Common use of CREDIT, FINANCIAL RESPONSIBILITY AND EVENTS OF DEFAULT Clause in Contracts

CREDIT, FINANCIAL RESPONSIBILITY AND EVENTS OF DEFAULT. 10.1. If either party (“X”) has reasonable grounds for insecurity regarding the performance of any obligation under this Contract (whether or not then due) by the other party (“Y”) (including, without limitation, as a result of the occurrence of a material change in the creditworthiness or financial condition of Y or its Guarantor, if applicable), X may demand Adequate Assurance of Performance. Y hereby grants to X a continuing first priority security interest in, lien on and right of setoff against all Adequate Assurance of Performance in the form of cash transferred by Y to X pursuant to this Section 10.1. Upon the return by X to Y of such Adequate Assurance of Performance, the security interest and lien granted hereunder on that Adequate Assurance of Performance shall be released automatically and, to the extent possible, without any further action by either party. 10.2. In the event (each an “Event of Default”) either party (the “Defaulting Party”) or its Guarantor, as applicable, shall: (i) make an assignment or any general arrangement for the benefit of creditors; (ii) file a petition or otherwise commence, authorize or acquiesce in the commencement of a proceeding or case under any bankruptcy or similar law for the protection of creditors or have such petition filed or proceeding commenced against it; (iii) otherwise become bankrupt or insolvent (however evidenced); (iv) be unable to pay its debts as they fall due; (v) have a receiver, provisional liquidator, conservator, custodian, trustee or other similar official appointed with respect to it or substantially all of its assets; (vi) fail to perform any obligation to the other party with respect to any Credit Support Obligations relating to the Contract; (vii) fail to give Adequate Assurance of Performance under Section 10.1 within two Business Days of Notice by the other party; (viii) not have paid any amount due the other party hereunder on or before the second Business Day following Notice that such payment is due; (ix) be the affected party with respect to any Additional Event of Default, (x) fail to comply with any material representation or warranty under this Contract if such failure is not remedied within five Business Days after Notice, (xi) fail to deliver Product in the case of a Seller, or fail to receive Product in the case of a Buyer, under a Transaction other than by reason of Force Majeure, for two consecutive Delivery Months or three cumulative Delivery Months in any twelve Month period; or (xii) fail to perform or breach any other material obligation under this Contract (except to the extent such failure constitutes a separate Event of Default and except for such party’s obligations to deliver or receive Product (the exclusive remedies which are provided for in Sections 3 or 10)), if such failure is not remedied within three Business Days after receipt of Notice; then the other party (the “Non-Defaulting Party”) shall have the right, at its sole election, to immediately withhold and/or suspend deliveries of Product, offset all or any portion of the unpaid balance against monies owed by the Defaulting Party, withhold or suspend payments upon Notice and/or to terminate and liquidate the Transactions under the Contract, in the manner provided in Section 10.3, in addition to any and all other remedies available hereunder; provided that no suspension of performance shall continue for more than ten Business Days unless an early termination date has been declared in accordance with Section 10.3. 10.3. If an Event of Default has occurred and is continuing, the Non-Defaulting Party shall have the right, by Notice to the Defaulting Party, to designate a Day, no earlier than the Day such Notice is given and no later than twenty Days after such Notice is given, as an early termination date (the “Early Termination Date”) for the liquidation and termination pursuant to Section 10.3.1 of all Transactions under the Contract, each a “Terminated Transaction”. On the Early Termination Date, all Transactions will terminate, other than those Transactions, if any, that may not be liquidated and terminated under Applicable Law (“Excluded Transactions”), which Excluded Transactions must be liquidated and terminated as soon thereafter as is legally permissible, and upon termination shall be a Terminated Transaction and be valued consistent with Section 10.3.1 below. With respect to each Excluded Transaction, its actual termination date shall be the Early Termination Date for purposes of Section 10.3.1. 