Common use of Development Period Security Clause in Contracts

Development Period Security. On or before August 1, 2008, Seller shall be required to establish collateral in favor of Buyer by providing Buyer with a Letter of Credit from a Qualified Issuer to secure Seller’s obligations under this Agreement in the period between the Execution Date and the Initial Delivery Date (the “Development Period Security”). The Development Period Security to be provided pursuant to the first sentence of this Section 8.1(a) shall be in an amount equal to three million dollars ($3,000,000) and shall be maintained in full force and effect by Seller until its expiry pursuant to the terms hereof (subject to Section 2.3). By not later than fifteen (15) days after the Effective Date, the amount of the Development Period Security shall be increased to an amount equal to six million dollars ($6,000,000) and shall be maintained in full force and effect by Seller until its expiry pursuant to the terms hereof. In the event Buyer draws on the Development Period Security to pay Delay Damages, Seller shall promptly, and in all events within three (3) Business Days, replenish the amount of the Development Period Security by the amount drawn; provided, however, Seller shall not be required to replenish the Development Period Security in excess of the total amount of the Maximum Delay Damages. Buyer shall have the right to terminate the Agreement and retain the initial installment of the Development Period Security as liquidated damages if Seller fails to provide the increased amount of Development Period Security within fifteen (15) days after the Effective Date as set forth in this Section 8.1(a), and such failure shall be considered an Event of Default of Seller.

Development Period Security. On or before August 1, 2008the Execution Date, Seller shall be required to establish collateral in favor of Buyer by providing Buyer with a Letter of Credit from a Qualified Issuer to secure Seller’s obligations under this Agreement in the period between the Execution Date and the Initial Delivery Date (the “Development Period Security”). The Development Period Security to be provided on the Execution Date pursuant to the first sentence of this Section 8.1(a) shall be in an amount equal to three six million dollars ($3,000,0006,000,000) and shall be maintained in full force and effect by Seller until its expiry pursuant to the terms hereof (subject to Section 2.3). By not later than fifteen (15) days after the Effective Date, the amount of the Development Period Security shall be increased to an amount equal to six twelve million dollars ($6,000,00012,000,000) and shall be maintained in full force and effect by Seller until its expiry pursuant to the terms hereof. In the event Buyer draws on the Development Period Security to pay Delay Damages, Seller shall promptly, and in all events within three (3) Business Days, replenish the amount of the Development Period Security by the amount drawn; provided, however, Seller shall not be required to replenish the Development Period Security in excess of the total amount of the Maximum Delay Damages. Buyer shall have the right to terminate the Agreement and retain the initial installment of the Development Period Security as liquidated damages if Seller fails to provide the increased amount of Development Period Security within fifteen (15) days after the Effective Date as set forth in this Section 8.1(a), and such failure shall be considered an Event of Default of Seller.