Loading...
HomeMy WebLinkAboutResolution No. 2026-62 | Reimbursement Agreement with AWS | Adopted 08/17/2026 RESOLUTION NO. 2026-62 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF GILROY TO ENTER INTO A REIMBURSEMENT AGREEMENT WITH AMAZON DATA SERVICES FOR RECYCLED WATER IMPROVEMENTS WHEREAS, In 2020, Amazon Data Services, Inc. (“Amazon”) filed an application with the City of Gilroy (City) for the construction of a data center project (“Project”); and, WHEREAS, the Project underwent review under the California Environmental Quality Act (CEQA), including preparation of an Environmental Impact Report; and, WHEREAS, one of the conditions of approval by the City for the Project is that Amazon construct, or pay for the construction of, certain recycled water facilities and improvements necessary for the use of recycled water by the Project, which is to be fully funded and paid for by Amazon; and, WHEREAS, Amazon is required to have all necessary recycled water infrastructure improvements built no later than two years from the issuance of the last Certificate of Occupancy of Phase 1 of the Project or the first Certificate of Occupancy of Phase 2 of the Project, whichever comes first; and, WHEREAS, part of the recycled water infrastructure improvements are to be built and installed at the South County Regional Wastewater Authority (“SCRWA”) facility, including construction of a new three-million-gallon storage reservoir, recycled water pump station, piping and appurtenances necessary to support the use of recycled water for the Project (the “Improvements”); and, WHEREAS, the SCRWA facility is a critical wastewater facility requiring twenty-four- hour operations with limited interruptions; and, WHEREAS, any and all construction activities at the SCRWA plant must be overseen and managed by SCRWA Reimbursement due to the critical nature of the facility; and, WHEREAS, SCRWA shall cause to be designed and constructed the necessary Improvements at the SCRWA facility, and Amazon shall fully fund all soft and hard costs associated with the project; and, WHEREAS, the City and Amazon desire to enter into a reimbursement agreement for the funding of the design and construction of the Improvements at the SCRWA facility. NOW, THEREFORE, BE IT RESOLVED that the City Council does hereby: 1. Adopt Resolution No. 2026-62 to approve the Reimbursement Agreement between the City and Amazon in the general form attached hereto as Exhibit A; and, Docusign Envelope ID: A1610F65-2351-8AC2-8261-F818C74407A3 Resolution No. 2026-62 Reimbursement Agreement with AWS Resolution City Council Regular Meeting | August 17, 2026 Page 2 of 3 2. Authorize the City Administrator to take all actions to execute the agreement as necessary or appropriate to give effect to this resolution. PASSED AND ADOPTED this 17 day of August 2026 by the following roll call vote: AYES: COUNCIL MEMBERS: BRACCO, CLINE, FUGAZZI, HILTON, MARQUES, RAMIREZ, BOZZO NOES: COUNCIL MEMBERS: NONE ABSTAIN: COUNCIL MEMBERS: NONE ABSENT: COUNCIL MEMBERS: NONE APPROVED: ______________________________ Greg Bozzo, Mayor ATTEST: Kim Mancera, City Clerk Docusign Envelope ID: A1610F65-2351-8AC2-8261-F818C74407A3 Resolution No. 2026-62 Reimbursement Agreement with AWS Resolution City Council Regular Meeting | August 17, 2026 Page 3 of 3 CERTIFICATE OF THE CLERK I, KIM MANCERA, Interim City Clerk of the City of Gilroy, do hereby certify that the attached Resolution No. 2026-62 is an original resolution, or true and correct copy of a City Resolution, duly adopted by the Council of the City of Gilroy at a Regular Meeting of said held on Council held Monday, August 17, 2026, with a quorum present. IN WITNESS WHEREOF, I have hereunto set my hand and affixed the Official Seal of the City of Gilroy this Tuesday, August 18, 2026. ____________________________________ Kim Mancera City Clerk of the City of Gilroy Docusign Envelope ID: A1610F65-2351-8AC2-8261-F818C74407A3 -1- 4925-1933-7403v12 ALF\04706240 REIMBURSEMENT AGREEMENT FOR CONSTRUCTION OF A RECYCLED WATER RESERVOIR This REIMBURSEMENT AGREEMENT FOR CONSTRUCTION OF A RECYCLED WATER RESERVOIR (“Agreement”) is made and entered into effective this _______day of _____________, 2026 (“Effective Date”) by and between Amazon Data Services, Inc., a Delaware corporation (along with any related Amazon entities, “Amazon”) and the City of Gilroy, a California municipal corporation (“City” or “Gilroy”) as follows: WHEREAS, Amazon currently has a project underway to construct a data center (the “Data Center”) in the City of Gilroy, located on a 56-acre undeveloped parcel (the “Amazon Site”) located at the southeast end of Arroyo Circle, identified