1.1 Definitions

In this Agreement, unless the context otherwise requires, the following expressions shall have the following meanings:

["Academy Affordability Gap" means the portion of the Affordability Gap which is reasonably attributable to the Academy in respect of the School;4]

"Academy Contribution" means the sum payable by the Academy to the Authority, by way of contribution to the Unitary Charge pursuant to, and calculated in accordance with, the [Development and] School Agreement;

"Academy Related Party"5 means:

(a) an officer, agent, contractor, employee or sub-contractor (of any tier) of the Academy acting in the course of his office or employment or appointment (as appropriate);

(b) any trustee or director of the Academy acting as such, or any teacher employed by the Academy acting in the course of their employment;

(c) during the Required Period, any Pupil of the School or any person visiting the School at the invitation (whether express or implied) of the Academy;

(d) [during any period of Community Use, any person visiting or using the School for that purpose;]

(e) [any person using an Ad Hoc Use Area pursuant to clause 29.4 of the PFI Project Agreement (but such person shall only be an Academy Related Party in relation to such Ad Hoc Use Area for the period of such use)]; and

(f) []6,

but not including any of the Authority, the Contractor, the DFE, [the LEP] or any of their respective Related Parties;

["Affordability Gap" means the sum of money being the shortfall between (i) the aggregate of the Unitary Charge and (ii) the aggregate of the amounts received by the Authority in a relevant Financial Year pursuant to:

(a) the Promissory Note;

(b) the [Development and] School Agreement;

(d) [any agreements between the Authority and the [name other schools in the PFI scheme] relating to the Project;]

as may be amended from time to time;]8

"Agreement" means this agreement, its schedules and any annexures hereto, as may be amended from time to time;

"Approved Suitable Substitute" has the meaning given to it in clause 15.2;

"Area" means the area within which the Authority is statutorily responsible for the provision of educational services;

"Articles of Association" means the articles of association of the Academy (as may be amended from time to time);

"Authority Change" has the meaning given to it in the Project Agreement;

"Authority Related Party" means:

(a) an officer, agent, contractor, employee or subcontractor (of any tier) of the Authority acting in the course of his office or employment or appointment (as appropriate);

(b) any person visiting the School at the invitation (whether express or implied) of the Authority;

(d) [any person using an Ad Hoc Use Area pursuant to clause 29.4 (Ad Hoc Use), but such person shall only be an Authority Related Party in relation to such Ad Hoc Use Area for the period of such use);]

but excluding in each case the Academy, the Contractor, the DFE, [the LEP] and any of the their Related Parties;

"Business Day" means a day (other than a Saturday or Sunday) on which banks are open for domestic business in the City of London;

"Contractor" means [name] Limited a limited company registered in England and Wales and which is the counterparty of the Authority to the Project Agreement;

"Contractor Change" has the meaning given to it in the Project Agreement;

"Contractor Related Party" has the meaning given to it in the Project Agreement;

"Contractor Termination Notice" has the meaning given in the Project Agreement;

"DFE Related Party" means an officer, employee, agent, representative, contractor or subcontractor (of any tier) of the DFE acting in the course of his office or employment or appointment (as appropriate) but excluding, in each case, the Authority, the Contractor, [the LEP], the Academy and any of their respective Related Parties;

"Dedicated Schools Grant" or "DSG" means the grant of that name paid to the Authority by the Department for Education under section 14 of the Education Act 2002 and shall include a reference to any successor grant(s) and/or similar funding arrangements, as may be adjusted in accordance with clause 9 and schedule 2;

"[Development and] School Agreement" means the agreement entered into on or about the date hereof between (1) the Authority, (2) the Academy relating to the provision of facilities and services to the Academy;

"Direct Losses" means all damages, losses, liabilities, claims, actions, costs, expenses (including the cost of legal or professional services, legal costs being on an indemnity basis), to the extent that the Authority is obliged to pay such amounts to the Contractor under the Project Agreement;

"Earmarked Annual Grant" or "EAG" has the meaning given to it in the Funding Agreement and shall include a reference to any successor grant(s);

"Educational Services" has the meaning given to it in the Project Agreement;

"Event of Default" means the occurrence of any event or circumstance permitting the DFE to terminate the [Supplemental] Funding Agreement;

"Excusing Cause" means the items listed in paragraphs 3.7.1 and 4.5.5 of schedule 6 to the Project Agreement;

