40.5  Rectification

(a)  If a Contractor Default has occurred and the Authority wishes to terminate this Agreement, it must serve a Termination Notice on the Contractor.

(b)  The Termination Notice must specify:

(i)  the type and nature of Contractor Default that has occurred, giving reasonable details; and

(ii)  that in the case of any Contractor Default falling within paragraph (a) (Material Breach), paragraph (g) (Assignment, Subcontracting and Change of Control) and paragraph (n) (Insurance) of the definition of Contractor Default this Agreement will terminate on the day falling [forty (40)] Business Days after the date the Contractor receives the Termination Notice, unless:

(A)  in the case of a breach under paragraph (a) (Material Breach) of the definition of Contractor Default the Contractor puts forward an acceptable rectification programme within twenty (20) Business Days after the date the Contractor receives the Termination Notice (and implements such programme in accordance with its terms and rectifies the Contractor Default in accordance with the programme); or

(B)  in the case of any Contractor Default falling within paragraph (a) (Material Breach), paragraph (g) (Assignment, Subcontracting and Change of Control) and paragraph (n) (Insurance) of the definition of Contractor Default the Contractor rectifies the Contractor Default within forty (40) Business Days after the date the Contractor receives the Termination Notice; or

(iii)  that in the case of any other Contractor Default (not being paragraph (a) (Material Breach), paragraph (g) (Assignment, Subcontracting and Change of Control) or paragraph (n) (Insurance)), this Agreement will terminate on the date falling forty (40) Business Days after the date the Contractor receives the Termination Notice.

(c)  If the Contractor either rectifies the Contractor Default within the time period specified in the Termination Notice, or implements the rectification programme, if applicable, in accordance with its terms, the Termination Notice will be deemed to be revoked and this Agreement will continue.

(d)  If:

(i)  in the case of a Contractor Default within paragraph (a) (Material Breach) of the definition of Contractor Default no acceptable rectification programme has been put forward pursuant to clause 40.5.2(b) (i) (Rectification) and the Contractor fails to rectify the Contractor Default within the time period specified in the Termination Notice; or  

(ii)  in the case of a Contractor Default falling within paragraph (g) (Assignment, Subcontracting and Change of Control) and paragraph (n) (Insurance) of the definition of Contractor Default, the Contractor fails to rectify the Contractor Default within the time period specified in the Termination Notice;

the Authority may give notice stating that the Agreement will, subject to the terms of the Direct Agreement, terminate on the date falling [forty (40)] Business Days after the date of receipt of such notice.

(e)  If the Contractor fails to implement any rectification programme in accordance with its terms, the Agreement will, subject to the terms of the Direct Agreement, terminate on the date falling five (5) Business Days after the date of notification by the Authority to the Contractor of such failure to implement the rectification programme in accordance with its terms.