as Assessor’s Parcel Number 841-69-044. As approved, the Data Center was conditioned by City to use recycled water. The recycled water that will be used at the Data Center is produced at the wastewater treatment plant owned and operated by the South County Regional Wastewater Authority, a Joint Exercise of Powers Authority (“SCRWA”), which produces recycled water from the wastewater treated at the SCRWA Wastewater Treatment Plant (the “SCRWA Facility”) for distribution by the Santa Clara Valley Water District to end-users; and WHEREAS, Amazon filed an application in 2020 for an Architectural and Site Permit to allow construction of the Data Center. City prepared a full Environmental Impact Report (“EIR”) pursuant to the California Environmental Quality Act (“CEQA”). On August 12, 2024, the draft EIR was released for public comment and was circulated for a 45-day public review period. On July 3, 2025, the City adopted CEQA Findings with a Statement of Overriding Consideration certifying the EIR and approved the Architectural and Site Review Permit for the project; and WHEREAS, Once completely built out, the Data Center facility will require City potable water and recycled water. Water requirements and availability were extensively analyzed in the EIR. The bulk of the Data Center’s water use (e.g., industrial and process water use, landscaping and other allowed uses) will be provided by recycled water. As a condition of approval of its Data Center project, Amazon is obligated to either construct, or pay for the construction of, certain improvements to facilitate the production of recycled water at the SCRWA Facility and the delivery of recycled water to users thereof, including the Amazon Site. This will require certain improvements (the “Recycled Water Improvements”) to be built at the SCRWA Facility and at the Amazon Site, as well as distribution pipelines between the two sites, all hard and soft costs related thereto are to be paid for by Amazon; and WHEREAS, One of the Recycled Water Improvements is required in the Santa Clara Valley Water District’s South County Recycled Water Master Plan (the “Master Plan”), adopted in 2024, was the installation of a reservoir and associated facilities at the SCRWA Facility for recycled water. That particular Recycled Water Improvement, which is the subject of this Agreement and the MOU (as defined below), is a new Three Million Gallon reservoir and associated improvements to the existing pump station and related ancillary improvements, including, but not limited to, new piping, valving, inlet/outlet structures, ventilation systems, SCADA, electrical systems, motors, pumps, and other supporting structures and features (collectively, the “Reservoir”) to be built, installed, and operated at the SCRWA Facility. Construction and operation of the Reservoir is for the benefit of SCRWA to increase reliability of recycled water availability to recycled water users consistent with the Master Plan; and WHEREAS, As approved by City, the Data Center project will be constructed in two phases and will use both domestic and recycled water, as specified in the conditions of approval (“Conditions of Approval”) for the approved Architectural and Site Permit. As specified in the Conditions of Approval, Phase 1 will initially be allowed to use City water for domestic and industrial uses on a temporary basis. Docusign Envelope ID: A1610F65-2351-8AC2-8261-F818C74407A3 -2- 4925-1933-7403v12 ALF\04706240 Amazon must complete the Recycled Water Improvements no later than two years from the issuance of the last Certificate of Occupancy for Phase 1 or the first Certificate of Occupancy for Phase 2, whichever occurs first. Once the Recycled Water Improvements are in place and operational, the Data Center must then convert to recycled water for all of its industrial water needs for both phases; and WHEREAS, Because the SCRWA Facility processes wastewater for the Cities of Morgan Hill and Gilroy, it is deemed critical infrastructure, whose on-going operations should not be disrupted or otherwise taken offline for any significant period of time. Due to the risk of disrupting treatment plant operations, SCRWA has historically managed the construction of all improvements within the SCRWA Facility, including the existing recycled water storage and distribution facilities, instrumentation, piping and pumps on the SCRWA Facility; and WHEREAS, The designing, permitting, approval, bidding and construction process for the construction, installation and implementation of the Reservoir will require a coordinated effort among SCRWA, the City, and Amazon. SCRWA has the particular technical