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Energy Services AgreementRic ,~a~o-a7397 s~2~~ ENERGY SERVICES AGREEMENT (ESA) This Energy Services Agreement, referred to herein as "Agreement" or "ESA", dated as of May 25 2010, by and between the City of Miami Beach, a Florida municipal corporation with primary offices located at 1700 Convention Center Drive, Miami Beach, FL 33139, referred to herein as the "CITY" and Ameresco, Inc., a Delaware corporation with offices located at 111 Speen Street, Suite 410, Framingham, Massachusetts 01701 referred to hereafter as the "COMPANY" for the purpose of providing energy conservation measures (ECMs), consisting of services, systems and facilities designed to reduce energy consumption and costs in buildings owned and operated by the CITY which are referred to herein as the "Premises." The CITY and the COMPANY are also referred to herein as the "Party" or "Parties" as appropriate. Recitals WHEREAS, the COMPANY was selected by the CITY as a qualified provider to provide professional services which will result in decreased energy consumption and costs, and which services may include but are not limited to the following: energy use analyses, the design and delivery of ECMs which consist of systems and devices to be installed and maintained on the Premises, guaranteed energy savings, the training of designated CITY employees, and the maintenance and monitoring of the ECMs as provided herein and measurement, verification and reporting of energy savings; and WHEREAS, under separate agreement with the CITY, the COMPANY has performed a comprehensive Energy Audit and has prepared a Detailed Energy Audit Report (the "Energy Audit Report"), which has been approved and accepted by the CITY as evidenced by the Energy Audit Report and CITY's Acceptance Certification as set forth in Exhibit II (i); and WHEREAS, the COMPANY has agreed to guarantee a level of energy savings to be achieved as the result of the professional services to be provided under this Agreement; and NOW, THEREFORE, in consideration of the mutual promises and covenants contained herein, and intending to be legally bound hereby, the CITY and the COMPANY hereby covenant and agree as follows: Article 1: The Company's Rights and Responsibilities 1.1 Independent Company Status The COMPANY is an independent Company and in providing its services under this Agreement, shall not represent to any third party that its authority is greater than that granted to it under the terms of this Agreement. 1.2 Legal Responsibility The COMPANY shall perform or cause to be performed the Work and all other services required by this Agreement. The COMPANY shall assure that all of the Work is accomplished in a workmanlike manner and that all services which require the exercise of professional skills or judgment shall be accomplished by professionals qualified and competent in the applicable discipline and appropriately licensed in the State of Florida, if required by law. All Project Documents that are required to be prepared by the COMPANY shall be in accord with all applicable codes, standards, and regulations and shall be prepared by qualified personnel. Where required by Florida law, Project Documents shall bear the stamp or seal of architects or engineers licensed in the State of Florida. The COMPANY shall remain responsible for all services performed, whether by the COMPANY or its subcontractors or others on its behalf, in accordance with the terms of Schedule R, throughout the term of this Agreement. -f the COMPANY fails to comply with the foregoing standards, the COMPANY shall perform again, at its own expense, any and all Work required to be re-performed as a direct result of such failure. Any review, approval, acceptance or payment for any and all of the COMPANY's performance by the CITY shall not relieve the COMPANY of its responsibility for the services performed. This provision in no way limits the CITY'S rights against the COMPANY either under this Agreement in law or in equity. 1.3 Insurance The COMPANY shall purchase, maintain, and provide evidence of insurance coverage of the types, in the amounts and for the periods specified in Schedule Q (Insurance and Bonds). On the date described in paragraph 5.1 hereof, the CITY shall be responsible for providing insurance coverage on the ECMs. The COMPANY may not commence performance of the Work or other services under this Agreement until all required insurance is obtained and evidence of it is received and approved by the CITY as described in paragraph 2.1, but the failure of the CITY to obtain such evidence from the COMPANY before permitting the COMPANY to commence the Work shall not be deemed to be a waiver by the CITY, and the COMPANY shall remain under a continuing obligation to obtain and maintain the required coverage and to supply evidence of coverage in accordance with Schedule O (Insurance and Bonds). The COMPANY's failure to obtain or keep such insurance in force shall constitute an Event of Default under this Agreement within the meaning of Article 11, and in addition to the remedies provided therein, the CITY reserves the right to stop the Work, without penalty or liability to CITY, until evidence of the requisite coverage is provided. The COMPANY shall require all subcontractors performing any portion of the Work to carry the insurance required in Schedule O (Insurance and Bonds) and the COMPANY may, at its option, provide the coverage for any or all subcontractors, and, if so, the evidence of insurance submitted shall so stipulate. The COMPANY and each of its subcontractors agree that they shall waive any rights of subrogation against the CITY. The COMPANY shall timely renew the required insurance as necessary to keep such coverage in effect for the periods specified in Schedule Q (Insurance and Bonds) and shall supply the CITY, with evidence of all required insurance including updated replacement Certificates of Insurance and amendatory riders or endorsements that clearly evidence the continuation of all coverage in the same manner, limits of protection, and scope of coverage, as was provided by the Certificates of Insurance, amendatory riders or endorsements originally supplied. The COMPANY expressly understands and agrees that any insurance protection furnished by the COMPANY hereunder shall in no way limit its responsibility to indemnify and hold harmless the CITY, subject to the provisions of this Agreement. 1.4 Performance and Labor and Material Payment Bonds The COMPANY shall, as soon as practicable following the execution date set forth in Article 15 hereof, but in no event more than sixty (60) days therefrom, and prior to commencing the Work, deliver to the CITY a Performance Bond and a Labor and Material Payment Bond securing its obligations to be performed under this Agreement until the Acceptance of the Work by the CITY. Each bond shall be in the amount set forth in Schedule O (Insurance and Bonds) hereof. The Performance Bond and Labor and Material Payment Bond shall only apply to the installation portion of this Agreement and does not apply in any way to energy savings guarantees, payments or maintenance provisions, except that the Performance Bond shall guarantee that the ECMs installed pursuant to this Agreement are new, in good and proper working condition and free of defective materials and workmanship for a period of one (1) year following completion and acceptance of the Work, as evidenced by the CITY's executed Certificate of Acceptance (Exhibit II (ii). 2 1.5 Cooperation with the CITY's Consultants The CITY reserves the right to designate authorized representatives or to retain consultants at its expense, including an Architect/Engineer, to act on its behalf with respect to administering the performance required under this Agreement throughout its term. The CITY and its representatives and consultants shall at all times have reasonable access to the Work, subject to the safety rules and requirements of the site of the Work. The COMPANY agrees to cooperate with any representative of, or consultant retained by, the CITY. 1.6 Joint and Several Liability Each and every obligation or undertaking herein to be fulfilled or performed by the COMPANY shall be the joint and several obligation of the COMPANY and its successors or assigns. 1.7 Miscellaneous Other rights and responsibilities of the COMPANY are set forth throughout this Agreement and in the Project Documents described in paragraph 3.5 hereof and are included under other titles, articles, sections and headings for convenience. It is the responsibility of the COMPANY to familiarize itself with all provisions of this Agreement and the Project Documents in order to understand fully the entirety of its rights and responsibilities hereunder. Article 2: The CITY's Rights and Responsibilities 2.1 Project Administration The CITY shall be primarily responsible for the administration and monitoring of the performance of the Work by the COMPANY. The CITY's Representative designated in paragraph 10.9 shall be the principal point of contact between the CITY and the COMPANY relative to the day to day performance required under this Agreement. 2.2 Responsibilities of the CITY Tasks to be performed by the CITY in the administration and coordination of this Agreement include, but are not limited to the following areas: (i) Review and approve required insurance coverage and bonds within twenty (20) business days following receipt of such documents by the CITY to ensure compliance with the terms of this Agreement; (ii) Review and approve the ECM Submittals required under paragraph 2.3 hereof within twenty (20) calendar days after receipt by the CITY of such ECM submittals to ensure: (a) That the design and installation of the ECMs is adequately described and illustrated; (b) That the design and installation of the ECMs is consistent with current and known future capital projects at the Premises as defined in Schedule L (Current and Known Future Capital Projects at the Premises); and (iii) Review and approve all submittals required under paragraphs 2.3 and 3.5 herein, in accordance with the timeframes set forth in Schedule K (Project Installation Schedule). (iv) Attend project meetings. 3 2.3 ECM Submittals ECM submittals shall provide sufficient detail to allow the CITY to complete the reviews described in paragraph 2.2, and shall include: (i) Date and revision dates. (ii) Project Number and Title. (iii) Names, as applicable, of the COMPANY representatives, subcontractor, sub-subcontractor, supplier, manufacturer or detailer. (iv) Identification of product or material. (v) Relation to adjacent structure or material. (vi) Field Dimensions, clearly identified. (vii) Specification page and number. (viii) Specified standards, such as ASTM or ANSI. (ix) Identification of previously approved deviation from Project Documents. (x) Stamp or seal of the preparer of the ECM submittal, and the Company's certification that it has reviewed and approved the submittal as to its accuracy and compliance with the provisions of this Agreement. (xi) Drawings, plans, specifications, shop drawings, product data, and where appropriate or reasonably required, product samples. At the request of the CITY, and where appropriate or reasonably required (as determined by CITY, in its reasonable judgment and discretion), the COMPANY shall provide on-site "mock-ups" and demonstrations of the ECMs at the Premises which shall also be construed as ECM submittals under the provisions of this paragraph. Within twenty (20) calendar days of receipt of each of the ECM submittals, the CITY shall complete its review of the submittals and provide written approval of the submittals or if the submittals have not been approved, written explanation as to the reason therefor. The COMPANY shall submit a revised submittal within twenty (20) calendar days to the CITY for review and approval and the CITY shall have twenty (20) calendar days from receipt thereof to complete its review of the revised submittals. The COMPANY shall be responsible for any delays caused by rejection of incomplete or inadequate submittals. The COMPANY may not commence any of the Work which requires the submittals without written approval by the CITY. The COMPANY's responsibility for errors, omissions, deviation from existing conditions, or deviation from the Project Documents in submittals is not relieved by the CITY'S review and approval thereof. 2.4 Drawings, Specifications and Surveys Provided by the CITY (a) The CITY will make available for review by the COMPANY, any of its working drawings and specifications concerning the Premises, such as it may have, and without representation or warranty of any kind, which are reasonably necessary for the execution of the Work. (b) The CITY shall provide the COMPANY with such surveys, such as it may have, but without representation or warranty of any kind, describing the physical characteristics, legal limitations, and utility locations for the site of the Work. (c) The CITY will make available for review by the COMPANY such working drawings, specifications, surveys and "As-Built" drawings concerning the Premises such as it may have, but without representation or warranty of any kind, and which relate to work being performed by other companies at the Premises; (d) All drawings, specifications, surveys and copies thereof furnished by the CITY are and shall remain CITY property. All "As-Built" drawings prepared under this Agreement, upon payment of all amounts owed hereunder, shall become CITY property. With the exception of one (1) set of such drawings, specifications, surveys and "As-Built" drawings for each party hereto, such drawings, 4 specifications, surveys, and "As-Built" drawings are to be returned or suitably accounted for to the CITY at the completion of the Work. (e) The COMPANY understands that it is obligated to verify, to the extent it deems necessary, any and all information furnished by CITY pursuant to this Section 2.4, and that it is solely responsible for the accuracy and reliability of all such information used by COMPANY. 