Template talk:EFET Allowance Annex 8: Difference between revisions

{{efetaprov|8}} '''{{efetaprov|Remedies for Failure to Transfer or Accept}}'''. For purposes of {{efetaprov|Allowance Transaction}}s, § 8 of the {{efetprov|General Agreement}} is hereby deleted in its entirety and replaced with the following new § {{efetaprov|8}} (''{{efetaprov|Remedies for Failure to Transfer or Accept}}''):<br>

:(a) '''{{efetaprov|Two Business Days Grace Period}}'''. When the {{efetaprov|Buyer}} fails to accept {{efetaprov|Transfer}} of a {{efetaprov|Contract Quantity}} in whole or in part on a {{efetaprov|Delivery Date}} as required in accordance with the terms of an {{efetaprov|Allowance Transaction}}, and such failure is not excused by an event of Force Majeure, {{efetaprov|Suspension Event}} or the {{efetaprov|Seller}}’s non-performance, the {{efetaprov|Seller}} shall afford the {{efetaprov|Buyer}} an opportunity to remedy its failure by again attempting to Schedule and {{efetaprov|Transfer}} such {{efetaprov|Contract Quantity}} (or undelivered portion thereof) to the {{efetaprov|Buyer}} on the second {{efetaprov|Delivery Business Day}} following the {{efetaprov|Delivery Date}}, provided that such day is not on or after the {{efetaprov|Reconciliation Deadline}} applicable to the undelivered Allowance(s), and further subject to the additional obligation of the {{efetaprov|Buyer}} to pay the {{efetaprov|Seller}}, as compensation for its failure to accept {{efetaprov|Transfer}} of the {{efetaprov|Allowance}}s, interest calculated: (i) as follows for the two {{efetaprov|Delivery Business Day}} grace period; and (ii) as set forth in the applicable subpart of this § {{efetaprov|8.2}} for any longer period the {{efetaprov|Buyer}} fails to accept the {{efetaprov|Allowance}}s thereafter.  

:Interest for the two {{efetaprov|Delivery Business Day}} grace period shall accrue at the Interest Rate specified in § {{efetaprov|13.5}} (''{{efetaprov|Default Interest}}'') for the period from (and including) the {{efetaprov|Delivery Date}} to (but excluding) the second {{efetaprov|Delivery Business Day}} following the {{efetaprov|Delivery Date}} on the {{efetaprov|Total Contract Price}} of the {{efetaprov|Allowance}}s not accepted by the {{efetaprov|Buyer}}, such {{efetaprov|Total Contract Price}} calculated as follows: the number of {{efetaprov|Allowance}}s not accepted by the {{efetaprov|Buyer}} multiplied by a fraction determined by dividing the {{efetaprov|Total Contract Price}} by the {{efetaprov|Contract Quantity}}.  

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

::(i) the price, if any, less than the portion of the {{efetaprov|Total Contract Price}} applicable to the {{efetaprov|Allowance}}s not accepted by the {{efetaprov|Buyer}}, which the {{efetaprov|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 {{efetaprov|Allowance}}s not accepted by the {{efetaprov|Buyer}};  

::(ii) such reasonable additional incidental costs as the {{efetaprov|Seller}} incurred in attempting to make or making such resale of the {{efetaprov|Allowance}}s; and  

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

:::'''ANA''' means {{efetaprov|Allowance}}s not accepted, the total number of {{efetaprov|Allowance}}s the {{efetaprov|Buyer}} failed to accept; and  

:::'''CP''' means the aggregate {{efetaprov|Contract Price}} that the {{efetaprov|Buyer}} would have been required to pay to the {{efetaprov|Seller}} for all {{efetaprov|Allowance}}s not accepted by it.  

:(c) '''{{efetaprov|Seller’s Right to Waive Its Cover Costs}}'''. The {{efetaprov|Seller}} shall be entitled to invoice the {{efetaprov|Buyer}} for damages payable pursuant to § {{efetaprov|8.2}}(b) (''{{efetaprov|Seller’s Cover Costs}}'') in accordance with the requirements of Payment Cycle B as defined in § {{efetaprov|13.2}} (''Payment''). However, the {{efetaprov|Seller}} may alternatively, but shall be under no obligation to, defer the due date on the payment of such damages for a reasonable period of time (but in no event beyond the applicable {{efetaprov|Reconciliation Deadline}}) if the {{efetaprov|Buyer}} has indicated to the {{efetaprov|Seller}} its intent to attempt to cure its acceptance default within a period of time acceptable to the {{efetaprov|Seller}}.  

