Offtake Agreement Sample Clauses
An Offtake Agreement is a contractual arrangement in which a buyer commits to purchasing a specified quantity of goods or resources from a seller, often over a set period. Typically used in industries such as energy, mining, or agriculture, these agreements outline the terms of purchase, including price, delivery schedules, and quality standards. The core practical function of an Offtake Agreement is to provide certainty for both parties: the seller secures a guaranteed market for their product, while the buyer ensures a reliable supply, thereby reducing market and financial risks for both sides.
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Offtake Agreement. Agreements such as offtake agreements become of vital importance where a project is dependent on guaranteed offtake for its products3 because offtake agreements represent the source of revenue for the project. An Offtake agreement is a legal contract between two parties regarding specific amounts of goods to be delivered from one party to the other. It is usually used by energy producers like coal mines, power plants4 and also for extracting oil and gas. However, it has been used in some cases of toll transportation facilities, for example the Channel Tunnel.5 An offtake agreement may be made with a purchaser for the purchase of any output produced by the project, in order to divert market risk away from the project company and the lenders.6 In this agreement, the offtake purchaser has to pay for an amount of project service or procure a certain amount of project output over a given time. It therefore provides a secure supply of the required product for offtaker, and the ability to sell its products and secures the project payment stream for the project company. Types of Offtake Agreements: There are various forms, which offtake agreements can take:
2.1.1 Take or Pay Contract: A take or pay contract is a legal agreement between an offteker of a facility’s output and a project company, under which the offtaker agrees to take the project’s product or to make payments to the project company for its good or service to maintain its capacity to produce and deliver the good or service. Moreover, the offtake purchaser makes payments whether or not the good or service is generated at the purchaser’s request. Therefore, the buyer payment obligation for the capacity component is unconditional. 7 Under take-or-pay contracts, payments may be set to cover all fixed costs of the project, fixed operating costs and maintenance costs, debt service, after-tax equity return, or may cover only part of the project’s available capacity.8 It should be noted that, sometimes, these contracts are on a “hell-or-high water” basis9 where, the payment obligation exists even if the project company produces nothing or it is incapable of producing anything. Additionally, in the 1950s and 1960s,a number of so-called “promotional pipelines” were financed on the basis of take-or-pay contracts, which freed the gas purchasers from their obligations to pay in certain circumstances of force majeure.10
2.1.2 Take and Pay Contract: Sometimes, this is called a ‘take-if-offered’ contract. It is requi...
Offtake Agreement if requested by the Agent, use its commercially reasonable best efforts to procure consent from Teck Cominco with respect to the assignment of the Offtake Agreement to the Finance Parties.
Offtake Agreement. Within thirty (30) days of the date hereof, the Company shall deliver to Acquiror the Offtake Agreement duly executed by each of the parties thereto.
Offtake Agreement. CBD Biotech shall, prior to expenditure of funds for equipment for the Production Facility, deliver a Supply and Offtake Agreement (the “Offtake Agreement“) in the form attached hereto as Exhibit 4, from one or more parties, for the purchase of the entire monthly production or the percentage of production as required by ICS, of the CBD produced by the Production Facility in Florida, at the then current market wholesale rate for CBD concentrate. Said Offtake Agreement shall be on terms and conditions mutually agreed by ICS and the respective purchasers and for a minimum term of 24 months. Said Offtake Agreement shall become effective upon signing and shall commence upon the completion and commencement of operations of the Production Facility with the initial successful monthly production of CBD end product concentrate utilizing the Bakhu Licensed Science. In the event of failure or performance of the parties to purchase the monthly production as agreed between the parties, CBD Biotech shall have the right to substitute other parties on the same terms and conditions, and such substitution shall not constitute a breach of the terms of the agreement.
Offtake Agreement. At any time, a Credit Party is in default of its obligations under any Offtake Agreement, subject to any applicable cure periods contained therein.
Offtake Agreement the Offtake Agreement to be entered into on the Closing Date by and among the Company, the Acquired Company and Valero Marketing pursuant to the Stock Purchase Agreement. Ordinary Course of Business: the ordinary course of business of the Company or its Subsidiary, consistent with past practices of the Company and the Acquired Company and undertaken in good faith. Organic Documents: with respect to any Person, its charter, certificate or articles of incorporation, bylaws, articles of organization, limited liability agreement, operating agreement, members agreement, shareholders agreement, partnership agreement, certificate of partnership, certificate of formation, voting trust agreement, or similar agreement or instrument governing the formation or operation of such Person. OSHA: the Occupational Safety and Hazard Act of 1970.
Offtake Agreement. Upon confirmation of quality of the Vanadium Product for the VBs (defined above) by StorEn acting reasonably, MCR and StorEn agree to enter into an offtake agreement in respect of prescribed Vanadium Product to be supplied to StorEn (Offtake Agreement) that will contain customary provisions including typical supply provisions, representations, warranties, covenants, indemnities, default provisions, rights of termination, record keeping requirements and provisions to address any conflict of interest. MCR and StorEn agree that the obligations to deliver and pay for Vanadium Product under the Offtake Agreement (and the remaining parts of this clause) will commence on satisfaction of customary conditions precedent in 2020 (or such later date as the parties may agree, including that MCR’s project has reached commercial production) and be drafted in long-form based on the principles outlined below:
Offtake Agreement. (See Attached)
Offtake Agreement. The Parties shall cause the Operator, on behalf of the Joint Venture, to negotiate with KC in good faith and enter into the Offtake Agreement and KC agrees to negotiate in good faith with the Operator and enter into the Offtake Agreement.
Offtake Agreement. By reason of the fact that the Collateral consisting of rights under the Offtake Agreement secure Secured Obligations owing to the GS Related Parties but not Secured Obligations owing to ▇▇▇▇, the benefits of the Receivables arising under the Offtake Agreement shall (unless otherwise agreed by ▇▇▇▇▇▇▇ Sachs and ▇▇▇▇) be shared by them ratably in connection with the exercise of any remedies hereunder and under the Offtake Agreement by determining their respective ratable shares of such Receivables (calculated as if such Receivables did secure all of the Secured Obligations owing to them) and applying the share of the Proceeds of such Receivables allocable to the GS Related Parties under clause second of Section 9.2, it being acknowledged and agreed that ▇▇▇▇, as the Account Debtor with respect to such Receivables, may derive its corresponding benefit by exercising its right of set-off under the Offtake Agreement against an amount up to but not exceeding its ratable share (calculated as aforesaid) of such Receivables (calculated as aforesaid). If any Event of Default shall have occurred and be continuing, the Collateral Agent may apply the balance from the Collateral Account or instruct the bank at which the Collateral Account is maintained to pay the balance of the Collateral Account to or for the benefit of the Collateral Agent.