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04-06-2021 - AGENDA ITEM 11 CONSIDERATION OF CONSTRUCTION, LEASE PURCHASE, AND RENEWABLE ENERGY CREDIT AGREEMENTS IN CONNECTION WITH THE ENERGY SYSTEMS UPGRADES PROJECTAGENDA ITEM NO. 11 AGENDA STAFF REPORT City of West Covina I Office of the City Manager DATE: April 6, 2021 TO: Mayor and City Council FROM: David Carmany City Manager SUBJECT: CONSIDERATION OF CONSTRUCTION, LEASE PURCHASE, AND RENEWABLE ENERGY CREDIT AGREEMENTS IN CONNECTION WITH THE ENERGY SYSTEMS UPGRADES PROJECT RECOMMENDATION: It is recommended that the City Council take the following actions: 1. Conduct the public hearing, and 2. At the conclusion of the public hearing, consider adoption of the following resolution: RESOLUTION NO.2021-26 - A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF WEST COVINA, CALIFORNIA, AUTHORIZING THE EXECUTION AND DELIVERY OF A CONSTRUCTION AGREEMENT AND LEASE PURCHASE AGREEMENTS AND MAKING FINDINGS REQUIRED BY GOVERNMENT CODE SECTION 4217.10 ET SEQ. IN CONNECTION WITH THE CITY'S ENERGY SYSTEMS UPGRADES PROJECT 3. Authorize the City Manager to negotiate and execute any amendments to the agreements authorized by the Resolution. 4. Authorize the City Manager to negotiate and execute renewable energy credit agreements. BACKGROUND: Energy service contracts are authorized by California Government Code section 4217.10 et seq. Government Code section 4217.12 provides that a public agency may enter into an energy service contract on such terms as the City Council determines are in the best interest of the City if "the anticipated cost to the public agency for thermal or electrical energy or conservation services provided by the energy conservation facility under contract will be less than the anticipated marginal cost to the public agency of thermal, electrical, or other energy that would have been consumed in the absence of these purchases." This simply means that the energy savings over the lifetime of the project will be equal to or greater than the project costs. Authority for contracts. Government Code section 4217.13 authorizes a public agency to enter into a facility financing contract and facility ground lease if the governing body determines that funds for the repayment of the financing or the cost of design, construction, and operation of the energy conservation facility, or both, as required by the contract, are projected to be available from revenues resulting from sales of electricity or thermal energy from the facility or from funding that otherwise would have been used for purchase of electrical, thermal, or other energy required by the public agency in the absence of the energy conservation facility, or both. Previous City Council action. On October 6, 2020, the City Council conducted a public hearing in accordance with the requirements of Government Code section 4217.10 et seq. At the conclusion of the public hearing, the City Council adopted Resolution No. 2020-103, authorizing the execution and delivery of an Installation Agreement and a Measurement & Verification Agreement with Alliance Building Solutions, Inc. (ABS), related solar purchase agreements and solar lease agreements with Distributed Solar Development, LLC, and the negotiation and execution of a financing agreement on terms that were equal to or better than those proposed by Alliance Funding Solutions, Inc., and making the findings required by Government Code section 4217.10 et seq. The City selected ABS following a formal solicitation for Energy Efficiency Contracting Services. After receiving and reviewing four proposals in response to the City's solicitation, the City determined that ABS had the most comprehensive proposal and demonstrated the best understanding of the required services. During the course of the City's contract negotiations with Distributed Solar Development, LLC, relating to the solar component of the energy systems upgrades, ABS presented the City with an alternative approach for implementing the project, which included DS Energy Solutions' design and installation of the solar energy facilities and Lease Purchase Agreements with Alliance Funding Solutions, Inc. that would result in greater savings to the City than initially contemplated in October 2020. Under the initial approach that was approved by the City Council in October, the City was anticipated to have net savings of $1,888,538 over the life of the project. Based upon information provided by ABS, the net savings to the City that would result from the project under the alternative approach is anticipated to be $4,927,417, resulting in additional savings of $3,000,000. DISCUSSION: California Environmental Quality Act ()CEQA). The Project is exempt from CEQA pursuant to the statutory exemption outlined in Public Resources Code, section 21080.35 for installation of solar energy systems. Specifically, that section states that CEQA "does not apply to the installation of a solar energy system on the roof of an existing building or at an existing parking lot." Pub. Res. Code § 21080.35. A solar energy system "includes all associated equipment." Id. "Associated equipment consists of parts and materials that enable the generation and use of solar electricity or solar -heated water, including any monitoring and control, safety, conversion and emergency responder equipment necessary to connect to the customer's electrical service or plumbing and any equipment, as well as any equipment necessary to connect the energy generated to the electrical grid, whether that connection is onsite or on an adjacent parcel of the building and separated only by an improved right-of-way." Id. An "existing parking lot" is defined as "an area designated and used for parking of vehicles as of the time of the application for the solar energy system and for at least the previous two years." Id. The Project meets this exemption because it involves installation of energy efficient fixtures and improvements and the installation and operation of solar energy facilities on existing rooftops and carports at City owned facilities. Further, no native trees older than 25 years or trees required to be planted, maintained, or protected pursuant to local, state, or federal requirements will need to be removed as a direct result of the Solar Project, no take permits are necessary, no streambed alteration agreements are necessary, and no permits pursuant to Section 401 or 404 of the federal Clean Water Act or waste discharge requirements pursuant to the Porter -Cologne Water Quality Control Act are necessary. The Project is also exempt from CEQA under a Class 1 categorical exemption (14 C.C.R. § 15301) because it involves the minor alteration of existing facilities with improvements that would lead to negligible or no expansion of use beyond the use existing at this time. The installation of solar energy facilities on existing carports and rooftops will make the City more energy efficient. The solar energy facilities would not lead to an intensification of the existing uses because the improvements do not expand building square footage or office space. Furthermore, the Project does not involve any improvements that would increase the maximum employee capacity. In all, the Project would result in net environmental benefits by reducing traditional electrical energy consumption of the City. Therefore, the Project would be exempt under a Class 1 exemption. The Solar Project is also exempt from CEQA because it involves the construction of minor structures accessory to existing facilities. 14 C.C.R. § 15311. As explained above, involves installation of energy efficient fixtures and improvements and the installation and operation of solar energy facilities on existing rooftops and carports at City owned facilities. The solar panels would lie within the existing permitted height of the City's buildings. Views would not be interrupted by the solar panels, and they would blend with the existing structures. Therefore, the Solar Project would be exempt under a Class 11 exemption. The Project is also exempt from CEQA under CEQA section 15303 (new construction or conversion of small structures) and CEQA section 15061 (common sense exemption) because the Project involves installation of energy efficient fixtures and improvements and the installation and operation of solar energy facilities on rooftops and carports at City owned facilities that will benefit the environment by creating more renewable energy. None of the exceptions to the categorical exemptions apply. 14 C.C.R. § 15300.2. Specifically, the Project is not located in a particularly sensitive environment. The improvements will be installed on existing structures in developed areas. The cumulative impact of successive projects of this same type in the same place over time would not be significant because the facilities are limited in size. The Project involves installation of energy efficient fixtures and improvements and the installation and operation of solar energy facilities on rooftops and carports at City owned facilities. These types of improvements are not unusual. Moreover, the carports and buildings impacted by the Project are not located within an officially designated state scenic highway. Thus, the Project would not have an impact in this regard. Similarly, the proposed improvements are not located on sites designated pursuant to Government Code section 65962.5. Finally, the Project does not involve any improvements, modifications, or other changes to a historical resource. Therefore, none of the circumstances outlined in Title 14, California Code of Regulations, section 15300.2 apply. California Government Code notice requirements. Pursuant to Government Code sections 4217.12 and 4217.13, which require that the City Council make the required findings at a regularly scheduled public hearing and that public notice be given at least two weeks in advance of the public hearing, the City published notice of tonight's public hearing on March 22, 2021 in the San Gabriel Valley Tribune, indicating that the City Council will be considering entering into an agreement with DS Energy Solutions for the construction and installation of solar photovoltaic systems at City facilities, entering into related financing agreements with Alliance Funding Solutions, Inc. for the repayment of the costs associated with the implementation of the solar photovoltaic systems and energy systems upgrades project, and making findings and determinations required by Government Code section 4217.10 et seq. The notice was also published on the City's website. Required findings. At the public hearing during the April 6, 2021 meeting, the City Council will be presented information in support the findings required by Government Code sections 4217.12 and 4217.13 to enter into an energy service contract for the solar component and financing contracts and will seek comments from the public and any other interested parties regarding the proposed action to authorize the execution of the contracts. As outlined above, the findings for the energy services contract shall provide that the cost to the City to implement the energy related improvements will be less than the anticipated marginal cost to the City of thermal, electrical, or other energy that would have been consumed by the City in the absence of purchasing the energy improvements. Financing proposal. Alliance Funding Solutions, Inc. has presented a revised financing proposal which includes financing the installation of energy efficient fixtures and improvements at a net financing amount of $3,215,098.00 at an interest rate of 3.050% over a 15-year term, with payments totaling $4,065,973.74 ("Energy Project Financing"), and financing the installation and operation of solar energy facilities on rooftops and carports in a net financing amount of $3,386,950.00 at an interest rate of 3.600% over a 20-year term, with payments totaling $4,971,348.94 ("Solar Project Financing"). As outlined during the October 6, 2020 public hearing, the proposed energy efficiency improvements are proposed on the following facilities: Cameron Park & Community Center City Yard Civic Center (Police Department/ Communication Center/ Parking Garage/ City Hall) ire Station No. 1 ire Station No. 2 ire Station No. 3 ire Station No. 4 Palm View Center Senior Center Shadow Oak Recreation Center & Park Proposed energy efficiency improvements include: • Lighting Improvements: o Interior LED Lighting Upgrades o Exterior LED Lighting Upgrades o Install Dual Technology Occupancy Sensors • Mechanical Improvements o New High Efficiency HVAC Unit Replacements o HVAC Unit Efficiency Retrofit • Controls o Install Smart Programmable Thermostats o Install Energy Management Systems (EMS) • Self Generation o Install Solar Photovoltaic (PV) System • Building Envelope o Roof Replacement • Other o Transformer Replacements o MPTS Power Quality Installation o Install New Modular Restroom The total project amount for the proposed energy efficiency improvements is $7,592,048. The City will make a capital contribution of $1,000,000. Therefore, with the costs of issuance ($10,000), the City will finance $6,602,048. The project savings throughout the duration ofthis project is anticipated to be $14,964,740. The total cost to the City with the Energy Project Financing and the Solar Project Financing will be $9,037,323. Therefore, the anticipated net savings to the City over the life of the contracts is $4,927,417. As outlined above, this new approach is anticipated to save the City an additional $3,000,000 over the life of the project as compared to the approach approved in October 2020. By adopting the proposed resolution, the City Council will authorize the execution and delivery of a construction agreement for the solar component of the energy systems upgrades and lease purchase agreements and make the findings required by Government Code section 4217.10 et seq. The resolution provides the City Manager, in consultation with the City Attorney, with the authority to negotiate the terms of the agreements, including modifying the forms of the agreements to be utilized, provided that the terms of such agreements are equal to or better than those set forth above relating to the project financing. Staff is also requesting that the City Council authorize the City Manager to execute renewal energy credit agreements. Renewable energy certificates (also known as renewable energy credits, or RECs) represent the energy generated by renewable energy sources such as solar. RECs represent the clean energy attributes of renewable electricity. Buyers are using these RECs to offset brown power in their process, thereby reducing the carbon intensity of their production. The price of RECs fluctuate and is directly correlated to the Low Carbon Fuel Standards ("LCFS") market. Each MWh of production gives the city 1 REC that can be sold. The total RECs are calculated annually based on previous year's production. The proposed solar system will produce approximately 2,215 MWh and provide the city with 2,215 RECs. Once the solar system has produced electricity for one year, Alliance will work with the City to sell RECs to a buyer that wants to reduce its carbon footprint. LEGAL REVIEW: The City Attorney's Office has reviewed and approved the resolution as to form and is working with staff on all agreements related to the project. OPTIONS: The City Council has the following options: 1. Approve staff's recommendation; or 2. Provide alternative direction. Prepared by: Brittany Roberto, Deputy City Attorney Fiscal Impact FISCAL IMPACT: Funds for the $1,000,000 City contribution are budgeted in the CIP account fund 160. Attachments Attachment No. 1 - Presentation Attachment No. 2 - Resolution No. 2021-26 Attachment No. 3 - Sample Solar Construction Agreement Attachment No. 4 - Sample Lease Purchase Agreement (Energy Project) Attachment No. 5 - Sample Lease Purchase Agreement (Solar Project) CITY Achieve Fiscal Sustainability and Financial Stability COUNCIL Enhance City Facilities and Infrastructure GOALS & Enhance the City Image and Effectiveness OBJECTIVES: City of West Covina Energy Efficiency Project [j.J ALLIANCE BUILDING SOLUTIONS, INC Current Energy Costs -�v - Dollars Per Sq. Ft Energy Cost 4.00 3.13 3.00 2.90 2.84 2.00 2.33 2.09 2.03 1.84 1.71 Annual Energy Usage 1.33 $465, 658 1.06 1.00 ■ ■ 0.00 Ge"te, Gentel a<,01% Ge�,el at1O� Ge0kel Ge°del a��0(% *,O°5 1,0�3 041r, V�ev+ �a<a I Fi<e Sti & COO& I f je 5, Ser�OC a°� pakReO Ate St F\<e sta f je Sta 016 Qa�K sha Gam Op fir] ALLIANCE Scope Matrix- Recommended Scope of Work «,,; Self Building Lighting Mechanical Controls Other Generation Envelope Install New High Install Smart Install Install Solar Interior LED Exterior LED Dual Technology Efficiency HVAC Unit Programmable Energy Photovoltaic Roof Transformer Power Quality er u Install New Lighting Upgrades Lighting Upgrades Occupancy HVAC Unit Efficiency Retrofit Thermostats Management (PV) System Replacement Replacements Installation Modular Resiroom Sensors Replacements System (EMS) Cameron Park & Comm unity V V V V Center City Yard V V V V Civic Center V V V V PD / CC / CH / PG) (PD / CC) (PG) (PD / CC) (PD / CH) (CC/CH) (PD / CC / CH) (CH) (CH, CC, PD) (CH, CC, PD) Fire Station 1 Fire Station 2 Fire Station 3 V Fire Station 4 Fire Station 5 Palm View Center V V V V V Senior Center V V V V Shadow Oak Rec enter & Park* PD - Police Department CC- Communications Center PG - Parking Garage CH -City Hall *Shadow Oak Park includes park field lighting *For room by room facility scope breakouts, please refer to ECM inventory sheets. HVAC i New High Efficiency HVAC Unit Replacements • (12) Units • (4) sites City Yard , City Center (PD & City Hall), Palm View, FS 3 f HVAC Unit Efficiency Retrofit • (19) Units • (4) sites City Yard , Police Department, Palm View F's x:�.---is�r r•-:ems Average Unit Age: 24 years All HVAC units being replaced have been identified as dilapidated, past their useful life, inefficient, and have caused City staff issues through maintenance and repairs. [ jM ALLIANCE 'HVAC unit efficiency retrofit includes: Unit Refurbishment and/or VFD installation, B U I L D I N G S 0 L U T 10 N 5, I N C 'For room by room HVAC unit specifications, please see HVAC Inventory Sheet Lighting drP Interior Lighting • Interior LED Upgrades • (9) Sites Ej Exterior Lighting • Exterior LED Upgrades (9) sites do Occupancy Sensors • (4) Sites 'Shadow Oak Park to include field lighting retrofits [jr] ALLIANCE B U I L D I I i I r; 1,' . I N 'For room by room lighting specifications, please see Lighting Inventory Sheet r0% Controls rim HVAC Controls System • Install Smart WiFi Programmable Thermostats • (6) Sites rj HVAC Controls System • Install Energy Management System (EMS) with optimized sequence of operations • (1) Site I Civic Center o f0 a am [jLj ALLIANCE BUILDING SOLUTIONS, N C 'For room by room control unit specifications, please see Controls Inventory Sheet Building Envelope - Roofing Ej Roof replacement • Re -roofing with energy efficient cool roof • (2) site! N� i' rmw,.�n.a - �� nmvuwam«ma 1 ALLIANCE BUILDING SOLUTIONS, INC 'Roofing upgrade measures will include a full tear off and replacement of existing roof t 0 Medffig ©TPO Bonding MhcHe O Roof Iwlxbn o�� Solar rj Solar System • Install Solar Photovoltaic (PV) System • System Purchase • (4) sites Specifications 1.2 MW DC Car Port & Roof Mount pVJ BUILDING Solar Layout — Cameron Park OV [jLj Solar Layout - City Yard [jM ALLIATNNCE Solar Layout — Civic Center [jM ALLIATNNCE - I- -4 4 1 fN x Other - Transformers rj Transformer Retrofit • Install New High Efficiency Transformers • (9) Units • (2) Sites 'Addressing Civic Center power surge and outage issues ALLIANCE Other - Bathroom Installation do Bathroom Installation • Install New Modular Bathroom at Shadow Oak Recreation Center • (1) Site 1 = PLAN / �' �76' 1'-IY [jr] ALLIATNNCE a�mimiaa ra�miaawuml- © ; I11IIG�'II � � li. © . so Project Benefits &Environmental Attributes Project Benefits r-� Significant reduction in utility costs rim Addresses millions of dollars in facility and deferred maintenance needs, through a budget neutral solution leveraging energy savings to fund project Eim Total project net savings of $4.9 Million Eim Allows West Covina to take strides towards investments into clean energy and sustainability in order to meet climate action goals OV [jMALLIATNNCE Environmental Attributes OO 1,053,997 Miles driven Miles an average passenger vehicle OO 507 acres of U.S. forests in one year O 470,493 Pounds of coal burned Reduction in Greenhouse Gas Reduced Carbon Emissions Reduced Carbon Emissions Emissions from 1,053,997 Miles in the Equivalent to Carbon in the Equivalent of 470,493 Driven by the Average Sequestered by 507 Acres of Pounds of Coal Burned Passenger Vehicle Every Year Trees Every Year Every Year Project Overview Total Project Amount $795929048 c� LED Lighting Upgrades mr] Occupancy Sensor Upgrades mr] HVAC Upgrades mr] Controls Upgrades i� Solar Photovoltaic mr] Roof Upgrades/Replacements mr] Transformer Replacements mr-3 Bath Room Installation Capital Contribution: Total Project Savings $'°00 0 °000 $1499649740 (9) Sites - Interior & Exterior Lighting Upgrades (4) Sites - Dual Technology Occ Sensors (7) Sites - HVAC Unit Replacement & Unit Efficiency Upgrades (6) Sites - Smart Wi-Fi Programmable Thermostats (4) Sites — 1.2 MW Solar System (2) Sites - Cool Roof Installation (2) Sites - Transformer Retrofit (1) Site — Modular Bathroom Installation L]j ALLIANCE BUILDING SOLUTIONS, INC www.absenergy.com ATTACHMENT NO. 2 I S D1.1I1 lily Y (17��►[���ly;b�: A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF WEST COVINA, CALIFORNIA, AUTHORIZING THE EXECUTION AND DELIVERY OF A CONSTRUCTION AGREEMENT AND LEASE PURCHASE AGREEMENTS AND MAKING FINDINGS REQUIRED BY GOVERNMENT CODE SECTION 4217.10 ET SEQ. IN CONNECTION WITH THE CITY'S ENERGY SYSTEMS UPGRADES PROJECT WHEREAS, pursuant to Public Resources Code section 25008, it is the policy of the State of California and the intent of the Legislature to promote all feasible means of energy conservation and all feasible uses of alternative energy supply sources; and WHEREAS, California Government Code section 4217.10 et seq. authorizes a public agency to enter into an energy service contract if its governing body determines, at a regularly scheduled public hearing, public notice of which is given at least two weeks in advance, that the anticipated cost to the agency will be less than the anticipated marginal cost to the agency of electrical energy that would have been consumed by the agency in the absence of the energy service contract; and WHEREAS, the City of West Covina ("City") desires to reduce the steadily rising costs of meeting the energy needs at City facilities; and WHEREAS, Alliance Building Solutions, Inc. ("Alliance"), in partnership with DS Energy Systems, a division of Motive Energy Telecommunications Group, Inc. ("DS Energy") , have developed and proposed an energy efficiency project for the City that includes the implementation of energy related improvements that will reduce the cost of energy through the installation of energy efficient fixtures and improvements and the installation and operation of solar energy facilities on rooftops and carports at City -owned facilities ("Project"); and WHEREAS, on October 6, 2020, the City Council, after a duly noticed public hearing, adopted Resolution No. 2020-103, authorizing the execution and delivery of an Installation Agreement and a Measurement & Verification Agreement with Alliance, related solar purchase agreements and solar lease agreements with Distributed Solar Development, LLC, and the negotiation and execution of a financing agreement on terms that were equal to or better than those proposed by Alliance Funding Solutions, Inc., and making the fmdings required by Government Code section 4217.10 et seq.; and WHEREAS, during the course of the City's contract negotiations with Distributed Solar Development, LLC, Alliance presented the City with an alternative approach for implementing the Project, which included DS Energy's design and installation of the solar energy facilities and Lease Purchase Agreements with Alliance Funding Solutions, Inc. that would result in greater savings to the City than initially contemplated in October 2020; and WHEREAS, the City now proposes to enter into a construction agreement with DS Energy for the solar energy facilities and Lease Purchase Agreements with Alliance Funding Solutions, Inc. for the implementation of the Project (collectively, the "Project Documents"); and WHEREAS, the sites where the energy efficiency improvements and solar facilities will be located are set forth on Exhibit "A," attached hereto and incorporated herein; and WHEREAS, Alliance provided the City with an updated analysis showing the benefits of implementing certain energy conservation measures through the installation of energy efficiency improvements and solar photovoltaic energy generating facilities ("Analysis"). The Analysis is attached hereto as Exhibit `B" and incorporated herein; and WHEREAS, the Analysis includes data showing that the anticipated cost to the City for the electrical energy and conservation services provided by the Project will be less than the anticipated marginal cost to the City of electrical and other energy that would have been consumed by the City in the absence of such measures; and WHEREAS, the City Council desires to enter into the Project Documents substantially in the form presented at this meeting, subject to such changes, insertions, or omissions as the City Manager in consultation with the City Attorney reasonably deems necessary or appropriate following the City Council's adoption of this Resolution; and WHEREAS, Government Code section 4217.13 authorizes a public agency to enter into a facility financing contract and facility ground lease if the governing body determines, at a regularly scheduled public meeting, public notice of which is given at least two weeks in advance, that funds for the repayment of the financing or the cost of design, construction, and operation of the energy conservation facility, or both, as required by the contract, are projected to be available from revenues resulting from sales of electricity or thermal energy from the facility or from funding that otherwise would have been used for purchase of electrical, thermal, or other energy required by the public agency in the absence of the energy conservation facility, or both; and WHEREAS, Alliance Funding Solutions, Inc. presented to the City a financing proposal for the Project which included (i) financing the installation of energy efficient fixtures and improvements in a net financing amount of $3,215,098.00 at an interest rate of 3.050% over a 15- year term, with payments totaling $4,065,973.74 (the "Energy Project Financing"), and (ii) financing the installation and operation of solar energy facilities on rooftops and carports in a net financing amount of $3,386,950.00 at an interest rate of 3.600% over a 20-year term, with payments totaling $4,971,348.94 (the "Solar Project Financing" and together with the Energy Project Financing, the "Project Financing"); and WHEREAS, the City Council desires to authorize the Project Financing and the Project Documents; and WHEREAS, in accordance with Government Code section 4217.10 et seq., the City gave notice of this public hearing at least two (2) weeks prior to the date of this hearing; and WHEREAS, the City's proposed approval of the Project is a "project" for purposes of the California Environmental Quality Act ("CEQA"); and WHEREAS, the CEQA Guidelines (Title 14 California Code of Regulations Section 15000 et seq.) exempt certain projects from further CEQA evaluation; and WHEREAS, the City has reviewed the Project and determined that it is exempt from the provisions of CEQA pursuant to the CEQA Guidelines and that no exceptions to the exemption apply. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF WEST COVINA, CALIFORNIA DOES RESOLVE AS FOLLOWS: SECTION 1. Pursuant to California Government Code section 4217.10 et seq., the City Council hereby finds and determines that all of the recitals set forth above are true and correct. SECTION 2. The City Council hereby finds that the Project Financing and the terms of the Project Documents in the form presented at this City Council meeting are in the best interests of the City. SECTION 3. In accordance with Government Code section 4217.12, and based on data provided by the Analysis, the City Council finds that the anticipated cost to the City for electrical energy and conservation services provided by the Project will be less than the anticipated marginal cost to the City of electrical and other energy that would have been consumed by the City in the absence of the Project. SECTION 4. The City Council hereby finds that the Project is exempt from CEQA on multiple grounds, each of which is independently sufficient to exempt the whole of the Project from CEQA, including: a. The Project is exempt from CEQA pursuant to the statutory exemption outlined in Public Resources Code section 21080.35 for installation of solar energy systems. Specifically, that section states that CEQA "does not apply to the installation of a solar energy system on the roof of an existing building or at an existing parking lot." Pub. Res. Code § 21080.35. A solar energy system "includes all associated equipment." Id. "Associated equipment consists of parts and materials that enable the generation and use of solar electricity or solar -heated water, including any monitoring and control, safety, conversion and emergency responder equipment necessary to connect to the customer's electrical service or plumbing and any equipment, as well as any equipment necessary to connect the energy generated to the electrical grid, whether that connection is onsite or on an adjacent parcel of the building and separated only by an improved right-of-way." Id. The Project meets this exemption because it involves installation of energy efficient fixtures and improvements and the installation and operation of solar energy facilities on existing rooftops and carports at City owned facilities. b. The Project is exempt from CEQA under a Class 1 categorical exemption (14 C.C.R. § 15301) because it involves the minor alteration of existing facilities with improvements that would lead to negligible or no expansion of use beyond the use existing at this time. The installation of solar energy facilities on existing carports and rooftops will make the City more energy efficient. The solar energy facilities would not lead to an intensification of the existing uses because the improvements do not expand building square footage or office space. Furthermore, the Project does not involve any improvements that would increase the maximum employee capacity. In all, the Project would result in net environmental benefits by reducing traditional electrical energy consumption of the City. Therefore, the Project would be exempt under a Class 1 exemption. C. The Project is exempt from CEQA under a Class 3 exemption (14 C.C.R. § 15303) (new construction or conversion of small structures) because the Project involves installation of energy efficient fixtures and improvements and the installation and operation of solar energy facilities on rooftops and carports at City owned facilities that will benefit the environment by creating more renewable energy. d. The Project is exempt from CEQA under the common sense exemption (14 C.C.R. § 15061(b)(3)) because CEQA applies only to projects which have the potential for causing a significant effect on the environment, and it can be seen with certainty that there is no possibility that the Project may have a significant effect on the environment. e. The Project is exempt from CEQA under a Class 11 exemption (14 C.C.R. § 15311) because it involves the construction of minor structures accessory to existing facilities. As explained above, the Project involves installation of energy efficient fixtures and improvements and the installation and operation of solar energy facilities on existing rooftops and carports at City -owned facilities. The solar panels would lie within the existing permitted height of the City's buildings. Views would not be interrupted by the solar panels, and they would blend with the existing structures. Therefore, the Project would be exempt under a Class 11 exemption. None of the exceptions to the categorical exemptions set forth in 14 C.C.R. § 15300.2 apply. Specifically, the Project is not located in a particularly sensitive environment. The improvements will be installed on existing structures in developed areas. The cumulative impact of successive projects of this same type in the same place over time would not be significant because the facilities are limited in size. As explained above, the Project involves installation of energy efficient fixtures and improvements and the installation and operation of solar energy facilities on rooftops and carports at City -owned facilities. These types of improvements are not unusual. Moreover, the carports and buildings impacted by the Project are not located within an officially designated state scenic highway. Thus, the Project would not have an impact in this regard. Similarly, the proposed improvements are not located on sites designated pursuant to Government Code section 65962.5. Finally, the Project does not involve any improvements, modifications, or other changes to a historical resource. Therefore, none of the circumstances outlined in 14 C.C.R. § 15300.2 apply. SECTION 5. The City Council hereby (i) confirms its approval of the Project, and an award of an installation agreement to Alliance Building Solutions, Inc. for the energy related improvements, and (ii) approves the Project Financing, a construction agreement with DS Energy for the solar energy facilities and Lease Purchase Agreements with Alliance Funding Solutions, Inc. for the implementation of the Project in accordance with Government Code sections 4217.12 and 4217.13 SECTION 6. The City Manager, in consultation with the City Attorney, is hereby authorized and directed to negotiate any further changes, insertions and omissions to the Project Documents as the City Manager reasonably deems necessary, including modifying the forms of the agreements to be utilized, provided that the terms of such agreements are equal to or better than those set forth in this Resolution relating to the Project Financing, and thereafter to execute and deliver the Project Documents. The City Manager is further authorized and directed to execute or cause to be executed any and all papers, instruments, opinions, certificates, affidavits and other documents and to do or cause to be done any and all other acts and things necessary or proper for carrying out this Resolution and said agreements. This authorization is intended to provide the City Manager with the authorization to execute any and all agreements and documents related to implementation of the Project, provided that the terms of any such agreements are equal to or better than those set forth in this Resolution relating to Project Financing. SECTION 7. In accordance with Government Code section 4217.13, the City Council hereby finds that funds for the repayment of the Project Financing are projected to be available from funding that otherwise would have been used for the purchase of electrical energy required by the City in the absence of the energy conservation facilities. SECTION 8. This Resolution is intended to supplement Resolution No. 2020-103. In the event of any inconsistencies between the provisions of Resolution No. 2020-103 and the provisions of this Resolution, the provisions of this Resolution shall govern. SECTION 9. The City Council hereby authorizes and directs City staff to file and process a Notice of CEQA Exemption for the Project in accordance with CEQA, the CEQA Guidelines and the findings set forth in this Resolution. SECTION 10. The City Clerk shall certify to the adoption of this Resolution and shall enter the same in the book of original resolutions and it shall become effective immediately. APPROVED AND ADOPTED this 6th day of April, 2021. Letty Lopez-Viado Mayor APPROVED AS TO FORM ATTEST Thomas P. Duarte Lisa Sherrick City Attorney Assistant City Clerk I, LISA SHERRICK, Assistant City Clerk of the City of West Covina, California, do hereby certify that the foregoing Resolution No. 2021-26 was duly adopted by the City Council of the City of West Covina, California, at a regular meeting thereof held on the 6th day of April, 2021, by the following vote of the City Council: AYES: NOES: ABSENT: ABSTAIN: Lisa Sherrick Assistant City Clerk EXHIBIT A LOCATIONS OF IMPROVEMENTS 1. Improvements relating to the solar project will be made at the following sites: a. Cameron Park Community Center, 1305 E Cameron Ave, West Covina, CA 91790. b. City Yard, 825 S Sunset Ave, West Covina, CA 91790. c. Civic Center, 1444 W Garvey Ave S, West Covina, CA 91790. d. Senior Center, 2501 E Cortez St, West Covina, CA 91791. 2. Improvements relating to the energy project will be made at the following sites: a. Cameron Park Community Center, 1305 E Cameron Ave, West Covina, CA 91790 b. City Yard, 825 S Sunset Ave, West Covina, CA 91790 c. Civic Center, 1444 W Garvey Ave S, West Covina, CA 91790 d. Fire Station 2, 2441 E Cortez St, West Covina, CA 91791 e. Fire Station 3, 1433 W Puente Ave, West Covina, CA 91790 f. Fire Station 4, 1815 S Azusa Ave, West Covina, CA 91792 g. Palm View Center, 1340 E Puente Ave, West Covina, CA 91790 h. Senior Center, 2501 E Cortez St, West Covina, CA 91791 i. Shadow Oak Rec Center, 2121 Shadow Oak Dr, West Covina, CA 91792 j. Shadow Oak Park, 2121 Shadow Oak Dr, West Covina, CA 91792 EXHIBIT B COST ANALYSIS Santa Cruz County Bank and Truist Bank - Finance ff3 ALLIANCE Cash Flow City of West Covina Year0 Year1 Year2 Year3 Year4 Year5 Year6 Year? Year8 Year9 Year 10 Year 11 Year 12 Year 13 Year 14 Year 15 Year 16 Year 17 Year 18 Year 19 Year 20 Year 21 Year 22 Year 23 Year 24 Year 25 Year 26 Year 27 Year 28 Year 29 YearM Totals Energy Effid-e Savings $82,221 $85,510 $88,930 $92,481 $96,187 $100,034 $104,036 $108,197 $112,525 $117,026 $121,707 $126,575 $131,638 $136,904 $142,380 $16,925 $17,602 $18,306 $19,038 $19,800 $20,592 $21,416 $22,272 $23,163 $24,090 $25,053 $26,055 $27,098 $28,181 $29,309 $1,985,260 0&M savi ngs $94,658 $96,551 $98,482 $300,452 $102,461 $81,969 $65,575 $52,460 $41,968 $29,378 $20,564 $14,395 $10,077 $7,054 $4,937 $820,980 Solar Savings $231,931 $240,002 $248,348 $256,977 $265,9W $275,125 $284,663 $294,523 $304,717 $315,255 $326,149 $337,409 $349,049 $361,080 $373,515 $386,367 $399,650 $413,377 $427,563 $442,222 $457,370 $473,023 $489,195 $505,905 $523,168 $541,004 $559,429 $578,462 $598,123 $618,432 $11,877,933 LCR&REC, $0 $55,567 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $280,567 Total Program Savings 1 $408,810 1 $477,6301 $460,7601 $474,9161 $489,548 1 $482,128 1 $479,274 1 $480,180 1 $484,210 $486,659 $493,420 $478,379 $490,764 $505,038 $520,833 $403,292 $417,252 $431,683 $446,601 $462,022 $477,962 $494,439 $511,467 $529,068 $547,258 $566,057 $585,4M $605,560 $626,304 $647,741 $14,964,740 Funding Mechanism: Energy Efficiency Project Amoun[- $3,210,098 Finance-Truist Renewable Project Amount- $4,381,950 Finance-SCCa Total Proj,d Amount- $7,592p4B Energy Lease Pay men[ $198,830 $217,631 $2111761 $2111116 $279,548 $272,128 $269,274 $270,180 $174:111 $276,658 $283,420 $268,380 $280,764 $295,038 $114,258 $0 $0 $0 $0 $0 10 10 10 10 $0 10 $0 $0 $0 $0 $4,a65,974 Solar Lease Payment $230,000 $210,000 $230,000 $230,000 $230,001 $230,000 $230,000 $230,000 $230,000 $230,000 $230,000 $230,000 $230,000 $230,000 $206,576 $403,292 $342,252 $356,684 $3]3,602 $350,943 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $4,971,349 Total Program PaymeMs 1 $408,810 1 $477,6301 $460,7601 $474,9161 $489,548 1 $482,128 1 $479,274 1 $480,180 1 $484,210 1 $486,658 1 $493,420 1 $478,380 1 $490,764 1 $505,038 1 $520,834 1 $403,292 1 $342,252 $356,684 $371,602 $350,M3 $0 $0 $0 $0 I $0 I $0 $0 $0 $0 $0 $9,037,323 Net Annual Cash Flow ($0) ($0) $0 $0 (50) $0 ($0) $0 $0 $1 $0 (51) (50) (50) (51) $0 $]5,000 $71,999 $74,999 $111,079 1477,962 $494,439 $511,467 $529,068 $547,258 $566,057 $585,4M $605,560 $626,304 $647,741 $5,927,417 Net Cumulative Cash Flow 1501 I50) $0 $1 50 50 50 50 50 51 51 51 51 50 ($11 ($11 $74,999 $149,999 $224,998 $336,077 $814,039 $1,308,478 $1,819,945 $2,349,013 $2,896,271 $3,462,328 $4,04],812 $4,653,372 $5,279,676 $5,927,417 `City will own the solar system from the beginning Downpayment $1,000,000 Net Savings subtracts the$1M cash paid for project Net Savings = $4,927,417 ATTACHMENT NO.3 SOLAR PV SYSTEM CONSTRUCTION AGREEMENT This SOLAR PV SYSTEM CONSTRUCTION AGREEMENT (this "Aereernent'), dated Error! Reference source not found. (the "Effective Date'), is by and between DS Energy Solutions, a division of Motive Energy Telecommunications Group, Inc, a California Corporation ("Contractor'), and Error! Reference source not found. Error! Reference source not found., a Error! Reference source not found ("Owner') (each a Part ' and together the "Parties'). RECITALS WHEREAS, Contractor has offered to design, engineer, supply, construct, install and commission for Owner a solar-photovohaic system having an output capacity of approximately Error! Reference source not found (otherwise known as the "Solar System ) and having the other characteristics more fully described in Exhibit A and Exhibit B (the "System') to be installed at the facility location as more fully described in Exhibit C (the "Site'); WHEREAS, Owner desires to engage Contractor to design, engineer, supply, construct, install and commission the System at the Site; and WHEREAS, Contractor desires to provide such services to Owner, all in accordance with the terms and conditions set forth in this Agreement. NOW THEREFORE, in consideration of the mutual promises set forth below, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows: AGREEMENT Definitions. Unless otherwise required by the context in which any term appears: (a) capitalized terms used in this Agreement shall have the respective meanings set forth in this Section 1; (b) the singular shall include the plural and vice versa; (c) the word `including" shall mean "including, without limitation", (d) references to "Sections" and "Exhibits" shall be to sections, schedules and exhibits hereof; (e) the words "herein", "hereof' and "hereunder" shall refer to this Agreement as a whole and not to any particular section or subsection hereof; and (f) references to this Agreement shall include a reference to all schedules and exhibits hereto, as the same may be amended, modified, supplemented or replaced from time to time. "Agreement" shall have the meaning set forth in the preamble. "Applicable Law" shall mean, with respect to arty Govemmental Authority, any constitutional provision, law, statute, rule, regulation, ordinance, treaty, order, decree, judgment, decision, certificate, injunction, registration, license, permit, authorization, guideline, governmental approval, consent or requirement of such Governmental Authority, as construed from time to time by any Governmental Authority. Applicable Permits" shall mean certain national, regional and local licenses, authorizations, certifications, filings, recordings, permits or other approvals with or of any Governmental Authority that are required by any Applicable Law or that is otherwise necessary for the performance of the Work or operation of the System "Change Order" shall mean a written document signed by Owner and Contractor authorizing an addition, deletion or revision to the Work or an adjustment of the Contract Price, or the Target Substantial Completion Date issued after the Effective Date. "Confidential Infomiation" has the meaning set forth in Section 30. "Contract Documents" shall mean this Agreement, the Exhibits hereto, and drawings, specifications, plans, calculations, models and designs that