7  Authority Stage 2 Confirmation

7.1  As soon as reasonable after the receipt of the Service Provider Stage 2 Response, or the revised Service Provider Stage 2 Response (as the case may be), the Authority shall either:

(a)  issue written confirmation (an Authority Stage 2 Confirmation) and shall pay the Service Provider the Project Management Fee due at Stage 2 within twenty (20) Business Days of the date of issue of the Authority Stage 2 Confirmation or, if later, receipt of a valid invoice for the agreed amount; or

(b)  issue a written notice withdrawing the Authority Change Notice, in which case the provisions of paragraph 7.5 shall apply; or

(c)  issue a written notice rejecting the Service Provider Stage 2 Response, in which case the Authority shall not be responsible for any costs incurred by the Service Provider in preparing the Service Provider Stage 2 Response (including any outstanding part of the Project Management Fee or any capped or fixed due diligence costs incurred by the Senior Lender or any third party costs).  Provided that the Authority may only reject the Service Provider Stage 2 Response on the grounds that the Service Provider Stage 2 Response has failed materially to meet one or more of the Approval Criteria or the Service Provider has failed to comply with any material requirement of this Schedule 15.

7.2  If the Authority does not issue a written notice pursuant to paragraph 7.1 within twenty (20) Business Days of receipt of a written notice served by the Service Provider (which notice may only be served after expiry of a period of three (3) months from the date the Authority receives the Service Provider Stage 2 Response) requiring the Authority either to confirm the Service Provider Stage 2 Response or withdraw the Authority Change Notice then the Authority Change Notice shall be deemed to have been withdrawn.

7.3  Where an Authority Change Notice is withdrawn pursuant to paragraph 6.1(b) (Authority Stage 2 Confirmation) or deemed to have been withdrawn pursuant to paragraph 6.2, the Authority shall pay to the Service Provider within twenty (20) Business Days of an invoice for such amount, the reasonable third-party costs (including any costs incurred by the Senior Lender in carrying out due diligence in accordance with paragraph 8.3 (Payment) of Part 1 of this Schedule 15) incurred by the Service Provider in preparing the Service Provider Stage 2 Response together with the outstanding balance of the Project Management Fee provided that:

(a)  the Service Provider has  satisfied the Approval Criteria and other material requirements of this Schedule 15;

(b)  the Service Provider has included in the Service Provider Stage 1 Response a cost breakdown of the estimate of third-party costs to be incurred by the Service Provider in preparing the Service Provider Stage 2 Response and the Authority has:

(i)  approved such estimate of third-party costs and the type of third-party prior to any third-party costs being incurred;

(ii)  agreed that, given the nature of the proposed High Value Change, it was reasonable for the relevant third-party to incur costs in preparing the Service Provider Stage 2 Response on the basis of the extent of the proposed High Value Change and the work required in submitting an accurate Service Provider Stage 2 Response in compliance with this Schedule 15;

(iii)  been provided with such evidence as it may reasonably require in order to verify such additional third-party costs ; and

(iv)  no cap or fixed fee given by the Service Provider  in the Service Provider Stage 1 Response or otherwise) in respect of any third-party costs has been exceeded.

7.4  Where the Authority Change is either withdrawn or rejected, the Authority shall be entitled to procure the works or services which would otherwise comprise the High Value Change outside the terms of this Contract and the provisions of paragraph 7 of Part 1 of this Schedule 15 shall apply.