Template:IETA Master Agreement Schedule 1

SCHEDULE 1 DEFINITIONS

“Account Pair” means a pair of Holding Accounts identified by the Parties in the relevant Schedule or in a Confirmation with respect to which physical netting of deliveries pursuant to Clause 9.7 (Physical Netting of Deliveries) may be affected.
“Administrator Event” means the suspension of some or all of the processes of a Registry or the EUTL in accordance with the Registries Regulation by the National Administrator or the Central Administrator (as applicable) due to:

(a) a security breach or following reasonable suspicion of a breach of security which threatens the integrity of the registries system (including any back up facilities); or

(b) scheduled or emergency maintenance on the Registry; or

(c) the failure to operate and maintain the Registry in accordance with the Registries Regulation or any other applicable law.

“Affected Allowance” means an Allowance which is or is alleged to have been the subject of an Unauthorised Transfer as confirmed by an Appropriate Source.
“Affected Party” has the meaning given to it in Clause 14.7 (Illegality).
“Affected Tax Party” has the meaning given to it in Clause 14.9 (Change in Taxes).
“Affiliate” means, with respect to any Entity, any other Entity that directly or indirectly through one or more intermediaries controls or is controlled by or is under common control with the Entity. The terms “controls”, “controlled by” and “under common control with” mean the possession, directly or indirectly through one or more intermediaries, of more than fifty per cent (50%) of the outstanding voting stock of, or the power to direct or cause the direction of the management policies of, any Entity, whether through ownership of stock, as a general partner or trustee, by contract or otherwise.
“Aircraft Operator” means an “aircraft operator” as defined in the Directive.
“Allowance” means any one or more of an AEUA or EUA.
“Allowance Price” means, for a particular PTA Quantity, Specified Period and Transaction, the amount agreed to be the price for that PTA Quantity (expressed in Euros per Allowance unless otherwise agreed), excluding applicable taxes.
“Allowance Type” means the type of Allowance specified in the Confirmation as that which the Parties wish to trade for the purposes of the relevant Transaction.
“American Option” means a style of Option that may be exercised at any point during an Exercise Period that consists of more than one day.
“Appropriate Source” means any “competent authority”, “registry administrator” and/or the Central Administrator (as those terms are defined in the Registries Regulation), or any other authority having power pursuant to the Directive and/or the Registries Regulation to block, suspend, refuse, reject, cancel or otherwise affect the Transfer (whether in whole or in part) of Allowances, any recognised law enforcement or tax authorities of a Member State, European Anti-fraud Office of the European Commission or Europol.
“Automatic Exercise” has the meaning given to it in Clause 7.5 (Option Transactions).
“Aviation EU Allowance” or “AEUA” means a unit of account that is an “allowance” as defined in the Directive and is issued pursuant to Chapter II thereof.
“Banking Day” means, in relation to a Transaction, any day (other than a Saturday or Sunday) on which commercial banks are open for general business in, if not otherwise specified in Schedule 2 (Elections) or the Confirmation to a Transaction, the places in which both Parties have their registered offices.
“Base Rate” is EURIBOR, unless otherwise specified by the Parties in the Confirmation.
“Bermudan Option” means a style of Option that may be exercised on certain days during an Exercise Period that consists of more than one day.
“Buyer” means the Party specified as such for the purposes of an Option Transaction in the relevant Confirmation.
“Buy-In” means the purchase of Allowances by the Receiving Party in accordance with the procedures described in the definition of Receiving Party’s Replacement Cost.
“Buy-In Period” has the meaning given to it in paragraph (a)(i) of the definition of Receiving Party’s Replacement Cost.
“Call Option” means an Option Transaction entitling (but not obliging) the Buyer upon exercise to purchase Allowances from the Seller at the Strike Price per Allowance.
“Central Administrator” means the Relevant Authority designated to maintain the EUTL pursuant to Article 20(1) of the Directive.
“Central European Time” means Central European Time and shall include Central European Winter Time and Central European Summer Time, as applicable.
“Change in Tax Law” means the enactment, promulgation, execution or ratification of, or any change in or amendment to, any law (or in the application or official interpretation of any law) affecting the tax treatment accorded to the Transfer of Allowances that occurs on or after the date on which the relevant Transaction is entered into.
“Confidential Information” has the meaning given to it in Clause 15 (Confidentiality).
“Confirmation” means a completed written confirmation substantially in the form set out in Schedule 3A (Form of Confirmation for Spot/ForwardTransactions) or 3B (Form of Confirmation for Option Transactions), as applicable or in a form otherwise agreed between the Parties.
“Contract Amount” means, for each Transaction, the amount (expressed in Euros unless otherwise agreed) calculated by multiplying the Allowance Price by the PTA Quantity for that Transaction.
“Contract Value” means, for any Undelivered Allowances, the amount (expressed in Euros unless otherwise agreed) calculated by multiplying the Allowance Price by the number of Undelivered Allowances.
“Control and Profit Transfer Agreement” means, unless otherwise specified in Schedule 2 (Elections), an agreement in form and substance satisfactory to one of the Parties executed by the other Party’s Controlling Party with respect to the maintenance of control of that other Party by the Controlling Party and of the capitalization, the creditworthiness and the ability to perform obligations under this Agreement of the other Party.
“Controlling Party” means, where “Controlling Party” is specified in Schedule 2 (Elections) as applying to a Party, the Entity named as the Controlling Party with respect to that Party (being the Entity who is a party to a Control and Profit Transfer Agreement with that Party and where that Party is, in relation to such Entity, its subsidiary over which such Entity has control).
“Cost of Carry Amount” means the amount calculated by applying the Cost of Carry Rate for the Cost of Carry Calculation Period to the Allowance Price multiplied by the number of Period Traded Allowances Transferred, divided by 360.
“Cost of Carry Calculation Period” means the number of calendar days from and including the original Payment Due Date to, but excluding, the Delayed Payment Due Date.
“Cost of Carry Rate” the “EUR-EONIA-OIS-COMPOUND” rate, “EONIA” being a reference rate equal to the overnight rate as calculated by the European Central Bank and appearing on Reuters Screen EONIA Page in respect of each day in the Cost of Carry Calculation Period.
“Credit Rating” means in respect of an Entity any of the following: (i) the long-term unsecured, unsubordinated (unsupported by third party credit enhancement) public debt rating; (ii) the debt issuer’s credit rating; or (iii) the corporate credit rating given to that person, in each of cases (i) to (iii) by Standard & Poor’s Rating Services (a division of the McGraw-Hill Companies Inc.) or Moody’s Investors Services Inc. or Fitch, Inc. or any successor to the rating business of any of the foregoing.
“Credit Support Document” means, for a Party, any agreement or instrument that is specified as such in Schedule 2 (Elections) in relation to that Party.
“Credit Support Provider” has the meaning given to it in Schedule 2 (Elections).
“Cross default threshold” means, for a party, the amount specified in Schedule 2 (Elections) in the Termination Currency.
“Default Quantity” means, in respect of a Transaction, the quantity equal to the difference between:
(a) the PTA Quantity; and
(b) the quantity of Period Traded Allowances duly and timely Transferred or accepted, as relevant.
“Defaulting Party” has the meaning given to it in Clause 14.2 (Events of Default).
“Delayed Delivery Date” has the meaning given to it in Clause 13.4(a) (Suspension Event).
“Delayed Payment Due Date” has the meaning given to it in the definition of Payment Due Date.
“Delivered Allowance Volume” means the aggregate number of Delivered Allowances and Physically Netted Allowances.
“Delivered Allowances” means Period Traded Allowances actually Transferred by (or at the request of) the Delivering Party to the relevant Receiving Party’s Holding Account.
“Delivering Party” means in respect of a Transaction that is:

