ENERGY SAVINGS GUARANTEE; SURETY BOND

The ESPC will include a Schedule that will fully describe all provisions and conditions of the energy saving guarantee provided by the ESCO. The guarantee will be defined in units of energy to be saved for the duration of the contract term. Reference to the annual reconciliation of achieved VS. guaranteed savings will be included. As a condition for granting an ESPC and in order to ensure compliance with savings guarantees set forth in the ESPC, the ESCO shall provide a Surety Bond in favor of the Government Unit and SOEP. The Surety Bond's face value shall be equivalent to the total estimated savings, in US dollars, achieved by the Government Unit as a result of the Conservation Measures implemented through the ESPC for each year of the Contract Term. The Surety Bond shall guarantee the estimated cost savings for each year of the Contract Term. The bond shall be renewed on a yearly basis no later than fifteen days before the beginning of each contract year. The Surety Bond may be provided through one of the following mechanisms: a. Payment to the Government Unit of the bond amount for the specific year by certified check, cash or electronic transfer. In such cases, the bond amount shall be deposited in an escrow account and any withdrawal or disbursement of funds shall be subject to a bond agreement to be executed bewteen the Government Unit and the ESCO. b. Bond certificate issued by an insurer duly authorized to do insurance business in the Commonwealth of Puerto Rico by the Puerto Rico Insurance Commissioner with, at least, a financial strength rating of A- and financial size category of V by AM Best.