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3. Representations and Warranties
3.1 Representations and Warranties of Both Parties

Each party hereto represents and warrants to the other that:

(i) it has adequate power and authority to conduct its business as presently conducted or
contemplated hereby to be conducted, to enter into this Contract and to perform its
obligations hereunder;

(ii) It possesses full authority to execute and deliver this Contract and that it does not
contravene any applicable law, rule or regulation;

(iil) its execution, delivery and performance of the Contract have been duly authorized by,or
are in accordance with, its organic instruments, and this Contracthas been duly executed
and delivered for it by the signatories so authorized and it constitutes its legal, valid and
binding obligation;

(iv) its execution, delivery and performance of this Contract will not result in a breach or
violation of, or constitute a default under any agreement, lease or instrument to which itis a
party or by which it or its properties may be bound or affected; and

(v) it is 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 that would materially and adversely affectits ability to
perform hereunder.

3.2 Representations and Warranties of ESCO

ESCO hereby warrants, represents and promises that:

(i) before starting to perform the Contract ESCO shall a) provide proof and documentation
that it is qualified, licensed or otherwise permitted to do business in the State of New
Hampshire including all required insurance and bonds pursuant to this Contract to the extent
not included in Attachment 9 - Corporate Resolution;

(ii) ESCO shall use subcontractors who are qualified, licensed and bonded in this State and
approved by Customer in writing to perform the Work so subcontracted pursuant to the
terms hereof:

(iii) ESCO has all requisite authority to license the use of proprietary property, bothtangible
and intangible, contemplated by this Contract:

(iv) equipment installed as part of the ECMs/OCMs will meet or exceed the equipment
standards set forth in Attachment 5 - Major Equipment List and

(v) ESCO acknowedges that Customer reserves the right to reject all non-conforming goods
and to cause their return for credit or replacement at Customer soption;

(vi) the equipment installed as part of the ECMs/OCMs is or will be compatible with all other
Premises’ mechanical and electrical systems, subsystems, or components with which such
equipment interacts, and that, as installed, neither such equipmentnor such other systems,
subsystems, or components will materially adversely affect each other as a direct or indirect
result of equipment installation or operation;

(vii) ESCO is financially solvent, able to pay its debts as they mature and possesses
sufficient working capital to complete the work and perform its obligations underthe

6 ESCO Contract — Nashua Schools & EEI, Inc.

Contract and has no outstanding and delinquent debt owed to the State of New Hampshire
or any political subdivision thereof,

(viii) ESCO has not directly or indirectly participated in any collusion or otherwise taken any
action in restraint of full competitive bidding with respect to this Contractor the solicitation
process leading to this Contract; and

(ix) ESCO has not paid, and agrees not to pay, any bonus, commission, fee or gratuity to
any employee or official of the state or municipal government or the Customer for the
purpose of obtaining this Contract or any other contract or award and thatno commissionor
other payment has been or will be received from or paid to any third party contingent upon
the award of any contract except as previously communicated to the Customer in writing
(and ESCO acknowedges that subsequent discovery of non-compliance with this provision
constitutes sufficient cause for immediate termination of this Contract and other remedial
action).

3.3 Representations and Warranties of the Customer
Customer hereby represents and warrants that:
(i) It is a tax exempt entity and, therefore, the Work required by this Contract may be subject

to tax exemption for New Hampshire sales or use tax purposes upon compliance with the
appropriate process.

7 ESCO Contract — Nashua Schools & EEI, Inc.

4. Price and Terms
4.1 Contract Price

ESCO will submit a schedule of values to Customer for parts of the Work that ESCO shall
have performed on a form issued by the American Institute of Architects (“Schedule of
Values”). Customer shall approve and authorize release of construction financing from the
Escrow Agent/Trustee to the ESCO within thirty (30) days following Customer's receipt of a
Schedule of Values. Customer shall not be required to approve release of construction
financing for Work yet to be performed. In the event that the Customer disputes a portion of
a Schedule of Values, Customer shall make a timely authorization to release construction
financing in an amount equal to the undisputed part of the Schedule of Values.

