Document:

Exhibit

EMPLOYMENT AGREEMENT
THIS AGREEMENT (the “Agreement”) is made and entered into effective the 1st day of January, 2017 (the “Effective Date”), by and between NORTHRIM BANK, a state‐chartered commercial bank, with its principal office in Anchorage, Alaska (the “Employer”), and Benjamin Craig (the “Executive”).
In consideration of the mutual promises made in this Agreement, the parties agree as follows:
1.    Employment.
Employer employs Executive and Executive accepts employment with Employer as its Executive Vice President, Chief Information Officer.
2.    Term.
The term of this Agreement (the “Term”) shall commence on the Effective Date and, unless terminated earlier pursuant to Section 5, shall continue through December 31, 2017; provided, however, that on January 1, 2018 and each succeeding January 1, the Term shall automatically be extended for one (1) additional year unless, not later than ninety (90) days prior to any such January 1, either party shall have given written notice to the other that it does not wish to extend the Term. In the event the Term is not extended, Executive shall have no rights to any of the severance payments or benefits continuation described in Section 5 except as specifically provided for in Section 5.a. 
3.    Duties.
The Executive will serve as Executive Vice President, Chief Information Officer of the Employer. Executive shall render such executive, management and administrative services and perform such tasks in connection with the affairs and overall operation of the Employer as is customary for his position, subject to the direction of Employer’s President and Board of Directors. Executive shall devote necessary time, attention and effort to Employer’s business in order to properly discharge his responsibilities under this Agreement.
4.    Compensation, Benefits, Reimbursement and Profit Sharing.
a.    Base Salary. In consideration for all services rendered by Executive during the term of this Agreement, Employer shall pay Executive an annual base salary (before all customary and proper payroll deductions) of $217,300 as adjusted from time to time (“Base Salary”). The Board of Directors of the Employer shall review Executive’s salary each year, in a manner consistent with that used for all management employees of the Employer, and in its sole discretion may adjust such salary commensurate with the Executive’s performance under this Agreement.
b.    Profit Sharing Plan. Under the Employer’s Profit Sharing Plan, Executive shall be eligible to receive an annual profit share (“Profit Share”) based on performance as defined by the Board of Directors. Executive will be classified in the Executive Vice President tier under the Plan’s Responsibility Factors. If Employer is required to prepare an accounting restatement due to “material noncompliance of the Employer”, the Employer will recover from the Executive any incentive compensation during the three (3) years prior to the date of the restatement, in excess of what would have been paid under the restatement. Executive’s signature on this Agreement authorizes Employer to offset or deduct from any compensation 

Employer may owe Executive, any excess payments (in whole or in part) that Executive may owe Employer due to such restatement(s). 
c.    Stock Incentive Plan. Executive shall be eligible for awards under the Employer’s Stock Incentive Plan. The type, timing and size of awards will be at the discretion of the Board of Directors.
d.    Supplemental Executive Retirement Plan (“SERP”) and Deferred Compensation Plan. Executive shall also be entitled to receive an annual contribution equal to five percent (5%) of annual Base Salary in accordance with the Employer’s Supplemental Executive Retirement Plan, as may be adjusted at the discretion of the Board of Directors from time to time. The Executive may also participate in the Employer’s Deferred Compensation Plan.
e.    Other Benefits. Throughout the term of this Agreement, Employer shall provide Executive with reasonable health insurance, disability and other employee benefits. Executive shall participate in all employee benefit plans and programs of Employer on a basis at least as favorable as that accorded to any other officer of Employer.
f.    Expenses. Employer shall reimburse Executive for his reasonable expenses (including, without limitation, travel, entertainment, and similar expenses) incurred in performing and promoting the business of Employer. Executive shall present from time to time itemized accounts and receipts of any such expenses as required by Employer, subject to any limits of company policy and the rules and regulations of the Internal Revenue Service, including the Internal Revenue Code, (referred to throughout this Agreement as “IRC” or the “Code”).
5.    Termination of Agreement.
a.    Termination Due to a Change of Control. If (A) Employer  or Northrim BanCorp, Inc. is subjected to a Change of Control (as defined in Section 5.f.(i)), and (B) either Employer or its assigns terminates Executive’s employment without Cause (either during the annual term of this Agreement or by refusing to extend this Agreement when the annual termination occurs every December 31) or Executive terminates his employment for Good Reason within 365 days of such Change of Control, then Employer shall pay Executive (i) all Base Salary earned and all reimbursable expenses incurred under this Agreement through such termination date; (ii) an amount equal to one (1) times Executive’s highest Base Salary over the prior three (3) years; and (iii) an amount equal to one (1) times Executive’s average Profit Share over the prior three (3) year period. The amounts described in Section 5.a.(i), (ii) and (iii) herein shall be paid no later than forty-five (45) days after the day on which employment is terminated. No payment will be made pursuant to Sections 5.a.(ii) and (iii) unless the Executive has signed an agreement, in a form acceptable to Employer, that releases and holds Employer harmless from all known and unknown claims and liabilities arising out of Executive’s employment with Employer or the performance of this Agreement (“Release Agreement”) and the Release Agreement has become irrevocable prior to the payment date.
(I)    Benefits Continuation. In addition, Executive shall be entitled to health and dental insurance benefits for a period of one (1) year following the termination of this Agreement. These benefits will be provided at Employer’s expense, but such period shall count towards the Employer’s continuation of coverage obligation under Section 4980B of the Internal Revenue Code (commonly referred to as “COBRA”).
(II)    Age and Service Credit. Executive shall also be entitled to receive age credit and credit for period of service towards all SERP plans for the remaining period of time covered by this Agreement. If Executive is hired by Employer, its assigns, any company in control of Employer, or any 

