1  Calculation of Payment

1.1  On termination of this Contract pursuant to:

(a)  clause 32.4(b)(i) or 32.4(b)(ii) (Uninsurable Risks); or

(b)  clause 45 (Termination following a Force Majeure Event) the Authority shall pay to the Service Provider the Force Majeure Termination Sum.

1.2  Subject to paragraphs 1.4 to 1.6 (inclusive), the Force Majeure Termination Sum shall be the amount equal to the aggregate of:

(a)  the Base Senior Debt Termination Amount;

(b)  the Junior Debt less an amount equal to the aggregate of payments of interest made by the Service Provider under the Subordinated Financing Agreements;

(c)  all amounts paid to the Service Provider by way of subscription for shares in the capital of the Service Provider less dividends and other distributions paid to the shareholders of the Service Provider (save to the extent deducted under paragraph 1.2(b)); and

(d)  redundancy payments for employees of the Service Provider that have been or will be reasonably incurred by the Service Provider as a direct result of termination of the Contract and any Sub-Contractor Breakage Costs.

1.3  If the amounts referred to in paragraphs 1.2(b) and/or 1.2(c) are less than zero, then, for the purposes of the calculation of the Force Majeure Termination Sum they shall be deemed to be zero.

1.4  If the aggregate of the amounts referred to in paragraphs 1.2(a), 1.2(b) and 1.2(c) is less than the Revised Senior Debt Termination Amount, then the Force Majeure Termination Sum shall be increased so that it is equal to the aggregate of the Revised Senior Debt Termination Amount and the amount referred to in paragraph 1.2(d) provided always that:

(a)  the amount referred to in paragraph 1.2(d) shall only be paid to the extent that the Service Provider has demonstrated to the reasonable satisfaction of the Authority that the amount will not be paid in payment (in whole or in part) of any Distribution; and

(b)  if, at the time of termination, there are any Additional Permitted Borrowings outstanding, no Sub-Contractor Breakage Costs shall be paid in respect of any Sub- Contract in circumstances where there is an event of default under such Sub-Contract which would entitle the Service Provider to terminate such Sub-Contract.

1.5  If a Distribution is made whilst any Additional Permitted Borrowing is outstanding and the Service Provider has wilfully, or through gross negligence, failed to comply with its obligations under clause 9.4(d) of the Senior Lender's Direct Agreement then in addition to the deduction of the Distribution referred to in paragraph (v) of the definition of Revised Senior Debt Termination Amount, the Authority shall be entitled to set off the value of that Distribution a second time against the Force Majeure Termination Sum, provided that the amount of the Force Majeure Termination Sum will never be less than the Revised Senior Debt Termination Amount.

1.6  If the Service Provider has wilfully or through gross negligence failed to comply with its obligations under clause 9.4(d) of the Senior Lender's Direct Agreement and there has been an overstatement of the cash balances by the Service Provider as at that date which has caused the Authority to reasonably believe that it would be required to pay a lesser sum at the Termination Date than it actually is required to pay under the terms of this paragraph 1.2, then the Force Majeure Termination Sum, shall be reduced by the amount of such overstatement (to the extent such overstatement is still applicable at the Termination Date), provided that the amount of the Force Majeure Termination Sum will never be less than the Revised Senior Debt Termination Amount.