Attachment G _ Guaranteed energy Savings Perf.pdf

GUARANTEED ENERGY SAVINGS PERFORMANCE CONTRACT

BY AND BETWEEN

[STATE AGENCY NAME]

AND

[ENERGY SERVICE PROVIDER]

Project #[PROJECT NUMBER]

TABLE OF CONTENTS

ARTICLE 1. DEFINITIONS

ARTICLE 2. THE PROJECT

2.1 Energy Conservation Measures

2.2 Measurement and Verification

2.3 Annual Energy Savings Guaranty and Bonds

2.4 Commissioning

2.5 Training, Maintenance, Monitoring, and Other Work

ARTICLE 3. ENERGY CONSERVATION MEASURES

3.1 Performance of the Work

3.2 ESP’s Responsibility for the Work

3.3 Standards of the Work

3.4 ECM Submittal Process

3.5 ECMs Modifications

3.6 ECM Malfunction

3.7 Supervision

3.8 Restoring and Cleaning the Site and the Project

3.9 Means, Methods, Techniques, Sequences, Procedures and Safety

3.10 Indemnity

ARTICLE 4. MAINTENANCE, MONITORING, TRAINING, AND RELATED TASKS

4.1 ESP’s Maintenance, Monitoring, Commissioning, and Related Tasks

4.2 Owner’s Maintenance, Monitoring, and Related Tasks

4.3 Training by ESP

4.4 Owner’s Right to Self-Perform

ARTICLE 5. ANNUAL ENERGY SAVINGS GUARANTY

5.1 Annual Energy Savings Guaranty

5.2 Annual Review and Guaranty Payment

ARTICLE 6. SURETY BONDS AND INSURANCE

6.1 Payment and Performance Bonds

6.2 ESP Insurance Requirement

ARTICLE 7. PAYMENT OBLIGATIONS

7.1 Owner’s Payment Obligations

7.2 ECM Installation Payments

7.3 Withholding ECM Installation Payments

7.4 Withholding ECM Continuing Services Payments

7.5 Limitations of Owner’s Payment Obligations

ARTICLE 8. CONTRACT DOCUMENTS

8.1 Contract Documents

8.2 Schedules and Exhibits

8.3 Entire Agreement

8.4 No Privity with Others

8.5 Successors and Assigns

8.6 Ownership of Contract Documents

8.7 Ownership of Certain Property Rights

8.8 Intent and Interpretation

8.9 Hierarchy of Contract Documents

8.10 Governing Law

ARTICLE 9. CHANGE ORDERS AND CONTRACT AMENDMENTS

9.1 Changes Permitted

9.2 Changes in ECM Installation Price, Baseline Adjustments, and ECM Continuing Services

Payments Error! Bookmark not defined.

9.3 Contract Amendments

9.4 Effect of Executed Change Order or Contract Amendment

9.5 Notice to Surety; Consent

ARTICLE 10. PROJECT INSTALLATION SCHEDULE, CONTRACT TIME FOR WORK,

TERMINATION, AND EVENTS OF DEFAULT

10.1 Project Installation Schedule; Contract Time for Work

10.2 Contract Termination

10.3 Survival of Obligations

10.4 Events of Default by Owner

10.5 Events of Default by ESP

10.6 Remedies upon Default by ESP

10.7 Right to Offset and Recover

10.8 Suspension

ARTICLE 11. WARRANTIES

11.1 ECM Warranties

11.2 Warranty of the Work

11.3 Notification of Warranty Events

11.4 ESP’s Responsibility for Warranty Work

ARTICLE 12. THE PREMISES

12.1 Description of the Premises

12.2 Ownership of Existing Property

12.3 Location and Access

12.4 Material Changes

12.5 Reported Material Changes; Notice by Owner

12.6 Reported Material Changes; Adjustments to Baseline

12.7 Unreported Material Changes

12.8 Owner’s Election Upon Material Changes

12.9 Hazardous Materials

ARTICLE 13. ACCEPTANCE

13.1 Acceptance of the Work

13.2 Documents Provided With Notice of Final Completion

13.3 Ownership of Documents

ARTICLE 14. CLAIMS

14.1 Claim Procedures and Conditions

14.2 Claims for Concealed and Unknown Conditions

14.3 Claims for Additional Compensation

14.4 Claims for Additional Time

14.5 Limitation on Claims and Owner’s Liability

ARTICLE 15. STATUTORY AND REGULATORY RULES

15.1 Approval by the Authority

15.2 Appropriation

15.3 Benefits Inure to Owner

15.4 Owner’s Limited Financial Obligation

15.5 Notification to Owner’s Utilities

15.6 Prompt Pay Act and Retention Law Inapplicable

15.7 Davis-Bacon Act

15.8 Employment Authorization Program

15.9 Generation of Electricity; Compliance with Laws

ARTICLE 16. EXECUTION UNDER SEAL

GUARANTEED ENERGY SAVINGS PERFORMANCE CONTRACT

This Guaranteed Energy Savings Performance Contract (“Agreement”) is made and entered into by and between Owner (“Owner”) and ESP (“ESP”) under seal to provide energy conservation measures and related services to Owner’s premises, as more fully described in the Contract Documents.

ARTICLE 1. DEFINITIONS

Unless otherwise provided herein, the following terms shall be defined as follows:

1.1 “Acceptance of the Work” shall mean a time when ESP’s performance of the entire scope of the ECM Installation Work is complete in strict conformance with the Contract Documents, in accordance with Section 13.1.