are part of any Exhibit or Schedule hereto. "Contractor" has the meaning set forth in preamble. "Contractor's Representative" shall mean the individual designated by Contractor in accordance with Section 3.2. "Contract Price" shall mean the amount for perfomvng the Work that is payable to Contractor by Owner as set forth in Section 15 and Exhibit D, as the same may be modified from time to time in accordance with the terror hereof. `Disclosing Party' shall have the meaning set forth in Section 30. "Dispute" shall have the meaning set forth in Section 27.1. "Dollar" and "J" shall mean the lawful currency of the United States of America. "Effective Date" shall mean the meaning set forth in the preamble. "Equipment" shall mean (a) all materials, supplies, apparatus, machinery, equipment, parts, tools, components, instruments, appliances, spare parts and appurtenances thereto that are required to be incorporated into the System for prudent design, construction or operation of the System in accordance with Industry Standards and (b) all materials, supplies, apparatus, machinery, equipment, parts, tools, components, instruments, appliances, spare parts and appurtenances thereto to be incorporated into the System described in, required by, reasonably inferable from the Work or the Contract Documents. `Final Design" shall have the meaning as set forth in Section 11.1.2. `Final Completion" shall mean satisfaction or waiver of all of the conditions for completion of the System set forth in Section 12. "Final Completion Certificate" means a certificate in the form of Exhibit Q executed and delivered in accordance with Section 12. `Force Majeure Event" shall mean, when used in connection with the performance of a Party's obligations under this Agreement, any act or event (to the extent not caused by such Parry or its agents or employees) which is unforeseeable, or being foreseeable, unavoidable and Error! Reference source notfoundJDSENERGY SOLUTIONS SOLAR SYSTEM CONST RUCTIONAGREEMENT —Page 2 outside the control of the Party which invokes it, and which renders said Party unable to comply totally or partially with its obligations under this Agreement. In particular, the following examples are inclusive of, but not limited to, what shall be considered a Force Majeure Event: (a) war (whether or not war is declared), hostilities, revolution, rebellion, insurrection against any Governmental Authority, riot, terrorism, acts of a public enemy, or other civil disturbance, including pandemic related issues; (b) acts of God or natural phenomena, including but not limited to, storms (ice, snow and wind) of severity greater than normal weather conditions, floods, lightning, earthquakes, hailstorms, tornados, typhoons, hurricanes, landslides, and fires (and unsafe or hazardous conditions arising from such acts of God or natural phenomena), sabotage or destruction by a third party (other than any contractor retained by or on behalf of the Parry) of facilities and equipment relating to the performance by the affected Party of its obligations under this Agreement; (c) strikes (whether local, regional or national), walkouts, lockouts or similar industrial or labor actions or disputes; and (d) acts or failures to act on the part of any Governmental Authority that materially restrict or limit Contractor's access to the Site or its activities at the Site. "Governmental Authority" shall mean any national, regional, province, town, city, or municipal government, whether domestic or foreign, or other administrative, regulatory, military or judicial body of any of the foregoing, having jurisdiction over the Parties, the Site or transportation of workers and/or materials to the Site. "Hazardous Material shall mean oil or petroleum and petroleum products, asbestos and any asbestos containing materials, radon, polychlorinated biphenyl's (`PCBs'), urea formaldehyde insulation, lead paints and coatings, and all of those chemicals, substances, materials, controlled substances, objects, conditions and waste or combinations thereof which are now or become in the future listed, defined or regulated in any manner by any federal or state Applicable Law. `Indemnified Party" shall have the meaning set forth in Section 22.3. "Indemnifying Party" shall have the meaning set forth in Section 22.3. "Industry Standards" shall mean those standards of care and diligence normally practiced by engineering, construction and installation firms in performing services of a similar nature to the Work in jurisdictions in which the Work will be performed and in accordance with, Applicable Permits, and Applicable Law as qualified above. `bate Payment Interest" shall have the meaning set forth in Section 15.3. Error! Reference source notfoundJDSENERGY SOLUTIONS SOLAR SYSTEM CONST RUCFIONAGREEMENT —Page 3 `Major Subcontractor" means a Subcontractor that supplies Work or Equipment in connection with the Contractor's Work or the System that is entitled to be paid at least $250,000 for the Work or Materials so provided by such Subcontractor. "Maior Components" shall mean the photovoltaic modules, inverters, racking and monitoring systems procured by and installed by Contractor as part of the System `Maior Component Warranties" has the meaning set forth in Section 1.3 ofE-dibit L `Mechanical Completion" shall have the meaning set forth in Section 11.3. `Mechanical Completion Certificate" shall have the meaning as set forth in Edkit O. "Milestone Payment" has the meaning set forth in Section 15.1. `New System Requirement" has the meaning set forth in Section 6.6. `Notice to Proceed" has the meaning set forth in Section I I.I.I. `NTP Date" has the meaning set forth in Section 11.1.1. "O&M ManuaT has the meaning set forth in Section 4.5. "Owner" has the meaning set forth in preamble. "Owner Delay" has the meaning defined in Section 6.7. "Owner Representative" shall mean the individual designated by the Owner in accordance with Section 3.1. `Party or Parties" has the meaning set for in the preamble. "Person" shall mean any individual, corporation, partnership, company, joint venture, association, trust, unincorporated organization or Governmental Authority. "Project Information" shall mean the information provided by Owner as set forth on Exhibit M which is required under California law. `Receiving Party" shall have the meaning set forth in Section 30. "Scheduled NTP Date" has the meaning set forth in Section 11.1.1. "Site" has the meaning set forth in the recitals. "Subcontractor" shall mean any Person retained by Contractor to perform any portion of the Work (including any Subcontractor of any tier) in furtherance of Contractor's obligations under this Agreement. Error! Reference source notfoundJDSENERGY SOLUTIONS SOLAR SYSTEM CONST RUCTIONAGREEMENT — Page 4 "Substantial Completion" shall mean the date upon which Error! Reference source not found. issues permission to operate the Solar System "Substantial Completion Date" shall mean the actual date on which the Substantial Completion of the System, as defined above, has occurred. "System" has the meaning set forth in the recitals. 'Target Substantial Completion Date" has the meaning set forth in Section 11.2. "Unanticipated Conditions" has the meaning set forth in Section 4.2. "Underground Exclusions" has the meaning set forth in Exhibit K. "Utility" shall mean the utility company responsible for interconnection the System to the electrical grid. "Warranty Period" has the meaning set forth in Exhibit L. "Work" shall mean all obligations, duties, and responsibilities assigned to or undertaken by Contractor as set forth in Section 2 and Section 4 and further described on Exhibit B with respect to the System "Workmanship Warranty" shall mean the warranty of Contractor set forth in Section 20 and on Exhibit L. "Work Milestone" has the meaning set forth in Section 15.1 and on Exhibit L. 2. Work. 2.1 Work Generally. Pursuant to and subject to the provisions of, Exhibit B, Contractor shall (a) provide, on a turnkey fixed -price lump sum basis, all professional design and engineering services, supervision, labor, materials, Equipment, tools, construction equipment and machinery, utilities, transportation, and procurement of the Applicable Permits designated on Exhibit J as being provided by Contractor for the System and other facilities, items and services, in each case to the extent necessary for the proper execution and completion of the System, in accordance with the Applicable Law and Contract Documents, and (b) supervise and direct the Work in accordance with Industry Standards. Except as otherwise stated in this Agreement, Contractor shall have control over the engineering, design and construction means, methods, techniques, sequences, and procedures and for coordination of all portions of the Work under this Agreement. The Parties understand that, except as otherwise specifically provided in Exhibit B or this Agreement, Contractor is obligated to perform all tasks required or reasonably implied by the Work to be necessary to deliver to Owner the System meeting the requirements of this Agreement on the terms set forth herein. 2.2 Progress Reports. Contractor shall discuss telephonically with Owner on a twice monthly basis, details regarding the completion of any milestone, the status of the supply of materials necessary for the completion of the Work, and an evaluation of problems and deficiencies Error! Reference source notfoundJDSENERGY SOLUTIONS SOLAR SYSTEM CONST RUCTIONAGREEMENT —Page 5 in the Work and a description of any planned corrective action with respect thereto. Contractor shall promptly notify Owner Representative in writing at any time that Contractor has reason to believe that Contractor may be unable to meet the Target Substantial Completion Date, and Contractor shall specify in said notice any corrective action planned to be taken by Contractor. 3. Representatives. 3.1 Owner Representative. Owner designates, and Contractor agrees to accept, the individual designated by Owner as Owner Representative as set forth in Exhibit G for all matters relating to Contractor's performance of the Work (except for the execution of the certificates approving any Capacity Test, which shall be performed by the Owner). The actions taken by the Owner Representative shall be deemed the acts of the Owner; and Contractor shall have the right to rely on the representations, approvals, consents, and actions of the Owner Representative as provided on behalf of the Owner, and the Owner may, upon written notice to Contractor, pursuant to Section 27 hereof change the designated Owner Representative. 3.2 Contractor Representative. Contractor designates, and Owner agrees to accept, the individual designated by Contractor as Contractor Representative as set forth in Exhibit G for all matters relating to Contractor's performance under this Agreement. The actions taken by Contractor Representative shall be deemed the acts of Contractor. Contractor may, upon written notice to Owner, pursuant to Section 27 hereof, change the designated Contractor Representative. The Contractor Representative shall: 3.2.1 Coordinate and direct the Project within the limitations of the authority granted by the Contractor; 3.2.2 Review and submit to Contractor construction time schedules, payment schedules, and other communications for the Project prepared by Owner for the approval of Contractor; 3.2.3 On behalf of Contractor, coordinate and conduct the negotiations for Change Orders and other modifications of this Contract and promptly report the results of such negotiations to Contractor, provided that except in circumstances described in subparagraph (fl of Section 27, all Change Orders and other modifications of the Agreement shall be executed by Contractor and then only after the Contractor is satisfied as to the form and substance of such Change Orders and other modifications of this Contract; 3.2.4 Act as disbursing agent for payment of costs of the Project within the limitations of the authority granted by the Contractor, with all requests for payments and disbursements wider this Contract being referred to and processed by the Contractor's Representative; 3.2.5 Inspect the Project Site during construction in order to be generally familiar with the progress and quality of the work and in order to detemrme in general if the work is proceeding in accordance with this Contract. Error! Reference source notfoundJDSENERGY SOLUTIONS SOLAR SYSTEM CONSr RUCTIONAGREEMENT —Page 6 3.2.6 In addition to the foregoing, the Contractor Representative is authorized to order changes in the work in accordance with the changes provisions of this Contract subject to the approval of the Contractor provided, however, that authority of the Contractor's Representative hereunder shall be limited to ordering changes that (i) do not involve a change in scope; (ii) do not increase the contract price by more than $5,000 in any one instance, or by more than $15,000 in the aggregate; and (iu) do not extend the time of completion by more than 5 days in any one instance, or by more than 30 days in the aggregate. All changes in the work that (i) involve a change in scope; (i) increase the contract price by more than $5,000 in any one instance or by more than $15,000 in the aggregate, or (c) extend the time of completion by more than 5 days in any one instance, or by more than 30 days in the aggregate, shall be made only by Contractor. The Contractor's Representative shall not make any contract or expenditure or incur any expense on behalf of Contractor except as expressly authorized by this Contract or otherwise authorized by Contractor. 3.3 The Parties shall vest their Representatives with sufficient powers to enable them to assume the obligations and exercise the rights of Contractor or Owner, as applicable, under this Agreement. 3.4 Notwithstanding Sections 3.1 and 3_2, all amendments, Change Orders, and notices between Contractor and Owner contemplated in this Agreement shall be delivered in writing in accordance with Section 27. 4. The Work. 4.1 Contractor shall perform the Work in accordance with Section 2.1 and Exhibit B. 4.2 Contractor shall perform all Work in accordance with Industry Standards, Applicable Law and Applicable Permits. Contractor represents and warrants that it shall prior to the Effective Date, familiarize itself with the Site, any conditions at the Site, the general and local labor conditions relative to the Site, and Exhibit B, and as of the Effective Date has no knowledge of conditions that it did not disclose to Owner in writing that night reasonably be expected to affect the timely execution of the Work or the Contract Price. Notwithstanding the foregoing and anything to the contrary contained in this Agreement and the Contract Documents, in the event Contractor discovers —the presence of Hazardous Materials, or archaeological materials, at the Site during performance of the Work, that the Contractor would not have, with reasonable diligence conducted in accordance with Industry Standards, discovered prior to the Effective Date (such conditions collectively referred to as "Unanticipated Conditions'), then Contractor shall (i) suspend the Work; (ii) give prompt written notice of the Unanticipated Conditions to Owner; and (ii) the discovery of such Unanticipated Conditions shall serve as the basis for a Change Order and Contractor shall be entitled to an extension of the Target Substantial Completion Date in accordance with Section 6.7. In the event Unanticipated Conditions are discovered, Contractor shall not be obligated to perform any Work until receipt of written notice from Owner that Unanticipated Conditions have been remediated by Owner and all costs to remediate Unanticipated Conditions shall be at Owner's sole cost. Error! Reference source notfoundJDSENERGY SOLUTIONS SOLAR SYSTEM CONST RUCTIONAGREEMENT — Page 7 4.3 Contractor shall perform engineering and design services as part of the Work using qualified architects, engineers and other professionals selected and paid for by Contractor. 4.4 Contractor, with the cooperation of Owner, shall file on a timely basis any documents required to obtain the Applicable Permits to be obtained by Contractor, as designated on Exhibit J. As necessary and directed by Contractor, Owner shall file on a finely basis any documents required to obtain any Applicable Permits to be obtained by Contractor, as designated on Exhibit J. Contractor shall construct and install all Equipment to be incorporated into and made part of the completed System All installation shall be done in manner to maintain all certificatio ns and applicable NEMA (National Electrical Manufacturer Association) ratings. Furnished Equipment is subject to reasonable tolerances and variations from specifications as may be required by the final design. Contractor shall have the right to change or substitute another item of equipment for any specified item if Contractor deems it advisable in the course of designing the System, subject to the conditions that such changed or substituted item shall be equal to or better than the specified item 4.5 Within thirty (30) days after Substantial Completion, Contractor shall provide to Owner one (1) hard copy and CD of the operations and maintenance manual for the System ("O&M ManuaP'). By Final Completion, Contractor shall remove debris, Equipment and surplus materials from the portion of Site where the System is located and leave such portion of the Site in "broom clean' condition 4.6 Exclusions. Contractor shall not perform any work or activity beyond the Work, as defined in this Agreement. In particular, the following shall not be included in the Work and therefore shall be the responsibility of Owner: 4.6.1 From and after the Effective Date, Owner shall provide, or shall arrange for the provision of continuous and suitable access to the Site for the Work, so that Contractor may gain access to the Site to perform the Work; 4.6.2 Owner shall select its own personnel so that it is present at the Capacity Tests prior to the date of Substantial Completion and entry into commercial operation of the System; 4.6.3 Owner shall be solely responsible for securing and paying for all asset management services relating to the System and will not require any such services from Contractor; and 4.6.4 Contractor shall not be responsible for any data communication services such as Internet access, phone fines, or other such recurring changes other than those per Exhibit B. 4.7 Title; Risk of Loss. 4.7.1 From the Effective Date and until the Substantial Completion Date, Contractor assumes risk of loss with respect to the System and all materials, Equipment, supplies and maintenance equipment (including temporary materials, Error! Reference source notfoundJDSENERGY SOLUTIONS SOLAR SYSTEM CONSr RUCTIONAGREEMENT — Page 8 equipment and supplies) that are purchased by Contractor for permanent installation in or for use during construction of the System, regardless of whether Owner has title thereto under this Agreement; provided, Owner shall be liable for the repair or replacement thereof to the extent any loss is directly caused by the negligent, grossly negligent or willful acts of Owner or its agents, employees or representatives and this provision shall not limit Contractor's rights with regard to the acts or failures of the Owner, including the Owner Representative or other agents or representatives of the Owner. 4.7.2 Owner shall bear the risk of loss and full responsibility with respect to the System from and after the Substantial Completion Date, provided Contractor shall be liable for the repair or replacement thereof to the extent any loss is directly caused by the negligent, grossly negligent or willful acts of Contractor or its agents, employees or representatives on or after the Substantial Completion Date. 4.7.3 Contractor warrants that good title, free and clear of all liens, claims, charges, security interests, and encumbrances whatsoever, to all Equipment and other items filrnished by it or any of its Subcontractors shall pass to Owner upon full payment thereof to the Contractor. 4.7.4 Title to any Equipment shall pass to Owner upon payment to Contractor for such Equipment pursuant to the terms of this Agreement. 4.8 Contractor shall provide Owner's personnel with up to two (1) days of on - site operation and maintenance training in respect of the System Owner's personnel shall have the qualifications necessary to perform their activities and wI'R be hired by Owner. Scheduling of training will be coordinated by Contractor and Owner, provided that such training will be provided prior to Final Completion 4.9 Technical Contract Documents to be delivered by Contractor. Contractor shall deliver to Owner the documents specified in Exhibit I no later than sixty (60) days after the Substantial Completion Date. 5. Inspection Owner may employ Inspectors who shall be authorized to inspect all work done and material famished. AD costs associated with such inspections will be the responsibility of Owner. Inspectors are not authorized to alter or waive the provisions of the Plans and Specifications approved by any governmental or third -party authority having jurisdiction over the Project. In the event any Owner Inspection and/or the Capacity Tests disturb or otherwise delay Contractor's performance of the Work, such disturbance and delay shall be considered an Owner Delay and Contractor shall be entitled to relief in accordance with Section 6.7. Notwithstanding the foregoing, Owner shall give Contractor three (3) days prior written notice prior to performing any engineering review at the Site. 6. Changes and Extra Work. 6.1 Contractor may initiate a change in the Work for modifications in the Work by advising Owner in writing of the change believed to be necessary. No change or extra Work shall be effective or required to be performed by the Contractor unless the change is reflected in a Change Order signed by Contractor and accepted in writing by Owner; and Owner will use the its Error! Reference soiree notfoundJDSENERGY SOLUTIONS SOLAR SYSTEM CONST RUCTIONAGREEMENT —Page 9 best efforts to timely review and either approve or disapprove each Change Order request submitted by the Contractor in accordance with this Section 6. Each Change Order executed by Contractor and Owner shall be incorporated into this Agreement and shall amend this Agreement to the extent provided in such Change Order. Any Change Order submitted to Owner shall be deemed approved if not objected to within fourteen (14) days of transmittal to Owner or Owner's Representative. 6.2 Unless stated otherwise in the Change Order, all extra Work and changes contained in such Change Order shall be performed in accordance with the provisions and conditions of this Agreement. 6.3 Owner may propose changes to the Work by providing a draft Change Order to Contractor. Contractor will timely review and either approve or disapprove the Change Order. This shall not affect the obligation of Contractor to perform the Work and to deliver the System in the form agreed in this Agreement. 6.4 Should Contractor, in performing its work, encounter conditions that are at material variance with the conditions previously indicated or that differ materially from those ordinarily encountered or reasonably anticipated, Contractor shall be reimbursed for all additional expenses related thereto, plus a reasonable profit. 6.5 At any time prior to Substantial Completion, either Owner or Contractor may suggest to the other that a change in the Work is desirable or required. In either case, the Contractor shall submit to the Owner an estimate of any increase or decrease in the Contract Price required by the alteration or change. Contractor shall also submit an estimate of the changes to and the time schedule caused by such alteration or change. Should such change be agreed to by both Parties and shall result in an increase or decrease in Contract Price, or the Target Substantial Completion Date, and the Agreement shall be modified through the issuance of a Change Order to reflect such change. 6.6 Any change to any aspect of the Work or System required as a result of any change in Applicable law that occurs on or after the Effective Date, or any order or requirement of a Govemmental Authority that first is effective after the Effective Date (each, a "New System Requirement') shall serve as the basis for a Change Order that equitably extends the Target Substantial Completion Date, in accordance with Section 6.7. Each Parry shall notify the other Party promptly upon becoming aware of any New System Requirement. 6.7 Upon the occurrence of any of the events described below, Contractor shall be entitled a Change Order for a day for day extension to the Target Substantial Completion Date equal to the length of the delay in performance of the Work by Contractor caused by such event: (A) In the event that Owner's actions or omissions and/or breach of this Agreement or a statutory requirement cause a delay in Contractor's completion of the Work ("Owner Delay ); provided, further, that in the event of an Owner Delay in addition to an extension to the Target Substantial Completion Date, Contractor shall be entitled to an equitable adjustment to the Contract Price equal to any increase in Contractor's cost to perform the Work as a result of such Owner Delay; Error! Re fe pence source notfound✓DSENERGY SOLUTIONS SOLAR SYSTEM CONSTRUCrIONAGREEMENr —Page 10 (B) Any suspension of the Work pursuant to Section 15; provided, further, that in the event of any suspension of the Work pursuant to Section 15 in addition to an extension to the Target Substantial Completion Date, Contractor shall be entitled to an equitable adjustment to the Contract Price in accordance with Section 15. (C) Unanticipated Conditions; and (D) New System Requirement. (E) Force Majeure Event; (F) Delays in grid -interconnection attributable to the Utility outside the control of Contractor that could not be reasonably prevented by Contractor through commercially reasonable actions; and (G) Delay by a Governmental Authority in issuing any Applicable Permit. Protective Measures. 7.1 From and after the Effective Date, Contractor shall be responsible for the actions and inactions of its Subcontractors in connection with the performance of the Work. Contractor shall be responsible for the proper care and protection of all Equipment and materials ftimished by Contractor and the Work performed until the Substantial Completion Date. 7.2 Contractor shall take all reasonably necessary precautions for the safety of its employees on the relevant part of the Site where the System is located and prevent accidents or injury to individuals on, about, or adjacent to the premises where the Work is being performed. 7.3 Contractor shall keep the relevant part of the Site where the System is located and surrounding areas at the Site free from accumulation of waste materials or rubbish caused by the Work, and upon Final Completion, shall remove from the relevant part of the Site where the System is located all waste materials, rubbish, tools, construction and installation equipment and machinery and surplus materials. 8. Force Majeure. Contractor shall promptly notify Owner in writing of any delay or anticipated delay in Contractor's performance of this Agreement due to a Force Majeure Event, and the reason for and anticipated length of the delay. If reasonably feasible, Contractor shall deliver such notice within forty-eight (48) hours of Contractor's becoming aware of such delay. Contractor shall be excused for any delays or defaults in the performance of its obligations under this Agreement that are the result of a Force Majeure Event or any other event outside the reasonable control of Contractor. Contractor shall be entitled to a day for day extension of the Target Substantial Completion Date equal to the delays due to a Force Majeure Event; provided that any Force Majeure Event that prevents performance, or is reasonably expected to prevent performance, for more than one hundred eighty (180) days shall entitle Contractor or Owner to terminate this Agreement upon written notice. Any modification to the Target Substantial Completion Date pursuant to this Section 8 shall be documented by a written Change Order to this Agreement that reflects the schedule extension; and each of Contractor and Owner promptly shall execute and deliver such a Change Order. The Parties agree that the occurrence of a Force Majeure Error! Re fe pence source notfound✓DSENERGY SOLUTIONS SOLAR SYSTEM CONSrRUCrIONAGREEMENr —Page 11 Event will not relieve Owner of its obligation to make any payments due under this Agreement. Upon the occurrence of a Force Majeure Event that gives the right for a Parry to terminate this Agreement, and such right is exercised, then in the event Contractor has performed a portion of Work attributable to a certain Work Milestone, notwithstanding anything to the contrary contained in Section 15, Contractor may submit an application for payment for such Work performed, and Owner shall pay Contractor within fifteen (15) days of receipt thereof. 9. Termination. 9.1 Termination by Owner. 9.1.1 Contractor agrees that Owner shall be entitled to terminate this Agreement upon written notice of the occurrence of any of the following: (A) Contractor abandons the entire Work without just cause for more than forty- five (45) days; or (B) Contractor violates in any material respect any of the provisions of this Agreement, which violation remains uncured for thirty (30) days following Contractor's receipt of written notice thereof from Owner, provided however, that if the nature of the breach requires more than thirty (30) days to cure, and Contractor is using reasonable commercial efforts to cure, then such tare period shall be extended accordingly. (C) Contractor shall become bankrupt or insolvent, or shall assign this Agreement, or sublet any part hereof (unless otherwise permitted under this Agreement), without the written authorization of the Owner. 9.1.2 In the event Owner delivers termination notice pursuant to Section 9.1.1, Owner may instruct Contractor to discontinue all of the Work and tenninate this Agreement, and Contractor shall thereupon discontinue the Work. Owner shall thereupon have the right to continue and complete the Work, by contract or otherwise. Owner shall be entitled to receive from Contractor, as exclusive remedy for termination under this Section 9.1, the amount (if any) by which Owner's cost to complete the Work exceeds the portion of the Contract Price allocable to the Work unfinished and unpaid to Contractor. 9.1.3 Except as otherwise stated, the remedies in this Section 9 shall be inclusive and additional to any other remedies that may be available under Applicable Law, and no action by Owner shall constitute a waiver of any such right or remedy. 9.2 Ternnation by Contractor. 9.2.1 Owner agrees that Contractor shall be entitled to terminate this Agreement, upon written notice of the occurrence of any of the following circumstances: (A) Owner fails to pay Contractor any amounts due hereunder within ten (10) days after written notice from Contractor; or (B) Owner violates in any material respect any of the provisions of this Error! Re fe pence source notfound✓DSENERGY SOLUTIONS SOLAR SYSTEM CONSrRUCrIONAGREEMENr — Page 12 Agreement (other than non-payment), which violation remains uncured for thirty (30) days following Owner's receipt of written notice thereof from Contractor, provided however, that if the nature of the breach requires more than thirty (30) days to cure, and Owner is using reasonable commercial efforts to cure, then such titre period shall be extended accordingly; or (C) Owner shall become bankrupt or insolvent, or shall assign this Agreement, or sublet any part hereof (unless otherwise permitted under this Agreement), without the written authorization of Contractor. 9.2.2 In addition to all rights and remedies that may be available under Applicable Law against Owner with respect to this Agreement (including without limitation the right to suspend performance of the Work in accordance with Section 15), in the event Contractor delivers termination notice pursuant to Section 9.2.1, Owner shall, within thirty (30) days of the termination date, pay Contractor for (i) all Work performed (which shall include without limitation any and all unpaid Milestone Payments and all other Work performed under this Agreement) plus any materials ordered through the ternination date; (ii) demobllization costs, plus markup of 15% for overhead and profit; and (ii) other verifiable out-of-pocket costs, including reasonable and verifiable termination fees of vendors and Subcontractors, together with any other liabilities to which Contractor is subject pursuant to any agreements with vendors that are executed by Contractor on or before the termination date, plus markup of 15% for overhead and profit. 10. Labor. Contractor shall use reasonable efforts to minimize the risk of labor -related delays or disruption of the progress of the Work. Contractor shall promptly take any and all reasonable steps that may be available in connection with the resolution of violations of collective bargaining agreements or labor jurisdictional disputes. Contractor shall advise Owner promptly in writing of any actual or threatened labor dispute of which Contractor has knowledge that might materially affect the performance of the Work by Contractor or by any of its Subcontractors. Notwithstanding the foregoing, the settlement of strikes, walkouts, lockouts or other labor disputes shall be at the discretion of Contractor. Owner shall inform Contractor in writing prior to signature on this agreement whether labor for the Work is subject to any applicable prevailing wage requirements. 11. Commencement and Substantial Completion. 11.1 Commencement of the Work and Final Drawings. 11.1.1 Notice to Proceed. Contractor shall promptly proceed with all of the Work (pursuant to the provisions of this Agreement) upon receipt from Owner of an executed `Notice to Proceed", substantially in the form attached as Exhibit H. The date that Owner delivers such executed Notice to Proceed shall be the `NTP Date". Owner shall issue an executed Notice to Proceed after Contractor delivers written notice of satisfaction in full of all of the following conditions: (A) Insurance. Contractor shall submit a certificate of insurance demonstrating insurance coverage required in Section 20 and Exhibit F; and Error! Re fe pence source notfound✓DSENERGY SOLUTIONS SOLAR SYSTEM CONSrRUCrIONAGREEMENr — Page 13 (B) Permits. All Applicable Permits shall have been issued and shall be effective, and Contractor shall have received a copy of each such Applicable Permits. Provided Contractor has satisfied the conditions set forth in this Section 11.1, the Target Substantial Completion Date shall be extended automatically by the number of days following the actual NTP Date occurs. In the event Owner does not issue Notice to Proceed within ten (10) days of Contractor's written notice and written proof that it has satisfied the conditions listed 11.1.1, Notice to Proceed shall be deemed to have been issued, and the NTP Date shall be the date that is ten (10) days after Contractor's notice. 11.1.2 Final Approval of Design Drawings. Promptly following the NTP Date, Contractor shall prepare all further design materials required for the System, which shall be in compliance with all Applicable Laws ("Final Design'). Owner and its representatives shall review and comment on the Final Design submittals within five (5) Business days of receipt; if not, such Final Design submittals shall be deemed accepted. Contractor will provide responses and address the Owner's comments within five (5) business days of receipt. Owner will then have an additional three (3) business days to review and comment on the Contractor's additional or revised design information. If Owner provides additional comments within such time period, the time periods set forth in the preceding two sentences shall restart, otherwise, such design submittals shall be deemed accepted. 11.2 Target Substantial Completion. 11.2.1 The target date on which Substantial Completion for the System is expected to occur is based on Exhibit E attached to this Agreement and shall be adjusted day for day for the actual NTP Date and as otherwise contemplated by this Agreement ("Target Substantia 1 Completion Date'). 11.3 Mechanical Completion. 11.3.1 Mechanical Completion will be deemed to occur when (i) Contractor has completed the design, engineering, procurement and construction of the System, including the installation of all AC and DC wiring and connection of all equipment, wiring, controls, and safety systems; (n) all instruments and relays have been installed and are functional as to the extent permissible prior to interconnection; and (iii) the System is ready for operation as to the extent permissible prior to interconnection, pending only the interconnection and synchronization of the System with Utility's distribution system 11.3.2 Mechanical Conyletion —Procedure. Contractor shall provide to Owner a draft Mechanical Completion Certificate along with all documentation necessary for Owner to determine if Mechanical Completion has been achieved. Within five (5) days following the date on which the draft Mechanical Completion Certificate is received by Owner, Owner shall review such draft Mechanical Completion Certdicate for the purpose of determining if Mechanical Completion has been achieved. Within such five (5) day period, Owner shall either (i) countersign and deliver to Contractor the Mechanical Completion Certificate to indicate its agreement that Mechanical Completion for the System has been achieved, or (ii) if reasonable cause exists for Error! Re fe pence source notfound✓DSENERGY SOLUTIONS SOLAR SYSTEM CONSrRUCrIONAGREEMENr — Page 14 doing so, notify Contractor in writing of its belief that Mechanical Completion for the System has not been achieved, including Owner's detail reasons for believing the same and advising Contractor of the actions it believes are required for the System to achieve Mechanical Completion. If Owner fails to either countersign such certificate or notify Contractor in writing of Owner's reasons for disagreeing that Mechanical Completion for the System has been achieved within such five (5) day period, then Mechanical Completion for the System shall be deemed to have been achieved and the Mechanical Completion Date shall be the date the draft Mechanical Completion Certificate was submitted to the Owner. The procedures described in this Section 11.3.2 shall be repeated as necessary until Mechanical Completion has been completed. 12. Final Completion. Final Completion shall be deemed to have occurred when Contractor believes that Final Completion for the System has been achieved. Contractor shall submit to Owner a Final Completion Certificate along with all documentation reasonably necessary for Owner to determine if Final Completion has been achieved. Within five (5) days following the date on which an executed Final Completion Certificate is received by Owner, Owner shall review such certificate and documentation for the purpose of determining if Final Completion has been achieved. Within such five (5) day period, Owner shall either (A) countersign and deliver to Contractor the Final Completion Certificate to indicate its agreement that Final Completion has been achieved, or (B) if reasonable cause exists for doing so, notify Contractor in writing of its belief that Final Completion has not been achieved, including Owner's detail reasons for believing the same and advising of the actions it believes are required to achieve Final Completion, or (C) request further information to determine the completion of the Punchlist. If Owner fails to either countersign such Final Completion Certificate or notify Contractor in writing of Owner's reasons for disagreeing that Final Completion has been achieved within such five (5) day period, Final Completion shall be deemed to have been achieved on the date the Final Completion Certificate was submitted by Contractor to Owner. The procedures described in this Section 11.4 shall be repeated as necessary until Final Completion has been completed. 13. Subcontractors. Contractor shall at all times be responsible for the acts and omissions of Contractor's Subcontractors. Contractor shall be responsible for performance of all the Work, whether performed by Contractor or its Subcontractors. 14. Ownership of Plans, Data, Reports and Material. 14.1 All Contract Documents, including drawings, specifications, documents and other data finnished or to be fimished by Contractor in performing the Work or Contractor's warranty obligations herein are and shall remain the property of Contractor. 14.2 Any additional inventions or intellectual property created during construction shall be owned by Contractor. 14.3 Contractor fwlher agrees to grant and hereby grants to Owner an irrevocable, non -transferable, except to any financing parties providing financing to Owner for its obligations under this Agreement and to any future owners of the System, royalty -free license under all patents, copyrights and other proprietary information of Contractor related to the Work now or hereafter owned or controlled by Contractor solely to the extent reasonably necessary for the operation, maintenance or repair of the System or any subsystem or component thereof Error! Re fe pence source notfound✓DSENERGY SOLUTIONS SOLAR SYSTEM CONSrRUCrIONAGREEMENr — Page 15 designed, specified, or constructed by Contractor under this Agreement. No other license in such patents and proprietary information is granted pursuant to this Agreement. 15. Payment. 15.1 So long as the Work is being performed in accordance with the provisions of this Agreement, Owner shall pay to Contractor the Contract Price in installments, each payable to Contractor upon achievement of a milestone or portion thereof for the Work identified on Exhibit D (each, a "Work Milestone'). When Contractor believes a Work Milestone has been completed, Contractor will submit an application for payment in the form of an invoice to the Owner Representative identifying the completed Work Milestone and the portion of the Contract Price payable pursuant to Exhibit D upon completion of such Work Milestone (each such amount or portion of the Contract Price, a "Milestone Payment"). Within fifteen (15) days after Contractor's delivery of a payment application to the Owner Representative, Owner will pay the Milestone Payment payable upon achievement of the Work Milestone as set forth on Exhibit D. 15.2 When Contractor completes all work under a portion of this Agreement for which a separate price is stated, Contractor shall submit a billing or estimate for release of retention on that portion of the Work, which shall be paid within fifteen (15) days of request for release of the retention. 15.3 Overdue payment obligations of Owner hereunder shall bear interest from the date due until the date paid at a rate per annum equal to the lower of (i) the rate published by the Wall Street Journal as the `prime rate" on the date on which such interest begins to accrue plus five percent (5%) or (it) the maximum rate allowed by Applicable Law ("Late Payment Interest"). 16. Suspension of the Work. Contractor may suspend the Work, upon written notice, if Owner fins to pay any Milestone Payment within ten (10) days after the date on which such payment is due hereunder. In addition, Contractor shall be entitled to (i) an extension of the deadlines of this Agreement, including an extension of the Target Substantial Completion Date for the same period of any suspension under this Section 15, and (it) the reimbursement of the additional costs and expenses, if any, reasonably incurred and substantiated by Contractor including but not limited to demobilization and mobilization costs, costs of protecting, securing, insuring the Work, and in resumption of the Work. Upon suspension, Contractor may demobilize from the Site and shall not have any obligation to protect the Work during the period of suspension. 