Loading...
HomeMy WebLinkAbout15 153 Amendment No. 1 to By-law No. 2014-128, the RealTerm Energy Corporation Energy Services Agreement (Street Lighting Upgrade) By-law THE CORPORATION OF THE MUNICIPALITY OF KINCARDINE KBT �yy BY -LAW NO. 2015 -153 BEING A BY -LAW TO AMEND BY -LAW NO. 2014 -128; BEING A BY -LAW TO AUTHORIZE THE SIGNING OF AN ENERGY SERVICES AGREEMENT (STREET LIGHTING UPGRADE) WITH REALTERM ENERGY CORPORATION WHEREAS Sections 8 (1) and 9 of the said Municipal Act, provide that the powers of a municipality under this or any other Act shall be interpreted broadly so as to • confer broad authority on the municipality to enable the municipality to govern its affairs as it considers appropriate and to enhance the municipality's ability to respond to municipal issues and a municipality has the capacity, rights, powers and privileges of a natural person for the purpose of exercising its authority under this or any other Act; AND WHEREAS the Council of The Corporation of the Municipality of Kincardine, with the passage of By -law No. 2014 -128 entered into an Energy Services Agreement (Street Lighting Upgrade) with RealTerm Energy Corporation; AND WHEREAS the Council of The Corporation of the Municipality of Kincardine deems it necessary to amend the By -law No. 2014 -128 to modify certain terms; NOW THEREFORE the Council of The Corporation of the Municipality of Kincardine ENACTS as follows: 1. That the Council of The Corporation of the Municipality of Kincardine enter into Amendment No. 1 to the Energy Services Agreement (Street Lighting Upgrade) with RealTerm Energy Corporation attached as Schedule `A' to • this by -law. 2. That the Mayor and Chief Administrative Officer be authorized and directed to execute, on behalf of the Council of The Corporation of the Municipality of Kincardine, Amendment No. 1 to the Energy Services Agreement (Street Lighting Upgrade) with RealTerm Energy Corporation attached as Schedule `A' to this by -law. 3. This by -law shall come into full force and effect upon its final passage. 4. This by -law may be cited as the "Amendment No. 1 to By -law No. 2014 -128, the RealTerm Energy Corporation Energy Services Agreement (Street Lighting Upgrade) By -law ". READ a FIRST and SECOND TIME this 18th day of November, 2015. READ a THIRD TIME and FINALLY PASSED this 18th day of November, 2015. • Mayor Clerk Concentra March 1, 2016 The Municipality of Kincardine 1475 Concession 5, R.R. #5 Kincardine, Ontario N2Z 2X6 (the "Customer ") Dear Sirs: Re: Energy Services Agreement (Street Lighting Upgrade) dated October 15, 2014, as amended by Amendment No. 1 to Energy Savings Agreement between Kincardine and the Corporation (the "ESA ") As you are aware, pursuant to Article (m) of the Acknowledgement of Assignment entered into under the ESA, the Lender, as defined therein, was to provide collections account information for the Assigned Payments. As an administrative convenience, but without limiting any of your other obligations under the ESA, please continue to make the Assigned Payments to the accounts of Realterm Energy Corp. ( "Realterm ") until such time as written notice is received from us directing you otherwise. All your obligations under the ESA with Realterm otherwise remain unchanged. Yours truly, 4 Agenda Council ❑ File No, d_o • l Consent ❑ A; Marney Kuntz, Qi n � �i�7 r ^ ^^ ^ -f other 3 Manager, Finance & ' , istration LIZ Concentra Financial Services Association C``C El j„ � Co r1; C7 C3 ►°� CJ Treasury B 1' L z 54re - e4 /,' G /,'", -1 Public W'r, ts ❑ CE" Buildiri"!I''ionnig ❑ ❑ _,_.w. I F?ccsg 3 „gin ❑ F Ermency Services ❑ C7 Scan n::: 4 Police Servl,s ❑ _. TriIrisritCOMM.SerV, ❑ i (' ED nr' 1 V orporate Offices • 2055 A■oeit Street 333 3rd Avenue North concentrafinancial.ca tr in Regina SK S4P 3G8 Saskatoon SK S7K 2M2 j r , MUNICIPALITY OF KINCARDINE ,_, ENERGY PERFORMANCE CONTRACT r•, AMENDING DOCUMEN1 lib r - , i_ _ ,0 l i ,--, Itti, • t - ' - • 0 fi , � } - � ' ,- -" i / •••.. . r-}11P. \ w OCTOBER, 201 REALTERM ____ ENERGY r •oto courtesy of Cree In' REALTERM I ENERGY October 29 ', 2015 Murray Clarke I CAO The Corporation of the Municipality of Kincardine 1475 Concession 5, R.R. #5 U Kincardine, Ontario N2Z 2X6 I Re: Energy Savings Agreement Signed on October 15', 2014 with the provision By -Law No. 15 -1 between; The Corporation of the City of Kincardine and RealTerm Energy Corp. I Request to enter into an Amending Agreement Dear Mr. Clarke: 1 We are very pleased to confirm that we have completed your LED Street Light Replacement Upgrade. We certainly hope that you and your taxpayers are pleased with the results. 1 The next and final step in the LAS /RealTerm Energy LED Street Light process is the final account reconciliation and signature of an Amendment Agreement to document the final details of the project. I To be included in the Amendment Agreement is the following: I 1) Final Project Economics As you may be aware, the EPC contract calls for a post - construction reconciliation to allow for a I true -up of the final construction costs related to the final scope of work, and ultimately, the final share of savings. Based upon this reconciliation calculations, we are pleased to provide the following: Current EPC Contract (See Schedule H of October 15', 2014 ESA) 1 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 I Total Savings $127,289 $130,308 $133,411 $136,599 $139,874 $143,239 $146,697 $150,251 $153,902 $157,653 Customer $13,716 $13,716 $13,716 $13,716 $13,716 $13,716 $13,716 $13,716 $13,716 $13,716 I Company $113,573 $116,592 $119,695 $122,883 $126,158 $129,523 $132,981 $136,535 $140,186 $143,937 1 1 I Realterm Energy Corp. 1237 rue de la Montagne, suite 400, Montreal QC H3G 1Z2 Tel. (514) 422 -1000 1 1 Proposed EPC Amendment (Post - Construction) I Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Total 1 Savings $131,148 $134,647 $138,244 $141,940 $145,737 $149,639 $153,649 $157,769 $162,004 $166,355 C ustomer $16,092 $16,521 $16,962 $17,416 $17,882 $18,361 $18,853 $19,358 $19,878 $20,412 Company $115,056 $118,126 $121,282 $124,524 $127,855 $131,278 $134,796 $138,411 $142,126 $145,943 1 1 0 11 total project costs increased by approx. $9 000 1.3 /o from $688 500 to 697 500, mainly , t p � y pp ( ) Y as a I result of the following: • Labour costs to install the system increased by a net $11,800 due to extra fixtures, delivery I charges, unbudgeted meetings with Westario and higher install costs for the Decorative base installation fees, • Fixture /equipment costs increased by a net $1,120, • Cost to perform the GIS /GPS audit were $2,000 less than budget, I • Travel Costs were $1,400 less than budget, • Project Management Fees were $2,600 more than budget, • RTE Development Fees, LAS Fees and IESO incentive increased by a net $800, 1 • Contingency of $3,900 was not used. However, after our final reconciliation of all costs and subsidies, final installed inventory was 1,151 1 fixtures vs. an original IGA of 1,148 for a slight increase of 3 fixtures. Final Project Yr. 1 total share of savings increased from $113,573 to $115,056 for an increase of $1,483 1 or 1.3 %. Of this amount, Kincardine's Yr. 1 Share of Savings increased by $2,376 from $13,716 to $16,092. 1 Similarly, RTE's Yr. 1 Share of Savings increased by $1,483 from $113,573 to $115,056. I As a result of this reconciliation and the change to the overall Project Savings and the Share of Savings between the Parties, the Amendment Agreement must include changes to the Schedules A, B, F, G, H, L, M, O and P. 1 2) Replace Schedule M - Lenders Direct Agreement to Schedule M - Acknowledgement of Assignment I The Amendment to provide for the payment of 85% of the periodic payment directly to RealTerm Energy's Lender for the purchase and use of the equipment. This payment is to be made to the Lender, without set -off, with the balance of payment (15 %) to be paid directly to RealTerm EPC for the ongoing I maintenance and servicing of the Project. As outlined within the ESA Agreement, after proper notification to RealTerm EPC, should RealTerm EPC not undertake the Services, the Customer may undertake the required repairs and/or maintenance and set -off these costs by this balance of payment. 1 3) Requirement for RealTerm Energy EPC to provide a 10 -year Performance Insurance Policy. II The Amendment to require RealTerm Energy EPC to provide a 10 -Year Performance Insurance Policy (the "Policy ") such that, after proper notification, should RealTerm Energy EPC not undertake the 2IP ig. ESA Amendment 1 (1 (15 1 5 I . REALTERM L \lRGS Services, and should the cost of such services exceed the balance of a ment amount (15 %), the Policy Y ' will reimburse the Customer for such excess costs up to an amount equal to 85% of the periodic payment. 