2.5 Ownership, Dissemination and Publication of Documents Upon Acceptance of each ECM pursuant to this Agreement, the drawings, specifications, reports, renderings, models, electronic media, and all such other documents to be prepared and furnished by the COMPANY to CITY pursuant to this Agreement that relate to such ECM, shall be the property of the CITY and the CITY shall have a license to use any copyrighted material contained in such documents. All documents listed above may be issued for informational purposes by the CITY without additional compensation to the COMPANY. 2.6 Interpretation of Agreement The CITY shall have the sole authority to determine questions of fact that arise in relation to the interpretation of this Agreement and the COMPANY'S performance hereunder. However, such determinations are subject to the Alternative Dispute Resolution procedures as described in Schedule P (Alternative Dispute Resolution Procedures). Unless the Parties agree otherwise, or the Work cannot be continued without a resolution of the question of fact, such determinations and Alternative Dispute Resolution procedures shall not be cause for delay of the Work. The COMPANY shall proceed diligently with the performance of this Agreement and in accordance with the CITY'S decision whether or not the COMPANY or anyone else has an active claim pending. Continuation of the Work shall not be construed as a waiver of any rights accruing to COMPANY and/or CITY (as the case may be). Article 3: The Energy Conservation Project (The "Project") 3.1 Project Defined The COMPANY shall design, procure, fabricate, and install the ECMs specified in Schedule A (Equipment to be Installed) and provide training, commissioning, maintenance and monitoring, and all other services specified in this Agreement and the Project Documents set forth in paragraph 3.5 at the Premises described in Schedule D (Premises). 3.2 Energy Audit Report The Energy Audit Report prepared by the COMPANY and accepted by the CITY contains specific recommendations and documentation concerning the ECMs, systems, and services to be provided at the Premises and is incorporated herein by reference. Notwithstanding, the provisions of this Agreement, the Schedules and Project Documents referenced in paragraph 3.5 shall govern in the event of any inconsistencies between the Energy Audit Report and the provisions of this Agreement. Schedule M provides a description of existing equipment at the Premises that was assessed by the Company in connection with each ECM. 3.3 Annual Energy Savings Guaranty The COMPANY has formulated and guaranteed the level of energy and operating cost savings as provided for in Schedule B (Energy Savings Guaranty), which will be achieved each year as a result of the performance by COMPANY of the services specified in this Agreement utilizing the Methods of Savings Measurement and Verification set forth in Schedule N (Methods of Savings Measurement Verification). 5 3.4 Annual Review and Reimbursement Energy savings achieved at the Premises shall be reported, reconciled and verified pursuant to the provisions of Schedule N (Methods of Savings Measurement Verification). If said annual review, reconciliation, and verification of energy savings discloses that the COMPANY has failed to achieve the annual guaranteed energy and operating cost savings set forth in Schedule B (Energy Savings Guaranty), the COMPANY will pay the CITY the difference between the annual amount guaranteed and the amount of actual annual energy and operating cost savings achieved at the Premises. The COMPANY shall remit such payments to the CITY within thirty (30) days of written demand therefore by the CITY. When the total energy and operating cost savings in any one year during the guarantee period exceed the Energy Savings Guaranty as set forth in Schedule B (Energy Savings Guaranty) and are in addition to those monies due the COMPANY for compensation for services as set forth in Schedule C (Compensation to Company), such excess savings shall first be applied to reimburse COMPANY for any payment COMPANY made to CITY to meet COMPANY's guarantee for previous years in which the energy savings fell short of COMPANY'S Energy Savings Guaranty under the terms as set forth in Schedule B (Energy Savings Guaranty). No excess savings will be credited to satisfy any shortfall(s) in Energy Savings Guaranty(s) in future years of the contract. 3.5 Project Documents The Project Documents include: • The executed ESA • The Energy Audit Report • COMPANY Submittals specified in paragraph 2.3. • Certificates of Insurance • Executed Performance Bond and Labor and Material Payment Bond • Drawings, Specifications and Surveys furnished by the CITY in accordance with paragraph 2.4. The Project Documents also include the following Schedules, Attachment and Exhibits that are hereby incorporated herein by reference and made a part of this ESA when approved by the CITY and COMPANY: Schedule A Equipment to be Installed Schedule B Energy Savings Guaranty Schedule C Compensation to Company Schedule D Premises Schedule E Calculation of Baseline/Benchmarks Schedule F Financing Agreement Schedule G Company Maintenance Responsibilities Schedule H CITY Maintenance Responsibilities Schedule I ECMs Operating Parameters/Standards of Comfort & Service Schedule J Company Training Responsibilities Schedule K Project Installation Schedule Schedule L Current and Known Future Capital Projects at the Premises Schedule MPre-Installation Equipment Inventory Schedule N Methods of Savings Measurement and Verification Schedule O Systems Startup and Commissioning of ECMs Schedule P Alternative Dispute Resolution Schedule Q Insurance and Bonds Schedule R Warranties Schedule S Proposed Final Project Cost & Proposed Final Project Cash Flow Analysis Schedule T Applicable Federal Requirements for ECM-7 and portions of ECM-3 Schedule U Procurement Strategy 6 Attachment A Construction Process Exhibit I Performance Bond/Construction Bond Exhibit II (i) Certification of Acceptance--Energy Audit Report Exhibit I I (ii) Certification of Acceptance-Energy Conservation Measures Exhibit II (iii) Notice of Substantial Completion Exhibit II (iv) Notice of Final Completion Exhibit III Equipment Warranties Exhibit IV Notice to Proceed 3.5.1 Project Documents Furnished by the CITY; No Warranty Pursuant to paragraph 2.4(c), the CITY shall make available for the COMPANY'S review, inspection, and duplication at COMPANY'S expense, such Project Documents as it may have which relate to any work being performed by other companies at the Premises under separate contracts with the CITY unrelated to the COMPANY'S performance of the Work under this Agreement, including but not limited to drawings, specifications, surveys and as-built drawings. The furnishing of such Project Documents by the CITY shall not constitute a warranty as to the accuracy or completeness of such Project Documents. 3.5.2 Review of Project Documents; Notification to the CITY The COMPANY shall carefully review all Project Documents, including all addenda, whether prepared by the COMPANY, its subcontractors or furnished by the CITY for errors, inconsistencies, or omissions relative to the performance of the Work(any and all such errors; inconsistencies or omissions in the Project Documents may also be referred to as a "conflict" or "conflicts"). Upon completion of its review of the Project Documents, and prior to commencing the Work, the COMPANY shall provide written notice to the CITY that (i) there are no errors, inconsistencies or omissions in the Project Documents pertaining to the performance of the Work at the Premises; or, (ii) specifying the nature of any errors, inconsistencies or omissions or inconsistencies noted from the COMPANY'S review of the Project Documents. All Work to be performed under this Agreement by the COMPANY or its subcontractors which the COMPANY indicate is in conflict with the Project Documents or the work of other companies performing on the Premises shall be brought to the attention of the CITY before the Work is commenced. 3.5.3 The COMPANY understands that it is obligated to verify, to the extent it deems necessary, all information furnished by CITY, and that it is solely responsible for the accuracy and applicability of all such information used by COMPANY. 3.5.4 The COMPANY shall be required to coordinate its review of the Project Documents with the appropriate City department(s) overseeing or having jurisdiction over the Project so as to ensure that there is no duplication of Work. 3.5.5 Correction of Conflicting Work In the event that the COMPANY fails to properly prepare or review Project Documents or commences the Work without providing notice to the CITY of any errors, inconsistencies or omissions it discovers in the Project Documents, the COMPANY shall, upon written direction from the CITY, remove all such Work or portion thereof so conflicting, and rebuild it as directed at no additional cost to the CITY, provided that the Project Documents furnished by the CITY have put the COMPANY on reasonable notice that an error, inconsistency, or omission existed. 7 Article 4: Implementation of the Energy Conservation Project (the "Work") 4.1 Description of the Work The design, procurement, fabrication, installation and commissioning of the ECMs specified in Schedule A (Equipment to be Installed) and any training services described in Schedule J (Company Training Responsibilities), which are integral to the operation of the ECMs, are referred to in this Agreement as the "Work." The maintenance, monitoring, and savings measurement and verification services detailed in Schedule G (Company Maintenance Responsibilities) and N (Methods of Savings Measurement and Verification) and any Post-Acceptance Training services detailed in Schedule J (Company Training Responsibilities), performance of which does not commence until after the Commencement Date, are not part of the Work. 4.2 Performance of the Work (i) Preconstruction Services: The COMPANY has prepared the Energy Audit Report submitted as of September 8, 2009. The COMPANY has also assisted the CITY in obtaining financing for the Work. (ii) Construction Work: Upon the Company's receipt of (i) the Notice To Proceed (as set forth in Exhibit IV) and (ii) evidence of the funding of an escrow account with immediately available funds sufficient for the payment of the Contract Cost (as defined in Schedule C), the Company shall furnish all labor, materials and equipment and perform all work and services required for the completion of the Work including the installation of the ECMs. Construction and equipment installation shall proceed in accordance with the provisions contained in Attachment A (Construction Process) and the Project installation schedule approved by CITY and attached hereto as Schedule K (Project Installation Schedule). 4.3 Systems Startup/Commissioning The COMPANY shall conduct a thorough and systematic performance test of each element and total system of the installed ECMs in accordance with Schedule O (Systems Startup and Commissioning of ECMs). The COMPANY shall provide advance written notice of at least ten (10) business days to the CITY of the scheduled test(s). The CITY shall have the right to designate representatives to be present at any or all such tests including representatives of the manufacturers of the ECMs. The COMPANY shall demonstrate that all ECMs installed comply with the requirements of the Project Documents. The COMPANY shall test all components and systems of the installed ECMs. The COMPANY, or its subcontractor(s), shall correct or adjust all deficiencies in operation of the ECMs. Article 5: Commencement Date and Term; Interim Period; Fiscal Funding 5.1 Commencement Date The Commencement Date shall be the first day of the month after the month in which all schedules are in final form and accepted by the CITY and COMPANY shall have delivered a written Notice of Final Completion, as set forth in Exhibit II(iv), to the CITY that (i) it has completed the installation and commissioning and commenced operating all of the energy conservation measures specified in Schedule A (Equipment to be Installed); (ii) no Event of Default under Article 11 exists; (iii) the Energy Savings Guaranty set forth in Schedule B (Energy Savings Guaranty) is in full force and effect; and (iv) the CITY has inspected and accepted said installation and operation as evidenced by the Certification of Acceptance as set forth in Exhibit II (ii). Compensation payments due to COMPANY for project monitoring, savings measurement and verification, and reporting and maintenance 8 services for any ECM under this Agreement, as set forth in Schedule C (Compensation fo Company) shall begin no earlier than thirty (30) days from the Commencement Date as defined herein. 