(A) not an Option Transaction, the Seller;

(B) an Option Transaction which is a Call Option, the Seller; or

(C) an Option Transaction which is a Put Option, the Buyer.

“Delivering Party’s Delivery Banking Day Location” means, in relation to a Transaction, the place specified as such in the Confirmation for the relevant Transaction, or, if a place is not so specified: (i) the place specified as such in Schedule 2 (Elections); or (ii) if no such place is specified, the place in which the Delivering Party’s address for the purposes of receiving notices connected with the relevant Transaction is located; or (iii) if no such address is given, the place in which the Delivering Party has its registered office.
“Delivering Party’s Holding Account” means the Holding Account(s), if any, specified by the Delivering Party in the Confirmation to a Transaction (including any additional account specified by the Delivering Party in accordance with Clause 6.5 (Effecting Transfers)). Where the Delivering Party has specified a Registry only without specifying the Holding Account details in the Confirmation, “Delivering Party’s Holding Account” includes any Holding Account notified by the Delivering Party to the Receiving Party under Clause 6.6 (Effecting Transfers).
“Delivering Party’s Replacement Cost” means in respect of a failure to accept (or secure acceptance of) a Transfer of a number of Allowances pursuant to Clause 12.2 (Failure to Accept) the positive difference if any between (i) the Allowance Price multiplied by the Default Quantity, and (ii) the price the Delivering Party, acting in a commercially reasonable manner, does or would receive in an arm’s length transaction for an equivalent quantity and Validity Period of Allowances to replace the Default Quantity; plus
(a) interest on the amount calculated in accordance with paragraph (a) above for the period from (and including) the Delivery Date to (but excluding) the date of termination at the rate specified in Clause 9.5(a) (Interest); plus
(b) the amount of such reasonable costs and expenses which the Delivering Party incurs in respect of the Default Quantity (including, without limitation, broker fees, commissions and legal fees).
“Delivery Banking Day” shall have the same meaning given to Banking Day unless otherwise specified in the Confirmation to a Transaction.
“Delivery Date” means, in relation to a Transaction, and subject to adjustment in accordance with Clause 13.4 (Suspension Event), the Delivery Banking Day agreed between the Parties as the delivery date (that is to say, the date by which the relevant Transfer is to be completed) at the time of entering into the Transaction.
“Directive” means Directive 2003/87/EC of the European Parliament and of the Council of 13 October 2003 establishing a scheme for greenhouse gas emissions allowance trading and amending Council Directive 96/61/EC, and as may be amended from time to time, including by Directive (EU) 2018/410.
“Early Termination Date” has the meaning given to it in Clause 14.1 (Termination Rights).
“EEP Amount” means an amount (expressed as an amount per Allowance) that the Receiving Party determines, acting in good faith and using commercially reasonable procedures, to be its total losses and costs which result from the Delivering Party’s failure to deliver the Shortfall to the extent that those losses and costs are not reflected elsewhere in the definition of Receiving Party’s Replacement Cost and to the extent that they relate to:

(a) any Excess Emissions Penalty which the Receiving Party must pay to a Relevant Authority in accordance with the terms of the Scheme; or

(b) if this sub-paragraph (b) is specified in Schedule 2 (Elections) as applying, any amount which the Receiving Party must pay to a third party in respect of any such penalty payable to any other party (including a Relevant Authority) by that third party as a result of the Delivering Party’s failure to deliver the Shortfall.

“EEP Status” means whether or not the Parties have elected in Schedule 2 (‘‘Elections’’) (or the Confirmation for the relevant Transaction) that Excess Emissions Penalty applies to the relevant Period Traded Allowances.
“Encumbrance Loss” means an amount reasonably determined by the Receiving Party in good faith to be its total losses and costs in connection with a Transaction including, but not limited to, any loss of bargain, cost of funding or, at the election of the Receiving Party but without duplication, loss or costs incurred as a result of its terminating, liquidating, obtaining or re-establishing any hedge or related trading position. Such amount includes losses and costs in respect of any payment already made under a Transaction prior to the delivery of the written notice by the Receiving Party and the Receiving Party’s legal fees and out-of-pocket expenses.
“Entity” means an individual, government or state or division of it, government or state agency, corporation, partnership or such other entity as the context may require.
“EU Allowance” or “EUA” means a unit of account that is an “allowance” as defined in the Directive and issued pursuant to Chapter III thereof.
“EU ETS Rules” means the rules and regulations, as amended from time to time, of participation in and operation of, the EU ETS as applicable in a Member State and certain non-Member States with whom a Participation Agreement has been signed.
“EU ETS” means the EU Emission Trading System established by the Directive.
“EU” means the European Union as it exists from time to time.
“EURIBOR” means, in relation to an amount owed under this Agreement on which interest is to accrue in Euros:

(a) the interest rate for Euro deposits for a period of one month that appears on Reuters Page EURIBOR01 (or such other screen display or service as may replace it for the purpose of displaying the interest rates for Euro deposits offered in the euro-zone) as at 11:00 hours on the Payment Due Date, and where the amount or any part of it remains overdue one month after the Payment Due Date such interest rate as appears on such page for such deposits as at such time as at the day one month after the Payment Due Date and thereafter as at monthly intervals until the amount is no longer overdue; or

(b) if no such interest rate appears on Reuters (or such replacement), the arithmetic mean (rounded upwards to 3 decimal places) of the rates per annum at which each of not less than two major banks in the Euro-zone interbank market quoted that they were offering (Euro deposits/deposits) in an amount comparable with that overdue amount to major banks in the Euro-zone interbank market for a period of one month as at 11:00 hours on the Payment Due Date or as at the day one month after the Payment Due Date or as at monthly intervals thereafter as the case may be.

“Euro” means the lawful currency of the member states of the European Union that adopt the single currency in accordance with the Treaty establishing the European Community, as amended by the Treaty on European Union.
“European Option” means a style of Option that may be exercised only during an Exercise Period that consists of one day.
“EUTL” or “European Union Transaction Log” means the independent transaction log provided for in Article 20(1) of the Directive, the operation of which is further detailed in the Registries Regulation.
“Event of Default” has the meaning given to it in Clause 14.2 (Events of Default).
“Excess Emissions Penalty” has the meaning given to it in the Directive.
“Exercise Period” means:

(A) in respect of an American Option, the period from and including 10:00 hours to and including 16:00 hours (or, in the case of the Expiration Date, to and including the Expiration Time) on all Banking Days from and including the Trade Date to and including the Expiration Date;

(B) in respect of a Bermudan Option, the period from and including 09:00 hours to and including 16:00 hours on any Potential Exercise Day (or, in the case of the Expiration Date, to and including the Expiration Time); and

(C) in respect of a European Option, the period from and including 09:00 hours on the Expiration Date to and including the relevant Expiration Time.