company controlled by Employer during the period covered by this Agreement, then Executive will be entitled to be treated for all purposes relating to future compensation, and benefits, as if this Agreement had never been terminated and as if Executive had performed his responsibilities as an Executive throughout the period originally covered by this Agreement.
b.    Termination by Employer Without Cause or by Executive for Good Reason. If Employer terminates Executive’s employment without Cause, or if Executive terminates his employment for Good Reason, Employer shall pay Executive in a lump sum: (i) all Base Salary earned and all reimbursable expenses incurred under this Agreement through such termination date; and (ii) an amount equal to   seventy-five percent (75%) of Executive’s highest Base Salary over the prior three (3) years. The amount described in 5.b.(i) herein shall be paid no later than forty-five (45) days after the day on which employment is terminated. The amount described in 5.b.(ii) herein shall be paid on the first day of the month following a period of six (6) months after the termination of employment, provided that the payment may be made sooner if either (i) the amount does not exceed the IRC Safe Harbor or (ii) at the Executive’s election, the amount described in Section 5.a.(ii) is reduced to fit within the IRC Safe Harbor. No payment will be made pursuant to Section 5.a.(ii) unless the Executive has signed a Release Agreement which has become irrevocable prior to the payment date. 
(I)    Benefits Continuation. In addition, Executive shall be entitled to health and dental insurance benefits for a period of nine (9) months following the termination of this Agreement. These benefits will be provided at Employer’s expense, but such period shall count towards the Employer’s continuation of coverage obligation under Section 4980B of the Internal Revenue Code (commonly referred to as “COBRA”).
(II)    Age and Service Credit. If Executive is hired by Employer, its assigns, any company in control of Employer, or any company controlled by Employer during the period covered by this Agreement, then Executive will be entitled to be treated for all purposes relating to future compensation, and benefits, as if this Agreement had never been terminated and as if Executive had performed his responsibilities as an Executive throughout the period originally covered by this Agreement.
c.    Termination by Employer for Cause or by Executive Without Good Reason. If Employer terminates Executive’s employment for Cause or if Executive terminates his employment without Good Reason, Employer shall pay Executive upon the effective date of such termination only such Base Salary earned and expenses reimbursable under this Agreement incurred through such termination date. In such case, Executive shall have no right to receive compensation or other benefits for any period after termination under this Agreement. 
d.    Termination Due to Disability. If Employer terminates Executive’s employment on account of any mental or physical Disability that prevents Executive from performing his essential job functions, even with reasonable accommodation, Executive shall be entitled to: (i) all Base Salary earned and reimbursement for expenses incurred under this Agreement through the termination date, (ii) full Base Salary for the year following the termination date (less the amount of any payments received by Executive during such one (1) year period under any Employer sponsored disability plan), and (iii) health and dental insurance benefits for a period of one (1) year following the termination date, which benefits will be provided at Employer’s expense, but such period shall count towards the Employer’s continuation of coverage obligation under Section 4980B of Code (commonly referred to as “COBRA”). All such compensation shall be paid Executive in one (1) lump sum the first day of the month following a period of six (6) months after Executive’s employment was terminated, provided that Executive has signed a Release Agreement which has become irrevocable prior to the payment date.

If any disputed termination under Section 5.c. is subsequently determined to have been without Cause, Executive's recovery shall be limited to those payments and benefits set out under Section 5.b. 
e.    Termination Upon Death of Executive. Executive’s employment under this Agreement shall be terminated upon the death of Executive. In such case, the Employer shall be obligated to pay to the surviving spouse of Executive, or if there is none, to the Executive’s estate: (i) that portion of Executive’s Base Salary that would otherwise have been paid to him for the month in which his death occurred, and (ii) any amounts due him pursuant to the Northrim Bank Savings Incentive Plan (401-K) and the Northrim BanCorp, Inc. Profit Sharing Plan, any supplemental deferred compensation plan, and any other death, insurance, employee benefit plan or stock benefit plan provided to Executive by the Employer, according to the terms of the respective plans.
f.    Termination Definitions.
(i)    “Change of Control.” For purposes of this Agreement, the term “Change of Control” shall mean the occurrence of one or more of the following events: (A) one (1) person or entity acquiring or otherwise becoming the owner of twenty-five percent (25%) or more of Northrim BanCorp, Inc.’s or Employer’s outstanding common stock; (B) replacement of a majority of the incumbent directors of Northrim BanCorp, Inc. or Northrim Bank by directors whose elections have not been supported by a majority of the Board of either company, as appropriate; (C) dissolution or sale of fifty percent (50%) or more in value of the assets, of either Northrim BanCorp, Inc. or Northrim Bank; or (D) a change “in the ownership or effective control” or “in the ownership of a substantial portion of the assets” of Employer, within the meaning of Section 280G of the Internal Revenue Code.
(ii)    “Cause.” For purposes of this Agreement, termination for “Cause” shall include termination because Executive: (A) continually fails to substantially perform his duties with the Employer; (B) is adjudged guilty of a felony, any crime involving dishonesty or breach of trust or any crime involving a breach of his fiduciary duties to the Employer; (C) is willfully and continually failing to comply with any law, rule, or regulation (other than traffic violations or similar offenses) or final cease and desist order of a regulatory agency having jurisdiction over Employer; (D) commits a material act of dishonesty or disloyalty related to the business of the Employer; or (E) is unable to substantially perform his duties with the Employer due to drug addiction or chronic alcoholism. Notwithstanding the foregoing, Executive shall not be deemed to have been terminated for Cause unless and until there shall have been delivered to him a copy of a resolution duly adopted by the affirmative vote of not less than three‐quarters (3/4) of the entire membership of the Employer’s Board of Directors at a meeting of the Board called for such purpose (after reasonable notice to Executive and an opportunity for him, together with his counsel, to be heard before the Board), finding that in the good faith opinion of the Board, he was guilty of conduct that constitutes Cause (as defined above) and specifying the conduct in detail.
(iii)    “Disability.” For purposes of this Agreement, “Disability” shall mean a medically diagnosed physical or mental impairment that may be expected to result in death, or to be of long, continued duration, and that renders Executive incapable of performing his essential job functions under this Agreement, even after he has been accorded reasonable accommodation. Employer’s Board of Directors, acting in good faith, in accordance with applicable law, shall make the final determination of whether Executive is suffering under any Disability (as herein defined) and, for purposes of making such determination, may require Executive to submit himself to a physical examination by a physician mutually agreed upon by the Executive and Employer’s Board of Directors at Employer’s expense.
(iv)    “Good Reason.” For purposes of this Agreement, termination for “Good Reason” shall mean termination by Executive as a result of any material breach of this Agreement by 