::(i) At any time prior to the due date applicable to the payment of damages due to the {{efetaprov|Seller}} under §8.2(b), the {{efetaprov|Buyer}} may offer to accept {{efetaprov|Transfer}} from the {{efetaprov|Seller}} on a new {{efetaprov|Delivery Date}} (the “'''{{efetaprov|Deferred Acceptance Date}}'''”) of the {{efetaprov|Allowance}}s it failed to accept {{efetaprov|Transfer}} of on the original {{efetaprov|Delivery Date}}. The {{efetaprov|Seller}} may, but is not required to, agree to attempt to again {{efetaprov|Transfer}} such replacement {{efetaprov|Allowance}}s to the {{efetaprov|Buyer}} on the Deferred Acceptance Date. If it so agrees, the {{efetaprov|Seller}}, in lieu of the damages it is entitled to recover under § {{efetaprov|8.2}}(b), shall be entitled to both {{efetaprov|Transfer}} and receive payment of the {{efetaprov|Contract Price}} for the {{efetaprov|Allowance}}s on the Deferred Acceptance Date and to further invoice the {{efetaprov|Buyer}} for interest for the intervening period calculated as the sum of the interest accrued during the two {{efetaprov|Delivery Business Day}} grace period as provided in § {{efetaprov|8.2}}(a) plus interest at the Interest Rate specified in § {{efetaprov|13.5}} (''{{efetaprov|Default Interest}}''), from (and including) the second {{efetaprov|Delivery Business Day}} following the {{efetaprov|Delivery Date}} to (but excluding) the date of actual acceptance of {{efetaprov|Transfer}} of the Allowance(s) previously not accepted, accrued on the amount calculated in accordance with the formula set forth in § {{efetaprov|8.2}}(b)(iii).  

::(ii) If the {{efetaprov|Seller}} agrees to the {{efetaprov|Buyer}}’s offer to accept {{efetaprov|Transfer}} of the {{efetaprov|Allowance}}s on a Deferred Acceptance Date as provided above in subparagraph (i), but the {{efetaprov|Buyer}} again defaults on its acceptance of {{efetaprov|Transfer}} obligation, the {{efetaprov|Seller}} shall be entitled to invoice the {{efetaprov|Buyer}} for an amount calculated in accordance with § {{efetaprov|8.2}}(b) (''{{efetaprov|Seller’s Cover Costs}}) save that the amount it may so invoice the {{efetaprov|Buyer}} shall account for both:  

:(a) '''Applicability'''. The Parties to any {{efetaprov|Allowance Transaction}}s desiring to make {{efetaprov|EEP}} or {{efetaprov|EEP Equivalent}} inapplicable and inoperative to the calculation of the {{efetaprov|Buyer’s Cover Costs}} for any {{efetaprov|Allowance Transaction}}s between them may do so either globally by specifying {{efetaprov|EEP}} or {{efetaprov|EEP Equivalent}} as not applying in Part II of this {{efetaprov|Allowances Appendix}}, or specifically, with respect to a particular {{efetaprov|Allowance Transaction}}, by so agreeing in the terms of that {{efetaprov|Allowance Transaction}} itself.  

:(b) '''{{efetaprov|Excess Emissions Penalty}}'''. If {{efetaprov|EEP}} is applicable, the {{efetaprov|Buyer}} may invoice the {{efetaprov|Seller}} in the amount of an {{efetaprov|EEP}} it incurs as the result of the {{efetaprov|Seller}}’s failure to {{efetaprov|Transfer}} to it {{efetaprov|Allowance}}s when required pursuant to the terms of an {{efetaprov|Allowance Transaction}}.  

