DATED 2007 The Nuclear Decommissioning Authority (1) and Magnox Electric Limited (2) and Energy Sales and Trading Limited (3)

Exhibit 10.14

DATED 2007

The Nuclear Decommissioning Authority (1)

and

Magnox Electric Limited (2)

and

Energy Sales and Trading Limited (3)

AMENDED, RESTATED AND
CONSOLIDATED SITE MANAGEMENT
AND OPERATIONS CONTRACT

IN RESPECT OF

MAGNOX ELECTRIC LIMITED FOR

NORTHERN SITES

THIS DEED OF AMENDMENT, RESTATEMENT AND CONSOLIDATION is dated 2007

BETWEEN

(1) THE NUCLEAR DECOMMISSIONING AUTHORITY, a non-departmental public body whose registered office is at Herdus House, Westlakes Science and Xxxxxxxxxx Xxxx, Xxxx Xxx, Xxxxxxx, XX0 0XX (the “Authority”);

(2) MAGNOX ELECTRIC LIMITED, a company incorporated in England and Wales with registered number 2264251 whose registered office is at 1100 Daresbury Park, Daresbury, Xxxxxxxxxx, Xxxxxxxx, XX0 0XX (the “Contractor”); and

(3) ENERGY SALES AND TRADING LIMITED, a company incorporated in England and Wales with registered number 3857761 whose registered office is at 1100 Daresbury Park, Daresbury, Xxxxxxxxxx, Xxxxxxxx, XX0 0XX (“ESTL”),

each one a “Party” and together the “Parties”.

WHEREAS

(A) The Authority and the Contractor entered into contracts on 1 April 2005 relative to the maintenance and operation of sites at Chapelcross, Hunterston and Trawsfynydd (which sites are hereinafter referred to as the “Non Generating Sites” and which contracts are hereinafter referred to as “Non Generating Existing Contracts”);

(B) The Authority, the Contractor and ESTL entered into a contract on 1 April 2005 relative to the maintenance and operation of various sites including the sites at Maentwrog, Oldbury and Wylfa (which sites at Maentwrog, Oldbury and Wylfa are hereinafter referred to as the “Generating Sites” and which contract is hereinafter referred to as the “Generating Existing Contract”);

(C) The Parties amended the Generating Existing Contract by a letter of agreement effective from 1 April 2007 (the “ESTL Transfer Date”) to (1) provide for the appointment by the Authority of British Energy Trading Services as its agent and contractor to trade electricity, natural gas and other energy commodities and to provide investment and trading advice under the Trading Contract; (2) release ESTL from its obligations under the Generating Existing Contract; (3) release the Authority and Magnox from some of their respective obligations under the Generating Existing Contract; and (4) provide for transitional arrangements in connection with the foregoing with effect from the ESTL Transfer Date.

(D) The Authority and the Contractor have entered into this agreement (“Agreement”) in order to consolidate and amend the Non Generating Existing Contracts in so far as they govern the rights and obligations of the Authority and the Contractor on and after the Effective Date;

(E) The Authority, the Contractor and ESTL have entered into this Agreement in order to consolidate and amend the Generating Existing Contract insofar as it relates to the Generating Sites and insofar as it governs the rights and obligations of the Authority, the Contractor and ESTL on and after the Effective Date and to make provision for certain financial matters connected with the obligations of the Parties under the Generating Existing Contract insofar as it relates to the Oldbury Site and the Wylfa Site; and

(F) Recognising that (1) on the Sale Date the Purchaser will acquire the entire issued share capital of the Parent Body Organisation pursuant to the Sale and Purchase Agreement and (2) that in consideration of this certain provisions of the Generating Existing Contract insofar as it relates

to the Generating Sites and the Non Generating Existing Contracts (together “Existing Contracts”) which relate to financial matters require to be amended, the Parties have agreed to provide in the Existing Contracts as amended by this Agreement for transitional finance and pensions arrangements to take effect on and from the Sale Date.

IT IS AGREED as follows:

1. DEFINITIONS AND INTERPRETATION

1.1 Definitions

“Effective Date” means the date which is the Effective Date for the purposes of the Deed of Amendment, Restatement and Consolidation of the Parent Body Agreement;

“Parent Body Agreement” has the meaning given to it in Appendix 1;

“Parent Body Organisation” has the meaning given to it in Appendix 1;

“Purchaser” has the meaning given to it in Appendix 1;

“Sale and Purchase Agreement” has the meaning given to it in Appendix 1;

“Sale Date” has the meaning given to it in Appendix 1;

“Trading Contract” has the meaning given to it in Appendix 1.

1.2 Interpretation

1.2.1 headings and sub-headings are for ease of reference only and shall not be taken into consideration in the interpretation or construction of this Deed;

1.2.2 all references to Clauses and Schedules are references to clauses of and schedules to this Deed;

1.2.3 Appendix 1 is an integral part of this Deed and reference to this Deed includes reference to Appendix 1;

1.2.4 words importing the singular include the plural and vice versa;

1.2.5 words importing a particular gender include all genders;

1.2.6 references to “Party” and “Parties” means a party or the parties to this Deed, as applicable.

2. AMENDMENT, RESTATEMENT AND CONSOLIDATION OF THE M&O CONTRACT

2.1 With effect on and from the Effective Date, the Non Generating Existing Contracts and the Generating Existing Contract insofar as it relates to the Generating Sites shall be amended, restated and consolidated into the form set out in Appendix 1 and references in the Non Generating Existing Contracts and the Generating Existing Contract insofar as it relates to the Generating Sites to “this Contract”, “hereof” and “hereunder” and expressions of similar import shall be deemed to be references to the Existing Contracts as amended, restated and consolidated by this Deed.

2.2 For the avoidance of doubt:

(a) the Existing Contracts shall not be discharged by this Agreement but shall remain in force as amended, restated and consolidated in Appendix 1; and

(b) this Agreement shall not have retrospective effect and the rights and liabilities of the Parties accruing and obligations of the Parties arising prior to the Effective Date shall continue to be governed by the Existing Contracts and shall not be affected by any amendment, restatement or consolidation pursuant to this Agreement.

3 GOVERNING LAW

This Deed shall be governed by and construed in accordance with English law.

4 COUNTERPARTS

This Deed may be executed in any number of counterparts, each of which when executed by one or more of the Parties shall constitute an original, but all of which shall constitute the same instrument.

IN WITNESS WHEREOF this Deed has been executed by the parties hereto.

the COMMON SEAL of

THE NUCLEAR DECOMMISSIONING AUTHORITY was

hereunto affixed in the

presence of:



	Director



	Secretary/Director

EXECUTED AS A DEED by

MAGNOX ELECTRIC LIMITED



	Director



	Director

EXECUTED AS A DEED by

ENERGY SALES AND TRADING LIMITED



	Director



	Director

APPENDIX 1

AMENDED, RESTATED AND CONSOLIDATED

SITE MANAGEMENT & OPERATIONS CONTRACT

TERMS AND CONDITIONS

DATED 2007

The Nuclear Decommissioning Authority (1)

and

Magnox Electric Limited (2)

and

Energy Sales and Trading Limited (3)

AMENDED, RESTATED AND
CONSOLIDATED SITE MANAGEMENT
AND OPERATIONS CONTRACT

NDA-T1-37-05

TABLE OF CONTENTS

PART 1	GENERAL

PART 2	CONTRACTOR’S OBLIGATIONS

PART 3	RIGHTS AND OBLIGATIONS OF AUTHORITY

PART 4	PERFORMANCE MANAGEMENT, PERFORMANCE ASSURANCE AND RECORDS

PART 5	EMPLOYEES

PART 6	FINANCE (Pre-Sale)

PART 6A	FINANCE (Post-Sale)

PART 7	REAL ESTATE AND ASSET MANAGEMENT

PART 8	INTELLECTUAL PROPERTY

PART 9	INFORMATION TECHNOLOGY

PART 10	CONFIDENTIALITY, SECURITY AND COMPLIANCE WITH LAW

PART 11	INDEMNITY, LIABILITY AND INSURANCE

PART 12	TERMINATION

PART 13	DISPUTE MANAGEMENT

PART 14	RELETTING THE CONTRACT

LIST OF SCHEDULES

Schedule 1	Lifetime Plan Schedule
	Part 1:	Statement of Work

Schedule 2	Programme Management Schedule
	Part 1:	Programme Controls
	Part 2:	Setting the LTP and Change Control
	Part 3:	Project Validation and Financial Sanction

Schedule 3	Commercial Schedule
	Part 1:	Customer Contracts
	Part 2:	Permitted Activities

Schedule 4	Employee Schedule
	Part 1:	Nominated Staff
	Part 2:	Key Personnel
	Part 3:	Pro Forma Secondment Agreement
	Part 4:	Deed of Participation
	Part 5:	Pro Forma Impartiality Undertaking

Schedule 5	Subcontracting/Procurement Schedule
	Part 1:	Subcontracting/Procurement Requirements
	Part 2:	Inter-SLC Service Contract Pro Forma

Schedule 6	Finance Schedule
	Part 1	Funding Limit and Available Incentive Fee
	Part 2	Use of Performance Based Incentives
	Part 3	Calculation of Efficiency Gain Fee
	Part 4	Costs Principles and Procedure
	Part 5:	Not used.
	Part 6:	Cashflow Forecasting and Calculating Dates for Payment
	Part 7:	Provisions Applying to Defective Performance of Alternative Remuneration Tasks

Schedule 7	Property Schedule
	Part 1:	Nuclear Licensed Site Area Plans
	Part 2:	Site Boundary Plans

Schedule 8	Intellectual Property Schedule
	Part 1:	Parent Supplied Intellectual Property

Schedule 9	Information Technology Schedule
	Part 1:	Critical IT Systems
	Part 2:	Deposit of Source Code

Schedule 10	Insurance Schedule
	Part 1:	Authority and Contractor Insurances

Schedule 11	Not used

Schedule 12	Dispute Management Schedule
	Part 1:	Dispute Management Procedure

Schedule 13	Reporting Schedule
	Part 1:	Monthly Reporting Requirements

Schedule 14	European State Aid
	Part 1:	European State Aid Decision

Schedule 15	Not used

Schedule 16	Not used

Schedule 17	Knowledge Management Policy
	Part 1:	Authority Knowledge Management Policy

Schedule 18	Contractor’s Obligations in relation to the Sites
	Part 1:	Contractor’s Obligations in relation to the Sites

Schedule 19	Authorised Persons under the Contract
	Part 1:	Addresses for Notices and Correspondence

Schedule 20	Electricity Interface Obligations Schedule
	Part 1:	Allocation of Responsibilities under Industry Documents
	Part 2:	BETS Interfaces

Schedule 21	Post Commencement Date Issues to be Resolved
	Part 1:	Post Commencement Date Issues to be Resolved

THIS AGREEMENT is made on 1 April 2005 and amended by deed of amendment, restatement and consolidation on 2007

BETWEEN

(3) ENERGY SALES AND TRADING LIMITED, a company incorporated in England and Wales with registered number 3857761 whose registered office is at 1100 Xxxxxxxxx Xxxx, Xxxxxxxxx, Xxxxxxxxxx, Xxxxxxxx XX0 0XX (“ESTL”),

each one a “Party” and together the “Parties”.

WHEREAS

(A) The Authority, the Contractor and the Parent Body Organisation have entered into the Parent Body Agreement on the date hereof;

(B) The Parent Body Organisation holds all of the issued share capital in the Contractor;

(i) the HSE has granted the appropriate Nuclear Site Licence instrument pursuant to Licence Condition 36 of the Contractor’s Nuclear Site Licence to enable the necessary organisational changes to implement this Contract;

(ii) the relevant licences, authorisations, registrations, permits and consents have been obtained from the EA or SEPA (as applicable); and

(iii) the Contractor has undertaken to comply with the site security plan contained in its Internal Procedures relating to Site security and approved by OCNS;

(D) The Contractor with the consent of the Parent Body Organisation has entered into this Contract on the date hereof.

PART 1: GENERAL

1.1 Definitions

In this Contract (including the Recitals, Schedules, Appendix and Tables of Contents) the following terms shall, unless the context otherwise requires, have the meanings ascribed below:

“1990 Act” means the Town and Country Planning Xxx 0000 and any other legislation relating to town and country planning in force from time to time;

“Accelerated Works” has the meaning given in Paragraph 3.8.1 of Part 2 of the Finance Schedule (Use of Performance Based Incentives);

“Accounting Policies and Procedures” means the Contractor’s Internal Procedure for accounting policies and procedures as created and maintained in accordance with Clause 2.8;

“Actual Cost of Work Performed” or “ACWP” means the cumulative actual and accrued cost of work on a task or project scheduled and contained in the NTWP for the current Contract Year as amended in accordance with the change control procedure contained in Part 2 (Setting the LTP and Change Control) of the Programme Management Schedule which is actually performed;

“Additional Incentive Fee” has the meaning given in Paragraph 3.8.1 of Part 2 of the Finance Schedule (Use of Performance Based Incentives);

“Additional PBI” has the meaning given in Paragraph 3.3 (Additional PBIs) of Part 2 of the Finance Schedule (Use of Performance Based Incentives);

“Adjudicator” has the meaning given to it in Paragraph 4 (Adjudication) of Part 1 of the Dispute Management Schedule (Dispute Management Procedure);

“Advance Agreement” means the agreement between the Authority and the Contractor in respect of the allowability of a particular cost entered into in accordance with Paragraph 4 (Advance Agreements) of Part 4 of the Finance Schedule (Costs Principles and Procedures);

“Advisory Activities” means investment advice in relation to the development and implementation of the Trading Strategy in accordance with the relevant LTP;

“Affected Party” has the meaning given in Clause 1.9.1 (Performance of Obligations);

“Affiliate” means:

(i) the Parent Body Organisation;

(ii) any company which has shareholdings or any other form of economic interest, either directly or indirectly, of more than 30 (thirty) % in the Parent Body Organisation;

(iii) wholly owned subsidiaries of the Contractor or the Parent Body Organisation;

(iv) a company in which the Contractor and/or the Parent Body Organisation, either jointly or separately, has shareholdings or any other form of economic interest totalling more than 30 (thirty) % of the shares in issue;

(v) a company with which the Contractor and/or the Parent Body Organisation, either jointly or separately, has a Partnering Arrangement in force;

(vi) a company in which the Contractor and/or the Parent Body Organisation, either jointly or separately, has less than a 30 (thirty) % economic interest, but where the economic interest is of such a nature as to create the perception of a conflict of interest; or

(vii) a company owned or controlled, directly or indirectly, to the extent of 30 (thirty) % or more of the outstanding equities, securities or assets by any of the companies described in (i), (ii) or (iii) above;

“Agency Activities” means the appointment of ESTL as the Contractor’s authorised agent to enter into and/or amend Customer Contracts in relation to the Trading Activities in accordance with the relevant LTP;

“Allowable Cost” has the meaning given in Paragraph 3 (Allowable Costs) of Part 4 of the Finance Schedule (Costs Principles and Procedures) and “Allowable” shall be construed accordingly;

“Amendment” has the meaning given in Clause 3.6.1 (New Business and Amendments to Customer Contracts);

“Ancillary Properties” means:

· in relation to Chapelcross Site, such storage and other facilities as nominated by the Authority from time to time and which at the date of this Contract comprises being part of Seafield Farm, Xxxxx, Dumfreisshire (used as a car parking and set down area);

· in relation to Hunterston A Site, such storage and other facilities as nominated by the Authority from time to time of which there are none at the date of this Contract;

· in relation to Oldbury Site, such storage and other facilities as nominated by the Authority from time to time of which there are none at the date of this Contract;

· in relation to Trawsfynydd Site, such storage and other facilities as nominated by the Authority from time to time and which at the date of this Contract comprises premises at Camell Lairds Shipyard, Cambeltown Road, Birkenhead (used as a workshop); and

· in relation to Wylfa Site, such storage and other facilities as nominated by the Authority from time to time and which comprises at the date of this Contract an emergency control centre, North Wales Police Headquarters (used by the Wylfa nuclear site as an emergency control centre);

“Analogous Standards” means the level of duty to exercise skill and care to which a skilled, diligent and prudent contractor would reasonably and ordinarily be subject in any jurisdiction where there is experience of nuclear operations and/or decommissioning activities which have at least equivalent standards to those of the United Kingdom provided that for the purposes of assessing compliance with:

· Regulatory Requirements, the only regulatory standards against which the Contractor will be judged under this Contract will be those relating to the United Kingdom; and

· Analogous Standards, any regulatory or other constraints to which the Contractor is subject and which would not reasonably be expected to constrain a contractor in the relevant jurisdiction or jurisdictions shall be taken into account.

“Annual Plan” means the Authority’s approved annual plan for relevant Contract Year published on the Authority’s website from time to time;

“Annual Reconciliation Report” means the report to be prepared by the Contractor at the end of each Contract Year and submitted to the Authority in accordance with Clauses 6.13 and 6A.13 (Funding Limits);

“Annual Procurement Plan” has the meaning given in Paragraph 3.1 (Procurement Plan) of Part 1 of the Subcontracting/Procurement Schedule (Subcontracting/ Procurement Requirements);

“Annual Site Funding Limit” or “ASFL” means the overall funding limit for a Site as specified in Part 1 of the Finance Schedule (Funding Limits and Available Incentive Fee) and adjusted (if at all) pursuant to Part 2 of the Programme Management Schedule (Setting the LTP and Change Control);

“Annual Update” has the meaning given in Paragraph 5.4 (Incorporation of Baseline Changes beyond the current Contract Year) of Part 2 of the Programme Management Schedule (Setting the NTWP and Change Control);

“Appeal” means all or any of the following as the case may be namely:

(i) an appeal to the First Secretary of State in accordance with section 78 of the 1990 Act against a Refusal; or

(ii) a Calling-In;

“Applicable Schemes” means the UKAEA Combined Pension Scheme including the Additional Voluntary Contribution Scheme and the Shift Pay Pension Savings Plan, the BNFL Group Pension Scheme, the Magnox Group of the Electricity Supply Pension Scheme, the CNPP and any other pension scheme set up and/or maintained by the Authority pursuant to Section 8 and Schedule 8 of the Energy Xxx 0000;

“Application” means an application including (without limitation) all requisite plans, drawings, supporting documents, reports, statements and any other information referred to in the application for a Planning Consent that is submitted to the Local Authority by the Contractor;

“Approval” means that the approval required in relation to the relevant Change Proposal, as set out in the Appendix to Part 2 of the Programme Management Schedule (Setting the LTP and Change Control) has been given by the appropriately authorised individual;

“Approved” means in relation to any Change Proposal that it has received Approval;

“Approved Working Capital Facilities” means all loan facilities entered into by the Contractor which:

(i) have been negotiated pursuant to a funding competition approved by the Authority and are on terms that represent the best value for money of the proposals made by the proposed lenders pursuant to such competition or which have otherwise been approved by the Authority; or

(ii) have been provided by an Affiliate and are on terms that represent the best value for money and which have been approved by the Authority; or

(iii) have been negotiated with lenders with whom the Parent Body Organisation had arrangements prior to its entering into the Parent Body Agreement, and in relation to which the Authority has given its prior written consent

and “Approved Working Capital Facility” shall be construed accordingly;

“Asset Purchase” means a Subcontract for the purchase of supplies, goods, materials, equipment and/or utilities (including gas, electricity, water, sewerage, heat, cable and telecommunications) and “Asset Purchases” shall be construed accordingly. For the avoidance of doubt any Subcontract that relates to or includes the creation, design, development or building by the Subcontractor of any supplies, goods, materials, equipments and/or utilities shall not be an Asset Purchase;

“Asset Register” means the asset register to be compiled and maintained by the Contractor in accordance with Clause 7.5 (Maintenance of Sites and Authority Assets) to record all the Authority Assets on the Sites;

“Associated Allocable Cost” means overhead costs (also known as burden) associable with activities, such costs to be allocated to activities on a cause-and-effect or resource consumption basis;

[GUIDANCE NOTE: For example, preparation of a proposal for a competed NDA contract involves engineers whose salaries and wages total ₤50,000. Associated Allocable Cost may include the fringe benefits, facilities and computers used by the engineers totalling ₤40,000. It would also include the labour and travel of SLC finance and treasury personnel and senior management when preparing financial reports, analysing alternatives and making/attending presentations.]

