedule 1-A-2. Operating parameters of installed equipment. WES will provide operating parameters in the Operation and Maintenance Manuals. These manuals will be provided to Customer prior to Project Final Completion.

Schedule 1-A-3. WES Maintenance Responsibilities. WES is not responsible for performance of any maintenance of equipment on the Premises.

Schedule 1-A-4. Customer Maintenance Responsibilities. Customer is required to perform all necessary maintenance as recommended by the manufacturer in the Operation and Maintenance manuals (to be provided upon Project Final Completion) for equipment installed as part of this Contract, as well as all additional equipment that will continue to operate in Customer facilities.

Schedule 1-A-5. Facility Maintenance Checklist. WES shall provide Customer with a complete facility maintenance checklist prior to the Acceptance of Project Final Completion.

Schedule 1-A-6. Customer Information Technology Responsibilities. (a) Customer is responsible for providing a working WAN infrastructure connecting multiple buildings and configuring it for connecting new internet-based building control system, accessible via standard web-browser from inside and outside the Customer’s network. (b) Customer is responsible for providing network connection(s) (cables and switches), open ports and IP addresses for connection of building control system’s web server to Customer’s network for internet accessibility.
(c) Customer shall engage their IT representative familiar with the Customer’s network to work with WES and its subcontractors to establish IP addresses and communications to assure proper operation of the building control system with the Customer’s wide area network.

Schedule 1-A-7. Differing Site Conditions. The conditions at the site are the responsibility of the Customer regardless of whether or not they could be identified by an investigation or exploration conducted according to the professional standard of care. A “Differing Site Condition” is a subsurface, hidden, latent, or physical condition at a Project site/building not revealed by the site exploration, site investigation, or other information provided by the Customer and which cannot be reasonably anticipated.

Special risks occur whenever engineering is applied to identifying site/building conditions. Even a comprehensive investigation, according to the professional standard of care, may not detect all subsurface or site/building conditions. WES shall not be liable for site/building conditions that could not be identified by such an investigation or exploration. Accordingly, the Customer agrees to indemnify, including all costs and fees, and hold WES harmless from all claims for Differing Site Conditions.

Schedule 1-A-8. Hazardous Substances.
(a) WES contemplates that it will not encounter any Hazardous Substances at the Premises, except as has been disclosed as a pre-existing condition by Customer prior to the Amendment Date.

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However, any disclosure of Hazardous Substances that will affect the performance of the Work after the Amendment Date will constitute a valid basis for a Change Order. (b) “Hazardous Substances” means (i) any hazardous, toxic, or dangerous wastes, substances, chemicals, constituents, contaminants, pollutants, and materials and any other carcinogenic, liquids, corrosive, ignitable, radioactive, reactive, toxic, or otherwise hazardous substances or mixtures (whether solids, liquids, gases) now or at any time subject to regulation, control, remediation, or otherwise addressed under Applicable Laws; (ii) any “hazardous substance” as defined by the Resource, Conservation and Recovery Act of 1976 (42 U.S.C. §6901 et seq.), as amended, and regulations promulgated thereunder; (iii) any “hazardous, toxic or dangerous waste, substance or material” specifically defined as such in 42 U.S.C. §9601 et seq., as amended and regulations promulgated thereunder; and (iv) any hazardous, toxic or dangerous waste, substance, or material as defined in any so-called “superfund” or “superlien” law.

Schedule 1-A-9. Training Requirements. WES will provide [●] hours of dedicated training prior to Project Final Completion to ensure proper understanding of installed systems. Additional training will be provided at no additional cost until Project Final Completion as deemed necessary by Customer and WES.

Schedule 1-A-10. Trenching. Pursuant to California Labor Code §6705, if the Work is a public work involving an estimated expenditure in excess of $25,000 and includes the excavation of any trench or trenches five (5) feet or more in depth, WES will, in advance of excavation, submit to Customer and/or a registered civil or structural engineer, employed by Customer, to whom authority to accept has been delegated, a detailed plan showing the design of shoring, bracing, sloping, or other provisions to be made for worker protection from the hazard of caving ground during the excavation of such trench or trenches, which provisions will be no less effective than the current and applicable CAL-OSHA Construction Safety Orders. No excavation of such trench or trenches may be commenced until this detailed plan has been accepted by Customer or by the person to whom authority to accept has been delegated by Customer.

Pursuant to California Labor Code §6705, nothing in this Schedule 1-A-11 imposes tort liability on Customer or any of its employees.

Schedule 1-A-11. Subsurface Conditions. Pursuant to California Public Contract Code §7104, if the Work is a public work involving digging trenches or other excavations that extend deeper than four (4) feet below the surface of the ground:
(a) WES will promptly, and before the following conditions are disturbed, notify Customer, in writing, of any:
(1) Material that WES believes may be material that is hazardous waste, as defined in California Health and Safety Code §25117, that is required to be removed to a Class I, Class II, or Class III disposal site in accordance with provisions of existing law; (2) Subsurface or latent physical conditions at the site differing from those indicated by information about the site made available to WES before the Amendment Date; (3) Unknown physical conditions at the site of any unusual nature, different materially from those ordinarily encountered and generally recognized as inherent in work of the character provided for in this Contract.
(b) Customer will promptly investigate the conditions and, if it finds that the conditions do materially so differ or do involve hazardous waste, and cause a decrease or increase in WES’s cost of, or the time required for, performance of any part of the Work will issue a Change Order under the procedures described in this Contract.
(c) If a dispute arises between Customer and WES, whether the conditions materially differ, or involve hazardous waste, or cause a decrease or increase in WES’s cost of, or time required for, performance of any part of the Work, WES will not be excused from any scheduled completion date provided for by this Two-Phase Energy [and Water] Performance Contract | Page 39 3767-1001 / 2392697.4
Contract but will proceed with all Work to be performed under this Contract. WES will retain any and all rights provided either by contract or by law which pertain to the resolution of disputes and protests between the Parties.

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SCHEDULE 1-B

CERTIFICATE OF SUBSTANTIAL COMPLETION
Project Project Number:

From: WES To (Customer): [CUSTOMER NAME]
[WES Address] [Customer Address]
[WES Address] [Customer Address]

PROJECT OR PORTION OF THE PROJECT DESIGNATED FOR PARTIAL OCCUPANCY OR USE SHALL INCLUDE:

Scope of Work A {Identify the Work, or portion thereof per the schedule of values, that is substantially complete}
The Work performed under this Contract has been reviewed and found, to the best of the Customer’s knowledge, information, and belief, to be substantially complete. Substantial Completion is the stage in the progress of the Work when the Work or designated portion is sufficiently complete in accordance with the ESPC Documents so that the Customer can occupy or utilize the Work for its intended use. The date of Substantial Completion of the Project or portion designated above is the date of issuance established by this Certificate, which is also the date of commencement of applicable warranties required by the ESPC Documents, except as stated below:
{Identify warranties that do not commence on the date of Substantial Completion, if any, and indicate their date of commencement}
Warranty Date of
Commencement
Equipment A, if any
CUSTOMER’S

REPRESENTATIVE
BY (Signature) DATE OF ISSUANCE
A list of items to be completed or corrected is attached hereto. The failure to include any items on such a list does not alter the responsibility of WES to complete all Work in accordance with the ESPC Documents.

Unless otherwise agreed to in writing, the date of commencement of warranties for items on the attached list will be the date of issuance of the final Certificate of Payment or the date of final payment.

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The estimated cost of Work that is incomplete or
defective:
$ 0.00
WES will complete or correct the Work on the list of items attached hereto within [___] days from the above date of Substantial Completion:

WES BY (Signature) DATE
The Customer accepts the Work or designated portion as substantially complete and will assume full possession thereof on the above date of Substantial Completion. Customer assumes responsibility for security, maintenance, heat, utilities, damage to the Work and insurance.

CUSTOMER BY (Signature) DATE
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SCHEDULE 1-C
CERTIFICATE OF ACCEPTANCE – PROJECT FINAL COMPLETION
This is to certify that a final inspection of the Project has been conducted jointly by WES and [CUSTOMER NAME], and that the Parties have determined that the Project has been fully completed in accordance with the ESPC Documents. All guarantees and warranties that have not commenced previously shall commence as of the date of completion below.

Customer accepts the Project as being fully completed and assumes all responsibility for the Premises.

Customer will promptly record a notice of completion or notice of acceptance in the office of the county recorder in accordance with California Civil Code §9204. WES remains responsible for correcting errors and omissions discovered subsequent to the execution of this document and to respond to claims made under applicable warranties.

WES CUSTOMER
Signed Signed
Name Name
Title Title

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EXHIBIT 2
FORM OF ENERGY AND WATER SAVINGS GUARANTEE1
Exhibit 2-1. GUARANTEE PHASE CONTRACT SUM (Solar PV Scope) (a) Customer shall pay WES annual payments for Guarantee Phase services in the amounts listed below, subject to Schedule B and any other applicable terms of this Energy and Water Savings Guarantee:

Year One through Three: $0.00 (included in Construction Phase Contract Sum) Year Four and Beyond: Pricing can be provided to continue M&V if desired. (b) Customer may cancel the Guarantee Phase services on any anniversary of the commencement of Guarantee Services, or at the end of Customer’s fiscal year. If Customer cancels these services, WES reserves the right to cancel the Energy and Water Savings Guarantee as outlined in this Exhibit 2.

Exhibit 2-2. CUSTOMER’S COMPLIANCE WITH FACILITIES MAINTENANCE CHECKLIST (a) The Parties acknowledge and agree that WES has entered into this Contract in reliance upon the prospect of earning compensation, as set forth on Exhibit B and Exhibit 2-1. (b) The Parties further acknowledge and agree that any guaranteed energy and water savings would not likely be obtained unless certain procedures and methods of operation designed for energy and water conservation shall be implemented and followed by Customer on a regular and continuous basis. (c) Customer agrees that it shall adhere to, follow and implement the energy and water conservation procedures and methods of operation to be set forth in Schedule 1-A-5. (d) Customer agrees that WES shall have the right once a month, with prior notice, to inspect the Premises to determine if Customer is complying, and has complied, with its obligations as set forth above in Exhibit 2-2(c). For the purpose of determining Customer’s compliance, the checklist to be set forth on Schedule 1-A-6, as completed and recorded by WES during its monthly inspections, shall be used to measure and record Customer’s compliance. Customer shall make the Premises available to WES for and during each monthly inspection and shall have the right to witness each inspection and the recordations on the checklist.

Exhibit 2-3. UPGRADING OR ALTERING CUSTOMER’S EQUIPMENT (a) Subject to Customer’s prior written approval, which shall not be unreasonably withheld, WES shall at all times have the right (but not the obligation) to change the Equipment, revise any procedures for the operation of the Equipment or implement other energy and water saving actions for the Premises, provided that:
(1) WES complies with the standards of comfort and services set forth in Schedule 1- A-3;
(2) such modifications or additions to, or replacement of, the Equipment, and any operational changes or new procedures, are necessary to enable WES to achieve the energy and water savings for the Premises; and
1 NTD: Use only for savings guarantees for a building or facility. For water meter infrastructure guarantees, use Exhibit 3.

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(3) any cost incurred relative to such modifications, additions or replacement of the Equipment, or operational changes or new procedures shall be the responsibility of WES. (b) All modifications, additions or replacements of the Equipment or revisions to operating or other procedures shall be described in a supplemental Schedule(s) to be provided to the Customer for approval, which shall not be unreasonably withheld, provided that any replacement of the Equipment shall be new and have equal or better potential to reduce energy and water consumption for the Premises than the Equipment being replaced. WES shall update any and all software to be used in connection with the Equipment in accordance with the provisions of Section 10.1. All replacements of and alterations or additions to the Equipment shall become part of the Equipment described in the Scope of Work and shall be covered by the provisions and terms of Exhibit 1-9.

Exhibit 2-4. MATERIAL CHANGES
(a) Material Changes Defined. A Material Change shall include any change in or to the Premises, whether structural, operational or otherwise in nature which reasonably could be expected, in the reasonable judgment of WES, to increase or decrease annual energy and water consumption in accordance with the provisions and procedures set forth in Schedule 2-B, by at least 0.5% after adjustments for climatic variations. Actions by the Customer which may result in Material Change include but are not limited to the following:
(1) manner of use of Premises by the Customer; or
(2) hours of operation for the Premises or for any equipment or energy- and water-using systems operating at the Premises; or
(3) permanent changes in the comfort and service parameters set forth in Schedule 1- A-3; or
(4) occupancy of the Premises; or
(5) structure of the Premises; or
(6) types and quantity of equipment used at the Premises; or (7) modification, renovation or construction at the Premises; or (8) the Customer’s failure to provide maintenance of or repairs to the Equipment in accordance with Schedule 1-A-5; or
(9) any other conditions, other than climate, affecting energy and water use at the Premises.
(b) Reported Material Changes; Notice by Customer. The Customer shall use its best efforts to deliver to WES a written notice describing all actual or proposed Material Changes in the Premises or in the operation of the Premises at least thirty (30) days before any actual or proposed Material Change is implemented or as soon as is practicable after an emergency or unplanned event. Notice to WES of Material Changes caused by a bona fide emergency or other situation which precludes advance notification shall be deemed sufficient if given by the Customer within thirty (30) hours after having actual knowledge that the event constituting the Material Change occurred or was discovered by the Customer to have occurred. (c) Unreported Material Change. In the absence of any Material Changes in the Premises or in their operations, the baseline energy and water consumption as set forth in Schedule 2-A should not change more than two percent (2%) during any month from the projected energy and water use for that month, after adjustments for changes in climate conditions. Therefore, if energy and water consumption for any month as set forth in Schedule 2-A deviates by more than two percent (2%) from the energy and water consumption of the same month of the preceding year after adjustments for changes to climatic conditions, then such deviation shall be timely reviewed by WES to ascertain the cause of deviation. WES shall report its findings Two-Phase Energy [and Water] Performance Contract | Page 45 3767-1001 / 2392697.4
to the Customer in a timely manner and WES shall determine what, if any, adjustments to the baseline will be made in accordance with the provisions set forth in Schedule 2-B.

Exhibit 2-5. GUARANTEED ENERGY AND WATER SAVINGS
(a) International Performance Measurement and Verification Protocol Option B – Fully Measured Retrofit Isolation will be utilized to verify annual electric savings from the solar PV measure.

WES guarantees 95% of the calculated energy savings and generation for a 3-year Guarantee Term. The Customer will save 385,020 kWh in Year 1. The solar PV generation is derated by 0.8% annually for Years 2 and 3 to account for normal degradation of the solar panels. The nearest physical weather station is Long Beach Daugherty Field. The total guaranteed savings for years 2 and 3 are shown below:

Year 2 381,940 kWh
Year 3 378,884 kWh
Exhibit 2-6. Savings Reporting and Reconciliation. No more than eighteen (18) months following Project Final Completion, WES shall provide to Customer a savings report identifying the Actual energy and water savings achieved during the installation period as well as a period of twelve (12) consecutive months during this period following Project Final Completion. The total Actual energy and water savings and Energy and Water Savings Guarantee are defined as:
(a) Actual Energy or Water Savings = Construction Period Savings + Performance Period Savings x Guarantee Term
Where: Performance Period savings is savings from a period of twelve (12) consecutive months during the period following Project Final Completion (b) Energy or Water Savings Guarantee = Annual Guarantee Amount x Guarantee Term (c) In the event that the Actual Energy or Water Savings is in excess of the energy and water Savings Guarantee, the energy and water Savings Guarantee shall be deemed satisfied. No further tracking shall be conducted by WES, nor shall any additional services be performed. (d) In the event that Actual energy and water savings falls short of the Energy and Water Savings Guarantee, WES shall reimburse Customer for the full amount of the difference between the Actual Energy and Water and the Energy and Water Savings Guarantee, as described in Schedule 2-B, for the consecutive 12-month period identified. In addition, WES shall, at its discretion, perform one of the following actions:
(1) Reimburse Customer for all remaining 12-month periods remaining in the Guarantee Term. The reimbursement for the remaining 12-month periods in the Guarantee Term will use an annual five percent (5%) discount rate to account for the present value of the funds being reimbursed.
(2) Continue to track savings for the 12 months immediately following the previous 12- month guarantee period. At the conclusion of this 12-month term Guarantee Term, WES shall provide to Customer a savings report identifying the Actual Energy and Water Savings achieved during the Term.
(A) In the event that the most recent Actual Energy and Water Savings is in excess of the Energy and Water Savings Guarantee, the Energy and Water Savings Guarantee shall be deemed satisfied. No further tracking shall be conducted by WES, nor shall any additional services be performed.

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(B) In the event that additional savings above guarantee are achieved in any year during the guarantee period, these savings can be used to offset shortfalls in savings in other years. If WES has written a savings shortfall check to the Customer, and later Total Dollar Savings exceed the annual guarantee amount, Customer will reimburse WES up to the amount of WES’s shortfall check, to the extent that the shortfall is made up by savings in excess of the guarantee.
(C) In the event that the most recent Actual Energy and Water Savings falls short of the Energy and Water Savings Guarantee, WES shall reimburse Customer for the full amount of the difference between the Actual Energy and Water and the Energy and Water Savings Guarantee for the consecutive 12-month period identified. In addition, WES shall, at its discretion, perform one of the actions described in Exhibit 2-6(d)(1) or Exhibit 2-6(d)(2) above.

Exhibit 2-7. Utility Rates Used to Calculate Savings. The utility rates listed in the table below will be used to determine:
(a) The amount of dollar savings achieved each year for purposes of measuring the program’s performance relative to the Energy and Water Savings Guarantee and (b) The dollar amount that WES shall compensate the Customer in the event that there is an Energy and Water shortfall
Table 1 – Blended Utility Rates used for determining Actual Energy Cost Savings Program Year Electric Rate
0 $0.186 / kWh (Paramount Park)
$0.176 / kWh (Public Works)
Future Years Year zero rate adjusted for current year’s CPI or future year’s actual rate, whichever is greater.

Exhibit 2-8. Requirements of Customer: To facilitate successful achievement of the Energy and Water Savings Guarantee, Customer agrees to:
(a) Provide utility data for the meters listed in Schedule 2-A to WES within thirty (30) days of receiving such information from utility providers. Failure to provide data within this timeframe shall void the Energy and Water Savings Guarantee.
(b) Provide WES access to all buildings covered under the Guarantee; all temperature control and energy management systems which control part or all of the buildings covered under the Guarantee; personnel with responsibility for operating and/or managing any of the above buildings; and construction documents, equipment inventories, and other documents that may be helpful in evaluating a cause for adjustment.

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SCHEDULE 2-A

BASELINE ENERGY AND WATER CONSUMPTION
An accurate measurement of Baseline is necessary to facilitate accurate measurement and verification of the Energy and Water Savings Guarantee. Baseline conditions generally include physical, operational, and energy and water use data on the facility and systems. This Schedule identifies baseline performance and operating factors that influence energy and water consumption, and how their values will be determined through observations and measurements. The Schedule also demonstrates the calculated Baseline for the Customer’s Premises. This Baseline shall be used to determine whether Actual Energy and Water exceeds or falls short of the Energy and Water Savings Guarantee.

Schedule 2-A-1. Solar PV at two sites:
(a) M&V Option: IPMVP Option B – Fully Measured Retrofit Isolation (b) Applicable Locations. The following facilities will utilize this M&V methodology for the purposes of measuring PV Generation and applicable savings. (1) Paramount Park
(2) Public Works Building
(c) Definition of Baseline. The baseline is that set of parameters that describes the energy and power generation during the baseline year.
(d) Energy Baseline Development. The baseline consumption of any new PV installation is considered to be the energy performance of the facility prior to the installation of this ECM. Sites with no prior PV installations have a baseline of zero production.

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SCHEDULE 2-B

SAVINGS MEASUREMENT & CALCULATION FORMULAE

METHODOLOGY TO ADJUST BASELINE
Schedule 2-B-1.Savings Measurement (IPMVP Option B):
(a) International Performance Measurement and Verification Protocol Option B verification techniques measure savings at a system level where key performance factors load and hours of use are directly measured.
(b) Solar PV: The solar production will be tracked utilizing the system portal. Production data cost impacts will be analyzed using the blended rate outlined in Table 1.

Schedule 2-B-2.Determination of Dollars Saved.
(a) Total Annual $ Savings = ∑ (Energy/Demand/Water Savings x Contractual Energy/Demand Rates)
Where:

Contractual Energy Rates = Utility rates defined in Table 1.

Schedule 2-B-3.Causes for Adjustment to the Baseline.
(a) Implicit in this measurement option is the necessity of identifying and accounting for the effects of changes to the facilities and conditions during the measurement period that are beyond the scope of the measures installed. During the measurement and verification period, all variables must have their energy impact accounted for if the true savings from the energy conservation measure is to be assessed.

Following is a partial list of changes that will lead to adjusting the Baseline Energy and water consumption:
(1) building additions
(2) changes in operating hours
(3) remodeling projects
(4) changes in usage patterns
(5) equipment replacements
(b) In the event that any change is made to the Customer’s Premises that will impact energy and water consumption, Customer shall notify WES in writing of such change within 30 days. WES will utilize existing building models used to calculate Baseline Energy and water consumption to update that Baseline Energy and water consumption and determine the impact that any such change will have on Actual Energy and Water and present Customer a written analysis of the effects of the changes. Changes that are long-term or permanent will be reflected in a change to the Baseline Energy and water consumption. Temporary changes that affect energy and water use will be calculated and added to the corresponding month(s) Actual Energy and Water.
(c) Any changes made by WES to the Baseline Energy and water consumption or saving calculations shall be presented to Customer for approval. Customer shall have 30 days to protest recommended modifications in writing, after which time change will be considered accepted. If Customer protests any recommended modifications, Customer and WES will work together to establish mutually acceptable modifications based on accurate building models showing the impact of changes to facilities. (d) Weather normalization will be employed to ensure that the impact of actual weather conditions is eliminated from the Energy and Water Guarantee calculations. Normalization shall not be utilized to the benefit of either Customer or WES, but shall be used solely for the purpose of accurately Two-Phase Energy [and Water] Performance Contract | Page 49 3767-1001 / 2392697.4
accounting for the impact on Actual Energy and Water of the Scope of Work implemented in conjunction with this Contract.
(e) Solar production will be monitored monthly through solar PV monitoring infrastructure.

Willdan will ensure system inverters and panels are operational. Annual production will be adjusted for differences from modeled solar irradiance and will take expected annual solar module degradation into account.

Schedule 2-B-4.Adjustments Methodology for Material Changes. (a) For Adjustments necessitated by Material Changes, the following procedure shall be followed:
(1) Customer will notify WES of planned changes in building use or function. (2) WES and Customer will review the changes planned and determine if these changes are likely to cause a change in energy and water use that would exceed the threshold limits defined in Exhibit 2-4. If the expected changes are less than the threshold, the effect will be ignored and no adjustment will be used.
(3) If the changes are expected to raise or lower energy and water consumption more than the threshold limits defined in Exhibit 2-4, the building will be sub-metered by Customer for both pre- and post-use change periods until the effect on energy has been determined. (A) For changes to existing buildings that are metered, a linear regression will be performed to correlate heating- and cooling-degree days to the pre-change period’s energy usage for the building, similar to the procedure performed to adjust the base year for weather. The post-change heating- and cooling-degree days will then be applied to the prechange regression equation to determine what the post-change period’s use would have been if no change had occurred. The difference between this use and the period’s actual use will be, whether positive or negative, used as the adjustment, shown as term “M” in the equations in the Measurement and Adjustments Methodology section in this Schedule. (B) If the entire effect of the change is independently sub-metered, such as the addition of a building on an existing utility service, the sub-metered energy and water use for that building for each guarantee period will be used to determine the baseline adjustment, shown as term “M” in the equations in the Measurement and Adjustments Methodology section in this Schedule.
(C) If the method for determining adjustment described in the previous paragraph is agreed to be not appropriate or too complex for a specific adjustment by the Customer and WES, Customer and WES will develop a separate measurement and verification (M&V) plan to track the effect of the building change. (4) If the changes occur at a time when the impact would affect a fraction of that year’s energy and water use for an existing building or system, the procedure described in the previous section will be performed separately for the year in which the change occurred and the subsequent year to accurately account for the effect of the change in both years. The subsequent year’s adjustment will then be used for all future years.