“Expert” has the meaning given to it in Clause 18.9(a) (Expert Determination).
“Expiration Date” means the date on which an Option expires, as specified in the Confirmation.
“Expiration Time” means the time on an Expiration Date at which the Option expires, as specified in the Confirmation.
“Final Delivery Date” means the date that is two (2) Delivery Banking Days after receipt of a notice given under Clause 12.1 (Failure to Transfer) or Clause 12.2 (Failure to Accept).
“FM Affected Party” has the meaning given to it in Clause 13.1 (Force Majeure).
“FM Affected Transaction” has the meaning given to it in Clause 13.1 (Force Majeure).
“Fourth Validity Period” means, in respect of EUAs and AEUAs, the period starting 1 January 2021 to 31 December 2030. [Not used]
“Force Majeure” means the occurrence of any event or circumstance, beyond the control of the FM Affected Party, that is not a Suspension Event, and that could not, after using all reasonable efforts, be overcome and which makes it impossible for the FM Affected Party to either (a) deliver the Period Traded Allowances from any Holding Account in any Registry (or if one or more Delivering Party's Holding Accounts are specified, from such Delivering Party's Holding Account(s)) or (b) accept the Period Traded Allowances into the Receiving Party's Holding Account(s), in accordance with the EU ETS. The inability of a Party to perform a relevant delivery or acceptance obligation as a result of it having insufficient Period Traded Allowances in the relevant Holding Account (whether caused by: the low or non-allocation of Allowances from a Member State, non-Member State or Central Administrator; the delay or failure of a Member State or Central Administrator to replace Allowances with Allowances for the subsequent Validity Period; or the failure of that Party to procure sufficient Allowances to meet its delivery obligations) shall not constitute a Force Majeure; provided, however, that this is not an exhaustive list of events which will not constitute a Force Majeure and is provided for the avoidance of doubt only.
“GHG Reductions” means the removal, limitation, reduction, avoidance, sequestration or mitigation of GHGs’ emissions relative to the scenario that reasonably represents the anthropogenic emissions by sources or anthropogenic removal by sinks of GHG in the absence of such removal, limitation, reduction, avoidance, sequestration or mitigation. [Not Used]
“GHG” means any of the gases listed in Annex II of the Directive and such other gases as may be included in the Directive from time to time.
“Holding Account” means any digital record of a party or person in any relevant Registry as may be specified in the Confirmation to a Transaction, that will be used to record the issue (if applicable), holding, transfer, acquisition, surrender, cancellation, and replacement of Allowances.
“Illegality Affected Transactions” has the meaning given to it in Clause 14.7 (Illegality).
“Illegality Affected Party” has the meaning given to it in Clause 14.6 (Termination Payments).
“Illegality” has the meaning given to it in Clause 14.7 (Illegality).
“Indebtedness” means any obligation (whether present or future, contingent or otherwise, as principal or surety or otherwise) in respect of borrowed money.
“Letter of Credit” means an irrevocable standby letter of credit payable on demand in a form and substance satisfactory to the Requesting Party and issued or confirmed by a financial institution whose credit rating is at least Standard & Poor’s Rating Services (a division of the McGraw-Hill Companies Inc.) “A-”, Moody’s Investors Services Inc. equivalent, or Fitch, Inc. equivalent.
“Long Stop Date” means, in respect of a Suspension Event that occurs with respect to a Transfer or acceptance obligation that would otherwise be required to be performed within the period:

(a) from (and including) 1 May 2021 to (and including) 31 December 2022: 1 June 2024;

(b) from (and including) 1 January 2023 to (and including) 31 December 2024: 1 June 2026;

(c) from (and including) 1 January 2025 to (and including) 31 December 2026: 1 June 2028;

(d) from (and including) 1 January 2027 to (and including) 31 December 2028: 1 June 2030; and

(e) from (and including) 1 January 2029 to (and including) the twenty-fifth (25th) calendar day of the month in which the Validity Period Reconciliation Deadline is scheduled to occur: the twenty-fifth (25th) calendar day of the month in which the Validity Period Reconciliation Deadline is scheduled to occur.

“Loss” means:

(a) for the purposes of Clause 13.2(c) (Two-way Loss Termination Payment), an amount that each Party reasonably determines in good faith to be its total losses and costs (or gain, in which case expressed as a negative number) in connection with the termination of the FM Affected Transaction(s) or any uncompleted portions of them, including any EEP Amount (if applicable, in which case Clauses 12.1(b)(ii) through 12.1(b)(iv) (Failure to Transfer) shall apply equally to the determination of such amount), any loss of bargain, cost of funding (based on the actual costs of such Party whether or not greater than market costs) or, without duplication, loss or cost incurred as a result of its terminating, liquidating, obtaining or re-establishing any related trading position (or any gain resulting from any of them). Loss does not include legal fees or out-of-pocket expenses. Each Party may (but need not) determine its Loss by reference to quotations of average relevant rates or prices from two or more leading brokers in the Allowances trading market who are independent of the Parties; or

