23.1 For the purposes of this Agreement, each of the following is a hubco Event of Default :
23.1.1 the occurrence of any hubco Event of Default or Sub-hubco Event of Default, in either case as defined in the relevant Project Agreement (other than one resulting from an Insolvency Event (or equivalent event under the relevant Project Agreement) in relation to the Project Service Provider, but including for this purpose any right of the Project Agreement Counterparty to terminate as a result of a "Prohibited Act" as defined in the relevant Project Agreement)) in respect of one or more Project Agreements provided that, where the event in question is one which is capable of remedy in terms of the applicable Project Agreement, such event shall comprise a hubco Event of Default:
(a) at the instance of any Participant who is a Project Agreement Counterparty or is otherwise directly affected by such event by virtue of an interest or involvement in the relevant Facilities, on its occurrence; and
(b) at the instance of any other Participant, on the expiry of any remedy period permitted under the applicable Project Agreement without it being remedied;
23.1.2 the occurrence of a Significant Performance Failure;
23.1.3 hubco committing a material breach of its obligations under this Agreement (other than as a consequence of a breach by one or more of the Participants of their obligations under this Agreement) including:
(a) failure to take out and maintain the Insurances in accordance with Clause 17.1; and/or
(b) any breach arising pursuant to Clause 5.4;
23.1.4 hubco ceasing to provide or procure the provision of all or a substantial part of the Partnering Services in accordance with this Agreement (other than as a consequence of a breach by one or more of the Participants of their obligations under this Agreement);
23.1.5 hubco commits a material breach of its obligations under this Agreement (other than as a consequence of a breach by one or more of the Participants of their obligations under this Agreement) which results in the criminal prosecution and conviction of hubco or any hubco Party under the Health and Safety Regime (an "H&S Conviction") provided that an H&S Conviction of a hubco Party shall not constitute a hubco Event of Default if either:
(a) within ninety (90) Business Days from the date of the H&S Conviction (or, in the case of H&S Conviction which is subject to an appeal or any further judicial process and where such appeal or further judicial process does not result in the successful appeal against or quashing of the H&S Conviction, within sixty (60) Business Days of the date of the decision of such appeal or judicial process), the involvement in this Agreement of each relevant hubco Party (which in the case of an individual director, officer or employee shall be deemed (if it is reasonable to so deem) to include the hubco Party of which that person is a director, officer or employee) is terminated and a replacement is appointed by hubco in accordance with Clause 27.2 below; or
(b) within forty (40) Business Days of the H&S Conviction hubco puts forward a method statement which specifies in sufficient detail the changes to working practices that will be implemented to prevent any recurrence of the events leading up to the H&S Conviction and that method statement is approved by the Participants, such approval not to be unreasonably withheld or delayed;
23.1.6 hubco failing to comply with the provisions of Clause 27 (Assignation and sub-contracting);
23.1.7 hubco failing to pay any sum or sums due to the Participants (or any of them) under this Agreement (which sums are not in dispute) which, either singly or in aggregate, exceed(s) £10,000 (index linked) and such failure continues for sixty (60) Business Days from receipt by hubco of a written notice of non payment from the Participants;
23.1.8 an Insolvency Event occurs in relation to hubco;
23.1.9 an Insolvency Event (or equivalent event in terms of the relevant Project Agreement) occurs in relation to a Project Service Provider other than hubco; and
23.1.10 any Project Service Provider fails (after having received a valid notice from its relevant Project Agreement Counterparty) to terminate any Supply Chain Agreement to which it is a party and to procure that a replacement Supply Chain Member is appointed in accordance with the provisions of the relevant Project Agreement.
23.2 Each Party shall notify the others in writing of the occurrence, and details, of any hubco Event of Default promptly on such Party becoming aware of its occurrence, and hubco shall notify the Participants in writing of any event or circumstance which is likely, with the passage of time or otherwise, to constitute or give rise to a hubco Event of Default promptly on hubco becoming aware of such event or circumstance.
