1.1 Definitions
In this Agreement unless the context otherwise requires the following terms shall have the meanings given to them below:
the Local Government Act 1999;
not to carry out any Works contemplated by the Construction Programme at a Site for twenty (20) consecutive Business Days or during sixty (60) Business Days (whether consecutive or not) in any Contract Year;
the certificate issued by the Independent Certifier confirming the Services Availability Requirements have been met;
Actual Relevant Insurance Cost
the aggregate of the [annual]1 insurance premiums reasonably incurred by the Contractor to maintain the Relevant Insurance during the Insurance Review Period but excluding insurance premium tax and all broker's fees and commissions;
Additional Permitted Borrowing
on any date, the amount equal to any amount of principal outstanding under the Senior Financing Agreements (as the same may from time to time be amended, whether or not with the approval of the Authority) in excess of the amount of principal scheduled under the Senior Financing Agreements at Financial Close to be outstanding at that date,
but only to the extent that:
(a) this amount is less than or equal to the Additional Permitted Borrowings Limit; and
(b) in respect of any Additional Permitted Borrowing the Agent is not in material breach of its obligations under clause [10(d)(iii)] of the Direct Agreement as it applies to such Additional Permitted Borrowing,
and provided further that any such excess amount of principal which is:
(i) invested as part of any Qualifying Variation;
(ii) outstanding from time to time as a result of any drawing under the Senior Financing Agreements as entered into at the date of this Agreement, disregarding any subsequent amendment; or
(iii) outstanding from time to time as a result of any amendment to the Senior Financing Agreements in respect of which the Authority has agreed that its liabilities on a termination may be increased pursuant to clause 53.5 (Changes to Financing Agreements), shall not be counted as Additional Permitted Borrowing;
Additional Permitted Borrowings Limit
an amount equal to:
(a) ten percent (10%) of the Original Senior Commitment, for any Additional Permitted Borrowing subsisting in the period from the date of Financial Close to the date on which the amount outstanding under the Senior Financing Agreements is reduced to fifty percent (50%) or less of the Original Senior Commitment; and thereafter;
(b) the higher of:
(i) five percent (5%) of the Original Senior Commitment; and
(ii) the amount of any Additional Permitted Borrowing outstanding on the last day of the period referred to in (a);
any land and/or property adjoining or in the neighbourhood of the Site[s] and each and every part thereof including all conduits, roads, footpaths, walls, fences, buildings and other erections and all service media and other apparatus on, under or within such land and/or property;
has the meaning given to it in clause 66.4 (Adjudication);
Adjusted Estimated Fair Value of the Contract
the Estimated Fair Value of the Contract, less an amount equal to the aggregate of:
(a) where relevant any Post Termination Service Amounts paid to the Contractor (if a positive number);
(b) the Tender Costs; and
(c) amounts that the Authority is entitled to set off or deduct under clause 36.9 (Rights of Set Off),
plus an amount equal to the aggregate of:
(i) all credit balances on any bank accounts held by or on behalf of the Contractor on the date that the Estimated Fair Value of the Contract is calculated;
(ii) any insurance proceeds and other amounts owing to the Contractor (and which the Contractor is entitled to retain) to the extent not included in (i) above; and
(iii) the Post Termination Service Amounts (if a negative number),
to the extent that:
1 (i), (ii) and (iii) have not been directly taken into account in calculating the Estimated Fair Value of the Contract; and
2 the Authority has received such amounts in accordance with this Agreement or such amounts are standing to the credit of the Joint Insurance Account;
Adjusted Highest Compliant Tender Price
the Highest Compliant Tender Price less the aggregate of:
(a) any Post Termination Service Amounts paid to the Contractor to date;
(b) the Tender Costs; and
(c) amounts that the Authority is entitled to set off or deduct under clause 36.9 (Rights of Set Off),
plus an amount equal to the aggregate of:
(i) all credit balances on any bank accounts held by or on behalf of the Contractor on the date that the highest priced Compliant Tender is received;
(ii) any insurance proceeds and other amounts owing to the Contractor, to the extent not included in (i) above; and
(iii) the Post Termination Service Amounts (if a negative number),
to the extent that
1 (i), (ii) and (iii) have not been directly taken into account in that Compliant Tender; and
2 the Authority has received such amounts in accordance with this Agreement;
means a transferee admission body for the purposes of regulation 5A of the LGPS Regulations;
[name of administering authority] Council of [address] acting in its capacity as the administering authority of the [name of relevant LGPS fund] for the purposes of the LGPS Regulations;
has the meaning given to it in the definition of Force Majeure Event in this clause 1.1 (Definitions);
in relation to any person, any Holding Company or any Subsidiary of that person or any Subsidiary of such Holding Company;
[ ] in its capacity as agent for the Senior Lenders under the Senior Financing Agreements];
in relation to any document, the form of the document agreed between the parties and initialled by or on behalf of the parties for the purpose of identification;2
this agreement (including its Schedules);
any alteration, demolition, extension or, addition to [any/the] Facility in each case of a structural nature;
(i) a non-exclusive licence to enter and remain upon those parts of the Site(s) that the Contractor and/or any Contractor Related Party requires access to in order to carry out the Works or provide the Services;
(ii) such rights of access to and egress from the Site(s) as are necessary for the Contractor and any Contractor Related Party to perform their obligations and exercise their rights under this Agreement and in particular for the purposes of implementing the Works and providing the Services including those highlighted [ ] on the Site Plans provided that such rights may be varied by the Authority and such variation will be deemed to be an Authority Change;
(iii) rights of free and uninterrupted passage and running of water soil gas electricity telephone and other services including those highlighted [ ] on the Site Plan(s) provided that such rights of passage may be varied by the Authority to such alternative routes as the Authority may reasonably specify from time to time; and
(iv) the right where necessary to inspect repair maintain or renew the Services Media and the right (at the cost of the Contractor) to connect into the Services Media and to construct such new Services Media as may from time to time be necessary to serve the Sites provided that the prior written consent of the Authority is obtained (such consent not to be unreasonably withheld or delayed);
provided that
(v) the rights are granted insofar as the Authority is capable of granting them and such rights are subject to any restriction in the Title Deeds or otherwise disclosed in writing to the Contractor prior to the Commencement Date; and
(vi) the rights shall not in any circumstances entitle the Contractor or any Contractor Related Party to exclusive occupancy or exclusive possession of any part of the Sites (save as may be required by the Contractor and approved by the Authority (such approval not to be unreasonably withheld or delayed) in order to comply with relevant health and safety legislation) on a temporary basis;
has the meaning given to it in clause 38.2.4 (Annual Service Report and Annual Service Plan);
has the meaning given to it in clause 38.2.1 (Annual Service Report and Annual Service Plan);
[ ] in each Contract Year;
for the period during which the Additional Permitted Borrowing subsists, an amount equal to the aggregate of all Distributions made during that period up to an amount equal to the principal of the Additional Permitted Borrowing on the first day of that period;
has the meaning given to it in clause 68.1 (Project Data);
an item of Reviewable Design Data which has been returned or deemed to have been returned marked "no comment" or "proceed subject to amendment" under the Review Procedure;
a survey procured by the Authority in relation to the existing Buildings that are to be refurbished or demolished identifying actual or potential asbestos in any such Buildings3;]
drawings, technical information, models, operation and maintenance manuals and technical information of a like nature to encompass the method of construction, manufacture, operation and maintenance of each element of [the/each] Facility in sufficient detail to allow a competent person to understand all material elements of the construction of [the/each] Facility and to maintain, dismantle, reassemble, adjust and operate all plant, equipment, fixtures, structures and construction elements thereof;
all assets and rights to enable the Authority or a successor contractor to own, operate and maintain [the/each] Facility in accordance with this Agreement including:
(a) any land or buildings;
(b) any equipment;
(c) any books and records (including operating and maintenance manuals, health and safety manuals and other know how);
(d) any spare parts, tools and other assets (together with any warranties in respect of assets being transferred);
(e) any revenues and any other contractual rights; and
(f) any Intellectual Property Rights subject to and in accordance with clause 68 (Intellectual Property),
but excluding any assets and rights in respect of which the Authority is full legal and beneficial owner;
has the meaning given to it in clause 29.15 (Retendering);
in respect of a relevant company, a company which is a Subsidiary, a Holding Company or a company that is a Subsidiary of the ultimate Holding Company of that relevant company, and in the case of the Contractor shall include [Holdco]4 and each of the Shareholders;
Audit Commission Performance Indicators
the Audit Commission's Library of Local Performance Indicators which is available at: http://www.local-pi-library.gov.uk/thelibrary.html;
[ ];5
has the meaning given to it in the Change Protocol;
has the meaning given to it in the Change Protocol;
one of the following events:
(a) an expropriation, sequestration or requisition of a material part of the Assets and/or shares of the Contractor [or Holdco]6 by the Authority or other Relevant Authority;
(b) a failure by the Authority to make payment(s) of an amount of money exceeding (in aggregate) one month's Unitary Charge (from time to time) before deductions that is due and payable by the Authority under this Agreement within twenty (20) Business Days of service of a formal written demand by the Contractor, where the amount fell due and payable one (1) (or more) months prior to the date of service of the written demand;
(c) a breach by the Authority of its obligations under this Agreement which substantially frustrates or renders it impossible for the Contractor to perform its obligations under this Agreement for a continuous period of [two (2)] months; or
(d) a breach by the Authority of clause 69.1 (Restrictions on Transfer of this Agreement by the Authority);
Authority Default Termination Sum
the amount payable in accordance with clause 48 (Compensation on Termination for Authority Default/Voluntary Termination/ Authority Break Point Date);
[ ];
in relation to any service equivalent to any of the Services, all those persons employed by the Authority under a contract of employment (excluding to avoid doubt (without limitation) any person engaged by the Authority as an independent contractor or persons employed by any sub-contractor engaged by the Authority) who are wholly or substantially engaged in the provision of that service as at the Service Transfer Date;
Authority Leisure Requirements
has the meaning given to it in Part B (Leisure) of the Services Specification;
Authority Pricing Requirements
means the section of the Authority Leisure Requirements which sets out the Authority's pricing policy, including the Core Prices and any other pricing related matters as updated from time to time in accordance with Part B (Leisure) of the Services Specification;
an officer, agent or employee of the Authority acting in the course of his office or employment, including any sub-contractors supplied by the Authority in relation to the Services, but excluding in each case the Users;8
the representative appointed by the Authority pursuant to clause 12 (Authority's Representative);
the policies of the Authority referred to in Schedule 15 (Authority's Policies);
the requirements of the Authority in respect of the Project set out in Schedule 1 (Authority's Requirements);
the information set out or described in Part 1 of Schedule 11 (Warranted Data);]9
has the meaning given to it in Schedule 6 (Payment Mechanism), and Unavailable, Availability and Unavailability shall be construed accordingly;
the financial model agreed between the parties prior to the date of this Agreement (as updated from time to time in accordance with the terms of this Agreement) for the purpose of, amongst other things, calculating the Unitary Charge;
[INSERT NUMBER] per cent;10
[£ ] being the amount as agreed at the Bid Date and set out in the financial model which represents the insurance cost (which excludes amounts in respect of insurance premium tax and all brokers' fees and commissions) which are proposed to be incurred to maintain the Relevant Insurance in each year following the [first/final] Services Availability Date, expressed in real terms as at the Bid Date;
means the aggregate of the Base Costs which were, at the Bid Date) projected to be incurred to maintain the Relevant Insurance during the Insurance Review Period indexed by actual RPIx from the Bid Date up to the dates on which the Relevant Insurance was placed or renewed either immediately before or during the Insurance Review Period (as applicable in respect of the year in question) less any Base Relevant Insurance Reduction;
Base Relevant Insurance Reduction
the reduction to be made to the Base Relevant Insurance Cost in respect of a risk which has become Uninsurable or a term or condition which is no longer available and shall be an amount that is either:
(a) the amount by which the Base Relevant Insurance Cost would have been a lesser amount had such a risk been Uninsurable or a term or condition been unavailable at the Bid Date (which amount, for the avoidance of doubt, can be £0); or
(b) if it is impossible to determine an amount pursuant to paragraph (a) above, an amount that is reasonable to be deducted from the Base Relevant Insurance Cost having due regard to:
(i) the amount by which the Actual Relevant Insurance Cost is less than it would have been as a result of the risk becoming Uninsurable or the term or condition becoming unavailable (the Actual Reduction);
(ii) the size of the Actual Reduction as a percentage of the Actual Relevant Insurance Cost immediately prior to the risk becoming Uninsurable or the term or condition becoming unavailable; and
(iii) the effects of RPIx since the Bid Date;
Base Senior Debt Termination Amount