Upon submittal of any schedule of values for payment, ESCO shall furnish signed lien
waivers from ESCO and any subcontractors or material suppliers that contributed to the
Work that is the subject of the schedule of values. With respect to such Work, the
authorized person executing each lien waiver shall voluntarily and with knowledge of that
contractor’s or supplier's legal rights, waive and release any rightthat it has or in the future
may have to claim a mechanic’s lien or any other lien rights, and waive and release all other
claims of any kind against (a) the real property where the Work is located; (b) the
improvements and other property located thereon; (c) Customer and, as applicable, its title
company and lender and their employees, officers, and agents; and(d) as applicable, the
surety or sureties of Customer. In addition, in each of its lien waivers, ESCO shall (i) certify
that it has paid all subcontractors, suppliers, and employees for all Work related to the
submitted schedule of values, and (ii) agree to indemnify and hold harmless Customer and,
as applicable, its lender and title company for all costs and expenses, including attomeys
fees, incurred as aresult of claims that any of the subcontractors, suppliers, or employees
have not been paid for such Work.

In the event that Customer disputes a Schedule of Values or a portion of the Schedule of
Values, Customer shall indicate the reason for the dispute in writing to ESCO within fourteen
(14) days of receiving the Schedule of Values and the parties will negotiate in good faith to
resolve the dispute prior to the expiration of the thirty (30) day period. If the parties cannot
resolve the dispute within such thirty (30) day period, Late Payment interest shall accrue
pursuant to section 4.02 hereof but such Late Payment interest shall be released to ESCO
only in the event that the dispute is eventually resolved in favor of ESCO in accordance with
Section 9.01’s Dispute Resolution procedure.

ESCO shall be responsible for paying all other taxes and tariffs of any sort related to the
Work. ESCO shall be responsible to pay for all labor, materials, equipment, tools,
construction, equipment and machinery, fuel, transportation and other facilities and services
necessary for the proper execution and completion of the Work.

Retainage will be held at 10% until progress is 50% complete, then reduced to 5% at 50%
completion and further reduced to 2% at substantial completion. The remaining contract
value will be released as a final payment upon Certification of Project Completion, completion
of all required training, completion of any outstanding punch-list, turnover of all final
paperwork such as warranties, guarantees, as-builts, O & M manuals, attic stock and
satisfaction of all document turnover requirements per the project specifications.

Following Final Acceptance, Customer may terminate this Contract without cause by giving
ESCO at least thirty (30) day’s written notice. The Customer shall pay ESCO for
8 ESCO Contract — Nashua Schools & EEI, Inc.

management, monitoring and verification services as described in Attachment 3 - Project
Cost. The continuing payment for monitoring and verification services and any operating
services described in Attachment 2 - Maintenance and Service Agreement shall be a
condition for the continuing effectiveness of the Performance Guarantee.

If requested by the customer the ESCO shall provide full disclosure of all costs relating to
the Work, including costs to subcontractors and vendors. ESCO shall provide a list of direct
costs including copies of purchase orders (PO’s) for vendors and subcontractors and a
breakdown of indirect costs associated with the project if requested by the customer.

4.2 Late Payment

Interest shall accrue on any past due balances owed to either party hereunder, including for
the Work or pursuant to the Performance Guarantee, at the rate of zero percent (0%) per
month (or the highest rate not prohibited by law), whichever is lower. This remedy shall be in
addition to, and not exclusive of, any other remedy available under this Contract or
applicable law.

4.3 Contract Termination

This Contract shall be effective and binding on the parties when the financing condition in
the Preamble is met. Unless otherwise terminated, including pursuant to Section 7.0 of this
Contract, or agreed to in writing pursuant to this Contract, this Contract shall terminate upon
completion of the Measurement and verification during finance term.

Following Project Acceptance, Customer may terminate this contract without cause by giving
ESCO at least 30 days’ witten notice. Termination of the Contract shall render the
Performance Guarantee null and void, and ESCO shall have no further obligation with
respect to the M&V Plan and Performance Guarantee.