1.2 “Act” shall mean the Guaranteed Energy Savings Performance Contracting Act, O.C.G.A. §§ 50-37- 1 through 50-37-8, as may be amended from time to time.

1.3 “Agreement,” as used in the GESPC, shall mean the Guaranteed Energy Savings Performance Contract, or GESPC.

1.4 “Annual Review” shall mean the annual review, reconciliation, and verification of the Verified Savings in accordance with Section 5.2 and Schedule M (Methods of Savings Measurement and Verification).

1.5 “Audit” shall mean the Investment Grade Energy Audit performed by ESP pursuant to O.C.G.A. § 50-37-3(e), in accordance with the Audit Agreement.

1.6 “Audit Agreement” shall mean the Investment Grade Energy Audit Agreement pursuant to which, and in accordance with which, an ESP shall conduct the Audit.

1.7 “Audit Report” shall mean the report that ESP is required to produce pursuant to the Audit Agreement and which shall include a summary of ESP’s recommendations for ECMs resulting from the Audit.

1.8 “Authority” shall mean the Georgia Environmental Finance Authority.

1.9 “Base Period” shall mean the period of time during for which ESP shall examine consumption and usage of electricity, fossil fuels, water, and other applicable utilities for the purpose of developing an appropriate Baseline.

1.10 “Baseline” shall mean a base year (or other period agreed to by Owner) of consumption and usage data that is representative of the Base Period, established by agreement in the GESPC, and which is used to calculate Verified Savings in accordance with the GESPC. The Baseline shall be set forth in Schedule E (Baseline).

1.11 “Change Order” shall mean a written order to ESP executed by the authorized representative of Owner, issued after execution of the GESPC, authorizing a change in the Contract Documents, which may include, without limitation, a change in the Work; an adjustment in ECM Installation Payments or ECM Continuing Services Payments, or Baseline; or a change in dates required for Substantial Completion, Final Completion, or any other deadline hereunder, or any combination thereof, in accordance with Article 9 of the GESPC.

1.12 “Contract Amendment” shall mean a written agreement that has been executed by Owner and ESP, in accordance with Article 9 of the GESPC.

1.13 “Contract Documents” shall consist of the documents identified in Section 8.1 that form the GESPC.

1.14 “Contract Time for Verified Savings” shall mean the period of time beginning on the later of (i) Acceptance of the Work or (ii) the date Owner provides a Notice of Commencement of Contract Time for Verified Savings (if any), and shall end at the end of the fiscal year that is INSERT YEARS years thereafter.

1.15 “Contract Time for Work” shall mean the period of time beginning on the date that the ECM Installation Work under the GESPC is permitted to proceed, through the date established for Final Completion.

1.16 “ECM” shall mean energy conservation measures, as defined in the Act, that (i) are identified in Schedule A (Energy Conservation Measures and Other Work), (ii) are installed in accordance with the GESPC, and (iii) constitute capital expenditures for federal income tax purposes.

1.17 “ECM Continuing Services” shall mean annual services provided pursuant to the GESPC, including but not limited to commissioning, training, operation, maintenance, monitoring, repairs, replacements, and adjustments, measurement and verification, and the Annual Review.

1.18 “ECM Continuing Services Payments” shall mean compensation for ECM Continuing Services provided pursuant to this Agreement and Schedule C-2 (ECM Continuing Services Payments).

1.19 “ECM Installation Payments” shall mean compensation for ECM Installation Work provided pursuant to this Agreement and Schedule C-1 (ECM Installation Payments).

1.20 “ECM Installation Work” shall mean work associated with the design, procurement, fabrication, construction, installation, and testing of ECMs provided pursuant to the GESPC.

1.21 “ECM Modification” shall mean the modification or replacement of ECMs, installation of additional ECMs, revisions to procedures for the operation of ECMs, or implementation of other procedures at the Premises, in accordance with Section 3.5 of the GESPC.

1.22 “ECM Submittal Schedule” shall mean a schedule identifying the dates for submission of all ECM Submittals as set forth in the GESPC.

1.23 “ESP” shall mean the Energy Services Provider entering into this GESPC.

1.24 “Event of Default” shall have the meaning set forth in Sections 10.4 with respect to Owner and 10.5 with respect to ESP.

1.25 “Event of Force Majeure” shall have the meaning set forth in Section 14.4.

1.26 “Final Completion” shall mean that stage in the progression of the Work under the GESPC when

ESP has fully performed the Work, including but not limited to the ECMs, in strict accordance with the Contract Documents, except for the warranty obligations and such other obligations that, as permitted by the GESPC, extend beyond Final Completion of the Work.

1.27 “Fiscal Year” (whether or not such term is capitalized) shall mean the fiscal year adopted by the State of Georgia. If a period of time begins on a date that is not the first day of the State of Georgia’s fiscal year, then the first fiscal year for such period of time shall be shortened so as to end on the day before the first day of the State of Georgia’s next fiscal year. If a period of time ends on a date that is not the last day of the State of Georgia’s fiscal year, then the last fiscal year for such period of time shall be shortened so as to end on the day the period of time ends.

1.28 “Guaranteed Energy Savings Performance Contract” or “GESPC” shall mean the contract for the evaluation, recommendation, and implementation of one or more ECMs, and associated guaranty of Guaranteed Savings, in accordance with the Act and as more fully set forth in the terms of the

GESPC.

1.29 “Guaranteed Savings” shall mean the level of energy savings, operational cost savings, and revenue enhancements identified in Schedule B (Guaranteed Savings) for each fiscal year.

