4 Authority right to request financing

4.1 If the Authority (acting reasonably) considers the funding terms generally available in the market to be more favourable than those reflected in the Financing Agreements, the Authority may, by notice in writing to the Service Provider, require the Service Provider to request potential funders to provide terms for a potential Refinancing (a Refinancing Notice).

4.2 The Refinancing Notice shall set out in reasonable detail the grounds upon which the Authority believes such funding terms to be available. The Service Provider and the Authority shall meet to discuss the Refinancing Notice within twenty (20) Business Days. Such a meeting will consider the evidence available to both parties about the availability of funding terms for a potential Refinancing. The Authority shall be entitled to withdraw the Refinancing Notice at or before such a meeting, or within seven (7) Business Days following the meeting.

4.3 If the Authority serves a Refinancing Notice which is not withdrawn pursuant to paragraph 4.2, then the Service Provider shall:

(a) act promptly, diligently and in good faith with respect to the potential Refinancing;

(b) use all reasonable endeavours to obtain the most favourable available terms from existing and/or new funders for any potential Refinancing (provided that the Service Provider shall not be required to propose refinancing in a manner which a prudent board of directors of a company operating the same business in the United Kingdom to that operated by the Service Provider, in similar circumstances, would not approve), for the avoidance of doubt also being terms which are likely to generate a positive Refinancing Gain after the deduction of costs in accordance with the provisions of paragraph 3.6 (Sharing); and

(i) as soon as reasonably practicable after receipt of the Refinancing Notice, provide to the Authority (i) full details of the proposed Refinancing, including a financial model and the basis for the assumptions used in the financial model and evidence to the reasonable satisfaction of the Authority that these assumptions represent the most favourable available terms for the potential Refinancing on the basis set out in paragraph 4.3(b) above and (ii) initial drafts of any changes to this Contract including in relation to potential compensation on termination which might be required to give effect to the proposed Refinancing; or

(ii) if the Service Provider (acting reasonably) believes that it is not possible to obtain funding terms which are more favourable than those reflected in the Financing Agreements in accordance with the requirements of paragraph 4.3(b), provide evidence to the reasonable satisfaction of the Authority for such belief and evidence to the reasonable satisfaction of the Authority that the Service Provider has complied with its obligations in paragraph 4.3(a) and paragraph 4.3(b);

4.4 Following receipt of the information referred to in paragraph 4.3(c)(i), the Authority shall (in its absolute discretion) either:

(a) instruct the Service Provider to implement the proposed Refinancing; or

(b) instruct the Service Provider to discontinue the proposed Refinancing

provided that if the Authority reasonably considers that the requirements of paragraph 4.3(c)(i) have not been satisfied, the Authority may require the Service Provider to satisfy its obligations under paragraph 4.3(c)(i) whereupon the provisions of paragraph 4.3 and paragraph 4.4 shall apply as if the Authority had served a Refinancing Notice.

4.5 If the Authority instructs the Service Provider to implement the proposed Refinancing:

(a) the Service Provider shall, as soon as reasonably practicable, use all reasonable endeavours to procure that such proposed Refinancing is implemented;

(b) such proposed Refinancing shall be deemed to be a Qualifying Refinancing; and

4.6 If:

(a) the Authority instructs the Service Provider to discontinue the potential Refinancing pursuant to paragraph 4.4(b) ; or

(b) the requirements of paragraph 4.3(c)(ii) are satisfied

then, the Authority shall reimburse the Service Provider for the reasonable and proper professional costs incurred by the Service Provider in relation to the potential Refinancing, such costs to be paid to the Service Provider by the Authority within twenty (20) Business Days after receipt of a valid invoice in respect of such amount.

4.7 Any costs paid pursuant to paragraph 4.6 above shall not include any internal management costs incurred by the Service Provider except insofar as:

(a) it can be demonstrated to the reasonable satisfaction of the Authority that such costs have been incurred in place of professional costs which would in the normal course of such business have been paid to third parties; and

(b) the Authority has, by prior written agreement, approved the use of such internal management resource.

4.8 The Authority shall be entitled to issue a Refinancing Notice under paragraph 4.1 at any time but not more than once in any two (2) year period. For the avoidance of doubt, a Refinancing Notice that has been withdrawn under paragraph 4.2 has been issued for the purpose of this paragraph 4.8.