17. Taxes. Contractor shall only be responsible for and shall pay (or cause to be paid) all taxes imposed upon its net income and all payroll and employment taxes of Contractor incurred pursuant to the performance of Work pursuant to this Agreement and all import taxes, customs duties and similar levies associated with the Work and Contractor materials. All sales taxes are included in the Contract Price. All other taxes, fees, levies, or other governmental charges of any kind arising in connection with the Work and any materials supplied hereunder shall be the exclusive responsibility of Owner. Contractor and Owner shall cooperate with each other to minimize the tax liability of both Parties to the extent legally permissible and will cooperate to obtain any available tax exemptions relative to the System and the Work. Error! Re fe rence source notfound✓DSENERGY SOLUTIONS SOLAR SYSTEM CONSTRUCrIONAGREEMENr —Page 16 18. Owner Oblieations Owner shall provide or make provisions to provide Contractor and its Subcontractors with access to the Site and work areas Contractor requires for completion of the Work. Contractor shall have reasonable access to the Site after Final Completion for inspection and photography. Owner shall make available and maintain all permits for the Site that were held by the Owner at the Effective Date. 19. Representations and Warranties 19.1 Representations and Warranties of Contractor. Contractor represents and warrants as of the Effective Date to Owner that: 19.1.1 Contractor is duly organized, validly existing, and in good standing under the laws of the State of California and has fuIl power to engage in the business it presently conducts and contemplates conducting. 19.1.2 Contractor has (either directly or through its Subcontractors) all the required authority, ability, skis, experience and capacity necessary to perform and shall diligently perform the Work in a timely and professional manner, utilizing sound engineering principles, project management procedures, construction procedures and supervisory procedures, all in accordance with Industry Standards. 19.1.3 The execution, delivery and performance by Contractor of this Agreement will not (i) violate or conflict with any covenant, agreement or understanding to which A is a party or by which it or any of its properties or assets is bound or affected, or its organizational documents or (ii) subject the System or any component part thereof to any lien other than as contemplated or permitted by this Agreement. 19.1.4 There are no actions, suits, proceedings, patent or license infringements or investigations pending or, to Contractor's knowledge, threatened against it before any court or arbitrator that individually or in the aggregate could result in any materially adverse effect on the business, properties or assets or the condition, financial or otherwise, of Contractor or in any impairment of its ability to perform its obligations under this Agreement. 19.2 Representations and Warranties of Owner. Owner represents and warrants as of the Effective Date to Contractor that: 19.2.1 Owner is duly organized, validly existing and in good standing under the laws of the State of California and has full legal capacity and full power to engage in the business it presently conducts and contemplates conducting. 19.2.2 The execution, delivery and performance by Owner of this Agreement will not (i) violate or conflict with any covenant, agreement or understanding to which A is a party or by which it or any of its properties or assets is bound or affected, or its organizational documents or (ii) subject the System or any component part thereof or the Site or any portion thereof to any lien other than as contemplated or permitted by this Agreement. Error! Re fe pence source notfound✓DSENERGY SOLUTIONS SOLAR SYSTEM CONSrRUCrIONAGREEMENr — Page 17 19.2.3 There are no actions, suits, proceedings, patent or license infringements or investigations pending or, to Owner's knowledge, threatened against it before any court or arbitrator that individually or in the aggregate could result in any materially adverse effect on the business, properties or assets or the condition, financial or otherwise, of Owner or in any impairment of its ability to perform its obligations under this Agreement. 19.2.4 Owner has available all the funds that are necessary to pay Contractor the Contract Price under this Agreement. 20. Warranty. Contractor hereby makes the specific warranties set forth in Exhibit L to this Agreement with respect to System and the Work under this Agreement. 21. Insurance. 21.1 Contractor, at its expense, shall procure or cause to be procured and maintain or cause to be maintained in full force and effect at all titres commencing no later than the NTP Date and until Final Completion, the insurance coverages specified in Exhibit F. All such insurance coverage shall be in accordance with the terror of this Section 20 and Exhibit F. 21.2 Owner, at its expense, shall procure or cause to be procured and maintain or cause to be maintained in full force and effect at all times commencing no later than the NTP Date and until Final Completion, the insurance coverages specified in Exlubit F. All such insurance coverage shall be in accordance with the terms of this Section 20 and Exhibit F. 21.3 Contractor's and Owner's policies shall provide for a waiver of subrogation rights against Owner and its affiliates, and their assigns, subsidiaries, affiliates, directors, officers and employees, and of any right of the insurers to any set-off or counterclaim or any other deduction, whether by attachment or otherwise, in respect of any liability of any such Person insured under Contractor's or Owner's Commercial General Liability policy. Contractor does not hereby waive Contractor's rights under this Agreement. 21.4 The insurance policy Emits set forth herein shall in no way be construed as limits on the Parties' liability under this Agreement, subject to the provisions of Section 21. 21.5 Owner and Contractor shall be named as an additional insured under the Parties' liability insurance coverages. Contractor shall provide Owner with a certificate of insurance before commencement of the Work at the Site. 21.6 If requested by Owner or Contractor, Contractor and Owner shall provide the other Parry with evidence that the premiums have been paid not later than thirty (30) days following such request. 22. Indemnity: Limitation of Liability. 22.1 Contractor shall fully indemnify, save harmless and defend Owner, its parents, subsidiaries, affiliates, divisions, and their respective directors, officers, employees, shareholders, agents, representatives, successors and assigns harmless from and against any and all losses, liabilities, claims, demands, damages, causes of action, fines, penalties, costs and Error! Re fe Renee source notfound✓DSENERGY SOLUTIONS SOLAR SYSTEM CONSrRUCrIONAGREEMENr —Page 18 expenses (including reasonable attorneys' fees) incurred by Owner in connection with or arising from any claim by a third parry for physical damage to or physical destruction of property, or death of or bodily injury to any person, but only to the extent caused by (a) the negligence, gross negligence or willful misconduct of Contractor or its agents or employees or others under Contractor's control or (b) a breach by Contractor of its obligations hereunder. This shall not require Owner to indemnify Contractor for Contractor's performance of Contractor's Work. 22.2 Owner shall fully indemnify, save harmless and defend Contractor, its parents, subsidiaries, affiliates, divisions, and their respective directors, officers, employees, shareholders, agents, representatives, successors and assigns harmless from and against any and all losses, liabilities, claims, demands, damages, causes of action, fines, penalties, costs and expenses (including reasonable attorneys' fees) incurred by Contractor in connection with or arising from any claim by a third parry for physical damage to or physical destruction of property, or death of or bodily injury to any person, but only to the extent caused by (a) the negligence, gross negligence or willful misconduct of Owner or its agents or employees or others under Owner's control or (b) a breach by Owner of its obligations hereunder. 22.3 If any claim is brought against a Party entitled to indemnification under this Agreement (the "Indemnified Party') the Indemnified Party shall promptly notify the Party obligated to provide indemnification under this Section and/or Section 25 (the "Indemnifying P). The Indemnifying Party shall have sole charge and direction of the defense of any suit or proceeding based on any clai!n, demand, loss, damage, cause of action, suit on liability for which the Indemnifying Party is responsible under this Section and/or Section 25. The Indemnified Party shall give the Indemnifying Parry such assistance as the Indemnifying Party may reasonably require in such defense and shall have the right to be represented in such defense by counsel of its own choice at its own expense. If the Indemnifying Party fails to defend diligently such suit or proceeding, the Indemnified Parry may, in its reasonable discretion, either defend such suit or proceeding or settle the claim which is the basis thereof, with the consent of the Indemnifying Party (provided that consent shall be deemed given if the Indemnifying Party fails to respond to a request for consent within ten (10) days after receipt of such request). The assumption by the Indemnified Party of its own defense or the settlement by the Indemnified Party of a claim subject to indemnification in accordance with the inunediately preceding sentence shall not relieve the Indemnifying Party of its obligations under this Agreement, and, in any such instance, the Indemnifying Party shall reimburse the Indemnified Party for its settlement costs, legal expenses, court costs and reasonable attorneys' fees. 22.4 Comparative Fault. In the event joint, concurrent, comparative or contributory fault, negligence or willful misconduct of the Parties gives rise to damages for which the Parties are entitled to indemnification under this Agreement, then such damages shall be allocated between the Parties in proportion to their respective degrees of fault, negligence or willful misconduct contributing to such damages. 22.4.1 WAIVER OF CONSEQUENTIAL DAMAGES AND LIMITATION ON LIABILITY. NEITHER PARTY SHALL BE LIABLE FOR CONSEQUENTIAL, INCIDENTAL, PUNITIVE, EXEMPLARY OR INDIRECT DAMAGES, LOST PROFITS OR OTHER BUSINESS INTERRUPTION DAMAGES, BY STATUTE, IN TORT OR CONTRACT, UNDER ANY INDEMNITY PROVISION OROTHERWISE EXCEPT Error! Re fe pence source notfound✓DSENERGY SOLUTIONS SOLAR SYSTEM CONSTRUCrIONAGREEMENr —Page 19 AS PROVIDED IN THIS AGREEMENT AND THE CONTRACT DOCUMENTS AND/OR TO THE EXTENT SUCH DAMAGES ARE COMPONENT COSTS OF LIQUIDATED DAMAGES UNDER THIS AGREEMENT AND THE CONTRACT DOCUMENTS. UNDER NO CIRCUMSTANCES SHALL CONTRACTOR'S TOTAL LIABILITY UNDER THIS AGREEMENT EXCEED THE CONTRACT PRICE. 23. Performance of the Work 23.1 Contractor agrees to use, and agrees that it shall require each of its Subcontractors to use, only personnel who are qualfied and properly trained and who possess every license, permit, registration, certificate or other approval required by Applicable Law, including by any Governmental Authority, to enable such persons to perform the Work. 23.2 Contractor agrees that all Equipment to be supplied or used by Contractor or its Subcontractors in the performance of the Work render this Agreement shall be brand new. 24. Compliance with Applicable Laws. Contractor specifically agrees that it shall at all times fully comply with Applicable Laws and that it shall perform the Work in accordance with the Applicable Laws. Notwithstanding the foregoing, Contractor shall not be responsible for any environmental liabilities relating to the Site where the System is located, except for such Hazardous Materials that are brought onto the Site by Contractor or its Subcontractors during construction of the System; provided, however, that Contractor shall be required to comply with all applicable environmental laws and regulations during construction of the System Owner specifically agrees that in the performance of its obligations under this Agreement it shall at all times fiilly comply with Applicable Laws. 25. Hazardous Materials 25.1 Contractor hereby specifically agrees to indemnify, defend and hold Owner, its parents, subsidiaries, affiliates, divisions, and their respective directors, officers, employees, shareholders, agents, representatives, successors and assigns harmless from and against any and all losses, liabilities, claims, demands, damages, causes of action, fines, penalties, costs and expenses (including reasonable consulting, engineering, attorneys' or other professional fees), that they may incur or suffer by reason of 25.1.1 any unauthorized release of a Hazardous Materials brought onto the Site by Contractor or its subcontractors; 25.1.2 any enforcement or compliance proceeding commenced by or in the name of any Governmental Authority because of an alleged, threatened or actual violation of any Applicable Law by Contractor or its Subcontractors directly related to a Hazardous Materials brought onto the Site by Contractor or its Subcontractors; and 25.1.3 any action reasonably necessary to abate, remediate or prevent a violation or threatened violation of any Applicable Law by Contractor or its Subcontractors directly related to a Hazardous Materials brought onto the Site by Contractor or its Subcontractors. Error! Re fe Renee source notfound✓DSENERGY SOLUTIONS SOLAR SYSrEM CONSrRUCrIONAGREEMENr — Page 20 25.2 Owner hereby specifically agrees to indemnify, defend and hold Contractor, its parents, subsidiaries, affiliates, divisions, and their respective directors, officers, employees, shareholders, agents, representatives, successors and assigns harmless from and against any and all losses, liabilities, claims, demands, damages, causes of action, fines, penalties, costs and expenses (including, but not limited to, all reasonable consulting, engineering, attorneys' or other professional fees), that they may incur or suffer by reason of 25.2.1 any unauthorized release of Hazardous Materials brought onto the Site by Owner or its subcontractors; 25.2.2 any enforcement or compliance proceeding commenced by or in the name of any Governmental authority because of an alleged, threatened or actual violation of any Applicable Law brought onto the Site by Owner or its subcontractors; 25.2.3 any action reasonably necessary to abate, remediate or prevent a violation or threatened violation of any Applicable Law by Owner or its subcontractors; and 25.2.4 (1) any unauthorized release of Hazardous Materials; (ii) any enforcement or compliance proceeding commenced by or in the name of any Governmental authority because of an alleged, threatened or actual violation of any Applicable Law; and (in) any action reasonably necessary to abate, remediate or prevent a violation or threatened violation of any Applicable Law, provided such Hazardous Materials that are not brought on to the Site by either Contractor or Owner or their respective subcontractors. 26. Governing Law. The formation, interpretation and performance of this Agreement shall be governed by and construed in accordance with the laws of the State of California. 27. Dispute Resoladon. 27.1 Good Faith Negotiations. In the event that any question, dispute, difference or claim arises out of, or in connection with this Agreement, including any question regarding its existence, validity, performance, or termination (a ` pute'), as to which either Party has notified to the other Parry, senior management personnel from both Contractor and Owner shall meet and diligently attempt in good faith to resolve the Dispute for a period of fifteen (15) days following one Party's written request to the other Party for such a meeting. If however, either Party refuses or fails to so meet, or the Dispute is not resolved within fifteen (15) days after delivery of written notice requesting such negotiation, the provisions of Sections 27.2 shall apply. 27.2 Arbitration. Any Dispute that is not settled pursuant to Section 26.1 shall be settled by arbitration between the Parties conducted by JAMS Arbitration and Mediation Services in Ontario, California (JAMS') by a single arbitrator selected in accordance with this Section 26.2. The submitting Parry shall submit such Dispute to arbitration by providing a written demand for arbitration to the other Parry and to JAMS. Upon delivery of a notice of arbitration, the Parties shall select a single neutral arbitrator with significant contract resolution experience and systems similar to those listed on Exhibit A. If the Parties cannot agree on a single neutral arbitrator within fifteen (15) business days after the written demand for arbitration is provided, then the arbitrator shall be selected by JAMS Once an arbitrator has been selected, the Parties may then commence with and engage in discovery in connection with the arbitration as provided by Error! Re fe pence source notfound✓DSENERGY SOLUTIONS SOLAR SYSrEM CONSrRUCrIONAGREEMENr — Page 21 California statutes and shall be entitled to submit expert testimony or written documentation in such arbitration proceeding. The decision of the arbitrator shall be final and binding upon Owner and Contractor and shall be set forth in a reasoned opinion, and any award may be enforced by Owner or Contractor, as applicable, in a court of competent jurisdiction. Any award of the arbitrator may include interest from the date of any from the date of the award until paid in fill, at the rate of the Late Payment Interest. Each of Owner and Contractor shall bear its own cost of preparing and presenting its case; provided, however, that the cost of the arbitration, including the fees and expenses of the arbitrator, shall initially be shared equally by Owner and Contractor, subject to reimbursement of such arbitration costs and reasonable attorney's fees and costs to the prevailing Party if awarded by the arbitrator. The arbitrator shall be instructed to establish procedures such that a decision can be rendered within sixty (60) calendar days of the appointment of the arbitrator. 27.3 Arbitrator Confidentiality Obligation. The Parties shall ensure that any arbitrator appointed to act render this Section will agree to be bound to the provisions of Section 30 with respect to the terms of this Agreement and any information obtained during the corpse of the arbitration proceedings. 27.4 TRIAL WAIVER. NOTICE: BY INITIALING IN THE SPACE BELOW YOU ARE AGREEING TO HAVE ANY DISPUTE ARISING OUT OF THE MATTERS INCLUDED IN THE 'ARBITRATION OF DISPUTES' PROVISION DECIDED BY NEUTRAL ARBITRATION AS PROVIDED BY CALIFORNIA LAW AND YOU ARE GIVING UP ANY RIGHTS YOU MIGHT POSSESS TO HAVE THE DISPUTE LITIGATED IN A COURT OR JURY TRIAL. BY INITIALING IN THE SPACE BELOW YOU ARE GIVING UP YOUR JUDICIAL RIGHTS TO DISCOVERY AND APPEAL, UNLESS THOSE RIGHTS ARE SPECIFICALLY INCLUDED IN T lE'ARBITRATION OFDISPUTES' PROVISION. IF YOU REFUSE TO SUBMrr TO ARBITRATION AFTER AGREEING TO THIS PROVISION, YOU MAYBE COMPELLED TO ARBITRATE UNDER THE AUTHORITY OF THE CALIFORNIA CODE OF CIVIL PROCEDURE. YOUR AGREEMENT TO THIS ARBITRATION PROVISION IS VOLUNTARY. WE HAVE READ AND UNDERSTAND THE FOREGOING AND AGREE TO SUBMIT DISPUTES ARISING OUT OF THE MATTERS INCLUDED IN THE "ARBITRATION OF DISPUTES" PROVISION TO NEUTRAL ARBITRATION. Owner's Initials Contractor's Initials 28. California Contractors Board License. Motive Energy Telecommunications Group, Inc., is a general contractor with Type B and C-10licenses of the Contractors State License Board, license number 1021440. 29. Notices and Demands. Any notice, request, demand or other communication required or permitted under this Agreement, shall be deemed to be properly given by the sender and received by the addressee if made in writing and (a) if personally delivered; (b) if delivered Error! Re fe rence source notfound✓DSENERGY SOLUTIONS SOLAR SYSrEM CONSTRUCrIONAGREEMENr — Page 22 by a nationally recognized courier (FedEx or UPS, but specifically excludine the United States Postal Service), on the date of the delivery receipt provided by the nationally recognized courier. All notices shall be addressed as set forth in Exhibit G. The noticing party shall also email or fax a copy of the document to the addressee on the day it is provided in person or shipped by the nationally recognized carrier. Notwithstanding the foregoing, Change Orders and Invoices may be submitted via email or fax. 30. Nondisclosure. Each Parry in receipt of information from the other Parry (the `Receiving Partv') shall not use for any purpose other than performing the Work under, or enforcement under Section 27 of this Agreement or divulge, disclose, produce, publish, or permit access to, without the prior written consent of the other Parry (the "Disclosing Party'), any information of the Disclosing Party, which includes, without limitation, this Agreement and exhibits hereto, all information or materials prepared in connection with the Work performed under this or any related subsequent Agreement, designs, drawings, specifications, techniques, models, data, documentation, source code, object code, diagrams, flow charts, research, development, processes, procedures, know-how, manufacturing, development or marketing techniques and materials, development or marketing timetables, strategies and development plans, customer, supplier or personnel names and other information related to customers, suppliers or personnel, pricing policies and financial information, and other information of a similar nature, whether or not reduced to writing or other tangible form, and any other trade secrets ("Confidential Information"). Confidential Information does not include (a) information known to the Receiving Parry prior to obtaining the same from the Disclosing Party; (b) information in the public domain at the time of disclosure by the Receiving Party; (c) information obtained by the Receiving Party from a third party who did not receive same, directly or indirectly, from the Disclosing Party, or (d) previously developed by the Receiving Parry independently without the benefit of the Confidential Information. The Receiving Party shall use the higher of the standard of care that the Receiving Parry uses to preserve its own confidential information or a reasonable standard of care to prevent unauthorized use or disclosure of such Confidential Information. Notwithstanding anything herein to the contrary, the Receiving Party has the right to disclose Confidential Information without the prior written consent of the Disclosing Party: (i) as required by any court or other Governmental Authority, or by any stock exchange the shares of any Party are listed on, (ii) as otherwise required by Applicable Law, (ni) as required in connection with any government or regulatory filings, including without limitation, filings with any regulating authorities covering the relevant financial markets, (iv) to its attorneys, accountants, financial advisors or other agents, in each case bound by confidentiality obligations, (v) to banks, investors and other financing sources and their advisors, in each case bound by confidentiality obligations; or (vi) in connection with an actual or prospective merger or acquisition or similar transaction where the parry receiving the Confidential Information is bound by confidentiality obligations. If a Receiving Party believes that it will be compelled by a court or other Governmental Authority to disclose Confidential Information of the Disclosing Party, it shall give the Disclosing Party prompt written notice so that the Disclosing Parry may determine whether to take steps to oppose such disclosure. 31. Emergency Work. Notwithstanding any of the provisions of the Agreement, Contractor, in an emergency affecting the safety of life or property, including adjoining property, is authorized to act in its discretion without special instructions, orders, or authorization from Owner, or Owner's Representative, to prevent such threatened loss or injury, and must so act if instructed to do so. Any compensation claimed by Contractor on account of such emergency Error! Re fe pence source notfound✓DSENERGY SOLUTIONS SOLAR SYSTEM CONSTRUCTIONAGREEMENr — Page 23 shall be determined in the mariner provided in Section 6 of this Agreement for determination of compensation to be paid for extra work, except that Contractor's failure to obtain a written order prior to the performance of such emergency work shall not affect its right, if any, to extra compensation. 32. Validity. The invalidity, in whole or in part, of any provisions of this Agreement shall not affect the validity of any other provisions hereof. 33. Survival. All of the terms of this Agreement which by their nature extend beyond the expiration or termination of this Agreement, including but not ]united to indemnification obligations and limitations of liability, shall survive expiration or termination of the Agreement and remain in full force and effect. 34. Binding Effect. This Agreement shall be bolding on the Parties hereto and on their respective permuted successors, heirs and assigns. 35. No Oral Modifications. No oral amendment or modification of this Agreement by any officer, agent or employee of Contractor or Owner shall be of any force or effect unless such amendment or modification is in writing and is signed by a duly authorized representative of the Party to be bound thereby. 36. Headings. The headings in this Agreement are for convenience of reference only and the words contained therein shall in no way be held to explain, modify, amplify or aid in the interpretation, construction or meaning of the provisions of this Agreement. 37. Counterparts. This Agreement may be executed on counterparts which, taken together, shall constitute a single instrument. Entailed or faxed signed, or DocuSigned documents or counterparts shall be acceptable and binding. 38. Authority. Each individual executing this Agreement on behalf of Owner and Contractor represents and warrants that he or she is duly authorized to execute and deliver this Agreement on behalf of said Parry and that this Agreement is binding upon said Parry in accordance with its terms. 39. Announcements and Publications. Notwithstanding the provisions of Section 28, the Parties shall jointly agree upon the necessity and content of any press release in connection with the System, the Work, and any other matters contemplated by this Agreement. Any publication, news release or other public announcement by a Parry relating to this Agreement or to the performance hereunder shall first be reviewed and consented to on writing by the other Party, such consent not to be unreasonably withheld. 40. Complete Agreement. This Agreement constitutes the complete and entire Agreement between the Parties and supersedes any previous communications, representations or agreements, whether oral or written, with respect to the subject matter hereof. There are no additions to, or deletions from, or changes in, any of the provisions hereof, and no understandings, representations or Agreements concerning any of the same, which are not expressed herein, unless stated below. THE PARTIES HEREBY AGREE THAT NO TRADE USAGE, PRIOR COURSE OF DEALING OR COURSE OF PERFORMANCE UNDER THIS AGREEMENT SHALL BE Error! Re fe rence source notfound✓DSENERGY SOLUTIONS SOLAR SYSrEM CONSrRUCrIONAGREEMENr — Page 24 PART OF TH[S AGREEMENT OR SHALL BE USED IN THE INTERPRETATION OR CONSTRUCTION OF THIS AGREEMENT. 41. No Agency. This Agreement is not intended, and shall not be construed, to create any association, joint venture, agency relationship or partnership between the Parties or to impose any such obligation or liability upon either Party. Neither Party shall have any right, power or authority to enter into any agreement or undertaking for, or act as or be an agent or representative of, or otherwise bind, the other Parry. For the purposes of this Agreement, Contractor is an independent contractor and this Agreement is a lump -sum agreement. 42. Priority of Documents. In the event of conflicting provisions between any of the Contract Documents, the provisions shall govern in the following priority: first, duly executed amendments to this Agreement, including Change Orders (to the extent not superseded by a subsequent amendment or Change Order), second, this Agreement and third, the other Contract Documents. 43. Assimment. 43.1 Except as set forth in Section 41.21 no Party shall be entitled to assign this Agreement or any of its rights or obligations under this Agreement, nor shall it enter into any transaction as a result of which it may transfer, assign, charge or dispose by any title of any of those rights and obligations, without the prior written consent of the other Parry, which consent shall not be unreasonably withheld. 43.2 Notwithstanding the foregoing, (i) Contractor and Owner shall be entitled to assign its right, title and interest in and to this Agreement (and, in particular, any rights arising in relation to any insurance policy and any other right to collect any amount from Owner) to any lenders by way of security for the performance of obligations to such lenders upon written notice, but without the consent of the other Parry, and (ii) each Party shall be entitled to assign its respective right, obligation, title and interest in and to this Agreement in connection with a merger or acquisition and sale of substantially all of its assets, upon written notice to the other Party and provided such assignee assumes any and all obligations of the other Party hereunder. 44. Waivers. No provision of this Agreement shall be considered waived by either Parry except when such waiver is made in writing. The failure of either Parry to insist, on one or more occasions, upon strict performance of any of the provisions of this Agreement or to take advantage of its rights hereunder or the delay or failure in exercising totally or partially any right or remedy under this Agreement, shall not be construed as a waiver of any such provisions or the relinquishment of any such rights or any other rights for the future, but the same shall continue and remain in full force and effect. 45. Time is of the Essence and Unavoidable Delays and Defaults. Time is of the essence with respect to the performance of this Agreement. However, Contractor or Owner shall be excused for any delays or default by said party in the performance of the obligations and duties under this Agreement unavoidably caused by the act of the other, the act of any agent of such parry, the act of any governmental authority, the act of any public enemy, act of God, the elements, war, Error! Re fe Renee source notfound✓DSENERGY SOLUTIONS SOLAR SYSrEM CONSrRUCrIONAGREEMENr — Page 25 war defense conditions, litigation, strikes, walkouts, or other causes beyond such party's control. Each parry shall use reasonable diligence to avoid any such delay or default and shall resume perfonnance of the obligations and duties under this Contract as promptly as possible subsequent to any such delay or default. 46. Days. In this Agreement "day" means calendar day unless it is specified that it means a"business day". `Business day" means Mondays to Fridays, except for banking holidays in the state of Califomia. 47. Cooperation with Financing. Contractor acknowledges that Owner will be financing the development and acquisition of the System and Contractor agrees that it shall cooperate with Owner and its financing parties in connection with such financing of the System, including (i) the fi mishing of such information, (ii) the giving of such certificates, and (iii) providing such consents and other documents as Owner and its financing parties may reasonably request, provided that such cooperation shall not include the waiver by Contractor of any rights or impose the addition of any additional liabilities for the Contractor under this Agreement. Owner shall reimburse Contractor for any expenses incurred by Contractor in connection with this Section 45 provided such third parry expenses are approved in writing by Owner. 48. System Savings. The amount of Owner's savings from the installation and use of the System is dependent upon local electric company's rate structures, which may change from time to time, and on the weather where the project is located. Contractor makes no warranty or guarantee regarding savings potential. [Remainder of page intentionally left blank] Error! Re fe Renee source notfound✓DSENERGY SOLUTIONS SOLAR SYSrEM CONSPRUCrIONAGREEMENr — Page 26 49. Exhibits. This Agreement includes and incorporates by reference the following Exhibits: Exhibit A System Design Exhibit B Scope of Work Exhibit C Site Exhibit D Contract Price and Payments Exhibit E Target Substantial Completion Date Exhibit F Insurance Exhibit G Party Representative and Notices Exhibit H Form of Notice to Proceed Exhibit I Technical Document Deliverables Exhibit J Applicable Permits Exhibit K Underground Exclusions Exhibit L Warranty Exhibit M [Reserved] Exhibit N [Reserved] Exhibit O Mechanical Completion Certificate Exhibit P [Reserved] Exhibit Q Final Completion Certificate [Signatures on Next Page] Error! Re fe Renee spume notfound✓DSENERGY SOLUTIONS SOLAR SYSrEM CONSPRUCrIONAGREEMENr — Page 27 IN WITNESS WHEREOF, the Parties hereto have duly executed and delivered this Agreement as of the Effective Date set forth above. CONTRACTOR: DS Energy Solutions, a division of MOTIVE ENERGY TELECOMMUNICATIONS GROUP, INC. California Contractors License #1021440 Bv: Name: Eli Edwards Title: General Manager OWNER: Error! Reference source not found. Bv: Name: Error! Reference source not found. Title: Owner Please initial on page 22. Please complete Exhibits G & M Error! Re fe pence spume notfound✓DSENERGY SOLUTIONS SOLAR SYSrEM CONSPRUCrIONAGREEMENr — Page 28 EXHIBIT A System Design Solar Panels: Error! Reference source not found. Inverters: Error! Reference source not found. Power Rating 1: Error! Reference source not found. Power Rating 2: Error! Reference source not found. Energy Consumption Mix: Error! Reference source not found. Mounting Type: Error! Reference source not found. Battery: Error! Reference source not found. Error! Re fe pence source notfound✓DSENERGY SOLUTIONS SOLAR SYSrEM CONSPRUCrIONAGREEMENr — Page 29 EXHIBIT B Scope of Work ("SOW") Includes the engineering, procurement, and construction of a Error! Reference source not found. ballasted rooftop solar system SOW includes all labor, management, equipment, and materials required to install and interconnect the solar system to the exiting point of interconnection without upgrades or modifications. SOW excludes all roof repairs, materials, and labor required to protect and maintain roofing warranty. Assumptions 1. All technology & equipment specified/used in this project will meet or exceed all currently applicable & proposed safety, environmental and interconnection standards, as well as, all fire safety requirements 2. All PV systemequipment & components will be UL certified 3. Contractor will obtain permits & utility approvals necessary to install the PV System 4. Interconnection work/outages will be scheduled during normal business hours 5. Building department and utility inspections will be scheduled during normal business hours 6. Pricing assumes the Contractor's employees will have free and clear access to all array locations simultaneously during business homy (M-F 0700-1700) 7. The Contractor will provide electrical drawings stamped by a licensed California Registered Electrical Professional Engineer 8. The planned AC electrical tie-in will not require component upgrades or improvements unless specifically discussed in the proposal. 9. The System & installation will meet all requirements for interconnection with appropriate docu►nentation. The contractor will be responsible for providing all documentation. 10. System layout is acceptable to AM in terms of clearances 11. Single mobilization and completion of project in one phase 12. As built plans are available for engineering reference 13. The contractor is not responsible for superficial marking of parking area due to use of equipment 14. On -site staging areas are available for storage of equipment and materials 15. No special safety requirements beyond the contractor's standard safety regulations will be enforced 16. Pricing includes NEMA 3R painted steel electrical equipment 17. Module pricing is based on current market value. Price is subject to adjustment based on market conditions at time of contract. 18. Ground penetrating radar (GPR) is accurate down to a depth of3'-4'. There may be underground utilities below this level that are untraceable with GPR that would require the use of an underground camera to be located at additional cost. 19. Pricing assumes the stricture can support the additional loads of the PV array system. 20. Pricing is based on private wage rates Error! Re ference source not found./DS ENERGY SOLUTIONS SOLAR SYSTEM CONSTRUCTION AGREEMENT —Page 30 Exclusions 1. UL recertification of existing electrical equipment beyond our scope of work 2. Repairs of any electrical code violations at the existing facility 3. Removal and/or disposal of hazardous materials 4. Arc flash or breaker coordination studies 5. 3rd party (private) locating services 6. Pedestrian & vehicle traffic control 7. Re-creation of building plan sets 8. Union project labor agreements 9. Lightening protection systems 10. Revenue grade metering 11. ADA design/compliance 12. Prevailing wage rates 13. Sprinklers & gutters 14. Inverter enclosures 15. Phasing 16. Bonding (except as required by law) 17. Electrical infrastructure upgrades Additional Assumptions, Inclusions or Exclusions, if any. None Error! Reference spume notfound✓DSENERGY SOLUTIONS SOLAR SYSTEM CONSTRUCTIONAGREEMENT — Page 31 ENMIT C site Error! Reference source not found. Error! Re fe Renee source notfound✓DSENERGY SOLUTIONS SOLAR SYSTEM CONSTRUCrIONAGREEMENr — Page 32 EXIHBIT D Contract Price and Payments Contractor shall be responsible for the design, construction, completion and commissioning of the System pursuant to the Agreement, for a lump sum Contract Price of Error! Reference source not found.. Unless mutually agreed as indicated by their signatures below, Owner shall make progress payments to Contractor in accordance with Section 15.1 of this Agreement Owner and Contractor mutually agree in accordance with Section 15.2 that Owner shall pay Contractor the Contract Price according to the following schedule of Work Milestones and Milestone Payments: Work milestones Percent milestone Payments Of (As a % of total Contract Price) Contract Upon contract signing 10% $Error! Reference source not found. Upon design approved by client 15% $Error! Reference source not found. Upon receiving city permit 40% $Error! Reference source not found. Upon installation of racking system 25% $Error! Reference source not found. Upon final city inspection sign off 10% $Error! Reference source not found. Total 1.00% 0.00 Payment shall be made to Contractor within fifteen (15) days of the invoice date, certification or approval, whichever is earliest. CONTRACTOR: DS Energy Solutions, a division of MOTIVE ENERGY TELECOMMUNICATIONS GROUP, INC. California Contractors License #1021440 Bv: Name: Eli Edwards Title: General Manager OWNER: Error! Reference source not found. Error! Re fe rence source notfound✓DSENERGY SOLUTIONS SOLAR SYSrEM CONSPRUCrIONAGREEMENr — Page 33 Bv: Name: Error! Reference source not found Title: Owner EXHIBIT E Target Substantial Completion Date The Target Substantial Completion Date currently determined to be Error! Reference source not fourA is an anticipated date, which may be affected in a number of ways, including issuance of permits, inclement weather, access to the Project, availability of materials, pandemic issues, etc. There is no guarantee that the work will be completed by that date. Error! Re fe pence spume notfound✓DSENERGY SOLUTIONS SOLAR SYSrEM CONSPRUCrIONAGREEMENr — Page 34 EXHIBIT F Insurance Contractor shall secure and maintain the following insurance coverages: Commercial General Liability Limits of Liability: $2,000,000 General Aggregate $2,000,000 Products/Completed Operations Aggregate $1,000,000 Personal & Advertising Injury Limit $1,000,000 Per Occurrence Endorsements issued in favor to Owner: • Additional Insured • Coverage afforded Owner shall be primary and non-contributing to any other insurance maintained by Owner • Thirty (30) days' notice of cancellation, except ten (10) days for non-payment of premium. Automobile Liability: Limits of Liability: $1,000,000 per accident Workers' Compensation Limits of Liability: Statutory Employers' Liability: Limits of Liability: $1,000,000 per occurrence Umbrella/Excess Liability: $5,000,000 Aggregate Excess over Primary Limits of Liability required for Coninercial General Liability, Automobile Liability and Employers' Liabiity. Professional Liability: Limits of Liability: $2,000,000 each claim $2,000,000 Aggregate Error! Re fe pence source notfound✓DSENERGY SOLUTIONS SOLAR SYSrEM CONSPRUCrIONAGREEMENr — Page 35 Owner shall secure and maintain the Mowing insurance coverages: Commercial General Liability Limits of Liability: $2,000,000 General Aggregate $2,000,000 Products/Completed Operations Aggregate $1,000,000 Personal & Advertising Injury Limit $1,000,000 Per Occurrence • 'Thirty (30) days' notice of cancellation, except ten (10) days for non-payment of premium Automobile Liability: Limits of Liability: $1,000,000 per accident Workers' Compensation: Limits of Liability: Statutory Employers' Liability: Limits of Liability: $1,000,000 per occurrence Umbrella/Excess Liability: $5,000,000 Aggregate Excess over Primary Links of Liability required for Cormnercial General Liability, Automobile Liability and Employers' Liability. Error! Re fe pence source notfound✓DSENERGY SOLUTIONS SOLAR SYSrEM CONSPRUCrIONAGREEMENr — Page 36 EXHIBIT G Party Representatives and Notices A. Contractor 1. Contractor Representative: Error! Reference source not found. 2. Notices: Contractor: DS Energy Solutions, a division of Motive Energy Telecommunications Group, Inc. Eli Edwards 18231 Stoddard Wells Rd, Victorvfille, CA 92394 844-373-6374 E-mail: Eli@dsenergysolutions.com Owner 3. Owner Representative: Error! Reference source not found.Error! Reference source not found. 4. Notices: Error! Reference source not found. Error! Reference source not found. Error! Reference source not found. Error! Reference source not found. Error! Re fe pence source notfound✓DSENERGY SOLUTIONS SOLAR SYSrEM CONSPRUCrIONAGREEMENr — Page 37 EXHIBIT H Form of Notice to Proceed FORM OF NOTICE TO PROCEED Deliver to: (Contractor) DS Energy Solutions, a division of Motive Energy Telecommunications Group, Inc. Owner: Error! Reference source not found. Project Name: Error! Reference source not found. Site Location Error! Reference source not found. 