4) Schedule C2 - Certificate of Acceptance — Signature Required ' In the closing binder set to you earlier this year, we provided a Certificate of Acceptance that was to be signed and returned to us. The Certificate of Acceptance is our record that you agree that we have fulfilled our obligations under the contract and that the project is now in operating and is being used for ' its intended use. According to our records, to date, we have not received back a duly signed Schedule C2. Unless there are outstanding issues we are not aware, we would kindly ask you to sign Schedule C2 and return this document to us at your earliest convenience. If you are not comfortable signing this schedule ' at this time, please contact us immediately to explain the situation and allow us to complete the project to your satisfaction. ' This Amendment request package also contains the following; 1) A Letter of Support from LAS BLG with respect to the Amendment Request; ' 2) Aviva of Canada - 10 -Year Performance Insurance Certificate (Draft); 3) EPC Amendment Document with Schedules; 4) Economic Analysis. 5) Certificate of Acceptance ' In closing, we are sending you this package in advance to allow you the time to review it at your leisure. ' We will follow up shortly after your receipt of this package to walk you through the document and to answer any questions you may have at this time. ' Yours Sincerely, RealTerm Energy Corp. Kerry Wilson Managing Director, Business Solutions 1 1 1 1 Wage- ESA Amendment 09/15/15 REAL—TERM F..00., C 1 I i 1 r D m a 0 in m 3 m 1 1 Tt Murray Clarke I CAO The Corporation of the Municipality of Kincardine 1475 Concession 5, R.R. #5 I Kincardine, ON N2Z 2X6 caoc kincardine.net I 28 October 2015 Dear Murray, 1 LED streetlight technology is a relatively recent phenomenon. As you know, after studying the market for some five years, in April 2013, AMO /LAS and ReatTerm Energy entered into a strategic partnership to deliver an LED street Tight upgrade and replacement program that would be the best value offering in I the market, in terms of price, quality and design. With over 125 municipalities signing on since 2013, we think we're achieving that goal. This program was the first of its kind in North America, and we have continually sought to improve our service offering to benefit all our member communities and our partners. I One offering that RealTerm Energy brought to the table was its ability to offer financing, to those municipalities that required it, as captured in the Energy Performance Contract that your municipality currently has in place. RealTerm Energy acted on the best information available from the legal and 1 lending community to design your current contract, based on a Public- Private - Partnership model. As 11 other municipalities are taking advantage of this form of financing, the number and total value of I the RealTerm Energy funded contracts is sufficient for RealTerm Energy to finance them as a group, but the lending community requires some changes to sections of the contract. It should be noted that these changes do not alter the shared savings to the municipality. In consultation with RealTerm Energy it was decided that Borden Ladner Gervais, LAS' legal counsel I I c gy ' g counsel, should review the proposed modifications to RealTerm Energy's Energy Savings Agreement — Street I Lighting Upgrade (ESA) contract so that it will allow RealTerm Energy to obtain financing, as envisioned as part of the original business plan. I LAS agreed to facilitate an independent, third -party review but made it clear from the on -set that it will only support modifications to the agreement that are considered to be either neutral or an improvement to the municipalities' position. RealTerm Energy has worked diligently to minimize any I changes to the contract, and has also structured into the amendment a new insurance provision, (not in the original ESA agreement) that enhances the position of the municipal customer. 1 AM. I 200 University Ave. Suite 801 www.las.on.ca Tel 416. 971.9856 Toll Free in Ontario Toronto, ON, M5H 3C6 lasr7a las.on.ca Fax 416. 971.6191 877.426.6527 1 1 1 1 BLG has now concluded an extensive legal review of the original ESA and the proposed amendment provisions, and LAS is of the opinion that municipalities signing the amendment agreement are at least I in the same position, with respect to risk, as they were prior to signing the amendment and, it can be argued, they may even be in a better position due to the introduction of a 10 -Year Performance I ■ Insurance Policy naming each Municipality as an Additional Issued underwritten by Trisura, a highly reputable Canadian insurance company rated "A -" by Best's Key Rating Guide. RealTerm Energy will contact you to set up a meeting to explain the proposed changes to you, including the addition of this 1 insurance provision. 1 After reviewing BLG's legal review and opinion, LAS supports recommending that the relevant municipalities sign the enclosed Energy Amendment No. 1 to Energy Savings Agreement (Street Lighting Upgrade). If you have any questions or concerns please contact Scott Vokey, LAS Energy Services 1 Manager at svokevaamo.on.ca I Sincerely, 1 l 1 Na icy Plumridge 0 President, LAS 1 1 1 1 1 1 1 1 l m 0) 3 cu a 3 m 1 1 I AMENDMENT NO. 1 TO ENERGY SAVINGS AGREEMENT (STREET LIGHTING UPGRADE) IP 1 Amendment No. #1 to Energy Savings Agreement, dated K.)00e" n 1 , 2015 (the "Amendment "), between The Municipality of Kincardine with primary offices located at ' 1475 Concession 5, R.R. #5, Kincardine, ON N2Z 2X6 (the "Customer "), and RealTerm Energy Corp., a corporation incorporated under the laws of the Province of Nova Scotia, with primary offices located at Suite 400, 1237 rue de la Montagne, Montreal, Quebec, (the "Company ", and together with the Customer, the "Parties ", and each, a "Party "). ' WHEREAS, the Parties have entered into an Energy Savings Agreement, dated October 15th, 2014 (the "Existing Agreement "); and ' WHEREAS, the Parties hereto desire to amend the Existing Agreement to modify certain terms, subject to the conditions set forth herein. 1 NOW, THEREFORE, in consideration of the premises set forth above and other good • and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows: 1. Definitions. Capitalized terms used and not defined in this Amendment have the 1 respective meanings assigned to them in the Existing Agreement. 2. Amendments to the Existing Agreement. As of the Effective Date (defined below), the Existing Agreement is hereby amended or modified as follows: ' (a) Section 1.1 of the Existing Agreement is hereby amended by inserting the following new definition in the appropriate alphabetical order: 1 "Acknowledgement of Assignment" means that acknowledgement by the Customer of the Assignment of certain payments by the Company to the Lender on the terms and conditions set out in Schedule M. (b) Section 1.1 of the Existing Agreement is hereby amended by deleting the defined 1 terms "Lender's Direct Agreement" and "Lending Agreements" and the term Acknowledgement of Assignment will replace Lender's Direct Agreement where it appears in ' the Existing Agreement. (c) The definition of "Lender" now appearing in Section 1.1 of the Existing Agreement is hereby amended in its entirety to read as follows: ' Legal *15988151.18 047987 -00001 1 ' r all of the Persons who provide financing to or "Lender" m eans any o a o p g purchases p I receivables of the Company for the purposes of financing the performance of all or any portion of the Work and /or Services, and for greater clarity, excludes any Affiliate of the Company. 1 (d) Section 2.3 of the Existing Agreement is hereby amended and restated in its entirety to read as follows: 1 2.3 Insurance (a) The Company shall purchase, maintain, and upon written request of the re () p Y p p q 1 Customer, provide evidence of insurance coverage, of the types, in the amounts and for the periods specified in C -1 — Company's Insurance Requirements. 1 (e) Section 4.4(b) of the Existing Agreement is hereby amended by deleting the I Reference to "Schedule C — Company's Insurance Requirements" and replacing it with references to "Schedule C -1 — Company's Insurance Requirements ". 