Delay Damages; Termination Upon Delay. (a) Subject to Section 5.5, in the event that the conditions precedent to the occurrence of the Initial Delivery Date set forth in Section 5.3 are not satisfied or waived on or prior to the Guaranteed Initial Delivery Date, for each day (or part thereof) beginning with the day after the Guaranteed Initial Delivery Date through and including the date on which the Initial Delivery Date occurs, Seller will be required to pay Buyer daily liquidated damages (“Delay Damages”) in the amount of (i) $34,995 per day, to the extent the Capacity as of the Guaranteed Initial Delivery Date shall be less than 50% of the Project Capacity), or (ii) to the extent the Capacity as of the Guaranteed Initial Delivery Date shall be equal to or greater than 50% of the Project Capacity, but less than the total Project Capacity, the amount per day equal to the product of $34,995 multiplied by a fraction, the numerator of which shall be the difference between the Project Capacity and the Capacity as of the Guaranteed Initial Delivery Date, and the denominator of which shall be the Project Capacity. The maximum amount of Delay Damages payable by Seller shall be $19,177,260 (“Maximum Delay Damages”) and payment thereof shall be made in accordance with Section 6.1 and 6.5. If (x) the Initial Delivery Date is not achieved by the Guaranteed Initial Delivery Date solely due to delays in obtaining Permits as set forth on Schedule 3 or litigation initiated by third parties, in each case that has the direct effect of preventing Seller from reaching the Milestones set forth on Schedule 1 hereto, and (y) Seller has taken commercially reasonable steps to resolve any such permitting or litigation delay (in each case, as reasonably demonstrated to Buyer’s satisfaction), such Delay Damages shall accrue from and after the Guaranteed Initial Delivery Date in accordance with the immediately preceding paragraph, but shall not be due and payable unless Seller fails to achieve the Initial Delivery Date by the Date Certain, in which case such accrued Delay Damages that would have otherwise been immediately payable by Seller but for such exception shall be due and payable to Buyer on the Date Certain in addition to the Termination Fee described below. Any Delay Damages accrued pursuant to the previous sentence shall be secured in favor of Buyer at the time of accrual by the posting by Seller within five (5) Business Days after the Guaranteed Initial Delivery Date of either (a) a satisfactory Letter of Credit at all times in an amount equal to such accruals or (b) cash Collateral (deposited in an account with a Qualified Issuer (such account being the “Delay Damages Account”)) equal to such accruals pursuant to a customary account control agreement creating a valid and perfected first priority security interest therein in favor of Buyer in form and substance reasonably acceptable to Buyer (the “Delay Damages Account Control Agreement”). If the Initial Delivery Date does not occur by the Date Certain, Buyer may thereafter withdraw from the Delay Damages Account or draw on the Letter of Credit an amount (as liquidated damages) equal to the Delay Damages accrued in favor of Buyer pursuant to the terms of this paragraph but not yet paid to Buyer by Seller (the “Accrued Delay Damages”). (b) In addition to any Delay Damages payable by Seller pursuant to Section 5.4(a) above, in the event that Seller has not satisfied the conditions precedent to the Initial Delivery Date by May 31, 2016 (the “Date Certain”), on such date or at any time thereafter Buyer may elect to terminate the Agreement upon thirty (30) days prior Notice to Seller. Any such termination by Buyer shall be without further liability or obligation of any kind on the part of Buyer, and the Seller shall pay as liquidated damages to Buyer a termination fee (the “Termination Fee”) equal to $15,000,000. (For the avoidance of doubt, upon payment of such Termination Fee, all Development Period Security shall immediately be released and cancelled.) Notwithstanding the foregoing, to the extent that (x) the actual Capacity of the Project is at least sixty percent (60%) of the Project Capacity by the effective date of the termination described above in this Section 5.4(b) and (y) all other conditions to the Initial Delivery Date set forth in Section 5.3 have been satisfied in full, then (A) Buyer’s termination right described above in this Section 5.4(b) shall only be applicable to that portion of Project Capacity that has not yet reached a Unit Group Commercial Operation Date as of such effective date, and (B) the Seller shall be obligated to pay only the pro rata portion of the Termination Fee applicable to that portion of the Project Capacity that has not yet reached a Unit Group Commercial Operation Date (as of the