Common use of Security Fund Clause in Contracts

Security Fund. (A) Not later than fifteen (15) Business Days after the Effective Date, Seller shall establish the Pre-COD Security Fund at a level of $ per MW of anticipated Nameplate Capacity of the Facility. Within five Business Days after the Commercial Operation Date, Seller shall increase the Security Fund to bring the total Security Fund balance to a total of $ per MW of Nameplate Capacity of the Facility, which shall represent the full amount of the Post-COD Security Fund amount. Seller shall maintain the Security Fund at the applicable required level throughout the Term. Seller shall not be required to replenish any amounts drawn from the Security Fund. Buyer shall promptly provide Seller with Notice of any amount drawn from the Security Fund. Failure to establish and maintain the Security Fund for the times and in the manner described in this Article shall constitute a material default of this PPA by Seller. (B) The Security Fund shall be held by or for the benefit of Buyer as security for the payment of, and be available to pay, any and all amounts due and unpaid (after Notice and the passing of the applicable cure period set forth in Article 11.1(A)) to Buyer pursuant to this PPA, including damages attributable to Seller’s breach of this PPA and the payment of Liquidated Delay Damages and Replacement Energy Costs owing by Seller hereunder. In addition to any other remedy available to it, Buyer may, before or after termination of this PPA, draw from the Security Fund such amounts as are necessary to recover amounts owed to Buyer pursuant to this PPA including any damages due to Buyer and any amounts for which Buyer is entitled to indemnification under this PPA. Buyer may, in its sole discretion, draw all or any part of such amounts due to it from any form of security to the extent available pursuant to this Article 10.1, and from all such forms, and in any sequence Buyer may select. Any failure to draw upon the Security Fund or other security for any damages or other amounts due to Buyer shall not prejudice Buyer’s rights to recover such damages or amounts in any other manner. (C) The Security Fund shall be maintained at Seller’s expense and shall be in the form of one or more of the following instruments described below. The Security Fund must at all times be comprised of one or any combination of the following: i. An irrevocable standby letter of credit or a performance bond, in the form of Exhibit J or otherwise in form and substance acceptable to Buyer, issued by a Financial Institution meeting the minimum criteria as describe under the definition of Financial Institution. Security provided in this form shall be consistent with this PPA and include a provision for at least thirty

Security Fund. (A) Not later than fifteen (15) Business Days after During the Effective DateTerm of this PPA, Seller shall establish fund and maintain security in favor of Company, at Seller’s expense, to secure Seller’s obligations to Company under this PPA (the Pre-COD Security Fund at a level of $ per MW of anticipated Nameplate Capacity of the Facility. Within five Business Days after the Commercial Operation Date, Seller shall increase the Security Fund to bring the total Security Fund balance to a total of $ per MW of Nameplate Capacity of the Facility, which shall represent the full amount of the Post-COD Security Fund amount. Seller shall maintain the Security Fund at the applicable required level throughout the Term. Seller shall not be required to replenish any amounts drawn from the “Security Fund. Buyer shall promptly provide Seller ”), in accordance with Notice of any amount drawn from the Security Fund. Failure to establish and maintain the Security Fund for the times and in the manner described in this Article shall constitute a material default of this PPA by Seller11. (B) Seller shall establish and fund the initial Security Fund in an amount equal to the sum, for each of the first five (5) Commercial Operation Years of the PPA, of (i) the Capacity Price, multiplied by (ii) the Reference Capacity Amount for such Commercial Operation Year (such five (5) year sum, the “Security Fund Amount”). The Security Fund Amount shall be held adjusted at the end of each Commercial Operation Year to reflect, on a rolling basis, the next five (5) Commercial Operation Years provided that that the number of Commercial Operation Years taken into account after Commercial Operation Year twenty-six (26) shall step down each year by or for one Commercial Operation Year (e.g., only three (3) Commercial Operation Years shall be taken into account in determining the benefit Security Fund Amount at the end of Buyer as security for the payment of, and be available to pay, any and all amounts due and unpaid Commercial Operation Year twenty-seven (after Notice and the passing of the applicable cure period set forth in Article 11.1(A27). (C) to Buyer pursuant to this PPA, including damages attributable to Seller’s breach of this PPA and the payment of Liquidated Delay Damages and Replacement Energy Costs owing by Seller hereunder. In addition to any other remedy available to it, Buyer may, before or after termination of this PPA, Company may draw from the Security Fund such amounts as are necessary to recover amounts owed owing to Buyer Company pursuant to this PPA PPA, including any Liquidated Delay Damages, Actual Damages, liquidated damages due for failure to Buyer achieve COD, and any amounts for which Buyer Company is entitled to indemnification under this PPA. Buyer Company may, in its sole discretion, draw all or any part of such amounts due to it from any form of security to the extent available pursuant to this Article 10.1, and from all such forms, 11 and in any sequence Buyer Company may select. Any Company’s failure or delay to draw upon any amount from the Security Fund in any instance shall not prejudice Company’s rights to subsequently recover such amount from the Security Fund or other security for any damages or other amounts due to Buyer shall not prejudice Buyer’s rights to recover such damages or amounts in any other manner. (CD) The Company shall notify Seller within five (5) Business Days following any draw on the Security Fund shall be maintained at Seller’s expense by Company, including the amount thereof and shall be in the form of one or more of the following instruments described below. The Security Fund must at all times be comprised of one or any combination of the following: i. An irrevocable standby letter of credit or a performance bond, in the form of Exhibit J or otherwise in form and substance acceptable to Buyer, issued by a Financial Institution meeting the minimum criteria as describe under the definition of Financial Institution. Security provided in this form shall be consistent with this PPA and include a provision for at least thirtybasis therefor.