expertise and experience to design and construct the Reservoir on the SCRWA Facility. This specialized knowledge of the SCRWA Facility makes the SCRWA uniquely qualified to design and construct improvements on the SCRWA Facility. Since the Reservoir will be constructed on the SCRWA Facility, and SCRWA oversees all construction at the SCRWA Facility, it has been determined that SCRWA will be in charge of designing and constructing the Reservoir, with all hard and soft costs incurred by SCRWA and City in connection therewith to be paid for by Amazon pursuant to this Agreement, as administered by City as the Data Center permitting authority; and WHEREAS, City and SCRWA will enter into a memorandum of understanding (“MOU”) concurrently herewith to address the design and construction process and the reimbursement of all hard and soft costs incurred by City and SCRWA in connection with designing and constructing the Reservoir. NOW THEREFORE, in consideration of the foregoing recitals and the mutual conditions and covenants contained herein, the parties hereto agree as follows: 1. Purpose; Term of Agreement; Scope of Costs Eligible for Payment or Reimbursement. (a) Purpose. City and Amazon hereby agree and acknowledge that the purpose of this Agreement is to memorialize the parties’ rights and obligations with respect to the design, permitting and approval processes for the design, construction, installation and implementation of the Reservoir. (b) Term of Agreement. The term of this Agreement shall commence on the Effective Date and remain in effect until the earliest of the following (the "Term"): (i) the date that is six (6) months following the date that City notifies Amazon that final acceptance of the construction of the Reservoir has occurred, as determined by SCRWA pursuant to the MOU; or (ii) the Negotiation Termination Date (as defined in Section 1(d)). (c) Scope of Costs Eligible for Payment or Reimbursement. “Reservoir Costs” means any and all hard and soft costs incurred by SCRWA and City in connection with the Reservoir, including: (i) contractor, subcontractor, and supplier costs; (ii) costs incurred by staff for SCRWA and City, including the City Attorney for Gilroy and the Legal Counsel for SCRWA, and including all staff time to review plans and documents and manage the process; (iii) labor, materials, Equipment, and rental costs; (iv) mobilization, site preparation, Docusign Envelope ID: A1610F65-2351-8AC2-8261-F818C74407A3 -3- 4925-1933-7403v12 ALF\04706240 excavation and grading costs; (v) concrete, structural, mechanical, electrical and plumbing costs; (vi) testing, inspection, and commissioning; (vii) permits, fees, and governmental charges; (viii) surveying, geotechnical, environmental, engineering, permitting, bidding and design costs; (ix) construction management and project management costs; (x) legal, accounting, and insurance costs allocable to the Reservoir; (xi) bonds and bond premiums; (xii) consultant costs; (xiii) change orders, unforeseen conditions, scope gaps, escalation, and other costs necessary to complete the construction and installation of the Reservoir; (xiv) supervisory fees; and (xv) any other costs reasonably necessary to complete the Reservoir in accordance with the approved plans and specifications and bid. Notwithstanding the foregoing, Amazon's aggregate reimbursement obligation for all Reservoir Costs shall not exceed the sum of the Design Budget and the Construction Budget (each as finally determined pursuant to Sections 3(a) and 5(a), respectively, including the thirty percent (30%) contingency) (the "Reservoir Cost Cap"). Any increase to the Reservoir Cost Cap shall require Amazon's prior written consent. (d) Termination. In the event Amazon does not proceed with the data center, Amazon may terminate this Agreement at any time by providing at least ninety (90) days prior written notice to City (the "Termination Notice"). Such termination shall become effective as of the date specified in the Termination Notice (the "Negotiation Termination Date"), which shall be at least ninety (90) days following the date of such Termination Notice. If Amazon terminates this Agreement pursuant to this Section 1(d), then Amazon's sole liability and City's exclusive remedy shall be payment from the Reservoir Fund in the amount of (i) any outstanding amounts invoiced by City pursuant to Section 6(a) as of the Negotiation Termination Date; plus (ii) any further Reservoir Costs under this Agreement that City or SCRWA actually incurred prior to the Negotiation Termination Date, or which City or SCRWA could not have avoided after receiving the Termination Notice, in each