Template:EFET Allowance Annex 8.2(b)

(b) Seller’s Cover Costs. In the event that the Buyer fails to accept Transfer of all or any portion of a Contract Quantity as required by § 8.2(a) (Two Business Days Grace Period) in accordance with the terms of an Allowance Transaction and the Seller has not agreed to a Deferred Acceptance Date as provided for in § 8.2(c) (Seller’s Right to Waive Its Cover Costs), the Buyer shall incur the obligation to pay the Seller, as compensation for its failure to accept Transfer of the Allowances, an amount (hereinafter “Seller’s Cover Costs”) equal to the sum of:

(i) the price, if any, less than the portion of the Total Contract Price applicable to the Allowances not accepted by the Buyer, which the Seller, acting in a commercially reasonable manner either did, or would have been able to, receive, in an arm’s length transaction with a third party or parties, from the resale of the Allowances not accepted by the Buyer;

(ii) such reasonable additional incidental costs as the Seller incurred in attempting to make or making such resale of the Allowances; and

(iii) interest accrued during the two Delivery Business Day grace period as provided in § 8.2(a); plus interest, at the Interest Rate specified in § 13.5 (Default Interest), accrued from (and including) the first Delivery Business Date following the Delivery Date, to (but excluding) the date of receipt by the Seller of damages for the Buyer’s failure to accept, such amount calculated using the following formula:

Amount on which interest accrues = ANA x CP

Where:

ANA means Allowances not accepted, the total number of Allowances the Buyer failed to accept; and

CP means the aggregate Contract Price that the Buyer would have been required to pay to the Seller for all Allowances not accepted by it.