Schedule 2-B-5.Adjustments for Mild Weather Season During Performance Period. (a) For performance periods with mild weather season, WES may elect to normalize both the baseline and the Guaranteed Period Consumption for a specific utility to Typical Meteorological Year (TMY3) weather data available for download from the National Renewable Energy Laboratory.

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(b) A mild weather season is defined as a heating or cooling season containing fewer heating or cooling degree days than a Typical Meteorological Year, evaluated using TMY3 weather data. (c) The TMY3 weather data set will be for the weather station located at Long Beach Daugherty Field. If the actual solar irradiance varies substantially from the average TMY data used for the original savings calculation, the solar generation simulation will be updated using the actual irradiance values that occur during the performance period.

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EXHIBIT 3
FORM OF ASSURED PERFORMANCE GUARANTEE – UTILITY METERS

PROJECT BENEFITS
A. Certain Definitions. For purposes of this Performance Guarantee, the following terms have the meaningsset forth below:

Annual Project Benefits are the portion of the projected Total Project Benefits to be achieved in any one year of the Guarantee Term.

Annual Project Benefits Realized are the Project Benefits actually realized for any one year of the Guarantee Term.

Baseline isthe mutually agreed upon data and/or usage amounts that reflect conditions prior to the installation of the Improvement Measures.

Guarantee Term will commence on the first day of the month next following the execution of the Certificate of Acceptance – Project Final Completion, and will continue through the duration of the M&V Services, subject to earlier termination as provided in this Performance Guarantee.

Improvement Measures are the measures set forth in Attachment A (Scope of Work).

Installation Period is the period beginning on WES’s receipt of Customer’s Notice to Proceed and ending on the commencement of the GuaranteeTerm.

M&V Services are the measurement and verification services set forth in Section 5 below.

Project Benefits are the increased access to billable consumption achieved by new meters calculated in accordance with the methodologies set forth in Section 3 below.

Total Project Benefits are the projected Project Benefits to be achieved during the entire term of this Performance Guarantee.

B. Project Benefits Summary. Subject to the terms and conditions of the Contract and this Performance Guarantee, WESguarantees that the Increased access to billable consumption will be achieved from improving the meter accuracy.

Customer acknowledges and agrees that if, for any reason, it (i) cancels or terminates receipt of M&V Services, (ii) fails to pay for M&V Services in accordance with Attachment B of the Contract, (iii) fails to fulfill any of its responsibilities necessary to enable WES to complete the Work and provide the M&V Services, or (iv) otherwise cancels, terminates or materially breaches the Contract or this Performance Guarantee, the Performance Guarantee shall automatically terminate, and WES shall no liability hereunder.

2. PERFORMANCE GUARANTEE
WES guarantees that the meters sold and installed pursuant to the Contract will meet the increased access to billable consumption guaranteed set forth in Section 4 below. The accuracy of the meters shall be determined in accordance with the warranty information provided by the meter manufacturer.

3. MEASUREMENT AND VERIFICATION METHODOLOGY
Based upon WES’s and Customer’s investigation of the existing condition of certain of Customer’s water meters, Customer has concluded that a significant percentage of such meters do not accurately measure billable consumption, and Customer is losing potential billable consumption revenue due to this inaccuracy.

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volume of water registered by such meters and thereby increase measured billable consumption, assuming the same consumption levels prior to and after the Work has been performed. Customer recognizes, however, that actual revenues may differ from billable revenues and that the amount of actual revenues achieved in future periods will depend on other factors besides improved meter accuracy, such as, by way of example, collections ratio, consumption, and water utility rates, among others.

IPMVP Option A will be utilized to demonstrate the improvement in accuracy of the newly installed meters compared to the pre-retrofit conditions. Under an Option A approach, measurements are taken to quantify accuracy of individual meters in both pre- and post-retrofit periods, and the revenue recovery will be estimated based on an average stipulated flowrate for each meter.

The pre-retrofit weighted average accuracy of meter sizes equal to 3/4” has been calculated by testing a representative sample of the meter population as set forth in Attachment A (Scope of Work). The pre-retrofit accuracy of meter sizes greater than 3/4” has been estimated based on the meter population set forth in Attachment A (Scope of Work). To adhere with Option A, an increase in billable consumption recovery check will be conducted at a 30% and 60% completion target to verify the expected billable consumption recovery is on track with expectations. If billable consumption recovery is off target during any of these milestone checks, the accuracy of the pre-retrofit meters greater than ¾” will be measured.

Weighted average accuracy is based on the American Water Works Association (AWWA) guidelines as set forth in the Manual of Water Supply Practices - M6, Fourth Edition, Water Meters - Selection, Installation, Testing and Maintenance, ©1999 American Water Works Association, ISBN 1-58321-017-2, as the same may be updated or revised from time to time by AWWA. The post-retrofit accuracy of new meters will be tested using the same AWWA guidelines.

WES’s guarantee relating to meters is limited solely to the increase in access to billable consumption on new meters, operating under normal conditions, in accordance with the meter warranty, which have been replaced pursuant to the Contract and are set forth in the table of meter sizes and quantities in Attachment A (Scope of Work). No guarantee, express or implied, is provided with respect to any other matters, including, without limitation, the following items (and the effects thereof):
• water system revenue
• water usage/consumption trends
• water rationing programs
• demographic and/or population shifts
• changes in the industrial or commercial base
• regulatory changes
• droughts, floods, rainfall, or other weather or climactic conditions • water system pressure variations
• non-metered water usage
• failure to collect amounts due for billable consumption • changes in monthly base charges, monthly allowable minimum base consumption, or monthly volume charges
• changes to water and sewer rate schedules
• water quality
• failure of the water system to meet governmental requirements • improper maintenance or unsound usage of the Improvement Measures or any related equipment • performance of automatic meter reading equipment
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4. BASELINE CALCULATIONS & POST-RETROFIT INCREASED BILLABLE

CONSUMPTION BENEFIT
Annual Water Consumption as provided by the Customer, using 2022 Budget Year Consumption and Revenue, as outlined in the 2023 Utility Rates Study and Staff Report published by the City.

5. MEASUREMENT & VERIFICATION SERVICES
WES will provide the M&V Services set forth below in connection with the Performance Guarantee.

A. During the Installation Period, WES will measure and track Project Benefits. WES will report the measured Project Benefits achieved during the Installation Period to Customer within sixty (60) days of the commencement of the Guarantee Term.

B. Within sixty (60) days of each anniversary of the commencement of the Guarantee Term, WES will undertake the following activities to verify the project benefits set forth in the table shown in Section 4:

1. verify cellular reads match meter register reads

2. verify that utility tier rates match consumption data per account

3. verify revenue recovery per route

4. replace any damaged and/or inaccurate meters in the test set if damage and/or inaccuracy were caused by normal wear and tear (Customer shall be responsible to replace any damaged and/or inaccurate meters not in the test set, as set forth below, as well as those in the test set, to the extent damage and/or inaccuracy is caused by factors other than normal wear and tear).

C. Within sixty (60) days of the first, third, and optionally, the fifth, anniversary of the commencement of the Guarantee Term, WES will provide Customer with an annual report containing:

1. an executive overview of the project’s performance and Project Benefits achieved to date;

2. a summary analysis of the Project Benefits accounting; and

3. a detailed analysis of the Project Benefits calculations.

6. GUARANTEE PHASE SERVICES
A. Facility Personnel Assistance. WES’s commissioning group will assist Customer personnel in achieving the most efficient operation of Customer’s Infrastructure. The commissioning group will remotely monitor the Infrastructure and will help identify potential problems as well as work with staff to enhance Two-Phase Energy [and Water] Performance Contract | Page 54 3767-1001 / 2392697.4
and implement energy- and water-conservation programs. Customer will be responsible for the maintenance of all systems.

B. Savings Tracking and Reporting. WES will be responsible for the monthly tracking and monitoring of the Project and will provide ongoing assistance to Customer’s staff. WES will provide an annual Measurement & Verification report. This report will detail annual increased access to billable consumption.

D. Cancellation. Customer may cancel the Guarantee Phase services on any anniversary of the commencement of Guarantee Services, or at the end of Customer’s fiscal year. If Customer cancels these services, WES reserves the right to cancel the Performance Guarantee.

7. GUARANTEE PHASE CONTRACT SUM
Customer shall pay WES annual payments for Guarantee Phase services in the amounts listed below, subject to Attachment B and any other applicable terms of this Performance Guarantee:

Year One and Year Three: $0.00 (included in Construction Phase Contract Sum)
Year Four (Optional): Pricing can be provided to continue M&V if desired.

Notes: The water meter M&V efforts for the water meter scope will be conducted in years one and three only.

Customer may cancel the Guarantee Phase services on any anniversary of the commencement of Guarantee Services, or at the end of Customer’s fiscal year. If Customer cancels these services, WES reserves the right to cancel the Performance Guarantee as outlined in this Attachment B.

DECEMBER 12, 2023
RESOLUTION NO. 23:038
“A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PARAMOUNT

AUTHORIZING AN EQUIPMENT LEASE/PURCHASE AGREEMENT WITH

RESPECT TO THE ACQUISITION, FINANCING AND LEASING OF

WATER METERS AND OTHER EQUIPMENT AND DELEGATING

AUTHORITY TO NEGOTIATE AND EXECUTE DOCUMENTS REQUIRED

IN CONNECTION THEREWITH, AND TO MEMORIALIZE THE
OBLIGATION OF THE CITY’S WATER ENTERPRISE FUND TO PAY OR REIMBURSE THE CITY’S GENERAL FUND FOR ALL COSTS OF SUCH

WATER METERS AND EQUIPMENT ADVANCED OR TO BE ADVANCED
BY THE CITY’S GENERAL FUND”
MOTION IN ORDER:

READ BY TITLE ONLY AND ADOPT RESOLUTION NO. 23:038.

MOTION:

MOVED BY: _______________
SECONDED BY: ____________
[ ] APPROVED
[ ] DENIED
ROLL CALL VOTE:

AYES: __________________
NOES: __________________
ABSENT: ________________
ABSTAIN:________________
H:\PUBLIC WORKS\PWAGENDA\COMMON FILE\MS RESO 23-037 AND 23-038.DOCX 12/8/2023 9:36 AM

CITY OF PARAMOUNT

LOS ANGELES COUNTY, CALIFORNIA
RESOLUTION NO. 23:038

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PARAMOUNT

AUTHORIZING AN EQUIPMENT LEASE/PURCHASE AGREEMENT

WITH RESPECT TO THE ACQUISITION, FINANCING AND LEASING OF

WATER METERS AND OTHER EQUIPMENT AND DELEGATING

AUTHORITY TO NEGOTIATE AND EXECUTE DOCUMENTS REQUIRED

IN CONNECTION THEREWITH, AND TO MEMORIALIZE THE
OBLIGATION OF THE CITY’S WATER ENTERPRISE FUND TO PAY OR REIMBURSE THE CITY’S GENERAL FUND FOR ALL COSTS OF SUCH

WATER METERS AND EQUIPMENT ADVANCED OR TO BE ADVANCED
BY THE CITY’S GENERAL FUND
WHEREAS, the City of Paramount, a general law city duly organized and existing under the laws of the State of California (the “City”), is authorized by the laws of the State of California to acquire, finance and lease personal property for the benefit of the City and its inhabitants and to enter into contracts with respect thereto; and WHEREAS, the City desires to acquire, finance and lease certain equipment consisting of new advanced water meters and related equipment (the “Equipment”) for its water enterprise (the “Water Enterprise”); and
WHEREAS, to acquire the Equipment, the City proposes to enter into that certain Equipment Lease/Purchase Agreement (Escrow Account) (the “Lease Agreement”) with Banc of America Public Capital Corp, a Kansas corporation, as lessor, (the “Lessor”), the form of which has been presented to the City Council at this meeting; and WHEREAS, in connection with the Lease Agreement, the City proposes to enter into that certain Escrow and Account Control Agreement (the “Escrow Agreement”) among the Lessor, the City, and Wilmington Trust, National Association, as escrow agent, to provide a mechanism for holding and applying the proceeds of the Lease Agreement to the acquisition and installation of the Equipment, the form of which has been presented to the City Council at this meeting; and
WHEREAS, the Lease Agreement will comply with the provisions of the City’s Debt Management Policy, which policy was approved by Resolution No. 21:015 adopted by the City Council on June 8, 2021; and
WHEREAS, in accordance with Section 5852.1 of the California Government Code, the City has obtained and disclosed the information set forth in Appendix A hereto with respect to the financing of the Equipment; and
RESOLUTION NO. 23:038

WHEREAS, the City Council deems it for the benefit of the City and for the efficient and effective administration thereof to enter into the Lease Agreement, the Escrow Agreement and the other documentation relating to the acquisition, financing and leasing of the Equipment on the terms and conditions therein and herein provided; and WHEREAS, the City previously entered into an Enterprise Fund Installment Sale Agreement dated as of May 3, 2010, between the City and the California Infrastructure and Economic Development Bank (the “I-Bank”), and an Installment Sale Agreement dated as of May 1, 2018, between the City and the I-Bank (collectively, the “Installment Sale Agreements”) to finance certain capital projects for the Water Enterprise; and WHEREAS, the City’s payment obligations under the Installment Sale Agreements are secured by a pledge of and first lien on all of the Net System Revenues (as defined in the Installment Sale Agreements), which generally consist of all of the revenues of the Water Enterprise less the costs of operating and maintaining the Water Enterprise as further described in the Installment Sale Agreements;
WHEREAS, because the Equipment represents a Water Enterprise undertaking, the City Council also desires to establish its determination that the Finance Director will undertake to budget for each fiscal year such amounts as are necessary from the Water Enterprise to pay the costs of the financing relating to the Equipment over the life of the Lease Agreement, including rental payments due thereunder, and any other costs of financing the Equipment, provided, however, that all such amounts shall be payable from the Water Enterprise on a basis subordinate to the City’s obligations under the Installment Sale Agreements;

NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUCIL OF THE CITY OF PARAMOUNT AS FOLLOWS:

SECTION 1. Findings and Determinations. It is hereby found and determined that the terms of the Lease Agreement, in the form presented to the governing body of Lessee at this meeting, are in the best interests of the Lessee for the acquisition, financing and leasing of the Equipment.

SECTION 2. Approval of Lease Agreement. The form, terms and provisions of the Lease Agreement are hereby approved in substantially the form presented to this meeting, and on file with the City Clerk, with such insertions, omissions and changes as shall be approved by the City Manager, the Finance Director or the Director of Public Works of the City (each an “Authorized Officer”), acting alone, the execution of such documents being conclusive evidence of such approval; and each Authorized Officer, acting alone, is hereby authorized and directed to execute (in writing or electronically), and each Authorized Officer, acting alone, is hereby authorized and directed to attest, if applicable, the Lease Agreement and any related Exhibits attached thereto and to deliver the Lease Agreement (including such Exhibits) to the respective parties thereto; provided, however, that, (a) the aggregate amount of the principal components of the rental RESOLUTION NO. 23:038

payments payable under the Lease Agreement shall not exceed $13,000,000, (b) the term of the Lease Agreement shall not exceed 20 years, and (c) the true interest cost applicable to the interest components of the rental payments payable under the Lease Agreement shall not exceed 5.00% per annum, except to the extent increases are permitted under the Lease Agreement with respect to default or taxable rates. The City Council hereby authorizes the performance by the City of its obligations under the Lease Agreement.

SECTION 3. Approval of Escrow Agreement. The form, terms and provisions of the Escrow Agreement are hereby approved in substantially the form presented to this meeting, and on file with the City Clerk, with such insertions, omissions and changes as shall be approved by an Authorized Officer, acting alone, the execution of such documents being conclusive evidence of such approval; and each Authorized Officer, acting alone, is hereby authorized and directed to execute (in writing or electronically), the Escrow Agreement and to deliver the Escrow Agreement to the respective parties thereto. The City Council hereby authorizes the performance by the City of its obligations under the Escrow Agreement.

SECTION 4. Other Actions Authorized. The officers and employees of the City shall take all action necessary or reasonably required by the parties to the Lease Agreement or the I-Bank to carry out, give effect to and consummate the transactions contemplated by the Lease Agreement (including the execution (in writing or electronically) and delivery of a Final Acceptance Certificate, the Escrow Agreement, Disbursement Requests and any tax certificate and agreement, as contemplated in the Lease Agreement) and to take all action necessary or desirable in conformity therewith, including, without limitation, the execution (in writing or electronically) and delivery of any closing and other documents required to be delivered in connection with the Lease Agreement (including without limitation one or more memoranda of understanding with Willdan Energy Solutions, Inc. and/or their subcontractors) and any documents to evidence the I-Bank’s approval of the execution and delivery of the Lease Agreement, if necessary or desirable.

SECTION 5. No General Liability. Nothing contained in this Resolution, the Lease Agreement, the Escrow Agreement nor any other instrument shall be construed with respect to the City as incurring a pecuniary liability or charge upon the general credit of the City or against its taxing power, nor shall the breach of any agreement contained in this Resolution, the Lease Agreement, the Escrow Agreement or any other instrument or document executed in connection therewith impose any pecuniary liability upon the City or any charge upon its general credit or against its taxing power, except to the extent that the rental payments payable under the Lease Agreement are limited obligations of the City, subject to annual appropriation, as provided in the Lease Agreement. The City Council acknowledges that the rental payments payable under the Lease Agreement will be payable from all legal available funds of the City, subject to annual appropriation, as provided in the Lease and except for non-appropriation, such rental payments shall not be subject to abatement, diminution, deduction, set-off or defense, for any reason, RESOLUTION NO. 23:038

including without limitation the failure or inability (for whatever reason) of the City to receive (or delay in receipt of) any direct payments or reimbursement from the City’s Water Enterprise Fund (the “Water Enterprise Fund”). The City Council further acknowledges that the City will not pledge any revenues of the Water Enterprise as security for its obligations under the Lease Agreement and nothing in this Resolution shall be construed to constitute a pledge thereof.

SECTION 6. Appointment of Authorized City Representatives. The Authorized Officers are each hereby designated to act as authorized representatives of the City for purposes of the Lease Agreement and the Escrow Agreement until such time as the City Council shall designate any other or different authorized representative for purposes of the Lease Agreement or the Escrow Agreement.

SECTION 7. Selection of Professionals. The selection of KNN Public Finance, LLC, as municipal advisor to the City, and Jones Hall, A Professional Law Corporation, as special counsel to the City, in connection with the execution and delivery of the Lease Agreement, the Escrow Agreement and the other documents authorized to be delivered in connection therewith, is hereby confirmed.

SECTION 8. Interfund Loan; Payment of Rental Payments. The City Council hereby directs the Finance Director to prepare a budget for each fiscal year for approval by the City Council that includes amounts for direct payments or reimbursement from the Water Enterprise Fund of the City for rental payments payable under the Lease Agreement, in the amounts and at the times set forth in the Lease Agreement, which shall be calculated with a repayment term over 20 years, prepayable at any time, and at interest rate equal to the City’s interest cost of said rental payments; provided, however, that all such amounts shall be payable therefrom only (A) after the City has (i) paid all Operations and Maintenance Costs for such fiscal year in accordance with Section 3.02 of the Installment Sale Agreements, and (ii) made all other payments required to be made under Section 3.03 of the Installment Sale Agreements for such fiscal year, and (B) so long as no Event of Default has occurred and is continuing under the Installment Sale Agreements. In the event that the foregoing conditions are not satisfied with respect to any fiscal year, such amounts shall not be payable in said fiscal year and shall be deferred to the next succeeding fiscal year in which said conditions are satisfied. The obligation of the Water Enterprise to make, or reimburse the City’s General Fund for, rental payments payable under the Lease Agreement pursuant to this Section 8 shall not be secured by a pledge on or lien on System Revenues or Net System Revenues or any other revenues or properties of the Water Enterprise Fund. Capitalized terms used in this Section 8 but not defined in this Resolution have the meanings given to such terms in the Installment Sale Agreements. Nothing in this Section 8 shall be deemed to limit the City’s obligations under the Lease Agreement, including without limitation, Section 4.04 thereof.

SECTION 9. Severability. If any section, paragraph, clause or provision of this Resolution shall for any reason be held to be invalid or unenforceable, the invalidity or RESOLUTION NO. 23:038

unenforceability of such section, paragraph, clause or provision shall not affect any of the remaining provisions of this Resolution.

SECTION 10. Repealer. All bylaws, orders and resolutions or parts thereof, inconsistent herewith, are hereby repealed to the extent only of such inconsistency with respect to this Resolution. This repealer shall not be construed as reviving any bylaw, order, resolution or ordinance or part thereof.

SECTION 11. City Clerk Certification. The City Clerk shall certify to the passage and adoption of this resolution and enter it in the book of original resolutions.

SECTION 12. Effective Date. This resolution shall take effect immediately upon its adoption.

PASSED, APPROVED, AND ADOPTED by the City Council of the City of Paramount this 12th of December 2023.

Isabel Aguayo, Mayor
ATTEST:

Heidi Luce, City Clerk
RESOLUTION NO. 23:038

A-1

APPENDIX A
Government Code Section 5852.1 Disclosure
The following information consists of estimates with respect to the Lease Agreement that have been provided by KNN Public Finance, LLC, the municipal advisor to the City, which have been represented by them to have been provided in good faith:
(A) True interest cost: 4.853508%
(B) Finance charge (sum of all fees/charges paid to third parties): $66,000.00 (C) Net proceeds to be received (net of finance charges, reserves, and capitalized interest, if any): $11,174,355.00
(D) Total payment amount through maturity: $17,946,077.72 The foregoing estimates constitute good faith estimates only. Actual amounts and other items described above may differ from such good faith estimates due to (a) the actual date of the execution and delivery of the Lease Agreement being different than the date assumed for purposes of such estimates, (b) the actual principal components of the rental payments payable under the Lease Agreement being different from the estimated amount used for purposes of such estimates, (c) the actual amortization of the principal components of the rental payments being different than the amortization assumed for purposes of such estimates, (d) other market conditions, or (d) alterations in the City’s financing plan, or a combination of such factors. The actual date of execution and delivery of the Lease Agreement and the actual principal components of the rental payments payable thereunder will be determined by the City based on the timing of the need for proceeds thereof and other factors. The actual interest rates borne by the principal components of the rental payments will depend on market interest rates at the time of sale thereof. Market interest rates are affected by economic and other factors beyond the control of the City.

Reso 23-038 ELP Agreement
2316297

EQUIPMENT LEASE/PURCHASE AGREEMENT
(ESCROW ACCOUNT)
This Equipment Lease/Purchase Agreement (this “Agreement”) dated as of December 19, 2023, and entered into by and between Banc of America Public Capital Corp, a Kansas corporation (together with its successors, assigns and transferees, and as more particularly defined herein, “Lessor”), and City of Paramount, a general law city existing under the laws of the State of California (“Lessee”).