1.30 “Industry Engineering Standards” shall mean

(a) Life cycle costing;

(b) The R.S. Means-estimated costing method developed by the R.S. Means Company;

(c) Historical data;

(d) Manufacturer's data;

(e) American Society of Heating, Refrigerating, and Air-Conditioning Engineers (ASHRAE) standards;

(f) International Performance Measurement and Verification Protocol; and

(g) Other applicable technical performance standards established by nationally recognized standards authorities, but only if Owner specifically consents in writing to the use of such standard.

1.31 “Material Change” shall mean any change in or to the Premises after Acceptance of the Work, not covered by Schedule K (Current and Known Future Capital Projects at the Premises) of the GESPC, whether structural, operational or otherwise in nature, that results in an increase or decrease in Verified Savings by at least INSERT PERCENT, in the aggregate, after adjustments to account for variables that are not, in whole or in part, within ESP’s control. A change is not a Material Change if it results, in whole or in part, from ESP’s failure to perform any obligation in accordance with the Contract Documents, including but not limited to defective or deficient installation of ECMs and Work, failure to perform or properly perform maintenance, repairs, replacements, or other tasks under Section 4.1, or failure to perform or properly perform any duty in connection with the Audit. A change is not a Material Change if it results, in whole or in part, from malfunction or nonperformance of an

ECM.

1.32 “Notice of Commencement of Contract Time for Verified Savings” shall mean the written document executed by Owner indicating that the Contract Time for Verified Savings shall begin. Such notice shall not relieve ESP of any obligation under the GESPC or the Audit Agreement.

1.33 “Owner” shall mean the State Agency entering into this GESPC.

1.34 “Premises” shall mean the facilities listed in Schedule D (Premises) of the GESPC.

1.35 “Project” shall mean the design and installation of ECMs, operation and maintenance of ECMs, and all other Work and services required under a GESPC.

1.36 “Project Installation Schedule” shall mean the schedule for ECM Installation Work contained in Schedule J (Project Installation Schedule).

1.37 “Substantial Completion” shall mean that stage in the progression of the Work under the GESPC when the Work is sufficiently complete in accordance with the Contract Documents that Owner can take beneficial use and occupancy of the Work, Project, and Premises, including but not limited to ECMs, and can utilize the Work, Project, and Premises for their intended purpose. Partial use or occupancy of the Project shall not result in the Project being deemed substantially complete, and such partial use or occupancy shall not be evidence of Substantial Completion.

1.38 “Verified Savings” shall mean actual energy savings, operational cost savings, and revenue enhancements realized with reference to the Baseline set forth in Schedule E (Baseline) of the GESPC, and determined in accordance with the methods and procedures in Schedule M (Methods of Savings Measurement and Verification) of the GESPC, in accordance with Section 5.2 of the GESPC. Schedule E shall identify the Baseline with reference to fiscal years. Verified Savings shall result solely from ECMs installed or performed by ESP in accordance with the GESPC.

1.39 “Work” shall mean all work and services required or implied by, or reasonably inferable from, the GESPC and Contract Documents, including but not limited to (i) ECM Installation Work identified in Schedule A (Energy Conservation Measures and Other Work) and installed in or on the Premises listed in Schedule D (Premises) of the GESPC, in accordance with Section 3.1 of the GESPC and

(ii) ECM Continuing Services.

ARTICLE 2. THE PROJECT

2.1 Energy Conservation Measures

ESP shall design, procure, fabricate, construct, install, commission, and test the ECMs specified in Schedule A (Energy Conservation Measures and Other Work) with respect to the Premises. ESP shall perform all activities and provide all materials, supplies, tools, and equipment necessary to install and operate the ECMs and perform all other Work with minimal interference with Owner’s operations.

2.2 Measurement and Verification

ESP shall measure and verify the Verified Savings resulting from the ECMs in accordance with the Methods of Savings Measurement and Verification set forth in Schedule M (Methods of Savings Measurement and Verification). At a minimum, the methods identified in Schedule M (Methods of Savings Measurement and Verification) shall comply with the most recent version of the International Performance Measurement and Verification Protocol or other Industry Engineering Standard (as such term is defined in the Act), but only if Owner consents to such other Industry Engineering Standard.

Without diminishing ESP’s obligation, Owner may hire a competent third party to measure and verify Verified Savings in accordance with this Agreement. If the Verified Savings determined by the third party differ from the amount determined by ESP, then Owner and ESP shall attempt to agree on the appropriate level of Verified Savings. If Owner and ESP agree on the appropriate Verified Savings, they shall execute a Contract Amendment in accordance with Article 9.

If Owner and ESP are unable to mutually agree on the appropriate level of Verified Savings for a particular fiscal year, then Verified Savings shall be determined by a third party as provided in this Section.

Within five (5) days of Owner’s request, ESP shall provide Owner with a list of at least five (5) third parties that are independent of ESP and all of its affiliates, and who are qualified to determine the appropriate level of Verified Savings. Owner may select a third party from such list. If Owner does not select a third party from ESP’s list, then Owner and ESP shall each, within five (5) days of Owner’s request, select one independent third party who will collectively select another independent third party to determine the appropriate level of Verified Savings. If ESP fails to provide the list of independent third parties, or fails to make a selection of its independent third party as provided in this Section, Owner shall have the right to select the third party to determine the appropriate level of Verified Savings in its sole discretion. The third party selected pursuant to this Section shall be hired by Owner. The findings and report, if any, of such third party shall be provided to ESP.