subject to clauses 53.4 (Changes to Financing Agreements) and 53.5 (Restriction):
(a) all amounts outstanding at the Termination Date, including interest and Default Interest accrued as at that date, from the Contractor to the Senior Lenders in respect of Permitted Borrowing (other than in respect of Additional Permitted Borrowing); and
(b) all amounts including costs of early termination of interest rate hedging arrangements and other breakage costs12, payable by the Contractor to the Senior Lenders as a result of a prepayment in respect of Permitted Borrowing (other than in respect of Additional Permitted Borrowing), or, in the case of early termination of interest rate hedging arrangements only, as a result of termination of this Agreement, subject to the Contractor and the Senior Lenders mitigating all such costs to the extent reasonably possible;
less, to the extent it is a positive amount, the aggregate of (without double counting in relation to the calculation of the Base Senior Debt Termination Amount or the amounts below):
(i) all credit balances13 on any bank accounts (but excluding the Joint Insurance Account14) held by or on behalf of the Contractor15 on the Termination Date;
(ii) any amounts claimable on or after the Termination Date in respect of Contingent Funding Liabilities;
(iii) all amounts, including costs of early termination of interest rate hedging arrangements and other breakage costs, payable by the Senior Lenders to the Contractor as a result of a prepayment of amounts outstanding in respect of Permitted Borrowing (other than in respect of Additional Permitted Borrowing), or, in the case of early termination of interest rate hedging arrangements only, as a result of termination of this Agreement,; and
(iv) all other amounts received by the Senior Lenders on or after the Termination Date and before the date on which any compensation is payable by the Authority to the Contractor as a result of enforcing any other rights they may have;
a Change in Law which comprises:
(a) an order made by the Secretary of State in the exercise of powers conferred upon him by Section 4 of the 1999 Act the substance of which amounts to a change in a performance standard or a change in the definition of or details of a performance indicator (as opposed to a change in the description of a performance indicator);
(b) a direction made by the Audit Commission in the exercise of powers conferred upon it by Sections 44 and 46 of the Audit Commission Act 1998 which in substance is similar to an order referred to in (a) above; or
(c) Guidance issued by the Secretary of State or Audit Commission or other competent authority in respect of (a) or (b) above;
the duty imposed on the Authority by Section 3 of the 1999 Act in relation to, inter alia, any one (1) or more of the Services;
an officer, agent or employee of the Audit Commission or other Relevant Authority empowered to inspect the Authority's compliance with Part 1 of the 1999 Act;
Best Value Performance Indicator
has the meaning set out in the Local Government (Best Value) Performance Indicators and Performance Standards Order 2005 (SI 2005/598) as amended and as supplemented by the Office of the Deputy Prime Minister's guidance document "Best Value Performance Indicators: 2005/06";
the best value performance plans which are required to be published by the Authority [by 30 June each year and which take into account the performance indicators and standards specified in the Local Government (Best Value) Performance Indicators and Performance Standards Order 2003] in accordance with Section 6 of the 1999 Act as amended;
the review which is required to be conducted by the Authority in accordance with Section 5 of the 1999 Act;
the date or dates for a Best Value Review as the Authority may specify in a Best Value Performance Plan;
has the meaning given to it in clause 38.3.6 (Best Value Reviews and Comprehensive Performance Assessment);
Best Value Service Change Notice
has the meaning given to it in clause 38.2.3 (Annual Service Report and Annual Service Plan);
any building or other erection at [any of] the Site[s];
subject to clause 53.3 (Changes to Project Documents) the contract in the Agreed Form between the Contractor and the Building Contractor relating to the Works;
has the meaning given to it in clause 66.16.1 (Similar Disputes);
[INSERT NAME AND COMPANY REGISTERED NUMBER], or such other building contractor as the Contractor may, subject to clause 7 (Documents and Co-Operation), appoint to carry out the Works;
Building Contractor's Site Manager
the manager to be appointed by the Building Contractor for the purposes of supervision of all day to day activities on the Sites;
Building Contractor's Site Rules
the Building Contractor's rules, applicable on the Sites to the Authority, the Contractor, the Building Contractor and their respective sub-contractors and suppliers of every tier during the construction of the Facilities;
the manual for the Works containing:
Part 1
a copy of the health and safety file pursuant to the CDM Regulations (excluding those aspects of the same as fall within Part 2)
Part 2
(a) all As-built Drawings;
(b) copies of all guarantees, warranties and maintenance agreements relating to the Works;
(c) copies of all test certificates relating to the Works;
(d) copies of all manufacturers' technical literature relating to the Works; and
(e) copies of all operating and maintenance manuals relating to the Works;
a survey procured by the Authority in relation to the existing Buildings that are to be refurbished identifying any Defects in such Buildings;16
a day (other than a Saturday or Sunday) on which banks are open for domestic business in the City of London;
has the meaning given to it in paragraph 2 of Part 2 of Schedule 14 (Insurances);
any expenditure17 which falls to be treated as capital expenditure in accordance with generally accepted accounting principles in the United Kingdom from time to time, International Financial Reporting Standards from time to time, or proper accounting practices for local authorities as defined by section 21(2) of the Local Government Act 2003 and Regulation 31 of the Local Authorities (Capital Finance and Accounting) (England) Regulations 2003;
the Construction (Design and Management) Regulations 2007;
the requirements which must be satisfied for a contract to be a certified contract for the purposes of the Local Government (Contracts) Act 1997;
any date on which the Contractor or the relevant sub-contractor ceases to be an Admission Body as defined in clause 30.1 (Contractor to become an Admission Body) other than as a result of the termination of this Agreement or because it ceases to employ any Eligible Employees;
in respect of any Relevant Event, the effect of that Relevant Event (whether of a one-off or recurring nature, and whether positive or negative) upon the actual or anticipated costs, losses or liabilities of the Contractor and/or any Sub-Contractors (without double counting), including, as relevant, the following:
(a) the reasonable costs of complying with the requirements of clauses 16 (Extensions of Time), 58 (Change in Law), 60 (Authority Step-In), 71 (Financial Adjustments) and/or the Change Protocol, including the reasonable costs of preparation of design and estimates;
(b) the costs of continued employment of, or making redundant, staff who are no longer required;
(c) the costs of employing additional staff;
(d) reasonable professional fees;
(e) the costs to the Contractor of financing any Relevant Event (and the consequences thereof) including commitment fees and capital costs interest and hedging costs, lost interest on any of the Contractor's own capital employed and any finance required pending receipt of a lump sum payment or adjustments to the Unitary Charge;
(f) the effects of costs on implementation of any insurance reinstatement in accordance with this Agreement, including any adverse effect on the insurance proceeds payable to the Contractor (whether arising from physical damage insurance or business interruption insurance (or their equivalent)) in respect of that insurance reinstatement and any extension of the period of implementation of the insurance reinstatement;
(g) operating costs, or life cycle, maintenance or replacement costs;
(h) Capital Expenditure (or, in the case of a Relevant Event which is a Qualifying Change in Law, Capital Expenditure for which the Authority is responsible);
(i) the costs required to ensure continued compliance with the Financing Agreements;
(j) any deductible or increase in the level of deductible, or any increase in premium under or in respect of any insurance policy; and
(k) Direct Losses or Indirect Losses, including reasonable legal expenses on an indemnity basis;
the coming into effect after the date of this Agreement of:
(a) Legislation, other than any Legislation which on the date of this Agreement has been published:
(i) in a draft Bill as part of a Government Departmental Consultation Paper;
(ii) in a Bill;
(iii) in a draft statutory instrument; or
(iv) as a proposal in the Official Journal of the European Communities;
(b) any Guidance; or
(c) any applicable judgment of a relevant court of law which changes a binding precedent;
(a) (a) any sale, transfer or disposal of any legal, beneficial or equitable interest in any or all of the shares in the Contractor [and/or Holdco] [and/or [ ]] (including the control over the exercise of voting rights conferred on those shares, control over the right to appoint or remove directors or the rights to dividends); and/or
(b) any other arrangements that have or may have or which result in the same effect as paragraph (a) above of this definition of Change in Ownership;
the decrease or increase in Revenue (whether of a one-off or recurring nature) arising as a direct result of a Relevant Event which may result in an adjustment to the Unitary Charge pursuant to clause 71 (Financial Adjustments);
means the procedure set out in Schedule 24 (Change Protocol);18
Code Dispute Resolution Procedure
the procedure set out in Schedule 19 (Code Dispute Resolution Procedure);
the express obligations of the Contractor in clause 29.14 (Compliance with Code Obligations) (other than in clause 29.14.1);
the Code of Practice on Workforce Matters in Local Authority Service Contracts as currently contained in ODPM Circular 3/03 Annex D;
a collateral warranty executed as a deed between the Authority and (as the case may be) the Building Contractor, a Building Sub-Contractor, a member of the Professional Team, the Leisure Operator or the FM Contractor(s) in the relevant form as set out in Schedule 7 (Collateral Warranty);
the date of this Agreement;
Commercially Sensitive Information
the subset of Confidential Information listed in column 1 of Part 1 (Commercially Sensitive Contractual Provisions) and column 1 of Part 2 (Commercially Sensitive Material) of Schedule 21 (Confidential Information) in each case for the period specified in the respective columns 2 of Parts 1 and 2 of Schedule 21;
[a standby facility committed to by the Senior Lenders at the date of this Agreement for the purposes of funding any unforeseen cost overruns, increased expenses or loss of revenues to be incurred by the Contractor];
either
(a) if Cause 50.2 (Retendering Procedure) applies, the earlier of:
(i) the date that the New Contract is entered into; and
(ii) the date on which the Authority pays the Adjusted Highest Compliant Tender Price to the Contractor; or
(b) if Cause 50.3 (No Retendering Procedure) applies, the date on which the Adjusted Estimated Fair Value of the Contract has been agreed or determined;
a breach by the Authority of any of its obligations;
the Local Government (Discretionary Payments) Regulations 1996 and the Local Government (Early Termination of Employment) (Discretionary Compensation) (England and Wales) Regulations 2000;
any tender submitted by a Compliant Tenderer that meets the Qualification Criteria notified under clause 50.2.3 (Retendering Procedure);
a tenderer who is a Suitable Substitute Contractor;
Comprehensive Performance Assessment
any comprehensive performance review of the Authority's services (including the Services) undertaken by the Audit Commission or any other Relevant Authority pursuant to Section 99 of the Local Government Act 2003 or otherwise;
(a) information that ought to be considered as confidential (however it is conveyed or on whatever media it is stored) and may include information whose disclosure would, or would be likely to, prejudice the commercial interests of any person, trade secrets, Intellectual Property Rights and know-how of either party and all personal data and sensitive personal data within the meaning of the Data Protection Act 1988; and
(b) Commercially Sensitive Information;20
has the meaning given to it in clause 66.4.1 (Identity of Adjudicator);
the Required Insurance in respect of the period from the date of this Agreement to the Services Availability Date for [the/each] Facility;
the programme for the carrying out of the Works as contained in Part 3 of Schedule 2 (Contractor's Proposals) as updated from time to time in accordance with clause 11 (Construction Programme) or Schedule 8 (Review Procedure);
the proposals for the [provision/refurbishment] of the [Facility/Facilities] to satisfy the Authority's Requirements as set out in Schedule 2 Part 1 (Construction Proposals);
all or any pollutants or contaminants, including any chemical or industrial, radioactive, dangerous, toxic or hazardous substance, waste or residue (whether in solid, semi-solid or liquid form or a gas or vapour);
Contingent Funding Liabilities
[DEFINITION TO BE INSERTED]21;
has the meaning given to it in clause 44.7 (Notice to Continue);
any month in a Contract Year provided that:
(a) the first Contract Month shall commence on the Commencement Date and end on the last day of the month in which the Commencement Date occurs; and
(b) the last Contract Month shall begin on the first day of the month in which the last day of the Contract Period occurs and end on that day;
the period from and including the Commencement Date to the Expiry Date, or if earlier, the Termination Date;
a period of twelve (12) months commencing on [1 September], provided that:
(a) the first Contract Year shall be the period commencing on the Commencement Date and ending on the immediately following [31 August]; and
(b) the final Contract Year shall be the period commencing on [1 September] immediately preceding the last day of the Contract Period and ending on that day;
Contractor Admission Agreement
an admission agreement entered into in accordance with regulation 5A of the LGPS Regulations by the Administering Authority, the Authority and the Contractor or a sub contractor (as appropriate);
has the meaning given in the Change Protocol;
has the meaning given in the Change Protocol;
any one or more of the following:
(a) following the Services Availability Date for [a Facility/the Facility] a breach by the Contractor of any of its obligations under this Agreement which materially and adversely affects the performance of the Services [at that Facility];
(b) a Persistent Breach occurs;
(c) a court makes an order that the Contractor [or Holdco] be wound up or a resolution for a voluntary winding-up of the Contractor [or Holdco] is passed;
(d) any receiver or receiver manager in respect of the Contractor [or Holdco] is appointed or possession is taken by or on behalf of any creditor of any property that is the subject of a charge;