WITNESSETH:

WHEREAS, Lessee desires to lease and acquire from Lessor certain Equipment (as such term is defined herein), subject to the terms and conditions hereof; and, WHEREAS, Lessee is authorized under the constitution and laws of the State (as such term is defined herein) to enter into this Agreement for the purposes set forth herein; NOW, THEREFORE, for good and valuable consideration, receipt and sufficiency of which are hereby acknowledged, and in consideration of the premises hereinafter contained, the parties hereby agree as follows:

ARTICLE I
Section 1.01. Definitions. The following terms will have the meanings indicated below unless the context clearly requires otherwise:
“Acquisition Amount” means $11,240,355.00. The Acquisition Amount is the amount represented by Lessee to be sufficient, together with other funds of Lessee (if any) that are legally available for the purpose of acquiring and installing the Equipment. “Acquisition Period” means the period ending five (5) business days prior to June 19, 2025.
“Agreement” means this Equipment Lease/Purchase Agreement, including the exhibits hereto, together with any amendments and modifications to this Agreement pursuant to Section 13.04.
“Code” means the Internal Revenue Code of 1986, as amended. Each reference to a Section of the Code herein shall be deemed to include the relevant United States Treasury Regulations proposed or in effect thereunder.
“Collateral” has the meaning set forth in Section 6.02. -2-
“Commencement Date” means the date when Lessee’s obligation to pay rent commences hereunder, which shall be the date on which the Acquisition Amount is deposited with the Escrow Agent.
“Contract Rate” means the rate identified as such in the Payment Schedule. “Disbursement Request” means the disbursement request attached to the Escrow Agreement as Schedule 1 and made a part thereof.
“Equipment” means the equipment, fixtures and other goods and property listed in the Equipment Schedule and all replacements, repairs, restorations, modifications and improvements thereof or thereto made pursuant to Article V or Section 8.01. Whenever reference is made in this Agreement to Equipment, such reference shall be deemed to include all such replacements, repairs, restorations, modifications and improvements of or to such Equipment. “Equipment Costs” means the total cost of the Equipment, including related soft costs such as freight, installation and taxes and other capitalizable costs, and other costs incurred in connection with the acquisition, installation and/or financing of the Equipment. “Equipment Schedule” means the Equipment Schedule attached hereto as Exhibit A and made a part hereof (including any duly authorized and executed amendments thereto). “Escrow Account” means the account established and held by the Escrow Agent pursuant to the Escrow Agreement.
“Escrow Agent” means the Escrow Agent identified in the Escrow Agreement, and its successors and assigns.
“Escrow Agreement” means the Escrow and Account Control Agreement in form and substance acceptable to and executed by Lessee, Lessor and the Escrow Agent, pursuant to which the Escrow Account is established and administered.
“Event of Default” means an Event of Default described in Section 12.01. “Event of Non-appropriation” means the failure of Lessee’s governing body to appropriate or otherwise make available funds to pay Rental Payments under this Agreement following the Original Term or then current Renewal Term sufficient for the continued performance of this Agreement by Lessee.
“Lease Term” means the Original Term and all Renewal Terms. “Lessee” means the entity referred to as Lessee in the first paragraph of this Agreement. “Lessor” means (a) the entity referred to as Lessor in the first paragraph of this Agreement and its successors or (b) any assignee or transferee of any right, title or interest of Lessor in and to this Agreement pursuant to Section 11.01 hereof, including the right, title and interest of Lessor in -3-
and to the Equipment, the Rental Payments and other amounts due hereunder, the Escrow Agreement and Escrow Account and other Collateral, but does not include any entity solely by reason of that entity retaining or assuming any obligation of Lessor to perform hereunder. “Lien” means any lien (statutory or otherwise), security interest, mortgage, deed of trust, pledge, hypothecation, assignment, deposit arrangement, encumbrance, preference, priority or other security or preferential arrangement of any kind or nature whatsoever (including, without limitation, any conditional sale or other title retention agreement, any financing lease having substantially the same economic effect as any of the foregoing and the filing of any financing statement under the Uniform Commercial Code or comparable law of any jurisdiction). “Material Adverse Change” means any change in Lessee’s creditworthiness that could have a material adverse effect on (i) the financial condition or operations of Lessee, or (ii) Lessee’s ability to perform its obligations under this Agreement. “Original Term” means the period from the Commencement Date until the end of the fiscal year of Lessee in effect at such Commencement Date.
“Outstanding Balance” means the amount that is shown for each Rental Payment Date under the column titled “Outstanding Balance” on the Payment Schedule. “Payment Schedule” means the Payment Schedule attached hereto as Exhibit B and made a part hereof.
“Prepayment Price” means the amount that is shown for each Rental Payment Date under the column titled “Prepayment Price” on the Payment Schedule. “Principal Portion” means the amount that is shown for each Rental Payment Date under the column titled “Principal Portion” on the Payment Schedule. “Project Grant” means a grant, subsidy, or other incentive that the Lessee receives for the Equipment.
“Property Owner” means each owner of any real property where any Water Meter is or will be located and any mortgagee or any other party having an interest in any Real Property where any Water Meter is or will be located and/or landlord of the real property where any Water Meter is or will be located.
“Related Documents” means this Agreement and the Escrow Agreement, each as may be amended and supplemented.
“Renewal Terms” means the consecutive renewal terms of this Agreement, the first of which commences immediately after the end of the Original Term and each having a duration and a term coextensive with each successive fiscal year of Lessee; provided that the final such Renewal Term shall commence on the first day of the last such fiscal year and end on the first business day after the last scheduled Rental Payment Date.
-4-
“Rental Payment Date” means each date on which Lessee is required to make a Rental Payment under this Agreement as specified in the Payment Schedule. “Rental Payments” means the basic rental payments payable by Lessee on the Rental Payment Dates and in the amounts as specified in the Payment Schedule, consisting of a principal component and an interest component, and in all cases sufficient to repay such principal component and interest thereon at the applicable Contract Rate (or Taxable Rate if then in effect). “Scheduled Term” means the Original Term and all scheduled Renewal Terms, with a final Renewal Term ending on December 1, 2043, as set forth in Exhibit B attached hereto. “SEC” means the U.S. Securities and Exchange Commission. “Special Counsel” means Jones Hall, A Professional Law Corporation. “Water System” means the water enterprise system facilities owned by the City of Paramount (the “City”), and all other properties, structures or works hereafter acquired and constructed by the City and determined to be a part of the Water System, together with all additions, betterments, extensions or improvements to such facilities, properties, structures or works or any part thereof hereafter acquired and constructed. “Water System Revenues” means all revenues of the Water System, including but not limited to all gross income and revenue received or receivable by the City from the ownership or operation of the Water System, including all rates, fees and charges (including connection fees and charges) received by the City for the services of the System, and all other income and revenue howsoever derived by the City from the ownership or operation of the Water System or arising from the Water System, and also including all income from the deposit or investment of any money in the Water Enterprise Fund or any rate stabilization fund and the proceeds of any taxes if any. “State” means the State of California.
“Taxable Rate” means, for each day that the interest component of Rental Payments is taxable for Federal income tax purposes, an interest rate equal to the Contract Rate plus a rate sufficient such that the total interest to be paid on any Rental Payment Date would, after such interest was reduced by the amount of any Federal, state or local income tax (including any interest, penalties or additions to tax) actually imposed thereon, equal the amount of interest otherwise due to Lessor.
“Vendor” means the manufacturer, installer or supplier of the Equipment or any other person as well as the agents or dealers of the manufacturer, installer or supplier with whom Lessee arranged Lessee’s acquisition, installation, maintenance and/or servicing of the Equipment, and includes, without limitation, Willdan Energy Solutions (“Willdan”). “Vendor Agreement” means any contract entered into by Lessee and any Vendor for the acquisition, installation, maintenance and/or servicing of the Equipment, and includes, without limitation, the Willdan Contract.
-5-
“Water Enterprise Fund” means the water enterprise fund established by the City pursuant and in which all Water System Revenues are deposited and maintained by the City. “Water Meter(s)” means the portion of Equipment consisting of any and all existing and future water meter(s) and related fixtures and/or acquired, constructed, furnished and/or installed with amounts to be disbursed pursuant to the Escrow Agreement. “Willdan Contract” means that certain Energy and Water Savings Performance Contract dated _________________, 2023 between Lessee and Willdan, as supplemented and amended pursuant to the terms thereof and hereof.

ARTICLE II
Section 2.01. Representations and Covenants of Lessee. Lessee represents, covenants and warrants for the benefit of Lessor on the date hereof as follows:
(a) Lessee is a political subdivision of the State within the meaning of Section 103(c) of the Code, duly organized and existing under the constitution and laws of the State, with full power and authority to enter into the Related Documents and the transactions contemplated thereby and to perform all of its obligations thereunder. (b) Lessee has duly authorized the execution and delivery of the Related Documents by proper action of its governing body at a meeting duly called, regularly convened and attended throughout by the requisite quorum of the members thereof, or by other appropriate official approval, and all requirements have been met and procedures have occurred in order to ensure the validity and enforceability of the Related Documents. (c) No event or condition that constitutes, or with the giving of notice or the lapse of time or both would constitute, an Event of Default exists at the date hereof. No Event of Non-appropriation has occurred or is threatened with respect to this Agreement. (d) Lessee will do or cause to be done all things necessary to preserve and keep in full force and effect its existence as a general law city of the State. (e) Lessee has complied with such procurement and public bidding requirements as may be applicable to the Related Documents and the acquisition and installation by Lessee of the Equipment.
(f) During the Lease Term, the Equipment will be used by Lessee only for the purpose of performing essential governmental or proprietary functions of Lessee consistent with the permissible scope of Lessee’s authority. Lessee does not intend to sell or otherwise dispose of the Equipment or any interest therein prior to the last Rental Payment (including all Renewal Terms) scheduled to be paid hereunder. (g) Lessee has kept, and throughout the Lease Term shall keep, its books and records in accordance with generally accepted accounting principles and practices -6-
consistently applied, and shall deliver to Lessor (i) annual audited financial statements (including (1) a balance sheet, (2) statement of revenues, expenses and changes in fund balances for budget and actual, (3) statement of cash flows, and (4) footnotes, schedules and attachments to the financial statements) within two hundred seventy (270) days after the end of its fiscal year, (ii) such other financial statements and information as Lessor may reasonably request in writing, and (iii) upon Lessor’s written request, its annual budget for any prior or current fiscal year or for the following fiscal year when approved. The financial statements described in this subsection (g)(i) shall be accompanied by an unqualified opinion of Lessee’s independent auditor. Credit information relating to Lessee may be disseminated among Lessor and any of its affiliates and any of their respective successors and assigns. (h) Lessee has an immediate need for the Equipment and expects to make immediate use of the Equipment. Lessee’s need for the Equipment is not temporary and Lessee does not expect the need for any item of the Equipment to diminish during the Scheduled Term.
(i) The payment of the Rental Payments or any portion thereof is not (under the terms of this Agreement or any underlying arrangement) directly or indirectly (x) secured by any interest in property used or to be used in any activity carried on by any person other than a state or local governmental unit or payments in respect of such property; or (y) on a present value basis, derived from payments (whether or not to Lessee) in respect of property, or borrowed money, used or to be used in any activity carried on by any person other than a state or local governmental unit. The Equipment will not be used, directly or indirectly, in any activity carried on by any person other than a state or local governmental unit. No portion of the Acquisition Amount will be used, directly or indirectly, to make or finance loans to any person other than Lessee. Except as set forth in the Willdan Contract, Lessee has not entered into any management or other service contract with respect to the use and operation of the Equipment.
(j) There is no pending litigation, tax claim, proceeding or dispute that may materially adversely affect Lessee’s financial condition or impairs its ability to perform its obligations under the Related Documents. Lessee will, at its expense, maintain its legal existence and do any further act and execute, acknowledge, deliver, file, register and record any further documents Lessor may reasonably request in order to protect Lessor’s first priority security interest in the Equipment and the Escrow Account and Lessor’s rights and benefits under the Related Documents.
(k) Reserved.
(l) No lease, rental agreement, lease-purchase agreement, payment agreement or contract for purchase to which Lessee has been a party at any time has been terminated by Lessee as a result of insufficient funds being appropriated in any fiscal year. No event has occurred which would constitute an event of default under any debt, revenue bond or obligation which Lessee has issued during the past ten (10) years. -7-
(m) Lessee represents to Lessor that it has adopted a debt policy in compliance with SB 1029 and Section 8855 of the Government Code of California et seq. and covenants that it shall comply with Section 8855 of the Government Code of California et seq. as amended (the “CDIAC Act”) throughout the Lease Term, including (i) preparing, submitting and filing the report of the proposed debt issuance relating to this Agreement by the method required by the California Debt and Investment Advisory Commission (“CDIAC”), (ii) preparing, submitting and filing the report of final sale (and accompanying documents) relating to this Agreement by the method required by CDIAC, (iii) submitting an annual report relating to the report of final sale for this Agreement by the method required by CDIAC, and (iv) paying all fees charged by CDIAC or the CDIAC Act relating to this Agreement, including, but not limited to the fee in an amount equal to one-fortieth of one percent of the Acquisition Amount or as otherwise prescribed by the CDIAC Act. (n) As of the date of execution and delivery of this Agreement, Lessee has not granted any Lien on the Collateral that would be senior in priority to, or pari passu with, the first priority Lien on the Collateral granted to Lessor under Section 6.02 of this Agreement.
(o) The street addresses affixed to the UCC-1 financing statements and fixture filings when filed and recorded pursuant to Section 3.04(vi), Section 6.01 and/or Section 6.02 hereof will be true, accurate and complete street addresses of all the properties on which the Equipment is located or to be installed. In the event any street address, other information, UCC-1 financing statement or fixture filing (or continuations or amendments thereof) filed or recorded with respect to the Lessor’s interests in the Equipment or any of the real property on which the Equipment is located or to be installed reflects any incorrect or incomplete street addresses, equipment description or other information, Lessee shall take all steps necessary (with the Lessor’s prior written approval) to promptly correct any errors or deficiencies with respect to such street address, equipment description, other information, UCC-1 financing statements and/or fixture filings and to protect Lessor’s interests in the Equipment.
(p) Lessee will pay all Equipment Costs and costs of issuance in excess of the Acquisition Amount available therefor out of its own funds. Lessor shall not have any responsibility to pay amounts for any Equipment Costs or costs of issuance with respect to the Related Documents or the Equipment that individually or collectively exceed the Acquisition Amount.
(q) Lessee has complied with California Government Code Section 4217.10 et seq. and other applicable law pertaining to the authorization of this Agreement and the financing and acquisition by the Lessee of the Equipment. (r) To the extent applicable, as determined by Lessee in its sole discretion, Lessee has complied with the requirements of California Government Code Section 5852.1 et seq. in connection with this Agreement and the Equipment. -8-
(s) In connection with the Lessee’s compliance with any continuing disclosure undertakings (each, a “Continuing Disclosure Agreement”) entered into by the Lessee pursuant to SEC Rule 15c2-12 promulgated pursuant to the Securities and Exchange Act of 1934, as amended (the “Rule”), the Lessee may be required to file with the Municipal Securities Rulemaking Board’s Electronic Municipal Market Access system, or its successor (“EMMA”), notice of its incurrence of its obligations under the Related Documents and notice of any accommodation, waiver, amendment, modification of terms or other similar events reflecting financial difficulties in connection with the Related Documents, in each case including posting a full copy thereof or a description of the material terms thereof (each such posting, an “EMMA Posting”). Except to the extent required by applicable law, including the Rule, the Lessee shall not file or submit or permit the filing or submission of any EMMA Posting that includes the following unredacted confidential information about the Lessor or its affiliates and the Escrow Agent in any portion of such EMMA Posting: address, account information and logos of the Lessor or its affiliates and the Escrow Agent; e-mail addresses, telephone numbers, fax numbers, names and signatures of officers, employees and signatories of the Lessor or its affiliates and the Escrow Agent; and the form of Disbursement Request that is attached to the Escrow Agreement.

The Lessee acknowledges and agrees that the Lessor and its affiliates are not responsible for the Lessee’s or any other entity’s (including, but not limited to, any broker-dealer’s) compliance or noncompliance (or any claims, losses or liabilities arising therefrom) with the Rule, any Continuing Disclosure Agreement or any applicable securities or other laws, including but not limited to those relating to the Rule. (t) The portion of the Equipment that is or will consist of one or more Water Meters is and will be located within a utility easement that is dedicated to Lessee or right-of-way that is dedicated to public use for a period that is longer than the Lease Term.

Lessee is entitled to the benefit and use of such utility easement or right-of-way for the Water Meters and has good and marketable title to the Water Meters and Equipment relating thereto. There exists no mortgage, pledge, lien, security interest, charge or other encumbrance of any nature whatsoever on or with respect to the Water Meters, except under this Agreement. In connection with Lessor’s remedies to obtain possession pursuant to Section 12.02 of the portion of the Equipment that is or will consist of Water Meters, Lessee has the authority to enter upon the premises where items of such Water Meters and Equipment are located for the purpose of disconnecting, de-installing and removing such Water Meters and other Equipment from such premises. Upon an Event of Non-appropriation or an Event of Default, Lessee shall upon Lessor’s written request enter upon the premises where items of such Water Meters and other Equipment are located for the purpose of disconnecting, de-installing and removing such Water Meters and items of Equipment from such premises and returning the same to Lessor pursuant to Section 3.03 and Section 12.02.

All Water Meters are to be installed within the political jurisdiction of Lessee.

Lessee has obtained, or will have obtained prior to disbursement from the Escrow Account for the related Equipment, all necessary licenses, permits, approvals or other -9-
authorizations, if any, issued by any applicable governmental authority or the Property Owner with respect to the Water Meters for the specific locations for the Equipment to be installed.

ARTICLE III
Section 3.01. Lease of Equipment. Subject to the terms and conditions of this Agreement, Lessor agrees to provide the Acquisition Amount to acquire the Equipment. Lessor hereby demises, leases and transfers to Lessee, and Lessee hereby acquires, rents and leases from Lessor, the Equipment. The Lease Term may be continued, solely at the option of Lessee, at the end of the Original Term or any Renewal Term for the next succeeding Renewal Term up to the maximum Scheduled Term as set forth in the Payment Schedule. At the end of the Original Term and at the end of each Renewal Term until the maximum Scheduled Term has been completed, Lessee shall be deemed to have exercised its option to continue this Agreement for the next Renewal Term unless Lessee shall have terminated this Agreement pursuant to Section 3.03 or Section 10.01 of this Agreement. The terms and conditions during any Renewal Term shall be the same as the terms and conditions during the Original Term, except that the Rental Payments shall be as provided in the Payment Schedule.

Section 3.02. Continuation of Lease Term. Lessee intends, subject to Section 3.03 hereof, to continue the Lease Term through the Original Term and all Renewal Terms and to pay the Rental Payments due hereunder. Lessee affirms that sufficient funds are legally available to pay all Rental Payments when due during the current fiscal year, and Lessee reasonably believes that an amount sufficient to make all Rental Payments during the entire Scheduled Term can be obtained from legally available funds of Lessee. Lessee further intends to do all things lawfully within its power to obtain and maintain funds sufficient and available to discharge its obligation to make Rental Payments due hereunder, including making provision for such payments to the extent necessary in each budget or appropriation request submitted and adopted in accordance with applicable provisions of law. Notwithstanding the foregoing, the decision whether or not to budget and appropriate funds or to extend the Lease Term for any Renewal Term is within the sole discretion of the governing body of Lessee.

Section 3.03. Non-appropriation. Lessee is obligated only to pay such Rental Payments as may lawfully be made during Lessee’s then current fiscal year from funds budgeted and appropriated for that purpose. Should Lessee fail to budget, appropriate or otherwise make available funds to pay Rental Payments following the then current Original Term or Renewal Term, this Agreement shall be automatically terminated at the end of the then current Original Term or Renewal Term. Lessee agrees to deliver notice to Lessor of such termination promptly after any decision to non-appropriate is made, but failure to give such notice shall not extend the term beyond such Original Term or Renewal Term. If this Agreement is terminated in accordance with this Section 3.03, Lessee agrees to cease use of the Equipment and peaceably remove and deliver to Lessor, at Lessee’s sole expense (from legally available funds), the Equipment to Lessor at the location(s) to be specified by Lessor.
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Section 3.04. Conditions to Lessor’s Performance. (a) As a prerequisite to the performance by Lessor of any of its obligations under this Agreement, Lessee shall deliver to Lessor, in form and substance satisfactory to Lessor, the following:
(i) An Escrow Agreement substantially in the form attached hereto as Exhibit I, satisfactory to Lessor and executed by Lessee and the Escrow Agent and a Vendor Agreement satisfactory to Lessor and executed by Lessee and the Vendor; (ii) A certified copy of a resolution, ordinance or other official action of Lessee’s governing body, substantially in the form attached hereto as Exhibit C-1 (or, in each case, such other form satisfactory to the City Attorney and Special Counsel), authorizing the execution and delivery of this Agreement and the Escrow Agreement and performance by Lessee of its obligations under this Agreement and the Escrow Agreement; (iii) A Certificate completed and executed by the City Clerk of Lessee, substantially in the form attached hereto as Exhibit C-2, completed to the satisfaction of Lessor;
(iv) Opinions of Special Counsel and City Attorney to Lessee, which in the aggregate opine on the matters set forth in the form attached hereto as Exhibit D and which are otherwise satisfactory to Lessor;
(v) Evidence of insurance as required by Section 7.02 hereof; (vi) All documents, including financing statements, affidavits, notices and similar instruments which Lessor deems necessary or appropriate at that time pursuant to Section 6.02 hereof;
(vii) Reserved;
(viii) Reserved;
(ix) A copy of the Form 8038-G, fully completed by Special Counsel as paid preparer and executed by Lessee;
(x) In the event that Lessee is to be reimbursed for expenditures that it has paid more than sixty (60) days prior to the Commencement Date, evidence of the adoption of a reimbursement resolution or other official action covering the reimbursement from tax-exempt proceeds of expenditures incurred not more than sixty (60) days prior to the date of such resolution;
(xi) Copies of invoices (and proofs of payment of such invoices, if Lessee seeks reimbursement) and bills of sale (if title to Equipment has passed to Lessee), to the extent required by Section 5.01(b) hereof;
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(xii) Wire instructions for payments to be made to Vendors and Form W-9 from each such Vendor;
(xiii) A certified copy of any Surety Bond satisfying the conditions set forth in Section 7.04 hereof, or, at Lessor’s sole discretion, such Surety Bonds may be provided after the Commencement Date, provided however, that no “Disbursement Request” pursuant to the Escrow Agreement (other than for costs of issuance) shall be authorized by Lessor until such Surety Bonds satisfying the conditions set forth in Section 7.04 have been delivered to Lessor; and
(xiv) Such other items reasonably required by Lessor.
(b) In addition to satisfaction of the conditions set forth in subsection (a) of this Section 3.04, the performance by Lessor of any of its obligations under the Related Documents shall be subject to: (i) no Material Adverse Change having occurred since the date of this Agreement, (ii) no Event of Default having occurred and then be continuing and (iii) no Event of Non-appropriation having occurred or being threatened with respect to this Agreement. (c) Subject to satisfaction of the foregoing, Lessor will deposit the Acquisition Amount with the Escrow Agent to be held and disbursed pursuant to the Escrow Agreement.

Section 3.05. Evidence of Filing Form 8038-G. As soon as it is available, Lessee shall provide to Lessor evidence that it, or its paid preparer, has filed the Form 8038-G for this Agreement with the Internal Revenue Service by delivering to Lessor proof of mailing such Form 8038-G. Notwithstanding anything to the contrary in this Agreement, it shall not be an Event of Default hereunder if Lessee does not provide to Lessor evidence that it (or its paid preparer) filed the Form 8038-G for this Agreement with the Internal Revenue Service.

ARTICLE IV
Section 4.01. Rental Payments. Subject to Section 3.03 of this Agreement, Lessee shall promptly pay Rental Payments, in lawful money of the United States of America, to Lessor on the Rental Payment Dates and in such amounts as provided in the Payment Schedule. If any Rental Payment or other amount payable hereunder is not paid within ten (10) days of its due date, Lessee shall pay an administrative late charge of five percent (5%) of the amount not timely paid or the maximum amount permitted by law, whichever is less. Lessee shall not permit the Federal Government to guarantee any Rental Payments under this Agreement. Rental Payments consist of principal and interest components as more fully detailed on the Payment Schedule, the interest on which begins to accrue as of the Commencement Date.

Section 4.02. Interest and Principal Components. A portion of each Rental Payment is paid as, and represents payment of, interest, and the balance of each Rental Payment is paid as, and represents payment of, principal as more fully detailed on the Payment Schedule.

Section 4.03. Rental Payments to Constitute a Current Expense of Lessee. Lessor and Lessee understand and intend that the obligation of Lessee to pay Rental Payments shall constitute -12-
a current expense of Lessee payable solely from its general fund or other funds that are legally available for that purpose and shall not in any way be construed to be a debt of Lessee in contravention of any applicable constitutional or statutory limitation or requirement concerning the creation of indebtedness by Lessee, nor shall anything contained herein constitute a pledge of the general tax revenues, funds or moneys of Lessee.