2.3 Annual Energy Savings Guaranty and Bonds

ESP shall guarantee annual Guaranteed Savings as set forth in Article 5, shall provide a surety instrument to secure such guaranty as set forth in Article 5, and shall provide performance and payment bonds as set forth in Article 6.

2.4 Commissioning

ESP shall conduct a thorough and systematic performance test of each element and total system of the installed ECMs in accordance with Schedule N (Systems Startup and Commissioning of ECMs). ESP shall provide advance written notice of at least ten (10) business days to Owner of the scheduled tests. Owner shall have the right to designate representatives to be present at any or all such tests including representatives of the manufacturers of the ECMs. ESP shall demonstrate that each ECM (and each element thereof) complies with the requirements of the Contract Documents. At no additional cost to Owner, ESP shall correct or adjust all deficiencies in the operation of the ECMs as necessary to bring each ECM into compliance with the Contract Documents.

2.5 Training, Maintenance, Monitoring, and Other Work

In accordance with Article 4, ESP shall provide training described in Schedule I (ESP Training Responsibilities), and any operation, maintenance, monitoring and related services described in Schedule F (ESP Maintenance Responsibilities), and all other services and Work specified in the Contract Documents.

ARTICLE 3. ENERGY CONSERVATION MEASURES

3.1 Performance of the Work

ESP shall perform or cause to be performed the Work in strict accordance with the Contract Documents. The Work shall also include whatever is done by or required of ESP to perform and complete its duties under the Contract Documents, including but not limited to the following: the provision or furnishing of labor, supervision, services, materials, supplies, equipment, fixtures, appliances, facilities, tools, transportation, storage, power, permits and licenses required, and fuel, heat, light, cooling and all other utilities as required by this Agreement.

Notwithstanding the preceding sentence, ESP may request Owner to provide power, fuel, heat, cooling, or other utilities. Upon such request Owner may, in its sole and complete discretion, elect to provide such utilities at a price set by Owner, but Owner shall have no obligation to provide such utilities. If Owner elects to provide such utilities, ESP shall indemnify, hold harmless, and defend Owner against any damages, losses, or expenses arising from ESP’s use of Owner’s facilities or utilities at the Premises.

No later than INSERT DAYS days after execution of this Agreement, ESP shall provide detailed drawings and specifications concerning the ECMs and associated equipment and materials, and all impacted areas of the Premises, for Owner’s review and comment. Such documents shall become the property of Owner without restriction. ESP shall make such reasonable modifications to the drawings and specifications as Owner may require. Upon Owner’s approval of the drawings and specifications, ESP shall proceed to provide ECM Submittals as set forth in Section 3.4. Owner’s approval of any drawings, specifications, or submittals shall not be evidence that such documents, and associated Work pursuant thereto, conform to the requirements of the Contract Documents, nor shall such approval relieve or diminish in any way ESP’s obligation to comply with the Contract Documents.

3.2 ESP’s Responsibility for the Work

ESP shall perform all Work strictly in conformance with the Contract Documents. Compliance with the Contract Documents shall be and remain the responsibility of ESP. Owner or its representatives and consultants may review, inspect, and test the Work from time to time. Any review, approval, testing, or acceptance of, or payment for, any or all of the Work shall not relieve ESP of its responsibility for the Work and compliance with the Contract Documents.

3.3 Standards of the Work

ESP shall assure that all of the Work is accomplished in a workmanlike manner and in compliance with the Contract Documents 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 Georgia, if required by law. All Contract Documents which are required to be prepared by ESP shall be in accordance with all applicable codes, standards and regulations, and shall be prepared by qualified personnel. Where required by law, Contract Documents shall bear the stamp or seal of architects or engineers licensed in the State of Georgia.

3.4 ECM Submittal Process

3.4.1 Coordination With Owner

ESP recognizes that some or all of Owner’s Premises are currently in use and operation and that ESP must coordinate with Owner to minimize any interference. Among other means, ESP will use the submittal process described in Section 3.4 as a means of minimizing interference. ESP recognizes that delays are to be expected from coordination required by this Section 3.4.1, and from Owner’s review and approval of ECM Submittals. Accordingly, ESP shall not assert, and hereby waives, any claim for reasonable delays resulting from coordination of Work and Owner’s review and approval of ECM Submittals.

In its sole discretion, Owner may designate representatives or retain consultants, including architects and engineers, to consult with and advise ESP regarding the Work or ECM Submittals on Owner’s behalf.

Such representatives shall not, however, have authority to bind Owner for purposes of Change Orders or other Contract Amendments, unless Owner specifically consents in writing. The provisions of Article 9 shall govern such Change Orders and Contract Amendments. ESP shall at all times provide access to the Work to Owner and its representatives and consultants. ESP agrees to comply with any reasonable demands of such representatives and consultants.

3.4.2 ECM Submittals

ESP shall submit to Owner all shop drawings, product data, samples, mock-ups, and other submittals related to each ECM (“ECM Submittals”) for Owner’s review in accordance with Section 3.4. ECM Submittals must be provided to Owner within such time as to not delay the Work and Project Installation Schedule.

ECM Submittals do not constitute Contract Documents. Their purpose is merely to demonstrate the manner in which ESP intends to implement the Work in conformance with information received from the Contract Documents. ESP shall not install any ECM unless and until an ECM Submittal specifically covering such ECM shall have been approved in writing by Owner. Approval of an ECM Submittal, however, shall not be evidence that the ECM Submittal and associated Work pursuant thereto conforms to the requirements of the Contract Documents, nor shall such approval relieve or diminish in any way ESP’s obligation to comply with the Contract Documents.