case evidenced by reasonable documentation; plus (iii) any further Reservoir Costs under this Agreement that City or SCRWA reasonably anticipates will be incurred to place the Reservoir into (A) a state of “safe and stable” condition or (B) the condition existing prior to date of any construction under this Agreement, in either case in City’s sole and absolute discretion. Immediately following the Negotiation Termination Date, City will use commercially reasonable efforts (and shall instruct SCRWA to use commercially reasonable efforts) to minimize the amount of any Reservoir Costs it incurs, cease all Services and procurement of Equipment, and determine the amount of all Reservoir Costs due to be reimbursed by Amazon, if any. In the event Amazon has received the first Certificate of Occupancy for the Data Center, this Section 1(d) shall be null and void and have no further force or effect. Amazon’s reimbursement and payment obligations under this Section 1(d) shall survive the expiration or sooner termination of this Agreement. 2. Establishment of the Fund; Fund Administration. City shall establish a dedicated, interest-bearing fund (the “Reservoir Fund”), which shall be used solely for payment or reimbursement of Reservoir Costs to City and SCRWA and for no other purpose. Funds in the Reservoir Fund shall be maintained separately and shall not be commingled with any other funds, and any interest accrued on such funds shall be for the benefit of Amazon. City shall administer the Reservoir Fund and disburse funds for Reservoir Costs incurred by City and SCRWA. Any amounts that remain in the Reservoir Fund following the expiration or sooner termination of the term of this Agreement, shall be refunded to Amazon within fifteen (15) business days thereafter. Docusign Envelope ID: A1610F65-2351-8AC2-8261-F818C74407A3 -4- 4925-1933-7403v12 ALF\04706240 3. Design Budget Funding. (a) Design Budget. Pursuant to the MOU, following the Effective Date, SCRWA will prepare (or caused the preparation of) an estimated budget for the estimated Reservoir Costs expected to be incurred in connection with the design phase of the Reservoir, including the preparation of any plans and specifications, up to the point where bids have been received and SCRWA is ready to award a construction contract, plus an additional contingency equal to thirty percent (30%) of such estimated Reservoir Costs (“Design Budget”). (b) Design Budget Deposit. Within ten (10) days after Amazon receives notice from City that the Design Budget has been determined, Amazon shall remit payment to City in the amount of the total Design Budget (the “Design Deposit”), and City shall deposit such Design Deposit into the Reservoir Fund. 4. Bidding Process; Construction of Reservoir. Pursuant to the MOU, SCRWA will (i) solicit, receive, evaluate and negotiate bids for the permitting and approval processes and the construction, installation and implementation of the Reservoir, and (ii) supervise the public bidding process, resulting in the selection of the contractor which will receive the award of the contract to construct the Reservoir. Thereafter, pursuant to the MOU, SCRWA will oversee and manage the construction of the Reservoir. 5. Construction Budget Funding. (a) Construction Budget. Pursuant to the MOU, based on the chosen bid, SCRWA will prepare or cause to be prepared an estimated budget of all Reservoir Costs expected be incurred in connection with the construction phase of the Reservoir, including permitting and approval processes and the construction, installation and implementation of the Reservoir, plus an additional contingency equal to thirty percent (30%) of such estimated Reservoir Costs (“Construction Budget”). The thirty percent (30%) contingency may be used for Reservoir Costs, including change orders, unforeseen conditions, scope gaps, escalation, and other Reservoir Costs necessary to complete the construction and installation of the Reservoir. (b) Construction Budget Amount. Within ten (10) days after Amazon receives notice from City that the Construction Budget has been determined, Amazon shall remit payment to City in an amount sufficient to fund the Construction Budget (the “Construction Deposit”) such that City shall deposit such Construction Deposit into the Reservoir Fund. 6. Disbursement of Funds; Additional Payments. (a) Disbursement of Funds. Pursuant to the MOU, SCRWA and City will submit requests to City for Reservoir Costs incurred by SCRWA and City, respectively, and City shall disburse funds to (i) SCRWA for such Reservoir Costs and (ii) City for such Reservoir Costs. In no event shall funds in the Reservoir Fund be