5.2 Term of Contract; Interim Period Subject to the following sentence, the term of this Agreement ("Term") shall be thirteen (13) years, measured beginning with the Commencement Date. Nonetheless, the Agreement shall be effective and binding upon the parties immediately upon its execution, and the period from contract execution until the Commencement Date shall be known as the "Interim Period". The Interim Period, during which the COMPANY shall design, procure, fabricate and install the ECMs specified in Schedule A (Equipment to be Installed), shall not exceed twenty-four (24) months from the date of this Agreement, unless the COMPANY obtains an extension, which extension is subject to the prior written approval of the CITY„in its sole and reasonable discretion (but which shall not be unreasonably withheld); provided, however, the COMPANY's obligations to complete the Work within such twenty-four (24) month period are subject to the CITY satisfying its review obligations as set forth in Sections 2.2, 2.3, Attachment A and Schedule C, in the time periods agreed to by the CITY in such provisions. All energy and operating cost savings achieved during the Interim Period will be credited to the CITY. 5.3 Nonappropriation of Funds In the event that, in any CITY fiscal year for which payments are due COMPANY under this Agreement, no CITY or other funds, or insufficient CITY or other funds, are appropriated and budgeted, and funds are otherwise unavailable by any other reasonably commercial means (taking into consideration that CITY is a governmental entity), then the CITY will, not less than sixty (60) days prior to end of such applicable fiscal year, in writing, notify the COMPANY of such occurrence and this Agreement shall terminate on the last day of the fiscal year for which appropriations were made, without liability, penalty or expense to the CITY of any kind whatsoever, except as to the portions of payments herein agreed upon for which the CITY and/or other funds shall have been already appropriated and budgeted. Article 6: Company Compensation 6.1 Company Compensation for the Work Payments to the COMPANY for the Work shall be made by the CITY in the amounts and in accordance with Schedule C (Compensation to Company) hereto. The amount specified as Compensation for the Work is inclusive of all costs and fees to be paid for the Work pursuant to this Agreement including any training services provided prior to acceptance of the Project by CITY and as provided for in Schedule J (Company Training Responsibilities). The Contract Cost referenced in Schedule C, (Compensation to Company) shall be considered a guaranteed maximum price and such Schedule C represents the final amount that the CITY has approved, authorized, and budgeted for the Work. Accordingly, this amount shall not be exceeded and/or increased without the express prior written authorization of the Mayor and City Commission. 6.2 Maintenance, Monitoring, Savings Measurement and Verification and any Post- Acceptance Training Fees Payment to the COMPANY for maintenance, monitoring, savings measurement, verification and reporting, and Post-Acceptance Training services performed after the Commencement Date shall be made by the CITY pursuant to and in accordance with Schedule C (Compensation to Company). 9 Article 7: Acceptance 7.1 Acceptance of the Work Acceptance of the Work ("Acceptance") shall occur when the COMPANY'S performance of the Work is complete, in accordance with the Project Documents so that the CITY can utilize the installed ECMs for their intended use and the Energy Savings Guaranty provided by COMPANY under paragraph 3.3 and Schedule B (Energy Savings Guaranty) becomes effective and the CITY has inspected and accepted said installation and operation as evidenced by the Certification of Acceptance as set forth in Exhibit II (ii). 7.2 Required Acceptance Submittals by the Company The COMPANY shall submit the following documents to the CITY with its Notice of Final Completion: (a) All Project Record Documents as described in paragraph 3.5; (b) All releases of liens arising out of this Agreement, or, at the CITY'S option and discretion, receipts in full in lieu thereof, which were not previously delivered, and an affidavit that so far as the COMPANY has knowledge or information, the releases and receipts include all labor and material for which a lien could be filed. The COMPANY shall submit lien waivers, sworn statements, guarantees, full releases, or other evidence reasonably satisfactory to the CITY that there are no liens, claims, or stop notices pending, filed, or threatened against the CITY, the COMPANY, the Work or the ECMs whatsoever. The COMPANY shall, if any subcontractor refuses to furnish a release or receipt in full, furnish a bond satisfactory to the CITY to indemnify the CITY against any lien. If any lien remains unsatisfied after the COMPANY has received payment due for the Work, the COMPANY shall refund to the CITY all moneys that the CITY may be compelled to pay in discharging the lien, including all costs and reasonable attorney fees; (c) Certificates of inspection for all ECMs by all applicable governmental authorities; (d) Asbestos abatement compliance records, if applicable; Any retainage amounts will be paid at the completion of and acceptance by CITY of final punch list items. Article 8: The Energy Conservation Measures 8.1 ECM Warranties The COMPANY warrants that all ECMs designed, procured, fabricated, and installed pursuant to this Agreement are new, in good and proper working condition and free from defects in materials and workmanship for a period of one (1) year from the date of beneficial use of each ECM, as evidenced by an accepted Notice of Substantial Completion provided by Company to CITY (see Exhibit II (iii) and Attachment A.14(e)). for such Work, as specified in Schedule R (Warranties). Any manufacturers' warranties which exceed this one (1) year period shall be assigned to CITY to the extent allowed by the manufacturer. The COMPANY shall deliver to the CITY for inspection and approval all such written warranties and shall pursue rights and remedies against the manufacturer and each prior seller of the ECMs under the warranties in the event of equipment malfunction, improper or defective function, or defects in parts, workmanship, or performance. The COMPANY shall be responsible for managing warranty activity during the warranty periods set forth in Schedule R (Warranties). The cost of any damage, loss or claims by any person arising out of the use or operation of the ECMs or damage to the ECMs and their performance, including damage to other property and equipment of the CITY or the Premises, due to the COMPANY'S failure to exercise its warranty rights shalt be borne by the COMPANY. Except as provided above, COMPANY MAKES NO WARRANTIES OR REPRESENTATIONS OF ANY KIND, 10 WHETHER STATUTORY, WRITTEN, ORAL OR IMPLIED, INCLUDING WITHOUT LIMITATION, WARRANTIES AS TO THE VALUE, DESIGN, AND CONDITION OR FITNESS FOR USE OR PARTICULAR PURPOSE OR MERCHANTABILITY, REGARDING THE EQUIPMENT, ECMS OR ANY SERVICES PROVIDED HEREUNDER. The COMPANY warrants that all workmanship, materials, and equipment used in conjunction with the ECMs will be in conformance with the Project Documents and free from defects for the period, commencing with the date of the beneficial use of each ECM to the CITY and continuing for the period set forth in Schedule R (Warranties). 8.2 Correction of Warranted Work (a) Commencing with the date of beneficial use of each ECM, as evidenced by an accepted Notice of Substantial Completion provided by Company to CITY (see Exhibit II (iii) and Attachment A.14(e))and continuing for the warranty periods set forth in Schedule R (Warranties) for each ECM, or within such longer period of time as may be prescribed by Florida law or by the terms of any applicable special warranty required by the Project Documents, the COMPANY shall correct or replace all faulty, defective or nonconforming Work in accordance with the timeframes set forth in 8.2(c). After receipt of written notice from the CITY to correct such fault or defect, whether it was observed before or after acceptance of the Work, the COMPANY will correct the Work unless the CITY has given the COMPANY a written waiver of the specific fault or defect. Notice may be given by telephone in the event of an emergency situation. The COMPANY shall bear all costs of replacing or correcting such faulty, defective or nonconforming Work. (b) The COMPANY shall, at its own expense, remove from the Premises all portions of defective and nonconforming Work which COMPANY is obligated to replace or correct under this paragraph 8.2 unless removal has been waived in writing by the CITY. (c) If the COMPANY fails to correct faulty, defective or nonconforming Work as provided in this Section within seventy two (72) hours after receipt of notice, in the case of emergency conditions, or within seven (7) business days in other cases after the COMPANY's receipt of written notice from the CITY of such faulty, defective or nonconforming Work, but in any event no more than thirty (30) days, the CITY may correct such work at the COMPANY's expense including costs incurred due to the removal of faulty, defective or non-conforming equipment, and removal and storage of equipment or materials left at the Premises by the COMPANY. (d) If the COMPANY does not pay the cost incurred by the CITY for such repair, removal and storage within ten (10) days of written demand therefor, the CITY may upon ten (10) additional days' written notice, sell any material and equipment not removed by the COMPANY at auction or at private sale and shall account for the net proceeds thereof, after deducting all the costs that should have been borne by the COMPANY. If such proceeds of sale do not cover all costs which the COMPANY should have borne, the difference shall be charged to the COMPANY. If the payments then or thereafter due the COMPANY are not sufficient to cover such amount, the COMPANY shall pay the difference to the CITY. (e) The COMPANY shall bear the cost of repairing or replacing the work of other companies which was destroyed or damaged by such removal or correction except to the extent such damage or destruction was as a result of the gross negligence or willful misconduct of CITY. (t) Nothing contained in this Section shall be construed to establish a period of limitation with respect to any other obligation which the COMPANY might have under the Project Documents. The establishment of the time period set forth in paragraph 8.2(a) above, relates only to the specific obligation of the COMPANY to correct the Work and has no relationship to the time within which its obligation to comply with the Project Documents may be sought to be enforced, nor to the time within which proceedings may be commenced to establish the COMPANY's liability with respect to its obligations other than to specifically correct the Work. Notwithstanding the provisions of this paragraph 8.2, the COMPANY shall, on demand made by the CITY, at any time within the Term provided in Section 5.2, promptly repair or replace all defective or non-conforming work resulting from fraudulent misrepresentation, fraudulent concealment or gross negligence by the COMPANY or its subcontractors in the performance of the Work. 11 8.3 Location and Access The CITY shall provide sufficient space at the Premises for the installation and operation of the ECMs for the term of this Agreement, including access to office space with a telephone line, if necessary to allow the COMPANY to perform required maintenance, monitoring, and training services. The CITY shall provide access to the Premises for the COMPANY and its employees or subcontractors to install, adjust, inspect, maintain, and repair the ECMs in accordance with the terms of this Agreement during regular business hours, or such other reasonable hours as may be requested by the COMPANY and acceptable to the CITY. The COMPANY's access to correct any emergency condition shall not be unreasonably restricted by the CITY. 8.4 Company Maintenance and Monitoring Responsibilities for ECMs The COMPANY shall be responsible for providing the maintenance, monitoring, repairs, and adjustments to the ECMs as set forth in Schedule G (Company Maintenance Responsibilities). All replacements of and alterations or additions to the ECMs shall become part of the ECMs and shall become the property of the CITY. Any replacements of and alterations or additions made by the COMPANY to the CITY's pre-existing equipment, or equipment acquired by the CITY during the term of this Agreement, shall become part of said equipment and be owned by the CITY. The COMPANY shall be compensated for such maintenance and monitoring services pursuant to Schedule C (Compensation to Company) hereof. In the event of the COMPANY's failure to provide maintenance, service, repairs and adjustments to the ECMs, as provided in Schedule G (Company Maintenance Responsibilities) or if an Event of Default exists pursuant to Article 11, the CITY may withhold fees due to the COMPANY for such services until such repairs or adjustments are completed or such Event of Default is cured. The CITY shall notify the COMPANY in writing when any payments are so withheld. The withholding of fees by the CITY under this paragraph 8.4 shall not release the COMPANY from its obligation to provide the Energy Savings Guaranty pursuant to paragraph 3.3 and Schedule B (Energy Savings Guaranty) hereof. 8.5 CITY Operating and ECMs Maintenance Responsibilities The CITY shall be responsible for providing the maintenance, monitoring, service, repairs and adjustments to the ECMs as set forth in Schedule H (CITY Maintenance Responsibilities). Except as set forth in Schedule G (COMPANY Maintenance Responsibilities) and Schedule H (CITY Maintenance Responsibilities), the CITY shall not move, modify, remove, adjust, alter or change in any material way the ECMs, or any part thereof, during the term of this Agreement, without prior written direction or approval of the COMPANY, except in the event of an occurrence reasonably deemed by the CITY or the COMPANY to constitute a bona fide emergency. The CITY acknowledges that substantial deviations from the operating parameters set forth in the Schedules to the ESA may constitute a material change in accordance with paragraph 9.3 hereof. In addition to the responsibilities set forth in Schedule H (CITY Maintenance Responsibilities), the CITY shall make commercially reasonable efforts to maintain the Premises in good repair and to protect and preserve the ECMs in good repair and condition in accordance with applicable manufacturers' recommendations which shall be provided to the CITY by the COMPANY and to maintain the operating conditions of all mechanical systems and energy related systems located at the Premises. The COMPANY shall notify the CITY of any improper maintenance or repair as soon as COMPANY has notice thereof. The CITY acknowledges that improper repairs or maintenance of the ECMs by CITY may constitute a Material Change in accordance with paragraph 9.3, and that the provisions of paragraph 9.5 may be applicable. 