effective date of such termination). The non-occurrence of the Initial Delivery Date by the Date Certain shall constitute an Event of Default, the sole remedy for which event is set forth in this Section 5.4(b). In the alternative, notwithstanding such Event of Default, Buyer shall have the option to extend the end date of the Services Term by a period equal to the difference between the Guaranteed Initial Delivery Date and the actual Initial Delivery Date. For the avoidance of doubt, (i) the Maximum Delay Damages shall apply to limit aggregate Delay Damages, but shall not limit payment of the full amount of the Termination Fee as liquidated damages; and (ii) notwithstanding anything herein to the contrary, in the event of a termination pursuant to this Section 5.4(b), under no circumstances shall Buyer be entitled to collect amounts in excess of the sum of the Termination Fee, the Delay Damages, and any other amounts due under this Agreement at the time of termination, or that may become due after termination pursuant to terms hereof. (c) If only a portion of the Project is terminated pursuant to Sections 5.4(b), 5.4(e), 5.7 or 12.4, the Project Capacity thereafter shall be equal to the aggregate nameplate capacity rating of the portion of the Project that is not terminated. (d) On or after the Guaranteed Initial Delivery Date, to the extent Seller reasonably determines that the Project will not achieve the Initial Delivery Date with respect to one hundred percent (100%) of the Project Capacity (or such lesser amount of Project Capacity to the extent Project Capacity is reduced as permitted pursuant to the terms of this Agreement) prior to the Date Certain despite Seller’s reasonable good faith efforts to achieve the Initial Delivery Date prior to such date, Seller may terminate the Agreement prior to the end of the twelve (12) month period commencing on the Guaranteed Initial Delivery Date and ending on the Date Certain by paying to Buyer the full Termination Fee and any Delay Damages accrued and unpaid prior to the date of termination (such amounts being Buyer’s sole remedy for such termination by Seller). (e) Notwithstanding the foregoing, if a Force Majeure Event of the general type set forth in items (1) through (4) of the definition of a Force Majeure Event hereunder has delayed the Project Commercial Operation Date with respect to less than 40% of the total Project Capacity beyond the Date Certain (but a minimum Capacity of 60% of the Project Capacity shall have achieved the Commercial Operation Date by the Date Certain), Seller may specify an additional number of Units in excess of the Units that have already reached a Unit Group Commercial Operation Date by the Date Certain (but in no event shall such additional Units exceed the number of MWs of the total Project Capacity affected by such Force Majeure Event) representing the additional Units of the Project Seller intends to reach a Commercial Operation Date by May 31, 2017 (such Units, the “Post Date Certain Units”). From and after the Date Certain, Seller shall exercise reasonable good faith efforts to cause the Post Date Certain Units to reach a Commercial Operation Date by May 31, 2017. Applicable performance standards and obligations of Buyer and Seller shall be adjusted on the Date Certain to reflect the number of Units that have reached a Commercial Operation Date on or prior to the Date Certain, and shall be further adjusted on the earlier of the date on which the entire Project (as contemplated in Appendix 1) has achieved a Commercial Operation Date or May 31, 2017 to further reflect the final Project size of the Units that have reached a Commercial Operation Date. Payment of a pro rata portion of the Termination Fee associated with the Post Date Certain Units shall be due and payable within five (5) days after May 31, 2017 for the portion of the Post Date Certain Units not achieving a Commercial Operation Date by May 31, 2017, and within five (5) days after May 31, 2017, Seller shall pay to Buyer Daily Delay Damages with respect to the Post Date Certain Units for the period of time between the Date Certain and May 31, 2017 that such Units had not achieved a Commercial Operation Date. For the avoidance of doubt, the aggregate total of any such Delay Damages and all other Delay Damages incurred by Seller pursuant to Section 5.4 shall not be in excess of the Maximum Delay Damages amount. Seller shall further provide Buyer with a schedule of the projected Commercial Operation Dates of any Units being placed in service after the Date Certain pursuant to this provision and the projected quantities of Products to be delivered under the Agreement from such Units. Such schedule shall be updated on a bi-weekly basis beginning ninety (90) days prior to the Date Certain and ending on May 31, 2017.
