Template:Nutshell EUA Annex (d)(xi)

(d)(xi) Failure to Deliver (Alternative Method) - EEP Applicable

If “Failure to Deliver (Alternative Method)” and “EEP” applies and Delivering Party’s failure causes Receiving Party to incur an Excess Emissions Penalty other than where Receiving Party did not comply with the Requirements under the Scheme, there was an Illegality, Settlement Disruption Event or a Suspension Event (the “EEP Non-delivery” and such EEP the “Indemnifiable EEP”), then Delivering Party must pay, in addition to the Receiving Party’s Replacement Cost, the Indemnifiable EEP (the “EEP Payment”), provided that sit does not exceed the product of the RPRC Shortfall for that EU Emissions Allowance Transaction and the maximum prevailing per-Allowance rate of Excess Emissions Penalty.

Delivering Party’s obligation to pay the EEP Payment is conditional up Receiving Party demonstrating to its reasonable satisfaction:

(a) that Receiving Party has incurred and paid the EEP Payment consequent on a shortfall of Allowances as at the Reconciliation Deadline immediately succeeding the Delivery Date (the “Deadline Shortfall”);

(b) the extent to which Receiving Party’s liability to make the EEP Payment:

(i) resulted from Delivering Party’s EEP Non-delivery;

(ii) would have been incurred notwithstanding Delivering Party’s EEP Non-delivery; and

(iii) arose due to any third party’s failures to deliver any Allowance to be Delivered to Receiving Party under any agreements between Receiving Party and such third party.

Receiving Party must provide all other information to Delivering Party in order for Delivering Party to make a commercially reasonable assessment of how far the Deadline Shortfall was directly caused by its EEP Non-delivery.

If a number of parties’ failures (including Delivering Party and Receiving Party) directly caused the Deadline Shortfall, then Delivering Party must pay its proportionate share of the EEP Payment as determined by the parties in a commercially reasonable manner. Receiving Party may not claim any part of an EEP Payment from Delivering Party such that its aggregate of claims against third parties relating to the EEP Payment exceeds its own liability to make the EEP Payment.

Delivering Party may in good faith dispute any payment by notice to Receiving Party stating its reasons for the dispute. Pending resolution (which the parties must endeavour to resolve as soon as reasonably possible) the EEP Payment obligation will be suspended.

Once agreed, Delivering Party must pay the EEP Payment within two Business Days against Receiving Party’s VAT Invoice.