10.3.1. As of the Early Termination Date, the Non-Defaulting Party shall determine, in good faith and in a commercially reasonable manner, (i) the amount owed (whether or not then due) by each party with respect to all Product delivered and received between the parties under Terminated Transactions and Excluded Transactions on and before the Early Termination Date and all other applicable charges relating to such deliveries and receipts (including without limitation any amounts owed under Section 3.2) for which payment has not yet been made by the party that owes such payment under this Contract and (ii) the Market Value, as defined below, of each Terminated Transaction. The Non-Defaulting Party shall (x) liquidate and accelerate each Terminated Transaction at its Market Value, so that each amount equal to the difference between such Market Value and the Contract Value, as defined below, of such Terminated Transaction(s) shall be due to the Buyer under the Terminated Transaction(s) if such Market Value exceeds the Contract Value and to the Seller if the opposite is the case; and (y) where appropriate, discount each amount then due under clause (x) above to present value in a commercially reasonable manner as of the Early Termination Date (to take account of the period between the date of liquidation and the date on which such amount would have otherwise been due pursuant to the relevant Terminated Transactions). For purposes of this Section 10.3.1, “Contract Value” means the amount of Product remaining to be delivered or purchased under a Transaction multiplied by the Price, and “Market Value” means the amount of Product remaining to be delivered or purchased under a Transaction multiplied by the market price for a similar Transaction at the Delivery Location(s) determined by the Non- Defaulting Party in a commercially reasonable manner. To ascertain the Market Value, the Non-Defaulting Party may consider (i) any or all of the settlement prices of Product futures contracts, quotations from leading dealers in energy swap contracts or physical trading markets for the Product, where such leading dealers are not the parties or their Affiliates, similar sales or purchases and any other bona fide third-party offers, any other third party information, including, without limitation, quotations (either firm or indicative) of relevant prices, yields, yield curves, volatilities, spreads or other market data for the relevant markets, and (ii) in the absence of external sources under (i), any internal sources of information, all adjusted for the length of the term and differences in transportation costs. A party shall not be required to enter into a replacement Transaction(s) in order to determine the Market Value. Any extension(s) of the term of a Transaction to which parties are not bound as of the Early Termination Date (including but not limited to “evergreen provisions”) shall not be considered in determining Contract Values and Market Values. For the avoidance of doubt, any option pursuant to which one party has the right to extend the term of a Transaction shall be considered in determining Contract Values and Market Values. The rate of interest used in calculating net present value shall be determined by the Non-Defaulting Party in a commercially reasonable manner. 10.3.2. The Non-Defaulting Party shall net or aggregate, as appropriate, any and all amounts owing between the parties under Section 10.3.1, so that all such amounts are netted or aggregated to a single liquidated amount payable by one party to the other (the “Net Settlement Amount”). At its sole option and without prior Notice to the Defaulting Party, the Non-Defaulting Party is hereby authorized to setoff any Net Settlement Amount against (i) any margin or other collateral held by a party in connection with any Credit Support Obligation relating to the Contract and (ii) any amount(s) (including any excess cash margin or excess cash collateral) owed or held by the party that is entitled to the Net Settlement Amount under any other agreement or arrangement between the parties. Triangular Setoff Option: 10.

