Common use of Development Security Clause in Contracts

Development Security. If the Facility has not achieved Commercial Operation by the Effective Date, Seller shall post and thereafter maintain development security equal to two percent (2%) of the Nominal Contract Value upon execution of this Agreement. The Development Security shall be held by COMPANY as security for Seller meeting the Commercial Operation Date or any other Significant Milestone Schedule as provided in Section 4.3. The Development Security shall be in the form of either a cash deposit or a Letter of Credit as provided for in Section 6.4. The following provisions shall govern disposition of the Development Security: In the event that the Facility achieves Commercial Operation on or prior to the Commercial Operation Date established on the Effective Date, the entire Development Security shall be returned to Seller upon Seller’s posting of credit support as further discussed herein in Article 6. In the event that the Commercial Operation Date is extended pursuant to the provisions of Section 4.4 for a period of 30 days or less and the Facility achieves Commercial Operation on or prior to such extended date, Seller shall be entitled only to a portion of the Development Security equal to the Development Security, multiplied by (1 – (the number of calendar days that the Commercial Operation Date is delayed beyond the original Commercial Operation Date, not to exceed 30 days) divided by 180). The portion of the Development Security retained by COMPANY shall be kept as liquidated damages. In the event that the Commercial Operation Date is not extended pursuant to the provisions of Section 4.4, but the Facility is resized pursuant to the provisions of Section 4.5, Seller shall be entitled only to a portion of the Development Security equal to (i) two percent (2%) times the Nominal Contract Value multiplied by (ii) the ratio of the revised Contract Amount resulting from the resizing to the original Contract Amount prior to the resizing, provided such ratio does not exceed 100%. The remainder of the Development Security shall be kept by COMPANY as liquidated damages. In the event that the Commercial Operation Date is extended pursuant to the provisions of Section 4.4 for a period of 30 days or less and the Seller meets such extended date but the Facility is resized pursuant to the provisions of Section 4.5, Seller shall be entitled only to a portion of the Development Security equal to (i) two percent (2%) times the Nominal Contract Value multiplied by (ii) the ratio of the revised Contract Amount resulting from the resizing to the original Contract Amount prior to the resizing multiplied by (iii) (1 – (the number of calendar days that the Commercial Operation Date is delayed beyond the original Commercial Operation Date, not to exceed 30 days) divided by 180). The remainder of the Development Security shall be kept by COMPANY as liquidated damages. If some or all of the Development Security is to be returned to the Seller under this Section 6.1, it shall be returned within thirty (30) Business Days of the achievement of the Commercial Operation Date, with interest paid only if Seller satisfied the Development Security requirements by providing Cash to COMPANY. Such interest shall be calculated as provided in Section 6.6. In the event the Seller fails to obtain the Commercial Operation Date, as may be extended pursuant to Section 4.4, COMPANY may terminate this Agreement pursuant to Section 9.1 and retain the entire Development Security. In any event if Seller fails to achieve Commercial Operation by 30 days after the Commercial Operation Date the Agreement shall terminate unless further extension is mutually agreed to by the Parties. The Parties acknowledge and agree that it is difficult or impossible to determine with precision the amount of damages that would or might be incurred by COMPANY as a result of the Facility failing to operate by the Commercial Operation Date Milestone. It is understood and agreed by the Parties that (a) COMPANY shall be damaged by failure of Seller to meet such obligations, (b) it would be impracticable or extremely difficult to fix the actual damages resulting therefrom, (c) any sums which would be creditable or payable under this Article 6 are in the nature of liquidated damages, and not a penalty, and are fair and reasonable, and (d) each payment represents a reasonable estimate of fair compensation for the losses that may reasonably be anticipated from each such failure. The liquidated damages available under this Section shall constitute COMPANY’s sole damages for failure of the Seller to achieve the Commercial Operation Date or for any resizing of the Facility as provided in Article 4.

