Mandatory Step-Up Clause Samples

Mandatory Step-Up. If a Share Participant (a “Defaulting Participant”) defaults under a Related Power Sales Agreement and the District elects to terminate that Defaulting Participant’s entitlement to Output, the Purchaser will purchase from the District, commencing on a date fifteen (15) days following written notice from the District (such date, the “Step-Up Effective Date”), Purchaser’s pro rata share of the Output to which the Defaulting Participant was entitled from and after the Step-Up Effective Date, on the terms and conditions set forth in this Agreement (other than Section 7.01(A)), for a term equal to the lesser of the Defaulting Participant’s remaining contract term or the remaining term of this Agreement. For purposes of this Section 5.14, the Purchaser’s pro rata share of a Defaulted Participant's Output entitlement (referred to herein as the “Purchaser's Step-up Percentage”) shall be determined based on the Purchaser’s Percentage divided by the sum of Purchaser’s Percentage, the percentage of Output shares held by other Share Participants excluding the Defaulting Participant, and the Output share retained by the District. For example, if the Purchaser’s Percentage is 26%, the Defaulting Participant’s share is 10%, the District’s share is 39% and the other Share Participants’ shares are 25%, the Purchaser’s Step-Up Percentage under this section would be: 10% x [(26% ÷ (26% + 39% + 25%)] = 2.89%, to be added to Purchaser’s Percentage For the avoidance of doubt, Purchaser shall not be liable for any amounts owed by the Defaulting Participant to the District prior to the Step-Up Effective Date (and Purchaser shall have no obligation or liability to perform any of the obligations under the Related Power Sales Agreement and no liability for any default or breach thereunder), and any amounts for which the Purchaser shall become liable under this Section 5.13 shall be determined under this Agreement and not under the Related Power Sales Agreement. If as a result of a Share Participant's default under a Related Power Sales Agreement, the District imposes the mandatory step-up requirement pursuant to the terms of this Section 5.14, a portion of the damages recovered by the District that were awarded to compensate the District for prospective losses, if any, directly attributable to the early termination of such Related Power Sales Agreement (net of costs and expenses), adjusted for the number of years remaining under this Agreement (if less than the period for which such...