used for any purpose other than the payment or reimbursement of Reservoir Costs as expressly provided in this Agreement. Amazon shall have the right, upon reasonable prior written notice to City, to audit or inspect the books, records, and accounts of City relating to Reservoir Costs and disbursements from the Reservoir Fund. Docusign Envelope ID: A1610F65-2351-8AC2-8261-F818C74407A3 -5- 4925-1933-7403v12 ALF\04706240 (b) Additional Payments for Reservoir Costs. Upon written notice from City, Amazon shall remit payment to City for deposit into the Reservoir Fund within ten (10) days after Amazon’s receipt of such request to bring the balance in the Reservoir Fund to an amount City reasonably anticipates will be necessary and sufficient to allow the parties to complete the portions of the work covered by the Design Budget or the Construction Budget, as the case may be, which shall also include the contingency equal to thirty percent (30%) of such Design Budget or Construction Budget; provided, however, that in no event shall the aggregate of all amounts deposited into the Reservoir Fund (including the Design Deposit, the Construction Deposit, and any additional payments under this Section 6(b)) exceed the Reservoir Cost Cap without Amazon's prior written consent. 7. Supply Chain Standards. City shall, and shall cause SCRWA and their respective contractors and subcontractors to, comply with the Supply Chain Standards to the extent applicable to their activities in connection with the Reservoir. If any updates made to the Supply Chain Standards after the Effective Date are unacceptable to City, City may provide notice to Amazon of the same, including a full explanation. Following Amazon's receipt of such notice, the Parties will work together in good faith for a reasonable period to agree to any exceptions from the updates to the Supply Chain Standards. 8. Insurance. During the Term, pursuant to the MOU, SCRWA will cause its professional service provider(s) and contractor(s) to maintain insurance coverage as needed to secure its obligations and potential liabilities under the MOU. Such insurance shall include at least the coverages set forth in Exhibit C to this Agreement, the limits of which may be satisfied by combining primary liability and umbrella excess liability coverage. The insurance policies required under this Agreement must: (a) be issued by companies with a rating of A-/VII or better in the current Best's Insurance Reports published by A.M. Best Company, Inc.; (b) not be cancelled or have coverage reduced without at least thirty (30) days' prior written notice to Amazon; (c) for Commercial General Liability only, name Amazon, and its Affiliates to which this Agreement is assigned in accordance with Section 12 below, as additional insureds; (d) provide coverage on an occurrence basis; (e) waive any insurer right of subrogation against Amazon and its Affiliates and their respective officers, directors, employees, agents, and contractors; and (f) provide primary coverage, without any right of contribution from any other insurance that Amazon may have. City shall deliver to Amazon certificates of insurance for the required insurance coverages within fifteen (15) business days following the effective date of the applicable contract with the professional service provider or contractor, and at each subsequent policy renewal upon Amazon's request. 9. Indemnification by City. City shall indemnify, defend, and hold harmless Amazon and its Affiliates and their respective officers, directors, employees, agents, successors, and assigns (collectively, the "Amazon Indemnified Parties") from and against all third party claims, third party demands, injuries to third parties (including personal injury, death, and property damage) and legal proceedings brought by third parties and all damages, losses, costs, and expenses (including reasonable attorneys' fees) in connection with such claims, demand, injuries and legal proceedings to the extent arising out of or resulting from: (a) the fraud, negligence or willful conduct of City, SCRWA, or any of their respective officers, directors, Affiliates, employees, agents, representatives, or contractors in connection with performance of their obligations under this Agreement or the MOU; (b) any violation of applicable law arising from the activities of City or any of their respective officers, directors, Affiliates, employees, agents, representatives, or Docusign Envelope ID: A1610F65-2351-8AC2-8261-F818C74407A3 -6- 4925-1933-7403v12 ALF\04706240 contractors in connection with the performance of their obligations under this Agreement or the MOU; (c) the failure by City to perform any of their respective obligations under this Agreement or the MOU; or (d) City's or SCRWA's infringement, misappropriation, or other violation of any third party's intellectual property rights. 