23.3 On the occurrence of a hubco Event of Default, without prejudice to the rights of the Participants [(acting together)]6 pursuant to Clause 23.4 to 23.13, each Participant may elect to suspend the exclusivity granted to hubco pursuant to Clause 9.1 and/or Clause 9.2 by serving written notice of such suspension on hubco. Without prejudice to the rights of each of the Participants under Clause 9.7, any such suspension shall expire:
23.3.1 following written notice to that effect being served on hubco by the Participant in question, copied to the TPB; and
23.3.2 automatically where the hubco Event of Default has been remedied or where Clause 23.12.2(b) applies.
23.4 On the occurrence of a hubco Event of Default, or within a reasonable time after the Participants become aware of the same, and while the same is subsisting, the Participants may [(acting together)]7:
23.4.1 in the case of any hubco Event of Default referred to in Clauses 23.1.1 to 23.1.4 (inclusive) and 23.1.6 either (in their absolute discretion):
(a) exercise their rights under Clause 23.6; or
(b) serve written notice of default on hubco requiring hubco at hubco's option either:
(i) to remedy the hubco Event of Default referred to in such notice of default (if the same is continuing) within twenty (20) Business Days of such notice of default; or
(ii) to put forward within twenty (20) Business Days of such notice of default a programme to the reasonable satisfaction of the Participants (acting together) (set out, if appropriate, in stages) for remedying the hubco Event of Default (a "Remediation Programme") or in the case of a Significant Performance Failure, to satisfy the Participants that the events or circumstances that gave rise to the Significant Performance Failure will not recur or has/have otherwise been addressed to the Participants' satisfaction (an "Improvement Programme"). In either case, such programme may include the PSDP proposing the replacement of a shareholder who holds shares directly or indirectly in the PSDP pursuant to Clause [14.16] of the Shareholders Agreement.
A Remediation Programme shall specify in reasonable detail the manner in, and the latest date by, which such hubco Event of Default will be remedied.
An Improvement Programme shall set out such detail so as to satisfy the Participants that the events or circumstances that gave rise to the Significant Performance Failure will not recur or has/have otherwise been addressed within the timescale as agreed in the Improvement Programme.
hubco shall only have the option of putting forward a Remediation Programme or an Improvement Programme (as the case may be) in accordance with this sub-clause if it first notifies the Participants within ten (10) Business Days of such notice of default that it proposes to do so.
For the avoidance of doubt the reversal of any action that was done without TPB consent shall remedy that breach provided that hubco shall indemnify each of the Participants in respect of all losses, costs and expenses incurred as a result of that action being so carried out.
If hubco fails:
(1) to remedy the hubco Event of Default in accordance with Clause 23.4.1(b)(i) and does not put forward a Remediation Programme or an Improvement Programme (as the case may be) in accordance with Clause 23.4.1(b)(ii), in either case within twenty (20) Business Days of the notice referred to in Clause 23.4.1(b); or
(2) (in the case of a Remediation Programme) to remedy the hubco Event of Default within the agreed time period(s) specified in the Remediation Programme; or
(3) (in the case of an Improvement Programme) to implement the material steps identified in the Improvement Programme to the reasonable satisfaction of the Participants within the relevant time period(s) specified in the Improvement Programme so as to satisfy the Participants (in their absolute discretion) that the events or circumstances that gave rise to the Significant Performance Failure will not recur or has/have otherwise been addressed within the timescales as agreed in the Improvement Programme,
the Participants shall be entitled to exercise their rights under Clause 23.6 and/or Clause 23.10;
23.4.2 in the case of any hubco Event of Default referred to in Clauses 23.1.5, 23.1.7 or 23.1.8, exercise their rights under Clause 23.10; or
23.4.3 in the case of a hubco Event of Default referred to in Clause 23.1.9 or 23.1.10 (each a "Project Service Provider Default") exercise their rights under Clause 23.9.
