10  Authority Rights

10.1  Notwithstanding any provision in the Collateral Warranties to the contrary, and without prejudice to clause 10.8, the Authority agrees that it will not exercise or seek to exercise any of its step-in rights or other rights under or in respect of any Collateral Warranty prior to termination of the Contract until the earlier of:

(a)  the Senior Debt Discharge Date; and

(b)  the date on which the Facility Agent has given its written consent to such exercise following a request from the Authority or otherwise.

10.2  The Authority shall not, prior to the Senior Debt Discharge Date:

(a)  do anything pursuant to the Collateral Warranties or the Services Contracts following the Termination Date (including any act which gives rise to any cross claim, counterclaim, set off, variation or waiver) to prejudice the Accrued Rights relating to the Services Contracts;

(b)  claim, recover, retain or receive (or seek to claim, recover, retain or receive) any amounts (including any costs, claims, damages, losses and liabilities) to which the Accrued Rights relate under, pursuant to or in connection with the Collateral Warranties and/or the Services Contracts;

(c)  take any action to wind-up, dissolve, appoint an administrator, trustee, receiver (of any type), compulsory manager or similar officer, or sanction a voluntary arrangement or scheme of arrangement (or similar) in relation to the Service Provider or take any other similar or analogous step relating to the insolvency of the Service Provider;

(d)  take any action to wind-up, dissolve, appoint an administrator, trustee, receiver (of any type), compulsory manager or similar officer, or sanction a voluntary arrangement or scheme of arrangement (or similar) in relation to any Relevant Sub-Contractor or any of their respective guarantors or take any other similar or analogous step relating to the insolvency of any such person in each case on grounds (whether in whole or in part) relating to the Project;

(e)  save with the prior written consent of the Facility Agent, compete with the rights of the Secured Finance Parties on grounds (whether in whole or in part) relating to the Project (by virtue of a claim under any of the Collateral Warranties, the Contract or any other Project Document or otherwise) on any formal insolvency of the Service Provider, any Relevant Sub-Contractor or any of their respective guarantors, nor claim to be subrogated to any rights of any of the Secured Finance Parties.

10.3  The Parties agree that:

(a)  the request by the Authority that a Relevant Sub-Contractor accept the instructions of the Authority to the exclusion of the Service Provider pursuant to and in accordance with the relevant Collateral Warranty; and

(b)  the exercise by the Authority of its rights pursuant to and in accordance with11:

(i)  clauses 10.5(a) and 10.5(b) to make deductions, retention or set-off against the  Monthly Sub-Contract Payment under and in accordance with the Sub-Contract;

(ii)  clause 10.5(c) and 10.5(d) to terminate and claim termination compensation under and in accordance with the Sub-Contract;

shall not prejudice the Accrued Rights.

10.4  The Authority agrees and undertakes that if it claims, recovers, retains or receives any amount:

(a)  in contravention of the provisions of clauses 10.2 and/or 10.5; or

(b)  pursuant to clause 10.5.(e)(i) which the final determination of any Accrued Rights Value demonstrates is in excess of the relevant Authority Liability Cap,

it will promptly turn the same over to the Facility Agent and pending such payment, hold the same on trust for the Facility Agent and the Secured Finance Parties.

10.5  In addition to its rights under clause 10.1, and subject to clauses 10.2 and 10.3, where the Contract has been terminated the Authority shall, from the Termination Date, be entitled to exercise any of its step-in rights or other rights under or in respect of the Authority Sub-Contractor Direct Agreement, provided that:

the Authority may not claim, recover, retain or receive (or seek to claim, recover, retain or receive) an amount under, pursuant to or in connection with the Authority Sub-Contractor Direct Agreement and/or the Sub-Contract other than the making of deductions, retention, or set-off against (and only up to the amount of) each Monthly Sub-Contract Payment under and in accordance with clause [♦] and schedule [♦] of the Sub-Contract in respect of services provided following the Termination Date;12

(a)  if and to the extent that realisation of the Accrued Rights would count against the Sub-Contractor Liability Cap in the Relevant Year, the Authority shall only be entitled to make deductions, retention or set-off in the Relevant Year pursuant to clause 10.5(a) to the extent such deductions, retention or set-off do not exceed the Authority Sub-Contract Liability Cap;

(b)  if and to the extent that realisation of the Accrued Rights would count against the Sub-Contractor Termination Cap, the Authority shall only be entitled to exercise its rights to terminate the Sub-Contract (pursuant to clause [●] thereof) and to claim termination compensation (pursuant to clause [●] thereof) to the extent that such compensation does not exceed the Authority Sub-Contract Termination Cap;  

(c)  [if and to the extent that realisation of the Accrued Rights would count against the [Life Cycle Works Cap], the Authority shall only be entitled to claim any termination compensation which relates to the [Life Cycle Works Cap] to the extent that it does not exceed the [Authority Sub-Contract Life Cycle Works Cap], subject always to the maximum limit referred to in clause 10.5(c); ]

(d)  if the Authority and the Facility Agent do not agree the Sub-Contract Accrued Rights Value:

(i)  either of the Authority or the Facility Agent may refer the dispute for resolution in accordance with clause 20 (Dispute Resolution); and

(ii)  pending agreement or determination of the Sub-Contract Accrued Rights Value, the Authority shall be entitled to exercise its rights under the Authority Sub-Contractor Direct Agreement subject always to clause 10.4; and

(e)  unless permitted by clause 10.12, the Authority shall not be entitled to exercise its rights under the Authority Sub-Contractor Direct Agreement where the event giving rise to termination of the Contract is an event of Sub-Contractor Default.

