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Talk:EU Emissions Annex Wikitext: Difference between revisions
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In respect of each {{euaprov|EU Emissions Allowance Transaction}}: <br> | In respect of each {{euaprov|EU Emissions Allowance Transaction}}: <br> | ||
{{euaprov|(d)(i)}} '''{{euaprov|Physical Settlement}}'''<br> | {{euaprov|(d)(i)}} '''{{euaprov|Physical Settlement}}'''<br> | ||
{{ | {{euaprov|(d)(i)(1)}} '''{{euaprov|Settlement}}''' <br> | ||
{{ | :(A) For purposes of an {{euaprov|Allowance Forward Transaction}}, on the {{euaprov|Payment Date}}, {{euaprov|Buyer}} shall pay to {{euaprov|Seller}} an amount equal to the {{euaprov|Allowance Purchase Price}} multiplied by the {{euaprov|Number of Allowances}} and on the {{euaprov|Delivery Date}} {{euaprov|Seller}} shall deliver to {{euaprov|Buyer}} the {{euaprov|Allowances to be Delivered}} and {{euaprov|Buyer}} shall accept the {{euaprov|Allowances to be Delivered}}, subject to and in accordance with the terms and conditions of this {{isdaprov|Agreement}} and the related {{euaprov|Confirmation}}. | ||
{{ | :(B) For purposes of an {{euaprov|Allowance Option Transaction}}, in respect of each {{euaprov|Exercise Date}}, on the relevant {{euaprov|Payment Date}} {{euaprov|Receiving Party}} shall pay to {{euaprov|Delivering Party}} an amount equal to the {{euaprov|Allowance Strike Price}} multiplied by the {{euaprov|Number of Allowances}} to be {{euaprov|Delivered}} and on the relevant {{euaprov|Delivery Date}} {{euaprov|Delivering Party}} shall deliver to {{euaprov|Receiving Party}} the {{euaprov|Allowances to be Delivered}}, and {{euaprov|Receiving Party}} shall accept the {{euaprov|Allowances to be Delivered}}, subject to and in accordance with the terms and conditions of this Agreement and the related {{euaprov|Confirmation}}. <br> | ||
{{ | {{euaprov|(d)(i)(2)}} '''{{euaprov|Delivery}}''' <br> | ||
{{ | :(A) Any obligation of {{euaprov|Delivering Party}} to deliver {{euaprov|Allowances}} pursuant to an {{euaprov|EU Emissions Allowance Transaction}} shall be discharged by the completed transfer of those {{euaprov|Allowances}} from a {{euaprov|Holding Account}} of {{euaprov|Delivering Party}} under and in accordance with the {{euaprov|Scheme}}. A transfer of {{euaprov|Allowances}} shall be considered to be completed for the purpose of a delivery obligation pursuant to an {{euaprov|EU Emissions Allowance Transaction}} when the relevant {{euaprov|Allowances}} are received at the relevant {{euaprov|Specified Holding Account}} of {{euaprov|Receiving Party}}, whereupon risk of loss related to the {{euaprov|Allowances}} or any portion thereof transfers from {{euaprov|Delivering Party}} to {{euaprov|Receiving Party}}. | ||
:(B) Notwithstanding Part(d)(i)(2)(A) above, if {{euaprov|Delivering Party}} has one or more {{euaprov|Specified Holding Account}}s for the relevant {{euaprov|EU Emissions Allowance Transaction}}, {{euaprov|Delivering Party}}’s obligation to deliver {{euaprov|Allowances}} under an {{euaprov|EU Emissions Allowance Transaction}} shall be limited to an obligation to deliver from any such {{euaprov|Specified Holding Account}} of {{euaprov|Delivering Party}} to the relevant {{euaprov|Specified Holding Account}} of {{euaprov|Receiving Party}}. | |||
:(C) Where {{euaprov|Receiving Party}} has more than one {{euaprov|Specified Holding Account}} in respect of an {{euaprov|EU Emissions Allowance Transaction}}, such {{euaprov|Specified Holding Account}}s are set out in order of preference. {{euaprov|Delivering Party}} shall deliver the {{euaprov|Allowances to be Delivered}} to the first listed {{euaprov|Specified Holding Account}} of {{euaprov|Receiving Party}} on the {{euaprov|Delivery Date}} unless, in respect of such {{euaprov|Receiving Party}}’s {{euaprov|Specified Holding Account}}, it is prevented from so doing by an event or circumstance that would be a {{euaprov|Settlement Disruption Event}} or a {{euaprov|Suspension Event}} if the first listed {{euaprov|Specified Holding Account}} of {{euaprov|Receiving Party}} were the only {{euaprov|Specified Holding Account}} so listed. In such circumstances, the provisions of this paragraph will apply iteratively to the next listed {{euaprov|Receiving Party}}’s {{euaprov|Specified Holding Account}} ([[if any]]). | |||