Employer. Good Reason shall include, but not be limited to: (A) a material reduction in Executive’s compensation defined as a reduction equal to or greater than five percent (5%) of Executive’s then annual base salary; (B) a material reduction in Executive’s duties and responsibilities, but not merely a change in title; or (C) relocation of Executive’s primary workplace by more than fifty (50) miles. “Good Reason” will only be deemed to occur if, within ninety (90) days after a material reduction or change described above first occurs, the Executive provides notice to the Employer of the existence of Good Reason and of the Executive’s intended termination of employment due to Good Reason, and the Employer does not remove the Good Reason condition within ninety (90) days after receiving such notice from the Executive. The Executive’s written notice must explain the basis on which the Executive believes Good Reason exists, the cure period, and the date on which the Executive intends to terminate employment, which must be no later than six (6) months after the existence of the Good Reason. The provisions of Section 5.f.(iv) are intended to comply with the Good Reason safe harbor provisions of Code Section 409A and applicable regulations.
(v)    Termination from Employment. A termination from employment under this Agreement shall mean a “Separation from Service” as interpreted in accordance with Code Section 409A and generally meaning the date on which the Executive is no longer performing services for the Employer. The Executive shall not have a Separation from Service while on military leave, sick leave, or other bona fide leave of absence if the period of such leave does not exceed six (6) months, or if longer, so long as the Executive retains a right to reemployment under an applicable statute or contract. A leave of absence constitutes a bona fide leave of absence only if there is a reasonable expectation that the Executive will return to perform services. 
6.    Limit on Severance Payment for Change of Control.
Notwithstanding anything above in Section 5.a., if the severance payment provided for in that Section, together with any other payments which the Executive has the right to receive from the Employer, would constitute a “parachute payment” (as defined in Section 280G(b)(2) of the Code), the severance payment shall be reduced. The reduction shall be in an amount so that the present value of the total amount received by the Executive from the Employer or its affiliates and subsidiaries will be 2.99 times the Executive’s base amount (as defined in Section 280G of the Code) and so that no portion of the amounts received by the Executive shall be subject to the excise tax imposed by Section 4999 of the Code (excise tax). Insofar as permitted by the Code, Employer shall reduce those elements of the severance pay package specified by the Executive. The determination as to whether any reduction in the severance payment is necessary shall be made by the Employer in good faith, and the determination shall be conclusive and binding on Executive. If through error or otherwise Executive should receive payments under this Plan, together with other payments the Executive has the right to receive from the Employer, in excess of 2.99 times his base amount, Executive shall immediately repay the excess to Employer upon notification that an overpayment has been made.
7.    Covenant Not To Compete.
a.    Executive agrees that for the term of this Agreement and for a period of nine (9) months after this Agreement is terminated pursuant to Section 5.a. or 5.b., Executive will not directly or indirectly be employed by, own, manage, operate, support, join, or benefit in any way from any business activity within the states where Employer operates that is competitive with Employer’s business or reasonably anticipated business of which Executive has knowledge. For purposes of the foregoing, Executive will be deemed to be connected with such business if the business is carried on by: (i) a partnership in which Executive is a general or limited partner; or (ii) a corporation of which Executive is a shareholder (other than a shareholder owning less than five percent (5%) of the total outstanding shares of the corporation), officer, director, employee or consultant, whether paid or unpaid. In the event of an alleged breach by Executive of this Section 7, the nine(9) month non-compete period shall be extended until such breach or violation has been duly cured, and shall 

restart so that Employer has received the intended benefit of nine (9) uninterrupted months of non-competition by Executive.
b.    The parties agree that if a trial judge with jurisdiction over a dispute related to this Agreement should determine that the restrictive covenant set forth above is unreasonably broad, the parties authorize such trial judge to narrow the covenant so as to make it reasonable, given all relevant circumstances, and to enforce such covenant. The provisions of this Section 7 shall survive termination of this Agreement.
8.    Nondisclosure of Confidential Information.
a.    During the term of Executive’s employment and thereafter, Executive agrees to hold Employer’s Confidential Information in strict confidence, and not disclose or use it at any time except as authorized by Employer and for Employer’s benefit. If anyone tries to compel Executive to disclose any Confidential Information, by subpoena or otherwise, Executive agrees immediately to notify Employer so that Employer may take any actions it deems necessary to protect its interests. Executive’s agreement to protect Employer’s Confidential Information applies both during the term of this Agreement and after employment ends, regardless of the reason it ends.
b.    “Confidential Information” includes, without limitation, any information in whatever form that Employer considers to be confidential, proprietary, information and that is not publicly or generally available relating to Employer’s: trade secrets (as defined by the Uniform Trade Secrets Act), know-how, concepts, methods, research and development, product, content and technology development plans, marketing plans, databases, inventions, research data and mechanisms, software (including functional specifications, source code and object code), procedures, engineering, purchasing, accounting, marketing, sales, customers, advertisers, joint venture partners, suppliers, financial status, contracts or employees. Confidential Information includes information developed by Executive, alone or with others, or entrusted to Employer by its customers or others.
9.    Non-Solicitation.
During the course of Executive’s employment and for a period of nine (9) months from the date of termination of employment for any reason, Executive shall not directly or indirectly solicit or entice any of the following to cease, terminate or reduce any relationship with Employer or to divert any business from Employer: (a) any person who was an employee of Employer during the nine (9) month period immediately preceding the termination of Executive’s employment; (b) any customer or client of Employer; or (c) any prospective customer or client of Employer from whom Executive actively solicited business within the last nine (9) months of Executive’s employment. In the event of an alleged breach by Executive of this Section 9, the nine (9) month non-solicitation period shall be extended until such breach or violation has been duly cured, and shall restart so that Employer has received the intended benefit of nine (9) uninterrupted months of non-solicitation by Executive.
10.    Non-Disparagement. 
Executive will not, during the Term or after the termination or expiration of this Agreement or Executive’s employment, make disparaging statements, in any form, about Employer’s officers, directors, agents, employees, products or services which Executive knows, or has reason to believe, are false or misleading.

