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value of these transformers for purposes of this Agreement is $125,800.00. Such transformers must <br />meet SMEU specifications and design guidelines. When such transformers are upgraded to 2,500 <br />kVA transformers procured by the City, the City will apply a credit against the balance of the cost <br />of the new transformers due from UMC equal to the depreciated value of the 2,000 kVA <br />transformers as of the date the 2,500 kVA transformers are placed in service. The depreciated <br />value of the 2,000 kVA transformers will be calculated using the straight line depreciation method <br />assuming a 25 year life expectancy for the 2,000 kVA transformers starting as of the date they are <br />placed in service. <br />Section 5.03. Incentive Repayment. UMC acknowledges that the City's agreement to <br />cost participate in the construction of the Electric Service is an incentive that is based upon UMC's <br />estimate of the electric power usage for operation of the Business on Parcel 4 of Exhibit A and the <br />resulting revenue to be received by the City over the five year Term of this Agreement based on <br />the current Large General Service -Secondary electric rate. UMC shall make an Incentive <br />Repayment to City in the amount of $641,422.31 if UMC fails to use at least 152,424,000 kWh of <br />electric power during the five year Term of this Agreement or fails to maintain an annual average <br />Power Factor of at least 97 percent, leading or lagging, during any calendar year within the Term. <br />The Incentive Repayment shall be made by UMC within 30 days of the City's notification to UMC <br />that the payment is due. UMC's failure to make the Incentive Repayment when due shall constitute <br />an event of default under this Agreement and a cross -default under the Chapter 380 Agreement <br />that entitles City to exercise the same rights and remedies for default under Article X of the Chapter <br />380 Agreement. In addition, the City may deduct the unpaid amount of the Incentive Payment <br />from one or more Grant Payments as defined in the Chapter 380 Agreement as provided in Article <br />X thereof until paid in full. Notwithstanding any remedies for default under the Chapter 380 <br />