3.4.3 Informational Requirements of ECM Submittals

ECM Submittals shall provide sufficient detail to allow Owner to complete its review and shall, at a minimum, include:

(a) submittal date and revision dates;

(b) project number and title;

(c) the ECM or its component covered by the submittal;

(d) names of ESP and any applicable subcontractors, manufacturers, suppliers, and dealers;

(e) identity of product or material with models or products to be used and specifically each and every option that is to be included (options, features, models and other information not pertinent to this Project and its application shall be fully and clearly marked out of the submittal);

(f) relation to adjacent structure or material;

(g) clearly identified field dimensions;

(h) drawings and specifications page and number (if applicable);

(i) applicable standards, such as ASTM or ANSI, that the ECM Submittal satisfies;

(j) identification of any applicable Change Order or Contract Amendment that relates to the

ECM;

(k) stamp or seal of the preparer of the ECM Submittal and ESP’s certification that it has reviewed and approved the submittal as to its accuracy and compliance with the provisions of the Contract Documents;

(l) shop drawings, product data, and, where appropriate or reasonably required, product samples; and

(m) if a mock-up or demonstration occurred, the date when and location where same occurred, and Owner representatives who were present.

At the request of Owner, and where appropriate or reasonably required, ESP 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 Section, but only to the extent that Owner provides a written verification that mock-up was reviewed. As with written ECM Submittals, any written verification of mock-ups shall not be evidence that the mock-up and associated Work pursuant thereto conforms to the requirements of the Contract Documents, nor shall such approval relieve or diminish in any way ESP’s obligation to comply with the Contract Documents.

3.4.4 Project Schedule and ECM Submittal Schedule

Within INSERT DAYS days of commencing the Work, ESP shall submit to Owner for its information ESP’s schedule for completing the Work in accordance with the Project Installation Schedule and by the date set forth herein for Substantial Completion and Final Completion. Additionally, within INSERT DAYS days of commencing the Work, ESP shall submit to Owner an ECM Submittal Schedule. Each of these schedules required herein shall be revised no less frequently than every two weeks (unless the parties otherwise agree in writing) and shall be revised to reflect conditions encountered from time-to-time and shall be related to the entire Project. Each such revision shall be furnished to Owner. The schedules, and all revisions, shall be in such form, and shall contain such detail, as Owner may require. The schedules shall specifically account for Owner’s continued use and occupation of the Premises. THE PARTIES SPECIFICALLY AGREE THAT ANY

FLOAT CONTAINED IN THE SCHEDULES SHALL BELONG TO THE PROJECT AND IN NO EVENT

SHALL ESP MAKE CLAIM FOR ANY ALLEGED DELAY, ACCELERATION, OR EARLY COMPLETION SO

LONG AS THE PROJECT IS COMPLETED WITHIN THE CONTRACT TIME FOR WORK. Strict compliance with the requirements of this Section is a condition precedent for payment to ESP, and failure by ESP to strictly comply with said requirements shall constitute a material breach of this Agreement.

ESP shall continuously maintain at the site, for the benefit of Owner, one record copy of this Agreement and other Contract Documents marked to record on a current basis changes, selections, and modifications made during construction. Additionally, ESP shall maintain at the site for the benefit of Owner the approved ECM Submittals.

3.4.5 Review and Approval of ECM Submittals

Within INSERT DAYS business days after receipt, Owner shall complete its review of the submittals or revised submittals and provide written approval or, if the submittal or revised submittal has not been approved, written explanation as to the reason therefor. ESP shall submit to Owner a revised submittal within INSERT DAYS business days after receipt of Owner’s rejection. ESP may not commence any of the Work which requires the submittals without written approval by Owner.

Owner may reject submittals, among other reasons, on the basis that the Work associated with such submittal (i) might constitute or create a hazard to the Premises or to persons or property, (ii) does not comply with the Contract Documents, or (iii) would result in delay in scheduled completion of the Work.

3.5 ECMs Modifications

ESP may request Owner’s permission to implement an ECM Modification. To request an ECM Modification, ESP shall submit a written request that identifies (i) the requested ECM Modification; (ii) the ECMs to be modified; (iii) the requested change in ECM Installation Payments, if any; and (iv) the requested adjustments, if any, to the Baseline set forth in Schedule E (Baseline) arising from ECM Modifications. ESP shall represent and warrant to Owner that (i) the ECM Modification does not result in modifying the standards of comfort and service set forth in Schedule H (Operating Parameters for ECMs/Standards of Comfort & Service) without the express written approval of Owner; (ii) the ECM Modification is necessary to enable ESP to achieve the Guaranteed Savings; (iii) any costs incurred due to any ECM Modification shall be the sole responsibility of ESP; (iv) any ECM Modification that is a replacement of an ECM shall be new and have equal or better potential to reduce energy consumption at the Premises than the ECM being replaced; (v) ESP shall update any and all software to be used in connection with the affected ECMs; and (vi) any ECM Modifications shall become the property of Owner. ESP shall provide all necessary backup analysis and documentation to support its request for ECM Modification.

If Owner consents to the requested ECM Modification, the parties will enter a Contract Amendment or follow the Change Order procedures and comply with Article 9, except that Section 9.2.2 shall not apply because the change in ECM Installation Payments (if any) shall be agreed upon when the ECM Modification is approved by Owner. Owner has no obligation to accept the requested ECM Modifications.

All ECM Modifications approved by Owner under this Section shall become part of the ECMs described in Schedule A (Energy Conservation Measures and Other Work) and shall become the property of Owner. Unless specifically provided in a Contract Amendment or Change Order, no ECM Modification shall relieve or diminish ESP’s obligation to achieve the Guaranteed Savings specified in Schedule B (Guaranteed Savings). This Section shall not affect the limitation of Owner’s payment obligations in Section 7.5.

