Template:Nutshell EUA Annex (d)(ii)(1)

(d)(ii)(1) Failure to Deliver by Delivering Party
If the failure to deliver occurs other than following Receiving Party’s failure to observe the Requirements under the Scheme, an Illegality, a Settlement Disruption Event, a Suspension Event or Abandonment of Scheme, the Payment Date will be postponed and Receiving Party may by notice require Delivering Party to remedy the failure and:

(A) Failure to Deliver Remedied: If Delivering Party remedies the failure by the Final Delivery Date:

(X) when determining the Payment Date, the Delivery Date will be the date of actual delivery:

(i) Allowance Forward Transactions: Receiving Party must pay Delivering Party the Allowance Purchase Price multiplied by the Number of Allowances on the Payment Date

(ii) Allowance Option Transactions: Receiving Party must pay Delivering Party the Allowance Strike Price multiplied by the number of Allowances to be Delivered on the Payment Date; and

(Y) Delivering Party must pay Receiving Party on the Payment Date (determined as above) interest on the number of Allowances due but not delivered on the Delivery Date multiplied by the Allowance Purchase Price (for an Allowance Forward Transaction) or the Allowance Strike Price (for an Allowance Option Transaction) from the original Delivery Date to the actual delivery date at the Default Rate.

(B) Failure to Deliver Not Remedied: If the failure is not so remedied:

(X) if “Excess Emissions Penalty” does not apply, or if it does, but the Delivery Date does not fall within the specified EEP Risk Period, Receiving Party may by notice terminate the parties’ obligations under “Physical Settlement” and Delivering Party must pay Receiving Party Receiving Party’s Replacement Cost (if positive) on the next Business Day, adjusted for any amounts already previously paid by Receiving Party to Delivering Party (other than Premium on an Allowance Option Transaction) under the EU Emissions Allowance Transaction; or

(Y) if “Excess Emissions Penalty” applies and the Delivery Date falls within any specified EEP Risk Period, Receiving Party may by notice terminate the parties’ obligations under “Physical Settlement” and Delivering Party must pay Receiving Party Receiving Party’s Replacement Cost (if positivem, and where it applies) on the Business Day following the day on which Receiving Party can effect a Buy-In, or the first Business Day following the day on which Receiving Party is can purchase Allowances under paragraph (2)(A)(II)(Y) of Receiving Party’s Replacement Cost, if and to the extent that paragraph applies, in either case adjusted to take into account any amount previously paid (other that any Premium on an Allowance Option Transaction); or

(Z) if “Failure to Deliver (Alternative Method)” is specified to be applicable in the Annex to this Part [7] or the Confirmation for the relevant EU Emissions Allowance Transaction:

(aa) Delivering Party must pay Receiving Party, on the first succeeding Business Day, an amount determined in accordance with paragraph (3) of Receiving Party’s Replacement Cost (if a positive number), adjusted to take into account any amount previously paid (which, for the avoidance of doubt, shall not include any Premium paid by the Buyer in respect of an Allowance Option Transaction) by Receiving Party to Delivering Party in respect of the relevant EU Emissions Allowance Transaction, and upon payment of such amount, Delivering Party’s obligation to deliver to Receiving Party the Allowances to be Delivered shall be fully discharged and terminated; and

(bb) if “Excess Emissions Penalty” is specified to be applicable in the Annex to this Part [7] or the Confirmation for the relevant EU Emissions Allowance Transaction, Delivering Party must pay Receiving Party the amount, if any, determined in accordance with the provisions of Part [7] (d)(xi)(Failure to Deliver (Alternative Method) – EEP Applicable) below on the date determined in accordance with those provisions.