10. Limitation of Liability. NEITHER PARTY WILL BE LIABLE TO THE OTHER FOR ANY INDIRECT, INCIDENTAL, SPECIAL, PUNITIVE, OR CONSEQUENTIAL DAMAGES (INCLUDING LOST PROFITS, LOST REVENUE, LOST PRODUCTION, LOST BUSINESS, LOST GOODWILL, OR LOST OPPORTUNITY) ARISING OUT OF OR RELATING TO THIS AGREEMENT. NOTWITHSTANDING THE FOREGOING, THIS PROVISION SHALL NOT APPLY TO LIABILITY ARISING FROM CITY'S INDEMNITY OBLIGATIONS UNDER SECTION 9 OF THIS AGREEMENT TO THE EXTENT SUCH LIABILITY ARISES FROM DAMAGE TO THIRD PARTIES. 11. Events of Default/Remedies. A Party’s failure to perform any material obligation or covenant under this Agreement, which failure continues for 30 days after written notice from the other Party (“Non-Defaulting Party”), will constitute an “Event of Default” of such Party (the “Defaulting Party”). Upon the occurrence of an Event of Default and notice to the Defaulting Party, the Non-Defaulting Party may suspend performance of its obligations under this Agreement, including for Amazon, any obligation to pay Reservoir Costs; assert against the Defaulting Party a claim of direct Damages incurred by the Non-Defaulting Party in connection with such Event of Default; and/or terminate this Agreement. 12. Assignment. No party may assign this Agreement without the other party’s prior written consent, which will not be unreasonably withheld. Amazon may assign this Agreement to an Affiliate without City’s consent. 13. Governing Law and Venue. This Agreement shall be governed by and construed in accordance with the laws of the State of California without regard to the conflict of laws provisions of any jurisdiction. The exclusive jurisdiction and venue with respect to any and all disputes arising hereunder shall be in State and Federal courts located in California in accordance with applicable Law. 14. Waiver of Jury Trial. Each party waives, to the fullest extent permitted by applicable Law, any right it may have to a trial by jury in respect of any dispute arising out of or relating to this Agreement. 15. Entire Agreement. This Agreement supersedes any and all prior agreements, whether oral or written, between the parties hereto with respect to the subject matter of this Agreement and contains all the covenants and agreements between the parties with respect to such topics. Each party to this Agreement acknowledges that no representations, inducements, promises or agreements, orally or otherwise, have been made by any party, or anyone acting on behalf of any party, which are not embodied herein. No other agreements or conversation with any officer, agent or employee of City prior to execution of this Agreement shall affect or modify any of the terms or obligations contained in any documents comprising this Agreement. 16. Exhibits. The following Exhibits are attached hereto and incorporated by reference: Exhibit A (Services), Exhibit B (Equipment), Exhibit C (Insurance Coverages). Docusign Envelope ID: A1610F65-2351-8AC2-8261-F818C74407A3 -7- 4925-1933-7403v12 ALF\04706240 17. Amendment & Modification. No amendment, modification, alteration or change to the terms of this Agreement will be effective unless and until made in a writing signed by both parties hereto. Oral modifications to this Agreement shall be void and of no force or effect, including any oral modifications to the Design Budget and Construction Budget. 18. Binding on Successors and Assigns. Subject to Section 12 above, the covenants, terms, conditions and provisions of this Agreement shall apply to, and shall bind, the heirs, successors, executors, administrators, and assigns of both parties hereto. 19. Interpretation. The captions and headings of the various articles, sections, paragraphs and subparagraphs of this Agreement are for convenience only and shall not be considered nor referred to for resolving questions of interpretation. This Agreement contains the contributions of both parties, each of which has had the opportunity to consult competent counsel, and it is expressly agreed and understood that the rule stated in Civil Code Section 1654, that ambiguities in a contract should be construed against the drafter, shall have no application to the construction of this Agreement. 20. Attorneys’ Fees. If any action at law or in equity, including an action for declaratory relief, is brought to enforce or interpret any provision of this Agreement, the prevailing party shall be entitled to reasonable attorneys’ fees and costs, which may be set by the court in the same action or in a separate action brought for that purpose, in addition to any other relief to which that party may be entitled. 