9 ESCO Contract — Nashua Schools & EEI, Inc.

5. The Work
5.1 Time for Performance and Project Acceptance

Customer shall send the Notice to Proceed to ESCO on closing financing. The Notice to
Proceed shall clearly identify which measures, defined in the Final Investment Grade Audit,

the ESCO should proceed with. ESCO shall begin Work within thirty (30) days of receiving
the Notice to Proceed. ESCO shall substantially complete the Work consistent with the
schedule set forth in Attachment 2 - Maintenance and Service Agreement. Extension of
dates to commence or complete Work shall be granted at the sole discretion of the
Customer except as otherwise provided herein. Customer shall not unreasonably withhold
approval for an extension of dates to commence or complete Work if the cause for an
extension is pursuant to Sections 5.03, 5.06, 5.08, 5.12, 5.13, or 9.02.

When all of the ECMs/OCMs are implemented, all items on the Checklist for Project
Acceptance in the form provided in Attachment 11 — Final Acceptance are complete, and all
items that Customer previously deemed not to be in compliance with the requirements set
forth in this Contract have been corrected, ESCO shall submit and deliver to Customer a
Delivery and Acceptance Certificate Upon Final Completion in the form provided in
Attachment 10 — Substantial Completion evidencing in reasonable detail that all items on the
Checklist for Project Acceptance located in Attachment 11 - Final Acceptance are complete
and that all items that Customer deemed not to be in compliance with the requirements set
forth in this Contract have been corrected and which shall also be accompanied by a Final
Commissioning Report.

Upon receipt by Customer of Delivery and Acceptance Certificate Upon Final Completion,
Customer shall have thirty (30) days to complete review of the ECMs/OCMs in accordance
with the Guidelines for Project Acceptance in the form provided in Attachment 11 - Final
Acceptance. The Customer shall notify the ESCO of each item that does not satisfy the
Guidelines for Project Acceptance within thirty (30) days of receipt of the Delivery and
Acceptance Certificate upon Final Completion Form or Final Completion will be deemed to
have been achieved.

The Customer reserves the right to reject the work if installation fails to meet reasonable
standards of workmanship, does not comply with applicable building codes or is otherwise
not in compliance with the terms of this Contract. Upon correcting all items identified by
Customer as not satisfying the Guidelines for Project Acceptance, ESCO shall submit and
deliver to Customer a new Delivery and Acceptance Certificate upon Final Completion.
Customer shall have an additional twenty-one (21) days to complete review of the
ECMs/OCMs in accordance with the Guidelines for Project Acceptance upon receipt of a
new Delivery and Acceptance Certificate upon Final Completion.

Project Acceptance shall be evidenced by the Customer submitting and delivering to the
ESCO the Delivery and Acceptance Certificate Upon Project Acceptance in the form
provided in Attachment 11 - Final Acceptance, the delivery of which will indicate that the
Final Commissioning Report.

In the event that Attachment 2 - Maintenance and Service Agreement includes a provision
for liquidated damages in the event that ESCO does not attain Final Completion by the date
of Final Completion, then such liquidated damages shall be Customer's sole remedy for any
such delay in the completion of the Work.

10 ESCO Contract — Nashua Schools & EEI, Inc.

5.2 Specifications of Work

ESCO’s obligations hereunder are specified in Attachment 2 - Maintenance and Service
Agreement and related drawings and plans and any subsequent revisions thereto (“Scopeof
Work’), as approved by the Customer. Any modifications or alterations to the properties not
expressly included within the Scope of Work are excluded from the Work. The requirements
of all applicable laws, regulations and codes of federal, state, andlocal town or city
government shall be met at all times. Additional construction or operation requirements at
the Premises, if any, are described in Attachment 7 - Additional Requirements. All Work
shall be performed in a good and workmanlike manner. Time is of the essence with respect
to the Work.

5.3 Construction Procedures, Changes to Work and Coordination

ESCO shall supervise, coordinate and direct the Work using ESCO’s best ability, skill,
attention, and oversight. ESCO, in consultation with Customer, shall be responsible for the
construction means, methods, techniques, sequences, and procedures. Accordingly, no
course of conduct or dealings between the parties, nor expressed or implied acceptance of
alterations or additions to the Work, and no claim that the Customer has been unjustly
enriched by the any alteration or addition to the Work, whether or not there is in fact, any
unjust enrichment to the Work, shall be the basis of any claim to an increase in the amounts
due under the contract documents or a change in any time period provided for in the
contract documents.