3.6 ECM Malfunction

During the term of this Agreement, Owner shall use its best efforts to notify ESP or its designee within three (3) business days after Owner receives actual knowledge of the occurrence of a material malfunction in the operation of the ECMs or any pre-existing energy-related equipment, but only if Owner reasonably believes that such malfunction may lead to a Material Change. Such a material malfunction in the operation of an ECM shall not be deemed a Material Change unless such malfunction is caused by Owner’s failure to maintain such ECM in accordance with this Agreement, in which case Section 12.4(h) may apply solely to the extent such malfunction is caused by Owner. Except to the extent Section 12.4(h) applies, Owner shall have no obligation to modify the Baseline to account for any material malfunction in the operation of an ECM.

3.7 Supervision

ESP shall employ and maintain at the Project site only competent supervisory personnel. Absent written instruction from ESP to the contrary, the superintendent shall be deemed ESP’s authorized representative at the site and shall be authorized to receive and accept any and all communications from Owner.

Key supervisory personnel assigned by ESP to this Project are as follows:

Name Function Email and Mobile Phone Number

So long as the individuals named above remain actively employed or retained by ESP, they shall perform the functions indicated next to their names unless Owner agrees to the contrary in writing. In the event one or more individuals not listed above subsequently assumes one or more of those functions listed above, ESP shall be bound by the provisions of this Section 3.7 as though such individuals had been listed above.

3.8 Restoring and Cleaning the Site and the Project

On a daily basis, ESP shall keep the Premises clean so as not to interfere with the operations of Owner. Upon Final Completion of the Work, ESP shall thoroughly clean the Premises and the Project and remove all waste, together with all of ESP’s property therefrom.

ESP shall ensure that all Work does not damage the existing conditions of the Premises. If ESP causes any damage to such existing conditions, ESP shall be obligated to repair and restore such conditions to their original condition, unless otherwise provided in a Change Order or Contract Amendment.

3.9 Means, Methods, Techniques, Sequences, Procedures and Safety

As long as ESP complies with the Contract Documents, ESP is fully responsible for, and shall have control over, all construction means, methods, techniques, sequences, procedures and safety, and shall coordinate all portions of the Work required by the Contract Documents.

3.10 Indemnity

To the fullest extent permitted by law, ESP shall indemnify, hold harmless, and defend Owner and its agents, the State of Georgia and its departments, agencies, and instrumentalities, and all of their respective officers, members, employees, and directors from and against liability, claims, damages, losses and expenses, including attorney fees, arising out of the performance of the Work, or loss of use resulting therefrom, bodily injury or death, or damage to tangible property, but only to the extent caused in whole or in part by breach of contract, or negligent or wrongful acts or omissions, of ESP, a subcontractor, anyone directly or indirectly employed by them or anyone for whose acts they may be liable, regardless of whether or not such liability, claim, damage, loss, or expense is caused in part by a party indemnified hereunder.

In the event the ESP is required to indemnify the Owner, ESP shall pay for representation for Owner upon the request of the Attorney General for the State of Georgia, who shall have sole discretion in determining said counsel and in appointing said counsel as a Special Assistant Attorney General. Any settlement of a claim for indemnity shall be reviewed and approved by the Attorney General. To the extent any settlement amounts or awards are awarded to Owner, Owner shall be entitled to receive and retain all such settlement amounts and all amounts awarded as damages, profits or otherwise in connection with such suits.

If claims are asserted against any person or entity indemnified under this Section 3.10 by an employee of ESP, a subcontractor, any one directly or indirectly employed by them or anyone, the indemnification obligation under this Section 3.10 shall not be limited by a limitation on amount or type of damages, compensation or benefits payable by or for ESP or a subcontractor under workers’ compensation acts, disability benefit acts, or other employee benefit acts.

If and to the extent claims, damages, losses, and expenses covered by this Section are paid by the State Tort Claims Trust Fund, the State Authority Liability Trust Fund, the State Employee Broad Form Liability Fund, the State Insurance and Hazard Reserve Fund, and other self-insured funds established and maintained by the State of Georgia Department of Administrative Services Risk Management Division, then ESP agrees to reimburse such funds for the amount paid out by such funds.

ARTICLE 4. OPERATING, MAINTENANCE, MONITORING, TRAINING, AND RELATED TASKS

4.1 ESP’s Operating, Maintenance, Monitoring, and Related Tasks

ESP shall be responsible for providing the operating, maintenance, monitoring, commissioning, and other services to the ECMs as set forth in Schedule F (ESP Maintenance Responsibilities). ESP acknowledges that its obligation to identify all tasks and costs associated with operating, maintenance, monitoring, commissioning, repairs, replacements, adjustments, and other related services to the ECMs is of paramount importance. In addition to those tasks set forth in Schedule F, if any task related to operating, maintenance, monitoring, commissioning, repairs, replacements, adjustments, and other related services required for any ECM was not identified by ESP and allocated to ESP in Schedule F, or to Owner in Schedule G (Owner Maintenance Responsibilities), before execution of the this Agreement, then ESP shall perform such task without additional fees or increase in compensation. ESP’s failure to identify such tasks before execution of this Agreement shall result in a waiver by ESP of any right to assert that failure to perform such tasks resulted in a Material Change.

