1. Project Co shall obtain the Board's prior written consent to any Qualifying Refinancing and both the Board and Project Co shall at all times act in good faith with respect to any Refinancing.
2. The Board shall be entitled to receive a 50% share of any Refinancing Gain arising from a Qualifying Refinancing.
3. The Board shall not withhold or delay its consent to a Qualifying Refinancing to obtain a greater than 50% share of the Refinancing Gain.
4. Project Co shall promptly provide the Board with full details of any proposed Qualifying Refinancing, including a copy of the proposed financial model relating to it (if any) and the basis for the assumptions used in the proposed financial model. The Board shall (before, during and at any time after any Refinancing) have unrestricted rights of audit over any financial model and documentation (including any aspect of the calculation of the Refinancing Gain) used in connection with the Refinancing whether that Refinancing is a Qualifying Refinancing or not.
5. The Board shall have the right to elect to receive its share of any Refinancing Gain as 228:
(a) a single payment in an amount less than or equal to any Distribution made on or about the date of the Refinancing;
(b) a reduction in the Service Payments over the remaining term of this Agreement; or
(c) a combination of any of the above.
6. The Board and Project Co will negotiate in good faith to agree the basis and method of calculation of the Refinancing Gain and payment of the Board's share of the Refinancing Gain (taking into account how the Board has elected to receive its share of the Refinancing Gain under paragraph 5 above). If the parties fail to agree the basis and method of calculation of the Refinancing Gain or the payment of the Board's share, the dispute shall be determined in accordance with Part 26 of the Schedule. (Dispute Resolution Procedure).
7. The Refinancing Gain shall be calculated after taking into account the reasonable and proper professional costs that each party directly incurs in relation to the Qualifying Refinancing and on the basis that all reasonable and proper professional costs incurred by the Board will be paid to the Board by Project Co within 28 days of any Qualifying Refinancing.
8. Without prejudice to the other provisions of this Part 29 of the Schedule, Project Co shall:
(a) notify the Board of all Notifiable Financings on becoming aware of the same and again when they are entered into and provide full details of the same; and
(b) include a provision in the Funding Agreements whereby it is entitled to be informed of any proposals which the Senior Funders may have to refinance the Funding Agreements.
9. Terms used in this Part 29 of the Schedule shall, unless the context otherwise requires, have the following meanings:
means:
(a) whether in cash or in kind, any:
(i) dividend or other distribution in respect of share capital;
(ii) reduction of capital, redemption or purchase of shares or any other reorganisation or variation to share capital;
(iii) payments under the Subordinated Funding Agreements (whether of principal, interest, breakage costs or otherwise);
(iv) payment, loan, contractual arrangement or transfer of assets or rights to the extent (in each case) it was put in place after Financial Close and was neither in the ordinary course of business nor on reasonable commercial terms;
(v) the receipt of any other benefit which is not received in the ordinary course of business and on reasonable commercial terms, or
(b) the early release of any Contingent Funding Liabilities, the amount of such release being deemed to be a gain for the purposes of any calculation of Refinancing Gain.
"EEA" means from time to time the European Economic Area as created by The Agreement on the European Economic Area 1992 or any successor or replacement body, association, entity or organisation which has assumed either or both the function and responsibilities of the European Economic Area.
means the projected blended rate of return to the Relevant Persons over the full term of this Agreement, having regard to Distributions made and projected to be made.