8.6 Training by the Company The COMPANY shall conduct the training program described in Schedule J (Project Installation Schedule) hereto. 12 8.7 ECMs Upgrades; Alterations The COMPANY shall have the right, at all times during the term of this Agreement, subject to the CITY's written approval, such approval not to be unreasonably withheld, conditioned or delayed, to modify or replace any of the ECMs or install additional ECMs and to revise any procedures for the operation of the ECMs or implement other procedures at the Premises provided that: (i) such actions by the COMPANY do not result in modifying the standards of comfort and service set forth in Schedule 1 (Operating Parameters for ECMs/Standards of Comfort 8 Service) without the express written approval of the CITY; (ii) such modifications or additions to, or replacements of the ECMs, and any operational changes, or new procedures are necessary to enable the COMPANY to achieve the energy savings guaranteed by the COMPANY at the Premises and (iii) any costs incurred relative to such modifications, additions or replacements of the ECMs, or operational changes or new procedures shall be the responsibility of the COMPANY. All modifications, additions or replacements of the ECMs or revisions to operating or other procedures shall be described in a supplemental Schedule(s) to be provided to the CITY for approval, which shall not be unreasonably withheld, and incorporated into this Agreement provided that any replacement ECM shall be new and have equal or better potential to reduce energy consumption at the Premises than the ECM being replaced. The COMPANY shall update the software to be used in connection with the ECMs, subject to the software license agreements in accordance with the provisions of Schedule G (Company Maintenance Responsibilities). All replacements of and alterations or additions to the ECMs shall become part of the ECMs described in Schedule A (Equipment to be Installed) and shall become the property of the CITY. The COMPANY and the CITY shall determine in accordance with the provisions of paragraph 9.5, what, if any, adjustments to the Baseline/Benchmarks set forth in Schedule E (Calculation of Baseline/Benchmarks) are necessary due to upgrades or alterations of the ECMs which are necessary to enable the COMPANY to achieve the level of energy savings guaranteed by the COMPANY. 8.8 Malfunction and Emergencies The CITY shall use reasonable efforts to notify the COMPANY or its designee within forty-eight (48) hours after the CITY's actual knowledge of the occurrence of: 8.8.1 Any material malfunction in the operation of the ECMs or any pre-existing energy-related equipment; 8.8.2 Any material interruption or alteration of the energy supply to the Premises; 8.8.3 Any material alteration or modification in the ECMs or their operation; and 8.8.4 Any material alteration, modification or change in the Premises or the use of the Premises. The CITY's obligation to use reasonable efforts to notify the COMPANY as soon as reasonably possible shall be deemed satisfied if the CITY reports any said material malfunction, interruption, alteration, modification, or change within forty-eight (48) hours of the CITY's actual knowledge thereof. The COMPANY and the CITY shall determine in accordance with paragraph 9.5 what, if any, adjustments to the Baseline/Benchmarks set forth in Schedule E (Calculation of Baseline/6enchmarks) are necessary due to any of the events described in this paragraph 8.8. 8.9 Ownership of Certain Proprietary Property Rights The CITY shall acquire no ownership interest in any software, formulas, patterns devices, secret inventions or processes, or copyright, patents, and other intellectual and proprietary rights, or similar items of property which are or may become used in connection with the ECMs. The COMPANY shall grant to the CITY a perpetual, 13 irrevocable royalty-free license of any and all software or other intellectual property rights necessary for the CITY to continue to operate, maintain, and repair the ECMs in a manner that will maximize energy consumption reductions beyond the expiration of this Agreement. 8.10 COMPANY's systems, means, cost, and methodologies of evaluating, implementing, accomplishing and determining energy savings for the Project shall be considered privileged and proprietary information as it provides a key component in COMPANY's competitive advantage in the industry. To the extent applicable, such privileged and proprietary information, including COMPANY'S financial statements and software, is to be considered a trade secret, defined under Section 812.081, Florida Statutes. The parties agree therefore, that in accordance with public necessity, COMPANY's trade secret information, as such is defined in Florida Statutes, Section. 812.081, be expressly made confidential and exempt from disclosure under Florida public records law. Article 9: The Premises 9.1 Description of the Premises The Premises in which the ECMs are to be installed and services are to be provided by the COMPANY under this Agreement are described in Schedule D (Premises). 9.2 Ownership of Existing Property The Premises and all equipment and materials existing at the Premises at the time of execution of this Agreement shall remain the property of the CITY. 9.3 Material Change Defined A Material Change shall include any change in or to the Premises, not covered by Schedule B (Energy Savings Guaranty), whether structural, operational or otherwise in nature which reasonably could be expected, in the sole and reasonable discretion of CITY, to increase or decrease annual costs of energy usage by at least five (5%), in the aggregate, after adjustments for climatic variations Actions by the CITY which may result in a Material Change which is subject to this paragraph 9.3, include, but are not limited to the following: 9.3.1 Changes in the manner of use of the Premises by the CITY; or 9.3.2 Changes in the hours of operation for the Premises or for any equipment or energy using systems operating at the Premises; or 9.3.3 Permanent changes in the comfort and service parameters set forth in Schedule I (Operating Parameters for ECMs/Standards of Comfort & Service); or 9.3.4 Changes in the occupancy of the Premises; or 9.3.5 Changes in the structure of the Premises; or 9.3.6 Changes in the types and quantities of equipment used at the Premises; or 9.3.7 Modification, renovation or construction at the Premises; or 9.3.8 The CITY'S failure to provide maintenance of and repairs to the ECMs pursuant to paragraph 8.5 hereof; or 14 9.3.9 Any significant damage to the Premises or the ECMs caused by fire, flood, or other casualty or any condemnation affecting a significant portion of the Premises; or 9.3.10 The permanent or temporary closing of a building at the Premises; or 9.3.11 Any other substantially changed condition, other than weather, affecting energy use at the Premises. 9.4 Reported Material Changes; Notice by CITY The CITY shall use reasonable efforts to deliver to the COMPANY a written notice describing all actual or proposed Material Changes in the Premises or in the operations of the Premises no less than thirty (30) days before any actual or proposed Material Change is implemented. Notice to the COMPANY of Material Changes which result because of a bona fide emergency or other situation which precludes advance notification shall be deemed sufficient if given by the CITY within forty-eight (48) hours after the event constituting the Material Change occurred or was discovered by the CITY to have occurred. 9.5 Reported Material Changes; Adjustments to Baseline/Benchmarks Any changes in energy usage which occur as the result of a Reported Material Change shall be timely reviewed by the COMPANY and the CITY to determine what, if any, adjustments to the Baseline/Benchmarks set forth in Schedule E (Calculation of Baseline/Benchmarks) are necessitated by such Material Change(s). The COMPANY and the CITY agree that any adjustments made to the Baseline/Benchmarks shall be in accordance with generally accepted engineering principles. Any disputes between the COMPANY and the CITY concerning any such adjustment shall be resolved in accordance with the provisions of Schedule P (Alternative Dispute Resolution Procedures) hereto. 9.6 Unreported Material Changes Upon and after the Commencement Date and in the absence of any reported Material Change(s) in the Premises or in their operations, if energy savings deviates more than five (5%) percent during any month from projected energy savings for that month, after adjustment for changes in climatic conditions, then the COMPANY shall timely review such changes to ascertain the cause of such deviation. The COMPANY shall report its findings to the CITY in a timely manner. The COMPANY and the CITY shall determine what, if any, adjustments to the Baseline/Benchmarks set forth in Schedule E (Calculation of Baseline/Benchmarks) are necessary. Any disputes between the COMPANY and the CITY concerning any such adjustment shall be resolved in accordance with the provisions of Schedule P (Alternative Dispute Resolution Procedures) hereto. Article 10: General Terms and Conditions 10.1 Assignment The COMPANY acknowledges that the CITY is induced to enter into this Agreement by, among other things, the professional qualifications of the COMPANY. The COMPANY agrees that neither this Agreement nor any right or obligation hereunder may be assigned in whole or in part, without the prior written approval of the CITY such approval not to be unreasonably withheld or delayed. The foregoing notwithstanding, COMPANY may assign, without the prior written consent of CITY, its (i) rights and obligations under this Agreement, in whole or in part, to any affiliated or associated company of COMPANY and (ii) rights for payments under this Agreement to any financial institution, lender or investor in connection with a leasing or financing arrangement for the ECMs provided that any such assignee(s) shall honor and agree to continue to be bound by the terms of this Agreement. COMPANY will notify CITY ten (10) business days prior to any such assignment and CITY agrees to acknowledge receipt of such notice in writing within three (3) business days after such notice. 15 10.1.1 Assignment by Company The COMPANY may, with prior written consent of the CITY, which consent shall not be unreasonably withheld, delegate its duties and its performance under this Agreement, and/or utilize subcontractors, provided that any delegee(s) or subcontractor(s) shall honor and agree to be bound by the terms of this Agreement. 10.1.2 Notwithstanding the provisions of subsection 10.1.1, or any other term of this Agreement, the COMPANY shall remain jointly and severally liable with its assignee(s) or transferee(s) to the CITY for all of its obligations under this Agreement. 10.1.3 Assignment by the CITY The CITY may transfer or assign this Agreement and its rights and obligations herein to a successor or purchaser of the Premises, or an interest therein, subject to the approval of the COMPANY, which will not be unreasonably withheld, conditioned, or delayed. 10.1.4 Subcontractors COMPANY may elect to use subcontractors and/or subconsultants in meeting its obligations hereunder, provided that any subcontractors and/or subconsultants shall honor and agree to be bound by the terms of this Agreement, to the extent applicable. 10.2 Duty to Indemnify The COMPANY shall defend, indemnify, keep and save harmless the CITY and its agents and employees against all suits, claims, damages, losses and expenses, including attorney's fees, caused by, growing out of, or incidental to, the wrongful or negligent performance of the Work under this Agreement by the COMPANY or its subcontractors to the full extent as allowed by the laws of the State of Florida provided that the CITY shall promptly notify the COMPANY of any suits or claims and shall allow COMPANY, at its sole expense, to settle or defend and control the defense of any suit based upon such claim or claims. In the event of any such injury (including death) or loss or damage, or claims therefor, the COMPANY shall give prompt notice to the CITY. The COMPANY's subcontractors shall include the foregoing as parties as to whom indemnification is due under their subcontracts. 10.2.1 Effect of Statutory Limitations In the event of any claim against the CITY or against any of its officials or employees, in either their personal or official capacities, made by any direct or indirect employee or agent of the COMPANY or of any subcontractor, the COMPANY's indemnification obligation shall not be affected by any limitation on the amount or type of damages, compensation or benefits payable to said employee or agent contained in any other type of employee benefit act. 10.2.2 Intellectual Property Claims Indemnification The COMPANY shall protect, defend, indemnify, and hold the CITY harmless against and from any and all claims, judgments, amounts paid in settlement, costs and expenses, including reasonable attorneys' fees relating to alleged patent, trademark or copyright infringement, misappropriation of proprietary rights, or trade secrets or similar claims, resulting from actions taken by the COMPANY in connection with this Agreement.COMPANY shall in no event be obligated to indemnify CITY to the extent that any injury or damage is caused by the gross negligence or willful misconduct of CITY . 16 10.2.3 Waiver of Consequential Damages Neither PARTY shall be liable to another for special, indirect, consequential or punitive damages, even if the PARTY has been advised that such damages are possible. No PARTY shall be liable for lost profits, lost revenue, or lost operating savings, provided, however, and subject to the foregoing, the COMPANY agrees to compensate the CITY for any and all actual damages to real or personal property resulting from ECM malfunction due solely or in part to non-performance or error by the COMPANY. The indemnification provisions of this Section 10.2 shall survive termination or expiration of the Agreement. 