'TV Systenf' Size: Error! Reference source not found. Notice Date: Contractor is hereby notified to proceed with all of the Work on the project identified above. Upon receipt of this Notice, Contractor is responsible for perfomvng the Work under the tenor and conditions of the Solar PV System Construction Agreement dated and in accordance with Agreement and the Contract Documents. Owner: Contractor: Error! Reference source not found. Receipt of this Notice to Proceed is Print Date: hereby acknowledged: DS Energy Solutions, a division of Motive Energy Telecommunications Group, Inc. Print N Title: Date: Error! Re fe pence source notfound✓DSENERGY SOLUTIONS SOLAR SYSrEM CONSPRUCrIONAGREEMENr — Page 38 EXIIIBIT I Technical Documents Deliverables NOT ALL ARE APPLICABLE TO EVERY PROJECT Module Specs/Data Sheet Installation Manual Limited Warranty Inverter Specs/Data Sheet Waffanty Contract Instalation and Operation Manual Standard 5 Year Warranty Card 10 Year Warranty Card (TBD) Certificate ofComphance Commissioning Certificate Pre-Connissioning Checkhst/Form Commissioning Request Form Torque Inspection -Inverter Enclosure Racking Connection Drawing/Spec Tech Specs Installation Manual Limited Warranty Compaction Reports Torque Tests Torque Values Well Inspections Coating Inspections DC Combiner Box Spec Sheet/DataSheet Instalation Manual Warranty Card Torque Inspection -Inverter Enclosure ConuTissioning Documentation Error! Re fe pence source notfound✓DSENERGY SOLUTIONS SOLAR SYSrEM CONSPRUCrIONAGREEMENr — Page 39 Switchgear Tech Specs/Data Sheet Switchgear Instruction Manual Warranty Card Torque Inspection - Switch Gear Enclosure Commissioning Documentation Spec Sheet/Data Sheet Installation Manual Warranty Card Commissioning Documentation Weather Station Spec Sheet/Data Sheet Drawings Warranty Cahbration Sheets Commissioning Documentation Monitoring IP addresses Login Inforfnation Commissioning Documentation Fuse Data Sheet Fuse List Permission to Parallel Witness List 3rd Parry Capacity Tests & Checks Geo-Technical Report (Soils) Erosion Control Special Inspection Reports Error! Re fe Renee source notfound✓DSENERGY SOLUTIONS SOLAR SYSrEM CONSPRUCrIONAGREEMENr — Page 40 EXIIIBIT J Applicable Permits Permit / Issuing Entity Building Permit / Error! Reference source not found. Electrical Perit / Error! Reference source not found. Error! Reference spume notfound✓DSENERGY SOLUTIONS SOLAR SYSTEM CONSTRUCrIONAGREEMENT — Page 41 EXHIBIT K Underground Exclusions a NOT APPLICABLE AS OF THE DATE OF SIGNING BUT WILL BECOME APPLICABLE IF CARPORTS ARE LATER ADDED TO THE PROJECT SURFACES UPON WHICH CARPORTS ARE TO BE INSTALLED, MUST PERMIT THE MOVEMENT AND WEIGHT OF THE DRILLING OR LIFTING EQUIPMENT. CONTRACTOR SHALL NOT BE RESPONSIBLE FOR ANY DAMAGES TO THE SURFACES DUE TO THE USE OF THE MOVEMENT, DRILLING, OR LIFTING EQUIPMENT. THE UNDERSIGNED EXPRESSLY WARRANTS THAT THE ASPHALT, CONCRETE, OR OTHER SURFACE OF THE ACCESS ROUTE AND / OR THE AREA IN WHICH THE UNDERSIGNED HAS CAREFULLY EXAMINED THE WORK SITE, HAVE BEEN CAREFULLY EXAMINED AND APPROVED FOR THE WORK CONTEMPLATED AND THE LAYOUT OF THE CARPORT. THE UNDERSIGNED ALSO APPROVES OF JACKHAMMERING AND DRILLING OF CAISSON TYPE FOOTINGS AS PART OF THE WORK CONTEMPLATED. TWO (2) FOOT TOLERANCE MUST EXIST IN ANY DIRECTION WHERE FOOTING HOLES ARE BEING DRILLED. IF TWO (2) FOOT TOLERANCE IS NOT FEASIBLE, CONTRACTOR MUST BE NOTIFIED IMMEDIATELY. IF THE CARPORTS CANNOT BE MOVED TO ACCOMMODATE THE TWO -FOOT TOLERANCE, THE FOOTING HOLES MUST BE HAND DUG AND THE UNDERSIGNED WILL BEAR THE ADDITIONAL EXPENSE. IF IT IS NECESSARY TO STEP THE CARPORT STRUCTURE DOWN DUE TO CHANGE IN GRADE NOT PREVIOUSLY AGREED BY CONTRACTOR MANAGEMENT AND THE UNDERSIGNED, THE UNDERSIGNED IS RESPONSIBLE FOR ANY EXTRA MATERIAL AND LABOR EXPENSE. INSTALLATION SHALL NOT COMMENCE UNTIL A CONTRACT CHANGE ORDER IS SIGNED BY ALL PARTIES INVOLVED. THE UNDERSIGNED IS RESPONSIBLE FOR ANY INVESTIGATIONS OF SUB -SURFACE CONDITIONS IN AREAS WHERE WORK IS TO BE PERFORMED TO DETERMINE THE LOCATION OF UNDERGROUND OBJECTS INCLUDING, BUT NOT LIMITED TO: PIPELINES, SEWERS, TELEPHONE LINES, GAS LINES, ELECTRICAL LINES, CONDUIT, SPRINKLERS, ETC. FOOTING HOLES MUST BE HAND DUG IF THE UNDERGROUND OBJECTS ARE LOCATED WITHIN TWO FEET OF ANY FOOTING HOLE. INSTALLATION SHALL NOT COMMENCE UNTIL A CONTRACT CHANGE ORDER IS SIGNED BY ALL PARTIES INVOLVED. IF THE UNDERSIGNED FAILS TO DETERMINE THE LOCATION OF THE UNDERGROUND OBJECTS OR FAILS TO INFORM CONTRACTOR OF THE LOCATION OF THE UNDERGROUND OBJECTS, THEN THE UNDERSIGNED IS LIABLE FOR ANY DAMAGE DONE TO ANY OF THE UNDERGROUND OBJECTS. Error! Re fe pence spume notfound✓DSENERGY SOLUTIONS SOLAR SYSCEM CONSTRUCCIONAGREEMENP — Page 42 THE UNDERSIGNED INDEMNIFIES CONTRACTOR AND ITS INSTALLERS FROM ANY LOSS, CLAIM, AND EXPENSE THAT CONTRACTOR AND ITS INSTALLERS OR SUBCONTRACTORS MIGHT INCUR AS A CONSEQUENCE OF DAMAGE DONE TO UNDERGROUND OBJECTS DESCRIBED ABOVE. SHOULD SITE AND SOIL OR CONCEALED CONDITIONS BELOW THE SURFACE OF THE GROUND ENCOUNTERED IN THE PERFORMANCE OF THE WORK VARY FROM THOSE INDICATED BY THE UNDERSIGNED OR SHOULD UNKNOWN PHYSICAL CONDITIONS BELOW THE SURFACE OF THE GROUND DIFFER FROM THOSE ORDINARILY ENCOUNTERED, AN ADJUSTMENT TO THE CONTRACT PRICE WILL BE AGREED UPON AND A CONTRACT CHANGE ORDER ISSUED, AND WORK WILL CEASE UNTIL THE CONTRACT CHANGE ORDER IS SIGNED BY ALL PARTIES INVOLVED. THE UNDERSIGNED IS RESPONSIBLE FOR KEEPING THE AREA WHERE THE CARPORTS ARE TO BE ERECTED, FREE AND CLEAR OF ANY / ALL OBSTRUCTIONS AT ALL TIMES DURING THE INSTALLATION. IF CONTRACTOR AND / OR ITS INSTALLERS / SUBCONTRACTORS ARE FORCED TO PULL OFF THE JOB SITE FOR ANY REASON BEYOND THE INSTALLERS CONTROL, THE UNDERSIGNED IS RESPONSIBLE FOR THE SECURITY OF THE MATERIALS WHILE THE INSTALLER IS GONE. IF MATERIALS ARE MISSING UPON THE INSTALLERS RETURN TO THE WORK SITE, THE UNDERSIGNED WILL BEAR THE EXPENSE OF REPLACEMENT. CONTRACTOR WILL REMOVE ITS SPOILS TO A JOBSITE LOCATION AS DIRECTED BY THE PROJECT MANAGER. CONTRACTOR WILL NOT BE RESPONSIBLE FOR LABOR OR COST TO REMOVE SPOILS FROM OFF THE JOBSTTE. OBSTRUCTIONS 1) Any material which cannot be drilled continuously wider normal conditions with a conventional Earth auger or soil conditions that requires the use of special core barrels wI'R be an obstruction for the drill shaft from initial contact with the obstruction for any purpose. Continuous normal rate to be determined by and at Motive Energy Telecommunications Group, Inc. sole discretion. 2) Obstruction rate for this project will be charged at the premium hourly rate of $495.00/HR, plus any drill teeth used. Agreed to by: Error! Reference source not found. By: Error! Reference source not found.Error! Reference source not found. Error! Re fe pence spume notfound✓DSENERGY SOLUTIONS SOLAR SYSTEM CONSTRUCrIONAGREEMENr — Page 43 ENMIT L Warrunty Contractor and Owner agree as follows with respect to the System 1. WORKMANSIIIP AND EQUIPMENT WARRANTIES 1.1 Workmanship Warranty. Contractor warrants that the System will be free from defects in design and workmanship ("Workmanship Warranty') for a period of one (1) year starting from the Substantial Completion Date (the 'Warranty Period'). Contractor's liability under this warranty shall be conditioned on receipt of written notice of any defect promptly upon discovery and an opportunity to inspect the defect to verify its cause. This Workmanship Warranty shall be limited solely to the repair or replacement, as Contractor shall decide, of parts found to be defective under ordinary and proper use, for a period of one (1) year unless its ordinary fife is less. 1.2 As part of the Workmanship Warranty, Contractor warrants to Owner that all Equipment: 1.2.1 Upon incorporation into the System, the Equipment shall be new and of good quality; and 1.2.2 Upon incorporation into the System, the Equipment shall comply with all Applicable Laws and Applicable Permits. 1.3 Notwithstanding anything to the contrary contained in the Agreement, Contractor shall (i) obtain warranties from the manufacturers of the Major Components (' Major Component Warranties') and such Major Component Warranties shall comply with any obligations set forth in Section 4 below; (ii) Contractor shall assign such Major Component Warranties to Owner upon Substantial Completion; and (1) the Major Components are excluded from the Workmanship Warranty and Owner shall look solely to the manufacturer of such Major Components for remedies under the applicable Major Component Warranty. Contractor will work with the Major Component suppliers to obtain replacement of defective Major Components, but labor costs to troubleshoot, remove and/or replace Major Components not caused by the workmanship of Contractor shall not be covered under the Workmanship Warranty. 2.1 Except as provided herein, if during the Warranty Period, there occurs a breach of the Workmanship Warranty, then Contractor will have the relevant System components repaired or replaced. 2.2 The Warranty Period for any repaired or replaced Work pursuant to the Workmanship Warranty shall be one (1) year from the date of such repair or replacement. Error! Re fe pence source notfound✓DSENERGY SOLUTIONS SOLAR SYSrEM CONSPRUCrIONAGREEMENr — Page 44 2.3 To make a claim under the Workmanship Warranty, Owner shall (i) identify a faulty condition in the System that Owner reasonably believes is a breach of the Workmanship Warranty; and (it) deliver written notice to Contractor of a warranty claim. 2.4 Upon Contractor's receipt of Owner's written notice, Contractor shall, at its option, either repair or replace any defects that fall within the scope of the Workmanship Warranty. Contractor shall undertake the rectification of the defects at its own expense as promptly as possible and scheduled so as to minimize any effect on the operation of the System Such repair or replacement shall be Owner's exclusive remedy for breach of the Workmanship Warranty. If, Contractor falls to respond to such written notice, diagnose the cause of the alleged defect and deliver a remedial plan within five (5) business days after its receipt of Owner's notice ofa breach of Workmanship Warranty, or fails to diligently continue for and/or complete the required corrective actions within thirty (30) days (subject to availability oflong lead time replacement parts), then Owner may, upon written notice to Contractor, correct such defect(s) itself, in which event Contractor shall be liable for all costs, charges and expenses incurred by Owner in connection therewith and shall forthwith pay to Owner an amount equal to such reasonable costs, charges and expenses within thirty (30) days after receipt of any invoice(s) and supporting documentation therefor from Owner. 3. WARRANTY EXCLUSIONS AND LIMITATIONS The Workmanship Warranty does not apply to the following: 3.1 Misuse, abuse, neglect, alteration of the System or any Equipment. 3.2 Ordinary wear and tear of the System and/or Equipment. 3.3 Damage or malfunction caused by a failure of Owner or an operations and maintenance contractor selected by Owner ("O&M Contractor') to properly operate, maintain or repair the System in accordance with the applicable operation and maintenance manual and any applicable requirements of the Equipment manufacturers. 3.4 Damage or malfunction caused by any repair, replacement or installation of a part or service not provided or authorized in writing by Contractor. 3.5 Damage or malfumction resulting from Owner's or third -parry abuse, accident, alteration, improper use, negligence or vandalism, theft, animals, livestock and/or pests. 3.6 Damage or malfunction resulting from the performance of repairs, maintenance or replacement of the System components by others, without prior written consent authorized by Contractor. 3.7 Damage or malfunction resulting from unusual or extreme power surges from the electric grid. 3.8 Damage or malfunction resulting from any Force Majeure Event. 3.9 Negligent acts or willful misconduct of Owner. 3.10 A casualty event that damages the System THE WARRANTIES SET FORTH IN THIS AGREEMENT ARE EXCLUSIVE AND IN LIEU OF ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, FOR PERFORMANCE, MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE —OR OTHERWISE. THERE ARE NO OTHER WARRANTIES, AGREEMENTS, OR UNDERSTANDINGS, ORAL Error! Re fe Renee source notfound✓DSENERGY SOLUTIONS SOLAR SYSrEM CONSPRUCrIONAGREEMENr — Page 45 OR WRITTEN, WHICH EXTEND BEYOND THOSE SET FORTH IN THIS AGREEMENT WITH RESPECT TO THE WARRANTIF_D WORK, MATERIALS AND EQUIPMENT. 4. WARRANTIES FOR SYSTEM COMPONENTS Warranties for the components of the System, specifically including, but not limited to, photovoltaic modules, inverters, monitoring, and battery systems, as applicable, are provided by the manufacturers of said components. The battery system has a three (3) year performance guarantee which is dependent upon certain maintenance of the battery being performed and documented. Contractor offers a battery maintenance agreement to perform the required battery maintenance which may be purchased separately any time prior to the first anniversary of the Substantial Completion Date. Contractor also offers a system maintenance agreement which may be purchased separately any time prior to the first anniversary of the Substantial Completion Date. Error! Reference source notfound✓DSENERGY SOLUTIONS SOLAR SYSrEM CONSPRUCrIONAGREEMENr — Page 46 EXIIIBIT M PROJECT INFORMATION (To be completed by Owner) Property Address Error! Reference source not found. Property Owner Name Error! Reference source not found. Property Owner Address Project Lender Name Project Lender Address Loan Number Payment Bonding Company Name Bonding Company Address Bond Number Prevailing Wage Required r Yes No DIR# Error! Re fe pence source notfound✓DSENERGY SOLUTIONS SOLAR SYSrEM CONSPRUCrIONAGREEMENr — Page 47 11M.111 11 MECHANICAL COMPLETION CERTIFICATE Reference is made to that certain that certain Solar System Construction Agreement (the Agyeement") which was entered into on the _day of between Error! Reference source not found. (the "Owner') and DS Energy Solutions, a division of Motive Energy Telecommunications Group, Inc. (the "Contractor'). Capitalized terms used but not defined herein shall have the meaning set forth in the Agreement. 1. Pursuant to Section 11.3 of the Agreement, Contractor certifies to Owner the following: (A) Contractor has completed the design, engineering, procurement and construction of the System, including the installation of all AC and DC wiring and connection of all equipment, wiring, controls, and safety systems; (B) All instruments and relays have been installed and are functional as to the extent permissible prior to interconnection; and (C) the System is ready for operation as to the extent permissible prior to interconnection, pending only the interconnection and synchronization of the System with Utility's distribution system 2. Based on the foregoing, the Mechanical Completion Date is Executed by Contractor this day of , 20_. Contractor: DS Energy Solutions, a division of Motive Energy Telecommunications Group, Inc. By: Name: Title: Acknowledged by Owner this day of . 20. Owner: Error! Reference source not found. By: Name: Title: Error! Re fe pence source notfound✓DSENERGY SOLUTIONS SOLAR SYSrEM CONSPRUCrIONAGREEMENr — Page 48 EXIHBIT Q FINAL COMPLETION CERTIFICATE Reference is made to that certain Solar System Construction Agreement (the Agreement") which was entered into on the _day of , 20 between Error! Reference source not found. (the "Owner') DS Energy Solutions, a division of Motive Energy Telecommunications Group, Inc. (the "Contractor'). Capitalized terror used but not defined herein shall have the meaning set forth in the Agreement. 1. Pursuant to Section 11.6 of the Agreement, the undersigned, Contractor, does hereby certify and represent to Owner that Final Completion has been achieved based on completion of each of the following: (A) Contractor has delivered to the Owner a final O&M Manual, including all changes and supplements to the O&M Manual as reasonably requested by the Owner and as reasonably agreed by Contractor; (B) Contractor has delivered to Owner Final As -Built Submittal, all shop drawings, all test reports; (C) Substantial Completion has occurred; (D) All items as identified on the Punchlist agreed at time of Substantial Completion have been completed or waived. 2. Based on the foregoing, the date of Final Completion is Executed by Contractor this day of , 20. DS Energy Solutions, a division of Motive Energy Telecommunications Group, Inc. By: Name: Title: Acknowledged by Owner this day of , 20_. Owner: Error! Reference source not found. By: Name: Title: ATTACHMENT NO.4 EQUIPMENT LEASE PURCHASE AGREEMENT BETWEEN ALLIANCE FUNDING SOLUTIONS, INC., as Lessor AND CITY OF WEST COVINA, as Lessee DATED AS OF [March _, 2021] TABLE OF CONTENTS Page ARTICLE 1 DEFINITIONS.................................................................................................I ARTICLE2 LEASE.............................................................................................................2 ARTICLE 3 LEASE TERM.................................................................................................2 ARTICLE 4 RENTAL PAYMENTS................................................................................... 3 4.1 Amount and Times of Payment............................................................................. 3 4.2 Place of Payments.................................................................................................. 3 4.3 Late Charges.......................................................................................................... 3 4.4 Abatement of Rental Payments.............................................................................. 3 4.5 Allocation of Interest.............................................................................................3 4.6 Rental Adjustment.................................................................................................. 3 4.7 Appropriation.........................................................................................................3 4.8 Unconditional Current Obligation......................................................................... 4 ARTICLE5 ESCROW FUND.............................................................................................4 5.1 Escrow Fund.......................................................................................................... 4 5.2 Intentionally Omitted............................................................................................. 4 5.3 Termination............................................................................................................5 ARTICLE 6 RESPONSIBILITIES OF LESSEE................................................................. 5 6.1 Care and Use.......................................................................................................... 5 6.2 Inspection............................................................................................................... 5 6.3 Utilities...................................................................................................................5 6.4 Taxes...................................................................................................................... 5 6.5 Alterations..............................................................................................................6 6.6 Transportation and Installation Charges................................................................ 6 6.7 Insurance................................................................................................................ 6 6.8 Risk of Loss........................................................................................................... 6 6.9 Performance by the Lessor of the Lessee's Responsibilities .................................. 7 6.10 Financial Statements.............................................................................................. 7 ARTICLE 7 EQUIPMENT...................................................................................................7 7.1 Title........................................................................................................................ 7 7.2 Security Agreement................................................................................................ 8 1142905210 _i TABLE OF CONTENTS (continued) Page 7.3 Personal Property................................................................................................... 9 7.4 Liens.......................................................................................................................9 7.5 Inspection............................................................................................................... 9 7.6 Use of Equipment; Maintenance and Repairs........................................................ 9 7.7 Essentiality...........................................................................................................10 ARTICLE 8 WARRANTIES AND REPRESENTATIONS OF THE LESSEE ............... 10 ARTICLE 9 WARRANTIES AND REPRESENTATIONS OF THE LESSOR...............11 ARTICLE 10 WARRANTIES AND REPRESENTATIONS OF THE ESCROW AGENT..........................................................................................................12 ARTICLE 11 TAX COVENANTS AND INDEMNIFICATION ....................................... 13 11.1 Covenants.............................................................................................................13 11.2 Further Covenants................................................................................................13 11.3 Indemnification.................................................................................................... 13 ARTICLE 12 GENERAL INDEMNIFICATION................................................................14 ARTICLE 13 INTENTIONALLY OMITTED.................................................................... 14 ARTICLE 14 DEFAULT AND REMEDIES....................................................................... 14 14.1 Definition of Default............................................................................................ 14 14.2 Remedies on Default............................................................................................ 15 14.3 Further Remedies................................................................................................. 15 14.4 Reinstatement.......................................................................................................16 ARTICLE 15 NON-APPROPRIATION.............................................................................. 16 15.1 Nature of0bligations ofthe Lessee..................................................................... 16 15.2 Notice of Appropriation....................................................................................... 17 15.3 Non-Substitution..................................................................................................17 ARTICLE 16 ASSIGNMENT..............................................................................................17 16.1 Assignment By Lessee......................................................................................... 17 16.2 Assignment By The Lessor.................................................................................. 17 16.3 Escrow Assignment By the Lessor......................................................................17 ARTICLE 17 NATURE OF AGREEMENT........................................................................ 18 ARTICLE 18 OPTION TO PURCHASE............................................................................. 18 1142905210 -ii- TABLE OF CONTENTS (continued) Page ARTICLE 19 MISCELLANEOUS...................................................................................... 19 19.1 Waiver..................................................................................................................19 19.2 Severability.......................................................................................................... 19 19.3 Governing Law.................................................................................................... 19 19.4 Notice...................................................................................................................19 19.5 Section Headings..................................................................................................19 19.6 Entire Agreement.................................................................................................20 19.7 Binding Effect...................................................................................................... 20 19.8 Time..................................................................................................................... 20 19.9 Counterparts......................................................................................................... 20 19.10 No Third -Party Beneficiaries............................................................................... 20 19.11 Exhibits................................................................................................................ 20 Lease Documents: Equipment Lease -Purchase Agreement; Exhibit A — Description of Equipment; Exhibit B - Equipment Schedule; Exhibit C — Notice and Acknowledgment of Assignment; Exhibit D- 1 —Insurance Coverage Request; Exhibit D-2 — Intentionally Omitted; Exhibit E — Essential Use Certificate; Exhibit F — Incumbency Certificate; Exhibit G — Opinion of Lessee's Counsel; Exhibit H — Tax Opinion of Lessee's Counsel; Exhibit I — Bank Qualified Certificate; Exhibit J — Post Issuance Tax Compliance Procedures; Exhibit K — Escrow Agreement; Exhibit L —City Council Meeting Minutes from Meeting held on [April 6, 2021 ]; Exhibit M—Form 8038-G; and Exhibit N — Closing Memorandum/Payment Proceeds Direction. 1142905210 -in EQUIPMENT LEASE PURCHASE AGREEMENT THIS EQUIPMENT LEASE PURCHASE AGREEMENT, (as amended or supplemented from time to time, this 'Lease Agreement') dated as of [March _, 20211, between ALLIANCE FUNDING SOLUTIONS, INC., a California corporation (together with its successors and assigns, the "Lessoe), whose mailing address is 12520 High Bluff Drive, Suite 345, San Diego, California 92130, and the CITY OF WEST COVINA, a government organization of the State of California (the "Lessee'), whose mailing address is 1444 W Garvey Avenue S, West Covina, California 91790. WITNESSETH: WHEREAS, the Lessor has agreed lease the Equipment (as hereinafter defined) to the Lessee, and the Lessee has agreed to lease the Equipment from the Lessor, pursuant to the terms and conditions hereinafter set forth; NOW, THEREFORE, for and in consideration of the premises and of the covenants hereinafter contained, and other good and valuable considerations, the mutual parties hereto agree as follows: ARTICLE 1 DEFINITIONS For purposes of this Lease Agreement and any related documents, the following definitions will apply: 1.1 Acceptance Certificate. A certificate in the form attached as Exhibit A to the Escrow Agreement. 1.2 Authorized Representative. With respect to the Lessee, the City Manager and any other authorized representative of the Governing Body or other person or officer approved by Lessee in writing. 1.3 Code. The Internal Revenue Code of 1986, as amended. 1.4 Governing Body. The City Council of the Lessee. 1.5 Concluding Payment. Shall have the meaning set forth in Article 18. 1.6 Commencement Date. Shall have the meaning set forth on Exhibit B. 1.7 Costs of the Equipment. The total cost of acquisition and installation of the Equipment, including costs of issuance ($3,215,098.00). 1.8 Default Rate. Shall have the meaning set forth in Section 4.3. 1142905210 1.9 Equipmerit. The personal property described in Exhibit A to this Lease Agreement that is now or may hereafter from time to time become attached hereto and incorporated herein by reference, together and with any and all additions, modifications, attachments, substitutions, repairs, accessories, replacements, parts and proceeds thereof. 1.10 Escrow Agent. Santa Cruz County Bank and its successors and assigns. 1.11 Escrow Agreement. The Escrow Agreement of even date herewith among the Lessor, the Lessee and the Escrow Agent in substantially the form attached hereto as Exhibit K. 1.12 Escrow Fund. The fund of such name created under the Escrow Agreement. 1.13 Event of Nonappropriation. Shall have the meaning set forth in Section 4.6(b). 1.14 Fiscal Year. Shall mean July 1 through June 30 of each year. 1.15 Lease Term. The period of time described in Article 3 of this Lease Agreement. ARTICLE 2 LEASE The Lessor hereby sells, transfers and leases to the Lessee, and the Lessee hereby acquires, purchases and leases from the Lessor, the Equipment. The Lessee shall be entitled to possession the Equipment so long as the Lessee is not in default under this Lease Agreement and the Lessee has not failed to appropriate any amounts required to be paid by it hereunder. ARTICLE 3 LEASE TERM The Lease Tenn shall commence on the Commencement Date and shall terminate, except as otherwise expressly provided herein, upon the first to occur of. (a) the exercise by Lessee of the option to purchase the Equipment pursuant to Article 18 hereof, (b) Lessor's election to terminate this Lease Agreement pursuant to Article 15; (c) termination of this Lease Agreement due to an Event of Nonappropriation or (d) upon payment by the Lessee of the scheduled rental payments and all other amounts due and payable hereunder. ARTICLE 4 RENTAL PAYMENTS 4.1 Amount and Times of Payment. The Lessee hereby agrees to pay rental payments hereunder in the amounts and on the dates identified in Exhibit B. 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. 1142905210 4.2 Place of Payments. All rental payments required to be made to the Lessor hereunder shall be made at the Lessor's principal office or as may be otherwise directed by the Lessor. The Lessee shall pay the rental payments in lawful money of the United States of America from moneys legally available therefor. 4.3 Late Charges. Whenever any rental payment or other amount payable to Lessor by Lessee hereunder is not paid within ten (10) business days after such due date, Lessee agrees to pay Lessor a late charge on the delinquent amount at the `Default Rate," which is one percent (1%) per month, or the maximum amount permitted under applicable law, whichever is less. 4.4 Current Expense. The Lessee's obligation to pay rental payments and any additional amounts payable hereunder constitutes a current obligation payable exclusively from legally available fiords and shall not be construed to be an indebtedness within the meaning of any applicable constitutional or statutory limitation or requirement. THIS LEASE AGREMENT IS NOT A PLEDGE OF THE FULL FAITH AND CREDIT OF THE LESSEE, AND DOES NOT CREATE ANY OBLIGATION ON THE PART OF THE LESSEE EXCEPT AS SPECIFICALLY STATED HEREIN, 4.5 Unconditional Payment Obligation. Subject to Section 15.1 hereof, the Lessee's obligation to pay all amounts payable hereunder and the Lessee's obligations otherwise to perform its obligations under or with respect to the Lease Agreement, are and shall be absolute and unconditional and shall not be affected by any circumstances whatsoever, including (i) any right of setoff, counterclaim, recoupment, deduction, abatement, defense or other right which the Lessee may have against the Lessor, the manufacturer or vendor of the Equipment, or any other person, for any reason whatsoever, including, those arising or allegedly arising out of claims (present or future, alleged or actual, and including claims arising out of strict liability in tort or negligence of the Lessor) of the Lessee against the Lessor under this Lease Agreement or otherwise, (ii) any defect in the title, condition, design, operation, or fitness for use of; or any damage to or loss or destruction of all or any portion of, the Equipment, or any interruption or cessation in the use or possession thereof by the Lessee for any reason whatsoever, (in) the existence of any collateral, guaranty or security interest, (iv) any insolvency, bankruptcy, reorganization or similar proceedings by or against Lessee, (v) any force majeure event, or (vii) any other circumstance, happening or event whatsoever. It is the intention of the parties that all rental payments and other amounts due hereunder shall continue to be payable in all events in the manner and at the times set forth herein unless the obligation to do so shall have been terminated pursuant to the express terms hereof. 4.6 Appropriation. (a) Lessee represents and warrants that: (i) it has made sufficient appropriations or has other legally available funds to pay all rental payments hereunder due during the first Fiscal Year of the Lease Term; (ii) the officer of Lessee responsible for budget preparation will do all things lawfully within his/her power to obtain appropriated funds for the payment of rental payments and other amounts required to be paid hereunder in each succeeding Fiscal Year during the Lease Term; and (in) Lessee acknowledges that Lessor has relied upon these representations as an inducement to enter into this Lease Agreement. If an Event of Nonappropriation (hereinafter defined) shall occur, Lessee agrees, at Lessee's sole cost and expense, peaceably to deliver the 1142905210 corresponding Equipment to Lessor in the condition required by Section 6.1 at such location in the continental United States specified by the Lessor on or before the effective date of termination. (b) Notwithstanding any provision to the contrary in this Lease Agreement, if sufficient funds are not appropriated by the Governing Body to pay rental payments and other amounts due hereunder (an `Event of Nonappropriation') this Lease Agreement shall terminate as of the end of the Fiscal Year for which fiords have been appropriated to pay all amounts hereunder. ARTICLE 5 ESCROW FUND 5.1 Escrow Fund. On the Commencement Date upon satisfaction of the Lessor's requirements to closing (including, without limitation, the execution and delivery to the Lessor of (1) an incumbency certificate in substantially the form attached as Exhibit F hereto, (2) an Opinion of Lessee's Counsel in substantially the form attached as Exhibit G hereto and (3) a Tax Opinion of Lessee's Counsel reasonably acceptable to Lessor in its sole discretion, Lessor shall deposit: $3,215,098.00 into the Escrow Fund to be held in escrow and applied upon the express terms and conditions of the Escrow Agreement for the acquisition of the Equipment. The Lessee shall order the Equipment, cause the Equipment to be delivered and installed at the location specified in Exhibit B and pay any and all delivery and installation costs and other Equipment costs in connection therewith. When the Equipment has been delivered and installed, Lessee shall promptly accept such Equipment and evidence said acceptance by executing and delivering to Lessor an Acceptance Certificate. The insufficiency of the amount in the Escrow Fund to pay all costs of the Equipment and any other costs related thereto shall not affect Lessee's obligations hereunder. ARTICLE 6 RESPONSIBILITIES OF LESSEE 6.1 Care and Use. The Lessee shall use the Equipment in a careful and proper manner, in compliance with all applicable laws and regulations, and at its sole cost and expense, service, repair and maintain the Equipment so as to keep the Equipment in good condition, repair, appearance and working order for the purposes intended, ordinary wear and tear excepted, and shall replace any part of the Equipment as may from time to time become worn out, lost, stolen, destroyed or damaged or is unfit for use. Any and all additions to orreplacements of the Equipment and all parts thereof shall constitute accessions to the Equipment and shaIl be subject to all the terms and conditions of this Lease Agreement and included in the term 'Equipment" as used in this Lease Agreement. 6.2 Inspection. The Lessor shall have the right upon reasonable prior notice to the Lessee to enter into and upon the premises where the Equipment is located to inspect the Equipment and observe its use during normal business hours. 6.3 Utilities. The Lessee shall pay aH charges for gas, water, steam, electricity, light, heat or power, telephone or other utility service, if any, famished to or used in connection with the 1142905210 Equipment during the term of this Lease Agreement. There shall be no abatement of rental payments on account of interruption of any such services. 6.4 Taxes. The Lessee agrees to pay when due any and all taxes relating to the Equipment and the Lessee's obligations hereunder, including but not limited to, all license or registration fees, gross receipts tax, sales and use tax, if applicable, license fees, documentary stamp taxes, rental taxes, assessments, charges, ad valorem taxes, excise taxes, and all other taxes, licenses and charges imposed on the ownership, possession or use of the Equipment by any governmental body or agency, together with any interest and penalties, other than taxes on or measured by the net income of the Lessor. 6.5 Alterations. Without the prior written consent of the Lessor, which consent shall not be unreasonably withheld, the Lessee shall not make any alterations, modifications or attachments to the Equipment which cannot be removed without materially damaging the functional capabilities or economic value of the Equipment. Upon return of the Equipment and at the Lessor's request, the Lessee at its sole cost and expense, will remove all alterations, additions and attachments and repair the Equipment as necessary to return the Equipment to the condition in which it was furnished, ordinary wear and tear excepted. 6.6 Transportation and Installation Charges. The Lessee shall be responsible for all charges relating to the transportation of the Equipment to the Lessee's location and the installation at such location. 6.7 Insurance. The Lessee shall continuously maintain at its sole cost and expense or cause to be maintained (i) public liability insurance for death or injuries to persons, or damage to property arising out of or in any way connected to the Equipment sufficient to protect Lessor and its assigns from liability in all events and (ii) casualty insurance on the Equipment covering such risks as are customarily insured against by reasonable and prudent government bodies of like size for such equipment, and in such amounts at a minimum equal to the greater of the outstanding principal amount under this Lease Agreement or the replacement value of the Equipment with such deductibles as required, and with such insurance companies as shall be reasonably satisfactory to the Lessor. Lessor shall be named as an additional insured on any such policy that insures the Equipment and the policy shall be endorsed to name the Lessor as a loss payee. The Lessee shall pay the premiums therefor and deliver to the Lessor the policies of insurance or duplicates thereof and a certification in the form of Exhibit D-1 or other evidence reasonably satisfactory to the Lessor of such insurance coverage. Each insurer shall also agree by endorsement upon the policy or policies issued by it that it will give thirty (30) days prior written notice to the Lessor of cancellation, non -renewal, or material modification of such policy and ten (10) days prior written notice for non-payment of premium In lieu of the insurance policies described above, and with the consent of the Lessor, which consent shall not be unreasonably withheld, the Lessee may self - insure the Equipment by means of a self-insurance program whereby funds are set aside and maintained for the purpose of self -insuring the property of the Lessee. If Lessee chooses to self - insure the Equipment, Lessee will provide Lessor a certification in the form of Exhibit D-2 together with evidence of the self-insurance program in form and substance satisfactory to Lessor. 6.8 Risk of Loss. Lessee shall bear the entire risk of loss, theft, destruction of or damage to the Equipment or any part thereof from any cause whatsoever during the Lease Term 1142905210 and thereafter until redelivery to a location designated by Lessor, and shall not be relieved of the obligation to pay rental payments or any other obligation hereunder because of any such occurrence. If (a) the Equipment or any portion thereof hereunder 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 hereunder is taken under the exercise of the power of eminent domain, Lessee shall immediately notify Lessor. Lessee and Lessor shall cause the net proceeds of any insurance claim (including self-insurance) or condenmation award to be applied, at Lessor's option, to (i) the prompt repair, restoration, modification or replacement of the Equipment so affected or (ii) the payment in full of the then applicable Concluding Payment. Any balance of net proceeds remaining after completion of such work or payment of such Concluding Payment shall be paid promptly to Lessee. If the net proceeds are insufficient to pay the costs of such repair, restoration, modification or replacement or to pay such Concluding Payment in full, Lessee shall, at Lessor's direction and sole discretion, either complete the work or pay the then applicable Concluding Payment in fA and in either case pay any cost in excess of the amount of net proceeds, but only from legally available funds. 6.9 Performance by the Lessor of the Lessee's Responsibilities. Any performance required of the Lessee or any payments required to be made by the Lessee, if not timely performed or paid, may be performed or paid by the Lessor, and in that event, the Lessor shall be immediately reimbursed by the Lessee for these payments and for any costs and expense, legal or otherwise, associated with the payments or other performance by the Lessor, with interest thereon at the Default Rate. 6.10 Financial Statements. The Lessee agrees that it will furnish the Lessor not later than ten (10) days prior to the end of each Fiscal Year, the Lessee's annual budget or other proof of appropriation for the ensuing Fiscal Year and such other information relating to Lessee's ability to continue the Lease Term for the next succeeding Fiscal Year, and permit the Lessor or its agents and representatives to inspect the Lessee's books and records and make extracts therefrom. Additionally, Lessee shall famish to Lessor as soon as available, but in no event later than 180 days after the end of each Fiscal Year, the audited financial statements of Lessee, in customary and reasonable detail including the report provided by Lessee's auditor. The Lessee represents and warrants to the Lessor that all financial statements which have been delivered to the Lessor, if any, and accurately reflect the Lessee's financial condition and there has been no material adverse change in Lessee's financial condition as reflected in the statements since the date thereof. ARTICLE 7 EQUIPMENT 7.1 Title. Title to the Equipment and any and all additions, repairs, replacements or modifications thereto, shall be vested in the Lessee subject to the rights of the Lessor hereunder so long as the Lessee shall not be in default hereunder and/or this Lease Agreement shall not have been terminated pursuant to the provisions of Article 15 hereof. Immediately upon the occurrence of an event of default by the Lessee hereunder or the termination of this Lease Agreement under Article 15, title to the Equipment (and all additions, repairs, replacements ormod£lcations thereto) shall vest in the Lessor, free and clear of any right, title or interest of the Lessee unless the Lessor elects otherwise, without the necessity of any farther action or the execution of any documents by 1142905210 the parties. Upon timely receipt of all amounts required for the purchase of the Equipment pursuant to Section 4.1 or Article 18 this Agreement shall terminate, all of Lessor's security interest in the Equipment shall terminate, and Lessor shall deliver to Lessee all such documents and instruments as Lessee may reasonably request to evidence the termination of this Agreement and Lessor's security interest in the Equipment, without warranty by or recourse to Lessor. 