5.  PRINCIPLES OF ADJUSTMENT

5.1.  The following guidelines shall be followed in revising the Base Case:

5.1.1.  wherever possible the revision shall be carried out without altering the logic, formulae, inputs and assumptions incorporated in the Base Case in any way whatsoever and only data such as costs incurred by the Contractor and the timing and amounts of draw downs of funding shall be changed;

5.1.2.  where it is necessary to amend the logic, formulae, inputs and assumptions incorporated in the Base Case to permit revisions to be made, this shall be carried out to the minimum extent necessary and in accordance with generally accepted accounting principles;

5.1.3.  where any amendment is made to the logic, formulae, inputs and assumptions incorporated in the Base Case, the Base Case, as amended shall first be run with the data included in the Base Case immediately prior to amendment to ensure that the outputs (including but not limited to loan life cover and debt service ratios) from the Base Case as amended correspond to the outputs immediately prior to amendment and the difference in the real pre-tax Project IRR after and immediately prior to amendment does not differ by more than five (5) basis points (being zero point zero five percent (0.05%)) as shown in the resulting figure); and

5.1.4.  the Parties may only agree changes or additions to the guidelines set out in this paragraph 5.1.4 these assumptions where they are required in relation to circumstances not dealt with by the assumptions in the Base Case; and

5.1.5.  unless otherwise agreed by the Parties in writing, the Contractor shall not be permitted to backdate any increase in the Unitary Change as a result of an Authority Change.

5.2.  Any amendment to the logic, formulae, inputs and assumptions incorporated in the Base Case shall be fully recorded so that the manner in which the revised Unitary Charge is calculated can be readily verified.

5.3.  Any reference in this Contract to "no better and no worse" and to leaving the Contractor being in a "no better and no worse position", shall be construed as to ensure that:

5.3.1.  on comparing the output of the Base Case (as at the Base Case Change Date) before and after entering into the required Base Case revisions, such comparison of the output from such Base Case shows that:

(a)  the TPI Adjusted Base Case Equity IRR in circumstances where the Contractor has been generating Third Party Income at levels below those forecast in the Base Case or the Base Equity IRR in other cases shall be unchanged (assessed to two decimal places); and

(b)  the Contractor shall be in a position which is unchanged in relation to the minimum and average debt service cover ratio, and the minimum and average loan life cover ratio (where the Contractor has been generating Third Party Income at levels below those forecast in the Base Case, such ratios should be adjusted downwards to reflect those circumstances); and

(c)  [the Contractor is left in a position which is unchanged in relation to inflation hedging of the Unitary Charge as set out in [paragraph [             ] of the Payment Mechanism; and]

5.3.2.  the ability of the Contractor to comply with this Contract is not adversely affected or improved as a consequence of the Relevant Event.

5.4.  If any material change in the risk profile of the Project arises from the revision, taking account of similar projects exposed to similar risks to those arising out of the circumstances giving rise to the revision, the Parties may agree that the nominal post-Contractor tax pre-Shareholder tax Equity IRR may be adjusted and such revision may only be an upwards adjustment.

5.5.  In adjusting the Base Case the individual prices and rates which make up the Unitary Charge should reflect the drivers and methodology used to determine those prices and rates as shown in the original Base Case at the Commencement Date.124

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124  Project specific details to be included e.g. proportion of equity return in each of the Base Element and Variable Element of the Unitary Charge.