CREDIT, FINANCIAL RESPONSIBILITY AND EVENTS OF DEFAULT. 10.1. If either party (“X”) has reasonable grounds for insecurity regarding the performance of any obligation under this Contract (whether or not then due) by the other party (“Y”) (including, without limitation, as a result of the occurrence of a material change in the creditworthiness or financial condition of Y or its Guarantor, if applicable), X may demand Adequate Assurance of Performance. Y hereby grants to X a continuing first priority security interest in, lien on and right of setoff against all Adequate Assurance of Performance in the form of cash transferred by Y to X pursuant to this Section 10.1. Upon the return by X to Y of such Adequate Assurance of Performance, the security interest and lien granted hereunder on that Adequate Assurance of Performance shall be released automatically and, to the extent possible, without any further action by either party. 10.2. In the event (each an “Event of Default”) either party (the “Defaulting Party”) or its Guarantor, as applicable, shall: (i) make an assignment or any general arrangement for the benefit of creditors; (ii) file a petition or otherwise commence, authorize or acquiesce in the commencement of a proceeding or case under any bankruptcy or similar law for the protection of creditors or have such petition filed or proceeding commenced against it; (iii) otherwise become bankrupt or insolvent (however evidenced); (iv) be unable to pay its debts as they fall due; (v) have a receiver, provisional liquidator, conservator, custodian, trustee or other similar official appointed with respect to it or substantially all of its assets; (vi) fail to perform any obligation to the other party with respect to any Credit Support Obligations relating to the Contract; (vii) fail to give Adequate Assurance of Performance under Section 10.1 within two Business Days of Notice by the other party; (viii) not have paid any amount due the other party hereunder on or before the second Business Day following Notice that such payment is due; (ix) be the affected party with respect to any Additional Event of Default, (x) fail to comply with any material representation or warranty under this Contract if such failure is not remedied within five Business Days after Notice, (xi) fail to deliver Product in the case of a Seller, or fail to receive Product in the case of a Buyer, under a Transaction other than by reason of Force Majeure, for two consecutive Delivery Months or three cumulative Delivery Months in any twelve Month period; or (xii) fail to perform or breach any other material obligation under this Contract (except to the extent such failure constitutes a separate Event of Default and except for such party’s obligations to deliver or receive Product (the exclusive remedies which are provided for in Sections 3 or 10)), if such failure is not remedied within three Business Days after receipt of Notice; then the other party (the “Non-Defaulting Party”) shall have the right, at its sole election, to immediately withhold and/or suspend deliveries of Product, offset all or any portion of the unpaid balance against monies owed by the Defaulting Party, withhold or suspend payments upon Notice and/or to terminate and liquidate the Transactions under the Contract, in the manner provided in Section 10.3, in addition to any and all other remedies available hereunder; provided that no suspension of performance shall continue for more than ten Business Days unless an early termination date has been declared in accordance with Section 10.3. 10.3. If an Event of Default has occurred and is continuing, the Non-Defaulting Party shall have the right, by Notice to the Defaulting Party, to designate a Day, no earlier than the Day such Notice is given and no later than twenty Days after such Notice is given, as an early termination date (the “Early Termination Date”) for the liquidation and termination pursuant to Section 10.3.1 of all Transactions under the Contract, each a “Terminated Transaction”. On the Early Termination Date, all Transactions will terminate, other than those Transactions, if any, that may not be liquidated and terminated under Applicable Law (“Excluded Transactions”), which Excluded Transactions must be liquidated and terminated as soon thereafter as is legally permissible, and upon termination shall be a Terminated Transaction and be valued consistent with Section 10.3.1 below. With respect to each Excluded Transaction, its actual termination date shall be the Early Termination Date for purposes of Section 10.3.1. 10.3.1. As of the Early Termination Date, the Non-Defaulting Party shall determine, in good faith and in a commercially reasonable manner, (i) the amount owed (whether or not then due) by each party with respect to all Product delivered and received between the parties under Terminated Transactions and Excluded Transactions on and before the Early Termination Date and all other applicable charges relating to such deliveries and receipts (including without limitation any amounts owed under Section 3.2) for which payment has not yet been made by the party that owes such payment under this Contract and (ii) the Market Value, as defined below, of each Terminated Transaction. The Non-Defaulting Party shall (x) liquidate and accelerate each Terminated Transaction at its Market Value, so that each amount equal to the difference between such Market Value and the Contract Value, as defined below, of such Terminated Transaction(s) shall be due to the Buyer under the Terminated Transaction(s) if such Market Value exceeds the Contract Value and to the Seller if the opposite is the case; and (y) where appropriate, discount each amount then due under clause (x) above to present value in a commercially reasonable manner as of