Section 4.04. Rental Payments to be Unconditional. Except as provided in Section 3.03 of this Agreement, the obligations of Lessee to make Rental Payments and to perform and observe the other covenants and agreements contained in this Agreement shall be absolute and unconditional in all events without abatement, diminution, deduction, set-off or defense, for any reason, including without limitation any failure of the Equipment, disputes with the Lessor or the Vendor of any Equipment, any defects, malfunctions, breakdowns or infirmities in the Equipment or any accident, condemnation or unforeseen circumstances, or failure of any Vendor to deliver any Equipment or otherwise perform any of its obligations for whatever reason, including bankruptcy, insolvency, reorganization or any similar event with respect to any Vendor or under any Vendor Agreement, or the failure or inability (for whatever reason) of Lessee to receive (or delay in receipt of) any direct payments or reimbursement from the Water Enterprise Fund or all or any portion of the Project Grant or any refundable tax credit under Section 6417 of the Internal Revenue Code of 1986, as amended by the Inflation Reduction Act of 2022 (Pub. L. No. 117-169), or any substantially similar provision of federal, state, local or foreign tax or other law (including regulations or other guidance from any taxing or other authority).

Section 4.05. Tax Covenants. Lessee agrees that it will not take any action that would cause the interest component of Rental Payments to be or to become ineligible for the exclusion from gross income of the owner or owners thereof for Federal income tax purposes, nor will it omit to take or cause to be taken, in a timely manner, any action, which omission would cause the interest component of Rental Payments to be or to become ineligible for the exclusion from gross income of the owner or owners thereof for Federal income tax purposes. In connection with the foregoing, Lessee hereby agrees that (a) so long as any Rental Payments remain unpaid, moneys on deposit in the Escrow Account shall not be used in a manner that will cause this Agreement to be classified as an “arbitrage bond” within the meaning of Section 148(a) of the Code; and (b) Lessee shall rebate, from funds legally available for the purpose, an amount equal to excess earnings on the Escrow Account to the Federal Government if required by, and in accordance with, Section 148(f) of the Code, and make the determinations and maintain the records required by the Code.

Section 4.06. Event of Taxability. Upon the occurrence of an Event of Taxability, the interest component of Rental Payments and any charge on Rental Payments or other amounts payable based on the Contract Rate shall have accrued and be payable at the Taxable Rate retroactive to the date as of which the interest component is determined by the Internal Revenue Service to be includible in the gross income of the owner or owners thereof for Federal income tax purposes (which retroactive date shall be the earliest date as of which the interest component of any Rental Payment is deemed includible in the gross income of the owner or owners thereof for Federal income tax purposes, which may be earlier than the date of delivery of such determination by the Internal Revenue Service), and Lessee will pay such additional amount as will result in the owner receiving the interest component at the Taxable Rate. -13-
For purposes of this Section, “Event of Taxability” means the circumstance of the interest component of any Rental Payment paid or payable pursuant to this Agreement becoming includible for Federal income tax purposes in an owner’s gross income as a consequence of any act, omission or event whatsoever, including but not limited to the matters described in the immediately succeeding sentence, and regardless of whether the same was within or beyond the control of Lessee. An Event of Taxability shall be presumed to have occurred upon (a) the receipt by Lessor or Lessee of an original or a copy of an Internal Revenue Service Technical Advice Memorandum or Statutory Notice of Deficiency or other written correspondence which legally holds that the interest component of any Rental Payment is includable in the gross income of the owner thereof; (b) the issuance of any public or private ruling of the Internal Revenue Service that the interest component of any Rental Payment is includable in the gross income of the owner thereof; or (c) receipt by Lessor or Lessee of a written opinion of a nationally recognized firm of attorneys experienced in matters pertaining to the tax-exempt status of interest on obligations issued by states and their political subdivisions, selected by Lessor and acceptable to Lessee, to the effect that the interest component of any Rental Payment has become includable in the gross income of the owner thereof for Federal income tax purposes. For all purposes of this definition, an Event of Taxability shall be deemed to occur on the date as of which the interest component of any Rental Payment is deemed includable in the gross income of the owner thereof for Federal income tax purposes.

Section 4.07. Mandatory Prepayment. (a) Any funds not applied to Equipment Costs and remaining in the Escrow Account on the earliest of (i) the expiration of the Acquisition Period, (ii) the date on which Lessee delivers to the Lessor the executed Disbursement Request to effect the final disbursement to pay (or reimburse) Equipment Costs from the Escrow Account or (iii) a termination of the Escrow Account as provided in the Escrow Agreement shall be applied by Lessor on each successive Rental Payment Date thereafter to pay all or a portion of the Rental Payment due and owing in the succeeding twelve (12) months and any remaining amounts shall be applied by Lessor as prepayment to the applicable unpaid Principal Portion of Rental Payments owing hereunder in the inverse order of the Rental Payment Dates at a price of 100% of such prepaid Principal Portion plus accrued interest thereon to the prepayment date. (b) In connection with any partial prepayment of Rental Payments, Lessor shall prepare a new Payment Schedule and deliver the same to the Lessee, which shall be binding, absent manifest error.

ARTICLE V
Section 5.01. Acquisition, Delivery, Installation and Acceptance of Equipment. (a) Lessee shall order the Equipment to be acquired and financed hereunder, cause the Equipment to be delivered and installed at the location specified in the Equipment Schedule and pay any and all delivery and installation costs and other Equipment Costs in connection therewith. Lessee shall conduct such inspection and testing of the Equipment as it deems necessary and appropriate in order to determine the Equipment’s capability and functionality in order to accept such Equipment.

When the Equipment has been delivered and installed, Lessee shall promptly accept such Equipment and evidence said acceptance by executing and delivering Disbursement Requests to -14-
the Lessor pursuant to the Escrow Agreement for the purpose of effecting disbursements from the Escrow Account to pay (or reimburse) Equipment Costs for the Equipment so acquired and installed. In connection with the execution and delivery by Lessee to Lessor of the final Disbursement Request, Lessee shall deliver to Lessor a “Final Acceptance Certificate” in the form attached hereto as Exhibit E.
(b) Lessee shall deliver to Lessor together with each Disbursement Request copies of invoices (and proof of payment of such invoices if Lessee seeks reimbursement for prior expenditures) and bills of sale or other evidence of title transfer to Lessee relating to each item of Equipment accepted by Lessee as evidenced by such Disbursement Request. Once approved, Lessor shall deliver such Disbursement Request to the Escrow Agent for disbursement from the Escrow Account in accordance with the Escrow Agreement.

Section 5.02. Quiet Enjoyment of Equipment. So long as no Event of Default and no Event of Non-appropriation have occurred, neither Lessor nor any entity claiming by, through or under Lessor, shall interfere with Lessee’s quiet use and enjoyment of the Equipment during the Lease Term.

Section 5.03. Location; Inspection. Once installed, no item of the Equipment will be moved or relocated from the location specified for it in the Equipment Schedule without Lessor’s prior written consent, which consent shall not be unreasonably withheld. Lessor shall have the right at all reasonable times during regular business hours to enter into and upon the property where the Equipment is located for the purpose of inspecting the Equipment.

Section 5.04. Use and Maintenance of the Equipment. Lessee shall not install, use, operate or maintain the Equipment (or cause the Equipment to be installed, used, operated or maintained) improperly, carelessly, in violation of any applicable law or in a manner contrary to that contemplated hereby. Lessee shall provide all permits and licenses, if any, necessary for the installation and operation of the Equipment. In addition, Lessee agrees to comply in all respects with all applicable laws, regulations and rulings of any legislative, executive, administrative, or judicial body, including, without limitation, all anti-money laundering laws and regulations; provided that Lessee may contest in good faith the validity or application of any such law, regulation or ruling in any reasonable manner that does not, in the opinion of Lessor, adversely affect the interest of Lessor in and to the Equipment or its interest or rights hereunder.

Lessee agrees that it shall (a) maintain, preserve, and keep the Equipment in good repair and working order, in a condition comparable to that recommended by the manufacturer; (b) proceed promptly, at its expense, to protect its rights and exercise its remedies under any warranty then in effect with respect to the Equipment; and (c) replace or rebuild any component of the Equipment that becomes permanently unfit for normal use or inoperable during the Lease Term (herein, the “Inoperable Component”) in order to keep the Equipment as a whole in good repair and working order during the Lease Term. Lessee shall promptly notify Lessor in writing when any component of the Equipment is reasonably expected within forty-five (45) days to become an Inoperable Component. Lessee shall promptly replace or rebuild the Inoperable Component with a similar component of comparable or improved make and model that has at least the equivalent value and utility of the Inoperable Component, a remaining useful life of no less -15-
than the remaining Scheduled Term and such replacement or rebuilt component shall be in good operating condition. Lessor shall have no responsibility to maintain, repair or make improvements or additions to the Equipment. In all cases, Lessee agrees to pay any costs necessary for the manufacturer to re-certify the Equipment as eligible for manufacturer’s maintenance upon the return of the Equipment to Lessor as provided for in Sections 3.03 and 12.02(b) of this Agreement.

Lessee shall not alter any item of Equipment or install any accessory, equipment or device on an item of Equipment if that would impair any applicable warranty, the originally intended function or the value of that Equipment. All repairs, parts, accessories, equipment and devices furnished, affixed to or installed on any Equipment, excluding temporary replacements, shall thereupon become subject to the security interest of Lessor.

ARTICLE VI
Section 6.01. Title to the Equipment. During the Lease Term, so long as no Event of Default and no Event of Non-appropriation have occurred, all right, title and interest in and to each item of the Equipment shall be vested in Lessee immediately upon the earlier of installation or payment for each item of Equipment, subject to the terms and conditions hereof. Lessee shall at all times protect and defend, at its own cost and expense, its title, and Lessor’s first priority security interest, in and to the Equipment (and Lessor’s other Collateral as defined in Section 6.02 hereof) from and against all claims, Liens and legal processes of its creditors, and keep all Equipment (and such other Collateral) free and clear of all such claims, Liens and processes.

Lessee will, at its expense, do any further act and execute, acknowledge, deliver, file, register and record any further documents the Lessor may reasonably request in order to protect Lessor’s first priority security interest in the Collateral. Upon the occurrence of an Event of Default or upon termination of this Agreement pursuant to Section 3.03 hereof, full and unencumbered legal title to the Equipment shall, at Lessor’s option, pass to Lessor, and Lessee shall have no further interest therein. In addition, upon the occurrence of such an Event of Default or such termination, Lessee shall execute and deliver to Lessor such documents as Lessor may request to evidence the passage of such legal title to Lessor and the termination of Lessee’s interest therein, and upon request by Lessor shall deliver possession of the Equipment to Lessor in accordance with Section 3.03 or

12.02 of this Agreement, as applicable. Upon payment of all amounts due and owing hereunder by Lessee in accordance with Section 10.01 hereof, Lessor’s security interest or other interest in the Equipment shall terminate, and Lessor shall execute and deliver to Lessee such documents as Lessee may reasonably request to evidence the termination of Lessor’s security interest in the Equipment.

Section 6.02. Security Interest. As additional security for the payment and performance of all of Lessee’s obligations hereunder, Lessee hereby grants to Lessor a first priority security interest constituting a first Lien on (a) the Equipment, together with all replacements, repairs, restorations, modifications and improvements thereof or thereto and all accessories, equipment, parts and appurtenances appertaining or attached to any of the Equipment, and all substitutions, renewals, or replacements of and additions, improvements, accessions and accumulations to any and all of such Equipment, together with all the rents, issues, income, profits, proceeds and avails therefrom, (b) moneys and investments held from time to time in the Escrow Account, (c) all accounts, chattel paper, deposit accounts, documents, instruments, general intangibles and -16-
investment property (including any securities accounts and security entitlements relating thereto) evidenced by or arising out of or otherwise relating to the foregoing collateral described in clauses (a) and (b) above, as such terms are defined in Article 9 of the California Commercial Code, and (d) any and all proceeds of any and all of the foregoing, including, without limitation, insurance proceeds (collectively, the “Collateral”). Lessee authorizes Lessor to file (and Lessee agrees to execute, if applicable) such notices of assignment, chattel mortgages, financing statements and other documents, in form satisfactory to Lessor, which Lessor deems necessary or appropriate to establish and maintain Lessor’s security interest in the Collateral, including, without limitation, such financing statements with respect to personal property and fixtures under Article 9 of the California Commercial Code and treating such Article 9 as applicable to entities such as Lessee.

Section 6.03. Personal Property, No Encumbrances. Lessee agrees that the Equipment is deemed to be and will remain personal property, and will not be deemed to be affixed to or a part of the real estate on which it may be situated, notwithstanding that the Equipment or any part thereof may be or hereafter become in any manner physically affixed or attached to real estate or any building thereon.

ARTICLE VII
Section 7.01. Liens, Taxes, Other Governmental Charges and Utility Charges. Lessee shall keep the Equipment free of all levies, Liens, and encumbrances except those created by this Agreement. The parties to this Agreement contemplate that the Equipment will be used for a governmental or proprietary purpose of Lessee and that the Equipment will therefore be exempt from all property taxes. If the lease, sale, purchase, operation, use, possession or acquisition of any Equipment is nevertheless determined to be subject to taxation, Lessee shall pay when due all sales and other taxes, special assessments, governmental and other charges of any kind that are at any time lawfully assessed or levied against or with respect to the Equipment, the Rental Payments or any part of either thereof, or which become due during the Lease Term, whether assessed against Lessee or Lessor. Lessee shall pay all utility and other charges incurred in the operation, use and maintenance of the Equipment. Lessee shall pay such taxes, assessments or charges as the same may become due; provided that, with respect to any such taxes, assessments or charges that may lawfully be paid in installments over a period of years, Lessee shall be obligated to pay only such installments as accrue during the Lease Term. Lessor will not claim ownership of the Equipment under this Agreement for the purposes of any tax credits, benefits or deductions with respect to such Equipment. Lessee shall pay the fee charged by the California Debt and Investment Advisory Commission with respect to this Agreement pursuant to Section 8856 (or any successor provision) of the California Government Code.

Section 7.02. Insurance. Lessee shall during the Lease Term maintain or cause to be maintained (a) casualty insurance naming Lessor and its assigns as loss payee and insuring the Equipment against loss or damage by fire and all other risks covered by the standard extended coverage endorsement then in use in the State, and any other risks reasonably required by Lessor, in an amount at least equal to the greater of (i) the then applicable Prepayment Price or (ii) the replacement cost of the Equipment; (b) liability insurance naming Lessor and its assigns as additional insured that protects Lessor from liability with limits of at least $5,000,000 per occurrence for bodily injury and property damage coverage (such liability insurance coverage may -17-
be in a combination of primary general liability and/or excess liability umbrella coverage), and in all events under clauses (a) and (b) above issued in form and amount satisfactory to Lessor and by an insurance company that is authorized to do business in the State and having a financial strength rating by A.M. Best Company of “A-” or better; and (c) worker’s compensation coverage as required by the laws of the State. Notwithstanding the foregoing, Lessee may self-insure against the risks described in clauses (a) and/or (b) through a government pooling arrangement, self-funded loss reserves, risk retention program or other self-insurance program, in each case with Lessor’s prior written consent (which Lessor may grant, withhold or deny in its sole discretion) and provided that Lessee has delivered to Lessor such information as Lessor may request with respect to the adequacy of such self-insurance to cover the risks proposed to be self-insured and otherwise in form and substance acceptable to Lessor. In the event Lessee is permitted, at Lessor’s sole discretion, to self-insure as provided in this Section 7.02, Lessee shall provide to Lessor a self-insurance letter in substantially the form attached hereto as Exhibit F. Lessee shall furnish to Lessor evidence of such insurance or self-insurance coverage throughout the Lease Term. Lessee shall not cancel or modify such insurance or self-insurance coverage in any way that would affect the interests of Lessor without first giving written notice thereof to Lessor at least thirty (30) days in advance of such cancellation or modification.

Section 7.03. Risk of Loss. Whether or not covered by insurance or self-insurance, Lessee hereby assumes all risk of loss of, or damage to and liability related to injury or damage to any persons or property arising from the Equipment from any cause whatsoever, and no such loss of or damage to or liability arising from the Equipment shall relieve Lessee of the obligation to make the Rental Payments or to perform any other obligation under this Agreement. Whether or not covered by insurance or self-insurance, Lessee hereby agrees to reimburse Lessor (to the fullest extent permitted by applicable law, but only from legally available funds) for any and all liabilities, obligations, losses, costs, claims, taxes or damages suffered or incurred by Lessor, regardless of the cause thereof (except to the extent caused by Lessor’s own gross negligence or willful misconduct) and all expenses incurred in connection therewith (including, without limitation, counsel fees and expenses, and penalties connected therewith imposed on interest received) arising out of or as a result of (a) entering into this Agreement or any of the transactions contemplated hereby, (b) the ordering, acquisition, ownership use, operation, condition, purchase, delivery, acceptance, rejection, storage or return of any item of the Equipment, (c) any accident in connection with the operation, use, condition, possession, storage or return of any item of the Equipment resulting in damage to property or injury to or death to any person, and/or (d) the breach of any covenant of Lessee under or in connection with this Agreement or any material misrepresentation provided by Lessee under or in connection with this Agreement. The provisions of this Section 7.03 shall continue in full force and effect notwithstanding the full payment of all obligations under this Agreement or the termination of the Lease Term for any reason.

Section 7.04. Surety Bonds; Lessee to Pursue Remedies Against Contractors and Sub-Contractors and Their Sureties. Lessee shall secure from each Vendor directly employed by Lessee in connection with the acquisition, construction, installation, improvement or equipping of the Equipment, a payment and performance bond (“Surety Bond”) executed by a surety company authorized to do business in the State, having a financial strength rating by A.M. Best Company of “A-” or better, and otherwise satisfactory to Lessor and naming Lessor as a co-obligee in a sum equal to the entire amount to become payable under each Vendor Agreement. Each bond shall be -18-
conditioned on the completion of the work in accordance with the plans and specifications for the Equipment and upon payment of all claims of subcontractors and suppliers. Lessee shall cause the surety company to add Lessor as a co-obligee on each Surety Bond, and shall deliver a certified copy of each Surety Bond to Lessor promptly upon receipt thereof by Lessee. Any proceeds from a Surety Bond shall be applied in accordance with such Surety Bond to the payment and performance of the Vendor’s obligations in accordance with the related Vendor Agreement and, if for whatever reason such proceeds are not so applied, first to amounts due Lessor under this Agreement, and any remaining amounts shall be payable to Lessee.

In the event of a material default by any Vendor under any Vendor Agreement in connection with the acquisition, construction, maintenance and/or servicing of the Equipment or in the event of a material breach of warranty with respect to any material workmanship or performance guaranty with respect to the Equipment, Lessee will promptly proceed to exhaust its remedies against the Vendor in default. Lessee shall advise Lessor of the steps it intends to take in connection with any such default. Any amounts received by Lessee in respect of damages, refunds, adjustments or otherwise in connection with the foregoing shall be paid to Lessor and applied against Lessee’s obligations hereunder.

Section 7.05. Advances. In the event Lessee shall fail to keep the Equipment in good repair and working order or shall fail to maintain any insurance required by Section 7.02 hereof, Lessor may, but shall be under no obligation to, maintain and repair the Equipment or obtain and maintain any such insurance coverages, as the case may be, and pay the cost thereof. All amounts so advanced by Lessor shall constitute additional rent for the then current Original Term or Renewal Term and Lessee covenants and agrees to pay such amounts so advanced by Lessor with interest thereon from the due date until paid at a rate equal to the Contract Rate (or the Taxable Rate if then in effect) plus five percent (5%) per annum or the maximum amount permitted by law, whichever is less.

ARTICLE VIII
Section 8.01. Damage, Destruction and Condemnation. If, prior to the termination of the Lease Term, (a) the Equipment or any portion thereof is destroyed, in whole or in part, or is damaged by fire or other casualty or (b) title to, or the temporary use of, the Equipment or any part thereof shall be taken under the exercise or threat of the power of eminent domain by any governmental body or by any person, firm or corporation acting pursuant to governmental authority, (i) Lessee and Lessor will cause the Net Proceeds of any insurance claim or condemnation award or sale under threat of condemnation to be applied to the prompt replacement, repair, restoration, modification or improvement of the Equipment or such part thereof and any balance of the Net Proceeds remaining after such work has been completed shall be paid to Lessee or (ii) Lessee shall exercise its option to prepay the obligations hereunder in accordance with Section 10.01(a)(iii) hereof.

If Lessee elects to replace any item of the Equipment (the “Replaced Equipment”) pursuant to this Section 8.01, the replacement equipment (the “Replacement Equipment”) shall be new or of a quality, type, utility and condition at least as good as the Replaced Equipment, shall be of equal or greater value than the Replaced Equipment and shall provide at least the same level of -19-
energy and/or operational savings expected in the aggregate from the Replaced Equipment prior to such casualty, destruction or condemnation and shall have an expected remaining useful life at least through the Scheduled Term. Lessee shall grant to Lessor a first priority security interest in any such Replacement Equipment. Lessee shall represent, warrant and covenant to Lessor that each item of Replacement Equipment is free and clear of all claims, Liens, security interests and encumbrances, excepting only those Liens created by or through Lessor, and shall provide to Lessor any and all documents as Lessor may reasonably request in connection with the replacement, including, but not limited to, documentation in form and substance satisfactory to Lessor evidencing Lessor’s security interest in the Replacement Equipment. Lessor and Lessee hereby acknowledge and agree that any Replacement Equipment acquired pursuant to this paragraph shall constitute “Equipment” for purposes of this Agreement. Lessee shall complete the documentation of Replacement Equipment on or before the next Rental Payment Date after the occurrence of a casualty event, or be required to exercise its option to prepay the obligations hereunder with respect to the damaged Equipment in accordance with Section 10.01(a)(iii) hereof.

For purposes of this Article VIII, the term “Net Proceeds” shall mean the amount remaining from the gross proceeds of any insurance claim or condemnation award or sale under threat of condemnation after deducting all expenses, including attorneys’ fees, incurred in the collection thereof.

Section 8.02. Insufficiency of Net Proceeds. If the Net Proceeds are insufficient to pay in full the cost of any repair, restoration, modification or improvement referred to in Section 8.01, Lessee shall either (a) complete such replacement, repair, restoration, modification or improvement and pay any costs thereof in excess of the amount of the Net Proceeds, or (b) pay or cause to be paid to Lessor the amount of the then applicable Prepayment Price plus all other amounts then owing hereunder, and, upon such payment, the Lease Term shall terminate and Lessor’s security interest in the Equipment shall terminate as provided in Section 6.01 hereof. The amount of the Net Proceeds remaining, if any, after completing such repair, restoration, modification or improvement or after paying such Prepayment Price plus all other amounts then owing hereunder shall be retained by Lessee. If Lessee shall make any payments pursuant to this Section 8.02, Lessee shall not be entitled to any reimbursement therefor from Lessor nor shall Lessee be entitled to any diminution of the amounts payable under Article IV.

ARTICLE IX
Section 9.01. Disclaimer of Warranties. Lessor makes no warranty or representation, either express or implied, as to the value, design, condition, merchantability or fitness for particular purpose or fitness for use of any of the Equipment, or any other warranty or representation, express or implied, with respect thereto and, as to Lessor, Lessee’s acquisition of the Equipment shall be on an “as is” basis. In no event shall Lessor be liable for any incidental, indirect, special or consequential damage in connection with or arising out of this Agreement, the Equipment or the existence, furnishing, functioning or Lessee’s use of any item, product or service provided for in this Agreement.

Section 9.02. Vendor Agreements; Warranties. Lessee covenants that it shall not in any material respect amend, modify, rescind or alter any Vendor Agreement without the prior written -20-
consent of Lessor. Lessor hereby irrevocably appoints Lessee its agent and attorney-in-fact during the Lease Term, so long as no Event of Default and no Event of Non-appropriation have occurred, to assert from time to time whatever claims and rights (including without limitation warranties) relating to the Equipment that Lessor may have against a Vendor. Lessee’s sole remedy for the breach of such warranty, indemnification or representation shall be against the applicable Vendor of the Equipment, and not against Lessor. Any such matter shall not have any effect whatsoever on the rights and obligations of Lessor under this Agreement, including the right to receive full and timely Rental Payments and other payments hereunder. Lessee expressly acknowledges that Lessor makes, and has made, no representations or warranties whatsoever as to the existence or the availability of such warranties relating to any of the Equipment.