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Delay Damages; Termination Upon Delay. (a) Subject to Section 5.5, in the event that the conditions precedent to the occurrence of the Initial Delivery Date set forth in Section 5.3 are not satisfied or waived on or prior to the Guaranteed Initial Delivery Date, for each day (or part thereof) beginning with the day after the Guaranteed Initial Delivery Date through and including the date on which the Initial Delivery Date occurs, Seller will be required to pay Buyer daily liquidated damages (“Delay Damages”) in the amount of (i) $34,995 69,990 per day, to the extent the Capacity as of the Guaranteed Initial Delivery Date shall be less than 242 MWs (i.e., 50% of the Project CapacityCapacity (i.e., 225 MW) plus 17 MW), or (ii) to the extent the Capacity as of the Guaranteed Initial Delivery Date shall be equal to or greater than 50% of the Project Capacity242 MWs, but less than the total Project Capacity, the amount per day equal to the product of $34,995 69,990 multiplied by a fraction, the numerator of which shall be the difference between the Project Capacity and the Capacity as of the Guaranteed Initial Delivery Date, and the denominator of which shall be the Project CapacityCapacity (“Delay Damages”). The maximum amount of Delay Damages payable by Seller shall be $19,177,260 38,354,520 (“Maximum Delay Damages”) and payment thereof shall be made in accordance with Section 6.1 and 6.5. If (x) the Initial Delivery Date is not achieved by the Guaranteed Initial Delivery Date solely due to delays in obtaining Permits as set forth on Schedule 3 or litigation initiated by third parties, in each case that has the direct effect of preventing Seller from reaching the Milestones set forth on Schedule 1 hereto, and (y) Seller has taken commercially reasonable steps to resolve any such permitting or litigation delay (in each case, as reasonably demonstrated to Buyer’s satisfaction), such Delay Damages shall accrue from and after the Guaranteed Initial Delivery Date in accordance with the immediately preceding paragraph, but shall not be due and payable unless Seller fails to achieve the Initial Delivery Date by the Date Certain, in which case such accrued Delay Damages that would have otherwise been immediately payable by Seller but for such exception shall be due and payable to Buyer on the Date Certain in addition to the Termination Fee described below. Any Delay Damages accrued pursuant to the previous sentence shall be secured in favor of Buyer at the time of accrual by the posting by Seller within five (5) Business Days after the Guaranteed Initial Delivery Date of either (a) a satisfactory Letter of Credit at all times in an amount equal to such accruals or (b) cash Collateral (deposited in an account with a Qualified Issuer (such account being the “Delay Damages Account”)) equal to such accruals pursuant to a customary account control agreement creating a valid and perfected first priority security interest therein in favor of Buyer in form and substance reasonably acceptable to Buyer (the “Delay Damages Account Control Agreement”). If the Initial Delivery Date does not occur by the Date Certain, Buyer may thereafter withdraw from the Delay Damages Account or draw on the Letter of Credit an amount (as liquidated damages) equal to the Delay Damages accrued in favor of Buyer pursuant to the terms of this paragraph but not yet paid to Buyer by Seller (the “Accrued Delay Damages”).
(b) In addition to any Delay Damages payable by Seller pursuant to Section 5.4(a) above, in the event that Seller has not satisfied the conditions precedent to the Initial Delivery Date by May 31November 30, 2016 2015 (the “Date Certain”), on such date or at any time thereafter Buyer may elect to terminate the Agreement upon thirty (30) days prior Notice to Seller. Any such termination by Buyer shall be without further liability or obligation of any kind on the part of Buyer, and the Seller shall pay as liquidated damages to Buyer a termination fee (the “Termination Fee”) equal to $15,000,00030,000,000. (For the avoidance of doubt, upon payment of such Termination Fee, all Development Period Security shall immediately be released and cancelled.) Notwithstanding the foregoing, to the extent that (x) the actual Capacity of the Project is at least sixty percent (60%) of the Project Capacity by the effective date of the termination described above in this Section 5.4(b) ), and (y) all other conditions to the Initial Delivery Date set forth in Section 5.3 have been satisfied in full, then (A) Buyer’s termination right described above in this Section 5.4(b) shall only be applicable to that portion of Project Capacity that has not yet reached a Unit Group Commercial Operation Date as of such effective date, and (B) the Seller shall be obligated to pay only the pro rata portion of the Termination Fee applicable to that portion of the Project Capacity that has not yet reached a Unit Group Commercial Operation Date (as of the effective date of such termination). The non-occurrence of the Initial Delivery Date by the Date Certain shall constitute an Event of Default, the sole remedy for which event is set forth in this Section 5.4(b). In the alternative, notwithstanding such Event of Default, Buyer shall have the option to extend the end date of the Services Term by a period equal to the difference between the Guaranteed Initial Delivery Date and the actual Initial Delivery Date. For the avoidance of doubt, (i) the Maximum Delay Damages shall apply to limit aggregate Delay Damages, but shall not limit payment of the full amount of the Termination Fee as liquidated damages; and (ii) notwithstanding anything herein to the contrary, in the event of a termination pursuant to this Section 5.4(b), under no circumstances shall Buyer be entitled to collect amounts in excess of the sum of the Termination Fee, the Delay Damages, and any other amounts due under this Agreement at the time of termination, or that may become due after termination pursuant to terms hereof.