:(D) If a transfer of {{euaprov|Allowances}} is completed after 4:00 p.m., Central European Time, on a {{euaprov|Delivery Business Day}} or at any time on any day other than a {{euaprov|Delivery Business Day}}, then those {{euaprov|Allowances}} will be deemed to have been delivered at 10:00 a.m., Central European Time, on the next following {{euaprov|Delivery Business Day}}. If a transfer of {{euaprov|Allowances}} is completed before 10:00 a.m., Central European Time, on a {{euaprov|Delivery Business Day}}, then those {{euaprov|Allowances}} will be deemed to have been delivered at 10:00 a.m., Central European Time, on that day. <br> | |||
{{euaprov|(d)(i)(3)}} '''{{euaprov|Netting}}''': If on any date {{euaprov|Allowances}} of the same {{euaprov|Allowance Type}} and {{euaprov|Specified Compliance Period}} would otherwise be deliverable in respect of two or more {{euaprov|EU Emissions Allowance Transaction}}s by each party to the other and, if applicable, between the same pair of {{euaprov|Holding Account}}s of the parties, then, on such date, each party’s obligation to make delivery of any such {{euaprov|Allowances}} will be automatically satisfied and discharged and, if the aggregate amount of {{euaprov|Allowances}} that would otherwise have been deliverable by one party exceeds the aggregate amount of {{euaprov|Allowances}} that would otherwise have been deliverable by the other party, replaced by an obligation upon the party by which the larger aggregate amount would have been deliverable to deliver to the other party the excess of the larger aggregate amount over the smaller aggregate amount. <br> | |||
{{euaprov|(d)(i)(4)}} '''{{euaprov|Settlement Disruption Event}}''' | |||
:(A) '''Notification of {{euaprov|Settlement Disruption Event}}''': Upon the occurrence of a {{euaprov|Settlement Disruption Event}}, either party may notify the other party in writing of the commencement of the {{euaprov|Settlement Disruption Event}} and the {{euaprov|EU Emissions Allowance Transaction}}(s) affected by that {{euaprov|Settlement Disruption Event}}. Where the notification is from the party affected by the {{euaprov|Settlement Disruption Event}}, to the extent available to such party, it shall also provide details of the {{euaprov|Settlement Disruption Event}} and a non-binding estimate of the extent and the expected duration of its inability to perform its obligations due to the {{euaprov|Settlement Disruption Event}}. | |||
:(B) '''Effect of {{euaprov|Settlement Disruption Event}}''': If a {{euaprov|Settlement Disruption Event}} occurs, the obligations of both parties which would otherwise be required to be performed with respect to the {{euaprov|EU Emissions Allowance Transaction}}(s) affected by the {{euaprov|Settlement Disruption Event}} will be suspended for the duration of the {{euaprov|Settlement Disruption Event}} and, subject to (d)(i)(4)(D) (Continuing Settlement Disruption Event) below, will not be required to be performed until the {{euaprov|Settlement Disruption Event}} is overcome or ceases to exist. During the continuation of the {{euaprov|Settlement Disruption Event}}, the party affected by the {{euaprov|Settlement Disruption Event}} shall continue to use all reasonable endeavours to overcome the {{euaprov|Settlement Disruption Event}}. | |||
:(C) '''{{euaprov|Settlement Disruption Event}} Delayed Performance''': Subject to Part (d)(i)(4)(D)(''{{euaprov|Continuing Settlement Disruption Event}}'') below, upon the {{euaprov|Settlement Disruption Event}} being overcome or ceasing to subsist, both parties will be required, as soon as reasonably practicable but not later than the second {{euaprov|Delivery Business Day}} following the date upon which the {{euaprov|Settlement Disruption Event}} has been overcome or ceases to exist, to resume full performance of their obligations under this Agreement in respect of the relevant {{euaprov|EU Emissions Allowance Transaction}}(s) (including, for the avoidance of doubt, any suspended obligations). | |||