ARTICLE X
Section 10.01. Prepayment; Payment in Full.
(a) Prepayment. Lessee shall have the option to prepay or satisfy all, but not less than all, of its obligations hereunder, at the following times and upon the following terms:
(i) Optional Prepayment from Grant or Other Proceeds. For a period of three (3) years from the Commencement Date, upon not less than forty-five (45) days prior written notice, Lessee may prepay, using proceeds of the Project Grant (the nature and type of which Lessee describes to Lessor in such notice), up to $__________ of the Principal Portion of the Rental Payments due hereunder, without premium, at a price equal to the Principal Portion of the Rental Payments to be prepaid plus accrued interest thereon at the Contract Rate (or the Taxable Rate if then in effect) to the date of such prepayment. The Principal Portion of such partial prepayment shall be applied by Lessor to the applicable unpaid Principal Component of Rental Payments owing hereunder, either in the inverse order of the Rental Payment Dates or on a pro rata basis, at the option of the Lessee. In connection with any partial prepayment of Rental Payments, Lessor shall prepare a new Payment Schedule and deliver the same to the Lessee, which shall be binding, absent manifest error; or
(ii) Optional Prepayment in Whole. From and after the date specified (if any) in the Payment Schedule (the “Prepayment Option Commencement Date”), on the Rental Payment Dates specified in the Payment Schedule, upon not less than thirty (30) days prior written notice, and upon payment in full of the sum of all Rental Payments then due plus the then applicable Prepayment Price, which shall include a prepayment premium on the unpaid Outstanding Balance as set forth in the Payment Schedule plus all other amounts then owing hereunder; or
(iii) Casualty or Condemnation Prepayment. In the event of substantial damage to or destruction or condemnation of substantially all of the Equipment, on the day specified in Lessee’s notice to Lessor of its exercise of the prepayment option (which shall be the earlier of the next Rental Payment Date or sixty (60) days after the casualty event) upon payment in full to Lessor of (A) in the event such prepayment occurs on a Rental Payment Date, the sum of (i) all Rental Payments then due plus (ii) the then applicable -21-
Prepayment Price plus (iii) all other amounts then owing hereunder OR, (B) in the event such prepayment occurs on a date other than a Rental Payment Date, the sum of (i) the applicable Prepayment Price shown on the Payment Schedule for the Rental Payment Date immediately preceding the applicable date of such prepayment (or if the date of such prepayment occurs prior to the first Rental Payment Date, the earliest Prepayment Price shown on the Payment Schedule) plus (ii) accrued interest at the Contract Rate (or the Taxable Rate if then in effect) on the Outstanding Balance as of the Rental Payment Date immediately preceding the applicable date of such prepayment from such Rental Payment Date (or if the date of such prepayment occurs prior to the first Rental Payment Date, the Commencement Date) to the date of such prepayment plus (iii) all other amounts then owing hereunder.
(b) Payment in Full. Lessor’s security interests in and to the Equipment will be terminated and Lessee will own such Equipment free and clear of Lessor’s security interest in such Equipment, after either (i) payment of the applicable Prepayment Price and all other amounts then owing hereunder in accordance with either Section 10.01(a)(ii) or Section 10.01(a)(iii) of this Agreement or (ii) upon the expiration of the Scheduled Term and payment in full of all Rental Payments then due and all other amounts then owing hereunder in accordance with this Agreement.

Notwithstanding anything herein to the contrary, no portion of Lessor’s security interests in and to the Equipment or other Collateral will be terminated in connection with any partial prepayment pursuant to Section 10.01(a)(i) of this Agreement.

ARTICLE XI
Section 11.01. Assignment by Lessor. (a) Lessor’s right, title and interest in and to this Agreement, the Rental Payments and any other amounts payable by Lessee hereunder, the Escrow Agreement, its security interest in the Collateral (collectively, the “Assigned Rights”), may be assigned and reassigned by Lessor at any time, in whole or in part, to one or more assignees or sub-assignees without the necessity of obtaining the consent of Lessee; provided, that any such assignment, transfer or conveyance (i) shall be made only to investors each of whom Lessor reasonably believes is a “qualified institutional buyer” as defined in Rule 144A(a)(1) promulgated under the Securities Act of 1933, as amended, or an “accredited investor” as defined in Section 501(a)(1), (2), (3) or (7) of Regulation D promulgated under the Securities Act of 1933, as amended, and in either case is purchasing the Assigned Rights (or any interest therein) for its own account with no present intention to resell or distribute such Assigned Rights (or interest therein), subject to each investor’s right at any time to dispose of the Assigned Rights (or any interest therein) as it determines to be in its best interests, (ii) shall not result in more than 35 owners of the Assigned Rights or the creation of any interest in the Assigned Rights in an aggregate principal component that is less than $100,000 and (iii) shall not require Lessee to make Rental Payments, to send notices or otherwise to deal with respect to matters arising hereunder or under the Escrow Agreement with or to more than one Lease Servicer (as such term is defined below), and any trust agreement, participation agreement or custodial agreement under which multiple ownership interests in the Assigned Rights are created shall provide the method by which the owners of such interests shall establish the rights and duties of a single entity, trustee, owner, servicer or other fiduciary or agent acting on behalf of all of the assignees (herein referred to as the “Lease Servicer”) to act on their behalf with respect to the Assigned Rights, including with -22-
respect to the exercise of rights and remedies of Lessor on behalf of such owners upon the occurrence of an Event of Default or an Event of Non-appropriation under this Agreement. Lessor and Lessee hereby acknowledge and agree that the restrictions and limitations on transfer as provided in this Section 11.01 shall apply to the first and subsequent assignees and sub-assignees of any of the Assigned Rights (or any interest therein). (b) Unless to an affiliate controlling, controlled by or under common control with Lessor, no assignment, transfer or conveyance permitted by this Section 11.01 shall be effective as against Lessee until Lessee shall have received a written notice of assignment that discloses the name and address of each such assignee; provided, that if such assignment is made to a bank or trust company as trustee or paying agent for owners of certificates of participation, participation interests, trust certificates or partnership interests with respect to the Rental Payments payable under this Agreement, it shall thereafter be sufficient that Lessee receives notice of the name and address of the bank, trust company or other entity that acts as the Lease Servicer. Notices of assignment provided pursuant to this Section 11.01(b) shall contain a confirmation of compliance with the transfer requirements imposed by Section 11.01(a) hereof. During the Lease Term, Lessee shall keep, or cause to be kept, a complete and accurate record of all such assignments in form necessary to comply with Section 149 of the Code. Lessee shall retain all such notices as a register of all assignees and shall make all payments to the assignee or assignees or Lease Servicer last designated in such register. Lessee shall not have the right to and shall not assert against any assignee any claim, counterclaim or other right Lessee may have against Lessor or the Vendor.

Assignments in part may include without limitation assignment of all of Lessor’s security interest in and to the Equipment and all rights in, to and under this Agreement related to such Equipment, and all of Lessor’s security interest in and to the Collateral, or all rights in, to and under the Escrow Agreement.
(c) If Lessor notifies Lessee of its intent to assign this Agreement, Lessee agrees that it shall execute and deliver to Lessor a Notice and Acknowledgement of Assignment substantially in the form of Exhibit H attached hereto within five (5) business days after its receipt of such request.

Section 11.02. Assignment and Subleasing by Lessee. None of Lessee’s right, title, and interest in, to and under this Agreement or any portion of the Equipment, the Escrow Agreement, the Escrow Account or any of the other Collateral may be assigned, encumbered or subleased by Lessee for any reason, and any purported assignment, encumbrance or sublease without Lessor’s prior written consent shall be null and void.

ARTICLE XII
Section 12.01. Events of Default Defined. Any of the following events shall constitute an “Event of Default” under this Agreement:
(a) Failure by Lessee to (i) pay any Rental Payment or other payment required to be paid under this Agreement within ten (10) days after the date when due as specified herein, (ii) maintain insurance as required herein, or (iii) observe and perform any -23-
covenant, condition or agreement on its part to be observed or performed under Section 6.01 or 6.02 hereof;
(b) Failure by Lessee to observe and perform any covenant, condition or agreement contained in this Agreement on its part to be observed or performed, other than as referred to in subsection (a) above, for a period of thirty (30) days after written notice specifying such failure and requesting that it be remedied is given to Lessee by Lessor, unless Lessor shall agree in writing to an extension of such time prior to its expiration; provided that, if the failure stated in the notice cannot be corrected within the applicable period, Lessor will not unreasonably withhold its consent to an extension of such time if corrective action is instituted by Lessee within the applicable period and diligently pursued until the default is corrected;
(c) Any statement, representation or warranty made by Lessee in or pursuant to this Agreement or its execution, delivery or performance shall prove to have been false, incorrect, misleading, or breached in any material respect on the date when made; (d) Any payment default occurs under any other agreement for borrowing money, lease financing of property or otherwise receiving credit under which Lessee is an obligor, if such payment default (i) arises under any other agreement for borrowing money, lease financing of property or provision of credit provided by Lessor or any affiliate of Lessor, or (ii) arises under any obligation under which there is outstanding, owing or committed an aggregated amount in excess of $500,000.00; (e) Lessee shall (i) apply for or consent to the appointment of a receiver, trustee, custodian or liquidator of Lessee, or of all or a substantial part of the assets of Lessee, (ii) be unable, fail or admit in writing its inability generally to pay its debts as they become due, (iii) make a general assignment for the benefit of creditors, (iv) have an order for relief entered against it under applicable Federal bankruptcy law, or (v) file a voluntary petition in bankruptcy or a petition or an answer seeking reorganization or an arrangement with creditors or taking advantage of any insolvency law or any answer admitting the material allegations of a petition filed against Lessee in any bankruptcy, liquidation, readjustment, reorganization, moratorium or insolvency proceeding;
(f) An order, judgment or decree shall be entered by any court of competent jurisdiction, approving a petition or appointing a receiver, trustee, custodian or liquidator for Lessee or of all or a substantial part of the assets of Lessee, in each case without its application, approval or consent, and such order, judgment or decree shall continue unstayed and in effect for any period of thirty (30) consecutive days; or (g) Any utility easement or right of way providing Lessee access to any Water Meter(s) and relating to any Equipment shall be canceled, terminated, suspended, revoked or otherwise not in full force and effect at any time during the Lease Term. -24-
Section 12.02. Remedies on Default. Whenever any Event of Default exists, Lessor shall have the right, at its sole option without any further demand or notice, to take one or any combination of the following remedial steps:
(a) By written notice to Lessee, Lessor may declare all Rental Payments payable by Lessee and other amounts payable by Lessee hereunder to the end of the then current Original Term or Renewal Term to be immediately due and payable; (b) With or without terminating the Lease Term, Lessor may enter the premises where the Equipment is located and retake possession of such Equipment or require Lessee at Lessee’s expense to promptly return any or all of such Equipment to the possession of Lessor at such place within the United States as Lessor shall specify, and sell or lease such Equipment or, for the account of Lessee, sublease such Equipment, continuing to hold Lessee liable, but solely from legally available funds, for the difference between (i) the Rental Payments payable by Lessee and other amounts hereunder that are payable by Lessee to the end of the then current Original Term or Renewal Term, as the case may be, and (ii) the net proceeds of any such sale, leasing or subleasing (after deducting all expenses of Lessor in exercising its remedies hereunder, including without limitation all expenses of taking possession, storing, reconditioning and selling or leasing such Equipment and all brokerage, auctioneer’s and attorney’s fees), subject, however, to the provisions of Section 3.03 of this Agreement. The exercise of any such remedies respecting any such Event of Default shall not relieve Lessee of any other liabilities hereunder or with respect to the Equipment;
(c) Lessor may terminate the Escrow Agreement and apply any proceeds in the Escrow Account to the Rental Payments scheduled to be paid hereunder; and/or (d) Lessor may take whatever action at law or in equity as may appear necessary or desirable to enforce its rights under this Agreement or the Escrow Agreement or as a secured party in any or all of the Equipment or the Escrow Account.

Section 12.03. No Remedy Exclusive. No remedy herein conferred upon or reserved to Lessor is intended to be exclusive and every such remedy shall be cumulative and shall be in addition to every other remedy given hereunder now or hereafter existing at law or in equity. No delay or omission to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver thereof, but any such right or power may be exercised from time to time and as often as may be deemed expedient. In order to entitle Lessor to exercise any remedy reserved to it in this Article XII it shall not be necessary to give any notice other than such notice as may be required in this Article XII.

ARTICLE XIII
Section 13.01. Notices. All notices, certificates or other communications under this Agreement shall be sufficiently given and shall be deemed given when delivered or mailed by registered mail, postage prepaid, or delivered by overnight courier, or sent by facsimile transmission (with electronic confirmation) to the parties hereto at the addresses immediately after -25-
the signatures to this Agreement (or at such other address as either party hereto shall designate in writing to the other for notices to such party) and to any assignee at its address as it appears on the registration books maintained by Lessee.

Section 13.02. Binding Effect. This Agreement shall inure to the benefit of and shall be binding upon Lessor and Lessee and their respective successors and assigns.

Section 13.03. Severability. In the event any provision of this Agreement shall be held invalid or unenforceable by any court of competent jurisdiction, such holding shall not invalidate or render unenforceable any other provision hereof.

Section 13.04. Amendments, Changes and Modifications. This Agreement may only be amended by Lessor and Lessee in writing.

Section 13.05. Execution in Counterparts. This Agreement may be simultaneously executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument; provided, that only Counterpart No. 1 of this Agreement shall constitute chattel paper for purposes of the applicable Uniform Commercial Code.

Section 13.06. Applicable Law; Venue; Waiver of Jury Trial. This Agreement shall be governed by and construed in accordance with the laws of the State. The parties hereto consent and submit to the jurisdiction of the State and venue in any state or Federal court of such State for the purposes of any suit, action or other proceeding arising in connection with this Agreement, and each party expressly waives any objections that it may have to the venue of such courts. The parties hereto expressly waive any right to trial by jury in any action brought on or with respect to this Agreement. If the waiver of jury trial contained herein is unenforceable for any reason, then the parties hereto agree that the court shall, and is hereby directed to, make a general reference pursuant to California Code of Civil Procedure Section 638 to a referee to hear and determine all of the issues in such action or proceeding (whether of fact or of law) and to report a statement of decision.

Section 13.07. Captions. The captions or headings in this Agreement are for convenience only and in no way define, limit or describe the scope or intent of any provisions or sections of this Agreement.

Section 13.08. No Advisory or Fiduciary Relationship. In connection with all aspects of each transaction contemplated by this Agreement (including in connection with any amendment, waiver or other modification hereof or of any other related document), the Lessee acknowledges and agrees that: (a) (i) the transactions regarding this Agreement provided by the Lessor and any affiliate thereof are arm’s-length commercial transactions between the Lessee, on the one hand, and the Lessor and its affiliates, on the other hand, (ii) the Lessee has consulted its own legal, accounting, regulatory and tax advisors to the extent it has deemed appropriate, and (iii) the Lessee is capable of evaluating, and understands and accepts, the terms, risks and conditions of the transactions contemplated by this Agreement and by the other related documents; (b) (i) the Lessor and its affiliates each is and has been acting solely as a principal and, except as expressly agreed in writing by the relevant parties, has not been, is not, and will not be acting as an advisor, agent -26-
or fiduciary, for the Lessee, or any other person and (ii) neither the Lessor nor any of its affiliates has any obligation to the Lessee with respect to the transactions contemplated by this Agreement except those obligations expressly set forth herein and in the other related documents; and (c) the Lessor and its affiliates may be engaged in a broad range of transactions that involve interests that differ from those of the Lessee, and neither the Lessor nor any of its affiliates has any obligation to disclose any of such interests to the Lessee. To the fullest extent permitted by law, the Lessee, hereby waives and releases any claims that it may have against the Lessor or any of its affiliates with respect to any breach or alleged breach of agency or fiduciary duty in connection with any aspect of any transactions contemplated by this Agreement.

Section 13.09. Entire Agreement. The parties agree that this Agreement constitutes the final and entire agreement between the parties superseding all conflicting terms or provisions of any prior proposals, term sheets, solicitation documents, requests for proposals, award notices, approval letters or any other agreements or understandings between the parties.

Section 13.10. Electronic Signatures. The Related Documents may be executed and delivered by facsimile signature or other electronic or digital means (including, without limitation, Adobe’s Portable Document Format (“PDF”)). Any such signature shall be of the same force and effect as an original signature, it being the express intent of the parties to create a valid and legally enforceable contract between them. The exchange and delivery of the Related Documents and the related signature pages via facsimile or as an attachment to electronic mail (including in PDF) shall constitute effective execution and delivery by the parties and may be used by the parties for all purposes. Notwithstanding the foregoing, at the request of either party, the parties hereto agree to exchange inked original replacement signature pages as soon thereafter as reasonably practicable. [Remainder of Page Intentionally Left Blank]
[Signature Page Follows]
[Signature Page of Equipment Lease/Purchase Agreement]
IN WITNESS WHEREOF, Lessor and Lessee have caused this Equipment Lease/Purchase Agreement to be executed in their names by their duly authorized representatives as of the date first above written.

LESSOR: LESSEE:

BANC OF AMERICA PUBLIC CAPITAL CORP CITY OF PARAMOUNT
11333 McCormick Road
Hunt Valley II
M/C MD5-031-06-05
Hunt Valley, MD 21031
Attention: Contract Administration
Fax No.: (443) 541-3057
16400 Colorado Ave.

Paramount, CA 90723
Attention: Kim Sao, Finance Director
Telephone: (562) 220-2207
Fax No.: ________________
Email: [email protected]
By:________________________________
Name: __________________________
Title: ___________________________
By:________________________________
Name: __________________________
Title: ___________________________
Counterpart No. _____ of _____ manually executed and serially numbered counterparts.

To the extent that this Agreement constitutes chattel paper (as defined in the applicable Uniform Commercial Code), no security interest or ownership herein may be created through the transfer or possession of any Counterpart other than Counterpart No. 1.

LIST OF EXHIBITS
EXHIBIT A — Form of Equipment Schedule
EXHIBIT B — Form of Payment Schedule
EXHIBIT C-1 — Form of Authorizing Resolution
EXHIBIT C-2 — Form of Incumbency and Authorization Certificate EXHIBIT D — Form of Opinion of Lessee’s Counsel
EXHIBIT E — Form of Final Acceptance Certificate
EXHIBIT F — Form of Self-Insurance Certificate
EXHIBIT G — Reserved
EXHIBIT H — Form of Notice and Acknowledgement of Assignment EXHIBIT I — Form of Escrow and Account Control Agreement

EXHIBIT A

EQUIPMENT SCHEDULE
Location of Equipment:

Equipment Description (Scope of Work):

EXHIBIT B

PAYMENT SCHEDULE
RENTAL

PAYMENT
DATE
RENTAL

PAYMENT
AMOUNT

INTEREST

PORTION

PRINCIPAL

PORTION

OUTSTANDING

BALANCE

PREPAYMENT
PRICE
(including
prepayment
premium, if
applicable)
12/19/23 $11,240,355.00
12/1/24 $ 626,843.40 $ 518,860.43 $ 107,982.97 11,132,372.03 $11,355,019.47 6/1/25 270,460.99 270,460.99 0.00 11,132,372.03 11,355,019.47 12/1/25 635,716.99 270,460.99 365,256.00 10,767,116.03 10,982,458.35 6/1/26 261,587.10 261,587.10 0.00 10,767,116.03 10,982,458.35 12/1/26 645,032.10 261,587.10 383,445.00 10,383,671.03 10,591,344.45 6/1/27 252,271.30 252,271.30 0.00 10,383,671.03 10,591,344.45 12/1/27 654,812.30 252,271.30 402,541.00 9,981,130.03 10,180,752.63 6/1/28 242,491.57 242,491.57 0.00 9,981,130.03 10,180,752.63 12/1/28 665,079.57 242,491.57 422,588.00 9,558,542.03 9,749,712.87 6/1/29 232,224.79 232,224.79 0.00 9,558,542.03 9,749,712.87 12/1/29 675,856.79 232,224.79 443,632.00 9,114,910.03 9,297,208.23 6/1/30 221,446.75 221,446.75 0.00 9,114,910.03 9,297,208.23 12/1/30 687,171.75 221,446.75 465,725.00 8,649,185.03 8,822,168.73 6/1/31 210,131.96 210,131.96 0.00 8,649,185.03 8,822,168.73 12/1/31 699,049.96 210,131.96 488,918.00 8,160,267.03 8,323,472.37 6/1/32 198,253.70 198,253.70 0.00 8,160,267.03 8,323,472.37 12/1/32 711,519.70 198,253.70 513,266.00 7,647,001.03 7,799,941.05 6/1/33 185,783.90 185,783.90 0.00 7,647,001.03 7,799,941.05 12/1/33 724,610.90 185,783.90 538,827.00 7,108,174.03 7,250,337.51 6/1/34 172,693.10 172,693.10 0.00 7,108,174.03 7,250,337.51 12/1/34 738,353.10 172,693.10 565,660.00 6,542,514.03 6,673,364.31 6/1/35 158,950.39 158,950.39 0.00 6,542,514.03 6,673,364.31 12/1/35 752,780.39 158,950.39 593,830.00 5,948,684.03 6,067,657.71 6/1/36 144,523.29 144,523.29 0.00 5,948,684.03 6,067,657.71 12/1/36 767,926.29 144,523.29 623,403.00 5,325,281.03 5,431,786.65 6/1/37 129,377.71 129,377.71 0.00 5,325,281.03 5,431,786.65 12/1/37 783,825.71 129,377.71 654,448.00 4,670,833.03 4,764,249.69 6/1/38 113,477.90 113,477.89 0.01 4,670,833.02 4,764,249.68 12/1/38 800,517.90 113,477.89 687,040.01 3,983,793.01 4,063,468.87 6/1/39 96,786.26 96,786.26 0.00 3,983,793.01 4,063,468.87 12/1/39 818,040.26 96,786.26 721,254.00 3,262,539.01 3,327,789.79 6/1/40 79,263.39 79,263.39 0.00 3,262,539.01 3,327,789.79 12/1/40 836,436.39 79,263.39 757,173.00 2,505,366.01 2,555,473.33 -2-
RENTAL

PAYMENT
DATE
RENTAL

PAYMENT
AMOUNT

INTEREST

PORTION

PRINCIPAL

PORTION

OUTSTANDING

BALANCE

PREPAYMENT
PRICE
(including
prepayment
premium, if
applicable)
6/1/41 60,867.87 60,867.87 0.00 2,505,366.01 2,555,473.33 12/1/41 855,747.87 60,867.87 794,880.00 1,710,486.01 1,744,695.73 6/1/42 41,556.26 41,556.26 0.00 1,710,486.01 1,744,695.73 12/1/42 876,021.26 41,556.26 834,465.00 876,021.01 893,541.43 6/1/43 21,282.93 21,282.93 0.00 876,021.01 893,541.43
12/1/43 897,303.93 21,282.92 876,021.01 - -
TOTAL $17,946,077.72 $6,705,722.72 $11,240,355.00
Contract Rate. The Contract Rate is 4.859% per annum.

Prepayment Option Commencement Date. For purposes of Section 10.01 of the Agreement, the Prepayment Option Commencement Date is December 1, 2024. [Signature Page to Payment Schedule]
LESSOR: LESSEE:

BANC OF AMERICA PUBLIC CAPITAL CORP CITY OF PARAMOUNT
By:________________________________
Name: __________________________
Title: ___________________________
By:________________________________
Name: __________________________
Title: ___________________________
EXHIBIT C-1

FORM OF AUTHORIZING RESOLUTION

A RESOLUTION OF THE GOVERNING BODY OF THE CITY OF

PARAMOUNT AUTHORIZING THE EXECUTION AND DELIVERY OF AN

EQUIPMENT LEASE/PURCHASE AGREEMENT WITH RESPECT TO THE

ACQUISITION, FINANCING AND LEASING OF CERTAIN EQUIPMENT FOR THE PUBLIC BENEFIT WITHIN THE TERMS PROVIDED HEREIN;

AUTHORIZING THE EXECUTION AND DELIVERY OF DOCUMENTS
REQUIRED IN CONNECTION THEREWITH; AND AUTHORIZING THE

TAKING OF ALL OTHER ACTIONS NECESSARY TO THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED BY THIS RESOLUTION.