“Audit Close-Out Meeting” means a meeting following receipt by the Contractor of the Authority’s audit findings to discuss those findings generally together with any areas identified in the findings as requiring Corrective Action;

“Authority Agents” means the Authority’s duly authorised representatives including advisers, consultants and agents acting on behalf of the Authority;

“Authority Assets” means all the assets (whether fixed or movable) on or off the Sites which are currently owned by the Authority (whether leased to the Contractor or otherwise) including any New Assets acquired by the Contractor on behalf of the Authority in performing the NTWP pursuant to Clause 7.7 (Right to Acquire New Assets) but excluding any Subcontracts and Customer Contracts;

“Authority Default” means any of the events of default by the Authority set out in Clause 12.6 (Authority Default);

“Authority Direction” means a direction given by the Authority to the Contractor in accordance with its powers under section 18 of the Energy Act;

“Authority Field of Use” means carrying out the Authority’s functions, duties and powers as prescribed by the Energy Act from time to time;

“Authority IP” means IP owned by or licensed to the Authority which relates to the activities to be undertaken by the Contractor or the Authority under the terms of this Contract and includes:

(i) Parent IP licensed to the Authority and the Contractor under the provisions of Clause 8.3 (IP Contributed by Parent Body Organisation);

(ii) IP created on or on behalf of the Contractor or Subcontractors which vests in the Authority pursuant to Clause 8.4 (Authority’s Rights to IP developed by or on behalf of the Contractor and Subcontractors);

(iii) Third Party IP licensed to the Authority under the provisions of Clause 8.7 (Third Party IP);

“Authority IT Systems” means all communications and information technology systems which are used by the Authority from time to time including all hardware, networks, Software and data comprised therein;

“Authority Land” means the land at the Chapelcross Site, the Hunterston A Site, the Oldbury Site, the Trawsfynydd Site and the Wylfa Site shown coloured yellow and coloured blue on the plans marked “Chapelcross”, “Hunterston A”, “Oldbury”, “Trawsfynydd” and “Wylfa” attached at Part 2 of the Property Schedule and the Ancillary Properties;

“Authority Policies and Procedures” means the Authority’s procedures listed in Part 1 of the Programme Management Schedule (Programme Controls) together with any other policies and procedures published on the Authority’s website;

“Authority’s Property Manager” means the property manager nominated by the Authority;

“Authority’s Termination Notice” has the meaning given to it in Clause 12.4 (Termination or Remedy for Contractor Default);

“Available Incentive Fee” means the relevant amount of Incentive Fee for the relevant Contract Year listed in Part 1 of the Finance Schedule (Funding Limits and Available Incentive Fee);

“Background IP” has the meaning given to it in Clause 8.4.11 (Licence of Background IP from Subcontractor to Authority);

“Balancing and Settlement Code” means the document setting out electricity balancing and settlement arrangements established by the System Operator pursuant to its transmission licence;

“Balancing System Use of System Charges” means the charges falling within the definition of that term in the Connection and Use of System Code which Fall Due to be paid by the Contractor under the Connection and Use of System Code;

“Bank Account Details Letter” means the letter agreed between the Contractor, ESTL and/or the Authority setting out details of the various bank accounts referred to in this Contract, to be amended from time to time as such details change;

“Baseline Change” means a change to any aspect of the scope, schedule or cost of any Tasks contained in the NTWP and LCBL or the addition of any Task to the NTWP and/or the LCBL;

“Baseline Change Proposal” means a proposal to make a Baseline Change;

“Baseline Cost” means the cost which the NTWP ascribes to a Task;

“BNF Company” means British Nuclear Fuels plc (Co. no. 5027024) and every company or other entity which is or will be on or after 1 April 2005 a subsidiary of British Nuclear Fuels plc (Co. no. 5027024) within the meaning set out in section 736 of the Companies Xxx 0000 and, for the purposes of Clauses 6.5 and 6A.5 (Historical Costs) only, means the Authority and Direct Rail Services (Co. no. 3020822);

“BNF Historical Costs” means Historical Costs which are properly attributable to a BNF Company other than the Contractor, excluding Contractor Historical Costs;:

(i) including Liability for Taxation;

(ii) including those Historical Costs transferred into the Contractor by the Transfer Schemes; and

(iii) excluding those Historical Costs transferred from the Contractor by the Transfer Schemes; and

(iv) excluding BNF Historical Costs;

“BNF Historical Trading Cost” means Historical Trading Costs which are properly attributable to a Group Company other than Magnox Limited or ESTL (as applicable) or any of its Subsidiaries excluding Contractor Historic Trading Costs;

“British Energy Pension Costs” means the obligation of Magnox Electric Limited (Co. no. 2264251) to its section of the Magnox Group of the Electricity Supply Pension Scheme in respect of liabilities under Regulation 19 of the Electricity (Protected Persons) (England and Wales) Pension Regulations 1991;

“Budgeted Cost of Work Performed” or “BCWP” means the budgeted cost of that proportion of work scheduled and contained in the NTWP for the current Contract Year as amended in accordance with the change control procedure contained in Part 2 (Setting the LTP and Change Control) of the Programme Management Schedule which is actually performed;

“Budgeted Cost of Work Scheduled” or “BCWS” means the budgeted cost of work scheduled and contained in the NTWP for the current Contract Year as amended in accordance with the change control procedure contained in Part 2 (Setting the LTP and Change Control) of the Programme Management Schedule;

“Budgeted Efficiency Gain Fee” means the budgeted element of the Efficiency Gain Fee as specified in Part 1 of the Finance Schedule (Funding Limits and Available Incentive Fee);

“Calendar Day” means a period of twenty-four hours ending at twelve midnight;

“Calling-In” means the calling in by the First Secretary of State under Section 77 of the 1990 Act of the Application and “Called-In” shall be construed accordingly;

“Capital Adequacy Account” means the account listed as the Capital Adequacy Account in relation to ESTL in the Bank Account Details Letter;

“Capital Adequacy Costs” means amounts paid into the Capital Adequacy Account to fund ESTL’s Capital Adequacy Requirements;

“Capital Adequacy Requirements” means the amount of capital that ESTL must hold in accordance with the FSA Handbook;

“Capital Budget” means that proportion of the SLC Annual Funding Limit which the Contractor is permitted to spend on Capital Costs, as set out in Part 1 of the Finance Schedule (Funding Limits and Available Incentive Fee) and adjusted (if at

all) pursuant to Part 2 of the Programme Management Schedule (Setting the LTP and Change Control);

“Capital Costs” means any item of expenditure greater than the relevant capitalisation threshold for that category of item as notified by the Authority prior to the start of any Contract Year, for any individual item or connected group of items such as an information technology system, the consequence of this expenditure being the recognition of an Authority-funded asset from which economic benefit will be derived, either immediately or when the asset is brought into use, by the Authority for a period greater than one year as determined in accordance with UK GAAP and by the application of Authority’s accounting policies as notified to the Contractor by the Authority prior to the start of any Contract Year (and for the purposes of this definition capital expenditure includes those costs that are directly attributable to bringing the asset into working condition for its intended use) and “Capital Cost” shall be construed accordingly;

[GUIDANCE NOTE: Such expenditure may include costs incurred in construction of an asset that is not ready for use at the accounting reference date which should be categorised as assets under construction. FCP 1 will set out the Authority’s Accounting Manual for use by Contractors when providing financial reports to the Authority including capitalisation thresholds and the basis for attributing indirect costs. Until this is completed, the existing policies of BNFp on asset capitalisation should be used.]

“Cash Credit Support Agreements” means the following Customer Contracts:

(i) the Master Services and Participation Agreement between APX Amsterdam Power Exchange (UK) Limited and Magnox Electric Limited dated 2nd June 2004;

(ii) LCH EnClear OTC Third Party Clearing Agreement Calyon Financial SNC and Magnox Electric Limited dated 6th August 2004;

(iii) Accession Agreement to the Network Code between Transco Plc and Magnox Electric Limited dated 5th February 2003;

(iv) Accession Agreement to the Balancing and Settlement Code between Elexon Limited and Magnox Electric Limited dated August 2000;

(v) Counter-indemnity provided to RWE Trading GMBH (reference number TFPLDG305596); and

(vi) Counter-indemnity provided to Accord Energy Limited (reference number TFPLDG302454)

together with any other analogous Customer Contracts approved by the Authority under Clause 3.6 (Authority Rights in respect of Customer Contracts) under which the Contractor or ESTL (as applicable) provides credit support by means of placing cash on deposit with the relevant Customers (including for the avoidance of doubt with a relevant bank backing credit support provided by the bank);

[GUIDANCE NOTE: this is intended to cover receipts from customers for purchase of ships or construction of assets e.g. to support return of waste]

“Category II Change” means a Category II Change as set out further in Part 2 of the Programme Management Schedule (Setting the LTP and Change Control);

“Category III Change” means a Category III Change as set out further in Part 2 of the Programme Management Schedule (Setting the LTP and Change Control);

“Category I Revenue” means all monies received and receivable by the Contractor including:

(i) from the Ministry of Defence;

(ii) in respect of interest (save for interest earned on the Contractors Fee Account which shall be for the account of the Contractor in accordance with Clauses 6.11.7 and 6A.12.5 (Contractor’s Fee Account)), dividends from any Subsidiaries and other finance receipts;

(iii) in respect of proceeds from insurance claims;

(iv) from the sale of Authority Assets save for scrap;

(v) in respect of rent and all other sums due to the Authority (as landlord) pursuant to the terms of any Tenancy Document collected by the Contractor on behalf of the Authority;

(vi) from UKAEA relating to refunds in respect of early retirement pensions paid to the Employees or Nominated Staff under the terms of the UKAEA Combined Pension Scheme;

(vii) in respect of hedging activities carried out pursuant to the Currency Hedging Strategy;

excluding any monies that fall within the definition of Category II Revenue;

“Category II Revenue” means all monies received and receivable by the Contractor:

(i) from another SLC or UKAEA (as the case may be) (regardless of whether such monies are received or receivable under a legally binding contract, an Internal Procedure, an Inter-SLC Service Contract or otherwise);

(ii) from Nexia Solutions Limited in respect of the supply of services;

(iii) from the Parent Body Organisation or any Affiliate (regardless of whether such monies are received or receivable under a legally binding contract, an Internal Procedure, a Joint Internal Procedure or otherwise);

(iv) in consideration for minor income generating activities not listed at items (ii) to (v) inclusive of the definition of Category I Revenue (including any local authority grants, apprentice training, secondment fees, restaurant receipts and bus receipts);

(v) from the sale of those Authority Assets which constitute scrap,

excluding in each case any monies that fall within limbs (i) to (vii) of the definition of Category I Revenue;

“CDM Effective Date” means the date upon which the CDM Regulations 2007 came into force, being 6 April 2007;

“CDM Regulations” means the Construction (Design and Management) Regulations 1994 and any modification or replacement of the same, including CDM 2007 when it has come into force;

“CDM 2007” means the Construction (Design and Management) Regulations 2007 and any modification or replacement of the same;

“Change” means a Baseline Change and/or a Funding Change as applicable;

“Change in Control” means, in respect of any shareholder being a company, the obtaining of Control by any person or group of persons acting in concert who did not previously exercise Control, of:

(i) such shareholder; or

(ii) any person who (whether directly or by means of holding Control over one or more other persons) has Control of such ordinary shareholder;

“Change Log” means the document to record Changes maintained by the Contractor under Part 2 of the Programme Management Schedule (Setting the LTP and Change Control);

“Change Proposal” means a Baseline Change Proposal or a Funding Change Proposal;

“Chapelcross Site” means the area of land at Chapelcross licensed to the Contractor as shown yellow and blue on the plan marked “Chapelcross” relating to Chapelcross at Part 2 of the Property Schedule (Site Boundary Plans);

“Climate Change Levy Exemption Certificates” means the certificates issued from time to time by Ofgem in respect of electricity pursuant to clause 51B of Part IV of the Climate Change Levy (General) Regulations 2001 (Statutory Instrument 2001 No 838);

“Climate Change Levy Exemption Certificates Costs” means those sums which Fall Due to be paid by the Contractor under contracts relating to the sale or purchase of Climate Change Levy Exemption Certificates entered into in accordance with the Permitted Activities, the Trading Limits and the Trading Strategy;

“Collateral Costs” means:

(i) those sums which Fall Due to be paid by the Contractor under the terms of the Counter-Indemnities or, where the relevant liabilities to Natwest have been settled by BNF Company under the terms of any relevant counter-indemnity to Natwest (either directly by the Contractor or reimbursed by the Contractor to BNF Company), the equivalent sums reimbursed by the Contractor to BNF Company (with no double counting) plus any commission paid to Natwest (either directly by the Contractor or reimbursed by the Contractor to BNF Company) for the provision of the bank guarantee(s) and stand-by letters of credit to which the Counter-Indemnities relate; and/or

(ii) amounts placed on deposit with the counterparties to the Cash Credit Support Agreements to the extent approved by the Authority or permitted by the Permitted Activities and the Trading Limits;

“Combined Pension Scheme” means an unfunded Government-backed pension scheme with eligibility restricted to members of the public sector ;

“Commencement Date” means 1 April 2005;

“Commercial Operations Tasks” means those Tasks in the NTWP which generate Category I Revenue and/or Category II Revenue;

“Comptroller and Auditor General” means the Comptroller and Auditor General of the UK National Audit Office;

“Commercial Schedule” means the schedule affixed at Schedule 3;

“Connection and Use of System Code” means the document of that name prepared by NGC pursuant to Condition 7 of its transmission licence;

“Consent” means all approvals, consents, licences, authorisations, permissions, certificates and statutory agreements required from any competent authority and all consents and agreements from and with Third Parties such consents to include authorisation from the FSA and any licences required in respect of the supply and/or generation of gas and electricity;

“Constabulary” means the Civil Nuclear Police Authority;

“Contracts Manager” means the individual(s) appointed by the Authority to be contracts manager in relation to this Contract as notified to the Contractor from time to time;

“Contract Year” means a period of 12 Months starting on 1 April and ending on 31 March first occurring thereafter, except for the last Contract Year of this Contract which shall commence on 1 April and end at the date of any termination in accordance with Clause 1.3 (Commencement and Duration);

“Contractor Default” means any of the events of default set out in Clause 12.2 (Contractor Default);

“Contractor Historical Costs” means Historical Costs which are properly attributable to the Contractor:

(i) including Liability for Taxation;

(ii) including those Historical Costs transferred into the Contractor by the Transfer Schemes; and

(iii) excluding those Historical Costs transferred from the Contractor by the Transfer Schemes; and

(iv) excluding BNF Historical Costs;

“Contractor Knowledge Management Policy” has the meaning given to it in clause 1.27.1;

“Contractor’s Historical Trading Costs” means Historical Trading Costs which are properly attributable to the Contractor:

(i) including those Historical Trading Costs transferred into the Contractor by the Transfer Schemes; and

(ii) excluding those Historical Trading Costs transferred from the Contractor by the Transfer Schemes; and

(iii) excluding BNF Historical Trading Costs;

“Contractor’s Fee Account” means the account listed as the Contractor’s Fee Account in the Bank Account Details Letter;

“Contractor’s Payments Account” means a bank account of the Contractor into which drawings made under the Approved Working Capital Facility are paid and which is separate from the Contractor’s Receipts Account, and the account listed as the Contractor’s Payments Account in the Bank Account Details Letter;

“Contractor’s Prioritisation Procedure” means the Contractor’s procedure for prioritising Tasks, created pursuant to Clause 2.8 (Contractor’s Internal Procedures);

“Contractor’s Receipts Account” means the account listed as the Contractor’s Receipts Account in the Bank Account Details Letter;

“Contractor Required Insurances” means the insurances listed in Part 1 of the Insurance Schedule (Authority and Contractor Insurances);

“Contractor’s Termination Notice” has the meaning given in Clause 12.7 (Termination or Remedy for Authority Default);

“Contractor VAT” VAT payments payable by the Contractor to the Taxation Authorities as a result of it complying with its obligations under this Contract;

“Control” means:

(a) the power (whether directly or indirectly and whether by the ownership of share capital, the possession of voting power, contract or otherwise) to appoint and/or remove all or such of the members of the board of directors or other governing body of a person as are able to cast a majority of the votes capable of being cast by the members of that board or body on all, or substantially all, matters, or otherwise to control or have the power to control the policies and affairs of that person (and for the purposes of determining whether the power to appoint or remove directors exists the provisions of section 736A of the Companies Xxx 0000 shall apply); and/or

(b) the holding and/or possession of the beneficial interest in and/or the ability to exercise the voting rights applicable to shares or other securities in any person (whether directly or by means of holding such interests in one or more other persons) which confer in aggregate on the holders thereof 30 per cent. or

more of the total voting rights exercisable at general meetings of that person on all, or substantially all, matters;

“COP 10” means the Code of Practice 10 Submission comprising the letter of 1 March 2005 sent to HMRC by Xxxxxxx Xxxxx and subsequent correspondence;

“Corrective Action” means action identified as required to be taken by the Contractor in the Authority’s audit findings;

“Cost” means a sum of money which the Contractor is legally obliged to pay to a Third Party and/or, where a Cost is Allowable, a sum of money paid by the Contractor to a Third Party in respect of which the Contractor has obtained an Advance Agreement;

“Cost Reimbursement” means where the pricing of a contract is on a reimbursement of certain costs plus fee basis as defined in the relevant contract;

“Counter-Indemnities” means the counter-indemnities between the Contractor and Natwest relating to guarantees and letters of credit with the following:

(i) RWE Trading GmbH (reference number: TFPLDG305596);

(ii) APX Amsterdam Power Exchange (UK) Limited (reference number TFPLDG305067);

(iii) Barclays Bank plc (reference number TFPLDG305336);

(iv) Calyon Financial SNC (reference number TFPLDG308725); and

(v) Accord Energy Limited (reference number TFPLDG302454.

“CNPP” means the Combined Nuclear Pension Plan set up by the Authority pursuant to Section 8 and Schedule 8 of the Energy Act.