Agreement to any change order shall constitute a final settlement of all claims of ESCO
relating to the change in Work that is the subject of the change order, including, but not
limited to, all indirect and direct costs associated with such change and any and all
adjustments to the Contract sum and the construction schedule.

The Customer shall review all proposed modifications to the building and systems and must
approve of same before commencement of any Work. Such approval will be made ina
timely manner and will not be unreasonably withheld. No change to the scope or
specifications of Work shall be made without the written consent of the Customer, in the
form of a revision to the Scope of Work.

If ESCO fails to correct Work which is notin accordance with the specifications or
persistently fails to meet specifications herein, Customer may order ESCO to stop the Work,
or any portion thereof, until the cause for such order has been eliminated. ESCO shall
perform the Work in such a manner as not to harm the structural integrity or operating
systems of any building and shall repair and restore any damage caused by the Work at
ESCO’s expense. ESCO shall not create or allowto continue any condition deemed to
endanger health or safety as definedin Section 6.01. If such a condition exists Customer
shall have the right to exercise the remedies described therein.

ESCO shall supply to the Customer the telephone number of a responsible person who may
be contacted during non-work hours for emergencies arising in connection with or affecting
the Work. ESCO shall coordinate any utility hookups provided by others under a separate
agreement at no additional cost or expense to the Customer. ESCO acknowedges that
there is sufficient space within the Premises for the performance of the Work.

11 ESCO Contract — Nashua Schools & EEI, Inc.

5.4 Relationship with Maintenance Staff

ESCO shall cooperate with Customer’s operating and maintenance personnel, train said

coordinate the Work on a planned and programmed basis including the specific actions
described in Attachment 2 - Maintenance and Service Agreement. ESCO shall deliver a
preventive maintenance schedule and procedures for any equipment installed as part of the
Work.

5.5 Material and EquipmentInstalled

The Customer shall make the final determination whether any material or equipment
installed is as specified in the Scope of Work or, if appropriate, ESCO’s Response to the
RFP, which is incorporated in this Contract by Section 9.14 below. No substitution of any
material or equipment specified shall be made without the written consent of the Customer
in the form of a revision to the Scope of Work, and any such substitution shall be at least
equal in quality, finish, durability, serviceability and performance for the purpose intended.

If alternative material or equipment is proposed, ESCO must update any and all software
associated with the ECMs/OCMs, the Work or the measurement of savings. Customer
reserves the right to reject all non-conforming goods and services and to direct ESCO to
replace or credit the Customer, at Customer's election. Failure by Customer to discover
latent defects or concealed damage or non-conformance shall not foreclose Customer's
right to subsequently reject the goods or services delivered pursuant to this Contract.
Formal or informal acceptance by the Customer of non-conforming goods or services shall
not constitute a precedent or waiver with respect to successive receipts of goods and
services. If ESCO fails to promptly cure the defect or replace nonconforming goods or
services, the Customer reserves the right to cancel the Contract, contract with a different
entity for the goods and services to be provided herein and to invoice ESCO for any
differential in price.

ESCO shall install and, when applicable, operate and maintain, or, if specified in the Scope
of Work, train Customer personnel to operate and maintain equipment in a manner that will
provide standards of service to meet requirements of Section 5.02 and equipment
manufacturers’ literature, specifications and instructions. ESCO will service and maintain the
ECMs/OCMs described in Attachment 2 - Maintenance and Service Agreement and
Customer shall pay ESCO for such services during the term of this Contract as provided in
Attachment 3 - Project Cost. Except for ECMs/OCMs or other equipment that is to be
serviced and maintained by ESCO as provided in Attachment 2 - Maintenance and Service
Agreement, Customer shall be responsible for servicing and maintaining equipment at the
Premises. ESCO shall prepare and furnish at least three (3) maintenance manuals that
include product data and which are subject to acceptance by the Customer for all equipment
installations at the Premises.