WHEREAS, the City of Paramount (the “Lessee”), a city duly organized and existing as a political subdivision, municipal corporation or similar public entity of the State of California, is authorized by the laws of the State of California to acquire, finance and lease personal property for the benefit of the Lessee and its inhabitants and to enter into contracts with respect thereto; and WHEREAS, the Lessee desires to acquire, finance and lease certain equipment with a cost not to exceed $__________ constituting personal property necessary for the Lessee to perform essential governmental functions (the “Equipment”); and WHEREAS, in order to acquire such Equipment, the Lessee proposes to enter into that certain Equipment Lease/Purchase Agreement (the “Agreement”) with Banc of America Public Capital Corp (or one of its affiliates), as lessor, (the “Lessor”), the form of which has been presented to the governing body of the Lessee at this meeting; and WHEREAS, the governing body of the Lessee deems it for the benefit of the Lessee and for the efficient and effective administration thereof to enter into the Agreement and the other documentation relating to the acquisition, financing and leasing of the Equipment to be therein described on the terms and conditions therein and herein provided; NOW, THEREFORE, Be It And It Is Hereby Resolved by the governing body of the Lessee as follows:

Section 1. Findings and Determinations. It is hereby found and determined that the terms of the Agreement, in the form presented to the governing body of Lessee at this meeting, are in the best interests of the Lessee for the acquisition, financing and leasing of the Equipment.

Section 2. Approval of Documents. The form, terms and provisions of the Agreement are hereby approved in substantially the forms presented at this meeting, with such insertions, omissions and changes as shall be approved by the __________________ [insert title of officials] of the Lessee or other members of the governing body of the Lessee executing (in writing or electronically) the same, the execution of such documents being conclusive evidence of such approval; and the _________________________ of the Lessee is hereby authorized and directed C-1-2
to execute (in writing or electronically), and the ________________ of the Lessee is hereby authorized and directed to attest, the Agreement and any related Exhibits attached thereto and to deliver the Agreement (including such Exhibits) to the respective parties thereto, and the ________________________ of the Lessee is hereby authorized to affix the seal of the Lessee to such documents.

Section 3. Other Actions Authorized. The officers and employees of the Lessee shall take all action necessary or reasonably required by the parties to the Agreement to carry out, give effect to and consummate the transactions contemplated thereby (including the execution (in writing or electronically) and delivery of a Final Acceptance Certificate, an Escrow Agreement, Disbursement Requests and any tax certificate and agreement, as contemplated in the Agreement) and to take all action necessary in conformity therewith, including, without limitation, the execution (in writing or electronically) and delivery of any closing and other documents required to be delivered in connection with the Agreement.

Section 4. No General Liability. Nothing contained in this Resolution, the Agreement, the Escrow Agreement nor any other instrument shall be construed with respect to the Lessee as incurring a pecuniary liability or charge upon the general credit of the Lessee or against its taxing power, nor shall the breach of any agreement contained in this Resolution, the Agreement, the Escrow Agreement or any other instrument or document executed in connection therewith impose any pecuniary liability upon the Lessee or any charge upon its general credit or against its taxing power, except to the extent that the Rental Payments payable under the Agreement are limited obligations of the Lessee, subject to annual appropriation, as provided in the Agreement.

Section 5. Appointment of Authorized Lessee Representatives. The ___________ _____________________ and __________________________ of the Lessee are each hereby designated to act as authorized representatives of the Lessee for purposes of the Agreement and the Escrow Agreement until such time as the governing body of the Lessee shall designate any other or different authorized representative for purposes of the Agreement or the Escrow Agreement.

Section 6. Severability. If any section, paragraph, clause or provision of this Resolution shall for any reason be held to be invalid or unenforceable, the invalidity or unenforceability of such section, paragraph, clause or provision shall not affect any of the remaining provisions of this Resolution.

Section 7. Repealer. All bylaws, orders and resolutions or parts thereof, inconsistent herewith, are hereby repealed to the extent only of such inconsistency with respect to this Resolution. This repealer shall not be construed as reviving any bylaw, order, resolution or ordinance or part thereof.

Section 8. Effective Date. This Resolution shall be effective immediately upon its approval and adoption.

C-1-3
ADOPTED AND APPROVED by the governing body of the Lessee this ________ day of _________.

CITY OF PARAMOUNT, as Lessee
[SEAL]
By:____________________________________
Printed Name: ________________________
Title: _______________________________
Attest:

By:_________________________________
Printed Name: _____________________
Title: ____________________________
C-1-4
The undersigned, a duly elected or appointed and acting City Clerk of the Lessee identified in the above Resolution No. ___ (the “Resolution”), hereby certifies that the Resolution is a full, true and correct copy of such Resolution as adopted by the governing body of the Lessee on ____________, 20__. The Resolution is in full force and effect on the date hereof and has not been amended, modified or otherwise changed by the governing body of the Lessee since the date of adoption of the Resolution.

Dated this ____ day of ____________, 20__.
_______________________________________
Name: _________________________________
Title: __________________________________
EXHIBIT C-2

FORM OF INCUMBENCY AND AUTHORIZATION CERTIFICATE
The undersigned, a duly elected or appointed and acting City Clerk of the City of Paramount (“Lessee”) certifies as follows:

A. The following listed persons are duly elected or appointed and acting officials of Lessee (the “Officials”) in the capacity set forth opposite their respective names below and the facsimile signatures below are true and correct as of the date hereof; B. The Officials are duly authorized, on behalf of Lessee, to negotiate, execute, in writing or electronically, and deliver the Equipment Lease/Purchase Agreement dated as of December 19, 2023 by and between Lessee and Banc of America Public Capital Corp (“Lessor”), the Escrow and Account Control Agreement dated as of December 19, 2023 by and among Lessor, Lessee and Wilmington Trust, National Association, as Escrow Agent, all documents related thereto and delivered in connection therewith (collectively, the “Operative Agreements”), and the Operative Agreements each are the binding and authorized agreements of Lessee, enforceable in all respects in accordance with their respective terms.

NAME OF OFFICIAL TITLE SIGNATURE
_____________________ _____________________ _____________________ _____________________ _____________________ _____________________ _____________________ _____________________ _____________________ Dated: December 19, 2023 By:____________________________________ Name: ______________________________
Title: _______________________________
(The signer of this Certificate cannot be listed above as authorized to execute the Operative Agreements.)

EXHIBIT D

FORM OF OPINION OF COUNSEL TO LESSEE
(TO BE TYPED ON LETTERHEAD OF COUNSEL)
[Closing Date]
Banc of America Public Capital Corp
11333 McCormick Road
Mail Code: MD5-031-06-05
Hunt Valley, MD 21031
Attn: Contract Administration
Re: Equipment Lease/Purchase Agreement,
dated as of December 19, 2023,
by and between
Banc of America Public Capital Corp, as Lessor,
and the City of Paramount, as Lessee
Ladies and Gentlemen:

As legal counsel to the City of Paramount (“Lessee”), I have examined (a) an executed counterpart of that certain Equipment Lease/Purchase Agreement, dated as of December 19, 2023, and Exhibits thereto by and between Banc of America Public Capital Corp (“Lessor”) and Lessee (the “Agreement”), which, among other things, provides for the lease of certain property (the “Equipment”) and a certain Escrow and Account Control Agreement dated as of December 19, 2023 by and among Lessor, Lessee, and Wilmington Trust, National Association as Escrow Agent (the “Escrow Agreement”), (b) an executed counterpart of the ordinances or resolutions of Lessee with respect to authorization of the transaction contemplated by the Agreement, the Escrow Agreement and documents related thereto and (c) such other opinions, documents and matters of law as I have deemed necessary in connection with the following opinions. The Agreement, the Escrow Agreement, and the documents relating thereto are herein collectively referred to as the “Transaction Documents”.

Based on the foregoing, I am of the following opinions:

1. Lessee is a general law city, duly organized and existing under the laws of the State, and is a political subdivision of the State within the meaning of Section 103(c) of the Internal Revenue Code of 1986, as amended (the “Code”) and the obligations of Lessee under the Agreement will constitute an obligation of Lessee within the meaning of Section 103(a) of the Code, notwithstanding Section 103(b) of the Code.

D-2

2. Lessee has the requisite power and authority to lease and acquire the Equipment and to execute and deliver the Transaction Documents and to perform its obligations under the Transaction Documents.

3. The Transaction Documents have been duly authorized, approved, executed and delivered by and on behalf of Lessee and the Transaction Documents are legal, valid and binding obligations of Lessee, enforceable against Lessee in accordance with their respective terms, except to the extent limited by state and federal law affecting creditor’s remedies and by bankruptcy, reorganization, moratorium or other laws of general application relating to or affecting the enforcement of creditors’ rights.

4. The authorization, approval, execution and delivery of the Transaction Documents and all other proceedings of Lessee relating to the transactions contemplated thereby have been performed in accordance with all open meeting laws, procurement and public bidding laws and all other applicable State or Federal laws.

5. There is no proceeding pending or threatened in any court or before any governmental authority or arbitration board or tribunal that, if adversely determined, would adversely affect the transactions contemplated by the Transaction Documents or the security interest of Lessor or its assigns, as the case may be, in the Equipment, the Escrow Account or other Collateral thereunder.

6. The portion of Rental Payments designated as interest is excluded from gross income for Federal income tax purposes under Section 103 of the Code and is exempt from State of California personal income taxes; and such interest is not a specific item of tax preference for purposes of the federal alternative minimum tax.

All capitalized terms herein shall have the same meanings as in the Transaction Documents unless otherwise provided herein. Lessor and its successors and assigns are entitled to rely on this opinion.

Sincerely,

EXHIBIT E

FORM OF FINAL ACCEPTANCE CERTIFICATE
Banc of America Public Capital Corp
11333 McCormick Road
Mail Code: MD5-031-06-05
Hunt Valley, MD 21031
Attn: Contract Administration
Re: Equipment Lease/Purchase Agreement,
dated as of December 19, 2023,
by and between
Banc of America Public Capital Corp, as Lessor, and
the City of Paramount, as Lessee
Ladies and Gentlemen:

In accordance with the above-referenced Equipment Lease/Purchase Agreement (the “Agreement”), the undersigned Lessee hereby certifies and represents to, and agrees with Lessor as follows:

1. All of the Equipment has been delivered, installed, is operating in a manner consistent with the manufacturer’s intended use and has been inspected and finally accepted for all purposes by Lessee and title thereto has transferred to Lessee and any security interest of Vendor therein has been released.

2. Lessee has conducted such inspection and/or testing of the Equipment as it deems necessary and appropriate in order to determine the Equipment’s capability and functionality in order to accept such Equipment and hereby acknowledges that it accepts the Equipment for all purposes.

3. Lessee is currently maintaining the insurance coverage required by Section 7.02 of the Agreement.

4. Lessee hereby reaffirms that the representations, warranties and covenants contained in the Agreement are true and correct as of the date hereof.

5. No event or condition that constitutes, or with notice or lapse of time, or both, would constitute, an Event of Default exists at the date hereof.

6. No Material Adverse Change has occurred since the date of the execution and delivery of the Agreement.

E-2

7. No Event of Non-appropriation has occurred or been threatened.

Capitalized terms used, but not defined, in this Final Acceptance Certificate shall have the same meanings as when such terms are used in the Agreement.

Date: ____________________-
LESSEE:

CITY OF PARAMOUNT
By:____________________________________
Name: ______________________________
Title: _______________________________
(SEAL)

EXHIBIT F

FORM OF SELF INSURANCE CERTIFICATE
Banc of America Public Capital Corp
11333 McCormick Road
Mail Code: MD5-031-06-05
Hunt Valley, MD 21031
Attn: Contract Administration
Re: Equipment Lease/Purchase Agreement,
dated as of December 19, 2023, (the “Agreement”)
by and between
Banc of America Public Capital Corp, as Lessor,
and the City of Paramount, as Lessee
In connection with the above-referenced Agreement, the City of Paramount (the “Lessee”) hereby warrants and represents to Banc of America Public Capital Corp the following information.

The terms capitalized herein but not defined herein shall have the meanings assigned to them in the Agreement.

1. The Lessee is self-insured for damage or destruction to the Equipment. The dollar amount limit for property damage to the Equipment under such self-insurance program is $_________________. [The Lessee maintains an umbrella insurance policy for claims in excess of Lessee’s self-insurance limits for property damage to the Equipment which policy has a dollar limit for property damage to the Equipment under such policy of $__________________.]

2. The Lessee is self-insured for liability for injury or death of any person or damage or loss of property arising out of or relating to the condition or operation of the Equipment. The dollar limit for such liability claims under the Lessee’s self-insurance program is $_________________. [The Lessee maintains an umbrella insurance policy for claims in excess of Lessee’s self-insurance limits for liability which policy has a dollar limit for liabilities for injury and death to persons as well as damage or loss of property arising out of or relating to the condition or operation of the Equipment in the amount of $_________________.]
[3]. The Lessee maintains a self-insurance fund. Monies in the self-insurance fund [are/are not] subject to annual appropriation. The total amount maintained in the self-insurance fund to cover Lessee’s self-insurance liabilities is $_________________. [Amounts paid from the Lessee’s self-insurance fund are subject to a dollar per claim of $__________________.] [3]. The Lessee does not maintain a self-insurance fund. The Lessee obtains funds to pay claims for which it has self-insured from the following sources: ___________________________.

F-2
Amounts payable for claims from such sources are limited as follows:
_________________________________________

4. Attached hereto are copies of certificates of insurance with respect to policies maintained by Lessee.

LESSEE:

CITY OF PARAMOUNT
By:____________________________________
Name: ______________________________
Title: _______________________________

EXHIBIT G

RESERVED

EXHIBIT H

FORM OF NOTICE AND ACKNOWLEDGEMENT OF ASSIGNMENT
Dated ____________________
Banc of America Public Capital Corp (“Assignor”) hereby gives notice that it has assigned and sold to _________________________ (“Assignee”) all of Assignor’s right, title and interest in, to and under the Equipment Lease/Purchase Agreement dated as of December 19, 2023 (the “Agreement”), by and between Assignor and the City of Paramount (“Lessee”), together with all exhibits, schedules, addenda and attachments related thereto, and all certifications and other documents delivered in connection therewith, the Rental Payments and other amounts due under the Agreement, all of Assignor’s right, title and interest in the Equipment (as defined in the Agreement), and all of Assignor’s right, title and interest in, to and under the Escrow and Account Control Agreement dated as of December 19, 2023 (the “Escrow Agreement”) by and among Lessee, Assignor and Wilmington Trust, National Association, as Escrow Agent, together with the Escrow Account and other Collateral (collectively, the “Assigned Property”). Each capitalized term used but not defined herein has the meaning set forth in the Agreement.

1. Lessee hereby acknowledges the effect of the assignment of the Assigned Property and absolutely and unconditionally agrees to deliver to Assignee all Rental Payments and other amounts coming due under the Agreement in accordance with the terms thereof on and after the date of this Acknowledgment.

2. Lessee hereby agrees that: (i) Assignee shall have all the rights of Lessor under the Agreement and all related documents, including, but not limited to, the rights to issue or receive all notices and reports, to give all consents or agreements to modifications thereto, to receive title to the Equipment in accordance with the terms of the Agreement, to declare a default and to exercise all rights and remedies thereunder in connection with the occurrence of an Event of Non-appropriation or an Event of Default; and (ii) [except as provided in Section 3.03 of the Agreement,] the obligations of Lessee to make Rental Payments and to perform and observe the other covenants and agreements contained in the Agreement shall be absolute and unconditional in all events without abatement, diminution, deduction, set-off or defense.

3. Lessee agrees that, as of the date of this Notice and Acknowledgment of Assignment (this “Acknowledgement”), the following information about the Agreement is true, accurate and complete:

Number of Rental Payments Remaining ________________
Amount of Each Rental Payment $_______________
Total Amount of Rental Payments
Remaining $_______________
Frequency of Rental Payments ________________
Next Rental Payment Due ________________
Funds Remaining in Escrow Account $_______________
H-2

4. The Agreement remains in full force and effect, has not been amended, no Event of Default (or event which with the passage of time or the giving of notice or both would constitute an Event of Default) has occurred thereunder and no Event of Non-appropriation has occurred or is threatened with respect thereto.

5. Assignor hereby acknowledges the transfer restrictions imposed by Section 11.01 of the Agreement and confirms that the assignment to Assignee has been made in accordance with the provisions of that Section.

6. Any inquiries of Lessee related to the Agreement and any requests for disbursements from the Escrow Account, if applicable, and all Rental Payments and other amounts coming due pursuant to the Agreement on and after the date of this Acknowledgment should be remitted to Assignee at the following address (or such other address as provided to Lessee in writing from time to time by Assignee):
______________________________
______________________________
______________________________
ACKNOWLEDGED AND AGREED:

LESSEE: CITY OF PARAMOUNT
By:_________________________________
Name: ___________________________
Title: ____________________________
ASSIGNOR: BANC OF AMERICA PUBLIC CAPITAL CORP
By:_________________________________
Name: ___________________________
Title: ____________________________

EXHIBIT I

ESCROW AND ACCOUNT CONTROL AGREEMENT
See Item #4 in Transcript
Reso 23-038 Escrow Agreement
9007975

ESCROW AND ACCOUNT CONTROL AGREEMENT
This Escrow and Account Control Agreement (this “Agreement”), dated as of December 19, 2023, by and among Banc of America Public Capital Corp, a Kansas corporation (together with its successors and assigns, hereinafter referred to as “Lessor”), City of Paramount, a city existing under the laws of the State of California (hereinafter referred to as “Lessee”) and Wilmington Trust, National Association, a national banking association organized under the laws of the United States of America (hereinafter referred to as “Escrow Agent”).

Reference is made to that certain Equipment Lease/Purchase Agreement dated as of December 19, 2023 between Lessor and Lessee (hereinafter referred to as the “Lease”), covering the acquisition and lease of certain Equipment described therein (the “Equipment”). It is a requirement of the Lease that the Acquisition Amount ($11,240,355.00) be deposited into a segregated escrow account under terms satisfactory to Lessor, for the purpose of fully funding the Lease, and providing a mechanism for the application of such amounts to the purchase of and payment for the Equipment.

NOW,THEREFORE, in consideration of the mutual promises contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

Section 1. Creation of Escrow Account. (a) There is hereby created an escrow fund to be known as the “City of Paramount Escrow Account” (the “Escrow Account”) to be held by the Escrow Agent for the purposes stated herein, for the benefit of Lessor and Lessee, to be held, disbursed and returned in accordance with the terms hereof. (b) Lessee may, from time to time, provide written instructions for Escrow Agent to use any available cash in the Escrow Account to purchase any money market fund or liquid deposit investment vehicle that Escrow Agent from time to time makes available to the parties hereto.

Such written instructions shall be provided via delivery to Escrow Agent of a signed and completed Escrow Account Investment Selection Form (such form available from Escrow Agent upon request). All funds invested by Escrow Agent at the direction of Lessee in such short-term investments (as more particularly described in Escrow Agent’s Escrow Account Investment Selection Form) shall be deemed to be part of the Escrow Account and subject to all the terms and conditions of this Agreement. The Escrow Agent is hereby authorized and directed to sell or redeem any such investments as it deems necessary to make any payments or distributions required under this Agreement. The Lessee acknowledges that neither the Escrow Agent nor the Lessor is providing investment supervision, recommendations, or advice. If any cash is received for the Escrow Account after the cut-off time for the designated short-term investment vehicle, the Escrow Agent shall hold such cash uninvested until the next Business Day. “Business Day” means a day other than a Saturday, Sunday or legal holiday, on which banking institutions are not closed in Chicago, Illinois, Paramount, California or New York, New York. In the absence of written instructions from Lessee (on Escrow Agent’s Escrow Account Investment Selection Form) designating a short-term investment of cash in the Escrow Account, cash in the Escrow Account shall remain uninvested and it shall not be collateralized. Escrow Agent shall have no obligation -2-
to pay interest on cash in respect of any period during which it remains uninvested. Lessee shall be solely responsible for ascertaining that all proposed investments and reinvestments are Qualified Investments and that they comply with federal, state and local laws, regulations and ordinances governing investment of such funds and for providing appropriate notice to the Escrow Agent for the reinvestment of any maturing investment. Accordingly, neither the Escrow Agent nor Lessor shall be responsible for any liability, cost, expense, loss or claim of any kind, directly or indirectly arising out of or related to the investment or reinvestment of all or any portion of the moneys on deposit in the Escrow Account, and Lessee agrees to and does hereby release the Escrow Agent and Lessor from any such liability, cost, expenses, loss or claim. Interest on the Escrow Account shall become part of the Escrow Account, and gains and losses on the investment of the moneys on deposit in the Escrow Account shall be borne by the Lessee. The Escrow Agent shall have no discretion whatsoever with respect to the management, disposition or investment of the Escrow Account. The Escrow Agent shall not be responsible for any market decline in the value of the Escrow Account and has no obligation to notify Lessor and Lessee of any such decline or take any action with respect to the Escrow Account, except upon specific written instructions stated herein. For purposes of this Agreement, “Qualified Investments” means any investments which meet the requirements of California Government Code Sections 53600 et seq. (c) Unless the Escrow Account is earlier terminated in accordance with the provisions of paragraph (d) below, amounts in the Escrow Account shall be disbursed by the Escrow Agent in payment of amounts described in Section 2 hereof upon receipt of written instruction(s) from Lessor, as is more fully described in Section 2 hereof. If the amounts in the Escrow Account are insufficient to pay such amounts, Lessee shall provide any balance of the funds needed to complete the acquisition of the Equipment. Any moneys remaining in the Escrow Account on or after the earlier of (i) the expiration of the Acquisition Period or (ii) the date on which Lessee executes a Final Acceptance Certificate shall be applied as provided in Section 4 hereof. (d) The Escrow Account shall be terminated at the earliest of (i) the final distribution of amounts in the Escrow Account, (ii) the date on which Lessee executes a Final Acceptance Certificate or (iii) written notice given by Lessor of the occurrence of an Event of Default under the Lease or termination of the Lease due to an Event of Non-appropriation. Notwithstanding the foregoing, this Agreement shall not terminate nor shall the Escrow Account be closed until all funds deposited hereunder have been disbursed.
(e) The Escrow Agent may act in reliance upon any writing or instrument or signature which it, in good faith, believes to be genuine and may assume the validity and accuracy of any statement or assertion contained in such a writing or instrument. The Escrow Agent shall not be liable in any manner for the sufficiency or correctness as to form, manner of execution, or validity of any instrument nor as to the identity, authority, or right of any person executing the same; and its duties hereunder shall be limited to the receipt of such moneys, instruments or other documents received by it as the Escrow Agent, and for the disposition of the same in accordance herewith.

Notwithstanding and without limiting the generality of the foregoing, concurrent with the execution of this Agreement, Lessee and Lessor, respectively, shall deliver to the Escrow Agent an authorized signers form in the form of Exhibit A-1 (Lessee) and Exhibit A-2 (Lessor) attached hereto. Notwithstanding the foregoing sentence, the Escrow Agent is authorized to comply with and rely upon any notices, instructions or other communications believed by it to have been sent -3-
or given by the parties or by a person or persons authorized by the parties. The Escrow Agent specifically allows for receiving direction by written or electronic transmission from an authorized representative with the following caveat, to the extent permitted by law, Lessee and Lessor agree to indemnify and hold harmless the Escrow Agent against any and all claims, losses, damages, liabilities, judgments, costs and expenses (including reasonable attorneys’ fees) (collectively, “Losses”) incurred or sustained by the Escrow Agent as a result of or in connection with the Escrow Agent’s reliance upon and compliance with instructions or directions given by written or electronic transmission given by each, respectively, provided, however, that such Losses have not arisen from the gross negligence or willful misconduct of the Escrow Agent, with regards to the execution of the instructions or directions in question, it being understood that forbearance on the part of the Escrow Agent to verify or confirm that the person giving the instructions or directions, is, in fact, an authorized person shall not be deemed to constitute gross negligence or willful misconduct.