(c) If only a portion of the Project is terminated pursuant to Sections 5.4(b), 5.4(e), 5.7 or 12.4, the Project Capacity thereafter shall be equal to Buyer’s and Seller’s performance standards and obligations set forth in Sections 3.1(a), 3.15, 5.3(a)(i) and Appendix 1 for the aggregate nameplate capacity rating of the remaining portion of the Project that is not terminated.shall be adjusted accordingly on a pro-rata basis to reflect the reduced size of the final Project. By way of example only:
(d) On or after Example 1: If the Guaranteed Initial Delivery Date, to the extent Seller reasonably determines that final Capacity of the Project will not achieve the Initial Delivery Date is 337 MW and a Termination Fee is paid by Seller with respect to one hundred percent (100%) 113 MW of Project Capacity, the following adjustments to the Project Capacity (or such lesser amount of Project Capacity to the extent Project Capacity is reduced as permitted pursuant to the terms of this Agreement) prior to the Date Certain despite Seller’s reasonable good faith efforts to achieve the Initial Delivery Date prior to such date, Seller may terminate the Agreement prior to the end of the twelve (12) month period commencing on the Guaranteed Initial Delivery Date and ending on the Date Certain by paying to Buyer the full Termination Fee and any Delay Damages accrued and unpaid prior to the date of termination (such amounts being Buyer’s sole remedy for such termination by Seller).
(e) Notwithstanding the foregoing, if a Force Majeure Event of the general type set forth in items (1) through (4) of the definition of a Force Majeure Event hereunder has delayed the Project Commercial Operation Date with respect to less than 40% of the total Project Capacity beyond the Date Certain (but a minimum Capacity of 60% of the Project Capacity shall have achieved the Commercial Operation Date by the Date Certain), Seller may specify an additional number of Units in excess of the Units that have already reached a Unit Group Commercial Operation Date by the Date Certain (but in no event shall such additional Units exceed the number of MWs of the total Project Capacity affected by such Force Majeure Event) representing the additional Units of the Project Seller intends to reach a Commercial Operation Date by May 31, 2017 (such Units, the “Post Date Certain Units”). From and after the Date Certain, Seller shall exercise reasonable good faith efforts to cause the Post Date Certain Units to reach a Commercial Operation Date by May 31, 2017. Applicable performance standards and obligations of Buyer and Seller requirements shall be adjusted on the Date Certain to reflect the number of Units that have reached a Commercial Operation Date on or prior to the Date Certain, and shall be further adjusted on the earlier of the date on which the entire Project (as contemplated in Appendix 1) has achieved a Commercial Operation Date or May 31, 2017 to further reflect the final Project size of the Units that have reached a Commercial Operation Date. Payment of a pro rata portion of the Termination Fee associated with the Post Date Certain Units shall be due and payable within five (5) days after May 31, 2017 for the portion of the Post Date Certain Units not achieving a Commercial Operation Date by May 31, 2017, and within five (5) days after May 31, 2017, Seller shall pay to Buyer Daily Delay Damages with respect to the Post Date Certain Units for the period of time between the Date Certain and May 31, 2017 that such Units had not achieved a Commercial Operation Date. For the avoidance of doubt, the aggregate total of any such Delay Damages and all other Delay Damages incurred by Seller pursuant to Section 5.4 shall not be in excess of the Maximum Delay Damages amount. Seller shall further provide Buyer with a schedule of the projected Commercial Operation Dates of any Units being placed in service after the Date Certain pursuant to this provision and the projected quantities of Products to be delivered under the Agreement from such Units. Such schedule shall be updated on a bi-weekly basis beginning ninety (90) days prior to the Date Certain and ending on May 31, 2017.made:
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Sources: Power Purchase Agreement