:(D) '''Continuing {{euaprov|Settlement Disruption Event}}''': In respect of an {{euaprov|EU Emissions Allowance Transaction}} affected by a {{euaprov|Settlement Disruption Event}}, where the {{euaprov|Settlement Disruption Event}} continues: | |||
::(I) during the period ending 9 {{euaprov|Delivery Business Day}}s after the original date that, but for the {{euaprov|Settlement Disruption Event}}, would have been the {{euaprov|Delivery Date}} for an {{euaprov|EU Emissions Allowance Transaction}}; or | |||
::(II) if such 9 {{euaprov|Delivery Business Day}} period would end after the {{euaprov|Reconciliation Deadline}} on or immediately following the original date that, but for the {{euaprov|Settlement Disruption Event}}, would have been the {{euaprov|Delivery Date}} for an {{euaprov|EU Emissions Allowance Transaction}}, during the period ending on that {{euaprov|Reconciliation Deadline}}; or | |||
::(III) if such 9 {{euaprov|Delivery Business Day}} period would end after the day that is 3 {{euaprov|Delivery Business Day}}s preceding the {{euaprov|End of Phase Reconciliation Deadline}} on or immediately following the original date that, but for the {{euaprov|Settlement Disruption Event}}, would have been the {{euaprov|Delivery Date}} for an {{euaprov|EU Emissions Allowance Transaction}}, during the period ending on the day that is 3 {{euaprov|Delivery Business Day}}s preceding that {{euaprov|End of Phase Reconciliation Deadline}}, | |||
:then on that 9th {{euaprov|Delivery Business Day}}, {{euaprov|Reconciliation Deadline}} or day that is 3 {{euaprov|Delivery Business Day}}s preceding the {{euaprov|End of Phase Reconciliation Deadline}} (as the case may be), an [Additional Termination Event][Illegality]<ref>If the form of Master Agreement in which this Part is included is a {{1992ma}} the parties should specify “{{isdaprov|Additional Termination Event}}” or, if the form of Master Agreement which the Confirmation supplements is an {{2002ma}} the parties should specify “{{isdaprov|Illegality}}”.</ref> shall be deemed to have occurred in respect of which the relevant {{euaprov|EU Emissions Allowance Transaction}} is the sole Affected Transaction, both parties are Affected Parties[, no Waiting Period will apply] and, if an {{isdaprov|Early Termination Date}} results from that {{isdaprov|Termination Event}}, then, for purposes of determining any amount payable under Section {{isdaprov|6(e)}} in respect of that {{isdaprov|Early Termination Date}}: | |||
::(i) if “'''{{euaprov|Payment on Termination for Settlement Disruption}}'''” is specified to be applicable in the Annex to this Part 5 or the Confirmation for the relevant {{euaprov|EU Emissions Allowance Transaction}}, it will be deemed that the requirement to perform the suspended obligations resumed on the {{isdaprov|Early Termination Date}}; or | |||
::(ii) if “'''{{euaprov|Payment on Termination for Settlement Disruption}}'''” is specified to be inapplicable in the Annex to this Part or the Confirmation for the relevant {{euaprov|EU Emissions Allowance Transaction}}, it will be deemed that the parties had no further delivery or payment obligations in respect of the {{euaprov|EU Emissions Allowance Transaction}} after the occurrence of the {{euaprov|Settlement Disruption Event}} (other than in respect of any payment due by one party in connection with delivery obligations already performed by the other party); provided, however, that | |||
:::(i) {{euaprov|Delivering Party}} shall promptly refund to {{euaprov|Receiving Party}} any amount that may have been paid by {{euaprov|Receiving Party}} in respect of the {{euaprov|EU Emissions Allowance Transaction}} that is an {{euaprov|Allowance Forward Transaction}} or a Call and | |||
