BECO Termination Payment Clause Samples
The BECO Termination Payment clause defines the financial obligations that arise if the agreement is terminated under specified circumstances. Typically, this clause outlines the amount or method for calculating the payment due to BECO upon early termination, such as a fixed sum, a pro-rata calculation, or reimbursement of certain costs incurred. Its core practical function is to ensure that BECO is compensated fairly for losses or investments made in reliance on the contract, thereby allocating risk and providing clarity for both parties in the event of early termination.
BECO Termination Payment. (A) If an Event of Default with respect to BECO shall have occurred and be continuing, NEA shall have the right (I) to designate a day on which this Agreement will terminate (the “BECO Early Termination Date”), (II) withhold any payments due to BECO under this Agreement and (III) suspend performance. NEA shall calculate, in a commercially reasonable manner, a BECO Termination Payment as of the BECO Early Termination Date. As soon as practicable after termination, notice shall be given by NEA to BECO of the amount of the BECO Termination Payment. The notice shall include a written statement explaining in reasonable detail the calculation of such amount. BECO shall make the BECO Termination Payment within two (2) Business Days after such notice is effective. If BECO disputes NEA’s calculation of the BECO Termination Payment, in whole or in part, BECO shall, within two (2) Business Days of receipt of the calculation of the BECO Termination Payment, provide to NEA a detailed written explanation of the basis for such dispute; provided, however, BECO shall first transfer Performance Assurance to NEA in an amount equal to the BECO Termination Payment as calculated by NEA.
(B) Notwithstanding the provisions of Section 8.2(a)(i)(A), if on the first occasion that an Event of Default by BECO pursuant to Section 8.1(b) shall have occurred and be continuing, and NEA has exercised its rights under Section 8.2(a)(i)(A) to designate a BECO Early Termination Date, which date shall be no less than twenty (20) Business Days from the date NEA provides BECO with the notice of default under Section 8.1(b), BECO may, within twenty (20) Business Days of such notice, provide NEA with any amounts then due, plus credit support in an amount equal to the aggregate of the payments to be made by BECO pursuant to Article 4 hereof for the subsequent three (3) month period, as calculated in good faith by NEA (and disregarding any suspension of performance by NEA under Section 8.2(a)(i)) (“Credit Support”) in any of the following forms: (I) a letter of credit with an initial term of at least six (6) months issued by a bank or other financial institution reasonably acceptable to NEA, which will allow NEA to draw on the letter of credit up to the full amount upon a subsequent Event of Default by BECO, or (II) such other credit support proposed by BECO that is reasonably acceptable to NEA. If BECO makes such payments and provides such Credit Support, then NEA’s rights under Section 8.2(a)(i) s...