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end of the Tenn, the Guarantee for the Guarantee Year in which such termination becomes effective shall be <br />prorated as of the effective date of such termination, with a reasonable adjustment for seasonal fluctuations in <br />Energy Costs, and the Guarantee for all subsequent Guarantee Years shall be null and void. <br />3. SAVINGS GUARANTEE <br />3.1 Guarantee Savings. ESCO guarantees to CITY that the identified Facilities will realize the total energy <br />cost avoidance through the combined value of all ECMs over the Tenn of the contract as defined in Section 6 <br />below. In no event shall the savings guarantee provided herein exceed the total installation, support services, and <br />financing costs for the Work under this Agreement. <br />3.1.1 Additional Savings Before The Commencement Date. All energy cost avoidance realized by CITY that <br />result from activities undertaken by ESCO prior to The Commencement Date, including any utility rebates or other <br />incentives earned as a direct result of the installed Energy Conservation Measures or Support Services provided by <br />ESCO, shall be fully retained by the City and credited toward the Guaranteed Savings for the First Guarantee Year <br />and subsequent Guarantee Years if applicable. <br />3.1.2 Additional Savings After Final Proiect Acceptance. Additional energy and/or operational cost <br />avoidance, including any utility rebates or other incentives, that can be demonstrated, or earned, as a result of <br />ESCO's efforts that result in no additional costs to CITY beyond the costs identified in this Agreement will be <br />included in the guarantee savings reconciliation report for the applicable Guarantee Year(s). <br />3.1.3 Cumulation of Savings. The Guaranteed Savings in each Guarantee Year are considered satisfied if the <br />Total Guarantee Year Savings for such Guarantee Year equals or exceeds the Retrofit and Support Costs for such <br />Guarantee Year, or the amount identified in Section 6 below. <br />3.1.4 RESERVED <br />3.1.5 Savings Shortfalls. In the event that the Total Guarantee Year Savings in any Guarantee Year is less than <br />the Guaranteed Savings required for that Guarantee Year, ESCO shall, upon receipt of written demand from CITY, <br />compensate CITY the amount of any such shortfall, in such form as agreed to by the parties, limited by the value of <br />the guarantee, within forty-five (45) days. Resulting compensation shall be ESCO's sole liability for any shortfall <br />in the Guaranteed Savings. In case of a shortfall, ESCO reserves the right, subject to City approval, which shall not <br />be unreasonably withheld, to implement additional operational improvements or conservation measures, at no cost <br />to City, that will generate additional savings in future years of the Guarantee Tenn and ESCO has the option of <br />extending M&V analysis to verify successful performance. <br />3.1.6 Aggregation of Savings. The parties mutually agree that the Guarantee Savings for this Agreement and <br />the Guarantee Savings for all previous active Energy Guaranteed Cost Avoidance projects for this CITY shall be <br />combined each year until the end of the original guarantee term for each project. Throughout the duration of the <br />term for the each specific phase the total savings will be utilized as an aggregate in satisfying the sum of the <br />respective guarantees. <br />3.2 Savings Reconciliation Documentation. ESCO will provide CITY with a guarantee savings <br />reconciliation report after each Guarantee Year. CITY will assist ESCO in generating the savings reconciliation <br />report by providing ESCO with copies of all bills pertaining to Energy Costs within two (2) weeks following the <br />CITY's receipt thereof, together with access to relevant records relating to such Energy Costs. CITY will also <br />assist ESCO by permitting access to any maintenance records, drawings, or other data deemed necessary by ESCO <br />to generate the said report. Data and calculations utilized by ESCO in the preparation of its guarantee cost savings <br />reconciliation report will be made available to CITY, along with such explanations and clarifications as CITY may <br />reasonably request. <br />3.2.1 Acceptance of Guarantee Reconciliation. At the end of each Guarantee Year CITY will have forty-five <br />(45) days to review the guarantee savings reconciliation report and provide written notice to ESCO of non - <br />Schedule C Page 4 <br />