Direct Agreement step in and substitution rights (in the ... … · Direct Agreement step‐in and...
Transcript of Direct Agreement step in and substitution rights (in the ... … · Direct Agreement step‐in and...
Direct Agreement step‐in and substitution rights (in the context of a Power Purchase Agreement) in one slide.
Project Company Breaches PPA
[90] Day Standstill Period
Offtaker Issues Enforcement Notice to
Security Agent
Offtaker Issues Cure Notice specifying the default that may mature into an Event of
Default, confirming cure period
During Standstill Period:
• Offtaker may not take any Enforcement Action (the taking by the Offtaker of any right to suspend, terminate, or rescind the PPA)
• Security Agent may deliver Step‐In Noticeappointing Appointed Representative (to perform obligations of Project Company, and authority to exercise rights of Project Company in accordance with Step‐In Undertaking) under PPA
• Assumption becomes effective on Assumption Date
• If Appointed Representative or Substitute not appointed, then Offtaker may pursue all remedies under the PPA or at law
[??] day Step‐In Period
During Step‐In Period
• Appointed Representative has [30 ‐ 60] days after Assumption Date to remedy payment defaults specified in Enforcement Notice, up to [90 ‐ 120] days to remedy other defaults (that are capable of remedy)
• Offtaker deals with Appointed Representative under PPA
• Appointed Representative may step‐out at any time
• Security Agent may appoint a Substitute to whom the PPA will be novated
• Appointed Representative not liable for defaults except as provided in Step‐In Undertaking
Step‐In Period expires when either:
• Appointed Representative steps out (in which case Offtaker may pursue all remedies under the PPA or at law), or
• PPA novated from Project Company to Substitute
If breach is not cured, Project Company Event of Default occurs (but Offtaker may
not take an Enforcement Action)
Offtaker may have ability to issue Termination Notice specifying the date on which termination becomes effective (usually within an agreed window)
Substitute/Restructured Project
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