1 ( Section 16.1 is hereby amended by deleting Section 16.1 and replacing it with the following: 1 16.1 Assignment by Company I (a) Neither this Agreement, nor the other Project Documents, nor any rights, entitlements or obligations under this Agreement or the other Project Documents may be assigned, sold, disposed of, sub - licensed, encumbered or otherwise I transferred or alienated by the Company in any manner whatsoever without the prior consent of the Customer, such consent not to be unreasonably withheld or delayed; provided that, nothing herein shall serve to restrict or prevent: (i) the I Company from arranging for the performance of all or a portion of its obligations hereunder and under the other Project Documents by third party contractors, subcontractors and /or agents, it being acknowledged that the Company shall, at all I times, remain responsible and liable for the performance of such obligations notwithstanding any such third party contracting, subcontracting or agency; (ii) the right of the Company to assign all, but not less than all, of the rights, 1 entitlements and obligations hereunder and under the other Project Documents to any Affiliate of the Company or to any general or limited partnership or other entity that is directly or indirectly owned or controlled by the Company and /or 1 any of its Affiliates; (iii) any direct or indirect change of Control in respect of the Company; or (iv) an assignment or transfer by the Company in connection with the sale of all or substantially all of the assets and /or undertaking of the Company. I (b) Customer hereby acknowledges that Company intends to assign to the Lender those payments ( "Assigned Payments ") listed in Column A of Schedule 1 H, and all rights and entitlements under this Agreement, but none of the 1 Legal *15988151.18 047987 -00001 1 obligations under this Agreement, which the Company will retain. Customer further acknowledges and agrees that in the event the Company has assigned its ' rights and entitlements under this Agreement to the Lender, Customer shall agree with the Lender, to make all Assigned Payments after the Commencement Date ' directly to the Lender without set off or deduction of any kind and acknowledges that the Assigned Payments will be due and owing to the Lender regardless of whether the Company achieves the Savings Guarantee, terminates this ' Agreement, or if the Company commits an Event of Default under this Agreement. Customer agrees to execute and deliver to the Lender, the form of acknowledgement of assignment set out in Schedule M. 1 Notwithstanding the above, the Company acknowledges that it will continue to be liable to Customer for all of its obligations and liabilities under this Agreement, ' and further acknowledges and agrees that Customer retains a separate and independent right to sue the Company or seek equitable remedies against the Company with respect to any claims Customer may have against the Company ' pursuant to the terms of this Agreement and may set off any claim it may have against the Company against any payments due to the Company which have not been assigned. 1 (c) The Company shall not be released from any of its obligations under this Agreement and the other Project Documents except upon an assignment, transfer, disposition or other alienation of its interest in this Agreement and the other 1 Project Documents in accordance with Section 16.1(a); provided that and for greater certainty, any assignment or transfer by the Company as contemplated in Section 16.1(a)(ii) and Section 16.1(a)(iv) shall be conditional upon receipt by the ' Customer from the Person to whom any such assignment, transfer, disposition or other alienation is made, of a confirmation in writing to the Customer that it will perform all of the obligations of the Company under this Agreement and the other ' Project Documents and under any other agreement in connection with this Agreement to which the Company and the Customer are parties in respect of the period from and after the assignment. (g) Schedule A of the Existing Agreement is hereby amended by deleting it in its 1 entirety and replacing it with Schedule A -1 attached hereto. (h) Schedule B of the Existing Agreement is hereby amended by deleting it in its 1 entirety and replacing it with Schedule B -1 attached hereto. (i) Schedule C of the Existing Agreement is hereby deleted in its entirety and 1 replaced with Schedules C -1. (j) Schedule G of the Existing Agreement is hereby amended by deleting it in its entirety and replacing it with Schedule G -1 attached hereto. 1 1 Legal'15988151.18 047987 -00001 1 1 (k) Schedule H of the Existing Agreement is hereby amended by deleting it in its 1 entirety and replacing it with Schedule H -1 attached hereto. (1) Schedule L of the Existing Agreement is hereby amended by deleting it in its 1 entirety and replacing it with Schedule L -1 attached hereto. (m) Schedule M of the Existing Agreement is hereby amended by deleting it in its 1 entirety and replacing it with Schedule M -1 attached hereto. (n) Schedule 0 of the Existing Agreement is hereby amended by deleting it in its 1 entirety and replacing it with Schedule 0-1 attached hereto. (o) Schedule P of the Existing Agreement is hereby amended by deleting it in its 1 entirety and replacing it with Schedule P -1 attached hereto. ' For clarity, any reference to a Schedule will include a reference to the revised Schedule under this Amendment. 1 3. 10 -Year Extended Equipment / Warranty Policy. As at the effective date of this Amendment, the Company shall maintain a 10 -year extended equipment / warranty insurance ' policy with a deductible amount equal to not more than 15% of the total annual Compensation to the Company and a policy limit equal to a minimum of 85% of the annual payment, as outlined in Schedule H -1. Company shall pay the premiums at inception date of the policy and shall, ' upon request, deliver to Customer satisfactory evidence of the prepayment of such policy. The policy shall name the Customer as additional insured with respect to the Company's operations under the Existing Agreement and shall be issued by insurers rated "A -" VII or better by Best's Key Rating Guide as shown in the current edition of Best's Insurance Reports. Certificates of insurance shall be delivered to the Customer at the effective date of this Amendment. The ' certificate shall provide that such policy shall not be canceled without at least thirty (30) days' prior written notice to Customer. ' 4. Date of Effectiveness; Limited Effect. This Amendment will become on the date hereof (the "Effective Date "). Except as expressly provided in this Amendment, all of the terms and provisions of the Existing Agreement are and will remain in full force and effect and are hereby ratified and confirmed by the Parties. Without limiting the generality of the foregoing, the amendments contained herein will not be construed as an amendment to or waiver of any other provision of the Existing Agreement or as a waiver of or consent to any further or future action on the part of either Party that would require the waiver or consent of the other Party. On and after the Effective Date, each reference in the Existing Agreement to "this Agreement," "the Agreement," "hereunder," "hereof," "herein" or words of like, will mean and be a reference to the ' Existing Agreement as amended by this Amendment. 1 1 Legal *15988151.18 047987 -00001 5. Acknowledgement of Assignment. The Company shall not, nor shall the Customer be required to enter into an Acknowledgement of Assignment prior to the Commencement Date. After the Commencement Date, the Company can request and the Customer shall, upon such request, execute and deliver an Acknowledgement of Assignment. 6. Representations and Warranties. Each Party hereby represents and warrants to the other Party that: ' (a) It has the full right, power and authority to enter into this Amendment and to perform its obligations hereunder and under the Existing Agreement as amended by this 1 Amendment. (b) The execution of this Amendment by the individual whose signature is set forth at the end of this Amendment on behalf of such Party, and the delivery of this Amendment by such Party, have been duly authorized by all necessary action on the part of such Party. 1 (c) This Amendment has been executed and delivered by such Party and (assuming due authorization, execution and delivery by the other Party hereto) constitutes the legal, valid ' and binding obligation of such Party, enforceable against such Party in accordance with its terms[, except as may be limited by any applicable bankruptcy, insolvency, reorganization, moratorium, or similar laws and equitable principles related to or affecting creditors' rights 1 generally or the effect of general principles of equity. EXCEPT FOR THE EXPRESS REPRESENTATIONS AND WARRANTIES SET FORTH IN THE EXISTING AGREEMENT AND IN THIS SECTION 6 OF THIS AMENDMENT, (A) NEITHER PARTY HERETO NOR ANY PERSON ON SUCH PARTY'S BEHALF HAS MADE OR MAKES ANY EXPRESS OR IMPLIED REPRESENTATION OR WARRANTY 1 WHATSOEVER, EITHER ORAL OR WRITTEN, WHETHER ARISING BY LAW, COURSE OF DEALING, COURSE OF PERFORMANCE, USAGE OF TRADE OR OTHERWISE, ALL ' OF WHICH ARE EXPRESSLY DISCLAIMED, AND (B) EACH PARTY HERETO ACKNOWLEDGES THAT IT HAS NOT RELIED UPON ANY REPRESENTATION OR WARRANTY MADE BY THE OTHER PARTY, OR ANY OTHER PERSON ON SUCH OTHER PARTY'S BEHALF, EXCEPT AS SPECIFICALLY PROVIDED IN THIS SECTION 6. 