(b) for the purposes of Clause 14.6 (Termination Payments), an amount that the Non-Defaulting Party reasonably determines in good faith to be its total losses and costs (or gain, in which case expressed as a negative number) in connection with the termination of all Transactions or any uncompleted portions of them, including any EEP Amount, if applicable, in which case Clauses 12.1(b)(ii) through 12.1(b)(iv) (Failure to Transfer) shall apply equally to the determination of such amount), any loss of bargain, cost of funding (based on the actual costs of the Non-Defaulting Party whether or not greater than market costs) or, at the election of the Non-Defaulting Party but without duplication, loss or cost incurred as a result of its terminating, liquidating, obtaining or re-establishing any related trading position (or any gain resulting from any of them). Loss includes losses and costs (or gains) in respect of any payment required to have been made which has not been made or non-compliance with Clauses 5 (Allowance Transfers) or 6 (Effecting Transfers) (whether or not as a result of the suspension of the obligation to pay or comply with those sub-clauses under Clauses 14.3 (Suspension following Event of Default) or 14.5 (Early Termination Date)) on or before the Early Termination Date. Loss does not include the Non-Defaulting Party’s legal fees or out-of-pocket expenses. The Non-Defaulting Party may (but need not) determine its Loss by reference to quotations of average relevant rates or prices from two or more leading brokers in the Allowances trading market who are independent of the Parties; or

(c) for the purposes of Clause 14.7 (Illegality):

(i) if there is only one Illegality Affected Party, as per the definition for the purposes of Clause 14.6 (Termination Payments) as set forth above; or

(ii) if both Parties are Illegality Affected Parties, an amount that each Party reasonably determines in good faith to be its total losses and costs (or gain, in which case expressed as a negative number) in connection with the termination of the Illegality Affected Transaction(s) or any uncompleted portions of them, including any EEP Amount (if applicable, in which case Clauses 12.1(b)(ii) through 12.1(b)(iv) (Failure to Transfer) shall apply equally to the determination of such amount), any loss of bargain, cost of funding (based on the actual costs of such Party whether or not greater than market costs) or, without duplication, loss or cost incurred as a result of its terminating, liquidating, obtaining or re-establishing any related trading position (or any gain resulting from any of them). Loss does not include legal fees or out-of-pocket expenses. Each Party may (but need not) determine its Loss by reference to quotations of average relevant rates or prices from two or more leading brokers in the Allowances trading market who are independent of the Parties.

“Market Amount” means the sum (whether positive or negative) of (i) the Market Quotation for the Transactions if a Market Quotation is determined and (ii) losses and costs (or gains) in respect of any payment required to have been made and not made or non-compliance with Clauses 5 (Allowance Transfers) or 6 (Effecting Transfers) on or before the Early Termination Date or as a result of suspension under Clause 14.3 (Suspension following Event of Default); or, for the purposes of Clause 14.6 (Termination Payments), the Non-Defaulting Party’s Loss (whether positive or negative) for the Transactions if a Market Quotation cannot be determined or would not (in the reasonable belief of the Non-Defaulting Party) produce a commercially reasonable result.
“Market Quotation” means, with respect to the Non-Defaulting Party, an amount determined on the basis of the average of quotations from Reference Market Makers. Each quotation will be for an amount, if any, that would be paid to the Non-Defaulting Party (expressed as a negative number) or by the Non-Defaulting Party (expressed as a positive number) in consideration of an agreement between the Non-Defaulting Party and the quoting Reference Market Maker to enter into Replacement Transactions for the same amount of Period Traded Allowances having the same EEP Status. The quotation shall (i) take into account any existing Credit Support Document with respect to the obligations of the Non-Defaulting Party but (ii) disregard any losses, costs (or gains) in respect of any payment required to have been made and not made or non-compliance with Clauses 5 (Allowance Transfers) or 6 (Effecting Transfers) on or before the Early Termination Date.
“Agreement” has the meaning ascribed to it in Clause 1.2 (Subject of Agreement).
“Material Adverse Change” has the meaning given to it in Clause 14.2(h) (Material Adverse Change).
“Member State” means any one of the Member States of the European Union from time to time.
“Member State Registry” means the Registry established for each Member State pursuant to the Directive and the Registries Regulation. [used once]