(e) any voluntary arrangement is made for a composition of debts or a scheme of arrangement is approved under the Insolvency Act 1986 or the Companies Act 200622 in respect of the Contractor [or Holdco];
(f) an administration order is made or an administrator is appointed in respect of the Contractor [or Holdco];
(g) failure to comply with clause 69.2 (Restriction on the Contractor) or clause 70.1 (Change in Ownership) [or 70.2 (Change in Ownership) to 70.3 (Contractor Warranty)]23;
(h) the Contractor Abandons the Works at any time;
(i) [the Contractor has not commenced the Works by the Start on Site Date;]24
(j) the Acceptance Certificate [for each Facility] has not been issued by the Longstop Date;
(k) [in any three (3) month period the Authority has been entitled to reduce the amount of the aggregate of the Monthly Unitary Charge for that period by more than twenty-five per cent (25%) through Unavailability Deductions;]25
(l) [in each and every month of any six (6) month period the Authority has been entitled to reduce the amount of the Monthly Unitary Charge by more than ten per cent (10%) through Performance Deductions;]26
(m) [in any three (3) month period [an individual Facility/the Facility] has been Unavailable for twenty (20) days or more;]27
(n) subject to clause 65 (Risks that become Uninsurable) a breach by the Contractor of its obligations to take out and maintain any of the Required Insurances;
(o) the Contractor committing a material breach of its obligations under this Agreement (other than as a consequence of a breach by the Authority of its obligations under this Agreement) which results in the criminal investigation, prosecution and conviction of the Contractor or any Contractor Related Party or the Authority under the Health and Safety Regime (an H&S Conviction) provided that an H&S Conviction of a Contractor Related Party or the Authority shall not constitute a Contractor Default if, within ninety (90) Business Days from the date of the H&S Conviction (whether or not the H&S Conviction is subject to an appeal or any further judicial process), the involvement in the Project of each relevant Contractor Related Party (which in the case of an individual director, officer or employee shall be deemed to include the Contractor Related Party of which that person is a director, officer or employee) is terminated and a replacement is appointed by the Contractor in accordance with clause 69.2 (Restriction on the Contractor) provided always that in determining whether to exercise any right of termination or right to require the termination of the engagement of a Contractor Related Party under this limb (o), the Authority shall:
(i) act in a reasonable and proportionate manner having regard to such matters as the gravity of any offence and the identity of the person committing it; and
(ii) give all due consideration, where appropriate, to action other than termination of this Agreement; or
(p) two (2) failures to comply with the Authority's Pricing Requirements within the three (3) month period after the date on which a Pricing Warning Notice is served on the Contractor and not subsequently withdrawn pursuant to clause 41.5 (Authority Pricing Requirements);
(a) an officer, servant or agent of the Contractor, or any Affiliate of the Contractor and any officer, servant or agent of such a person;
(b) any Sub-Contractor or other sub-contractor of the Contractor of any tier and any of their officers, servants or agents; and
(c) any person on or at [any of] the ]Facility/Facilities] at the express or implied invitation of the Contractor (other than an Authority Related Party or a User);
the proposals of the Contractor to deliver the Project to satisfy the Authority's Requirements, as set out in Schedule 2 (Contractor's Proposals);
the person to be appointed by the Contractor pursuant to clause 12 (Contractor's Representative);
the occupational pension scheme(s) established or to be established under clause 30.7 (Contractor Scheme) of this Agreement;
the percentage figure corresponding to that part of the Cumulative Capital Expenditure at the relevant time, as shown in the first column of the table set out in Schedule 3 (Change in Law - Contractor's Share);
has the meaning given to it in clause 40.3.1 (Termination on Authority Default);
the information relating to the Contractor and its Affiliates contained in Part 2 of Schedule 11 (Warranted Data);
other than in relation to any minor road traffic offences, any previous or pending prosecutions, convictions, cautions and binding overs (including any spent convictions as contemplated by section 1(1) of the Rehabilitation of Offenders Act 1974 by virtue of the exemptions specified in Part II of Schedule 1 of the Rehabilitation of Offenders Act 1974 (Exemptions) Order 1975 (SI 1975/1023) or any replacement or amendment to that Order);
has the meaning given to it in Part B (Leisure) of the Services Specification;
the bureau established pursuant to Part V of the Police Act 1997;
Cumulative Capital Expenditure
the aggregate of:
(a) all Capital Expenditure which has been incurred as a result of each General Change in Law that has come into effect on or after the Services Availability Date [for the final Facility]; and
(b) the amount of Capital Expenditure that is agreed, or determined to be required, as a result of a General Change in Law under clause 58 (Change in Law);
any or all (as the case may be) of Unavailability Deductions or Performance Deductions;
an agreement on the same terms and conditions as this Agreement as at the Termination Date, but with the following amendments:
(a) if this Agreement is terminated during the Works Period, then the [relevant] Planned Services Availability Date[s] shall be extended by such period as would have been granted to allow a New Contractor to achieve completion of the Works at the Facility in question;
(b) any accrued warning notices issued pursuant to clause 41 (Termination for Persistent Breach) or Pricing Warning Notices or Deductions shall, for the purposes of termination only, and without prejudice to the rights of the Authority to make financial deductions, be cancelled; and
(c) the term of such agreement shall be for a period equal to the term from the Termination Date to the Expiry Date;
any increased margin that is payable to the Senior Lenders or which accrues as a result of any payment due to the Senior Lenders not being made on the date on which it is due;
any defect in any of the Buildings, or any part of them, or anything installed in the Buildings attributable to:
(a) defective design;
(b) (b) defective workmanship or defective materials (which, for the avoidance of doubt, shall exclude asbestos), plant or machinery used in such construction having regard to Good Industry Practice and to appropriate British standards and codes of practice current at the date of construction of the Building;
(c) the use of materials in the construction of any Building which (whether or not defective in themselves) prove to be defective in the use to which they are put in the construction of any such Building;
(d) defective installation of anything in or on the Buildings;
(e) defective preparation of the site on which the Building is constructed; or
(f) defects brought about by adverse ground conditions or by reason of subsidence, water table change or any other change to ground conditions;
all drawings, reports, documents, plans, software, formulae, calculations and other data relating to the design, construction, testing or operation of the [Facility/Facilities];
the direct agreement dated on or about the date of this Agreement and made between the Authority, the Contractor and the [Agent];
EC Council Directive 2001/23/EC;
all damage, losses, liabilities, claims, actions, costs, expenses (including the cost of legal or professional services, legal costs being on an agent/client, client paying basis), proceedings, demands and charges whether arising under statute, contract or at common law but, to avoid doubt, excluding Indirect Losses;
information relating to the Project disclosed to the Contractor and its Shareholders and advisers before the date of this Agreement including:
(a) the Invitation to Submit a Detailed Solution; and
(b) the data room located at [INSERT DETAILS]; and
(c) [others];
a Change in Law, the terms of which apply expressly to:
(a) the Project and not to similar projects procured under the PFI;
(b) the Contractor and not to other persons; and/or
(c) PFI Contractors and not to other persons;
has the meaning given to it in clause 36.5.2 (Disputed Amounts);
the procedure for the resolution of disputes set out in clause 66 (Dispute Resolution);
(a) whether in cash or in kind any:
(i) dividend or other distribution in respect of share capital;
(ii) reduction of capital, redemption or purchase of shares or any other reorganisation or variation to share capital;
(iii) payments under the Subordinated Financing Agreements (whether of principal, interest, breakage costs or otherwise);
(iv) payment, loan, contractual arrangement or transfer of assets or rights to the extent (in each case) it was put in place after Financial Close and was neither in the ordinary course of business nor on reasonable commercial terms;
(v) the receipt of any other benefit which is not received in the ordinary course of business and on reasonable commercial terms, or
(b) the early release of any Contingent Funding Liabilities, the amount of such release being deemed to be a gain for the purposes of any calculation of Refinancing Gain;
from time to time the European Economic Area as created by The Agreement on the European Economic Area 1992 or any successor or replacement body, association, entity or organisation which has assumed either or both the function and responsibilities of the European Economic Area;
such local, regional or national elections or referenda that the Authority or its returning office is statutorily required to administer;
(a) the Transferring Employees who are active members of [or eligible to join]28 the LGPS on a Relevant Transfer Date;
(b) [the Transferring Original Employees who are active members of [or eligible to join] either the LGPS or a broadly comparable scheme provided by their existing employer on a Relevant Transfer Date;]29
(c) any other individuals nominated by the Contractor or Sub-Contractor (as appropriate),
for so long as they are employed in connection with the provision of the Services or part of such Services;
an event causing or, in the reasonable opinion of a party, threatening to cause death or injury to any individual, or serious disruption to the lives of a number of people or extensive damage to property, or contamination of the environment in each case on a scale beyond the capacity of the emergency services, or preventing the Services operating under normal circumstances and requiring the mobilisation and organisation of the emergency services;
Employee Liability Information
the employee liability information to be provided pursuant to Regulation 11 of TUPE;
Environmental Information Regulations
means the Environmental Information Regulations 2004 together with any guidance and/or codes of practice issued by the Information Commissioner or relevant Government Department in relation to such regulations;
the projected blended rate of return to the Relevant Persons over the full term of this Agreement, having regard to Distributions made and projected to be made;
Estimated Change in Project Costs
in relation to clause 16 (Extensions of Time), clause 58 (Change in Law) and the Change Protocol, the aggregate of any estimated increase in construction costs, operating costs and financing costs less the aggregate of any estimated reduction in construction costs, operating costs and financing costs;
Estimated Fair Value of the Contract
the amount determined in accordance with clause 50.3 (No Retendering Procedure) that a third party would pay to the Authority as the market value of the Deemed New Contract;
Estimated Increased Maintenance Costs
has the meaning given to it in clause 23.4.7 (Schedule of Programmed Maintenance);
for an Insurance Review Period, the extent to which there is an Insurance Cost Increase which exceeds in amount thirty per cent (30%) of the Base Relevant Insurance Cost for that Insurance Review Period;
for an Insurance Review Period, the extent to which there is an Insurance Cost Decrease which exceeds in amount thirty per cent (30%) of the Base Relevant Insurance Cost for that Insurance Review Period;
(a) any Refinancing that was fully taken into account in the calculation of the Unitary Charge;
(b) a change in taxation or change in accounting treatment;
(c) the exercise of rights, waivers, consents and similar actions which relate to day to day administrative and supervisory matters, and which are in respect of:
(i) breach of representations and warranties or undertakings;
(ii) movement of monies between the Project Accounts in accordance with the terms of the Senior Financing Agreements as at Financial Close;
(iii) late or non-provision of information, consents or licences;
(iv) amendments to Sub-Contracts;
(v) approval of revised technical and economic assumptions for financial model runs (to the extent required for forecasts under the Financing Agreements);
(vi) restrictions imposed by the Senior Lenders on the dates at which the Senior Debt can be advanced to the Contractor under the Senior Financing Agreements and/or amounts released from the [Escrow Account] during the [Initial Availability Period], each as defined in the Senior Financing Agreements30 and which are given as a result of any failure by the Contractor to ensure that the construction work is performed in accordance with the agreed construction programme and which are notified in writing by the Contractor or the Senior Lenders to the Authority prior to being given;
(vii) changes to milestones for drawdown and/or amounts released from the [Escrow Account] during the [Initial Availability Period] set out in the Senior Financing Agreements and which are given as a result of any failure by the Contractor to ensure that construction work is performed in accordance with the agreed construction programme and which are notified in writing by the Contractor or the Senior Lenders to the Authority prior to being given;
(viii) failure by the Contractor to obtain any consent by statutory bodies required by the Senior Financing Agreements; or
(ix) voting by the Senior Lenders and the voting arrangements between the Senior Lenders in respect of the levels of approval required by them under the Senior Financing Agreements;
(d) any amendment, variation or supplement of any agreement approved by the Authority as part of any Qualifying Variation under this Agreement;
(e) any sale of shares in the Contractor [or Holdco] by the Shareholders or securitisation of the existing rights and/or interests attaching to shares in the Contractor [or Holdco provided that this limb (e) shall, in respect of shares in Holdco, only apply for so long as Holdco holds 100% of the issued share capital of the Contractor];
(f) any sale or transfer of the Subordinated Lenders' existing rights and/or interests under the Subordinated Financing Agreements or securitisation of the Subordinated Lenders' existing rights and/or interests under the Subordinated Financing Agreements; or
(g) any Qualifying Bank Transaction;
a [facility/facilities] (listed in Schedule 4 ([Facility/Facilities]), prior to the [relevant] Services Availability Date (but for the avoidance of doubt excluding any new facilities comprising the Works);
