EEA

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;

Equity IRR

the projected blended rate of return to the Relevant Persons over the full term of this Contract, having regard to Distributions made and projected to be made;

Exempt Refinancing63

(a)  any Refinancing that was fully taken into account in the calculation of the Unitary Charge;64

(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 Financing Agreements as at Financial Close (or as amended with the prior written approval of the Authority);

(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 Financing Agreements as at Financial Close (or as amended with the prior written approval of the Authority));

(vi)  restrictions imposed by the Senior Lenders on the dates at which the Senior Debt can be advanced to the Contractor under the Senior Financing Agreements and/or amounts released from the [Escrow Account] during the [Initial Availability Period]65, each as defined in the Senior Financing Agreements66 as at Financial Close or as amended with the prior written approval of the Authority) and which are given as a result of any failure by the Contractor to ensure that the construction work is performed in accordance with the agreed construction programme and which are notified in writing by the Contractor or the Senior Lenders 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 Financing Agreements as at Financial Close or as amended with the prior written approval of the Authority) and which are given as a result of any failure by the Contractor to ensure that construction work is performed in accordance with the agreed construction programme and which are notified in writing by the Contractor or the Senior Lenders to the Authority prior to being given;

(viii)  failure by the Contractor to obtain any consent by statutory bodies required by the Senior Financing Agreements as at Financial Close or as amended with the prior written approval of the Authority); or

(ix)  voting by the Senior Lenders and the voting arrangements between the Senior Lenders in respect of the levels of approval required by them under the Senior Financing Agreements as at Financial Close or as amended with the prior written approval of the Authority);

(d)  any amendment, variation or supplement of any agreement approved by the Authority as part of any Qualifying Variation under this Contract;

(e)  any sale of shares in the Contractor [or Holdco] by the shareholders or securitisation of the existing rights and/or interests attaching to shares in the Contractor [or Holdco] provided that this paragraph (e) shall, in respect of shares in Holdco, only apply so long as Holdco holds 100% of the issued share capital of the Contractor;67

(f)  any sale or transfer of the Subordinated Lenders' existing rights and/or interests under the Subordinated Financing Agreements or securitisation of the Subordinated Lenders' existing rights and/or interests under the Subordinated Financing Agreements; or68

(g)  any Qualifying Bank Transaction;

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 the Contractor's or any Contractor's Associated Company's ability to carry out any such refinancing or other arrangement which would have a similar effect;

Refinancing

(a)  any amendment, variation, novation, supplement or replacement of any Financing Agreement (other than any Subordinated Financing Agreement);

(b)  the exercise of any right, or the grant of any waiver or consent, under any Financing Agreement (other than any Subordinated Financing Agreement);

(c)  the disposition of any rights or interests in, or the creation of any rights of participation in respect of, any Financing Agreement (other than any Subordinated Financing Agreement) or the creation or granting of any other form of benefit or interest in either the Financing Agreements (other than the Subordinated Financing Agreements) or the contracts, revenues or assets of the Contractor whether by way of security or otherwise; or

(d)  any other arrangement put in place by the Contractor or another person which has an effect which is similar to any of (a) to (c) above or which has the effect of limiting the Contractor's ability to carry out any of (a) to (c) above

Refinancing Gain

an amount equal to the greater of zero and {(A-B)-C), where:

A  =  the Net Present Value of the Distributions projected immediately prior to the Refinancing (taking into account the effect of the Refinancing and using the Base Case as updated (including as to the performance of the Project) so as to be current immediately prior to the Refinancing) to be made to each Relevant Person (without double counting) over the remaining term of this Contract following the Refinancing;

B  =  the Net Present Value of the Distributions projected immediately prior to the Refinancing (but without taking into account the effect of the Refinancing and using the Base Case as updated (including as to the performance of the Project) so as to be current immediately prior to the Refinancing) to be made to each Relevant Person (without double counting) over the remaining term of the Contract following the Refinancing; and

C  =  any adjustment required to raise the Pre-Refinancing Equity IRR to the Threshold Equity IRR;

Insurance Undertaking

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

Pre-Refinancing Equity IRR

the nominal post-tax (which shall be post Contractor tax pre Shareholder tax for the Contractor but pre tax for the Shareholders) Equity IRR calculated immediately prior to the Refinancing;

Project Accounts

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

Qualifying Bank Transaction69

(a)  the syndication by a Senior Lender, in the ordinary course of its business, of any of its rights or interests in the Senior Financing Agreements;

(b)  the grant by a Senior Lender of any rights of participation, or the disposition by a Senior Lender of any of its rights or interests (other than as specified in paragraph (a) above), in respect of the Senior Financing Agreements in favour of:

(i)  any other Senior Lender;

(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 the 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 (2) years) assets of at least ten million pounds (£10,000,000) (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 (2) years) at least fifty (50) members and assets under management of at least ten million pounds (£10,000,000) (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;

(c)  the grant by a Senior Lender of any other form of benefit or interest in either the Senior Financing Agreements or the revenues or assets of the Contractor [or Holdco], whether by way of security or otherwise, in favour of:

(i)  any other Senior Lender;

(ii)  any institution specified in paragraphs (b)(ii) to (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 Institution

[             ]70;

Qualifying Refinancing

any Refinancing that will give rise to a Refinancing Gain greater than zero that is not an Exempt 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 the Contractor or [Holdco].