23.5 Where hubco puts forward a Remediation Programme or an Improvement Programme in accordance with Clause 23.4.1(b)(ii), the Participants shall have twenty (20) Business Days from receipt of the same within which to notify hubco in writing (in their absolute discretion) that they do not accept the programme, failing which the Participants shall be deemed to have accepted the programme. Where the Participants notify hubco that they do not accept the programme, the Participants may elect to exercise their rights under Clause 23.6.
23.6 Where the Participants are entitled to exercise their rights under this Clause 23.6, the Participants may, in their absolute discretion:
23.6.1 require hubco by written notice to terminate a Supply Chain Agreement to which it is a party or, as the case may be, procure the termination of any Supply Chain Agreement to which any Project Service Provider or Partnering Subcontractor is a party as employer which has caused or materially contributed to the occurrence of the hubco Event of Default and to procure that a replacement Supply Chain Member is appointed in accordance with the provisions of this Agreement or the relevant Project Agreement as the case may be; or
23.6.2 where hubco itself has been providing the Services in respect of which the hubco Event of Default occurred, require hubco to cease providing the relevant Services and procure that a replacement Supply Chain Member is appointed in accordance with Clause 27 (Assignation and sub-contracting) to provide such Services within sixty (60) Business Days.
23.7 If the Participants exercise their rights under Clause 23.6 in relation to a hubco Event of Default affecting provision of the Partnering Services, hubco shall forthwith put forward proposals for the interim management or provision of the relevant Partnering Services until such time as an alternative Supply Chain Member can be engaged by hubco. If hubco fails to do so (or its proposals if implemented are not reasonably likely to give adequate provision of the relevant Partnering Services) then without prejudice to the other rights of the Participants in this Clause 23 (Hubco Events of Default), the Participants (or any of them) may perform, or procure a third party to perform, such Partnering Services themselves and hubco shall indemnify each of the Participants in respect of their costs in so doing.
23.8 If hubco fails to terminate or procure the termination of the relevant Supply Chain Agreement to which it or any Project Service Provider or Partnering Subcontractor is a party as employer and to procure that a replacement Supply Chain Member is appointed in accordance with the provisions of Clause 23.6, the Participants shall be entitled at their option to exercise their rights in accordance with the provisions of Clause 23.10.
23.9 Where a Project Service Provider Default has occurred the following shall apply:
23.9.1 where the Project Service Provider Default is not capable of remedy, the Participants [(acting together)]8 shall be entitled to exercise the rights set out in Clause 23.10; and
23.9.2 where the Project Service Provider Default is capable of remedy, the Participants [(acting together)]9 may serve written notice of default on hubco requiring hubco to put forward within twenty (20) Business Days of such notice of default a reasonable programme (set out, if appropriate, in stages) for remedying the Project Service Provider Default and ensuring that such Project Service Provider Default does not recur (the "PSP Rectification Programme"), in which case:
(a) where hubco fails to put forward such PSP Rectification Programme in the twenty (20) Business Day period, the Participants [(acting together)]10 shall be entitled to exercise the rights set out in Clause 23.10; and
(b) where hubco puts forward a PSP Rectification Programme within the twenty (20) Business Day period:
(i) the PSP Rectification Programme shall specify in reasonable detail the manner in, and the latest date by, which the Project Service Provider Default is proposed to be remedied (where such default is capable of remedy) and the procedures and practices which hubco and/or the Project Service Providers propose to put in place to ensure that such Project Service Provider Default does not recur;
(ii) the Participants shall consider the PSP Rectification Programme and liaise with hubco to discuss its contents and, in particular, whether the Participants consider it to be sufficient that, if properly implemented by hubco and/or the Project Service Providers it would prevent the Project Service Provider Default from recurring. The Participants shall, in considering whether or not to approve a PSP Rectification Programme under consideration, be entitled to take into account the performance of hubco and/or the relevant Project Service Provider in implementing the provisions of any previous PSP Rectification Programme agreed in relation to a breach or breaches substantially similar to the breach or breaches which have given rise to the PSP Rectification Programme then under consideration;
(iii) the Participants and hubco shall use their respective best endeavours to ensure that such liaison as is appropriate takes place so as to ensure that the Participants are in a position to determine whether they are satisfied with the PSP Rectification Programme within twenty (20) Business Days after receipt by the Participants of the PSP Rectification Programme; and
(iv) where the Participants are not satisfied that the PSP Rectification Programme meets the requirements set out in Clause 23.9.2(b)(i) or agreement cannot be reached between the Participants and hubco as to the terms of a PSP Rectification Programme, the Participants [(acting together)]11 shall be entitled to exercise the rights set out in Clause 23.10.