[♦];
the [facility/facilities] listed in Schedule 4 ([Facility/Facilities]) being the buildings and other facilities to be provided, maintained and serviced in accordance with this Agreement located on and consisting of the Site[s];
the requirements of the Authority in relation to the provision of the [Facility/Facilities] set out in Part 1 of Schedule 1 (Authority's Requirements);
the amount at which an asset or liability could be exchanged in an arm's length transaction between informed and willing parties, other than in a forced or liquidation sale;
the Freedom of Information and Data Protection (Appropriate Limit and Fees) Regulations 2004;
has the meaning given to it in clause 29.4.2 (Employment Costs);
has the meaning given to it in clause 41.2 (Final Notice);
has the meaning given to it in the Senior Financing Agreements31;
all or any of the agreements or instruments entered into or to be entered into by the Contractor or any of its Associated Companies relating to the financing of the Project (including the Initial Financing Agreements and any agreements or instruments to be entered into by the Contractor or any of its Associated Companies relating to the re-scheduling of their indebtedness or any Refinancing);
[ ]32
the person with whom the Authority initially contracted for the provision of services which are similar to the Services;
has the meaning given to it in clause 29.4.1 (Employment Costs);
the first Business Day following the date of the first anniversary of the Relevant Insurance Inception Date;33
the maintenance plan provided by the Contractor to the Authority in accordance with clause 23.4.9 (Schedule of Programmed Maintenance);
subject to clause 53.1 (Changes to Project Documents) the agreement in the Agreed Form between the Contractor and the FM Contractor relating to the Maintenance Services;
has the meaning given to it in clause 66.16.2 (Similar Disputes);
[INSERT NAME AND COMPANY NUMBER], or such other facilities management contractor as the Contractor may, subject to clause 7 (Documents and Co-Operation), appoint to provide the Maintenance Services;
the Freedom of Information Act 2000 and any subordinate legislation (as defined in Section 84 of the Freedom of Information Act 2000) made under the Freedom of Information Act 2000 from time to time together with any guidance and/or codes of practice issued by the Information Commissioner or relevant Government Department in relation to such Act;
the occurrence after the date of this Agreement of:
(a) war, civil war, armed conflict or terrorism; or
(b) nuclear, chemical or biological contamination unless the source or cause of the contamination is as a result of any act by the Contractor or its sub-contractors or any breach by the Contractor of the terms of this Agreement; or
(c) pressure waves caused by devices travelling at supersonic speeds,
(d) which directly causes either party (the Affected Party) to be unable to comply with all or a material part of its obligations under this Agreement;
shall have the meaning given to it in clause 29.12.4 (Indemnities);
a Change in Law which is not a Discriminatory Change in Law or a Specific Change in Law or a Best Value Change in Law;
that degree of skill, care, prudence and foresight and operating practice which would reasonably and ordinarily be expected from time to time of a skilled and experienced operator (engaged in the same type of undertaking as that of the Contractor) or facilities management contractor or building contractor or leisure operator or any sub-contractor under the same or similar circumstances;
any applicable guidance or directions with which the Contractor is bound to comply;
the requirements relating to the condition of the [Facility/Facilities] set out in section [ ] of the Services Specification;
the lease relating to the Site[s] to be granted by the Authority to the Contractor in the Agreed Form;
the Food Safety Act 1990 (and associated regulations), the Health & Safety at Work etc Act 1974 (and associated regulations), the Fire Precautions Act 1971, the Environmental Protection Act 1990, the Water Industry Act 1991, the Water Resources Act 1991 and any similar or analogous health, safety or environmental legislation in force from time to time;
Highest Compliant Tender Price
the price offered by the Compliant Tenderer (if any) with the highest tender price and, if no Compliant Tenders are received, zero;
[Holdco]
[insert details of the Contractor's 100% holding company if any];34
[has the meaning given to it in Section 1159 of the Companies Act 200635;]
has the meaning given to it in clause 62.4 (Notification of Claims);
has the meaning given to it in clause 62.4 (Notification of Claims);
the person appointed jointly by the Authority, the Contractor [and the Senior Lender] to act as independent certifier to the Project in accordance with the Independent Certifier's Deed of Appointment;
Independent Certifier's Deed of Appointment
the deed of appointment of the Independent Certifier in the Agreed Form;
has the meaning given to it in the definition of RPIx in this clause 1.1 (Definitions);
loss of profits, loss of use, loss of production, loss of business, loss of business opportunity, or any claim for consequential loss or for indirect loss of any nature but excluding any of the same that relate to loss of Revenue;
has the meaning given to it under Section 84 of the Freedom of Information Act 2000;
in relation to [a/the] Facility the amount shown in the column so headed in Schedule 4 ([Facility/Facilities]) against [that/the] Facility;
the Financing Agreements put in place upon signature of this Agreement as follows:36
[ ]
copies of which have been initialled by the parties for the purposes of identification;
[in relation to [a/the] Facility, the period from and including the Services Start Date until and excluding the Services Availability Date [for that Facility]];
[the services required to satisfy the requirements of the Initial Services Specification];
[Initial Services Specification]
[the specification contained in Part 2 of Schedule 1 (Authority's Requirements)];
has the meaning given to it in clause 55.2.1 (Instalments);
the Insurance Cost Differential if the value is less than zero, multiplied by minus one;
shall, subject to the Insurance Review Procedure, be determined as follows:
Insurance Cost Differential = (ARIC - BRIC) - (±PIC)38
where
ARIC is the Actual Relevant Insurance Cost
BRIC is the Base Relevant Insurance Cost
PIC is any Project Insurance Change;
the Insurance Cost Differential if the value thereof is greater than zero;
any index introduced by the United Kingdom Government or the Office of National Statistics after the date of this Agreement and which is anticipated to be published annually to provide an independent and objective measure of changes in prevailing market insurance costs;
the First Insurance Review Date and, thereafter, each date falling on the second anniversary of the previous Insurance Review Date, except where such date lies beyond the end of the Contract Period, in which case the Insurance Review Date shall be the last renewal date of the Relevant Insurances prior to the end of the Contract Period;
a two year period from the Relevant Insurance Inception Date and each subsequent two year period commencing on the second anniversary of the Relevant Insurance Inception Date except where the end of such period lies beyond the end of the Contract Period, in which case the Insurance Review Period shall be the period from the end of the penultimate Insurance Review Period to the last day of the Contract Period;
the procedure set out in clause 63.15 (Insurance Review Procedure).
means any terms and/or conditions required to be in a policy of insurance by clause 65 and/or Schedule 14 (Insurances) but excluding any risk;
has the meaning given to it in the rules from time to time of the Financial Services Authority;
any and all patents, trade marks, service marks, copyright, database rights, moral rights, rights in a design, know-how, confidential information and all or any other intellectual or industrial property rights whether or not registered or capable of registration and whether subsisting in the United Kingdom or any other part of the world together with all or any goodwill relating or attached thereto which is created, brought into existence, acquired, used or intended to be used by the Contractor or any Contractor Related Party for the purposes of carrying out the Works and/or providing the Services and/or otherwise for the purposes of this Agreement;
[ ]40
a contract with the Authority for the provision of services which are similar to the Services, at times after they were provided under a contract with the First Contractor and before they are to be provided by the Contractor;
the joint bank account in the names of both the Authority and the Contractor, having account number [INSERT NUMBER] and held with [INSERT NAME];
shall bear the meaning ascribed to it in clause 63.14 (Insurance Review Procedure);
all amounts outstanding at the Termination Date under the Subordinated Financing Agreements;
(a) any Act of Parliament;
(b) any subordinate legislation within the meaning of Section 21(1) of the Interpretation Act 1978;
(c) any exercise of the Royal Prerogative; and
(d) any enforceable community right within the meaning of Section 2 of the European Communities Act 1972,
in each case in the United Kingdom;
subject to clause 53.3 (Changes to Project Documents), the agreement in the Agreed Form between the Contractor and the Leisure Operator relating to the Leisure Services;
has the meaning given to it in clause 66.16.3 (Similar Disputes);
[INSERT NAME AND COMPANY NUMBER] or such other leisure operator as the Contractor may, subject to clause 7 (Co-Operation), appoint to provide the Leisure Services;
means the total of
(a) the income received by the Leisure Operator from Users of the Facility;
(b) payment by third parties for use of the Facility for events such as conferences, parties and the like;
(c) payment by the Authority for use of the Facility;
(d) any income generated from advertising, product placement and the like, including a notional credit for any sponsorships or product placement which reduces the Leisure Provider's costs of providing the Services; and
(e) any other income earned as a result of use of the Facility;
Leisure Operator Transferring Employees
means in relation to any service equivalent to a Service, any persons employed by a Leisure Operator or any sub-contractor engaged by a Leisure Operator who is wholly or mainly engaged in the provision of that service as at the Relevant Service Transfer Date and who will (subject to Regulation 5(4A)) of the Transfer Regulations) become an employee of the Contractor or Sub-Contractor on the Relevant Service Transfer Date in accordance with the provisions of clause 31 (Employees);
Leisure Operator's Base Trading Account or LOBTA
means the financial model of the Leisure Operator set out as a worksheet in the Base Case as at the Commencement Date which (for the purposes of clause 27 (Market Testing)) shall not be changed or varied other than in accordance with the Change Protocol (but only where the Authority expressly agrees to amendment of the LOBTA) or on a Qualifying Change in Law;
means the amount of profit the Leisure Operator has assumed as set out in the LOBTA being ♦%41;
the services set out in the Services Specification other than the Maintenance Services;
the Local Government Pension Scheme established pursuant to regulations made by the Secretary of State in exercise of powers under sections 7 and 12 of the Superannuation Act 1972 as amended from time to time;
The Local Government Pension Scheme Regulations 1997 (SI 1997/1612) (as amended from time to time);
there are sufficient willing parties (being at least two (2) parties, each of whom is capable of being a Suitable Substitute Contractor) in the market for PFI contracts or similar contracts for the provision of services (in each case the same as or similar to the Agreement) for the price that is likely to be achieved through a tender to be a reliable indicator of Fair Value provided always that any vehicle controlled and established by the Senior Lenders specifically for the purposes of this Project and to which this Agreement may be novated shall be discounted in assessing whether there are sufficient willing parties in the market for such purposes;
a principal council (as defined in Section 270 of the Local Government Act 1972) or any body of government in England established as a successor to principal councils in relation to Leisure Services;
has the meaning set out in the Office of the Deputy Prime Minister's guidance document "Best Value Performance Indicators: 2005/06" as supplemented by the Department for Transport, Local Government and the Regions' "Use of Local Performance Indicators in the Best Value Regime Guidance on Local Performance Indicators" (2001);
the period expiring on the date that is one (1) year after the [final]42 Services Availability Date;
the date [nine (9)] months after the [last] Planned Services Availability Date or such later date as may be allowed in accordance with the terms of this Agreement;
all damages, losses, liabilities, costs, expenses (including legal and other professional charges and expenses) and charges whether arising under statute, contract or at common law, or in connection with judgments, proceedings, internal costs or demands;
the decrease in Revenue (whether of a one-off or recurring nature) arising as a direct result of a Loss of Revenue Event calculated and paid in accordance with Schedule 23 (Loss of Revenue);
an event occurring pursuant to one or more of the following:
(a) Clause 16.7.2 (Compensation Event);
(b) Clause 25.2 (Emergencies);
(c) Clause 44.7.1 (Force Majeure); or
(d) Clause 60.4.2 (Step-in Without Contractor Breach);
those services set out in Part A (Maintenance Services) of the Services Specification;
any works of maintenance or repair of the [Facility/Facilities] that are necessary to ensure that the [Facility/Facilities] are maintained in accordance with the Services Specification and Service Delivery Proposals and the [Facility/Facilities] comply with the Authority's Requirements and the Construction Proposals (including, without limitation, the renewal or replacement of any plant and equipment) throughout the Contract Period;
has the meaning given to it in clause 27.1 (Market Testing Review Dates);
market testing in accordance with clause 27.3 (Market Testing Procedure);
has the meaning given to it in clause 27.3 (Market Testing Procedure);
has the meaning given to it in clause 27.1 (Market Testing Review Dates);
Market Value Availability Deduction Amount
for any month or part of a month, an amount equal to the Unavailability Deductions that were made to the Unitary Charge under Schedule 6 (Payment Mechanism) in the month immediately preceding the Termination Date, less an amount equal to any Unavailability Deductions that were made for a Zone which was Unavailable at the Termination Date but which has subsequently become Available whether as a result of the Authority incurring Rectification Costs or otherwise;
in respect of a month, the Unitary Charge payable during that month before any deductions are made under clause 36 (Payment Provisions) and Schedule 6 (Payment Mechanism) but allowing for indexation in accordance with Schedule 6 (Payment Mechanism);
