Template:Nutshell EUA Annex (d)(vii)

(d)(vii) No Encumbrances
for each delivery of Allowances, Delivering Party must deliver Allowances, free and clear of all liens, security interests, claims and encumbrances or any interest in or to them by any person (the “No Encumbrance Obligation”). Where a party is in breach of the No Encumbrance Obligation:

(1) This Agreement and all Transactions will continue unaffected.

(2) Without prejudice to any defences available to Delivering Party, following written notice of that breach from Receiving Party (however long after the Delivery Date) and subject to Part (d)(vii)(4), Receiving Party must:

(A) as soon as practicable, determine the Encumbrance Loss Amount arising from the breach ; and

(B) notify Delivering Party of the Encumbrance Loss Amount due, with calculation details.

In doing so, Receiving Party need not enter into replacement transactions.

(3) By no later than the third Business Day after receiving a valid invoice for such Encumbrance Loss Amount (or the notice, if later), Delivering Party must pay Receiving Party the Encumbrance Loss Amount, which will bear interest at the Default Rate. Once paid, the parties will have no further obligations under that Transaction. Receiving Party acknowledges that these are its exclusive remedies for breach of the No Encumbrance Obligation.

(4) Where transfering an Affected Allowance breaches the No Encumbrances Obligation, Delivering Party will be liable for the Encumbrance Loss Amount if, when it acquired the Affected Allowance, it was not acting in good faith; otherwise, it will only be liable under the Transaction if:

(A) Receiving Party, being subject to a claim from the Original Affected Party, has used its best endeavours in good faith to defend such a claim, but was unsuccessful; or

(B) Receiving Party, having acted in good faith when buying such Affected Allowance but still suffering a third party claim ((from someone other than the Original Affected Party) for that Affected Allowance, has used all reasonable endeavours to mitigate the Encumbrance Loss Amount.