1 7. Miscellaneous. (a) This Amendment is governed by, and construed in accordance with, the laws of the Province of Ontario and the federal laws of Canada applicable therein. ' (b) This Amendment shall inure to the benefit of and be binding upon each of the Parties and each of their respective permitted successors and permitted assigns. 1 Legal *15988151.18 047987 -00001 1 1 (c) The headings in this Amendment are for reference only and do not affect the ' interpretation of this Amendment. (d) This Amendment may be executed in counterparts, each of which is deemed an ' original, but all of which constitutes one and the same agreement. Delivery of an executed counterpart of this Amendment electronically or by facsimile shall be effective as delivery of an original executed counterpart of this Amendment. ' (e) This Amendment constitutes the sole and entire agreement of the Parties with respect to the subject matter contained herein, and supersedes all prior and contemporaneous 1 understandings, agreements, representations and warranties, both written and oral, with respect to such subject matter. 1 1 1 1 1 1 1 1 1 1 1 1 Legal *15988151.18 047987 -00001 1 IN WITNESS WHEREOF, the Parties have executed this Amendment on the date first written above. REALTE' .► ENE' Y CORP. By I , Name: Sean Neely Title: President THE MUNICIPALITY OF KINCARDINE. By ' Name: f\- c Ecc e Title: o Orlurick C10( VC r,Ne C / I I I i Legal *15988151.18 047987 -00001 1 A -1 1 1 SCHEDULE A -1 EXISTING ASSETS / ECES 1 Part 1— Existing Assets EXISTING ASSETS (LDC: Westario) 1 TYPE SYSTEM QTY DEMAND WATTAGE (kW) 1 WP HPS 100W 128 18 2.3 WP HPS 150W 192 670 128.6 WP HPS 200W 250 3 0.8 WP HPS 250W 307 77 23.6 1 Decorative Pedestrian 128 10 1.3 Small Arm 1 Decorative Top Post 128 98 12.5 1 Single Decorative Top Post 128 8 1.0 Double 1 TOTAL 884 170.2 1 EXISTING ASSETS (LDC: Hydro One) SYSTEM DEMAND 1 TYPE WATTAGE QTY (kW) HO HPS 70W 100 1 0.1 1 HO HPS 100W 130 73 9.5 HO HPS 150W 190 138 26.2 1 HO HPS 200W 250 1 0.3 HO H PS 250W 310 25 7.8 1 Decorative Pedestrian Small Arm 130 7 0.9 Decorative Top Post 130 22 2.9 1 Single TOTAL 267 47.6 1 1 1 1 Legal *15988151.18 047987 -00001 1 I Part 2 — Enera Conservation E 1 ui s ment 1 ENERGY CONSERVATION EQUIPMENT (LDC: Westario) SYSTEM DEMAND TYPE WATTAGE QTY (kW) CREE - XSP - 1 - 43W 43 5 0.2 I CREE - XSP -2 - 53W 53 288 15.3 CREE XSP-2 73W 73 448 32.7 I CREE - XSP -2 - 91W 90 1 0.1 CREE XSP 2 101W 101 26 2.6 1430ALED-5P-ML-PT- ' 4A1R45T3-SRD 67 116 7.8 I TOTAL 884 58.7 1 ENERGY CONSERVATION EQUIPMENT (LDC: Hydro One) SYSTEM DEMAND TYPE QTY WATTAGE (kW) I CREE - XSP -1 - 43W 43 65 2.8 I CREE - XSP -1 - 53W 53 1 0.1 CREE XSP 2 73W 73 139 10.1 CREE - XSP -2 -91W 90 1 0.1 CREE -XSP -2 - 101W 101 17 1.7 CREE - XSP -2 - 65W 64 15 1.0 I 1760LED /CA /PT3 /4ARC 67 29 1.9 45T3- MDL03 /R1 /STD I TOTAL 267 17.7 1 1 1 1 Legal *15988151.18 047987 -00001 1 B -1 SCHEDULE B -1 ENERGY SAVINGS GUARANTEE 1 The Customer's annual energy savings, which are produced by the installation and commissioning of the ECE's, to be guaranteed under the terms of this Agreement is calculated as follows (in accordance with the figures set out in Schedule A -1 — Existing Assets / ECEs): 1 Annual Energy Savings = Existing Asset Wattage — Post Installation Wattage Existing Asset Wattage = 217.8 kW Post Installation Wattage = 76.4 kW Annual Energy Savings = 141.4 kW 1 1 1 1 1 1 1 1 1 1 Legal *15988151.18 047987 -00001 C -1 -1 SCHEDULE C -1 COMPANY'S INSURANCE REQUIREMENTS Effective as of the date that the Company commences the Work, the Company shall purchase, maintain, provide and pay for the following insurance coverage: 1. COMMERCIAL GENERAL LIABILITY INSURANCE: ' The olic shall have limits of not less than $5,000,000 per occurrence and aggregate. P Y Umbrella or excess liability insurance may be used to achieve the desired limit. The ' Company shall maintain Commercial General Liability insurance from the date that the Company commences the Work until the Commencement Date, but only with respect to liability arising out of the Work performed by the Company. And, on an ongoing basis ' after the Commencement Date, for the duration of the Term of this Agreement, but only with respect to liability arising out of the maintenance, monitoring, repair and adjustment of the ECEs as more particularly set forth in Schedule I— Description of Services. ' Coverage shall include: 1 • Bodily Injury/Property Damage; • Personal Injury & Advertising Injury; 1 • Premises /Operations Liability; • Products /Completed Operations Liability; 1 • Broad Form Property Damage Liability; and I • Coverage written on an Occurrence form basis. 2. AUTOMOBILE LIABILITY INSURANCE: ' The policy shall provide coverage for bodily injury, death, and damage to property with respect to all licensed vehicles owned, leased, hired and non -owned by the Company. The policy shall have limits of not less than $2,000,000 per occurrence. The Company shall maintain such Automobile Liability Insurance from the date that the Company commences the Work and on an ongoing basis for the duration of the Term of this Agreement. 1 3. PROPERTY INSURANCE: ' The Company shall ensure that each subcontractor engaged by the Company in the performance of the Work carries Special Perils ( "All Risks ") Property Insurance on any and all products (materials, supplies, equipment, apparatus, etc.) intended for ' incorporation into the Work, for the full replacement value of the products. Coverage shall include "off -site storage" and "transit" with sub - limits sufficient to insure the full replacement value of any property or equipment stored "off- site" or "in transit ". All Risks Property Insurance shall be in the joint names of the subcontractor, the Company and the ' Legal *15988151.18 047987 -00001 1 C -1 -2 Customer or name the Customer and the Company as loss payee. All subcontractors shall ' maintain such All Risks Property Insurance from the date that the Company commences the Work until the Commencement Date. 4. EQUIPMENT INSURANCE: The Company shall ensure that each subcontractor engaged by the Company in the performance of the Work carries Equipment Insurance sufficient to cover construction machinery and equipment used in connection with the performance of the Work. Such Equipment Insurance shall not allow subrogation claims by the insurer against Company. All subcontractors shall maintain such Property Insurance from the date that the 1 Company commences the Work until the Commencement Date. 5. OTHER INSURANCE REQUIREMENTS: 1 (a) All of the liability policies above shall name the Customer as additional insured but only with respect to liability arising out of the Work performed ' by the Company. (b) All of the policies above shall be primary and non - contributing with other insurance available to the Customer. (c) All of the policies above shall provide thirty (30) days prior written Notice of Cancellation or Non - Renewal (ten (10) days for non - payment of premium) to the Customer. 1 1 1 1 1 1 1 1 Legal *15988151.18 047987 -00001 G -1 -1 SCHEDULE G -1 MEASUREMENT, VERIFICATION AND REPORTING (M &V PLAN) TABLE OF CONTENTS ' 1. ENERGY CONVERSATION MEASURES 2. SELECTED IPMVP OPTION AND MEASUREMENT BOUNDARY 1 3. BASELINE: PERIOD, ENERGY AND CONDITIONS 3.1 Identification of the baseline period 3.2 BASELINE ELECTRICITY CONSUMPTION AND DEMAND 3.3 INDEPENDENT variables 3.4 Baseline static factors 4. REPORTING PERIOD 5. BASIS FOR ADJUSTMENT 1 6. DESCRIPTION OF THE BASELINE ADJUSTMENT METHODOLOGY 7. REPORTING PERIOD AND ANALYSIS PROCEDURE ' 8. ENERGY PRICES 9. METER SPECIFICATIONS ' 10. MONITORING RESPONSIBILITIES 11. REPORT RESPONSIBILITY 12. BUDGET ' 13. FORMAT OF M &V REPORT 14. QUALITY ASSURANCE Legal *15988151.18 047987 -00001 1 G -1 -2 1. ENERGY CONSERVATION MEASURES ' As part of this measure, 1,006 cobra head high pressure sodium (HPS) and mercury vapour (MV) street lights will be upgraded to Cree LED streetlight fixtures, and 145 decorative lights will be replaced by LED decorative fixtures in Kincardine, Ontario. 2. SELECTED IPMVP OPTION AND MEASUREMENT BOUNDARY 1 Option C According to IPMVP Volume I EVO 10000 - 1:2012 1 This measurement option includes all 1,151 streetlights in the municipality. It is a suitable method since the municipality receives a bill dedicated to street lighting from the utility. Therefore, using the Option C signifies capturing all of the effects of the Energy Conservation Measure. Additionally, this method reduces M &V costs since the electric utility provides all energy data. Option C: All street lights in the municipality. 3. BASELINE: PERIOD, ENERGY AND CONDITIONS 3.1 IDENTIFICATION OF THE BASELINE PERIOD The baseline period starts on January 1, 2014 to December 31, 2014, corresponding to a complete 1 -year period. Baseline energy data is monitored from electric utility invoices. 