means:
(a) any Refinancing that was fully taken into account in the calculation of the Service Payments;
(b) a change in taxation or change in accounting treatment;
(c) the exercise of rights, waivers, consents and similar actions which relate to day to day administrative and supervisory matters, and which are in respect of
(i) breach of representations and warranties or undertakings;
(ii) movement of monies between the [Project Accounts] in accordance with the terms of the Senior Funders Agreements as at Financial Close;
(iii) late or non-provision of information, consents or licences;
(iv) amendments to sub-contracts;
(v) approval of revised technical and economic assumptions for financial model runs (to the extent required for forecasts under the Funding Agreements);
(vi) restrictions imposed by Senior Funders on the dates at which the Senior Debt can be advanced to Project Co under the Senior Funders Agreements and/or amounts released from [Escrow Account] during the [Initial Availability Period], each as defined in the Senior Funders Agreements 230 and which are given as a result of any failure by Project Co to ensure that the construction work is performed in accordance with the agreed construction programme and which is notified in writing by Project Co or the Senior Funders to the Board prior to being given;
(vii) changes to milestones for drawdown and/or amounts released from the [Escrow Account] during the [Initial Availability Period] set out in the Senior Funders Agreements and which are given as a result of any failure by Project Co to ensure that construction work is performed in accordance with the agreed construction programme and which is notified in writing by Project Co or the Senior Funders to the Board prior to being given;
(viii) failure by Project Co to obtain any consent by statutory bodies required by the Senior Funders Agreements; or
(ix) voting by Senior Funders and the voting arrangements between the Senior Funders in respect of the levels of approval required by them under the Senior Funders Agreements;
(d) any amendment, variation or supplement of any agreement approved by the Board as part of any Qualifying Variation under this Agreement.
(e) any sale of shares in Project Co [or HoldCo] by the shareholders or securitisation of the existing rights and/or interests attaching to shares in Project Co [or HoldCo provided that this paragraph (e) shall, in respect of shares in HoldCo, only apply for so long as HoldCo holds 100% of the issued share capital of Project Co];
(f) any sale or transfer of the Subordinated Funders' existing rights and/or interests under the Subordinated Funding Agreements or securitisation of the Subordinated Funders' existing rights and/or interests under the Subordinated Funding Agreements; or
(g) any Qualifying Bank Transaction.
has the meaning given in the rules from time to time of the Financial Services Authority;
means the aggregate of the discounted values, calculated as of the estimated date of the Refinancing, of each of the relevant projected Distributions, in each case discounted using the Threshold Equity IRR;
means any Refinancing described in paragraph (a) or (c) of the definition of Refinancing and any other arrangement which has or would have a similar effect or which has or would have the effect of limiting Project Co's or any Associated Company's ability to carry out any such arrangement.
means the nominal post-tax (i.e. post-tax with respect to Project Co, pre-tax with respect to Shareholders) Equity IRR calculated immediately prior to the Refinancing.
means accounts referred to in and required to be established under the Senior Funders Agreements.
means:
(a) the syndication by a Senior Funder, in the ordinary course of its business, of any of its rights or interests in the Senior Funders Agreements;
(b) the grant by a Senior Funder of any rights of participation, or the disposition by Senior Funder of any of its rights or interests (other than as specified in paragraph (a) above in respect of the Senior Funders Agreements in favour of (i) any other Senior Funder (ii) any institution which is recognised or permitted under the law of any member state of the EEA to carry on the business of a credit institution pursuant to Council Directive 2000/12/EC relating to the taking up and pursuit of business of credit institutions or which is otherwise permitted to accept deposits in the United Kingdom or any other EEA member state (iii) a local authority or public authority (iv) a trustee of a charitable trust which has (or has had at any time during the previous two years) assets of at least £10 million (or its equivalent in any other currency at the relevant time) (v) a trustee of an occupational pension scheme or stakeholder pension scheme where the trust has (or has had at any time during the previous two years) at least 50 members and assets under management of at least £10 million (or its equivalent in any other currency at the relevant time) (vi) an EEA or Swiss Insurance Undertaking (vii) a Regulated Collective Investment Scheme (viii) any Qualifying Institution or (ix) any other institution in respect of which the prior written consent of the Board has been given; and/or
(c) the grant by a Senior Funder of any other form of benefit or interest in either the Senior Funders Agreements or the revenues or assets of Project Co [or HoldCo], whether by way of security or otherwise, in favour of (i) any other Senior Funder (ii) any institution specified in paragraphs (b)(ii) to (vii) above (iii) any Qualifying Institution or (iv) any other institution in respect of which the prior written consent of the Board has been given. 231
means [ ]232
For listed bond transactions the following may be inserted.