the hours of required opening of the [Facility/Facilities] to Users as set out in paragraph 13.2 of Part B of the Services Specification;
has the meaning given in Schedule 6 (Payment Mechanism);
has the meaning given to it in clause 31.1 (Criminal Records Bureau);
all permits, licences, permissions, consents, approvals, certificates and authorisations (whether statutory or otherwise) which are required for the performance of any of the Contractor's obligations under this Agreement, whether required in order to comply with Legislation or as a result of the rights of any third party;43
the aggregate of the discounted values, calculated as of the estimated date of the Refinancing, of each of the relevant projected Distributions, in each case discounted using the Threshold Equity IRR;
any Buildings constructed pursuant to the terms of this Agreement;
an agreement on the same terms and conditions as this Agreement at the Termination Date, but with the following amendments:
(a) if this Agreement is terminated during the Works Period, then the [relevant] Planned Services Availability Dates shall be extended by a period to allow a New Contractor to achieve completion of the Works at the Facility [in question];
(b) any accrued Deductions and/or warning notices issued pursuant to clause 41 (Termination for Persistent Breach) and/or Pricing Warning Notices shall, for the purposes of termination only, and without prejudice to the rights of the Authority to make financial deductions, be cancelled;
(c) the term of such agreement shall be equal to the term from the Termination Date to the Expiry Date;
(d) any other amendments which do not adversely affect the Contractor;
the person who has entered or who will enter into the New Contract with the Authority;
those employees employed by the Contractor and/or any sub-contractor to provide the Services (excluding for the avoidance of doubt any Relevant Employee) who will be working alongside the Transferring Employees;
has the meaning given to it in clause 30.12.2 (Transfer to another Employer);
the later of the Termination Date and (if applicable) the date that the Adjusted Estimated Fair Value of the Contract is agreed between the parties pursuant to clause 50.3 (No Retendering Procedure);
any Refinancing described in paragraph (a) or (c) of the definition of Refinancing and any other arrangement put in place by the Contractor or another person which has an effect which is similar to those described in paragraphs (a) or (c) or which has the effect of limiting the Contractor's or any Associated Company's ability to carry out any such arrangement described in paragraphs (a) or (c);
has the meaning given to it in clause 32.1 (Maintenance of Manual);
has the meaning given to it in clause 66.4.1 (Identity of Adjudicator);
those Relevant Employees who are not at the Service Transfer Date employed by the Authority but who have in the past been employed by the Authority and who as a result of the application of TUPE in relation to what was done for the purposes of carrying out the contract between the Authority and the First Contractor became employees of someone other than the Authority;
the amount committed under the Senior Financing Agreements as at Financial Close (as adjusted to take into account any Qualifying Variation);
means the principal amount outstanding at the Termination Date of each borrowing (other than any borrowing under any equity bridge facility) under the Senior Credit Agreement;
has the meaning given to it in clause 46.4 (Maintenance Work);
has the meaning given to it in Schedule 6 (Payment Mechanism);
means the payment mechanism set out in Schedule 6 (Payment Mechanism);
each calendar month or (in the case of the first and final Payment Period) part thereof during the Contract Period44;
has the meaning given to it in Schedule 6 (Payment Mechanism);
in relation to [the/a] Facility, the amount shown in the column headed "Periodic Rate" in Schedule 4 ([Facility/Facilities]);
without double counting, any:
(a) advance to the Contractor under the Senior Financing Agreements45, provided that such advance is not made under any Committed Stand-by Facility;
(b) Additional Permitted Borrowing;
(c) advance to the Contractor under any Committed Stand by Facility which is made solely for the purpose of funding any cost overruns, increased expenses or loss of revenue which the Contractor incurs, provided that such funds are not used in substitution for other sources of committed funding designated for those purposes46; and
(d) interest and, in respect of the original Senior Financing Agreements only (as entered into at the date of this Agreement, prior to any subsequent amendment), other amounts47 accrued or payable under the terms of such original Senior Financing Agreements,
except where the amount referred to in paragraphs (a) to (d) above is or is being used to fund a payment of Default Interest on any Additional Permitted Borrowing;
a breach for which a Final Warning Notice (referred to in clause 41.2 (Final Notice)) has been issued which has continued for more than [ ] days or recurred in [ ] or more months within the [six (6)] month period after the date on which such Final Warning Notice is served on the Contractor;
personal data as defined in the DPA which is supplied to the Contractor by the Authority or obtained by the Contractor in the course of performing the Services;
the Government's Private Finance Initiative or any similar or replacement initiative;
a person that has contracted with the Government, a Local Authority or other public or statutory body to provide services under the PFI;
has the meaning given to it in clause 64.1 (Reinstatement and Change of Requirement After Insured Event);
has the meaning given to it in clause 63.13 (Professional Indemnity Insurance);
[Planned Post Completion Works Acceptance Date48
in relation to [each/the] Site, the date shown as the corresponding Planned Post Completion Works Acceptance Date in Schedule 4 ([Facility/Facilities]) or such other date as may be allowed in accordance with the terms of this Agreement;]
Planned Services Availability Date
in relation to [the/each] Facility the date shown as the Planned Services Availability Date in Schedule 4 ([Facility/Facilities]) or such later date as may be allowed in accordance with the terms of this Agreement;
any insurance cost saving which arises from the Contractor changing the placement of the Required Insurances from being on a stand alone project-specific basis assumed at Financial Close and reflected in the Base Cost, to being on the basis of a policy (or policies) also covering risks on other projects or other matters which are outside the scope of the Project so as to benefit from portfolio savings. A Portfolio Cost Saving is defined to be a positive sum and cannot be less than zero;49
in relation to [each/the] Site, those parts of the Works to be completed after the Services Availability Date in accordance with the Construction Programme;50]
[Post Completion Works Acceptance Certificate
in respect of [a/the] Site, a certificate issued by the Independent Certifier confirming that the Post Completion Works Acceptance Requirements in respect of [that/the] Site have been met;]
[Post Completion Works Acceptance Date
in relation to any Post Completion Works in respect of [a/the] Site, the date on which the Post Completion Works Acceptance Certificate is issued;]
[Post Completion Works Acceptance Requirements
in relation to [a/the] Site, the satisfaction of the relevant tests set out in Part 2 of Schedule 5 (Completion Requirements);]
Post Termination Service Amount
for the purposes of clause 50.2 (Retendering Procedure), for the whole or any part of a month for the period from the Termination Date to the Compensation Date, an amount equal to the Maximum Unitary Charge which would have been payable in that month under this Agreement had this Agreement not been terminated, less an amount equal to the aggregate of:
(a) the Market Value Availability Deduction Amount for that month;
(b) the Rectification Costs incurred by the Authority in that month; and
(c) (where relevant) the amount by which the Post Termination Service Amount for the previous month was less than zero;
two per cent (2%) above the base rate from time to time of [INSERT NAME] Bank plc;
the nominal post-tax (i.e. post Contractor tax pre Shareholder tax for the Contractor but pre-tax for the Shareholders) Equity IRR calculated immediately prior to the Refinancing;
has the meaning given to it in clause 41.4 (Authority's Pricing Requirements);
the architects, structural engineers, mechanical and electrical engineers, acoustic engineers and [♦]51 employed by the Building Contractor in connection with the Works and any employer's agent employed by the Contractor;
the maintenance work which the Contractor is to carry out in accordance with the Schedule of Programmed Maintenance;
Programmed Maintenance Information
has the meaning given to it in clause 23.4.3 (Schedule of Programme Maintenance);
(a) offering, giving or agreeing to give to any servant of the Authority any gift or consideration of any kind as an inducement or reward:
(i) for doing or not doing (or for having done or not having done) any act in relation to the obtaining or performance of this Agreement or any other contract with the Authority; or
(ii) for showing or not showing favour or disfavour to any person in relation to this Agreement or any other contract with the Authority;
(b) entering into this Agreement or any other contract with the Authority in connection with which commission has been paid or has been agreed to be paid by the Contractor or on its behalf, or to its knowledge, unless before the relevant contract is entered into particulars of any such commission and of the terms and conditions of any such contract for the payment thereof have been disclosed in writing to the Authority; or
(c) committing any offence:
(i) under the Prevention of Corruption Acts 1889-1916;
(ii) under Legislation creating offences in respect of fraudulent acts; or
(iii) at common law in respect of fraudulent acts in relation to this Agreement or any other contract with the Authority;
(d) defrauding or attempting to defraud or conspiring to defraud the Authority;
the provision and operation of serviced accommodation to the Authority at [each and every Facility/the Facility] by the Contractor as contemplated by this Agreement including the carrying out of the Works and the provision of the Services52;
the accounts referred to in and required to be established under the Senior Financing Agreements;
(a) all Design Data; and
(b) any other materials, documents or data acquired brought into existence or used in relation to the Works, the Services or this Agreement;
the agreements entered into by the Contractor for the performance of its obligations under this Agreement which are listed in Schedule 17 (Project Documents), copies of which have been initialled by the parties for the purposes of identification;
any net increase or net decrease in the Actual Relevant Insurance Cost relative to the Base Relevant Insurance Cost, arising from:
(a) the claims history or re-rating of the Contractor or any Contractor Related Party;
(b) the effect of any change in deductibles unless the following applies:-
(i) such change is attributable to circumstances generally prevailing in the Relevant Insurance Market; and
(ii) the deductible further to such change is either greater than or equal to the maximum53 in Schedule 14 (Required Insurances)54
(c) any other issue or factor other than circumstances generally prevailing in the Relevant Insurance Market, except for any Portfolio Cost Saving.55
For the purpose of determining the Insurance Cost Differential, in the event that there is a net increase, the Project Insurance Change shall have a positive value. In the event that there is a net decrease the Project Insurance Change shall have a negative value;
has the meaning given to it in paragraph 1.1 of Schedule 10 (Liaison Procedure);
has the meaning given to it in clause 29.4.4(a) (Employment Costs);
the criteria that the Authority requires tenderers to meet as part of the Tender Process, which (subject to compliance with the procurement regulations) shall be:
(a) the New Contract terms;
(b) (b) tenderers should have the financial ability to pay the capital sum tendered for the New Contract and the financial ability to deliver the Works and/or the Services (as appropriate) for the price tendered;
(c) the tenderers may only bid on the basis of a single capital payment to be made on the date of the New Contract;
(d) the tenderer is experienced in providing the Services or similar services;
(e) the technical solution proposed by the tenderers is capable of delivery and the tenderer is technically capable of delivery of the Services; and
(f) any other tender criteria agreed by the Authority and the Contractor;
(a) the syndication by a Senior Lender, in the ordinary course of its business, of any of its rights or interests in the Senior Financing Agreements;
(b) the grant by a Senior Lender of any rights of participation, or the disposition by a Senior Lender of any of its rights or interests (other than as specified in paragraph (a) above), in respect of the Senior Financing Agreements in favour of:
(i) any other Senior Lender;
(ii) any institution which is recognised or permitted under the law of any member state of the EEA to carry on the business of a credit institution pursuant to Council Directive 2000/12/EC relating to the taking up and pursuit of the business of credit institutions or which is otherwise permitted to accept deposits in the United Kingdom or any other EEA member state;
(iii) a local authority or public authority;
(iv) a trustee of a charitable trust which has (or has had at any time during the previous two (2) years) assets of at least ten million pounds (£10,000,000) (or its equivalent in any other currency at the relevant time);
(v) a trustee of an occupational pension scheme or stakeholder pension scheme where the trust has (or has had at any time during the previous two (2) years) at least fifty (50) members and assets under management of at least ten million pounds (£10,000,000) (or its equivalent in any other currency at the relevant time);
(vi) an EEA or Swiss Insurance Undertaking;
(vii) a Regulated Collective Investment Scheme;
(viii) any Qualifying Institution; or
(ix) any other institution in respect of which the prior written consent of the Authority has been given;
(c) the grant by a Senior Lender of any other form of benefit or interest in either the Senior Financing Agreements or the revenues or assets of the Contractor [or Holdco], whether by way of security or otherwise, in favour of:
(i) any other Senior Lender;
(ii) any institution specified in paragraphs (b)(ii) to (vii) above;
(iii) any Qualifying Institution; or
(iv) any other institution in respect of which the prior written consent of the Authority has been given56;
(a) a Discriminatory Change in Law;
(b) a Specific Change in Law;
(c) a General Change in Law, which comes into effect after the final Services Availability Date57 and which involves Capital Expenditure; or
(d) a Best Value Change in Law,
which was not foreseeable at the date of this Agreement;
[ ]58;
any Refinancing that will give rise to a Refinancing Gain greater than zero that is not an Exempt Refinancing;
either:
(a) a change in [the Works and/or] the Services in respect of which either an Authority Change Notice or a Contractor Change Notice has been served and, in the case of