21. No Third-Party Beneficiaries. Except for SCRWA, which is an intended third-party beneficiary of this Agreement, this Agreement shall not be construed or deemed to be an agreement for the benefit of any third party or parties, and no third party or parties will have any claim or right of action hereunder for any cause whatsoever. 22. Relationship of Parties. The parties are independent contractors, and nothing in this Agreement creates an employer-employee relationship, a partnership, joint venture, or other relationship between the parties. Neither party has authority to assume or create obligations of any kind on the other party's behalf. 23. Severability. If any provision of this Agreement, including any exhibit hereto, is held by a court of competent jurisdiction to be invalid, void, or unenforceable, the court is authorized and instructed to modify this Agreement so that the transactions and agreements contemplated herein are consummated as originally intended to the fullest extent possible. 24. Waiver. Waiver by either Party of any breach, violation of, or failure to perform any covenant, term, condition or provision of this Agreement, or of the provisions of any ordinance or law, or any delay in enforcement of the same, will not be deemed to be a waiver of any other term, covenant, condition, provisions, ordinance or law, or of any subsequent breach or violation of the same or of any other term, covenant, condition, provision, ordinance or law. 25. Time of the Essence. All dates and times referred to in this Agreement are of the essence. 26. Counterparts; Electronic Signatures. This Agreement may be executed in counterparts, each of which shall be deemed an original. This Agreement and any other documents to be delivered in connection herewith may be electronically signed. Any digital or electronic signatures (including Docusign Envelope ID: A1610F65-2351-8AC2-8261-F818C74407A3 -8- 4925-1933-7403v12 ALF\04706240 pdf, facsimile or electronically imaged signatures provided by DocuSign or any other digital signature provider) appearing on this Agreement or such other documents shall have the same force and effect as handwritten signatures for the purposes of validity, enforceability and admissibility. 27. Notices. Any notices required or permitted to be given hereunder shall be given in writing and shall be delivered by U.S. Mail, registered or certified, return receipt requested, postage prepaid, or by overnight delivery service showing receipt of delivery, or by personal delivery, or by facsimile (fax) or email. Notices or demands shall be addressed as follows: City: City of Gilroy Attn: City Administrator 7351 Rosanna Street Gilroy, CA 95020 Fax: 408-846-0500 Email: Matt.Morley@cityofgilroy.org, Harjot.Sangha@cityofgilroy.org With a copy to: City of Gilroy Attn: Director, Utilities Department 7351 Rosanna Street Gilroy, CA 95020 Fax: 408-846-0500 Email: Derek.Cray@cityofgilroy.org, Bret.Swain@cityofgilroy.org Amazon: Amazon Data Services, Inc. 410 Terry Avenue North Seattle, WA 98109 Attn: General Counsel (AWS) Email: contracts-legal@amazon.com, infraenergy@amazon.com or to such other address as either party may from time to time specify in writing to the other party in accordance with this Section 27. Notices shall be deemed to have been given upon the earlier of actual receipt; or the next business day after delivery to an overnight delivery service; or three (3) days after the deposit in the U.S. mail; or the same day notice is faxed or emailed (if faxed or emailed before 5:00 p.m. PST), and on the next business day (if faxed or emailed after 5:00 p.m. PST). 28. Definitions. As used in this Agreement, the following terms shall have the meanings set forth below: (a) "Affiliate" means, with respect to any person, each person that directly or indirectly controls, is controlled by, or is under common control with such designated person. For purposes of this definition, "control" (including, with correlative meanings, the terms "controlled by" and "under common control with"), as used with respect to any person, means (i) the direct or indirect right to cast at least 50% of the votes exercisable at an annual general meeting (or its equivalent) of such person or, if there are no such Docusign Envelope ID: A1610F65-2351-8AC2-8261-F818C74407A3 -9- 4925-1933-7403v12 ALF\04706240 rights, ownership of at least 50% of the equity or other ownership interest in such person, or (ii) the right to direct the policies or operations of