3.2 BASELINE ELECTRICITY CONSUMPTION AND DEMAND Baseline electricity consumption and demand data come from actual readings shown on the electric utility invoices. The following table presents the baseline electricity consumption and demand. Legar15988151.18 047987 -00001 1 G -1 -3 1 1 Period Fixture Number of Annual hours of Electric electric fixtures operation consumptio power (h) n 1 (kW) (kWh) 1 Jan 1, Dec 31, 217.8 1,151 4,458(Westario) 964,185 2014 2014 4,320 (HO) 1 3.3 INDEPENDENT VARIABLES Independent variables include factors that can affect system energy consumption or 1 demand and that is included systematically to determine the baseline periodic adjustment during the reporting period. 1 In the present M &V plan, there are no independent variables to consider. 3.4 BASELINE STATIC FACTORS ' Static factors include equipment and operating modes considered fixed during the M &V plan preparation. Thus, if static factors change after the baseline period, the baseline must be adjusted (permanently or temporarily). 1 The list below identifies a series of static factors for this project. This list is not exhaustive and any other factor, which is likely to influence energy needs, could be 1 added. Static factors: 1 • Number of operating street lights (1,151) • Annual hours of street light use: 4,458 (Westario), 4,320 (Hydro One) 1 Change in these static factors can be monitored on the electric utility invoices. 1 4. REPORTING PERIOD The reporting period starts after the project implementation. It starts on Sept. 1, 2015 Energy savings are quantified yearly from electric utility invoices. 1 5. BASIS FOR ADJUSTMENT 1 Legal"15988151.18 047987 -00001 1 G -1 -4 1 1 1 I Energy savings (kWh) ( — ) [Baseline energy consumption kWh L gY p (kWh) 1 Option C Savings (_ ) 1 Reporting period energy consumption (kWh) ( ±) I Adjustments] 1 6. DESCRIPTION OF THE BASELINE ADJUSTMENT METHODOLOGY I Y N Non - Routine Adjustments: Y N ' Adjustments: (R) ■© (NR) There is no routine adjustment as part of this M &V process. I In the event that the municipality adds /removes /stops street lights or changes lighting operating hours, data will be collected from the municipality, lighting specifications and manufacturers. The procedure will be based on the impact of such change on static factors. I Adjustments will be defined either as temporary (applicable to a portion of the J p rY a (pp P I reporting period) or permanent (remains in effect for the rest of the reporting period). 1 1 1 Legal "15988151.18 047987 -00001 1 G -1 -5 7. REPORTING PERIOD AND ANALYSIS PROCEDURE 1 During the reporting period, energy data will be collected monthly from utility bills. Any change in Static Factors will be monitored monthly from utility bill information. Energy Y gy data and static factors will be monitored on the electric utility invoices for 10 years 1 following he project implementation. g p J p 8. ENERGY PRICES Cost savings are determined by applying the appropriate price schedule in the following equation. 1 Cost Savings = P x S Where: 1 P = Electricity price as specified in the contract for the baseline period. As specified in the contract, the price is adjusted to consider a 3% inflation yearly ($ / kWh) 1 S = Energy savings (kWh) 9. METER SPECIFICATIONS 1 All energy data used to quantify energy savings is provided by the electric utility via the electric invoices. Therefore, there is no meter involved as part of this M &V process. 10. MONITORING RESPONSIBILITIES Responsible Collect Energy Data Independent Variables Static Factors Data Frequenc Data Frequency Data Frequency RealTerm Electric Before the N.A. N.A. Number of Yearly ' Enei g} consumption project: operating Corp. and demand once street lights After the Annual project: hours of ' once street light every year use for five years 1 1 Legal *15988151.18 047987 -00001 1 G -1 -6 I 11. REPORT RESPONSI BILITY 1 Institution in ` RealTerm Energy Corp. charge I Frequency Once before the project and once every year after the project for ten years T '`ns ° ton <, 20 working days after the electric invoice is sent to RealTerm Energy Corp. I 12. BUDGET 1 Baseline Period $ 0 $2,500.00 1 Reporting Period $ 0 $1,000.00 TOTAL $ 0 $11,500.00 13. FORMAT OF M &V REPORT 1 Project Name Date 1 1. Energy data of the baseline and reporting period - Option C a. Period covered by the invoice 1 b. Invoice data for the baseline (fixture electric power, number of fixture, daily hours of operation electric demand, electric I consumption) c. Invoice data for the reporting period (fixture electric power, number of fixture, daily hours of operation electric demand, 1 electric consumption) 2. Energy price schedule 1 3. Baseline period adjustments 4. Adjusted baseline I 5. Energy savings calculations (kW, KWh and $) 6. Yearly energy savings since project beginning 1 Legal`15988151.18 047987 -00001 G -1 -7 14. QUALITY ASSURANCE The following procedure will be used to ensure the quality of the energy savings calculations and all other related activities in preparing the reports. • All savings calculations will be based on the electricity data from the copies of the bills from the energy suppliers and from direct on -site measurement. • Static factor: Information related to project static factor changes will be sent by ' the project's internal supervisor (client) to be analyzed by the CMVP accredited professional to determine the direct and indirect impacts on projected savings. This professional will then be able to make the necessary adjustments for the reference year to ' determine the real savings of the measures implemented. 1 Legal *15988151.18 047987 -00001 I H -1 SCHEDULE H -1 I COMPENSATION TO THE COMPANY I Based on the Baseline /Benchmarks: I During the Term of the Agreement, the Customer shall pay the following amounts under Column A and Column B: I A B I Monthly Payment for Monthly Payment for Monthly Total Annual Total Payment Equipment (Taxes Not Maintenance Costs Payment (HST (HST excluded) Payment Date Included) (Taxes Not Included) excluded) I Sep 1, 2015 - Aug 31, 2016 $8,149.80 $1,438.20 $9,588.00 $115,056 Sep 1, 2016 - Aug 31, 2017 $8,367.26 $1,476.58 $9,843.83 $118,126 I Sep 1, 2017 - Aug 31, 2018 $8,590.81 $1,516.03 $10,106.83 $121,282 Sep 1, 2018 - Aug 31, 2019 $8,820.45 $1,556.55 $10,377.00 $124,524 I Sep 1, 2019 - Aug 31, 2020 $9,056.40 $1,598.19 $10,654.58 $127,855 Sep 1, 2020 Aug 31, 2021 $9,298.86 $1,640.98 $10,939.83 $131,278 Sep 1, 2021- Aug 31, 2022 $9,548.05 $1,684.95 $11,233.00 $134,796 I Sep 1, 2022 - Aug 31, 2023 $9,804.11 $1,730.14 $11,534.25 $138,411 Sep 1, 2023 - Aug 31, 2024 $10,067.26 $1,776.58 $11,843.83 $142,126 t Sep 1, 2024 - Aug 31, 2025 $10,337.63 $1,824.29 $12,161.92 $145,943 I * Note (1): To coincide with the LDC's monthly billing cycle. I Any credits to which the Customer may be entitled to under this Agreement shall be I applied or credited to the amounts due under Column B above, only. I I I I Legal *15988151.18 047987 -00001 L -1 SCHEDULE L -1 ' BASELINE/BENCHMARKS The Baseline values for energy and maintenance savings are as follows: (a) Energy Consumption (kWh): ' Annual Annual Load Annual Demand Profile (Hours Energy (kW) of Operation) Consumption ' (kWh) Current Inventory 4,458(Westario) ' 217.8 4,320(110) 964,212 HO) ' Post ECE Installation 76.4 4,458(Westario) 338,041 4,320(I1O) ' Annual Savings 141.4 626,172 (b) Dollar Value of Energy Cost Savings: As of Commencement Date $87,725 ' (c) Dollar Value of Maintenance Savings: As of the Commencement Date $43,422 (d) Total Dollar Value of Energy Savings and Maintenance Cost Savings: ' As of the Commencement Date $131,147 I 1 Legal *15988151.18 047987 -00001 SCHEDULE M ACKNOWLEDGEMENT OF ASSIGNMENT The Corporation of the Municipality of Kincardine (the "Customer ") and Realterm Energy Corp. (the "Company ") are parties to the Energy Services Agreement dated October 15th, 2014 (the "ESA "). The Company has assigned the Assigned Payments and all rights and entitlements, but none of its obligations, under the ESA to Concentra Financial Services Association (the "Lender "). The Customer, the Company and the Lender hereby agree as follows: (a) Except as otherwise stated herein, all capitalized terms have the meaning as set out in the ESA; (a) Notwithstanding any other terms in the ESA, in the event of any conflict between the terms of this Acknowledgement of Assignment and the ESA, the terms of this Acknowledgement of Assignment shall govern; (b) Customer acknowledges and agrees that the payments set out in Column A of Schedule H -1 have been assigned to the Lender and are as set out in Schedule in Column A of Schedule H -1 and that the defined term "Assigned Payments" shall refer only to the payments set out in Column A of Schedule H -1; (c) Notwithstanding any term of the ESA, the Customer's