(i) an Authority Change Notice, the Authority has confirmed the change and, where the Contractor is not funding all or part of the required Capital Expenditure, the Authority has agreed to meet all or the remaining part (as appropriate) of such Capital Expenditure; and
(ii) a Contractor Change Notice, has been accepted by the Authority; or
(b) a Qualifying Change in Law;
and in respect of which any documents or amendments to the Project Documents which are required to give effect to such change in [the Works and/or] the Services or Qualifying Change in Law have become unconditional in all respects;
the UK Quality Scheme for Sport and Leisure of the same name (supported by, inter alia, Sport England) or any successor scheme thereto that is supported by Sport England (or its successors);
the requirements set out in Schedule 20 (Race Equality Requirements);
has the meaning given to it in clause 36.11.2 (VAT on Payments);
for the purposes of any Termination Date that occurs during the Services Period, an amount equal to the reasonable and proper costs incurred by the Authority in a particular month or part of a month in ensuring that the Services are available;
has the meaning given to it in Schedule 6 (Payment Mechanism);
(a) any amendment, variation, novation, supplement or replacement of any Financing Agreement (other than any Subordinated Financing Agreement);
(b) the exercise of any right, or the grant of any waiver or consent, under any Financing Agreement (other than any Subordinated Financing Agreement);
(c) the disposition of any rights or interests in, or the creation of any rights of participation in respect of, any Financing Agreement (other than any Subordinated Financing Agreement) or the creation or granting of any other form of benefit or interest in either the Financing Agreements (other than the Subordinated Financing Agreements) or the contracts, revenues or assets of the Contractor whether by way of security or otherwise; or
(d) any other arrangement put in place by the Contractor or another person which has an effect which is similar to any of (a) to (c) above or which has the effect of limiting the Contractor's or any Associated Company's ability to carry out any of (a) to (c) above;
an amount equal to the greater of zero and [(A - B) - C], where:
A | = | the Net Present Value of the Distributions projected immediately prior to the Refinancing (taking into account the effect of the Refinancing and using the Base Case as updated (including as to the performance of the Project) so as to be current immediately prior to the Refinancing) to be made to each Relevant Person over the remaining term of this Agreement following the Refinancing; |
B | = | the Net Present Value of the Distributions projected immediately prior to the Refinancing (but without taking into account the effect of the Refinancing and using the Base Case as updated (including as to the performance of the Project) so as to be current immediately prior to the Refinancing) to be made to each Relevant Person over the remaining term of this Agreement following the Refinancing; and |
C | = | any adjustment required to raise the Pre-Refinancing Equity IRR to the Threshold Equity IRR; |
[to be defined on a project specific basis];
Regulated Collective Investment Scheme
has the meaning given in the rules from time to time of the Financial Services Authority;
has the meaning given to it in clause 64.3.1 (Obligations);
has the meaning given to it in clause 64.3.1 (Obligations);
means all operational costs and management costs incurred by the Leisure Operator in generating the Leisure Operator Income but excluding Leisure Operator's Profit;
the assumptions that the sale of the Contractor is on the basis that there is no default by the Authority, that the sale is on a going concern basis, that no restrictions exist on the transfer of share capital, that no Additional Permitted Borrowing has taken place and therefore that the effect of the Additional Permitted Borrowing on the calculation of such amount is disregarded but that otherwise the actual state of affairs of the Contractor and the Project is taken into account;
any court with the relevant jurisdiction and any local, national or supra-national agency, inspectorate, minister, ministry, official or public or statutory person of the government of the United Kingdom or of the European Union;
the employees who are the subject of a Relevant Transfer;
an Authority Change, Qualifying Change in Law, Compensation Event or other matter as a result of which there may be an adjustment to the Unitary Charge in accordance with clause 71 (Financial Adjustments);
has the meaning given to it in clause 64.3 (Obligations);
the Required Insurance and any other insurances as may be required by law other than:
(a) Construction Period Insurance59;
(b) Business Interruption Cover except to the extent that it relates to Unavoidable Fixed Costs;60 and
(c) any ancillary insurances61;
Relevant Insurance Inception Date
the date on which the Relevant Insurances are first providing active insurance cover to the Contractor, being a date no earlier than the [relevant] Services Availability Date;
the insurance market which insures the majority of all PFI projects across all of the PFI sectors (as determined by the number of PFI projects). At the date of this Agreement the Relevant Insurance Market is in the United Kingdom;
Relevant Performance Indicators
the Best Value Performance Indicators, Audit Commission Performance Indicators and Local Performance Indicators for the Services as specified in [ ];
a Shareholder and any of its Affiliates;
any amounts standing to the credit of the Joint Insurance Account in accordance with clause 64.3.2(c);
Relevant Service Transfer [only applicable if phased Service implementation]
a relevant transfer for the purposes of TUPE;
the date on which an Eligible Employee transfers to the Contractor and/or one or more sub-contractor whether by virtue of any Relevant Transfers or deemed Relevant Transfers or otherwise;
any of the following:
(a) fire, explosion, lightning, storm, tempest, flood, bursting or overflowing of water tanks, apparatus or pipes, ionising radiation (to the extent it does not constitute a Force Majeure Event), earthquakes, riot and civil commotion;
(b) failure by any statutory undertaker, utility company, local authority or other like body to carry out works or provide services;
(c) any accidental loss or damage to the Site[s] or any roads servicing them;
(d) any failure or shortage of power, fuel or transport;
(e) any blockade or embargo which does not constitute a Force Majeure Event;
(f) any:
(i) official or unofficial strike;
(ii) lockout;
(iii) go-slow; or
(iv) other dispute,
(v) generally affecting the construction or facilities management industry or a significant sector of the local authority leisure management industry in the United Kingdom but not including industrial action specific to the Site[s] of industrial action which affects only the employees of the Contractor or its sub-contractors; or
(g) the discovery of fossils, antiquities or human remains requiring action in accordance with clause 18.8 (Fossils and Antiquities).
unless any of the events listed in paragraphs (a) to (g) inclusive arises (directly or indirectly) as a result of any wilful default or wilful act of the Contractor or any of its Sub-Contractors62;
has the meaning given to it in clause 29.4.4(b) (Employment Costs);
has the meaning given to it in clause 29.4.4(c) (Employment Costs);
shall have the meaning set out in the FOIA or the Environmental Information Regulations as relevant (where the meaning set out for the term "request" shall apply);
has the meaning given to it in clause 60.3 (Action by Authority);
the insurances specified in Schedule 14 (Insurances);
has the meaning given to it in clause 46.3.1 (Results of Survey);
the transfer of shares or any interest in shares of the Contractor to any Unsuitable Third Party;
[to be defined on a project specific basis];
has the meaning given to it in clause 29.15.1(a) (Retendering);
has the meaning given to it in clause 46.5 (Retention Fund);
has the meaning given to it in clause 29.16.2 (Termination of Agreement);
has the meaning given to it in clause 29.16 (Termination of Agreement);
the revenue or income received by the Leisure Operator (or where relevant would have been received but for the occurrence of a Relevant Event or Loss of Revenue Event) from Users of the relevant Facility for the provision of the Leisure Services at the relevant Facility;
the plans, drawings, documents and information relating to the Works listed in paragraph 7 of Schedule 8 (Review Procedure);
the procedure set out in Schedule 8 (Review Procedure);
Revised Senior Debt Termination Amount
means, subject to clause 53.5 (Restriction):
(a) all amounts outstanding at the Termination Date, including interest and (other than in respect of Additional Permitted Borrowing) Default Interest accrued as at that date, from the Contractor to the Senior Lenders without double counting in respect of Permitted Borrowing;
(b) all amounts including costs of early termination of interest rate hedging arrangements and other breakage costs63, payable by the Contractor to the Senior Lenders as a result of a prepayment in respect of Permitted Borrowing, or, in the case of early termination or interest rate hedging arrangements only, as a result of termination of this Agreement, subject to the Contractor and the Senior Lenders mitigating all such costs to the extent reasonably possible;
(i) less, to the extent it is a positive amount, the aggregate of (without double counting in relation to the calculation of the Revised Senior Debt Termination Amount or the amounts below);
(ii) all credit balances on any bank accounts (but excluding the Joint Insurance Account held by or on behalf of the Contractor) on the Termination Date;
(iii) any amounts claimable on or after the Termination Date in respect of Contingent Funding Liabilities;
(iv) all amounts, including costs of early termination of interest rate hedging arrangements and other breakage costs, payable by the Senior Lenders to the Contractor as a result of a prepayment of amounts outstanding without double counting in respect of Permitted Borrowing, or, in the case of early termination or interest rate hedging arrangements only, as a result of termination of this Agreement,;
(v) all other amounts received by the Senior Lenders on or after the Termination Date and before the date on which any compensation is payable by the Authority to the Contractor as a result of enforcing any other rights they may have; and
(vi) all APB Distributions;
the index published in Table 5 (excluding mortgage interest payments) of Business Monitor (MM23) published by the Office for National Statistics or failing such publication or in the event of a fundamental change to the Index, such other index as the parties may agree, or such adjustments to the Index as the parties may agree (in each case with the intention of putting the parties in no better nor worse position than they would have been had the Index not ceased to be published or the relevant fundamental change not been made) or, in the event that no such agreement is reached, as may be determined in accordance with clause 66 (Dispute Resolution);
Schedule of Programmed Maintenance
the Contractor's annual programme for the maintenance of [each/the] Facility to satisfy the Services Specification;
means [ ] as at the date of this Agreement or as amended with the prior written approval of the Authority;
the financing provided by the Senior Lenders under the Senior Financing Agreements;
[the non-default interest rate as defined in the Senior Financing Agreements] or such lower rate as the parties may agree;
shall mean interest and debt service costs incurred in respect of the Senior Financing Agreements less
(a) sums which are in arrears;
(b) all sums reserved by the Contractor and which the Contractor is entitled to use to make such payments, without breaching the Senior Financing Agreements;
those of the Financing Agreements listed in Part 2 of Schedule 16 (Financing Agreements), as at the Commencement Date, or as amended with the prior written approval of the Authority pursuant to clause 53.5.1 (Restriction);64
a person providing finance to the Contractor under the Senior Financing Agreements;
[INSERT DETAILS];
the [ ] day of [ ] 20[ ]65 or such other date agreed by the parties as the date on which the Service Provider assumes responsibility for the provision of (or procuring the provision by the relevant Sub-Contractors of) the Services in accordance with the terms of this Agreement;
the proposals for the method of providing the Services to satisfy the Services Specification set out in Part 2 of Schedule 2 (Service Delivery Proposals);
the transfer on a date agreed by the Parties to the Contractor of responsibility for provision of (or procuring the provision by Sub-Contractors of) the Services in accordance with this Agreement 66];
the services required to satisfy the Services Specification of the Authority contained in Part 3 of Schedule 1 (Authority's Requirements) [and the Initial Services];
in relation to [any/the] Facility, satisfaction of the Services Availability Requirements;
in relation to [any/the] Facility, the date determined in accordance with clause 20.2 (Dates on which Services Availability may occur);
Services Availability Requirements
the requirements set out in Part 1 Schedule 5 (Completion Requirements);
all pipes, sewers, drains, mains, ducts, conduits, gutters, water courses, wires, cables, meters, switches, channels, flues and all other conducting media appliances and apparatus including any fixtures, louvres, cowls and other ancillary apparatus;
in relation to [any/the] Facility, the period from and including the Services Availability Date [for that Facility] until and including the last day of the Contract Period;
the specification contained in Part 3 of Schedule 1 (Authority's Requirements);
[in relation to [each/the] Facility, the date upon which the Initial Services are to begin, shown [against that Facility] in the column headed "Services Start Date" in Part 1 of Schedule 4 ([Facility/Facilities])];
any person from time to time holding share capital in the Contractor or Holdco
the conditions of the Site[s] including (but not limited to) climatic, hydrological, hydrogeological, ecological, environmental, geotechnical and archaeological conditions;
the plan[s] of the Site[s] set out in the Agreed Form;
the area edged [red] on the [relevant] Site Plan [for each Facility] together with the Buildings and the service ducts and media for all utilities and services serving the Buildings;
minor defects, deficiencies or omissions which do not prevent the Independent Certifier from issuing [an/the] Acceptance Certificate in relation to [a/the] Facility;
the list to be prepared by the Independent Certifier in accordance with clause 20.7.1 (Snagging Items) containing Snagging Items;
has the meaning given to it in clause 20.7.1 (Snagging Items);
any Change in Law which specifically refers to the provision of a service the same as or similar to the Services or to the holding of shares in companies whose main business is providing a service the same as or similar to the Services;
[means the English Sports Council (or its successors) of Upper Woburn Place, London, WC1H 0QS];
means the guidance adopted and published by Sport England at the Commencement Date together with any changes in such guidance which were reasonably foreseeable at the Commencement Date68;]