such person. For purposes of this Agreement, the term "person" means an individual, corporation, partnership, limited liability company, association, trust or other entity or organization, including a Governmental Authority. (b) "Amazon Indemnified Parties" means Amazon and its Affiliates and their respective directors, employees, agents, representatives, successors, and assigns. (c) "Damages" means any liability, damage, judgment, fine, penalty, settlement, expense, and cost. (d) "Equipment" means all supplies, goods, materials, components, parts, structures, assemblies, and distribution equipment including any of the foregoing set forth in Exhibit B. (e) "Governmental Authority" means any national, state, provincial, local, tribal or municipal government, any political subdivision thereof or any other governmental, regulatory, quasi-governmental, judicial, public or statutory instrumentality, authority, body, agency, department, bureau, or entity with authority to bind a party at law. (f) "Law" means all laws, statutes, rules, regulations, ordinances, codes, judgments, orders, approvals, tariffs, decrees, and other pronouncements having the effect of law of any Governmental Authority. (g) "Services" means the services set forth in Exhibit A. (h) "Supply Chain Standards" means the supply chain standards available at: https://sustainability.aboutAmazon.com/people/supply-chain, as amended or superseded from time to time. [Signatures Appear on Following Page] Docusign Envelope ID: A1610F65-2351-8AC2-8261-F818C74407A3 -10- 4925-1933-7403v12 ALF\04706240 IN WITNESS WHEREOF, the parties hereto have set their signatures below as of the date below each party’s respective signatures. Executed at Gilroy, California, on the date and year written below. AMAZON: CITY or GILROY: AMAZON DATA SERVICES, INC., a Delaware corporation CITY OF GILROY, a California municipal corporation By: By: Name: Name: Title: Title: Date: Date: Social Security or Taxpayer Identification Number Approved as to Form ATTEST: City Attorney City Clerk Docusign Envelope ID: A1610F65-2351-8AC2-8261-F818C74407A3 -11- 4925-1933-7403v12 ALF\04706240 EXHIBIT A SERVICES Service Completion Date Price 3 MG Reservoir Design 12 months from the effective date of the SCRWA contract with the applicable design consultant not including the public bidding process. $900,000 Total: $900,000 Amazon Reimbursement Cap: $900,000 Docusign Envelope ID: A1610F65-2351-8AC2-8261-F818C74407A3 -12- 4925-1933-7403v12 ALF\04706240 EXHIBIT B EQUIPMENT Equipment Item Delivery Date Price Total: $[_] Docusign Envelope ID: A1610F65-2351-8AC2-8261-F818C74407A3 -13- 4925-1933-7403v12 ALF\04706240 EXHIBIT C INSURANCE COVERAGES Professional Services Provider Coverage and Limits Coverage Type Minimum Coverage Limits. Commercial General Liability (including products/completed operations, advertising, and personal injury liability) $2,000,000 per occurrence $4,000,000 general aggregate Business Automobile Liability (including coverage for all owned, non-owned and hired autos, and no fault coverage where applicable) $1,000,000 per occurrence (injury and property damage combined) Workers’ Compensation (including coverage for all employer liabilities under workers’ compensation and similar Laws that may accrue for any Vendor employee, in all jurisdictions where Vendor has employees) Statutory Requirements in all jurisdictions where Vendor has employees Employer’s Liability $1,000,000 Professional Liability or Errors and Omissions (required if Vendor is providing design or other professional services) $1,000,000 per claim Docusign Envelope ID: A1610F65-2351-8AC2-8261-F818C74407A3 -14- 4925-1933-7403v12 ALF\04706240 EXHIBIT C INSURANCE COVERAGES (Continued) Contractor Coverage and Limits Coverage Type Minimum Coverage Limits. Commercial General Liability (including products/completed operations, advertising, and personal injury liability) $5,000,000 per occurrence $5,000,000 general aggregate Business Automobile Liability (including coverage for all owned, non-owned and hired autos, and no fault coverage where applicable) $1,000,000 per occurrence (injury and property damage combined) Workers’ Compensation (including coverage for all employer liabilities under workers’ compensation and similar Laws that may accrue for any Vendor employee, in all jurisdictions where Vendor has employees) Statutory Requirements in all jurisdictions where Vendor has employees Employer’s Liability $1,000,000 Professional Liability or Errors and Omissions (required if Vendor is providing design or other professional services) $1,000,000 per claim Docusign Envelope ID: A1610F65-2351-8AC2-8261-F818C74407A3