16.11.1 The Contractor will want to retain flexibility in case its sub-contracting or financing arrangements need updating, but the Authority will want to ensure that this does not prejudice the Project, and that the Project Documents and Financing Agreements reviewed by it prior to Financial Close, as part of its due diligence, are not simply rewritten. Section 22.3.8 ensures that the Authority's own exposure to liability on termination of the Contract is not increased without the Authority's consent, despite any changes being made to the Project Documents or Financing Agreements. Section 34 (Refinancing) contains further provisions relating to the amendment of Financing Agreements. If, however, an Authority feels that this protection is insufficient and that any Project Document or Financing Agreement entered into by the Contractor is sufficiently important to require ongoing oversight, provision for this may be made in the Contract. Authorities should not use this as a device to micro-manage delivery of the Service. Suitable drafting is as follows:
16.11.1 Delivery of Initial and Changed Project Documents and Financing Agreements
(a) The Contractor has provided to the Authority copies of the Project Documents244 [(as listed in Part 1 of Schedule [ ])] and of the Initial Financing Agreements [(as listed in Part 2 of Schedule [ ])].
(b) Without prejudice to the provisions of Clauses 16.11.2 or 16.11.3, or to the definition of Senior Financing Agreements in Clause 1, if at any time an amendment is made to any Project Document or Financing Agreement, or the Contractor enters into a new Project Document or Financing Agreement (or any agreement which affects the interpretation or application of any Project Document or Financing Agreement), the Contractor shall deliver to the Authority a conformed copy of each such amendment or agreement within ten (10) Business Days of the date of its execution or creation (as the case may be), certified as a true copy by an officer of the Contractor.
16.11.2 Changes to Project Documents
The Contractor shall perform its obligations under, and observe all of the provisions of, the Project Documents and shall not:
(a) terminate or agree to the termination of all or part of any Project Document;
(b) make or agree to any material variation of any Project Document;
(c) in any material respect depart from its obligations, (or waive or allow to lapse any rights it may have in a material respect), or procure that any counterparty to a Project Document in any material respect departs from its obligations (or waives or allows to lapse any rights they may have in a material respect), under any Project Document; or
(d) enter into (or permit the entry into by any other person of) any agreement replacing all or part of (or otherwise materially and adversely affecting the interpretation of) any Project Document, unless the proposed course of action (and any relevant documentation) has been submitted to the Authority for review and there has been no objection made by the Authority within [ ] Business Days of receipt by the Authority of such submission, or such shorter period as may be agreed by the parties, [and provided, in the circumstances specified in Clause 16.11.2(a), that the Contractor has complied with the provisions of [Section 16 (Equality Legislation,Sub-Contracting, Employees and Documentary Changes)].245 The Authority may only make objection on the following reasonable grounds [ ].246
16.11.3 Changes to Financing Agreements
Without prejudice to the provisions of Clauses 16.11.1 (Delivery of Initial and Changed Project Documents and Financing Agreements), 22.3 (Changes to Financing Agreements and Project Documents), and 34 (Refinancing), the Contractor shall not, without the prior written consent of the Authority, enter into new Financing Agreements or terminate, amend, waive its rights or otherwise deal with its Financing Agreements if the same may reasonably be expected to have a material adverse effect on the ability of the Contractor to perform its obligations under the Project Documents or this Agreement.
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244 If there are any key second tier sub-contracts (beneath the main construction Sub-Contract or operating Sub-Contract) these could also be listed here and additionally referenced, as appropriate, in Clauses 16.11.1 (b) and 16.11.2.
245 Reference to control over Sub-Contractors is only relevant if the Authority has decided to take approval rights as described in Section 16.8. If so, the relevant clause should be cross referenced.
246 The Authority should list out its possible grounds of objection, which may be based around any adverse consequences to the Contractor, the Authority or the Services. If the Contract makes provision for a formal Review Procedure, proposed changes pursuant to this Clause 16.11.2 could be put through this rather more detailed procedure and this provision amended accordingly (see for example the March 2006 BSF School Standard Form on the PfS web site at Clause 7 and Schedule 8 and in particular paragraph 3.1.2 "Grounds of Objection").