23.10 Subject to Clause 23.12, where the Participants are entitled to exercise their rights under this Clause 23.10, the Participants may [(acting together)]12:
23.10.1 suspend hubco's exclusivity by notice in writing to hubco (a "Suspension Notice") until further notice (if any) (any such notice reinstating exclusivity being a "Reinstatement Notice");
23.10.2 during the period of any such suspension serve a TPA Material Default Notice; and
23.10.3 at any time (whether or not a Suspension Notice has been served on hubco) elect to treat such circumstances as a TPA Material Default by notice in writing to hubco (a "TPA Material Default Notice") in accordance with Clause 23.12.
If a Suspension Notice is served and no Reinstatement Notice has been served by the Participants within six (6) months of the date of the Suspension Notice then a TPA Material Default Notice shall be deemed to have been served on hubco on the expiry of such six (6) month period.
23.11 In the event of the Participants exercising their right under Clause 23.10.1:
23.11.1 none of the Participants shall have any liability whatsoever whether under this Agreement or in delict or at common law to hubco or any hubco Party save for in respect of any antecedent breach of this Agreement by that Participant; and
23.11.2 hubco shall no longer be required to provide the Partnering Services for the period of the suspension, provided that:
(a) the Participants (or any of them) may require hubco to provide all or any part of the Partnering Services and, if hubco agrees, such Partnering Services shall be provided on the terms set out in Clause 8 and Clause 10.2; and
(b) hubco shall recommence the provision of the Partnering Services on receipt of a Reinstatement Notice.
The provisions of Clause 23.12.1 and 23.12.2(a) shall apply mutatis mutandis to any Participant serving a notice of suspension under Clause 9.7 or Clause 23.3.
23.12 If the Participants serve a TPA Material Default Notice on hubco pursuant to Clause 23.10.3 (or are deemed to have served such a TPA Material Default Notice pursuant to Clause 23.10) then a TPA Material Default shall be deemed to have occurred whereupon:
23.12.1 the Participants [(acting together)]13 shall be entitled to terminate this Agreement with immediate effect by notice in writing to hubco (a "Default Termination Notice");
23.12.2 if no Default Termination Notice is given by the Participants pursuant to Clause 23.12.1 within twenty (20) Business Days of the deemed occurrence of the TPA Material Default then:
(a) the provisions of Clauses 14.12 to 14.19 of the Shareholders Agreement shall apply; and
(b) if a TPA Material Default Notice is served at a time when hubco's exclusivity has been suspended pursuant to Clauses 9.7, 23.3 or 23.10.1 or where the TPA Material Default Notice is deemed to have been given pursuant to Clause 23.10, then a Reinstatement Notice (and/or notice revoking such suspension in the case of Clauses 9.7 and 23.3) shall be deemed to have been given immediately on completion of the sale (at the end of the procedure in Clauses [14.12 to 14.16] of the Shareholders Agreement and the related provisions in the Articles of Association of hubco), of all the shares held by the PSDP in hubco to any Participant or Participants, the SFT and/or a third party purchaser.
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6 Under consideration by Territory
7 Under consideration by Territory
8 Under consideration by Territory
9 Under consideration by Territory
10 Under consideration by Territory
11 Under consideration by Territory
12 Under consideration by Territory
13 Under consideration by Territory