11.    Mutual Agreement to Arbitrate.
a.    Except as provided in Section 11.b., in the event of a dispute or claim between Executive and Employer related to Employee’s employment or termination of employment, all such disputes or claims will be resolved exclusively by confidential arbitration in accordance with the National Rules for the Resolution of Employment Disputes of the American Arbitration Association (“AAA”). This means that the parties agree to waive their rights to have such disputes or claims decided in court by a jury. Instead, such disputes or claims will be resolved by an impartial AAA arbitrator whose decision will be final. 
b.    The only disputes or claims that are not subject to arbitration are any claims by Executive for workers’ compensation or unemployment benefits, and any claim by Executive for benefits under an employee benefit plan that provides its own arbitration procedure. Also, Executive and Employer may seek equitable relief (such as an injunction or declaratory relief) in court in appropriate circumstances. Specifically, Executive recognizes that Employer does not have an adequate remedy at law to protect its business from Executive’s breach of Sections 7, 8, or 9 of this Agreement, and therefore Employer shall be entitled to bring an action for a temporary restraining order and preliminary injunctive relief pre-arbitration, in the event of any actual or threatened breach by Executive of Sections 7, 8, or 9. In such court proceeding, Employer shall not be required to post a bond or other security, and Employer may also be awarded actual damages caused by Executive’s breach of Sections 7, 8, or 9 of this Agreement as well as repayment of all or a portion of any severance that Employer previously paid to Executive.  
c.    Except as provided by section 11.b., the arbitration procedure will afford Executive and Employer the full range of legal, equitable, and/or statutory remedies. Employer will pay all costs that are unique to arbitration, except that the party who initiates arbitration will pay the filing fee charged by AAA. Executive and Employer shall be entitled to discovery sufficient to adequately arbitrate their claims, including access to essential documents and witnesses, as determined by the arbitrator and subject to limited judicial review. In order for any judicial review of the arbitrator’s decision to be successfully accomplished, the arbitrator will issue a written decision that will decide all issues submitted and will reveal the essential findings and conclusions on which the award is based. 
12.    Miscellaneous.
a.    This Agreement contains the entire agreement between the parties with respect to Executive’s employment with Employer, and is subject to modification or amendment only upon agreement in writing signed by both parties.
b.    This Agreement shall bind and inure to the benefit of the heirs, legal representatives, successors and assigns of the parties, except that Employer’s rights and obligations may not be assigned.
c.    If any provision of this Agreement is invalid or otherwise unenforceable, in whole or in part, then such provision shall be modified so as to be enforceable to the maximum extent permitted by law. If such provision cannot be modified to be enforceable, the provision shall be severed from the Agreement to the extent it is unenforceable. All other provisions and any partially enforceable provisions shall remain unaffected and shall remain in full force and effect.
d.    In the event of any claim or dispute arising out of this Agreement, the party that substantially prevails shall be entitled to reimbursement of all expenses incurred in connection with such claim or dispute, including, without limitation, attorneys’ fees and other professional fees. This paragraph shall apply to expenses incurred with or without suit, and in any judicial, arbitration or administrative proceedings, including all appeals therefrom.

e.    Any notice required to be given under this Agreement to either party shall be given by personal service (i.e., via hand delivery) or by depositing a copy of such notice in the United States registered or certified mail, postage prepaid, addressed to the following address, or such other address as addressee shall designate in writing:

Employer:     

3111 “C” Street
Anchorage, AK 99503

Executive:    

Address on file with Northrim Bank. Human Resources Department.

f.    This Agreement shall in all respects, including all matters of construction, validity and performance, be governed by and construed and enforced according to the laws of the State of Alaska.
g.    This Agreement is intended to comply and shall be interpreted and construed in a manner consistent with the provisions of Internal Revenue Code Section 409A, including any rule or regulation promulgated thereunder. In the event that any provision of the Agreement would cause a benefit or amount provided hereunder to be subject to tax under the Internal Revenue Code prior to the time such amount is paid, such provision shall, without the necessity of further action by the signatories to this Agreement, be null and void as of the Effective Date.
h.    Notwithstanding any provision to the contrary in this Agreement, no payment of any type or amount of compensation or benefits shall be made or owed by Employer to Executive pursuant to this Agreement or otherwise to the extent that payment of such type or amount is restricted or prohibited by, is not permitted under, or has not received any required approval under, any applicable federal or state statute, regulation, rule, policy, order, opinion, interpretation or similar issuance, whether now in existence or hereafter adopted or imposed, including without limitation any provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act or regulations promulgated thereunder, 12 USC 1828(k) or 12 CFR Part 359. In the event that any payment made to Executive hereunder, under any prior employment agreement or arrangement or otherwise is required under any applicable federal or state statute, regulation, rule, policy, order, opinion, interpretation or similar issuance or under any agreement with or policy or plan of Employer to be paid back to Employer, Executive shall upon written demand from Employer promptly pay such amount back to Employer.

EMPLOYER:    
NORTHRIM BANK

By: /s/ David J. McCambridge    
David J. McCambridge
Its: Chairman of the Compensation Committee of the Board of Directors

EXECUTIVE:

/s/ Benjamin Craig    
Benjamin Craigex-10.1

 EXHIBIT 10.1
 

 AGREEMENT BETWEEN
 THE COUNTY OF MODOC
 IN THE STATE OF CALIFORNIA
 AND
 CORNERSTONE SUSTAINABLE ENERGY
 

 THIS AGREEMENT (”Agreement”) is made and entered into this 22nd day of November, 2016 (the “Effective Date”), by and between the County of Modoc hereinafter referred to as "County," and Receivable Acquisition and Management Corporation d/b/a Cornerstone Sustainable Energy ("Contractor"), each a “Party” and together the “Parties” hereto.
 