“Critical Site IT Systems” means the Site IT Systems described in Part 1 of the Information Technology Schedule (Critical IT Systems);

“Currency Hedging Strategy” means the strategy for hedging currency which the Authority permits the Contractor to use as amended from time to time;

“Current Costs” means all Costs incurred by the Contractor other than Capital Costs;

“Current Budget” means that proportion of the SLC Annual Funding Limit which the Contractor is permitted to spend on non-capital costs, as set out in Part 1 of the Finance Schedule (Funding Limits and Available Incentive Fee) as adjusted (if at all) pursuant to Part 2 of the Programme Management Schedule (Setting the LTP and Change Control);

“Customer” means any counterparty or former or prospective counterparty to a Customer Contract;

“Customer Contracts” means those contracts of a value equal to be more than £10,000 (ten thousand pounds sterling) transferred to the Authority pursuant to the Energy Act or entered into by the Contractor for the provision of the Commercial Operations Tasks to Third Parties;

“Customer Contract Schedule” means the schedules annexed at Part 1 of the Commercial Schedule;

“Customer Group” means any group or trade organisation of counterparties or former or prospective counterparties to Customer Contracts;

“Customer Ringfenced Accounts” means those accounts (if any) in existence prior to 1 April 2005 and so defined by agreement between the Authority and the Contractor together with any other customer ringfenced accounts established after 1 April 2005;

“Data” means facilities, information, books of account, Records or other documentation (including any stored in electronic form);

“Deed of Agreement” means the deed of agreement entered into by the Authority, the Contractor, the Parent Body Organisation and Magnox South Limited of even date;

“Deed of Agreement for Future Transfer Scheme” means the deed under which the Contractor consents to the Secretary of State for Trade and Industry to the making of a nuclear transfer scheme under section 40 of the Energy Act in connection with the establishment of Magnox South as the new SLC;

“Deed of Indemnity” means the agreement of that name entered into on the Commencement Date between (1) the Authority and (2) the Contractor;

“Deed of Participation” means the Deed of Participation for the Combined Nuclear Pension Plan attached as Part 4 of the Employee Schedule;

“DEFRA” means the Department of the Environment, Food and Rural Affairs;

“Delegation of Authority” means the written authorisation issued from time to time by the Authority and copied to the Contractor in respect of certain of the Authority’s staff members or the written authorisation issued from time to time by the Contractor and copied to the Authority in respect of certain of the Contractor’s staff members in accordance with Clause 1.5.2 (Delegation of Authority);

“Demand” means any written demand for payment served in accordance with Clause 1.13 (Notices and Communications) by the Authority on the Parent Body Organisation pursuant to Clauses 6.11.8 and 6A.12.6 (Payments to Parent), Clauses 6.14.4 and 6A.14.4 (Reports) and Clause 5.10 (Termination Costs);

“Designated Sites” means sites designated under Section 3 of the Energy Xxx 0000;

“Detailed Activity Brief” has the meaning given in Paragraph 1.3 (Detailed Activity Brief) of Part 3 of the Programme Management Schedule (Project Validation and Financial Sanction);

“Detailed Project Plans” means all the documentation produced by the Contractor underlying the NTWP and setting out how Tasks will be undertaken and to what standard;

“Developed IP” has the meaning given in Clause 8.4 (Authority’s Rights to IP developed by or on behalf of the Contractor and Subcontractors);

“Disallowable Cost” means a cost incurred by the Contractor which is determined to be Disallowable in accordance with the criteria in Part 4 of the Finance Schedule (Costs Principles and Procedure) and/or otherwise specified to be a Disallowable Cost in the this Contract and “Disallowable” shall construed accordingly;

“Dispute Management Schedule” means the schedule affixed at Schedule 12;

“Dispute Management Procedure” or “Dispute Resolution Procedure” means the dispute resolution rules specified at Part 1 of the Dispute Management Schedule;

“Distribution Code” means the document that a holder of a Distribution Licence is required to prepare in accordance with condition 9 (Distribution Code) of such Distribution Licence;

“Distribution Licence” means a licence granted pursuant to section 6(i)(c) of the Electricity Xxx 0000 relating to the distribution of electricity;

“DPA” means the Data Protection Xxx 0000;

“EA” means the Environment Agency;

“e-Government Metadata Standard (e-XXX)” means the e-XXX Standard Version 3.0 of 29 April 2004 as updated from time to time;

“Effective Date” means the date which is the Effective Date for the purposes of the Deed of Amendment, Restatement and Consolidation of the Parent Body Agreement;

“Efficiency Gain Fee” means BCWP minus ACWP and is calculated in accordance with Part 3 of the Finance Schedule (Calculation of Efficiency Gain Fee);

“Electricity Balancing System Costs” means those costs (whether individually positive or negative) that in aggregate Fall Due to be paid by the Contractor under the Balancing and Settlement Code but excluding any costs relating to the administration or expenses of Elexon;

“Electricity Interface Obligations Schedule” means the schedule affixed at Schedule 20;

“Electricity Sales Costs” means those sums which Fall Due to be paid by the Contractor under contracts relating to the sale and/or purchase of electricity entered into in accordance with the Permitted Activities, the Trading Limits and the Trading Strategy;

“Electricity Supply Pension Scheme” means the registered pension scheme providing pensions benefits for most employees and members of the electricity supply industry in England and Wales under the Finance Xxx 0000 established by a resolution of The Electricity Council passed on 20th January 1983 and subsequently amended from time to time;”Elexon” means Elexon Limited, a company registered in England and Wales with company number 3782949;

“Emergency Action” means an action taken by the Contractor pursuant to the Contractor’s genuine belief that the risk to life, limb or the environment requires immediate action and includes assistance to the Authority or to another SLC in respect of an emergency on another nuclear site or in response to an urgent request from a Third Party to assist in a radiological incident not on a nuclear site. For the

avoidance of doubt, Emergency Action includes urgent requests for assistance from the National Radiological Protection Board and urgent assistance required in accordance with the RADSAFE Emergency Plan;

“Emergency Action Notification” has the meaning given in at Part 2 of the Programme Management Schedule (Setting the LTP and Change Control);

“Emissions Trading Allowances” means the allowances allocated and issued by DEFRA pursuant to Greenhouse Gas Emissions Trading Scheme Regulations 2003;

“Emissions Trading Allowances Costs” means those sums which Fall Due to be paid by the Contractor under contracts relating to the sale or purchase of Emissions Trading Allowances, entered into in accordance with the Permitted Activities, the Trading Limits and the Trading Strategy and required to be paid to the Secretary of State as a result of a failure by the Contractor to surrender sufficient Emissions Trading Allowances in accordance with Regulation 33 of the Greenhouse Gas Emissions Trading Scheme Regulations 2003;

“Employees” means all persons, whether part-time, full-time or self-employed, engaged by the Contractor wholly in the performance of the Tasks and the Contractor’s other obligations under this Contract from time to time but excluding Nominated Staff where applicable and “Employee” shall be construed accordingly;

“Employee Schedule” means the schedule affixed as Schedule 4;

“Energy Act” means the Energy Xxx 0000;

“Escrow Agent” means NCC Escrow International Limited, registration office Manchester Technology Centre, Xxxxxx Xxxx, Xxxxxxxxxx X0 0XX, or such reasonable alternative as the Authority shall designate in writing from time to time;

“Escrow Terms” means the form of source code escrow agreement set out in the standard single licensee escrow agreement of the Escrow Agent, or such other escrow terms as the Authority, acting reasonably, shall specify from time to time;

“ESTL Side Letter” means the letter dated 30 March 2007 from the Authority to the Contractor and ESTL and signed by all Parties on 30 March 2007 relating to ESTL’s rights and obligations under this Contract;

“ESTL Transfer Date” means 1st April 2007;

“EU Procurement Rules” means Council Directives 89/665/EEC, 92/13/EEC, 92/50/EEC, 93/37/EEC, 93/36/EEC, 93/38/EEC, 98/4/EC, European Parliament and Council Directives 97/52/EC, 98/4/EC, 2004/17/EC and 2004/18/EC and any other EU measures adopted from time to time in relation to procurement, together with the United Kingdom implementing measures and all applicable EC Treaty principles;

“Exceptional Cost” means Exceptional Historical Costs, Exceptional Pension Costs and any other Costs which may be agreed or determined to be Exceptional Costs pursuant to the procedures of Part 6 of the Finance Schedule (Cashflow Forecasting and Calculating Dates for Payment);

“Exceptional Historical Cost” means a Contractor’s Historical Cost which is agreed or determined by the Authority to be an Exceptional Cost pursuant to the procedures

of Part 6 of the Finance Schedule (Cashflow Forecasting and Calculating Dates for Payment);

“Exceptional Pension Costs” means any Pension Costs to the extent that they exceed the contributions which are required to be paid as at the date of this Contract under the schedule of contributions (prepared under section 58 of the Pensions Xxx 0000 or section 227 of the Pensions Xxx 0000, as appropriate) of the pension scheme in force at the date of this Contract or, where Pension Costs relate to a pension scheme which has not been established or does not have such a schedule of contributions in place as at the date of this Contract, to the extent that they exceed the contributions which are required to be paid as at the date of this Contract under the schedule of contributions (prepared under section 58 of the Pensions Xxx 0000 or section 227 of the Pensions Xxx 0000, as appropriate) of the Combined Pension Scheme;

“Existing Agreements” means all legally binding agreements entered into by the Contractor prior to 1 April 2005 excluding the Secondment Agreement;

“Failure to Protect the Supply Chain” means that in the reasonable opinion of the Authority the Contractor, acting other than on the written instructions of the Authority, has behaved in a manner calculated to result in any of: (i) suppliers withdrawing from opportunities to supply goods or services to the Contractor; (ii) agreement of the terms of contracts for the supply of goods or services to the Contractor becoming unreasonably delayed; or (iii) flowdown terms set out in Part 1 of the Subcontracting/Procurement Schedule (Subcontracting/Procurement Requirements) being wilfully misinterpreted or bids from supplies to supply goods or services to the Contractor becoming uncompetitive with the result in any of the foregoing circumstances being that such goods or services are supplied by Affiliates;

“Fall Due” means in accordance with the legal terms governing the relevant obligation to make payment;

“Fellside CHP Power Station” means the gas-fired combined heat and power plant located at the Sellafield Site;

“Final Incentive Fee” means the incentive fee due to the Contractor as finally determined in accordance with Ppart 2 of the Finance Schedule (Use of Performance Based Incentives);

“Final Termination Invoice” means the invoice referred to in Clause 6A.12.3.2;

“Finance Schedule” means the schedule affixed at Schedule 6;

“First Secretary of State” means the First Secretary of State or such other minister or authority for the time being having the right to exercise the powers now conferred on the First Secretary of State under the 1990 Act;

“Force Majeure Event” means any act, event or occurrence affecting any Party’s performance of its obligations under this Contract, the cause of which is not of such Party’s making nor within that Party’s reasonable control (having acted in accordance with Good Industry Practice), and which is not attributable to any act or failure to take preventative action consistent with the standards expected on a nuclear site by the Party concerned, including (to the extent not of that Party’s making nor within that Party’s reasonable control) but not limited to:

(i) war, hostilities (whether or not war has been declared), terrorist acts, or acts of any civil or military authority;

(ii) riot, insurrection, civil commotion, public demonstration, sabotage, or acts of vandalism;

(iii) fire, flood, earthquake, extreme weather conditions, epidemic, or explosion;

(iv) impact from Third Party aircraft or things falling from Third Party aircraft;

(v) any strike, lock-out or trade dispute not involving the employees or subcontractors of that Party and not originating with that Party’s employees or subcontractors or the employees or subcontractors of any Affiliate of that Party;

(vi) Acts of God;

(vii) delay in transport or communications;

(viii) accidental damage to equipment; and

(ix) structural shift or subsidence;

but expressly excluding:

(a) any unlawful act of a Third Party who has gained entry to a Site due to a failure of the Contractor to comply with the security plan or other failure to comply with its obligations under Part 2 (Contractor’s Obligations);

(b) any unauthorised release of ionising radiation from, or contamination by radioactivity from an occurrence involving nuclear matter on, a Site or from materials in the course of transportation to or from a Site save to the extent that such unauthorised release or contamination is caused by any of the events listed in (i) to (ix) of this definition;

(c) any radioactive, chemical or biological contamination on a Site or emanating from a Site or matter in the course of transportation to or from a Site save to the extent that such contamination is caused by any of the events listed in (i) to (ix) of this definition; and

(d) failure to obtain or maintain a Nuclear Site Licence, any EA or Scottish Environment Protection Agency (as applicable) licence, authorisation, permit or consent or any other material requisite licence or permit;

“Foreign Exchange Accounts” means the list of foreign exchange accounts in the Bank Account Details Letter together with any bank accounts held in currencies other than sterling used for the purposes of the hedging contracts or otherwise;

“Framework Agreement” has the meaning given in Part 1 of the Subcontracting/Procurement Schedule (Subcontracting/Procurement Requirements);

“FSA” means the Financial Services Authority;

“FSA Handbook” means the FSA’s Handbook of rules and guidance which apply to authorised (and other) firms, including the glossary to the FSA Handbook, as amended from time to time;

“Funding Carryover Change Proposal” means a proposal made in accordance with Paragraph 7.5 of Part 2 of the Programme Management Schedule (Setting the LTP and Change Control);

“Funding Change” means a change to the PSWBS Category Levels, the Current Budget, the Site Current Budget, the Capital Budget, the Site Capital Budget, the ASFL and/or the SLC Annual Funding Limit;

“Funding Change Proposal” means a proposal to make a Funding Change;

“Funding Limits” means the Current Budget, the Capital Budget and the SLC Annual Funding Limit;

“Future Transfer Scheme” means a nuclear transfer scheme made after the Commencement Date under Section 40(2) of the Energy Act and “Future Transfer Scheme” shall be construed accordingly;

“Gas Balancing System Costs” means those costs (whether individually positive or negative) that in aggregate Fall Due to be paid by the Contractor under the Network Code but excluding any costs relating to the administration or expenses of Transco;

“Gas Purchase Costs” means those sums which Fall Due to be paid by the Contractor under contracts relating to the sale or purchase of Natural Gas entered into in accordance with the Permitted Activities, the Trading Limits and the Trading Strategy;

“Gas Shipping Charges” means those sums which Fall Due to be paid by the Contractor under the Network Code in connection with the transportation of Natural Gas by Transco on behalf of the Contractor and which are invoiced pursuant to the Network Code and which are calculated in accordance with the charging methodology published by Transco under its gas transportation licence;

“Generation Activities” means the operation of the power stations at the Sites in accordance with the relevant NTWP(s);

“Generating Sites” means the Oldbury Site and the Wylfa Site;

“Good Industry Practice” means the exercise of the degree of skill and care, diligence, prudence and foresight which would reasonably and ordinarily be expected from a skilled and experienced contractor engaged (in the United Kingdom or in any jurisdiction with Analogous Standards) in activities of a similar scope and complexity to those that are the subject of this Contract and under the same or similar circumstances, where such contractor is seeking to comply with its contractual obligations and all applicable Law and Regulatory Requirements.

“Government Payment Obligations” means the guidance contained in sections 16.3.1 to 16.3.4, Box 16.2 and Annexes 16.1 and 16.2 of Government Accounting 2000;

“Grid Code” means the document of that name prepared by NGC pursuant to Condition 7 of its transmission licence;

“Guidance Document” has the meaning given in Part 2 of the Project Management Schedule (Setting the LTP and Change Control);

“Historical Costs” means costs arising in relation to the period prior to (and excluding) the Commencement Date excluding Historical Trading Costs and any Pension Deficit Contribution Costs which relate to benefits accrued in respect of pensionable service before the Commencement Date;

“Historical Trading Costs” means Trading Costs arising in relation to the period prior to (and excluding) the Commencement Date excluding Historic Costs;

“HR Internal Procedure” means the Contractor’s Internal Procedure referred to in Clause 2.8;

“HMRC” means Her Majesty’s Revenue and Customs;

“HSE” means the Health and Safety Executive;

“Hunterston A Site” means the area of land at Hunterston A licensed to the Contractor as shown yellow and blue on the plan marked “Hunterston A” relating to Hunterston A at Part 2 of the Property Schedule (Site Boundary Plans);

“Impartiality Undertaking” means the undertaking in the form set out in Part 5 of the Employee Schedule (Pro Forma Impartiality Undertaking);

“Incentive Fee” means the amount of fee which the Contractor may earn in each Contract Year dependent on its fulfilment of the PBIs in accordance with Part 2 of the Finance Schedule (Use of Performance Based Incentives);

“Incoming Parent” means the organisation which has successfully bid to replace the Parent Body Organisation in relation to the Contractor;

“Industry Documents” means any and all licences, contractual agreements and codes relating to the generation, transmission and distribution of electricity, the transportation, storage and supply of natural gas which, in each case, may affect any Site, whether or not constituting Regulatory Requirements, and including the Balancing and Settlement Code, the Network Code, the Connection and Use of System Code, the Grid Code and any applicable Distribution Code.

“Information” has the meaning given in Clause 10.3 (Disclosure by the Authority);

“Information Asset Register” means a register holding metadata to the e-GMS standard about the information holdings for the Contractor as defined by and agreed with the Authority;

“Information Technology Schedule” means the schedule affixed at Schedule 9;

“Initial Activity Brief” has the meaning given in Paragraph 1.1 (Contractor’s Initial Activity Brief) of Part B (Project Validation and Financial Sanction of Work Activities) of Part 3 of the Programme Management Schedule (Project Validation and Financial Sanction);

“Initial Period” means the period of 2 years from 1 April 2005 expiring on 31 March 2007;

“Insolvency Event” means the occurrence of any of the following:

(i) the presentation of a petition for the appointment of an administrator;

(ii) the court making an administration order;

(iii) the presentation of a petition for winding up;

(iv) the passing of a resolution for winding up (other than for the purposes of a solvent reconstruction or amalgamation);

(v) the court making an order for winding up (other than for the purposes of a solvent reconstruction or amalgamation);

(vi) the appointment of a receiver or manager or administrative receiver,

unless, in the case of the events set out in paragraphs (iii) and (vi) above, the proceedings to which they relate are frivolous or vexatious and/or are dismissed, stayed or discharged within 21 Calendar Days of their commencement;

“Insurance Schedule” means the schedule affixed at Schedule 10;

“Instructions Notice” has the meaning given in Clause 3.6.3.3 (Authority’s right to instruct);

“Intellectual Property Schedule” means the schedule affixed at Schedule 8;

“Interest Rate” means 3 per cent above the base rate of Lloyds TSB Bank plc;

“Inter-SLC Service Contracts” means the inter-SLC service contracts entered into in accordance with Clause 2.9;

“Internal Procedures” means all internal Contractor company documentation of the Contractor (regardless of the manner in which it is held, stored or collated) which:

(i) in the reasonable opinion of the Authority, constitutes a mandatory internal guideline, standard, procedure or policy;

(ii) in the reasonable opinion of the Authority, relates directly or indirectly to the Contractor’s structure, operation and management; and

(iii) relates materially and directly to the duties imposed on the Contractor in accordance with Clause 2.1 (Nature of Contractor’s Obligations) and/or the manner in which the Contractor chooses to fulfil its contractual, legal and regulatory obligations therein,

and includes HR Internal Procedures and “Internal Procedure” shall be construed accordingly;

“IP” means intellectual property including all inventions (whether patentable or not), design rights, database rights, copyright, semiconductor topography rights, unregistered trade and service marks, logos, get-up and trade names and, in each case, the goodwill attaching to them, all patents, utility models, registered designs, registered copyrights, registered trade and service marks, domain names and any applications for registration and rights to grant of any of the foregoing, confidential information, know-how, and any rights or forms of protection of a similar nature and

having equivalent or similar effect to any of them which subsist anywhere in the world;

“IT Contract” means any contract under which any services are provided or Software is licensed to the Contractor for the purposes of any Site IT Systems;

“IT System” means any communications and/or information technology system including (i) all hardware, including servers, desktop and laptop PCs and other terminal equipment, printers, scanners and other peripherals, (ii) networks and network equipment, (iii) Software and (iv) data comprised or used therein;

“Joint Internal Procedure” means the joint internal procedures of the Contractor and other SLC’s governing the operational inter-relationships between the Contractor and the relevant SLC’s, a non-exhaustive list of which is contained in Part 1 of Schedule 1 (Statement of Work);

“Key Personnel” means the individuals, whether Nominated Staff or Employees, identified by the Authority and named as key personnel in accordance with Clause 5.2 (Key Personnel) and listed in Part 2 of the Employee Schedule (Key Personnel) as amended from time to time. These individuals may be Nominated Staff or Employees and without prejudice to Clause 4 (Governance) of the Parent Body Agreement and provided that the Authority has given its prior written consent to any failure to adhere to such provisions, any Key Personnel may sit on the Contractor’s board of directors;

“Knowledge Management Policy” means the policy set out at Schedule 17 which has been adopted by the Authority to facilitate (1) the identification and analysis of available and required knowledge, and the subsequent planning and control of actions to develop knowledge assets so as to fulfil the Authority’s and the Contractor’s organisational objectives and (2) a systematic and organised approach to use knowledge within the Contractor’s organisation to transform its ability to store and use knowledge to improve performance.