10.3 Alternative Dispute Resolution The provisions for Alternative Dispute Resolution (ADR) attached as Schedule P (Alternative Dispute Resolution Procedures) shall govern the resolution of any disputes arising relative to the terms of, or performance required by, this Agreement. 10.4 No Waiver The failure of COMPANY or the CITY to insist upon the strict performance of the terms and conditions hereof shall not constitute or be construed as a waiver or relinquishment of either Party's right to thereafter enforce the same in accordance with this Agreement in the event of a continuing or subsequent default on the part of the COMPANY or the CITY. 10.5 Severability It is agreed that the illegality or invalidity of any term or clause of this Agreement, shall not affect the validity of the remainder of this Agreement and this Agreement shall remain in full force and effect as if such illegal or invalid term or clause were not contained herein. 10.6 Complete Agreement; Amendments This Agreement, when executed, together with all Project Documents and Schedules referred to in paragraph 3.5 and any other exhibits or attachments referred to in this Agreement, shall constitute the entire agreement between the Parties and this Agreement may not be amended or modified except by a written agreement signed by the Parties hereto. 10.7 Further Documents The Parties shall execute and deliver all documents and pertorm all further acts that may be reasonably necessary to effectuate the provisions of this Agreement. 10.8 Applicable Law This Agreement and the construction and enforceability thereof shall be interpreted under the laws of the State of Florida. Venue for any action will lie in Miami-Dade County, Florida. 17 10.9 Notices All notices required under this Agreement shall be in writing and shall be deemed properly served if delivered in person to the individual to whom it is addressed or, three (3) days after deposit in the United States mail, if sent postage prepaid by United States registered or certified mail, return receipt requested, as follows: (a) To the CITY: (2 copies of all submittals, correspondence and notices required under the ESA) (b) To the COMPANY: Office of the City Manager 1700 Convention Center Drive, Fourth Floor Miami Beach, FL 33139 Attn: CITY MANAGER W ith a copy to: City of Miami Beach Public Works Dept. 1700 Convention Center Drive, Fourth Floor Miami Beach, FL 33139 Attn: Public Works Director John L. Bosch Vice President Ameresco, Inc. 2201 N. West Shore Blvd Tampa, FL 33602 W ith a copy to: Ameresco, Inc. 111 Speen Street, Suite 410 Framingham, MA 01701 Attn: General Counsel 10.10 Termination for Convenience by the CITY Subsequent to the the date of execution of the Notice of Final Completion (Exhibit II(iv)) (, this Agreement may be terminated at the sole discretion of the CITY in accordance with the provisions of this paragraph 10.10. The CITY shall provide notice of its election to terminate to the COMPANY no later than thirty (30) days in advance of the end of the current Energy Savings Guaranty Period. The termination shall become effective on the last day of said guaranty period. The COMPANY's obligation to report, reconcile, and verify the energy savings achieved during the guaranty period proceeding termination remains in full force and effect, as does its obligation, pursuant to paragraph 3.4 of this Agreement, to remit payment to the CITY in the event that the energy savings have not been achieved at the level guaranteed by the COMPANY. The termination of this Agreement by the CITY shall release the COMPANY from its obligation to provide maintenance, monitoring and training services after the effective date of termination, as well as its obligation to provide the Energy Savings Guaranty after the termination date. Termination by the CITY shall release it from the obligation to make any payments to the COMPANY for maintenance, monitoring, and training services after the termination date, provided, however, that the CITY is responsible for payment for maintenance, monitoring, and training services performed in accordance with the terms of this Agreement prior to the termination date. Article 11: Events of Default: Remedies; Termination; Right to Offset 11.1 Events of Default by the CITY Each of the following events or conditions shall constitute an "Event of Default" by the CITY with respect to its obligations under this Agreement: 18 (i) Any failure to make payments to the COMPANY in accordance with the provisions of Schedule C (Compensation to Company) hereof more than thirty (30) days after written notification by COMPANY that CITY is delinquent in making such payment, provided that the COMPANY is not in default in its performance under the terms of this Agreement; (ii) Any representation or warranty furnished by the CITY in this Agreement proves to be false or misleading in any material respect when made; (iii) Any other material failure by the CITY to perform or comply with the terms and conditions of this Agreement, including breach of any covenant contained herein except, provided that such failure if corrected or cured within thirty (30) days after written notice to the CITY demanding that such failure to perform be cured shall be deemed cured for purposes of this Agreement. 11.2 Remedies Upon Default by the CITY If an Event of Default by the CITY described in paragraph 11.1 occurs, the COMPANY shall first exercise the remedies as provided for in Schedule P (Alternative Dispute Resolution Procedures) . 11.3 Events of Default by the Company Each of the following events or conditions shall constitute an "Event of Default" by the COMPANY for purposes of this Agreement with respect to obligations of the COMPANY: (i) The COMPANY's failure to furnish and install the ECMs in accordance with the provisions of this Agreement and within the time specified by this Agreement; (ii) Failure by the COMPANY to pay any amount owing to the CITY due to the COMPANY'S failure to achieve its Energy Savings Guaranty during any Guaranty Year throughout the term of this Agreement or to perform any obligation under the Energy Savings Guaranty; (iii) The standards of comfort and service set forth in Schedule I (Operating Parameters for ECMs/Standards of Comfort & Service) are not provided due to failure of the COMPANY to properly design, install, maintain, repair, or adjust the ECMs except that such failure if corrected or cured within thirty (30) days after written notice to the COMPANY demanding that such failure be cured shall be deemed cured for purposes of this Agreement; (iv) Failure to perform its obligations in accordance with the terms of this Agreement, including failure to provide sufficient personnel, equipment or material to ensure the performance required and failure to meet the Project Installation Schedule provided for in Schedule K (Project Installation Schedule), due to a reason or circumstance within the COMPANY'S reasonable control; (v) The COMPANY's failure to promptly re-perform, within a reasonable time, Work (or services) that were rejected as defective or nonconforming; (vi) The COMPANY's discontinuance of the required performance for reasons not beyond the COMPANY's reasonable control; (vii) Any lien or encumbrance upon the ECMs by any subcontractor, laborer, materialman or other creditor of the COMPANY if not removed within sixty (60) days after receipt of such lien filing by COMPANY or an agreement to allow COMPANY to provide a bond or other security instrument to assure CITY that COMPANY will resolve the lien or encumbrance in dispute; (viii)Any material misrepresentation, whether negligent or willful and whether in the inducement or in the performance, made by the COMPANY to CITY; 19 (ix) The filing of a bankruptcy petition whether by the COMPANY or its creditors against the COMPANY which proceeding shall not have been dismissed within sixty (60) days of its filing, or an involuntary assignment for the benefit of creditors or the liquidation or insolvency of the COMPANY; (x) Any failure by the COMPANY to perform or comply with the terms and conditions of this Agreement, including breach of any covenant contained herein except that such failure, if corrected or cured within thirty (30) days after notice to the COMPANY demanding that such failure to perform be cured, shall be deemed cured for purpose of this Agreement. 11.4 Remedies upon Default by the Company The occurrence of any Event of Default which the COMPANY has failed to cure within thirty (30) calendar days after receipt of notice given in accordance with the terms of this Agreement and specifying the Event of Default shall, at the sole option of the CITY, permit the CITY to declare the COMPANY in default; provided however, that if such Event of Default cannot reasonably be cured within such thirty (30) day period, such Event of Default shall not constitute a default if the COMPANY begins to cure such Event of Default within such thirty (30)-day period and diligently pursues the actions necessary to cure such Event of Default so that the Event of Default is cured as soon as reasonably possible, but in no event shall such extended cure period exceed sixty (60) days.. Written notification of the Event of Default, and the intention of the CITY to terminate this Agreement, shall be provided to the COMPANY and such decision shall be final and effective upon the COMPANY's receipt, as defined herein, of such notice. Upon the giving of such notice as provided herein, the COMPANY must discontinue any Work or services, unless otherwise directed in the notice, and deliver all materials accumulated in the performance of this Agreement, whether completed or in process, to the CITY. At such time the CITY shall first exercise the remedies as provided for in Schedule P (Alternative Dispute Resolution Procedures), thereafter, the CITY may invoke any or all of the following remedies: (a) The right to take over and complete the Work, or any part thereof; (b) The right to immediately terminate this Agreement as to any or all of the Work or other services yet to be performed by the COMPANY. (c) The right of specific performance, injunctive relief or any other appropriate equitable remedy; (d) The right to money damages; and (e) The right to withhold all or any part of the COMPANY's compensation hereunder, provided, however, subject to the CITY's exercise of its right to offset set forth in paragraph 11.5 hereof, the CITY shall pay the COMPANY any amounts, or pro-rata portions thereof, accrued pursuant to Schedule C, prior to and as of the date of the occurrence of the Event of Default,. If the CITY considers it to be in its best interests, it may elect not to declare default or to terminate this Agreement. The parties acknowledge that this provision is solely for the benefit of the CITY and that if the CITY permits the COMPANY to continue to perform the Work and other services despite one or more Events of Default, the COMPANY shall in no way be relieved of any of its responsibilities, duties, or obligations under this Agreement nor shall the CITY waive or relinquish any of its rights. The remedies available to the CITY and to the COMPANY under the terms of this Agreement are not intended to be exclusive of any other remedies provided, but each and every such remedy shall be cumulative and shall be in addition to any other remedies, existing now or hereafter, at law, in equity or by statute. No delay or omission to exercise any right or power accruing upon any Event of Default shall impair any such right or power nor shall it be construed as a waiver of any Event of Default or acquiescence therein, and every such right and power may be exercised from time to time and as often as may be deemed expedient. 20 11.5 Right to Offset Any additional costs incurred by the CITY in the event of termination of this Agreement for default or othervvise resulting from the COMPANY's performance or non-performance under this Agreement, including the exercise by the CITY of any of the remedies available to it under paragraph 11.4 hereof, and any credits due to or overpayments made by the CITY may be offset by use of any payment due for the Work or other services completed before the termination for default or before the exercise of any remedies. If such amount offset is insufficient to cover such excess costs, the COMPANY shall be liable for and promptly remit to the CITY the difference upon written demand therefor. This right to offset is in addition to and not a limitation of any other remedies available to the CITY. Article 12: Representations and Warranties 12.1 Each party warrants and represents to the other that: (a) It has all requisite power, authority, licenses, permits, and franchises, corporate or otherwise, to execute and deliver this Agreement and perform its obligations hereunder; (b) Its execution, delivery, and performance of this Agreement have been duly authorized by, or are in accordance with, its organic instruments, and this Agreement has been duly executed and delivered for it by the signatories so authorized, and it constitutes its legal, valid, and binding obligation; (c) Its execution, delivery, and performance of this Agreement will not result in a breach or violation of, or constitute a default under, any agreement, lease or instrument to which it is a party or by which it or its properties may be bound or affected; and (d) It has not received any notice, nor to the best of its knowledge is there pending or threatened any notice, of any violation of any applicable laws, ordinances, regulations, rules, decrees, awards, permits or orders which would materially and adversely affect its ability to perform hereunder. 