Development Security. [Section may be marked reserved for Facilities that have achieved Commercial Operation]‌ 6.1.1 If the Facility has not achieved Commercial Operation by the Effective Date, Seller shall post and thereafter maintain development security equal to two percent (2%) of the Nominal Contract Value upon execution of this Agreement. The Development Security shall be held by COMPANY PECO as security for Seller meeting the Commercial Operation Date or any other Significant Milestone Schedule as provided in Section 4.3Date. The Development Security shall be in the form of either a cash deposit or a Letter of Credit as provided for in Section 6.4. 6.5. 6.1.2 The following provisions shall govern disposition of the Development Security: : (a) In the event that the Facility achieves Commercial Operation on or prior to by the original Commercial Operation Date established on the Effective Date, the entire Development Security shall be returned to Seller upon Seller’s posting of credit support as further discussed herein in Article 6. . (b) In the event that the Commercial Operation Date is extended pursuant to the provisions of Section 4.4 for a period of 30 180 days or less and the Facility achieves Commercial Operation on or prior to such extended date, Seller shall be entitled only to a portion of the Development Security equal to (i) the Development Security, multiplied by less (1 – (ii) the ratio of the number of calendar days that the Commercial Operation Date is delayed beyond the original Commercial Operation DateDate to 180 days, not to exceed 30 days) divided multiplied by 180)the Development Security. The portion of the Development Security retained by COMPANY PECO shall be kept as liquidated damages. , and PECO shall be entitled to retain the entire Development Security as such liquidated damages in the event that the Commercial Operation Date is extended more than 180 days. (c) In the event that the Commercial Operation Date is not extended pursuant to the provisions of Section 4.4, but the Facility is resized pursuant to the provisions of Section 4.5, Seller shall be entitled only to a portion of the Development Security equal to (i) two percent (2%) times the Nominal Contract Value multiplied by (ii) the ratio of the revised Contract Amount resulting from the resizing to the original Contract Amount prior to the resizing, provided such ratio does not exceed 100%. resizing The remainder of the Development Security shall be kept by COMPANY PECO as liquidated damages. . (d) In the event that the Commercial Operation Date is extended pursuant to the provisions of Section 4.4 for a period of 30 days or less and the Seller meets such extended date but the Facility is resized pursuant to the provisions of Section 4.5, Seller shall be entitled only to a portion of the Development Security equal to (i) two percent (2%) times the Nominal Contract Value multiplied by (ii) the ratio of the revised Contract Amount resulting from the resizing to the original Contract Amount prior to the resizing multiplied by (iii) (1 – [(the number of calendar days that the Commercial Operation Date is delayed beyond the original Commercial Operation Date, not to exceed 30 days) divided by 180)]. The remainder of the Development Security shall be kept by COMPANY PECO as liquidated damages. . (e) If some or all of the Development Security is to be returned to the Seller under this Section 6.1, it shall be returned within thirty (30) Business Days of the achievement of the Commercial Operation Date, with interest paid only if Seller satisfied the Development Security requirements by providing Cash to COMPANYPECO. Such interest shall be calculated as provided in Section 6.6. using the London Interbank Offered Rate (LIBOR) at the time of the Cash is returned to Seller, plus thirty (30) basis points. (f) In the event the Seller fails to obtain the Commercial Operation DateDate Milestone, as may be extended pursuant to Section 4.4, COMPANY PECO may terminate this Agreement pursuant to Section 9.1 and retain the entire Development Security. In any event if Seller fails to achieve Commercial Operation by 30 days after the Commercial Operation Date the Agreement shall terminate unless further extension is mutually agreed to by the Parties. . 6.1.3 The Parties acknowledge and agree that it is difficult or impossible to determine with precision the amount of damages that would or might be incurred by COMPANY PECO as a result of the Facility failing to operate by the Commercial Operation Date Milestone. It is understood and agreed by the Parties that (a) COMPANY PECO shall be damaged by failure of Seller to meet such obligations, (b) it would be impracticable or extremely difficult to fix the actual damages resulting therefrom, (c) any sums which would be creditable or payable under this Article 6 are in the nature of liquidated damages, and not a penalty, and are fair and reasonable, and (d) each payment represents a reasonable estimate of fair compensation for the losses that may reasonably be anticipated from each such failure. The liquidated damages available under this Section shall constitute COMPANYPECO’s sole damages for failure of the Seller to achieve the Commercial Operation Date or for any resizing of the Facility as provided in Article 4.