In its sole and complete discretion, however, Owner may negotiate and agree to pay ESP to perform any tasks identified in this Section that were not allocated to ESP in Schedule F, or Owner in Schedule G, before execution of this Agreement. Owner’s election to make such payments shall not result in (i) an obligation to make payments for such tasks in the future or any other tasks at any time, or (ii) a waiver of Owner’s rights, and ESP’s obligations, under this Section. Further, ESP shall not assert Owner’s election to make such payments as a basis to claim that the failure to perform such tasks resulted in a Material Change.

All replacements of, and alterations or additions to, the ECMs shall become part of the ECMs and shall become the property of Owner. Any replacements of and alterations or additions made by ESP to Owner’s pre-existing equipment, or equipment acquired by Owner, shall become part of said equipment and be owned by Owner. All costs associated with the performance of this Section 4.1, including but not limited to all services, labor, equipment, materials, and parts, shall be deemed compensated by the ECM Continuing Services Payments pursuant to Schedule C-2 (ECM Continuing Services Payments).

4.2 Owner’s Operating, Maintenance, Monitoring, and Related Tasks

Owner shall be responsible for providing operating, maintenance, monitoring, and other related tasks related to the ECMs as set forth in Schedule G (Owner Maintenance Responsibilities). If Owner moves, modifies, removes, adjusts, alters, or changes the ECMs, or any part thereof, during the Contract Time For Guaranteed Savings, and if such modification results in a Material Change, then the provisions of Sections 12.4, 12.5, and 12.6 shall apply. Such provisions shall not apply, however, if Owner makes any such modification with prior written direction or approval from ESP, which shall not be unreasonably withheld, or if Owner makes such modification in the event of an occurrence reasonably deemed by Owner to constitute a bona fide emergency.

ESP shall provide any information, analysis, and guidance requested by Owner to assist Owner in fulfilling its obligations under Schedule G. Owner shall be permitted to rely on such information, analysis, and guidance. ESP waives any right to assert Owner’s failure to comply with this Section to the extent such failure is caused, in whole or in part, by Owner’s reliance on such information, analysis, and guidance.

Unless ESP is responsible for such tasks, Owner shall use its best efforts to maintain the Premises in good repair and to protect and preserve the ECMs in good repair and condition in accordance with the manufacturers’ recommendations that are provided to Owner by ESP and to maintain the operating conditions of all mechanical systems and energy related systems located at the Premises. ESP shall notify Owner in writing of any improper operation, maintenance, monitoring, repairs, replacements, and adjustments as soon as ESP has knowledge of same.

4.3 Training by ESP

ESP shall conduct the training program described in Schedule I (ESP Training Responsibilities).

4.4 Owner’s Right to Self-Perform

Owner may elect to self-perform, or hire a third party to perform, any or all ECM Continuing Services, except the performance of the Annual Review, as long as such services are performed in conformance with the requirements of Schedule F (ESP Maintenance Responsibilities). Owner shall provide INSERT DAYS days’ advance written notice to ESP of its election. ESP shall cease performing such services upon the date set forth therein.

Upon the effective date of the election provided by this Section, Owner’s obligations to pay ECM Continuing Services Payments associated with such services shall cease. In determining the amount of ECM Continuing Services Payments associated with such discontinued services, Owner may rely on any documentation provided by ESP, including but not limited to Schedule C-2 (ECM Continuing Services

Payments) and documents provided in connection with the Audit, in determining the ECM Continuing Services Payments associated with the discontinued services.

An election under this Section is not, and shall not be deemed, a termination, breach, or default of this Agreement. Nothing in this Section shall affect Owner’s right to hire a third party to perform the Annual Review in accordance with Section 10.3. Except as provided in this Section, ESP’s obligations hereunder shall continue and this Agreement shall remain in full force and effect.

ARTICLE 5. ANNUAL ENERGY SAVINGS GUARANTY

5.1 Annual Energy Savings Guaranty

ESP guarantees that the Verified Savings will equal or exceed the Guaranteed Savings each fiscal year during the Contract Time for Verified Savings. In addition, ESP guarantees that the total dollar value of Verified Savings, established as provided in Schedule M (Methods of Savings Measurement and Verification) (subject to the stipulated utility rates and cost escalators), will equal or exceed the sum of all ECM Installation Payments and ECM Continuing Services Payments, as amended by Change Orders or Contract Amendments (if any).

ESP shall furnish to Owner an energy savings guarantee bond, a bank letter of credit, or other surety instrument acceptable to Owner, and under seal of the surety, in an amount equal to the dollar value of Guaranteed Savings for the Contract Time for Verified Savings. As Verified Savings are realized each fiscal year during the Contract Time for Verified Savings, and only if such Verified Savings exceed Guaranteed Savings for such fiscal year, the value of the energy savings guarantee bond, bank letter of credit, or other surety instrument may decrease proportionately in a reasonable amount determined by Owner. The surety instrument provided for under this Section shall not be subject to Chapter 10 of Title 13 of the O.C.G.A., and specifically shall not be subject to the one-year period of limitations set forth in O.C.G.A. § 13-10-42. The surety instrument shall provide that Owner may commence legal actions on the surety instrument at any time during, and no less than two years after, the Contract Time for Verified Savings has ended.

5.2 Annual Review and Guaranty Payment

Within INSERT DAYS business days following the close of each fiscal year during the Contract Time for Verified Savings, ESP shall (1) perform an Annual Review of the Verified Savings in accordance with the methods and procedures in Schedule M (Methods of Savings Measurement and Verification), and (2) provide a written report of the Annual Review to Owner. If Verified Savings do not equal or exceed the Guaranteed Savings for such fiscal year, then in accordance with ESP’s guaranty obligations of Section 5.1, ESP will pay Owner the difference between (i) the Guaranteed Savings and (ii) the Verified Savings, upon converting such amounts to dollar values in accordance with Schedule M (Methods of Savings Measurement and Verification).