the Early Termination Date (to take account of the period between the date of liquidation and the date on which such amount would have otherwise been due pursuant to the relevant Terminated Transactions). For purposes of this Section 10.3.1, “Contract Value” means the amount of Product remaining to be delivered or purchased under a Transaction multiplied by the Price, and “Market Value” means the amount of Product remaining to be delivered or purchased under a Transaction multiplied by the market price for a similar Transaction at the Delivery Location(s) determined by the Non- Non-Defaulting Party in a commercially reasonable manner. To ascertain the Market Value, the Non-Defaulting Party may consider (i) any or all of the settlement prices of Product futures contracts, quotations from leading dealers in energy swap contracts or physical trading markets for the Product, where such leading dealers are not the parties or their Affiliates, similar sales or purchases and any other bona fide third-party offers, any other third party information, including, without limitation, quotations (either firm or indicative) of relevant prices, yields, yield curves, volatilities, spreads or other market data for the relevant markets, and (ii) in the absence of external sources under (i), any internal sources of information, all adjusted for the length of the term and differences in transportation costs. A party shall not be required to enter into a replacement Transaction(s) in order to determine the Market Value. Any extension(s) of the term of a Transaction to which parties are not bound as of the Early Termination Date (including but not limited to “evergreen provisions”) shall not be considered in determining Contract Values and Market Values. For the avoidance of doubt, any option pursuant to which one party has the right to extend the term of a Transaction shall be considered in determining Contract Values and Market Values. The rate of interest used in calculating net present value shall be determined by the Non-Defaulting Party in a commercially reasonable manner. 10.3.2. The Non-Defaulting Party shall net or aggregate, as appropriate, any and all amounts owing between the parties under Section 10.3.1, so that all such amounts are netted or aggregated to a single liquidated amount payable by one party to the other (the “Net Settlement Amount”). At its sole option and without prior Notice to the Defaulting Party, the Non-Defaulting Party is hereby authorized to setoff any Net Settlement Amount against (i) any margin or other collateral held by a party in connection with any Credit Support Obligation relating to the Contract and (ii) any amount(s) (including any excess cash margin or excess cash collateral) owed or held by the party that is entitled to the Net Settlement Amount under any other agreement or arrangement between the parties. Triangular Setoff Option: 10.

CREDIT, FINANCIAL RESPONSIBILITY AND EVENTS OF DEFAULT. 10.1. If either party (“X”) has reasonable grounds for insecurity regarding the performance of any obligation under this Contract (whether or not then due) by the other party (“Y”) (including, without limitation, as a result of the occurrence of a material change in the creditworthiness or financial condition of Y or its Guarantor, if applicable), X may demand Adequate Assurance of Performance. Y hereby grants to X a continuing first priority security interest in, lien on and right of setoff against all Adequate Assurance of Performance in the form of cash transferred by Y to X pursuant to this Section 10.1. Upon the return by X to Y of such Adequate Assurance of Performance, the security interest and lien granted hereunder on that Adequate Assurance of Performance shall be released automatically and, to the extent possible, without any further action by either party. 10.2. In the event (each an “Event of Default”) either party (the “Defaulting Party”) or its Guarantor, as applicable, shall: (i) make an assignment or any general arrangement for the benefit of creditors; (ii) file a petition or otherwise commence, authorize or acquiesce in the commencement of a proceeding or case under any bankruptcy or similar law for the protection of creditors or have such petition filed or proceeding commenced against it; (iii) otherwise become bankrupt or insolvent (however evidenced); (iv) be unable to pay its debts as they fall due; (v) have a receiver, provisional liquidator, conservator, custodian, trustee or other similar official appointed with respect to it or substantially all of its assets; (vi) fail to perform any obligation to the other party with respect to any Credit Support Obligations relating to the Contract; (vii) fail to give Adequate Assurance of Performance under Section 10.1 within two Business Days of Notice by the other party; (viii) not have paid any amount due the other party hereunder on or before the second Business Day following Notice that such payment is due; (ix) be the affected party with respect to any Additional Event of Default, (x) fail to comply with any material representation or warranty under this Contract if such failure is not remedied within five Business Days after Notice, (xi) fail to deliver Product in the case of a Seller, or fail to receive Product in the case of a Buyer, under a Transaction other than by reason of Force Majeure, for two consecutive Delivery Months or three cumulative Delivery Months in any twelve Month period; or (xii) fail to perform or breach any other material obligation under this Contract (except to the extent such failure constitutes a separate Event of Default and except for such party’s obligations to deliver or receive Product (the exclusive remedies which are provided for in Sections 3 or 10)), if such failure is not remedied within three Business Days after receipt of Notice; then the other party (the “Non-Defaulting Party”) shall have the right, at its sole election, to immediately withhold and/or suspend deliveries of Product, offset all or any portion of the unpaid balance against monies owed by the Defaulting Party, withhold or suspend payments upon Notice and/or to terminate and liquidate the Transactions under the Contract, in the manner provided in Section 10.3, in addition to any and all other remedies available hereunder; provided that no suspension of performance shall continue for more than ten Business Days unless an early termination date has been declared in accordance with Section 10.3. 