7.2 Security Agreement. (a) To secure the performance of all of Lessee's obligations hereunder, Lessee hereby grants to Lessor, and Lessor shall have and retain, a security interest constituting a first priority and perfected lien and security interest on the Equipment. Lessee agrees to execute and deliver such additional documents, including, without limitation, opinions of counsel, financing statements, landlord -tenant or mortgagee waivers, notices and similar instruments, in form satisfactory to Lessor, that Lessor deems necessary or appropriate to establish and maintain its security interest in the Equipment or for the confirmation or perfection of Lessor's rights hereunder. As firther security therefor, Lessee hereby grants to Lessor a first priority security interest in the cash and negotiable instruments from time to time in the Escrow Fund and all proceeds (cash and non -cash) thereof, and agrees with respect thereto that Lessor shall have all the rights and remedies of a secured party under the applicable provisions of the Uniform Commercial Code. Lessee, at its expense, will protect and defend Lessee's rights in the Equipment and Lessor's rights and interests therein and will keep the Equipment free and clear from any and all claims, liens, encumbrances and legal processes of Lessee's creditors and other persons. 7.3 Personal Property. The Equipment is, and shall at all tunes be and remain, personal property notwithstanding that the Equipment or any part thereof may now be, or hereafter become, in any manner affixed or attached to, or imbedded in, or permanently resting upon, real property. Upon request of the Lessor, Lessee shall obtain, as to any place where the Equipment is located, a waiver from the landlord and mortgagee thereof with respect to any rights they may have in and to the Equipment or the rights of levy or seizure thereon. 7.4 Liens. The Lessee shall not directly or indirectly create, incur, assume or suffer to exist any mortgage, pledge, lien, charge, security interest, encumbrance or claim on or with respect to the Equipment or any interest therein, except for the lien and security interest of the Lessor therein created under this Lease Agreement. The Lessee shall promptly, at its own expense, take such action as may be necessary to duly discharge any such mortgage, pledge, lien, security interest, charge, encumbrance or claim if the same shall arise at any time. 7.5 Use of Equipment; Maintenance and Repairs. Lessee shall keep the Equipment at the "Equipment Location" specified in Exhibit B and Lessee shall not remove any of the Equipment therefrom without Lessor's prior written consent. Lessee shall use the Equipment for the purpose for which such Equipment was designed. Lessee shall at all times and at the Lessee's sole cost and expense operate, maintain, service and repair the Equipment in good operating order, repair and condition (A) in accordance and consistent with (1) the manufacturer's warranties, recommendations and all maintenance and operating manuals or service agreements, whenever ftrnished or entered into, including any subsequent amendments or replacements thereof, issued by the manufacturer, (2) the requirements of all applicable insurance policies, (3) preserving all rights to any warranties, indemnities or other rights or remedies (such service to include monitoring 1142905210 the degradation of the Equipment and enforcing or assisting with the enforcement of the applicable warranties with respect to such degradation), (4) all applicable laws, ordinances, regulations or requirements of any governmental authority, official, board or department relating to its installation, possession, use or maintenance, and (5) prudent industry standards; and (B) without limiting the foregoing, so as to cause the Equipment to be in at least the same condition as when delivered to the Lessee hereunder, except for ordinary wear and tear. Lessee shall not make any alterations, additions, or improvements to the Equipment that are not readily removable without causing damage to or reducing the value of the Equipment. All alterations, additions, or improvements not readily removable shall become property of Lessor. 7.6 Essentiality. Lessee represents that, with respect hereto, (a) the use and operation of the Equipment is essential to its proper, effiicient, and economic governmental operation and (b) the functions performed by the Equipment could not be transferred to other equipment available for its use. Lessee does not intend to sell or otherwise dispose of the Equipment or any interest therein prior to the last rental payment scheduled to be paid hereunder. On the Commencement Date, Lessee shall complete and provide Lessor a certificate in the form of Exhibit E. 7.7 Sublease. Lessee will not sublease or otherwise in any manner transfer, deliver or, except as expressly consented to by Lessor, relinquish possession (except on a temporary basis for repair or uaintenance) or use of the Equipment without the prior written consent of Lessor. 7.8 No Warranties. Lessee acquires and leases the Equipment AS IS." Lessee acknowledges that Lessor did not manufacture the Equipment. Lessor does not represent the manufacturer, supplier, owner or dealer, and Lessee selected the Equipment based upon Lessee's own judgment. Lessor makes no warranties, express or implied, including warranties of merchantability or fitness for a particular purpose or otherwise or as to the Equipment's value, design, condition, use, capacity or durability. Lessee agrees that regardless of cause, Lessor is not responsible for, and Lessee will not make any claim against Lessor for, any damages, whether consequential, direct, special or indirect incurred by Lessee in connection with the Equipment. Neither the manufacturer, supplier or dealer nor any salesperson, employee or agent of the manufacturer, supplier or dealer is Lessor's agent or has any authority to speak for Lessor or to bind Lessor in any way. For and during the Lease Term, Lessor assigns to Lessee any manufacturer's or supplier's product warranties, express or implied, applicable to any Equipment and Lessor authorizes Lessee to obtain the customary services furnished in connection with such warranties at Lessee's sole expense. Lessee agrees that (a) all Equipment will have been purchased in accordance with Lessee's specifications from suppliers selected by Lessee, (b) Lessor is not a manufacturer or dealer of any Equipment and has no liability for the delivery or installation of any Equipment, (c) Lessor assumes no obligation with respect to any manufacturer's or supplier's product warranties or guaranties, (d) no manufacturer or supplier or any representative of said parties is an agent of Lessor, and (e) any warranty, representation, guaranty or agreement made by any manufacturer or supplier or any representative of said parties shall not be binding upon Lessor. 1142905210 ARTICLE 8 WARRANTIES AND REPRESENTATIONS OF THE LESSEE The Lessee warrants and represents to the Lessor as follows, which representations and warranties shall be continuing. (a) The Lessee is a political subdivision of the State of California within the meaning of Section 103(c) of the Code. (b) The Lessee is authorized under the Constitution and laws of the State of California to enter into this Lease Agreement and the transactions contemplated hereby and to perform all of its obligations hereunder. (c) The execution and delivery of this Lease Agreement by or on behalf of the Lessee has been duly authorized by all necessary action of the Governing Body, and the Lessee has obtained such other approvals and consents as are necessary to consummate this Lease Agreement. (d) The Lessee has complied with such public bidding requirements as may be applicable to this Lease Agreement and such action is in compliance with all public bidding and other State and federal laws applicable to this Agreement and the acquisition and financing of the Equipment by Lessee. (e) The Lessee has an immediate need for, and expects to make immediate use of all of the Equipment which need is not temporary or expected to diminish during the Lease Term (f) The execution, delivery and performance of this Lease Agreement and transactions contemplated herein will not violate any judgment, order, law or regulation applicable to the Lessee or result in any breach of, or constitute a default under, any indenture, mortga gel deed of trust, bond, loan or credit agreement or other instrument to which the Lessee is a parry or by which it is bound. (g) There are no actions, suits or proceedings pending or, to the knowledge of the Lessee, threatened against or affecting the Lessee in any court or before any governmental commission, board or authority which, if adversely determined, would have a material adverse effect on the ability of the Lessee to perform its obligations hereunder. (h) The Equipment is essential to and will be used only for the purpose of performing one or more governmental functions of the Lessee consistent with the scope of the Lessee's authority and will not be used in a trade or business of any person or entity. (i) The Lessee has sufficient fiords in its budget for the current Fiscal Year to pay the aggregate amount of the rental payments due under this Lease Agreement during the current Fiscal Year. 9 1142905210 ARTICLE 9 WARRANTIES AND REPRESENTATIONS OF THE LESSOR The Lessor warrants and represents to the Lessee as follows, which representations and warranties shall be continuing. (a) The Lessor is a financial institution duly incorporated under the laws of the State of California and is in good standing with the State of California and is duly authorized to enter into the transactions contemplated by this Lease Agreement and to carry out its obligations hereunder; (b) The Lessor has M power and authority to enter into this Lease Agreement and all other documents relating thereto and the performance of the Lessor's obligations hereunder have been duly and validly authorized, executed and delivered by the Lessor and approved under all laws, regulations and procedures applicable to Lessor and this Lease Agreement constitutes a valid, legal and binding obligation of the Lessor, enforceable in accordance with its terms; ARTICLE 10 INTENTIONALLY OMITTED ARTICLE 11 W—VOKV-111 ,"A" 'W"A I _I] 1►11] 115_1 [MV:1I Y [ILI 11.1 Covenants. The Lessee covenants and agrees that it will (i) rebate an amount equal to any excess earnings on the Escrow Fund to the Federal Government if required by, and in accordance with, Section 148(l) of the Code, and make the annual deten-driations, and maintain the records required by and otherwise comply with all regulations applicable thereto; (i1) register in writing the owner of this Lease Agreement so as to meet the applicable requirements of Section 149(a)(3) of the Code; (iii) timely file a Form 8038-G with the Internal Revenue Service in accordance with Section 149(e) of the Code; (iv) not permit the Equipment to be directly or indirectly used for a private business use within the meaning of Section 141 of the Code; and (v) comply with all provisions and regulations applicable to excluding interest from Federal gross income pursuant to Section 103 of the Code. 11.2 Further Covenants. The Lessee further covenants that it will not take any action, or fail to take any action, if any such action or failure to take action would adversely affect the exclusion from gross income of the interest portion of the rental payments hereunder under Section 103 of the Code. The Lessee will not directly or indirectly use or permit the use of any proceeds available from the Lessor or any other funds of the Lessee, or take or omit to take any action that would cause the lease purchase obligation evidenced by this Lease Agreement to be an "arbitrage bond" within the meaning of Section 148(a) of the Code. To that end, the Lessee will comply with all requirements of Section 148 of the Code to the extent applicable to the lease purchase obligatio n evidenced by this Lease Agreement. 10 1142905210 11.3 Indemnification. If the Lessor receives notice, in any form, from the Internal Revenue Service that it has determined that the Lessor may not exclude any interest paid hereunder from Federal gross income due to an act or omission of the Lessee, then the Lessee shall pay to the Lessor, within ninety (90) days after the Lessor notifies the Lessee of such determination, an amount which, with respect to the rental payments previously paid and taking into account all penalties, fines, interest and additions to tax (including all federal, state and local taxes imposed on the interest component of all rental payments due through the date of such event), will restore to the Lessor its after-tax yield (assuming tax at the highest marginal tax rate and taking into account the time of receipt of payments and reinvestment at the after-tax yield rate) on the transaction evidenced by this Lease Agreement through the date of such payment. Additionally, the Lessee agrees that upon the occurrence of such an event, it shall pay as additional rent to the Lessor on such succeeding rental payment due date such amount as will maintain such after-tax yield to the Lessor. Notwithstanding the foregoing, the Lessee's obligations under this paragraph shall be subject to the appropriation of funds for such purpose by the Governing Body. ARTICLE 12 GENERAL INDEMNIFICATION The Lessee hereby agrees to indemnify, protect and save the Lessor harmless, to the extent permitted by law, from all liability, obligations, losses, claims, damages, actions, suits, proceedings, costs and expenses, including attorneys' fees, arising out of, connected with, or resulting directly or indirectly from the Equipment, including without limitation, the manufacture, selection, delivery, possession, condition, lease, use, operation or return of the Equipment. The indemnification arising under this section shall continue in full force and effect notwithstanding the full payment of all obligations due under this Lease Agreement. Notwithstanding the foregoing, the Lessee does not waive any sovereign immunity or other defense which may be available to it under applicable law. ARTICLE 13 INTENTIONALLY OMITTED ARTICLE 14 DEFAULT AND REMEDIES 14.1 Definition of Default. The Lessee shall be deemed to be in default hereunder upon the happening of any of the following events of default (each, an "Event of Default"). (a) The Lessee shall fail to make any rental payment or pay any other sum under this Lease Agreement when due other than by reason of an Event of Nonappropriation; (b) The Lessee shall fail to maintain insurance as required herein; (c) With the exception of the above clauses (a) or (b), the Lessee shall fail to perform or observe any term or condition or covenant of this Lease Agreement for a period of 11 1142905210 thirty (30) days after written notice by Lessor to Lessee specifying such failure and requesting that it be remedied, unless Lessor shall agree in writing to an extension of time prior to its expiration; (d) Proceedings under any bankruptcy, insolvency, reorganization or similar litigation shall be instituted by or against the Lessee, or a receiver, custodian or similar officer shall be appointed for the Lessee or any of its property, and such proceedings or appointments shall not be vacated, or fully stayed, within sixty (60) days after the institution or occurrence thereof. (e) Any warranty, representation or statement made by the Lessee is found to be incorrect or misleading in any material respect on the date made. 14.2 Remedies on Default. Upon the occurrence of any Event of Default, the Lessor may exercise any one or more of the following remedies as the Lessor in its sole discretion shall elect. (a) With or without terminating this Lease Agreement, may declare all rental payments payable hereunder to the end of the then -current Fiscal Year of Lessee to be immediately due and payable by Lessee, whereupon such rental payments shall be immediately due and payable. (b) Exercise any other remedy available, at law or in equity, with respect to such Event of Default. (c) Reenter and take possession of the Equipment wherever situated without any court order or other process of law and without liability for entering the premises and sell, lease, sublease or make other disposition of the same in a commercially reasonable manner for the account of the Lessee, and apply the proceeds of any such sale, lease, sublease, or other dispositio n, after deducting all costs and expenses, including court costs and reasonable attorneys' fees, incurred with the recovery, repair, storage and other sale, lease, sublease or other disposition costs, toward the balance due under this Lease Agreement. (d) Terminate this Lease Agreement as to all or any part of the Equipment and use, operate, lease or hold the Equipment as the Lessor in its sole discretion may decide. (e) Terminate the Escrow Fund and apply any amounts therein to the Lessee obligations hereunder. 14.3 No Remedy Exclusive. Each of the rights and remedies under this Agreement is cumulative and may be enforced separately or concurrently. No course of dealing or conduct between Lessor and Lessee shall be effective to amend, modify or change any provisions of this Agreement. No Mure or delay by Lessor to insist upon the strict performance of any term, covenant or agreement of the Agreement, or to exercise any right, power or remedy consequent upon a breach thereof, shall constitute a waiver of any such term, covenant or agreement or of any such breach, or preclude Lessor from exercising any such right, power or remedy at any later time or times. 12 1142905210 14.4 Costs and Attorneys' Fees. Upon the occurrence of an Event of Default, Lessee agrees to pay to Lessor or reimburse Lessor for, in addition to all other amounts payable hereunder, all of Lessor's costs of collection, including reasonable attorneys' fees, whether or not suit or action is filed thereon. Any such costs shall be imlrediately due and payable upon written notice and demand given to Lessee, shall be secured by this Agreement until paid, and shall bear interest at the Default Rate. In the event suit or action is instituted to enforce any of the terms of this Agreement, the prevailing parry shall be entitled to recover from the other parry such sum as the court may adjudge reasonable as attorneys' fees at trial and on appeal of such suit or action or in any bankruptcy proceeding, in addition to all other sums provided by law. ARTICLE 15 NON -APPROPRIATION 15.1 Nature of Obligations of the Lessee. (a) Except as otherwise provided in this Article 15, the obligation of the Lessee to make rental payments and all other payments provided for in this Lease Agreement and to perform its obligations under this Lease Agreement will be absolute and unconditional, and such rental payments and other amounts will be payable without any rights of set-off, recoupment or counterclaim that the Lessee might have against the Lessor or any other person and whether or not the Equipment is used by the Lessee or available for use by the Lessee. (b) While recognizing that it is not empowered to make any binding commitment beyond the current Fiscal Year of the Lessee, it is the current intention of the Lessee to make sufficient annual appropriations during the Lease Term to pay all rental payments and other amounts required to be paid by the Lessee under this Lease Agreement. Notwithstanding anything in this Lease Agreement to the contrary, the Lessee's obligation to pay the cost and expense of performing its obligations under this Lease Agreement, including without limitation its obligations to pay all rental payments and all other amounts required to be paid by the Lessee under this Lease Agreement, are subject to and dependent upon appropriations being made from time to time by the Governing Body for such purpose. The Lessee directs the Authorized Representative or other officer charged with the responsibility of preparing the Lessee's budget to include in the budget for each Fiscal Year of the Lessee during the Lease Term a request that the Governing Body appropriate in the Fiscal Year the amount of rental payments and other payments due under this Lease Agreement during such Fiscal Year. The Lessee shall notify the Lessor in writing each year during the Lease Term that such budget request has been made as soon as practicable following the submission of the Lessee's annual budget to the Governing Body. If at any time during any Fiscal Year of the Lessee, the amount appropriated in the budget of the Lessee for the Fiscal Year is insufficient to pay when due the rental payments and other amounts due under this Lease, the Lessee directs the Governing Body (or other officer charged with responsibility for preparing the Lessee's budget) to submit to the Governing Body at the next scheduled meeting of the Governing Body, or as promptly as practicable, but in any event within 45 days, a request for a supplemental appropriation sufficient to cover the deficit. 15.2 Notice of Appropriation. The Lessee shall give notice to the Lessor by no later than June 30 of each year of the amount budgeted by the Lessee and appropriated by the Governing 13 1142905210 Body for all payments required to be made by the Lessee under the Lease Agreement in the Fiscal Year comnnencing on the immediately succeeding July 1 and whether such amount is sufficient to meet all such required payments during such period. ARTICLE 16 ASSIGNMENT 16.1 Assignment By Lessee. The Lessee agrees not to sell, assign, lease, sublease, pledge or otherwise encumber or suffer a lien or encumbrance upon or against any interest in this Lease Agreement or the Equipment (except for the lien and security interest of the Lessor therein) or to remove the Equipment from its place of installation without the Lessor's prior written consent which shall not be unreasonably withheld. 16.2 Assignment By The Lessor. Lessor may assign its rights, title and interest in and to this Agreement, the Equipment or the Escrow Agreement (including the escrow fund thereunder), and/or may grant or assign a security interest in this Agreement, the Equipment or any Escrow Agreement (including the escrow fund thereunder), in whole or in part, without obtaining the consent of Lessee, but no such assignment, transfer or conveyance shall be effective as against Lessee unless and until Lessor has delivered to Lessee written notice thereof that discloses the name and address of the assignee and such assignment, transfer or conveyance shall be made only to banks, insurance companies or other financial institutions or their affiliates. LESSEE AGREES NOT TO ASSERT AGAINST ANY ASSIGNEE ANY CLAIMS, ABATEMENTS, SETOFFS, COUNTERCLAIMS, RECOUPMENT OR ANY OTHER SIMILAR DEFENSES WHICH LESSEE MAY HAVE AGAINST LESSOR. Lessee shall keep a complete and accurate record of all such assignments in the form necessary to comply with Section 149(a) of the Code. Lessee agrees to acknowledge in writing any such assignments if so requested. ARTICLE 17 NATURE OF AGREEMENT The Lessor and the Lessee agree that it is their intention that, for federal income tax purposes, the interest of the Lessor in the Equipment is as a secured party and the interest of the Lessee is as a debtor, and that the Lessor neither has nor will have any equity in the Equipment. It is the agreement of the Lessor and the Lessee that the aggregate rental payments provided for hereunder constitute the purchase price of the Equipment together with the interest on the unamortized amount thereof over the term of this Lease Agreement, that each installment of rent constitutes principal and interest, which fiully amortizes the purchase price of the Equipment, together with interest, over the term of this Lease Agreement, and that upon the due and punctual payment and performance of the rental payments and other amounts and obligations under this Lease Agreement, title to the Equipment shall vest permanently in Lessee as provided in this Lease Agreement, free and clear of any lien or security of the Lessor therein. 14 1142905210 ARTICLE 18 OPTION TO PURCHASE At the option of Lessee, and provided that no Event of Default has occurred and is continuing hereunder, Lessor's interest in all, but not less than all, of the Equipment will be transferred, conveyed and assigned to Lessee, thereby vesting title to the Equipment permanently in Lessee, and this Lease shall terminate: (a) upon payment in full of the rental payments and all other payments then due hereunder or (b) on any rental payment date hereunder, by paying to Lessor, in addition to the rental payment due on such date, an amount equal to the concluding payment (the "Concluding Payment") shown for such rental payment date in the rental payment schedule in Exhibit B. Lessee shall not have the option to purchase the Equipment hereunder as provided in the foregoing clause (b) on any rental payment date hereunder for which a Concluding Payment is not stated in the rental payment schedule. This option to purchase may be exercised by the Lessee on any Payment Date on or after [September 25, 2029] and is conditioned upon: (a) the Lessee's having performed all of the terms and conditions of the Lease Agreement between the parties other than the payment of monies not yet due and payable under this Lease Agreement; (b) the Lessee's giving written notice to the Lessor of its election to exercise the option not less than sixty (30) days prior to the date of exercise of the option by the Lessee; and of the option. (c) the Lessee's payment of the purchase price in cash at the time of the exercise ARTICLE 19 MISCELLANEOUS 19.1 Waiver. No covenant or condition of this Lease Agreement can be waived except by the written consent of the Lessor. Any failure of the Lessor to require strict performance by the Lessee or any waiver by the Lessor of any terms, covenants or agreements herein shall not be construed as a waiver of any other breach of the same or of any other term, covenant or agreement herein. 19.2 Severabi ity. In the event any portion of this Lease Agreement shall be determined to be invalid under any applicable law, such provision shall be deemed void and the remainder of this Lease Agreement shall continue in full force and effect. 19.3 Governing Law. This Lease Agreement shall be construed, interpreted and enforced in accordance with the laws of the State of California. 19.4 Notice. All notices made or required to be given pursuant to this Lease Agreement shall be in writing and shall be deemed duly served if and when mailed, certified or registered 15 1142905210 mail, postage prepaid, return receipt requested, to the other parry at its address set forth above or at such other address as such parry shall hereafter designate in writing. If to the Lessor, address to: Alliance Funding Solutions, hic. 12520 High Bluff Drive, Suite 345 San Diego, California 92130 Attention: Brad Chapman Email: [Brad@absenergy.com] If to the Lessee, address to: City of West Covina 1444 W Garvey Avenue S West Covina, California 91790 Attention: David N. Carmany Email: DCarrnany@westcovina.org City of West Covina 1444 W Garvey Avenue S West Covina, California 91790 Attention: Sandra Galvez Email: SGalvez@westcovina.org 19.5 Section Headings. All section headings contained herein are for convenience of reference only and are not intended to define or limit the scope of any provision of this Lease Agreement. 19.6 Entire Agreement. This Lease Agreement, together with any schedules hereto, constitutes the entire agreement between the parties and shall not be modified, amended, altered or changed except by written agreement signed by the parties. 19.7 Binding Effect. Subject to the specific provisions of this Lease Agreement, this Lease Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and assigns. 19.8 Further Assurances. The Lessee will promptly and duly execute and deliver to the Lessor such farther documents, instruments and assurances and take such further action as the Lessor may from time to time reasonably request in order to carry out the intent and purpose of this Lease Agreement and to establish and protect the rights and remedies created or intended to be created in favor of the Lessor hereunder. 19.9 Time. Time is of the essence of this Lease Agreement. 16 1142905210 19.10 Counterparts. This Lease Agreement, and any exhibit hereto, may be executed in one or more counterparts, each of which shall be an original and all of which together shall constitute one and the same instrument. 19.11 No Third -Party Beneficiaries. This Lease Agreement and any documents or certificates executed in connection with, or pursuant to it, are intended only for the benefit of the Lessor, the Lessee and the Escrow Agent, and no rights are intended, or shall be deemed to be, granted to any other parties thereby. 19.12 Exhibits. This Agreement includes the Exhibits attached hereto, all of which Exhibits are made a part hereof for all purposes. Lessee and Lessor agree that if any Exlubit to this Agreement contains blanks, the same shall be completed correctly and in accordance with this Agreement prior to or at the time of the execution and delivery thereof. [Remainder of page intentionally left blank signature pages follow] 17 1142905210 IN WITNESS WHEREOF, the parties hereto have caused this Lease Agreement to be executed as of the day and year first above written. LESSOR: ALLIANCE FUNDING SOLUTIONS, INC., a California corporation By: Name: Brad Chapman Title: President LESSEE: CITY OF WEST COVINA, a governmental organization By: Name: David N. Carmany Title: City Manager 18 1142905210 EXIHBIT A DESCRIPTION OF EQUIPMENT The Equipment shall mean lighting, controls, HVAC systems, transformers and building envelope to reduce the Lessee's energy consumption and installed at the following sites: 1. Cameron Park Connnunity Center, 1305 E Cameron Ave, West Covina, CA 91790; 2. City Yard, 825 S Sunset Ave, West Covina, CA 91790; 3. Civic Center, 1444 W Garvey Ave S, West Covina, CA 91790; 4. Fire Station 2, 2441 E Cortez St, West Covina, CA 91791; 5. Fire Station 3, 1433 W Puente Ave, West Covina, CA 91790; 6. Fire Station 4, 1815 S Azusa Ave, West Covina, CA 91792; 7. Palm View Center, 1340 E Puente Ave, West Covina, CA 91790; 8. Senior Center, 2501 E Cortez St, West Covina, CA 91791; 9. Shadow Oak Rec Center, 2121 Shadow Oak Dr, West Covina, CA 91792; and Shadow Oak Park, 2121 Shadow Oak Dr, West Covina, CA 91792. Exhibit A 1142905210 EXIIIBIT B EQUIPMENT SCHEDULE 1. Description of the Equipment: See Exhibit A 2. Equipment Location: See Exhibit A 3. Rental Payment Schedule: The rental payments shall be made for the Equipment as follows: See attached Schedule 1 to this Exhibit B. 4. Interest Rate: 3.05% 5. Commencement Date: March 25, 2021 6. Scheduled Lease Term Fifteen (15) years 7. Lessee's current Fiscal Year extends from July 1, 2020 8. The terms and provisions of the Equipment Lease -Purchase Agreement described above are hereby incorporated into this Schedule by reference and made a part hereof. 9. Lessee hereby represents, warrants, and covenants that (i) its representations, warranties, and covenants set forth in the Equipment Lease -Purchase Agreement are true and correct as though made on the date of execution of this Schedule, and (ii) sufficient funds have been appropriated by Lessee for the payment of all rental payments due under this Schedule during Lessee's current Fiscal Year. 10. Interest, if any, accruing from the Commencement Date to the actual date of funding shall be retained by Lessor as additional consideration for entering into this Schedule. CITY OF WEST COVINA, as Lessee By: Name: David N. Carmany Title: City Manager ALLIANCE FUNDING SOLUTIONS, as Lessor By: Name: Brad Chapman Title: President Exhibit B 1142905210 SCHEDULE 1 TO EIRIIBIT B [INSERT RENTAL PAYMENT SCHEDULE] Exlnbit B 1142905210 EXIIIBIT C NOTICE AND ACKNOWLEDGEMENT OF SALE OF RENTAL PAYMENTS AND ASSIGNMENT OF LEASE AGREEMENT AND ESCROW AGREEMENT Alliance Funding Solutions, Inc. ("Lessor') and the City of West Covina ("Lessee')have entered into that certain Equipment Lease -Purchase Agreement dated [March _, 2021] (the "Lease Agreement'). Lessee hereby acknowledges that, pursuant to the terms of the Lease Agreement, Lessor has assigned its right, title, and interest in and to the Lease Agreement and, the Equipment to Truist Bank, a North Carolina Banking corporation ("Assignee'). Lessee is hereby directed to pay any and all rental payments and other amounts due under the Lease Agreement to Assignee, as directed by Assignee. Lessee will also direct any and all correspondence, notice and servicing requests to the Assignee at the following address: Truist Bank 5130 Parkway Plaza Blvd Charlotte, North Carolina 28217 Attention: Roxanne Crouch By signing this Notice and Acknowledgment, Lessee agrees that it will pay all amounts due under the Lease Agreement without any set-off notwithstanding any defect in, damage to or requisition of any of the Equipment leased under the Lease Agreement, any other similar or dissimilar event, any defense, set-off, counterclaim or recoupment arising out of any claim against Lessor or Assignee. By signing this Notice and Acknowledgment, Lessee warrants that its representations and warranties under the Lease Agreement are true and correct on the date hereof. Date: [March _, 2021] THE CITY OF WEST COVINA, as Lessee Name: David N. Carmany Title: City Manager Exhibit C 1142905210 EX WIT D-1 INSURANCE CERTIFICATION Alliance Funding Solutions, Inc. 12520 High Bluff Drive, Suite 345 San Diego, California 92130 [March _, 2021] Re: Equipment Lease -Purchase Agreement dated [March _, 2021] (the "Lease Agreement") In connection with the above referenced Lease Agreement, the City of West Covina, as lessee (the "Lessee') certifies that it has instructed the insurance agent named below: Name of Agent: f ] Address: f ] Phone: f ] to issue the following insurance coverages: Liability Insurance. Lessee is required to maintain public liability insurance, personal injury and property damage with policy limits of $3,000,000. The policy should be endorsed to name Truist Bank (the Additional Insured') as an additional insured. 2. Casualty Insurance. Lessee is required to maintain all risk extended coverage, malicious mischief and vandalism insurance for the Equipment described in the above -referenced Equipment Schedule in an amount not less than the greater of $3,125,098.00 or the firll replacement cost of the Equipment. Such insurance shall be endorsed to name each of the Additional Insured and their successors and or assigns as a co -loss payee with respect to such Equipment. The required insurance should also be endorsed to give the Additional Insured at least 30 days' prior written notice of the effective date of any material alteration or cancellation of coverage, and an endorsement confirming that the interest of the Additional Insured shall not be invalidated by any actions, inactions, breach of warranty or conditions or negligence of Lessee. Exhibit D-1 1142905210 Proof of insurance coverage will be provided to the Additional Insured prior to and/or commensurate with the later of the Conmrncement Date of the Lease or the delivery and acceptance of the Equipment. Very truly yours, CITY OF WEST COVINA, as Lessee Name: David N. Carmany Title: City Manager Exlflbit D-1 1142905210 EX WIT D-2 INTENTIONALLY OMITTED F_) ibit D-2 1142905210 EXHIBIT E ESSENTIAL USE CERTIFICATE' Alliance Funding Solutions, Inc. 12520 High Bluff Drive, Suite 345 San Diego, California 92130 [March _, 2021] Re: Equipment Lease -Purchase Agreement dated [March _, 2021] 1. What is the specific use of the Equipment? 2. What increased capabilities will the Equipment provide? 3. Why is the Equipment essential to your ability to deliver governmental services? 4. Does the Equipment replace existing equipment? (If so, please explain why you are replacing the existing equipment) 5. Why did you choose this specific Equipment? 6. For how many years do you expect to utilize the Equipment? Very truly yours, CITY OF WEST COVINA, as Lessee By: 1 Lessee to complete and return prior to Closing Date Name: David N. Carmany Title: City Manager Exhibit E 1142905210 EXHIBIT F INCUMBENCY CERTIFICATE I, Lisa Sherrick, do hereby certify that I am the Assistant City Clerk of the City of West Covina ("Lessee'), which is a government organization duly established and validly existing as a government organization in the State of California. I hereby certify that, as of the date hereof, the individuals named below are the duly elected or appointed officers of the Lessee holding the offices set forth opposite their respective names. I further certify that: (i) The signatures set opposite their respective names and titles are their true and authentic signatures, and (ii) Such officers have the authority on behalf of such entity to: a. Enter into that certain Equipment Lease -Purchase Agreement dated [March 2021] (the "Lease Agreement'), between Lessee and Alliance Funding Solutions, Inc., as lessor, and that certain Escrow Agreement dated as of [March _, 2021] (the "Escrow Agreement') between Lessee, Alliance Funding Solutions, Inc., and Santa Cruz County Bank, as escrow agent; and b. Execute certificate, documents, and agreements relating to the Lease Agreement and Escrow Agreement on behalf of Lessee. NAME TITLE SIGNATURE David N. Cannany City Manager IN WITNESS WHEREOF, I have duly executed this Certificate on behalf of the Lessee. Name: Lisa Sherrick Title: Assistant City Clerk Exhibit F 1142905210 EXHIBIT G [Print on Counsel Letterhead] OPINION OF LESSEE'S COUNSEL2 Alliance Funding Solutions, Inc. 12520 High Bluff Drive, Suite 345 San Diego, California 92130 Re: That certain Equipment Lease -Purchase Agreement dated [ ] Ladies and Gentlemen: As counsel to the [ ] (the "Lessee'), I have examined that certain Equipment Lease -Purchase Agreement dated as of [March , 2021] (the "Lease Agreement'), between the Lessee and Alliance Funding Solutions, hic., as lessor CLessor), the form of the Escrow Agreement, together with the Disbursement Request Form and Certificate of Acceptance (collectively, the "Escrow Agreement'), and the proceedings taken by the Governing Body of the Lessee to authorize on behalf of the Lessee the execution and delivery of the Lease Agreement and the Escrow Agreement. The Lease Agreement and the Escrow Agreement are herein collectively referred to as the `Transaction Documents." Based upon the foregoing examination and upon an examination of such other documents and matters of law as we have deemed necessary or appropriate, we are of the opinion that: 1. The Lessee is a political subdivision of the State of California with the full power and authority to enter into the Transaction Documents. 2. The Transaction Documents have each been duly authorized, executed, and delivered by the Lessee. Assuming due authorization, execution and delivery thereof by Lessor, the Transaction Documents constitute legal, valid, and binding obligations of the Lessee, enforceable against the Lessee in accordance with their respective terms, subject to any applicable bankruptcy, insolvency, moratorium or other laws or equitable principles affecting the enforcement ofcreditors' rights generally. 3. The Lessee has complied with any applicable public bidding requirements in connection with the Transaction Documents and the transactions contemplated thereby. By proper action, the Governing Body of the Lessee authorized the execution and delivery of the Transaction Documents and certain other matters, which actions were duly taken at a meeting that was held in 2Lessee's counsel to complete and return prior to Closing Date Exhibit G 1142905210 compliance with all applicable laws relating to the holding of open and public meetings 5. No litigation or proceeding is pending or, to the best of my knowledge, threatened to restrain or enjoin the execution and delivery of or performance by the Lessee under the Transaction Documents or in any way to contest the validity of the Transaction Documents, to contest or question the creation or existence of the Lessee or the Governing Body of the Lessee or the authority or ability of the Lessee to execute or deliver the Transaction Documents or to comply with or perform its obligations thereunder. There is no litigation pending or, to the best of my knowledge, threatened seeking to restrain or enjoin the Lessee from annually appropriating sufficient funds to pay the rental payments or other amounts contemplated by the Lease Agreement. 6. The entering into and performance of the Transaction Documents do not and will not violate any judgment, order, law, or regulation applicable to the Lessee or result in any breach of, or constitute a default under, or result in the creation of any lien, charge, security interest, or other encumbrance upon any assets of the Lessee or on the Equipment (as such term is defined in the Lease Agreement) pursuant to any indenture, mortgage, deed of trust, bank loan or credit agreement, or other instrument to which the Lessee is a parry or by which it or its assets may be bound. Notwithstanding the foregoing, upon the due and timely Sling of a financing statement in the form delivered at closing, the Lessor will have a perfected security interest in the Equipment. This opinion may be relied upon by Lessor and purchasers and assignees of Lessor's interests in the Lease Agreement. Respectfully submitted, Exhibit G 1142905210 E MIT H TAX OPINION OF LESSEE'S COUNSELS 3 Lessee's tax counselto provide draft for review. Ex1nbk I 1142905210 EXIMIT I BANK QUALIFIED CERTIFICATE City of West Covina, as lessee, (the "Lessee') under that certain Equipment Lease - Purchase Agreement (the "Lease') dated as of [March _, 2021] to which this Designation is attached, hereby designates the Lease as a "qualified tax-exempt obligation" for the purposes and within the meaning of Section 265(b)(3) of the Internal Revenue Code of 1986, as amended. The Lessee hereby represents that the Lessee is a "qualified small issuer" in that it reasonably anticipates that the Lessee and other entities that the Lessee controls will not issue tax-exempt obligations (including the Lease) the aggregate principal amount of which exceed $10,000,000 during the calendar year in which the Lease is executed and delivered and interest commences to accrue thereunder; and that the Lease is being entered into and will be used in connection with public purposes. This Designation is attached to and made a part of the Lease and inures to the benefit of the Lessor and its successors and/or assigned. EXECUTED as of this _ day of March, 2021. CITY OF WEST COVINA, as Lessee Name: David N. Carmany Title: City Manager Exhibit I 1142905210 EXHIBIT J TAX CERTIFICATE AND AGREEMENT including POST -ISSUANCE TAX COMPLIANCE PROCEDURES Dated: [ ] The following certificate is delivered in connection with the execution and delivery of the Equipment Lease -Purchase Agreement dated [March _, 2021] (the 'Lease Agreement"), entered into between the City of West Covina (the 'Lessee') and Alliance Funding Solutions, Inc. (the "Corporation"). Capitalized terms used herein have the meanings defined in the Lease Agreement. Section 1. In General. 1.1. This Certificate is executed for the purpose of establishing the reasonable expectations of Lessee as to future events regarding the financing of certain equipment (the "Equipment") to be acquired by Lessor and leased to Lessee pursuant to and in accordance with the Equipment Schedule executed under the Agreement (together with all related documents executed pursuant thereto and contemporaneously herewith, the "Financing Documents"). As described in the Financing Documents, Lessor shall apply $3,125,098.00 (the "Principal Amount") toward the acquisition of the Equipment and closing costs, and Lessee shall make Rental Payments under the terms and conditions as set forth in the Financing Documents. 1.2. The individual executing this Certificate on behalf of Lessee is an officer of Lessee delegated with the responsibility of reviewing and executing the Financing Documents, pursuant to the Governing Body's approval or other official action of Lessee adopted with respect to the Financing Documents, a copy of which has been delivered to Lessor. 