12.2 Representations and Warranties by the CITY The CITY hereby warrants and represents to the COMPANY that: (a) It will provide throughout the term of this Agreement (or cause its energy suppliers to furnish) to the COMPANY, upon its request, copies of all available records and data concerning energy usage for the Premises including but not limited to the following data: utility records and rate schedules; occupancy information; descriptions of any major changes in the structure or use of the buildings or heating, cooling, lighting or other systems or energy requirements; descriptions of all energy consuming or saving equipment used in the Premises; descriptions of energy management procedures presently utilized; and any prior energy analyses of the Premises. The CITY shall make knowledgeable employees and agents available for consultations and discussions with the COMPANY concerning energy usage of the Premises. (b) It has not entered into any leases, contracts, or agreements with other persons or entities regarding the leasing of energy efficiency equipment or the provision of energy management services for the Premises or with regard to servicing any of the energy related equipment located in the Premises. 12.3 Representations and Warranties by the Company The COMPANY represents and warrants the following to the CITY (in addition to the other representations and warranties contained in the Project Documents), as an inducement to the CITY to execute this Agreement, which 21 representations and warranties shall survive the execution and delivery of this Agreement and the Final Completion of the Work. (a) That it is financially solvent, able to pay its debts as they mature and possessed of sufficient working capital to complete the Work and perform its obligations under this Agreement; (b) That it and each of its employees, agents and subcontractors of any tier is competent to perform its obligations under this Agreement; (c) That it is able to furnish the plant, tools, materials, supplies, equipment and labor required to complete the Work and perform its obligations hereunder and has sufficient experience and competence to do so; (d) That it is authorized to do business in the State of Florida and is properly licensed by all necessary governmental and public and quasi-public authorities having jurisdiction over it and over the Work and the Premises; (e) That its execution of this Agreement and its performance thereof is within its duly authorized powers; and (f) That its duly authorized representative has visited the Premises, familiarized itself with the local conditions under which the Work is to be performed; and correlated its observations with the requirements of the Project Documents. Article 13: Applicable Laws 13.1 Statutory and Regulatory Requirements All applicable Federal and State laws and the codes, rules and regulations of all authorities having jurisdiction over the performance of the Project shall apply to this Agreement throughout its term and they will be deemed to be included in this Agreement the same as though written herein in full. 13.2 Company's Failure to Comply with Statutory and Regulatory Requirements The COMPANY, and its subcontractors shall comply with all laws, rules, regulations, and codes applicable to performance of the Work and the maintenance, monitoring, and training services to be performed pursuant to Article 6. Except where expressly required by applicable laws and regulation, the CITY shall not be responsible for monitoring the COMPANY'S compliance with any laws or regulations. When the COMPANY observes conflicting regulatory requirements, it shall notify the CITY in writing immediately. If the COMPANY performs any of the Work or other services required by this Agreement knowing or having reason to know that the Work or such services are in violation of such laws, rules and regulations, the COMPANY shall be responsible for all costs arising directly therefrom. Article 14: Right to Audit The CITY or its authorized representative shall have the right to have access to and audit all of the COMPANY'S records, books, correspondence, instructions, drawings, receipts, vouchers, memoranda, and similar data relating specifically to the Work performed under this Agreement with advance written notice and during COMPANY'S normal business hours. In addition, the CITY or its authorized representative shall have access to the COMPANY'S Florida office subject to the same restrictions and shall be provided adequate and appropriate work space, in order to conduct an audit in compliance with this article with the understanding that as any such on-site visit may limit interference in normal daily activities of COMPANY's office staff, CITY shall make all reasonable effort to accomplish audit tasks as quickly and efficiently as possible, so as to allow COMPANY to return to its regular daily business routine. 22 Article 15: Execution IN WITNESS WHEREOF, the Parties have executed this Energy Services Agreement by their authorized signatures as of this 25th day of May, 2010. THE CITY: By: Title: ~/~~-( ()2 ~~~~~~~~ ATTEST THE COMPANY: gy. ~ ~~- T' le: Vicc P/' s:4/.vr APPROVED AS TO FORM & LANGUAGE 8~ FnHJ.FXECUTION ~ ~z~ ~ ° e 23 Schedule P Alternative Dispute Resolution (ADR) Language ~. All Disputes In the event any dispute or claim related to construction or the contracts should arise between any of the parties to this Agreement, each party agrees to exercise good faith efforts timely manner. The parties shall consider litigation as a last resort, To this end, the parties agree to take affirmative steps to communication open, and to handle all disputes in a reasonable the use of a dispute resolution board. 2. Mediation: Disputes under $50,000 to resolve the matter fairly, amicably, and in a to be employed only when ADR methods fail. communicate effectively, to keep lines of and businesslike manner, which may include Each party to any dispute under $50,000 agrees, upon the request of any other party to the dispute, to submit the matter to mediation in Miami-Dade County, Florida. The parties shall first confer informally with one another to attempt to resolve the dispute. The mediator shall be a person the parties agree is unbiased and qualified to understand the dispute and make the determinations that are required. 3. Methods of ADR: Disputes over $50,000 Each party to any dispute over $50,000 agrees, upon the request of any other party to the dispute, to submit the matter to ADR, in a form to be determined by agreement of the parties, but in a forum in Miami-Dade County, Florida. The parties shall first confer informally with one another to attempt to resolve the dispute. In the event that the assistance of an unbiased neutral is required, the parties shall meet and come to an agreement as to what form the ADR should take and who the unbiased neutral should be. Forms of ADR that may be utilized include, but are not limited to, mediation and mini-trials, but do not include formal arbitration. The unbiased neutral may be a professional mediator, an attorney, an architect, an engineer, a board composed of two (2) or more qualified persons, or any person(s) the parties agreed is unbiased and qualified to understand the dispute and make the determinations that may be required. 4. Authority When ADR is utilized, regardless of the dollar value of the dispute, each party agrees to have in attendance at their mediation (or whatever method is utilized) a person with actual authority to resolve the dispute. 5. Non-parties Persons who have a stake in the dispute but who are not parties to this Agreement may be included in the ADR by consent of the parties. When disputes arise between only persons involved in the project who are not parties to this Agreement, the parties agree to encourage and facilitate the use of ADR when possible. 6. Court Claim The Company agrees that ADR is a condition precedent to the filing of an action or other administrative proceeding seeking economic recovery from CITY in an amount greater than $50,000. 7. Costs of ADR When ADR is utilized, the parties included in the process agree to equally share the costs of same. 24 8. Appendices Any and all written agreements for mediation or other method of ADR must be agreed to by all contractual parties and shall be incorporated into the contract. CITY ACCEPTANCE INITIALS: DATE: 25 Attachment A Construction Process A.1 Construction Process A.1.1 Description of the Work The design, procurement, fabrication, installation and commissioning of the ECMs specified in Schedule A (Equipment to be Installed) and the training services described in Schedule J (Company Training Responsibilities), which are integral to the operation of the ECMs, are referred to in this Agreement as the "Work." The maintenance, monitoring, and savings measurement and verification services detailed in Schedules G and O and the any Post-Acceptance Training services detailed in Schedule J (Company Training Responsibilities), pertormance of which does not commence until after the Commencement Date, are not part of the Work. A.1.2 Supervision of the Work The COMPANY shall supervise and direct the performance of the Work using its reasonable professional skill, attention, and judgment. The COMPANY shall be responsible for site safety and for all construction means, methods, techniques, sequences, and procedures and for coordinating all portions of the Work under this Agreement. A.1.3 Rejection of the Work by the CITY The CITY may reject any sequences or procedures proposed by the COMPANY in connection with the Work which might constitute or create a hazard to the Premises, or to persons or property, or which deviate from the Project Documents or will result in schedule delays or additional costs to the CITY. This provision shall not be construed to mean that Work which is not rejected is therefore approved. A.1.4 Responsibility for the Work The COMPANY shall not be relieved of its obligations to perform the Work in accordance with the Project Documents by reason of observations or inspections, tests or approvals by any person or entity except as expressly agreed to in writing by an authorized representative of the CITY. A.1.5 Coordination of the Work The COMPANY shall consult with the personnel designated by the CITY in order to coordinate the Work, including installation of any ECM, and to provide appropriate training in the operation of any ECM. The COMPANY shall not permit any act that will intertere with the pertormance of the CITY's business activities at the Premises without the prior written approval of the CITY. The COMPANY may install no ECM that will require the hiring of additional personnel by the CITY without the express permission and written approval of the CITY. The COMPANY shall consult with the CITY regarding the coordination of the Work with any other work being performed by other Companies at the Premises. 26 A.1.6 Sufficient Workforce The COMPANY shall furnish a competent and adequate staff as necessary for the proper administration, coordination and supervision of the Work; organize the procurement of all materials and equipment so that they will be available at the time they are needed for the Work; and ensure that an adequate force of skilled workmen are available to complete the Work in accordance with all requirements of this Agreement. A.1.7 Project Manager The COMPANY shall employ a competent project manager who shall be responsible for the coordination of the Work, and who shall be authorized to commit the COMPANY with regard to manpower, schedule, coordination, and cooperation. The project manager shall not have less than two years of documented experience in responsible field supervision for projects of comparable size and complexity. The COMPANY shall give the CITY advance written notice if it intends to remove or replace the project manager. In the event the project manager fails to perform its duties under this Agreement the COMPANY shall provide a competent replacement. A.1.8 Harm to Structure of the Premises The COMPANY shall perform the Work under this Agreement and install the ECMs in such a manner so as not to harm the structural integrity of the Premises or their operating systems, except as specifically described in the Project Documents which have been approved by the CITY. The COMPANY shall repair and restore to its condition immediately preceding the performance of the Work, any area of damage caused by its performance under this Agreement which has not been so described in the Project Documents and approved by the CITY. The COMPANY'S failure to complete the repair or restoration required under this paragraph A.1.8 shall constitute an Event of Default under paragraph 11.3 hereof. A.1.9 Responsibility for Damages The COMPANY shall be responsible for all loss or damage to the Work, the Premises, or to improvements or personal property thereon and the work of other companies caused by the COMPANY'S pertormance of the Work. A.1.10Verification of Dimensions and Existing Conditions The COMPANY is responsible for becoming knowledgeable of the conditions of the Premises relating to the performance of the Work and the conditions under which the Work is to be performed, other than concealed conditions which the COMPANY should not have reasonably been expected to discover or anticipate. All discrepancies between the requirements of the Project Documents and the existing conditions or dimensions shall be reported to the CITY as soon as they are discovered. Failure to verify and report prior to the commencement of Work shall constitute the COMPANY's acceptance of existing conditions as fit for the proper execution of the Work under this Agreement, other than concealed conditions which the COMPANY should not have reasonably been expected to discover or anticipate. A.1.11Changed Conditions Should the COMPANY encounter subsurface or latent physical conditions at the site which differ materially from those indicated in the Project Documents or from those ordinarily encountered and generally recognized as inherent in work of the character provided for in this Agreement, the COMPANY shall give written notice to the CITY before any such condition is disturbed or further disturbed. No claim of the COMPANY under this provision will be allowed unless the COMPANY has given the required notice. The CITY will promptly investigate and, if it is determined that the conditions materially differ from those which COMPANY should reasonably have been expected to discover or anticipate, the CITY will approve such changes in the Project Documents as may be necessary. If such changed conditions cause an increase or decrease in the COMPANY'S cost or time of pertormance, the parties may negotiate a mutually acceptable solution. 