43.3 No Retendering Procedure

If either the Authority is not entitled to retender the provision of the Project under clause 43.1(b) (Retendering Election) or the Authority elects to require an expert determination in accordance with this clause 43.3 (No Retendering Procedure) then the following procedure shall apply:

(a) Subject to clause 43.3(b) (No Retendering Procedure), the Contractor shall not be entitled to receive any Post Termination Service Amount.

(b) If the Authority elects to require an expert determination in accordance with this clause 43.3 (No Retendering Procedure) after it has elected to follow the procedure under clause 43.2 (Retendering Procedure), then the Authority shall continue to pay to the Contractor each Post Termination Service Amount until the Compensation Date, in accordance with clause 43.2 (Retendering Procedure).

(c) In agreeing or determining the Estimated Fair Value of the Contract the parties shall be obliged to follow the principles set out below:

(i) where the Authority has exercised its Termination Option:

(A) all forecast amounts should be calculated in nominal terms at current prices, recognising the adjustment for indexation in respect of forecast inflation between the date of calculation and the forecast payment date(s) as set out in this Agreement;

(B) the total of all future payments of the full Unitary Charge (without deductions) forecast to be made shall be calculated and discounted to the Termination Date at the Termination Date Discount Rate;

(C) the total of all future forecasted Rents [and Service Charges]38 to be received by the Landlord to the Expiry Date (less a reasonable amount to cover bad debts) shall be calculated and discounted to the Termination Date at the Termination Date Discount Rate and added to the payment calculated pursuant to clause 43.3(c)(i)(B) (No Retendering Procedure);

(D) the total of all costs forecast to be incurred by the Authority and the Landlord as a result of termination shall be calculated and discounted at the Termination Date Discount Rate and deducted from the payments calculated pursuant to clause 43.3(c)(i)(B) and 43.3(c)(i)(C) (No Retendering Procedure), such costs to include (without double counting):

1) a reasonable risk assessment of any cost overruns that will arise, whether or not forecast in the relevant base case;

2) the costs of the Services forecast to be incurred by the Authority and the Landlord in providing the Project to the standard required; and

3) any rectification costs required to deliver the Project to the standard required (including any costs forecast to be incurred by the Authority and the Landlord to complete construction or development work and additional operating costs required to restore operating services standards),

in each case such costs to be forecast at a level that would have delivered the full Unitary Charge referred to in clause 43.3(c)(i)(B) (No Retendering Procedure) had the Project continued to the Expiry Date; and

(E) the lower of:

1) the EUV-SH of the Leases but (for the purposes of this clause only) on the assumption that any income or costs relating to the relevant Leases up to the Expiry Date that would normally be taken into account in determining the EUV-SH of the Leases are disregarded; and

2) the Contractor Default Residual Value Sum

shall be included in the Estimated Fair Value of the Contract to be paid by the Authority to the Contractor and added to the amount produced by the operation of clauses 43.3(c)(i)(B) to 43.3(c)(i)(D) (No Retendering Procedure) above;

(ii) where the Authority has not exercised its Termination Option:

(C) the total of all future forecasted Rents [and Service Charges]39 to be received by the Landlord to the Expiry Date (less a reasonable amount to cover bad debts) shall be calculated and discounted to the Termination Date at the Termination Date Discount Rate and added to the payment calculated pursuant to clause 43.3(c)(ii)(B) (No Retendering Procedure);

(D) the total of all costs forecast to be incurred by the Authority, the Contractor and the Landlord as a result of termination shall be calculated and discounted at the Termination Date Discount Rate and deducted from the payments calculated pursuant to clauses 43.3(c)(ii)(B) and 43.3(c)(ii)(C) (No Retendering Procedure), such costs to include (without double counting):

1) a reasonable risk assessment of any cost overruns that will arise, whether or not forecast in the relevant base case;

2) the costs of the Services forecast to be incurred by the Authority, the Contractor and the Landlord in providing the Project to the standard required; and

3) any rectification costs required to deliver the Project to the standard required (including any costs forecast to be incurred by the Authority, the Contractor and the Landlord to complete construction or development work and additional operating costs required to restore operating services standards),

in each case such costs to be forecast at a level that would have delivered the full Unitary Charge referred to in clause 43.3(c)(ii)(B) (No Retendering Procedure) had the Project continued to the Expiry Date;

(E) the EUV-SH of the Leases but (for the purposes of this clause only) on the assumption that the term of years of the relevant Leases expire on the Expiry Date without any liability for dilapidations shall be calculated and deducted from the payments calculated pursuant to clauses 43.3(c)(ii)(B) to 43.3(c)(ii)(D) (No Retendering Procedure); and

(F) the Authority's Residual Value Overage Share shall be calculated and deducted from the payments calculated pursuant to clauses 43.3(c)(ii)(B) to 43.3(c)(ii)(E) (No Retendering Procedure).

(d) If the parties cannot agree on the Adjusted Estimated Fair Value of the Contract on or before the date falling twenty (20) Business Days after the date on which the Authority elected to require an expert determination in accordance with this clause 43.3 (No Retendering Procedure), then the Adjusted Estimated Fair Value of the Contract shall be determined in accordance with the Dispute Resolution Procedure.

(e) Subject to clause 49.2 (Instalments), the Authority shall pay to the Contractor an amount equal to the Adjusted Estimated Fair Value of the Contract on the date falling forty (40) Business Days after the date on which the Adjusted Estimated Fair Value of the Contract has been agreed or determined in accordance with this clause 43.3 (No Retendering Procedure).

(f) The discharge by the Authority of its obligation in clause 43.3(e) (No Retendering Procedure) is in full and final settlement of all the Contractor's claims and rights against the Authority for breaches and/or termination of this Agreement or other Project Document whether in contract, tort, restitution or otherwise, save for any liability that arose prior to the Termination Date (but not from the termination itself) that has not been taken into account in determining the Adjusted Estimated Fair Value of the Contract.

(g) To the extent that the Adjusted Estimated Fair Value of the Contract is less than zero, then an amount equal to the Adjusted Estimated Fair Value of the Contract shall be due and payable by the Contractor to the Authority on the Compensation Date.

(h) Where the Authority has exercised its Termination Option, the Contractor shall transfer its right, title and interest in and to the Assets at the time set out in and as provided for in clause 46.1 (Assets and Transition to the Authority or to another contractor). Where the Authority has not exercised its Termination Option the Contractor shall be entitled to retain its right, title and interest in and to the Assets in respect of Sites where Leases have been granted and the Authority shall be entitled to retain or to have transferred to it by the Contractor all right, title and interest in and to the Assets in respect of Sites where Leases have not been granted at the time set out in and as provided for in clause 46.1 (Assets and Transition to the Authority or to another contractor).

_____________________________________________________________________________________________

38 To be checked if Service Charges are included in the Base Case. If they are not then reference here to Service Charges should be deleted.

39 To be checked if Service Charges are included in the Base Case. If they are not then reference here to Service Charges should be deleted.