Development Security. If As a condition of Buyer's execution of and continuing obligations under this Agreement, Supplier shall provide to Buyer, as security for the Facility has not achieved Commercial Operation by performance of Supplier's obligations hereunder, either (a) a letter of credit from a Qualified Financial Institution in the Effective Dateform attached hereto as Exhibit 17 or (b) a cash deposit, Seller shall post and thereafter maintain development security in either case, in an amount equal to two percent Seven Hundred Thirteen Thousand Four Hundred and No/100 Dollars (2%$713,400) (the "Development Security"); provided, however, that if the Annual Supply Amount is increased pursuant to Section 3.7.1, then the amount of the Nominal Contract Value upon execution required Development Security will be increased to be an amount that is equal to the product of this Agreement(i) the total number of MWh comprising the Annual Supply Amount as so adjusted, and (ii) USD $10.00. The Development Security shall be held by COMPANY as security for Seller meeting posted within five (5) Business Days after the PUCN Approval Date. If the Generating Facility has achieved Commercial Operation Date prior to or any other Significant Milestone Schedule as provided in Section 4.3. The on the PUCN Approval Date, then no Development Security shall be in required. Buyer shall have the form of either a cash deposit or a Letter of Credit as provided for in Section 6.4. The following provisions shall govern disposition of the Development Security: In the event that the Facility achieves Commercial Operation on or prior right to the Commercial Operation Date established on the Effective Date, the entire Development Security shall be returned to Seller draw upon Seller’s posting of credit support as further discussed herein in Article 6. In the event that the Commercial Operation Date is extended pursuant to the provisions of Section 4.4 for a period of 30 days or less and the Facility achieves Commercial Operation on or prior to such extended date, Seller shall be entitled only to a portion of the Development Security equal to the Development Security, multiplied by at Buyer's sole discretion, (1 – a) as a non-exclusive remedy available to Buyer under Article 23, (the number of calendar days that the Commercial Operation Date is delayed beyond the original Commercial Operation Date, not to exceed 30 daysb) divided by 180). The portion of the Development Security retained by COMPANY shall be kept as liquidated damages. In in the event that the Commercial Operation Date is not extended pursuant to the provisions of Section 4.4, but the Facility is resized pursuant to the provisions of Section 4.5, Seller shall be entitled only to a portion of the Development Security equal to (i) two percent (2%) times the Nominal Contract Value multiplied by (ii) the ratio of the revised Contract Amount resulting from the resizing to the original Contract Amount prior to the resizing, provided such ratio does not exceed 100%. The remainder of the Development Security shall be kept by COMPANY as liquidated damages. In the event that the Commercial Operation Date is extended pursuant to the provisions of Section 4.4 for a period of 30 days or less and the Seller meets such extended date but the Facility is resized pursuant to the provisions of Section 4.5, Seller shall be entitled only to a portion of the Development Security equal to (i) two percent (2%) times the Nominal Contract Value multiplied by (ii) the ratio of the revised Contract Amount resulting from the resizing to the original Contract Amount prior to the resizing multiplied by (iii) (1 – (the number of calendar days that the Commercial Operation Date is delayed beyond the original Commercial Operation Date, not to exceed 30 days) divided by 180). The remainder of the Development Security shall be kept by COMPANY as liquidated damages. If some or all of the Development Security is to be returned to the Seller under this Section 6.1, it shall be returned within thirty (30) Business Days of the achievement of the Commercial Operation Date, with interest paid only if Seller satisfied the Development Security requirements by providing Cash to COMPANY. Such interest shall be calculated as provided in Section 6.6. In the event the Seller fails to obtain the Commercial Operation Date, as may be extended pursuant to Section 4.4, COMPANY may terminate this Agreement pursuant to Section 9.1 and retain the entire Development Security. In any event if Seller Supplier fails to achieve Commercial Operation by 30 days after the Commercial Operation Date Deadline (or the Agreement shall terminate unless further extension is mutually agreed extended Commercial Operation Deadline if Supplier has met the requirements of Section 8.4.1), (c) if Supplier fails to by the Parties. The Parties acknowledge make any payments owing under this Agreement, or (d) if Supplier fails to reimburse Buyer for costs, including Replacement Costs, PC Replacement Costs and agree Penalties, that it is difficult Buyer has incurred or impossible to determine with precision the amount of damages that would or might be incurred by COMPANY may incur as a result of Supplier's failure to perform its obligations under this Agreement. Any such drawing on the Facility failing Development Security by Buyer (except for a drawing in full for Supplier's failure to operate achieve Commercial Operation by the Commercial Operation Date MilestoneDate, resulting in termination of this Agreement) shall give rise to an obligation of Supplier to replenish the Development Security to its original amount (or increased amount, if applicable) within three (3) Business Days. It is understood In the event that no amounts are due and agreed owing by Supplier to Buyer under this Agreement and Supplier has provided the Parties that (a) COMPANY Operating Security to Buyer, the Development Security shall be damaged released to Supplier upon the earlier of (x) termination of this Agreement in accordance with its terms or (y) on the fifteenth (15th ) Business Day after the Generating Facility achieves Commercial Operation. Upon the consent of Buyer, Supplier may apply and maintain the Development Security as a portion of Operating Security required to be provided by failure of Seller Supplier pursuant to meet such obligations, (b) it would be impracticable or extremely difficult to fix the actual damages resulting therefrom, (c) any sums which would be creditable or payable under this Article 6 are in the nature of liquidated damages, and not a penalty, and are fair and reasonable, and (d) each payment represents a reasonable estimate of fair compensation for the losses that may reasonably be anticipated from each such failure. The liquidated damages available under this Section shall constitute COMPANY’s sole damages for failure of the Seller to achieve the Commercial Operation Date or for any resizing of the Facility as provided in Article 416.2.