obligation to make the Assigned Payments on each Payment Date shall be absolute and unconditional and shall not be subject to any reduction, set -off, defense or counterclaim for any reason or circumstance whatsoever including without limitation, a fundamental breach or breach by the Company of a fundamental term or Material Change, or the failure of the Company or the ECE to achieve the savings as set forth in the ESA; (d) As security for the customer's obligations to make the Assigned Payments to the Lender, the Customer and Company hereby grant to the Lender a security interest in the Existing Assets and the Energy Conservation Equipment; (e) No amendment or modification of the ESA which would adversely affect the Assigned Payments may be made without the prior written consent of the Lender; (f) The Company shall not amend or modify any agreement with the Lender which would adversely affect the Customer, without the prior written consent of the Customer; (g) Section 17.1 of the ESA shall not apply to any disputes between Customer and the Lender and the Lender shall not be bound by such provisions. The parties do agree however that this Acknowledgement of Assignment shall be governed by the laws of the Province of Ontario (and the laws of Canada applicable therein) and the parties agree to attorn to the Courts of the Province of Ontario to resolve Legal *20318374.3 - any disputes or disagreements arising from, or related to, this Acknowledgement of Assignment; (h) If any amount to be paid by Customer to Lender is not paid on or before its due date, Customer shall pay Lender interest at an interest rate equal to 10% per annum, on any amount past due from the date it is required to make any Assigned Payment. Such interest shall be payable with respect to the period commencing on the date such Assigned Payment is due through the date such Assigned Payment is actually made; (i) Customer shall be in default hereunder if (i) it fails to pay when due all or any portion of any Assigned Payment, and such failure is not cured within fifteen (15) days of Customer's receipt of written notice thereof from the Lender; (ii) it undertakes any general assignment for the benefit of creditors or commences any voluntary case or proceeding for relief under any bankruptcy or insolvency law including the Bankruptcy & Insolvency Act or the Companies Credit Arrangement Act, or any other law for the relief of debtors, or takes any action to authorize or implement any of the foregoing; or (iii) the filing of any petition or application by or against it under any law for the relief of debtors, including proceedings under any bankruptcy or insolvency law including the Bankruptcy & Insolvency Act or the Companies Credit Arrangement Act, or for the subjection of property of the Customer to the control of any court, receiver or agency for the benefit of creditors if such petition or application is consented to by the Customer or is otherwise not dismissed within sixty (60) days from the date of filing. In the event of such default, Lender may declare all remaining Assigned Payments (including any overdue Assigned Payments), together with any accrued interest on overdue Assigned Payments, immediately due and payable in full, without further notice, demand, or protest; (j) If the Customer terminates ESA pursuant to the provisions of the ESA, the Customer shall pay to the Lender all Assigned Payments past due and the present value of all Assigned Payments to become due, utilizing a discount rate equal to the interest rate of a Government of Canada Bond with a maturity date closest to the remaining payments due hereunder, minus fifty basis points, plus any other fees, including interest. For greater certainty, the provisions of Schedule P -1 to the ESA shall not apply to the Assigned Payments; (k) The Company acknowledges and agrees that Customer shall retain a separate and independent right to sue the Company or seek equitable remedies against the Company with respect to any claim Customer may have against the Company or in any way relating to the ESA; provided, however, any judgment, order or injunction or equitable relief granted in favor of Customer shall not abate, be set- off against, reduce or otherwise affect Customer's obligation to pay the Assigned Payments or terminate or suspend this Acknowledgement of Assignment or reduce, defer or otherwise affect any Customer's obligations hereunder to the Lender; Legal`20318374.3 -3- (1) Customer agrees that it will remain obligated under this Acknowledgement of Assignment in accordance with its terms until all Assigned Payments have been paid in full, and that it will not take any action to terminate, rescind or avoid this Acknowledgement of Assignment, notwithstanding (i) the bankruptcy, insolvency, reorganization, composition, readjustment, liquidation, dissolution, or winding up or other proceeding affecting the Company or its successors in interest or (ii) any action with respect to this Acknowledgement of Assignment or the Agreement which may be taken by any trustee or receiver of the Company or its successors in interest or by any court in any such proceeding. Once all Assigned Payments, and any accrued by unpaid late interest, have been paid in full, this Acknowledgement of Assignment shall automatically terminate; (m) Customer hereby agrees that the Assigned Payments shall, from and after the Commencement Date, be made by wire transfer of immediately available funds to the account of the Lender as the Lender shall designate by written notice to the Customer. The Customer will continue to make payments that do not form to the Assigned Payments to the Company; (n) The parties hereby agree that, notwithstanding anything to the contrary contained in the ESA, after the Commencement Date the Lender is entitled to receive all Assigned Payments pursuant to the ESA; (o) Customer hereby acknowledges and agrees that (i) it has obtained all necessary approvals to the execution of the ESA and this Acknowledgement of Assignment, (ii) that the ESA has been duly executed and delivered by proper signing authorities, and (iii) that the ESA and this Acknowledgement of Assignment constitute the legal, valid and binding obligations on the part of the Customer; (p) Customer agrees with Lender that should their financial statements not be publically available, it shall provide its annual audited financial statements to the Lender within 30 days of its fiscal year end; and (q) This Acknowledgement of Assignment may not be amended or otherwise modified except by an agreement in writing signed by duly authorized representative of the Customer and Lender. Customer Per: ( � �C,� -r -� 2. �� v 6 With Authority to Bind Da A we' red ® r Prin Name Title Per: L._ cw.. t" With Authority to Bind at Print Name 1 Title Legal *20318374.3 -4- Company \ Per: A .A_ 1 'co, With Authori y to Bind 7 Date Print Name Title Per: With Authority to Bind Date Print Name Title Lender Per: With Authority to Bind Date Print Name Title Per: With Authority to Bind Date Print Name Title Legal *20318374.3 O -1 SCHEDULE 0-1 ' STATEMENT OF CASH FLOWS The following table provides the Statement of Cash Flows that is applicable in the event ' that this Agreement is terminated and Schedule P -1 — Compensation on Termination applies: Year1 Year2 Year3 Year4 Year5 Year6 Year? Year8 Year9 Year10 Total ' Savings $131,148 $134,647 $138,244 $141,940 $145,737 $149,639 $153,649 $157,769 $162,004 $166,355 Customer $16,092 $16,521 $16,962 $17,416 $17,882 $18,361 $18,853 $19,358 $19,878 $20,412 Company $115,056 $118,126 $121,282 $124,524 $127,855 $131,278 $134,796 $138,411 $142,126 $145,943 I Legal *15988151.18 047987 -00001 O -1 SCHEDULE 0-1 ' STATEMENT OF CASH FLOWS The following table provides the Statement of Cash Flows that is applicable in the event ' that this Agreement is terminated and Schedule P -1 — Compensation on Termination applies: Year1 Year2 Year3 Year4 Year5 Year6 Year? Year8 Year9 Year10 Total ' Savings $131,148 $134,647 $138,244 $141,940 $145,737 $149,639 $153,649 $157,769 $162,004 $166,355 Customer $16,092 $16,521 $16,962 $17,416 $17,882 $18,361 $18,853 $19,358 $19,878 $20,412 Company $115,056 $118,126 $121,282 $124,524 $127,855 $131,278 $134,796 $138,411 $142,126 $145,943 I Legal *15988151.18 047987 -00001 1 P -1 -1 1 1 SCHEDULE P -1 COMPENSATION ON TERMINATION 1 1. DEFINITIONS 1.1 Definitions I (a) "Discounted Remaining Cash Flow" means the amount payable to Company as shown in the Statement of Cash Flows determined I based upon the amount of time remaining on the Term as of the date that this Agreement is terminated, which shall be discounted 1 at the interpolated rate of the two (2) closest Canada Bond 1 Benchmark Rates; plus (ii) three percent (3 %) of said amount. (b) "Compensation Payment" means the Default Termination 1 Payment or the Non - Default Termination Sum, as the case may be. (c) "Default Rate Amount" means an amount equal to simple I interest, calculated daily on the Unpaid Amount, at an annual rate equal to 2% over the Prime Rate. (d) "Default Termination Payment" has the meaning given in 1 Section 2.1(b) of this Schedule P -1. (e) "Demobilization Costs" means all reasonable costs of the I Company associated with the demobilization of the Work and /or the Services as a result of the termination of the Agreement. I (f) "Holdback" has the meaning given to such term in Section 2.1(b)(iii) of this Schedule P -1 (g) "Invoice Date" means the date that is the later of: I (h) the date on which the Customer receives an invoice from the Company for the Non - Default Termination Sum; and i 1 (i) the date on which the Customer receives the supporting evidence required pursuant to Section 4.1(a) of this Schedule P -1. 