:::(ii) {{euaprov|Receiving Party}} shall promptly refund to {{euaprov|Delivering Party}} any amount that may have been paid by {{euaprov|Delivering Party}} in respect of an {{euaprov|EU Emissions Allowance Transaction}} that is a {{euaprov|Put}} (in each case, other than in respect of delivered {{euaprov|Allowance}}s) together with interest on that amount in the same currency as that amount for the period from (and including) the date that amount was paid to (but excluding) the date of termination of such {{euaprov|EU Emissions Allowance Transaction}}, at the rate certified by the party required to refund the amount to be a rate offered to such party by a major bank in a relevant interbank market for overnight deposits in the applicable currency, such bank to be selected in good faith by that party for purposes of obtaining a representative rate that will reasonably reflect conditions prevailing at the time in the relevant market. | |||
{{euaprov|(d)(i)(5)}} '''{{euaprov|Suspension Event}}''' <Br> | |||
:(A) '''Notification of {{euaprov|Suspension Event}}''': Upon the occurrence of a {{euaprov|Suspension Event}}, the party affected by the {{euaprov|Suspension Event}} shall, as soon as reasonably practicable, notify the other party in writing of the commencement of the {{euaprov|Suspension Event}}. To the extent available to the party affected by the {{euaprov|Suspension Event}}, it shall also provide details of the {{euaprov|Suspension Event}} including a non-binding estimate of the duration of its inability to perform its obligations due to the {{euaprov|Suspension Event}}. | |||
:(B) '''Effect of {{euaprov|Suspension Event}}''': Where a {{euaprov|Suspension Event}} occurs, the obligations of both parties which would otherwise be required to be performed with respect to the {{euaprov|EU Emissions Allowance Transaction}}(s) affected by the {{euaprov|Suspension Event}} will be suspended for the duration of the {{euaprov|Suspension Event}} and, subject to Part (d)(i)(5)(D)(Continuing {{euaprov|Suspension Event}}) below, will not be required to be performed until the {{euaprov|Suspension Event}} ceases to exist. | |||
:(C) '''{{euaprov|Suspension Event}} Delayed Performance''': Subject to Part (d)(i)(5)(D)(Continuing {{euaprov|Suspension Event}}) below, upon the {{euaprov|Suspension Event}} ceasing to exist, both parties will be required to resume full performance of their obligations under this Agreement in respect of the relevant {{euaprov|EU Emissions Allowance Transaction}} (including, for the avoidance of doubt, any suspended obligations) as soon as possible but no later than the day that is the earlier of: (i) the tenth {{euaprov|Delivery Business Day}} following the date on which the {{euaprov|Suspension Event}} ceases to exist; and (ii) 3 {{euaprov|Delivery Business Day}}s prior to the {{euaprov|End of Phase Reconciliation Deadline}} (the “{{euaprov|Delayed Delivery Date}}”). | |||
:In the event that the {{euaprov|Allowances to be Delivered}} are delivered to {{euaprov|Receiving Party}} on or before the {{euaprov|Delayed Delivery Date}} following the occurrence of a {{euaprov|Suspension Event}} as contemplated by Part (d)(i)(5)(B)(Effect of a {{euaprov|Suspension Event}}) above, {{euaprov|Receiving Party}} agrees to pay {{euaprov|Delivering Party}} on the {{euaprov|Delayed Payment Date}}: | |||
::(I) for the purposes of an {{euaprov|Allowance Forward Transaction}}, an amount equal to the sum of: (X) {{euaprov|Allowance Purchase Price}} multiplied by the {{euaprov|Number of Allowances}} delivered on or before the relevant {{euaprov|Delayed Delivery Date}}; and (Y) the {{euaprov|Cost of Carry Amount}}; or | |||
::(II) for the purposes of an {{euaprov|Allowance Option Transaction}}, an amount equal to the sum of: (X) the {{euaprov|Allowance Strike Price}} multiplied by the {{euaprov|Number of Allowances}} delivered on or before the relevant {{euaprov|Delayed Delivery Date}}; and (Y) the {{euaprov|Cost of Carry Amount}}. | |||
:[[For the avoidance of doubt]], the {{euaprov|Cost of Carry Amount}} shall be identified in the relevant {{euaprov|VAT Invoice}} sent to {{euaprov|Receiving Party}}. | |||
:(D) '''{{euaprov|Continuing Suspension Event}}''': Where: | |||
