Common use of Deficiency Amounts Clause in Contracts

Deficiency Amounts. (i) Any Seller Bond or BOEM Bond issued to the Sellers that fails to meet the requirements as set out in the definition of Seller Bond or BOEM Bond, as applicable, shall not be taken into account in determining whether Purchaser has provided the Decommissioning Security Amount. The amount by which the Decommissioning Security Amount exceeds the penal sum of the Decommissioning Security that Purchaser has provided (calculated as set forth in this Section 7.4(d)(i)), plus the face value of any Backstop Letter of Credit, is referred to herein as the “Deficiency Amount.” (ii) Purchaser shall notify Sellers in writing if, at any time, it has actual knowledge that a Deficiency Amount exists. If, at any time after the Closing Date, a Deficiency Amount exists, Purchaser shall, within forty-five (45) days of the earlier of the provision by any Seller of written notice of the existence of such Deficiency Amount and Purchaser obtaining actual knowledge of the existence of a Deficiency Amount (whether or not Purchaser has notified any Seller thereof) (the “Initial Cure Period”), execute and deliver to Sellers one or more new BOEM Bonds or Seller Bonds, as applicable, compliant with the definitions thereof, such that no Deficiency Amount exists. (iii) To the extent that Purchaser has not eliminated any Deficiency Amount prior to the end of the Initial Cure Period, Purchaser shall, on or before the end of the Initial Cure Period, post or provide to Sellers one or more irrevocable standby multi-draw letters of credit, in form and substance reasonably satisfactory to Sellers, issued by one or more financial institutions reasonably satisfactory to Sellers (with “A-” or better rating with Standard & Poor’s Rating Group), in an aggregate amount equal to the Deficiency Amount. (iv) The aggregate face amount of all such letters of credit posted or provided to Sellers and that are outstanding and may be called by any Seller at any particular time (each, a “Backstop Letter of Credit”) shall be added to the penal sum of any BOEM Bond and Seller Bond in determining whether a Deficiency Amount exists, or continues to exist.