“Law” means any Act of Parliament or subordinate legislation within the meaning of section 21(1) of the Interpretation Xxx 0000, any exercise of the Royal Prerogative, any enforceable community right within the meaning of section 2 of the Xxxxxxxx Xxxxxxxxxxx Xxx 0000, any other applicable law, common law proclamation, bye-law, directive, decision, regulation, rule, notice or court ruling in each case in the United Kingdom and all applicable laws, regulations, directives, orders, decisions or other rules having the force of law in the jurisdiction (including in relation to international waters) where the Contractor’s obligations under this Contract are carried out;

“LC35” means standard condition 35 of the Nuclear Site Licence;

“Legal Proceedings” means any litigation, arbitration, adjudication, appeal or investigation before an ombudsman;

“Liability for Taxation” means a liability of the Contractor to make a payment of or in respect of any Taxation or of an amount representing, equal to, equivalent to, or deemed to be, Taxation;

“Licence Condition 36” means standard condition 36 of the Nuclear Site Licence;

“Licensed Nuclear Site Area” means the part (or parts) of the Authority Land that are from time to time subject to a Nuclear Site Licence (which at the date of this Contract comprises the land shown coloured yellow on the plans marked “Chapelcross”, “Hunterston A”, “Oldbury”, “Trawsfynydd” and “Wylfa” attached at Part 1 of the Property Schedule (Nuclear Licensed Site Area Plan) including all water supplies, pipelines, conduits and drainage systems and other rights and easements appurtenant thereto;

“Lifecycle Baseline” or “LCBL” is a component of the LTP;

“Lifetime Plan” or “LTP” means the over-arching document which, for each Site, describes the totality of activities required to take the Site from its current state and mission to the assumed or agreed site end-state. The LTP includes the Lifecycle Baseline and the Near Term Work Plan together, as updated by the Contractor on an annual basis in line with Part 2 of the Programme Management Schedule (Setting the LTP and Change Control);

“Lifetime Plan Schedule” means the schedule affixed at Schedule 1;

“Local Authority” means the authority having power to determine the Application;

“London Stock Exchange” means the London Stock Exchange plc;

“Long Term Force Majeure” has the meaning given in Clause 1.9.4 (Long Term Force Majeure);

“Magnox Group” means a group within the Electricity Supply Pension Scheme which was sectionalised on 31 March 2007 into financially independent sections, each with their own participating employer(s);

“Make-or-Buy Plan” means the Contractor’s plan setting out the extent to which it proposes to subcontract Tasks it currently performs;

“Minimum Performance Obligations” means:

(i) using reasonable endeavours to complete all of the Tasks contained in the current Contract Year of the LTP ; and

(ii) compliance with all of the Contractor’s other obligations under this Contract,

which are not individually incentivised by a PBI;

“Month” means a calendar month which is a period of time consisting of thirty (30) days if the period commences in April, June, September and November, and thirty one (31) days if it commences in any other month excepting February when it consists of twenty-eight (28) days, or twenty-nine (29) days in a leap year and “Monthly” shall be construed accordingly;

“Monthly Progress Report” means the report to be provided by the Contractor in accordance with Clause 4.1.2.1 (Required Reports);

“Monthly Reconciliation Report” has the meaning given in Clauses 6.13.2 and 6A.13.2 (Funding Limits);

“Multi-Year PBI” has the meaning given in Paragraph 3.2.1.4 of Part 2 of the Finance Schedule (Use of Performance Based Incentives);

“National Insurance Contributions” means contributions and sums payable to HMRC under the PAYE system in respect of emoluments and benefits paid or payable by the Contractor, taking into account all deductions and retentions which should be made in accordance with the applicable law;

“National Priorities” means the current version of the document of that title published on the Authority’s website from time to time setting out the Authority’s national priorities;

“Natural Gas” means any hydrocarbons or mixture of hydrocarbons and other gases consisting primarily of methane which at a temperature of 15°C and an absolute pressure of 1.01325 bar or is predominantly in a gaseous state;

“Natwest” means the National Westminster Bank Plc registered in England and Wales with company number 929027 and its successors or assigns;

“NDA Agreements” means any and all obligations and agreements relating to or affecting the Site upon which the Subcontract or Series of Subcontracts is or are to be carried out (including the design and execution thereof) or any part thereof which have been or shall be entered into by the Authority and disclosed to the Contractor (whether before, on or after the Commencement Date), together with the terms upon which any approvals are granted pursuant to such NDA Agreements;

“NGC” means the National Grid Company plc registered in England and Wales with company number 2366977;

“Near Term Work Plan” or “NTWP” means the documentation of the scope of Tasks, the plan schedule for completing the work and the costs associated with completing the Tasks, for a rolling three-year period. It is a subset of the LTP, and is underpinned by the Detailed Project Plans. The NTWP ties to funding and scope guidance information provided by the Authority. The NTWP is used by the Contractor to manage the work effort when the scope, schedule, and costs have been agreed to with the Authority, and serves as the performance base for determining Contractor performance against the Contract;

“Negotiation Brief” has the meaning given in Part 1 of the Commercial Schedule (Customer Contracts);

“Network Code” means the document of that name prepared by Transco pursuant to its gas transportation licence and relating to its principal pipeline system;

“New Assets” means any assets, whether new or second-hand, acquired by the Contractor pursuant to Clause 7.7 (Right to Acquire New Assets) on or after the Commencement Date, excluding any Subcontracts and Customer Contracts;

“New Customer Contract” has the meaning given in Clause 3.6.1 (New Business and Amendments to Customer Contracts);

“New Task” has the meaning given in Part 3 of the Programme Management Schedule (Project Validation and Financial Sanction);

“NGC” means the National Grid Company plc, a company registered in England and Wales with company number 2366977 and its successors and assigns;

“NISR” means the Nuclear Industries Security Regulation 2003, as amended, modified or re-enacted from time to time;

“Nominated Staff” means the individuals who are seconded to the Contractor from the Parent Body Organisation and who are listed in Part 1 of the Employee Schedule without prejudice to the provisions of clause 4 of the Parent Body Agreement, and provided that the Authority has given written consent to any failure to comply with those provisions, any such individual may sit on the Contractor’s board of directors;

“Nominated Staff Side Letter” means the letter from the Parent Body Organisation to the Authority and the Contractor and signed by the Parent Body Organisation, the Authority and the Contractor on even date relating to Nominated Staff;

“Non-Project (Non-Recurring)” means a Task or a New Task of a temporary nature which comprises an activity(ies) undertaken to create a unique one-off product or service which meets a defined set of objectives;

“Non-Project (Recurring)” means a Task or a New Task of a recurring nature which is capable of being performed according to known and pre-established policies, processes, procedures or precedents;

“Notice” has the meaning given in Clause 1.13 (Notices and Communications);

“Notice of Arbitration” means a notice of arbitration given in accordance with Paragraph 2 (Outline of the Dispute Resolution Process) of Part 1 of the Dispute Management Schedule (Dispute Management Procedure);

“Nuclear Decommissioning Authority” or “NDA” has the same meaning as the Authority;

“Nuclear Site Licence” means the nuclear site licence granted to the Contractor pursuant to section l of the Nuclear Installations Xxx 0000 (as amended);

“Objection Notice” has the meaning given in Paragraph 5.1.3 of Part 1 of the Commercial Schedule (Customer Contracts);

“OCNS” means the Office for Civil Nuclear Security or any body having responsibility for civil nuclear security in the United Kingdom which substantially replaces the same from time to time;

“Off-Site Tenancy Document” means any lease, licence or other document (other than this Contract) that subsists from time to time that permits the lawful occupation by any person of the whole or any part of the Off-Site Property or the Ancillary Properties;

“Off-Site Property” means the land from time to time owned by the Authority adjoining or near to the Licensed Nuclear Site Area which at the date of this Contract comprises the land shown coloured blue on the plan attached at Part 2 of the Property Schedule (Site Boundary Plans);

“Ofgem” means the Gas and Electricity Markets Authority and/or the Office of Gas and Electricity Markets including their successor office or body, as appropriate;

“Oldbury Site” means the area of land at Oldbury licensed to the Contractor as shown yellow and blue on the plan marked “Oldbury” relating to Oldbury at Part 2 of the Property Schedule (Site Boundary Plans);

“One Year Extension” has the meaning given to it in Clause 1.3.2.1;

“Open Book System” means a system which complies fully with the Contractor’s obligations in relation to Inspection and Audit by the Authority under Clause 4.5 (Inspection and Audit);

“OPG Payments Account” means the account listed as the OPG Payments Account in the Bank Account Details Letter;

“OPG Receipts Account” means the account listed as the OPG Receipts Account in the Bank Account Details Letter;

“Outgoing Parent” means the Parent Body Organisation;

“Outline Proposal” has the meaning given in Paragraph 1.3 of Part 1 of the Commercial Schedule (Customer Contracts);

“Out Years” means the fourth and successive Contract Years after the then current Contract Year;

“Overarching Costs Management Agreement” means the agreement of that name entered into by (1) the Authority (2) the Contractor (3) certain BNF Companies on the Commencement Date and (4) Direct Rail Services (company number 3020822);

“Parent Body Organisation” means Reactor Sites Management Company Limited (company number 6005193) whose registered office is at 1100 Daresbury Park, Daresbury, Xxxxxxxxxx, Xxxxxxxx XX0 0XX;

“Parent Body Agreement” means the agreement of that name entered into on 1 April 2005 between the Authority, the Contractor and the Parent Body Organisation, as amended from time to time;

“Parent IP” has the meaning given in Clause 8.3 (IP Contributed by Parent Body Organisation);

“Partnering Arrangement” means any agreement through which any party would, in the reasonable opinion of the Authority, acquire significant influence over the Contractor’s or over the Parent Body Organisation’s performance of its respective obligations under this Contract and/or the Parent Body Agreement excluding the agreements which in the reasonable opinion of the Authority are entered into in the ordinary course of business;

“PBI Change” means a change to any aspect of any PBI;

“PBI Change Proposal” means a proposal to make a change to any aspect of any PBI;

“Pension Costs” means any contributions for which the Contractor (or any subsidiary of the Contractor) is liable including, for the avoidance of doubt pensions deficit contributions referred to in Clauses 5.12 and 5.12A (Pensions) and Exceptional Pension Costs;

“Pension Deficit Contribution Costs” means any pension deficit contribution costs for which the Contractor is liable in relation to the Applicable Schemes in accordance with Clauses 5.12 and 5.12A (Pensions) or otherwise;

“Performance Based Incentives” or “PBIs” means the performance objectives and milestones determined in accordance with Part 2 of the Finance Schedule (Use of Performance Based Incentives), including Multi-Year PBIs and “PBI” shall be construed accordingly;

“Permitted Activities” means the Contractor’s rights in respect of the Customer Contracts as set out in Part 2 of the Commercial Schedule (Permitted Activities) as may be amended from time to time on the instruction or with the agreement of the Authority in accordance with Clause 3.6.4 (Permitted Activities);

“Persistent Breach” has the meaning given in Clause 12.3 (Termination for Persistent Breach);

“Planning Consent” means outline or detailed planning permission that may from time to time be required by the Contractor for the purposes of fulfilling its obligations under the Contract;

“Planning Permission” means planning permission granted pursuant to an Application;

“Principal Employer” has the meaning given by the Applicable Scheme;

“Programme Controls Manager” means the individual appointed by the Authority to be programme controls manager as notified to the Contractor from time to time;

“Programme Management Schedule” means the schedule affixed at Schedule 2;

“Prohibited Acts” means:

(i) offering, giving or agreeing to give to any employee of the Authority any gift or consideration of any kind as an inducement or reward:

(a) for doing or not doing (or for having done or not having done) any act in relation to the obtaining or performance of this Contract or any other contract with the Authority; or

(b) for showing or not showing favour or disfavour to any person in relation to this Contract or any other contract with the Authority;

(ii) entering into this Contract 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;

(iii) committing any offence:

(a) under the Prevention of Corruption Acts 1889 - 1916;

(b) under any applicable Law creating offences in respect of fraudulent acts; or

(iv) defrauding or attempting to defraud or conspiring to defraud the Authority;

“Project” means a Task or a New Task which is a unique set of co-ordinated activities intended to meet certain of the Contractor’s business objectives, which has precise starting and finishing points and is undertaken by one or more persons to meet specific business objectives within defined time, cost and performance parameters set out in the Contractor’s relevant business case. A Project must, as a minimum, comprise:

(i) a finite and defined lifespan;

(ii) defined and measurable business deliverables and/or outcomes which meet the specific business objectives of the Contractor together with the corresponding activities to achieve such deliverables and/or outcomes;

(iii) a defined amount of all resources required; and

(iv) a management structure to manage the Project with defined responsibilities allocated to each individual involved;

“Property Licence” has the meaning given in Clause 7.1.1 (Right to Occupy Sites);

“Property Licence Fee” means one thousand pounds sterling (£1,000.00) per annum together with any applicable VAT thereon;

“Property Schedule” means the schedule affixed at Schedule 7;

“Provisional Payment Schedule” means the schedule in respect of Transitional Balances to be provided by the Contractor pursuant to Clause 6A.12.2.1 and Part 6 of the Finance Schedule (Cashflow Forecasting and Calculating Dates for Payment);

“Provisional Termination Invoice” means the invoice referred to in Clause 6A.12.3.1;

“Provisional Transitional Balance Statement” means the statement in respect of Transitional Balances to be provided by the Contractor pursuant to Clause 6A.12.2.1 and Part 6 of the Finance Schedule (Cashflow Forecasting and Calculating Dates for Payment).

“PSWBS” means the Programme Summary Work Breakdown Structure which is the structure used by the Authority to subdivide the Lifetime Plan (including the NTWP to individual levels where Tasks can be planned, controlled, executed and performance-measured in accordance with the requirements of this Contract;

“PSWBS Category Levels” has the meaning given in PCP-01;

“Purchaser” means the party acquiring the entire issued share capital of the Parent Body Organisation pursuant to the Sale and Purchase Agreement;

“Put Option” has the meaning given in Clause 5.2.1 (Put Option) of the Parent Body Agreement;

“Recent Existing Agreements” has the meaning given in Clause 2.10.2;

“Records” has the meaning given in Clause 4.2.1 (Required Records);

“Records Agreement” means the agreement of that name entered into on the Commencement Date between (1) the Authority and (2) British Nuclear Group Sellafield Limited (Co. no. 1002607) and the Deed of Adherence of the same date signed by the Contractor;

“Redundancy” has the meaning given in section 195 of the Trade Union and Labour Relations (Consolidation) Xxx 0000;

“Refusal” means:

(i) a written notification of refusal of an Application by the Local Authority; or

(ii) non-determination of an Application within the relevant period for the purposes of section 78(2) of the 1990 Act;

as the case may be;

“Regulator Meetings” means all meetings between the Contractor and any Regulator(s) whether or not other persons are invited to attend;

“Regulatory Requirements” means any legally enforceable requirement of any Regulator;

“Regulators” means the Health and Safety Executive (HSE), the Environment Agency (EA), the Scottish Environment Protection Agency (SEPA), the Office for Civil Nuclear Security (OCNS), the Scottish Executive, the Financial Services Authority (FSA) and Ofgem, the Pensions Regulator, the Pension Protection Fund, others specific to the Contractor’s obligations under this Contract and as applicable in the relevant jurisdiction (including in relation to international waters) where the Contractor’s obligations under this Contract are carried out and “Regulator” shall mean each or any one of them;

“Related Change” has the meaning given in Paragraph 1.7 of Part 1 of the Commercial Schedule (Customer Contracts);

“Remediation Programme” has the meaning given in Clause 12.4.4.2 (Termination or Remedy for Contractor Default);

“Renewables Obligation Certificates” means the certificates issued from time to time by Ofgem in respect of electricity pursuant to the Renewables Obligation Order 2002 (Statutory Instrument 2002 No 914) or the Renewables Obligation (Scotland) Order 2002 (Statutory Instrument 2002 No 162);

“Renewables Obligation Certificates Costs” means those sums which Fall Due to be paid by the Contractor under contracts relating to the sale or purchase of Renewable Obligations Certificates entered into in accordance with the Permitted Activities, the Trading Limits and the Trading Strategy or required to be paid to Ofgem as a result of a failure to surrender sufficient Renewables Obligation

Certificates in accordance with Regulation 7 of the Renewables Obligation Order 2002;

“Reports” has the meaning given in Clause 4.1.2 (Required Reports);

“Request for Arbitration” means a request for arbitration given in accordance with Paragraph 7 (Joinder and Consolidation) of Part 1 of the Dispute Management Schedule (Dispute Management Procedure);

“Sale and Purchase Agreement” means the sale and purchase agreement to be entered into between the Purchaser and British Nuclear Fuels plc (company number 5027024);

“Sale Date” means the date when the Purchaser acquires the entire issued share capital in the Parent Body Organisation pursuant to the Sale and Purchase Agreement;

“Schedule of Contributions” has the meaning given to it in Clauses 6.5.4 and 6A.5.4 (Historical Costs);

“Scheme Documents” has the meaning given in the Deed of Participation;

“Scheme Trustee” means the trustee for the time being of the CNPP;

“Secondary Period” has the meaning given in Clause 1.3.2;

“Secondment Agreement” means an agreement entered into by Nominated Staff in the form attached at Part 3 of the Employee Schedule (Pro Forma Secondment Agreement);

“Secretary of State” means the Secretary of State for the Department of Trade and Industry or such other member or authority for the time being having the right to exercise the powers now conferred on the Secretary of State for the Department of Trade and Industry;

“Security Interest” means any mortgage, assignment, charge, lien, hypothecation, pledge, encumbrance, trust arrangement or any other security interest or arrangement for the purpose of providing to any person security or a priority in right of payment except for any lien arising by operation of law;

“Sellafield Site” means the Authority’s site at Sellafield, Seascale, Cumbria;

“SEPA” means the Scottish Environment Protection Agency;

“Series of Subcontracts” means more than one contract for the procurement of the same or substantially similar goods or services between the Contractor and the same supplier or subcontractor;

“Shared Services Project” means the implementation of a strategy developed by the Authority to facilitate the provision of services that are performed for more than one SLC in support of the decommissioning, clean up or commercial operations on the Sites or the Authority’s other Designated Sites that in the Authority’s reasonable opinion will improve efficiency or effectiveness;

“Site” means any of the Chapelcross Site; the Hunterston A Site, the Oldbury Site, the Trawsfynydd Site, the Wylfa Site and the Sixth Site and “Sites” means the Sixth

Site and the areas of land referred to in sub-clauses 7.1.1.1, 7.1.1.2 and 7.1.1.3 (Right to Occupy Site) and comprise all of the Chapelcross Site, the Hunterston A Site, the Oldbury Site, the Trawsfynydd Site and the Wylfa Site;

“Site Capital Budget” means that proportion of the ASFL which the Contractor is permitted to spend on Capital Costs, as set out in Part 1 of the Finance Schedule (Funding Limits and Available Incentive Fee) and adjusted (if at all) pursuant to Part 2 of the Programme Management Schedule (Setting the LTP and Change Control);

“Site Current Budget” means that proportion of the ASFL which the Contractor is permitted to spend on non-capital costs, as set out in Part 1 of the Finance Schedule (Funding Limits and Available Incentive Fee) as adjusted (if at all) pursuant to Part 2 of the Programme Management Schedule (Setting the LTP and Change Control);

“Site IT Systems” means IT Systems on the Sites or used by or on behalf of the Contractor in respect of the Sites;

“Site Management and Operations Contract” means a contract between the Authority and an SLC to manage and operate the Sites, or, in the context of Clause 2.9 (Inter-SLC Service Contracts) and Clause 5.3 (Non-Contract Activities), a site or sites;

“Site Meetings” means all meetings held or to be held by the Contractor on the Site (or, in respect of the Commercial Operations Tasks at any other locations which the Contractor uses in its performance of the Commercial Operations Tasks) with or without Third Parties present (and excluding Regulator Meetings if applicable) which are agreed by the Parties prior to each Contract Year and which are detailed in the register referred to in Clause 1.7.2.1 (Site Meetings);

“Site Trading Ledger” means the ledger in which Trading Costs in respect of each Site are or have been recorded by or on behalf of the Contractor;

“Sixth Site” means the notional site having PSWBS category number 36 in the LTP;

“SLC” means a site licence contractor to whom the HSE has granted a Nuclear Site Licence;

“SLC Annual Funding Limit” means the overall funding limit for the SLC as specified in Part 1 of the Finance Schedule (Funding Limits and Available Incentive Fee) and adjusted (if at all) pursuant to Part 2 of the Programme Management Schedule (Setting the LTP and Change Control);

“Socio-Economic Development Plan” means the document to be provided pursuant to Clause 2.5.2 (Socio-Economic Development);

“Software” means all computer software, together with any related supporting documentation and materials necessary to enable a user to make full use of the functionality of, or to administer effectively, such software;

“Source Code” means, in respect of any Software, the entirety of such Software in an eye-readable form in which such Software can be interpreted by a programmer of reasonable skill and in such form that it can be compiled or interpreted into equivalent object code, together with all technical information and documentation reasonably necessary for the use, reproduction, modification and enhancement of such Software;

“Specification” means the technical data forming the subject matter of each Subcontract or Series of Subcontracts (including benchmarking, performance requirements, procurement of materials (including material component flow) and labour, method statements, deliverability, access requirements, restrictions and limitations, impact and risk assessments, quality management, hours of working, programmes and policies relating to fire safety, safety, training and industrial relations).