In the event conflicting instructions as to the disposition of all or any portion of the Escrow Account are at any time given by Lessor and Lessee, the Escrow Agent shall abide by the instructions or entitlement orders given by Lessor without consent of the Lessee. (f) Unless the Escrow Agent is guilty of gross negligence or willful misconduct with regard to its duties hereunder, Lessee agrees to and does hereby release and indemnify the Escrow Agent and its directors, officers, employees and agents and hold it harmless from any and all claims, liabilities, losses, actions, suits or proceedings at law or in equity, or any other expense, fees or charges of any character or nature, which it may incur or with which it may be threatened by reason of its acting as Escrow Agent under this Agreement; and in connection therewith, does to the extent permitted by law indemnify the Escrow Agent against any and all expenses; including reasonable attorneys’ fees and the cost of defending any action, suit or proceeding or resisting any claim.
(g) If Lessee and Lessor shall be in disagreement about the interpretation of the Lease, or about the rights and obligations, or the propriety of any action contemplated by the Escrow Agent hereunder, the Escrow Agent may, but shall not be required to, file an appropriate civil action including an interpleader action to resolve the disagreement. The Escrow Agent shall be reimbursed by Lessee for all costs, including reasonable attorneys’ fees, in connection with such civil action, and shall be fully protected in suspending all or part of its activities under this Agreement until a final judgment in such action is received. (h) The Escrow Agent may consult with counsel of its own choice and shall have full and complete authorization and protection with the opinion of such counsel. The Escrow Agent shall otherwise not be liable for any mistakes of fact or errors of judgment, or for any acts or omissions of any kind unless caused by its willful misconduct. The Escrow Agent may act through attorneys or agents and shall not be responsible for the acts or omissions of any such attorney or agent appointed with due care.
(i) The compensation fee for Escrow Agent’s services under this Agreement is $0.00.

Lessee shall reimburse the Escrow Agent for all reasonable costs and expenses, including those of the Escrow Agent’s attorneys, agents and employees incurred for non-routine administration of -4-
the Escrow Account, execution of the directions provided by the Lessee and Lessor and the performance of the Escrow Agent’s powers and duties hereunder in connection with any Event of Default under the Lease, any termination of the Lease due to an Event of Non-appropriation or in connection with any dispute between Lessor and Lessee concerning the Escrow Account. The terms of this paragraph shall survive termination of this Agreement and/or the earlier resignation or removal of the Escrow Agent.
(j) The Escrow Agent or any successor may at any time resign by giving mailed notice to Lessee and Lessor of its intention to resign and of the proposed date of resignation (the “Effective Date”), which shall be a date not less than 60 days after such notice is delivered to an express carrier, charges prepaid, unless an earlier resignation date and the appointment of a successor shall have been approved by the Lessee and Lessor. After the Effective Date, the Escrow Agent shall be under no further obligation except to hold the Escrow Account in accordance with the terms of this Agreement, pending receipt of written instructions from Lessor regarding further disposition of the Escrow Account.
(k) The Escrow Agent shall have no responsibilities, obligations or duties other than those expressly set forth in this Agreement and no implied duties responsibilities or obligations shall be read into this Agreement. The Escrow Agent shall neither be responsible for, nor chargeable with, knowledge of the terms and conditions of any other agreement, instrument, or document other than this Agreement, whether or not an original or a copy of such agreement has been provided to the Escrow Agent.
(l) The permissive rights of the Escrow Agent to do things enumerated in this Agreement shall not be construed as a duty and, with respect to such permissive rights, the Escrow Agent shall not be answerable for other than its gross negligence or willful misconduct. (m) Nothing in this Agreement shall require the Escrow Agent to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties or in the exercise of any of its rights or powers hereunder.
(n) In no event shall the Escrow Agent be responsible or liable for special, indirect, punitive, incidental or consequential loss or damage of any kind whatsoever (including, but not limited to, loss of profit) irrespective of whether the Escrow Agent has been advised of the likelihood of such loss or damage and regardless of the form of action. (o) In the event that any of the funds in the Escrow Account shall be attached, garnished or levied upon by any court order, or the delivery thereof shall be stayed or enjoined by an order of a court, or any order, judgment or decree shall be made or entered by any court order affecting the funds in the Escrow Account, the Escrow Agent is hereby expressly authorized to respond as it deems appropriate or to comply with all writs, orders or decrees so entered or issued, or which it is advised by legal counsel of its own choosing is binding upon it, whether with or without jurisdiction. To the extent permitted by law, the Escrow Agent shall inform the Lessor and Lessee in writing about any such attachment, garnishment, levy, court order, judgment or decree within ten (10) business days of its receipt of any such attachment, garnishment, levy, court order, judgment or decree. In the event that the Escrow Agent obeys or complies with any such writ, -5-
order or decree, it shall not be liable to any of the other parties to this Agreement or to any other person, firm or corporation, should, by reason of such compliance notwithstanding, such writ, order or decree be subsequently reversed, modified, annulled, set aside or vacated.

Section 2. Acquisition and Installation of Equipment.
(a) Acquisition Contracts. Lessee will arrange for, supervise and provide for, or cause to be supervised and provided for, the acquisition of the with moneys available in the Escrow Account. Lessee represents the estimated costs of the Equipment are within the funds estimated to be available therefor, and Lessor makes no warranty or representation with respect thereto.

Lessor shall have no liability under any of the acquisition or construction contracts. Lessee shall obtain all necessary permits and approvals, if any, for the acquisition, equipping and installation of the Equipment, and the operation and maintenance thereof. Escrow Agent shall have no duty to inquire as to the performance or nonperformance of any provision of any other agreement, instrument, or document other than this Agreement or monitor or enforce Lessee’s compliance with the foregoing covenant.
(b) Authorized Escrow Account Disbursements. It is agreed as between Lessee and Lessor that disbursements from the Escrow Account shall be made for the purpose of paying (including the reimbursement to Lessee for advances from its own funds to accomplish the purposes hereinafter described) the cost of acquiring the Equipment. (c) Requisition Procedure. No disbursement from the Escrow Account shall be made unless and until Lessor has approved in writing such requisition. Prior to disbursement from the Escrow Account there shall be filed with the Escrow Agent a requisition for such payment in the form of Disbursement Request attached hereto as Schedule 1, stating each amount to be paid and the name of the person, firm or corporation to whom payment thereof is due. All disbursements shall be made by wire transfer. The Escrow Agent is authorized to obtain and rely on confirmation of such Disbursement Request and payment instructions by telephone call-back to the person or persons designated for verifying such requests on Exhibit A-2 (such person verifying the request shall be different than the person initiating the request). The Lessor and Lessee hereby confirm that any call-back performed by Escrow Agent to verify a disbursement instruction pursuant to a Disbursement Request submitted pursuant to this Section 2(c) before release, shall be made to Lessor only and Escrow Agent shall have no obligation to call-back Lessee.

Each such Disbursement Request shall be signed by an authorized representative of Lessee (an “Authorized Representative”) and by Lessor, and shall be subject to the following conditions, which Escrow Agent shall conclusively presume have been satisfied at such time as a requisition executed by Lessee and Lessor is delivered to it:

1. Delivery to Lessor of an executed Disbursement Request in the form attached hereto as Schedule 1;

2. Delivery to Lessor of copies of invoices (and proofs of payment of such invoices, if Lessee seeks reimbursement) and bills of sale therefor or other evidence of title -6-
transfer, and release by Vendor of any security interest, therefor as required by Section 3.04 of the Lease and any additional documentation reasonably requested by Lessor; and

3. The disbursement shall occur during the Acquisition Period.

Lessee and Lessor agree that their execution of the form attached hereto as Schedule 1 and delivery of the executed form to Escrow Agent confirms that all of the requirements and conditions with respect to disbursements set forth in this Section 2 have been satisfied.

Section 3. Deposit to Escrow Account. Upon satisfaction of the conditions specified in Section 3.04 of the Lease, Lessor will cause the Acquisition Amount to be deposited in the Escrow Account. Lessee agrees to pay any costs with respect to the Equipment in excess of amounts available therefor in the Escrow Account. The Escrow Agent shall not be liable for any amount in excess of the Acquisition Amount.

Section 4. Excess Proceeds in Escrow Account. Upon receipt of written instructions from Lessor including a representation that one of the following conditions has been satisfied (upon which representation Escrow Agent shall conclusively rely), any funds remaining in the Escrow Account on or after the earlier of (a) the expiration of the Acquisition Period or (b) the date on which Lessee executes a Final Acceptance Certificate, or upon a termination of the Escrow Account as provided in this Agreement, shall be distributed by the Escrow Agent to the Lessor in order for the Lessor to apply such funds to amounts owed by Lessee under the Lease in accordance with Section 4.07 of the Lease.

Section 5. Security Interest. The Escrow Agent and Lessee acknowledge and agree that the Escrow Account and all proceeds thereof are being held by Escrow Agent for disbursement or return as set forth herein. Lessee hereby grants to Lessor a first priority perfected security interest in the Escrow Account, and all proceeds thereof, and all investments made with any amounts in the Escrow Account. If the Escrow Account, or any part thereof, is converted to investments as set forth in this Agreement, such investments shall be made in the name of Escrow Agent and the Escrow Agent hereby agrees to hold such investments as bailee for Lessor so that Lessor is deemed to have possession of such investments for the purpose of perfecting its security interest.

Section 6. Control of Escrow Account. In order to perfect Lessor’s security interest by means of control in (i) the Escrow Account established hereunder, (ii) all securities entitlements, investment property and other financial assets now or hereafter credited to the Escrow Account, (iii) all of Lessee’s rights in respect of the Escrow Account, such securities entitlements, investment property and other financial assets, and (iv) all products, proceeds and revenues of and from any of the foregoing personal property (collectively, the “Collateral”), Lessor, Lessee and Escrow Agent further agree as follows:
(a) All terms used in this Section 6 which are defined in the California Commercial Code (the “Commercial Code”) but are not otherwise defined herein shall have the meanings assigned to such terms in the Commercial Code, as in effect on the date of this Agreement.
-7-
(b) Escrow Agent will comply with all entitlement orders originated by Lessor with respect to the Collateral, or any portion of the Collateral, without further consent by Lessee.
(c) Provided that account investments shall be held in the name of the Escrow Agent, Escrow Agent hereby represents and warrants (i) that the records of Escrow Agent show that Lessee is the sole owner of the Collateral, (ii) that Escrow Agent has not been served with any notice of levy or received any notice of any security interest in or other claim to the Collateral, or any portion of the Collateral, other than Lessor’s claim pursuant to this Agreement, and (iii) that Escrow Agent is not presently obligated to accept any entitlement order from any person with respect to the Collateral, except for entitlement orders that Escrow Agent is obligated to accept from Lessor under this Agreement and entitlement orders that Escrow Agent, subject to the provisions of paragraph (e) below, is obligated to accept from Lessee.
(d) Without the prior written consent of Lessor, Escrow Agent will not enter into any agreement by which Escrow Agent agrees to comply with any entitlement order of any person other than Lessor or, subject to the provisions of paragraph (e) below, Lessee, with respect to any portion or all of the Collateral. Escrow Agent shall promptly notify Lessor if any person requests Escrow Agent to enter into any such agreement or otherwise asserts or seeks to assert a Lien, encumbrance or adverse claim against any portion or all of the Collateral.
(e) Except as otherwise provided in this paragraph (e) and subject to Section 1(b) hereof, Lessee may effect sales, trades, transfers and exchanges of Collateral within the Escrow Account, but will not, without the prior written consent of Lessor, withdraw any Collateral from the Escrow Account. Escrow Agent acknowledges that Lessor reserves the right, by delivery of written notice to Escrow Agent, to prohibit Lessee from effecting any withdrawals (including withdrawals of ordinary cash dividends and interest income), sales, trades, transfers or exchanges of any Collateral held in the Escrow Account. Further, Escrow Agent hereby agrees to comply with any and all written instructions delivered by Lessor to Escrow Agent (once it has had a reasonable opportunity to comply therewith) and has no obligation to, and will not, investigate the reason for any action taken by Lessor, the amount of any obligations of Lessee to Lessor, the validity of any of Lessor’s claims against or agreements with Lessee, the existence of any defaults under such agreements, or any other matter.
(f) Lessee hereby irrevocably authorizes Escrow Agent to comply with all instructions and entitlement orders delivered by Lessor to Escrow Agent. (g) Escrow Agent will not attempt to assert control, and does not claim and will not accept any security or other interest in, any part of the Collateral, and Escrow Agent will not exercise, enforce or attempt to enforce any right of setoff against the Collateral, or otherwise charge or deduct from the Collateral any amount whatsoever. -8-
(h) Escrow Agent and Lessee hereby agree that any property held in the Escrow Account shall be treated as a financial asset under such section of the Commercial Code as corresponds with Section 8-102 of the Uniform Commercial Code, notwithstanding any contrary provision of any other agreement to which Escrow Agent may be a party. (i) Escrow Agent is hereby authorized and instructed, and hereby agrees, to send to Lessor at its address set forth in Section 8 below, concurrently with the sending thereof to Lessee, duplicate copies of any and all monthly Escrow Account statements or reports issued or sent to Lessee with respect to the Escrow Account.

Section 7. Information Required Under USA Patriot Act. The parties acknowledge that in order to help the United States government fight the funding of terrorism and money laundering activities, pursuant to Federal regulations that became effective on October 1, 2003 (Section 326 of the USA Patriot Act) all financial institutions are required to obtain, verify, record and update information that identifies each person establishing a relationship or opening an account. The parties to this Agreement agree that they will provide to the Escrow Agent such information as it may request, from time to time, in order for the Escrow Agent to satisfy the requirements of the USA Patriot Act, including but not limited to the name, address, tax identification number and other information that will allow it to identify the individual or entity who is establishing the relationship or opening the account and may also ask for formation documents such as articles of incorporation or other identifying documents to be provided.

Section 8. Miscellaneous. Capitalized terms not otherwise defined herein shall have the meanings assigned to them in the Lease. This Agreement may not be amended except in writing signed by all parties hereto. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original instrument and each shall have the force and effect of an original and all of which together constitute, and shall be deemed to constitute, one and the same instrument. Notices hereunder shall be made in writing and shall be deemed to have been duly given when personally delivered or when deposited in the mail, first class postage prepaid, or delivered to an express carrier, charges prepaid, or sent by facsimile with electronic confirmation, addressed to each party at its address below.

Notices and other communications hereunder may be delivered or furnished by electronic mail provided that any formal notice shall be attached to an email message in PDF format and provided further that any notice or other communication sent to an e-mail address shall be deemed received upon and only upon the sender’s receipt of affirmative acknowledgement or receipt from the intended recipient. For purposes hereof no acknowledgement of receipt generated on an automated basis shall be deemed sufficient for any purpose hereunder or admissible as evidence of receipt.

If a court of competent jurisdiction declares any provision hereof invalid, it will be ineffective only to the extent of such invalidity, so that the remainder of the provision and Agreement will continue in full force and effect.
-9-
This Agreement and the exhibits hereto set forth the entire agreement and understanding of the parties related to this transaction and supersede all prior agreements and understandings, oral or written.

If to Lessor: Banc of America Public Capital Corp
11333 McCormick Road
Mail Code: MD5-031-06-05
Hunt Valley, MD 21031
Attn: Contract Administration
Fax: (443) 541-3057
If to Lessee: City of Paramount
16400 Colorado Ave.

Paramount, CA 90723
Attention: Kim Sao, Finance Director
Telephone: (562) 220-2207
Fax No.: ________________
Email: [email protected]
If to Escrow Agent: Wilmington Trust, National Association 650 Town Center Drive, Suite 800
Costa Mesa, CA 92626
Attention: Chris Johnson
Telephone: (714) 384-4152
Fax: (714) 384-4151
Email: [email protected]
Section 9. Lessee and Lessor understand and agree that they are required to provide the Escrow Agent with a properly completed and signed Tax Certification (as defined below) and that the Escrow Agent may not perform its duties hereunder without having been provided with such Tax Certification. As used herein “Tax Certification” shall mean an IRS form W-9 or W-8 as described above. The Escrow Agent will comply with any U.S. tax withholding or backup withholding and reporting requirements that are required by law. With respect to earnings allocable to a foreign person, the Escrow Agent will withhold U.S. tax as required by law and report such earnings and taxes withheld, if any, for the benefit of such foreign person on IRS Form 1042-S (or any other required form), unless such earnings and withheld taxes are exempt from reporting under Treasury Regulation Section 1.1461-1(c)(2)(ii) or under other applicable law.

With respect to earnings allocable to a United States person, the Escrow Agent will report such income, if required, on IRS Form 1099 or any other form required by law. The IRS Forms 1099 and/or 1042-S shall show the Escrow Agent as payor and Lessee as payee. Escrow Agent shall recognize Lessee as the designated party for regulatory reporting purposes.

Lessee and Lessor agree that they are not relieved of their respective obligations, if any, to prepare and file information reports under Code Section 6041, and the Treasury regulations thereunder, with respect to amounts of imputed interest income, as determined pursuant to Code -10-
Sections 483 or 1272. The Escrow Agent shall not be responsible for determining or reporting such imputed interest.

Section 10. This Agreement shall be governed by and construed in accordance with the laws of the State of California and the parties hereto consent to jurisdiction in the State of California and venue in any state or Federal court located in the State of California, and each party expressly waives any objections that it may have to the venue of such courts. THE PARTIES

HERETO EXPRESSLY WAIVE ANY RIGHT TO TRIAL BY JURY IN ANY ACTION BROUGHT ON OR WITH RESPECT TO THIS AGREEMENT. If the waiver of jury trial contained herein is unenforceable for any reason, then the parties hereto agree that the court shall, and is hereby directed to, make a general reference pursuant to California Code of Civil Procedure Section 638 to a referee to hear and determine all of the issues in such action or proceeding (whether of fact or of law) and to report a statement of decision.

Section 11. Any bank or corporation into which the Escrow Agent may be merged or with which it may be consolidated, or any bank or corporation to whom the Escrow Agent may transfer a substantial amount of its escrow business, shall be the successor to the Escrow Agent without the execution or filing of any paper or any further act on the part of any of the parties, anything herein to the contrary notwithstanding. Any bank or corporation into which the Lessor may be merged or with which it may be consolidated, or any bank or corporation to whom the Lessor may transfer a substantial amount of its business, shall be the successor to the Lessor without the execution or filing of any paper or any further act on the part of any of the parties, anything herein to the contrary notwithstanding.

Section 12. This Agreement may be amended, modified, and/or supplemented only by an instrument in writing executed by all parties hereto.

Section 13. No party hereto shall assign its rights hereunder until its assignee has submitted to the Escrow Agent (i) Patriot Act disclosure materials and the Escrow Agent has determined that on the basis of such materials it may accept such assignee as a customer and (ii) assignee has delivered an IRS Form W-8 or W-9, as appropriate, to the Escrow Agent which the Escrow Agent has determined to have been properly signed and completed.

Section 14. Escrow Agent will treat information related to this Agreement as confidential but, unless prohibited by law, Lessee and Lessor authorize the transfer or disclosure of any information relating to the Agreement to and between the subsidiaries, officers, affiliates and other representatives and advisors of Escrow Agent and third parties selected by any of them, wherever situated, for confidential use in the ordinary course of business, and further acknowledge that Escrow Agent and any such subsidiary, officer, affiliate or third party may transfer or disclose any such information as required by any law, court, regulator or legal process.

Lessor will treat information related to this Agreement as confidential but, unless prohibited by law, Escrow Agent and Lessee authorize the transfer or disclosure of any information relating to the Agreement to and between the subsidiaries, officers, affiliates, other representatives and advisors of Lessor and debt and equity sources and third parties selected by any of them, and to their prospective assignees wherever situated, for confidential use in the ordinary course of -11-
business, and further acknowledge that Lessor and any such subsidiary, officer, affiliate, debt and equity source or third party or prospective assignee may transfer or disclose any such information as required by any law, court, regulator or legal process.

Lessee will treat the terms of this Agreement as confidential except on a “need to know” basis to persons within or outside Lessee’s organization (including affiliates of such party), such as attorneys, accountants, bankers, financial advisors, auditors and other consultants of such party and its affiliates, except as required by any law, court, regulator or legal process and except pursuant to the express prior written consent of the other parties, which consent shall not be unreasonably withheld.

Section 15. This Agreement may be executed and delivered by facsimile signature or other electronic or digital means (including, without limitation, Adobe’s Portable Document Format (“PDF”)). Any such signature shall be of the same force and effect as an original signature, it being the express intent of the parties to create a valid and legally enforceable contract between them. The exchange and delivery of this Agreement and the related signature pages via facsimile or as an attachment to electronic mail (including in PDF) shall constitute effective execution and delivery by the parties and may be used by the parties for all purposes.

Notwithstanding the foregoing, at the request of either party, the parties hereto agree to exchange inked original replacement signature pages as soon thereafter as reasonably practicable. [SIGNATURE PAGES TO FOLLOW]
[Signature Page to Escrow and Account Control Agreement] IN WITNESS WHEREOF, the parties have executed this Escrow and Account Control Agreement as of the date first above written.

BANC OF AMERICA PUBLIC CAPITAL CORP,
as Lessor
CITY OF PARAMOUNT, as Lessee
By: ________________________________
Name: ___________________________
Title: ____________________________
By: ________________________________
Name: ___________________________
Title:____________________________

WILMINGTON TRUST, NATIONAL ASSOCIATION,
as Escrow Agent
By: ________________________________
Name: ___________________________
Title: ____________________________
SCHEDULE 1

TO THE ESCROW AND ACCOUNT CONTROL AGREEMENT

FORM OF DISBURSEMENT REQUEST
Re: Equipment Lease/Purchase Agreement dated as of December 19, 2023 by and between Banc of America Public Capital Corp, as Lessor, and the City of Paramount, as Lessee (the “Lease”) (Capitalized terms not otherwise defined herein shall have the meanings assigned to them in the Lease.)
In accordance with the terms of the Escrow and Account Control Agreement, dated as of December 19, 2023 (the “Escrow and Account Control Agreement”) by and among Banc of America Public Capital Corp (“Lessor”), the City of Paramount (“Lessee”) and Wilmington Trust, National Association (the “Escrow Agent”), the undersigned hereby requests the Escrow Agent pay the following persons the following amounts from the Escrow Account created under the Escrow and Account Control Agreement for the following purposes:

DISBURSEMENT AMOUNTS:

PAYEE’S NAME AND ADDRESS (IF

DISBURSEMENT VIA WIRE, MUST

INCLUDE WIRE TRANSFER

INSTRUCTIONS) INVOICE NUMBER DOLLAR AMOUNT PURPOSE
<Payee’s Name>
<Payee Address 1>
<Payee Address 2>
<Payee Address 3>
<Payee Bank Name*>
<Payee Bank ABA/Routing*>
<Payee Bank Account No*>
<Payee Account Name*>
<*Payee Address and Payee
Bank information is required.>
<invoice list OR “see
attached” with a
spreadsheet>
< invoice amount> <general description of
equipment; ex “police
cruiser”>
<Payee’s Name>
<Payee Address 1>
<Payee Address 2>
<Payee Address 3>
<Payee Bank Name*>
<Payee Bank ABA/Routing*>
<Payee Bank Account No*>
<Payee Account Name*>
<*Payee Address information is
required. Payee Bank
information only to be included
for wire/EFT.>
<invoice list OR “see
attached” with a
spreadsheet>
<invoice amount> [<mobilization fee that is
payable to the Vendor
under the Vendor
Agreement>]
Schedule I-2
Lessee hereby represents, covenants and warrants for the benefit of Lessor on the date hereof as follows:
(i) Each obligation specified in the table herein titled as “Disbursement Amounts” (a) has been incurred by Lessee in the stated amount, (b) the same is a proper charge against the Escrow Account for Equipment Costs relating to the Equipment identified above and has not been paid (or has been paid by Lessee and Lessee requests reimbursement thereof), and (c) has not been paid (or has been paid by Lessee and Lessee requests reimbursement thereof), and the Equipment relating to such obligation has been delivered, installed and accepted by Lessee.
(ii) For each item of Equipment relating to an obligation specified in the table herein titled as “Disbursement Amounts” (a) Lessee has conducted such inspection and testing of the Equipment as it deems necessary and appropriate in order to determine the Equipment’s capability and functionality in order to accept such Equipment, (b) such Equipment has been delivered, installed, is operating in a manner consistent with the manufacturer’s intended use and has been inspected and finally accepted for all purposes by Lessee and title thereto has transferred to Lessee and any security interest of Vendor therein has been released and (c) the date on which Equipment acceptance occurred is __________, 20__. Attached hereto is the original invoice, and certification from Vendor as to title transfer and release by Vendor of any security interest with respect to such obligation and the related AIA forms.
(iii) The undersigned, as Authorized Representative, has no notice of any vendor’s, mechanic’s or other Liens or rights to Liens, chattel mortgages, conditional sales contracts or security interest which should be satisfied or discharged before such payment is made.
(iv) This requisition contains no item representing payment on account, or any retained percentages which Lessee is, at the date hereof, entitled to retain (except to the extent such amounts represent a reimbursement to Lessee). (v) The Equipment is insured in accordance with the Lease. (vi) No Event of Default, and no event which with notice or lapse of time, or both, would become an Event of Default, under the Lease has occurred and is continuing at the date hereof. No Event of Non-appropriation has occurred or is threatened with respect to the Lease.
(vii) The disbursement shall occur during the Acquisition Period. (viii) The representations, warranties and covenants of Lessee set forth in the Lease are true and correct as of the date hereof.

