SECTION 5  SUB-HUBCO CHANGES

1  If Sub-hubco wishes to introduce a Sub-hubco Change, it shall serve a notice containing the information required pursuant to paragraph 2 of this Section 5 (Sub-hubco Changes) (a "Sub-hubco Notice of Change") on the Authority.

2  A Sub-hubco Notice of Change shall:

2.1  set out the proposed Sub-hubco Change in sufficient detail to enable the Authority to evaluate it in full;

2.2  specify Sub-hubco's reasons for proposing Sub-hubco Change;

2.3  indicate any implications of Sub-hubco Change;

2.4  indicate what savings, if any, will be generated by Sub-hubco Change, including:

2.4.1  whether a reduction of the Annual Service Payment is; or

2.4.2  whether such savings will be paid to the Authority in a lump sum,

in each case giving details in accordance with paragraph 8 of this Section 5 (Sub-hubco Changes);

2.5  indicate whether there are any critical dates by which a decision by the Authority is required; and

2.6  request the Authority to consult with Sub-hubco with a view to deciding whether to agree to Sub-hubco Change and, if so, what consequential changes the Authority requires as a result.

3  The Authority shall evaluate Sub-hubco Notice of Change in good faith, taking into account all relevant issues, including whether:

3.1  a revision of the Annual Service Payment will occur;

3.2  the Sub-hubco Change may affect the quality of the Services and/or the Works or the likelihood of successful completion of the Works and/or delivery of the Services (or any of them);

3.3  the Sub-hubco Change will interfere with the relationship of the Authority with third parties;

3.4  the financial strength of Sub-hubco is sufficient to perform the Works and/or Services after implementation of Sub-hubco Change;

3.5  the value and/or life expectancy of any of the Facilities will be reduced; or

3.6  the Sub-hubco Change materially affects the risks or costs to which the Authority is exposed.

4  As soon as practicable after receiving Sub-hubco Notice of Change, the parties shall meet and discuss the matters referred to in it, including in the case of a Relevant Change in Law those matters referred to in Clause 32.4 of this Agreement. During discussions the Authority may propose modifications to, or accept or reject, Sub-hubco Notice of Change.

5  If the Authority accepts Sub-hubco Notice of Change (with or without modification) the parties shall consult and agree the remaining details as soon as practicable and upon agreement the Authority shall issue a notice confirming Sub-hubco Change which shall set out the agreed Sub-hubco Change and:

5.1  shall enter into any documents to amend this Agreement or any relevant Ancillary Document which are necessary to give effect to Sub-hubco Change;

5.2  subject to paragraph 7 of this Section 5 (Sub-hubco Changes), the Annual Service Payment shall be revised in accordance with Section 6 (Changing the Financial Model) of this Schedule Part 16 (Change Protocol); and

5.3  Sub-hubco Change shall be implemented within the period specified by the Authority in its notice of acceptance.

6  If the Authority rejects Sub-hubco Notice of Change, it shall not be obliged to give its reasons for such a rejection and Sub-hubco shall not be entitled to reimbursement by the Authority of any of its costs involved in the preparation of Sub-hubco Notice of Change.

7  Unless the Authority's written acceptance expressly agrees to an increase in the Annual Service Payment or that Sub-hubco should be entitled to relief from any of its obligations, there shall be no increase in the Annual Service Payment or relief granted from any obligations as a result of a Sub-hubco Change.

8  If a Sub-hubco Change causes, or will cause, Sub-hubco's costs or those of a sub-contractor to decrease, there shall be a decrease in the Annual Service Payment such that any cost savings (following deduction of costs reasonably incurred by Sub-hubco in implementing such Sub-hubco Change) will be shared on the basis of fifty per cent (50%) of the saving being retained by Sub-hubco and fifty per cent (50%) of the saving being paid to the Authority as a lump sum within ten (10) Business Days of agreement or determination or by way of revision of the Annual Service Payment pursuant to Section 6 (Changing the Financial Model) of this Schedule Part 16 (Change Protocol).