"Financial Year" means the financial year of the Authority being each year commencing on [1 April] (or as otherwise notified by the Authority);

"Flooding Rights" means the rights of the DFE specified in the Articles of Association and in accordance with the Funding Agreement permitting it to appoint additional governors to the board of the Academy;

"FM Services" means the facilities management services to be provided by the Contractor at the Site;

"Funder's Direct Agreement" means the agreement dated [] made between (1) the Authority (2) the Contractor (3) [the Senior Lenders];

["Funding Agreement" [means the funding agreement made pursuant to section 1 of the Academies Act 2010 between the DFE and the Academy dated [on or around the date of this Agreement][insert date] (as may be amended from time to time);]9

["Funding Agreement" [means together the Master Funding Agreement and the Supplemental Funding Agreement];]10

"General Annual Grant" or "GAG" has the meaning given in the Funding Agreement and shall include a reference to any successor grant(s);

"Guidance" means any applicable guidance or directions with which the parties are bound to comply;

"GAG Funding" shall have the meaning given to it in the Funding Agreement;

["ICT Services" means the ICT Services to be provided at the School by the LEP;]

"ICT Services Contract" means the contract for the provision of ICT Services dated [] entered into by (1) the Authority and (2) the LEP;

"Information Protocol" means the information sharing protocol set out in schedule 1;

["Lease" means the Lease granted from the Authority to the Academy pursuant to the provisions of the Academies Act 2010;]11

"Legislation" means any one or more of the following:

(a) any Act of Parliament;

(b) any subordinate legislation within the meaning of section 21(1) of the Interpretation Act 1978;

(d) any enforceable community right within the meaning of Section 2 of the European Communities Act 1972;

in each case in the United Kingdom;

["LEP" means [name] Limited with company number [] whose registered office is at [address];]12

["LEP Related Party" has the meaning given in the ICT Services Contract];

"Local Authority" means 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 [Educational Services];

["Master Funding Agreement" means the funding agreement between the DFE and the Academy dated [ ], [as varied by the Deed of Variation to the Master Funding Agreement] and as may be subsequently amended from time to time;]13

"Normal Payment Matters" means:

(a) any failure of the Academy to pay the Academy Contribution when this is due and payable in accordance with the [Development and] School Agreement;

(b) any failure of the Academy to make payments to the Authority of undisputed amounts pursuant to clause [] [insert cross reference to vandalism costs contribution clause] of the [Development and] School Agreement to the extent that these relate to payments due to the Contractor under the Project Agreement;

(c) any failure of the Academy to make payments due to the Authority of undisputed amounts under this Agreement or the [Development and] School Agreement to the extent that these relate to payments due to the Contractor under the Project Agreement and to the extent that the DFE has provided funding to the Academy expressly in respect of such payments due to the Authority;

(d) any failure of the Academy:

(i) to make payments of undisputed amounts due to the Authority pursuant to clause [] [insert cross reference to insurance costs contribution clause] of the [Development and] School Agreement to the extent that these relate to payments due to the Contractor under the Project Agreement; or

(ii) to pay to the Authority any deductible or excess costs in respect of the [Required Insurances] pursuant to clause [] [insert cross reference to Required Insurances clause] of the [Development and] School Agreement to the extent that these relate to payments due to the Contractor under the Project Agreement; and

(e) any other liability of the Academy under this Agreement or the [Development and] School Agreement to the extent that these relate to payments due to the Contractor under the Project Agreement and which the DFE reasonably determines should be payable by the Academy to the Authority,

and "Normal Payment Matter" shall be construed appropriately14;

"PFI Schools" means the schools to which the Project Agreement relates, excluding the School;

"Prescribed Rate" has the meaning given in the Project Agreement;

"Project" means the provision of serviced accommodation to the Authority in relation to the School by the Contractor as contemplated by the Project Agreement;

"Project Agreement" means the PFI project agreement dated [] and entered into by (1) the Authority and (2) the Contractor (as may be amended from time to time);

"Project Agreement Termination Notice" has the meaning given to the term Termination Notice in the Project Agreement;

"Project Documents" means the Project Agreement and the Funder Direct Agreement;15

["Promissory Note" means the promissory note issued to the Authority by the [Department for Education] dated [] relating to the Project Agreement;]

["Pupil Count Date" means the annual date upon which the Authority calculates the aggregate of all relevant enrolled pupils at schools which are maintained by the Authority;]16

