1 Definitions and Interpretation
Schedule Part | Comment |
1 | Definitions and Interpretation |
Ancillary Documents The Authority should consider if there are any other project significant documents. See also note above on Clause 4.1. | |
Associated Companies If a fund or limited partnership or "50:50" owned vehicle (which is not a "subsidiary") or similar is in the relevant ownership chain of the SPV, this definition will need to be expanded to cover it. If any of the holders of equity in the SPV are limited partnerships or other funds, particular attention will need to be given to the Change of Ownership provisions during any lock-in period. | |
Authority Assets This definition (which is only used in the indemnity to the Authority in Clause 49.1.3) is intended to cover those parts of the Authority site that are not the subject of the sole remedy payment mechanism. In practice that means those parts of the site to which the SPV does not provide any service or, where the SPV does provide services to a facility, those parts over which the SPV does not take any element of availability risk. The Authority should also consider how equipment is treated - if the SPV is not responsible for maintenance and lifecycle of any items of equipment then such items should be included within the definition. | |
Authority Policies The relevant policies will vary on a project specific basis but an Authority should consider including Scottish Procurement Policy Note SPPN 0/2009 as the same may be updated or superseded from time to time. | |
Authority Services (NPD only) The Authority should complete on a project specific basis to reflect services (whether public facing or administrative or support services) being provided at the Facilities. | |
Certificate of Commencement This is only required if financial close does not coincide with contract signature, in which case suitable drafting to deal with conditions precedent will be required at Clause 2. | |
Collateral Agreements The Authority should specify on a project specific basis what professional team collateral warranties and key subcontractor (i.e. with design responsibility) collateral warranties are required. | |
Community Services (hub only) The Authority should complete on a project specific basis to reflect services (whether public facing or administrative or support services) being provided at the Facilities. | |
Completion Criteria Additional definitions consequent upon multiple phases drafting appear in square brackets. | |
Completion Date Insert agreed date on which completion is scheduled to occur. | |
Confidential Information Any information or classes of information that the parties agree should be treated as Commercially Sensitive Information should be included in Schedule Part 26(Commercially Sensitive Information). Standard provisions are included in Schedule Part 26 (Commercially Sensitive Information). | |
Contract Year This definition is relevant to the timing of annual reviews of Annual Service Payments (see Section 2 (Interpretation) of Schedule Part 1 (Definitions and Interpretation) paragraph 15). The Authority may prefer to amend the definition such that the timing of reviews occurs at the commencement of the Authority's financial year on 1 April. This may assist the Authority in setting annual expenditure budgets, although in many cases it will accelerate the timing of the annual review. | |
Contracting Associate This provision should be drafted on a project-specific basis to encompass any principal sub-contractors to the SPV. | |
Discriminatory Change in Law Definition to be completed on a project specific basis and will vary depending on the nature of the Facilities. | |
Equipment To be drafted on a project-specific basis linked as appropriate to Clause 16 and the Service Level Specification. | |
Funding Default | |
Interim Project Report | |
Initial Funding Agreements List those Funding Agreements put in place at Financial Close. | |
Liquid Market Unless agreed by the parties, a novation to a vehicle controlled by the Senior Funders under the Funders' Direct Agreement should not on its own be sufficient to constitute a Liquid Market. | |
NPD Mandatory Provisions Cross refer to the Mandatory NPD Articles of Association. | |
NPD Requirements The NPD Requirements reflect the fundamental principles of the NPD model. Note that the restriction on payments to shareholders does not extend to the SPV's share of any Refinancing Gain or savings generated by an SPV Change (which are payable directly to the investors and not caught by the Surplus payment provisions) and it is envisaged that these payments will made under the terms of the Subordinated Funding Agreements. Failure by the SPV to comply with the NPD Requirements may lead to termination of the Project Agreement. Termination in this scenario will give rise to compensation equivalent to that paid in the event of termination for breach of the refinancing or corrupt gifts provisions. | |
Original Senior Commitment Adjust for a bond transaction to refer to (a) the gross bond proceeds to be raised; and (b) the amount committed under the Senior Funding Agreements other than such bond proceeds in each case as at Financial Close (as adjusted to take into account any Qualifying Change). | |
Permitted Borrowing The "Committed Standby Facility", if used, will be any standby facility that is committed by the Senior Funders at Financial Close for the purposes of funding any unforeseen cost overruns, increased expenses or loss of revenues incurred by the SPV. If there is no such facility limb (c) of the definition of "Permitted Borrowing" will not be required. | |
Phase, Phase 1, Phase 1 Actual Completion Date etc Cross-refer to description of Phases, if relevant, or delete. | |
Senior Funding Agreements These are all documents relating to the Senior Debt and may include: • a credit agreement; • interest rate hedging agreements; and • security documents. Alternatively, bond documentation may be included, in which case the definition will include the bond trust deed, the terms and conditions of the bond, as well as security documents. A monoline insured deal will also include reference to the monoline's Policy and Endorsement and its insurance and Indemnity Agreement (each of which will be defined in the Agreement). Other financing structures will mean referring to other documents. The Authority should place limits on hedging agreements to allow only those agreements that comply with an agreed hedging policy and details of which have been notified to and acknowledged by the Authority to be included in the definitions of Base Senior Debt Termination Amount or Revised Senior Debt Termination Amount (as appropriate). The hedging policy may, of course, change over time, which will require agreement at the time. Where referred to in the Agreement, Senior Funding Agreements should mean those agreements as at the date of the Agreement as may be amended with the approval of the Authority pursuant to Clause 4.3. This is particularly important if Senior Debt is paid on early termination of the Agreement. On signature of the Agreement, the Authority has an assumed profile of its termination liabilities (based on the financing structure in place at financial close); the Authority should therefore generally have the right to approve any amendments to the financing agreements that would have the effect of changing the Authority's liability profile. If the SPV makes changes to the Senior Funding Agreements which have not been approved by the Authority for the purposes of Clause 4.3 they will be disregarded for the purposes of calculating termination sums unless they qualify as Additional Permitted Borrowing. | |
Whitley Agreements Include only where the incumbent employer of transferring staff is a health board or subcontractor of a health board or delete if no employee transfers. | |
Indexation The drafting assumes RPI as the index for both general indexation of amounts that are to be maintained through the life of the project at broadly day 1 levels and for indexation of the service payments in the Payment Mechanism. Authorities will wish to consider and seek advice on the appropriateness of other indices (including potentially a basket of indices) as alternatives to RPI. It is not essential that the same index is used for the purpose of "index linked" in Schedule Part 1 and indexing the service payment in Schedule Part 14 (Payment Mechanism). |