:(c) '''{{efetaprov|Excess Emissions Penalty Equivalent}}'''. If {{efetaprov|EEP Equivalent}} is applicable, the {{efetaprov|Buyer}} may invoice the {{efetaprov|Seller}} for an {{efetaprov|EEP Equivalent}} it incurs as the result of the {{efetaprov|Seller}}’s failure to {{efetaprov|Transfer}} to it {{efetaprov|Allowance}}s when required pursuant to the terms of an {{efetaprov|Allowance Transaction}}.  

:(d) '''{{efetaprov|Duty to Mitigate}}'''. The {{efetaprov|Seller}}’s obligation to pay the {{efetaprov|EEP}} or the {{efetaprov|EEP Equivalent}} is subject always to the {{efetaprov|Buyer}}’s overriding obligation to use commercially reasonable endeavours (including, without limitation, making use of any excess {{efetaprov|Allowance}}s it may have available to it at the time, and/or procuring such {{efetaprov|Allowance}}s as are available in the market) to satisfy its obligation to surrender the required number of {{efetaprov|Allowance}}s necessary to avoid or otherwise mitigate its {{efetaprov|EEP}} or {{efetaprov|EEP Equivalent}} liability. For the avoidance of doubt, the {{efetaprov|Buyer}}’s duty to mitigate its {{efetaprov|EEP}} or {{efetaprov|EEP Equivalent}} exposure is limited to management of its Allowance portfolio and shall not impose upon it any further obligation regarding its operation of any installation with an obligation to surrender {{efetaprov|Allowance}}s to a {{efetaprov|Relevant Authority}}.  

:(e) '''{{efetaprov|Evidence of Commercially Reasonable Efforts}}'''. Upon request, the {{efetaprov|Buyer}} shall confirm to the {{efetaprov|Seller}}:  

::(i) that it has incurred {{efetaprov|EEP}} or {{efetaprov|EEP Equivalent}} consequent upon the {{efetaprov|Seller}}’s failure to {{efetaprov|Transfer}} {{efetaprov|Allowance}}s to it;  

::(ii) the extent to which the requirement for the {{efetaprov|Buyer}} to pay the {{efetaprov|EEP}} or the {{efetaprov|EEP Equivalent}} results from the {{efetaprov|Seller}}’s failure to make such a Transfer;  

::(iii) that it was unable to mitigate its {{efetaprov|EEP}} or {{efetaprov|EEP Equivalent}} exposure,  

:and shall provide the {{efetaprov|Seller}} with evidence: (A) that the {{efetaprov|EEP}} or {{efetaprov|EEP Equivalent}}, as applicable, was incurred by it; (B) that such {{efetaprov|EEP}} or {{efetaprov|EEP Equivalent}} was incurred as a result of the {{efetaprov|Seller}}’s failure to perform its {{efetaprov|Transfer}} obligation; and (C) of its commercially reasonable endeavours to mitigate its exposure to such {{efetaprov|EEP}} or {{efetaprov|EEP Equivalent}} as it has invoiced to the {{efetaprov|Seller}}; provided, however, that should the {{efetaprov|Seller}} elect to challenge the {{efetaprov|Buyer}} in respect of any of the above matters, then the burden for demonstrating: (A) that such {{efetaprov|EEP}} or {{efetaprov|EEP Equivalent}} was not actually incurred by the {{efetaprov|Buyer}}; (B) that such {{efetaprov|EEP}} or {{efetaprov|EEP Equivalent}} was not incurred by the {{efetaprov|Buyer}} as a result of the {{efetaprov|Seller}}’s non-performance; and/or (C) the insufficiency, lack of thoroughness or unreasonableness of such endeavours shall be on the {{efetaprov|Seller}} and, if § 22.3 (Expert Determination) is specified as applying in Part II of this {{efetaprov|Allowances Appendix}} the process by which such challenge will be determined shall be in accordance with the procedures set forth in § {{efetaprov|22.3}} (''{{efetaprov|Expert Determination}}'').  

