Encumbrance Loss Amount: An amount reasonably determined by
Receiving Party in good faith to be its total losses and costs in connection with an
EU Emissions Allowance Transaction including, but not limited to, any loss of bargain, cost of funding or, at the election of
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 an
EU Emissions Allowance Transaction prior to the delivery of the written notice by
Receiving Party and
Receiving Party’s legal fees and out-of-pocket expenses but does not include
Excess Emissions Penalty or any amount which
Receiving Party must pay to a third party in respect of any such penalty payable to any other party (or
Relevant Authority) by that third party. The parties agree that in circumstances where there was a breach of the
No Encumbrances Obligation by
Delivering Party caused by the transfer of an
Affected Allowance,
Receiving Party shall be entitled to include in such amount any losses arising out of or in connection with any claim, demand, action or proceeding brought against
Receiving Party by a third party consequent upon the transfer by
Receiving Party of an
Affected Allowance transferred to it by
Delivering Party under an
EU Emissions Allowance Transaction.