::(I) a {{euaprov|Suspension Event}} continues to exist on the {{euaprov|Long-Stop Date}}, then an [Additional Termination Event]/[Illegality] shall be deemed to have occurred in respect of which the relevant {{euaprov|EU Emissions Allowance Transaction}} is the sole Affected Transaction [,]/[and] both parties are Affected Parties [and no Waiting Period will apply]. The parties agree that the {{euaprov|Long-Stop Date}} will be the Early Termination Date for the purposes of the relevant {{euaprov|EU Emissions Allowance Transaction}}. For purposes of determining any amount payable under Section 6(e) in respect of that Early Termination Date, it will be deemed that the parties had no further delivery or payment obligations in respect of the {{euaprov|EU Emissions Allowance Transaction}} after the occurrence of the {{euaprov|Suspension Event}} (other than in respect of any payment due by one party in connection with delivery obligations already performed by the other party); provided, however, that (i) {{euaprov|Delivering Party}} shall promptly refund to {{euaprov|Receiving Party}} any amount that may have been paid by {{euaprov|Receiving Party}} in respect of the {{euaprov|EU Emissions Allowance Transaction}} that is an {{euaprov|Allowance Forward Transaction}} or a Call and (ii) {{euaprov|Receiving Party}} shall promptly refund to {{euaprov|Delivering Party}} any amount that may have been paid by {{euaprov|Delivering Party}} in respect of an {{euaprov|EU Emissions Allowance Transaction}} that is a Put (in each case, other than in respect of delivered Allowances) together with interest on that amount in the same currency as that amount for the period from (and including) the date that amount was paid to (but excluding) the date of termination of such {{euaprov|EU Emissions Allowance Transaction}}, at the rate certified by the party required to refund the amount to be a rate offered to such party by a major bank in a relevant interbank market for overnight deposits in the applicable currency, such bank to be selected in good faith by that party for purposes of obtaining a representative rate that will reasonably reflect conditions prevailing at the time in the relevant market. <br> | |||
{{euaprov|(d)(ii)}} '''{{euaprov|Failure to Deliver}}'''.<br> | {{euaprov|(d)(ii)}} '''{{euaprov|Failure to Deliver}}'''.<br> | ||
{{ | {{euaprov|(d)(ii)(1)}} '''{{eqderivprov|Failure to Deliver by Delivering Party}}'''<br> | ||
{{ | If the failure to deliver occurs other than as a result of the failure of {{euaprov|Receiving Party}} to comply with the {{euaprov|Requirements under the Scheme}} as specified below, the existence of an {{euaprov|Illegality}}, the existence of a {{euaprov|Settlement Disruption Event}}, the existence of a {{euaprov|Suspension Event}} or an abandonment of the Scheme as described in Part [7]{{euaprov|(d)(iv)(1)}}, the {{euaprov|Payment Date}} will be postponed and {{euaprov|Receiving Party}} may, by notice to {{euaprov|Delivering Party}}, require {{euaprov|Delivering Party}} to remedy such failure, and the following provisions shall apply. <br> | ||
{{ | :(A) '''{{euaprov|Failure to Deliver Remedied}}''': If {{euaprov|Delivering Party}} delivers the {{euaprov|Allowances to be Delivered}} on or before the {{euaprov|Final Delivery Date}}: <br> | ||
::(X) in respect of an {{euaprov|Allowance Forward Transaction}}, {{euaprov|Receiving Party}} shall pay to {{euaprov|Delivering Party}} on the {{euaprov|Payment Date}} an amount equal to the {{euaprov|Allowance Purchase Price}} multiplied by the {{euaprov|Number of Allowances}} and, in respect of an {{euaprov|Allowance Option Transaction}}, {{euaprov|Receiving Party}} shall pay to {{euaprov|Delivering Party}} on the {{euaprov|Payment Date}} an amount equal to the {{euaprov|Allowance Strike Price}} multiplied by the number of {{euaprov|Allowances to be Delivered}} (and, in each case, for purposes of determining the {{euaprov|Payment Date}}, the date of actual delivery shall be deemed to be the {{euaprov|Delivery Date}}); and | |||
::(Y) {{euaprov|Delivering Party}} shall pay to {{euaprov|Receiving Party}} on the {{euaprov|Payment Date}} (determined in accordance with Part [7]{{euaprov|(d)(ii)(1)}}(A)(X) above) interest on an amount equal to the number of {{euaprov|Allowances}} that were required to be delivered on the {{euaprov|Delivery Date}} (but which were not delivered on such date) multiplied by either the {{euaprov|Allowance Purchase Price}} (in respect of an {{euaprov|Allowance Forward Transaction}}) or the {{euaprov|Allowance Strike Price}} (in respect of an {{euaprov|Allowance Option Transaction}}) for the period from (and including) the original {{euaprov|Delivery Date}} to (but excluding) the date of actual delivery at the {{euaprov|Default Rate}}.<br> | |||