Such payment shall be made to Owner no later than the date that the written report of the Annual Review is due.

Owner may dispute the findings of the Annual Review and the amount due Owner under this Section at any time. Without limitation, Owner may elect the option provided by Section 2.2 to hire an independent third-party to determine the Verified Savings. Owner’s receipt and deposit of any payment due under this Section shall not affect Owner’s right to dispute the findings of the Annual Review or the amount due Owner under this Section.

Any excess of Verified Savings over Guaranteed Savings in a fiscal year shall not be used to offset deficiencies of Verified Savings in comparison to Guaranteed Savings in other fiscal years.

ARTICLE 6. SURETY BONDS AND INSURANCE

6.1 Payment and Performance Bonds

ESP shall furnish to Owner, as soon as practicable following the execution hereof and prior to commencement of any Work, separate performance and payment bonds. Each bond shall have a penal sum in an amount set forth in Schedule O (Insurance and Bonds / Savings Guarantee Security), but not less than the total ECM Installation Payments, and shall secure all of ESP’s obligations under this Agreement and the Contract Documents, except for those obligations secured by the surety instrument identified in Section 5.1.

Each bond furnished by ESP shall incorporate by reference the terms of this Agreement as fully as though they were set forth verbatim in such bonds. In the event that ECM Installation Payments are increased by Change Order or Contract Amendment, the penal sum of both the performance bond and the payment bond shall be deemed increased by like amount. The performance and payment bonds furnished by ESP shall be in a form suitable to Owner, shall comply with the provisions of O.C.G.A. Title 13, Chapter 10 (O.C.G.A. §§ 13-10-1 through 13-10-65), except the period of limitation thereof, and shall be executed by a surety or sureties reasonably suitable to Owner. Notwithstanding anything to the contrary herein, the performance bond provided by ESP shall provide a period of limitation for filing suit no earlier than two (2) years from completion of the Project and Acceptance of the Work.

6.2 ESP Insurance Requirement

ESP shall purchase, maintain, and provide evidence of insurance coverage of the types, in the amounts, and for the periods specified in Schedule O (Insurance and Bonds / Savings Guarantee Security).

Prior to the commencement of any Work on the Project, ESP shall submit to Owner all certificates of insurance evidencing the insurance coverage required in Schedule O.

ESP may not commence performance of the Work or other services under this Agreement until Owner has received and approved in writing the certificates of insurance, but the absence of such approval shall not constitute a waiver of ESP’s obligations under this Section 6.2.

Without prejudice to Owner’s other remedies, including but not limited to those identified in Article 10, Owner shall have the right to stop the Work until evidence of the required coverage is provided. ESP shall require all subcontractors performing any portion of the Work to carry the insurance required in Schedule O (Insurance and Bonds / Savings Guarantee Security) and ESP may, at its option, provide the coverage for any or all subcontractors, and, if so, the evidence of insurance submitted shall so stipulate. ESP and each of its subcontractors agree that each insurer shall waive its rights of subrogation against Owner, and Owner may require an endorsement documenting said waiver of subrogation. The insurance requirements hereof are for the sole benefit of Owner and any party indemnified under Section 3.10. Except as expressly provided herein, there are no third-party beneficiaries of the insurance requirements hereof.

ESP shall timely renew the required insurance as necessary to keep such coverage in effect for the periods specified in Schedule O and shall supply Owner, not less than thirty (30) days prior to any expiration or renewal dates for such insurance policies, with evidence of all required insurance, including updated replacement certificates of insurance and amendatory riders or endorsements that clearly evidence the continuation of all required coverage.

ESP understands and agrees that any insurance protection furnished by ESP hereunder shall in no way limit its responsibility to indemnify and save harmless Owner under the provisions of this Agreement.

ARTICLE 7. PAYMENT OBLIGATIONS

7.1 Owner’s Payment Obligations

Payments to ESP shall only include (1) ECM Installation Payments and (2) ECM Continuing Services Payments. Such payments include all compensation and amounts to be paid by Owner for all Work, services, and benefits provided by ESP pursuant to, or in any way related to, this Agreement. Payments to ESP shall be made in conformity with and subject to the provisions of this Article 7 and Schedules C-1 (ECM Installation Payments) and C-2 (ECM Continuing Services Payments).

As a condition precedent to the interim and final ECM Installation Payments, ESP shall provide Owner (i) if required by Owner, an interim or final lien waiver as set forth in O.C.G.A. § 44-14-366, and (ii) a sworn written statement in conformance with the provisions of O.C.G.A. § 44-14-361.2(a)(2) that the agreed price or reasonable value of all labor, services, or materials in connection with this Agreement have been paid.

In the event that Owner makes an election under Section 4.4 (Owner’s Right to Self-Perform), Owner’s payment obligations for ECM Continuing Services Payments shall be adjusted as set forth in Section 4.4.

Payments to ESP hereunder may be made directly by Owner or by the Escrow Agent in accordance with the Escrow Agreement, dated the date hereof, among Owner, ESP, and the Escrow Agent. To the extent funds are paid to ESP from the Escrow Agent, such payments shall be deemed payments under this Agreement as if Owner paid such amount directly to ESP.

7.2 ECM Installation Payments

7.2.1 Schedule of Values for ECM Installation…