"Relevant Assets" means:

(a) assets at any time transferred to the Academy by the Contractor, [the LEP] and/or the Authority for nil consideration;

(b) assets, the acquisition of which by the Academy was wholly or mainly financed through grant payments made by the DFE to the Academy under the [Supplemental] Funding Agreement; and

(c) assets not falling within paragraphs (a) and (b) above and which the DFE and the Academy have agreed prior to the date of termination of the [Supplemental] Funding Agreement (in accordance with its terms), will be purchased by the DFE from the Academy on the terms set out in [ ] of the [Supplemental] Funding Agreement;

provided that such assets are transferable as at the date of termination of the [Supplemental] Funding Agreement;

"Relevant Notice" means any notice issued under a Project Document which relates to the School (save any issued in accordance with the payment mechanism within the Project Agreement) relating to:

(a) a breach of that Project Document;

(b) the occurrence of a Compensation Event, Relief Event, Force Majeure Event or an Excusing Cause (each as defined in the Project Agreement); and/or

(d) any other notice which (assessed reasonably) may relate to circumstances which are expected to have a material adverse effect on the Project;

"Representative" means the duly authorised representative of each party (as the case may be) appointed in accordance with clause 12;

"School" means the educational establishment, buildings and facilities located at the Site;

"Site" means the area shown edged red on the site plans set out in schedule [] of the [ [Development and] School Agreement][Transfer Agreement];

["Strategic Partnering Agreement" means the agreement called the Strategic Partnering Agreement entered into on [date] by (1) the Authority and (2) the LEP;]17

"Suitable Substitute" means a charitable company incorporated in England and Wales limited by guarantee whose objects include power to maintain an academy pursuant to section 1 of the Academies Act 2010, the governing body of a maintained school, or some other legal person not comprising an Unsuitable Third Party and proposed by the DFE as having legal capacity, power, authority, competence and resources (including financial and educational resources) to become a party to and perform the obligations of the Academy under this Agreement, the [Development and] School Agreement [and the Lease];

["Supplemental Funding Agreement" means the supplemental funding agreement to be entered into by the DFE and the Academy Trust on or around the date hereof and as may be subsequently amended from time to time;]18

"Term" means any term in each academic year for the School;

["Transfer Agreement" means an agreement entered into on or about the date hereof between (1) the Authority and (2) the Academy [and (3) the governing body of the school known as [ ]] in relation to the grant of the Lease and the transfer of assets and staff from the Authority to the Academy;]

"Unitary Charge" means the sum payable by the Authority to the Contractor in accordance with the Project Agreement; and

"Unsuitable Third Party" has the meaning given to it in the Project Agreement.

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4 Relevant if there is an Affordability Gap and the PFI scheme includes multiple schools.

5 Drafting may need to be conformed to the relevant Project Agreement. Also, drafting will need to reflect the commercial deal as between the Authority and the Academy in relation to the Community Use and Ad Hoc use.

6 Additional related parties can be referred to as appropriate.

7 Income received by the Authority under the Project Agreement (for example income which the Authority receives from the Contractor arising from third party use under clause 29.10 of the Project Agreement) should be applied to fill the Affordability Gap.

8 Subject to project specific finance arrangements. DFE input should be sought as a matter of course. Where there is an Affordability Gap, there is expected to be a need to apportion it by reference to the number of schools participating in the PFI scheme (see the definition of "Academy Affordability Gap"). See clause 9, schedule 2 and the relevant footnotes for a discussion of the approach to be taken.

9 Definition included for use where the academy is a single academy. Definition to be deleted where the academy is a federated academy.

10 To be used where the academy is part of a multi Academy Trust. To be deleted where the academy follows the single Academy Trust model.

11 Property arrangements will need to be developed on a project-specific basis, although the DFE anticipates that the standard form PFI Academies lease will be the starting point.

12 Only required for PFI schemes within BSF schemes where there is a Local Education Partnership

13 To be used where the academy is part of a multi Academy Trust. To be deleted where the academy follows the single Academy Trust model.

14 See further discussion of "Normal Payment Matters" and the scope of the Normal Payment Matters at clause 4.

15 Amend as appropriate.

16 Subject to project specific finance arrangements.

17 This will only be relevant to schemes which include a LEP.

18 To be used where the Academy is part of a multi Academy Trust. To be deleted where the Academy follows the single Academy Trust model.