"Distribution"

means:

(a)  whether in cash or in kind, any:

i.  dividend or other distribution in respect of share capital (whether made validly in accordance with the Articles of Association or otherwise);

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;

"Exempt Refinancing"

means:

(a)  any Refinancing that was fully taken into account in the calculation of the Annual 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 Funding 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 Funding Agreements and/or amounts released from [Escrow Account] during the [Initial Availability Period], each as defined in the Senior Funding Agreements 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 Authority 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 Funding 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 Authority prior to being given;

viii.  failure by Project Co to obtain any consent by statutory bodies required by the Senior Funding 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 Funding Agreements;

(d)  any amendment, variation or supplement of any agreement approved by the Authority as part of any Qualifying Change 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;

"Insurance Undertaking"

has the meaning given in the rules from time to time of the Financial Services Authority;

"Margin"

[define by reference to Senior Funding Agreements;]

"Margin Gain"

means an amount equal to the lower of:

(a)  the Refinancing Gain; and

(b)  the higher of:

i.  zero; and

ii.  D - E;

where:

D = the Net Present Value of the Surplus Payments projected immediately prior to the Refinancing (taking into account the effect of the change in Margin only in relation to the Refinancing and the senior debt repayment profile immediately prior to the Qualifying 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 but disregarding any Distribution (including any payment under clause [ ] of the [Loan Stock Agreement]) that, but for the Refinancing, would not be made) to be made over the remaining term of this Agreement following the Refinancing; and

E = the Net Present Value of the Surplus Payments 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 over the remaining term of this Agreement following the Refinancing;

"Net Present Value"

means the aggregate of the discounted values, calculated as at the relevant date, of each of the relevant projected cashflows, in each case discounted at [7]%;

"Notifiable Financings"  

means any Refinancing described in paragraphs (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 refinancing or other arrangements that would have a similar effect;

"Project Accounts"

means accounts referred to in and required to be established under the Senior Funding Agreements;

"Qualifying Bank Transaction"

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 Funding 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 Funding 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 2006/48/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 Authority has been given; and/or

(c)  the grant by a Senior Funder of any other form of benefit or interest in either the Senior Funding 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 (b)vii above; 

iii.  any Qualifying Institution; or

iv.  any other institution in respect of which the prior written consent of the Authority has been given;

"Qualifying Institutions"

means [           ];

"Qualifying Refinancing"

means any Refinancing that will give rise to a Refinancing Gain greater than zero that is not an Exempt Refinancing;

"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;

"Refinancing Gain"

means an amount equal to the greater of zero and [(A - B)], where:

A =  the Net Present Value of the Surplus Payments 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 but disregarding any Distribution (including any payment under clause [ ] of the [Loan Stock Instrument]) that, but for the Refinancing, would not be made) to be made over the remaining term of this Agreement following the Refinancing; and

B =  the Net Present Value of the Surplus Payments 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 over the remaining term of this Agreement following the Refinancing;

"Regulated Collective Investment Scheme"

has the meaning given in the rules from time to time of the Financial Services Authority;

"Shareholder"

means any person from time to time holding share capital in Project Co or [HoldCo].