 RECITALS:
 

 WHEREAS, County desires to retain a person or firm to provide the equipment (“Equipment”), to supply consultation on installation, and to service said Equipment as described in the Scope of Work in Exhibit A;
 

 WHEREAS, Contractor warrants that it is qualified and agreeable to render the aforesaid services;
 

 NOW, THEREFORE, for and in consideration of the Agreement made, and the payments to be made by County, the Parties agree to the following:
 

 1.  Scope of Work 
 

 Contractor agrees to provide the equipment (“Equipment”) and services described in the Scope of Work outlined in Exhibit A attached hereto and by this reference made a part hereof.  The project herein (the “Project”) is the installation and commissioning of the Equipment as described in items 1 and 2 therein.
 

 2.  County Furnished Services  
 

 County agrees to provide: 
 

 a.
 Access to the Equipment to Contractor or its representatives for inspections and warranty work at such times as Contractor might need to continue to provide electrical power output from the installation.
 

 b.
 Hot Water flow of up to 20 GPM at 185°F from a hot source to the Equipment installation pad, and cooling water flow of 25 GPM at 75°F.
 

 c.
 Installation services and related equipment as follows:
 

 i.
 Site engineering or design (Contractor will consult on these items),
 

 ii.
 Site preparation, including but not limited to soil preparations, concrete pads, other footings, foundations, buildings or equipment stands, 
 

 iii.
 Both hydronic heat exchangers will be designed so that the engine internal heating water can be heated to 180F and the engine internal cooling water can be cooled to 80F, using the sources of heating and cooling water available.  The rate at which heat is supplied or rejected shall not exceed 400,000 BTU/Hr.
 

 
 

 iv.
 Piping, fittings, pumps, valves (and related parts as needed) and electrical wiring, cables or components external to the Equipment, as required to interface with site inflow or output of heat or electrical power, 
 

 v.
 Grid protection relay(s) and interconnection as required,
 

 vi.
 Insulation or anti-freeze protection,
 

 vii.
 Additional sound attenuation not offered by Contractor if needed,
 

 viii.
 Internet connection as required for remote monitoring of equipment, and
 

 ix.
 Off-loading if the Equipment at installation site, and related storage.
 

 3.  Budget 
 

 Contractor agrees to provide services as detailed in the Scope of Work not to exceed the Budget in Exhibit B attached hereto and by this reference made a part hereof.
 

 4. Term of the Agreement 
  
 This Agreement shall commence on the Effective Date and shall terminate upon completion or as detailed below, whichever is later. 
 

 5.  Schedule of Products and Due Dates
 

 Time is of the essence with respect to this Agreement.  Contractor shall make best efforts to complete the following milestones within the times shows below:
 

 a.
 Complete the manufacture of the Equipment and testing by County at the factory – 140 days after signing this Agreement and receipt of deposit from County.
 b.
 Arrival at installation site – 21 days after equipment testing.
 c.
 Startup/commissioning and acceptance by County – 20 days after shipment to installation site. 
 

 The Equipment will ship from Nevada.
 

 6.  Maximum Cost to County  
 

 Notwithstanding any other provision of this Agreement, in no event will the cost to County for the services to be provided herein exceed the maximum sum of $123,624 including direct non-salary expenses.
 

 7.  Payment
   
 a.
 Down Payment
 

 County shall transmit to Contractor a deposit as shown in Exhibit B, within thirty (30) days of the Effective Date.  County shall make such additional payments as outlined in Exhibit B.
 

 

 

 2
 

 
 

 b.
 Payment Schedule
 

 All payments under this Agreement shall be due within thirty (30) calendar days after the time indicated, except for payment for equipment or services additional to those in Exhibit B, in which case payment will be due within sixty (60) days of receipt by County of an invoice covering the equipment or service(s) rendered.
 

 c.
 Payer and Payee
 

 Payments are made by the “Modoc County Auditor’s Office”.  County’s checks shall be made payable to “Cornerstone Sustainable Energy” and mailed to:
 

 Cornerstone Sustainable Energy
 P.O. Box 3027
 New York, NY 10163
 

 8.  Confidentiality 
 

 Contractor provides the Equipment under the condition that County understands that the Equipment’s design, manufacture, and principles of operation involve trade secrets and other confidential intellectual property (“Confidential Information”), the disclosure of which could do significant harm to Contractor, its business, its investors, its employees, and other stakeholders.  Confidential Information may include, without limitation, technical, commercial, contractual, operational, and/or financial information.
 

 Contractor shall identify any Confidential Information as such if and when disclosed.  Confidential Information shall not include information that: (i) at the time of disclosure, is available to the general public; (ii) at a later date, becomes available to the general public through no breach of this Agreement on the part of County, and then only after such later date; (iii) County can demonstrate was in its possession before receipt; (iv) is disclosed to County without restriction on disclosure by a third party who had lawful right to disclose such information; or (v) is disclosed by County to a third party with the permission of Contractor.
 

 a)
 County agrees not to disclose the Confidential Information to others or to associates of County, except those employees who have a ‘need to know’ the Confidential Information. County shall protect the Confidential Information using the same degree of care, but no less than a reasonable degree of care, as County uses to prevent the disclosure of its own Confidential Information of like importance. 
 

 b)
 Unless otherwise agreed to by the Parties, this Agreement shall expire three (3) years after the Effective Date.  The nondisclosure obligations of County under this Agreement with respect to any Confidential Information will continue for a period of five (5) years from the date of each disclosure of the Confidential Information.
 

 c)
 Any materials or documents containing Confidential Information which have been furnished in accordance with this Agreement will be promptly returned, accompanied by all copies of such documentation, at the request of Contractor, or upon termination of this Agreement.
 