1.3. The Financing Documents are being entered into for the purpose of providing funds for financing the cost of acquiring, equipping and installing the Equipment which is essential to the governmental functions of Lessee, which Equipment is described in the Equipment Schedule. The Principal Amount will be deposited in escrow by Lessor on the date of issuance of the Financing Documents and held by Santa Cruz County Bank, as escrow agent (the "Escrow Agent") pending acquisition of the Equipment under the terms of that certain Escrow Agreement dated as of [March _, 2021] (the "Escrow Agreement'), by and between Lessor, Lessee and Escrow Agent. 1.4. Lessee wit timely file for each payment schedule issued under the Lease a Form 8038-G (or, if the invoice price of the Equipment under such schedule is less than $100,000, a Form 8038-GC) relating to such Lease with the Internal Revenue Service in accordance with Section 149(e) of the Internal Revenue Code of 1986, as amended (the "Code'). 1.5. Intentionally Omitted. Exhibit J 1142905210 Section 2. Non -Arbitrage Certifications. 2.1. The Rental Payments due under the Financing Documents will be made with monies retained in Lessee's general operating fund (or an account or subaccount therein). No sinking, debt service, reserve or similar fund or account will be created or maintained for the payment of the Rental Payments due under the Financing Documents or pledged as security therefor. 2.2. There have been and will be issued no obligations by or on behalf of Lessee that would be deemed to be (i) issued or sold within fifteen (15) days before or after the date of issuance of the Financing Documents, (ii) issued or sold pursuant to a common plan of financing with the Financing Documents and (it) paid out of substantially the same source of funds as, or deemed to have substantially the same claim to be paid out of substantially the same source of funds as, the Financing Documents. 2.3. Lessee does not and will not have on hand any funds that are or will be restricted, segregated, legally required or otherwise intended to be used, directly or indirectly, as a substitute, replacement or separate source of financing for the Equipment. 2.4. No portion of the Principal Amount is being used by Lessee to acquire investments which produce a yield materially higher than the yield realized by Lessor from Rental Payments received under the Financing Documents. 2.5. The Principal Amount does not exceed the amount necessary for the governmental purpose for which the Financing Documents were entered into. Such funds are expected to be needed and fully expended for payment of the costs of acquiring, equipping and installing the Equipment. 2.6. Lessee does not expect to convey, sublease or otherwise dispose of the Equipment, in whole or in part, at a date which is earlier than the final Payment Date under the Financing Documents. Section 3. Disbursement of Funds; Reimbursement to Lessee. 3.1 It is contemplated that the entire Principal Amount will be used to pay the acquisition cost of Equipment to the vendors or manufacturers thereof or for any financial advisory or closing costs, provided that, if applicable, a portion of the principal amount may be paid to Lessee as reimbursement for acquisition cost payments already made by it so long as the conditions set forth in Section 3.2 below are satisfied. 3.2. Lessee shall not request that it be reimbursed for Equipment acquisition cost payments already made by it unless each of the following conditions have been satisfied: (a) If applicable, Lessee adopted aresohltion or otherwise declared its official intent in accordance with Treasury Regulation § 1.150 2 (a copy of which will be provided to Lessor, if applicable, the 'Declaration of Official hntent ), wherein Lessee expressed its intent to be reimbursed from the proceeds of a borrowing for all or a portion of the cost of the Equipment, which expenditure was paid to the Vendor (as defined in the Lease Exhibit J 1142905210 Agreement) not earlier than sixty (60) days before Lessee adopted the Declaration of Official Intent; (b) The reimbursement being requested will be made by a written allocation before the later of eighteen (18) months after the expenditure was paid or eighteen (18) months after the items of Equipment to which such payment relates were placed in service; (c) The entire payment with respect to which reimbursement is being sought is a capital expenditure, being a cost of a type properly chargeable to a capital account under general federal income tax principles; and (d) Lessee will use any reimbursement payment for general operating expenses and not in a manner which could be construed as an artifice or device under Treasury Regulation § 1.148-10 to avoid, in whole or in part, arbitrage yield restrictions or arbitrage rebate requirements. Section 4. Use and Investment of Funds; Temporary Period. 4.1. Lessee has incurred or will incur, within six (6) months from the date of issuance of the Financing Documents, binding obligations to pay an amount equal to at least five percent (5%) of the Principal Amount toward the costs of the Equipment. An obligation is not binding if it is subject to contingencies within Lessee's control. The ordering and acceptance of the items of Equipment will proceed with due diligence to the date of final acceptance of the Equipment. 4.2. An amount equal to at least eighty-five percent (85%) of the Principal Amount will be expended to pay the cost of the Equipment by the end of the three-year period commencing on the date of this Certificate. No portion of the Principal Amount will be used to acquire investments that do not carry out the governmental purpose of the Financing Documents and that have a substantially guaranteed yield of four (4) years or more. 4.3. The reasonably expected economic lives of the components of the Equipment and the amount of the Principal Amount expected to be spent (cost) on each component are as follows: Component Expected Economic Life Cost The weighted average maturity of principal components of the rental payments payable under the Lease Agreement is [] years. 4.4. (a) Lessee covenants and agrees that it will rebate an amount equal to excess earnings on the Principal Amount deposited under the Escrow Agreement to the Internal Revenue Service if required by, and in accordance with, Section 148(4) of the Code, and make the annual determinations and maintain the records required by and otherwise comply with the regulations applicable thereto. Lessee reasonably expects to cause the Equipment to be acquired by r ]. Exhibit J 1142905210 (b) Lessee will provide evidence to Lessor that the rebate amount has been calculated and paid to the Internal Revenue Service in accordance with Section 148(4) of the Code unless either: (i) Six -Month or Eighteen -Month Expenditure Exception Met: The entire Principal Amount and earnings thereon are expended on the Equipment by the date that is the six-month anniversary of the issuance of the Financing Documents or (it) the Principal Amount and earnings thereon are expended on the Equipment in accordance with the following schedule: At least fifteen percent (15%) of the Principal Amount and interest earnings thereon is applied to the cost of the Equipment within six months from the date of issuance of the Financing Documents; at least sixty percent (60%) of the Principal Amount and interest earnings thereon is applied to the cost of the Equipment within 12 months from the date of issuance of the Financing Documents; and one hundred percent (100%) of the Principal Amount and interest earnings thereon is applied to the cost of the Equipment prior to eighteen (18) months from the date of issuance of the Financing Documents; or (it) Small Issuer Exception: (A) Lessee is a governmental unit with general taxing powers; (B) the Lease is not a "private activity bond" under Section 141 ofthe Code; (C) at least ninety-five percent (95%) of the Principal Amount is used for the governmental activities of Lessee; and (D) the aggregate principal amount of all tax-exempt obligations (including the Lease) issued by Lessee and its subordinate entities, if any, during the current calendar year is not reasonably expected to exceed $5,000,000. Section 5. Escrow Account. The Financing Documents provide that the monies deposited in escrow shall be invested until payments to the vendor(s) or manufacturer(s) of the Equipment are due. Lessee will ensure that such investment will not result in Lessee's obligations under the Financing Documents being treated as an "arbitrage bond" within the meaning of Section 148(a) of the Internal Revenue Code of 1986, as amended (the "Code'), respectively. Any monies which are earned from the investment of these funds shall be labeled as interest earned. All such monies will be disbursed on or promptly after the date that Lessee accepts the Equipment. Lessee acknowledges that the provisions of Sections 2 and 4 herein are particularly applicable when the Principal Amount is funded into an Escrow Fund subject to the Escrow Agreement. Section 6. No Private Use; No Private Loan. 6.1. Lessee will not exceed the private use restrictions set forth in Section 141 of the Code. Specifically, Lessee will not permit more than 10% of the Principal Amount to be used for a Private Business Use (as defined herein) if, in addition, the payment of more than ten percent (10%) of the Principal Amount plus interest earned thereon is, directly or indirectly, secured by (i) any interest in property used or to be used for a Private Business Use or (ii) any interest in payments in respect of such property or derived from any payment in respect of property or borrowed money used or to be used for a Private Business Use. E'xlubit J 1142905210 6.2 In addition, if both (A) more than five percent (5%) of the Principal Amount is used as described above with respect to Private Business Use and (B) more than five percent (5%) of the Principal Amount plus interest earned thereon is secured by Private Business Use property or payments as described above, then the excess over such five percent (5%) (the "Excess Private Use Portion) will be used for a Private Business Use related to the governmental use of the Equipment. Any such Excess Private Use Portion of the Principal Amount will not exceed the portion of the Principal Amount used for the governmental use of the particular project to which such Excess Private Use Portion is related. For purposes oftivs paragraph 6.2, "Private Business Use" means use of bond proceeds or bond financed -property directly or indirectly in a trade or business carried on by a natural person or in any activity carried on by a person other than a natural person, excluding, however, use by a state or local governmental unit and excluding use as a member of the general public. 6.3. No part of the Principal Amount or interest earned thereon will be used, directly or indirectly, to make or finance any loans to non -governmental entities or to any governmental agencies other than Lessee. Section 7. No Federal Guarantee. 7.1. Payment of the principal or interest due under the Financing Documents is not directly or indirectly guaranteed, in whole or in part, by the United States or an agency or instrumentality thereof. 7.2. No portion of the Principal Amount or interest earned thereon shall be (i) used in making loans the payment of principal or interest of which are to be guaranteed, in whole or in part, by the United States or any agency or instrumentality thereof, or (ii) invested, directly or indirectly, in federally insured deposits or accounts if such investment would cause the financing under the Financing Documents to be "federally guaranteed" within the meaning of Section 149(b) of the Code. Section 8. Miscellaneous. 8.1. Lessee shall keep a complete and accurate record of all owners or assignees of the Financing Documents in form and substance satisfactory to comply with the registration requirements of Section 149(a) of the Code unless Lessor or its assignee agrees to act as Lessee's agent for such purpose. 8.2. Lessee shall maintain complete and accurate records establishing the expenditure of the Principal Amount and interest earnings thereon for a period of three (3) years after payment in full under the Financing Documents. 8.3. To the best of the undersigned's knowledge, information and belies; the above expectations are reasonable and there are no other facts, estimates or circumstances that would materially change the expectations expressed herein. 8.4. The Lessee's Tax Identification Number is: 95-6000810. Exhibit J 1142905210 IN WITNESS WHEREOF, this Tax Certificate and Agreement, including Post -Issuance Tax Compliance Procedures, has been executed on behalf of Lessee as of [March _, 2021]. CITY OF WEST COVINA By Name: David N. Cannany Title: City Manager Exhibit J 1142905210 EXHIBIT K ESCROW AGREEMENT LESSOR: ESCROW AGENT: Alliance Funding Solutions, Inc. Santa Cruz County Bank 12520 High Bluff Drive, Suite 345 75 River Street San Diego, Caldomia 92130 Santa Cruz, Calffornia 95060 LESSEE: City of West Covina 1444 W Garvey Avenue S West Covina, California, 91790 Attention: David N. Calmany and Sandra Galvez THIS ESCROW AGREEMENT (this `Escrow Agreement') is made as of [March _, 2021], between Alliance Funding Solutions, Inc. CLessor), the City of West Covina ("Lessee"), and Santa Cruz County Bank (the "Escrow Agent). Lessor and Lessee have heretofore entered into that certain Equipment Lease -Purchase Agreement and Equipment Schedule both dated [March _, 2021] (the "Lease Agreement"). The Lease Agreement contemplates that Lessor will deposit with the Escrow Agent the amount of $3,125,098.00 (the "Deposit Amount"), for deposit into the escrow fund (the "Escrow Fund'), to be held in escrow by the Escrow Agent and applied on the express terms and conditions set forth herein. Such deposit into the Escrow Fund, together with all interest and additions received with respect thereto, is to be applied from time to time to pay the vendor(s) or manufacturer(s) of the Equipment (as defined in the Lease Agreement) its invoice cost (a portion of which may, if required, be paid prior to final acceptance of the Equipment by Lessee). The Escrow Fund is to be held for the account and benefit of Lessee, and Lessee has granted to Lessor a first priority and perfected lien on and security interest in the Escrow Fund and any all proceeds, interest and other earnings thereon and investments therein to the Lessor by virtue of the execution of this Escrow Agreement and the Lease Agreement without the need for any additional filings or financing statements. The parties desire to set forth the terms on which the escrow is to be created and to establish the rights and responsibilities of the parties hereto. NOW, THEREFORE, the parties agree as follows: 1. The Escrow Agent hereby agrees to serve as escrow agent upon the terms and conditions set forth herein. 2. There is hereby created a special account to be known as the "City of West Covina Escrow Fund" (the `Escrow Fund') to be held in trust by the Escrow Agent for the purposes stated Exhibit K 1142905210 herein, for the benefit of Lessor and Lessee, to be held, disbursed and returned in accordance with the terms hereof. The Escrow Agent agrees that the Escrow Fund shall be held irrevocably in trust for the account and benefit of Lessee and all interest earned with respect to the Escrow Fund shall accrue to the benefit of Lessee and shall be applied as expressly set forth herein. To the limited extent required to perfect the first, priority security interest granted by Lessee to Lessor in the cash and negotiable instruments from time to time held in the Escrow Fund, Lessor hereby appoints the Escrow Agent as its security agent, and the Escrow Agent hereby accepts the appointment as security agent, and agrees to hold physical possession of such cash and negotiable instruments on behalf of Lessor. 3. On the Commencement Date (as defined in the Lease Agreement), Lessor shall deposit with the Escrow Agent the amount of the Deposit Amount to be held by the Escrow Agent on the express terms and conditions set forth herein. The Escrow Agent agrees to accept the deposit of the Deposit Amount by Lessor with the Escrow Agent, and fiuther agrees to hold the amount so deposited together with all interest and other additions received with respect thereto in escrow on the express terms and conditions set forth herein. 4. The Escrow Agent shall at all times segregate the Escrow Fund into an account maintained for that express purpose, which shall be clearly identified on the books and records of the Escrow Agent as being held in its capacity as Escrow Agent. Securities and other negotiable instruments held in the Escrow Fund from tiller to time shall be held or registered in the name of the Escrow Agent (or its nominee). The Escrow Fund shall not, to the extent permitted by applicable law, be subject to levy or attachment or lien by or for the benefit of any creditor of any of the parties hereto (except with respect to the security interest therein held by Lessor). 4. Lessee hereby directs the Escrow Agent to invest the cash held in the Escrow Fund from tune to time in a Santa Cruz County Bank non -interest bearing demand deposit account with no fees or costs or, in the event such fiend is not at the time available, such other investments as Lessee may specify in writing, to the extent the same are at the firm legal for investment of the funds being invested. Interest or other amounts earned and received by the Escrow Agent with respect to the Escrow Fund shall be deposited in and become a part of the Escrow Fund. No investment shall be made that would cause the Lease Agreement to be deemed to be an arbitrage bond within the meaning of Section 148(a) of the Internal Revenue Code of 1986, as amended. 5. Lessor and Lessee hereby authorize the Escrow Agent to take the following actions with respect to the Escrow Fund: a. From time to time, the Escrow Agent shall pay the vendor or manufacturer of the Equipment payments then due and payable, or reimburse Lessee for amounts that it has paid to the vendor or manufacturer of the Equipment, upon receipt of the following: (a) a duly executed Certificate of Acceptance and Payment Request in the form attached as Exhibit A hereto executed by the Lessor and Lessee, (b) the vendor(s) or manufacturer(s) invoice(s) specifying the acquisition price of the Exhibit K 1142905210 Equipment described in the requisition request, and (c) any additional documentation required by Lessor. b. If Lessor provides to the Escrow Agent written notice of the occurrence of an Event of Default or an Event of Nonappropriation by Lessee under the Lease Agreement, the Escrow Agent shall thereupon promptly remit to Lessor the entire balance of the Escrow Fund. C. Upon receipt by the Escrow Agent of a duly executed Certificate of Acceptance and Payment Request identified as the final such request, the Escrow Agent shall transfer the then remaining balance of the Escrow Fund to Lessee, upon the express condition that Lessee hereby agrees to use such excess amount solely for capital expenditures as shall be approved by Lessor or, at the written direction of Lessor, for application against the interest component of the Lessee's payment obligation under the Lease Agreement, as provided therein, unless otherwise agreed by Lessor. 6. The Escrow Agent shall have no liability for acting upon any written instruction presented by Lessee and Lessor in connection with this Escrow Agreement that the Escrow Agent in good faith believes to be genuine. Furthermore, the Escrow Agent shall not be liable for any act or omission in connection with this Escrow Agreement except for its own gross negligence, willful misconduct, or bad faith. The Escrow Agent shall not be liable for any loss or diminution in value of the Escrow Find as a result of the investments made pursuant to Section 4. 7. To the extent authorized by law, Lessee hereby agrees to indemnify and save the Escrow Agent harmless against any liabilities that it may incur in the exercise and performance of its powers and duties hereunder and that are not due to the Escrow Agent's gross negligence or willful misconduct. No indemnification will be made under this Section or elsewhere in this Escrow Agreement for damages arising solely out of gross negligence, willful misconduct, or bad faith by the Escrow Agent, its officers, agents, employees, successors or assigns. 8. The Escrow Agent may at any time resign by giving at least 30 days' prior written notice to Lessee and Lessor, but such resignation shall not take effect until the appointment of the successor Escrow Agent. The substitution of another bank or trust company to act as Escrow Agent under this Escrow Agreement may occur by written agreement of Lessor and Lessee. In addition, the Escrow Agent may be removed at any time, with or without cause, by instrument in writing executed by Lessor and Lessee. Such notice shall set forth the effective date of the removal In the event of any resignation or removal of the Escrow Agent, a successor Escrow Agent shall be appointed by an instrument in writing executed by Lessor and Lessee. Such successor Escrow Agent shall indicate its acceptance of such appointment by an instrument in writing delivered to Lessor, Lessee and the predecessor Escrow Agent. Upon the effective date of resignation or removal, the Escrow Agent wu'fi transfer the Escrow Fund then held by it to the successor Escrow Agent selected by Lessor and Lessee. Exhibit K 1142905210 9. This Escrow Agreement shall terminate upon receipt by the Escrow Agent of the written notice from Lessor specified in Section 5(b) or Section 5(c) hereof. 10. All notices hereunder shall be in writing, sent by certified mail, return receipt requested, or by mutually recognized overnight carrier addressed to the other party at its respective address shown on page 1 of this Escrow Agreement or at such other address as such party shall from trc1e to trc1e designate in writing to the other parties; and shall be effective on the date or receipt. 11. This Escrow Agreement shall inure to the benefit of and shall be binding upon the parties hereto and their respective successors and assigns. No rights or obligations of the Escrow Agent under this Escrow Agreement may be assigned without the prior written consent of Lessor and Lessee. 12. This Escrow Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter hereof, and no waiver, consent, modification, or change of terms hereof shall bind any parry unless in writing signed by all parties. 13. The Escrow Agent may employ agents, attorneys and accountants in connection with its duties hereunder and shall not be liable for any action taken or omitted in good faith in accordance with the advice of counsel, accountants, or other skilled persons. 14. This Escrow Agreement shall be governed by and be construed and interpreted in accordance with the internal laws of the State of California. [Remainder of page intentionally left blank] Exlvbit K 1142905210 IN WITNESS WHEREOF, the parties hereto have caused this Escrow Agreement to be duly executed as of the day and year first above set forth. LESSOR: ALLIANCE FUNDING SOLUTIONS, LESSEE. CITY OF WEST COVINA INC. BY: BY: Name: Brad Chapman Name: David N. Cannany Title: President Title: City Manager ESCROW AGENT. SANTA CRUZ COUNTY BANK By: Name: Chris Van Zanen Title: AVP Relationship Manager Exhibit K 1142905210 EXHIBIT A TO ESCROW AGREEMENT CERTIFICATE OF ACCEPTANCE AND PAYMENT REQUEST The following payment request is directed to Santa Cruz County Bank (the "Escrow Agent'), as escrow agent under that certain Escrow Agreement dated [March _, 2021] (the "Escrow Agreement"), between the City of West Covina ("Lessee'), Alliance Funding Solutions, Inc. (`'Lessor'), and the Escrow Agent. The Escrow Agent is hereby requested to pay from the Escrow Fund established and maintained under the Escrow Agreement the amount set forth below to the named payee(s). The amount shown is due and payable under a purchase order or contract (or has been paid by and not previously reimbursed to Lessee). The equipment described below is part or all of the Equipment leased pursuant to that certain Equipment Lease -Purchase Agreement dated [March _, 2021] (the `Lease Agreement'), between Lessor and Lessee: DESCRIPTION OF UNITS OF QUANTITY EQUIPMENT AMOUNT PAYEE [-1 [ ] [ ] [ ] Lessee hereby certifies and represents to and agrees with Lessor as follows with respect to the Equipment described above: (1) the Equipment has been delivered to the location(s) set forth in the Lease Agreement; (ii) a present need exists for the Equipment, which need is not temporary or expected to diminish in the near future; (in) the Equipment is essential to and will be used by Lessee only for the purpose of performing one or more governmental functions of Lessee consistent with the permissible scope of Lessee's authority; (iv) the estimated useful life of the Equipment based upon the manu6cturer's representations and Lessee's projected needs is not less than the term of the Lease Agreement; (v) Lessee has conducted such inspection and/or testing of the Equipment as it deems necessary and appropriate and hereby acknowledges that it accepts the Equipment for all purposes as of the date of this Certificate; (vi) the Equipment is covered by insurance in the types and amounts required by the Lease Agreement; (vn) no Event of Default or Event of Nonappropriation, as those terms are defined in the Lease Agreement, and no event that with the giving of notice or lapse of time or both, would become an Event of Default or an Event of Nonappropriation, has occurred and is continuing on the date hereof; and (viii) sufficient fiords have been appropriated by Lessee for the payment of all rental payments due under the Lease Agreement during Lessee's current Fiscal Year. Based on the foregoing, the Escrow Agent is hereby authorized and directed to fund the acquisition of the Equipment set forth above by paying, or causing to be paid, the manufacturer(s)/vendor(s) the amounts set forth on the attached invoices from the Escrow Fund held under the Escrow Agreement in accordance with its terms. The following documents are attached hereto and made a part hereof. (a) Original CERTIFICATE OF ACCEPTANCE AND PAYMENT REQUEST 1142905210 Invoice(s) and (b) Copies of Certificate(s) of Ownership, designating Lessor as legal owner, and evidence of filing. [Remainder of page intentionally left blank] CERTIFICATE OF ACCEPTANCE AND PAYMENT REQUEST 1142905210 IF REQUEST IS FINAL REQUEST, CHECK HERE [1. The undersigned hereby certifies that the items of Equipment described above, together with the items of Equipment described in and accepted by Certificates of Acceptance and Payment Requests previously filed by Lessee with Lessor constitute all of the Equipment subject to the Lease Agreement. Date: Approved: ALLIANCE FUNDING SOLUTIONS, INC., CITY OF WEST COVINA, as Lessee as Lessor By: By: Name: Brad Chapman Name: David N. Carmany Title: President Title: City Manager CERTIFICATE OF ACCEPTANCE AND PAYMENT REQUEST 1142905210 SCHEDULE A TO ESCROW AGREEMENT NOTICE AND ACKNOWLEDGEMENT OF ASSIGNMENT OF ESCROW AGREEMENT Alliance Funding Solutions, Inc. ('Lessor'), City of West Covina ('Lessee'), and Santa Cruz County Bank ('Escrow Agent') have entered into an Escrow Agreement dated [March _, 2021] (the 'Escrow Agreement'), pursuant to which Lessor, or its Assignee (as defined below), has deposited cash into the Escrow Fund established thereunder, which funds are to be used by Lessee to acquire certain Equipment. Escrow Agent is hereby notified that Lessor has assigned all of its right, title, and interest in and to, but not its obligations under, the Escrow Agreement to Truist Bank ("Assignee"), including, in particular, but without limitation, Lessor's security interest in the Escrow Fund and Lessor's right to approve all payment requests submitted by Lessee. Date: [March _, 2021 ] LESSOR: ALLIANCE FUNDING SOLUTIONS, INC. LESSEE: CITY OF WEST COVINA By: By: Name: Brad Chapman Name: David N. Carmany Title: President Title: City Manager ESCROW AGENT:SANTA CRUZ COUNTY BANK By: Name: Chris Van Zanen Title: AVP Relationship Manager 1142905210 EXHIBIT L CITY COUNCIL MEETING MINUTES FROM MEETING HELD ON [ 1, 2021 1142905210 EXHIBIT M IRS FORM 8038-G 1142905210 E MIT N CLOSING MEMORANDUM $3,125,098.00 LEASE FOR ENERGY CONSERVATION EQUIPMENT PURSUANT TO THAT EQUIPMENT LEAS&PURCHASE AGREEIEINT AND EQUIPMENT SCHEDULE THERETO BOTH DATED [MARCH, 2021] BETWEEN CITY OF WEST COVINA, AS LESSEE, AND ALLIANCE FUNDING SOLUTIONS, INC., AS LESSOR Pre -Closing: Pre -Closing w171 be held at the Lessee's convenience, on or before [March _, 2021]. All documents will be executed and two originals will be ovemighted to Alliance Funding Solutions, Inc., Attn.: Brad Chapman12520 High Bluff Drive, Suite 345, San Diego, California 92130, for delivery no later than 9:00 am on the morning of [March _, 2021] and held in trust until such time as the wires and original documents are released by the Parties. Closing: (1) By wire transfer and pending receipt of original, executed Lease Documents, on the morning of [March _, 2021], the Escrow Agent is authorized by Lessee to transfer via internal credit the Total Equipment Cost (as set forth below) to Escrow Agent, pursuant to a general ledger credit to the Escrow Account as follows: Bank Name: [ ] ABA No: [ ] Account No [ ] Account Name: [ ] By wire transfer and pending receipt of original, executed Lease Documents, on the morning of [March _, 20211, the Escrow Agent is authorized by Lessee to transfer via wire the Issuance Costs (as defined below) to Lessor as follows: Bank Name: [ ] ABA Number: [ ] Account Number: [ ] Account Name: [Alliance Funding Solutions, Inc.] Alliance Funding Solutions, Inc. w1Il confirm disbursement of funds to the Lessee's escrow account and then release all of the original documents held in trust to the investor and forward a copy to the Lessee. Sources and Uses of Funds: Principal Amount of Lease [3,125,098.001 TOTAL SOURCES [3,125,098.001 Total Equipment Cost: [3,120,098.001 Issuance Costs: $5,000.00 1142905210 TOTAL LEASE PROCEEDS [3,125,098.001 Attest: CITY OF WEST COVINA By: Name: David N. Carmany Title: City Manager 1142905210 ATTACHMENT NO.5 EQUIPMENT LEASE PURCHASE AGREEMENT BETWEEN ALLIANCE FUNDING SOLUTIONS, INC., as Lessor AND CITY OF WEST COVINA, as Lessee DATED AS OF [March _, 2021] TABLE OF CONTENTS Page ARTICLE 1 DEFINITIONS.................................................................................................I ARTICLE2 LEASE.............................................................................................................2 ARTICLE 3 LEASE TERM.................................................................................................2 ARTICLE 4 RENTAL PAYMENTS................................................................................... 3 4.1 Amount and Times of Payment............................................................................. 3 4.2 Place of Payments.................................................................................................. 3 4.3 Late Charges.......................................................................................................... 3 4.4 Abatement of Rental Payments.............................................................................. 3 4.5 Allocation of Interest.............................................................................................3 4.6 Rental Adjustment.................................................................................................. 3 4.7 Appropriation.........................................................................................................3 4.8 Unconditional Current Obligation......................................................................... 4 ARTICLE5 ESCROW FUND.............................................................................................4 5.1 Escrow Fund.......................................................................................................... 4 5.2 Intentionally Omitted............................................................................................. 4 5.3 Termination............................................................................................................5 ARTICLE 6 RESPONSIBILITIES OF LESSEE................................................................. 5 6.1 Care and Use.......................................................................................................... 5 6.2 Inspection............................................................................................................... 5 6.3 Utilities...................................................................................................................5 6.4 Taxes...................................................................................................................... 5 6.5 Alterations..............................................................................................................6 6.6 Transportation and Installation Charges................................................................ 6 6.7 Insurance................................................................................................................ 6 6.8 Risk of Loss........................................................................................................... 6 6.9 Performance by the Lessor of the Lessee's Responsibilities .................................. 7 6.10 Financial Statements.............................................................................................. 7 ARTICLE 7 EQUIPMENT...................................................................................................7 7.1 Title........................................................................................................................ 7 7.2 Security Agreement................................................................................................ 8 11429413M _i TABLE OF CONTENTS (continued) Page 7.3 Personal Property................................................................................................... 9 7.4 Liens.......................................................................................................................9 7.5 Inspection............................................................................................................... 9 7.6 Use of Equipment; Maintenance and Repairs........................................................ 9 7.7 Essentiality...........................................................................................................10 ARTICLE 8 WARRANTIES AND REPRESENTATIONS OF THE LESSEE ............... 10 ARTICLE 9 WARRANTIES AND REPRESENTATIONS OF THE LESSOR...............11 ARTICLE 10 WARRANTIES AND REPRESENTATIONS OF THE ESCROW AGENT..........................................................................................................12 ARTICLE 11 TAX COVENANTS AND INDEMNIFICATION ....................................... 13 11.1 Covenants.............................................................................................................13 11.2 Further Covenants................................................................................................13 11.3 Indemnification.................................................................................................... 13 ARTICLE 12 GENERAL INDEMNIFICATION................................................................14 ARTICLE 13 INTENTIONALLY OMITTED.................................................................... 14 ARTICLE 14 DEFAULT AND REMEDIES....................................................................... 14 14.1 Definition of Default............................................................................................ 14 14.2 Remedies on Default............................................................................................ 15 14.3 Further Remedies................................................................................................. 15 14.4 Reinstatement.......................................................................................................16 ARTICLE 15 NON-APPROPRIATION.............................................................................. 16 15.1 Nature of0bligations ofthe Lessee..................................................................... 16 15.2 Notice of Appropriation....................................................................................... 17 15.3 Non-Substitution..................................................................................................17 ARTICLE 16 ASSIGNMENT..............................................................................................17 16.1 Assignment By Lessee......................................................................................... 17 16.2 Assignment By The Lessor.................................................................................. 17 16.3 Escrow Assignment By the Lessor......................................................................17 ARTICLE 17 NATURE OF AGREEMENT........................................................................ 18 ARTICLE 18 OPTION TO PURCHASE............................................................................. 18 114294133d2 -ii- TABLE OF CONTENTS (continued) Page ARTICLE 19 MISCELLANEOUS...................................................................................... 19 19.1 Waiver..................................................................................................................19 19.2 Severability.......................................................................................................... 19 19.3 Governing Law.................................................................................................... 19 19.4 Notice...................................................................................................................19 19.5 Section Headings..................................................................................................19 19.6 Entire Agreement.................................................................................................20 19.7 Binding Effect...................................................................................................... 20 19.8 Time..................................................................................................................... 20 19.9 Counterparts......................................................................................................... 20 19.10 No Third -Party Beneficiaries............................................................................... 20 19.11 Exhibits................................................................................................................ 20 Lease Documents: Equipment Lease -Purchase Agreement; Exhibit A — Description of Equipment; Exhibit B - Equipment Schedule; Exhibit C — Notice and Acknowledgment of Assignment; Exhibit D- 1 —Insurance Coverage Request; Exhibit D-2 — Intentionally Omitted; Exhibit E — Essential Use Certificate; Exhibit F — Incumbency Certificate; Exhibit G — Opinion of Lessee's Counsel; Exhibit H — Intentionally Omitted; Exhibit I — Bank Qualified Certificate; Exhibit J — Post Issuance Tax Compliance Procedures; Exhibit K — Escrow Agreement; Exhibit L —City Council Meeting Minutes from Meeting held on [April 6, 2021 ]; Exhibit M—Form 8038-G; and Exhibit N — Closing Memorandum/Payment Proceeds Direction. 11429413M _ffi EQUIPMENT LEASE PURCHASE AGREEMENT THIS EQUIPMENT LEASE PURCHASE AGREEMENT, (as amended or supplemented from time to time, this 'Lease Agreement') dated as of [March _, 20211, between ALLIANCE FUNDING SOLUTIONS, INC., a California corporation (together with its successors and assigns, the "I essoe), whose mailing address is 12520 High Bluff Drive, Suite 345, San Diego, California 92130, and the CITY OF WEST COVINA, a government organization of the State of California (the "Lessee'), whose mailing address is 1444 W Garvey Avenue S, West Covina, California 91790. WITNESSETH: WHEREAS, the Lessor has agreed lease the Equipment (as hereinafter defined) to the Lessee, and the Lessee has agreed to lease the Equipment from the Lessor, pursuant to the terms and conditions hereinafter set forth; NOW, THEREFORE, for and in consideration of the premises and of the covenants hereinafter contained, and other good and valuable considerations, the mutual parties hereto agree as follows: ARTICLE 1 DEFINITIONS For purposes of this Lease Agreement and any related documents, the following definitions will apply: 1.1 Acceptance Certificate. A certificate in the form attached as Exhibit A to the Escrow Agreement. 1.2 Authorized Representative. With respect to the Lessee, the City Manager and any other authorized representative of the Governing Body or other person or officer approved by Lessee in writing. 1.3 Code. The Internal Revenue Code of 1986, as amended. 1.4 Governing Body. The City Council of the Lessee. 1.5 Concluding Payment. Shall have the meaning set forth in Article 18. 1.6 Commencement Date. Shall have the meaning set forth on Exhibit B. 1.7 Costs of the Equipment. The total cost of acquisition and installation of the Equipment, including costs of issuance ($3,386,950.00). 1.8 Default Rate. Shall have the meaning set forth in Section 4.3. 114294133d2 1.9 Equipmarit. The personal property described in Exhibit A to this Lease Agreement that is now or may hereafter from time to time become attached hereto and incorporated herein by reference, together and with any and all additions, modifications, attachments, substitutions, repairs, accessories, replacements, parts and proceeds thereof. 1.10 Escrow Agent. Santa Cruz County Bank and its successors and assigns. 1.11 Escrow Agreement. The Escrow Agreement of even date herewith among the Lessor, the Lessee and the Escrow Agent in substantially the form attached hereto as Exhibit K. 1.12 Escrow Fund. The fund of such name created under the Escrow Agreement. 1.13 Event of Nonappropriation. Shall have the meaning set forth in Section 4.6(b). 1.14 Fiscal Year. Shall mean July 1 through June 30 of each year. 1.15 Lease Term. The period of time described in Article 3 of this Lease Agreement. ARTICLE 2 LEASE The Lessor hereby sells, transfers and leases to the Lessee, and the Lessee hereby acquires, purchases and leases from the Lessor, the Equipment. The Lessee shall be entitled to possession the Equipment so long as the Lessee is not in default under this Lease Agreement and the Lessee has not failed to appropriate any amounts required to be paid by it hereunder. ARTICLE 3 LEASE TERM The Lease Term shall comlrence on the Coniniencement Date and shall terminate, except as otherwise expressly provided herein, upon the first to occur of. (a) the exercise by Lessee of the option to purchase the Equipment pursuant to Article 18 hereof, (b) Lessor's election to terminate this Lease Agreement pursuant to Article 15; (c) termination of this Lease Agreement due to an Event of Nonappropriation or (d) upon payment by the Lessee of the scheduled rental payments and all other amounts due and payable hereunder. ARTICLE 4 RENTAL PAYMENTS 4.1 Amount and Times of Payment. The Lessee hereby agrees to pay rental payments hereunder in the amounts and on the dates identified in Exhibit B. 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. 114294133d2 4.2 Place of Payments. All rental payments required to be made to the Lessor hereunder shall be made at the Lessor's principal office or as may be otherwise directed by the Lessor. The Lessee shall pay the rental payments in lawful money of the United States of America from moneys legally available therefor. 