10.6  Not Used13

10.7  Notwithstanding the terms of the Collateral Warranties or any other provisions of this clause 10, each of the Relevant Sub-Contractors, together with any guarantors thereof, shall remain responsible, and be liable, to the Service Provider and the Secured Finance Parties in respect of all costs, claims, damages, losses and liabilities which have arisen out of or in connection with the Services Contracts, or the Security Documents and Direct Agreements relating thereto, in respect of the period prior to and including the Termination Date and the Service Provider and the Secured Finance Parties (and the Facility Agent and/or the Security Trustee acting on behalf of the Service Provider and/or the Secured Finance Parties) shall retain the benefit of all their respective rights to all such costs, claims, damages, losses and liabilities (the "Accrued Rights").

10.8  In addition to its other rights under this clause 10, where following service of a Termination Notice but before expiry of the Required Period a Relevant Sub-Contractor has served a notice of termination, discontinuance or suspension on its contracting counterparty (whether the Service Provider or otherwise) in accordance with the terms of the relevant Services Contract, the Authority may pay directly, or undertake to make a payment directly, to the Relevant Sub-Contractor, amounts properly due, payable and undisputed under or pursuant to the relevant Services Contract and may set off such sums after they have been paid against any amounts payable by the Authority to the Service Provider under the Contract, so as to satisfy them pro tanto, provided that the Authority shall not be able to exercise its rights pursuant to this clause 10.8 in circumstances where the Secured Finance Parties:

(a)  have stepped-in to, or otherwise, directly or indirectly, taken control over the relevant Services Contract and not stepped out of it or otherwise relinquished control; or

(b)  are seeking to preserve continuity of the service or build obligation (as relevant) under the relevant Services Contract or otherwise with reasonable diligence.

10.9  To the extent that the Authority makes a payment under clause 10.8 above, the Authority shall not be entitled to make double recovery by making a deduction from the Unitary Charge under the Contract in respect of performance failure by the Relevant Sub-Contractor without making an equivalent deduction against the payment made direct by the Authority to the Relevant Sub-Contractor.

10.10  On early termination of the Contract for any reason the Authority shall be entitled to set-off any payments made to sub-contractors under clause 10.8 (to the extent not previously set-off in accordance with that clause) against any payments made under the Contract (subject to clause 26.13(b) (Set-Off on Termination) of the Contract).

10.11  Where the Secured Finance Parties do not have any Accrued Rights against the Relevant Sub-Contractor, or in the event that the Facility Agent fails to comply with clause 10.13, the Authority may exercise its rights under the relevant Collateral Warranty without restriction.

10.12  On and after the earlier of:

(a)  the Senior Debt Discharge Date; and

(b)  the date on which the Facility Agent has given its written consent,

the Authority shall be entitled to exercise its rights under the Collateral Warranties in connection with the Sub-Contract, or other Services Contract in accordance with the Collateral Warranties without restriction.

10.13  Following termination of the Contract, the Facility Agent shall, within ten (10) Business Days of receipt of a written request from the Authority, provide to the Authority written details of all Accrued Rights of which it is aware, having made enquiry of the Service Provider and the Secured Finance Parties:

(a)  that the Service Provider may claim against the Relevant Sub-Contractor; and

(b)  that any Secured Finance Party may claim against the Relevant Sub-Contractor,

together with an indicative non-binding assessment of the Sub-Contract Accrued Rights Value, the Sub-Contract Accrued Rights Termination Value and [the Sub-Contract Accrued Rights Life Cycle Works Value] .

10.14  Prior to the Senior Debt Discharge Date but following termination of the Contract, where the [Lenders] have enforced their security and a receiver appointed by or on behalf of the [Lenders] has made a prescribed part of the Service Provider's net property available for the satisfaction of unsecured debts (under section 176A of the Insolvency Act 1986) the Authority may claim as an unsecured creditor against the Service Provider for a share of such prescribed part.

10.15  Notwithstanding the terms of the Contract and Security Documents, the Facility Agent and the Security Trustee agree that the Authority may exercise its rights to have transferred any Unrestricted Assets to the Authority or its nominee following the Termination Date and neither the Facility Agent nor the Security Trustee shall exercise or seek to exercise any enforcement rights and shall, on or before the date any Unrestricted Assets are transferred to the Authority or its nominee, as the case may be, each release its security over them.

10.16  Notwithstanding the terms of the Contract, and subject to clause 10.17, the Authority agrees that it will not exercise or seek to exercise any of its rights to require a transfer of any revenues or cash balances or rights accrued as at the Termination Date under or pursuant to or in connection with any of the Relevant Required Insurances, any Services Contract or any Project Document comprised in the Assets to the Authority or its nominee on or following the Termination Date until the Senior Debt Discharge Date.

10.17  The Authority may, at its option, and subject to agreement of the value of any such revenues, cash balances, or claims by the Facility Agent in its absolute discretion, and payment of such sum to the Facility Agent, require a transfer of any revenues or cash balances or rights accrued as at the Termination Date under or pursuant to or in connection with any Services Contract comprised in the Assets to the Authority or its nominee on or following the Termination Date.

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11 This clause will need to be reviewed against the Sub-Contract.

12 The payment regime under the Sub-Contract will need to be reviewed to ensure it is consistent with this provision.

13 If the Authority has entered into any other collateral warranty (e.g a design collateral warranty) then the provisions of clause 10.5 will need to apply to such other collateral warranty