Schedule I-3
(ix) No Material Adverse Change has occurred since the date of the execution and delivery of the Lease.
(x) The information in this Disbursement Request regarding each Payee, including their respective name, address and wiring instructions (collectively, the “Payee Information”), is true and correct, such Payee Information has been verified and confirmed by Lessee and the Lessor can rely on Lessee’s verification and confirmation of the accuracy of such Payee Information. Lessee hereby acknowledges and agrees that any call-back performed by Lessor to verify the disbursement instructions pursuant to this Disbursement Request shall be made to Lessee only and Lessor shall have no obligation to call-back any Payee listed above.

Dated: ________________

CITY OF PARAMOUNT
By: ____________________________________
Name: ______________________________
Title: _______________________________
Disbursement of funds from the Escrow
Account in accordance with the foregoing
Disbursement Request hereby is authorized

BANC OF AMERICA PUBLIC CAPITAL CORP
as Lessor under the Lease
By:

Name:

Title:
[AN “EXHIBIT A-1” MUST BE COMPLETED AND EXECUTED AT TIME OF EXECUTION OF THE AGREEMENT]
EXHIBIT A-1

FORM OF INCUMBENCY AND AUTHORIZATION CERTIFICATE
The undersigned, a duly elected or appointed and acting City Clerk of the City of Paramount (“Lessee”) certifies as follows:

A. The following listed persons are duly elected or appointed and acting officials of Lessee (the “Officials”) in the capacity set forth opposite their respective names below and the facsimile signatures below are true and correct as of the date hereof; B. The Officials are duly authorized, on behalf of Lessee, to negotiate, execute, in writing or electronically, and deliver the Equipment Lease/Purchase Agreement dated as of December 19, 2023 by and between Lessee and Banc of America Public Capital Corp (“Lessor”), the Escrow and Account Control Agreement dated as of December 19, 2023 by and among Lessor, Lessee and Wilmington Trust, National Association, as Escrow Agent, all documents related thereto and delivered in connection therewith, and any future modification(s) or amendments thereof (collectively, the “Operative Agreements”), and the Operative Agreements each are the binding and authorized agreements of Lessee, enforceable in all respects in accordance with their respective terms.

NAME OF OFFICIAL TITLE SIGNATURE
________________________ ________________________ ________________________ ________________________ ________________________ ________________________ ________________________ ________________________ ________________________ Dated: December 19, 2023
By:____________________________________
Name: ______________________________
Title: _______________________________
(The signer of this Certificate cannot be listed above as authorized to execute the Operative Agreements.)
[AN “EXHIBIT A-2” MUST BE COMPLETED AND EXECUTED AT TIME OF EXECUTION OF THE AGREEMENT]
EXHIBIT A-2
ESCROW AND ACCOUNT CONTROL AGREEMENT DATED AS OF DECEMBER 19, 2023 BY AND AMONG

BANC OF AMERICA PUBLIC CAPITAL CORP, AS LESSOR, THE CITY OF PARAMOUNT, AS LESSEE AND

WILMINGTON TRUST, NATIONAL ASSOCIATION, AS ESCROW AGENT CERTIFICATE OF AUTHORIZED REPRESENTATIVES – [LESSOR]
Name: Candy Tam Name: Nancy Nusenko
Title: Authorized Agent Title: Authorized Agent
Phone: 415-765-7492 Phone: 443-541-3646
Facsimile: 415-633-0183 Facsimile: 443-541-3057
E-mail: [email protected] E-mail: [email protected] Signature: Signature:

Fund Transfer / Disbursement Authority Level: Fund Transfer / Disbursement Authority Level:

Initiate Initiate
Verify transactions initiated by others Verify transactions initiated by others Name: Nancy K. Hepner Name: Arlene Sobieck
Title: Authorized Agent Title: Authorized Agent
Phone: 443-541-3645 Phone: 443-541-3643
Facsimile: 804-553-2407 Facsimile: 443-541-3057
E-mail: [email protected] E-mail: [email protected] Signature: Signature:

Fund Transfer / Disbursement Authority Level: Fund Transfer / Disbursement Authority Level:

Initiate Initiate
Verify transactions initiated by others Verify transactions initiated by others The Escrow Agent is authorized to comply with and rely upon any notices, instructions or other communications believed by it to have been sent or given by the person or persons identified above including without limitation, to initiate and verify funds transfers as indicated.

BANC OF AMERICA PUBLIC CAPITAL CORP
By:

Name:

Title:

Date: December 19, 2023
Dec 7, 2023 8:02 am Prepared by KNN Public Finance, LLC (Finance 8.901 Paramount:2023-SERIES01)

TABLE OF CONTENTS
City of Paramount
Equipment/Lease Purchase Agreement
(Water Meters Project)
(as of 12/7/2023)
Report Page
Sources and Uses of Funds . .1 . . . . . . . . . . . . . . . . . . . . . . . . . .

Bond Summary Statistics . .2 . . . . . . . . . . . . . . . . . . . . . . . . . . .

Bond Pricing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Project Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Cost of Issuance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Bond Debt Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Proof of Arbitrage Yield . .8 . . . . . . . . . . . . . . . . . . . . . . . . . . .

Form 8038 Statistics . .9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Dec 7, 2023 8:02 am Prepared by KNN Public Finance, LLC (Finance 8.901 Paramount:2023-SERIES01) Page 1

SOURCES AND USES OF FUNDS
City of Paramount
Equipment/Lease Purchase Agreement
(Water Meters Project)
(as of 12/7/2023)
Dated Date 12/19/2023
Delivery Date 12/19/2023
Sources:

Bond Proceeds:

Par Amount 11,236,354.00
11,236,354.00
Uses:

Project Fund Deposits:

Water Meters Project 11,174,354.00
Delivery Date Expenses:

Cost of Issuance 62,000.00
11,236,354.00
Dec 7, 2023 8:02 am Prepared by KNN Public Finance, LLC (Finance 8.901 Paramount:2023-SERIES01) Page 2

BOND SUMMARY STATISTICS
City of Paramount
Equipment/Lease Purchase Agreement
(Water Meters Project)
(as of 12/7/2023)
Dated Date 12/19/2023
Delivery Date 12/19/2023
First Coupon 12/01/2024
Last Maturity 12/01/2043
Arbitrage Yield 4.853507%
True Interest Cost (TIC) 4.853507%
Net Interest Cost (NIC) 4.859000%
All-In TIC 4.916644%
Average Coupon 4.859000%
Average Life (years) 12.278
Weighted Average Maturity (years) 12.278
Duration of Issue (years) 8.987
Par Amount 11,236,354.00
Bond Proceeds 11,236,354.00
Total Interest 6,703,335.38
Net Interest 6,703,335.38
Bond Years from Dated Date 137,957,099.30
Bond Years from Delivery Date 137,957,099.30
Total Debt Service 17,939,689.38
Maximum Annual Debt Service 896,984.95
Average Annual Debt Service 899,232.55
Underwriter's Fees (per $1000)
Average Takedown
Other Fee
Total Underwriter's Discount
Bid Price 100.000000
Par Average Average
Bond Component Value Price Coupon Life
Bond Component 11,236,354.00 100.000 4.85899995% 12.278 11,236,354.00 12.278
All-In Arbitrage
TIC TIC Yield
Par Value 11,236,354.00 11,236,354.00 11,236,354.00
+ Accrued Interest
+ Premium (Discount)
- Underwriter's Discount
- Cost of Issuance Expense -62,000.00
- Other Amounts
Target Value 11,236,354.00 11,174,354.00 11,236,354.00
Target Date 12/19/2023 12/19/2023 12/19/2023
Yield 4.853507% 4.916644% 4.853507%
Dec 7, 2023 8:02 am Prepared by KNN Public Finance, LLC (Finance 8.901 Paramount:2023-SERIES01) Page 3

BOND PRICING
City of Paramount
Equipment/Lease Purchase Agreement
(Water Meters Project)
(as of 12/7/2023)
Maturity
Bond Component Date Amount Rate Yield Price
Bond Component:
12/01/2024 107,944 4.859% 4.859% 100.000
12/01/2025 365,126 4.859% 4.859% 100.000
12/01/2026 383,309 4.859% 4.859% 100.000
12/01/2027 402,398 4.859% 4.859% 100.000
12/01/2028 422,437 4.859% 4.859% 100.000
12/01/2029 443,474 4.859% 4.859% 100.000
12/01/2030 465,559 4.859% 4.859% 100.000
12/01/2031 488,744 4.859% 4.859% 100.000
12/01/2032 513,084 4.859% 4.859% 100.000
12/01/2033 538,635 4.859% 4.859% 100.000
12/01/2034 565,459 4.859% 4.859% 100.000
12/01/2035 593,619 4.859% 4.859% 100.000
12/01/2036 623,181 4.859% 4.859% 100.000
12/01/2037 654,215 4.859% 4.859% 100.000
12/01/2038 686,795 4.859% 4.859% 100.000
12/01/2039 720,998 4.859% 4.859% 100.000
12/01/2040 756,903 4.859% 4.859% 100.000
12/01/2041 794,597 4.859% 4.859% 100.000
12/01/2042 834,168 4.859% 4.859% 100.000
12/01/2043 875,709 4.859% 4.859% 100.000
11,236,354
Dated Date 12/19/2023
Delivery Date 12/19/2023
First Coupon 12/01/2024
Par Amount 11,236,354.00
Original Issue Discount
Production 11,236,354.00 100.000000%
Underwriter's Discount
Purchase Price 11,236,354.00 100.000000%
Accrued Interest
Net Proceeds 11,236,354.00
Dec 7, 2023 8:02 am Prepared by KNN Public Finance, LLC (Finance 8.901 Paramount:2023-SERIES01) Page 4

PROJECT FUND
City of Paramount
Equipment/Lease Purchase Agreement
(Water Meters Project)
(as of 12/7/2023)
Water Meters Project (PROJ)
Scheduled
Date Deposit Interest Principal Draws Balance
12/19/2023 11,174,354 11,174,354 11,174,354
11,174,354 0 11,174,354 11,174,354
Arbitrage Yield: 4.8535074%
Dec 7, 2023 8:02 am Prepared by KNN Public Finance, LLC (Finance 8.901 Paramount:2023-SERIES01) Page 5

COST OF ISSUANCE
City of Paramount
Equipment/Lease Purchase Agreement
(Water Meters Project)
(as of 12/7/2023)
Cost of Issuance $/1000 Amount
Special Counsel - Transaction Fee 4.13835 46,500.00
Special Counsel - Expenses 0.04450 500.00
Municipal Advisor - Transaction Fee 1.33495 15,000.00

5.51780 62,000.00
Dec 7, 2023 8:02 am Prepared by KNN Public Finance, LLC (Finance 8.901 Paramount:2023-SERIES01) Page 6

BOND DEBT SERVICE
City of Paramount
Equipment/Lease Purchase Agreement
(Water Meters Project)
(as of 12/7/2023)
Dated Date 12/19/2023
Delivery Date 12/19/2023
Period Annual Bond Total
Ending Principal Coupon Interest Debt Service Debt Service Balance Bond Value 12/19/2023 11,236,354 11,236,354
12/01/2024 107,944 4.859% 518,675.72 626,619.72 11,128,410 11,128,410 06/01/2025 270,364.73 270,364.73 11,128,410 11,128,410
06/30/2025 896,984.45 11,128,410 11,128,410
12/01/2025 365,126 4.859% 270,364.73 635,490.73 10,763,284 10,763,284 06/01/2026 261,493.99 261,493.99 10,763,284 10,763,284
06/30/2026 896,984.72 10,763,284 10,763,284
12/01/2026 383,309 4.859% 261,493.99 644,802.99 10,379,975 10,379,975 06/01/2027 252,181.50 252,181.50 10,379,975 10,379,975
06/30/2027 896,984.49 10,379,975 10,379,975
12/01/2027 402,398 4.859% 252,181.50 654,579.50 9,977,577 9,977,577 06/01/2028 242,405.24 242,405.24 9,977,577 9,977,577
06/30/2028 896,984.74 9,977,577 9,977,577
12/01/2028 422,437 4.859% 242,405.24 664,842.24 9,555,140 9,555,140 06/01/2029 232,142.13 232,142.13 9,555,140 9,555,140
06/30/2029 896,984.37 9,555,140 9,555,140
12/01/2029 443,474 4.859% 232,142.13 675,616.13 9,111,666 9,111,666 06/01/2030 221,367.93 221,367.93 9,111,666 9,111,666
06/30/2030 896,984.06 9,111,666 9,111,666
12/01/2030 465,559 4.859% 221,367.93 686,926.93 8,646,107 8,646,107 06/01/2031 210,057.17 210,057.17 8,646,107 8,646,107
06/30/2031 896,984.10 8,646,107 8,646,107
12/01/2031 488,744 4.859% 210,057.17 698,801.17 8,157,363 8,157,363 06/01/2032 198,183.13 198,183.13 8,157,363 8,157,363
06/30/2032 896,984.30 8,157,363 8,157,363
12/01/2032 513,084 4.859% 198,183.13 711,267.13 7,644,279 7,644,279 06/01/2033 185,717.75 185,717.75 7,644,279 7,644,279
06/30/2033 896,984.88 7,644,279 7,644,279
12/01/2033 538,635 4.859% 185,717.75 724,352.75 7,105,644 7,105,644 06/01/2034 172,631.61 172,631.61 7,105,644 7,105,644
06/30/2034 896,984.36 7,105,644 7,105,644
12/01/2034 565,459 4.859% 172,631.61 738,090.61 6,540,185 6,540,185 06/01/2035 158,893.78 158,893.78 6,540,185 6,540,185
06/30/2035 896,984.39 6,540,185 6,540,185
12/01/2035 593,619 4.859% 158,893.78 752,512.78 5,946,566 5,946,566 06/01/2036 144,471.81 144,471.81 5,946,566 5,946,566
06/30/2036 896,984.59 5,946,566 5,946,566
12/01/2036 623,181 4.859% 144,471.81 767,652.81 5,323,385 5,323,385 06/01/2037 129,331.63 129,331.63 5,323,385 5,323,385
06/30/2037 896,984.44 5,323,385 5,323,385
12/01/2037 654,215 4.859% 129,331.63 783,546.63 4,669,170 4,669,170 06/01/2038 113,437.48 113,437.48 4,669,170 4,669,170
06/30/2038 896,984.11 4,669,170 4,669,170
12/01/2038 686,795 4.859% 113,437.48 800,232.48 3,982,375 3,982,375 06/01/2039 96,751.80 96,751.80 3,982,375 3,982,375
06/30/2039 896,984.28 3,982,375 3,982,375
12/01/2039 720,998 4.859% 96,751.80 817,749.80 3,261,377 3,261,377 06/01/2040 79,235.15 79,235.15 3,261,377 3,261,377
06/30/2040 896,984.95 3,261,377 3,261,377
12/01/2040 756,903 4.859% 79,235.15 836,138.15 2,504,474 2,504,474 06/01/2041 60,846.19 60,846.19 2,504,474 2,504,474
06/30/2041 896,984.34 2,504,474 2,504,474
12/01/2041 794,597 4.859% 60,846.19 855,443.19 1,709,877 1,709,877 06/01/2042 41,541.46 41,541.46 1,709,877 1,709,877
06/30/2042 896,984.65 1,709,877 1,709,877
12/01/2042 834,168 4.859% 41,541.46 875,709.46 875,709 875,709 06/01/2043 21,275.35 21,275.35 875,709 875,709
06/30/2043 896,984.81 875,709 875,709
12/01/2043 875,709 4.859% 21,275.35 896,984.35
06/30/2044 896,984.35
11,236,354 6,703,335.38 17,939,689.38 17,939,689.38
Dec 7, 2023 8:02 am Prepared by KNN Public Finance, LLC (Finance 8.901 Paramount:2023-SERIES01) Page 7

BOND DEBT SERVICE
City of Paramount
Equipment/Lease Purchase Agreement
(Water Meters Project)
(as of 12/7/2023)
Dated Date 12/19/2023
Delivery Date 12/19/2023
Period Bond Total
Ending Principal Coupon Interest Debt Service Balance Bond Value 06/30/2024 11,236,354 11,236,354
06/30/2025 107,944 4.859% 789,040.45 896,984.45 11,128,410 11,128,410 06/30/2026 365,126 4.859% 531,858.72 896,984.72 10,763,284 10,763,284 06/30/2027 383,309 4.859% 513,675.49 896,984.49 10,379,975 10,379,975 06/30/2028 402,398 4.859% 494,586.74 896,984.74 9,977,577 9,977,577 06/30/2029 422,437 4.859% 474,547.37 896,984.37 9,555,140 9,555,140 06/30/2030 443,474 4.859% 453,510.06 896,984.06 9,111,666 9,111,666 06/30/2031 465,559 4.859% 431,425.10 896,984.10 8,646,107 8,646,107 06/30/2032 488,744 4.859% 408,240.30 896,984.30 8,157,363 8,157,363 06/30/2033 513,084 4.859% 383,900.88 896,984.88 7,644,279 7,644,279 06/30/2034 538,635 4.859% 358,349.36 896,984.36 7,105,644 7,105,644 06/30/2035 565,459 4.859% 331,525.39 896,984.39 6,540,185 6,540,185 06/30/2036 593,619 4.859% 303,365.59 896,984.59 5,946,566 5,946,566 06/30/2037 623,181 4.859% 273,803.44 896,984.44 5,323,385 5,323,385 06/30/2038 654,215 4.859% 242,769.11 896,984.11 4,669,170 4,669,170 06/30/2039 686,795 4.859% 210,189.28 896,984.28 3,982,375 3,982,375 06/30/2040 720,998 4.859% 175,986.95 896,984.95 3,261,377 3,261,377 06/30/2041 756,903 4.859% 140,081.34 896,984.34 2,504,474 2,504,474 06/30/2042 794,597 4.859% 102,387.65 896,984.65 1,709,877 1,709,877 06/30/2043 834,168 4.859% 62,816.81 896,984.81 875,709 875,709 06/30/2044 875,709 4.859% 21,275.35 896,984.35
11,236,354 6,703,335.38 17,939,689.38
Dec 7, 2023 8:02 am Prepared by KNN Public Finance, LLC (Finance 8.901 Paramount:2023-SERIES01) Page 8

PROOF OF ARBITRAGE YIELD
City of Paramount
Equipment/Lease Purchase Agreement
(Water Meters Project)
(as of 12/7/2023)
Present Value
to 12/19/2023
Date Debt Service @ 4.8535074340%
12/01/2024 626,619.72 598,712.85
06/01/2025 270,364.73 252,203.52
12/01/2025 635,490.73 578,757.89
06/01/2026 261,493.99 232,506.99
12/01/2026 644,802.99 559,742.05
06/01/2027 252,181.50 213,727.65
12/01/2027 654,579.50 541,622.22
06/01/2028 242,405.24 195,822.53
12/01/2028 664,842.24 524,355.54
06/01/2029 232,142.13 178,750.72
12/01/2029 675,616.13 507,902.61
06/01/2030 221,367.93 162,473.20
12/01/2030 686,926.93 492,225.56
06/01/2031 210,057.17 146,952.75
12/01/2031 698,801.17 477,287.90
06/01/2032 198,183.13 132,153.93
12/01/2032 711,267.13 463,055.16
06/01/2033 185,717.75 118,042.93
12/01/2033 724,352.75 449,493.36
06/01/2034 172,631.61 104,587.57
12/01/2034 738,090.61 436,572.16
06/01/2035 158,893.78 91,757.13
12/01/2035 752,512.78 424,261.30
06/01/2036 144,471.81 79,522.36
12/01/2036 767,652.81 412,531.92
06/01/2037 129,331.63 67,855.34
12/01/2037 783,546.63 401,356.91
06/01/2038 113,437.48 56,729.51
12/01/2038 800,232.48 390,710.66
06/01/2039 96,751.80 46,119.51
12/01/2039 817,749.80 380,568.39
06/01/2040 79,235.15 36,001.18
12/01/2040 836,138.15 370,905.68
06/01/2041 60,846.19 26,351.51
12/01/2041 855,443.19 361,701.08
06/01/2042 41,541.46 17,148.53
12/01/2042 875,709.46 352,932.67
06/01/2043 21,275.35 8,371.34
12/01/2043 896,984.35 344,579.84
17,939,689.38 11,236,354.00
Proceeds Summary
Delivery date 12/19/2023
Par Value 11,236,354.00
Target for yield calculation 11,236,354.00
Dec 7, 2023 8:02 am Prepared by KNN Public Finance, LLC (Finance 8.901 Paramount:2023-SERIES01) Page 9 FORM 8038 STATISTICS
City of Paramount
Equipment/Lease Purchase Agreement
(Water Meters Project)
(as of 12/7/2023)
Dated Date 12/19/2023
Delivery Date 12/19/2023
Redemption
Bond Component Date Principal Coupon Price Issue Price at Maturity Bond Component:
12/01/2024 107,944.00 4.859% 100.000 107,944.00 107,944.00 12/01/2025 365,126.00 4.859% 100.000 365,126.00 365,126.00 12/01/2026 383,309.00 4.859% 100.000 383,309.00 383,309.00 12/01/2027 402,398.00 4.859% 100.000 402,398.00 402,398.00 12/01/2028 422,437.00 4.859% 100.000 422,437.00 422,437.00 12/01/2029 443,474.00 4.859% 100.000 443,474.00 443,474.00 12/01/2030 465,559.00 4.859% 100.000 465,559.00 465,559.00 12/01/2031 488,744.00 4.859% 100.000 488,744.00 488,744.00 12/01/2032 513,084.00 4.859% 100.000 513,084.00 513,084.00 12/01/2033 538,635.00 4.859% 100.000 538,635.00 538,635.00 12/01/2034 565,459.00 4.859% 100.000 565,459.00 565,459.00 12/01/2035 593,619.00 4.859% 100.000 593,619.00 593,619.00 12/01/2036 623,181.00 4.859% 100.000 623,181.00 623,181.00 12/01/2037 654,215.00 4.859% 100.000 654,215.00 654,215.00 12/01/2038 686,795.00 4.859% 100.000 686,795.00 686,795.00 12/01/2039 720,998.00 4.859% 100.000 720,998.00 720,998.00 12/01/2040 756,903.00 4.859% 100.000 756,903.00 756,903.00 12/01/2041 794,597.00 4.859% 100.000 794,597.00 794,597.00 12/01/2042 834,168.00 4.859% 100.000 834,168.00 834,168.00 12/01/2043 875,709.00 4.859% 100.000 875,709.00 875,709.00 11,236,354.00 11,236,354.00 11,236,354.00
Stated Weighted
Maturity Interest Issue Redemption Average
Date Rate Price at Maturity Maturity Yield
Final Maturity 12/01/2043 4.859% 875,709.00 875,709.00
Entire Issue 11,236,354.00 11,236,354.00 12.2777 4.8535% Proceeds used for accrued interest 0.00
Proceeds used for bond issuance costs (including underwriters' discount) 62,000.00 Proceeds used for credit enhancement 0.00
Proceeds allocated to reasonably required reserve or replacement fund 0.00