:(B) '''{{euaprov|Failure to Deliver Not Remedied}}''': If the failure is not remedied on or before the {{euaprov|Final Delivery Date}}:<br> | |||
::(X) if “{{euaprov|Excess Emissions Penalty}}” is specified not to be applicable in the Annex to this Part [7] or the {{euaprov|Confirmation}} for the relevant {{euaprov|EU Emissions Allowance Transaction}}, or if “{{euaprov|Excess Emissions Penalty}}” is specified to be applicable in the Annex to this Part [7] or the Confirmation for the relevant {{euaprov|EU Emissions Allowance Transaction}} and an {{euaprov|EEP Risk Period}} is specified in that Confirmation but the {{euaprov|Delivery Date}} does not fall within that {{euaprov|EEP Risk Period}}, {{euaprov|Receiving Party}} may, by written notice to {{euaprov|Delivering Party}}, terminate the parties’ obligations under “{{euaprov|Physical Settlement}}” above and {{euaprov|Delivering Party}} shall pay to {{euaprov|Receiving Party}} an amount determined in accordance with paragraph (1) of {{euaprov|Receiving Party’s Replacement Cost}} (if a positive number) on the first succeeding {{euaprov|Business Day}}, adjusted to take into account any amount previously paid (which, for the avoidance of doubt, shall not include any Premium paid by the Buyer in respect of an {{euaprov|Allowance Option Transaction}}) by {{euaprov|Receiving Party}} to {{euaprov|Delivering Party}} in respect of the relevant {{euaprov|EU Emissions Allowance Transaction}}; or | |||
::(Y) if “{{euaprov|Excess Emissions Penalty}}” is specified to be applicable in the Annex to this Part [7] or the Confirmation for the relevant {{euaprov|EU Emissions Allowance Transaction}} and, if an {{euaprov|EEP Risk Period}} is specified in the Confirmation for the relevant {{euaprov|EU Emissions Allowance Transaction}}, the {{euaprov|Delivery Date}} falls within that {{euaprov|EEP Risk Period}} for the relevant {{euaprov|EU Emissions Allowance Transaction}}, {{euaprov|Receiving Party}} may, by written notice to {{euaprov|Delivering Party}}, terminate the parties’ obligations under “Physical Settlement” above and {{euaprov|Delivering Party}} shall pay to {{euaprov|Receiving Party}} an amount determined in accordance with paragraph (2) of {{euaprov|Receiving Party’s Replacement Cost}} (if a positive number) on the first Business Day following the day on which {{euaprov|Receiving Party}} is able to effect a {{euaprov|Buy-In}} (which may be a {{euaprov|Buy-In}}, on any such date, of less than the entire number of {{euaprov|Undelivered Allowances}}) if and to the extent that paragraphs (2)(A)(I) or (2)(A)(II)(X) of {{euaprov|Receiving Party’s Replacement Cost}} apply, or the first Business Day following the day on which {{euaprov|Receiving Party}} is able to effect a purchase of {{euaprov|Allowances}} in accordance with paragraph (2)(A)(II)(Y) of {{euaprov|Receiving Party’s Replacement Cost}}, if and to the extent that paragraph applies, in either case adjusted to take into account any amount previously paid (which, [[for the avoidance of doubt]], shall not include any Premium paid by the Buyer in respect of an {{euaprov|Allowance Option Transaction}}) by {{euaprov|Receiving Party}} to {{euaprov|Delivering Party}} in respect of the {{euaprov|EU Emissions Allowance Transaction}}; or | |||
::(Z) if “Failure to Deliver (Alternative Method)” is specified to be applicable in the Annex to this Part [7] or the {{euaprov|Confirmation}} for the relevant {{euaprov|EU Emissions Allowance Transaction}}: | |||
:::(aa) {{euaprov|Delivering Party}} shall pay to {{euaprov|Receiving Party}}, on the first succeeding Business Day, an amount determined in accordance with paragraph (3) of {{euaprov|Receiving Party’s Replacement Cost}} (if a positive number), adjusted to take into account any amount previously paid (which, for the avoidance of doubt, shall not include any Premium paid by the Buyer in respect of an {{euaprov|Allowance Option Transaction}}) by {{euaprov|Receiving Party}} to {{euaprov|Delivering Party}} in respect of the relevant {{euaprov|EU Emissions Allowance Transaction}}, and upon payment of such amount, Delivering Party’s obligation to deliver to {{euaprov|Receiving Party}} the {{euaprov|Allowances to be Delivered}} shall be fully discharged and terminated; and | |||
