Template:EUA Annex Receiving Party’s Replacement Cost: Difference between revisions

:(1) if “{{euaprov|Excess Emissions Penalty}}” is specified not to be applicable in the Annex to this Part [7] or the Confirmation for the relevant {{euaprov|EU Emissions Allowance Transaction}}, or if “{{euaprov|Excess Emissions Penalty}}” is specified to be applicable and if an {{euaprov|EEP Risk Period}} is specified in the Annex to this Part [7] or in the Confirmation for the relevant {{euaprov|EU Emissions Allowance Transaction}} but the {{euaprov|Delivery Date}} falls outside the {{euaprov|EEP Risk Period}} then, in respect of a failure to deliver a number of Allowances (the “{{euaprov|RPRC Shortfall}}”), an amount equal to:

:::(II) the {{euaprov|Allowance Purchase Price}} or {{euaprov|Allowance Strike Price}}, as applicable, as set out in the Confirmation for the relevant {{euaprov|EU Emissions Allowance Transaction}} plus, in those circumstances in which the relevant termination of the parties’ obligations under “Physical Settlement” occurs following a {{euaprov|Suspension Event}}, the {{euaprov|Close-out Cost of Carry Amount}}; multiplied by:

:(2) if “{{euaprov|Excess Emissions Penalty}}” is specified to be applicable in the Annex to this Part [7] or the Confirmation for an {{euaprov|EU Emissions Allowance Transaction}} and, if an {{euaprov|EEP Risk Period}} is specified in the Annex to this Part [7] or in the Confirmation for the relevant {{euaprov|EU Emissions Allowance Transaction}}, the {{euaprov|Delivery Date}} falls within the {{euaprov|EEP Risk Period}} for the relevant {{euaprov|EU Emissions Allowance Transaction}}, then, in respect of a failure to deliver a number of Allowances (the “{{euaprov|Undelivered Allowances}}”), an amount equal to the sum of:

:::(I) if in one or more arm’s length transactions {{euaprov|Receiving Party}} is able, using its reasonable endeavours, to purchase a number of Allowances to be delivered during the period from (but excluding) the {{euaprov|Final Delivery Date}} to (and including) the {{euaprov|Reconciliation Deadline}} on or immediately following the {{euaprov|Delivery Date}} (the “Buy-In Period”), which in respect of each such individual purchase of Allowances, when aggregated with other such purchases, amounts to a purchase of a number of Allowances equal to the number of {{euaprov|Undelivered Allowances}}:

:::::(2) (A) the {{euaprov|Allowance Purchase Price}} or {{euaprov|Allowance Strike Price}}, as applicable, for the {{euaprov|Undelivered Allowances}} set out in the relevant Confirmation plus, (B) in those circumstances in which the relevant termination of the parties’ obligations under “Physical Settlement” occurs following a {{euaprov|Suspension Event}}, the {{euaprov|Close-out Cost of Carry Amount}}; multiplied by:

::::(Y) in respect of a number of Allowances equal to the number of {{euaprov|Undelivered Allowances}} minus the number of Allowances referred to in (II)(X) above (the “{{euaprov|Shortfall}}”), the sum of:

::::::(I) the price (per Allowance) at which {{euaprov|Receiving Party}}, using its reasonable efforts and in an arm’s length transaction, is able to purchase as soon as reasonably possible for delivery after the {{euaprov|Reconciliation Deadline}} a number of Allowances (such Allowances also being of the same {{euaprov|Allowance Type}} equal to the {{euaprov|Shortfall}}; less

::::::(II) the {{euaprov|Allowance Purchase Price}} or {{euaprov|Allowance Strike Price}}, as applicable, for the {{euaprov|Undelivered Allowances}} set out in the relevant Confirmation plus, in those circumstances in which the relevant termination of the parties’ obligations under “Physical Settlement” occurs following a {{euaprov|Suspension Event}}, the {{euaprov|Close-out Cost of Carry Amount}}; plus

:::::(c) onterest at the Default Rate for the period from (and including) the {{euaprov|Delivery Date}} to (but excluding) the date {{euaprov|Receiving Party}} is or would be able to purchase Allowances in accordance with paragraph (II)(Y)(a)(1) above on an amount equal to the product of the number of {{euaprov|Undelivered Allowances}} and an amount equal to the excess, if any, of the price determined pursuant to paragraph (II)(Y)(a)(1) above over the {{euaprov|Allowance Purchase Price}} or the {{euaprov|Allowance Strike Price}}, as applicable; and

::(B) such reasonable costs and expenses which {{euaprov|Receiving Party}} incurs as a direct result of Delivering Party’s failure to deliver the {{euaprov|Shortfall}} to the extent that those costs and expenses are not reflected in paragraphs (A)(I) or (A)(II) above; or

:(3) if “{{euaprov|Failure to Deliver (Alternative Method)}}” is specified to be applicable in the Annex to this Part [7] or the Confirmation for an {{euaprov|EU Emissions Allowance Transaction}}, then, in respect of a failure to deliver a number of Allowances (the number of Allowances not so delivered being the “{{euaprov|RPRC Shortfall}}”), an amount equal to:

:::(I) the price (per Allowance) {{euaprov|Receiving Party}}, acting in a commercially reasonable manner, does or would, in the determination of the Calculation Agent, pay in an arm’s length transaction concluded in accordance with prevailing market practice on the {{euaprov|Final Delivery Date}} to purchase a number of Allowances equivalent to the {{euaprov|RPRC Shortfall}} for delivery on the first {{euaprov|Delivery Business Day}} on which transactions concluded on the {{euaprov|Delivery Date}} would be settled in accordance with prevailing market practice; less

:::(II) the {{euaprov|Allowance Purchase Price}} or {{euaprov|Allowance Strike Price}}, as applicable, as set out in the Confirmation for such {{euaprov|EU Emissions Allowance Transaction}} plus, in those circumstances in which the relevant termination of the parties’ obligations under “Physical Settlement” occurs following a {{euaprov|Suspension Event}}, the {{euaprov|Close-out Cost of Carry Amount}}; multiplied by:

::(C) interest at the Default Rate for the period from (and including) the {{euaprov|Delivery Date}} to (but excluding) the {{euaprov|Final Delivery Date}} on an amount equal to the product of the {{euaprov|Allowance Purchase Price}} or the {{euaprov|Allowance Strike Price}}, as applicable, and the {{euaprov|RPRC Shortfall}}. <br>