4.3 Late Charges. Whenever any rental payment or other amount payable to Lessor by Lessee hereunder is not paid within ten (10) business days after such due date, Lessee agrees to pay Lessor a late charge on the delinquent amount at the "Default Rate," which is one percent (1%) per month, or the maximum amount permitted under applicable law, whichever is less. 4.4 Current Expense. The Lessee's obligation to pay rental payments and any additional amounts payable hereunder constitutes a current obligation payable exclusively from legally available fiords and shall not be construed to be an indebtedness within the meaning of any applicable constitutional or statutory limitation or requirement. THIS LEASE AGREMENT IS NOT A PLEDGE OF THE FULL FAITH AND CREDIT OF THE LESSEE, AND DOES NOT CREATE ANY OBLIGATION ON THE PART OF THE LESSEE EXCEPT AS SPECIFICALLY STATED HEREIN. 4.5 Unconditional Payment Obligation. Subject to Section 15.1 hereof, the Lessee's obligation to pay all amounts payable hereunder and the Lessee's obligations otherwise to perform its obligations under or with respect to the Lease Agreement, are and shall be absolute and unconditional and shall not be affected by any circumstances whatsoever, including (i) any right of setoff, counterclaim, recoupment, deduction, abatement, defense or other right which the Lessee may have against the Lessor, the manufacturer or vendor of the Equipment, or any other person, for any reason whatsoever, including, those arising or allegedly arising out of claims (present or future, alleged or actual, and including claims arising out of strict liability in tort or negligence of the Lessor) of the Lessee against the Lessor under this Lease Agreement or otherwise, (ii) any defect in the title, condition, design, operation, or fitness for use of, or any damage to or loss or destruction of all or any portion of, the Equipment, or any interruption or cessation in the use or possession thereof by the Lessee for any reason whatsoever, (in) the existence of any collateral, guaranty or security interest, (iv) any insolvency, bankruptcy, reorganization or similar proceedings by or against Lessee, (v) any force majeure event, or (vii) any other circumstance, happening or event whatsoever. It is the intention of the parties that all rental payments and other amounts due hereunder shall continue to be payable in all events in the manner and at the times set forth herein unless the obligation to do so shall have been terminated pursuant to the express terms hereof. 4.6 Appropriation. (a) Lessee represents and warrants that: (i) it has made sufficient appropriations or has other legally available funds to pay all rental payments hereunder due during the first Fiscal Year of the Lease Term; (ii) the officer of Lessee responsible for budget preparation will do all things lawfully within his/her power to obtain appropriated funds for the payment of rental payments and other amounts required to be paid hereunder in each succeeding Fiscal Year during the Lease Term; and (in) Lessee acknowledges that Lessor has relied upon these representations as an inducement to enter into this Lease Agreement. If an Event of Nonappropriation (hereinafter defined) shall occur, Lessee agrees, at Lessee's sole cost and expense, peaceably to deliver the 114294133d2 corresponding Equipment to Lessor in the condition required by Section 6.1 at such location in the continental United States specified by the Lessor on or before the effective date of termination. (b) Notwithstanding any provision to the contrary in this Lease Agreement, if sufficient funds are not appropriated by the Governing Body to pay rental payments and other amounts due hereunder (an `Event of Nonappropriation') this Lease Agreement shall terminate as of the end of the Fiscal Year for which funds have been appropriated to pay all amounts hereunder. ARTICLE 5 ESCROW FUND 5.1 Escrow Fund. On the Commencement Date upon satisfaction of the Lessor's requirements to closing (including, without lunitation, the execution and delivery to the Lessor of (1) an incumbency certificate in substantially the form attached as Exhibit F hereto and (2) an Opinion of Lessee's Counsel in substantially the form attached as Exhibit G hereto, Lessor shall deposit: $3,386,950.00 into the Escrow Fund to be held in escrow and applied upon the express terms and conditions of the Escrow Agreement for the acquisition of the Equipment. The Lessee shall order the Equipment, cause the Equipment to be delivered and installed at the location specified in Exhibit B and pay any and all delivery and installation costs and other Equipment costs in connection therewith. When the Equipment has been delivered and installed, Lessee shall promptly accept such Equipment and evidence said acceptance by executing and delivering to Lessor an Acceptance Certificate. The insufficiency of the amount in the Escrow Fund to pay all costs of the Equipment and any other costs related thereto shall not affect Lessee's obligations hereunder. ARTICLE 6 RESPONSIBILITIES OF LESSEE 6.1 Care and Use. The Lessee shall use the Equipment in a careful and proper manner, in compliance with all applicable laws and regulations, and at its sole cost and expense, service, repair and maintain the Equipment so as to keep the Equipment in good condition, repair, appearance and working order for the purposes intended, ordinary wear and tear excepted, and shall replace any part of the Equipment as may from time to time become worn out, lost, stolen, destroyed or damaged or is unfit for use. Any and all additions to orreplacements of the Equipment and all parts thereof shall constitute accessions to the Equipment and shall be subject to all the terms and conditions of this Lease Agreement and included in the term 'Equipment" as used in this Lease Agreement. 6.2 Inspection. The Lessor shall have the right upon reasonable prior notice to the Lessee to enter into and upon the premises where the Equipment is located to inspect the Equipment and observe its use during normal business hours. 6.3 Utilities. The Lessee shall pay all charges for gas, water, steam, electricity, fight, heat or power, telephone or other utility service, if any, furnished to or used in connection with the 114294133d2 Equipment during the term of this Lease Agreement. There shall be no abatement of rental payments on account of interruption of any such services. 6.4 Taxes. The Lessee agrees to pay when due any and all taxes relating to the Equipment and the Lessee's obligations hereunder, including but not limited to, all license or registration fees, gross receipts tax, sales and use tax, if applicable, license fees, documentary stamp taxes, rental taxes, assessments, charges, ad valorem taxes, excise taxes, and all other taxes, licenses and charges imposed on the ownership, possession or use of the Equipment by any governmental body or agency, together with any interest and penalties, other than taxes on or measured by the net income of the Lessor. 6.5 Alterations. Without the prior written consent of the Lessor, which consent shall not be unreasonably withheld, the Lessee shall not make any alterations, modifications or attachments to the Equipment which cannot be removed without materially damaging the factional capabilities or economic value of the Equipment. Upon return of the Equipment and at the Lessor's request, the Lessee at its sole cost and expense, will remove all alterations, additions and attachments and repair the Equipment as necessary to return the Equipment to the condition in which it was furnished, ordinary wear and tear excepted. 6.6 Transportation and Installation Charges. The Lessee shall be responsible for all charges relating to the transportation of the Equipment to the Lessee's location and the installation at such location. 6.7 Insurance. The Lessee shall continuously maintain at its sole cost and expense or cause to be maintained (i) public liability insurance for death or injuries to persons, or damage to property arising out of or in any way connected to the Equipment sufficient to protect Lessor and its assigns from liability in all events and (ii) casualty insurance on the Equipment covering such risks as are customarily insured against by reasonable and prudent government bodies of like size for such equipment, and in such amounts at a minimum equal to the greater of the outstanding principal amount under this Lease Agreement or the replacement value of the Equipment with such deductibles as required, and with such insurance companies as shall be reasonably satisfactory to the Lessor. Lessor shall be named as an additional insured on any such policy that insures the Equipment and the policy shall be endorsed to name the Lessor as a loss payee. The Lessee shall pay the premiums therefor and deliver to the Lessor the policies of insurance or duplicates thereof and a certification in the form of Exhibit D-1 or other evidence reasonably satisfactory to the Lessor of such insurance coverage. Each insurer shall also agree by endorsement upon the policy or policies issued by it that it will give thirty (30) days prior written notice to the Lessor of cancellation, non -renewal, or material modification of such policy and ten (10) days prior written notice for non-payment of premium. In lieu of the insurance policies described above, and with the consent of the Lessor, which consent shall not be unreasonably withheld, the Lessee may self - insure the Equipment by means of a self-insurance program whereby funds are set aside and maintained for the purpose of self -insuring the property of the Lessee. If Lessee chooses to self - insure the Equipment, Lessee will provide Lessor a certification in the form of Exhibit D-2 together with evidence of the self-insurance program in form and substance satisfactory to Lessor. 6.8 Risk of Loss. Lessee shall bear the entire risk of loss, theft, destruction of or damage to the Equipment or any part thereof from any cause whatsoever during the Lease Term 114294133d2 and thereafter until redelivery to a location designated by Lessor, and shall not be relieved of the obligation to pay rental payments or any other obligation hereunder because of any such occurrence. If (a) the Equipment or any portion thereof hereunder 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 hereunder is taken under the exercise of the power of eminent domain, Lessee shall immediately notify Lessor. Lessee and Lessor shall cause the net proceeds of any insurance claim (including self-insurance) or condenmation award to be applied, at Lessor's option, to (i) the prompt repair, restoration, modification or replacement of the Equipment so affected or (ii) the payment in full of the then applicable Concluding Payment. Any balance of net proceeds remaining after completion of such work or payment of such Concluding Payment shall be paid promptly to Lessee. If the net proceeds are insufficient to pay the costs of such repair, restoration, modification or replacement or to pay such Concluding Payment in full, Lessee shall, at Lessor's direction and sole discretion, either complete the work or pay the then applicable Concluding Payment in fir➢, and in either case pay any cost in excess of the amount of net proceeds, but only from legally available funds. 6.9 Performance by the Lessor of the Lessee's Responsibilities. Any performance required of the Lessee or any payments required to be made by the Lessee, if not timely performed or paid, may be performed or paid by the Lessor, and in that event, the Lessor shall be immediately reimbursed by the Lessee for these payments and for any costs and expense, legal or otherwise, associated with the payments or other performance by the Lessor, with interest thereon at the Default Rate. 6.10 Financial Statements. The Lessee agrees that it will furnish the Lessor not later than ten (10) days prior to the end of each Fiscal Year, the Lessee's annual budget or other proof of appropriation for the ensuing Fiscal Year and such other information relating to Lessee's ability to continue the Lease Term for the next succeeding Fiscal Year, and permit the Lessor or its agents and representatives to inspect the Lessee's books and records and make extracts therefrom. Additionally, Lessee shall famish to Lessor as soon as available, but in no event later than 180 days after the end of each Fiscal Year, the audited financial statements of Lessee, in customary and reasonable detail including the report provided by Lessee's auditor. The Lessee represents and warrants to the Lessor that all financial statements which have been delivered to the Lessor, if any, and accurately reflect the Lessee's financial condition and there has been no material adverse change in Lessee's financial condition as reflected in the statements since the date thereof. ARTICLE 7 EQUIPMENT 7.1 Title. Title to the Equipment and any and all additions, repairs, replacements or modifications thereto, shall be vested in the Lessee subject to the rights of the Lessor hereunder so long as the Lessee shall not be in default hereunder and/or this Lease Agreement shall not have been tenrinated pursuant to the provisions of Article 15 hereof. Immediately upon the occurrence of an event of default by the Lessee hereunder or the termination of this Lease Agreement under Article 15, title to the Equipment (and all additions, repairs, replacements or modifications thereto) shall vest in the Lessor, free and clear of any right, title or interest of the Lessee unless the Lessor elects otherwise, without the necessity of any further action or the execution of any documents by 114294133d2 the parties. Upon timely receipt of all amounts required for the purchase of the Equipment pursuant to Section 4.1 or Article 18 this Agreement shall terminate, all of Lessor's security interest in the Equipment shall terminate, and Lessor shall deliver to Lessee all such documents and instruments as Lessee may reasonably request to evidence the termination of this Agreement and Lessor's security interest in the Equipment, without warranty by or recourse to Lessor. 7.2 Security Agreement. (a) To secure the performance of all of Lessee's obligations hereunder, Lessee hereby grants to Lessor, and Lessor shall have and retain, a security interest constituting a first priority and perfected lien and security interest on the Equipment. Lessee agrees to execute and deliver such additional documents, including, without limitation, opinions of counsel, financing statements, landlord -tenant or mortgagee waivers, notices and similar instruments, in form satisfactory to Lessor, that Lessor deems necessary or appropriate to establish and maintain its security interest in the Equipment or for the confirmation or perfection of Lessor's rights hereunder. As further security therefor, Lessee hereby grants to Lessor a first priority security interest in the cash and negotiable instruments from time to time in the Escrow Fund and all proceeds (cash and non -cash) thereof, and agrees with respect thereto that Lessor shall have all the rights and remedies of asecured party under the applicable provisions of the Uniform Commercial Code. Lessee, at its expense, will protect and defend Lessee's rights in the Equipment and Lessor's rights and interests therein and will keep the Equipment free and clear from any and all claims, liens, encumbrances and legal processes of Lessee's creditors and other persons. 7.3 Personal Property. The Equipment is, and shall at all times be and remain, personal property notwithstanding that the Equipment or any part thereof may now be, or hereafter become, in any manner affixed or attached to, or imbedded in, or permanently resting upon, real property. Upon request of the Lessor, Lessee shall obtain, as to any place where the Equipment is located, a waiver from the landlord and mortgagee thereof with respect to any rights they may have in and to the Equipment or the rights of levy or seizure thereon. 7.4 Liens. The Lessee shall not directly or indirectly create, incur, assume or suffer to exist any mortgage, pledge, lien, charge, security interest, encumbrance or claim on or with respect to the Equipment or any interest therein, except for the lien and security interest of the Lessor therein created under this Lease Agreement. The Lessee shall promptly, at its own expense, take such action as may be necessary to duly discharge any such mortgage, pledge, lien, security interest, charge, encumbrance or claim if the same shall arise at any time. 7.5 Use of Equipment; Maintenance and Repairs. Lessee shall keep the Equipment at the "Equipment Location" specified in Exhibit B and Lessee shall not remove any of the Equipment therefrom without Lessor's prior written consent. Lessee shall use the Equipment for the purpose for which such Equipment was designed. Lessee shall at all times and at the Lessee's sole cost and expense operate, maintain, service and repair the Equipment in good operating order, repair and condition (A) in accordance and consistent with (1) the manufacturer's warranties, recommendations and all maintenance and operating manuals or service agreements, whenever famished or entered into, including any subsequent amendments or replacements thereof, issued by the manufacturer, (2) the requirements of all applicable insurance policies, (3) preserving all rights to any warranties, indemnities or other rights or remedies (such service to include monitoring 114294133d2 the degradation of the Equipment and enforcing or assisting with the enforcement of the applicable warranties with respect to such degradation), (4) all applicable laws, ordinances, regulations or requirements of any governmental authority, official, board or department relating to its installation, possession, use or maintenance, and (5) prudent industry standards; and (B) without limiting the foregoing, so as to cause the Equipment to be in at least the same condition as when delivered to the Lessee hereunder, except for ordinary wear and tear. Lessee shall not make any alterations, additions, or improvements to the Equipment that are not readily removable without causing damage to or reducing the value of the Equipment. All alterations, additions, or improvements not readily removable shall become property of Lessor. 7.6 Essentiality. Lessee represents that, with respect hereto, (a) the use and operation of the Equipment is essential to its proper, efficient, and economic governmental operation and (b) the functions performed by the Equipment could not be transferred to other equipment available for its use. Lessee does not intend to sell or otherwise dispose of the Equipment or any interest therein prior to the last rental payment scheduled to be paid hereunder. On the Commencement Date, Lessee shall complete and provide Lessor a certificate in the form of Exhib it E. 7.7 Sublease. Lessee will not sublease or otherwise in any manner transfer, deliver or, except as expressly consented to by Lessor, relinquish possession (except on a temporary basis for repair or nnaurtenance) or use of the Equipment without the prior written consent of Lessor. 7.8 No Warranties. Lessee acquires and leases the Equipment "AS IS." Lessee acknowledges that Lessor did not manufacture the Equipment. Lessor does not represent the manufacturer, supplier, owner or dealer, and Lessee selected the Equipment based upon Lessee's own judgment. Lessor makes no warranties, express or implied, including warranties of merchantability or fitness for a particular purpose or otherwise or as to the Equipment's value, design, condition, use, capacity or durability. Lessee agrees that regardless of cause, Lessor is not responsible for, and Lessee will not make any claim against Lessor for, any damages, whether consequential, direct, special or indirect incurred by Lessee in connection with the Equipment. Neither the manufacturer, supplier or dealer nor any salesperson, employee or agent of the manufacturer, supplier or dealer is Lessor's agent or has any authority to speak for Lessor or to bind Lessor in any way. For and during the Lease Term, Lessor assigns to Lessee any manufacturer's or supplier's product warranties, express or implied, applicable to any Equipment and Lessor authorizes Lessee to obtain the customary services Runished in connection with such warranties at Lessee's sole expense. Lessee agrees that (a) all Equipment will have been purchased in accordance with Lessee's specifications from suppliers selected by Lessee, (b) Lessor is not a manufacturer or dealer of any Equipment and has no liability for the delivery or installation of any Equipment, (c) Lessor assumes no obligation with respect to any manufacturer's or supplier's product warranties or guaranties, (d) no manufacturer or supplier or any representative of said parties is an agent of Lessor, and (e) any warranty, representation, guaranty or agreement made by any manufacturer or supplier or any representative of said parties shall not be binding upon Lessor. 114294133d2 ARTICLE 8 WARRANTIES AND REPRESENTATIONS OF THE LESSEE The Lessee warrants and represents to the Lessor as follows, which representations and warranties shall be continuing. (a) The Lessee is a political subdivision of the State of California within the meaning of Section 103(c) of the Code. (b) The Lessee is authorized under the Constitution and laws of the State of California to enter into this Lease Agreement and the transactions contemplated hereby and to perform all of its obligations hereunder. (c) The execution and delivery of this Lease Agreement by or on behalf of the Lessee has been duly authorized by all necessary action of the Governing Body, and the Lessee has obtained such other approvals and consents as are necessary to consummate this Lease Agreement. (d) The Lessee has complied with such public bidding requirements as may be applicable to this Lease Agreement and such action is in compliance with all public bidding and other State and federal laws applicable to this Agreement and the acquisition and financing of the Equipment by Lessee. (e) The Lessee has an immediate need for, and expects to make immediate use of all of the Equipment which need is not temporary or expected to diminish during the Lease Term (1) The execution, delivery and performance of this Lease Agreement and transactions contemplated herein will not violate any judgment, order, law or regulation applicable to the Lessee or result in any breach of, or constitute a default under, any indenture, mortgage, deed of trust, bond, loan or credit agreement or other instrument to which the Lessee is a party or by which it is bound. (g) There are no actions, suits or proceedings pending or, to the knowledge of the Lessee, threatened against or affecting the Lessee in any court or before any governmental commission, board or authority which, if adversely determined, would have a material adverse effect on the ability of the Lessee to perform its obligations hereunder. (h) The Equipment is essential to and will be used only for the purpose of performing one or more governmental functions of the Lessee consistent with the scope of the Lessee's authority and will not be used in a trade or business of any person or entity. (i) The Lessee has sufficient fiords in its budget for the current Fiscal Year to pay the aggregate amount of the rental payments due under this Lease Agreement during the current Fiscal Year. 9 114294133d2 ARTICLE 9 WARRANTIES AND REPRESENTATIONS OF THE LESSOR The Lessor warrants and represents to the Lessee as follows, which representations and warranties shall be continuing. (a) The Lessor is a financial institution duly incorporated under the laws of the State of California and is in good standing with the State of California and is duly authorized to enter into the transactions contemplated by this Lease Agreement and to carry out its obligations hereunder; (b) The Lessor has full power and authority to enter into this Lease Agreement and all other documents relating thereto and the performance of the Lessor's obligations hereunder have been duly and validly authorized, executed and delivered by the Lessor and approved under all laws, regulations and procedures applicable to Lessor and this Lease Agreement constitutes a valid, legal and binding obligation of the Lessor, enforceable in accordance with its terms; ARTICLE 10 INTENTIONALLY OMITTED ARTICLE 11 YOKV-111 D ,"A" 'W"A II.1111►1171151 1 KO[ILI 11.1 Covenants. The Lessee covenants and agrees that it will (i) rebate an amount equal to any excess earnings on the Escrow Fund to the Federal Government if required by, and in accordance with, Section 148(1) of the Code, and make the annual deten-driations, and maintain the records required by and otherwise comply with aU regulations applicable thereto; (i1) register in writing the owner of this Lease Agreement so as to meet the applicable requirements of Section 149(a)(3) of the Code; (iii) tunely file a Form 8038-G with the Internal Revenue Service in accordance with Section 149(e) of the Code; (iv) not permit the Equipment to be directly or indirectly used for a private business use within the meaning of Section 141 of the Code; and (v) comply with all provisions and regulations applicable to excluding interest from Federal gross income pursuant to Section 103 of the Code. 11.2 Further Covenants. The Lessee further covenants that it will not take any action, or fail to take any action, if any such action or failure to take action would adversely affect the exclusion from gross income of the interest portion of the rental payments hereunder under Section 103 of the Code. The Lessee will not directly or indirectly use or permit the use of any proceeds available from the Lessor or any other funds of the Lessee, or take or omit to take any action that would cause the lease purchase obligation evidenced by this Lease Agreement to be an "arbitrage bond" within the meaning of Section 148(a) of the Code. To that end, the Lessee w1Il comply with all requirements of Section 148 of the Code to the extent applicable to the lease purchase obligatio n evidenced by this Lease Agreement. 10 114294133d2 11.3 Indemnification. If the Lessor receives notice, in any form, from the Internal Revenue Service that it has determined that the Lessor may not exclude any interest paid hereunder from Federal gross income due to an act or omission of the Lessee, then the Lessee shall pay to the Lessor, within ninety (90) days after the Lessor notifies the Lessee of such determination, an amount which, with respect to the rental payments previously paid and taking into account all penalties, fines, interest and additions to tax (including all federal, state and local taxes imposed on the interest component of all rental payments due through the date of such event), will restore to the Lessor its after-tax yield (assuming tax at the highest marginal tax rate and taking into account the time of receipt of payments and reinvestment at the after-tax yield rate) on the transaction evidenced by this Lease Agreement through the date of such payment. Additionally, the Lessee agrees that upon the occurrence of such an event, it shall pay as additional rent to the Lessor on such succeeding rental payment due date such amount as will maintain such after-tax yield to the Lessor. Notwithstanding the foregoing, the Lessee's obligations under this paragraph shall be subject to the appropriation of funds for such purpose by the Governing Body. ARTICLE 12 GENERAL INDEMNIFICATION The Lessee hereby agrees to indemnify, protect and save the Lessor harmless, to the extent permitted by law, from all liability, obligations, losses, claims, damages, actions, suits, proceedings, costs and expenses, including attorneys' fees, arising out of, connected with, or resulting directly or indirectly from the Equipment, including without limitation, the manufacture, selection, delivery, possession, condition, lease, use, operation or return of the Equipment. The indemnification arising under this section shall continue in full force and effect notwithstanding the full payment of all obligations due under this Lease Agreement. Notwithstanding the foregoing, the Lessee does not waive any sovereign immunity or other defense which may be available to it under applicable law. ARTICLE 13 INTENTIONALLY OMITTED ARTICLE 14 DEFAULT AND REMEDIES 14.1 Definition of Default. The Lessee shall be deemed to be in default hereunder upon the happening of any of the following events of default (each, an "Event of Default"). (a) The Lessee shall fail to make any rental payment or pay any other sum under this Lease Agreement when due other than by reason of an Event of Nonappropriation; (b) The Lessee shall fail to maintain insurance as required herein; (c) With the exception of the above clauses (a) or (b), the Lessee shall fail to perform or observe any term or condition or covenant of this Lease Agreement for a period of 11 114294133d2 thirty (30) days after written notice by Lessor to Lessee specifying such failure and requesting that it be remedied, unless Lessor shall agree in writing to an extension of time prior to its expiration; (d) Proceedings under any bankruptcy, insolvency, reorganization or similar litigation shall be instituted by or against the Lessee, or a receiver, custodian or similar officer shall be appointed for the Lessee or any of its property, and such proceedings or appointments shall not be vacated, or fully stayed, within sixty (60) days after the institution or occurrence thereof. (e) Any warranty, representation or statement made by the Lessee is found to be incorrect or misleading in any material respect on the date made. 14.2 Remedies on Default. Upon the occurrence of any Event of Default, the Lessor may exercise any one or more of the following remedies as the Lessor in its sole discretion shall elect. (a) With or without terninating this Lease Agreement, may declare all rental payments payable hereunder to the end of the then -current Fiscal Year of Lessee to be immediately due and payable by Lessee, whereupon such rental payments shall be immediately due and payable. (b) Exercise any other remedy available, at law or in equity, with respect to such Event of Default. (c) Reenter and take possession of the Equipment wherever situated without any court order or other process of law and without liability for entering the premises and sell, lease, sublease or make other disposition of the same in a commercially reasonable manner for the account of the Lessee, and apply the proceeds of any such sale, lease, sublease, or other dispositio n, after deducting all costs and expenses, including court costs and reasonable attorneys' fees, incurred with the recovery, repair, storage and other sale, lease, sublease or other disposition costs, toward the balance due under this Lease Agreement. (d) Terninate this Lease Agreement as to all or any part of the Equipment and use, operate, lease or hold the Equipment as the Lessor in its sole discretion may decide. (e) Terninate the Escrow Fund and apply any amounts therein to the Lessee obligations hereunder. 14.3 No Remedy Exclusive. Each of the rights and remedies under this Agreement is cumulative and may be enforced separately or concurrently. No course of dealing or conduct between Lessor and Lessee shall be effective to amend, modify or change any provisions of this Agreement. No failure or delay by Lessor to insist upon the strict performance of any term, covenant or agreement of the Agreement, or to exercise any right, power or remedy consequent upon a breach thereof, shall constitute a waiver of any such term, covenant or agreement or of any such breach, or preclude Lessor from exercising any such right, power or remedy at any later time or times. 12 114294133d2 14.4 Costs and Attorneys' Fees. Upon the occurrence of an Event of Default, Lessee agrees to pay to Lessor or reimburse Lessor for, in addition to all other amounts payable hereunder, all of Lessor's costs of collection, including reasonable attorneys' fees, whether or not suit or action is filed thereon. Any such costs shall be imlrediately due and payable upon written notice and demand given to Lessee, shall be secured by this Agreement until paid, and shall bear interest at the Default Rate. In the event suit or action is instituted to enforce any of the terms of this Agreement, the prevailing parry shall be entitled to recover from the other parry such sum as the court may adjudge reasonable as attorneys' fees at trial and on appeal of such suit or action or in any bankruptcy proceeding, in addition to all other sums provided by law. ARTICLE 15 NON -APPROPRIATION 15.1 Nature of Obligations of the Lessee. (a) Except as otherwise provided in this Article 15, the obligation of the Lessee to make rental payments and all other payments provided for in this Lease Agreement and to perform its obligations under this Lease Agreement will be absolute and unconditional, and such rental payments and other amounts will be payable without any rights of set-off, recoupment or counterclaim that the Lessee might have against the Lessor or any other person and whether or not the Equipment is used by the Lessee or available for use by the Lessee. (b) While recognizing that it is not empowered to make any binding commitment beyond the current Fiscal Year of the Lessee, it is the current intention of the Lessee to make sufficient annual appropriations during the Lease Term to pay all rental payments and other amounts required to be paid by the Lessee under this Lease Agreement. Notwithstanding anything in this Lease Agreement to the contrary, the Lessee's obligation to pay the cost and expense of performing its obligations under this Lease Agreement, including without limitation its obligations to pay all rental payments and all other amounts required to be paid by the Lessee under this Lease Agreement, are subject to and dependent upon appropriations being made from time to time by the Governing Body for such purpose. The Lessee directs the Authorized Representative or other officer charged with the responsibility of preparing the Lessee's budget to include in the budget for each Fiscal Year of the Lessee during the Lease Term a request that the Governing Body appropriate in the Fiscal Year the amount of rental payments and other payments due under this Lease Agreement during such Fiscal Year. The Lessee shall notify the Lessor in writing each year during the Lease Term that such budget request has been made as soon as practicable following the submission of the Lessee's annual budget to the Governing Body. If at any time during any Fiscal Year of the Lessee, the amount appropriated in the budget of the Lessee for the Fiscal Year is insufficient to pay when due the rental payments and other amounts due under this Lease, the Lessee directs the Governing Body (or other officer charged with responsibility for preparing the Lessee's budget) to submit to the Governing Body at the next scheduled meeting of the Governing Body, or as promptly as practicable, but in any event within 45 days, a request for a supplemental appropriation sufficient to cover the deficit. 15.2 Notice of Appropriation. The Lessee shall give notice to the Lessor by no later than June 30 of each year of the amount budgeted by the Lessee and appropriated by the Governing 13 114294133d2 Body for all payments required to be made by the Lessee under the Lease Agreement in the Fiscal Year commencing on the immediately succeeding July 1 and whether such amount is sufficient to meet all such required payments during such period. ARTICLE 16 ASSIGNMENT 16.1 Assignment By Lessee. The Lessee agrees not to sell, assign, lease, sublease, pledge or otherwise encumber or suffer a lien or encumbrance upon or against any interest in this Lease Agreement or the Equipment (except for the lien and security interest of the Lessor therein) or to remove the Equipment from its place of installation without the Lessor's prior written consent which shall not be unreasonably withheld. 16.2 Assignment By The Lessor. Lessor may assign its rights, title and interest in and to this Agreement, the Equipment or the Escrow Agreement (including the escrow fund thereunder), and/or may grant or assign a security interest in this Agreement, the Equipment or any Escrow Agreement (including the escrow fund thereunder), in whole or in part, without obtaining the consent of Lessee, but no such assignment, transfer or conveyance shall be effective as against Lessee unless and until Lessor has delivered to Lessee written notice thereof that discloses the name and address of the assignee and such assignment, transfer or conveyance shall be made only to banks, insurance companies or other financial institutions or their affiliates. LESSEE AGREES NOT TO ASSERT AGAINST ANY ASSIGNEE ANY CLAIMS, ABATEMENTS, SETOFFS, COUNTERCLAIMS, RECOUPMENT OR ANY OTHER SIMILAR DEFENSES WHICH LESSEE MAY HAVE AGAINST LESSOR. Lessee shall keep a complete and accurate record of all such assignments in the form necessary to comply with Section 149(a) of the Code. Lessee agrees to acknowledge in writing any such assignments if so requested. ARTICLE 17 NATURE OF AGREEMENT The Lessor and the Lessee agree that it is their intention that, for federal income tax purposes, the interest of the Lessor in the Equipment is as a secured party and the interest of the Lessee is as a debtor, and that the Lessor neither has nor will have any equity in the Equipment. It is the agreement of the Lessor and the Lessee that the aggregate rental payments provided for hereunder constitute the purchase price of the Equipment together with the interest on the unamortized amount thereof over the term of this Lease Agreement, that each installment of rent constitutes principal and interest, which fiully amortizes the purchase price of the Equipment, together with interest, over the term of this Lease Agreement, and that upon the due and punctual payment and performance of the rental payments and other amounts and obligations under this Lease Agreement, title to the Equipment shall vest permanently in Lessee as provided in this Lease Agreement, free and clear of any lien or security of the Lessor therein. 14 114294133d2 ARTICLE 18 OPTION TO PURCHASE At the option of Lessee, and provided that no Event of Default has occurred and is continuing hereunder, Lessor's interest in all, but not less than all, of the Equipment will be transferred, conveyed and assigned to Lessee, thereby vesting title to the Equipment permanently in Lessee, and this Lease shall terminate: (a) upon payment in full of the rental payments and all other payments then due hereunder or (b) on any rental payment date hereunder, by paying to Lessor, in addition to the rental payment due on such date, an amount equal to the concluding payment (the "Concluding Payment") shown for such rental payment date in the rental payment schedule in Exhibit B. Lessee shall not have the option to purchase the Equipment hereunder as provided in the foregoing clause (b) on any rental payment date hereunder for which a Concluding Payment is not stated in the rental payment schedule. This option to purchase may be exercised by the Lessee on any Payment Date on or after September 25, 2029 and is conditioned upon: (a) the Lessee's having performed all of the terms and conditions of the Lease Agreement between the parties other than the payment of monies not yet due and payable under this Lease Agreement; (b) the Lessee's giving written notice to the Lessor of its election to exercise the option not less than sixty (30) days prior to the date of exercise of the option by the Lessee; and of the option. (c) the Lessee's payment of the purchase price in cash at the time of the exercise ARTICLE 19 MISCELLANEOUS 19.1 Waiver. No covenant or condition of this Lease Agreement can be waived except by the written consent of the Lessor. Any failure of the Lessor to require strict performance by the Lessee or any waiver by the Lessor of any terms, covenants or agreements herein shall not be construed as a waiver of any other breach of the same or of any other term, covenant or agreement herein. 19.2 Severability. In the event any portion of this Lease Agreement shall be determined to be invalid under any applicable law, such provision shall be deemed void and the remainder of this Lease Agreement shall continue in full force and effect. 19.3 Governing Law. This Lease Agreement shall be construed, interpreted and enforced in accordance with the laws of the State of California. 19.4 Notice. All notices made or required to be given pursuant to this Lease Agreement shall be in writing and shall be deemed duly served if and when mailed, certified or registered 15 114294133d2 mail, postage prepaid, return receipt requested, to the other parry at its address set forth above or at such other address as such parry shall hereafter designate in writing. If to the Lessor, address to: Alliance Funding Solutions, hic. 12520 High Bluff Drive, Suite 345 San Diego, California 92130 Attention: Brad Chapman Email: Brad@absenergy.com If to the Lessee, address to: City of West Covina 1444 W Garvey Avenue S West Covina, California 91790 Attention: David N. Carmany Email: DCarrnany@westcovina.org City of West Covina 1444 W Garvey Avenue S West Covina, California 91790 Attention: Sandra Galvez Email: SGalvez@westcovina.org 19.5 Section Headings. All section headings contained herein are for convenience of reference only and are not intended to define or limit the scope of any provision of this Lease Agreement. 19.6 Entire Agreement. This Lease Agreement, together with any schedules hereto, constitutes the entire agreement between the parties and shall not be modified, amended, altered or changed except by written agreement signed by the parties. 19.7 Binding Effect. Subject to the specific provisions of this Lease Agreement, this Lease Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and assigns. 19.8 Further Assurances. The Lessee will promptly and duly execute and deliver to the Lessor such further documents, instruments and assurances and take such further action as the Lessor may from time to time reasonably request in order to carry out the intent and purpose of this Lease Agreement and to establish and protect the rights and remedies created or intended to be created in favor of the Lessor hereunder. 19.9 Time. Time is of the essence of this Lease Agreement. 16 114294133d2 19.10 Counterparts. This Lease Agreement, and any exhibit hereto, may be executed in one or more counterparts, each of which shall be an original and all of which together shall constitute one and the same instrument. 19.11 No Third -Party Beneficiaries. This Lease Agreement and any documents or certificates executed in connection with, or pursuant to it, are intended only for the benefit of the Lessor, the Lessee and the Escrow Agent, and no rights are intended, or shall be deemed to be, granted to any other parties thereby. 19.12 Exhibits. This Agreement includes the Exhibits attached hereto, all of which Exhibits are made a part hereof for all purposes. Lessee and Lessor agree that if any Exlubit to this Agreement contains blanks, the same shall be completed correctly and in accordance with this Agreement prior to or at the time of the execution and delivery thereof. [Remainder of page intentionally left blank signature pages follow] 17 114294133d2 IN WITNESS WHEREOF, the parties hereto have caused this Lease Agreement to be executed as of the day and year first above written. LESSOR: ALLIANCE FUNDING SOLUTIONS, INC., a California corporation By: Name: Brad Chapman Title: President LESSEE: CITY OF WEST COVINA, a governmental organization By: Name: David N. Carmany Title: City Manager 18 114294133d2 EXIHBIT A DESCRIPTION OF EQUIPMENT The Equiptnent shall mean a 1.28 MW solar system at city facilities to generate renewable energy to reduce the Lessee's energy consumption and installed at the following sites: 1. Cameron Park Community Center, 1305 E Cameron Ave, West Covina, CA 91790; 2. City Yard, 825 S Sunset Ave, West Covina, CA 91790; 3. Civic Center, 1444 W Garvey Ave S, West Covina CA 91790; and 4. Senior Center, 2501 E Cortez St, West Covina, CA 91791. Extnbit A 11429413M EXIIIBIT B EQUIPMENT SCHEDULE 1. Description of the Equipment: See Exhibit A 2. Equipment Location: See Exhibit A 3. Rental Payment Schedule: The rental payments shall be made for the Equipment as follows: See attached Schedule 1 to this Exhibit B. 4. Interest Rate: 3.600% 5. Commencement Date: March 25, 2021 6. Scheduled Lease Term: Twenty (20) years 7. Lessee's current Fiscal Year extends from July 1, 2020 8. The terms and provisions of the Equipment Lease -Purchase Agreement described above are hereby incorporated into this Schedule by reference and made a part hereof. 