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 or there was an Illegality, Settlement Disruption Event or Suspension Event (the “EEP Non-delivery” and such EEP the “Indemnifiable EEP”), Delivering Party must pay, in addition to the Receiving Party’s Replacement Cost, the Indemnifiable EEP (the “EEP Payment”), to a maximum of the product of the relevant RPRC Shortfall and the maximum prevailing per-Allowance rate of Excess Emissions Penalty.

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

(a) that it has indeed incurred and paid the EEP Payment due to a shortfall of Allowances on the Reconciliation Deadline following the Delivery Date (the “Deadline Shortfall”);

(b) the extent to which:

(i) Delivering Party’s EEP Non-delivery caused its EEP Payment liability;

(ii) it would have incurred that liability regardless of Delivering Party’s EEP Non-delivery; and

(iii) any third party’s failure to deliver Allowances under another agreement contributed to its EEP Payment liability.

Receiving Party must provide Delivering Party with information it needs to make a commercially reasonable assessment of how far its EEP Non-delivery contributed to the Deadline Shortfall.

If other parties’ failures contributed to the Deadline Shortfall, then Delivering Party is only obliged to 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 would result in a windfall.

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 try to resolve as soon as they can) 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.