5.6 Asbestos and Hazardous Materials

ESCO will be responsible for proper disposal of construction demolition debris that does not
contain Hazardous Materials, as defined herein. ESCO will be responsible for proper
disposal of all ballasts containing or suspected of containing PCBs and fluorescentlamps
containing mercury. ESCO must prepare and document disposal appropriate transportation

12 ESCO Contract — Nashua Schools & EEI, Inc.

and disposal plans and document before disposal begins and document actual disposal to
Customer immediately after disposal. ESCO will be responsible for disposal of asbestos
containing building material in the boiler rooms related to the demolition of existing boilers
and piping. ESCO will use licensed asbestos abatement contractors and 3" party testing.

Excluded Materials and Activities

The Customer recognizes that in connection with the Work, installation and/or service or
maintenance of equipment and/or systems at the Customer's facilities, ESCO may
encounter, but is not responsible for, any Work outside of the boiler rooms relating to (i)
asbestos, materials containing asbestos, or the existence, use, detection, removal,
containment or treatment thereof, or (ii) mold, materials containing mold, or the
existence, use, detection, removal, containment or treatmentthereof, or (iii) 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.

The materials and activities listed in the foregoing sentence are hereinafter referred to as
"Excluded Materials and Activities". The Customer agrees that if ESCO’s performance of
any Work under this Contract involves Excluded Materials and Activities, upon receipt of any
and all appropriate funding and approval, the Customer will perform or arrange for the
performance of such Work and will bear the sole risk and responsibility therefore. In the
event ESCO discovers Hazardous or Excluded Materials, ESCO will immediately cease
Work, remove all ESCO personnel or subcontractors from the site, and notify the Customer.
The Customer will be responsible to handle such Materials at the Customer's expense.
ESCO will undertake no further Work at the facility except as authorized by the Customer in
writing. Notwithstanding anything in this Contract to the contrary, any such event of
discovery or remediation by the Customer will not constitute a default by the Customer.

ESCO will be solely responsible for any hazardous or other materials, including without
limitation those listed in this paragraph, thatit may bring to the site.

5.7 Subcontracting andAssignments

1) ESCO may elect to use subcontractors in meeting its obligations hereunder.
Customer shall approve all subcontractors and outside professionals in
advance which approval shall not be unreasonably withheld or delayed.
ESCO shall be responsible for the conduct, acts and omissions, whether
intentional or unintentional, of its subcontractors, employees, agents, invitees
or suppliers. ESCO agrees to bind each of its subcontractors to the terms of
ESCO’s obligations under Sections 5.01 - 5.06, 5.08, 5.09, 5.14- 5.16, 8.01 -
8.07, 9.03, 9.04, 9.06 and 9.10 of this Contract. Nothing in this Contract shall
create any contractual relationship between any subcontractor, employee,
agent, invitee or supplier and the Customer.

5.8 Delays

If ESCO is delayed in the commencement or completion of any part of the Work due to

events beyond ESCO’s control and without the fault or negligence of ESCO, including but
not limited to fire, flood, extended labor disputes, unusual delays in deliveries, unavoidable
casualties, abnormal adverse weather, war, and acts of God, or due to Customer's actions

13 ESCO Contract — Nashua Schools & EEI, Inc.

or failure to perform its obligations under this Contract, then ESCO will notify Customer in
writing of the existence, extent of, and reasons for such delay. ESCO shall have no claim for
additional compensation on account of such delays but ESCO and Customer may extend
the contract time by revision to the Scope of Work for such reasonable time as they shall
agree. If Customer determines that a delay described in the first sentence of this section will
result in ESCO not completing the Work for a period of ninety (90) days or more, then
Customer or ESCO may terminate this Contract and the Customer shall pay ESCO for the
portion of the Work completed up to the Contract termination date.

5.9 Equipment Location andAccess

The parties understand and agree that the Premises will be occupied during construction.
ESCO shall take all necessary precautions to ensure the public safety and convenience of
the occupants during construction and Customer shall cooperate with ESCO’s reasonable
requirements and related requirements described in Attachments 2 and 4. ESCO shall
complete the Work in accordance with the schedule in Attachment 2 - Maintenance and
Service Agreement. ESCO shall use sufficient personnel and adequate equipment to
complete the Work pursuant to Section 5.01.