“State Aid” means the State Aid Decision attached as Part 1 of Schedule 14 (European State Aid Decision);

“Subcontract” means any agreement entered into by the Contractor in connection with the performance of its obligations under this Contract, including Asset Purchases;

“Subcontracting Instructions Notice” has the meaning given in Paragraph 3.16.3 of Part 1 of the Subcontracting/Procurement Schedule (Subcontracting/Procurement Requirements);

“Subcontracting/Procurement Schedule” means the schedule affixed at Schedule 5;

“Subcontractor” or “Sub-Contractor” means any person who has entered into a Subcontract with the Contractor in connection with the performance of the Contractor’s obligations under this Contract;

“Subsidiary” means Magnox Electric Group Pension Trustee Co Limited (Co. No. 4037100);

“Sub Sub Contract” means any agreement entered into by any Sub-Contractor with any Sub-Sub-Contractor or any Sub-Sub-Contractor with any other Sub-Sub-Sub-Contractor and “Sub Sub Contracts” shall be construed accordingly;

“Sub-Sub-Contractor” means any contractor not being the Contractor or a Sub-Contractor entering into any Sub Sub Contract at any level in the supply chain in connection with the services to be provided by the Contractor under this Contract, and “Sub-Sub-Contractors” shall be construed accordingly;

“System Operator” means NGC or any successor or other party who carries out the operation role of NGC in relation to the high voltage national grid system for the transmission of electricity in the UK;

“Tasks” means the services, operations, projects and activities contained in the NTWP to be undertaken by the Contractor in each Contract Year (as amended in accordance with Part 2 of the Programme Management Schedule (Setting the LTP and Change Control) where applicable);

“Taxation” or “Tax” means all forms of tax, duty, rate, levy, charge or other imposition or withholding whenever and by whatever authority imposed and whether of the United Kingdom or elsewhere, including (without limitation) any tax on gross or net income profit or gains (including income tax required to be deducted or withheld from or accounted for in respect of any payment), corporation tax, advance corporation tax, capital gains tax, capital transfer tax, inheritance tax, wealth taxes, development land tax, petroleum revenue tax, value added tax, customs duties, excise duties, turnover taxes, lottery duty, air passenger duty, insurance premium tax, rates

(including the uniform business rate), stamp duty, capital duty, stamp duty reserve tax, stamp duty land tax, PAYE, national insurance and other similar contributions, duties, rates, levies, charges, imposts or withholdings corresponding to, similar to, in the nature of, replaced by or replacing any of them together with any interest, penalty or fine in connection with any taxation, and regardless of whether any such taxes, duties, rates, levies, charges, imposts, withholdings, interest, penalties or fines are chargeable directly or primarily against or attributable directly or primarily to the Contractor, a subsidiary or any other person and of whether any amount in respect of any of them is recoverable from any other person;

“Taxation Authority” means any local municipal, governmental, state, federal or other fiscal, customs or excise authority, body or official anywhere in the world with responsibility for, and competent to impose, collect or administer, any form of taxation;

“Taxes Act” means Income and Corporation Taxes Xxx 0000;

“Tenancy Document” means any lease, licence or other document (other than this Contract) that subsists from time to time that permits the lawful occupation by any person of the whole or any part of the Licensed Nuclear Site Area;

“Termination for Convenience” has the meaning given in Clause 12.8 (Termination for Convenience);

“Third Party” means any person other than the Parties and the Parent Body Organisation;

“Third Party IP” has the meaning given in Clause 8.7 (Third Party IP);

“Time and Materials” means where the pricing of a contract provides for payments on the basis of the relevant party’s labour expended at fixed hourly rates (such rates as adjusted by the relevant party’s overheads and indirect costs) plus reimbursement of the costs for materials (as adjusted for any xxxx-up by the relevant party of that cost);

“Total Incentive Fee” has the meaning given in Paragraph 3.11.1 of Part 2 of the Finance Schedule (Use of Performance Based Incentives);

“Total Provisional Incentive Fee” has the meaning given in Paragraph 3.10.4 of Part 2 of the Finance Schedule (Use of Performance Based Incentives);

“Trading Activities” means the trading of electricity generated by power stations at the Generating Sites and the Fellside CHP Power Station and ancillary activities including the purchase of electricity and the trading of related commodities including Natural Gas, renewable obligation certificates, emissions trading allowances and climate change levy exemption certificates in accordance with the relevant NTWP(s) prior to the ESTL Transfer Date;

“Trading Contract” means the trading contract entered into by the Authority and British Energy Trading Services Limited (“BETS”) on 8 March 2007 under which the Authority appoints BETS as its agent and contractor to trade electricity, natural gas and other energy commodities and to provide investment and trading advice;

“Trading Costs” means each of the following costs:

(i) Electricity Sales Costs;

(ii) Electricity Balancing System Costs;

(iii) Balancing System Use of System Charges;

(iv) Gas Purchase Costs;

(v) Gas Shipping Charges;

(vi) Gas Balancing System Costs;

(vii) Emissions Trading Allowances Costs;

(viii) Renewables Obligation Certificates Costs;

(ix) Climate Change Levy Exemption Certificates Costs;

(x) Collateral Costs; and

(xi) Capital Adequacy Costs,

in each case incurred by the Contractor or ESTL in the course of performing the Generation Activities and/or the Trading Activities in accordance with relevant NTWP(s) or the Trading Strategy (as applicable);

“Trading Limits” means the statement of permitted trading limits specified by the Authority as amended by the Authority and notified to the Contractor and ESTL from time to time;

“Trading Strategy” means the trading strategy formulated by the Authority and amended by the Authority from time to time and in effect prior to the ESTL Transfer Date;

“Transco” means Transco plc registered in England and Wales with company number 2006000 and it’s successors and assigns;

“Transfer Schemes” means the nuclear transfer schemes within the meaning of section 38 of the Energy Act, excluding the nuclear transfer scheme to which UKAEA is a transferor;

“Transfer Schemes Losses” means the Costs paid or payable by the Contractor to Third Parties in respect of compensation under Paragraph 11 of Schedule 5 of the Energy Act;

“Transitional Balances” means those Allowable Costs or Trading Costs incurred by the Contractor before the Sale Date but in respect of which the Contractor has not drawn down funds from the OPG Payments Account before the Sale Date;

“Transitional Balance Payment Date” means the date agreed or determined for payment of any Transitional Balances as revised from time to time all in accordance with Part 6 of the Finance Schedule (Cashflow Forecasting and Calculating Dates for Payment);

“Trawsfynydd Site” means the area of land at Trawsfynydd licensed to the Contractor as shown yellow and blue on the plan marked “Trawsfynydd “ relating to Trawsfynydd at Part 2 of the Property Schedule (Site Boundary Plans);”

“Tribunal” means the arbitrator(s) appointed in accordance with Paragraph 6 of the Dispute Management;

“UKAEA” means the United Kingdom Atomic Energy Authority;

“UK GAAP” means generally accepted accounting practice in the United Kingdom;

“UK Listing Authority” means the Financial Services Authority in its capacity as competent authority for the purposes of Part VI of the Financial Services and Markets Xxx 0000;

“Unachieved Incentive Fee” has the meaning given in Paragraph 3.7 of Part 2 of the Finance Schedule (Use of Performance Based Incentives)

“VAT” means Value Added Tax imposed under the Value Added Tax Xxx 0000 or any similar tax imposed in addition thereto or in substitution therefore;

“VATA” means Value Added Tax Xxx 0000;

“VAT Agreement” means the agreement dated 1 April 2005 between Customs & Excise and the Authority;

“Work Activities” has the same meaning as Tasks and “Work Activity” shall be construed accordingly;”

“Working Capital Costs” means interest and other bank charges incurred by the Contractor in accordance with an Approved Working Capital Facility;

“Working Capital Side Letter” means the letter of even date from the Authority to the Contractor and the Parent Body Organisation and signed by the Authority;

“Working Day” means Monday to Friday except any day which is generally recognised as a public holiday in the country in which the relevant Site is located;

“Wylfa Site” “means the area of land at Wylfa licensed to the Contractor as shown yellow and blue on the plan marked “Wylfa” relating to Wylfa at Part 2 of the Property Schedule (Site Boundary Plans) and the area of land licensed to the Contractor as shown coloured yellow (and blue) on the plan marked “Maentwrog” relating to Maentwrog at Part 2 of the Property Schedule (Site Boundary Plans) together with (i) two pipes, tunnel and pumphouse situated between Llyn Trawsfynydd and Maentwrog Power Station; (ii) two leats and four dams in the vicinity of Llyn Trawsfynydd; and (iii) the banks of Llyn Trawsfynydd;”

“Year End Sum” has the meaning given in Clauses 6.11.8 and 6A.12.6 (Payments to Parent).

1.2 Interpretation

Save to the extent that the context or the express provisions of this Contract otherwise require:

1.2.1 in the event of any conflict between the Contract Clauses contained in Parts 1 — 14 of these conditions and the Schedules, the Contract Clauses and Part 4 of Finance Schedule (Costs Principles and Procedures) shall take precedence over the remaining Schedules. If there is any further conflict, this Contract shall first be read and construed as a whole and any conflict then remaining shall be dealt with under Part 13 (Dispute Management);

1.2.2 headings and sub-headings are for ease of reference only and shall not be taken into consideration in the interpretation or construction of this Contract;

1.2.3 all references to Clauses, Schedules and to appendices are references to clauses of, the schedules and to this Contract and all references to Parts, Sections, Paragraphs, Annexes or Appendices are references to parts, sections and Paragraphs contained in and annexes and appendices to the Schedules;

1.2.4 the Schedules (including Appendices to such Schedules) are an integral part of this Contract and reference to this Contract includes reference to the Schedules ;

1.2.5 all references to agreements, procedures, documents or other instruments include (subject to all relevant approvals) a reference to that agreement, document or instrument as amended, supplemented, substituted, novated or assigned from time to time;

1.2.6 all references to any statute or statutory provision shall include references to any statute or statutory provision which amends, extends, consolidates or replaces the same or which has been amended, extended, consolidated or replaced by the same and shall include any orders, regulations, instruments or other subordinate legislation made under the relevant statute or statutory provision;

1.2.7 words importing the singular include the plural and vice versa;

1.2.8 words importing a particular gender include all genders;

1.2.9 “person” includes any individual, partnership, firm, trust, body corporate, government department, corporation sole, governmental body, authority, agency or unincorporated body of persons or association;

1.2.10 any reference to a public organisation shall be deemed to include a reference to any successor to such public organisation or any organisation or entity which has taken over the functions or responsibilities of such public organisation;

1.2.11 references to “Party” and “Parties” means a party or the parties to this Contract as applicable;

1.2.12 all monetary amounts are expressed in pounds sterling;

1.2.13 a reference to a balance sheet or profit and loss account includes a reference to any note forming part of or attached to it;

1.2.14 references to the word “includes” or “including” are to be construed without limitation;

1.2.15 references to a document being “in the agreed form” means a copy of such document initialled for the purposes of identification by the Parties;

1.2.16 any reference in this Contract to a Party providing its consent or approval shall be deemed to be a reference to prior written consent or approval;

1.2.17 a reference to a “site” or the “Sites” shall include any part of a site or the Sites; and

1.2.18 all references to a time of day are references to UK time.

1.3 Commencement And Duration

1.3.1 Initial Period

This Contract shall take effect on the 1 April 2005 and shall remain in full force and effect for the Initial Period, and if applicable, the Secondary Period except to the extent it is terminated early in whole or in part in accordance with the provisions of Clause 1.9.4 (Long Term Force Majeure) or Part 12 (Termination).

1.3.2 Secondary Period

1.3.2.1 The Authority shall have an option exercisable in accordance with the provisions of Clause 1.3.2.2 to require that this Contract is extended on the same terms and conditions for a further period of up to three (3) years beyond the Initial Period with such option being divided into three (3) one (1) year consecutive periods (each being a One Year Extension).

1.3.2.2 If the Authority wishes to exercise its option to extend pursuant to Clause 1.3.2.1, it shall serve a written notice on the Contractor not later than six months before the expiry of the extension in place at the time specifying the revised date for the expiry of this Contract. In the event that the Authority serves said notice the whole terms of the Contract shall mutatis mutandis be applicable as though the due date for expiry of the Contract is the date so specified in the written notice served by the Authority on the Contractor.

1.3.2.3 The Authority may, prior to the date of expiry of this Contract as determined in accordance with this clause 1.3 (Commencement and Duration), extend the term of this Contract for a further period if the Authority (acting reasonably) considers it necessary to do so. The duration of any such further period shall be as agreed between the Authority and the Contractor, provided that the Contractor shall not unreasonably withhold its agreement to any necessary extension pursuant to this clause 1.3.2.3.

1.3.3 Survival of Provisions

Upon expiry or termination of the Contract the provisions of Clause 1.1 (Definitions), Clause 1.2 (Interpretation), Clause 1.33 (Survival of Provisions), Clause 1.5.3 (Authority to Act), Clause 1.12 (Severability), Clause 1.13 (Notices and Communications), Clause 1.14 (Waiver), Clause 1.15 (Entire Agreement,) Clause 1.16 (Corrupt Gifts), Clause 1.18 (Assignment), Clause 1.19 (Contracts (Rights of Third Parties) Act 1999), Clause 1.24 (Governing Law and Jurisdiction), Clause 1.25 (Claims Handling), Clause 4.2.1 (Required Records), Clause 4.5.16 (Records Relating to Authority’s Property), Clause 5 (Employees), Clause 6.11.8, Clause 6A.12.6 (Payments to Parent), Clause 6.13, Clause 6A.13 (Funding Limits), Clause 6.14.2, Clause 6A.14.2 (Reports), Clause 6.16, Clause 6A.16 (Reconciliation for Mid-Year Termination), Clause 6A.17.4 (Withholding Taxes), Clause 6.17.6, Clause 6A.17.6 (Tax Returns), Clause 8 (Intellectual Property), Clause 9.7 (Release of Source Code), Clause 10 (Confidentiality, Security and Compliance with Law), Clause 10.10 (Data Protection Act), Clause 10.11 (Publicity), Clause 11 (Insurance), Clause 12.9 (Reasonable Costs on Termination), Clause 12.10 (Accrued Liabilities), Clause 13 (Dispute Management), Part 4 of the Finance Schedule and the Dispute Management Schedule and any other provisions in the Contract (including any Schedule) which are expressed to survive termination or which are required to give effect to such termination or the consequences of such termination shall survive.

1.4 State Aid

The Contractor acknowledges that the Authority is bound by the State Aid Decision and the Contractor agrees to co-operate with the Authority and provide such information and assistance as the Authority may reasonably require in order for the Authority to fulfil its obligations to the European Commission pursuant to the State Aid Decision.

1.5 Representatives and Authority to Act

1.5.1 Co-operation

The Contractor shall co-operate with the Authority and provide such reasonable assistance to the Authority as it requests from time to time in relation to this Contract and/or the Authority’s statutory functions and duties.

1.5.2 Delegation of Authority

1.5.2.1 Each of the Authority and the Contractor shall provide to the other written Delegations of Authority setting out the decisions which individual members of their respective staffs have authority to take.

1.5.2.2 Each of the Authority and the Contractor is entitled to rely on a written Delegation of Authority of the other party as evidence that an individual was empowered to make a decision on behalf of the Authority or the Contractor, as relevant.

1.5.3 Authority to Act

1.5.3.1 Individual members of the Authority’s team shall have such authority to act on behalf of the Authority for the purposes of this Contract as

is specified in the relevant Delegation of Authority in respect of that team member issued by the Authority and copied to the Contractor.

1.5.3.2 Individual members of the Contractor’s team shall have such authority to act on behalf of the Contractor for the purposes of this Contract as is specified in the relevant Delegation of Authority in respect of that team member issued by the Contractor and copied to the Authority.

1.5.3.3 All communications from the Authority to the Contractor and from the Contractor to the Authority which are intended to have a binding effect shall be in writing or given orally and, if given orally, shall be confirmed in writing as soon as reasonably practicable but no later than within three (3) Calendar Days of issue.

1.5.4 Extent of Authority

Unless specifically set out in a written Delegation of Authority, no member of the Authority’s or the Contractor’s team shall have the authority to:

1.5.4.1 agree any variation or amendment to this Contract; or

1.5.4.2 agree to any material waiver by the Authority or the Contractor (as the case may be) of any term of this Contract.

1.6 Liaison with Regulators

1.6.1 Communications with Regulators

Save in relation to correspondence, or parts thereof, relating to Regulator enforcement action (whether potential or actual) against the Contractor or any of its management, or where a Regulatory Requirement prohibits the Contractor from doing so, the Contractor shall promptly copy to the Authority all material correspondence or other communications received from and sent to a Regulator in relation to any Site and the Contractor’s activities under this Contract.

1.6.2 Regulator Meetings

1.6.2.1 The Contractor shall use all reasonable endeavours to give the Authority prompt notice of all Regulator Meetings.

1.6.2.2 Save in relation to the meetings, or parts thereof, relating to Regulator enforcement action against the Contractor or any of its management, or where a Regulatory Requirement prevents the Authority from doing so, the Authority may attend Regulator Meetings. The attendance of the Authority at Regulator Meetings shall at all times be at the discretion of the relevant Regulator(s).

1.6.2.3 Whether or not the Authority attends Regulator Meetings, the Contractor shall keep the Authority appraised of the Contractor’s approach in discussions or negotiations with the Regulator within the constraints of the timetable set by the relevant Regulator. Where the Authority does not attend any Regulator Meeting, the Contractor

shall keep the Authority informed on a timely basis of the outcome of the meeting.

1.6.3 Notification of Breach

If the Contractor becomes aware of any circumstances that will or may lead or have led to a breach of one or more Regulatory Requirements, the Contractor shall, as soon as reasonably practicable, notify the Authority of such circumstances. This obligation is without prejudice to the Contractor’s overriding obligation to notify the relevant Regulator of such circumstances pursuant to relevant Regulatory Requirements.

1.7 Site Meetings

1.7.1 The Authority shall be entitled to attend and participate in Site Meetings.

1.7.2 The Contractor shall:

1.7.2.1 maintain a timetable of all Site Meetings; and

1.7.2.2 give the Authority reasonable notice of all proposed Site Meetings in order to enable the Authority to attend.

1.8 Other Meetings

The Contractor shall notify the Authority of any proposed meetings with Customers or Customer Groups or relevant stakeholders and shall give reasonable notice of the date, timing and location of such meetings so that the Authority may also attend such meetings if the Authority so wishes. Where Existing Agreements and/or Customer Contracts contain provisions which prohibit the Authority’s attendance at such meetings, the Contractor shall use its reasonable endeavours to procure the agreement of the Customer and/or counterparty to the Authority’s attendance at such meetings, and, until such agreement is obtained, the Authority will have due regard to the provisions of the Existing Agreements and/or Customer Contracts in deciding whether to attend such meetings.

1.9 Force Majeure

1.9.1 Performance of Obligations

Subject to Clause 1.9.2 (Notification and Mitigation), if a Party (the “Affected Party”) is, or could reasonably be expected to be, materially hindered, prevented or delayed from performing any of its obligations under this Contract by reason of a Force Majeure Event, such obligations shall be suspended (to the extent affected) for a period equal to the duration of the Force Majeure Event except that the Contractor shall not be excused from the due and punctual performance of any of its obligations under this Contract by reason of any circumstances to the extent that the impact of such circumstances on the Contractor’s ability so to perform its obligations could have been reasonably avoided or mitigated by the maintenance of business continuity and disaster recovery plans in accordance with Clause 9.4 (Maintenance and Support and Business Continuity) and the implementation of such plans.