:(f) '''{{efetaprov|Later Mitigation of Recovered EEP or EEP Equivalent}}'''. To the extent an initially assessed and recovered {{efetaprov|EEP}} is later reduced and/or fully or partly returned or credited to the {{efetaprov|Buyer}} by a {{efetaprov|Relevant Authority}} for any reason whatsoever, only such reduced and finally assessed {{efetaprov|EEP}} shall apply. {{efetaprov|EEP}} recovered by the {{efetaprov|Buyer}} in the form of damages under this § 8 which are later reduced or returned to such {{efetaprov|Buyer}} shall be returned upon demand to the {{efetaprov|Seller}} who paid such damages, and the {{efetaprov|Buyer}} shall provide the {{efetaprov|Seller}} with prompt notification of any such reduction or return. Similarly, in the event the {{efetaprov|Seller}} has made the {{efetaprov|Buyer}} whole for an {{efetaprov|EEP Equivalent}}, and all or any portion of the underlying {{efetaprov|EEP}} or {{efetaprov|EEP Equivalent}} upon which the {{efetaprov|Seller}}’s {{efetaprov|EEP Equivalent}} payment was based is later returned to the {{efetaprov|Buyer}} by its resale customer, the {{efetaprov|Buyer}} shall return an equivalent amount of its own {{efetaprov|EEP Equivalent}} payment to the {{efetaprov|Seller}}.

§ {{euaprov|8.5}} '''{{efetaprov|Remedies for Failure to Transfer or Accept after Cessation of Suspension Event}}'''.  

:(a) Where the {{efetaprov|Buyer}} fails to accept {{efetaprov|Transfer}} from the {{efetaprov|Seller}} of the {{efetaprov|Contract Quantity}} in whole or in part on a {{efetaprov|Delayed Delivery Date}} and such failure is not excused by an event of {{euaprov|Force Majeure}}, another {{efetaprov|Suspension Event}} or the {{efetaprov|Seller}}’s non-performance, the {{efetaprov|Seller’s Cover Costs}} shall consist of the sum of the following elements:  

::(i) the {{efetaprov|Seller’s Cover Costs}} as provided in § {{euaprov|8.2}}(b) of this {{efetaprov|Allowances Appendix}};  

::(ii) an amount (the “'''{{efetaprov|Default Cost of Carry Amount}}'''”) calculated at the {{efetaprov|Default Cost of Carry Rate}} for the {{efetaprov|Default Cost of Carry Calculation Period}} multiplied by the product of the {{efetaprov|Contract Price}} and the number of {{efetaprov|Allowance}}s not {{euaprov|Transferred}} or accepted for the relevant {{efetaprov|Allowance Transaction}}, divided by three hundred and sixty (360). Such {{efetaprov|Default Cost of Carry Amount}} shall be identified in the relevant invoice; and  

::(iii) interest on the {{efetaprov|Default Cost of Carry Amount}} accrued from (and including) the {{efetaprov|Delivery Business Day}} following the {{efetaprov|Default Cost of Carry Calculation Period}}, to (but excluding) the receipt by the {{efetaprov|Seller}} of damages for the {{efetaprov|Buyer}}’s failure to accept Transfer, calculated at the Interest Rate specified in § 13.5 (Default Interest) of the Agreement.  

:(b) Where {{efetaprov|Seller}} fails to {{efetaprov|Transfer}} to the {{efetaprov|Buyer}} the {{efetaprov|Contract Quantity}} in whole or in part on a {{efetaprov|Delayed Delivery Date}} and such failure is not excused by an event of {{euaprov|Force Majeure}}, another {{efetaprov|Suspension Event}} or the {{efetaprov|Buyer}}’s non-performance, {{efetaprov|Buyer’s Cover Costs}} shall consist of the aggregate of the following elements:  

:::(a) § {{euaprov|8.1}}(b)(i) of this {{efetaprov|Allowances Appendix}}; or,  

:::(b) where an {{efetaprov|EEP}} or {{efetaprov|EEP Equivalent}} has been made applicable to an {{efetaprov|Allowance Transaction}} and has arisen, § {{euaprov|8.1}}(b)(ii) of this Allowance Appendix;  

provided, always, that in the event that the number resulting from application of the applicable formula set forth immediately above in either § {{euaprov|8.5}}(a) or § {{euaprov|8.5}}(b) results in a negative number, such number shall be deemed to be zero and no damages will be owed.  <br>