 All Confidential Information shall remain the sole and exclusive property of Contractor. In the event of County’s breach of its obligations hereunder, Contractor shall have the right to (i) demand the immediate return of all of its Confidential Information, (ii) recover its actual damages incurred by reason of such breach, including, but not limited to, its attorneys’ fees and costs of suit, (iii) obtain injunctive relief to prevent such breach or to otherwise seek appropriate redress, in which, in either event, no bond shall be required, and (iv) pursue any other remedy available at law or in equity.
 

 3
 

 
 

 Contractor understands that the County may make the cost and operational characteristics of the Equipment (inflow rate of heating and cooling water, temperatures, the output of electricity (with parasitic loads identified) and maintenance costs available to the general public.  This information shall not be deemed confidential.
 

 9.  Fiscal Accounting Requirements
 

 a.
 Accounting and Financial Methods
 

 Contractor shall establish a separate ledger account or fund for receipt and disbursement of funds for the Scope of Work funded by this Agreement with County. Expenditure details will be maintained by Contractor in accordance with the approved budget details using appropriate accounting practices as provided in Exhibit C, attached hereto and made a part hereof.
 

 b.
 Retention of Records
 

 Contractor shall retain all project records, including financial records, progress reports, and payment requests, for a minimum of three (3) years after the Project has been formally concluded, or final payment received, whichever is later.    Records for nonexpendable personal property (costing more than $5,000 per item) acquired with county funds shall be retained for three years after its final disposition.  The intent of records retention is to make available, if required by County, records relating to the project.
 

 c.
 Cost Match
 

 Contractor’s commitment of resources, as described in this Agreement, is a required expenditure for receipt of County funds. County funds will be released only if the required match amount or percentage is expended. Contractor must maintain accounting records detailing the expenditure of the match (actual cash and in-kind services) and provide complete documentation of expenditures as described under “Payment of Funds.”
 

 Invoices or applications for payment to the County shall be detailed and shall contain full documentation of all work performed and all reimbursable expenses incurred.  Where the Scope of Work is divided into various tasks, invoices shall detail the related expenditures accordingly.  Labor expenditures need documentation to support time, subsistence, travel and field expenses.  No expense will be reimbursed without adequate documentation.  This documentation will include, but not be limited to, receipts for material purchases, rental equipment and subcontractor work.
 

 Notwithstanding any other provision herein, payment may be delayed, without penalty, for any period in which the State or Federal Government has delayed distribution of funds that are intended to be used by County for funding payment to Contractor.  County understands that a delay in payment may affect Contractor’s schedule as outlined in Section 5. 
 

 For this project, Contractor agrees to provide cost match in the amount of $54,000.
 

 10.  Cost Disclosure for Report
 

 In accordance with California Government Code Section 7550, Contractor agrees to state in a separate section of any filed report it should prepare the dollar amount of this Agreement and any related contracts and subcontracts relating to the preparation of such report resulting from this Agreement.
 

 

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 11.  Publications - Legal Statement on Reports and Products
 

 No product or report produced as a result of work funded by this Agreement shall be represented to be endorsed by the California Energy Commission, and all such products or reports shall include the following statement:
 

 

 LEGAL NOTICE
 

 This document was prepared as a result of work sponsored by the California Energy Commission. It does not necessarily represent the views of the Energy Commission, its employees, or the State of California. The Energy Commission, the State of California, its employees, contractors, and subcontractors make no warranty, express or implied, and assume no legal liability for the information in this document; nor does any party represent that the use of this information will not infringe upon privately owned rights.
 

 

 12.  Amendments
 

 Changes to the Scope of Work, changes to specific line items in the budget, or both, may be made under certain conditions. Such changes must not alter the original scope or purpose of the Project or program and must not appreciably affect the value of the Project.
 

 Scope of Work changes and/or cumulative transfers among budget line items that exceed ten percent (10%) of the total basic cost as agreed to by the Parties will require advance written approval of the County project director.
 

 All requests for changes must be submitted directly to the County project director in writing and include a description of the proposed change, revised attachment(s), and the reasons for the change. If the change is approved, the affected sections of the Agreement will be amended and signed by the County’s authorized representative, subject to approval from the California Energy Commission Agreement Manager, the California Energy Commission Grants and Loans Office.
 

 

 13.  Standard of Performance
 

 Contractor, its subcontractors and their employees, in the performance of Contractor's work under this Agreement shall be responsible for exercising the degree of skill and care required by customarily accepted good professional practices and procedures used in Contractor’s field.
 

 Any costs for failure to meet the foregoing standard or to correct otherwise defective work that requires re-performance of the work, as directed by the California Energy Commission Agreement Manager, shall be borne in total by Contractor and not County. The failure of a project to achieve the performance goals and objectives stated in the Scope of Work is not a basis for requesting re-performance unless the work conducted by Contractor and/or its subcontractors is deemed by County to have failed the foregoing standard of performance.
 

 

 

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 In the event Contractor and/or its subcontractor(s) fail(s) to perform in accordance with the above standard:
 

 a.
 Contractor and/or its subcontractor(s) will re-perform, at its own expense, any task which was not performed to the reasonable satisfaction of the County Project Director. Any work re-performed pursuant to this paragraph shall be completed within the time limitations originally set forth for the specific task involved. Contractor and/or its subcontractor(s) shall work any overtime required to meet the deadline for the task at no additional cost to County;
 

 b.
 County shall provide a new schedule for the re-performance of any task pursuant to this paragraph in the event that re-performance of a task within the original time limitations is not feasible; and
 

 c.
 County shall have the option to direct Contractor and/or its subcontractor(s) not to re-perform any task which was not performed to the reasonable satisfaction of the County Project Director pursuant to application of (a) and (b) above. In the event County directs Contractor and/or its subcontractor(s) not to re-perform a task, County and Contractor shall negotiate a reasonable settlement for satisfactory work performed. No previous payment shall be considered a waiver of County’s right to reimbursement.
 