1.9.2 Notification and Mitigation

1.9.2.1 The Affected Party shall, as soon as reasonably practicable, on becoming aware of a Force Majeure Event, notify the other Party in writing of:

1.9.2.1.1 the nature of the Force Majeure Event relied on;

1.9.2.1.2 the estimated effect of the Force Majeure Event on the Affected Party’s ability to perform its obligations under this Contract; and

1.9.2.1.3 the period for which it is estimated the Force Majeure Event will continue.

1.9.2.2 As soon as reasonably practicable following notification pursuant to this Clause 1.9.2.1 (Notification and Mitigation), the Parties shall consult with each other and use all reasonable endeavours to agree appropriate arrangements to mitigate the effects of the Force Majeure Event and facilitate the resumption of the affected obligation.

1.9.3 The Affected Party shall:

1.9.3.1 use all reasonable endeavours to minimise the effects of the Force Majeure Event on the performance of its obligations under this Contract;

1.9.3.2 where it is the Contractor, provide written reports as often as the Authority reasonably requires in the circumstances of the Contractor’s progress in minimising the effects of the Force Majeure Event and indicating when it is estimated that performance of the affected obligation will resume; and where the Affected Party is the Authority, provide updates to the Contractor as often as is reasonably possible in the circumstances of the Authority’s progress in minimising the effects of the Force Majeure Event and indicating when it is estimated that performance of the affected obligation will resume;

1.9.3.3 so far as reasonably practicable provide any information relating to the Force Majeure Event and its effects as the other Party may reasonably request;

1.9.3.4 (without prejudice to any applicable Law and/or Regulatory Requirement) make any alternative arrangements for resuming the performance of its obligations as may be practicable without incurring material additional expense;

1.9.3.5 where the Affected Party is the Contractor, the Contractor shall at all times during which a Force Majeure Event is subsisting take all steps in accordance with Good Industry Practice to overcome or minimise the consequences of the Force Majeure Event. If the Authority is the Affected Party, the Authority shall at all times during which a Force Majeure Event is subsisting take all steps reasonably necessary to overcome or minimise the consequences of the Force Majeure Event;

1.9.3.6 As soon as reasonably practicable after the cessation of a Force Majeure Event, the Affected Party shall notify the other Party in

writing that the Force Majeure Event has ended, and subject to Clause 1.9.5 (Requirement to instigate a Change Proposal) and to the Change Proposal being approved (and without prejudice to applicable Law and/or any Regulatory Requirement) shall resume the full performance of its obligations under this Contract in accordance with the approved Change as soon as is reasonably practicable; and

1.9.3.7 For the avoidance of doubt, save to the extent stipulated in this Clause 1.9 (Force Majeure), neither Party shall be released from any of its obligations under this Contract as a result of a Force Majeure Event.

1.9.4 Long Term Force Majeure

If the performance by the Affected Party of substantially all of its obligations under this Contract is materially prevented, hindered or delayed by reason of a Force Majeure Event for a period of more than ninety (90) consecutive Calendar Days (“Long Term Force Majeure”), the other Party may terminate this Contract with immediate effect by notice to the Affected Party on or at any time after the expiry of such ninety (90) Calendar Day period.

1.9.5 Requirement to instigate a Change Proposal

In the case of a Force Majeure Event affecting the Contractor, the Contractor shall be required to bring a Baseline Change Proposal, Funding Change Proposal and/or PBI Change Proposal (as appropriate) pursuant to Part 2 of the Programme Management Schedule (Setting the LTP and Change Control) and/or Part 2 of the Finance Schedule (Use of Performance Based Incentives) (as applicable) prior to resuming the performance of the affected obligations, save to the extent that Emergency Action is required, in which case the provisions of Part 2 of the Programme Management Schedule (Setting the LTP and Change Control) relating to Emergency Action shall apply.

1.10 Emergency Action

The Contractor shall be entitled to take Emergency Action at any time notwithstanding the other provisions of this Contract.

1.11 Warranties

1.11.1 Authority Warranties

Without prejudice to any warranties or conditions either express or implied by any applicable Law, the Authority warrants and undertakes that as at the Commencement Date:

1.11.1.1 it has the requisite power and authority to enter into and exercise its rights and perform its obligations under this Contract which, when executed, will constitute valid and binding obligations on it in accordance with its terms; and

1.11.1.2 has taken all necessary action to authorise the execution and the performance of its obligations under this Contract.

1.11.2 Contractor’s Warranties

Without prejudice to any warranties or conditions either express or implied by any applicable Law, the Contractor warrants and undertakes that as at the Commencement Date:

1.11.2.1 it has the requisite power and authority to enter into and exercise its rights and perform its obligations under this Contract which, when executed, will constitute valid and binding obligations on it in accordance with its terms; and

1.11.2.2 has taken all necessary action to authorise the execution and the performance of its obligations under this Contract.

1.12 Severability

1.12.1 If any condition, clause or provision of this Contract shall be found by any court or administrative body of competent jurisdiction to be invalid or unenforceable, such invalidity or unenforceability shall not affect the other provisions of this Contract which shall remain in full force and effect.

1.12.2 The Parties agree, in the circumstances referred to in Clause 1.12.1, to use reasonable endeavours to agree to substitute for any invalid or enforceable provision, a provision which achieves to the greatest extent possible the same effect as would have been achieved by the invalid or unenforceable provision.

1.13 Notices and Communications

1.13.1 A notice, approval, consent, electronic mail (in the case of Clause 1.13.3 below only) or other communication (“Notice”) in connection with this Contract and the documents referred to in it must be in written form in the English language and must be delivered by hand, by first class prepaid post (or airmail if posted to or from a place outside the United Kingdom) or by facsimile transmission to the relevant address or facsimile number specified in Clause 1.13.2 below or, for the purposes of Clause 1.13.3 below only, by electronic mail to an address for the time being notified for that purpose to the Party giving notice.

1.13.2 All Notices must be marked for the attention of the addressee.

The relevant details of the Authority and the Contractor at the date of this Contract are as set out in Part 1 (Addresses for Notifications in relation to the Sites) of Schedule 19 (Authorised Persons under the Contract).

Any change to the address, facsimile number or to the addressee must be notified by the relevant Party to the other Party as soon as reasonably practicable by Notice given in accordance with Clause 1.13 (Notices and Communications). The Parties’ respective addresses and facsimile numbers must be within the United Kingdom.

1.13.3 If an electronic mail address has been provided pursuant to Clause 1.13.1 the following Notices may be sent by electronic mail:

1.13.3.1 electronic transmittal of a scanned image of an original executed Notice;

1.13.3.2 day-to-day communication in connection with this Contract and the documents referred to in it; and

1.13.3.3 Authority approval/consent given in accordance with Clause 2.7 (Subcontracting/Procurement) and Paragraph 3.11 of Part 1 of the Subcontracting/Procurement Schedule (Subcontracting/Procurement Requirements).

But Notices referred to in 1.13.3.1 must be followed on the same day by first class prepaid post (or airmail if posted to or from a place outside the United Kingdom).

1.13.4 In the absence of evidence of earlier receipt, any Notice shall take effect from the time that it is deemed to be received in accordance with Clause 1.13.5 below.

1.13.5 Subject to Clause 1.13.4, a Notice is deemed to be received:

1.13.5.1 where delivered by hand, upon delivery at the address of the addressee;

1.13.5.2 where delivered by posted letter, on the third day after posting or, if posted to or from a place outside the United Kingdom, on the seventh day after posting;

1.13.5.3 where sent by facsimile, on production of a transmission report from the machine from which the facsimile was sent which indicates that the facsimile was sent in its entirety to the facsimile number of the recipient; or

1.13.5.4 where sent by electronic mail (where applicable), on the second day after such electronic mail was sent. The place of receipt of electronic mail shall be deemed to be the postal address of the addressee given in, or amended in accordance with, Clause 1.13.1 above.

1.13.6 A Notice received or deemed to be received in accordance with Clause 1.13.5 above on a day which is not a Working Day or after 5p.m. on any Working Day, according to the local time in the place of receipt, shall be deemed to be received on the next following Working Day.

1.13.7 Notwithstanding Clauses 1.13.1 and 1.13.2, if the Authority determines, in its absolute discretion, that any Notice is to be protectively marked and should be delivered in a secure manner, it shall inform the Contractor of this and shall also provide the Contractor with details of the name of the person to whom such Notice should be delivered and the method by which such Notice should be delivered.

1.14 Waiver

A failure or delay by either Party at any time to enforce any provision of this Contract or to require performance by the other Party of any provision of this Contract shall not be construed as a waiver of such provision and shall not affect the validity of this Contract or any part thereof or the right of the relevant Party to enforce any provision in accordance with its terms. Any waiver or release must be specifically granted in writing and signed by the Party granting it.

1.15 Entire Agreement

1.15.1 Each of the Parties to this Contract confirms that this Contract together with the Parent Body Agreement, the Deed of Indemnity, the Overarching Costs Management Agreement, the Records Agreement, the Deed of Agreement, the Nominated Staff Side Letter, the Working Capital Side Letter, the Deed of Agreement for Future Transfer Scheme and the ESTL Side Letter and the documents referred to in them, represents the entire understanding, and constitutes the whole agreement, in relation to its subject matter and supersedes any previous agreement between the Parties with respect thereto and, without prejudice to the generality of the foregoing, excludes any warranty, condition or other undertaking implied at law or by custom.

1.15.2 The Contractor confirms that:

1.15.2.1 in entering into this Contract it has not relied on any representation, warranty, assurance, covenant, indemnity, undertaking or commitment which is not expressly set out in this Contract, the Parent Body Agreement or the documents referred to in them; and

1.15.2.2 in any event, without prejudice to any liability for fraudulent misrepresentation or fraudulent misstatement, the only rights or remedies in relation to any representation, warranty, assurance, covenant, indemnity, undertaking or commitment given or action taken in connection with this Contract or the Parent Body Agreement or the documents referred to in them are those contained or referred to in this Contract, the Parent Body Agreement or such documents, and for the avoidance of doubt and without limitation, the Contractor has no other right or remedy (whether by way of a claim for contribution or otherwise) in tort (including negligence) or for misrepresentation (whether negligent or otherwise, and whether made prior to, and/or in, this Contract).

1.15.3 The Authority confirms that:

1.15.3.1 in entering into this Contract it has not relied on any representation, warranty, assurance, covenant, indemnity, undertaking or commitment which is not expressly set out in this Contract, the Parent Body Agreement or the documents referred to in them; and

1.15.3.2 in any event, without prejudice to any liability for fraudulent misrepresentation or fraudulent misstatement, the only rights or remedies in relation to any representation, warranty, assurance, covenant, indemnity, undertaking or commitment given or action taken in connection with this Contract or the Parent Body Agreement or the documents referred to in them are those

contained or referred to in this Contract, the Parent Body Agreement or such documents, and for the avoidance of doubt and without limitation, the Authority has no other right or remedy (whether by way of a claim for contribution or otherwise) in tort (including negligence) or for misrepresentation (whether negligent or otherwise, and whether made prior to, and/or in, this Contract).

1.16 Corrupt Gifts

1.16.1 Contractor Warranty and Undertaking

The Contractor warrants that in entering into this Contract it has not committed any Prohibited Act and it undertakes not to do any of the Prohibited Acts.

1.16.2 Remedies

1.16.2.1 If the Contractor or any Subcontractor or Sub-Sub-Contractor (or anyone employed by or acting on behalf of any of them) or any of its or their agents or shareholders commit any Prohibited Act, the Authority shall be entitled to act in accordance with Clauses 1.16.2.2 to 1.16.2.4 below.

1.16.2.2 If the Prohibited Act is committed by an Employee, the Authority may give notice to the Contractor requiring the Contractor within thirty (30) Calendar Days of receipt of such notice to procure the performance of such part of the Tasks by another person.

1.16.2.3 If the Prohibited Act is committed by a Subcontractor or Sub-Sub-Contractor or by an employee of either of them not acting independently, the Authority may give notice to the Contractor requiring the Contractor within thirty (30) Calendar Days of receipt of such notice to terminate the relevant Subcontract or require the Subcontractor to terminate the relevant Sub Sub Contract and procure the performance of such part of the Tasks by another person.

1.16.2.4 If the Prohibited Act is committed by an employee of a Subcontractor or Sub-Sub-Contractor acting independently of them, the Authority may give notice to the Contractor requiring the Contractor within thirty (30) Calendar Days of receipt of such notice to procure that the Subcontractor or Sub-Sub-Contractor (as the case may be procures the performance of such part of the Tasks by another person.

1.16.2.5 If the Prohibited Act is committed by a person not falling within Clauses 1.16.2.2 to 1.16.2.4 above, the Authority may give notice to the Contractor requiring the Contractor within thirty (30) Calendar Days of receipt of such notice to procure the termination of such person’s involvement in the Tasks and (if necessary) procure the performance of such part of the Tasks by another person.

1.16.2.6 Any notice under this 1.16 (Corrupt Gifts) shall specify:

1.16.2.6.1 the nature of the Prohibited Act; and

1.16.2.6.2 the identity of the person whom the Authority believes has committed the Prohibited Act.

In this Clause 1.16 (Corrupt Gifts), “acting independently” shall mean where a person does not act under the authority of or with the knowledge of a director or other management of a Subcontractor or Sub-Sub-Contractor and “not acting independently” shall be construed accordingly.

1.16.2A The Authority acknowledges that the Contractor may not have rights to secure compliance with Clause 1.16.2 by some Sub-Sub-Contractors with whom it entered into Sub Sub Contracts before the Effective Date.

1.16.2A.1 The Contractor shall not be in breach of Clause 1.16.2 nor be deemed to have committed a Prohibited Act if having used reasonable endeavours to do so it fails to secure compliance by a Sub-Sub-Contractor with clause 1.16.2 in the circumstances referred to in this Clause 1.16.2A.1.

1.17 Variation

1.17.1 Except where otherwise provided in this Contract, no variation of this Contract (or any document referred to in it) shall be effective unless it is in writing (which for this purpose, does not include electronic mail) signed by or on behalf of each of the Parties. The expression “variation” includes supplement, deletion or replacement, howsoever effected.

1.18 Assignment

1.18.1 Subject to Clause 2.7 (Subcontracting/Procurement), the Contractor shall not without the Authority’s prior written consent, assign (whether absolutely or by way of security and whether in whole or in part), transfer, mortgage, charge or otherwise dispose in any manner whatsoever of the benefit of this Contract or any part of it and shall not delegate in any manner whatsoever its performance under this Contract.

1.18.2 The Authority shall not, without the prior written consent of the Contractor, assign, transfer or otherwise dispose of this Contract or any part thereof or any benefit or interest therein or thereunder unless to the Crown or another manifestation or agency of the Crown or unless the obligations of the person to whom and in whose favour any such interest is assigned, transferred or otherwise disposed of are fully and unconditionally guaranteed by the Crown.

1.19 Contracts (Rights of Third Parties) Xxx 0000

No term of this Contract is enforceable under the Contracts (Rights of Third Parties) Xxx 0000 by a person who is not a Party to this Contract other than the Parent Body Organisation and, in respect of Clause 1.20 (Shared Services) only, the Secretary of State.

1.20 Shared Services

1.20.1 The Contractor acknowledges that the Authority is developing a Shared Services Project. In order to allow the implementation of the Shared Services Project, the Authority and the Contractor agree the following:

1.20.1.1 The Contractor agrees to use its reasonable endeavours to assist the Authority with the development and implementation of the Shared Services Project;

1.20.1.2 The Contractor acknowledges that the Authority may require changes to the Life Time Plan in accordance with Part 2 of the Programme Management Schedule (setting the LTP and Change Control) in order to implement the Shared Services Project.

1.20.2 Section 40(2) of the Energy Act provides that a Future Transfer Scheme which would operate to transfer property, rights and liabilities to a publicly owned company (as defined in the Energy Act) or the Authority from the Contractor can be carried out only if the Contractor consents to that Future Transfer Scheme.

1.20.2 For Future Transfer Schemes that meet the requirements set down in Clause 1.20.3, the Contractor agrees that whenever during this Contract, a Future Transfer Scheme or Future Transfer Schemes has or have been proposed by the Secretary of State, under which property, rights or liabilities are proposed to be transferred from the Contractor by virtue of Section 40(2) of the Energy Act, the Contractor will consent to their transfer in accordance with such Future Transfer Scheme(s) (and such consent will constitute ‘consent in accordance with a nuclear transfer scheme’) for the purposes of Section 40 of the Energy Act.

1.20.3 The requirements described in clause 1.20.2 are that:

1.20.3.1 the Future Transfer Scheme(s) is/are designed to facilitate the Shared Services Project;

1.20.3.2 the Future Transfer Scheme(s) does/do not operate to transfer rights or liabilities in relation to any Nominated Staff or employment contracts related to Nominated Staff (including but not limited to Secondment Agreements); and

1.20.3.3 the Future Transfer Scheme(s) does/do not operate to alter the Parties to this Contract or the Parent Body Agreement.

1.20.4 The provisions of this clause 1.20 confer rights and benefits on the Secretary of State which rights and benefits are intended to be enforceable by the Secretary of State under the Contracts (Rights of Third Parties) Xxx 0000.

1.21 Consents —

1.21.1 No Exclusion or Limitation

1.21.1.1 Neither the giving of any approval or consent, knowledge of the terms of any agreement or document (including, without limitation, any Specification or any document approved pursuant to this

Contract, the Parent Body Agreement or any documents referred to in them) nor the review of any document nor any course of action by or on behalf of the Authority shall:

1.21.1.2 exclude or limit any of the Contractor’s obligations or liabilities under or in connection with this Contract; or

1.21.1.3 affect the Authority’s entitlement to determine the Incentive Fee in accordance with Clauses 6.11.3 and 6A.11.5 (Performance Based Incentive Arrangements) and Part 2 of the Finance Schedule (Use of Performance Based Incentives).

1.21.1.4 Subject to 1.21.1. 5 below, where any provision of this Contract refers to persons acting at the Authority’s direction or with the Authority’s authority (or words to that effect), that wording shall not of itself result in the Authority being liable under this Contract or otherwise for the actions of the Contractor.

1.21.1.5 The Contractor will be provided with a copy of each Authority representative’s Delegation of Authority in order to satisfy itself of that representative’s scope of authority and is entitled to rely on such Delegations of Authority in following instructions given in accordance with such Delegation of Authority.

1.21.2 Examination

Without limitation to Clause 1.21.1 (No Exclusion or Limitation), no enquiry or examination or lack of enquiry or examination by the Authority into any matter nor any comment, rejection or approval expressed by such person in regard thereto, either with or without modifications, (nor any absence of the same) shall in any respect relieve or absolve the Contractor from any obligation or liability under or in connection with this Contract.

1.21.3 Inspections

Notwithstanding any inspection by the Authority under this Contract, the Parent Body Agreement or any documents referred to in them, or the failure of the Authority to make any inspection under this Contract, the Parent Body Agreement or any documents referred to in them, the Contractor’s responsibility under this Contract shall not be relieved or absolved or otherwise modified.

1.21.4 Contractor’s Documents

The Contractor shall be solely responsible for any discrepancies, errors or omissions in any documents that it prepares or has prepared in accordance with this Contract and for any failure of such documents to comply with this Contract, notwithstanding that any such documents have been seen or acknowledged or approved or not objected to or commented on (or not commented on) by the Authority.

1.22 Approvals

If the Contractor fails to seek the Authority’s approval where it is obliged to do so under this Contract, the Authority shall be entitled to reduce the Incentive Fee in

accordance with Paragraph 3.11.4.1 of Part 2 of the Finance Schedule (Use of Performance Based Incentives).

1.23 Counterparts

This Contract may be executed in any number of counterparts and by the Parties to it on separate counterparts, each of which when so executed and delivered shall be an original, but all the counterparts shall together constitute one and the same instrument.

