Common use of Annual Equivalent Availability Factor and Liquidated Damages Clause in Contracts

Annual Equivalent Availability Factor and Liquidated Damages. For each Measurement Period following the Commercial Operations Date, an Annual Equivalent Availability Factor (“Annual EAF”) shall be calculated as set forth in Attachment U (Annual Equivalent Availability Factor). If the Annual EAF for such Measurement Period is less than 97% (the “EAF Performance Metric”), Seller shall pay, and Company shall accept, as liquidated damages for such shortfall, the amount set forth in the following table (on a progressive basis) upon proper demand at the end the current Measurement Period: Annual Equivalent Availability Factor Liquidated Damage Amount Tier 1 85.0% - 96.9% For each one-tenth of one percent (0.001) by which the Annual EAF falls below 97% but equal to or above 85%, an amount equal to one-tenth of one percent (0.001) of the Lump Sum Payment for the Measurement Period in question; plus Tier 2 80.0% - 84.9% For each one-tenth of one percent (0.001) by which the Annual EAF falls below 85% but equal to or above 80%, an amount equal to two-tenths of one percent (0.002) of the Lump Sum Payment for the Measurement Period in question; plus Tier 3 75.0% - 79.9% For each one-tenth of one percent (0.001) by which the Annual EAF falls below 80% but equal to or above 75%, an amount equal to three-tenths of one percent (0.003) of the Lump Sum Payment for the Measurement Period in question; plus Tier 4 Below 75.0% For each one-tenth of one percent (0.001) by which the Annual EAF falls below 75%, an amount equal to four-tenths of one percent (0.004) of the Lump Sum Payment for the Measurement Period in question. Such liquidated damages shall be due within thirty (30) Days after the first to occur of the end of such Measurement Period or the end of Term. In the event Seller fails to pay Company amounts of liquidated damages due under this Section 4.4(a) (Annual Equivalent Availability Factor and Liquidated Damages) within thirty (30) Days of receipt of Company’s written demand, Company may, without limitation to any other remedy Company may have, set-off such amounts due against payments it is otherwise obligated to make under this Agreement. For purposes of determining liquidated damages under this Section 4.4(a) (Annual Equivalent Availability Factor and Liquidated Damages), the Annual EAF for the Measurement Period in question shall be rounded to the nearest one-tenth of one percent (0.001). Each Party agrees and acknowledges that (i) the damages that Company would incur if the Seller fails to achieve the EAF Performance Metric for a Measurement Period would be difficult or impossible to calculate with certainty and (ii) the aforesaid liquidated damages are an appropriate approximation of such damages.