1 (j) "Non- Default Termination Sum" has the meaning given in Section 3.1(b) of this Schedule a. 1 (k) "Prime Rate Amount" means an amount equal to simple interest, calculated daily on the Unpaid Amount, at a rate of interest per annum quoted by the Royal Bank of Canada from time to time as 1 its reference rate for Canadian Dollar demand loans made to its commercial customers in Canada and which it refers to as its "prime rate ", as such rate may be changed from time to time. 1 Legal *15988151.18 047987 -00001 1 P -1 -2 1 ' (1) "Termination Date" means the date the Agreement is terminated pursuant to Sections 12.2 (a), 13.1 or 13.2 of the Agreement. (m) "Unpaid Amount" has the meaning given to such term in Section 4.1(e) of this Schedule P -1. 2. COMPENSATION ON TERMINATION FOR COMPANY DEFAULT 1 2.1 Compensation (a) If the Customer terminates the Agreement pursuant to Section 12.2(a) of the Agreement as a result of an Event of Default by the Company, the Customer shall pay the Default Termination ' Payment to the Company. (b) The "Default Termination Payment" shall be an amount equal to ' the Aggregate Company Payments, less the aggregate, without duplication, of each of the following: (i) the Customer's estimate of the cost to complete the Work and the Services, as applicable, including the cost to remedy any defective or deficient Work determined on a reasonable basis and including all reasonable and proper costs incurred by the Customer in retendering the Work and the Services or any portion thereof; (ii) the Customer's estimate of the aggregate of all Direct Losses suffered, sustained or incurred by the Customer as a result of, in respect of, or arising out of the event or events which resulted in the termination of the Agreement and out of the termination together with all costs of entering into a new contract to complete the Work and the Services, ' including any warranty obligations for the Work in place and to be performed, on substantially the same terms and conditions as the Agreement; and ' (iii) any holdback required to be maintained by the Customer as at the time the Default Termination Payment is required to be made, which amount will be paid by the Customer in accordance with the applicable lien legislation (the "Holdback "). 1 (c) To the extent that any amounts that the Customer has estimated or determined pursuant to Section 2.1(b) of this Schedule P -1, are in ' excess of what is required by the Customer to complete the Work and the Services or compensate for Direct Losses or the Holdback, as applicable, the Customer shall promptly return such excess amounts to the Company. Legal *15988151.18 047987 -00001 1 P -1 -3 1 U (d) The Customer shall pay the Default Termination Payment in accordance with Article 4 of this Schedule P -1. I 3. COMPENSATION ON NON - DEFAULT TERMINATION 3.1 Compensation I (a) After the Commencement Date, if either Party terminates the Agreement pursuant to Section 13.1 of the Agreement, if the Customer terminates the Agreement pursuant to Section 13.2 of the I Agreement, or if the Company terminates the Agreement pursuant to Section Error! Reference source not found. of the Agreement as a result of an Event of Default by the Customer, the Customer I shall, in each case, pay to the Company the Non - Default Termination Sum. I (b) The "Non- Default Termination Sum" shall be an amount equal to the aggregate, without duplication, of: I (i) all Demobilization Costs; (ii) all payments due, past due or to become due under the Acknowledgement of Assignment which amount will be 1 paid to the Lender and not form the payment to the Company; I (iii) the Discounted Remaining Cash Flow calculated as at the date of payment of the Non - Default Termination Sum to the Company; and 1 (iv) all other Direct Losses suffered, sustained or incurred by the Company as a result of, or arising out of, the event or I events which have resulted in the termination of the Agreement and out of the termination, less any Holdback required to be maintained by the Customer at the time the I Non- Default Termination Sum is required to be made. (c) To the extent that any amounts that the Customer has determined I pursuant to Section 3.1(b)(iv) of this Schedule P -1 are in excess of what is required by the Customer as a Holdback, the Customer shall promptly return such excess amounts to the Company. 1 (d) The Customer shall pay the Non - Default Termination Sum in accordance with Article 4 of this Schedule P -1. 1 1 1 Legal'15988151.18 047987 -00001 1 P -1 -4 4. GENERAL 1 4.1 Payment (a) In the event of a termination referred to in Section 3.1 3.1(a) of this ' Schedule P -1, as soon as practicable, and in any event, within thirty (30) days after the Termination Date, the Company shall give to the Customer an invoice for the Non - Default Termination Sum ' (reasonably estimated if not then known) and sufficient supporting evidence, reasonably satisfactory to the Customer, justifying the amount of the Non - Default Termination Sum, including a detailed ' breakdown of each of the individual items comprising such sum. To the extent the Non - Default Termination Sum is based on estimates of cost, the Parties will readjust as soon as such ' estimated costs can be determined. (b) The Customer shall pay to the Company the Non - Default Termination Sum within thirty (30) days after the Invoice Date and so long as all demobilization of the Work and/or the Services has been completed. (c) In the event of a termination referred to in Section 2.1(a) of this Schedule P-1, as soon as practicable, and in any event, within ' thirty (30) days after the Termination Date, the Customer shall calculate and notify the Company of the Default Termination Payment under Section 2.1(b) of this Schedule P -1, and shall ' deliver to the Company sufficient supporting evidence reasonably satisfactory to the Company. ' (d) The Customer shall pay to the Company the Default Termination Payment as soon as reasonably practicable, and in any event within thirty (30) days after delivering the notice described in Section 4.1(c) of this Schedule P -1. (e) The Customer shall indemnify the Company as provided in Section 15.2 of the Agreement in respect of damages suffered or incurred as the result of the relevant termination sum (or any part of such sum that remains outstanding) (the "Unpaid Amount ") not being received on the Termination Date: (i) in an amount equivalent to the Prime Rate Amount for the period from (but excluding) the Termination Date (and including) the date which is thirty (30) days after the invoice date; and 1 Legal'15988151.18 047987 -00001 P -1 -5 ' (ii) thereafter, in an amount equivalent to the Default Rate Amount until the date of payment. ' (f) Notwithstanding anything to the contrary contained herein, in no event will the Default Termination Payment be greater than the Non - Default Termination Sum. ' 4.2 Costs The costs and expenses to be taken into account in the calculation of the ' Non - Default Termination Sum due pursuant to this Schedule P -1 shall only be such costs and expenses that are reasonable and proper in quantum and that have been or will be reasonably and properly incurred. ' 4.3 Undisputed Amounts Either the Customer or the Company may dispute the calculation of any Compensation Payment and in the event of a dispute, any undisputed amount shall be paid in accordance with this Schedule P -1 and the ' disputed amount shall be dealt with in accordance with the Dispute Resolution Procedure. 