1.1 If Sub-hubco terminates this Agreement pursuant to Clause 39 (Authority Events of Default) or the Authority terminates this Agreement pursuant to Clause 42.1 the Authority shall pay to Sub-hubco the "Authority Default Termination Sum" as set out in paragraph 1.2.
1.2 Subject to paragraphs 1.4 to 1.6 below the Authority Default Termination Sum shall be an amount equal to the aggregate of:
1.2.1 the Base Senior Debt Termination Amount;
1.2.2 Redundancy Payments and Sub-Contractor Losses; and EITHER;
1.2.3 [an amount which when taken together with:
(a) dividends (or other distributions) paid by Sub-hubco on its share capital on or before the Termination Date; and
(b) interest paid and principal repaid by Sub-hubco on Subordinated Debt on or before the Termination Date,
taking account of the actual timing of all such payments, gives a real internal rate of return on the share capital subscribed and Subordinated Debt advanced of [insert base case IRR];]
OR
1.2.4 [the amount for which the share capital of Sub-hubco and the Subordinated Debt could have been sold on an open market basis based on the Relevant Assumptions, ;] OR
1.2.5 [all amounts shown in the [base case] as payable by Sub-hubco from the Termination Date, either in dividends or other distributions on the share capital of Sub-hubco or as payments of interest or repayments of principal on the Subordinated Debt, each amount discounted back at the [base case IRR for share capital or Subordinated Debt (as appropriate)] from the date on which it is shown to be payable in the [base case] to the Termination Date;]
LESS, to the extent it is a positive amount, the aggregate of without double counting in relation to the calculation of the Base Senior Debt Termination Amount or the amounts below:
1.2.6 the value of any right of Sub-hubco to receive insurance proceeds (save where such insurance proceeds are held in the Insurance Proceeds Account and are to be applied in accordance with Clause 53.19 of this Agreement in reinstatement, restoration or replacement or, in the case of any third party legal liability or employer's liability, in satisfaction of the claim, demand, proceeding or liability) or sums due and payable from third parties (but only when received from third parties) but excluding any claims under any Sub-Contracts or claims against other third parties which have not been determined or have been determined but not yet paid provided that in such case Sub-hubco shall assign any such rights and claims under the Sub-Contracts or claims against other third parties to the Authority and give the Authority reasonable assistance in prosecuting such claims;
1.2.7 to the extent realised before the Invoice Date the market value of any other assets and rights of Sub-hubco (other than those transferred to the Authority pursuant to this Agreement) less liabilities of Sub-hubco properly incurred in carrying out its obligations under this Agreement as at the Termination Date provided that no account should be taken of any liabilities and obligations of Sub-hubco arising out of:
(a) agreements or arrangements entered into by Sub-hubco to the extent that such agreements or arrangements were not entered into in connection with Sub-hubco's obligations in relation to the Project; or
(b) agreements or arrangements entered into by Sub-hubco to the extent that such agreements or arrangements were not entered into in the ordinary course of business and on commercial arm's length terms; and
1.2.8 amounts which the Authority is entitled to set off pursuant to Clause 46.12 of this Agreement.
1.3 To the extent that such assets and rights referred to in paragraph 1.2.7 above are not realised and applied by the Invoice Date, Sub-hubco shall on payment of the Authority Default Termination Sum assign such assets and rights to the Authority.
1.4 If the aggregate of the amounts referred to in paragraphs 1.2.1 and 1.2.3 is less than the Revised Senior Debt Termination Amount, then the Authority Default Termination Sum shall be increased so that it is equal to the aggregate of the Revised Senior Debt Termination Amount and the amount referred to in paragraph 1.2.2 LESS the amounts referred to in paragraphs 1.2.6 to 1.2.8 above; provided always that (a) the amount referred to in paragraph 1.2.2 shall only be paid to the extent that Sub-hubco has demonstrated to the reasonable satisfaction of the Authority that the amount will not be applied (in whole or in part) in payment of any [Distribution] and (b) if, at the time of termination, there are any Additional Permitted Borrowings outstanding, no Sub-Contractor Losses shall be paid in respect of any Sub Contract in circumstances where there is an event of default under such Sub-Contract which would entitle Sub-hubco to terminate such Sub-Contract.
1.5 If a [Distribution] is made whilst any Additional Permitted Borrowing is outstanding and Sub-hubco has wilfully, or through gross negligence failed to comply with its obligations under clause 9.4.4(a) of the Funders' Direct Agreement then in addition to the deduction of the [Distribution] made pursuant to paragraph v of the definition of Revised Senior Debt Termination Amount, the Authority shall be entitled to set off the value of that [Distribution] a second time against the Authority Default Termination Sum, provided that the amount of the Authority Default Termination Sum shall never be less than the Revised Senior Debt Termination Amount.
1.6 If Sub-hubco has wilfully or through gross negligence failed to comply with its obligations under clause 9.4.4(b) of the Funders' Direct Agreement and there has been an overstatement of the cash balances by Sub-hubco as at that date which has caused the Authority to reasonably believe that it would be required to pay a lesser sum at the Termination Date than it actually is required to pay under the terms of this Section 1 (Compensation on Termination for Authority Default and Voluntary Termination [and Termination on an Authority Break Point Date]), then the Authority Default Termination Sum shall be reduced by the amount of such overstatement (to the extent such overstatement is still applicable at the Termination Date), provided that the amount of the Authority Default Termination Sum will never be less than the Revised Senior Debt Termination Amount.
1.7 The Authority Default Termination Sum shall be payable in accordance with Section 5 (General) of this Schedule Part 17 (Compensation on Termination).