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The PPA provides a similar provision if CAPP fails to take and pay for electric energy. CAPP is required to pay Seller "Resale Damages" equal to the positive difference, if any, between the energy price as provided in the PPA less the sales price realized by Seller selling such electric energy; provided, however, CAPP's failure to pay for such electric energy, for extended or repeated occasions, is a default under the PPA and Seller may terminate the PPA in such an event. As CAPP will have paid 3/5 of the total electric cost under the PPA as a capacity payment, CAPP believes it is a remote possibility that Resale Damages will ever occur. Seller and CAPP have also agreed on liquidated damages that do not reflect the actual economic loss of either party at the time of termination of the PPA as a result of a default. The amount of such liquidated damages is explained below. Upon a Seller default under the PPA and CAPP's election to terminate the PPA, the parties have agreed to liquidated damages through the payment of a Buyer Termination Payment (provided in Article 12 of the PPA and reference is made to such article). Liquidated damages, being the Buyer Termination Payment, is provided to be the amount equal to (i) the percentage of the principal amount of the outstanding CAPP contract revenue bonds from the initial capacity payment made to Seller under the PPA related to the total initial principal amount of the CAPP contract revenue Bonds (Seller is not responsible for any costs of issuance or reserve fund portions of the CAPP contract revenue bond issue) (such percentage amount is referred to as "Seller's Bond Portion"), (ii) plus the greater of (a) the "make whole premium" related to the Seller's Bond Portion or (b) CAPP's economic damages, capped at $120 million ratably declining over the term of the PPA and (iii) less the aggregate amount of any Replacement Damages paid by Seller to CAPP over (1) the immediately preceding three (3) year period prior to any New Collateral Refinancing or (2) the immediately preceding five (5) year period following a New Collateral Refinancing. Under the PPA, Seller has the ability to make termination of the agreement more likely by defaulting if it determines that it can enter a more economically advantageous transaction by paying CAPP the Buyer Termination Payment. Upon a CAPP default under the PPA (presumably related to unmitigated non- appropriations by Participating Members resulting in CAPP's inability to pay Seller for electric energy under the PPA) and Seller's election to terminate the PPA, the parties have agreed to liquidated damages through the payment of a Seller Termination Payment (provided in Article 12 of the PPA). Liquidated damages, being the Seller Termination Payment, is provided to be the amount equal to (i) Seller's economic damages, capped at $120 million ratably declining over the term of the PPA, (ii) plus the present value of unpaid New Governmental Charges (as defined below) for which CAPP is responsible, (iii) less the aggregate amount of any Resale Damages paid by CAPP to Seller over certain time periods in the PPA, and (iv) plus an amount equal to the unearned portion of the CAPP capacity payment to Seller, determined on a monthly straight line amortization (as opposed to the actual bond amortization schedule) over the term of the PPA. In such an event of CAPP default, CAPP would not be able to defease all of its contract revenue bonds and a portion of each Participating Member's capacity payments under the CAPP-Participating Member Contract will remain, even though such Participating Members will not receive any electric energy through the then terminated PPA. 5 0: u0001J