9. Lessee hereby represents, warrants, and covenants that (i) its representations, warranties, and covenants set forth in the Equipment Lease -Purchase Agreement are true and correct as though made on the date of execution of this Schedule, and (ii) sufficient funds have been appropriated by Lessee for the payment of all rental payments due under this Schedule during Lessee's current Fiscal Year. 10. Interest, if any, accruing from the Commencement Date to the actual date of funding shall be retained by Lessor as additional consideration for entering into this Schedule. CITY OF WEST COVINA, as Lessee By: Name: David N. Carmany Title: City Manager ALLIANCE FUNDING SOLUTIONS, as Lessor By: Nacre: Brad Chapman Title: President Exhibit B 114294133d2 SCHEDULE 1 TO EXHIBIT B [INSERT RENTAL PAYMENT SCHEDULE] Exlnbit B 114294133d2 EXIIIBIT C NOTICE AND ACKNOWLEDGEMENT OF SALE OF RENTAL PAYMENTS AND ASSIGNMENT OF LEASE AGREEMENT AND ESCROW AGREEMENT Alliance Funding Solutions, Inc. ("Lessor') and the City of West Covina ("Lessee')have entered into that certain Equipment Lease -Purchase Agreement dated [March _, 2021] (the "Lease Agreement'). Lessee hereby acknowledges that, pursuant to the terms of the Lease Agreement, Lessor has assigned its right, title, and interest in and to the Lease Agreement and, the Equipment to Santa Cruz County Bank, a financial institution duly incorporated under the laws of the state of California ("Assignee'). Lessee is hereby directed to pay any and all rental payments and other amounts due under the Lease Agreement to Assignee, as directed by Assignee. Lessee will also direct any and all correspondence, notice and servicing requests to the Assignee at the following address: Santa Cruz County Bank 75 River Street Santa Cruz, California 95060 Attention: Chris Van Zanen Email: cvanzanen@sccountybank.com By signing this Notice and Acknowledgment, Lessee agrees that it will pay all amounts due under the Lease Agreement without any set-off notwithstanding any defect 4 damage to or requisition of any of the Equipment leased under the Lease Agreement, any other similar or dissimilar event, any defense, set-off, counterclaim or recoupment arising out of any claim against Lessor or Assignee. By signing this Notice and Acknowledgment, Lessee warrants that its representations and warranties under the Lease Agreement are true and correct on the date hereof. Date: [March _, 2021] THE C= OF WEST COVINA, as Lessee By: Name: David N. Carmany Title: City Manager Exhibit C 114294133d2 EXHIBIT D-1 INSURANCE CERTIFICATION Alliance Funding Solutions, Inc. 12520 High Bluff Drive, Suite 345 San Diego, California 92130 [March _, 2021] Re: Equipment Lease -Purchase Agreement dated [March _, 2021] (the "Lease Agreement") In connection with the above referenced Lease Agreement, the City of West Covina, as lessee (the "Lessee') certifies that it has instructed the insurance agent named below: Name of Agent: f ] Address: f ] Phone: f ] to issue the following insurance coverages: Liability Insurance. Lessee is required to maintain public liability insurance, personal injury and property damage with policy limits of $3,000,000. The policy should be endorsed to name Santa Cruz County Bank (the Additional Insured') as an additional insured. 2. Casualty Insurance. Lessee is required to maintain all risk extended coverage, malicious mischief and vandalism insurance for the Equipment described in the above -referenced Equipment Schedule in an amount not less than the greater of $3,386,950.00 or the frill replacement cost of the Equipment. Such insurance shall be endorsed to name each of the Additional Insured and their successors and or assigns as a co -loss payee with respect to such Equipment. The required insurance should also be endorsed to give the Additional Insured at least 30 days' prior written notice of the effective date of any material alteration or cancellation of coverage, and an endorsement confirming that the interest of the Additional Insured shall not be invalidated by any actions, inactions, breach of warranty or conditions or negligence of Lessee. Exhibit D-1 114294133d2 Proof of insurance coverage will be provided to the Additional Insured prior to and/or comlrensurate with the later of the Cornarncement Date of the Lease or the delivery and acceptance of the Equipment. Very truly yours, CITY OF WEST COVINA, as Lessee Name: David N. Carmany Title: City Manager Exlflbit D-1 114294133d2 EX WIT D-2 INTENTIONALLY OMITTED F_) ibit D-2 114294133d2 EXHIBIT E ESSENTIAL USE CERTIFICATE' Alliance Funding Solutions, Inc. 12520 High Bluff Drive, Suite 345 San Diego, California 92130 [March _, 2021] Re: Equipment Lease -Purchase Agreement dated [March _, 2021] 1. What is the specific use of the Equipment? 2. What increased capabilities wiU the Equipment provide? 3. Why is the Equipment essential to your ability to deliver governmental services? 4. Does the Equipment replace existing equipment? (If so, please explain why you are replacing the existing equipment) 5. Why did you choose this specific Equipment? 6. For how many years do you expect to utilize the Equipment? Very truly yours, CITY OF WEST COVINA, as Lessee By: 1 Lessee to complete and return prior to Closing Date Name: David N. Carmany Title: City Manager Exhibit E 114294133d2 EXHIBIT F INCUMBENCY CERTIFICATE I, Lisa Sherrick, do hereby certify that I am the Assistant City Clerk of the City of West Covina ("Lessee'), which is a government organization duly established and validly existing as a government organization in the State of California. I hereby certify that, as of the date hereof, the individuals named below are the duly elected or appointed officers of the Lessee holding the offices set forth opposite their respective names. I further certify that: (i) The signatures set opposite their respective names and titles are their true and authentic signatures, and (ii) Such officers have the authority on behalf of such entity to: a. Enter into that certain Equipment Lease -Purchase Agreement dated [March 2021] (the "Lease Agreement'), between Lessee and Alliance Funding Solutions, Inc., as lessor, and that certain Escrow Agreement dated as of [March _, 2021] (the "Escrow Agreement') between Lessee, Alliance Funding Solutions, hic., and Santa Cruz County Bank, as escrow agent; and b. Execute certificate, documents, and agreements relating to the Lease Agreement and Escrow Agreement on behalf of Lessee. NAME TITLE SIGNATURE David N. Carmany City Manager IN WITNESS WHEREOF, I have duly executed this Certificate on behalf of the Lessee. Name: Lisa Sherrick Title: Assistant City Clerk Exhibit F 114294133d2 EXHIBIT G [Print on Counsel Letterhead] OPINION OF LESSEE'S COUNSEL2 Alliance Funding Solutions, Inc. 12520 High Bluff Drive, Suite 345 San Diego, California 92130 Re: That certain Equipment Lease -Purchase Agreement dated [ 1 Ladies and Gentlemen: As counsel to the [ ] (the "Lessee'), I have examined that certain Equipment Lease -Purchase Agreement dated as of [March , 2021] (the "Lease Agreement'), between the Lessee and Alliance Funding Solutions, Inc., as lessor CLessor), the form of the Escrow Agreement, together with the Disbursement Request Form and Certificate of Acceptance (collectively, the "Escrow Agreement'), and the proceedings taken by the Governing Body of the Lessee to authorize on behalf of the Lessee the execution and delivery of the Lease Agreement and the Escrow Agreement. The Lease Agreement and the Escrow Agreement are herein collectively referred to as the 'Transaction Documents." Based upon the foregoing examination and upon an examination of such other documents and matters of law as we have deemed necessary or appropriate, we are of the opinion that: 1. The Lessee is a political subdivision of the State of California with the full power and authority to enter into the Transaction Documents. 2. The Transaction Documents have each been duly authorized, executed, and delivered by the Lessee. Assuming due authorization, execution and delivery thereof by Lessor, the Transaction Documents constitute legal, valid, and binding obligations of the Lessee, enforceable against the Lessee in accordance with their respective terms, subject to any applicable bankruptcy, insolvency, moratorium or other laws or equitable principles affecting the enforcement ofcreditors' rights generally. 3. The Lessee has complied with any applicable public bidding requirements in connection with the Transaction Documents and the transactions contemplated thereby. By proper action, the Governing Body of the Lessee authorized the execution and delivery of the Transaction Documents and certain other matters, which actions were duly taken at a meeting that was held in 2Lessee's counsel to complete and return prior to Closing Date Exhibit G 114294133d2 compliance with all applicable laws relating to the holding of open and public meetings 5. No litigation or proceeding is pending or, to the best of my knowledge, threatened to restrain or enjoin the execution and delivery of or performance by the Lessee under the Transaction Documents or in any way to contest the validity of the Transaction Documents, to contest or question the creation or existence of the Lessee or the Governing Body of the Lessee or the authority or ability of the Lessee to execute or deliver the Transaction Documents or to comply with or perform its obligations thereunder. There is no litigation pending or, to the best of my knowledge, threatened seeking to restrain or enjoin the Lessee from annually appropriating sufficient funds to pay the rental payments or other amounts contemplated by the Lease Agreement. 6. The entering into and performance of the Transaction Documents do not and will not violate any judgment, order, law, or regulation applicable to the Lessee or result in any breach of, or constitute a default under, or result in the creation of any lien, charge, security interest, or other encumbrance upon any assets of the Lessee or on the Equipment (as such term is defined in the Lease Agreement) pursuant to any indenture, mortgage, deed of trust, bank loan or credit agreement, or other instrument to which the Lessee is a parry or by which it or its assets may be bound. Notwithstanding the foregoing, upon the due and timely Sling of a financing statement in the form delivered at closing, the Lessor will have a perfected security interest in the Equipment. This opinion may be relied upon by Lessor and purchasers and assignees of Lessor's interests in the Lease Agreement. Respectfully submitted, Exhibit G 114294133d2 EXIHBIT H INTENTIONALLY OMITTED Fxtubrt I 114294133d2 EX "IT I BANK -QUALIFIED DESIGNATION City of West Covina, as lessee, (the "Lessee') under that certain Equipment Lease - Purchase Agreement (the "Lease') dated as of [March _, 2021] to which this Designation is attached, hereby designates the Lease as a "qualified tax-exempt obligation" for the purposes and within the meaning of Section 265(b)(3) of the Internal Revenue Code of 1986, as amended. The Lessee hereby represents that the Lessee is a "qualified small issuer" in that it reasonably anticipates that the Lessee and other entities that the Lessee controls will not issue tax-exempt obligations (including the Lease) the aggregate principal amount of which exceed $10,000,000 during the calendar year in which the Lease is executed and delivered and interest commences to accrue thereunder; and that the Lease is being entered into and will be used in connection with public purposes. This Designation is attached to and made a part of the Lease and inures to the benefit of the Lessor and its successors and/or assigned. EXECUTED as of this _ day of March, 2021. CITY OF WEST COVINA, as Lessee Name: David N. Carmany Title: City Manager Exhibit I 114294133d2 EXHIBIT J TAX CERTIFICATE AND AGREEMENT including POST -ISSUANCE TAX COMPLIANCE PROCEDURES Dated: [ ] The following certificate is delivered in connection with the execution and delivery of the Equipment Lease -Purchase Agreement dated [March _, 2021] (the 'Lease Agreement"), entered into between the City of West Covina (the 'Lessee') and Alliance Funding Solutions, Inc. (the "Corporation"). Capitalized terms used herein have the meanings defined in the Lease Agreement. Section 1. In General. 1.1. This Certificate is executed for the purpose of establishing the reasonable expectations of Lessee as to future events regarding the financing of certain equipment (the "Equipment") to be acquired by Lessor and leased to Lessee pursuant to and in accordance with the Equipment Schedule executed under the Agreement (together with all related documents executed pursuant thereto and contemporaneously herewith, the "Financing Documents"). As described in the Financing Documents, Lessor shall apply $3,386,950.00 (the "Principal Amount") toward the acquisition of the Equipment and closing costs, and Lessee shall make Rental Payments under the terms and conditions as set forth in the Financing Documents. 1.2. The individual executing this Certificate on behalf of Lessee is an officer of Lessee delegated with the responsibility of reviewing and executing the Financing Documents, pursuant to the Governing Body's approval or other official action of Lessee adopted with respect to the Financing Documents, a copy of which has been delivered to Lessor. 1.3. The Financing Documents are being entered into for the purpose of providing fiords for financing the cost of acquiring, equipping and installing the Equipment which is essential to the governmental functions of Lessee, which Equipment is described in the Equipment Schedule. The Principal Amount will be deposited in escrow by Lessor on the date of issuance of the Financing Documents and held by Santa Cruz County Bank, as escrow agent (the "Escrow Agent") pending acquisition of the Equipment under the terns of that certain Escrow Agreement dated as of [March _, 2021] (the "Escrow Agreement'), by and between Lessor, Lessee and Escrow Agent. 1.4. Lessee wit timely file for each payment schedule issued under the Lease a Form 8038-G (or, if the invoice price of the Equipment under such schedule is less than $100,000, a Form 8038-GC) relating to such Lease with the Internal Revenue Service in accordance with Section 149(e) of the Internal Revenue Code of 1986, as amended (the "Code'). 1.5. Intentionally Omitted. Exhibit J 114294133d2 Section 2. Non -Arbitrage Certifications. 2.1. The Rental Payments due under the Financing Documents will be made with monies retained in Lessee's general operating fund (or an account or subaccount therein). No sinking, debt service, reserve or similar fund or account will be created or maintained for the payment of the Rental Payments due under the Financing Documents or pledged as security therefor. 2.2. There have been and will be issued no obligations by or on behalf of Lessee that would be deemed to be (i) issued or sold within fifteen (15) days before or after the date of issuance of the Financing Documents, (ii) issued or sold pursuant to a common plan of financing with the Financing Documents and (it) paid out of substantially the same source of funds as, or deemed to have substantially the same claim to be paid out of substantially the same source of funds as, the Financing Documents. 2.3. Lessee does not and will not have on hand any funds that are or will be restricted, segregated, legally required or otherwise intended to be used, directly or indirectly, as a substitute, replacement or separate source of financing for the Equipment. 2.4. No portion of the Principal Amount is being used by Lessee to acquire investments which produce a yield materially higher than the yield realized by Lessor from Rental Payments received under the Financing Documents. 2.5. The Principal Amount does not exceed the amount necessary for the governmental purpose for which the Financing Documents were entered into. Such funds are expected to be needed and fully expended for payment of the costs of acquiring, equipping and installing the Equipment. 2.6. Lessee does not expect to convey, sublease or otherwise dispose of the Equipment, in whole or in part, at a date which is earlier than the final Payment Date under the Financing Documents. Section 3. Disbursement of Funds; Reimbursement to Lessee. 3.1 It is contemplated that the entire Principal Amount will be used to pay the acquisition cost of Equipment to the vendors or manufacturers thereof or for any financial advisory or closing costs, provided that, if applicable, a portion of the principal amount may be paid to Lessee as reimbursement for acquisition cost payments already made by it so long as the conditions set forth in Section 3.2 below are satisfied. 3.2. Lessee shall not request that it be reimbursed for Equipment acquisition cost payments already made by it unless each of the following conditions have been satisfied: (a) If applicable, Lessee adopted aresolution or otherwise declared its official intent in accordance with Treasury Regulation § 1.150 2 (a copy of which will be provided to Lessor, if applicable, the 'Declaration of Official hntent ), wherein Lessee expressed its intent to be reimbursed from the proceeds of a borrowing for all or a portion of the cost of the Equipment, which expenditure was paid to the Vendor (as defined in the Lease F_xbbit J 114294133d2 Agreement) not earlier than sixty (60) days before Lessee adopted the Declaration of Official Intent; (b) The reimbursement being requested will be made by a written allocation before the later of eighteen (18) months after the expenditure was paid or eighteen (18) months after the items of Equipment to which such payment relates were placed in service; (c) The entire payment with respect to which reimbursement is being sought is a capital expenditure, being a cost of a type properly chargeable to a capital account under general federal income tax principles; and (d) Lessee will use any reimbursement payment for general operating expenses and not in a manner which could be construed as an artifice or device under Treasury Regulation § 1.148-10 to avoid, in whole or in part, arbitrage yield restrictions or arbitrage rebate requirements. Section 4. Use and Investment of Funds; Temporary Period. 4.1. Lessee has incurred or will incur, within six (6) months from the date of issuance of the Financing Documents, binding obligations to pay an amount equal to at least five percent (5%) of the Principal Amount toward the costs of the Equipment. An obligation is not binding if it is subject to contingencies within Lessee's control. The ordering and acceptance of the items of Equipment will proceed with due diligence to the date of final acceptance of the Equipment. 4.2. An amount equal to at least eighty-five percent (85%) of the Principal Amount will be expended to pay the cost of the Equipment by the end of the three-year period commencing on the date of this Certificate. No portion of the Principal Amount will be used to acquire investme nts that do not carry out the governmental purpose of the Financing Documents and that have a substantially guaranteed yield of four (4) years or more. 4.3. The reasonably expected economic lives of the components of the Equipment and the amount of the Principal Amount expected to be spent (cost) on each component are as follows: Component Expected Economic Life Cost The weighted average maturity of principal components of the rental payments payable under the Lease Agreement is [] years. 4.3. (a) Lessee covenants and agrees that it will rebate an amount equal to excess earnings on the Principal Amount deposited under the Escrow Agreement to the Internal Revenue Service if required by, and in accordance with, Section 148(4) of the Code, and make the annual determinations and maintain the records required by and otherwise comply with the regulations applicable thereto. Lessee reasonably expects to cause the Equipment to be acquired by f I Exhibit J 114294133d2 (b) Lessee will provide evidence to Lessor that the rebate amount has been calculated and paid to the Internal Revenue Service in accordance with Section 148(4) of the Code unless either: (i) Six -Month or Eighteen -Month Expenditure Exception Met: The entire Principal Amount and earnings thereon are expended on the Equipment by the date that is the six-month anniversary of the issuance of the Financing Documents or (it) the Principal Amount and earnings thereon are expended on the Equipment in accordance with the following schedule: At least fifteen percent (15%) of the Principal Amount and interest earnings thereon is applied to the cost of the Equipment within six months from the date of issuance of the Financing Documents; at least sixty percent (60%) of the Principal Amount and interest earnings thereon is applied to the cost of the Equipment within 12 months from the date of issuance of the Financing Documents; and one hundred percent (100%) of the Principal Amount and interest earnings thereon is applied to the cost of the Equipment prior to eighteen (18) months from the date of issuance of the Financing Documents; or (it) Small Issuer Exception: (A) Lessee is a governmental unit with general taxing powers; (B) the Lease is not a "private activity bond" under Section 141 ofthe Code; (C) at least ninety-five percent (95%) of the Principal Amount is used for the governmental activities of Lessee; and (D) the aggregate principal amount of all tax-exempt obligations (including the Lease) issued by Lessee and its subordinate entities, if any, during the current calendar year is not reasonably expected to exceed $5,000,000. Section 5. Escrow Account. The Financing Documents provide that the monies deposited in escrow shall be invested until payments to the vendor(s) or manufacturer(s) of the Equipment are due. Lessee will ensure that such investment will not result in Lessee's obligations under the Financing Documents being treated as an "arbitrage bond" within the meaning of Section 148(a) of the Internal Revenue Code of 1986, as amended (the "Code'), respectively. Any monies which are earned from the investment of these funds shall be labeled as interest earned. All such monies will be disbursed on or promptly after the date that Lessee accepts the Equipment. Lessee acknowledges that the provisions of Sections 2 and 4 herein are particularly applicable when the Principal Amount is funded into an Escrow Fund subject to the Escrow Agreement. Section 6. No Private Use; No Private Loan. 6.1. Lessee will not exceed the private use restrictions set forth in Section 141 of the Code. Specifically, Lessee will not permit more than 10% of the Principal Amount to be used for a Private Business Use (as defined herein) if, in addition, the payment of more than ten percent (10%) of the Principal Amount plus interest earned thereon is, directly or indirectly, secured by (i) any interest in property used or to be used for a Private Business Use or (ii) any interest in payments in respect of such property or derived from any payment in respect of property or borrowed money used or to be used for a Private Business Use. E'xbbit J 114294133d2 6.2 In addition, if both (A) more than five percent (5%) of the Principal Amount is used as described above with respect to Private Business Use and (B) more than five percent (5%) of the Principal Amount plus interest earned thereon is secured by Private Business Use property or payments as described above, then the excess over such five percent (5%) (the "Excess Private Use Portion) will be used for a Private Business Use related to the governmental use of the Equipment. Any such Excess Private Use Portion of the Principal Amount wf not exceed the portion of the Principal Amount used for the governmental use of the particular project to which such Excess Private Use Portion is related. For purposes of this paragraph 6.2, "Private Business Use" means use of bond proceeds or bond financed -property directly or indirectly in a trade or business carried on by a natural person or in any activity carried on by a person other than a natural person, excluding, however, use by a state or local governmental unit and excluding use as a member of the general public. 6.3. No part of the Principal Amount or interest earned thereon will be used, directly or indirectly, to make or finance any loans to non -governmental entities or to any governmental agencies other than Lessee. Section 7. No Federal Guarantee. 7.1. Payment of the principal or interest due under the Financing Documents is not directly or indirectly guaranteed, in whole or in part, by the United States or an agency or instrumentality thereof. 7.2. No portion of the Principal Amount or interest earned thereon shall be (i) used in making loans the payment of principal or interest of which are to be guaranteed, in whole or in part, by the United States or any agency or instrumentality thereof or (ii) invested, directly or indirectly, in federally insured deposits or accounts if such investment would cause the financing under the Financing Documents to be "federally guaranteed" within the meaning of Section 149(b) of the Code. Section 8. Miscellaneous. 8.1. Lessee shall keep a complete and accurate record of all owners or assignees of the Financing Documents in form and substance satisfactory to comply with the registration requirements of Section 149(a) of the Code unless Lessor or its assignee agrees to act as Lessee's agent for such propose. 8.2. Lessee shall maintain complete and accurate records establishing the expenditure of the Principal Amount and interest earnings thereon for a period of three (3) years after payment in full under the Financing Documents. 8.3. To the best of the undersigned's knowledge, information and belief, the above expectations are reasonable and there are no other facts, estimates or circumstances that would materially change the expectations expressed herein. 8.4. The Lessee's Tax Identification Number is: 95-6000810. Exhibit J 114294133d2 IN WITNESS WHEREOF, this Tax Certificate and Agreement, including Post -Issuance Tax Compliance Procedures, has been executed on behalf of Lessee as of [March _, 2021]. CITY OF WEST COVINA By Name: David N. Cannany Title: City Manager Exhibit J 114294133d2 EXHIBIT K ESCROW AGREEMENT LESSOR: ESCROW AGENT: Alliance Funding Solutions, Inc. Santa Cruz County Bank 12520 High Bluff Drive, Suite 345 75 River Street San Diego, Caldomia 92130 Santa Cruz, Calfomia 95060 LESSEE: City of West Covina 1444 W Garvey Avenue S West Covina, California, 91790 Attention: David N. Calmany and Sandra Galvez THIS ESCROW AGREEMENT (this `Escrow Agreement') is made as of [March _, 2021], between Alliance Funding Solutions, Inc. CLessor ), the City of West Covina ("Lessee"), and Santa Cruz County Bank (the "Escrow Agent). Lessor and Lessee have heretofore entered into that certain Equipment Lease -Purchase Agreement and Equipment Schedule both dated [March _, 2021] (the "Lease Agreement"). The Lease Agreement contemplates that Lessor will deposit with the Escrow Agent the amount of $3,386,950.00 (the "Deposit Amount"), for deposit into the escrow fiord (the "Escrow Fund'), to be held in escrow by the Escrow Agent and applied on the express terms and conditions set forth herein. Such deposit into the Escrow Fund, together with all interest and additions received with respect thereto, is to be applied from time to time to pay the vendor(s) or manufacturer(s) of the Equipment (as defined in the Lease Agreement) its invoice cost (a portion of which may, if required, be paid prior to final acceptance of the Equipment by Lessee). The Escrow Fund is to be held for the account and benefit of Lessee, and Lessee has granted to Lessor a first priority and perfected lien on and security interest in the Escrow Fund and any all proceeds, interest and other earnings thereon and investments therein to the Lessor by virtue of the execution of this Escrow Agreement and the Lease Agreement without the need for any additional filings or financing statements. The parties desire to set forth the terms on which the escrow is to be created and to establish the rights and responsibilities of the parties hereto. NOW, THEREFORE, the parties agree as follows: 1. The Escrow Agent hereby agrees to serve as escrow agent upon the terms and conditions set forth herein. 2. There is hereby created a special account to be known as the "City of West Covina Escrow Fund" (the `Escrow Fund') to be held in trust by the Escrow Agent for the purposes stated Exhibit K 114294133d2 herein, for the benefit of Lessor and Lessee, to be held, disbursed and returned in accordance with the terms hereof. The Escrow Agent agrees that the Escrow Fund shall be held irrevocably in trust for the account and benefit of Lessee and all interest earned with respect to the Escrow Fund shall accrue to the benefit of Lessee and shall be applied as expressly set forth herein. To the limited extent required to perfect the first, priority security interest granted by Lessee to Lessor in the cash and negotiable instruments from time to time held in the Escrow Fund, Lessor hereby appoints the Escrow Agent as its security agent, and the Escrow Agent hereby accepts the appointment as security agent, and agrees to hold physical possession of such cash and negotiable instruments on behalf of Lessor. 3. On the Commencement Date (as defined in the Lease Agreement), Lessor shall deposit with the Escrow Agent the amount of the Deposit Amount to be held by the Escrow Agent on the express terms and conditions set forth herein. The Escrow Agent agrees to accept the deposit of the Deposit Amount by Lessor with the Escrow Agent, and fimrther agrees to hold the amount so deposited together with all interest and other additions received with respect thereto in escrow on the express terms and conditions set forth herein. 4. The Escrow Agent shall at all times segregate the Escrow Fund into an account maintained for that express purpose, which shall be clearly identified on the books and records of the Escrow Agent as being held in its capacity as Escrow Agent. Securities and other negotiable instruments held in the Escrow Fund from firm to time shall be held or registered in the name of the Escrow Agent (or its nominee). The Escrow Fund shall not, to the extent permitted by applicable law, be subject to levy or attachment or lien by or for the benefit of any creditor of any of the parties hereto (except with respect to the security interest therein held by Lessor). 4. Lessee hereby directs the Escrow Agent to invest the cash held in the Escrow Fund from tune to time in a Santa Cruz County Bank non -interest bearing demand deposit account with no fees or costs or, in the event such fund is not at the time available, such other investments as Lessee may specify in writing, to the extent the same are at the time legal for investment of the funds being invested. Interest or other amounts earned and received by the Escrow Agent with respect to the Escrow Fund shall be deposited in and become a part of the Escrow Fund. No investment shall be made that would cause the Lease Agreement to be deemed to be an arbitrage bond within the meaning of Section 148(a) of the Internal Revenue Code of 1986, as amended. 5. Lessor and Lessee hereby authorize the Escrow Agent to take the following actions with respect to the Escrow Fund: a. From time to time, the Escrow Agent shall pay the vendor or manufacturer of the Equipment payments then due and payable, or reimburse Lessee for amounts that it has paid to the vendor or manufacturer of the Equipment, upon receipt of the following: (a) a duly executed Certificate of Acceptance and Payment Request in the form attached as Exhibit A hereto executed by the Lessor and Lessee, (b) the vendor(s) or manufacturer(s) invoice(s) specifying the acquisition price of the Exhibit K 114294133d2 Equipment described in the requisition request, and (c) any additional documentation required by Lessor. b. If Lessor provides to the Escrow Agent written notice of the occurrence of an Event of Default or an Event of Nonappropriation by Lessee under the Lease Agreement, the Escrow Agent shall thereupon promptly remit to Lessor the entire balance of the Escrow Fund. C. Upon receipt by the Escrow Agent of a duly executed Certificate of Acceptance and Payment Request identified as the final such request, the Escrow Agent shall transfer the then remaining balance of the Escrow Fund to Lessee, upon the express condition that Lessee hereby agrees to use such excess amount solely for capital expenditures as shall be approved by Lessor or, at the written direction of Lessor, for application against the interest component of the Lessee's payment obligation under the Lease Agreement, as provided therein, unless otherwise agreed by Lessor. 6. The Escrow Agent shall have no liability for acting upon any written instruction presented by Lessee and Lessor in connection with this Escrow Agreement that the Escrow Agent in good faith believes to be genuine. Furthermore, the Escrow Agent shall not be liable for any act or omission in connection with this Escrow Agreement except for its own gross negligence, willful misconduct, or bad faith. The Escrow Agent shall not be liable for any loss or diminution in value of the Escrow Find as a result of the investments made pursuant to Section 4. 7. To the extent authorized by law, Lessee hereby agrees to indemnify and save the Escrow Agent harmless against any liabilities that it may incur in the exercise and performance of its powers and duties hereunder and that are not due to the Escrow Agent's gross negligence or willful misconduct. No indemnification will be made under this Section or elsewhere in this Escrow Agreement for damages arising solely out of gross negligence, willful misconduct, or bad faith by the Escrow Agent, its officers, agents, employees, successors or assigns. 8. The Escrow Agent may at any time resign by giving at least 30 days' prior written notice to Lessee and Lessor, but such resignation shall not take effect until the appointment of the successor Escrow Agent. The substitution of another bank or trust company to act as Escrow Agent under this Escrow Agreement may occur by written agreement of Lessor and Lessee. In addition, the Escrow Agent may be removed at any time, with or without cause, by instrument in writing executed by Lessor and Lessee. Such notice shall set forth the effective date of the removal In the event of any resignation or removal of the Escrow Agent, a successor Escrow Agent shall be appointed by an instrument in writing executed by Lessor and Lessee. Such successor Escrow Agent shall indicate its acceptance of such appointment by an instrument in writing delivered to Lessor, Lessee and the predecessor Escrow Agent. Upon the effective date of resignation or removal, the Escrow Agent will transfer the Escrow Find then held by it to the successor Escrow Agent selected by Lessor and Lessee. Exhibit K 114294133d2 9. This Escrow Agreement shall terminate upon receipt by the Escrow Agent of the written notice from Lessor specified in Section 5(b) or Section 5(c) hereof. 10. All notices hereunder shall be in writing, sent by certified mail, return receipt requested, or by mutually recognized overnight carrier addressed to the other party at its respective address shown on page 1 of this Escrow Agreement or at such other address as such party shall from time to time designate in writing to the other parties; and shall be effective on the date or receipt. 11. This Escrow Agreement shall inure to the benefd of and shall be binding upon the parties hereto and their respective successors and assigns. No rights or obligations of the Escrow Agent under this Escrow Agreement may be assigned without the prior written consent of Lessor and Lessee. 12. This Escrow Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter hereof, and no waiver, consent, modification, or change of terms hereof shall bind any parry unless in writing signed by all parties. 13. The Escrow Agent may employ agents, attorneys and accountants in connection with its duties hereunder and shall not be liable for any action taken or omitted in good faith in accordance with the advice of counsel, accountants, or other skilled persons. 14. This Escrow Agreement shall be governed by and be construed and interpreted in accordance with the internal laws of the State of California. [Remainder of page intentionally left blank] Fxhiibit K 114294133d2 IN WITNESS WHEREOF, the parties hereto have caused this Escrow Agreement to be duly executed as of the day and year first above set forth. LESSOR: ALLIANCE FUNDING SOLUTIONS, LESSEE. CITY OF WEST COVINA INC. BY: BY: Name: Brad Chapman Name: David N. Cannany Title: President Title: City Manager ESCROW AGENT. SANTA CRUZ COUNTY BANK By: Name: Chris Van Zanen Title: AVP Relationship Manager Exhibit K 114294133d2 EXHIBIT A TO ESCROW AGREEMENT CERTIFICATE OF ACCEPTANCE AND PAYMENT REQUEST The following payment request is directed to Santa Cruz County Bank (the "Escrow Agent'), as escrow agent under that certain Escrow Agreement dated [March _, 2021] (the "Escrow Agreement"), between the City of West Covina ("Lessee'), Alliance Funding Solutions, Inc. (`'Lessor'), and the Escrow Agent. The Escrow Agent is hereby requested to pay from the Escrow Fuld established and maintained under the Escrow Agreement the amount set forth below to the named payee(s). The amount shown is due and payable under a purchase order or contract (or has been paid by and not previously reimbursed to Lessee). The equipment described below is part or all of the Equipment leased pursuant to that certain Equipment Lease -Purchase Agreement dated [March _, 2021] (the `Lease Agreement'), between Lessor and Lessee: DESCRIPTION OF UNITS OF QUANTITY EQUIPMENT AMOUNT PAYEE [-1 [ ] [ ] [ ] Lessee hereby certifies and represents to and agrees with Lessor as follows with respect to the Equipment described above: (1) the Equipment has been delivered to the location(s) set forth in the Lease Agreement; (ii) apresent need exists for the Equipment, which need is not temporary or expected to diminish in the near future; (iii) the Equipment is essential to and will be used by Lessee only for the purpose of perfonning one or more governmental functions of Lessee consistent with the permissible scope of Lessee's authority; (iv) the estimated useful life of the Equipment based upon the manufacturer's representations and Lessee's projected needs is not less than the term of the Lease Agreement; (v) Lessee has conducted such inspection and/or testing of the Equipment as it deems necessary and appropriate and hereby acknowledges that it accepts the Equipment for all purposes as of the date of this Certificate; (vi) the Equipment is covered by insurance in the types and amounts required by the Lease Agreement; (vii) no Event of Default or Event of Nonappropriation, as those terms are defined in the Lease Agreement, and no event that with the giving of notice or lapse of time or both, would become an Event of Default or an Event of Nonappropriation, has occurred and is continuing on the date hereof; and (viii) sufficient funds have been appropriated by Lessee for the payment of all rental payments due under the Lease Agreement duping Lessee's current Fiscal Year. Based on the foregoing, the Escrow Agent is hereby authorized and directed to fund the acquisition of the Equipment set forth above by paying, or causing to be paid, the manufacturer(s)/vendor(s) the amounts set forth on the attached invoices from the Escrow Fund held under the Escrow Agreement in accordance with its terms. The following documents are attached hereto and made a part hereof. (a) Original CERTIFICATE OF ACCEPTANCE AND PAYMENT REQUEST 114294133d2 Invoice(s) and (b) Copies of Certificate(s) of Ownership, designating Lessor as legal owner, and evidence of filing. [Remainder of page intentionally left blank] CERTIFICATE OF ACCEPTANCE AND PAYMENT REQUEST 114294133d2 IF REQUEST IS FINAL REQUEST, CHECK HERE Q. The undersigned hereby certifies that the items of Equipment described above, together with the items of Equipment described in and accepted by Certificates of Acceptance and Payment Requests previously filed by Lessee with Lessor constitute aIl of the Equipment subject to the Lease Agreement. Date: Approved: ALLIANCE FUNDING SOLUTIONS, INC., CITY OF WEST COVINA, as Lessee as Lessor By: By: Name: Brad Chapman Name: David N. Carmany Title: President Title: City Manager CERTIFICATE OF ACCEPTANCE AND PAYMENT REQUEST 114294133d2 SCHEDULE A TO ESCROW AGREEMENT NOTICE AND ACKNOWLEDGEMENT OF ASSIGNMENT OF ESCROW AGREEMENT Alliance Funding Solutions, Inc. ('Lessor'), City of West Covina ('Lessee'), and Santa Cruz County Bank ('Escrow Agent') have entered into an Escrow Agreement dated [March _, 2021] (the 'Escrow Agreement'), pursuant to which Lessor, or its Assignee (as defined below), has deposited cash into the Escrow Fund established thereunder, which funds are to be used by Lessee to acquire certain Equipment. Escrow Agent is hereby notified that Lessor has assigned all of its right, title, and interest in and to, but not its obligations under, the Escrow Agreement to Santa Cruz County Bank ("Assignee"), including, in particular, but without limitation, Lessor's security interest in the Escrow Fund and Lessor's right to approve all payment requests submitted by Lessee. Date: [March _, 2021 ] LESSOR: ALLIANCE FUNDING SOLUTIONS, INC. LESSEE: CITY OF WEST COVINA By: By: Name: Brad Chapman Name: David N. Carmany Title: President Title: City Manager ESCROW AGENT:SANTA CRUZ COUNTY BANK By: Name: Chris Van Zanen Title: AVP Relationship Manager 114294133d2 EXHIBIT L CITY COUNCIL MEETING MINUTES FROM MEETING HELD ON [ 1, 2021 114294133d2 EXHIBIT M IRS FORM 8038-G 114294133d2 EXIIIBIT N CLOSING MEMORANDUM $3,386,950.00 LEASE FOR SOLAR EQUIPMENT PURSUANT TO THAT EQUIPMENT LEAs&PURCHASE AGREEv ENT AND EQUIPMENT SCHEDULE THEREPO BOTH DATED [MARCH, 2021] BETWEEN CITY OF WEST COVINA, AS LESSEE, AND ALLIANCE FUNDING SOLUTIONS, INC., AS LESSOR Pre -Closing: Pre -Closing w171 be held at the Lessee's convenience, on or before [March _, 2021]. All documents will be executed and two originals will be overnighted to Alliance Funding Solutions, Inc., Attu.: Brad Chapman12520 High Bluff Drive, Suite 345, San Diego, California 92130, for delivery no later than 9:00 am on the morning of [March _, 2021] and held in trust until such time as the wires and original documents are released by the Parties. Closing: (1) By wire transfer and pending receipt of original, executed Lease Documents, on the morning of [March _, 2021], the Escrow Agent is authorized by Lessee to transfer via internal credit the Total Equipment Cost (as set forth below) to Escrow Agent, pursuant to a general ledger credit to the Escrow Account as follows: Bank Name: [ ] ABA No: [ ] Account No [ ] Account Name: [ ] (2) By wire transfer and pending receipt of original, executed Lease Documents, on the morning of [March _, 2021], the Escrow Agent is authorized by Lessee to transfer via wire the Issuance Costs (as defined below) to Lessor as follows: Bank Name: [ ] ABA Number: [ ] Account Number: [ ] Account Name: [Alliance Funding Solutions, Inc.] Alliance Funding Solutions, Inc. will confirm disbursement of funds to the Lessee's escrow account and then release all of the original documents held in trust to the investor and forward a copy to the Lessee. Sources and Uses of Funds: Principal Amount of Lease $[3,386,950.00] TOTAL SOURCES $[3,386,950.00] Total Equipment Cost: $[3,381,950.00] Issuance Costs: $5,000.00 114294133d2 TOTAL LEASE PROCEEDS $[3,386,950.00] Attest: CITY OF WEST COVINA By: Name: David N. Carmany Title: City Manager 114294133d2