27 A.1.12 Procurement Process for ECMs The CITY and the COMPANY shall work together to develop a procurement strategy for the Work which shall be acceptable to both parties and set forth in Schedule U (Procurement Strategy) to this Agreement. Any savings attributable to the procurement and bid process shall inure to the benefit of the CITY. The COMPANY shall review all bid pricing with the CITY and in the event the COMPANY selects the lowest bid, or a bid within 5% of the lowest bid, the COMPANY may proceed with the respective subcontractor or subconsultant. In the event a bid which is in excess of 5% more than the lowest bid is desired by the COMPANY, before proceeding, the bid must first be reviewed and approved by the CITY. A.2 The CITY's Right to Carry-Out the Work In the event that the COMPANY neglects or fails to carry out the Work in accordance with this Agreement and the Project Documents, the CITY may correct such deficiencies after giving twenty (20) business days written notice to the COMPANY and its surety. This shall be without prejudice to any other remedy the CITY may have. CITY may deduct from the payments to be made to the COMPANY for the Work, pursuant to paragraph 6.1 hereof and of Schedule C (Compensation to Company), the amount of all costs incurred in correcting deficiencies made necessary by such neglect or failure. If such payments to be made to the COMPANY are not sufficient to cover such amount, the COMPANY shall be liable in such amount to the CITY. A.2.1 Emergencies In case of bona fide emergencies as determined by the CITY involving public health or public safety or to protect against further loss or damage to the CITY's property or to prevent or minimize serious disruption of CITY services or to insure the integrity of CITY's records, the CITY may cause such Work as is necessary to be performed without prior notice to the COMPANY or its surety. A.2.2 Right to Reject or Stop the Work The CITY may reject any of the Work which does not conform to the Project Documents. If the COMPANY fails to correct defective Work or fails to supply labor, materials or equipment in accordance with the Project Documents or to execute the Work in a workmanlike manner, the CITY may order the COMPANY to stop the Work, or any portion thereof, until the cause for such order has been eliminated. A.2.3 Right to Terminate the Company's Pertormance of the Work If the COMPANY fails or refuses to prosecute the Work with such diligence as to allow completion of the Work substantially in accordance with the Project Installation Schedule, or commits a material breach of any other provision of this Agreement or the Project Documents, and provided that such breach continues for thirty (30) days after written notice to the COMPANY demanding that such breach be cured or if cure cannot be effected in such thirty (30) days, COMPANY'S failure to propose and commence a cure acceptable to the CITY within such thirty (30) days, the CITY may terminate the COMPANY's right to proceed with the Work as specified herein. In no event shall the CITY have any obligation to compensate the COMPANY for delays arising pursuant to the COMPANY's failure or refusal to complete the Work and damages arising in connection therewith. In such case, the CITY will give the COMPANY and its surety written notice of intention to terminate the COMPANY'S right to complete the Work and the reason therefor and, unless within seven (7) business days the delay or violation shall cease or a cure acceptable to the CITY for correcting the situation is proposed, the CITY may issue a termination notice to such effect for the COMPANY and its surety. Thereupon, the surety will be given the opportunity to complete the Work in accordance with the Project Documents. Such completion may include, but not be limited to, the use of a completing company, satisfactory to the CITY, pursuant to a written takeover agreement, the payment of a sum of money required to allow the CITY to complete the Work, or other arrangements agreed to by the CITY and the surety. 28 If within seven (7) business days following the issuance of the termination notice, the surety fails to notify the CITY that it intends to exercise its right to undertake the Work, the CITY may take over the Work, exclude the COMPANY from the Premises and take possession of all of the COMPANY's tools, appliances, equipment and machinery at the Premises and use the same to the full extent they could have been used by the COMPANY (without liability for trespass or conversion), incorporate into the Work all materials and equipment stored at the Premises and finish the Work as the CITY may deem expedient. In the event the CITY terminates the COMPANY's right to complete the Work under this paragraph A.2, the COMPANY shall not be entitled to receive further payments until a Certificate of Acceptance has been delivered pursuant to Article 7 hereof specifying the amount, if any, payable to the COMPANY pursuant to Schedule C (Compensation to Company). If the CITY's expenses in completing the Work exceed the COMPANY'S Compensation for the Work, the COMPANY shall pay the difference to the CITY upon demand therefor. Provided further, that a Certificate of Acceptance directing payment to the COMPANY for any portion of the Work be issued only if the notification required pursuant to Article 7 has been delivered by the COMPANY. If the COMPANY is not able to deliver such notification, the CITY shall not execute and deliver a Certificate of Acceptance and may terminate this Agreement in accordance with the provisions of Article 11 and may pursue any and all remedies provided therein. A.3 Permits and Approvals The COMPANY shall obtain and pay for all necessary permits and approvals for the design, installation and operation of the ECMs. The CITY shall exercise its best efforts to assist the COMPANY. The ECMs and the operation of the ECMs by the COMPANY shall at all times conform to all applicable codes. The CITY cannot and will not waive any permits or approvals required from any other governmental bodies. The COMPANY shall furnish copies of each permit or license which is required to perform the Work to the CITY before the COMPANY commences the portion of the Work requiring such permit or license. If the COMPANY observes that any of the Project Documents are at variance with permits or licenses granted, or laws, ordinances, codes, rules or regulations of governmental authorities, the COMPANY shall promptly notify the CITY in writing and shall make any necessary changes, subject to the approval thereof by the CITY in accordance with the terms of this Agreement. If the COMPANY performs any Work which is contrary to any permit or license granted, or any applicable laws, ordinances, codes, rules or regulations, the COMPANY shall make changes as required to comply therewith and shall bear all costs arising therefrom without additional compensation from the CITY. A.4 Royalties and Patents The COMPANY shall pay all royalties and license fees due to third parties in connection with the Work. The approval of any method of construction, invention, appliance, process, article, device, material, or equipment of any kind by the CITY will only be an approval of its adequacy for the Work, and will not be an approval of the use thereof by the COMPANY in violation of any Patents or other rights of any third person. The COMPANY shall indemnify the CITY against all suits and claims that may be based on an infringement of Patents, trademark or trademark on designs.A.5 Project Schedule The COMPANY shall consult with the CITY concerning the development of a detailed Project Installation Schedule and, recognizing that time is of the essence of this Agreement, shall perform the Work in such manner and with such sufficient equipment and forces to complete the Work in accordance with Schedule K (Project Installation Schedule). 29 A.6 Extensions Extensions of time will be allowed for delays which affect critical items on the Project Installation Schedule arising from unforeseeable causes beyond the control and without the fault or negligence of the COMPANY. A request for an extension of time must be made in writing to the CITY within fifteen (15) calendar days after the cause of delay. In the case of a continuing cause of delay, only one request is necessary. The grant of an extension of time to the COMPANY shall not impair or prejudice the rights of the CITY hereunder. A.7 Compensation for Delay (a) Certain risks and uncertainties in connection with the Work are assumed by the COMPANY as a part of this Agreement and are included in the COMPANY Compensation for the Work. Thus, the COMPANY, except as otherwise definitely specified herein, shall bear all loss or damage for hindrances or delays during the progress of any portion of the Work and also all loss or damage arising out of the nature of the work to be done, or from inclement weather, or from any unforeseen and unexpected conditions or circumstances encountered in connection with the Work, and except as otherwise definitely specified in this Agreement, no payment shall be made by the CITY for such loss or damage. (b) The COMPANY shall be entitled to payment from the CITY only for those actual damages, costs, or expenses which are directly attributable to delays in the performance of the Work which are caused by the CITY. The CITY shall not be liable to the COMPANY for special, indirect, consequential or punitive damages, even if the CITY has been advised such damages are possible. A.8 Subcontracts and Subcontractors The COMPANY shall have the right to have any of the services to be provided by the COMPANY under this Agreement accomplished by subcontractors pursuant to written subcontracts between the COMPANY and such subcontractors. The COMPANY shall, upon entering into any agreement with a subcontractor, furnish the CITY with an executed copy thereof. All subcontracts shall be subject to, consistent with, and in conformance with all applicable State and federal laws, rules, regulations, and codes, and shall contain provisions that require all services to be performed in strict accordance with the requirements of this Agreement and shall provide that the subcontractors are subject to all the terms of this Agreement. Provided that such agreements do not prejudice any of the CITY's rights under this Agreement, such agreements may contain different provisions than are provided herein with respect to extensions of schedule, time of completion, payments, guarantees, and matters not affecting the quality of the Work. The COMPANY shall not grant, or allow to exist, any lien or security interest for labor or material or otherwise on the ECMs, the Premises or any other property owned by the CITY. A.9 Interim Savings; Procurement Savings and Utility Rebates Energy savings generated during the Interim Period, savings resulting from the procurement process set forth on Schedule U (Procurement Strategy) and utility rebates secured or obtained due to the installation of the ECMs at the Premises belong to the CITY. 30 A.10 Hazardous Materials (a) The COMPANY acknowledges that compliance with the National Emission Standard for Hazardous Air Pollutants as promulgated by the United States Environmental Protection Agency pursuant to Section 112 of the Clean Air Act is a continuing obligation requiring any and all demolition or renovation activity completed by or on behalf of the CITY, to conform to the standards for such activity as set forth in 40 CFR 61.145. The COMPANY shall observe all notification procedures established by the United States and Florida Environmental Protection agencies in the execution of the Work under this Agreement. (b) The pertinent provisions of the Hazardous Substances Construction Disclosure Act, 415 ILCS 70/1, (the "Act") shall apply in the event that the COMPANY or any of its subcontractors encounters any hazardous substance or material covered by the Act in the performance of the Work, the existence of which has not previously been disclosed to the COMPANY by the CITY. The COMPANY shall, before disturbing such materials, immediately notify the CITY of the location thereof. The COMPANY shall advise the CITY as to whether it is feasible to re-route the Work as to avoid such materials. If such re-routing is reasonably feasible, the COMPANY shall do so without additional compensation hereunder. If such re-routing or avoidance is not reasonably feasible in the judgment of the CITY and such material must be disturbed or relocated to complete the Work, and if (i) removal or containment of the hazardous substance or material cannot be effectuated without a cessation of the Work; or (ii) applicable law, rule or regulation requires cessation of the Work, or (iii) continuation of the Work exposes any person to a substantial risk, the COMPANY may suspend its performance of the Work without penalty until the substance or material is removed or contained by the CITY. (c) The following options are available to the CITY in the event that undisclosed hazardous materials are encountered in the performance of the Work by the COMPANY or its subcontractors: (i) If feasible, the CITY may direct the COMPANY to modify the scope of the Work to eliminate portions of the Work affected by the undisclosed hazardous substance or material. (ii) The CITY may terminate this Agreement upon payment to the COMPANY of the amount due for services or materials and equipment supplied by the COMPANY prior to suspension of the Work, including damages caused by the delay. Provided, however, that the CITY shall not be liable for damages or other costs or expenses incurred by the COMPANY if the existence of the hazardous substance or material was disclosed to the COMPANY by the CITY or, if as a result of the COMPANY's review of the Project Documents, including any Asbestos Management Plan developed for the Premises and its investigation of the Premises, the COMPANY should reasonably have been expected to discover or anticipate the existence of the hazardous substance or material and the COMPANY could have developed the scope of the Work in such a manner as to avoid said hazardous substance or material. (d) The COMPANY and the CITY agree that any work relating to (i) asbestos, material containing asbestos, or the existence, use, detection, removal, containment or treatment thereof, or (ii) pollutants, hazardous wastes, hazardous materials, contaminants (collectively "Hazardous Materials") or the storage, handling, use, transportation, treatment or the disposal, discharge, leakage, detection removal, or containment thereof which is not specifically provided for in this Agreement, is the responsibility of the CITY. Notwithstanding the foregoing, the COMPANY will utilize due diligence in order to determine whether the Work will require the removal of PCB ballasts and whether asbestos is likely to be encountered in the performance of the Work. COMPANY shall provide the CITY with an estimate for the cost of removal and disposition of PCB ballasts and asbestos it expects may be encountered in the performance of the Work.. If an Asbestos Management Plan has been developed for the Premises, the CITY shall make said plan available for the COMPANY'S review and inspection throughout the Interim Period. 