Security Fund. (A) Not later than fifteen (15) Business Days after the Effective DateOn or before [Month Day, Year], Seller shall establish the Pre-COD Security Fund at a level of $ [$50,000 (15 years); $67,000 (20 years); or $83,000 (25 years) depending on term] per MW of anticipated Nameplate Capacity of the Facility. Within five Business Days after the Commercial Operation Date, Seller shall increase the Security Fund to bring the total Security Fund balance to a total of $ [$100,000 (15 years); $133,000 (20 years); or $167,000 (25 years) depending on term] per MW of Nameplate Capacity of the Facility, which shall represent the full amount of the Post-COD Security Fund amount. Seller shall maintain the Security Fund at the applicable required level throughout the Term. Seller shall not be required to replenish any amounts drawn from the Security Fund. Buyer shall promptly provide Seller with Notice of any amount drawn from the Security Fund. Failure to establish and maintain the Security Fund for the times and in the manner described in this Article Section shall constitute a material default of this PPA by the Seller. (B) The Security Fund shall be held by or for the benefit of the Buyer as security for the payment of, and be available to pay, any and all amounts due and unpaid (after Notice and the passing of the applicable cure period set forth in Article 11.1(A)) to Buyer pursuant to this PPA, including damages attributable to Seller’s breach of this PPA and the payment of Liquidated Delay Damages and Replacement Energy Costs owing by Seller hereunder. In addition to any other remedy available to it, Buyer may, before or after termination of this PPA, draw from the Security Fund such amounts as are necessary to recover amounts owed to Buyer pursuant to this PPA including any damages due to Buyer and any amounts for which Buyer is entitled to indemnification under this PPA. Buyer may, in its sole discretion, draw all or any part of such amounts due to it from any form of security to the extent available pursuant to this Article Section 10.1, and from all such forms, and in any sequence Buyer may select. Any failure to draw upon the Security Fund or other security for any damages or other amounts due to Buyer shall not prejudice Buyer’s rights to recover such damages or amounts in any other manner. (C) The Security Fund shall be maintained at Seller’s expense and shall be in the form of one or more of the following instruments described below. The Security Fund must at all times be comprised of one or any combination of the following: i. An irrevocable standby letter of credit or a performance bond, in the form of Exhibit J or otherwise in form and substance acceptable to Buyer, issued by a Financial Institution meeting the minimum criteria as describe under the definition of Financial Institution. Security provided in this form shall be consistent with this PPA and include a provision for at least thirtythirty (30) Days advance Notice to Buyer of any expiration or earlier termination of the security so as to allow Buyer sufficient time to exercise its rights under said security if Seller fails to extend or replace the security. The form of such security must meet Buyer’s requirements to ensure that claims or draw- downs can be made unilaterally by Buyer in accordance with the terms of this PPA. Such security must be issued for a minimum term of three hundred and sixty (360) Days. Seller shall cause the renewal or extension of the security for additional consecutive terms of three hundred and sixty (360) Days or more (or, if shorter, the remainder of the Term of this PPA) no later than thirty (30) Days prior to each expiration date of the security. If the security is not renewed or extended as required herein, or if the LC Issuer ceases to meet the credit rating requirements hereof and Seller fails to provide a replacement form of Performance Security within thirty (30) Days of Notice from Buyer, Buyer shall have the right to draw the full amount of letter of credit and hold the amount so draw in cash and the amount so held shall constitute the Performance Security hereunder until replaced by another form of Performance Security meeting the requirements of this PPA. ii. United States currency either: (i) deposited in a trust or financial account under which Buyer is designated as beneficiary with sole authority to draft from the account or otherwise access the security; or (ii) held by a Financial Institution as escrow agent with instructions to pay claims made by Buyer pursuant to this PPA, such instructions to be in a form satisfactory to Buyer. Security provided in this form shall include a requirement for immediate Notice to Buyer from the financial institution and Seller in the event that the sums held as security in the account or trust do not at any time meet the required level for the Security Fund as set forth in this Section 10.1. Funds held in the account may be deposited in a money-market fund, short-term treasury obligations, investment-grade commercial paper and other liquid investment-grade investments with maturities of three months or less, with all investment income thereon to be taxable to, and to accrue for the benefit of, Seller, subject to the rights of the Buyer hereunder. After the Commercial Operation Date is achieved, regular account sweeps for recovery of interest earned by the Security Fund shall be allowed by Seller; provided, however, that such sweeps shall not be permitted if the balance of the Security Fund before or after a sweep would be less than the amount required under Section 10.1(a) above. At such times as the balance in the escrow account exceeds the amount of Seller’s obligation to provide security hereunder, Buyer shall remit, or permit to be remitted, to Seller on demand (but no more than once each calendar year) any excess in the escrow account above Seller’s obligations. iii. A guarantee, in form and substance satisfactory to Buyer from a guarantor (“Seller Guarantor”) approved by Buyer, which approval shall not be unreasonably withheld, conditioned or delayed. If so approved, Seller Guarantor must maintain an Investment Grade rating for the term of the PPA, and the Seller must, within five (5) Business Days, replace any guarantee provided by a Seller Guarantor who falls below the Investment Grade rating with a guarantee from an Investment Grade rated entity approved by Buyer. Failure to promptly replace in those circumstances shall constitute a material default of this PPA. (D) Promptly following: (i) the earlier to occur of: (1) end of the Term, or the termination of this PPA (except for termination by Buyer due to an Event of Default by Seller), and (ii) the payment of all amounts owing by Seller to Buyer under this PPA, Buyer shall release the Security Fund (including any accumulated interest, if applicable) to Seller. In the event that this PPA is terminated by Buyer due to an Event of Default by Seller, Buyer may retain an amount of the Security Fund required to satisfy any and all damages that may be due to Buyer, including (but not limited to) Liquidated Delay Damages and Actual Damages.