10.3. If an Event of Default has occurred and is continuing, the Non-Defaulting Party shall have the right, by Notice to the Defaulting Party, to designate a Day, no earlier than the Day such Notice is given and no later than twenty Days after such Notice is given, as an early termination date (the “Early Termination Date”) for the liquidation and termination pursuant to Section 10.3.1 of all Transactions under the Contract, each a “Terminated Transaction”. On the Early Termination Date, all Transactions will terminate, other than those Transactions, if any, that may not be liquidated and terminated under Applicable Law (“Excluded Transactions”), which Excluded Transactions must be liquidated and terminated as soon thereafter as is legally permissible, and upon termination shall be a Terminated Transaction and be valued consistent with Section 10.3.1 below. With respect to each Excluded Transaction, its actual termination date shall be the Early Termination Date for purposes of Section 10.3.1. 10.3.1. As of the Early Termination Date, the Non-Defaulting Party shall determine, in good faith and in a commercially reasonable manner, (i) the amount owed (whether or not then due) by each party with respect to all Product delivered and received between the parties under Terminated Transactions and Excluded Transactions on and before the Early Termination Date and all other applicable charges relating to such deliveries and receipts (including without limitation any amounts owed under Section 3.2) for which payment has not yet been made by the party that owes such payment under this Contract and (ii) the Market Value, as defined below, of each Terminated Transaction. The Non-Defaulting Party shall (x) liquidate and accelerate each Terminated Transaction at its Market Value, so that each amount equal to the difference between such Market Value and the Contract Value, as defined below, of such Terminated Transaction(s) shall be due to the Buyer under the Terminated Transaction(s) if such Market Value exceeds the Contract Value and to the Seller if the opposite is the case; and (y) where appropriate, discount each amount then due under clause (x) above to present value in a commercially reasonable manner as of the Early Termination Date (to take account of the period between the date of liquidation and the date on which such amount would have otherwise been due pursuant to the relevant Terminated Transactions). For purposes of this Section 10.3.1, “Contract Value” means the amount of Product remaining to be delivered or purchased under a Transaction multiplied by the Price, and “Market Value” means the amount of Product remaining to be delivered or purchased under a Transaction multiplied by the market price for a similar Transaction at the Delivery Location(s) determined by the Non- Non-Defaulting Party in a commercially reasonable manner. To ascertain the Market Value, the Non-Defaulting Party may consider (i) any or all of the settlement prices of Product futures contracts, quotations from leading dealers in energy swap contracts or physical trading markets for the Product, where such leading dealers are not the parties or their Affiliates, similar sales or purchases and any other bona fide third-party offers, any other third party information, including, without limitation, quotations (either firm or indicative) of relevant prices, yields, yield curves, volatilities, spreads or other market data for the relevant markets, and (ii) in the absence of external sources under (i), any internal sources of information, all adjusted for the length of the term and differences in transportation costs. A party shall not be required to enter into a replacement Transaction(s) in order to determine the Market Value. Any extension(s) of the term of a Transaction to which parties are not bound as of the Early Termination Date (including but not limited to “evergreen provisions”) shall not be considered in determining Contract Values and Market Values. For the avoidance of doubt, any option pursuant to which one party has the right to extend the term of a Transaction shall be considered in determining Contract Values and Market Values. The rate of interest used in calculating net present value shall be determined by the Non-Defaulting Party in a commercially reasonable manner. 10.3.2. The Non-Defaulting Party shall net or aggregate, as appropriate, any and all amounts owing between the parties under Section 10.3.1, so that all such amounts are netted or aggregated to a single liquidated amount payable by one party to the other (the “Net Settlement Amount”). At its sole option and without prior Notice to the Defaulting Party, the Non-Defaulting Party is hereby authorized to setoff any Net Settlement Amount against (i) any margin or other collateral held by a party in connection with any Credit Support Obligation relating to the Contract and (ii) any amount(s) (including any excess cash margin or excess cash collateral) owed or held by the party that is entitled to the Net Settlement Amount under any other agreement or arrangement between the parties. Triangular Setoff Option: 10.