4.4 Set -off ' The Customer shall be entitled to set off against the Non - Default Termination Sum or the Default Termination Payment, such amounts not ' already taken into account in calculating the relevant Compensation Payment that the Customer is entitled to set off or withhold pursuant to the Agreement, provided that the amount paid to the Company on account of ' the Non - Default Termination Sum shall never be less than the Debt Amount. ' 4.5 Full and Final Settlement (a) Except as otherwise provided in Section 4.5(b) of this Schedule P -1, any compensation paid pursuant to Section 2.1 or Section 3.1 of this Schedule P -1 in the total amount owing thereunder shall be in full and final settlement of any claims, demands and proceedings of the 1 Company and the Customer and each shall be released from all liability to the other in relation to any breaches or other events leading to the termination of the Agreement and the circumstances leading to such breach or termination, and the Company and the Customer shall be excluded from all other rights and remedies in respect of any such breach or termination, whether in contract, tort, restitution, statute, at common -law or otherwise. (b) Section 0 of this Schedule P -1 shall be without prejudice to any liability, whether arising before, on or after the Termination Date, of Legar15988151.18 047987 -00001 P -1 -6 ' either Party to the other, including under the indemnities contained in the Agreement that arose with respect to acts or omissions on or prior to the Termination Date (but not from termination itself or the events leading to such termination), to the extent such liability has not already been taken into account in calculating the relevant Compensation Payment pursuant to Section 4.4 of this Schedule P -1. 1 I 1 1 I Legal'15988151.18 047987 -00001 0 (D co a 3 o . O CD (D 0 1 I Ref. No. Draft CERTIFICATE OF INSURANCE I Aon Reed Stenhouse Inc. 20 Bay Street Re: Energy Performance Contracts Toronto, ON M5J 2N9 I Tel 416- 868 -5500 Fax 416- 868 -5580 The Corporation of the Municipality of Kincardine 1475 Concession 5, R.R. #5 I Kincardine, ON N2Z 2X6 Insurance as described herein has been arranged on behalf of the Insured named herein under the following policy(ies) and as more fully described by the terms, conditions, exclusions and provisions contained in the said policy(ies) and any endorsements attached thereto. I Insured RealTerm Energy Corp. 1237 de la Montagne Street I Montreal, QC H3G 1Z2 Coverage Extended EquipmentlWarranty Insurer Aviva Insurance Company of Canada I Placement Policy # TBA Effective TBA Expiry TBA I Limits of Liability Labour Costs Associated with Warranty Replacement $1,000,000 Policy may be subject to a general aggregate and other aggregates where applicable Additional Insured I Only with respect to the above and arising out of the Named Insured's operations are the following name(s) added to the policy as Additional Insured(s). The policy limits are not increased by the addition of such Additional Insured(s) and remain as stated in this Certificate. I The Corporation of the Municipality of Kincardine where required by written contract or written agreement with respect to Extended Equipment/Warranty Placement Terms and 1 or Additional Coverage I Extended Equipment/Warranty Placement Policy Includes: Labour costs associated with a replacement of luminaires as defined and covered under the Cree Warranty and Sunrise Technologies Photocell Warranty Replacement Extended Equipment/Warranty Placement Policy Limit: 85% of the annual payment obligation from the Customer to Realterm Energy Corp. but I not exceed $1,000,000 Extended Equipment/Warranty Placement Policy Deductible: 15% of the annual payment obligation from the Customer to Realterm Energy Corp. I Primary Non - Contributory Clause: The insurance evidenced herein is primary only with respect to those occurrences for which the insured may be negligent or may be held liable, specifically arising out of the operations of the insured Cancellation / Termination I The Insurer will endeavour to provide THIRTY (30) days written notice of cancellation /termination to the addressee except that statutory or policy conditions (whichever prevails) will apply for non - payment of premium. 1 I THIS POLICY CONTAINS A CLAUSE(S) WHICH MAY LIMIT THE AMOUNT PAYABLE OR, IN THE CASE OF AUTOMOBILE INSURANCE, 1 THE POLICY CONTAINS A PARTIAL PAYMENT OF LOSS CLAUSE AON 1 1 Ref. No. Draft CERTIFICATE OF INSURANCE THIS CERTIFICATE CONSTITUTES A STATEMENT OF THE FACTS AS OF THE DATE OF ISSUANCE AND ARE SO REPRESENTED AND WARRANTED ONLY TO CERTIFICATE HOLDER; OTHER PERSONS RELYING ON THIS MEMORANDUM DO SO AT THEIR ' OWN RISK. Aon Reed Stenhouse Inc. Dated: 04- September -2015 Issued By: Fernandes, Tracy Tel: 416. 868.5550 1 1 1 1 1 1 1 1 1 1 THIS POLICY CONTAINS A CLAUSE(S) WHICH MAY LIMIT THE AMOUNT PAYABLE OR, IN THE CASE OF AUTOMOBILE INSURANCE, 1 THE POLICY CONTAINS A PARTIAL PAYMENT OF LOSS CLAUSE AON 1 m n 0 0 3 cn 1 I Economic Analysis - The Municipality of Kincardine Y P Y 1 Expected annual streetlight maintenance costs 1 While these solid state fixtures are designed to be maintenance free for the life of the luminaire (20+ years), technical faults do occur on a very minor level. Similarly, the photocells also have a design life in excess of 20 years, but occasionally need to be replaced. I In the case of the luminaires, the parts are warranted for 10 years (the entire duration of the ESA contract), while the photocells are warranted for 12 years. In either case, the only cost I associated with a failure from either the luminaire or the photocell is the labour cost to replace the defective part with a new one. The cost of both the defective fixture or the defective photocell is covered under warranty. 1 With respect to The Municipality of Kincardine, we have data from both Cree and Sun -Tech on the reported failure rates of the fixtures and the photocells, respectively and can project 1 the number of expected annual events that would require a bucket truck to be dispatched to rectify the problem, and the associated cost (labour only). I Number of new LED fixtures with Photocells 1,151 Expected annual failure rate (combined fixture /photocell) 0.6% Expected maintenance events /year 7 event Cost per visit (labour only) $400 1 Expected Annual Maintenance Costs $2,800 1 Under the terms of the ESA, RealTerm Energy's share of the annual energy and maintenance savings is as shown below. Under the Amended Agreement, the Contract Performance Portion of the monthly payments (15% of the total) are more than sufficient to cover any expected maintenance. I RealTerm Annual Share of Savings $115,056 RealTerm Performance portion (15 %) as per ESA Contract $17,258 I Less: Expected Annual Maintenance Costs $2,800 Excess Margin $14,458 Coverage Multiple (Margin /Expected Maintenance) 6X I Should the Company default on its obligations to provide repair services, the Customer would be entitled to hold backup to the full amount of the 15% Performance Portion, which is many 1 times what the expected amount of default would likely be. In any case, this is a moot point with the Company undertaking to provide a 10 -Year 1 Performance Insurance policy as proposed in the amendment. 1 1 1 Certificate of Acceptance 1 SCHEDULE C2 1 CERTIFICATE OF ACCEPTANCE This Certificate of Acceptance (the "Certificate ") is provided in accordance with the Energy 1 Services Agreement (the "Agreement ") between The Corporation of the Town of Kincardine ( "Customer ") and RealTerm Energy Corp. ("Company") and dated October 15, 2014. Capitalized terms used in this Certificate and not otherwise defined herein have the meanings Carta g P 1 s ecified in the Agreement. p g In accordance with Section 5.4(e) of the Agreement, the Company hereby certifies that: (a) the Company's performance of the entire scope of the Work is complete, in accordance with the Project Documents; (b) the start-up and commissioning of the Work, in accordance with Section 5.3 of the 1 Agreement, is complete; (c) the Customer can utilize the installed ECEs for their intended use; 1 (d) the Company has either: (i) delivered to the Customer, lien waivers, sworn statements, guarantees, full releases, discharges or other evidence reasonably 1 satisfactory to the Customer that there are no liens, claims, or notices in respect thereof pending, filed, or threatened against the Customer, the Company, the Existing Assets whatsoever in respect of the Work; or (ii) in the case that a subcontractor 1 refuses to furnish a release, discharge or receipt in full, furnished a bond satisfactory to the Customer to indemnify the Customer against any such lien; and (e) the Company has delivered any certificates of inspection or approval in respect of the Work to the extent required under Applicable Law from any Govermnental Authority. 1 5 Executed this l day of 0 G{'d b G r , 2015. 1 REALTERM ENERGY CORP. By: IC . T. Name: Sean Neely Title: President 1 1 1 Acceptance 1 In accordance with Section 5.4(e) of the Agreement, the Customer hereby indicates its acceptance of this Certificate of Acceptance. THE MUNICIPALITY OF KINCARDINE 1 By: 1 L Name: (Th'1ucia. C. Q( C Title: CAC 1 m 2 ►ter dad iL ra 1 1 1 1 1 1 1 1 1