:::(bb) if “{{euaprov|Excess Emissions Penalty}}” is specified to be applicable in the Annex to this Part [7] or the Confirmation for the relevant {{euaprov|EU Emissions Allowance Transaction}}, {{euaprov|Delivering Party}} shall pay to {{euaprov|Receiving Party}} the amount, if any, determined in accordance with the provisions of Part [7] (d)(xi)(Failure to Deliver (Alternative Method) – EEP Applicable) below on the date determined in accordance with those provisions. <br> | |||
:(2) '''{{euaprov|Failure to Comply by Receiving Party}}''': If the failure to deliver occurs as a result of the failure of {{euaprov|Receiving Party}} to comply with the {{euaprov|Requirements under the Scheme}} as specified below, the {{euaprov|Payment Date}} will be postponed and {{euaprov|Delivering Party}} may, by notice to {{euaprov|Receiving Party}}, require {{euaprov|Receiving Party}} so to comply, and the following provisions shall apply. | |||
::(A) '''{{euaprov|Failure to Comply Remedied}}''': If {{euaprov|Receiving Party}} complies on or before the {{euaprov|Final Compliance Date}}: | |||
:::(X) {{euaprov|Delivering Party}} shall deliver to {{euaprov|Receiving Party}} the {{euaprov|Allowances to be Delivered}} and, in respect of an {{euaprov|Allowance Forward Transaction}}, {{euaprov|Receiving Party}} shall pay to {{euaprov|Delivering Party}} on the {{euaprov|Payment Date}} an amount equal to the {{euaprov|Allowance Purchase Price}} multiplied by the {{euaprov|Number of Allowances}} and, in respect of an {{euaprov|Allowance Option Transaction}}, {{euaprov|Receiving Party}} shall pay to {{euaprov|Delivering Party}} on the Payment Date an amount equal to the {{euaprov|Allowance Strike Price}} multiplied by the number of {{euaprov|Allowances to be Delivered}} (and, in each case, for purposes of determining the Payment Date, the date of actual delivery shall be deemed to be the {{euaprov|Delivery Date}}); and | |||
:::(Y) {{euaprov|Receiving Party}} shall pay to {{euaprov|Delivering Party}} on the {{euaprov|Payment Date}} (determined in accordance with Part {{euaprov|(d)(ii)(2)}}(A)(X) above) interest on an amount equal to the number of {{euaprov|Allowances}} that were required to be delivered on the {{euaprov|Delivery Date}} (but which were not delivered on that date) multiplied by the {{euaprov|Allowance Purchase Price}} or {{euaprov|Allowance Strike Price}}, as applicable, for the period from (and including) the original {{euaprov|Delivery Date}} to (but excluding) the date of actual delivery at the {{euaprov|Default Rate}}. | |||
::(B) '''{{euaprov|Failure to Comply Not Remedied}}''': If {{euaprov|Receiving Party}} fails to comply on or before the {{euaprov|Final Compliance Date}}, {{euaprov|Delivering Party}} may, by written notice to {{euaprov|Receiving Party}}, terminate the parties’ obligations under “{{euaprov|Physical Settlement}}” above and {{euaprov|Receiving Party}} shall pay to {{euaprov|Delivering Party}} an amount equal to {{euaprov|Delivering Party’s Replacement Cost}} (if a positive number) on the first succeeding {{euaprov|Business Day}}, adjusted to take into account any amount previously paid (which for the avoidance of doubt, shall not include any Premium paid by the Buyer in respect of an {{euaprov|Allowance Option Transaction}}) by {{euaprov|Receiving Party}} to {{euaprov|Delivering Party}} in respect of the relevant {{euaprov|EU Emissions Allowance Transaction}}. <br> | |||
{{euaprov|(d)(ii)(3)}} '''{{euaprov|EEP Amount}}''': Subject to the paragraph below, if “{{euaprov|Excess Emissions Penalty}}” is specified to be applicable in the Annex to this Part [7] or the Confirmation for the relevant {{euaprov|EU Emissions Allowance Transaction}} and as a result of {{euaprov|Delivering Party}}’s failure to deliver the {{euaprov|Allowances to be Delivered}} (in whole or in part) on the {{euaprov|Delivery Date}} {{euaprov|Receiving Party}} becomes liable to pay any {{euaprov|EEP Amount}}, then {{euaprov|Receiving Party}} shall provide to {{euaprov|Delivering Party}}, upon its reasonable request, evidence to the reasonable satisfaction of {{euaprov|Delivering Party}}: | |||