CREDIT, FINANCIAL RESPONSIBILITY AND EVENTS OF DEFAULT. 10.1. If either party (“X”) has reasonable grounds for insecurity regarding the performance of any obligation under this Contract (whether or not then due) by the other party (“Y”) (including, without limitation, as a result of the occurrence of a material change in the creditworthiness or financial condition of Y or its Guarantor, if applicable), X may demand Adequate Assurance of Performance. Y hereby grants to X a continuing first priority security interest in, lien on and right of setoff against all Adequate Assurance of Performance in the form of cash transferred by Y to X pursuant to this Section 10.1. Upon the return by X to Y of such Adequate Assurance of Performance, the security interest and lien granted hereunder on that Adequate Assurance of Performance shall be released automatically and, to the extent possible, without any further action by either party. 10.2. In the event (each an “Event of Default”) either party (the “Defaulting Party”) or its Guarantor, as applicable, shall: (i) make an assignment or any general arrangement for the benefit of creditors; (ii) file a petition or otherwise commence, authorize or acquiesce in the commencement of a proceeding or case under any bankruptcy or similar law for the protection of creditors or have such petition filed or proceeding commenced against it; (iii) otherwise become bankrupt or insolvent (however evidenced); (iv) be unable to pay its debts as they fall due; (v) have a receiver, provisional liquidator, conservator, custodian, trustee or other similar official appointed with respect to it or substantially all of its assets; (vi) fail to perform any obligation to the other party with respect to any Credit Support Obligations relating to the Contract; (vii) fail to give Adequate Assurance of Performance under Section 10.1 within two Business Days of Notice by the other party; (viii) not have paid any amount due the other party hereunder on or before the second Business Day following Notice that such payment is due; (ix) be the affected party with respect to any Additional Event of Default, (x) fail to comply with any material representation or warranty under this Contract if such failure is not remedied within five Business Days after Notice, (xi) fail to deliver Product in the case of a Seller, or fail to receive Product in the case of a Buyer, under a Transaction other than by reason of Force Majeure, for two consecutive Delivery Months or three cumulative Delivery Months in any twelve Month period; or (xii) fail to perform or breach any other material obligation under this Contract (except to the extent such failure constitutes a separate Event of Default and except for such party’s obligations to deliver or receive Product (the exclusive remedies which are provided for in Sections 3 or 10)), if such failure is not remedied within three Business Days after receipt of Notice; then the other party (the “Non-Defaulting Party”) shall have the right, at its sole election, to immediately withhold and/or suspend deliveries of Product, offset all or any portion of the unpaid balance against monies owed by the Defaulting Party, withhold or suspend payments upon Notice and/or to terminate and liquidate the Transactions under the Contract, in the manner provided in Section 10.3, in addition to any and all other remedies available hereunder; provided that no suspension of performance shall continue for more than ten Business Days unless an early termination date has been declared in accordance with Section 10.3. 10.3. If an Event of Default has occurred and is continuing, the Non-Defaulting Party shall have the right, by Notice to the Defaulting Party, to designate a Day, no earlier than the Day such Notice is given and no later than twenty Days after such Notice is given, as an early termination date (the “Early Termination Date”) for the liquidation and termination pursuant to Section 10.3.1 of all Transactions under the Contract, each a “Terminated Transaction”. On the Early Termination Date, all Transactions will terminate, other than those Transactions, if any, that may not be liquidated and terminated under Applicable Law (“Excluded Transactions”), which Excluded Transactions must be liquidated and terminated as soon thereafter as is legally permissible, and upon termination shall be a Terminated Transaction and be valued consistent with Section 10.3.1 below. With respect to each Excluded Transaction, its actual termination date shall be the Early Termination Date for purposes of Section 10.3.1. 