[ ] or such later date as may be allowed in accordance with the terms of this Agreement;69
Sub-Contractor Breakage Costs70
Losses that have been or will be reasonably and properly incurred by the Contractor as a direct result of the termination of this Agreement, but only to the extent that:
(a) the Losses are incurred in connection with the Project and in respect of the provision of Services or completion of Works, including:
(i) any materials or goods ordered or Sub-Contracts placed that cannot be cancelled without such Losses being incurred;
(ii) any expenditure incurred in anticipation of the provision of services or the completion of works in the future;
(iii) the cost of demobilisation including the cost of any relocation of equipment used in connection with the Project; and
(iv) redundancy payments;
(b) the Losses are incurred under arrangements and/or agreements that are consistent with terms that have been entered into in the ordinary course of business and on reasonable commercial terms provided that any Losses in respect of loss of profits shall be limited to loss of profits for a period of [one(1)] year from the Termination Date71; and
(c) the Contractor and the relevant Sub-Contractor has each used its reasonable endeavours to mitigate the Losses;
the counterparts of the Contractor to the Project Documents (including for the avoidance of doubt, the Building Contractor, the FM Contractor and the Leisure Operator or any other person engaged by the Contractor from time to time as may be permitted by this Agreement) to procure the provision of the Works and/or the Services (or any of them) References to sub-contractors means sub-contractors (of any tier) of the Contractor;72
the contracts entered into between the Contractor and the Sub-Contractors (including for the avoidance of doubt, the Building Contract, the FM Agreement and the Leisure Contract);
has the meaning given to it in paragraph 1.2 of Schedule 8 (Review Procedure);
Subordinated Financing Agreements
[ ]73 as at the date of this Agreement or as amended with the prior written approval of the Authority;
a person who is providing finance under the Subordinated Financing Agreements;
has the meaning given to it in [Section 1159 of the Companies Act 2006]74;
has the meaning given to it in clause 27.4 (Adjustments to Unitary Charge);
Suitable Substitute Contractor
a person approved by the Authority (such approval not to be unreasonably withheld or delayed) as:
(a) having the legal capacity, power and authority to become a party to and perform the obligations of the Contractor under this Agreement; and
(b) employing persons having the appropriate qualifications, experience and technical competence and having the resources available to it (including committed financial resources and sub-contracts) which are sufficient to enable it to perform the obligations of the Contractor under this Agreement
has the meaning given to it in clause 36.11.2 (VAT on Payments);
any kind of tax, duty, levy or other charge (other than VAT) whether or not similar to any in force at the date of this Agreement and whether imposed by a local, governmental or other Relevant Authority in the United Kingdom or elsewhere;
the reasonable and proper costs of the Authority incurred in carrying out the Tender Process and/or in connection with any calculation of the Estimated Fair Value of the Contract;
has the meaning given to it in clause 27.3 (Market Testing Procedure);
the process by which the Authority requests tenders from any parties interested in entering into a New Contract, evaluates the responses from those interested parties and enters into a New Contract with a new service provider, in accordance with clause 50.2 (Retendering Procedure);
a third party appointed by the Contractor pursuant to clause 50.2.5 (Retendering Procedure);
the date of early termination of this Agreement in accordance with its terms;
Termination Date Discount Rate
a discount rate expressed as:
[(1 + R + B - A)x(1 + i) -1]
where:
R | = | the real pre-tax Project IRR as set out in the Base Case; |
i | = | the agreed assumed forecast rate of increase in the [indexation formula] set out in the Agreement for the remaining term of the Agreement; |
Gilt A | = | the real yield to maturity on a benchmark government Gilt instrument of the same maturity as the average life of the outstanding Senior Debt as shown in the Base Case as at Financial Close; and |
Gilt B | = | the real yield to maturity on a benchmark government Gilt instrument of the same maturity as the average life of the outstanding Senior Debt as shown in the Base Case as at the Termination Date; |
a notice of termination issued in accordance with this Agreement;
any compensation payable by the Authority to the Contractor on an early termination of this Agreement under clauses 51 (Compensation on Termination for Force Majeure), 50 (Compensation on Termination for Contractor Default) 48 (Compensation on Termination for Authority Default/Voluntary Termination/ Authority Break Point Date) and 49 (Compensation on Corrupt Gifts, Fraud and Refinancing Breaches) (excluding the Adjusted Highest Compliant Tender Price) and any compensation payable as a result of a termination under clause 40.3 (Termination on Authority Default);
any sub-contractor (other than the Contractor or any Sub-Contractor) engaged by or on behalf of the Authority to perform any service equivalent to a Service;
[INSERT NUMBER]75 per cent;
the [registered] title of the Authority in respect of [each of/the] Site[s] [set out in Schedule 13 (Title Deeds)/evidenced by office copy entries dated [ ]];
an employee of the Authority (excluding, to avoid doubt (without limitation), any person engaged by the Authority as an independent contractor or persons employed by any sub-contractor engaged by the Authority) whose contract of employment becomes, by virtue of the application of TUPE in relation to what is done for the purposes of carrying out this Agreement between the Authority and the Contractor, a contract of employment with someone other than the Authority;
Transferring Original Employee
(a) whose contract of employment becomes, by virtue of the application of TUPE in relation to what is done for the purposes of carrying out a contract between the Authority and the Contractor, a contract of employment with someone other than his existing employer, and
(b) whose contract of employment on each occasion when an Intervening Contract was carried out became, by virtue of the application of TUPE in relation to what was done for the purposes of carrying out the Intervening Contract, a contract of employment with someone other than his existing employer;
the Transfer of Undertaking (Protection of Employment) Regulations 2006 (SI No. 246) as amended;
has the meaning given to it in Schedule 6 (Payment Mechanism);
should mean the fixed costs incurred by the Contractor which first fall due for payment by the Contractor during the period of indemnity but excluding:
(a) costs which could have reasonably been mitigated or avoided by the Contractor;
(b) payments to any Contractor of the Associated Company;
(c) payments which are not entirely at arm's length;
(d) payments to holders of equity in the Contractor, Subordinated Lenders and any other financing costs other than Senior Debt Service Costs;
(e) Indirect Losses suffered or allegedly suffered by any person;
(f) fines, penalties or damages for unlawful acts, breaches of contract or other legal obligations;
(g) payments the Contractor can recover under contract or in respect of which the Contractor has a remedy against another person in respect of the same liability;
(h) payments to the extent that the Contractor has available to it
(i) reserves which the Contractor can draw upon without breaching the Senior Financing Agreements;
(i) standby or contingent facilities or funds of Senior Debt or equity which the Contractor is entitled to have available;
(j) payments representing any profits of the Project (to the extent not already excluded in (e) above);
the underlease relating to the Site[s] to be granted by the Contractor to the Leisure Operator in the Agreed Form;76
in relation to a risk, either that:
(a) insurance is not available to the Contractor in respect of the Project in the worldwide insurance market with reputable insurers of good standing in respect of that risk; or
(b) the insurance premium payable for insuring that risk is at such a level that the risk77 is not generally being insured against in the worldwide insurance78 market79 with reputable insurers of good standing by Contractors in the United Kingdom80;
the fee payable by the Authority in consideration of the obligations performed by the Contractor under this Agreement calculated in accordance with Schedule 6 (Payment Mechanism);
either:
(a) any person who has a material interest in the production, distribution or sale of tobacco products and/or pornography;
(b) any person whose activities are, in the reasonable opinion of the Authority, incompatible with the provision of the Services in the area; or
(c) any person whose activities, in the reasonable opinion of the Authority, pose or could pose a threat to national security;
those persons who use, or are entitled to use (whether they have done so or not) the [Facility/Facilities] and/or any or all of the Services from time to time;
value added tax at the rate prevailing at the time of the relevant supply charged in accordance with the provisions of the Value Added Tax Act 1994;
all of the works (including design and works necessary for obtaining access to the Site[s]) to be undertaken in accordance with this Agreement to satisfy the Authority's Requirements [including for the avoidance of doubt the Works involved in the Post Completion Works];
the period from the Commencement Date to the [last] Services Availability Date;
an area of the Facility which is the subject of a Zone Data Sheet;
has the meaning set out in Schedule 6 (Payment Mechanism).
_________________________________________________________________________________________
1 This will depend on the frequency of payment of insurance premiums.
2 Such documents should be annexed to the Project Agreement.
3 The Authority may wish to procure an Asbestos Survey either prior to publication of the OJEU notice or early in the procurement process (and certainly prior to the Invitation to Submit a Detailed Solution stage of the competitive dialogue process) to assess the risk profile of the Project and, on the basis of the survey undertaken, to specify the risk to be assumed by the Contractor in the competitive dialogue process. In this scenario, it is envisaged that the surveyor will be engaged by the Authority on approved terms and will provide a warranty to each of the Contractor, its Building Contractor and Senior Lenders. This Agreement has been drafted on this basis. Alternatively, an Authority may wish to use an Asbestos Register for the purposes of sharing risk in respect of asbestos. Local Authorities should seek technical and legal advice on this issue and preferred approach as part of its procurement strategy.
4 If a fund or limited partnership or "50:50" owned vehicle (which is not a "subsidiary") or similar is in the relevant ownership chain of the Contractor, this definition will need to be expanded to cover it. See further footnote 2 and Section 34 of SOPC4.
5 To be bid as part of the ISDS. See footnote to clause
6 Include reference to Holdco if relevant.
7 To be defined on a Project specific basis.
8 Where on a project specific basis there are particular reasons to do so (for example, where the Authority shares the use of the Site[s]), other persons for whom the Authority is responsible should be added here. This will be subject to HMT approval.
9 This definition should not be used if the only data in Schedule 11 is employee information. No warranty is to be given in respect of employee information because the cost adjustment mechanism is being used - see clause 29.4.1 (Employment Costs) and footnote below.
10 This is the real pre-tax (i.e. pre-tax with respect to Shareholders, post-tax with respect to the Contractor) blended rate of return for equity or amounts advanced under the Subordinated Financing Agreements (as appropriate) shown in the Base Case.
11 The Bid Date is the date on which the Contractor has fixed its price to appointment as Preferred Bidder. The Base Cost in bidders' models should be set at a long run median level such that the probabilities of the outturn costs being higher or lower in the future (after adjusting for RPI inflation) are the same. This is to ensure that the approach is consistent with the symmetrical sharing of Insurance Cost Differentials (ie +/-30% thresholds etc.). Furthermore, the median level should be held constant in real terms (year on year) and not profiled, as this will help to ensure that the symmetrical cost sharing band works as intended. Authorities and their advisers must take care to avoid accepting artificially depressed Base Cost figures which will underestimate the outturn unitary charge payment profile and simply lead to the Authority paying compensation above the upper 30% threshold during the Contract term. Conversely, they should not rely on the sharing of future cost reductions, below the lower 30% threshold as justification for an overestimated Base Cost still representing value for money.
12 Authorities may consider whether they should exclude any future profit element from the calculation of costs of early termination of interest hedging arrangements where the termination is for force majeure, breach of refinancing, corrupt gifts and uninsurabilty.
13 Such references should also cover such credit balances whether they are held as cash (as with revenue accounts) or in the form of investments (as with reserve accounts).
14 Any proceeds standing to the credit of the Joint Insurance Account will continue to be used for reinstatement after the Termination Date. See Section 63 (Reinstatement and Change of Requirement after Insured Event).
15 This recognises that these balances will, in the ordinary course, be charged to the Senior Lenders as security and so on a termination can be set off by them against outstandings. It is sensible, therefore, not to pay such amounts, rather than to pay and subsequently recover such amounts. To the extent any accounts are not charged to Senior Lenders, they should be excluded from (i).
16 The Authority may wish to procure a Buildings Survey at an early stage in the procurement process to assess the risk profile of the Project and, on the basis of the survey undertaken, to specify the risk to be assumed by the Contractor in the competitive dialogue process. In this scenario, it is envisaged that the surveyor will be engaged by the Authority on approved terms and will provide a warranty to each of the Contractor, its Building Contractor and Senior Lenders.
17 In composite trade Projects, the definition may be amended thus to read "Works" Expenditure or "Relevant" Expenditure.
18 This is to be developed by 4ps to conform with the latest guidance from PUK and will be made available separately. All references to change in this Agreement are compatible with the Change Protocol.
19 In the context of a pure leisure PFI project, any reference to breach of warranties in the definition of "Compensation Event" is not considered appropriate. A project specific justification would be required for any such reference.