 Nothing contained in this section is intended to limit any of the rights or remedies which County may have under law.
 

 14.  Insurance
 

 a.
 General Liability
 

 Contractor shall maintain a commercial general liability insurance policy in the amount of $1,000,000.
 

 b.
 Vehicular
 

 Where the services to be provided under this Agreement involve or require the use of any type of vehicle by Contractor in order to perform said services, Contractor shall also provide comprehensive business or commercial automobile liability coverage including non-owned and hired automobile liability in the amount of $300,000.
 

 c.
 Named Insureds
 

 The County shall be named as an Additional Insured on all of the policies.   The Certificate Holder and Additional Insured should read as follows:
 

 County of Modoc
 204 South Court Street, Room 100
 Alturas, CA 96101
 

 d.
 Workers Compensation
 

 Contractor acknowledges that it is aware of the provisions of the Labor Code of the State of California which requires every employer to be insured against liability for workers’ compensation or to undertake self-insurance in accordance with the provisions of that Code and it certifies that it will comply with such provisions before commencing the performance of the work of this Agreement.
 

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 e.
 Proof of Insurance
 

 The insurer shall supply a Certificate of Insurance and endorsements signed by the insurer evidencing any and all such insurance coverages to County prior to commencement of work, and said certificate and endorsement shall provide for 30 day advance notice to County of any termination or reduction in coverage.
 

 Said policies shall remain in force through the life of this Agreement and shall be payable on a "per occurrence" basis.
 

 15.  Subcontracting and Assignment
 

 The rights, responsibilities and duties under this Agreement are personal to Contractor and may not be subcontracted, transferred or assigned without the express prior written consent of County.  This in no manner restricts Contractor’s ability to use contractors and subcontractors in fulfilling its requirements under the Agreement.
 

 16.  Licensing and Permits
 

 Contractor shall obtain such licenses as it may need to conduct the work as provided herein, and shall maintain the appropriate licenses throughout the life of this Agreement.  Contractor shall also obtain any and all permits which might be required by the work to be performed herein.
 

 17.  Books of Record and Audit Provision
 

 Contractor shall maintain on a current basis complete books and records relating to this Agreement.  Such records shall include, but not be limited to, documentation for all expenditures for which any reimbursement is sought.  The books and records shall be original entry books or suitable computer records.  In addition, Contractor shall maintain detailed payroll records including all subsistence, travel and field expenses, and canceled checks (or facsimiles thereof), receipts and invoices for all items for which any reimbursement is sought.  These documents and records shall be retained for at least three (3) years from the completion of this Agreement.
 

 Contractor will permit County to audit all books, accounts or records relating to this Agreement or all books, accounts or records of any business entities controlled by Contractor who participated in this Agreement in any way.  Any audit may be conducted on Contractor's premises or, at County's option, Contractor shall provide all books and records within a maximum of fifteen (15) days upon receipt of written notice from County.  Contractor shall refund any moneys erroneously charged.  If County ascertains that it has been billed erroneously by Contractor for an amount equaling five percent (5%) or more of the Budget as indicated in Section 3, Contractor shall be liable for the reasonable costs of the audit.  This paragraph applies to any contract which provides for reimbursement of expenses.
 

 18.  Title
 

 It is understood that any and all documents, information, computer disk, and reports concerning this project prepared by and/or submitted to Contractor by County shall be the property of County.  Contractor may retain reproducible copies of drawings and copies of other documents.
 

 In the event of the termination of this Agreement, for any reason whatever, Contractor shall promptly turn over copies of all information, writing, computer disk, and documents to County without exception or reservation.
 

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 Contractor shall transfer from computer hard drive to disk any information or documents stored on hard drive and provide County with said disk.  Reuse or modification of any such documents by County, without Contractor’s written permission, shall be at County's sole risk, and County agrees to indemnify and hold Contractor harmless from all claims, damages, and expenses, including attorney’s fees, arising out of such reuse by County or by others acting through County.
 

 19.  Certifications and Compliance:
 

 a.
 Federal, State and Municipal Requirements
 

 Contractor must obtain any required permits and shall comply with all applicable federal, State, and municipal laws, rules, codes, and regulations for work performed under this Agreement.
 

 b.
 Employment and Workplace Requirements
 

 In connection with the execution of this Agreement, the Contractor shall not discriminate against any employee or applicant for employment because of race, color, religion, age, sex, national origin, political affiliation, ancestry, marital status or disability.  Contractor hereby agrees to comply with all other nondiscrimination and workplace regulations and requirements, as detailed in Exhibit C, attached hereto and made a part hereof, as they may apply to Contractor. Under no circumstances may this policy or these policies require the employment or retention of unqualified persons or those who contravene such regulations.
 

 20.  Site Visits
 

 The California Energy Commission and/or its designees and/or County have the right to make site visits at reasonable times to review project accomplishments and management control systems and to provide technical assistance, if required. Contractor must provide, and must require any subcontractors to provide, reasonable facilities and assistance for the safety and convenience of the government representatives in the performance of their duties.  All site visits and evaluations must be performed in a manner that does not unduly interfere with or delay the work.
 

 21.  Budget Contingency Clause
 

 It is mutually agreed that this Agreement shall be of no further force and effect if the Budget Act of the State of California of the current year and/or any subsequent years covered under this Agreement does not appropriate sufficient funds to the California Energy Commission for the work identified in Exhibit A. In this event, County shall have no liability to pay any funds whatsoever to Contractor or to furnish any other consideration under this Agreement, and Contractor shall not be obligated to perform any provisions of this Agreement.
 

 If funding to the California Energy Commission for any fiscal year is reduced or deleted by the Budget Act for purposes of this program, County shall have the option to either: (1) cancel this Agreement with no liability occurring to County; or (2) offer an Agreement amendment to Contractor to reflect the reduced amount.
 