"(a) any holder in due course of any security arising under or constituted by the Senior Funding Agreements in respect of which an application has been made for such security to be admitted to listing, either;
(i) on the Official List of the Financial Services Authority in its capacity as competent authority for the purposes of Part IV of the financial Services and Markets Act 2000 (and to trading on the London Stock Exchange); or
(ii) to the competent authority in any other EEA state; or
(b) in a situation where any security arising under or constituted by the Senior Funding Agreements Is no longer admitted to listing as described in paragraph (a) above, any person whose ordinary activities involve them in acquiring, holding or disposing of investments (as principal or agent) for the purposes of their business where the acquisition of the rights of a Senior Funder in the grant or disposition is made in concert with the [Shareholders and/or the Junior Debit Holders] for the purpose of giving rise to a Refinancing Gain; or
(c) a trustee for any other entity listed in paragraph (b) (ii) to (viii) or (c) (ii) or (iii) of the definition of Qualifying Bank Transaction other than a trustee whose acquisition, grant or disposition is made in concert with the [Shareholders and/or the Junior Debt Holders] for the purpose of giving rise to a Refinancing Gain."
means any Refinancing that will give rise to a Refinancing Gain greater than zero that is not an Exempt Refinancing.
means:
(a) any amendment, variation, novation, supplement or replacement of any Funding Agreement (other than any Subordinated Funding Agreement);
(b) the exercise of any right, or the grant of any waiver or consent, under any Funding Agreement (other than any Subordinated Funding Agreement);
(c) the disposition of any rights or interests in, or the creation of any rights of participation in respect of, the Funding Agreements (other than the Subordinated Funding Agreements) or the creation or granting of any other form of benefit or interest in either the Funders' Agreements (other than the Subordinated Funding Agreements) or the contracts, revenues or assets of Project Co whether by way of security or otherwise; or
(d) any other arrangement put in place by Project Co or another person which has an effect which is similar to any of (a)-(c) above or which has the effect of limiting Project Co's or any Associated Company's ability to carry out any of (a)-(c) above.
means an amount equal to the greater of zero and [(A - B) - C], where:
A = the Net Present Value of the Distributions projected immediately prior to the Refinancing (taking into account the effect of the Refinancing using the Financial Model as updated (including as to the performance of the Project) so as to be current immediately prior to the Refinancing) to be made to each Relevant Person over the remaining term of this Agreement following the Refinancing;
B = the Net Present Value of the Distributions projected immediately prior to the Refinancing (but without taking into account the effect of the Refinancing and using the Financial Model as updated (including as to the performance of the Project) so as to be current immediately prior to the Refinancing) to be made to each Relevant Person over the remaining term of this Agreement following the Refinancing; and
C = any adjustment required to raise the Pre-Refinancing Equity IRR to the Threshold Equity IRR.
has the meaning given in the rules from time to time of the Financial Services Authority;
means a Shareholder and any of its Associated Companies.
means any person from time to time holding share capital in Project Co or [HoldCo].
means a person providing finance under a Subordinated Funding Agreement.
means [ ] as at the date of this Agreement.
means [ ]%.
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228 Boards should take into account UK Accounting Standards when deciding how to take any share in refinancing out of the project. Under current Accounting Standards Boards will be required to take the benefit by way of a reduction in Service Payments under Paragraph 5 (b) to ensure that benefits from the Project are seen to be applied to the Project.
229 Subject to Scottish Government Health Directorates Private Finance and Capital Unit changes to cover administrative waivers etc
230 These definitions should follow those contained in the Senior Funders Agreements - the Initial Availability Period being the construction phase drawdown period. These will need to be checked.
231 Any attempt by banks to attempt to conceal refinancings behind elaborate avoidance structures will be regarded as a serious breach of these provisions and dealt with accordingly.
232 If there are particular institutions which for particular reasons do not come within the other heads of Qualify Bank Transaction bidders may propose to the Board that such institutions be included as Qualifying Institutions. In the light of the broad drafting of the other provisions in the definition of Qualifying Bank Transaction, the Board would expect any such proposal to be specific and limited. Broad group definitions will not be entertained.
233 This is the nominal post tax (i.e. post tax with respect to Project Co. pre-tax with respect to the shareholder sin Project Co) Equity IRR set out in the Base Case, which excludes the effects of any anticipated refinancing.