1.24 Governing Law and Jurisdiction

1.24.1 This Contract shall be governed by, and construed in accordance with the laws of England and Wales.

1.24.2 Subject to Part 13 (Dispute Management), if any claim, legal action or proceedings arise out of or in connection with a dispute concerning this Contract and any matter arising there from, each Party irrevocably:

1.24.2.1 agrees to submit to the exclusive jurisdiction of the courts of England and Wales; and

1.24.2.2 waives any right that it may have to object to an action being brought in the courts of England and Wales on the grounds of inconvenient forum or to claim that those courts do not have jurisdiction

1.25 Claims Handling

Subject to Clause 8 (Intellectual Property), the Authority and the Contractor agree that in respect of any claim received from Third Parties they shall comply with the procedures in respect of such claims which they are obliged to follow pursuant to clause 8 of the Parent Body Agreement.

1.26 LC35

In the Authority’s view, LC35 does not impose any financial obligations on the Contractor or its Parent Body Organisation.

Where no contract is in place between a contractor and/or its parent body organisation and the Authority in respect of a site which has been designated to the Authority, the Authority has financial responsibility for that site.

Where a contract is in place between a contractor and/or its parent body organisation and the Authority, then the financial obligations imposed on the contractor and/or its parent body organisation are as set out in that contract.

1.27 Knowledge Management

1.27.1 The Contractor shall adopt a knowledge management policy, (“Contractor Knowledge Management Policy”) that is consistent with the Knowledge Management Policy and, at the Authority’s written request, participate in the Authority’s knowledge management initiatives.

1.27.2 The Contractor acknowledges and agrees that adoption and compliance with the Contractor Knowledge Management Policy will facilitate:

1.27.2.1 the identification and analysis of available and required knowledge, and the subsequent planning and control of actions to develop knowledge assets so as to fulfil the Authority’s and the Contractor’s organisational objectives;

1.27.2.2 a systematic and organised attempt to use knowledge within the Contractor’s organisation to transform its ability to store and use knowledge to improve performance.

PART 2 : CONTRACTOR’S OBLIGATIONS

2.1 Nature of Contractor’s Obligations

The Contractor shall:

2.1.1 without prejudice to the undernoted absolute obligations, use its reasonable endeavours to provide all of the Tasks for the relevant Contract Year set out in the LTP insofar as they are additional to those listed in Clauses 2.1.2 to 2.1.109 below and, insofar as in relation to those Tasks for which it is required, approval under Part 3 of the Programme Management Schedule (Project Validation and Financial Sanction) has been received. For the avoidance of doubt, the Contractor must use its reasonable endeavours to obtain the relevant approvals under Part 3 of the Programme Management Schedule (Project Validation and Financial Sanction);

2.1.2 keep the Sites secure in accordance with the Internal Procedures relating to safety and Site security;

2.1.3 comply with all applicable Law;

2.1.4 comply with all applicable Regulatory Requirements ;

2.1.5 meet Historical Costs in accordance with Clause 6.5 and 6A.5 Historical Costs

2.1.6 comply with Clause 2.2 (Standard of Performance);

2.1.7 comply with the Customer Contracts in accordance with their terms;

2.1.8 be aware and, where appropriate have reasonable regard to the Authority Policies and Procedures;

2.1.9 except to the extent otherwise provided and subject to Clause 2.1.10 below, comply with any of its other obligations under Parts 1 to 14 of this Contract not expressly made an absolute obligation save where such compliance will result in the Contractor breaching clause 2.1.1 above; and

2.1.10 subject to Clause 8, at the request of the Authority share information in relation to processes, knowledge, experience and know how and participate in initiatives made by the Authority in relation to such sharing and shall co-operate with the Authority or its nominee to facilitate such sharing.

2.2 Standard of Performance

The Contractor shall comply with its obligations under this Contract:

2.2.1 in a safe, secure, efficient and cost effective manner; and

2.2.2 exercising the degree of skill and care, diligence, prudence and foresight which would reasonably and ordinarily be expected from a skilled and experienced contractor engaged (in the United Kingdom or in any jurisdiction with Analogous Standards) in activities of a similar scope and complexity to those that are the subject of this Contract and under the same or similar

circumstances, where such contractor is seeking to comply with its contractual obligations and all applicable Law and Regulatory Requirements (“Good Industry Practice”). “Analogous Standards” means the level of duty to exercise skill and care to which a skilled, diligent and prudent contractor would reasonably and ordinarily be subject in any jurisdiction where there is experience of nuclear operations and/or decommissioning activities which have at least equivalent standards to those of the United Kingdom provided that for the purposes of assessing compliance with:

2.2.2.1 Regulatory Requirements, the only regulatory standards against which the Contractor will be judged under this Contract will be those related to the United Kingdom; and

2.2.2.2 Analogous Standards, any regulatory or other constraints to which the Contractor is subject and which would not reasonably be expected to constrain a contractor in the relevant jurisdiction or jurisdictions shall be taken into account; and

2.2.3 in a transparent and co-operative manner with both the Authority and the Regulators; and

2.2.4 ensuring that all aspects of any works, services or undertakings comply with the requirements of this Contract; and ensuring that all aspects of any works, services or undertakings supplied in the course of providing the Tasks meet all standards, specifications and requirements as may be set out in the NTWP, relevant PBIs, other standards or specifications issued by the Authority from time to time and/or this Contract and are fit for all purposes and requirements set out in this Contract and the NTWP and comply with Part 1 (Subcontracting/Procurement Requirements) of the Subcontracting/Procurement Schedule where relevant; and

2.2.5 in a manner that is consistent with the Authority discharging its functions and statutory duties and that would reasonably be expected not to lower the reputation of the Authority in the eyes of any Third Party insofar as the same may be reasonably ascertained, provided that no action taken by the Contractor pursuant to Part 13 (Dispute Management) shall amount to a breach of this Clause 2.2.5; and

2.2.6 in a manner which enables the Authority to fulfil its statutory functions and duties and the Contractor to fulfil its obligations under its Nuclear Site Licences; Ofgem licences and Part 1 of the Electricity Interface Obligations Schedule (Allocation of responsibilities under Industry Documents); and

2.2.7 in respect of the Commercial Operations Tasks, in a professional manner befitting an adviser acting with reasonable competence, with integrity, impartiality, objectivity and confidentiality, avoiding conflicts of interest (and for the avoidance of doubt, notifying the Authority promptly of any potential for conflict of interest which arises).

2.3 No activities outside current Contract Year of LTP

2.3.1 In any Contract Year, the Contractor shall not undertake any activities which are not (in the reasonable opinion of the Authority) included in the relevant Contract Year of the LTP or otherwise necessary to the compliant

performance of this Contract in the relevant Contract Year (except in relation to meeting Historical Costs and other Transitional Activities), unless:

2.3.1.1 the Contractor is permitted to do so pursuant to the Authority approval of a Change Control Request in accordance Part 2 of the Programme Management Schedule (Setting the LTP and Change Control); or

2.3.1.2 the Contractor is permitted to do so pursuant to Part 1 (Statement of Work) of the Lifetime Plan Schedule.

2.3.1.3 the Contractor is directed to do so pursuant to a direction issued by the Authority in accordance with Clause 3.1 (Authority Directions); or

2.3.1.4 the Contractor is permitted to do so by its Permitted Activities or a consent given by the Authority under Clause 3.6 (Authority Rights in respect of Customer Contracts) or is instructed to do so by the Authority pursuant to Clause 3.6 (Authority Rights in respect of Customer Contracts); or

2.3.1.5 the Contractor is obliged to do so or has the right to do so under the Records Agreement; or

2.3.1.6 the Authority otherwise agrees in writing and in such terms as the Authority determines.

2.3.1.7 such works, operations, services or other activities constitute an Emergency Action in accordance with Part 2 of the Programme Management Schedule (Setting the LTP and Change Control).

2.3.2 For the avoidance of doubt:

2.3.2.1 the Contractor’s performance of, compliance with or entry into Customer Contracts and/or Subcontracts which are structured with multi-year incentives or obligations shall not, in itself, constitute a breach of Clause 2.3 (No activities outside current Contract Year of LTP); and

2.3.2.2 the Contractor exceeding the budget set out in the LTP for the corresponding activity in the current Contract Year shall not, in itself, constitute a breach of Clause 2.3.1 (this is without prejudice to the Contractor’s obligation to comply with Clause 2.6 (Setting the LTP and Change Control) and Part 2 of the Programme Management Schedule (Setting the LTP and Change Control) where applicable); and

2.3.2.3 Category III Changes (which do not require the prior approval of the Authority) shall not constitute a breach of Clause 2.3.1; and

2.3.2.4 the Contractor may carry out any works, operations, services or other activities which constitute an Emergency Action.

2.3.3 Cost and Risk of activities outside LTP

Activities undertaken by the Contractor which are not set out in the current Contract Year of the LTP and are not otherwise permitted in accordance with Clause 2.3 (No activities outside current Contract Year of LTP) above, are done so entirely at the risk of the Contractor as to:

2.3.3.1 the Costs incurred which shall be Disallowable Costs in accordance with Part 4 of the Finance Schedule (Costs Principles and Procedures); and

2.3.3.2 any Costs which will also be Disallowable Costs in accordance with Part 4 of the Finance Schedule (Costs Principles and Procedures) which arise directly as a result of such activities being undertaken,

except that where there is a valid claim against an insurer in respect of insurance, the premium costs of which have been met by the Authority (either directly or as a reimbursed Allowable Cost), the Authority agrees that it will make a claim and that if proceeds are recovered which reimburse the relevant Costs, the Authority will set off those proceeds against any claim it may make against the against the Contractor under Part 11 (Indemnity, Liability and Insurance) of this Contract in respect of the Contractor’s breach of Clause 2.3.1 above. If the Authority so requires, the Contractor will co-operate fully in the provision of information and/or process the insurance claim on its behalf and the Costs of so doing will be Allowable.

2.4 Quality Management System

2.4.1 The Contractor shall procure that all aspects of its performance of this Contract are the subject of proper quality management systems and in accordance with Good Industry Practice.

2.4.2 The Contractor’s quality management systems shall be internationally accepted quality management systems. The Contractor will maintain and ensure continued compliance with those quality management systems at all times during the Contract.

2.4.3 The Contractor shall monitor, review and update its quality management systems from time to time as necessary to comply with Good Industry Practice and to ensure continued accreditation.

2.4.4 The Contractor shall submit any changes it considers necessary to its quality management systems to the Authority for approval if such a change will affect (or is likely to affect) or will lead (or is likely to lead) to the loss of the Contractor’s accreditation. The Authority may only withhold its consent to such a change if, in its reasonable opinion, the proposed change is not in accordance with internationally accepted quality management systems at the time of the request.

2.4.5 When responding to any Contractor request for the Authority’s approval of changes to the Contractor’s quality management systems, the Authority shall:

2.4.5.1 respond in writing and without unreasonable delay; and

2.4.5.2 provide reasons for any determination that the Contractor’s proposed changes to its quality management systems are unsuitable.

2.4.6 For the avoidance of doubt, where Customer Contracts place specific obligations on the Contractor in relation to its quality management systems the Authority shall have due regard to such obligations in reaching its determination.

2.5 Socio-Economic Development

2.5.1 The Contractor shall be required to give encouragement and support to activities which benefit the social and/or economic life of communities living near each Site or that produce other environmental benefits for such communities and the Authority undertakes that it shall allocate a sum from the BCWS in each Contract Year which shall be used by the Contractor for such purposes.

2.5.2 No later than forty-five (45) Calendar Days after the Commencement Date and, thereafter, annually and concurrently with the LTP submission (in accordance with Paragraph 7 (NTWP and LTP) of Part 2 of the Programme Management Schedule (Setting the LTP and Change Control) the Contractor shall submit to the Authority a Socio-Economic Development Plan which shall, to the reasonable satisfaction of the Authority, provide details of:

2.5.2.1 the events, activities or functions which the Contractor intends to fund pursuant to its obligations under Clause 2.5.1 above;

2.5.2.2 the costs of these intended events, activities or functions;

2.5.2.3 the reasons for the selection of these events by the Contractor; and

2.5.2.4 the ways in which social or economic benefits are intended to be conferred on the relevant communities as a result.

Until such time as the Contractor’s first Socio-Economic Development Plan is submitted to and approved by the Authority after the Commencement Date, the Contractor shall follow any spend profile that it has in place on the Commencement Date and, in any event, shall act prudently in respect of any costs it incurs in respect of such Socio-Economic Development Plan prior to obtaining the Authority’s approval to its proposal.

2.5.3 Within thirty (30) Calendar Days of submission by the Contractor, the Authority shall review the Contractor’s Socio-Economic Development Plan for that Contract Year and may require changes to be made. In so doing, the Authority shall:

2.5.3.1 respond in writing and without unreasonable delay;

2.5.3.2 provide reasons for any determination that the Contractor’s proposed events, activities or functions are unsuitable; and

2.5.3.3 not wilfully impede the Contractor from being able to comply with any schedule set out in such Socio-Economic Development Plan.

2.5.4 Once approved, the Contractor will be required to comply with the terms of its Socio-Economic Development Plan as changed (if at all) in accordance with Clause 2.5.3 and use the funding allocated to this in the LTP for the events, activities or functions as specified therein.

2.6 Setting The LTP And Change Control

2.6.1 The Contractor shall prepare the LTP for each Contract Year in accordance with Paragraph 7 (LTP and LCBL) of Part 2 of the Programme Management Schedule (Setting the LTP and Change Control).

2.6.2 If the Contractor wishes to add a new Task to the LTP or make any Change to the scope, cost or schedule of the Tasks set out in the LTP, funding at PSWBS Category Levels, the Current Budget, the Capital Budget and/or the SLC Annual Funding Limit it must comply with the provisions of Part 2 of the Programme Management Schedule (Setting the LTP and Change Control).

2.7 Subcontracting/Procurement

The Contractor shall, when entering into any subcontract arrangements, comply with the provisions of Parts 1 and 2 of the Subcontracting/Procurement Schedule (as applicable).

2.8 Contractor’s Internal Procedures

2.8.1 The Contractor shall ensure that it has in place all such Internal Procedures as may be necessary to satisfy its legal obligations and to ensure that it is able to operate safely, securely and efficiently. Subject to Paragraph 2 of Part 1 of the Programme Management Schedule (Programme Controls), the Contractor shall also ensure that it has in place Internal Procedures that comply with the Authority’s procedures as listed in Part 1 of the Programme Management Schedule (Programme Controls).

2.8.2 The Contractor shall, upon the Authority’s request, supply a detailed list of all existing and applicable Internal Procedures together with copies of any such Internal Procedures as may be required by the Authority.

2.8.3 When requested by the Authority to do so, the Contractor shall provide to the Authority the underlying basis and rationale for the creation or modification of any such Internal Procedures and if requested, how this reflects Good Industry Practice.

2.8.4 The Contractor shall within the reasonable time (if any) specified by the Authority prepare and submit for the Authority’s approval any further Internal Procedures and modifications to existing Internal Procedures reasonably identified as being required by the Authority.

2.8.5 Failure to comply with an Authority Internal Procedure change request

If the Contractor:

2.8.5.1 fails to comply with the Authority’s request to introduce a new Internal Procedure within the time specified in Clause 2.8.4; and/or

2.8.5.2 fails persistently to establish or comply with an Internal Procedure to the extent that the Authority reasonably considers that such non-compliance materially hinders the Contractor’s ability to perform its obligations in accordance with this Contract, and when requested by the Authority does not to the satisfaction of the Authority substantiate the reason for this action or inaction, then the Authority shall be entitled to reduce the Incentive Fee in accordance with Paragraph 3.11.4.2 of Part 2 of the Finance Schedule (Use of Performance Based Incentives).

2.9 Inter-SLC Service Contracts

2.9.1 To govern each operational interrelationship between the Contractor and other SLCs or between the Contractor and UKAEA, each of which shall take effect under both this Contract and the Site Management and Operations Contracts between the Authority and such other SLCs or UKAEA (as the case may be) the Contractor, to the extent that it has not complied with the obligation prior to the Effective Date, as soon as reasonably practicable after the Effective Date enter into Inter-SLC Service Contracts in accordance with the pro forma template included as Part 2 of the Subcontracting/Procurement Schedule, and

2.9.1.1 where the Contractor, either on its own behalf, or on behalf of another SLC or UKAEA, wishes to make a material deviation from the pro forma template in Part 2 of the Subcontracting/Procurement Schedule it shall seek the Authority’s prior written approval.

2.9.1.2 where the scope of the operational interrelationship is to be subject to competition and where such competition will include contractors external to other SLCs or UKAEA then the Contractor may use its standard terms and conditions for both the competition and any ensuing contract.

2.9.2 Each Inter-SLC Service Contract shall set out the goods and/or services to be provided by or to the Contractor and the associated operational responsibilities of the Contractor and the relevant SLC or UKAEA (as the case may be) in respect of the supply of such goods and/or services including any payment obligations, a specification of the goods and/or services to be supplied, the performance standard required of the supplier and the actions required of the person to whom the goods and/or services are supplied in order to facilitate their supply.

2.9.3 Compliance

The Contractor shall:

2.9.3.1 perform its responsibilities as set out in the Inter-SLC Service Contracts; and

2.9.3.2 ensure that such Inter-SLC Service Contracts are up to date to enable the Contractor to perform its obligations under this Contract and comply with applicable Law or Regulatory Requirements.

2.9.4 Review of Inter-SLC Service Contracts

2.9.4.1 If requested by the Authority, the Contractor shall supply for the Authority’s review such Inter-SLC Service Contracts (regardless of the manner in which they are held, stored or collated) as the Authority requires. Annually, the Contractor will provide a schedule of Inter-SLC Service Contracts and an updated schedule each time Inter-SLC Service Contracts are amended or created.

2.9.4.2 The Authority may request changes to any Inter-SLC Service Contract, on the grounds that, in the Authority’s reasonable opinion the required changes to the Inter-SLC Service Contract would materially enhance the Contractor’s ability to perform its obligations under this Contract and/or the relevant SLC’s or UKAEA’s ability (as the case may be) to perform its obligations under its Site Management and Operations Contract; and/or

2.9.4.3 The Authority (acting reasonably) shall submit to the Contractor its request for a change to the Inter-SLC Service Contract in writing as soon as practicable, specifying:

2.9.4.3.1 the grounds upon which the change is requested;

2.9.4.3.2 the nature of the change requested and to whose responsibilities; and

2.9.4.3.3 the reasonable period of time within which the Contractor shall be required to submit the revised Inter-SLC Service Contract for Authority review, and, at the same time, the Authority shall serve the same notification on the other relevant SLC or UKAEA (as the case may be) in accordance with its rights under its Site Management and Operations Contract with the relevant SLC or UKAEA (as the case may be) requiring that SLC or UKAEA (as the case may be) to revise the relevant Inter-SLC Service Contract in the same manner.

2.9.4.3.4 Upon receipt of the Authority’s written notification pursuant to Clause 2.9.4.3, the Contractor shall work together with the relevant SLC or UKAEA (as the case may be) to revise the Inter-SLC Service Contract in accordance with the Authority’s notification and shall submit to the Authority the revised Inter-SLC Service Contract in accordance with the time period specified pursuant to Clause 2.9.4.3.3 (Review of Inter-SLC Service Contracts).

2.9.4.3.5 In any review of Inter-SLC Service Contracts, the Authority will consider the obligations and duties placed on the Contractor by applicable Law and Regulatory Requirements, in order to avoid conflict between the

relevant Inter-SLC Service Contracts and those obligations and duties.

2.9.4.4 Confirmation by Authority

Without prejudice to the Authority’s rights under Clauses 2.9.4.1 and 2.9.4.2 to request the review of and to require changes to any Inter-SLC Service Contract, if, within thirty (30) Calendar Days of receipt of a Inter-SLC Service Contract submitted to the Authority by the Contractor for review in accordance with Clause 2.9.4.1 or in accordance with Clause 2.9.4.3.4, the Authority has not responded, whether to request further changes or to confirm that no changes are required or to specify a further time period, the Authority shall be deemed to have confirmed its acceptance of the relevant Inter-SLC Service Contract in the form submitted to it by the Contractor. The provisions of the existing Inter-SLC Service Contract (if any) shall prevail until such time as the Authority has responded or is deemed to have responded in accordance with this Clause 2.9.4.4 (Confirmation by Authority).