10.3.1. As of the Early Termination Date, the Non-Defaulting Party shall determine, in good faith and in a commercially reasonable manner, (i) the amount owed (whether or not then due) by each party with respect to all Product delivered and received between the parties under Terminated Transactions and Excluded Transactions on and before the Early Termination Date and all other applicable charges relating to such deliveries and receipts (including without limitation any amounts owed under Section 3.2) for which payment has not yet been made by the party that owes such payment under this Contract and (ii) the Market Value, as defined below, of each Terminated Transaction. The Non-Defaulting Party shall (x) liquidate and accelerate each Terminated Transaction at its Market Value, so that each amount equal to the difference between such Market Value and the Contract Value, as defined below, of such Terminated Transaction(s) shall be due to the Buyer under the Terminated Transaction(s) if such Market Value exceeds the Contract Value and to the Seller if the opposite is the case; and (y) where appropriate, discount each amount then due under clause (x) above to present value in a commercially reasonable manner as of the Early Termination Date (to take account of the period between the date of liquidation and the date on which such amount would have otherwise been due pursuant to the relevant Terminated Transactions). For purposes of this Section 10.3.1, “Contract Value” means the amount of Product remaining to be delivered or purchased under a Transaction multiplied by the Price, and “Market Value” means the amount of Product remaining to be delivered or purchased under a Transaction multiplied by the market price for a similar Transaction at the Delivery Location(s) determined by the Non- Defaulting Party in a commercially reasonable manner. To ascertain the Market Value, the Non-Defaulting Party may consider (i) any or all of the settlement prices of Product futures contracts, quotations from leading dealers in energy swap contracts or physical trading markets for the Product, where such leading dealers are not the parties or their Affiliates, similar sales or purchases and any other bona fide third-party offers, any other third party information, including, without limitation, quotations (either firm or indicative) of relevant prices, yields, yield curves, volatilities, spreads or other market data for the relevant markets, and (ii) in the absence of external sources under (i), any internal sources of information, all adjusted for the length of the term and differences in transportation costs. A party shall not be required to enter into a replacement Transaction(s) in order to determine the Market Value. Any extension(s) of the term of a Transaction to which parties are not bound as of the Early Termination Date (including but not limited to “evergreen provisions”) shall not be considered in determining Contract Values and Market Values. For the avoidance of doubt, any option pursuant to which one party has the right to extend the term of a Transaction shall be considered in determining Contract Values and Market Values. The rate of interest used in calculating net present value shall be determined by the Non-Defaulting Party in a commercially reasonable manner. 10.3.2. The Non-Defaulting Party shall net or aggregate, as appropriate, any and all amounts owing between the parties under Section 10.3.1, so that all such amounts are netted or aggregated to a single liquidated amount payable by one party to the other (the “Net Settlement Amount”). At its sole option and without prior Notice to the Defaulting Party, the Non-Defaulting Party is hereby authorized to setoff any Net Settlement Amount against (i) any margin or other collateral held by a party in connection with any Credit Support Obligation relating to the Contract and (ii) any amount(s) (including any excess cash margin or excess cash collateral) owed or held by the party that is entitled to the Net Settlement Amount under any other agreement or arrangement between the parties. Triangular Setoff Option: 10.