The Work must be completed in a continuous uninterrupted operation on the days and
between the hours specified in Attachment 7 - Additional Requirements, unless otherwise
authorized in writing by the Customer. No Work is to be done on holidays, Saturdays, or
Sundays except as contemplated in Attachment 7 - Additional Requirements, the Scope of
Work in order to maintain the Standards of Comfort described in Attachment 8 - Standards
of Comfort or in the event of emergencies unless otherwise approved by Customer. The
Customer will provide access to the Premises at the times agreed upon and make all
reasonable provisions for ESCO to enter the Premises where Work is to be performed so
that Work may be performed in an efficient manner.

ESCO is responsible for the security of partially completed work and for uninstalled
materials or equipment stored at Customer properties. Only materials and equipment
intended and necessary for immediate use shall be brought into the buildings. Equipment
and unused materials shall be removed from each building by the end of each workday
unless overnight storage is provided for within the Scope of Work. The

Customer shall provide if available, without charge, a mutually satisfactory location or
locations for the storage and operation of materials and equipment and the performance of
the Work, including a location for staging and mobilization.

Flammables and combustibles shall be stored only in accordance with the requirements of
relevant statutes, regulations, NFPA standards and Customer procedures. In the eventthat
the Customer is unable to provide a satisfactory location for the storage of flammables and
combustibles, then ESCO shall provide and pay for suitable storage.

5.10 Permits and Fees

ESCO shall secure and pay for building and other permits and governmental fees, licenses,
and inspections necessary for proper performance and completion of the Work that are
required by federal, state, or town or city governments. In the event that fees for any permits
are reduced or waived by request, standing or intervention of the Customer, then, at the
Customer’s option, the amount of the savings of the fee shall be deducted from the line item

14 ESCO Contract — Nashua Schools & EEI, Inc.

in the Work budget and added to the contingency line item or the Contract Price reduced by
that amount.

5.11 Utilities

The Customer shall provide and pay for water, heat, fuel and utilities consumed by ESCO or
in any additional equipmentthat may be used by ESCO during performance of the Work,
including, for example, generators. ESCO shall install and pay for any facilities or
modifications not already in existence that are necessary to access such water, heat, and
utilities during the Work.

5.12 Concealed or Unknown Conditions

lf ESCO finds conditions during the Work that are subsurface or otherwise concealed
physical conditions that differ materially from those indicated on the drawings or are
unknown physical conditions of an unusual nature that differ materially from those
conditions ordinarily found to exist and generally recognized as inherentin similar
construction activities, ESCO shall notify Customer of such conditions promptly, prior to
significantly disturbing the same, and in no event later than one (1) business day after first
observing the conditions.

Such conditions may include, but are not limited to, water damage, termite damage, or
structural building defects. If such conditions differ materially and cause an increase in
ESCO’s cost of, or time required for, performance of any part of the Work, ESCO shall
submit a written estimate of the material and labor cost increase and time delay. If the
Customer concurs wih the need, cost estimate, and time delay, Customer and ESCO shall
make an equitable adjustmentin the Contract Price or Time for Performance and Final
Completion, or both. Pursuant to Section 5.08 above, ESCO shall not be entitled to
damages for delay beyond Customers control.

5.13 Casualty, Condemnation, Damage

If any fire, flood, other casualty, or condemnation renders a portion of any property
described in Attachment 1 - Final Investment Grade Audit unsuitable for habitation or
destroys a substantial part of the area within which the Work is to be performed or which
the Work affects, the Customer and ESCO may terminate or modify this Contract by mutual
agreement. The Customer shall pay ESCO for all Work completed to the date of
termination. If any materials or equipment are damaged by the negligence or willful
misconduct of an employee, agent or invitee of Customer, Customer shall repair or replace
said item within a reasonable period of time, or, adjust the Contract Price to pay for repair or
replacement or adjust Time for Performance and Final Completion, or both.

5.14 Standards of Service and Comfort

The facility performance requirements of service and comfort applicable to the Premises for
heating, cooling, hot water, ventilation and lighting are stated in Attachment 8 - Standards of
Comfort (“Standards of Comfort”) and shall apply throughout the Contract. If ESCO is
unable to meet these Standards of Comfort for any reason, the Customer and ESCO shall
mutually agree upon an appropriate adjustment to Energy Savings, the price paid for the
Work or any corrective measures that shall be provided and paid for byESCO.

15 ESCO Contract — Nashua Schools & EEI, Inc.