:(A) that {{euaprov|Receiving Party}} has incurred an {{euaprov|EEP Amount}} consequent on Delivering Party’s failure to deliver the {{euaprov|Allowances to be Delivered}} (in whole or in part); and | |||
:(B) the extent to which the requirement for {{euaprov|Receiving Party}} to pay any {{euaprov|EEP Amount}} results from Delivering Party’s failure to make such delivery; and | |||
:(C) that {{euaprov|Receiving Party}} could not have used Allowances to which it had title in any {{euaprov|Holding Account}}(s) in any {{euaprov|Registry}} in order to avoid or reduce its liability to pay any {{euaprov|EEP Amount}} which it claims from {{euaprov|Delivering Party}} as part of {{euaprov|Receiving Party’s Replacement Cost}}. <br> | |||
{{euaprov|Delivering Party}}’s obligation to pay any {{euaprov|EEP Amount}} in accordance with “{{euaprov|Failure to Deliver}}” under Part [7] of the Schedule to this Agreement is subject to {{euaprov|Receiving Party}}’s overriding obligation to use its reasonable endeavours to avoid becoming liable for such {{euaprov|EEP Amount}} or, when liable, to mitigate the payment obligation in relation to such {{euaprov|EEP Amount}} and to allocate any such {{euaprov|EEP Amount}} pro rata between all counterparties of {{euaprov|Receiving Party}} that have failed to deliver Allowances to {{euaprov|Receiving Party}} provided, however, that where {{euaprov|Receiving Party}} confirms it has been unable to avoid becoming liable for any {{euaprov|EEP Amount}}, it shall be for {{euaprov|Delivering Party}} to show that it has been as a result of {{euaprov|Receiving Party}} failing to use its reasonable endeavours to do so. <br> | |||
{{euaprov|(d)(iii)}} '''{{euaprov|Partial Settlement}}''' <br> | {{euaprov|(d)(iii)}} '''{{euaprov|Partial Settlement}}''' <br> | ||
If, on the {{euaprov|Delivery Date}}, {{euaprov|Delivering Party}} delivers to {{euaprov|Receiving Party}} fewer {{euaprov|Allowances}} than the {{euaprov|Allowances to be Delivered}} (such shortfall the “'''{{euaprov|Allowance Shortfall}}'''”), {{euaprov|Receiving Party}}’s obligation to pay pursuant to {{euaprov|Physical Settlement}} above shall be reduced by an amount equal to the {{euaprov|Allowance Shortfall}} multiplied by either the {{euaprov|Allowance Purchase Price}} (in respect of an {{euaprov|Allowance Forward Transaction}}) or the {{euaprov|Allowance Strike Price}} (in respect of an {{euaprov|Allowance Option Transaction}}), and the provisions of “{{euaprov|Failure to Deliver}}” above will apply in respect of the {{euaprov|Allowance Shortfall}} (with references to {{euaprov|Number of Allowances}} (in the case of an {{euaprov|Allowance Forward Transaction}}) and {{euaprov|Allowances to be Delivered}} (in the case of an {{euaprov|Allowance Option Transaction}}) being read as references to the {{euaprov|Allowance Shortfall}}). <br> | If, on the {{euaprov|Delivery Date}}, {{euaprov|Delivering Party}} delivers to {{euaprov|Receiving Party}} fewer {{euaprov|Allowances}} than the {{euaprov|Allowances to be Delivered}} (such shortfall the “'''{{euaprov|Allowance Shortfall}}'''”), {{euaprov|Receiving Party}}’s obligation to pay pursuant to {{euaprov|Physical Settlement}} above shall be reduced by an amount equal to the {{euaprov|Allowance Shortfall}} multiplied by either the {{euaprov|Allowance Purchase Price}} (in respect of an {{euaprov|Allowance Forward Transaction}}) or the {{euaprov|Allowance Strike Price}} (in respect of an {{euaprov|Allowance Option Transaction}}), and the provisions of “{{euaprov|Failure to Deliver}}” above will apply in respect of the {{euaprov|Allowance Shortfall}} (with references to {{euaprov|Number of Allowances}} (in the case of an {{euaprov|Allowance Forward Transaction}}) and {{euaprov|Allowances to be Delivered}} (in the case of an {{euaprov|Allowance Option Transaction}}) being read as references to the {{euaprov|Allowance Shortfall}}). <br> | ||