2.9.4.5 Failure to comply

If the Contractor:

2.9.4.5.1. fails to supply a Inter-SLC Service Contract for review in accordance with Clause 2.9.4.1 (Review of Inter-SLC Service Contracts); and/or

2.9.4.5.2 fails to comply with the Authority’s request for change to a Inter-SLC Service Contract within the time specified in Clause 2.9.4.3; and/or

2.9.4.5.3 fails persistently to comply with a Inter-SLC Service Contract to the extent that the Authority reasonably considers that such non-compliance materially hinders the Contractor’s ability to perform its obligations in accordance with this Contract and/or the relevant SLC’s or UKAEA’s ability (as the case may be) to perform its obligations under its Site Management and Operations Contract with the Authority,

and, when requested by the Authority, does not to the satisfaction of the Authority substantiate the reason for this action or inaction, then the Authority shall be entitled to reduce the Incentive Fee in accordance with Paragraph 3.11.4 of Part 2 of the Finance Schedule (Use of Performance Based Incentives).

2.10 Assumption of Existing Agreements

2.10.1 Subject to Clause 2.10.2 below, all extant rights and obligations under all Existing Agreements shall continue in full effect in accordance with the terms of those agreements.

2.10.2 Within ninety (90) Calendar Days of the Commencement Date, or such later date as the Authority may determine and notify to the Contractor, the

Authority shall review the provisions of all Existing Agreements with Affiliates entered into on or after the date sixty (60) Calendar Days prior to the Commencement Date (“Recent Existing Agreements”).

2.10.3 If any Recent Existing Agreement with an Affiliate does not comply with the requirements of Paragraph 3.13 (Flowdown of Contractual Obligations) of Part 1 of Subcontracting/Procurement Schedule (Subcontracting/Procurement Requirements), or, in the Authority’s reasonable opinion, has terms relating to price which do not provide value for money, the Authority will require that the Contractor provides written justification for the non-compliant terms and/or the terms relating to price. The Authority may require the Contractor to renegotiate any non-compliant term or terms relating to price so that the Recent Existing Agreement is fully compliant with Part 1 of Sub-contracting/Procurement Schedule (Subcontracting/Procurement Requirements) and/or provides, in the Authority’s reasonable opinion, value for money and the Contractor shall provide evidence to the Authority within a timeframe determined by the Authority (acting reasonably) of such full compliance.

2.10.4 If, in the reasonable opinion of the Authority, a Recent Existing Agreement with an Affiliate is not necessary to the Contractor’s performance of its obligations under this Contract it shall require that the Contractor exercise its rights to terminate such Recent Existing Agreement for convenience within a timeframe determined by the Authority acting reasonably.

2.11 Health and Safety

2.11.1 Where the CDM Regulations are applicable to any project which is being carried out pursuant to this Contract:

2.11.1.1 the Contractor warrants to the Authority that it is and shall continue to be competent and appropriately resourced to perform the duties imposed on a client by the CDM Regulations;

2.11.1.2 the Contractor:

2.11.1.2.1 shall, where the relevant project is commenced prior to the coming into force of CDM 2007, (1) make and serve on the Executive a declaration pursuant to and in the form (if any) required by the CDM Regulations that the Contractor will act as the only client in relation to the project for all the purposes of the CDM Regulations; (2) forthwith send a copy of such declaration to the Authority and (3) upon receipt of notice from the Executive that it has received such declaration the Contractor, shall send a copy of such notice to the Authority; or

2.11.1.2.2 where the relevant project is commenced after the coming into force of CDM 2007, hereby elects to be treated for the purposes of the CDM Regulations as the only client in respect of the project in question to the extent that the CDM Regulations so permit.

2.11.1.3 the Contractor shall not and shall not seek to withdraw, terminate or in any manner derogate from its declaration or election (as the case

may be) that it will act as, and its acceptance of its responsibilities as, the only client for all the purposes of the CDM Regulations.

2.11.1.4 if the project in question has been commenced prior to the coming into force of CDM 2007 and the Contractor has served a declaration that it is the Authority’s agent for the purposes of the project in question, then the Authority hereby requests the Contractor, and the Contractor hereby consents, to continue to act as the agent of the Authority for the purpose of such project after the coming into force of CDM 2007. Provided that, in such case:

2.11.1.4.1 the Contractor shall be subject to such requirements and prohibitions as are placed by CDM 2007 on the Authority;

2.11.1.4.2 the Contractor shall comply with such obligations as are placed on a client under CDM 2007 and in particular shall ensure that the relevant planning supervisor and principal contractor are reappointed in writing as CDM co-ordinator and principal contractor respectively for the purposes of CDM 2007; and

2.11.1.4.3 the Contractor shall cease to act as the Authority’s agent for the purposes of the project in question upon the earlier of the revocation of such agency by the Authority, the end of the project in question, or the lapse of a period of five years from the date when CDM 2007 came into force.

2.11.2 The Contractor shall observe, perform and discharge and shall procure the observance, performance and discharge of:

2.11.2.1 all the obligations, requirements and duties arising under the CDM Regulations in connection with any project; and

2.11.2.2 any code of practice for the time being approved by the Health and Safety Commission pursuant to the Health and Safety at Work etc. Acx 0000 xn connection with the CDM Regulations.

In this Clause 2.11 (Health and Safety), “client”, “project”, “CDM co-ordinator”, “planning supervisor”, “principal contractor” and “the Executive” have the same meanings as in the CDM Regulations.

PART 3: RIGHTS AND OBLIGATIONS OF AUTHORITY

3.1 Authority Directions

3.1.1 Nothing in this Clause 3.1 shall, or is intended to:

3.1.1.1 bind the Authority as to the particular manner in which any statutory power is exercised in the future; and/or

3.1.1.2 otherwise act as a xxxxxx on the future discretion of the Authority in exercising its rights or acting in accordance with its obligations.

3.1.2 Without prejudice to Clause 3.1.1 above, the Contractor shall be relieved from the duty to comply with any Authority Direction issued pursuant to section 18 of the Energy Act and shall have no liability resulting from any such Authority Direction save in either case in any one or more of the following circumstances:

3.1.2.1 a Contractor Default has occurred; and/or

3.1.2.2 an Authority Default has occurred or the Authority has otherwise given a termination notice in accordance with Clause 12.8 (Termination for Convenience); and/or

3.1.2.3 at any time the Authority believes, in its sole opinion, that in view of the national interest, the requirements of national security, the occurrence of a state of war or other emergency (whether or not involving hostilities), the occurrence or possible occurrence of a major accident, crisis or national disaster, it is necessary or desirable for the Authority to exercise its powers under section 18 of the Energy Act; and/or

3.1.2.4 at any time the Authority believes, in its sole opinion, that a grievous risk to life or limb of any person or a serious risk to property, the environment or the security of any Site exists.

3.1.3 For the avoidance of doubt, in the event of the occurrence of any one or more of the circumstances specified in Clauses 3.1.2.1 to 3.1.2.4 above, notwithstanding any other provision of this Contract, the Authority will notify the Contractor that such circumstances exist, and:

3.1.3.1 the Contractor shall comply with any relevant Authority Direction (and shall be subject to its statutory duty to do so under section 18 of the Energy Act);

3.1.3.2 the Contractor shall be relieved of its duty to perform its obligations under this Contract, to the extent that compliance with the terms of such Authority Direction is inconsistent with the performance of any of such obligations (but the Contractor shall continue to perform its remaining obligations under this Contract save as otherwise specified in the relevant Authority Direction and/or to the extent compliance with such obligations is inconsistent with such Authority Direction); and

3.1.3.3 the Authority shall, when giving any Authority Direction, act in accordance with its powers under the Energy Act.

3.2 Compliance with Law and Regulatory Requirements

The Authority shall comply with applicable Law and Regulatory Requirements in relation to the performance of its obligations and the exercise of its rights under this Contract, and/or otherwise connected with its use, occupation, control or management of the Sites.

3.3. Not Wilfully Impede Performance of the Tasks

3.3.1 Without prejudice to Clause 3.1 (Authority Directions), and its rights under this Contract, the Authority shall:

3.3.1.1 co-operate with the Contractor to facilitate the performance of its obligations under this Contract; and

3.3.1.2 not wilfully impede the Contractor in performing its obligations under this Contract.

3.3.2 The Contractor shall not have any liability to the Authority under this Contract to the extent that the Authority has not complied with its obligations pursuant to Clause 3.3.1 above in any material respect.

3.4 Authority responses

3.4.1 Unless otherwise expressly specified in this Contract or agreed between the Parties, where the Authority is required to respond in writing to the Contractor on any matter, the Authority shall use reasonable endeavours to do so within thirty (30) Calendar Days of receipt of such a request.

3.4.2 Where the Authority does not respond within the relevant period, and there is an impact on the cost or schedule of the Tasks as a result of such Authority delay, the Contractor shall be entitled to bring a Change Proposal in accordance with Clause 2.6 (Setting the LTP and Change Control) to address such impact.

3.5 Failure of Performance

If at any time during the period of this Contract, either Party becomes aware of:

3.5.1 a failure by the other Party to perform any obligations to which it is subject pursuant to this Contract; and/or

3.5.2 a defect of any nature in the performance and provision of any Tasks by the Contractor and any Subcontractor, or Sub-Sub-contractor

which in either case, in the reasonable opinion of that Party, has an adverse effect on the proper performance of this Contract it shall immediately notify the other Party.

In particular, but without limiting the foregoing, each Party shall immediately notify the other Party of any failure of performance or defect of which it becomes aware which may give rise to any liability to the other Party.

3.6. Authority Rights In Respect Of Customer Contracts

3.6.1 New Business and Amendments to Customer Contracts

3.6.1.1 Except to the extent that the Contractor has Permitted Activities pursuant to clause 3.6.4 (Permitted Activities) and subject to the Authority’s rights under Clause 3.6.3 (Authority’s right to instruct), the Contractor shall not enter into new Customer Contract (a “New Customer Contract”) nor amend any existing Customer Contract (or suggest to the counterparty any amendment other than on a without prejudice basis) unless the Authority has given its prior written consent pursuant to Paragraph 3.5 of the Part 1 of the Commercial Schedule (Customer Contracts).

3.6.1.2 In seeking the Authority’s prior written consent to a New Customer Contract or an amendment (an “Amendment”) to an existing Customer Contract, the Contractor shall consult with the Authority in accordance with Paragraph 1 of Part 1 of the Commercial Schedule (Customer Contracts) and the procedure set out in Paragraphs 1 to 3 of Part 1 of the Commercial Schedule (Customer Contracts) shall apply (as applicable).

3.6.2 Authority’s right to be consulted in respect of Customer Contracts

Except to the extent that the Contractor has Permitted Activities pursuant to Clause 3.6.4 (Permitted Activities), the Contractor shall consult the Authority in respect of the exercise of any discretion under the Customer Contracts including:

3.6.2.1 whether or not to exercise any rights under the relevant Customer Contract (including any rights to terminate);

3.6.2.2 whether or not to waive (or choose not to enforce) any obligations of the counterparty under the relevant Customer Contract in whole or in part or to seek or accept a waiver from the counterparty of the Contractor’s obligations under the relevant Customer Contract;

3.6.2.3 choosing between any options that arise concerning the manner in which the Contractor could perform the relevant Customer Contract;

3.6.2.4 when the Contractor is uncertain about what it is required to do under the relevant Customer Contract;

3.6.2.5 how to mitigate any problems that arise under or in connection with any Customer Contract,

and the procedure set out in Paragraph 1 of Part 1 the Commercial Schedule (Customer Contracts) shall apply.

3.6.3 Authority’s right to instruct

3.6.3.1 Notwithstanding the Permitted Activities under Clause 3.6.4 (Permitted Activities), the Authority shall be entitled to instruct the Contractor to exercise or not exercise its rights, or perform or not perform its obligations, or otherwise act, in a specified manner in

relation to any of the Customer Contracts including requiring the Contractor to:

3.6.3.1.1 seek to amend any Customer Contract either through the Customer Contract’s variation mechanism or through the mutual agreement of the parties to the Customer Contract;

3.6.3.1.2 resist an amendment proposed by a counterparty to the relevant Customer Contract;

3.6.3.1.3 enter or not enter into a New Customer Contract in accordance with timescales, with counterparties and on terms specified by the Authority;

3.6.3.1.4 enforce or not enforce the counterparty’s obligations under a Customer Contract;

3.6.3.1.5 terminate or not terminate a Customer Contract;

3.6.3.1.6 waive or not waive any of the counterparty’s obligations under a Customer Contract.

3.6.3.2 If the Authority wishes to issue instructions to the Contractor pursuant to Clause 3.6.3.1 above, the Authority shall, where practicable, discuss the relevant issue with the Contractor and the Contractor shall assist the Authority in obtaining any information that the Authority may reasonably require. During such discussion, the Contractor shall (having regard to the preliminary nature of the Authority’s wish to issue instructions) inform the Authority of any impact of which the Contractor is aware that the relevant issue may have upon the Authority, the Contractor, any Subcontract or Series of Subcontracts, the performance of or terms of this Contract (including the application of Part 4 of the Finance Schedule (Costs Principles and Procedures)) or the Customer Contracts.

3.6.3.3 If the Authority wishes to issue instructions to the Contractor pursuant to Clause 3.6.3.1 above, the Authority shall serve an Instructions Notice on the Contractor setting out the information listed at Paragraph 4.1 of Part 1 of the Commercial Schedule (Customer Contracts) and the Parties shall follow the procedure set out in Paragraphs 4 and 5 of Part 1 of the Commercial Schedule (Customer Contracts).

3.6.4 Permitted Activities

3.6.4.1 Subject to Clauses 3.6.3 (Authority’s right to instruct) and 3.6.4.2 to 3.6.4.4 (inclusive), the Contractor shall be entitled to take such action in relation to new or existing Customer Contracts as is permitted by the Permitted Activities without seeking the consent of or consulting with the Authority under Part 1 of the Commercial Schedule (Customer Contracts) provided that, unless the Authority agrees otherwise, the Contractor shall ensure that:

3.6.4.1.1 no New Customer Contract or no Amendment (as the case may be) contains any term which:

3.6.4.1.1.2 provides the counterparty to the Customer Contract with a right of consent or a right of termination if the Contractor is subject to a Change in Control;

3.6.4.1.1.3 directly or indirectly excludes or attempts to exclude any right of the Authority which arises under the Contracts (Rights of Third Parties) Xxx 0000 or in any other way seeks to prevent the Authority from enforcing the terms of the Customer Contract;

3.6.4.1.2 Not used

3.6.4.1.3 Not used

3.6.4.1.4 any New Customer Contract includes:

3.6.4.1.4.1 provisions allowing the disclosure to the Authority by the Contractor of such Customer Contract and any information passing between the parties in relation to it and, where permitted under Part 10 (Confidentiality, Security and Compliance with Law), disclosure by the Authority to Third Parties;

3.6.4.1.4.2 an acknowledgement by the counterparty to the Customer Contract of the Contractor’s obligations to comply with, and the Authority’s rights under, Clauses 4.1 (Reporting and Reviewing), 4.2 (Records), 4.5 (Inspection and Audit) and Part 10 (Confidentiality, Security and Compliance with Law) and a waiver of any liability that may arise under the Customer Contract as a result of the Contractor complying with its obligations under such Clauses of this Contract;

3.6.4.1.4.3 an obligation on the counterparty to the Customer Contract to make its employees available for the purposes of the Authority’s audit under Contract Clause 4.5 (Inspection and Audit);

3.6.4.1.4.4 if the Customer Contract is governed by English law, an obligation on the counterparty to the Customer Contract to become a party to the Dispute Resolution Procedure and comply with the obligations contained therein;

3.6.4.1.4.5 an obligation on the counterparty to the Customer Contract to permit the Authority to

attend meetings between the Contractor and the Customer and/or Customer Groups;

3.6.4.1.4.6 a Termination for Convenience provision enabling the Contractor to terminate at any time on giving reasonable notice to the counterparty to the Customer Contract. In the event of such Termination for Convenience, the Contractor shall only agree, subject to the Authority’s approval, to pay the relevant counterparty’s reasonable costs arising directly from the termination of the Customer Contract and shall not agree any payment in respect of loss of anticipated profits, loss of opportunity or the consequential losses of affiliates of the counterparty;

3.6.4.1.4.7 a provision ensuring that the Customer Contract is capable of being assigned to the Authority’s nominee either without the consent of the counterparty to the Customer Contract or with the consent of the counterparty to the Customer Contract such consent not to be unreasonably withheld,

3.6.4.1.5 that no Amendments contains a term which purports to directly or indirectly exclude (as the case may be) any of Clauses 3.6.4.1.4.1 to 3.6.4.1.4.7 above.

3.6.4.1.6 where an existing Customer Contract contains any of the terms in Clause 3.6.4.1.1 or excludes or attempts to exclude (as the case may be) any of the terms in Clause 3.6.4.1.4.1 to 3.6.4.1.4.7, the Contractor shall use reasonable endeavours to ensure that an Amendment alters the terms of the existing Customer Contract so that such existing Customer Contract does not include any of the terms in Clause 3.6.4.1.1 and does not exclude or attempt to exclude (as the case may be) any of the terms in Clause 3.6.4.1.4 but declaring that the exercise of such reasonable endeavours shall not relieve the Contractor of any liability consequent to their breach of clauses 3.6.4.1.1 and 3.6.4.1.4;

3.6.4.2 In exercising its Permitted Activities, the Contractor shall take into consideration any current strategy for Customer Contracts of the Authority as notified to the Contractor by the Authority from time to time.

3.6.4.3 Notwithstanding the Permitted Activities, the implementation of any Task or the addition of any New Task to the LTP which requires three million pounds (£3,000,000) or more of Costs over the lifetime of such Task or New Task (as applicable) and/or is novel and/or contentious and/or repercussive will be subject to the requirements of

Part 3 of the Programme Management Schedule (Project Validation and Financial Sanction).

3.6.4.4 The Authority shall be entitled in its sole discretion at any time to amend, add or withdraw any Permitted Activity by serving a notice in writing on the Contractor setting out the relevant amendment, addition or withdrawal.

3.6.4.5 Subject to Clause 3.6.4.6 below, the amendment, addition or withdrawal of any Permitted Activity shall be effective seven (7) Calendar Days after the receipt of the Authority’s written notice and the Contractor shall as soon as practicable amend the Permitted Activities to reflect the amendment, addition or withdrawal set out in the Authority’s written notice.

3.6.4.6 If the Contractor reasonably considers, given the nature of the Permitted Activity and the circumstances in which it is used, that it is inappropriate for the relevant Permitted Activity to be amended, added or withdrawn, the Authority (acting reasonably) shall consider any representations made to it by the Contractor (including in respect of altering the time period in which the amendment, addition or withdrawal of the relevant Permitted Activity becomes effective).

3.6.4.7 The Contractor shall be entitled to request any new Permitted Activities, the amendment of any existing Permitted Activities or the update of Permitted Activities to reflect the current LTP by following the procedure set out in Paragraph 6 (Amending Permitted Activities and New Permitted Activities) of Part 1 of the Commercial Schedule (Customer Contracts).

3.6.4.8 If the Contractor is uncertain whether any of its activities in respect of the Customer Contracts (including any proposed exercise of a discretion under a Customer Contract, entry into a New Customer Contract or Amendment to an existing Customer Contract) falls within its Permitted Activities, it shall consult with the Authority to obtain confirmation of whether or not the proposed activity is a Permitted Activity or whether the Contractor is obliged to obtain the Authority’s consent to carry out the activity.

3.6.4.9 For the avoidance of doubt, notwithstanding the Permitted Activities, the Contractor shall be obliged to comply with its obligations to seek Authority approval and/or consult with the Authority in accordance with any provision of this Contract other than this Clause 3.6 (Authority Rights in Respect of Customer Contracts).

3.7 Customer Contract Log

Except to the extent that the Contractor has Permitted Activities pursuant to Clause 3.6.4 (Permitted Activities), the Contractor shall keep a record (a “Customer Contract Log”) which sets out the progress of:

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DATED 2007 The Nuclear Decommissioning Authority (1) and Magnox Electric Limited (2) and Energy Sales and Trading Limited (3)