“Monthly Billing Cycle” means that payments fall due in accordance with the first elective in item 9.1 of Part 1 of Schedule 2 (Elections).
“National Administrator” means the entity responsible for managing, on behalf of a Member State, a set of user accounts under the jurisdiction of a Member State in the Union Registry as designated in accordance with Article 8 of the Registries Regulation.
“No Encumbrances Obligation” has the meaning given to it in Clause 5.3 (No Encumbrances).
“Non-Defaulting Party” means the Party that is not the Defaulting Party.
“Operator” means an “operator” as defined in the Directive.
“Option Transaction” means a Transaction relating to an Option that is identified as an Option Transaction under this Agreement in the relevant Confirmation.
“Option” means a right but not an obligation to [enter into a Transaction/ buy or sell Allowances], which is granted to a Buyer by way of an Option Transaction in consideration of the payment of a Premium to the Seller, which Option may be an American Option, a Bermudan Option, or a European Option.
“Original Affected Party” means the person from whose Holding Account the Unauthorised Transfer of the relevant Affected Allowance occurred.
“Participation Agreement” means any argument, rule, procedure, instrument or other law or regulation which governs a non-Member State’s participation in and the Transfer of Allowances between the EU ETS and any similar system of the non-Member State.
“Party” means one or other of the parties to this Agreement and “Parties” is to be construed accordingly.
“Payment Due Date” means either the date specified in the Confirmation or, if none is so specified, the relevant elective specified in Schedule 2 (Elections) and, if no election is made there, the fifth (5th) Banking Day after the later of (a) the Delivery Date and (b) the date on which the Statementis delivered to the Receiving Party in accordance with Clause 9.2 (Statement), subject to the provisions of Clause 12 (Transfer or Acceptance Failure) and Clause 13.4 (Suspension Event) in which case the Payment Due Date shall be measured accordingly from the Delayed Delivery Date (such Payment Due Date being the “Delayed Payment Due Date”).
“Performance Assurance Provider” means, as the context requires, any Entity that provides Performance Assurance on behalf of one of the Parties.
“Performance Assurance” means a Letter of Credit, cash or other security in form and amount reasonably satisfactory to the Requesting Party.
“Period Traded Allowance” means, in relation to a Transaction, an Allowance that is of the Specified Period specified in the relevant Confirmation. “Physically Netted Allowances” means those Period Traded Allowances which were not actually Transferred to the relevant Receiving Party’s Holding Account as a result of the operation of Clause 9.7 (Physical Netting of Deliveries).
“Positive Mark to Market Amount” has the meaning given to it in Clause 7.6 (Option Transactions).
“Potential Exercise Day” means, in respect of a Bermudan Option, each day that the Parties agree, as specified in the Confirmation, to be a day on which the Buyer may exercise the Option, each such date if not a Banking Day, the next following day that is a Banking Day, and the Expiration Date.
“Premium” means the price (if any) to be paid by the Buyer in respect of the Option Transaction, as specified in the Confirmation, exclusive of VAT and other applicable taxes.
“Premium Payment Date” means the date specified in the Confirmation to a Transaction or, if none is so specified, five (5) Banking Days after the Trade Date.
“PTA Quantity” means, in relation to a Transaction and a Specified Period, the number of Period Traded Allowances that the Parties have agreed to Transfer and accept for that Transaction as specified in the relevant Confirmation.
“Put Option” means an Option Transaction entitling (but not obliging) the Buyer upon exercise to sell Allowances to the Seller at the Strike Price per Allowance.
“Receiving Party” means in respect of a Transaction that is (a) not an Option Transaction, the Buyer; (b) an Option Transaction which is a Call Option, the Buyer; or (c) an Option Transaction which is a Put Option, the Seller.
“Receiving Party’s Delivery Banking Day Location” means, in relation to a Transaction, the place specified as such in this Confirmation for the relevant Transaction, or, if a place is not so specified:

(i) the place specified as such in Schedule 2 (Elections); or

(ii) if no such place is specified, the place in which the Receiving Party’s address for the purposes of receiving notices connected with the relevant Transaction is located; or

(iii) if no such address is given, the place in which the Receiving Party has its registered office.

“Receiving Party’s Holding Account” means the Holding Account(s) specified by the Receiving Party in the Confirmation to a Transaction (including any additional account agreed by the Parties in accordance with Clause 6.5 (Effecting Transfers)). Where the Receiving Party has specified a Registry only without specifying the Holding Account details in the Confirmation, “Receiving Party’s Holding Account” includes any Holding Account notified by the Receiving Party to the Delivering Party under Clause 6.6 (Effecting Transfers).
“Receiving Party’s Replacement Cost”, in respect of a failure to Transfer a number of Allowances of a particular Allowance Type and Specified Period pursuant to Clause 12.1 (Failure to Transfer) of the Agreement (being the “Undelivered Allowances”) has the meaning ascribed to it in the Agreement, except when the Excess Emissions Penalty is specified to apply in the relevant Schedule, in which case it means an amount (if positive) equal to the sum of:

(a) either:

(i) if in one or more arm’s length transactions the Receiving Party is able, using its reasonable endeavours, to purchase a number of Allowances of the same Allowance Type and Specified Period as the Undelivered Allowances (“Replacement Allowances”), to be Transferred during the period from (but excluding) the Final Delivery Date to (and including) the Reconciliation Deadline on or immediately following the Delivery Date (the “Buy-In Period”), which in respect of each such individual purchase of Allowances, when aggregated with other such purchases, amounts to a purchase of a number of Allowances equal to the number of Undelivered Allowances:

(A) the price (per Allowance) at which the Receiving Party is able to purchase the relevant number of Replacement Allowances; less

(B) the Allowance Price agreed by the Parties in respect of the Undelivered Allowances; multiplied by

(C) the number of Replacement Allowances which the Receiving Party is able to purchase at the price indicated in (1); plus

(D) interest for the period from (and including) the Delivery Date to (but excluding) the date of termination calculated on an amount equal to the product of the number of Undelivered Allowances and an amount equal to the excess, if any, of the price determined pursuant to (1) over the Allowance Price agreed between the Parties in respect of the Undelivered Allowances at the rate specified in Clause 9.5(a) (Interest) of the Agreement; or

(ii) if in one or more arm’s length transactions the Receiving Party, using its reasonable endeavours, is unable to purchase a number of Replacement Allowances equivalent to the Undelivered Allowances to be delivered during the Buy-In Period:

(A) in respect of the number of Replacement Allowances for which the Receiving Party is able to effect a Buy-In during the Buy-In Period, an amount for such Allowances calculated in accordance with paragraph (i) above; and

(B) in respect of the number of Replacement Allowances equal to the number of Undelivered Allowances minus the number of Replacement Allowances referred to in A(ii)(1) above (the “Shortfall”), the sum of:

(i) the price (per Allowance) at which the Receiving Party, using its reasonable endeavours and in an arm’s length transaction, is or would be able to purchase as soon as reasonably possible after the Reconciliation Deadline a number of Replacement Allowances equal to the Shortfall; less

(ii) the Allowance Price agreed by the Parties in respect of the Undelivered Allowances; plus

(iii) the EEP Amount; multiplied by

(iv) the Shortfall; plus

(v) interest for the period from (and including) the Delivery Date to (but excluding) the date the Receiving Party is or would be able to purchase Replacement Allowances in accordance with paragraph A(ii)(2)(I) above on an amount equal to the product of the Shortfall and an amount equal to the excess, if any, of the price determined pursuant to paragraph A(ii)(2)(I) above over the Allowance Price agreed between the Parties in respect of the Undelivered Allowances at the rate specified in Clause 9.5(a) (Interest) of the Agreement; and

(b) such reasonable costs and expenses which the Receiving Party incurs as a result of the Delivering Party’s failure to Transfer the Shortfall (including, without limitation, broker fees, commissions and legal fees) to the extent that those costs and expenses are not reflected in paragraphs A(i) or A(ii) above.

Where the Receiving Party confirms that it has been unable to purchase Replacement Allowances during the Buy-In Period, it shall be for the Delivering Party to show that it has been as a result of the Receiving Party failing to use its reasonable endeavors to do so.
“Reconciliation Deadline” means 30 April of any calendar year in relation to the immediately preceding calendar year, or as otherwise specified in the EU ETS Rules.
“Reference Market Maker” means three (3) leading traders in the Allowances trading market for the relevant Allowance Type selected by the Non-Defaulting Party in good faith which satisfy all the criteria that the Non-Defaulting Party applies generally at the time in deciding whether to offer or to make an extension of credit and which are independent of the Parties.
“Reference Price” means the price or formula agreed between the Parties as the reference price, as specified in the Confirmation, and if no such price or formula is specified, then the average of a quotation from each of three leading traders in the trading market for the relevant Allowances Type, as selected by the Buyer in good faith.
“Registries Regulation” means the EU Commission Regulation No. 389/2013 of 2 May 2013 establishing a Union Registry pursuant to Directive 2003/87/EC and of the Council, Decisions No. 280/2004/EC and No. 406/2009/EC of the European Parliament and of the Council and repealing Commission Regulations (EU) No. 920/2010 and No. 1193/2011, as may be amended from time to time, including by Commission Regulation (EU) 2018/208.
“Registry” means the registry established by a Member State, non-Member State (with which a Participation Agreement has been signed) or the EU pursuant to the Directive or the Registries Regulation, in order to ensure the accurate accounting of the issue, holding, transfer, acquisition, surrender, cancellation and replacement of Allowances. For the avoidance of doubt, references to a Registry shall include (i) the Union Registry and (ii) collectively the Holding Accounts and all other accounts within the Union Registry that are under the jurisdiction of a single National Administrator designated by a Member State. In the case of (ii), such Holding Accounts and other accounts will together be deemed, for the purposes of this Agreement, to be a Registry for that Member State.
“Registry Operation” means, other than by reason of the occurrence of an Administrator Event:
(a) the continuing functioning of the Relevant Registry;
(b) the continuing functioning of the EUTL; and/or
(c) the continuing functioning of the link between each of the Relevant Registry and the EUTL.
“Registry Pair” means a pair of Registries identified by the Parties in Schedule 2 (Elections) or in a Confirmation with respect to which physical netting of deliveries pursuant to Clause 9.7 (Physical Netting of Deliveries) may be affected.
“Relevant Authority” means the body (or its affiliated agencies) established by a Member State or non-Member State from time to time to administer the EU ETS in its jurisdiction.
“Relevant Change in Tax” has the meaning given to it in Clause 14.9 (Change in Taxes).
“Relevant Entity” has the meaning given to it in Clause 14.2(h)(i) (Credit Rating).
“Relevant Registry” means a Registry through which either Party is obliged to perform a Transfer or acceptance obligation under and in accordance with a Transaction. Where a Party specifies more than one Holding Account for Transfer or acceptance purposes, the Relevant Registry shall be identified in accordance with Clause 5.1(c) (Primary Obligation).
“Relevant Tax” means any present or future tax, levy, impost, duty, charge, assessment or fee of any nature (including interest or penalties) that is imposed by any government or other taxing authority directly in respect of any payment or transfer request under this Agreement other than stamp, registration, documentation or similar tax. Relevant Tax does not include, without limitation, income tax, taxes on emissions or the activities giving rise to emissions or taxes imposed generally on a Party’s business.
“Replacement Allowances” has the meaning given to it in paragraph (A)(i) of the definition of Receiving Party’s Replacement Cost.
“Replacement Transactions” means transactions that would have the effect of preserving for the Non-Defaulting Party the economic equivalent of any payment or compliance with Clauses 5 (Allowance Transfers) or 6 (Effecting Transfers) (whether the underlying obligation was absolute or contingent) that would, but for the occurrence of the relevant Early Termination Date, have been required after that date.
“Requesting Party” has the meaning given to it in Clause 14.2(h).
“Required Authorisations” means all governmental and other licences, authorisations, permits, consents, contracts and other approvals (if any) that are required to enable the Party to fulfil any of its obligations under this Agreement.
“Schedule” means a schedule to this Agreement.
“System” means the system of transferring Allowances between either or both of (a) persons within the EU and (b) persons in third countries, in either case as recognized in accordance with, and subject to, the procedure of the Directive established in, and as implemented by the national laws of, each Member State and certain non-Member States.
“Seller” means the Party specified as such for the purposes of an Option Transaction in the relevant Confirmation.
“Shortfall” has the meaning given to it in paragraph (A)(ii)(2) of the definition of Receiving Party’s Replacement Cost.
“Specified Period” means, in relation to a Transaction and a PTA Quantity, the relevant Validity Period of issue of Allowances as agreed between the Parties at the time of entering into the Transaction.
“Specified Transaction” means any transaction (including an agreement with respect to the transaction) existing at the date of this Agreement or after that date entered into between one Party (or any Credit Support Provider of that Party) and the other Party (or any Credit Support Provider of that other Party) that is a commodity forward or future, commodity option, commodity swap or other commodity transaction, including any contract for differences or transaction, or any other similar transaction relating to commodities, unless otherwise specified in Schedule 2 (Elections) in relation to a Party, insofar as the transaction relates to the commodity or commodities so specified in relation to that Party.
“Statement Amount” has the meaning given to it in Clause 9.2(a)(v) (Statement).
“Statement” has the meaning given to it in Clause 9.2(a) (Statement).
“Strike Price” means in respect of an Option Transaction the price per Allowance specified or otherwise as determined in or pursuant to the relevant Confirmation.
“Suspension Event”: A Suspension Event occurs when, on any date, a Party to the Agreement is unable to perform its Transfer or acceptance obligations under and in accordance with a Transaction through a Relevant Registry as a result of the application of any of the following:

(a) an absence of Registry Operation; or

(b) the occurrence of an Administrator Event.

“Tangible Net Worth” means the sum of all paid up shareholder contributions to the share capital account or any other capital account ascribed for such purposes and any accumulated earnings less any accumulated retained losses and intangible assets including, but not limited to, goodwill.
“Termination Currency” means Euros.
“Termination Payment Date” has the meaning given to it in Clause 14.6(d) (Termination Payments).
“Termination Payment” has the meaning given to it in Clause 14.6(a) (Termination Payments).
“Total Debt” means, for a specified period, the sum of financial indebtedness for borrowed money (which includes debts payable to Affiliates as well as debt instruments to financial institutions).
“Trade Date” means the date a Transaction is agreed as specified in the Confirmation for the Transaction.
“Transaction” means an agreement between the Parties to undertake one or more transactions (including inter alia, transactions relating to forwards and options) involving Transfers of Allowances subject to the terms of this Agreement and which is identified as a Transaction under this Agreement in the relevant Confirmation.
“Transfer Request” means a request made in accordance with the System to effect a Transfer.
“Transfer” means (whether used as a verb or a noun) with respect to a Transaction, the transfer of Allowances from one Holding Account to another under and in accordance with and for the purposes of the Scheme, and “Transferred” and “Transferable” are to be construed accordingly.
“Unauthorised Transfer” means the transfer by debiting of any Allowance from an account holder’s Holding Account and the crediting of a Holding Account of another person, which Transfer is not initiated by the relevant authorised representative or additional authorised representative (as referred to in the Registries Regulation) of the first account holder.
“Undelivered Allowances” has the meaning given to it in the definition of Receiving Party’s Replacement Cost.
“UNFCCC” means the United Nations Framework Convention on Climate Change adopted in New York on May 9, 1992. [not used]
“Union Registry” means the Registry referred to as the ‘Union registry’ in Article 19(1) of the Directive.
“Unpaid Amounts” owing to any Party means:

(a) any amount that became payable to that Party prior to the first day of the period for which the obligations of the Parties are suspended under Clause 13 (Force Majeure and Suspension Event) which remains unpaid; or

(b) any amount that became payable to that Party on or prior to an Early Termination Date under Clause 14 (Termination) which remains unpaid.

“Validity Period” means with respect to EUAs and AEUAs, the period referred to in Article 13 of the Directive beginning 1 January 2021.
“Validity Period Reconciliation Deadline” means the final Reconciliation Deadline in the Validity Period specified in the Confirmation.
“Value Added Tax” or “VAT” means

(a) any Value Added Tax imposed by any Member State or non-Member State, or

(b) any replacement or other tax levied by reference to value added to a transaction.