20 Any information or classes of information that the parties agree should be treated as Commercially Sensitive Information should be included in Part 2 of Schedule 21 (Commercially Sensitive Information). The Authority should be mindful of guidance on this issue when agreeing which information should be categorised as commercially sensitive. This can cover specific bid information (for specific periods) or other types of generic information but broad blanket categorisations are not appropriate.
21 This will depend upon the particular obligations undertaken in respect of the financing of the Project.
22 The latest Companies Act should be referred to. See footnote to the definition of Holding Company.
23 It is up to each Authority to decide whether to extend this event of Contractor Default to include breach of the notification provisions in clauses 70.2 (Notification) to 70.3 (Contractor Warranty).
24 This limb of Contractor Default is only relevant where the Start on Site Date is a key date for the Authority.
25 The levels of the trigger are project-specific and subject to calibration of the payment mechanism.
26 The levels of the trigger are project-specific and subject to calibration of the payment mechanism.
27 The levels of the trigger are project-specific and subject to calibration of the payment mechanism.
28 The Authority may wish to protect employees who are eligible to join the LGPS but have not yet done so. The HM Treasury Guidance 'Staff Transfers From Central Government: A Fair Deal For Staff Pensions' refers to protection in respect of future service for transferring staff rather than just transferring active pension scheme members.
29 The protection of the pension rights of Transferring Original Employees under the Fair Deal Guidance will depend upon whether their original transfer from the Authority was protected under the Fair Deal Guidance. However, this will not prohibit the Authority from applying the Fair Deal Guidance to these employees now where the Authority recognises the costs of doing so and has made a value for money case for meeting those costs. Similarly the Fair Deal Guidance does not protect the pension rights of staff recruited by an existing contractor after the transfer of the Transferring Original Employees. However, the Authority would not be prohibited by Guidance from providing some pension protection for such staff where appropriate on value for money grounds. The Authority should also consider the protection which will apply under the proposed changes to TUPE.
30 These definitions should follow those contained in the Senior Financing Agreements - the Initial Availability Period being the construction phase drawdown period. These will need to be checked.
31 To be checked against final version of Senior Financing Agreements.
32 This should be defined by reference to the borrower defaults under the Senior Financing Agreements (and applies whether or not the Senior Lenders choose to accelerate their loan). Note this obligation is additional to the obligations of the Agreement under clause 10(d) of the Senior Lender's Direct Agreement.
33 The first insurance review takes place 12 months and one day following the Relevant Insurance Inception Date. The costs considered at the time of the first review will be:
• the insurance premium payable to cover the first year of operation; and
• the insurance premium payable to cover the second year of operation.
With the exception of the last review, which, depending on Contract Period, may also occur after a shorter period, all other reviews will take place biennially.
34 Whether or not this definition is used will depend upon the financial structure which is adopted. If there is no 100% holding company used as part of the project structure then this definition should not be used. References to "Holding Company" however must remain.
35 If the act has not been implemented at the time of use of this Contract, replace the reference with: " Section 736 of the Companies Act 1985, as amended by section 144 of the Companies Act 1989".
36 List to be inserted.
37 The Insurance Cost Decrease is always a positive sum (if not zero).
38 In accordance with the definition of Project Insurance Change, the PIC may have either a positive or a negative value. In the event that the PIC is positive then the PIC is subtracted from the difference of the ARIC and the BRIC. If the PIC is negative, then the double negative means that the value of the PIC (ignoring the negative sign) is added to the difference of the ARIC and the BRIC.
39 The Insurance Cost Increase is always a positive sum (if not zero).
40 The Authority should insert a definition setting out the broad headings and issues which it requires to cover.
41 To be bid back.
42 The period of lock in is to be one year after the end of the Construction Period (including demolition and landscaping). Therefore, where demolition and/or landscaping are to occur after the final Services Availability Date, the definition above will need to address this.
43 There may be some Necessary Consents which only the Authority can obtain. Where this is the case, the Authority should be obliged to obtain such Necessary Consents.
44 If there are no Initial Services then this will need to refer to the Services Period as opposed to the Contract Period.
45 If the Senior Lenders are not committing a Committed Stand-by Facility at financial close, the Authority should conduct due diligence over the sizing of the facilities that are committed, so as to ensure that they have not been inflated in such a way that the effect is to create a facility which by its very nature, also acts as a "Committed Stand-by Facility".
46 This will be any standby facility that is committed by the Senior Lenders at financial close for the purposes of funding any unforeseen cost overruns, increased expenses or loss of revenues incurred by the Contractor, and the Authority should conduct due diligence over the size and terms of the facility prior to Financial Close to evaluate its potential liability under clause 53 (Change to Financing Agreement). The protection given to the Contractor under clause 53 (Changes to Financing Agreements) should only take effect if the purpose of the advance under the Committed Standby Facility is to fund genuine unforeseen costs and not, for example, to prepay amounts owned by the Contractor under the Subordinated Financing Agreements.
47 It is vital that the Authority's advisers satisfy themselves as to the appropriateness of the senior finance terms (especially any possible unusual fees or indemnities) in the light of this potential liability. If the Authority is not so satisfied, it should either ask the senior lenders to revise their terms or alternatively restrict the Authority's exposure under sub-clause (d) of Permitted Borrowings above to those fees which it is willing to pay on a relevant termination.
48 Suggested drafting to be used where there is post Services Availability Works e.g. demolition.
49 An Authority may not be compelled to join a portfolio solution which places it in a worse position than if insurance is placed on a separate stand-alone basis.
50 The Authority will need to specify the extent to which it is prepared to accept a phased handover of a particular Facility, including in relation to demolition. If this concept is followed then this defined term will need to be used. Note though that the concept of Post Completion Works will only apply to those phases of the Works other than that which constitutes Services Availability. For Services Availability, the Acceptance Certificate regime will continue to apply.
51 Specify other relevant consultants.
52 This definition may need to be amended on a case by case basis.
53 The Authority, in conjunction with its advisers, should set the maximum deductibles in the Required Insurance Schedule (see Schedule 14) at the highest acceptable level.
54 The effect of this clause is to incentivise the Contractor to manage and optimise the trade-off between insurance premium and deductible levels for deductible levels below the maximum stipulated within the Authority Required Insurances, whilst providing protection in two specific circumstances: the first is where, due to circumstances generally prevailing in the Relevant Insurance Market, the cost of maintaining deductibles at the maximum stipulated in the Required Insurance Schedule has increased; and the second is where, due to circumstances generally prevailing in the Relevant Insurance Market, the Required Insurances can only be purchased with deductible levels above the maximum stipulated in the Schedule, wherein two principles apply: (a) the Contractor is given relief from breach by virtue of the provisions which deal with terms and conditions that become unavailable (clause 65.5
55 This means that in addition to portfolio cost savings, changes which are attributable to a general movement in insurance costs across the entire PFI market will be taken into account.
56 Any attempt by banks to attempt to conceal refinancings behind elaborate avoidance structures will be regarded as a serious breach of these provisions and dealt with accordingly.
57 In grouped leisure projects with unusually long construction phases this may not be value for money. Authorities to decide on a Project specific basis if in such Projects the Contractor should bear the risk on a facility by facility basis.
58 If there are particular institutions which for particular reasons do not come within the other heads of Qualifying Bank Transaction, bidders may propose to the Authority that such institutions be included as Qualifying Institutions. In the light of the broad drafting of the other provisions in the definition of Qualifying Bank Transaction, the Authority would expect any such proposal to be specific and limited. Broad group definitions will not be entertained.
For listed bond transactions the following may be inserted:
"(a) any holder in due course of any security arising under or constituted by the Senior Financing Agreements in respect of which an application has been made for such security to be admitted to listing, either:
(i) on the Official List of the Financial Services Authority in its capacity as competent authority for the purposes of Part IV of the Financial Services and Markets Act 2000 (and to trading on the London Stock Exchange); or
(ii) to the competent authority in any other EEA state; or
(b) in a situation where any security arising under or constituted by the Senior Financing Agreements is no longer admitted to listing as described in paragraph (a) above, any person whose ordinary activities involve them in acquiring, holding or disposing of investments (as principal or agent) for the purposes of their business where the acquisition of the rights of a Senior Lender in the Senior Financing Agreements takes place in accordance with all applicable securities legislation other than where such acquisition, grant or disposition is made in concert with the Shareholders and/or the Junior Debt holders for the purpose of giving rise to a Refinancing Gain; or
(c) a trustee for any other entity listed in paragraph (b) (ii) to (viii) or (c) (ii) or (iii) of the definition of Qualifying Bank Transaction other than a trustee whose acquisition, grant or disposition is made in concert with the Shareholders and/or the Junior Debt holders for the purpose of giving rise to a Refinancing Gain."
59 This is assumed to be covered under fixed price arrangements and so not subject to variation.
60 In addition to senior debt service costs, the Contractor may incur other unavoidable costs if the start of the operational period is delayed or in the event of an interruption to the operation of the project, eg. any fixed cost for the provision of utilities. These unavoidable costs will vary from project to project. Unavoidable Fixed Costs is defined in part 5 of Schedule 14 and excludes Distributions.
61 If the Required Insurance contains any supplementary (ie non-standard) insurances, for which Insurance Premium Risk Sharing is not being provided, these must also be referred to here.
62 Where a Site is known to be in a region of archaeological historic interest and it may be difficult for the Building Contractor to accept flow down of the risk on a cost effective basis then Authorities should consider whether the discovery of fossils and antiquities should be a Relief Event.
63 Authorities may consider whether they should exclude any future profit element from the calculation of costs of early termination of interest hedging arrangements where the termination is for force majeure breach of refinancing corrupt gifts and availability.
64 Where referred to in the Agreement, Senior Financing Agreements should mean those agreements as at the date of the Contract as they may be amended with the approval of the Authority pursuant to clause 53.3.1
65 If the Service Commencement Date is the same as the Actual Completion Date, a separate definition may not be required. However, note its use in clause 29 (TUPE and Employees).
66 If it is likely that there will be more than one transfer date, define "Relevant Service Transfer Date" as "the transfer on one or more dates agreed by the Parties (each a "Relevant Service Transfer Date") to the Contractor of responsibility for provision of (or procuring the provision by Sub-Contractors of) the Services in accordance with this Agreement".
67 This definition will only be required where Initial Services will be provided under the Agreement.
68 This needs to be considered by Authorities on a project specific basis as it may not be a requirement of the Authority to comply with Sport England Guidance in this respect. If it is likely there will be more than one transfer date, define "Relevant Service Transfer Date" as "the transfer on one or more dates agreed by the Parties (each a "Relevant Service Transfer Date") to the Contractor of responsibility for provision of (or procuring the provision by Sub-Contractors of) the Services in accordance with this Agreement.
69 To be defined on a project specific basis.
70 In leisure PFI Projects it is recognised that Sub-Contractor Breakage Costs are potentially higher than in other sectors. Local Authorities should be aware that due diligence on the Sub-Contracts is especially important in this regard. Local Authorities should consider requesting the anticipated levels of Sub-Contractor Breakage Costs, especially profit, as part of the competitive dialogue process so that this element can be evaluated.
71 Authorities should consider inserting a relevant Sub-Contractor loss of profit cap as recommended by paragraph 21.1.3.7 of SoPC4.
72 This may need to include an Industrial and Provident Society or other Not for Profit Distributing Organisation if a trust structure is adopted. On mixed use developments, there may be other Sub-Contractors.
73 These are the debt financing documents signed at Financial Close, through which the early investors will often invest "equity" in the Project in the form of subordinated debt.
74 If the Act has not been implemented at the time of use of this Contract, replace the reference with "Section 736 of the Companies Act 1985, as amended by Section 144 of the Companies Act 1989"
75 This information will need to be provided by the Contractor. This is the nominal post tax (with respect to the Contractor) Equity IRR set out in the Base Case, which excludes the effects of any anticipated refinancing.
76 This may need amendment depending on the structure of the consortium (e.g. is an Industrial and Provident Society or other Not for Profit Distributing Organisation involved).
77 The effect of this provision should not be to give the Contractor protection against changes in terms of insurance or levels of deductibles, but only give protection if the cost of insurance (on any terms) is at such a level that the market is not generally insuring against that risk.
78 To the extent relevant, the wider risk transfer market (rather than just the insurance market) should be referred to. Insurance advice should be taken on this. Reference to any geographically narrower market, such as the European market, will not be acceptable.
79 This approach is preferable to one dealing with the extent to which prices of premiums have increased.
80 In projects where the Contractor retains end user risk, the Authority should consider whether it should give the Contractor any price protection in relation to increases in insurance premiums (i.e. paragraph (b) of the definition of "Uninsurable" can be deleted) as the Contractor can manage such increases by increasing the price that the end user pays for the Services to reflect any increase in insurance premiums for the Project.
81 This should also include, where appropriate, demolition and landscaping. The inclusion of the reference to "Post Completion Works" is intended to pick this up.