31 A.11 Material and Workmanship (a) The COMPANY shall ensure that all materials used by the COMPANY and its subcontractors and workmanship performed or caused to be performed by the COMPANY in connection with the Work meets or exceeds all applicable codes and is performed in a workmanlike manner. Where conflicts exist between applicable codes, the more stringent provision shall apply; (b) The COMPANY shall ensure that all equipment and materials to be used in the Work for which Underwriters Laboratory labeling services is provided shall be UL labeled; (c) The COMPANY shall obey the following list of codes where applicable (1) Applicable construction and electrical code; (2) Underwriters Laboratories (UL); (3) Insulated Power Cable Engineers Association (IPCEA); (4) National Electrical Code (NEC); (5) National Electrical Manufacturers Association (NEMA); (6) American National Standards Institute (ANSI); and (7) Institute of Electrical and Electronic Engineers (IEEE). (d) The COMPANY shall timely advise the CITY in writing of all existing equipment and materials to be replaced at the Premises as part of the Work and the CITY shall within ten(10) days designate in writing to the COMPANY the equipment and materials which should not be disposed of off-site by the COMPANY. The COMPANY shall be responsible for the disposal of all equipment and materials removed or replaced through its performance of the Work in accordance with all applicable laws and regulations regarding such disposal, except those items designated by the CITY as nondisposable. The cost of disposal to be performed by the COMPANY is included in the COMPANY compensation for the Work set forth in Schedule C (Compensation to Company). A.12 Warranty of Materials The COMPANY warrants that all materials and equipment installed as part of the Work will be new unless otherwise specified, and that all work will be of good quality, free from faults and defects, and in conformance with the Project Documents. All work not so conforming to these requirements may be considered defective. If required by the CITY, the COMPANY shall furnish satisfactory evidence as to the kind and quality of materials and equipment. This warranty is not limited by the provisions of paragraph 8.1 of the Agreement. This warranty of materials, equipment and workmanship is separate from, independent of, and in addition to any other guarantees in this Agreement or any other warranties in this Agreement or required by the Project Documents. A.13 Responsibility for Materials The CITY does not assume any responsibility for the availability of any controlled materials or other materials and equipment required for the Work. However, the CITY reserves the right to review and approve the quality and standards for all materials pursuant to the ECM Submittal review process set forth in Articles 2.2 and 2.3 of the Agreement. The COMPANY shall be responsible for the contracted quality and standards of all materials, components or completed Work furnished by the COMPANY pursuant to the terms hereof. Materials, components or completed Work which fails to comply with this Agreement and the Project Documents may be rejected by the CITY and shall be replaced by the COMPANY at no cost to the CITY. The COMPANY shall remove from the Premises within a reasonable time any materials or components so rejected at the entire expense of the COMPANY, after written notice has been delivered by the CITY to the COMPANY that such materials or components have been rejected. (Optional) A.14 Inspections (a) All materials and equipment and each part of the detail of the Work shall be subject at all times to inspection by the CITY or its designated representatives or consultants, and the COMPANY will be held strictly to the true 32 intent of this Agreement and the Project Documents with regard to quality of materials, workmanship, and the diligent execution of the Work. (b) The COMPANY shall allow the CITY access to all parts of the Work, and shall furnish such information and assistance as is required to make a complete and detailed inspection or inspections. (c) All material and equipment installed as part of the Work must be inspected, tested and approved in accordance with the Project Documents and this Agreement prior to its use. (d) The COMPANY shall, if the CITY requests, remove or uncover such portions of the finished Work as the CITY may direct. After the examination, the COMPANY shall restore said portion of the Work to the standard required by this Agreement and the Project Documents. If the Work thus exposed or examined proves acceptable, the expenses of uncovering or removing and the replacing of the parts removed shall be the responsibility of the CITY and such uncovering, removing and replacing shall be deemed to be an excusable event of delay, if a delay in completion is caused thereby. If the Work so exposed or examined has not been performed in accordance with the Project Documents, the expense of uncovering, removing and replacing any portion of the Work necessary to comply with this Agreement and the Project Documents shall be borne by the COMPANY and requests for a time extension or claims for delay will not be granted. (e) Upon completion of each individual ECM in each respective facility, COMPANY will provide to CITY a Notice of Substantial Completion (see Exhibit II (iii) indicating that such ECM is substantially complete and is ready to be inspected. CITY shall schedule preliminary inspections of the Work within twenty (20) calendar days of receipt of such Notice of Substantial Completion. If such Work is not acceptable to the CITY at the time of such preliminary inspections, the COMPANY will be provided written notice (a "Punchlist") as to the particular defects to be remedied before the Work will be accepted. COMPANY will work diligently to correct all defects noted by CITY during such preliminary inspection, and will provide CITY with a second Notice of Substantial Completion once all such defects have been so corrected. CITY shall schedule afollow-up inspection of the Work within ten (10) business days of receipt of this second Notice of Substantial Completion. This inspection process will continue until all such defects have been corrected to the CITY's satisfaction. The date such Work is approved by the CITY, as evidenced by an accepted Notice of Substantial Completion for such Work, shall also be the date of beneficial use to the CITY for the applicable ECM, for purposes of commencement of the warranty period set forth in Article 8.1 of the Agreement and in Schedule R (Warranties) for such ECM. Notwithstanding the foregoing, no Final Certificate of Acceptance (see Exhibit II(ii) shall be executed until a final inspection has been performed, and the CITY has accepted the installation and operation of the particular ECM, and the COMPANY has complied with all required acceptance submittals, as provided in Article 7.2 of the Agreement A.15 Project Meetings The COMPANY shall provide for regularly scheduled project meetings in the Project Installation Schedule, and shall give timely advance written notice and agenda of such meetings to the CITY. The COMPANY shall record minutes and distribute copies of minutes of meetings to the CITY within five (5) business days after each meeting. The COMPANY shall schedule additional project meetings if requested by the CITY. A.16 Assignment of Claims The CITY shall not be bound by any assignment by the COMPANY to third parties of moneys due or to become due or of any other claims it may have under this Agreement except where the CITY consents in writing to be so bound such consent not to be unreasonably withheld conditioned or delayed. 33 A.17 Claims and Disputes The COMPANY shall promptly notify the CITY in writing of any claims or disputes relating to the Work. Failure to notify the CITY in such instances may result in rejection of any such claim. 34 EXHIBIT I PAYMENT AND PERFORMANCE BONDS TO BE PROVIDED AT CLOSING 35 EXHIBIT II (i) CERTIFICATE OF ACCEPTANCE ENERGY AUDIT REPORT [PLACE ON CITY LETTERHEAD] Mr. john L. Bosch Vice President Ameresco, Inc. 2202 N. West Shore Blvd. Tampa, FL 33602 Re: Detailed Energy Audit Report dated as of September 8, 2009 provided to The City of Miami Beach ("CITY") by Ameresco, Inc. ("Ameresco") Dear Mr. Bosch: CITY hereby acknowledges its receipt and acceptance of the Detailed Energy Audit Report referenced in the Energy Services Agreement dated May 25, 2010. Sincerely, The City of Miami Beach By: Duly Authorized Signatory Name: Title: Date accepted: 36 EXHIBIT H (ii) CERTIFICATE OF ACCEPTANCE ENERGY CONSERVATION MEASURES [PLACE ON CITY LETTERHEAD] Mr. John L. Bosch Vice President Ameresco, Inc. 2202 N. West Shore Blvd. Tampa, FL 33602 Re: Energy Services Agreement (the "ESA"; capitalized terms used and not defined herein shall have the meanings given to such terms in the ESA) dated as of May 25, , 2010 by and between the City of Miami Beach ("CITY") and Ameresco, Ina ("Ameresco") Dear Mr. Bosch: The CITY hereby acknowledges its receipt and acceptance of all ECMs described in Schedule A of the ESA which are installed and in good working condition. Sincerely, The City of Miami Beach By: Duly Authorized Signatory Name: Title: Date accepted: 37 EXHIBIT II (iii) NOTICE OF SUBSTANTIAL COMPLETION PROJECT NAME & ADDRESS: The installation of [list each ECM being accepted with this certificate) under the ESA as defined below has/have been reviewed and found to be substantially complete. The date of Substantial Completion of the forgoing ECM(s) is hereby established as: SUBSTANTIAL COMPLETION DATE: The date of Substantial Completion of an ECM is the date certified by CITY when such ECM is sufficiently complete in accordance with the Agreement so that CITY derives beneficial use thereof. The Substantial Completion date set forth above is the date of commencement of applicable warranties for such ECM(s), as required by the Energy Services Agreement dated May 25, 2010. A list of items to be completed or corrected is identified below as punchlist items. The failure to include any items on such punchlist does not alter the responsibility of Ameresco to complete all Work in accordance with the Agreement. CONTRACTOR: Ameresco, Inc., 2202 N. West Shore Blvd., Tampa, FL 33602 AUTHORIZED SIGNATURE: NAME: CITY: [CITY [ADDRESS[ AUTHORIZED SIGNATURE: (type or print) NAME: (type or print) DATE: DATE: Y U1V l,t1L1J 1 .vttacn aodmonat page(s) as necessary. Number of pages attached PROJECT NO.: CONTRACT DATE: DESCRIPTION: 38 EXHIBIT II (iv) NOTICE OF FINAL COMPLETION ENERGY CONSERVATION MEASURES [PLACE ON AMERESCO LETTERHEAD] Mr. Title City of Miami Beach 1700 Convention Center Drive Miami Beach, FL 33139 Re: Energy Services Agreement (the "ESA"; capitalized terms used and not defined herein shall have the meanings given to such terms in the ESA) dated as of May 25, 2010 by and between the City of Miami Beach ("CITY") and Ameresco, Inc. ("Ameresco") Dear Mr. Ameresco hereby certifies to CITY that (i) it has completed the installation and commissioning and commenced operating all of the Energy Conservation Measures ("ECMs") specified in Schedule A (Equipment to 6e Installed); (ii) no Event of Default under Article 11 exists; (iii) the Energy Savings Guaranty set forth in Schedule B (Energy Savings Guaranty) is in full force and effect; and (iv) the CITY has inspected and accepted said installation and operation as evidenced by the Certification of Acceptance as set forth in Exhibit II (ii). Sincerely, AMERESCO By: Name: John L. Bosch Title: Vice President Date of N 39 DRAFT 5-5-10 EXHIBIT III EQUIPMENT WARRANTIES TO BE PROVIDED UPON COMPLETION OF CONSTRUCTION, PER SCHEDULE R. EXHIBIT IV NOTICE TO PROCEED [PLACE ON CITY LETTERHEAD] Mr. John L. Bosch Vice President Ameresco, Inc. 2202 N. West Shore Blvd. Tampa, FL 33602 SUBJECT: NOTICE TO PROCEED Dear Mr. Bosch: In accordance with Section 4.2 and Schedule C of the Energy Services Agreement (the "ESA") dated as of May 25, 2010, by and between the City of Miami Beach ("CITY") and Ameresco, Inc. ("COMPANY"), CITY hereby submits to COMPANY this Notice to Proceed in relation to the Scope of Services as defined in the ESA. Sincerely, City of Miami Beach By: Duly Authorized Signatory Name: Title: Date: 2