 In the event of Option (1), or in the event of Option (2) and such offered amendment is insufficient to cover the cost incurred to that date by Contractor, Contractor may take title to and remove its Equipment with no further liability to County.
 

 

 

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 22.  Public Works
 

 Contractor hereby agrees to meet all applicable requirements for any and all parts of this Project that are considered public works, as detailed in Exhibit D attached hereto and made a part hereof.
 

 23.  Attachments, References and OMB Circulars
 

 The Office of Management and Budget (OMB) Circulars and/or federal regulations identified in Exhibit E are incorporated by reference as part of this Agreement. The terms and conditions and any special conditions as detailed in this Agreement take precedence over the circulars and/or regulations.
 

 24.  Termination
 

 a.
 If Contractor fails to provide in any manner the services required under this Agreement or otherwise fails to comply with the terms of this Agreement or violates any ordinance, regulation or other law which applies to its performance herein, County may terminate this Agreement by giving fifteen (15) calendar days written notice to Contractor.  
 

 b.
 Contractor shall be excused for failure to perform services herein if such services are prevented by acts of God, strikes, labor disputes or other forces over which Contractor has no control.
 

 c.
 Either Party hereto may terminate this Agreement for any reason by giving thirty (30) calendar days written notice to the other Party.  Notice of Termination shall be by written notice to the other Party and be sent by registered mail.
 

 d.
 In the event of termination not the fault of Contractor, Contractor shall be paid for services performed to the date of termination in accordance with the terms of this Agreement.
 

 

 25.  Relationship between the Parties
 

 It is expressly understood that in the performances of the services herein, the Contractor, and the agents and employees thereof, shall act in an independent capacity and as an independent contractor and not as officers, employees or agents of County.
 

 26.  Amendment
 

 This Agreement may be amended or modified only by written agreement of the Parties.
 

 27.  Assignment of Personnel
 

 In the event that Contractor specifically names personnel to conduct certain duties under this Agreement, Contractor shall not substitute any personnel for those specifically named in its proposal unless personnel with substantially equal or better qualifications and experience are provided, acceptable to County, as evidenced in writing.
 

 28.  Jurisdiction and Venue
 

 This Agreement shall be construed in accordance with the laws of the State of California and the Parties hereto agree that venue shall a neutral location agreed to by the Parties.
 

 

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 29.  Indemnification
 

 Contractor agrees to indemnify, defend at its own expense, and hold County and the State of California harmless from any and all liabilities, claims, pure economic losses, damages, or expenses, including reasonable attorney’s fees to the proportional extent (or "to the extent"), arising from or caused by the negligence or willful misconduct of Contractor or its officers, agents, or employees in rendering services under this contract; excluding, however, such liabilities, claims, losses, damages, or expenses arising from County’s negligence or willful acts.
 

 30.  Attorney’s Fees
  
 If any Party hereto employs an attorney for the purpose of enforcing or construing this Agreement, or any judgment based on this Agreement, in any legal proceeding whatsoever, including insolvency, bankruptcy, arbitration, declaratory relief or other litigation, including appeals or rehearing, the prevailing Party shall be entitled to receive from the other Party reimbursement for all reasonable attorneys’ fees and costs.  If any judgment or final order be issued in that proceeding, said reimbursement shall be specified therein.
 

 31.  Warranties
 

 a.
 Contractor warrants that for one (1) year from commissioning, the Equipment provided hereunder will function in accordance with Contractor’s standard specifications for said Equipment and that Contractor is passing good title in said Equipment to the County of Modoc.
 

 b.
 Contractor shall
 

 i.
 repair or replace any part or parts of the Equipment that malfunction or fail to function satisfactorily as specified for one (1) year without charge to County;
 

 ii.
 pass through to County the full extent of any warranties provided by supplier to Contractor, and
 

 iii.
 for five (5) years from commissioning, replace or repair any part or parts of the Equipment that malfunction or fail to function satisfactorily due to defects in material or workmanship without charge to County.
 

 c.
 Contractor shall provide maintenance services to County covering normal wear and tear and periodic as well as emergency service on the Equipment for a minimum period of five (5) years after the initial one-year warranty period at an annual charge to be agreed upon by the Parties.
 

 d.
 Contractor shall offer to County maintenance services thereafter at reasonable rates consistent with rates offered to other clients of Contractor.
 

 e.
 Contractor shall provide remote monitoring using a local area network or the equivalent as part of this warranty and shall include the price of the remote monitoring equipment during the warranty period at no additional charge. Cellular or satellite options for remote monitoring may be used alternatively, but any additional cost can only be recouped by Contractor upon request.
 

 f.
 Replaced used, old or malfunctioning parts or components of the Equipment as replaced under this warranty are the property of Contractor; new parts are the property of Modoc County.
 

 

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 32.  Notices
 

 Notices to terminate, change or otherwise provide notice as provided in the Agreement shall be given to County as follows:
 

 Chester Robertson
 County Administrative Officer
 County of Modoc
 204 South Court Street, Room 100
 Alturas, CA 96101
 

 Notices shall be given to Contractor as follows:
 

 Thomas Telegades, CEO
 Cornerstone Sustainable Energy
 60 East 42nd Street, 46th Floor
 New York, NY 10165
 

 

 IN WITNESS WHEREOF, the Parties have executed this Agreement as of the Effective Date.
 

 

 	 	
	 County:
	  

	  
	 Approved as to Form:

	  
	  

	 By: /s/ Kathie Rhoads
	 By: /s/ Margaret Long

	 Kathie Rhoads
	 Margaret Long, County Counsel

	 Chair, Board of Supervisors
	  

	 County of Modoc
	  

	  
	  

	  
	  

	 Contractor:
	 ATTEST:

	  
	  

	 By: /s/ Thomas Telegades
	 By: /s/ Tiffany Martinez

	 Thomas Telegades, CEO
	 Tiffany Martinez

	 Cornerstone Sustainable Energy
	 Deputy Clerk of the Board

 

 

 

 

 

 

 

 

 

 

 

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